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CIRCOR Reports Financial Results for First Quarter Ended April 2, 2023

  • Q1 Orders up 9% Reported and 13% Organically YoY
  • Q1 GAAP Operating Income of $17.9 Million, Up 252% YoY; Adjusted Operating Income of $28.4 Million, Up 173% YoY
  • Q1 GAAP EPS of $(0.02), Up $1.04 YoY Increases +98 %; Adjusted EPS of $0.53, Up $0.48 YoY Increases +960%
  • Progressing with Review of Strategic Alternatives

CIRCOR International, Inc. (NYSE: CIR) (“CIRCOR” or “the Company”), one of the world’s leading providers of mission critical flow control products and services for the Industrial and Aerospace & Defense markets, today announced financial results for the first quarter ended April 2, 2023.

Q1 2023 Overview (compared with Q1 2022):

  • Revenue of $203 million up 9% reported and 13% organically
    • Aerospace & Defense revenue of $69 million, up 8% reported and 10% organically
    • Industrial revenue of $135 million, up 10% reported and up 15% organically
  • Orders of $242 million, up 9% and 13% organically
    • Aerospace & Defense orders of $84 million, up 8% and 12% organically
    • Industrial orders of $158 million, up 10% and 14% organically
  • GAAP operating income of $17.9 million, up 252%
  • GAAP operating margin of 8.8%, up 1510 bps
  • Adjusted operating income of $28.4 million, up 173%
  • Adjusted operating margin of 14.0%, up 840 bps

President and CEO Tony Najjar said, "Strong orders momentum continued in the first quarter, reflecting our focus on customers and the execution of our growth strategy. Our team delivered organic orders growth of 13%, which was supported by both segments. We benefited from the continued recovery in the commercial aerospace market, strength in our Naval Defense programs, Industrial aftermarket, and value pricing in both the foremarket and aftermarket. Our backlog at the end of Q1 2023 was up 22% to a record $584 million.”

“Our value pricing initiatives, cost controls, and simplification actions continued to serve as growth and margin expansion levers during the quarter," Mr. Najjar continued. "We delivered a 173% increase in first-quarter adjusted operating income and an 840 basis-point improvement in adjusted operating margin supported by both segments. Our year-over-year results represented another step change in margin performance driven by the significant margin expansion in our Industrial and A&D segments. With the actions taken, and our team’s continued operating discipline and focus on our customers, we believe we are well positioned to deliver sustained growth and shareholder value.”

Strategic Review

Related to the Company’s previously announced review of strategic alternatives, CIRCOR’s Board of Directors, supported by external advisors and the management team, continues to progress with the review. Through its external advisors, the Board is in dialogue with a number of parties that have expressed interest in acquiring all or parts of the Company. The Company may suspend or terminate the review at any time and does not intend to make further announcements regarding the process unless and until the Board of Directors approves a course of action for which further disclosure is required or appropriate. The exploration of strategic alternatives may not result in any transaction or strategic change.

Conference Call Information

CIRCOR International will hold a conference call to review its first quarter 2023 financial results at 9:00 a.m. ET today, May 11, 2023. The call may also include discussion of Company developments, and forward-looking and other material information about business and financial matters. 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. https://investors.circor.com/. 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 Consolidated Results

(unaudited)

 

($ millions except EPS)

 

Q1 2023

 

Q1 2022

 

Change

 

Revenue1

 

$

203.1

 

 

$

185.7

 

 

9%

 

GAAP operating income (loss)

 

 

17.9

 

 

 

(11.8

)

 

252%

 

Adjusted operating income2

 

 

28.4

 

 

 

10.4

 

 

173%

 

GAAP operating margin

 

 

8.8

%

 

 

(6.3

)%

 

1510 bps

 

Adjusted operating margin3

 

 

14.0

%

 

 

5.6

%

 

840 bps

 

GAAP (loss) per share

 

$

(0.02

)

 

$

(1.06

)

 

98%

 

Adjusted earnings per share (diluted)4

 

$

0.53

 

 

$

0.05

 

 

960%

 

Operating cash flow

 

 

(13.9

)

 

 

(15.9

)

 

14%

 

Adjusted free cash flow5

 

 

(16.6

)

 

 

(19.5

)

 

15%

 

Orders6

 

$

242.1

 

 

$

221.6

 

 

9%

 

 

Segment Results

(unaudited)

 

($ in millions)

 

Q1 2023

 

Q1 2022

 

Change

 

Aerospace & Defense

 

 

 

 

 

 

 

Revenue

 

$

68.6

 

 

$

63.4

 

 

8%

 

Segment operating income

 

 

14.7

 

 

 

11.3

 

 

30%

 

Segment operating margin

 

 

21.5

%

 

 

17.9

%

 

360 bps

 

Orders6

 

$

84.4

 

 

$

77.9

 

 

8%

 

 

 

 

 

 

 

 

 

Industrial

 

 

 

 

 

 

 

Revenue1

 

$

134.5

 

 

$

122.3

 

 

10%

 

Segment operating income2

 

 

20.4

 

 

 

6.9

 

 

196%

 

Segment operating margin3

 

 

15.2

%

 

 

5.6

%

 

960 bps

 

Orders6

 

$

157.7

 

 

$

143.7

 

 

10%

 

  1. Consolidated and Industrial segment revenues for Q1 2023 and Q1 2022 included $0.0 million and $3.0 million, respectively, relating to our Pipeline Engineering business.
  2. Adjusted operating income is a non-GAAP financial measure. Refer to “Use of Non-GAAP Financial Measures” for an explanation of our non-GAAP financial measures and to the reconciliations included in this press release. Adjusted operating income and Industrial segment operating income for the Q1 2023 and Q1 2022 included $0.1 million and $(3.2) million, respectively, relating to our Pipeline Engineering business.
  3. Adjusted operating margin is a non-GAAP financial measure. Refer to “Use of Non-GAAP Financial Measures” for an explanation of our non-GAAP financial measures and to the reconciliations included in this press release. Refer to “Use of Non-GAAP Financial Measures” for an explanation of our non-GAAP financial measures and to the reconciliations included in this press release. Adjusted operating margin for Q1 2023 and Q1 2022 included 0% and (61)%, respectively, relating to our Pipeline Engineering business.
  4. Adjusted earnings per share (diluted) is a non-GAAP financial measure. Refer to “Use of Non-GAAP Financial Measures” for an explanation of our non-GAAP financial measures and to the reconciliations included in this press release. Refer to “Use of Non-GAAP Financial Measures” for an explanation of our non-GAAP financial measures and to the reconciliations included in this press release. Adjusted earnings per share and our segment results for Q1 2023 exclude net loss from non-cash acquisition-related intangible amortization and special and restructuring charges of $10.5 million, consisting of (i) $9.0 million for non-cash acquisition-related intangible amortization and depreciation expense; (ii) $1.3 million of special charges related to the evaluation of strategic alternatives for the Company; and (iii) other special and restructuring charges net of $0.2 million. Adjusted consolidated and segment results for Q1 2022 exclude net loss from non-cash acquisition-related intangible amortization and special and restructuring charges of $22.2 million. These charges include: (i) $10.4 million for non-cash acquisition-related intangible amortization and depreciation expense; (ii) $8.7 million of restructuring costs associated with the exit of the Pipeline Engineering business; (iii) $1.3 million costs due to the investigation into the accounting irregularities of the Pipeline Engineering business; (iv) $0.9 million charge for severance related to the former CEO; and (v) $0.9 million of other special and restructuring costs.
  5. Adjusted free cash flow, a non-GAAP financial measure, is calculated by subtracting GAAP capital expenditures, net of proceeds from asset sales and third party funding, from GAAP operating cash flow. Refer to “Use of Non-GAAP Financial Measures” for an explanation of our non-GAAP financial measures and to the reconciliations included in this press release. Refer to “Use of Non-GAAP Financial Measures” for an explanation of our non-GAAP financial measures and to the reconciliations included in this press release.
  6. Orders, an operating measure, is defined as a legally binding agreement from an authorized individual at a customer requesting CIRCOR to provide goods and/or services at a fixed or determinable price and CIRCOR is capable of providing such goods and services, when the terms and conditions are firm enough to assure subsequent payment by the customer. Consolidated and Industrial segment orders for Q1 2023 and Q1 2022 included $0.0 million and $2.3 million, respectively, relating to our Pipeline Engineering business.

Use of Non-GAAP Financial Measures

In this press release, the Company uses the non-GAAP financial measures adjusted net income, adjusted EBITDA, adjusted operating income, adjusted operating margin, adjusted earnings per share, adjusted free cash flow, and gross debt, net of cash. 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 that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating CIRCOR’s current operating performance and future prospects in the same manner as management does if they so choose. These non-GAAP financial measures can also assist investors and others in comparing CIRCOR’s current financial results with CIRCOR’s past financial results in a consistent manner.

We exclude costs and tax effects associated with special and restructuring activities, such as reducing overhead and consolidating facilities. We believe that the costs related to special and 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 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 or exited businesses and to provide a comparison of changes in our revenue and orders (an operating measure), we also discuss these changes on an “organic” basis. Organic is calculated assuming the divestitures and/or exited businesses completed prior to April 2, 2023 were completed on January 1, 2022 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.

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 3,060 employees and is headquartered in Burlington, Massachusetts. For more information, visit the Company’s investor relations website at http://investors.circor.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. All statements that address expectations or projections about the future, including with respect to the Company’s expectations for its performance in 2023 or relating to the Company’s strategic review are forward-looking statements. Actual results may differ materially from the expectations the Company describes in its forward-looking statements. Substantial 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. Important factors that could cause actual results to differ materially from expectations include, but are not limited to the inability to achieve expected results in pricing and cost out actions and the related impact on margins and cash flow; the effectiveness of the Company’s internal control over financial reporting and disclosure controls and procedures; the remediation of the material weaknesses in the Company’s internal controls over financial reporting or other potential weaknesses of which the Company is not currently aware or which have not been detected; the timing and outcome, if any, of the Company’s strategic alternatives review; 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, rising inflation, increasing interest rates, natural disasters, military conflicts, including the conflict between Russia and Ukraine, terrorist attacks and other similar matters, and the risks detailed from time to time in the Company’s periodic reports filed with the Securities Exchange Commission. Before making any investment decisions regarding CIRCOR, the Company strongly advises you to read the section entitled “Risk Factors” in its 2022 annual report on Form 10-K, which can be accessed under the “Investors” link of the Company’s website at www.circor.com. These forward-looking statements are made as of the date of this press release, and the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

 

CIRCOR INTERNATIONAL, INC

CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands, except per share data) (unaudited)

 

 

Three Months Ended

 

April 2, 2023

 

April 3, 2022

Net revenues

$

203,097

 

 

$

185,655

 

Cost of revenues

 

129,031

 

 

 

130,372

 

Gross profit

 

74,066

 

 

 

55,283

 

Selling, general and administrative expenses

 

54,666

 

 

 

58,069

 

Special and restructuring charges, net

 

1,484

 

 

 

9,003

 

Operating income (loss)

 

17,916

 

 

 

(11,789

)

Other expense (income):

 

 

 

Interest expense, net

 

14,528

 

 

 

9,456

 

Other expense (income), net

 

214

 

 

 

(1,287

)

Total other expense, net

 

14,742

 

 

 

8,169

 

Income (loss) before income taxes

 

3,174

 

 

 

(19,958

)

Provision for income taxes

 

3,581

 

 

 

1,523

 

Net loss

$

(407

)

 

$

(21,481

)

 

 

 

 

Net loss per share (basic and diluted)

$

(0.02

)

 

$

(1.06

)

 

 

 

 

Weighted-average common shares (basic and diluted)

 

20,368

 

 

 

20,310

 

 

CIRCOR INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands) (unaudited)

 

 

Three Months Ended

 

April 2, 2023

 

April 3, 2022

OPERATING ACTIVITIES

 

 

 

Net loss

$

(407

)

 

$

(21,481

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

Depreciation

 

4,712

 

 

 

5,000

 

Amortization

 

7,925

 

 

 

9,397

 

Change in provision for bad debt expense

 

(350

)

 

 

(89

)

Write down of inventory

 

1,497

 

 

 

439

 

Compensation expense for share-based plans

 

1033

 

 

 

(84

)

Amortization of debt issuance costs

 

975

 

 

 

514

 

Other impairment charges

 

 

 

 

8,011

 

Changes in operating assets and liabilities:

 

 

 

Trade accounts receivable

 

237

 

 

 

4,242

 

Inventories

 

(17,971

)

 

 

(15,465

)

Prepaid expenses and other assets

 

(4,811

)

 

 

(5,671

)

Accounts payable, accrued expenses and other liabilities

 

(6,766

)

 

 

(737

)

Net cash used in operating activities

 

(13,926

)

 

 

(15,924

)

INVESTING ACTIVITIES

 

 

 

Additions to property, plant and equipment

 

(5,045

)

 

 

(3,607

)

Proceeds from the sale of property, plant and equipment

 

38

 

 

 

15

 

Supplier funding

 

2,370

 

 

 

 

Proceeds from beneficial interest of factored receivables

 

1,097

 

 

 

927

 

Net cash used in investing activities

 

(1,540

)

 

 

(2,665

)

FINANCING ACTIVITIES

 

 

 

Proceeds from long-term debt

 

53,475

 

 

 

51,325

 

Payments of long-term debt

 

(50,800

)

 

 

(30,875

)

Net change in short-term borrowings

 

 

 

 

925

 

Withholding tax payments on net share settlements on equity awards

 

(450

)

 

 

(821

)

Net cash used in continuing financing activities

 

2,225

 

 

 

 

Net cash provided by financing activities

 

2,225

 

 

 

20,554

 

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

 

537

 

 

 

(712

)

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

 

(12,704

)

 

 

1,253

 

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

 

66,724

 

 

 

61,374

 

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

 

54,020

 

 

 

62,627

 

 

CIRCOR INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data) (unaudited)

 
 

 

April 2, 2023

 

December 31, 2022

ASSETS

 

 

 

CURRENT ASSETS:

 

 

 

Cash and cash equivalents

$

52,080

 

 

$

64,275

 

Trade accounts receivable, net

 

111,557

 

 

 

109,754

 

Inventories

 

156,967

 

 

 

139,786

 

Prepaid expenses and other current assets

 

120,124

 

 

 

117,766

 

Total Current Assets

 

440,728

 

 

 

431,581

 

PROPERTY, PLANT AND EQUIPMENT, NET

 

142,147

 

 

 

141,141

 

OTHER ASSETS:

 

 

 

Goodwill

 

120,114

 

 

 

119,847

 

Intangibles, net

 

249,379

 

 

 

256,338

 

Lease right-of-use assets, net

 

41,389

 

 

 

42,491

 

Deferred income taxes

 

507

 

 

 

512

 

Other assets

 

21,465

 

 

 

20,777

 

TOTAL ASSETS

$

1,015,729

 

 

$

1,012,687

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

CURRENT LIABILITIES:

 

 

 

Accounts payable

 

80,224

 

 

 

78,778

 

Accrued expenses and other current liabilities

 

83,695

 

 

 

84,510

 

Accrued compensation and benefits

 

28,100

 

 

 

30,817

 

Total Current Liabilities

 

192,019

 

 

 

194,105

 

LONG-TERM DEBT

 

500,042

 

 

 

496,534

 

DEFERRED INCOME TAXES

 

18,422

 

 

 

18,238

 

PENSION LIABILITY, NET

 

87,090

 

 

 

85,968

 

LONG-TERM LEASE LIABILITIES

 

37,618

 

 

 

38,480

 

OTHER NON-CURRENT LIABILITIES

 

19,300

 

 

 

20,316

 

COMMITMENTS AND CONTINGENCIES

 

 

 

SHAREHOLDERS’ EQUITY:

 

 

 

Preferred stock, $0.01 par value; 1,000,000 shares authorized; no shares issued and outstanding at April 2, 2023 and December 31, 2022

 

 

 

 

 

Common stock, $0.01 par value; 29,000,000 shares authorized; 21,762,933 and 21,736,911 issued at April 2, 2023 and December 31, 2022, respectively

 

218

 

 

 

218

 

Additional paid-in capital

 

456,685

 

 

 

456,102

 

Accumulated deficit

 

(179,100

)

 

 

(178,693

)

Common treasury stock, at cost (1,372,488 shares at April 2, 2023 and December 31, 2022)

 

(74,472

)

 

 

(74,472

)

Accumulated other comprehensive loss, net of tax

 

(42,093

)

 

 

(44,109

)

Total Shareholders’ Equity

 

161,238

 

 

 

159,046

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

1,015,729

 

 

$

1,012,687

 

 

 

 

 

CIRCOR INTERNATIONAL, INC.

SUMMARY OF ORDERS AND BACKLOG

(in millions) (unaudited)

 

 

 

Three Months Ended

 

 

 

April 2, 2023

 

April 3, 2022

 

ORDERS (1)

Aerospace & Defense

 

$

84.4

 

$

77.9

 

Industrial

 

 

157.7

 

 

143.7

 

Total orders

 

$

242.1

 

$

221.6

 

 

 

 

 

 

 

 

 

April 2, 2023

 

April 3, 2022

 

BACKLOG (2)

 

 

 

 

 

Aerospace & Defense

 

$

224.8

 

$

199.7

 

Industrial

 

 

358.8

 

 

276.8

 

Total backlog

 

$

583.6

 

$

476.5

 

 

1. Orders do not include the foreign exchange impact due to the re-measurement of customer backlog amounts denominated in foreign currencies. Industrial includes $0.0 million and $2.3 million orders in Pipeline Engineering for the three months ended April 2, 2023 and April 3, 2022 respectively.

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

 

CIRCOR INTERNATIONAL, INC.

SEGMENT INFORMATION

(in thousands, except percentages) (unaudited)

 
 

 

 

2022

2023

 

 

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

TOTAL

ORDERS

 

 

 

 

 

 

 

 

Aerospace & Defense

 

$

77,890

 

$

69,053

 

$

90,486

 

$

70,778

 

$

308,207

 

$

84,400

 

$

84,400

 

Industrial

 

 

143,727

 

 

139,370

 

 

137,848

 

 

178,069

 

 

599,014

 

 

157,705

 

 

157,705

 

Total

 

$

221,617

 

$

208,423

 

$

228,334

 

$

248,847

 

$

907,221

 

$

242,105

 

$

242,105

 

 

 

 

 

 

 

 

 

 

NET REVENUES

 

 

 

 

 

 

 

 

Aerospace & Defense

 

$

63,370

 

$

67,271

 

$

72,219

 

$

79,855

 

$

282,715

 

$

68,551

 

$

68,551

 

Industrial

 

 

122,285

 

 

124,105

 

 

123,143

 

 

134,672

 

 

504,204

 

 

134,546

 

 

134,546

 

Total

 

$

185,655

 

$

191,376

 

$

195,362

 

$

214,527

 

$

786,919

 

$

203,097

 

$

203,097

 

 

 

 

 

 

 

 

 

 

SEGMENT OPERATING INCOME

 

 

 

 

 

Aerospace & Defense

 

$

11,320

 

$

13,566

 

$

16,891

 

$

21,807

 

$

63,584

 

$

14,714

 

$

14,714

 

Industrial

 

 

6,857

 

 

8,484

 

 

15,717

 

 

18,244

 

 

49,302

 

 

20,402

 

 

20,402

 

Corporate expenses

 

 

(7,770

)

 

(5,485

)

 

(5,301

)

 

(6,828

)

 

(25,384

)

 

(6,743

)

 

(6,743

)

Total

 

$

10,407

 

$

16,565

 

$

27,307

 

$

33,223

 

$

87,502

 

$

28,373

 

$

28,373

 

 

 

 

 

 

 

 

 

 

SEGMENT OPERATING MARGIN %

 

 

 

 

 

Aerospace & Defense

 

 

17.9

%

 

20.2

%

 

23.4

%

 

27.3

%

 

22.5

%

 

21.5

%

 

21.5

%

Industrial

 

 

5.6

%

 

6.8

%

 

12.8

%

 

13.5

%

 

9.8

%

 

15.2

%

 

15.2

%

Total

 

 

5.6

%

 

8.7

%

 

14.0

%

 

15.5

%

 

11.1

%

 

14.0

%

 

14.0

%

 

 

 

 

 

 

 

 

 

 

 

2022

2023

Pipeline Engineering1

 

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

TOTAL

ORDERS - Industrial

 

$

2,260

 

$

 

$

 

$

 

$

2,260

 

$

 

$

 

NET REVENUES - Industrial

 

$

3,012

 

$

218

 

$

8

 

$

11

 

$

3,249

 

$

 

$

 

SEGMENT OP. INC. -Industrial

 

$

(3,190

)

$

(1,074

)

$

(150

)

$

26

 

$

(4,388

)

$

125

 

$

125

 

Segment Operating Margin %

 

 

(105.9

)%

 

(492.7

)%

 

(1875.0

)%

 

236.4

%

 

(135.1

)%

 

 

 

 

 

 

 

 

 

 

 

  1. Quantifies the impact of the Pipeline Engineering business on the Industrial Segment.
 

CIRCOR INTERNATIONAL, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES

(in thousands, except percentages) (unaudited)

 

 

 

2022

2023

 

 

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

TOTAL

 

 

 

 

 

 

 

 

 

Net Cash (Used In) Provided By Operating Activities

$

(15,924

)

$

(3,593

)

$

(9,815

)

$

28,511

 

$

(821

)

$

(13,926

)

$

(13,926

)

LESS

 

 

 

 

 

 

 

 

Capital expenditures, net of sale proceeds1

 

3,592

 

 

5,461

 

 

4,156

 

 

8,675

 

 

21,884

 

 

2,637

 

 

2,637

 

ADJUSTED FREE CASH FLOW

$

(19,516

)

$

(9,054

)

$

(13,971

)

$

19,836

 

$

(22,705

)

$

(16,563

)

$

(16,563

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Debt

 

$

547,681

 

$

543,100

 

$

522,975

 

$

516,925

 

$

516,925

 

$

519,600

 

$

519,600

 

Less: Cash & Cash equivalents

 

61,122

 

 

55,238

 

 

47,131

 

 

64,275

 

 

64,275

 

 

52,080

 

 

52,080

 

GROSS DEBT, NET OF CASH

$

486,559

 

$

487,862

 

$

475,844

 

$

452,650

 

$

452,650

 

$

467,520

 

$

467,520

 

 

 

 

 

 

 

 

 

 

TOTAL SHAREHOLDERS' EQUITY

$

110,321

 

$

103,663

 

$

122,082

 

$

159,046

 

$

159,046

 

$

161,238

 

$

161,238

 

 

 

 

 

 

 

 

 

 

GROSS DEBT AS % OF EQUITY

 

496

%

 

524

%

 

428

%

 

325

%

 

325

%

 

322

%

 

322

%

GROSS DEBT, NET OF CASH AS % OF EQUITY

 

441

%

 

471

%

 

390

%

 

285

%

 

285

%

 

290

%

 

290

%

 

 

 

 

 

 

 

 

 

  1. Includes capital expenditures, net of proceeds of asset sales and third party funding for asset purchases from GAAP operating cash flow.
 

CIRCOR INTERNATIONAL, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES

(in thousands, except percentages) (unaudited)

 
 

 

 

2022

2023

 

 

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

TOTAL

NET (LOSS) INCOME

 

$

(21,481

)

$

3,960

 

$

31,470

 

$

5,439

 

$

19,388

 

$

(407

)

$

(407

)

LESS:

 

 

 

 

 

 

 

 

Restructuring related inventory charges (recoveries), net

 

 

2,757

 

 

 

 

 

 

 

 

2,757

 

 

 

 

 

Restructuring charges (recoveries), net

 

 

6,447

 

 

4,695

 

 

(173

)

 

97

 

 

11,066

 

 

(216

)

 

(216

)

Acquisition amortization

 

 

9,391

 

 

9,178

 

 

9,118

 

 

8,651

 

 

36,338

 

 

7,920

 

 

7,920

 

Acquisition depreciation

 

 

1,045

 

 

1,239

 

 

1,335

 

 

995

 

 

4,614

 

 

1,053

 

 

1,053

 

Special (recoveries) charges, net

 

 

2,556

 

 

(10,425

)

 

(25,529

)

 

3,319

 

 

(30,079

)

 

1,700

 

 

1,700

 

Income tax impact

 

 

384

 

 

(2,207

)

 

(2,066

)

 

(2,739

)

 

(6,628

)

 

843

 

 

843

 

ADJUSTED NET INCOME

 

$

1,099

 

$

6,440

 

$

14,155

 

$

15,762

 

$

37,456

 

$

10,893

 

$

10,893

 

 

 

 

 

 

 

 

 

 

(LOSS) EARNINGS PER COMMON SHARE (Diluted)

 

$

(1.06

)

$

0.19

 

$

1.54

 

$

0.27

 

$

0.95

 

$

(0.02

)

$

(0.02

)

LESS:

 

 

 

 

 

 

 

 

Restructuring related inventory charges

 

 

0.14

 

 

 

 

 

 

 

 

0.14

 

 

 

 

 

Restructuring charges (recoveries), net

 

 

0.32

 

 

0.23

 

 

(0.01

)

 

 

 

0.54

 

 

(0.01

)

 

(0.01

)

Acquisition amortization

 

 

0.46

 

 

0.45

 

 

0.45

 

 

0.42

 

 

1.78

 

 

0.39

 

 

0.39

 

Acquisition depreciation

 

 

0.05

 

 

0.06

 

 

0.07

 

 

0.05

 

 

0.23

 

 

0.05

 

 

0.05

 

Special (recoveries) charges, net

 

 

0.13

 

 

(0.51

)

 

(1.25

)

 

0.16

 

 

(1.47

)

 

0.08

 

 

0.08

 

Income tax impact

 

 

0.02

 

 

(0.11

)

 

(0.10

)

 

(0.13

)

 

(0.32

)

 

0.04

 

 

0.04

 

ADJUSTED EARNINGS PER SHARE (Diluted)

 

$

0.05

 

$

0.32

 

$

0.69

 

$

0.77

 

$

1.83

 

$

0.53

 

$

0.53

 

 

CIRCOR INTERNATIONAL, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES

(in thousands, except percentages) (unaudited)

 
 

 

 

2022

2023

 

 

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

TOTAL

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

$

(21,481

)

$

3,960

 

$

31,470

 

$

5,439

$

19,388

 

$

(407

)

$

(407

)

LESS:

 

 

 

 

 

 

 

 

Interest expense, net

 

9,456

 

 

10,203

 

 

11,821

 

 

13,405

 

44,886

 

 

14,528

 

 

14,528

 

Depreciation

 

 

5,000

 

 

5,056

 

 

4,956

 

 

4,679

 

19,691

 

 

4,712

 

 

4,712

 

Amortization

 

 

9,397

 

 

9,183

 

 

9,124

 

 

8,656

 

36,360

 

 

7,925

 

 

7,925

 

Provision for income taxes

 

1,523

 

 

(647

)

 

1,661

 

 

1,742

 

4,279

 

 

3,581

 

 

3,581

 

EBITDA

 

$

3,895

 

$

27,755

 

$

59,032

 

$

33,921

$

124,604

 

$

30,339

 

$

30,339

 

LESS:

 

 

 

 

 

 

 

 

Restructuring related inventory charges (recoveries)

 

2,757

 

 

 

 

 

 

 

2,757

 

 

 

 

 

Restructuring charges (recoveries), net

 

6,447

 

 

4,695

 

 

(173

)

 

97

 

11,066

 

 

(216

)

 

(216

)

Special (recoveries) charges, net

 

2,556

 

 

(10,425

)

 

(25,529

)

 

3,319

 

(30,079

)

 

1,700

 

 

1,700

 

ADJUSTED EBITDA

 

$

15,655

 

$

22,025

 

$

33,330

 

$

37,337

$

108,348

 

$

31,823

 

$

31,823

 

 

CIRCOR INTERNATIONAL, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES

(in thousands, except percentages) (unaudited)

 
 

 

 

2022

2023

 

 

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

TOTAL

 

 

 

 

 

 

 

 

 

OPERATING (LOSS) INCOME

 

$

(11,789

)

$

11,878

 

$

42,556

 

$

20,161

 

$

62,806

 

$

17,916

 

$

17,916

 

LESS:

 

 

 

 

 

 

 

 

Restructuring related inventory charges (recoveries)

 

 

2,757

 

 

 

 

 

 

 

 

2,757

 

 

 

 

 

Restructuring charges (recoveries), net

 

 

6,447

 

 

4,695

 

 

(173

)

 

97

 

 

11,066

 

 

(216

)

 

(216

)

Acquisition amortization

 

 

9,391

 

 

9,178

 

 

9,118

 

 

8,651

 

 

36,338

 

 

7,920

 

 

7,920

 

Acquisition depreciation

 

 

1,045

 

 

1,239

 

 

1,335

 

 

995

 

 

4,614

 

 

1,053

 

 

1,053

 

Special (recoveries) charges, net

 

 

2,556

 

 

(10,425

)

 

(25,529

)

 

3,319

 

 

(30,079

)

 

1,700

 

 

1,700

 

ADJUSTED OPERATING INCOME

 

$

10,407

 

$

16,565

 

$

27,307

 

$

33,223

 

$

87,502

 

$

28,373

 

$

28,373

 

 

 

 

 

 

 

 

 

 

OPERATING MARGIN

 

 

(6.3

) %

 

6.2

%

 

21.8

%

 

9.4

%

 

8.0

%

 

8.8

%

 

8.8

%

LESS:

 

 

 

 

 

 

 

 

Restructuring related inventory charges (recoveries)

 

 

1.5

%

 

0.0

%

 

0.0

%

 

0.0

%

 

0.4

%

 

0.0

%

 

0.0

%

Restructuring charges (recoveries), net

 

 

3.5

%

 

2.5

%

 

(0.1

)%

 

0.0

%

 

1.4

%

 

(0.1

) %

 

(0.1

)%

Acquisition amortization

 

 

5.1

%

 

4.8

%

 

4.7

%

 

4.0

%

 

4.6

%

 

3.9

%

 

3.9

%

Acquisition depreciation

 

 

0.6

%

 

0.6

%

 

0.7

%

 

0.5

%

 

0.6

%

 

0.5

%

 

0.5

%

Special (recoveries) charges, net

 

 

1.4

%

 

(5.4

) %

 

(13.1

)%

 

1.5

%

 

(3.8

)%

 

0.8

%

 

0.8

%

ADJUSTED OPERATING MARGIN

 

 

5.6

%

 

8.7

%

 

14.0

%

 

15.5

%

 

11.1

%

 

14.0

%

 

14.0

%

 

CIRCOR INTERNATIONAL, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES

(in thousands, except percentages) (unaudited)

 

Q1'23 Organic Orders and Revenue

 

 

 

 

 

 

 

 

 

 

 

CIRCOR

Aerospace & Defense

Industrial

 

1Q 23

1Q 22

Variance

1Q 23

1Q 22

Variance

1Q 23

1Q 22

Variance

Orders

242,105

221,617

9%

84,400

77,890

8%

157,705

143,727

10%

Divestitures

 

 

 

FX

8,291

 

 

2,499

 

 

5,792

 

 

Organic

250,395

221,617

13%

86,899

77,890

12%

163,497

143,727

14%

 

 

 

 

 

 

 

 

 

 

 

CIRCOR

Aerospace & Defense

Industrial

 

1Q 23

1Q 22

Variance

1Q 23

1Q 22

Variance

1Q 23

1Q 22

Variance

Revenue

203,097

185,655

9%

68,551

63,370

8%

134,546

122,285

10%

Divestitures

 

 

 

FX

6,709

 

 

1,191

 

 

5,518

 

 

Organic

209,806

185,655

13%

69,742

63,370

10%

140,064

122,285

15%

Note regarding financial statements: Financial amounts are computed independently each quarter; therefore, the sum of the quarterly amounts may not equal the total amount for the respective year due to rounding.

Contacts

Scott Solomon

Senior Vice President

Sharon Merrill Associates, Inc.

(857) 383-2409

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