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 fourth
quarter and full year ended December 31, 2020.
Fourth Quarter 2020:
- Revenue of $208 million, down (14)% reported and (10)%
organically
- Aerospace & Defense revenue of $78 million, down (2)%
reported and (3)% organically
- Industrial revenue of $131 million, down (20)% reported, and
(13)% organically
- GAAP operating margin of 4.8%; Adjusted operating margin of
11.2%
- GAAP earnings per share of $(0.70); Adjusted earnings per share
of $0.66
- Strong operating cash flow of $24 million; Free cash flow of
$20 million
Full Year 2020:
- Revenue of $773 million, down (20)% reported and (12)%
organically
- Aerospace & Defense revenue of $268 million, down (2)%
reported and (2)% organically
- Industrial revenue of $505 million, down (27)% reported and
(17)% organically
- GAAP operating margin of (7.8)%; Adjusted operating margin of
8.7%
- GAAP earnings per share of $(9.28); Adjusted earnings per share
of $1.43
- Completed $45 million cost reduction & avoidance plan;
revenue drop through to earnings of 25%
- Operating cash flow of $(23) million impacted by exit of
upstream oil & gas and one-time cash charges; Free cash flow of
$(35) million
- Reduced net debt by $126 million / (22)% and interest expense
by $14 million
- Launched 49 new products in 2020 vs. 33 in 2019
CIRCOR President and CEO Scott Buckhout said, “Our teams were
faced with an unprecedented challenge presented by the global
COVID-19 pandemic in 2020 – a challenge we met head on by
prioritizing the health and safety of our employees, delivering
mission critical equipment and service to our customers, and
executing difficult but necessary cost out actions to preserve our
financial strength. I am proud of the resilience and remarkable
effort of the entire CIRCOR team in navigating a challenging and
dynamic year.”
Mr. Buckhout continued, “Despite the difficult macro
environment, we made significant progress on executing our
strategic plan. We successfully completed our exit from upstream
oil & gas with the sale of Instrumentation & Sampling and
Distributed Valves and significantly reduced our debt position with
the proceeds from these sales. We also executed our value-based
pricing strategy across both businesses while launching a record
number of new products in collaboration with our customers and
suppliers. I am confident that these efforts along with our
continued focus on improving our operations and execution using the
CIRCOR Operating System will position us to take full advantage of
an eventual market recovery.”
Mr. Buckhout concluded, “Looking ahead to 2021, our team remains
focused on delivering for our customers, shareholders, and
employees by executing strategic initiatives that drive organic
growth, expand margins, and drive improved free cash flow to
further reduce debt.”
2021 Guidance
For the full year of 2021, CIRCOR expects organic revenue growth
in the range of 0 to 4%, with low to mid-single digit growth in
Aerospace and Defense and low-single digit growth in Industrial.
Adjusted EPS is expected to be in the range of $2.00 to $2.20
driven by increased sales volume and improved operating margins.
CIRCOR also expects its adjusted net income to free cash flow
conversion to be 85% - 95%. Free cash flow generated in 2021 will
be used to deleverage CIRCOR, and the company continues to target a
net debt to adjusted EBITDA ratio of 2.0x to 2.5x. Presentation
slides that provide supporting information to this guidance and
fourth-quarter and year-end results are posted on the “Investors”
section of the Company’s website and will be discussed during the
conference call at 9:00 a.m. ET today.
Selected Preliminary Consolidated Results
($ in millions except EPS)
Q4 2020
Q4 2019
Change
Q4 YTD 2020
Q4 YTD 2019
Change
Revenue
$
208.4
$
242.6
-14
%
$
773.3
$
964.3
-20
%
Revenue - excluding divested
businesses1
208.4
224.0
-7
%
768.4
869.1
-12
%
GAAP operating (loss) income
9.9
17.0
-42
%
(60.4)
37.7
-260
%
Adjusted operating income2
23.3
32.2
-28
%
67.6
109.8
-38
%
GAAP operating margin
4.8
%
7.0
%
-220 bps
(7.8)
%
3.9
%
-1170 bps
Adjusted operating margin2
11.2
%
13.3
%
-210 bps
8.7
%
11.4
%
-270 bps
Adjusted operating margin ex
divestitures2
11.2
%
13.0
%
-180 bps
8.8
%
10.6
%
-180 bps
GAAP (loss) earnings per share
(diluted)
$
(0.70)
$
0.08
-975
%
$
(9.28)
$
(6.73)
-38
%
Adjusted earnings per share
(diluted)2
$
0.66
$
0.82
-20
%
$
1.43
$
2.62
-45
%
Operating cash flow
23.6
16.8
40
%
(22.7)
15.9
-243
%
Free cash flow3
20.4
18.4
11
%
(35.3)
11.7
-402
%
Orders
168.5
236.6
-29
%
736.2
977.5
-25
%
Orders - excluding divested
businesses1
168.5
218.5
-23
%
731.7
882.3
-17
%
Segment Results
($ in millions)
Q4 2020
Q4 2019
Change
Q4 2020
Q4 2019
Change
Aerospace & Defense
Revenue
$
77.8
$
79.1
-2
%
$
267.8
$
272.6
-2
%
Segment operating income
18.7
19.1
-2
%
59.1
52.5
13
%
Segment operating margin
24.0
%
24.2
%
-20 bps
22.1
%
19.2
%
290 bps
Orders
46.8
68.5
-32
%
254.5
313.9
-19
%
Industrial
Revenue
$
130.5
$
163.6
-20
%
$
505.4
$
691.7
-27
%
Revenue - excluding divested
businesses1
130.5
145.0
-10
%
500.5
596.5
-16
%
Segment operating income
12.4
20.8
-40
%
39.8
90.8
-56
%
Segment operating margin
9.5
%
12.7
%
-320 bps
7.9
%
13.1
%
-520 bps
Orders
121.7
168.1
-28
%
481.6
663.6
-27
%
Orders - excluding divested
businesses1
121.7
150.0
-19
%
477.2
568.4
-16
%
- 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 December 31, 2020.
- Adjusted consolidated and segment results for Q4 2020 exclude
net loss from discontinued operations of $0.8 million and net loss
from non-cash acquisition-related intangible amortization, special
and restructuring charges totaling $13.4 million. These charges
include: (i) $12.0 million for non-cash acquisition-related
intangible amortization and depreciation expense; (ii) $1.4 million
of professional fees and other costs associated with restructuring
and cost reductions. It also excludes the Q4 2020 charge for
valuation allowance against deferred tax assets by virtue of using
an effective tax rate in the adjusted results which is a $14.8
million adjustment to taxes. Adjusted consolidated and
segment results for Q4 2019 exclude net loss from discontinued
operations of $1.6 million and net loss from non-cash
acquisition-related intangible amortization, special and
restructuring charges totaling $15.2 million ($13.4 million, net of
tax). These charges include: (i) $12.2 million for non-cash
acquisition-related intangible amortization expense and
amortization of the step-up in fixed asset values; (ii) $2.3
million related to restructuring and cost saving initiatives; (iii)
$1.3 million of professional fees associated with an unsolicited
tender offer to acquire all outstanding shares of the Company’s
common stock; (iv) $1.2 million related to divestitures, partially
offset by (v) a $1.8 million gain on the sale of a building.
- 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, March 4, 2021. To listen
to the live conference call and view the accompanying presentation
slides, please visit “Webcasts & Presentations” in the
“Investors” section 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 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.
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 December 31, 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 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, 2019, 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 3,100 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
Twelve Months Ended
Q4 2020
Q4 2019
Q4 2020
Q4 2019
Net revenues
$
208,351
$
242,638
$
773,271
$
964,313
Cost of revenues
140,939
164,634
530,844
655,504
Gross profit
67,412
78,004
242,427
308,809
Selling, general and administrative
expenses
56,046
58,029
220,994
248,256
Goodwill impairment charge
—
—
116,182
—
Special and restructuring charges
(recoveries), net
1,444
2,979
(34,303)
22,872
Operating income, (loss)
9,922
16,996
(60,446)
37,681
Other expense (income)
Interest expense, net
8,520
10,763
34,219
48,609
Other (income) expense, net
(758)
1,919
(529)
(836)
Total other expense, net
7,762
12,682
33,690
47,773
Income (loss) from continuing operations
before income taxes
2,160
4,314
(94,136)
(10,092)
Provision for (benefit from) income
taxes
15,299
1,163
56,222
14,676
(Loss) Income from continuing operations,
net of tax
(13,139)
3,151
(150,358)
(24,768)
(Loss) Income from discontinued
operations, net of tax
(795)
(1,595)
(35,140)
(109,167)
Net (Loss) income
$
(13,934)
$
1,556
$
(185,498)
$
(133,935)
Basic (loss) income per common
share:
Basic from continuing operations
$
(0.66)
$
0.16
$
(7.52)
$
(1.24)
Basic from discontinued operations
$
(0.04)
$
(0.08)
$
(1.76)
$
(5.48)
Net (loss) income
$
(0.70)
$
0.08
$
(9.28)
$
(6.73)
Diluted income (loss) per common
share:
Diluted from continuing operations
$
(0.66)
$
0.16
$
(7.52)
$
(1.24)
Diluted from discontinued operations
$
(0.04)
$
(0.08)
$
(1.76)
$
(5.48)
Net (loss) income
$
(0.70)
$
0.08
$
(9.28)
$
(6.73)
Weighted average number of common
shares outstanding:
Basic
20,002
19,920
19,982
19,903
Diluted
20,002
20,148
19,982
19,903
CIRCOR INTERNATIONAL,
INC.
Condensed Consolidated
Statements of Cash Flows
(in thousands)
(unaudited)
Twelve Months Ended
December 31, 2020
December 31, 2019
OPERATING ACTIVITIES
Net loss
$
(185,498)
$
(133,935)
Loss from discontinued operations, net of
income taxes
(35,140)
(109,167)
Loss from continuing operations
(150,358)
(24,768)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation
20,385
22,045
Amortization
43,662
47,591
Provision for bad debt expense
6,099
617
Write down of inventory
3,618
366
Compensation expense for share-based
plans
5,488
5,418
Amortization of debt issuance costs
7,460
4,622
Deferred tax provision
51,319
(3,440)
Loss on sale or write-down of property,
plant and equipment
—
(1,793)
Goodwill impairment charge
116,182
(Gain) loss on sale of businesses
(54,429)
3,615
Changes in operating assets and
liabilities, net of effects of acquisition and disposition:
Trade accounts receivable
23,506
24,339
Inventories
5,780
(9,557)
Prepaid expenses and other assets
(34,824)
7,360
Accounts payable, accrued expenses and
other liabilities
(52,051)
(34,168)
Net cash (used in) provided by continuing
operating activities
(8,163)
42,247
Net cash used in discontinued operating
activities
(14,561)
(26,334)
Net cash used in operating
activities
(22,724)
15,913
INVESTING ACTIVITIES
Additions to property, plant and
equipment
(12,222)
(13,855)
Proceeds from sale of property, plant and
equipment
(322)
6,172
Proceeds from the sale of business
165,540
162,591
Proceeds from beneficial interest of
factored receivables
2,957
861
Net cash provided by continuing investment
activities
155,953
155,769
Net cash used in discontinued investing
activities
(11,658)
(2,733)
Net cash provided by investing
activities
144,295
153,036
FINANCING ACTIVITIES
Proceeds from long-term debt
219,000
281,600
Payments of long-term debt
(352,916)
(434,797)
Proceeds from the exercise of stock
options
118
253
Net cash used in continuing financing
activities
(133,798)
(152,944)
Net cash used in financing
activities
(133,798)
(152,944)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
4,195
197
(DECREASE) INCREASE IN CASH, CASH
EQUIVALENTS, AND RESTRICTED CASH
(8,032)
16,202
Cash, cash equivalents, and restricted
cash at beginning of period
85,727
69,525
CASH, CASH EQUIVALENTS, AND RESTRICTED
CASH AT END OF PERIOD
$
77,695
$
85,727
CIRCOR INTERNATIONAL,
INC.
Condensed Consolidated Balance
Sheets
(in thousands)
(unaudited)
December 31, 2020
December 31, 2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
76,452
$
84,531
Trade accounts receivable, less allowance
for doubtful accounts of $9,035 and $3,086 at December 31, 2020 and
December 31, 2019, respectively
102,730
125,422
Inventories
129,084
137,309
Prepaid expenses and other current
assets
93,770
66,664
Assets held for sale
5,073
161,193
Total Current Assets
407,109
575,119
PROPERTY, PLANT AND EQUIPMENT, NET
168,763
172,179
OTHER ASSETS:
Goodwill
158,944
271,893
Intangibles, net
353,595
385,542
Deferred income taxes
3,990
30,852
Other assets
41,881
35,360
TOTAL ASSETS
$
1,134,282
$
1,470,945
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
$
61,236
$
79,399
Accrued expenses and other current
liabilities
76,168
94,169
Accrued compensation and benefits
28,332
19,518
Liabilities held for sale
—
43,289
Total Current Liabilities
165,736
236,375
LONG-TERM DEBT
507,888
636,297
DEFERRED INCOME TAXES
32,190
21,425
PENSION LIABILITY, NET
163,642
146,801
OTHER NON-CURRENT LIABILITIES
58,785
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; 21,373,813 and 21,284,850 outstanding at
December 31, 2020 and December 31, 2019 respectively
214
213
Additional paid-in capital
452,728
446,657
(Accumulated deficit) retained
earnings
(86,461)
99,280
Common treasury stock, at cost (1,372,488
shares at December 31, 2020 and December 31, 2019)
(74,472)
(74,472)
Accumulated other comprehensive loss, net
of tax
(85,968)
(80,267)
Total Shareholders' Equity
206,041
391,411
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY
$
1,134,282
$
1,470,945
CIRCOR INTERNATIONAL,
INC.
Summary of Orders and
Backlog
(in millions)
(unaudited)
Three Months Ended
Twelve Months Ended
Q4 2020
Q4 2019
Q4 2020
Q4 2019
ORDERS (1)
Aerospace & Defense
$
46.8
$
68.5
$
254.5
$
313.9
Industrial
121.7
168.1
481.6
663.6
Total Orders
$
168.5
$
236.6
$
736.2
$
977.5
Q4 2020
Q4 2019
BACKLOG (2)
Aerospace & Defense
$
182.1
$
194.5
Industrial
197.2
226.2
Total Backlog
$
379.3
$
420.7
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 twelve
months ended December 31, 2020 include orders from businesses
divested prior to December 31, 2020 of $4.5 million. Orders for the
three months ended December 31, 2019 include orders from businesses
divested of $18.0 million ($95.2 million for the twelve months
ended December 31, 2019). 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
at Q4 2019 includes $8.6 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
2ND QTR
3RD QTR
4TH QTR
TOTAL
ORDERS
Aerospace & Defense
$
88,107
$
93,405
$
63,968
$
68,459
$
313,939
$
72,031
$
76,616
$
59,105
$
46,796
$
254,548
Industrial
171,834
164,642
158,986
168,091
663,553
136,443
116,023
107,453
121,690
481,609
Total
$
259,941
$
258,047
$
222,954
$
236,550
$
977,492
$
208,474
$
192,639
$
166,558
$
168,486
$
736,157
NET REVENUES
Aerospace & Defense
$
61,240
$
64,694
$
67,621
$
79,070
$
272,625
$
65,493
$
62,241
$
62,249
$
77,839
$
267,822
Industrial
177,615
181,074
169,431
163,568
691,688
126,720
123,825
124,391
130,513
505,449
Total
$
238,855
$
245,768
$
237,052
$
242,638
$
964,313
$
192,213
$
186,066
$
186,640
$
208,352
$
773,271
SEGMENT OPERATING INCOME
Aerospace & Defense
$
9,374
$
10,443
$
13,564
$
19,099
$
52,480
$
12,494
$
13,142
$
14,782
$
18,675
$
59,093
Industrial
22,581
26,174
21,278
20,757
90,790
5,169
12,406
9,807
12,441
39,823
Corporate expenses
(8,522)
(8,028)
(9,248)
(7,671)
(33,469)
(6,588)
(9,664)
(7,244)
(7,789)
(31,285)
Total
$
23,433
$
28,589
$
25,594
$
32,185
$
109,801
$
11,075
$
15,884
$
17,345
$
23,327
$
67,631
SEGMENT OPERATING MARGIN %
Aerospace & Defense
15.3%
16.1%
20.1%
24.2%
19.2%
19.1%
21.1%
23.7%
24.0%
22.1%
Industrial
12.7%
14.5%
12.6%
12.7%
13.1%
4.1%
10.0%
7.9%
9.5%
7.9%
Total
9.8%
11.6%
10.8%
13.3%
11.4%
5.8%
8.5%
9.3%
11.2%
8.7%
2019
2020
Results of divested businesses
(1)
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
ORDERS - Industrial
$
30,611
$
24,448
$
22,090
$
18,047
$
95,196
$
4,449
$
—
$
—
$
—
$
4,449
NET REVENUES - Industrial
$
29,787
$
26,101
$
20,697
$
18,602
$
95,187
$
4,900
$
—
$
—
$
—
$
4,900
SEGMENT OP. INC. -Industrial
$
6,217
$
5,229
$
2,677
$
3,166
$
17,289
$
—
$
—
$
—
$
—
$
—
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
2ND QTR
3RD QTR
4TH QTR
TOTAL
ORDERS
Aerospace & Defense
$88,107
$93,405
$63,968
$68,459
$313,939
$72,031
$76,616
$59,105
$46,796
$254,548
Industrial
141,223
140,194
136,896
150,044
568,357
131,994
116,023
107,453
121,690
477,160
Total
$229,330
$233,599
$200,864
$218,503
$882,296
$204,025
$192,639
$166,558
$168,486
$731,708
NET REVENUES
Aerospace & Defense
$61,240
$64,694
$67,621
$79,070
$272,625
$65,493
$62,241
$62,249
$77,839
$267,822
Industrial
147,828
154,973
148,734
144,966
596,501
121,820
123,825
124,391
130,513
500,549
Total
$209,068
$219,667
$216,355
$224,036
$869,126
$187,313
$186,066
$186,640
$208,352
$768,371
SEGMENT OPERATING INCOME
Aerospace & Defense
$9,374
$10,443
$13,564
$19,099
$52,480
$12,494
$13,142
$14,782
$18,675
$59,093
Industrial
16,364
20,945
18,601
17,591
73,501
5,169
12,406
9,807
12,441
39,823
Corporate expenses
(8,522)
(8,028)
(9,248)
(7,671)
(33,469)
(6,588)
(9,664)
(7,244)
(7,789)
(31,285)
Total
$17,216
$23,360
$22,917
$29,019
$92,512
$11,075
$15,884
$17,345
$23,327
$67,631
SEGMENT OPERATING MARGIN %
Aerospace & Defense
15.3%
16.1%
20.1%
24.2%
19.2%
19.1%
21.1%
23.7%
24.0%
22.1%
Industrial
11.1%
13.5%
12.5%
12.1%
12.3%
4.2%
10.0%
7.9%
9.5%
8.0%
Total
8.2%
10.6%
10.6%
13.0%
10.6%
5.9%
8.5%
9.3%
11.2%
8.8%
(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.
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
2ND QTR
3RD QTR
4TH QTR
TOTAL
Net Cash (Used In) Provided By Operating
Activities
$(22,378)
$12,339
$9,128
$16,822
$15,913
$(23,947)
$(24,883)
$2,465
$23,641
$(22,724)
LESS
Capital expenditures, net of sale proceeds
(a)
3,689
2,995
(963)
(1,535)
4,186
3,412
3,527
2,330
3,275
12,544
FREE CASH FLOW
$(26,067)
$9,344
$10,091
$18,357
$11,727
$(27,359)
$(28,410)
$135
$20,366
$(35,268)
Gross Debt
$753,950
$748,250
$659,100
$653,850
$653,850
$602,288
$592,038
$540,463
$519,938
$519,938
Less: Cash & Cash equivalents
73,619
76,082
69,225
84,531
84,531
170,861
125,421
72,772
76,452
76,452
GROSS DEBT, NET OF CASH
$680,331
$672,168
$589,875
$569,319
$569,319
$431,427
$466,617
$467,691
$443,486
$443,486
TOTAL SHAREHOLDERS' EQUITY
$516,177
$494,899
$375,388
$391,411
$391,411
$290,845
$273,351
$220,814
$206,041
$206,041
GROSS DEBT AS % OF EQUITY
146%
151%
176%
167%
167%
207%
217%
245%
252%
252%
GROSS DEBT, NET OF CASH AS % OF EQUITY
132%
136%
157%
145%
145%
148%
171%
212%
215%
215%
(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
2ND QTR
3RD QTR
4TH QTR
TOTAL
NET (LOSS) INCOME
$
(4,633)
$
(18,520)
$
(112,338)
$
1,555
$
(133,935)
$
(78,948)
$
(34,092)
$
(58,524)
$
(13,934)
$
(185,498)
LESS:
Restructuring related inventory
charges
325
—
(1,145)
—
(820)
(602)
—
351
—
(251)
Restructuring charges, net
358
299
5,038
(509)
5,186
2,883
588
502
972
4,945
Acquisition amortization
12,077
11,247
11,202
11,189
45,715
10,218
10,681
10,625
10,939
42,463
Acquisition depreciation
1,123
1,106
1,102
1,021
4,352
974
980
1,011
1,021
3,986
Special (recoveries) charges, net
(8,200)
3,917
18,481
3,488
17,686
(45,175)
5,019
436
473
(39,247)
Goodwill Impairment charge
—
—
—
—
—
116,182
—
—
—
116,182
Income tax impact
3,625
(2,266)
5,533
(1,752)
5,140
7,704
(22,549)
53,240
13,125
51,521
Net loss (income) from discontinued
operations
5,728
17,156
84,688
1,595
109,167
(9,162)
43,848
(341)
795
35,140
ADJUSTED NET INCOME
$
10,403
$
12,939
$
12,561
$
16,587
$
52,491
$
4,074
$
4,475
$
7,300
$
13,390
$
29,240
(LOSS) EARNINGS PER COMMON SHARE
(Diluted)
$
(0.23)
$
(0.93)
$
(5.64)
$
0.08
$
(6.73)
$
(3.96)
$
(1.68)
$
(2.93)
$
(0.70)
$
(9.28)
LESS:
Restructuring related inventory
charges
0.02
—
(0.06)
—
(0.04)
(0.03)
—
0.02
—
(0.01)
Restructuring charges, net
0.02
0.02
0.25
(0.03)
0.26
0.14
0.03
0.02
0.05
0.25
Acquisition amortization
0.61
0.57
0.56
0.56
2.30
0.51
0.53
0.53
0.55
2.13
Acquisition depreciation
0.06
0.06
0.06
0.05
0.22
0.05
0.05
0.05
0.05
0.20
Special (recoveries) charges, net
(0.41)
0.20
0.93
0.18
0.89
(2.27)
0.25
0.02
0.02
(1.96)
Impairment charge
—
—
—
—
—
5.83
—
—
—
5.81
Income tax impact
0.18
(0.12)
0.28
(0.10)
0.24
0.39
(1.11)
2.66
0.66
2.58
Earnings (Loss) per share from
discontinued operations
0.29
0.86
4.25
0.08
5.48
(0.46)
2.16
(0.02)
0.04
1.76
ADJUSTED EARNINGS PER SHARE
(Diluted)
$
0.52
$
0.65
$
0.63
$
0.82
$
2.62
$
0.20
$
0.22
$
0.36
$
0.66
$
1.43
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
2ND QTR
3RD QTR
4TH QTR
TOTAL
NET (LOSS) INCOME
$
(4,633)
$
(18,520)
$
(112,338)
$
1,555
$
(133,935)
$
(78,948)
$
(34,092)
$
(58,524)
$
(13,934)
$
(185,498)
LESS:
Interest expense, net
13,094
12,947
11,804
10,763
48,609
9,011
8,486
8,202
8,520
34,219
Depreciation
5,499
5,568
5,551
5,427
22,045
5,121
4,958
4,802
5,504
20,385
Amortization
12,536
11,685
11,629
11,741
47,591
10,516
10,976
10,925
11,245
43,662
Provision for income taxes
5,709
284
7,490
1,193
14,676
8,374
(21,769)
54,318
15,299
56,222
Loss (income) from discontinued
operations
5,728
17,156
84,688
1,595
109,167
(9,162)
43,847
(341)
795
35,140
EBITDA
$
37,933
$
29,121
$
8,825
$
32,274
$
108,152
$
(55,088)
$
12,406
$
19,383
$
27,429
$
4,130
LESS:
Restructuring related inventory charges
(recoveries)
325
—
(1,145)
—
(820)
(602)
—
351
—
(251)
Restructuring charges (recoveries),
net
358
299
5,038
(509)
5,186
2,883
588
502
972
4,945
Special (recoveries) charges, net
(8,200)
3,917
18,481
3,488
17,686
(45,175)
5,019
436
473
(39,247)
Goodwill impairment charge
—
—
—
—
—
116,182
—
—
—
116,182
ADJUSTED EBITDA
$
30,416
$
33,337
$
31,199
$
35,253
$
130,204
$
18,200
$
18,013
$
20,671
$
28,873
$
85,758
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
2ND QTR
3RD QTR
4TH QTR
TOTAL
GAAP OPERATING INCOME (LOSS)
$
17,750
$
12,020
$
(9,084)
$
16,996
$
37,682
$
(73,405)
$
(1,384)
$
4,420
$
9,923
$
(60,446)
LESS:
Restructuring related inventory charges
(recoveries)
325
—
(1,145)
—
(820)
(602)
—
351
—
(251)
Amortization of inventory step-up
—
—
—
—
—
—
—
—
—
—
Restructuring charges (recoveries),
net
358
299
5,038
(509)
5,186
2,883
588
502
972
4,945
Acquisition amortization
12,077
11,247
11,202
11,189
45,715
10,218
10,681
10,625
10,939
42,463
Acquisition depreciation
1,123
1,106
1,102
1,021
4,352
974
980
1,011
1,021
3,986
Special (recoveries) charges, net
(8,200)
3,917
18,481
3,488
17,686
(45,175)
5,019
436
473
(39,247)
Goodwill impairment charge
—
—
—
—
—
116,182
—
—
—
116,182
ADJUSTED OPERATING INCOME
$
23,433
$
28,589
$
25,594
$
32,185
$
109,801
$
11,075
$
15,884
$
17,345
$
23,327
$
67,631
GAAP OPERATING MARGIN
7.4
%
4.9
%
(3.8)
%
7.0
%
3.9
%
(38.2)
%
(0.7)
%
2.4
%
4.8
%
(7.8)
%
LESS:
Restructuring related inventory charges
(recoveries)
0.1
%
0.0
%
(0.5)
%
0.0
%
(0.1)
%
(0.3)
%
0.0
%
0.2
%
0.0
%
0.0
%
Amortization of inventory step-up
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
Restructuring charges (recoveries),
net
0.1
%
0.1
%
2.1
%
(0.2)
%
0.5
%
1.5
%
0.3
%
0.3
%
0.5
%
0.6
%
Acquisition amortization
5.1
%
4.6
%
4.7
%
4.6
%
4.7
%
5.3
%
5.7
%
5.7
%
5.3
%
5.5
%
Acquisition depreciation
0.5
%
0.5
%
0.5
%
0.4
%
0.5
%
0.5
%
0.5
%
0.5
%
0.5
%
0.5
%
Special (recoveries) charges, net
(3.4)
%
1.6
%
7.8
%
1.4
%
1.8
%
(23.5)
%
2.7
%
0.2
%
0.2
%
(5.1)
%
Goodwill impairment charge
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
60.4
%
0.0
%
0.0
%
0.0
%
15.0
%
ADJUSTED OPERATING MARGIN
9.8
%
11.6
%
10.8
%
13.3
%
11.4
%
5.8
%
8.5
%
9.3
%
11.2
%
8.7
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210304005237/en/
Alex Maki Vice President FP&A and Investor Relations CIRCOR
International (781) 270-1200
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