UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 21, 2007
CIRCOR INTERNATIONAL, INC.
(Exact name of registrant as specified in charter)
| DELAWARE | 001-14962 | 04-3477276 | ||
| (State or other jurisdiction of incorporation) |
(Commission file number) | (IRS employer identification no.) |
| 25 CORPORATE DRIVE, SUITE 130 BURLINGTON, MASSACHUSETTS |
01803-4238 | |
| (Address of principal executive offices) | (Zip Code) |
(781) 270-1200
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR240.13e-4(c)) |
| Item 2.02 | Results of Operations and Financial Condition |
By press release dated February 21, 2007, the Company announced its financial results for the three and twelve months ended December 31, 2006. The full text of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this form 8-K and the Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any registration statement or other document filed under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by special reference in such filing.
In the press release and accompanying supplemental information, the Company uses the following non-GAAP financial measures: free cash flow, EBIT, EBITDA, and earnings per share excluding special charges. Management of the Company believes that free cash flow (defined as net cash flow from operating activities, less capital expenditures and dividends paid) is an important measure of its liquidity as well as its ability to service long-term debt, fund future growth and to provide a return to shareholders. EBIT (defined as net income plus interest expense, net plus provision for income taxes), EBITDA (defined as net income plus interest expense, net plus provision for income taxes, plus depreciation and amortization) and earnings per share excluding special charges (defined as earnings per common share, excluding the impact of special charges, net of tax) is provided because management believes these measurements are commonly used by investors and financial institutions to analyze and compare companies on the basis of operating performance. Free cash flow, EBIT, EBITDA, and earnings per share excluding special charges are not measurements for financial performance under GAAP and should not be construed as a substitute for cash flows, operating income, net income or earnings per share. Free cash flow, EBIT, EBITDA, and earnings per share excluding special charges, as we have calculated here, may not necessarily be comparable to similarly titled measures used by other companies. A reconciliation of free cash flow, EBIT, EBITDA, and earnings per share excluding special charges, to the most directly comparable GAAP financial measure is provided in the supplemental information table titled “Reconciliation of Key Performance Measures to Commonly Used Generally Accepted Accounting Principle Terms” which is included as an attachment to the press release.
| Item 5.05 | Amendment to Code of Ethics |
On February 21, 2007, CIRCOR International, Inc.’s Board of Directors approved certain modifications to the Company’s Code of Conduct and Business Ethics (the “Code”). The Code applies equally to all officers, directors and employees of the Company; the Company does not maintain a separate code of ethics applicable to its principal executive officer, principal financial officer and principal accounting officer. The amendments to the Code are largely technical and administrative in nature and provide greater explanation on certain key principles that otherwise were already covered in the prior version of the Code. A copy of our revised Code can be found on our website at www.circor.com under the Corporate Governance link.
| Item 9.01. | Financial Statements and Exhibits |
| (d) | Exhibits |
| Exhibit No. | Description | |
| 99.1 | Press Release regarding Earnings, Dated February 21, 2007 |
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: February 26, 2007 | CIRCOR INTERNATIONAL, INC. | |||
| By: | /s/ Kenneth W. Smith | |||
| Kenneth W. Smith | ||||
| Senior Vice President, Chief Financial Officer and Treasurer | ||||
3
EXHIBIT 99.1
| PRESS RELEASE |
| Contact: |
Kenneth W. Smith | |
| Chief Financial Officer | ||
| CIRCOR International, Inc. | ||
| (781) 270-1200 |
| CIRCOR | Reports Record Fourth Quarter Earnings of $0.63 per share |
| • | Earnings for quarter increase 119% while orders and backlog climb 43% and 101%, respectively |
| • | Energy Products segment outperforms expectations as market and profitability continue to grow |
Burlington, MA, February 21, 2007
CIRCOR International, Inc. (NYSE: CIR), a leading provider of valves and other fluid control devices for the instrumentation, aerospace, thermal fluid and energy markets, today announced results for the fourth quarter and the year ended December 31, 2006.
Revenues for the 2006 fourth quarter were $169.6 million, an increase of 41% from $120.4 million for the fourth quarter 2005. Net income for the fourth quarter 2006 increased 119% to $10.4 million, or $0.63 per diluted share, compared to $4.7 million, or $0.29 per diluted share, for the 2005 fourth quarter. Earnings per share for the fourth quarter of 2006 included a $0.01 charge for the adoption of FAS 123R, the expensing of stock options. The Company also recorded income tax benefits in the fourth quarter 2006 of $0.03 per diluted share primarily related to tax credits for product development and research activities.
For the 12 months ended December 31, 2006, revenues were $591.7 million, an increase of 31% from $450.5 million for 2005. Net income for 2006 was $29.3 million or $1.80 per diluted share, an increase of 44% from $20.4 million or $1.27 per diluted share in 2005. The earnings per share for 2006 includes a $0.05 charge for the adoption of FAS 123R, the expensing of stock options.
The Company received orders totaling $171.3 million during the fourth quarter 2006, increasing 43% over the fourth quarter of 2005. For the full year 2006, orders totaled $713.3 million with year-end backlog reaching $285.7 million, representing increases of 60% and 101%, respectively, over 2005 results.
During the fourth quarter of 2006, the Company generated $13.5 million of free cash flow (defined as net cash from operating activities, less capital expenditures and dividends paid) and, for the full year 2006, the Company generated $17.5 million of free cash flow, a decrease of 37% from $27.9 million of free cash flow generated in 2005. The decrease from 2005 largely resulted from an investment in working capital in 2006 to support its 60% increase in customer orders and 31% increase in revenues as compared to 2005.
Circor’s Instrumentation and Thermal Fluid Controls Products segment revenues increased 19% to $81.6 million from $68.3 million in the fourth quarter 2005 primarily due to acquisitions. Incoming orders for this segment were $76.0 million. Excluding acquisitions, orders were $62.9 million for the fourth quarter 2006, a decrease of 12% from the fourth quarter 2005. Last year’s fourth quarter orders included $8 million related to military helicopter programs received by the Company’s Loud Engineering subsidiary. However, during 2006, orders were received earlier throughout the year. This segment’s backlog at year-end increased 35% to $113.4 million compared to $84.0 million at December 31, 2005. Excluding acquisitions, backlog increased 19% as market conditions in this segment’s aerospace, instrumentation and steam markets remain relatively healthy. This segment’s operating margin for the fourth quarter was 8.2%, down from the 8.7% operating margin achieved in the fourth quarter 2005. Operating results for the fourth quarter were adversely affected by higher-than-expected production expediting costs related to specific large project shipments within the Aerospace and Thermal Fluid Controls product lines and higher production and inventory costs affecting our Instrumentation operations.
Circor’s Energy Products segment revenues increased 69% to $88.0 million from $52.1 million in the fourth quarter last year. Incoming orders for the quarter were $95.4 million and ending backlog totaled $172.2 million compared to incoming orders of $43.7 million and ending backlog of $58.1 million as of December 31, 2005. Excluding acquisitions, orders for the fourth quarter 2006 were $86.8 million and ending backlog totaled $145.4 million. Capital spending in the energy sector continued at high levels as quotation activity and the level of planned international oil and gas projects remained strong. This segment’s operating margin was 15.4% during the fourth quarter of 2006 compared to 9.2% for the fourth quarter of 2005. The fourth quarter of 2006 benefited from significantly higher units shipped including certain high margin projects.
David A Bloss, Sr., Circor’s Chairman and Chief Executive Officer, said “We are pleased with our overall performance in the fourth quarter and with our healthy backlog of orders as we begin 2007. While clearly above our estimates, fourth quarter earnings were bolstered by the performance of our Energy Products segment, where strong market conditions and productivity improvements contributed to greater efficiencies. These strong results more than offset the lower earnings from our Instrumentation and Thermal Fluid Controls segment where we continue to focus significant effort to improve the long-term profitability of its product lines. We continue to foresee improved operating performance for the Instrumentation and Thermal Fluid Controls segment in 2007 as our cost reduction initiatives take hold.”
Circor provided guidance for its first quarter 2007 results, indicating it expects earnings to be in the range of $0.41 to $0.43 per diluted share, excluding anticipated special charges related to a facility closure during the quarter. The guidance compares favorably to earnings in the first quarter 2006 of $0.32 per diluted share, but is lower than fourth quarter 2006 results due to the timing of major project shipments.
CIRCOR International has scheduled a conference call to review its results for the fourth quarter of 2006 tomorrow, February 22, 2007, at 10:30 am ET. Interested parties may access the call by dialing (800) 238-9007 from the US and Canada and (719) 457-2622 from international
locations. A replay of the call will be available from 1:30 p.m. ET on February 22, 2007 through midnight on February 28, 2007. To access the replay, interested parties should dial (888) 203-1112 or (719) 457-0820 and enter confirmation code # 3374674 when prompted. The presentation slides that will be discussed in the conference call are expected to be available on Wednesday, February 21, 2007, by 6:00 pm ET. The presentation slides may be downloaded from the quarterly earnings page of the investor section on the CIRCOR website: http://www.circor.com/quarterlyearnings/. An audio recording of the conference call also is expected to be posted on the Company’s website by February 26, 2007.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Reliance should not be placed on forward-looking statements because they involve unknown risks, uncertainties and other factors, which are, in some cases, beyond the control of CIRCOR. Actual events, performance or results could differ materially from the anticipated events, performance or results expressed or implied by such forward-looking statements. BEFORE MAKING ANY INVESTMENT DECISIONS REGARDING OUR COMPANY, WE STRONGLY ADVISE YOU TO READ THE SECTION ENTITLED “RISK FACTORS” IN OUR MOST RECENT ANNUAL REPORT ON FORM 10-K WHICH CAN BE ACCESSED UNDER THE “INVESTORS” LINK OF OUR WEBSITE AT WWW.CIRCOR.COM. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
CIRCOR INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
UNAUDITED
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, 2006 |
December 31, 2005 |
December 31, 2006 |
December 31, 2005 |
|||||||||||||
| Net revenues |
$ | 169,615 | $ | 120,414 | $ | 591,711 | $ | 450,531 | ||||||||
| Cost of revenues |
120,643 | 86,544 | 418,803 | 317,856 | ||||||||||||
| GROSS PROFIT |
48,972 | 33,870 | 172,908 | 132,675 | ||||||||||||
| Selling, general and administrative expenses |
32,641 | 26,238 | 124,720 | 98,040 | ||||||||||||
| Special charges |
200 | 696 | 678 | 1,630 | ||||||||||||
| OPERATING INCOME |
16,131 | 6,936 | 47,510 | 33,005 | ||||||||||||
| Other (income) expense: |
||||||||||||||||
| Interest income |
(97 | ) | (93 | ) | (429 | ) | (579 | ) | ||||||||
| Interest expense |
1,342 | 721 | 5,546 | 3,389 | ||||||||||||
| Other (income) expense, net |
487 | (53 | ) | 134 | 144 | |||||||||||
| Total other expense |
1,732 | 575 | 5,251 | 2,954 | ||||||||||||
| INCOME BEFORE INCOME TAXES |
14,399 | 6,361 | 42,259 | 30,051 | ||||||||||||
| Provision for income taxes |
4,016 | 1,613 | 12,931 | 9,668 | ||||||||||||
| NET INCOME |
$ | 10,383 | $ | 4,748 | $ | 29,328 | $ | 20,383 | ||||||||
| Earnings per common share: |
||||||||||||||||
| Basic |
$ | 0.65 | $ | 0.30 | $ | 1.84 | $ | 1.30 | ||||||||
| Diluted |
$ | 0.63 | $ | 0.29 | $ | 1.80 | $ | 1.27 | ||||||||
| Weighted average common shares outstanding: |
||||||||||||||||
| Basic |
16,076 | 15,823 | 15,976 | 15,690 | ||||||||||||
| Diluted |
16,438 | 16,172 | 16,291 | 16,019 | ||||||||||||
CIRCOR INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
UNAUDITED
| Year Ended | ||||||||
| December 31, 2006 |
December 31, 2005 |
|||||||
| OPERATING ACTIVITIES |
||||||||
| Net income |
$ | 29,328 | $ | 20,383 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation |
11,206 | 9,825 | ||||||
| Amortization |
2,394 | 588 | ||||||
| Compensation expense of stock-based plans |
3,252 | 1,020 | ||||||
| (Gain) loss on sale of assets held for sale |
86 | (110 | ) | |||||
| Loss on disposal of property, plant and equipment |
5 | 128 | ||||||
| Equity in undistributed income of affiliates |
22 | (120 | ) | |||||
| Gain on sale of business |
(11 | ) | — | |||||
| Changes in operating assets and liabilities, net of effects from business acquisitions: |
||||||||
| Trade accounts receivable |
(20,857 | ) | (10,090 | ) | ||||
| Inventories |
(29,804 | ) | 1,638 | |||||
| Prepaid expenses and other assets |
4,966 | 160 | ||||||
| Accounts payable, accrued expenses and other liabilities |
29,271 | 21,904 | ||||||
| Net cash provided by operating activities |
29,858 | 45,326 | ||||||
| INVESTING ACTIVITIES |
||||||||
| Additions to property, plant and equipment |
(9,933 | ) | (15,021 | ) | ||||
| Proceeds from sale of property, plant and equipment |
371 | 99 | ||||||
| Proceeds from sale of assets held for sale |
100 | 1,467 | ||||||
| Business acquisitions, net of cash acquired |
(61,103 | ) | (51,608 | ) | ||||
| Sale of business, net of cash sold |
2,309 | — | ||||||
| Purchase of investments |
(12,194 | ) | (2,535 | ) | ||||
| Proceeds from sale of investments |
12,211 | 6,699 | ||||||
| Net cash used in investing activities |
(68,239 | ) | (60,899 | ) | ||||
| FINANCING ACTIVITIES |
||||||||
| Proceeds from debt borrowings |
100,561 | 10,669 | ||||||
| Payments of debt |
(70,204 | ) | (22,386 | ) | ||||
| Dividends paid |
(2,395 | ) | (2,358 | ) | ||||
| Proceeds from the exercise of stock options |
3,627 | 3,771 | ||||||
| Tax effect of share based compensation |
2,559 | — | ||||||
| Net cash provided by (used in) financing activities |
34,148 | (10,304 | ) | |||||
| Effect of exchange rate changes on cash and cash equivalents |
1,773 | (1,664 | ) | |||||
| DECREASE IN CASH AND CASH EQUIVALENTS |
(2,460 | ) | (27,541 | ) | ||||
| Cash and cash equivalents at beginning of year |
31,112 | 58,653 | ||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ | 28,652 | $ | 31,112 | ||||
CIRCOR INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
UNAUDITED
| December 31, 2006 |
December 31, 2005 | |||||
| ASSETS |
||||||
| Current Assets: |
||||||
| Cash and cash equivalents |
$ | 28,652 | $ | 31,112 | ||
| Investments |
86 | 86 | ||||
| Trade accounts receivable, less allowance for doubtful accounts of $2,523 and $1,943, respectively |
108,689 | 77,731 | ||||
| Inventories |
150,160 | 107,687 | ||||
| Prepaid expenses and other current assets |
2,926 | 3,705 | ||||
| Deferred income taxes |
7,305 | 4,328 | ||||
| Assets held for sale |
3,132 | 1,115 | ||||
| Total Current Assets |
300,950 | 225,764 | ||||
| Property, Plant and Equipment, net |
79,039 | 63,350 | ||||
| Other Assets: |
||||||
| Goodwill |
163,720 | 140,179 | ||||
| Intangibles, net |
49,226 | 20,941 | ||||
| Other assets |
12,740 | 10,146 | ||||
| Total Assets |
$ | 605,675 | $ | 460,380 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||
| Current Liabilities: |
||||||
| Accounts payable |
$ | 71,788 | $ | 49,736 | ||
| Accrued expenses and other current liabilities |
54,359 | 26,031 | ||||
| Accrued compensation and benefits |
15,325 | 14,509 | ||||
| Income taxes payable |
6,027 | 3,418 | ||||
| Notes payable and current portion of long-term debt |
415 | 27,213 | ||||
| Total Current Liabilities |
147,914 | 120,907 | ||||
| Long-Term Debt, net of current portion |
64,411 | 6,278 | ||||
| Deferred Income Taxes |
21,674 | 11,237 | ||||
| Other Non-Current Liabilities |
14,375 | 11,235 | ||||
| Shareholders’ Equity: |
||||||
| Preferred stock, $.01 par value; 1,000,000 shares authorized; no shares issued and outstanding |
— | — | ||||
| Common stock, $.01 par value; 29,000,000 shares authorized; and 16,181,070 and 15,823,529 issued and outstanding, respectively |
162 | 158 | ||||
| Additional paid-in capital |
224,508 | 215,274 | ||||
| Retained earnings |
109,251 | 82,318 | ||||
| Accumulated other comprehensive income |
23,380 | 12,973 | ||||
| Total Shareholders’ Equity |
357,301 | 310,723 | ||||
| Total Liabilities and Shareholders’ Equity |
$ | 605,675 | $ | 460,380 | ||
CIRCOR INTERNATIONAL, INC.
SUMMARY OF ORDERS AND BACKLOG
(in thousands)
UNAUDITED
| Three Months Ended | Year Ended | |||||||||||
| December 31, 2006 |
December 31, 2005 |
December 31, 2006 |
December 31, 2005 | |||||||||
| ORDERS |
||||||||||||
| Instrumentation & Thermal Fluid Controls |
$ | 75,962 | $ | 76,200 | $ | 331,495 | $ | 264,934 | ||||
| Energy Products |
95,368 | 43,739 | 381,762 | 181,481 | ||||||||
| Total orders |
$ | 171,330 | $ | 119,939 | $ | 713,257 | $ | 446,415 | ||||
| December 31, 2006 |
December 31, 2005 |
|||||||||||
| BACKLOG |
||||||||||||
| Instrumentation & Thermal Fluid Controls |
$ | 113,434 | $ | 84,019 | ||||||||
| Energy Products |
172,235 | 58,137 | ||||||||||
| Total backlog |
$ | 285,669 | $ | 142,156 | ||||||||
Note: Backlog includes all unshipped customer orders.
CIRCOR INTERNATIONAL, INC.
SUMMARY REPORT BY SEGMENT
(in thousands, except earnings per share)
UNAUDITED
| 2005 | 2006 | |||||||||||||||||||||||||||||||||||||||
| 1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | YTD | 1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | YTD | |||||||||||||||||||||||||||||||
| NET REVENUES |
||||||||||||||||||||||||||||||||||||||||
| Instrumentation & Thermal Fluid Controls (TFC) |
$ | 61,025 | $ | 62,908 | $ | 59,031 | $ | 68,312 | $ | 251,276 | $ | 72,434 | $ | 79,470 | $ | 79,205 | $ | 81,591 | $ | 312,700 | ||||||||||||||||||||
| Energy Products |
41,213 | 55,749 | 50,191 | 52,102 | 199,255 | 54,861 | 64,919 | 71,207 | 88,024 | 279,011 | ||||||||||||||||||||||||||||||
| Total |
102,238 | 118,657 | 109,222 | 120,414 | 450,531 | 127,295 | 144,389 | 150,412 | 169,615 | 591,711 | ||||||||||||||||||||||||||||||
| OPERATING MARGIN |
||||||||||||||||||||||||||||||||||||||||
| Instrumentation & TFC |
14.8 | % | 12.1 | % | 9.4 | % | 9.5 | % | 11.4 | % | 9.1 | % | 8.6 | % | 9.5 | % | 8.2 | % | 8.8 | % | ||||||||||||||||||||
| Energy Products |
8.0 | % | 10.7 | % | 11.3 | % | 9.5 | % | 10.0 | % | 10.4 | % | 11.4 | % | 13.2 | % | 15.7 | % | 13.0 | % | ||||||||||||||||||||
| Segment operating margin |
12.0 | % | 11.5 | % | 10.3 | % | 9.5 | % | 10.8 | % | 9.7 | % | 9.9 | % | 11.3 | % | 12.1 | % | 10.8 | % | ||||||||||||||||||||
| Corporate expenses |
-3.4 | % | -2.6 | % | -3.3 | % | -3.2 | % | -3.1 | % | -3.0 | % | -2.5 | % | -2.8 | % | -2.4 | % | -2.7 | % | ||||||||||||||||||||
| Special charges |
-0.3 | % | -0.1 | % | -0.5 | % | -0.6 | % | -0.4 | % | 0.0 | % | 0.0 | % | -0.3 | % | -0.1 | % | -0.1 | % | ||||||||||||||||||||
| Total operating margin |
8.4 | % | 8.7 | % | 6.6 | % | 5.8 | % | 7.3 | % | 6.7 | % | 7.4 | % | 8.1 | % | 9.5 | % | 8.0 | % | ||||||||||||||||||||
| OPERATING INCOME |
||||||||||||||||||||||||||||||||||||||||
| Instrumentation & TFC (excl. special & unusual charges) |
9,004 | 7,641 | 5,532 | 6,517 | 28,694 | 6,595 | 6,861 | 7,522 | 6,680 | 27,658 | ||||||||||||||||||||||||||||||
| Energy Products (excl. special & unusual charges) |
3,290 | 5,957 | 5,680 | 4,932 | 19,859 | 5,702 | 7,429 | 9,420 | 13,797 | 36,348 | ||||||||||||||||||||||||||||||
| Segment operating income (excl. special & unusual charges) |
12,294 | 13,598 | 11,212 | 11,449 | 48,553 | 12,297 | 14,290 | 16,942 | 20,477 | 64,006 | ||||||||||||||||||||||||||||||
| Corporate expenses |
(3,443 | ) | (3,105 | ) | (3,553 | ) | (3,817 | ) | (13,918 | ) | (3,809 | ) | (3,578 | ) | (4,284 | ) | (4,146 | ) | (15,817 | ) | ||||||||||||||||||||
| Special charges |
(305 | ) | (133 | ) | (496 | ) | (696 | ) | (1,630 | ) | — | (479 | ) | (200 | ) | (679 | ) | |||||||||||||||||||||||
| Total operating income |
8,546 | 10,360 | 7,163 | 6,936 | 33,005 | 8,488 | 10,712 | 12,179 | 16,131 | 47,510 | ||||||||||||||||||||||||||||||
| INTEREST EXPENSE, NET |
(787 | ) | (667 | ) | (728 | ) | (628 | ) | (2,810 | ) | (1,024 | ) | (1,464 | ) | (1,383 | ) | (1,246 | ) | (5,117 | ) | ||||||||||||||||||||
| OTHER (EXPENSE) INCOME, NET |
181 | (204 | ) | (174 | ) | 53 | (144 | ) | 131 | 248 | (27 | ) | (486 | ) | (134 | ) | ||||||||||||||||||||||||
| PRETAX INCOME |
7,940 | 9,489 | 6,261 | 6,361 | 30,051 | 7,595 | 9,496 | 10,769 | 14,399 | 42,259 | ||||||||||||||||||||||||||||||
| PROVISION FOR INCOME TAXES |
(2,779 | ) | (3,321 | ) | (1,955 | ) | (1,613 | ) | (9,668 | ) | (2,431 | ) | (3,038 | ) | (3,446 | ) | (4,016 | ) | (12,931 | ) | ||||||||||||||||||||
| EFFECTIVE TAX RATE |
35.0 | % | 35.0 | % | 31.2 | % | 25.4 | % | 32.2 | % | 32.0 | % | 32.0 | % | 32.0 | % | 27.9 | % | 30.6 | % | ||||||||||||||||||||
| NET INCOME |
$ | 5,161 | $ | 6,168 | $ | 4,306 | $ | 4,748 | $ | 20,383 | $ | 5,164 | $ | 6,458 | $ | 7,323 | $ | 10,383 | $ | 29,328 | ||||||||||||||||||||
| Weighted Average Common Shares Outstanding (Diluted) |
16,054 | 16,171 | 16,228 | 16,172 | 16,019 | 16,197 | 16,332 | 16,368 | 16,438 | 16,291 | ||||||||||||||||||||||||||||||
| EARNINGS PER COMMON SHARE (Diluted) |
$ | 0.32 | $ | 0.38 | $ | 0.27 | $ | 0.29 | $ | 1.27 | $ | 0.32 | $ | 0.40 | $ | 0.45 | $ | 0.63 | $ | 1.80 | ||||||||||||||||||||
| EARNINGS PER COMMON SHARE (Diluted) excluding special charges |
$ | 0.33 | $ | 0.39 | $ | 0.29 | $ | 0.33 | $ | 1.34 | $ | 0.32 | $ | 0.40 | $ | 0.47 | $ | 0.64 | $ | 1.83 | ||||||||||||||||||||
| EBIT |
$ | 8,727 | $ | 10,156 | $ | 6,989 | $ | 6,989 | $ | 32,861 | $ | 8,619 | $ | 10,960 | $ | 12,152 | $ | 15,645 | $ | 47,376 | ||||||||||||||||||||
| Depreciation |
2,597 | 2,586 | 2,450 | 2,192 | 9,825 | 2,619 | 3,169 | 2,901 | 2,517 | 11,206 | ||||||||||||||||||||||||||||||
| Amortization of intangibles |
38 | 227 | 65 | 258 | 588 | 515 | 567 | 709 | 603 | 2,394 | ||||||||||||||||||||||||||||||
| EBITDA |
$ | 11,362 | $ | 12,969 | $ | 9,504 | $ | 9,439 | $ | 43,274 | $ | 11,753 | $ | 14,696 | $ | 15,762 | $ | 18,765 | $ | 60,976 | ||||||||||||||||||||
| EBITDA AS A PERCENT OF SALES |
11.1 | % | 10.9 | % | 8.7 | % | 7.8 | % | 9.6 | % | 9.2 | % | 10.2 | % | 10.5 | % | 11.1 | % | 10.3 | % | ||||||||||||||||||||
| CAPITAL EXPENDITURES |
$ | 3,668 | $ | 3,136 | $ | 4,649 | $ | 3,568 | $ | 15,021 | $ | 1,578 | $ | 1,742 | $ | 3,823 | $ | 2,790 | $ | 9,933 | ||||||||||||||||||||
CIRCOR INTERNATIONAL, INC.
RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED
GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS
(in thousands)
UNAUDITED
| 2005 | 2006 | |||||||||||||||||||||||||||||||||||||||
| 1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | YTD | 1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | YTD | |||||||||||||||||||||||||||||||
| FREE CASH FLOW [NET CASH FLOW FROM OPERATING ACTIVITIES LESS CAPITAL EXPENDITURES LESS DIVIDENDS PAID] |
$ | (412 | ) | $ | 12,565 | $ | 5,307 | $ | 10,487 | $ | 27,947 | $ | (5,213 | ) | $ | 402 | $ | 8,865 | $ | 13,476 | $ | 17,530 | ||||||||||||||||||
| ADD: Capital expenditures |
3,668 | 3,136 | 4,649 | 3,568 | 15,021 | 1,578 | 1,742 | 3,823 | 2,790 | 9,933 | ||||||||||||||||||||||||||||||
| Dividends paid |
586 | 589 | 590 | 593 | 2,358 | 595 | 600 | 600 | 600 | 2,395 | ||||||||||||||||||||||||||||||
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
$ | 3,842 | $ | 16,290 | $ | 10,546 | $ | 14,648 | $ | 45,326 | $ | (3,040 | ) | $ | 2,744 | $ | 13,288 | $ | 16,866 | $ | 29,858 | |||||||||||||||||||
| NET (CASH) DEBT [TOTAL DEBT LESS CASH AND CASH EQUIVALENTS LESS INVESTMENTS] |
$ | 15,367 | $ | 10,371 | $ | 2,054 | $ | 2,293 | $ | 2,293 | $ | 68,271 | $ | 64,336 | $ | 55,157 | $ | 36,088 | $ | 36,088 | ||||||||||||||||||||
| ADD: Cash and cash equivalents |
24,942 | 29,269 | 39,154 | 31,112 | 31,112 | 27,069 | 25,966 | 33,265 | 28,652 | 28,652 | ||||||||||||||||||||||||||||||
| Investments |
4,117 | 4,026 | 4,308 | 86 | 86 | — | 2,639 | 90 | 86 | 86 | ||||||||||||||||||||||||||||||
| TOTAL DEBT |
$ | 44,426 | $ | 43,666 | $ | 45,516 | $ | 33,491 | $ | 33,491 | $ | 95,340 | $ | 92,941 | $ | 88,512 | $ | 64,826 | $ | 64,826 | ||||||||||||||||||||
| NET DEBT AS % OF NET CAPITALIZATION |
4.9 | % | 3.3 | % | 0.7 | % | 0.7 | % | 0.7 | % | 17.7 | % | 16.2 | % | 13.9 | % | 9.2 | % | 9.2 | % | ||||||||||||||||||||
| NET CAPITALIZATION [TOTAL DEBT PLUS SHAREHOLDERS’ EQUITY LESS CASH AND CASH EQUIVALENTS, LESS INVESTMENTS] |
$ | 313,378 | $ | 310,514 | $ | 309,763 | $ | 313,016 | $ | 313,016 | $ | 385,659 | $ | 397,814 | $ | 397,012 | $ | 393,389 | $ | 393,389 | ||||||||||||||||||||
| LESS: Total debt |
(44,426 | ) | (43,666 | ) | (45,516 | ) | (33,491 | ) | (33,491 | ) | (95,340 | ) | (92,941 | ) | (88,512 | ) | (64,826 | ) | (64,826 | ) | ||||||||||||||||||||
| ADD: Cash and cash equivalents |
24,942 | 29,269 | 39,154 | 31,112 | 31,112 | 27,069 | 25,966 | 33,265 | 28,652 | 28,652 | ||||||||||||||||||||||||||||||
| Investments |
4,117 | 4,026 | 4,308 | 86 | 86 | — | 2,639 | 90 | 86 | 86 | ||||||||||||||||||||||||||||||
| TOTAL SHAREHOLDERS’ EQUITY |
298,011 | 300,143 | 307,709 | 310,723 | 310,723 | 317,388 | 333,478 | 341,855 | 357,301 | 357,301 | ||||||||||||||||||||||||||||||
| ADD: Total debt |
44,426 | 43,666 | 45,516 | 33,491 | 33,491 | 95,340 | 92,941 | 88,512 | 64,826 | 64,826 | ||||||||||||||||||||||||||||||
| TOTAL CAPITAL |
$ | 342,437 | $ | 343,809 | $ | 353,225 | $ | 344,214 | $ | 344,214 | $ | 412,728 | $ | 426,419 | $ | 430,367 | $ | 422,127 | $ | 422,127 | ||||||||||||||||||||
| TOTAL DEBT / TOTAL CAPITAL |
13.0 | % | 12.7 | % | 12.9 | % | 9.7 | % | 9.7 | % | 23.1 | % | 21.8 | % | 20.6 | % | 15.4 | % | 15.4 | % | ||||||||||||||||||||
| EBIT [NET INCOME LESS INTEREST EXPENSE, NET] |
$ | 8,727 | $ | 10,156 | $ | 6,989 | $ | 6,989 | $ | 32,861 | $ | 8,619 | $ | 10,960 | $ | 12,152 | $ | 15,645 | $ | 47,376 | ||||||||||||||||||||
| LESS: Interest expense, net |
(787 | ) | (667 | ) | (728 | ) | (628 | ) | (2,810 | ) | (1,024 | ) | (1,464 | ) | (1,383 | ) | (1,246 | ) | (5,117 | ) | ||||||||||||||||||||
| Provision for income taxes |
(2,779 | ) | (3,321 | ) | (1,955 | ) | (1,613 | ) | (9,668 | ) | (2,431 | ) | (3,038 | ) | (3,446 | ) | (4,016 | ) | (12,931 | ) | ||||||||||||||||||||
| NET INCOME |
$ | 5,161 | $ | 6,168 | $ | 4,306 | $ | 4,748 | $ | 20,383 | $ | 5,164 | $ | 6,458 | $ | 7,323 | $ | 10,383 | $ | 29,328 | ||||||||||||||||||||
| EBITDA [NET INCOME LESS INTEREST EXPENSE, NET LESS DEPRECIATION LESS AMORTIZATION LESS TAXES] |
$ | 11,362 | $ | 12,969 | $ | 9,504 | $ | 9,439 | $ | 43,274 | $ | 11,753 | $ | 14,696 | $ | 15,762 | $ | 18,765 | $ | 60,976 | ||||||||||||||||||||
| LESS: |
||||||||||||||||||||||||||||||||||||||||
| Interest expense, net |
(787 | ) | (667 | ) | (728 | ) | (628 | ) | (2,810 | ) | (1,024 | ) | (1,464 | ) | (1,383 | ) | (1,246 | ) | (5,117 | ) | ||||||||||||||||||||
| Depreciation |
(2,597 | ) | (2,586 | ) | (2,450 | ) | (2,192 | ) | (9,825 | ) | (2,619 | ) | (3,169 | ) | (2,901 | ) | (2,517 | ) | (11,206 | ) | ||||||||||||||||||||
| Amortization of intangibles |
(38 | ) | (227 | ) | (65 | ) | (258 | ) | (588 | ) | (515 | ) | (567 | ) | (709 | ) | (603 | ) | (2,394 | ) | ||||||||||||||||||||
| Provision for income taxes |
(2,779 | ) | (3,321 | ) | (1,955 | ) | (1,613 | ) | (9,668 | ) | (2,431 | ) | (3,038 | ) | (3,446 | ) | (4,016 | ) | (12,931 | ) | ||||||||||||||||||||
| NET INCOME |
$ | 5,161 | $ | 6,168 | $ | 4,306 | $ | 4,748 | $ | 20,383 | $ | 5,164 | $ | 6,458 | $ | 7,323 | $ | 10,383 | $ | 29,328 | ||||||||||||||||||||
| INCOME EXCLUDING SPECIAL CHARGES [NET INCOME LESS SPECIAL CHARGES, NET OF TAX] |
$ | 5,359 | $ | 6,254 | $ | 4,647 | $ | 5,268 | $ | 21,489 | $ | 5,164 | $ | 6,458 | $ | 7,649 | $ | 10,527 | $ | 29,799 | ||||||||||||||||||||
| LESS: Special charges, net of tax |
(198 | ) | (86 | ) | (341 | ) | (520 | ) | (1,106 | ) | — | — | (326 | ) | (144 | ) | (471 | ) | ||||||||||||||||||||||
| NET INCOME |
$ | 5,161 | $ | 6,168 | $ | 4,306 | $ | 4,748 | $ | 20,383 | $ | 5,164 | $ | 6,458 | $ | 7,323 | $ | 10,383 | $ | 29,328 | ||||||||||||||||||||
| Weighted average common shares outstanding (diluted) |
16,054 | 16,171 | 16,228 | 16,172 | 16,019 | 16,197 | 16,332 | 16,368 | 16,438 | 16,291 | ||||||||||||||||||||||||||||||
| EARNINGS PER SHARE EXCLUDING SPECIAL CHARGES |
$ | 0.33 | $ | 0.39 | $ | 0.29 | $ | 0.33 | $ | 1.34 | $ | 0.32 | $ | 0.40 | $ | 0.47 | $ | 0.64 | $ | 1.83 | ||||||||||||||||||||