CR Financial Analysis

Analysis Date: 1/30/2025

Business Model

Crane Company generates revenue through two main segments: Aerospace & Electronics and Process Flow Technologies

Revenue Sources

• Aerospace & Electronics (44% of Q4 2024 revenue): OE Sales (63%) and Aftermarket Sales (37%)
• Process Flow Technologies (56% of Q4 2024 revenue)

Revenue Distribution by Channel

• OE Sales: 63% of Aerospace & Electronics revenue
• Aftermarket Sales: 37% of Aerospace & Electronics revenue

Income Statement Analysis

• Strong revenue growth of 12.3% driven by 8% core growth and 4% from acquisitions
• Operating profit increased 38.1% with margin expansion of 290 basis points to 15.8%
• Net income from continuing operations grew 61.2% reflecting strong operational execution

Balance Sheet Analysis

• Strong balance sheet with over $300M in cash and minimal leverage
• Total assets grew 11.4% while liabilities declined slightly
• Equity increased 20.6% reflecting strong earnings retention

Cash Flow Analysis

• Strong operating cash flow growth of 42.4% year-over-year
• Free cash flow increased 44.4% to $188.2M
• High cash flow conversion demonstrating quality of earnings

Capital Allocation

Company maintains strong balance sheet with $307M cash and $800M undrawn revolver. Management expects $1B+ immediate M&A capacity expanding to $4B through 2028. Declared 12% dividend increase to $0.92 annually.

Management Commentary

Exceptional year with both segments executing at high level delivering 8% core growth and 28% adjusted EPS growth

Strong momentum continuing into 2025 with high-single digit growth expected in Aerospace & Electronics

Successful portfolio reshaping through strategic acquisitions and Engineered Materials divestiture

Overall Sentiment: Highly confident in continued strong execution and growth opportunities

Recommendation

Rating: Buy

Reason for Rating: Strong operational execution, margin expansion trajectory, and significant M&A optionality support continued outperformance

Disclaimer: This analysis is based on company filings and public information. It is for informational purposes only and not financial advice. Past performance does not guarantee future results.

Generated on: 1/30/2025, 8:38:45 AM