First Quarter 2021 Highlights

• GAAP earnings per diluted share (EPS) of $1.84.
• Excluding Special Items, EPS of $1.66 increased 44% compared to $1.15 in the first quarter of 2020.
• Raising GAAP EPS Guidance to $5.75-$5.95, from $4.95-$5.15.
• Raising EPS Guidance, excluding Special Items, to $5.65-$5.85, from $5.00-$5.20.

Crane Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, reported first quarter 2021 financial results and updated its full-year 2021 outlook.

Max Mitchell, Crane Co. President and Chief Executive Officer stated: “We delivered exceptionally strong results in the first quarter. Each of our three global strategic growth platforms delivered robust results ahead of expectations, with Crane Currency driving the most substantial outperformance in the quarter. Across all of our businesses and end markets, while uncertainty still exists, we continue to see strengthening underlying trends. In addition, we continue to drive growth above market rates through our consistent investment in technology and strategic growth initiatives. We are extremely well positioned to continue this outgrowth as end markets recover, and we expect strong operating leverage given our consistently solid execution. We look forward to providing additional details of our growth outlook specifically at Aerospace & Electronics during our upcoming May 26 virtual investor event."

"Considering our strong performance in the first quarter and improving market conditions, we are raising our adjusted EPS guidance by $0.65 to a range of $5.65-$5.85 reflecting a 50% year-over-year increase in adjusted EPS. We have clear momentum from strengthening markets, as well as increasing traction with our growth initiatives, and I am confident that we are on a path to generate substantial and sustainable value for all of our stakeholders.”

First Quarter 2021 Results

First quarter 2021 GAAP earnings per diluted share (EPS) of $1.84, compared to $1.05 in the first quarter of 2020. First quarter 2021 GAAP EPS included an $0.18 gain primarily related to the sale of real estate. Excluding Special Items, first quarter 2021 EPS was $1.66, compared to $1.15 in the first quarter of 2020. (Please see the attached Non-GAAP Financial Measures tables for a detailed reconciliation of reported results to adjusted measures.)

First quarter 2021 sales were $834 million, an increase of 5% compared to the first quarter of 2020. The sales increase was comprised of a $25 million, or 3%, benefit from favorable foreign exchange, a $5 million, or 1%, increase in core sales, and a $5 million, or 1%, benefit from an acquisition.

First quarter 2021 operating profit was $146 million, compared to $89 million in the first quarter of 2020. Operating profit margin was 17.6%, compared to 11.1% last year, with the improvement driven primarily by benefits of 2020 cost actions, productivity, and continued strong performance at Crane Currency. Excluding Special Items, first quarter 2021 operating profit was $135 million, compared to $96 million last year. Excluding Special Items, operating profit margin was 16.2%, compared to 12.0% last year. (Please see the attached Non-GAAP Financial Measures tables for a detailed reconciliation of reported results to adjusted measures.)

Cash Flow and Other Financial Metrics

Cash provided by operating activities in the first quarter of 2021 was $50 million, compared to a use of $36 million in the first quarter of 2020. Capital expenditures in the first quarter of 2021 were $5 million, compared to $8 million last year. First quarter 2021 free cash flow (cash provided by operating activities less capital spending) was positive $45 million and compared to negative $43 million last year.

During the first quarter, we received cash proceeds of $15 million from the sale of real estate in Long Beach, California that was recorded as cash from investing activities, and consequently, excluded from free cash flow. The property sale was enabled by prior repositioning activities that relocated our Long Beach manufacturing operations to other facilities. Since 2017, we have received proceeds from the sale of real estate and other assets facilitated by repositioning activities of approximately $47 million.

The Company held cash and short-term investments of $588 million at March 31, 2021, compared to $581 million at December 31, 2020. Total debt was $1,190 million at March 31, 2021, compared to $1,219 million at December 31, 2020.

On April 15, 2021, the company repaid its $343 million 364-day term loan. As this repayment was subsequent to the end of the first quarter, it is not reflected in our cash or debt balances as of March 31, 2021.

First Quarter 2021 Segment Results

All comparisons detailed in this section refer to operating results for the first quarter 2021 versus the first quarter 2020.

Fluid Handling

Sales of $288 million increased $31 million, or 12%, driven by a $15 million, or 6%, increase in core sales, a $12 million, or 5%, benefit from favorable foreign exchange, and a $5 million, or 2%, benefit from an acquisition. Operating profit margin increased to 17.4%, compared to 10.9% last year, primarily reflecting a gain on the sale of real estate, productivity, benefits from 2020 cost actions, and the impact of higher sales volumes. Excluding Special Items, operating margin increased to 13.4%, compared to 12.2% last year. Fluid Handling order backlog was $325 million at March 31, 2021, compared to $313 million at December 31, 2020, and compared to $293 million at March 31, 2020.

Payment & Merchandising Technologies

Sales of $338 million increased $40 million, or 13%, driven by a $27 million, or 9%, increase in core sales, and a $13 million, or 4%, benefit from favorable foreign exchange. Operating profit margin increased to 25.4%, from 8.9% last year, primarily reflecting continued strong performance at Crane Currency, productivity, and benefits from 2020 cost actions. Excluding Special Items, operating profit margin increased to 25.3%, from 10.3% last year.

Aerospace & Electronics

Sales of $154 million decreased $39 million, or 20%. Operating profit margin declined to 16.9%, from 22.7% last year, primarily reflecting the impact of lower core volumes, partially offset by benefits from 2020 cost actions. Aerospace & Electronics' order backlog was $482 million at March 31, 2021, compared to $491 million at December 31, 2020, and compared to $548 million at March 31, 2020.

Engineered Materials

Sales increased $3 million, or 6%. Operating margin declined to 11.8%, from 13.6% last year.

Updating Full Year Outlook

We are raising our 2021 full year GAAP EPS guidance to a range of $5.75-$5.95, compared to the prior range of $4.95-$5.15.

We are raising our 2021 full year EPS guidance excluding Special Items (adjusted) to a range of $5.65-$5.85, compared to the prior range of $5.00-$5.20. Revised guidance now assumes core sales growth of +4% to +6%, compared to the prior range of +2% to +4%. Additional details of our revised guidance are shown in the following table (Please see the attached non-GAAP Financial Measures tables.)

Additional Information

Additional information with respect to the Company’s asbestos liability and related accounting provisions and cash requirements is set forth in the Current Report on Form 8-K filed with a copy of this press release.

Conference Call

Crane Co. has scheduled a conference call to discuss the first quarter financial results on Tuesday, May 4, 2021 at 10:00 A.M. (Eastern). All interested parties may listen to a live webcast of the call at http://www.craneco.com. An archived webcast will also be available to replay this conference call directly from the Company’s website under Investors, Events & Presentations. Slides that accompany the conference call will be available on the Company’s website.

Crane Co. is a diversified manufacturer of highly engineered industrial products. Founded in 1855, Crane Co. provides products and solutions to customers in the chemicals, oil & gas, power, automated payment solutions, banknote design and production and aerospace & defense markets, along with a wide range of general industrial and consumer related end markets. The Company has four business segments: Fluid Handling, Payment & Merchandising Technologies, Aerospace & Electronics and Engineered Materials. Crane Co. has approximately 11,000 employees in the Americas, Europe, the Middle East, Asia and Australia. Crane Co. is traded on the New York Stock Exchange (NYSE:CR). For more information, visit www.craneco.com.

This press release may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are based on the management’s current beliefs, expectations, plans, assumptions and objectives regarding Crane Co.’s future financial performance and are subject to significant risks and uncertainties. Any discussions contained in this press release, except to the extent that they contain historical facts, are forward-looking and accordingly involve estimates, assumptions, judgments and uncertainties. There are a number of factors, including risks and uncertainties related to the ongoing COVID-19 pandemic, that could cause actual results or outcomes to differ materially from those expressed or implied in these forward-looking statements. Such factors also include, among others: uncertainties regarding the extent and duration of the impact of the COVID-19 pandemic on many aspects of our business, operations and financial performance; changes in economic, financial and end-market conditions in the markets in which we operate; fluctuations in raw material prices; the financial condition of our customers and suppliers; economic, social and political instability, currency fluctuation and other risks of doing business outside of the United States; competitive pressures, including the need for technology improvement, successful new product development and introduction and any inability to pass increased costs of raw materials to customers; our ability to value and successfully integrate acquisitions, to realize synergies and opportunities for growth and innovation, and to attract and retain highly qualified personnel and key management; a reduction in congressional appropriations that affect defense spending and our ability to predict the timing and award of substantial contracts in our banknote business; adverse effects on our business and results of operations, as a whole, as a result of increases in asbestos claims or the cost of defending and settling such claims; adverse effects as a result of environmental remediation activities, costs, liabilities and related claims; investment performance of our pension plan assets and fluctuations in interest rates, which may affect the amount and timing of future pension plan contributions; and other risks noted in reports that we file with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and subsequent reports filed with the Securities and Exchange Commission. Crane Co. does not undertake any obligation to update or revise any forward-looking statements.

(Financial Tables Follow)

The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). Certain non-GAAP measures are provided in this presentation. Management believes that non-GAAP financial measures which exclude certain non-recurring items present additional useful comparisons between current results and results in prior operating periods. Specifically, management believes that, when considered together with reported amounts, these non-GAAP measures are useful to investors and management in understanding ongoing operations and by providing a clearer view of the underlying trends of the business. In addition, Free Cash Flow provides supplemental information to assist investors and management in analyzing the Company’s ability to generate liquidity from its operating activities. The measure of Free Cash Flow does not take into consideration certain other non-discretionary cash requirements such as, for example, mandatory principal payments on the Company's long-term debt. Management uses non-GAAP financial measures in evaluating the Company's core operating results and financial performance. Non-GAAP financial measures, which may be inconsistent with similarly captioned measures presented by other companies, should be viewed as a supplement to, and not as a substitute for or superior to, the Company’s reported results prepared in accordance with GAAP. Reconciliations of the Company’s non-GAAP financial measures to the most directly comparable GAAP results are included in the tables at the end of this press release.

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