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 March 31,
2019.
First-Quarter 2019 Highlights
- Orders of $280 million, down 14% on a
reported basis and down 6% on an organic basis
- Orders in A&D segment grew nearly
50% year over year
- Revenue of $270 million, down 2% on a
reported basis and up 8% on an organic basis
- GAAP Operating Margin of 2.9%; GAAP
Loss per Share of $(0.42)
- Adjusted Operating Margin of 7.6%;
Adjusted Earnings per Share of $0.38
- Fluid Handling integration remains on
track
- Completed sale of Reliability Services
business for cash proceeds of $85 million
- Debt pay down of $53 million
“We reported solid first-quarter 2019 results with 8% organic
revenue growth,” said Scott Buckhout, President and Chief Executive
Officer. “All three of our business segments grew in the quarter
and the outlook for the majority of our end-markets remains
positive. We anticipate improving results through the year as we
benefit from higher volume, price increases and additional
integration savings.
“During the quarter we made significant progress transitioning
production to our low-cost manufacturing facilities around the
world,” continued Mr. Buckhout. “Our Refinery Valve product line is
ramping up in India; several Aerospace platforms were moved to
Morocco; and our low-cost facility in Monterrey is now the primary
source of production for Distributed Valves in North America.
“De-levering the Company remains a top priority. We reduced our
debt by $53 million in the first quarter,” said Mr. Buckhout. “We
expect strong free cash flow for the year and we continue to
evaluate the sale of non-core businesses to further simplify the
Company and accelerate the reduction of outstanding debt.
“Looking ahead, we continue to focus on creating long-term value
for shareholders by investing in growth, expanding margins,
generating strong free cash flow, and de-levering the Company,”
concluded Mr. Buckhout.
Second-Quarter 2019 GuidanceFor the second quarter of
2019, CIRCOR expects revenue in the range of $270 million to $280
million, and GAAP loss per share in the range of $(0.13) to
$(0.03), which reflects acquisition-related amortization expense of
$(0.49) and other special and restructuring charges of $(0.04) to
$(0.02). Excluding the impact of amortization, special and
restructuring (charges) gains, adjusted EPS is expected to be in
the range of $0.40 to $0.48 per share. Presentation slides that
provide supporting information to this guidance and first-quarter
results are posted on the “Investors” section of the Company’s
website, http://investors.circor.com, and will be discussed during
the conference call at 9:00 a.m. ET tomorrow, April 26, 2019.
Selected Consolidated Results
(unaudited)
($ millions except EPS) Q1 2019
Q1 2018 Change Revenue $ 270.4 $
275.6 (2)%
Revenue excluding divested
business1 $ 267.3
$
257.0 4%
GAAP Operating (Loss) Income $ 7.9 $
(13.4) N/M
Adjusted Operating Income2 $
20.2 $ 19.8 1%
GAAP Operating Margin 2.9%
(4.9)% N/M
Adjusted Operating Margin2 7.6%
7.2% 40 bps
GAAP (Loss) Earnings Per Share (Diluted)
$ (0.42) $ (0.88) N/M
Adjusted Earnings Per Share
(Diluted)2 $ 0.38 $ 0.40 (8)%
Operating
Cash Flow $ (21.7) $ (0.1) N/M
Free Cash
Flow3 $ (25.5) $ (8.3) N/M
Orders
$ 279.6 $ 326.2 (14)%
Orders excluding divested
business1 $ 275.5
$
304.4 (9)%
Segment Results
($ millions) Q1 2019 Q1
2018 Change Energy
Revenue $ 98.4 $ 100.0 (2)%
Revenue
excluding divested business1 $ 95.3
$
85.2 12%
Segment Operating Income $ 6.8 $ 5.7
19%
Segment Operating Margin 7.1% 5.7% 140 bps
Orders $ 67.8 $ 129.8 (48)%
Orders
excluding divested business1 $ 63.7 $
112.9 (44)%
Aerospace & Defense Revenue
$ 61.2 $ 58.5 5%
Segment Operating Income
$ 9.4 $ 8.9 6%
Segment Operating Margin
15.3% 15.3% 0 bps
Orders $ 88.1 $ 59.8
47%
Industrial Revenue $ 110.7 $
117.1 (5)%
Revenue excluding divested business1
$ 110.7 $ 113.2
(2)%
Segment Operating Income $ 10.8 $ 12.9 (16)%
Segment Operating Margin 9.7% 11.1% (140) bps
Orders $ 123.7 $ 136.6 (9)%
Orders
excluding divested business1
$
123.7 $ 131.8 (6)%
1. Orders and revenue excluding divested businesses is a
non-GAAP measure and is calculated by subtracting the orders and
revenues generated by the divested businesses during the periods
prior to their divestiture from the reported orders and revenues.2.
Adjusted Consolidated and Segment Results for Q1 2019 exclude
non-cash acquisition-related intangible amortization, special and
restructuring charges totaling $12.3 million ($16.0 million, net of
tax). These charges include: (i) $13.2 million charge for non-cash
acquisition-related intangible amortization and depreciation
expense (ii) $2.8 million for restructuring-related inventory
charges (iii) $1.8 million loss from the business divested in
January (iv) $1.1 million of other special and restructuring
charges, and (v) a gain of $6.6 million in the quarter related to
the sale of businesses. 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.3. 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, April 26, 2019. 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, pro forma combined amounts and pro
forma organic growth 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 reflect our
ongoing business and facilitate 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.
- Due to the significance of recently
sold businesses and to provide a comparison of changes in our
orders and revenue, we also discuss these changes on an “organic”
basis. Organic is calculated assuming the divestitures were
completed on January 1, 2018 and excluding the impact of changes in
foreign currency exchange rates.
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 second-quarter 2019 guidance, our future performance,
including realization of cost reductions from restructuring
activities and expected synergies, plans to reduce our outstanding
debt and our corporate priorities. 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,
divestiture or restructuring strategies, including our integration
of the Fluid Handling business; changes in industry standards,
trade policies 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(in
thousands, except per share data)(UNAUDITED)
Three Months Ended March 31, 2019
April 1, 2018 Net revenues $ 270,395 $ 275,580
Cost of revenues 196,526 199,276 GROSS PROFIT 73,869
76,304 Selling, general and administrative expenses 69,719 77,238
Special and restructuring (recoveries) charges, net (3,779 ) 12,446
OPERATING INCOME 7,929 (13,380 ) Other expense
(income): Interest expense, net 13,179 11,801 Other (income)
expense, net (1,913 ) (1,861 ) TOTAL OTHER EXPENSE, NET 11,266
9,940 LOSS BEFORE INCOME TAXES (3,337 ) (23,320 )
Provision for (benefit from) income taxes 5,095 (5,879 ) NET
LOSS $ (8,432 ) $ (17,441 ) Loss per common share: Basic $ (0.42 )
$ (0.88 ) Diluted $ (0.42 ) $ (0.88 ) Weighted average number of
common shares outstanding: Basic 20,195 19,806 Diluted 20,195
19,806
CIRCOR INTERNATIONAL,
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(in thousands)(UNAUDITED)
Three Months Ended OPERATING ACTIVITIES
March 31, 2019 April 1, 2018 Net Loss $
(8,432 ) $ (17,441 ) Adjustments to reconcile net loss to net cash
provided by operating activities: Depreciation 5,944 7,334
Amortization 12,906 12,329 Bad debt expense 109 261 Loss on write
down of inventory 3,043 963 Amortization of inventory fair value
step-up — 6,600 Compensation expense for share-based plans 1,422
1,365 Amortization of inventory fair value step-up — 881 Loss on
sale or write-down of property, plant and equipment — 1,284 Gain on
sale of business (6,569 ) — Changes in operating assets and
liabilities, net of effects of acquisition and divestitures: Trade
accounts receivable (5,758 ) 22,038 Inventories (1,108 ) (14,850 )
Other current assets and liabilities (23,243 ) (20,909 ) Net cash
used in operating activities (21,686 ) (145 )
INVESTING
ACTIVITIES Additions to property, plant and equipment (3,879 )
(8,234 ) Proceeds from the sale of property, plant and equipment 28
93 Proceeds from the sale of business, net 83,321 —
Net cash provided by (used in) investing activities 79,470
(8,141 )
FINANCING ACTIVITIES Proceeds from long-term debt
87,400 71,950 Payments of short-term and long-term debt (140,500 )
(44,106 ) Proceeds from the exercise of stock options — 301 Return
of cash to Fluid Handling Seller — (7,905 ) Net cash (used
in) provided by financing activities (53,100 ) 20,240 Effect
of exchange rate changes on cash, cash equivalents and restricted
cash 426 956 INCREASE IN CASH, CASH EQUIVALENTS, AND
RESTRICTED CASH 5,110 12,910 Cash, cash equivalents, and restricted
cash at beginning of period 69,525 112,293 CASH, CASH
EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD $ 74,635 $
125,203
CIRCOR INTERNATIONAL,
INC.CONDENSED CONSOLIDATED BALANCE SHEETS(in
thousands, except share and per share
data)(UNAUDITED)
March 31, 2019 December 31,
2018 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 73,619
$ 68,517 Trade accounts receivable, less allowance for doubtful
accounts 188,500 183,552 Inventories 217,991 217,378 Prepaid
expenses and other current assets 89,904 90,659 Assets held for
sale 4,623 87,940 Total Current Assets 574,637
648,046 PROPERTY, PLANT AND EQUIPMENT, NET 198,148 201,799 OTHER
ASSETS: Goodwill 476,562 459,205 Intangibles, net 422,302 441,302
Deferred income taxes 25,632 28,462 Other assets 35,483
12,798 TOTAL ASSETS $ 1,732,764 $ 1,791,612 LIABILITIES AND
SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $
122,277 $ 123,881 Accrued expenses and other current liabilities
99,771 107,312 Accrued compensation and benefits 27,251 33,878
Liabilities held for sale — 11,141 Current portion of long-term
debt — 7,850 Total Current Liabilities 249,299
284,062 LONG-TERM DEBT 733,666 778,187 DEFERRED INCOME TAXES 33,780
33,932 PENSION LIABILITY, NET 146,854 150,623 OTHER NON-CURRENT
LIABILITIES 37,832 15,815 SHAREHOLDERS’ EQUITY 531,333
528,993 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,732,764
$ 1,791,612
CIRCOR INTERNATIONAL,
INC.SUMMARY OF ORDERS AND BACKLOG(in
millions)UNAUDITED
Three Months Ended March 31, 2019
April 1, 2018 ORDERS (1) Energy $ 67.8
$ 129.8 Aerospace & Defense 88.1 59.8 Industrial 123.7
136.6 Total orders $ 279.6 $ 326.2
BACKLOG (2)
March 31, 2019 April 1, 2018 Energy $ 140.3 $ 224.1
Aerospace & Defense 206.5 165.8 Industrial 174.2 170.6
Total backlog $ 521.0 $ 560.5
Note 1: Orders do not include the foreign exchange impact due to
the re-measurement of customer order backlog amounts denominated in
foreign currencies. Q1 2019 and 2018 orders include $4.1 million
and $21.7 million, respectively, related to divested
businesses.Note 2: Backlog includes unshipped customer orders for
which revenue has not been recognized. Backlog at Q1 2018 includes
$25.6 million related to divested businesses.
CIRCOR INTERNATIONAL,
INC.SEGMENT INFORMATION(in thousands, except
percentages)UNAUDITED
2018 2019 1ST QTR
2ND QTR 3RD QTR 4TH
QTR TOTAL 1ST QTR
ORDERS
Energy $ 129,762 $ 113,171 $ 110,987 $ 97,990 $ 451,910 $
67,770 Aerospace & Defense 59,793 59,441 81,533 76,702 277,469
88,107 Industrial 136,607 136,746
114,876 121,886
510,115 123,746
Total $
326,162 $ 309,358 $
307,396 $ 296,578 $
1,239,494 $ 279,623
NET
REVENUES Energy $ 99,972 $ 112,804 $ 121,023 $ 117,433 $
451,232 $ 98,417 Aerospace & Defense 58,477 57,500 57,757
63,283 237,017 61,240 Industrial 117,131
131,064 118,734 120,647
487,576 110,738
Total $ 275,580 $ 301,368
$ 297,514 $ 301,363
$ 1,175,825 $ 270,395
SEGMENT OPERATING INCOME Energy $ 5,696 $ 9,242 $ 9,163 $
9,396 $ 33,497 $ 6,783 Aerospace & Defense 8,931 6,992 8,709
11,415 36,047 9,374 Industrial 12,948 15,037 14,609 14,746 57,340
10,787 Corporate expenses (7,802 ) (6,448 )
(8,034 ) (8,015 ) (30,299 )
(6,705 )
Adjusted Operating Income $ 19,773
$ 24,823 $ 24,447
$ 27,542 $ 96,585
$ 20,239
SEGMENT OPERATING MARGIN %
Energy 5.7 % 8.2 % 7.6 % 8.0 % 7.4 % 6.9 % Aerospace & Defense
15.3 % 12.2 % 15.1 % 18.0 % 15.2 % 15.3 % Industrial 11.1 % 11.5 %
12.3 % 12.2 % 11.8 % 9.7 %
CIRCOR Adjusted Operating Margin
7.2 % 8.2 % 8.2 % 9.1 % 8.2 % 7.5 %
SEGMENT OPERATING
MARGIN % EXCLUDING DIVESTITURES Energy 6.7 % 7.5 % 6.0 % 7.8 %
7.0 % 7.1 % Aerospace & Defense 15.3 % 12.2 % 15.1 % 18.0 %
15.2 % 15.3 % Industrial 11.4 % 11.9 % 12.8 % 12.7 % 12.2 % 9.7 %
CIRCOR Adjusted Operating Margin Excluding Divestitures 7.7
% 8.2 % 7.9 % 9.3 % 8.3 % 7.6 %
CIRCOR INTERNATIONAL, INC.
SUPPLEMENTAL INFORMATION REGARDING DIVESTED BUSINESSES
(in thousands) UNAUDITED
2018 2019
DIVESTED
BUSINESSES
1st QTR 2nd QTR 3rd
QTR 4th QTR Total
1st QTR
ORDERS Energy $ 16,891 $ 18,389 $
19,145 $ 15,451 $ 69,875 $ 4,104 Industrial 4,848
4,484 2,302 4,796
16,430 — CIRCOR $ 21,738
$ 22,873 $ 21,446
$ 20,247 $ 86,305
$ 4,104
NET REVENUES Energy $ 14,731 $ 17,419
$ 16,579 $ 16,885 $ 65,613 $ 3,106 Industrial 3,897
1,499 2,070 3,846
11,312 — CIRCOR $ 18,628
$ 18,918 $ 18,649
$ 20,731 $ 76,925
$ 3,106
SEGMENT OPERATING INCOME Energy $ 8 $
2,085 $ 2,905 $ 1,597 $ 6,596 $ — Industrial 79
(427
)
(371
)
(78
)
(798
)
— CIRCOR $ 87 $ 1,658
$ 2,534 $ 1,519
$ 5,798 $ —
CIRCOR
INTERNATIONAL, INC. RECONCILIATION OF KEY PERFORMANCE
MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE
TERMS (in thousands, except percentages)
UNAUDITED 2018 2019
1ST QTR 2ND QTR 3RD
QTR 4TH QTR TOTAL
1ST QTR NET CASH (USED IN) PROVIDED BY
OPERATING ACTIVITIES $ (145 )
$ (465 ) $
24,073 $ 30,531
$ 53,994 $ (21,686 ) LESS:
Capital expenditures, net of sale proceeds 8,141
3,563 5,119 6,534
23,357 3,851 FREE
CASH FLOW $ (8,286 ) $ (4,028 ) $
18,954 $ 23,997 $ 30,637
$ (25,537 )
GROSS DEBT $
823,665 $ 827,629 $ 831,613
$ 807,050 $ 807,050 $
753,950 LESS: Cash & cash equivalents 123,305
69,030 71,334
68,517 68,517
73,619 GROSS DEBT, NET OF CASH $ 700,360
$ 758,599 $ 760,279
$ 738,533 $ 738,533
$ 680,331 TOTAL SHAREHOLDERS' EQUITY $ 592,096
$ 573,992 $ 574,171 $ 528,993 $ 528,993 $ 531,333
GROSS
DEBT AS % OF EQUITY 139 % 144 %
145 % 153 % 153 %
142 % GROSS DEBT, NET OF CASH AS % OF EQUITY
118 % 132 % 132 %
140 % 140 % 128 %
CIRCOR INTERNATIONAL, INC. RECONCILIATION OF KEY
PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING
PRINCIPLE TERMS (in thousands, except per share data)
UNAUDITED 2018
2019 1ST QTR 2ND QTR
3RD QTR 4TH QTR
TOTAL 1ST QTR NET INCOME (LOSS)
$ (17,441 ) $ 5,902 $ (6,841 )
$ (21,005 ) $ (39,385 ) $ (8,432 ) LESS:
Restructuring related inventory charges 473 1,067 — 864 2,404 2,818
Amortization of inventory step-up 6,600 — — — 6,600 — Restructuring
charges, net 9,615 844 1,348 944 12,751 863 Acquisition
amortization 11,797 11,767 11,733 12,012 47,309 12,148 Acquisition
depreciation 1,837 1,735 1,742 1,735 7,049 1,123 Special
(recoveries) charges, net 2,831 1,156 1,408 5,692 11,087 (4,641 )
Income tax impact (7,687 ) (11,056 )
967 12,124 (5,652 )
3,766
ADJUSTED NET INCOME $ 8,025
$ 11,415 $ 10,357
$ 12,366 $ 42,163
$ 7,645
EARNINGS (LOSS) PER COMMON SHARE
(Diluted) $ (0.88 ) $ 0.30 $ (0.34 ) $ (1.05 ) $ (1.97 ) $
(0.42 ) LESS: Restructuring related inventory charges 0.02 0.05 —
0.04 0.12 0.14 Amortization of inventory step-up 0.33 — — — 0.33 —
Restructuring charges, net 0.49 0.04 0.07 0.05 0.64 0.04
Acquisition amortization 0.60 0.59 0.59 0.60 2.37 0.60 Acquisition
depreciation 0.09 0.09 0.09 0.09 0.35 0.06 Special (recoveries)
charges, net 0.14 0.06 0.07 0.29 0.55 (0.23 ) Income tax impact
(0.39 ) (0.55 ) 0.05
0.61 (0.28 ) 0.19
ADJUSTED EARNINGS PER SHARE (Diluted) $ 0.40
$ 0.57 $ 0.52 $
0.62 $ 2.11 $ 0.38
CIRCOR INTERNATIONAL, INC. RECONCILIATION OF KEY
PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING
PRINCIPLE TERMS (in thousands) UNAUDITED
2018 2019 1ST QTR
2ND QTR 3RD QTR
4TH QTR TOTAL
1ST QTR NET INCOME (LOSS) $ (17,441 ) $
5,902 $ (6,841 ) $ (21,005 )
$ (39,384 ) $ (8,432 ) LESS: Interest expense, net (11,801 )
(13,755 ) (14,100 ) (13,257 ) (52,913 ) (13,179 ) Depreciation
(7,334 ) (7,157 ) (7,065 ) (7,198 ) (28,754 ) (5,944 ) Amortization
(12,329 ) (12,282 ) (12,234 ) (12,410 ) (49,255 ) (12,636 )
(Provision for) benefit from income taxes 5,879
7,646 (2,537 ) (14,278 )
(3,290 ) (5,095 )
EBITDA $ 8,144
$ 31,450 $ 29,095 $ 26,138 $ 94,828 $ 28,422 LESS: Restructuring
related inventory charges (473 ) (1,067 ) — (864 ) (2,404 ) (2,818
) Amortization of inventory step-up (6,600 ) — — — (6,600 ) —
Restructuring charges, net (9,615 ) (844 ) (1,348 ) (944 ) (12,751
) (863 ) Special recoveries (charges), net (2,831 )
(1,156 ) (1,408 ) (5,692 )
(11,087 ) 4,641
ADJUSTED EBITDA
$ 27,663 $ 34,517 $
31,851 $ 33,638 $ 127,669
$ 27,462
CIRCOR
INTERNATIONAL, INC. RECONCILIATION OF KEY PERFORMANCE
MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE
TERMS (in thousands, except percentages)
UNAUDITED 2018 2019
1ST QTR 2ND QTR 3RD
QTR 4TH QTR TOTAL
1ST QTR GAAP OPERATING INCOME (LOSS) $
(13,380 ) $ 8,252 $ 8,216
$ 6,296 $ 9,384 $ 7,929 LESS: Restructuring related
inventory charges 473 1,067 — 864 2,404 2,818 Amortization of
inventory step-up 6,600 — — — 6,600 — Restructuring charges, net
9,615 844 1,348 944 12,751 863 Acquisition amortization 11,797
11,767 11,733 12,012 47,309 12,148 Acquisition depreciation 1,837
1,735 1,742 1,735 7,049 1,123 Special (recoveries) charges, net
2,831 1,156 1,408
5,692 11,087
(4,641 )
ADJUSTED OPERATING INCOME $ 19,773
$ 24,821 $ 24,447
$ 27,543 $ 96,584
$ 20,240
GAAP OPERATING MARGIN (4.9 )% 2.7 %
2.8 % 2.1 % 0.8 % 2.9 % LESS: Restructuring related inventory
charges 0.2 % 0.4 % — % 0.3 % 0.2 % 1.0 % Amortization of inventory
step-up 2.4 % — % — % — % 0.6 % — % Restructuring charges, net 3.5
% 0.3 % 0.5 % 0.3 % 1.1 % 0.3 % Acquisition amortization 4.3 % 3.9
% 3.9 % 4.0 % 4.0 % 4.5 % Acquisition depreciation 0.7 % 0.6 % 0.6
% 0.6 % 0.6 % 0.4 % Special (recoveries) charges, net 1.0 %
0.4 % 0.5 % 1.9 %
0.9 % (1.7 )%
ADJUSTED OPERATING MARGIN 7.2 %
8.2 % 8.2 % 9.1 % 8.2 % 7.5 % Impact of Divestitures 0.5 %
— % (0.3 )% 0.2 %
0.1 % 0.1 %
ADJUSTED OPERATING MARGIN EXCLUDING
DIVESTITURES 7.7 % 8.2 % 7.9 %
9.3 % 8.3 % 7.6 %
CIRCOR INTERNATIONAL, INC.Q1
2019 Organic Growth Calculations(in thousands, except
percentages)UNAUDITED
Industrial Energy Aerospace
& Defense CIRCOR ORDERS $
% $ % $
% $ % Q1 2018 $
136.6 $ 129.8 $ 59.8 $ 326.2 Divestitures (4.8 ) (16.9 )
0 (21.7 ) Q1 2018 Excluding Divestitures 131.8 112.9
59.8 304.4 Organic (1.3 ) -1 % (48.0 )
-42
% 29.7 50 % (19.5 ) -6 % Acquisition / Divestiture 0 0 % 4.1 4 % 0
0 % 4.1 1 % FX (6.8 ) -5 % (1.3 ) -1 % (1.4 ) -2 %
(9.4 ) -3 % Total Change Excluding Divestitures (8.0 ) -6 % (45.1 )
-40
% 28.3 47 % (24.8 ) -8 % Q1 2019 $ 123.7 $ 67.8
$ 88.1 $ 279.6
Industrial Energy
Aerospace & Defense CIRCOR NET REVENUE
$ % $ % $ % $
% Q1 2018
$
117.1
$
100
$
58.5
$
275.6
Divestitures (3.9 ) (14.7 ) 0 (18.6 )
Q1 2018 Excluding Divestitures 113.2 85.2 58.5 257.0 Organic
3.8 3 % 12.1 14 % 4.0 7 % 20.0 8 % Acquisition / Divestiture 0 0 %
3.1 4 % 0 0 % 3.1 1 % FX (6.3 ) -6 % (2.1 ) -2 % (1.3
) -2 % (9.6 ) -4 % Total Change Excluding Divestitures (2.5
) -2 % 13.2
15
% 2.7 5 % 13.5 5 % Q1 2019 $ 110.7 $ 98.4 $
61.2 $ 270.4
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190425006039/en/
David F. MullenSenior Vice President FinanceCIRCOR
International(781) 270-1200
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