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CIRCOR Reports Fourth-Quarter and Year-End 2018 Financial Results

BURLINGTON, Mass.–(BUSINESS WIRE)–CIRCOR International, Inc. (NYSE: CIR), a leading provider of flow
control solutions and other highly engineered products for the
Industrial, Energy and Aerospace & Defense markets, today announced
financial results for the fourth quarter and full year ended December
31, 2018. Results include the acquisition of the Colfax Fluid Handling
business, which CIRCOR acquired in December 2017.

Fourth-Quarter 2018 Highlights

  • Orders of $297 million, up 37% on a reported basis and up 2% on a
    pro forma organic basis
  • Revenue of $301 million, up 47% on a reported basis and up 4% on a
    pro forma organic basis
  • GAAP Operating Margin of 2.1%, up 460 bps
  • Adjusted Operating Margin of 9.1%, up 320 bps on a pro forma basis
  • GAAP Loss per Share of ($1.06); Adjusted Earnings per Share of $0.62
  • Operating Cash Flow of $26 million
  • Debt pay down of $25 million

“2018 was a transformational year for CIRCOR as our team integrated the
largest deal in the Company’s history,” said Scott Buckhout, President
and Chief Executive Officer. “As we begin the second year of
integration, our synergy plan is ahead of schedule, with committed
run-rate cost synergies now expected by the end of year three.

“We ended the year with solid fourth-quarter results, including strong
organic growth and robust margin expansion,” said Buckhout. “In
addition, we executed well on our cash management actions, reducing
working capital to 24% of sales and generating $26 million of operating
cash flow.

“De-levering the Company remains a top priority. We reduced our debt by
$25 million in the fourth quarter,” added Buckhout. “As previously
announced, in January we sold our non-core Reliability Services business
for $85 million and used the net proceeds to pay down debt. We continue
to evaluate the sale of other non-core businesses to further accelerate
the reduction of our outstanding debt.

“We remain optimistic about the outlook across the majority of our end
markets. Going forward, we will continue to focus on creating long-term
value for shareholders by investing in growth, expanding margins,
generating strong free cash flow, and de-levering the Company,”
concluded Buckhout.

First-Quarter 2019 Guidance
For the first quarter of 2019,
CIRCOR expects revenue in the range of $245 million to $260 million, and
GAAP loss per share in the range of $(0.15) to $(0.01), which reflects
acquisition-related amortization expense of $(0.50) to $(0.52) and other
special and restructuring (charges) gains of $0.05 to $0.07, which
includes an expected gain on the sale of Reliability Services, offset by
restructuring and special charges. Excluding the impact of amortization,
special and restructuring (charges) gains, adjusted EPS is expected to
be in the range of $0.32 to $0.42 per share. Presentation slides that
provide supporting information to this guidance and fourth-quarter and
year-end results are posted on the “Investors” section of the Company’s
website, http://investors.circor.com,
and will be discussed during the conference call at 9:00 a.m. ET
tomorrow, February 27, 2019.

Selected Consolidated Results (unaudited)

($ millions except EPS) Q4 2018 Q4 2017 Change FY 2018 FY 2017 Change
Revenue $ 301.4 $ 205.6 47%

$

1,175.8

$

661.7 78%
GAAP Operating Income (Loss) $ 6.3 $ (5.1) n/m

$

9.4

$

20.6 (54)%
Adjusted Operating Income1 $ 27.5 $ 18.7 47%

$

96.6

$

51.7 87%
GAAP Operating Margin 2.1% (2.5)% 460 bps

0.8%

3.1% (230) bps
Adjusted Operating Margin1 9.1% 9.1% 0 bps 8.2% 7.8% 40 bps
GAAP (Loss) Earnings Per Share $

(1.06)

$ (0.32)

(232)%

$

(1.99)

$

0.70 n/m
Adjusted Earnings Per Share1 (Diluted)1 $ 0.62 $ 0.57

9%

$

2.11

$

1.71

23%

Operating Cash Flow $

26.3

$ 7.6

246%

$

49.8

$

9.6

419%

Free Cash Flow2 $

19.8

$ 1.5 n/m

$

26.4

$

(4.0) n/m
Orders $ 296.6 $ 216.5 37%

$

1,239.5

$

701.6 77%

Segment Results

($ millions) Q4 2018 Q4 2017 Change FY 2018 FY 2017 Change
Industrial
Revenue $ 120.6 $ 52.1 131%

$

487.4

$

139.1 250%
Segment Operating Income $ 14.7 $ 5.0 194%

$

57.3

$

19.9 188%
Segment Operating Margin 12.2% 9.6% 260 bps 11.8% 14.3% (250) bps
Orders $ 121.9 $ 47.2 158%

$

510.1

$

132.0 286%
Energy
Revenue $ 117.4 $ 96.6 22%

$

451.2

$

339.6 33%
Segment Operating Income $ 9.4 $ 8.6 9%

$

33.5

$

30.1 11%
Segment Operating Margin 8.0% 8.9% (90) bps 7.4% 8.9% (150) bps
Orders $ 98.0 $ 118.0 (17)%

$

451.9

$

376.0 20%
Aerospace & Defense
Revenue $ 63.3 $ 57.0 11%

$

237.0

$

183.0 30%
Segment Operating Income $ 11.4 $ 10.9 5%

$

36.0

$

23.4 54%
Segment Operating Margin 18.0% 19.1% (110) bps 15.2% 12.8% 240 bps
Orders $ 76.7 $ 51.3 50%

$

277.5

$

193.5 43%

1.

Adjusted Consolidated and Segment Results for Q4 2018 exclude
non-cash acquisition-related intangible amortization, special and
restructuring charges totaling $21.2 million ($33.4 million, net
of tax). These charges include: (i) $13.7 million for non-cash
acquisition-related intangible amortization expense and
amortization of the step-up in fixed asset values; (ii) $4.4
million related to the sale of businesses; (iii) $3.1 million
related to other special and restructuring activities, primarily
in Oklahoma City; and (iv) $10.9 million related to the write-off
of a deferred tax asset due to changes in US tax law. Consolidated
and Segment Results for Q4 2017 exclude special and restructuring
charges and non-cash acquisition-related intangible and inventory
step-up amortization, totaling $23.7 million ($15.5 million, net
of tax). This net charge includes (i) $9.2 million charge for
non-cash acquisition-related intangible amortization expense,
including the amortization of a step-up in fair value of
inventories; (ii) $8.9 million in transaction fees associated with
the acquisition of the Colfax Fluid Handling business; (iii) $2.4
million for settlement of a legal matter; (iv) $1.8 million
write-off for deferred financing fees associated with the prior
debt agreement; and (v) $1.4 million related to previously
announced restructuring actions.

2.

Free Cash Flow is a non-GAAP financial measure and is
calculated by subtracting GAAP capital expenditures, net of
proceeds from asset sales, from GAAP Operating Cash Flow.

Conference Call Information
CIRCOR International will hold a
conference call to review its financial results at 9:00 a.m. ET
tomorrow, February 27, 2019. To listen to the live conference call and
view the accompanying presentation slides, please visit “Webcasts &
Presentations” in the “Investors” portion of CIRCOR’s website. The live
call also can be accessed by dialing (877) 407-5790 or (201) 689-8328.
The webcast will be archived on the Company’s website for one year.

Use of Non-GAAP Financial Measures
Adjusted operating
income, Adjusted operating margin, Adjusted net income, Adjusted
earnings per share (diluted), EBITDA, Adjusted EBITDA, net debt, free
cash flow, organic growth, pro forma combined amounts and pro forma
organic growth are non-GAAP financial measures. These non-GAAP financial
measures are used by management in our financial and operating decision
making because we believe they reflect our ongoing business and
facilitate period-to-period comparisons. We believe these non-GAAP
financial measures provide useful information to investors and others in
understanding and evaluating the Company’s current operating performance
and future prospects in the same manner as management does, if they so
choose. These non-GAAP financial measures also allow investors and
others to compare the Company’s current financial results with the
Company’s past financial results in a consistent manner.
For
example:

  • We exclude costs and tax effects associated with restructuring
    activities, such as reducing overhead and consolidating facilities. We
    believe that the costs related to these restructuring activities are
    not indicative of our normal operating costs.
  • We exclude certain acquisition-related costs, including significant
    transaction costs and amortization of inventory and fixed-asset
    step-ups and the related tax effects. We exclude these costs because
    we do not believe they are indicative of our normal operating costs.
  • We exclude the expense and tax effects associated with the non-cash
    amortization of acquisition-related intangible assets because a
    significant portion of the purchase price for acquisitions may be
    allocated to intangible assets that have lives up to 25 years.
    Exclusion of the non-cash amortization expense allows comparisons of
    operating results that are consistent over time for both our newly
    acquired and long-held businesses and with both acquisitive and
    non-acquisitive peer companies.
  • We also exclude certain gains/losses and related tax effects, which
    are either isolated or cannot be expected to occur again with any
    predictability, and that we believe are not indicative of our normal
    operating gains and losses. For example, we exclude gains/losses from
    items such as the sale of a business, significant litigation-related
    matters and lump-sum pension plan settlements.
  • Due to the significance of the Fluid Handling acquisition and to
    provide a more meaningful comparison of changes in our orders and
    revenue, we also discuss these changes on a “pro forma organic” basis.
    Pro forma organic is calculated assuming the Fluid Handling
    acquisition was completed on January 1, 2017 and excluding the impact
    of changes in foreign currency exchange rates.

CIRCOR’s management uses these non-GAAP measures, in addition to GAAP
financial measures, as the basis for measuring the Company’s operating
performance and comparing such performance to that of prior periods and
to the performance of our competitors. We use such measures when
publicly providing our business outlook, assessing future earnings
potential, evaluating potential acquisitions and dispositions and in our
financial and operating decision-making process, including for
compensation purposes.

Investors should recognize that these non-GAAP measures might not be
comparable to similarly titled measures of other companies. These
measures should be considered in addition and not as a substitute for or
superior to, any measure of performance, cash flow or liquidity prepared
in accordance with accounting principles generally accepted in the
United States. A reconciliation of the non-GAAP financial measures to
the most directly comparable GAAP measures is included in this news
release.

Safe Harbor Statement
This press release contains
forward-looking statements within the meaning of Section 27 A of the
Securities Act of 1933, as amended, and Section 21 E of the Securities
Exchange Act of 1934, as amended. Reliance should not be placed on
forward-looking statements because they involve unknown risks,
uncertainties and other factors, which are, in some cases, beyond the
control of CIRCOR. Any statements in this press release that are not
statements of historical fact are forward-looking statements, including,
but not limited to, those relating to CIRCOR's first-quarter 2019
guidance, our future performance, including realization of cost
reductions from restructuring activities and expected synergies, and our
corporate priorities. Actual events, performance or results could differ
materially from the anticipated events, performance or results expressed
or implied by such forward-looking statements. Important factors that
could cause actual results to vary from expectations include, but are
not limited to: our ability to respond to competitive developments and
to grow our business, both domestically and internationally; changes in
the cost, quality or supply of raw materials; our ability to comply with
our debt obligations; our ability to successfully implement our
acquisition, divesture or restructuring strategies, including our
integration of the Fluid Handling business; changes in industry
standards, trade policies or government regulations, both in the United
States and internationally; and our ability to operate our manufacturing
facilities at current or higher levels and respond to increases in
manufacturing costs. BEFORE MAKING ANY INVESTMENT DECISIONS REGARDING
OUR COMPANY, WE STRONGLY ADVISE YOU TO READ THE SECTION ENTITLED "RISK
FACTORS" IN OUR MOST RECENT ANNUAL REPORT ON FORM 10-K AND SUBSEQUENT
REPORTS ON FORMS 10-Q, WHICH CAN BE ACCESSED UNDER THE "INVESTORS" LINK
OF OUR WEBSITE AT WWW.CIRCOR.COM.
We undertake no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise.

About CIRCOR International, Inc.
CIRCOR International, Inc.
designs, manufactures and markets differentiated technology products and
sub-systems for markets including oil & gas, industrial, aerospace &
defense and commercial marine. CIRCOR has a diversified flow and motion
control product portfolio with recognized, market-leading brands that
fulfill its customers’ mission critical needs. The Company’s strategy is
to grow organically and through complementary acquisitions; simplify
CIRCOR’s operations; achieve world class operational excellence; and
attract and retain top talent. For more information, visit the Company’s
investor relations website at http://investors.circor.com.

CIRCOR INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME

(in thousands, except per share data)

(UNAUDITED)

Three Months Ended Twelve Months Ended

December 31,
2018

December 31,
2017

December 31,
2018

December 31,
2017

Net revenues $ 301,363 $ 205,578 $ 1,175,825 $ 661,710
Cost of revenues 209,345 146,362 834,175 460,890
GROSS PROFIT 92,018 59,216 341,650 200,820
Selling, general and administrative expenses 79,085 49,776 308,427 166,201
Special and restructuring charges (recoveries), net 6,637 14,495 23,839 14,051
OPERATING INCOME 6,296 (5,055 ) 9,384 20,568
Other expense (income):
Interest expense, net 13,257 4,479 52,913 10,777
Other (income) expense, net (234 ) 1,655 (7,435 ) 3,678
TOTAL OTHER EXPENSE, NET 13,023 6,134 45,478 14,455
(LOSS) INCOME BEFORE INCOME TAXES (6,727 ) (11,189 ) (36,094 ) 6,113
Provision for (benefit from) income taxes 14,278 (5,619 ) 3,290 (5,676 )
NET (LOSS) INCOME $ (21,005 ) $ (5,570 ) $ (39,384 ) $ 11,789
(Loss) Earnings per common share:
Basic $ (1.06 ) $ (0.32 ) $ (1.99 ) $ 0.71
Diluted $ (1.06 ) $ (0.32 ) $ (1.99 ) $ 0.70
Weighted average number of common shares outstanding:
Basic 19,848 17,233 19,834 16,674
Diluted 19,848 17,233 19,834 16,849
Dividends declared per common share $ $ 0.0375 $ $ 0.1500

CIRCOR INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(UNAUDITED)

Twelve Months Ended
OPERATING ACTIVITIES

December 31,
2018

December 31,
2017

Net (loss) income $ (39,384 ) $ 11,789
Adjustments to reconcile net (loss) income to net cash provided by
operating activities:
Depreciation 28,754

15,290

Amortization 49,255

14,747

Bad debt expense 2,141

810

Loss on write down of inventory 6,987

3,037

Amortization of inventory fair value step-up 6,600

4,300

Compensation expense of share-based plans 4,971

3,807

Change in fair value of contingent consideration (12,200 )

Debt extinguishment and amortization of debt issuance costs

3,823

2,569

Loss on sale or write down of property, plant and equipment 1,316

360

Loss on sale of business 1,882 5,300
Changes in operating assets and liabilities, net of effects of
acquisition and disposition:
Trade accounts receivable 35,250

(5,734

)

Inventories 11,356

(19,494

)
Prepaid expenses and other assets

(70,749

)

(8,578

)
Accounts payable, accrued expenses and other liabilities 7,551

(6,366

)
Net cash provided by operating activities

49,753

9,637

INVESTING ACTIVITIES
Additions to property, plant and equipment (23,588 )

(14,541

)
Proceeds from the sale of property, plant and equipment 231

934

Proceeds from the sale of affiliate 2,753
Business acquisition, working capital adjustment 6,300

(488,517

)

Net cash used in investing activities (14,304 )

(502,124

)
FINANCING ACTIVITIES
Proceeds from long-term debt 248,300

1,090,883

Payments of long-term debt (260,146 )

(523,183

)
Debt issuance costs

(30,366

)
Dividends paid

(2,506

)
Proceeds from the exercise of stock options 690

740

Return of cash to seller (61,201 )
Net cash (used in) provided by financing activities (72,357 )

535,568

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

(5,860

)

8,996

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

(42,768

)

52,077

Cash, cash equivalents and restricted cash at beginning of period 112,293

58,279

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD $

69,525

$

110,356

CIRCOR INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(UNAUDITED)

December 31, 2018 December 31, 2017
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $

68,517

$ 110,356
Trade accounts receivable, less allowance for doubtful accounts of
$6,965 and $4,791, respectively
183,552 223,922
Inventories 217,378 244,896
Prepaid expenses and other current assets

90,658

58,353
Assets held for sale 46,898 866
Total Current Assets

607,003

638,393
PROPERTY, PLANT AND EQUIPMENT, NET 201,799 217,539
OTHER ASSETS:
Goodwill 501,892 505,762
Intangibles, net 441,973 513,364
Deferred income taxes

29,478

22,334
Other assets

12,797

9,407
TOTAL ASSETS $

1,794,942

$ 1,906,799
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable $ 123,881 $ 117,329
Accrued expenses and other current liabilities

115,162

170,454
Accrued compensation and benefits 33,878

34,734

Liabilities held for sale 11,141
Total Current Liabilities

284,062

322,517
LONG-TERM DEBT, NET 778,187 787,343
DEFERRED INCOME TAXES

33,931

26,122
PENSION LIABILITY, NET 146,522 150,719
OTHER NON-CURRENT LIABILITIES

19,917

18,124
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Common stock 212 212
Additional paid-in capital 444,673 438,721
Retained earnings 232,100 274,243
Common treasury stock, at cost (74,472 ) (74,472 )
Accumulated other comprehensive loss, net of tax (70,190 ) (36,730 )
Total Shareholders’ Equity 532,323 601,974
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $

1,794,942

$ 1,906,799

CIRCOR INTERNATIONAL, INC.
SUMMARY OF ORDERS AND
BACKLOG
(in millions)
UNAUDITED

Three Months Ended Twelve Months Ended

December 31,
2018

December 31,
2017

December 31,
2018

December 31,
2017

ORDERS (1) (3)
Energy $ 98.0 $ 118.0 $ 451.9 $ 376.0
Aerospace & Defense 76.7 51.3 277.5 193.5
Industrial 121.9 47.2 510.1 132.0
Total orders $ 296.6 $ 216.5 $ 1,239.5 $ 701.5
BACKLOG (2) (3)

December 31,
2018

December 31,
2017

Energy $ 183.5 $ 183.0
Aerospace & Defense 179.6 163.7
Industrial 163.8 155.8
Total backlog $ 526.9 $ 502.5
Note 1: Orders do not include the foreign exchange impact due to the
re-measurement of customer order backlog amounts denominated in
foreign currencies.
Note 2: Backlog represents unshipped customer orders for which
revenue has not been recognized.

Note 3: 2018 backlog reflects adjustments related to the
cumulative impact of changes in revenue recognition due to the
Company's adoption of ASC 606. December 31, 2017 amounts restated
for Q1 2018 organizational realignment.

CIRCOR INTERNATIONAL, INC.
SEGMENT INFORMATION
(in
thousands, except percentages)
UNAUDITED

2017 2018
1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL
ORDERS
Energy $ 100,012 $ 73,140 $ 84,857 $

118,030

$

376,039

$ 129,762 $ 113,171 $ 110,987 $ 97,990 $ 451,910
Aerospace & Defense 56,416 39,902 45,939

51,278

193,535

59,793 59,441 81,533 76,702 277,469
Industrial 27,654 29,889 27,296

47,154

131,993

136,607 136,746 114,876 121,886 510,115
Total $ 184,082 $ 142,931 $ 158,092 $

216,462

$

701,567

$ 326,162 $ 309,358 $ 307,396 $ 296,578 $ 1,239,494
NET REVENUES
Energy $ 76,210 $ 78,276 $ 88,570 $ 96,561 $ 339,617 $ 99,972 $ 112,804 $ 121,023 $ 117,433 $ 451,232
Aerospace & Defense 41,601 43,304 41,117 56,961 182,983 58,477 57,500 57,757 63,283 237,017
Industrial 27,397 29,651 30,006 52,056 139,110 117,131 131,064 118,734 120,647 487,576
Total $ 145,208 $ 151,231 $ 159,693 $ 205,578 $ 661,710 $ 275,580 $ 301,368 $ 297,514 $ 301,363 $ 1,175,825
SEGMENT OPERATING INCOME
Energy $ 6,407 $ 8,170 $ 6,936 $ 8,618 $ 30,131 $ 5,696 $ 9,242 $ 9,163 $ 9,396 $ 33,497
Aerospace & Defense 3,784 4,374 4,333 10,884 23,375 8,931 6,992 8,709 11,415 36,047
Industrial 4,384 4,901 5,675 4,972 19,932 12,948 15,037 14,609 14,746 57,340
Corporate expenses (5,479 ) (5,396 ) (5,067 ) (5,802 ) (21,744 ) (7,802 ) (6,448 ) (8,034 ) (8,015 ) (30,299 )
Adjusted Operating Income $ 9,096 $ 12,049 $ 11,877 $ 18,672 $ 51,694 $ 19,773 $ 24,823 $ 24,447 $ 27,542 $ 96,585
SEGMENT OPERATING MARGIN %
Energy 8.4 % 10.4 % 7.8 % 8.9 % 8.9 % 5.7 % 8.2 % 7.6 % 8.0 % 7.4 %
Aerospace & Defense 9.1 % 10.1 % 10.5 % 19.1 % 12.8 % 15.3 % 12.2 % 15.1 % 18.0 % 15.2 %
Industrial 16.0 % 16.5 % 18.9 % 9.6 % 14.3 % 11.1 % 11.5 % 12.3 % 12.2 % 11.8 %
Adjusted Operating Margin 6.3 % 8.0 % 7.4 % 9.1 % 7.8 % 7.2 % 8.2 % 8.2 % 9.1 % 8.2 %

CIRCOR INTERNATIONAL, INC.
RECONCILIATION OF KEY
PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED
ACCOUNTING PRINCIPLE TERMS
(in thousands, except
percentages)
UNAUDITED

2017 2018
1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ 16,195 $ 2,667 $ (16,854 ) $ 7,629 $ 9,637 $ (145 ) $ (465 ) $ 24,073 $

26,290

$

49,753

LESS:
Capital expenditures, net of sale proceeds 2,811 2,375 2,318 6,103 13,607 8,141 3,563 5,119 6,534

23,357

FREE CASH FLOW $ 13,384 $ 292 $ (19,172 ) $ 1,526 $ (3,970 ) $ (8,286 ) $ (4,028 ) $ 18,954 $

19,756

$

26,396

GROSS DEBT $ 243,000 $ 252,856 $ 269,026 $ 795,208 $ 795,208 $ 823,665 $ 827,629 $ 831,613 $ 807,050 $ 807,050
LESS:
Cash & cash equivalents 65,656 77,272 75,627 110,356 110,356 123,305 69,030 71,334

68,517

68,517

GROSS DEBT, NET OF CASH $ 177,344 $ 175,584 $ 193,399 $ 684,852 $ 684,852 $ 700,360 $ 758,599 $ 760,279 $

738,533

$

738,533

TOTAL SHAREHOLDERS' EQUITY $ 415,537 $ 438,097 $ 451,885 $ 601,974 $ 601,974 $ 592,096 $ 573,992 $ 574,171 $ 532,323 $ 532,323
GROSS DEBT AS % OF EQUITY 58 % 58 % 60 % 132 % 132 % 139 % 144 % 145 % 152 % 152 %
GROSS DEBT, NET OF CASH AS % OF EQUITY 43 % 40 % 43 % 114 % 114 % 118 % 132 % 132 % 138 %

139

%

CIRCOR INTERNATIONAL, INC.
RECONCILIATION OF KEY
PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED
ACCOUNTING PRINCIPLE TERMS
(in thousands, except
per share data)
UNAUDITED

2017 2018
1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL
NET INCOME (LOSS) $ 4,773 $ 8,970 $ 3,617 $ (5,571 ) $ 11,789 $ (17,441 ) $ 5,902 $ (6,841 ) $ (21,005 ) $ (39,385 )
LESS:
Restructuring related inventory charges 473 1,067 864 2,404
Amortization of inventory step-up 4,300 4,300 6,600 6,600
Restructuring charges, net 1,458 3,566 341 697 6,062 9,615 844 1,348 944 12,751
Acquisition amortization 2,552 2,599 2,694 4,697 12,542 11,797 11,767 11,733 12,012 47,309
Acquisition depreciation 233 233 1,837 1,735 1,742 1,735 7,049
Special (recoveries) charges, net (2,268 ) (5,520 ) 1,978 13,799 7,989 2,831 1,156 1,408 5,692 11,087
Income tax impact (1,137 ) (3,124 ) (1,497 ) (8,279 ) (14,037 ) (7,687 ) (11,056 ) 967 12,124 (5,652 )
ADJUSTED NET INCOME $ 5,378 $ 6,491 $ 7,133 $ 9,876 $ 28,878 $ 8,025 $ 11,415 $ 10,357 $ 12,366 $ 42,163
EARNINGS (LOSS) PER COMMON SHARE (Diluted) $ 0.29 $ 0.54 $ 0.22 $ (0.32 ) $ 0.70 $ (0.88 ) $ 0.30 $ (0.34 ) $ (1.06 ) $ (1.99 )
LESS:
Restructuring related inventory charges 0.02 0.05 0.04 0.12
Amortization of inventory step-up 0.25 0.26 0.33 0.33
Restructuring charges, net 0.09 0.21 0.02 0.04 0.36 0.49 0.04 0.07 0.05 0.64
Acquisition amortization 0.15 0.16 0.16 0.27 0.74 0.60 0.59 0.59 0.60 2.37
Acquisition depreciation 0.01 0.01 0.09 0.09 0.09 0.09 0.35
Special (recoveries) charges, net (0.14 ) (0.33 ) 0.12 0.80 0.47 0.14 0.06 0.07 0.29 0.55
Income tax impact (0.07 ) (0.19 ) (0.09 ) (0.48 ) (0.83 ) (0.39 ) (0.55 ) 0.05 0.61 (0.28 )
ADJUSTED EARNINGS PER SHARE (Diluted) $ 0.32 $ 0.39 $ 0.43 $ 0.57 $ 1.71 $ 0.40 $ 0.57 $ 0.52 $ 0.62 $ 2.11

Contacts

David F. Mullen
Senior Vice President Finance
CIRCOR
International
(781) 270-1200

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