CIRCOR International, Inc. CIR, a leading provider of flow control solutions and other highly engineered products for markets including oil & gas, power generation, industrial and aerospace & defense, today announced financial results for the third quarter ended October 2, 2016.
Third-Quarter 2016 Highlights
- Revenue of $135 million, GAAP EPS of $0.27 and Adjusted EPS of $0.46
- Operating cash flow of $21 million and Free Cash Flow of $17.5 million
- Energy business diversified through the acquisition of Critical Flow Solutions (CFS)
- CIRCOR simplification continues with new organization structure
"Despite the cyclical headwinds facing our Energy business, we continue to focus on what we control. In the third quarter, we negotiated an important strategic acquisition, further reduced costs, and improved our working capital and cash flow performance," said Scott Buckhout, President and Chief Executive Officer. "The supplier quality issues we noted in the second quarter in our Aerospace and Defense business have been resolved. We expect stronger performance from this business going forward."
On October 13, 2016, CIRCOR closed on the acquisition of Critical Flow Solutions. This acquisition is consistent with the Company's disciplined capital deployment strategy and diversifies CIRCOR's revenue base as it further penetrates the stable downstream refining market. CFS brings an impressive portfolio of high technology valves and automation equipment for severe-service applications. CFS is generating strong margins due to its proprietary technology, large installed base, and high proportion of aftermarket sales.
"In addition, we are taking further actions to optimize our organizational structure to drive top-line growth and better align our businesses with end markets," added Buckhout. "Going forward, our new ‘Energy' segment, including our recent acquisition of CFS, will primarily serve the oil & gas market. The second segment, ‘Advanced Flow Solutions,' will include the current Aerospace & Defense businesses plus the Control Valves product line out of our legacy Energy Group. We expect to complete this reorganization in the fourth quarter and report the year-end results consistent with the new organizational structure."
Advanced Flow Solutions (AFS) brings together CIRCOR's Aerospace & Defense and Control Valves product lines under one management structure. AFS will be a diversified flow control technology platform that will help CIRCOR accelerate growth in the aerospace, defense, power, process, and general industrial end markets. In addition, this new Group will serve as the platform to acquire innovative technologies in broader flow control adjacencies. Sumit Mehrotra will lead this new Group, which will be headquartered in Corona, California. Mr. Mehrotra currently serves as CIRCOR's Senior Vice President for Global Supply Chain & Product Management.
"As we enter the final quarter of the year, we remain focused on executing our simplification and margin improvement actions. We are committed to creating long-term value for our shareholders by investing in both organic growth and acquisitions, expanding margins, generating strong free cash flow, and being disciplined with capital deployment," concluded Buckhout.
Fourth-Quarter 2016 Guidance
For the fourth quarter of 2016, the Company will provide its guidance during the conference call later today.
Selected Consolidated Results (unaudited)
($ millions except EPS) | Q3 2016 | Q3 2015 | Change | |||||||||||
Revenue | $ | 134.8 | $ | 159.3 | (15)% | |||||||||
GAAP Operating Income | $ | 3.5 | $ | (3.5) | 200% | |||||||||
Adjusted Operating Income1 | $ | 8.2 | $ | 16.2 | (49)% | |||||||||
GAAP Operating Margin | 2.6% | (2.2)% | 480 bps | |||||||||||
Adjusted Operating Margin1 | 6.1% | 10.1% | (400) bps | |||||||||||
GAAP Earnings Per Share (Diluted) | $ | 0.27 | $ | (0.49) | 155% | |||||||||
Adjusted Earnings Per Share (Diluted)1 | $ | 0.46 | $ | 0.64 | (28)% | |||||||||
Operating Cash Flow | $ | 21.2 | $ | 5.0 | 324% | |||||||||
Free Cash Flow2 | $ | 17.5 | $ | 2.2 | NM | |||||||||
Orders | $ | 111.3 | $ | 128.5 | (13)% |
Segment Results
($ millions) | Q3 2016 | Q3 2015 | Change | |||||||||||
Energy | ||||||||||||||
Revenue |
$ | 99.8 | $ | 122.9 | (19)% | |||||||||
GAAP Operating Margin | 7.7% | (0.6)% | 830 bps | |||||||||||
Adjusted Operating Margin1 | 11.4% | 15.4% | (400) bps | |||||||||||
Orders | $ | 78.5 | $ | 94.2 | (17)% | |||||||||
Aerospace & Defense | ||||||||||||||
Revenue | $ | 35.0 | $ | 36.4 | (4)% | |||||||||
GAAP Operating Margin | 6.7% | 8.9% | (220) bps | |||||||||||
Adjusted Operating Margin1 | 9.7% | 9.1% | 60 bps | |||||||||||
Orders | $ |
32.8 |
$ | 34.3 | (4)% |
1. Consolidated and Segment Results for Q3 2016 exclude special, restructuring and impairment charges totaling $4.7 million. This includes (i) $1.9 million for non-cash acquisition-related intangible amortization expense; (ii) $0.8 million related to the exit of the Company's California machine shop; (iii) $0.4 million related to the Company's Brazil exit; and (iv) $1.6 million related to the Company's suspension of manufacturing operations in China and other restructuring programs. Q3 2015 results exclude special, restructuring and impairment charges totaling $19.7 million including (i) $16.9 million related to the closure of the Brazil manufacturing operations including restructuring-related inventory charge of $6.4 million; (ii) $2.5 million for Schroedahl intangible amortization expense; and (iii) restructuring costs of $0.4 million.
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 today, October 28, 2016,
at 9:00 a.m. ET. To listen to the conference call and view the
accompanying presentation slides, visit "Webcasts
& Presentations" in the "Investors"
portion of the CIRCOR website. The call also can be accessed by dialing
(877) 407-5790 or (201) 689-8328. The webcast will be archived for one
year on the Company's website.
Use of Non-GAAP Financial Measures
Adjusted net income,
adjusted earnings per share (diluted), adjusted operating income,
adjusted operating margin, and free cash flow are non-GAAP financial
measures and are intended to serve as a complement to results provided
in accordance with accounting principles generally accepted in the
United States. CIRCOR believes that such information provides an
additional measurement and consistent historical comparison of the
Company's performance. A reconciliation of the non-GAAP financial
measures to the most directly comparable GAAP measures is available in
this news release.
Safe Harbor Statement
This press release contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Reliance should not be placed on
forward-looking statements because they involve unknown risks,
uncertainties and other factors, which are, in some cases, beyond the
control of CIRCOR. Any statements in this press release that are not
statements of historical fact are forward-looking statements, including,
but not limited to, those relating to CIRCOR's future performance,
including 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. 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 flow control solutions and other
highly engineered products and sub-systems for markets including oil &
gas, power generation, industrial and aerospace & defense. CIRCOR has a
diversified product portfolio with recognized, market-leading brands
that fulfill its customers' unique application needs. The Company's
strategy is to grow organically and through complementary acquisitions;
simplify CIRCOR's operations; achieve world class operational
excellence; and attract and retain top industry talent. For more
information, visit the Company's investor relations website at http://investors.circor.com.
CIRCOR INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS) (in thousands, except per share data) UNAUDITED |
||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
October 2, 2016 | October 4, 2015 | October 2, 2016 | October 4, 2015 | |||||||||||||||||
Net revenues | $ | 134,833 | $ | 159,258 | $ | 432,023 | $ | 492,023 | ||||||||||||
Cost of revenues | 92,479 | 113,865 | 298,005 | 343,187 | ||||||||||||||||
GROSS PROFIT | 42,354 | 45,393 | 134,018 | 148,836 | ||||||||||||||||
Selling, general and administrative expenses | 36,002 | 38,143 | 110,290 | 119,344 | ||||||||||||||||
Impairment charges | 208 | 2,502 | 208 | 2,502 | ||||||||||||||||
Special charges, net | 2,631 | 8,277 | 9,165 | 13,098 | ||||||||||||||||
OPERATING INCOME (LOSS) | 3,513 | (3,529 | ) | 14,355 | 13,892 | |||||||||||||||
Other expense (income): | ||||||||||||||||||||
Interest expense, net | 605 | 828 | 1,841 | 2,274 | ||||||||||||||||
Other expense (income), net | 163 | (587 | ) | (914 | ) | (1,197 | ) | |||||||||||||
TOTAL OTHER EXPENSE, NET | 768 | 241 | 927 | 1,077 | ||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES | 2,745 | (3,770 | ) | 13,428 | 12,816 | |||||||||||||||
(Benefit from) Provision for income taxes | (1,673 | ) | 4,308 | 1,325 | 10,109 | |||||||||||||||
NET INCOME (LOSS) | $ | 4,418 | $ | (8,078 | ) | $ | 12,103 | $ | 2,707 | |||||||||||
Earnings (Loss) per common share: | ||||||||||||||||||||
Basic | $ | 0.27 | $ | (0.49 | ) | $ | 0.74 | $ | 0.16 | |||||||||||
Diluted | $ | 0.27 | $ | (0.49 | ) | $ | 0.73 | $ | 0.16 | |||||||||||
Weighted average number of common shares outstanding: | ||||||||||||||||||||
Basic | 16,427 | 16,485 | 16,411 | 16,989 | ||||||||||||||||
Diluted | 16,629 | 16,485 | 16,568 | 17,029 | ||||||||||||||||
Dividends declared per common share | $ | 0.0375 | $ | 0.0375 | $ | 0.1125 | $ | 0.1125 | ||||||||||||
CIRCOR INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) UNAUDITED |
||||||||||
Nine Months Ended | ||||||||||
October 2, 2016 | October 4, 2015 | |||||||||
OPERATING ACTIVITIES | ||||||||||
Net income | $ | 12,103 | $ | 2,707 | ||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||
Depreciation | 9,614 | 10,676 | ||||||||
Amortization | 7,586 | 6,742 | ||||||||
Bad debt (recovery) expense | (928 | ) | 2,832 | |||||||
Loss on write down of inventory | 5,784 | 11,808 | ||||||||
Compensation expense of share-based plans | 4,200 | 5,811 | ||||||||
Tax effect of share-based plan compensation | 123 | (259 | ) | |||||||
Loss on sale or write down of property, plant and equipment | 3,238 | 478 | ||||||||
Impairment charges | 208 | 2,502 | ||||||||
Gain on sale of business | — | (1,044 | ) | |||||||
Changes in operating assets and liabilities, net of effects of acquisition and disposition: | ||||||||||
Trade accounts receivable | 15,422 | 8,118 | ||||||||
Inventories | 20,216 | (29,260 | ) | |||||||
Prepaid expenses and other assets | 545 | (2,801 | ) | |||||||
Accounts payable, accrued expenses and other liabilities | (39,161 | ) | (21,669 | ) | ||||||
Net cash provided by (used in) operating activities | 38,950 | (3,359 | ) | |||||||
INVESTING ACTIVITIES | ||||||||||
Purchases of property, plant and equipment | (10,776 | ) | (9,604 | ) | ||||||
Proceeds from the sale of property, plant and equipment | 1,186 | 1,200 | ||||||||
Proceeds from the sale of affiliate | — | 2,759 | ||||||||
Business acquisition, net of cash acquired | — | (79,983 | ) | |||||||
Net cash used in investing activities | (9,590 | ) | (85,628 | ) | ||||||
FINANCING ACTIVITIES | ||||||||||
Proceeds from long-term debt | 90,589 | 241,619 | ||||||||
Payments of long-term debt | (88,740 | ) | (141,830 | ) | ||||||
Dividends paid | (1,873 | ) | (1,937 | ) | ||||||
Proceeds from the exercise of stock options | 192 | 259 | ||||||||
Tax effect of share-based plan compensation | (123 | ) | 259 | |||||||
Purchases of common stock | — | (69,517 | ) | |||||||
Net cash provided by financing activities | 45 | 28,853 | ||||||||
Effect of exchange rate changes on cash and cash equivalents | 983 | (7,416 | ) | |||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 30,388 | (67,550 | ) | |||||||
Cash and cash equivalents at beginning of period | 54,541 | 121,372 | ||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 84,929 | $ | 53,822 | ||||||
CIRCOR INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS (in thousands) UNAUDITED |
||||||||||
October 2, 2016 | December 31, 2015 | |||||||||
ASSETS | ||||||||||
CURRENT ASSETS: | ||||||||||
Cash and cash equivalents | $ | 84,929 | $ | 54,541 | ||||||
Trade accounts receivable, less allowance for doubtful accounts of $7,570 and $8,290, respectively | 112,122 | 125,628 | ||||||||
Inventories | 153,470 | 177,840 | ||||||||
Prepaid expenses and other current assets | 18,001 | 16,441 | ||||||||
Total Current Assets | 368,522 | 374,450 | ||||||||
PROPERTY, PLANT AND EQUIPMENT, NET | 81,327 | 87,029 | ||||||||
OTHER ASSETS: | ||||||||||
Goodwill | 117,167 | 115,452 | ||||||||
Intangibles, net | 40,953 | 48,981 | ||||||||
Deferred income taxes | 42,713 | 36,799 | ||||||||
Other assets | 5,983 | 7,204 | ||||||||
TOTAL ASSETS | $ | 656,665 | $ | 669,915 | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
CURRENT LIABILITIES: | ||||||||||
Accounts payable | $ | 50,500 | $ | 64,284 | ||||||
Accrued expenses and other current liabilities | 39,950 | 52,878 | ||||||||
Accrued compensation and benefits | 17,386 | 18,424 | ||||||||
Income taxes payable | 5,956 | 6,585 | ||||||||
Total Current Liabilities | 113,792 | 142,171 | ||||||||
LONG-TERM DEBT | 92,400 | 90,500 | ||||||||
DEFERRED INCOME TAXES | 9,837 | 10,424 | ||||||||
OTHER NON-CURRENT LIABILITIES | 24,038 | 26,043 | ||||||||
SHAREHOLDERS' EQUITY: | ||||||||||
Common stock | 178 | 177 | ||||||||
Additional paid-in capital | 287,919 | 283,621 | ||||||||
Retained earnings | 268,169 | 257,939 | ||||||||
Common treasury stock, at cost | (74,972 | ) | (74,972 | ) | ||||||
Accumulated other comprehensive loss, net of tax | (64,696 | ) | (65,988 | ) | ||||||
Total Shareholders' Equity | 416,598 | 400,777 | ||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 656,665 | $ | 669,915 | ||||||
CIRCOR INTERNATIONAL, INC.
SUMMARY OF ORDERS AND BACKLOG (in millions) UNAUDITED |
||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
October 2, 2016 |
October 4, 2015 |
October 2, 2016 |
October 4, 2015 |
|||||||||||||||||
ORDERS (1) | ||||||||||||||||||||
Energy | $ | 78.5 | $ | 94.2 | $ | 266.5 | $ | 348.7 | ||||||||||||
Aerospace & Defense |
32.8 |
34.3 | 117.0 | 103.9 | ||||||||||||||||
Total orders | $ |
111.3 |
$ | 128.5 | $ | 383.5 | $ | 452.6 | ||||||||||||
BACKLOG (2) |
October 2, 2016 |
October 4, 2015 |
||||||||||||||||||
Energy | $ | 120.9 | $ | 210.6 | ||||||||||||||||
Aerospace & Defense | 99.3 | 94.1 | ||||||||||||||||||
Total backlog | $ | 220.2 | $ | 304.7 | ||||||||||||||||
|
||||||||||||||||||||
|
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.
CIRCOR INTERNATIONAL, INC.
SUMMARY REPORT BY SEGMENT (in thousands, except percentages) UNAUDITED |
|||||||||||||||||||||||||||||||||||||
2015 | 2016 | ||||||||||||||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | 2ND QTR | 3RD QTR | YTD | |||||||||||||||||||||||||||||
NET REVENUES | |||||||||||||||||||||||||||||||||||||
Energy | $ | 127,586 | $ | 127,230 | $ | 122,905 | $ | 124,412 | $ | 502,133 | $ | 112,620 | $ | 110,678 | $ | 99,798 | $ | 323,096 | |||||||||||||||||||
Aerospace & Defense | 38,274 | 39,676 | 36,353 | 39,832 | 154,134 | 38,178 | 35,714 | 35,035 | 108,927 | ||||||||||||||||||||||||||||
Total | $ | 165,860 | $ | 166,906 | $ | 159,258 | $ | 164,243 | $ | 656,267 | $ | 150,798 | $ | 146,392 | $ | 134,833 | $ | 432,023 | |||||||||||||||||||
OPERATING MARGIN | |||||||||||||||||||||||||||||||||||||
Energy | 13.8 | % | 13.4 | % | 15.4 | % | 13.4 | % | 14.0 | % | 12.6 | % | 13.0 | % | 11.4 | % | 12.3 | % | |||||||||||||||||||
Aerospace & Defense | 8.0 | % | 8.8 | % | 9.1 | % | 10.4 | % | 9.1 | % | 9.3 | % | 8.4 | % | 9.7 | % | 9.2 | % | |||||||||||||||||||
Segment operating margin | 12.4 | % | 12.3 | % | 14.0 | % | 12.7 | % | 12.8 | % | 11.8 | % | 11.9 | % | 10.9 | % | 11.5 | % | |||||||||||||||||||
Corporate expenses | (3.6 | )% | (3.3 | )% | (3.8 | )% | (2.5 | )% | (3.3 | )% | (4.3 | )% | (3.7 | )% | (4.8 | )% | (4.3 | )% | |||||||||||||||||||
Adjusted operating margin | 8.8 | % | 9.0 | % | 10.1 | % | 10.2 | % | 9.5 | % | 7.5 | % | 8.1 | % | 6.1 | % | 7.3 | % | |||||||||||||||||||
Restructuring related inventory charges | — | % | 1.2 | % | 4.0 | % | 0.6 | % | 1.4 | % | 1.3 | % | 0.1 | % | — | % | 0.5 | % | |||||||||||||||||||
Impairment charges | — | % | — | % | 1.6 | % | — | % | 0.4 | % | — | % | — | % | 0.2 | % | 0.1 | % | |||||||||||||||||||
Special restructuring charges, net | 0.9 | % | 1.9 | % | 0.2 | % | (0.2 | )% | 0.7 | % | 0.8 | % | 2.2 | % | 1.7 | % | 1.5 | % | |||||||||||||||||||
Special acquisition amortization | — | % | 1.3 | % | 1.6 | % | 1.4 | % | 1.0 | % | 1.2 | % | 1.3 | % | 1.4 | % | 1.3 | % | |||||||||||||||||||
Special other charges, net of recoveries | — | % | 0.1 | % | 5.0 | % | 1.0 | % | 1.5 | % | 0.5 | % | 0.9 | % | 0.3 | % | 0.6 | % | |||||||||||||||||||
Brazil restatement impact | 0.4 | % | 1.5 | % | — | % | — | % | 0.5 | % | — | % | — | % | — | % | — | % | |||||||||||||||||||
Total GAAP operating margin | 7.4 | % | 3.0 | % | (2.2 | )% | 7.5 | % | 4.0 | % | 3.6 | % | 3.7 | % | 2.6 | % | 3.3 | % | |||||||||||||||||||
CIRCOR INTERNATIONAL, INC.
SUMMARY REPORT BY SEGMENT (in thousands, except percentages and per share data) UNAUDITED |
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2015 | 2016 | ||||||||||||||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | 2ND QTR | 3RD QTR | YTD | |||||||||||||||||||||||||||||
INCOME STATEMENT | |||||||||||||||||||||||||||||||||||||
Energy | $ | 17,550 | $ | 17,008 | $ | 18,932 | $ | 16,724 | $ | 70,214 | $ | 14,186 | $ | 14,346 | $ | 11,357 | $ | 39,888 | |||||||||||||||||||
Aerospace & Defense | 3,045 | 3,494 | 3,298 | 4,146 | 13,982 | 3,562 | 3,011 | 3,406 | 9,979 | ||||||||||||||||||||||||||||
Segment operating income | 20,595 | 20,502 | 22,230 | 20,870 | 84,197 | 17,748 | 17,357 | 14,763 | 49,867 | ||||||||||||||||||||||||||||
Corporate expenses | (6,034 | ) | (5,477 | ) | (6,078 | ) | (4,122 | ) | (21,710 | ) | (6,488 | ) | (5,431 | ) | (6,522 | ) | (18,441 | ) | |||||||||||||||||||
Adjusted operating income | 14,561 | 15,025 | 16,152 | 16,748 | 62,487 | 11,260 | 11,926 | 8,240 | 31,426 | ||||||||||||||||||||||||||||
Restructuring related inventory charges | — | 2,005 | 6,412 | 974 | 9,391 | 1,958 | 75 | — | 2,033 | ||||||||||||||||||||||||||||
Impairment charges | — | — | 2,502 | — | 2,502 | — | — | 208 | 208 | ||||||||||||||||||||||||||||
Special restructuring charges, net | 1,512 | 3,127 | 342 | (347 | ) | 4,634 | 1,163 | 3,259 | 2,252 | 6,674 | |||||||||||||||||||||||||||
Special acquisition amortization | — | 2,110 | 2,490 | 2,238 | 6,838 | 1,868 | 1,911 | 1,888 | 5,667 | ||||||||||||||||||||||||||||
Special other charges, net of recoveries | (1 | ) | 183 | 7,935 | 1,603 | 9,720 | 776 | 1,334 | 379 | 2,489 | |||||||||||||||||||||||||||
Brazil restatement impact | 719 | 2,509 | — | — | 3,228 | — | — | — | — | ||||||||||||||||||||||||||||
Total GAAP operating income (loss) | 12,331 | 5,090 | (3,529 | ) | 12,281 | 26,174 | 5,495 | 5,347 | 3,513 | 14,355 | |||||||||||||||||||||||||||
INTEREST EXPENSE, NET | (640 | ) | (805 | ) | (828 | ) | (570 | ) | (2,844 | ) | (631 | ) | (605 | ) | (605 | ) | (1,841 | ) | |||||||||||||||||||
OTHER INCOME (EXPENSE), NET | 506 | 104 | 587 | (2,099 | ) | (902 | ) | 528 | 549 | (163 | ) | 914 | |||||||||||||||||||||||||
PRETAX INCOME (LOSS) | 12,197 | 4,389 | (3,770 | ) | 9,612 | 22,428 | 5,392 | 5,291 | 2,745 | 13,428 | |||||||||||||||||||||||||||
(PROVISION FOR) BENEFIT FROM INCOME TAXES | (3,284 | ) | (2,517 | ) | (4,308 | ) | (2,456 | ) | (12,565 | ) | (1,520 | ) | (1,478 | ) | 1,673 | (1,325 | ) | ||||||||||||||||||||
EFFECTIVE TAX RATE | 26.9 | % | 57.3 | % | (114.3 | )% | 25.6 | % | 56.0 | % | 28.2 | % | 27.9 | % | (61.0 | )% | 9.9 | % | |||||||||||||||||||
NET INCOME (LOSS) | $ | 8,913 | $ | 1,872 | $ | (8,078 | ) | $ | 7,156 | $ | 9,863 | $ | 3,872 | $ | 3,813 | $ | 4,418 | $ | 12,103 | ||||||||||||||||||
Weighted Average Common Shares Outstanding (Diluted) | 17,712 | 16,900 | 16,485 | 16,555 | 16,913 | 16,481 | 16,595 | 16,629 | 16,568 | ||||||||||||||||||||||||||||
EARNINGS (LOSS) PER COMMON SHARE (Diluted) | $ | 0.50 | $ | 0.11 | $ | (0.49 | ) | $ | 0.43 | $ | 0.58 | $ | 0.23 | $ | 0.23 | $ | 0.27 | $ | 0.73 | ||||||||||||||||||
CIRCOR INTERNATIONAL, INC. RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS (in thousands, except percentages) UNAUDITED |
|||||||||||||||||||||||||||||||||||||
2015 | 2016 | ||||||||||||||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | 2ND QTR | 3RD QTR | YTD | |||||||||||||||||||||||||||||
FREE CASH FLOW AS % OF NET INCOME (LOSS) | (207 | )% | 239 | % | (27 | )% | 397 | % | 169 | % | 96 | % | 214 | % | 395 | % | 243 | % | |||||||||||||||||||
FREE CASH FLOW | $ | (18,415 | ) | $ | 4,483 | $ | 2,169 | $ | 28,403 | $ | 16,640 | $ | 3,720 | $ | 8,174 | $ | 17,466 | $ | 29,360 | ||||||||||||||||||
ADD: | |||||||||||||||||||||||||||||||||||||
Capital expenditures, net of sale proceeds | 1,983 | 3,584 | 2,837 | 2,098 | 10,502 | 3,934 | 1,926 | 3,730 | 9,590 | ||||||||||||||||||||||||||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | $ | (16,432 | ) | $ | 8,067 | $ | 5,006 | $ | 30,501 | $ | 27,142 | $ | 7,654 | $ | 10,100 | $ | 21,196 | $ | 38,950 | ||||||||||||||||||
NET (CASH) DEBT | $ | (66,337 | ) | $ | 59,051 | $ | 57,277 | $ | 35,959 | $ | 35,959 | $ | 31,220 | $ | 24,630 | $ | 7,471 | $ | 7,471 | ||||||||||||||||||
ADD: | |||||||||||||||||||||||||||||||||||||
Cash & cash equivalents | 103,883 | 55,027 | 53,822 | 54,541 | 54,541 | 66,580 | 72,970 | 84,929 | 84,929 | ||||||||||||||||||||||||||||
TOTAL DEBT | $ | 37,546 | $ | 114,078 | $ | 111,099 | $ | 90,500 | $ | 90,500 | $ | 97,800 | $ | 97,600 | $ | 92,400 | $ | 92,400 | |||||||||||||||||||
TOTAL SHAREHOLDERS' EQUITY | $ | 462,384 | $ | 421,070 | $ | 407,979 | $ | 400,777 | $ | 400,777 | $ | 414,107 | $ | 411,367 | $ | 416,598 | $ | 416,598 | |||||||||||||||||||
DEBT AS % OF EQUITY | 8 | % | 27 | % | 27 | % | 23 | % | 23 | % | 24 | % | 24 | % | 22 | % | 22 | % | |||||||||||||||||||
NET DEBT AS % OF EQUITY | (14 | )% | 14 | % | 14 | % | 9 | % | 9 | % | 8 | % | 6 | % | 2 | % | 2 | % | |||||||||||||||||||
CIRCOR INTERNATIONAL, INC.
RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS (in thousands, except percentages and per share data) UNAUDITED |
|||||||||||||||||||||||||||||||||||||
2015 |
2016 |
||||||||||||||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | 2ND QTR | 3RD QTR | YTD | |||||||||||||||||||||||||||||
ADJUSTED NET INCOME | $ | 10,564 | $ | 9,357 | $ | 10,635 | $ | 10,512 | $ | 41,068 | $ | 8,683 | $ | 8,781 | $ | 7,626 | $ | 25,090 | |||||||||||||||||||
LESS: | |||||||||||||||||||||||||||||||||||||
Restructuring related inventory charges | — | 2,005 | 6,412 | 974 | 9,391 | 1,958 | 75 | — | 2,033 | ||||||||||||||||||||||||||||
Impairment charges | — | — | 2,502 | — | 2,502 | — | — | 208 | 208 | ||||||||||||||||||||||||||||
Special restructuring charges, net | 1,512 | 3,127 | 342 | (347 | ) | 4,634 | 1,163 | 3,259 | 2,252 | 6,674 | |||||||||||||||||||||||||||
Special acquisition amortization | — | 2,110 | 2,490 | 2,238 | 6,838 | 1,868 | 1,911 | 1,888 | 5,667 | ||||||||||||||||||||||||||||
Special other charges, net of recoveries | (1 | ) | 183 | 7,935 | 1,603 | 9,720 | 776 | 1,334 | 379 | 2,489 | |||||||||||||||||||||||||||
Brazil restatement impact | 719 | 2,509 | — | — | 3,228 | — | — | — | — | ||||||||||||||||||||||||||||
Income tax impact | (579 | ) | (2,449 | ) | (968 | ) | (1,112 | ) | (5,108 | ) | (954 | ) | (1,611 | ) | (1,519 | ) | (4,084 | ) | |||||||||||||||||||
NET INCOME (LOSS) | $ | 8,913 | $ | 1,872 | $ | (8,078 | ) | $ | 7,156 | $ | 9,863 | $ | 3,872 | $ | 3,813 | $ | 4,418 | $ | 12,103 | ||||||||||||||||||
ADJUSTED EARNINGS PER SHARE (Diluted) | $ | 0.60 | $ | 0.55 | $ | 0.64 | $ | 0.63 | $ | 2.43 | $ | 0.52 | $ | 0.53 | $ | 0.46 | $ | 1.51 | |||||||||||||||||||
LESS: | |||||||||||||||||||||||||||||||||||||
Restructuring related inventory charges | — | 0.12 | 0.39 | 0.06 | 0.57 | 0.12 | — | — | 0.12 | ||||||||||||||||||||||||||||
Impairment charges | — | — | 0.15 | — | 0.15 | — | — | 0.01 | 0.01 | ||||||||||||||||||||||||||||
Special restructuring charges, net | 0.09 | 0.19 | 0.02 | (0.02 | ) | 0.28 | 0.07 | 0.20 | 0.14 | 0.40 | |||||||||||||||||||||||||||
Special acquisition amortization | — | 0.12 | 0.15 | 0.14 | 0.41 | 0.11 | 0.12 | 0.11 | 0.34 | ||||||||||||||||||||||||||||
Special other charges, net of recoveries | — | 0.01 | 0.48 | 0.10 | 0.59 | 0.05 | 0.08 | 0.02 | 0.15 | ||||||||||||||||||||||||||||
Brazil restatement impact | 0.04 | 0.15 | — | — | 0.19 | — | — | — | — | ||||||||||||||||||||||||||||
Income tax impact | (0.03 | ) | (0.15 | ) | (0.06 | ) | (0.07 | ) | (0.31 | ) | (0.06 | ) | (0.10 | ) | (0.09 | ) | (0.25 | ) | |||||||||||||||||||
EARNINGS (LOSS) PER COMMON SHARE |
$ | 0.50 | $ | 0.11 | $ | (0.49 | ) | $ | 0.43 | $ | 0.58 | $ | 0.23 | $ | 0.23 | $ | 0.27 | $ | 0.73 | ||||||||||||||||||
CIRCOR INTERNATIONAL, INC.
RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS (in thousands, except percentages) UNAUDITED |
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2015 | 2016 | ||||||||||||||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | 2ND QTR | 3RD QTR | YTD | |||||||||||||||||||||||||||||
ADJUSTED EBITDA | $ | 19,299 | $ | 19,474 | $ | 20,980 | $ | 18,927 | $ | 78,681 | $ | 15,712 | $ | 16,346 | $ | 11,815 | $ | 43,873 | |||||||||||||||||||
LESS: | |||||||||||||||||||||||||||||||||||||
Restructuring related inventory charges | — | (2,005 | ) | (6,412 | ) | (974 | ) | (9,391 | ) | (1,958 | ) | (75 | ) | — | (2,033 | ) | |||||||||||||||||||||
Impairment charges | — | — | (2,502 | ) | — | (2,502 | ) | — | — | (208 | ) | (208 | ) | ||||||||||||||||||||||||
Special restructuring charges, net | (1,512 | ) | (3,127 | ) | (342 | ) | 347 | (4,634 | ) | (1,163 | ) | (3,259 | ) | (2,252 | ) | (6,674 | ) | ||||||||||||||||||||
Special other charges, net of recoveries | 1 | (183 | ) | (7,935 | ) | (1,603 | ) | (9,720 | ) | (776 | ) | (1,334 | ) | (379 | ) | (2,489 | ) | ||||||||||||||||||||
Brazil restatement impact | (719 | ) | (2,509 | ) | — | — | (3,228 | ) | — | — | — | — | |||||||||||||||||||||||||
EBITDA | $ | 17,068 | $ | 11,650 | $ | 3,789 | $ | 16,698 | $ | 49,206 | $ | 11,815 | $ | 11,678 | $ | 8,976 | $ | 32,469 | |||||||||||||||||||
LESS: | |||||||||||||||||||||||||||||||||||||
Interest expense, net | (641 | ) | (805 | ) | (828 | ) | (570 | ) | (2,844 | ) | (631 | ) | (605 | ) | (605 | ) | (1,841 | ) | |||||||||||||||||||
Depreciation | (3,521 | ) | (3,629 | ) | (3,526 | ) | (3,578 | ) | (14,254 | ) | (3,263 | ) | (3,213 | ) | (3,138 | ) | (9,614 | ) | |||||||||||||||||||
Amortization | (710 | ) | (2,827 | ) | (3,205 | ) | (2,939 | ) | (9,681 | ) | (2,529 | ) | (2,569 | ) | (2,488 | ) | (7,586 | ) | |||||||||||||||||||
(Provision for) benefit from income taxes | (3,284 | ) | (2,517 | ) | (4,308 | ) | (2,456 | ) | (12,565 | ) | (1,520 | ) | (1,478 | ) | 1,673 | (1,325 | ) | ||||||||||||||||||||
NET INCOME (LOSS) | $ | 8,913 | $ | 1,872 | $ | (8,078 | ) | $ | 7,156 | $ | 9,863 | $ | 3,872 | $ | 3,813 | $ | 4,418 | $ | 12,103 | ||||||||||||||||||
CIRCOR INTERNATIONAL, INC.
SUPPLEMENTAL SEGMENT DATA (in thousands, except percentages) UNAUDITED |
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2015 | 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | 2ND QTR | 3RD QTR | YTD | |||||||||||||||||||||||||||||||||||||||||||||||
Energy | A&D | Energy | A&D | Energy | A&D | Energy | A&D | Energy | A&D | Energy | A&D | Energy | A&D | Energy | A&D | Energy | A&D | ||||||||||||||||||||||||||||||||||||||
ADJUSTED OPERATING MARGIN | 13.8 | % | 8.0 | % | 13.4 | % | 8.8 | % | 15.4 | % | 9.1 | % | 13.4 | % | 10.4 | % | 14.0 | % | 9.1 | % | 12.6 | % | 9.3 | % | 13.0 | % | 8.4 | % | 11.4 | % | 9.7 | % | 12.3 | % | 9.2 | % | |||||||||||||||||||
Restructuring related inventory charges | — | % | — | % | 0.1 | % | 4.7 | % | 5.2 | % | — | % | 0.4 | % | 1.2 | % | 1.4 | % | 1.5 | % | 1.7 | % | 0.1 | % | 0.1 | % | — | % | — | % | — | % | 0.6 | % | — | % | |||||||||||||||||||
Impairment charges | — | % | — | % | — | % | — | % | 2.0 | % | — | % | — | % | — | % | 0.5 | % | — | % | — | % | — | % | — | % | — | % | 0.2 | % | — | % | 0.1 | % | — | % | |||||||||||||||||||
Special restructuring charges, net | 0.3 | % | 3.1 | % | 2.2 | % | 0.8 | % | 0.2 | % | 0.2 | % | (0.3 | )% | 0.1 | % | 0.6 | % | 1.0 | % | (0.2 | )% | 3.8 | % | 0.8 | % | 6.6 | % | 1.2 | % | 3.0 | % | 0.6 | % | 4.5 | % | |||||||||||||||||||
Special acquisition amortization | — | % | — | % | 1.7 | % | — | % | 2.0 | % | — | % | 1.8 | % | — | % | 1.4 | % | — | % | 1.7 | % | — | % | 1.7 | % | — | % | 1.9 | % | — | % | 1.8 | % | — | % | |||||||||||||||||||
Special other charges, net of recoveries | 0.4 | % | (2.6 | )% | 0.2 | % | (0.2 | )% | 6.5 | % | — | % | 0.7 | % | — | % | 1.9 | % | (0.7 | )% | 0.7 | % | — | % | 1.2 | % | — | % | 0.4 | % | — | % | 0.8 | % | — | % | |||||||||||||||||||
Brazil restatement impact | 0.6 | % | — | % | 2.0 | % | — | % | — | % | — | % | — | % | — | % | 0.6 | % | — | % | — | % | — | % | — | % | — | % | — | % | — | % | — | % | — | % | |||||||||||||||||||
GAAP OPERATING MARGIN | 12.5 | % | 7.5 | % | 7.2 | % | 3.5 | % | (0.6 | )% | 8.9 | % | 10.9 | % | 9.1 | % | 7.6 | % | 7.2 | % | 8.8 | % | 5.5 | % | 9.1 | % | 1.8 | % | 7.7 | % | 6.7 | % | 8.6 | % | 4.7 | % | |||||||||||||||||||
2015 | 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | 2ND QTR | 3RD QTR | YTD | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Energy | A&D | Energy | A&D | Energy | A&D | Energy | A&D | Energy | A&D | Energy | A&D | Energy | A&D | Energy | A&D | Energy | A&D | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
ADJUSTED OPERATING INCOME | $ | 17,550 | $ | 3,045 | $ | 17,008 | $ | 3,494 | $ | 18,932 | $ | 3,298 | $ | 16,724 | $ | 4,146 | $ | 70,214 | $ | 13,982 | $ | 14,186 | $ | 3,562 | $ | 14,346 | $ | 3,011 | $ | 11,357 | $ | 3,406 | $ | 39,888 | $ | 9,979 | ||||||||||||||||||||||||||||||||||||
Restructuring related |
— | — | 153 | 1,852 | 6,412 | — | 508 | 466 | 7,073 | 2,318 | 1,919 | 39 | 74 | — | — | — | 1,993 | 39 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impairment charges |
— | — | — | — | 2,502 | — | — | — | 2,502 | — | — | — | — | — | 208 | — | 208 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special restructuring |
343 | 1,169 | 2,818 | 309 | 279 | 63 | (394 | ) | 47 | 3,046 | 1,588 | (278 | ) | 1,441 | 900 | 2,359 | 1,191 | 1,061 | 1,814 | 4,861 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Special acquisition |
— | — | 2,110 | — | 2,490 | — | 2,238 | — | 6,838 | — | 1,868 | — | 1,911 | — | 1,888 | — | 5,667 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special other charges, net |
556 | (977 | ) | 248 | (65 | ) | 7,935 | — | 828 | — | 9,567 | (1,042 | ) | 774 | — | 1,335 | — | 379 | — | 2,488 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Brazil restatement impact |
719 | — | 2,509 | — | — | — | — | — | 3,228 | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP OPERATING |
$ | 15,932 | $ | 2,853 | $ | 9,170 | $ | 1,398 | $ | (686 | ) | $ | 3,235 | $ | 13,544 | $ | 3,633 | $ | 37,960 | $ | 11,118 | $ | 9,903 | $ | 2,082 | $ | 10,126 | $ | 652 | $ | 7,690 | $ | 2,345 | $ | 27,719 | $ | 5,079 | |||||||||||||||||||||||||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20161028005401/en/
CIRCOR International
Rajeev Bhalla, 781-270-1200
Executive
Vice President & Chief Financial Officer
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