CIRCOR International, Inc. (NYSE: CIR), a leading provider of
flow control solutions and other highly engineered products for the
Industrial, Energy, and Aerospace & Defense markets, today
announced financial results for the first quarter ended April 1,
2018. Results include the acquisition of the Colfax Fluid Handling
business, which CIRCOR acquired in December 2017.
First-Quarter 2018 Highlights
- Orders of $326.2 million, up 77% and
down 1% organically
- Revenue of $275.6 million, up 90% and
up 4% organically
- Backlog of $561 million, up $60 million
in the quarter
- GAAP Loss Per Share of $0.88, Adjusted
Earnings Per Share of $0.40
- Integration of Fluid Handling
businesses on track
“The momentum we saw across many of our end markets in Q4 2017
is continuing as we move through the early stages of 2018,” said
Scott Buckhout, President and Chief Executive Officer. “For CIRCOR
overall, our reported results were stronger than we expected as we
entered the quarter. Our book to bill ratio in Q1 was almost 1.2,
increasing our backlog by $60 million. Orders continue to be
healthy and we expect that trend to continue through the second
quarter.”
“As we announced in Q1, we have re-aligned our businesses to
focus on three primary end markets – Industrial, Energy, and
Aerospace & Defense,” Buckhout said. “This is part of our
strategy to simplify the business, clarify customer and channel
relationships, and better exploit growth opportunities across the
organization.”
“The Fluid Handling acquisition brings a strong platform for
revenue growth and profitability. Fluid Handling orders were up 16%
on a pro forma, organic basis in the quarter. The integration is on
track, and we are confident in our ability to fully realize all of
the committed synergies,” added Buckhout.
“Overall, we remain committed to driving long-term growth,
generating strong cash flow, and delevering the Company by reducing
debt and expanding margins,” concluded Buckhout.
Second-Quarter 2018 GuidanceFor the second quarter of
2018, CIRCOR expects revenue in the range of $275 million to $285
million, and GAAP loss per share of $0.09 to $0.27, which reflects
acquisition-related amortization expense of $0.51 to $0.53 and
other special and restructuring charges of $0.12 to $0.18.
Excluding the impact of amortization, special and restructuring
charges, adjusted EPS is expected to be in the range of $0.44 to
$0.54 per share. Presentation slides that provide supporting
information to this guidance and first-quarter results are posted
on the “Investors” section of the Company’s website,
http://investors.circor.com, and will be discussed during the
conference call at 9:00 a.m. ET tomorrow, May 2, 2018.
Selected Consolidated Results
(unaudited)
($ millions except EPS) Q1 2018
Q1 2017 Change Revenue $ 275.6 $
145.2 90%
GAAP Operating (Loss) Income $
(13.4) $ 7.4 N/M
Adjusted Operating Income1
$ 19.8 $ 9.1 118%
GAAP Operating Margin
(4.9)% 5.1% N/M
Adjusted Operating Margin1
7.2% 6.3% 90 bps
GAAP (Loss) Earnings Per Share
(Diluted) $ (0.88) $ 0.29 N/M
Adjusted
Earnings Per Share (Diluted)1 $ 0.40 $
0.32 25%
Operating Cash Flow $ (0.1) $ 16.2
N/M
Free Cash Flow2 $ (8.3) $ 13.4 N/M
Orders $ 326.2 $ 184.1 77%
Segment Results
($ millions) Q1 2018 Q1
2017 Change Energy Revenue $
100.0 $ 76.2 31%
Segment Operating Income $
5.7 $ 6.4 (11)%
Segment Operating Margin 5.7%
8.4% (270) bps
Orders $ 129.8 $ 100.0 30%
Aerospace & Defense Revenue $
58.5 $ 41.6 41%
Segment Operating Income $
8.9 $ 3.8 136%
Segment Operating Margin 15.3%
9.1% 620 bps
Orders $ 59.8 $ 56.4 6%
Industrial Revenue $ 117.1 $ 27.4 328%
Segment Operating Income $ 12.9 $ 4.4 195%
Segment Operating Margin 11.1% 16.0% (490) bps
Orders $ 136.6 $ 27.7
394%
1. Adjusted Consolidated and Segment Results for Q1 2018 exclude
non-cash acquisition-related intangible amortization, special and
restructuring charges totaling $33.2 million ($25.5 million, net of
tax). These charges include: (i) $20.2 million charge for non-cash
acquisition-related intangible amortization expense, including the
amortization of a step-up in fair value of inventories ($6.6
million); (ii) $10.5 million charge related to restructuring
activities, primarily severance, related to our Engineered Valves,
Reliability Services and Germany-based Pumps business; and (iii)
$2.5 million related to the separation of Fluid Handling business
from Colfax Corporation. Consolidated and Segment Results for Q1
2017 exclude non-cash acquisition-related intangible amortization,
special and restructuring charges totaling $1.7 million ($0.6
million, net of tax). These charges include (i) $2.6 million charge
for non-cash acquisition-related intangible amortization expense,
(ii) $1.5 million charge related to other restructuring activities,
primarily the exit of manufacturing operations in China and France;
and (iii) $2.3 million net special gain primarily related to
updating fair value estimates related to the purchase of Critical
Flow Solutions, partially offset by Brazil losses incurred
subsequent to our Q1 2016 closure of manufacturing operations.2.
Free Cash Flow is a non-GAAP financial measure and is calculated by
subtracting GAAP capital expenditures, net of proceeds from asset
sales, from GAAP Operating Cash Flow.
Conference Call InformationCIRCOR International will hold
a conference call to review its financial results at 9:00 a.m. ET
tomorrow, May 2, 2018. To listen to the live conference call and
view the accompanying presentation slides, please visit “Webcasts
& Presentations” in the “Investors” portion of CIRCOR’s
website. The live call also can be accessed by dialing (877)
407-5790 or (201) 689-8328. The webcast will be archived on the
Company’s website for one year.
Use of Non-GAAP Financial MeasuresAdjusted operating
income, Adjusted operating margin, Adjusted net income, Adjusted
earnings per share (diluted), EBITDA, Adjusted EBITDA, net debt,
free cash flow, organic growth and pro forma combined amounts are
non-GAAP financial measures. These non-GAAP financial measures are
used by management in our financial and operating decision making
because we believe they better reflect our ongoing business and
allow for meaningful period-to-period comparisons. We believe these
non-GAAP financial measures provide useful information to investors
and others in understanding and evaluating the Company’s current
operating performance and future prospects in the same manner as
management does, if they so choose. These non-GAAP financial
measures also allow investors and others to compare the Company’s
current financial results with the Company’s past financial results
in a consistent manner.
For example:
- We exclude costs and tax effects
associated with restructuring activities, such as reducing overhead
and consolidating facilities. We believe that the costs related to
these restructuring activities are not indicative of our normal
operating costs.
- We exclude certain acquisition-related
costs, including significant transaction costs and amortization of
inventory and fixed-asset step-ups and the related tax effects. We
exclude these costs because we do not believe they are indicative
of our normal operating costs.
- We exclude the expense and tax effects
associated with the non-cash amortization of acquisition-related
intangible assets because a significant portion of the purchase
price for acquisitions may be allocated to intangible assets that
have lives up to 25 years. Exclusion of the non-cash amortization
expense allows comparisons of operating results that are consistent
over time for both our newly acquired and long-held businesses and
with both acquisitive and non-acquisitive peer companies.
- We also exclude certain gains/losses
and related tax effects, which are either isolated or cannot be
expected to occur again with any predictability, and that we
believe are not indicative of our normal operating gains and
losses. For example, we exclude gains/losses from items such as the
sale of a business, significant litigation-related matters and
lump-sum pension plan settlements.
CIRCOR’s management uses these non-GAAP measures, in addition to
GAAP financial measures, as the basis for measuring the Company’s
operating performance and comparing such performance to that of
prior periods and to the performance of our competitors. We use
such measures when publicly providing our business outlook,
assessing future earnings potential, evaluating potential
acquisitions and dispositions and in our financial and operating
decision-making process, including for compensation purposes.
Investors should recognize that these non-GAAP measures might
not be comparable to similarly titled measures of other companies.
These measures should be considered in addition and not as a
substitute for or superior to, any measure of performance, cash
flow or liquidity prepared in accordance with accounting principles
generally accepted in the United States. A reconciliation of the
non-GAAP financial measures to the most directly comparable GAAP
measures is included in this news release.
Safe Harbor StatementThis press release contains
forward-looking statements within the meaning of Section 27 A of
the Securities Act of 1933, as amended, and Section 21 E 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 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. Important factors that could cause
actual results to vary from expectations include, but are not
limited to: our ability to respond to competitive developments and
to grow our business, both domestically and internationally;
changes in the cost, quality or supply of raw materials; our
ability to comply with our debt obligations; our ability to
successfully implement our acquisition, divesture or restructuring
strategies, including our integration of the recently acquired
Fluid Handling business; changes in industry standards or
government regulations, both in the United States and
internationally; and our ability to operate our manufacturing
facilities at current or higher levels and respond to increases in
manufacturing costs. 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 differentiated technology
products and sub-systems for markets including oil & gas,
industrial, aerospace & defense and commercial marine. CIRCOR
has a diversified flow and motion control product portfolio with
recognized, market-leading brands that fulfill its customers’
mission critical 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 talent. For more information, visit the
Company’s investor relations website at
http://investors.circor.com.
CIRCOR INTERNATIONAL,
INC.CONDENSED CONSOLIDATED STATEMENTS OF (LOSS)
INCOME(in thousands, except per share
data)(Unaudited)
Three Months Ended April 1, 2018 April 2,
2017 Net revenues $ 275,580 $ 145,208 Cost of revenues 199,276
98,575 GROSS PROFIT 76,304 46,633 Selling, general
and administrative expenses 77,238 40,089 Special and restructuring
charges (recoveries), net 12,446 (810 ) OPERATING (LOSS)
INCOME (13,380 ) 7,354 Other expense (income): Interest
expense, net 11,801 1,669 Other (income) expense, net (1,861 ) 225
TOTAL OTHER EXPENSE, NET 9,940 1,894 (LOSS)
INCOME BEFORE INCOME TAXES (23,320 ) 5,460 (Benefit from) provision
for income taxes (5,879 ) 687 NET (LOSS) INCOME $ (17,441 )
$ 4,773 (Loss) Earnings per common share: Basic $ (0.88 ) $
0.29 Diluted $ (0.88 ) $ 0.29 Weighted average number of common
shares outstanding: Basic 19,806 16,458 Diluted 19,806 16,691
Dividends declared per common share $ — $ 0.0375
CIRCOR INTERNATIONAL,
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in
thousands)(Unaudited)
Three Months Ended OPERATING ACTIVITIES
April 1, 2018 April 2, 2017 Net (loss) income
$ (17,441 ) $ 4,773 Adjustments to reconcile net (loss) income to
net cash (used in) provided by operating activities: Depreciation
7,334 3,798 Amortization 12,329 3,092 Bad debt expense (recovery)
192 (54 ) Loss on write down of inventory 6,466 548 Compensation
expense of share-based plans 1,365 738 Change in fair value of
contingent consideration — (2,500 ) Interest amortization 881 —
Loss (gain) on sale or write down of property, plant and equipment
1,284 (110 ) Changes in operating assets and liabilities, net of
effects of acquisition and disposition: Trade accounts receivable
12,141 14,018 Inventories (13,833 ) 2,030 Prepaid expenses and
other assets (6,616 ) (4,297 ) Accounts payable, accrued expenses
and other liabilities (4,249 ) (5,841 ) Net cash (used in) provided
by operating activities (147 ) 16,195
INVESTING
ACTIVITIES Additions to property, plant and equipment (8,234 )
(3,001 ) Proceeds from the sale of property, plant and equipment 93
190 Business acquisition, working capital adjustment — 1,467
Net cash used in investing activities (8,141 ) (1,344 )
FINANCING ACTIVITIES Proceeds from long-term debt 71,950
34,900 Payments of long-term debt (44,106 ) (43,100 ) Dividends
paid — (624 ) Proceeds from the exercise of stock options 301 295
Return of cash to seller (7,905 ) — Net cash provided by
(used in) financing activities 20,240 (8,529 ) Effect of
exchange rate changes on cash and cash equivalents 957 1,055
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
12,909 7,377 Cash, cash equivalents and restricted cash at
beginning of period 112,293 58,279 CASH, CASH
EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD $ 125,202 $
65,656
CIRCOR INTERNATIONAL,
INC.CONDENSED CONSOLIDATED BALANCE SHEETS(in thousands,
except share and per share data)(Unaudited)
April 1, 2018 December 31, 2017
ASSETS CURRENT ASSETS: Cash and cash equivalents $ 123,305 $
110,356 Trade accounts receivable, less allowance for doubtful
accounts of $13,512 and $15,434, respectively 204,437 223,922
Inventories 265,065 244,896 Prepaid expenses and other current
assets 67,129 59,219 Total Current Assets 659,936
638,393 PROPERTY, PLANT AND EQUIPMENT, NET 226,439
217,539 OTHER ASSETS: Goodwill 515,177 505,762 Intangibles, net
497,027 513,364 Deferred income taxes 28,236 22,334 Other assets
8,861 9,407 TOTAL ASSETS $ 1,935,676 $
1,906,799 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT
LIABILITIES: Accounts payable $ 118,441 $ 117,329 Accrued expenses
and other current liabilities 179,106 170,454 Accrued compensation
and benefits 30,865 34,734 Total Current Liabilities
328,412 322,517 LONG-TERM DEBT 815,795 787,343
DEFERRED INCOME TAXES 31,099 26,122 PENSION LIABILITY, NET 150,572
150,719 OTHER NON-CURRENT LIABILITIES 21,486 18,124 COMMITMENTS AND
CONTINGENCIES SHAREHOLDERS’ EQUITY: Common stock 212 212 Additional
paid-in capital 436,915 438,721 Retained earnings 254,046 274,243
Common treasury stock, at cost (74,472 ) (74,472 ) Accumulated
other comprehensive loss, net of tax (28,389 ) (36,730 ) Total
Shareholders’ Equity 588,312 601,974 TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,935,676 $ 1,906,799
CIRCOR INTERNATIONAL,
INC.SUMMARY OF ORDERS AND BACKLOG(in
millions)UNAUDITED
Three Months Ended April 1, 2018
April 2, 2017 ORDERS (1) (3) Energy $ 129.8 $ 100.0
Aerospace & Defense 59.8 56.4 Industrial 136.6 27.7
Total orders $ 326.2 $ 184.1
BACKLOG (2) (3)
April 1, 2018 April 2, 2017 Energy $ 224.1 $ 142.8
Aerospace & Defense 165.8 106.2 Industrial 170.6 32.9
Total backlog $ 560.5 $ 281.9
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 for which revenue has not been recognized.Note 3: April 2,
2017 segment amounts restated for Q1 2018 organizational
realignment.
CIRCOR INTERNATIONAL,
INC.SEGMENT INFORMATION(in thousands, except
percentages)UNAUDITED
2017 2018 1ST
QTR 2ND QTR 3RD QTR 4TH
QTR TOTAL 1ST QTR ORDERS
Energy $ 100,012 $ 73,140 $ 84,857 $
118,073 $ 376,082 $ 129,762 Aerospace & Defense 56,416 39,902
45,939 $ 52,043 194,300 59,793 Industrial 27,654
29,889 27,296 46,407
131,246 136,607
Total $ 184,082
$ 142,931 $ 158,092 $ 216,523
$ 701,628 $ 326,162
NET REVENUES Energy $ 76,210 $ 78,276 $ 88,570 $ 96,561 $
339,617 $ 99,972 Aerospace & Defense 41,601 43,304 41,117 $
56,961 182,983 58,477 Industrial 27,397 29,651
30,006 52,056 139,110
117,131
Total $ 145,208 $
151,231 $ 159,693 $ 205,578
$ 661,710 $ 275,580
SEGMENT
OPERATING INCOME Energy $ 6,407 $ 8,170 $ 6,936 $ 8,618 $
30,131 $ 5,696 Aerospace & Defense 3,784 4,374 4,333 10,884
23,375 8,931 Industrial 4,384 4,901 5,675 4,972 19,932 12,948
Corporate expenses (5,479 ) (5,396 ) (5,067 )
(5,802 ) (21,744 ) (7,802 )
Adjusted Operating
Income $ 9,096 $ 12,049 $ 11,877
$ 18,672 $ 51,694 $
19,773
SEGMENT OPERATING MARGIN % Energy 8.4 %
10.4 % 7.8 % 8.9 % 8.9 % 5.7 % Aerospace & Defense 9.1 % 10.1 %
10.5 % 19.1 % 12.8 % 15.3 % Industrial 16.0 % 16.5 %
18.9 % 9.6 % 14.3 % 11.1 %
Adjusted
Operating Margin 6.3 % 8.0 % 7.4 % 9.1 %
7.8 % 7.2 %
CIRCOR INTERNATIONAL,
INC.RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY
USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS(in
thousands, except percentages)UNAUDITED
2017 2018 1ST QTR
2ND QTR 3RD QTR 4TH QTR
TOTAL 1ST QTR NET CASH PROVIDED BY (USED
IN) OPERATING ACTIVITIES $ 16,195 $
2,667 $ (16,854 ) $ 7,629
$ 9,637 $ (147 ) LESS: Capital
expenditures, net of sale proceeds 2,811 2,375
2,318 6,103 13,607
8,141 FREE CASH FLOW $ 13,384 $ 292
$ (19,172 ) $ 1,526 $ (3,970 ) $
(8,288 )
TOTAL DEBT $ 243,000 $
252,856 $ 269,026 $ 795,208
$ 795,208 $ 823,665 LESS: Cash &
cash equivalents 65,656 77,272 75,627
110,356 110,356 123,305
NET DEBT $ 177,344 $ 175,584 $
193,399 $ 684,852 $ 684,852
$ 700,360 TOTAL SHAREHOLDERS' EQUITY $ 415,537 $
438,097 $ 451,885 $ 601,974 $ 601,974 $ 588,312
TOTAL
DEBT AS % OF EQUITY 58 % 58 %
60 % 132 % 132 %
140 % NET DEBT AS % OF EQUITY 43
% 40 % 43 % 114 %
114 % 119 %
CIRCOR INTERNATIONAL,
INC.RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY
USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS(in
thousands, except per share data)UNAUDITED
2017 2018 1ST QTR
2ND QTR 3RD QTR 4TH QTR
TOTAL 1ST QTR NET INCOME (LOSS)
$ 4,773 $ 8,970 $ 3,617 $ (5,571 ) $
11,789 $ (17,441 ) LESS: Restructuring related inventory charges —
— — — — 473 Amortization of inventory step-up — — — 4,300 4,300
6,600 Restructuring charges, net 1,458 3,566 341 697 6,062 9,615
Acquisition amortization 2,552 2,599 2,694 4,697 12,542 11,797
Acquisition depreciation — — — 233 233 1,837 Special charges
(recoveries), net (2,268 ) (5,520 ) 1,978 13,799 7,989 2,831 Income
tax impact (1,137 ) (3,124 ) (1,497 ) (8,279 )
(14,037 ) (7,687 )
ADJUSTED NET INCOME $ 5,378
$ 6,491 $ 7,133 $ 9,876
$ 28,878 $ 8,025
EARNINGS (LOSS) PER COMMON SHARE (Diluted) $ 0.29 $ 0.54 $
0.22 $ (0.32 ) $ 0.70 $ (0.88 ) LESS: Restructuring related
inventory charges — — — — — 0.02 Amortization of inventory step-up
— — — 0.25 0.26 0.33 Restructuring charges, net 0.09 0.21 0.02 0.04
0.36 0.49 Acquisition amortization 0.15 0.16 0.16 0.27 0.74 0.60
Acquisition depreciation — — — 0.01 0.01 0.09 Special charges
(recoveries), net (0.14 ) (0.33 ) 0.12 0.80 0.47 0.14 Income tax
impact (0.07 ) (0.19 ) (0.09 ) (0.48 )
(0.83 ) (0.39 )
ADJUSTED EARNINGS PER SHARE (Diluted)
$ 0.32 $ 0.39 $ 0.43 $
0.57 $ 1.71 $ 0.40
CIRCOR INTERNATIONAL,
INC.RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY
USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS(in
thousands)UNAUDITED
2017 2018 1ST QTR
2ND QTR 3RD QTR 4TH QTR
TOTAL 1ST QTR NET INCOME (LOSS)
$ 4,773 $ 8,970 $ 3,617 $ (5,571 ) $
11,789 $ (17,441 ) LESS: Interest expense, net (1,669 ) (2,184 )
(2,445 ) (4,479 ) (10,777 ) (11,801 ) Depreciation (3,798 ) (3,547
) (3,544 ) (4,401 ) (15,290 ) (7,334 ) Amortization (3,092 ) (3,124
) (3,275 ) (5,256 ) (14,747 ) (12,329 ) (Provision for) benefit
from income taxes (687 ) 724 21
5,618 5,676 5,879
EBITDA
$ 14,019 $ 17,101 $ 12,860 $ 2,947 $ 46,927 $ 8,144 LESS:
Restructuring related inventory charges — — — — — (473 )
Amortization of inventory step-up — — — (4,300 ) (4,300 ) (6,600 )
Restructuring charges, net (1,458 ) (3,566 ) (341 ) (697 ) (6,062 )
(9,615 ) Special (charges) recoveries, net 2,268
5,520 (1,978 ) (13,799 ) (7,989 )
(2,831 )
ADJUSTED EBITDA $ 13,209 $
15,147 $ 15,179 $ 21,743
$ 65,278 $ 27,663
CIRCOR INTERNATIONAL,
INC.
RECONCILIATION OF KEY PERFORMANCE
MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE
TERMS
(in thousands, except
percentages)
UNAUDITED
2017 2018 1ST QTR
2ND QTR 3RD QTR 4TH QTR
TOTAL 1ST QTR GAAP OPERATING INCOME
(LOSS) $ 7,354 $ 11,404 $ 6,864 $ (5,054 )
$ 20,568 $ (13,380 ) LESS: Restructuring related inventory
charges — — — — — 473 Amortization of inventory step-up — — — 4,300
4,300 6,600 Restructuring charges, net 1,458 3,566 341 697 6,062
9,615 Acquisition amortization 2,552 2,599 2,694 4,697 12,542
11,797 Acquisition depreciation — — — 233 233 1,837 Special charges
(recoveries), net (2,268 ) (5,520 ) 1,978
13,799 7,989 2,831
ADJUSTED OPERATING INCOME $ 9,096 $ 12,049
$ 11,877 $ 18,672 $
51,694 $ 19,773
GAAP OPERATING
MARGIN 5.1 % 7.5 % 4.3 % (2.5 )% 3.1 % (4.9 )% LESS:
Restructuring related inventory charges — % — % — % — % — % 0.2 %
Amortization of inventory step-up — % — % — % 2.1 % 0.6 % 2.4 %
Restructuring charges, net 1.0 % 2.4 % 0.2 % 0.3 % 0.9 % 3.5 %
Acquisition amortization 1.8 % 1.7 % 1.7 % 2.3 % 1.9 % 4.3 %
Acquisition depreciation — % — % — % 0.1 % — % 0.7 % Special
charges (recoveries), net (1.6 )% (3.7 )% 1.2 %
6.7 % 1.2 % 1.0 %
ADJUSTED OPERATING
MARGIN 6.3 % 8.0 % 7.4 % 9.1 % 7.8
% 7.2 %
The Company is providing certain combined information related
to the recently acquired Fluid Handling business.
CIRCOR INTERNATIONAL,
INC.SEGMENT INFORMATION - COMBINED(in thousands,
except percentages)UNAUDITED
2017 1ST QTR 2ND
QTR 3RD QTR 4TH QTR
TOTAL ORDERS - Recast
Energy $ 100,012 $ 73,140 $ 84,857 $ 118,073 $ 376,082 Aerospace
& Defense 56,416 39,902 45,939 52,043 194,300 Industrial 27,654
29,889 27,296 46,407
131,246 Total $ 184,082 $ 142,931
$ 158,092 $ 216,523 $
701,628
ORDERS - Fluid Handling Energy $ 23,679 $
16,882 $ 21,401 $ 11,803 $ 73,765 Aerospace & Defense 8,255
24,375 9,716 6,816 49,162 Industrial 77,944 76,866
87,378 60,193 302,381
Total $ 109,878 $ 118,123 $ 118,495
$ 78,812 $ 425,308
ORDERS -
Combined Energy $ 123,690 $ 90,022 $ 106,258 $ 129,876 $
449,846 Aerospace & Defense 64,671 64,277 55,655 58,859 243,462
Industrial 105,598 106,755 114,674
106,601 433,628 Total $ 293,959
$ 261,054 $ 276,587 $ 295,336
$ 1,126,936
NET REVENUES - Recast
Energy $ 76,210 $ 78,276 $ 88,570 $ 96,561 $ 339,617 Aerospace
& Defense 41,601 43,304 41,117 56,961 182,983 Industrial 27,397
29,651 30,006 52,056
139,110 Total $ 145,208 $ 151,231
$ 159,693 $ 205,578 $
661,710
NET REVENUES - Fluid Handling Energy $ 15,546
$ 17,705 $ 17,789 $ 13,663 $ 64,703 Aerospace & Defense 10,728
17,044 11,208 6,918 45,898 Industrial 85,264 83,310
85,604 72,489 326,667
Total $ 111,538 $ 118,059 $ 114,601
$ 93,070 $ 437,268
NET
REVENUES - Combined Energy $ 91,756 $ 95,981 $ 106,359 $
110,224 $ 404,320 Aerospace & Defense 52,329 60,348 52,325
63,879 228,881 Industrial 112,661 112,961
115,610 124,545 465,777 Total $
256,746 $ 269,290 $ 274,294
$ 298,648 $ 1,098,978
Notes:- Items labeled "Recast" represent previously reported
CIRCOR information, adjusted to reflect the impact of our February
28, 2018 organizational realignment- Items labeled "Fluid Handling"
represent the information from the Fluid Handling businesses prior
to their acquisition by CIRCOR on December 10, 2017- Items labeled
"Combined" represent the sum of the Recast and Fluid Handling
information
CIRCOR INTERNATIONAL,
INC.SEGMENT INFORMATION - COMBINED(in thousands,
except percentages)UNAUDITED
2017 1ST QTR 2ND
QTR 3RD QTR 4TH QTR
TOTAL SEGMENT OPERATING INCOME - Recast
Energy $ 6,407 $ 8,170 $ 6,936 $ 8,618 $ 30,131
Aerospace & Defense 3,784 4,374 4,333 10,884 23,375 Industrial
4,384 4,901 5,675 4,972 19,932 Corporate expenses (5,479 )
(5,396 ) (5,067 ) (5,802 ) (21,744 ) Total $
9,096 $ 12,049 $ 11,877 $
18,672 $ 51,694
SEGMENT OPERATING
INCOME - Fluid Handling Energy $ (83 ) $ 1,080 $ 1,761 $ 812 $
3,570 Aerospace & Defense 1,488 3,661 2,201 (367 ) 6,983
Industrial 8,833 7,709 4,365 (1,414 ) 19,493 Corporate expenses —
— — — —
Total $ 10,238 $ 12,450 $ 8,327
$ (969 ) $ 30,046
SEGMENT
OPERATING INCOME - Combined Energy $ 6,324 $ 9,250 $ 8,697 $
9,430 $ 33,701 Aerospace & Defense 5,272 8,035 6,534 10,517
30,358 Industrial 13,217 12,610 10,040 3,558 39,425 Corporate
expenses (5,479 ) (5,396 ) (5,067 ) (5,802 )
(21,744 ) Total $ 19,334 $ 24,499
$ 20,204 $ 17,703 $ 81,740
SEGMENT OPERATING MARGIN - Combined Energy 6.9
% 9.6 % 8.2 % 8.6 % 8.3 % Aerospace & Defense 10.1 % 13.3 %
12.5 % 16.5 % 13.3 % Industrial 11.7 % 11.2 % 8.7 % 2.9 % 8.5 %
Corporate expenses (2.1 )% (2.0 )% (1.8 )% (1.9 )% (2.0 )% Total
7.5 % 9.1 % 7.4 % 5.9 % 7.4 %
Notes:- Items labeled "Recast" represent previously reported
CIRCOR information, adjusted to reflect the impact of our February
28, 2018 organizational realignment- Items labeled "Fluid Handling"
represent the information from the Fluid Handling businesses prior
to their acquisition by CIRCOR on December 10, 2017- Items labeled
"Combined" represent the sum of the Recast and Fluid Handling
information- Segment Operating Margin - Combined represent Segment
Operating Income - Combined divided by Segment Net Revenues
Combined
CIRCOR INTERNATIONAL,
INC.RECONCILIATION OF FLUID HANDLING SEGMENT INFORMATION TO
GAAP OPERATING INCOME(in thousands, except
percentages)UNAUDITED
2017 1ST QTR 2ND
QTR 3RD QTR 4TH QTR
TOTAL FLUID HANDLING GAAP OPERATING INCOME (LOSS) $
4,359 $ 19,738 $ 2,241 $ 3,129 $ 29,467
LESS: Asbestos costs 2,690 2,517 2,379 1,274 8,860 Impairment
charges — — — — Exited businesses 65 (26 ) (47 ) — (8 ) Acquisition
amortization 796 810 818 — 2,424 Restructuring and other special
charges (recoveries) 2,328 (10,589 ) 636 (5,372 ) (12,997 ) Stay
bonus — — 2,300 —
2,300
FLUID HANDLING ADJUSTED OPERATING INCOME
$ 10,238 $ 12,450 $ 8,327
$ (969 ) $ 30,046
Notes- Amounts relate to Fluid Handling results prior to
December 10, 2017, the date of CIRCOR's acquisition.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180501006875/en/
CIRCOR InternationalRajeev Bhalla, 781-270-1200Executive Vice
President & Chief Financial Officer
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