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CIRCOR Reports First-Quarter 2016 Financial Results

CIR, +0.00% a leading provider of valves and other highly engineered products for markets including oil & gas, power generation and aerospace & defense, today announced financial results for the first quarter ended April 3, 2016.

First-Quarter 2016 Highlights

  • Delivered Revenue of $151 million and Adjusted EPS of $0.52
  • Accelerated cost control and restructuring actions to improve bottom-line performance
  • Achieved Energy adjusted operating margin of 12.6%
  • Expanded Aerospace & Defense adjusted operating margin to 9.3%

“CIRCOR delivered solid first-quarter financial results, demonstrating ongoing progress on our margin expansion and simplification strategy,” said Scott Buckhout, President and Chief Executive Officer. “Despite significant headwinds in our Energy markets, we maintained strong margin performance and delivered year-over-year sales growth in our engineered valve and control valve businesses. Aerospace & Defense continued to improve its bottom line results, expanding margins 130 basis points over last year.”

“Going forward, we are focused on laying the foundation for long-term above market growth. We continue to improve our operations while we carefully invest in areas with the best long-term growth potential,” added Buckhout. “In addition, we are using the ongoing weakness in our Energy markets as an opportunity to further accelerate our cost reduction strategy. Our simplification and restructuring actions launched to date remain on track.”

“Finally we remain committed to creating shareholder value through growth, margin expansion, strong cash flow, and disciplined capital deployment,” concluded Buckhout.

Second-Quarter 2016 Guidance
For the second quarter of 2016, the Company will provide its guidance during the conference call later today.

Selected Consolidated Results

($ millions except EPS) Q1 2016 Q1 2015 Change
Revenue $ 150.8 $ 165.9 (9 )%
GAAP Operating Income $ 5.5 $ 12.3 (55 )%
Adjusted Operating Income [1] $ 11.3 $ 14.6 (23 )%
Adjusted Operating Margin [1] 7.5 % 8.8 % (130) bps
GAAP Earnings Per Share (Diluted) $ 0.23 $ 0.50 (54 )%
Adjusted Earnings Per Share (Diluted) [1] $ 0.52 $ 0.60 (13 )%
Free Cash Flow $ 3.7 $ (18.4 ) NM
Orders $ 136.8 $ 182.3 (25 )%

Segment Results

($ millions) Q1 2016 Q1 2015 Change
Energy
Revenue $ 112.6 $ 127.6 (12 )%
Adjusted Operating Margin [1] 12.6 % 13.8 % (120) bps
Orders $ 99.8 $ 143.1 (30 )%
Aerospace & Defense
Revenue $ 38.2 $ 38.3 0 %
Adjusted Operating Margin [1] 9.3 % 8.0 % 130 bps
Orders $ 36.9 $ 39.2 (6 )%

1. Consolidated and Segment Results for Q1 2016 exclude special, restructuring and impairment charges totaling $5.8 million. This includes (i) $2.8 million related to the closure of the Brazil manufacturing operations; (ii) $1.9 million for non-cash acquisition-related intangible amortization expense; (iii) fixed asset write-down of $1.4 million for the closure of the California facility and (iv) other items for a net gain of $0.3 million. Q1 2015 results excluded special and restructuring charges totaling $2.2 million.

Conference Call Information
CIRCOR International will hold a conference call to review its financial results today, April 29, 2016, at 9:00 a.m. ET. To listen to the conference call and view the accompanying presentation slides, visit “Webcasts & Presentations” in the “Investors” portion of the CIRCOR website. The call also can be accessed by dialing (877) 407-5790 or (201) 689-8328. The webcast will be archived for one year on the Company’s website.

Use of Non-GAAP Financial Measures
Adjusted net income, adjusted earnings per share (diluted), adjusted operating margin, and free cash flow are non-GAAP financial measures and are intended to serve as a complement to results provided in accordance with accounting principles generally accepted in the United States. CIRCOR believes that such information provides an additional measurement and consistent historical comparison of the Company’s performance. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in this news release.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E 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 future performance, including the realization of cost reductions from restructuring activities. Actual events, performance or results could differ materially from the anticipated events, performance or results expressed or implied by such forward-looking statements. 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 highly engineered products and sub-systems for markets including oil & gas, power generation and aerospace & defense. CIRCOR has a diversified product portfolio with recognized, market-leading brands that fulfill its customers’ unique application 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 industry talent. For more information, visit the Company’s investor relations web site at http://investors.circor.com.

CIRCOR INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

UNAUDITED

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