CIRCOR INTERNATIONAL INC - FORM 8-K - EX-99.1 - CIRCOR INTERNATIONAL, INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL - February 5, 2020

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EX-2.1 - AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT, DATED 1/31/20 - CIRCOR INTERNATIONAL INCexhibit21projectwhiteh.htm
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EXHIBIT 99.1

CIRCOR International, Inc.
Unaudited Pro Forma Condensed Consolidated Financial Information
Introduction
On January 31, 2019, CIRCOR International, Inc. (“CIRCOR” or the “Company”) and its wholly-owned subsidiaries, CIRCOR Dovianus Holdings B.V. and CIRCOR Aerospace, Inc., completed the disposition of its Instrumentation and Sampling business (“I&S”) to Crane Co. (the “Purchaser”), pursuant to the Amended and Restated Securities Purchase Agreement dated January 31, 2020, for $172 million, in cash, subject to a working capital adjustment (the “Disposition”).
The unaudited pro forma condensed consolidated financial information has been prepared in conformity with Article 11 of Regulation S-X. In addition, this unaudited pro forma condensed consolidated financial information is based on currently available information and assumptions the Company believes are reasonable. This unaudited pro forma condensed consolidated financial information is presented for informational purposes only and neither purports to represent what the Company’s results of operations or financial position would have been had the Disposition occurred on the dates indicated, nor projects the results of operations for any future periods.
The unaudited pro forma condensed consolidated balance sheet as of September 29, 2019 and unaudited pro forma condensed consolidated statement of operations for the nine months ended September 29, 2019 are derived from and should be read in conjunction with the Company’s unaudited financial statements in its Quarterly Report on Form 10-Q for the quarterly period ended September 29, 2019, which was filed with the Securities and Exchange Commission (the "SEC") on November 13, 2019. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2018 is derived from and should be read in conjunction with the Company’s audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on March 1, 2019.
The unaudited pro forma condensed consolidated balance sheet of the Company as of September 29, 2019 is presented as if the Disposition had occurred on September 29, 2019. The unaudited pro forma condensed consolidated statements of operations for the nine months ended September 29, 2019 as well as for the year ended December 31, 2018 are presented as if the Disposition had occurred on January 1, 2018, the beginning of the earliest period presented.
The Company’s historical consolidated financial statements have been adjusted in the unaudited pro forma condensed consolidated financial information to present events that are (i) directly attributable to the Disposition, (ii) factually supportable and (iii) are expected to have a continuing impact on the Company’s consolidated results following the Disposition.
These pro forma financial statements do not purport to be indicative of the financial position or results of earnings of the Company as of such date or for such periods, nor are they necessarily indicative of future results.






CIRCOR INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 29, 2019
(in 000's)
 
As Reported
 
Pro Forma Adjustments (a)
 
Pro Forma
Cash and cash equivalents
 
$
69,225

 
$
—

 
$
69,225

Accounts receivable, less allowance
 
141,117

 
(11,417
)
 
129,700

Inventories
 
151,744

 
(14,011
)
 
137,733

Prepaid expenses and other current assets
 
89,854

 
(743
)
 
89,111

Asset held for sale
 
29,935

 
—

 
29,935

Total current assets
 
481,875

 
(26,170
)
 
455,705

Property, plant, and equipment, net
 
177,936

 
(6,422
)
 
171,514

Goodwill
 
360,304

 
(91,500
)
 
268,804

Intangibles, net
 
392,515

 
—

 
392,515

Deferred income taxes
 
24,449

 
(5,000
)
 
19,449

Other assets
 
31,052

 
(6,530
)
 
24,522

Total assets
 
$
1,468,131

 
$
(135,622
)
 
$
1,332,509

 
 
 
 
 
 
 
Accounts payable
 
$
90,293

 
$
(5,887
)
 
$
84,406

Accrued expenses and other current liabilities
 
110,682

 
(1,236
)
 
109,446

Accrued compensation and benefits
 
25,564

 
(1,362
)
 
24,202

Liabilities held for sale
 
17,674

 
—

 
17,674

Total current liabilities
 
244,213

 
(8,485
)
 
235,728

Long Term Debt, net
 
640,884

 
(159,000
)
 
481,884

Deferred income taxes
 
26,809

 
(147
)
 
26,662

Pension Liability, net
 
144,809

 
—

 
144,809

Other non-current liabilities
 
36,028

 
(5,966
)
 
30,062

Total liabilities
 
1,092,743

 
(173,599
)
 
919,144

Preferred stock
 
—

 
—

 
—

Common Stock
 
212

 
—

 
212

APIC
 
445,305

 
—

 
445,305

Retained earnings
 
97,728

 
37,977

 
135,705

Common treasury stock
 
(74,472
)
 
—

 
(74,472
)
Accumulated OCI, net of tax
 
(93,385
)
 
—

 
(93,385
)
Total stockholders' equity
 
375,388

 
(23,444
)
 
413,365

Total liabilities and stockholders' equity
 
$
1,468,131

 
$
(135,622
)
 
$
1,332,509



2





CIRCOR INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
NINE-MONTHS ENDED SEPTEMBER 29, 2019
(in '000s, except EPS)
 
As Reported
 
Pro Forma Adjustments (b)
 
Pro Forma
Net revenues
 
$
721,675

 
$
(60,023
)
 
$
661,652

Cost of revenues
 
490,870

 
(41,429
)
 
449,441

       Gross Profit
 
230,805

 
(18,594
)
 
212,211

Selling, general and administrative expenses
 
190,227

 
(7,958
)
 
182,269

Impairment charges
 
—

 
—

 
—

Special and restructuring charges, net
 
19,893

 
(74
)
 
19,819

       Operating Income
 
20,685

 
(10,562
)
 
10,123

Interest expense, net
 
37,846

 
(6,559
)
 
31,287

Other (income), net
 
(2,755
)
 
(91
)
 
(2,846
)
       Loss from continuing operations before income taxes
 
(14,406
)
 
(3,912
)
 
(18,318
)
Provision for income taxes
 
13,513

 
(809
)
 
12,704

Loss from continuing operations, net of tax
 
(27,919
)
 
(3,103
)
 
(31,022
)
Loss from discontinued operations, net of tax
 
(107,572
)
 
—

 
(107,572
)
       Net Loss
 
$
(135,491
)
 
$
(3,103
)
 
$
(138,594
)
 
 

 

 

Basic loss per common share:
 
 
 
 
 
 
       Basic from continuing operations
 
$
(1.40
)
 
 
 
$
(1.56
)
       Basic from discontinued operations
 
$
(5.41
)
 
 
 
$
(5.41
)
       Net Loss
 
$
(6.81
)
 
 
 
$
(6.97
)
 
 
 
 
 
 
 
Diluted loss per common share:
 
 
 
 
 
 
       Diluted from continuing operations
 
$
(1.40
)
 
 
 
$
(1.56
)
       Diluted from discontinued operations
 
$
(5.41
)
 
 
 
$
(5.41
)
       Net Loss
 
$
(6.81
)
 
 
 
$
(6.97
)
 
 
 
 
 
 
 
Weighted-average shares:
 
 
 
 
 
Basic
19,898

 
—

 
19,898

Diluted
19,898

 
—

 
19,898

















3



CIRCOR INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 2018

 
(in '000s, except EPS)
 
As Reported
 
Pro Forma Adjustments (b)
 
Pro Forma
Net revenues
 
$
1,175,825

 
$
(82,583
)
 
$
1,093,242

Cost of revenues
 
834,175

 
(56,362
)
 
777,813

     Gross Profit
 
341,650

 
(26,221
)
 
315,429

Selling, general and administrative expenses
 
308,427

 
(11,137
)
 
297,290

Special and restructuring charges, net
 
23,839

 
540

 
24,379

     Operating Income
 
9,384

 
(15,624
)
 
(6,240
)
Other expense (income):
 
 
 
 
 
 
Interest expense, net
 
52,913

 
(8,745
)
 
44,168

Other (income), net
 
(7,435
)
 
(44
)
 
(7,479
)
Loss before income taxes
 
(36,094
)
 
(6,835
)
 
(42,929
)
Provision for income taxes
 
3,290

 
(1,447
)
 
1,843

Net Loss
 
$
(39,384
)
 
$
(5,387
)
 
$
(44,771
)
 
 
 
 
 
 
 
Basic loss per share
 
$
(1.99
)
 
 
 
$
(2.26
)
Diluted loss per share
 
$
(1.99
)
 
 
 
$
(2.26
)
 
 
 
 
 
 
 
Weighted-average shares:
 
 
 
 
 
 
Basic
 
19,834

 
—

 
19,834

Diluted
 
19,834

 
—

 
19,834












4




NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:

 
 
 
1.
Basis of Presentation
The unaudited pro forma condensed consolidated balance sheet as of September 29, 2019 and unaudited pro forma condensed consolidated statement of operations for the nine months ended September 29, 2019 are derived from and should be read in conjunction with the Company’s unaudited financial statements in its Quarterly Report on Form 10-Q for the quarterly period ended September 29, 2019, which was filed with the SEC on November 13, 2019. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2018 is derived from and should be read in conjunction with the Company’s audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on March 1, 2019.

The unaudited pro forma condensed consolidated balance sheet of the Company as of September 29, 2019 is presented as if the Disposition had occurred on September 29, 2019. The unaudited pro forma condensed consolidated statements of operations for the nine months ended September 29, 2019 as well as for the year ended December 31, 2018, are presented as if the Disposition had occurred on January 1, 2018, the beginning of the earliest period presented.

The Company’s historical consolidated financial statements have been adjusted in the unaudited pro forma condensed consolidated financial information to present events that are (i) directly attributable to the Disposition, (ii) factually supportable and (iii) are expected to have a continuing impact on the Company’s consolidated results following the Disposition.

These unaudited pro forma condensed consolidated financial statements do not purport to be indicative of the financial position or results of earnings of the Company as of such date or for such periods, nor are they necessarily indicative of future results.
 
 
2.
Pro Forma Adjustments

The following pro forma adjustments are included in the Company’s unaudited pro forma condensed consolidated financial information:

(a)
These adjustments reflect the disposition of CIRCOR’s I&S business for $172.0 million, in cash, $10.0 million of current taxes and $5.0 million of deferred taxes associated with the Disposition and $3.0 million of fees and expenses. This net cash of $159.0 million is shown as being used to repay long-term debt. The adjustment also includes derecognizing disposed assets and liabilities of the I&S business including $91.5 million of goodwill allocated to the I&S business. The adjustment to retained earnings reflects an estimated $38.0 million after-tax gain on the Disposition.

(b)
These adjustments reflect the elimination of revenues and expenses associated with the I&S business. In addition, the adjustments reflect a reduction of interest expense (net of a tax) as the net proceeds are anticipated to be used to repay long-term debt. The adjustments do not reflect the anticipated gain on sale as described in (a) above as that is considered one-time in nature and not indicative of ongoing operations.
  
 


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