8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): October 31, 2013

CIRCOR INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	001-14962	04-3477276
(State or Other Jurisdiction of Incorporation or Organization)	(Commission file number)	(I.R.S. Employer Identification No.)

30 CORPORATE DRIVE, SUITE 200

BURLINGTON, MASSACHUSETTS 01803-4238

(Address of principal executive offices) (Zip Code)

(781) 270-1200

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02Results of Operations and Financial Condition.

By press release dated October 31, 2013, the Company announced its financial results for the three months ended September 29, 2013. The full text of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Form 8-K and the Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any registration statement or other document filed under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by special reference in such filing.

In the press release and accompanying supplemental information, the Company uses the following non-GAAP financial measures: free cash flow, EBIT, EBITDA, adjusted operating income, and adjusted earnings per share (EPS). Management of the Company believes that free cash flow (defined as net cash flow from operating activities, less capital expenditures) is an important measure of its liquidity as well as its ability to service long-term debt, fund future growth and to provide a return to shareholders. We also believe this free cash flow definition does not have any material limitations.EBIT (defined as net income plus interest expense, net, plus provision for income taxes), EBITDA (defined as net income plus interest expense, net, plus provision for income taxes, plus depreciation and amortization), adjusted operating income (defined as operating income, excluding the impact of restructuring related inventory, impairment and special charges), and adjusted EPS (defined as earnings per common share, excluding restructuring related inventory, impairment and special charges, net of tax) are provided because management believes these measurements are useful for investors and financial institutions to analyze and compare companies on the basis of operating performance. Free cash flow, EBIT, EBITDA, adjusted operating income, and adjusted EPS are not measurements for financial performance under GAAP and should not be construed as a substitute for cash flows, operating income, net income or earnings per share. Free cash flow, EBIT, EBITDA, adjusted operating income, and adjusted EPS as we have calculated here, may not necessarily be comparable to similarly titled measures used by other companies. A reconciliation of free cash flow, EBIT, EBITDA, adjusted operating income, and adjusted EPS to the most directly comparable GAAP financial measure is provided in the supplemental information table titled “Reconciliation of Key Performance Measures to Commonly Used Generally Accepted Accounting Principle Terms” which is included as an attachment to the press release.

Item 9.01Financial Statements and Exhibits. 

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release regarding Earnings, Dated October 31, 2013

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 31, 2013    CIRCOR INTERNATIONAL, INC.

_____/s/ Frederic M. Burditt________

By: Frederic M. Burditt

Title: Vice President and Chief Financial Officer

EX-99.1

EXHIBIT 99.1

CIRCOR Reports Third-Quarter 2013 Financial Results

Burlington, MA - October 31, 2013- CIRCOR International, Inc. (NYSE: CIR), a leading provider of valves and other highly engineered products for markets including oil & gas, power generation and aerospace, today announced financial results for the quarter ended September 29, 2013.

Third Quarter 2013 Highlights

• Adjusted operating margin increased 230 basis points to 11.1%

• Adjusted EPS grew 22% to $0.93

• Revenue growth was 2%

• Free Cash Flow was $30 million; YTD free cash flow at 105% of net income

• Flow Technologies segment reported record bookings, up 22% year-over-year

• Restructuring initiatives to simplify CIRCOR on schedule

• Announcing next step of the CIRCOR simplification process

Management Comments

“Q3 was a strong quarter resulting from our ongoing focus on growth, margin expansion, and cash generation,” said Scott Buckhout, CIRCOR’s President and Chief Executive Officer. “We delivered another quarter of double-digit adjusted operating margin, up 230 basis points from last year. On the growth side, Flow Technologies had a record quarter on orders as we benefited from robust downstream oil & gas activity and penetration into new markets and applications.

“Free cash flow was strong in the quarter as a result of improved margins and working capital performance. Year-to-date free cash flow exceeded net income.

“The restructuring actions we announced last quarter are on schedule and expected to deliver the projected annual savings of approximately $4 million beginning in 2014.

“In addition, we recently updated our 5-year strategic plan. Based on that work we are changing our organizational structure to simplify the way we manage CIRCOR and, over time, better align our businesses with end markets. As part of the organizational change, we will consolidate our group structure from three groups to two. Initially, these changes are focused on reducing management layers and combining back-office operations. Our commercial organization will remain unchanged. We expect to complete this reorganization in the fourth quarter of 2013 and anticipate a reduction in our annual expenses of approximately $5.0 million.

“Finally, we intend to move to two reporting segments during the fourth quarter consistent with the new management structure at CIRCOR. The first segment will be ‘Energy,’ which will include all of the businesses from the existing Energy segment and a majority of the current ‘Flow Technologies’ businesses. The primary markets served in the new Energy segment are oil & gas: upstream, midstream and downstream; as well as the global power market. The second segment will be ‘Aerospace and Defense,’ which will include all of the current Aerospace segment businesses plus a few primarily defense-oriented businesses currently in the Flow Technologies segment.

“In conjunction with these changes, Wayne Robbins will transition from his role as Executive Vice President & COO to Executive Vice President and Group President of the new CIRCOR Energy group. Michael Dill, the current Group Vice President of CIRCOR Aerospace, shall continue as Group Vice President of CIRCOR Aerospace and Defense,” concluded Buckhout.

Consolidated Results

Revenues for the third quarter of 2013 increased 2% to $214.7 million, from $209.8 million in the third quarter of 2012. Adjusted earnings per diluted share in the third quarter of 2013, excluding the impact of the special charges, was $0.93, a 22% increase compared with $0.76 in the prior year’s third-quarter. Net income for the third quarter of 2013, including the impact of special charges/(recoveries) of ($0.2) million, was $17.7 million, or $1.00 per diluted share, compared with net income of $1.9 million, or $0.11 per diluted share, for the third quarter of 2012, which included special and impairment charges of $11.7 million.

The Company received orders totaling $223.3 million during the third quarter of 2013, a decrease of 1% compared with the third quarter of 2012, due primarily to lower Energy orders in the international project business, which were mostly offset by strong Flow Technologies and Aerospace orders. Backlog as of September 30, 2013 increased 1% to $446.9 million from September 29, 2012.

During the third quarter of 2013, the Company generated $29.6 million of free cash flow, up $10.8 million from the same period in 2012. Free cash flow for the first nine months of 2013 was $40.2 million, up $23.4 million from the same period in 2012.

Fourth-Quarter Guidance

For the fourth quarter of 2013, the Company expects revenues to be in the range of $222 to $228 million. In addition, CIRCOR expects restructuring related-charges of approximately $5.3 to $6.0 million. Excluding these charges, adjusted earnings are expected to be in the range of $0.88 to $0.95 per diluted share in the fourth quarter of 2013.

Segment Results

Energy

Energy segment revenues decreased 1% to $108.5 million for the third quarter versus the same period in 2012.

The Energy segment’s adjusted operating margin increased 310 basis points to 17.1% year over year.

Incoming orders for the third quarter of 2013 were $101.0 million, a decrease of 14% year over year, mostly as a result of lower large international project bookings. CIRCOR continues to see high levels of quoting activity on new projects; however some projects are delayed. Ending backlog totaled $208.5 million, a decrease of 1% year over year.

Flow Technologies

Flow Technologies segment revenues increased 3% to $69.8 million for the third quarter of 2013.

Flow Technologies adjusted operating margin for the third quarter of 2013 increased 50 basis points to 13.6%.

Incoming orders for the Flow Technologies segment were $78.5 million for the third quarter of 2013, an increase of 22% year over year. Ending backlog totaled $77.4 million, an increase of 9% compared with the same period last year.

Aerospace

Aerospace segment revenues increased 15% to $36.5 million for the third quarter of 2013.

Aerospace segment adjusted operating margin for the third quarter of 2013 increased 710 basis points to 11.3% from 4.2% in the third quarter of 2012.

Incoming orders for the third quarter of 2013 were $43.8 million, an increase of 2% year over year. Ending backlog totaled $161.0 million, a decrease of 1% year over year.

Conference Call Information

CIRCOR International will hold a conference call to review its financialresults today, October 31, 2013, at 10:00 a.m. ET. To listen to the conference call and view the accompanying presentation slides, visit “Webcasts & Presentations” in the “Investors” portion of the CIRCOR website. The call also can be accessed by dialing (877) 407-5790 or (201) 689-8328. The webcast will be archived for one year on the Company’s website.

Use of Non-GAAP Financial Measures

Adjusted net income, adjusted earnings per diluted share, adjusted operating margin, and free cash flow are non-GAAP financial measures and are intended to serve as a complement to results provided in accordance with accounting principles generally accepted in the United States. Free cash flow is defined as net cash from operating activities less capital expenditures. CIRCOR believes that such information provides an additional measurement and consistent historical comparison of the Company’s performance. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in this news release.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Reliance should not be placed on forward-looking statements because they involve unknown risks, uncertainties and other factors, which are, in some cases, beyond the control of CIRCOR. Any statements in this press release that are not statements of historical fact are forward-looking statements, including, but not limited to, those relating to CIRCOR’s future performance, including fourth-quarter revenue and earnings guidance and estimated total annualized pre-tax savings from restructuring actions.Actual events, performance or results could differ materially from the anticipated events, performance or results expressed or implied by such forward-looking statements. BEFORE MAKING ANY INVESTMENT DECISIONS REGARDING OUR COMPANY, WE STRONGLY ADVISE YOU TO READ THE SECTION ENTITLED "RISK FACTORS" IN OUR MOST RECENT ANNUAL REPORT ON FORM 10-K AND SUBSEQUENT REPORTS ON FORMS 10-Q, WHICH CAN BE ACCESSED UNDER THE "INVESTORS" LINK OF OUR WEBSITE AT WWW.CIRCOR.COM. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

About CIRCOR International, Inc.

CIRCOR International, Inc. designs, manufactures and markets valves and other highly engineered products for markets including energy, oil & gas, power generation and aerospace. With more than 7,500 customers in over 100 countries, CIRCOR has a diversified product portfolio with recognized, market-leading brands. CIRCOR’s culture, built on the CIRCOR Business System, is defined by the Company’s commitment to attracting, developing and retaining the best talent and pursuing continuous improvement in all aspects of its business and operations. The Company’s strategy includes growing organically by investing in new, differentiated products; adding value to component products; and increasing the development of mission-critical subsystems and solutions. CIRCOR also plans to leverage its strong balance sheet to acquire strategically complementary businesses. For more information, visit the Company’s investor relations web site at http://investors.circor.com.

Contact:

Frederic M. Burditt

Chief Financial Officer

CIRCOR International

(781) 270-1200

CIRCOR INTERNATIONAL, INC. CONSOLIDATED STATEMENT OF OPERATIONS (in thousands, except per share data) (UNAUDITED)
	Three Months Ended						Nine Months Ended
	September 29, 2013			September 30, 2012			September 29, 2013			September 30, 2012
Net revenues	$	214,731		$	209,804		$	643,773		$	643,946
Cost of revenues	144,593			151,109			443,679			462,823
GROSS PROFIT	70,138			58,695			200,094			181,123
Selling, general and administrative expenses	46,392			44,314			139,561			134,562
Impairment charges	—			10,348			—			10,348
Special charges / (recoveries)	(190		)	1,377			3,441			1,377
OPERATING INCOME	23,936			2,656			57,092			34,836
Other (income) expense:
Interest income	(67		)	(101		)	(189		)	(262		)
Interest expense	812			1,223			2,559			3,482
Other expense, net	568			564			1,807			887
TOTAL OTHER EXPENSE	1,313			1,686			4,177			4,107
INCOME BEFORE INCOME TAXES	22,623			970			52,915			30,729
Provision (benefit) for income taxes	4,903			(899		)	14,619			9,138
NET INCOME	$	17,720		$	1,869		$	38,296		$	21,591
Earnings per common share:
Basic	$	1.01		$	0.11		$	2.18		$	1.24
Diluted	$	1.00		$	0.11		$	2.18		$	1.24
Weighted average number of common shares outstanding:
Basic	17,582			17,433			17,553			17,391
Diluted	17,667			17,467			17,602			17,436

CIRCOR INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (UNAUDITED)
	Nine Months Ended
	September 29, 2013			September 30, 2012
OPERATING ACTIVITIES
Net income	$	38,296		$	21,591
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	11,943			11,765
Amortization	2,273			2,823
Payment for Leslie bankruptcy settlement	—			(1,000		)
Impairment charges	—			10,348
Compensation expense of share-based plans	3,343			3,409
Tax effect of share-based compensation	(536		)	573
(Gain) loss on property, plant and equipment	(70		)	1,148
Gain on return of acquisition purchase price	(3,400		)	—
Changes in operating assets and liabilities, net of effects from business acquisitions:
Trade accounts receivable	493			(123		)
Inventories	(33		)	8,586
Prepaid expenses and other assets	193			(2,110		)
Accounts payable, accrued expenses and other liabilities	1,259			(26,178		)
Net cash provided by operating activities	53,761			30,832
INVESTING ACTIVITIES
Additions to property, plant and equipment	(13,579		)	(14,097		)
Proceeds from the sale of property, plant and equipment	348			200
Business acquisitions, return of purchase price	3,400			—
Net cash used in investing activities	(9,831		)	(13,897		)
FINANCING ACTIVITIES
Proceeds from long-term debt	104,626			170,795
Payments of long-term debt	(124,351		)	(192,040		)
Dividends paid	(2,011		)	(1,997		)
Proceeds from the exercise of stock options	1,843			348
Tax effect of share-based compensation	536			(573		)
Net cash used in financing activities	(19,357		)	(23,467		)
Effect of exchange rate changes on cash and cash equivalents	(27		)	653
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	24,547			(5,879		)
Cash and cash equivalents at beginning of period	61,738			54,855
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	86,285		$	48,976

CIRCOR INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share data) (UNAUDITED)
	September 29, 2013			December 31, 2012
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	86,285		$	61,738
Short-term investments	98			101
Trade accounts receivable, less allowance for doubtful accounts	151,528			150,825
Inventories	198,454			198,005
Prepaid expenses and other current assets	18,185			16,510
Deferred income tax asset	15,601			15,505
Assets held for sale	480			542
Total Current Assets	470,631			443,226
PROPERTY, PLANT AND EQUIPMENT, NET	107,415			105,903
OTHER ASSETS:
Goodwill	76,066			77,428
Intangibles, net	42,728			45,157
Deferred income tax asset	22,600			30,064
Other assets	5,923			8,203
TOTAL ASSETS	$	725,363		$	709,981
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	78,112		$	80,361
Accrued expenses and other current liabilities	59,674			67,235
Accrued compensation and benefits	30,575			26,540
Income taxes payable	2,610			393
Notes payable and current portion of long-term debt	6,667			7,755
Total Current Liabilities	177,638			182,284
LONG-TERM DEBT, NET OF CURRENT PORTION	43,250			62,729
DEFERRED INCOME TAXES	10,037			10,744
OTHER NON-CURRENT LIABILITIES	35,380			35,977
CONTINGENCIES AND COMMITMENTS
SHAREHOLDERS’ EQUITY:
Preferred stock, $0.01 par value; 1,000,000 shares authorized; no shares issued and outstanding	—			—
Common stock, $0.01 par value; 29,000,000 shares authorized; 17,590,312 and 17,445,687 shares issued and outstanding at September 29, 2013 and December 31, 2012, respectively	176			174
Additional paid-in capital	267,562			262,744
Retained earnings	194,797			158,509
Accumulated other comprehensive loss, net of taxes	(3,477		)	(3,180		)
Total Shareholders’ Equity	459,058			418,247
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	725,363		$	709,981

CIRCOR INTERNATIONAL, INC. SUMMARY OF ORDERS AND BACKLOG (in millions) UNAUDITED
	Three Months Ended				Nine Months Ended
	September 29, 2013		September 30, 2012		September 29, 2013		September 30, 2012
ORDERS (1)
Energy	$	101.0	$	118.1	$	318.4	$	382.0
Aerospace	43.8		42.9		112.9		111.6
Flow Technologies	78.5		64.5		218.9		207.8
Total orders	$	223.3	$	225.5	$	650.2	$	701.4
BACKLOG (2)	September 29, 2013		September 30, 2012
Energy	$	208.5	$	210.4
Aerospace	161.0		162.7
Flow Technologies	77.4		71.2
Total backlog	$	446.9	$	444.3
Note 1: Orders do not include the foreign exchange impact due to the re-measurement of customer order backlog amounts denominated in foreign currencies.
Note 2: Backlog includes all unshipped customer orders.

CIRCOR INTERNATIONAL, INC. SUMMARY REPORT BY SEGMENT (in thousands, except earnings per share) UNAUDITED
	2012															2013
	1ST QTR			2ND QTR			3RD QTR			4TH QTR			TOTAL			1ST QTR			2ND QTR			3RD QTR			TOTAL
NET REVENUES
Energy	$	109,264		$	113,527		$	109,968		$	96,582		$	429,341		$	96,722		$	110,832		$	108,473		$	316,027
Aerospace	38,085			35,896			31,795			35,316			141,092			37,326			38,177			36,483			111,986
Flow Technologies	66,931			70,439			68,041			69,707			275,119			71,350			74,635			69,775			215,760
Total	214,280			219,862			209,804			201,605			845,552			205,398			223,644			214,731			643,773
* ADJUSTED OPERATING MARGIN
Energy	8.2		%	11.1		%	14.0		%	12.5		%	11.4		%	11.1		%	13.8		%	17.1		%	14.1		%
Aerospace	10.8		%	8.8		%	4.2		%	3.5		%	7.0		%	3.5		%	8.6		%	11.3		%	7.8		%
Flow Technologies	11.3		%	12.8		%	13.1		%	13.1		%	12.6		%	12.7		%	14.8		%	13.6		%	13.7		%
Segment operating margin	9.6		%	11.3		%	12.2		%	11.1		%	11.1		%	10.3		%	13.2		%	15.0		%	12.9		%
Corporate expenses	(3.2		)%	(2.9		)%	(3.4		)%	(3.4		)%	(3.2		)%	(3.2		)%	(3.3		)%	(3.9		)%	(3.5		)%
* Adjusted operating margin	6.4		%	8.4		%	8.8		%	7.8		%	7.8		%	7.1		%	10.0		%	11.1		%	9.4		%
Restructuring inventory charges	0.0		%	0.0		%	2.0		%	0.0		%	0.5		%	0.1		%	(0.1		)%	0.0		%	0.0		%
Impairment charges	0.0		%	0.0		%	4.9		%	0.0		%	1.2		%	0.0		%	0.0		%	0.0		%	0.0		%
Special (Recoveries)	0.0		%	0.0		%	0.0		%	0.0		%	0.0		%	0.0		%	0.0		%	(1.5		)%	(0.5		)%
Special charges	0.0		%	0.0		%	0.7		%	1.9		%	0.6		%	0.7		%	1.0		%	1.4		%	1.0		%
Total operating margin	6.4		%	8.4		%	1.3		%	5.8		%	5.5		%	6.3		%	9.1		%	11.1		%	8.9		%

CIRCOR INTERNATIONAL, INC. SUMMARY REPORT BY SEGMENT (in thousands, except earnings per share) UNAUDITED
	2012															2013
	1ST QTR			2ND QTR			3RD QTR			4TH QTR			TOTAL			1ST QTR			2ND QTR			3RD QTR			TOTAL
* ADJUSTED OPERATING INCOME
Energy	8,928			12,580			15,432			12,100			49,040			10,751			15,271			18,558			44,580
Aerospace	4,124			3,153			1,324			1,234			9,835			1,320			3,271			4,138			8,729
Flow Technologies	7,587			9,043			8,919			9,105			34,654			9,044			11,065			9,470			29,579
Segment operating income	20,639			24,776			25,675			22,439			93,529			21,115			29,607			32,166			82,888
Corporate expenses	(6,939		)	(6,297		)	(7,170		)	(6,802		)	(27,207		)	(6,588		)	(7,339		)	(8,420		)	(22,346		)
* Adjusted operating income	13,700			18,479			18,505			15,637			66,322			14,528			22,268			23,746			60,542
Restructuring inventory charges	—			—			4,124			37			4,161			250			(242		)	—			8
Impairment charges	—			—			10,348			—			10,348			—			—			—			—
Special (Recoveries)	—			—			—			—			—			—			—			(3,151		)	(3,151		)
Special charges / (recoveries)	—			—			1,377			3,905			5,282			1,378			2,254			2,961			6,592
Total operating income	13,700			18,479			2,656			11,695			46,531			12,900			20,256			23,936			57,093
INTEREST EXPENSE, NET	(1,081		)	(1,017		)	(1,122		)	(1,038		)	(4,258		)	(787		)	(838		)	(745		)	(2,370		)
OTHER EXPENSE, NET	(138		)	(184		)	(564		)	373			(514		)	(612		)	(626		)	(568		)	(1,807		)
PRETAX INCOME	12,481			17,278			970			11,030			41,759			11,501			18,792			22,623			52,915
(PROVISION) BENEFIT FOR INCOME TAXES	(3,896		)	(6,142		)	899			(1,822		)	(10,960		)	(3,592		)	(6,124		)	(4,903		)	(14,618		)
EFFECTIVE TAX RATE	31.2		%	35.5		%	(92.8		)%	16.5		%	26.2		%	31.2		%	32.6		%	21.7		%	27.6		%
NET INCOME	$	8,585		$	11,136		$	1,869		$	9,208		$	30,799		$	7,908		$	12,668		$	17,720		$	38,296
Weighted Average Common Shares Outstanding (Diluted)	17,390			17,451			17,467			17,499			17,452			17,529			17,607			17,667			17,602
EARNINGS PER COMMON SHARE (Diluted)	$	0.49		$	0.64		$	0.11		$	0.53		$	1.76		$	0.45		$	0.72		$	1.00		$	2.17
ADJUSTED EBITDA	$	18,534		$	23,043		$	22,809		$	16,808		$	81,194		$	18,682		$	26,419		$	27,850		$	72,949
ADJUSTED EBITDA AS A % OF SALES	8.6		%	10.5		%	10.9		%	8.3		%	9.6		%	9.1		%	11.8		%	13.0		%	11.3		%
CAPITAL EXPENDITURES	$	4,122		$	6,661		$	3,314		$	4,073		$	18,170		$	4,707		$	4,100		$	4,772		$	13,579
* Adjusted Operating Income & Margin exclude inventory restructuring, impairment and special charges.

CIRCOR INTERNATIONAL, INC. RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS (in thousands, except earnings per share) UNAUDITED
	2012						2013
	1ST QTR	2ND QTR		3RD QTR	4TH QTR	TOTAL	1ST QTR	2ND QTR			3RD QTR			TOTAL
FREE CASH FLOW [NET CASH FLOW FROM OPERATING ACTIVITIES LESS CAPITAL EXPENDITURES]	$(7,089)	$5,077		$18,746	$25,619	$42,353	$1,100	$	9,525		$	29,557		$	40,182
ADD:
Capital Expenditures	4,122	6,661		3,314	4,073	18,170	4,707	4,100			4,772			13,579
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES	$(2,967)	$11,738		$22,060	$29,692	$60,523	$5,807	$	13,625		$	34,329		$	53,761
NET DEBT / (CASH) [TOTAL DEBT LESS CASH & CASH EQUIVALENTS LESS INVESTMENTS]	$57,263	$54,376		$34,706	$8,645	$8,645	$8,814	$	(1,376	)	$	(36,466	)	$	(36,466	)
ADD:
Cash & Cash Equivalents	41,291	41,414		48,976	61,738	61,738	57,633	60,831			86,285			86,285
Investments	101	98		102	101	101	99	96			98			98
TOTAL DEBT	$98,655	$95,888		$83,784	$70,484	$70,484	$66,546	$	59,551		$	49,917		$	49,917
DEBT AS % OF EQUITY	25%	24%		20%	17%	17%	16%	14		%	11		%	11		%
TOTAL DEBT	98,655	95,888		83,784	70,484	70,484	66,546	59,551			49,917			49,917
TOTAL SHAREHOLDERS' EQUITY	399,018	397,957		409,016	418,247	418,247	418,819	432,151			459,058			459,058
EBIT [NET INCOME LESS INCOME TAXES LESS INTEREST EXPENSE, NET]	$13,562	$	18,295	$2,092	$12,068	$46,017	$12,287	$	19,630		$	23,368		$	55,284
LESS:
Interest expense, net	(1,081)	(1,017)		(1,122)	(1,038)	(4,258)	(787)	(838		)	(745		)	(2,370		)
(Provision) benefit for income taxes	(3,896)	(6,142)		899	(1,822)	(10,960)	(3,592)	(6,124		)	(4,903		)	(14,618		)
NET INCOME	$8,585	$11,136		$1,869	$9,208	$30,799	$7,908	$	12,668		$	17,720		$	38,296

CIRCOR INTERNATIONAL, INC. RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS (in thousands, except earnings per share) UNAUDITED
	2012									2013
	1ST QTR	2ND QTR		3RD QTR		4TH QTR		TOTAL		1ST QTR	2ND QTR			3RD QTR			TOTAL
ADJUSTED OPERATING INCOME [OPERATING INCOME EXCLUDING INVENTORY RESTRUCTURING, IMPAIRMENT AND SPECIAL CHARGES / (RECOVERIES)]	$13,700	$	18,479	$18,505		$	15,600	$	66,322	$14,528	$	22,268		$	23,746		$	60,542
LESS:
Inventory restructuring charges	—	—		4,124		37		4,161		250	(242		)	—			8
Impairment charges	—	—		10,348		—		10,348		—	—			—			—
Special (Recoveries)	—	—		—		—		—		—	—			(3,151		)	(3,151		)
Special charges	—	—		1,377		3,905		5,282		1,378	2,254			2,961			6,592
OPERATING INCOME	$13,700	$18,479		$2,656		$11,695		$46,531		$12,900	$	20,256		$	23,936		$	57,093
ADJUSTED NET INCOME [NET INCOME EXCLUDING INVENTORY RESTRUCTURING, IMPAIRMENT AND SPECIAL CHARGES / (RECOVERIES), NET OF TAX]	$8,585	$11,136		$12,171		$11,770		$43,663		$9,043	$14,044			$16,439			$39,526
LESS:
Inventory restructuring charges, net of tax	—	—		2,681		24		2,705		174	(165)			—			9
Impairment charges, net of tax	—	—		6,726		—		6,726		—	—			—			—
Special (Recoveries), net of tax	—	—		—		—		—		—	—			(3,151)			(3,151)
Special charges, net of tax	—	—		895		2,538		3,433		961	1,541			1,870			4,372
NET INCOME	$8,585	$11,136		$1,869		$9,208		$30,799		$7,908	$12,668			$17,720			$38,296
ADJUSTED EARNINGS PER SHARE [EPS EXCLUDING INVENTORY RESTRUCTURING, IMPAIRMENT AND SPECIAL CHARGES / (RECOVERIES), NET OF TAX]	$0.49	$0.64		$	0.76	$0.69		$	2.59	$0.52	$	0.81		$	0.93		$	2.26
LESS:
Inventory restructuring charges, net of tax	$—	$—		$0.17		$—		$0.17		$0.01	$	(0.01	)	$	—		$	—
Impairment charges, net of tax	$—	$—		$0.43		$—		$0.43		$—	$	—		$	—		$	—
Special (Recoveries), net of tax	$—	$—		$—		$—		$—		$—	$	—		(0.18		)	(0.18		)
Special charges, net of tax	$—	$—		$0.06		$0.16		$0.22		$0.06	$	0.10		$	0.11		$	0.27
EARNINGS PER COMMON SHARE (Diluted)	$0.49	$0.64		$0.11		$0.53		$1.76		$0.45	$	0.72		$	1.00		$	2.17

CIRCOR INTERNATIONAL, INC. RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS (in thousands, except earnings per share) UNAUDITED
	2012								2013
	1ST QTR	2ND QTR	3RD QTR		4TH QTR		TOTAL		1ST QTR	2ND QTR			3RD QTR			TOTAL
EBITDA [NET INCOME LESS NET INTEREST EXPENSE, DEPRECIATION, AMORTIZATION AND INCOME TAXES]	$18,534	$23,043	$	2,092	$	12,068	$	65,345	$17,054	$	24,407		$	23,368		$	69,500
LESS:
Interest expense, net	(1,081)	(1,017)	(1,122)		(1,038)		(4,258)		(787)	(838		)	(745		)	(2,370		)
Depreciation	(4,008)	(3,825)	(3,932)		(3,967)		(15,732)		(4,009)	(4,026		)	(3,908		)	(11,943		)
Amortization	(964)	(923)	(936)		(773)		(3,596)		(758)	(751		)	(764		)	(2,273		)
(Provision) benefit for income taxes	(3,896)	(6,142)	899		(1,822)		(10,960)		(3,592)	(6,124		)	(4,903		)	(14,618		)
NET INCOME	$8,585	$11,136	$1,869		$9,208		$30,799		$7,908	$	12,668		$	17,720		$	38,296
ADJUSTED EBITDA [NET INCOME EXCLUDING INVENTORY RESTRUCTURING, IMPAIRMENT AND SPECIAL CHARGES / (RECOVERIES), NET INTEREST EXPENSE, DEPRECIATION, AMORTIZATION AND INCOME TAXES]	$18,534	$23,043	$22,809		$20,750		$	85,136	$18,682	$	26,419		$	27,850		$	72,949
Inventory restructuring charges	$—	$—	$(4,124)		$(37)		$(4,161)		$(250)	$	242		$	—		$	(8	)
Impairment charges	$—	$—	$(10,348)		$—		$(10,348)		$—	$	—		$	—		$	—
Special Recoveries	$—	$—	$—		$—		$—		$—	$	—		$	3,151		$	3,151
Special charges	$—	$—	$(1,377)		$(3,905)		$(5,282)		$(1,378)	$	(2,254	)	$	(2,961	)	$	(6,592	)
Interest expense, net	$(1,081)	$(1,017)	$(1,122)		$(1,038)		$(4,258)		$(787)	$	(838	)	$	(745	)	$	(2,370	)
Depreciation	$(4,008)	$(3,825)	$(3,932)		$(3,967)		$(15,732)		$(4,009)	$	(4,026	)	$	(3,908	)	$	(11,943	)
Amortization	$(964)	$(923)	$(936)		$(773)		$(3,596)		$(758)	$	(751	)	$	(764	)	$	(2,273	)
(Provision) / benefit for income taxes	$(3,896)	$(6,142)	$899		$(1,822)		$(10,960)		$(3,592)	$	(6,124	)	$	(4,903	)	$	(14,618	)
NET INCOME	$8,585	$11,136	$1,869		$9,208		$30,799		$7,908	$	12,668		$	17,720		$	38,296

CIRCOR INTERNATIONAL, INC. RECONCILIATION OF FUTURE PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS UNAUDITED
		4th Quarter 2013
		Low			High
EXPECTED ADJUSTED EARNINGS PER SHARE [EPS EXCLUDING INVENTORY RESTRUCTURING, IMPAIRMENT AND SPECIAL CHARGES, NET OF TAX]		$	0.88		$	0.95
LESS: RESTRUCTURING RELATED CHARGES
Inventory restructuring charges, net of tax	}	$	(0.22	)	$	(0.19	)
Impairment charges, net of tax
Special charges, net of tax
EXPECTED EARNINGS PER COMMON SHARE (Diluted)		$	0.66		$	0.76