Crane Co: Form 10-Q for the period ended Sep 30, 2026

This Quarterly Report on Form 10-Q contains information about Crane Company some of which includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical information or statements about our current condition. You can identify forward-looking statements by the use of terms such as “believes,” “contemplates,” “expects,” “may,” “could,” “should,” “would,” or “anticipates,” other similar phrases, or the negatives of these terms.

Reference herein to “Crane,” “the Company,” “we,” “us” and “our” refer to Crane Company and its subsidiaries unless the context specifically states or implies otherwise. References to changes in “core sales” or “core sales growth” in this report include the change in sales excluding the impact of foreign currency translation and acquisitions and divestitures from closing up to the first anniversary, of such acquisitions or divestitures. Amounts in the following discussion are presented in millions, except employee, share and per share data, or unless otherwise stated. Due to rounding, numbers presented throughout this report may not add up precisely to totals we provide, and percentages may not precisely reflect the absolute figures.

We have based the forward-looking statements relating to our operations on our current expectations, estimates and projections about us and the markets we serve. We caution you that these statements are not guarantees of future performance and involve risks and uncertainties. These statements should be considered in conjunction with the discussion in Part I, the information set forth under Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. We have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Accordingly, our actual outcomes and results may differ materially from what we have expressed or forecast in the forward-looking statements. Any differences could result from a variety of factors, including the following:

• The effect of changes in economic conditions in the markets in which we operate, including the impact of U.S. tariff policy and retaliatory tariffs on our business, financial market conditions, end markets for our products, fluctuations in raw material prices, inflationary pressures, supply chain disruptions and access to key raw materials, higher interest rates and the financial condition of our customers and suppliers;
• Economic, social and political instability, geopolitical uncertainties including the ongoing conflict in the Middle East, currency fluctuation and other risks of doing business outside of the United States;
• Our ability to successfully identify, value and integrate acquisitions and to realize synergies and opportunities for growth and innovation;
• The impact of commercial air traffic levels which are affected by a different array of factors including geopolitical instability, general economic conditions and global corporate travel spending, or terrorism;
• Competitive pressures, including the need for technology improvement, successful new product development and introduction, impact from pricing strategies and/or any inability to pass increased costs of raw materials, including tariffs, to customers;
• A reduction in congressional appropriations that affect defense spending;
• The ability of the U.S. government to terminate our government contracts;
• Information systems and technology networks failures and breaches in data security, personally identifiable and other information, non-compliance with our contractual or other legal obligations regarding such information;
• The impact of governmental regulations and failure to comply with those regulations;
• Our ongoing need to attract and retain highly qualified personnel and key management;
• Adverse effects of changes in tax, environmental and other laws and regulations in the United States and other countries in which we operate;
• The outcomes of legal proceedings, claims and contract disputes;
• Investment performance of our pension plan assets and fluctuations in interest rates, which may affect the amount and timing of future pension plan contributions; and
• Adverse effects as a result of further increases in environmental remediation activities, costs and related claims.

Recent Transactions and Events

Entry into a Definitive Agreement to Acquire Trillium Flow Technologies

On September 14, 2026, the Company entered into a definitive Purchase Agreement to acquire the U.S. pump business from First Reserve-Backed Trillium Flow Technologies. Trillium Flow Technologies is a leading provider of highly engineered pump technologies primarily serving the U.S. municipal water and wastewater markets. The purchase price of the transaction is approximately $240.0 million, subject to post-closing adjustments. The transaction is expected to close in the fourth quarter of 2026, contingent upon regulatory approvals and the satisfaction of customary closing conditions. The Company intends to finance the acquisition with a combination of cash on hand and our Revolving Facility.

Acquisition of Druck, Panametrics and Reuter-Stokes

On January 1, 2026, the Company completed the acquisition of Druck, Panametrics and Reuter-Stokes from Baker Hughes. Collectively, these businesses are leading providers of sensor-based technologies for aerospace, nuclear and process industries. The Druck brand has been integrated into the Aerospace & Advanced Technologies segment. The Panametrics and Reuter-Stokes brands have been integrated into the Process Flow Technologies segment.

Other Acquisition

On January 1, 2026, the Company completed the acquisition of a leading provider of inline process control optical measurement solutions for biopharma, pharmaceutical and other demanding markets. The acquired company has been integrated into our Process Flow Technologies segment.

Tariff Refunds

On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act ("IEEPA") were not authorized by the statute. The Company is the importer of record for certain raw materials and products that were previously subject to such tariffs under IEEPA. On March 4, 2026, the U.S. Court of International Trade issued an additional ruling that importers that paid tariffs under the IEEPA are due refunds and ordered U.S. Customs and Border Protection (“CBP”) to begin the refund process for all importers who were subject to IEEPA duties. On April 20, 2026, CBP launched Phase 1 of its process for submitting IEEPA refund claims.

As the nature, timing, and amount of any such refunds remain uncertain, the Company elected to account for such refunds under the gain contingency model. During the three and nine months ended September 30, 2026, the Company recognized $1.5 million and $20.2 million, respectively, of tariff refunds as a reduction to “Cost of sales” in the Condensed Consolidated Statements of Operations. No portion of the recognized refunds was allocated to inventory, as the underlying inventory to which the refunds related had been sold prior to the respective refund dates. In addition, the Company recognized $0.8 million of interest income related to tariff refunds received through September 30, 2026. The Company reduced net sales by $2.1 million related to tariff refunds.

Outlook

Our sales depend heavily on industries that are cyclical in nature or are subject to market conditions, which may cause customer demand for our products to be volatile and unpredictable. Demand in these industries is affected by fluctuations in domestic and international economic conditions, geopolitical instability including the ongoing conflict in the Middle East, as well as currency fluctuations, commodity costs, tariff impacts, and a variety of other factors.

For 2026, we expect total sales growth in the mid 20%s, driven by the Druck, Panametrics, Reuter-Stokes, and Optek acquisitions, as well as core sales growth at the higher end of our long-term 4-6% core growth expectation and a slight foreign exchange benefit. We expect an improvement in operating profit driven primarily by productivity benefits and operating leverage on higher core sales growth, lower transaction related expenses and contributions from the Druck, Panametrics, Reuter-Stokes, and Optek acquisitions.

Aerospace & Advanced Technologies

In 2026, we expect Aerospace & Advanced Technologies sales to increase in the mid 20%s range driven by core sales growth modestly above our 7-9% long-term core sales expectation, a mid-teen percentage contribution from the Druck acquisition and a slight benefit from favorable foreign exchange. We expect an improvement in our commercial OEM business driven by higher aircraft build rates, and increased demand for our military OEM and aftermarket business driven by continued global geopolitical uncertainty. We expect segment operating profit to increase compared to 2025 due to higher core sales growth and the contribution from the Druck acquisition. However, we expect operating margin to decline modestly compared to 2025 driven by the dilutive impact of the Druck acquisition.

Process Flow Technologies

In 2026, we expect Process Flow Technologies sales to increase in the mid 20%s driven by low single digit core sales growth, a low-20% contribution from the Panametrics, Reuter-Stokes, and Optek acquisitions, as well as a 1% benefit from foreign exchange. We expect core sales to be driven by demand in the water and waste-water, power, nuclear and cryogenic markets. We expect segment operating profit to increase compared to 2025 due primarily to the contribution from the Panametrics, Reuter-Stokes, and Optek acquisition and operating margin to expand slightly compared to 2025 driven primarily by productivity and net price offset by the dilutive impact of the Panametrics, Reuter-Stokes, and Optek acquisitions.

Results from Continuing Operations – Three Months Ended September 30, 2026 and 2025

The following information should be read in conjunction with our condensed consolidated financial statements and related notes. All comparisons below refer to the third quarter 2026 versus the third quarter 2025, unless otherwise specified.

(dollars in millions)

Sales increased by $165.4 million, or 28.1%, to $754.6 million in 2026. The period-over-period change in sales included:

• an increase in sales related to the Druck, Panametrics, Reuter-Stokes, and Optek acquisitions of $124.5 million, or 21.1%; and
• an increase in core sales of $45.4 million, or 7.7%.

Cost of sales increased by $102.1 million, or 30.2%, to $440.0 million in 2026. The period-over-period change in cost of sales primarily reflected:

• an increase in cost of sales of $80.1 million, or 23.7%, attributable to the Druck, Panametrics, Reuter-Stokes, and Optek acquisitions;
• the net impact of higher material, labor, and other manufacturing costs of $40.2 million, or 11.9%; partially offset by
• strong productivity gains of $13.9 million, or 4.1%.

Engineering, selling and administrative expenses increased by $41.1 million, or 30.9%, to $174.0 million in 2026, primarily driven by the acquisitions of Druck, Panametrics, Reuter-Stokes and Optek of $37.0 million, or 27.8%, inclusive of integration costs.

Operating profit increased by $22.2 million, or 18.8%, to $140.6 million in 2026, reflecting the changes discussed above.

Interest expense increased by $12.7 million, reflecting the impact of borrowings under the Term Facility and Revolving Facility entered into in December 2025 to finance acquisitions.

Our effective tax rate for the three months ended September 30, 2026 is lower than the prior year’s comparable period, primarily due to higher benefit related to share-based compensation.

Our effective tax rate for the three months ended September 30, 2026 is higher than the statutory U.S. federal tax rate of 21%, primarily due to earnings in jurisdictions with statutory tax rates higher than the U.S., expenses that are statutorily non-deductible for income tax purposes and the impact of U.S. state taxes, partially offset by excess share-based compensation benefits, tax credit utilization, and the statutory U.S. deduction related to our non-U.S. subsidiaries’ income.

Comprehensive Income

(in millions)

For the three months ended September 30, 2026, comprehensive income was $97.4 million compared to $85.9 million in the same period of 2025. The $11.5 million increase was primarily driven by $5.9 million year-over-year favorable impact of foreign currency translation, primarily related to the euro and British pound, and higher net income of $5.9 million, offset by $0.3 million of changes in pension and postretirement plan assets and benefit obligations.

Segment Results of Operations - Three Months Ended September 30, 2026 and 2025

Aerospace & Advanced Technologies

(dollars in millions)

Sales increased $73.9 million, or 27.4%, to $344.1 million in 2026, primarily driven from the impact of the Druck acquisition of $48.4 million, or 17.9%, and higher core sales of $25.7 million, or 9.5%.

• Sales of Commercial Original Equipment increased $38.3 million, or 38.5%, to $137.8 million in 2026, reflecting the impact of the Druck acquisition and strong demand from aircraft manufacturers.
• Sales of Military Original Equipment increased $2.8 million, or 3.6%, to $79.6 million in 2026, reflecting strong demand from defense and space customers and the impact of the Druck acquisition.
• Sales of Commercial Aftermarket Products decreased $3.4 million, or 5.1%, to $63.6 million in 2026, reflecting higher aircraft initial provisioning in the prior year.
• Sales of Military Aftermarket Products increased $5.1 million, or 19.0%, to $32.0 million in 2026, reflecting stronger demand for military products, partly in response to heightened geopolitical tensions globally.
• Other sales increased $31.1 million, reflecting the impact of the Druck acquisition.

Cost of sales increased by $41.8 million, or 25.7%, to $204.5 million in 2026. The period-over-period change in cost of sales primarily reflected:

• the impact of the Druck acquisition of $28.7 million, or 17.6%;
• the net impact of higher material, labor, and other manufacturing costs of $19.6 million, or 12.0%; partially offset by
• strong productivity gains of $5.9 million, or 3.6%.

Engineering, selling and administrative expenses increased by $14.4 million, or 36.2%, to $54.2 million in 2026, primarily driven by the acquisition of Druck of $15.9 million, or 39.9%, partially offset by cost savings and productivity of $2.5 million, or 6.3%.

Operating profit increased by $17.7 million, or 26.1%, to $85.4 million in 2026, reflecting the changes discussed above.

Process Flow Technologies

(dollars in millions)

Sales increased by $91.5 million, or 28.7%, to $410.5 million in 2026, primarily driven by the impact of Panametrics, Reuter-Stokes and Optek acquisitions of $76.1 million, or 23.9% and higher core sales of $19.7 million, or 6.2%, partially offset by unfavorable foreign currency translation of $2.2 million, or 0.7%.

• Sales of Process Valves and Related Products increased by $83.0 million, or 34.8%, to $321.2 million in 2026, primarily driven by the impact of the Panametrics, Reuter-Stokes and Optek acquisitions of $76.1 million, or 31.9%, and the higher core sales of $10.7 million, or 4.5%.
• Sales of Commercial Valves increased by $3.5 million, or 9.2%, to $41.7 million in 2026, reflecting higher core sales of $3.7 million, or 9.7%.
• Sales of Pumps and Systems increased by $5.0 million, or 11.7%, to $47.6 million in 2026, reflecting an increase in core sales.

Cost of sales increased by $60.3 million, or 34.4%, to $235.5 million in 2026. The period-over-period change in cost of sales primarily reflected:

• the impact of the Panametrics, Reuter-Stokes and Optek acquisitions of $51.4 million, or 29.3%; and
• the net impact of higher material, labor, and other manufacturing costs of $20.6 million, or 11.8%; partially offset by
• strong productivity gains of $8.1 million, or 4.6%.

Engineering, selling and administrative expenses increased by $21.1 million, or 28.9%, to $94.1 million, primarily driven by the acquisitions of Panametrics, Reuter-Stokes and Optek.

Operating profit increased by $10.1 million, or 14.3%, to $80.9 million in 2026, reflecting the changes discussed above.

Results from Continuing Operations – Nine Months Ended September 30, 2026 and 2025

The following information should be read in conjunction with our condensed consolidated financial statements and related notes. All comparisons below refer to the first nine months of 2026 versus the first nine months of 2025, unless otherwise specified.

(dollars in millions)

Sales increased by $451.7 million, or 26.2%, to $2,175.7 million in 2026. The period-over-period change in sales included:

• an increase in sales related to the Druck, Panametrics, Reuter-Stokes, and Optek acquisitions of $341.1 million, or 19.8%; and
• an increase in core sales of $96.9 million, or 5.6%.

Cost of sales increased by $279.5 million, or 28.2%, to $1,272.3 million in 2026. The period-over-period change in cost of sales primarily reflected

• an increase in cost of sales of $234.1 million, or 23.6%, attributable to the Druck, Panametrics, Reuter-Stokes, and Optek acquisitions; and
• the net impact of higher material, labor, and other manufacturing costs of $103.6 million, or 10.4%; partially offset by
• strong productivity gains of $41.6 million, or 4.2%; and
• favorable impact of tariff refunds of $20.2 million, or 2.0%.

Engineering, selling and administrative expenses increased by $109.6 million, or 26.8%, to $518.4 million in 2026, primarily driven by the acquisitions of Druck, Panametrics, Reuter-Stokes and Optek of $104.0 million, or 25.4%.

Operating profit increased by $62.6 million, or 19.4%, to $385.0 million in 2026, reflecting the changes discussed above.

Interest expense increased by $37.3 million, reflecting the impact of borrowings under the Term Facility and Revolving Facility entered into in December 2025 to finance acquisitions.

Our effective tax rate for the nine months ended September 30, 2026 is higher than the prior year’s comparable period, primarily due to an increase in non-U.S. taxes, partially offset by higher benefit related to share-based compensation.

Our effective tax rate for the nine months ended September 30, 2026 is higher than the statutory U.S. federal tax rate of 21%, primarily due to earnings in jurisdictions with statutory tax rates higher than the U.S., expenses that are statutorily non-deductible for income tax purposes and the impact of U.S. state taxes, partially offset by excess share-based compensation benefits, tax credit utilization, and the statutory U.S. deduction related to our non-U.S. subsidiaries’ income.

Comprehensive Income

(in millions)

For the nine months ended September 30, 2026, comprehensive income was $237.1 million compared to $344.8 million in the same period of 2025. The $107.7 million decrease was primarily driven by a $82.2 million unfavorable impact of foreign currency translation, primarily related to the euro and British pound, and by lower net income of $24.6 million.

Segment Results of Operations - Nine Months Ended September 30, 2026 and 2025

Aerospace & Advanced Technologies

(dollars in millions)

Sales increased $224.2 million, or 28.8%, to $1,001.5 million in 2026, primarily driven from the impact of the Druck acquisition of $137.2 million, or 17.7%, and higher core sales of $83.5 million, or 10.7%.

• Sales of Commercial Original Equipment increased $102.7 million, or 35.4%, to $392.8 million in 2026, reflecting the impact of the Druck acquisition and strong demand from aircraft manufacturers.
• Sales of Military Original Equipment increased $27.0 million, or 12.2%, to $248.3 million in 2026, primarily reflecting strong demand from defense and space customers and the impact of the Druck acquisition.
• Sales of Commercial Aftermarket Products decreased $5.4 million, or 2.9%, to $179.2 million in 2026, reflecting higher initial aircraft provisioning in the prior year.
• Sales of Military Aftermarket Products increased $13.8 million, or 17.0%, to $95.1 million in 2026, reflecting stronger demand for military products, partly in response to heightened geopolitical tensions globally.
• Other sales increased $86.1 million, reflecting the impact of the Druck acquisition.

Cost of sales increased by $144.4 million, or 31.2%, to $607.2 million in 2026. The period-over-period change in cost of sales primarily reflected:

• the impact of the Druck acquisition of $89.1 million, or 19.3%; and
• the net impact of higher material, labor, and other manufacturing costs of $79.2 million, or 17.1%; partially offset by
• strong productivity gains of $17.7 million, or 3.8%; and
• favorable impact of tariff refunds of $5.5 million, or 1.2%.

Engineering, selling and administrative expenses increased by $34.2 million, or 29.9%, to $148.5 million in 2026, primarily driven by the acquisition of Druck of $40.7 million, or 35.6%, partially offset by cost savings and productivity of $7.6 million, or 6.6%.

Operating profit increased by $45.6 million, or 22.8%, to $245.8 million in 2026, reflecting the changes discussed above.

Process Flow Technologies

(dollars in millions)

Sales increased by $227.5 million, or 24.0%, to $1,174.2 million in 2026, primarily driven by the impact of Panametrics, Reuter-Stokes and Optek acquisitions of $203.9 million, or 21.5% and higher core sales of $13.4 million, or 1.4%.

• Sales of Process Valves and Related Products increased by $211.1 million, or 29.6%, to $924.0 million in 2026, primarily driven by the impact of the Panametrics, Reuter-Stokes and Optek acquisitions of $203.9 million, or 28.6%, favorable foreign currency translation of $9.4 million, or 1.3%.
• Sales of Commercial Valves increased by $5.1 million, or 4.5%, to $117.8 million in 2026, primarily due to favorable foreign currency translation of $2.8 million, or 2.5%, as the British pound strengthened against the U.S. dollar and higher core sales of $2.3 million, or 2.0%.
• Sales of Pumps and Systems increased by $11.3 million, or 9.3%, to $132.4 million in 2026, reflecting an increase in core sales.

Cost of sales increased by $135.1 million, or 25.5%, to $665.1 million in 2026. The period-over-period change in cost of sales primarily reflected:

• the impact of the Panametrics, Reuter-Stokes and Optek acquisitions of $145.1 million, or 27.4%;
• the net impact of higher material, labor, and other manufacturing costs of $24.3 million, or 4.6%; and
• unfavorable foreign currency translation of $7.5 million, or 1.4%; partially offset by
• strong productivity gains of $23.9 million, or 4.5%; and
• impact of tariff refunds of $14.7 million, or 2.8%;

Engineering, selling and administrative expenses increased by $63.2 million, or 28.8%, to $282.4 million, primarily driven by the acquisitions of Panametrics, Reuter-Stokes and Optek.

Operating profit increased by $29.2 million, or 14.8%, to $226.7 million in 2026, reflecting the changes discussed above.

Liquidity and Capital Resources

(in millions)

Our operating philosophy is to deploy cash provided from operating activities, when appropriate, to provide value to stockholders by reinvesting in existing businesses, by making acquisitions that will strengthen and complement our portfolio, by divesting businesses that are no longer strategic or aligned with our portfolio and where such divestitures can generate capacity for strategic investments and initiatives that further optimize our portfolio, and by paying dividends and/or repurchasing shares. At any given time, and from time to time, we may be evaluating one or more of these opportunities, although we cannot assure you if or when we will consummate any such transactions.

Our current cash balance, together with cash we expect to generate from future operations and borrowing capacity available under our revolving credit facility, is expected to be sufficient to finance our short-term and long-term capital requirements.

In September 2025, we entered into a $900 million senior unsecured delayed draw term loan facility (the “Term Facility”), which matures on September 30, 2030, and a $900 million senior unsecured revolving facility (the “Revolving Facility”), which also matures on September 30, 2030. In December 2025, the Company borrowed $900 million under the Term Facility and an additional $250 million under the Revolving Facility. The borrowings under the Term Facility and Revolving Facility were used, along with cash on-hand, to fund the Company’s January 2026 acquisitions of Druck, Panametrics, Reuter-Stokes, and Optek.

On February 11, 2026, the Company borrowed $50 million under the Revolving Facility to fund working capital requirements and general corporate purposes. During the nine months ended September 30, 2026, the Company repaid $270 million under the Revolving Facility.

Operating Activities

Cash provided by operating activities from continuing operations was $221.2 million in the first nine months of 2026, compared to $189.0 million during the same period last year. The increase in cash provided by operating activities from continuing operations was primarily driven by the $41.5 million increase in net income from continuing operations adjusted for the exclusion of non-cash items, offset by a $9.3 million net unfavorable change in operating assets and liabilities.

Investing Activities

Cash flows relating to investing activities from continuing operations consist primarily of cash used for acquisitions of businesses and capital expenditures. Cash used for investing activities from continuing operations was $1,360.9 million in the first nine months of 2026, compared to $43.4 million in the comparable period of 2025. The increase in cash used for investing activities was primarily attributable to the aggregate cash paid of $1,323.6 million for the acquisitions of Druck, Panametrics, Reuter-Stokes and Optek, offset by a $6.3 million decrease in capital expenditures. Capital expenditures are made primarily for increasing capacity, replacing equipment, supporting new product development, and improving information systems.

Financing Activities

Financing cash flows consist primarily of dividend payments to stockholders, repayments of indebtedness, proceeds from our Credit Facilities and proceeds from the issuance of common stock in connection with employee stock plans.

Cash used for financing activities was $270.6 million during the first nine months of 2026, compared to $296.9 million in the comparable period of 2025. The decrease in cash used for financing activities was primarily driven by $50.0 million of borrowings under the Company’s Revolving Facility during the first quarter of 2026, partially offset by a $22.5 million increase in long-term debt repayments.

There have been no material changes in the information called for by this item since the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2025.

Disclosure Controls and Procedures. The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this quarterly report. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that are filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that the information is accumulated and communicated to the Company’s Chief Executive Officer and Chief Financial Officer to allow timely decisions regarding required disclosure. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that these controls are effective as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting. During the fiscal quarter ended September 30, 2026, there were no changes in the Company’s internal control over financial reporting, identified in connection with our evaluation thereof, that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

Information regarding risk factors appears in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.