CIRCOR International, Inc. (NYSE: CIR), a leading provider of
valves and other highly engineered products for markets including
oil & gas, power generation and aerospace & defense, today
announced financial results for the first quarter ended April 5,
2015.
First-Quarter 2015 Highlights
- Orders of $182 million with solid
bookings for large international projects
- Q1 revenue of $165.9 million and
adjusted EPS of $0.60
- Repurchased 302,000 shares of common
stock for $16.7 million
- Restructuring actions remain on track;
announcing additional restructuring program
- Announced acquisition of
Schroedahl
“Our first-quarter revenues were in line with expectations
overall at $166 million with adjusted EPS of $0.60 despite
significant headwind from currencies,” said Scott Buckhout,
President and Chief Executive Officer. “In our Energy segment,
strong orders in our long-cycle large international projects
business offset weaker orders in our short-cycle distributed valves
business. Aerospace & Defense orders came in as expected. After
adjusting for divestitures and currency, organic orders grew
9%.”
On April 16, the Company announced the acquisition of
Germany-based Schroedahl, a manufacturer of automatic recirculation
safety valves, primarily for the higher-growth power generation
market in Asia. This acquisition is expected to be accretive to
earnings per share in the first year. Additional details on the
transaction will be provided during the conference call later
today.
“We remain focused on enhancing shareholder value. During the
quarter, we repurchased more than 302,000 shares under our
previously announced share repurchase program. Our growth
initiatives and restructuring actions remain on track. In addition,
we are announcing another restructuring program expected to deliver
$5.0 million of annualized savings. Going forward, we will continue
to drive cost reduction, expand margins and focus on what we can
control as we manage through this cycle,” concluded Buckhout.
Second-Quarter 2015 GuidanceFor the second quarter of
2015, the Company will provide its guidance during the conference
call later today.
Selected Consolidated Results
(In millions, except percentages and bps)
Q1 2015 Q1 20142
Change Revenue
$
165.9 $ 211.2 (21)% Adjusted Operating Income1
$ 14.6 $ 19.8 (26)% Adjusted Operating Margin1
8.8% 9.4%
(60) bps
GAAP Earnings Per Share (Diluted)
$ 0.54 $ 0.82 (34)%
Adjusted Earnings Per Share (Diluted)1
$ 0.60 $ 0.78
(23)% Free Cash Flow
$ (18.4) $ 14.4 NM Orders
$ 182.3 $ 199.9 (9)%
Segment Results
(In millions, except
percentages and bps) Q1 2015 Q1 20142
Change Energy Revenue
$
127.6 $ 162.6 (22)% Adjusted Operating Margin1
13.8%
13.8% 0 bps Orders
$ 143.1 $ 159.5 (10)%
Aerospace & Defense Revenue
$ 38.3 $ 48.6
(21)% Adjusted Operating Margin1
8.0% 9.1% (110) bps Orders
$ 39.2 $ 40.4 (3)%
1. Consolidated and Segment Results exclude special charges of
$1.5 million during Q1 2015 and special recoveries of $1.2 million
during Q1 2014.
2. Q1 2014 Amounts have NOT been adjusted for divestitures or
foreign currency impacts.
Conference Call InformationCIRCOR International will hold
a conference call to review its financial results today, April 28,
2015, at 9:00 a.m. ET. To listen to the conference call and view
the accompanying presentation slides, 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 MeasuresAdjusted 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.
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 StatementThis 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 the performance of the
Schroedahl acquisition and the realization of cost reductions from
restructuring activities. Actual events, performance or results
could differ materially from the anticipated events, performance or
results expressed or implied by such forward-looking statements.
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 highly engineered products
and sub-systems for markets including oil & gas, power
generation and aerospace & defense. CIRCOR has a diversified
product portfolio with recognized, market-leading brands that
fulfill its customers’ unique application needs. The Company’s
strategy is to grow organically and through complementary
acquisitions; simplify CIRCOR’s operations; achieve world class
operational excellence; and attract and retain top industry talent.
For more information, visit the Company’s investor relations web
site at http://investors.circor.com.
CIRCOR INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF
INCOME
(in thousands, except per share
data)
UNAUDITED
Three Months Ended
April 5,2015
March 30,2014
Net revenues $ 165,860 $ 211,186 Cost of revenues 113,211
146,548 GROSS PROFIT 52,649 64,638 Selling, general and
administrative expenses 38,088 44,888 Special charges (recoveries),
net 1,511 (1,157 ) OPERATING INCOME 13,050 20,907
Other expense (income): Interest expense, net 640 918 Other
(income), net (506 ) (468 ) TOTAL OTHER EXPENSE, NET 134 450
INCOME BEFORE INCOME TAXES 12,916 20,457 Provision for
income taxes 3,284 5,825 NET INCOME $ 9,632 $
14,632 Earnings per common share: Basic $ 0.55 $ 0.83
Diluted $ 0.54 $ 0.82 Weighted average number of common shares
outstanding: Basic 17,662 17,620 Diluted 17,712 17,741 Dividends
paid per common share $ 0.0375 $ 0.0375
CIRCOR
INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(in thousands)
(UNAUDITED)
Three Months Ended
April 5,2015
March 30,2014
OPERATING ACTIVITIES Net income $ 9,632 $
14,632 Adjustments to reconcile net income to net cash (used in)
provided by operating activities: Depreciation 3,521 4,069
Amortization 710 786 Compensation expense of share-based plans
2,222 1,830 Tax effect of share-based plan compensation (289 ) (571
) Loss on sale of property, plant and equipment 46 34 (Gain) on
sale of business (972 ) — Changes in operating assets and
liabilities: Trade accounts receivable, net 7,480 (9,952 )
Inventories (18,697 ) 234 Prepaid expenses and other assets (4,787
) (859 ) Accounts payable, accrued expenses and other liabilities
(15,298 ) 6,854 Net cash (used in) provided by operating
activities (16,432 ) 17,057
INVESTING ACTIVITIES
Additions to property, plant and equipment (1,983 ) (2,670 )
Proceeds from the sale of property, plant and equipment — 13
Proceeds from the sale of affiliate 2,759 — Net cash
provided by (used in) investing activities 776 (2,657 )
FINANCING ACTIVITIES Proceeds from long-term debt 46,903
48,029 Payments of long-term debt (21,540 ) (41,781 ) Dividends
paid (672 ) (670 ) Proceeds from the exercise of stock options 38
192 Tax effect of share-based plan compensation 289 571 Purchases
of common stock (16,682 ) — Net cash provided by financing
activities 8,336 6,341 Effect of exchange rate
changes on cash and cash equivalents (10,083 ) (824 ) (DECREASE)
INCREASE IN CASH AND CASH EQUIVALENTS (17,403 ) 19,917 Cash and
cash equivalents at beginning of year 121,286 102,180
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 103,883 $
122,097 Cash paid during the year for: Income taxes $ 2,216
$ 2,913 Interest $ 394 $ 472
CIRCOR INTERNATIONAL,
INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
April 5, 2015
December 31, 2014
ASSETS
(unaudited) CURRENT ASSETS: Cash and cash equivalents
$ 103,883 $ 121,286 Short-term investments 80 86 Trade accounts
receivable, less allowance for doubtful accounts of $9,122 and
$9,536, respectively 140,752 156,738 Inventories 194,624 183,434
Prepaid expenses and other current assets 21,731 21,626 Deferred
income tax asset 22,184 22,861 Total Current Assets
483,254 506,031 PROPERTY, PLANT AND EQUIPMENT, NET
90,045 96,212 OTHER ASSETS: Goodwill 69,832 72,430 Intangibles, net
24,797 26,887 Deferred income tax asset 17,206 19,048 Other assets
3,557 4,114 TOTAL ASSETS $ 688,691 $ 724,722
LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES:
Accounts payable $ 77,893 $ 87,112 Accrued expenses and other
current liabilities 53,443 65,223 Accrued compensation and benefits
18,166 24,728 Notes payable and current portion of long-term debt
8,481 8,423 Total Current Liabilities 157,983
185,486 LONG-TERM DEBT, NET OF CURRENT PORTION 29,065 5,261
DEFERRED INCOME TAXES 7,107 7,771 OTHER NON-CURRENT LIABILITIES
31,433 32,111 SHAREHOLDERS’ EQUITY: Common stock 177 177 Additional
paid-in capital 279,405 277,227 Retained earnings 259,599 250,635
Treasury stock (16,682 ) — Accumulated other comprehensive loss,
net of taxes (59,396 ) (33,946 )
Total Shareholders’ Equity
463,103 494,093 TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY $ 688,691 $ 724,722
CIRCOR
INTERNATIONAL, INC.
SUMMARY OF ORDERS AND BACKLOG
(in millions)
UNAUDITED
Three Months Ended
April 5, 2015
March 30, 2014
ORDERS (1)(5) Energy $ 143.1 $ 147.3 Aerospace & Defense
39.2 37.2 Total orders $ 182.3 $ 184.5
BACKLOG (2)(5)
April 5, 2015
March 30, 2014 Energy
(3) $ 247.6 $ 265.5
Aerospace & Defense
(4) 104.1 163.1 Total backlog
$ 351.8 $ 428.6 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 unshipped customer orders. Note 3: Energy backlog was
reduced during the fourth quarter of 2014 by $5.5 million related
to customer order cancellations initially recorded in prior years.
Note 4: Aerospace & Defense reduced backlog in the second
quarter of 2014 by $28.6 million associated with the exit of
certain landing gear product lines. Note 5: Three months ended
March 30, 2014 orders and backlog amounts exclude business
divestitures in both the Energy and Aerospace & Defense
segments.
CIRCOR INTERNATIONAL, INC.
SUMMARY REPORT BY SEGMENT
(in thousands, except
percentages)
UNAUDITED
2014 2015 1ST QTR
2ND QTR 3RD QTR 4TH QTR
TOTAL 1ST QTR NET REVENUES
Energy $ 162,587 $ 160,580 $ 157,658 $
172,432 $ 653,257 $ 127,586 Aerospace & Defense 48,599
47,304 46,160 46,126
188,189 38,274 Total $ 211,186 $
207,884 $ 203,818 $ 218,558 $ 841,446 $ 165,860
ADJUSTED
OPERATING MARGIN Energy 13.8 % 14.6 % 16.9 % 14.3 % 14.9 % 13.8
% Aerospace & Defense 9.1 % 7.1 % 5.0 %
5.3 % 6.6 % 8.0 % Segment operating margin 12.7 %
12.9 % 14.2 % 12.4 % 13.0 % 12.4 % Corporate expenses (3.4 )%
(2.2 )% (2.8 )% (2.7 )% (2.8 )%
(3.6 )% Adjusted operating margin 9.4 % 10.7 % 11.4 % 9.6 % 10.2 %
8.8 % Restructuring inventory charges — % 2.5 % 1.4 % — % 0.9 % — %
Impairment charges — % — % — % 0.3 % 0.1 % — % Special
restructuring charges 0.4 % 0.6 % 0.2 % 1.2 % 0.6 % 0.9 % Special
other charges, net of recoveries (0.9 )% — % — %
4.3 % 0.9 % — % Total GAAP operating margin
9.9 % 7.6 % 9.7 % 3.7 % 7.7 %
7.9 %
2014 2015 1ST
QTR 2ND QTR 3RD QTR 4TH
QTR TOTAL 1ST QTR ADJUSTED
OPERATING INCOME Energy $ 22,462 $ 23,502 $ 26,577 $ 24,575 $
97,117 $ 17,550 Aerospace & Defense 4,426 3,362
2,295 2,425 12,508
3,045 Segment operating income 26,888 26,864 28,872
27,000 109,625 20,595 Corporate expenses (7,137 ) (4,634 )
(5,678 ) (5,965 ) (23,415 ) (6,034 )
Adjusted operating income 19,750 22,231 23,194 21,035 86,210 14,561
Restructuring inventory charges — 5,139 2,850 — 7,989 — Impairment
charges — — — 726 726 — Special restructuring charges 786 1,257 478
2,725 5,246 1,512 Special other charges, net of recoveries (1,943 )
— — 9,434 7,491
(1 ) Total GAAP operating income 20,907
15,835 19,866 8,150
64,757 13,050 INTEREST EXPENSE, NET (918 )
(891 ) (436 ) (407 ) (2,652 ) (640 ) OTHER INCOME (EXPENSE), NET
468 384 (419 ) 722
1,156 506 PRETAX INCOME 20,457 15,328 19,012
8,465 63,261 12,916 (PROVISION FOR) BENEFIT FROM INCOME TAXES
(5,825 ) (3,402 ) (4,337 ) 690
(12,875 ) (3,284 ) EFFECTIVE TAX RATE 28.5 % 22.2 % 22.8 %
(8.2 )% 20.4 % 25.4 %
NET INCOME $ 14,632 $
11,926 $ 14,675 $ 9,155 $
50,386 $ 9,632 Weighted Average Common Shares
Outstanding (Diluted) 17,741 17,767 17,779 17,782 17,768 17,712
EARNINGS PER COMMON SHARE (Diluted) $ 0.82 $
0.67 $ 0.83 $ 0.51 $ 2.84
$ 0.54
ADJUSTED EBITDA $ 25,073
$ 27,536 $ 27,530 $ 26,789
$ 106,927 $ 19,298
ADJUSTED
EBITDA AS A % OF SALES 11.9 % 13.2 % 13.5 %
12.3 % 12.7 % 11.6 %
CAPITAL
EXPENDITURES $ 2,670 $ 2,933 $ 3,297 $ 3,910 $ 12,810 $ 1,983
CIRCOR INTERNATIONAL, INC.
RECONCILIATION OF KEY PERFORMANCE
MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE
TERMS
(in thousands, except
percentages)
UNAUDITED
2014 2015 1ST QTR
2ND QTR 3RD QTR 4TH QTR
TOTAL 1ST QTR FREE CASH FLOW AS % OF
NET INCOME 98 % 62 %
96 % 243 % 115
% (191 )% FREE CASH FLOW $
14,387 $ 7,365 $ 14,015 $
22,249 $ 58,016 $ (18,415
) ADD: Capital Expenditures 2,670 2,933
3,297 3,910 12,810
1,983 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $
17,057 $ 10,298 $ 17,312
$ 26,159 $ 70,826 $ (16,432 )
NET
DEBT (CASH) $ (66,056 ) $
(72,982 ) $ (80,829 ) $
(107,688 ) $ (107,688 ) $
(66,417 ) ADD: Cash & Cash Equivalents 122,097
116,326 114,580 121,286 121,286 103,883 Investments 92
95 91 86 86
80 TOTAL DEBT $ 56,133 $ 43,439
$ 33,842 $ 13,684 $ 13,684
$ 37,546
DEBT AS % OF EQUITY 11
% 9 % 7 % 3 %
3 % 8 % TOTAL DEBT 56,133
43,439 33,842 13,684
13,684 37,546 TOTAL SHAREHOLDERS' EQUITY $
492,601 $ 507,363 $ 508,035
$ 494,093 $ 494,093 $ 463,103
2014 2015 1ST QTR
2ND QTR 3RD QTR 4TH QTR
TOTAL 1ST QTR ADJUSTED OPERATING INCOME
$ 19,750 $ 22,230 $
23,194 $ 21,035 $ 86,210
$ 14,561 LESS: Inventory restructuring charges —
5,139 2,850 — 7,989 — Impairment charges — — — 726 726 — Special
restructuring charges 786 1,257 478 2,725 5,246 1,512 Special other
charges, net of recoveries (1,943 ) — —
9,434 7,491 (1 ) OPERATING
INCOME $ 20,907 $ 15,834 $ 19,866 $ 8,150 $ 64,757 $ 13,050
ADJUSTED NET INCOME $ 13,916 $
16,090 $ 16,827 $ 19,188
$ 66,019 $ 10,564 LESS: Inventory
restructuring charges, net of tax — 3,316 1,839 — 5,155 —
Impairment charges, net of tax — — — 726 726 — Special
restructuring charges, net of tax 508 848 313 1,763 3,432 1,079
Special other charges, net of recoveries, net of tax (1,224 )
— — 7,544 6,320
(147 ) NET INCOME $ 14,632 $ 11,926
$ 14,675 $ 9,155 $ 50,386
$ 9,632
ADJUSTED EARNINGS PER SHARE
(Diluted) $ 0.78 $ 0.91 $
0.95 $ 1.08 $ 3.72 $
0.60 LESS: Inventory restructuring charges, net of tax —
0.19 0.10 — 0.29 — Impairment charges, net of tax — — — 0.04 0.04 —
Special restructuring charges, net of tax 0.03 0.05 0.02 0.10 0.20
0.06
Special other charges, net of recoveries,
net of tax
(0.07 ) — — 0.42
0.35 — EARNINGS PER COMMON SHARE (Diluted) $
0.82 $ 0.67 $ 0.83 $ 0.51
$ 2.84 $ 0.54
2014 2015 1ST QTR 2ND QTR
3RD QTR 4TH QTR TOTAL
1ST QTR EBITDA $ 26,230 $
21,140 $ 24,202 $ 13,904
$ 85,475 $ 17,787 LESS: Interest
expense, net (918 ) (891 ) (436 ) (407 ) (2,652 ) (640 )
Depreciation (4,069 ) (4,116 ) (3,978 ) (4,283 ) (16,446 ) (3,521 )
Amortization (786 ) (805 ) (776 ) (749 ) (3,116 ) (710 ) (Provision
for) benefit from income taxes (5,825 ) (3,402 )
(4,337 ) 690 (12,875 ) (3,284 ) NET
INCOME $ 14,632 $ 11,926 $ 14,675
$ 9,155 $ 50,386 $ 9,632
ADJUSTED EBITDA $ 25,073 $
27,536 $ 27,530 $ 26,789
$ 106,927 $ 19,298 LESS: Inventory
restructuring charges — (5,139 ) (2,850 ) — (7,989 ) — Impairment
charges — — — (726 ) (726 ) — Special restructuring charges (786 )
(1,257 ) (478 ) (2,725 ) (5,246 ) (1,512 ) Special other charges,
net of recoveries 1,943 — — (9,434 ) (7,491 ) 1 Interest expense,
net (918 ) (891 ) (436 ) (407 ) (2,652 ) (640 ) Depreciation (4,069
) (4,116 ) (3,978 ) (4,283 ) (16,446 ) (3,521 ) Amortization (786 )
(805 ) (776 ) (749 ) (3,116 ) (710 ) (Provision for) benefit from
income taxes (5,825 ) (3,402 ) (4,337 ) 690
(12,875 ) (3,284 ) NET INCOME $ 14,632
$ 11,926 $ 14,675 $ 9,155
$ 50,386 $ 9,632
CIRCOR
INTERNATIONAL, INC.
RECONCILIATION OF KEY PERFORMANCE
MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE
TERMS
(in thousands, except per share
data)
UNAUDITED
2014 1ST QTR 2ND
QTR 3RD QTR 4TH QTR
TOTAL NET REVENUES EXCLUDING DIVESTITURES $
198,204 $ 194,349 $
189,705 $ 207,970 $
790,228 ADD: Energy divestiture 10,554 10,037 10,667 8,465
39,723 Aerospace & Defense divestiture 2,428
3,498 3,446 2,123 11,495
NET REVENUES $ 211,186 $ 207,884 $
203,818 $ 218,558 $ 841,446
ADJUSTED
EARNINGS PER SHARE EXCLUDING DIVESTITURES (Diluted) 0.79
0.88 0.89 1.05 3.61 ADD: Divestitures
(0.01 ) 0.03 0.06 0.03
0.11 ADJUSTED EARNINGS PER SHARE (Diluted) $ 0.78
$ 0.91 $ 0.95 $ 1.08
$ 3.72
CIRCOR InternationalRajeev Bhalla, 781-270-1200Executive Vice
President & Chief Financial Officer
CIRCOR (NYSE:CIR)
Historical Stock Chart
From Jun 2024 to Jul 2024
CIRCOR (NYSE:CIR)
Historical Stock Chart
From Jul 2023 to Jul 2024