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Share Name | Share Symbol | Market | Type |
---|---|---|---|
CIRCOR International Inc | NYSE:CIR | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 56.00 | 0 | 01:00:00 |
CIRCOR International, Inc. (NYSE: CIR), a leading provider of severe service flow control solutions and other highly engineered products for the Industrial and Aerospace & Defense markets, today announced preliminary financial results for the fourth quarter and full year ended December 31, 2019.
As disclosed in a Form 12b-25 that the Company filed with the SEC today, CIRCOR requires additional time to file its Form 10-K for the year ended December 31, 2019.
Highlights
“We ended the year with another solid quarter, delivering a record 13.3% adjusted operating margin from continuing operations, up 190 basis points from a year ago,” said Scott Buckhout, President and Chief Executive Officer. “In January we sold our Instrumentation and Sampling business for $172 million with net proceeds going to further reduce debt.”
“We delivered on our 2019 goal to achieve substantial earnings growth while deleveraging the Company,” Mr. Buckhout continued. “Since January 2019, we have generated over $340 million in proceeds from non-core asset sales, enabling CIRCOR to accelerate the reduction of debt."
“Looking ahead, we are on track to deliver our 2020 commitments. We continue to focus on driving long-term growth, expanding margins, generating strong free cash flow, and deleveraging as we drive value for our shareholders,” concluded Mr. Buckhout.
First-Quarter 2020 Guidance
For the first quarter of 2020, CIRCOR expects revenue in the range of $190 million to $205 million, and GAAP loss per share in the range of $(0.25) to $(0.05), which reflects acquisition-related amortization expense of $(0.48) and other special and restructuring (charges) gains of $(0.27) to $(0.17). Excluding the impact of amortization, special and restructuring (charges) gains, adjusted EPS is expected to be in the range of $0.50 to $0.60 per share. This guidance excludes revenue and earnings from the Instrumentation & Sampling business which was sold on January 31, 2020. Presentation slides that provide supporting information to this guidance and fourth-quarter and year-end results are posted on the “Investors” section of the Company’s website, http://investors.circor.com, and will be discussed during the conference call at 9:00 a.m. ET today, March 2, 2020.
Selected Preliminary Consolidated Results
($ millions except EPS)
Q4 2019
Q4 2018
Change
FY 2019
FY 2018
Change
Revenue
$
242.6
$
266.7
-9%
$
964.3
$
1,013.5
-5%
Revenue excluding divested business
$
242.6
$
240.1
1%
$
947.8
$
915.8
3%
GAAP Operating Income
$
17.0
$
10.3
65%
$
37.7
$
21.7
74%
Adjusted Operating Income1
$
32.2
$
30.9
4%
$
109.8
$
101.9
8%
GAAP Operating Margin
7.0%
3.9%
310 bps
3.9%
2.1%
180 bps
Adjusted Operating Margin1
13.3%
11.6%
170 bps
11.4%
10.1%
130 bps
Adjusted Operating Margin Ex Divestitures
13.3%
11.4%
190 bps
11.2%
9.8%
140 bps
GAAP Earnings (Loss) Per Share
$
0.08
$
(1.07)
107%
$
(6.73)
$
(1.99)
238%
Adjusted Earnings Per Share (Diluted)1
$
0.82
$
0.76
8%
$
2.62
$
2.30
14%
Operating Cash Flow
$
16.8
$
30.5
-45%
$
15.9
$
54.0
-71%
Free Cash Flow2
$
18.4
$
24.0
-23%
$
11.7
$
30.6
-62%
Orders
$
236.5
$
270.9
-13%
$
977.5
$
1099.2
-11%
Orders excluding divested businesses
$
236.5
$
244.1
-3%
$
958.5
$
991.4
-3%
Segment Results
($ millions)
Q4 2019
Q4 2018
Change
FY 2019
FY 2018
Change
Industrial
Revenue
$
107.1
$
120.6
-11%
$
450.7
$
487.6
-8%
Revenue excluding divested businesses
$
107.1
$
110.9
-3%
$
437.3
$
455.6
-4%
Segment Operating Income
$
11.8
$
14.7
-20%
$
52.7
$
57.3
-8%
Segment Operating Margin
11.0%
12.2%
-120 bps
$
11.7%
11.8%
-10 bps
Orders
$
97.3
$
121.9
-20%
$
447.4
$
510.1
-12%
Orders excluding divested business1
$
97.3
$
110.5
-12%
$
432.6
$
472.1
-8%
Energy
Revenue
$
56.5
$
82.8
-32%
$
241.0
$
288.9
-17%
Revenue excluding divested business1
$
56.5
$
65.9
-14%
$
237.9
$
223.3
7%
Segment Operating Income
$
7.3
$
12.7
-43%
$
30.9
$
38.8
-20%
Segment Operating Margin
12.9%
15.4%
-250 bps
12.8%
13.4%
-60 bps
Orders
$
70.8
$
72.3
-2%
$
216.1
$
311.6
-31%
Orders excluding divested business1
$
70.8
$
56.9
24%
$
212.0
$
241.8
-12%
Aerospace & Defense
Revenue
$
79.1
$
63.3
25%
$
272.6
$
237.0
15%
Segment Operating Income
$
18.1
$
11.4
59%
$
51.5
$
36.0
43%
Segment Operating Margin
22.9%
18.0%
490 bps
18.9%
15.2%
370 bps
Orders
$
68.5
$
76.7
-11%
$
313.9
$
277.5
13%
1
Adjusted Consolidated and Segment results for Q4 2019 exclude non-cash acquisition-related intangible amortization, special and restructuring charges totaling $15.2 million ($13.4 million, net of tax). These charges include: (i) $12.2 million for non-cash acquisition-related intangible amortization expense and amortization of the step-up in fixed asset values; (ii) $2.3 million related to restructuring and cost saving initiatives; (iii) $1.3 million of professional fees associated with an unsolicited tender offer to acquire all outstanding shares of the Company’s common stock; (iv) $1.2 million related to divestitures, partially offset by (v) a $1.8 million gain on the sale of a building. Adjusted Consolidated and Segment Results for Q4 2018 exclude non-cash acquisition-related intangible amortization, special and restructuring charges totaling $20.6 million ($31.6 million, net of tax). These charges include: (i) $13.6 million for non-cash acquisition-related intangible amortization expense and amortization of the step-up in fixed asset values; (ii) $4.4 million related to the sale of businesses; (iii) $2.6 million related to other special and restructuring activities and (iv) $10.9 million related to the write-off of a deferred tax asset due to changes in US tax law.
2
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.
Conference Call Information
CIRCOR International will hold a conference call to review its financial results at 9:00 a.m. ET today, March 2, 2020. 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. The webcast will be archived on the Company’s website for one year.
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 and revenue further excluding divested businesses) 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:
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 competitors. 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 forward-looking statements within the meaning of Section 27 A of the Securities Act of 1933, as amended, and Section 21 E of the Securities Exchange Act of 1934, as amended. 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. Any statements in this press release that are not statements of historical fact are forward-looking statements, including, but not limited to, those relating to CIRCOR's first-quarter 2020 guidance, our future performance, including future growth and profitability, increase in shareholder value, realization of cost reductions from restructuring activities and expected synergies, plans to reduce our outstanding debt and our corporate priorities. Actual events, performance or results could differ materially from the anticipated events, performance or results expressed or implied by such forward-looking statements. Important factors that could cause actual results to vary from expectations include, but are not limited to: adjustments identified by the Company or its auditors in the course of completing the year-end audit, our ability to successfully integrate acquired businesses, as contemplated, our ability to successfully implement our divestiture, restructuring or simplification strategies, the possibility that expected benefits related to the Fluid Handling acquisition may not materialize as expected, 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 restructuring or simplification strategies, fluctuations in interest rates, our ability to successfully defend product liability actions, any actions of stockholders or others in response to the expiration of the recent unsolicited tender offer and the cost and disruption of responding to those 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 health pandemics, natural disasters, terrorist attacks, current Middle Eastern conflicts and related matters. BEFORE MAKING ANY INVESTMENT DECISIONS REGARDING OUR COMPANY, WE STRONGLY ADVISE YOU TO READ THE SECTION ENTITLED "RISK FACTORS" IN OUR MOST RECENT ANNUAL REPORT ON FORM 10-K AND SUBSEQUENT REPORTS ON FORMS 10-Q, WHICH CAN BE ACCESSED UNDER THE "INVESTORS" LINK OF OUR WEBSITE AT WWW.CIRCOR.COM. 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, Inc. designs, manufactures and markets differentiated technology products and sub-systems for markets including oil & gas, industrial, aerospace & defense and commercial marine. CIRCOR has a diversified flow and motion control product portfolio with recognized, market-leading brands that fulfill its customers’ mission critical needs. For more information, visit the Company’s investor relations website at http://investors.circor.com.
CIRCOR INTERNATIONAL, INC. Preliminary Condensed Consolidated Statement of Operations (in millions, except per share data) (UNAUDITED)
Three Months Ended
Twelve Months Ended
December 31, 2019
December 31, 2018
December 31, 2019
December 31, 2018
Net revenues
$
242,638
$
266,716
$
964,313
$
1,013,470
Cost of revenues
164,634
176,704
655,504
688,267
Gross Profit
78,004
90,012
308,809
325,203
Selling, general and administrative expenses
58,029
72,732
248,256
284,641
Special and restructuring charges, net
2,979
6,985
22,872
18,909
Operating income
16,996
10,295
37,681
21,653
Other expense (income):
Interest expense, net
10,763
13,264
48,609
52,975
Other (income) expense, net
1,919
(347
)
(836
)
(7,426
)
Total other expense, net
12,682
12,917
47,773
45,549
Income (loss) from continuing operations before income taxes
4,314
(2,622
)
(10,092
)
(23,896
)
Provision for income taxes
1,163
13,885
14,676
9,451
Income (loss) from continuing operations, net of tax
3,151
(16,507
)
(24,768
)
(33,347
)
Loss from discontinued operations, net of tax
(1,595
)
(4,497
)
(109,167
)
(6,037
)
Net income (loss)
$
1,556
$
(21,004
)
$
(133,935
)
$
(39,384
)
Basic income (loss) per common share:
Basic income (loss) from continuing operations
$
0.16
$
(0.84
)
$
(1.24
)
$
(1.68
)
Basic (loss) from discontinued operations
$
(0.08
)
$
(0.23
)
$
(5.48
)
$
(0.30
)
Net income (loss)
$
0.08
$
(1.07
)
$
(6.73
)
$
(1.99
)
Diluted (loss) income per common share:
Diluted income (loss) from continuing operations
$
0.16
$
(0.84
)
$
(1.24
)
$
(1.68
)
Diluted (loss) from discontinued operations
$
(0.08
)
$
(0.23
)
$
(5.48
)
$
(0.30
)
Net income (loss)
$
0.08
$
(1.07
)
$
(6.73
)
$
(1.99
)
Weighted average common shares outstanding:
Basic
19,920
19,722
19,903
19,834
Diluted
20,148
19,972
19,903
19,834
CIRCOR INTERNATIONAL, INC. Preliminary Condensed Consolidated Statement of Cash Flows (in thousands) (UNAUDITED)
Twelve Months Ended
OPERATING ACTIVITIES
December 31, 2019
December 31, 2018
Net loss
$
(133,935
)
$
(39,384
)
Loss from discontinued operations
(109,167
)
(6,037
)
Loss from continuing operations
(24,768
)
(33,347
)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation
22,045
26,183
Amortization
47,591
49,129
Provision for bad debt expense
616
(261
)
Loss on write down of inventory and amortization of fair value step-up
366
7,675
Compensation expense of share-based plans
5,418
4,965
Amortization of debt issuance costs
4,622
3,937
Deferred income tax benefit
(3,440
)
(2,367
)
(Gain) loss on disposal of property, plant and equipment
(1,793
)
1,380
Loss on sale of businesses
3,615
1,882
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:
Trade accounts receivable
25,822
(12,229
)
Inventories
(9,557
)
6,620
Prepaid expenses and other assets
(9,827
)
(26,770
)
Accounts payable, accrued expenses and other liabilities
(28,780
)
30,458
Net cash provided by continuing operations
31,931
57,255
Net cash used in discontinued operations
(16,018
)
(3,261
)
Net cash provided by operating activities
15,913
53,994
INVESTING ACTIVITIES
Purchases of property, plant and equipment
(13,855
)
(20,114
)
Proceeds from the sale of property, plant and equipment
5,735
156
Proceeds from divestitures
861
—
Proceeds from the sale of business, net
162,591
2,753
Business acquisitions, net of cash acquired
—
3,727
Net cash provided by (used in) continuing investing activities
155,332
(13,478
)
Net cash used in discontinued investing activities
(2,296
)
(3,399
)
Net cash provided by (used in) investing activities
153,036
(16,877
)
FINANCING ACTIVITIES
Proceeds from long-term debt
281,600
248,300
Payments of short-term and long-term debt
(434,797
)
(260,146
)
Debt issuance costs
—
—
Dividends paid
—
—
Proceeds from the exercise of stock options
253
690
Return of cash to seller
—
(62,917
)
Net cash used in continuing financing activities
(152,944
)
(74,073
)
Net cash used in financing activities
(152,944
)
(74,073
)
Effect of exchange rate changes on cash and cash equivalents
197
(5,812
)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
16,202
(42,768
)
Cash and cash equivalents at beginning of year
69,525
112,293
CASH AND CASH EQUIVALENTS AT END OF YEAR
$
85,727
$
69,525
CIRCOR INTERNATIONAL, INC. Preliminary Condensed Consolidated Balance Sheets (in thousands, except per share data) (UNAUDITED)
December 31, 2019
December 31, 2018
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
84,531
$
68,517
Short-term investments
—
—
Trade accounts receivable, less allowance for doubtful accounts
125,422
167,181
Inventories
137,309
143,682
Income taxes refundable
—
—
Prepaid expenses and other current assets
72,164
71,428
Assets held for sale
161,193
197,238
Total Current Assets
580,619
648,046
PROPERTY, PLANT AND EQUIPMENT, NET
172,179
189,672
OTHER ASSETS:
Goodwill
271,893
450,605
Intangibles, net
385,542
440,281
Deferred income taxes
30,852
19,906
Assets held for sale
—
30,374
Other assets
35,360
12,728
TOTAL ASSETS
$
1,476,445
$
1,791,612
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable
$
79,399
$
94,715
Accrued expenses and other current liabilities
99,669
92,496
Accrued compensation and benefits
19,518
30,703
Liabilities held for sale
43,289
58,298
Notes payable and current portion of long-term debt
—
7,850
Total Current Liabilities
241,875
284,062
LONG-TERM DEBT
636,297
778,187
DEFERRED INCOME TAXES
21,425
33,607
PENSION LIABILITY, NET
146,801
150,623
LIABILITIES HELD FOR SALE
—
861
OTHER NON-CURRENT LIABILITIES
38,636
15,279
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; 19,912,362 and 19,845,205 shares issued at December 31, 2019 and 2018, respectively
213
212
Additional paid-in capital
446,657
440,890
Retained earnings
99,280
232,102
Common treasury stock, at cost (1,372,488 shares at December 31, 2019 and 2018)
(74,472
)
(74,472
)
Accumulated other comprehensive loss, net of tax
(80,267
)
(69,739
)
Total Shareholders’ Equity
391,411
528,993
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
1,476,445
$
1,791,612
CIRCOR INTERNATIONAL, INC. Segment Information (in millions) UNAUDITED
Three Months Ended
Twelve Months Ended
December 31, 2019
December 31, 2018
December 31, 2019
December 31, 2018
ORDERS (1) (3)
Energy
$
70.8
$
72.3
$
216.1
$
311.6
Aerospace & Defense
68.5
76.7
313.9
277.5
Industrial
97.3
121.9
447.4
510.1
Total orders
$
236.5
$
270.9
$
977.5
$
1,099.2
BACKLOG (2) (3)
December 31, 2019
December 31, 2018
Energy
$
74.1
$
110.5
Aerospace & Defense
194.5
156.3
Industrial
152.1
163.8
Total Backlog
$
420.7
$
430.6
Numbers may not add due to rounding.
(1) Orders do not include the foreign exchange impact due to the re-measurement of customer backlog amounts denominated in foreign currencies. Orders for the three months and year ended December 31, 2019 include orders from businesses divested prior to December 31, 2019 of $0.0 million and $19.0 million, respectively. Orders for the three months and year ended December 31, 2018 include orders from businesses divested of $26.8 million and $107.8 million, respectively. Divested businesses are Reliability Services (Energy), Spence / Nicholson (Industrial) and Delden (Industrial).
Note 2: Backlog include unshipped customer orders for which revenue has not been recognized. Backlog at Q4 2018 includes $20.3 million and $1.7 million for Energy and Industrial related to divested businesses.
CIRCOR INTERNATIONAL, INC.
Segment Information
(in thousands, except percentages)
UNAUDITED
2018
2019
As Reported
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
ORDERS
Energy
$
85,335
$
66,825
$
87,146
$
72,319
$
311,626
$
48,088
$
43,982
$
53,276
$
70,768
$
216,114
Aerospace & Defense
59,793
59,441
81,533
76,702
277,469
88,107
93,405
63,968
68.459
313,939
Industrial
136,607
136,746
114,876
121,886
510,115
123,746
120,660
105,710
97,323
447,438
Total
$
281,735
$
263,012
$
283,555
$
270,907
$
1,099,210
$
259,941
$
258,047
$
222,954
$
236,550
$
977,491
NET REVENUES
Energy
$
64,279
$
71,094
$
70,718
$
82,786
$
288,877
$
66,876
$
61,752
$
55,835
$
56,519
$
240,982
Aerospace & Defense
58,477
57,500
57,757
63,283
237,017
61,240
64,694
67,621
79,070
272,625
Industrial
117,131
131,064
118,734
120,647
487,576
110,738
119,322
113,596
107,050
450,706
Total
$
239,888
$
259,658
$
247,209
$
266,716
$
1,013,470
$
238,854
$
245,768
$
237,052
$
242,639
$
964,313
SEGMENT OPERATING INCOME
Energy
$5,627
$
10,691
$
9,726
$
12,735
$
38,779
$ 9,978
$ 8,343
$ 5,286
$ 7,287
$ 30,894
Aerospace & Defense
8,931
6,992
8,709
11,415
36,047
9,374
10,443
13,564
18,099
51,480
Industrial
12,946
15,037
14,609
14,748
57,340
10,787
16,138
13,953
11,810
52,688
Corporate Expenses
(7,800
)
(6,451
)
(8,034
)
(8,004
)
(30,289
)
(6,705
)
(6,335
)
(7,209
)
(5,013
)
(25,262
)
Total
$
19,704
$
26,269
$
25,010
$
30,894
$
101,877
$
23,434
$
28,589
$
25,594
$
32,183
$
109,800
SEGMENT OPERATING MARGIN %
Energy
8.8
%
15.0
%
13.8
%
15.4
%
13.4
%
14.9
%
13.5
%
9.5
%
12.9
%
12.8
%
Aerospace & Defense
15.3
%
12.2
%
15.1
%
18.0
%
15.2
%
15.3
%
16.1
%
20.1
%
22.9
%
18.9
%
Industrial
11.1
%
11.5
%
12.3
%
12.2
%
11.8
%
9.7
%
13.5
%
12.3
%
11.0
%
11.7
%
Total
8.2
%
10.1
%
10.1
%
11.6
%
10.1
%
9.8
%
11.6
%
10.8
%
13.3
%
11.4
%
SEGMENT OPERATING MARGIN % Excluding Divestitures (1)
Energy
11.3%
16.0%
12.6%
16.9%
14.4%
15.6%
13.5%
9.5%
12.9%
13.0%
Aerospace & Defense
15.3%
12.2%
15.1%
18.0%
15.2%
15.3%
16.1%
20.1%
22.9%
18.9%
Industrial
10.5%
11.3%
12.0%
11.5%
11.4%
8.7%
12.7%
12.6%
11.0%
11.3%
Total
8.4%
9.9%
9.4%
11.4%
9.8%
9.5%
11.2%
10.9%
13.3%
11.2%
Numbers may not add due to rounding.
(1) Divested businesses include Reliability Services (Energy), Spence / Nicholson (Industrial) and Delden (Industrial) which were sold before September 29, 2019. Engineered Valves and 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 Businesses (in thousands) UNAUDITED
2018
2019
Divested Businesses (1)
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
ORDERS
Energy
$16,891
$18,389
$19,145
$15,451
$69,875
$4,104
$—
$—
$—
$4,104
Industrial
9,708
9,836
7,078
11,351
37,973
4,778
5,275
4,798
—
14,851
Total
$26,599
$28,225
$26,223
$26,802
$107,849
$8,882
$5,275
$4,798
$—
$18,955
NET REVENUES
Energy
$14,731
$17,419
$16,579
$16,885
$65,613
$3,106
$—
$—
$—
$3,106
Industrial
8,816
6,317
7,123
9,762
32,017
5,366
5,198
2,891
—
13,456
Total
$23,547
$23,735
$23,702
$26,647
$97,630
$8,473
$5,198
$2,891
$—
$16,562
SEGMENT OPERATING INCOME
Energy
$8
$2,085
$2,905
$1,597
$6,596
$—
$—
$—
$—
$—
Industrial
1,573
897
1,174
1,983
5,627
1,630
1,642
—
—
3,272
Total
$1,582
$2,982
$4,079
$3,580
$12,223
$1,630
$1,642
$—
$—
$3,272
Numbers may not add due to rounding.
(1) Divested businesses include Reliability Services (Energy), Spence/Nicholson (Industrial) and Delden (Industrial) which were sold before September 29, 2019. Engineered Valves and Distributed Valves are discontinued operations and not reflected in the As Reported figures in accordance with US GAAP.
CIRCOR INTERNATIONAL, INC. RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS (in thousands, except per share data) UNAUDITED
2018
2019
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
$(145)
$(465)
$24,073
$30,531
$53,994
$(22,378)
$12,339
$9,128
$16,822
$15,913
LESS:
Capital expenditures, net of sale proceeds (a)
8,141
3,563
5,119
6,534
23,357
3,689
2,995
(963)
(1,535)
4,186
FREE CASH FLOW
$(8,286)
$(4,028)
$18,954
$23,997
$30,637
$(26,067)
$9,344
$10,091
$18,357
$11,727
Gross Debt
$823,665
$827,629
$831,613
$807,050
$807,050
$753,950
$748,250
$659,100
$653,850
$653,850
Less: Cash & Cash Equivalents
123,305
69,030
71,334
68,517
68,517
73,619
76,082
69,225
84,531
84,531
GROSS DEBT, NET OF CASH
$700,360
$758,599
$760,279
$738,533
$738,533
$680,331
$672,168
$589,875
$569,319
$569,319
TOTAL SHAREHOLDERS' EQUITY
$592,096
$573,992
$574,171
$528,993
$528,993
$516,177
$494,899
$375,388
$391,411
$391,411
GROSS DEBT AS % OF EQUITY
139%
144%
145%
153%
153%
146%
151%
176%
167%
167%
GROSS DEBT, NET OF CASH AS % OF EQUITY
118%
132%
132%
140%
140%
132%
136%
157%
145%
145%
Numbers may not add due to rounding.
(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 per share data) UNAUDITED
2018
2019
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
NET (LOSS) INCOME
$(17,441)
$5,902
$(6,841)
$(21,005)
$(39,384)
$(4,634)
$(18,520)
$(112,337)
$1,556
$(133,935)
LESS:
Restructuring related inventory charges
473
16
—
(137)
352
325
—
(1,145)
—
(820)
Amortization of inventory step-up
6,600
—
—
—
6,600
—
—
—
—
—
Restructuring charges, net
3,424
524
1,075
825
5,848
358
299
5,038
(509)
5,186
Acquisition amortization
11,797
11,767
11,735
12,012
47,311
12,078
11,247
11,202
11,188
45,715
Acquisition depreciation
1,837
1,735
1,742
1,735
7,049
1,124
1,106
1,101
1,021
4,352
Special charges (recoveries), net
3,360
1,629
1,913
6,160
13,061
(8,200)
3,916
18,481
3,489
17,686
Income tax impact
(5,798)
(4,213)
(1,857)
10,998
(870)
3,625
(2,266)
5,533
(1,752)
5,140
Net income (loss) from discontinued operations
3,468
(4,802)
2,874
4,498
6,038
5,728
17,156
84,688
1,595
109,167
ADJUSTED NET INCOME
$7,719
$12,556
$10,642
$15,086
$46,004
$10,404
$12,938
$12,592
$16,588
$52,492
(LOSS) EARNINGS PER COMMON SHARE (Diluted)
$(0.88)
$0.30
$(0.34)
$(1.06)
$(1.99)
$(0.23)
$(0.93)
$(5.64)
$0.08
$(6.73)
LESS:
Restructuring related inventory charges
0.02
—
—
(0.01)
0.02
0.02
—
(0.06)
—
(0.04)
Amortization of inventory step-up
0.33
—
—
—
0.33
—
—
—
—
—
Restructuring charges, net
0.17
0.03
0.05
0.04
0.29
0.02
0.02
0.25
(0.03)
0.26
Acquisition amortization
0.60
0.59
0.59
0.61
2.39
0.61
0.57
0.56
0.56
2.30
Acquisition depreciation
0.09
0.09
0.09
0.09
0.36
0.06
0.06
0.06
0.05
0.22
Special charges (recoveries), net
0.17
0.08
0.10
0.31
0.66
(0.41)
0.20
0.93
0.18
0.89
Income tax impact
(0.29)
(0.21)
(0.10)
0.55
(0.06)
0.18
(0.12)
0.28
(0.10)
0.24
Earnings (Loss) Per Share from discontinued operations
0.18
(0.24)
0.14
0.23
0.30
0.29
0.86
4.25
0.08
5.48
ADJUSTED EARNINGS PER SHARE (Diluted)
$0.39
$0.63
$0.53
$0.76
$2.30
$0.52
$0.64
$0.63
$0.82
$2.62
Numbers may not add due to rounding.
CIRCOR INTERNATIONAL, INC. RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS (in thousands) UNAUDITED
2018
2019
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
NET (LOSS) INCOME
$(17,441)
$5,902
$(6,841)
$(21,005)
$(39,384)
$(4,633)
$(18,520)
$(112,338)
$1,556
$(133,935)
LESS:
Interest expense, net
11,810
13,764
14,137
13,264
52,975
13,094
12,947
11,804
10,764
48,609
Depreciation
4,834
4,791
9,983
6,576
26,183
5,499
5,568
5,551
5,427
22,045
Amortization
14,134
13,985
8,632
12,477
49,228
12,536
11,685
11,629
11,741
47,591
Benefit from (provision for) income taxes
(3,782)
(608)
(45)
13,885
9,451
5,709
284
7,490
1,193
14,676
Loss from discontinued operations
3,468
(4,802)
2,874
4,498
6,038
5,728
17,156
84,688
1,595
109,167
EBITDA
$13,023
$33,032
$28,740
$29,695
$104,490
$37,933
$29,120
$8,857
$32,276
$108,153
LESS:
Restructuring related inventory charges
473
16
—
(137)
352
325
—
(1,145)
—
(820)
Amortization of inventory step-up
6,600
—
—
—
6,600
—
—
—
—
—
Restructuring charges, net
3,424
524
1,075
825
5,848
358
299
5,038
(509)
5,186
Special recoveries (charges), net
3,360
1,629
1,913
6,160
13,061
(8,200)
3,916
18,481
3,489
17,686
ADJUSTED EBITDA
$26,880
$35,200
$31,728
$36,544
$130,351
$30,416
$33,335
$31,230
$35,256
$130,203
Numbers may not add due to rounding.
Leverage Calculations:
Full Year 2019, as reported
Full Year 2019, Pro Forma for I&S Divestiture (b)
GROSS DEBT, NET OF CASH (Net Debt)
$
569,319
Net Debt
$
569,319
Net Debt / 2019 Adjusted EBITDA
4.4 x
Net proceeds from I&S sale
(160,000
)
Pro Forma Net Debt
$
409,319
2019 Investor Plan Comparison
2019 Adjusted EBITDA - Reported
$
130,203
2019 EBITDA as reported
$
130,203
Engineered Valves & Distributed Valves First Half (a)
(6,619
)
2019 I&S EBITDA
(16,811
)
2019 Adjusted EBITDA - Investor Plan
$
123,584
Pro Forma Adjusted EBITDA
$
113,392
Net Debt / Adjusted EBITDA - Investor Plan
4.6 x
Pro Forma Net Debt / Pro Forma Adjusted EBITDA
3.6 x
(a) The Company's June 2019 investor plan included the results of Engineered Valves and Distributed Valves for the first half of 2019. In Q3 2019, both businesses were reclassified to discontinued operations.
(b) The Company sold its Instrumentation & Sampling business in January 2020 for $172 million. These pro forma calculations reduce net debt by the expected net proceeds of $160 million and remove 2019 EBITDA from the reported EBITDA.
CIRCOR INTERNATIONAL, INC. RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS (in thousands, except per share data) UNAUDITED
2018
2019
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
GAAP OPERATING (LOSS) INCOME
$
(7,787
)
$
10,599
$
8,545
$
10,295
$
21,653
$
17,749
$
12,020
$
(9,084
)
$
16,996
$
37,681
LESS:
Restructuring related inventory charges
473
16
—
(137
)
352
325
—
(1,145
)
—
(820
)
Amortization of inventory step-up
6,600
—
—
—
6,600
—
—
—
—
—
Restructuring charges, net
3,424
524
1,075
825
5,848
358
299
5,038
(509
)
5,186
Acquisition amortization
11,797
11,767
11,735
12,012
47,311
12,078
11,247
11,202
11,188
45,715
Acquisition depreciation
1,837
1,735
1,742
1,735
7,049
1,123
1,106
1,101
1,021
4,351
Special charges (recoveries), net
3,360
1,629
1,913
6,160
13,061
(8,200
)
3,916
18,481
3,489
17,686
ADJUSTED OPERATING INCOME
$19,704
$26,269
$25,010
$30,890
$101,873
$23,433
$28,589
$25,594
$32,185
$109,799
GAAP OPERATING MARGIN
(3.2
)%
4.1
%
3.5
%
3.9
%
2.1
%
7.4
%
4.9
%
(3.8
)%
7.0
%
3.9
%
LESS:
—
%
—
%
—
%
—
%
—
%
—
%
—
%
—
%
—
%
—
%
Restructuring related inventory charges
0.2
%
—
%
—
%
(0.1
)%
—
%
0.1
%
—
%
(0.5
)%
—
%
(0.1
)%
Amortization of inventory step-up
2.8
%
—
%
—
%
—
%
0.7
%
—
%
—
%
—
%
—
%
—
%
Restructuring charges, net
1.4
%
0.2
%
0.4
%
0.3
%
0.6
%
0.2
%
0.1
%
2.1
%
(0.2
)%
0.5
%
Acquisition amortization
4.9
%
4.5
%
4.7
%
4.5
%
4.7
%
5.1
%
4.6
%
4.7
%
4.6
%
4.7
%
Acquisition depreciation
0.8
%
0.7
%
0.7
%
0.7
%
0.7
%
0.5
%
0.5
%
0.5
%
0.4
%
0.5
%
Special charges (recoveries), net
1.4
%
0.6
%
0.8
%
2.3
%
1.3
%
(3.4
)%
1.6
%
7.8
%
1.4
%
1.8
%
Income tax impact
—
%
—
%
—
%
—
%
—
%
—
%
—
%
—
%
—
%
—
%
Net income loss from discontinued operations
—
%
—
%
—
%
—
%
—
%
—
%
—
%
—
%
—
%
—
%
ADJUSTED OPERATING MARGIN
8.2
%
10.1
%
10.1
%
11.6
%
10.1
%
9.8
%
11.6
%
10.8
%
13.3
%
11.4
%
Impact of Divestitures (1)
0.2
%
(0.2)
%
(0.7)
%
(0.2
)%
(0.3
)%
(0.3
)%
(0.4
)%
0.1
%
—
%
(0.1
)%
ADJUSTED OPERATING MARGIN
EXCLUDING DIVESTITURES (1)
8.4
%
9.9
%
9.4
%
11.4
%
9.8
%
9.5
%
11.2
%
10.9
%
13.3
%
11.2
%
Numbers may not add due to rounding.
View source version on businesswire.com: https://www.businesswire.com/news/home/20200302005466/en/
David F. Mullen Senior Vice President Finance CIRCOR International (781) 270-1200
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