Business Wire | Aug 10, 2021 06:05AM EDT

CIRCOR Delivers Strong Second Quarter Results and Reaffirms 2021 Guidance

Aug. 10, 2021

BURLINGTON, Mass.--(BUSINESS WIRE)--Aug. 10, 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 second quarter ended July 4, 2021.

Second Quarter 2021 Overview:

* Orders of $210 million, up 9% reported and 4% organically Industrial orders of $156 million, up 34% reported and 27% organically due to strength across almost all end markets and regions Aerospace & Defense orders of $54 million, down (29)% reported and (31)% organically due to timing of large Defense orders * Revenue of $190 million, up 2% reported and down (2)% organically Industrial revenue of $130 million, up 5% reported and down (1)% organically Aerospace & Defense revenue of $61 million, down (2)% reported and (5)% organically * GAAP operating margin of (2.6)%; Adjusted operating margin of 7.7%, down 80 bps * GAAP loss per share of $(0.77); Adjusted earnings per share of $0.35, up 59% * GAAP operating cash flow of $11 million; Free cash flow of $8 million, 115% of adj. net income * Total debt reduced by $14 million versus prior quarter driven by 2Q'21 free cash flow performance

CIRCOR President and CEO Scott Buckhout said, "Our team delivered another solid quarter highlighted by 27% organic orders growth in our Industrial business and strong free cash flow conversion of 115%. Revenue and earnings per share were both in line with our expectations and we are encouraged by the pace of recovery across our Industrial and Aerospace & Defense end markets. Our performance in the first half positions CIRCOR for a strong second half and achievement of our 2021 commitments."

Mr. Buckhout continued, "In addition to our financial performance, we continue to make progress on our strategic priorities. We launched 21 products in the first half of 2021 and remain on track to deliver 45 new products in 2021. In an effort to build on our simplification program and accelerate sustainable margin expansion, we kicked off 80/20 in three of our largest Industrial businesses. And finally, we used our free cash flow generated in the quarter to pay down debt. We expect greater than one turn of leverage improvement in 2021."

Mr. Buckhout concluded, "Based on our strong orders performance in the 1st half, and our $436 million backlog, we're confident that we will deliver on our 2021 organic revenue and adjusted EPS guidance provided in May. Going forward, we continue to focus on creating long-term value for shareholders by positioning the Company for growth, expanding margins, generating strong free cash flow, and de-levering the balance sheet."

3Q'21 Guidance Update

In the third quarter of 2021, CIRCOR expects reported revenue to increase 10 to 12% and organic revenue to increase 8 to 10%. On a reported basis, Industrial revenue is expected to grow 7 to 11% driven by increased deliveries across end markets and regions. Aerospace & Defense revenue is expected to increase 12 to 15% driven by the timing of large Defense shipments and favorable year-over-year comparisons in our Commercial end markets. In addition, CIRCOR expects adjusted EPS of $0.55 to $0.60 (+53% to 67% versus prior year) and free cash flow conversion of 120 to 140% ($13 to $17 million).

2021 Guidance

For the full year of 2021, CIRCOR reiterated its guidance of organic revenue growth of 2 to 4%, Adjusted EPS of $2.10 to $2.30, and adjusted net income to free cash flow conversion of 85% to 95%.

Presentation slides that provide supporting information to this guidance and second-quarter 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.

Conference Call Information

CIRCOR International will hold a conference call to review its financial results at 9:00 a.m. ET today, August 10, 2021. 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. 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 Preliminary Consolidated Results

($ millions Q2 2021 Q2 2020 Change Q2 YTD 2021 Q2 YTD 2020 Changeexcept EPS)

Orders $ 210.2 $ 192.6 9 % $ 436.9 $ 401.1 9 %

Orders -excluding 210.2 192.6 9 % 436.9 396.7 10 %divestedbusinesses^1

Revenue $ 190.3 $ 186.1 2 % $ 371.0 $ 378.3 -2 %

Revenue -excluding 190.3 186.1 2 % 371.0 373.4 -1 %divestedbusinesses^1

GAAPoperating (4.9 ) (1.4 ) -250 % (4.6 ) (74.8 ) 94 %(loss) income

Adjustedoperating 14.6 15.9 -8 % 27.1 27.0 - %income^2

GAAP -190 1860operating (2.6 ) % (0.7 ) % bps (1.2 ) % (19.8 ) % bpsmargin

Adjusted -80operating 7.7 % 8.5 % bps 7.3 % 7.1 % 20 bpsmargin^2

Adjustedoperating -80margin ex 7.7 % 8.5 % bps 7.3 % 7.2 % 10 bpsdivestitures^2

GAAP loss pershare $ (0.77 ) $ (1.68 ) 54 % $ (1.13 ) $ (5.66 ) 80 %(diluted)

Adjustedearnings per $ 0.35 $ 0.22 59 % $ 0.60 $ 0.42 43 %share(diluted)^2

Operating 10.9 (24.9 ) 144 % (6.7 ) (48.8 ) 86 %cash flow

Free cash 8.3 (28.4 ) 129 % (12.8 ) (55.8 ) 77 %flow^3

Segment Results

($ in millions) Q2 2021 Q2 2020 Change

Aerospace & Defense

Orders $ 54.2 $ 76.6 -29 %

Revenue $ 60.8 $ 62.2 -2 %

Segment operating income 12.1 13.1 -8 %

Segment operating margin 19.9 % 21.1 % -120 bps



Industrial

Orders $ 156.0 $ 116.0 34 %

Revenue $ 129.6 $ 123.8 5 %

Segment operating income 10.4 12.4 -16 %

Segment operating margin (adjusted) 8.0 % 10.0 % -200 bps

* 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 orders and revenues. Divested businesses include Instrumentation & Sampling (all Industrial) which was sold during Q1 2020. * Adjusted consolidated and segment results for Q2 2021 exclude net loss from discontinued operations of $0.9 million and net loss from non-cash acquisition-related intangible amortization, special and restructuring charges totaling $19.6 million ($21.9 million after tax). These charges include: (i) $11.8 million for non-cash acquisition-related intangible amortization and depreciation expense; (ii) $3.0 million of special charges related to the Heater & Control Valve divestiture; (iii) $3.8 million of other special and restructuring charges; and (iv) $1.0 million of restructuring related inventory charges. Adjusted consolidated and segment results for Q2 2020 exclude net loss from discontinued operations of $43.8 million and net loss from non-cash acquisition-related intangible amortization, special and restructuring charges totaling $17.3 million ($5.3 million income, net of tax). These charges include: (i) $11.7 million for non-cash acquisition-related intangible amortization and depreciation expense; (ii) $4.6 million of professional fees associated with an unsolicited tender offer to acquire all outstanding shares of the Company's common stock; and (iii) $1.0 million of other special and restructuring charges. * 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. 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. We exclude these costs because we do not believe they are indicative of our normal operating costs.

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 July 4, 2021 were completed on January 1, 2020 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 press 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, 2020, 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.

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 3,200 employees and is headquartered in Burlington, Massachusetts. For more information, visit the Company's investor relations website at http://investors.circor.com.

CIRCOR INTERNATIONAL, INC.

Condensed Consolidated Statements of Operations

(in thousands, except per share data) (unaudited)

Three Months Ended Six Months Ended

July 4, June 28, July 4, June 28, 2021 2020 2021 2020



Net revenues $ 190,346 $ 186,066 $ 371,001 $ 378,279

Cost of revenues 130,460 127,105 255,034 259,275

Gross profit 59,886 58,961 115,967 119,004

Selling, general andadministrative 58,023 54,738 114,526 114,296 expenses

Goodwill impairment - - - 116,182 charge

Special andrestructuring charges 6,803 5,607 5,995 (36,685 )(recoveries), net

Operating income (4,940 ) (1,384 ) (4,554 ) (74,789 )(loss)

Other expense (income), net:

Interest expense, net 7,957 8,486 16,327 17,497

Other expense (1,173 ) 2,144 (2,676 ) (536 )(income), net

Total other expense, 6,784 10,630 13,651 16,961 net

(Loss) income fromcontinuing operations (11,724 ) (12,014 ) (18,205 ) (91,750 )before income taxes

Provision for (benefit 2,961 (21,769 ) 3,360 (13,395 )from) income taxes

(Loss) income fromcontinuing operations, (14,685 ) 9,755 (21,565 ) (78,355 )net of tax

Income (loss) fromdiscontinued (878 ) (43,847 ) (1,117 ) (34,685 )operations, net of tax

Net loss $ (15,563 ) $ (34,092 ) $ (22,682 ) $ (113,040 )



Basic income (loss) per common share:

Basic from continuing $ (0.73 ) $ 0.49 $ (1.07 ) $ (3.93 )operations

Basic fromdiscontinued $ (0.04 ) $ (2.19 ) $ (0.06 ) $ (1.74 )operations

Net loss $ (0.77 ) $ (1.71 ) $ (1.13 ) $ (5.66 )

Diluted income (loss) per common share:

Diluted from $ (0.73 ) $ 0.48 $ (1.07 ) $ (3.93 )continuing operations

Diluted fromdiscontinued $ (0.04 ) $ (2.16 ) $ (0.06 ) $ (1.74 )operations

Net loss $ (0.77 ) $ (1.68 ) $ (1.13 ) $ (5.66 )



Weighted averagenumber of common shares outstanding:

Basic 20,230 19,987 20,143 19,962

Diluted 20,230 20,286 20,143 19,962

CIRCOR INTERNATIONAL, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands) (unaudited)

Six Months Ended

July 4, 2021

June 28, 2020

OPERATING ACTIVITIES

Net loss

$

(22,682

)

$

(113,040

)

Loss from discontinued operations, net of income taxes

(1,117

)

(34,685

)

Loss from continuing operations

(21,565

)

(78,355

)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Depreciation

11,970

10,079

Amortization

21,353

21,492

Provision for bad debt expense

(350

)

7,768

Write down of inventory

961

352

Compensation expense for share-based plans

2,903

2,290

Amortization of debt issuance costs

2,005

5,488

Deferred tax provision

823

-

Goodwill impairment charge

-

116,182

(Gain) loss on sale of businesses

1,031

(54,253

)

Changes in operating assets and liabilities, net of effects of acquisition and disposition:

Trade accounts receivable

6,345

768

Inventories

(14,038

)

(12,370

)

Prepaid expenses and other assets

(17,792

)

(25,264

)

Accounts payable, accrued expenses and other liabilities

214

(31,475

)

Net cash (used in) provided by continuing operating activities

(6,140

)

(37,298

)

Net cash used in discontinued operating activities

(579

)

(11,532

)

Net cash used in operating activities

(6,719

)

(48,830

)

INVESTING ACTIVITIES

Additions to property, plant and equipment

(6,038

)

(6,815

)

Proceeds from sale of property, plant and equipment

2

(142

)

Proceeds from the sale of business

9,993

169,375

Proceeds from beneficial interest of factored receivables

998

1,339

Net cash provided by continuing investment activities

4,955

163,757

Net cash used in discontinued investing activities

-

(10,071

)

Net cash provided by investing activities

4,955

153,686

FINANCING ACTIVITIES

Proceeds from long-term debt

103,350

129,325

Payments of long-term debt

(100,250

)

(191,141

)

Withholding tax payments on restricted and performance stock units converted

(4,119

)

-

Proceeds from the exercise of stock options

151

118

Net cash provided by (used) in financing activities

(868

)

(61,698

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(1,627

)

(2,421

)

(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

(4,259

)

40,737

Cash, cash equivalents, and restricted cash at beginning of period

77,696

85,727

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD

$

73,437

$

126,464

CIRCOR INTERNATIONAL, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands) (unaudited)

Six Months Ended

July 4, June 28, 2021 2020

OPERATING ACTIVITIES

Net loss $ (22,682 ) $ (113,040 )

Loss from discontinued operations, net of income (1,117 ) (34,685 )taxes

Loss from continuing operations (21,565 ) (78,355 )

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Depreciation 11,970 10,079

Amortization 21,353 21,492

Provision for bad debt expense (350 ) 7,768

Write down of inventory 961 352

Compensation expense for share-based plans 2,903 2,290

Amortization of debt issuance costs 2,005 5,488

Deferred tax provision 823 -

Goodwill impairment charge - 116,182

(Gain) loss on sale of businesses 1,031 (54,253 )

Changes in operating assets and liabilities, net of effects of acquisition and disposition:

Trade accounts receivable 6,345 768

Inventories (14,038 ) (12,370 )

Prepaid expenses and other assets (17,792 ) (25,264 )

Accounts payable, accrued expenses and other 214 (31,475 )liabilities

Net cash (used in) provided by continuing (6,140 ) (37,298 )operating activities

Net cash used in discontinued operating activities (579 ) (11,532 )

Net cash used in operating activities (6,719 ) (48,830 )

INVESTING ACTIVITIES

Additions to property, plant and equipment (6,038 ) (6,815 )

Proceeds from sale of property, plant and 2 (142 )equipment

Proceeds from the sale of business 9,993 169,375

Proceeds from beneficial interest of factored 998 1,339 receivables

Net cash provided by continuing investment 4,955 163,757 activities

Net cash used in discontinued investing activities - (10,071 )

Net cash provided by investing activities 4,955 153,686

FINANCING ACTIVITIES

Proceeds from long-term debt 103,350 129,325

Payments of long-term debt (100,250 ) (191,141 )

Withholding tax payments on restricted and (4,119 ) - performance stock units converted

Proceeds from the exercise of stock options 151 118

Net cash provided by (used) in financing (868 ) (61,698 )activities

Effect of exchange rate changes on cash, cash (1,627 ) (2,421 )equivalents and restricted cash

(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND (4,259 ) 40,737 RESTRICTED CASH

Cash, cash equivalents, and restricted cash at 77,696 85,727 beginning of period

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END $ 73,437 $ 126,464 OF PERIOD

CIRCOR INTERNATIONAL, INC.

Condensed Consolidated Balance Sheets

(in thousands) (unaudited)

July 4, 2021

December 31, 2020

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

72,181

$

76,452

Trade accounts receivable, less allowance for doubtful accounts of $8,596 and $9,035 at July 4, 2021 and December 31, 2020, respectively

96,591

102,730

Inventories

136,012

129,084

Prepaid expenses and other current assets

109,683

93,226

Assets held for sale

-

5,073

Total Current Assets

414,467

406,565

PROPERTY, PLANT AND EQUIPMENT, NET

160,817

168,763

OTHER ASSETS:

Goodwill

156,785

158,944

Intangibles, net

328,957

353,595

Deferred income taxes

776

779

Other assets

40,199

41,882

TOTAL ASSETS

$

1,102,001

$

1,130,528

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable

$

68,224

$

61,236

Accrued expenses and other current liabilities

72,294

75,624

Accrued compensation and benefits

29,721

28,332

Total Current Liabilities

170,239

165,192

LONG-TERM DEBT

512,375

507,888

DEFERRED INCOME TAXES

27,562

28,980

PENSION LIABILITY, NET

156,501

163,642

OTHER NON-CURRENT LIABILITIES

52,284

58,785

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; 21,620,528 and 21,373,813 issued at July 4, 2021 and December 31, 2020 respectively

216

214

Additional paid-in capital

452,512

452,728

(Accumulated deficit) retained earnings

(109,143

)

(86,461

)

Common treasury stock, at cost (1,372,488 shares at July 4, 2021 and December 31, 2020)

(74,472

)

(74,472

)

Accumulated other comprehensive loss, net of tax

(86,073

)

(85,968

)

Total Shareholders' Equity

183,040

206,041

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

1,102,001

$

1,130,528

CIRCOR INTERNATIONAL, INC.

Condensed Consolidated Balance Sheets

(in thousands) (unaudited)

July 4, 2021 December 31, 2020

ASSETS

CURRENT ASSETS:

Cash and cash equivalents $ 72,181 $ 76,452

Trade accounts receivable, less allowance fordoubtful accounts of $8,596 and $9,035 at July 96,591 102,730 4, 2021 and December 31, 2020, respectively

Inventories 136,012 129,084

Prepaid expenses and other current assets 109,683 93,226

Assets held for sale - 5,073

Total Current Assets 414,467 406,565

PROPERTY, PLANT AND EQUIPMENT, NET 160,817 168,763

OTHER ASSETS:

Goodwill 156,785 158,944

Intangibles, net 328,957 353,595

Deferred income taxes 776 779

Other assets 40,199 41,882

TOTAL ASSETS $ 1,102,001 $ 1,130,528

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable $ 68,224 $ 61,236

Accrued expenses and other current liabilities 72,294 75,624

Accrued compensation and benefits 29,721 28,332

Total Current Liabilities 170,239 165,192

LONG-TERM DEBT 512,375 507,888

DEFERRED INCOME TAXES 27,562 28,980

PENSION LIABILITY, NET 156,501 163,642

OTHER NON-CURRENT LIABILITIES 52,284 58,785

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:

Preferred stock, $0.01 par value; 1,000,000shares authorized; no shares issued and - - outstanding

Common stock, $0.01 par value; 29,000,000shares authorized; 21,620,528 and 21,373,813 216 214 issued at July 4, 2021 and December 31, 2020respectively

Additional paid-in capital 452,512 452,728

(Accumulated deficit) retained earnings (109,143 ) (86,461 )

Common treasury stock, at cost (1,372,488 (74,472 ) (74,472 )shares at July 4, 2021 and December 31, 2020)

Accumulated other comprehensive loss, net of (86,073 ) (85,968 )tax

Total Shareholders' Equity 183,040 206,041

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,102,001 $ 1,130,528

CIRCOR INTERNATIONAL, INC.

Summary of Orders and Backlog

(in millions) (unaudited)

Three Months Ended

Six Months Ended

July 4, 2021

June 28, 2020

July 4, 2021

June 28, 2020

ORDERS (1)

Aerospace & Defense

$

54.2

$

76.6

$

127.2

$

148.6

Industrial

156.0

116.0

309.7

252.5

Total Orders

$

210.2

$

192.6

$

436.9

$

401.1

July 4, 2021

June 28, 2020

BACKLOG (2)

Aerospace & Defense

$

188.3

$

214.2

Industrial

248.2

217.8

Total Backlog

$

436.5

$

432.0

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 six months ended June 28, 2020 include orders from businesses divested prior to June 28,2020 of $4.4 million.

Note 2: Backlog includes unshipped customer orders for which revenue has not been recognized.

CIRCOR INTERNATIONAL, INC.

Summary of Orders and Backlog

(in millions) (unaudited)

Three Months Ended Six Months Ended

July 4, June 28, 2020 July 4, June 28, 2020 2021 2021



ORDERS (1)

Aerospace & Defense $ 54.2 $ 76.6 $ 127.2 $ 148.6

Industrial 156.0 116.0 309.7 252.5

Total Orders $ 210.2 $ 192.6 $ 436.9 $ 401.1





July 4, June 28, 2020 2021

BACKLOG (2)

Aerospace & Defense $ 188.3 $ 214.2

Industrial 248.2 217.8

Total Backlog $ 436.5 $ 432.0



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 six months ended June 28, 2020 include orders from businesses divested prior to June 28,2020 of $4.4 million.

Note 2: Backlog includes unshipped customer orders for which revenue has not been recognized.

CIRCOR INTERNATIONAL, INC.

Segment Information

(in thousands, except percentages)

UNAUDITED

2020 2021

As reported 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR

ORDERS

Aerospace & $ 72,031 $ 76,616 $ 59,105 $ 46,796 $ 254,548 $ 72,999 $ 54,243 Defense

Industrial 136,443 116,023 107,453 121,690 481,609 153,695 155,959

Total $ 208,474 $ 192,639 $ 166,558 $ 168,486 $ 736,157 $ 226,693 $ 210,203



NET REVENUES

Aerospace & $ 65,493 $ 62,241 $ 62,249 $ 77,839 $ 267,822 $ 60,001 $ 60,761 Defense

Industrial 126,720 123,825 124,391 130,513 505,449 120,654 129,585

Total $ 192,213 $ 186,066 $ 186,640 $ 208,352 $ 773,271 $ 180,655 $ 190,346



SEGMENTOPERATING INCOME

Aerospace & $ 12,494 $ 13,142 $ 14,782 $ 18,675 $ 59,093 $ 10,706 $ 12,095 Defense

Industrial 5,169 12,406 9,807 12,441 39,823 9,735 10,400

Corporate (6,588 ) (9,664 ) (7,244 ) (7,789 ) (31,285 ) (8,002 ) (7,850 ) expenses

Total $ 11,075 $ 15,884 $ 17,345 $ 23,327 $ 67,631 $ 12,439 $ 14,645



SEGMENTOPERATING MARGIN %

Aerospace & 19.1 % 21.1 % 23.7 % 24.0 % 22.1 % 17.8 % 19.9 %Defense

Industrial 4.1 % 10.0 % 7.9 % 9.5 % 7.9 % 8.1 % 8.0 %

Total 5.8 % 8.5 % 9.3 % 11.2 % 8.7 % 6.9 % 7.7 %



2020 2021

Results ofdivested 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTRbusinesses(1)

ORDERS - $ 4,449 $ - $ - $ - $ 4,449 $ - $ - Industrial

NET REVENUES $ 4,900 $ - $ - $ - $ 4,900 $ - $ - - Industrial

SEGMENT OP.INC. $ - $ - $ - $ - $ - $ - $ - -Industrial

CIRCOR INTERNATIONAL, INC.

Supplemental Information Regarding Divested Businesses

(in thousands, except percentages) (unaudited)

2020

2021

Results excluding divested businesses

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

2ND QTR

ORDERS

Aerospace & Defense

$72,031

$76,616

$59,105

$46,796

$254,548

$72,999

$54,243

Industrial

131,994

116,023

107,453

121,690

477,160

153,695

155,959

Total

$204,025

$192,639

$166,558

$168,486

$731,708

$226,693

$210,203

NET REVENUES

Aerospace & Defense

$65,493

$62,241

$62,249

$77,839

$267,822

$60,001

$60,761

Industrial

121,820

123,825

124,391

130,513

500,549

120,654

129,585

Total

$187,313

$186,066

$186,640

$208,352

$768,371

$180,655

$190,346

SEGMENT OPERATING INCOME

Aerospace & Defense

$12,494

$13,142

$14,782

$18,675

$59,093

$10,706

$12,095

Industrial

5,169

12,406

9,807

12,441

39,823

9,735

10,400

Corporate expenses

(6,588)

(9,664)

(7,244)

(7,789)

(31,285)

(8,002)

(7,850)

Total

$11,075

$15,884

$17,345

$23,327

$67,631

$12,439

$14,645

SEGMENT OPERATING MARGIN %

Aerospace & Defense

19.1%

21.1%

23.7%

24.0%

22.1%

17.8%

19.9%

Industrial

4.2%

10.0%

7.9%

9.5%

8.0%

8.1%

8.0%

Total

5.9%

8.5%

9.3%

11.2%

8.8%

6.9%

7.7%

(1) Divested businesses are related to the Industrial Segment and include Instrumentation & Sampling. Distributed Valves are discontinued operations and not reflected in the As Reported figures in accordance with US GAAP.

CIRCOR INTERNATIONAL, INC.

Supplemental Information Regarding Divested Businesses

(in thousands, except percentages) (unaudited)

2020 2021

Resultsexcluding 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTRdivestedbusinesses

ORDERS

Aerospace & $72,031 $76,616 $59,105 $46,796 $254,548 $72,999 $54,243Defense

Industrial 131,994 116,023 107,453 121,690 477,160 153,695 155,959

Total $204,025 $192,639 $166,558 $168,486 $731,708 $226,693 $210,203



NET REVENUES

Aerospace & $65,493 $62,241 $62,249 $77,839 $267,822 $60,001 $60,761Defense

Industrial 121,820 123,825 124,391 130,513 500,549 120,654 129,585

Total $187,313 $186,066 $186,640 $208,352 $768,371 $180,655 $190,346



SEGMENTOPERATING INCOME

Aerospace & $12,494 $13,142 $14,782 $18,675 $59,093 $10,706 $12,095Defense

Industrial 5,169 12,406 9,807 12,441 39,823 9,735 10,400

Corporate (6,588) (9,664) (7,244) (7,789) (31,285) (8,002) (7,850)expenses

Total $11,075 $15,884 $17,345 $23,327 $67,631 $12,439 $14,645



SEGMENTOPERATING MARGIN %

Aerospace & 19.1% 21.1% 23.7% 24.0% 22.1% 17.8% 19.9%Defense

Industrial 4.2% 10.0% 7.9% 9.5% 8.0% 8.1% 8.0%

Total 5.9% 8.5% 9.3% 11.2% 8.8% 6.9% 7.7%



(1) Divested businesses are related to the Industrial Segment and include Instrumentation & Sampling. Distributed Valves are discontinued operations and not reflected in the As Reported figures in accordance with US GAAP.

CIRCOR INTERNATIONAL, INC.

Reconciliation of Key Performance Measures to Commonly Used Generally AcceptedAccounting Principle Terms

(in thousands, except percentages) (unaudited)

2020 2021

1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR



Net Cash (UsedIn) Provided $ $ $2,465 $23,641 $ $ $10,984By Operating (23,947) (24,883) (22,724) (17,703)Activities

LESS

Capitalexpenditures, 3,412 3,527 2,330 3,275 12,544 3,392 2,644net of saleproceeds (a)

FREE CASH FLOW $ $ $135 $20,366 $ $ $8,340 (27,359) (28,410) (35,268) (21,095)





Gross Debt $602,288 $592,038 $540,463 $519,938 $519,938 $536,938 $523,038

Less: Cash &Cash 170,861 125,421 72,772 76,452 76,452 75,680 72,181equivalents

GROSS DEBT, $431,427 $466,617 $467,691 $443,486 $443,486 $461,258 $450,857NET OF CASH



TOTALSHAREHOLDERS' $290,845 $273,351 $220,814 $206,041 $206,041 $196,106 $183,039EQUITY



GROSS DEBT AS 207% 217% 245% 252% 252% 274% 286%% OF EQUITY

GROSS DEBT,NET OF CASH AS 148% 171% 212% 215% 215% 235% 246%% OF EQUITY



(a) includes capital expenditures, net of sales proceeds of discontinuedoperations

CIRCOR INTERNATIONAL, INC.

Reconciliation of Key Performance Measures to Commonly Used Generally Accepted Accounting Principle Terms

(in thousands, except percentages) (unaudited)

2020

2021

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

2ND QTR

NET (LOSS) INCOME

$

(78,948

)

$(34,092)$(58,524)$(13,934)$(185,498)$(7,119)$(15,563)LESS:

Restructuring related inventory charges

(602

)

-

351

-

(251

)

-

958

Restructuring charges, net

2,883

588

502

972

4,945

2,060

2,281

Acquisition amortization

10,218

10,681

10,625

10,939

42,463

10,487

10,498

Acquisition depreciation

974

980

1,011

1,021

3,986

2,375

1,326

Special (recoveries) charges, net

(45,175

)

5,019

436

473

(39,247

)

(2,869

)

4,522

Goodwill Impairment charge

116,182

-

-

-

116,182

-

-

Income tax impact

7,704

(22,549

)

53,240

13,125

51,521

(335

)

2,266

Net loss (income) from discontinued operations

(9,162

)

43,847

(341

)

795

35,140

239

878

ADJUSTED NET INCOME

$

4,074

$4,475

$7,300

$13,390

$29,240

$4,838

$7,165

(LOSS) EARNINGS PER COMMON SHARE (Diluted)

$

(3.96

)

$(1.68

)$(2.93

)$(0.70

)$(9.28

)$(0.35

)$(0.77

)LESS:

Restructuring related inventory charges

(0.03

)

-

0.02

-

(0.01

)

-

0.05

Restructuring charges, net

0.14

0.03

0.02

0.05

0.25

0.10

0.11

Acquisition amortization

0.51

0.53

0.53

0.55

2.13

0.52

0.52

Acquisition depreciation

0.05

0.05

0.05

0.05

0.20

0.12

0.07

Special (recoveries) charges, net

(2.27

)

0.25

0.02

0.02

(1.96

)

(0.14

)

0.22

Impairment charge

5.83

-

-

-

5.81

-

-

Income tax impact

0.39

(1.11

)

2.66

0.66

2.58

(0.02

)

0.11

Earnings (Loss) per share from discontinued operations

(0.46

)

2.16

(0.02

)

0.04

1.76

0.01

0.04

ADJUSTED EARNINGS PER SHARE (Diluted)

$

0.20

$0.22

$0.36

$0.66

$1.43

$0.24

$0.35

CIRCOR INTERNATIONAL, INC.

Reconciliation of Key Performance Measures to Commonly Used Generally AcceptedAccounting Principle Terms

(in thousands, except percentages) (unaudited)

2020 2021

1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR

NET (LOSS) $ (78,948 )INCOME $ (34,092 ) $ (58,524 ) $ (13,934 ) $ (185,498 ) $ (7,119 ) $ (15,563 )

LESS:

Restructuringrelated (602 ) - 351 - (251 ) - 958 inventorycharges

Restructuring 2,883 588 502 972 4,945 2,060 2,281 charges, net

Acquisition 10,218 10,681 10,625 10,939 42,463 10,487 10,498 amortization

Acquisition 974 980 1,011 1,021 3,986 2,375 1,326 depreciation

Special(recoveries) (45,175 ) 5,019 436 473 (39,247 ) (2,869 ) 4,522 charges, net

GoodwillImpairment 116,182 - - - 116,182 - - charge

Income tax 7,704 (22,549 ) 53,240 13,125 51,521 (335 ) 2,266 impact

Net loss(income) from (9,162 ) 43,847 (341 ) 795 35,140 239 878 discontinuedoperations

ADJUSTED NET $ 4,074 4,475 7,300 13,390 29,240 4,838 7,165INCOME $ $ $ $ $ $



(LOSS) EARNINGSPER COMMON $ (3.96 ) $ (1.68 ) $ (2.93 ) $ (0.70 ) $ (9.28 ) $ (0.35 ) $ (0.77 )SHARE (Diluted)

LESS:

Restructuringrelated (0.03 ) - 0.02 - (0.01 ) - 0.05 inventorycharges

Restructuring 0.14 0.03 0.02 0.05 0.25 0.10 0.11 charges, net

Acquisition 0.51 0.53 0.53 0.55 2.13 0.52 0.52 amortization

Acquisition 0.05 0.05 0.05 0.05 0.20 0.12 0.07 depreciation

Special(recoveries) (2.27 ) 0.25 0.02 0.02 (1.96 ) (0.14 ) 0.22 charges, net

Impairment 5.83 - - - 5.81 - - charge

Income tax 0.39 (1.11 ) 2.66 0.66 2.58 (0.02 ) 0.11 impact

Earnings (Loss)per share from (0.46 ) 2.16 (0.02 ) 0.04 1.76 0.01 0.04 discontinuedoperations

ADJUSTEDEARNINGS PER $ 0.20 $ 0.22 $ 0.36 $ 0.66 $ 1.43 $ 0.24 $ 0.35SHARE (Diluted)

CIRCOR INTERNATIONAL, INC.

Reconciliation of Key Performance Measures to Commonly Used Generally Accepted Accounting Principle Terms

(in thousands, except percentages) (unaudited)

2020

2021

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

2ND QTR

NET (LOSS) INCOME

$

(78,948

)

$

(34,092

)

$

(58,524

)

$

(13,934

)

$

(185,498

)

$

(7,119

)

$

(15,563

)

LESS:

Interest expense, net

9,011

8,486

8,202

8,520

34,219

8,369

7,957

Depreciation

5,121

4,958

4,802

5,504

20,385

6,509

5,461

Amortization

10,516

10,976

10,925

11,245

43,662

10,696

10,657

Provision for income taxes

8,374

(21,769

)

54,318

15,299

56,222

400

2,961

Loss (income) from discontinued operations

(9,162

)

43,847

(341

)

795

35,140

239

878

EBITDA

$

(55,088

)

$

12,406

$

19,383

$

27,429

$

4,130

$

19,094

$

12,351

LESS:

Restructuring related inventory charges (recoveries)

(602

)

-

351

-

(251

)

-

958

Restructuring charges, net

2,883

588

502

972

4,945

2,060

2,281

Special (recoveries) charges, net

(45,175

)

5,019

436

473

(39,247

)

(2,869

)

4,522

Goodwill impairment charge

116,182

-

-

-

116,182

-

-

ADJUSTED EBITDA

$

18,200

$

18,013

$

20,671

$

28,873

$

85,758

$

18,285

$

20,112

CIRCOR INTERNATIONAL, INC.

Reconciliation of Key Performance Measures to Commonly Used Generally AcceptedAccounting Principle Terms

(in thousands, except percentages) (unaudited)

2020 2021

1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR

NET (LOSS) $ (78,948 ) $ (34,092 ) $ (58,524 ) $ (13,934 ) $ (185,498 ) $ (7,119 ) $ (15,563 )INCOME

LESS:

Interest 9,011 8,486 8,202 8,520 34,219 8,369 7,957 expense, net

Depreciation 5,121 4,958 4,802 5,504 20,385 6,509 5,461

Amortization 10,516 10,976 10,925 11,245 43,662 10,696 10,657

Provision for 8,374 (21,769 ) 54,318 15,299 56,222 400 2,961 income taxes

Loss (income)from (9,162 ) 43,847 (341 ) 795 35,140 239 878 discontinuedoperations

EBITDA $ (55,088 ) $ 12,406 $ 19,383 $ 27,429 $ 4,130 $ 19,094 $ 12,351

LESS:

Restructuringrelatedinventory (602 ) - 351 - (251 ) - 958 charges(recoveries)

Restructuring 2,883 588 502 972 4,945 2,060 2,281 charges, net

Special(recoveries) (45,175 ) 5,019 436 473 (39,247 ) (2,869 ) 4,522 charges, net

Goodwillimpairment 116,182 - - - 116,182 - - charge

ADJUSTED $ 18,200 $ 18,013 $ 20,671 $ 28,873 $ 85,758 $ 18,285 $ 20,112 EBITDA

CIRCOR INTERNATIONAL, INC.

Reconciliation of Key Performance Measures to Commonly Used Generally Accepted Accounting Principle Terms

(in thousands, except percentages) (unaudited)

2020

2021

1ST QTR

2ND QTR

3RD QTR

4TH QTR

TOTAL

1ST QTR

2ND QTR

GAAP OPERATING INCOME (LOSS)

$

(73,405

)

$

(1,384

)

$

4,420

$

9,923

$

(60,446

)

$

386

$

(4,940

)

LESS:

Restructuring related inventory charges (recoveries)

(602

)

-

351

-

(251

)

-

958

Amortization of inventory step-up

-

-

-

-

-

-

-

Restructuring charges, net

2,883

588

502

972

4,945

2,060

2,281

Acquisition amortization

10,218

10,681

10,625

10,939

42,463

10,487

10,498

Acquisition depreciation

974

980

1,011

1,021

3,986

2,375

1,326

Special (recoveries) charges, net

(45,175

)

5,019

436

473

(39,247

)

(2,869

)

4,522

Goodwill impairment charge

116,182

-

-

-

116,182

-

-

ADJUSTED OPERATING INCOME

$

11,075

$

15,884

$

17,345

$

23,327

$

67,631

$

12,439

$

14,645

GAAP OPERATING MARGIN

(38.2

)%

(0.7

)%

2.4

%

4.8

%

(7.8

)%

0.2

%

(2.7

)%

LESS:

Restructuring related inventory charges (recoveries)

(0.3

)%

-

%

0.2

%

-

%

-

%

-

%

0.5

%

Amortization of inventory step-up

-

%

-

%

-

%

-

%

-

%

-

%

-

%

Restructuring charges, net

1.5

%

0.3

%

0.3

%

0.5

%

0.6

%

1.1

%

1.3

%

Acquisition amortization

5.3

%

5.7

%

5.7

%

5.3

%

5.5

%

5.8

%

5.8

%

Acquisition depreciation

0.5

%

0.5

%

0.5

%

0.5

%

0.5

%

1.3

%

0.7

%

Special (recoveries) charges, net

(23.5

)%

2.7

%

0.2

%

0.2

%

(5.1

)%

(1.6

)%

2.5

%

Goodwill impairment charge

60.4

%

-

%

-

%

-

%

15.0

%

-

%

-

%

ADJUSTED OPERATING MARGIN

5.8

%

8.5

%

9.3

%

11.2

%

8.7

%

6.9

%

8.1

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20210810005283/en/

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