Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries CIRCOR Reports Financial Results for Third Quarter Ended October 2, 2022 By: CIRCOR International, Inc. via Business Wire November 14, 2022 at 07:25 AM EST GAAP EPS of $1.54, Up 1285% YoY; Adjusted EPS of $0.69, Up 103% YoY GAAP Operating Income of $42.6 Million, Up 1133% YoY; Adjusted Operating Income of $27.3 Million, Up 70% YoY Orders up 18% Reported and 26% Organically Progressing with Review of Strategic Alternatives CIRCOR International, Inc. (NYSE: CIR) (“CIRCOR” or “the Company”), one of the world’s leading providers of mission critical flow control products and services for the Industrial and Aerospace & Defense markets, today announced financial results for the third quarter ended October 2, 2022. Q3 2022 Overview: Revenue of $195 million up 3% reported and 10% organically compared to Q3'2021 Aerospace & Defense revenue of $72 million, up 14% reported and 18% organically Industrial revenue of $123 million, down (2%) reported and up 6% organically Orders of $228 million, up 18% and 26% organically Aerospace & Defense orders of $90 million, up 67% and 74% organically Industrial orders of $138 million, down (1%) and up 8% organically Backlog of $497 million, up 14% driven by strong demand in both Aerospace & Defense and Industrial segments GAAP operating income of $42.6 million, up 1133% GAAP operating margin of 21.8%, up 2000 bps Adjusted operating income $27.3 million, up 70% Adjusted operating margin of 14%, up 550 bps CIRCOR President and CEO Tony Najjar said, “Our team performed extremely well in the third quarter exceeding expectations. We delivered a great quarter with strong organic orders, revenue growth and expanded operating margin. Organic orders grew 26%, driven by exceptional performance in A&D, which delivered 74% growth in organic orders. I am particularly pleased with our win rate on key missile programs, our orders growth in medical products, and our sustained momentum in commercial aerospace as that market continues its recovery. In our Industrial segment, we are leveraging our aftermarket position to deliver strong pricing, enabling us to overcome the impact of inflation and generate solid margin expansion.” Mr. Najjar continued, “Both Industrial and A&D benefited from disciplined execution of our strategic priorities to drive revenues and operating income growth. Our results underscore our emphasis on value pricing, our strong aftermarket position, and operational simplification/cost out actions. We grew adjusted operating income by 70% and drove 550 bps improvement in adjusted operating margin despite inflation pressure, ongoing supply chain and logistics challenges, and rising energy costs. With the actions taken, and continued operating discipline and focus on our customers, we have positioned both segments to deliver sustained growth and shareholder value.” Conference Call Information CIRCOR International will hold a conference call to review its third-quarter 2022 financial results at 9:00 a.m. ET today, November 14, 2022. 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. https://investors.circor.com/. The live call also can be accessed by dialing (877) 407-5790 or (201) 689-8328. Participants are encouraged to dial in to the call at least 15 minutes prior to the start time. The webcast will be archived on the Company’s website for one year. Selected Consolidated Results (unaudited) ($ millions except EPS) Q3 2022 Q3 2021 Change Nine Months Ended October 2, 2022 Nine Months ended October 3, 2021 Change Revenue1 $ 195.4 $ 189.7 3 % $ 572.4 $ 553.8 3 % GAAP operating (loss) income 42.6 3.5 1133 % 42.6 (10.4 ) 510 % Adjusted operating income2 27.3 16.0 70 % 54.3 33.8 61 % GAAP operating margin 21.8 % 1.8 % 2000 bps 7.5 % (1.9 )% 940 bps Adjusted operating margin3 14.0 % 8.5 % 550 bps 9.5 % 6.1 % 340 bps GAAP (loss) per share $ 1.54 $ (0.13 ) 1285 % $ 0.68 $ (1.65 ) 141 % Adjusted earnings per share (diluted)4 $ 0.69 $ 0.34 103 % $ 1.06 $ 0.56 89 % Operating cash flow (9.8 ) 10.2 -196 % (29.3 ) (0.1 ) -29200 % Adjusted free cash flow5 (14.0 ) 5.7 -347 % (42.5 ) (10.7 ) -297 % Orders6 $ 228.3 $ 193.7 18 % $ 657.3 $ 630.6 4 % Segment Results (unaudited) ($ in millions) Q3 2022 Q3 2021 Change Nine Months Ended October 2, 2022 Nine Months ended October 3, 2021 Change Aerospace & Defense Revenue $ 72.2 $ 63.5 14 % $ 202.9 $ 182.6 11 % Segment operating income 16.9 15.9 6 % 41.8 37.7 11 % Segment operating margin 23.4 % 25.1 % -170 bps 20.6 % 20.6 % 0 bps Orders6 $ 90.5 $ 54.0 67 % $ 237.4 $ 181.3 31 % Industrial Revenue1 $ 123.1 $ 126.2 -2 % $ 369.5 $ 371.2 — % Segment operating income2 15.7 7.1 121 % 31.1 20.2 54 % Segment operating margin3 12.8 % 5.6 % 720 bps 8.4 % 5.4 % 300 bps Orders6 $ 137.8 $ 139.7 -1 % $ 420.9 $ 449.3 -6 % Consolidated and Industrial segment revenues for Q3 2022 and Q3 2021 included $0.0 million and $3.2 million, respectively, relating to our Pipeline Engineering business. Adjusted operating income is a non-GAAP financial measure. Refer to “Use of Non-GAAP Financial Measures” for an explanation of our non-GAAP financial measures and to the reconciliations included in this press release. Adjusted operating income and Industrial segment operating income for Q3 2022 and Q3 2021 included $(0.1) million and $(2.5) million, respectively, relating to our Pipeline Engineering business. Adjusted operating margin is a non-GAAP financial measure. Adjusted operating margin for Q3 2022 and Q3 2021 included (1875)% and (76)%, respectively, relating to our Pipeline Engineering business. Adjusted earnings per share (diluted) is a non-GAAP financial measure. Adjusted earnings per share and our segment results for Q3 2022 exclude net gain from non-cash acquisition-related intangible amortization and special and restructuring charges of $15.2 million, consisting of (i) $10.4 million for non-cash acquisition-related intangible amortization and depreciation expense; (ii) $0.1 million of costs due to the investigation into the accounting irregularities of the Pipeline Engineering business and incremental professional services incurred due to the restatement; (iii) $0.2 million of special charges related to the evaluation of strategic alternatives for the company; (iv) other special and restructuring charges net of $0.1 million; and (v) a gain of $26.0 million on the sale of real estate located at Corona, California. Adjusted consolidated and segment results for Q3 2021 exclude net income from discontinued operations of $2.5 million and net loss from non-cash acquisition-related intangible amortization, special and restructuring charges totaling $12.6 million. These charges include: (i) $11.8 million for non-cash acquisition-related intangible amortization and depreciation expense; and (ii) $0.8 million of other special and restructuring recoveries. Adjusted free cash flow, a non-GAAP financial measure, is calculated by subtracting GAAP capital expenditures, net of proceeds from asset sales, from GAAP operating cash flow. Orders, an operating measure, is defined as a legally binding agreement from an authorized individual at a customer requesting CIRCOR to provide goods and/or services at a fixed or determinable price and CIRCOR is capable of providing such goods and services, when the terms and conditions are firm enough to assure subsequent payment by the customer. Consolidated and Industrial segment orders for Q3 2022 and Q3 2021 included $0.0 million and $6.6 million, respectively, relating to our Pipeline Engineering business. As previously disclosed in our Form 10-K for the year ended December 31, 2021, the Company discovered accounting irregularities in its Pipeline Engineering business unit resulting in a restatement of previously issued financial statements. Company Files Quarterly Report on Form 10-Q for the Period Ended October 2, 2022 The Company today filed its Quarterly Report on Form 10-Q for the third quarter of 2022. Use of Non-GAAP Financial Measures In this press release, the Company uses the non-GAAP financial measures adjusted net income, adjusted EBITDA, adjusted operating income, adjusted operating margin, adjusted earnings per share and adjusted free cash flow. 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 that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating CIRCOR’s current operating performance and future prospects in the same manner as management does if they so choose. These non-GAAP financial measures can also assist investors and others in comparing CIRCOR’s current financial results with CIRCOR’s past financial results in a consistent manner. We exclude costs and tax effects associated with special and restructuring activities, such as reducing overhead and consolidating facilities. We believe that the costs related to special and 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 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. We exclude goodwill impairment charges. We exclude these costs because we do not believe they are indicative of our normal operating costs. Due to the significance of recently sold or exited businesses and to provide a comparison of changes in our revenue and orders (an operating measure), we also discuss these changes on an “organic” basis. Organic is calculated assuming the divestitures and/or exited businesses completed prior to July 3, 2022 were completed on January 1, 2021 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 peers. 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. About CIRCOR International, Inc. CIRCOR International is one of the world’s leading providers of mission critical flow control products and services for the Industrial and Aerospace & Defense markets. The Company has a product portfolio of market-leading brands serving its customers’ most demanding applications. CIRCOR markets its solutions directly and through various sales partners to more than 14,000 customers in approximately 100 countries. The Company has a global presence with approximately 3,100 employees and is headquartered in Burlington, Massachusetts. For more information, visit the Company’s investor relations website at http://investors.circor.com. Cautionary Note Regarding Forward-Looking Statements This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Actual results may differ materially from the expectations the Company describes in its forward-looking statements. Substantial 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. Important factors that could cause actual results to differ materially from expectations include, but are not limited to the inability to achieve expected results in pricing and cost out actions and the related impact on margins and cash flow; the effectiveness of the Company’s internal control over financial reporting and disclosure controls and procedures; the remediation of the material weaknesses in the Company’s internal controls over financial reporting or other potential weaknesses of which the Company is not currently aware or which have not been detected; the timing of the Company regaining compliance with the NYSE’s continued listing standards; the timing and outcome, if any, of the Company’s strategic alternatives review; the uncertainty associated with the current worldwide economic conditions and the continuing impact on economic and financial conditions in the United States and around the world, including as a result of COVID-19 , rising inflation, increasing interest rates, natural disasters, military conflicts, including the conflict between Russia and Ukraine, terrorist attacks and other similar matters; and the risks detailed from time to time in the Company’s periodic reports filed with the SEC. Before making any investment decisions regarding CIRCOR, the Company strongly advises you to read the section entitled “Risk Factors” in its 2021 Annual Report on Form 10-K, which can be accessed under the “Investors” link of the Company’s website at www.circor.com. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. CIRCOR INTERNATIONAL, INC CONSOLIDATED STATEMENT OF OPERATIONS (in thousands, except per share data) (unaudited) Three Months Ended Nine Months Ended October 2, 2022 As Restated October 3, 2021 October 2, 2022 As Restated October 3, 2021 Net revenues $ 195,362 $ 189,709 $ 572,392 $ 553,750 Cost of revenues 128,116 131,898 391,660 387,943 Gross profit 67,246 57,811 180,732 165,807 Selling, general and administrative expenses 50,392 53,546 160,517 169,371 Special and restructuring (recoveries) charges, net (25,702 ) 814 (22,430 ) 6,808 Operating income (loss) 42,556 3,451 42,645 (10,372 ) Other expense (income): Interest expense, net 11,821 7,997 31,481 24,325 Other (income), net (2,396 ) (256 ) (5,321 ) (3,301 ) Total other expense, net 9,425 7,741 26,160 21,024 Income (loss) from continuing operations before income taxes 33,131 (4,290 ) 16,485 (31,396 ) Provision for income taxes 1,661 850 2,536 3,206 Income (loss) from continuing operations, net of tax 31,470 (5,140 ) 13,949 (34,602 ) Income from discontinued operations, net of tax — 2,510 — 1,393 Net income (loss) $ 31,470 $ (2,630 ) $ 13,949 $ (33,209 ) Basic income (loss) per common share: Basic from continuing operations $ 1.55 $ (0.25 ) $ 0.69 $ (1.72 ) Basic from discontinued operations $ — $ 0.12 $ — $ 0.07 Net income (loss) $ 1.55 $ (0.13 ) $ 0.69 $ (1.65 ) Diluted income (loss) per common share: Diluted from continuing operations $ 1.54 $ (0.25 ) $ 0.68 $ (1.72 ) Diluted from discontinued operations $ — $ 0.12 $ — $ 0.07 Net income (loss) $ 1.54 $ (0.13 ) $ 0.68 $ (1.65 ) Weighted average number of common shares outstanding: Basic 20,364 20,257 20,345 20,181 Diluted 20,410 20,257 20,410 20,181 CIRCOR INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Nine Months Ended OPERATING ACTIVITIES October 2, 2022 As Restated October 3, 2021 Net income (loss) $ 13,949 $ (33,209 ) Income from discontinued operations, net of income taxes — 1,393 Income (loss) from continuing operations, net of tax 13,949 (34,602 ) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation 15,012 17,505 Amortization 27,704 31,929 Change in provision for bad debt expense (263 ) (383 ) Write down of inventory 1,797 1,742 Compensation expense for share-based plans 980 4,165 Loss on debt extinguishment 4,977 — Amortization of debt issuance costs 2,672 3,032 Deferred tax provision 45 823 Loss on sale of businesses — 1,308 Gain on sale of real estate (47,977 ) — Other impairment charges 8,011 — Loss on deconsolidation charges 4,675 — Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: Trade accounts receivable (1,116 ) 8,686 Inventories (28,364 ) (11,621 ) Prepaid expenses and other assets (25,387 ) (26,686 ) Accounts payable, accrued expenses and other liabilities (6,047 ) 6,439 Net cash (used in) provided by continuing operating activities (29,332 ) 2,337 Net cash used in discontinued operating activities — (2,484 ) Net cash used in operating activities (29,332 ) (147 ) INVESTING ACTIVITIES Additions to property, plant and equipment (13,291 ) (10,579 ) Proceeds from the sale of property, plant and equipment 82 2 Proceeds from the sale of real estate 54,945 — Proceeds from beneficial interest of factored receivables 3,461 1,531 Proceeds from the sale of business — 9,993 Net cash provided by investing activities 45,197 947 FINANCING ACTIVITIES Proceeds from long-term debt 180,441 145,550 Payments of long-term debt (182,166 ) (148,450 ) Net change in short-term borrowings (1,573 ) (225 ) Proceeds from the exercise of stock options — 151 Withholding tax payments on net share settlements on equity awards (1,299 ) (4,154 ) Payment of debt issuance costs (16,701 ) — Net cash used in financing activities (21,298 ) (7,128 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash (7,096 ) (2,834 ) DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH (12,529 ) (9,162 ) Cash, cash equivalents, and restricted cash at beginning of period 61,374 68,607 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD $ 48,845 $ 59,445 CIRCOR INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) (unaudited) October 2, 2022 December 31, 2021 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 47,131 $ 59,924 Trade accounts receivable, net 95,407 100,149 Inventories 137,411 123,343 Prepaid expenses and other current assets 125,409 110,749 Total Current Assets 405,358 394,165 PROPERTY, PLANT AND EQUIPMENT, NET 130,442 154,461 OTHER ASSETS: Goodwill 117,542 122,906 Intangibles, net 257,839 303,476 Lease right-of-use assets, net 40,836 21,139 Deferred income taxes 637 756 Other assets 27,323 22,395 TOTAL ASSETS $ 979,977 $ 1,019,298 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 71,601 $ 83,382 Accrued expenses and other current liabilities 73,505 81,998 Accrued compensation and benefits 31,817 26,551 Short-term borrowings and current portion of long-term debt — 1,611 Total Current Liabilities 176,923 193,542 LONG-TERM DEBT 501,754 511,694 DEFERRED INCOME TAXES 18,101 21,721 PENSION LIABILITY, NET 104,438 120,881 LONG-TERM LEASE LIABILITIES 37,155 17,715 OTHER NON-CURRENT LIABILITIES 19,524 20,029 COMMITMENTS AND CONTINGENCIES (NOTE 9 AND 10) SHAREHOLDERS’ EQUITY: Preferred stock, $0.01 par value; 1,000,000 shares authorized; no shares issued and outstanding at October 2, 2022 and December 31, 2021 — — Common stock, $0.01 par value; 29,000,000 shares authorized; 21,735,838 and 21,633,131 issued at October 2, 2022 and December 31, 2021 respectively 218 217 Additional paid-in capital 455,208 454,852 Accumulated deficit (184,132 ) (198,081 ) Common treasury stock, at cost (1,372,488 shares at October 2, 2022 and December 31, 2021) (74,472 ) (74,472 ) Accumulated other comprehensive loss, net of tax (74,740 ) (48,800 ) Total Shareholders’ Equity 122,082 133,716 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 979,977 $ 1,019,298 CIRCOR INTERNATIONAL, INC. SUMMARY OF ORDERS AND BACKLOG (in millions) (unaudited) Three Months Ended Nine Months Ended October 2, 2022 October 3, 2021 October 2, 2022 October 3, 2021 ORDERS (1) Aerospace & Defense $ 90.5 $ 54.0 $ 237.40 $ 181.3 Industrial 137.8 139.7 420.9 449.3 Total orders $ 228.3 $ 193.7 $ 658.3 $ 630.6 October 2, 2022 October 3, 2021 BACKLOG (2) Aerospace & Defense $ 214.0 $ 180.9 Industrial 282.9 254.9 Total backlog $ 496.9 $ 435.8 1. Orders do not include the foreign exchange impact due to the re-measurement of customer backlog amounts denominated in foreign currencies. Industrial includes $0.0 million and $6.6 million of orders for Pipeline Engineering for the three months ended October 2, 2022 and October 3, 2021 respectively. Industrial includes $2.3 million and $17.3 million of orders for Pipeline Engineering for the nine months ended October 2, 2022 and October 3, 2021 respectively. 2. Backlog is calculated as current period orders plus unshipped customer orders from prior periods for which revenue has not been recognized. Industrial includes $0.0 million and $0.8 million for Pipeline Engineering in 2022 and 2021 respectively. CIRCOR INTERNATIONAL, INC. SEGMENT INFORMATION (in thousands, except percentages) (unaudited) 2021 As Restated 2022 As reported 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR 3RD QTR TOTAL ORDERS Aerospace & Defense $ 72,999 $ 54,243 $ 54,028 $ 73,898 $ 255,168 $ 77,890 $ 69,053 $ 90,486 $ 237,429 Industrial 153,695 155,959 139,691 146,065 595,410 143,727 139,370 137,848 420,945 Total $ 226,693 $ 210,203 $ 193,719 $ 219,964 $ 850,578 $ 221,617 $ 208,423 $ 228,334 $ 658,374 NET REVENUES Aerospace & Defense $ 58,488 $ 60,613 $ 63,461 $ 69,979 $ 252,541 $ 63,370 $ 67,271 $ 72,219 $ 202,860 Industrial 117,963 126,977 126,248 134,938 506,126 122,285 124,105 123,143 369,532 Total $ 176,451 $ 187,590 $ 189,709 $ 204,917 $ 758,667 $ 185,655 $ 191,376 $ 195,362 $ 572,392 SEGMENT OPERATING INCOME Aerospace & Defense $ 9,988 $ 11,741 $ 15,927 $ 18,416 $ 56,073 $ 11,320 $ 13,566 $ 16,891 $ 41,777 Industrial 5,834 7,237 7,124 8,700 28,896 6,857 8,484 15,717 31,059 Corporate expenses (9,035 ) (7,950 ) (7,017 ) (6,636 ) (30,638 ) (7,770 ) (5,485 ) (5,301 ) (18,557 ) Total $ 6,787 $ 11,028 $ 16,034 $ 20,480 $ 54,331 $ 10,407 $ 16,565 $ 27,307 $ 54,279 SEGMENT OPERATING MARGIN % Aerospace & Defense 17.1 % 19.4 % 25.1 % 26.3 % 22.2 % 17.9 % 20.2 % 23.4 % 20.6 % Industrial 4.9 % 5.7 % 5.6 % 6.4 % 5.7 % 5.6 % 6.8 % 12.8 % 8.4 % Total 3.8 % 5.9 % 8.5 % 10.0 % 7.2 % 5.6 % 8.7 % 14.0 % 9.5 % 2021 2022 Pipeline Engineering1 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR 3RD QTR TOTAL ORDERS - Industrial $ 5,531 $ 5,192 $ 6,575 $ 7,121 $ 24,419 $ 2,260 $ — $ — $ 2,260 NET REVENUES - Industrial $ 2,994 $ 3,124 $ 3,236 $ 5,248 $ 14,602 $ 3,012 $ 218 $ 8 $ 3,238 SEGMENT OP. INC. -Industrial $ (2,479 ) $ (1,754 ) $ (2,470 ) $ (3,191 ) $ (9,893 ) $ (3,190 ) $ (1,074 ) $ (150 ) $ (4,414 ) Segment Operating Margin % (82.8 )% (56.1 )% (76.3 )% (60.8 )% (67.8 )% (105.9 )% (492.7 )% (1875.0 )% (136.3 )% Quantifies the impact of the Pipeline Engineering business on the Industrial Segment. CIRCOR INTERNATIONAL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES (in thousands, except percentages) (unaudited) 2021 As Restated 2022 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR 3RD QTR TOTAL Net Cash (Used In) Provided By Operating Activities $ (19,210 ) $ 8,866 $ 10,197 $ 10,595 $ 10,448 $ (15,924 ) $ (3,593 ) $ (9,815 ) $ (29,332 ) LESS Capital expenditures, net of sale proceeds1 3,392 2,644 4,541 4,168 14,745 3,592 5,461 4,156 13,209 ADJUSTED FREE CASH FLOW $ (22,602 ) $ 6,222 $ 5,656 $ 6,427 $ (4,297 ) $ (19,516 ) $ (9,054 ) $ (13,971 ) $ (42,541 ) Gross Debt $ 538,541 $ 524,391 $ 518,464 $ 526,311 $ 526,311 $ 547,681 $ 543,100 $ 522,975 $ 522,975 Less: Cash & Cash equivalents 64,837 58,862 58,013 59,924 59,924 61,122 55,238 47,131 47,131 GROSS DEBT, NET OF CASH $ 473,704 $ 465,529 $ 460,451 $ 466,387 $ 466,387 $ 486,559 $ 487,862 $ 475,844 $ 475,844 TOTAL SHAREHOLDERS' EQUITY $ 138,663 $ 122,185 $ 121,256 $ 133,716 $ 133,716 $ 110,321 $ 103,663 $ 122,082 $ 122,082 GROSS DEBT AS % OF EQUITY 388 % 429 % 428 % 394 % 394 % 496 % 524 % 428 % 428 % GROSS DEBT, NET OF CASH AS % OF EQUITY 342 % 381 % 380 % 349 % 349 % 441 % 471 % 390 % 390 % Includes capital expenditures, net of proceeds of asset sales from GAAP operating cash flow. CIRCOR INTERNATIONAL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES (in thousands, except percentages) (unaudited) 2021 As Restated 2022 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR 3RD QTR TOTAL NET (LOSS) INCOME $ (11,796 ) $ (18,784 ) $ (2,630 ) $ (28,427 ) $ (61,638 ) $ (21,481 ) $ 3,960 $ 31,470 $ 13,949 LESS: Restructuring related inventory charges (recoveries), net — 958 (60 ) (299 ) 599 2,757 — — 2,757 Restructuring charges (recoveries), net 2,060 2,281 (312 ) 205 4,234 6,447 4,695 (173 ) 10,969 Acquisition amortization 10,487 10,498 10,417 10,369 41,772 9,391 9,178 9,118 27,687 Acquisition depreciation 2,375 1,327 1,412 1,397 6,511 1,045 1,239 1,335 3,620 Special (recoveries) charges, net (2,870 ) 4,523 1,126 17,259 20,038 2,556 (10,425 ) (25,529 ) (33,399 ) Goodwill Impairment charge — — — 10,500 10,500 — — — — Income tax impact (44 ) 2,425 (596 ) (1,622 ) 163 384 (2,207 ) (2,066 ) (3,889 ) Net loss (income) from discontinued operations 239 878 (2,510 ) (13 ) (1,406 ) — — — — ADJUSTED NET INCOME $ 451 $ 4,106 $ 6,847 $ 9,369 $ 20,773 $ 1,099 $ 6,440 $ 14,155 $ 21,694 (LOSS) EARNINGS PER COMMON SHARE (Diluted) $ (0.59 ) $ (0.93 ) $ (0.13 ) $ (1.40 ) $ (3.05 ) $ (1.06 ) $ 0.19 $ 1.54 $ 0.68 LESS: Restructuring related inventory charges — 0.05 — (0.01 ) 0.03 0.14 — — 0.14 Restructuring charges (recoveries), net 0.10 0.11 (0.02 ) 0.01 0.21 0.32 0.23 (0.01 ) 0.54 Acquisition amortization 0.52 0.52 0.51 0.51 2.07 0.46 0.45 0.45 1.36 Acquisition depreciation 0.12 0.07 0.07 0.07 0.32 0.05 0.06 0.07 0.18 Special (recoveries) charges, net (0.14 ) 0.22 0.06 0.85 0.99 0.13 (0.51 ) (1.25 ) (1.64 ) Impairment charge — — — 0.52 0.52 — — — — Income tax impact — 0.12 (0.03 ) (0.08 ) 0.01 0.02 (0.11 ) (0.10 ) (0.19 ) (Loss) earnings) per share from discontinued operations 0.01 0.04 (0.12 ) — (0.07 ) — — — — ADJUSTED EARNINGS PER SHARE (Diluted) $ 0.02 $ 0.20 $ 0.34 $ 0.46 $ 1.03 $ 0.05 $ 0.32 $ 0.69 $ 1.06 CIRCOR INTERNATIONAL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES (in thousands, except percentages) (unaudited) 2021 As Restated 2022 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR 3RD QTR TOTAL NET (LOSS) INCOME $ (11,796 ) $ (18,784 ) $ (2,629 ) $ (28,426 ) $ (61,635 ) $ (21,481 ) $ 3,960 $ 31,470 $ 13,949 LESS: Interest expense, net 8,369 7,958 7,997 8,040 32,365 9,456 10,203 11,821 31,480 Depreciation 6,509 5,460 5,536 5,348 22,854 5,000 5,056 4,956 15,012 Amortization 10,696 10,657 10,576 10,375 42,304 9,397 9,183 9,124 27,704 Provision for income taxes (297 ) 2,659 850 1,970 5,182 1,523 (647 ) 1,661 2,536 Loss (income) from discontinued operations 239 878 (2,510 ) (13 ) (1,406 ) — — — — EBITDA $ 13,720 $ 8,828 $ 19,820 $ (2,706 ) $ 39,664 $ 3,895 $ 27,755 $ 59,032 $ 90,681 LESS: Restructuring related inventory charges (recoveries) — 958 (60 ) (299 ) 599 2,757 — — 2,757 Restructuring charges (recoveries), net 2,060 2,281 (312 ) 205 4,234 6,447 4,695 (173 ) 10,969 Special (recoveries) charges, net (2,870 ) 4,523 1,126 17,259 20,038 2,556 (10,425 ) (25,529 ) (33,399 ) Goodwill impairment charge — — — 10,500 10,500 — — — — ADJUSTED EBITDA $ 12,910 $ 16,590 $ 20,574 $ 24,959 $ 75,035 $ 15,655 $ 22,025 $ 33,330 $ 71,008 CIRCOR INTERNATIONAL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES (in thousands, except percentages) (unaudited) 2021 As Restated 2022 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR 3RD QTR TOTAL OPERATING (LOSS) INCOME $ (5,266 ) $ (8,557 ) $ 3,451 $ (18,952 ) $ (29,323 ) $ (11,789 ) $ 11,878 $ 42,556 $ 42,645 LESS: Restructuring related inventory charges (recoveries) — 958 (60 ) (299 ) 599 2,757 — — 2,757 Restructuring charges (recoveries), net 2,060 2,281 (312 ) 205 4,234 6,447 4,695 (173 ) 10,969 Acquisition amortization 10,487 10,498 10,417 10,369 41,772 9,391 9,178 9,118 27,687 Acquisition depreciation 2,375 1,327 1,412 1,397 6,511 1,045 1,239 1,335 3,620 Special (recoveries) charges, net (2,870 ) 4,523 1,126 17,259 20,038 2,556 (10,425 ) (25,529 ) (33,399 ) Goodwill impairment charge — — — 10,500 10,500 — — — — ADJUSTED OPERATING INCOME $ 6,787 $ 11,029 $ 16,034 $ 20,479 $ 54,331 $ 10,407 $ 16,565 $ 27,307 $ 54,279 OPERATING MARGIN (3.0 )% (4.6 )% 1.8 % (9.2 )% (3.9 )% (6.3 )% 6.2 % 21.8 % 7.5 % LESS: Restructuring related inventory charges (recoveries) 0.0 % 0.5 % 0.0 % (0.1 )% 0.1 % 1.5 % 0.0 % 0.0 % 0.5 % Restructuring charges (recoveries), net 1.2 % 1.2 % (0.2 )% 0.1 % 0.6 % 3.5 % 2.5 % (0.1 )% 1.9 % Acquisition amortization 5.9 % 5.6 % 5.5 % 5.1 % 5.5 % 5.1 % 4.8 % 4.7 % 4.8 % Acquisition depreciation 1.3 % 0.7 % 0.7 % 0.7 % 0.9 % 0.6 % 0.6 % 0.7 % 0.6 % Special (recoveries) charges, net (1.6 )% 2.4 % 0.6 % 8.4 % 2.6 % 1.4 % (5.4 )% (13.1 )% (5.8 )% Goodwill impairment charge 0.0 % 0.0 % 0.0 % 5.1 % 1.4 % 0.0 % 0.0 % 0.0 % 0.0 % ADJUSTED OPERATING MARGIN 3.8 % 5.9 % 8.5 % 10.0 % 7.2 % 5.6 % 8.7 % 14.0 % 9.5 % CIRCOR INTERNATIONAL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES (in thousands, except percentages) (unaudited) CIRCOR Aerospace & Defense Industrial 3Q 22 3Q 21 Change 3Q 22 3Q 21 Change 3Q 22 3Q 21 Change Reported Orders 228,334 193,719 18 % 90,486 54,028 67 % 137,848 139,691 (1 )% FX 16,620 3,756 12,864 Organic 244,954 193,719 26 % 94,242 54,028 74 % 150,712 139,691 8 % CIRCOR Aerospace & Defense Industrial 3Q 22 3Q 21 Change 3Q 22 3Q 21 Change 3Q 22 3Q 21 Change Reported Revenue 195,362 189,709 3 % 72,219 63,461 14 % 123,143 126,248 (2 )% FX 13,680 2,665 11,015 Organic 209,042 189,709 10 % 74,884 63,461 18 % 134,158 126,248 6 % Note regarding financial statements: Financial amounts are computed independently each quarter; therefore, the sum of the quarterly amounts may not equal the total amount for the respective year due to rounding. View source version on businesswire.com: https://www.businesswire.com/news/home/20221111005548/en/Contacts Scott Solomon Senior Vice President Sharon Merrill Associates, Inc. (857) 383-2409 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
CIRCOR Reports Financial Results for Third Quarter Ended October 2, 2022 By: CIRCOR International, Inc. via Business Wire November 14, 2022 at 07:25 AM EST GAAP EPS of $1.54, Up 1285% YoY; Adjusted EPS of $0.69, Up 103% YoY GAAP Operating Income of $42.6 Million, Up 1133% YoY; Adjusted Operating Income of $27.3 Million, Up 70% YoY Orders up 18% Reported and 26% Organically Progressing with Review of Strategic Alternatives CIRCOR International, Inc. (NYSE: CIR) (“CIRCOR” or “the Company”), one of the world’s leading providers of mission critical flow control products and services for the Industrial and Aerospace & Defense markets, today announced financial results for the third quarter ended October 2, 2022. Q3 2022 Overview: Revenue of $195 million up 3% reported and 10% organically compared to Q3'2021 Aerospace & Defense revenue of $72 million, up 14% reported and 18% organically Industrial revenue of $123 million, down (2%) reported and up 6% organically Orders of $228 million, up 18% and 26% organically Aerospace & Defense orders of $90 million, up 67% and 74% organically Industrial orders of $138 million, down (1%) and up 8% organically Backlog of $497 million, up 14% driven by strong demand in both Aerospace & Defense and Industrial segments GAAP operating income of $42.6 million, up 1133% GAAP operating margin of 21.8%, up 2000 bps Adjusted operating income $27.3 million, up 70% Adjusted operating margin of 14%, up 550 bps CIRCOR President and CEO Tony Najjar said, “Our team performed extremely well in the third quarter exceeding expectations. We delivered a great quarter with strong organic orders, revenue growth and expanded operating margin. Organic orders grew 26%, driven by exceptional performance in A&D, which delivered 74% growth in organic orders. I am particularly pleased with our win rate on key missile programs, our orders growth in medical products, and our sustained momentum in commercial aerospace as that market continues its recovery. In our Industrial segment, we are leveraging our aftermarket position to deliver strong pricing, enabling us to overcome the impact of inflation and generate solid margin expansion.” Mr. Najjar continued, “Both Industrial and A&D benefited from disciplined execution of our strategic priorities to drive revenues and operating income growth. Our results underscore our emphasis on value pricing, our strong aftermarket position, and operational simplification/cost out actions. We grew adjusted operating income by 70% and drove 550 bps improvement in adjusted operating margin despite inflation pressure, ongoing supply chain and logistics challenges, and rising energy costs. With the actions taken, and continued operating discipline and focus on our customers, we have positioned both segments to deliver sustained growth and shareholder value.” Conference Call Information CIRCOR International will hold a conference call to review its third-quarter 2022 financial results at 9:00 a.m. ET today, November 14, 2022. 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. https://investors.circor.com/. The live call also can be accessed by dialing (877) 407-5790 or (201) 689-8328. Participants are encouraged to dial in to the call at least 15 minutes prior to the start time. The webcast will be archived on the Company’s website for one year. Selected Consolidated Results (unaudited) ($ millions except EPS) Q3 2022 Q3 2021 Change Nine Months Ended October 2, 2022 Nine Months ended October 3, 2021 Change Revenue1 $ 195.4 $ 189.7 3 % $ 572.4 $ 553.8 3 % GAAP operating (loss) income 42.6 3.5 1133 % 42.6 (10.4 ) 510 % Adjusted operating income2 27.3 16.0 70 % 54.3 33.8 61 % GAAP operating margin 21.8 % 1.8 % 2000 bps 7.5 % (1.9 )% 940 bps Adjusted operating margin3 14.0 % 8.5 % 550 bps 9.5 % 6.1 % 340 bps GAAP (loss) per share $ 1.54 $ (0.13 ) 1285 % $ 0.68 $ (1.65 ) 141 % Adjusted earnings per share (diluted)4 $ 0.69 $ 0.34 103 % $ 1.06 $ 0.56 89 % Operating cash flow (9.8 ) 10.2 -196 % (29.3 ) (0.1 ) -29200 % Adjusted free cash flow5 (14.0 ) 5.7 -347 % (42.5 ) (10.7 ) -297 % Orders6 $ 228.3 $ 193.7 18 % $ 657.3 $ 630.6 4 % Segment Results (unaudited) ($ in millions) Q3 2022 Q3 2021 Change Nine Months Ended October 2, 2022 Nine Months ended October 3, 2021 Change Aerospace & Defense Revenue $ 72.2 $ 63.5 14 % $ 202.9 $ 182.6 11 % Segment operating income 16.9 15.9 6 % 41.8 37.7 11 % Segment operating margin 23.4 % 25.1 % -170 bps 20.6 % 20.6 % 0 bps Orders6 $ 90.5 $ 54.0 67 % $ 237.4 $ 181.3 31 % Industrial Revenue1 $ 123.1 $ 126.2 -2 % $ 369.5 $ 371.2 — % Segment operating income2 15.7 7.1 121 % 31.1 20.2 54 % Segment operating margin3 12.8 % 5.6 % 720 bps 8.4 % 5.4 % 300 bps Orders6 $ 137.8 $ 139.7 -1 % $ 420.9 $ 449.3 -6 % Consolidated and Industrial segment revenues for Q3 2022 and Q3 2021 included $0.0 million and $3.2 million, respectively, relating to our Pipeline Engineering business. Adjusted operating income is a non-GAAP financial measure. Refer to “Use of Non-GAAP Financial Measures” for an explanation of our non-GAAP financial measures and to the reconciliations included in this press release. Adjusted operating income and Industrial segment operating income for Q3 2022 and Q3 2021 included $(0.1) million and $(2.5) million, respectively, relating to our Pipeline Engineering business. Adjusted operating margin is a non-GAAP financial measure. Adjusted operating margin for Q3 2022 and Q3 2021 included (1875)% and (76)%, respectively, relating to our Pipeline Engineering business. Adjusted earnings per share (diluted) is a non-GAAP financial measure. Adjusted earnings per share and our segment results for Q3 2022 exclude net gain from non-cash acquisition-related intangible amortization and special and restructuring charges of $15.2 million, consisting of (i) $10.4 million for non-cash acquisition-related intangible amortization and depreciation expense; (ii) $0.1 million of costs due to the investigation into the accounting irregularities of the Pipeline Engineering business and incremental professional services incurred due to the restatement; (iii) $0.2 million of special charges related to the evaluation of strategic alternatives for the company; (iv) other special and restructuring charges net of $0.1 million; and (v) a gain of $26.0 million on the sale of real estate located at Corona, California. Adjusted consolidated and segment results for Q3 2021 exclude net income from discontinued operations of $2.5 million and net loss from non-cash acquisition-related intangible amortization, special and restructuring charges totaling $12.6 million. These charges include: (i) $11.8 million for non-cash acquisition-related intangible amortization and depreciation expense; and (ii) $0.8 million of other special and restructuring recoveries. Adjusted free cash flow, a non-GAAP financial measure, is calculated by subtracting GAAP capital expenditures, net of proceeds from asset sales, from GAAP operating cash flow. Orders, an operating measure, is defined as a legally binding agreement from an authorized individual at a customer requesting CIRCOR to provide goods and/or services at a fixed or determinable price and CIRCOR is capable of providing such goods and services, when the terms and conditions are firm enough to assure subsequent payment by the customer. Consolidated and Industrial segment orders for Q3 2022 and Q3 2021 included $0.0 million and $6.6 million, respectively, relating to our Pipeline Engineering business. As previously disclosed in our Form 10-K for the year ended December 31, 2021, the Company discovered accounting irregularities in its Pipeline Engineering business unit resulting in a restatement of previously issued financial statements. Company Files Quarterly Report on Form 10-Q for the Period Ended October 2, 2022 The Company today filed its Quarterly Report on Form 10-Q for the third quarter of 2022. Use of Non-GAAP Financial Measures In this press release, the Company uses the non-GAAP financial measures adjusted net income, adjusted EBITDA, adjusted operating income, adjusted operating margin, adjusted earnings per share and adjusted free cash flow. 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 that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating CIRCOR’s current operating performance and future prospects in the same manner as management does if they so choose. These non-GAAP financial measures can also assist investors and others in comparing CIRCOR’s current financial results with CIRCOR’s past financial results in a consistent manner. We exclude costs and tax effects associated with special and restructuring activities, such as reducing overhead and consolidating facilities. We believe that the costs related to special and 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 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. We exclude goodwill impairment charges. We exclude these costs because we do not believe they are indicative of our normal operating costs. Due to the significance of recently sold or exited businesses and to provide a comparison of changes in our revenue and orders (an operating measure), we also discuss these changes on an “organic” basis. Organic is calculated assuming the divestitures and/or exited businesses completed prior to July 3, 2022 were completed on January 1, 2021 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 peers. 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. About CIRCOR International, Inc. CIRCOR International is one of the world’s leading providers of mission critical flow control products and services for the Industrial and Aerospace & Defense markets. The Company has a product portfolio of market-leading brands serving its customers’ most demanding applications. CIRCOR markets its solutions directly and through various sales partners to more than 14,000 customers in approximately 100 countries. The Company has a global presence with approximately 3,100 employees and is headquartered in Burlington, Massachusetts. For more information, visit the Company’s investor relations website at http://investors.circor.com. Cautionary Note Regarding Forward-Looking Statements This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Actual results may differ materially from the expectations the Company describes in its forward-looking statements. Substantial 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. Important factors that could cause actual results to differ materially from expectations include, but are not limited to the inability to achieve expected results in pricing and cost out actions and the related impact on margins and cash flow; the effectiveness of the Company’s internal control over financial reporting and disclosure controls and procedures; the remediation of the material weaknesses in the Company’s internal controls over financial reporting or other potential weaknesses of which the Company is not currently aware or which have not been detected; the timing of the Company regaining compliance with the NYSE’s continued listing standards; the timing and outcome, if any, of the Company’s strategic alternatives review; the uncertainty associated with the current worldwide economic conditions and the continuing impact on economic and financial conditions in the United States and around the world, including as a result of COVID-19 , rising inflation, increasing interest rates, natural disasters, military conflicts, including the conflict between Russia and Ukraine, terrorist attacks and other similar matters; and the risks detailed from time to time in the Company’s periodic reports filed with the SEC. Before making any investment decisions regarding CIRCOR, the Company strongly advises you to read the section entitled “Risk Factors” in its 2021 Annual Report on Form 10-K, which can be accessed under the “Investors” link of the Company’s website at www.circor.com. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. CIRCOR INTERNATIONAL, INC CONSOLIDATED STATEMENT OF OPERATIONS (in thousands, except per share data) (unaudited) Three Months Ended Nine Months Ended October 2, 2022 As Restated October 3, 2021 October 2, 2022 As Restated October 3, 2021 Net revenues $ 195,362 $ 189,709 $ 572,392 $ 553,750 Cost of revenues 128,116 131,898 391,660 387,943 Gross profit 67,246 57,811 180,732 165,807 Selling, general and administrative expenses 50,392 53,546 160,517 169,371 Special and restructuring (recoveries) charges, net (25,702 ) 814 (22,430 ) 6,808 Operating income (loss) 42,556 3,451 42,645 (10,372 ) Other expense (income): Interest expense, net 11,821 7,997 31,481 24,325 Other (income), net (2,396 ) (256 ) (5,321 ) (3,301 ) Total other expense, net 9,425 7,741 26,160 21,024 Income (loss) from continuing operations before income taxes 33,131 (4,290 ) 16,485 (31,396 ) Provision for income taxes 1,661 850 2,536 3,206 Income (loss) from continuing operations, net of tax 31,470 (5,140 ) 13,949 (34,602 ) Income from discontinued operations, net of tax — 2,510 — 1,393 Net income (loss) $ 31,470 $ (2,630 ) $ 13,949 $ (33,209 ) Basic income (loss) per common share: Basic from continuing operations $ 1.55 $ (0.25 ) $ 0.69 $ (1.72 ) Basic from discontinued operations $ — $ 0.12 $ — $ 0.07 Net income (loss) $ 1.55 $ (0.13 ) $ 0.69 $ (1.65 ) Diluted income (loss) per common share: Diluted from continuing operations $ 1.54 $ (0.25 ) $ 0.68 $ (1.72 ) Diluted from discontinued operations $ — $ 0.12 $ — $ 0.07 Net income (loss) $ 1.54 $ (0.13 ) $ 0.68 $ (1.65 ) Weighted average number of common shares outstanding: Basic 20,364 20,257 20,345 20,181 Diluted 20,410 20,257 20,410 20,181 CIRCOR INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Nine Months Ended OPERATING ACTIVITIES October 2, 2022 As Restated October 3, 2021 Net income (loss) $ 13,949 $ (33,209 ) Income from discontinued operations, net of income taxes — 1,393 Income (loss) from continuing operations, net of tax 13,949 (34,602 ) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation 15,012 17,505 Amortization 27,704 31,929 Change in provision for bad debt expense (263 ) (383 ) Write down of inventory 1,797 1,742 Compensation expense for share-based plans 980 4,165 Loss on debt extinguishment 4,977 — Amortization of debt issuance costs 2,672 3,032 Deferred tax provision 45 823 Loss on sale of businesses — 1,308 Gain on sale of real estate (47,977 ) — Other impairment charges 8,011 — Loss on deconsolidation charges 4,675 — Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: Trade accounts receivable (1,116 ) 8,686 Inventories (28,364 ) (11,621 ) Prepaid expenses and other assets (25,387 ) (26,686 ) Accounts payable, accrued expenses and other liabilities (6,047 ) 6,439 Net cash (used in) provided by continuing operating activities (29,332 ) 2,337 Net cash used in discontinued operating activities — (2,484 ) Net cash used in operating activities (29,332 ) (147 ) INVESTING ACTIVITIES Additions to property, plant and equipment (13,291 ) (10,579 ) Proceeds from the sale of property, plant and equipment 82 2 Proceeds from the sale of real estate 54,945 — Proceeds from beneficial interest of factored receivables 3,461 1,531 Proceeds from the sale of business — 9,993 Net cash provided by investing activities 45,197 947 FINANCING ACTIVITIES Proceeds from long-term debt 180,441 145,550 Payments of long-term debt (182,166 ) (148,450 ) Net change in short-term borrowings (1,573 ) (225 ) Proceeds from the exercise of stock options — 151 Withholding tax payments on net share settlements on equity awards (1,299 ) (4,154 ) Payment of debt issuance costs (16,701 ) — Net cash used in financing activities (21,298 ) (7,128 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash (7,096 ) (2,834 ) DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH (12,529 ) (9,162 ) Cash, cash equivalents, and restricted cash at beginning of period 61,374 68,607 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD $ 48,845 $ 59,445 CIRCOR INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) (unaudited) October 2, 2022 December 31, 2021 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 47,131 $ 59,924 Trade accounts receivable, net 95,407 100,149 Inventories 137,411 123,343 Prepaid expenses and other current assets 125,409 110,749 Total Current Assets 405,358 394,165 PROPERTY, PLANT AND EQUIPMENT, NET 130,442 154,461 OTHER ASSETS: Goodwill 117,542 122,906 Intangibles, net 257,839 303,476 Lease right-of-use assets, net 40,836 21,139 Deferred income taxes 637 756 Other assets 27,323 22,395 TOTAL ASSETS $ 979,977 $ 1,019,298 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 71,601 $ 83,382 Accrued expenses and other current liabilities 73,505 81,998 Accrued compensation and benefits 31,817 26,551 Short-term borrowings and current portion of long-term debt — 1,611 Total Current Liabilities 176,923 193,542 LONG-TERM DEBT 501,754 511,694 DEFERRED INCOME TAXES 18,101 21,721 PENSION LIABILITY, NET 104,438 120,881 LONG-TERM LEASE LIABILITIES 37,155 17,715 OTHER NON-CURRENT LIABILITIES 19,524 20,029 COMMITMENTS AND CONTINGENCIES (NOTE 9 AND 10) SHAREHOLDERS’ EQUITY: Preferred stock, $0.01 par value; 1,000,000 shares authorized; no shares issued and outstanding at October 2, 2022 and December 31, 2021 — — Common stock, $0.01 par value; 29,000,000 shares authorized; 21,735,838 and 21,633,131 issued at October 2, 2022 and December 31, 2021 respectively 218 217 Additional paid-in capital 455,208 454,852 Accumulated deficit (184,132 ) (198,081 ) Common treasury stock, at cost (1,372,488 shares at October 2, 2022 and December 31, 2021) (74,472 ) (74,472 ) Accumulated other comprehensive loss, net of tax (74,740 ) (48,800 ) Total Shareholders’ Equity 122,082 133,716 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 979,977 $ 1,019,298 CIRCOR INTERNATIONAL, INC. SUMMARY OF ORDERS AND BACKLOG (in millions) (unaudited) Three Months Ended Nine Months Ended October 2, 2022 October 3, 2021 October 2, 2022 October 3, 2021 ORDERS (1) Aerospace & Defense $ 90.5 $ 54.0 $ 237.40 $ 181.3 Industrial 137.8 139.7 420.9 449.3 Total orders $ 228.3 $ 193.7 $ 658.3 $ 630.6 October 2, 2022 October 3, 2021 BACKLOG (2) Aerospace & Defense $ 214.0 $ 180.9 Industrial 282.9 254.9 Total backlog $ 496.9 $ 435.8 1. Orders do not include the foreign exchange impact due to the re-measurement of customer backlog amounts denominated in foreign currencies. Industrial includes $0.0 million and $6.6 million of orders for Pipeline Engineering for the three months ended October 2, 2022 and October 3, 2021 respectively. Industrial includes $2.3 million and $17.3 million of orders for Pipeline Engineering for the nine months ended October 2, 2022 and October 3, 2021 respectively. 2. Backlog is calculated as current period orders plus unshipped customer orders from prior periods for which revenue has not been recognized. Industrial includes $0.0 million and $0.8 million for Pipeline Engineering in 2022 and 2021 respectively. CIRCOR INTERNATIONAL, INC. SEGMENT INFORMATION (in thousands, except percentages) (unaudited) 2021 As Restated 2022 As reported 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR 3RD QTR TOTAL ORDERS Aerospace & Defense $ 72,999 $ 54,243 $ 54,028 $ 73,898 $ 255,168 $ 77,890 $ 69,053 $ 90,486 $ 237,429 Industrial 153,695 155,959 139,691 146,065 595,410 143,727 139,370 137,848 420,945 Total $ 226,693 $ 210,203 $ 193,719 $ 219,964 $ 850,578 $ 221,617 $ 208,423 $ 228,334 $ 658,374 NET REVENUES Aerospace & Defense $ 58,488 $ 60,613 $ 63,461 $ 69,979 $ 252,541 $ 63,370 $ 67,271 $ 72,219 $ 202,860 Industrial 117,963 126,977 126,248 134,938 506,126 122,285 124,105 123,143 369,532 Total $ 176,451 $ 187,590 $ 189,709 $ 204,917 $ 758,667 $ 185,655 $ 191,376 $ 195,362 $ 572,392 SEGMENT OPERATING INCOME Aerospace & Defense $ 9,988 $ 11,741 $ 15,927 $ 18,416 $ 56,073 $ 11,320 $ 13,566 $ 16,891 $ 41,777 Industrial 5,834 7,237 7,124 8,700 28,896 6,857 8,484 15,717 31,059 Corporate expenses (9,035 ) (7,950 ) (7,017 ) (6,636 ) (30,638 ) (7,770 ) (5,485 ) (5,301 ) (18,557 ) Total $ 6,787 $ 11,028 $ 16,034 $ 20,480 $ 54,331 $ 10,407 $ 16,565 $ 27,307 $ 54,279 SEGMENT OPERATING MARGIN % Aerospace & Defense 17.1 % 19.4 % 25.1 % 26.3 % 22.2 % 17.9 % 20.2 % 23.4 % 20.6 % Industrial 4.9 % 5.7 % 5.6 % 6.4 % 5.7 % 5.6 % 6.8 % 12.8 % 8.4 % Total 3.8 % 5.9 % 8.5 % 10.0 % 7.2 % 5.6 % 8.7 % 14.0 % 9.5 % 2021 2022 Pipeline Engineering1 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR 3RD QTR TOTAL ORDERS - Industrial $ 5,531 $ 5,192 $ 6,575 $ 7,121 $ 24,419 $ 2,260 $ — $ — $ 2,260 NET REVENUES - Industrial $ 2,994 $ 3,124 $ 3,236 $ 5,248 $ 14,602 $ 3,012 $ 218 $ 8 $ 3,238 SEGMENT OP. INC. -Industrial $ (2,479 ) $ (1,754 ) $ (2,470 ) $ (3,191 ) $ (9,893 ) $ (3,190 ) $ (1,074 ) $ (150 ) $ (4,414 ) Segment Operating Margin % (82.8 )% (56.1 )% (76.3 )% (60.8 )% (67.8 )% (105.9 )% (492.7 )% (1875.0 )% (136.3 )% Quantifies the impact of the Pipeline Engineering business on the Industrial Segment. CIRCOR INTERNATIONAL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES (in thousands, except percentages) (unaudited) 2021 As Restated 2022 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR 3RD QTR TOTAL Net Cash (Used In) Provided By Operating Activities $ (19,210 ) $ 8,866 $ 10,197 $ 10,595 $ 10,448 $ (15,924 ) $ (3,593 ) $ (9,815 ) $ (29,332 ) LESS Capital expenditures, net of sale proceeds1 3,392 2,644 4,541 4,168 14,745 3,592 5,461 4,156 13,209 ADJUSTED FREE CASH FLOW $ (22,602 ) $ 6,222 $ 5,656 $ 6,427 $ (4,297 ) $ (19,516 ) $ (9,054 ) $ (13,971 ) $ (42,541 ) Gross Debt $ 538,541 $ 524,391 $ 518,464 $ 526,311 $ 526,311 $ 547,681 $ 543,100 $ 522,975 $ 522,975 Less: Cash & Cash equivalents 64,837 58,862 58,013 59,924 59,924 61,122 55,238 47,131 47,131 GROSS DEBT, NET OF CASH $ 473,704 $ 465,529 $ 460,451 $ 466,387 $ 466,387 $ 486,559 $ 487,862 $ 475,844 $ 475,844 TOTAL SHAREHOLDERS' EQUITY $ 138,663 $ 122,185 $ 121,256 $ 133,716 $ 133,716 $ 110,321 $ 103,663 $ 122,082 $ 122,082 GROSS DEBT AS % OF EQUITY 388 % 429 % 428 % 394 % 394 % 496 % 524 % 428 % 428 % GROSS DEBT, NET OF CASH AS % OF EQUITY 342 % 381 % 380 % 349 % 349 % 441 % 471 % 390 % 390 % Includes capital expenditures, net of proceeds of asset sales from GAAP operating cash flow. CIRCOR INTERNATIONAL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES (in thousands, except percentages) (unaudited) 2021 As Restated 2022 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR 3RD QTR TOTAL NET (LOSS) INCOME $ (11,796 ) $ (18,784 ) $ (2,630 ) $ (28,427 ) $ (61,638 ) $ (21,481 ) $ 3,960 $ 31,470 $ 13,949 LESS: Restructuring related inventory charges (recoveries), net — 958 (60 ) (299 ) 599 2,757 — — 2,757 Restructuring charges (recoveries), net 2,060 2,281 (312 ) 205 4,234 6,447 4,695 (173 ) 10,969 Acquisition amortization 10,487 10,498 10,417 10,369 41,772 9,391 9,178 9,118 27,687 Acquisition depreciation 2,375 1,327 1,412 1,397 6,511 1,045 1,239 1,335 3,620 Special (recoveries) charges, net (2,870 ) 4,523 1,126 17,259 20,038 2,556 (10,425 ) (25,529 ) (33,399 ) Goodwill Impairment charge — — — 10,500 10,500 — — — — Income tax impact (44 ) 2,425 (596 ) (1,622 ) 163 384 (2,207 ) (2,066 ) (3,889 ) Net loss (income) from discontinued operations 239 878 (2,510 ) (13 ) (1,406 ) — — — — ADJUSTED NET INCOME $ 451 $ 4,106 $ 6,847 $ 9,369 $ 20,773 $ 1,099 $ 6,440 $ 14,155 $ 21,694 (LOSS) EARNINGS PER COMMON SHARE (Diluted) $ (0.59 ) $ (0.93 ) $ (0.13 ) $ (1.40 ) $ (3.05 ) $ (1.06 ) $ 0.19 $ 1.54 $ 0.68 LESS: Restructuring related inventory charges — 0.05 — (0.01 ) 0.03 0.14 — — 0.14 Restructuring charges (recoveries), net 0.10 0.11 (0.02 ) 0.01 0.21 0.32 0.23 (0.01 ) 0.54 Acquisition amortization 0.52 0.52 0.51 0.51 2.07 0.46 0.45 0.45 1.36 Acquisition depreciation 0.12 0.07 0.07 0.07 0.32 0.05 0.06 0.07 0.18 Special (recoveries) charges, net (0.14 ) 0.22 0.06 0.85 0.99 0.13 (0.51 ) (1.25 ) (1.64 ) Impairment charge — — — 0.52 0.52 — — — — Income tax impact — 0.12 (0.03 ) (0.08 ) 0.01 0.02 (0.11 ) (0.10 ) (0.19 ) (Loss) earnings) per share from discontinued operations 0.01 0.04 (0.12 ) — (0.07 ) — — — — ADJUSTED EARNINGS PER SHARE (Diluted) $ 0.02 $ 0.20 $ 0.34 $ 0.46 $ 1.03 $ 0.05 $ 0.32 $ 0.69 $ 1.06 CIRCOR INTERNATIONAL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES (in thousands, except percentages) (unaudited) 2021 As Restated 2022 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR 3RD QTR TOTAL NET (LOSS) INCOME $ (11,796 ) $ (18,784 ) $ (2,629 ) $ (28,426 ) $ (61,635 ) $ (21,481 ) $ 3,960 $ 31,470 $ 13,949 LESS: Interest expense, net 8,369 7,958 7,997 8,040 32,365 9,456 10,203 11,821 31,480 Depreciation 6,509 5,460 5,536 5,348 22,854 5,000 5,056 4,956 15,012 Amortization 10,696 10,657 10,576 10,375 42,304 9,397 9,183 9,124 27,704 Provision for income taxes (297 ) 2,659 850 1,970 5,182 1,523 (647 ) 1,661 2,536 Loss (income) from discontinued operations 239 878 (2,510 ) (13 ) (1,406 ) — — — — EBITDA $ 13,720 $ 8,828 $ 19,820 $ (2,706 ) $ 39,664 $ 3,895 $ 27,755 $ 59,032 $ 90,681 LESS: Restructuring related inventory charges (recoveries) — 958 (60 ) (299 ) 599 2,757 — — 2,757 Restructuring charges (recoveries), net 2,060 2,281 (312 ) 205 4,234 6,447 4,695 (173 ) 10,969 Special (recoveries) charges, net (2,870 ) 4,523 1,126 17,259 20,038 2,556 (10,425 ) (25,529 ) (33,399 ) Goodwill impairment charge — — — 10,500 10,500 — — — — ADJUSTED EBITDA $ 12,910 $ 16,590 $ 20,574 $ 24,959 $ 75,035 $ 15,655 $ 22,025 $ 33,330 $ 71,008 CIRCOR INTERNATIONAL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES (in thousands, except percentages) (unaudited) 2021 As Restated 2022 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR 3RD QTR TOTAL OPERATING (LOSS) INCOME $ (5,266 ) $ (8,557 ) $ 3,451 $ (18,952 ) $ (29,323 ) $ (11,789 ) $ 11,878 $ 42,556 $ 42,645 LESS: Restructuring related inventory charges (recoveries) — 958 (60 ) (299 ) 599 2,757 — — 2,757 Restructuring charges (recoveries), net 2,060 2,281 (312 ) 205 4,234 6,447 4,695 (173 ) 10,969 Acquisition amortization 10,487 10,498 10,417 10,369 41,772 9,391 9,178 9,118 27,687 Acquisition depreciation 2,375 1,327 1,412 1,397 6,511 1,045 1,239 1,335 3,620 Special (recoveries) charges, net (2,870 ) 4,523 1,126 17,259 20,038 2,556 (10,425 ) (25,529 ) (33,399 ) Goodwill impairment charge — — — 10,500 10,500 — — — — ADJUSTED OPERATING INCOME $ 6,787 $ 11,029 $ 16,034 $ 20,479 $ 54,331 $ 10,407 $ 16,565 $ 27,307 $ 54,279 OPERATING MARGIN (3.0 )% (4.6 )% 1.8 % (9.2 )% (3.9 )% (6.3 )% 6.2 % 21.8 % 7.5 % LESS: Restructuring related inventory charges (recoveries) 0.0 % 0.5 % 0.0 % (0.1 )% 0.1 % 1.5 % 0.0 % 0.0 % 0.5 % Restructuring charges (recoveries), net 1.2 % 1.2 % (0.2 )% 0.1 % 0.6 % 3.5 % 2.5 % (0.1 )% 1.9 % Acquisition amortization 5.9 % 5.6 % 5.5 % 5.1 % 5.5 % 5.1 % 4.8 % 4.7 % 4.8 % Acquisition depreciation 1.3 % 0.7 % 0.7 % 0.7 % 0.9 % 0.6 % 0.6 % 0.7 % 0.6 % Special (recoveries) charges, net (1.6 )% 2.4 % 0.6 % 8.4 % 2.6 % 1.4 % (5.4 )% (13.1 )% (5.8 )% Goodwill impairment charge 0.0 % 0.0 % 0.0 % 5.1 % 1.4 % 0.0 % 0.0 % 0.0 % 0.0 % ADJUSTED OPERATING MARGIN 3.8 % 5.9 % 8.5 % 10.0 % 7.2 % 5.6 % 8.7 % 14.0 % 9.5 % CIRCOR INTERNATIONAL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES (in thousands, except percentages) (unaudited) CIRCOR Aerospace & Defense Industrial 3Q 22 3Q 21 Change 3Q 22 3Q 21 Change 3Q 22 3Q 21 Change Reported Orders 228,334 193,719 18 % 90,486 54,028 67 % 137,848 139,691 (1 )% FX 16,620 3,756 12,864 Organic 244,954 193,719 26 % 94,242 54,028 74 % 150,712 139,691 8 % CIRCOR Aerospace & Defense Industrial 3Q 22 3Q 21 Change 3Q 22 3Q 21 Change 3Q 22 3Q 21 Change Reported Revenue 195,362 189,709 3 % 72,219 63,461 14 % 123,143 126,248 (2 )% FX 13,680 2,665 11,015 Organic 209,042 189,709 10 % 74,884 63,461 18 % 134,158 126,248 6 % Note regarding financial statements: Financial amounts are computed independently each quarter; therefore, the sum of the quarterly amounts may not equal the total amount for the respective year due to rounding. View source version on businesswire.com: https://www.businesswire.com/news/home/20221111005548/en/Contacts Scott Solomon Senior Vice President Sharon Merrill Associates, Inc. (857) 383-2409
GAAP EPS of $1.54, Up 1285% YoY; Adjusted EPS of $0.69, Up 103% YoY GAAP Operating Income of $42.6 Million, Up 1133% YoY; Adjusted Operating Income of $27.3 Million, Up 70% YoY Orders up 18% Reported and 26% Organically Progressing with Review of Strategic Alternatives
CIRCOR International, Inc. (NYSE: CIR) (“CIRCOR” or “the Company”), one of the world’s leading providers of mission critical flow control products and services for the Industrial and Aerospace & Defense markets, today announced financial results for the third quarter ended October 2, 2022. Q3 2022 Overview: Revenue of $195 million up 3% reported and 10% organically compared to Q3'2021 Aerospace & Defense revenue of $72 million, up 14% reported and 18% organically Industrial revenue of $123 million, down (2%) reported and up 6% organically Orders of $228 million, up 18% and 26% organically Aerospace & Defense orders of $90 million, up 67% and 74% organically Industrial orders of $138 million, down (1%) and up 8% organically Backlog of $497 million, up 14% driven by strong demand in both Aerospace & Defense and Industrial segments GAAP operating income of $42.6 million, up 1133% GAAP operating margin of 21.8%, up 2000 bps Adjusted operating income $27.3 million, up 70% Adjusted operating margin of 14%, up 550 bps CIRCOR President and CEO Tony Najjar said, “Our team performed extremely well in the third quarter exceeding expectations. We delivered a great quarter with strong organic orders, revenue growth and expanded operating margin. Organic orders grew 26%, driven by exceptional performance in A&D, which delivered 74% growth in organic orders. I am particularly pleased with our win rate on key missile programs, our orders growth in medical products, and our sustained momentum in commercial aerospace as that market continues its recovery. In our Industrial segment, we are leveraging our aftermarket position to deliver strong pricing, enabling us to overcome the impact of inflation and generate solid margin expansion.” Mr. Najjar continued, “Both Industrial and A&D benefited from disciplined execution of our strategic priorities to drive revenues and operating income growth. Our results underscore our emphasis on value pricing, our strong aftermarket position, and operational simplification/cost out actions. We grew adjusted operating income by 70% and drove 550 bps improvement in adjusted operating margin despite inflation pressure, ongoing supply chain and logistics challenges, and rising energy costs. With the actions taken, and continued operating discipline and focus on our customers, we have positioned both segments to deliver sustained growth and shareholder value.” Conference Call Information CIRCOR International will hold a conference call to review its third-quarter 2022 financial results at 9:00 a.m. ET today, November 14, 2022. 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. https://investors.circor.com/. The live call also can be accessed by dialing (877) 407-5790 or (201) 689-8328. Participants are encouraged to dial in to the call at least 15 minutes prior to the start time. The webcast will be archived on the Company’s website for one year. Selected Consolidated Results (unaudited) ($ millions except EPS) Q3 2022 Q3 2021 Change Nine Months Ended October 2, 2022 Nine Months ended October 3, 2021 Change Revenue1 $ 195.4 $ 189.7 3 % $ 572.4 $ 553.8 3 % GAAP operating (loss) income 42.6 3.5 1133 % 42.6 (10.4 ) 510 % Adjusted operating income2 27.3 16.0 70 % 54.3 33.8 61 % GAAP operating margin 21.8 % 1.8 % 2000 bps 7.5 % (1.9 )% 940 bps Adjusted operating margin3 14.0 % 8.5 % 550 bps 9.5 % 6.1 % 340 bps GAAP (loss) per share $ 1.54 $ (0.13 ) 1285 % $ 0.68 $ (1.65 ) 141 % Adjusted earnings per share (diluted)4 $ 0.69 $ 0.34 103 % $ 1.06 $ 0.56 89 % Operating cash flow (9.8 ) 10.2 -196 % (29.3 ) (0.1 ) -29200 % Adjusted free cash flow5 (14.0 ) 5.7 -347 % (42.5 ) (10.7 ) -297 % Orders6 $ 228.3 $ 193.7 18 % $ 657.3 $ 630.6 4 % Segment Results (unaudited) ($ in millions) Q3 2022 Q3 2021 Change Nine Months Ended October 2, 2022 Nine Months ended October 3, 2021 Change Aerospace & Defense Revenue $ 72.2 $ 63.5 14 % $ 202.9 $ 182.6 11 % Segment operating income 16.9 15.9 6 % 41.8 37.7 11 % Segment operating margin 23.4 % 25.1 % -170 bps 20.6 % 20.6 % 0 bps Orders6 $ 90.5 $ 54.0 67 % $ 237.4 $ 181.3 31 % Industrial Revenue1 $ 123.1 $ 126.2 -2 % $ 369.5 $ 371.2 — % Segment operating income2 15.7 7.1 121 % 31.1 20.2 54 % Segment operating margin3 12.8 % 5.6 % 720 bps 8.4 % 5.4 % 300 bps Orders6 $ 137.8 $ 139.7 -1 % $ 420.9 $ 449.3 -6 % Consolidated and Industrial segment revenues for Q3 2022 and Q3 2021 included $0.0 million and $3.2 million, respectively, relating to our Pipeline Engineering business. Adjusted operating income is a non-GAAP financial measure. Refer to “Use of Non-GAAP Financial Measures” for an explanation of our non-GAAP financial measures and to the reconciliations included in this press release. Adjusted operating income and Industrial segment operating income for Q3 2022 and Q3 2021 included $(0.1) million and $(2.5) million, respectively, relating to our Pipeline Engineering business. Adjusted operating margin is a non-GAAP financial measure. Adjusted operating margin for Q3 2022 and Q3 2021 included (1875)% and (76)%, respectively, relating to our Pipeline Engineering business. Adjusted earnings per share (diluted) is a non-GAAP financial measure. Adjusted earnings per share and our segment results for Q3 2022 exclude net gain from non-cash acquisition-related intangible amortization and special and restructuring charges of $15.2 million, consisting of (i) $10.4 million for non-cash acquisition-related intangible amortization and depreciation expense; (ii) $0.1 million of costs due to the investigation into the accounting irregularities of the Pipeline Engineering business and incremental professional services incurred due to the restatement; (iii) $0.2 million of special charges related to the evaluation of strategic alternatives for the company; (iv) other special and restructuring charges net of $0.1 million; and (v) a gain of $26.0 million on the sale of real estate located at Corona, California. Adjusted consolidated and segment results for Q3 2021 exclude net income from discontinued operations of $2.5 million and net loss from non-cash acquisition-related intangible amortization, special and restructuring charges totaling $12.6 million. These charges include: (i) $11.8 million for non-cash acquisition-related intangible amortization and depreciation expense; and (ii) $0.8 million of other special and restructuring recoveries. Adjusted free cash flow, a non-GAAP financial measure, is calculated by subtracting GAAP capital expenditures, net of proceeds from asset sales, from GAAP operating cash flow. Orders, an operating measure, is defined as a legally binding agreement from an authorized individual at a customer requesting CIRCOR to provide goods and/or services at a fixed or determinable price and CIRCOR is capable of providing such goods and services, when the terms and conditions are firm enough to assure subsequent payment by the customer. Consolidated and Industrial segment orders for Q3 2022 and Q3 2021 included $0.0 million and $6.6 million, respectively, relating to our Pipeline Engineering business. As previously disclosed in our Form 10-K for the year ended December 31, 2021, the Company discovered accounting irregularities in its Pipeline Engineering business unit resulting in a restatement of previously issued financial statements. Company Files Quarterly Report on Form 10-Q for the Period Ended October 2, 2022 The Company today filed its Quarterly Report on Form 10-Q for the third quarter of 2022. Use of Non-GAAP Financial Measures In this press release, the Company uses the non-GAAP financial measures adjusted net income, adjusted EBITDA, adjusted operating income, adjusted operating margin, adjusted earnings per share and adjusted free cash flow. 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 that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating CIRCOR’s current operating performance and future prospects in the same manner as management does if they so choose. These non-GAAP financial measures can also assist investors and others in comparing CIRCOR’s current financial results with CIRCOR’s past financial results in a consistent manner. We exclude costs and tax effects associated with special and restructuring activities, such as reducing overhead and consolidating facilities. We believe that the costs related to special and 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 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. We exclude goodwill impairment charges. We exclude these costs because we do not believe they are indicative of our normal operating costs. Due to the significance of recently sold or exited businesses and to provide a comparison of changes in our revenue and orders (an operating measure), we also discuss these changes on an “organic” basis. Organic is calculated assuming the divestitures and/or exited businesses completed prior to July 3, 2022 were completed on January 1, 2021 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 peers. 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. About CIRCOR International, Inc. CIRCOR International is one of the world’s leading providers of mission critical flow control products and services for the Industrial and Aerospace & Defense markets. The Company has a product portfolio of market-leading brands serving its customers’ most demanding applications. CIRCOR markets its solutions directly and through various sales partners to more than 14,000 customers in approximately 100 countries. The Company has a global presence with approximately 3,100 employees and is headquartered in Burlington, Massachusetts. For more information, visit the Company’s investor relations website at http://investors.circor.com. Cautionary Note Regarding Forward-Looking Statements This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Actual results may differ materially from the expectations the Company describes in its forward-looking statements. Substantial 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. Important factors that could cause actual results to differ materially from expectations include, but are not limited to the inability to achieve expected results in pricing and cost out actions and the related impact on margins and cash flow; the effectiveness of the Company’s internal control over financial reporting and disclosure controls and procedures; the remediation of the material weaknesses in the Company’s internal controls over financial reporting or other potential weaknesses of which the Company is not currently aware or which have not been detected; the timing of the Company regaining compliance with the NYSE’s continued listing standards; the timing and outcome, if any, of the Company’s strategic alternatives review; the uncertainty associated with the current worldwide economic conditions and the continuing impact on economic and financial conditions in the United States and around the world, including as a result of COVID-19 , rising inflation, increasing interest rates, natural disasters, military conflicts, including the conflict between Russia and Ukraine, terrorist attacks and other similar matters; and the risks detailed from time to time in the Company’s periodic reports filed with the SEC. Before making any investment decisions regarding CIRCOR, the Company strongly advises you to read the section entitled “Risk Factors” in its 2021 Annual Report on Form 10-K, which can be accessed under the “Investors” link of the Company’s website at www.circor.com. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. CIRCOR INTERNATIONAL, INC CONSOLIDATED STATEMENT OF OPERATIONS (in thousands, except per share data) (unaudited) Three Months Ended Nine Months Ended October 2, 2022 As Restated October 3, 2021 October 2, 2022 As Restated October 3, 2021 Net revenues $ 195,362 $ 189,709 $ 572,392 $ 553,750 Cost of revenues 128,116 131,898 391,660 387,943 Gross profit 67,246 57,811 180,732 165,807 Selling, general and administrative expenses 50,392 53,546 160,517 169,371 Special and restructuring (recoveries) charges, net (25,702 ) 814 (22,430 ) 6,808 Operating income (loss) 42,556 3,451 42,645 (10,372 ) Other expense (income): Interest expense, net 11,821 7,997 31,481 24,325 Other (income), net (2,396 ) (256 ) (5,321 ) (3,301 ) Total other expense, net 9,425 7,741 26,160 21,024 Income (loss) from continuing operations before income taxes 33,131 (4,290 ) 16,485 (31,396 ) Provision for income taxes 1,661 850 2,536 3,206 Income (loss) from continuing operations, net of tax 31,470 (5,140 ) 13,949 (34,602 ) Income from discontinued operations, net of tax — 2,510 — 1,393 Net income (loss) $ 31,470 $ (2,630 ) $ 13,949 $ (33,209 ) Basic income (loss) per common share: Basic from continuing operations $ 1.55 $ (0.25 ) $ 0.69 $ (1.72 ) Basic from discontinued operations $ — $ 0.12 $ — $ 0.07 Net income (loss) $ 1.55 $ (0.13 ) $ 0.69 $ (1.65 ) Diluted income (loss) per common share: Diluted from continuing operations $ 1.54 $ (0.25 ) $ 0.68 $ (1.72 ) Diluted from discontinued operations $ — $ 0.12 $ — $ 0.07 Net income (loss) $ 1.54 $ (0.13 ) $ 0.68 $ (1.65 ) Weighted average number of common shares outstanding: Basic 20,364 20,257 20,345 20,181 Diluted 20,410 20,257 20,410 20,181 CIRCOR INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Nine Months Ended OPERATING ACTIVITIES October 2, 2022 As Restated October 3, 2021 Net income (loss) $ 13,949 $ (33,209 ) Income from discontinued operations, net of income taxes — 1,393 Income (loss) from continuing operations, net of tax 13,949 (34,602 ) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation 15,012 17,505 Amortization 27,704 31,929 Change in provision for bad debt expense (263 ) (383 ) Write down of inventory 1,797 1,742 Compensation expense for share-based plans 980 4,165 Loss on debt extinguishment 4,977 — Amortization of debt issuance costs 2,672 3,032 Deferred tax provision 45 823 Loss on sale of businesses — 1,308 Gain on sale of real estate (47,977 ) — Other impairment charges 8,011 — Loss on deconsolidation charges 4,675 — Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: Trade accounts receivable (1,116 ) 8,686 Inventories (28,364 ) (11,621 ) Prepaid expenses and other assets (25,387 ) (26,686 ) Accounts payable, accrued expenses and other liabilities (6,047 ) 6,439 Net cash (used in) provided by continuing operating activities (29,332 ) 2,337 Net cash used in discontinued operating activities — (2,484 ) Net cash used in operating activities (29,332 ) (147 ) INVESTING ACTIVITIES Additions to property, plant and equipment (13,291 ) (10,579 ) Proceeds from the sale of property, plant and equipment 82 2 Proceeds from the sale of real estate 54,945 — Proceeds from beneficial interest of factored receivables 3,461 1,531 Proceeds from the sale of business — 9,993 Net cash provided by investing activities 45,197 947 FINANCING ACTIVITIES Proceeds from long-term debt 180,441 145,550 Payments of long-term debt (182,166 ) (148,450 ) Net change in short-term borrowings (1,573 ) (225 ) Proceeds from the exercise of stock options — 151 Withholding tax payments on net share settlements on equity awards (1,299 ) (4,154 ) Payment of debt issuance costs (16,701 ) — Net cash used in financing activities (21,298 ) (7,128 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash (7,096 ) (2,834 ) DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH (12,529 ) (9,162 ) Cash, cash equivalents, and restricted cash at beginning of period 61,374 68,607 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD $ 48,845 $ 59,445 CIRCOR INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) (unaudited) October 2, 2022 December 31, 2021 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 47,131 $ 59,924 Trade accounts receivable, net 95,407 100,149 Inventories 137,411 123,343 Prepaid expenses and other current assets 125,409 110,749 Total Current Assets 405,358 394,165 PROPERTY, PLANT AND EQUIPMENT, NET 130,442 154,461 OTHER ASSETS: Goodwill 117,542 122,906 Intangibles, net 257,839 303,476 Lease right-of-use assets, net 40,836 21,139 Deferred income taxes 637 756 Other assets 27,323 22,395 TOTAL ASSETS $ 979,977 $ 1,019,298 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 71,601 $ 83,382 Accrued expenses and other current liabilities 73,505 81,998 Accrued compensation and benefits 31,817 26,551 Short-term borrowings and current portion of long-term debt — 1,611 Total Current Liabilities 176,923 193,542 LONG-TERM DEBT 501,754 511,694 DEFERRED INCOME TAXES 18,101 21,721 PENSION LIABILITY, NET 104,438 120,881 LONG-TERM LEASE LIABILITIES 37,155 17,715 OTHER NON-CURRENT LIABILITIES 19,524 20,029 COMMITMENTS AND CONTINGENCIES (NOTE 9 AND 10) SHAREHOLDERS’ EQUITY: Preferred stock, $0.01 par value; 1,000,000 shares authorized; no shares issued and outstanding at October 2, 2022 and December 31, 2021 — — Common stock, $0.01 par value; 29,000,000 shares authorized; 21,735,838 and 21,633,131 issued at October 2, 2022 and December 31, 2021 respectively 218 217 Additional paid-in capital 455,208 454,852 Accumulated deficit (184,132 ) (198,081 ) Common treasury stock, at cost (1,372,488 shares at October 2, 2022 and December 31, 2021) (74,472 ) (74,472 ) Accumulated other comprehensive loss, net of tax (74,740 ) (48,800 ) Total Shareholders’ Equity 122,082 133,716 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 979,977 $ 1,019,298 CIRCOR INTERNATIONAL, INC. SUMMARY OF ORDERS AND BACKLOG (in millions) (unaudited) Three Months Ended Nine Months Ended October 2, 2022 October 3, 2021 October 2, 2022 October 3, 2021 ORDERS (1) Aerospace & Defense $ 90.5 $ 54.0 $ 237.40 $ 181.3 Industrial 137.8 139.7 420.9 449.3 Total orders $ 228.3 $ 193.7 $ 658.3 $ 630.6 October 2, 2022 October 3, 2021 BACKLOG (2) Aerospace & Defense $ 214.0 $ 180.9 Industrial 282.9 254.9 Total backlog $ 496.9 $ 435.8 1. Orders do not include the foreign exchange impact due to the re-measurement of customer backlog amounts denominated in foreign currencies. Industrial includes $0.0 million and $6.6 million of orders for Pipeline Engineering for the three months ended October 2, 2022 and October 3, 2021 respectively. Industrial includes $2.3 million and $17.3 million of orders for Pipeline Engineering for the nine months ended October 2, 2022 and October 3, 2021 respectively. 2. Backlog is calculated as current period orders plus unshipped customer orders from prior periods for which revenue has not been recognized. Industrial includes $0.0 million and $0.8 million for Pipeline Engineering in 2022 and 2021 respectively. CIRCOR INTERNATIONAL, INC. SEGMENT INFORMATION (in thousands, except percentages) (unaudited) 2021 As Restated 2022 As reported 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR 3RD QTR TOTAL ORDERS Aerospace & Defense $ 72,999 $ 54,243 $ 54,028 $ 73,898 $ 255,168 $ 77,890 $ 69,053 $ 90,486 $ 237,429 Industrial 153,695 155,959 139,691 146,065 595,410 143,727 139,370 137,848 420,945 Total $ 226,693 $ 210,203 $ 193,719 $ 219,964 $ 850,578 $ 221,617 $ 208,423 $ 228,334 $ 658,374 NET REVENUES Aerospace & Defense $ 58,488 $ 60,613 $ 63,461 $ 69,979 $ 252,541 $ 63,370 $ 67,271 $ 72,219 $ 202,860 Industrial 117,963 126,977 126,248 134,938 506,126 122,285 124,105 123,143 369,532 Total $ 176,451 $ 187,590 $ 189,709 $ 204,917 $ 758,667 $ 185,655 $ 191,376 $ 195,362 $ 572,392 SEGMENT OPERATING INCOME Aerospace & Defense $ 9,988 $ 11,741 $ 15,927 $ 18,416 $ 56,073 $ 11,320 $ 13,566 $ 16,891 $ 41,777 Industrial 5,834 7,237 7,124 8,700 28,896 6,857 8,484 15,717 31,059 Corporate expenses (9,035 ) (7,950 ) (7,017 ) (6,636 ) (30,638 ) (7,770 ) (5,485 ) (5,301 ) (18,557 ) Total $ 6,787 $ 11,028 $ 16,034 $ 20,480 $ 54,331 $ 10,407 $ 16,565 $ 27,307 $ 54,279 SEGMENT OPERATING MARGIN % Aerospace & Defense 17.1 % 19.4 % 25.1 % 26.3 % 22.2 % 17.9 % 20.2 % 23.4 % 20.6 % Industrial 4.9 % 5.7 % 5.6 % 6.4 % 5.7 % 5.6 % 6.8 % 12.8 % 8.4 % Total 3.8 % 5.9 % 8.5 % 10.0 % 7.2 % 5.6 % 8.7 % 14.0 % 9.5 % 2021 2022 Pipeline Engineering1 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR 3RD QTR TOTAL ORDERS - Industrial $ 5,531 $ 5,192 $ 6,575 $ 7,121 $ 24,419 $ 2,260 $ — $ — $ 2,260 NET REVENUES - Industrial $ 2,994 $ 3,124 $ 3,236 $ 5,248 $ 14,602 $ 3,012 $ 218 $ 8 $ 3,238 SEGMENT OP. INC. -Industrial $ (2,479 ) $ (1,754 ) $ (2,470 ) $ (3,191 ) $ (9,893 ) $ (3,190 ) $ (1,074 ) $ (150 ) $ (4,414 ) Segment Operating Margin % (82.8 )% (56.1 )% (76.3 )% (60.8 )% (67.8 )% (105.9 )% (492.7 )% (1875.0 )% (136.3 )% Quantifies the impact of the Pipeline Engineering business on the Industrial Segment. CIRCOR INTERNATIONAL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES (in thousands, except percentages) (unaudited) 2021 As Restated 2022 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR 3RD QTR TOTAL Net Cash (Used In) Provided By Operating Activities $ (19,210 ) $ 8,866 $ 10,197 $ 10,595 $ 10,448 $ (15,924 ) $ (3,593 ) $ (9,815 ) $ (29,332 ) LESS Capital expenditures, net of sale proceeds1 3,392 2,644 4,541 4,168 14,745 3,592 5,461 4,156 13,209 ADJUSTED FREE CASH FLOW $ (22,602 ) $ 6,222 $ 5,656 $ 6,427 $ (4,297 ) $ (19,516 ) $ (9,054 ) $ (13,971 ) $ (42,541 ) Gross Debt $ 538,541 $ 524,391 $ 518,464 $ 526,311 $ 526,311 $ 547,681 $ 543,100 $ 522,975 $ 522,975 Less: Cash & Cash equivalents 64,837 58,862 58,013 59,924 59,924 61,122 55,238 47,131 47,131 GROSS DEBT, NET OF CASH $ 473,704 $ 465,529 $ 460,451 $ 466,387 $ 466,387 $ 486,559 $ 487,862 $ 475,844 $ 475,844 TOTAL SHAREHOLDERS' EQUITY $ 138,663 $ 122,185 $ 121,256 $ 133,716 $ 133,716 $ 110,321 $ 103,663 $ 122,082 $ 122,082 GROSS DEBT AS % OF EQUITY 388 % 429 % 428 % 394 % 394 % 496 % 524 % 428 % 428 % GROSS DEBT, NET OF CASH AS % OF EQUITY 342 % 381 % 380 % 349 % 349 % 441 % 471 % 390 % 390 % Includes capital expenditures, net of proceeds of asset sales from GAAP operating cash flow. CIRCOR INTERNATIONAL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES (in thousands, except percentages) (unaudited) 2021 As Restated 2022 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR 3RD QTR TOTAL NET (LOSS) INCOME $ (11,796 ) $ (18,784 ) $ (2,630 ) $ (28,427 ) $ (61,638 ) $ (21,481 ) $ 3,960 $ 31,470 $ 13,949 LESS: Restructuring related inventory charges (recoveries), net — 958 (60 ) (299 ) 599 2,757 — — 2,757 Restructuring charges (recoveries), net 2,060 2,281 (312 ) 205 4,234 6,447 4,695 (173 ) 10,969 Acquisition amortization 10,487 10,498 10,417 10,369 41,772 9,391 9,178 9,118 27,687 Acquisition depreciation 2,375 1,327 1,412 1,397 6,511 1,045 1,239 1,335 3,620 Special (recoveries) charges, net (2,870 ) 4,523 1,126 17,259 20,038 2,556 (10,425 ) (25,529 ) (33,399 ) Goodwill Impairment charge — — — 10,500 10,500 — — — — Income tax impact (44 ) 2,425 (596 ) (1,622 ) 163 384 (2,207 ) (2,066 ) (3,889 ) Net loss (income) from discontinued operations 239 878 (2,510 ) (13 ) (1,406 ) — — — — ADJUSTED NET INCOME $ 451 $ 4,106 $ 6,847 $ 9,369 $ 20,773 $ 1,099 $ 6,440 $ 14,155 $ 21,694 (LOSS) EARNINGS PER COMMON SHARE (Diluted) $ (0.59 ) $ (0.93 ) $ (0.13 ) $ (1.40 ) $ (3.05 ) $ (1.06 ) $ 0.19 $ 1.54 $ 0.68 LESS: Restructuring related inventory charges — 0.05 — (0.01 ) 0.03 0.14 — — 0.14 Restructuring charges (recoveries), net 0.10 0.11 (0.02 ) 0.01 0.21 0.32 0.23 (0.01 ) 0.54 Acquisition amortization 0.52 0.52 0.51 0.51 2.07 0.46 0.45 0.45 1.36 Acquisition depreciation 0.12 0.07 0.07 0.07 0.32 0.05 0.06 0.07 0.18 Special (recoveries) charges, net (0.14 ) 0.22 0.06 0.85 0.99 0.13 (0.51 ) (1.25 ) (1.64 ) Impairment charge — — — 0.52 0.52 — — — — Income tax impact — 0.12 (0.03 ) (0.08 ) 0.01 0.02 (0.11 ) (0.10 ) (0.19 ) (Loss) earnings) per share from discontinued operations 0.01 0.04 (0.12 ) — (0.07 ) — — — — ADJUSTED EARNINGS PER SHARE (Diluted) $ 0.02 $ 0.20 $ 0.34 $ 0.46 $ 1.03 $ 0.05 $ 0.32 $ 0.69 $ 1.06 CIRCOR INTERNATIONAL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES (in thousands, except percentages) (unaudited) 2021 As Restated 2022 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR 3RD QTR TOTAL NET (LOSS) INCOME $ (11,796 ) $ (18,784 ) $ (2,629 ) $ (28,426 ) $ (61,635 ) $ (21,481 ) $ 3,960 $ 31,470 $ 13,949 LESS: Interest expense, net 8,369 7,958 7,997 8,040 32,365 9,456 10,203 11,821 31,480 Depreciation 6,509 5,460 5,536 5,348 22,854 5,000 5,056 4,956 15,012 Amortization 10,696 10,657 10,576 10,375 42,304 9,397 9,183 9,124 27,704 Provision for income taxes (297 ) 2,659 850 1,970 5,182 1,523 (647 ) 1,661 2,536 Loss (income) from discontinued operations 239 878 (2,510 ) (13 ) (1,406 ) — — — — EBITDA $ 13,720 $ 8,828 $ 19,820 $ (2,706 ) $ 39,664 $ 3,895 $ 27,755 $ 59,032 $ 90,681 LESS: Restructuring related inventory charges (recoveries) — 958 (60 ) (299 ) 599 2,757 — — 2,757 Restructuring charges (recoveries), net 2,060 2,281 (312 ) 205 4,234 6,447 4,695 (173 ) 10,969 Special (recoveries) charges, net (2,870 ) 4,523 1,126 17,259 20,038 2,556 (10,425 ) (25,529 ) (33,399 ) Goodwill impairment charge — — — 10,500 10,500 — — — — ADJUSTED EBITDA $ 12,910 $ 16,590 $ 20,574 $ 24,959 $ 75,035 $ 15,655 $ 22,025 $ 33,330 $ 71,008 CIRCOR INTERNATIONAL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES (in thousands, except percentages) (unaudited) 2021 As Restated 2022 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR 3RD QTR TOTAL OPERATING (LOSS) INCOME $ (5,266 ) $ (8,557 ) $ 3,451 $ (18,952 ) $ (29,323 ) $ (11,789 ) $ 11,878 $ 42,556 $ 42,645 LESS: Restructuring related inventory charges (recoveries) — 958 (60 ) (299 ) 599 2,757 — — 2,757 Restructuring charges (recoveries), net 2,060 2,281 (312 ) 205 4,234 6,447 4,695 (173 ) 10,969 Acquisition amortization 10,487 10,498 10,417 10,369 41,772 9,391 9,178 9,118 27,687 Acquisition depreciation 2,375 1,327 1,412 1,397 6,511 1,045 1,239 1,335 3,620 Special (recoveries) charges, net (2,870 ) 4,523 1,126 17,259 20,038 2,556 (10,425 ) (25,529 ) (33,399 ) Goodwill impairment charge — — — 10,500 10,500 — — — — ADJUSTED OPERATING INCOME $ 6,787 $ 11,029 $ 16,034 $ 20,479 $ 54,331 $ 10,407 $ 16,565 $ 27,307 $ 54,279 OPERATING MARGIN (3.0 )% (4.6 )% 1.8 % (9.2 )% (3.9 )% (6.3 )% 6.2 % 21.8 % 7.5 % LESS: Restructuring related inventory charges (recoveries) 0.0 % 0.5 % 0.0 % (0.1 )% 0.1 % 1.5 % 0.0 % 0.0 % 0.5 % Restructuring charges (recoveries), net 1.2 % 1.2 % (0.2 )% 0.1 % 0.6 % 3.5 % 2.5 % (0.1 )% 1.9 % Acquisition amortization 5.9 % 5.6 % 5.5 % 5.1 % 5.5 % 5.1 % 4.8 % 4.7 % 4.8 % Acquisition depreciation 1.3 % 0.7 % 0.7 % 0.7 % 0.9 % 0.6 % 0.6 % 0.7 % 0.6 % Special (recoveries) charges, net (1.6 )% 2.4 % 0.6 % 8.4 % 2.6 % 1.4 % (5.4 )% (13.1 )% (5.8 )% Goodwill impairment charge 0.0 % 0.0 % 0.0 % 5.1 % 1.4 % 0.0 % 0.0 % 0.0 % 0.0 % ADJUSTED OPERATING MARGIN 3.8 % 5.9 % 8.5 % 10.0 % 7.2 % 5.6 % 8.7 % 14.0 % 9.5 % CIRCOR INTERNATIONAL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES (in thousands, except percentages) (unaudited) CIRCOR Aerospace & Defense Industrial 3Q 22 3Q 21 Change 3Q 22 3Q 21 Change 3Q 22 3Q 21 Change Reported Orders 228,334 193,719 18 % 90,486 54,028 67 % 137,848 139,691 (1 )% FX 16,620 3,756 12,864 Organic 244,954 193,719 26 % 94,242 54,028 74 % 150,712 139,691 8 % CIRCOR Aerospace & Defense Industrial 3Q 22 3Q 21 Change 3Q 22 3Q 21 Change 3Q 22 3Q 21 Change Reported Revenue 195,362 189,709 3 % 72,219 63,461 14 % 123,143 126,248 (2 )% FX 13,680 2,665 11,015 Organic 209,042 189,709 10 % 74,884 63,461 18 % 134,158 126,248 6 % Note regarding financial statements: Financial amounts are computed independently each quarter; therefore, the sum of the quarterly amounts may not equal the total amount for the respective year due to rounding. View source version on businesswire.com: https://www.businesswire.com/news/home/20221111005548/en/