CIRCOR INTERNATIONAL INC - FORM 8-K - EX-99.1 - March 3, 2021

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CIRCOR Reports Fourth-Quarter 2020 and Full Year 2020 Financial Results     Exhibit 99.1    


Burlington, MA – March 4, 2021

CIRCOR International, Inc. (NYSE: CIR), one of the world’s leading providers of mission critical flow control products and services for the Industrial and Aerospace & Defense markets, today announced GAAP and adjusted financial results for the fourth quarter and full year ended December 31, 2020.

Fourth Quarter 2020:
•Revenue of $208 million, down (14)% reported and (10)% organically
◦Aerospace & Defense revenue of $78 million, down (2)% reported and (3)% organically
◦Industrial revenue of $131 million, down (20)% reported, and (13)% organically
•GAAP operating margin of 4.8%; Adjusted operating margin of 11.2%
•GAAP earnings per share of $(0.70); Adjusted earnings per share of $0.66
•Strong operating cash flow of $24 million; Free cash flow of $20 million

Full year 2020:
•Revenue of $773 million, down (20)% reported and (12)% organically
◦Aerospace & Defense revenue of $268 million, down (2)% reported and (2)% organically
◦Industrial revenue of $505 million, down (27)% reported and (17)% organically
•GAAP operating margin of (7.8)%; Adjusted operating margin of 8.7%
•GAAP earnings per share of $(9.28); Adjusted earnings per share of $1.43
•Completed $45 million cost reduction & avoidance plan; revenue drop through to earnings of 25%
•Operating cash flow of $(23) million impacted by exit of upstream oil & gas and one-time cash charges; Free cash flow of $(35) million
•Reduced net debt by $126 million / (22)% and interest expense by $14 million
•Launched 49 new products in 2020 vs. 33 in 2019


CIRCOR President and CEO Scott Buckhout said, “Our teams were faced with an unprecedented challenge presented by the global COVID-19 pandemic in 2020 – a challenge we met head on by prioritizing the health and safety of our employees, delivering mission critical equipment and service to our customers, and executing difficult but necessary cost out actions to preserve our financial strength. I am proud of the resilience and remarkable effort of the entire CIRCOR team in navigating a challenging and dynamic year.”

Mr. Buckhout continued, “Despite the difficult macro environment, we made significant progress on executing our strategic plan. We successfully completed our exit from upstream oil & gas with the sale of Instrumentation & Sampling and Distributed Valves and significantly reduced our debt position with the proceeds from these sales. We also executed our value-based pricing strategy across both businesses while launching a record number of new products in collaboration with our customers and suppliers. I am confident that these efforts along with our continued focus on improving our operations and execution using the CIRCOR Operating System will position us to take full advantage of an eventual market recovery.”

Mr. Buckhout concluded, “Looking ahead to 2021, our team remains focused on delivering for our customers, shareholders, and employees by executing strategic initiatives that drive organic growth, expand margins, and drive improved free cash flow to further reduce debt.”




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2021 Guidance

For the full year of 2021, CIRCOR expects organic revenue growth in the range of 0 to 4%, with low to mid-single digit growth in Aerospace and Defense and low-single digit growth in Industrial. Adjusted EPS is expected to be in the range of $2.00 to $2.20 driven by increased sales volume and improved operating margins. CIRCOR also expects its adjusted net income to free cash flow conversion to be 85% - 95%. Free cash flow generated in 2021 will be used to deleverage CIRCOR, and the company continues to target a net debt to adjusted EBITDA ratio of 2.0x to 2.5x. 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 and will be discussed during the conference call at 9:00 a.m. ET today.

Selected Preliminary Consolidated Results
($ in millions except EPS)Q4 2020Q4 2019ChangeQ4 YTD 2020Q4 YTD 2019Change
Revenue$208.4 $242.6 -14 %$773.3 $964.3 -20 %
Revenue - excluding divested businesses1
208.4 224.0 -7 %768.4 869.1 -12 %
GAAP operating (loss) income 9.9 17.0 -42 %(60.4)37.7 -260 %
Adjusted operating income2
23.3 32.2 -28 %67.6 109.8 -38 %
GAAP operating margin4.8 %7.0 % -220 bps (7.8)%3.9 % -1170 bps
Adjusted operating margin2
11.2 %13.3 %-210 bps8.7 %11.4 %-270 bps
Adjusted operating margin ex divestitures2
11.2 %13.0 % -180 bps 8.8 %10.6 % -180 bps
GAAP (loss) earnings per share (diluted)$(0.70)$0.08 -975 %$(9.28)$(6.73)-38 %
Adjusted earnings per share (diluted)2
$0.66 $0.82 -20 %$1.43 $2.62 -45 %
Operating cash flow23.6 16.8 40 %(22.7)15.9 -243 %
Free cash flow3
20.4 18.4 11 %(35.3)11.7 -402 %
Orders168.5 236.6 -29 %736.2 977.5 -25 %
Orders - excluding divested businesses1
168.5 218.5 -23 %731.7 882.3 -17 %

Segment Results
($ in millions)Q4 2020Q4 2019ChangeQ4 2020Q4 2019Change
Aerospace & Defense
Revenue$77.8 $79.1 -2 %$267.8 $272.6 -2 %
Segment operating income18.7 19.1 -2 %59.1 52.5 13 %
Segment operating margin24.0 %24.2 % -20 bps 22.1 %19.2 % 290 bps
Orders46.8 68.5 -32 %254.5 313.9 -19 %
Industrial
Revenue$130.5 $163.6 -20 %$505.4 $691.7 -27 %
Revenue - excluding divested businesses1
130.5 145.0 -10 %500.5 596.5 -16 %
Segment operating income12.4 20.8 -40 %39.8 90.8 -56 %
Segment operating margin9.5 %12.7 % -320 bps 7.9 %13.1 % -520 bps
Orders121.7 168.1 -28 %481.6 663.6 -27 %
Orders - excluding divested businesses1
121.7 150.0 -19 %477.2 568.4 -16 %

1.Orders and revenue excluding divested businesses are non-GAAP measures and are calculated by subtracting the orders and revenues generated by the divested businesses during the periods prior to their divestiture from reported
2


orders and revenues. Divested businesses include Reliability Services, Spence/Nicholson and Instrumentation & Sampling (all Industrial) which were sold before December 31, 2020.
2.Adjusted consolidated and segment results for Q4 2020 exclude net loss from discontinued operations of $0.8 million and net loss from non-cash acquisition-related intangible amortization, special and restructuring charges totaling $13.4 million. These charges include: (i) $12.0 million for non-cash acquisition-related intangible amortization and depreciation expense; (ii) $1.4 million of professional fees and other costs associated with restructuring and cost reductions. It also excludes the Q4 2020 charge for valuation allowance against deferred tax assets by virtue of using an effective tax rate in the adjusted results which is a $14.8 million adjustment to taxes. Adjusted consolidated and segment results for Q4 2019 exclude net loss from discontinued operations of $1.6 million and net loss from non-cash acquisition-related intangible amortization, special and restructuring charges totaling $15.2 million ($13.4 million, net of tax). These charges include: (i) $12.2 million for non-cash acquisition-related intangible amortization expense and amortization of the step-up in fixed asset values; (ii) $2.3 million related to restructuring and cost saving initiatives; (iii) $1.3 million of professional fees associated with an unsolicited tender offer to acquire all outstanding shares of the Company’s common stock; (iv) $1.2 million related to divestitures, partially offset by (v) a $1.8 million gain on the sale of a building.
3.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 today, March 4, 2021. To listen to the live conference call and view the accompanying presentation slides, please visit “Webcasts & Presentations” in the “Investors” section 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 and organic growth (and such measures further excluding discontinued operations) are non-GAAP financial measures. These non-GAAP financial measures are used by management in our financial and operating decision making because we believe they reflect our ongoing business and facilitate period-to-period comparisons. We believe these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating the Company’s current operating performance and future prospects in the same manner as management does, if they so choose. These non-GAAP financial measures also allow investors and others to compare the Company’s current financial results with the Company’s past financial results in a consistent manner. For example:
We exclude costs and tax effects associated with restructuring activities, such as reducing overhead and consolidating facilities. We believe that the costs related to these restructuring activities are not indicative of our normal operating costs.

We exclude certain acquisition-related costs, including significant transaction costs and amortization of inventory and fixed-asset step-ups and the related tax effects. We exclude these costs because we do not believe they are indicative of our normal operating costs.

We exclude the expense and tax effects associated with the non-cash amortization of acquisition-related intangible assets because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have lives up to 25 years. Exclusion of the non-cash amortization expense allows comparisons of operating results that are consistent over time for both our newly acquired and long-held businesses and with both acquisitive and non-acquisitive peer companies.

We also exclude certain gains/losses and related tax effects, which are either isolated or cannot be expected to occur again with any predictability, and that we believe are not indicative of our normal operating gains and losses. For example, we exclude gains/losses from items such as the sale of a business, significant litigation-related matters and lump-sum pension plan settlements.

We exclude the results of discontinued operations.

We exclude goodwill impairment charges.
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Due to the significance of recently sold businesses and to provide a comparison of changes in our orders and revenue, we also discuss these changes on an “organic” basis. Organic is calculated assuming the divestitures completed prior to December 31, 2020 were completed on January 1, 2019 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 certain statements that are “forward-looking statements” as that term is defined under the Private Securities Litigation Reform Act of 1995 (the “Act”). The words “may,” “hope,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” “continue,” and other expressions, which are predictions of or indicate future events and trends and which do not relate to historical matters, identify forward-looking statements, although not all forward-looking statements are accompanied by such words. We believe that it is important to communicate our future expectations to our stockholders, and we, therefore, make forward-looking statements in reliance upon the safe harbor provisions of the Act. However, there may be events in the future that we are not able to accurately predict or control and our actual results may differ materially from the expectations we describe in our forward-looking statements. Forward-looking statements, including statements about outlook for the fourth quarter, the expected and potential direct or indirect impacts of the COVID-19 pandemic on our business, the realization of cost reductions from restructuring activities and expected synergies, the number of new product launches and future cash flows from operating activities, involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: the duration and severity of the COVID-19 pandemic and its impact on the global economy; changes in the price of and demand for oil and gas in both domestic and international markets; any adverse changes in governmental policies; variability of raw material and component pricing; changes in our suppliers’ performance; fluctuations in foreign currency exchange rates; changes in tariffs or other taxes related to doing business internationally; our ability to hire and retain key personnel; our ability to operate our manufacturing facilities at efficient levels including our ability to prevent cost overruns and reduce costs; our ability to generate increased cash by reducing our working capital; our prevention of the accumulation of excess inventory; our ability to successfully implement our divestiture; restructuring or simplification strategies; fluctuations in interest rates; our ability to successfully defend product liability actions; as well as 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, natural disasters, terrorist attacks and other similar matters. We advise you to read further about these and other risk factors set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q and Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2019, which is filed with the Securities and Exchange Commission ("SEC") and is available on the SEC's website at www.sec.gov. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.





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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.

Contact:
Alex Maki
Vice President FP&A and Investor Relations
CIRCOR International
(781) 270-1200











































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CIRCOR INTERNATIONAL, INC.
Condensed Consolidated Statements of Operations
(in thousands, except per share data) (unaudited)
Three Months EndedTwelve Months Ended
Q4 2020Q4 2019Q4 2020Q4 2019
Net revenues$208,351 $242,638 $773,271 $964,313 
Cost of revenues140,939 164,634 530,844 655,504 
Gross profit67,412 78,004 242,427 308,809 
Selling, general and administrative expenses56,046 58,029 220,994 248,256 
Goodwill impairment charge— — 116,182 — 
Special and restructuring charges (recoveries), net1,444 2,979 (34,303)22,872 
Operating income, (loss)9,922 16,996 (60,446)37,681 
Other expense (income)
Interest expense, net8,520 10,763 34,219 48,609 
Other (income) expense, net(758)1,919 (529)(836)
Total other expense, net7,762 12,682 33,690 47,773 
Income (loss) from continuing operations before income taxes2,160 4,314 (94,136)(10,092)
Provision for (benefit from) income taxes15,299 1,163 56,222 14,676 
(Loss) Income from continuing operations, net of tax(13,139)3,151 (150,358)(24,768)
(Loss) Income from discontinued operations, net of tax(795)(1,595)(35,140)(109,167)
Net (Loss) income$(13,934)$1,556 $(185,498)$(133,935)
Basic (loss) income per common share:
Basic from continuing operations$(0.66)$0.16 $(7.52)$(1.24)
Basic from discontinued operations$(0.04)$(0.08)$(1.76)$(5.48)
Net (loss) income$(0.70)$0.08 $(9.28)$(6.73)
Diluted income (loss) per common share:
Diluted from continuing operations$(0.66)$0.16 $(7.52)$(1.24)
Diluted from discontinued operations$(0.04)$(0.08)$(1.76)$(5.48)
Net (loss) income$(0.70)$0.08 $(9.28)$(6.73)
Weighted average number of common shares outstanding:
Basic20,002 19,920 19,982 19,903 
Diluted20,002 20,148 19,982 19,903 









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CIRCOR INTERNATIONAL, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands) (unaudited)
Twelve Months Ended
December 31, 2020December 31, 2019
OPERATING ACTIVITIES
Net loss$(185,498)$(133,935)
Loss from discontinued operations, net of income taxes(35,140)(109,167)
Loss from continuing operations(150,358)(24,768)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
     Depreciation20,385 22,045 
     Amortization43,662 47,591 
     Provision for bad debt expense6,099 617 
Write down of inventory3,618 366 
     Compensation expense for share-based plans5,488 5,418 
     Amortization of debt issuance costs7,460 4,622 
Deferred tax provision51,319 (3,440)
     Loss on sale or write-down of property, plant and equipment— (1,793)
     Goodwill impairment charge116,182 
     (Gain) loss on sale of businesses(54,429)3,615 
Changes in operating assets and liabilities, net of effects of acquisition and disposition:
     Trade accounts receivable23,506 24,339 
     Inventories5,780 (9,557)
     Prepaid expenses and other assets(34,824)7,360 
     Accounts payable, accrued expenses and other liabilities(52,051)(34,168)
     Net cash (used in) provided by continuing operating activities(8,163)42,247 
     Net cash used in discontinued operating activities(14,561)(26,334)
Net cash used in operating activities(22,724)15,913 
INVESTING ACTIVITIES
Additions to property, plant and equipment(12,222)(13,855)
Proceeds from sale of property, plant and equipment(322)6,172 
Proceeds from the sale of business165,540 162,591 
Proceeds from beneficial interest of factored receivables2,957 861 
Net cash provided by continuing investment activities155,953 155,769 
Net cash used in discontinued investing activities(11,658)(2,733)
Net cash provided by investing activities144,295 153,036 
FINANCING ACTIVITIES
Proceeds from long-term debt219,000 281,600 
Payments of long-term debt(352,916)(434,797)
Proceeds from the exercise of stock options118 253 
Net cash used in continuing financing activities(133,798)(152,944)
Net cash used in financing activities(133,798)(152,944)
Effect of exchange rate changes on cash, cash equivalents and restricted cash4,195 197 
(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH(8,032)16,202 
Cash, cash equivalents, and restricted cash at beginning of period85,727 69,525 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD$77,695 $85,727 
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CIRCOR INTERNATIONAL, INC.
Condensed Consolidated Balance Sheets
(in thousands) (unaudited)
December 31, 2020December 31, 2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$76,452 $84,531 
Trade accounts receivable, less allowance for doubtful accounts of $9,035 and $3,086 at December 31, 2020 and December 31, 2019, respectively102,730 125,422 
Inventories
129,084 137,309 
Prepaid expenses and other current assets
93,770 66,664 
Assets held for sale
5,073 161,193 
Total Current Assets
407,109 575,119 
PROPERTY, PLANT AND EQUIPMENT, NET168,763 172,179 
OTHER ASSETS:
Goodwill
158,944 271,893 
Intangibles, net
353,595 385,542 
Deferred income taxes
3,990 30,852 
Other assets
41,881 35,360 
TOTAL ASSETS$1,134,282 $1,470,945 
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
$61,236 $79,399 
Accrued expenses and other current liabilities
76,168 94,169 
Accrued compensation and benefits
28,332 19,518 
Liabilities held for sale
— 43,289 
Total Current Liabilities
165,736 236,375 
LONG-TERM DEBT507,888 636,297 
DEFERRED INCOME TAXES32,190 21,425 
PENSION LIABILITY, NET163,642 146,801 
OTHER NON-CURRENT LIABILITIES58,785 38,636 
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, $0.01 par value; 1,000,000 shares authorized; no shares issued and outstanding
— — 
Common stock, $0.01 par value; 29,000,000 shares authorized; 21,373,813 and 21,284,850 outstanding at December 31, 2020 and December 31, 2019 respectively214 213 
Additional paid-in capital
452,728 446,657 
(Accumulated deficit) retained earnings
(86,461)99,280 
Common treasury stock, at cost (1,372,488 shares at December 31, 2020 and December 31, 2019) (74,472)(74,472)
Accumulated other comprehensive loss, net of tax
(85,968)(80,267)
Total Shareholders' Equity
206,041 391,411 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$1,134,282 $1,470,945 


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CIRCOR INTERNATIONAL, INC.
Summary of Orders and Backlog
(in millions) (unaudited)
Three Months EndedTwelve Months Ended
Q4 2020Q4 2019Q4 2020Q4 2019
ORDERS (1)
Aerospace & Defense$46.8 $68.5 $254.5 $313.9 
Industrial121.7 168.1 481.6 663.6 
Total Orders$168.5 $236.6 $736.2 $977.5 
Q4 2020Q4 2019
BACKLOG (2)
Aerospace & Defense$182.1 $194.5 
Industrial197.2 226.2 
Total Backlog$379.3 $420.7 
Note 1: Orders do not include the foreign exchange impact due to the re-measurement of customer backlog amounts denominated in foreign currencies. Orders for the twelve months ended December 31, 2020 include orders from businesses divested prior to December 31, 2020 of $4.5 million. Orders for the three months ended December 31, 2019 include orders from businesses divested of $18.0 million ($95.2 million for the twelve months ended December 31, 2019). Divested businesses are Reliability Services, Spence/Nicholson and Instrumentation & Sampling, all in the Industrial segment.
Note 2: Backlog includes unshipped customer orders for which revenue has not been recognized. Backlog at Q4 2019 includes $8.6 million for Industrial related to divested businesses.

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CIRCOR INTERNATIONAL, INC.
Segment Information
(in thousands, except percentages)
UNAUDITED
20192020
As reported1ST QTR2ND QTR3RD QTR4TH QTRTOTAL1ST QTR2ND QTR3RD QTR4TH QTRTOTAL
ORDERS
Aerospace & Defense$88,107$93,405$63,968$68,459$313,939$72,031$76,616$59,105$46,796$254,548
Industrial171,834164,642158,986168,091663,553136,443116,023107,453121,690481,609
Total$259,941$258,047$222,954$236,550$977,492$208,474$192,639$166,558$168,486$736,157
NET REVENUES
Aerospace & Defense$61,240$64,694$67,621$79,070$272,625$65,493$62,241$62,249$77,839$267,822
Industrial177,615181,074169,431163,568691,688126,720123,825124,391130,513505,449
Total$238,855$245,768$237,052$242,638$964,313$192,213$186,066$186,640$208,352$773,271
SEGMENT OPERATING INCOME
Aerospace & Defense$9,374$10,443$13,564$19,099$52,480$12,494$13,142$14,782$18,675$59,093
Industrial22,58126,17421,27820,75790,7905,16912,4069,80712,44139,823
Corporate expenses(8,522)(8,028)(9,248)(7,671)(33,469)(6,588)(9,664)(7,244)(7,789)(31,285)
Total$23,433$28,589$25,594$32,185$109,801$11,075$15,884$17,345$23,327$67,631
SEGMENT OPERATING MARGIN %
Aerospace & Defense15.3 %16.1 %20.1 %24.2 %19.2 %19.1 %21.1 %23.7 %24.0 %22.1 %
Industrial12.7 %14.5 %12.6 %12.7 %13.1 %4.1 %10.0 %7.9 %9.5 %7.9 %
Total9.8 %11.6 %10.8 %13.3 %11.4 %5.8 %8.5 %9.3 %11.2 %8.7 %
20192020
Results of divested businesses (1)1ST QTR2ND QTR3RD QTR4TH QTRTOTAL1ST QTR2ND QTR3RD QTR4TH QTRTOTAL
ORDERS - Industrial$30,611 $24,448 $22,090 $18,047 $95,196 $4,449 $— $— $— $4,449 
NET REVENUES - Industrial$29,787 $26,101 $20,697 $18,602 $95,187 $4,900 $— $— $— $4,900 
SEGMENT OP. INC. -Industrial$6,217 $5,229 $2,677 $3,166 $17,289 $— $— $— $— $— 

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CIRCOR INTERNATIONAL, INC.
Supplemental Information Regarding Divested Businesses
(in thousands, except percentages) (unaudited)

20192020
Results excluding divested businesses1ST QTR2ND QTR3RD QTR4TH QTRTOTAL1ST QTR2ND QTR3RD QTR4TH QTRTOTAL
ORDERS
Aerospace & Defense$88,107$93,405$63,968$68,459$313,939$72,031$76,616$59,105$46,796$254,548
Industrial141,223140,194136,896150,044568,357131,994116,023107,453121,690477,160
Total$229,330$233,599$200,864$218,503$882,296$204,025$192,639$166,558$168,486$731,708
NET REVENUES
Aerospace & Defense$61,240$64,694$67,621$79,070$272,625$65,493$62,241$62,249$77,839$267,822
Industrial147,828154,973148,734144,966596,501121,820123,825124,391130,513500,549
Total$209,068$219,667$216,355$224,036$869,126$187,313$186,066$186,640$208,352$768,371
SEGMENT OPERATING INCOME
Aerospace & Defense$9,374$10,443$13,564$19,099$52,480$12,494$13,142$14,782$18,675$59,093
Industrial16,36420,94518,60117,59173,5015,16912,4069,80712,44139,823
Corporate expenses(8,522)(8,028)(9,248)(7,671)(33,469)(6,588)(9,664)(7,244)(7,789)(31,285)
Total$17,216$23,360$22,917$29,019$92,512$11,075$15,884$17,345$23,327$67,631
SEGMENT OPERATING MARGIN %
Aerospace & Defense15.3 %16.1 %20.1 %24.2 %19.2 %19.1 %21.1 %23.7 %24.0 %22.1 %
Industrial11.1 %13.5 %12.5 %12.1 %12.3 %4.2 %10.0 %7.9 %9.5 %8.0 %
Total8.2 %10.6 %10.6 %13.0 %10.6 %5.9 %8.5 %9.3 %11.2 %8.8 %
(1) Divested businesses are related to the Industrial Segment and include Reliability Services, Spence/Nicholson and Instrumentation & Sampling. Engineered Valves and Distributed Valves are discontinued operations and not reflected in the As Reported figures in accordance with US GAAP.
11


CIRCOR INTERNATIONAL, INC.
Reconciliation of Key Performance Measures to Commonly Used Generally Accepted Accounting Principle Terms
(in thousands, except percentages) (unaudited)

20192020
1ST QTR2ND QTR3RD QTR4TH QTRTOTAL1ST QTR2ND QTR3RD QTR4TH QTRTOTAL
Net Cash (Used In) Provided By Operating Activities$(22,378)$12,339$9,128$16,822$15,913$(23,947)$(24,883)$2,465$23,641$(22,724)
LESS
Capital expenditures, net of sale proceeds (a)
3,6892,995(963)(1,535)4,1863,4123,5272,3303,27512,544
FREE CASH FLOW$(26,067)$9,344$10,091$18,357$11,727$(27,359)$(28,410)$135$20,366$(35,268)
Gross Debt$753,950$748,250$659,100$653,850$653,850$602,288$592,038$540,463$519,938$519,938
Less: Cash & Cash equivalents73,61976,08269,22584,53184,531170,861125,42172,77276,45276,452
GROSS DEBT, NET OF CASH$680,331$672,168$589,875$569,319$569,319$431,427$466,617$467,691$443,486$443,486
TOTAL SHAREHOLDERS' EQUITY$516,177$494,899$375,388$391,411$391,411$290,845$273,351$220,814$206,041$206,041
GROSS DEBT AS % OF EQUITY146%151%176%167%167%207%217%245%252%252%
GROSS DEBT, NET OF CASH AS % OF EQUITY132%136%157%145%145%148%171%212%215%215%
(a) includes capital expenditures, net of sales proceeds of discontinued operations






















12


CIRCOR INTERNATIONAL, INC.
Reconciliation of Key Performance Measures to Commonly Used Generally Accepted Accounting Principle Terms
(in thousands, except percentages) (unaudited)
20192020
1ST QTR 2ND QTR3RD QTR4TH QTRTOTAL1ST QTR 2ND QTR3RD QTR4TH QTRTOTAL
NET (LOSS) INCOME$(4,633)$(18,520)$(112,338)$1,555 $(133,935)$(78,948)$(34,092)$(58,524)$(13,934)$(185,498)
LESS:
Restructuring related inventory charges325 — (1,145)— (820)(602)— 351 — (251)
Restructuring charges, net358 299 5,038 (509)5,186 2,883 588 502 972 4,945 
Acquisition amortization12,077 11,247 11,202 11,189 45,715 10,218 10,681 10,625 10,939 42,463 
Acquisition depreciation1,123 1,106 1,102 1,021 4,352 974 980 1,011 1,021 3,986 
Special (recoveries) charges, net(8,200)3,917 18,481 3,488 17,686 (45,175)5,019 436 473 (39,247)
Goodwill Impairment charge— — — — — 116,182 — — — 116,182 
Income tax impact3,625 (2,266)5,533 (1,752)5,140 7,704 (22,549)53,240 13,125 51,521 
Net loss (income) from discontinued operations5,728 17,156 84,688 1,595 109,167 (9,162)43,848 (341)795 35,140 
ADJUSTED NET INCOME$10,403 $12,939 $12,561 $16,587 $52,491 $4,074 $4,475 $7,300 $13,390 $29,240 
(LOSS) EARNINGS PER COMMON SHARE (Diluted)$(0.23)$(0.93)$(5.64)$0.08 $(6.73)$(3.96)$(1.68)$(2.93)$(0.70)$(9.28)
LESS:
Restructuring related inventory charges0.02 — (0.06)— (0.04)(0.03)— 0.02 — (0.01)
Restructuring charges, net0.02 0.02 0.25 (0.03)0.26 0.14 0.03 0.02 0.05 0.25 
Acquisition amortization0.61 0.57 0.56 0.56 2.30 0.51 0.53 0.53 0.55 2.13 
Acquisition depreciation0.06 0.06 0.06 0.05 0.22 0.05 0.05 0.05 0.05 0.20 
Special (recoveries) charges, net(0.41)0.20 0.93 0.18 0.89 (2.27)0.25 0.02 0.02 (1.96)
Impairment charge— — — — — 5.83 — — — 5.81 
Income tax impact0.18 (0.12)0.28 (0.10)0.24 0.39 (1.11)2.66 0.66 2.58 
Earnings (Loss) per share from discontinued operations0.29 0.86 4.25 0.08 5.48 (0.46)2.16 (0.02)0.04 1.76 
ADJUSTED EARNINGS PER SHARE (Diluted)$0.52 $0.65 $0.63 $0.82 $2.62 $0.20 $0.22 $0.36 $0.66 $1.43 



13


CIRCOR INTERNATIONAL, INC.
Reconciliation of Key Performance Measures to Commonly Used Generally Accepted Accounting Principle Terms
(in thousands, except percentages) (unaudited)

20192020
1ST QTR2ND QTR3RD QTR4TH QTRTOTAL1ST QTR2ND QTR3RD QTR4TH QTRTOTAL
NET (LOSS) INCOME$(4,633)$(18,520)$(112,338)$1,555 $(133,935)$(78,948)$(34,092)$(58,524)$(13,934)$(185,498)
LESS:
Interest expense, net13,094 12,947 11,804 10,763 48,609 9,011 8,486 8,202 8,520 34,219 
Depreciation5,499 5,568 5,551 5,427 22,045 5,121 4,958 4,802 5,504 20,385 
Amortization12,536 11,685 11,629 11,741 47,591 10,516 10,976 10,925 11,245 43,662 
Provision for income taxes5,709 284 7,490 1,193 14,676 8,374 (21,769)54,318 15,299 56,222 
Loss (income) from discontinued operations5,728 17,156 84,688 1,595 109,167 (9,162)43,847 (341)795 35,140 
EBITDA$37,933 $29,121 $8,825 $32,274 $108,152 $(55,088)$12,406 $19,383 $27,429 $4,130 
LESS:
Restructuring related inventory charges (recoveries)325 — (1,145)— (820)(602)— 351 — (251)
Restructuring charges (recoveries), net358 299 5,038 (509)5,186 2,883 588 502 972 4,945 
Special (recoveries) charges, net(8,200)3,917 18,481 3,488 17,686 (45,175)5,019 436 473 (39,247)
Goodwill impairment charge— — — — — 116,182 — — — 116,182 
ADJUSTED EBITDA$30,416 $33,337 $31,199 $35,253 $130,204 $18,200 $18,013 $20,671 $28,873 $85,758 
14


CIRCOR INTERNATIONAL, INC.
Reconciliation of Key Performance Measures to Commonly Used Generally Accepted Accounting Principle Terms
(in thousands, except percentages) (unaudited)

20192020
1ST QTR2ND QTR3RD QTR4TH QTRTOTAL1ST QTR2ND QTR3RD QTR4TH QTRTOTAL
GAAP OPERATING INCOME (LOSS) $17,750 $12,020 $(9,084)$16,996 $37,682 $(73,405)$(1,384)$4,420 $9,923 $(60,446)
LESS:
Restructuring related inventory charges (recoveries)325 — (1,145)— (820)(602)— 351 — (251)
Amortization of inventory step-up— — — — — — — — — — 
Restructuring charges (recoveries), net358 299 5,038 (509)5,186 2,883 588 502 972 4,945 
Acquisition amortization12,077 11,247 11,202 11,189 45,715 10,218 10,681 10,625 10,939 42,463 
Acquisition depreciation1,123 1,106 1,102 1,021 4,352 974 980 1,011 1,021 3,986 
Special (recoveries) charges, net(8,200)3,917 18,481 3,488 17,686 (45,175)5,019 436 473 (39,247)
Goodwill impairment charge— — — — — 116,182 — — — 116,182 
ADJUSTED OPERATING INCOME$23,433 $28,589 $25,594 $32,185 $109,801 $11,075 $15,884 $17,345 $23,327 $67,631 
GAAP OPERATING MARGIN7.4 %4.9 %(3.8)%7.0 %3.9 %(38.2)%(0.7)%2.4 %4.8 %(7.8)%
LESS:
Restructuring related inventory charges (recoveries)0.1 %0.0 %(0.5)%0.0 %(0.1)%(0.3)%0.0 %0.2 %0.0 %0.0 %
Amortization of inventory step-up0.0 %0.0 %0.0 %0.0 %0.0 %0.0 %0.0 %0.0 %0.0 %0.0 %
Restructuring charges (recoveries), net0.1 %0.1 %2.1 %(0.2)%0.5 %1.5 %0.3 %0.3 %0.5 %0.6 %
Acquisition amortization5.1 %4.6 %4.7 %4.6 %4.7 %5.3 %5.7 %5.7 %5.3 %5.5 %
Acquisition depreciation0.5 %0.5 %0.5 %0.4 %0.5 %0.5 %0.5 %0.5 %0.5 %0.5 %
Special (recoveries) charges, net(3.4)%1.6 %7.8 %1.4 %1.8 %(23.5)%2.7 %0.2 %0.2 %(5.1)%
Goodwill impairment charge0.0 %0.0 %0.0 %0.0 %0.0 %60.4 %0.0 %0.0 %0.0 %15.0 %
ADJUSTED OPERATING MARGIN9.8 %11.6 %10.8 %13.3 %11.4 %5.8 %8.5 %9.3 %11.2 %8.7 %
15

CIRCOR INTERNATIONAL INC Reports