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Crane Co. (NYSE:CR)

Q1 FY08 Earnings Call

April 22, 2008, 10:00 AM ET

Executives

Richard Koch - Director of IR

Eric C. Fast - President and CEO, and Acting CFO

Analysts

Deane Dray - Goldman Sachs

Shannon O'Callaghan - Lehman Brothers

Matt Summerville - KeyBanc

Scott Graham - Bear Stearns

Operator

Good day, everyone. And welcome to today’s Crane's Earnings Release Conference Call. Today’s call is being recorded. At his time I would like to turn the call over to Director of Investor Relations, Mr. Richard Koch. Please go ahead.

Richard Koch - Director of Investor Relations

Thank you, operator, and good morning everyone. Welcome to Crane's first quarter 2008 earnings release conference call. I'm Dick Koch, Director of Investor Relations. On our call this morning we have Eric Fast, our President and CEO. We will start off our call with a few prepared remarks after which we will respond to questions.

Just as a reminder, comments we make on this call may include some forward-looking statements. We would refer you to the cautionary language at the bottom of our earnings release and also in our annual report 10-K and subsequent filings pertaining to forward-looking statements.

Also during the call we will be using some non-GAAP numbers which are reconciled for the comparable GAAP numbers in a table at the end of our press release, which is available on our website at www.craneco.com in the Investor Relations section. Now let me turn this call over to Eric.

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

Thank you, Dick. Last night we reported first quarter net 2008 net income was $48.4 million or $0.79 per share compared with net income of $43.6 million or $0.71 per share in the first quarter of 2007, an increase of 11%. Let me now highlight several key items for the first quarter.

Fluid Handling had record first quarter sales and operating profits. Sales increased 10% in the quarter to a record $289 million, operating profit increased 44%. Operating margin reached 15.5%, exceeding our longer-term goal of 15% margin for this segment.

Merchandising Systems operating profit increased $4.5 million with strong improvements in both Vending and Payment Solutions. The stronger than anticipated performance in Fluid Handling and Merchandising Systems more than offset the higher engineering spending in Aerospace and soft markets for engineering material.

Turning now to specific segment comments. Aerospace Group sales of $101 million increased $11 million or 12% from $90 million in the prior year period. The first quarter 2007 sales exclude $10 million of sales from Aircraft Electrical Power, which was transferred from Aerospace to the Electronics Group, effective January 1, 2008.

OEM and aftermarket sales were higher than last year with OEM sales growing 8% and aftermarket sales growing 10% on a comparable basis. The OEM aftermarket mix was 62%/38%, essentially the same as last year's first quarter. Operating earnings in Aerospace declined by $4.9 million reflecting the $10 million increase in engineering expense due to the heavy investments in new programs and technology. Absent the heavy investment in new programs for future growth, operating margins were consistent with our long-term goal of 20%.

Gross profit, which excludes engineering spending increased $4.6 million over the prior-year's quarter. I point this out so that you understand that the balance of the business in Aerospace is performing well and in line with our long-term expectations.

Our engineering spending in the first quarter of 2008 was $24 million compared to fourth quarter of 2007 of $21 million and $14 million in the first quarter of 2007. This increase in engineering spend, all of which is expense, is largely because of the 787 program. Based on recent program reviews, which include the information about the delay of the 787, we now anticipate a higher level of 787 engineering expense through 2008 reflecting longer development time, continued software and hardware testing and modifications and design changes related to the interface of subsystems with other suppliers. We expect to partially offset that engineering’s spending with claim settlements on certain developmental spending, expense controls, and better than planned growth in OEM and the aftermarket sales. Claims arise when changes of scope occur. That is when the customer changes the design which impacts design costs or schedule and resources. The cost of the change of scope is identified in a claim that is submitted to the customer by the supplier.

We expect to receive certain claims settlements in both the second and third quarter which will help offset higher engineering spending. By their very nature, claims settlements are discrete items and can be hard to predict because they are the result of negotiation. Electronics Group sales of $57 million decreased $1 million or 2% due to the lower sales in Power Solutions. The Electronics Group operating profit was essentially even with the first quarter of 2007.

Engineered Materials, in the first quarter, Engineered Materials core sales decreased $13.7 million, reflecting lower volumes to the company's traditional recreational vehicle and transportation customers, partially offset by $8.7 million of sales related to the composite panel business we acquired from Owens Corning in August.

We saw a 22% decline in sales to our traditional recreational vehicle customers, in line with the continued softness in RV industry. We experienced a 34% decline in our sales to transportation related customers, consistent with reduced trailer build rate and a 4% decline to our building products customers.

Operating profit declined 27% as a result of lower core business sales and higher raw material costs, which are largely related to crude oil and natural gas prices and costs associated with the integration of the acquisition. We announced price increases to our customers to reflect these higher costs and we will benefit from that for the remainder of the year. The physical expansion of Noble Composites and the integration of Owens Corning Composite's acquisition are proceeding as planned. We currently are conducting trials and will be ramping up production of the second manufacturing line of Noble over the next several months. While direct labor headcount is constantly adjusted with volume, given soft market conditions, we have also reduced indirect headcount in the core business by 10%.

Merchandising Systems, we had a record first quarter for Merchandising Systems. Sales increased 17% with improvements in virtually all business lines lead by the successful introduction of the glass front BevMax III and we saw higher demand for coin and bill validation and our coin dispensing products. Operating profit increased $4.5 million or 47% reflecting very effective leverage of the higher sales and the absence of integration expenses for the Dixie-Narco and Automatic Products acquisitions incurred in the first quarter of 2007. Improved performance from the acquisitions we made in 2006 contributed significantly to the operating profit increase. We continue to see sales growth from our currency [ph] payment system for the vending channel and the new glass front BevMax III, both of which can enhance profitability for the root operator. Orders from the major bottlers to the BevMax III machine are expected to remain seasonally strong to the second quarter and then are expected to taper off in the second half as is normal in the industry.

Fluid Handling, which represents about 42% of Crane's total sales turned in a record first quarter with sales increasing 10%, operating profit growing 44% with a profit margin of 15.5%. The operating profit increase was broad-based across all major units in the segment reflecting continued global demand, improved productivity and good pricing discipline. We have continued to see broad based demand from the chemical and pharmaceutical industries and energy, which includes, power and oil and gas.

Crane supply, which Services Canada continues to see consistent demand. As expected in our Crane Pumps & Systems business we had sales decreases for our residential pumps and systems. We remain committed to the concept of profitable growth with the strong discipline on pricing. Raw material escalation issues continue to affect the entire industry and we continue to raise prices selectively.

As previously disclosed where we're closing our foundries in Ipswich, England and Brantford, Ontario and we will move that foundry work to China. Our foundry and restructuring efforts are on schedule. These are important steps to increase our low cost country sourcing and improve margins in 2009. As pleased as we are with the record first quarter with operating margins at 15.5%, we do not expect margins for the balance of the year to be quite as robust because of spending for continued growth initiatives such as cost associated with the closure of the two foundries in our China expansion, the increase in our nuclear valve capacity, new product development efforts and upgrading our information technology infrastructure. We have received orders from the military, which will benefit our Pumps & Systems business later in the year and will help to offset lower residential demand. I just returned from two weeks in the Middle East and Asia along with the leaders of our Fluid Handling business. Our findings from this visit reinforce the theme of our annual report [inaudible] more opportunity we see. We continue to invest resources, improved execution in each region as see continued gains from our reorganization focused on end markets and energy and chem pharma. All indications are that global demand will continue to be strong for some time and we remain guardedly optimistic as project business outside North America remains strong.

Capital spending was $9 million in the first quarter of 2008 compared to $7 million in the first quarter of 2007, reflecting increased new product development, the completion of the Noble Composites expansion, and our new Fluid Handling facility in China. We bought back 958,000 shares of stock for $40 million in the first quarter, which will mitigate dilution for the year. At the present time, we do not have plans for further repurchases in 2008. First quarter reported GAAP tax rate was 32.3% compared to 32.5% in the first quarter of 2007. As previously disclosed, we anticipate the 2008 annual tax rate will approximate 31% with some variability quarter-to-quarter. We are reaffirming our earnings guidance for the full year 2008 of $3.45 to $3.60. We continue to have a strong balance sheet and end the quarter with $295 million in cash as we continue to opportunistically look for acquisitions. Now back to you, Dick.

Richard Koch – Director of Investor Relations

Thank you, Eric. This marks the end of our prepared comments. Operator, we are now ready to take questions.

Question and Answer

Operator

Operator: Thank you. [Operator Instructions]. We'll go first to Deane Dray with Goldman Sachs.

Deane Dray – Goldman Sachs

Thank you, good morning.

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

Good morning.

Deane Dray – Goldman Sachs

I would like to drill down a bit on the fluid handling business and to get a better sense of where that upside came this quarter and Eric, you talked about global demand. So, first question is, how does that demand break out for the quarter between major geographies? So, a sense of North America, Europe, Asia?

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

The way I would answer, first off, we have a big European business. We have probably 15% of our sale that are in the Middle East and Asia, big European business, a big Canadian business. So, so, it's a preferred demand that has been pretty broad based. Dick can give you the specific break down later Deane.

Deane Dray – Goldman Sachs

Okay. And then how about on... how much of that was price? You talked about price discipline and recovery raw materials. How much did price contribute this quarter in fluid handling?

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

Here is the way... here is the way we look at this, we see... we are very pleased with the Fluid Handling performance in the first quarter on a year-over-year basis and it really represents a continuation of the positive trend that you saw last year. So, I would describe the performance there is tremendous throughput efficiencies versus a year-ago on $288 million, $289 million in sales. We do our analysis price... our price increases did cover material, so we got a modest benefit there. Our total salaries, wages and fringes as a percent of total sales were full 2 percentage points better on $288 million in sales than they were a year-ago, that's almost $5 million in savings. We clearly leverage the core volume that we got, and we benefited some from the FX translations. So, this was kind of consistent broad base across all the units and overall performance of the business versus just any one issue that I would point to.

Deane Dray – Goldman Sachs

So, [inaudible] My next question was when I look at that leverage that you got in Fluid Handling, 53% incremental margins would suggest that, you got to ask whether there is anything special going on, no one-time items that would have boosted that, because to get that kind of leverage is extraordinary versus anything you've done previously.

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

Deane, you're not... you didn't listen to me. It's not about the incremental $25 million in sales. It's about the throughput efficiencies that we got on $289 million in sales. Our labor cost as a percent of sales are down 2%, that's over... that's almost $5.5 million. We got price in relation to material overall. We've got some benefit from foreign exchange. We clearly do the good job of leveraging the core volume that we got excluding price. So, it's not about the $25 million in incremental sales, it's about... on a broad basis, the better performance across the Fluid Handling business. And that's the way we look at it and that's the way I think everyone should look at it.

Deane Dray – Goldman Sachs

Good. That's helpful. But your comments about the balance of the year, you're not quite as robust. What were the factors that will contain that margin?

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

Well again, we're not harvesting this business. We're investing in our fluid handling businesses with the foundry restructuring, a whole new 100% owned [inaudible] China. We're expanding our nuclear valve capability, we've got more new product development going on at Fluid Handling and we have had for some time. And this is all about investment... we are expanding our... I just spent two weeks with the senior team in Asia and the Middle East. We are clearly expanding our sales and marketing efforts across the Middle East, India and China. So, this is all about investment.

Deane Dray – Goldman Sachs

Terrific.

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

And we're going to continue to do that.

Deane Dray – Goldman Sachs

Okay. And then just quickly over in Aero is, this is the first time that you have got to laid out an expectations regarding claims settlement, and can you give any sort of specifics around what you think that second and third quarter offset might be? Any way you can quantify those... those claims and will that get contentious or is it pretty automatic on how you are going to get it?

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

First off I think claims for out of scope work in the Aerospace Group is for... are kind of a normal part of the business. They are heavily negotiated and there is a lot of debate around them, but I think it's a normal part of the business. I'm not going to give more clarity in terms of that guidance. There are a number of moving pieces and initiatives, including the changes in scope that are occurring. So I'm really not comfortable providing specific number either on the engineering spend or on the claims at this point. I would reiterate that my prepared remarks that impact of the higher expected engineering is expected to be partially offset by some of these claims and settlements as well as higher OEM and aftermarket sales.

Deane Dray – Goldman Sachs

Thank you.

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

Thank you.

Operator

And we will go next to Ron Epstein with Merrill Lynch.

Unidentified Analyst

Hi, guys. It's actually Stefanie Wing [ph]. How are you guys doing?

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

Hi, Stefanie.

Unidentified Analyst

Hi. I just had a question about... I know you mentioned that you're expecting kind of a higher level of sustained R&D related to the 787. So should we expect kind of a similar run rate to what you guys reported in the first quarter through the rest of the quarters?

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

Stefanie, I'm just not going to give a guidance here. This is... as I said there is a lot of moving pieces and initiatives here in terms of how and where we schedule certain functions to go in a break control, claim recoveries. There is just a lot of moving pieces. We're comfortable that we have sufficient courses of action that we are taking to be able to meet our overall guidance. But I'm not going to give... I don't think... I don't think I can give you specifics on either the engineering spend or claims at this point.

Unidentified Analyst

Okay. So I guess we should expect, I know you said $73 million... I think you had said $73 million annually [ph]. So I guess we would expect something higher than that though?

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

Yes.

Unidentified Analyst

Okay. And then, kind of given what's going on with the North America--?

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

That’s an industry trend also.

Unidentified Analyst

Industry, okay. And then--?

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

On this plan.

Unidentified Analyst

Okay. And then given kind of what's going on with the North American Airlines, with some M&A and a lot of them cutting capacity. Are you expecting a similar sort of... I know you reported 10% growth in the aftermarket. What are you looking for... for kind of the rest of the year as we go forward?

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

We think... I haven't given a specific estimate on the aftermarket, but we continue to expect it to be strong, we've got some important initiatives in our repair and overhaul to shorten lead times to continue to build that business. We've got some aggressive stretch targets in our modernization and upgrade. And based on the current signs, we expect our aftermarket to continue to be actually a little bit stronger than we've planned.

Unidentified Analyst

Okay.

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

We went back and looked at some analysis the last time after 9/11 when they started to park planes and there is a quite considerable lag between the parked planes and our aftermarket. So, at least for 2008, we should be okay.

Unidentified Analyst

Okay. Okay. Thanks. And then how is your CFO search going actually?

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

We are in the very final stages.

Unidentified Analyst

Okay. Well, thank you very much.

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

Thank you.

Operator

We'll go next to Shannon O'Callaghan with Lehman Brothers.

Shannon O'Callaghan – Lehman Brothers

Good morning guys.

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

Good morning, Shannon.

Shannon O'Callaghan – Lehman Brothers

So, on Engineered Materials, you mentioned the cutting through price to get back some of the margin after a tougher first quarter, are you seeing any more difficulty doing that given how tough the RV in transportation end markets have been. Any read on how much of that you're think can stick, is it getting any tougher than it was a year ago?

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

Our prices... our price increases across all the markets have been implemented and accepted. And we expect them to... we look for the price increases to cover our rising material costs for the reminder of the year.

Shannon O'Callaghan – Lehman Brothers

Okay, so first quarter is kind of a little bit of an anomaly and we should get back to something more normal for that segment?

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

Our first quarter had almost no price increase in it. We are looking for prices to cover material costs, and those prices have been accepted for the reminder of the year.

Shannon O'Callaghan – Lehman Brothers

Okay. And then, fluid handling, we went through kind of the margin dynamics there. On the core sales growth, I mean, it's strong, it's seems to be actually 4% a little less than I thought, the leverage is better than I thought, the volumes are little lighter. But, any commentary in terms of the pieces there, what parts of that are up, sort of strong double-digits and what the drags are?

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

I’ve said pretty consistently that we're focused on disciplined profitable growth. And we are very disciplined on pricing. You can almost take on as much work as you want here if you are not disciplined, and when you are disciplined about our pricing, you're going to hold back that growth a little bit. I would also... and we certainly demonstrated that we could... that we are running the business in extremely profitable way. I would point out that you can knit this a little bit that there is one less shipping day this year than last year, because of our Easter sale that are small residential pump business was off but we can mitigate that with our military orders in that business. So, I am not… I don’t really see it as a key issue, I see, and I’ve said consistently, we don't take much... we don't need much volume to continue to drive this kind of performance in operating profit improvement in the business.

Shannon O'Callaghan – Lehman Brothers

Okay. And just last one, on use of the cash here, you said no plans for further share repurchases. So maybe that means, the acquisition pipeline is looking pretty good to you. What's the outlook there, and any particular target areas?

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

Yes we've been very consistent here that... when I just go back to the February conference recently that we would... generally our preference is to look for acquisitions and that we want this share repurchases assuming we think the stock is a good investment, we want to make sure we mitigate any at a minimum a dilution there. I wouldn't say that on the acquisitions we are spending a lot of time on it, I wouldn't say that it's a full backlog by any means. We are just starting to see pricing crack here a little bit, but it's not systemic across industries and we expect pricing to continue to come down here, given the kind of economic environment.

Shannon O'Callaghan – Lehman Brothers

Okay. Thanks a lot.

Operator

We'll go next to Matt Summerville with KeyBanc.

Matt Summerville – KeyBanc

Good morning. Two questions. First, can you just provide a little more commentary around the top and bottom line outlook for the electronics portion of Aerospace.

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

I would say stable for both. Our guidance at the beginning of the year was 2% revenue increase with some... a little bit of margin improvement and we're looking to work hard to attract that.

Matt Summerville – KeyBanc

Okay. On the Engineering Material side, you hit on raw material costs and selling prices but more on the market that you are serving, are you getting a sense that any of your three major markets are approaching the bottom yet?

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

The... I would say... RVs have been difficult here second quarter in a row. Can't really tell how much of the first quarter was somewhat of an inventory adjustment, but I don't really look forward to get any better. I would say that transportation which has been down sharply through '07 and in the first quarter, if you look at the industry statistics on build rates for [inaudible] year-over-year and February, it was actually up slightly, February versus February. So, we are looking for transportation to be more stable. Building materials, I think was down 4% in the first quarter. We see it in that range, may be a touch weaker as we go through the year.

Matt Summerville – KeyBanc

Okay. Great. My other [inaudible].

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

The key areas is that we’ve got a strong management team in place. We implemented our price increases as we... as largely as we plan those are in place. Our expansion in Noble is behind as we feel like we're fully engaged and prepared going into the second quarter and the rest of the year here in spite of a difficult volume environment.

Matt Summerville – KeyBanc

Hey, Eric, with respect to the price increase, I apologize if you already mentioned it, when did that take effect?

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

It really, is announced in the first quarter, really start to take effect in the second quarter.

Matt Summerville – KeyBanc

Okay, great. Thanks a lot.

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

Just a tiny little bit of it was in the first quarter.

Matt Summerville – KeyBanc

Thank you.

Operator

We'll go next to Scott Graham with Bear Stearns.

Scott Graham – Bear Stearns

Good morning, Eric, good morning Dick.

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

Good morning.

Scott Graham – Bear Stearns

Just a couple of questions. First on the fluid handling business. I know this question was asked earlier but when you're talking of 4% core sales versus what was double-digit for a couple of quarters last year, is there anything in here from a project timing standpoint that may have impacted the quarter as well?

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

No. This is about... one of the things I learned when I first came here in 2001 and Shove Evans [ph]… I used to talk about growing sales and Shove Evans told me this is not about growing sales, it's about growing profitable sales. And believe me, I learnt a lesson early from Shove and we are disciplined about it. And this is... and our margins and our improved profitability speak for themselves. We do not want to load up our plans with unprofitable business.

Scott Graham – Bear Stearns

Okay. You seem to be pretty excited about the vending machine results, obviously the margins have been there in the payment system stuff, it's been there for a while under Brads, very steady hand there. What are you seeing in the order book, if that's the right way to ask it? On the vending machine sales side that suggests that I think what you are suggesting is that this business may have finally turned the corner.

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

First off, Scott, let me thank you for asking [inaudible] talking, but now that I am getting good results. I can’t even get questions.

Scott Graham – Bear Stearns

Why ask anything good.

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

So I owe you a dollar I think. Look at the… the backlog is up a little bit, but it's a book and ship business, so it's hard to tell. But we’ve just... strategically the acquisitions have so strengthened our position in North American Vending. Strategically, we have got this, we believe that the BevMax III, the new glass front is the premier industry leader with features, benefits. And certainly in terms of quality, we think that... what we are hearing back from our customers is that their experience is solid, robust and they're coming back for reorder. So I like our strategic position in North America is clear, the leader and the acquisitions have put us there. We have this really high technology, high margin payment systems business that we are investing in the growth. We're bringing a recycler into the vending channel. I might add we have a handful of new products that we're bringing in vending. I feel solid about it, certainly based on the current order rate and how things look. We have a management team that's gone from a 100% focused on assimilating these acquisitions to a management team that's fully engaged in driving growth and being on offense [ph], it’s just fun to see.

Scott Graham – Bear Stearns

Eric, thank you . That's all I had.

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

Thanks, Scott.

Operator

[Operator Instructions]. We'll go next to Jim Kong with Kibelly [ph].

Unidentified Analyst

Just on the 787 engineering spend, do you expect that to begin to trend down in 2009?

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

Yes.

Unidentified Analyst

Okay. And then, could you just talk about the revenue expectations, you might get from the 787 as we go into '09, '10, and '11?

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

Again I have... we don't really... it's a matter of policy, Jim, disclose the chipset content on... on these planes. If you look at 2009, I think they are only the new schedule from Boeing is 25 planes in the third or fourth quarter. We started to see revenues, six months for that before that, but for 25 planes it's relatively insignificant. The key issue for us is the amount of the development spend that we're spending which is clearly over and above what we expected and really that is what we have to manage and drive and finish this project and get it behind us. And as you see that engineering spend come down which we expect a dramatic decline in '09, you'll see a strong increase in Aerospace earnings.

Unidentified Analyst

Okay, great. Thank you. That's all I have.

Eric C. Fast - President and Chief Executive Officer, and Acting Chief Financial Officer

Thank you.

Operator

Thank you. That concludes our question-and-answer session. I would like to turn the conference back to our speakers for any additional or closing remark.

Richard Koch – Director of Investor Relations

Thank you very much for joining us today and your continued interest in Crane. Bye-bye.

Operator

Thank you everyone. That does conclude today's conference. You may now disconnect.

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