Crane Co T.CR

Primary Symbol: CR Alternate Symbol(s): CXT

Crane Company is a manufacturer of engineered components for mission-critical applications focused on the aerospace, defense, space and process flow industry end markets. Its segments include Aerospace & Electronics, Process Flow Technologies, and Engineered Materials. 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 Process Flow Technologies segment is a provider of engineered fluid handling equipment for critical applications. The Engineered Materials segment manufactures fiberglass-reinforced plastic panels and coils, primarily for use in the manufacturing of recreational vehicles, truck bodies and trailers (Transportation). It also designs and manufacturers multi-stage lubrication pumps and lubrication system components technology for critical aerospace and defense applications.

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Crane Co > 2023 Reserves Release

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Comment by gonatgasgoon Feb 09, 2024 9:02am

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Post# 35871961

RE:RE:RE:2023 Reserves Release

Nugget Capital made a number of good calls, and they seem to be able to time the market fairly well.

However, on their comment on Crew (attached below)

"Unquestionably, the company is quickly building debt to ramp up condensate activity as natural gas prices tanked."

Well, net debt went from $125M at the end of Sept. to $117M at the end of Dec.

"we think it would be wise for investors to at least wait until Q4 2023 is released to take a position as it is our expectation many are unlikely to like what they see."

A back of the enveloppe calculation would give us

Q4 AFF = Sept. debt + capex - Dec. debt. = 125M + 54M - 117M = $62M or $0.40 / share

Pretty good quarter to me and the debt level has gone down.

upinmuskoka1 wrote:
As per my previous comment the upcoming news might not be good. Just got this from Nugget Capital Partners and their weekly substack

CREW ENERGY (TSX: CR)

While we think Crew Energy is a very good company and the remaining prize for smallcap Canadian M&A targets, we also think the company is in some trouble in the short-term. According to the latest presentation, Crew remains almost entirely unhedged on their natural gas producer in 2024 which is exposed to the brunt of Station 2 and AECO basis, amongst the worst in North America. Luckily for the company, they have been able to target liquids rich production by ‘pivoting’ away from natural gas to more profitable condensate.

It’s not a coincidence in our opinion that although the presentation was updated in January 2024, the net debt levels listed were from September. Unquestionably, the company is quickly building debt to ramp up condensate activity as natural gas prices tanked. The over-emphasis on Crew’s switch to condensate is no laughing matter, they are clearly laying the ground-work for bad news in our view on the natural gas side which is likely to hinder their broader corporate plans to ramp up production and build their long-awaited natural gas plant. With a significant cash flow negative situation and near-term debt build, we think it would be wise for investors to at least wait until Q4 2023 is released to take a position as it is our expectation many are unlikely to like what they see and the risk of a sell-off is relatively high.