CIRCOR Announces Non-Cash Fourth Quarter Charge
January 21 2005 - 9:26AM
PR Newswire (US)
CIRCOR Announces Non-Cash Fourth Quarter Charge * Company makes
changes to warehousing operations and inventory management
BURLINGTON, Mass., Jan. 21 /PRNewswire-FirstCall/ -- CIRCOR
International, Inc. (NYSE:CIR), a leading provider of valves and
fluid control products for the instrumentation, aerospace, fluid
regulation and energy markets, announced today that it will record
a pre-tax charge of approximately $6.5 million in the fourth
quarter 2004 for the disposal of inventory. This non-cash charge
will reduce net income and diluted earnings per share for the
fourth quarter and full year 2004 by $4.2 million and $0.27,
respectively. The charge results from the Company's recent decision
to reduce its costs to manufacture and warehouse its inventory. The
Company's Chairman and Chief Executive Officer, David A. Bloss,
Sr., commented, "In our October 21, 2004, press release announcing
third quarter 2004 earnings, we described our intention to
determine whether a more aggressive market value adjustment would
be necessary to expedite the sale and disposal of our slow-moving
inventory, consistent with our continuing efforts to decrease
working capital. During our evaluation, we also considered the
impact of our programs to procure inventory from less-expensive
suppliers, primarily in Asia and Eastern Europe, which began two
years ago. One result of our successful foreign- sourcing programs
is that we need less internal manufacturing and warehousing
capability, particularly in North America. In addition, the
Company's past practice has been to retain much of its inventory
for extended periods, even utilizing extra warehousing facilities
and resources, an approach we now plan to modify. After considering
all these factors, we concluded that it is more cost effective to
dispose of selected inventory and reduce warehouse capacity than to
incur ongoing carrying costs. We have decided to lower our costs by
disposing of certain inventories and consolidating facilities." The
Company plans to record a pre-tax, non-cash charge approximating
$6.5 million in the fourth quarter 2004 for excess inventories and
expects to dispose of a majority of this inventory in the first
half of 2005. Regarding facilities, one warehouse in Texas was sold
in the fourth quarter of 2004 and another warehouse in Oklahoma is
expected to be vacated at the end of its lease term in the first
half of 2005. Mr. Bloss provided an update on market activity
during CIRCOR's fourth quarter, saying, "Many of the end markets we
serve have strengthened during the quarter. Orders were especially
strong for international projects within the oil and gas markets
and we are starting 2005 with a record high backlog." CIRCOR
International expects to announce its earnings for the fourth
quarter and 2004 on February 15, 2005, and schedule a conference
call to review its results on Wednesday, February 16, 2005,
beginning at 9:00 am ET. Dial-in information will be announced in
early February. CIRCOR International, Inc. is a leading provider of
valves and fluid control products that allow customers around the
world to use fluids safely and efficiently in the instrumentation,
thermal fluid regulation and energy markets. CIRCOR's executive
headquarters are located at 25 Corporate Drive, Burlington, MA
01803. 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") and
releases issued by the Securities and Exchange Commission (SEC).
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. 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, performance or
achievements may differ materially from the expectations we
describe in our forward-looking statements. Factors that could
cause or contribute to such differences include, but are not
limited to, the cyclicality and highly competitive nature of some
of our end markets, changes in the price of and demand for oil and
gas in both domestic and international markets, variability of raw
material and component pricing, fluctuations in foreign currency
exchange rates, and our ability to continue operating our
manufacturing facilities at efficient levels and to successfully
implement our acquisition strategy. We advise you to read further
about these and other risk factors set forth under the caption
"Certain Risk Factors That May Affect Future Results" in our SEC
filings. We undertake no obligation to publicly update or revise
any forward-looking statement, whether as a result of new
information, future events or otherwise. DATASOURCE: CIRCOR
International, Inc. CONTACT: Kenneth W. Smith, Chief Financial
Officer of CIRCOR International, Inc., +1-781-270-1200
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