News Release

BURLINGTON, Mass.--(BUSINESS WIRE)--May 1, 2018-- CIRCOR International, Inc. (NYSE: CIR), a leading provider of flow control solutions and other highly engineered products for the Industrial, Energy, and Aerospace & Defense markets, today announced financial results for the first quarter ended April 1, 2018. Results include the acquisition of the Colfax Fluid Handling business, which CIRCOR acquired in December 2017.

First-Quarter 2018 Highlights

• Orders of $326.2 million, up 77% and down 1% organically
• Revenue of $275.6 million, up 90% and up 4% organically
• Backlog of $561 million, up $60 million in the quarter
• GAAP Loss Per Share of $0.88, Adjusted Earnings Per Share of $0.40
• Integration of Fluid Handling businesses on track

“The momentum we saw across many of our end markets in Q4 2017 is continuing as we move through the early stages of 2018,” said Scott Buckhout, President and Chief Executive Officer. “For CIRCOR overall, our reported results were stronger than we expected as we entered the quarter. Our book to bill ratio in Q1 was almost 1.2, increasing our backlog by $60 million. Orders continue to be healthy and we expect that trend to continue through the second quarter.”

“As we announced in Q1, we have re-aligned our businesses to focus on three primary end markets – Industrial, Energy, and Aerospace & Defense,” Buckhout said. “This is part of our strategy to simplify the business, clarify customer and channel relationships, and better exploit growth opportunities across the organization.”

“The Fluid Handling acquisition brings a strong platform for revenue growth and profitability. Fluid Handling orders were up 16% on a pro forma, organic basis in the quarter. The integration is on track, and we are confident in our ability to fully realize all of the committed synergies,” added Buckhout.

“Overall, we remain committed to driving long-term growth, generating strong cash flow, and delevering the Company by reducing debt and expanding margins,” concluded Buckhout.

Second-Quarter 2018 Guidance
For the second quarter of 2018, CIRCOR expects revenue in the range of $275 million to $285 million, and GAAP loss per share of $0.09 to $0.27, which reflects acquisition-related amortization expense of $0.51 to $0.53 and other special and restructuring charges of $0.12 to $0.18. Excluding the impact of amortization, special and restructuring charges, adjusted EPS is expected to be in the range of $0.44 to $0.54 per share. Presentation slides that provide supporting information to this guidance and first-quarter results are posted on the “Investors” section of the Company’s website, http://investors.circor.com, and will be discussed during the conference call at 9:00 a.m. ET tomorrow, May 2, 2018.

Selected Consolidated Results (unaudited)
($ millions except EPS)			Q1 2018				Q1 2017				Change
Revenue			$	275.6			$	145.2				90%
GAAP Operating (Loss) Income			$	(13.4)			$	7.4				N/M
Adjusted Operating Income1			$	19.8			$	9.1				118%
GAAP Operating Margin				(4.9)%				5.1%				N/M
Adjusted Operating Margin1				7.2%				6.3%				90 bps
GAAP (Loss) Earnings Per Share (Diluted)			$	(0.88)			$	0.29				N/M
Adjusted Earnings Per Share (Diluted)1			$	0.40			$	0.32				25%
Operating Cash Flow			$	(0.1)			$	16.2				N/M
Free Cash Flow2			$	(8.3)			$	13.4				N/M
Orders			$	326.2			$	184.1				77%
Segment Results
($ millions)			Q1 2018				Q1 2017				Change
Energy
Revenue			$	100.0			$	76.2				31%
Segment Operating Income			$	5.7			$	6.4				(11)%
Segment Operating Margin				5.7%				8.4%				(270) bps
Orders			$	129.8			$	100.0				30%
Aerospace & Defense
Revenue			$	58.5			$	41.6				41%
Segment Operating Income			$	8.9			$	3.8				136%
Segment Operating Margin				15.3%				9.1%				620 bps
Orders			$	59.8			$	56.4				6%
Industrial
Revenue			$	117.1			$	27.4				328%
Segment Operating Income			$	12.9			$	4.4				195%
Segment Operating Margin				11.1%				16.0%				(490) bps
Orders			$	136.6			$	27.7				394%

1.Adjusted Consolidated and Segment Results for Q1 2018 exclude non-cash acquisition-related intangible amortization, special and restructuring charges totaling $33.2 million ($25.5 million, net of tax). These charges include: (i) $20.2 million charge for non-cash acquisition-related intangible amortization expense, including the amortization of a step-up in fair value of inventories ($6.6 million); (ii) $10.5 million charge related to restructuring activities, primarily severance, related to our Engineered Valves, Reliability Services and Germany-based Pumps business; and (iii) $2.5 million related to the separation of Fluid Handling business from Colfax Corporation.Consolidated and Segment Results for Q1 2017 exclude non-cash acquisition-related intangible amortization, special and restructuring charges totaling $1.7 million ($0.6 million, net of tax). These charges include (i) $2.6 million charge for non-cash acquisition-related intangible amortization expense, (ii) $1.5 million charge related to other restructuring activities, primarily the exit of manufacturing operations in China and France; and (iii) $2.3 million net special gain primarily related to updating fair value estimates related to the purchase of Critical Flow Solutions, partially offset by Brazil losses incurred subsequent to our Q1 2016 closure of manufacturing operations.
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
CIRCOR International will hold a conference call to review its financial results at 9:00 a.m. ET tomorrow, May 2, 2018. To listen to the live conference call and view the accompanying presentation slides, please visit “Webcasts & Presentations” in the “Investors” portion of CIRCOR’s website. The live call also can be accessed by dialing (877) 407-5790 or (201) 689-8328. The webcast will be archived on the Company’s website for one year.

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 and pro forma combined amounts 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 better reflect our ongoing business and allow for meaningful 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.

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 the United States. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is included in this news release.

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 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 the realization of cost reductions from restructuring activities. Actual events, performance or results could differ materially from the anticipated events, performance or results expressed or implied by such forward-looking statements. Important factors that could cause actual results to vary from expectations include, but are not limited to: our ability to respond to competitive developments and to grow our business, both domestically and internationally; changes in the cost, quality or supply of raw materials; our ability to comply with our debt obligations; our ability to successfully implement our acquisition, divesture or restructuring strategies, including our integration of the recently acquired Fluid Handling business; changes in industry standards or government regulations, both in the United States and internationally; and our ability to operate our manufacturing facilities at current or higher levels and respond to increases in manufacturing costs. 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 differentiated technology products and sub-systems for markets including oil & gas, industrial, aerospace & defense and commercial marine. CIRCOR has a diversified flow and motion control product portfolio with recognized, market-leading brands that fulfill its customers’ mission critical 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 talent. For more information, visit the Company’s investor relations website at http://investors.circor.com.

CIRCOR INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME (in thousands, except per share data) (Unaudited)
			Three Months Ended
			April 1, 2018				April 2, 2017
Net revenues			$	275,580			$	145,208
Cost of revenues			199,276				98,575
GROSS PROFIT			76,304				46,633
Selling, general and administrative expenses			77,238				40,089
Special and restructuring charges (recoveries), net			12,446				(810		)
OPERATING (LOSS) INCOME			(13,380		)		7,354
Other expense (income):
Interest expense, net			11,801				1,669
Other (income) expense, net			(1,861		)		225
TOTAL OTHER EXPENSE, NET			9,940				1,894
(LOSS) INCOME BEFORE INCOME TAXES			(23,320		)		5,460
(Benefit from) provision for income taxes			(5,879		)		687
NET (LOSS) INCOME			$	(17,441	)		$	4,773
(Loss) Earnings per common share:
Basic			$	(0.88	)		$	0.29
Diluted			$	(0.88	)		$	0.29
Weighted average number of common shares outstanding:
Basic			19,806				16,458
Diluted			19,806				16,691
Dividends declared per common share			$	—			$	0.0375

CIRCOR INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited)
			Three Months Ended
OPERATING ACTIVITIES			April 1, 2018				April 2, 2017
Net (loss) income			$	(17,441	)		$	4,773
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation			7,334				3,798
Amortization			12,329				3,092
Bad debt expense (recovery)			192				(54		)
Loss on write down of inventory			6,466				548
Compensation expense of share-based plans			1,365				738
Change in fair value of contingent consideration			—				(2,500		)
Interest amortization			881				—
Loss (gain) on sale or write down of property, plant and equipment			1,284				(110		)
Changes in operating assets and liabilities, net of effects of acquisition and disposition:
Trade accounts receivable			12,141				14,018
Inventories			(13,833		)		2,030
Prepaid expenses and other assets			(6,616		)		(4,297		)
Accounts payable, accrued expenses and other liabilities			(4,249		)		(5,841		)
Net cash (used in) provided by operating activities			(147		)		16,195
INVESTING ACTIVITIES
Additions to property, plant and equipment			(8,234		)		(3,001		)
Proceeds from the sale of property, plant and equipment			93				190
Business acquisition, working capital adjustment			—				1,467
Net cash used in investing activities			(8,141		)		(1,344		)
FINANCING ACTIVITIES
Proceeds from long-term debt			71,950				34,900
Payments of long-term debt			(44,106		)		(43,100		)
Dividends paid			—				(624		)
Proceeds from the exercise of stock options			301				295
Return of cash to seller			(7,905		)		—
Net cash provided by (used in) financing activities			20,240				(8,529		)
Effect of exchange rate changes on cash and cash equivalents			957				1,055
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH			12,909				7,377
Cash, cash equivalents and restricted cash at beginning of period			112,293				58,279
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD			$	125,202			$	65,656

CIRCOR INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) (Unaudited)
			April 1, 2018				December 31, 2017
ASSETS
CURRENT ASSETS:
Cash and cash equivalents			$	123,305			$	110,356
Trade accounts receivable, less allowance for doubtful accounts of $13,512 and $15,434, respectively			204,437				223,922
Inventories			265,065				244,896
Prepaid expenses and other current assets			67,129				59,219
Total Current Assets			659,936				638,393
PROPERTY, PLANT AND EQUIPMENT, NET			226,439				217,539
OTHER ASSETS:
Goodwill			515,177				505,762
Intangibles, net			497,027				513,364
Deferred income taxes			28,236				22,334
Other assets			8,861				9,407
TOTAL ASSETS			$	1,935,676			$	1,906,799
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable			$	118,441			$	117,329
Accrued expenses and other current liabilities			179,106				170,454
Accrued compensation and benefits			30,865				34,734
Total Current Liabilities			328,412				322,517
LONG-TERM DEBT			815,795				787,343
DEFERRED INCOME TAXES			31,099				26,122
PENSION LIABILITY, NET			150,572				150,719
OTHER NON-CURRENT LIABILITIES			21,486				18,124
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Common stock			212				212
Additional paid-in capital			436,915				438,721
Retained earnings			254,046				274,243
Common treasury stock, at cost			(74,472		)		(74,472		)
Accumulated other comprehensive loss, net of tax			(28,389		)		(36,730		)
Total Shareholders’ Equity			588,312				601,974
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY			$	1,935,676			$	1,906,799

CIRCOR INTERNATIONAL, INC. SUMMARY OF ORDERS AND BACKLOG (in millions) UNAUDITED
			Three Months Ended
			April 1, 2018				April 2, 2017
ORDERS (1) (3)
Energy			$	129.8			$	100.0
Aerospace & Defense			59.8				56.4
Industrial			136.6				27.7
Total orders			$	326.2			$	184.1
BACKLOG (2) (3)			April 1, 2018				April 2, 2017
Energy			$	224.1			$	142.8
Aerospace & Defense			165.8				106.2
Industrial			170.6				32.9
Total backlog			$	560.5			$	281.9

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 unshipped customer orders for which revenue has not been recognized.
Note 3: April 2, 2017 segment amounts restated for Q1 2018 organizational realignment.

CIRCOR INTERNATIONAL, INC. SEGMENT INFORMATION (in thousands, except percentages) UNAUDITED
			2017																				2018
			1ST QTR				2ND QTR				3RD QTR				4TH QTR				TOTAL				1ST QTR
ORDERS
Energy			$	100,012			$	73,140			$	84,857			$	118,073			$	376,082			$	129,762
Aerospace & Defense			56,416				39,902				45,939				$	52,043			194,300				59,793
Industrial			27,654				29,889				27,296				46,407				131,246				136,607
Total			$	184,082			$	142,931			$	158,092			$	216,523			$	701,628			$	326,162
NET REVENUES
Energy			$	76,210			$	78,276			$	88,570			$	96,561			$	339,617			$	99,972
Aerospace & Defense			41,601				43,304				41,117				$	56,961			182,983				58,477
Industrial			27,397				29,651				30,006				52,056				139,110				117,131
Total			$	145,208			$	151,231			$	159,693			$	205,578			$	661,710			$	275,580
SEGMENT OPERATING INCOME
Energy			$	6,407			$	8,170			$	6,936			$	8,618			$	30,131			$	5,696
Aerospace & Defense			3,784				4,374				4,333				10,884				23,375				8,931
Industrial			4,384				4,901				5,675				4,972				19,932				12,948
Corporate expenses			(5,479		)		(5,396		)		(5,067		)		(5,802		)		(21,744		)		(7,802		)
Adjusted Operating Income			$	9,096			$	12,049			$	11,877			$	18,672			$	51,694			$	19,773
SEGMENT OPERATING MARGIN %
Energy			8.4		%		10.4		%		7.8		%		8.9		%		8.9		%		5.7		%
Aerospace & Defense			9.1		%		10.1		%		10.5		%		19.1		%		12.8		%		15.3		%
Industrial			16.0		%		16.5		%		18.9		%		9.6		%		14.3		%		11.1		%
Adjusted Operating Margin			6.3		%		8.0		%		7.4		%		9.1		%		7.8		%		7.2		%

CIRCOR INTERNATIONAL, INC. RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS (in thousands, except percentages) UNAUDITED
			2017																				2018
			1ST QTR				2ND QTR				3RD QTR				4TH QTR				TOTAL				1ST QTR
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES			$	16,195			$	2,667			$	(16,854	)		$	7,629			$	9,637			$	(147	)
LESS:
Capital expenditures, net of sale proceeds			2,811				2,375				2,318				6,103				13,607				8,141
FREE CASH FLOW			$	13,384			$	292			$	(19,172	)		$	1,526			$	(3,970	)		$	(8,288	)
TOTAL DEBT			$	243,000			$	252,856			$	269,026			$	795,208			$	795,208			$	823,665
LESS:
Cash & cash equivalents			65,656				77,272				75,627				110,356				110,356				123,305
NET DEBT			$	177,344			$	175,584			$	193,399			$	684,852			$	684,852			$	700,360
TOTAL SHAREHOLDERS' EQUITY			$	415,537			$	438,097			$	451,885			$	601,974			$	601,974			$	588,312
TOTAL DEBT AS % OF EQUITY			58		%		58		%		60		%		132		%		132		%		140		%
NET DEBT AS % OF EQUITY			43		%		40		%		43		%		114		%		114		%		119		%

CIRCOR INTERNATIONAL, INC. RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS (in thousands, except per share data) UNAUDITED
			2017																				2018
			1ST QTR				2ND QTR				3RD QTR				4TH QTR				TOTAL				1ST QTR
NET INCOME (LOSS)			$	4,773			$	8,970			$	3,617			$	(5,571	)		$	11,789			$	(17,441	)
LESS:
Restructuring related inventory charges			—				—				—				—				—				473
Amortization of inventory step-up			—				—				—				4,300				4,300				6,600
Restructuring charges, net			1,458				3,566				341				697				6,062				9,615
Acquisition amortization			2,552				2,599				2,694				4,697				12,542				11,797
Acquisition depreciation			—				—				—				233				233				1,837
Special charges (recoveries), net			(2,268		)		(5,520		)		1,978				13,799				7,989				2,831
Income tax impact			(1,137		)		(3,124		)		(1,497		)		(8,279		)		(14,037		)		(7,687		)
ADJUSTED NET INCOME			$	5,378			$	6,491			$	7,133			$	9,876			$	28,878			$	8,025
EARNINGS (LOSS) PER COMMON SHARE (Diluted)			$	0.29			$	0.54			$	0.22			$	(0.32	)		$	0.70			$	(0.88	)
LESS:
Restructuring related inventory charges			—				—				—				—				—				0.02
Amortization of inventory step-up			—				—				—				0.25				0.26				0.33
Restructuring charges, net			0.09				0.21				0.02				0.04				0.36				0.49
Acquisition amortization			0.15				0.16				0.16				0.27				0.74				0.60
Acquisition depreciation			—				—				—				0.01				0.01				0.09
Special charges (recoveries), net			(0.14		)		(0.33		)		0.12				0.80				0.47				0.14
Income tax impact			(0.07		)		(0.19		)		(0.09		)		(0.48		)		(0.83		)		(0.39		)
ADJUSTED EARNINGS PER SHARE (Diluted)			$	0.32			$	0.39			$	0.43			$	0.57			$	1.71			$	0.40

CIRCOR INTERNATIONAL, INC. RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS (in thousands) UNAUDITED
			2017																				2018
			1ST QTR				2ND QTR				3RD QTR				4TH QTR				TOTAL				1ST QTR
NET INCOME (LOSS)			$	4,773			$	8,970			$	3,617			$	(5,571	)		$	11,789			$	(17,441	)
LESS:
Interest expense, net			(1,669		)		(2,184		)		(2,445		)		(4,479		)		(10,777		)		(11,801		)
Depreciation			(3,798		)		(3,547		)		(3,544		)		(4,401		)		(15,290		)		(7,334		)
Amortization			(3,092		)		(3,124		)		(3,275		)		(5,256		)		(14,747		)		(12,329		)
(Provision for) benefit from income taxes			(687		)		724				21				5,618				5,676				5,879
EBITDA			$	14,019			$	17,101			$	12,860			$	2,947			$	46,927			$	8,144
LESS:
Restructuring related inventory charges			—				—				—				—				—				(473		)
Amortization of inventory step-up			—				—				—				(4,300		)		(4,300		)		(6,600		)
Restructuring charges, net			(1,458		)		(3,566		)		(341		)		(697		)		(6,062		)		(9,615		)
Special (charges) recoveries, net			2,268				5,520				(1,978		)		(13,799		)		(7,989		)		(2,831		)
ADJUSTED EBITDA			$	13,209			$	15,147			$	15,179			$	21,743			$	65,278			$	27,663

CIRCOR INTERNATIONAL, INC. RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS (in thousands, except percentages) UNAUDITED
			2017																				2018
			1ST QTR				2ND QTR				3RD QTR				4TH QTR				TOTAL				1ST QTR
GAAP OPERATING INCOME (LOSS)			$	7,354			$	11,404			$	6,864			$	(5,054	)		$	20,568			$	(13,380	)
LESS:
Restructuring related inventory charges			—				—				—				—				—				473
Amortization of inventory step-up			—				—				—				4,300				4,300				6,600
Restructuring charges, net			1,458				3,566				341				697				6,062				9,615
Acquisition amortization			2,552				2,599				2,694				4,697				12,542				11,797
Acquisition depreciation			—				—				—				233				233				1,837
Special charges (recoveries), net			(2,268		)		(5,520		)		1,978				13,799				7,989				2,831
ADJUSTED OPERATING INCOME			$	9,096			$	12,049			$	11,877			$	18,672			$	51,694			$	19,773
GAAP OPERATING MARGIN			5.1		%		7.5		%		4.3		%		(2.5		)%		3.1		%		(4.9		)%
LESS:
Restructuring related inventory charges			—		%		—		%		—		%		—		%		—		%		0.2		%
Amortization of inventory step-up			—		%		—		%		—		%		2.1		%		0.6		%		2.4		%
Restructuring charges, net			1.0		%		2.4		%		0.2		%		0.3		%		0.9		%		3.5		%
Acquisition amortization			1.8		%		1.7		%		1.7		%		2.3		%		1.9		%		4.3		%
Acquisition depreciation			—		%		—		%		—		%		0.1		%		—		%		0.7		%
Special charges (recoveries), net			(1.6		)%		(3.7		)%		1.2		%		6.7		%		1.2		%		1.0		%
ADJUSTED OPERATING MARGIN			6.3		%		8.0		%		7.4		%		9.1		%		7.8		%		7.2		%

The Company is providing certain combined information related to the recently acquired Fluid Handling business.

CIRCOR INTERNATIONAL, INC. SEGMENT INFORMATION - COMBINED (in thousands, except percentages) UNAUDITED
			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 CIRCOR information, adjusted to reflect the impact of our February 28, 2018 organizational realignment
- Items labeled "Fluid Handling" represent the information from the Fluid Handling businesses prior to their acquisition by CIRCOR on December 10, 2017
- Items labeled "Combined" represent the sum of the Recast and Fluid Handling information

CIRCOR INTERNATIONAL, INC. SEGMENT INFORMATION - COMBINED (in thousands, except percentages) UNAUDITED
			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 CIRCOR information, adjusted to reflect the impact of our February 28, 2018 organizational realignment
- Items labeled "Fluid Handling" represent the information from the Fluid Handling businesses prior to their acquisition by CIRCOR on December 10, 2017
- 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. RECONCILIATION OF FLUID HANDLING SEGMENT INFORMATION TO GAAP OPERATING INCOME (in thousands, except percentages) UNAUDITED
			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 December 10, 2017, the date of CIRCOR's acquisition.

View source version on businesswire.com: https://www.businesswire.com/news/home/20180501006875/en/

Source: CIRCOR International, Inc.

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