Document 70o189M8LZODDkwEOzp1zVXKo

Crane Co. 1989 Annual Report L- / / / / I ! CRTX 0755 Crane Co. Cover ; i! *},! i - 5 (}(. i h >1 * .1C J N CM ' l', M * 5 Kl'ilr u i.iluiiuht u- 1; ' .nN r*r< i !<: (<<!.s>' * ' h.} ^.\\* ! vi * v t J;, l, .licljli'j t 'i.h'm I. ,.i)c' ! i!) I" V* (. m ;*! .*( i ill If XI Jjii i)i!i m \.,i * \u*i i ii ` i i* i.<! ' . ` *t Table of Contents * ^ lb- ` ,.** "* * * n*(<It ' ':< (I}* r.iiimw J ! .'! ul N.ilrjr.cSH I; I .-HU ul Rr\ leu I It* M.f'Mjirnieni ^ -I I J*r< inr*. jnd ():!u iT" h'.Mclc Px'R k (. *i\T Operations Engineered Industna. Products (. la m/hi tu/i !K`* 'vs./ i*i iii^.> -s . (_* in tint l\ti: inn-1. N -ii m- fl" i-iou K.j'j; *>? p. ( j, , ( ii.'i,/ lA .* i . :* H ,/..> I .!/* ` nth /" - -.'if, i'l'ta ' ' : t f at* I \ l\ <> '< til' ii. *./. In Pv'.s'-- in!,: d . ':</?/ . i i. ! u ' M.......... \i!-' ; l-n ; > / `A-, v- in/ % f, \ /k i. ,t .. ' .t't 1.;<I Mv Wholesale Distribution S.ft/1 J.' l\.ir Cn rticid. Mivmuih 1.1 */ ii. Oniiuht. hu . L i<iih ,'tiipph llit istini M. ii'.i rt-ai (.anacla * CRTX ' Cnggg^ftgjrtn * *'v^r*?- r^y<.*' m-' : . 1968 ' 1987 ? 1906'-'.- :1985^f Financial Highlights Net Sales. . .. Operatingftofit .:'v Income beforeTaxes-- ' ' ' Continuing Operations -, . $1,455589 $1313.136 $1399396 $1jM3JI8 $960702 {- 10Sfl*5 ; 95366:. 75,13* 75m ! ; .38394*.":'.v - ' .V ' . . -! '* '" . ` ' ,, 91,579 81,490 58541 ' ` 55305 20345. ;'. Income Taxes . <35060) (32304) (25337) (26520) (6360) Income from Continuing Operations'" $ 55^19 $ 49.186 S 32304** S 28.785 S 14585 Per Primary Share* , ; . . . Income fi^CbntimiirOperations"* 91.72 . ' $1.46 . $L97 $wK 948 : .Cash Dividends Declared . Average Shares Outstanding ; . .62 37,583 33356 38 33326 32 '. 30367- ; 30390 - ' w fMlmkt tm+mlhm ntmutUamhlui b tJunbUn a MIS*; It 39fitAon m NNt JLW.!?* it t'Cfinkmi m tm~. SltiXIiSMfit tbmt . m mi. *mJt3.0l:iSM>fiTibrlu ... ... ' ,- fa.Vj*skJl*5t>ltkxi<bjt>ilmtxmn t*W.llllrrfixtm)ixltltiilill ElliT.SlItitakdatritmtMimtWtiiiliJZIsIntJiridniJimttHZ.' . , to lmn,mrbl*r<*mnliSwrrftrU4<i>&&i**w*ti**`ifSS.<i73 #16finikin). . V." .. .-. ..- ' . . >J`Iml*Jnrlmrfrfvrmmnnmixxrr>!nrt*tntaBhmt)ir*mmMlif$25.!li- '.. .. v ' - : \/. / _ ' ; . CRTX 0757 DearShareholders: ' Crane Cd had another excellent year in 19&). Earnings per sharefrom continuing operations increased from $1.46 to $1.72 or 18% on an 11% increase- in sales. Even better, cash flow, which consists of earnings plus depredation and non-cash chniges, was up 24% from $2,33 to $2,89 per share. Return on stockholder* equity was 20.4%. again over ourgoal of 20%, and should place us in the top 39% of Fortune 500 companies! The company's ' stock price increased 50% during the ; year compared to315% for the S&P; 500. Cash dividends wereincreased.; ;.! 12.5% from S.67 to $.75 per share and a; 50% stodc distribution was made to : increase market liquidity. .;- y:y ... %j: ' While 1989 was a strong year for; ' ; Crone, we,still have n number of areas - . which offer opportunities for improvement. The UjS. Valve operations showed :; y improvement from ongoing(derations! . However,'extensive inventory write-offs * for<BscontimiedproducttEranieessaanodcr yyj expenses at dosed plants producedan ' -." . unacceptable loss. The lower level of. ' t housing starts and reduced defense spending hurt the segments of our :: business whidi serve these markets. : In response we took actions in 1989 to ' insure improved results in these areas .. ; for 1990 nnd beyond. y; :.y Cranes debt is the lowest it has been in many years. Our net debt to equity ratio has declined from 73'% in 1987to w ; 61% in 1988 and 53% at the end of 1989.V ] Crane's strong financial position ; iyf pnnidKtliecapabiKty totakeadvanta^Sy of any opportunities toehlrari(#^^|; sharelKildffvato the weakened economic outlook and'tbejyy difficulties beingexperienced ty'nTanrj^;^-|: higfdy ieverageicompaniffi. AxpisMohs-iy | shoitld be available at favorable ptices^||. in the current eririronmdit. TbMeyyVi' Si. opportunities will be weighed agpinst'S y; thepurchaseofourown stodc at fevoraMeS | prices. During 1989 we were able tbiy y purchase the equivalent of 1.8 miOioni > y! -a,V " '* -V. CRTX 0758 shares at an merage priceof$18pershare We havejust announoed theacquisition of the Lear Romec Corporation, a . manufacturer of pumps for the aerospace industry. This acquisition adds to Hydro-Aires capabilities in the aerospace business and we believe was available on attractive finandal terms. . _ f*rinrt,c nwwrtitfl onminm.' ntr ctioro ` tiegrant.lWCfare haspursuedapolkyoftryingtoalign shareholder and management interests over the last six years. Stock options, stock appreciation rights and restricted stock have been used aggressively to achieve this gpaL The results show that Crane has provided a total cumulative return to shareholders overthe past six years of 395% versus 163% for the S&P500. In 1989, Mr. WalterJP Curley, a Crane Director since 1980, was appointed Ambassador to France and had to resign as a director. We deeply regret losing Mr. Curley's wisdom, judgment and: / j/f .m r . vurf * 1. CRTX 0759 `So Letter to ;- ' ; Shareholder^; lurniimndt : experience butarepleased and ' - : to^^^vrecantooorrectex^sl^ reassured that the United States will , problems and avoid future mistakes. ' / ^ j. be well represented by him. Mr. Dorsey . I would like to thank all Crai.^;;:;'n['-- R. Gardner, a strong advocate of \. employees for the success we have';K,? \ . shareholder interests, was appointed to . achieved and recognize that what makes ;-;! fill Mr. Curley's position. Mr. Gardner Crane a strong company are the people : 1 v had previously been a director and we who work to serve our custooters;'.-,^:^ are pleased to have him back. and shareholders. Mr. R.K. Whitley, Vice President* v . Finance, retired in 1989 after twenty* Sincerely. five years of sendee. We will miss him : i both personally and professionally. He . . made a strong contribution to Crane . . .over the years. Mr. Jeremiah E Cronin, ,; r.s. Evans;; ' > formerly.Senior Vice Resident-Finance-} } Chairman, Chief Executive Officer ' & Administration with Research-;-';-'; andPtesklehr , *" Cottrell. Inc, replaced Mr. Whitley;; ; ;: = : increased attention tbenrironmentai ;; February 26,1990 concerns has led to the appointment of . ' Mr. Anthony D. Rantaleom, Vice Resident F.nvinHiiiu'nt, Health and Safety. Cnine v\ is committed to being an environmentally...; responsible company. We will continue}. 1. xr. .j < > S' -h /y. - 4' ;vj M'-m . " * J J -*\;'iiv4*.**'v?Vi`% ;v 'K .. . ivA **v yvV CKIa (J/bU 7 ;* CRTX 0761 ' . vw . r'-ft .. Onmt Writewas reoiganized systemsto industry." in 1989by consolidating the The company's aggressiver has accelerated futuregrowthpL domestic Valve Division and maiketingefforts during 1989 forChempump products as a / ;:; . the Valve Services Group and contributed to a substantial major solution to these environ- r; relocating the headquarters to increase in sales and profits for mental problems. - \ 'vi Joliet, Illinois. This realignment the year. Operations were . . was designed to reduce overall expandedin 1989 to five loca and manufactures a line of. s:'\\ costs and better position this tions which, along with the vertical turbine and horizontal-V. business in the marketplace. In continued new construction of centrifugal pumps that primarily p addition, a full tangeof after-..' chemical plants in theGulf servethedeanandrfirtywaler ; market services, including parts, Coast area,contributed to segments in thegeneralindus-' : repairs and valve modifications these successes. trial, municipal and wastewater are now being offered from The Chcmpump Division con treatment markets. In 1989 within the same organization. centrated on maintainingand Demingcontinued toconcen- | Several low-profit product lines enhancing its market position trate its efforts on provirfingan x:. were discontinued in 1989 to as the leader in leakproofpump improvedlevdofcustomerpppV allow Crane Valves toconcen- technology, through product service and chtaining further.' p trate its marketing efforts on; improvement, new product V; penetration of the phanriaoe*#:'ijr; : moreprofitable linesof valves ' and services. Non-recurring. introductions, and designs added: deal, fuel and specialtychatfical|@ in March 1989by theacquisition maHcet&TteM6dd47Mp?%f|^; Engineered charges associated with these ;. ofthe canned motor pump .... i TurbineTransferPUmpiwith^j; Indusbnal^; (product discontimkions 'r operations of DresserIndustries' !: accounted f<rappraxirnatd!yV.. ; RadficftimpDivision. These*, Deming'sBquid lodtmgfemiui^l'ir: which preventssuifecelrakaB^iil^ ftoductsf- 80% of 1989*s loss. With thee: designs, along with-the intro-;- and environmental oontaminafMifi : charges behindit, substantial improvement is expected in 19& ;: v ValveSystems and Contmk .^ : is an industrial distributor sup; duction ofamagnericaHy driven: ; lion, has been instrumental leakproof pump, have increased gainingacceptanreintheabdve|li^>; market share for Chempump ; ,mentkmedinaaIods|^?^i^i^|3i by enablingit tooffer alternative I" ` Cochrane &mironmntdl^&^:^= plying automated valves and canned pump designs for specific pump applications. Recently,V ,. and markets water andvrasleS^f | increased EPAjpcmitoringof water treatment systems for p almost every nuyorindustry.-. ;>-/ Pi In 1989 Cochrane's operating ;- fc: : ''Vr--" *. c` Ah inventory of standard and . . specialtyvaivesandvatveactua-: tomenablesVdvaSystemsand Controlsto meet acustomer's / specHtotkmcontRdmii&Mnents. OembiginiaaUaniNmpsdnMAis^'-. waterfrom s3 mBBongaBon hotd-/v | pondfor Mgstionofacsntral^ .f; #1" -- ` I- a--V-' .V * * V' i* -/A'ts ,\ ' CRTX 0762 . performance increased signifi cantly compared to previous . aircraft MdJonndl Douglas " intbede^n,mamifectureand continued significant sales of saleofelectronic vending equip years with most product lines gaining market share both the MD-80 airplane, while com ment for snadks, hot and cold pleting the design of the new beverages, perishable food, ; domestically and overseas. MD-ll transport, which will cigarettes, currency and coin During the year, Cochrane be placed in service in the near changers. In thrreyrare. National acquired selected assets of future. Hydro-Aire provides the Vendors increased its market Belco Pollution Control Water brakecontrol systems, hydrau- share by 32% through the intro Division, formerly a division lie valves and fud boost pumps' duction ofadvanced miaopro- of Foster Wheeler USA Corp., for most of these aircraft. , cessorcontrols and product fines a major supplier of water Although a general reduction not offered by the competition., treatment and pollution ; in defense spending continues In 1989, National Vendors control equipment. Hydro-Aire manufactures to reduce Hydro-Aire's military introduced a third generation business, contracts to supply glass-front product merchandiser proprietary products for the brake controls for four critical called the SnackCenter, and a .. commercial, military and ' military programs have placed.: postal commodity vendor devd- general aviation markets. A this division in a position to / oped for the U5. Postal System. 7 ' worldwide leader in the design capitalize on any expansion of The SnackCenter contains many 7 .- and manufacture ofelectron!-:- these military opportunities in unique design features creating: l cally controlled anti-skid braking ' the '90s. Thegeneral aviation V, ' a leading edge in the largestjv 7 1 systems, Hydro-Aire products^ and commuter matkets are -V.. = segment of the full line vending ^ ji :' also indude mi extenave varietyf amtinuing to improve where:-, 7 : market. The SnackCenter1^! 7 ij, of fuel pumps, hydraulic valves.7 production rates have increased '' design features merchandising^ .fr; and other dectro-mechanical - ;;: on new derivatives ofexisting-i; flexibility, whereby both food-f:" ` devices.-': - models, with new models also and non-food items of varying;.;! v;. HydrthAire had an excellent being introduced by many of; year in 1989 as the commercial . the general aviation companies. Vl" air transport market continued ? National Vendors continued . `; toexpandat an imjwssiwnite.' ' to solidify its leadership position, ; ' Boeing achieved record sales 7 ' of its airplanes and started ' r deliveries of the new 747-400 ' , ,i:j. SSI A Nations! vendors vending \. : machine developed for the US. Postal System in operationat a busy Washington, DC, shopping man.- . Y. To removedestructive contaminants and improvetherefiafaBtyol micro- - ' ' - droits Incorporated inHydro-Ajre'sL braMngcontrol isOhsiaoniMto->L are subjected topiavnacieening^; priortofinal cncapsulatloii.; / i ' -v.:.. .- `'*i'r/-. \ . --v <- to5'-'-'s.? .-/-.f <"S . . v\. ; . - -t- (! CRTX 0763 .A size and shape cah now be industries, shined theh^jCst aridlan&t^sqrpScirioasarie'ri^: vended from product shelves levd of product in its 35year key part ofCorTec's marketing that quickly adjust inherit, history. By successfully intro strategy to drive futuregrowfli. ? width and depth which creates ducing new products such as a Myflon manufactures high 7. ' new vending machine product translucent fiberglass roofpanel performance microwave sub- ; applications. National Vendors for the transportation market strate materials and capacitors , received a majorcontract to and by expanding its distributor fxuse inmiKtaryandajmmer- ; : | engineerand manufacture the network, Kemlite was able to dal commumcatigns, aerospace ?. postal commodity vendorthat increase its overall market share and medical industries. The ' is now being placed at postal during 1989. Glashorid roof panel magnetic resonance imaging ` ; facilities and high traffic continues to replace aluminum (MRI) market continues tooffer locations throughout the US. in truck todies and trailers,: . new applications for RrfyflonV This advanced microprocessor- following Ryder Truck's con components and materials. . ' controlled unit accepts up to version of its entire rental fleet Polyflon's prqmetary processVY. $20.00 bills and dispenses 16 selections of postage merchan to Glasbord International sales ofelectroplating polytetrafluoimproved significantly in 1989, roethylene(PTF^ has enhanced : dise. A continued commitment and an even faster sales pace is to research and development 3 expected in 1990.,' ; l ; along with aggressive market ] CorTecis the largest VS.'/ MR! coil performance and -f: r p-\V improved imagequality. RrfyBon ^-' looks for excdlditreadtsjuii^?; positioning programs will ensure ; manufacturererf customde^gned; this growth Engineered / National Vendors' futuregrowth^ ; fiberglass reinforced plywood Industrial? % firits fuD range ofproduct entries;:; (FRP) laminates. These panels}; transferand poatjoningdeviderf^|| KemliteCompany,theleading; (mi primarily used for truck to the indostiial amqmaiiqnt^M^ Products?;" supplier of fiberglass reinforced: . bodies and trailers, although hwitimml) ' plastic panels to the transport i ' non-transportation demand has; T i Ferguson readwi . ration and building products ?. beensteadily increasing. During. sales levels for1989, buthadiYji 1989 CorTec supplied initial reduced prafitdue tothSc6sfeR?|' quantities of highway billboard :` ; associated with the reiocatwriffY signs after n two-year develop of its custom cam product lirieW; : ment and testing program. Development of new products Kemlitetranslucent root panel provides many user advantages C including inside visibility to reduce - loading and unloading time and a reductionot overall trader vreWit. Polyfton magnetic resonance ; imagingcoils used in sott tissueanalysis and spectroscopic coUs^ - foreiementanalysis. ? -'m ' , i J r'j ^ fe - .' V -! f: v' : ' J"(' ' CRTX 0754 % to anothercompany manufac- . fhnropoiymer^^ - /-*% v.-J n"fis^ah&aa' 1b*Vw' ` *r ' i. v` ' taring facility. : Rerist^kx/D^nsehaka&ig is in process fordetonators ?; : Several new products were supplierof sqjanitde lip seal fit aboard the Maverick missile. introduced during the year, tings and teflonfined braided The consolidation of Crane ' including a precision tabletop hose to the aerospace industry. Midwest and Crane Defense . : conveyor and a line of indexers Although the major market for took place in 1989 with Crane [ with internal overload axqJings these products is the defense Midwest movingto the Defense . to servte the food and beverage industry, Resistoflex was able Systems* fatality. The two . .V - industry. hi Europe,Fergusons new to increase new orders by 60%. groups have framed Crane ';; . ;;> through improved customer Defense System with manufac-;! ; Munich facility continues to smice and a significant .. turing fatalities in St. Louis, ropnnd its production resulting increase in its in-house manu* Missouri; fT#land, Illinois} and '/ . ; in increased market share and . facturing capability. To offset Conn*, Texas. Thh consolidation expanded impact abroad. ResistoflexJIndustrial'^ a reduced defense spending, enables CraneDefense Systems marketing strategies are being. to support its manufacturing . f leading manufacturer of plastic directed to the commercial Mttewthaan^eengjrieeriug. .; : : lined pipe and fittings, valves, aircraft aftermarket. andadnuiiislrativestal^allowiug p' expansion belkws, underground Urmt/nondcs/Fhoenixdev^h^ fra an improved competitive pos- ; 'y gaadine hoses and reaction: mid manufactures preriaon , . tore withto thedefenre market . - ; >: vessel components. The division, : ordnance mid related electrome1 In 1989, CraneDefense Systems^' now in its second full year of v,: chanical mid electronic devices ^ reoeived contracts to supidy equ^-'A v; If/ production in its new Mariohi^i ; for the Departmentsof Energy';-- ment<mthenewDDG-51 %htethCaroliria plant, experi*:;v and Defense! Orders for qxidahv AEGIS Destroyerand thelflW^p^ f enced increased sate feed devices for the Department t Class, AafbSSabsAssault earnings! Leadingedge tedinol- - of Energy and for the Tridenti-:. ;V ogyin the moulding and forming D-5 continue at a fligh ted Six Internationa);; 'o-C- of high performance resins , :' newarnipinents wereadded to; Crane limited. UnitedKtqgdM~~y*i. '-i -V;has placed ResistoflexIn ari; the Department of Energy pro consists of two business units: ! `' ;. excellent position to maintain duction proRrams during the. Fluid Systems which ninnufac-;; I. its domestic leadership in; ; ' year. In addition, a multi-year-: tures valves, pumps and pipef: procurement omtract was. fittings and Crane Industrial]; obtained to provide the ignition ;: forthe fli^itmotorof the TOW. . ; AlUnkfynamlcsPhoenixaneMtcoo. lamination controlledagemblyarea assurescomplete reeabHty ofpie6, sion electromechanicaldevices, Crane UmHe<r8 Pro pump package Is designedto meet rigid mechanical: and hydraulic regutrementsol modem Proprotectionmethods.:^; V-: ;:. -: '!/,-' /'; ' 1 '' ' V' ' f + s**?-*'1'** * ' - /*' * . /-$ /. .* . ,t\ - \ Jr. ' 4 >y -iV w. . -.; i:t/: CRTX 0765 Engineered Industrial? Products? hVHliniltlt) _ winch readies specialty markets'. wiDbefuIIyopaationalinl99a . for fluid control equipment, hi September, negotiations to strong import and domestic? pumps and maintenance services. profitably sell the Blackett . - . competition directed marking?? Fluid Systems Division. Hutton steel foundry were am-'' efforts toward the commercial,:: ;; increased its market share of duded resulting in improved institutional andiawTO&ri;i.-^;';;j pipe fitting and valves in 1989. operating ratios for Crane 3 markets. As a result, the firi- J;j Among its majordevelopments ; limited. son was able to maintain Its1; $i were the introduction ofacorn- . Crane Australia, Pty., limited strong share ofthetotal market?? I prehensirerangeofbronzevalves manufactures and supplies : The introduction ofnew pro- ; . ;?;1 and the launching ofa major , valves to the hydrocarbon and ; ducts continued in 1989witha?;?.j engineering-design-driven cost petrochemical maikets in ' . low-silhouette waterdoset.a; Va reduction program tolower the Australia, NcwMmd,Indonesia line ofshower stalls and bases? r I cost of bronze valve components and Malaysia. In addition, the and a lavatory for the handi- / .} by as much as 25%. New mar company operates comptdien- capped. With pottery production '; ! keting arrangements in Spain . sive valve modification and . difficulties solved. Crane Canada . \ have added to Crane's ability to service facilities throughout will be in a favorable position - - { . expandthe salesof valve pro Australia. Despite operating in to meet continued demand for? ducts outside of the UJC .. .. a very tight fiscaleconomy, Numbing products and increase ;^? ! ; Crane Industrial continues where bank interest rates of . marketsh^rf its diina,acryBc;|;i to develop its industrial mainte 20% or more prevailed, sales and - . and brass plumbing fines in 199ft;?? nance service activities in the. profits increased during 1989 ; TheWveandhtdtidm^^^i . valve,pump andheat exchanger ' and the order backlog remains i)irw^derign^purd^es^ndfe|] V rdiin^hingiharketFIre pump.;. healthy gmngintol990. j;; manufactures a vrideyarfetyCf^li sales oontinuetogrow, increasingj: > its UJt market shareto almost Canada . 30%. Anew fully integrated;-;-. ; Crane Canada manufactures valves to control aQ ftpei fluidsanddiemicalsinavmT^lfi . of industries. Sales fir 1989were& . computer system, whidi has . . been specifically designed to ' accommodate Its wkk*geosraph* ical spread of buan^ activities, products sold to the residential, -, significantly ahead erflastl^f^gr commercial and industrial con-' y&r's with wateTvmfe valvt??; f struetkm markets. The numbing benefiting from a growing/ ' Division produces and markets infrastructure rehabilitation: a complete line of higjr-quality . market throughout Canada.' plumbing products. A dedine ; ? % Crane Canada's Stratfordplant pro . duces over 100^100 porcebitH- stedbattitubsperyearusIngthD latest roboticwelding tectmotogy.. Crane Australia is a treflorsuppBerife of valves to petrochemical and .f ; " hydrocarbon processing plantsand oil refineries throughoutAustraKa^<$ CRTX 0766 r-v;v .* :>,,* <\ * V M HuttigSash & Door Company consoGdalion ofcertain&tr3w*. WuleHutt^marketswre?- is the fairest nationwide dis- \ tkn centers m thenorthed! New weak in 1989, the company'- yy.y. tributor of millwork, windows, England area. Huttigalso rede impravd its market share; leanr> :. / doors and related products in ployed its Florida distribution ing it better positioned for 1990 V the United States. Huttig also network resulting in the reduc-. andbeyond. ` operates a sawmill and millwok tion of one facility. All three ' . The Gone Supply Division i 7 component factory in Montana, and three wood window assem consolidations should provide serves the residential, commer* .; improved operatingperformance dal and industrial markets with Y f bly facilities strategically located . in thesegeographic markets. ' brandies across Canada distribu- : throughout its distribution . hi 1989, Huttigcompleted the ting valves, pipes and plumbing - system, ,'Y . start-up phase of its California products produced by Crane. ,. .... : Fdlowinfl ihp rap'd expansion window business, which \m Canndn and othermanufacture. I of Huttig in 1988, the focus in initiated in 1988 with three ers. A reduced housing market y ,1989 was one of integration and .window stores in southern. in all regions was offset by a ./ '; consolidation. Resources were ' California and a new assembly devoted to the integration of. operation in Fresno. The refine strong waterworks business7; . and a good levd ofcommercial ' the Palmer G. Lewis Co., Inc.; ments and improvements ; and industrial spendingactivity. acquisition into Huttig, and the accomplished in 1989wall trans Margins, however, were lower; 7 j consolidation of overlapping :; form these fouroperations into . due to stiff price crnnp^tiom;I.Y ; \ ..distributionmarkets. : .; Two distribution centers in. Wholesale?' ; the Greater San Francisco, ;U Distribution; f California market were merged? and a decline in business activity,; meaningful profit centers in the - - ' .-v years to come and will position Huttig as a major suppjkr of>. , ' - ." , .. *V wood windows to the southern ! : Y..-- Y' Califarnia new construction, .. \ />?,.c; ; >-V.vy'H y*. I { in the Northeast resulted in the.: replacement and remodeling ' markets. .- .- , ?-Y- 'P-Xpi Bulkfing a Huttig "True Divided' Light" tnsulated window, available in many fight configurationsasV weBaaseveral88shoptlons:,:: Loadinga trailerat HuttigTs Souths em Manufacturing plant in Rock----;HIB, SouthCarolinafordefimy toY a Huttig branch bi thearea:. .:P . '* r * I *.: ' ;. vV , .',1; ' . ".. s > ; o /'V-' `.fl .. | V' .. ,'s ' Mi' ? i . -Vi* -= Y Y . . Z'i -yy-ypmc:- !r:v. .'f/ T'-Of -,; ; j-.; / '. ' 7 -V -M'/r-Mf { .-1 ............. ... S* i . ^ | 1. * .../ . * .* 5 t< - V - . . *' , * ; ' 9/0 XJMD Consolidated Statements of Income m W' ?y 'j -": Net Sales - ;. V Operating Costs and Expenses: Cost of sales . Selling, general and administrative Depreciation : . . - , . -, ,4 . 1989 $1,45589 1,136,063 . 193,167 21,314 1968. : 1987.' $1^13,136 $1,099296 >.' '' ' 1.024242 173,484 19,744 854,156 152.013 18267 Operating Profit . OtherIncome (Deductions): ; . Interest expense--net erf interest income of $2,327. SI .730 and $1228 in 1989,1988 and 1987 . Miscellaneous--net ' .- . 1,350244 1217.47D 1224,466 105,045 (16250) . 3,384 95,666 - ''- 75.,1. 30. ' (17,112) (17,772); 2236 1,183; (13,466) (14,176) . (16289) Income before Toxes-Continulng Operations Provision (Or IncomeTaxes ..- , . 91,579 35,660 81.490 !, 58241 32,304 25337 Income before Cumulative Effect of a Change in Accounting 55319 Cumulative effect of a change in accounting forgain on pension ' - asset reversion, net of taxes of $5,598 ' ' --v'- 49,186 32204 v ; 5j673 Income from Continuing Operations ' Incomefrom Segment Distr&uted to Shareholders-- - Medusa Corporation, net of taxes of $6,727and $10,869 in 1988 and 1987, respectively - = . . .; . ' - 55,919 , 49,186 38377.: , - . >" ` . - : v * " ^ rJ-' r ; ; , 1 ' --- 13297 `20209*' Net Income ' ; . 4' ; ' ; S 55319 $ 62,483 $. 592864 Primary Net Income Per Sham: V: -V. ;. .4 Continuing Operations:^ j \ - 4 . ` "i * '' \J,l .J'.'C.V-.' Income before cumulativeeffect of a change in accounting - Cumulative effect of a change in accounting-pension reversion $1.72; itk-0? 1-. 'Z-'S.Jl I'.'" $1,464 if .16% Income from ContinuingOperations ' . Income from Segment Distributed to Shareholders-- . Medusa Corporation . ' . ; r .41.72-.-. Vv.,. 1.46 h-??S':;i.l3=? . >,v r . . \ ; 4'--4 Netlncome '' '='.-c- >- " ; v $1.72 $125- $125- V .'AvrTiiKeiJrinuiryshan>soutstanding - - - - 32383- . 33.656?.. 33226 X FuHy Diluted Net tncomePer Share:4;.. ; . . ' Continuing Operations:4.....r.. . ~L Income before cumulative effect of a change in accounting .. $1.69 : $1^454 Cumulative effect of a change in accounting--pension reversion . ; - '?> :;`%4..%164 Incomefrom Continuing Operations . 1.69 -4 :h&-b , 1.1:. income from Segment Distributed to Shareholders-- 1- Medusa Corporation - ' . .. . . , 28 v : 4-4:39^ Net Income `X : . - ` $1.69 $123 $1294 Average fully diluted shares outstanding 33,036 34249? %203r: ! 4..,^c?.< *<; v . .;jV. `>,-1 CRTX 0769 J GnCta<SihiSn> Consolidated Balance Sheets Assets \ -v . ' 1 . . . Current Assets: Cash and cash equivalents . . Short-term investments ' " Acvounts receivable, less allowance of $1,502 ($2,273 in 1988) ' Inventories. at lowerof cost, principally UFO, or market; replacement cost would be higher by $lj890 ($13,199 in 1988;: . Finished goods . . - ... Finished parts and subassemblies................. . .' . ' , , Work in process * . , - Raw materials ` i ' Ollier current assets . Total Current Assets . .. . . 1968" -> ... $ 4,855 1,200 173,050 $ 40,000 1,621 170J367, . 13424 135,775 23,654 20395 28030 7 .30,493 v- 25J033 7 26,423 209,341 2I3J086 MB9 : 15,739 . 398335 . 432,033 Property, Plant and Equipment at Cost \ Land ' : Buildings and improvements .-7 Machinery and equipment . ` . - `. " . .; .. . 7 :.. . 23328 127300 229^823 - 23,414 128,032 213375 : 360,851 '73654217 Less accumulated depreciation^ : - ` 1923467 183.4457 Other Assets: - ';-> ' Investments^.f;.' 7 -'7: '' '7; V-' '7. v:7-'r.- 7'-'.;,.:. . 7 7;;; -i,18W05 :&mgns& -v'v7'-7''ei'7: lisis# 7^^1257 ; ` Intangibles, less aivumulated amortization of $19,539 ($16,196 in 1988)7''' '7;-:\.A405. 8,193 : Cither7 7\ ' '' ' :7`- l.;' -7-- . '--7\ 831377lI352g "77; 26,1347 25270^; Cost in Excess of Net Assets Acquired, less accumulated amortization ' 7 . of $1,516 ($8223 in 1988) :;7 ' 41,7837 77424ii r $6543577 $6S1,740?7 See FinancM Review7 7 ' V.:' " v . '' ' " 7 - ~ V'-V.,;.- ! ^ ' ,V*. n .'V?-i Ml 37/.:'Vl4 7?i|gC CRTX 0770 ... Uat^tiesand SharehoJdere'Equity . ; . Current Liabilities: Current maturities of long term debt . Loans payable .- :. Accounts payable . ' Accrued liabilities . .- - U.S. and foreign taxes on income ' . . ... - $ 11,223 20422 73,649 77,271 1,873 .' sum 48508 61,187 69,121 392 r ... 5* ;.*! ' ' '' ' j" -* ' ; i CRTX0771 Cash Fkm from Operating Acthrftiearx : Consolidated Income from continuing(derations ' ' '. Statements of Cash Depredation : Other non-cash charges to earnings ` , . Cash provided from (used for)operating workingcapital Flows . Dividends received from Medusa Other; y :. - . $ 55919 ; ' 21,314 . 16971 7,790 -- (1987) $49,186 ... $32704'. 19.744 . 18,267 9516 9960 (28,714) 1957. 84,300 13,613: ; 3388 (3.190)-; Totalfrom Operating Activities . 100,907 137,420 73911.; . Cash FlowsfromInvesting Activittes \ ./ ~ r Capital expenditures . Proceeds from disposition ofcapital assets Equity investments : , . ,. , (33,189) ' 9,433 : (6,080) (175) (16250) ; 4J5S7 M24.; ; Paymrnis fur naiuisitimis, net nf liiibililiw tisMimwl of $143 in 1989 and $34,100 in 1988 . Proceeds from divestitures . Acquisition of minority interest in subsidiary (1,495) / 3578 .-- (47558) 7519. : (7904) > - -Total from Investing ActMtfes______ (29953) . (60566) qi5ii):;;| Cash Ftowsfrom Financing Activities: , Long-term debt: ; . ': . .. . . , .; . ; : New debt ?'. ' ' ..... ''' 21926 : 3568 5`iweestt Repayments ; : \ : ;; (45924) , (17566) i(2i&m Dividends paid - .j ;* V'" (22,731) (25544)# ,(18538)^ Reacquisition of shares-` Stock options exercised " . ' V- v", ^.-(321296)? . (27570) : aefitm 3,VI6i$ ;V,2^24^ -? Redemption ofcommon share purchase rights , -; > -- ; .r . (738) Net increase (decrease) in short term debt . ' V ~ ' / - . (31,050) ; ? 15,767:?::`33X1801. : : Total from Financing Activities . ; , (106,129) (49,359); .(56925%! Effect ofexchange rate on cash and cash equivalents . ' 30/`: : :wo ,a- Increase (decrease) in cash and cash equivalents - " Cash and cash equivalents at beginningofyear - (35,145) r :; 40,000 27583 : rk- 6277^1 12,615 : #6338,ff Caahandcaahoqulvalontaalcndofyoar ~ '- $ 4,855 - $40566'?; $125isS| DetaSofCash Provided from (Used for) Operating Working Cspita! - * ^ '*.( rr>%jV CRTX C772 Consolidated <Iliomjamheznftsiatrdata) - Statements At December31,1986 of Changes Met income ... in Common Cash dividends - Shareholders' Decrease in par value from $625 to $1.00 per share, 15.597,357 shares Equity 3-for-2 stock split, 7.798,679 shares Reacquisition of 1303327 shares Exerciseof stock options. . 131398 shares Conversion of debentures. 2.629310 shim* Currency tmnslation adjustment At December31,1987 . . -- - ,, .. , Common'. Shares $83360 Capital Sinptus $14350 . i . . .* /--'"TfltalV Currencrv- .' Common*, - Retained TranshtiaiK Sharvhntflm9^ Earnings Aflustment Equity: $ 88397 $(13376) $173331 ' ' ... --. _* , ; -- 59386 . (19389) 59386 (19389) (81386) 7,799 (3,739) . 357 81386 (7.799) (38304) 1,780 % -- ' ' _ ' * '_ ' . mm ` , mm ' (42,043) ' ' ' * > am . 2,137 . 16335 -- 57353 '-- 22.426 . 109,666 127394 ' mm 9.014 71388 9314 (4362) .255,724.- Net income. - Cash dividends .; Distribution of Medusa Corporation common stock. . Reacquisition of 1,108,484 shares . , Exercise of stock options, ' 1K1392 shares < - , .` . .. ; Conversion of debentures, 53369 . shares r : ..'.-V Restricted stock awarded, 324396 :" : -- '' --- '' . ------ (1.108) . 163... ' \ . .'1 ' *. ' : 53 - ` 62,483 - -- \ . (20,468) 62,483 (20.468)- . . -- ' (26.462) (131) ' --: . (131) --r*'.*. ..(27370). ' v - 2361. :- 278 -- '-'mim . -v * K " / - ' , ' ' '' 1 . . 'k r ". *v 2,424.. 33tv m. ' - shares, net , 7 ' . . . 324 7,431 : - (6.155), . 1300.;? Redemption of common share purchase .. lights Currency* translation adjustment . . (738), --.. .. . Jm.rZ' (738),1 . \. ' -- 7- 972 . 972^- At December31,1988 21358 92,436 . 163.723 (3390) 2743277 > NYi imiimt-7 . -V' * ` ^ f.. 55,019 ;. Cash divitk'nds ; >: \ r ---V. (22.731) i .50% stock distribution; 10363,607 . . '. * - shares.1. ;7 : "7 :", 10364 : (10361). " ' *--. ' '- ,, : 55,919 (22,731) ' ' . ' . .. v..-> j mm. Reacquisition of 1369.035 shares .;. Exercise of stock options! -. 236,197 shares ' Conversion of debentures. 23377 shares . . ' : Restricted stock awarded, 395,420 shares, net,7; , r Currency translation adjustment ' (1369) 7 (31.027) ' V -- x.''" ' *' \ ... 236, . 2,910 /*' - ' -- \f' (32396) .j\: 3,146., . 23 . V 112 ` " -- . 135 396 9393 . ' '--: . ' . -- ' (2390) . --- (1355) 6399 c (1355) At December 31,1989 $31308 $63360 $194,021 $ (5245) $283344 See financial Review. -.i r v:7:- ' Z * I &>* . 43C.'!1 (T^ggitssI t CRTX 0773 OwOirtSyMMB- Finandal Review Accounting PoGdes: - ; . ; . . //>Vnsjtms--Thecompany adopted Statement of ' ` Principles ofConsoTidathn--The consolidated finan- ' Financial Accounting Standaids Na 87. "Emptoyere* . . rial statements include all subsidiaries. Medusa AAccounting for Pensions", and No. 88, "Empk^era* L` . Corporation, whidi was reported as a segment held Accounting for Settlements and Curtailments of : . for distribution, was distributed to shareholders on DDefined Benefit Pension Plans and for Termination. 7 October 7,1988. All significant intercompany items 6Benefits" for all domestic plans effectiveJanuary ' * have been eliminated. Certain prior year amounts 11,,1987. Included in income in 1987 is a cumulative !. have been reclassified to conform with the 1989 ' eelffect of a change in accounting<A $5)573.000. net''' ' presentation. . .: ; Cash Eqi(iralents--Hi$i\y liquid investments with . original maturities of three months or less are con- . 'sidered to be cash equivalents. :. ;oolf taxes of $5^98,000 from the reversion of suiplus ` t- ?assets in 1985 for pension plans covering non- ' ; bS. aaisgha&ininDgoeomr spulobyseideisaoryf t.hi* company . and its Hutt .. ^ ; In the firnt quarter of!989. the company adopted I 1 /<//v/(ini5>=Invt,ntorkti lire staled nt the lower of S8I FAS Nit 87 for nil hignlfmini contpuny simnsontl ''; cost or market principally on the last-in, first-out faforeignpensimtplans.. . ' ' (LIFO) method of inventory valuation. The effectof* - inventory quantity reductions was a reduction in cost of approximately $1,500,000, $600,000and $5200,000 V in 1989,1988 and 1987, respectively. , : ' .T^ATInhcJqeauHnisueiaatitroeynx1sG9a8rn9od,uCIpnr,vaLentsedtmL. atedns.ptaseccqiuail.ri.s.etdinthtehae.srseeptsaior,f. . ` :J j a1nd refurbishment of heat exchangers. Thecom-- j. . : Property. Plantand Equipment--Depreciation was. . p:any acquired the Pacific CMP canned motorpump ., provided primarily by the straight-line method over pri oduct line as an addition to thempump in March^ f ; the estimated useful lives of the respective assets. : 11989and certain assets of the parte, resin and serweay -;.. y The double dedining balance method ofdepredation bbiusiness of Beko Water and Waste.Treatment as&C1; was used for assets acquired prior to 1985.' . 'aat n addition to Gxdirane in August !989l|^-gf^w-K; . ' '0; . IntanffMa--CaH in excess of ml assets acquired b-' being amortized on a straight-line basis principally' over forty years. Other intangible assets are bring; `. uujInn|tocInr.soJuonnefebou1f9tilh8de8in,lHagrugptertosigdt uainccdqtstu-aiprreuidddIerehrltalwntehdolGmesa.atlelie^rriOafibs^tirnalhvMlHjy>'.' VTmU.^1 CtntM t.l >Q tr-Wt':- -=amortized on a straight-line basis over their esti- ' mated useful lives which average five years; . anters in the Los Angeles and San Francisco areas%-jf Atomic 7tros--The provision for income taxes was,' inn February 1988. A canned pump machiningand ^1' [[ : as in the prior years, determined in accordance with - astmice companyjvas acquit as an addition to;v{r- : -; v. Arcminting Principles Board Opinion No, 11, If the ' CChrmpump in the EnginiH'nxl Industrinl PhithKlR-' x| : amipunyliad limn to adopt Statement of Financial stegment in July Accounting Standards No.96in 1989, the changex ^i Each of these acquisitkms w-as accounted by'tlfeyt. ' "wuuld not have been material United States income . piurchase method and the results cfopwatiohs for '{' .. taxes have not been provided on undistributed, ' : each has been included in the financial sfatements /jj. :.... earnings of foreign subsidiaries sinoe these earnings . from their respotive dates of purchase, fto fonnaB* r? - ; will be required for indefinite inveSment and any ffti:nancial infeomation assuming the acquirition of.ty |, Ataxes on dividends expected to be paid will be off-; . Palmer G. Lewis had taken place as of the ben-y [ ; set by foreign tax credits. .. . \n'ing of 1987 b provided below. The remaining. . .' * . . 'jaycquisitions did not have a material effect.on the > [ ... : NcaeltcInuclaotmioensl\arreShbaarsee--d futpimonatrhyeewareniginhgtesdpeavr esrahgae ren_results of operations. C^ 'S ,[' : ; numberofcommon shares outstanding aftergiving ' fF(IjokrtthhoeuyseaanrdsstwoietdptDpmrr>sh*abrcerd3atta, ) - 1988 / - 1987; -j effect to dilutive stock options. Fully diluted earnings . per sharegives effect to the assumed conversion of - *N*rtsak-s ; .. ... $$11,4.40099227799 $$11331166,1,18855;71 convertible debentures and the effect ofdilutive stock jOperating profit - 96,634 i; -: 78)664>.; options. All share information has been adjusted to , In11coopmereaftrioonms.c,o-ntin-uing.;':',;-'vV;-;;-?,'^:';.48j64JK?^y 32209^: v j v-. reflect the 500C stock distribution in 1989, the three- ; . jI,n,come pw share from-/ for-two stock split in 1987, the 5QX stock distribution ^. continuingaerations r ^h.1986and the2% stock dividriid in 1985.y;yV:v. ~i 1 I&F..3..;-..' tf.SE. P..s'ir wtra-RwwiUttt ah* fitiierally.recorded whwi % ;.y,jdtfff- ...; . . title posses to the customer. Revenues on long-tent .?.'i>At lXcemba-3i, 1989 tWcompahyii^l 488200f' , omtracts are recognized under the pereentage^-i; 1 '..shi ares cdthe common stodc of Milton Rtgr.jDoii^ completion tnethod ofaooountihgand aremeasured?'.. ppany. The oompany'sinvestment ofappimdmatdy|| '}/prinripaDycmritheracnst-tcKxistoraunitcfdelivery. -$;8$,000,000 fe carried at cost whidi approximates^? v: ' basb.Th^contracts represent appmximalriySXiof irmarket, and represents approximatriy&4%af the,^ C f sales in any oneyeanfey outstanefingstares of fiDltori ..nlA CRTX 0774 -5 InveslmentDistribut^toShafEhoWefS > The companyadopted this standard forall signifi On October 7,1988, the company distributed to its cant foreign plans in 1989. fension costs for foreign * shareholders 100% of its cement and aggregates plans in 1988 and 1987were determined under ; subsidiary. Medusa Corpora!ion, on a tax-free basis provisions of previous accounting standards. . to both the company and its shareholders. Immedi- (US-antf atdy prior to the distribution, Medusa paid a special _j________ Foreign Plana) ' ' (US-Ptore) : cash dividend to the company of$84.3 million. This anthmsunds> . . 198899., ,. 1988 , 1987 ' transaction reduced the company's shareholders' equity by $131,000. . ' v - Service cost-benefits , earned during . ' As a segment distributed to shareholders, the theperiod $ 7,00441 S$4203 S$44J-99Q02:' - results of Medusas operations have not been Interest cost on . ' ' . "' included in continuingoperations. Net sales of . , prmectedbenefit obligation 111,0586 / , - .5222,, . 4,.4771J. ' Metlust thnrngh ihe dan* of iht; distribution in 1988 Actual mum tin . /; were $i:w.7 million and for tin* full 1987 year, net piau assets (24292) (6(i.,O0C6i5Ti)) (120) sales were $184.4 million: . Net amortization anddeferrat_______ 99020033 2,005533 ' (0355665) : Pensions/-- . . ; " ./.--" v- / :/ The company and its subsidiaries have pension plans which cover substantially all of their employees Pension expense - Pension costs for " . foreign plans 4,138 5,413 - 5,.688 . ' , - ' ... '. ... . ` and non-employee directors. The plans generally - prior to adopting / provide benefit payments using a formula based on . SFAS87____________ -- . .<(298) ';, '(692) ,. / ; length of service and final average compensation, ' . : Pension expense . . ' H except for some hourly employees for whom the benefits area fixed amount per year of serviee.The \ >' , for company . sponsored ' pensionptans ... $ 4,138 ' -- , $5,115 ~ $4996 cumpnriy's policy is to fuirt at least the minimum *' " p amount reqinnd by the applied)!? regulations.-"'V - The following table sets forth by, funded status; / , ^ In 1987, the company a&jpted Statement of . // ; the amounts recognized in the company's balance ;-: '/ Financial Accounting Standards No. 87, "EmployersT sheets at December 31, for company sponsored -/ ' Accounting for Riisions", for all U.S. pension plans. pension plans: r; ;//>/ ' /; i/ff/tflOMHl/o'J-\.;V ' ' Vi. Actuarialpresent vahtcof benefit iJiligaiHsi: ? . Vested /./'/.: | '.Nonvt-snd/~/~/v/;:'r ~ -/-/y/ Accumulated benefit obtiguion' " '->/' SS-X'-' Effect of future pay increases '5 ' Projected benefit obtigatiuri '' " - -- (U.S. and Foreign Plans). ' 1989Overfunded Underfunded. / $108,931 $1,425 : : : 4275 ' ' 155 113206 . 35,069 / 148275 . 1,708 __ (US. Plans): -.1988 - Overfunded lluderfundtd $35273. ;.;$7.i68 3.323 /: " ' -18739,196 23-015 -.';. . .. * - .5 . ' " * *' * *, '. *- ; ' *-"-v 'iff: \ Lx**, t '* - 'xxr'V0: - v i-v.j t-.c *v- ., f> 188,687 1,580 61275 . 7,i6i: : . Assets and hxik reseri'cs greater (less) than / pnijected benefit oWigatton - . :v- $40,412 - $ (128) $ (336); S <194) / V . : ./. ConsistingofcrV1'.." ; ; ' . > ; Unrecognized net asset (Iiabitity) at dateof f::/' ' adoption lessamortization.>5.v- V- /'/// '$ 21231 - / $(446) / . . $ : 959.' 3 `r Unrecognized net guns(losses)*, v/'/v-*! '' Ji\s1WW-v : (420) <12K), /,. (2.125)^; Sr/ Adiustmentrequired to recognize miniraura'%i , (lability/.; U:'-'ms / /' CRTX 0775 (ntCMiSybabia ' . Theassumed <5scount rate,expected return on Reservesand Otherliabilities Financial Review ' rron/mmrf/ assets and rate ofaxnpensationlevd increases for final pay plans used to determine the pension -.' expenseand funded status information were 8.5%, 95% and 625%, respectively, for U.S. plans and , 85% to 9%, 9% and 625% to 75%, respectively, for foreign plans. - . .. The company participates in several multi employer penskm plans. which provide benefits AtDccrmber3l ffn tkoxsamb) Insurance Wageand other employee brnefits ' Environmental '. Other 1989 1988 $2,677. $2,176 1596 1550 2,743 $9566 ' : 2,488 4,115 2588 $11567 to certain employees under collective bargaining' agreements. TotaI contributions to these plans were approximately $1577,000 in 1989, $1,183,000 in 1988 and $1,127,000 in 1987. , At PiwmbtrUl, IKK) nil plnn nswift on* inverted in listed snicks and bonds. These investments Short-Term Financing'." - .'. .. - -" . At year-end there were available with domestic and foreign banks $174,000,000 in short-term credit lines of which $153,000,000 were unnsed at thin timv. . '. include common stock of the company which Long-Term Financing , represents 3% of plan assets. , - The cost of providing health care and life insur anee benefitsona claims paid basis for certain retired employees was approximately $1500,000, $2500.000and $1500.000 in 1989,1988 and 1987, . .respectively.- At tknmberSl (In ilumsunds) . 1989 Crane Co. . - - '. . Senior debt: ' ' ' Revolvingcredit facility due 1994 . .. - Subordinated debt: $ 18567- . 1988 Miscellaneous--Net: ' :: : '>. For Hurt FoJnl Iknmberai . : '. - V >- i - . > v > 1 . - <1*ihm*tmb>.. ... j 1989 i 1988: - \ - I0V&% Sinking fund debentures due 1994 . /_ 7%Sinking!fun.d..d.e..b.e..n.t.u.r.e..s..... 1987, : Debentures due 1994 -; . vf:; ^>^2833^ Gain on disposal of .. . : " ' capital assets-net . $2,949- Gain on sale of/ .- marketable . ;< securities -.-"' f $1,101;'. 1,462..- $ 636; `. . ' 5% Convertibledebentures /-'.'l: ' due 1993 and 1991,:;.*-/ .. convertible at $3L70and $126" Other, principally capital1 - lease obligations - .,158#-*?'.- 3,721* Foreign exchange . gain (loss) .''. (18)~ Minority.imerestv- .:. . , - ' Ollier . 463-, ' - . . $3584 . .341. :: 32... $2536 - .-774' (402) . . 175 $1,183 TotalCraneCoLl.'*.' -j. : 74570 > 84545*; Subsidiaries; ' - O'i'K. Sinking fund debentures due 1999 ... : 11550 Floating rate bank loans:-,- ;' ' : ' -t- 12500 :'y r- Accrued UabtBttes : ` > .4/ IkxrrKlrrSl tin thousand*) -`i . 1989.. .. 1988 Payroll and otheremployee-: " ` . : related expenses - : $22,139 Insurance'.-'* 14587 ' $23,430 12,000 ' , Canada due 1991-1996. 12560: 16.760: United States due 1991 ;: i:v;1500:; : 5500 . Industrial Revenue Bonds Other, principally capital -. . 13570 v-: 14501 " : *; lease obligations v v 55431-. 1 /8,627; Total subsidiaries .-. . '44,732-t 585881 Sales allowances and other - related costs . . 11,491 . 10,628 $119,102: $143,133 Pensions Interest -..- -'- Taxes other than income Environmental- V--; Professional fees- Other;-,-,--- ** .-.;* -T'. -V'-if>^ . ----- 4,814 .2528 The company had available $87500,000of unused;; - : 3,492 : '' 3,030 ' 2,600 4565 2.492 '* ~ longterm credit agreements at year-end. At Deoember.. 31,1989, the principal amounts of long-tom debt: - - " 2596 2.401 repayments, net of amounts held in treasury,:C' .12522 11577 required for the next five years were $11,223500 in 1990, $13,090,000 in 1991, $8585500in W&&- , $77571 ' " S- ."T ** ^ '* * $69,121. ' $17567500 in 1993 and $59,453fl00in.l99t;lnl987 the companyconverted its 8%%convotibledd)en#' tunes, increasingcommon sharehoWera'equity ^ ;'f:v,.; approximately $?3.? million.". ' - - * ' .............. " During 1985 the company created an irrevocable ' Theweighted average interestrate forcapital trust ofdirect United States government obligations leases is 69%. . \ to satisfy the scheduled payments of principal and Rental expense forall operatingleases was ' interest on the $10.606,000outstanding principal amount of the company's 616% Sinking Fund $20568,000. $18,769,000, and $18,450,000 for 1989, 1988 and 1987, respectively. Debentures due 1992 not held in the company's . The cost of assets capitalized under leases are as treasury. At December31.1989 there was $5,495,000 follows at December 31: . outstanding. ; :: ; v In 1989 the company redeemed all of its outstand- . ing 10%% Subordinated Sintdng Fund Debentures due 1994 at the redemption price trflOOX. of the r IlthuMMndsf . Buildings and improvements Machinery and equipment 1989 . 1988 $12518 $14561 8,445 8,671 , prinripal amount. The $225 million principal amount of the Debentures outstanding was refinanced less accumulated depreciation 20563 22535 1^780 J3?TH through the coiii|Kiny's revolving credit agree $ 7,183 ' $ 9.(101 ment at a fixed interest rate of 9.15% and is to be repaid on the same schedule as the old issue, The company has established a self-insurance pro $4567.000 annually. . : V . . . ; gram to cover certain public liability costs excluded . Thecompany's $100 million three-year revdv- , underdeductible dauses of its various policies. . ing credit agreement bears interest on the debt - At December31,1989, thecompany had received outstanding based on the lenders prime or cvrtifi- ' certain proposed notices of adjustment to federal cate of deposit rate, or on the London Interbank f income tax and was involved in variousotherclaims . market rate. The 1988 credit agreement contains ,: and legal actions arising in the ordinary course of various covenants, the most restrictiveof these ; business. In the opiraun cif management, the ultimate ' requires a minimum level of tangible net worth. At .-r) disposition of these matters will not have a material. i December 31,1989, tangible net worth exceeded thef adverseeffect on the company's financial condition.- ; required level by $89.089.000. .^ . fs A';. .C/.V !. >.. ;: At December 31; 1989, the aggregate amount of..'a: subsidiary earnings available for dividends was V. '= IncomeTaxes; f ,v ;.'ff A reconciliation of income before taxes to theprof 1 $151590,000.- . vision for income taxes (federal, state and foreign) is as follows: ;' - . . - - Commitments and Contingencies . r, The company leases certain of its warehouse andf. Uh thuuwfuk} , ' manufacturing facilities, vehicles and equipment; Income before taxes:: ^ under cnpitnl nntl ^tending leases with various' - > . ; DnmcMit' - . \f vterms. Certain bases cuntainrenewal or purchase :. Foreign ' 1989 : , 1988 , 1987 .:-, $68,169::' $1111,3X1 f $38J220 ~ 23,410 : 21,137 ~; . 20521= ,. options. Future minimum payments, by year, and . 91579 - 81,490: - 58541: - !,; in the aggregate; under these leases with initial or ~ ; , Statutory federal: .remaining terms of one year or more consisted off.'; tax at 34% ' ' ' thefollowingat December31.1989:;;f ; nt:1 11 V- :--:------- L:. . .- - -- Minimum'. - r. im in 1988 and . -tor.in 1987) ... Increase (reduction)' 31,137 27,707 ' ' 23/146: ;;`f ffC Capital Operating-,Sublease: from:. , S'-; tin lktmwmk) : V teasfs Lrases Income Net : Foreign and ; .. S -: 1990 'A; i; 1991-. fc\!992 ;" t Ki;I998 ? :199l - , $1510 $13591 7S 704 $14200: 1.629' -11.470 ... , 365- . 12,734 -. kical taxes ,' . Goodwill ' - /, V 1596: 711 - 513.; ' 8.979 ,141 6373 58 " 5518 V-.-V: 3'= 10.434 7.026 6,058. ' Xon-taxabk*, ' - FSC incumt-. Other 4,050 . 3,756 : . 2506 , : ' 388 V 363.' 346 : (798) : 883 (568)'. (501) 1.046 , : (330) ; : f vv j.'Thereafterf ; 3.001 14.741 17,739' Provision fur \ v income taxes , $35,660 $32304- S25J837 . .. . Totalminimum^ lease payments;-. 8568; S60J505 -S. $1274: $68.191 T Penxntageof incume ..before taxes: ` 385% .' 39.6%- ;';-44.1%.^:f.~ .V-' . '4, V.': - I : V 4 VNV,- v CRTX 0777 Financial Review tntHlimml) The foregoing provision includes changes for foreign Thecompany's restricted stock award plan pro<: \ taxes of$9^8O,0OO,$9.18SjOOO and $10347j000and vides forawards ofcommon stock to key officers ^ t state taxes of SI,482,000. $4,147,000and $2^903,000 - and employees, subject to resale restrictionswhich ; in 1389,1988 and 1987, respectively. are scheduled to lapse, in whole or in part, over a ' j The provision for income taxes is composed of fiveyearperiod or upon the achievement ofcertain :; j the following: performance objectives. The company awarded ! f/x thuHsumb) - Deferred income taxes - Current income taxes . - 1989 $ 3,796 31JB64 $35,660 1988 $ 1.993 30311 $32201 1987 461,500 shares in 1989and 484,149 shares in 19881 - ; During the year31,905 restricted shares were/..... ' ; $3,709 cancelled and 586256are available for future 7 j - awards at December31.1989. Shares have been 'XX 22,128. adjusted for the 50 percent stock distribution in ; S25J837 1989. Compensation expense is determined based ! on the market value at the time of award and is . { TIu'umiiKHtfntMif deferred imitim* tax exiienso are as follows: th llwmambt 1989 1988 1987 rmrrnnlly amortized over tlu* five year restrklinn ] period, The 1988 award provided for early vesting. .' if the company's stock price increased 50% from its . market value on the date of the original award. Due : Excess tax . depreciation . Reserves 7 Inventory - capitalization '1 Othwr; . 7; $1,548 13)75 (498) 1.671 $1,690 (574) (862i 1.739 . $2249 1.474 a.iat) .7 570 to the favorable performance of the company's stodc price resulting in the lapsingof the restrictions on: % : -t the 1988award, the previously unvested portion of. this noncash expense was dtargsd to incomein 1989l- | reducing earnings by S4.1 million or$.08 ^shate|;j. ' '7'- 'v -- $3,796 $1393 $3,709 Preferred Shares Purchase njghb.Vv In ftlftr 1Q9S ITin 4 a nnn imr ' Research and Developmenta ` / . 7 Product development and enipnvering costs aggre-7; of common stock. The preferred rightswere riui||0S.. gated approximately $14,400,000, $12.000,000, arid exercisable when granted and may only bedtoie^rpt't $10,700,000 in.1989,1988 and 1987. respectively... exercisable undercertain circumstances involving^- J In addition, approximately $1,100,000, $7,500,000:';' - actual or potential acquisitions of the company'swyyyj and $8200,000 were received in 1989,1988and 1987,' common stock by a person or affiliated persbrist^/ j respectively, for customer sponsored research and. Depending upon the circumstances,Utterightsiy/v i. development relating to projects within Engineered ; Industrinl Products,. -> Stock Optkms and Stock Award Plata - / A summary of stock option transactions follows:. -. ;. V" .7 ;-.v 7 '. Number of Shares- become exercisable, the holder may be entitled toy-? fcl- purchnse shares of the company's Series AJunior;^ \ ParticipatingItofcrmlSlock,orsluirusofcummun^ j stock of the acquiring person. Preferred shares [ purchasable upon exercise of tto ri^ts unU riot be redeemable. Each preferred sharewill be.oititted;^.'{ to preferential rights regardingdividend and liquilj?? OutstandingJanuary 1,1989 . 50X. stock distribution . . Optkms granted - . . Chians expired ' .. 964276 dation payment, votingpower, and, in the event of?| ' 480592 any trietgor,consolidation orothertransaction inKl j7 : 221200 which omunon shares areexchanged, preferential;^, : - (31,018) exchange rate The rights will remain in existence?-.: j.. ` Options exercised ' Outstanding December 31.1989 - > (236,197) untilJune27,1998, unless they are earitertennis/r/ i 1298253. nated, exercised or redeemed. The company has t; f' authorized five million shares of$.01 par.value?,?' At December31,1989,options for 823.134shares, preferred stock. s---. were exercisableand442,729 shares were available; Analysis by Segmentof Business v.. -'t . forgrant. Stores and per share prices (ranging from/ 1 An analysis of sales,operatingprofit.asstts.capital^y $&56 to$1759) have been adjusted for the50 percent / expenditures and dej^dation aj^eais ohj^ges 2G^ j stock distribution in 1989.1n 1988, options for .77 and 27. Segment description by products and/Ti??/?fcI '163292 storeswereexerrised. The plan is not a 7 compensatory plan which would retjuirea charge: -' In X'XX'^'r CRTX 0778  i----I.---- The accompanyingconsolidated financial stated ments ofCrane Ca and subsidiaries have been Management's prepared by management in conformity with Responsibilities gewrally accepted accounting principles and, in thejudgment of management, present fairly and for Financial consistently, except for the change in the method Reporting of accounting for pensions described in the note "Accounting Policies--Pensions", the company's financial position and results ofoperations. These statements by necessity indude amounts that are based on management's best estimates and judg ments and givedue consideration to materiality. certifiedpubCcaccountants,whosereportappears' . - .??? | on this page. .. ; .iv.-M-j-;?*! TheAudit CbmnutteeoftheBoanlofDirector, ???-? ! composed sddy of outade directors, meets peri- ? ; :\ a&sSty with management and with the company's ' ; ?! internal auditors and independent auditors to. ; ...1. | review matters relating to the quality erf financial . reportingand internal accountingcontrol and. . ! the nature, extent and remits oftheiratxfits. The ... ; company's internal auditors and independent aud-. . -" , itors have free access to the Audit Committee, ` i The accounting systems and internal accounting (irntmln nf the company art1 designed to provide reasonable assurance that the financial records are reliable for preparing consolidated financial 6t/Cstst<2_^ .. ; statements and maintaining accountability for RS. Evans . . . . - / /... assets and that, in all material respects, assets . Chairman, Chief Executive Officer and President ?; are safeguarded against loss from unauthorized,. use ordisposition. Qualified personnel throughout theorganization maintain and monitor these inter nal accountingcontrols on an ongoing bass. In . . addition, the company's interna] audit department systematically reviews theadequacy and effective- ' ness of the controls and reports thereon. > *?. J.R Cronin ? v1 ;V The consolidated financial statements have. ' : Vioe President--Finance and. been audited by Deloitte & Touche, independent; Chief Financial Officer ' . I;.. Delaitte& - Taucfio also tndudes assessing the accounting principles - - - used and fiignifimnfestimates made by manage* ' r; ment, as well as evaluating the overall financial - " ` . statement presentation. We believe that our * >. audits prm^fe a reasonable baas forouropinkn. " " To the Shareholders of Crane Ca:. " In our opinion, such consolidated financial stale- . ' We have audited the aocompanyingconsolidated ments present fairly, in all material respects, the, ' ,, balance sheets eg Crane Ca and subsidiaries as - ' financial position of Crane Ca and subsidiaries at,. . of December31,1989and 1988 and the related December31,1989and 1988 and the results oftt' consolidated statements of income, changes in , ; theiroperations and theircash flows foreadiofl;?^?^ common shareholders' equity and cash flows for. the three years in the period ended Deoember31,:?<i;?; eadiofthethreeyeans in theperiod ended December 1989 in conformity with generally acoepted ;; , . ???! 31,1989. The financial statements are the respon accounting principles. - sibility of the company's management. Our . As discussed in the note, "Accounting Policies--; responsibility is to express an opinion on these ' financial statements basedon our audits.';;? ' We conducted our audits in accordance with Pensions", in 1987 thecompany changed its method#??^ of accounting for pensions t_o_cco-*n-f-o--nin__wXTi_th__Steartre-'-d't?. ??! generally aooepted auditingstandards. Those ; standards require that we plan and perform the? audit toobtainreascnableassurance about whether! the financial statements are freeof material misv stntemenl.An audit includes examining, on a ::: test lusis,evidence supporting the amounts and ;- New York, New ^ disdosures in the financial statements. An audit'; January22,1990 ' * r . V " 11 . * CRTX 0779 CnatCaaadSdbndbtin ResuttsofOperaHons in the United Kingdom, Canada and Australia/ ' : ''-s Consolidated Managonent's (Inrnmrns)_____________ 1989 . 1988 Discussion : Sales . $1,4553 $1,313.1 1987 $1,099j6 recodedgains in sales, operating profit and oper- / 5 atingmargins in 1989comparedwith 1988. Crane 7 - Ltd. sold its sted foundry operation in 1989. This "! operation had been contributing mat^naDy to .. ' ; and Analysis of Operations and Financial Condition . Operating Profit (gyrating Margin $ 105jO $ 95.7 $ 75.1 sales and profits. Valve Systems, a value-added . . : 73% 7396 68% distributor of valves and actuators, capitalized 00 ' its expanded distribution networic and recorded a ! 1989 Sales increased 11% to $15 billion followinga 43% ales gain from 1988 as well as substantial ' . ; 19% increase in 1988. The salesgain in both years improvement in operating profit and margins. /':->) results fromgrowth through acquisition, principally , ThepumpbusinessesofDemingandChanpuinp : Palmer G. Lewis, as well as revenuegrowth from recorded loweroperatingprofits on slightly Irjier : existing businesses, . : " ' revenues in 1989 followinga strong year in 1988. . . 1989 Operating Profit rose to $105 million, an In March 1989, Chempump acquired the Pacific -7. increase of 10% aver 1988, which was 2?A above canned motor product lineof Dresser Industries ' . 1987. Hie improvement in both years was due to for$.4million. . .7 -.. - - -; the increased volume overall and higher operating . Sales and profits have increased in each of the ' margins at Engineered Industrial Products, partially last two years at Codtrane Environmental Systems,' offset by a dedine in matpns within Wholesale and in August 1989, the parts and service business ! Distribution. In addition, 1989 earnings were 7 of Bekn Water aid WasteTreatment was acquired / negatively impacted by a $4.1 million non-cash : . as an addition to this unit for$3 million. 7... ;// charge for the eariy vestingof the company's 1988 .TheCanadian plumbingoperation continued;77 restricted stock award due to the favorable perfor : to be imparted by the skw housing constructJorifi-i mance ofCrane stock. . -7-yy/.;- market. Shipments improved from the prioryearf^?! ; Income from continuingoperations, net of taxes, 7 level but remained below the 1987levelwfril^77j amounted to $55.9 million in 1989 compared to .7 . operating profit and tnaiginsremained skwptripy! $492 million in 1988 and $32.7 milliim in 1987. able but have eroded somewhat due toatrangs^^i The return on sales improved to 3.8% in 1989 from . price competition. 3.7% in 1988 and 3% in 1987, and the return on - : Hydro-Aire's sales increased 25% in 191SwiUia77j shareholders' equity exceeded 20%. Income per -: ' corresponding increase in profits due to theexpand? sharefrom continuing operations increased 18% to ' . sion of the domestic commercial aircraft maiket|^i $1.72 in 1989, from $1.46 in 1988 and $57 in 1987. where Hydro-Aire has a dominant proprietary^Sj/l At theend of the third quarterof 1988, Medusa positiem in its anti-skid {Bake system; This fotkiws/< Corporation, a wholly-owned cement and aggregates , .a strong increase in 1988 over1987.' business, whs distributed tax-free to shareholders.. The defense related businesses of Crone Defense/' Net income for 1988 was $G25 million reflecting :: Systems, Unidynamics/Phoenbc and Reastoflex/;7: Medusa's $135 million profit for the first nine 7 ' Defense suffered from the reduction ofmilitaiyy7i months. The 1987 net income of $593 million " , spending in 1989, Shipments weredown in 1989^ j . included Medusa's operations for the full yearv .' continuing the decline which began in 1987. Each/.; plus $9 million related to a change in accounting; y unit remained profitable in 1989 although in tofed^ for pension reversions as required by SFAS 88. .7. profits were significantly below the prioryear's/ ? { Engineered Industrial Products -, ~ ,, level Each of these units is expected to improve in - > 1990, as more than halfof 1990's sales arealready;;; j (Inmillions) ' '., - - 1989. 1988 1987- in backlog. v 7y y 7/y:///. i Sales. : : - ' OperatingProfit Operating Margin $7723 % 913 $7233 . . $6493 . $812 ' $ 55.4 - Ferguson operated at break even in 1989on a ;// F . small improvement in sales. Ferguson Domestic 77 > 113% 112% : 85% operated at a loss which was offset by a profit in/ ' t itsEuropeanoperations.: .> ~ 77-7:.' In 1989,operating profit for the Engineered ;. Kendite's operating profits weredown In 1989V ; j Industrial Products segment increased 13% on a due to weakness in its transportation marketand.7 7% sales gain folkjwinga47% increase in operating/ costs associated with new products. Sales improved/ profiton an 11% sales improvement in 1988. Oper-.. slightly as Kemlite inerted its overaff mariceti^IT: atingmargm improved to 119% of sales compared / . shareand expanded its bdldingproductstfistribo^ to 1L2% in 1988and 85% In 1987.; -r. \ >;: 7 /: tion networic from65 to 110 locations. ftofit/?-;/ - Thewmpany%d(meticvahrebadness maigins remained acceptabfeidthau^dQvmffais^ at a loss in 1989as it had in the prioryear. Results;' in 1989were negativdy impacted bycosts associated - CorTeccontinued the momentum generated irisig with discontinued products and dosedfatalities./ 7; 1988 to record safes and profitgains. A mid-year#/ - whidi totalled$4.7 millioo;however, withthese strike prevented 1989frombeingan evenmorejv// costs behindit, this operationisexpecled toimprove/; ; 0utstandingyeaKK:777;iv;?7vN;77^MI in 1590. Sales were down 6% fdlowinga 12% >.; y7 >5~;Besistoffex^dMStraitpfed itssecondifelgi improvement in 1988.Theforeignvalveoperations/ /consecutiveyearcfsigmSeantlyimprcrredeannqg&j:/ CRTX 0780 v . ance relocatingto its Marion, North CaraCna facility Miscellaneous incomeof$3.4 million induded in 1987. Cost reducrionsand a strongdiemical and . $23 million of gains on sales of capital assets, ' pharmaceutical market have been important factors compared to$25 million in 1988 which consisted in the improvement. . primarily of a $13 million gain on sale of market Polyflon recorded another year of steady growth able securities. In 1987 miscellaneous income in sales and made a strong profit contribution . totalled $12 million. relative to the small size of this niche business. : The company's effective tax rate was 38.9% in National Vendors had another strong year in 1989 compared with 39.6% in 1988 and 44.1% in 1389. as shipments, profits and operating margins 1987, when the federal statutory rate was 40%. rose above the outstanding 1988 results. National Vendors continued to increase its market share in 1989 as it has in the past two years through the introduction of innovative vending machines and. aggressive marketing. - Liquidity and Capital Resources ' - In 1989, the companygenerated $100.9 million of cash from operating activities, compared with $137,4 million in 1988, which included a special dividend of $84.3 million from Mcdusn Corjionition Wholesale Distribution immediately prior to its distribution to Crane tin millhvtf " '. 1989 1988 1987 shareholders, and $73.2 million in 1987.' Several small acquisitions were made during the Sales , -r. Operating Profit - = ' Operating Margin, S70&6 $610.4 S 30.7 . $283 43% 4.7% $167.4 year to expand units of the Engineered Industrial $32.4 Products segment, and an 8.4% position in Milton Roy 6.9% was acquired for approximately $8 million. In ' 1988, the company invested $48 million in new Sales and operating profit for the Wholesale businesses, primarily in.the Wholesale Distribu Distribution segment \vene.l% and ?% above tion segment The company invested $332 million 1988. respectively, due primarily to the inclusion ; in 1989 to modernize and improve its plant and . ' V : of Paltner G. Lewis, acquired inJune 1988, for a ; : equipment, compared with $17.9 million in 1988 : full year. Operating margins in1989and 1988 are; \ and$162 million in 1987. / : "down from the 19871evel due to Palmer G. Lewis. : > The company's strong financial condition ls^. " Operating margins at Palmer G. Lewis have t evidenced by its improved net debt to equity position ' increased steadily since its acquisition but remain ' of 53% in 1989, compared with 64% and 73% in 1988 J : below Huttig's historic operating margins. . ' / and 1987, respectively. Working capital ammmted to : Huttig Sash & Door was adversely affected by. ' $214 million in 1989and the current ratio was 22:1 continued softness; in the housing market, which . at the end of 1989 and 1988. During the year, total ; reached a seven-year low in new starts'. Despite- ' debt outstanding was reduced by $Si million throu^r the tough competitiveconditions, Huttig's whole- Nik* brunches wen* tifiU> to maintain operating :. cash provided from operating activities and a' ' ' .: reduction in cash. In 1989. the outstanding 10p., margins, due in part to their emphasis on the reno-;'; Subordinated Sinking Fund Debentures were . ration, remodeling and repair market.whirh is . - redeemed and refinanced through the company's: j now larger than its new housing business;'Ihe... ' - ; revolving credit agreement at a lower interest rate,.; manufacturing operations experienced a difficult ;: using the same repayment schedule as the old issue,. ; year due in part to a strike at the Rode Hill, South;:,: Unused credit lines of $153 million and $87 million. .' Carolina plant ami start-up problems at the Fresno, . of available financing underlong-term credit agree-; Californiaplantl'almer G. Lewis* operating profit >' ments provide suffident financial flexibility. - , - . margins improved as it began its integration... In 1989, the company made a 50% stock dis< -' .. intoHuttig;^^ ; . V O' tributioh to shareholders, increased the quarterly Crane Supply Canada repwled a small sales " cash dividend 123% to 18% cents per share and rgatn in 1989 and lower profits due to a poor housing - paid cash dividends of $22.7 million. During the - - C market in Canada and the resultant effect of stiff. / . year, the company purchased for $322 million the - prkecompetitionon operating marpns.The 1989-i. equivalent of 13 million common shares at an results are compared to a strong year in 1988, when/;, average price of approximately $18.00 per share;: sales and profits rose 20% and 70% due to shipments ' ; : afteradjusting for the 50% stock distribution/.- ;. of industrial products^;. v.-V.. Oh}. ^ f / .-. In February 1990, thecompany agreed to;,;/' ; ; acquire Lear Romec Corporation, a wholly-owned S/ Piiv; oNmrsi1nenl9eciedg8obtnu7himotcnotkrtltefriye*ootvfrhbnrwceoeeKisinmclno'togpewbmtsnxho;p1ipertIe9irannop8nnlr7ws1lyoyed9'icsonu8de8f8geeefys,c4dlteenol%sitventobehtedflyiedesnabhacitenseiongpnrndh1eetvu9esciern8rtierac9esnsilrxidte$oaepuan8nresee4idnnest3sidontMemtimanewayirvrltealceeisvhsosstysnt^-;.-;/f-/v/'a.'mlsopttuhhuipfrlee$belri3ocsfosio0ixshdp.mi6ib.mauTpnrlmayahyfitpnoeleelysiafola'yBrsfhcoe$rFqeanr4uMtdnv0hieodsmAediltvieniiOaoilrncleonicogorstwomncposar.beipelLcelbadeerbec3iCaetef1oarofi,riRgn1rneprod9aetoma8unerx9csaemee,ttcrhisedomyanontadtha,f;n'$nfrs;b:od6ua;r.-,ul?fie4aVngsrkh^?-/;y/:/;.': dividend from Medusa, partiallyoffset by fHr> *'< S- costs related to the Palmer G. Lewis acqiw J.: v. -->> t- `i1'. . A ./; t, , !5 ---irl itM -.-'.vtl ' - j,j'l '* 4 . V' CRTX 0781  . .V. ... . r win> CrawCo.and Suhwfaries Analysis i r q' ..... , py segment ' (htlhatzmb) NNeet Stsa*fes Industry Segments; Engineered Industrial Products Wholesale Distribution .. . Intersegment Sales ______ Geographic Region: - :... . , . United Staten . Canada . Other International__________ - -...........Interregional Sales A-m1o9u8n9t % $ 772258 52 706,616 48 1,478374 100 (23^85)----- $1,455389 $1,093,410 74 233.788 16 151344 10 1,479,048 100 (23,459) ' . . Operating Profit: . - ; ; . ; . %' Industry Segments: . . ; . . . 'Jv. ; '' V; ;: ' Engineered Industrial Products ' $ 91,778 75 Wholesale Distribution ' V ' 30366 25 ' Corporate ' 122,444 100 (17399) --. $ 105345 Geographic Region: United States ; ' Canada ". Other International $ 92372, 76 18,481 15 11391 9 Corporate ; 122,444 100 (17399) " $ 105,045 ASSetSV. .' V-: Industry Segments: ; Engineered Industrial Products. Wholesale Distribution - V Investments Hdd for Disposal; -- Corporate /, - . $ 387,719 63 227313 37 . 614,732 100 . 39325 1988 Amount % . 1987Amount. $ 723253 54 610,418 46 1333,671 100 (20335)----- $1313,136 $ 975,749 216,764 138,696 73 16 11 1331309 100 (18,073)----- $ 649315 58 ? 467352 42 1,117,167 100; (17371)------ . $1399396 $ 811380 . 73 183216 16 116,724 11 1,111320 100 (11,724)-- ` ; i . 1 $ 812(6 74 28,770 26 - 109,975 ~ 100: : (14309) --: $ 95,666 v- . :55396K;33% 32A35>i37 87331^1001 ;-:/;(12201)r-- $i 75^30 $ 82256 75 ' 18,757 17 8362 , 8 109,975..109 (14309)" $ 95,666 .$ 603543fv69;| ;-->-.1735t'#'20'^| 9223triiB;f . ; 8733P10Q* v (12201)";; $ :75,130::7:-;; ': $ 395,080 : - 63 234,034 .' 37 629,114 ,100, 52,626 ';i'; ' $ 386210 k 72 V 148305;; 28 ; 535215 ; 100^ v'.-: 71258;--:% : 28294^!":. $ 634,767 m OaneCtt.mdSiteaariB Analysis by S^ment (continued) ' Industry Segments: Engineered Industrial Products Wholesale Distribution Corporate. " , . Geographic Region: - United States. Canada . Other International 1989 $18,693 . 4,105 10,391 $33,189 $26,420 3525 3344 $33,189 .. ^yV. '-.w r-v 't ii; z'*\& 1988 1 ' ' ; *'* : - Depredation 1987 1989 1988 . 1987 $11525 5,767 273 $17565 $12538 3512 .-- $16550 $11,479 3,007 3579 $17505 $10,485 3,688 2,077 $16350 $16,730 4317 267 $21314 $15592 2,477 3345 $21,314 $15513 3,614 217 $19,744 $14,051 2,163 3530 $10,744 $15531 2523 213 $18567 $13,006 1,727 3534 $18507 ; Five Year i Summary V ofSdected Finandai;! Datay Yeats EndedDecember3/ , I/* thousands except sharedata) ` Net Sales Depredation . Operating Profit Interest Expense' Income before Taxes- Inaxne Taxes - . .' ;; Income--Continuing Operations . 1989 1988 . 1987 1986 :: 1985 $1,455589 $1313.136 $1,099596 $1,043,718 $960,702 .. 21514 19,744 18367. 16391 18,132; y 105,045 95,666, . . 75,130 75,044 38394* . 19,177. . 18542 19,100 . 26550 y 28,176 91579 81,490 . 58541 55305. C ' 20545:r.- (35,660) (32304V (25537)-: (26520): w <6360)W $ 55,919 $ 49.186 $ 32,704 $; 28,785' $ 14585 Income Per Common Share-- , .. Continuing Operations:. : : Primary : r Fully Muted / ,. . ` $172 169 Dividends Declared Per Common Share: 'Cash": ..... $.7083 Stock Assets;;.:..t :'...y LongTennDebt^-'7 ' .. ' j.y - $ 654,057 $ 119,102 ' $146; ' ' ' $.97 . -' ' : $54 . y i.45 54 ;; *87 $5167'; , $5833 . $5200 681,740; $ GM,707.. $612,780 143,133: $ 151,096 $ 225,931 p.W.,4 V' ,.47'M. $.4733 2%- $030,010 $270501 Mmtrs mm-morriia rhlnrUtrix/mti of$25,4211; See Financial Review \ CRTX 0783 F `.',i i " CRTX 0784 I I .- 1. . ' Directors ./Corporate Officers . . ' . ' v, , E. Thayer Bigelow,-i)r. 2}?'.Robert s, Evans . j IVcMdi'iu^HntiK' Box (Hficivliic.. Chainlet). Clnet.F.yi voi m- ; Comnuuiicaiiotis'Sekviiys. -<Iflicer'A: Pi<-ski<-ni '' ". . .< Robert S. Evans' - ' : '-v' .. ` i B: Jack Barnes. ' Chairman. Chk-f'ExccunVe Officer Executive Vice President '' & President of the Company Jeremiah R Cronin 2 . Dante Q. Fabiani1 Tice Presidetit-T-.Finance v 1` Retired iVtsidcni xif the Compatn r- * t, Richard S. Forte President .-Forte Ca'shmere Chief Financial Officer ` Jjhoitias C. Fish '. 1, Vide"President. Lorjuraic ' Loinpain. Inc.. Im]ru-i i Development ' and Manufacturer Pau/ R..Hundt Dorsey R. Gardner ` President. Kelso Management .* .Vice President, Secrctarv K General Counsel ' Cn .'Inw-stnient Management Robert JL Muller, Jr. Robert W. Lear K1 , Executive Vice President I inivlor nf various cor|xir.-iliuns Anthony D. Pahtaleoni' Dwight C. Minton , } . Chairman &'Chief Executive We President. Environment. Health & Safety Officer, Church & Dwight Co.. Inc.. Household Products Manufacturer . . Richard B. Phillips \ ' Vice President. Human , Resources . ,. - Charles 1 Queenan, Jr.2 I`.inner. Kirk|uti ru`k & ln'hhari Michael L Raithel Attorneys at Law,1, Controller- * .. Arthur A. Seeligson, Jr. !nde|x-ndent Oil 0|Xrr;itor. In'.estments ' ' S Boris Yavitz ` Tlie Paul Garrett Professor if Public Policy and Business Responsibility & Director of the Management Institute. Columbia I'niversity; . ` Grtiduate School of Business Executive Offices ., <i' t- (.'I _ ... i'- - T --.7,TlnKf Venue '. I A ' 'Ne\v -WIG NA'-JUdi:. : [ .:iVlt-!ihoiie:(212iil.T7;ii.Kt' ' FormlO-K ' . .... Copies of .Form -Ib-K for; 1:989;,, .;is filed with l hg-Securities ;gi3. , Exchange Commission are-.lv'ail- ablc ti|mn wi'itteii reqtieHi from'; tlie Secvelftrs S (Jffice at the " ' ..address alxive.V ; 1' Annual Meeting- The Crane Co. annual meeting.' of shareholders will be held at 10:00 a.m. bn Monday. May 7. -1990 m the 10th floor meeting room/ of Morgan Guaranty Trust Co.,'f) Wist o"th Street, N'eyv York. NY, Stock Listings ` , . ^. Crane Co. common stock is traded on the New York Slock 'Exchange ' _ '' \ . Stock Transfer Agent and - Fteglstrar of Stock;-.;. v- First Chicago Trust-Company .' ' of New' York . ' HO West Hroadwav ' . . v . New York. NT KKM7;;.' Bond Trustees and Disbucsing Agents '; : . - v Citibank, N.A-." -C ' - ' New York. NY lOOlo.A'. A/ -. Bank of America NatiohabTrust and Savings Association' Jxis Angeles. CA'}kX')7vJ Auditors ' .'-.-V i,' ; Deloitte-i'i louche. ()ne Wor.ld, Trade. Center New York. NY KXMS :.-1 ] \/. mi* t ni itt, l\\n uhit \hu.fnl !( lift ` : \l. wU r <{ !ht C <. unint:tU '<! . ^ . Equal Employment*'tN Opportunity Policy ' Crane is an r<|'u:tl o|)|xinunil\.' ' 11tijlbi\i-i It is (In ]<ilie\ nftlti> C"in;i-(in'l.o neruil. hlix . pinmbtt and tt anst'ir ni all job el.is-ifica;. nr.ii' a ah,-ot ri-gaiil.iii.rjci-: ixiloii-ligi.iu, s<-\, agi:"C naiiona! ungin CRANE::.;"; ll , .. . 1. - Crane Co. _,7A7 Third Awm-uu- ; ^Nv''\ V'i"k. NVu "S<*i'K'1 iM11 * /; * < ^