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 GAAP and adjusted financial results for the first quarter ended April 3, 2022. Results are in line with previously disclosed selected preliminary financial expectations.

Q1 2022 Overview Results As Reported:

  • Orders of $222 million, down (2%) reported and up 1% organically
    • Aerospace & Defense orders of $78 million, up 7% reported and 8% organically
    • Industrial orders of $144 million, down (7%) reported and (2%) organically
  • Backlog of $477 million, up 12% reported driven by strong demand in Industrial
  • Revenue of $186 million up 5% reported and 8% organically
    • Aerospace & Defense revenue of $63 million, up 8% reported and 10% organically
    • Industrial revenue of $122 million, up 4% reported and 8% organically
  • GAAP operating (loss) of ($11.8) million, down (124%) reported
  • GAAP operating margin of (6.3%)
  • Adjusted operating income $10.4 million, up 53%
  • Adjusted operating margin of 5.6%, up 180 bps

Q1 2022 Overview Results Excluding Pipeline Engineering:

  • Orders of $219 million, down (1%) adjusted and up 2% organically
    • Aerospace & Defense orders of $78 million, up 7% adjusted and 8% organically
    • Industrial orders of $141 million, down (5%) adjusted and flat organically
  • Backlog of $477 million, up 13% adjusted, driven by strong demand in Industrial
  • Revenue of $183 million up 5% adjusted and 9% organically
    • Aerospace & Defense revenue of $63 million, up 8% adjusted and 10% organically
    • Industrial revenue of $119 million, up 4% adjusted and 8% organically
  • Adjusted operating income $13.6 million, up 47% adjusted
  • Adjusted operating margin of 7.4%, up 210 bps

CIRCOR President and CEO, Tony Najjar said, “Our team delivered solid first quarter 2022 results highlighted by continued strong orders performance in A&D and core Industrial businesses partially offset by lumpiness in our downstream business. Revenues for the quarter were up 9% organically excluding Pipeline Engineering, driven by both segments. Excluding Pipeline Engineering, adjusted operating income for the quarter was up 47% and adjusted operating margin up 210 basis points. With a focus on our strategic priorities driving value-based pricing, simplification and cost out actions, we continue to position the Company for growth, expanding margins and improving cash flow.”

Selected Consolidated Results

(unaudited)

 

($ millions except EPS)

 

April 3, 2022

 

As Restated April 4, 2021

 

Change

Orders

 

 

221.6

 

 

 

226.7

 

 

-2

%

Orders excluding Pipeline Engineering1

 

 

219.4

 

 

 

221.2

 

 

-1

%

Revenue

 

$

185.7

 

 

$

176.5

 

 

5

%

Revenue excluding Pipeline Engineering1

 

 

182.6

 

 

 

173.5

 

 

5

%

GAAP operating (loss) income

 

 

(11.8

)

 

 

(5.3

)

 

-124

%

Adjusted operating income2

 

 

10.4

 

 

 

6.8

 

 

53

%

Adjusted operating income excluding Pipeline Engineering1,2

 

 

13.6

 

 

 

9.3

 

 

47

%

GAAP operating margin

 

 

-6.3

%

 

 

-3.0

%

 

-330 bps

Adjusted operating margin2

 

 

5.6

%

 

 

3.8

%

 

180 bps

Adjusted operating margin excluding Pipeline Engineering1,2

 

 

7.4

%

 

 

5.3

%

 

210 bps

GAAP (loss) per share

 

$

(1.06

)

 

$

(0.59

)

 

-81

%

Adjusted earnings per share (diluted)2

 

$

0.05

 

 

$

0.02

 

 

150

%

Operating cash flow

 

 

(15.9

)

 

 

(19.2

)

 

17

%

Free cash flow3

 

 

(19.5

)

 

 

(22.6

)

 

14

%

Segment Results

(unaudited)

 

($ in millions)

 

April 3, 2022

 

As Restated April 4, 2021

 

Change

Aerospace & Defense

 

 

 

 

 

 

Orders

 

$

77.9

 

 

$

73.0

 

 

7

%

Revenue

 

 

63.4

 

 

 

58.5

 

 

8

%

Segment operating income

 

 

11.3

 

 

 

10.0

 

 

13

%

Segment operating margin

 

 

17.9

%

 

 

17.1

%

 

80 bps

 

 

 

 

 

 

 

Industrial

 

 

 

 

 

 

Orders

 

$

143.7

 

 

$

153.7

 

 

-7

%

Orders - excluding Pipeline Engineering1

 

 

141.5

 

 

 

148.2

 

 

-5

%

Revenue

 

 

122.3

 

 

 

118.0

 

 

4

%

Revenue - excluding Pipeline Engineering1

 

$

119.3

 

 

$

115.0

 

 

4

%

Segment operating income

 

 

6.9

 

 

 

5.8

 

 

18

%

Segment operating income excluding Pipeline Engineering

 

 

10.0

 

 

 

8.3

 

 

20

%

Segment operating margin

 

 

5.6

%

 

 

4.9

%

 

70 bps

Segment operating margin (adjusted)

 

 

8.4

%

 

 

7.2

%

 

120 bps

  1. Orders, revenue, adjusted operating income and adjusted operating margin excluding Pipeline Engineering businesses are non-GAAP measures. Pipeline Engineering accounting irregularities were initially noted on March 14,2022 8-K Filing and further described in the Company's Annual report Form 10-K filed with SEC on July 26, 2022 as related to the Industrial Segment.
  2. 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. 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 expense.
  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.

Company Announces Executive Appointments

CIRCOR also announced that Tony Najjar has been appointed President & Chief Executive Officer, and Arjun “AJ” Sharma has been appointed Chief Financial Officer. Mr. Najjar, who joined the Company in 2015, has most recently served as the Chief Operating Officer and Interim President & Chief Executive Officer. Mr. Sharma, who joined the Company in 2009, has most recently served as Senior Vice President, Business Development and Interim Chief Financial Officer. Mr. Sharma will retain his leadership of business development in his new role.

“Since being appointed to their interim roles, Tony and AJ have demonstrated their ability to lead the Company through challenging times,” said Helmuth Ludwig, Chair of CIRCOR’s Board of Directors. “As the Board continues to evaluate strategic alternatives for the Company, we believe Tony and AJ are the right leaders for CIRCOR. While completing the accounting review that occurred earlier this year, they have also stabilized business operations, focused on employee engagement, strengthened customer relationships and are driving growth and margin expansion initiatives. We look forward to partnering with Tony and AJ to create value for our stakeholders.”

Use of Non-GAAP Financial Measures

In this press release, the Company uses the non-GAAP financial measures backlog, backlog excluding Pipeline Engineering, orders, orders excluding Pipeline Engineering, revenue excluding Pipeline Engineering, adjusted operating income, adjusted operating income excluding Pipeline Engineering, adjusted operating margin, adjusted operating margin excluding Pipeline Engineering, adjusted earnings per share 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 or exited businesses and to provide a comparison of changes in our backlog, orders and revenue, we also discuss these changes on an “organic” basis. Organic is calculated assuming the divestitures and/or exited business are completed prior to April 3, 2022 were completed on January 1, 2021 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 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

 

 

April 3, 2022

 

As Restated April 4, 2021

 

 

 

 

 

Net revenues

 

$

185,655

 

 

$

176,451

 

Cost of revenues

 

 

130,372

 

 

 

124,889

 

Gross profit

 

 

55,283

 

 

 

51,562

 

Selling, general and administrative expenses

 

 

58,069

 

 

 

57,637

 

Special and restructuring charges (recoveries), net

 

 

9,003

 

 

 

(809

)

Operating (loss)

 

 

(11,789

)

 

 

(5,266

)

Other expense (income):

 

 

 

 

Interest expense, net

 

 

9,456

 

 

 

8,369

 

Other (income) expense

 

 

(1,287

)

 

 

(1,781

)

Total other expense, net

 

 

8,169

 

 

 

6,588

 

(Loss) from continuing operations before income taxes

 

 

(19,958

)

 

 

(11,854

)

Provision for (benefit from) income taxes

 

 

1,523

 

 

 

(297

)

(Loss) from continuing operations, net of tax

 

$

(21,481

)

 

$

(11,557

)

(Loss) from discontinued operations, net of tax

 

$

 

 

$

(239

)

Net (loss)

 

$

(21,481

)

 

$

(11,796

)

 

 

 

 

 

Basic (loss) per common share:

 

 

 

 

Basic from continuing operations

 

$

(1.06

)

 

$

(0.58

)

Basic from discontinued operations

 

$

 

 

$

(0.01

)

Net (loss)

 

$

(1.06

)

 

$

(0.59

)

Diluted (loss) per common share:

 

 

 

 

Diluted from continuing operations

 

$

(1.06

)

 

$

(0.58

)

Diluted from discontinued operations

 

$

 

 

$

(0.01

)

Net (loss)

 

$

(1.06

)

 

$

(0.59

)

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

Basic

 

 

20,310

 

 

 

20,054

 

Diluted

 

 

20,310

 

 

 

20,054

 

CIRCOR INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands) (unaudited)

 

 

Three Months Ended

 

April 3, 2022

 

As Restated April 4, 2021

OPERATING ACTIVITIES

 

 

 

Net (loss)

$

(21,481

)

 

$

(11,796

)

Income (loss) from discontinued operations, net of income taxes

 

 

 

 

(239

)

(Loss) from continuing operations, net of tax

 

(21,481

)

 

 

(11,557

)

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

 

 

 

Depreciation

 

5,000

 

 

 

6,509

 

Amortization

 

9,397

 

 

 

10,696

 

Change in provision for bad debt expense

 

(89

)

 

 

(465

)

Write down of inventory

 

439

 

 

 

188

 

Compensation expense of share-based plans

 

(84

)

 

 

1,402

 

Amortization of debt issuance costs

 

514

 

 

 

995

 

Deferred tax provision

 

 

 

 

(1,011

)

(Gain) on sale of businesses

 

 

 

 

(1,947

)

Other impairment charges

 

8,011

 

 

 

 

Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:

 

 

 

Trade accounts receivable

 

4,242

 

 

 

(3,707

)

Inventories

 

(15,465

)

 

 

(8,255

)

Prepaid expenses and other assets

 

(5,671

)

 

 

(8,875

)

Accounts payable, accrued expenses and other liabilities

 

(737

)

 

 

(2,547

)

Net cash used in continuing operations activities

 

(15,924

)

 

 

(18,574

)

Net cash used in discontinued operations activities

 

 

 

 

(636

)

Net cash (used in) operating activities

 

(15,924

)

 

 

(19,210

)

INVESTING ACTIVITIES

 

 

 

Additions of property, plant and equipment

 

(3,607

)

 

 

(3,394

)

Proceeds from the sale of property, plant and equipment

 

15

 

 

 

2

 

Proceeds from beneficial interest of factored receivables

 

927

 

 

 

812

 

Proceeds from sale of business

 

 

 

 

7,193

 

Net cash (used in) provided by investing activities

 

(2,665

)

 

 

4,613

 

FINANCING ACTIVITIES

 

 

 

Proceeds from long-term debt

 

51,325

 

 

 

63,500

 

Payments of long-term debt

 

(30,875

)

 

 

(46,500

)

Net Change in short-term borrowings

 

925

 

 

 

(22

)

Proceeds from the exercise of stock options

 

 

 

 

151

 

Withholding tax payments on net share settlements on equity rewards

 

(821

)

 

 

(3,274

)

Net cash used in financing activities

 

20,554

 

 

 

13,855

 

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

 

(712

)

 

 

(1,615

)

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

 

1,253

 

 

 

(2,357

)

Cash, cash equivalents and restricted cash at beginning of period

 

61,374

 

 

 

68,607

 

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

$

62,627

 

 

$

66,250

 

CIRCOR INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

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

 

 

April 3, 2022

 

December 31, 2021

ASSETS

 

 

 

CURRENT ASSETS:

 

 

 

Cash and cash equivalents

$

61,122

 

 

$

59,924

 

Trade accounts receivable, net

 

95,638

 

 

 

100,149

 

Inventories

 

134,540

 

 

 

123,343

 

Prepaid expenses and other current assets

 

113,162

 

 

 

110,749

 

Total Current Assets

 

404,462

 

 

 

394,165

 

PROPERTY, PLANT AND EQUIPMENT, NET

 

150,546

 

 

 

154,461

 

OTHER ASSETS:

 

 

 

Goodwill

 

122,256

 

 

 

122,906

 

Intangibles, net

 

290,335

 

 

 

303,476

 

Deferred income taxes

 

764

 

 

 

756

 

Other assets

 

43,275

 

 

 

43,534

 

TOTAL ASSETS

$

1,011,638

 

 

$

1,019,298

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

CURRENT LIABILITIES:

 

 

 

Accounts payable

$

83,134

 

 

$

83,382

 

Accrued expenses and other current liabilities

 

75,711

 

 

 

81,998

 

Accrued compensation and benefits

 

30,560

 

 

 

26,551

 

Short-term borrowings and current portion of long-term debt

 

2,531

 

 

 

1,611

 

Total Current Liabilities

 

191,936

 

 

 

193,542

 

LONG-TERM DEBT

 

532,580

 

 

 

511,694

 

DEFERRED INCOME TAXES

 

21,283

 

 

 

21,721

 

PENSION LIABILITY, NET

 

119,170

 

 

 

120,881

 

OTHER NON-CURRENT LIABILITIES

 

36,348

 

 

 

37,744

 

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; 21,683,147 and 21,633,131 shares issued at April 3, 2022 and December 31, 2021 respectively

 

217

 

 

 

217

 

Additional paid-in capital

 

454,269

 

 

 

454,852

 

Accumulated deficit

 

(219,562

)

 

 

(198,081

)

Common treasury stock, at cost (1,372,488 shares at April 3, 2022 and December 31, 2021)

 

(74,472

)

 

 

(74,472

)

Accumulated other comprehensive loss, net of tax

 

(50,131

)

 

 

(48,800

)

Total Shareholders’ Equity

 

110,321

 

 

 

133,716

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

1,011,638

 

 

$

1,019,298

 

CIRCOR INTERNATIONAL, INC.

SUMMARY OF ORDERS AND BACKLOG

(in millions) (unaudited)

 

 

 

 

 

Three Months Ended

 

 

 

 

April 3, 2022

 

As Restated April 4, 2021

 

 

 

 

 

 

 

ORDERS (1)

 

 

 

 

 

 

Aerospace & Defense

 

$

77.9

 

$

73.0

 

 

Industrial

 

 

143.7

 

 

153.7

 

 

Total Orders

 

$

221.6

 

$

226.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

April 3, 2022

 

As Restated April 4, 2021

BACKLOG (2)

 

 

 

 

 

 

Aerospace & Defense

 

$

199.7

 

$

198.2

 

 

Industrial

 

 

276.8

 

 

226.4

 

 

Total Backlog

 

$

476.5

 

$

424.6

 

 

 

 

 

 

 

Note 1: Orders do not include the foreign exchange impact due to the re-measurement of customer backlog amounts denominated in foreign currencies. Industrial includes $2.3 million and $5.5 million orders in Pipeline Engineering for 2022 and 2021 respectively.

Note 2: Backlog is calculated as current period orders plus unshipped customer orders from prior periods for which revenue has not been recognized. Industrial includes $1.2 million in Pipeline Engineering for 2021.

CIRCOR INTERNATIONAL, INC.

SEGMENT INFORMATION

(in thousands, except percentages) (unaudited)

 

 

 

2021 As Restated

 

2022

 

As reported

 

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

ORDERS

 

 

 

 

 

 

 

Aerospace & Defense

 

$

72,999

 

$

54,243

 

$

54,028

 

$

73,898

 

$

255,168

 

$

77,890

 

Industrial

 

 

153,695

 

 

155,959

 

 

139,691

 

 

146,065

 

 

595,410

 

 

143,727

 

Total

 

$

226,693

 

$

210,203

 

$

193,719

 

$

219,964

 

$

850,578

 

$

221,617

 

 

 

 

 

 

 

 

 

NET REVENUES

 

 

 

 

 

 

 

Aerospace & Defense

 

$

58,488

 

$

60,613

 

$

63,461

 

$

69,979

 

$

252,541

 

$

63,370

 

Industrial

 

 

117,963

 

 

126,977

 

 

126,248

 

 

134,938

 

 

506,126

 

 

122,285

 

Total

 

$

176,451

 

$

187,590

 

$

189,709

 

$

204,917

 

$

758,667

 

$

185,655

 

 

 

 

 

 

 

 

 

SEGMENT OPERATING INCOME

 

 

 

 

Aerospace & Defense

 

$

9,988

 

$

11,741

 

$

15,927

 

$

18,416

 

$

56,073

 

$

11,320

 

Industrial

 

 

5,834

 

 

7,237

 

 

7,124

 

 

8,700

 

 

28,896

 

 

6,857

 

Corporate expenses

 

 

(9,035

)

 

(7,950

)

 

(7,015

)

 

(6,636

)

 

(30,638

)

 

(7,770

)

Total

 

$

6,787

 

$

11,028

 

$

16,036

 

$

20,480

 

$

54,331

 

$

10,407

 

 

 

 

 

 

 

 

 

SEGMENT OPERATING MARGIN %

 

 

 

 

Aerospace & Defense

 

 

17.1

%

 

19.4

%

 

25.1

%

 

26.3

%

 

22.2

%

 

17.9

%

Industrial

 

 

4.9

%

 

5.7

%

 

5.6

%

 

6.4

%

 

5.7

%

 

5.6

%

Total

 

 

3.8

%

 

5.9

%

 

8.5

%

 

10.0

%

 

7.2

%

 

5.6

%

 

 

 

 

 

 

 

 

 

 

2021 As Restated

 

2022

 

Pipeline Engineering (1)

 

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

ORDERS - Industrial

 

$

5,531

 

$

5,192

 

$

6,575

 

$

7,121

 

$

24,419

 

$

2,260

 

NET REVENUES - Industrial

 

$

2,994

 

$

3,124

 

$

3,236

 

$

5,248

 

$

14,602

 

$

3,012

 

SEGMENT OP. INC. -Industrial

 

$

(2,479

)

$

(1,754

)

$

(2,470

)

$

(3,191

)

$

(9,893

)

$

(3,190

)

1) 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 PIPELINE ENGINEERING

(in thousands, except percentages) (unaudited)

 

 

 

2021 As Restated

 

2022

 

Results excluding Pipeline Engineering

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

ORDERS

 

 

 

 

 

 

Aerospace & Defense

$

72,999

 

$

54,243

 

$

54,028

 

$

73,898

 

$

255,168

 

$

77,890

 

Industrial

 

148,164

 

 

150,767

 

 

133,116

 

 

138,944

 

 

570,991

 

 

141,467

 

Total

$

221,163

 

$

205,010

 

$

187,144

 

$

212,842

 

$

826,159

 

$

219,357

 

 

 

 

 

 

 

 

 

NET REVENUES

 

 

 

 

 

 

Aerospace & Defense

$

58,488

 

$

60,613

 

$

63,461

 

$

69,979

 

$

252,541

 

$

63,370

 

Industrial

 

114,969

 

 

123,853

 

 

123,012

 

 

129,690

 

 

491,524

 

 

119,273

 

Total

$

173,457

 

$

184,466

 

$

186,473

 

$

199,669

 

$

744,065

 

$

182,643

 

 

 

 

 

 

 

 

 

SEGMENT OPERATING INCOME

 

 

 

 

Aerospace & Defense

$

9,988

 

$

11,741

 

$

15,927

 

$

18,416

 

$

56,073

 

$

11,320

 

Industrial

 

8,313

 

 

8,991

 

 

9,594

 

 

11,891

 

 

38,789

 

 

10,047

 

Corporate expenses

 

(9,035

)

 

(7,950

)

 

(7,015

)

 

(6,636

)

 

(30,638

)

 

(7,770

)

Total

$

9,266

 

$

12,782

 

$

18,506

 

$

23,671

 

$

64,224

 

$

13,597

 

 

 

 

 

 

 

 

 

SEGMENT OPERATING MARGIN %

 

 

 

 

Aerospace & Defense

 

17.1

%

 

19.4

%

 

25.1

%

 

26.3

%

 

22.2

%

 

17.9

%

Industrial

 

7.2

%

 

7.3

%

 

7.8

%

 

9.2

%

 

7.9

%

 

8.4

%

Total

 

5.3

%

 

6.9

%

 

9.9

%

 

11.9

%

 

8.6

%

 

7.4

%

CIRCOR INTERNATIONAL, INC.

RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS

(in thousands, except percentages) (unaudited)

 

 

 

2021 As Restated

 

2022

 

 

 

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

 

 

 

 

 

 

 

 

Net Cash (Used In) Provided By Operating Activities

 

$

(19,210

)

$

8,866

 

$

10,197

 

$

10,595

 

$

10,448

 

$

(15,924

)

LESS

 

 

 

 

 

 

 

Capital expenditures, net of sale proceeds (a)

 

 

3,392

 

 

2,644

 

 

4,541

 

 

4,168

 

 

14,745

 

 

3,592

 

FREE CASH FLOW

 

$

(22,602

)

$

6,222

 

$

5,656

 

$

6,427

 

$

(4,297

)

$

(19,516

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Debt

 

$

538,541

 

$

524,391

 

$

518,464

 

$

526,311

 

$

526,311

 

$

546,775

 

Less: Cash & Cash equivalents

 

 

64,837

 

 

58,862

 

 

58,013

 

 

59,924

 

 

59,924

 

 

61,122

 

GROSS DEBT, NET OF CASH

 

$

473,704

 

$

465,529

 

$

460,451

 

$

466,387

 

$

466,387

 

$

485,653

 

 

 

 

 

 

 

 

 

TOTAL SHAREHOLDERS' EQUITY

 

$

138,663

 

$

122,185

 

$

121,256

 

$

133,716

 

$

133,716

 

$

110,321

 

 

 

 

 

 

 

 

 

GROSS DEBT AS % OF EQUITY

 

 

388

%

 

429

%

 

428

%

 

394

%

 

394

%

 

496

%

GROSS DEBT, NET OF CASH AS % OF EQUITY

 

 

342

%

 

381

%

 

380

%

 

349

%

 

349

%

 

440

%

 

 

 

 

 

 

 

 

(a) Includes capital expenditures, net of proceeds of asset sales from GAAP operating cash flow.

 

CIRCOR INTERNATIONAL, INC.

RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS

(in thousands, except percentages) (unaudited)

 

 

 

2021 As Restated

 

2022

 

 

 

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

NET (LOSS) INCOME

 

$

(11,796

)

$

(18,784

)

$

(2,630

)

$

(28,427

)

$

(61,638

)

$

(21,481

)

LESS:

 

 

 

 

 

 

 

Restructuring related inventory charges (recoveries), net

 

 

 

 

958

 

 

(60

)

 

(299

)

 

599

 

 

2,757

 

Restructuring charges, net

 

 

2,060

 

 

2,281

 

 

(312

)

 

205

 

 

4,234

 

 

6,447

 

Acquisition amortization

 

 

10,487

 

 

10,498

 

 

10,417

 

 

10,369

 

 

41,772

 

 

9,391

 

Acquisition depreciation

 

 

2,375

 

 

1,327

 

 

1,412

 

 

1,397

 

 

6,511

 

 

1,045

 

Special (recoveries) charges, net

 

 

(2,870

)

 

4,523

 

 

1,126

 

 

17,259

 

 

20,038

 

 

2,556

 

Goodwill Impairment charge

 

 

 

 

 

 

 

 

10,500

 

 

10,500

 

 

 

Income tax impact

 

 

(44

)

 

2,425

 

 

(596

)

 

(1,622

)

 

163

 

 

384

 

Net loss (income) from discontinued operations

 

 

239

 

 

878

 

 

(2,510

)

 

(13

)

 

(1,406

)

 

 

ADJUSTED NET INCOME

 

$

451

 

$

4,106

 

$

6,847

 

$

9,369

 

$

20,773

 

$

1,099

 

 

 

 

 

 

 

 

 

(LOSS) EARNINGS PER COMMON SHARE (Diluted)

 

$

(0.58

)

$

(0.91

)

$

(0.13

)

$

(1.38

)

$

(3.00

)

 

(1.06

)

LESS:

 

 

 

 

 

 

 

Restructuring related inventory charges

 

 

 

 

0.05

 

 

 

 

(0.01

)

 

0.03

 

 

0.14

 

Restructuring charges, net

 

 

0.10

 

 

0.11

 

 

(0.02

)

 

0.01

 

 

0.21

 

 

0.32

 

Acquisition amortization

 

 

0.51

 

 

0.51

 

 

0.51

 

 

0.51

 

 

2.04

 

 

0.46

 

Acquisition depreciation

 

 

0.12

 

 

0.06

 

 

0.07

 

 

0.07

 

 

0.32

 

 

0.05

 

Special (recoveries) charges, net

 

 

(0.14

)

 

0.22

 

 

0.05

 

 

0.84

 

 

0.98

 

 

0.13

 

Impairment charge

 

 

 

 

 

 

 

 

0.51

 

 

0.51

 

 

 

Income tax impact

 

 

 

 

0.12

 

 

(0.03

)

 

(0.08

)

 

0.01

 

 

0.02

 

(Loss) earnings) per share from discontinued operations

 

 

0.01

 

 

0.04

 

 

(0.12

)

 

 

 

(0.07

)

 

 

ADJUSTED EARNINGS PER SHARE (Diluted)

 

$

0.02

 

$

0.20

 

$

0.33

 

$

0.46

 

$

1.01

 

$

0.05

 

CIRCOR INTERNATIONAL, INC.

RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS

(in thousands, except percentages) (unaudited)

 

 

 

2021 As Restated

 

2022

 

 

 

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

 

 

 

 

 

 

 

 

NET (LOSS) INCOME

 

$

(11,796

)

$

(18,784

)

$

(2,629

)

$

(28,426

)

$

(61,635

)

$

(21,481

)

LESS:

 

 

 

 

 

 

 

Interest expense, net

 

 

8,369

 

 

7,958

 

 

7,997

 

 

8,040

 

 

32,365

 

 

9,456

 

Depreciation

 

 

6,509

 

 

5,460

 

 

5,536

 

 

5,348

 

 

22,854

 

 

5,000

 

Amortization

 

 

10,696

 

 

10,657

 

 

10,576

 

 

10,375

 

 

42,304

 

 

9,397

 

Provision for income taxes

 

 

(297

)

 

2,659

 

 

850

 

 

1,970

 

 

5,182

 

 

1,523

 

Loss (income) from discontinued operations

 

 

239

 

 

878

 

 

(2,510

)

 

(13

)

 

(1,406

)

 

 

EBITDA

 

$

13,720

 

$

8,828

 

$

19,820

 

$

(2,706

)

$

39,664

 

$

3,895

 

LESS:

 

 

 

 

 

 

 

Restructuring related inventory charges (recoveries)

 

 

 

 

958

 

 

(60

)

 

(299

)

 

599

 

 

2,757

 

Restructuring charges, net

 

 

2,060

 

 

2,281

 

 

(312

)

 

205

 

 

4,234

 

 

6,447

 

Special (recoveries) charges, net

 

 

(2,870

)

 

4,523

 

 

1,126

 

 

17,259

 

 

20,038

 

 

2,556

 

Goodwill impairment charge

 

 

 

 

 

 

 

 

10,500

 

 

10,500

 

 

 

ADJUSTED EBITDA

 

$

12,910

 

$

16,590

 

$

20,574

 

$

24,959

 

$

75,035

 

$

15,655

 

CIRCOR INTERNATIONAL, INC.

RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS

(in thousands, except percentages) (unaudited)

 

 

 

2021 As Restated

 

2022

 

 

 

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

 

 

 

 

 

 

 

 

GAAP OPERATING INCOME (LOSS)

 

$

(5,266

)

$

(8,557

)

$

3,451

 

$

(18,952

)

$

(29,323

)

$

(11,789

)

LESS:

 

 

 

 

 

 

 

Restructuring related inventory charges (recoveries)

 

 

 

 

958

 

 

(60

)

 

(299

)

 

599

 

 

2,757

 

Restructuring charges, net

 

 

2,060

 

 

2,281

 

 

(312

)

 

205

 

 

4,234

 

 

6,447

 

Acquisition amortization

 

 

10,487

 

 

10,498

 

 

10,417

 

 

10,369

 

 

41,772

 

 

9,391

 

Acquisition depreciation

 

 

2,375

 

 

1,327

 

 

1,412

 

 

1,397

 

 

6,511

 

 

1,045

 

Special (recoveries) charges, net

 

 

(2,870

)

 

4,523

 

 

1,126

 

 

17,259

 

 

20,038

 

 

2,556

 

Goodwill impairment charge

 

 

 

 

 

 

 

 

10,500

 

 

10,500

 

 

 

ADJUSTED OPERATING INCOME

 

$

6,787

 

$

11,029

 

$

16,035

 

$

20,479

 

$

54,331

 

$

10,407

 

 

 

 

 

 

 

 

 

GAAP OPERATING MARGIN

 

 

(3.0

) %

 

(4.6

) %

 

1.8

%

 

(9.2

) %

 

(3.9

) %

 

(6.3

) %

LESS:

 

 

 

 

 

 

 

Restructuring related inventory charges (recoveries)

 

 

%

 

0.5

%

 

%

 

(0.1

) %

 

0.1

%

 

1.5

%

Restructuring charges, net

 

 

1.2

%

 

1.2

%

 

(0.2

) %

 

0.1

%

 

0.6

%

 

3.5

%

Acquisition amortization

 

 

5.9

%

 

5.6

%

 

5.5

%

 

5.1

%

 

5.5

%

 

5.1

%

Acquisition depreciation

 

 

1.3

%

 

0.7

%

 

0.7

%

 

0.7

%

 

0.9

%

 

0.6

%

Special (recoveries) charges, net

 

 

(1.6

) %

 

2.4

%

 

0.6

%

 

8.4

%

 

2.6

%

 

1.4

%

Goodwill impairment charge

 

 

%

 

%

 

%

 

5.1

%

 

1.4

%

 

%

ADJUSTED OPERATING MARGIN

 

 

3.8

%

 

5.9

%

 

8.5

%

 

10.0

%

 

7.2

%

 

5.6

%

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.

Scott Solomon Senior Vice President Sharon Merrill Associates, Inc. (857) 383-2409

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