CIRCOR International, Inc. (NYSE: CIR), a leading provider of
flow control solutions and other highly engineered products for
markets including oil & gas, aerospace, power, process and
industrial solutions, today announced financial results for the
fourth quarter and year ended December 31, 2016.
Fourth-Quarter 2016 Highlights
- Revenue of $158 million, GAAP EPS of
($0.12) and Adjusted EPS of $0.48
- Operating Cash Flow of $20 million and
Free Cash Flow of $17 million
- Critical Flow Solutions integration
progressing well
- Orders in short-cycle North America
market strengthening
- Cost control and restructuring actions
continuing to drive bottom-line performance
“CIRCOR concluded 2016 with solid fourth-quarter performance
delivering revenue of $158 million and adjusted earnings per share
of $0.48,” said Scott Buckhout, President and Chief Executive
Officer. “We were pleased with the quarter, especially the impact
of our simplification program and the improvement in our North
America short-cycle order trend. In addition, the integration of
Critical Flow Solutions is progressing as planned.”
“During the fourth quarter, we formed the Advanced Flow
Solutions group to drive better top-line growth by aligning our
organization with end markets,” added Buckhout. “AFS serves as a
diversified flow technology platform that will expand our
penetration into the aerospace, power, process and industrial
markets.”
“As we enter 2017, we are optimistic about the market outlook
across the majority of our businesses and we anticipate that our
simplification and operational excellence actions will continue to
benefit the bottom line. We remain focused on building shareholder
value through top-line growth, margin expansion, strong cash flow
and disciplined capital deployment,” concluded Buckhout.
First-Quarter 2017 GuidanceThe Company will provide its
guidance for the first quarter of 2017 during the conference call
later today.
Selected Consolidated Results
(unaudited)
($ millions except EPS) Q4
2016 Q4 2015
Change FY 2016
FY 2015 Change
Revenue $ 158.2 $ 164.2
(4)%
$ 590.3 $ 656.3 (10)%
GAAP Operating (Loss) Income $ (3.4) $ 12.3 NM
$ 10.9 $ 26.2 (58)%
Adjusted Operating
Income1 $ 11.0 $ 16.7 (34)%
$
42.4 $ 62.5 (32)%
GAAP Operating Margin (2.2)%
7.5% NM
1.8% 4.0% (220) bps
Adjusted Operating
Margin1 6.9% 10.2% (330) bps
7.2% 9.5%
(230) bps
GAAP (Loss) Earnings Per Share (Diluted) $
(0.12) $ 0.43 NM
$ 0.61 $ 0.58 5%
Adjusted
Earnings Per Share (Diluted)1 $ 0.48 $
0.63 (24)%
$ 1.99 $ 2.43 (18)%
Operating Cash
Flow $ 20.4 $ 30.5 (33)%
$ 59.4 $
27.1 119%
Free Cash Flow2 $ 17.0 $ 28.4
(40)%
$ 46.4 $ 16.6 179%
Orders $
142.3 $ 137.9 3%
$ 525.7 $ 590.4 (11)%
Segment Results
($ millions) Q4 2016
Q4 2015 Change
FY 2016 FY
2015 Change Energy
Revenue $ 89.0 $
91.6 (3)%
$ 322.0 $ 383.7 (16)%
Segment Operating
Income $ 9.3 $ 10.3 (10)%
$ 34.6 $
50.4 (31)%
Segment Operating Margin 10.4% 11.2% (80)
bps
10.7% 13.1% (240) bps
Orders $ 85.2
$ 70.5 21%
$ 270.5 $ 339.4 (20)%
Advanced
Flow Solutions Revenue $ 69.2 $ 72.6 (5)%
$ 268.2 $ 272.6 (2)%
Segment Operating Income
$ 8.9 $ 10.6 (16)%
$ 33.5 $ 33.8 (1)%
Segment Operating Margin 12.9% 14.6% (170) bps
12.5% 12.4% 10 bps
Orders $ 57.1 $ 67.4
(15)%
$ 255.2 $ 251.0 2%
1. Consolidated and Segment Results for Q4
2016 exclude special and restructuring charges totaling $14.4
million. These charges include (i) $5.6 million for non-cash
acquisition-related intangible amortization expense, including the
amortization of a step-up in fair value of inventories; (ii) $4.5
million related to a non-cash charge associated with a lump sum
distribution paid to terminated and vested participants in CIRCOR’s
pension plan; (iii) $2.3 million related to the exit of the
California machine shop and the Brazil facility, as well as the
suspension of manufacturing operations in China; (iv) $1.0 million
related to other restructuring programs across the Energy segment;
and (v) $1.0 million related to professional fees incurred for
completed acquisitions. Consolidated and Segment Results for Q4
2015 exclude special and restructuring charges totaling $4.5
million. These charges include (i) $2.1 million related to the
closure of the Brazil manufacturing operations; (ii) $2.2 million
for non-cash acquisition-related intangible amortization expense;
(iii) restructuring charges of $0.5 million; and (iv) a net gain of
$0.3 million.
2. Free Cash Flow is a non-GAAP financial
measure and is calculated by subtracting GAAP capital expenditures,
net of proceeds from asset sales, from GAAP Operating Cash
Flow.
Conference Call InformationCIRCOR International will hold
a conference call to review its financial results today, February
16, 2017, at 10:00 a.m. ET. To listen to the conference call and
view the accompanying presentation slides, visit “Webcasts &
Presentations” in the “Investors” portion of the CIRCOR website.
The call also can be accessed by dialing (877) 407-5790 or (201)
689-8328. The webcast will be archived for one year on the
Company’s website.
Use of Non-GAAP Financial MeasuresAdjusted operating
income, Adjusted operating margin, Adjusted net income, Adjusted
earnings per share (diluted), EBITDA, Adjusted EBITDA, net debt and
free cash flow are non-GAAP financial measures. These non-GAAP
financial measures are used by management in our financial and
operating decision making because we believe they better reflect
our ongoing business and allow for meaningful period-to-period
comparisons. We believe these non-GAAP financial measures provide
useful information to investors and others in understanding and
evaluating the Company’s current operating performance and future
prospects in the same manner as management does, if they so choose.
These non-GAAP financial measures also allow investors and others
to compare the Company’s current financial results with the
Company’s past financial results in a consistent manner. For
example:
- We exclude costs and tax effects
associated with restructuring activities, such as reducing overhead
and consolidating facilities. We believe that the costs related to
these restructuring activities are not indicative of our normal
operating costs.
- We exclude certain acquisition-related
costs, including significant transaction costs and amortization of
inventory 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 of 5 to 20 years. Exclusion of the non-cash amortization
expense allows comparisons of operating results that are consistent
over time for both our newly acquired and long-held businesses and
with both acquisitive and non-acquisitive peer companies.
- We also exclude certain gains/losses
and related tax effects, which are either isolated or cannot be
expected to occur again with any predictability, and that we
believe are not indicative of our normal operating gains and
losses. For example, we exclude gains/losses from items such as the
sale of a business, significant litigation-related matters and
lump-sum pension plan settlements.
CIRCOR’s management uses these non-GAAP measures, in addition to
GAAP financial measures, as the basis for measuring the Company’s
operating performance and comparing such performance to that of
prior periods and to the performance of our competitors. We use
such measures when publicly providing our business outlook,
assessing future earnings potential, evaluating potential
acquisitions and dispositions and in our financial and operating
decision-making process, including for compensation purposes.
Investors should recognize that these non-GAAP measures might
not be comparable to similarly titled measures of other companies.
These measures should be considered in addition and not as a
substitute for or superior to, any measure of performance, cash
flow or liquidity prepared in accordance with accounting principles
generally accepted in the United States. A reconciliation of the
non-GAAP financial measures to the most directly comparable GAAP
measures is available in this news release.
Safe Harbor StatementThis press release contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Reliance should not be
placed on forward-looking statements because they involve unknown
risks, uncertainties and other factors, which are, in some cases,
beyond the control of CIRCOR. Any statements in this press release
that are not statements of historical fact are forward-looking
statements, including, but not limited to, those relating to
CIRCOR’s future performance, including the realization of cost
reductions from restructuring activities. Actual events,
performance or results could differ materially from the anticipated
events, performance or results expressed or implied by such
forward-looking statements. 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 flow control solutions and
other highly engineered products and sub-systems for markets
including oil & gas, aerospace, power, process and industrial
solutions. CIRCOR has a diversified product portfolio with
recognized, market-leading brands that fulfill its customers’
unique application 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 industry talent. For more information,
visit the Company’s investor relations website at
http://investors.circor.com.
CIRCOR INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF (LOSS)
INCOME
(in thousands, except per share
data)
UNAUDITED
Three Months Ended
Twelve Months Ended
December 31, 2016
December 31, 2015
December 31, 2016
December 31, 2015
Net revenues $ 158,236 $ 164,243 $ 590,259 $ 656,267 Cost of
revenues 109,139 113,747 407,144 456,935 GROSS
PROFIT 49,097 50,496 183,115 199,332 Selling, general and
administrative expenses 44,528 36,959 154,818 156,302 Impairment
charges — — 208 2,502 Special and restructuring charges, net 8,006
1,256 17,171 14,354 OPERATING (LOSS) INCOME
(3,437 ) 12,281 10,918 26,174 Other expense (income):
Interest expense, net 1,468 570 3,310 2,844 Other (income) expense,
net (1,157 ) 2,099 (2,072 ) 902 TOTAL OTHER EXPENSE, NET 311
2,669 1,238 3,746 (LOSS) INCOME BEFORE INCOME
TAXES (3,748 ) 9,612 9,680 22,428 (Benefit from) Provision for
income taxes (1,746 ) 2,456 (421 ) 12,565 NET (LOSS) INCOME
$ (2,002 ) $ 7,156 $ 10,101 $ 9,863 (Loss) Earnings
per common share: Basic $ (0.12 ) $ 0.44 $ 0.62 $ 0.59 Diluted $
(0.12 ) $ 0.43 $ 0.61 $ 0.58 Weighted average number of common
shares outstanding: Basic 16,439 16,425 16,418 16,850 Diluted
16,439 16,555 16,536 16,913 Dividends declared per common share $
0.0375 $ 0.0375 $ 0.1500 $ 0.1500
CIRCOR
INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(in thousands)
UNAUDITED
Twelve Months Ended
December 31, 2016
December 31, 2015
OPERATING ACTIVITIES Net income $ 10,101 $ 9,863 Adjustments
to reconcile net income to net cash provided by operating
activities: Depreciation 13,304 14,254 Amortization 12,316 9,681
Bad debt expense 2,330 2,561 Loss on write down of inventory 9,297
15,404 Compensation expense of share-based plans 5,545 6,579 Tax
effect of share-based plan compensation 145 (134 ) Pension
settlement charge 4,457 — Deferred income tax (benefit) expense
(10,737 ) 781 Loss on sale or write down of property, plant and
equipment 3,708 305 Impairment charges 208 2,502 Gain on sale of
business — (1,044 ) Changes in operating assets and liabilities,
net of effects of acquisition and disposition: Trade accounts
receivable 29,322 20,393 Inventories 36,092 (14,446 ) Prepaid
expenses and other assets (8,332 ) (4,786 ) Accounts payable,
accrued expenses and other liabilities (48,357 ) (34,771 ) Net cash
provided by operating activities 59,399 27,142
INVESTING ACTIVITIES Purchases of property, plant and
equipment (14,692 ) (12,711 ) Proceeds from the sale of property,
plant and equipment 1,700 2,209 Proceeds from divestitures — 2,759
Business acquisition, net of cash acquired (197,489 ) (79,983 ) Net
cash used in investing activities (210,481 ) (87,726 )
FINANCING
ACTIVITIES Proceeds from long-term debt 323,200 261,394
Payments of long-term debt (162,540 ) (182,004 ) Dividends paid
(2,497 ) (2,559 ) Proceeds from the exercise of stock options 246
258 Tax effect of share-based plan compensation (145 ) 134 Sales
(purchases) of common stock 500 (74,972 ) Net cash provided
by financing activities 158,764 2,251 Effect of
exchange rate changes on cash and cash equivalents (3,944 ) (8,498
) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,738 (66,831 )
Cash and cash equivalents at beginning of period 54,541
121,372 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 58,279
$ 54,541
CIRCOR INTERNATIONAL,
INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
UNAUDITED
December 31, 2016
December 31, 2015 ASSETS CURRENT ASSETS: Cash and
cash equivalents $ 58,279 $ 54,541 Trade accounts receivable, less
allowance for doubtful accounts of $5,056 and $8,290, respectively
133,046 125,628 Inventories 149,584 177,840 Prepaid expenses and
other current assets
29,557
16,441 Total Current Assets
370,466
374,450 PROPERTY, PLANT AND EQUIPMENT, NET 99,713
87,029 OTHER ASSETS: Goodwill
206,659
115,452 Intangibles, net 135,778 48,981 Deferred income taxes 4,824
36,799 Other assets 3,316 7,204 TOTAL ASSETS $
820,756 $ 669,915 LIABILITIES AND SHAREHOLDERS’
EQUITY CURRENT LIABILITIES: Accounts payable $ 46,767 $ 64,284
Accrued expenses and other current liabilities 50,707 59,463
Accrued compensation and benefits 20,249 18,424 Total
Current Liabilities 117,723 142,171 LONG-TERM DEBT
251,200 90,500 DEFERRED INCOME TAXES 13,657 10,424 OTHER
NON-CURRENT LIABILITIES 33,766 26,043 SHAREHOLDERS’ EQUITY: Common
stock 178 177 Additional paid-in capital 289,423 283,621 Retained
earnings 265,543 257,939 Common treasury stock, at cost (74,472 )
(74,972 ) Accumulated other comprehensive loss, net of tax (76,262
) (65,988 ) Total Shareholders’ Equity 404,410 400,777
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 820,756
$ 669,915
CIRCOR INTERNATIONAL, INC.
SUMMARY OF ORDERS AND BACKLOG
(in millions)
UNAUDITED
Three Months Ended
Twelve Months Ended December 31, 2016
December 31, 2015 December
31, 2016 December 31,
2015 ORDERS (1) (3) Energy $ 85.2 $ 70.5 $ 270.5 $
339.4 Advanced Flow Solutions 57.1 67.4 255.2
251.0 Total orders $ 142.3 $ 137.9 $ 525.7 $
590.4
BACKLOG (2) (3) December 31, 2016
December 31, 2015 Energy $ 123.1 $ 131.6 Advanced
Flow Solutions 119.3 137.4 Total backlog $ 242.4
$ 269.0
Note 1: Orders do not include the foreign exchange impact due to
the re-measurement of customer order backlog amounts denominated in
foreign currencies.Note 2: Backlog includes unshipped customer
orders, including backlog associated with acquisitions.Note 3:
December 31, 2015 segment amounts restated for Q4 2016
organizational realignment.
CIRCOR INTERNATIONAL, INC.
SEGMENT INFORMATION
(in thousands, except
percentages)
UNAUDITED
2015 2016 1ST
QTR 2ND QTR
3RD QTR 4TH QTR
TOTAL 1ST QTR
2ND QTR 3RD QTR
4TH QTR
TOTAL NET REVENUES
Energy $ 105,619 $ 97,753 $ 88,679 $ 91,604 $ 383,655 $
83,409 $ 80,736 $ 68,901 $ 89,000 $ 322,046 Advanced Flow Solutions
60,241 69,153
70,579 72,639
272,612 67,389
65,656 65,932
69,236
268,213
Total $ 165,860 $
166,906 $ 159,258
$ 164,243 $ 656,267
$ 150,798 $
146,392 $ 134,833
$ 158,236 $ 590,259
SEGMENT OPERATING INCOME Energy $ 15,011 $ 12,926 $
12,153 $ 10,296 $ 50,386 $ 9,296 $ 9,293 $ 6,755 $ 9,276 $ 34,619
Advanced Flow Solutions 5,584 7,576 10,077 10,574 33,811 8,452
8,064 8,008 8,939 33,463 Corporate expenses (6,034 )
(5,477 ) (6,078 )
(4,122 ) (21,710 ) (6,488
) (5,431 ) (6,522 )
(7,231 ) (25,672 )
Adjusted Operating Income $ 14,561
$ 15,025 $ 16,152
$ 16,748 $ 62,487
$ 11,260 $ 11,926
$ 8,240 $
10,984 $ 42,410
SEGMENT OPERATING MARGIN % Energy 14.2 % 13.2 % 13.7 % 11.2
% 13.1 % 11.1 % 11.5 % 9.8 % 10.4 % 10.7 % Advanced Flow Solutions
9.3 % 11.0 % 14.3 %
14.6 % 12.4 %
12.5 % 12.3 %
12.1 % 12.9 % 12.5
%
Adjusted Operating Margin 8.8 % 9.0 %
10.1 % 10.2 %
9.5 % 7.5 %
8.1 % 6.1 % 6.9 %
7.2 %
CIRCOR INTERNATIONAL, INC.
RECONCILIATION OF KEY PERFORMANCE
MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE
TERMS
(in thousands, except
percentages)
UNAUDITED
2015 2016 1ST
QTR 2ND QTR
3RD QTR 4TH QTR
TOTAL 1ST QTR
2ND QTR 3RD QTR
4TH QTR
TOTAL NET CASH (USED IN) PROVIDED BY OPERATING
ACTIVITIES $ (16,432 )
$ 8,067 $
5,006 $ 30,501
$ 27,142 $ 7,654
$ 10,100 $
21,196 $ 20,449
$ 59,399 LESS: Capital expenditures,
net of sale proceeds 1,983 3,584
2,837 2,098
10,502 3,934
1,926 3,730
3,402
12,992 FREE CASH FLOW $ (18,415 ) $
4,483 $ 2,169
$ 28,403 $ 16,640
$ 3,720 $ 8,174
$ 17,466 $ 17,047
$ 46,407
TOTAL DEBT
$ 37,546 $ 114,078 $
111,099 $ 90,500 $ 90,500
$ 97,800 $ 97,600 $
92,400 $ 251,200 $ 251,200 LESS:
Cash & cash equivalents 103,883
55,027 53,822
54,541 54,541
66,580 72,970
84,929 58,279
58,279 NET (CASH) DEBT $ (66,337
) $ 59,051 $
57,277 $ 35,959
$ 35,959 $ 31,220
$ 24,630 $ 7,471
$ 192,921 $
192,921 TOTAL SHAREHOLDERS' EQUITY $ 462,384 $ 421,070 $
407,979 $ 400,777 $ 400,777 $ 414,107 $ 411,367 $ 416,598 $ 404,410
$ 404,410
TOTAL DEBT AS % OF EQUITY 8 %
27 % 27 % 23 % 23
% 24 % 24 % 22 %
62 % 62 % NET DEBT AS % OF
EQUITY (14 )% 14 % 14
% 9 % 9 % 8 %
6 % 2 % 48 % 48
%
CIRCOR INTERNATIONAL, INC.
RECONCILIATION OF KEY PERFORMANCE
MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE
TERMS
(in thousands, except per share
data)
UNAUDITED
2015 2016 1ST
QTR 2ND QTR
3RD QTR 4TH QTR
TOTAL 1ST QTR
2ND QTR 3RD QTR
4TH QTR
TOTAL NET INCOME (LOSS) $ 8,913
$ 1,872 $ (8,078 ) $
7,156 $ 9,863 $ 3,872 $
3,813 $ 4,418 $ (2,002 )
$ 10,101 LESS: Restructuring related inventory
charges — 2,005 6,412 974 9,391 1,958 75 — 813 2,846 Amortization
of inventory step-up — — — — — — — — 1,366 1,366 Impairment charges
— — 2,502 — 2,502 — — 208 — 208 Restructuring charges, net 1,512
3,127 342 (347 ) 4,634 1,163 3,259 2,252 2,301 8,975 Acquisition
intangible amortization — 2,110 2,490 2,238 6,838 1,868 1,911 1,888
4,234 9,901 Special charges, net (1 ) 183 7,935 1,603 9,720 776
1,334 379 5,707 8,196 Brazil restatement impact 719 2,509 — — 3,228
— — — — — Income tax impact (579 ) (2,449 )
(968 ) (1,112 )
(5,108 ) (954 )
(1,611 ) (1,519 )
(4,487 ) (8,571 )
ADJUSTED NET INCOME $
10,564 $ 9,357
$ 10,635 $ 10,512
$ 41,068 $ 8,683
$ 8,781 $ 7,626
$ 7,932 $
33,022
EARNINGS (LOSS) PER COMMON SHARE
(Diluted) $ 0.50 $ 0.11 $
(0.49 ) $ 0.43 $ 0.58
$ 0.23 $ 0.23 $ 0.27
$ (0.12 ) $ 0.61 LESS:
Restructuring related inventory charges — 0.12 0.39 0.06 0.57 0.12
— — 0.05 0.17 Amortization of inventory step-up — — — — — — — —
0.08 0.08 Impairment charges — — 0.15 — 0.15 — — 0.01 — 0.01
Restructuring charges, net 0.09 0.19 0.02 (0.02 ) 0.28 0.07 0.20
0.14 0.14 0.54 Acquisition intangible amortization — 0.12 0.15 0.14
0.41 0.11 0.12 0.11 0.26 0.60 Special charges, net — 0.01 0.48 0.10
0.59 0.05 0.08 0.02 0.35 0.50 Brazil restatement impact 0.04 0.15 —
— 0.19 — — — — — Income tax impact (0.03 )
(0.15 ) (0.06 ) (0.07 )
(0.31 ) (0.06 )
(0.10 ) (0.09 )
(0.27 ) (0.52 )
ADJUSTED EARNINGS
PER SHARE (Diluted) $ 0.60 $ 0.55
$ 0.64 $
0.63 $ 2.43
$ 0.52 $ 0.53
$ 0.46 $ 0.48
$ 1.99
CIRCOR INTERNATIONAL, INC.
RECONCILIATION OF KEY PERFORMANCE
MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE
TERMS
(in thousands)
UNAUDITED
2015 2016 1ST
QTR 2ND QTR
3RD QTR 4TH QTR
TOTAL 1ST QTR
2ND QTR 3RD QTR
4TH QTR
TOTAL NET INCOME (LOSS) $ 8,913
$ 1,872 $ (8,078 ) $
7,156 $ 9,863 $ 3,872 $
3,813 $ 4,418 $ (2,002 )
$ 10,101 LESS: Interest expense, net (641 )
(805 ) (828 ) (570 ) (2,844 ) (631 ) (605 ) (605 ) (1,468 ) (3,310
) Depreciation (3,521 ) (3,629 ) (3,526 ) (3,578 ) (14,254 ) (3,263
) (3,213 ) (3,138 ) (3,690 ) (13,304 ) Amortization (710 ) (2,827 )
(3,205 ) (2,939 ) (9,681 ) (2,529 ) (2,569 ) (2,488 ) (4,730 )
(12,316 ) (Provision for) benefit from income taxes (3,284 )
(2,517 ) (4,308 )
(2,456 ) (12,565 )
(1,520 ) (1,478 ) 1,673
1,746 421
EBITDA $ 17,068 $ 11,650
$ 3,789 $
16,698 $ 49,206
$ 11,815 $ 11,678
$ 8,976 $ 6,140
$ 38,610 LESS: Restructuring related
inventory charges — (2,005 ) (6,412 ) (974 ) (9,391 ) (1,958 ) (75
) — (813 ) (2,846 ) Amortization of inventory step-up — — — — — — —
— (1,366 ) (1,366 ) Impairment charges — — (2,502 ) — (2,502 ) — —
(208 ) — (208 ) Restructuring charges, net (1,512 ) (3,127 ) (342 )
347 (4,634 ) (1,163 ) (3,259 ) (2,252 ) (2,301 ) (8,975 ) Special
charges, net 1 (183 ) (7,935 ) (1,603 ) (9,720 ) (776 ) (1,334 )
(379 ) (5,707 ) (8,196 ) Brazil restatement impact (719 )
(2,509 ) —
— (3,228 )
— — —
— —
ADJUSTED EBITDA $ 19,298 $
19,474 $ 20,980
$ 18,928 $ 78,681
$ 15,712 $ 16,346
$ 11,815 $ 16,327
$ 60,201
CIRCOR INTERNATIONAL, INC.
RECONCILIATION OF KEY PERFORMANCE
MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE
TERMS
(in thousands, except
percentages)
UNAUDITED
2015 2016 1ST
QTR 2ND QTR
3RD QTR 4TH QTR
TOTAL 1ST QTR
2ND QTR 3RD QTR
4TH QTR
TOTAL GAAP OPERATING INCOME (LOSS) $ 12,331
$ 5,090 $ (3,529 )
$ 12,281 $ 26,174 $ 5,495
$ 5,347 $ 3,513 $
(3,437 ) $ 10,918 LESS: Restructuring related
inventory charges — 2,005 6,412 974 9,391 1,958 75 — 813 2,846
Amortization of inventory step-up — — — — — — — — 1,366 1,366
Impairment charges — — 2,502 — 2,502 — — 208 — 208 Restructuring
charges, net 1,512 3,127 342 (347 ) 4,634 1,163 3,259 2,252 2,301
8,975 Acquisition intangible amortization — 2,110 2,490 2,238 6,838
1,868 1,911 1,888 4,234 9,901 Special charges, net (1 ) 183 7,935
1,603 9,720 776 1,334 379 5,707 8,196 Brazil restatement impact 719
2,509 —
— 3,228
— —
— —
—
ADJUSTED OPERATING INCOME $ 14,561
$ 15,025 $
16,152 $ 16,748
$ 62,487 $ 11,260
$ 11,926 $ 8,240
$ 10,984 $ 42,410
GAAP OPERATING MARGIN 7.4 % 3.0 % (2.2 )% 7.5
% 4.0 % 3.6 % 3.7 % 2.6 % (2.2 )% 1.8 % LESS: Restructuring related
inventory charges — % 1.2 % 4.0 % 0.6 % 1.4 % 1.3 % 0.1 % — % 0.5 %
0.5 % Amortization of inventory step-up — % — % — % — % — % — % — %
— % 0.9 % 0.2 % Impairment charges — % — % 1.6 % — % 0.4 % — % — %
0.2 % — % — % Restructuring charges, net 0.9 % 1.9 % 0.2 % (0.2 )%
0.7 % 0.8 % 2.2 % 1.7 % 1.5 % 1.5 % Acquisition intangible
amortization — % 1.3 % 1.6 % 1.4 % 1.0 % 1.2 % 1.3 % 1.4 % 2.7 %
1.7 % Special charges, net — % 0.1 % 5.0 % 1.0 % 1.5 % 0.5 % 0.9 %
0.3 % 3.6 % 1.4 % Brazil restatement impact 0.4 %
1.5 % — %
— % 0.5 % —
% — % — %
— % — %
ADJUSTED OPERATING
MARGIN 8.8 % 9.0 %
10.1 % 10.2 %
9.5 % 7.5 %
8.1 % 6.1 %
6.9 % 7.2 %
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version on businesswire.com: http://www.businesswire.com/news/home/20170216005576/en/
CIRCOR InternationalRajeev Bhalla, 781-270-1200Executive Vice
President & Chief Financial Officer
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