8-K/A 1 cir_q1x03312019x8-ka.htm 8-K/A Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K/A
(Amendment No. 1)

 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 25, 2019
 
CIRCOR INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
 
DELAWARE
 
001-14962
 
04-3477276
(State or other jurisdiction
of incorporation)
 
(Commission
file number)
 
(IRS 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):
¨

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

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

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

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging Growth Company
¨


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 
¨







1

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.01 per share
CIR
New York Stock Exchange

Item 2.02. Results of Operations and Financial Condition.

This Current Report on Form 8-K/A amends the Current Report on Form 8-K (the “Form 8-K”) of CIRCOR International, Inc. (the “Company”), furnished to the Securities and Exchange Commission by the Company on April 25, 2019. On April 25, 2019, the Company issued a press release announcing its financial results for the first fiscal quarter ended March 31, 2019 (the “Q1 Earnings Release”).
The Company is furnishing this Form 8-K/A for the purpose of correcting the following errors in the financial information included in the Q1 Earnings Release. The errors related to the accounting for the divestiture of our Reliability Services business during the first quarter of 2019 as well as currency translation adjustments on certain purchase accounting balances and other reclassifications errors in the originally furnished press release on April 26, 2019 (amounts in thousands except per share amounts).

CONDENSED CONSOLIDATED STATEMENT OF LOSS
 
As Currently Reported
 
As Previously Announced
 
Difference
Selling, general and administrative expenses
 
69,973

 
69,719

 
(254
)
Special and restructuring (recoveries) charges, net
 
(7,816
)
 
(3,779
)
 
(4,037
)
OPERATING INCOME
 
11,712

 
7,929

 
(3,783
)
 
 
 
 
 
 
 
LOSS (INCOME) BEFORE INCOME TAXES
 
446

 
(3,337
)
 
(3,783
)
Provision for (benefit from) income taxes
 
5,079

 
5,095

 
16

NET LOSS
 
(4,633
)
 
(8,432
)
 
(3,799
)
 
 
 
 
 
 
 
Loss per common share:
 
 
 
 
 
 
     Basic
 
$
(0.23
)
 
$
(0.42
)
 
$
(0.19
)
     Diluted
 
$
(0.23
)
 
$
(0.42
)
 
$
(0.19
)
 
CONDENSED CONSOLIDATED BALANCE SHEETS
 
As Currently Reported
 
As Previously Announced
 
Difference
Goodwill
 
460,995

 
476,562

 
15,567

Other Assets
 
37,620

 
35,483

 
(2,137
)
Total Assets
 
1,719,334

 
1,732,764

 
13,430

 
 
 
 
 
 
 
Accrued expenses and other current liabilities
 
99,591

 
99,771

 
180

Total Current Liabilities
 
249,119

 
249,299

 
180

PENSION LIABILITY, NET
 
148,297

 
146,854

 
(1,443
)
OTHER NON-CURRENT LIABILITIES
 
38,295

 
37,832

 
(463
)
SHAREHOLDERS' EQUITY
 
516,177

 
531,333

 
15,156

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
 
1,719,334

 
1,732,764

 
13,430


2

CONDENSED CONSOLIDTED STATEMENT OF CASH FLOWS
As Currently Reported
 
As Previously Announced
 
Difference
Operating Activities
 
 
 
 
 
Net Loss
(4,633
)
 
(8,432
)
 
(3,799
)
Amortization
12,836

 
12,906

 
70

Loss on write down of inventory
3,368

 
3,043

 
(325
)
Amortization of debt issuance costs
1,010

 
—

 
(1,010
)
Loss on sale or write-down of property plant and equipment
96

 
—

 
(96
)
Gain on sale of business
(10,282
)
 
(6,569
)
 
3,713

Trade accounts receivable
(8,635
)
 
(5,758
)
 
2,877

Inventories
(3,452
)
 
(1,108
)
 
2,344

Other current assets and liabilities
(20,171
)
 
(23,243
)
 
(3,072
)
Net cash used in operating activities
(22,378
)
 
(21,686
)
 
692

Investing Activities
 
 
 
 
 
Additions to property, plant and equipment Net cash provided by (used in) investing activities
(3,717
)
 
(3,879
)
 
(162
)
Net cash used in investing activities
79,632

 
79,470

 
(162
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
957

 
426

 
(531
)
(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
5,111

 
5,110

 
(1
)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT THE END OF PERIOD
74,636

 
74,635

 
(1
)

Updated versions of the Q1 Earnings Release and the Q1 Investor Review Presentation reflecting the above-revised financial information will be posted on the Company’s website at https://investors.circor.com.
The information in this Item 2.02 of Form 8-K and 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.

The Company’s management evaluates segment operating performance using operating income before certain charges/credits to cost of revenues and selling, general and administrative expenses, principally associated with acquisition-related activities; restructuring and other costs/income including costs arising from facility consolidations and gains and losses from the sale of product lines; and amortization of acquisition-related intangible assets. The Company also refers to this measure as segment operating income or adjusted operating income. The Company uses this measure because it helps management understand and evaluate the segments’ core operating results and facilitates comparison of performance for determining incentive compensation achievement.

In the press release and accompanying supplemental information, the Company uses the following non-GAAP financial measures: Adjusted operating income, adjusted operating margin, free cash flow, adjusted net income, adjusted earnings per share (EPS), EBITDA, adjusted EBITDA, net debt, combined financial information, and organic revenue, described as follows:


3

•
Adjusted operating income is defined as GAAP operating income excluding intangible amortization from acquisitions completed subsequent to December 31, 2011, depreciation and cost of goods sold charges related to step-up valuations from acquisitions completed subsequent to December 31, 2016, the impact of restructuring related inventory, impairment and special charges or gains.

•
Adjusted operating margin is defined as adjusted operating income divided by net revenues.

•
Free cash flow is defined as net cash flow from operating activities, less net capital expenditures. Management of this Company believes free cash flow 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.

•
Adjusted net income is defined as net income, excluding intangible amortization from acquisitions completed subsequent to December 31, 2011, depreciation and cost of goods sold charges related to step-up valuations from acquisitions completed subsequent to December 31, 2016, the impact of restructuring related inventory, impairment and special charges or gains, net of tax.
  
•
Adjusted EPS is defined as earnings per common share diluted, excluding the per share impact of intangible amortization from acquisitions completed subsequent to December 31, 2011, depreciation and cost of goods sold charges related to step-up valuations from acquisitions completed subsequent to December 31, 2016, the impact of restructuring related inventory, impairment and special charges or gains, net of tax.
  
•
EBITDA is defined as net income plus net interest expense, provision for income taxes, depreciation and amortization.
  
•
Adjusted EBITDA is defined as EBITDA plus the impact of special charges/gains including the impact of restructuring related inventory charges, cost of goods sold charges related to step-up valuations from acquisitions completed subsequent to December 31, 2016, and impairments, net of tax.

•
Net Debt is defined at total debt minus cash and cash equivalents.

•
Combined financial information - Combined segment revenue, combined segment operating income and combined segment operating margin represent the historical CIRCOR segment revenue, segment operating income and segment operating margins all adjusted to include the respective amount related to the Fluid Handling acquisition as though the acquisition was completed on January 1, 2017.

•
Organic growth - the change in revenue and orders excluding the impact of acquisitions and changes in foreign exchange rates.

•
Pro Forma Organic Growth - revenue and orders growth excluding the impact of changes in foreign exchanges rates and assuming the Fluid Handling acquisition occurred on January 1, 2017.

Our management uses these non-GAAP measures to gain an understanding of our comparative operating performance (when comparing such results with previous periods or forecasts). These non-GAAP financial measures are used by management in our financial and operating decision making because we

4

believe they reflect our ongoing business and facilitate period-to-period comparisons. We believe these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating the Company’s current operating performance and future prospects in the same manner as management does, if they so choose. These non-GAAP financial measures also allow investors and others to compare the Company’s current financial results with the Company’s past financial results in a consistent manner. For example:

•
We exclude costs and tax effects associated with restructuring activities, such as reducing overhead and consolidating facilities. We believe that the costs related to these restructuring activities are not indicative of our normal operating costs.
•
We exclude certain acquisition-related costs, including significant transaction costs and the related tax effects. We exclude these costs because we do not believe they are indicative of our normal operating costs.
•
We exclude the expense and tax effects associated with the non-cash amortization of acquisition-related intangible assets because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have lives of 5 to 20 years. Exclusion of the non-cash amortization expense allows comparisons of operating results that are consistent over time for both our newly acquired and long-held businesses and with both acquisitive and non-acquisitive peer companies.
•
We also exclude certain gains/losses and related tax effects, which are either isolated or cannot be expected to occur again with any predictability, and that we believe are not indicative of our normal operating gains and losses. For example, we exclude gains/losses from items such as the sale of a business, significant litigation-related matters and lump-sum pension plan settlements.
CIRCOR’s management uses these non-GAAP measures, in addition to GAAP financial measures, as the basis for measuring the Company’s operating performance and comparing such performance to that of prior periods and to the performance of our peers and competitors. We use such measures when publicly providing our business outlook, assessing future earnings potential, evaluating potential acquisitions and dispositions and in our financial and operating decision-making process including for incentive compensation purposes.
Investors should recognize that these non-GAAP measures might not be comparable to similarly titled measures of other companies. These measures should be considered in addition and not as a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with accounting principles generally accepted in the United States.

A reconciliation of our non-GAAP financial measures 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 in Exhibit 99.1.










5

Item 9.01    Financial Statements and Exhibits. 
(d)
Exhibits.

Exhibit No.
Description
99.1 Corrected Excerpts of Press Release regarding Earnings
 

    


6

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: May 14, 2019                 CIRCOR INTERNATIONAL, INC.


/s/ David F. Mullen
By:     David F. Mullen
Title:
Senior Vice President and Corporate Controller



7