CIRCOR International — Q1 2020 Earnings Presentation
17 slides from CIRCOR International's earnings presentation, May 29, 2020
Slide 1: First Quarter 2020 Investor Review
INDUSTRIAL AEROSPACE & DEFENSE First Quarter 2020 Investor Review May 29, 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: Managing through the COVID-19 Pandemic
Managing through the COVID-19 Pandemic • Pandemic response team meeting daily • Deep cleaning and PPE at all facilities Prioritize Health & Safety • Tight protocol for handling exposure to COVID-19 • Detailed returned to work protocol • All plants operational and deemed essential Support Customers •
Slide 4: Q1 2020 Highlights
Q1 2020 Highlights ($ millions) Orders -31 -3 -22 4 -12% -1% -10% 260 229 204 208 Q1 2019 Divestitures Q1 2019 FX Organic Q1 2020 Divestitures Q1 2020 Reported Continuing Ops* Continuing Ops* Reported Revenue -30 -3 -19 5 -12% -1% -9% 239 209 187 192 Q1 2019 Divestitures Q1 2019 FX Organic Q1 2020 D
Slide 5: Industrial Segment Highlights
Industrial Segment Highlights ($ millions) Orders Comments on Organic YOY Results -31 Q1 2020 Orders -3 -7 4 -18% -2% -5% • Industrial markets softened in March due to COVID-19 172 141 132 136 Q1 2019 Divestitures Q1 2019 FX Organic Q1 2020 Divestitures Q1 2020 Reported Continuing Ops* Continuing Op
Slide 6: Aerospace & Defense Segment Highlights
Aerospace & Defense Segment Highlights ($ millions) Orders Comments on Organic YOY Results 0 -16 Q1 2020 Orders 0% -18% • Down due to timing of large US Naval Defense and 88 72 UK Dreadnaught Sub orders last year and impact of COVID-19 on Commercial Aerospace Q1 2019 FX Organic Q1 2020 Reported Repo
Slide 7: Q1 P&L Selected Items
Q1 P&L Selected Items Q1 2020 Q1 2019 ($ millions, except EPS) GAAP Special Adjusted Adj Ex Div* GAAP Special Adjusted Adj Ex Div* Sales 192 - 192 187 239 - 239 209 Operating (Loss) Income (73) 84 11 11 18 6 23 17 Interest Expense 9 - 9 13 - 13 Other Income (3) - (3) (2) - (2) Pre-tax (80) 84 5 7 6
Slide 8: Cash Flow and Debt Position
Cash Flow and Debt Position ($ millions) Q1 2020 Q4 2019 Q1 2019 Cash Flow from Operations (24) 17 (22) Capital Expenditures, net (3) 2 (4) Free Cash Flow (27) 18 (26) Total Debt 602 654 754 Cash and Cash Equivalents 171 85 74 Net Debt 431 569 680 • $138 net debt paydown in Q1 2020 • Seasonal weakne
Slide 9: Capital Structure and Liquidity
Capital Structure and Liquidity ($ millions) DEBT PROFILE COVENANT COMPLIANCE 807 6.5X Leverage Covenant 69 654 602 4.8X 85 171 739 3.3X 569 431 2018 2019 Current Net Debt Cash & Cash Equivalents Q1 Bank Leverage Q1 ProForma Bank Leverage DEBT MATURITY Highlights Term Loan 492 • Cash Balance $171 •
Slide 10: A Leading Provider of Mission Critical Flow Control Products Globally
A Leading Provider of Mission Critical Flow Control Products Globally CIRCOR COMPANY PROFILE Revenue by End Markets • Products for mission $869M ~3,500 2019 critical and severe 2019 REVENUE EMPLOYEES service applications Commercial % Aerospace $112M ~13 8% • Leader in niche 2019 ADJUSTED 2019 ADJUST
Slide 11: Industrial Outlook
Industrial Outlook Share of Outlook Primary End Market Comments 2019 Revenue 2020 Q2/Q3 Downstream 14% (20%) – (30%) • Capital project delays at refiners Machinery Manufacturing 9% (20%) – (30%) • OEM CapEx reduction impact Commercial Marine 8% (35%) – (45%) • YTD Shipbuilding lower Chemical Process
Slide 12: A&D Outlook
A&D Outlook ($ millions) COMMERCIAL AEROSPACE DEFENSE Share of 2019 2020 Outlook Share of 2019 2020 Outlook A&D Revenue Q2/Q3 A&D Revenue Q2/Q3 BOEING / AIRBUS TOP PROGRAM B737 Joint Strike Fighter (JSF) A350 Virgina Class Sub A320 DDG 51 14% (30%)-(40%) 28% 0%-5% A220 Columbia Class Sub A330 CVN Ca
Slide 13: Cost Reduction and Cash Summary
Cost Reduction and Cash Summary ($ millions) COST ACTIONS INITIATED 2020 2020 CASH DRIVERS IMPACT OpEx + Maintain Business Continuity MFG Overhead STRUCTURAL ~$21 Outside Services + Reduce Cost Outsourcing Furloughs + Improve Working Capital Executive and Board Paycuts TEMPORARY ~$19 Travel & Entert
Slide 14: Accelerating Strategic Plan
Accelerating 18 Month Strategic Plan Our Strategic Priorities Status Update ✓ Program transitions to low cost Morocco site on track, including product for A350 and A320 1◼ A&D: Accelerating Growth With Further Margin Expansion ✓ Price increase in line with 2019 ✓ Launching 32 new products in 2020 vs
Slide 15: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Within this presentation the Company uses non-GAAP financial measures, including Adjusted operating income, Adjusted operating margin, Adjusted net income, Adjusted earnings per share (diluted), EBITDA, Adjusted EBITDA, net debt, free cash flow and organic growth (
Slide 16: Appendix
RCOR Appendix 16
Slide 17: Q1 Results
Q1 Results ($ millions, except EPS) Q1 2020 Q1 2019 GAAP Adjusted Adj Ex Div* GAAP Adjusted Adj Ex Div* Orders 208 208 204 260 260 229 Sales 192 192 187 239 239 209 Gross Margin 60 64 64 74 80 71 SG&A 60 53 53 65 57 54 Goodwill Impairment Charge 116 - - - - - Special & Restructuring Income, net (42)