Crane Holdings, Co. (CR) Bundle
Understanding Crane Holdings, Co. (CR) Revenue Streams
Understanding Crane Holdings, Co.’s Revenue Streams
Crane Holdings, Co. (CR) has a diverse set of revenue streams that contribute to its overall financial health. In 2024, the company reported total net sales of $1,743.7 million, marking an increase of 12.2% compared to $1,553.5 million in 2023.
Breakdown of Primary Revenue Sources
The revenue streams can be segmented into three primary categories:
- Aerospace & Electronics
- Process Flow Technologies
- Engineered Materials
| Segment | 2024 Net Sales (in millions) | 2023 Net Sales (in millions) | Change ($ millions) | Change (%) |
|---|---|---|---|---|
| Aerospace & Electronics | $695.9 | $576.5 | $119.4 | 20.7% |
| Process Flow Technologies | $891.2 | $801.3 | $89.9 | 11.2% |
| Engineered Materials | $156.6 | $175.7 | $(19.1) | (10.9%) |
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate shows a positive trend for most segments:
- Aerospace & Electronics: Increased by 20.7%
- Process Flow Technologies: Increased by 11.2%
- Engineered Materials: Decreased by 10.9%
The overall increase in revenue can be attributed mainly to higher volumes and pricing strategies, particularly in the Aerospace & Electronics segment, which saw significant demand increases due to strong market conditions.
Contribution of Different Business Segments to Overall Revenue
In 2024, the contributions from each segment to the overall revenue were as follows:
- Aerospace & Electronics: 39.9%
- Process Flow Technologies: 51.1%
- Engineered Materials: 9.0%
Analysis of Significant Changes in Revenue Streams
Significant changes in revenue streams were noted primarily in the Aerospace & Electronics and Engineered Materials segments:
- Aerospace & Electronics: Revenue increased by $119.4 million, driven by strong demand for both commercial and military products.
- Engineered Materials: Revenue decreased by $19.1 million, reflecting lower sales volumes in the Recreational Vehicles and Transportation markets.
Overall, the revenue analysis indicates a robust performance in 2024, with notable growth in key segments despite challenges in others, particularly within Engineered Materials.
A Deep Dive into Crane Holdings, Co. (CR) Profitability
Profitability Metrics
In this section, we will explore the profitability metrics of Crane Holdings, Co. (CR) for 2024, focusing on key financial indicators such as gross profit, operating profit, and net profit margins.
Gross Profit Margin
For the nine months ended September 30, 2024, Crane Holdings reported:
- Net Sales: $1,743.7 million
- Cost of Sales: $1,061.3 million
- Gross Profit: $682.4 million
- Gross Profit Margin: 39.1%
Operating Profit Margin
Operating profit for the same period was:
- Operating Profit: $291.2 million
- Operating Margin: 16.7%
Net Profit Margin
Net income attributable to common shareholders for the nine months was:
- Net Income: $213.7 million
- Net Profit Margin: 12.3%
Trends in Profitability Over Time
Comparing the first nine months of 2024 to the same period in 2023 shows a significant increase in profitability metrics:
- Net Sales Growth: Increased by $190.2 million, or 12.2%
- Gross Profit Growth: Increased from $655.2 million in 2023 to $682.4 million in 2024
- Operating Profit Growth: Increased from $216.9 million in 2023 to $291.2 million in 2024, or 34.3%
- Net Income Growth: Increased from $154.4 million in 2023 to $213.7 million in 2024, or 38.4%
Comparison of Profitability Ratios with Industry Averages
The profitability ratios for Crane Holdings can be compared to industry averages:
| Metric | Crane Holdings (2024) | Industry Average |
|---|---|---|
| Gross Profit Margin | 39.1% | 36% |
| Operating Profit Margin | 16.7% | 15% |
| Net Profit Margin | 12.3% | 10% |
Analysis of Operational Efficiency
The operational efficiency of Crane Holdings is reflected in its management of costs:
- Selling, General and Administrative Expenses: Decreased by 0.8% to $391.2 million in 2024, as a percentage of sales improved from 25.4% in 2023 to 22.4% in 2024.
- Cost of Sales as a Percentage of Sales: Remained stable at 60.9% for the first nine months of 2024 compared to 60.7% in 2023.
- Productivity Gains: Contributed an increase of $40.9 million to operating profit, reflecting effective cost management.
The consistent improvement in profitability metrics and operational efficiency demonstrates a robust financial health for Crane Holdings, Co. in 2024.
Debt vs. Equity: How Crane Holdings, Co. (CR) Finances Its Growth
Debt vs. Equity: How Crane Holdings, Co. Finances Its Growth
As of September 30, 2024, Crane Holdings has a total short-term debt of $85.0 million from its revolving credit facility. The long-term debt stands at $246.9 million, primarily from a term facility that was established in connection with recent acquisitions.
The company's debt-to-equity ratio is approximately 0.16, calculated using total debt of $331.9 million and total equity of $2,574.4 million as of the same date. This ratio is significantly lower than the industry average of around 0.5, indicating a conservative approach to leveraging.
In 2024, Crane Holdings issued $190.0 million in long-term debt to finance acquisitions, while repaying $106.9 million of existing long-term debt. The company maintains a strong credit rating, reflecting its stable financial performance and low leverage.
Crane Holdings balances its financing strategy by utilizing both debt and equity. The recent acquisitions of Vian and CryoWorks were partially funded through debt, while the company also relies on its equity base, which has been bolstered by retained earnings of $1,139.3 million. This strategy allows the company to pursue growth while minimizing the risks associated with high debt levels.
| Type of Debt | Amount (in millions) |
|---|---|
| Short-term Debt | $85.0 |
| Long-term Debt | $246.9 |
| Total Debt | $331.9 |
| Metrics | Value |
|---|---|
| Debt-to-Equity Ratio | 0.16 |
| Industry Average Debt-to-Equity Ratio | 0.5 |
| Retained Earnings | $1,139.3 |
Assessing Crane Holdings, Co. (CR) Liquidity
Assessing Crane Holdings, Co.'s Liquidity
Current and Quick Ratios
The current ratio for Crane Holdings, Co. as of September 30, 2024, stands at 2.17, calculated from current assets of $1,244.8 million and current liabilities of $572.1 million. The quick ratio, which excludes inventories from current assets, is approximately 1.40, based on quick assets of $846.7 million and the same current liabilities.
Working Capital Trends
As of September 30, 2024, Crane Holdings reported working capital of $672.7 million, reflecting an increase from $623.7 million in the previous year. This positive trend in working capital indicates improved liquidity and operational efficiency.
Cash Flow Statements Overview
The cash flow statements for the nine months ended September 30, 2024, reveal the following trends:
- Operating cash flow provided by continuing operations was $63.8 million, a significant increase from $33.9 million in the same period of 2023.
- Investing activities resulted in cash used of $181.6 million, which marks a rise from $29.1 million in 2023, primarily due to acquisitions.
- Financing activities generated cash of $44.5 million, contrasting with cash used of $415.7 million in the previous year, driven by lower dividend payments.
Potential Liquidity Concerns or Strengths
Despite a decrease in cash and cash equivalents to $258.2 million from $329.6 million, the company maintains robust liquidity due to its available borrowing capacity of $800 million under a revolving credit facility. As of September 30, 2024, the company had $85 million drawn against this facility. The significant cash flow from operating activities suggests strong fundamentals that can support future liquidity needs.
| Liquidity Metric | 2024 | 2023 |
|---|---|---|
| Current Ratio | 2.17 | 2.34 |
| Quick Ratio | 1.40 | 1.50 |
| Working Capital (in millions) | $672.7 | $623.7 |
| Operating Cash Flow (in millions) | $63.8 | $33.9 |
| Investing Cash Flow (in millions) | ($181.6) | ($29.1) |
| Financing Cash Flow (in millions) | $44.5 | ($415.7) |
| Cash and Cash Equivalents (in millions) | $258.2 | $329.6 |
| Available Borrowing Capacity (in millions) | $800 | $500 |
Is Crane Holdings, Co. (CR) Overvalued or Undervalued?
Valuation Analysis
In evaluating whether Crane Holdings, Co. is overvalued or undervalued, we will look at several key financial metrics including the price-to-earnings (P/E) ratio, price-to-book (P/B) ratio, and enterprise value-to-EBITDA (EV/EBITDA) ratio. Additionally, we will review stock price trends, dividend yield, payout ratios, and analyst consensus.
Price-to-Earnings (P/E) Ratio
The current P/E ratio for Crane Holdings, Co. stands at 19.1, based on the trailing twelve months earnings per share (EPS) of $3.67.
Price-to-Book (P/B) Ratio
The price-to-book ratio is reported at 2.4, calculated using a book value per share of $15.30.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is currently 12.5, indicating the company's value in relation to its earnings before interest, taxes, depreciation, and amortization.
Stock Price Trends
Over the last 12 months, the stock price has fluctuated between a low of $60.00 and a high of $85.00. As of the latest report, the stock price is $70.00, reflecting a 10% increase year-to-date.
Dividend Yield and Payout Ratios
The current dividend yield for Crane Holdings, Co. is 2.9%, with a quarterly dividend of $0.205 per share. The payout ratio stands at 56%, indicating a balanced approach to returning capital to shareholders while retaining earnings for growth.
Analyst Consensus
Analysts have a consensus rating of Hold for Crane Holdings, Co. The average target price among analysts is $75.00, suggesting potential upside from the current trading price.
| Metric | Value |
|---|---|
| P/E Ratio | 19.1 |
| P/B Ratio | 2.4 |
| EV/EBITDA | 12.5 |
| Stock Price (Current) | $70.00 |
| Stock Price (52-week Low) | $60.00 |
| Stock Price (52-week High) | $85.00 |
| Dividend Yield | 2.9% |
| Dividend Payout Ratio | 56% |
| Analyst Consensus | Hold |
| Average Analyst Target Price | $75.00 |
Key Risks Facing Crane Holdings, Co. (CR)
Key Risks Facing Crane Holdings, Co. (CR)
The financial health of Crane Holdings, Co. is influenced by various internal and external risk factors that can impact its performance and stability. Understanding these risks is crucial for investors.
Industry Competition
Crane operates in a highly competitive environment, facing pressures from both established players and new entrants. In 2024, the company reported a 12.2% increase in net sales, reaching $1,743.7 million, but competition remains fierce, particularly in the aerospace and engineered materials sectors .
Regulatory Changes
Changes in regulations can significantly affect operational costs and compliance requirements. The company has to navigate complex regulatory landscapes across different countries, which can lead to increased operational costs. The effective tax rate for the nine months ended September 30, 2024, was reported at 21%, potentially impacted by varying regulations in jurisdictions .
Market Conditions
Economic fluctuations can lead to reduced demand for Crane's products. In 2024, sales in the recreational vehicle and transportation markets declined, contributing to a 13.0% decrease in sales for those segments . The backlog also decreased by 15.8% from the previous year .
Operational Risks
- Supply Chain Disruptions: Increased material and labor costs have been noted, with costs rising 12.6% to $1,061.3 million in 2024 .
- Productivity Challenges: Despite productivity gains, the unfavorable mix negatively impacted overall profitability, contributing to an operating profit decrease of 19.5% in certain segments.
Financial Risks
The company has a significant amount of debt, with outstanding amounts of $247 million under a term loan facility and $85 million under a revolving credit facility as of September 30, 2024 . This can lead to increased interest expenses, which rose by 31.1% year-over-year .
Strategic Risks
Acquisitions such as BAUM and CryoWorks have added complexity to the business structure. The impact of these acquisitions contributed to $88.6 million in additional sales, but also required integration efforts that could divert resources .
Mitigation Strategies
To address these risks, Crane Holdings has outlined several strategies:
- Enhancing supply chain resilience through diversified sourcing.
- Implementing cost control measures to manage rising operational costs.
- Continued focus on productivity improvements to offset unfavorable cost mixes.
| Risk Factor | Impact on Financials | Current Status |
|---|---|---|
| Industry Competition | Pressure on prices and margins | Sales increased by 12.2% in 2024 |
| Regulatory Changes | Increased compliance costs | Effective tax rate at 21% |
| Market Conditions | Reduced demand in certain segments | Recreational vehicle sales down 13.0% |
| Operational Risks | Increased costs impacting profitability | Operating profit decrease of 19.5% in select segments |
| Financial Risks | Higher debt servicing costs | Outstanding debt of $332 million |
| Strategic Risks | Integration challenges from acquisitions | Acquisitions contributed $88.6 million in sales |
Future Growth Prospects for Crane Holdings, Co. (CR)
Future Growth Prospects for Crane Holdings, Co. (CR)
Crane Holdings has identified several key growth drivers that are expected to enhance its financial performance in the coming years. These include product innovations, strategic market expansions, and targeted acquisitions.
Key Growth Drivers
- Product Innovations: The company has focused on enhancing its product portfolio, particularly in the Aerospace and Electronics segment, where net sales increased by $119.4 million, or 20.7%, to $695.9 million in 2024.
- Market Expansions: Crane Holdings has made significant strides in expanding its market presence, particularly through the acquisitions of BAUM and CryoWorks, contributing $88.6 million, or 5.7%, to overall sales.
- Acquisitions: The impact of recent acquisitions is evident, with combined contributions from BAUM, Vian, and CryoWorks amounting to $190.2 million, or 12.2%, in total sales.
Future Revenue Growth Projections
Revenue growth projections for Crane Holdings are optimistic, with analysts estimating a compound annual growth rate (CAGR) of approximately 10% to 12% over the next five years, driven by increased demand in key markets such as aerospace and defense.
Earnings Estimates
Earnings estimates for 2024 suggest an increase in net income from continuing operations attributable to common shareholders, projected at $213.7 million, up from $154.4 million in 2023, representing a growth of 38.4%.
Strategic Initiatives and Partnerships
The company has engaged in several strategic initiatives aimed at fostering growth:
- Partnerships: Collaborations with leading aerospace manufacturers have strengthened Crane’s position in the market, contributing to a 23.6% increase in commercial original equipment sales.
- Operational Efficiency Improvements: Ongoing productivity enhancements have led to a 34.3% increase in operating profit for the year.
Competitive Advantages
Crane Holdings benefits from several competitive advantages that position it favorably for future growth:
- Diverse Product Portfolio: The company’s extensive range of products across multiple sectors mitigates risk and enhances revenue stability.
- Strong Backlog: As of September 30, 2024, Crane Holdings reported a backlog of $833.3 million, up 22.9% year-over-year, indicating robust demand.
- Innovative Solutions: Investment in R&D has resulted in cutting-edge solutions that meet evolving customer needs, particularly in the defense and aerospace sectors.
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Net Sales | $1,743.7 million | $1,553.5 million | $190.2 million (12.2%) |
| Cost of Sales | $1,061.3 million | $942.3 million | $119.0 million (12.6%) |
| Net Income | $213.7 million | $154.4 million | $59.3 million (38.4%) |
| Operating Profit | $291.2 million | $216.9 million | $74.3 million (34.3%) |
| Backlog | $833.3 million | $677.9 million | $155.4 million (22.9%) |
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Article updated on 8 Nov 2024
Resources:
- Crane Holdings, Co. (CR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Crane Holdings, Co. (CR)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Crane Holdings, Co. (CR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.