CIRCOR Reports Financial Results for Fourth Quarter and Year Ended December 31, 2022

Q4 GAAP EPS of $0.27, Up 119% YoY; Adjusted EPS of $0.77, Up 67% YoY
Q4 GAAP Operating Income of $20.2 Million, Up 206% YoY; Adjusted Operating Income of $33.2 Million, Up 62% YoY
Q4 Orders up 13% Reported and 19% Organically YoY
President and CEO Tony Najjar Appointed to Board of Directors
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 fourth quarter and year ended December 31, 2022.

Q4 2022 Overview (compared with Q4 2021):

Revenue of $215 million up 5% reported and 11% organically
- Aerospace & Defense revenue of $80 million, up 14% reported and 18% organically
- Industrial revenue of $135 million, flat reported and up 7% organically
Orders of $249 million, up 13% and 19% organically
- Aerospace & Defense orders of $71 million, down 4% and 1% organically
- Industrial orders of $178 million, up 22% and 29% organically
GAAP operating income of $20.2 million, up 206%
GAAP operating margin of 9.4%, up 1860 bps
Adjusted operating income $33.2 million, up 62%
Adjusted operating margin of 15.5%, up 550 bps

FY 2022 Overview (compared with FY 2021):

Revenue of $787 million up 4% reported and 9% organically
- Aerospace & Defense revenue of $283 million, up 12% reported and 15% organically
- Industrial revenue of $504 million, flat reported and up 7% organically
Orders of $907 million, up 7% and 12% organically
- Aerospace & Defense orders of $308 million, up 21% and 24% organically
- Industrial orders of $599 million, up 1% and 7% organically
Backlog of $543 million at December 31, up 22% driven by strong demand in both Aerospace & Defense and Industrial segments
GAAP operating income of $62.8 million, up 314%
GAAP operating margin of 8.0%, up 1190 bps
Adjusted operating income $87.5 million, up 61%
Adjusted operating margin of 11.1%, up 390 bps

President and CEO Tony Najjar said, “Our strong fourth-quarter performance capped a solid year for CIRCOR, reflecting disciplined strategic execution by our entire team. For the fourth quarter, organic orders increased 19% driven by our Industrial segment, which benefited from aftermarket growth in core Industrial and a positive downstream market. For the full year 2022, we delivered 12% organic orders growth driven by aftermarket strength in both segments, commercial aerospace recovery, new products for defense and hydrogen applications, downstream, and value pricing. Our backlog at year end was up 22% to a record $543 million.”

Mr. Najjar continued, “Our value pricing initiatives and simplification actions continued to serve as growth and margin expansion levers during the quarter. We delivered a 62% increase in adjusted operating income and a 550 basis-point improvement in adjusted operating margin during Q4, more than offsetting the ongoing effects of inflation and supply chain constraints. The Q4 results represent another step change in margin performance for CIRCOR driven by the significant margin expansion in our Industrial segment and continued strong performance in our A&D segment. With the actions taken, and continued operating discipline and focus on our customers, we believe that we have positioned both segments to deliver sustained growth and shareholder value.”

Board Appointment

President and CEO Tony Najjar was appointed to the Company’s Board of Directors effective March 20, 2023. He is the seventh member of the Board, which includes six independent directors.

Strategic Review

Related to the Company’s previously announced review of strategic alternatives, CIRCOR’s Board of Directors, supported by external advisors and the management team, continues to progress with the review. Through its external advisors, the Board is in dialogue with a number of parties that have expressed interest in acquiring all or parts of the Company. The Company has not set a timetable for completion of the review, may suspend or terminate the review at any time and does not intend to make further announcements regarding the process unless and until the Board of Directors approves a course of action for which further disclosure is required or appropriate. The exploration of strategic alternatives may not result in any transaction or strategic change.

Conference Call Information

CIRCOR International will hold a conference call to review its fourth-quarter and full-year 2022 financial results at 9:00 a.m. ET today, March 15, 2023. The call may also include discussion of Company developments, and forward-looking and other material information about business and financial matters. 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)

Q4 2022

Q4 2021

Change

FY 2022

FY 2021

Change

Revenue1

214.5

204.9

786.9

758.7

GAAP operating income (loss)

20.2

(19.0

)

206

62.8

(29.3

)

314

Adjusted operating income2

33.2

20.5

87.5

54.3

GAAP operating margin

9.4

(9.2

1860 bps

8.0

(3.9

1190 bps

Adjusted operating margin3

15.5

10.0

550 bps

11.1

7.2

390 bps

GAAP income (loss) per share

0.27

(1.40

)

119

0.95

(3.05

)

131

Adjusted earnings per share (diluted)4

0.77

0.46

1.83

1.03

Operating cash flow

28.5

10.6

169

(0.8

)

10.4

-108

Adjusted free cash flow5

19.8

6.4

209

(22.7

)

(4.3

)

-428

Orders6

248.9

220.0

907.2

850.6

Segment Results

(unaudited)

($ in millions)

Q4 2022

Q4 2021

Change

FY 2022

FY 2021

Change

Aerospace & Defense

Revenue

79.9

70.0

282.7

252.5

Segment operating income

21.8

18.4

63.6

56.1

Segment operating margin

27.3

26.3

100 bps

22.5

22.2

30 bps

Orders6

70.8

73.9

308.2

255.2

Industrial

Revenue1

134.7

134.9

—

504.2

506.1

—

Segment operating income2

18.2

8.7

109

49.3

28.9

Segment operating margin3

13.5

6.4

710 bps

9.8

5.7

410 bps

Orders6

178.1

146.1

599.0

595.4

Consolidated and Industrial segment revenues for Q4 2022 and Q4 2021 included $0.0 million and $5.2 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 the Q4, 2022 and Q4 2021 included $0.0 million and $(3.2) million, respectively, relating to our Pipeline Engineering business.
Adjusted operating margin 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. 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 margin for Q4 2022 and Q4 2021 included (61)% and 236%, respectively, relating to our Pipeline Engineering business.
Adjusted earnings per share (diluted) 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. 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 earnings per share and our segment results for Q4 2022 exclude net loss from non-cash acquisition-related intangible amortization and special and restructuring charges of $13.1 million, consisting of (i) $9.6 million for non-cash acquisition-related intangible amortization and depreciation expense; (ii) $0.5 million of costs due to the investigation into the accounting irregularities of our Pipeline Engineering business and incremental professional services incurred due to the restatement; (iii) $1.8 million of special charges related to the evaluation of strategic alternatives for the Company; (iv) incremental loss allowance related to a contract assumed as part of the Fluid Handling acquisition of $0.5 million ; and (v) other special and restructuring charges net of $0.7 million. Adjusted consolidated and segment results for Q4 2021 exclude net income from discontinued operations and net loss from non-cash acquisition-related intangible amortization, special and restructuring charges, and goodwill impairment charge totaling $39.4 million. These charges include: (i) $11.8 million for non-cash acquisition-related intangible amortization and depreciation expense; (ii) $8.7 million of costs related to debt refinancing; (iii) $7.9 million related to incremental loss allowance for a receivable, contract asset and sub-contractor claims for a contract assumed as part of the Fluid Handling acquisition; (iv) $0.5 million other special and restructuring recoveries; and (v) $10.5 million goodwill impairment charge related to our Industrial segment.
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. 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. 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.
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 Q4 2022 and Q4 2021 included $0.0 million and $7.1 million, respectively, relating to our Pipeline Engineering business.

Use of Non-GAAP Financial Measures

In this press release, the Company uses the non-GAAP financial measures organic revenue, adjusted net income, adjusted EBITDA, adjusted operating income, adjusted operating margin, adjusted earnings per share, adjusted free cash flow, gross debt, net of cash and net debt1. 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 December 31, 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.

1 See comment to investor presentation regarding consistency in use of terms "net debt" vs. "gross debt, net of cash"

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 3,060 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. All statements that address expectations or projections about the future, including with respect to the Company’s expectations for its performance in 2023 or relating to the Company’s strategic review are forward-looking statements. 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 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. The Company has provided additional information about the risks facing the business in its annual report on Form 10-K and subsequent periodic and current reports most recently filed with the Securities and Exchange Commission. These forward-looking statements are made as of the date of this press release, and 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, except as required by law.

CIRCOR INTERNATIONAL, INC

CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands, except per share data) (unaudited)

Three Months Ended

Twelve Months Ended

December 31, 2022

December 31, 2021

December 31, 2022

December 31, 2021

Net revenues

214,527

204,917

786,919

758,667

Cost of revenues

138,172

140,348

529,832

528,291

Gross profit

76,355

64,569

257,087

230,376

Selling, general and administrative expenses

52,777

55,556

213,294

224,927

Goodwill Impairment charges

—

10,500

—

10,500

Special and restructuring charges (recoveries), net

3,417

17,464

(19,013

)

24,272

Operating income (loss)

20,161

(18,951

)

62,806

(29,323

)

Other expense (income):

Interest expense, net

13,405

8,040

44,886

32,365

Other income, net

(426

)

(525

)

(5,747

)

(3,826

)

Total other expense, net

12,979

7,515

39,139

28,539

Income (loss) from continuing operations before income taxes

7,182

(26,466

)

23,667

(57,862

)

Provision for income taxes

1,743

1,976

4,279

5,182

Income (loss) from continuing operations, net of tax

5,439

(28,442

)

19,388

(63,044

)

Income from discontinued operations, net of tax

—

1,406

Net income (loss)

5,439

(28,442

)

19,388

(61,638

)

Basic income (loss) per common share:

Basic from continuing operations

0.27

(1.40

)

0.95

(3.12

)

Basic from discontinued operations

—

0.07

Net income (loss)

0.27

(1.40

)

0.95

(3.05

)

Diluted income (loss) per common share:

Diluted from continuing operations

0.27

(1.40

)

0.95

(3.12

)

Diluted from discontinued operations

—

0.07

Net income (loss)

0.27

(1.40

)

0.95

(3.05

)

Weighted average number of common shares outstanding:

Basic

20,366

20,261

20,350

20,201

Diluted

20,480

20,261

20,427

20,201

CIRCOR INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands) (unaudited)

Twelve Months Ended

December 31, 2022

December 31, 2021

OPERATING ACTIVITIES

Net Income (loss)

19,388

(61,638

)

Income (loss) from discontinued operations, net of income taxes

—

1,406

Income (Loss) from continuing operations, net of tax

19,388

(63,044

)

Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:

Depreciation

19,691

22,854

Amortization

36,360

42,304

Change in provision for bad debt expense

(813

)

1,213

Write down of inventory

2,606

3,364

Compensation expense of share-based plans

1,880

5,252

Loss on debt extinguishment

4,977

8,693

Amortization of debt issuance costs

3,645

3,996

Deferred income tax (benefit) provision

(3,709

)

(2,992

)

Goodwill impairment charges

—

10,500

Other impairment charges

8,011

—

Loss (gain) on sale of businesses

—

1,919

Gain on sale of real estate

(47,977

)

—

Loss on deconsolidation charges

4,675

—

Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:

Trade accounts receivable

(9,649

)

(6,308

)

Inventories

(26,299

)

(6,974

)

Prepaid expenses and other assets

(22,218

)

(23,665

)

Accounts payable, accrued expenses and other liabilities

8,611

15,820

Net cash (used in) provided by continuing operations

(821

)

12,932

Net cash used in discontinued operations

—

(2,484

)

Net cash (used in) provided by operating activities

(821

)

10,448

INVESTING ACTIVITIES

Additions of property, plant and equipment

(21,988

)

(14,747

)

Proceeds from the sale of property, plant and equipment

104

Proceeds from beneficial interest of factored receivables

4,484

2,047

Proceeds from sale of real estate

54,945

—

Proceeds from sale of business

—

9,993

Net cash provided by (used in) investing activities

37,545

(2,705

)

FINANCING ACTIVITIES

Proceeds from long-term debt

219,266

734,612

Payments of long-term debt

(227,041

)

(729,551

)

Net change in short-term borrowings

(1,573

)

(374

)

Equipment financing

894

—

Proceeds from the exercise of stock options

—

151

Withholding tax payments on net share settlements on equity rewards

(1,311

)

(4,209

)

Payment of debt issuance costs

(16,701

)

(12,157

)

Net cash used in financing activities

(26,466

)

(11,528

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(4,908

)

(3,448

)

INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

5,350

(7,233

)

Cash, cash equivalents and restricted cash at beginning of year

61,374

68,607

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF YEAR

66,724

61,374

CIRCOR INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data) (unaudited)

December 31,

2022

2021

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

64,275

59,924

Trade accounts receivable, net

109,754

100,149

Inventories

139,786

123,343

Prepaid expenses and other current assets

117,766

110,749

Total Current Assets

431,581

394,165

PROPERTY, PLANT AND EQUIPMENT, NET

141,141

154,461

OTHER ASSETS:

Goodwill

119,847

122,906

Intangibles, net

256,338

303,476

Deferred income taxes

512

756

Lease right-of-use assets, net

42,491

21,139

Other assets

20,777

22,395

TOTAL ASSETS

1,012,687

1,019,298

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable

78,778

83,382

Accrued expenses and other current liabilities

84,510

81,998

Accrued compensation and benefits

30,817

26,551

Short-term borrowings and current portion of long-term debt

—

1,611

Total Current Liabilities

194,105

193,542

Long-term debt

496,534

511,694

Deferred income taxes

18,238

21,721

Pension liability, net

85,968

120,881

Long-term lease liabilities

38,480

17,715

OTHER NON-CURRENT LIABILITIES

20,316

20,029

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS’ EQUITY:

Preferred stock, $0.01 par value; 1,000,000 shares authorized; — shares issued and outstanding

—

Common stock, $0.01 par value; 29,000,000 shares authorized; 21,736,911 and 21,633,131 shares issued at December 31, 2022 and 2021, respectively

218

217

Additional paid-in capital

456,102

454,852

Accumulated deficit

(178,693

)

(198,081

)

Common treasury stock, at cost (1,372,488 shares at December 31, 2022 and 2021)

(74,472

)

(74,472

)

Accumulated other comprehensive loss

(44,109

)

(48,800

)

Total Shareholders’ Equity

159,046

133,716

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

1,012,687

1,019,298

CIRCOR INTERNATIONAL, INC.

SUMMARY OF ORDERS AND BACKLOG

(in millions) (unaudited)

Three Months Ended

Twelve Months Ended

December 31, 2022

December 31, 2021

December 31, 2022

December 31, 2021

ORDERS (1)

Aerospace & Defense

70.8

73.9

308.2

255.2

Industrial

178.1

146.1

599.0

595.4

Total orders

248.9

220.0

907.2

850.6

December 31, 2022

December 31, 2021

BACKLOG (2)

Aerospace & Defense

208.3

185.3

Industrial

334.8

258.4

Total backlog

543.1

443.7

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 $7.1 million orders in Pipeline Engineering for the three months ended December 31, 2022 and December 31, 2021 respectively. Industrial includes $2.3 million and $24.4 million orders for Pipeline Engineering for the twelve months ended December 31, 2022 and December 31, 2021 respectively.

2. Backlog includes unshipped customer orders for which revenue has not been recognized. Industrial includes $1.2 million Pipeline Engineering for 2021.

CIRCOR INTERNATIONAL, INC.

SEGMENT INFORMATION

(in thousands, except percentages) (unaudited

2021

2022

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

ORDERS

Aerospace & Defense

72,999

54,243

54,028

73,898

255,168

77,890

69,053

90,486

70,778

308,207

Industrial

153,695

155,959

139,691

146,065

595,410

143,727

139,370

137,848

178,069

599,014

Total

226,693

210,203

193,719

219,964

850,578

221,617

208,423

228,334

248,847

907,221

NET REVENUES

Aerospace & Defense

58,488

60,613

63,461

69,979

252,541

63,370

67,271

72,219

79,855

282,715

Industrial

117,963

126,977

126,248

134,938

506,126

122,285

124,105

123,143

134,672

504,204

Total

176,451

187,590

189,709

204,917

758,667

185,655

191,376

195,362

214,527

786,919

SEGMENT OPERATING INCOME

Aerospace & Defense

9,988

11,741

15,927

18,416

56,073

11,320

13,566

16,891

21,807

63,584

Industrial

5,834

7,237

7,124

8,700

28,896

6,857

8,484

15,717

18,244

49,302

Corporate expenses

(9,035

)

(7,950

)

(7,017

)

(6,636

)

(30,638

)

(7,770

)

(5,485

)

(5,301

)

(6,828

)

(25,384

)

Total

6,787

11,028

16,034

20,480

54,331

10,407

16,565

27,307

33,223

87,502

SEGMENT OPERATING MARGIN %

Aerospace & Defense

17.1

19.4

25.1

26.3

22.2

17.9

20.2

23.4

27.3

22.5

Industrial

4.9

5.7

5.6

6.4

5.7

5.6

6.8

12.8

13.5

9.8

Total

3.8

5.9

8.5

10.0

7.2

5.6

8.7

14.0

15.5

11.1

2021

2022

Pipeline Engineering1

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

2ND QTR

3RD QTR

4TH 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

3,249

SEGMENT OP. INC. -Industrial

(2,479

)

(1,754

)

(2,470

)

(3,191

)

(9,893

)

(3,190

)

(1,074

)

(150

)

(4,388

)

Segment Operating Margin %

(82.8

(56.1

(76.3

(60.8

(67.8

(105.9

(492.7

(1875.0

236.4

(135.1

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

2022

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

2ND QTR

3RD QTR

4TH 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

)

28,511

(821

)

LESS

Capital expenditures, net of sale proceeds1

3,392

2,644

4,541

4,168

14,745

3,592

5,461

4,156

8,675

21,884

ADJUSTED FREE CASH FLOW

(22,602

)

6,222

5,656

6,427

(4,297

)

(19,516

)

(9,054

)

(13,971

)

19,836

(22,705

)

Gross Debt

538,541

524,391

518,464

526,311

547,681

543,100

522,975

516,925

Less: Cash & Cash equivalents

64,837

58,862

58,013

59,924

61,122

55,238

47,131

64,275

GROSS DEBT, NET OF CASH

473,704

465,529

460,451

466,387

486,559

487,862

475,844

452,650

TOTAL SHAREHOLDERS' EQUITY

138,663

122,185

121,256

133,716

110,321

103,663

122,082

159,046

GROSS DEBT AS % OF EQUITY

388

429

428

394

496

524

428

325

GROSS DEBT, NET OF CASH AS % OF EQUITY

342

381

380

349

441

471

390

285

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

2022

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

NET (LOSS) INCOME

(11,796

)

(18,784

)

(2,629

)

(28,427

)

(61,638

)

(21,481

)

3,960

31,470

5,439

19,388

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

)

11,066

Acquisition amortization

10,487

10,498

10,417

10,369

41,772

9,391

9,178

9,118

8,651

36,338

Acquisition depreciation

2,375

1,327

1,412

1,397

6,511

1,045

1,239

1,335

995

4,614

Special (recoveries) charges, net

(2,870

)

4,523

1,126

17,259

20,038

2,556

(10,425

)

(25,529

)

3,319

(30,079

)

Goodwill Impairment charge

—

10,500

—

Income tax impact

(44

)

2,425

(596

)

(1,622

)

163

384

(2,207

)

(2,066

)

(2,739

)

(6,628

)

Net loss (income) from discontinued operations

239

878

(2,510

)

(13

)

(1,406

)

—

ADJUSTED NET INCOME

451

4,106

6,848

9,369

20,773

1,099

6,440

14,155

15,762

37,456

(LOSS) EARNINGS PER COMMON SHARE (Diluted)

(0.59

)

(0.93

)

(0.13

)

(1.40

)

(3.05

)

(1.06

)

0.19

1.54

0.27

0.95

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

0.51

2.07

0.46

0.45

0.42

1.78

Acquisition depreciation

0.12

0.07

0.32

0.05

0.06

0.07

0.05

0.23

Special (recoveries) charges, net

(0.14

)

0.22

0.06

0.85

0.99

0.13

(0.51

)

(1.25

)

0.16

(1.47

)

Impairment charge

—

0.52

—

Income tax impact

—

0.12

(0.03

)

(0.08

)

0.01

0.02

(0.11

)

(0.10

)

(0.13

)

(0.32

)

(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

0.77

1.83

CIRCOR INTERNATIONAL, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES

(in thousands, except percentages) (unaudited)

2021

2022

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

NET INCOME (LOSS)

(11,796

)

(18,784

)

(2,629

)

(28,427

)

(61,638

)

(21,481

)

3,960

31,470

5,439

19,388

LESS:

Interest expense, net

8,369

7,958

7,997

8,040

32,365

9,456

10,203

11,821

13,405

44,886

Depreciation

6,509

5,460

5,536

5,348

22,854

5,000

5,056

4,956

4,679

19,691

Amortization

10,696

10,657

10,576

10,375

42,304

9,397

9,183

9,124

8,656

36,360

Provision for income taxes

(297

)

2,659

850

1,970

5,182

1,523

(647

)

1,661

1,742

4,279

Loss (income) from discontinued operations

239

878

(2,510

)

(13

)

(1,406

)

—

EBITDA

13,720

8,828

19,820

(2,707

)

39,661

3,895

27,755

59,032

33,921

124,604

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

)

11,066

Special (recoveries) charges, net

(2,870

)

4,523

1,126

17,259

20,038

2,556

(10,425

)

(25,529

)

3,319

(30,079

)

Goodwill impairment charge

—

10,500

—

ADJUSTED EBITDA

12,910

16,590

20,574

24,958

75,032

15,655

22,025

33,330

37,337

108,348

CIRCOR INTERNATIONAL, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES

(in thousands, except percentages) (unaudited)

2021

2022

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

OPERATING (LOSS) INCOME

(5,266

)

(8,557

)

3,451

(18,952

)

(29,323

)

(11,789

)

11,878

42,556

20,161

62,806

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

)

11,066

Acquisition amortization

10,487

10,498

10,417

10,370

41,772

9,391

9,178

9,118

8,651

36,338

Acquisition depreciation

2,375

1,326

1,412

1,397

6,511

1,045

1,239

1,335

995

4,614

Special (recoveries) charges, net

(2,870

)

4,523

1,126

17,259

20,038

2,556

(10,425

)

(25,529

)

3,319

(30,079

)

Goodwill impairment charge

—

10,500

—

ADJUSTED OPERATING INCOME

6,787

11,028

16,034

20,480

54,331

10,407

16,565

27,307

33,223

87,502

OPERATING MARGIN

(3.0

(4.6

1.8

(9.2

(3.9

(6.3

6.2

21.8

9.4

8.0

LESS:

Restructuring related inventory charges (recoveries)

0.0

0.5

0.0

(0.1

0.1

1.5

0.0

0.4

Restructuring charges (recoveries), net

1.2

(0.2

0.1

0.6

3.5

2.5

(0.1

0.0

1.4

Acquisition amortization

5.9

5.6

5.5

5.1

5.5

5.1

4.8

4.7

4.0

4.6

Acquisition depreciation

1.3

0.7

0.9

0.6

0.7

0.5

0.6

Special (recoveries) charges, net

(1.6

2.4

0.6

8.4

2.6

1.4

(5.4

(13.1

1.5

(3.8

Goodwill impairment charge

0.0

5.1

1.4

0.0

ADJUSTED OPERATING MARGIN

3.8

5.9

8.5

10.0

7.2

5.6

8.7

14.0

15.5

11.1

CIRCOR INTERNATIONAL, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES

(in thousands, except percentages) (unaudited)

Q4'22 Organic Orders and Revenue

CIRCOR

Aerospace & Defense

Industrial

4Q 22

4Q 21

Variance

4Q 22

4Q 21

Variance

4Q 22

4Q 21

Variance

Orders

248,847

219,964

70,778

73,898

178,069

146,065

Divestitures

—

13,096

2,263

10,833

Organic

261,943

219,964

73,041

73,898

188,902

146,065

CIRCOR

Aerospace & Defense

Industrial

4Q 22

4Q 21

Variance

4Q 22

4Q 21

Variance

4Q 22

4Q 21

Variance

Revenue

214,527

204,917

79,855

69,979

134,672

134,938

—

Divestitures

—

12,360

2,516

9,844

Organic

226,887

204,917

82,371

69,979

144,516

134,938

FY'22 Organic Orders and Revenue

CIRCOR

Aerospace & Defense

Industrial

FY 22

FY 21

Variance

FY 22

FY 21

Variance

FY 22

FY 21

Variance

Orders

907,221

850,578

308,207

255,168

599,014

595,410

Divestitures

—

49,518

9,241

40,277

Organic

956,739

850,578

317,448

255,168

639,291

595,410

CIRCOR

Aerospace & Defense

Industrial

FY 22

FY 21

Variance

FY 22

FY 21

Variance

FY 22

FY 21

Variance

Revenue

786,919

758,667

282,715

252,541

504,204

506,126

—

Divestitures

—

42,923

8,037

34,886

Organic

829,842

758,667

290,752

252,541

539,090

506,126

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/20230314006034/en/

Scott Solomon Senior Vice President Sharon Merrill Associates, Inc. (857) 383-2409

CIRCOR (NYSE:CIR)
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