- Email: [email protected]
Crane Co, USA
Pump Industry Analyst
August 2002
Idex Corp, USA
Crane Co, USA
COMPANY WATCH
Key Figures (US$ million) Second quarter ended 30.6
Key Figures (US$ million) Three months ended 30.6
2002
2001
Net Sales Of Which: Pump Products
190.4
192.6
110.0
110.4
Cost of Sales
116.3
121.9
Gross Profit
74.1
70.7
Operating Income Of Which: Pump Products
28.2
26.2
18.5
18.6
Net Income
15.6
13.0
Net Sales Of Which: Fluid Handling
2001
Net Sales Of Which: Pump Products
365.4
380.0
212.2
220.2
Cost of Sales
225.8
240.5
Gross Profit
139.6
139.5
Operating Income Of Which: Pump Products
50.7
43.1
34.9
36.7
Net Income
27.2
20.2
COMMENT Orders, sales and earnings for the three months ended 30 June 2002, improved from Idex’s first quarter levels but were lower than the second quarter last year. New orders for the latest three months, at US$188.7 million, were 2% stronger than the first quarter of this year, but 1% down on a year ago. Excluding the June 2001 Versa-Matic acquisition and foreign currency translations, orders were 5% down on the second quarter of 2001. During the first half of this year, Idex built US$7.4 million of order backlog.
8
Global sourcing remains a high priority for the group, with savings totaling US$4.7 million for the first half versus US$1.6 million a year ago. On average, Idex says it is realizing material cost reductions of 30% for globally sourced items. In addition, the business unit teams are continuing to improve this process and are shortening the order placement cycle. Overall Idex’s second half results will depend on the pace of new orders and the speed of the economic recovery. ■
2001 409.0
176.4
140.7
Operating Profit Of Which: Fluid Handling
43.3
55.2
13.7
13.6
Net Income
26.6
32.5
5.9
11.0
Capital Expenditures
Six months ended 30.6
Six months ended 2002
2002 391.6
Net Sales Of Which: Fluid Handling Operating Profit Of Which: Fluid Handling
2002
2001
763.2
788.3
339.5
257.1
80.1
92.5
25.9
21.5
Net Income
19.3
52.7
Capital Expenditures
12.4
17.0
COMMENT Crane Co’s Fluid Handling sales of US$176.4 million increased US35.6 million, or 25% in the current quarter. Valve sales reached US$120.7 million, a gain of US$33.7 million entirely due to the Xomox acquisition. Valve margins overall were 8.1% in the current quarter versus 11.3% a year ago. The margin decline resulted from a sharp decline in the higher margin nuclear and commercial valve services revenue, reflecting a smaller number of site outages in the current quarter impacting operating results by US$2 million. Valve margins continued to be negatively impacted by the weak chemical process industry which affected Xomox and Crane Process Flow Technologies.
Sales in the short-cycle pump business were down 4%, while operating profits increased 5% and margins improved to 9.9% in the current quarter compared with 9.1% in the second quarter of 2001. Order backlog at 30 June 2002 was US$136 million, an increase of US$29 million, or 27%, from 30 June 2001 reflecting the addition of Xomox. Crane management continues to expect operating results for the full year 2002 to significantly improve, with the second half performance stronger than the first half as a result of anticipated stronger valve service revenues and margin improvement reflecting cost containment initiatives. ■
August 2002
Idex Corp, USA
Crane Co, USA
COMPANY WATCH
Key Figures (US$ million) Second quarter ended 30.6
Key Figures (US$ million) Three months ended 30.6
2002
2001
Net Sales Of Which: Pump Products
190.4
192.6
110.0
110.4
Cost of Sales
116.3
121.9
Gross Profit
74.1
70.7
Operating Income Of Which: Pump Products
28.2
26.2
18.5
18.6
Net Income
15.6
13.0
Net Sales Of Which: Fluid Handling
2001
Net Sales Of Which: Pump Products
365.4
380.0
212.2
220.2
Cost of Sales
225.8
240.5
Gross Profit
139.6
139.5
Operating Income Of Which: Pump Products
50.7
43.1
34.9
36.7
Net Income
27.2
20.2
COMMENT Orders, sales and earnings for the three months ended 30 June 2002, improved from Idex’s first quarter levels but were lower than the second quarter last year. New orders for the latest three months, at US$188.7 million, were 2% stronger than the first quarter of this year, but 1% down on a year ago. Excluding the June 2001 Versa-Matic acquisition and foreign currency translations, orders were 5% down on the second quarter of 2001. During the first half of this year, Idex built US$7.4 million of order backlog.
8
Global sourcing remains a high priority for the group, with savings totaling US$4.7 million for the first half versus US$1.6 million a year ago. On average, Idex says it is realizing material cost reductions of 30% for globally sourced items. In addition, the business unit teams are continuing to improve this process and are shortening the order placement cycle. Overall Idex’s second half results will depend on the pace of new orders and the speed of the economic recovery. ■
2001 409.0
176.4
140.7
Operating Profit Of Which: Fluid Handling
43.3
55.2
13.7
13.6
Net Income
26.6
32.5
5.9
11.0
Capital Expenditures
Six months ended 30.6
Six months ended 2002
2002 391.6
Net Sales Of Which: Fluid Handling Operating Profit Of Which: Fluid Handling
2002
2001
763.2
788.3
339.5
257.1
80.1
92.5
25.9
21.5
Net Income
19.3
52.7
Capital Expenditures
12.4
17.0
COMMENT Crane Co’s Fluid Handling sales of US$176.4 million increased US35.6 million, or 25% in the current quarter. Valve sales reached US$120.7 million, a gain of US$33.7 million entirely due to the Xomox acquisition. Valve margins overall were 8.1% in the current quarter versus 11.3% a year ago. The margin decline resulted from a sharp decline in the higher margin nuclear and commercial valve services revenue, reflecting a smaller number of site outages in the current quarter impacting operating results by US$2 million. Valve margins continued to be negatively impacted by the weak chemical process industry which affected Xomox and Crane Process Flow Technologies.
Sales in the short-cycle pump business were down 4%, while operating profits increased 5% and margins improved to 9.9% in the current quarter compared with 9.1% in the second quarter of 2001. Order backlog at 30 June 2002 was US$136 million, an increase of US$29 million, or 27%, from 30 June 2001 reflecting the addition of Xomox. Crane management continues to expect operating results for the full year 2002 to significantly improve, with the second half performance stronger than the first half as a result of anticipated stronger valve service revenues and margin improvement reflecting cost containment initiatives. ■