CIRCOR International — Q3 2020 Earnings Presentation
16 slides from CIRCOR International's earnings presentation, Nov 5, 2020
Slide 1: Third Quarter 2020 Investor Review
INDUSTRIAL AEROSPACE & DEFENSE Third Quarter 2020 Investor Review November 5, 2020
Slide 2: Safe Harbor
Safe Harbor 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,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict
Slide 3: Q3 2020 Summary
Q3 2020 Summary Strong Quarter Despite Unprecedented Macro Challenges Resilient business portfolio continues to deliver • End market and product diversification mitigating impact of weaker economic environment • Regional diversity in Industrial end markets serving as a natural hedge • Robustness in
Slide 4: Q3 2020 Highlights
Q3 2020 Highlights ($ millions) Orders ‐22 3 ‐38 ‐10% 2% 223 ‐19% 201 167 Q3 2019 Divestitures Q3 2019 FX Organic Q3 2020 Reported Continuing Ops* Reported Revenue ‐21 3 ‐33 ‐9% 2% ‐15% 237 216 187 Q3 2019 Divestitures Q3 2019 FX Organic Q3 2020 Reported Continuing Ops* Reported Adjusted Operating I
Slide 5: Industrial Segment Highlights
Industrial Segment Highlights ($ millions) Orders Comments on Organic YOY Results ‐22 2 ‐32 Q3 2020 Orders ‐14% 2% ‐23% • Industrial markets remain soft due to COVID-19 159 137 107 • Sequential improvement in Aftermarket while capital projects remain depressed Q3 2019 Divestitures Q3 2019 FX Organic
Slide 6: Aerospace & Defense Segment Highlights
Aerospace & Defense Segment Highlights ($ millions) Orders Comments on Organic YOY Results Q3 2020 Orders 1 ‐6 • Orders decline driven by impact of COVID-19 on 1% ‐9% commercial aerospace and timing of large project 64 59 orders in Defense Q3 2019 FX Organic Q3 2020 Reported Reported Revenue Q3 2020
Slide 7: Q3 P&L Selected Items
Q3 P&L Selected Items ($ millions, except EPS) Q3 2020 Q3 2019 GAAP Special Adjusted GAAP Special Adjusted Adj Ex Div* Sales 187 ‐ 187 237 ‐ 237 216 Operating (loss) income 4 13 17 (9) 35 26 23 Interest expense 8 ‐ 8 12 ‐ 12 Other income 1 ‐ 1 (1) ‐ (1) Pre‐tax (5) 13 8 (20) 35 15 Tax benefit (provi
Slide 8: Cash Flow and Debt Position
Cash Flow and Debt Position ($ millions) Q3 2020 Q3 2019 Cash Flow from Operations 2 9 Capital Expenditures, net (2) 1 Free Cash Flow 0 10 30-Sep-20 30-Sep-19 Total Debt 540 659 Cash and Cash Equivalents 73 69 Net Debt 468 590 $122 million Net Debt Reduction 8
Slide 9: Industrial Outlook
Industrial Outlook Share of YoY Outlook Comments Primary End Market 2019 Revenue Q4 2020 Q4 vs Prior Q3 Outlook (5%) – (15%) Improved versus prior outlook as refiners move selected projects Downstream 14% forward (2%) – (8%) Improved outlook but with OEM CapEx reduction and delays Machinery Manufact
Slide 10: A&D Outlook - Defense
A&D Outlook - Defense Share of YoY Outlook Comments Primary End Market 2019 Revenue Q4 2020 Q4 vs Prior Q3 Outlook TOP PROGRAM Joint Strike Fighter (JSF) Virgina Class Sub DDG 51 Improvement vs prior outlook with growth driven by 28% 30% – 35% JSF, Virginia Class, and Dreadnought Class Columbia Clas
Slide 11: A&D Outlook - Commercial
A&D Outlook - Commercial Primary End Share of YoY Outlook Comments Market 2019 Revenue Q4 2020 Q4 vs Prior Q3 Outlook BOEING / AIRBUS B737 A350 A320 Additional deterioration from prior outlook driven by 14% (55%) – (60%) A220 both single aisle and twin aisle build rates A330 B767 OTHER OEM Bus Jet C
Slide 12: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Within this presentation the Company uses non-GAAP financial measures, including Adjusted operating income, Adjusted operating margin, Adjusted net income, Adjusted earnings per share (diluted), EBITDA, Adjusted EBITDA, net debt, free cash flow and organic growth (
Slide 13: Appendix
RCOR Appendix 13
Slide 14: Q3 Results
Q3 Results ($ millions, except EPS) Q3 2020 Q3 2019 GAAP Special Adjusted GAAP Special Adjusted Adj Ex Div* Orders 167 ‐ 167 223 ‐ 223 201 Sales 187 ‐ 187 237 ‐ 237 216 Gross margin 56 5 61 74 4 79 73 SG&A 51 (7) 44 60 (7) 53 50 Special & restructuring income, net 1 (1) ‐ 24 (24) ‐ ‐ Operating (loss
Slide 15: Strategic Plan Update
18 Month Strategic Plan Update Our Strategic Priorities Status Update Program transitions to low cost Morocco site on track, including product for A350 and A320 1 A&D: Accelerating Growth With Further Margin Expansion Price increase in line with 2019 Launching 32 new products in 2020 vs. 25 i
Slide 16: CIRCOR End Market Exposure
CIRCOR End Market Exposure CIRCOR 2019 Revenue by End Market Comments Aerospace & Defense (5%) • Completed exit from Upstream Oil & Gas with divestiture of Distributed Valves Aftermarket Industrial (22%) 27% • Large global installed base driving higher margin Aftermarket orders, mitigating broader C