Crane Co., Stamford, CT, a diversified manufacturer of highly engineered industrial products, reported a fourth quarter 2008 net loss of $8.3 million, compared with fourth quarter 2007 net income of $45.2 million. Fourth quarter sales decreased 12% to $589.3 million, including a core business decline of 7%.
Profit for the full year 2008 was $135.2 million, compared to a loss of $62.3 million recorded for 2007. Total sales in 2008 were $2.6 billion, essentially flat with 2007 levels. Full year 2008 core business sales decreased $51.7 million.
In October 2008, Crane announced it would take steps to reduce costs that could result in a fourth quarter pretax charge of up to $25 million. In light of further deterioration in the U.S. and global economy and its impact on Crane's end markets during the fourth quarter, the company expanded the scope and size of the restructuring program, resulting in a charge of $40.7 million pretax. The restructuring actions reflect a broad-based program to align the Crane's cost base to market conditions, and include several facility consolidations, severance and other related costs.
Crane, like many of our peer companies, saw significant deterioration in demand across several segments of our businesses in the fourth quarter as a result of the worldwide recession, said Crane Co. president and chief executive officer Eric C. Fast. Core revenue for 2009 is expected to decline about 7%, with lower demand anticipated across each of the five business segments.
Segment Results Reflecting further weakening demand from recreational vehicle, transportation and, to a lesser extent, building products end markets, Engineered Materials segment sales were down 45% to $41.5 million. The operating loss of $0.8 million in the fourth quarter reflected significantly lower sales. As a result of declining demand during 2008, employment has been reduced by 34% compared to year-end 2007 levels and other cost reduction initiatives are being implemented as part of the Restructuring Program.
Fourth quarter 2008 sales in the Fluid Handling segment decreased 7% to $278.7 million, including unfavorable foreign currency translation of $32.3 million (11%) and a decline of $0.7 million of core sales.
In December 2008, the Company purchased the Krombach group, Kreuztal, Germany, a manufacturer of specialty valve flow solutions for the power, oil and gas, and chemical markets. The purchase price was $51 million in cash and the assumption of approximately $18 million of net debt. In addition to a manufacturing and headquarters location in Germany, Krombach has foundry, machining and assembly facilities in Slovenia and China. Krombach's full-year 2008 sales were approximately $100 million.
In the Aerospace and Electronics segment, fourth quarter sales were $154.6 million, a decline of 4% in a year-over-year comparison.
The Controls segment reported sales of $36.3 million, a decrease of 2% from the fourth quarter of 2007.
Total Merchandising Systems sales declined 15% to $78.2 million, reflecting a sharp decline in Vending sales during the quarter and, to a lesser extent, a sales decline in the Payment Solutions businesses.