- Orders and backlog grow by double digits in 2021, driven by
Industrial Segment
- Previously disclosed selected preliminary financial
expectations for first-quarter 2022 reiterated
- Orders growth in second-quarter 2022 (excluding Pipeline
Engineering)
- Exit from Pipeline Engineering Business and accounting review
completed
- Board of Directors remain focused on exploration 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 (A&D) markets, today announced the filing of the
Company’s annual report on Form 10-K for the year ended December
31, 2021 (the “Annual Report”), restated financial statements for
the years ended December 31, 2019, and 2020, and interim financial
statements for the first, second, and third quarters of 2020 and
2021.
“We continue to make solid progress on our growth, value pricing
and simplification program, and believe that the initiatives we are
implementing effectively position us to better support our
customers, expand margins and navigate the dynamic market
environment,” said Tony Najjar, Chief Operating Officer and Interim
President and CEO. “The simplification and structural cost out
initiatives underway in our Industrial segment and within Corporate
remain on track, and we have completed our exit from the
loss-making Pipeline Engineering business. In addition, our value
pricing efforts have been successful in supporting our performance,
enabling us to more than offset the effects of inflation.”
The Company is reiterating its previously disclosed selected
preliminary, unaudited, unreviewed financial expectations for
first-quarter 2022. For second-quarter 2022, CIRCOR expects low
single digit order growth (high single digits on an organic basis),
excluding Pipeline Engineering, driven by strength in the Aerospace
& Defense segment, offset by a decline in the Industrial
segment on a difficult prior year comparison.
Helmuth Ludwig, Chair of the Board, said, “We are pleased to
have the restatement behind us so that management and the Board can
focus on the parallel paths of executing initiatives to enhance
growth and margins across our businesses while reviewing potential
strategic alternatives to maximize shareholder value. Our team has
worked diligently to complete the accounting review, and I want to
thank all our stakeholders for their trust and patience during this
period."
2021 Overview Results As
Reported:
- Backlog of $444 million, up 16% reported driven by strong
demand in Industrial
- Orders of $851 million, up 16% reported and 14% organically
- Aerospace & Defense orders of $255 million remaining flat
YoY and (1%) organically
- Industrial orders of $595 million, up 24% reported and 22%
organically
- Revenue of $759 million down (1%) reported and (2%) organically
- Aerospace & Defense revenue of $253 million, down (5%)
reported and (6%) organically
- Industrial revenue of $506 million, up 1% reported and flat
organically
- GAAP operating (loss) income ($29) million, up 69%
reported
- Adjusted operating income $54 million, down (1%)
- GAAP operating margin of (3.9%); Adjusted operating margin of
7.2%
2021 Overview Results Excluding
Divestitures and Pipeline Engineering:
- Backlog of $443 million, up 16% adjusted, driven by strong
demand in Industrial
- Orders of $826 million, up 16% adjusted and 11% organically
- Aerospace & Defense orders of $255 million remaining flat
YoY and (1%) organically
- Industrial orders of $571 million, up 24% adjusted and 21%
organically
- Revenue of $744 million flat YoY and (4%) organically
- Aerospace & Defense revenue of $253 million, down (5%)
adjusted and (6%) organically
- Industrial revenue of $491 million, up 3% adjusted and flat
organically
- Adjusted operating income $64 million, up 2% adjusted
- Adjusted operating margin of 8.6%
As previously announced, the restatement resulted from
accounting irregularities in the Company’s Pipeline Engineering
business. The accounting irregularities were the result of
intentional acts of an individual employee. In connection with the
restatement process, the Company identified material weaknesses in
the Company’s internal control over financial reporting during the
applicable periods. Remedial actions have been identified and
further actions are planned as noted in Part II, Item 9A, “Controls
and Procedures” on Form 10-K. The restated financial statements and
the Annual Report are available on the CIRCOR investor relations
website, https://investors.circor.com/, and on the U.S. Securities
and Exchange Commission website, www.sec.gov.
Selected Consolidated
Results
(unaudited)
($ millions except EPS)
Q4 2021
Q4 2020
Change
Q4 YTD 2021
Q4 YTD 2020
Change
Orders
220.0
168.5
31 %
850.6
736.2
16 %
Orders - excluding Divested &
Pipeline Engineering1
212.8
164.6
29 %
826.2
714.0
16 %
Revenue
$
204.9
$
205.3
— %
$
758.7
$
765.2
-1 %
Revenue - excluding Divested &
Pipeline Engineering1
199.7
202.3
-1 %
744.1
745.1
— %
GAAP operating (loss) income
(19.0)
5.1
-473 %
(29.3)
(94.9)
69 %
Adjusted operating income2
20.5
18.5
11 %
54.3
55.0
-1 %
Adjusted operating income excluding
Divested & Pipeline Engineering1,2
23.7
21.7
9 %
64.2
63.2
2 %
GAAP operating margin
(9.3) %
2.5 %
-1180 bps
(3.9) %
(12.4) %
850 bps
Adjusted operating margin2
10.0 %
9.0 %
100 bps
7.2 %
7.2 %
0 bps
Adjusted operating margin excluding
Divested & Pipeline Engineering1,2
11.9 %
10.7 %
120 bps
8.6 %
8.5 %
10 bps
GAAP earnings (loss) per share
(diluted)
$
(1.40)
$
(0.89)
-57 %
$
(3.05)
$
(10.94)
72 %
Adjusted earnings per share
(diluted)2
$
0.46
$
0.43
7 %
$
1.01
$
0.90
12 %
Operating cash flow
10.6
25.5
-58 %
$
10.4
(22.5)
146 %
Free cash flow3
6.4
22.2
-71 %
(4.3)
(35.0)
88 %
Segment Results
(unaudited)
($ in millions)
Q4 2021
Q4 2020
Change
Q4 YTD 2021
Q4 YTD 2020
Change
Aerospace & Defense
Orders
$
73.9
$
46.8
58 %
$
255.2
$
254.5
— %
Revenue
70.0
77.4
-10 %
252.5
266.0
-5 %
Segment operating income
18.4
18.5
-1 %
56.1
58.4
-4 %
Segment operating margin
26.3 %
23.9 %
240 bps
22.2 %
21.9 %
30 bps
Industrial
Orders
$
146.1
$
121.7
20 %
$
595.4
$
481.6
24 %
Orders - excluding Divested &
Pipeline Engineering1
138.9
117.8
18 %
571.0
459.5
24 %
Revenue
134.9
127.9
5 %
506.1
499.2
1 %
Revenue - excluding Divested &
Pipeline Engineering1
$
129.7
$
124.9
4 %
$
491.5
$
479.0
3 %
Segment operating income
8.7
7.0
24 %
28.9
27.0
15.0 %
Segment operating income -excluding
Divested & Pipeline Engineering
11.9
10.1
18 %
38.8
35.2
10 %
Segment operating margin
6.4 %
5.5 %
90 bps
5.7 %
5.4 %
30 bps
Segment operating margin
(adjusted)
9.2 %
8.1 %
110 bps
7.9 %
7.3 %
60 bps
- Orders, revenue and adjusted operating income excluding
Divested & Pipeline Engineering businesses are non-GAAP
measures. Divested businesses include Instrumentation &
Sampling which was sold during Q1 2020. Pipeline Engineering is
related to accounting irregularities noted on March 14,2022 8-K
Filing. Both Instrumentation & Sampling and Pipeline
Engineering are in the Industrial Segment.
- Adjusted consolidated and segment results for Q4 2021 exclude
net income from discontinued operations and net loss from non-cash
acquisition-related intangible amortization, special and
restructuring charges, and goodwill impairment charge totaling
$39.4 million. These charges include: (i) $11.8 million for
non-cash acquisition-related intangible amortization and
depreciation expense; (ii) $8.7 million of costs related to debt
refinancing; (iii) $7.9 million related to incremental loss
allowance for a receivable, contract asset and sub-contractor
claims for a contract assumed as part of the Fluid Handling
acquisition; (iv) $0.5 million other special and restructuring
recoveries; and (v) $10.5 million goodwill impairment charge
related to our Industrial segment. 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 $12.4
million adjustment to taxes.
- 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.
CIRCOR Announces Date for 2022 Annual Meeting
On July 25, 2022, the Board of Directors (the “Board”) of the
Company established October 4, 2022 as the date of the Company’s
2022 Annual Meeting of Stockholders (the “2022 Annual Meeting”) and
August 22, 2022 as the record date (the “Record Date”) for
determining stockholders entitled to notice of and to vote at the
2022 Annual Meeting. The Company will provide additional meeting
details in its proxy statement related to the 2022 Annual
Meeting.
First-Quarter 2022 10-Q
As disclosed in its May 23, 2022 announcement, in light of the
accounting review the Company was unable to file its Quarterly
Report on Form 10-Q (the “Form 10-Q”) for the first quarter ended
April 3, 2022 on a timely basis without unreasonable effort or
expense. The Company is working on completing its Form 10-Q for its
2022 first quarter and will make a subsequent announcement
concerning the date and time of its first-quarter 2022 earnings
release.
Company Expects to File Form 12-b-25 Related to
Second-Quarter 10-Q
CIRCOR expects to file a Form 12b-25 with the U.S. Securities
and Exchange Commission (SEC) to disclose that CIRCOR requires
additional time to complete the Company’s Quarterly Report for the
second quarter ended July 3, 2022 (the “Quarterly Report”). The
Company plans to file the Quarterly Report as soon as possible.
Use of Non-GAAP Financial Measures
In this press release, the Company uses the non-GAAP financial
measures organic orders, organic revenue, adjusted operating
income, adjusted operating income as a percentage of sales, and
free cash flow. 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 also allow investors and others
to compare CIRCOR’s current financial results with CIRCOR’s past
financial results in a consistent manner.
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 December 31, 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.
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.
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. 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 findings and conclusions of the Audit
Committee’s review; 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 of the Company regaining
compliance with the NYSE’s continued listing standards; the timing
and outcome, if any, of the Company’s strategic alternatives review
and its potential exit from the Pipeline Engineering business unit;
the impact on the Company of the situation in Russia and Ukraine;
and the risks detailed from time to time in the Company’s periodic
reports filed with the SEC. Before making any investment decisions
regarding CIRCOR, the Company strongly advises you to read the
section entitled “Risk Factors” in its 2021 Annual Report on Form
10-K, which can be accessed under the “Investors” link of the
Company’s website at www.circor.com. 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.
CIRCOR INTERNATIONAL,
INC
CONSOLIDATED STATEMENT OF
OPERATIONS
(in thousands, except per
share data) (unaudited)
Three Months Ended
Twelve Months Ended
December 31, 2021
December 31, 2020
December 31, 2021
December 31, 2020
Net revenues
$
204,917
$
205,295
$
758,667
$
765,219
Cost of revenues
140,348
141,242
528,291
533,005
Gross profit
64,569
64,053
230,376
232,214
Selling, general and administrative
expenses
55,557
57,477
224,927
223,386
Goodwill impairment charge
10,500
—
10,500
138,078
Special and restructuring charges
(recoveries), net
17,464
1,444
24,272
(34,303)
Operating (loss) income
(18,952)
5,132
(29,323)
(94,947)
Other expense (income):
Interest expense, net
8,040
8,520
32,365
34,219
Other expense (income)
(523)
(1,200)
(3,826)
(1,594)
Total other expense, net
7,517
7,320
28,539
32,625
(Loss) from continuing operations before
income taxes
(26,469)
(2,188)
(57,862)
(127,572)
Provision for income taxes
1,970
14,992
5,182
55,902
Loss from continuing operations, net of
tax
$
(28,439)
$
(17,180)
$
(63,044)
$
(183,474)
Income (loss) from discontinued
operations, net of tax
$
13
$
(796)
$
1,406
$
(35,140)
Net (loss)
$
(28,426)
$
(17,976)
$
(61,638)
$
(218,614)
Basic income (loss) per common
share:
Basic from continuing operations
$
(1.40)
$
(0.86)
$
(3.12)
$
(9.18)
Basic from discontinued operations
$
—
$
(0.04)
$
0.07
$
(1.76)
Net income (loss)
$
(1.40)
$
(0.90)
$
(3.05)
$
(10.94)
Diluted income (loss) per common
share:
Diluted from continuing operations
$
(1.40)
$
(0.86)
$
(3.12)
$
(9.18)
Diluted from discontinued operations
$
—
$
(0.04)
$
0.07
$
(1.76)
Net income (loss)
$
(1.40)
$
(0.90)
$
(3.05)
$
(10.94)
Weighted average common shares
outstanding:
Basic
20,261
20,002
20,201
19,982
Diluted
20,261
20,002
20,201
19,982
CIRCOR INTERNATIONAL,
INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in thousands)
Year Ended December
31,
2021
2020
OPERATING ACTIVITIES
Net (loss)
$
(61,638)
$
(218,614)
Income (loss) from discontinued
operations, net of income taxes
1,406
(35,140)
(Loss) from continuing operations, net of
tax
(63,044)
(183,474)
Adjustments to reconcile net (loss) to net
cash provided by (used in) operating activities:
Depreciation
22,854
20,401
Amortization
42,304
43,662
Change in provision for bad debt
expense
1,213
6,274
Write down of inventory
3,364
4,272
Compensation expense of share-based
plans
5,252
5,488
Loss on debt extinguishment
8,693
—
Amortization of debt issuance costs
3,996
7,460
Deferred income tax provision
(benefit)
(2,992)
46,774
Goodwill Impairment
10,500
138,078
Loss (gain) on sale of businesses
1,919
(54,429)
Changes in operating assets and
liabilities, net of effects of acquisitions and divestitures:
Trade accounts receivable
(6,308)
26,211
Inventories
(6,974)
4,366
Prepaid expenses and other assets
(23,665)
(29,255)
Accounts payable, accrued expenses and
other liabilities
15,820
(43,748)
Net cash provided by (used in) continuing
operations
12,932
(7,920)
Net cash (used in) discontinued
operations
(2,484)
(14,561)
Net cash provided by (used in)
operating activities
10,448
(22,481)
INVESTING ACTIVITIES
Additions of property, plant and
equipment
(14,747)
(12,222)
Proceeds from the sale of property, plant
and equipment
2
(322)
Proceeds from beneficial interest of
factored receivables
2,047
2,957
Proceeds from sale of business
9,993
165,540
Net cash (used in) provided by continuing
investing activities
(2,705)
155,953
Net cash (used in) discontinued investing
activities
—
(11,658)
Net cash (used in) provided by
investing activities
(2,705)
144,295
FINANCING ACTIVITIES
Proceeds from long-term debt
734,612
219,000
Payments of long-term debt
(729,551)
(352,916)
Net Change in short-term borrowings
(374)
372
Proceeds from the exercise of stock
options
151
118
Withholding tax payments on net share
settlements on equity rewards
(4,209)
(713)
Payment of debt issuance costs
(12,157)
—
Net cash used in financing
activities
(11,528)
(134,139)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(3,448)
3,878
INCREASE (DECREASE) IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH
(7,233)
(8,447)
Cash, cash equivalents and restricted cash
at beginning of year
68,607
77,054
CASH, CASH EQUIVALENTS, AND RESTRICTED
CASH AT END OF YEAR
$
61,374
$
68,607
CIRCOR INTERNATIONAL,
INC.
CONSOLIDATED BALANCE
SHEETS
(in thousands, except share
and per share data)
December 31,
2021
2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
59,924
$
66,918
Trade accounts receivable, net
100,149
95,635
Inventories
123,343
128,092
Prepaid expenses and other current
assets
110,749
88,985
Assets held for sale
—
5,073
Total Current Assets
394,165
384,703
PROPERTY, PLANT AND EQUIPMENT, NET
154,461
166,022
OTHER ASSETS:
Goodwill
122,906
136,923
Intangibles, net
303,476
353,595
Deferred income taxes
756
830
Other assets
43,534
40,784
TOTAL ASSETS
$
1,019,298
$
1,082,857
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable
$
83,382
$
63,614
Accrued expenses and other current
liabilities
81,998
79,040
Accrued compensation and benefits
26,551
28,016
Short-term borrowings and current portion
of long-term debt
1,611
1,624
Total Current Liabilities
193,542
172,294
LONG-TERM DEBT
511,694
507,888
DEFERRED INCOME TAXES
21,721
25,865
PENSION LIABILITY, NET
120,881
163,642
OTHER NON-CURRENT LIABILITIES
37,744
60,270
SHAREHOLDERS’ EQUITY:
Preferred stock, $0.01 par value;
1,000,000 shares authorized; — shares issued and outstanding
—
—
Common stock, $0.01 par value; 29,000,000
shares authorized; 21,633,131 and 21,373,813 shares issued at
December 31, 2021 and 2020, respectively
217
214
Additional paid-in capital
454,852
452,728
Accumulated deficit
(198,081)
(136,443)
Common treasury stock, at cost (1,372,488
shares at December 31, 2021 and 2020)
(74,472)
(74,472)
Accumulated other comprehensive loss
(48,800)
(89,129)
Total Shareholders’ Equity
133,716
152,898
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
1,019,298
$
1,082,857
CIRCOR INTERNATIONAL,
INC.
SUMMARY OF ORDERS AND
BACKLOG
(in millions)
(unaudited)
Three Months Ended
Twelve Months Ended
December 31, 2021
December 31, 2020
December 31, 2021
December 31, 2020
ORDERS (1)
Aerospace & Defense
$
73.9
$
46.8
$
255.2
$
254.6
Industrial
146.1
121.7
595.4
481.6
Total Orders
$
220.0
$
168.5
$
850.6
$
736.2
December 31, 2021
December 31, 2020
BACKLOG (2)
Aerospace & Defense
$
185.3
$
184.1
Industrial
258.4
197.2
Total Backlog
$
443.7
$
381.3
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 $4.4 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
2ND QTR
3RD QTR
4TH QTR
TOTAL
ORDERS
Aerospace & Defense
$
72,031
$
76,616
$
59,105
$
46,795
$
254,547
$
72,999
$
54,243
$
54,028
$
73,898
$
255,168
Industrial
136,443
116,023
107,453
121,690
481,609
153,695
155,959
139,691
146,065
595,410
Total
$
208,474
$
192,639
$
166,558
$
168,485
$
736,156
$
226,693
$
210,203
$
193,719
$
219,964
$
850,578
NET REVENUES
Aerospace & Defense
$
65,401
$
62,123
$
61,129
$
77,357
$
266,010
$
58,488
$
60,613
$
63,461
$
69,979
$
252,541
Industrial
125,724
121,386
124,161
127,938
499,209
117,963
126,977
126,248
134,938
506,126
Total
$
191,125
$
183,509
$
185,290
$
205,295
$
765,219
$
176,451
$
187,590
$
189,709
$
204,917
$
758,667
SEGMENT OPERATING INCOME
Aerospace & Defense
$
12,445
$
13,075
$
14,409
$
18,450
$
58,379
$
9,988
$
11,741
$
15,927
$
18,416
$
56,073
Industrial
3,517
9,887
6,651
6,970
27,025
5,834
7,237
7,124
8,700
28,896
Corporate expenses
(7,246)
(9,006)
(7,243)
(6,882)
(30,378)
(9,035)
(7,950)
(7,015)
(6,636)
(30,638)
Total
$
8,716
$
13,956
$
13,817
$
18,538
$
55,026
$
6,787
$
11,028
$
16,036
$
20,480
$
54,331
SEGMENT OPERATING MARGIN %
Aerospace & Defense
19.0 %
21.0 %
23.6 %
23.9 %
21.9 %
17.1 %
19.4 %
25.1 %
26.3 %
22.2 %
Industrial
2.8 %
8.1 %
5.4 %
5.4 %
5.4 %
4.9 %
5.7 %
5.6 %
6.4 %
5.7 %
Total
4.6 %
7.6 %
7.5 %
9.0 %
7.2 %
3.8 %
5.9 %
8.5 %
10.0 %
7.2 %
2020
2021
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
$
4,449
$
—
$
—
$
—
$
4,449
$
—
$
—
$
—
$
—
$
—
NET REVENUES - Industrial
$
4,900
$
—
$
—
$
—
$
4,900
$
—
$
—
$
—
$
—
$
—
SEGMENT OP. INC. -Industrial
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
2020
2021
Pipeline Engineering (2)
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
ORDERS - Industrial
$
5,667
$
4,710
$
3,399
$
3,905
$
17,681
$
5,531
$
5,192
$
6,575
$
7,121
$
24,419
NET REVENUES - Industrial
$
4,455
$
2,966
$
4,843
$
2,997
$
15,262
$
2,994
$
3,124
$
3,236
$
5,248
$
14,602
SEGMENT OP. INC. -Industrial
$
(1,438)
$
(1,455)
$
(2,146)
$
(3,129)
$
(8,167)
$
(2,479)
$
(1,754)
$
(2,470)
$
(3,191)
$
(9,893)
(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.
2) Excluding Pipeline Engineering business
as related to the Industrial Segment with respect to accounting
irregularities noted on March 14, 2022 8-K filing.
CIRCOR INTERNATIONAL,
INC.
SUPPLEMENTAL INFORMATION
REGARDING DIVESTED & PIPELINE ENGINEERING
(in thousands, except
percentages) (unaudited)
2020
2021
Results excluding Divested &
Pipeline Engineering
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
ORDERS
Aerospace & Defense
$
72,031
$
76,616
$
59,105
$
46,795
$
254,547
$
72,999
$
54,243
$
54,028
$
73,898
$
255,168
Industrial
126,327
111,313
104,054
117,785
$
459,479
148,164
150,767
133,116
138,944
570,991
Total
$
198,358
$
187,929
$
163,159
$
164,580
$
714,026
$
221,163
$
205,010
$
187,144
$
212,842
$
826,159
NET REVENUES
Aerospace & Defense
$
65,401
$
62,123
$
61,129
$
77,357
$
266,010
$
58,488
$
60,613
$
63,461
$
69,979
$
252,541
Industrial
116,369
118,420
119,318
124,941
$
479,047
114,969
123,853
123,012
129,690
491,524
Total
$
181,770
$
180,543
$
180,447
$
202,298
$
745,057
$
173,457
$
184,466
$
186,473
$
199,669
$
744,065
SEGMENT OPERATING INCOME
Aerospace & Defense
$
12,445
$
13,075
$
14,409
$
18,450
$
58,379
$
9,988
$
11,741
$
15,927
$
18,416
$
56,073
Industrial
4,955
11,342
8,797
10,099
35,192
8,313
8,991
9,594
11,891
38,789
Corporate expenses
(7,246)
(9,006)
(7,243)
(6,882)
(30,378)
(9,035)
(7,950)
(7,015)
(6,636)
(30,638)
Total
$
10,154
$
15,411
$
15,963
$
21,667
$
63,193
$
9,266
$
12,782
$
18,506
$
23,671
$
64,224
SEGMENT OPERATING MARGIN %
Aerospace & Defense
19.0 %
21.0 %
23.6 %
23.9 %
21.9 %
17.1 %
19.4 %
25.1 %
26.3 %
22.2 %
Industrial
4.3 %
9.6 %
7.4 %
8.1 %
7.3 %
7.2 %
7.3 %
7.8 %
9.2 %
7.9 %
Total
5.6 %
8.5 %
8.8 %
10.7 %
8.5 %
5.3 %
6.9 %
9.9 %
11.9 %
8.6 %
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
2ND QTR
3RD QTR
4TH QTR
TOTAL
Net Cash (Used In) Provided By Operating
Activities
$
(23,425)
$
(25,475)
$
904
$
25,515
$
(22,481)
$
(19,210)
$
8,866
$
10,197
$
10,595
$
10,448
LESS
Capital expenditures, net of sale proceeds
(a)
3,412
3,545
2,312
3,275
12,544
3,392
2,644
4,541
4,168
14,745
FREE CASH FLOW
$
(26,837)
$
(29,020)
$
(1,408)
$
22,240
$
(35,025)
$
(22,602)
$
6,222
$
5,656
$
6,427
$
(4,297)
Gross Debt
$
603,564
$
593,379
$
541,617
$
521,562
$
521,562
$
538,541
$
524,391
$
518,464
$
526,311
$
526,311
Less: Cash & Cash equivalents
163,609
117,719
63,429
66,918
66,918
64,837
58,862
58,013
59,924
59,924
GROSS DEBT, NET OF CASH
$
439,955
$
475,660
$
478,188
$
454,644
$
454,644
$
473,704
$
465,529
$
460,451
$
466,387
$
466,387
TOTAL SHAREHOLDERS' EQUITY
$
254,961
$
233,789
$
174,354
$
152,898
$
152,898
$
138,663
$
122,185
$
121,256
$
133,716
$
133,716
GROSS DEBT AS % OF EQUITY
237 %
254 %
311 %
341 %
341 %
388 %
429 %
428 %
394 %
394 %
GROSS DEBT, NET OF CASH AS % OF EQUITY
173 %
203 %
274 %
297 %
297 %
342 %
381 %
380 %
349 %
349 %
(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
2ND QTR
3RD QTR
4TH QTR
TOTAL
NET (LOSS) INCOME
$
(99,387)
$
(36,542)
$
(64,709)
$
(17,976)
$
(218,614)
$
(11,796)
$
(18,784)
$
(2,630)
$
(28,427)
$
(61,638)
LESS:
Restructuring related inventory charges
(recoveries), net
(602)
—
351
—
(251)
—
958
(60)
(299)
599
Restructuring charges, net
2,883
588
352
1,122
4,945
2,060
2,281
(312)
205
4,234
Acquisition amortization
10,217
10,681
10,625
10,940
42,463
10,487
10,498
10,417
10,369
41,772
Acquisition depreciation
974
980
1,011
1,021
3,986
2,375
1,327
1,412
1,397
6,511
Special (recoveries) charges, net
(45,175)
5,019
586
322
(39,248)
(2,870)
4,523
1,126
17,259
20,038
Goodwill Impairment charge
138,078
—
—
—
138,078
—
—
—
10,500
10,500
Income tax impact
4,779
(21,786)
56,359
12,439
51,791
(44)
2,425
(596)
(1,622)
163
Net loss (income) from discontinued
operations
(9,162)
43,847
(341)
796
35,140
239
878
(2,510)
(13)
(1,406)
ADJUSTED NET INCOME
$
2,605
$
2,787
$
4,234
$
8,664
$
18,290
$
451
$
4,106
$
6,847
$
9,369
$
20,773
(LOSS) EARNINGS PER COMMON SHARE
(Diluted)
$
(4.99)
$
(1.83)
$
(3.24)
$
(0.89)
$
(10.79)
$
(0.58)
$
(0.91)
$
(0.13)
$
(1.38)
$
(3.00)
LESS:
Restructuring related inventory
charges
(0.03)
—
0.02
—
(0.01)
—
0.05
—
(0.01)
0.03
Restructuring charges, net
0.14
0.03
0.02
0.06
0.24
0.10
0.11
(0.02)
0.01
0.21
Acquisition amortization
0.51
0.53
0.53
0.54
2.10
0.51
0.51
0.51
0.51
2.04
Acquisition depreciation
0.05
0.05
0.05
0.05
0.20
0.12
0.06
0.07
0.07
0.32
Special (recoveries) charges, net
(2.27)
0.25
0.03
0.02
(1.94)
(0.14)
0.22
0.05
0.84
0.98
Impairment charge
6.93
—
—
—
6.81
—
—
—
0.51
0.51
Income tax impact
0.24
(1.09)
2.82
0.61
2.56
—
0.12
(0.03)
(0.08)
0.01
(Loss) earnings) per share from
discontinued operations
(0.46)
2.19
(0.02)
0.04
1.73
0.01
0.04
(0.12)
—
(0.07)
ADJUSTED EARNINGS PER SHARE
(Diluted)
$
0.13
$
0.14
$
0.21
$
0.43
$
0.90
$
0.02
$
0.20
$
0.33
$
0.46
$
1.01
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
2ND QTR
3RD QTR
4TH QTR
TOTAL
NET (LOSS) INCOME
$
(99,387)
$
(36,542)
$
(64,709)
$
(17,976)
$
(218,614)
$
(11,796)
$
(18,784)
$
(2,629)
$
(28,426)
$
(61,635)
LESS:
Interest expense, net
9,011
8,486
8,202
8,520
34,219
8,369
7,958
7,997
8,040
32,365
Depreciation
5,121
4,958
4,802
5,520
20,401
6,509
5,460
5,536
5,348
22,854
Amortization
10,611
10,881
10,925
11,244
43,662
10,696
10,657
10,576
10,375
42,304
Provision for income taxes
5,046
(21,126)
56,990
14,992
55,902
(297)
2,659
850
1,970
5,182
Loss (income) from discontinued
operations
(9,162)
43,847
(341)
796
35,140
239
878
(2,510)
(13)
(1,406)
EBITDA
$
(78,760)
$
10,504
$
15,869
$
23,096
$
(29,290)
$
13,720
$
8,828
$
19,820
$
(2,706)
$
39,664
LESS:
Restructuring related inventory charges
(recoveries)
(602)
—
351
—
(251)
—
958
(60)
(299)
599
Restructuring charges, net
2,883
588
352
1,122
4,945
2,060
2,281
(312)
205
4,234
Special (recoveries) charges, net
(45,175)
5,019
586
322
(39,248)
(2,870)
4,523
1,126
17,259
20,038
Goodwill impairment charge
138,078
—
—
—
138,078
—
—
—
10,500
10,500
ADJUSTED EBITDA
$
16,424
$
16,111
$
17,158
$
24,540
$
74,234
$
12,910
$
16,590
$
20,574
$
24,959
$
75,035
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
2ND QTR
3RD QTR
4TH QTR
TOTAL
GAAP OPERATING INCOME (LOSS)
$
(97,659)
$
(3,312)
$
892
$
5,132
$
(94,947)
$
(5,266)
$
(8,557)
$
3,451
$
(18,952)
$
(29,323)
LESS:
Restructuring related inventory charges
(recoveries)
(602)
—
351
—
(251)
—
958
(60)
(299)
599
Restructuring charges, net
2,883
588
352
1,122
4,945
2,060
2,281
(312)
205
4,234
Acquisition amortization
10,217
10,681
10,625
10,940
42,463
10,487
10,498
10,417
10,369
41,772
Acquisition depreciation
974
980
1,011
1,021
3,986
2,375
1,327
1,412
1,397
6,511
Special (recoveries) charges, net
(45,175)
5,019
586
322
(39,248)
(2,870)
4,523
1,126
17,259
20,038
Goodwill impairment charge
138,078
—
—
—
138,078
—
—
—
10,500
10,500
ADJUSTED OPERATING INCOME
$
8,716
$
13,956
$
13,817
$
18,537
$
55,026
$
6,787
$
11,029
$
16,035
$
20,479
$
54,331
GAAP OPERATING MARGIN
(51.1) %
(1.8) %
0.5 %
2.5 %
(12.4) %
(3.0) %
(4.6) %
1.8 %
(9.2) %
(3.9) %
LESS:
Restructuring related inventory charges
(recoveries)
(0.3) %
— %
0.2 %
— %
— %
— %
0.5 %
— %
(0.1) %
0.1 %
Restructuring charges, net
1.5 %
0.3 %
0.2 %
0.5 %
0.6 %
1.2 %
1.2 %
(0.2) %
0.1 %
0.6 %
Acquisition amortization
5.3 %
5.8 %
5.7 %
5.3 %
5.5 %
5.9 %
5.6 %
5.5 %
5.1 %
5.5 %
Acquisition depreciation
0.5 %
0.5 %
0.5 %
0.5 %
0.5 %
1.3 %
0.7 %
0.7 %
0.7 %
0.9 %
Special (recoveries) charges, net
(23.6) %
2.7 %
0.3 %
0.2 %
(5.1) %
(1.6) %
2.4 %
0.6 %
8.4 %
2.6 %
Goodwill impairment charge
72.2 %
— %
— %
— %
18.0 %
— %
— %
— %
5.1 %
1.4 %
ADJUSTED OPERATING MARGIN
4.6 %
7.6 %
7.5 %
9.0 %
7.2 %
3.8 %
5.9 %
8.5 %
10.0 %
7.2 %
Note regarding financial statements:
Restated 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220726006049/en/
Scott Solomon Senior Vice President Sharon Merrill Associates,
Inc. (857) 383-2409
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