CIR CIRCOR International Inc

CIRCOR International, Inc. (NYSE: CIR), a leading provider of valves and other highly engineered products for markets including oil & gas, power generation and aerospace, today announced financial results for the second quarter ended June 30, 2013.

Second Quarter 2013 Highlights

• Adjusted operating margin up 160 basis points to 10%, highest in four years
• Adjusted EPS of $0.81 increased 27%
• Organic revenue growth of 2%
• Secured large specialty high pressure ball valve order for emerging FPSO technology
• Completed previously announced restructuring – on track to deliver annualized savings of $7 million
• Announced first step of CIRCOR simplification process

Management Comments

“We delivered a strong quarter due to our continued focus on growth, margin expansion and cash generation,” said Scott Buckhout, CIRCOR’s President and Chief Executive Officer. “Revenue increased sequentially in all three segments, while our adjusted operating margin expanded to 10% -- our highest level in four years.

“Our strategy to drive growth in the most innovative parts of our markets is delivering results. During the second quarter, we won a large order for high pressure ball valves to be used for emerging floating production, storage and off-loading technology.

“We are also pleased to have completed our previously announced restructuring initiatives on time and under budget. Through these projects, we delivered more than $1 million of savings in the second quarter and are on pace to deliver the $7 million of annualized savings that we had projected.”

Added Buckhout, “Today we are announcing the first step of a new initiative to simplify CIRCOR, thereby reducing costs, growing margins and enhancing shareholder value. We are implementing three new restructuring actions designed to further reduce complexity and cost. This includes closing two facilities and downsizing another, reducing our overhead, eliminating legacy ERP systems, and increasing the utilization of our low cost manufacturing and design capabilities in India. We expect these actions will result in annualized savings of approximately $4 million.”

Second Quarter Results

Revenues for the second quarter of 2013 increased 2% to $223.6 million, from $219.9 million in the second quarter of 2012. Net income for the second quarter of 2013, including the impact of special charges of $2.0 million, was $12.7 million, or $0.72 per diluted share, compared with net income of $11.1 million, or $0.64 per diluted share, for the second quarter of 2012. Adjusted earnings per diluted share in the second quarter of 2013, excluding the impact of the special charges, was $0.81, a 27% increase compared with $0.64 in the prior year’s second-quarter.

The Company received orders totaling $200.1 million during the second quarter of 2013, a decrease of 12% compared with the second quarter of 2012, due primarily to lower Energy orders in the international project business. The Energy business experienced a particularly difficult comparison with last year when CIRCOR booked a $22 million order in the large project business. Backlog as of June 30, 2013 increased 3% to $433.5 million from June 30, 2012.

During the second quarter of 2013, the Company generated $9.5 million of free cash flow, up $4.4 million from the same period in 2012.

Third Quarter Guidance

For the third quarter of 2013, the Company expects revenues to be in the range of $212 to $218 million. In addition, CIRCOR expects to record special charges comprised of a gain of approximately $3.1 million related to a settlement on the Brazil arbitration and restructuring related-charges of between $1.5 and $1.7 million. Excluding these charges, adjusted earnings are expected to be in the range of $0.76 to $0.83 per diluted share in the third quarter of 2013.

Segment Results

Energy

Energy segment revenues decreased 2% to $110.8 million for the second quarter versus the same period in 2012.

For the second quarter of 2013, the Energy segment’s adjusted operating margin increased 270 basis points to 13.8% year over year.

Incoming orders for the second quarter of 2013 were $107.2 million, a decrease of 16% year over year, as a result of lower large international project bookings. While the level of large international project inquiries and quoting remains comparable to 2012, the time to finalize orders from the original quotes has been increasing. This is likely the result of projects being delayed. In addition, the comparison with the second quarter of 2012 was difficult due to a $22 million project received in that quarter. Ending backlog totaled $213.7 million, an increase of 8% year over year.

Flow Technologies

Flow Technologies segment revenues increased 6% to $74.6 million for the second quarter of 2013.

Flow Technologies adjusted operating margin for the second quarter of 2013 increased 200 basis points to 14.8%.

Incoming orders for the Flow Technologies segment were $66.0 million for the second quarter of 2013, a decrease of 6% year over year. Ending backlog totaled $67.9 million, a decrease of 9% compared with the same period last year.

Aerospace

Aerospace segment revenues increased 6% to $38.2 million for the second quarter.

Aerospace segment adjusted operating margin for the second quarter of 2013 decreased slightly to 8.6% from 8.8% in the second quarter of 2012. Segment margins were up 510 basis points sequentially as the benefits of the restructuring program started to impact the business.

Incoming orders for the second quarter of 2013 were $26.9 million, a decrease of 6% year over year. Ending backlog totaled $151.9 million, an increase of 1% year over year.

Conference Call Information

CIRCOR International will hold a conference call to review its financial results today, August 1, 2013, at 10:00 a.m. ET. Those who wish to listen to the conference call and view the accompanying presentation slides should visit “Webcasts & Presentations” in the “Investors” portion of the CIRCOR website. The call also can be accessed by dialing (877) 407-5790 or (201) 689-8328. The webcast will be archived for one year on the Company’s website.

Use of Non-GAAP Financial Measures

Adjusted net income, adjusted earnings per diluted share, adjusted operating margin, and free cash flow are non-GAAP financial measures and are intended to serve as a complement to results provided in accordance with accounting principles generally accepted in the United States. Free cash flow is defined as net cash from operating activities less capital expenditures. CIRCOR believes that such information provides an additional measurement and consistent historical comparison of the Company’s performance. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in this news release.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Reliance should not be placed on forward-looking statements because they involve unknown risks, uncertainties and other factors, which are, in some cases, beyond the control of CIRCOR. Any statements in this press release that are not statements of historical fact are forward-looking statements, including, but not limited to, those relating to CIRCOR’s future performance, including third-quarter revenue and earnings guidance and estimated total annualized pre-tax savings from restructuring actions. Actual events, performance or results could differ materially from the anticipated events, performance or results expressed or implied by such forward-looking statements. BEFORE MAKING ANY INVESTMENT DECISIONS REGARDING OUR COMPANY, WE STRONGLY ADVISE YOU TO READ THE SECTION ENTITLED "RISK FACTORS" IN OUR MOST RECENT ANNUAL REPORT ON FORM 10-K AND SUBSEQUENT REPORTS ON FORMS 10-Q, WHICH CAN BE ACCESSED UNDER THE "INVESTORS" LINK OF OUR WEBSITE AT WWW.CIRCOR.COM. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

About CIRCOR International, Inc.

CIRCOR International, Inc. designs, manufactures and markets valves and other highly engineered products for markets including energy, oil & gas, power generation and aerospace. With more than 7,500 customers in over 100 countries, CIRCOR has a diversified product portfolio with recognized, market-leading brands. CIRCOR’s culture, built on the CIRCOR Business System, is defined by the Company’s commitment to attracting, developing and retaining the best talent and pursuing continuous improvement in all aspects of its business and operations. The Company’s strategy includes growing organically by investing in new, differentiated products; adding value to component products; and increasing the development of mission-critical subsystems and solutions. CIRCOR also plans to leverage its strong balance sheet to acquire strategically complementary businesses. For more information, visit the Company’s investor relations web site at http://investors.circor.com.

 

CIRCOR INTERNATIONAL, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands, except per share data)

(UNAUDITED)

  Three Months Ended   Six Months Ended June 30, 2013   July 1, 2012 June 30, 2013   July 1, 2012 Net revenues $ 223,644 $ 219,862 $ 429,042 $ 434,142 Cost of revenues 153,538   156,046   299,086   311,714   GROSS PROFIT 70,106 63,816 129,956 122,428 Selling, general and administrative expenses 47,596 45,337 93,168 90,249 Special charges 2,254   —   3,632   —   OPERATING INCOME 20,256   18,479   33,156   32,179   Other (income) expense: Interest income (79 ) (78 ) (122 ) (161 ) Interest expense 917 1,095 1,747 2,259 Other, net 626   184   1,239   322   TOTAL OTHER EXPENSE 1,464   1,201   2,864   2,420   INCOME BEFORE INCOME TAXES 18,792 17,278 30,292 29,759 Provision for income taxes 6,124   6,142   9,715   10,038   NET INCOME $ 12,668   $ 11,136   $ 20,577   $ 19,721   Earnings per common share: Basic $ 0.72 $ 0.64 $ 1.17 $ 1.14 Diluted $ 0.72 $ 0.64 $ 1.17 $ 1.13 Weighted average number of common shares outstanding: Basic 17,565 17,422 17,539 17,369 Diluted 17,607 17,451 17,569 17,421     CIRCOR INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(UNAUDITED)

  Six Months Ended June 30, 2013   July 1, 2012 OPERATING ACTIVITIES   Net income $ 20,577 $ 19,721 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation 8,035 7,833 Amortization 1,509 1,887 Payment for Leslie bankruptcy settlement — (1,000 ) Compensation expense of share-based plans 2,156 2,317 Tax effect of share-based compensation (422 ) 499 (Gain) loss on property, plant and equipment (129 ) 133 Changes in operating assets and liabilities, net of effects from business acquisitions: Trade accounts receivable (9,406 ) (6,312 ) Inventories (4,059 ) (5,340 ) Prepaid expenses and other assets (2,412 ) (1,408 ) Accounts payable, accrued expenses and other liabilities 3,583   (9,559 ) Net cash provided by operating activities 19,432   8,771   INVESTING ACTIVITIES Additions to property, plant and equipment (8,808 ) (10,783 ) Proceeds from the sale of property, plant and equipment 314   31   Net cash used in investing activities (8,494 ) (10,752 ) FINANCING ACTIVITIES Proceeds from long-term debt 74,255 108,943 Payments of long-term debt (84,679 ) (117,944 ) Dividends paid (1,340 ) (1,331 ) Proceeds from the exercise of stock options 1,498 94 Tax effect of share-based compensation 422   (499 ) Net cash used in financing activities (9,844 ) (10,737 ) Effect of exchange rate changes on cash and cash equivalents (2,002 ) (723 ) DECREASE IN CASH AND CASH EQUIVALENTS (907 ) (13,441 ) Cash and cash equivalents at beginning of period 61,738   54,855   CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 60,831   $ 41,414      

CIRCOR INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(UNAUDITED)

 

June 30,2013

 

December 31,2012

ASSETS CURRENT ASSETS: Cash and cash equivalents $ 60,831 $ 61,738 Short-term investments 96 101 Trade accounts receivable, less allowance for doubtful accounts 158,286 150,825 Inventories 199,764 198,005 Prepaid expenses and other current assets 17,661 16,510 Deferred income tax asset 15,431 15,505 Current income tax receivable 2,171 — Assets held for sale 542   542   Total Current Assets 454,782   443,226   PROPERTY, PLANT AND EQUIPMENT, NET 104,477 105,903 OTHER ASSETS: Goodwill 75,491 77,428 Intangibles, net 42,436 45,157 Deferred income tax asset 25,283 30,064 Other assets 6,957   8,203   TOTAL ASSETS $ 709,426   $ 709,981   LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 84,245 $ 80,361 Accrued expenses and other current liabilities 59,240 67,235 Accrued compensation and benefits 25,596 26,540 Income taxes payable 3,996 393 Notes payable and current portion of long-term debt 7,206   7,755   Total Current Liabilities 180,283   182,284   LONG-TERM DEBT, NET OF CURRENT PORTION 52,345 62,729 DEFERRED INCOME TAXES 9,797 10,744 OTHER NON-CURRENT LIABILITIES 34,850 35,977 CONTINGENCIES AND COMMITMENTS SHAREHOLDERS’ EQUITY: Preferred stock, $0.01 par value; 1,000,000 shares authorized; no shares issued and outstanding — — Common stock, $0.01 par value; 29,000,000 shares authorized; 17,575,362 and 17,445,687 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively 176 174 Additional paid-in capital 265,940 262,744 Retained earnings 177,748 158,509 Accumulated other comprehensive loss, net of taxes (11,713 ) (3,180 ) Total Shareholders’ Equity 432,151   418,247   TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 709,426   $ 709,981      

CIRCOR INTERNATIONAL, INC.

SUMMARY OF ORDERS AND BACKLOG

(in millions)

(UNAUDITED)

  Three Months Ended   Six Months Ended

June 30,2013

 

July 1,2012

June 30,2013

 

July 1,2012

ORDERS (1) Energy $ 107.2 $ 128.2 $ 217.4 $ 263.9 Aerospace 26.9 28.5 69.1 68.7 Flow Technologies 66.0   70.5   140.4   143.4 Total orders $ 200.1   $ 227.2   $ 426.9   $ 476.0   BACKLOG (2)

June 30,2013

July 1,2012

Energy $ 213.7 $ 197.4 Aerospace 151.9 150.6 Flow Technologies 67.9   74.3   Total backlog $ 433.5   $ 422.3    

Note 1: Orders do not include the foreign exchange impact due to the re-measurement of customer order backlog amounts denominated in foreign currencies.

Note 2: Backlog includes all unshipped customer orders.

 

CIRCOR INTERNATIONAL, INC.

SUMMARY REPORT BY SEGMENT

(in thousands, except earnings per share)

(UNAUDITED)

  2012   2013 1ST QTR   2ND QTR   3RD QTR   4TH QTR   TOTAL 1ST QTR   2ND QTR   TOTAL NET REVENUES Energy $ 109,264 $ 113,527 $ 109,968 $ 96,582 $ 429,341 $ 96,722 $ 110,832 $ 207,554 Aerospace 38,085 35,896 31,795 35,316 141,092 37,326 38,177 75,503 Flow Technologies 66,931   70,439   68,041   69,707   275,119   71,350   74,635   145,985   Total 214,280   219,862   209,804   201,605   845,552   205,398   223,644   429,042   * ADJUSTED OPERATING MARGIN Energy 8.2 % 11.1 % 14.0 % 12.5 % 11.4 % 11.1 % 13.8 % 12.5 % Aerospace 10.8 % 8.8 % 4.2 % 3.5 % 7.0 % 3.5 % 8.6 % 6.1 % Flow Technologies 11.3 % 12.8 % 13.1 % 13.1 % 12.6 % 12.7 % 14.8 % 13.8 % Segment operating margin 9.6 % 11.3 % 12.2 % 11.1 % 11.1 % 10.3 % 13.2 % 11.8 % Corporate expenses (3.2 )% (2.9 )% (3.4 )% (3.4 )% (3.2 )% (3.2 )% (3.3 )% (3.2 )% * Adjusted operating margin 6.4 % 8.4 % 8.8 % 7.8 % 7.8 % 7.1 % 10.0 % 8.6 % Restructuring inventory charges 0.0 % 0.0 % 2.0 % 0.0 % 0.5 % 0.1 % (0.1 )% 0.0 % Impairment charges 0.0 % 0.0 % 4.9 % 0.0 % 1.2 % 0.0 % 0.0 %

0.0

% Special charges 0.0 % 0.0 % 0.7 % 1.9 % 0.6 % 0.7 % 1.0 % 0.8 % Total operating margin 6.4 % 8.4 % 1.3 % 5.8 % 5.5 % 6.3 % 9.1 % 7.7 % 2012 2013 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR TOTAL * ADJUSTED OPERATING INCOME Energy 8,928 12,580 15,432 12,100 49,040 10,751 15,271 26,022 Aerospace 4,124 3,153 1,324 1,234 9,835 1,320 3,271 4,591 Flow Technologies 7,587   9,043   8,919   9,105   34,654   9,044   11,065   20,109   Segment operating income 20,639 24,776 25,675 22,439 93,529 21,115 29,607 50,722 Corporate expenses (6,939 ) (6,297 ) (7,170 ) (6,802 ) (27,207 ) (6,588 ) (7,339 ) (13,926 ) * Adjusted operating income 13,700 18,479 18,505 15,637 66,322 14,528 22,268 36,796 Restructuring inventory charges — — 4,124 37 4,161 250 (242 ) 8 Impairment charges — — 10,348 — 10,348 — — Special charges —   —   1,377   3,905   5,282   1,378   2,254   3,632   Total operating income 13,700   18,479   2,656   11,695   46,531   12,900   20,256   33,156   INTEREST EXPENSE, NET (1,081 ) (1,017 ) (1,122 ) (1,038 ) (4,258 ) (787 ) (838 ) (1,625 ) OTHER EXPENSE, NET (138 ) (184 ) (564 ) 373   (514 ) (612 ) (626 ) (1,239 ) PRETAX INCOME 12,481 17,278 970 11,030 41,759 11,501 18,792 30,293 (PROVISION) BENEFIT FOR INCOME TAXES (3,896 ) (6,142 ) 899   (1,822 ) (10,960 ) (3,592 ) (6,124 ) (9,715 ) EFFECTIVE TAX RATE 31.2 % 35.5 % (92.8 )% 16.5 % 26.2 % 31.2 % 32.6 % 32.1 % NET INCOME $ 8,585   $ 11,136   $ 1,869   $ 9,208   $ 30,799   $ 7,908   $ 12,668   $ 20,577   Weighted Average Common Shares Outstanding (Diluted) 17,390 17,451 17,467 17,499 17,452 17,529 17,607 17,569 EARNINGS PER COMMON SHARE (Diluted) $ 0.49   $ 0.64   $ 0.11   $ 0.53   $ 1.76   $ 0.45   $ 0.72   $ 1.17   ADJUSTED EBITDA $ 18,534   $ 23,043   $ 22,809   $ 16,808   $ 81,194   $ 18,682   $ 26,419   $ 45,101   ADJUSTED EBITDA AS A % OF SALES 8.6 % 10.5 % 10.9 % 8.3 % 9.6 % 9.1 % 11.8 % 10.5 % CAPITAL EXPENDITURES $ 4,122   $ 6,661   $ 3,314   $ 4,073   $ 18,170   $ 4,707   $ 4,100   $ 8,807     * Adjusted Operating Income & Margin exclude inventory restructuring, impairment and special charges.    

CIRCOR INTERNATIONAL, INC.

RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS

(in thousands, except earnings per share)

(UNAUDITED)

  2012   2013 1ST QTR   2ND QTR   3RD QTR   4TH QTR   TOTAL 1ST QTR   2ND QTR   TOTAL FREE CASH FLOW [NET CASH FLOW FROM OPERATING ACTIVITIES LESS CAPITAL EXPENDITURES] $(7,089) $5,077 $18,746 $25,619 $42,353 $1,100 $9,525 $10,625 ADD: Capital Expenditures 4,122 6,661 3,314 4,073 18,170 4,707 4,100 8,807 NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES $(2,967) $11,738 $22,060 $29,692 $60,523 $5,807 $13,625 $19,432 NET DEBT [TOTAL DEBT LESS CASH & CASH EQUIVALENTS LESS INVESTMENTS] $57,263 $54,376 $34,706 $8,645 $8,645 $8,814 $(1,376) $(1,376) ADD: Cash & Cash Equivalents 41,291 41,414 48,976 61,738 61,738 57,633 60,831 60,831 Investments 101 98 102 101 101 99 96 96 TOTAL DEBT $98,655 $95,888 $83,784 $70,484 $70,484 $66,546 $59,551 $59,551 DEBT AS % OF EQUITY 25% 24% 20% 17% 17% 16% 14% 14% TOTAL DEBT 98,655 95,888 83,784 70,484 70,484 66,546 59,551 59,551 TOTAL SHAREHOLDERS' EQUITY 399,018 397,957 409,016 418,247 418,247 418,819 432,151 432,151 EBIT [NET INCOME LESS INCOME TAXES LESS INTEREST EXPENSE, NET] $13,562 $18,295 $2,092 $12,068 $46,017 $12,287 $19,630 $31,917 LESS: Interest expense, net (1,081) (1,017) (1,122) (1,038) (4,258) (787) (838) (1,625) (Provision) benefit for income taxes (3,896) (6,142) 899 (1,822) (10,960) (3,592) (6,124) (9,715) NET INCOME $8,585 $11,136 $1,869 $9,208 $30,799 $7,908 $12,668 $20,577 2012 2013 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR TOTAL ADJUSTED OPERATING INCOME [OPERATING INCOME EXCLUDING INVENTORY RESTRUCTURING, IMPAIRMENT AND SPECIAL CHARGES] $13,700 $18,479 $18,505 $15,600 $66,322 $14,528 $22,268 $36,796 LESS: Inventory restructuring charges — — 4,124 37 4,161 250 (242) 8 Impairment charges — — 10,348 — 10,348 — — Special charges — — 1,377 3,905 5,282 1,378 2,254 3,632 OPERATING INCOME $13,700 $18,479 $2,656 $11,695 $46,531 $12,900 $20,256 $33,156 ADJUSTED NET INCOME [NET INCOME EXCLUDING INVENTORY RESTRUCTURING, IMPAIRMENT AND SPECIAL CHARGES, NET OF TAX] $8,585 $11,136 $12,171 $11,770 $43,663 $9,043 $14,044 $23,088 LESS: Inventory restructuring charges, net of tax — — 2,681 24 2,705 174 (165) 9 Impairment charges, net of tax — — 6,726 — 6,726 — — — Special charges, net of tax — — 895 2,538 3,433 961 1,541 2,502 NET INCOME $8,585 $11,136 $1,869 $9,208 $30,799 $7,908 $12,668 $20,577 ADJUSTED EARNINGS PER SHARE [EPS EXCLUDING INVENTORY RESTRUCTURING, IMPAIRMENT AND SPECIAL CHARGES, NET OF TAX] $0.49 $0.64 $0.77 $0.69 $2.59 $0.52 $0.81 $1.33 LESS: Inventory restructuring charges, net of tax $— $— $0.17 $— $0.17 $0.01 $(0.01) $— Impairment charges, net of tax $— $— $0.43 $— $0.43 $— $— $— Special charges, net of tax $— $— $0.06 $0.16 $0.22 $0.06 $0.10 $0.16 EARNINGS PER COMMON SHARE (Diluted) $0.49 $0.64 $0.11 $0.53 $1.76 $0.45 $0.72 $1.17 2012 2013 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR TOTAL EBITDA [NET INCOME LESS NET INTEREST EXPENSE, DEPRECIATION, AMORTIZATION AND INCOME TAXES] $18,534 $23,043 $2,092 $12,068 $65,345 $17,054 $24,407 $41,461 LESS: Interest expense, net (1,081) (1,017) (1,122) (1,038) (4,258) (787) (838) (1,625) Depreciation (4,008) (3,825) (3,932) (3,967) (15,732) (4,009) (4,026) (8,035) Amortization (964) (923) (936) (773) (3,596) (758) (751) (1,509) (Provision) benefit for income taxes (3,896) (6,142) 899 (1,822) (10,960) (3,592) (6,124) (9,715) NET INCOME $8,585 $11,136 $1,869 $9,208 $30,799 $7,908 $12,668 $20,577

ADJUSTED EBITDA [NET INCOME EXCLUDING INVENTORY RESTRUCTURING, IMPAIRMENT AND SPECIAL CHARGES, NET INTEREST EXPENSE, DEPRECIATION, AMORTIZATION AND INCOME TAXES]

$18,534 $23,043 $22,809 $20,750 $85,136 $18,682 $26,419 $45,101 Inventory restructuring charges $— $— $(4,124) $(37) $(4,161) $(250) $242 $(8) Impairment charges $— $— $(10,348) $— $(10,348) $— $— $— Special charges $— $— $(1,377) $(3,905) $(5,282) $(1,378) $(2,254) $(3,632) Interest expense, net $(1,081) $(1,017) $(1,122) $(1,038) $(4,258) $(787) $(838) $(1,625) Depreciation $(4,008) $(3,825) $(3,932) $(3,967) $(15,732) $(4,009) $(4,026) $(8,035) Amortization $(964) $(923) $(936) $(773) $(3,596) $(758) $(751) $(1,509) (Provision) benefit for income taxes $(3,896) $(6,142) $899 $(1,822) $(10,960) $(3,592) $(6,124) $(9,715) NET INCOME $8,585 $11,136 $1,869 $9,208 $30,799 $7,908 $12,668 $20,577  

CIRCOR INTERNATIONAL, INC.

RECONCILIATION OF FUTURE PERFORMANCE MEASURES TO COMMONLY

USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS

(UNAUDITED)

      3rd Quarter 2013   Low   High EXPECTED ADJUSTED EARNINGS PER SHARE [EPS EXCLUDING INVENTORY RESTRUCTURING, IMPAIRMENT AND SPECIAL CHARGES, NET OF TAX]   $ 0.76 $ 0.83

LESS: RESTRUCTURING RELATED CHARGES [INVENTORY RESTRUCTURING CHARGES, IMPAIRMENT CHARGES, SPECIAL CHARGES, NET OF TAX]

$ (0.06 ) $ (0.07 ) PLUS: Acquisition Arbitration Settlement $ 0.18   $ 0.18   EXPECTED EARNINGS PER COMMON SHARE (Diluted) $ 0.88   $ 0.94