Circor reports first-quarter 2022 financial results; announces the appointment of tony najjar as president and chief executive officer and arjun sharma as chief financial officer
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 gaap and adjusted financial results for the first quarter ended april 3, 2022. results are in line with previously disclosed selected preliminary financial expectations. q1 2022 overview results as reported: orders of $222 million, down (2%) reported and up 1% organically aerospace & defense orders of $78 million, up 7% reported and 8% organically industrial orders of $144 million, down (7%) reported and (2%) organically aerospace & defense orders of $78 million, up 7% reported and 8% organically industrial orders of $144 million, down (7%) reported and (2%) organically backlog of $477 million, up 12% reported driven by strong demand in industrial revenue of $186 million up 5% reported and 8% organically aerospace & defense revenue of $63 million, up 8% reported and 10% organically industrial revenue of $122 million, up 4% reported and 8% organically aerospace & defense revenue of $63 million, up 8% reported and 10% organically industrial revenue of $122 million, up 4% reported and 8% organically gaap operating (loss) of ($11.8) million, down (124%) reported gaap operating margin of (6.3%) adjusted operating income $10.4 million, up 53% adjusted operating margin of 5.6%, up 180 bps q1 2022 overview results excluding pipeline engineering: orders of $219 million, down (1%) adjusted and up 2% organically aerospace & defense orders of $78 million, up 7% adjusted and 8% organically industrial orders of $141 million, down (5%) adjusted and flat organically aerospace & defense orders of $78 million, up 7% adjusted and 8% organically industrial orders of $141 million, down (5%) adjusted and flat organically backlog of $477 million, up 13% adjusted, driven by strong demand in industrial revenue of $183 million up 5% adjusted and 9% organically aerospace & defense revenue of $63 million, up 8% adjusted and 10% organically industrial revenue of $119 million, up 4% adjusted and 8% organically aerospace & defense revenue of $63 million, up 8% adjusted and 10% organically industrial revenue of $119 million, up 4% adjusted and 8% organically adjusted operating income $13.6 million, up 47% adjusted adjusted operating margin of 7.4%, up 210 bps circor president and ceo, tony najjar said, “our team delivered solid first quarter 2022 results highlighted by continued strong orders performance in a&d and core industrial businesses partially offset by lumpiness in our downstream business. revenues for the quarter were up 9% organically excluding pipeline engineering, driven by both segments. excluding pipeline engineering, adjusted operating income for the quarter was up 47% and adjusted operating margin up 210 basis points. with a focus on our strategic priorities driving value-based pricing, simplification and cost out actions, we continue to position the company for growth, expanding margins and improving cash flow.” selected consolidated results (unaudited) ($ millions except eps) april 3, 2022 as restated april 4, 2021 change orders 221.6 226.7 -2 % orders excluding pipeline engineering1 219.4 221.2 -1 % revenue $ 185.7 $ 176.5 5 % revenue excluding pipeline engineering1 182.6 173.5 5 % gaap operating (loss) income (11.8 ) (5.3 ) -124 % adjusted operating income2 10.4 6.8 53 % adjusted operating income excluding pipeline engineering1,2 13.6 9.3 47 % gaap operating margin -6.3 % -3.0 % -330 bps adjusted operating margin2 5.6 % 3.8 % 180 bps adjusted operating margin excluding pipeline engineering1,2 7.4 % 5.3 % 210 bps gaap (loss) per share $ (1.06 ) $ (0.59 ) -81 % adjusted earnings per share (diluted)2 $ 0.05 $ 0.02 150 % operating cash flow (15.9 ) (19.2 ) 17 % free cash flow3 (19.5 ) (22.6 ) 14 % segment results (unaudited) ($ in millions) april 3, 2022 as restated april 4, 2021 change aerospace & defense orders $ 77.9 $ 73.0 7 % revenue 63.4 58.5 8 % segment operating income 11.3 10.0 13 % segment operating margin 17.9 % 17.1 % 80 bps industrial orders $ 143.7 $ 153.7 -7 % orders - excluding pipeline engineering1 141.5 148.2 -5 % revenue 122.3 118.0 4 % revenue - excluding pipeline engineering1 $ 119.3 $ 115.0 4 % segment operating income 6.9 5.8 18 % segment operating income excluding pipeline engineering 10.0 8.3 20 % segment operating margin 5.6 % 4.9 % 70 bps segment operating margin (adjusted) 8.4 % 7.2 % 120 bps company announces executive appointments circor also announced that tony najjar has been appointed president & chief executive officer, and arjun “aj” sharma has been appointed chief financial officer. mr. najjar, who joined the company in 2015, has most recently served as the chief operating officer and interim president & chief executive officer. mr. sharma, who joined the company in 2009, has most recently served as senior vice president, business development and interim chief financial officer. mr. sharma will retain his leadership of business development in his new role. “since being appointed to their interim roles, tony and aj have demonstrated their ability to lead the company through challenging times,” said helmuth ludwig, chair of circor’s board of directors. “as the board continues to evaluate strategic alternatives for the company, we believe tony and aj are the right leaders for circor. while completing the accounting review that occurred earlier this year, they have also stabilized business operations, focused on employee engagement, strengthened customer relationships and are driving growth and margin expansion initiatives. we look forward to partnering with tony and aj to create value for our stakeholders.” use of non-gaap financial measures in this press release, the company uses the non-gaap financial measures backlog, backlog excluding pipeline engineering, orders, orders excluding pipeline engineering, revenue excluding pipeline engineering, adjusted operating income, adjusted operating income excluding pipeline engineering, adjusted operating margin, adjusted operating margin excluding pipeline engineering, adjusted earnings per share and free cash flow. 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 also allow investors and others to compare circor’s current financial results with circor’s past financial results in a consistent manner. 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. 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 backlog, orders and revenue, we also discuss these changes on an “organic” basis. organic is calculated assuming the divestitures and/or exited business are completed prior to april 3, 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. 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. 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. 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 findings and conclusions of the audit committee’s review; 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 of the company regaining compliance with the nyse’s continued listing standards; the timing and outcome, if any, of the company’s strategic alternatives review and its exit from the pipeline engineering business unit; the impact on the company of the situation in russia and ukraine; and the risks detailed from time to time in the company’s periodic reports filed with the sec. before making any investment decisions regarding circor, the company strongly advises you to read the section entitled “risk factors” in its 2021 annual report on form 10-k, which can be accessed under the “investors” link of the company’s website at www.circor.com. 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. circor international, inc consolidated statement of operations (in thousands, except per share data) (unaudited) three months ended april 3, 2022 as restated april 4, 2021 net revenues $ 185,655 $ 176,451 cost of revenues 130,372 124,889 gross profit 55,283 51,562 selling, general and administrative expenses 58,069 57,637 special and restructuring charges (recoveries), net 9,003 (809 ) operating (loss) (11,789 ) (5,266 ) other expense (income): interest expense, net 9,456 8,369 other (income) expense (1,287 ) (1,781 ) total other expense, net 8,169 6,588 (loss) from continuing operations before income taxes (19,958 ) (11,854 ) provision for (benefit from) income taxes 1,523 (297 ) (loss) from continuing operations, net of tax $ (21,481 ) $ (11,557 ) (loss) from discontinued operations, net of tax $ — $ (239 ) net (loss) $ (21,481 ) $ (11,796 ) basic (loss) per common share: basic from continuing operations $ (1.06 ) $ (0.58 ) basic from discontinued operations $ — $ (0.01 ) net (loss) $ (1.06 ) $ (0.59 ) diluted (loss) per common share: diluted from continuing operations $ (1.06 ) $ (0.58 ) diluted from discontinued operations $ — $ (0.01 ) net (loss) $ (1.06 ) $ (0.59 ) weighted average common shares outstanding: basic 20,310 20,054 diluted 20,310 20,054 circor international, inc. consolidated statements of cash flows (in thousands) (unaudited) three months ended april 3, 2022 as restated april 4, 2021 operating activities net (loss) $ (21,481 ) $ (11,796 ) income (loss) from discontinued operations, net of income taxes — (239 ) (loss) from continuing operations, net of tax (21,481 ) (11,557 ) adjustments to reconcile net (loss) to net cash provided by (used in) operating activities: depreciation 5,000 6,509 amortization 9,397 10,696 change in provision for bad debt expense (89 ) (465 ) write down of inventory 439 188 compensation expense of share-based plans (84 ) 1,402 amortization of debt issuance costs 514 995 deferred tax provision — (1,011 ) (gain) on sale of businesses — (1,947 ) other impairment charges 8,011 — changes in operating assets and liabilities, net of effects of acquisitions and divestitures: trade accounts receivable 4,242 (3,707 ) inventories (15,465 ) (8,255 ) prepaid expenses and other assets (5,671 ) (8,875 ) accounts payable, accrued expenses and other liabilities (737 ) (2,547 ) net cash used in continuing operations activities (15,924 ) (18,574 ) net cash used in discontinued operations activities — (636 ) net cash (used in) operating activities (15,924 ) (19,210 ) investing activities additions of property, plant and equipment (3,607 ) (3,394 ) proceeds from the sale of property, plant and equipment 15 2 proceeds from beneficial interest of factored receivables 927 812 proceeds from sale of business — 7,193 net cash (used in) provided by investing activities (2,665 ) 4,613 financing activities proceeds from long-term debt 51,325 63,500 payments of long-term debt (30,875 ) (46,500 ) net change in short-term borrowings 925 (22 ) proceeds from the exercise of stock options — 151 withholding tax payments on net share settlements on equity rewards (821 ) (3,274 ) net cash used in financing activities 20,554 13,855 effect of exchange rate changes on cash, cash equivalents and restricted cash (712 ) (1,615 ) increase (decrease) in cash, cash equivalents and restricted cash 1,253 (2,357 ) cash, cash equivalents and restricted cash at beginning of period 61,374 68,607 cash, cash equivalents, and restricted cash at end of period $ 62,627 $ 66,250 circor international, inc. consolidated balance sheets (in thousands, except share and per share data) (unaudited) april 3, 2022 december 31, 2021 assets current assets: cash and cash equivalents $ 61,122 $ 59,924 trade accounts receivable, net 95,638 100,149 inventories 134,540 123,343 prepaid expenses and other current assets 113,162 110,749 total current assets 404,462 394,165 property, plant and equipment, net 150,546 154,461 other assets: goodwill 122,256 122,906 intangibles, net 290,335 303,476 deferred income taxes 764 756 other assets 43,275 43,534 total assets $ 1,011,638 $ 1,019,298 liabilities and shareholders’ equity current liabilities: accounts payable $ 83,134 $ 83,382 accrued expenses and other current liabilities 75,711 81,998 accrued compensation and benefits 30,560 26,551 short-term borrowings and current portion of long-term debt 2,531 1,611 total current liabilities 191,936 193,542 long-term debt 532,580 511,694 deferred income taxes 21,283 21,721 pension liability, net 119,170 120,881 other non-current liabilities 36,348 37,744 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; 21,683,147 and 21,633,131 shares issued at april 3, 2022 and december 31, 2021 respectively 217 217 additional paid-in capital 454,269 454,852 accumulated deficit (219,562 ) (198,081 ) common treasury stock, at cost (1,372,488 shares at april 3, 2022 and december 31, 2021) (74,472 ) (74,472 ) accumulated other comprehensive loss, net of tax (50,131 ) (48,800 ) total shareholders’ equity 110,321 133,716 total liabilities and shareholders’ equity $ 1,011,638 $ 1,019,298 circor international, inc. summary of orders and backlog (in millions) (unaudited) three months ended april 3, 2022 as restated april 4, 2021 orders (1) aerospace & defense $ 77.9 $ 73.0 industrial 143.7 153.7 total orders $ 221.6 $ 226.7 april 3, 2022 as restated april 4, 2021 backlog (2) aerospace & defense $ 199.7 $ 198.2 industrial 276.8 226.4 total backlog $ 476.5 $ 424.6 note 1: orders do not include the foreign exchange impact due to the re-measurement of customer backlog amounts denominated in foreign currencies. industrial includes $2.3 million and $5.5 million orders in pipeline engineering for 2022 and 2021 respectively. note 2: backlog is calculated as current period orders plus unshipped customer orders from prior periods for which revenue has not been recognized. industrial includes $1.2 million in pipeline engineering for 2021. circor international, inc. segment information (in thousands, except percentages) (unaudited) 2021 as restated 2022 as reported 1st qtr 2nd qtr 3rd qtr 4th qtr total 1st qtr orders aerospace & defense $ 72,999 $ 54,243 $ 54,028 $ 73,898 $ 255,168 $ 77,890 industrial 153,695 155,959 139,691 146,065 595,410 143,727 total $ 226,693 $ 210,203 $ 193,719 $ 219,964 $ 850,578 $ 221,617 net revenues aerospace & defense $ 58,488 $ 60,613 $ 63,461 $ 69,979 $ 252,541 $ 63,370 industrial 117,963 126,977 126,248 134,938 506,126 122,285 total $ 176,451 $ 187,590 $ 189,709 $ 204,917 $ 758,667 $ 185,655 segment operating income aerospace & defense $ 9,988 $ 11,741 $ 15,927 $ 18,416 $ 56,073 $ 11,320 industrial 5,834 7,237 7,124 8,700 28,896 6,857 corporate expenses (9,035 ) (7,950 ) (7,015 ) (6,636 ) (30,638 ) (7,770 ) total $ 6,787 $ 11,028 $ 16,036 $ 20,480 $ 54,331 $ 10,407 segment operating margin % aerospace & defense 17.1 % 19.4 % 25.1 % 26.3 % 22.2 % 17.9 % industrial 4.9 % 5.7 % 5.6 % 6.4 % 5.7 % 5.6 % total 3.8 % 5.9 % 8.5 % 10.0 % 7.2 % 5.6 % 2021 as restated 2022 pipeline engineering (1) 1st qtr 2nd qtr 3rd qtr 4th qtr total 1st qtr orders - industrial $ 5,531 $ 5,192 $ 6,575 $ 7,121 $ 24,419 $ 2,260 net revenues - industrial $ 2,994 $ 3,124 $ 3,236 $ 5,248 $ 14,602 $ 3,012 segment op. inc. -industrial $ (2,479 ) $ (1,754 ) $ (2,470 ) $ (3,191 ) $ (9,893 ) $ (3,190 ) 1) excluding pipeline engineering business as related to the industrial segment with respect to accounting irregularities noted on march 14, 2022 8-k filing. circor international, inc. supplemental information regarding pipeline engineering (in thousands, except percentages) (unaudited) 2021 as restated 2022 results excluding pipeline engineering 1st qtr 2nd qtr 3rd qtr 4th qtr total 1st qtr orders aerospace & defense $ 72,999 $ 54,243 $ 54,028 $ 73,898 $ 255,168 $ 77,890 industrial 148,164 150,767 133,116 138,944 570,991 141,467 total $ 221,163 $ 205,010 $ 187,144 $ 212,842 $ 826,159 $ 219,357 net revenues aerospace & defense $ 58,488 $ 60,613 $ 63,461 $ 69,979 $ 252,541 $ 63,370 industrial 114,969 123,853 123,012 129,690 491,524 119,273 total $ 173,457 $ 184,466 $ 186,473 $ 199,669 $ 744,065 $ 182,643 segment operating income aerospace & defense $ 9,988 $ 11,741 $ 15,927 $ 18,416 $ 56,073 $ 11,320 industrial 8,313 8,991 9,594 11,891 38,789 10,047 corporate expenses (9,035 ) (7,950 ) (7,015 ) (6,636 ) (30,638 ) (7,770 ) total $ 9,266 $ 12,782 $ 18,506 $ 23,671 $ 64,224 $ 13,597 segment operating margin % aerospace & defense 17.1 % 19.4 % 25.1 % 26.3 % 22.2 % 17.9 % industrial 7.2 % 7.3 % 7.8 % 9.2 % 7.9 % 8.4 % total 5.3 % 6.9 % 9.9 % 11.9 % 8.6 % 7.4 % circor international, inc. reconciliation of key performance measures to commonly used generally accepted accounting principle terms (in thousands, except percentages) (unaudited) 2021 as restated 2022 1st qtr 2nd qtr 3rd qtr 4th qtr total 1st qtr net cash (used in) provided by operating activities $ (19,210 ) $ 8,866 $ 10,197 $ 10,595 $ 10,448 $ (15,924 ) less capital expenditures, net of sale proceeds (a) 3,392 2,644 4,541 4,168 14,745 3,592 free cash flow $ (22,602 ) $ 6,222 $ 5,656 $ 6,427 $ (4,297 ) $ (19,516 ) gross debt $ 538,541 $ 524,391 $ 518,464 $ 526,311 $ 526,311 $ 546,775 less: cash & cash equivalents 64,837 58,862 58,013 59,924 59,924 61,122 gross debt, net of cash $ 473,704 $ 465,529 $ 460,451 $ 466,387 $ 466,387 $ 485,653 total shareholders' equity $ 138,663 $ 122,185 $ 121,256 $ 133,716 $ 133,716 $ 110,321 gross debt as % of equity 388 % 429 % 428 % 394 % 394 % 496 % gross debt, net of cash as % of equity 342 % 381 % 380 % 349 % 349 % 440 % (a) includes capital expenditures, net of proceeds of asset sales from gaap operating cash flow. circor international, inc. reconciliation of key performance measures to commonly used generally accepted accounting principle terms (in thousands, except percentages) (unaudited) 2021 as restated 2022 1st qtr 2nd qtr 3rd qtr 4th qtr total 1st qtr net (loss) income $ (11,796 ) $ (18,784 ) $ (2,630 ) $ (28,427 ) $ (61,638 ) $ (21,481 ) less: restructuring related inventory charges (recoveries), net — 958 (60 ) (299 ) 599 2,757 restructuring charges, net 2,060 2,281 (312 ) 205 4,234 6,447 acquisition amortization 10,487 10,498 10,417 10,369 41,772 9,391 acquisition depreciation 2,375 1,327 1,412 1,397 6,511 1,045 special (recoveries) charges, net (2,870 ) 4,523 1,126 17,259 20,038 2,556 goodwill impairment charge — — — 10,500 10,500 — income tax impact (44 ) 2,425 (596 ) (1,622 ) 163 384 net loss (income) from discontinued operations 239 878 (2,510 ) (13 ) (1,406 ) — adjusted net income $ 451 $ 4,106 $ 6,847 $ 9,369 $ 20,773 $ 1,099 (loss) earnings per common share (diluted) $ (0.58 ) $ (0.91 ) $ (0.13 ) $ (1.38 ) $ (3.00 ) (1.06 ) less: restructuring related inventory charges — 0.05 — (0.01 ) 0.03 0.14 restructuring charges, net 0.10 0.11 (0.02 ) 0.01 0.21 0.32 acquisition amortization 0.51 0.51 0.51 0.51 2.04 0.46 acquisition depreciation 0.12 0.06 0.07 0.07 0.32 0.05 special (recoveries) charges, net (0.14 ) 0.22 0.05 0.84 0.98 0.13 impairment charge — — — 0.51 0.51 — income tax impact — 0.12 (0.03 ) (0.08 ) 0.01 0.02 (loss) earnings) per share from discontinued operations 0.01 0.04 (0.12 ) — (0.07 ) — adjusted earnings per share (diluted) $ 0.02 $ 0.20 $ 0.33 $ 0.46 $ 1.01 $ 0.05 circor international, inc. reconciliation of key performance measures to commonly used generally accepted accounting principle terms (in thousands, except percentages) (unaudited) 2021 as restated 2022 1st qtr 2nd qtr 3rd qtr 4th qtr total 1st qtr net (loss) income $ (11,796 ) $ (18,784 ) $ (2,629 ) $ (28,426 ) $ (61,635 ) $ (21,481 ) less: interest expense, net 8,369 7,958 7,997 8,040 32,365 9,456 depreciation 6,509 5,460 5,536 5,348 22,854 5,000 amortization 10,696 10,657 10,576 10,375 42,304 9,397 provision for income taxes (297 ) 2,659 850 1,970 5,182 1,523 loss (income) from discontinued operations 239 878 (2,510 ) (13 ) (1,406 ) — ebitda $ 13,720 $ 8,828 $ 19,820 $ (2,706 ) $ 39,664 $ 3,895 less: restructuring related inventory charges (recoveries) — 958 (60 ) (299 ) 599 2,757 restructuring charges, net 2,060 2,281 (312 ) 205 4,234 6,447 special (recoveries) charges, net (2,870 ) 4,523 1,126 17,259 20,038 2,556 goodwill impairment charge — — — 10,500 10,500 — adjusted ebitda $ 12,910 $ 16,590 $ 20,574 $ 24,959 $ 75,035 $ 15,655 circor international, inc. reconciliation of key performance measures to commonly used generally accepted accounting principle terms (in thousands, except percentages) (unaudited) 2021 as restated 2022 1st qtr 2nd qtr 3rd qtr 4th qtr total 1st qtr gaap operating income (loss) $ (5,266 ) $ (8,557 ) $ 3,451 $ (18,952 ) $ (29,323 ) $ (11,789 ) less: restructuring related inventory charges (recoveries) — 958 (60 ) (299 ) 599 2,757 restructuring charges, net 2,060 2,281 (312 ) 205 4,234 6,447 acquisition amortization 10,487 10,498 10,417 10,369 41,772 9,391 acquisition depreciation 2,375 1,327 1,412 1,397 6,511 1,045 special (recoveries) charges, net (2,870 ) 4,523 1,126 17,259 20,038 2,556 goodwill impairment charge — — — 10,500 10,500 — adjusted operating income $ 6,787 $ 11,029 $ 16,035 $ 20,479 $ 54,331 $ 10,407 gaap operating margin (3.0 ) % (4.6 ) % 1.8 % (9.2 ) % (3.9 ) % (6.3 ) % less: restructuring related inventory charges (recoveries) — % 0.5 % — % (0.1 ) % 0.1 % 1.5 % restructuring charges, net 1.2 % 1.2 % (0.2 ) % 0.1 % 0.6 % 3.5 % acquisition amortization 5.9 % 5.6 % 5.5 % 5.1 % 5.5 % 5.1 % acquisition depreciation 1.3 % 0.7 % 0.7 % 0.7 % 0.9 % 0.6 % special (recoveries) charges, net (1.6 ) % 2.4 % 0.6 % 8.4 % 2.6 % 1.4 % goodwill impairment charge — % — % — % 5.1 % 1.4 % — % adjusted operating margin 3.8 % 5.9 % 8.5 % 10.0 % 7.2 % 5.6 % note regarding financial statements: restated 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.
