CIRCOR Reports Third-Quarter 2018 Financial Results
Third-Quarter 2018 Highlights
- Orders of
$307 million , up 94% on a reported basis and up 13% on a pro forma organic basis - Revenue of
$298 million , up 86% on a reported basis and up 10% on a pro forma organic basis - GAAP Loss per Share of
$0.34 ; Adjusted Earnings per Share of$0.52 - Operating Cash Flow of
$24 million ; Free Cash Flow of$19 million - Debt pay down of
$18 million - Fluid Handling integration remains on track
“Organic growth in our
“Our working capital and cash management actions are gaining traction,
and during the quarter we generated
“The integration of Fluid Handling is on track, and our synergy plan is ahead of schedule. We expect to deliver the committed run-rate cost synergies by the end of year three, a year earlier than our original timeline. We remain focused on driving long-term growth and de-levering the Company through debt reduction and margin enhancement,” concluded Buckhout.
Fourth-Quarter 2018 Guidance
For the fourth quarter of 2018,
Selected Consolidated Results (unaudited) |
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($ millions except EPS) | Q3 2018 | Q3 2017 | Change | ||||||||
Revenue | $ | 297.5 | $ | 159.7 | 86% | ||||||
GAAP Operating Income | $ | 8.2 | $ | 6.9 | 19% | ||||||
Adjusted Operating Income1 | $ | 24.4 | $ | 11.9 | 105% | ||||||
GAAP Operating Margin | 2.8% | 4.3% | (150) bps | ||||||||
Adjusted Operating Margin1 | 8.2% | 7.4% | 80 bps | ||||||||
GAAP (Loss) Earnings Per Share (Diluted) | $ | (0.34) | $ | 0.22 | (255)% | ||||||
Adjusted Earnings Per Share (Diluted)1 | $ | 0.52 | $ | 0.43 | 21% | ||||||
Operating Cash Flow | $ | 24.1 | $ | (16.9) | 243% | ||||||
Free Cash Flow2 | $ | 19.0 | $ | (19.2) | 199% | ||||||
Orders | $ | 307.4 | $ | 158.1 | 94% |
Segment Results |
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($ millions) | Q3 2018 | Q3 2017 |
|
Change |
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Industrial | |||||||||||
Revenue | $ | 118.7 | $ | 30.0 | 296% | ||||||
Segment Operating Income | $ | 14.6 | $ | 5.7 | 156% | ||||||
Segment Operating Margin | 12.3% | 18.9% | (660) bps | ||||||||
Orders | $ | 114.9 | $ | 27.3 | 321% | ||||||
Energy | |||||||||||
Revenue | $ | 121.0 | $ | 88.6 | 37% | ||||||
Segment Operating Income | $ | 9.2 | $ | 6.9 | 33% | ||||||
Segment Operating Margin | 7.6% | 7.8% | (20) bps | ||||||||
Orders | $ | 111.0 | $ | 84.9 | 31% | ||||||
Aerospace & Defense | |||||||||||
Revenue | $ | 57.8 | $ | 41.1 | 41% | ||||||
Segment Operating Income | $ | 8.7 | $ | 4.3 | 102% | ||||||
Segment Operating Margin | 15.1% | 10.5% | 460 bps | ||||||||
Orders | $ | 81.5 | $ | 45.9 | 78% |
1.Adjusted Consolidated and Segment Results for Q3 2018
exclude non-cash acquisition-related intangible amortization, special
and restructuring charges totaling
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
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 the Fluid Handling acquisition and to
provide a more meaningful comparison of changes in our orders and
revenue, we also discuss these changes on a “pro forma organic” basis.
Pro forma organic is calculated assuming the Fluid Handling
acquisition was completed on
January 1, 2017 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 | Nine Months Ended | |||||||||||||||||||
September 30, |
October 1, |
September 30, |
October 1, |
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Net revenues | $ | 297,514 | $ | 159,693 | $ | 874,462 | $ | 456,131 | ||||||||||||
Cost of revenues | 212,436 | 112,390 | 624,829 | 314,527 | ||||||||||||||||
GROSS PROFIT | 85,078 | 47,303 | 249,633 | 141,604 | ||||||||||||||||
Selling, general and administrative expenses | 74,106 | 38,120 | 229,343 | 116,425 | ||||||||||||||||
Special and restructuring charges (recoveries), net | 2,756 | 2,319 | 17,202 | (443 | ) | |||||||||||||||
OPERATING INCOME | 8,216 | 6,864 | 3,088 | 25,622 | ||||||||||||||||
Other expense (income): | ||||||||||||||||||||
Interest expense, net | 14,100 | 2,445 | 39,656 | 6,298 | ||||||||||||||||
Other (income) expense, net | (1,580 | ) | 823 | (7,200 | ) | 2,022 | ||||||||||||||
TOTAL OTHER EXPENSE, NET | 12,520 | 3,268 | 32,456 | 8,320 | ||||||||||||||||
(LOSS) INCOME BEFORE INCOME TAXES | (4,304 | ) | 3,596 | (29,368 | ) | 17,302 | ||||||||||||||
Provision for (benefit from) income taxes | 2,537 | (21 | ) | (10,988 | ) | (57 | ) | |||||||||||||
NET (LOSS) INCOME | $ | (6,841 | ) | $ | 3,617 | $ | (18,380 | ) | $ | 17,359 | ||||||||||
(Loss) Earnings per common share: | ||||||||||||||||||||
Basic | $ | (0.34 | ) | $ | 0.22 | $ | (0.93 | ) | $ | 1.05 | ||||||||||
Diluted | $ | (0.34 | ) | $ | 0.22 | $ | (0.93 | ) | $ | 1.04 | ||||||||||
Weighted average number of common shares outstanding: | ||||||||||||||||||||
Basic | 19,843 | 16,503 | 19,829 | 16,486 | ||||||||||||||||
Diluted | 19,843 | 16,709 | 19,829 | 16,721 | ||||||||||||||||
Dividends declared per common share | $ | — | $ | 0.0375 | $ | — | $ | 0.1125 |
CIRCOR INTERNATIONAL, INC.
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Nine Months Ended | ||||||||||
OPERATING ACTIVITIES |
September 30, |
October 1, |
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Net (loss) income | $ | (18,380 | ) | $ | 17,359 | |||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||||
Depreciation | 21,556 | 10,889 | ||||||||
Amortization | 36,845 | 9,491 | ||||||||
Bad debt expense | 1,078 | 265 | ||||||||
Loss on write down of inventory | 4,632 | 1,463 | ||||||||
Amortization of inventory fair value step-up | 6,600 | — | ||||||||
Compensation expense of share-based plans | 4,303 | 2,696 | ||||||||
Change in fair value of contingent consideration | — | (12,200 | ) | |||||||
Amortization of debt issuance costs | 2,852 | — | ||||||||
Loss on sale or write down of property, plant and equipment | 1,305 | 87 | ||||||||
Loss on sale of business | — | 5,300 | ||||||||
Changes in operating assets and liabilities, net of effects of acquisition and disposition: | ||||||||||
Trade accounts receivable | 21,510 | 8,782 | ||||||||
Inventories | 4,463 | (29,703 | ) | |||||||
Prepaid expenses and other assets | (31,034 | ) | (11,424 | ) | ||||||
Accounts payable, accrued expenses and other liabilities | (32,267 | ) | (997 | ) | ||||||
Net cash provided by operating activities | 23,463 | 2,008 | ||||||||
INVESTING ACTIVITIES | ||||||||||
Additions to property, plant and equipment | (17,030 | ) | (7,773 | ) | ||||||
Proceeds from the sale of property, plant and equipment | 207 | 269 | ||||||||
Business acquisition, working capital adjustment | 6,300 | 1,467 | ||||||||
Net cash used in investing activities | (10,523 | ) | (6,037 | ) | ||||||
FINANCING ACTIVITIES | ||||||||||
Proceeds from long-term debt | 199,600 | 378,263 | ||||||||
Payments of long-term debt | (186,874 | ) | (361,325 | ) | ||||||
Debt issuance costs | — | (727 | ) | |||||||
Dividends paid | — | (1,879 | ) | |||||||
Proceeds from the exercise of stock options | 690 | 707 | ||||||||
Return of cash to seller | (61,201 | ) | — | |||||||
Net cash (used in) provided by financing activities | (47,785 | ) | 15,039 | |||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (5,154 | ) | 6,338 | |||||||
(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (39,999 | ) | 17,348 | |||||||
Cash, cash equivalents and restricted cash at beginning of period | 112,293 | 58,279 | ||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | $ | 72,294 | $ | 75,627 |
CIRCOR INTERNATIONAL, INC.
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September 30, 2018 | December 31, 2017 | |||||||||
ASSETS | ||||||||||
CURRENT ASSETS: | ||||||||||
Cash and cash equivalents | $ | 71,334 | $ | 110,356 | ||||||
Trade accounts receivable, less allowance for doubtful accounts of $6,965 and $4,791, respectively | 192,110 | 223,922 | ||||||||
Inventories | 226,047 | 244,896 | ||||||||
Restricted cash | 919 | 1,937 | ||||||||
Prepaid expenses and other current assets | 84,265 | 57,282 | ||||||||
Total Current Assets | 574,675 | 638,393 | ||||||||
PROPERTY, PLANT AND EQUIPMENT, NET | 215,206 | 217,539 | ||||||||
OTHER ASSETS: | ||||||||||
Goodwill | 504,638 | 505,762 | ||||||||
Intangibles, net | 470,722 | 513,364 | ||||||||
Deferred income taxes | 33,130 | 22,334 | ||||||||
Other assets | 14,479 | 9,407 | ||||||||
TOTAL ASSETS | $ | 1,812,850 | $ | 1,906,799 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
CURRENT LIABILITIES: | ||||||||||
Accounts payable | $ | 111,400 | $ | 117,329 | ||||||
Accrued expenses and other current liabilities | 108,031 | 170,454 | ||||||||
Accrued compensation and benefits | 30,827 | 34,734 | ||||||||
Total Current Liabilities | 250,258 | 322,517 | ||||||||
LONG-TERM DEBT, NET | 802,069 | 787,343 | ||||||||
DEFERRED INCOME TAXES | 25,397 | 26,122 | ||||||||
PENSION LIABILITY, NET | 142,067 | 150,719 | ||||||||
OTHER NON-CURRENT LIABILITIES | 18,888 | 18,124 | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||
SHAREHOLDERS’ EQUITY: | ||||||||||
Common stock | 212 | 212 | ||||||||
Additional paid-in capital | 443,984 | 438,721 | ||||||||
Retained earnings | 253,107 | 274,243 | ||||||||
Common treasury stock, at cost | (74,472 | ) | (74,472 | ) | ||||||
Accumulated other comprehensive loss, net of tax | (48,660 | ) | (36,730 | ) | ||||||
Total Shareholders’ Equity | 574,171 | 601,974 | ||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 1,812,850 | $ | 1,906,799 |
CIRCOR INTERNATIONAL, INC.
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Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, |
October 1, |
September 30, |
October 1, |
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ORDERS (1) (3) | |||||||||||||||||||
Energy | $ | 111.0 | $ | 84.9 | $ | 353.9 | $ | 258.0 | |||||||||||
Aerospace & Defense | 81.5 | 45.9 | 200.8 | 142.3 | |||||||||||||||
Industrial | 114.9 | 27.3 | 388.2 | 84.8 | |||||||||||||||
Total orders | $ | 307.4 | $ | 158.1 | $ | 942.9 | $ | 485.1 | |||||||||||
BACKLOG (2) (3) |
September 30, |
October 1, |
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Energy | $ | 205.9 | $ | 138.8 | |||||||||||||||
Aerospace & Defense | 173.0 | 108.2 | |||||||||||||||||
Industrial | 178.0 | 31.3 | |||||||||||||||||
Total backlog | $ | 556.9 | $ | 278.3 | |||||||||||||||
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 represents unshipped customer orders for which revenue has not been recognized.
Note 3: 2018 backlog reflects adjustments related to the cumulative
impact of changes in revenue recognition due to the Company's adoption
of ASC 606.
CIRCOR INTERNATIONAL, INC. |
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2017 | 2018 | ||||||||||||||||||||||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | 2ND QTR | 3RD QTR | TOTAL | |||||||||||||||||||||||||||||||||||||
ORDERS | |||||||||||||||||||||||||||||||||||||||||||||
Energy | $ | 100,012 | $ | 73,140 | $ | 84,857 | $ | 118,073 | $ | 376,082 | $ | 129,762 | $ | 113,171 | $ | 110,987 | $ | 353,920 | |||||||||||||||||||||||||||
Aerospace & Defense | 56,416 | 39,902 | 45,939 | $ | 52,043 | 194,300 | 59,793 | 59,441 | 81,533 | 200,767 | |||||||||||||||||||||||||||||||||||
Industrial | 27,654 | 29,889 | 27,296 | 46,407 | 131,246 | 136,607 | 136,746 | 114,876 | 388,229 | ||||||||||||||||||||||||||||||||||||
Total | $ | 184,082 | $ | 142,931 | $ | 158,092 | $ | 216,523 | $ | 701,628 | $ | 326,162 | $ | 309,358 | $ | 307,396 | $ | 942,916 | |||||||||||||||||||||||||||
NET REVENUES | |||||||||||||||||||||||||||||||||||||||||||||
Energy | $ | 76,210 | $ | 78,276 | $ | 88,570 | $ | 96,561 | $ | 339,617 | $ | 99,972 | $ | 112,804 | $ | 121,023 | $ | 333,799 | |||||||||||||||||||||||||||
Aerospace & Defense | 41,601 | 43,304 | 41,117 | $ | 56,961 | 182,983 | 58,477 | 57,500 | 57,757 | 173,734 | |||||||||||||||||||||||||||||||||||
Industrial | 27,397 | 29,651 | 30,006 | 52,056 | 139,110 | 117,131 | 131,064 | 118,734 | 366,929 | ||||||||||||||||||||||||||||||||||||
Total | $ | 145,208 | $ | 151,231 | $ | 159,693 | $ | 205,578 | $ | 661,710 | $ | 275,580 | $ | 301,368 | $ | 297,514 | $ | 874,462 | |||||||||||||||||||||||||||
SEGMENT OPERATING INCOME | |||||||||||||||||||||||||||||||||||||||||||||
Energy | $ | 6,407 | $ | 8,170 | $ | 6,936 | $ | 8,618 | $ | 30,131 | $ | 5,696 | $ | 9,242 | $ | 9,163 | $ | 24,101 | |||||||||||||||||||||||||||
Aerospace & Defense | 3,784 | 4,374 | 4,333 | 10,884 | 23,375 | 8,931 | 6,992 | 8,709 | 24,632 | ||||||||||||||||||||||||||||||||||||
Industrial | 4,384 | 4,901 | 5,675 | 4,972 | 19,932 | 12,948 | 15,037 | 14,609 | 42,594 | ||||||||||||||||||||||||||||||||||||
Corporate expenses | (5,479 | ) | (5,396 | ) | (5,067 | ) | (5,802 | ) | (21,744 | ) | (7,802 | ) | (6,448 | ) | (8,034 | ) | (22,284 | ) | |||||||||||||||||||||||||||
Adjusted Operating Income | $ | 9,096 | $ | 12,049 | $ | 11,877 | $ | 18,672 | $ | 51,694 | $ | 19,773 | $ | 24,823 | $ | 24,447 | $ | 69,043 | |||||||||||||||||||||||||||
SEGMENT OPERATING MARGIN % | |||||||||||||||||||||||||||||||||||||||||||||
Energy | 8.4 | % | 10.4 | % | 7.8 | % | 8.9 | % | 8.9 | % | 5.7 | % | 8.2 | % | 7.6 | % | 7.2 | % | |||||||||||||||||||||||||||
Aerospace & Defense | 9.1 | % | 10.1 | % | 10.5 | % | 19.1 | % | 12.8 | % | 15.3 | % | 12.2 | % | 15.1 | % | 14.2 | % | |||||||||||||||||||||||||||
Industrial | 16.0 | % | 16.5 | % | 18.9 | % | 9.6 | % | 14.3 | % | 11.1 | % | 11.5 | % | 12.3 | % | 11.6 | % | |||||||||||||||||||||||||||
Adjusted Operating Margin | 6.3 | % | 8.0 | % | 7.4 | % | 9.1 | % | 7.8 | % | 7.2 | % | 8.2 | % | 8.2 | % | 7.9 | % |
CIRCOR INTERNATIONAL, INC. |
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2017 | 2018 | ||||||||||||||||||||||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | 2ND QTR | 3RD QTR | TOTAL | |||||||||||||||||||||||||||||||||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | $ | 16,195 | $ | 2,667 | $ | (16,854 | ) | $ | 7,629 | $ | 9,637 | $ | (145 | ) | $ | (465 | ) | $ | 24,073 | $ | 23,463 | ||||||||||||||||||||||||
LESS: | |||||||||||||||||||||||||||||||||||||||||||||
Capital expenditures, net of sale proceeds | 2,811 | 2,375 | 2,318 | 6,103 | 13,607 | 8,141 | 3,563 | 5,119 | 16,823 | ||||||||||||||||||||||||||||||||||||
FREE CASH FLOW | $ | 13,384 | $ | 292 | $ | (19,172 | ) | $ | 1,526 | $ | (3,970 | ) | $ | (8,286 | ) | $ | (4,028 | ) | $ | 18,954 | $ | 6,640 | |||||||||||||||||||||||
GROSS DEBT | $ | 243,000 | $ | 252,856 | $ | 269,026 | $ | 795,208 | $ | 795,208 | $ | 823,665 | $ | 827,629 | $ | 831,613 | $ | 831,613 | |||||||||||||||||||||||||||
LESS: | |||||||||||||||||||||||||||||||||||||||||||||
Cash & cash equivalents | 65,656 | 77,272 | 75,627 | 110,356 | 110,356 | 123,305 | 69,030 | 71,334 | 71,334 | ||||||||||||||||||||||||||||||||||||
GROSS DEBT, NET OF CASH | $ | 177,344 | $ | 175,584 | $ | 193,399 | $ | 684,852 | $ | 684,852 | $ | 700,360 | $ | 758,599 | $ | 760,279 | $ | 760,279 | |||||||||||||||||||||||||||
TOTAL SHAREHOLDERS' EQUITY | $ | 415,537 | $ | 438,097 | $ | 451,885 | $ | 601,974 | $ | 601,974 | $ | 592,096 | $ | 573,992 | $ | 574,171 | $ | 574,171 | |||||||||||||||||||||||||||
GROSS DEBT AS % OF EQUITY | 58 | % | 58 | % | 60 | % | 132 | % | 132 | % | 139 | % | 144 | % | 145 | % | 145 | % | |||||||||||||||||||||||||||
GROSS DEBT, NET OF CASH AS % OF EQUITY | 43 | % | 40 | % | 43 | % | 114 | % | 114 | % | 118 | % | 132 | % | 132 | % | 132 | % |
CIRCOR INTERNATIONAL, INC. RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS (in thousands, except per share data) UNAUDITED |
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2017 | 2018 | ||||||||||||||||||||||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | 2ND QTR | 3RD QTR | TOTAL | |||||||||||||||||||||||||||||||||||||
NET INCOME (LOSS) | $ | 4,773 | $ | 8,970 | $ | 3,617 | $ | (5,571 | ) | $ | 11,789 | $ | (17,441 | ) | $ | 5,902 | $ | (6,841 | ) | $ | (18,380 | ) | |||||||||||||||||||||||
LESS: | |||||||||||||||||||||||||||||||||||||||||||||
Restructuring related inventory charges | — | — | — | — | — | 473 | 1,067 | — | 1,540 | ||||||||||||||||||||||||||||||||||||
Amortization of inventory step-up | — | — | — | 4,300 | 4,300 | 6,600 | — | — | 6,600 | ||||||||||||||||||||||||||||||||||||
Restructuring charges, net | 1,458 | 3,566 | 341 | 697 | 6,062 | 9,615 | 844 | 1,348 | 11,807 | ||||||||||||||||||||||||||||||||||||
Acquisition amortization | 2,552 | 2,599 | 2,694 | 4,697 | 12,542 | 11,797 | 11,767 | 11,733 | 35,297 | ||||||||||||||||||||||||||||||||||||
Acquisition depreciation | — | — | — | 233 | 233 | 1,837 | 1,735 | 1,742 | 5,314 | ||||||||||||||||||||||||||||||||||||
Special (recoveries) charges, net | (2,268 | ) | (5,520 | ) | 1,978 | 13,799 | 7,989 | 2,831 | 1,156 | 1,408 | 5,395 | ||||||||||||||||||||||||||||||||||
Income tax impact | (1,137 | ) | (3,124 | ) | (1,497 | ) | (8,279 | ) | (14,037 | ) | (7,687 | ) | (11,056 | ) | 967 | (17,776 | ) | ||||||||||||||||||||||||||||
ADJUSTED NET INCOME | $ | 5,378 | $ | 6,491 | $ | 7,133 | $ | 9,876 | $ | 28,878 | $ | 8,025 | $ | 11,415 | $ | 10,357 | $ | 29,797 | |||||||||||||||||||||||||||
EARNINGS (LOSS) PER COMMON SHARE (Diluted) | $ | 0.29 | $ | 0.54 | $ | 0.22 | $ | (0.32 | ) | $ | 0.70 | $ | (0.88 | ) | $ | 0.30 | $ | (0.34 | ) | $ | (0.93 | ) | |||||||||||||||||||||||
LESS: | |||||||||||||||||||||||||||||||||||||||||||||
Restructuring related inventory charges | — | — | — | — | — | 0.02 | 0.05 | — | 0.08 | ||||||||||||||||||||||||||||||||||||
Amortization of inventory step-up | — | — | — | 0.25 | 0.26 | 0.33 | — | — | 0.33 | ||||||||||||||||||||||||||||||||||||
Restructuring charges, net | 0.09 | 0.21 | 0.02 | 0.04 | 0.36 | 0.49 | 0.04 | 0.07 | 0.59 | ||||||||||||||||||||||||||||||||||||
Acquisition amortization | 0.15 | 0.16 | 0.16 | 0.27 | 0.74 | 0.60 | 0.59 | 0.59 | 1.77 | ||||||||||||||||||||||||||||||||||||
Acquisition depreciation | — | — | — | 0.01 | 0.01 | 0.09 | 0.09 | 0.09 | 0.27 | ||||||||||||||||||||||||||||||||||||
Special (recoveries) charges, net | (0.14 | ) | (0.33 | ) | 0.12 | 0.80 | 0.47 | 0.14 | 0.06 | 0.07 | 0.27 | ||||||||||||||||||||||||||||||||||
Income tax impact | (0.07 | ) | (0.19 | ) | (0.09 | ) | (0.48 | ) | (0.83 | ) | (0.39 | ) | (0.55 | ) | 0.05 | (0.89 | ) | ||||||||||||||||||||||||||||
ADJUSTED EARNINGS PER SHARE (Diluted) | $ | 0.32 | $ | 0.39 | $ | 0.43 | $ | 0.57 | $ | 1.71 | $ | 0.40 | $ | 0.57 | $ | 0.52 | $ | 1.49 |
CIRCOR INTERNATIONAL, INC. |
|||||||||||||||||||||||||||||||||||||||||||||
2017 | 2018 | ||||||||||||||||||||||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | 2ND QTR | 3RD QTR | TOTAL | |||||||||||||||||||||||||||||||||||||
NET INCOME (LOSS) | $ | 4,773 | $ | 8,970 | $ | 3,617 | $ | (5,571 | ) | $ | 11,789 | $ | (17,441 | ) | $ | 5,902 | $ | (6,841 | ) | $ | (18,380 | ) | |||||||||||||||||||||||
LESS: | |||||||||||||||||||||||||||||||||||||||||||||
Interest expense, net | (1,669 | ) | (2,184 | ) | (2,445 | ) | (4,479 | ) | (10,777 | ) | (11,801 | ) | (13,755 | ) | (14,100 | ) | (39,656 | ) | |||||||||||||||||||||||||||
Depreciation | (3,798 | ) | (3,547 | ) | (3,544 | ) | (4,401 | ) | (15,290 | ) | (7,334 | ) | (7,157 | ) | (7,065 | ) | (21,556 | ) | |||||||||||||||||||||||||||
Amortization | (3,092 | ) | (3,124 | ) | (3,275 | ) | (5,256 | ) | (14,747 | ) | (12,329 | ) | (12,282 | ) | (12,234 | ) | (36,845 | ) | |||||||||||||||||||||||||||
(Provision for) benefit from income taxes | (687 | ) | 724 | 21 | 5,618 | 5,676 | 5,879 | 7,646 | (2,537 | ) | 10,988 | ||||||||||||||||||||||||||||||||||
EBITDA | $ | 14,019 | $ | 17,101 | $ | 12,860 | $ | 2,947 | $ | 46,927 | $ | 8,144 | $ | 31,450 | $ | 29,095 | $ | 68,689 | |||||||||||||||||||||||||||
LESS: | |||||||||||||||||||||||||||||||||||||||||||||
Restructuring related inventory charges | — | — | — | — | — | (473 | ) | (1,067 | ) | — | (1,540 | ) | |||||||||||||||||||||||||||||||||
Amortization of inventory step-up | — | — | — | (4,300 | ) | (4,300 | ) | (6,600 | ) | — | — | (6,600 | ) | ||||||||||||||||||||||||||||||||
Restructuring charges, net | (1,458 | ) | (3,566 | ) | (341 | ) | (697 | ) | (6,062 | ) | (9,615 | ) | (844 | ) | (1,348 | ) | (11,807 | ) | |||||||||||||||||||||||||||
Special recoveries (charges), net | 2,268 | 5,520 | (1,978 | ) | (13,799 | ) | (7,989 | ) | (2,831 | ) | (1,156 | ) | (1,408 | ) | (5,395 | ) | |||||||||||||||||||||||||||||
ADJUSTED EBITDA | $ | 13,209 | $ | 15,147 | $ | 15,179 | $ | 21,743 | $ | 65,278 | $ | 27,663 | $ | 34,517 | $ | 31,851 | $ | 94,031 |
CIRCOR INTERNATIONAL, INC. |
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2017 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | 1ST QTR | 2ND QTR | 3RD QTR | TOTAL | ||||||||||||||||||||||||||||||||||||||
GAAP OPERATING INCOME (LOSS) | $ | 7,354 | $ | 11,404 | $ | 6,864 | $ | (5,054 | ) | $ | 20,568 | $ | (13,380 | ) | $ | 8,252 | $ | 8,216 | $ | 3,088 | ||||||||||||||||||||||||||
LESS: | ||||||||||||||||||||||||||||||||||||||||||||||
Restructuring related inventory charges | — | — | — | — | — | 473 | 1,067 | — | 1,540 | |||||||||||||||||||||||||||||||||||||
Amortization of inventory step-up | — | — | — | 4,300 | 4,300 | 6,600 | — | — | 6,600 | |||||||||||||||||||||||||||||||||||||
Restructuring charges, net | 1,458 | 3,566 | 341 | 697 | 6,062 | 9,615 | 844 | 1,348 | 11,807 | |||||||||||||||||||||||||||||||||||||
Acquisition amortization | 2,552 | 2,599 | 2,694 | 4,697 | 12,542 | 11,797 | 11,767 | 11,733 | 35,297 | |||||||||||||||||||||||||||||||||||||
Acquisition depreciation | — | — | — | 233 | 233 | 1,837 | 1,735 | 1,742 | 5,314 | |||||||||||||||||||||||||||||||||||||
Special (recoveries) charges, net | (2,268 | ) | (5,520 | ) | 1,978 | 13,799 | 7,989 | 2,831 | 1,156 | 1,408 | 5,395 | |||||||||||||||||||||||||||||||||||
ADJUSTED OPERATING INCOME | $ | 9,096 | $ | 12,049 | $ | 11,877 | $ | 18,672 | $ | 51,694 | $ | 19,773 | $ | 24,821 | $ | 24,447 | $ | 69,041 | ||||||||||||||||||||||||||||
GAAP OPERATING MARGIN | 5.1 | % | 7.5 | % | 4.3 | % | (2.5 | )% | 3.1 | % | (4.9 | )% | 2.7 | % | 2.8 | % | 0.4 | % | ||||||||||||||||||||||||||||
LESS: | ||||||||||||||||||||||||||||||||||||||||||||||
Restructuring related inventory charges | — | % | — | % | — | % | — | % | — | % | 0.2 | % | 0.4 | % | — | % | 0.2 | % | ||||||||||||||||||||||||||||
Amortization of inventory step-up | — | % | — | % | — | % | 2.1 | % | 0.6 | % | 2.4 | % | — | % | — | % | 0.8 | % | ||||||||||||||||||||||||||||
Restructuring charges, net | 1.0 | % | 2.4 | % | 0.2 | % | 0.3 | % | 0.9 | % | 3.5 | % | 0.3 | % | 0.5 | % | 1.4 | % | ||||||||||||||||||||||||||||
Acquisition amortization | 1.8 | % | 1.7 | % | 1.7 | % | 2.3 | % | 1.9 | % | 4.3 | % | 3.9 | % | 3.9 | % | 4.0 | % | ||||||||||||||||||||||||||||
Acquisition depreciation | — | % | — | % | — | % | 0.1 | % | — | % | 0.7 | % | 0.6 | % | 0.6 | % | 0.6 | % | ||||||||||||||||||||||||||||
Special (recoveries) charges, net | (1.6 | )% | (3.7 | )% | 1.2 | % | 6.7 | % | 1.2 | % | 1.0 | % | 0.4 | % | 0.5 | % | 0.6 | % | ||||||||||||||||||||||||||||
ADJUSTED OPERATING MARGIN | 6.3 | % | 8.0 | % | 7.4 | % | 9.1 | % | 7.8 | % | 7.2 | % | 8.2 | % | 8.2 | % | 7.9 | % |
The Company is providing certain combined information related to the recently acquired Fluid Handling business.
CIRCOR INTERNATIONAL, INC. |
|||||||||||||||||||||||||
2017 | |||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | |||||||||||||||||||||
ORDERS - Recast | |||||||||||||||||||||||||
Energy | $ | 100,012 | $ | 73,140 | $ | 84,857 | $ | 118,073 | $ | 376,082 | |||||||||||||||
Aerospace & Defense | 56,416 | 39,902 | 45,939 | 52,043 | 194,300 | ||||||||||||||||||||
Industrial | 27,654 | 29,889 | 27,296 | 46,407 | 131,246 | ||||||||||||||||||||
Total | $ | 184,082 | $ | 142,931 | $ | 158,092 | $ | 216,523 | $ | 701,628 | |||||||||||||||
ORDERS - Fluid Handling | |||||||||||||||||||||||||
Energy | $ | 23,679 | $ | 16,882 | $ | 21,401 | $ | 11,803 | $ | 73,765 | |||||||||||||||
Aerospace & Defense | 8,255 | 24,375 | 9,716 | 6,816 | 49,162 | ||||||||||||||||||||
Industrial | 77,944 | 76,866 | 87,378 | 60,193 | 302,381 | ||||||||||||||||||||
Total | $ | 109,878 | $ | 118,123 | $ | 118,495 | $ | 78,812 | $ | 425,308 | |||||||||||||||
ORDERS - Combined | |||||||||||||||||||||||||
Energy | $ | 123,690 | $ | 90,022 | $ | 106,258 | $ | 129,876 | $ | 449,846 | |||||||||||||||
Aerospace & Defense | 64,671 | 64,277 | 55,655 | 58,859 | 243,462 | ||||||||||||||||||||
Industrial | 105,598 | 106,755 | 114,674 | 106,601 | 433,628 | ||||||||||||||||||||
Total | $ | 293,959 | $ | 261,054 | $ | 276,587 | $ | 295,336 | $ | 1,126,936 | |||||||||||||||
NET REVENUES - Recast | |||||||||||||||||||||||||
Energy | $ | 76,210 | $ | 78,276 | $ | 88,570 | $ | 96,561 | $ | 339,617 | |||||||||||||||
Aerospace & Defense | 41,601 | 43,304 | 41,117 | 56,961 | 182,983 | ||||||||||||||||||||
Industrial | 27,397 | 29,651 | 30,006 | 52,056 | 139,110 | ||||||||||||||||||||
Total | $ | 145,208 | $ | 151,231 | $ | 159,693 | $ | 205,578 | $ | 661,710 | |||||||||||||||
NET REVENUES - Fluid Handling | |||||||||||||||||||||||||
Energy | $ | 15,546 | $ | 17,705 | $ | 17,789 | $ | 13,663 | $ | 64,703 | |||||||||||||||
Aerospace & Defense | 10,728 | 17,044 | 11,208 | 6,918 | 45,898 | ||||||||||||||||||||
Industrial | 85,264 | 83,310 | 85,604 | 72,489 | 326,667 | ||||||||||||||||||||
Total | $ | 111,538 | $ | 118,059 | $ | 114,601 | $ | 93,070 | $ | 437,268 | |||||||||||||||
NET REVENUES - Combined | |||||||||||||||||||||||||
Energy | $ | 91,756 | $ | 95,981 | $ | 106,359 | $ | 110,224 | $ | 404,320 | |||||||||||||||
Aerospace & Defense | 52,329 | 60,348 | 52,325 | 63,879 | 228,881 | ||||||||||||||||||||
Industrial | 112,661 | 112,961 | 115,610 | 124,545 | 465,777 | ||||||||||||||||||||
Total | $ | 256,746 | $ | 269,290 | $ | 274,294 | $ | 298,648 | $ | 1,098,978 | |||||||||||||||
Notes:
- Items labeled "Recast" represent previously reported
- Items labeled "Fluid Handling" represent the information from the
Fluid Handling businesses prior to their acquisition by
- Items labeled "Combined" represent the sum of the Recast and Fluid Handling information
CIRCOR INTERNATIONAL, INC. |
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2017 | |||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | |||||||||||||||||||||
SEGMENT OPERATING INCOME - Recast | |||||||||||||||||||||||||
Energy | $ | 6,407 | $ | 8,170 | $ | 6,936 | $ | 8,618 | $ | 30,131 | |||||||||||||||
Aerospace & Defense | 3,784 | 4,374 | 4,333 | 10,884 | 23,375 | ||||||||||||||||||||
Industrial | 4,384 | 4,901 | 5,675 | 4,972 | 19,932 | ||||||||||||||||||||
Corporate expenses | (5,479 | ) | (5,396 | ) | (5,067 | ) | (5,802 | ) | (21,744 | ) | |||||||||||||||
Total | $ | 9,096 | $ | 12,049 | $ | 11,877 | $ | 18,672 | $ | 51,694 | |||||||||||||||
SEGMENT OPERATING INCOME - Fluid Handling | |||||||||||||||||||||||||
Energy | $ | (83 | ) | $ | 1,080 | $ | 1,761 | $ | 812 | $ | 3,570 | ||||||||||||||
Aerospace & Defense | 1,488 | 3,661 | 2,201 | (367 | ) | 6,983 | |||||||||||||||||||
Industrial | 8,833 | 7,709 | 4,365 | (1,414 | ) | 19,493 | |||||||||||||||||||
Corporate expenses | — | — | — | — | — | ||||||||||||||||||||
Total | $ | 10,238 | $ | 12,450 | $ | 8,327 | $ | (969 | ) | $ | 30,046 | ||||||||||||||
SEGMENT OPERATING INCOME - Combined | |||||||||||||||||||||||||
Energy | $ | 6,324 | $ | 9,250 | $ | 8,697 | $ | 9,430 | $ | 33,701 | |||||||||||||||
Aerospace & Defense | 5,272 | 8,035 | 6,534 | 10,517 | 30,358 | ||||||||||||||||||||
Industrial | 13,217 | 12,610 | 10,040 | 3,558 | 39,425 | ||||||||||||||||||||
Corporate expenses | (5,479 | ) | (5,396 | ) | (5,067 | ) | (5,802 | ) | (21,744 | ) | |||||||||||||||
Total | $ | 19,334 | $ | 24,499 | $ | 20,204 | $ | 17,703 | $ | 81,740 | |||||||||||||||
SEGMENT OPERATING MARGIN - Combined | |||||||||||||||||||||||||
Energy | 6.9 | % | 9.6 | % | 8.2 | % | 8.6 | % | 8.3 | % | |||||||||||||||
Aerospace & Defense | 10.1 | % | 13.3 | % | 12.5 | % | 16.5 | % | 13.3 | % | |||||||||||||||
Industrial | 11.7 | % | 11.2 | % | 8.7 | % | 2.9 | % | 8.5 | % | |||||||||||||||
Corporate expenses | (2.1 | )% | (2.0 | )% | (1.8 | )% | (1.9 | )% | (2.0 | )% | |||||||||||||||
Total | 7.5 | % | 9.1 | % | 7.4 | % | 5.9 | % | 7.4 | % | |||||||||||||||
Notes:
- Items labeled "Recast" represent previously reported
- Items labeled "Fluid Handling" represent the information from the
Fluid Handling businesses prior to their acquisition by
- Items labeled "Combined" represent the sum of the Recast and Fluid Handling information
- Segment Operating Margin - Combined represent Segment Operating Income - Combined divided by Segment Net Revenues Combined
CIRCOR INTERNATIONAL, INC. |
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Industrial | Energy | Aerospace & Defense | ||||||||||||||||||||||||||||||||||||||||||||||
ORDERS | Reported |
Pro Forma |
Reported |
Pro Forma |
Reported |
Pro Forma |
||||||||||||||||||||||||||||||||||||||||||
$ | % | $ | % | $ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||
2017 | 27,296 | 114,674 | 84,857 | 106,258 | 45,939 | 55,655 | ||||||||||||||||||||||||||||||||||||||||||
Organic | 7,853 | 29 | % | 2,027 | 2 | % | 7,068 | 8 | % | 7,142 | 7 | % | 24,473 | 53 | % | 26,092 | 47 | % | ||||||||||||||||||||||||||||||
Acquisitions | 79,915 | 293 | % | — | — | % | 19,145 | 23 | % | — | — | % | 11,335 | 25 | % | — | — | % | ||||||||||||||||||||||||||||||
Foreign Exchange | (188 | ) | (1 | )% | (1,825 | ) | (2 | )% | (83 | ) | — | % | (2,413 | ) | (2 | )% | (214 | ) | — | % | (214 | ) | — | % | ||||||||||||||||||||||||
Total Change | 87,580 | 321 | % | 202 | — | % | 26,130 | 31 | % | 4,729 | 4 | % | 35,594 | 77 | % | 25,878 | 46 | % | ||||||||||||||||||||||||||||||
2018 | 114,876 | 114,876 | 110,987 | 110,987 | 81,533 | 81,533 | ||||||||||||||||||||||||||||||||||||||||||
Industrial | Energy | Aerospace & Defense | ||||||||||||||||||||||||||||||||||||||||||||||
NET REVENUE | Reported |
Pro Forma |
Reported |
Pro Forma |
Reported |
Pro Forma |
||||||||||||||||||||||||||||||||||||||||||
$ | % | $ | % | $ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||
2017 | 30,006 | 115,611 | 88,569 | 106,358 | 41,117 | 52,325 | ||||||||||||||||||||||||||||||||||||||||||
Organic | (308 | ) | (1 | )% | 4,928 | 4 | % | 16,187 | 18 | % | 15,559 | 15 | % | 5,935 | 14 | % | 5,589 | 11 | % | |||||||||||||||||||||||||||||
Acquisitions | 89,280 | 298 | % | — | — | % | 16,579 | 19 | % | — | — | % | 10,862 | 26 | % | — | — | % | ||||||||||||||||||||||||||||||
Foreign Exchange | (244 | ) | (1 | )% | (1,805 | ) | (2 | )% | (311 | ) | — | % | (893 | ) | (1 | )% | (157 | ) | — | % | (157 | ) | — | % | ||||||||||||||||||||||||
Total Change | 88,728 | 296 | % | 3,123 | 3 | % | 32,455 | 37 | % | 14,666 | 14 | % | 16,640 | 40 | % | 5,432 | 10 | % | ||||||||||||||||||||||||||||||
2018 | 118,734 | 118,734 | 121,023 | 121,023 | 57,757 | 57,757 |
CIRCOR INTERNATIONAL, INC. |
||||||||||||||||
CIRCOR | ||||||||||||||||
ORDERS | Reported |
Pro Forma |
||||||||||||||
$ | % | $ | % | |||||||||||||
2017 | 158,092 | 276,587 | ||||||||||||||
Organic | 39,394 | 25 | % | 35,261 | 13 | % | ||||||||||
Acquisitions | 110,395 | 70 | % | — | — | % | ||||||||||
Foreign Exchange | (485 | ) | — | % | (4,452 | ) | (2 | )% | ||||||||
Total Change | 149,304 | 94 | % | 30,809 | 10 | % | ||||||||||
2018 | 307,396 | 307,396 | ||||||||||||||
CIRCOR | ||||||||||||||||
NET REVENUE | Reported |
Pro Forma |
||||||||||||||
$ | % | $ | % | |||||||||||||
2017 | 159,693 | 274,294 | ||||||||||||||
Organic | 21,815 | 14 | % | 26,076 | 10 | % | ||||||||||
Acquisitions | 116,721 | 73 | % | — | — | % | ||||||||||
Foreign Exchange | (715 | ) | — | % | (2,856 | ) | (1 | )% | ||||||||
Total Change | 137,821 | 86 | % | 23,220 | 8 | % | ||||||||||
2018 | 297,514 | 297,514 |
CIRCOR INTERNATIONAL, INC. |
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2017 | |||||||||||||||||||||||||
1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | TOTAL | |||||||||||||||||||||
FLUID HANDLING GAAP OPERATING INCOME (LOSS) | $ | 4,359 | $ | 19,738 | $ | 2,241 | $ | 3,129 | $ | 29,467 | |||||||||||||||
LESS: | |||||||||||||||||||||||||
Asbestos costs | 2,690 | 2,517 | 2,379 | 1,274 | 8,860 | ||||||||||||||||||||
Impairment charges | — | — | — | — | — | ||||||||||||||||||||
Exited businesses | 65 | (26 | ) | (47 | ) | — | (8 | ) | |||||||||||||||||
Acquisition amortization | 796 | 810 | 818 | — | 2,424 | ||||||||||||||||||||
Restructuring and other special charges (recoveries) | 2,328 | (10,589 | ) | 636 | (5,372 | ) | (12,997 | ) | |||||||||||||||||
Stay bonus | — | — | 2,300 | — | 2,300 | ||||||||||||||||||||
FLUID HANDLING ADJUSTED OPERATING INCOME | $ | 10,238 | $ | 12,450 | $ | 8,327 | $ | (969 | ) | $ | 30,046 | ||||||||||||||
|
Notes
- Amounts relate to Fluid Handling results prior to
View source version on businesswire.com: https://www.businesswire.com/news/home/20181105005984/en/
Source:
CIRCOR International
Rajeev Bhalla, 781-270-1200
Executive
Vice President & Chief Financial Officer