News Release

BURLINGTON, Mass.--(BUSINESS WIRE)--Apr. 22, 2014-- CIRCOR International, Inc. (NYSE: CIR), a leading provider of valves and other highly engineered products for markets including oil & gas, power generation and aerospace & defense, today announced financial results for the first quarter ended March 30, 2014.

First-Quarter 2014 Highlights

• Revenue grew 3%
• Adjusted operating margin increased 230 basis points to 9.4%
• Adjusted EPS grew 50% to $0.78 (including $0.03 from foreign currency)
• Free cash flow was $14.4 million, 98% of net income
• Announcing growth investment funded by restructuring G&A

“CIRCOR began 2014 with strong first-quarter operating results,” said Scott Buckhout, CIRCOR President and Chief Executive Officer. “Our margin expansion initiatives continued to gain traction with adjusted operating margins up year-over-year by 230 basis points to 9.4%. Margins improved across most of our businesses. We had strong sales growth in our upstream markets, particularly in our large international projects business and our instrumentation and sampling business.”

“Q1 order intake was down over last year primarily due to orders from our project businesses, which can vary significantly from quarter to quarter. We remain bullish on our energy end markets and expect solid order intake for the full year,” said Buckhout.

“Today we are announcing an investment program to accelerate organic growth. We intend to invest approximately $7 million to increase the size our sales force in growing markets, open international sales offices in Brazil and Malaysia, and increase our investment in new products. These actions will be entirely funded with a reduction in G&A expenses and the closure of three small facilities,” concluded Buckhout.

Second-Quarter 2014 Guidance
For the second quarter of 2014, the Company expects:

• Revenues in the range of $220 million to $230 million;
• Adjusted earnings per share, excluding special charges, in the range of $0.88 to $0.94; and,
• Restructuring related costs of approximately $5 million to $6 million.

Selected Consolidated Results

(In millions, except percents and bps)		Q1 2014				Q1 2013				Change
Revenue		$	211.2			$	205.4				3%
Adjusted Operating Income		$	19.8			$	14.5				36%
Adjusted Operating Margin			9.4%				7.1%				230 bps
Adjusted Earnings Per Share (Diluted)		$	0.78			$	0.52				50%
Orders		$	199.9			$	226.8				(12)%
Backlog		$	448.3			$	457.3				(2)%
Free Cash Flow		$	14.4			$	1.1				-

Note: These amounts exclude special recoveries and charges. Refer to reconciliation to commonly used US GAAP terms.

Segment Results

(In millions, except percents and bps)		Q1 2014				Q1 2013				Change
Energy
Revenue		$	162.6			$	157.1				3%
Adjusted Operating Margin			13.8%				10.8%				300 bps
Orders		$	159.5			$	173.5				(8)%
Backlog		$	283.1			$	274.4				3%
Aerospace & Defense
Revenue		$	48.6			$	48.3				1%
Adjusted Operating Margin			9.1%				5.9%				320 bps
Orders		$	40.4			$	53.3				(24)%
Backlog		$	165.2			$	182.9				(10)%

Note: These amounts exclude special recoveries and charges. Refer to reconciliation to commonly used US GAAP terms.

Conference Call Information

CIRCOR International will hold a conference call to review its financial results today, April 22, 2014, at 10:00 a.m. ET. To listen to the conference call and view the accompanying presentation slides, visit “Webcasts & Presentations” in the “Investors” section of the CIRCOR website. The call also can be accessed by dialing (877) 407-5790 or (201) 689-8328. The webcast will be archived for one year on the Company’s website.

Use of Non-GAAP Financial Measures
Adjusted net income, adjusted earnings per diluted share, adjusted operating income, adjusted operating margin, and free cash flow are non-GAAP financial measures and are intended to serve as a complement to results provided in accordance with accounting principles generally accepted in the United States. CIRCOR believes that such information provides an additional measurement and consistent historical comparison of the Company’s performance. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in this news release.

Safe Harbor Statement
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. Any statements in this press release that are not statements of historical fact are forward-looking statements, including, but not limited to, those relating to CIRCOR’s future performance, including second-quarter revenue and earnings guidance and estimated total annualized pre-tax savings from restructuring actions. 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 AND SUBSEQUENT REPORTS ON FORMS 10-Q, 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.

About CIRCOR International, Inc.
CIRCOR International, Inc. designs, manufactures and markets highly engineered products and sub-systems for markets including oil & gas, power generation and aerospace & defense. With more than 7,000 customers in over 100 countries, CIRCOR has a diversified product portfolio with recognized, market-leading brands that fulfill its customers’ unique application needs. The Company’s strategy is to grow organically and through complementary acquisitions; simplify CIRCOR’s operations; achieve world class operational excellence; and attract and retain top industry talent. For more information, visit the Company’s investor relations website at http://investors.circor.com.

CIRCOR INTERNATIONAL, INC. CONSOLIDATED STATEMENT OF INCOME (in thousands, except share data) UNAUDITED
		Three Months Ended
		March 30, 2014				March 31, 2013
Net revenues		$	211,186			$	205,398
Cost of revenues		146,548				145,549
GROSS PROFIT		64,638				59,849
Selling, general and administrative expenses		44,888				45,571
Special (recoveries) charges, net		(1,157		)		1,378
OPERATING INCOME		20,907				12,900
Other (income) expense:
Interest expense, net		918				787
Other (income) expense, net		(468		)		612
TOTAL OTHER EXPENSE, NET		450				1,399
INCOME BEFORE INCOME TAXES		20,457				11,501
Provision for income taxes		5,825				3,592
NET INCOME		$	14,632			$	7,908
Earnings per common share:
Basic		$	0.83			$	0.45
Diluted		$	0.82			$	0.45
Weighted average number of common shares outstanding:
Basic		17,620				17,511
Diluted		17,741				17,529
Dividends paid per common share		$	0.0375			$	0.0375

CIRCOR INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (UNAUDITED)
		Three Months Ended
		March 30, 2014				March 31, 2013
OPERATING ACTIVITIES
Net income		$	14,632			$	7,908
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		4,069				4,009
Amortization		786				758
Compensation expense of share-based plans		1,830				1,028
Tax effect of share-based plan compensation		(571		)		(285		)
(Gain) loss on disposal of property, plant and equipment		34				(66		)
Changes in operating assets and liabilities:
Trade accounts receivable, net		(9,952		)		(2,455		)
Inventories, net		234				(6,461		)
Prepaid expenses and other assets		(859		)		(827		)
Accounts payable, accrued expenses and other liabilities		6,854				2,198
Net cash provided by operating activities		17,057				5,807
INVESTING ACTIVITIES
Additions to property, plant and equipment		(2,670		)		(4,707		)
Proceeds from the sale of property, plant and equipment		13				75
Net cash used in investing activities		(2,657		)		(4,632		)
FINANCING ACTIVITIES
Proceeds from long-term debt		48,029				33,598
Payments of long-term debt		(41,781		)		(37,655		)
Dividends paid		(670		)		(670		)
Proceeds from the exercise of stock options		192				1,368
Tax effect of share-based compensation		571				285
Net cash (used in) provided by financing activities		6,341				(3,074		)
Effect of exchange rate changes on cash and cash equivalents		(824		)		(2,207		)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		19,917				(4,106		)
Cash and cash equivalents at beginning of year		102,180				61,738
CASH AND CASH EQUIVALENTS AT END OF PERIOD		$	122,097			$	57,632
Cash paid during the year for:
Income taxes		$	2,913			$	1,462
Interest		$	677			$	655

CIRCOR INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS (in thousands) UNAUDITED
			March 30, 2014				December 31, 2013
ASSETS
CURRENT ASSETS:
Cash and cash equivalents			$	122,097			$	102,180
Short-term investments			92				95
Trade accounts receivable, less allowance for doubtful accounts of $2,543 and $2,449, respectively			154,821				144,742
Inventories, net			199,200				199,404
Prepaid expenses and other current assets			20,496				19,815
Deferred income tax asset			17,566				17,686
Total Current Assets			514,272				483,922
PROPERTY, PLANT AND EQUIPMENT, NET			106,455				107,724
OTHER ASSETS:
Goodwill			75,999				75,876
Intangibles, net			34,924				35,656
Deferred income tax asset			17,167				18,579
Other assets			5,140				4,893
TOTAL ASSETS			$	753,957			$	726,650
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable			$	83,391			$	70,589
Accrued expenses and other current liabilities			56,710				57,507
Accrued compensation and benefits			25,191				31,289
Income taxes payable			4,946				3,965
Notes payable and current portion of long-term debt			10,519				7,203
Total Current Liabilities			180,757				170,553
LONG-TERM DEBT, NET OF CURRENT PORTION			45,614				42,435
DEFERRED INCOME TAXES			9,217				9,666
OTHER NON-CURRENT LIABILITIES			25,768				27,109
CONTINGENCIES AND COMMITMENTS
SHAREHOLDERS’ EQUITY:
Common stock			176				176
Additional paid-in capital			272,202				269,884
Retained earnings			217,045				202,930
Accumulated other comprehensive gain, net of taxes			3,178				3,897
Total Shareholders’ Equity			492,601				476,887
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY			$	753,957			$	726,650

CIRCOR INTERNATIONAL, INC. SUMMARY OF ORDERS AND BACKLOG (in millions) UNAUDITED
		Three Months Ended
		March 30, 2014				March 31, 2013
ORDERS (1)
Energy		$	159.5			$	173.5
Aerospace & Defense		40.4				53.3
Total orders		$	199.9			$	226.8
BACKLOG (2)		March 30, 2014				March 31, 2013
Energy		$	283.1			$	274.4
Aerospace & Defense		165.2				182.9
Total backlog		$	448.3			$	457.3
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 includes all unshipped customer orders.

CIRCOR INTERNATIONAL, INC. SUMMARY REPORT BY SEGMENT (in thousands, except earnings per share) UNAUDITED
		2013																				2014
		1ST QTR				2ND QTR				3RD QTR				4TH QTR				TOTAL				1ST QTR
NET REVENUES
Energy		$	157,104			$	173,557			$	167,660			$	162,649			$	660,970			$	162,587
Aerospace & Defense		48,294				50,087				47,071				51,386				196,838				48,599
Total		$	205,398			$	223,644			$	214,731			$	214,035			$	857,808			$	211,186
ADJUSTED OPERATING MARGIN
Energy		10.8		%		13.3		%		15.2		%		17.1		%		14.1		%		13.8		%
Aerospace & Defense		5.9		%		11.4		%		12.1		%		8.4		%		9.5		%		9.1		%
Segment operating margin		9.6		%		12.9		%		14.5		%		15.0		%		13.0		%		12.7		%
Corporate expenses		(2.6		)%		(2.9		)%		(3.4		)%		(3.5		)%		(3.1		)%		(3.4		)%
Adjusted operating margin		7.1		%		10.0		%		11.1		%		11.6		%		9.9		%		9.4		%
Restructuring inventory charges		0.1		%		(0.1		)%		—		%		0.3		%		0.1		%		—		%
Impairment charges		—		%		—		%		—		%		3.2		%		0.8		%		—		%
Special (recoveries)		—		%		—		%		(1.5		)%		—		%		(0.4		)%		(1.1		)%
Special charges		0.7		%		1.0		%		1.4		%		2.4		%		1.4		%		0.5		%
Total GAAP operating margin		6.3		%		9.1		%		11.1		%		5.6		%		8.1		%		9.9		%
		2013																				2014
		1ST QTR				2ND QTR				3RD QTR				4TH QTR				TOTAL				1ST QTR
ADJUSTED OPERATING INCOME
Energy		$	16,940			$	23,114			$	25,441			$	27,809			$	93,304			$	22,462
Aerospace & Defense		2,864				5,724				5,705				4,342				18,635				4,426
Segment operating income		19,804				28,838				31,146				32,151				111,939				26,888
Corporate expenses		(5,277		)		(6,570		)		(7,400		)		(7,400		)		(26,646		)		(7,137		)
Adjusted operating income		14,528				22,268				23,746				24,751				85,293				19,750
Restructuring inventory charges		250				(242		)		—				638				646				—
Impairment charges		—				—				—				6,872				6,872				—
Special (recoveries)		—				—				(3,151		)		—				(3,151		)		(2,243		)
Special charges		1,378				2,254				2,961				5,160				11,752				1,086
Total GAAP operating income		12,900				20,256				23,936				12,081				69,174				20,907
INTEREST EXPENSE, NET		(787		)		(838		)		(745		)		(792		)		(3,162		)		(918		)
OTHER (EXPENSE) INCOME, NET		(612		)		(626		)		(568		)		(167		)		(1,974		)		468
PRETAX INCOME		11,501				18,792				22,623				11,122				64,038				20,457
PROVISION FOR INCOME TAXES		(3,592		)		(6,124		)		(4,903		)		(2,297		)		(16,916		)		(5,825		)
EFFECTIVE TAX RATE		31.2		%		32.6		%		21.7		%		20.7		%		26.4		%		28.5		%
NET INCOME		$	7,908			$	12,668			$	17,720			$	8,825			$	47,121			$	14,632
Weighted Average Common Shares Outstanding (Diluted)		17,529				17,607				17,667				17,710				17,629				17,741
EARNINGS PER COMMON SHARE (Diluted)		$	0.45			$	0.72			$	1.00			$	0.50			$	2.67			$	0.82
ADJUSTED EBITDA		$	18,682			$	26,419			$	27,850			$	29,441			$	102,392			$	27,387
ADJUSTED EBITDA AS A % OF SALES		9.1		%		11.8		%		13.0		%		13.8		%		11.9		%		13.0		%
CAPITAL EXPENDITURES		$	4,707			$	4,100			$	4,772			$	3,749			$	17,328			$	2,670

CIRCOR INTERNATIONAL, INC. RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS (in thousands, except earnings per share) UNAUDITED
		2013																				2014
		1ST QTR				2ND QTR				3RD QTR				4TH QTR				TOTAL				1ST QTR
FREE CASH FLOW AS % OF NET INCOME		14		%		75		%		167		%		167		%		116		%		98		%
FREE CASH FLOW		$	1,100			$	9,525			$	29,557			$	14,696			$	54,878			$	14,387
ADD:
Capital Expenditures		4,707				4,100				4,772				3,749				17,328				2,670
NET CASH PROVIDED BY OPERATING ACTIVITIES		$	5,807			$	13,625			$	34,329			$	18,445			$	72,206			$	17,057
NET DEBT (CASH)		$	8,814			$	(1,376	)		$	(36,466	)		$	(52,637	)		$	(52,637	)		$	(66,056	)
ADD:
Cash & Cash Equivalents		57,633				60,831				86,285				102,180				102,180				122,097
Investments		99				96				98				95				95				92
TOTAL DEBT		$	66,546			$	59,551			$	49,917			$	49,638			$	49,638			$	56,133
DEBT AS % OF EQUITY		16		%		14		%		11		%		10		%		10		%		11		%
TOTAL DEBT		66,546				59,551				49,917				49,638				49,638				56,133
TOTAL SHAREHOLDERS' EQUITY		418,819				432,151				459,058				476,887				476,887				492,601
		2013																				2014
		1ST QTR				2ND QTR				3RD QTR				4TH QTR				TOTAL				1ST QTR
ADJUSTED OPERATING INCOME		$	14,528			$	22,268			$	23,746			$	24,751			$	85,293			$	19,750
LESS:
Inventory restructuring charges		250				(242		)		—				638				646				—
Impairment charges		—				—				—				6,872				6,872				—
Special (recoveries)		—				—				(3,151		)		—				(3,151		)		(2,243		)
Special charges		1,378				2,254				2,961				5,160				11,753				1,086
OPERATING INCOME		$	12,900			$	20,256			$	23,936			$	12,081			$	69,173			$	20,907
ADJUSTED NET INCOME		$	9,043			$	14,044			$	16,439			$	16,773			$	56,299			$	13,916
LESS:
Inventory restructuring charges, net of tax		174				(165		)		—				396				405				—
Impairment charges, net of tax		—				—				—				4,261				4,261				—
Special (recoveries), net of tax		—				—				(3,151		)		—				(3,151		)		(1,391		)
Special charges, net of tax		961				1,541				1,870				3,291				7,663				675
NET INCOME		$	7,908			$	12,668			$	17,720			$	8,825			$	47,121			$	14,632
ADJUSTED EARNINGS PER SHARE		$	0.52			$	0.81			$	0.93			$	0.95			$	3.21			$	0.78
LESS:
Inventory restructuring charges, net of tax		0.01				(0.01		)		—				0.02				0.02				—
Impairment charges, net of tax		—				—				—				0.24				0.24				—
Special (recoveries), net of tax		—				—				(0.18		)		—				(0.18		)		(0.08		)
Special charges, net of tax		0.06				0.10				0.11				0.19				0.46				0.04
EARNINGS PER COMMON SHARE (Diluted)		$	0.45			$	0.72			$	1.00			$	0.50			$	2.67			$	0.82
		2013																				2014
		1ST QTR				2ND QTR				3RD QTR				4TH QTR				TOTAL				1ST QTR
EBITDA		$	17,054			$	24,407			$	23,368			$	11,914			$	86,272			$	26,230
LESS:
Interest expense, net		(787		)		(838		)		(745		)		(792		)		(3,162		)		(918		)
Depreciation		(4,009		)		(4,026		)		(3,908		)		(4,091		)		(16,034		)		(4,069		)
Amortization		(758		)		(751		)		(764		)		(766		)		(3,039		)		(786		)
Provision for income taxes		(3,592		)		(6,124		)		(4,903		)		(2,297		)		(16,916		)		(5,825		)
NET INCOME		$	7,908			$	12,668			$	17,720			$	8,825			$	47,121			$	14,632
ADJUSTED EBITDA		$	18,682			$	26,419			$	27,850			$	29,441			$	102,392			$	27,387
Inventory restructuring charges		(250		)		242				—				(638		)		(646		)		—
Impairment charges		—				—				—				(6,872		)		(6,872		)		—
Special (recoveries)		—				—				3,151				—				3,151				(2,243		)
Special charges		(1,378		)		(2,254		)		(2,961		)		(5,160		)		(11,753		)		1,086
Interest expense, net		(787		)		(838		)		(745		)		(792		)		(3,162		)		(918		)
Depreciation		(4,009		)		(4,026		)		(3,908		)		(4,091		)		(16,034		)		(4,069		)
Amortization		(758		)		(751		)		(764		)		(766		)		(3,039		)		(786		)
Provision for income taxes		(3,592		)		(6,124		)		(4,903		)		(2,297		)		(16,916		)		(5,825		)
NET INCOME		$	7,908			$	12,668			$	17,720			$	8,825			$	47,121			$	14,632

CIRCOR INTERNATIONAL, INC. RECONCILIATION OF FUTURE PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS UNAUDITED
		2nd Quarter 2014
		Low				High
REVENUE (in millions)		$	220			$	230
EXPECTED ADJUSTED EARNINGS PER SHARE (DILUTIVE)		$	0.88			$	0.94
LESS: Restructuring related charges, Special charges		$	0.25			$	0.21
EXPECTED EARNINGS PER COMMON SHARE (Diluted)		$	0.63			$	0.73
Note: Assumes 26% - 27% tax rate and exchange rates at present values.

Source: CIRCOR International, Inc.

CIRCOR International
Rajeev Bhalla, 781-270-1200
Executive Vice President & Chief Financial Officer