CIRCOR International — FY2022 Earnings Presentation
25 slides from CIRCOR International's earnings presentation, Mar 15, 2023
Slide 1: Fourth-Quarter and Full-Year 2022 Earnings Call
INDUSTRIAL AEROSPACE & DEFENSE Fourth-Quarter and Full-Year 2022 Earnings Call March 15, 2023 EXHIBIT 9.2
Slide 2: Forward-Looking Statements
Forward-Looking Statements This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. All statements that address expectations or projections about the future, including with respect to the C
Slide 3: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Within this presentation, the Company uses the non-GAAP financial measures organic revenue, adjusted net income, adjusted EBITDA, compliance adjusted EBITDA, adjusted operating income (or AOI), adjusted operating margin (or AOI%), adjusted earnings per share, net d
Slide 4: Agenda and Speakers
Agenda and Speakers • Executive Overview • 4Q’22 and FY’22 Financial Performance • FY’23 Guidance • Market Outlook • Q&A Tony Najjar President & Chief Executive Officer AJ Sharma Chief Financial Officer & SVP, Business Development 4
Slide 5: CEO Commentary
CEO Commentary 5 • People. Our teams demonstrated strong focus on execution and on our customers, and resilience delivering a great quarter, exceeding expectations. • Performance. We delivered 19% organic orders growth and 550 bps of margin expansion in the quarter, navigating ongoing supply chain a
Slide 6: Delivering on our Strategic Priorities
Delivering on our Strategic Priorities Margin Expansion Growth De-Levering our Balance Sheet • Value pricing • Simplification • Best-cost country sourcing and manufacturing • Factory modernization • Leveraging products and technologies in growing markets • Deepening customer engagement • Expanding s
Slide 7: 4Q'22 and FY'22 Highlights
4Q’22 and FY’22 Highlights 7 4Q’22: • Record backlog of $543M • Industrial organic orders +29% y/y • Value pricing, volume, cost-out actions and exit of PE delivering margin expansion FY’22: • Solid execution navigating supply chain constraints and inflationary environment • Successful pricing perfo
Slide 8: Targeted Growth Initiatives
Helium Valves for Flying Whales Airship 8 Higher Pressure / Lower Viscosity 3-Screw pumps Severe service, mission critical applications, pumping low viscosity fluids up to 100 Bar Three frame size pumps covering six displacements Competitive benefits include: • 2X life expectancy • Reduced noise lev
Slide 9: Financial Results Summary
4Q’22 Financial Results Summary CIRCOR 4Q’22 4Q’21 Change Backlog $543 $444 22% Orders 249 220 13% Organic % 19% Revenue 215 205 5% Organic % 11% GAAP operating income (loss) 20.2 (19.0) 206% GAAP operating margin 9.4% (9.2)% 1860 bps Adjusted operating income (AOI) 33.2 20.5 62% AOI% 15.5% 10.0% 55
Slide 10: A&D Segment Highlights
4Q’22 A&D Segment Highlights 10 Aerospace & Defense 4Q’22 4Q’21 Change Backlog $208 $185 12% Orders 71 74 -4% Organic % -1% Revenue 80 70 14% Organic % 18% AOI $21.8 $18.4 18% AOI% 27.3% 26.3% 100bps Comments on 4Q’22 Results • Organic orders decline…growth in navy, offset by timing of large medical
Slide 11: Industrial Segment Highlights
4Q’22 Industrial Segment Highlights Industrial 4Q’22 4Q’21 Change Backlog $335 $258 30% Orders 178 146 22% Organic % 29% Revenue 135 135 0% Organic % 7% AOI $18.2 $8.7 109% AOI% 13.5% 6.4% 710 bps 11 Comments on 4Q’22 Results • Orders growth driven by pumps aftermarket and downstream • Organic reven
Slide 12: Net Debt and Leverage
Net Debt and Leverage 12 Net Debt, Adjusted EBITDA and Compliance Adjusted EBITDA are non-GAAP measures. 1 – Net Debt defined as total debt (Term Loan B and revolvers) less cash or cash equivalents 2 – TTM defined as trailing twelve months 3 – Net Leverage is defined as calculated measure of net deb
Slide 13: FY'23 Guide
FY’23 Guide 13 CIRCOR 1st Quarter 2023 Full Year 2023 1Q’23 Guidance Change vs. 1Q’22 (Midpoint) FY’23 Guidance Change vs. FY’22 (Midpoint) Revenue $180 to $190 Organic 3% $767 to $857 Organic 3% AOI $17.5 to 19.0 75% $90 to 105 11% Adjusted EBITDA $21 to $23 41% $110 to $125 8% Interest Cost ~(15)
Slide 14: FY'23 Market Outlook – Orders
FY’23 Market Outlook – Orders 14 Industrial Vs. PY Approximate Sales Mix (%) Growth Drivers General Industrial Power generation, new business activities for lithium batteries manufacturing, aftermarket, and pricing Commercial Marine Aftermarket growth supported by pricing and increased utilization D
Slide 15: 2023 Outlook
2023 Outlook • Ended 2022 with strong momentum, delivering on our strategic priorities • Industrial segment: • Continue leveraging strong aftermarket position and value-based pricing to drive growth and margin expansion • A&D segment: • Benefitting from ongoing rebound of commercial aerospace market
Slide 16: Appendix
INDUSTRIAL AEROSPACE & DEFENSE Appendix
Slide 17: Organic Orders and Revenue vs. PY
4Q’22 Organic Orders and Revenue vs. PY 17 ($ in thousands) Orders, an operating measure, is defined as a legally binding agreement from an authorized individual at a customer requesting CIRCOR to provide goods and/or services at a fixed or determinable price and CIRCOR is capable of providing such
Slide 18: FY'22 Organic Orders and Revenue vs. PY
FY’22 Organic Orders and Revenue vs. PY 18 ($ in thousands) Orders, an operating measure, is defined as a legally binding agreement from an authorized individual at a customer requesting CIRCOR to provide goods and/or services at a fixed or determinable price and CIRCOR is capable of providing such
Slide 19: GAAP Operating (Loss) Income to Adjusted Operating Income
4Q’22 GAAP Operating (Loss) Income to Adjusted Operating Income 19 ($ in thousands) Note regarding financial statements: 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.
Slide 20: GAAP Net (Loss) Income to Adjusted EBITDA
4Q’22 GAAP Net (Loss) Income to Adjusted EBITDA 20 ($ in thousands) Note regarding financial statements: 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.
Slide 21: GAAP Net (Loss) Income to Adjusted Net Income
4Q’22 GAAP Net (Loss) Income to Adjusted Net Income 21 ($ in thousands) Note regarding financial statements: 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.
Slide 22: Net Cash from Operating Activities to Adjusted Free Cash Flow
4Q’22 Net Cash (Used In) Provided by Operating Activities to Adjusted Free Cash Flow 22 ($ in thousands) Previous earnings slides reflected “Net Debt” as “Gross Debt, Net of Cash.” Note regarding financial statements: Amounts are computed independently each quarter; therefore, the sum of the quarter
Slide 23: Segment Information
4Q’22 Segment Information 23 1 Quantifies the impact of the Pipeline Engineering business on the Industrial Segment. Note regarding financial statements: Amounts are computed independently each quarter; therefore, the sum of the quarterly amounts may not equal the total amount for the respective yea
Slide 24: Quarterly Adjusted Operating Income
17.1% 19.4% 25.1% 26.3% 17.9% 20.2% 23.4% 27.3% Q1 Q2 Q3 Q4 A&D Segment AOI% 24 Quarterly Adjusted Operating Income 4.9% 5.7% 5.6% 6.4% 5.6% 6.8% 12.8% 13.5% Q1 Q2 Q3 Q4 Industrial Segment AOI% 3.8% 5.9% 8.5% 10.0% 5.6% 8.7% 14.0% 15.5% Q1 Q2 Q3 Q4 CIRCOR AOI% $10.0 $11.7 $15.9 $18.4 $11.3 $13.6 $16
Slide 25: Reconciliation of Forward-Looking Non-GAAP Measures
Reconciliation of Forward-Looking Non-GAAP Measures 25 This presentation contains forward-looking estimates of organic revenue growth, AOI, adjusted EBITDA and adjusted EPS for full year 2022. We provide these non-GAAP measures to investors on a prospective basis for the same reasons (set forth on s