FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) October 19, 1999
CRANE CO.
(Exact name of registrant as specified in its charter)
Delaware 1-1697 13-1952290
(State or Other Jurisdiction (Commission File (IRS Employer)
of Incorporation) Number) Identification)
100 First Stamford Place, Stamford, CT 06902
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, Including Area Code 203-363-7300
<PAGE>
Item 5. Other Events
Crane Co. has previously announced its intention, subject to receipt of a
tax-free ruling from the Internal Revenue Service, to distribute to its
shareholders all of the outstanding common stock of its Huttig Building Products
("Huttig") subsidiary in a tax-free spin-off. On October 19, 1999 Crane Co.
entered into a Share Exchange Agreement with The Rugby Group PLC pursuant to
which, immediately after the spin-off of Huttig to Crane Co. shareholders,
Huttig would acquire all of the outstanding common stock of Rugby USA, Inc.
("Rugby USA"), the U.S. building products business of Rugby PLC, in exchange for
32% of the common stock of Huttig. Crane Co. shareholders would hold 68% of the
Huttig common stock immediately after the acquisition of Rugby USA. It is
expected that the spin-off and the acquisition will be completed prior to the
end of the year. A revised Form 10 explaining the spin-off and the acquisition
will be filed by Huttig with the Securities and Exchange Commission within a
week.
Concurrent with the transaction it is anticipated that Huttig will issue
long-term debt, the proceeds of which will repay indebtedness to Crane Co. and
Rugby PLC. This amount is expected by the parties to be in the range of $100
million and will be paid to Crane Co. and Rugby in the same 68% / 32% ratio as
the equity ownership. Crane Co. will reduce debt upon receipt of the cash
payment from Huttig.
As a result of the spin-off and Crane Co. exiting the building products
wholesale distribution business, Crane Co. will report the results of Huttig as
a discontinued operation. The pro forma effects of the spin-off as of June 30,
1999 and for the fiscal year ended December 31, 1998 and the six months ended
June 30, 1999 are set forth in the accompanying pro forma financial statements.
Item 7. Financial Statements and Exhibits
(b) Pro Forma Financial Information. Unaudited pro forma consolidated balance
sheet of the Registrant as of June 30, 1999 and consolidated statements of
income for the six-month period ended June 30, 1999 and for the year ended
December 31, 1998.
Pursuant to the requirements of the Securities and Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Crane Co.
David S. Smith
By: /s/ David S. Smith
Vice President - Finance and
Chief Financial Officer
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CRANE CO.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated financial information
of the Registrant is based on the historical consolidated financial statements
of the Registrant and has been prepared to illustrate the effects of the Huttig
spin-off as though it had occurred as of the beginning of the periods presented
for the pro forma condensed consolidated statements of income and as if it had
occurred on June 30, 1999 for the pro forma condensed consolidated balance
sheet.
The pro forma adjustments described in the notes to the pro forma financial
information include, in the opinion of management, all adjustments necessary to
give pro forma effect to the spin-off as though such transaction had occurred as
of the beginning of the period presented for the pro forma condensed
consolidated statements of income and as if it had occurred on June 30, 1999 for
the pro forma condensed consolidated balance sheet.
The unaudited pro forma condensed consolidated financial information is not
necessarily indicative of how the Registrant's balance sheet and results of
operations would have been presented had the spin-off actually been consummated
at the assumed date, nor is it necessarily indicative of the Registrant's
balance sheet and results of operations for any future period. Additionally,
there can be no assurance that the spin-off will be effected. The unaudited pro
forma condensed consolidated financial information should be read in conjunction
with the historical consolidated financial statements and related notes thereto
included in the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1998 and the Registrant's Quarterly Report on Form 10-Q for the six
months ended June 30, 1999 and the Form 10 of Huttig Building Products, Inc.
filed on September 21, 1999.
The pro forma adjustments are based upon available information. These
adjustments are directly attributable to the spin-off and are expected to have a
continuing impact on the Registrants business, results of operations and
financial position.
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<TABLE>
Crane Co. and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of June 30, 1999
(In Thousands)
<CAPTION>
Historical (1) Pro Forma
Crane Co. Huttig Adjustment (2) Pro Forma (1)
Assets
<S> <C> <C> <C> <C>
Current Assets
Cash and Cash Equivalents $ 7,548 $ 220 $ 7,328
Accounts Receivable 324,042 80,857 243,185
Inventories 323,390 49,288 274,102
Other Current Assets 45,487 4,676 40,811
------- ------- -------
Total Current Assets 700,467 135,041 565,426
Property, Plant and Equipment-net 298,043 37,821 260,222
Other Assets 78,946 3,310 75,636
Cost in Excess of Net Assets Acquired 353,413 40,151 313,262
---------- ------- ----------
Total Assets $1,430,869 $216,323 $1,214,546
========== ======== ==========
Liabilities and Shareholders Equity
Current Liabilities
Accounts and Notes Payable $ 183,647 $ 66,759 $16,945 $ 133,833
Other Current Liabilities 152,329 16,578 135,751
------- ------ ------ -------
Total Current Liabilities 335,976 83,337 16,945 269,584
Long-Term Debt 318,785 93,435 24,182 249,532
Other Liabilities 91,403 7,377 84,026
Shareholders Equity
Common Stock, Capital Surplus and Retained Earnings 803,504 32,174 (41,127) 730,203
Accumulated Other Comprehensive Income (Loss) (22,237) (22,237)
Common Stock Held in Treasury (96,562) (96,562)
------- ------ -------- -------
Total Shareholders Equity 684,705 32,174 (41,127) 611,404
---------- -------- -------- ----------
Total Liabilities and Shareholders Equity $1,430,869 $216,323 $ - $1,214,546
========== ======== ======== ==========
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Information
</TABLE>
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<TABLE>
Crane Co. and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Statement of Income
For The Six Months Ended June 30, 1999
(In Thousands, Except Per Share Amounts)
<CAPTION>
Historical (1) Pro Forma
Crane Co. Huttig Adjustments Pro Forma (1)
<S> <C> <C> <C> <C>
Net Sales $1,186,069 $380,754 $805,315
Operating Costs and Expenses:
Cost of sales 856,943 330,323 526,620
Selling, general and administrative 172,643 35,362 137,281
Depreciation and amortization 34,292 3,272 31,020
--------- ------- -------
1,063,878 368,957 694,921
Operating Profit 122,191 11,797 110,394
Other Income (Expense) (9,049) (4,508) $(2,088) (3) (6,629)
-------- ------- ------- --------
Income Before Taxes 113,142 7,289 (2,088) 103,765
Provision for Income Taxes 40,165 2,769 (793) (4) 36,603
---------- -------- -------- --------
Net Income $ 72,977 $ 4,520 $(1,295) $ 67,162
========== ======== ======== ========
Net Income Per Share:
Basic $1.07 $.99
Diluted 1.06 .98
Average Basic Shares Outstanding 68,090 68,090
Average Diluted Shares Outstanding 68,702 68,702
Dividends Per Share $.20 $.20
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Information
</TABLE>
<PAGE>
<TABLE>
Crane Co. and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Statement of Income
For The Year Ended December 31, 1998
(In Thousands, Except Per Share Amounts)
<CAPTION>
Historical (1) Pro Forma
Crane Co. Huttig Adjustments Pro Forma (1)
<S> <C> <C> <C> <C>
Net Sales $2,268,505 $707,450 $1,561,055
Operating Costs and Expenses
Cost of sales 1,624,667 606,993 1,017,674
Selling, general and administrative 343,448 67,900 275,548
Depreciation and amortization 61,458 5,586 55,872
--------- ------- ---------
2,029,573 680,479 1,349,094
Operating Profit 238,932 26,971 211,961
Other Income (Expense) (24,291) (5,120) $(3,303) (3) (22,474)
-------- ------- -------- --------
Income Before Taxes 214,641 21,851 (3,303) 189,487
Provision for Income Taxes 76,203 8,255 (1,248) (4) 66,700
---------- -------- -------- ----------
Net Income $ 138,438 $ 13,596 $(2,055) $ 122,787
========== ======== ======== ==========
Net Income Per Share:
Basic $2.02 $1.79
Diluted 2.00 1.77
Average Basic Shares Outstanding 68,555 68,555
Average Diluted Shares Outstanding 69,368 69,368
Dividends Per Share $.37 $.37
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Information
</TABLE>
<PAGE>
Crane Co.
Notes to Unaudited Pro Forma Condensed Consolidated Financial Information
(1) These columns reflect the historical results of operations and financial
position of the respective companies. The pro forma column reflects
the spin-off of Huttig and the pro forma adjustments set forth below.
(2) The following adjustment reflects the impact of the elimination of
intercompany amounts included in the Huttig column, the payment of
$68.0 million by Huttig to Crane Co. and the concurrent reduction of
debt by Crane Co., and the recording of the dividend to effect the
spin-off on the June 30, 1999 Crane Co. consolidated balance sheet
captions "Accounts and Notes Payable", "Long-Term Debt", and
"Shareholders Equity":
Accounts and Notes Payable
Huttig historical $66,759
Pro Forma Adjustment-Intercompany payables eliminated
in consolidation (16,945)
-------
Effect of Huttig spin-off $49,814
=======
Long-Term Debt
Huttig historical $93,435
-------
Intercompany debt eliminated in consolidation (92,182)
Repayment of intercompany debt and reduction of Crane Co. debt 68,000
--------
Pro Forma Adjustment (24,182)
-------
Effect of Huttig spin-off $69,253
=======
Shareholders Equity
Huttig historical $32,174
-------
Huttig shareholders equity eliminated in consolidation (32,174)
-------
Dividend
Huttig net assets 141,301
Cash payment received from Huttig (68,000)
-------
Subtotal 73,301
------
Pro Forma Adjustment 41,127
-------
Effect of Huttig spin-off $73,301
=======
(3) The following adjustment reflects the impact of the elimination of
intercompany amounts included in the Huttig column and the payment of
$68.0 million by Huttig to Crane Co. and the concurrent reduction
of debt by Crane Co. on the Crane Co. consolidated statement of
income caption "Other income/(expense)" for the six months ended
June 30, 1999 and the year ended December 31, 1998.
Six Months Ended June 30, 1999
Huttig historical $4,508
------
Intercompany interest expense eliminated in consolidation (3,788)
Reduction of interest expense on $68.0 million of debt
assuming 5% interest rate 1,700
------
Pro Forma Adjustment (2,088)
------
Effect of Huttig spin-off $2,420
======
Year Ended December 31, 1998
Huttig historical $5,120
------
Intercompany interest expense eliminated in consolidation (6,703)
Reduction of interest expense on $68.0 million of debt
assuming 5% interest rate 3,400
-----
Pro Forma Adjustment (3,303)
------
Effect of Huttig spin-off $1,817
======
(4) Reflects the income tax effect of the pro forma adjustments.
