Document k93819EQp6kJYRgKkGZnK8e0V

Crane Co. 1989 Annual Report L- / / / / I ! CRTX 0755 Crane Co. 1 : ............. . - t. :ii-i- ; hi, i i, 'I. ii.i',. I -It I '.] Ill I ` t',111 1 III.'iril ,iil'iin;i!!i in< '* h it.*!i ri.` . .iw r-i. i n.i: iinl.i'' i. r........ ii..i. v.ili tis'-1 ii.tiii..' !. .i r > - i!',( .iliiiii'j (ii "i.it i\i I . .,11c1 Mu !li~: * i.i . '-.i'. ! '.tiMfiiii id I" V. C '.ini 'I .I i !<>.<(;>ii|iii 'i \........ \ii.i 11. 1 `,i i.i.f \ . 1 Cover Table of Contents !!< "** ^ll.l'i !1. illll i - ..1 ( Ij* r,ni> ill- | i | ."H i.il |''l.ilr!r.r:ii v J; I .'..llli I.i! ki-Mi-u lh \I.fi.iycnicni"> I)iv':!S'ii/n -I I ith 1.ir~ .mi! ():!ii i-r- Ii'.-kIi- H;kk L'r.t-r Operations Engineered Industrie. Products (. In mini nil' l \k.|-"l,lj!f|lil' I'l .1.1.' C* i iti.7in ;r... J x. ./i III. / K.;'fr I'r>:^~-:i !' ( /, , t M.-V,, lA .* I . :* 11- :' t, . 1 <*/.?/ / " .'/ \ /.I nth /" - '-.'if, hhm : :*^ .-.V k. f tIII I \ /< !> '< V*' til' '.in hm, ( - i (. ' .I'l-.i-i I'*`-ill in il.n- -.i. hi I'lm:.. it-..-'.!-- 1. |i'.'"r!'.:.l ml,: ll .r, ':</?/ .11, /U' M.......... `At ' <;/ r ;% \ !k I. ,4 1 , )!i l.hl Mv Wholesale Distribution //jr'J.V S.n/1 Jr Air (." t. :'.i ''.i rtiriri. Mi-muih C i'/i.'i Ciniiiiln. hi' . L i',/ih .'nipph IhiiMini Mni'.'ri-al Canada * CRTX ' Cnggg^ftgjrtn Financial Highlights * *'v^r*?- r^y<.*' #:- 1999^ . 1965 ;-: 1987^?. 1986^ :1985^f Net Sales .. Operatingftofit Income beforeTaxes-- Continuing Operations Income Taxes $1,455589 $1313.136 $1399396 $ljM3JI8 $960702 {- 10Sfl*5 ; 95366:. 75,13* 75m ! ; .38394*.":'.v - ' .V ' . -! * "" . ` ' ,, 91,579 81.490 58541 ' /.V 55305 20345. ;'. <35060) (32304). (25337) (26320) (6360) Income from Continuing Operations'" $ 55^19 $ 49.186 Per Primary Share* , Income ban Continuing Operations'" Cash Dividends Declared . Average Shares Outstanding 91.72 v:.^'.71 ' 37,583 ' $1.46 \ .62 33356 S 32304** S 28.785 S 14385 . $L97 38 33326 $wK 948 : -32 '. 30367- ; 30390 ; ' w fMlmkt tm+mlhm ntmutUamhlui b tJunbUn a MIS*;It 39fitAon m NNt JLW.!?* it t'Cfinkmi m ***,*. SltiXIiSM fit tbmt M mi. *mJt3.0l:iSM>fiTibrlu ... - fa.Vj*skJl*5t>ltkxi<bjt>ilmtxmn t*W.llllrrfixtm)ixltltiilill ElliT.SlItitakdatritmtMim tWtiiiliJZI sIntJiridniJimttHZ.' . , >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 chaiRes, 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 toi $.75 per share and a; 50% stodc distribution was made to : increase market liquidity. .;- ... %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 : improvement from ongoingoperations! However,'extensive inventory write-offs * for<Bscontimied producttEftnneessaanncdT ;;;v:| expenses at dosed plants producedan ' -." . unacceptable loss. The tower level of. < 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. Cranes debt is the lowest it has been in many years. Our net debt to equity ratio has dedined from 73% in 1987to w ; 61% in 1988 and 53% at the end of 1989.V ] Crane's strong financial position provides thecapability totakeadvanta^| of any opportunities toehlrari(#^^|; shardidder value whidi1n^>re^frwi^|; the weakened economic outlook and ; difficulties beingexperienced hytratq^:5|: highly leverageicompaniffi. Axprations'#;| sboiild be available at favorable ptices^||. in the current environment.Theses-.*: opportunities will be weighed against"`jyj thepurchaseofourown stodc at favorable: | prices. During 1989 we were able tbi:J?!- ^ purchase the equivalent of 1.8 million > ; !. - A * " ' ' -V. f ^f/L 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 thegram.TheCnmelk)^ haspursuedapolkyoftryingtoalign shareholder and management interests over the last six years. Stodc 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 * ,~-V r * i. CRTX 0759 `So *. Letter to ;- ' ; Shareholder^; lurniimndt : experience butarepleased and ' to^^^vrecantooorrectex^sl^ reassured that the United States will be well represented by him. Mr. Dorsey . R. Gardner, a strong advocate of . shareholder interests, was appointed to fill Mr. Curley's position. Mr. Gardner , problems and avoid future mistakes. ' / ^ j. I would like to thank all Crat.^;;-;'n['-- employees for the success we have';K,? \ achieved and recognize that what makes!}-;j Crane a strong company are the people tl 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, Viiv President* v . Finance, retired in 1989 after twenty- Sincerely. five years of sendee. We will miss him 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 Officers!itel' ' & Administration with Research-;-';-'; and Fftsident' , *" Cottrell. Ino, replaced Mr. Whitley;; ; = increased attentiontbenrironmental;;; February 26,1990 concerns has led to the appointment of . ' Mr. Anthony D. Rantaleom, Vice Resident F.nvinHiiiu'nt, Health and Safety. Craw v\ is committed to being an environmentally...; responsible company. We will continue}. 1. xr. .j < \ S< -h 4' s ;-1 M'-m . " " * J . \ A..}}.;-; I} J .- V.;' J'Vv;.**'v?Vi`% /*\ - ',-V. v \.! ." ?V;-.v;-: CKIa (J/bU 7 ;* CRTX 0761 . vw . r'-ft .. Onmt Vhtves;was reoiganized in 1989by consolidating the dm^i^systemstohklustiy.' The company's aggressiver has accelerated futuregrowthpL domestic Valve Division and maiketingefforts during 1989 forChempump products as a / ;:; the Valve Services Group and relocating the headquarters to contributed to a substantial major solution to these environ increase in sales and profits for mental problems. * !'' Joliet, Illinois. This realignment the year. Operations were . . was designed to reduce overall expandedin 1989to five loca and manufactures a line of. costs and better position this tions which, along with the vertical turbine and horizontal business in the marketplace. In continued new construction of centrifugal pumps that primarily p addition, a full ran^ of after- chemical plants in theGulf servethedeanandrfirtywaler ; market services, including parts, Coast area,contributed to segments in thegeneral indie-' repairs and valve modifications these successes. trio), 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 were discontinued in 1989 to allow Crane Valves toconcentrate its marketing efforts on; nwre profitable lines.of valves ; and services. Non-recurring. enhancing its market position trate its efforts on provirfingan * . as the leader in leakproofpump improved level of customer: ' * . technology, through product service and obtaining furthe;f^y / improvement, new product V; penetration of the phanriaoeuyp:'ijr introductions, and designs added: tical, fuel and specialtychenfical|@ in March 1989by theacquisition maHcet&TteM6dd47Mp?%f|^; Engineered charges associated with these ;. ofthe canned motor pump ... Indusbnal^; (product discontinuations-*; \ ;: operations of DresserIndustries' !: accounted ferappraxirnateJyV.. ; RadficftimpDivision. These*, TurbineTransfer PUmpiwith^j; Deming'sBquid lodtmgfemiui^l'ir: which prevemtssuifecelrakaB^ipy ftoductsf- 80% of 1989*s loss. With thee: designs, along with-the intro- y and envinmroental oontaminapyIfi : charges behind it, substantial duction ofamagnericaHy driven: ; lion, has been instrumental nti^p:: improvement is expected in 19& leakproof pump, have increased gainingacceptanreintheabdve|li*|>; y v Valve Systems and Contmk market share for Chempump ; . mentkmed : is an industrial distributorsup; by enablingit to offer 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-P-/ " *. c` Ah inventory of standard and . specialty valmsandvalveactua-: tonenablesVialveSystemsand Controlsto meet acustomer's / specific flowcontroi requirements. Doming irrigationpumpsdrserins . [ waterfroma3 mBSon gaBon hokt-rv f ing pondfor irrigationofacentrai; - ( . - - lr"` -- * 1- #1" v.-, ' v1" * * V' .V CRTX 0762 performance increased signifi aircraft MdJbnnell Douglas " intbede^n,mamifectureand cantly compared to previous . continued significant sales of salecfelectronic vending equip years with most product lines gaining market share both the MD-80 airplane, while com ment for snacks, 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 three years, 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 lic valves and fud boost pumps ' duction ofadvanced micropro 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 worldwide leader in the design capitalize on any expansion of oped for the US. Postal System. 7 The SnackCenter contains many 7 .- and manufacture ofelectron!-:- these military opportunities in unique design features creating: ' cally controlled antiskid braking. ' the '90s. Thegeneral aviation-;', ' 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 extehave variety? amtinuing to improve whereV-. 7 : market. The SnackCenter1^! 7 of fud pumps, hydraulic valves.7 production rates have increased '' design features merchandising^ .fry 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;.;! ; HydrthAire had an excdlent 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 Nationd Vendors vending '. : machine developed for the US. Postal System in operationat a busy Washington, DC, shopping man.' Y. To removedestructive contaminantst.- - * and improvetherefiafaBtyol micro- - ' circuits Incorporated inHydro-Ajre'sL braMngcontrol isOhsiaoniMto->L are subjected topteimacteening^j.; ' priortofinalcncjpsutetiow--; "i ' -v.:..-1, .- -'*f'./'-. \ . --v - to5< ' .-/-.f m- .* * ts <"S . . v\. ; '- - - / -i '.}- --r y CRTX 0763 .A size and shape cah now be industries, shined theh^jCst arid IanrinateappBrarions are vended from product shelves kvd cf product in its 35-year key part ofCmTec's marketing . that quickly adjust inherit, history. By successfully intro strategy to drive futiiregrowth." 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 mailed strate materials and capacitors , received a majorcontract to and by expanding its distributor fxuse inmiKtaryandcommer- ; : | 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. Glashoril 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 RjJyflonY This advanced microprocessor- following Ryder Truck's con components and materials. controlled unit accepts up to version of its entire rental fleet Polygon's proprietary processY. $20.00 bills and dispenses 16 to Glasbord International sales ofelectroplating pdytetrafluo- selections of postage merchan improved significantly in 1989, roethyleneffTFEjtets enhanced : dise. A continued commitment and an even faster sales pace is MR! coil performance and -f: r p-\ to research and development 3 expected in 1990., improved imagequality. JUyBon ^;' ; along with aggressive market ] CorTec is the largest U.S.'; looks for excdlent readtsjnii^?; positioning programs will ensure ; manufacturerof customde^gned; (this growth Engineered / National Vendors' futuregrowth^ ; fiberglass reinforced plywood V? Industrial? % firits fuD range ofproduct entries;:; (FRP) laminates. These pands KemliteCompany,theleading; (are primarily used for truck transferand poatjoningdevide^|| to the indostiial amqmaiiqnr^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, buthad0?;~ 1989 CorTec supplied initial . reduced prafitdue to the(o^sRg^ quantities of highway billboard :` ; associated with the signs after n two-year develop- of its custom cam product lirieW; : ment and testing program. Devdopment of new products Kemlitetranslucent root panel provides many user advantages C including inside visibility to reduce - loading and unloading time and a ? reductionol overall trailer vreWit. Foiyflon magnetic resonance imagingcoils used in soil tissueanalysis and spectroscopic coUs^ - foreiementanalysia. ? *i .. * ' , iJ r>j ^ B -'! f: : ' -f*' ' CRTX 0754 % to anothercompany manufac- . fluon^MlynieriiriedprodiKai, % n"fis^ah&aa' 1b*Vw' ` *r V-". ' v` ' taring facility. Rerist^kx/D^nsehakaSiig is in process fordetonators ?; Several new products were supplierof sgraniMe 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 awplings these products is the defense Midwest movingto the Defense . to service the food and beverage industry, Resistoflex was able ' Systems* fatality. The two . - 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 service and a significant .. turing fatalities in St. Louis,. : expand its production resulting increase in its in-house manu* Missouti; Hyland, Illinois; and 7 . in increased market share and . facturing capability. To offset Conroe,Texas. This 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 lined pipe and fittings, valves, .5; expanaonbdkiws, underground directed to the commercial aircraft after-market. Uiddynamcs/Fiioenixdevd^ Mfcswthaan^eengjrieeriug. \ andadnuiiisliativestal^allowiug 7 fra an improved competitive pos- 'y gaadine hoses and reaction: and manufactures precision,. tore withto thedefenre market >: vessel components. The division, : ordnance mid related electron^ In 1989, CraneDefense Systems^;" 7; :7!7 now in its second full year erf v,: chanical mid electronic devices 'F reoeived contracts to su^ei^VA.^ If/ production in its new Marion^ ; for tito Departmmts of Energy';-; ment<mthenewDDG-51 %hforthCaroliria plant, experi*^v arid Defense Orders for speciak AEGIS Destroyerand thelHW^p:^ f enced increased sales and record; feed devices for the Department t Class, AmphiMousAssault earnings. Leadingedge tedinol- - of Energy and for the Tridenti-:. ;V ogyin the moulding and forming D-5 continue at a highkveL Six Internationa) ;; ' y of high performance resins , : newcomponentswere added to; . Crane limited. UnitedI5ngdmryy^ -! has placed ResistoflexIn ari; - the Department of Energy pro consists of two business units:-V; 7 ;. excellent position to maintain I. its dome-tic leadership in; ; duction programs during the. ' year.In additioh.amulti-year- procurement contract was. ;.. Fluid Systems which ninnufac-; 7 turcs valves, pumps and pipe; F fittings and Crane Industrial]; obtained to provide the ignition!;: forthe flight motor of the TOW. ; AlUnUynamlcsPhoenixaneMtcoo. lamination controlledagemblyarea assurncomplete reSabHty ofpred, sion electromechanicaldevices, w*". Crane Unritedtoflre pun^padrege Is designedto meet rigid mechanical: and hydraulic requirementsof ^--7 modern Rreprotectionmethods.:^; V-: y;;- ` ;:..r*.y.n :, ' ; ::. - ` 1 -' ' - /*' ' /; ' ' f + s**?-*'1'** * * . /-$ /. .* . ,t\ - \ Jr. ' 4 >y -V . . . r:t/: CRTX 0765 Engineered Industrial? Products? hVHliniltlt) which 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 marketing; ? Fluid Systems Division. Hutton steel foundry were am-'' efforts toward thecommercial,:: ;-; increased its market share of duded resulting in improved institutional andiawTO&ri;i.-^;';;j pipe fitting and valves in 1989. operating ratios for Crane 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 of the total market?? I prehensiye range ofbronze valves manufactures and supplies The introduction ofnew pro- ; . ; ?;1 and the launching ofa major , valves to the hydrocarbon and : ducts continued in 1989 witha "V?.j engineering-design-driven cost petrochemical maritets in ' . low-silhouette waterdoset.a; Va yreduction program tolower the Australia, NcwMmd,Indonesia line ofshower stalls and bases? j cost of bronze valve components and Malaysia. In addition, the and a lavatory for the handi- / ..j by as much as 25%. New mar company operates comptdien- capped. With pottery production '; ! keting arrangements in Spain . sive valve modification and . difficulties solved, Ciane 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 plumhmg fines in 199ft;?? nance sendee activities in the. profits increased during 1989 ; TheWveandhtdtidm^^^i . valve,pump andheat exchanger ' and the order backlog remains i)ipi^derign^puid^es^ndfe|] V rdiin^hihgiharketFIre pump;X healthy goingintol990. j;; manufactures a vrideyarfetyCf^li sales oontinuetogrow, increasingj: > its UJt market share to almost Canada . 30%. Anew fully integrated;-;-. Crane Canada manufactures valves to control ail Binds mid chemicals ih a vSk^HI? . 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 watewmfevalvt??; f struetkm markets. The numbing benefiting from a growing/ ' Division produces and markets infrastructure rehabilitatiaa: a complete line of higji-quality . maricet throughout Canada.' plumKng products. A dedine ; j. % Crane Canada's Stratfordplant pro. duces over 10000porceIairH- stedbattitubsperyearusIngthD latest roboticwelding technotogjt.- Crane Australia Is a majorsupplier,:?.' of valves to petrochemical and hydrocarbon processing plantsamt oil refineries throughoutAustrate#? CRTX 0766 V M HuttigSash & Door Company consoGdalion ofcertainfetribu*. WnleHutt^marketswre?is the fairest nationwide dis- \ tkm centers m thenortfierii New weak in 1989, the company'- \y.y. tributor of millwork, windows, England area. Huttijgalso rede improvd 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, consolidations should provide serves the residential, commer- ; and threewood window assem improved operatingperformance dal and industrial maikets 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, start-up phase of its California : Fdlowinfl ihp rap'd expansion window business, which was products produced by Crane Canada and othermanufacture. I of Huttig in 1988, the focus in initiated in 1988 with three its. 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 strong waterworks business7; . devoted to the integration of. operation in Fresno. The refine 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; Y. \ 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 years to come and will position Huttig as a major suppjkr of>. , ' - ." .. wood windows to the southern ! -. Y ' ; Y..-- Y' . Califarnia new construction, .. '; X'-V.vy-'H ,i *v { . ; -YY-YY-: \ in the Northeast resulted in the.: replacement and remodeling markets.-'.-, .- , ? -Y - Bulkfing a Huttig "True Divided' Light" tnsulated window, available tn many Bght configurationsas^, weS a&several 888h options:,Y.. Loadinga trailerat HuttigTs Souths em Manufacturing plant in Rock-Y v HIB, SouthCarolinafordeSrny toY a Huttig branch bi thearea:. .:P ' '. ' . '* r *.: . v * I ' I ;; ' . - . S v .I : " ' :-Y V' ' i I.*; Y..Y- : ; l YYY.'^liyri-'? 'p-:. .\\V y. . Z'i j-.; v- s | YY:S.YYY?'-'::y;i -v -M'/r-Mf ` .-1 ............. .... f\ ` ' . 9/0 XJMD ifAAA Consolidated Statements of Income m W' ?y 'j -": Net Sales Operating Costs and Expenses: Cost of sales Selling, general and administrative Depreciation . 1989 $1,45589 1,136,063 193,167 21,314 1968. : 1987.' $1^13,136 $1,099396 ' ".7 '' ' * 1.024242 173,484 19,744 854,156 152043. 18267 Operating Profit OtherIncome (Deductions): Interest expense--net erf interest income of $2,327. SI .730 and SI-328 in 1989.1988 and 1987 Miscellaneous--net 1,35044 1217.470 1224.466 105,045 95,666 . *' - 75,130 ' (16250) . (17,112) 3384 2236 (17,772); 1,183; (13,466) (14,176) . (16,589) Income before Taxes-ConUnulng Operations Provision tor IncomeTaxes Income before Cumulative Effect of a Change in Accounting Cumulative effect of a change in accounting forgain on pension - asset reversion, net of taxes of $5,598 91,579 35,660 55319 81.490 !, 58-541 32-301 25337 49,186 32204 ' 4- -- 4"'4 -- . v ; 5j673 Income from Continuing Operations Incomefrom Segment Dlstr&uted to Shareholders-- Medusa Corporation, net of taxes of $6,727and $10,869 in 1988 and 1987, respectively - = . 55,919 .. 49,186 38377.: ' , - . >" ,.: ,*r ' '>.-. * " ' r* ; , 1 ' --- 13297 ^20909*! Net Income ' ; . 4' v ' S 55319 $ Primary Net Income Per Sham: V:-V. . Continuing Operations:^ j ` \J,l "i * .J'.'C.V-.' ' Income before cumulativeeffect of a change in accounting -' Cumulative effect of a change in accounting-pension reversion $1.72; 62,483 $. 592864 itk-0? $1,464 444.16 4 Income from ContinuingOperations - Income from Segment Distributed to Shareholders-- . Medusa Corporation Netfncome '='.-c- '1.72-.-. 44. 1.46 h-,v r . . ' -- V,-.-;295=. v $1.72 $125- $125- V Avrnige irrinuiry shan>s outstanding - 32383 . 33.656?.. 33326 X FuHy Diluted Net tncomePer Share:4; Continuing Operations:4.....- ~L Income before cumulative effect of a change in accounting .. $1.69 : Cumulative effect of a change in accounting--pension reversion . ; .- $1^45^ ' --4 :;'%4..%164 Income from Continuing Operatons Income from Segment Distributed to Shareholders-- 1- Medusa Corporation - ' 1.69 -4 .1.454 , 1.1:. ' /'.V:./' ' .. - 38 v : 4-4:39^ Net income ` $1.69 $133 ?:>$1394 Average fully diluted shares outstanding 33,036 343494 %303r: ! 4..,^c?.< *<; v . .;jV. `>,-1 CRTX 0769 J GnCta<SihiSn> Consolidated Balance Sheets Assets Current Assets: Cash and cash equivalents . Short-term investments Accounts receivable, less allowance of $1,502 ($2273 in 1988) '. ; Inventories. at lowerof cost, principally UFO, or market; replacement cost would be higher by $18890 ($13,199 in 1988): Finished goods . Finished parts and subassemblies .' :V, Work in process * . - . ' .' ' ` " Raw materials Ollier current assets Total Current Assets S '- - / . <1 _ -'f'r.-w 1968/ - ->...- $ 4,855 1,200 173,050 $ 40,000 1021 170067 . 134024 135,775 23,654 20095 28030 7 .30,493 ' 250337 7 28423 209,341 213086 90B9; 7 6,759 398035 432033,; Property, Plant and Eqtfyment at Cost Lind ' : .-7. Buildings and improvements Machinery and equipment ;. 23028 23,4147 127000 128032 229023 : 7 213075 Less accumulated depreciation^ : 38Q051; -Y;368421;; 1920467 1884457 188305^ :&mgns& Other Assets: - ';-> '-7, V-' '7. 777- .' Investments^.f;.' . i'.;,7-7' 7;;; 77-71 13016# 7:7812574 ; ` Intangibles, less aivumulated amortization of $19,539 ($16,196 in 1988)77' 7778193 : Cither;/.- ' '--77; 7;' -7-- . -.- 7777: 8013?)>CH06Bg: Cost in Excess of Net Assets Acquired, less accumulated amortization;' of $1016 ($8223 in 1988) V; 7 28134 7 7^25070^ 41,7837 r v $6540577 $681J40 See FinancM Review.-/', .7 '7/. ' '' ' ~ V'-- \:r-[ .7 /v...;,- ! <7 ' ,V*. n .'V?-i Ml 37; .:-Vl4 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 2592 r .. 5* /V?*.! ' j" 'i CRTX0771 Consolidated Cash F)oik Cram 0{aling/lcM Income from continuing operations 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 19.744 9516 (28,714) 84,300 3388 $32704'. < 18,267 .. 9960 1957. 13,613: ; (3.190)-; Totalfrom Operating Activities . 100,907 137,420 73311.; . Cash Flows from Investing Activities \ ./ ~ r Capital expenditures Proceeds from disposition ofcapita) assets Equity investments , (33,189) ' 9,433 (8,080) (173) (16350); 4557 . "5,124.; Payments fur namisilimis, net of liiibiliiiw iisMimwl of $143 in 1989 and $34,100 in 1988 . Proceeds from divestitures . Acquisition of minority interest in subsidiary (1,495) ' 3378 .-- (47558) 7519. : (7901) > - Total from Investing Activities______ ; :. (2299,9953) . (60366) (11.4H): | , Cash Flowsfrom Financing Activities; Long-term debt: ': . . ; : New debt . ' ''' 21926 : 3368 ?`18A62l:t Repayments;/. ' , -? : (45924) , (17566) C;;<2l32l)ii Dividends paid- -j ./ `.-v' (22,731) (25544)#,(18538)^1 Reacquisitionof sharesStock options exercised " .; , - 'W ..;/> v",' I- (3296) . (27570) : OBfitm v'*.v, %146 & ;V;.2A24/^ -? Redemption ofcommon share purchase rights , -; / -- ; .^(738)^ Net increase (decrease) in shortterm debt : V:' (31950)'t 5 15,767:?::`33X1801. : : Total from Financing Activities , ; , .-y.--/ , (106,129) (49,359): (56925)fl Effect ofexchange rate on cash and cash equivalents . ' 30y: y-'-190 y? Increase (decrease) in cash and cash equivalents/ " Cash and cash equivalents at beginningofyear (35,145) . . . ry 40,000 27385 : r.?6377fl 12,615 : y f CahandcaihoquivaionUalendofyoar - $ 4,855 - $40966'?; $i25is|;| Detafl ofCash Provided from (Used for) Operating WorkingCapita! - * ^ '*.( rr>%jV CRTX C772 Consolidated (Intiomjamheznftsiatrdata) - 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 1,503,327 shares Exerciseof stock options. 131298 shares Conversion of debentures. 2229210 short* Currency tninslation adjustment At December 31,1987 Common'. Shares $83260 i. . . Capital , - Retained Stnptus Earnings $14250 S 88297 / "Tottf' Currency; Comman*, TranshtiaiK Sharvhntflm9^ Aflustment Equity: $(13276) $173231 '' ... -- -- - * ; -- 59286 (19289) 59286 (19289) (81286) 7,799 (3,739) 81286 (7.799) (38204) % -- ' * '_ ' (42,043) . 357 1,780 > am . 2.137 . irais -- 57253 -- 22.426 . 109,666 '-- 127294 9.014 (4262) 71288 9214 .255,724.- Net income. _ 62,483 62,483 Cash dividends '------ ; (20,468) * (20,468)' Distribution of Medusa Corporation common stock . . ------ . . -- ' (131) . (131) Reacquisition of 1,108,484 shares . , Exercise of stock options, - (1.108) (26.462) ' --: --r*'.*. ..(27270). - ' I63j*)2 shares < ; Conversion of debentures, 53269 . 163... .'1 ' *. 2261 . -- ''mi-- ;-J. -v * K 2,424.. . shares r : v.-v Restricted stock awarded, 324296 :" ' : S3 :- 278 . ' * *,, ' j / ; 1 . . 'k r ". *v 33tv m. ' - shares, net 324 7,431 : (6.155), . 1200.;? Redemption of common share purchase .. ri^its i .. . (738) --.. Jm.rZ' (738),1 Currency translation adjustment . \ 972 972^- At December31,1988 21258 92,436 . 163.723 (3290) 274227: >Net ittriimt*-T vCashdivuk'ntls>J;;:i .50% stuck distribution; 10263.60? shares.'-. ; .. Reacquisition of 1269,035 shares .;. Exercise of stock options! -. 236,197shares>, ' Conversion of debentures. 23377 shares . Restricted stock awarded, 395,420 shares, net r Currency translation adjustment At December 31,1989 . >V' ' \ r ---V. .. :", 10264 (1269) ... - 236, : (10261). : (31,027) < . 2,910 55,919 (22.731) ' V-- '/- - -- ` *. m * : 55,919 . (22,731) ' ' .. .. v..->' -7/ x.''" j --mm \f' (32296) .y--mLL, 3,146., 23 . . 112 . 135 396 '--: $31208 9293 . ' - -- ' C2290) . --- $63260 $194,021 .: (1255) $ (5245) 6299 ' (1355) $283244 See financial Review. -.i r ..Cl..; 1'j--;11 t CRTX 0773 OwOirtSyMMB- Finandal Review Accounting PoDdes . . f/Vnsjtms--Thecompany adopted Statement of ' ` Principles ofConsoTidathn--The consolidated finan- ' Financial Accounting Standards Na 87. "Employers* c rial statements include all subsidiaries. Medusa AAccounting for Pensions", and No. 88, "Employers* 1' Corporation, whidi was reported as a segment held Accounting for Settlements and Curtailments of :V . for distribution, was distributed to shareholders on DDefined Benefit Pension Plans and for Termination 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 eel ffect of a change in accountingerf $5,673,000, net'' presentation. . ;oolf taxes of $5J5Q8flOO from the reversion ofsur-plus, ` ; Cadi Ej/rira/Wjfc--Highly liquid investments with . original maturities of three months or less are considered to be cash equivalents. ?assets in 1985 for pension plans covering non- ' ; bS. aarsgha&ininDgoeomr spulobyseiedsiaoryf t.he company and its Huttig .. Ij In the first quarter of!989. the company adopted : ' /<//v/(ini5>=Invt,ntorkti lire stalttl nt tln lower of S8IFAS Nit 87 for nil hignifnuni contpnny simnsontl ' ; cost or market principally on the last-in, first-out faoreignpensimrplans.. ' i. - (LIFO)methodof inventory valuation. The effect of' inventory quantity reductions was a reduction in cost of approximately $1,500,000, $600,000and $5200,000 in 1989,1988 and 1987, respectively. , : .. .T^ATInhcJqeauHnisueiaatitroeynx1sG9a8rn9od,uCIpnr,vahentsedt^mUaedns.ptaseccqiuailrisetdinthtehae.srseeptsaior,f. . ` J j a1nd refurbishment of heat exchangers. Thecom-- j, : Property. Plantand Equipment--Depreciation was. . p:any acquired the Pacific CMP canned motorpump M ., provided primarily by the straight-line method over ppiroduct line as an addition to thempump in March^ j, the estimated useful lives of the respective assets. : 11989and certain assets of the parte, resin and sendee^ . .. . The double dedining balance method ofdepredation biusiness of Beko Water and Waste.Treatment as&C1; was used for assets acquired prior to 1985. " ' ain addition to Cochrane 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-aipreririddderertlawtehdolmesaatelerriafilsstriha^h-VlHjvv" VTmU.^1 CtntM t.l >Q tr-Wt':- -=amortized on a straight-line basis over their esti- ' mated useful lives which average five years; . center-s in the Los Angeles and San Francisco areK%-[; Atomic Taxes--Ths provision for income taxes was,' inn February 1988. A canned pump machiningand ^1' : as in the prior years, determined in accordance with - aset rvice companyjvas acquired as an addition toi^.-t'; V. Accounting Principles Board Opinion No. 11, If the ' CChempump in the Engineenxl Industrinl Rnridurts-' x| ttmipuny Itatl duntn to adopt Statement of Financial sstegment in July Accounting Standards No.96in 1989, the changex ' Each of these acquisitions was accounted by'thefel;. fH; ' would not have been material United States income . piurchase method, and the'results cfopwatiohs for r.) : ;.. taxes have not been provided on undistributed, : each has been^included in thefinahcial statanerits^'jj, :.... earnings of foreign subsidiaries sinoe these earnings . from thrir respective dates of purchase. Pin formal p - ; will be required for indefinite inveSment and any ffti:nancial information assuming the acquirition of.t/|, A.;-.. taxes on dividends expected to be paid will be off-; . RPalmer G. Lewis had taken place as of the ben- ` ^ f . set by forrign tax credits.^.. . \nni ing of 1987 is provided below. The remaining. 'acquisitions did not have a material effect.on the > [ .... Net Income l\r Share--ftimary earnings per sharenresults of operations. C^ 'S .[' : calculations are based upon the weighted average _ : numberofcommon shares outstanding aftergiving ' fF(IjokrtthhoeuyseaanrdsstwoietdptDpmrr>sh*abrcerd3atta, ) effect to dilutive stock options. Fully diluted earnings . - 1988 1987;-j \ per sharegives effect to the assumed conversion of '. JN*etsaU-s . ... $$11,.440099227799 $$1U3166,,118855;i [ .-v convertible debentures and the effect ofdilutive stock jOperating profit - 96,634 - 78^64>.. options. All share information has been adjusted to , In11coopmeeraftrioomnsc.,o- ntinuing-'V;-,':'; ?.- iitiir- reflect the 50ft stodt distribution in 1989, the three-; j,, , for-two stock split in 1987, the 50ft stock distribution % continuingoperations r 4vu.fa.I986and the2% stock dividriid in 1985.^:/v.~i 1 L45:"$.-' !<:'.J95*; " ....................... . ..'1, ^L5- wwMfewnuw ah* fitwrallyrreordt'd whwi %* title posses to the customer. Revenues on long-term^ ..f?'>At lXvembtT31,1%9 ttecompahyBetd 488300f' , omtracts are recognized under the pereentage^-i; 1 '..shi ares of thecommon stodc of Milton Roy completion tnethod ofaooountihgand aremeasured?.. ppany. TheCompaq's investmentofappimdmatdy|| '}/prinripaDycmritheracnst-tCKXistoraunitcfdelivery-1. $$8,000,000is carried at cost whidi approximates^? v ' basts. Thesecontracts represent appmximalriySXi of imr arket, and represents approximatriy &4%flf the;S;: Cf sales in any oneyearA- outstanefingstares of RDltori ..nlA CRTX 0774 tnvestrnemDistrfbutedtoShareholders 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 ately prior to the distribution, Medusa paid a special _j________ Forets?) Plans) (US-Ptona) cash dividend to the company of$84.3 million. This ' transaction reduced the company's shareholders' equity by $131,000. As a segment distributed to shareholders, the anthmsunds> . . 198899., ,. 1988 Service cost-benefits , earned during theperiod $ 7,00441 S$4203 , 1987 S$44J-99Q02:2"- resultsof Medusas operations have not been included in continuingoperations. Net sales of . ' Mrtlust through the date of tht; distribution in 1988 were $i:w.7 million am! fur tin* full 1987 year, net Interest cost on prweeted benefit obligation Actual return on plan assets 1111,0586 (244,22992) . .552222,, (<6(,10.606.55)) . 4..4477Ji. ((112200)) sales wife $184.4 million: Net amortization and deferral________ 99020033 22.,005533 ~ (3565) Pensions The company and its subsidiaries have pension pirns :. ' 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 p^'ments using a formula based on . SFAS87_____________ -- . .1(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 \ >' , forcompany . sponsored pensionptans cunpnriy's policy is to fund at least the minimum *' $ 4,138 ' * $5,115 ' S4,996 " v amount reqtnnd by the appfiiaMe regulations.^ `'V - The following table sets forth by, funded status; I, , In 1987, the company ackipted Statement of .': -' the amounts recognized in the company's balance ;-: '.l Financial Accounting Standards No. 87, "EmpJoyersT sheets at December 31, forcompany sponsored -:' ' Accounting for lYnsions", for all U.S. pension plans. pension plans: ' l/wH/lMfsIWl/u'J-\.;V ' ' 1 Vi. Actuarial present value of U-m-fit (JiligaiHsi: ? . Vested :~v.: - -Iv.;';-.'.*--; |!| ~;N<>nvested''-fY'V'. Accumulatedbenefitobligation SS-X'-' Effect offuture pay increases ... '5 ' rriijected benefit obligation \-; (U.S. and Foreign Plans) . ' 1989Overfunded Underfunded. $108,931 : : 4275 113206 . 35,069 , 148275 $1,425: ' 155 . 1,708 ___ (US. Plans): -.1988 Overfunded Underfunded $35,873. ;.;$7.i68 3.323 C " ' 187 39,196 23.015 :' ; /V; ; . ; `J 5, ! .* *- * > , *- ; V' *-"-v ' ' "VS* \ Lx**, t '* - 'xxr'V0: - v i-v.j t-.c *v- ., -. Assets and hxik reserivs greater (less) than V-' pnijected benefit oWigatwn f> 188,687 :v- $40,412 i 1,580 $ (128) 61275 . ' 7.i6i; -: - `' $ (336) ; $ (194) ; . : Consistingofc^.1'-." ; Unrecognized net asset (liability) at dateof f ' f: \> ' adoption lessamortization^...,; .V,'- .S'. --XT'S 21,531 . $(446) / ' . $ : 959.' 3 `r Unrecognized net guns(loss^)/Cv ;'/-?*! ' ' Ji\s1WW-v : (420) <12K), r;:i Sri-- Adiustmentrequired to recognize miniraura'i; , rfr> rability%; i u-'-'m's :: CRTX 0775 (ntCMiSybabia ' Financial Review ' rron/mmrf/ . Theassumed <5scount rate,expected return on assets and rate ofcompensation levd increases for final pay plans used to determine the pension expenseand funded status information were 85%, 95% and 6.25%, respectively, for U.S. plans and 85% to 9%, 9% and 625% to 75%, respectively, for foreign plans. The company participates in several multiemployer penskm plans. which provide benefits Reservesand Otherliabilities AtDtcrmber31 ffn Omaambl Insurance Wageand other employee ' bmefits 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 DtremherSl, IKK) nil plnn nswls on* inverted in listed stuck* 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 unused at th:ii time. . ' include common stock of the company which Long-Term Financing , represents 3% of plan assets. , - The cost of providing health care and life insur ance benefitson a claims paid basis for certain retired employees was approximately $1500,000. $2,000,000and $1500.000 in 1989,1988 and 1987, . respectively. At tknmbrrSl (In ikmtsunds) Crane Co. Senior debt: ' Revolvingcredit facility due 1994 - . .. - Subordinated debt: 1989 - 1988 $ 18567- Miscellaneous--Net: ' :; : ' Fur Hurt Kmlnl > , Iknmberai . ' V >- ; * > v > 1 . . <1*ihm*tmb>.. 1989 i 1988: - 1016% Sinking fund debentures due 1994 vf:; rx. Sinking!fun.d..d.e..b.e..n.t.u.r.e..s..... 1987 : 7% Debentures due 1994;-- 44,781Js^i.;48j032i Gain on disposal of -. . : capital assets-net'. $2,949- Gain on sale of' .- marketable securities ' --:-/ suor/. 1,462..- $ 636; `. . 5% Convertible debentures ' due 1993 and 1991,:; " ... convertible at StfOand $126" '',lj090fcvf%-i226v Other, principally capital1 - lease obligations - - ; ; .>158#-*?'.- 3,721* Foreign exchange /' gain (loss) .''. (18)~ . .341- .-774' TotalCraneCoL:.,/' Minority.imwstv. .:. . , *- ' "!* ' * (402) Subsidiarivs; : 74570 > --. 84545*; - '- Ollier . . 463-, :: 32... . . 175 $3584 $2536 $1,183 O'i'K. Sinking fund (k4kimin due 1999 ... : 11550 Floating rate bank loans:/. / ' : '. 12500 Accrued Uabffittes ` ' , Canada due 1991-1996- 12560: i:.'16.760: United States due 1991 ;: i:v; 1500:; : 5500 .4/ lMtrmlirr3I tin thousand*) 1989.. .. 1988 Payroll and otheremployee-: " . ' : related expenses - $22,139 - $23,430 Insurance'.-'* `w y.vT,;.. 14587 12,000 . Industrial Revenue Bonds Other, principally capital *. lease obligations Total subsidiaries .- . . 13579/: 14501 ` ' ` " : 55431 1 /8,627; 44,732/ :/585881 Sales allowances and other related costs Pensions Interest -.-- , 'Taxes other than income ' Environmental/ V Professional fees Other:',-.--'.-'/.;-- ** .-.;* -T'. , . 11,491 . 10528 $119,102: $143,133 - 4,814 .2528 : 3,492 : 4565 3,030 2.492 ' 2,600/I, * ~ The company had available $87500,000of unused;; longterm credit agreements at year-end. At Deoember. ; 31,1989, the principal amounts of tong-tom debt: - - " 2596 - 2.401 repayments, net of amounts held in treasury,:C' .12522 11577 required for the next five years were $11,223500- $77571 $69,121 in 1990, $13,090,000 in 1991, $8585j000in 1992^: $17567500 in 1993 and $59,453500in.l994,Inl987\; ' " * ** '* , ` the companyconverted its 854% convertibledeben%tunes, increasingcommon sharehoWers'equity ^ C V'-//= ;'f:v,.; approximately $?3.? million.". ' - - * - ~K< ................ " 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 S20J368.000. $18,769,000, and $18,450,000 for 1989, amount of the company's 616% Sinking Fund 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. :: hi 1989 the company redeemed all of its outstand- . ing 10%% Subordinated Sintdng Fund Debentures due 1994 at the redemption price trflOOX. of the r ll thuMMndsf Buildings and improvements Machinery and equipment 1989 . 1988 $12318 $14361 8,445 8,671 , principal amount. The $223 millian principal amount 20363 22335 of the Debentures outstanding was refinanced Less accumulated depreciation 1^780 J3?TH through the coiii|Kiny's revolving credit ngrtv $ 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, $4,567,000 annually. . The company has established a self-insurance pro 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 lender s prime or certifi certain proposed notices of adjustment to federal cate of deposit rate, or on the London Interbank market rate. The 1988 credit agreement contains income tax and was involved in variousotherclaims and legal actions arising in the ordinary course of various covenants, the most restrictive erf these . business. In the opiniun cif management, the ultimate ' requires a minimum level of tangible net worth. At .-r j disposition of these matters will not have a material i lAvetnbcr31, 1989, tangible net worth exceeded thef adverseeffect on the company's financial condition.- ; required level by $89.089.000. .^ . "f;. .C/.V !`.: >.. ' :: At December 31; 1989, the aggregate amount of. ; subsidiary earnings available for dividends was V. '= IncomoTaxes;' . ;.,V- '''f'f'/f.'' A reconciliation of income before taxes to theprof 1 $151^90,000.- . vision for income taxes (federal, state and foreign) is as follows: ; ' - . . - - . Commitments and Contingencies Vi v; - The company leases certain of its warehouse andf. Uh thuuwfuk} , ' manufacturing facilities, vehicle; and equipment; Income before taxes:: under cnpitnl nnd nik'ruting leases with various' - > ; DnmcMit' - J vterms. Certain kssesyimtain renewal or purchase Foreign ' 1989- , 1988 , 1987 .:-, $68,169:;' StHaia f $38,220 ^ . 23,410 : 21,137 ~; . 20321= ,. options. Future minimum payments, by year, and . 91379 - 81,490: 58341: - !,; in the aggregate; under these leases with initial or ~ ; , Statutory federal: L remaining terms of one year or more consisted off.-'; tax ai 34% ' thefollowingat December31.1989:;;f ; 1 11 :--:----- Vt Minimum'. - r. im in 1988 and . 40% in 1987) ,, Increase (reduction)' 31,137 27,707 ' 23,416; ;;`f ff,' ' Capital Operating-Subkase: front:. S'-; tin lktmwmk) : V Least's Liases Income Net : Foreign and .. S -:1990v-; i; 1991-. '*7.1992 r Ki;I998 il-: 1991V $1310 $13391 7S 704 $14300: 1.629- -11.470 ... , 365- . 12,734 kical taxes ,' Goodwill V. V 1396: 8.979 141 711 6;tT3 58 - 513: ' 5318 V-.-V: 3 10.434 7.026 6,058. ' Xon-taxabk*, FSC income. Other . 4,050 . 3,756 : . 2306 . 388 V 363.' 346 (798) : 883 (568)-. (501) 1.016 . ; (330) ; : f vv .^Thereafter- ; 3.001 14.741 Total minimum-re.'- ' . 17,739' Provision fur incometaxes-- , $35,660 - $32304- S25J837 . .. -..v . lease payments;-. 8960; S60J505S- $1274 r $68.191 T Percentageof inoume - .V-'before taxes7 ` 383% .' 39.6%- /;-44.1%.-i:f.~ v v'.vri.:'. jM ' V.-. v. \ V .VC'i i: " L : 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 for'awards ofcommon stock to key officers ^ t state taxes of SI,482,000. $4,147,000and $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 1/ The provision for income taxes is composed of the following: fiveyearperiod or upon the achievement ofcertain ; i performance objectives. The company awarded f/x thuHsumb) - Drferred 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 year 31,905 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'umiiKHtfiitMif (Itfvmtl imitim* tax cxix'itso are as follows: th llwmambt 1989 1988 1987 norrnnlly amortized over the five year mitrklkm 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 Inventory - capitalization '1 Othwr $1,548 13)75 (498) 1,671 $1,690 (574) (862i 1.739 . $2249 1.474 d.iat) 570 to the favorable performance of the company's stock price resulting in the lapsingof the restrictions on: : -t the 1988award, the previously unvested portion of.jit this noncash expense was dtargsd to incomein I989t-j reducing earnings by S4.1 million or$i08 pershs^|j. ' 'v - - $3,796 $1393 $3,709 Preferred Shares Purchase RjgMs.Vv In fttftr 1Q9S ITin 4 a nnn imr ' **'- Research and Developmenta Product devekipmont and enipnvering costs aggro-/ of common stock. The preferred rightswere riui||0S.. gated approximately $14,400,000, $12.000,000, arid ;; exercisable when granted and may only bedtoie^rpit $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 $8200,000 were received in 1989,1988and 1987,' common stock by a person or affiliated persbrist^/ j respectively, for customer sponsored research and. Depending upon the circumstances,tftterightsfiy/v f development relating to projects within Engineered ; become exercisable, the holder may be entitled toy-? X\ Industrinl Products,. -> . purchase shares of the company's Series AJunior /? \ Participating Itofcrml Slock,or sliarcsofrornnkmci Stock Options and Stock Award Plata - / A summary of stock option transactions follows:. stock of the acquiring person. Preferred shares purchasable upon exercise of tto ri^ts unU riot be \ ; . 7" .? ,f v.;,'; ; Number redeemable. Each preferred share will be.entitted;i^.'{ of Shares- to preferential rights regardingdividend and liquilj/? OutstandingJanuary 1,1989 . 50X. stock distribution Options granted Chians expired ` Options exercised ' Outstanding December 31.1989 - .. 964276 dation payment, wring power, and, in the event of'^?l|- ' 480592 any trietgor,consolidation orother transaction j; : 221200 (31,018) which common shares areexchanged, preferentialS[?|. exchange rate The rights will remain in existence^ y j.. (236,197) untilJune27,1998, unless they are earlier tenms'f.;- i 1298253. nated, exercised or redeemed. The company has t; f' authorized five million shares of$.01 par.value?,?' At December31,1989,options for 823.134shares, preferred stock. s were exercisableand442,729 shares were available; Analysis by Segmentof Business?.?? . forgrant. Stores and per share prices (ranging from/ 1 An analysis of sales,operatingprofit.asstts.capitalyjy $656to$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 and 27. Segment description by produ& and/^?;^- fcI 1163292 storeswereexerrised. The plan is not a compensatory plan which would retjuirea charge: -' In ~:. CRTX 0778  ' - * * - .x uJ ' The accompanyingconsolidated financial stated ments ofCrane Ca and subsidiaries have been Management's prepared by manggemernmconformity with certified publicanoountants.whosereportappears '- - .?) K ; j on this page. .. v?V'-`-t<'}'{ TheAudit CcmnutteecftheBaandofDirector, ???-? ! Responsibilities generally accepted accounting principles and, in thejudgment of management, present fairiy 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. composed sddy of outade directors, meets peri- ? ; :\ odkally 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 rontmls nf the company art1 designed to provide reasonable assurance that the financial records are reliable for preparing consolidated financial statements and maintaining accountability for assets and that, in all material respects, assets . are safeguarded against loss from unauthorized,. use ordisposition. Qualified personnel throughout RS. Evans Chairman, Chief Executive Officer and Resident theorganization maintain and monitor these inter nal accountingcamnols on an ongoing basis. In addition, the company's internal audit department systematically reviews theadequacy and effective- - ness of the controls and reports thereon. > *?. J.R Cronin ? v ;V The consolidated financial statements have.' : Vice President--Finance and been audited by Deloitte & Touche, independent; Chief Financial Officer ' . r:-. DeIoitle& - Taucfio also tndudes assessing the accounting principles - used and fiignificnnfestimates made by manage* r-~ r; ment, as well as evaluating the overall financial - " ` . statement presentation. We believe that our ' -_ ; audits provide a reasonable basis freouropinm? " To the Shareholders of Crane Ca: " We have audited theaocompanyingconsolidated balance sheets erf Crane Ca and subsidiaries as of December31,1989and 1988 and the related consolidated statements of income, changes in , ; In our opinion, such consolidated financial state ments present fairiy, in ^material respects, the, ' financial poation of Crane Ca and subsidiaries at,. . December31,1989and 1988 and the results oftt' theiroperations and theircash flows foreadiofl;?^?^ common shareholders' equity and cash flows for. the three years in the period ended Deoember31,;:; eachofthethreeyears in theperiod ended December 1989 in conformity with generally accepted ;; , . ???! 31,1989. The financial statements are the respon accounting principles. - sibility of the company's management. Our As discussed in the note, "AooountingPolicies--; 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 toconfonn with Stated???! ___c*-------i___XT_____ an-'-'f' generally aooepted auditingstandards. Those ; standards require that we plan and perform the? atnBt toobtun reasonableassurance about whether; the financial statements are freeof material misv stntement.An audit indudea 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 . $1,4555 $1,313.1 1987 $1,099j6 recordedgains in sales, operating profit and oper- ' atingmargins in 1989comparedwith 1988. Crane Ltd. sold its sted foundry operation in 1989. This "! operation had been contributing marginally to ' ; and Analysis Operating Profit (gyrating Margin of Operations $ 105jO $ 95.7 $ 75.1 sales and profits. Valve Systems, a value-added . . 73% 7396 68% distributor of valves and actuators, capitalized on its expanded distribution network and recorded a and Financial Condition . 1989 Sales increased 11% to $15 billion followinga 19% increase in 1988. The salesgain in both years results fromgrowth through acquisition, principally , Palmer G. Lewis, as well as revenuegrowth from existing businesses, 43% ales gain from 1988 as well as substantial ' . ; improvement in operating profit and margins. /':->) ThepumpbusinessesofDemingandChanpuinp recorded loweroperatingprofits on slightly Ir'Jier ': revenues in 1989 followinga stnmg year in 1988. . 1989 Operating Profit rose to $105 million, an In March 1989, Chempump acquired the Pacific -', 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 $.4 million. - - -; 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,' offsi* by a dedine in margins within Wholesale and in August 1989, the parts and service business ! Distribution. In addition, 1989 earnings were of Bekn Water aid WasteTreatment was acquired .- negatively impacted by a $4.1 million non-cash : as an addition to this unit for$5 million. -C;;| charge for the eariy vestingof the company's 1988 .TheCanadian plumbingoperation continued;/ ;:: restricted stock award due to the favorable perfor- : to be impacted by the skrw housing construction;;, j mance ofCrane stock. . -7-y market. Shipments improved from the prioryearf^?! ; Income from continuingoperations, net of taxes, level but remained below the 1987levelwMl^rHCj amounted to $55.9 million in 1989 compared to . . operating profit and tnaiginsremained skwptripH $19^ million in 1988 and $32.7 million 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 l^vriraiyj shareholders' equity exceeded 20%. Income per -: ' corresponding increase in profits due to theeqian^T'i sharefrom continuing aerations increased 18% to ' . sion of the domestic commercial airaraft market!^ i $1.72 in 1989, from $1.46 in 1988 and $57 in 1987. where Hydro-Aire has a dominant proprietary^SjgCl At theend of the third quarter of 1988, Medusa positiem in its anti-skid brake system; This Mkiwsyi 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 $625 million reflecting Systems, Unidynamics/Phoenbc and Reastoflex/; Medusa's $135 million profit for the first nine" Defense suffered from the reduction ofmilitaty~y> months. The 1987 net income of $595 million spending in 1989, Shipments weredown in 1989"*;? ? included Medusa's operations for the full yearv . continuing the decline which began in 1987. EadrFV.; 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. .; : 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 (Inmmiilllionss)) ' - 1989. 1988 ^ 1987 - in backlog. v > i Sales. : Operating Profit Operating Maign $7723 $7233 ; ; $6495 - Ferguson operated at break even in 1989on a ;; ': F % 913 . $812 f $ 55.4 . small improvement in sales. Ferguson Domestic f'i' > 113% 112% : 85% operated at a loss which was offset by a profit inW' t itsEuropeanoperations.: > ~--y-. - In 1989,operating profit for the Engineered Kemhte's operating profits weredown In 1989V . J Industrial Products segment increased 13% on a due to weakness in its transportation marketand.v 7% sales gain folkjwinga47% increase in operating;, costs associated with new products. Sales improved^ profiton an 11% sales improvement in 1988. Oper-.. slightly as Kemliteincrea^ its overan maricet^y l ating margin improved to 119% of sales compared.r : . shareand expanded its bdldingproductstfistribo^ to 1L2% in 1988and 85% In 1987.: -r. \ >; tion network from65 to 110 locations. - Tbecompany^domestfevafrehi^ margins remained acceptebfe idthaughdQwn ffais7 at a toss in 1989as it had in the prioryear. Results;' !the prior twoyeara.es:.?>.? -' in 1989were negatively impacted bycosts associated - CorTeccontinued the momentum generated insig with discontinued products and dosedfacilities. ; ; 1988 to record safes and profitgains. A mid-year#? - whkft totalled$4.7 million;however, withthese strike prevented 1989frombeingan even more?^ costs behind it, this operationis expected toimproveV- ; outstandingyeaKK:%;^^i^?^vN;^^M; , in 1590. Sales were down 6% fdlowinga 12% >.->.; ^^Besistoffex^dMStraitwMwed itesecondifelgi improvement in 1988.Theforeignvalveoperations^/consecutiveyearcfsigmScantly.impnyedeannqgsr^ CRTX 0780 v . ance relocatingto its Marion, North CaraCna facility Miscellaneous income of$3.4 millioh included ' 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 39.0% 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 S 30.7 43% $610.4 $283 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 wene.10% and 7% above tion segment. The company invested $332 million 1988. respectively, due primarily to the inclusion . in 1989 to modernize and improve its plant and /' : of PaltnerG. Lewis, acquired inJune 1988, for a : equipment, compared with $17.9 million in 1988 : full year. Operating maigins in1989and 1988 are; \ and$162 million in 1987. / v.-AT-iyvr/.'i-v : "down from the 1987.level due to Palmer G. Lewis. : > The company's strong financial condition ls^. " Operating margins at Palmer G. Lewis have - 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 matins. / and 1987, respectively. Working capital amounted 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^i the tough competitiveconditions, Huttig's whole- cash provided from operating activities and a Nik* Iminches wtw iililt' to maintain operating :. : reduction in cash. In 1989. the outstanding 1014%. maigins. 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 laiger than its new housing business; The-...' - ; 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. .' CaroJina plant and start-up problems at the Fresno, of available financing underlong-term credit agree-; Californiaplant.;ratmer G. Lewis* operating profit >' ments provide suffident financial flexibility. - maigins improved as it began its integration... In 1989, the company made a 50% stock dis< -' .. intoHuttig;;.;::-'/;. v - ; V - ' - ri tributioh to shareholders, increased the quarterly J. Crane Supply Canada repwled a small sales " cash dividend 123% to 18% cents per share and rgain 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 - price drnipetitkm.on operating matins: The 1989-; equivalent of 13 million common shares at an ; results are compared to a strong year in 1988, when/;, average price of approximately $18.00 per share;: sales and profits rose 20% and 70% due to shipments' ; : afteradjusting for the 50% stock distribution/.- ; of industrial products^;. v.-V.. >?.: ^ ? /.-.In February 1990, thecompany agreed tO;|./' &' ; acquire Lear Romec Corporation, a wholly-owned S/ Net interest expense declined reduction in borrowinglevels ainnd19in8c9rdeuaseetdoianvvevst-;-//aspupbrsoidxiiamraytoeflyB$F4M0mAeilrloiosnpa. LceeCaroRrpoomraetciomna, nfourfa'-rfk&-;'i ment k*vcK' imrtiaTly nffsrt hyhigherinteiwt mtes^f .lures pumps forthe aerospace industry and in >? . Piiv; osi1nnl9cig8ob7hmootrlefryotfhbrwoeeimclnoogwmtsh;1peI9anp8nr71yod9'csu8e88eey,4dtno%setohtdfieenabcteseopnrneetvuscertieraesslxi$oapn8ne4idnn3sinMemtewairlralecisoshnt>s-v;V.-//'/'mtothhifele$li3cfoio0sh.ma6.rpTntahydnelelyiaoa'srhcerqeanudnvieodsdiltviniOoincncogtwmcorbeielelbdrbe3ietf1oaf,rig1ner9aeta8nex9cmee, hesdnaottdh;f.$rs-/o6a.-,ul4egsh; %// ': dividend from Medusa, partiallyoffset by fHr> g'<- S- costs related to the Palmer G. Lewis acqiw J.: ` lK- i i,*"' A ./; t, . ?, ---irl itM ' - j,j-1 '* 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 $1,093,410 233.788 151,844 74 16 10 1,479,048 100 (23,459) . Operating Profit: - ; ; . Industry Segments:. 'Jv. ; '' V Engineered Industrial Products ' $ 91,778 75 ' Wholesale Distribution - 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:y ' ; 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) --: S 95,666 v- . :55396K;33% 32A35>i37 87331^1081 ;-:/;(12201)r-- $i 75^30 $ 82256 75 ' 18,757. 17 8362 , 8 109,975..109 (14309)" $ 95,666 .$ 603543fv69;| ;-->-.1735t'#'20'^| y.v 9223triiB;f . ; 8733P100* v (12201)";; $ :75,130::7:-;; ': $ 395,080 : - 63 234,034 .' 37 629,114 ,100, 52,626 ';i'; S 386219 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 10391 $33,189 $26,420 3325 3*44 $33,189 .. ^yV.'-w r-v 1988 1987 *. ' v- 't i ;'v.' ' ; *'* : - Depredation 1989 1988 . 1987 $11,825 5,767 273 $17^865 $11,479 3,007 3379 $173(15 $12938 3312 -- $16350 $10,485 3,688 2,077 $10300 $16,730 4317 267 $21314 $15392 2,477 3345 521,314 $15913 3,614 217 $19,744 $14,051 2,163 3330 $10,744 $15331 2323 213 $18267 $13,006 1,727 3334 $18207 ; Five Year i Summary V ofSdected Finandai;! Datay Yeats EndedDecember3/ , (In thousands except sharedata)' Net Sales Depredation . Operating Profit Interest Expense' Income before Taxes- Inaxne Taxes . ;; Income--Continuing Operations 1989 1988 . 1987 1986 :: 1985 $1,455389 $1313.136 $1,099396 $1,043,718 $960,702 .. 21314 19,744 18367. 16391 18,132; 105,045 95366, . . 75,130 75,044 38394* 19,177. 18342 : i9,ioo . 26350 28,176 SryJ; 91579 81,490 . 58341 55305. C ' 20345:r.- (35,660) (32304V (25337)-: (26320): w <6360)W $ 55,919 $ 49.186 $ 32,704 $; 28,785' $ 14385 Income Per Common Share-- , Continuing Operations:. Primary Fully Muted O : $172 169 Dividends Declared Per Common Share: 'Cash": ..... $.7083 Slock AMOtS;; > ''...V. Long-Term Debt ' ` $ 654,057 " $ 119,102 ' $146; ' ' $.97 . -' ' .$34 V 1.45 34 ;; *87 $3167'; , $3833 . $5200 681,740; $ GM,707.. $612,780 143,133: $ 151,096 $ 225,931 p.W.,4 V,.47'M. $.4733 2%- $030,010 $270,501 Mmtrs mm-morriia rhlnrUtrix/mti of$25,4211; See Financial Review r ; CRTX 0783 F `.',i i" CRTX 0784 I I I. , Directors ./Corporate Officers . _ i . ' . ' v, , E. Thayer Bigelow,-i)r. 2}?'.' '.Robert's, Evans . ,* * ,. : IVcMdi'iu^HntiK' Box (Hfict'/ftiv.. .; Chainlet). Chief.F. \< vui ive Cumnmiiicniiotis')k.-[.vii:-'. Khcer'N: Pivsktem ". . .< Robert S. Evans' '-v' .. i B: Jack Barnes. Chairman. Chk-PExecunVe Officer Exivutive Vice PreMdeiti & President of the Company Dante Q. Fabiani1 Retired lYesideni xif the Compain r- * t Richard S. Forte IVr-idi-in .`Forte Ca'shnivre Loinpain. Inc.. Intporn-i Jeremiah R Cronin 2 Tice Presideiit-^-.Finance v I' Chief Financial Officer ` Jjhoitias C. Fish '. 1, Vide"President. Lorjiornic `Development and Manufacturer Dorsey R. Gardner President. Kelso Management .* Cn .'Inw-stnient Management Robert W. Lear K1 I liivclur of various cnr|xir.-ilion> Pauf R..Hundt .Vice President, Secretarv K General Counsel Robert JL Muller, Jr. Executive Vice President Anthony D. Pahtaleoni' Dwight C. Minton '-2 Chairman &'Chief Executive Officer, Church & Dwight Co.. Inc.. Household Prcducts Manufacturer . We President. Environment. Health & Safety Richard B. Phillips \ Vice President. Human , Resources Charles 1 Queenan, Jr.2 , I`.inner. Kirk|uii ru`k & ln'khart Attorneys at Law,1, Michael L Raithel Controller- * Arthur A. Seeligson, Jr. !nde|x-ndent Oil OjXrrator. In-.e-tments S Boris Yavitz Tlie I'aul Garrett Professor tif Public Policy and Business Ki sensibility & Oirector'of the Management Institute. Columbia I'niversity; . Grtiduate School of Business Executive Offices . </' t- (.'I , ... s'- T --.7,TlnKf Venue ',' IA ' 'New -WIG NA'-JUdl':. : : .:iVlt-!ili.iiu:(212`il.T7iii.Kt' ' FormlO-K ' . Copies of .Form 'Ib-K for; 1:989;,, .;is filed with the-Securities ;gi3. , Exchange Commission are-.lv'ail- alilc tt|xm wi'Uteii ri'C|Ut,'*i Irmii; the Scrclfir\Y Office at the " ' ..address alxive.V ;: Annual MeetingThe 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.,'9 West b"th Street. N'e.w 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 . ' IK) West Hroadwav ' . New York. NT 10007; Bond Trustees and Disbucsing Agents'; : Citibank, N.A-." -C - ' New York. NY lOOlo.A'. A, ' -. Bank of America NationaliTrusf and Savings Association Jxis Angeles. CA'lKKlAl yi. Auditors ' .'-.-V i,' ' Deloitte-i'i louche. ()ne Wor.ld, Trade. Center New York. NY'lot MS;.-; ] \/. mi* t nl itt, l\\n utilt O \hu.fni lift ` : wU r ui Hit C `u'h <. unint:tU . ^ Equal Employment* I- Opportunity Policy ' Crane i- an r<|'uai u|)|xinuiui\.' ' 11tijlbi\e-l It I- 11u |'llC\ wl'tlte C<`iiiiKiiiVi.il iicrutt. hti'i. piombtc and t r.iii'-ii r ni all job ckis-ific.'i.V tifiii- uiilv'ul rcgattl.iiu.'aci.- i-ligi, in. -i-x. age'"i' nationa! ungn: CRANE::.;"; ll , .. . 1. - Crane Co. _,7A7 Third Awm-uu- ; ^ Nv''\ V'l'k. NVu "S<i'K '11m11 / * < ^