CIR_Q1_04.05.2015

“Our first-quarter revenues were in line with expectations overall at $166 million with adjusted EPS of $0.60 despite significant headwind from currencies,” said Scott Buckhout, President and Chief Executive Officer. “In our Energy segment, strong orders in our long-cycle large international projects business offset weaker orders in our short-cycle distributed valves business. Aerospace & Defense orders came in as expected. After adjusting for divestitures and currency, organic orders grew 9%.”

On April 16, the Company announced the acquisition of Germany-based Schroedahl, a manufacturer of automatic recirculation safety valves, primarily for the higher-growth power generation market in Asia. This acquisition is expected to be accretive to earnings per share in the first year. Additional details on the transaction will be provided during the conference call later today.

“We remain focused on enhancing shareholder value. During the quarter, we repurchased more than 302,000 shares under our previously announced share repurchase program. Our growth initiatives and restructuring actions remain on track. In addition, we are announcing another restructuring program expected to deliver $5.0 million of annualized savings. Going forward, we will continue to drive cost reduction, expand margins and focus on what we can control as we manage through this cycle,” concluded Buckhout.

CIRCOR International will hold a conference call to review its financial results today, April 28, 2015, at 9:00 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.

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. 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.

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 the performance of the Schroedahl acquisition and the realization of cost reductions from restructuring activities. Actual events, performance or results could differ materially from the anticipated events, performance or results expressed or implied by such forward-looking statements. 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.

CIRCOR International, Inc. designs, manufactures and markets highly engineered products and sub-systems for markets including oil & gas, power generation and aerospace & defense. CIRCOR has a diversified product portfolio with recognized, market-leading brands that fulfill its customers’ unique application needs. The Company’s strategy is to grow organically and through complementary acquisitions; simplify CIRCOR’s operations; achieve world class operational excellence; and attract and retain top industry talent. For more information, visit the Company’s investor relations web site at http://investors.circor.com.

CIRCOR INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) UNAUDITED

	Three Months Ended
	April 5, 2015			March 30, 2014
Net revenues	$	165,860		$	211,186
Cost of revenues	113,211			146,548
GROSS PROFIT	52,649			64,638
Selling, general and administrative expenses	38,088			44,888
Special charges (recoveries), net	1,511			(1,157		)
OPERATING INCOME	13,050			20,907
Other expense (income):
Interest expense, net	640			918
Other (income), net	(506		)	(468		)
TOTAL OTHER EXPENSE, NET	134			450
INCOME BEFORE INCOME TAXES	12,916			20,457
Provision for income taxes	3,284			5,825
NET INCOME	$	9,632		$	14,632
Earnings per common share:
Basic	$	0.55		$	0.83
Diluted	$	0.54		$	0.82
Weighted average number of common shares outstanding:
Basic	17,662			17,620
Diluted	17,712			17,741
Dividends paid per common share	$	0.0375		$	0.0375

CIRCOR INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (UNAUDITED)

	Three Months Ended
	April 5, 2015			March 30, 2014
OPERATING ACTIVITIES
Net income	$	9,632		$	14,632
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation	3,521			4,069
Amortization	710			786
Compensation expense of share-based plans	2,222			1,830
Tax effect of share-based plan compensation	(289		)	(571		)
Loss on sale of property, plant and equipment	46			34
(Gain) on sale of business	(972		)	—
Changes in operating assets and liabilities:
Trade accounts receivable, net	7,480			(9,952		)
Inventories	(18,697		)	234
Prepaid expenses and other assets	(4,787		)	(859		)
Accounts payable, accrued expenses and other liabilities	(15,298		)	6,854
Net cash (used in) provided by operating activities	(16,432		)	17,057
INVESTING ACTIVITIES
Additions to property, plant and equipment	(1,983		)	(2,670		)
Proceeds from the sale of property, plant and equipment	—			13
Proceeds from the sale of affiliate	2,759			—
Net cash provided by (used in) investing activities	776			(2,657		)
FINANCING ACTIVITIES
Proceeds from long-term debt	46,903			48,029
Payments of long-term debt	(21,540		)	(41,781		)
Dividends paid	(672		)	(670		)
Proceeds from the exercise of stock options	38			192
Tax effect of share-based plan compensation	289			571
Purchases of common stock	(16,682		)	—
Net cash provided by financing activities	8,336			6,341
Effect of exchange rate changes on cash and cash equivalents	(10,083		)	(824		)
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(17,403		)	19,917
Cash and cash equivalents at beginning of year	121,286			102,180
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	103,883		$	122,097
Cash paid during the year for:
Income taxes	$	2,216		$	2,913
Interest	$	394		$	472

CIRCOR INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS (in thousands)

	April 5, 2015			December 31, 2014
ASSETS	(unaudited)
CURRENT ASSETS:
Cash and cash equivalents	$	103,883		$	121,286
Short-term investments	80			86
Trade accounts receivable, less allowance for doubtful accounts of $9,122 and $9,536, respectively	140,752			156,738
Inventories	194,624			183,434
Prepaid expenses and other current assets	21,731			21,626
Deferred income tax asset	22,184			22,861
Total Current Assets	483,254			506,031
PROPERTY, PLANT AND EQUIPMENT, NET	90,045			96,212
OTHER ASSETS:
Goodwill	69,832			72,430
Intangibles, net	24,797			26,887
Deferred income tax asset	17,206			19,048
Other assets	3,557			4,114
TOTAL ASSETS	$	688,691		$	724,722
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	77,893		$	87,112
Accrued expenses and other current liabilities	53,443			65,223
Accrued compensation and benefits	18,166			24,728
Notes payable and current portion of long-term debt	8,481			8,423
Total Current Liabilities	157,983			185,486
LONG-TERM DEBT, NET OF CURRENT PORTION	29,065			5,261
DEFERRED INCOME TAXES	7,107			7,771
OTHER NON-CURRENT LIABILITIES	31,433			32,111
SHAREHOLDERS’ EQUITY:
Common stock	177			177
Additional paid-in capital	279,405			277,227
Retained earnings	259,599			250,635
Treasury stock	(16,682		)	—
Accumulated other comprehensive loss, net of taxes	(59,396		)	(33,946		)
Total Shareholders’ Equity	463,103			494,093
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	688,691		$	724,722

CIRCOR INTERNATIONAL, INC. SUMMARY OF ORDERS AND BACKLOG (in millions) UNAUDITED

	Three Months Ended
	April 5, 2015		March 30, 2014
ORDERS (1)(5)
Energy	$	143.1	$	147.3
Aerospace & Defense	39.2		37.2
Total orders	$	182.3	$	184.5

BACKLOG (2)(5)	April 5, 2015		March 30, 2014
Energy (3)	$	247.6	$	265.5
Aerospace & Defense (4)	104.1		163.1
Total backlog	$	351.8	$	428.6

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 unshipped customer orders.
Note 3: Energy backlog was reduced during the fourth quarter of 2014 by $5.5 million related to customer order cancellations initially recorded in prior years.
Note 4: Aerospace & Defense reduced backlog in the second quarter of 2014 by $28.6 million associated with the exit of certain landing gear product lines.
Note 5: Three months ended March 30, 2014 orders and backlog amounts exclude business divestitures in both the Energy and Aerospace & Defense segments.

CIRCOR INTERNATIONAL, INC. SUMMARY REPORT BY SEGMENT (in thousands, except percentages) UNAUDITED

	2014															2015
	1ST QTR			2ND QTR			3RD QTR			4TH QTR			TOTAL			1ST QTR
NET REVENUES
Energy	$	162,587		$	160,580		$	157,658		$	172,432		$	653,257		$	127,586
Aerospace & Defense	48,599			47,304			46,160			46,126			188,189			38,274
Total	$	211,186		$	207,884		$	203,818		$	218,558		$	841,446		$	165,860
ADJUSTED OPERATING MARGIN
Energy	13.8		%	14.6		%	16.9		%	14.3		%	14.9		%	13.8		%
Aerospace & Defense	9.1		%	7.1		%	5.0		%	5.3		%	6.6		%	8.0		%
Segment operating margin	12.7		%	12.9		%	14.2		%	12.4		%	13.0		%	12.4		%
Corporate expenses	(3.4		)%	(2.2		)%	(2.8		)%	(2.7		)%	(2.8		)%	(3.6		)%
Adjusted operating margin	9.4		%	10.7		%	11.4		%	9.6		%	10.2		%	8.8		%
Restructuring inventory charges	—		%	2.5		%	1.4		%	—		%	0.9		%	—		%
Impairment charges	—		%	—		%	—		%	0.3		%	0.1		%	—		%
Special restructuring charges	0.4		%	0.6		%	0.2		%	1.2		%	0.6		%	0.9		%
Special other charges, net of recoveries	(0.9		)%	—		%	—		%	4.3		%	0.9		%	—		%
Total GAAP operating margin	9.9		%	7.6		%	9.7		%	3.7		%	7.7		%	7.9		%

CIRCOR INTERNATIONAL, INC. SUMMARY REPORT BY SEGMENT (in thousands, except earnings per share and percentages) UNAUDITED


	2014															2015
	1ST QTR			2ND QTR			3RD QTR			4TH QTR			TOTAL			1ST QTR
ADJUSTED OPERATING INCOME
Energy	$	22,462		$	23,502		$	26,577		$	24,575		$	97,117		$	17,550
Aerospace & Defense	4,426			3,362			2,295			2,425			12,508			3,045
Segment operating income	26,888			26,864			28,872			27,000			109,625			20,595
Corporate expenses	(7,137		)	(4,634		)	(5,678		)	(5,965		)	(23,415		)	(6,034		)
Adjusted operating income	19,750			22,231			23,194			21,035			86,210			14,561
Restructuring inventory charges	—			5,139			2,850			—			7,989			—
Impairment charges	—			—			—			726			726			—
Special restructuring charges	786			1,257			478			2,725			5,246			1,512
Special other charges, net of recoveries	(1,943		)	—			—			9,434			7,491			(1		)
Total GAAP operating income	20,907			15,835			19,866			8,150			64,757			13,050
INTEREST EXPENSE, NET	(918		)	(891		)	(436		)	(407		)	(2,652		)	(640		)
OTHER INCOME (EXPENSE), NET	468			384			(419		)	722			1,156			506
PRETAX INCOME	20,457			15,328			19,012			8,465			63,261			12,916
(PROVISION) FOR BENEFIT FROM INCOME TAXES	(5,825		)	(3,402		)	(4,337		)	690			(12,875		)	(3,284		)
EFFECTIVE TAX RATE	28.5		%	22.2		%	22.8		%	(8.2		)%	20.4		%	25.4		%
NET INCOME	$	14,632		$	11,926		$	14,675		$	9,155		$	50,386		$	9,632
Weighted Average Common Shares Outstanding (Diluted)	17,741			17,767			17,779			17,782			17,768			17,712
EARNINGS PER COMMON SHARE (Diluted)	$	0.82		$	0.67		$	0.83		$	0.51		$	2.84		$	0.54
ADJUSTED EBITDA	$	25,073		$	27,536		$	27,530		$	26,789		$	106,927		$	19,298
ADJUSTED EBITDA AS A % OF SALES	11.9		%	13.2		%	13.5		%	12.3		%	12.7		%	11.6		%
CAPITAL EXPENDITURES	$	2,670		$	2,933		$	3,297		$	3,910		$	12,810		$	1,983

CIRCOR INTERNATIONAL, INC. RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS (in thousands, except percentages) UNAUDITED

	2014															2015
	1ST QTR			2ND QTR			3RD QTR			4TH QTR			TOTAL			1ST QTR
FREE CASH FLOW AS % OF NET INCOME	98		%	62		%	96		%	243		%	115		%	(191		)%
FREE CASH FLOW	$	14,387		$	7,365		$	14,015		$	22,249		$	58,016		$	(18,415	)
ADD:
Capital Expenditures	2,670			2,933			3,297			3,910			12,810			1,983
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	17,057		$	10,298		$	17,312		$	26,159		$	70,826		$	(16,432	)
NET DEBT (CASH)	$	(66,056	)	$	(72,982	)	$	(80,829	)	$	(107,688	)	$	(107,688	)	$	(66,417	)
ADD:
Cash & Cash Equivalents	122,097			116,326			114,580			121,286			121,286			103,883
Investments	92			95			91			86			86			80
TOTAL DEBT	$	56,133		$	43,439		$	33,842		$	13,684		$	13,684		$	37,546
DEBT AS % OF EQUITY	11		%	9		%	7		%	3		%	3		%	8		%
TOTAL DEBT	56,133			43,439			33,842			13,684			13,684			37,546
TOTAL SHAREHOLDERS' EQUITY	$	492,601		$	507,363		$	508,035		$	494,093		$	494,093		$	463,103

CIRCOR INTERNATIONAL, INC. RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS (in thousands) UNAUDITED


	2014											2015
	1ST QTR			2ND QTR		3RD QTR		4TH QTR		TOTAL		1ST QTR
ADJUSTED OPERATING INCOME	$	19,750		$	22,230	$	23,194	$	21,035	$	86,210	$	14,561
LESS:
Inventory restructuring charges	—			5,139		2,850		—		7,989		—
Impairment charges	—			—		—		726		726		—
Special restructuring charges	786			1,257		478		2,725		5,246		1,512
Special other charges, net of recoveries	(1,943		)	—		—		9,434		7,491		(1		)
OPERATING INCOME	$	20,907		$	15,834	$	19,866	$	8,150	$	64,757	$	13,050
ADJUSTED NET INCOME	$	13,916		$	16,090	$	16,827	$	19,188	$	66,019	$	10,564
LESS:
Inventory restructuring charges, net of tax	—			3,316		1,839		—		5,155		—
Impairment charges, net of tax	—			—		—		726		726		—
Special restructuring charges, net of tax	508			848		313		1,763		3,432		1,079
Special other charges, net of recoveries, net of tax	(1,224		)	—		—		7,544		6,320		(147		)
NET INCOME	$	14,632		$	11,926	$	14,675	$	9,155	$	50,386	$	9,632
ADJUSTED EARNINGS PER SHARE (Diluted)	$	0.78		$	0.91	$	0.95	$	1.08	$	3.72	$	0.60
LESS:
Inventory restructuring charges, net of tax	—			0.19		0.10		—		0.29		—
Impairment charges, net of tax	—			—		—		0.04		0.04		—
Special restructuring charges, net of tax	0.03			0.05		0.02		0.10		0.20		0.06
Special other charges, net of recoveries, net of tax	(0.07		)	—		—		0.42		0.35		—
EARNINGS PER COMMON SHARE (Diluted)	$	0.82		$	0.67	$	0.83	$	0.51	$	2.84	$	0.54

CIRCOR INTERNATIONAL, INC. RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS (in thousands) UNAUDITED


	2014															2015
	1ST QTR			2ND QTR			3RD QTR			4TH QTR			TOTAL			1ST QTR
EBITDA	$	26,230		$	21,140		$	24,202		$	13,904		$	85,475		$	17,787
LESS:
Interest expense, net	(918		)	(891		)	(436		)	(407		)	(2,652		)	(640		)
Depreciation	(4,069		)	(4,116		)	(3,978		)	(4,283		)	(16,446		)	(3,521		)
Amortization	(786		)	(805		)	(776		)	(749		)	(3,116		)	(710		)
(Provision) for benefit from income taxes	(5,825		)	(3,402		)	(4,337		)	690			(12,875		)	(3,284		)
NET INCOME	$	14,632		$	11,926		$	14,675		$	9,155		$	50,386		$	9,632
ADJUSTED EBITDA	$	25,073		$	27,536		$	27,530		$	26,789		$	106,927		$	19,298
LESS:
Inventory restructuring charges	—			(5,139		)	(2,850		)	—			(7,989		)	—
Impairment charges	—			—			—			(726		)	(726		)	—
Special restructuring charges	(786		)	(1,257		)	(478		)	(2,725		)	(5,246		)	(1,512		)
Special other charges, net of recoveries	1,943			—			—			(9,434		)	(7,491		)	1
Interest expense, net	(918		)	(891		)	(436		)	(407		)	(2,652		)	(640		)
Depreciation	(4,069		)	(4,116		)	(3,978		)	(4,283		)	(16,446		)	(3,521		)
Amortization	(786		)	(805		)	(776		)	(749		)	(3,116		)	(710		)
(Provision) for benefit from income taxes	(5,825		)	(3,402		)	(4,337		)	690			(12,875		)	(3,284		)
NET INCOME	$	14,632		$	11,926		$	14,675		$	9,155		$	50,386		$	9,632

CIRCOR INTERNATIONAL, INC. RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS (in thousands, except per share data) UNAUDITED

	2014
	1ST QTR			2ND QTR		3RD QTR		4TH QTR		TOTAL
NET REVENUES EXCLUDING DIVESTITURES	$	198,204		$	194,349	$	189,705	$	207,970	$	790,228
ADD:
Energy divestiture	10,554			10,037		10,667		8,465		39,723
Aerospace & Defense divestiture	2,428			3,498		3,446		2,123		11,495
NET REVENUES	$	211,186		$	207,884	$	203,818	$	218,558	$	841,446
ADJUSTED EARNINGS PER SHARE EXCLUDING DIVESTITURES (Diluted)	0.79			0.88		0.89		1.05		3.61
ADD:
Divestitures	(0.01		)	0.03		0.06		0.03		0.11
ADJUSTED EARNINGS PER SHARE (Diluted)	$	0.78		$	0.91	$	0.95	$	1.08	$	3.72


•	Orders of $182 million with solid bookings for large international projects


•	Repurchased 302,000 shares of common stock for $16.7 million


•	Restructuring actions remain on track; announcing additional restructuring program