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): October 29, 2008
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 October 29, 2008, the Company announced its financial results for the three months ended September 28, 2008. 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 adjusted operating income. 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 adjusted operating income (defined as operating income, excluding the impact of special charges, and asbestos related costs) are provided because management believes these measurements are useful for investors and financial institutions to analyze and compare companies on the basis of operating performance. Free cash flow, EBIT, EBITDA, and adjusted operating income 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 adjusted operating income, 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, and EBITDA, 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 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| Exhibit No. |
Description | |||
| 99.1 | Press Release regarding Earnings, Dated October 29, 2008. | |||
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: November 3, 2008 | CIRCOR INTERNATIONAL, INC. | |||||
| By: | /s/ Frederic M. Burditt | |||||
| Frederic M. Burditt | ||||||
| Vice President, Chief Financial Officer and Treasurer | ||||||
3
EXHIBIT 99.1
|
PRESS RELEASE
|
| Contact: | Frederic M. Burditt | |
| Chief Financial Officer CIRCOR International, Inc. (781) 270-1200 |
CIRCOR Reports Third Quarter Earnings of $1.16 Per Share
| • | Company posts record quarterly operating margins at 13.9% |
| • | Diluted earnings per share increased 87% over the third quarter of 2007 on revenue growth of 27% |
Burlington, MA, October 29, 2008
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 third quarter ended September 28, 2008.
Revenues for the 2008 third quarter were $208.7 million, an increase of 27% from $164.0 million for the third quarter 2007. Net income for the third quarter of 2008 increased 91% to $19.8 million, or $1.16 per diluted share. Net income for the third quarter of 2007 was $10.4 million, or $0.62 per diluted share, which included special charges of $0.13 per diluted share primarily related to executive retirement expenses.
For the nine months ended September 28, 2008, revenues were $591.9 million, an increase of 21% from $491.2 million for the comparable period in 2007. Net income for the first nine months of 2008 was $51.1 million, or $3.01 per diluted share, an increase of 84% from $27.8 million, or $1.67 per diluted share, from the first nine months of 2007.
The Company reported orders totaling $164.3 million during the third quarter of 2008, a decrease of 12% from the third quarter of 2007, of which 10% declined due to the backlog revaluation from currency changes. Instrumentation and Thermal Fluid Controls segment orders remained strong, increasing 13% during the third quarter of 2008 compared to the same period in 2007, and increasing 1% compared to the second quarter of 2008. Energy segment orders declined 35% in the third quarter of 2008 compared to the same quarter in 2007 and declined 35% compared to the second quarter of 2008. Currency revaluation of the Euro-denominated backlog contributed to 15%, or $14.6 million of the Energy segment’s order decline. The remaining order drop in the Energy segment of $18.7 million is primarily the result of lower bookings for large projects for the Middle East. These lower bookings are the direct result of a short-term selective quoting approach targeted at large projects in the Middle East and implemented to enable the supply chain to alleviate past due deliveries caused by capacity constraints. The level of Middle East inquiries remains high and Energy segment orders in North America remained strong during the third quarter of 2008.
4
For the first nine months of 2008, orders totaled $599.2 million with a third quarter 2008 ending backlog of $401.6 million. This compares to 2007 orders for the first nine months of $601.2 million and a third quarter 2007 ending backlog of $395.7 million.
During the third quarter of 2008, the Company consumed $2.1 million of free cash flow (defined as net cash from operating activities, less capital expenditures and dividends paid) and, for the first nine months of 2008, the Company had free cash flow of $24.1 million. This compares favorably to the first nine months of 2007 during which the Company generated $11.5 million of free cash flow. The improvement from 2007 largely resulted from the sharp increase in profitability partially off-set by an increase in working capital needs.
Revenue for Circor’s Instrumentation and Thermal Fluid Controls Products segment increased 13%, to $96.3 million from $85.1 million in the third quarter of 2007, with approximately 1% of the increase due to favorable currency adjustments. Incoming orders for this segment were $101.6 million for the third quarter 2008, an increase of 13% from $90.0 million in the third quarter 2007. This segment’s operating margin for the third quarter 2008 was 7.9% compared to 7.1% in the third quarter of 2007, and 10.9% in the second quarter of 2008. Removing the impact of asbestos-related charges from all periods, this segment’s operating margin for the third quarter 2008 was 12.3% compared to 9.3% in the third quarter of 2007 and 12.6% in the second quarter of 2008. Compared to the third quarter of 2007, improvement primarily came from higher unit volume, favorable product mix, customer price increases and improved productivity as well as the Motor Technologies, Inc. acquisition. However these increases were partially offset by continuing increases in raw material costs.
Circor’s Energy Products segment revenues increased by $33.5 million, or 42%, to $112.4 million for the quarter ended September 28, 2008 compared to $78.9 million in the quarter ended September 30, 2007. Higher foreign exchange rates, primarily the higher Euro compared to the US dollar, accounted for approximately 7% of the incremental revenue increase. This segment’s operating margin was 23.2% during the third quarter of 2008 compared to 17.4% for the third quarter of 2007 and 20.4% for the second quarter of 2008. Consistent with the second quarter of 2008, margins benefited from favorable mix on large international oil and gas projects and increased unit volume, partially offset by material cost inflation and unfavorable currency impacts from China sourcing as the RMB continued to appreciate versus the US dollar.
Bill Higgins, Circor’s President and Chief Executive Officer, said, “Our third quarter results once again exceeded our expectations, producing another record quarter with operating margins of 13.9% compared to 7.8% for the similar period in 2007 and 13.3% in the second quarter of 2008. Also, free cash flow has greatly exceeded the first nine months of last year. Both segments continued to contribute with Instrumentation and Thermal Fluid Controls’ operating margins, excluding asbestos related expenses, 300 basis points over the third quarter of 2007 and Energy Products 580 basis points higher. We believe we are gaining market share in the Instrumentation and Thermal Fluid Controls segment as evidenced by strong bookings, and, although our large project business supplying the Middle East has been working through supply chain constraints, we are delivering great results. In addition, we continue to have a very strong balance sheet with 5% total debt to capital and $65 million of cash, cash equivalents and short-term investments.”
5
Circor provided guidance for its fourth quarter 2008 results, indicating it expects earnings, excluding special charges, to be in the range of $0.82 to $0.94 per diluted share. This fourth quarter guidance reflects a $0.09 reduction as a result of recent foreign currency devaluations against the US dollar since the end of the third quarter.
CIRCOR International will hold a conference call to review its results on Thursday, October 30, 2008, at 1:00 pm ET. Interested parties may access the call by dialing 888-221-3915 from the US and Canada and (913) 312-1498 from international locations. A replay of the call will be available from 4:00 pm ET on Thursday, October 30, 2008, through 4:00 pm ET on Thursday, November 6, 2008. To access the replay, interested parties should dial (888) 203-1112 or (719) 457-0820 and enter confirmation code 5254517 when prompted. The presentation slides that will be discussed in the conference call are expected to be available today, Wednesday, October 29, 2008, by 6:00 pm ET and may be downloaded from the quarterly earnings page of the investor section on the CIRCOR website at http://www.circor.com/quarterlyearnings.
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.
6
CIRCOR INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
UNAUDITED
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 28, 2008 |
September 30, 2007 |
September 28, 2008 |
September 30, 2007 |
|||||||||||||
| Net revenues |
$ | 208,680 | $ | 164,017 | $ | 591,860 | $ | 491,217 | ||||||||
| Cost of revenues |
141,369 | 116,465 | 402,752 | 349,052 | ||||||||||||
| GROSS PROFIT |
67,311 | 47,552 | 189,108 | 142,165 | ||||||||||||
| Selling, general and administrative expenses |
38,297 | 32,672 | 112,934 | 98,136 | ||||||||||||
| Special charges |
— | 2,131 | 160 | 3,436 | ||||||||||||
| OPERATING INCOME |
29,014 | 12,749 | 76,014 | 40,593 | ||||||||||||
| Other (income) expense: |
||||||||||||||||
| Interest income |
(447 | ) | (129 | ) | (954 | ) | (259 | ) | ||||||||
| Interest expense |
265 | 873 | 894 | 3,105 | ||||||||||||
| Other (income) expense, net |
11 | (1,508 | ) | 660 | (1,390 | ) | ||||||||||
| Total other expense |
(171 | ) | (764 | ) | 600 | 1,456 | ||||||||||
| INCOME BEFORE INCOME TAXES |
29,185 | 13,513 | 75,414 | 39,137 | ||||||||||||
| Provision for income taxes |
9,412 | 3,148 | 24,321 | 11,347 | ||||||||||||
| NET INCOME |
$ | 19,773 | $ | 10,365 | $ | 51,093 | $ | 27,790 | ||||||||
| Earnings per common share: |
||||||||||||||||
| Basic |
$ | 1.17 | $ | 0.63 | $ | 3.04 | $ | 1.70 | ||||||||
| Diluted |
$ | 1.16 | $ | 0.62 | $ | 3.01 | $ | 1.67 | ||||||||
| Weighted average common shares outstanding: |
||||||||||||||||
| Basic |
16,853 | 16,509 | 16,789 | 16,369 | ||||||||||||
| Diluted |
17,068 | 16,768 | 17,000 | 16,660 | ||||||||||||
CIRCOR INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
UNAUDITED
| Nine Months Ended | ||||||||
| September 28, 2008 |
September 30, 2007 |
|||||||
| OPERATING ACTIVITIES |
||||||||
| Net income |
$ | 51,093 | $ | 27,790 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation |
8,852 | 8,282 | ||||||
| Amortization |
2,012 | 1,917 | ||||||
| Compensation expense of stock-based plans |
3,428 | 4,769 | ||||||
| Tax effect of share based compensation |
(2,510 | ) | (3,570 | ) | ||||
| Loss on sale of assets held for sale |
1 | 210 | ||||||
| Gain on disposal of property, plant and equipment |
(93 | ) | (50 | ) | ||||
| Gain on sale of affiliate |
— | (1,605 | ) | |||||
| Equity in undistributed income of affiliates |
— | 452 | ||||||
| Changes in operating assets and liabilities, net of effects from business acquisitions: |
||||||||
| Trade accounts receivable |
(36,689 | ) | (680 | ) | ||||
| Inventories |
(3,233 | ) | (14,037 | ) | ||||
| Prepaid expenses and other assets |
(1,794 | ) | (8,031 | ) | ||||
| Accounts payable, accrued expenses and other liabilities |
15,091 | 4,759 | ||||||
| Net cash provided by operating activities |
36,158 | 20,206 | ||||||
| INVESTING ACTIVITIES |
||||||||
| Additions to property, plant and equipment |
(10,162 | ) | (6,886 | ) | ||||
| Proceeds from disposal of property, plant and equipment |
202 | 435 | ||||||
| Proceeds from sale of assets held for sale |
311 | 2,259 | ||||||
| Proceeds from sale of affiliate |
— | 1,605 | ||||||
| Purchase of ST investments |
(155,786 | ) | — | |||||
| Proceeds from sale of ST investments |
134,044 | — | ||||||
| Business acquisitions, net of cash acquired |
(7,263 | ) | (2,704 | ) | ||||
| Net cash used in investing activities |
(38,654 | ) | (5,291 | ) | ||||
| FINANCING ACTIVITIES |
||||||||
| Proceeds from debt borrowings |
86,495 | 70,359 | ||||||
| Payments of debt |
(86,358 | ) | (93,415 | ) | ||||
| Dividends paid |
(1,888 | ) | (1,840 | ) | ||||
| Proceeds from the exercise of stock options |
2,342 | 6,296 | ||||||
| Tax effect of share based compensation |
2,510 | 3,570 | ||||||
| Net cash provided by (used in) financing activities |
3,101 | (15,030 | ) | |||||
| Effect of exchange rate changes on cash and cash equivalents |
(90 | ) | 1,637 | |||||
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
515 | 1,522 | ||||||
| Cash and cash equivalents at beginning of year |
34,662 | 28,652 | ||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ | 35,177 | $ | 30,174 | ||||
CIRCOR INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
UNAUDITED
| September 28, 2008 | December 31, 2007 | |||||
| ASSETS |
||||||
| Current Assets: |
||||||
| Cash & cash equivalents |
$ | 35,177 | $ | 34,662 | ||
| Investments |
29,376 | 8,861 | ||||
| Trade accounts receivable, less allowance for doubtful accounts of $ 1,813 and $2,151, respectively |
162,267 | 125,663 | ||||
| Inventories |
176,125 | 171,661 | ||||
| Prepaid expenses and other current assets |
6,388 | 3,990 | ||||
| Deferred income taxes |
9,175 | 8,220 | ||||
| Insurance receivable |
6,353 | 6,885 | ||||
| Assets held for sale |
— | 312 | ||||
| Total Current Assets |
424,861 | 360,254 | ||||
| Property, Plant and Equipment, net |
84,228 | 82,465 | ||||
| Other Assets: |
||||||
| Goodwill |
178,932 | 169,110 | ||||
| Intangibles, net |
47,789 | 47,373 | ||||
| Non-current insurance receivable |
5,014 | 5,014 | ||||
| Other assets |
1,907 | 12,253 | ||||
| Total Assets |
$ | 742,731 | $ | 676,469 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||
| Current Liabilities: |
||||||
| Accounts payable |
$ | 87,910 | $ | 82,038 | ||
| Accrued expenses and other current liabilities |
78,844 | 72,481 | ||||
| Accrued compensation and benefits |
21,900 | 21,498 | ||||
| Asbestos liability |
12,723 | 9,697 | ||||
| Income taxes payable |
10,972 | 7,900 | ||||
| Notes payable and current portion of long-term debt |
338 | 201 | ||||
| Total Current Liabilities |
212,687 | 193,815 | ||||
| Long-Term Debt, net of current portion |
22,186 | 21,901 | ||||
| Deferred Income Taxes |
18,571 | 19,106 | ||||
| Long-Term Asbestos Liability |
7,062 | 7,062 | ||||
| Other Non-Current Liabilities |
11,337 | 14,201 | ||||
| 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 16,895,250 and 16,650,407 issued and outstanding, respectively |
169 | 167 | ||||
| Additional paid-in capital |
246,711 | 240,000 | ||||
| Retained earnings |
193,977 | 144,644 | ||||
| Accumulated other comprehensive income |
30,031 | 35,573 | ||||
| Total Shareholders’ Equity |
470,888 | 420,384 | ||||
| Total Liabilities and Shareholders’ Equity |
$ | 742,731 | $ | 676,469 | ||
CIRCOR INTERNATIONAL, INC.
SUMMARY OF ORDERS AND BACKLOG
(in thousands)
UNAUDITED
| Three Months Ended | Nine Months Ended | |||||||||||
| September 28, 2008 |
September 30, 2007 |
September 28, 2008 |
September 30, 2007 | |||||||||
| ORDERS |
||||||||||||
| Instrumentation & Thermal Fluid Controls |
$ | 101,593 | $ | 90,014 | $ | 313,760 | $ | 273,842 | ||||
| Energy Products |
62,689 | 95,998 | 285,426 | 327,404 | ||||||||
| Total orders |
$ | 164,282 | $ | 186,012 | $ | 599,186 | $ | 601,246 | ||||
| September 28, 2008 |
September 30, 2007 |
|||||||||||
| BACKLOG |
||||||||||||
| Instrumentation & Thermal Fluid Controls |
$ | 169,554 | $ | 135,146 | ||||||||
| Energy Products |
232,022 | 260,555 | ||||||||||
| Total backlog |
$ | 401,576 | $ | 395,701 | ||||||||
Note: Backlog includes all unshipped customer orders.
CIRCOR INTERNATIONAL, INC.
SUMMARY REPORT BY SEGMENT
(in thousands, except earnings per share)
UNAUDITED
| 2007 | 2008 | |||||||||||||||||||||||||||||||||||
| 1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | YTD | 1ST QTR | 2ND QTR | 3RD QTR | YTD | ||||||||||||||||||||||||||||
| NET REVENUES |
||||||||||||||||||||||||||||||||||||
| Instrumentation & Thermal Fluid Controls (TFC) |
$ | 81,296 | $ | 85,740 | $ | 85,094 | $ | 91,466 | $ | 343,596 | $ | 88,450 | $ | 98,867 | $ | 96,298 | $ | 283,615 | ||||||||||||||||||
| Energy Products |
79,967 | 80,197 | 78,923 | 83,057 | 322,144 | 88,125 | 107,738 | 112,382 | 308,245 | |||||||||||||||||||||||||||
| Total |
161,263 | 165,937 | 164,017 | 174,523 | 665,740 | 176,575 | 206,605 | 208,680 | 591,860 | |||||||||||||||||||||||||||
| ADJUSTED OPERATING MARGIN |
||||||||||||||||||||||||||||||||||||
| Instrumentation & TFC (excl. special & asbestos charges) |
8.9 | % | 9.6 | % | 9.3 | % | 12.8 | % | 10.2 | % | 12.5 | % | 12.6 | % | 12.3 | % | 12.5 | % | ||||||||||||||||||
| Energy Products (excl. special charges) |
12.7 | % | 16.3 | % | 17.4 | % | 15.3 | % | 15.4 | % | 16.2 | % | 20.4 | % | 23.2 | % | 20.2 | % | ||||||||||||||||||
| Segment operating income (excl. special & asbestos charges) |
10.8 | % | 12.8 | % | 13.2 | % | 14.0 | % | 12.7 | % | 14.4 | % | 16.6 | % | 18.1 | % | 16.5 | % | ||||||||||||||||||
| Corporate expenses (excl. special & asbestos charges) |
-2.3 | % | -2.3 | % | -3.0 | % | -3.1 | % | -2.7 | % | -2.6 | % | -2.4 | % | -2.4 | % | -2.5 | % | ||||||||||||||||||
| Asbestos charges (attributable to Instrumentation & TFC) |
-0.6 | % | -0.6 | % | -1.1 | % | -2.1 | % | -1.1 | % | -0.6 | % | -1.0 | % | -1.8 | % | -1.2 | % | ||||||||||||||||||
| Special charges |
-0.4 | % | -0.4 | % | -1.3 | % | 0.5 | % | -0.4 | % | -0.1 | % | 0.0 | % | 0.0 | % | 0.0 | % | ||||||||||||||||||
| Total operating margin |
7.4 | % | 9.5 | % | 7.8 | % | 9.3 | % | 8.5 | % | 11.0 | % | 13.3 | % | 13.9 | % | 12.8 | % | ||||||||||||||||||
| ADJUSTED OPERATING INCOME |
||||||||||||||||||||||||||||||||||||
| Instrumentation & TFC (excl. special & asbestos charges) |
7,271 | 8,204 | 7,913 | 11,681 | 35,069 | 11,069 | 12,451 | 11,803 | 35,323 | |||||||||||||||||||||||||||
| Energy Products (excl. special charges) |
10,125 | 13,063 | 13,745 | 12,675 | 49,608 | 14,303 | 21,938 | 26,023 | 62,264 | |||||||||||||||||||||||||||
| Segment operating income (excl. special & asbestos charges) |
17,396 | 21,267 | 21,658 | 24,356 | 84,677 | 25,372 | 34,389 | 37,826 | 97,587 | |||||||||||||||||||||||||||
| Corporate expenses (excl. special & asbestos charges) |
(3,653 | ) | (3,804 | ) | (4,942 | ) | (5,463 | ) | (17,862 | ) | (4,628 | ) | (4,890 | ) | (5,001 | ) | (14,519 | ) | ||||||||||||||||||
| Asbestos charges (attributable to Instrumentation & TFC) |
(1,038 | ) | (1,018 | ) | (1,837 | ) | (3,641 | ) | (7,534 | ) | (1,075 | ) | (2,009 | ) | (3,810 | ) | (6,894 | ) | ||||||||||||||||||
| Special charges |
(691 | ) | (615 | ) | (2,130 | ) | 922 | (2,514 | ) | (160 | ) | — | — | (160 | ) | |||||||||||||||||||||
| Total operating income |
12,014 | 15,830 | 12,749 | 16,174 | 56,767 | 19,509 | 27,490 | 29,015 | 76,014 | |||||||||||||||||||||||||||
| INTEREST EXPENSE, NET |
(1,218 | ) | (884 | ) | (744 | ) | (155 | ) | (3,001 | ) | (145 | ) | 23 | 182 | 60 | |||||||||||||||||||||
| OTHER (EXPENSE) INCOME, NET |
97 | (215 | ) | 1,508 | (133 | ) | 1,257 | (401 | ) | (248 | ) | (11 | ) | (660 | ) | |||||||||||||||||||||
| PRETAX INCOME |
10,893 | 14,731 | 13,513 | 15,886 | 55,023 | 18,963 | 27,265 | 29,186 | 75,414 | |||||||||||||||||||||||||||
| PROVISION FOR INCOME TAXES |
(3,486 | ) | (4,713 | ) | (3,148 | ) | (5,765 | ) | (17,112 | ) | (6,068 | ) | (8,840 | ) | (9,413 | ) | (24,321 | ) | ||||||||||||||||||
| EFFECTIVE TAX RATE |
32.0 | % | 32.0 | % | 23.3 | % | 36.3 | % | 31.1 | % | 32.0 | % | 32.4 | % | 32.3 | % | 32.2 | % | ||||||||||||||||||
| NET INCOME |
$ | 7,407 | $ | 10,018 | $ | 10,365 | $ | 10,121 | $ | 37,911 | $ | 12,895 | $ | 18,425 | $ | 19,773 | $ | 51,093 | ||||||||||||||||||
| Weighted Average Common Shares Outstanding (Diluted) |
16,533 | 16,679 | 16,768 | 16,925 | 16,730 | 16,872 | 17,053 | 17,068 | 17,000 | |||||||||||||||||||||||||||
| EARNINGS PER COMMON SHARE (Diluted) |
$ | 0.45 | $ | 0.60 | $ | 0.62 | $ | 0.60 | $ | 2.27 | $ | 0.76 | $ | 1.08 | $ | 1.16 | $ | 3.01 | ||||||||||||||||||
| EBIT |
$ | 12,111 | $ | 15,615 | $ | 14,257 | $ | 16,041 | $ | 58,024 | $ | 19,108 | $ | 27,242 | $ | 29,004 | $ | 75,354 | ||||||||||||||||||
| Depreciation |
2,808 | 2,812 | 2,662 | 2,588 | 10,870 | 2,874 | 2,977 | 3,001 | 8,852 | |||||||||||||||||||||||||||
| Amortization of intangibles |
626 | 632 | 659 | 662 | 2,579 | 656 | 676 | 680 | 2,012 | |||||||||||||||||||||||||||
| EBITDA |
$ | 15,545 | $ | 19,059 | $ | 17,578 | $ | 19,291 | $ | 71,473 | $ | 22,638 | $ | 30,895 | $ | 32,685 | $ | 86,218 | ||||||||||||||||||
| EBITDA AS A PERCENT OF SALES |
9.6 | % | 11.5 | % | 10.7 | % | 11.1 | % | 10.7 | % | 12.8 | % | 15.0 | % | 15.7 | % | 14.6 | % | ||||||||||||||||||
| CAPITAL EXPENDITURES |
$ | 1,776 | $ | 2,266 | $ | 2,844 | $ | 5,097 | $ | 11,983 | $ | 2,851 | $ | 3,433 | $ | 3,878 | $ | 10,162 | ||||||||||||||||||
CIRCOR INTERNATIONAL, INC.
RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED
GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS
(in thousands)
UNAUDITED
| 2007 | 2008 | |||||||||||||||||||||||||||||||||||
| 1ST QTR | 2ND QTR | 3RD QTR | 4TH QTR | YTD | 1ST QTR | 2ND QTR | 3RD QTR | YTD | ||||||||||||||||||||||||||||
| FREE CASH FLOW [NET CASH FLOW FROM OPERATING ACTIVITIES LESS CAPITAL EXPENDITURES LESS DIVIDENDS PAID] |
$ | (5,429 | ) | $ | 5,439 | $ | 11,470 | $ | 30,989 | $ | 42,469 | $ | (5,366 | ) | $ | 31,536 | $ | (2,062 | ) | $ | 24,108 | |||||||||||||||
| ADD: Capital expenditures |
1,776 | 2,266 | 2,844 | 5,097 | 11,983 | 2,851 | 3,433 | 3,878 | 10,162 | |||||||||||||||||||||||||||
| Dividends paid |
609 | 614 | 617 | 624 | 2,464 | 626 | 631 | 631 | 1,888 | |||||||||||||||||||||||||||
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
$ | (3,044 | ) | $ | 8,319 | $ | 14,931 | $ | 36,710 | $ | 56,916 | $ | (1,889 | ) | $ | 35,600 | $ | 2,447 | $ | 36,158 | ||||||||||||||||
| NET (CASH) DEBT [TOTAL DEBT LESS CASH & CASH EQUIVALENTS LESS INVESTMENTS] |
$ | 39,366 | $ | 29,848 | $ | 11,815 | $ | (21,421 | ) | $ | (21,421 | ) | $ | (21,709 | ) | $ | (46,796 | ) | $ | (42,029 | ) | $ | (42,029 | ) | ||||||||||||
| ADD: Cash & cash equivalents |
27,050 | 25,281 | 30,174 | 34,662 | 34,662 | 42,690 | 38,835 | 35,177 | 35,177 | |||||||||||||||||||||||||||
| Investments |
87 | 94 | 100 | 8,861 | 8,861 | 4,036 | 31,590 | 29,376 | 29,376 | |||||||||||||||||||||||||||
| TOTAL DEBT |
$ | 66,503 | $ | 55,223 | $ | 42,089 | $ | 22,102 | $ | 22,102 | $ | 25,017 | $ | 23,629 | $ | 22,524 | $ | 22,524 | ||||||||||||||||||
| NET DEBT AS % OF NET CAPITALIZATION |
10 | % | 7 | % | 3 | % | -5 | % | -5 | % | -5 | % | -11 | % | -10 | % | -10 | % | ||||||||||||||||||
| NET CAPITALIZATION [TOTAL DEBT PLUS SHAREHOLDERS’ EQUITY LESS CASH & CASH EQUIVALENTS, LESS INVESTMENTS] |
$ | 408,944 | $ | 415,386 | $ | 420,951 | $ | 398,963 | $ | 398,963 | $ | 424,670 | $ | 419,162 | $ | 428,859 | $ | 428,859 | ||||||||||||||||||
| LESS: Total debt |
(66,503 | ) | (55,223 | ) | (42,089 | ) | (22,102 | ) | (22,102 | ) | (25,017 | ) | (23,629 | ) | (22,524 | ) | (22,524 | ) | ||||||||||||||||||
| ADD: Cash & cash equivalents |
27,050 | 25,281 | 30,174 | 34,662 | 34,662 | 42,690 | 38,835 | 35,177 | 35,177 | |||||||||||||||||||||||||||
| Investments |
87 | 94 | 100 | 8,861 | 8,861 | 4,036 | 31,590 | 29,376 | 29,376 | |||||||||||||||||||||||||||
| TOTAL SHAREHOLDERS’ EQUITY |
369,578 | 385,538 | 409,136 | 420,384 | 420,384 | 446,379 | 465,958 | 470,888 | 470,888 | |||||||||||||||||||||||||||
| ADD: Total debt |
66,503 | 55,223 | 42,089 | 22,102 | 22,102 | 25,017 | 23,629 | 22,524 | 22,524 | |||||||||||||||||||||||||||
| TOTAL CAPITAL |
$ | 436,081 | $ | 440,761 | $ | 451,225 | $ | 442,486 | $ | 442,486 | $ | 471,396 | $ | 489,587 | $ | 493,412 | $ | 493,412 | ||||||||||||||||||
| TOTAL DEBT / TOTAL CAPITAL |
15 | % | 13 | % | 9 | % | 5 | % | 5 | % | 5 | % | 5 | % | 5 | % | 5 | % | ||||||||||||||||||
| EBIT [NET INCOME LESS INTEREST EXPENSE, NET] |
$ | 12,111 | $ | 15,615 | $ | 14,257 | $ | 16,041 | $ | 58,024 | $ | 19,108 | $ | 27,242 | $ | 29,004 | $ | 75,354 | ||||||||||||||||||
| LESS: Interest expense, net |
(1,218 | ) | (884 | ) | (744 | ) | (155 | ) | (3,001 | ) | (145 | ) | 23 | 182 | 60 | |||||||||||||||||||||
| Provision for income taxes |
(3,486 | ) | (4,713 | ) | (3,148 | ) | (5,765 | ) | (17,112 | ) | (6,068 | ) | (8,840 | ) | (9,413 | ) | (24,321 | ) | ||||||||||||||||||
| NET INCOME |
$ | 7,407 | $ | 10,018 | $ | 10,365 | $ | 10,121 | $ | 37,911 | $ | 12,895 | $ | 18,425 | $ | 19,773 | $ | 51,093 | ||||||||||||||||||
| EBITDA [NET INCOME LESS INTEREST EXPENSE, NET LESS DEPRECIATION LESS AMORTIZATION LESS TAXES] |
$ | 15,545 | $ | 19,059 | $ | 17,578 | $ | 19,291 | $ | 71,473 | $ | 22,638 | $ | 30,895 | $ | 32,685 | $ | 86,218 | ||||||||||||||||||
| LESS: |
||||||||||||||||||||||||||||||||||||
| Interest expense, net |
(1,218 | ) | (884 | ) | (744 | ) | (155 | ) | (3,001 | ) | (145 | ) | 23 | 182 | 60 | |||||||||||||||||||||
| Depreciation |
(2,808 | ) | (2,812 | ) | (2,662 | ) | (2,588 | ) | (10,870 | ) | (2,874 | ) | (2,977 | ) | (3,001 | ) | (8,852 | ) | ||||||||||||||||||
| Amortization of intangibles |
(626 | ) | (632 | ) | (659 | ) | (662 | ) | (2,579 | ) | (656 | ) | (676 | ) | (680 | ) | (2,012 | ) | ||||||||||||||||||
| Provision for income taxes |
(3,486 | ) | (4,713 | ) | (3,148 | ) | (5,765 | ) | (17,112 | ) | (6,068 | ) | (8,840 | ) | (9,413 | ) | (24,321 | ) | ||||||||||||||||||
| NET INCOME |
$ | 7,407 | $ | 10,018 | $ | 10,365 | $ | 10,121 | $ | 37,911 | $ | 12,895 | $ | 18,425 | $ | 19,773 | $ | 51,093 | ||||||||||||||||||