CIRCOR Reports First-Quarter 2019 Financial Results
First-Quarter 2019 Highlights
- Orders of
$280 million , down 14% on a reported basis and down 6% on an organic basis - Orders in A&D segment grew nearly 50% year over year
- Revenue of
$270 million , down 2% on a reported basis and up 8% on an organic basis - GAAP Operating Margin of 4.3%; GAAP Loss per Share of
$(0.23) - Adjusted Operating Margin of 7.6%; Adjusted Earnings per Share of
$0.38 - Fluid Handling integration remains on track
- Completed sale of Reliability Services business for cash proceeds of
$85 million - Debt pay down of
$53 million
“We reported solid first-quarter 2019 results with 8% organic revenue growth,” said
“During the quarter we made significant progress transitioning production to our low-cost manufacturing facilities around the world,” continued Mr. Buckhout. “Our Refinery Valve product line is ramping up in
“De-levering the Company remains a top priority. We reduced our debt by
“Looking ahead, we continue to focus on creating long-term value for shareholders by investing in growth, expanding margins, generating strong free cash flow, and de-levering the Company,” concluded Mr. Buckhout.
Second-Quarter 2019 Guidance*
For the second quarter of 2019,
*Guidance speaks only as of April 25, 2019 (when first given).
Selected Consolidated Results (unaudited) |
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($ millions except EPS) | Q1 2019 | Q1 2018 | Change | ||||||||||||
Revenue | $ | 270.4 | $ | 275.6 | (2)% | ||||||||||
Revenue excluding divested business1 | $ | 267.3 |
$ |
257.0 | 4% | ||||||||||
GAAP Operating (Loss) Income | $ | 11.7 | $ | (13.4) | N/M | ||||||||||
Adjusted Operating Income2 | $ | 20.2 | $ | 19.8 | 1% | ||||||||||
GAAP Operating Margin | 4.3% | (4.9)% | N/M | ||||||||||||
Adjusted Operating Margin2 | 7.6% | 7.2% | 40 bps | ||||||||||||
GAAP (Loss) Earnings Per Share (Diluted) | $ | (0.23) | $ | (0.88) | N/M | ||||||||||
Adjusted Earnings Per Share (Diluted)2 | $ | 0.38 | $ | 0.40 | (8)% | ||||||||||
Operating Cash Flow | $ | (22.4) | $ | (0.1) | N/M | ||||||||||
Free Cash Flow3 | $ | (26.1) | $ | (8.3) | N/M | ||||||||||
Orders | $ | 279.6 | $ | 326.2 | (14)% | ||||||||||
Orders excluding divested business1 | $ | 275.5 |
$ |
304.4 | (9)% |
Segment Results |
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($ millions) | Q1 2019 | Q1 2018 | Change | ||||||||||||
Energy | |||||||||||||||
Revenue | $ | 98.4 | $ | 100.0 | (2)% | ||||||||||
Revenue excluding divested business1 | $ | 95.3 |
$ |
85.2 | 12% | ||||||||||
Segment Operating Income | $ | 6.8 | $ | 5.7 | 19% | ||||||||||
Segment Operating Margin | 7.1% | 5.7% | 140 bps | ||||||||||||
Orders | $ | 67.8 | $ | 129.8 | (48)% | ||||||||||
Orders excluding divested business1 | $ | 63.7 | $ | 112.9 | (44)% | ||||||||||
Aerospace & Defense | |||||||||||||||
Revenue | $ | 61.2 | $ | 58.5 | 5% | ||||||||||
Segment Operating Income | $ | 9.4 | $ | 8.9 | 6% | ||||||||||
Segment Operating Margin | 15.3% | 15.3% | 0 bps | ||||||||||||
Orders | $ | 88.1 | $ | 59.8 | 47% | ||||||||||
Industrial | |||||||||||||||
Revenue | $ | 110.7 | $ | 117.1 | (5)% | ||||||||||
Revenue excluding divested business1 | $ | 110.7 | $ | 113.2 |
(2)% |
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Segment Operating Income | $ | 10.8 | $ | 12.9 | (16)% | ||||||||||
Segment Operating Margin | 9.7% | 11.1% | (140) bps | ||||||||||||
Orders | $ | 123.7 | $ | 136.6 | (9)% | ||||||||||
Orders excluding divested business1 |
$ |
123.7 | $ | 131.8 | (6)% |
1.Orders and revenue excluding divested businesses is a non-GAAP measure and is calculated by subtracting the orders and revenues generated by the divested businesses during the periods prior to their divestiture from the reported orders and revenues.
2.Adjusted Consolidated and Segment Results for Q1 2019 exclude non-cash acquisition-related intangible amortization, special and restructuring charges totaling
3.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
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, pro forma combined amounts and pro forma organic growth 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 reflect our ongoing business and facilitate 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.
- Due to the significance of recently sold businesses and to provide a comparison of changes in our orders and revenue, we also discuss these changes on an “organic” basis. Organic is calculated assuming the divestitures were completed on
January 1, 2018 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 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
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
About
CIRCOR INTERNATIONAL, INC. |
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Three Months Ended | ||||||||||
March 31, 2019 | April 1, 2018 | |||||||||
Net revenues | $ | 270,395 | $ | 275,580 | ||||||
Cost of revenues | 196,526 | 199,276 | ||||||||
GROSS PROFIT | 73,869 | 76,304 | ||||||||
Selling, general and administrative expenses | 69,973 | 77,238 | ||||||||
Special and restructuring (recoveries) charges, net | (7,816 | ) | 12,446 | |||||||
OPERATING INCOME | 11,712 | (13,380 | ) | |||||||
Other expense (income): | ||||||||||
Interest expense, net | 13,179 | 11,801 | ||||||||
Other (income) expense, net | (1,913 | ) | (1,861 | ) | ||||||
TOTAL OTHER EXPENSE, NET | 11,266 | 9,940 | ||||||||
INCOME (LOSS) BEFORE INCOME TAXES | 446 | (23,320 | ) | |||||||
Provision for (benefit from) income taxes | 5,079 | (5,879 | ) | |||||||
NET LOSS | $ | (4,633 | ) | $ | (17,441 | ) | ||||
Loss per common share: | ||||||||||
Basic | $ | (0.23 | ) | $ | (0.88 | ) | ||||
Diluted | $ | (0.23 | ) | $ | (0.88 | ) | ||||
Weighted average number of common shares outstanding: | ||||||||||
Basic | 19,870 | 19,806 | ||||||||
Diluted | 19,870 | 19,806 |
CIRCOR INTERNATIONAL, INC. |
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Three Months Ended | ||||||||||
OPERATING ACTIVITIES | March 31, 2019 | April 1, 2018 | ||||||||
Net Loss | $ | (4,633 | ) | $ | (17,441 | ) | ||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||
Depreciation | 5,944 | 7,334 | ||||||||
Amortization | 12,836 | 12,329 | ||||||||
Bad debt expense | 109 | 261 | ||||||||
Loss on write down of inventory | 3,368 | 963 | ||||||||
Amortization of inventory fair value step-up | — | 6,600 | ||||||||
Compensation expense for share-based plans | 1,432 | 1,365 | ||||||||
Amortization of debt issuance costs | 1,010 | 881 | ||||||||
Loss on sale or write-down of property, plant and equipment | 96 | 1,284 | ||||||||
Gain on sale of business | (10,282 | ) | — | |||||||
Changes in operating assets and liabilities, net of effects of acquisition and divestitures: | ||||||||||
Trade accounts receivable | 8,635 | 22,038 | ||||||||
Inventories | 3,452 | (14,850 | ) | |||||||
Prepaid expenses and other assets | (2,881 | ) | (11,648 | ) | ||||||
Accounts payabale, accrued expenses and other liabilities | (23,052 | ) | (9,261 | ) | ||||||
Net cash used in operating activities | (22,378 | ) | (145 | ) | ||||||
INVESTING ACTIVITIES | ||||||||||
Additions to property, plant and equipment | (3,717 | ) | (8,234 | ) | ||||||
Proceeds from the sale of property, plant and equipment | 28 | 93 | ||||||||
Proceeds from the sale of business, net | 83,321 | — | ||||||||
Net cash provided by (used in) investing activities | 79,632 | (8,141 | ) | |||||||
FINANCING ACTIVITIES | ||||||||||
Proceeds from long-term debt | 87,400 | 71,950 | ||||||||
Payments of short-term and long-term debt | (140,500 | ) | (44,106 | ) | ||||||
Proceeds from the exercise of stock options | — | 301 | ||||||||
Return of cash to Fluid Handling Seller | — | (7,905 | ) | |||||||
Net cash (used in) provided by financing activities | (53,100 | ) | 20,240 | |||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 957 | 956 | ||||||||
INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | 5,111 | 12,910 | ||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 69,525 | 112,293 | ||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD | $ | 74,636 | $ | 125,203 |
CIRCOR INTERNATIONAL, INC. |
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March 31, 2019 | December 31, 2018 | ||||||||
ASSETS | |||||||||
CURRENT ASSETS: | |||||||||
Cash and cash equivalents | $ | 73,619 | $ | 68,517 | |||||
Trade accounts receivable, less allowance for doubtful accounts | 188,500 | 183,552 | |||||||
Inventories | 217,991 | 217,378 | |||||||
Prepaid expenses and other current assets | 89,904 | 90,659 | |||||||
Assets held for sale | 4,623 | 87,940 | |||||||
Total Current Assets | 574,637 | 648,046 | |||||||
PROPERTY, PLANT AND EQUIPMENT, NET | 198,148 | 201,799 | |||||||
OTHER ASSETS: | |||||||||
Goodwill | 460,995 | 459,205 | |||||||
Intangibles, net | 422,302 | 441,302 | |||||||
Deferred income taxes | 25,632 | 28,462 | |||||||
Other assets | 37,620 | 12,798 | |||||||
TOTAL ASSETS | $ | 1,719,334 | $ | 1,791,612 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||
CURRENT LIABILITIES: | |||||||||
Accounts payable | $ | 122,277 | $ | 123,881 | |||||
Accrued expenses and other current liabilities | 99,591 | 107,312 | |||||||
Accrued compensation and benefits | 27,251 | 33,878 | |||||||
Liabilities held for sale | — | 11,141 | |||||||
Current portion of long-term debt | — | 7,850 | |||||||
Total Current Liabilities | 249,119 | 284,062 | |||||||
LONG-TERM DEBT | 733,666 | 778,187 | |||||||
DEFERRED INCOME TAXES | 33,780 | 33,932 | |||||||
PENSION LIABILITY, NET | 148,297 | 150,623 | |||||||
OTHER NON-CURRENT LIABILITIES | 38,295 | 15,815 | |||||||
SHAREHOLDERS’ EQUITY | 516,177 | 528,993 | |||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 1,719,334 | $ | 1,791,612 |
CIRCOR INTERNATIONAL, INC. |
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Three Months Ended | |||||||||
March 31, 2019 | April 1, 2018 | ||||||||
ORDERS (1) | |||||||||
Energy | $ | 67.8 | $ | 129.8 | |||||
Aerospace & Defense | 88.1 | 59.8 | |||||||
Industrial | 123.7 | 136.6 | |||||||
Total orders | $ | 279.6 | $ | 326.2 | |||||
BACKLOG (2) | March 31, 2019 | April 1, 2018 | |||||||
Energy | $ | 140.3 | $ | 224.1 | |||||
Aerospace & Defense | 206.5 | 165.8 | |||||||
Industrial | 174.2 | 170.6 | |||||||
Total backlog | $ | 521.0 | $ | 560.5 | |||||
Note 1: Orders do not include the foreign exchange impact due to the re-measurement of customer order backlog amounts denominated in foreign currencies. Q1 2019 and 2018 orders include
Note 2: Backlog includes unshipped customer orders for which revenue has not been recognized. Backlog at Q1 2018 includes
CIRCOR INTERNATIONAL, INC. |
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2018 | 2019 | |||||||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | |||||||||||||||||||||||||
ORDERS | ||||||||||||||||||||||||||||||
Energy | $ | 129,762 | $ | 113,171 | $ | 110,987 | $ | 97,990 | $ | 451,910 | $ | 67,770 | ||||||||||||||||||
Aerospace & Defense | 59,793 | 59,441 | 81,533 | 76,702 | 277,469 | 88,107 | ||||||||||||||||||||||||
Industrial | 136,607 | 136,746 | 114,876 | 121,886 | 510,115 | 123,746 | ||||||||||||||||||||||||
Total | $ | 326,162 | $ | 309,358 | $ | 307,396 | $ | 296,578 | $ | 1,239,494 | $ | 279,623 | ||||||||||||||||||
NET REVENUES | ||||||||||||||||||||||||||||||
Energy | $ | 99,972 | $ | 112,804 | $ | 121,023 | $ | 117,433 | $ | 451,232 | $ | 98,417 | ||||||||||||||||||
Aerospace & Defense | 58,477 | 57,500 | 57,757 | 63,283 | 237,017 | 61,240 | ||||||||||||||||||||||||
Industrial | 117,131 | 131,064 | 118,734 | 120,647 | 487,576 | 110,738 | ||||||||||||||||||||||||
Total | $ | 275,580 | $ | 301,368 | $ | 297,514 | $ | 301,363 | $ | 1,175,825 | $ | 270,395 | ||||||||||||||||||
SEGMENT OPERATING INCOME | ||||||||||||||||||||||||||||||
Energy | $ | 5,696 | $ | 9,242 | $ | 9,163 | $ | 9,396 | $ | 33,497 | $ | 6,783 | ||||||||||||||||||
Aerospace & Defense | 8,931 | 6,992 | 8,709 | 11,415 | 36,047 | 9,374 | ||||||||||||||||||||||||
Industrial | 12,948 | 15,037 | 14,609 | 14,746 | 57,340 | 10,787 | ||||||||||||||||||||||||
Corporate expenses | (7,802 | ) | (6,448 | ) | (8,034 | ) | (8,015 | ) | (30,299 | ) | (6,705 | ) | ||||||||||||||||||
Adjusted Operating Income | $ | 19,773 | $ | 24,823 | $ | 24,447 | $ | 27,542 | $ | 96,585 | $ | 20,239 | ||||||||||||||||||
SEGMENT OPERATING MARGIN % | ||||||||||||||||||||||||||||||
Energy | 5.7 | % | 8.2 | % | 7.6 | % | 8.0 | % | 7.4 | % | 6.9 | % | ||||||||||||||||||
Aerospace & Defense | 15.3 | % | 12.2 | % | 15.1 | % | 18.0 | % | 15.2 | % | 15.3 | % | ||||||||||||||||||
Industrial | 11.1 | % | 11.5 | % | 12.3 | % | 12.2 | % | 11.8 | % | 9.7 | % | ||||||||||||||||||
CIRCOR Adjusted Operating Margin | 7.2 | % | 8.2 | % | 8.2 | % | 9.1 | % | 8.2 | % | 7.5 | % | ||||||||||||||||||
SEGMENT OPERATING MARGIN % EXCLUDING DIVESTITURES | ||||||||||||||||||||||||||||||
Energy | 6.7 | % | 7.5 | % | 6.0 | % | 7.8 | % | 7.0 | % | 7.1 | % | ||||||||||||||||||
Aerospace & Defense | 15.3 | % | 12.2 | % | 15.1 | % | 18.0 | % | 15.2 | % | 15.3 | % | ||||||||||||||||||
Industrial | 11.4 | % | 11.9 | % | 12.8 | % | 12.7 | % | 12.2 | % | 9.7 | % | ||||||||||||||||||
CIRCOR Adjusted Operating Margin Excluding Divestitures | 7.7 | % | 8.2 | % | 7.9 | % | 9.3 | % | 8.3 | % | 7.6 | % |
CIRCOR INTERNATIONAL, INC. |
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SUPPLEMENTAL INFORMATION REGARDING DIVESTED BUSINESSES | |||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||
UNAUDITED | |||||||||||||||||||||||||||||
2018 | 2019 | ||||||||||||||||||||||||||||
DIVESTED BUSINESSES |
1st QTR | 2nd QTR | 3rd QTR | 4th QTR | Total | 1st QTR | |||||||||||||||||||||||
ORDERS | |||||||||||||||||||||||||||||
Energy | $ | 16,891 | $ | 18,389 | $ | 19,145 | $ | 15,451 | $ | 69,875 | $ | 4,104 | |||||||||||||||||
Industrial | 4,848 | 4,484 | 2,302 | 4,796 | 16,430 | — | |||||||||||||||||||||||
CIRCOR | $ | 21,738 | $ | 22,873 | $ | 21,446 | $ | 20,247 | $ | 86,305 | $ | 4,104 | |||||||||||||||||
NET REVENUES | |||||||||||||||||||||||||||||
Energy | $ | 14,731 | $ | 17,419 | $ | 16,579 | $ | 16,885 | $ | 65,613 | $ | 3,106 | |||||||||||||||||
Industrial | 3,897 | 1,499 | 2,070 | 3,846 | 11,312 | — | |||||||||||||||||||||||
CIRCOR | $ | 18,628 | $ | 18,918 | $ | 18,649 | $ | 20,731 | $ | 76,925 | $ | 3,106 | |||||||||||||||||
SEGMENT OPERATING INCOME | |||||||||||||||||||||||||||||
Energy | $ | 8 | $ | 2,085 | $ | 2,905 | $ | 1,597 | $ | 6,596 | $ | — | |||||||||||||||||
Industrial | 79 |
(427 |
) |
(371 |
) |
(78 |
) |
(798 |
) |
— | |||||||||||||||||||
CIRCOR | $ | 87 | $ | 1,658 | $ | 2,534 | $ | 1,519 | $ | 5,798 | $ | — |
CIRCOR INTERNATIONAL, INC. | ||||||||||||||||||||||||||||||
RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS | ||||||||||||||||||||||||||||||
(in thousands, except percentages) | ||||||||||||||||||||||||||||||
UNAUDITED | ||||||||||||||||||||||||||||||
2018 | 2019 | |||||||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | |||||||||||||||||||||||||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | $ | (145 | ) | $ | (465 | ) | $ | 24,073 | $ | 30,531 | $ | 53,994 | $ | (22,378 | ) | |||||||||||||||
LESS: | ||||||||||||||||||||||||||||||
Capital expenditures, net of sale proceeds | 8,141 | 3,563 | 5,119 | 6,534 | 23,357 | 3,689 | ||||||||||||||||||||||||
FREE CASH FLOW | $ | (8,286 | ) | $ | (4,028 | ) | $ | 18,954 | $ | 23,997 | $ | 30,637 | $ | (26,067 | ) | |||||||||||||||
GROSS DEBT | $ | 823,665 | $ | 827,629 | $ | 831,613 | $ | 807,050 | $ | 807,050 | $ | 753,950 | ||||||||||||||||||
LESS: Cash & cash equivalents | 123,305 | 69,030 | 71,334 | 68,517 | 68,517 | 73,619 | ||||||||||||||||||||||||
GROSS DEBT, NET OF CASH | $ | 700,360 | $ | 758,599 | $ | 760,279 | $ | 738,533 | $ | 738,533 | $ | 680,331 | ||||||||||||||||||
TOTAL SHAREHOLDERS' EQUITY | $ | 592,096 | $ | 573,992 | $ | 574,171 | $ | 528,993 | $ | 528,993 | $ | 516,177 | ||||||||||||||||||
GROSS DEBT AS % OF EQUITY | 139 | % | 144 | % | 145 | % | 153 | % | 153 | % | 146 | % | ||||||||||||||||||
GROSS DEBT, NET OF CASH AS % OF EQUITY | 118 | % | 132 | % | 132 | % | 140 | % | 140 | % | 132 | % |
CIRCOR INTERNATIONAL, INC. | ||||||||||||||||||||||||||||||
RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS | ||||||||||||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||||||||||
UNAUDITED | ||||||||||||||||||||||||||||||
2018 | 2019 | |||||||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | |||||||||||||||||||||||||
NET INCOME (LOSS) | $ | (17,441 | ) | $ | 5,902 | $ | (6,841 | ) | $ | (21,005 | ) | $ | (39,385 | ) | $ | (4,633 | ) | |||||||||||||
LESS: | ||||||||||||||||||||||||||||||
Restructuring related inventory charges | 473 | 1,067 | — | 864 | 2,404 | 3,142 | ||||||||||||||||||||||||
Amortization of inventory step-up | 6,600 | — | — | — | 6,600 | — | ||||||||||||||||||||||||
Restructuring charges, net | 9,615 | 844 | 1,348 | 944 | 12,751 | 863 | ||||||||||||||||||||||||
Acquisition amortization | 11,797 | 11,767 | 11,733 | 12,012 | 47,309 | 12,077 | ||||||||||||||||||||||||
Acquisition depreciation | 1,837 | 1,735 | 1,742 | 1,735 | 7,049 | 1,123 | ||||||||||||||||||||||||
Special (recoveries) charges, net | 2,831 | 1,156 | 1,408 | 5,692 | 11,087 | (8,678 | ) | |||||||||||||||||||||||
Income tax impact | (7,687 | ) | (11,056 | ) | 967 | 12,124 | (5,652 | ) | 3,751 | |||||||||||||||||||||
ADJUSTED NET INCOME | $ | 8,025 | $ | 11,415 | $ | 10,357 | $ | 12,366 | $ | 42,163 | $ | 7,645 | ||||||||||||||||||
EARNINGS (LOSS) PER COMMON SHARE (Diluted) | $ | (0.88 | ) | $ | 0.30 | $ | (0.34 | ) | $ | (1.05 | ) | $ | (1.97 | ) | $ | (0.23 | ) | |||||||||||||
LESS: | ||||||||||||||||||||||||||||||
Restructuring related inventory charges | 0.02 | 0.05 | — | 0.04 | 0.12 | 0.16 | ||||||||||||||||||||||||
Amortization of inventory step-up | 0.33 | — | — | — | 0.33 | — | ||||||||||||||||||||||||
Restructuring charges, net | 0.49 | 0.04 | 0.07 | 0.05 | 0.64 | 0.04 | ||||||||||||||||||||||||
Acquisition amortization | 0.60 | 0.59 | 0.59 | 0.60 | 2.37 | 0.60 | ||||||||||||||||||||||||
Acquisition depreciation | 0.09 | 0.09 | 0.09 | 0.09 | 0.35 | 0.06 | ||||||||||||||||||||||||
Special (recoveries) charges, net | 0.14 | 0.06 | 0.07 | 0.29 | 0.55 | (0.43 | ) | |||||||||||||||||||||||
Income tax impact | (0.39 | ) | (0.55 | ) | 0.05 | 0.61 | (0.28 | ) | 0.19 | |||||||||||||||||||||
ADJUSTED EARNINGS PER SHARE (Diluted) | $ | 0.40 | $ | 0.57 | $ | 0.52 | $ | 0.62 | $ | 2.11 | $ | 0.38 |
CIRCOR INTERNATIONAL, INC. | ||||||||||||||||||||||||||||||
RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS | ||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||
UNAUDITED | ||||||||||||||||||||||||||||||
2018 | 2019 | |||||||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | |||||||||||||||||||||||||
NET INCOME (LOSS) | $ | (17,441 | ) | $ | 5,902 | $ | (6,841 | ) | $ | (21,005 | ) | $ | (39,384 | ) | $ | (4,633 | ) | |||||||||||||
LESS: | ||||||||||||||||||||||||||||||
Interest expense, net | (11,801 | ) | (13,755 | ) | (14,100 | ) | (13,257 | ) | (52,913 | ) | (13,179 | ) | ||||||||||||||||||
Depreciation | (7,334 | ) | (7,157 | ) | (7,065 | ) | (7,198 | ) | (28,754 | ) | (5,944 | ) | ||||||||||||||||||
Amortization | (12,329 | ) | (12,282 | ) | (12,234 | ) | (12,410 | ) | (49,255 | ) | (12,836 | ) | ||||||||||||||||||
Benefit from (provision for) income taxes | 5,879 | 7,646 | (2,537 | ) | (14,278 | ) | (3,290 | ) | (5,079 | ) | ||||||||||||||||||||
EBITDA | $ | 8,144 | $ | 31,450 | $ | 29,095 | $ | 26,138 | $ | 94,828 | $ | 32,405 | ||||||||||||||||||
LESS: | ||||||||||||||||||||||||||||||
Restructuring related inventory charges | (473 | ) | (1,067 | ) | — | (864 | ) | (2,404 | ) | (3,142 | ) | |||||||||||||||||||
Amortization of inventory step-up | (6,600 | ) | — | — | — | (6,600 | ) | — | ||||||||||||||||||||||
Restructuring charges, net | (9,615 | ) | (844 | ) | (1,348 | ) | (944 | ) | (12,751 | ) | (863 | ) | ||||||||||||||||||
Special recoveries (charges), net | (2,831 | ) | (1,156 | ) | (1,408 | ) | (5,692 | ) | (11,087 | ) | 8,678 | |||||||||||||||||||
ADJUSTED EBITDA | $ | 27,663 | $ | 34,517 | $ | 31,851 | $ | 33,638 | $ | 127,669 | $ | 27,732 |
CIRCOR INTERNATIONAL, INC. | ||||||||||||||||||||||||||||||
RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS | ||||||||||||||||||||||||||||||
(in thousands, except percentages) | ||||||||||||||||||||||||||||||
UNAUDITED | ||||||||||||||||||||||||||||||
2018 | 2019 | |||||||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | |||||||||||||||||||||||||
GAAP OPERATING INCOME (LOSS) | $ | (13,380 | ) | $ | 8,252 | $ | 8,216 | $ | 6,296 | $ | 9,384 | $ | 11,712 | |||||||||||||||||
LESS: | ||||||||||||||||||||||||||||||
Restructuring related inventory charges | 473 | 1,067 | — | 864 | 2,404 | 3,142 | ||||||||||||||||||||||||
Amortization of inventory step-up | 6,600 | — | — | — | 6,600 | — | ||||||||||||||||||||||||
Restructuring charges, net | 9,615 | 844 | 1,348 | 944 | 12,751 | 863 | ||||||||||||||||||||||||
Acquisition amortization | 11,797 | 11,767 | 11,733 | 12,012 | 47,309 | 12,077 | ||||||||||||||||||||||||
Acquisition depreciation | 1,837 | 1,735 | 1,742 | 1,735 | 7,049 | 1,123 | ||||||||||||||||||||||||
Special (recoveries) charges, net | 2,831 | 1,156 | 1,408 | 5,692 | 11,087 | (8,678 | ) | |||||||||||||||||||||||
ADJUSTED OPERATING INCOME | $ | 19,773 | $ | 24,821 | $ | 24,447 | $ | 27,543 | $ | 96,584 | $ | 20,240 | ||||||||||||||||||
GAAP OPERATING MARGIN | (4.9 | )% | 2.7 | % | 2.8 | % | 2.1 | % | 0.8 | % | 4.3 | % | ||||||||||||||||||
LESS: | ||||||||||||||||||||||||||||||
Restructuring related inventory charges | 0.2 | % | 0.4 | % | — | % | 0.3 | % | 0.2 | % | 1.2 | % | ||||||||||||||||||
Amortization of inventory step-up | 2.4 | % | — | % | — | % | — | % | 0.6 | % | — | % | ||||||||||||||||||
Restructuring charges, net | 3.5 | % | 0.3 | % | 0.5 | % | 0.3 | % | 1.1 | % | 0.3 | % | ||||||||||||||||||
Acquisition amortization | 4.3 | % | 3.9 | % | 3.9 | % | 4.0 | % | 4.0 | % | 4.5 | % | ||||||||||||||||||
Acquisition depreciation | 0.7 | % | 0.6 | % | 0.6 | % | 0.6 | % | 0.6 | % | 0.4 | % | ||||||||||||||||||
Special (recoveries) charges, net | 1.0 | % | 0.4 | % | 0.5 | % | 1.9 | % | 0.9 | % | (3.2 | )% | ||||||||||||||||||
ADJUSTED OPERATING MARGIN | 7.2 | % | 8.2 | % | 8.2 | % | 9.1 | % | 8.2 | % | 7.5 | % | ||||||||||||||||||
Impact of Divestitures | 0.5 | % | — | % | (0.3 | )% | 0.2 | % | 0.1 | % | 0.1 | % | ||||||||||||||||||
ADJUSTED OPERATING MARGIN EXCLUDING DIVESTITURES | 7.7 | % | 8.2 | % | 7.9 | % | 9.3 | % | 8.3 | % | 7.6 | % |
CIRCOR INTERNATIONAL, INC. |
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Industrial | Energy | Aerospace & Defense | CIRCOR | |||||||||||||||||||||||||||||||||||||
ORDERS | $ | % | $ | % | $ | % | $ | % | ||||||||||||||||||||||||||||||||
Q1 2018 | $ | 136.6 | $ | 129.8 | $ | 59.8 | $ | 326.2 | ||||||||||||||||||||||||||||||||
Divestitures | (4.8 | ) | (16.9 | ) | 0 | (21.7 | ) | |||||||||||||||||||||||||||||||||
Q1 2018 Excluding Divestitures | 131.8 | 112.9 | 59.8 | 304.4 | ||||||||||||||||||||||||||||||||||||
Organic | (1.3 | ) | -1 | % | (48.0 | ) |
-42 |
% | 29.7 | 50 | % | (19.5 | ) | -6 | % | |||||||||||||||||||||||||
Acquisition / Divestiture | 0 | 0 | % | 4.1 | 4 | % | 0 | 0 | % | 4.1 | 1 | % | ||||||||||||||||||||||||||||
FX | (6.8 | ) | -5 | % | (1.3 | ) | -1 | % | (1.4 | ) | -2 | % | (9.4 | ) | -3 | % | ||||||||||||||||||||||||
Total Change Excluding Divestitures | (8.0 | ) | -6 | % | (45.1 | ) |
-40 |
% | 28.3 | 47 | % | (24.8 | ) | -8 | % | |||||||||||||||||||||||||
Q1 2019 | $ | 123.7 | $ | 67.8 | $ | 88.1 | $ | 279.6 | ||||||||||||||||||||||||||||||||
Industrial | Energy | Aerospace & Defense | CIRCOR | |||||||||||||||||||||||||||||||||||||
NET REVENUE | $ | % | $ | % | $ | % | $ | % | ||||||||||||||||||||||||||||||||
Q1 2018 |
$ |
117.1 |
$ |
100 |
$ |
58.5 |
$ |
275.6 |
||||||||||||||||||||||||||||||||
Divestitures | (3.9 | ) | (14.7 | ) | 0 | (18.6 | ) | |||||||||||||||||||||||||||||||||
Q1 2018 Excluding Divestitures | 113.2 | 85.2 | 58.5 | 257.0 | ||||||||||||||||||||||||||||||||||||
Organic | 3.8 | 3 | % | 12.1 | 14 | % | 4.0 | 7 | % | 20.0 | 8 | % | ||||||||||||||||||||||||||||
Acquisition / Divestiture | 0 | 0 | % | 3.1 | 4 | % | 0 | 0 | % | 3.1 | 1 | % | ||||||||||||||||||||||||||||
FX | (6.3 | ) | -6 | % | (2.1 | ) | -2 | % | (1.3 | ) | -2 | % | (9.6 | ) | -4 | % | ||||||||||||||||||||||||
Total Change Excluding Divestitures | (2.5 | ) | -2 | % | 13.2 |
15 |
% | 2.7 | 5 | % | 13.5 | 5 | % | |||||||||||||||||||||||||||
Q1 2019 | $ | 110.7 | $ | 98.4 | $ | 61.2 | $ | 270.4 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20190425006039/en/
Source:
David F. Mullen
Senior Vice President Finance
CIRCOR International
(781) 270-1200