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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)
|
|
|
Page
|
|
Financial Statements
(Unaudited)
|
||
|
Condensed Consolidated Balance Sheets as of October 1, 2017 and December 31, 2016
|
|
|
Condensed Consolidated Statements of Income for the Three and Nine Months Ended October 1, 2017 and October 2, 2016
|
|
|
Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended October 1, 2017 and October 2, 2016
|
|
|
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended October 1, 2017 and October 2, 2016
|
|
|
||
Item
6.
|
||
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
October 1, 2017
|
|
December 31, 2016
|
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
75,627
|
|
|
$
|
58,279
|
|
Trade accounts receivable, less allowance for doubtful accounts of $4,760 and $5,056, respectively
|
130,177
|
|
|
133,046
|
|
||
Inventories
|
180,285
|
|
|
149,584
|
|
||
Prepaid expenses and other current assets
|
43,054
|
|
|
29,557
|
|
||
Total Current Assets
|
429,143
|
|
|
370,466
|
|
||
PROPERTY, PLANT AND EQUIPMENT, NET
|
99,013
|
|
|
99,713
|
|
||
OTHER ASSETS:
|
|
|
|
||||
Goodwill
|
210,685
|
|
|
206,659
|
|
||
Intangibles, net
|
130,052
|
|
|
135,778
|
|
||
Other assets
|
10,138
|
|
|
8,140
|
|
||
TOTAL ASSETS
|
$
|
879,031
|
|
|
$
|
820,756
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
CURRENT LIABILITIES:
|
|
|
|
||||
Accounts payable
|
$
|
63,690
|
|
|
$
|
46,767
|
|
Accrued expenses and other current liabilities
|
50,155
|
|
|
50,707
|
|
||
Accrued compensation and benefits
|
15,384
|
|
|
20,249
|
|
||
Current portion of long-term debt
|
5,000
|
|
|
—
|
|
||
Total Current Liabilities
|
134,229
|
|
|
117,723
|
|
||
LONG-TERM DEBT
|
264,026
|
|
|
251,200
|
|
||
DEFERRED INCOME TAXES
|
7,929
|
|
|
13,657
|
|
||
OTHER NON-CURRENT LIABILITIES
|
20,962
|
|
|
33,766
|
|
||
COMMITMENTS AND CONTINGENCIES (NOTE 10)
|
|
|
|
||||
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; 16,500,540 and 16,445,363 shares issued and outstanding at October 1, 2017 and December 31, 2016, respectively
|
179
|
|
|
178
|
|
||
Additional paid-in capital
|
293,907
|
|
|
289,423
|
|
||
Retained earnings
|
280,441
|
|
|
265,543
|
|
||
Common treasury stock, at cost (1,372,488 shares at October 1, 2017 and December 31, 2016)
|
(74,472
|
)
|
|
(74,472
|
)
|
||
Accumulated other comprehensive loss, net of tax
|
(48,170
|
)
|
|
(76,262
|
)
|
||
Total Shareholders’ Equity
|
451,885
|
|
|
404,410
|
|
||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$
|
879,031
|
|
|
$
|
820,756
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
October 1, 2017
|
|
October 2, 2016
|
|
October 1, 2017
|
|
October 2, 2016
|
||||||||
Net revenues
|
$
|
159,693
|
|
|
$
|
134,833
|
|
|
$
|
456,131
|
|
|
$
|
432,023
|
|
Cost of revenues
|
112,390
|
|
|
92,479
|
|
|
314,527
|
|
|
298,005
|
|
||||
GROSS PROFIT
|
47,303
|
|
|
42,354
|
|
|
141,604
|
|
|
134,018
|
|
||||
Selling, general and administrative expenses
|
38,120
|
|
|
36,002
|
|
|
116,425
|
|
|
110,290
|
|
||||
Impairment charges
|
—
|
|
|
208
|
|
|
—
|
|
|
208
|
|
||||
Special and restructuring charges (recoveries), net
|
2,319
|
|
|
2,631
|
|
|
(443
|
)
|
|
9,165
|
|
||||
OPERATING INCOME
|
6,864
|
|
|
3,513
|
|
|
25,622
|
|
|
14,355
|
|
||||
Other expense (income):
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
2,445
|
|
|
605
|
|
|
6,298
|
|
|
1,841
|
|
||||
Other expense (income), net
|
823
|
|
|
163
|
|
|
2,022
|
|
|
(914
|
)
|
||||
TOTAL OTHER EXPENSE, NET
|
3,268
|
|
|
768
|
|
|
8,320
|
|
|
927
|
|
||||
INCOME BEFORE INCOME TAXES
|
3,596
|
|
|
2,745
|
|
|
17,302
|
|
|
13,428
|
|
||||
(Benefit from) provision for income taxes
|
(21
|
)
|
|
(1,673
|
)
|
|
(57
|
)
|
|
1,325
|
|
||||
NET INCOME
|
$
|
3,617
|
|
|
$
|
4,418
|
|
|
$
|
17,359
|
|
|
$
|
12,103
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.22
|
|
|
$
|
0.27
|
|
|
$
|
1.05
|
|
|
$
|
0.74
|
|
Diluted
|
$
|
0.22
|
|
|
$
|
0.27
|
|
|
$
|
1.04
|
|
|
$
|
0.73
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
16,503
|
|
|
16,427
|
|
|
16,486
|
|
|
16,411
|
|
||||
Diluted
|
16,709
|
|
|
16,629
|
|
|
16,721
|
|
|
16,568
|
|
||||
Dividends declared per common share
|
$
|
0.0375
|
|
|
$
|
0.0375
|
|
|
$
|
0.1125
|
|
|
$
|
0.1125
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
October 1, 2017
|
|
October 2, 2016
|
|
October 1, 2017
|
|
October 2, 2016
|
||||||||
Net income
|
$
|
3,617
|
|
|
$
|
4,418
|
|
|
$
|
17,359
|
|
|
$
|
12,103
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
9,510
|
|
|
120
|
|
|
28,091
|
|
|
1,292
|
|
||||
Other comprehensive income, net of tax
|
9,510
|
|
|
120
|
|
|
28,091
|
|
|
1,292
|
|
||||
COMPREHENSIVE INCOME
|
$
|
13,127
|
|
|
$
|
4,538
|
|
|
$
|
45,450
|
|
|
$
|
13,395
|
|
|
Nine Months Ended
|
||||||
OPERATING ACTIVITIES
|
October 1, 2017
|
|
October 2, 2016
|
||||
Net income
|
$
|
17,359
|
|
|
$
|
12,103
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
10,889
|
|
|
9,614
|
|
||
Amortization
|
9,491
|
|
|
7,586
|
|
||
Bad debt expense (recovery)
|
265
|
|
|
(928
|
)
|
||
Loss on write down of inventory
|
1,463
|
|
|
5,784
|
|
||
Compensation expense of share-based plans
|
2,696
|
|
|
4,200
|
|
||
Tax effect of share-based plan compensation
|
—
|
|
|
123
|
|
||
Change in fair value of contingent consideration
|
(12,200
|
)
|
|
—
|
|
||
Loss on sale of property, plant and equipment
|
87
|
|
|
3,238
|
|
||
Impairment charges
|
—
|
|
|
208
|
|
||
Loss on sale of business
|
5,300
|
|
|
—
|
|
||
Changes in operating assets and liabilities, net of effects of acquisition and disposition:
|
|
|
|
||||
Trade accounts receivable
|
8,782
|
|
|
15,422
|
|
||
Inventories
|
(29,703
|
)
|
|
20,216
|
|
||
Prepaid expenses and other assets
|
(11,424
|
)
|
|
545
|
|
||
Accounts payable, accrued expenses and other liabilities
|
(997
|
)
|
|
(39,161
|
)
|
||
Net cash provided by operating activities
|
2,008
|
|
|
38,950
|
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Purchases of property, plant and equipment
|
(7,773
|
)
|
|
(10,776
|
)
|
||
Proceeds from the sale of property, plant and equipment
|
269
|
|
|
1,186
|
|
||
Business acquisition, working capital adjustment
|
1,467
|
|
|
—
|
|
||
Net cash used in investing activities
|
(6,037
|
)
|
|
(9,590
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Proceeds from long-term debt
|
378,263
|
|
|
90,589
|
|
||
Payments of long-term debt
|
(361,325
|
)
|
|
(88,740
|
)
|
||
Debt issuance costs
|
(727
|
)
|
|
—
|
|
||
Dividends paid
|
(1,879
|
)
|
|
(1,873
|
)
|
||
Proceeds from the exercise of stock options
|
707
|
|
|
192
|
|
||
Tax effect of share-based plan compensation
|
—
|
|
|
(123
|
)
|
||
Net cash provided by financing activities
|
15,039
|
|
|
45
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
6,338
|
|
|
983
|
|
||
INCREASE IN CASH AND CASH EQUIVALENTS
|
17,348
|
|
|
30,388
|
|
||
Cash and cash equivalents at beginning of period
|
58,279
|
|
|
54,541
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
75,627
|
|
|
$
|
84,929
|
|
Non-cash investing activities:
|
|
|
|
||||
Purchases of property and equipment included in accounts payable and accrued expenses
|
$
|
1,400
|
|
|
$
|
848
|
|
Non-cash financing activities:
|
|
|
|
||||
Debt issuance costs funded through New Credit Agreement
|
$
|
1,262
|
|
|
$
|
—
|
|
|
October 1, 2017
|
|
December 31, 2016
|
||||
Raw materials
|
$
|
59,942
|
|
|
$
|
54,359
|
|
Work in process
|
98,667
|
|
|
68,718
|
|
||
Finished goods
|
21,676
|
|
|
26,507
|
|
||
Total inventories
|
$
|
180,285
|
|
|
$
|
149,584
|
|
(in thousands)
|
|
||
Cash and cash equivalents
|
$
|
6,603
|
|
Accounts receivable
|
28,128
|
|
|
Unbilled receivable
|
10,786
|
|
|
Inventory
|
18,701
|
|
|
Prepaid and other current assets
|
5,671
|
|
|
Property, plant and equipment
|
21,214
|
|
|
Identifiable intangible assets
|
101,600
|
|
|
Accounts payable
|
(11,655
|
)
|
|
Accrued and other expenses
|
(8,866
|
)
|
|
Deferred revenue
|
(3,997
|
)
|
|
Deferred income taxes
|
(40,645
|
)
|
|
Long term income tax payable
|
(556
|
)
|
|
Total identifiable net assets
|
$
|
126,984
|
|
Goodwill
|
89,473
|
|
|
Total purchase price
|
$
|
216,457
|
|
|
Intangible assets acquired (in thousands)
|
|
Weighted average amortization period (in years)
|
||
Customer relationship
|
$
|
49,600
|
|
|
14
|
Existing technology
|
25,800
|
|
|
10
|
|
Trade name
|
24,100
|
|
|
Indefinite
|
|
Aftermarket backlog
|
2,100
|
|
|
1
|
|
Total intangible assets
|
$
|
101,600
|
|
|
|
|
Energy
|
|
Advanced Flow Solutions
|
|
Total
|
||||||
Goodwill as of December 31, 2016
|
$
|
144,405
|
|
|
$
|
62,254
|
|
|
$
|
206,659
|
|
Business acquisition, working capital adjustments
|
(3,756
|
)
|
|
—
|
|
|
(3,756
|
)
|
|||
Currency translation adjustments
|
2,670
|
|
|
5,112
|
|
|
7,782
|
|
|||
Goodwill as of October 1, 2017
|
$
|
143,319
|
|
|
$
|
67,366
|
|
|
$
|
210,685
|
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||
Patents
|
$
|
5,400
|
|
|
$
|
(5,400
|
)
|
Non-amortized intangibles (primarily trademarks and trade names)
|
39,617
|
|
|
—
|
|
||
Customer relationships
|
104,218
|
|
|
(38,757
|
)
|
||
Order backlog
|
7,534
|
|
|
(7,376
|
)
|
||
Acquired technology
|
28,305
|
|
|
(4,044
|
)
|
||
Other
|
5,392
|
|
|
(4,837
|
)
|
||
Total
|
$
|
190,466
|
|
|
$
|
(60,414
|
)
|
Net carrying value of intangible assets
|
$
|
130,052
|
|
|
|
|
Remainder of 2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
After 2021
|
||||||||||||
Estimated amortization expense
|
$
|
3,257
|
|
|
$
|
11,305
|
|
|
$
|
11,085
|
|
|
$
|
9,629
|
|
|
$
|
8,092
|
|
|
$
|
47,067
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||
|
October 1, 2017
|
|
October 2, 2016
|
|
October 1, 2017
|
|
October 2, 2016
|
|||||||||
Net revenues
|
|
|
|
|
|
|
|
|||||||||
Energy
|
$
|
92,613
|
|
|
$
|
68,901
|
|
|
$
|
255,334
|
|
|
$
|
233,046
|
|
|
Advanced Flow Solutions
|
67,080
|
|
|
65,932
|
|
|
200,797
|
|
|
198,977
|
|
|||||
Consolidated net revenues
|
159,693
|
|
|
134,833
|
|
|
456,131
|
|
|
432,023
|
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Segment Income
|
|
|
|
|
|
|
|
|||||||||
Energy - Segment Operating Income
|
7,397
|
|
|
6,755
|
|
|
23,118
|
|
|
25,343
|
|
|||||
Advanced Flow Solutions - Segment Operating Income
|
9,548
|
|
|
8,008
|
|
|
25,845
|
|
|
24,524
|
|
|||||
Corporate expenses
|
(5,067
|
)
|
|
(6,522
|
)
|
|
(15,942
|
)
|
|
(18,441
|
)
|
|||||
Subtotal
|
11,877
|
|
|
8,241
|
|
|
33,021
|
|
|
31,426
|
|
|||||
Restructuring charges, net
|
341
|
|
|
2,252
|
|
|
5,366
|
|
|
6,674
|
|
|||||
Special charges (recoveries), net
|
1,978
|
|
|
379
|
|
|
(5,809
|
)
|
|
2,491
|
|
|||||
Special and restructuring charges (recoveries), net
|
2,319
|
|
|
2,631
|
|
|
(443
|
)
|
|
9,165
|
|
|||||
Restructuring related inventory charges
|
—
|
|
|
—
|
|
|
—
|
|
|
2,032
|
|
|||||
Impairment charges
|
—
|
|
|
208
|
|
|
—
|
|
726
|
|
208
|
|
||||
Acquisition amortization
|
2,694
|
|
|
1,888
|
|
|
7,843
|
|
—
|
|
5,667
|
|
||||
Restructuring and other cost, net
|
2,694
|
|
|
2,096
|
|
|
7,843
|
|
|
7,907
|
|
|||||
Consolidated Operating Income
|
6,864
|
|
|
3,513
|
|
|
25,622
|
|
|
14,355
|
|
|||||
Interest Expense, net
|
2,445
|
|
|
605
|
|
|
6,298
|
|
|
1,841
|
|
|||||
Other Expense (income), net
|
823
|
|
|
163
|
|
|
2,022
|
|
|
(914
|
)
|
|||||
Income from continuing operations before income taxes
|
$
|
3,596
|
|
|
$
|
2,745
|
|
|
$
|
17,302
|
|
|
$
|
13,428
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Identifiable assets
|
October 1, 2017
|
|
December 31, 2016
|
|
|
|
|
|||||||||
Energy
|
$
|
690,572
|
|
|
$
|
658,749
|
|
|
|
|
|
|||||
Advanced Flow Solutions
|
421,128
|
|
|
407,035
|
|
|
|
|
|
|||||||
Corporate
|
(232,669
|
)
|
|
(245,028
|
)
|
|
|
|
|
|||||||
Consolidated identifiable assets
|
$
|
879,031
|
|
|
$
|
820,756
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
(in thousands, except per share amounts)
|
Three Months Ended
|
||||||||||||||||||||
|
October 1, 2017
|
|
October 2, 2016
|
||||||||||||||||||
|
Net
Income
|
|
Shares
|
|
Per Share
Amount
|
|
Net
Income
|
|
Shares
|
|
Per Share
Amount
|
||||||||||
Basic EPS
|
$
|
3,617
|
|
|
16,503
|
|
|
$
|
0.22
|
|
|
$
|
4,418
|
|
|
16,427
|
|
|
$
|
0.27
|
|
Dilutive securities, common stock options
|
—
|
|
|
206
|
|
|
—
|
|
|
—
|
|
|
202
|
|
|
—
|
|
||||
Diluted EPS
|
$
|
3,617
|
|
|
16,709
|
|
|
$
|
0.22
|
|
|
$
|
4,418
|
|
|
16,629
|
|
|
$
|
0.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Nine Months Ended
|
||||||||||||||||||||
|
October 1, 2017
|
|
October 2, 2016
|
||||||||||||||||||
|
Net
Income
|
|
Shares
|
|
Per Share
Amount
|
|
Net
Income
|
|
Shares
|
|
Per Share
Amount
|
||||||||||
Basic EPS
|
$
|
17,359
|
|
|
16,486
|
|
|
$
|
1.05
|
|
|
$
|
12,103
|
|
|
16,411
|
|
|
$
|
0.74
|
|
Dilutive securities, common stock options
|
—
|
|
|
235
|
|
|
(0.01
|
)
|
|
—
|
|
|
157
|
|
|
(0.01
|
)
|
||||
Diluted EPS
|
$
|
17,359
|
|
|
16,721
|
|
|
$
|
1.04
|
|
|
$
|
12,103
|
|
|
16,568
|
|
|
$
|
0.73
|
|
Balance beginning December 31, 2016
|
$
|
4,559
|
|
Provisions
|
2,459
|
|
|
Claims settled
|
(3,810
|
)
|
|
Currency translation adjustment
|
167
|
|
|
Balance ending October 1, 2017
|
$
|
3,375
|
|
Term Remaining
|
Maximum Potential
Future Payments
|
||
0–12 months
|
$
|
11,709
|
|
Greater than 12 months
|
28,724
|
|
|
Total
|
$
|
40,433
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
October 1, 2017
|
|
October 2, 2016
|
|
October 1, 2017
|
|
October 2, 2016
|
||||||||
Interest cost on benefits obligation
|
$
|
426
|
|
|
$
|
574
|
|
|
$
|
1,278
|
|
|
$
|
1,721
|
|
Estimated return on assets
|
(576
|
)
|
|
(664
|
)
|
|
(1,726
|
)
|
|
(1,991
|
)
|
||||
Loss amortization
|
184
|
|
|
226
|
|
|
551
|
|
|
679
|
|
||||
Net periodic cost of defined benefit pension plans
|
$
|
34
|
|
|
$
|
136
|
|
|
$
|
103
|
|
|
$
|
409
|
|
|
October 1, 2017
|
|
October 2, 2016
|
||
Risk-free interest rate
|
1.7
|
%
|
|
1.2
|
%
|
Expected life (years)
|
4.5
|
|
|
4.5
|
|
Expected stock volatility
|
35.1
|
%
|
|
36.2
|
%
|
Expected dividend yield
|
0.3
|
%
|
|
0.4
|
%
|
|
Foreign Currency Translation Adjustments
|
|
Pension, net
|
|
Total
|
||||||
Balance as of December 31, 2016
|
$
|
(62,703
|
)
|
|
$
|
(13,558
|
)
|
|
$
|
(76,262
|
)
|
Other comprehensive income, net of tax
|
28,091
|
|
|
—
|
|
|
28,091
|
|
|||
Balance as of October 1, 2017
|
$
|
(34,612
|
)
|
|
$
|
(13,558
|
)
|
|
$
|
(48,170
|
)
|
|
Special & Restructuring Charges (Recoveries), net
|
||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
October 1, 2017
|
|
October 2, 2016
|
|
October 1, 2017
|
|
October 2, 2016
|
||||||||
Special charges (recoveries), net
|
$
|
1,978
|
|
|
$
|
379
|
|
|
$
|
(5,809
|
)
|
|
$
|
2,491
|
|
Restructuring charges, net
|
341
|
|
|
2,252
|
|
|
5,366
|
|
|
6,674
|
|
||||
Total special and restructuring charges (recoveries), net
|
$
|
2,319
|
|
|
$
|
2,631
|
|
|
$
|
(443
|
)
|
|
$
|
9,165
|
|
|
Special Charges, net
|
||||||||||||||
|
For the three months ended October 1, 2017
|
||||||||||||||
|
Energy
|
|
Advanced Flow Solutions
|
|
Corporate
|
|
Total
|
||||||||
Acquisition related charges
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,786
|
|
|
$
|
1,786
|
|
Brazil closure
|
192
|
|
|
—
|
|
|
—
|
|
|
192
|
|
||||
Total special charges, net
|
$
|
192
|
|
|
$
|
—
|
|
|
$
|
1,786
|
|
|
$
|
1,978
|
|
|
Special (Recoveries) Charges, net
|
||||||||||||||
|
For the nine months ended October 1, 2017
|
||||||||||||||
|
Energy
|
|
Advanced Flow Solutions
|
|
Corporate
|
|
Total
|
||||||||
Acquisition related charges
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,923
|
|
|
$
|
1,923
|
|
Brazil closure
|
619
|
|
|
—
|
|
|
—
|
|
|
619
|
|
||||
Divestiture
|
—
|
|
|
3,748
|
|
|
101
|
|
|
3,849
|
|
||||
Contingent consideration revaluation
|
(12,200
|
)
|
|
—
|
|
|
—
|
|
|
(12,200
|
)
|
||||
Total special (recoveries) charges, net
|
$
|
(11,581
|
)
|
|
$
|
3,748
|
|
|
$
|
2,024
|
|
|
$
|
(5,809
|
)
|
•
|
On October 12, 2016, we acquired CFS. In connection with our acquisition, we recorded
$0.1 million
of acquisition related professional fees during the nine months ended October 1, 2017.
No
CFS professional fees were recorded during the three months ended October 1, 2017.
|
•
|
On September 24, 2017, we entered into the Purchase Agreement to purchase FH. In connection with the Purchase Agreement, we recorded
$1.8 million
of acquisition related professional fees, primarily for legal services, during the three and nine months ended October 1, 2017.
|
|
Special Charges, net
|
||||||||||||||
|
For the three months ended October 2, 2016
|
||||||||||||||
|
Energy
|
|
Advanced Flow Solutions
|
|
Corporate
|
|
Total
|
||||||||
Brazil Closure
|
$
|
379
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
379
|
|
Total special charges, net
|
$
|
379
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
379
|
|
|
Special Charges (Recoveries), net
|
||||||||||||||
|
For the nine months ended October 2, 2016
|
||||||||||||||
|
Energy
|
|
Advanced Flow Solutions
|
|
Corporate
|
|
Total
|
||||||||
Acquisition related recoveries
|
$
|
(161
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(161
|
)
|
Brazil Closure
|
2,650
|
|
|
—
|
|
|
2
|
|
|
2,652
|
|
||||
Total special charges (recoveries), net
|
$
|
2,489
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
2,491
|
|
|
Restructuring Charges (Recoveries), net
|
||||||||||||||
|
As of and for the three months ended October 1, 2017
|
||||||||||||||
|
Energy
|
|
Advanced Flow Solutions
|
|
Corporate
|
|
Total
|
||||||||
Facility related expenses
|
$
|
227
|
|
|
$
|
165
|
|
|
$
|
—
|
|
|
$
|
392
|
|
Employee related (recoveries) expenses, net
|
(89
|
)
|
|
38
|
|
|
—
|
|
|
(51
|
)
|
||||
Total restructuring charges, net
|
$
|
138
|
|
|
$
|
203
|
|
|
$
|
—
|
|
|
$
|
341
|
|
|
|
|
|
|
|
|
|
||||||||
Accrued restructuring charges as of July 2, 2017
|
|
|
|
|
|
|
$
|
2,118
|
|
||||||
Total year to date charges, net (shown above)
|
|
|
|
|
|
|
341
|
|
|||||||
Charges paid / settled, net
|
|
|
|
|
|
|
(592
|
)
|
|||||||
Accrued restructuring charges as of October 1, 2017
|
|
|
|
|
|
|
$
|
1,867
|
|
|
Restructuring Charges (Recoveries), net
|
||||||||||||||
|
As of and for the nine months ended October 1, 2017
|
||||||||||||||
|
Energy
|
|
Advanced Flow Solutions
|
|
Corporate
|
|
Total
|
||||||||
Facility related expenses
|
$
|
2,221
|
|
|
$
|
497
|
|
|
$
|
—
|
|
|
$
|
2,718
|
|
Employee related expenses
|
886
|
|
|
1,762
|
|
|
—
|
|
|
2,648
|
|
||||
Total restructuring charges, net
|
$
|
3,107
|
|
|
$
|
2,259
|
|
|
$
|
—
|
|
|
$
|
5,366
|
|
|
|
|
|
|
|
|
|
||||||||
Accrued restructuring charges as of December 31, 2016
|
|
|
|
|
|
|
$
|
1,618
|
|
||||||
Total year to date charges, net (shown above)
|
|
|
|
|
|
|
5,366
|
|
|||||||
Charges paid / settled, net
|
|
|
|
|
|
|
(5,117
|
)
|
|||||||
Accrued restructuring charges as of October 1, 2017
|
|
|
|
|
|
|
$
|
1,867
|
|
|
Restructuring Charges (Recoveries), net
|
||||||||||||||
|
As of and for the three months ended October 2, 2016
|
||||||||||||||
|
Energy
|
|
Advanced Flow Solutions
|
|
Corporate
|
|
Total
|
||||||||
Facility related expenses
|
$
|
336
|
|
|
$
|
454
|
|
|
$
|
—
|
|
|
$
|
790
|
|
Employee related expenses
|
757
|
|
|
705
|
|
|
—
|
|
|
1,462
|
|
||||
Total restructuring charges, net
|
$
|
1,093
|
|
|
$
|
1,159
|
|
|
$
|
—
|
|
|
$
|
2,252
|
|
|
|
|
|
|
|
|
|
||||||||
Accrued restructuring charges as of July 3, 2016
|
|
|
|
|
|
|
$
|
691
|
|
||||||
Total year to date charges, net (shown above)
|
|
|
|
|
|
|
2,252
|
|
|||||||
Charges paid / settled, net
|
|
|
|
|
|
|
(1,473
|
)
|
|||||||
Accrued restructuring charges as of October 2, 2016
|
|
|
|
|
|
|
$
|
1,470
|
|
|
Restructuring Charges (Recoveries), net
|
||||||||||||||
|
As of and for the nine months ended October 2, 2016
|
||||||||||||||
|
Energy
|
|
Advanced Flow Solutions
|
|
Corporate
|
|
Total
|
||||||||
Facility related (recoveries) expenses
|
$
|
(153
|
)
|
|
$
|
3,922
|
|
|
$
|
—
|
|
|
$
|
3,769
|
|
Employee related expenses
|
1,493
|
|
|
1,412
|
|
|
—
|
|
|
2,905
|
|
||||
Total restructuring charges, net
|
$
|
1,340
|
|
|
$
|
5,334
|
|
|
$
|
—
|
|
|
$
|
6,674
|
|
|
|
|
|
|
|
|
|
||||||||
Accrued restructuring charges as of December 31, 2015
|
|
|
|
|
|
|
$
|
663
|
|
||||||
Total year to date charges, net (shown above)
|
|
|
|
|
|
|
6,674
|
|
|||||||
Charges paid / settled, net
|
|
|
|
|
|
|
(5,867
|
)
|
|||||||
Accrued restructuring charges as of October 2, 2016
|
|
|
|
|
|
|
$
|
1,470
|
|
|
2017 Actions Restructuring Charges (Recoveries), net as of October 1, 2017
|
||||||||||
|
Energy
|
|
Advanced Flow Solutions
|
|
Total
|
||||||
Facility related expenses - incurred to date
|
$
|
—
|
|
|
$
|
366
|
|
|
$
|
366
|
|
Employee related expenses - incurred to date
|
463
|
|
|
1,592
|
|
|
2,055
|
|
|||
Total restructuring related special charges - incurred to date
|
$
|
463
|
|
|
$
|
1,958
|
|
|
$
|
2,421
|
|
|
2016 Actions Restructuring Charges (Recoveries), net as of October 1, 2017
|
||||||||||
|
Energy
|
|
Advanced Flow Solutions
|
|
Total
|
||||||
Facility related expenses - incurred to date
|
$
|
2,928
|
|
|
$
|
256
|
|
|
$
|
3,184
|
|
Employee related expenses - incurred to date
|
2,882
|
|
|
1,347
|
|
|
4,229
|
|
|||
Total restructuring related special charges - incurred to date
|
$
|
5,810
|
|
|
$
|
1,603
|
|
|
$
|
7,413
|
|
|
California Restructuring Charges, net as of October 1, 2017
|
||
|
Advanced Flow Solutions
|
||
Facility related expenses - incurred to date
|
$
|
3,700
|
|
Employee related expenses - incurred to date
|
800
|
|
|
Total restructuring related special charges - incurred to date
|
$
|
4,500
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
||||||||||||||
(in thousands)
|
October 1, 2017
|
|
October 2, 2016
|
|
Total Change
|
|
Acquisitions
|
|
Operations
|
|
Foreign Exchange
|
||||||||||||
Net Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Energy
|
$
|
92,613
|
|
|
$
|
68,901
|
|
|
$
|
23,712
|
|
|
$
|
19,312
|
|
|
$
|
3,206
|
|
|
$
|
1,194
|
|
Advanced Flow Solutions
|
67,080
|
|
|
65,932
|
|
|
1,148
|
|
|
—
|
|
|
(34
|
)
|
|
1,182
|
|
||||||
Consolidated Net Revenues
|
$
|
159,693
|
|
|
$
|
134,833
|
|
|
$
|
24,860
|
|
|
$
|
19,312
|
|
|
$
|
3,172
|
|
|
$
|
2,376
|
|
|
Three Months Ended
|
|
|
||||||||
(in thousands, except percentages)
|
October 1, 2017
|
|
October 2, 2016
|
|
Change
|
||||||
Net Revenues
|
$
|
92,613
|
|
|
$
|
68,901
|
|
|
$
|
23,712
|
|
Segment Operating Income
|
7,397
|
|
|
6,755
|
|
|
642
|
|
|||
Segment Operating Margin
|
8.0
|
%
|
|
9.8
|
%
|
|
|
|
Three Months Ended
|
|
|
||||||||
(in thousands, except percentages)
|
October 1, 2017
|
|
October 2, 2016
|
|
Change
|
||||||
Net Revenues
|
$
|
67,080
|
|
|
$
|
65,932
|
|
|
$
|
1,148
|
|
Segment Operating Income
|
9,548
|
|
|
8,008
|
|
|
1,540
|
|
|||
Segment Operating Margin
|
14.2
|
%
|
|
12.1
|
%
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
|
||||||||||||||
(in thousands)
|
October 1, 2017
|
|
October 2, 2016
|
|
Total Change
|
|
Acquisitions
|
|
Operations
|
|
Foreign Exchange
|
||||||||||||
Net Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Energy
|
$
|
255,334
|
|
|
$
|
233,046
|
|
|
$
|
22,288
|
|
|
$
|
62,032
|
|
|
$
|
(39,497
|
)
|
|
$
|
(247
|
)
|
Advanced Flow Solutions
|
200,797
|
|
|
198,977
|
|
|
1,820
|
|
|
—
|
|
|
3,679
|
|
|
(1,858
|
)
|
||||||
Consolidated Net Revenues
|
$
|
456,131
|
|
|
$
|
432,023
|
|
|
$
|
24,108
|
|
|
$
|
62,032
|
|
|
$
|
(35,818
|
)
|
|
$
|
(2,105
|
)
|
|
Nine Months Ended
|
|
|
||||||||
(in thousands, except percentages)
|
October 1, 2017
|
|
October 2, 2016
|
|
Change
|
||||||
Net Revenues
|
|
|
|
|
|
||||||
Energy
|
$
|
255,334
|
|
|
$
|
233,046
|
|
|
$
|
22,288
|
|
Advanced Flow Solutions
|
200,797
|
|
|
198,977
|
|
|
1,820
|
|
|||
Consolidated net revenues
|
$
|
456,131
|
|
|
$
|
432,023
|
|
|
$
|
24,108
|
|
Operating Income
|
|
|
|
|
|
||||||
Energy - Segment Operating Income
|
$
|
23,118
|
|
|
$
|
25,343
|
|
|
$
|
(2,225
|
)
|
Advanced Flow Solutions - Segment Operating Income
|
25,846
|
|
|
24,524
|
|
|
1,322
|
|
|||
Corporate expenses
|
(15,942
|
)
|
|
(18,441
|
)
|
|
2,499
|
|
|||
Subtotal
|
33,022
|
|
|
31,426
|
|
|
1,596
|
|
|||
Restructuring charges, net
|
5,366
|
|
|
6,674
|
|
|
(1,308
|
)
|
|||
Special (recoveries) charges, net
|
(5,809
|
)
|
|
2,491
|
|
|
(8,300
|
)
|
|||
Special and restructuring (recoveries) charges, net (1)
|
(443
|
)
|
|
9,165
|
|
|
(9,608
|
)
|
|||
Restructuring related inventory charges (1)
|
—
|
|
|
2,033
|
|
|
(2,033
|
)
|
|||
Impairment charges
|
—
|
|
|
208
|
|
|
(208
|
)
|
|||
Acquisition amortization (2)
|
7,844
|
|
|
5,667
|
|
|
2,177
|
|
|||
Restructuring and other cost, net
|
7,844
|
|
|
7,908
|
|
|
(64
|
)
|
|||
Consolidated Operating Income
|
$
|
25,621
|
|
|
$
|
14,353
|
|
|
$
|
11,268
|
|
|
|
|
|
|
|
||||||
Consolidated Operating Margin
|
5.6
|
%
|
|
3.3
|
%
|
|
|
||||
|
|
|
|
|
|
||||||
(1) See Special & Restructuring Charges (Recoveries), net in Note 15 to the condensed consolidated financial statements, for additional details.
|
|||||||||||
(2) Acquisition amortization is recorded in either cost of revenues or selling, general, and administrative expenses depending upon the nature of the underlying intangible asset.
|
|
Nine Months Ended
|
|
|
||||||||
(in thousands, except percentages)
|
October 1, 2017
|
|
October 2, 2016
|
|
Change
|
||||||
Net Revenues
|
$
|
255,334
|
|
|
$
|
233,046
|
|
|
$
|
22,288
|
|
Segment Operating Income
|
23,118
|
|
|
25,343
|
|
|
(2,225
|
)
|
|||
Segment Operating Margin
|
9.1
|
%
|
|
10.9
|
%
|
|
|
|
Nine Months Ended
|
|
|
||||||||
(in thousands, except percentages)
|
October 1, 2017
|
|
October 2, 2016
|
|
Change
|
||||||
Net Revenues
|
$
|
200,797
|
|
|
$
|
198,977
|
|
|
$
|
1,820
|
|
Segment Operating Income
|
25,846
|
|
|
24,524
|
|
|
1,322
|
|
|||
Segment Operating Margin
|
12.9
|
%
|
|
12.3
|
%
|
|
|
•
|
During 2016 and 2017, we initiated certain restructuring activities, under which we continue to simplify our business ("2016 Actions" and "2017 Actions", respectively). Under these restructurings, we reduced expenses, primarily through reductions in force and closing a number of smaller facilities.
|
•
|
In July 2015, we announced the closure of one of the two Corona, California manufacturing facilities ("California
|
|
Cumulative Planned Savings
|
|
Cumulative Projected Savings
|
|
Expected Periods of Savings Realization
|
||||
2017 Actions
|
$
|
6.9
|
|
|
$
|
6.9
|
|
|
Q2 2017 - Q4 2018
|
2016 Actions
|
14.1
|
|
|
13.3
|
|
|
Q2 2016 - Q4 2017
|
||
California Restructuring
|
3.0
|
|
|
3.0
|
|
|
Q3 2016 - Q4 2017
|
||
Total Savings
|
$
|
24.0
|
|
|
$
|
23.2
|
|
|
|
|
October 1, 2017
|
|
October 2, 2016
|
||||
Cash flow provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
2,008
|
|
|
$
|
38,950
|
|
Investing activities
|
(6,037
|
)
|
|
(9,590
|
)
|
||
Financing activities
|
15,039
|
|
|
45
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
6,338
|
|
|
983
|
|
||
Increase in cash and cash equivalents
|
$
|
17,348
|
|
|
$
|
30,388
|
|
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.
|
|
|
October 27, 2017
|
/s/ Scott A. Buckhout
|
|
Scott A. Buckhout
|
|
President and Chief Executive Officer
|
|
Principal Executive Officer
|
|
|
October 27, 2017
|
/s/ Rajeev Bhalla
|
|
Rajeev Bhalla
|
|
Executive Vice President, Chief Financial Officer
|
|
Principal Financial Officer
|
|
|
October 27, 2017
|
/s/ David F. Mullen
|
|
David F. Mullen
|
|
Vice President and Corporate Controller
|
|
Principal Accounting Officer
|
1 Year CIRCOR Chart |
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