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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 |
From Jul 2019 to Jul 2024
CIRCOR International, Inc. (NYSE: CIR), a leading provider of valves and other highly engineered products for markets including oil & gas, power generation and aerospace & defense, today announced financial results for the second quarter ended June 29, 2014.
Second-Quarter 2014 Highlights
“CIRCOR continued to demonstrate strong bottom-line improvement during the second quarter,” said Scott Buckhout, CIRCOR President and Chief Executive Officer. “We achieved a 70 basis point increase in adjusted operating margin to 10.7% largely driven by restructuring and cost control initiatives.”
“Similar to the first quarter, second-quarter quoting activity remained strong in upstream oil and gas, as well as in power generation; however, actual bookings continue to be slow. In our Aerospace & Defense business, bookings were up over the prior year.”
“Our ability to meet our bottom-line expectations is a result of our focus on expanding margins through operational excellence and the CIRCOR simplification program. We expect that our margin expansion initiatives will gain further traction throughout the year.”
“We continue to make investments in transforming CIRCOR into a growth company. We are increasing our sales and engineering capacity in key international growth markets while we focus more resources on developing innovative new products,” concluded Buckhout.
Third-Quarter 2014 Guidance
For the third quarter of 2014, the Company expects:
Selected Consolidated Results
(In millions, except percents and bps) Q2 2014 Q2 2013 Change Revenue $ 207.9 $ 223.6 -7% Adjusted Operating Income1 $ 22.2 $ 22.3 -1% Adjusted Operating Margin1 10.7% 10.0% 70 bps GAAP Earnings Per Share (Diluted) $ 0.67 $ 0.72 -7%Adjusted Earnings Per Share (Diluted) 1
$ 0.91 $ 0.81 12% Orders $ 203.7 $ 200.1 2% Backlog2 $ 413.1 $ 433.5 -5% Free Cash Flow $ 7.4 $ 9.5 -22%Segment Results
(In millions, except percents and bps) Q2 2014 Q2 2013 Change Energy Revenue $ 160.6 $ 173.6 -7% Adjusted Operating Margin1 14.6% 13.3% 130 bps Orders $ 160.3 $ 163.8 -2% Backlog $ 279.5 $ 263.6 6% Aerospace & Defense Revenue $ 47.3 $ 50.1 -6% Adjusted Operating Margin1 7.1% 11.4% -430 bps Orders $ 43.4 $ 36.3 20% Backlog2 $ 133.5 $ 169.9 -21%1. Consolidated and Segment Results exclude special and restructuring charges, $1.3 million and $2.3 million related to restructuring actions during Q2 2014 and Q2 2013, respectively, as well as $5.1 million in inventory charges related to the exit of certain landing gear product lines recorded during Q2 2014. Refer to reconciliation to commonly used US GAAP terms.2. Consolidated and Aerospace & Defense Segment Backlog reflects a Q2 2014 reduction of $28.6 million associated with the exit of certain landing gear product lines.
Conference Call Information
CIRCOR International will hold a conference call to review its financial results today, August 1, 2014, at 10:00 a.m. ET. To listen to the conference call and view the accompanying presentation slides, visit “Webcasts & Presentations” in the “Investors” section of the CIRCOR website. The live call also can be accessed by dialing (877) 407-5790 or (201) 689-8328. The webcast will be archived for one year on the Company’s website.
Use of Non-GAAP Financial Measures
Adjusted net income, adjusted earnings per diluted share, adjusted operating income, adjusted operating margin, and free cash flow are non-GAAP financial measures and are intended to serve as a complement to results provided in accordance with accounting principles generally accepted in the United States. CIRCOR believes that such information provides an additional measurement and consistent historical comparison of the Company’s performance. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in this news release.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E 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 future performance, including third-quarter revenue and earnings guidance and estimated total annualized pre-tax savings from restructuring actions. Actual events, performance or results could differ materially from the anticipated events, performance or results expressed or implied by such forward-looking statements. 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 highly engineered products and sub-systems for markets including oil & gas, power generation and aerospace & defense. With more than 7,000 customers in over 100 countries, CIRCOR has a diversified product portfolio with recognized, market-leading brands that fulfill its customers’ unique application needs. The Company’s strategy is to grow organically and through complementary acquisitions; simplify CIRCOR’s operations; achieve world class operational excellence; and attract and retain top industry talent. For more information, visit the Company’s investor relations website at http://investors.circor.com.
CIRCOR INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(in thousands, except share data)
UNAUDITED
Three Months Ended Six Months Ended June 29, 2014 June 30, 2013 June 29, 2014 June 30, 2013 Net revenues $ 207,884 $ 223,644 $ 419,070 $ 429,042 Cost of revenues 148,184 153,538 294,731 299,086 GROSS PROFIT 59,700 70,106 124,339 129,956 Selling, general and administrative expenses 42,609 47,596 87,498 93,168 Special charges, net 1,257 2,254 100 3,632 OPERATING INCOME 15,834 20,256 36,741 33,156 Other (income) expense: Interest expense, net 891 838 1,809 1,625 Other (income) expense, net (384 ) 626 (853 ) 1,239 TOTAL OTHER EXPENSE, NET 507 1,464 956 2,864 INCOME BEFORE INCOME TAXES 15,328 18,792 35,785 30,292 Provision for income taxes 3,402 6,124 9,227 9,715 NET INCOME $ 11,926 $ 12,667 $ 26,558 $ 20,577 Earnings per common share: Basic $ 0.68 $ 0.72 $ 1.51 $ 1.17 Diluted $ 0.67 $ 0.72 $ 1.50 $ 1.17 Weighted average number of common shares outstanding: Basic 17,665 17,565 17,643 17,539 Diluted 17,767 17,607 17,754 17,569 Dividends paid per common share $ 0.0375 $ 0.0375 $ 0.0750 $ 0.0750CIRCOR INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(UNAUDITED)
Six Months Ended June 29, 2014 June 30, 2013 OPERATING ACTIVITIES Net income $ 26,558 $ 20,577 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 8,185 8,035 Amortization 1,591 1,509 Compensation expense of share-based plans 4,020 2,156 Tax effect of share-based plan compensation (971 ) (422 ) (Gain) on disposal of property, plant and equipment (54 ) (129 ) Changes in operating assets and liabilities: Trade accounts receivable, net (23,705 ) (9,406 ) Inventories, net 3,600 (4,059 ) Prepaid expenses and other assets 143 (2,412 ) Accounts payable, accrued expenses and other liabilities 7,988 3,583 Net cash provided by operating activities 27,355 19,432 INVESTING ACTIVITIES Additions to property, plant and equipment (5,603 ) (8,808 ) Proceeds from the sale of property, plant and equipment 32 314 Net cash used in investing activities (5,571 ) (8,494 ) FINANCING ACTIVITIES Proceeds from long-term debt 81,910 74,255 Payments of long-term debt (88,776 ) (84,679 ) Dividends paid (1,341 ) (1,340 ) Proceeds from the exercise of stock options 237 1,498 Tax effect of share-based compensation 971 422 Net cash used in financing activities (6,999 ) (9,844 ) Effect of exchange rate changes on cash and cash equivalents (639 ) (2,002 ) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 14,146 (907 ) Cash and cash equivalents at beginning of year 102,180 61,738 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 116,326 $ 60,831 Cash paid during the year for: Income taxes $ 6,375 $ 3,464 Interest $ 1,358 $ 1,054CIRCOR INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 29, 2014 December 31, 2013 ASSETS (unaudited) CURRENT ASSETS: Cash and cash equivalents $ 116,326 $ 102,180 Short-term investments 95 95 Trade accounts receivable, less allowance for doubtful accounts of $2,832 and $2,449, respectively 168,541 144,742 Inventories, net 196,389 199,404 Prepaid expenses and other current assets 19,817 19,815 Deferred income tax asset 19,476 17,686 Total Current Assets 520,644 483,922 PROPERTY, PLANT AND EQUIPMENT, NET 105,461 107,724 OTHER ASSETS: Goodwill 76,860 75,876 Intangibles, net 34,476 35,656 Deferred income tax asset 16,779 18,579 Other assets 4,866 4,893 TOTAL ASSETS $ 759,086 $ 726,650 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 81,886 $ 70,589 Accrued expenses and other current liabilities 63,023 57,507 Accrued compensation and benefits 24,369 31,289 Income taxes payable 6,396 3,965 Notes payable and current portion of long-term debt 3,642 7,203 Total Current Liabilities 179,316 170,553 LONG-TERM DEBT, NET OF CURRENT PORTION 39,797 42,435 DEFERRED INCOME TAXES 9,236 9,666 OTHER NON-CURRENT LIABILITIES 23,375 27,109 SHAREHOLDERS’ EQUITY: Common stock 170 176 Additional paid-in capital 274,580 269,884 Retained earnings 227,868 202,930 Accumulated other comprehensive gain, net of taxes 4,744 3,897 Total Shareholders’ Equity 507,362 476,887 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 759,086 $ 726,650
CIRCOR INTERNATIONAL, INC.
SUMMARY OF ORDERS AND BACKLOG
(in millions)
UNAUDITED
Three Months Ended Six Months Ended June 29, 2014 June 30, 2013 June 29, 2014 June 30, 2013 ORDERS (1) Energy $ 160.3 $ 163.8 $ 319.9 $ 337.3 Aerospace & Defense 43.4 36.3 83.7 89.6 Total orders $ 203.7 $ 200.1 $ 403.6 $ 426.9 BACKLOG (2) June 29, 2014 June 30, 2013 Energy $ 279.5 $ 263.6 Aerospace & Defense (3) 133.5 169.9 Total backlog $ 413.1 $ 433.5Note 1: Orders do not include the foreign exchange impact due to the re-measurement of customer order backlog amounts denominated in foreign currencies.
Note 2: Backlog includes all unshipped customer orders.
Note 3: Aerospace & Defense backlog reflects a reduction of $28.6 million associated with the exit of certain landing gear product lines recorded in the second quarter of 2014.
CIRCOR INTERNATIONAL, INC.SUMMARY REPORT BY SEGMENT
(in thousands, except earnings per share)
UNAUDITED
2013 2014 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR TOTAL NET REVENUES Energy $ 157,104 $ 173,557 $ 167,660 $ 162,649 $ 660,970 $ 162,587$160,580
$323,167
Aerospace & Defense 48,294 50,087 47,071 51,386 196,838 48,599 47,304 95,903 Total $ 205,398 $ 223,644 $ 214,731 $ 214,035 $ 857,808 $ 211,186 $ 207,884 $ 419,070 ADJUSTED OPERATING MARGIN Energy 10.8 % 13.3 % 15.2 % 17.1 % 14.1 % 13.8 % 14.6 % 14.2 % Aerospace & Defense 5.9 % 11.4 % 12.1 % 8.4 % 9.5 % 9.1 % 7.1 % 8.1 % Segment operating margin 9.6 % 12.9 % 14.5 % 15.0 % 13.0 % 12.7 % 12.9 % 12.8 % Corporate expenses (2.6 )% (2.9 )% (3.4 )% (3.5 )% (3.1 )% (3.4 )% (2.2 )% (2.8 )% Adjusted operating margin 7.1 % 10.0 % 11.1 % 11.6 % 9.9 % 9.4 % 10.7 % 10.0 % Restructuring inventory charges 0.1 % (0.1 )% — % 0.3 % 0.1 % — % 2.5 % 1.2 % Impairment charges — % — % — % 3.2 % 0.8 % — % — % — % Special (recoveries) — % — % (1.5 )% — % (0.4 )% (1.1 )% — % (0.5 )% Special charges 0.7 % 1.0 % 1.4 % 2.4 % 1.4 % 0.5 % 0.6 % 0.6 % Total GAAP operating margin 6.3 % 9.1 % 11.1 % 5.6 % 8.1 % 9.9 % 7.6 % 8.8 % 2013 2014 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR TOTAL ADJUSTED OPERATING INCOME Energy $ 16,940 $ 23,114 $ 25,441 $ 27,809 $ 93,304 $ 22,462$23,502
$ 45,964 Aerospace & Defense 2,864 5,724 5,705 4,342 18,635 4,426 3,362 7,788 Segment operating income 19,804 28,838 31,146 32,151 111,939 26,888 26,864 53,752 Corporate expenses (5,277 ) (6,570 ) (7,400 ) (7,400 ) (26,646 ) (7,137 ) (4,634 ) (11,771 ) Adjusted operating income 14,528 22,268 23,746 24,751 85,293 19,750 22,231 41,981 Restructuring inventory charges 250 (242 ) — 638 646 — 5,139 5,139 Impairment charges — — — 6,872 6,872 — — — Special (recoveries) — — (3,151 ) — (3,151 ) (2,243 ) — (2,243 ) Special charges 1,378 2,254 2,961 5,160 11,752 1,086 1,257 2,343 Total GAAP operating income 12,900 20,256 23,936 12,081 69,174 20,907 15,834 36,741 INTEREST EXPENSE, NET (787 ) (838 ) (745 ) (792 ) (3,162 ) (918 ) (891 ) (1,809 ) OTHER (EXPENSE) INCOME, NET (612 ) (626 ) (568 ) (167 ) (1,974 ) 468 384 853 PRETAX INCOME 11,501 18,792 22,623 11,122 64,038 20,457 15,328 35,785 PROVISION FOR INCOME TAXES (3,592 ) (6,124 ) (4,903 ) (2,297 ) (16,916 ) (5,825 ) (3,402 ) (9,227 ) EFFECTIVE TAX RATE 31.2 % 32.6 % 21.7 % 20.7 % 26.4 % 28.5 % 22.2 % 25.8 % NET INCOME $ 7,908 $ 12,668 $ 17,720 $ 8,825 $ 47,121 $ 14,632 $ 11,926 $ 26,558 Weighted Average Common Shares Outstanding (Diluted) 17,529 17,607 17,667 17,710 17,629 17,741 17,767 17,754 EARNINGS PER COMMON SHARE (Diluted) $ 0.45 $ 0.72 $ 1.00 $ 0.50 $ 2.67 $ 0.82 $ 0.67 $ 1.50 ADJUSTED EBITDA $ 18,682 $ 26,419 $ 27,850 $ 29,441 $ 102,392 $ 27,387 $ 14,744 $ 42,131 ADJUSTED EBITDA AS A % OF SALES 9.1 % 11.8 % 13.0 % 13.8 % 11.9 % 13.0 % 7.1 % 10.1 % CAPITAL EXPENDITURES $ 4,707 $ 4,100 $ 4,772 $ 3,749 $ 17,328 $ 2,670 $ 2,933 $ 5,603CIRCOR INTERNATIONAL, INC.
RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS
(in thousands, except earnings per share)
UNAUDITED
2013 2014 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR TOTAL FREE CASH FLOW AS % OF NET INCOME 14 % 75 % 167 % 167 % 116 % 98 % 62 % 82 % FREE CASH FLOW $ 1,100 $ 9,525 $ 29,557 $ 14,696 $ 54,878 $ 14,387 $ 7,365 $ 21,752 ADD: Capital Expenditures 4,707 4,100 4,772 3,749 17,328 2,670 2,933 5,603 NET CASH PROVIDED BY OPERATING ACTIVITIES $ 5,807 $ 13,625 $ 34,329 $ 18,445 $ 72,206 $ 17,057 $ 10,298 $ 27,355 NET DEBT (CASH) $ 8,814 $ (1,376 ) $ (36,466 ) $ (52,637 ) $ (52,637 ) $ (66,056 ) $ (72,982 ) $ (72,982 ) ADD: Cash & Cash Equivalents 57,633 60,831 86,285 102,180 102,180 122,097 116,326 116,326 Investments 99 96 98 95 95 92 95 95 TOTAL DEBT $ 66,546 $ 59,551 $ 49,917 $ 49,638 $ 49,638 $ 56,133 $ 43,439 $ 43,439 DEBT AS % OF EQUITY 16 % 14 % 11 % 10 % 10 % 11 % 9 % 9 % TOTAL DEBT 66,546 59,551 49,917 49,638 49,638 56,133 43,439 43,439 TOTAL SHAREHOLDERS' EQUITY 418,819 432,151 459,058 476,887 476,887 492,601 507,363 507,363 2013 2014 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR TOTAL ADJUSTED OPERATING INCOME $ 14,528 $ 22,268 $ 23,746 $ 24,751 $ 85,293 $ 19,750 $ 22,230 $ 41,980 LESS: Inventory restructuring charges 250 (242 ) — 638 646 — 5,139 5,139 Impairment charges — — — 6,872 6,872 — — — Special (recoveries) — — (3,151 ) — (3,151 ) (2,243 ) — (2,243 ) Special charges 1,378 2,254 2,961 5,160 11,753 1,086 1,257 2,343 OPERATING INCOME $ 12,900 $ 20,256 $ 23,936 $ 12,081 $ 69,173 $ 20,907 $ 15,834 $ 36,741 ADJUSTED NET INCOME $ 9,043 $ 14,044 $ 16,439 $ 16,773 $ 56,299 $ 13,916 $ 16,090 $ 30,006 LESS: Inventory restructuring charges, net of tax 174 (165 ) — 396 405 — 3,316 3,316 Impairment charges, net of tax — — — 4,261 4,261 — — — Special (recoveries), net of tax — — (3,151 ) — (3,151 ) (1,391 ) — (1,391 ) Special charges, net of tax 961 1,541 1,870 3,291 7,663 675 848 1,523 NET INCOME $ 7,908 $ 12,668 $ 17,720 $ 8,825 $ 47,121 $ 14,632 $ 11,926 $ 26,558 ADJUSTED EARNINGS PER SHARE $ 0.52 $ 0.81 $ 0.93 $ 0.95 $ 3.21 $ 0.78 $ 0.91 $ 1.70 LESS: Inventory restructuring charges, net of tax 0.01 (0.01 ) — 0.02 0.02 — 0.19 0.19 Impairment charges, net of tax — — — 0.24 0.24 — — — Special (recoveries), net of tax — — (0.18 ) — (0.18 ) (0.08 ) — (0.08 ) Special charges, net of tax 0.06 0.10 0.11 0.19 0.46 0.04 0.05 0.09 EARNINGS PER COMMON SHARE (Diluted) $ 0.45 $ 0.72 $ 1.00 $ 0.50 $ 2.67 $ 0.82 $ 0.67 $ 1.50 2013 2014 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR TOTAL EBITDA $ 17,054 $ 24,407 $ 23,368 $ 11,914 $ 86,272 $ 26,230 $ 21,140 $ 47,370 LESS: Interest expense, net (787 ) (838 ) (745 ) (792 ) (3,162 ) (918 ) (891 ) (1,809 ) Depreciation (4,009 ) (4,026 ) (3,908 ) (4,091 ) (16,034 ) (4,069 ) (4,116 ) (8,185 ) Amortization (758 ) (751 ) (764 ) (766 ) (3,039 ) (786 ) (805 ) (1,591 ) Provision for income taxes (3,592 ) (6,124 ) (4,903 ) (2,297 ) (16,916 ) (5,825 ) (3,402 ) (9,227 ) NET INCOME $ 7,908 $ 12,668 $ 17,720 $ 8,825 $ 47,121 $ 14,632 $ 11,926 $ 26,558 ADJUSTED EBITDA $ 18,682 $ 26,419 $ 27,850 $ 29,441 $ 102,392 $ 27,387 $ 14,744 $ 42,131 Inventory restructuring charges (250 ) 242 — (638 ) (646 ) — 5,139 5,139 Impairment charges — — — (6,872 ) (6,872 ) — — — Special (recoveries) — — 3,151 — 3,151 (2,243 ) — (2,243 ) Special charges (1,378 ) (2,254 ) (2,961 ) (5,160 ) (11,753 ) 1,086 1,257 2,343 Interest expense, net (787 ) (838 ) (745 ) (792 ) (3,162 ) (918 ) (891 ) (1,809 ) Depreciation (4,009 ) (4,026 ) (3,908 ) (4,091 ) (16,034 ) (4,069 ) (4,116 ) (8,185 ) Amortization (758 ) (751 ) (764 ) (766 ) (3,039 ) (786 ) (805 ) (1,591 ) Provision for income taxes (3,592 ) (6,124 ) (4,903 ) (2,297 ) (16,916 ) (5,825 ) (3,402 ) (9,227 ) NET INCOME $ 7,908 $ 12,668 $ 17,720 $ 8,825 $ 47,121 $ 14,632 $ 11,926 $ 26,558CIRCOR INTERNATIONAL, INC.
RECONCILIATION OF FUTURE PERFORMANCE MEASURES TO COMMONLY
USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS
UNAUDITED
3rd Quarter 2014
Low
High
REVENUE (in millions)
$200
$ 215EXPECTED ADJUSTED EARNINGS PER SHARE (DILUTIVE)
$ 0.87 $ 0.94LESS: Restructuring related charges, Special charges
0.08 0.06 EXPECTED EARNINGS PER COMMON SHARE (Diluted) $ 0.79 $ 0.88 Note: Assumes 26% to 27% tax rate and exchange rates at present values.
CIRCOR InternationalRajeev Bhalla, 781-270-1200Executive Vice President & Chief Financial Officer
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