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CIRCOR Reports First-Quarter 2021 Financial Results

Nachrichtenquelle: Business Wire (engl.)
12.05.2021, 12:30  |  85   |   |   

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 first quarter ended April 4, 2021.

First Quarter 2021 Overview:

  • Strong orders of $227 million, up 35% sequentially, with improvement across end markets
  • Orders up 9% reported and 7% organically
    • Industrial orders of $154 million, up 13% reported and 11% organically
    • Aerospace & Defense orders of $73 million, up 1% reported and flat organically
  • Revenue of $181 million, down (6)% reported and (8)% organically
    • Industrial revenue of $121 million, down (5)% reported and (6)% organically
    • Aerospace & Defense revenue of $60 million, down (8)% reported and (10)% organically
  • GAAP operating margin of 0.2%; Adjusted operating margin of 6.9%, up 110 bps
  • GAAP loss per share of $(0.35); Adjusted earnings per share of $0.24, up 20%
  • GAAP operating cash flow of $(18) million; Free cash flow of $(21) million, up 23%

CIRCOR President and CEO Scott Buckhout said, “Our team delivered solid first quarter 2021 results highlighted by sequential orders growth of 35%. Notably, we secured several large orders in our Defense business and saw recovery across virtually all industrial end markets. We are well positioned to deliver our 2021 commitments."

Mr. Buckhout continued, "We continue to make progress on our strategic priorities. With eight new product launches in the first quarter, we are on track to deliver 45 new products in 2021 that will further improve our product line vitality and support our long-term organic growth targets. In addition, we expect continued margin expansion and free cash flow improvement through the year as we drive value-based pricing, and further improve our operations using the CIRCOR Operating System.”

Mr. Buckhout concluded, "With our $421 million backlog, we’re confident that we will deliver the high end of our 2021 organic revenue growth and adjusted EPS guidance provided in March. Going forward, we continue to focus on creating long-term value for shareholders by positioning the Company for growth, expanding margins, generating strong free cash flow, and de-levering the balance sheet.”

2Q'21 Guidance Update

In the second quarter of 2021, CIRCOR expects reported revenue to increase from 0 to 2% and organic revenue to decline (2) - (4)%. On a reported basis, Industrial revenue is expected to grow 1 to 4% led by our shorter cycle businesses and Aerospace & Defense revenue is expected to decrease 0 to (5)% driven by continued lower demand in Commercial Aerospace and timing of Defense shipments. In both businesses, strong orders in the first quarter will lead to higher deliveries in the second half of 2021. In addition, CIRCOR expects adjusted EPS of $0.30 to $0.35 and free cash flow is expected to be breakeven to slightly negative.

2021 Guidance Update

For the full year of 2021, CIRCOR now expects organic revenue growth in the range of 2 to 4% (previously 0 to 4%) and Adjusted EPS of $2.10 to $2.30 (previously $2.00 to $2.20). This updated guidance reflects our latest view of the Industrial business, which is now expected to grow low to mid-single digits, and increased confidence in our Aerospace & Defense outlook. We continue to expect adjusted net income to free cash flow conversion to be 85% to 95% and will use 2021 free cash flow to deleverage CIRCOR.

Presentation slides that provide supporting information to this guidance and first-quarter results are posted on the “Investors” section of the Company’s website and will be discussed during the conference call at 9:00 a.m. ET today.

Conference Call Information

CIRCOR International will hold a conference call to review its financial results at 9:00 a.m. ET today, May 12, 2021. To listen to the live conference call and view the accompanying presentation slides, please visit “Webcasts & Presentations” in the “Investors” portion of CIRCOR’s website. The live call also can be accessed by dialing (877) 407-5790 or (201) 689-8328. Participants are encouraged to dial in to the call at least 15 minutes prior to the start time. The webcast will be archived on the Company’s website for one year.

Selected Preliminary Consolidated Results

 

($ millions except EPS)

 

Q1 2021

 

Q1 2020

 

Change

Revenue

 

$

180.7

 

 

$

192.2

 

 

-6

%

Revenue - excluding divested businesses1

 

180.7

 

 

187.3

 

 

-4

%

GAAP operating (loss) income

 

0.4

 

 

(73.4

)

 

101

%

Adjusted operating income2

 

12.4

 

 

11.1

 

 

12

%

GAAP operating margin

 

0.2

%

 

(38.2

)%

 

3840 bps

 

Adjusted operating margin2

 

6.9

%

 

5.8

%

 

110 bps

 

Adjusted operating margin ex divestitures2

 

6.9

%

 

5.9

%

 

100 bps

 

GAAP loss per share (diluted)

 

$

(0.35

)

 

$

(3.96

)

 

91

%

Adjusted earnings per share (diluted)2

 

$

0.24

 

 

$

0.20

 

 

20

%

Operating cash flow

 

(17.7

)

 

(23.9

)

 

26

%

Free cash flow3

 

(21.1

)

 

(27.4

)

 

23

%

Orders

 

226.7

 

 

208.5

 

 

9

%

Orders - excluding divested businesses1

 

226.7

 

 

204.0

 

 

11

%

 

Segment Results

 

($ in millions)

 

Q1 2021

 

Q1 2020

 

Change

Aerospace & Defense

 

 

 

 

 

 

Revenue

 

$

60.0

 

 

$

65.5

 

 

-8

%

Segment operating income

 

10.7

 

 

12.5

 

 

-14

%

Segment operating margin

 

17.8

%

 

19.1

%

 

-130 bps

 

Orders

 

73.0

 

 

72.0

 

 

1

%

 

 

 

 

 

 

 

Industrial

 

 

 

 

 

 

Revenue

 

$

120.7

 

 

$

126.7

 

 

-5

%

Revenue - excluding divested businesses1

 

120.7

 

 

121.8

 

 

-1

%

Segment operating income

 

9.7

 

 

5.2

 

 

88

%

Segment operating margin (adjusted)

 

8.1

%

 

4.2

%

 

380 bps

 

Orders

 

153.7

 

 

136.4

 

 

13

%

Orders - excluding divested businesses1

 

153.7

 

 

132.0

 

 

16

%

  1. Orders and revenue excluding divested businesses are non-GAAP measures and are calculated by subtracting the orders and revenues generated by the divested businesses during the periods prior to their divestiture from reported orders and revenues. Divested businesses include Instrumentation & Sampling (all Industrial) which was sold during Q1 2020.
  2. Adjusted consolidated and segment results for Q1 2021 exclude net loss from discontinued operations of $0.2 million and net loss from non-cash acquisition-related intangible amortization, special and restructuring charges totaling $12.1 million. These charges include: (i) $12.9 million for non-cash acquisition-related intangible amortization and depreciation expense; and (ii) $0.8 million of other special and restructuring recoveries. 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.
  3. Free cash flow is a non-GAAP financial measure and is calculated by subtracting GAAP capital expenditures, net of proceeds from asset sales, from GAAP operating cash flow.

Use of Non-GAAP Financial Measures

Adjusted operating income, adjusted operating margin, adjusted net income, adjusted earnings per share (diluted), EBITDA, adjusted EBITDA, net debt, free cash flow and organic growth (and such measures further excluding discontinued operations) are non-GAAP financial measures. These non-GAAP financial measures are used by management in our financial and operating decision making because we believe they reflect our ongoing business and facilitate period-to-period comparisons. We believe these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating the Company’s current operating performance and future prospects in the same manner as management does, if they so choose. These non-GAAP financial measures also allow investors and others to compare the Company’s current financial results with the Company’s past financial results in a consistent manner. For example:

We exclude costs and tax effects associated with restructuring activities, such as reducing overhead and consolidating facilities. We believe that the costs related to these restructuring activities are not indicative of our normal operating costs.

We exclude certain acquisition-related costs, including significant transaction costs and amortization of inventory and fixed-asset step-ups and the related tax effects. We exclude these costs because we do not believe they are indicative of our normal operating costs.

We exclude the expense and tax effects associated with the non-cash amortization of acquisition-related intangible assets because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have lives up to 25 years. Exclusion of the non-cash amortization expense allows comparisons of operating results that are consistent over time for both our newly acquired and long-held businesses and with both acquisitive and non-acquisitive peer companies.

We also exclude certain gains/losses and related tax effects, which are either isolated or cannot be expected to occur again with any predictability, and that we believe are not indicative of our normal operating gains and losses. For example, we exclude gains/losses from items such as the sale of a business, significant litigation-related matters and lump-sum pension plan settlements. We exclude the results of discontinued operations.

We exclude goodwill impairment charges. We exclude these costs because we do not believe they are indicative of our normal operating costs.

Due to the significance of recently sold businesses and to provide a comparison of changes in our orders and revenue, we also discuss these changes on an “organic” basis. Organic is calculated assuming the divestitures completed prior to April 4, 2021 were completed on January 1, 2020 and excluding the impact of changes in foreign currency exchange rates.

CIRCOR’s management uses these non-GAAP measures, in addition to GAAP financial measures, as the basis for measuring the Company’s operating performance and comparing such performance to that of prior periods and to the performance of our peers. We use such measures when publicly providing our business outlook, assessing future earnings potential, evaluating potential acquisitions and dispositions and in our financial and operating decision-making process, including for compensation purposes.

Investors should recognize that these non-GAAP measures might not be comparable to similarly titled measures of other companies. These measures should be considered in addition and not as a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with accounting principles generally accepted in the United States. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is included in this 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, 2020, which is filed with the Securities and Exchange Commission ("SEC") and is available on the SEC's website at www.sec.gov. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

About CIRCOR International, Inc.

CIRCOR International is one of the world’s leading providers of mission critical flow control products and services for the Industrial and Aerospace & Defense markets. The Company has a product portfolio of market-leading brands serving its customers’ most demanding applications. CIRCOR markets its solutions directly and through various sales partners to more than 14,000 customers in approximately 100 countries. The Company has a global presence with approximately 3,100 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

 

 

April 4, 2021

 

March 29, 2020

 

 

 

 

 

Net revenues

$

180,655

 

 

$

192,213

 

Cost of revenues

124,574

 

 

132,170

 

Gross profit

56,081

 

 

60,043

 

Selling, general and administrative expenses

56,504

 

 

59,558

 

Goodwill impairment charge

 

 

116,182

 

Special and restructuring charges (recoveries), net

(809

)

 

(42,292

)

Operating income (loss)

386

 

 

(73,405

)

Other expense (income), net:

 

 

 

Interest expense, net

8,369

 

 

9,011

 

Other expense (income), net

(1,503

)

 

(2,680

)

Total other expense, net

6,866

 

 

6,331

 

(Loss) income from continuing operations before income taxes

(6,480

)

 

(79,736

)

Provision for (benefit from) income taxes

400

 

 

8,374

 

(Loss) income from continuing operations, net of tax

(6,880

)

 

(88,110

)

Income (loss) from discontinued operations, net of tax

(239

)

 

9,162

 

Net loss

$

(7,119

)

 

$

(78,948

)

 

 

 

 

 

Basic income (loss) per common share:

 

 

 

Basic from continuing operations

$

(0.34

)

 

$

(4.42

)

Basic from discontinued operations

$

(0.01

)

 

$

0.46

 

Net loss

$

(0.35

)

 

$

(3.96

)

Diluted income (loss) per common share:

 

 

 

Diluted from continuing operations

$

(0.34

)

 

$

(4.42

)

Diluted from discontinued operations

$

(0.01

)

 

$

0.46

 

Net loss

$

(0.35

)

 

$

(3.96

)

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

Basic

20,054

 

 

19,935

 

Diluted

20,054

 

 

19,935

 

CIRCOR INTERNATIONAL, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands) (unaudited)

 

 

Three Months Ended

 

 

April 4, 2021

 

March 29, 2020

OPERATING ACTIVITIES

 

 

 

Net loss

$

(7,119

)

 

$

(78,948

)

Loss from discontinued operations, net of income taxes

(239

)

 

9,162

 

Loss from continuing operations

(6,880

)

 

(88,110

)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

 

 

 

Depreciation

6,509

 

 

5,121

 

Amortization

10,696

 

 

10,611

 

Provision for bad debt expense

(254

)

 

5,802

 

Write down of inventory

129

 

 

343

 

Compensation expense for share-based plans

1,402

 

 

608

 

Amortization of debt issuance costs

995

 

 

4,513

 

Deferred tax provision

823

 

 

 

Goodwill impairment charge

 

 

116,182

 

(Gain) loss on sale of businesses

(1,947

)

 

(54,356

)

Changes in operating assets and liabilities, net of effects of acquisition and disposition:

 

 

 

Trade accounts receivable

(3,793

)

 

(1,550

)

Inventories

(8,055

)

 

(13,365

)

Prepaid expenses and other assets

(15,332

)

 

(5,507

)

Accounts payable, accrued expenses and other liabilities

(1,360

)

 

1,081

 

Net cash (used in) provided by continuing operating activities

(17,067

)

 

(18,627

)

Net cash used in discontinued operating activities

(636

)

 

(5,320

)

Net cash used in operating activities

(17,703

)

 

(23,947

)

INVESTING ACTIVITIES

 

 

 

Additions to property, plant and equipment

(3,394

)

 

(3,412

)

Proceeds from sale of property, plant and equipment

2

 

 

 

Proceeds from the sale of business

7,193

 

 

169,773

 

Proceeds from beneficial interest of factored receivables

812

 

 

599

 

Net cash provided by continuing investment activities

4,613

 

 

166,960

 

Net cash used in discontinued investing activities

 

 

68

 

Net cash provided by investing activities

4,613

 

 

167,028

 

FINANCING ACTIVITIES

 

 

 

Proceeds from long-term debt

63,500

 

 

129,325

 

Payments of long-term debt

(46,500

)

 

(180,891

)

Withholding tax payments on restricted and performance stock units converted

(3,274

)

 

 

Proceeds from the exercise of stock options

151

 

 

118

 

Net cash provided by (used) in financing activities

13,877

 

 

(51,448

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(1,545

)

 

(5,389

)

(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

(758

)

 

86,244

 

Cash, cash equivalents, and restricted cash at beginning of period

77,696

 

 

85,727

 

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD

$

76,938

 

 

$

171,971

 

CIRCOR INTERNATIONAL, INC.

Condensed Consolidated Balance Sheets

(in thousands) (unaudited)

 

 

 

April 4, 2021

 

December 31, 2020

ASSETS

 

 

 

CURRENT ASSETS:

 

 

 

Cash and cash equivalents

$

75,680

 

 

$

76,452

 

Trade accounts receivable, less allowance for doubtful accounts of $8,585 and $9,035 at April 4, 2021 and December 31, 2020, respectively

105,607

 

 

102,730

 

Inventories

135,291

 

 

129,084

 

Prepaid expenses and other current assets

103,632

 

 

93,226

 

Assets held for sale

 

 

5,073

 

Total Current Assets

 

420,210

 

 

406,565

 

PROPERTY, PLANT AND EQUIPMENT, NET

163,431

 

 

168,763

 

OTHER ASSETS:

 

 

 

Goodwill

156,917

 

 

158,944

 

Intangibles, net

337,864

 

 

353,595

 

Deferred income taxes

781

 

 

779

 

Other assets

43,999

 

 

41,882

 

TOTAL ASSETS

$

1,123,202

 

 

$

1,130,528

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

CURRENT LIABILITIES:

 

 

 

Accounts payable

$

67,126

 

 

$

61,236

 

Accrued expenses and other current liabilities

67,059

 

 

75,624

 

Accrued compensation and benefits

31,338

 

 

28,332

 

Total Current Liabilities

 

165,523

 

 

165,192

 

LONG-TERM DEBT

525,573

 

 

507,888

 

DEFERRED INCOME TAXES

27,071

 

 

28,980

 

PENSION LIABILITY, NET

156,746

 

 

163,642

 

OTHER NON-CURRENT LIABILITIES

52,183

 

 

58,785

 

COMMITMENTS AND CONTINGENCIES

 

 

 

SHAREHOLDERS' EQUITY:

 

 

 

Preferred stock, $0.01 par value; 1,000,000 shares authorized; no shares issued and outstanding

 

 

 

Common stock, $0.01 par value; 29,000,000 shares authorized; 21,543,496 and 21,373,813 issued at April 4, 2021 and December 31, 2020 respectively

216

 

 

214

 

Additional paid-in capital

451,858

 

 

452,728

 

(Accumulated deficit) retained earnings

(93,580

)

 

(86,461

)

Common treasury stock, at cost (1,372,488 shares at April 4, 2021 and December 31, 2020)

(74,472

)

 

(74,472

)

Accumulated other comprehensive loss, net of tax

(87,916

)

 

(85,968

)

Total Shareholders' Equity

 

196,106

 

 

206,041

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

1,123,202

 

 

$

1,130,528

 

CIRCOR INTERNATIONAL, INC.

Summary of Orders and Backlog

(in millions) (unaudited)

 

 

 

 

 

Three Months Ended

 

 

 

 

April 4, 2021

 

March 29, 2020

 

 

 

 

 

 

 

ORDERS (1)

 

 

 

 

 

 

Aerospace & Defense

 

$

73.0

 

 

$

72.0

 

 

 

Industrial

 

153.7

 

 

136.4

 

 

 

Total Orders

 

$

226.7

 

 

$

208.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

April 4, 2021

 

March 29, 2020

BACKLOG (2)

 

 

 

 

 

 

Aerospace & Defense

 

$

194.7

 

 

$

199.0

 

 

 

Industrial

 

226.4

 

 

222.2

 

 

 

Total Backlog

 

$

421.1

 

 

$

421.2

 

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 $4.4 million.

Note 2: Backlog includes unshipped customer orders for which revenue has not been recognized.

CIRCOR INTERNATIONAL, INC.

Segment Information

(in thousands, except percentages)

UNAUDITED

 

 

 

2020

2021

As reported

 

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

ORDERS

 

 

 

 

 

 

 

Aerospace & Defense

 

$

72,031

 

$

76,616

 

$

59,105

 

$

46,796

 

$

254,548

 

$

72,999

 

Industrial

 

136,443

 

116,023

 

107,453

 

121,690

 

481,609

 

153,695

 

Total

 

$

208,474

 

$

192,639

 

$

166,558

 

$

168,486

 

$

736,157

 

$

226,693

 

 

 

 

 

 

 

 

 

NET REVENUES

 

 

 

 

 

 

 

Aerospace & Defense

 

$

65,493

 

$

62,241

 

$

62,249

 

$

77,839

 

$

267,822

 

$

60,001

 

Industrial

 

126,720

 

123,825

 

124,391

 

130,513

 

505,449

 

120,654

 

Total

 

$

192,213

 

$

186,066

 

$

186,640

 

$

208,352

 

$

773,271

 

$

180,655

 

 

 

 

 

 

 

 

 

SEGMENT OPERATING INCOME

 

 

 

 

 

 

 

Aerospace & Defense

 

$

12,494

 

$

13,142

 

$

14,782

 

$

18,675

 

$

59,093

 

$

10,706

 

Industrial

 

5,169

 

12,406

 

9,807

 

12,441

 

39,823

 

9,735

 

Corporate expenses

 

(6,588

)

(9,664

)

(7,244

)

(7,789

)

(31,285

)

(8,002

)

Total

 

$

11,075

 

$

15,884

 

$

17,345

 

$

23,327

 

$

67,631

 

$

12,439

 

 

 

 

 

 

 

 

 

SEGMENT OPERATING MARGIN %

 

 

 

 

 

 

 

Aerospace & Defense

 

19.1

%

21.1

%

23.7

%

24.0

%

22.1

%

17.8

%

Industrial

 

4.1

%

10.0

%

7.9

%

9.5

%

7.9

%

8.1

%

Total

 

5.8

%

8.5

%

9.3

%

11.2

%

8.7

%

6.9

%

 

 

 

 

 

 

2020

2021

Results of divested businesses (1)

 

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

ORDERS - Industrial

 

$

4,449

 

$

 

$

 

$

 

$

4,449

 

$

 

NET REVENUES - Industrial

 

$

4,900

 

$

 

$

 

$

 

$

4,900

 

$

 

SEGMENT OP. INC. - Industrial

 

$

 

$

 

$

 

$

 

$

 

$

 

CIRCOR INTERNATIONAL, INC.

Supplemental Information Regarding Divested Businesses

(in thousands, except percentages) (unaudited)

 

 

 

2020

2021

Results excluding divested businesses

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

ORDERS

 

 

 

 

 

 

Aerospace & Defense

$

72,031

 

$

76,616

 

$

59,105

 

$

46,796

 

$

254,548

 

$

72,999

 

Industrial

 

131,994

 

 

116,023

 

 

107,453

 

 

121,690

 

 

477,160

 

 

153,695

 

Total

$

204,025

 

$

192,639

 

$

166,558

 

$

168,486

 

$

731,708

 

$

226,693

 

 

 

 

 

 

 

 

 

NET REVENUES

 

 

 

 

 

 

Aerospace & Defense

$

65,493

 

$

62,241

 

$

62,249

 

$

77,839

 

$

267,822

 

$

60,001

 

Industrial

 

121,820

 

 

123,825

 

 

124,391

 

 

130,513

 

 

500,549

 

 

120,654

 

Total

$

187,313

 

$

186,066

 

$

186,640

 

$

208,352

 

$

768,371

 

$

180,655

 

 

 

 

 

 

 

 

 

SEGMENT OPERATING INCOME

 

 

 

 

 

 

Aerospace & Defense

$

12,494

 

$

13,142

 

$

14,782

 

$

18,675

 

$

59,093

 

$

10,706

 

Industrial

 

5,169

 

 

12,406

 

 

9,807

 

 

12,441

 

 

39,823

 

 

9,735

 

Corporate expenses

 

(6,588

)

 

(9,664

)

 

(7,244

)

 

(7,789

)

 

(31,285

)

 

(8,002

)

Total

$

11,075

 

$

15,884

 

$

17,345

 

$

23,327

 

$

67,631

 

$

12,439

 

 

 

 

 

 

 

 

 

SEGMENT OPERATING MARGIN %

 

 

 

 

 

 

Aerospace & Defense

 

19.1

%

 

21.1

%

 

23.7

%

 

24.0

%

 

22.1

%

 

17.8

%

Industrial

 

4.2

%

 

10.0

%

 

7.9

%

 

9.5

%

 

8.0

%

 

8.1

%

Total

 

5.9

%

 

8.5

%

 

9.3

%

 

11.2

%

 

8.8

%

 

6.9

%

 

 

 

 

 

 

 

 

(1) Divested businesses are related to the Industrial Segment and include Instrumentation & Sampling. Distributed Valves are discontinued operations and not reflected in the As Reported figures in accordance with US GAAP.

CIRCOR INTERNATIONAL, INC.

Reconciliation of Key Performance Measures to Commonly Used Generally Accepted Accounting Principle Terms

(in thousands, except percentages) (unaudited)

 

 

 

2020

2021

 

 

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

 

 

 

 

 

 

 

 

Net Cash (Used In) Provided By Operating Activities

 

$

(23,947

)

$

(24,883

)

$

2,465

 

$

23,641

 

$

(22,724

)

$

(17,703

)

LESS

 

 

 

 

 

 

 

Capital expenditures, net of sale proceeds (a)

 

 

3,412

 

 

3,527

 

 

2,330

 

 

3,275

 

 

12,544

 

 

3,392

 

FREE CASH FLOW

 

$

(27,359

)

$

(28,410

)

$

135

 

$

20,366

 

$

(35,268

)

$

(21,095

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Debt

 

$

602,288

 

$

592,038

 

$

540,463

 

$

519,938

 

$

519,938

 

$

536,938

 

Less: Cash & Cash equivalents

 

 

170,861

 

 

125,421

 

 

72,772

 

 

76,452

 

 

76,452

 

 

75,680

 

GROSS DEBT, NET OF CASH

 

$

431,427

 

$

466,617

 

$

467,691

 

$

443,486

 

$

443,486

 

$

461,258

 

 

 

 

 

 

 

 

 

TOTAL SHAREHOLDERS' EQUITY

 

$

290,845

 

$

273,351

 

$

220,814

 

$

206,041

 

$

206,041

 

$

196,106

 

 

 

 

 

 

 

 

 

GROSS DEBT AS % OF EQUITY

 

 

207

%

 

217

%

 

245

%

 

252

%

 

252

%

 

274

%

GROSS DEBT, NET OF CASH AS % OF EQUITY

 

 

148

%

 

171

%

 

212

%

 

215

%

 

215

%

 

235

%

 

 

 

 

 

 

 

 

(a) includes capital expenditures, net of sales proceeds of discontinued operations

CIRCOR INTERNATIONAL, INC.

Reconciliation of Key Performance Measures to Commonly Used Generally Accepted Accounting Principle Terms

(in thousands, except percentages) (unaudited)

 

 

 

2020

2021

 

 

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

NET (LOSS) INCOME

 

$

(78,948

)

$

(34,092

)

$

(58,524

)

$

(13,934

)

$

(185,498

)

$

(7,119

)

LESS:

 

 

 

 

 

 

 

Restructuring related inventory charges

 

(602

)

 

351

 

 

(251

)

 

Restructuring charges, net

 

2,883

 

588

 

502

 

972

 

4,945

 

2,060

 

Acquisition amortization

 

10,218

 

10,681

 

10,625

 

10,939

 

42,463

 

10,487

 

Acquisition depreciation

 

974

 

980

 

1,011

 

1,021

 

3,986

 

2,375

 

Special (recoveries) charges, net

 

(45,175

)

5,019

 

436

 

473

 

(39,247

)

(2,869

)

Goodwill Impairment charge

 

116,182

 

 

 

 

116,182

 

 

Income tax impact

 

7,704

 

(22,549

)

53,240

 

13,125

 

51,521

 

(335

)

Net loss (income) from discontinued operations

 

(9,162

)

43,848

 

(341

)

795

 

35,140

 

239

 

ADJUSTED NET INCOME

 

$

4,074

 

$

4,475

 

$

7,300

 

$

13,390

 

$

29,240

 

$

4,838

 

 

 

 

 

 

 

 

 

(LOSS) EARNINGS PER COMMON SHARE (Diluted)

 

$

(3.96

)

$

(1.68

)

$

(2.93

)

$

(0.70

)

$

(9.28

)

$

(0.35

)

LESS:

 

 

 

 

 

 

 

Restructuring related inventory charges

 

(0.03

)

 

0.02

 

 

(0.01

)

 

Restructuring charges, net

 

0.14

 

0.03

 

0.02

 

0.05

 

0.25

 

0.10

 

Acquisition amortization

 

0.51

 

0.53

 

0.53

 

0.55

 

2.13

 

0.52

 

Acquisition depreciation

 

0.05

 

0.05

 

0.05

 

0.05

 

0.20

 

0.12

 

Special (recoveries) charges, net

 

(2.27

)

0.25

 

0.02

 

0.02

 

(1.96

)

(0.14

)

Impairment charge

 

5.83

 

 

 

 

5.81

 

 

Income tax impact

 

0.39

 

(1.11

)

2.66

 

0.66

 

2.58

 

(0.02

)

Earnings (Loss) per share from discontinued operations

 

(0.46

)

2.16

 

(0.02

)

0.04

 

1.76

 

0.01

 

ADJUSTED EARNINGS PER SHARE (Diluted)

 

$

0.20

 

$

0.22

 

$

0.36

 

$

0.66

 

$

1.43

 

$

0.24

 

CIRCOR INTERNATIONAL, INC.

Reconciliation of Key Performance Measures to Commonly Used Generally Accepted Accounting Principle Terms

(in thousands, except percentages) (unaudited)

 

 

 

2020

2021

 

 

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

 

 

 

 

 

 

 

 

NET (LOSS) INCOME

 

$

(78,948

)

$

(34,092

)

$

(58,524

)

$

(13,934

)

$

(185,498

)

$

(7,119

)

LESS:

 

 

 

 

 

 

 

Interest expense, net

 

9,011

 

8,486

 

8,202

 

8,520

 

34,219

 

8,369

 

Depreciation

 

5,121

 

4,958

 

4,802

 

5,504

 

20,385

 

6,509

 

Amortization

 

10,516

 

10,976

 

10,925

 

11,245

 

43,662

 

10,696

 

Provision for income taxes

 

8,374

 

(21,769

)

54,318

 

15,299

 

56,222

 

400

 

Loss (income) from discontinued operations

 

(9,162

)

43,847

 

(341

)

795

 

35,140

 

239

 

EBITDA

 

$

(55,088

)

$

12,406

 

$

19,383

 

$

27,429

 

$

4,130

 

$

19,094

 

LESS:

 

 

 

 

 

 

 

Restructuring related inventory charges (recoveries)

 

(602

)

 

351

 

 

(251

)

 

Restructuring charges, net

 

2,883

 

588

 

502

 

972

 

4,945

 

2,060

 

Special (recoveries) charges, net

 

(45,175

)

5,019

 

436

 

473

 

(39,247

)

(2,869

)

Goodwill impairment charge

 

116,182

 

 

 

 

116,182

 

 

ADJUSTED EBITDA

 

$

18,200

 

$

18,013

 

$

20,671

 

$

28,873

 

$

85,758

 

$

18,285

 

CIRCOR INTERNATIONAL, INC.

Reconciliation of Key Performance Measures to Commonly Used Generally Accepted Accounting Principle Terms

(in thousands, except percentages) (unaudited)

 

 

 

2020

2021

 

 

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

 

 

 

 

 

 

 

 

GAAP OPERATING INCOME (LOSS)

 

$

(73,405

)

$

(1,384

)

$

4,420

 

$

9,923

 

$

(60,446

)

$

386

 

LESS:

 

 

 

 

 

 

 

Restructuring related inventory charges (recoveries)

 

(602

)

 

351

 

 

(251

)

 

Amortization of inventory step-up

 

 

 

 

 

 

 

Restructuring charges, net

 

2,883

 

588

 

502

 

972

 

4,945

 

2,060

 

Acquisition amortization

 

10,218

 

10,681

 

10,625

 

10,939

 

42,463

 

10,487

 

Acquisition depreciation

 

974

 

980

 

1,011

 

1,021

 

3,986

 

2,375

 

Special (recoveries) charges, net

 

(45,175

)

5,019

 

436

 

473

 

(39,247

)

(2,869

)

Goodwill impairment charge

 

116,182

 

 

 

 

116,182

 

 

ADJUSTED OPERATING INCOME

 

$

11,075

 

$

15,884

 

$

17,345

 

$

23,327

 

$

67,631

 

$

12,439

 

 

 

 

 

 

 

 

 

GAAP OPERATING MARGIN

 

(38.2

)%

(0.7

)%

2.4

%

4.8

%

(7.8

)%

0.2

%

LESS:

 

 

 

 

 

 

 

Restructuring related inventory charges (recoveries)

 

(0.3

)%

%

0.2

%

%

%

%

Amortization of inventory step-up

 

%

%

%

%

%

%

Restructuring charges, net

 

1.5

%

0.3

%

0.3

%

0.5

%

0.6

%

1.1

%

Acquisition amortization

 

5.3

%

5.7

%

5.7

%

5.3

%

5.5

%

5.8

%

Acquisition depreciation

 

0.5

%

0.5

%

0.5

%

0.5

%

0.5

%

1.3

%

Special (recoveries) charges, net

 

(23.5

)%

2.7

%

0.2

%

0.2

%

(5.1

)%

(1.6

)%

Goodwill impairment charge

 

60.4

%

%

%

%

15.0

%

%

ADJUSTED OPERATING MARGIN

 

5.8

%

8.5

%

9.3

%

11.2

%

8.7

%

6.9

%

 

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Disclaimer

CIRCOR Reports First-Quarter 2021 Financial Results 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 first …

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