CIRCOR International, Inc. (NYSE:CIR), one of the world’s
leading providers of flow control products and services for the
Industrial and Aerospace & Defense markets, today announced
GAAP and adjusted financial results for the first quarter ended
March 29, 2020.
First-Quarter 2020 Overview
- Prioritizing health and safety while continuing our strategic
transformation and managing business continuity during the COVID-19
pandemic
- Orders of $208 million produced a book-to-bill ratio of 1.09
and backlog increase of $16 million
- Revenue of $192 million, down 20% reported, down 9% organically
- Aerospace & Defense revenue of $65 million, up 7% reported,
up 8% organically
- Industrial revenue of $127 million, down 29% reported, down 16%
organically
- GAAP loss per share of $(3.96) reflecting a non-cash goodwill
impairment charge of $116 million in the Industrial segment due to
COVID-19 impact on outlook
- Adjusted earnings per share of $0.20, including estimated
$(0.45) impact from COVID-19, driven by:
- Delayed revenue of $12 million and adjusted operating income of
$5 million
- Receivable write-off of $6 million
- GAAP operating margin of (38%); adjusted operating margin of
5.8%
- Aerospace & Defense operating margin of 19.1%, up 380 bps
versus last year
- Initiated $45 million of 2020 cost actions due to current
market environment
- Exited Q1 with $171 million of cash on hand
- Repriced debt in February 2020, reducing interest expense by 25
bps
- Completed sale of non-core Instrumentation & Sampling
business in January 2020 for $172 million, subject to working
capital adjustment
- Distributed Valves business exit to be completed in Q2
2020
“At CIRCOR, our top priority remains the health and safety of
our employees, customers and suppliers. The CIRCOR team has been
doing a remarkable job and I want to thank them for their service
and unwavering dedication to our customers in this rapidly changing
environment,” said Scott Buckhout, CIRCOR’s President and CEO.
“CIRCOR’s products and services have been deemed essential in the
vast majority of regions in which we operate, and as a result, all
of our facilities are currently open. During this time of
unprecedented uncertainty, our team has taken extraordinary
measures to maintain business continuity, implementing numerous
safety measures in an effort to ensure our employees around the
world remain safe and our business continues to supply essential
products to our customers with as little disruption as
possible.”
Mr. Buckhout continued, “We are taking prudent action in the
face of the COVID-19 pandemic while continuing to execute against
our previously announced 18-month strategic plan. De-levering the
Company remains a top priority. We reduced our net debt by $138
million in the first quarter. In addition, we are aggressively
taking cost out of our business to better align our cost structure
with the current market environment. We expect the actions taken to
date will reduce costs in 2020 by approximately $45 million. As a
result, we expect to improve our cash flow in the back half of the
year as cost reductions kick in and we complete the disbursements
associated with finalizing CIRCOR’s strategic transformation out of
non-core upstream Oil & Gas.
“Looking ahead, we continue to focus on creating long-term value
for shareholders by positioning the Company for growth, expanding
margins, generating strong free cash flow, and de-levering the
Company.”
Three Months Ended
($ in millions except EPS)
Q1 2020
Q1 2019
Change
Revenue
$
192.2
$
238.9
(20)%
Revenue - excluding divested businesses
(1)
187.3
209.1
(10)%
GAAP operating (loss) income
(73.4
)
17.8
(512)%
Adjusted operating income (2)
11.1
23.4
(53)%
GAAP operating margin
(38.2
)%
7.4
%
-4560 bps
Adjusted operating margin (2)
5.8
%
9.8
%
-400 bps
Adjusted operating margin ex
divestitures (2)
5.9
%
8.2
%
-230 bps
GAAP loss per share (diluted)
$
(3.96
)
$
(0.23
)
1,622%
Adjusted earnings per share (diluted)
(2)
$
0.20
$
0.52
(62)%
Operating cash flow
(23.9
)
(22.4
)
7%
Free cash flow (3)
(27.4
)
(26.1
)
5%
Orders
208.5
259.9
(20)%
Orders - excluding divested businesses
(1)
204.0
229.3
(11)%
Segment Results
Effective March 29, 2020, the Company changed its segment
reporting for financial statement purposes to align with the manner
in which the business is now managed. As previously announced, on
January 31, 2020 the Company divested its Instrumentation &
Sampling business, which was previously part of the Energy segment.
In light of this divestiture, the Company realigned its segments by
eliminating the Energy segment and moving the remaining businesses
into the Industrial segment. The new reporting segments are
Industrial and Aerospace & Defense.
($ in millions)
Three Months Ended
Q1 2020
Q1 2019
Change
Aerospace & Defense
Revenue
$
65.5
$
61.2
7%
Segment operating income
12.5
9.4
33%
Segment operating margin
19.1
%
15.3
%
380 bps
Orders
72.0
88.1
(18)%
Industrial
Revenue
$
126.7
$
177.6
(29)%
Revenue - excluding divested businesses
(1)
121.8
147.8
(18)%
Segment operating income
5.2
22.6
(77)%
Segment operating margin
4.1
%
12.7
%
-860 bps
Orders
136.4
171.8
(21)%
Orders - excluding divested businesses
(1)
132.0
141.2
(7)%
- 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 Reliability Services, Spence/Nicholson and
Instrumentation & Sampling (all Industrial) which were sold
before March 29, 2020.
- Adjusted consolidated and segment results for Q1 2020 exclude
income from discontinued operations of $9.2 million and net loss
from non-cash acquisition-related intangible amortization, special
and restructuring charges and goodwill impairment charge totaling
$84.5 million ($92.2 million, net of tax). These charges include:
(i) $11.2 million charge for non-cash acquisition-related
intangible amortization and depreciation expense; (ii) $2.4 million
of professional fees associated with an unsolicited tender offer to
acquire all outstanding shares of the Company’s common stock; (iii)
$53.2 million net gain from the divestiture of our Instrumentation
& Sampling business; (iv) $3.5 million amortization of debt
issuance fee; (v) $4.4 million of other special and restructuring
charges; and (vi) $116.2 million goodwill impairment charge related
to our Industrial segment. Adjusted Consolidated and Segment
Results for Q1 2019 exclude loss from discontinued operations of
$5.7 million and non-cash acquisition-related intangible
amortization, special and restructuring charges totaling $5.7
million ($9.3 million, net of tax). These charges include: (i)
$13.2 million charge for non-cash acquisition-related intangible
amortization expense and amortization of the step-up in fixed asset
values; (ii) $8.8 million net gain from the divestiture of our
Reliability Services business; and (iii) $1.3 million of other
special and restructuring recoveries.
- 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 Information
CIRCOR International will hold a conference call to review its
financial results at 9:00 a.m. ET today, May 29, 2020. 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 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 divested businesses) 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.
- 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 March 29, 2020 were
completed on January 1, 2019 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 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 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 expected impact of tariff
increases 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; our ability to successfully
integrate acquired businesses and dispose of businesses that are
held for sale as contemplated; 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, any actions of stockholders or others in
response to expiration of the recent unsolicited tender offer and
the cost and disruption of responding to those 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, current
Middle Eastern conflicts and other similar matters. BEFORE MAKING
ANY INVESTMENT DECISIONS REGARDING OUR COMPANY, WE STRONGLY ADVISE
YOU TO READ FURTHER ABOUT THESE AND OTHER RISK FACTORS SET FORTH IN
THE “RISK FACTORS” OF OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 2019, WHICH IS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION ("SEC") AND IS AVAILABLE ON THE SEC'S WEBSITE
AT WWW.SEC.GOV, 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. is one of the world’s leading
providers of flow control products and services for the Industrial
and Aerospace & Defense markets. CIRCOR has a product portfolio
of recognized, market-leading brands serving its customers’ most
demanding applications. 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
Q1 2020
Q1 2019
Net revenues
$
192,213
$
238,855
Cost of revenues
132,170
164,441
Gross profit
60,043
74,414
Selling, general and administrative
expenses
59,558
64,506
Goodwill impairment charge
116,182
—
Special and restructuring recoveries,
net
(42,292
)
(7,842
)
Operating (loss) income
(73,405
)
17,750
Other expense (income)
Interest expense, net
9,011
13,094
Other income, net
(2,680
)
(2,148
)
Total other expense, net
6,331
10,946
(Loss) income from continuing operations
before income taxes
(79,736
)
6,804
Provision for income taxes
8,374
5,709
(Loss) income from continuing operations,
net of tax
(88,110
)
1,095
Income (loss) from discontinued
operations, net of tax
9,162
(5,728
)
Net loss
$
(78,948
)
$
(4,633
)
Basic (loss) income per common share:
Basic from continuing operations
$
(4.42
)
$
0.06
Basic from discontinued operations
$
0.46
$
(0.29
)
Net loss
$
(3.96
)
$
(0.23
)
Diluted (loss) income per common
share:
Diluted from continuing operations
$
(4.42
)
$
0.05
Diluted from discontinued operations
$
0.46
$
(0.29
)
Net loss
$
(3.96
)
$
(0.23
)
Weighted average number of common shares
outstanding:
Basic
19,935
19,870
Diluted
19,935
19,976
CIRCOR INTERNATIONAL,
INC.
Condensed Consolidated
Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended
Q1 2020
Q1 2019
OPERATING ACTIVITIES
Net loss
$
(78,948
)
$
(4,633
)
Income (loss) from discontinued
operations, net of income taxes
9,162
(5,728
)
(Loss) income from continuing
operations
(88,110
)
1,095
Adjustments to reconcile net (loss) income
to net cash provided by operating activities:
Depreciation
5,121
5,500
Amortization
10,611
12,807
Provision for bad debt expense
5,802
(106
)
Loss on write-down of inventory
343
487
Compensation expense for share-based
plans
608
1,372
Amortization of debt issuance costs
4,513
1,010
Loss on sale or write-down of property,
plant and equipment
—
123
Goodwill impairment charge
116,182
—
Gain on sale of businesses
(54,356
)
(10,282
)
Changes in operating assets and
liabilities, net of effects of acquisition and disposition:
Trade accounts receivable
(1,550
)
(1,697
)
Inventories
(13,365
)
(4,146
)
Prepaid expenses and other assets
(5,507
)
8,436
Accounts payable, accrued expenses and
other liabilities
1,081
(43,676
)
Net cash used in continuing operating
activities
(18,627
)
(29,077
)
Net cash (used in) provided by
discontinued operating activities
(5,320
)
6,699
Net cash used in operating
activities
(23,947
)
(22,378
)
INVESTING ACTIVITIES
Additions to property, plant and
equipment
(3,412
)
(3,292
)
Proceeds from sale of property, plant and
equipment
—
28
Proceeds from the sale of business,
net
169,773
83,321
Proceeds from collection of beneficial
interest
599
—
Net cash provided by continuing investment
activities
166,960
80,057
Net cash provided by (used in)
discontinued investing activities
68
(425
)
Net cash provided by investing
activities
167,028
79,632
FINANCING ACTIVITIES
Proceeds from long-term debt
129,325
87,400
Payments of long-term debt
(180,891
)
(140,500
)
Proceeds from the exercise of stock
options
118
—
Net cash used in continuing financing
activities
(51,448
)
(53,100
)
Net cash used in financing
activities
(51,448
)
(53,100
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(5,389
)
957
INCREASE IN CASH, CASH EQUIVALENTS, AND
RESTRICTED CASH
86,244
5,111
Cash, cash equivalents, and restricted
cash at beginning of period
85,727
69,525
CASH, CASH EQUIVALENTS, AND RESTRICTED
CASH AT END OF PERIOD
$
171,971
$
74,636
CIRCOR INTERNATIONAL,
INC.
Condensed Consolidated Balance
Sheets
(in thousands)
(unaudited)
March 29, 2020
December 31, 2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
170,861
$
84,531
Trade accounts receivable, less allowance
for doubtful accounts of $9,017 and $3,086 at March 29, 2020 and
December 31, 2019, respectively
116,514
125,422
Inventories
147,175
137,309
Prepaid expenses and other current
assets
86,840
66,664
Assets held for sale
26,617
161,193
Total Current Assets
548,007
575,119
PROPERTY, PLANT AND EQUIPMENT,
NET
166,580
172,179
OTHER ASSETS:
Goodwill
150,928
271,893
Intangibles, net
368,519
385,542
Deferred income taxes
42,706
30,852
Other assets
32,337
35,360
TOTAL ASSETS
$
1,309,077
$
1,470,945
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES:
Accounts payable
$
76,298
$
79,399
Accrued expenses and other current
liabilities
103,917
94,169
Accrued compensation and benefits
25,601
19,518
Liabilities held for sale
26,617
43,289
Total Current Liabilities
232,433
236,375
LONG-TERM DEBT
588,958
636,297
DEFERRED INCOME TAXES
19,175
21,425
PENSION LIABILITY, NET
137,779
146,801
OTHER NON-CURRENT LIABILITIES
39,887
38,636
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; 19,956,518 and 19,912,362 shares issued at March
29, 2020 and December 31, 2019, respectively
213
213
Additional paid-in capital
447,867
446,657
Retained earnings
20,110
99,280
Common treasury stock, at cost (1,372,488
shares at March 29, 2020 and December 31, 2019)
(74,472
)
(74,472
)
Accumulated other comprehensive loss, net
of tax
(102,873
)
(80,267
)
Total Shareholders' Equity
290,845
391,411
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY
$
1,309,077
$
1,470,945
CIRCOR INTERNATIONAL,
INC.
Summary of Orders and
Backlog
(in millions)
(unaudited)
Three Months Ended
Q1 2020
Q1 2019
ORDERS (1)
Aerospace & Defense
$
72.0
$
88.1
Industrial
136.4
171.8
Total orders
$
208.5
$
259.9
Q1 2020
Q1 2019
BACKLOG (2)
Aerospace & Defense
$
199.0
$
206.5
Industrial
222.2
254.9
Total backlog
$
421.2
$
461.4
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 three months ended March 29,
2020 include orders from businesses divested prior to March 29,
2020 of $4.5 million. Orders for the three months ended March 31,
2019 include orders from businesses divested of $30.6 million.
Divested businesses are Reliability Services, Spence / Nicholson
and Instrumentation & Sampling, all in the Industrial segment.
Note 2: Backlog includes unshipped customer orders for which
revenue has not been recognized. Backlog in Q1 2019 includes $11.7
million for Industrial related to divested businesses.
CIRCOR
INTERNATIONAL, INC.
Segment Information
(in thousands, except
percentages) (unaudited)
2019
2020
As Reported
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
ORDERS
Aerospace & Defense
$
88,107
$
93,405
$
63,968
$
68,459
$
313,939
$
72,031
Industrial
171,834
164,642
158,986
168,091
663,553
136,443
Total
$
259,941
$
258,047
$
222,954
$
236,550
$
977,492
$
208,474
NET REVENUES
Aerospace & Defense
$
61,240
$
64,694
$
67,621
$
79,070
$
272,625
$
65,493
Industrial
177,615
181,074
169,431
163,568
691,688
126,720
Total
$
238,855
$
245,768
$
237,052
$
242,638
$
964,313
$
192,213
SEGMENT OPERATING INCOME
Aerospace & Defense
$
9,374
$
10,443
$
13,564
$
19,099
$
52,480
$
12,494
Industrial
22,581
26,173
21,278
20,757
90,789
5,169
Corporate expenses
(8,522
)
(8,028
)
(9,248
)
(7,671
)
(33,469
)
(6,588
)
Total
$
23,433
$
28,588
$
25,594
$
32,185
$
109,800
$
11,075
SEGMENT OPERATING MARGIN %
Aerospace & Defense
15.3
%
16.1
%
20.1
%
24.2
%
19.2
%
19.1
%
Industrial
12.7
%
14.5
%
12.6
%
12.7
%
13.1
%
4.1
%
Total
9.8
%
11.6
%
10.8
%
13.3
%
11.4
%
5.8
%
2019
2020
Results of Divested Businesses
(1)
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
ORDERS - Industrial
$
30,611
$
24,448
$
22,090
$
18,047
$
95,196
$
4,449
NET REVENUES - Industrial
$
29,787
$
26,101
$
20,697
$
18,602
$
95,187
$
4,900
SEGMENT OP. INC. -Industrial
$
6,217
$
5,229
$
2,677
$
3,166
$
17,289
$
—
(1) Divested businesses are related to the
Industrial Segment and include Reliability Services,
Spence/Nicholson and Instrumentation & Sampling. Engineered
Valves and Distributed Valves are discontinued operations and not
reflected in the As Reported figures in accordance with US
GAAP.
CIRCOR INTERNATIONAL,
INC.
Supplemental Information
Regarding Divested Businesses
(in thousands, except
percentages) (unaudited)
2019
2020
Results Excluding Divested
Businesses
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
ORDERS
Aerospace & Defense
$
88,107
$
93,405
$
63,968
$
68,459
$
313,939
$
72,031
Industrial
141,223
140,194
136,896
150,044
568,357
131,994
Total
$
229,330
$
233,599
$
200,864
$
218,503
$
882,296
$
204,025
NET REVENUES
Aerospace & Defense
$
61,240
$
64,694
$
67,621
$
79,070
$
272,625
$
65,493
Industrial
147,828
154,973
148,734
144,966
596,501
121,820
Total
$
209,068
$
219,667
$
216,355
$
224,036
$
869,126
$
187,313
SEGMENT OPERATING INCOME
Aerospace & Defense
$
9,374
$
10,443
$
13,564
$
19,099
$
52,480
$
12,494
Industrial
16,364
20,944
18,601
17,591
73,500
5,169
Corporate expenses
(8,522
)
(8,028
)
(9,248
)
(7,671
)
(33,469
)
(6,588
)
Total
$
17,216
$
23,359
$
22,917
$
29,019
$
92,511
$
11,075
SEGMENT OPERATING MARGIN %
Aerospace & Defense
15.3
%
16.1
%
20.1
%
24.2
%
19.2
%
19.1
%
Industrial
11.1
%
13.5
%
12.5
%
12.1
%
12.3
%
4.2
%
Total
8.2
%
10.6
%
10.6
%
13.0
%
10.6
%
5.9
%
CIRCOR INTERNATIONAL,
INC.
Reconciliation of Key
Performance Measures to Commonly Used Generally Accepted Accounting
Principle Terms
(in thousands, except
percentages) (unaudited)
2019
2020
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
Net Cash (Used In) Provided By
Operating Activities
$
(22,378
)
$
12,339
$
9,128
$
16,822
$
15,911
$
(23,947
)
Less: Capital expenditures, net of sale
proceeds (a)
3,689
2,995
(963
)
(1,535
)
4,186
3,412
FREE CASH FLOW
$
(26,067
)
$
9,344
$
10,091
$
18,357
$
11,725
$
(27,359
)
Gross Debt
$
753,950
$
748,250
$
659,100
$
653,850
$
653,850
$
602,288
Less: Cash & Cash equivalents
73,619
76,082
69,225
84,531
84,531
170,861
GROSS DEBT, NET OF CASH
$
680,331
$
672,168
$
589,875
$
569,319
$
569,319
$
431,427
TOTAL SHAREHOLDERS' EQUITY
$
516,177
$
494,899
$
375,388
$
391,411
$
391,411
$
290,845
GROSS DEBT AS % OF EQUITY
146
%
151
%
176
%
167
%
167
%
207
%
GROSS DEBT, NET OF CASH AS % OF EQUITY
132
%
136
%
157
%
145
%
145
%
148
%
(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)
2019
2020
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
NET (LOSS) INCOME
$
(4,633
)
$
(18,520
)
$
(112,338
)
$
1,555
$
(133,935
)
$
(78,948
)
LESS:
Restructuring related inventory
charges
325
—
(1,145
)
—
(820
)
(602
)
Amortization of inventory step-up
—
—
—
—
—
—
Restructuring charges, net
358
299
5,038
(509
)
5,186
2,883
Acquisition amortization
12,077
11,247
11,202
11,189
45,715
10,218
Acquisition depreciation
1,123
1,106
1,102
1,021
4,352
974
Special charges (recoveries), net
(8,200
)
3,917
18,481
3,488
17,686
(45,175
)
Goodwill impairment charge
—
—
—
—
—
116,182
Income tax impact
3,625
(2,266
)
5,533
(1,752
)
5,140
7,704
Net loss (income) from discontinued
operations
5,728
17,156
84,688
1,595
109,167
(9,162
)
ADJUSTED NET INCOME
$
10,403
$
12,939
$
12,561
$
16,587
$
52,491
$
4,074
EARNINGS (LOSS) PER COMMON SHARE
(Diluted)
$
(0.23
)
$
(0.93
)
$
(5.64
)
$
0.08
$
(6.73
)
$
(3.96
)
LESS:
Restructuring related inventory
charges
0.02
—
(0.06
)
—
(0.04
)
(0.03
)
Amortization of inventory step-up
—
—
—
—
—
—
Restructuring charges, net
0.02
0.02
0.25
(0.03
)
0.26
0.14
Acquisition amortization
0.61
0.57
0.56
0.56
2.30
0.51
Acquisition depreciation
0.06
0.06
0.06
0.05
0.22
0.05
Special charges (recoveries), net
(0.41
)
0.20
0.93
0.18
0.89
(2.27
)
Impairment charge
—
—
—
—
—
5.83
Income tax impact
0.18
(0.12
)
0.28
(0.10
)
0.24
0.39
Loss (earnings) per share from
discontinued operations
0.29
0.86
4.25
0.08
5.48
(0.46
)
ADJUSTED EARNINGS PER SHARE
(Diluted)
$
0.52
$
0.65
$
0.63
$
0.82
$
2.62
$
0.20
CIRCOR INTERNATIONAL,
INC.
Reconciliation of Key
Performance Measures to Commonly Used Generally Accepted Accounting
Principle Terms
(in thousands, except
percentages) (unaudited)
2019
2020
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
NET (LOSS) INCOME
$
(4,633
)
$
(18,520
)
$
(112,338
)
$
1,555
$
(133,935
)
$
(78,948
)
LESS:
Interest expense, net
13,094
12,947
11,804
10,763
$
48,609
$
9,011
Depreciation
5,499
5,568
5,551
5,427
22,045
5,121
Amortization
12,536
11,685
11,629
11,741
47,591
10,516
Provision for income taxes
5,709
284
7,490
1,193
14,676
8,374
Loss (income) from discontinued
operations
5,728
17,156
84,688
1,595
109,167
(9,162
)
EBITDA
$
37,933
$
29,121
$
8,825
$
32,274
$
108,153
$
(55,088
)
LESS:
Restructuring related inventory charges
(recoveries)
325
—
(1,145
)
—
(820
)
(602
)
Amortization of inventory step-up
—
—
—
—
—
—
Restructuring charges, net
358
299
5,038
(509
)
5,186
2,883
Special (recoveries) charges, net
(8,200
)
3,917
18,481
3,488
17,686
(45,175
)
Goodwill impairment charge
—
—
—
—
—
116,182
ADJUSTED EBITDA
$
30,416
$
33,337
$
31,199
$
35,253
$
130,205
$
18,200
CIRCOR INTERNATIONAL,
INC.
Reconciliation of Key
Performance Measures to Commonly Used Generally Accepted Accounting
Principle Terms
(in thousands, except
percentages) (unaudited)
2019
2020
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
GAAP OPERATING INCOME (LOSS)
$
17,750
$
12,019
$
(9,084
)
$
16,996
$
37,681
$
(73,405
)
LESS:
Restructuring related inventory charges
(recoveries)
325
—
(1,145
)
—
(820
)
(602
)
Amortization of inventory step-up
—
—
—
—
—
—
Restructuring charges (recoveries),
net
358
299
5,038
(509
)
5,186
2,883
Acquisition amortization
12,077
11,247
11,202
11,189
45,715
10,218
Acquisition depreciation
1,123
1,106
1,102
1,021
4,352
974
Special charges (recoveries), net
(8,200
)
3,917
18,481
3,488
17,686
(45,175
)
Goodwill impairment charge
—
—
—
—
—
116,182
ADJUSTED OPERATING INCOME
$
23,433
$
28,588
$
25,594
$
32,185
$
109,800
$
11,075
GAAP OPERATING MARGIN
7.4
%
4.9
%
(3.8
)%
7.0
%
3.9
%
(38.2
)%
LESS:
Restructuring related inventory charges
(recoveries)
0.1
%
—
%
(0.5
)%
—
%
(0.1
)%
(0.3
)%
Amortization of inventory step-up
—
%
—
%
—
%
—
%
—
%
—
%
Restructuring charges (recoveries),
net
0.1
%
0.1
%
2.1
%
(0.2
)%
0.5
%
1.5
%
Acquisition amortization
5.1
%
4.6
%
4.7
%
4.6
%
4.7
%
5.3
%
Acquisition depreciation
0.5
%
0.5
%
0.5
%
0.4
%
0.5
%
0.5
%
Special charges (recoveries), net
(3.4
)%
1.6
%
7.8
%
1.4
%
1.8
%
(23.5
)%
Goodwill impairment charge
—
%
—
%
—
%
—
%
—
%
60.4
%
ADJUSTED OPERATING MARGIN
9.8
%
11.6
%
10.8
%
13.3
%
11.4
%
5.8
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200529005151/en/
Abhi Khandelwal Senior Vice President Finance & Chief
Financial Officer CIRCOR International (781) 270-1200
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