What changed in this filing

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Item 1. Business

2022-02-28 compared with 2021-02-23 · 54 added, 50 removed, 112 unchanged (48% of the section changed)

We are a diversified manufacturer of highly engineered industrial products comprised of four segments:

Fluid Handling, Payment & Merchandising Technologies, Aerospace & Electronics and Engineered Materials.

We are a diversified manufacturer of highly engineered industrial products.

Our operations are comprised of four segments:

Aerospace & Electronics, Process Flow Technologies, Payment & Merchandising Technologies, and Engineered Materials.

Our primary end markets include process industries (chemical production, oil & gas, power, and general industrial), non-residential and municipal construction, payment automation solutions, banknote design and production, aerospace, defense and space, along with a wide range of general industrial and certain consumer related end markets.

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An embedded intellectual capital development process helps ensure that we attract, develop, promote and retain talent to drive continuity and repeatable results.

Recent Transactions

On May 16, 2021, we entered into an agreement to sell the Engineered Materials segment to Grupo Verzatec S.A.

for $ 360 million on a cash-free and debt-free basis.

The sale is subject to customary closing conditions and regulatory approvals.

We determined that the Engineered Materials segment met the criteria of being reported as a discontinued operation as of June 30, 2021.

As a result, the related assets, liabilities and operating results of Engineered Materials are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented.

Throughout this Annual Report on Form 10-K, unless otherwise indicated, amounts and activity are presented on a continuing operations basis.

See Part II, Item 8 under Note 3, “Discontinued Operations,” in the Notes to Consolidated Financial Statements for additional details.

Reportable Segments

For additional information on recent business developments and other information about us and our business, you should refer to the information set forth under the captions, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Part II, Item 7 of this report, as well as in Part II, Item 8 under Note 3, “Segment Information,” in the Notes to Consolidated Financial Statements for sales, operating profit and assets employed by each segment.

Fluid Handling

The Fluid Handling segment is a provider of highly engineered fluid handling equipment for mission critical applications that require high reliability.

For additional information on recent business developments and other information about us and our business, please refer to the information set forth under the captions, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Part II, Item 7 of this report, as well as in Part II, Item 8 under Note 4, “Segment Information,” in the Notes to Consolidated Financial Statements for sales, operating profit and assets employed by each segment.

Aerospace & Electronics

The Aerospace & Electronics segment supplies critical components and systems, including original equipment and aftermarket parts, primarily for the commercial aerospace, and the military aerospace, defense and space markets.

The commercial market and military market accounted for 52% and 48%, respectively, of total segment sales in 2021.

Sales to original equipment manufacturers ("OEM") and aftermarket customers were 74% and 26%, respectively, in 2021.

Crane Aerospace & Electronics has strong brands which have been supplying products to these end markets for several decades.

Brands include Hydro-Aire, ELDEC, Lear Romec, P.L.

Porter, Keltec, Interpoint, Signal Technology, Merrimac, and Industries.

Products include a wide range of custom designed, highly engineered products used in landing systems, sensing and utility systems, fluid management, seat actuation, power and microelectronic applications, and microwave systems.

Our products are sold directly to aircraft manufacturers, commercial Tier 1 integrators (companies which make products specifically for an aircraft manufacturer), defense and space prime contractors, airlines, government agencies including the U.S.

Department of Defense, foreign allied defense organizations, aircraft seat manufacturers, and aircraft maintenance, repair and overhaul organizations.

Facilities are located in the United States, Taiwan, and France.

Process Flow Technologies

In the second quarter of 2021, we changed the name of our 'Fluid Handling' segment to 'Process Flow Technologies'.

This new name better conveys the key strengths and core competencies of the segment;

providing proprietary and highly engineered process flow technology solutions to its customers.

The Process Flow Technologies segment is a provider of highly engineered fluid handling equipment for mission critical applications that require high reliability.

The segment is comprised of Process Valves and Related Products, Commercial Valves, and Pumps and Systems.

Process Valves and Related Products manufactures on/off isolation valves, instrumentation and controls, and related products for critical and demanding applications in the chemical, oil & gas, power and general industrial end markets globally.

Process Valves and Related Products manufactures on/off isolation valves, instrumentation and controls, and related products for critical and demanding applications primarily in the chemical and petrochemical, general industrial, energy- related and pharmaceutical end markets globally.

Products are sold under the trade names Crane, Saunders, Jenkins, Pacific, Xomox, Krombach, DEPA, ELRO, REVO, Flowseal, Centerline, Resistoflex, Duochek, Barksdale, Dynalco, Westlock, WTA, HOKE and DOPAK.

Manufacturing locations, along with sales and service centers, are located across the North America, Europe, the Middle East, Asia and Australia.

Manufacturing facilities, along with sales and service centers, are located across North America, Europe, the Middle East, Asia and Australia.

Commercial Valves is engaged primarily in the manufacturing of valves and related products for the non-residential construction, general industrial, and municipal markets, and the distribution of pipe, valves and fittings (PVF) for the non-residential construction market.

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Facilities are located in the United States and Canada.

On January 31, 2020, we completed the acquisition of CIRCOR International, Inc.’s Instrumentation & Sampling Business (“I&S”) for $172 million on a cash-free and debt-free basis, subject to a later adjustment.

I&S designs, engineers and manufactures a broad range of critical fluid control instrumentation and sampling solutions used in severe service environments.

Facilities are located in the United States and the Netherlands.

I&S has been integrated into our Process Valves and Related Products business.

Payment & Merchandising Technologies

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Facilities are located in the United States, the United Kingdom, Mexico, Japan, Switzerland, Germany and the Ukraine, with additional sales offices across the world.

In the third quarter of 2020, we completed an internal merger to consolidate the Crane Merchandising Systems (“CMS”) business into the vending vertical within the CPI business.

This internal merger will enable improved coordination and collaboration while delivering increasingly integrated connectivity solutions to our customers.

Crane Currency is a supplier of banknotes and highly engineered banknote security features.

A pioneer in advanced micro-optics technology, Crane Currency provides a wide range of engaging visual effects in features that increase the level of security and public trust in banknotes.

Crane Currency is a supplier of banknotes and highly engineered banknote security features as well as a provider of security features for product authentication.

A pioneer in advanced micro-optics technology, Crane Currency provides a wide range of engaging visual effects in features that increase the level of security and public trust in banknotes and for the product brand authentication market.

Crane Currency offers uniquely designed banknotes, substrate (paper) and printing capabilities for over 50 central banks around the world, with facilities located in the United States, Sweden and Malta.

Aerospace & Electronics

The commercial market and military market accounted for 49% and 51%, respectively, of total segment sales in 2020.

Sales to original equipment manufacturers ("OEM") and aftermarket customers were 75% and 25%, respectively, in 2020.

Crane Aerospace & Electronics has strong brands which have been supplying products to these end markets for several decades.

Brands include Hydro-Aire, ELDEC, Lear Romec, P.L.

Porter, Keltec, Interpoint, Signal Technology, Merrimac Industries, and Polyflon.

Department of Defense, foreign allied defense organizations, aircraft seat manufacturers, and aircraft maintenance, repair and overhaul organizations.

Facilities are located in the United States, Taiwan, and France.

Engineered Materials

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Manufacturing facilities are located in the United States.

In the second quarter of 2021, the Engineered Materials segment met the criteria to be reported as discontinued operations.

See “Recent Transactions” for additional details.

Other Matters Relating to Our Business as a Whole

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Accordingly, it is not possible to estimate the number of competitors, or precise market share;

believe that we are a principal competitor in most of our markets.

however, we believe that we are a principal competitor in most of our markets.

Our primary basis of competition is providing high quality products, with technological differentiation, at competitive prices, with superior customer service and timely delivery.

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We purchase raw materials from a large number of independent sources around the world.

Although market forces have at times caused increases in the costs of steel, copper and petroleum-based products, there have been no raw materials shortages that have had a material adverse impact on our business, and we believe that we will generally be able to obtain adequate supplies of major raw material requirements or reasonable substitutes at acceptable costs.

For a further discussion of risks related to raw materials;

please refer to Item 1A.

Although market forces have at times, including in 2021, caused increases in the costs of key raw materials, there have been no raw materials shortages that have had a material adverse impact on our business.

We believe that we will generally be able to obtain adequate supplies of major raw material requirements or reasonable substitutes at acceptable costs.

For a further discussion of risks related to raw materials, please refer to Item 1A.

“Risk Factors.”

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Government Contracts

We have agreements relating to the sale of products to government entities, primarily involving products in our Aerospace & Electronics and Payment & Merchandising Technologies segments and, to a lesser extent, our Fluid Handling segment.

As a result, we are subject to various statutes and regulations that apply to companies doing business with the government.

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Our failure to comply with these laws could result in suspension of these contracts, criminal or civil sanctions, administrative penalties and fines or suspension or debarment from government contracting or subcontracting for a period of time.

For a further discussion of risks related to compliance with government contracting requirements;

please refer to Item 1A.

For a further discussion of risks related to compliance with government contracting requirements, please refer to Item 1A.

“Risk Factors.”

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When it is reasonably probable we will pay remediation costs at a site, and those costs can be reasonably estimated, we accrue a liability for such future costs with a related charge against our earnings.

For further discussion of environmental related risks;

please refer to Item 1A.

“Risk Factors.” For further discussion of our environmental matters;

please refer to Part II, Item 8 under Note 12, “Commitments and Contingencies,” in the Notes to Consolidated Financial Statements.

further discussion of environmental related risks, please refer to Item 1A.

“Risk Factors.” For further discussion of our environmental matters, please refer to Part II, Item 8 under Note 13, “Commitments and Contingencies,” in the Notes to Consolidated Financial Statements.

Human Capital Resources

To remain a leading manufacturer of highly engineered industrial products, it is important that we continue to attract, develop, and retain exceptional talent across our global enterprise.

The Company has a diverse global workforce located in 34 countries, spanning six continents.

At December 31, 2021, we employed approximately 11,000 persons worldwide, of which substantially all were full time employees.

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To be an employer of choice and maintain the strength of our workforce, we consistently assess the current business environment and labor market to refine our compensation and benefits programs and other resources available to our associates.

We are committed to an inclusive and high-performance culture at all levels of the organization, based on trust and respect.

The Company has a diverse global workforce located in 32 countries, spanning six continents.

We are further committed to developing our associates personally and professionally by leveraging a structured and disciplined Intellectual Capital (IC) process.

We are committed to developing our associates personally and professionally by leveraging a structured and disciplined Intellectual Capital (“IC”) process.

This regular IC cadence includes constructive reviews and various talent and leadership development initiatives conducted by the executive management team and provided throughout an associate’s career.

We are also committed to an inclusive and high-performance culture at all levels of the organization, based on trust and respect.

The manufacture and production of our products requires the use of a variety of tools, equipment, materials, and supplies.

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We utilize strict compliance protocols, training programs, effective risk management practices, and sound science in our operations to minimize risk to our associates.

During 2020, in response to the COVID-19 pandemic, we implemented additional health and safety protocols and new procedures across all of our global offices, manufacturing and distribution facilities to ensure the safety and well-being of our associates.

These protocols included proper hygiene, social distancing, mask use and temperature screenings and other health and safety standards as required by federal, state and local government agencies, taking into consideration guidelines of the Centers for Disease Control and Prevention and other public health authorities.

Beginning in 2020, in response to the COVID-19 pandemic, we implemented flexible remote work options and health and safety protocols and procedures across all of our global offices, manufacturing and distribution facilities to ensure the safety and well-being of our associates.

For a discussion of risks related to employee relations, please refer to Item 1A.

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Executive Vice President and Chief Operating Officer from 2011 to 2013.

Alejandro Alcala Senior Vice President Senior Vice President Fluid Handling and operations in China, India and the Middle East & Africa since March 2020.

Alejandro Alcala Senior Vice President Senior Vice President Process Flow Technologies and operations in China, India and the Middle East & Africa since March 2020.

President, Crane ChemPharma & Energy from 2014 to March 2020.

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Assistant General Counsel from 2005 through 2013.

Kurt Gallo Senior Vice President Senior Vice President, Payment & Merchandising Technologies and Engineered Materials since April 2019.

Gallo Senior Vice President Senior Vice President, Payment & Merchandising Technologies and Engineered Materials since April 2019.

President, Crane Payment Solutions since 2012 and its successor, Crane Payment Innovation since 2014.

Lavish Vice President, People & Performance Vice President, People and Performance since February 2020.

Vice President, CBS, People & Performance from January 2016 through January 2020.

Vice President, Crane Business System from 2013 through January 2016.

President, Crane Pumps & Systems from 2008 to 2013.

Grisham Senior Vice President, Business Development and Strategy Senior Vice President, Business Development and Strategy since April 2021.

Vice President, Business Development & Strategy of Colfax Corporation from 2014 to April 2021.

Maue Senior Vice President and

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Vice President - Finance from 2013 through January 2019.

Salovaara Vice President of Business Development and Strategy Vice President of Business Development and Strategy since 2014.

Vice President, Business Development from 2011 to 2014.

Polmanteer Senior Vice President, Chief Human Resources Officer Senior Vice President, Chief Human Resources Officer since March 2021.

Chief Human Resources Officer of Aleris from 2016 through 2020.

Senior Vice President, Chief Human Resource Officer of Daymon Worldwide from 2011 through 2016.

Switter Vice President, Treasurer and Tax Vice President, Treasurer and Tax since September 2016.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business