Crane Holdings Co., a diversified manufacturer of highly engineered industrial products, reported fourth quarter and full year 2022 financial results.
Fourth-quarter 2022 highlights
- Continued progress toward previously announced separation; Remain on-track to complete separation in early April 2023.
- Fourth quarter GAAP earnings per diluted share (EPS) increased 53% to $1.87 per share compared to 2021; Fourth quarter adjusted EPS increased 63% to a record $2.13 per share compared to 2021.
- Fourth quarter GAAP operating profit margin was 15.7%, an increase of 440 basis points from last year; adjusted operating margin was a record 18.6% compared to 12.0% last year.
- Fourth quarter core sales increased 11% compared to last year, core orders increased 15%, and core backlog increased 28%.
- Crane issues guidance for 2023 for post-separation Crane Company and Crane NXT.
Max Mitchell, Crane Holdings Co. president and chief executive officer, stated in the announcement: “Another outstanding quarter of execution by our global team, along with continued progress toward our planned separation. Preparations for the separation are progressing smoothly, and we remain on-track for completion in April 2023. Both organizations continue to build out strong teams that will position both Crane Company and Crane NXT to deliver consistent, differentiated execution. Further, we continue to believe that the transaction will permit each post-separation company to optimize its investments and capital allocation policies to further accelerate growth and unlock shareholder value."
Mitchell continued, “Operationally, we had a very strong fourth quarter, with record quarterly adjusted EPS of $2.13 and a record adjusted operating margin of 18.6% driven, in part, by 11% core sales growth with strength across all three of our global strategic growth platforms. Leading indicators also remain strong, with core orders up 15% and core backlog up 28% compared to last year. However, despite strength of those metrics, based on broader macroeconomic trends and general uncertainty, we are planning for somewhat constrained and mixed activity in 2023 paired with gradual supply chain relief throughout the year. That said, we are confident that we are positioned to drive above-market growth in any potential environment, and we are prepared to respond quickly to capitalize on any demand above our current outlook."
Full-year 2022 results
Full year 2022 GAAP EPS of $7.18 compared to $7.36 in the prior year. Full year 2022 adjusted EPS of $7.88 increased 15% compared to $6.88 in the prior year.
Full year 2022 sales were $3,375 million, a decrease of $33 million, or 1%, compared to full year 2021. Core sales growth of $220 million, or 6%, was more than offset by the $139 million, or 4%, impact from the May divestiture of Crane Supply, and a $114 million, or 3%, impact from unfavorable foreign exchange.
Full year order growth of 5% was driven by 13% core order growth, partially offset by a 4% divestiture impact and a 4% impact from unfavorable foreign exchange. Full year backlog growth of 23% was driven by 28% core backlog growth, partially offset by a 4% impact from unfavorable foreign exchange and a 2% divestiture impact.
Full year GAAP operating profit margin declined to 10.9%, from 15.5% last year, driven primarily by a loss on the August divestiture of asbestos-related assets and liabilities and related items. Full year 2022 adjusted operating profit margin was 17.7%, compared to 15.5% last year, driven primarily by pricing actions and productivity that more than offset inflation and the impact of lower volumes.
Fourth-quarter 2022 results
Fourth quarter 2022 GAAP EPS of $1.87 compared to EPS of $1.22 in the fourth quarter of 2021. Fourth quarter 2022 adjusted EPS was $2.13, compared to $1.31 in the fourth quarter of 2021.
Fourth quarter 2022 sales were $824 million, a slight decline compared to $825 million in the fourth quarter of 2021. Core sales growth of $90 million, or 11%, was more than offset by a $58 million, or 7%, divestiture impact, and a $33 million, or 4%, impact from unfavorable foreign exchange.
Core year-over-year order growth of 15% in the fourth quarter was partially offset by a 7% divestiture impact and a 5% impact from unfavorable foreign exchange. Total year-over-year backlog growth of 23% was driven by 28% core backlog growth, partially offset by a 4% impact from unfavorable foreign exchange and a 2% divestiture impact.
Fourth quarter GAAP operating profit margin was 15.7%, compared to 11.3% last year, with the increase driven primarily by pricing actions, and to a lesser extent productivity and higher volumes. Fourth quarter 2022 adjusted operating profit margin was 18.6%, compared to 12.0% last year.
Fourth-quarter 2022 segment results
Sales of $181 million increased $23 million, or 15%, compared to the prior year. GAAP operating profit margin of 19.8% compared to 13.1% last year, driven primarily by pricing actions, higher volumes, and productivity. Adjusted operating profit margin of 20.6% compared to 13.1% last year.
Payment & Merchandising Technologies
Sales of $338 million increased $25 million, or 8%, compared to the fourth quarter of 2021, driven by a $44 million, or 14%, increase in core sales, partially offset by a $19 million, or 6%, impact from unfavorable foreign exchange.
Operating profit margin increased to 24.1%, from 19.1% last year, primarily reflecting pricing actions, higher volumes and productivity. Adjusted operating profit margin of 25.9% compared to 18.5% last year.
Payment & Merchandising Technologies' orders increased 4% in the quarter compared to the prior year, with 12% core order growth partially offset by an 8% impact from unfavorable foreign exchange. Order backlog increased 29% compared to the prior year, with 36% core backlog growth, partially offset by a 7% impact from unfavorable foreign exchange. Payment & Merchandising Technologies' order backlog was $566 million as of December 31, 2022, $500 million as of September 30, 2022, and $438 million as of December 31, 2021.
Newly appointed Crane NXT President and CEO Aaron Saak commented in the announcement: “I am incredibly excited about the opportunity to share our path for value creation with investors at our upcoming Investor Day event. Along with my new team, I am honored to be the steward of these incredible businesses as we leverage global secular growth trends while pursuing new vectors for accelerated growth."
