CIRCOR International, Inc. (NYSE: CIR), one of the world’s leading providers of mission critical flow control products and services for the Industrial and Aerospace & Defense markets, today announced GAAP and adjusted financial results for the third quarter ended October 3, 2021.
Third Quarter 2021 Overview:
- Backlog of $435 million, up 15% YTD, driven by strong demand across Industrial end markets
-
Orders of $194M, up 16% reported and 15% organically
- Industrial orders of $140 million, up 30% reported and 28% organically
- Aerospace & Defense orders of $54 million, down (9)% reported and (10)% organically
-
Revenue of $191 million, up 2% reported and 1% organically, was adversely impacted by $(10) million due to global supply chain, logistics, and labor constraints late in the third quarter
- Industrial revenue of $129 million, up 4% reported and 3% organically
- Aerospace & Defense revenue of $61 million, down (1)% reported and (2)% organically
- GAAP operating margin of 3.5%; Adjusted operating margin of 10.1%, up 80 bps
- GAAP earnings per share of $0.06; Adjusted earnings per share of $0.50, up 39%
- GAAP operating cash flow of $11 million; Free cash flow of $7 million, up $7 million
CIRCOR President and CEO Scott Buckhout said, “Our team delivered solid third quarter 2021 results with 15% organic orders growth, 80 basis points of margin expansion, and a 39% increase in adjusted earnings. While global supply chain constraints adversely impacted our 3Q results and 4Q outlook, we remain encouraged by robust demand for our Industrial products and strong positions on growing Aerospace & Defense programs.”
Mr. Buckhout continued, “Despite the near term macro challenges, our focus remains on our long term strategic priorities. We plan to deliver 45 new products for our customers in 2021 that will drive future organic growth and margin expansion. In addition, our teams have accelerated price increases across product lines in order to mitigate the impact of higher inflation. And finally, we continue to use our free cash flow to pay down debt in order to achieve a net debt to adjusted EBITDA ratio of 2.0 to 2.5.”
Mr. Buckhout concluded, “Our $435 million backlog positions us well for organic revenue, earnings, and free cash flow growth, and we continue to drive long-term value creation for employees, customers, and shareholders.”
4Q'21 Guidance Update
In the fourth quarter of 2021, CIRCOR expects organic revenue to increase by 1 to 3% which reflects $(15) million of delayed revenue due to global supply chain, logistics, and labor challenges. Industrial revenue is expected to increase by 3 to 6% driven by aftermarket volume, and Aerospace & Defense revenue is expected to be down (5) to 0% with growth in both Commercial Aerospace and Defense aftermarket sales offset by lower large Defense program shipments. In addition, CIRCOR expects adjusted EPS of $0.60 to $0.65 and free cash flow conversion of 85 to 105% ($10 to $15 million).
2021 Guidance Update
For the full year of 2021, CIRCOR expects organic revenue to decrease by (2) to (0)% (previously 2 to 4%) which reflects $(25) million of delayed revenue due to global supply chain, logistics, and labor challenges. Reported revenue growth for 2021 is expected to be between (1) to 1%. Adjusted EPS is now expected to be of $1.69 to $1.74 (previously $2.10 to $2.30) driven by our lower revenue outlook and the impact of continued inflationary pressure. Finally, we expect adjusted net income to free cash flow conversion to be 15% to 25% as supply chain issues delay the completion of in-process projects and adversely impact the timing of customer collections.
Presentation slides that provide supporting information to this guidance and first-quarter results are posted on the “Investors” section of the Company’s website and will be discussed during the conference call at 9:00 a.m. ET today.
Conference Call Information
CIRCOR International will hold a conference call to review its financial results at 9:00 a.m. ET today, November 12, 2021. To listen to the live conference call and view the accompanying presentation slides, please visit “Webcasts & Presentations” in the “Investors” portion of CIRCOR’s website. The live call also can be accessed by dialing (877) 407-5790 or (201) 689-8328. Participants are encouraged to dial in to the call at least 15 minutes prior to the start time. The webcast will be archived on the Company’s website for one year.
Selected Preliminary Consolidated Results
($ millions except EPS) | Q3 2021 | Q3 2020 | Change | Q3 YTD
| Q3 YTD
| Change | ||||||||||||||||
Orders | 193.7 | 166.6 | 16 | % | 630.6 | 567.7 | 11 | % | ||||||||||||||
Orders - excluding divested businesses1 | 193.7 | 166.6 | 16 | % | 630.6 | 563.2 | 12 | % | ||||||||||||||
Revenue | $ | 190.8 | $ | 186.6 | 2 | % | $ | 561.8 | $ | 564.9 | -1 | % | ||||||||||
Revenue - excluding divested businesses1 | 190.8 | 186.6 | 2 | % | 561.8 | 560.0 | — | % | ||||||||||||||
GAAP operating (loss) income | 6.7 | 4.4 | 51 | % | 2.1 | (70.4) | 103 | % | ||||||||||||||
Adjusted operating income2 | 19.3 | 17.3 | 11 | % | 46.3 | 44.3 | 5 | % | ||||||||||||||
GAAP operating margin | 3.5 | % | 2.4 | % | 110 bps | 0.4 | % | (12.5) | % | 1290 bps | ||||||||||||
Adjusted operating margin2 | 10.1 | % | 9.3 | % | 80 bps | 8.2 | % | 7.8 | % | 40 bps | ||||||||||||
Adjusted operating margin ex divestitures2 | 10.1 | % | 9.3 | % | 80 bps | 8.2 | % | 7.9 | % | 30 bps | ||||||||||||
GAAP earnings (loss) per share (diluted) | $ | 0.06 | $ | (2.93) | 102 | % | $ | (1.07) | $ | (8.59) | 88 | % | ||||||||||
Adjusted earnings per share (diluted)2 | $ | 0.50 | $ | 0.36 | 39 | % | $ | 1.10 | $ | 0.78 | 41 | % | ||||||||||
Operating cash flow | 11.4 | 2.5 | 362 | % | 4.7 | (46.4) | 110 | % | ||||||||||||||
Free cash flow3 | 6.8 | 0.1 | n/a | (5.9) | (55.6) | 89 | % | |||||||||||||||
Segment Results
($ in millions) | Q3 2021 | Q3 2020 | Change | Q3 YTD
| Q3 YTD
| Change | ||||||||||||||||
Aerospace & Defense | ||||||||||||||||||||||
Orders | $ | 54.0 | $ | 59.1 | -9 | % | $ | 181.3 | $ | 207.8 | -13 | % | ||||||||||
Revenue | 61.5 | 62.2 | -1 | % | 182.2 | 190.0 | -4 | % | ||||||||||||||
Segment operating income | 14.9 | 14.8 | 1% | 37.7 | 40.4 | -7 | % | |||||||||||||||
Segment operating margin | 24.2 | % | 23.7 | % | 50 bps | 20.7 | % | 21.3 | % | -60 bps | ||||||||||||
Industrial | ||||||||||||||||||||||
Orders | $ | 139.7 | $ | 107.5 | 30 | % | $ | 449.3 | $ | 359.9 | 25 | % | ||||||||||
Orders - excluding divested businesses1 | 139.7 | 107.5 | 30 | % | 449.3 | 355.5 | 26 | % | ||||||||||||||
Revenue | 129.3 | 124.4 | 4 | % | 379.5 | 374.9 | 1 | % | ||||||||||||||
Revenue - excluding divested businesses1 | 129.3 | 124.4 | 4 | % | 379.5 | 370.0 | 3 | % | ||||||||||||||
Segment operating income | 11.3 | 9.8 | 15 | % | 31.4 | 27.4 | 15 | % | ||||||||||||||
Segment operating margin (adjusted) | 8.7 | % | 7.9 | % | 80 bps | 8.3 | % | 7.4 | % | 90 bps | ||||||||||||
- Orders and revenue excluding divested businesses are non-GAAP measures and are calculated by subtracting the orders and revenues generated by the divested businesses during the periods prior to their divestiture from reported orders and revenues. Divested businesses include Instrumentation & Sampling (all Industrial) which was sold during Q1 2020.
- Adjusted consolidated and segment results for Q3 2021 exclude net income from discontinued operations of $2.5 million and net loss from non-cash acquisition-related intangible amortization, special and restructuring charges totaling $12.6 million. These charges include: (i) $11.8 million for non-cash acquisition-related intangible amortization and depreciation expense; and (ii) $0.8 million of other special and restructuring recoveries. Adjusted consolidated and segment results for Q3 2020 exclude net income from discontinued operations of $0.3 million and net loss from non-cash acquisition-related intangible amortization, special and restructuring charges totaling $12.9 million. These charges include: (i) $11.6 million for non-cash acquisition-related intangible amortization and depreciation expense; (ii) $0.8 million of professional fees and other costs associated with restructuring and cost reductions; and (iii) $0.5 million of other special and restructuring charges. It also excludes the Q3 2020 charge for valuation allowance against deferred tax assets by virtue of using an effective tax rate in the adjusted results which is a $53.3 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.
Use of Non-GAAP Financial Measures
Adjusted operating income, adjusted operating margin, adjusted net income, adjusted earnings per share (diluted), EBITDA, adjusted EBITDA, net debt, free cash flow and organic growth (and such measures further excluding discontinued operations) are non-GAAP financial measures. These non-GAAP financial measures are used by management in our financial and operating decision making because we believe they reflect our ongoing business and facilitate period-to-period comparisons. We believe these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating the Company’s current operating performance and future prospects in the same manner as management does, if they so choose. These non-GAAP financial measures also allow investors and others to compare the Company’s current financial results with the Company’s past financial results in a consistent manner. For example:
We exclude costs and tax effects associated with restructuring activities, such as reducing overhead and consolidating facilities. We believe that the costs related to these restructuring activities are not indicative of our normal operating costs.
We exclude certain acquisition-related costs, including significant transaction costs and amortization of inventory and fixed-asset step-ups and the related tax effects. We exclude these costs because we do not believe they are indicative of our normal operating costs.
We exclude the expense and tax effects associated with the non-cash amortization of acquisition-related intangible assets because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have lives up to 25 years. Exclusion of the non-cash amortization expense allows comparisons of operating results that are consistent over time for both our newly acquired and long-held businesses and with both acquisitive and non-acquisitive peer companies.
We also exclude certain gains/losses and related tax effects, which are either isolated or cannot be expected to occur again with any predictability, and that we believe are not indicative of our normal operating gains and losses. For example, we exclude gains/losses from items such as the sale of a business, significant litigation-related matters and lump-sum pension plan settlements. We exclude the results of discontinued operations.
We exclude goodwill impairment charges. We exclude these costs because we do not believe they are indicative of our normal operating costs.
Due to the significance of recently sold businesses and to provide a comparison of changes in our orders and revenue, we also discuss these changes on an “organic” basis. Organic is calculated assuming the divestitures completed prior to October 3, 2021 were completed on January 1, 2020 and excluding the impact of changes in foreign currency exchange rates.
CIRCOR’s management uses these non-GAAP measures, in addition to GAAP financial measures, as the basis for measuring the Company’s operating performance and comparing such performance to that of prior periods and to the performance of our peers. We use such measures when publicly providing our business outlook, assessing future earnings potential, evaluating potential acquisitions and dispositions and in our financial and operating decision-making process, including for compensation purposes.
Investors should recognize that these non-GAAP measures might not be comparable to similarly titled measures of other companies. These measures should be considered in addition and not as a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with accounting principles generally accepted in the United States. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is included in this news release.
Safe Harbor Statement
This press release contains certain statements that are “forward-looking statements” as that term is defined under the Private Securities Litigation Reform Act of 1995 (the “Act”). The words “may,” “hope,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” “continue,” and other expressions, which are predictions of or indicate future events and trends and which do not relate to historical matters, identify forward-looking statements, although not all forward-looking statements are accompanied by such words. We believe that it is important to communicate our future expectations to our stockholders, and we, therefore, make forward-looking statements in reliance upon the safe harbor provisions of the Act. However, there may be events in the future that we are not able to accurately predict or control and our actual results may differ materially from the expectations we describe in our forward-looking statements. Forward-looking statements, including statements about outlook for the fourth quarter, the expected and potential direct or indirect impacts of the COVID-19 pandemic on our business, the realization of cost reductions from restructuring activities and expected synergies, the number of new product launches and future cash flows from operating activities, involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: the duration and severity of the COVID-19 pandemic and its impact on the global economy; changes in the price of and demand for oil and gas in both domestic and international markets; any adverse changes in governmental policies; variability of raw material and component pricing; changes in our suppliers’ performance; fluctuations in foreign currency exchange rates; changes in tariffs or other taxes related to doing business internationally; our ability to hire and retain key personnel; our ability to operate our manufacturing facilities at efficient levels including our ability to prevent cost overruns and reduce costs; our ability to generate increased cash by reducing our working capital; our prevention of the accumulation of excess inventory; our ability to successfully implement our divestiture; restructuring or simplification strategies; fluctuations in interest rates; our ability to successfully defend product liability actions; as well as the uncertainty associated with the current worldwide economic conditions and the continuing impact on economic and financial conditions in the United States and around the world, including as a result of COVID-19, natural disasters, terrorist attacks and other similar matters. We advise you to read further about these and other risk factors set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q and Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2020, which is filed with the Securities and Exchange Commission ("SEC") and is available on the SEC's website at www.sec.gov. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
About CIRCOR International, Inc.
CIRCOR International is one of the world’s leading providers of mission critical flow control products and services for the Industrial and Aerospace & Defense markets. The Company has a product portfolio of market-leading brands serving its customers’ most demanding applications. CIRCOR markets its solutions directly and through various sales partners to more than 14,000 customers in approximately 100 countries. The Company has a global presence with approximately 3,100 employees and is headquartered in Burlington, Massachusetts. For more information, visit the Company’s investor relations website at http://investors.circor.com.
CIRCOR INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (in thousands, except per share data) (unaudited) | ||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||
October 3, 2021 | September 27,
| October 3, 2021 | September 27,
| |||||||||||||||
Net revenues | $ | 190,782 | $ | 186,640 | $ | 561,783 | $ | 564,920 | ||||||||||
Cost of revenues | 130,027 | 130,630 | 385,061 | 389,905 | ||||||||||||||
Gross profit | 60,755 | 56,010 | 176,722 | 175,015 | ||||||||||||||
Selling, general and administrative expenses | 53,265 | 50,652 | 167,792 | 164,948 | ||||||||||||||
Goodwill impairment charge | — | — | — | 116,182 | ||||||||||||||
Special and restructuring charges (recoveries), net | 814 | 938 | 6,808 | (35,747) | ||||||||||||||
Operating income (loss) | 6,676 | 4,420 | 2,122 | (70,368) | ||||||||||||||
Other expense (income), net: | ||||||||||||||||||
Interest expense, net | 7,997 | 8,202 | 24,325 | 25,699 | ||||||||||||||
Other expense (income), net | 134 | 765 | (2,543) | 229 | ||||||||||||||
Total other expense, net | 8,131 | 8,967 | 21,782 | 25,928 | ||||||||||||||
Income (loss) from continuing operations before income taxes | (1,455) | (4,547) | (19,660) | (96,296) | ||||||||||||||
(Benefit from) provision for income taxes | (92) | 54,318 | 3,268 | 40,923 | ||||||||||||||
Income (loss) from continuing operations, net of tax | $ | (1,363) | $ | (58,865) | $ | (22,928) | $ | (137,219) | ||||||||||
Income (loss) from discontinued operations, net of tax | $ | 2,510 | $ | 341 | $ | 1,393 | $ | (34,345) | ||||||||||
Net income (loss) | $ | 1,147 | $ | (58,524) | $ | (21,535) | $ | (171,564) | ||||||||||
Basic income (loss) per common share: | ||||||||||||||||||
Basic from continuing operations | $ | (0.07) | $ | (2.94) | $ | (1.14) | $ | (6.87) | ||||||||||
Basic from discontinued operations | $ | 0.12 | $ | 0.02 | $ | 0.07 | $ | (1.72) | ||||||||||
Net income (loss) | $ | 0.06 | $ | (2.93) | $ | (1.07) | $ | (8.59) | ||||||||||
Diluted income (loss) per common share: | ||||||||||||||||||
Diluted from continuing operations | $ | (0.07) | $ | (2.94) | $ | (1.14) | $ | (6.87) | ||||||||||
Diluted from discontinued operations | $ | 0.12 | $ | 0.02 | $ | 0.07 | $ | (1.72) | ||||||||||
Net income (loss) | $ | 0.06 | $ | (2.93) | $ | (1.07) | $ | (8.59) | ||||||||||
Weighted average number of common shares outstanding: | ||||||||||||||||||
Basic | 20,257 | 20,001 | 20,181 | 19,975 | ||||||||||||||
Diluted | 20,257 | 20,001 | 20,181 | 19,975 | ||||||||||||||
CIRCOR INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) | ||||||||||
Nine Months Ended | ||||||||||
October 3, 2021 | September 27,
| |||||||||
OPERATING ACTIVITIES | ||||||||||
Net loss | $ | (21,535) | $ | (171,564) | ||||||
Income (loss) from discontinued operations, net of income taxes | 1,393 | (34,345) | ||||||||
Loss from continuing operations | (22,928) | (137,219) | ||||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||
Depreciation | 17,505 | 14,881 | ||||||||
Amortization | 31,929 | 32,418 | ||||||||
Change in provision for bad debt expense | (353) | 7,219 | ||||||||
Write down of inventory | 1,201 | 2,386 | ||||||||
Compensation expense for share-based plans | 4,165 | 4,076 | ||||||||
Amortization of debt issuance costs | 3,032 | 6,463 | ||||||||
Deferred tax provision | 823 | 35,582 | ||||||||
Goodwill impairment charge | — | 116,182 | ||||||||
Loss (gain) on sale of businesses | 1,308 | (54,253) | ||||||||
Changes in operating assets and liabilities, net of effects of acquisition and disposition: | ||||||||||
Trade accounts receivable | 8,937 | 18,051 | ||||||||
Inventories | (12,095) | (8,477) | ||||||||
Prepaid expenses and other assets | (32,680) | (39,184) | ||||||||
Accounts payable, accrued expenses and other liabilities | 6,310 | (30,468) | ||||||||
Net cash provided by (used in) continuing operating activities | 7,154 | (32,343) | ||||||||
Net cash provided by (used in) discontinued operating activities | (2,484) | (14,022) | ||||||||
Net cash provided (used in) operating activities | 4,670 | (46,365) | ||||||||
INVESTING ACTIVITIES | ||||||||||
Additions to property, plant and equipment | (10,579) | (9,147) | ||||||||
Proceeds from sale of property, plant and equipment | 2 | (122) | ||||||||
Proceeds from the sale of business | 9,993 | 166,210 | ||||||||
Proceeds from beneficial interest of factored receivables | 1,531 | 2,212 | ||||||||
Net cash provided by continuing investment activities | 947 | 159,153 | ||||||||
Net cash used in discontinued investing activities | — | (11,338) | ||||||||
Net cash provided by investing activities | 947 | 147,815 | ||||||||
FINANCING ACTIVITIES | ||||||||||
Proceeds from long-term debt | 145,550 | 165,800 | ||||||||
Payments of long-term debt | (148,450) | (279,191) | ||||||||
Proceeds from the exercise of stock options | 151 | 117 | ||||||||
Withholding tax payments on restricted and performance stock units converted | (4,154) | — | ||||||||
Net cash used in financing activities | (6,903) | (113,274) | ||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (3,163) | 29 | ||||||||
(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | (4,449) | (11,795) | ||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 77,696 | 85,727 | ||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD | $ | 73,247 | $ | 73,932 | ||||||
CIRCOR INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited) | ||||||||
October 3, 2021 | December 31, 2020 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 71,969 | $ | 76,452 | ||||
Trade accounts receivable, less allowance for doubtful accounts of $8,374
| 93,222 | 102,730 | ||||||
Inventories | 132,242 | 129,084 | ||||||
Prepaid expenses and other current assets | 118,783 | 93,226 | ||||||
Assets held for sale | — | 5,073 | ||||||
Total Current Assets | 416,216 | 406,565 | ||||||
PROPERTY, PLANT AND EQUIPMENT, NET | 158,327 | 168,763 | ||||||
OTHER ASSETS: | ||||||||
Goodwill | 155,739 | 158,944 | ||||||
Intangibles, net | 315,452 | 353,595 | ||||||
Deferred income taxes | 761 | 779 | ||||||
Other assets | 43,780 | 41,882 | ||||||
TOTAL ASSETS | $ | 1,090,275 | $ | 1,130,528 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | $ | 72,883 | $ | 61,236 | ||||
Accrued expenses and other current liabilities | 74,357 | 75,624 | ||||||
Accrued compensation and benefits | 32,454 | 28,332 | ||||||
Total Current Liabilities | 179,694 | 165,192 | ||||||
LONG-TERM DEBT | 507,093 | 507,888 | ||||||
DEFERRED INCOME TAXES | 26,767 | 28,980 | ||||||
PENSION LIABILITY, NET | 152,322 | 163,642 | ||||||
OTHER NON-CURRENT LIABILITIES | 39,855 | 58,785 | ||||||
SHAREHOLDERS' EQUITY: | ||||||||
Preferred stock, $0.01 par value; 1,000,000 shares authorized; no
| — | — | ||||||
Common stock, $0.01 par value; 29,000,000 shares authorized; 21,627,259
| 217 | 214 | ||||||
Additional paid-in capital | 453,761 | 452,728 | ||||||
(Accumulated deficit) retained earnings | (107,996) | (86,461) | ||||||
Common treasury stock, at cost (1,372,488 shares at October 3,
| (74,472) | (74,472) | ||||||
Accumulated other comprehensive loss, net of tax | (86,966) | (85,968) | ||||||
Total Shareholders' Equity | 184,544 | 206,041 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,090,275 | $ | 1,130,528 | ||||
CIRCOR INTERNATIONAL, INC. SUMMARY OF ORDERS AND BACKLOG (in millions) (unaudited) | ||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||
October 3,
| September 27,
| October 3,
| September 27,
| |||||||||||||||
ORDERS (1) | ||||||||||||||||||
Aerospace & Defense | $ | 54.0 | $ | 59.1 | $ | 181.3 | $ | 207.8 | ||||||||||
Industrial | 139.7 | 107.5 | 449.3 | 359.9 | ||||||||||||||
Total Orders | $ | 193.7 | $ | 166.6 | $ | 630.6 | $ | 567.7 | ||||||||||
October 3,
| September 27,
| |||||||||||||||||
BACKLOG (2) | ||||||||||||||||||
Aerospace & Defense | $ | 179.7 | $ | 211.4 | ||||||||||||||
Industrial | 254.9 | 204.0 | ||||||||||||||||
Total Backlog | $ | 434.6 | $ | 415.4 | ||||||||||||||
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 nine months ended September 27, 2020 include orders from businesses divested prior to September 27, 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 | TOTAL | |||||||||||||||||||
ORDERS | ||||||||||||||||||||||||||||
Aerospace & Defense | $ | 72,031 | $ | 76,616 | $ | 59,105 | $ | 46,796 | $ | 254,548 | $ | 72,999 | $ | 54,243 | $ | 54,028 | $ | 181,270 | ||||||||||
Industrial | 136,443 | 116,023 | 107,453 | 121,690 | 481,609 | 153,695 | 155,959 | 139,691 | 449,345 | |||||||||||||||||||
Total | $ | 208,474 | $ | 192,639 | $ | 166,558 | $ | 168,486 | $ | 736,157 | $ | 226,693 | $ | 210,203 | $ | 193,719 | $ | 630,615 | ||||||||||
NET REVENUES | ||||||||||||||||||||||||||||
Aerospace & Defense | $ | 65,493 | $ | 62,241 | $ | 62,249 | $ | 77,839 | $ | 267,822 | $ | 60,001 | $ | 60,761 | $ | 61,484 | $ | 182,246 | ||||||||||
Industrial | 126,720 | 123,825 | 124,391 | 130,513 | 505,449 | 120,654 | 129,585 | 129,298 | 379,537 | |||||||||||||||||||
Total | $ | 192,213 | $ | 186,066 | $ | 186,640 | $ | 208,352 | $ | 773,271 | $ | 180,655 | $ | 190,346 | $ | 190,782 | $ | 561,783 | ||||||||||
SEGMENT OPERATING INCOME | ||||||||||||||||||||||||||||
Aerospace & Defense | $ | 12,494 | $ | 13,142 | $ | 14,782 | $ | 18,675 | $ | 59,093 | $ | 10,706 | $ | 12,095 | $ | 14,868 | $ | 37,668 | ||||||||||
Industrial | 5,169 | 12,406 | 9,807 | 12,441 | 39,823 | 9,735 | 10,400 | 11,268 | 31,403 | |||||||||||||||||||
Corporate expenses | (6,588) | (9,664) | (7,244) | (7,789) | (31,285) | (8,002) | (7,850) | (6,878) | (22,726) | |||||||||||||||||||
Total | $ | 11,075 | $ | 15,884 | $ | 17,345 | $ | 23,327 | $ | 67,631 | $ | 12,439 | $ | 14,645 | $ | 19,258 | $ | 46,345 | ||||||||||
SEGMENT OPERATING MARGIN % | ||||||||||||||||||||||||||||
Aerospace & Defense | 19.1 | % | 21.1 | % | 23.7 | % | 24.0 | % | 22.1 | % | 17.8 | % | 19.9 | % | 24.2 | % | 20.7 | % | ||||||||||
Industrial | 4.1 | % | 10.0 | % | 7.9 | % | 9.5 | % | 7.9 | % | 8.1 | % | 8.0 | % | 8.7 | % | 8.3 | % | ||||||||||
Total | 5.8 | % | 8.5 | % | 9.3 | % | 11.2 | % | 8.7 | % | 6.9 | % | 7.7 | % | 10.1 | % | 8.2 | % | ||||||||||
2020 | 2021 | |||||||||||||||||||||||||||
Results of divested businesses (1) | 1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | 2ND QTR | 3RD QTR | TOTAL | |||||||||||||||||||
ORDERS - Industrial | $ | 4,449 | $ | — | $ | — | $ | — | $ | 4,449 | $ | — | $ | — | $ | — | $ | — | ||||||||||
NET REVENUES - Industrial | $ | 4,900 | $ | — | $ | — | $ | — | $ | 4,900 | $ | — | $ | — | $ | — | $ | — | ||||||||||
SEGMENT OP. INC. -Industrial | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
(1) Divested businesses are related to the Industrial Segment and include Instrumentation & Sampling. Distributed Valves are discontinued operations and not reflected in the As Reported figures in accordance with US GAAP.
| CIRCOR INTERNATIONAL, INC. SUPPLEMENTAL INFORMATION REGARDING DIVESTED BUSINESS (in thousands, except percentages) (unaudited) | |||||||||||
2020 | 2021 | ||||||||||
Results excluding divested businesses | 1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | 2ND QTR | 3RD QTR | TOTAL | ||
ORDERS | |||||||||||
Aerospace & Defense | $72,031 | $76,616 | $59,105 | $46,796 | $254,548 | $72,999 | $54,243 | $54,028 | $181,270 | ||
Industrial | 131,994 | 116,023 | 107,453 | 121,690 | 477,160 | 153,695 | 155,959 | 139,691 | 449,345 | ||
Total | $204,025 | $192,639 | $166,558 | $168,486 | $731,708 | $226,693 | $210,203 | $193,719 | $630,615 | ||
NET REVENUES | |||||||||||
Aerospace & Defense | $65,493 | $62,241 | $62,249 | $77,839 | $267,822 | $60,001 | $60,761 | $61,484 | $182,246 | ||
Industrial | 121,820 | 123,825 | 124,391 | 130,513 | 500,549 | 120,654 | 129,585 | 129,298 | 379,537 | ||
Total | $187,313 | $186,066 | $186,640 | $208,352 | $768,371 | $180,655 | $190,346 | $190,782 | $561,783 | ||
SEGMENT OPERATING INCOME | |||||||||||
Aerospace & Defense | $12,494 | $13,142 | $14,782 | $18,675 | $59,093 | $10,706 | $12,095 | $14,868 | $37,668 | ||
Industrial | 5,169 | 12,406 | 9,807 | 12,441 | 39,823 | 9,735 | 10,400 | 11,268 | 31,403 | ||
Corporate expenses | (6,588) | (9,664) | (7,244) | (7,789) | (31,285) | (8,002) | (7,850) | (6,878) | (22,726) | ||
Total | $11,075 | $15,884 | $17,345 | $23,327 | $67,631 | $12,439 | $14,645 | $19,258 | $46,345 | ||
SEGMENT OPERATING MARGIN % | |||||||||||
Aerospace & Defense | 19.1% | 21.1% | 23.7% | 24.0% | 22.1% | 17.8% | 19.9% | 24.2% | 20.7% | ||
Industrial | 4.2% | 10.0% | 7.9% | 9.5% | 8.0% | 8.1% | 8.0% | 8.7% | 8.3% | ||
Total | 5.9% | 8.5% | 9.3% | 11.2% | 8.8% | 6.9% | 7.7% | 10.1% | 8.2% | ||
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 | TOTAL | ||||||||
Net Cash (Used In) Provided By Operating Activities | $(23,947) | $(24,883) | $2,465 | $23,641 | $(22,724) | $(17,703) | $ | 10,984 | $ | 11,389 | $ | 4,670 | ||||
LESS | ||||||||||||||||
Capital expenditures, net of sale proceeds (a) | 3,412 | 3,527 | 2,330 | 3,275 | 12,544 | 3,392 | 2,644 | 4,541 | 10,577 | |||||||
FREE CASH FLOW | $(27,359) | $(28,410) | $135 | $20,366 | $(35,268) | $(21,095) | $ | 8,340 | $ | 6,848 | $ | (5,907) | ||||
Gross Debt | $602,288 | $592,038 | $540,463 | $519,938 | $519,938 | $536,938 | $ | 523,038 | $ | 517,038 | $ | 517,038 | ||||
Less: Cash & Cash equivalents | 170,861 | 125,421 | 72,772 | 76,452 | 76,452 | 75,680 | 72,181 | 71,969 | 71,969 | |||||||
GROSS DEBT, NET OF CASH | $431,427 | $466,617 | $467,691 | $443,486 | $443,486 | $461,258 | $ | 450,857 | $ | 445,069 | $ | 445,069 | ||||
TOTAL SHAREHOLDERS' EQUITY | $290,845 | $273,351 | $220,814 | $206,041 | $206,041 | $196,106 | $ | 183,039 | $ | 184,544 | $ | 184,544 | ||||
GROSS DEBT AS % OF EQUITY | 207% | 217% | 245% | 252% | 252% | 274% | 286 | % | 280 | % | 280 | % | ||||
GROSS DEBT, NET OF CASH AS % OF EQUITY | 148% | 171% | 212% | 215% | 215% | 235% | 246 | % | 241 | % | 241 | % | ||||
(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 | TOTAL | ||||||||||||||||||||
NET (LOSS) INCOME | $ | (78,948) | $ | (34,092) | $ | (58,524) | $ | (13,934) | $ | (185,498) | $ | (7,119) | $ | (15,563) | $ | 1,147 | $ | (21,535) | ||||||||||
LESS: | ||||||||||||||||||||||||||||
Restructuring related inventory charges | (602) | — | 351 | — | (251) | — | 958 | (60) | 899 | |||||||||||||||||||
Restructuring charges, net | 2,883 | 588 | 502 | 972 | 4,945 | 2,060 | 2,281 | (312) | 4,029 | |||||||||||||||||||
Acquisition amortization | 10,218 | 10,681 | 10,625 | 10,939 | 42,463 | 10,487 | 10,498 | 10,416 | 31,401 | |||||||||||||||||||
Acquisition depreciation | 974 | 980 | 1,011 | 1,021 | 3,986 | 2,375 | 1,326 | 1,412 | 5,113 | |||||||||||||||||||
Special (recoveries) charges, net | (45,175) | 5,019 | 436 | 473 | (39,247) | (2,869) | 4,522 | 1,126 | 2,779 | |||||||||||||||||||
Goodwill Impairment charge | 116,182 | — | — | — | 116,182 | — | — | — | — | |||||||||||||||||||
Income tax impact | 7,704 | (22,549) | 53,240 | 13,125 | 51,521 | (335) | 2,266 | (860) | 1,071 | |||||||||||||||||||
Net loss (income) from discontinued operations | (9,162) | 43,847 | (341) | 795 | 35,140 | 239 | 878 | (2,510) | (1,393) | |||||||||||||||||||
ADJUSTED NET INCOME | $ | 4,074 | $ | 4,475 | $ | 7,300 | $ | 13,390 | $ | 29,240 | $ | 4,838 | $ | 7,165 | $ | 10,359 | $ | 22,363 | ||||||||||
(LOSS) EARNINGS PER COMMON SHARE (Diluted) | $ | (3.96) | $ | (1.68) | $ | (2.93) | $ | (0.70) | $ | (9.28) | $ | (0.35) | $ | (0.77) | $ | 0.06 | $ | (1.05) | ||||||||||
LESS: | ||||||||||||||||||||||||||||
Restructuring related inventory charges | (0.03) | — | 0.02 | — | (0.01) | — | 0.05 | — | 0.04 | |||||||||||||||||||
Restructuring charges, net | 0.14 | 0.03 | 0.02 | 0.05 | 0.25 | 0.10 | 0.11 | (0.02) | 0.20 | |||||||||||||||||||
Acquisition amortization | 0.51 | 0.53 | 0.53 | 0.55 | 2.13 | 0.52 | 0.52 | 0.51 | 1.53 | |||||||||||||||||||
Acquisition depreciation | 0.05 | 0.05 | 0.05 | 0.05 | 0.20 | 0.12 | 0.07 | 0.07 | 0.25 | |||||||||||||||||||
Special (recoveries) charges, net | (2.27) | 0.25 | 0.02 | 0.02 | (1.96) | (0.14) | 0.22 | 0.05 | 0.14 | |||||||||||||||||||
Impairment charge | 5.83 | — | — | — | 5.81 | — | — | — | — | |||||||||||||||||||
Income tax impact | 0.39 | (1.11) | 2.66 | 0.66 | 2.58 | (0.02) | 0.11 | (0.04) | 0.05 | |||||||||||||||||||
(Loss) earnings) per share from discontinued operations | (0.46) | 2.16 | (0.02) | 0.04 | 1.76 | 0.01 | 0.04 | (0.12) | (0.07) | |||||||||||||||||||
ADJUSTED EARNINGS PER SHARE (Diluted) | $ | 0.20 | $ | 0.22 | $ | 0.36 | $ | 0.66 | $ | 1.43 | $ | 0.24 | $ | 0.35 | $ | 0.50 | $ | 1.09 | ||||||||||
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 | TOTAL | ||||||||||||||||||||
NET (LOSS) INCOME | $ | (78,948) | $ | (34,092) | $ | (58,524) | $ | (13,934) | $ | (185,498) | $ | (7,119) | $ | (15,563) | $ | 1,147 | $ | (21,535) | ||||||||||
LESS: | ||||||||||||||||||||||||||||
Interest expense, net | 9,011 | 8,486 | 8,202 | 8,520 | 34,219 | 8,369 | 7,957 | 7,997 | 24,323 | |||||||||||||||||||
Depreciation | 5,121 | 4,958 | 4,802 | 5,504 | 20,385 | 6,509 | 5,461 | 5,535 | 17,505 | |||||||||||||||||||
Amortization | 10,516 | 10,976 | 10,925 | 11,245 | 43,662 | 10,696 | 10,657 | 10,576 | 31,929 | |||||||||||||||||||
Provision for income taxes | 8,374 | (21,769) | 54,318 | 15,299 | 56,222 | 400 | 2,961 | (92) | 3,268 | |||||||||||||||||||
Loss (income) from discontinued operations | (9,162) | 43,847 | (341) | 795 | 35,140 | 239 | 878 | (2,510) | (1,393) | |||||||||||||||||||
EBITDA | $ | (55,088) | $ | 12,406 | $ | 19,383 | $ | 27,429 | $ | 4,130 | $ | 19,094 | $ | 12,351 | $ | 22,653 | $ | 54,097 | ||||||||||
LESS: | ||||||||||||||||||||||||||||
Restructuring related inventory charges (recoveries) | (602) | — | 351 | — | (251) | — | 958 | (60) | 899 | |||||||||||||||||||
Restructuring charges, net | 2,883 | 588 | 502 | 972 | 4,945 | 2,060 | 2,281 | (312) | 4,029 | |||||||||||||||||||
Special (recoveries) charges, net | (45,175) | 5,019 | 436 | 473 | (39,247) | (2,869) | 4,522 | 1,126 | 2,779 | |||||||||||||||||||
Goodwill impairment charge | 116,182 | — | — | — | 116,182 | — | — | — | — | |||||||||||||||||||
ADJUSTED EBITDA | $ | 18,200 | $ | 18,013 | $ | 20,671 | $ | 28,873 | $ | 85,758 | $ | 18,285 | $ | 20,112 | $ | 23,407 | $ | 61,804 | ||||||||||
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 | TOTAL | ||||||||||||||||||||
GAAP OPERATING INCOME (LOSS) | $ | (73,405) | $ | (1,384) | $ | 4,420 | $ | 9,923 | $ | (60,446) | $ | 386 | $ | (4,940) | $ | 6,676 | $ | 2,122 | ||||||||||
LESS: | ||||||||||||||||||||||||||||
Restructuring related inventory charges (recoveries) | (602) | — | 351 | — | (251) | — | 958 | (60) | 899 | |||||||||||||||||||
Amortization of inventory step-up | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
Restructuring charges, net | 2,883 | 588 | 502 | 972 | 4,945 | 2,060 | 2,281 | (312) | 4,029 | |||||||||||||||||||
Acquisition amortization | 10,218 | 10,681 | 10,625 | 10,939 | 42,463 | 10,487 | 10,498 | 10,416 | 31,402 | |||||||||||||||||||
Acquisition depreciation | 974 | 980 | 1,011 | 1,021 | 3,986 | 2,375 | 1,326 | 1,412 | 5,114 | |||||||||||||||||||
Special (recoveries) charges, net | (45,175) | 5,019 | 436 | 473 | (39,247) | (2,869) | 4,522 | 1,126 | 2,779 | |||||||||||||||||||
Goodwill impairment charge | 116,182 | — | — | — | 116,182 | — | — | — | — | |||||||||||||||||||
ADJUSTED OPERATING INCOME | $ | 11,075 | $ | 15,884 | $ | 17,345 | $ | 23,327 | $ | 67,631 | $ | 12,439 | $ | 14,645 | $ | 19,258 | $ | 46,345 | ||||||||||
GAAP OPERATING MARGIN | (38.2) | % | (0.7) | % | 2.4 | % | 4.8 | % | (7.8) | % | 0.2 | % | (2.7) | % | 3.5 | % | 0.4 | % | ||||||||||
LESS: | ||||||||||||||||||||||||||||
Restructuring related inventory charges (recoveries) | (0.3) | % | — | % | 0.2 | % | — | % | — | % | — | % | 0.5 | % | — | % | 0.2 | % | ||||||||||
Amortization of inventory step-up | — | % | — | % | — | % | — | % | — | % | — | % | — | % | — | % | — | % | ||||||||||
Restructuring charges, net | 1.5 | % | 0.3 | % | 0.3 | % | 0.5 | % | 0.6 | % | 1.1 | % | 1.3 | % | (0.2) | % | 0.7 | % | ||||||||||
Acquisition amortization | 5.3 | % | 5.7 | % | 5.7 | % | 5.3 | % | 5.5 | % | 5.8 | % | 5.8 | % | 5.5 | % | 5.6 | % | ||||||||||
Acquisition depreciation | 0.5 | % | 0.5 | % | 0.5 | % | 0.5 | % | 0.5 | % | 1.3 | % | 0.7 | % | 0.7 | % | 0.9 | % | ||||||||||
Special (recoveries) charges, net | (23.5) | % | 2.7 | % | 0.2 | % | 0.2 | % | (5.1) | % | (1.6) | % | 2.5 | % | 0.6 | % | 0.5 | % | ||||||||||
Goodwill impairment charge | 60.4 | % | — | % | — | % | — | % | 15.0 | % | — | % | — | % | — | % | — | % | ||||||||||
ADJUSTED OPERATING MARGIN | 5.8 | % | 8.5 | % | 9.3 | % | 11.2 | % | 8.7 | % | 6.9 | % | 8.1 | % | 10.1 | % | 8.2 | % | ||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20211112005363/en/
Contacts:
Vice President - FP&A and Investor Relations
CIRCOR International
(781) 270-1200
