CIRCOR Reports Preliminary Fourth-Quarter and Year-End 2019 Financial Results
As disclosed in a Form 12b-25 that the Company filed with the
Highlights
-
Strong fourth quarter 2019 results from continuing operations
-
Revenue of
$243 million , down 9% reported, up 2% organically -
Preliminary GAAP earnings per share from continuing operations of
$0.16 -
Adjusted earnings per share of
$0.82 - Preliminary GAAP operating margin of 7.0%
- Adjusted operating margin of 13.3%
- A&D Segment operating margin of 22.9%, up 490 bps year-over-year
-
Revenue of
- Delivered 2019 Adjusted EBITDA target and on track for 2020 targets communicated in 18-month plan
-
Completed the sale of non-core Instrumentation & Sampling in
January 2020 for$172 million - Achieved pro-forma net leverage ratio of 3.6 times
-
Repriced debt in
February 2020 , reducing interest expense by 25 bps
“We ended the year with another solid quarter, delivering a record 13.3% adjusted operating margin from continuing operations, up 190 basis points from a year ago,” said
“We delivered on our 2019 goal to achieve substantial earnings growth while deleveraging the Company,”
“Looking ahead, we are on track to deliver our 2020 commitments. We continue to focus on driving long-term growth, expanding margins, generating strong free cash flow, and deleveraging as we drive value for our shareholders,” concluded
First-Quarter 2020 Guidance
For the first quarter of 2020,
Selected Preliminary Consolidated Results
($ millions except EPS) |
|
Q4 2019 |
Q4 2018 |
Change |
|
FY 2019 |
|
FY 2018 |
Change |
|||||||
Revenue |
$ |
242.6 |
$ |
266.7 |
-9% |
$ |
964.3 |
$ |
1,013.5 |
-5% |
||||||
Revenue excluding divested business |
$ |
242.6 |
$ |
240.1 |
1% |
$ |
947.8 |
$ |
915.8 |
3% |
||||||
GAAP Operating Income |
$ |
17.0 |
$ |
10.3 |
65% |
$ |
37.7 |
$ |
21.7 |
74% |
||||||
Adjusted Operating Income1 |
$ |
32.2 |
$ |
30.9 |
4% |
$ |
109.8 |
$ |
101.9 |
8% |
||||||
GAAP Operating Margin |
|
7.0% |
|
3.9% |
310 bps |
|
3.9% |
|
2.1% |
180 bps |
||||||
Adjusted Operating Margin1 |
|
13.3% |
|
11.6% |
170 bps |
|
11.4% |
|
10.1% |
130 bps |
||||||
Adjusted Operating Margin Ex Divestitures |
|
13.3% |
|
11.4% |
190 bps |
|
11.2% |
|
9.8% |
140 bps |
||||||
GAAP Earnings (Loss) Per Share |
$ |
0.08 |
$ |
(1.07) |
107% |
$ |
(6.73) |
$ |
(1.99) |
238% |
||||||
Adjusted Earnings Per Share (Diluted)1 |
$ |
0.82 |
$ |
0.76 |
8% |
$ |
2.62 |
$ |
2.30 |
14% |
||||||
Operating Cash Flow |
$ |
16.8 |
$ |
30.5 |
-45% |
$ |
15.9 |
$ |
54.0 |
-71% |
||||||
Free Cash Flow2 |
$ |
18.4 |
$ |
24.0 |
-23% |
$ |
11.7 |
$ |
30.6 |
-62% |
||||||
Orders |
$ |
236.5 |
$ |
270.9 |
-13% |
$ |
977.5 |
$ |
1099.2 |
-11% |
||||||
Orders excluding divested businesses |
$ |
236.5 |
$ |
244.1 |
-3% |
$ |
958.5 |
$ |
991.4 |
-3% |
||||||
Segment Results
($ millions) |
Q4 2019 |
Q4 2018 |
Change |
FY 2019 |
FY 2018 |
Change |
||||||||||
Industrial |
|
|
|
|
|
|
|
|
|
|
||||||
Revenue |
$ |
107.1 |
$ |
120.6 |
-11% |
$ |
450.7 |
$ |
487.6 |
-8% |
||||||
Revenue excluding divested businesses |
$ |
107.1 |
$ |
110.9 |
-3% |
$ |
437.3 |
$ |
455.6 |
-4% |
||||||
Segment Operating Income |
$ |
11.8 |
$ |
14.7 |
-20% |
$ |
52.7 |
$ |
57.3 |
-8% |
||||||
Segment Operating Margin |
|
11.0% |
|
12.2% |
-120 bps |
$ |
11.7% |
|
11.8% |
-10 bps |
||||||
Orders |
$ |
97.3 |
$ |
121.9 |
-20% |
$ |
447.4 |
$ |
510.1 |
-12% |
||||||
Orders excluding divested business1 |
$ |
97.3 |
$ |
110.5 |
-12% |
$ |
432.6 |
$ |
472.1 |
-8% |
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Energy |
|
|
|
|
|
|
|
|
|
|
||||||
Revenue |
$ |
56.5 |
$ |
82.8 |
-32% |
$ |
241.0 |
$ |
288.9 |
-17% |
||||||
Revenue excluding divested business1 |
$ |
56.5 |
$ |
65.9 |
-14% |
$ |
237.9 |
$ |
223.3 |
7% |
||||||
Segment Operating Income |
$ |
7.3 |
$ |
12.7 |
-43% |
$ |
30.9 |
$ |
38.8 |
-20% |
||||||
Segment Operating Margin |
|
12.9% |
|
15.4% |
-250 bps |
|
12.8% |
|
13.4% |
-60 bps |
||||||
Orders |
$ |
70.8 |
$ |
72.3 |
-2% |
$ |
216.1 |
$ |
311.6 |
-31% |
||||||
Orders excluding divested business1 |
$ |
70.8 |
$ |
56.9 |
24% |
$ |
212.0 |
$ |
241.8 |
-12% |
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Aerospace & Defense |
|
|
|
|
|
|
|
|
|
|
||||||
Revenue |
$ |
79.1 |
$ |
63.3 |
25% |
$ |
272.6 |
$ |
237.0 |
15% |
||||||
Segment Operating Income |
$ |
18.1 |
$ |
11.4 |
59% |
$ |
51.5 |
$ |
36.0 |
43% |
||||||
Segment Operating Margin |
|
22.9% |
|
18.0% |
490 bps |
|
18.9% |
|
15.2% |
370 bps |
||||||
Orders |
$ |
68.5 |
$ |
76.7 |
-11% |
$ |
313.9 |
$ |
277.5 |
13% |
1 |
Adjusted Consolidated and Segment results for Q4 2019 exclude non-cash acquisition-related intangible amortization, special and restructuring charges totaling |
|
2 |
Free Cash Flow is a non-GAAP financial measure and is calculated by subtracting GAAP capital expenditures, net of proceeds from asset sales, from GAAP Operating Cash Flow. |
Conference Call Information
Use of Non-GAAP Financial Measures
Adjusted operating income, Adjusted operating margin, Adjusted net income, Adjusted earnings per share (diluted), EBITDA, Adjusted EBITDA, net debt, free cash flow and organic growth, (and such measures and revenue further excluding divested businesses) are non-GAAP financial measures. These non-GAAP financial measures are used by management in our financial and operating decision making because we believe they reflect our ongoing business and facilitate period-to-period comparisons. We believe these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating the Company’s current operating performance and future prospects in the same manner as management does, if they so choose. These non-GAAP financial measures also allow investors and others to compare the Company’s current financial results with the Company’s past financial results in a consistent manner.
For example:
- We exclude costs and tax effects associated with restructuring activities, such as reducing overhead and consolidating facilities. We believe that the costs related to these restructuring activities are not indicative of our normal operating costs.
- We exclude certain acquisition-related costs, including significant transaction costs and amortization of inventory and fixed-asset step-ups and the related tax effects. We exclude these costs because we do not believe they are indicative of our normal operating costs.
- We exclude the expense and tax effects associated with the non-cash amortization of acquisition-related intangible assets because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have lives up to 25 years. Exclusion of the non-cash amortization expense allows comparisons of operating results that are consistent over time for both our newly acquired and long-held businesses and with both acquisitive and non-acquisitive peer companies.
- We also exclude certain gains/losses and related tax effects, which are either isolated or cannot be expected to occur again with any predictability, and that we believe are not indicative of our normal operating gains and losses. For example, we exclude gains/losses from items such as the sale of a business, significant litigation-related matters and lump-sum pension plan settlements.
- We exclude the results of discontinued operations.
-
Due to the significance of recently sold businesses and to provide a comparison of changes in our orders and revenue, we also discuss these changes on an “organic” basis. Organic is calculated assuming the divestitures completed prior to
September 29, 2019 were completed onJanuary 1, 2018 and excluding the impact of changes in foreign currency exchange rates.
CIRCOR’s management uses these non-GAAP measures, in addition to GAAP financial measures, as the basis for measuring the Company’s operating performance and comparing such performance to that of prior periods and to the performance of our competitors. We use such measures when publicly providing our business outlook, assessing future earnings potential, evaluating potential acquisitions and dispositions and in our financial and operating decision-making process, including for compensation purposes.
Investors should recognize that these non-GAAP measures might not be comparable to similarly titled measures of other companies. These measures should be considered in addition and not as a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with accounting principles generally accepted in
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 27 A of the Securities Act of 1933, as amended, and Section 21 E of the Securities Exchange Act of 1934, as amended. Reliance should not be placed on forward-looking statements because they involve unknown risks, uncertainties and other factors, which are, in some cases, beyond the control of
About
|
|||||||||||||||
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
Net revenues |
$ |
242,638 |
|
|
$ |
266,716 |
|
|
$ |
964,313 |
|
|
$ |
1,013,470 |
|
Cost of revenues |
164,634 |
|
|
176,704 |
|
|
655,504 |
|
|
688,267 |
|
||||
Gross Profit |
78,004 |
|
|
90,012 |
|
|
308,809 |
|
|
325,203 |
|
||||
Selling, general and administrative expenses |
58,029 |
|
|
72,732 |
|
|
248,256 |
|
|
284,641 |
|
||||
Special and restructuring charges, net |
2,979 |
|
|
6,985 |
|
|
22,872 |
|
|
18,909 |
|
||||
Operating income |
16,996 |
|
|
10,295 |
|
|
37,681 |
|
|
21,653 |
|
||||
Other expense (income): |
|
|
|
|
|
|
|
||||||||
Interest expense, net |
10,763 |
|
|
13,264 |
|
|
48,609 |
|
|
52,975 |
|
||||
Other (income) expense, net |
1,919 |
|
|
(347 |
) |
|
(836 |
) |
|
(7,426 |
) |
||||
Total other expense, net |
12,682 |
|
|
12,917 |
|
|
47,773 |
|
|
45,549 |
|
||||
Income (loss) from continuing operations before income taxes |
4,314 |
|
|
(2,622 |
) |
|
(10,092 |
) |
|
(23,896 |
) |
||||
Provision for income taxes |
1,163 |
|
|
13,885 |
|
|
14,676 |
|
|
9,451 |
|
||||
Income (loss) from continuing operations, net of tax |
3,151 |
|
|
(16,507 |
) |
|
(24,768 |
) |
|
(33,347 |
) |
||||
Loss from discontinued operations, net of tax |
(1,595 |
) |
|
(4,497 |
) |
|
(109,167 |
) |
|
(6,037 |
) |
||||
Net income (loss) |
$ |
1,556 |
|
|
$ |
(21,004 |
) |
|
$ |
(133,935 |
) |
|
$ |
(39,384 |
) |
|
|
|
|
|
|
|
|
||||||||
Basic income (loss) per common share: |
|
|
|
|
|
|
|
||||||||
Basic income (loss) from continuing operations |
$ |
0.16 |
|
|
$ |
(0.84 |
) |
|
$ |
(1.24 |
) |
|
$ |
(1.68 |
) |
Basic (loss) from discontinued operations |
$ |
(0.08 |
) |
|
$ |
(0.23 |
) |
|
$ |
(5.48 |
) |
|
$ |
(0.30 |
) |
Net income (loss) |
$ |
0.08 |
|
|
$ |
(1.07 |
) |
|
$ |
(6.73 |
) |
|
$ |
(1.99 |
) |
|
|
|
|
|
|
|
|
||||||||
Diluted (loss) income per common share: |
|
|
|
|
|
|
|
||||||||
Diluted income (loss) from continuing operations |
$ |
0.16 |
|
|
$ |
(0.84 |
) |
|
$ |
(1.24 |
) |
|
$ |
(1.68 |
) |
Diluted (loss) from discontinued operations |
$ |
(0.08 |
) |
|
$ |
(0.23 |
) |
|
$ |
(5.48 |
) |
|
$ |
(0.30 |
) |
Net income (loss) |
$ |
0.08 |
|
|
$ |
(1.07 |
) |
|
$ |
(6.73 |
) |
|
$ |
(1.99 |
) |
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
19,920 |
|
|
19,722 |
|
|
19,903 |
|
|
19,834 |
|
||||
Diluted |
20,148 |
|
|
19,972 |
|
|
19,903 |
|
|
19,834 |
|
|
|||||||
|
Twelve Months Ended |
||||||
OPERATING ACTIVITIES |
|
|
|
||||
Net loss |
$ |
(133,935 |
) |
|
$ |
(39,384 |
) |
Loss from discontinued operations |
(109,167 |
) |
|
(6,037 |
) |
||
Loss from continuing operations |
(24,768 |
) |
|
(33,347 |
) |
||
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
||||
Depreciation |
22,045 |
|
|
26,183 |
|
||
Amortization |
47,591 |
|
|
49,129 |
|
||
Provision for bad debt expense |
616 |
|
|
(261 |
) |
||
Loss on write down of inventory and amortization of fair value step-up |
366 |
|
|
7,675 |
|
||
Compensation expense of share-based plans |
5,418 |
|
|
4,965 |
|
||
Amortization of debt issuance costs |
4,622 |
|
|
3,937 |
|
||
Deferred income tax benefit |
(3,440 |
) |
|
(2,367 |
) |
||
(Gain) loss on disposal of property, plant and equipment |
(1,793 |
) |
|
1,380 |
|
||
Loss on sale of businesses |
3,615 |
|
|
1,882 |
|
||
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: |
|
|
|
||||
Trade accounts receivable |
25,822 |
|
|
(12,229 |
) |
||
Inventories |
(9,557 |
) |
|
6,620 |
|
||
Prepaid expenses and other assets |
(9,827 |
) |
|
(26,770 |
) |
||
Accounts payable, accrued expenses and other liabilities |
(28,780 |
) |
|
30,458 |
|
||
Net cash provided by continuing operations |
31,931 |
|
|
57,255 |
|
||
Net cash used in discontinued operations |
(16,018 |
) |
|
(3,261 |
) |
||
Net cash provided by operating activities |
15,913 |
|
|
53,994 |
|
||
INVESTING ACTIVITIES |
|
|
|
||||
Purchases of property, plant and equipment |
(13,855 |
) |
|
(20,114 |
) |
||
Proceeds from the sale of property, plant and equipment |
5,735 |
|
|
156 |
|
||
Proceeds from divestitures |
861 |
|
|
— |
|
||
Proceeds from the sale of business, net |
162,591 |
|
|
2,753 |
|
||
Business acquisitions, net of cash acquired |
— |
|
|
3,727 |
|
||
Net cash provided by (used in) continuing investing activities |
155,332 |
|
|
(13,478 |
) |
||
Net cash used in discontinued investing activities |
(2,296 |
) |
|
(3,399 |
) |
||
Net cash provided by (used in) investing activities |
153,036 |
|
|
(16,877 |
) |
||
FINANCING ACTIVITIES |
|
|
|
||||
Proceeds from long-term debt |
281,600 |
|
|
248,300 |
|
||
Payments of short-term and long-term debt |
(434,797 |
) |
|
(260,146 |
) |
||
Debt issuance costs |
— |
|
|
— |
|
||
Dividends paid |
— |
|
|
— |
|
||
Proceeds from the exercise of stock options |
253 |
|
|
690 |
|
||
Return of cash to seller |
— |
|
|
(62,917 |
) |
||
Net cash used in continuing financing activities |
(152,944 |
) |
|
(74,073 |
) |
||
Net cash used in financing activities |
(152,944 |
) |
|
(74,073 |
) |
||
Effect of exchange rate changes on cash and cash equivalents |
197 |
|
|
(5,812 |
) |
||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
16,202 |
|
|
(42,768 |
) |
||
Cash and cash equivalents at beginning of year |
69,525 |
|
|
112,293 |
|
||
CASH AND CASH EQUIVALENTS AT END OF YEAR |
$ |
85,727 |
|
|
$ |
69,525 |
|
|
|||||||
|
|
|
|
||||
ASSETS |
|
|
|
||||
CURRENT ASSETS: |
|
|
|
||||
Cash and cash equivalents |
$ |
84,531 |
|
|
$ |
68,517 |
|
Short-term investments |
— |
|
|
— |
|
||
Trade accounts receivable, less allowance for doubtful accounts |
125,422 |
|
|
167,181 |
|
||
Inventories |
137,309 |
|
|
143,682 |
|
||
Income taxes refundable |
— |
|
|
— |
|
||
Prepaid expenses and other current assets |
72,164 |
|
|
71,428 |
|
||
Assets held for sale |
161,193 |
|
|
197,238 |
|
||
Total Current Assets |
580,619 |
|
|
648,046 |
|
||
PROPERTY, PLANT AND EQUIPMENT, NET |
172,179 |
|
|
189,672 |
|
||
OTHER ASSETS: |
|
|
|
||||
|
271,893 |
|
|
450,605 |
|
||
Intangibles, net |
385,542 |
|
|
440,281 |
|
||
Deferred income taxes |
30,852 |
|
|
19,906 |
|
||
Assets held for sale |
— |
|
|
30,374 |
|
||
Other assets |
35,360 |
|
|
12,728 |
|
||
TOTAL ASSETS |
$ |
1,476,445 |
|
|
$ |
1,791,612 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
||||
CURRENT LIABILITIES: |
|
|
|
||||
Accounts payable |
$ |
79,399 |
|
|
$ |
94,715 |
|
Accrued expenses and other current liabilities |
99,669 |
|
|
92,496 |
|
||
Accrued compensation and benefits |
19,518 |
|
|
30,703 |
|
||
Liabilities held for sale |
43,289 |
|
|
58,298 |
|
||
Notes payable and current portion of long-term debt |
— |
|
|
7,850 |
|
||
Total Current Liabilities |
241,875 |
|
|
284,062 |
|
||
LONG-TERM DEBT |
636,297 |
|
|
778,187 |
|
||
DEFERRED INCOME TAXES |
21,425 |
|
|
33,607 |
|
||
PENSION LIABILITY, NET |
146,801 |
|
|
150,623 |
|
||
LIABILITIES HELD FOR SALE |
— |
|
|
861 |
|
||
OTHER NON-CURRENT LIABILITIES |
38,636 |
|
|
15,279 |
|
||
SHAREHOLDERS’ EQUITY: |
|
|
|
||||
Preferred stock, |
— |
|
|
— |
|
||
Common stock, |
213 |
|
|
212 |
|
||
Additional paid-in capital |
446,657 |
|
|
440,890 |
|
||
Retained earnings |
99,280 |
|
|
232,102 |
|
||
Common treasury stock, at cost (1,372,488 shares at |
(74,472 |
) |
|
(74,472 |
) |
||
Accumulated other comprehensive loss, net of tax |
(80,267 |
) |
|
(69,739 |
) |
||
Total Shareholders’ Equity |
391,411 |
|
|
528,993 |
|
||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ |
1,476,445 |
|
|
$ |
1,791,612 |
|
|
|||||||||||||||
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
ORDERS (1) (3) |
|
|
|
|
|
|
|
||||||||
Energy |
$ |
70.8 |
|
|
$ |
72.3 |
|
|
$ |
216.1 |
|
|
$ |
311.6 |
|
Aerospace & Defense |
68.5 |
|
|
76.7 |
|
|
313.9 |
|
|
277.5 |
|
||||
Industrial |
97.3 |
|
|
121.9 |
|
|
447.4 |
|
|
510.1 |
|
||||
Total orders |
$ |
236.5 |
|
|
$ |
270.9 |
|
|
$ |
977.5 |
|
|
$ |
1,099.2 |
|
|
|
|
|
|
|
|
|
||||||||
BACKLOG (2) (3) |
|
|
|
|
|
|
|
||||||||
Energy |
$ |
74.1 |
|
|
$ |
110.5 |
|
|
|
|
|
||||
Aerospace & Defense |
194.5 |
|
|
156.3 |
|
|
|
|
|
||||||
Industrial |
152.1 |
|
|
163.8 |
|
|
|
|
|
||||||
Total Backlog |
$ |
420.7 |
|
|
$ |
430.6 |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Numbers may not add due to rounding. |
|
|
|
|
|||||||||||
(1) Orders do not include the foreign exchange impact due to the re-measurement of customer backlog amounts denominated in foreign currencies. Orders for the three months and year ended |
|||||||||||||||
Note 2: Backlog include unshipped customer orders for which revenue has not been recognized. Backlog at Q4 2018 includes |
Segment Information (in thousands, except percentages) UNAUDITED |
||||||||||||||||||||||||||||||
|
2018 |
2019 |
||||||||||||||||||||||||||||
As Reported |
1ST QTR |
2ND QTR |
3RD QTR |
4TH QTR |
TOTAL |
1ST QTR |
2ND QTR |
3RD QTR |
4TH QTR |
TOTAL |
||||||||||||||||||||
ORDERS |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Energy |
$ |
85,335 |
|
$ |
66,825 |
|
$ |
87,146 |
|
$ |
72,319 |
|
$ |
311,626 |
|
$ |
48,088 |
|
$ |
43,982 |
|
$ |
53,276 |
|
$ |
70,768 |
|
$ |
216,114 |
|
Aerospace & Defense |
59,793 |
59,441 |
81,533 |
76,702 |
277,469 |
|
88,107 |
|
93,405 |
|
63,968 |
|
68.459 |
|
313,939 |
|
||||||||||||||
Industrial |
136,607 |
|
136,746 |
|
114,876 |
|
121,886 |
|
510,115 |
|
123,746 |
120,660 |
105,710 |
97,323 |
447,438 |
|
||||||||||||||
Total |
$ |
281,735 |
|
$ |
263,012 |
|
$ |
283,555 |
|
$ |
270,907 |
|
$ |
1,099,210 |
|
$ |
259,941 |
|
$ |
258,047 |
|
$ |
222,954 |
|
$ |
236,550 |
|
$ |
977,491 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
NET REVENUES |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Energy |
$ |
64,279 |
|
$ |
71,094 |
|
$ |
70,718 |
|
$ |
82,786 |
|
$ |
288,877 |
|
$ |
66,876 |
|
$ |
61,752 |
|
$ |
55,835 |
|
$ |
56,519 |
|
$ |
240,982 |
|
Aerospace & Defense |
58,477 |
|
57,500 |
|
57,757 |
|
63,283 |
|
237,017 |
|
61,240 |
|
64,694 |
|
67,621 |
|
79,070 |
|
272,625 |
|
||||||||||
Industrial |
117,131 |
|
131,064 |
|
118,734 |
|
120,647 |
|
487,576 |
|
110,738 |
119,322 |
113,596 |
107,050 |
450,706 |
|
||||||||||||||
Total |
$ |
239,888 |
|
$ |
259,658 |
|
$ |
247,209 |
|
$ |
266,716 |
|
$ |
1,013,470 |
|
$ |
238,854 |
|
$ |
245,768 |
|
$ |
237,052 |
|
$ |
242,639 |
|
$ |
964,313 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
SEGMENT OPERATING INCOME |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Energy |
|
$ |
10,691 |
|
$ |
9,726 |
|
$ |
12,735 |
|
$ |
38,779 |
|
|
|
|
|
|
|
|
|
|
||||||||
Aerospace & Defense |
8,931 |
|
6,992 |
|
8,709 |
|
11,415 |
|
36,047 |
|
9,374 |
|
10,443 |
|
13,564 |
|
18,099 |
|
51,480 |
|
||||||||||
Industrial |
12,946 |
|
15,037 |
|
14,609 |
|
14,748 |
|
57,340 |
|
10,787 |
|
16,138 |
|
13,953 |
|
11,810 |
|
52,688 |
|
||||||||||
Corporate Expenses |
(7,800 |
) |
(6,451 |
) |
(8,034 |
) |
(8,004 |
) |
(30,289 |
) |
(6,705 |
) |
(6,335 |
) |
(7,209 |
) |
(5,013 |
) |
(25,262 |
) |
||||||||||
Total |
$ |
19,704 |
|
$ |
26,269 |
|
$ |
25,010 |
|
$ |
30,894 |
|
$ |
101,877 |
|
$ |
23,434 |
|
$ |
28,589 |
|
$ |
25,594 |
|
$ |
32,183 |
|
$ |
109,800 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
SEGMENT OPERATING MARGIN % |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Energy |
8.8 |
% |
15.0 |
% |
13.8 |
% |
15.4 |
% |
13.4 |
% |
14.9 |
% |
13.5 |
% |
9.5 |
% |
12.9 |
% |
12.8 |
% |
||||||||||
Aerospace & Defense |
15.3 |
% |
12.2 |
% |
15.1 |
% |
18.0 |
% |
15.2 |
% |
15.3 |
% |
16.1 |
% |
20.1 |
% |
22.9 |
% |
18.9 |
% |
||||||||||
Industrial |
11.1 |
% |
11.5 |
% |
12.3 |
% |
12.2 |
% |
11.8 |
% |
9.7 |
% |
13.5 |
% |
12.3 |
% |
11.0 |
% |
11.7 |
% |
||||||||||
Total |
8.2 |
% |
10.1 |
% |
10.1 |
% |
11.6 |
% |
10.1 |
% |
9.8 |
% |
11.6 |
% |
10.8 |
% |
13.3 |
% |
11.4 |
% |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
SEGMENT OPERATING MARGIN % Excluding Divestitures (1) |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Energy |
11.3% |
16.0% |
12.6% |
16.9% |
14.4% |
15.6% |
13.5% |
9.5% |
12.9% |
13.0% |
||||||||||||||||||||
Aerospace & Defense |
15.3% |
12.2% |
15.1% |
18.0% |
15.2% |
15.3% |
16.1% |
20.1% |
22.9% |
18.9% |
||||||||||||||||||||
Industrial |
10.5% |
11.3% |
12.0% |
11.5% |
11.4% |
8.7% |
12.7% |
12.6% |
11.0% |
11.3% |
||||||||||||||||||||
Total |
8.4% |
9.9% |
9.4% |
11.4% |
9.8% |
9.5% |
11.2% |
10.9% |
13.3% |
11.2% |
||||||||||||||||||||
Numbers may not add due to rounding. |
||||||||||||||||||||||||||||||
(1) Divested businesses include Reliability Services (Energy), Spence / Nicholson (Industrial) and |
|
||||||||||
|
2018 |
2019 |
||||||||
Divested Businesses (1) |
1ST QTR |
2ND QTR |
3RD QTR |
4TH QTR |
TOTAL |
1ST QTR |
2ND QTR |
3RD QTR |
4TH QTR |
TOTAL |
ORDERS |
|
|
|
|
|
|
|
|
|
|
Energy |
|
|
|
|
|
|
$— |
$— |
$— |
|
Industrial |
9,708 |
9,836 |
7,078 |
11,351 |
37,973 |
4,778 |
5,275 |
4,798 |
— |
14,851 |
Total |
|
|
|
|
|
|
|
|
$— |
|
|
|
|
|
|
|
|
|
|
|
|
NET REVENUES |
|
|
|
|
|
|
|
|
|
|
Energy |
|
|
|
|
|
|
$— |
$— |
$— |
|
Industrial |
8,816 |
6,317 |
7,123 |
9,762 |
32,017 |
5,366 |
5,198 |
2,891 |
— |
13,456 |
Total |
|
|
|
|
|
|
|
|
$— |
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING INCOME |
|
|
|
|
|
|
|
|
|
|
Energy |
|
|
|
|
|
$— |
$— |
$— |
$— |
$— |
Industrial |
1,573 |
897 |
1,174 |
1,983 |
5,627 |
1,630 |
1,642 |
— |
— |
3,272 |
Total |
|
|
|
|
|
|
|
$— |
$— |
|
Numbers may not add due to rounding. |
||||||||||
(1) Divested businesses include Reliability Services (Energy), Spence/Nicholson (Industrial) and |
|
|||||||||||
|
2018 |
2019 |
|||||||||
|
1ST QTR |
2ND QTR |
3RD QTR |
4TH QTR |
TOTAL |
1ST QTR |
2ND QTR |
3RD QTR |
4TH QTR |
TOTAL |
|
|
|
|
|
|
|
|
|
|
|
|
|
LESS: |
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures, net of sale proceeds (a) |
8,141 |
3,563 |
5,119 |
6,534 |
23,357 |
3,689 |
2,995 |
(963) |
(1,535) |
4,186 |
|
FREE CASH FLOW |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Debt |
|
|
|
|
|
|
|
|
|
|
|
Less: Cash & Cash Equivalents |
123,305 |
69,030 |
71,334 |
68,517 |
68,517 |
73,619 |
76,082 |
69,225 |
84,531 |
84,531 |
|
GROSS DEBT, NET OF CASH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS DEBT AS % OF EQUITY |
139% |
144% |
145% |
153% |
153% |
146% |
151% |
176% |
167% |
167% |
|
GROSS DEBT, NET OF CASH AS % OF EQUITY |
118% |
132% |
132% |
140% |
140% |
132% |
136% |
157% |
145% |
145% |
|
Numbers may not add due to rounding. |
|||||||||||
(a) Includes capital expenditures, net of sales proceeds of discontinued operations. |
|
||||||||||
|
2018 |
2019 |
||||||||
|
1ST QTR |
2ND QTR |
3RD QTR |
4TH QTR |
TOTAL |
1ST QTR |
2ND QTR |
3RD QTR |
4TH QTR |
TOTAL |
NET (LOSS) INCOME |
|
|
|
|
|
|
|
|
|
|
LESS: |
|
|
|
|
|
|
|
|
|
|
Restructuring related inventory charges |
473 |
16 |
— |
(137) |
352 |
325 |
— |
(1,145) |
— |
(820) |
Amortization of inventory step-up |
6,600 |
— |
— |
— |
6,600 |
— |
— |
— |
— |
— |
Restructuring charges, net |
3,424 |
524 |
1,075 |
825 |
5,848 |
358 |
299 |
5,038 |
(509) |
5,186 |
Acquisition amortization |
11,797 |
11,767 |
11,735 |
12,012 |
47,311 |
12,078 |
11,247 |
11,202 |
11,188 |
45,715 |
Acquisition depreciation |
1,837 |
1,735 |
1,742 |
1,735 |
7,049 |
1,124 |
1,106 |
1,101 |
1,021 |
4,352 |
Special charges (recoveries), net |
3,360 |
1,629 |
1,913 |
6,160 |
13,061 |
(8,200) |
3,916 |
18,481 |
3,489 |
17,686 |
Income tax impact |
(5,798) |
(4,213) |
(1,857) |
10,998 |
(870) |
3,625 |
(2,266) |
5,533 |
(1,752) |
5,140 |
Net income (loss) from discontinued operations |
3,468 |
(4,802) |
2,874 |
4,498 |
6,038 |
5,728 |
17,156 |
84,688 |
1,595 |
109,167 |
ADJUSTED NET INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(LOSS) EARNINGS PER COMMON SHARE (Diluted) |
|
|
|
|
|
|
|
|
|
|
LESS: |
|
|
|
|
|
|
|
|
|
|
Restructuring related inventory charges |
0.02 |
— |
— |
(0.01) |
0.02 |
0.02 |
— |
(0.06) |
— |
(0.04) |
Amortization of inventory step-up |
0.33 |
— |
— |
— |
0.33 |
— |
— |
— |
— |
— |
Restructuring charges, net |
0.17 |
0.03 |
0.05 |
0.04 |
0.29 |
0.02 |
0.02 |
0.25 |
(0.03) |
0.26 |
Acquisition amortization |
0.60 |
0.59 |
0.59 |
0.61 |
2.39 |
0.61 |
0.57 |
0.56 |
0.56 |
2.30 |
Acquisition depreciation |
0.09 |
0.09 |
0.09 |
0.09 |
0.36 |
0.06 |
0.06 |
0.06 |
0.05 |
0.22 |
Special charges (recoveries), net |
0.17 |
0.08 |
0.10 |
0.31 |
0.66 |
(0.41) |
0.20 |
0.93 |
0.18 |
0.89 |
Income tax impact |
(0.29) |
(0.21) |
(0.10) |
0.55 |
(0.06) |
0.18 |
(0.12) |
0.28 |
(0.10) |
0.24 |
Earnings (Loss) Per Share from discontinued operations |
0.18 |
(0.24) |
0.14 |
0.23 |
0.30 |
0.29 |
0.86 |
4.25 |
0.08 |
5.48 |
ADJUSTED EARNINGS PER SHARE (Diluted) |
|
|
|
|
|
|
|
|
|
|
Numbers may not add due to rounding. |
|
||||||||||||||
|
2018 |
2019 |
||||||||||||
|
1ST QTR |
2ND QTR |
3RD QTR |
4TH QTR |
TOTAL |
1ST QTR |
2ND QTR |
3RD QTR |
4TH QTR |
TOTAL |
||||
NET (LOSS) INCOME |
|
|
|
|
|
|
|
|
|
|
|
|||
LESS: |
|
|
|
|
|
|
|
|
|
|
|
|||
Interest expense, net |
11,810 |
13,764 |
14,137 |
13,264 |
52,975 |
|
13,094 |
12,947 |
11,804 |
10,764 |
48,609 |
|||
Depreciation |
4,834 |
4,791 |
9,983 |
6,576 |
26,183 |
|
5,499 |
5,568 |
5,551 |
5,427 |
22,045 |
|||
Amortization |
14,134 |
13,985 |
8,632 |
12,477 |
49,228 |
|
12,536 |
11,685 |
11,629 |
11,741 |
47,591 |
|||
Benefit from (provision for) income taxes |
(3,782) |
(608) |
(45) |
13,885 |
9,451 |
|
5,709 |
284 |
7,490 |
1,193 |
14,676 |
|||
Loss from discontinued operations |
3,468 |
(4,802) |
2,874 |
4,498 |
6,038 |
|
5,728 |
17,156 |
84,688 |
1,595 |
109,167 |
|||
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|||
LESS: |
|
|
|
|
|
|
|
|
|
|
|
|||
Restructuring related inventory charges |
473 |
16 |
— |
(137) |
352 |
|
325 |
— |
(1,145) |
— |
(820) |
|||
Amortization of inventory step-up |
6,600 |
— |
— |
— |
6,600 |
|
— |
— |
— |
— |
— |
|||
Restructuring charges, net |
3,424 |
524 |
1,075 |
825 |
5,848 |
|
358 |
299 |
5,038 |
(509) |
5,186 |
|||
Special recoveries (charges), net |
3,360 |
1,629 |
1,913 |
6,160 |
13,061 |
|
(8,200) |
3,916 |
18,481 |
3,489 |
17,686 |
|||
ADJUSTED EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|||
Numbers may not add due to rounding. |
||||||||||||||
|
Leverage Calculations: |
|
|
|
|
|
||||||||
|
Full Year 2019, as reported |
|
Full Year 2019, Pro Forma for I&S Divestiture (b) |
|||||||||||
|
GROSS DEBT, NET OF CASH (Net Debt) |
$ |
569,319 |
|
|
Net Debt |
$ |
569,319 |
|
|||||
|
Net Debt / 2019 Adjusted EBITDA |
4.4 x |
|
Net proceeds from I&S sale |
(160,000 |
) |
||||||||
|
|
|
|
|
|
|
Pro Forma Net Debt |
$ |
409,319 |
|
||||
|
2019 Investor Plan Comparison |
|
|
|
|
|
||||||||
|
2019 Adjusted EBITDA - Reported |
$ |
130,203 |
|
|
2019 EBITDA as reported |
$ |
130,203 |
|
|||||
|
Engineered Valves & Distributed Valves First Half (a) |
(6,619 |
) |
|
2019 I&S EBITDA |
(16,811 |
) |
|||||||
|
2019 Adjusted EBITDA - Investor Plan |
$ |
123,584 |
|
|
Pro Forma Adjusted EBITDA |
$ |
113,392 |
|
|||||
Net Debt / Adjusted EBITDA - Investor Plan |
4.6 x |
Pro Forma Net Debt / Pro Forma Adjusted EBITDA |
3.6 x |
|
||||||||||
(a) The Company's |
||||||||||||||
(b) The Company sold its Instrumentation & Sampling business in |
|
||||||||||||||||||||||||||||||
|
2018 |
2019 |
||||||||||||||||||||||||||||
|
1ST QTR |
2ND QTR |
3RD QTR |
4TH QTR |
TOTAL |
1ST QTR |
2ND QTR |
3RD QTR |
4TH QTR |
TOTAL |
||||||||||||||||||||
GAAP OPERATING (LOSS) INCOME |
$ |
(7,787 |
) |
$ |
10,599 |
|
$ |
8,545 |
|
$ |
10,295 |
|
$ |
21,653 |
|
$ |
17,749 |
|
$ |
12,020 |
|
$ |
(9,084 |
) |
$ |
16,996 |
|
$ |
37,681 |
|
LESS: |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Restructuring related inventory charges |
473 |
|
16 |
|
— |
|
(137 |
) |
352 |
|
325 |
|
— |
|
(1,145 |
) |
— |
|
(820 |
) |
||||||||||
Amortization of inventory step-up |
6,600 |
|
— |
|
— |
|
— |
|
6,600 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
||||||||||
Restructuring charges, net |
3,424 |
|
524 |
|
1,075 |
|
825 |
|
5,848 |
|
358 |
|
299 |
|
5,038 |
|
(509 |
) |
5,186 |
|
||||||||||
Acquisition amortization |
11,797 |
|
11,767 |
|
11,735 |
|
12,012 |
|
47,311 |
|
12,078 |
|
11,247 |
|
11,202 |
|
11,188 |
|
45,715 |
|
||||||||||
Acquisition depreciation |
1,837 |
|
1,735 |
|
1,742 |
|
1,735 |
|
7,049 |
|
1,123 |
|
1,106 |
|
1,101 |
|
1,021 |
|
4,351 |
|
||||||||||
Special charges (recoveries), net |
3,360 |
|
1,629 |
|
1,913 |
|
6,160 |
|
13,061 |
|
(8,200 |
) |
3,916 |
|
18,481 |
|
3,489 |
|
17,686 |
|
||||||||||
ADJUSTED OPERATING INCOME |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
GAAP OPERATING MARGIN |
(3.2 |
)% |
4.1 |
% |
3.5 |
% |
3.9 |
% |
2.1 |
% |
7.4 |
% |
4.9 |
% |
(3.8 |
)% |
7.0 |
% |
3.9 |
% |
||||||||||
LESS: |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
||||||||||
Restructuring related inventory charges |
0.2 |
% |
— |
% |
— |
% |
(0.1 |
)% |
— |
% |
0.1 |
% |
— |
% |
(0.5 |
)% |
— |
% |
(0.1 |
)% |
||||||||||
Amortization of inventory step-up |
2.8 |
% |
— |
% |
— |
% |
— |
% |
0.7 |
% |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
||||||||||
Restructuring charges, net |
1.4 |
% |
0.2 |
% |
0.4 |
% |
0.3 |
% |
0.6 |
% |
0.2 |
% |
0.1 |
% |
2.1 |
% |
(0.2 |
)% |
0.5 |
% |
||||||||||
Acquisition amortization |
4.9 |
% |
4.5 |
% |
4.7 |
% |
4.5 |
% |
4.7 |
% |
5.1 |
% |
4.6 |
% |
4.7 |
% |
4.6 |
% |
4.7 |
% |
||||||||||
Acquisition depreciation |
0.8 |
% |
0.7 |
% |
0.7 |
% |
0.7 |
% |
0.7 |
% |
0.5 |
% |
0.5 |
% |
0.5 |
% |
0.4 |
% |
0.5 |
% |
||||||||||
Special charges (recoveries), net |
1.4 |
% |
0.6 |
% |
0.8 |
% |
2.3 |
% |
1.3 |
% |
(3.4 |
)% |
1.6 |
% |
7.8 |
% |
1.4 |
% |
1.8 |
% |
||||||||||
Income tax impact |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
||||||||||
Net income loss from discontinued operations |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
||||||||||
ADJUSTED OPERATING MARGIN |
8.2 |
% |
10.1 |
% |
10.1 |
% |
11.6 |
% |
10.1 |
% |
9.8 |
% |
11.6 |
% |
10.8 |
% |
13.3 |
% |
11.4 |
% |
||||||||||
Impact of Divestitures (1) |
0.2 |
% |
(0.2) |
% |
(0.7) |
% |
(0.2 |
)% |
(0.3 |
)% |
(0.3 |
)% |
(0.4 |
)% |
0.1 |
% |
— |
% |
(0.1 |
)% |
||||||||||
ADJUSTED OPERATING MARGIN EXCLUDING DIVESTITURES (1) |
8.4 |
% |
9.9 |
% |
9.4 |
% |
11.4 |
% |
9.8 |
% |
9.5 |
% |
11.2 |
% |
10.9 |
% |
13.3 |
% |
11.2 |
% |
||||||||||
Numbers may not add due to rounding. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20200302005466/en/
Senior Vice President Finance
(781) 270-1200
Source: