Business Wire | Aug 7, 2020 06:30AM EDT

CIRCOR Reports Second-Quarter 2020 Financial Results

Aug. 07, 2020

BURLINGTON, Mass.--(BUSINESS WIRE)--Aug. 07, 2020--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 June 28, 2020.

Second Quarter 2020 Overview

* Orders of $193 million produced a book-to-bill ratio of 1.04 and backlog increase of $7 million * Revenue of $186 million, down 24% reported, down 14% organically Aerospace & Defense revenue of $62 million, down 4% reported, down 3% organically Industrial revenue of $124 million, down 32% reported, down 19% organically * GAAP loss per share of $(1.68); Adjusted earnings per share of $0.22 * GAAP operating margin of (0.7%); Adjusted operating margin of 8.5% * Aerospace & Defense operating margin of 21.1%, up 500 bps versus last year * Completed exit from upstream Oil & Gas: Divested loss-making Distributed Valves * All manufacturing facilities operating at level of demand * Remain on track to achieve $45 million 2020 cost reduction plan * Gross debt reduction of $156 million and net debt reduction of $205 million over last 12 months

"As we continue to navigate the COVID-19 environment, CIRCOR's top priority remains the health and safety of our employees, customers and suppliers," said Scott Buckhout, CIRCOR's President and CEO. "I would like to thank the entire CIRCOR team for doing a remarkable job serving our customers during this challenging time. I am pleased to report that as of today, all of our facilities are operational, with limited direct disruption from the COVID-19 pandemic."

Mr. Buckhout continued, "Our team has been effectively executing and building upon the 18-month strategic plan that we laid out last summer. Consistent with this plan, we completed our exit from upstream Oil & Gas, remain on track to launch 45 new products this year, and have expanded our planned 2020 cost actions to better align our cost structure with the current market environment."

"Looking ahead, 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."

SelectedPreliminaryConsolidatedResults

($ millions Q2 2020 Q2 2019 Change Q2 YTD Q2 YTD Changeexcept EPS) 2020 2019

Revenue $ 186.1 $ 245.8 -24 % $ 378.3 $ 484.6 -22 %

Revenue -excluding 186.1 219.7 -15 % 373.4 428.7 -13 %divestedbusinesses ^1

GAAPoperating (1.4 ) 12.0 -112 % (74.8 ) 29.8 -351 %(loss) income

Adjustedoperating 15.9 28.6 -44 % 27.0 52.0 -48 %income ^2

GAAP ) -560 ) -2590operating (0.7 % 4.9 % bps (19.8 % 6.1 % bpsmargin

Adjusted -310 -360operating 8.5 % 11.6 % bps 7.1 % 10.7 % bpsmargin ^2

Adjustedoperating -210 -230margin ex 8.5 % 10.6 % bps 7.2 % 9.5 % bpsdivestitures^1&2

GAAP loss pershare $ (1.68 ) $ (0.93 ) -81 % $ (5.66 ) $ (1.16 ) -388 %(diluted)

Adjustedearnings per $ 0.22 $ 0.65 -66 % $ 0.42 $ 1.17 -64 %share(diluted) ^2

Operating (24.9 ) 12.3 -302 % (48.8 ) (10.0 ) -388 %cash flow

Free cash (28.4 ) 9.3 -405 % (55.8 ) (16.7 ) -234 %flow ^3

Orders 192.6 258.0 -25 % 401.1 518.0 -23 %

Orders -excluding 192.6 233.6 -18 % 396.7 462.9 -14 %divestedbusinesses ^1

SegmentResults

($ millions) Q2 2020 Q2 2019 Change Q2 YTD Q2 YTD Change 2020 2019

Aerospace & Defense

Revenue $ 62.2 $ 64.7 -4 % $ 127.7 $ 125.9 1 %

Segmentoperating 13.1 10.4 26 % 25.6 19.8 29 %income

Segment 500 440operating 21.1 % 16.1 % bps 20.1 % 15.7 % bpsmargin

Orders $ 76.6 $ 93.4 -18 % $ 148.6 $ 181.5 -18 %



Industrial

Revenue $ 123.8 $ 181.1 -32 % $ 250.5 $ 358.7 -30 %

Revenue -excluding 123.8 155.0 -20 % 245.6 302.8 -19 %divestedbusinesses ^1

Segmentoperating 12.4 26.2 -53 % 17.6 48.8 -64 %income ^2

Segment -450 -660operating 10.0 % 14.5 % bps 7.0 % 13.6 % bpsmargin ^2

Orders $ 116.0 $ 164.6 -30 % $ 252.5 $ 336.5 -25 %

Orders -excluding 116.0 140.2 -17 % 248.0 281.4 -12 %divestedbusinesses ^1



* Orders and revenue excluding divested businesses are non-GAAP measures and are calculated by subtracting the orders and revenues generated by the divested businesses during the periods prior to their divestiture from reported orders and revenues. Divested businesses include Reliability Services, Spence/Nicholson and Instrumentation & Sampling (all Industrial) which were sold before June 28, 2020. * 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. Adjusted consolidated and segment results for Q2 2019 exclude net loss from discontinued operations of $17.2 million and net loss from non-cash acquisition-related intangible amortization, special and restructuring charges totaling $16.6 million ($14.3 million, net of tax). These charges include: (i) $12.4 million for non-cash acquisition-related intangible amortization expense and amortization of the step-up in fixed asset values; (ii) $2.1 million of professional fees associated with an unsolicited tender offer to acquire all outstanding shares of the Company's common stock;(iii) $1.4 million related to the divestiture of our Reliability Services business; and (iv) $0.7 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. Conference Call Information

CIRCOR International will hold a conference call to review its financial results at 9:00 a.m. ET today, August 7, 2020. 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. The webcast will be archived on the Company's website for one year.

Use of Non-GAAP Financial Measures

Adjusted operating income, adjusted operating margin, adjusted net income, adjusted earnings per share (diluted), EBITDA, adjusted EBITDA, net debt, free cash flow and organic growth (and such measures further excluding discontinued operations) are non-GAAP financial measures. These non-GAAP financial measures are used by management in our financial and operating decision making because we believe they reflect our ongoing business and facilitate period-to-period comparisons. We believe these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating the Company's current operating performance and future prospects in the same manner as management does, if they so choose. These non-GAAP financial measures also allow investors and others to compare the Company's current financial results with the Company's past financial results in a consistent manner. For example:

We exclude costs and tax effects associated with restructuring activities, such as reducing overhead and consolidating facilities. We believe that the costs related to these restructuring activities are not indicative of our normal operating costs.

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

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

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

We exclude the results of discontinued operations.

We exclude goodwill impairment charges.

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 June 28, 2020 were completed on January 1, 2019 and excluding the impact of changes in foreign currency exchange rates.

CIRCOR's management uses these non-GAAP measures, in addition to GAAP financial measures, as the basis for measuring the Company's operating performance and comparing such performance to that of prior periods and to the performance of our competitors. We use such measures when publicly providing our business outlook, assessing future earnings potential, evaluating potential acquisitions and dispositions and in our financial and operating decision-making process, including for compensation purposes.

Investors should recognize that these non-GAAP measures might not be comparable to similarly titled measures of other companies. These measures should be considered in addition and not as a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with accounting principles generally accepted in the United States. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is included in this news release.

Safe Harbor Statement

This press release contains certain statements that are "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995 (the "Act"). The words "may," "hope," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "potential," "continue," and other expressions, which are predictions of or indicate future events and trends and which do not relate to historical matters, identify forward-looking statements, although not all forward-looking statements are accompanied by such words. We believe that it is important to communicate our future expectations to our stockholders, and we, therefore, make forward-looking statements in reliance upon the safe harbor provisions of the Act. However, there may be events in the future that we are not able to accurately predict or control and our actual results may differ materially from the expectations we describe in our forward-looking statements. Forward-looking statements, including statements about outlook for the third 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; our ability to successfully integrate acquired businesses; 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, current Middle Eastern conflicts and other similar matters. BEFORE MAKING ANY INVESTMENT DECISIONS REGARDING OUR COMPANY, WE STRONGLY ADVISE YOU TO READ FURTHER ABOUT THESE AND OTHER RISK FACTORS SET FORTH IN THE "RISK FACTORS" OF OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2019, WHICH IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ("SEC") AND IS AVAILABLE ON THE SEC'S WEBSITE AT WWW.SEC.GOV, AND SUBSEQUENT REPORTS ON FORMS 10-Q, WHICH CAN BE ACCESSED UNDER THE "INVESTORS" LINK OF OUR WEBSITE AT WWW.CIRCOR.COM. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

About CIRCOR International, Inc.

CIRCOR International 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

Q2 2020 Q2 2019 Q2 2020 Q2 2019



Net revenues $ 186,066 $ 245,768 $ 378,279 $ 484,623

Cost of revenues 127,105 163,851 259,275 328,292

Gross profit 58,961 81,917 119,004 156,331

Selling, general and 54,738 65,682 114,296 130,188 administrative expenses

Goodwill impairment charge - - 116,182 -

Special and restructuring 5,607 4,215 (36,685 ) (3,627 )(charges) recoveries, net

Operating (loss) income (1,384 ) 12,020 (74,789 ) 29,770

Other expense (income):

Interest expense (income), 8,486 12,947 17,497 26,041 net

Other income, net 2,144 153 (536 ) (1,995 )

Total other expense, net 10,630 13,100 16,961 24,046

(Loss) income fromcontinuing operations (12,014 ) (1,080 ) (91,750 ) 5,724 before income taxes

(Benefit from) provision (21,769 ) 284 (13,395 ) 5,993 for income taxes

Income (loss) fromcontinuing operations, net 9,755 (1,364 ) (78,355 ) (269 )of tax

Loss from discontinued (43,847 ) (17,156 ) (34,685 ) (22,884 )operations, net of tax

Net loss $ (34,092 ) $ (18,520 ) $ (113,040 ) $ (23,153 )



Basic income (loss) per common share:

Basic from continuing $ 0.49 $ (0.07 ) $ (3.93 ) $ (0.01 )operations

Basic from discontinued $ (2.19 ) $ (0.86 ) $ (1.74 ) $ (1.15 )operations

Net loss $ (1.71 ) $ (0.93 ) $ (5.66 ) $ (1.16 )

Diluted income (loss) per common share:

Diluted from continuing $ 0.48 $ (0.07 ) $ (3.93 ) $ (0.01 )operations

Diluted from discontinued $ (2.16 ) $ (0.86 ) $ (1.74 ) $ (1.15 )operations

Net loss $ (1.68 ) $ (0.93 ) $ (5.66 ) $ (1.16 )



Weighted average number of common shares outstanding:

Basic 19,987 19,906 19,962 19,888

Diluted 20,286 19,906 19,962 19,888



CIRCOR INTERNATIONAL, INC.Condensed Consolidated Statements of Cash Flows(in thousands) (unaudited)

Six Months Ended

June 28, June 30, 2020 2019

OPERATING ACTIVITIES

Net loss $ (113,040 ) $ (23,153 )

Loss from discontinued operations, net of income (34,685 ) (22,884 )taxes

Loss from continuing operations (78,355 ) (269 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation 10,079 11,067

Amortization 21,492 24,317

Provision for bad debt expense 7,768 21

Loss on write-down of inventory 352 961

Compensation expense for share-based plans 2,290 2,976

Amortization of debt issuance costs 5,488 1,997

Loss on sale or write-down of property, plant and - 72 equipment

Goodwill impairment charge 116,182 -

Gain on sale of businesses (54,253 ) (9,165 )

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

Trade accounts receivable 768 17,867

Inventories (12,370 ) (12,868 )

Prepaid expenses and other assets (25,264 ) (11,592 )

Accounts payable, accrued expenses and other (31,475 ) (30,465 )liabilities

Net cash (used in) provided by continuing operating (37,298 ) (5,081 )activities

Net cash used in discontinued operating activities (11,532 ) (4,958 )

Net cash used in operating activities (48,830 ) (10,039 )

INVESTING ACTIVITIES

Additions to property, plant and equipment (6,815 ) (6,358 )

Proceeds from sale of property, plant and (142 ) 858 equipment

Proceeds from the sale of business 169,375 82,203

Proceeds from collection of beneficial interest 1,339 -

Net cash provided by continuing investment 163,757 76,703 activities

Net cash provided by (used in) discontinued (10,071 ) (1,184 )investing activities

Net cash provided by investing activities 153,686 75,519

FINANCING ACTIVITIES

Proceeds from long-term debt 129,325 149,500

Payments of long-term debt (191,141 ) (208,300 )

Proceeds from the exercise of stock options 118 106

Net cash used in continuing financing activities (61,698 ) (58,694 )

Net cash used in financing activities (61,698 ) (58,694 )

Effect of exchange rate changes on cash, cash (2,421 ) 793 equivalents and restricted cash

INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED 40,737 7,579 CASH

Cash, cash equivalents, and restricted cash at 85,727 69,525 beginning of period

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END $ 126,464 $ 77,104 OF PERIOD

CIRCOR INTERNATIONAL, INC.Condensed Consolidated Balance Sheets(in thousands) (unaudited)

June 28, 2020 December 31, 2019

ASSETS

CURRENT ASSETS:

Cash and cash equivalents $ 125,421 $ 84,531

Trade accounts receivable, less allowance fordoubtful accounts of $10,877 and $3,086 at June 117,131 125,422 28, 2020 and December 31, 2019, respectively

Inventories 148,383 137,309

Prepaid expenses and other current assets 94,969 66,664

Assets held for sale - 161,193

Total Current Assets 485,904 575,119

PROPERTY, PLANT AND EQUIPMENT, NET 167,194 172,179

OTHER ASSETS:

Goodwill 156,654 271,893

Intangibles, net 363,087 385,542

Deferred income taxes 53,357 30,852

Other assets 34,171 35,360

TOTAL ASSETS $ 1,260,367 $ 1,470,945

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable $ 68,155 $ 79,399

Accrued expenses and other current liabilities 102,717 94,169

Accrued compensation and benefits 27,318 19,518

Liabilities held for sale - 43,289

Total Current Liabilities 198,190 236,375

LONG-TERM DEBT 578,613 636,297

DEFERRED INCOME TAXES 20,229 21,425

PENSION LIABILITY, NET 145,138 146,801

OTHER NON-CURRENT LIABILITIES 44,846 38,636

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; 29,000,000 sharesauthorized; 19,994,356 and 19,912,362 shares 214 213 issued and outstanding at June 28, 2020 andDecember 31, 2019, respectively

Additional paid-in capital 449,576 446,657

(Accumulated deficit) retained earnings (13,982 ) 99,280

Common treasury stock, at cost (1,372,488 shares (74,472 ) (74,472 )at June 28, 2020 and December 31, 2019)

Accumulated other comprehensive loss, net of tax (87,985 ) (80,267 )

Total Shareholders' Equity 273,351 391,411

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,260,367 $ 1,470,945

CIRCOR INTERNATIONAL, INC.Summary of Orders and Backlog(in millions) (unaudited)

Three Months Ended Six Months Ended

Q2 2020 Q2 2019 Q2 2020 Q2 2019



ORDERS (1)

Aerospace & Defense $ 76.6 $ 93.4 $ 148.6 $ 181.5

Industrial 116.0 164.6 252.5 336.5

Total Orders $ 192.6 $ 258.0 $ 401.1 $ 518.0





Q2 2020 Q2 2019

BACKLOG (2)

Aerospace & Defense $ 214.2 $ 235.0

Industrial 217.8 238.1

Total Backlog $ 432.0 $ 473.1



Note 1: Orders do not include the foreign exchange impact due to there-measurement of customer backlog amounts denominated in foreign currencies.Orders for the six months ended June 28, 2020 include orders from businessesdivested prior to June 28, 2020 of $4.5 million. Orders for the three monthsended June 30, 2019 include orders from businesses divested of $24.4 million($55.1 million for the six months ended June 30, 2019). Divested businesses areReliability Services, Spence/Nicholson and Instrumentation and Sampling, all inthe Industrial segment.



Note 2: Backlog includes unshipped customer orders for which revenue has notbeen recognized. Backlog at Q2 2019 includes $11.3 million for Industrialrelated to divested businesses.

CIRCOR INTERNATIONAL, INC.Segment Information(in thousands, except percentages) (unaudited)



2019 2020

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

ORDERS

Aerospace & $ 88,107 $ 93,405 $ 63,968 $ 68,459 $ 313,939 $ 72,031 $ 76,616 $ 148,647 Defense

Industrial 171,834 164,642 158,986 168,091 663,553 136,443 116,023 252,466

Total $ 259,941 $ 258,047 $ 222,954 $ 236,550 $ 977,492 $ 208,474 $ 192,639 $ 401,113



NET REVENUES

Aerospace & $ 61,240 $ 64,694 $ 67,621 $ 79,070 $ 272,625 $ 65,493 $ 62,241 $ 127,734 Defense

Industrial 177,615 181,074 169,431 163,568 691,688 126,720 123,825 250,545

Total $ 238,855 $ 245,768 $ 237,052 $ 242,638 $ 964,313 $ 192,213 $ 186,066 $ 378,279



SEGMENT OPERATING INCOME

Aerospace & $ 9,374 $ 10,443 $ 13,564 $ 19,099 $ 52,480 $ 12,494 $ 13,142 $ 25,636 Defense

Industrial 22,581 26,174 21,278 20,757 90,790 5,169 12,406 17,575

Corporate expenses (8,522 ) (8,028 ) (9,248 ) (7,671 ) (33,469 ) (6,588 ) (9,664 ) (16,252 )

Total $ 23,433 $ 28,589 $ 25,594 $ 32,185 $ 109,801 $ 11,075 $ 15,884 $ 26,959



SEGMENT OPERATING MARGIN %

Aerospace & 15.3 % 16.1 % 20.1 % 24.2 % 19.2 % 19.1 % 21.1 % 20.1 % Defense

Industrial 12.7 % 14.5 % 12.6 % 12.7 % 13.1 % 4.1 % 10.0 % 7.0 %

Total 9.8 % 11.6 % 10.8 % 13.3 % 11.4 % 5.8 % 8.5 % 7.1 %



2019 2020

Results of Divested 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR TOTALBusinesses (1)

ORDERS - Industrial $ 30,611 $ 24,448 $ 22,090 $ 18,047 $ 95,196 $ 4,449 $ - $ 4,449

NET REVENUES - $ 29,787 $ 26,101 $ 20,697 $ 18,602 $ 95,187 $ 4,900 $ - $ 4,900 Industrial

SEGMENT OP. INC. - $ 6,217 $ 5,229 $ 2,677 $ 3,166 $ 17,289 $ - $ - $ - Industrial

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

2019 2020

Results ExcludingDivested 1ST QTR 2ND QTR 3RD QTR 4TH QTR TOTAL 1ST QTR 2ND QTR TOTALBusinesses (1)

ORDERS

Aerospace & $ 88,107 $ 93,405 $ 63,968 $ 68,459 $ 313,939 $ 72,031 $ 76,616 $ 148,647 Defense

Industrial 141,223 140,194 136,896 150,044 568,357 131,994 116,023 248,017

Total $ 229,330 $ 233,599 $ 200,864 $ 218,503 $ 882,296 $ 204,025 $ 192,639 $ 396,664



NET REVENUES

Aerospace & $ 61,240 $ 64,694 $ 67,621 $ 79,070 $ 272,625 $ 65,493 $ 62,241 $ 127,734 Defense

Industrial 147,828 154,973 148,734 144,966 596,501 121,820 123,825 245,645

Total $ 209,068 $ 219,667 $ 216,355 $ 224,036 $ 869,126 $ 187,313 $ 186,066 $ 373,379



SEGMENT OPERATING INCOME

Aerospace & $ 9,374 $ 10,443 $ 13,564 $ 19,099 $ 52,480 $ 12,494 $ 13,142 $ 25,636 Defense

Industrial 16,364 20,945 18,601 17,591 73,501 5,169 12,406 17,575

Corporate (8,522 ) (8,028 ) (9,248 ) (7,671 ) (33,469 ) (6,588 ) (9,664 ) (16,252 ) expenses

Total $ 17,216 $ 23,360 $ 22,917 $ 29,019 $ 92,512 $ 11,075 $ 15,884 $ 26,959



SEGMENT OPERATING MARGIN %

Aerospace & 15.3 % 16.1 % 20.1 % 24.2 % 19.2 % 19.1 % 21.1 % 20.1 % Defense

Industrial 11.1 % 13.5 % 12.5 % 12.1 % 12.3 % 4.2 % 10.0 % 7.2 %

Total 8.2 % 10.6 % 10.6 % 13.0 % 10.6 % 5.9 % 8.5 % 7.2 %



(1) Divested businesses are related to the Industrial Segment and includeReliability Services, Spence/Nicholson and Instrumentation & Sampling.Engineered Valves and Distributed Valves are discontinued operations and notreflected 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)

2019 2020

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

Net Cash (Used In)Provided By $ (22,378 ) $ 12,339 $ 9,128 $ 16,822 $ 15,911 $ (23,947 ) $ (24,883 ) $ (48,830 )OperatingActivities

Less: Capital expenditures, net 3,689 2,995 (963 ) (1,535 ) 4,186 3,412 3,527 6,939 of sale proceeds (a)

FREE CASH FLOW $ (26,067 ) $ 9,344 $ 10,091 $ 18,357 $ 11,725 $ (27,359 ) $ (28,410 ) $ (55,769 )





Gross Debt $ 753,950 $ 748,250 $ 659,100 $ 653,850 $ 653,850 $ 602,288 $ 592,038 $ 592,038

Less: Cash & Cash 73,619 76,082 69,225 84,531 84,531 170,861 125,421 125,421 equivalents

NET DEBT $ 680,331 $ 672,168 $ 589,875 $ 569,319 $ 569,319 $ 431,427 $ 466,617 $ 466,617



TOTAL SHAREHOLDERS' $ 516,177 $ 494,899 $ 375,388 $ 391,411 $ 391,411 $ 290,845 $ 273,351 $ 273,351 EQUITY



GROSS DEBT AS % OF 146 % 151 % 176 % 167 % 167 % 207 % 217 % 217 %EQUITY

NET DEBT AS % OF 132 % 136 % 157 % 145 % 145 % 148 % 171 % 171 %EQUITY



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

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

2019 2020

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

NET (LOSS) INCOME $ (4,633 ) $ (18,520 ) $ (112,338 ) $ 1,555 $ (133,936 ) $ (78,948 ) $ (34,092 ) $ (113,040 )

LESS:

Restructuring related inventory 325 - (1,145 ) - (820 ) (602 ) - (602 ) charges (recoveries)

Amortization of inventory - - - - - - - - step-up

Restructuring 358 299 5,038 (509 ) 5,186 2,883 588 3,471 charges, net

Acquisition 12,077 11,247 11,202 11,189 45,715 10,218 10,681 20,899 amortization

Acquisition 1,123 1,106 1,102 1,021 4,352 974 980 1,954 depreciation

Special (recoveries) (8,200 ) 3,917 18,481 3,488 17,686 (45,175 ) 5,019 (40,156 ) charges, net

Goodwill impairment - - - - - 116,182 - 116,182 charge

Income tax 3,625 (2,266 ) 5,533 (1,752 ) 5,140 7,704 (22,549 ) (14,845 ) impact

Net loss (income) from 5,728 17,156 84,688 1,595 109,167 (9,162 ) 43,848 34,686 discontinued operations

ADJUSTED NET INCOME $ 10,403 $ 12,939 $ 12,561 $ 16,587 $ 52,490 $ 4,074 $ 4,475 $ 8,549



(LOSS) EARNINGS PERCOMMON $ (0.23 ) $ (0.93 ) $ (5.64 ) $ 0.08 $ (6.73 ) $ (3.96 ) $ (1.68 ) $ (5.66 )SHARE (Diluted)

LESS:

Restructuring related inventory 0.02 0.00 (0.06) 0.00 (0.04) (0.03) 0.00 (0.03) charges (recoveries)

Amortization of inventory 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 step-up

Restructuring 0.02 0.02 0.25 (0.03) 0.26 0.14 0.03 0.17 charges, net

Acquisition 0.61 0.57 0.56 0.56 2.30 0.51 0.53 1.05 amortization

Acquisition 0.06 0.06 0.06 0.05 0.22 0.05 0.05 0.10 depreciation

Special (recoveries) (0.41) 0.20 0.93 0.18 0.89 (2.27) 0.25 (2.01) charges, net

Goodwill impairment 0.00 0.00 0.00 0.00 0.00 5.83 0.00 5.82 charge

Income tax 0.18 (0.12) 0.28 (0.10) 0.24 0.39 (1.11) (0.75) impact

Loss per share from 0.29 0.86 4.25 0.08 5.48 (0.46) 2.16 1.74 discontinued operations

ADJUSTED EARNINGSPER SHARE $ 0.52 $ 0.65 $ 0.63 $ 0.82 $ 2.62 $ 0.20 $ 0.22 $ 0.42 (Diluted)

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

2019 2020

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

NET (LOSS) INCOME $ (4,633 ) $ (18,520 ) $ (112,338 ) $ 1,555 $ (133,936 ) $ (78,948 ) $ (34,092 ) $ (113,040 )

LESS:

Interest expense, 13,094 12,947 11,804 10,763 48,609 9,011 8,486 17,497 net

Depreciation 5,499 5,568 5,551 5,427 22,045 5,121 4,958 10,079

Amortization 12,536 11,685 11,629 11,741 47,591 10,516 10,976 21,492

Provision for (benefit from) 5,709 284 7,490 1,193 14,676 8,374 (21,769 ) (13,395 ) income taxes

Loss (income) from discontinued 5,728 17,156 84,688 1,595 109,167 (9,162 ) 43,847 34,685 operations



EBITDA $ 37,933 $ 29,121 $ 8,825 $ 32,274 $ 108,152 $ (55,088 ) $ 12,406 $ (42,682 )

LESS:

Restructuring related inventory 325 - (1,145 ) - (820 ) (602 ) - (602 ) charges

Amortization of - - - - - - - - inventory step-up

Restructuring 358 299 5,038 (509 ) 5,186 2,883 588 3,471 charges, net

Special (recoveries) (8,200 ) 3,917 18,481 3,488 17,686 (45,175 ) 5,019 (40,156 ) charges, net

Goodwill - - - - - 116,182 - 116,182 impairment charge

ADJUSTED EBITDA $ 30,416 $ 33,337 $ 31,199 $ 35,253 $ 130,204 $ 18,200 $ 18,013 $ 36,213

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

2019 2020

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

GAAP OPERATING $ 17,750 $ 12,020 $ (9,084 ) $ 16,996 $ 37,682 $ (73,405 ) $ (1,384 ) $ (74,789 )INCOME (LOSS)

LESS:

Restructuring related inventory 325 - (1,145 ) - (820 ) (602 ) - (602 ) charges (recoveries)

Amortization of inventory - - - - - - - - step-up

Restructuring 358 299 5,038 (509 ) 5,186 2,883 588 3,471 charges, net

Acquisition 12,077 11,247 11,202 11,189 45,715 10,218 10,681 20,899 amortization

Acquisition 1,123 1,106 1,102 1,021 4,352 974 980 1,954 depreciation

Special (recoveries) (8,200 ) 3,917 18,481 3,488 17,686 (45,175 ) 5,019 (40,156 ) charges, net

Goodwill impairment - - - - - 116,182 - 116,182 charge

ADJUSTED OPERATING $ 23,433 $ 28,589 $ 25,594 $ 32,185 $ 109,801 $ 11,075 $ 15,884 $ 26,959 INCOME



GAAP OPERATING 7.4 % 4.9 % -3.8 % 7.0 % 3.9 % -38.2 % -0.7 % -19.8 %MARGIN

LESS:

Restructuring related inventory 0.1 % - % -0.5 % - % -0.1 % -0.3 % - % -0.2 % charges (recoveries)

Amortization of inventory - % - % - % - % - % - % - % - % step-up

Restructuring 0.1 % 0.1 % 2.1 % -0.2 % 0.5 % 1.5 % 0.3 % 0.9 % charges, net

Acquisition 5.1 % 4.6 % 4.7 % 4.6 % 4.7 % 5.3 % 5.7 % 5.5 % amortization

Acquisition 0.5 % 0.5 % 0.5 % 0.4 % 0.5 % 0.5 % 0.5 % 0.5 % depreciation

Special (recoveries) -3.4 % 1.6 % 7.8 % 1.4 % 1.8 % -23.5 % 2.7 % -10.6 % charges, net

Goodwill impairment - % - % - % - % - % 60.4 % - % 30.7 % charge

ADJUSTED OPERATING 9.8 % 11.6 % 10.8 % 13.3 % 11.4 % 5.8 % 8.5 % 7.1 %MARGIN

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CONTACT: Abhi Khandelwal Senior Vice President Finance & Chief Financial Officer CIRCOR International (781) 270-1200