CIRCOR International — Q2 2021 Earnings Presentation
17 slides from CIRCOR International's earnings presentation, Aug 10, 2021
Slide 1: 2021 Second Quarter Earnings Call
INDUSTRIAL AEROSPACE & DEFENSE 2021 Second Quarter Earnings Call August 10, 2021 This presentation 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,” “exp
Slide 2: 2Q'21 Reported Results
2Q’21 y/y vs. 1Q’21 2 Backlog Orders Organic % Revenue Organic % AOI AOI % GAAP EPS Adj. EPS FCF % of adj. net income 436 210 190 15 7.7% $(0.77) $0.35 8 115% 1% 9% 4% 2% (2)% (8)% (80) bps 54% 59% n/a 4% (7)% (7)% 5% 5% 18% 80 bps (117)% 47% n/a Organic orders +4% driven by strength across almost a
Slide 3: 2Q'21 Industrial Segment Highlights
2Q’21 Industrial Segment Highlights ($ millions) 2Q 2021 Orders • Orders growth driven by strength in North America and Asia … y/y improvement across virtually all end markets • Strong project orders reflect improving capex environment • Book-to-bill of 1.2 2Q 2021 Revenue • Revenue in line with exp
Slide 4: 2Q'21 Aerospace & Defense Segment Highlights
2Q’21 Aerospace & Defense Segment Highlights ($ millions) 4 Orders Revenue AOI 21.1% 17.8% 19.9% Organic revenue and Adjusted Operating Income (AOI) are non-GAAP measures $77 $73 $54 2Q'20 1Q'21 2Q'21 2Q 2021 Orders • Lower sequential and y/y orders driven by timing of large Virginia Class Submarine
Slide 5: 2Q'21 Cash Flow and Debt Position
2Q’21 Cash Flow and Debt Position 5 2Q’202Q’21 y/y $(25)$11 n/a Free cash flow performance better than expectations driven by strong collections and timing of customer down payments Total debt reduced by $69 million / (12)% y/y … $14 million reduction in 2Q primarily driven by FCF performance Expect
Slide 6: 3Q'21 and 2021 Financial Framework
3Q’21 2021 Guide 3Q’21 and 2021 Financial Framework Organic revenue growth Adjusted EPS 3Q’21 commentary 2021 commentary • Industrial: Increased deliveries across regions and end markets driven by 1H orders volume • A&D: Large Defense programs ramp up in 2H; slow commercial recovery continues • Expe
Slide 7: 3Q'21 Industrial Revenue Outlook
3Q’21 Industrial Revenue Outlook 7 L o n g C y c le S h o rt C y c le Primary End Market Share of 2020 revenue 3Q’21 y/y revenue Downstream Commercial Marine Midstream O&G Other end markets Long-cycle total Memo: Price Total Industrial Chemical processing Power Generation Machinery manufacturing Bui
Slide 8: 3Q'21 A&D Revenue Outlook
3Q’21 A&D Revenue Outlook 8 D e fe n s e C o m m e rc ia l Primary End Market Share of 2020 revenue 3Q’21 y/y revenue Top programs Other OEM Aftermarket Memo: Price Defense subtotal Boeing / Airbus Other OEM Aftermarket Memo: Price Commercial subtotal Other end markets Total A&D 27% 23% 19% 4% 69% 7
Slide 9: 2Q'21 Update: 2021+ Strategic Priorities
2Q’21 Update 2021+ Strategic Priorities 9 • Accelerating growth in A&D … lean site visit • Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxx • Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxx • Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxx • Launched 21 new products in the 1st hal
Slide 10: Highlights of Industrial Customer Perception Study Results
Highlights of Results Industrial Customer Perception Study 10 • Accelerating growth in A&D … lean site visit • Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxx • Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxx • Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxx ✓ Net Promoter Score
Slide 11: Appendix
11 Appendix
Slide 12: GAAP to Adjusted Reconciliation
GAAP Special Adjusted GAAP Special Adjusted Orders 210.2 - 210.2 192.6 - 192.6 Sales 190.3 - 190.3 186.1 - 186.1 Gross margin 59.9 5.2 65.0 59.0 4.6 63.5 SG&A 58.0 (7.6) 50.4 54.7 (7.1) 47.6 Special & restructuring, net 6.8 (6.8) - 5.6 (5.6) - Operating (loss) income (4.9) 19.6 14.6 (1.4) 17.3 15.9
Slide 13: Organic Orders and Revenue – vs. 2Q'20
Organic Orders and Revenue – vs. 2Q’20 13 ($ in thousands) CIRCOR Aerospace & Defense Industrial 2Q 21 2Q 20 V% 2Q 21 2Q 20 V% 2Q 21 2Q 20 V% Reported Orders $ 210,203 $ 192,639 9% $ 54,243 $ 76,616 -29% $ 155,959 $ 116,023 34% Divestitures - - - - - - FX (9,872) (1,488) (8,385) Organic Orders $ 200
Slide 14: Organic Orders and Revenue – vs. 1Q'21
Organic Orders and Revenue – vs. 1Q’21 14 ($ in thousands) CIRCOR Aerospace & Defense Industrial 2Q 21 1Q 21 V% 2Q 21 1Q 21 V% 2Q 21 1Q 21 V% Reported Orders $ 210,203 $ 226,693 -7% $ 54,243 $ 72,999 -26% $ 155,959 $ 153,695 1% Divestitures - - - - - - FX (376) (109) (267) Organic Orders $ 209,827 $
Slide 15: CIRCOR End Market Exposure
CIRCOR End Market Exposure 15 Commercial Aerospace (5%) Defense (17%) Numbers may not add due to rounding Machinery Manufacturing Commercial Marine Chemical Processing Midstream O&G Power Building & Construction Wastewater Other End Markets Downstream O&G (7%) Aerospace & Defense (8%) Industrial (24
Slide 16: Financial goals
Financial goals • +100 to 150 bps higher than end market growth driven by strategic initiatives • Continued execution on price initiatives • Near term (12-18 months) AOI% outlook • Industrial: low to mid-teens • A&D: mid-20s • CIRCOR Operating System delivering improved operating performance • FCF c
Slide 17: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Within this presentation the Company uses non-GAAP financial measures, including 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 (