STAMFORD, CT -- Crane Co.'s first quarter in 2013, ended March 31, climbed 11% as the diversified manufacturer's operating margin improved, while revenue slipped. First-quarter results included transaction costs of $2.9 million, or 5¢ a share, related to the $820 million pending acquisition of MEI Conlux Holdings Inc. Excluding these costs, earnings per diluted share were $1.04, compared with 86¢ in the first quarter of 2012.
First-quarter 2013 sales of $628 million decreased $18 million, or 2.8%, compared with $646 million in the first quarter of 2012, resulting from a core sales decline of $15.5 million, or 2.4%, and unfavorable foreign exchange of $2.5 million, or 0.4%.
The company's Williston, SC-based vending business, Crane Merchandising Systems, posted sales of $89.5 million, compared with $87.7 million in the first quarter of 2012. The 2% sales increase was attributed to a stronger performance in Payment Solutions, which offset declines in Vending Solutions. Operating profit and margins increased in both vending segments, reflecting productivity gains, higher sales of payment products and the absence of a $1.5 million legal settlement charge witnessed last year.
Crane, which also makes engineered industrial products like fluid-valve systems and planes' power modules, has posted mixed revenue performance in recent quarters. To preserve its bottom line during the downturn, Crane cut costs by reducing its workforce. The company remains cautious on the global economic front, but it reaffirmed its full-year guidance, pointing to its backlog position and improving order and quote activity during the quarter.
In December, Crane said it agreed to acquire payment systems maker MEI Conlux for roughly $820 million as part of an ongoing effort to strengthen its existing payment-products business. The deal is expected to close by the end of the second quarter.
"We are pleased to report record first quarter EPS of $1.04 per share, excluding the MEI transaction costs," said Crane Co. chief executive, Eric C. Fast. "Despite the decline in sales, the impact of our 2012 repositioning actions, continued focus on productivity and solid execution led to record earnings and continued strong operating margin expansion in the first quarter. We continue integration planning in connection with the acquisition of MEI, and look forward to a successful closing in the second quarter."
Separately, Crane Co. announced Fast's retirement in January 2014. | SEE STORY