CIRCOR International — Q1 2023 Earnings Presentation
24 slides from CIRCOR International's earnings presentation, May 11, 2023
Slide 1: First-Quarter 2023 Earnings Call
INDUSTRIAL AEROSPACE & DEFENSE First-Quarter 2023 Earnings Call May 11, 2023 Exhibit 99.2
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation 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 Co
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 • 1Q’23 • FY’23 Guidance • Summary • 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 13% organic orders growth and 840 bps of margin expansion in the quarter supported by both segments. • Prog
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: Highlights 1Q'23
1Q’23 Highlights 7 1Q’23: • Record backlog of $584M…strong growth in Industrial • Organic orders +13% y/y…contributed by both segments • AOI margin +840 bps…value pricing, volume/mix, cost controls and exit of PE delivering margin expansion • Adjusted EPS +960% YOY Compare 1Q’23 Organic orders +13%
Slide 8: Targeted Growth Initiatives
A321 XLR Rate Fuse 8 Li-Ion Battery production process requires precise temperature and humidity control to avoid moisture contamination. Efficiency of the overall process is assured by our RTK Control Valves. Opportunity leverages our core control valve technology to expand into a high growth marke
Slide 9: Financial Results Summary
1Q’23 Financial Results Summary CIRCOR 1Q’23 1Q’22 Change Backlog $584 $477 22% Orders 242 222 9% Organic % 13% Revenue 203 186 9% Organic % 13% GAAP operating income (loss) 17.9 (11.8) 252% GAAP operating margin 8.8% (6.3)% 1510 bps Adjusted operating income (AOI) 28.4 10.4 173% AOI% 14.0% 5.6% 840
Slide 10: A&D Segment Highlights
1Q’23 A&D Segment Highlights 10 Aerospace & Defense 1Q’23 1Q’22 Change Backlog $225 $200 13% Orders 84 78 8% Organic % 12% Revenue 69 63 8% Organic % 10% AOI $14.7 $11.3 30% AOI% 21.5% 17.9% 360bps Comments on 1Q’23 Results • Organic orders increase…pricing, continued commercial aerospace recovery a
Slide 11: Industrial Segment Highlights
1Q’23 Industrial Segment Highlights Industrial 1Q’23 1Q’22 Change Backlog $359 $277 30% Orders 158 144 10% Organic % 14% Revenue 135 122 10% Organic % 15% AOI $20.4 $6.9 196% AOI% 15.2% 5.6% 960 bps 11 Comments on 1Q’23 Results • Orders growth driven by pricing, industrial aftermarket, navy and down
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 2nd Quarter 2023 Full Year 2023 Prior FY’23 Guidance Range 2Q’23 Guidance Range Change vs. 2Q’22 (Midpoint) Updated FY’23 Guidance Range Change vs. FY’22 (Midpoint) Revenue $194 to $206 Organic 4% $820 to $860 Organic 5% $767 to $857 AOI $22.6 to $24.6 42% $105 to $118 27% $90
Slide 14: FY'23 Market Outlook – Orders
FY’23 Market Outlook – Orders 14 Industrial Vs. PY Approximate Sales Mix (%) Growth Drivers General Industrial Power generation, new business activities for lithium batteries manufacturing, aftermarket, and pricing Commercial Marine Aftermarket growth supported by pricing and increased utilization D
Slide 15: Summary
Summary • Continued momentum, delivering on our strategic priorities • Industrial segment: • Step change performance supported by value-based pricing and cost controls • A&D segment: • Solid growth and margin expansion supported by the ongoing rebound of commercial aerospace market and value-based p
Slide 16: Appendix
INDUSTRIAL AEROSPACE & DEFENSE Appendix
Slide 17: Organic Orders and Revenue vs. PY
1Q’23 Organic Orders and Revenue vs. PY 17 ($ 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: GAAP Operating (Loss) Income to Adjusted Operating Income
1Q’23 GAAP Operating (Loss) Income to Adjusted Operating Income 18 ($ 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 19: GAAP Net (Loss) Income to Adjusted EBITDA
1Q’23 GAAP Net (Loss) Income to Adjusted EBITDA 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 Net Income
1Q’23 GAAP Net (Loss) Income to Adjusted Net Income 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. 1ST QTR 2ND QTR 3RD QTR 4T
Slide 21: Net Cash from Operating Activities to Adjusted Free Cash Flow
1Q’23 Net Cash (Used In) Provided by Operating Activities to Adjusted Free Cash Flow 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 rou
Slide 22: Segment Information
1Q’23 Segment Information 22 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 23: Quarterly Adjusted Operating Income
17.9% 20.2% 23.4% 27.3% 21.5% Q1 Q2 Q3 Q4 A&D Segment AOI% 23 Quarterly Adjusted Operating Income 5.6% 6.8% 12.8% 13.5% 15.2% Q1 Q2 Q3 Q4 Industrial Segment AOI% 5.6% 8.7% 14.0% 15.5% 14.0% Q1 Q2 Q3 Q4 CIRCOR AOI% $11.3 $13.6 $16.9 $21.8 $14.7 Q1 Q2 Q3 Q4 A&D Segment AOI ($M) 2022 2023 $6.9 $8.5 $15
Slide 24: Reconciliation of Forward-Looking Non-GAAP Measures
Reconciliation of Forward-Looking Non-GAAP Measures 24 This presentation contains forward-looking estimates of organic revenue growth, AOI, adjusted EBITDA and adjusted EPS for Q2 and full year 2023. We provide these non-GAAP measures to investors on a prospective basis for the same reasons (set for