CIRCOR International, Inc. CIR, a leading provider of flow control solutions and other highly engineered products for the Industrial, Energy, and Aerospace & Defense markets, today announced financial results for the first quarter ended April 1, 2018. Results include the acquisition of the Colfax Fluid Handling business, which CIRCOR acquired in December 2017.
First-Quarter 2018 Highlights
- Orders of $326.2 million, up 77% and down 1% organically
- Revenue of $275.6 million, up 90% and up 4% organically
- Backlog of $561 million, up $60 million in the quarter
- GAAP Loss Per Share of $0.88, Adjusted Earnings Per Share of $0.40
- Integration of Fluid Handling businesses on track
"The momentum we saw across many of our end markets in Q4 2017 is continuing as we move through the early stages of 2018," said Scott Buckhout, President and Chief Executive Officer. "For CIRCOR overall, our reported results were stronger than we expected as we entered the quarter. Our book to bill ratio in Q1 was almost 1.2, increasing our backlog by $60 million. Orders continue to be healthy and we expect that trend to continue through the second quarter."
"As we announced in Q1, we have re-aligned our businesses to focus on three primary end markets – Industrial, Energy, and Aerospace & Defense," Buckhout said. "This is part of our strategy to simplify the business, clarify customer and channel relationships, and better exploit growth opportunities across the organization."
"The Fluid Handling acquisition brings a strong platform for revenue growth and profitability. Fluid Handling orders were up 16% on a pro forma, organic basis in the quarter. The integration is on track, and we are confident in our ability to fully realize all of the committed synergies," added Buckhout.
"Overall, we remain committed to driving long-term growth, generating strong cash flow, and delevering the Company by reducing debt and expanding margins," concluded Buckhout.
Second-Quarter 2018 Guidance
For the second quarter of 2018,
CIRCOR expects revenue in the range of $275 million to $285 million, and
GAAP loss per share of $0.09 to $0.27, which reflects
acquisition-related amortization expense of $0.51 to $0.53 and other
special and restructuring charges of $0.12 to $0.18. Excluding the
impact of amortization, special and restructuring charges, adjusted EPS
is expected to be in the range of $0.44 to $0.54 per share. Presentation
slides that provide supporting information to this guidance and
first-quarter results are posted on the "Investors" section of the
Company's website, http://investors.circor.com,
and will be discussed during the conference call at 9:00 a.m. ET
tomorrow, May 2, 2018.
Selected Consolidated Results (unaudited) |
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($ millions except EPS) | Q1 2018 | Q1 2017 | Change | |||||||||
Revenue | $ | 275.6 | $ | 145.2 | 90% | |||||||
GAAP Operating (Loss) Income | $ | (13.4) | $ | 7.4 | N/M | |||||||
Adjusted Operating Income1 | $ | 19.8 | $ | 9.1 | 118% | |||||||
GAAP Operating Margin | (4.9)% | 5.1% | N/M | |||||||||
Adjusted Operating Margin1 | 7.2% | 6.3% | 90 bps | |||||||||
GAAP (Loss) Earnings Per Share (Diluted) | $ | (0.88) | $ | 0.29 | N/M | |||||||
Adjusted Earnings Per Share (Diluted)1 | $ | 0.40 | $ | 0.32 | 25% | |||||||
Operating Cash Flow | $ | (0.1) | $ | 16.2 | N/M | |||||||
Free Cash Flow2 | $ | (8.3) | $ | 13.4 | N/M | |||||||
Orders | $ | 326.2 | $ | 184.1 | 77% | |||||||
Segment Results |
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($ millions) | Q1 2018 | Q1 2017 | Change | |||||||||
Energy | ||||||||||||
Revenue | $ | 100.0 | $ | 76.2 | 31% | |||||||
Segment Operating Income | $ | 5.7 | $ | 6.4 | (11)% | |||||||
Segment Operating Margin | 5.7% | 8.4% | (270) bps | |||||||||
Orders | $ | 129.8 | $ | 100.0 | 30% | |||||||
Aerospace & Defense | ||||||||||||
Revenue | $ | 58.5 | $ | 41.6 | 41% | |||||||
Segment Operating Income | $ | 8.9 | $ | 3.8 | 136% | |||||||
Segment Operating Margin | 15.3% | 9.1% | 620 bps | |||||||||
Orders | $ | 59.8 | $ | 56.4 | 6% | |||||||
Industrial | ||||||||||||
Revenue | $ | 117.1 | $ | 27.4 | 328% | |||||||
Segment Operating Income | $ | 12.9 | $ | 4.4 | 195% | |||||||
Segment Operating Margin | 11.1% | 16.0% | (490) bps | |||||||||
Orders | $ | 136.6 | $ | 27.7 |
394% |
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1. Adjusted Consolidated and Segment Results for Q1 2018
exclude non-cash acquisition-related intangible amortization, special
and restructuring charges totaling $33.2 million ($25.5 million, net of
tax). These charges include: (i) $20.2 million charge for non-cash
acquisition-related intangible amortization expense, including the
amortization of a step-up in fair value of inventories ($6.6 million);
(ii) $10.5 million charge related to restructuring activities, primarily
severance, related to our Engineered Valves, Reliability Services and
Germany-based Pumps business; and (iii) $2.5 million related to the
separation of Fluid Handling business from Colfax Corporation. Consolidated
and Segment Results for Q1 2017 exclude non-cash acquisition-related
intangible amortization, special and restructuring charges totaling $1.7
million ($0.6 million, net of tax). These charges include (i) $2.6
million charge for non-cash acquisition-related intangible amortization
expense, (ii) $1.5 million charge related to other restructuring
activities, primarily the exit of manufacturing operations in China and
France; and (iii) $2.3 million net special gain primarily related to
updating fair value estimates related to the purchase of Critical Flow
Solutions, partially offset by Brazil losses incurred subsequent to our
Q1 2016 closure of manufacturing operations.
2. Free
Cash Flow is a non-GAAP financial measure and is calculated by
subtracting GAAP capital expenditures, net of proceeds from asset sales,
from GAAP Operating Cash Flow.
Conference Call Information
CIRCOR International will hold a
conference call to review its financial results at 9:00 a.m. ET
tomorrow, May 2, 2018. To listen to the live conference call and view
the accompanying presentation slides, please visit "Webcasts &
Presentations" in the "Investors" portion of CIRCOR's website. The live
call also can be accessed by dialing (877) 407-5790 or (201) 689-8328.
The webcast will be archived on the Company's website for one year.
Use of Non-GAAP Financial Measures
Adjusted operating
income, Adjusted operating margin, Adjusted net income, Adjusted
earnings per share (diluted), EBITDA, Adjusted EBITDA, net debt, free
cash flow, organic growth and pro forma combined amounts are non-GAAP
financial measures. These non-GAAP financial measures are used by
management in our financial and operating decision making because we
believe they better reflect our ongoing business and allow for
meaningful period-to-period comparisons. We believe these non-GAAP
financial measures provide useful information to investors and others in
understanding and evaluating the Company's current operating performance
and future prospects in the same manner as management does, if they so
choose. These non-GAAP financial measures also allow investors and
others to compare the Company's current financial results with the
Company's past financial results in a consistent manner.
For example:
- We exclude costs and tax effects associated with restructuring activities, such as reducing overhead and consolidating facilities. We believe that the costs related to these restructuring activities are not indicative of our normal operating costs.
- We exclude certain acquisition-related costs, including significant transaction costs and amortization of inventory and fixed-asset step-ups and the related tax effects. We exclude these costs because we do not believe they are indicative of our normal operating costs.
- We exclude the expense and tax effects associated with the non-cash amortization of acquisition-related intangible assets because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have lives up to 25 years. Exclusion of the non-cash amortization expense allows comparisons of operating results that are consistent over time for both our newly acquired and long-held businesses and with both acquisitive and non-acquisitive peer companies.
- We also exclude certain gains/losses and related tax effects, which are either isolated or cannot be expected to occur again with any predictability, and that we believe are not indicative of our normal operating gains and losses. For example, we exclude gains/losses from items such as the sale of a business, significant litigation-related matters and lump-sum pension plan settlements.
CIRCOR's management uses these non-GAAP measures, in addition to GAAP financial measures, as the basis for measuring the Company's operating performance and comparing such performance to that of prior periods and to the performance of our competitors. We use such measures when publicly providing our business outlook, assessing future earnings potential, evaluating potential acquisitions and dispositions and in our financial and operating decision-making process, including for compensation purposes.
Investors should recognize that these non-GAAP measures might not be comparable to similarly titled measures of other companies. These measures should be considered in addition and not as a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with accounting principles generally accepted in the United States. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is included in this news release.
Safe Harbor Statement
This press release contains
forward-looking statements within the meaning of Section 27 A of the
Securities Act of 1933, as amended, and Section 21 E of the Securities
Exchange Act of 1934, as amended. Reliance should not be placed on
forward-looking statements because they involve unknown risks,
uncertainties and other factors, which are, in some cases, beyond the
control of CIRCOR. Any statements in this press release that are not
statements of historical fact are forward-looking statements, including,
but not limited to, those relating to CIRCOR's future performance,
including the realization of cost reductions from restructuring
activities. Actual events, performance or results could differ
materially from the anticipated events, performance or results expressed
or implied by such forward-looking statements. Important factors that
could cause actual results to vary from expectations include, but are
not limited to: our ability to respond to competitive developments and
to grow our business, both domestically and internationally; changes in
the cost, quality or supply of raw materials; our ability to comply with
our debt obligations; our ability to successfully implement our
acquisition, divesture or restructuring strategies, including our
integration of the recently acquired Fluid Handling business; changes in
industry standards or government regulations, both in the United States
and internationally; and our ability to operate our manufacturing
facilities at current or higher levels and respond to increases in
manufacturing costs. BEFORE MAKING ANY INVESTMENT DECISIONS REGARDING
OUR COMPANY, WE STRONGLY ADVISE YOU TO READ THE SECTION ENTITLED "RISK
FACTORS" IN OUR MOST RECENT ANNUAL REPORT ON FORM 10-K AND SUBSEQUENT
REPORTS ON FORMS 10-Q, WHICH CAN BE ACCESSED UNDER THE "INVESTORS" LINK
OF OUR WEBSITE AT WWW.CIRCOR.COM.
We undertake no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise.
About CIRCOR International, Inc.
CIRCOR International, Inc.
designs, manufactures and markets differentiated technology products and
sub-systems for markets including oil & gas, industrial, aerospace &
defense and commercial marine. CIRCOR has a diversified flow and motion
control product portfolio with recognized, market-leading brands that
fulfill its customers' mission critical needs. 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 talent. For more information, visit the Company's
investor relations website at http://investors.circor.com.
CIRCOR INTERNATIONAL, INC. |
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Three Months Ended | |||||||||
April 1, 2018 | April 2, 2017 | ||||||||
Net revenues | $ | 275,580 | $ | 145,208 | |||||
Cost of revenues | 199,276 | 98,575 | |||||||
GROSS PROFIT | 76,304 | 46,633 | |||||||
Selling, general and administrative expenses | 77,238 | 40,089 | |||||||
Special and restructuring charges (recoveries), net | 12,446 | (810 | ) | ||||||
OPERATING (LOSS) INCOME | (13,380 | ) | 7,354 | ||||||
Other expense (income): | |||||||||
Interest expense, net | 11,801 | 1,669 | |||||||
Other (income) expense, net | (1,861 | ) | 225 | ||||||
TOTAL OTHER EXPENSE, NET | 9,940 | 1,894 | |||||||
(LOSS) INCOME BEFORE INCOME TAXES | (23,320 | ) | 5,460 | ||||||
(Benefit from) provision for income taxes | (5,879 | ) | 687 | ||||||
NET (LOSS) INCOME | $ | (17,441 | ) | $ | 4,773 | ||||
(Loss) Earnings per common share: | |||||||||
Basic | $ | (0.88 | ) | $ | 0.29 | ||||
Diluted | $ | (0.88 | ) | $ | 0.29 | ||||
Weighted average number of common shares outstanding: | |||||||||
Basic | 19,806 | 16,458 | |||||||
Diluted | 19,806 | 16,691 | |||||||
Dividends declared per common share | $ | — | $ | 0.0375 | |||||
CIRCOR INTERNATIONAL, INC. |
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Three Months Ended | |||||||||
OPERATING ACTIVITIES | April 1, 2018 | April 2, 2017 | |||||||
Net (loss) income | $ | (17,441 | ) | $ | 4,773 | ||||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||||||||
Depreciation | 7,334 | 3,798 | |||||||
Amortization | 12,329 | 3,092 | |||||||
Bad debt expense (recovery) | 192 | (54 | ) | ||||||
Loss on write down of inventory | 6,466 | 548 | |||||||
Compensation expense of share-based plans | 1,365 | 738 | |||||||
Change in fair value of contingent consideration | — | (2,500 | ) | ||||||
Interest amortization | 881 | — | |||||||
Loss (gain) on sale or write down of property, plant and equipment | 1,284 | (110 | ) | ||||||
Changes in operating assets and liabilities, net of effects of acquisition and disposition: | |||||||||
Trade accounts receivable | 12,141 | 14,018 | |||||||
Inventories | (13,833 | ) | 2,030 | ||||||
Prepaid expenses and other assets | (6,616 | ) | (4,297 | ) | |||||
Accounts payable, accrued expenses and other liabilities | (4,249 | ) | (5,841 | ) | |||||
Net cash (used in) provided by operating activities | (147 | ) | 16,195 | ||||||
INVESTING ACTIVITIES | |||||||||
Additions to property, plant and equipment | (8,234 | ) | (3,001 | ) | |||||
Proceeds from the sale of property, plant and equipment | 93 | 190 | |||||||
Business acquisition, working capital adjustment | — | 1,467 | |||||||
Net cash used in investing activities | (8,141 | ) | (1,344 | ) | |||||
FINANCING ACTIVITIES | |||||||||
Proceeds from long-term debt | 71,950 | 34,900 | |||||||
Payments of long-term debt | (44,106 | ) | (43,100 | ) | |||||
Dividends paid | — | (624 | ) | ||||||
Proceeds from the exercise of stock options | 301 | 295 | |||||||
Return of cash to seller | (7,905 | ) | — | ||||||
Net cash provided by (used in) financing activities | 20,240 | (8,529 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents | 957 | 1,055 | |||||||
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 12,909 | 7,377 | |||||||
Cash, cash equivalents and restricted cash at beginning of period | 112,293 | 58,279 | |||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | $ | 125,202 | $ | 65,656 | |||||
CIRCOR INTERNATIONAL, INC. |
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April 1, 2018 | December 31, 2017 | ||||||||
ASSETS | |||||||||
CURRENT ASSETS: | |||||||||
Cash and cash equivalents | $ | 123,305 | $ | 110,356 | |||||
Trade accounts receivable, less allowance for doubtful accounts of $13,512 and $15,434, respectively | 204,437 | 223,922 | |||||||
Inventories | 265,065 | 244,896 | |||||||
Prepaid expenses and other current assets | 67,129 | 59,219 | |||||||
Total Current Assets | 659,936 | 638,393 | |||||||
PROPERTY, PLANT AND EQUIPMENT, NET | 226,439 | 217,539 | |||||||
OTHER ASSETS: | |||||||||
Goodwill | 515,177 | 505,762 | |||||||
Intangibles, net | 497,027 | 513,364 | |||||||
Deferred income taxes | 28,236 | 22,334 | |||||||
Other assets | 8,861 | 9,407 | |||||||
TOTAL ASSETS | $ | 1,935,676 | $ | 1,906,799 | |||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
CURRENT LIABILITIES: | |||||||||
Accounts payable | $ | 118,441 | $ | 117,329 | |||||
Accrued expenses and other current liabilities | 179,106 | 170,454 | |||||||
Accrued compensation and benefits | 30,865 | 34,734 | |||||||
Total Current Liabilities | 328,412 | 322,517 | |||||||
LONG-TERM DEBT | 815,795 | 787,343 | |||||||
DEFERRED INCOME TAXES | 31,099 | 26,122 | |||||||
PENSION LIABILITY, NET | 150,572 | 150,719 | |||||||
OTHER NON-CURRENT LIABILITIES | 21,486 | 18,124 | |||||||
COMMITMENTS AND CONTINGENCIES | |||||||||
SHAREHOLDERS' EQUITY: | |||||||||
Common stock | 212 | 212 | |||||||
Additional paid-in capital | 436,915 | 438,721 | |||||||
Retained earnings | 254,046 | 274,243 | |||||||
Common treasury stock, at cost | (74,472 | ) | (74,472 | ) | |||||
Accumulated other comprehensive loss, net of tax | (28,389 | ) | (36,730 | ) | |||||
Total Shareholders' Equity | 588,312 | 601,974 | |||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,935,676 | $ | 1,906,799 | |||||
CIRCOR INTERNATIONAL, INC.
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Three Months Ended | ||||||||
April 1, 2018 | April 2, 2017 | |||||||
ORDERS (1) (3) | ||||||||
Energy | $ | 129.8 | $ | 100.0 | ||||
Aerospace & Defense | 59.8 | 56.4 | ||||||
Industrial | 136.6 | 27.7 | ||||||
Total orders | $ | 326.2 | $ | 184.1 | ||||
BACKLOG (2) (3) | April 1, 2018 | April 2, 2017 | ||||||
Energy | $ | 224.1 | $ | 142.8 | ||||
Aerospace & Defense | 165.8 | 106.2 | ||||||
Industrial | 170.6 | 32.9 | ||||||
Total backlog | $ | 560.5 | $ | 281.9 | ||||
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 unshipped customer orders for
which revenue has not been recognized.
Note 3: April 2, 2017
segment amounts restated for Q1 2018 organizational realignment.
CIRCOR INTERNATIONAL, INC. |
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2017 | 2018 | ||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | ||||||||||||||||||||
ORDERS | |||||||||||||||||||||||||
Energy | $ | 100,012 | $ | 73,140 | $ | 84,857 | $ | 118,073 | $ | 376,082 | $ | 129,762 | |||||||||||||
Aerospace & Defense | 56,416 | 39,902 | 45,939 | $ | 52,043 | 194,300 | 59,793 | ||||||||||||||||||
Industrial | 27,654 | 29,889 | 27,296 | 46,407 | 131,246 | 136,607 | |||||||||||||||||||
Total | $ | 184,082 | $ | 142,931 | $ | 158,092 | $ | 216,523 | $ | 701,628 | $ | 326,162 | |||||||||||||
NET REVENUES | |||||||||||||||||||||||||
Energy | $ | 76,210 | $ | 78,276 | $ | 88,570 | $ | 96,561 | $ | 339,617 | $ | 99,972 | |||||||||||||
Aerospace & Defense | 41,601 | 43,304 | 41,117 | $ | 56,961 | 182,983 | 58,477 | ||||||||||||||||||
Industrial | 27,397 | 29,651 | 30,006 | 52,056 | 139,110 | 117,131 | |||||||||||||||||||
Total | $ | 145,208 | $ | 151,231 | $ | 159,693 | $ | 205,578 | $ | 661,710 | $ | 275,580 | |||||||||||||
SEGMENT OPERATING INCOME | |||||||||||||||||||||||||
Energy | $ | 6,407 | $ | 8,170 | $ | 6,936 | $ | 8,618 | $ | 30,131 | $ | 5,696 | |||||||||||||
Aerospace & Defense | 3,784 | 4,374 | 4,333 | 10,884 | 23,375 | 8,931 | |||||||||||||||||||
Industrial | 4,384 | 4,901 | 5,675 | 4,972 | 19,932 | 12,948 | |||||||||||||||||||
Corporate expenses | (5,479 | ) | (5,396 | ) | (5,067 | ) | (5,802 | ) | (21,744 | ) | (7,802 | ) | |||||||||||||
Adjusted Operating Income | $ | 9,096 | $ | 12,049 | $ | 11,877 | $ | 18,672 | $ | 51,694 | $ | 19,773 | |||||||||||||
SEGMENT OPERATING MARGIN % | |||||||||||||||||||||||||
Energy | 8.4 | % | 10.4 | % | 7.8 | % | 8.9 | % | 8.9 | % | 5.7 | % | |||||||||||||
Aerospace & Defense | 9.1 | % | 10.1 | % | 10.5 | % | 19.1 | % | 12.8 | % | 15.3 | % | |||||||||||||
Industrial | 16.0 | % | 16.5 | % | 18.9 | % | 9.6 | % | 14.3 | % | 11.1 | % | |||||||||||||
Adjusted Operating Margin | 6.3 | % | 8.0 | % | 7.4 | % | 9.1 | % | 7.8 | % | 7.2 | % | |||||||||||||
CIRCOR INTERNATIONAL, INC. |
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2017 | 2018 | ||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | ||||||||||||||||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | $ | 16,195 | $ | 2,667 | $ | (16,854 | ) | $ | 7,629 | $ | 9,637 | $ | (147 | ) | |||||||||||
LESS: | |||||||||||||||||||||||||
Capital expenditures, net of sale proceeds | 2,811 | 2,375 | 2,318 | 6,103 | 13,607 | 8,141 | |||||||||||||||||||
FREE CASH FLOW | $ | 13,384 | $ | 292 | $ | (19,172 | ) | $ | 1,526 | $ | (3,970 | ) | $ | (8,288 | ) | ||||||||||
TOTAL DEBT | $ | 243,000 | $ | 252,856 | $ | 269,026 | $ | 795,208 | $ | 795,208 | $ | 823,665 | |||||||||||||
LESS: | |||||||||||||||||||||||||
Cash & cash equivalents | 65,656 | 77,272 | 75,627 | 110,356 | 110,356 | 123,305 | |||||||||||||||||||
NET DEBT | $ | 177,344 | $ | 175,584 | $ | 193,399 | $ | 684,852 | $ | 684,852 | $ | 700,360 | |||||||||||||
TOTAL SHAREHOLDERS' EQUITY | $ | 415,537 | $ | 438,097 | $ | 451,885 | $ | 601,974 | $ | 601,974 | $ | 588,312 | |||||||||||||
TOTAL DEBT AS % OF EQUITY | 58 | % | 58 | % | 60 | % | 132 | % | 132 | % | 140 | % | |||||||||||||
NET DEBT AS % OF EQUITY | 43 | % | 40 | % | 43 | % | 114 | % | 114 | % | 119 | % | |||||||||||||
CIRCOR INTERNATIONAL, INC. |
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2017 | 2018 | ||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | ||||||||||||||||||||
NET INCOME (LOSS) | $ | 4,773 | $ | 8,970 | $ | 3,617 | $ | (5,571 | ) | $ | 11,789 | $ | (17,441 | ) | |||||||||||
LESS: | |||||||||||||||||||||||||
Restructuring related inventory charges | — | — | — | — | — | 473 | |||||||||||||||||||
Amortization of inventory step-up | — | — | — | 4,300 | 4,300 | 6,600 | |||||||||||||||||||
Restructuring charges, net | 1,458 | 3,566 | 341 | 697 | 6,062 | 9,615 | |||||||||||||||||||
Acquisition amortization | 2,552 | 2,599 | 2,694 | 4,697 | 12,542 | 11,797 | |||||||||||||||||||
Acquisition depreciation | — | — | — | 233 | 233 | 1,837 | |||||||||||||||||||
Special charges (recoveries), net | (2,268 | ) | (5,520 | ) | 1,978 | 13,799 | 7,989 | 2,831 | |||||||||||||||||
Income tax impact | (1,137 | ) | (3,124 | ) | (1,497 | ) | (8,279 | ) | (14,037 | ) | (7,687 | ) | |||||||||||||
ADJUSTED NET INCOME | $ | 5,378 | $ | 6,491 | $ | 7,133 | $ | 9,876 | $ | 28,878 | $ | 8,025 | |||||||||||||
EARNINGS (LOSS) PER COMMON SHARE (Diluted) | $ | 0.29 | $ | 0.54 | $ | 0.22 | $ | (0.32 | ) | $ | 0.70 | $ | (0.88 | ) | |||||||||||
LESS: | |||||||||||||||||||||||||
Restructuring related inventory charges | — | — | — | — | — | 0.02 | |||||||||||||||||||
Amortization of inventory step-up | — | — | — | 0.25 | 0.26 | 0.33 | |||||||||||||||||||
Restructuring charges, net | 0.09 | 0.21 | 0.02 | 0.04 | 0.36 | 0.49 | |||||||||||||||||||
Acquisition amortization | 0.15 | 0.16 | 0.16 | 0.27 | 0.74 | 0.60 | |||||||||||||||||||
Acquisition depreciation | — | — | — | 0.01 | 0.01 | 0.09 | |||||||||||||||||||
Special charges (recoveries), net | (0.14 | ) | (0.33 | ) | 0.12 | 0.80 | 0.47 | 0.14 | |||||||||||||||||
Income tax impact | (0.07 | ) | (0.19 | ) | (0.09 | ) | (0.48 | ) | (0.83 | ) | (0.39 | ) | |||||||||||||
ADJUSTED EARNINGS PER SHARE (Diluted) | $ | 0.32 | $ | 0.39 | $ | 0.43 | $ | 0.57 | $ | 1.71 | $ | 0.40 | |||||||||||||
CIRCOR INTERNATIONAL, INC. |
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2017 | 2018 | ||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | ||||||||||||||||||||
NET INCOME (LOSS) | $ | 4,773 | $ | 8,970 | $ | 3,617 | $ | (5,571 | ) | $ | 11,789 | $ | (17,441 | ) | |||||||||||
LESS: | |||||||||||||||||||||||||
Interest expense, net | (1,669 | ) | (2,184 | ) | (2,445 | ) | (4,479 | ) | (10,777 | ) | (11,801 | ) | |||||||||||||
Depreciation | (3,798 | ) | (3,547 | ) | (3,544 | ) | (4,401 | ) | (15,290 | ) | (7,334 | ) | |||||||||||||
Amortization | (3,092 | ) | (3,124 | ) | (3,275 | ) | (5,256 | ) | (14,747 | ) | (12,329 | ) | |||||||||||||
(Provision for) benefit from income taxes | (687 | ) | 724 | 21 | 5,618 | 5,676 | 5,879 | ||||||||||||||||||
EBITDA | $ | 14,019 | $ | 17,101 | $ | 12,860 | $ | 2,947 | $ | 46,927 | $ | 8,144 | |||||||||||||
LESS: | |||||||||||||||||||||||||
Restructuring related inventory charges | — | — | — | — | — | (473 | ) | ||||||||||||||||||
Amortization of inventory step-up | — | — | — | (4,300 | ) | (4,300 | ) | (6,600 | ) | ||||||||||||||||
Restructuring charges, net | (1,458 | ) | (3,566 | ) | (341 | ) | (697 | ) | (6,062 | ) | (9,615 | ) | |||||||||||||
Special (charges) recoveries, net | 2,268 | 5,520 | (1,978 | ) | (13,799 | ) | (7,989 | ) | (2,831 | ) | |||||||||||||||
ADJUSTED EBITDA | $ | 13,209 | $ | 15,147 | $ | 15,179 | $ | 21,743 | $ | 65,278 | $ | 27,663 |
CIRCOR INTERNATIONAL, INC.
RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS (in thousands, except percentages) UNAUDITED |
|||||||||||||||||||||||||
2017 | 2018 | ||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | ||||||||||||||||||||
GAAP OPERATING INCOME (LOSS) | $ | 7,354 | $ | 11,404 | $ | 6,864 | $ | (5,054 | ) | $ | 20,568 | $ | (13,380 | ) | |||||||||||
LESS: | |||||||||||||||||||||||||
Restructuring related inventory charges | — | — | — | — | — | 473 | |||||||||||||||||||
Amortization of inventory step-up | — | — | — | 4,300 | 4,300 | 6,600 | |||||||||||||||||||
Restructuring charges, net | 1,458 | 3,566 | 341 | 697 | 6,062 | 9,615 | |||||||||||||||||||
Acquisition amortization | 2,552 | 2,599 | 2,694 | 4,697 | 12,542 | 11,797 | |||||||||||||||||||
Acquisition depreciation | — | — | — | 233 | 233 | 1,837 | |||||||||||||||||||
Special charges (recoveries), net | (2,268 | ) | (5,520 | ) | 1,978 | 13,799 | 7,989 | 2,831 | |||||||||||||||||
ADJUSTED OPERATING INCOME | $ | 9,096 | $ | 12,049 | $ | 11,877 | $ | 18,672 | $ | 51,694 | $ | 19,773 | |||||||||||||
GAAP OPERATING MARGIN | 5.1 | % | 7.5 | % | 4.3 | % | (2.5 | )% | 3.1 | % | (4.9 | )% | |||||||||||||
LESS: | |||||||||||||||||||||||||
Restructuring related inventory charges | — | % | — | % | — | % | — | % | — | % | 0.2 | % | |||||||||||||
Amortization of inventory step-up | — | % | — | % | — | % | 2.1 | % | 0.6 | % | 2.4 | % | |||||||||||||
Restructuring charges, net | 1.0 | % | 2.4 | % | 0.2 | % | 0.3 | % | 0.9 | % | 3.5 | % | |||||||||||||
Acquisition amortization | 1.8 | % | 1.7 | % | 1.7 | % | 2.3 | % | 1.9 | % | 4.3 | % | |||||||||||||
Acquisition depreciation | — | % | — | % | — | % | 0.1 | % | — | % | 0.7 | % | |||||||||||||
Special charges (recoveries), net | (1.6 | )% | (3.7 | )% | 1.2 | % | 6.7 | % | 1.2 | % | 1.0 | % | |||||||||||||
ADJUSTED OPERATING MARGIN | 6.3 | % | 8.0 | % | 7.4 | % | 9.1 | % | 7.8 | % | 7.2 | % |
The Company is providing certain combined information related to the recently acquired Fluid Handling business.
CIRCOR INTERNATIONAL, INC. |
||||||||||||||||||||
2017 | ||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | ||||||||||||||||
ORDERS - Recast | ||||||||||||||||||||
Energy | $ | 100,012 | $ | 73,140 | $ | 84,857 | $ | 118,073 | $ | 376,082 | ||||||||||
Aerospace & Defense | 56,416 | 39,902 | 45,939 | 52,043 | 194,300 | |||||||||||||||
Industrial | 27,654 | 29,889 | 27,296 | 46,407 | 131,246 | |||||||||||||||
Total | $ | 184,082 | $ | 142,931 | $ | 158,092 | $ | 216,523 | $ | 701,628 | ||||||||||
ORDERS - Fluid Handling | ||||||||||||||||||||
Energy | $ | 23,679 | $ | 16,882 | $ | 21,401 | $ | 11,803 | $ | 73,765 | ||||||||||
Aerospace & Defense | 8,255 | 24,375 | 9,716 | 6,816 | 49,162 | |||||||||||||||
Industrial | 77,944 | 76,866 | 87,378 | 60,193 | 302,381 | |||||||||||||||
Total | $ | 109,878 | $ | 118,123 | $ | 118,495 | $ | 78,812 | $ | 425,308 | ||||||||||
ORDERS - Combined | ||||||||||||||||||||
Energy | $ | 123,690 | $ | 90,022 | $ | 106,258 | $ | 129,876 | $ | 449,846 | ||||||||||
Aerospace & Defense | 64,671 | 64,277 | 55,655 | 58,859 | 243,462 | |||||||||||||||
Industrial | 105,598 | 106,755 | 114,674 | 106,601 | 433,628 | |||||||||||||||
Total | $ | 293,959 | $ | 261,054 | $ | 276,587 | $ | 295,336 | $ | 1,126,936 | ||||||||||
NET REVENUES - Recast | ||||||||||||||||||||
Energy | $ | 76,210 | $ | 78,276 | $ | 88,570 | $ | 96,561 | $ | 339,617 | ||||||||||
Aerospace & Defense | 41,601 | 43,304 | 41,117 | 56,961 | 182,983 | |||||||||||||||
Industrial | 27,397 | 29,651 | 30,006 | 52,056 | 139,110 | |||||||||||||||
Total | $ | 145,208 | $ | 151,231 | $ | 159,693 | $ | 205,578 | $ | 661,710 | ||||||||||
NET REVENUES - Fluid Handling | ||||||||||||||||||||
Energy | $ | 15,546 | $ | 17,705 | $ | 17,789 | $ | 13,663 | $ | 64,703 | ||||||||||
Aerospace & Defense | 10,728 | 17,044 | 11,208 | 6,918 | 45,898 | |||||||||||||||
Industrial | 85,264 | 83,310 | 85,604 | 72,489 | 326,667 | |||||||||||||||
Total | $ | 111,538 | $ | 118,059 | $ | 114,601 | $ | 93,070 | $ | 437,268 | ||||||||||
NET REVENUES - Combined | ||||||||||||||||||||
Energy | $ | 91,756 | $ | 95,981 | $ | 106,359 | $ | 110,224 | $ | 404,320 | ||||||||||
Aerospace & Defense | 52,329 | 60,348 | 52,325 | 63,879 | 228,881 | |||||||||||||||
Industrial | 112,661 | 112,961 | 115,610 | 124,545 | 465,777 | |||||||||||||||
Total | $ | 256,746 | $ | 269,290 | $ | 274,294 | $ | 298,648 | $ | 1,098,978 | ||||||||||
Notes:
- Items labeled "Recast" represent previously reported
CIRCOR information, adjusted to reflect the impact of our February 28,
2018 organizational realignment
- Items labeled "Fluid Handling"
represent the information from the Fluid Handling businesses prior to
their acquisition by CIRCOR on December 10, 2017
- Items labeled
"Combined" represent the sum of the Recast and Fluid Handling information
CIRCOR INTERNATIONAL, INC. |
|||||||||||||||||||||
2017 | |||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | |||||||||||||||||
SEGMENT OPERATING INCOME - Recast | |||||||||||||||||||||
Energy | $ | 6,407 | $ | 8,170 | $ | 6,936 | $ | 8,618 | $ | 30,131 | |||||||||||
Aerospace & Defense | 3,784 | 4,374 | 4,333 | 10,884 | 23,375 | ||||||||||||||||
Industrial | 4,384 | 4,901 | 5,675 | 4,972 | 19,932 | ||||||||||||||||
Corporate expenses | (5,479 | ) | (5,396 | ) | (5,067 | ) | (5,802 | ) | (21,744 | ) | |||||||||||
Total | $ | 9,096 | $ | 12,049 | $ | 11,877 | $ | 18,672 | $ | 51,694 | |||||||||||
SEGMENT OPERATING INCOME - Fluid Handling | |||||||||||||||||||||
Energy | $ | (83 | ) | $ | 1,080 | $ | 1,761 | $ | 812 | $ | 3,570 | ||||||||||
Aerospace & Defense | 1,488 | 3,661 | 2,201 | (367 | ) | 6,983 | |||||||||||||||
Industrial | 8,833 | 7,709 | 4,365 | (1,414 | ) | 19,493 | |||||||||||||||
Corporate expenses | — | — | — | — | — | ||||||||||||||||
Total | $ | 10,238 | $ | 12,450 | $ | 8,327 | $ | (969 | ) | $ | 30,046 | ||||||||||
SEGMENT OPERATING INCOME - Combined | |||||||||||||||||||||
Energy | $ | 6,324 | $ | 9,250 | $ | 8,697 | $ | 9,430 | $ | 33,701 | |||||||||||
Aerospace & Defense | 5,272 | 8,035 | 6,534 | 10,517 | 30,358 | ||||||||||||||||
Industrial | 13,217 | 12,610 | 10,040 | 3,558 | 39,425 | ||||||||||||||||
Corporate expenses | (5,479 | ) | (5,396 | ) | (5,067 | ) | (5,802 | ) | (21,744 | ) | |||||||||||
Total | $ | 19,334 | $ | 24,499 | $ | 20,204 | $ | 17,703 | $ | 81,740 | |||||||||||
SEGMENT OPERATING MARGIN - Combined | |||||||||||||||||||||
Energy | 6.9 | % | 9.6 | % | 8.2 | % | 8.6 | % | 8.3 | % | |||||||||||
Aerospace & Defense | 10.1 | % | 13.3 | % | 12.5 | % | 16.5 | % | 13.3 | % | |||||||||||
Industrial | 11.7 | % | 11.2 | % | 8.7 | % | 2.9 | % | 8.5 | % | |||||||||||
Corporate expenses | (2.1 | )% | (2.0 | )% | (1.8 | )% | (1.9 | )% | (2.0 | )% | |||||||||||
Total | 7.5 | % | 9.1 | % | 7.4 | % | 5.9 | % | 7.4 | % | |||||||||||
Notes:
- Items labeled "Recast" represent previously reported
CIRCOR information, adjusted to reflect the impact of our February 28,
2018 organizational realignment
- Items labeled "Fluid Handling"
represent the information from the Fluid Handling businesses prior to
their acquisition by CIRCOR on December 10, 2017
- Items labeled
"Combined" represent the sum of the Recast and Fluid Handling information
-
Segment Operating Margin - Combined represent Segment Operating Income -
Combined divided by Segment Net Revenues Combined
CIRCOR INTERNATIONAL, INC. |
|||||||||||||||||||||
2017 | |||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | |||||||||||||||||
FLUID HANDLING GAAP OPERATING INCOME (LOSS) | $ | 4,359 | $ | 19,738 | $ | 2,241 | $ | 3,129 | $ | 29,467 | |||||||||||
LESS: | |||||||||||||||||||||
Asbestos costs | 2,690 | 2,517 | 2,379 | 1,274 | 8,860 | ||||||||||||||||
Impairment charges | — | — | — | — | |||||||||||||||||
Exited businesses | 65 | (26 | ) | (47 | ) | — | (8 | ) | |||||||||||||
Acquisition amortization | 796 | 810 | 818 | — | 2,424 | ||||||||||||||||
Restructuring and other special charges (recoveries) | 2,328 | (10,589 | ) | 636 | (5,372 | ) | (12,997 | ) | |||||||||||||
Stay bonus | — | — | 2,300 | — | 2,300 | ||||||||||||||||
FLUID HANDLING ADJUSTED OPERATING INCOME | $ | 10,238 | $ | 12,450 | $ | 8,327 | $ | (969 | ) | $ | 30,046 | ||||||||||
Notes
- Amounts relate to Fluid Handling results prior to December
10, 2017, the date of CIRCOR's acquisition.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180501006875/en/
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