Circor reports financial results for fourth quarter and year ended december 31, 2022
Burlington, mass.--(business wire)--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 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 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 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 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 5 % $ 786.9 $ 758.7 4 % gaap operating income (loss) 20.2 (19.0 ) 206 % 62.8 (29.3 ) 314 % adjusted operating income2 33.2 20.5 62 % 87.5 54.3 61 % 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 67 % $ 1.83 $ 1.03 78 % 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 13 % $ 907.2 $ 850.6 7 % segment results (unaudited) ($ in millions) q4 2022 q4 2021 change fy 2022 fy 2021 change aerospace & defense revenue $ 79.9 $ 70.0 14 % $ 282.7 $ 252.5 12 % segment operating income 21.8 18.4 18 % 63.6 56.1 13 % segment operating margin 27.3 % 26.3 % 100 bps 22.5 % 22.2 % 30 bps orders6 $ 70.8 $ 73.9 (4 )% $ 308.2 $ 255.2 21 % industrial revenue1 $ 134.7 $ 134.9 — % $ 504.2 $ 506.1 — % segment operating income2 18.2 8.7 109 % 49.3 28.9 71 % segment operating margin3 13.5 % 6.4 % 710 bps 9.8 % 5.7 % 410 bps orders6 $ 178.1 $ 146.1 22 % $ 599.0 $ 595.4 1 % 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 2 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 $ 8 $ 11 $ 3,249 segment op. inc. -industrial $ (2,479 ) $ (1,754 ) $ (2,470 ) $ (3,191 ) $ (9,893 ) $ (3,190 ) $ (1,074 ) $ (150 ) $ 26 $ (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 )% 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 $ 526,311 $ 547,681 $ 543,100 $ 522,975 $ 516,925 $ 516,925 less: cash & cash equivalents 64,837 58,862 58,013 59,924 59,924 61,122 55,238 47,131 64,275 64,275 gross debt, net of cash $ 473,704 $ 465,529 $ 460,451 $ 466,387 $ 466,387 $ 486,559 $ 487,862 $ 475,844 $ 452,650 $ 452,650 total shareholders' equity $ 138,663 $ 122,185 $ 121,256 $ 133,716 $ 133,716 $ 110,321 $ 103,663 $ 122,082 $ 159,046 $ 159,046 gross debt as % of equity 388 % 429 % 428 % 394 % 394 % 496 % 524 % 428 % 325 % 325 % gross debt, net of cash as % of equity 342 % 381 % 380 % 349 % 349 % 441 % 471 % 390 % 285 % 285 % 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 ) 97 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 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 0.52 0.51 0.51 2.07 0.46 0.45 0.45 0.42 1.78 acquisition depreciation 0.12 0.07 0.07 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 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 ) 97 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 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 ) 97 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 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 % 0.0 % 0.0 % 0.4 % restructuring charges (recoveries), net 1.2 % 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 % 0.7 % 0.7 % 0.9 % 0.6 % 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 % 0.0 % 0.0 % 5.1 % 1.4 % 0.0 % 0.0 % 0.0 % 0.0 % 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 13 % 70,778 73,898 (4 )% 178,069 146,065 22 % divestitures — — — — — — fx 13,096 2,263 10,833 organic 261,943 219,964 19 % 73,041 73,898 (1 )% 188,902 146,065 29 % circor aerospace & defense industrial 4q 22 4q 21 variance 4q 22 4q 21 variance 4q 22 4q 21 variance revenue 214,527 204,917 5 % 79,855 69,979 14 % 134,672 134,938 — % divestitures — — — — — — fx 12,360 2,516 9,844 organic 226,887 204,917 11 % 82,371 69,979 18 % 144,516 134,938 7 % 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 7 % 308,207 255,168 21 % 599,014 595,410 1 % divestitures — — — — — — fx 49,518 9,241 40,277 organic 956,739 850,578 12 % 317,448 255,168 24 % 639,291 595,410 7 % circor aerospace & defense industrial fy 22 fy 21 variance fy 22 fy 21 variance fy 22 fy 21 variance revenue 786,919 758,667 4 % 282,715 252,541 12 % 504,204 506,126 — % divestitures — — — — — — fx 42,923 8,037 34,886 organic 829,842 758,667 9 % 290,752 252,541 15 % 539,090 506,126 7 % 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.
