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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 |
|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
|
|
Delaware
|
|
04-3477276
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
c/o CIRCOR INTERNATIONAL, Inc.
30 Corporate Drive, Suite 200, Burlington, MA
|
|
01803-4238
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
Large accelerated filer
|
x
|
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
|
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
o
|
|
Page
|
|
Financial Statements
(Unaudited)
|
||
|
Condensed Consolidated Balance Sheets as of July 3, 2016 and December 31, 2015
|
|
|
Condensed Consolidated Statements of Income for the Three and Six Months Ended July 3, 2016 and July 5, 2015
|
|
|
Condensed Consolidated Statements of Comprehensive (Loss) Income for the Three and Six Months Ended July 3, 2016 and July 5, 2015
|
|
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Condensed Consolidated Statements of Cash Flows for the Six Months Ended July 3, 2016 and July 5, 2015
|
|
|
||
Item
6.
|
||
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
July 3, 2016
|
|
December 31, 2015
|
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
72,970
|
|
|
$
|
54,541
|
|
Trade accounts receivable, less allowance for doubtful accounts of $7,811 and $8,290, respectively
|
115,327
|
|
|
125,628
|
|
||
Inventories
|
162,347
|
|
|
177,840
|
|
||
Prepaid expenses and other current assets
|
21,522
|
|
|
16,441
|
|
||
Total Current Assets
|
372,166
|
|
|
374,450
|
|
||
PROPERTY, PLANT AND EQUIPMENT, NET
|
81,973
|
|
|
87,029
|
|
||
OTHER ASSETS:
|
|
|
|
||||
Goodwill
|
117,138
|
|
|
115,452
|
|
||
Intangibles, net
|
43,688
|
|
|
48,981
|
|
||
Deferred income taxes
|
36,328
|
|
|
36,799
|
|
||
Other assets
|
6,183
|
|
|
7,204
|
|
||
TOTAL ASSETS
|
$
|
657,476
|
|
|
$
|
669,915
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
CURRENT LIABILITIES:
|
|
|
|
||||
Accounts payable
|
$
|
45,987
|
|
|
$
|
64,284
|
|
Accrued expenses and other current liabilities
|
39,945
|
|
|
52,878
|
|
||
Accrued compensation and benefits
|
19,121
|
|
|
18,424
|
|
||
Income taxes payable
|
9,174
|
|
|
6,585
|
|
||
Total Current Liabilities
|
114,227
|
|
|
142,171
|
|
||
LONG-TERM DEBT
|
97,600
|
|
|
90,500
|
|
||
DEFERRED INCOME TAXES
|
9,927
|
|
|
10,424
|
|
||
OTHER NON-CURRENT LIABILITIES
|
24,355
|
|
|
26,043
|
|
||
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; 16,423,059 and 16,364,299 shares issued and outstanding at July 3, 2016 and December 31, 2015, respectively
|
178
|
|
|
177
|
|
||
Additional paid-in capital
|
286,601
|
|
|
283,621
|
|
||
Retained earnings
|
264,375
|
|
|
257,939
|
|
||
Common treasury stock, at cost (1,381,784 shares at July 3, 2016 and December 31, 2015)
|
(74,972
|
)
|
|
(74,972
|
)
|
||
Accumulated other comprehensive loss, net of tax
|
(64,815
|
)
|
|
(65,988
|
)
|
||
Total Shareholders’ Equity
|
411,367
|
|
|
400,777
|
|
||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$
|
657,476
|
|
|
$
|
669,915
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
July 3,
2016 |
|
July 5,
2015 |
|
July 3,
2016 |
|
July 5,
2015 |
||||||||
Net revenues
|
$
|
146,392
|
|
|
$
|
166,906
|
|
|
$
|
297,190
|
|
|
$
|
332,766
|
|
Cost of revenues
|
99,961
|
|
|
116,112
|
|
|
205,526
|
|
|
229,323
|
|
||||
GROSS PROFIT
|
46,431
|
|
|
50,794
|
|
|
91,664
|
|
|
103,443
|
|
||||
Selling, general and administrative expenses
|
36,490
|
|
|
42,394
|
|
|
74,289
|
|
|
81,201
|
|
||||
Special charges, net
|
4,594
|
|
|
3,310
|
|
|
6,533
|
|
|
4,821
|
|
||||
OPERATING INCOME
|
5,347
|
|
|
5,090
|
|
|
10,842
|
|
|
17,421
|
|
||||
Other expense (income):
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
605
|
|
|
805
|
|
|
1,236
|
|
|
1,446
|
|
||||
Other income, net
|
(549
|
)
|
|
(104
|
)
|
|
(1,077
|
)
|
|
(610
|
)
|
||||
TOTAL OTHER EXPENSE, NET
|
56
|
|
|
701
|
|
|
159
|
|
|
836
|
|
||||
INCOME BEFORE INCOME TAXES
|
5,291
|
|
|
4,389
|
|
|
10,683
|
|
|
16,585
|
|
||||
Provision for income taxes
|
1,478
|
|
|
2,517
|
|
|
2,998
|
|
|
5,800
|
|
||||
NET INCOME
|
$
|
3,813
|
|
|
$
|
1,872
|
|
|
$
|
7,685
|
|
|
$
|
10,785
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.23
|
|
|
$
|
0.11
|
|
|
$
|
0.47
|
|
|
$
|
0.63
|
|
Diluted
|
$
|
0.23
|
|
|
$
|
0.11
|
|
|
$
|
0.46
|
|
|
$
|
0.62
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
16,424
|
|
|
16,828
|
|
|
16,403
|
|
|
17,245
|
|
||||
Diluted
|
16,595
|
|
|
16,900
|
|
|
16,538
|
|
|
17,306
|
|
||||
Dividends declared per common share
|
$
|
0.0375
|
|
|
$
|
0.0375
|
|
|
$
|
0.0750
|
|
|
$
|
0.0750
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
July 3, 2016
|
|
July 5, 2015
|
|
July 3, 2016
|
|
July 5, 2015
|
||||||||
Net income
|
$
|
3,813
|
|
|
$
|
1,872
|
|
|
$
|
7,685
|
|
|
$
|
10,785
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(7,121
|
)
|
|
8,506
|
|
|
1,173
|
|
|
(16,944
|
)
|
||||
Other comprehensive (loss) income, net of tax
|
(7,121
|
)
|
|
8,506
|
|
|
1,173
|
|
|
(16,944
|
)
|
||||
COMPREHENSIVE (LOSS) INCOME
|
$
|
(3,308
|
)
|
|
$
|
10,378
|
|
|
$
|
8,858
|
|
|
$
|
(6,159
|
)
|
|
Six Months Ended
|
||||||
|
July 3,
2016 |
|
July 5,
2015 |
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
7,685
|
|
|
$
|
10,785
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation
|
6,476
|
|
|
7,150
|
|
||
Amortization
|
5,098
|
|
|
3,537
|
|
||
Bad debt (recovery) expense
|
(853
|
)
|
|
1,469
|
|
||
Loss on write down of inventory
|
4,011
|
|
|
3,673
|
|
||
Compensation expense of share-based plans
|
2,909
|
|
|
4,122
|
|
||
Tax effect of share-based plan compensation
|
116
|
|
|
(287
|
)
|
||
Loss on sale or write down of property, plant and equipment
|
3,116
|
|
|
377
|
|
||
Gain on sale of business
|
—
|
|
|
(972
|
)
|
||
Changes in operating assets and liabilities, net of effects of acquisition and disposition:
|
|
|
|
||||
Trade accounts receivable
|
11,555
|
|
|
12,313
|
|
||
Inventories
|
13,281
|
|
|
(27,875
|
)
|
||
Prepaid expenses and other assets
|
(3,480
|
)
|
|
(8,484
|
)
|
||
Accounts payable, accrued expenses and other liabilities
|
(32,161
|
)
|
|
(14,174
|
)
|
||
Net cash provided by (used in) operating activities
|
17,753
|
|
|
(8,366
|
)
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Purchases of property, plant and equipment
|
(6,998
|
)
|
|
(5,567
|
)
|
||
Proceeds from the sale of property, plant and equipment
|
1,138
|
|
|
—
|
|
||
Proceeds from the sale of affiliate
|
—
|
|
|
2,759
|
|
||
Business acquisition, net of cash acquired
|
—
|
|
|
(79,983
|
)
|
||
Net cash used in investing activities
|
(5,860
|
)
|
|
(82,791
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Proceeds from long-term debt
|
65,939
|
|
|
202,380
|
|
||
Payments of long-term debt
|
(58,890
|
)
|
|
(100,533
|
)
|
||
Dividends paid
|
(1,249
|
)
|
|
(1,308
|
)
|
||
Proceeds from the exercise of stock options
|
180
|
|
|
70
|
|
||
Tax effect of share-based plan compensation
|
(116
|
)
|
|
287
|
|
||
Purchases of common stock
|
—
|
|
|
(69,517
|
)
|
||
Net cash provided by financing activities
|
5,864
|
|
|
31,379
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
672
|
|
|
(6,567
|
)
|
||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
18,429
|
|
|
(66,345
|
)
|
||
Cash and cash equivalents at beginning of period
|
54,541
|
|
|
121,372
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
72,970
|
|
|
$
|
55,027
|
|
|
|
|
|
|
July 3, 2016
|
|
December 31, 2015
|
||||
Raw materials
|
$
|
49,839
|
|
|
$
|
51,439
|
|
Work in process
|
77,624
|
|
|
83,324
|
|
||
Finished goods
|
34,884
|
|
|
43,077
|
|
||
Total inventories
|
$
|
162,347
|
|
|
$
|
177,840
|
|
|
Intangible assets acquired (in thousands)
|
|
Weighted average amortization period (in years)
|
||
Customer relationships
|
$
|
22,185
|
|
|
7
|
Order backlog
|
3,993
|
|
|
1
|
|
Acquired technology
|
2,260
|
|
|
10
|
|
Trade name
|
4,391
|
|
|
Indefinite
|
|
Total intangible assets
|
$
|
32,829
|
|
|
|
|
Energy
|
|
Aerospace & Defense
|
|
Consolidated
Total
|
||||||
Goodwill as of December 31, 2015
|
$
|
93,175
|
|
|
$
|
22,277
|
|
|
$
|
115,452
|
|
Adjustments to preliminary purchase price allocation
|
196
|
|
|
—
|
|
|
196
|
|
|||
Currency translation adjustments
|
1,458
|
|
|
32
|
|
|
1,490
|
|
|||
Goodwill as of July 3, 2016
|
$
|
94,829
|
|
|
$
|
22,309
|
|
|
$
|
117,138
|
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||
Patents
|
$
|
6,026
|
|
|
$
|
(5,782
|
)
|
Non-amortized intangibles (primarily trademarks and trade names)
|
15,042
|
|
|
—
|
|
||
Customer relationships
|
52,547
|
|
|
(27,286
|
)
|
||
Order backlog
|
5,140
|
|
|
(4,545
|
)
|
||
Acquired technology
|
2,373
|
|
|
(691
|
)
|
||
Other
|
5,362
|
|
|
(4,498
|
)
|
||
Total
|
$
|
86,490
|
|
|
$
|
(42,802
|
)
|
Net carrying value of intangible assets
|
$
|
43,688
|
|
|
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
After 2020
|
||||||||||||
Estimated amortization expense
|
$
|
4,895
|
|
|
$
|
7,861
|
|
|
$
|
6,093
|
|
|
$
|
4,481
|
|
|
$
|
2,882
|
|
|
$
|
2,434
|
|
|
Energy
|
|
Aerospace & Defense
|
|
Corporate /
Eliminations
|
|
Consolidated
Total
|
||||||||
Three Months Ended July 3, 2016
|
|
|
|
|
|
|
|
||||||||
Net revenues
|
$
|
110,677
|
|
|
$
|
35,715
|
|
|
$
|
—
|
|
|
$
|
146,392
|
|
Inter-segment revenues
|
164
|
|
|
44
|
|
|
(208
|
)
|
|
—
|
|
||||
Operating income (loss)
|
10,125
|
|
|
652
|
|
|
(5,430
|
)
|
|
5,347
|
|
||||
Interest expense, net
|
|
|
|
|
|
|
605
|
|
|||||||
Other income, net
|
|
|
|
|
|
|
(549
|
)
|
|||||||
Income before income taxes
|
|
|
|
|
|
|
$
|
5,291
|
|
||||||
Identifiable assets
|
717,292
|
|
|
176,175
|
|
|
(235,819
|
)
|
|
657,648
|
|
||||
Capital expenditures
|
1,500
|
|
|
1,803
|
|
|
123
|
|
|
3,426
|
|
||||
Depreciation and amortization
|
4,133
|
|
|
1,316
|
|
|
332
|
|
|
5,781
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Three Months Ended July 5, 2015
|
|
|
|
|
|
|
|
||||||||
Net revenues
|
$
|
127,230
|
|
|
$
|
39,676
|
|
|
$
|
—
|
|
|
$
|
166,906
|
|
Inter-segment revenues
|
253
|
|
|
18
|
|
|
(271
|
)
|
|
—
|
|
||||
Operating income (loss)
|
9,170
|
|
|
1,397
|
|
|
(5,477
|
)
|
|
5,090
|
|
||||
Interest expense, net
|
|
|
|
|
|
|
805
|
|
|||||||
Other income, net
|
|
|
|
|
|
|
(104
|
)
|
|||||||
Income before income taxes
|
|
|
|
|
|
|
$
|
4,389
|
|
||||||
Identifiable assets
|
822,176
|
|
|
187,932
|
|
|
(263,807
|
)
|
|
746,301
|
|
||||
Capital expenditures
|
2,108
|
|
|
1,174
|
|
|
355
|
|
|
3,637
|
|
||||
Depreciation and amortization
|
4,650
|
|
|
1,491
|
|
|
315
|
|
|
6,456
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Six Months Ended July 3, 2016
|
|
|
|
|
|
|
|
||||||||
Net revenues
|
$
|
223,297
|
|
|
$
|
73,893
|
|
|
$
|
—
|
|
|
$
|
297,190
|
|
Inter-segment revenues
|
358
|
|
|
92
|
|
|
(450
|
)
|
|
—
|
|
||||
Operating income (loss)
|
20,028
|
|
|
2,734
|
|
|
(11,920
|
)
|
|
10,842
|
|
||||
Interest expense, net
|
|
|
|
|
|
|
1,236
|
|
|||||||
Other income, net
|
|
|
|
|
|
|
(1,077
|
)
|
|||||||
Income before income taxes
|
|
|
|
|
|
|
$
|
10,683
|
|
||||||
Identifiable assets
|
717,292
|
|
|
176,175
|
|
|
(235,819
|
)
|
|
657,648
|
|
||||
Capital expenditures
|
3,568
|
|
|
2,879
|
|
|
229
|
|
|
6,676
|
|
||||
Depreciation and amortization
|
8,240
|
|
|
2,677
|
|
|
657
|
|
|
11,574
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Six Months Ended July 5, 2015
|
|
|
|
|
|
|
|
||||||||
Net revenues
|
$
|
254,816
|
|
|
$
|
77,950
|
|
|
$
|
—
|
|
|
$
|
332,766
|
|
Inter-segment revenues
|
503
|
|
|
101
|
|
|
(604
|
)
|
|
—
|
|
||||
Operating income (loss)
|
25,102
|
|
|
4,250
|
|
|
(11,931
|
)
|
|
17,421
|
|
||||
Interest expense, net
|
|
|
|
|
|
|
1,446
|
|
|||||||
Other income, net
|
|
|
|
|
|
|
(610
|
)
|
|||||||
Income before income taxes
|
|
|
|
|
|
|
$
|
16,585
|
|
||||||
Identifiable assets
|
822,176
|
|
|
187,932
|
|
|
(263,807
|
)
|
|
746,301
|
|
||||
Capital expenditures
|
3,424
|
|
|
1,649
|
|
|
547
|
|
|
5,620
|
|
||||
Depreciation and amortization
|
7,083
|
|
|
3,021
|
|
|
583
|
|
|
10,687
|
|
(in thousands, except per share amounts)
|
Three Months Ended
|
||||||||||||||||||||
|
July 3, 2016
|
|
July 5, 2015
|
||||||||||||||||||
|
Net
Income
|
|
Shares
|
|
Per Share
Amount
|
|
Net
Income
|
|
Shares
|
|
Per Share
Amount
|
||||||||||
Basic EPS
|
$
|
3,813
|
|
|
16,424
|
|
|
$
|
0.23
|
|
|
$
|
1,872
|
|
|
16,828
|
|
|
$
|
0.11
|
|
Dilutive securities, common stock options
|
—
|
|
|
171
|
|
|
—
|
|
|
—
|
|
|
72
|
|
|
—
|
|
||||
Diluted EPS
|
$
|
3,813
|
|
|
16,595
|
|
|
$
|
0.23
|
|
|
$
|
1,872
|
|
|
16,900
|
|
|
$
|
0.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Six Months Ended
|
||||||||||||||||||||
|
July 3, 2016
|
|
July 5, 2015
|
||||||||||||||||||
|
Net
Income
|
|
Shares
|
|
Per Share
Amount
|
|
Net
Income
|
|
Shares
|
|
Per Share
Amount
|
||||||||||
Basic EPS
|
$
|
7,685
|
|
|
16,403
|
|
|
$
|
0.47
|
|
|
$
|
10,785
|
|
|
17,245
|
|
|
$
|
0.63
|
|
Dilutive securities, common stock options
|
—
|
|
|
135
|
|
|
(0.01
|
)
|
|
—
|
|
|
61
|
|
|
(0.01
|
)
|
||||
Diluted EPS
|
$
|
7,685
|
|
|
16,538
|
|
|
$
|
0.46
|
|
|
$
|
10,785
|
|
|
17,306
|
|
|
$
|
0.62
|
|
Balance beginning December 31, 2015
|
$
|
4,551
|
|
Provisions
|
1,608
|
|
|
Claims settled
|
(2,003
|
)
|
|
Currency translation adjustment
|
52
|
|
|
Balance ending July 3, 2016
|
$
|
4,208
|
|
Term Remaining
|
Maximum Potential
Future Payments
|
||
0–12 months
|
$
|
21,010
|
|
Greater than 12 months
|
26,431
|
|
|
Total
|
$
|
47,441
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
July 3,
2016 |
|
July 5,
2015 |
|
July 3,
2016 |
|
July 5,
2015 |
||||||||
Interest cost on benefits obligation
|
$
|
574
|
|
|
$
|
548
|
|
|
$
|
1,147
|
|
|
$
|
1,097
|
|
Estimated return on assets
|
(664
|
)
|
|
(723
|
)
|
|
(1,327
|
)
|
|
(1,446
|
)
|
||||
Loss amortization
|
226
|
|
|
211
|
|
|
453
|
|
|
421
|
|
||||
Net periodic cost of defined benefit pension plans
|
$
|
136
|
|
|
$
|
36
|
|
|
$
|
273
|
|
|
$
|
72
|
|
|
Foreign Currency Translation Adjustments
|
|
Pension, net
|
|
Total
|
||||||
Balance as of December 31, 2015
|
$
|
(36,725
|
)
|
|
$
|
(29,263
|
)
|
|
$
|
(65,988
|
)
|
Other comprehensive income, net of tax
|
1,173
|
|
|
—
|
|
|
1,173
|
|
|||
Balance as of July 3, 2016
|
$
|
(35,552
|
)
|
|
$
|
(29,263
|
)
|
|
$
|
(64,815
|
)
|
|
Special Charges / (Recoveries)
|
||||||||||||||
|
As of and for the three months ended July 3, 2016
|
||||||||||||||
|
Energy
|
|
Aerospace & Defense
|
|
Corporate
|
|
Total
|
||||||||
Facility related expenses, net
|
262
|
|
|
1,693
|
|
|
—
|
|
|
1,955
|
|
||||
Employee related expenses
|
638
|
|
|
666
|
|
|
—
|
|
|
1,304
|
|
||||
Total restructuring charges, net
|
$
|
900
|
|
|
$
|
2,359
|
|
|
$
|
—
|
|
|
$
|
3,259
|
|
Acquisition related recoveries
|
(48
|
)
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
||||
Brazil Closure
|
1,383
|
|
|
—
|
|
|
—
|
|
|
1,383
|
|
||||
Total special charges, net
|
$
|
2,235
|
|
|
$
|
2,359
|
|
|
$
|
—
|
|
|
$
|
4,594
|
|
|
|
|
|
|
|
|
|
||||||||
Accrued special and restructuring charges as of April 3, 2016
|
|
|
|
|
|
|
$
|
3,464
|
|
||||||
Total quarterly special charges, net (shown above)
|
|
|
|
|
|
|
4,594
|
|
|||||||
Special charges paid / settled, net
|
|
|
|
|
|
|
(3,565
|
)
|
|||||||
Accrued special and restructuring charges as of July 3, 2016
|
|
|
|
|
|
|
$
|
4,493
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
|
Special Charges / (Recoveries)
|
||||||||||||||
|
As of and for the six months ended July 3, 2016
|
||||||||||||||
|
Energy
|
|
Aerospace & Defense
|
|
Corporate
|
|
Total
|
||||||||
Facility related (recoveries) expenses
|
(114
|
)
|
|
3,093
|
|
|
—
|
|
|
2,979
|
|
||||
Employee related expenses
|
736
|
|
|
707
|
|
|
—
|
|
|
1,443
|
|
||||
Total restructuring charges, net
|
$
|
622
|
|
|
$
|
3,800
|
|
|
$
|
—
|
|
|
$
|
4,422
|
|
Acquisition related recoveries
|
(161
|
)
|
|
—
|
|
|
—
|
|
|
(161
|
)
|
||||
Brazil Closure
|
2,270
|
|
|
—
|
|
|
2
|
|
|
2,272
|
|
||||
Total special charges, net
|
$
|
2,731
|
|
|
$
|
3,800
|
|
|
$
|
2
|
|
|
$
|
6,533
|
|
|
|
|
|
|
|
|
|
||||||||
Accrued special and restructuring charges as of December 31, 2015
|
|
|
|
|
|
|
$
|
9,133
|
|
||||||
Total year to date special charges, net (shown above)
|
|
|
|
|
|
|
6,533
|
|
|||||||
Special charges paid / settled, net
|
|
|
|
|
|
|
(11,173
|
)
|
|||||||
Accrued special and restructuring charges as of July 3, 2016
|
|
|
|
|
|
|
$
|
4,493
|
|
|
Special Charges / (Recoveries)
|
||||||||||||||
|
As of and for the three months ended July 5, 2015
|
||||||||||||||
|
Energy
|
|
Aerospace & Defense
|
|
Corporate
|
|
Total
|
||||||||
Facility related expenses
|
362
|
|
|
244
|
|
|
—
|
|
|
606
|
|
||||
Employee related expenses
|
2,456
|
|
|
65
|
|
|
—
|
|
|
2,521
|
|
||||
Total restructuring charges, net
|
$
|
2,818
|
|
|
$
|
309
|
|
|
$
|
—
|
|
|
$
|
3,127
|
|
Divestitures
|
(28
|
)
|
|
(65
|
)
|
|
—
|
|
|
(93
|
)
|
||||
Acquisition related charges
|
276
|
|
|
—
|
|
|
—
|
|
|
276
|
|
||||
Total special charges, net
|
$
|
3,066
|
|
|
$
|
244
|
|
|
$
|
—
|
|
|
$
|
3,310
|
|
|
|
|
|
|
|
|
|
||||||||
Accrued special and restructuring charges as of April 5, 2015
|
|
|
|
|
|
|
$
|
8,944
|
|
||||||
Total quarterly special charges, net (shown above)
|
|
|
|
|
|
|
3,310
|
|
|||||||
Special charges paid / settled
|
|
|
|
|
|
|
(3,927
|
)
|
|||||||
Accrued special and restructuring charges as of July 5, 2015
|
|
|
|
|
|
|
$
|
8,327
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
|
Special Charges / (Recoveries)
|
||||||||||||||
|
As of and for the six months ended July 5, 2015
|
||||||||||||||
|
Energy
|
|
Aerospace & Defense
|
|
Corporate
|
|
Total
|
||||||||
Facility and professional fee related expenses
|
381
|
|
|
257
|
|
|
—
|
|
|
638
|
|
||||
Employee related expenses
|
2,780
|
|
|
1,221
|
|
|
—
|
|
|
4,001
|
|
||||
Total restructuring charges, net
|
$
|
3,161
|
|
|
$
|
1,478
|
|
|
$
|
—
|
|
|
$
|
4,639
|
|
Divestitures
|
(2
|
)
|
|
(1,042
|
)
|
|
—
|
|
|
(1,044
|
)
|
||||
Acquisition related charges
|
806
|
|
|
—
|
|
|
—
|
|
|
806
|
|
||||
Executive retirement charges
|
—
|
|
|
—
|
|
|
420
|
|
|
420
|
|
||||
Total special charges, net
|
$
|
3,965
|
|
|
$
|
436
|
|
|
$
|
420
|
|
|
$
|
4,821
|
|
|
|
|
|
|
|
|
|
||||||||
Accrued special and restructuring charges as of December 31, 2014
|
|
|
|
|
|
|
$
|
9,133
|
|
||||||
Total year to date special charges, net (shown above)
|
|
|
|
|
|
|
4,821
|
|
|||||||
Special charges paid / settled
|
|
|
|
|
|
|
(5,627
|
)
|
|||||||
Accrued special and restructuring charges as of July 5, 2015
|
|
|
|
|
|
|
$
|
8,327
|
|
|
California Restructuring Charges, net as of July 3, 2016
|
||
|
Aerospace & Defense
|
||
Facility related expenses - incurred to date
|
$
|
3,092
|
|
Employee related expenses - incurred to date
|
415
|
|
|
Total restructuring related special charges - incurred to date
|
$
|
3,507
|
|
|
2016 Actions Restructuring Charges / (Recoveries), net as of July 3, 2016
|
||||||||||
|
Energy
|
|
Aerospace & Defense
|
|
Total
|
||||||
Facility related (gain) expenses - incurred to date
|
$
|
(198
|
)
|
|
$
|
94
|
|
|
$
|
(104
|
)
|
Employee related expenses - incurred to date
|
819
|
|
|
188
|
|
|
1,007
|
|
|||
Total restructuring related special charges - incurred to date
|
$
|
621
|
|
|
$
|
282
|
|
|
$
|
903
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended
|
|
Three Months Ended
|
|
|
|||||||||||
|
July 3, 2016
|
|
July 5, 2015
|
|
% Change
|
|||||||||||
|
|
|||||||||||||||
Net revenues
|
$
|
146,392
|
|
|
100.0
|
%
|
|
$
|
166,906
|
|
|
100.0
|
%
|
|
(12.3
|
)%
|
Cost of revenues
|
99,961
|
|
|
68.3
|
%
|
|
116,112
|
|
|
69.6
|
%
|
|
(13.9
|
)%
|
||
Gross profit
|
46,431
|
|
|
31.7
|
%
|
|
50,794
|
|
|
30.4
|
%
|
|
(8.6
|
)%
|
||
Selling, general and administrative expenses
|
36,490
|
|
|
24.9
|
%
|
|
42,394
|
|
|
25.4
|
%
|
|
(13.9
|
)%
|
||
Special charges, net
|
4,594
|
|
|
3.1
|
%
|
|
3,310
|
|
|
2.0
|
%
|
|
38.8
|
%
|
||
Operating income
|
5,347
|
|
|
3.7
|
%
|
|
5,090
|
|
|
3.0
|
%
|
|
5.0
|
%
|
||
Other expense (income):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net
|
605
|
|
|
0.4
|
%
|
|
805
|
|
|
0.5
|
%
|
|
(24.8
|
)%
|
||
Other income, net
|
(549
|
)
|
|
(0.4
|
)%
|
|
(104
|
)
|
|
(0.1
|
)%
|
|
427.9
|
%
|
||
Total other expense, net
|
56
|
|
|
—
|
%
|
|
701
|
|
|
0.4
|
%
|
|
(92.0
|
)%
|
||
Income before income taxes
|
5,291
|
|
|
3.6
|
%
|
|
4,389
|
|
|
2.6
|
%
|
|
20.6
|
%
|
||
Provision for income taxes
|
1,478
|
|
|
1.0
|
%
|
|
2,517
|
|
|
1.5
|
%
|
|
(41.3
|
)%
|
||
Net income
|
$
|
3,813
|
|
|
2.6
|
%
|
|
$
|
1,872
|
|
|
1.1
|
%
|
|
103.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Total Change
|
|
Operations
|
|
Foreign
Exchange
|
||||||||||||
Segment
|
July 3, 2016
|
|
July 5, 2015
|
|
|||||||||||||||
|
(in thousands)
|
||||||||||||||||||
Energy
|
$
|
110,677
|
|
|
$
|
127,230
|
|
|
$
|
(16,553
|
)
|
|
$
|
(17,276
|
)
|
|
$
|
723
|
|
Aerospace & Defense
|
35,715
|
|
|
39,676
|
|
|
(3,961
|
)
|
|
(3,823
|
)
|
|
(138
|
)
|
|||||
Total
|
$
|
146,392
|
|
|
$
|
166,906
|
|
|
$
|
(20,514
|
)
|
|
$
|
(21,099
|
)
|
|
$
|
585
|
|
(in thousands)
|
Three Months Ended
|
|
Total Change
|
|
Operations
|
|
Foreign Exchange
|
|
Special and Restructuring Charges, net
|
||||||||||||||
Segment
|
July 3,
2016 |
|
July 5,
2015 |
|
|
||||||||||||||||||
Energy
|
$
|
10,126
|
|
|
$
|
9,170
|
|
|
$
|
956
|
|
|
$
|
(2,734
|
)
|
|
$
|
271
|
|
|
$
|
3,419
|
|
Aerospace & Defense
|
652
|
|
|
1,397
|
|
|
(745
|
)
|
|
(398
|
)
|
|
(84
|
)
|
|
(263
|
)
|
||||||
Corporate
|
(5,431
|
)
|
|
(5,477
|
)
|
|
46
|
|
|
47
|
|
|
(1
|
)
|
|
—
|
|
||||||
Total
|
$
|
5,347
|
|
|
$
|
5,090
|
|
|
$
|
257
|
|
|
$
|
(3,085
|
)
|
|
$
|
186
|
|
|
$
|
3,156
|
|
|
Six Months Ended
|
|
Six Months Ended
|
|
|
|||||||||||
|
July 3, 2016
|
|
July 5, 2015
|
|
% Change
|
|||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||||
Net revenues
|
$
|
297,190
|
|
|
100.0
|
%
|
|
$
|
332,766
|
|
|
100.0
|
%
|
|
(10.7
|
)%
|
Cost of revenues
|
205,526
|
|
|
69.2
|
%
|
|
229,323
|
|
|
68.9
|
%
|
|
(10.4
|
)%
|
||
Gross profit
|
91,664
|
|
|
30.8
|
%
|
|
103,443
|
|
|
31.1
|
%
|
|
(11.4
|
)%
|
||
Selling, general and administrative expenses
|
74,289
|
|
|
25.0
|
%
|
|
81,201
|
|
|
24.4
|
%
|
|
(8.5
|
)%
|
||
Special charges
|
6,533
|
|
|
2.2
|
%
|
|
4,821
|
|
|
1.4
|
%
|
|
35.5
|
%
|
||
Operating income
|
10,842
|
|
|
3.6
|
%
|
|
17,421
|
|
|
5.2
|
%
|
|
(37.8
|
)%
|
||
Other (income) expense:
|
|
|
|
|
|
|
|
|
|
|||||||
Interest expense, net
|
1,236
|
|
|
0.4
|
%
|
|
1,446
|
|
|
0.4
|
%
|
|
(14.5
|
)%
|
||
Other (income), net
|
(1,077
|
)
|
|
(0.4
|
)%
|
|
(610
|
)
|
|
(0.2
|
)%
|
|
76.6
|
%
|
||
Total other expense
|
159
|
|
|
0.1
|
%
|
|
836
|
|
|
0.3
|
%
|
|
(81.0
|
)%
|
||
Income before income taxes
|
10,683
|
|
|
3.6
|
%
|
|
16,585
|
|
|
5.0
|
%
|
|
(35.6
|
)%
|
||
Provision for income taxes
|
2,998
|
|
|
1.0
|
%
|
|
5,800
|
|
|
1.7
|
%
|
|
(48.3
|
)%
|
||
Net income
|
$
|
7,685
|
|
|
2.6
|
%
|
|
$
|
10,785
|
|
|
3.2
|
%
|
|
(28.7
|
)%
|
*Not a meaningful percentage
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
Total Change
|
|
Acquisitions
|
|
Operations
|
|
Foreign
Exchange
|
||||||||||||||
Segment
|
July 3, 2016
|
|
July 5, 2015
|
|
|||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Energy
|
$
|
223,297
|
|
|
$
|
254,816
|
|
|
$
|
(31,519
|
)
|
|
$
|
6,106
|
|
|
$
|
(37,758
|
)
|
|
$
|
133
|
|
Aerospace & Defense
|
73,893
|
|
|
77,950
|
|
|
(4,057
|
)
|
|
—
|
|
|
(3,532
|
)
|
|
(526
|
)
|
||||||
Total
|
$
|
297,190
|
|
|
$
|
332,766
|
|
|
$
|
(35,576
|
)
|
|
$
|
6,106
|
|
|
$
|
(41,290
|
)
|
|
$
|
(393
|
)
|
|
Six Months Ended
|
|
Total
Change
|
|
Acquisition
|
|
Operations
|
|
Foreign
Exchange
|
|
Restructuring Related Inventory & Special (Recoveries) Charges, net
|
||||||||||||||||
|
July 3, 2016
|
|
July 5, 2015
|
|
|||||||||||||||||||||||
Segment
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
(in thousands)
|
|
|
||||||||||||||||||||||||
Energy
|
$
|
20,028
|
|
|
$
|
25,102
|
|
|
$
|
(5,074
|
)
|
|
$
|
2,209
|
|
|
$
|
(10,455
|
)
|
|
$
|
551
|
|
|
$
|
2,621
|
|
Aerospace & Defense
|
2,734
|
|
|
4,250
|
|
|
(1,516
|
)
|
|
—
|
|
|
171
|
|
|
(137
|
)
|
|
(1,550
|
)
|
|||||||
Corporate
|
(11,920
|
)
|
|
(11,931
|
)
|
|
11
|
|
|
—
|
|
|
(411
|
)
|
|
4
|
|
|
418
|
|
|||||||
Total
|
$
|
10,842
|
|
|
$
|
17,421
|
|
|
$
|
(6,579
|
)
|
|
$
|
2,209
|
|
|
$
|
(10,695
|
)
|
|
$
|
418
|
|
|
$
|
1,489
|
|
•
|
During 2016, we have initiated certain restructuring activities, under which we continue to simplify our business ("2016 Actions"). Under these restructurings, we will reduce expenses, primarily through closing a number of smaller facilities.
|
•
|
In July 2015, we announced the closure of one of the two Corona, California manufacturing facilities ("California Restructuring"). Under this restructuring, we are reducing certain general, manufacturing and facility related expenses.
|
•
|
On February 18, 2015, we announced additional restructuring actions ("2015 Announced Restructurings"), under which we continued to simplify our businesses. Under this restructuring, we reduced certain general, administrative and manufacturing related expenses which were primarily personnel related.
|
•
|
On April 22, 2014, we announced restructuring actions ("2014 Announced Restructurings"), under which we continued to simplify our businesses. Under this restructuring, we reduced certain general and administrative expenses, including the reduction of certain management layers, and closing of a number of smaller facilities. The savings from these restructuring actions were utilized for growth investments.
|
|
Cumulative Planned Savings
|
|
Cumulative Projected Savings
|
|
Expected Periods of Savings Realization
|
||||
2016 Actions
|
$
|
2.3
|
|
|
$
|
2.3
|
|
|
Q2 2016 - Q2 2017
|
California Restructuring
|
3.0
|
|
|
3.0
|
|
|
Q3 2016 - Q4 2017
|
||
2015 Announced Restructurings
|
18.0
|
|
|
21.2
|
|
|
Q1 2015 - Q4 2016
|
||
2014 Announced Restructurings
|
7.0
|
|
|
10.3
|
|
|
Q2 2014 - Q4 2015
|
||
2013 Announced Restructurings
|
9.0
|
|
|
12.0
|
|
|
Q4 2013 - Q4 2015
|
||
Total Savings
|
$
|
39.3
|
|
|
$
|
48.8
|
|
|
|
|
July 3, 2016
|
|
July 5, 2015
|
||||
Cash flow provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
17,753
|
|
|
$
|
(8,366
|
)
|
Investing activities
|
(5,860
|
)
|
|
(82,791
|
)
|
||
Financing activities
|
5,864
|
|
|
31,379
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
672
|
|
|
(6,567
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
$
|
18,429
|
|
|
$
|
(66,345
|
)
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 6.
|
EXHIBITS
|
|
|
|
CIRCOR INTERNATIONAL, INC.
|
|
|
July 29, 2016
|
/s/ Scott A. Buckhout
|
|
Scott A. Buckhout
|
|
President and Chief Executive Officer
|
|
Principal Executive Officer
|
|
|
July 29, 2016
|
/s/ Rajeev Bhalla
|
|
Rajeev Bhalla
|
|
Executive Vice President, Chief Financial Officer
|
|
Principal Financial Officer
|
|
|
July 29, 2016
|
/s/ David F. Mullen
|
|
David F. Mullen
|
|
Vice President and Corporate Controller
|
|
Principal Accounting Officer
|
1 Year CIRCOR Chart |
1 Month CIRCOR Chart |
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