CIRCOR International, Inc. (NYSE: CIR) (“CIRCOR” or “the
Company”), one of the world’s leading providers of mission critical
flow control products and services for the Industrial and Aerospace
& Defense markets, today announced financial results for the
second quarter ended July 2, 2023.
Q2 2023 Overview (compared with Q2
2022):
- Revenue of $209 million up 9% both reported and organically
- Aerospace & Defense revenue of $74 million, up 9% both
reported and organically
- Industrial revenue of $135 million, up 9% both reported and
organically
- Orders of $236 million, up 13% reported and 14% organically
- Aerospace & Defense orders of $95 million, up 38% both
reported and organically
- Industrial orders of $141 million, up 1% reported and 2%
organically
- GAAP operating income of $9.5 million, down 20%
- GAAP operating margin of 4.6%, down 160 bps
- Adjusted operating income excluding impact of deemed contract
termination due to Russia sanctions of $29.1 million, up 75%
- Adjusted operating margin excluding impact of deemed contract
termination due to Russia sanctions of 13.9%, up 520 bps
President and CEO Tony Najjar said, "Strong orders momentum
continued in the second quarter, reflecting our team's focus on
customers and the execution of our growth strategy. Our team
delivered solid organic orders growth of 14%, primarily driven by
our Aerospace and Defense segment. We benefited from the continued
recovery in the commercial aerospace market, strength in our Naval
Defense programs, Industrial aftermarket, and value pricing in both
the foremarket and aftermarket. Our backlog at the end of Q2 2023
was up 27% to a record $604 million.”
“Our value pricing initiatives, cost controls, and
simplification actions continued to serve as growth and margin
expansion levers during the quarter," Mr. Najjar continued. "We
delivered a 75% increase in second-quarter adjusted operating
income and a 520 basis-point improvement in adjusted operating
margin excluding an adjustment to reverse prior periods reported
revenue on a contract deemed to be terminated due to Russia
sanctions. Our year-over-year results represented another step
change in margin performance driven by the significant margin
expansion in our Industrial and A&D segments. With the actions
taken, and our team’s continued operating discipline and focus on
our customers, we believe we are well positioned to deliver
sustained growth and margin expansion.”
In light of the pending transaction with CubeBid Co, Inc., which
is an affiliate of investment funds managed by KKR, the Company
will not conduct an earnings call this quarter or give
forward-looking guidance. The Company currently expects to complete
the transaction in the fourth quarter of 2023.
The financial statements and the Quarterly Report Form 10-Q are
available on the CIRCOR investor relations website,
https://investors.circor.com/, and on the U.S. Securities and
Exchange Commission website, www.sec.gov.
Selected Consolidated
Results
(unaudited)
($ millions except EPS)
Q2 2023
Q2 2022
Change
Q2 YTD 2023
Q2 YTD 2022
Change
Revenue1
$
208.8
$
191.4
9
%
$
411.9
$
377.0
9
%
GAAP operating income
9.5
11.9
(20
)%
27.5
0.1
27400
%
Adjusted operating income2
29.1
16.6
75
%
57.4
27.0
113
%
GAAP operating margin
4.6
%
6.2
%
-160 bps
6.7
%
—
%
670 bps
Adjusted operating margin3
13.9
%
8.7
%
520 bps
13.9
%
7.2
%
670 bps
GAAP (loss) income per share
$
(0.42
)
$
0.19
(321
)%
$
(0.44
)
$
(0.86
)
49
%
Adjusted earnings per share
(diluted)4
$
0.57
$
0.32
78
%
$
1.10
$
0.37
197
%
Operating cash flow
2.1
(3.6
)
159
%
(11.8
)
(19.5
)
39
%
Adjusted free cash flow5
(2.9
)
(9.1
)
68
%
(19.5
)
(28.6
)
32
%
Orders6
$
236.4
$
208.4
13
%
$
478.5
$
430.0
11
%
Segment Results
(unaudited)
($ in millions)
Q2 2023
Q2 2022
Change
Q2 YTD 2023
Q2 YTD 2022
Change
Aerospace & Defense
Revenue
$
73.5
$
67.3
9
%
$
142.1
$
130.6
9
%
Segment operating income
15.2
13.6
12
%
30.0
24.9
20
%
Segment operating margin
20.7
%
20.2
%
50 bps
21.1
%
19.0
%
210 bps
Orders6
$
95.4
$
69.0
38
%
$
179.8
$
146.9
22
%
Industrial
Revenue1
$
135.3
$
124.1
9
%
$
269.8
$
246.4
9
%
Segment operating income2
15.6
8.5
84
%
36.0
15.3
135
%
Segment operating margin3
11.6
%
6.8
%
480 bps
13.4
%
6.2
%
720 bps
Orders6
$
141.0
$
139.4
1
%
$
298.7
$
283.1
6
%
Net Debt and Leverage
(unaudited)
2022
2023
($ in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
1st Qtr
2nd Qtr
NET DEBT7
$
486.6
$
487.9
$
475.8
$
452.7
$
467.5
$
470.9
Adjusted EBITDA (TTM8)
77.8
83.2
96.0
108.3
124.5
138.8
Net Leverage9
6.3x
5.9x
5.0x
4.2x
3.8x
3.4x
- Consolidated and Industrial segment revenues for Q2 2023 and Q2
2022 included $0.0 million and $0.2 million respectively, relating
to our Pipeline Engineering business.
- Adjusted operating income is a non-GAAP financial measure.
Refer to “Use of Non-GAAP Financial Measures” for an explanation of
our non-GAAP financial measures and to the reconciliations included
in this press release. Adjusted operating income and Industrial
segment operating income for the Q2 2023 and Q2 2022 included $0.1
million and $(1.1) million, respectively, relating to our Pipeline
Engineering business. Adjusted operating income for Q2 2023
excludes the impact of a deemed contract termination due to Russia
sanctions of $5.4 million.
- Adjusted operating margin is a non-GAAP financial measure.
Refer to “Use of Non-GAAP Financial Measures” for an explanation of
our non-GAAP financial measures and to the reconciliations included
in this press release. Adjusted operating margin for Q2 2023 and Q2
2022 included 0% and (493)%, respectively, relating to our Pipeline
Engineering business. Adjusted operating margin for Q2 2023
excludes the impact of a deemed contract termination due to Russia
sanctions.
- Adjusted earnings per share (diluted) is a non-GAAP financial
measure. Refer to “Use of Non-GAAP Financial Measures” for an
explanation of our non-GAAP financial measures and to the
reconciliations included in this press release. Adjusted earnings
per share and our segment results for Q2 2023 exclude net loss from
non-cash acquisition-related intangible amortization and special
and restructuring charges of $19.5 million, consisting of (i) $9.0
million for non-cash acquisition-related intangible amortization
and depreciation expense; (ii) $4.2 million of special charges
related to the evaluation of strategic alternatives for the
Company;(iii) the impact of a deemed contract termination of $5.4
million due to government sanctions placed on Russia in May 2023;
(iv) $0.6 million receivable write off due to the deemed contract
termination of the Russia order; and (v) other special and
restructuring charges net of $0.4 million. Adjusted earnings per
share and our segment results for Q2 2022 exclude net loss from
non-cash acquisition-related intangible amortization and special
and restructuring charges of $4.7 million, consisting of (i) $10.4
million for non-cash acquisition-related intangible amortization
and depreciation expense; (ii) $5.0 million of special charges
related to the amendment of the credit agreement; (iii) $5.0
million of costs due to the investigation into the accounting
irregularities of the Pipeline Engineering business and incremental
professional services incurred due to the restatement; (iv) $0.9
million of special charges related to the evaluation of strategic
alternatives for the company; (v) net restructuring charges of $4.7
million comprised of $5.3 million of CTA loss offset by other
adjustments of $0.6 million due to the deconsolidation of the
Pipeline Engineering businesses; (vi) other special and
restructuring charges net of $0.7 million; and (vii) a gain of
$22.0 million on the sale of real estate located at Walden, New
York and Tampa, Florida.
- Adjusted free cash flow, a non-GAAP financial measure, is
calculated by subtracting GAAP capital expenditures, net of
proceeds from asset sales and third party funding, from GAAP
operating cash flow. Refer to “Use of Non-GAAP Financial Measures”
for an explanation of our non-GAAP financial measures and to the
reconciliations included in this press release.
- Orders, an operating measure, is defined as a legally binding
agreement from an authorized individual at a customer requesting
CIRCOR to provide goods and/or services at a fixed or determinable
price and CIRCOR is capable of providing such goods and services,
when the terms and conditions are firm enough to assure subsequent
payment by the customer. Consolidated and Industrial segment orders
for both Q2 2023 and Q2 2022 included $0.0 million relating to our
Pipeline Engineering business.
- Net Debt, a non-GAAP financial measure, is calculated as gross
debt (Term Loan B and revolvers) less cash or cash equivalents.
Refer to "Use of Non-GAAP Financial Measures" for an explanation of
our non-GAAP financial measures and to the reconciliations included
in this press release.
- TTM is defined as trailing twelve months.
- Net Leverage, a non-GAAP financial measure, is defined as a
calculated measure of net debt (as defined above) divided by
adjusted EBITDA (TTM). Refer to "Use of Non-GAAP Financial
Measures" for an explanation of our non-GAAP financial
measures.
Use of Non-GAAP Financial Measures
In this press release, the Company uses the non-GAAP financial
measures adjusted net income, adjusted EBITDA, adjusted operating
income, adjusted operating margin, adjusted earnings per share,
adjusted free cash flow, net debt, and net leverage. Non-GAAP
financial measures are used by management in our financial and
operating decision making because we believe they reflect our
ongoing business and facilitate period-to-period comparisons. We
believe that these non-GAAP financial measures provide useful
information to investors and others in understanding and evaluating
CIRCOR’s current operating performance and future prospects in the
same manner as management does if they so choose. These non-GAAP
financial measures can also assist investors and others in
comparing CIRCOR’s current financial results with CIRCOR’s past
financial results in a consistent manner.
We exclude costs and tax effects associated with special and
restructuring activities, such as reducing overhead and
consolidating facilities. We believe that the costs related to
special and 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 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.
We exclude the results of discontinued operations. We exclude
goodwill impairment charges. We exclude these costs because we do
not believe they are indicative of our normal operating costs. We
also exclude the impact of a deemed contract termination as a
result of Russia sanctions because we do not believe this is
indicative of normal operations.
Due to the significance of recently sold or exited businesses
and to provide a comparison of changes in our revenue and orders
(an operating measure), we also discuss these changes on an
“organic” basis. Organic is calculated assuming the divestitures
and/or exited businesses completed prior to July 2, 2023 were
completed on January 1, 2022 and excluding the impact of changes in
foreign currency exchange rates.
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 peers. 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.
About CIRCOR International, Inc.
CIRCOR International is one of the world’s leading providers of
mission critical flow control products and services for the
Industrial and Aerospace & Defense markets. The Company has a
product portfolio of market-leading brands serving its customers’
most demanding applications. CIRCOR markets its solutions directly
and through various sales partners to more than 14,000 customers in
approximately 100 countries. The Company has a global presence with
approximately 3,100 employees and is headquartered in Burlington,
Massachusetts. For more information, visit the Company’s investor
relations website at http://investors.circor.com.
Additional Information and Where to Find It
This press release does not constitute a solicitation of any
vote or approval. In connection with the proposed transaction,
CIRCOR filed a definitive proxy statement regarding the proposed
transaction (the “Proxy Statement”) with the U.S. Securities and
Exchange Commission (the “SEC”) on July 17, 2023 and mailed the
Proxy Statement to stockholders of the Company entitled to vote at
the Special Meeting on or around July 17, 2023. CIRCOR may also
file other documents with the SEC regarding the proposed
transaction. This document is not a substitute for the Proxy
Statement or any other document that may be filed by CIRCOR with
the SEC.
BEFORE MAKING ANY VOTING DECISION, CIRCOR’S STOCKHOLDERS ARE
URGED TO READ THE PROXY STATEMENT IN ITS ENTIRETY AND ANY OTHER
DOCUMENTS FILED BY CIRCOR WITH THE SEC IN CONNECTION WITH THE
PROPOSED TRANSACTION OR INCORPORATED BY REFERENCE THEREIN BEFORE
MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE
PROPOSED TRANSACTION BECAUSE THEY CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED
TRANSACTION.
Any vote in respect of resolutions to be proposed at a CIRCOR
stockholder meeting to approve the proposed transaction or related
matters, or other responses in relation to the proposed
transaction, should be made only on the basis of the information
contained in CIRCOR’s Proxy Statement. Stockholders may obtain a
free copy of the Proxy Statement and other documents CIRCOR files
with the SEC (when available) through the website maintained by the
SEC at www.sec.gov. CIRCOR makes available free of charge on its
investor relations website at investors.circor.com copies of
materials it files with, or furnishes to, the SEC.
The proposed transaction will be implemented solely pursuant to
the Agreement and Plan of Merger, by and among CIRCOR, Cube BidCo,
Inc., a Delaware corporation (“Parent”), and Cube Merger Sub, Inc.,
a Delaware corporation and wholly owned subsidiary of Parent
(“Merger Sub”), dated as of June 5, 2023, as amended as of June 26,
2023 and June 29, 2023 (the “Merger Agreement” ), which contains
the full terms and conditions of the proposed transaction.
Participants in the Solicitation CIRCOR and certain of
its directors, executive officers and certain employees and other
persons may be deemed to be participants in the solicitation of
proxies from CIRCOR’s stockholders in connection with the proposed
transaction. Security holders may obtain information regarding the
names, affiliations and interests of CIRCOR’s directors and
executive officers in CIRCOR’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2022, which was filed with the SEC
on March 15, 2023. To the extent the holdings of CIRCOR’s
securities by CIRCOR’s directors and executive officers have
changed since the amounts set forth in CIRCOR’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2022, such changes
have been or will be reflected on Statements of Change in Ownership
on Form 4 filed with the SEC. Investors may obtain additional
information regarding the interests of participants in the
solicitation of proxies from CIRCOR’s stockholders in connection
with the proposed transaction, which may, in some cases, be
different than those of CIRCOR’s stockholders generally, by reading
the Proxy Statement and other materials that may be filed with the
SEC in connection with the proposed transaction when they become
available. These documents (when available) may be obtained free of
charge from the SEC’s website at www.sec.gov and the investor
relations page of the CIRCOR’s website at investors.circor.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. All statements that
address expectations or projections about the future, including
with respect to the Company’s expectations for its performance in
2023 or relating to the Company’s pending transaction with CubeBid
Co, Inc. are forward-looking statements. Actual results may differ
materially from the expectations the Company describes in its
forward-looking statements. Substantial 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. Important factors that could cause
actual results to differ materially from expectations include, but
are not limited to the inability to achieve expected results in
pricing and cost cut actions and the related impact on margins and
cash flow; the effectiveness of the Company’s internal control over
financial reporting and disclosure controls and procedures; the
remediation of the material weaknesses in the Company’s internal
controls over financial reporting or other potential weaknesses of
which the Company is not currently aware or which have not been
detected; uncertainty associated with the current worldwide
economic conditions and the continuing impact on economic and
financial conditions in the United States and around the world,
including as a result of COVID-19, rising inflation, increasing
interest rates, natural disasters, military conflicts, including
the conflict between Russia and Ukraine, terrorist attacks,
uncertainties as to the timing of the proposed transaction with
CubeBid Co, Inc., uncertainties as to how many of the Company’s
stockholders will vote their stock in favor of the transaction; the
occurrence of any event, change or other circumstance that could
give rise to the termination of the Merger Agreement, including
circumstances requiring a party to pay the other party a
termination fee pursuant to the Merger Agreement; the ability of
the parties to consummate the proposed transaction on a timely
basis or at all; the satisfaction of the conditions precedent to
the consummation of the proposed transaction, including the ability
to secure regulatory approvals and stockholder approval on the
terms expected, at all or in a timely manner; the effects of the
transaction (or the announcement or pendency thereof) on
relationships with associates, customers, manufacturers, suppliers,
employees (including the risks relating to the ability to retain or
hire key personnel), other business partners or governmental
entities; transaction costs; the risk that the merger will divert
management’s attention from the Company’s ongoing business
operations or otherwise disrupts the Company’s ongoing business
operations; changes in the Company’s businesses during the period
between now and the closing; certain restrictions during the
pendency of the proposed transaction that may impact the Company’s
ability to pursue certain business opportunities or strategic
transactions; risks associated with litigation relating to the
proposed transaction, and other similar matters, and the risks
detailed from time to time in the Company’s periodic reports filed
with the Securities Exchange Commission. Before making any
investment decisions regarding CIRCOR, the Company strongly advises
you to read the section entitled “Risk Factors” in its 2022 Annual
Report on Form 10-K and the Risk Factor included in Part II Item 1A
in our Quarterly Report on Form 10-Q for the quarter ended July 2,
2023, which can be accessed under the “Investors” link of the
Company’s website at www.circor.com. These forward-looking
statements are made as of the date of this press release, and the
Company undertakes no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise, except as required by law.
CIRCOR INTERNATIONAL,
INC
CONSOLIDATED STATEMENT OF
OPERATIONS
(in thousands, except per
share data) (unaudited)
Three Months Ended
Six Months Ended
July 2, 2023
July 3, 2022
July 2, 2023
July 3, 2022
Net revenues
$
208,809
$
191,376
$
411,906
$
377,031
Cost of revenues
140,224
133,171
269,255
263,543
Gross profit
68,585
58,205
142,651
113,488
Selling, general and administrative
expenses
53,846
52,057
108,511
110,127
Special and restructuring charges
(recoveries), net
5,195
(5,730
)
6,680
3,272
Operating income
9,544
11,878
27,460
89
Other expense (income):
Interest expense, net
14,957
10,203
29,485
19,659
Other (income), net
(1,130
)
(1,638
)
(916
)
(2,924
)
Total other expense, net
13,827
8,565
28,569
16,735
(Loss) income before income taxes
(4,283
)
3,313
(1,109
)
(16,646
)
Provision for (benefit from) income
taxes
4,288
(647
)
7,869
875
Net (Loss) income
$
(8,571
)
$
3,960
$
(8,978
)
$
(17,521
)
Basic (loss) income per common
share:
Net (loss) income per share
$
(0.42
)
$
0.19
$
(0.44
)
$
(0.86
)
Diluted (loss) income per common
share:
Diluted (loss) income per common share
$
(0.42
)
$
0.19
$
(0.44
)
$
(0.86
)
Weighted-average common shares
Basic
20,392
20,361
20,380
20,336
Diluted
20,392
20,428
20,380
20,336
CIRCOR INTERNATIONAL,
INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended
July 2, 2023
July 3, 2022
OPERATING ACTIVITIES
Net loss
$
(8,978
)
$
(17,521
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation
9,769
10,056
Amortization
15,941
18,580
Change in provision for bad debt
expense
(403
)
(221
)
Write down of inventory
1,938
1,181
Compensation expense for share-based
plans
2323
375
Loss on debt extinguishment
—
4,977
Amortization of debt issuance costs
1,951
1,649
(Gain) on sale of real estate
—
(22,008
)
Other impairment charges
—
8,011
Loss on deconsolidation charges
—
4,675
Changes in operating assets and
liabilities:
Trade accounts receivable
266
3,283
Inventories
(28,112
)
(20,548
)
Prepaid expenses and other assets
(7,552
)
(16,947
)
Accounts payable, accrued expenses and
other liabilities
1,036
4,941
Net cash used in operating
activities
(11,821
)
(19,517
)
INVESTING ACTIVITIES
Additions to property, plant and
equipment
(11,054
)
(9,133
)
Proceeds from the sale of property, plant
and equipment
39
80
Proceeds from sale of real estate
—
26,433
Supplier funding (Note 2)
3,386
—
Proceeds from beneficial interest of
factored receivables
2,197
2,336
Net cash (used in) provided by
investing activities
(5,432
)
19,716
FINANCING ACTIVITIES
Proceeds from long-term debt
100,050
124,016
Payments of long-term debt
(87,400
)
(105,616
)
Net change in short-term borrowings
—
(1,573
)
Withholding tax payments on net share
settlements on equity awards
(472
)
(1,187
)
Payment of debt issuance costs
—
(16,701
)
Net cash provided by (used in)
financing activities
12,178
(1,061
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
487
(3,848
)
(DECREASE) IN CASH, CASH EQUIVALENTS, AND
RESTRICTED CASH
(4,588
)
(4,710
)
Cash, cash equivalents, and restricted
cash at beginning of period
66,724
61,374
CASH, CASH EQUIVALENTS, AND RESTRICTED
CASH AT END OF PERIOD
$
62,136
$
56,664
CIRCOR INTERNATIONAL,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands, except share
and per share data) (unaudited)
July 2, 2023
December 31, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
58,637
$
64,275
Trade accounts receivable, net
112,763
109,754
Inventories
166,955
139,786
Prepaid expenses and other current
assets
124,379
117,766
Total Current Assets
462,734
431,581
PROPERTY, PLANT AND EQUIPMENT, NET
141,540
141,141
OTHER ASSETS:
Goodwill
119,739
119,847
Intangibles, net
241,131
256,338
Lease right-of-use assets, net
41,005
42,491
Deferred income taxes
508
512
Other assets
20,089
20,777
TOTAL ASSETS
$
1,026,746
$
1,012,687
LIABILITIES AND SHAREHOLDERS’
EQUITY
CURRENT LIABILITIES:
Accounts payable
$
76,872
$
78,778
Accrued expenses and other current
liabilities
96,971
84,510
Accrued compensation and benefits
28,413
30,817
Total Current Liabilities
202,256
194,105
LONG-TERM DEBT
510,851
496,534
DEFERRED INCOME TAXES
18,305
18,238
PENSION LIABILITY, NET
87,445
85,968
LONG-TERM LEASE LIABILITIES
37,011
38,480
OTHER NON-CURRENT LIABILITIES
17,830
20,316
COMMITMENTS AND CONTINGENCIES (NOTE
10)
SHAREHOLDERS’ EQUITY:
Preferred stock, $0.01 par value;
1,000,000 shares authorized; no shares issued and outstanding at
July 2, 2023 and December 31, 2022
—
—
Common stock, $0.01 par value; 29,000,000
shares authorized; 21,764,256 and 21,736,911 issued at July 2, 2023
and December 31, 2022, respectively
218
218
Additional paid-in capital
457,952
456,102
Accumulated deficit
(187,671
)
(178,693
)
Common treasury stock, at cost (1,372,488
shares at July 2, 2023 and December 31, 2022)
(74,472
)
(74,472
)
Accumulated other comprehensive loss, net
of tax
(42,979
)
(44,109
)
Total Shareholders’ Equity
153,048
159,046
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
1,026,746
$
1,012,687
CIRCOR INTERNATIONAL,
INC.
SUMMARY OF ORDERS AND
BACKLOG
(in millions)
(unaudited)
Three Months Ended
Six Months Ended
July 2, 2023
July 3, 2022
July 2, 2023
July 3, 2022
ORDERS (1)
Aerospace & Defense
$
95.4
$
69.0
$
179.8
$
146.9
Industrial
141.0
139.4
298.7
283.1
Total orders
$
236.4
$
208.4
$
478.5
$
430.0
July 2, 2023
July 3, 2022
BACKLOG (2)
Aerospace & Defense
$
247.6
$
198.9
Industrial
356.7
278.4
Total backlog
$
604.3
$
477.3
1. Orders do not include the foreign
exchange impact due to the re-measurement of customer backlog
amounts denominated in foreign currencies. Industrial includes $0.0
million and $2.3 million orders in Pipeline Engineering for the
three months ended July 2, 2023 and July 3, 2022 respectively.
2. Backlog includes unshipped customer
orders for which revenue has not been recognized.
CIRCOR INTERNATIONAL,
INC.
SEGMENT INFORMATION
(in thousands, except
percentages) (unaudited)
2022
2023
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
2ND QTR
TOTAL
ORDERS
Aerospace & Defense
$
77,890
$
69,053
$
90,486
$
70,778
$
308,207
$
84,400
$
95,410
$
179,810
Industrial
143,727
139,370
137,848
178,069
599,014
157,705
141,033
298,738
Total
$
221,617
$
208,423
$
228,334
$
248,847
$
907,221
$
242,105
$
236,443
$
478,548
NET REVENUES
Aerospace & Defense
$
63,370
$
67,271
$
72,219
$
79,855
$
282,715
$
68,551
$
73,528
$
142,079
Industrial
122,285
124,105
123,143
134,672
504,204
134,546
135,281
269,827
Total
$
185,655
$
191,376
$
195,362
$
214,527
$
786,919
$
203,097
$
208,809
$
411,906
SEGMENT OPERATING INCOME
Aerospace & Defense
$
11,320
$
13,566
$
16,891
$
21,807
$
63,584
$
14,714
$
15,239
$
29,954
Industrial (1)
6,857
8,484
15,717
18,244
49,302
20,402
15,626
36,029
Corporate expenses
(7,770
)
(5,485
)
(5,301
)
(6,828
)
(25,384
)
(6,743
)
(7,157
)
(13,901
)
Total (2)
$
10,407
$
16,565
$
27,307
$
33,223
$
87,502
$
28,373
$
23,708
$
52,082
SEGMENT OPERATING MARGIN %
Aerospace & Defense
17.9
%
20.2
%
23.4
%
27.3
%
22.5
%
21.5
%
20.7
%
21.1
%
Industrial (1)
5.6
%
6.8
%
12.8
%
13.5
%
9.8
%
15.2
%
11.6
%
13.4
%
Total (2)
5.6
%
8.7
%
14.0
%
15.5
%
11.1
%
14.0
%
11.4
%
12.6
%
(1) Industrial Segment operating income
and Industrial segment operating margin % for the second quarter of
2023 include the impact of a deemed contract termination due to
Russia sanctions of $5.4 million, excluding this impact segment
operating income and margin % would have been $21.0 million and
15.5%, respectively for the second quarter of 2023.
(2) Total segment operating income and
total segment operating margin % for the second quarter of 2023
include the impact of a deemed contract termination due to Russia
sanctions of $5.4 million, excluding this impact segment operating
income and margin % would have been $29.1 million and 13.9%,
respectively for the second quarter of 2023.
2022
2023
Pipeline Engineering1
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
2ND QTR
TOTAL
ORDERS - Industrial
$
2,260
$
—
$
—
$
—
$
2,260
$
—
$
—
$
—
NET REVENUES - Industrial
$
3,012
$
218
$
8
$
11
$
3,249
$
—
$
(9
)
$
(9
)
SEGMENT OP. INC. -Industrial
$
(3,190
)
$
(1,074
)
$
(150
)
$
26
$
(4,388
)
$
125
$
104
$
229
Segment Operating Margin %
(105.9
)%
(492.7
)%
(1875.0
)%
236.4
%
(135.1
)%
1. Quantifies the impact of the Pipeline
Engineering business on the Industrial Segment.
CIRCOR INTERNATIONAL,
INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES
(in thousands, except
percentages) (unaudited)
2022
2023
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
2ND QTR
TOTAL
Net Cash (Used In) Provided By Operating
Activities
$
(15,924
)
$
(3,593
)
$
(9,815
)
$
28,511
$
(821
)
$
(13,926
)
$
2,105
$
(11,821
)
LESS
Capital expenditures, net of sale
proceeds1
3,592
5,461
4,156
8,675
21,884
2,637
4,992
7,629
ADJUSTED FREE CASH FLOW
$
(19,516
)
$
(9,054
)
$
(13,971
)
$
19,836
$
(22,705
)
$
(16,563
)
$
(2,887
)
$
(19,450
)
Gross Debt
$
547,681
$
543,100
$
522,975
$
516,925
$
516,925
$
519,600
$
529,575
$
529,575
Less: Cash & Cash equivalents
61,122
55,238
47,131
64,275
64,275
52,080
58,637
58,637
NET DEBT
$
486,559
$
487,862
$
475,844
$
452,650
$
452,650
$
467,520
$
470,938
$
470,938
TOTAL SHAREHOLDERS' EQUITY
$
110,321
$
103,663
$
122,082
$
159,046
$
159,046
$
161,238
$
153,048
$
153,048
GROSS DEBT AS % OF EQUITY
496
%
524
%
428
%
325
%
325
%
322
%
346
%
346
%
NET DEBT AS % OF EQUITY
441
%
471
%
390
%
285
%
285
%
290
%
308
%
308
%
- Includes capital expenditures, net of proceeds of asset sales
and third-party funding for asset purchases from GAAP operating
cash flow.
CIRCOR INTERNATIONAL,
INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES
(in thousands, except
percentages) (unaudited)
2022
2023
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
2ND QTR
TOTAL
NET (LOSS) INCOME
$
(21,481
)
$
3,960
$
31,470
$
5,439
$
19,388
$
(407
)
$
(8,571
)
$
(8,978
)
LESS:
Restructuring related inventory charges
(recoveries), net
2,757
—
—
—
2,757
—
—
—
Restructuring charges (recoveries),
net
6,447
4,695
(173
)
97
11,066
(216
)
(47
)
(263
)
Acquisition amortization
9,391
9,178
9,118
8,651
36,338
7,920
8,010
15,930
Acquisition depreciation
1,045
1,239
1,335
995
4,614
1,053
959
2,012
Special charges (recoveries), net
2,556
(10,425
)
(25,529
)
3,319
(30,079
)
1,700
5,242
6,942
Deemed contract termination due to Russia
sanctions
—
—
—
—
—
—
5,351
5,351
Income tax impact
384
(2,207
)
(2,066
)
(2,739
)
(6,628
)
843
820
1,663
ADJUSTED NET INCOME
$
1,099
$
6,440
$
14,155
$
15,762
$
37,456
$
10,893
$
11,764
$
22,657
(LOSS) EARNINGS PER COMMON SHARE
(Diluted)
$
(1.06
)
$
0.19
$
1.54
$
0.27
$
0.95
$
(0.02
)
$
(0.42
)
$
(0.44
)
LESS:
Restructuring related inventory
charges
0.14
—
—
—
0.14
—
—
—
Restructuring charges (recoveries),
net
0.32
0.23
(0.01
)
—
0.54
(0.01
)
—
(0.01
)
Acquisition amortization
0.46
0.45
0.45
0.42
1.78
0.39
0.39
0.78
Acquisition depreciation
0.05
0.06
0.07
0.05
0.23
0.05
0.05
0.10
Special charges (recoveries), net
0.13
(0.51
)
(1.25
)
0.16
(1.47
)
0.08
0.26
0.34
Deemed contract termination due to Russia
sanctions
—
—
—
—
—
—
0.26
0.26
Income tax impact
0.02
(0.11
)
(0.10
)
(0.13
)
(0.32
)
0.04
0.03
0.07
ADJUSTED EARNINGS PER SHARE
(Diluted)
$
0.05
$
0.32
$
0.69
$
0.77
$
1.83
$
0.53
$
0.57
$
1.10
CIRCOR INTERNATIONAL,
INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES
(in thousands, except
percentages) (unaudited)
2022
2023
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
2ND QTR
TOTAL
NET (LOSS) INCOME
$
(21,481
)
$
3,960
$
31,470
$
5,439
$
19,388
$
(407
)
$
(8,571
)
$
(8,978
)
LESS:
Interest expense, net
9,456
10,203
11,821
13,405
44,886
14,528
14,957
29,485
Depreciation
5,000
5,056
4,956
4,679
19,691
4,712
5,057
9,769
Amortization
9,397
9,183
9,124
8,656
36,360
7,925
8,016
15,941
Provision for (benefit from) income
taxes
1,523
(647
)
1,661
1,742
4,279
3,581
4,288
7,869
EBITDA
$
3,895
$
27,755
$
59,032
$
33,921
$
124,604
$
30,339
$
23,747
$
54,086
LESS:
Restructuring related inventory charges
(recoveries)
2,757
—
—
—
2,757
—
—
—
Restructuring charges (recoveries),
net
6,447
4,695
(173
)
97
11,066
(216
)
(47
)
(263
)
Deemed contract termination due to Russia
sanctions
—
—
—
—
—
—
5,351
5,351
Special charges (recoveries), net
2,556
(10,425
)
(25,529
)
3,319
(30,079
)
1,700
5,242
6,942
ADJUSTED EBITDA
$
15,655
$
22,025
$
33,330
$
37,337
$
108,348
$
31,823
$
34,293
$
66,116
CIRCOR INTERNATIONAL,
INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES
(in thousands, except
percentages) (unaudited)
2022
2023
1ST QTR
2ND QTR
3RD QTR
4TH QTR
TOTAL
1ST QTR
2ND QTR
TOTAL
OPERATING (LOSS) INCOME
$
(11,789
)
$
11,878
$
42,556
$
20,161
$
62,806
$
17,916
$
9,544
$
27,460
LESS:
Restructuring related inventory charges
(recoveries)
2,757
—
—
—
2,757
—
—
—
Restructuring charges (recoveries),
net
6,447
4,695
(173
)
97
11,066
(216
)
(47
)
(263
)
Acquisition amortization
9,391
9,178
9,118
8,651
36,338
7,920
8,010
15,930
Acquisition depreciation
1,045
1,239
1,335
995
4,614
1,053
959
2,012
Special charges (recoveries), net
2,556
(10,425
)
(25,529
)
3,319
(30,079
)
1,700
5,242
6,942
Deemed contract termination due to Russia
sanctions
—
—
—
—
—
—
5,351
5,351
ADJUSTED OPERATING INCOME
$
10,407
$
16,565
$
27,307
$
33,223
$
87,502
$
28,373
$
29,059
$
57,432
OPERATING MARGIN
(6.3
)%
6.2
%
21.8
%
9.4
%
8.0
%
8.8
%
4.6
%
6.7
%
LESS:
Restructuring related inventory charges
(recoveries)
1.5
%
0.0
%
0.0
%
0.0
%
0.4
%
0.0
%
0.0
%
0.0
%
Restructuring charges (recoveries),
net
3.5
%
2.5
%
(0.1
)%
0.0
%
1.4
%
(0.1
)%
0.0
%
(0.1
)%
Acquisition amortization
5.1
%
4.8
%
4.7
%
4.0
%
4.6
%
3.9
%
3.8
%
3.9
%
Acquisition depreciation
0.6
%
0.6
%
0.7
%
0.5
%
0.6
%
0.5
%
0.5
%
0.5
%
Special charges (recoveries), net
1.4
%
(5.4
)%
(13.1
)%
1.5
%
(3.8
)%
0.8
%
2.5
%
1.7
%
Deemed contract termination due to Russia
sanctions
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
2.6
%
1.3
%
ADJUSTED OPERATING MARGIN
5.6
%
8.7
%
14.0
%
15.5
%
11.1
%
14.0
%
13.9
%
13.9
%
CIRCOR INTERNATIONAL,
INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES
(in thousands, except
percentages) (unaudited)
Q2'23 Organic Orders and
Revenue
CIRCOR
Aerospace &
Defense
Industrial
2Q
23
2Q
22
Variance
2Q
23
2Q
22
Variance
2Q
23
2Q
22
Variance
Orders
$
236,443
$
208,423
13
%
$
95,410
$
69,053
38
%
$
141,033
$
139,370
1
%
FX
388
(355
)
743
Organic
$
236,831
$
208,423
14
%
$
95,055
$
69,053
38
%
$
141,776
$
139,370
2
%
CIRCOR
Aerospace &
Defense
Industrial
2Q
23
2Q
22
Variance
2Q
23
2Q
22
Variance
2Q
23
2Q
22
Variance
Revenue
$
208,809
$
191,376
9
%
$
73,528
$
67,271
9
%
$
135,281
$
124,105
9
%
FX
94
(288
)
382
Organic
$
208,903
$
191,376
9
%
$
73,240
$
67,271
9
%
$
135,663
$
124,105
9
%
Note regarding financial statements: Financial amounts
are computed independently each quarter; therefore, the sum of the
quarterly amounts may not equal the total amount for the respective
year due to rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230809158851/en/
Scott Solomon Senior Vice President Sharon Merrill Associates,
Inc. (857) 383-2409
CIRCOR (NYSE:CIR)
Gráfica de Acción Histórica
De Dic 2024 a Ene 2025
CIRCOR (NYSE:CIR)
Gráfica de Acción Histórica
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