Well positioned for second half revenue growth and margin
expansion
CIRCOR International, Inc. (NYSE: CIR), one of the world’s
leading providers of mission critical flow control products and
services for the Industrial and Aerospace & Defense markets,
today announced GAAP and adjusted financial results for the second
quarter ended July 4, 2021.
Second Quarter 2021 Overview:
- Orders of $210 million, up 9% reported and 4% organically
- Industrial orders of $156 million, up 34% reported and 27%
organically due to strength across almost all end markets and
regions
- Aerospace & Defense orders of $54 million, down (29)%
reported and (31)% organically due to timing of large Defense
orders
- Revenue of $190 million, up 2% reported and down (2)%
organically
- Industrial revenue of $130 million, up 5% reported and down
(1)% organically
- Aerospace & Defense revenue of $61 million, down (2)%
reported and (5)% organically
- GAAP operating margin of (2.6)%; Adjusted operating margin of
7.7%, down 80 bps
- GAAP loss per share of $(0.77); Adjusted earnings per share of
$0.35, up 59%
- GAAP operating cash flow of $11 million; Free cash flow of $8
million, 115% of adj. net income
- Total debt reduced by $14 million versus prior quarter driven
by 2Q'21 free cash flow performance
CIRCOR President and CEO Scott Buckhout said, "Our team
delivered another solid quarter highlighted by 27% organic orders
growth in our Industrial business and strong free cash flow
conversion of 115%. Revenue and earnings per share were both in
line with our expectations and we are encouraged by the pace of
recovery across our Industrial and Aerospace & Defense end
markets. Our performance in the first half positions CIRCOR for a
strong second half and achievement of our 2021 commitments."
Mr. Buckhout continued, "In addition to our financial
performance, we continue to make progress on our strategic
priorities. We launched 21 products in the first half of 2021 and
remain on track to deliver 45 new products in 2021. In an effort to
build on our simplification program and accelerate sustainable
margin expansion, we kicked off 80/20 in three of our largest
Industrial businesses. And finally, we used our free cash flow
generated in the quarter to pay down debt. We expect greater than
one turn of leverage improvement in 2021."
Mr. Buckhout concluded, "Based on our strong orders performance
in the 1st half, and our $436 million backlog, we’re confident that
we will deliver on our 2021 organic revenue and adjusted EPS
guidance provided in May. Going forward, we continue to focus on
creating long-term value for shareholders by positioning the
Company for growth, expanding margins, generating strong free cash
flow, and de-levering the balance sheet."
3Q'21 Guidance Update
In the third quarter of 2021, CIRCOR expects reported revenue to
increase 10 to 12% and organic revenue to increase 8 to 10%. On a
reported basis, Industrial revenue is expected to grow 7 to 11%
driven by increased deliveries across end markets and regions.
Aerospace & Defense revenue is expected to increase 12 to 15%
driven by the timing of large Defense shipments and favorable
year-over-year comparisons in our Commercial end markets. In
addition, CIRCOR expects adjusted EPS of $0.55 to $0.60 (+53% to
67% versus prior year) and free cash flow conversion of 120 to 140%
($13 to $17 million).
2021 Guidance
For the full year of 2021, CIRCOR reiterated its guidance of
organic revenue growth of 2 to 4%, Adjusted EPS of $2.10 to $2.30,
and adjusted net income to free cash flow conversion of 85% to
95%.
Presentation slides that provide supporting information to this
guidance and second-quarter results are posted on the “Investors”
section of the Company’s website and will be discussed during the
conference call at 9:00 a.m. ET today.
Conference Call Information
CIRCOR International will hold a conference call to review its
financial results at 9:00 a.m. ET today, August 10, 2021. To listen
to the live conference call and view the accompanying presentation
slides, please visit “Webcasts & Presentations” in the
“Investors” portion of CIRCOR’s website. The live call also can be
accessed by dialing (877) 407-5790 or (201) 689-8328. Participants
are encouraged to dial in to the call at least 15 minutes prior to
the start time. The webcast will be archived on the Company’s
website for one year.
Selected Preliminary Consolidated Results
($ millions except EPS)
Q2 2021
Q2 2020
Change
Q2 YTD 2021
Q2 YTD 2020
Change
Orders
$
210.2
$
192.6
9
%
$
436.9
$
401.1
9
%
Orders - excluding divested
businesses1
210.2
192.6
9
%
436.9
396.7
10
%
Revenue
$
190.3
$
186.1
2
%
$
371.0
$
378.3
-2
%
Revenue - excluding divested
businesses1
190.3
186.1
2
%
371.0
373.4
-1
%
GAAP operating (loss) income
(4.9
)
(1.4
)
-250
%
(4.6
)
(74.8
)
94
%
Adjusted operating income2
14.6
15.9
-8
%
27.1
27.0
—
%
GAAP operating margin
(2.6
)
%
(0.7
)
%
-190 bps
(1.2
)
%
(19.8
)
%
1860 bps
Adjusted operating margin2
7.7
%
8.5
%
-80 bps
7.3
%
7.1
%
20 bps
Adjusted operating margin ex
divestitures2
7.7
%
8.5
%
-80 bps
7.3
%
7.2
%
10 bps
GAAP loss per share (diluted)
$
(0.77
)
$
(1.68
)
54
%
$
(1.13
)
$
(5.66
)
80
%
Adjusted earnings per share
(diluted)2
$
0.35
$
0.22
59
%
$
0.60
$
0.42
43
%
Operating cash flow
10.9
(24.9
)
144
%
(6.7
)
(48.8
)
86
%
Free cash flow3
8.3
(28.4
)
129
%
(12.8
)
(55.8
)
77
%
Segment Results
($ in millions)
Q2 2021
Q2 2020
Change
Aerospace & Defense
Orders
$
54.2
$
76.6
-29
%
Revenue
$
60.8
$
62.2
-2
%
Segment operating income
12.1
13.1
-8
%
Segment operating margin
19.9
%
21.1
%
-120 bps
Industrial
Orders
$
156.0
$
116.0
34
%
Revenue
$
129.6
$
123.8
5
%
Segment operating income
10.4
12.4
-16
%
Segment operating margin
(adjusted)
8.0
%
10.0
%
-200 bps
- Orders and revenue excluding divested businesses are non-GAAP
measures and are calculated by subtracting the orders and revenues
generated by the divested businesses during the periods prior to
their divestiture from reported orders and revenues. Divested
businesses include Instrumentation & Sampling (all Industrial)
which was sold during Q1 2020.
- Adjusted consolidated and segment results for Q2 2021 exclude
net loss from discontinued operations of $0.9 million and net loss
from non-cash acquisition-related intangible amortization, special
and restructuring charges totaling $19.6 million ($21.9 million
after tax). These charges include: (i) $11.8 million for non-cash
acquisition-related intangible amortization and depreciation
expense; (ii) $3.0 million of special charges related to the Heater
& Control Valve divestiture; (iii) $3.8 million of other
special and restructuring charges; and (iv) $1.0 million of
restructuring related inventory charges. Adjusted consolidated and
segment results for Q2 2020 exclude net loss from discontinued
operations of $43.8 million and net loss from non-cash
acquisition-related intangible amortization, special and
restructuring charges totaling $17.3 million ($5.3 million income,
net of tax). These charges include: (i) $11.7 million for non-cash
acquisition-related intangible amortization and depreciation
expense; (ii) $4.6 million of professional fees associated with an
unsolicited tender offer to acquire all outstanding shares of the
Company’s common stock; and (iii) $1.0 million of other special and
restructuring charges.
- 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.
Use of Non-GAAP Financial Measures
Adjusted operating income, adjusted operating margin, adjusted
net income, adjusted earnings per share (diluted), EBITDA, adjusted
EBITDA, net debt, free cash flow and organic growth (and such
measures further excluding discontinued operations) 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.
We exclude the results of discontinued operations.
We exclude goodwill impairment charges. We exclude these costs
because we do not believe they are indicative of our normal
operating costs.
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 completed prior to July 4, 2021 were
completed on January 1, 2020 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 peers. 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 press release.
Safe Harbor Statement
This press release contains certain statements that are
“forward-looking statements” as that term is defined under the
Private Securities Litigation Reform Act of 1995 (the “Act”). The
words “may,” “hope,” “should,” “expect,” “plan,” “anticipate,”
“intend,” “believe,” “estimate,” “predict,” “potential,”
“continue,” and other expressions, which are predictions of or
indicate future events and trends and which do not relate to
historical matters, identify forward-looking statements, although
not all forward-looking statements are accompanied by such words.
We believe that it is important to communicate our future
expectations to our stockholders, and we, therefore, make
forward-looking statements in reliance upon the safe harbor
provisions of the Act. However, there may be events in the future
that we are not able to accurately predict or control and our
actual results may differ materially from the expectations we
describe in our forward-looking statements. Forward-looking
statements, including statements about outlook for the fourth
quarter, the expected and potential direct or indirect impacts of
the COVID-19 pandemic on our business, the realization of cost
reductions from restructuring activities and expected synergies,
the number of new product launches and future cash flows from
operating activities, involve known and unknown risks,
uncertainties and other factors, which may cause our actual
results, performance or achievements to differ materially from
anticipated future results, performance or achievements expressed
or implied by such forward-looking statements. Factors that could
cause or contribute to such differences include, but are not
limited to: the duration and severity of the COVID-19 pandemic and
its impact on the global economy; changes in the price of and
demand for oil and gas in both domestic and international markets;
any adverse changes in governmental policies; variability of raw
material and component pricing; changes in our suppliers’
performance; fluctuations in foreign currency exchange rates;
changes in tariffs or other taxes related to doing business
internationally; our ability to hire and retain key personnel; our
ability to operate our manufacturing facilities at efficient levels
including our ability to prevent cost overruns and reduce costs;
our ability to generate increased cash by reducing our working
capital; our prevention of the accumulation of excess inventory;
our ability to successfully implement our divestiture;
restructuring or simplification strategies; fluctuations in
interest rates; our ability to successfully defend product
liability actions; as well as the uncertainty associated with the
current worldwide economic conditions and the continuing impact on
economic and financial conditions in the United States and around
the world, including as a result of COVID-19, natural disasters,
terrorist attacks and other similar matters. We advise you to read
further about these and other risk factors set forth in Part II,
Item 1A of this Quarterly Report on Form 10-Q and Part I, Item 1A,
“Risk Factors” of our Annual Report on Form 10-K for the year ended
December 31, 2020, which is filed with the Securities and Exchange
Commission ("SEC") and is available on the SEC's website at
www.sec.gov. 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 is one of the world’s leading providers of
mission critical flow control products and services for the
Industrial and Aerospace & Defense markets. The Company has a
product portfolio of market-leading brands serving its customers’
most demanding applications. CIRCOR markets its solutions directly
and through various sales partners to more than 14,000 customers in
approximately 100 countries. The Company has a global presence with
approximately 3,200 employees and is headquartered in Burlington,
Massachusetts. For more information, visit the Company’s investor
relations website at http://investors.circor.com.
CIRCOR INTERNATIONAL,
INC.
Condensed Consolidated
Statements of Operations
(in thousands, except per
share data) (unaudited)
Three Months Ended
Six Months Ended
July 4, 2021
June 28, 2020
July 4, 2021
June 28, 2020
Net revenues
$
190,346
$
186,066
$
371,001
$
378,279
Cost of revenues
130,460
127,105
255,034
259,275
Gross profit
59,886
58,961
115,967
119,004
Selling, general and administrative
expenses
58,023
54,738
114,526
114,296
Goodwill impairment charge
—
—
—
116,182
Special and restructuring charges
(recoveries), net
6,803
5,607
5,995
(36,685
)
Operating income (loss)
(4,940
)
(1,384
)
(4,554
)
(74,789
)
Other expense (income), net:
Interest expense, net
7,957
8,486
16,327
17,497
Other expense (income), net
(1,173
)
2,144
(2,676
)
(536
)
Total other expense, net
6,784
10,630
13,651
16,961
(Loss) income from continuing operations
before income taxes
(11,724
)
(12,014
)
(18,205
)
(91,750
)
Provision for (benefit from) income
taxes
2,961
(21,769
)
3,360
(13,395
)
(Loss) income from continuing operations,
net of tax
(14,685
)
9,755
(21,565
)
(78,355
)
Income (loss) from discontinued
operations, net of tax
(878
)
(43,847
)
(1,117
)
(34,685
)
Net loss
$
(15,563
)
$
(34,092
)
$
(22,682
)
$
(113,040
)
Basic income (loss) per common
share:
Basic from continuing operations
$
(0.73
)
$
0.49
$
(1.07
)
$
(3.93
)
Basic from discontinued operations
$
(0.04
)
$
(2.19
)
$
(0.06
)
$
(1.74
)
Net loss
$
(0.77
)
$
(1.71
)
$
(1.13
)
$
(5.66
)
Diluted income (loss) per common
share:
Diluted from continuing operations
$
(0.73
)
$
0.48
$
(1.07
)
$
(3.93
)
Diluted from discontinued operations
$
(0.04
)
$
(2.16
)
$
(0.06
)
$
(1.74
)
Net loss
$
(0.77
)
$
(1.68
)
$
(1.13
)
$
(5.66
)
Weighted average number of common
shares outstanding:
Basic
20,230
19,987
20,143
19,962
Diluted
20,230
20,286
20,143
19,962
CIRCOR INTERNATIONAL,
INC.
Condensed Consolidated
Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended
July 4, 2021
June 28, 2020
OPERATING ACTIVITIES
Net loss
$
(22,682
)
$
(113,040
)
Loss from discontinued operations, net of
income taxes
(1,117
)
(34,685
)
Loss from continuing operations
(21,565
)
(78,355
)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation
11,970
10,079
Amortization
21,353
21,492
Provision for bad debt expense
(350
)
7,768
Write down of inventory
961
352
Compensation expense for share-based
plans
2,903
2,290
Amortization of debt issuance costs
2,005
5,488
Deferred tax provision
823
—
Goodwill impairment charge
—
116,182
(Gain) loss on sale of businesses
1,031
(54,253
)
Changes in operating assets and
liabilities, net of effects of acquisition and disposition:
Trade accounts receivable
6,345
768
Inventories
(14,038
)
(12,370
)
Prepaid expenses and other assets
(17,792
)
(25,264
)
Accounts payable, accrued expenses and
other liabilities
214
(31,475
)
Net cash (used in) provided by continuing
operating activities
(6,140
)
(37,298
)
Net cash used in discontinued operating
activities
(579
)
(11,532
)
Net cash used in operating
activities
(6,719
)
(48,830
)
INVESTING ACTIVITIES
Additions to property, plant and
equipment
(6,038
)
(6,815
)
Proceeds from sale of property, plant and
equipment
2
(142
)
Proceeds from the sale of business
9,993
169,375
Proceeds from beneficial interest of
factored receivables
998
1,339
Net cash provided by continuing investment
activities
4,955
163,757
Net cash used in discontinued investing
activities
—
(10,071
)
Net cash provided by investing
activities
4,955
153,686
FINANCING ACTIVITIES
Proceeds from long-term debt
103,350
129,325
Payments of long-term debt
(100,250
)
(191,141
)
Withholding tax payments on restricted and
performance stock units converted
(4,119
)
—
Proceeds from the exercise of stock
options
151
118
Net cash provided by (used) in
financing activities
(868
)
(61,698
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(1,627
)
(2,421
)
(DECREASE) INCREASE IN CASH, CASH
EQUIVALENTS, AND RESTRICTED CASH
(4,259
)
40,737
Cash, cash equivalents, and restricted
cash at beginning of period
77,696
85,727
CASH, CASH EQUIVALENTS, AND RESTRICTED
CASH AT END OF PERIOD
$
73,437
$
126,464
CIRCOR INTERNATIONAL,
INC.
Condensed Consolidated Balance
Sheets
(in thousands)
(unaudited)
July 4, 2021
December 31, 2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
72,181
$
76,452
Trade accounts receivable, less allowance
for doubtful accounts of $8,596 and $9,035 at July 4, 2021 and
December 31, 2020, respectively
96,591
102,730
Inventories
136,012
129,084
Prepaid expenses and other current
assets
109,683
93,226
Assets held for sale
—
5,073
Total Current Assets
414,467
406,565
PROPERTY, PLANT AND EQUIPMENT, NET
160,817
168,763
OTHER ASSETS:
Goodwill
156,785
158,944
Intangibles, net
328,957
353,595
Deferred income taxes
776
779
Other assets
40,199
41,882
TOTAL ASSETS
$
1,102,001
$
1,130,528
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
$
68,224
$
61,236
Accrued expenses and other current
liabilities
72,294
75,624
Accrued compensation and benefits
29,721
28,332
Total Current Liabilities
170,239
165,192
LONG-TERM DEBT
512,375
507,888
DEFERRED INCOME TAXES
27,562
28,980
PENSION LIABILITY, NET
156,501
163,642
OTHER NON-CURRENT LIABILITIES
52,284
58,785
COMMITMENTS AND CONTINGENCIES
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; 21,620,528 and 21,373,813 issued at July 4, 2021
and December 31, 2020 respectively
216
214
Additional paid-in capital
452,512
452,728
(Accumulated deficit) retained
earnings
(109,143
)
(86,461
)
Common treasury stock, at cost (1,372,488
shares at July 4, 2021 and December 31, 2020)
(74,472
)
(74,472
)
Accumulated other comprehensive loss, net
of tax
(86,073
)
(85,968
)
Total Shareholders' Equity
183,040
206,041
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY
$
1,102,001
$
1,130,528
CIRCOR INTERNATIONAL,
INC.
Summary of Orders and
Backlog
(in millions)
(unaudited)
Three Months Ended
Six Months Ended
July 4, 2021
June 28, 2020
July 4, 2021
June 28, 2020
ORDERS (1)
Aerospace & Defense
$
54.2
$
76.6
$
127.2
$
148.6
Industrial
156.0
116.0
309.7
252.5
Total Orders
$
210.2
$
192.6
$
436.9
$
401.1
July 4, 2021
June 28, 2020
BACKLOG (2)
Aerospace & Defense
$
188.3
$
214.2
Industrial
248.2
217.8
Total Backlog
$
436.5
$
432.0
Note 1: Orders do not include the foreign exchange impact due to
the re-measurement of customer backlog amounts denominated in
foreign currencies. Orders for the six months ended June 28, 2020
include orders from businesses divested prior to June 28,2020 of
$4.4 million.
Note 2: Backlog includes unshipped customer orders for which
revenue has not been recognized.
CIRCOR INTERNATIONAL,
INC.
Segment Information
(in thousands, except
percentages)
UNAUDITED
2020
2021
As reported
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
2ND QTR
ORDERS
Aerospace & Defense
$
72,031
$
76,616
$
59,105
$
46,796
$
254,548
$
72,999
$
54,243
Industrial
136,443
116,023
107,453
121,690
481,609
153,695
155,959
Total
$
208,474
$
192,639
$
166,558
$
168,486
$
736,157
$
226,693
$
210,203
NET REVENUES
Aerospace & Defense
$
65,493
$
62,241
$
62,249
$
77,839
$
267,822
$
60,001
$
60,761
Industrial
126,720
123,825
124,391
130,513
505,449
120,654
129,585
Total
$
192,213
$
186,066
$
186,640
$
208,352
$
773,271
$
180,655
$
190,346
SEGMENT OPERATING INCOME
Aerospace & Defense
$
12,494
$
13,142
$
14,782
$
18,675
$
59,093
$
10,706
$
12,095
Industrial
5,169
12,406
9,807
12,441
39,823
9,735
10,400
Corporate expenses
(6,588
)
(9,664
)
(7,244
)
(7,789
)
(31,285
)
(8,002
)
(7,850
)
Total
$
11,075
$
15,884
$
17,345
$
23,327
$
67,631
$
12,439
$
14,645
SEGMENT OPERATING MARGIN %
Aerospace & Defense
19.1
%
21.1
%
23.7
%
24.0
%
22.1
%
17.8
%
19.9
%
Industrial
4.1
%
10.0
%
7.9
%
9.5
%
7.9
%
8.1
%
8.0
%
Total
5.8
%
8.5
%
9.3
%
11.2
%
8.7
%
6.9
%
7.7
%
2020
2021
Results of divested businesses
(1)
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
2ND QTR
ORDERS - Industrial
$
4,449
$
—
$
—
$
—
$
4,449
$
—
$
—
NET REVENUES - Industrial
$
4,900
$
—
$
—
$
—
$
4,900
$
—
$
—
SEGMENT OP. INC. -Industrial
$
—
$
—
$
—
$
—
$
—
$
—
$
—
CIRCOR INTERNATIONAL,
INC.
Supplemental Information
Regarding Divested Businesses
(in thousands, except
percentages) (unaudited)
2020
2021
Results excluding divested
businesses
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
2ND QTR
ORDERS
Aerospace & Defense
$72,031
$76,616
$59,105
$46,796
$254,548
$72,999
$54,243
Industrial
131,994
116,023
107,453
121,690
477,160
153,695
155,959
Total
$204,025
$192,639
$166,558
$168,486
$731,708
$226,693
$210,203
NET REVENUES
Aerospace & Defense
$65,493
$62,241
$62,249
$77,839
$267,822
$60,001
$60,761
Industrial
121,820
123,825
124,391
130,513
500,549
120,654
129,585
Total
$187,313
$186,066
$186,640
$208,352
$768,371
$180,655
$190,346
SEGMENT OPERATING INCOME
Aerospace & Defense
$12,494
$13,142
$14,782
$18,675
$59,093
$10,706
$12,095
Industrial
5,169
12,406
9,807
12,441
39,823
9,735
10,400
Corporate expenses
(6,588)
(9,664)
(7,244)
(7,789)
(31,285)
(8,002)
(7,850)
Total
$11,075
$15,884
$17,345
$23,327
$67,631
$12,439
$14,645
SEGMENT OPERATING MARGIN %
Aerospace & Defense
19.1%
21.1%
23.7%
24.0%
22.1%
17.8%
19.9%
Industrial
4.2%
10.0%
7.9%
9.5%
8.0%
8.1%
8.0%
Total
5.9%
8.5%
9.3%
11.2%
8.8%
6.9%
7.7%
(1) Divested businesses are related to the Industrial Segment
and include Instrumentation & Sampling. Distributed Valves are
discontinued operations and not reflected in the As Reported
figures in accordance with US GAAP.
CIRCOR INTERNATIONAL,
INC.
Reconciliation of Key
Performance Measures to Commonly Used Generally Accepted Accounting
Principle Terms
(in thousands, except
percentages) (unaudited)
2020
2021
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
2ND QTR
Net Cash (Used In) Provided By Operating
Activities
$(23,947)
$(24,883)
$2,465
$23,641
$(22,724)
$(17,703)
$10,984
LESS
Capital expenditures, net of sale proceeds
(a)
3,412
3,527
2,330
3,275
12,544
3,392
2,644
FREE CASH FLOW
$(27,359)
$(28,410)
$135
$20,366
$(35,268)
$(21,095)
$8,340
Gross Debt
$602,288
$592,038
$540,463
$519,938
$519,938
$536,938
$523,038
Less: Cash & Cash equivalents
170,861
125,421
72,772
76,452
76,452
75,680
72,181
GROSS DEBT, NET OF CASH
$431,427
$466,617
$467,691
$443,486
$443,486
$461,258
$450,857
TOTAL SHAREHOLDERS' EQUITY
$290,845
$273,351
$220,814
$206,041
$206,041
$196,106
$183,039
GROSS DEBT AS % OF EQUITY
207%
217%
245%
252%
252%
274%
286%
GROSS DEBT, NET OF CASH AS % OF EQUITY
148%
171%
212%
215%
215%
235%
246%
(a) includes capital expenditures, net of
sales proceeds of discontinued operations
CIRCOR INTERNATIONAL,
INC.
Reconciliation of Key
Performance Measures to Commonly Used Generally Accepted Accounting
Principle Terms
(in thousands, except
percentages) (unaudited)
2020
2021
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
2ND QTR
NET (LOSS) INCOME
$
(78,948
)
$ (34,092 ) $ (58,524 ) $ (13,934 ) $ (185,498 ) $ (7,119 ) $
(15,563 )
LESS:
Restructuring related inventory
charges
(602
)
—
351
—
(251
)
—
958
Restructuring charges, net
2,883
588
502
972
4,945
2,060
2,281
Acquisition amortization
10,218
10,681
10,625
10,939
42,463
10,487
10,498
Acquisition depreciation
974
980
1,011
1,021
3,986
2,375
1,326
Special (recoveries) charges, net
(45,175
)
5,019
436
473
(39,247
)
(2,869
)
4,522
Goodwill Impairment charge
116,182
—
—
—
116,182
—
—
Income tax impact
7,704
(22,549
)
53,240
13,125
51,521
(335
)
2,266
Net loss (income) from discontinued
operations
(9,162
)
43,847
(341
)
795
35,140
239
878
ADJUSTED NET INCOME
$
4,074
$
4,475
$
7,300
$
13,390
$
29,240
$
4,838
$
7,165
(LOSS) EARNINGS PER COMMON SHARE
(Diluted)
$
(3.96
)
$
(1.68
) $
(2.93
) $
(0.70
) $
(9.28
) $
(0.35
) $
(0.77
)
LESS:
Restructuring related inventory
charges
(0.03
)
—
0.02
—
(0.01
)
—
0.05
Restructuring charges, net
0.14
0.03
0.02
0.05
0.25
0.10
0.11
Acquisition amortization
0.51
0.53
0.53
0.55
2.13
0.52
0.52
Acquisition depreciation
0.05
0.05
0.05
0.05
0.20
0.12
0.07
Special (recoveries) charges, net
(2.27
)
0.25
0.02
0.02
(1.96
)
(0.14
)
0.22
Impairment charge
5.83
—
—
—
5.81
—
—
Income tax impact
0.39
(1.11
)
2.66
0.66
2.58
(0.02
)
0.11
Earnings (Loss) per share from
discontinued operations
(0.46
)
2.16
(0.02
)
0.04
1.76
0.01
0.04
ADJUSTED EARNINGS PER SHARE
(Diluted)
$
0.20
$
0.22
$
0.36
$
0.66
$
1.43
$
0.24
$
0.35
CIRCOR INTERNATIONAL,
INC.
Reconciliation of Key
Performance Measures to Commonly Used Generally Accepted Accounting
Principle Terms
(in thousands, except
percentages) (unaudited)
2020
2021
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
2ND QTR
NET (LOSS) INCOME
$
(78,948
)
$
(34,092
)
$
(58,524
)
$
(13,934
)
$
(185,498
)
$
(7,119
)
$
(15,563
)
LESS:
Interest expense, net
9,011
8,486
8,202
8,520
34,219
8,369
7,957
Depreciation
5,121
4,958
4,802
5,504
20,385
6,509
5,461
Amortization
10,516
10,976
10,925
11,245
43,662
10,696
10,657
Provision for income taxes
8,374
(21,769
)
54,318
15,299
56,222
400
2,961
Loss (income) from discontinued
operations
(9,162
)
43,847
(341
)
795
35,140
239
878
EBITDA
$
(55,088
)
$
12,406
$
19,383
$
27,429
$
4,130
$
19,094
$
12,351
LESS:
Restructuring related inventory charges
(recoveries)
(602
)
—
351
—
(251
)
—
958
Restructuring charges, net
2,883
588
502
972
4,945
2,060
2,281
Special (recoveries) charges, net
(45,175
)
5,019
436
473
(39,247
)
(2,869
)
4,522
Goodwill impairment charge
116,182
—
—
—
116,182
—
—
ADJUSTED EBITDA
$
18,200
$
18,013
$
20,671
$
28,873
$
85,758
$
18,285
$
20,112
CIRCOR INTERNATIONAL,
INC.
Reconciliation of Key
Performance Measures to Commonly Used Generally Accepted Accounting
Principle Terms
(in thousands, except
percentages) (unaudited)
2020
2021
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
2ND QTR
GAAP OPERATING INCOME (LOSS)
$
(73,405
)
$
(1,384
)
$
4,420
$
9,923
$
(60,446
)
$
386
$
(4,940
)
LESS:
Restructuring related inventory charges
(recoveries)
(602
)
—
351
—
(251
)
—
958
Amortization of inventory step-up
—
—
—
—
—
—
—
Restructuring charges, net
2,883
588
502
972
4,945
2,060
2,281
Acquisition amortization
10,218
10,681
10,625
10,939
42,463
10,487
10,498
Acquisition depreciation
974
980
1,011
1,021
3,986
2,375
1,326
Special (recoveries) charges, net
(45,175
)
5,019
436
473
(39,247
)
(2,869
)
4,522
Goodwill impairment charge
116,182
—
—
—
116,182
—
—
ADJUSTED OPERATING INCOME
$
11,075
$
15,884
$
17,345
$
23,327
$
67,631
$
12,439
$
14,645
GAAP OPERATING MARGIN
(38.2
)%
(0.7
)%
2.4
%
4.8
%
(7.8
)%
0.2
%
(2.7
)%
LESS:
Restructuring related inventory charges
(recoveries)
(0.3
)%
—
%
0.2
%
—
%
—
%
—
%
0.5
%
Amortization of inventory step-up
—
%
—
%
—
%
—
%
—
%
—
%
—
%
Restructuring charges, net
1.5
%
0.3
%
0.3
%
0.5
%
0.6
%
1.1
%
1.3
%
Acquisition amortization
5.3
%
5.7
%
5.7
%
5.3
%
5.5
%
5.8
%
5.8
%
Acquisition depreciation
0.5
%
0.5
%
0.5
%
0.5
%
0.5
%
1.3
%
0.7
%
Special (recoveries) charges, net
(23.5
)%
2.7
%
0.2
%
0.2
%
(5.1
)%
(1.6
)%
2.5
%
Goodwill impairment charge
60.4
%
—
%
—
%
—
%
15.0
%
—
%
—
%
ADJUSTED OPERATING MARGIN
5.8
%
8.5
%
9.3
%
11.2
%
8.7
%
6.9
%
8.1
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210810005283/en/
Alex Maki Vice President - FP&A and Investor Relations
CIRCOR International (781) 270-1200
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