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CIRCOR Reports Third-Quarter 2012 Financial Results

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BURLINGTON, Mass.--(BUSINESS WIRE)--

CIRCOR International, Inc. (NYSE: CIR), a leading provider of valves and other highly engineered products for the energy, aerospace and industrial markets, today announced financial results for the third quarter ended September 30, 2012.

“We are pleased with our excellent performance in the third quarter driven by margin improvement and the continued execution of our growth strategy,” said Chairman and Chief Executive Officer Bill Higgins. “Our Energy segment continues to improve execution operationally and in international projects where we continue to grow and where we achieved favorable closure on several completed projects. In addition, Flow Technologies continued to deliver strong operating margins.”

“During the quarter we continued to focus on our growth strategy in the oil & gas, power generation and aerospace markets,” continued Higgins. “We have been attracting top talent across the organization, improving operations with Lean and operational excellence, and enhancing our competitive position by building our global supply chain and manufacturing footprint around the world to service global customers.”

CIRCOR also announced that it is taking several repositioning actions over the next three quarters to enhance profitability, including consolidating facilities, shifting supply to lower cost regions and exiting certain non-strategic product lines. CIRCOR's third-quarter results include charges associated with these repositioning actions, and the Company expects further charges in the fourth quarter of 2012 and the first half of 2013. The Company anticipates annualized pre-tax savings from these actions to be approximately $7 million with a favorable margin impact in the range of 100 basis points, to be fully realized in the second half of 2013.

“As a result of our Lean and operational excellence initiatives, the efficiencies we have gained in our operations has and will enable us to consolidate facilities and drive margin expansion,” said Higgins. “We believe CIRCOR is well positioned to continue to grow revenue, expand margins and deliver enhanced shareholder value.”

Consolidated Results

Revenues of $209.8 million for the third quarter of 2012 were flat compared with the previous year. Net income for the third quarter of 2012 was $1.9 million, or $0.11 per diluted share, which includes special and impairment charges of $1.4 million and $10.3 million, respectively, as well as repositioning related inventory charges of $4.1 million, compared with net income of $10.9 million, or $0.63 per diluted share, for the third quarter of 2011, which included a benefit of $0.2 million in Leslie asbestos and bankruptcy charges. Excluding the charges from both periods, adjusted earnings per diluted share for the third quarter of 2012 increased 22% to $0.76 from $0.62 in the year-earlier quarter.

Excluding the charges in both periods, adjusted operating income was $18.5 million for the third quarter of 2012 compared with $15.7 million in the third quarter of 2011, an increase of 18%.

The Company received orders totaling $225.5 million during the third quarter of 2012, a decrease of 1% compared with the third quarter of 2011. Backlog as of September 30, 2012 was $444.3 million, up 1% from backlog of $440.2 million at October 2, 2011.

During the third quarter of 2012, the Company generated $18.7 million of free cash flow (defined as net cash from operating activities less capital expenditures). This compares with $5.2 million of free cash flow used in the third quarter of 2011.

Energy

Energy segment revenues increased 6% to $110.0 million for the third quarter of 2012 from $103.3 million for the third quarter of 2011 across most markets. The segment reported increases in the short-cycle North American and large international project businesses, partially offset by lower pipeline shipments as well as unfavorable foreign currency fluctuations of $5.1 million.

Incoming orders for the third quarter of 2012 were $118.1 million, an increase of 26% year-over-year primarily due to higher international project and North American short-cycle orders. Ending backlog totaled $210.4 million, an increase of 4% year-over-year. The increase in backlog was primarily due to higher order levels within our large international project business, partially offset by ongoing shipments of a large pipeline project booked in 2010.

For the third quarter of 2012, the Energy segment adjusted operating margin increased to 14.0% from 7.2% in the third quarter of 2011, primarily driven by favorable penalty reserve adjustments as CIRCOR closed several large international projects, improved pricing and increased volume with the associated leverage. Segment adjusted operating margin for the quarter excludes special and impairment charges of $1.1 million and $2.2 million, respectively, and repositioning related inventory charges of $0.9 million. The repositioning charges are related to the exiting of certain underperforming manufacturing operations and non-strategic product lines at the Company's Brazil operations.

Aerospace

Aerospace segment revenues decreased by 3% to $31.8 million for the third quarter of 2012 from $32.7 million in the third quarter of 2011. The decrease was primarily due to unfavorable foreign currency fluctuations of $1.0 million.

Incoming orders for the third quarter of 2012 were $42.9 million, a decrease of 32% year-over-year primarily due to lower landing gear orders in both commercial and military. Ending backlog totaled $162.7 million, an increase of 1% year-over-year.

The Aerospace segment's adjusted operating margin for the third quarter of 2012 decreased to 4.2% from 5.6% in the third quarter of 2011 primarily due to the timing of operating expenses as well as investments in future programs. Segment adjusted operating margin excludes special and impairment charges of $0.2 million and $8.2 million, respectively, and repositioning related inventory charges of $3.2 million. The charges in the third quarter of 2012 are related to exiting certain low margin product lines, as well as the repositioning of certain landing gear operations and manufacturing activities within California.

Flow Technologies

Flow Technologies segment revenues decreased 8% to $68.0 million for the third quarter of 2012 from $74.0 million in the third quarter of 2011. Third-quarter 2012 Flow Technologies segment revenues reflected an organic decline of $4.4 million and unfavorable foreign currency fluctuations of $1.5 million. The organic revenue decline was primarily due to lower LED equipment shipments, partially offset by organic growth across most other businesses.

Incoming orders for the Flow Technologies segment were $64.5 million for the third quarter of 2012, a decrease of 9% year-over-year, primarily due to weakness in the LED equipment market. Ending backlog totaled $71.2 million, a decrease of 8% year-over-year driven by the shipment of Navy backlog and lower LED equipment orders.

The segment's adjusted operating margin for the third quarter of 2012 decreased to 13.1% from 13.6% in the third quarter of 2011, primarily due to lower volume and associated leverage and growth investments partially offset by favorable mix and reduced spending.

Financial Outlook

As part of its repositioning actions, CIRCOR expects to incur pretax charges in the range of $3.0 million to $3.5 million, or $0.16 to $0.19 per diluted share, during the fourth quarter of 2012.

CIRCOR currently expects revenues for the fourth quarter of 2012 in the range of $203 million to $212 million. Excluding repositioning charges, adjusted earnings for the fourth quarter are expected to be in the range of $0.50 to $0.62 per diluted share. CIRCOR's guidance for adjusted earnings per share assumes a 30% tax rate on adjusted earnings. It also assumes that exchange rates remain at present levels.

Conference Call Information

CIRCOR International will hold a conference call to review its financial results today, November 1, 2012, at 10:00 a.m. ET. Those who wish to listen to the conference call and view the accompanying presentation slides should visit “Webcasts & Presentations” in the “Investors” portion of the CIRCOR website. The live call also can be accessed by dialing (877) 407-5790 or (201) 689-8328. If you are unable to listen to the live call, 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 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 fourth-quarter revenue and earnings guidance and estimated total annualized pre-tax savings from repositioning 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 valves and other highly engineered products for the energy, aerospace and industrial markets. With more than 7,500 customers in over 100 countries, CIRCOR has a diversified product portfolio with recognized, market-leading brands. CIRCOR's culture, built on the CIRCOR Business System, is defined by the Company's commitment to attracting, developing and retaining the best talent and pursuing continuous improvement in all aspects of its business and operations. The Company's strategy includes growing organically by investing in new, differentiated products; adding value to component products; and increasing the development of mission-critical subsystems and solutions. CIRCOR also plans to leverage its strong balance sheet to acquire strategically complementary businesses. For more information, visit the Company's investor relations web site at http://investors.circor.com.

 

CIRCOR INTERNATIONAL, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands, except per share data)

UNAUDITED

 
  Three Months Ended   Nine Months Ended

September 30, 2012

  October 2, 2011

September 30, 2012

  October 2, 2011
Net revenues $ 209,804 $ 209,961 $ 643,946 $ 605,239
Cost of revenues 151,109   154,774   462,823   439,218  
GROSS PROFIT 58,695 55,187 181,123 166,021
Selling, general and administrative expenses 44,314 39,448 134,562 124,083
Leslie asbestos and bankruptcy (recoveries) charges, net (201 ) 676
Impairment charges 10,348 10,348
Special charges 1,377     1,377    
OPERATING INCOME 2,656   15,940   34,836   41,262  
Other (income) expense:
Interest income (101 ) (69 ) (262 ) (166 )
Interest expense 1,223 956 3,482 3,058
Other, net 564   354   887   1,830  
TOTAL OTHER EXPENSE 1,686   1,241   4,107   4,722  
INCOME BEFORE INCOME TAXES 970 14,699 30,729 36,540
(Benefit) provision for income taxes (899 ) 3,752   9,138   10,191  
NET INCOME $ 1,869   $ 10,947   $ 21,591   $ 26,349  
Earnings per common share:
Basic $ 0.11 $ 0.63 $ 1.24 $ 1.53
Diluted $ 0.11 $ 0.63 $ 1.24 $ 1.51
Weighted average number of common shares outstanding:
Basic 17,433 17,266 17,391 17,226
Diluted 17,467 17,423 17,436 17,412
 
 

CIRCOR INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(UNAUDITED)

 
  Nine Months Ended

September 30, 2012

 

October 2, 2011

OPERATING ACTIVITIES  
Net income $ 21,591 $ 26,349
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation 11,765 11,265
Amortization 2,823 3,293
Impairment charges 10,348
Payment for Leslie bankruptcy settlement (1,000 ) (76,625 )
Compensation expense of share-based plans 3,409 3,007
Tax effect of share-based compensation 573 (649 )
Loss (gain) on property, plant and equipment 1,148 (68 )
Changes in operating assets and liabilities, net of effects from business acquisitions:
Trade accounts receivable (123 ) (1,249 )
Inventories 8,586 (43,901 )
Prepaid expenses and other assets (2,110 ) (9,453 )
Accounts payable, accrued expenses and other liabilities (26,178 ) 17,353  
Net cash provided by (used in) operating activities 30,832   (70,678 )
INVESTING ACTIVITIES
Additions to property, plant and equipment (14,097 ) (11,254 )
Proceeds from the sale of property, plant and equipment 200 84
Business acquisitions, net of cash acquired   (20,221 )
Net cash used in investing activities (13,897 ) (31,391 )
FINANCING ACTIVITIES
Proceeds from long-term debt 170,795 224,455
Payments of long-term debt (192,040 ) (126,269 )
Debt issuance costs (2,001 )
Dividends paid (1,997 ) (1,987 )
Proceeds from the exercise of stock options 348 496
Tax effect of share-based compensation (573 ) 649  
Net cash (used in) provided by financing activities (23,467 ) 95,343  
Effect of exchange rate changes on cash and cash equivalents 653   228  
DECREASE IN CASH AND CASH EQUIVALENTS (5,879 ) (6,498 )
Cash and cash equivalents at beginning of period 54,855   45,752  
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 48,976   $ 39,254  
 
 

CIRCOR INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

UNAUDITED

 
 

September 30, 2012

 

December 31, 2011

ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 48,976 $ 54,855
Short-term investments 102 99
Trade accounts receivable, less allowance for doubtful accounts of $1,722 and $1,127, respectively 156,744 156,075
Inventories, net 194,644 203,777
Prepaid expenses and other current assets 14,768 12,376
Deferred income tax asset 15,795 16,320
Assets held for sale 542   542  
Total Current Assets 431,571   444,044  
PROPERTY, PLANT AND EQUIPMENT, NET 105,348 104,434
OTHER ASSETS:
Goodwill 77,411 77,829
Intangibles, net 45,677 58,442
Deferred income tax asset 28,073 27,949
Other assets 9,556   9,825  
TOTAL ASSETS $ 697,636   $ 722,523  
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 72,379 $ 92,493
Accrued expenses and other current liabilities 60,109 63,386
Accrued compensation and benefits 26,045 24,328
Asbestos liability 1,000
Income taxes payable 2,686 5,553
Notes payable and current portion of long-term debt 6,723   8,796  
Total Current Liabilities 167,942   195,556  
LONG-TERM DEBT, NET OF CURRENT PORTION 77,061 96,327
DEFERRED INCOME TAXES 10,196 11,284
OTHER NON-CURRENT LIABILITIES 34,117 35,271
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; 17,425,075 and 17,268,212 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively 174 173
Additional paid-in capital 262,045 258,209
Retained earnings 149,969 130,373
Accumulated other comprehensive loss (3,868 ) (4,670 )
Total Shareholders' Equity 408,320   384,085  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 697,636   $ 722,523  
 

CIRCOR INTERNATIONAL, INC.

SUMMARY OF ORDERS AND BACKLOG

(in millions)

UNAUDITED

 
  Three Months Ended   Nine Months Ended

September 30, 2012

 

October 2, 2011

September 30, 2012

 

October 2, 2011

ORDERS (1)
Energy $ 118.1 $ 93.6 $ 382.0 $ 310.6
Aerospace 42.9 62.8 111.6 129.1
Flow Technologies 64.5   70.9   207.8   222.6
Total orders $ 225.5   $ 227.3   $ 701.4   $ 662.3
 
BACKLOG (2)

September 30, 2012

October 2, 2011

Energy $ 210.4 $ 202.0
Aerospace 162.7 160.4
Flow Technologies 71.2   77.8  
Total backlog $ 444.3   $ 440.2  
 
Note 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.
 
 

CIRCOR INTERNATIONAL, INC.

SUMMARY REPORT BY SEGMENT

(in thousands, except earnings per share)

UNAUDITED

 
  2011   2012
1ST QTR   2ND QTR   3RD QTR   4TH QTR   TOTAL 1ST QTR   2ND QTR   3RD QTR   TOTAL
NET REVENUES
Energy $ 99,170 $ 81,994 $ 103,300 $ 110,228 $ 394,692 $ 109,264 $ 113,527 $ 109,968 $ 332,759
Aerospace 32,110 36,029 32,681 36,017 136,837 38,085 35,896 31,795 105,776
Flow Technologies 72,090   73,885   73,980   70,865   290,820   66,931   70,439   68,041   205,411  
Total 203,370   191,908   209,961   217,110   822,349   214,280   219,862   209,804   643,946  
* ADJUSTED OPERATING MARGIN
Energy 6.4 % 5.3 % 7.2 % 8.4 % 7.0 % 8.2 % 11.1 % 14.0 % 11.1 %
Aerospace 11.6 % 11.2 % 5.6 % 8.6 % 9.3 % 10.8 % 8.8 % 4.2 % 8.1 %
Flow Technologies 13.7 % 12.4 % 13.6 % 12.9 % 13.1 % 11.3 % 12.8 % 13.1 % 12.4 %
Segment operating margin 9.8 % 9.1 % 9.2 % 9.9 % 9.5 % 9.6 % 11.3 % 12.2 % 11.0 %
Corporate expenses (3.0 )% (2.7 )% (1.7 )% (3.0 )% (2.6 )% (3.2 )% (2.9 )% (3.4 )% (3.2 )%
* Adjusted operating margin 6.8 % 6.5 % 7.5 % 6.9 % 6.9 % 6.4 % 8.4 % 8.8 % 7.9 %
Leslie asbestos and bankruptcy charges (recoveries) 0.5 % (0.1 )% (0.1 )% 0.0 % 0.1 % 0.0 % 0.0 % 0.0 % 0.0 %
Repositioning inventory charges 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 2.0 % 0.6 %
Impairment charges 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 4.9 % 1.6 %
Special charges 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.7 % 0.2 %
Total operating margin 6.3 % 6.5 % 7.6 % 6.9 % 6.8 % 6.4 % 8.4 % 1.3 % 5.4 %
 
* ADJUSTED OPERATING INCOME
Energy 6,393 4,373 7,441 9,225 27,432 8,928 12,580 15,432 36,940
Aerospace 3,727 4,021 1,846 3,081 12,675 4,124 3,153 1,324 8,601
Flow Technologies 9,854   9,133   10,037   9,171   38,195   7,587   9,043   8,919   25,549  
Segment operating income 19,974 17,527 19,324 21,477 78,302 20,639 24,776 25,675 71,090
Corporate expenses (6,201 ) (5,100 ) (3,585 ) (6,441 ) (21,327 ) (6,939 ) (6,297 ) (7,170 ) (20,406 )
* Adjusted operating income 13,773 12,427 15,739 15,036 56,975 13,700 18,479 18,505 50,684
Leslie asbestos and bankruptcy charges (recoveries) 1,001 (124 ) (201 ) 676
Repositioning inventory charges 4,124 4,124
Impairment charges 10,348 10,348
Special charges               1,377   1,377  
Total operating income 12,772   12,551   15,940   15,036   56,299   13,700   18,479   2,656   34,835  
INTEREST EXPENSE, NET (773 ) (1,232 ) (887 ) (1,039 ) (3,930 ) (1,081 ) (1,017 ) (1,122 ) (3,220 )
OTHER EXPENSE, NET (915 ) (560 ) (354 ) (342 ) (2,171 ) (138 ) (184 ) (564 ) (887 )
PRETAX INCOME 11,084 10,759 14,699 13,655 50,197 12,481 17,278 970 30,729
(PROVISION) BENEFIT FOR INCOME TAXES (3,178 ) (3,261 ) (3,752 ) (3,370 ) (13,562 ) (3,896 ) (6,142 ) 899   (9,138 )
EFFECTIVE TAX RATE 28.7 % 30.3 % 25.5 % 24.7 % 27.0 % 31.2 % 35.5 % (92.8 )% 29.7 %
NET INCOME $ 7,906   $ 7,497   $ 10,947   $ 10,285   $ 36,635   $ 8,585   $ 11,136   $ 1,869   $ 21,591  
Weighted Average Common Shares Outstanding (Diluted) 17,378 17,434 17,423 17,435 17,417 17,390 17,451 17,467 17,436
EARNINGS PER COMMON SHARE (Diluted) $ 0.45   $ 0.43   $ 0.63   $ 0.59   $ 2.10   $ 0.49   $ 0.64   $ 0.11   $ 1.24  
ADJUSTED EBITDA $ 17,851   $ 16,564   $ 20,252   $ 19,572   $ 74,239   $ 18,534   $ 23,043   $ 22,809   $ 64,386  
ADJUSTED EBITDA AS A % OF SALES 8.8 % 8.6 % 9.6 % 9.0 % 9.0 % 8.6 % 10.5 % 10.9 % 10.0 %
CAPITAL EXPENDITURES $ 2,693   $ 4,770   $ 3,792   $ 6,647   $ 17,902   $ 4,122   $ 6,661   $ 3,314   $ 14,097  
 
* Adjusted Operating Income & Margin exclude Leslie asbestos and bankruptcy, inventory repositioning, impairment and special charges.
 
 

CIRCOR INTERNATIONAL, INC.

RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS

(in thousands, except earnings per share)

UNAUDITED

 
  2011   2012
1ST QTR   2ND QTR   3RD QTR   4TH QTR   TOTAL 1ST QTR   2ND QTR 3RD QTR   TOTAL
FREE CASH FLOW [NET CASH FLOW FROM OPERATING ACTIVITIES LESS CAPITAL EXPENDITURES] $ 525 $ (77,244 ) $ (5,214 ) $ 15,199 $ (66,734 ) $ (7,089 ) $ 5,077 $ 18,746 $ 16,734
ADD:
Capital Expenditures 2,693   4,770   3,792   6,647   17,902   4,122   6,661   3,314   14,097  
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ 3,218   $ (72,474 ) $ (1,422 ) $ 21,846   $ (48,832 ) $ (2,967 ) $ 11,738   $ 22,060   $ 30,831  
NET DEBT (CASH) [TOTAL DEBT LESS CASH & CASH EQUIVALENTS LESS INVESTMENTS] $ (22,554 ) $ 56,828 $ 64,145 $ 50,169 $ 50,169 $ 57,263 $ 54,376 $ 34,706 $ 34,706
ADD:
Cash & Cash Equivalents 53,491 48,302 39,254 54,855 54,855 41,291 41,414 48,976 48,976
Investments 99   107   98   99   99   101   98   102   102  
TOTAL DEBT $ 31,036   $ 105,237   $ 103,497   $ 105,123   $ 105,123   $ 98,655   $ 95,888   $ 83,784   $ 83,784  
DEBT AS % OF EQUITY 8 % 27 % 27 % 27 % 27 % 25 % 24 % 20 % 20 %
TOTAL DEBT 31,036   105,237   103,497   105,123   105,123   98,655   95,888   83,784   83,784  
TOTAL SHAREHOLDERS' EQUITY 374,706   385,833   384,296   384,085   384,085   399,018   397,957   409,016   409,016  
EBIT [NET INCOME LESS INCOME TAXES LESS INTEREST EXPENSE, NET] $ 11,857 $ 11,989 $ 15,586 $ 14,694 $ 54,126 $ 13,562 $ 18,295 $ 2,092 $ 33,949
LESS:
Interest expense, net (773 ) (1,232 ) (887 ) (1,039 ) (3,930 ) (1,081 ) (1,017 ) (1,122 ) (3,220 )

(Provision) benefit for income taxes

(3,178 ) (3,261 ) (3,752 ) (3,370 ) (13,562 ) (3,896 ) (6,142 ) 899   (9,138 )
NET INCOME $ 7,906   $ 7,496   $ 10,947   $ 10,285   $ 36,634   $ 8,585   $ 11,136  

$

1,869

 

$

21,591  
 

ADJUSTED OPERATING INCOME [OPERATING INCOME EXCLUDING LESLIE ASBESTOS AND BANKRUPTCY, INVENTORY REPOSITIONING, IMPAIRMENT AND SPECIAL CHARGES]

$ 13,773 $ 12,426 $ 15,739 $ 15,036 $ 56,974 $ 13,700 $ 18,479 $ 18,505 $ 50,684
LESS:
Leslie asbestos and bankruptcy charges (recoveries), net of tax 1,001 (124 ) (201 ) 676
Inventory repositioning charges, net of tax 4,124 4,124
Impairment charges, net of tax 10,348 10,348
Special charges, net of tax               1,377   1,377  
OPERATING INCOME $ 12,772   $ 12,550   $ 15,940   $ 15,036   $ 56,298   $ 13,700   $ 18,479   $ 2,656   $ 34,835  

ADJUSTED EARNINGS PER SHARE [EPS EXCLUDING LESLIE ASBESTOS AND BANKRUPTCY, INVENTORY REPOSITIONING, IMPAIRMENT AND SPECIAL CHARGES, NET OF TAX]

$ 0.49 $ 0.43 $ 0.62 $ 0.59 $ 2.13 $ 0.49 $ 0.64 $ 0.76 $ 1.89
LESS:
Leslie asbestos and bankruptcy charges (recoveries), net of tax $ 0.04 $ $ (0.01 ) $ $ 0.03 $ $ $ $
Inventory repositioning charges, net of tax $ $ $ $ $ $ $ $ 0.17 $ 0.17
Impairment charges, net of tax $ $ $ $ $ $ $ $ 0.42 $

0.42

Special charges, net of tax $   $   $   $   $   $   $   $ 0.06   $ 0.06  
EARNINGS PER COMMON SHARE (Diluted) $ 0.45   $ 0.43   $ 0.63   $ 0.59   $ 2.10   $ 0.49   $ 0.64   $ 0.11   $ 1.24  
 
EBITDA [NET INCOME LESS NET INTEREST EXPENSE, DEPRECIATION, AMORTIZATION AND INCOME TAXES] $ 16,850 $ 16,688 $ 20,453 $ 19,572 $ 73,562 $ 18,534 $ 23,043 $ 2,092 $ 48,537
LESS:
Interest expense, net (773 ) (1,232 ) (887 ) (1,039 ) (3,930 ) (1,081 ) (1,017 ) (1,122 ) (3,220 )
Depreciation (3,575 ) (3,921 ) (3,770 ) (3,820 ) (15,085 ) (4,008 ) (3,825 ) (3,932 ) (11,765 )
Amortization (1,418 ) (778 ) (1,097 ) (1,058 ) (4,351 ) (964 ) (923 ) (936 ) (2,823 )
(Provision) benefit for income taxes (3,178 ) (3,261 ) (3,752 ) (3,370 ) (13,562 ) (3,896 ) (6,142 ) 899   (9,138 )
NET INCOME $ 7,906   $ 7,496     $ 10,947     $ 10,285     $ 36,634     $ 8,585     $ 11,136     $ 1,869   $ 21,591  

ADJUSTED EBITDA [NET INCOME EXCLUDING LESLIE ASBESTOS AND BANKRUPTCY, INVENTORY REPOSITIONING, IMPAIRMENT AND SPECIAL CHARGES, NET INTEREST EXPENSE, DEPRECIATION, AMORTIZATION AND INCOME TAXES]

$ 17,851 $ 16,564 $ 20,252 $ 19,572 $ 74,238 $ 18,534 $ 23,043 $ 22,809 $ 64,386
Leslie asbestos and bankruptcy charges (recoveries) $ (1,001 ) $ 124 $ 201 $ $ (676 ) $ $ $ $
Inventory repositioning charges $ $ $ $ $ $ $ $ (4,124 ) $ (4,124 )
Impairment charges $ $ $ $ $ $ $ $ (10,348 ) $ (10,348 )
Special charges $ $ $ $ $ $ $ $ (1,377 ) $ (1,377 )
Interest expense, net $ (773 ) $ (1,232 ) $ (887 ) $ (1,039 ) $ (3,930 ) $ (1,081 ) $ (1,017 ) $ (1,122 ) $ (3,220 )
Depreciation $ (3,575 ) $ (3,921 ) $ (3,770 ) $ (3,820 ) $ (15,085 ) $ (4,008 ) $ (3,825 ) $ (3,932 ) $ (11,765 )
Amortization $ (1,418 ) $ (778 ) $ (1,097 ) $ (1,058 ) $ (4,351 ) $ (964 ) $ (923 ) $ (936 ) $ (2,823 )
(Provision) benefit for income taxes $ (3,178 ) $ (3,261 ) $ (3,752 ) $ (3,370 ) $ (13,562 ) $ (3,896 ) $ (6,142 ) $ 899   $ (9,138 )
NET INCOME $ 7,906   $ 7,496   $ 10,947   $ 10,285   $ 36,634   $ 8,585   $ 11,136   $ 1,869   $ 21,591  
 
 

CIRCOR INTERNATIONAL, INC.

RECONCILIATION OF FUTURE PERFORMANCE MEASURES TO COMMONLY

USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS

UNAUDITED

 
   

4th Quarter 2012

 

Low

 

High

EXPECTED ADJUSTED EARNINGS PER SHARE [EPS EXCLUDING INVENTORY REPOSITIONING, IMPAIRMENT AND SPECIAL CHARGES, NET OF TAX]

 

$

0.50

$

0.62

LESS: REPOSITIONING RELATED CHARGES [INVENTORY REPOSITIONING, IMPAIRMENT AND SPECIAL CHARGES, NET OF TAX]

$ 0.19 $ 0.16
EXPECTED EARNINGS PER COMMON SHARE (Diluted) $ 0.31 $ 0.46

CIRCOR International
Frederic M. Burditt, 781-270-1200
Chief Financial Officer

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