Crane pany(US:CR)2021-01-26 19:02Financial Data and Key Metrics Changes - The company reported full year adjusted EPS of $3.84, down from $6.02 in 2019, reflecting the impact of COVID-19 [6][14] - For Q4, EPS excluding special items was $1, compared to $1.58 in the same quarter last year, with a decline attributed to sporadic disruptions related to COVID-19 [6][14] - Free cash flow for the quarter was $275 million, exceeding guidance of $230 million to $260 million, driven by effective working capital management [33][34] Business Line Data and Key Metrics Changes - Fluid Handling sales declined 7% to $258 million, with a 14% decline in core sales, partially offset by acquisition benefits [23] - Payment & Merchandising Technologies sales decreased 9% to $285 million, driven by a 25% decline in core sales [27] - Aerospace & Electronics sales fell 29% to $143 million, with a 39% decline in aftermarket sales, but defense OE business remained strong with a 13% increase [30] Market Data and Key Metrics Changes - Orders in December 2020 were higher than any other month of the year, with core year-over-year growth of 11% [15] - The company expects an inflection to positive core growth in Fluid Handling by mid-2021, particularly in chemical and pharmaceutical markets [16][25] - The currency demand for cash remains high, with expectations of strong growth driven by U.S. government demand and international banknote market wins [29] Company Strategy and Development Direction - The company emphasized the importance of maintaining strategic growth investments while implementing cost reductions during the pandemic [10][11] - The focus for 2021 includes EPS growth of 30%, with expectations of recovery in major end markets [14][15] - The company plans to continue pursuing acquisitions in Aerospace & Electronics and Fluid Handling, with a disciplined approach to capital allocation [38][56] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery trajectory, indicating that the company has passed the inflection point of the pandemic [15][20] - The outlook for 2021 is tempered by ongoing COVID-19 challenges, but there is confidence in substantial improvement throughout the year [14][15] - Management highlighted the importance of safety protocols and support for employees during the pandemic [11][12] Other Important Information - The company maintained a strong balance sheet with over $1.1 billion in available liquidity at the end of 2020 [37] - The non-GAAP tax rate for the year was 20.5%, slightly down from 21.1% in 2019 [33] - The company plans to provide more detailed insights into its growth initiatives at upcoming Investor Day events [41] Q&A Session Summary Question: Guidance for 2021 and key drivers for potential upside - Management indicated that the guidance range reflects confidence in recovery assumptions, with potential upside depending on COVID vaccine distribution and broader economic recovery [43][44] Question: Expectations for various pieces of the Payment & Merchandising Technologies business - Management expects a stronger first half for currency and a recovery in CPI towards the second half of the year as markets improve [46] Question: Order trends and disruptions at the end of Q4 - Management confirmed that order strength has continued into the new year, with minor disruptions expected to be resolved in Q1 [49][50] Question: Capital allocation and M&A strategy - Management plans to focus on integration and execution in Payment & Merchandising while prioritizing Fluid Handling and Aerospace & Electronics for potential acquisitions [55][56] Question: Aerospace & Electronics aftermarket trends - Management expects aftermarket improvements to lag behind passenger air travel recovery, with significant improvements anticipated in the second half of the year [64]