CIRCOR International — Q3 2021 Earnings Presentation
18 slides from CIRCOR International's earnings presentation, Nov 12, 2021
Slide 1: 2021 Third Quarter Earnings Call
INDUSTRIAL AEROSPACE & DEFENSE 2021 Third Quarter Earnings Call November 12th, 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,” “
Slide 2: 3Q Summary
3Q Summary 2 Strong underlying demand across CIRCOR reflected in orders and backlog • 3Q Orders +16% … 3Q YTD Orders +11% • 3Q Backlog +5% … 3Q YTD Backlog +15% Executing well despite challenging supply chain environment • 3Q Revenue +2% y/y … ~$10M revenue delayed (~5 points of organic growth) • 3Q
Slide 3: 3Q'21 Reported Results
3Q’21 y/y vs. 2Q’21 3 Backlog Orders Organic % Revenue Organic % AOI AOI % GAAP EPS Adj. EPS FCF % of adj. net income 435 194 191 19 10.1% $0.06 $0.50 7 66% 5% 16% 15% 2% 1% 11% 80 bps n/a 39% n/a (0)% (8)% (7)% 0% 1% 31% 240 bps n/a 44% (18)% Orders growth indicative of continued strong demand acro
Slide 4: 3Q'21 Industrial Segment Highlights
3Q’21 Industrial Segment Highlights ($ millions) 3Q 2021 Orders • End market demand remains strong … orders growth across all regions with strength in N. America and EMEA • Backlog up 30% YTD, above pre-COVID levels … highest Downstream aftermarket backlog since 2017 • Book-to-bill of 1.1x 3Q 2021 R
Slide 5: 3Q'21 Aerospace & Defense Segment Highlights
3Q’21 Aerospace & Defense Segment Highlights ($ millions) 5 Orders Revenue AOI Organic revenue and Adjusted Operating Income (AOI) are non-GAAP measures 3Q 2021 Orders • Defense orders down due to non-repeat of large Dreadnought order in 3Q’20 • Commercial recovery continues … 3rd consecutive quarte
Slide 6: 3Q'21 Cash Flow and Debt Position
3Q’21 Cash Flow and Debt Position 6 3Q’203Q’21 y/y $2$11 n/a Free cash flow lower than expected due to timing of milestone collections on long-term projects Total debt reduced by $23 million / (4)% y/y … continue to use FCF to pay down debt Now expect to improve net debt to adjusted EBITDA leverage
Slide 7: 4Q'21 and 2021 Financial Framework
4Q’21 2021 Guide 4Q’21 and 2021 Financial Framework Organic revenue growth Reported revenue growth Adjusted EPS 4Q Commentary 2021 Commentary • $(15) million of 4Q revenue delayed due to supply chain and logistics challenges • Industrial demand remains strong … expecting orders to be up >10% with re
Slide 8: 4Q'21 Industrial Revenue Outlook
4Q’21 Industrial Revenue Outlook 8 L o n g C y c le S h o rt C y c le Primary End Market Share of 2020 revenue 4Q’21 y/y revenue Downstream Commercial Marine Midstream O&G Other end markets Long-cycle total Memo: Price Total Industrial Chemical processing Power Generation Machinery manufacturing Bui
Slide 9: 4Q'21 A&D Revenue Outlook
4Q’21 A&D Revenue Outlook 9 D e fe n s e C o m m e rc ia l Primary End Market Share of 2020 revenue 4Q’21 y/y revenue Top programs Other OEM Aftermarket Memo: Price Defense subtotal Boeing / Airbus Other OEM Aftermarket Memo: Price Commercial subtotal Other end markets Total A&D 27% 23% 19% 4% 69% 7
Slide 10: 3Q'21 Update: 2021+ Strategic Priorities
3Q’21 Update 2021+ Strategic Priorities 10 • Accelerating growth in A&D … lean site visit • Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxx • Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxx • Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxx • Launched 29 new products through 3Q …
Slide 11: New Product Highlights
New Product Highlights 11 Accelerating growth through opportunities in new, growing markets Landing Gear Switch Module Hydrogen Isolation Valve & Modular Dome Regulators Hydrogen Isolation Valve Modular Dome Regulator Switch Module with Kinetic Sensors for Landing Gear Position Detector
Slide 12: Appendix
12 Appendix
Slide 13: 3Q'21 GAAP to Adjusted Results
3Q’21 GAAP to Adjusted Results 13 GAAP Special Adjusted GAAP Special Adjusted Sales 190.8 - 190.8 186.6 0.0 186.6 Gross margin 60.8 4.1 64.8 56.0 5.0 61.0 SG&A 53.3 (7.7) 45.6 50.7 (7.0) 43.7 Special & restructuring income, net 0.8 (0.8) - 0.9 (0.9) - Operating (loss) income 6.7 12.6 19.3 4.4 12.9 1
Slide 14: Organic Orders and Revenue – vs. 3Q'20
Organic Orders and Revenue – vs. 3Q’20 14 ($ in thousands) Orders CIRCOR Aerospace & Defense Industrial 3Q 21 3Q 20 V% 3Q 21 3Q 20 V% 3Q 21 3Q 20 V% Reported Orders $ 193,719 $ 166,558 16% $ 54,028 $ 59,105 -9% $ 139,691 $ 107,453 30% Divestitures - - - - - - FX (2,408) (608) (1,800) Organic Orders
Slide 15: Organic Orders and Revenue – vs. 2Q'21
Organic Orders and Revenue – vs. 2Q’21 15 ($ in thousands) CIRCOR Aerospace & Defense Industrial 3Q 21 2Q 21 V% 3Q 21 2Q 21 V% 3Q 21 2Q 21 V% Reported Orders $ 193,719 $ 210,203 -8% $ 54,028 $ 54,243 0% $ 139,691 $ 155,959 -10% Divestitures - - - - - - FX 2,220 322 1,898 Organic Orders $ 195,939 $ 2
Slide 16: CIRCOR End Market Exposure
CIRCOR End Market Exposure 16 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 17: 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 and 80/20 delivering improved performance • FCF c
Slide 18: 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 (