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CIRCOR International Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 10, 2010 05:19PM

CIRCOR International Inc. (CIR) filed Quarterly Report for the period ended 2010-04-04. Circor International Inc. has a market cap of $524.88 million; its shares were traded at around $30.79 with a P/E ratio of 17.01 and P/S ratio of 0.82. The dividend yield of Circor International Inc. stocks is 0.49%.

CIR is in the portfolios of John Keeley of Keeley Fund Management, NWQ Managers of NWQ Investment Management Co, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Our net inventory balance was $146.9 million as of April 4, 2010, compared to $145.0 million as of December 31, 2009. Our inventory allowance as of April 4, 2010 was $14.9 million, compared with $13.7 million as of December 31, 2009. Our provision for inventory obsolescence was $1.5 million and $1.1 million for the first quarter of 2010 and 2009, respectively.

Energy segment revenues decreased by $31.6 million, or 35%, for the quarter ended April 4, 2010 compared to the quarter ended March 29, 2009. The decrease was the result of organic declines of $41.6 million partially offset by additional revenues of $7.7 million due to the fourth quarter 2009 acquisition of Pipeline Engineering and revenues of $2.3 million from foreign currency fluctuations. The organic declines of $41.6 million, or 47%, were the result of weakness across all areas, including large international projects, North American oil and gas drilling and production activities as well as US pipeline equipment projects. Orders for this segment increased $14.5 million to $60.3 million for the three months ended April 4, 2010 compared to $45.8 million for the three months ended March 29, 2009. This increase was primarily due strength in North American drilling and production activities, which have partially rebounded from the low order intake recorded in 2009. Orders also increased over the three-months ended March 29, 2009 as a result of the fourth quarter 2009 acquisition of Pipeline Engineering. This was partially offset by a fewer number of large international projects. Backlog has increased by $8.1 million to $135.4 million as of April 4, 2010 compared to the same period in 2009. We have seen a rebound in the North American short cycle activities which is helping to offset lower large international and large pipeline projects.

Aerospace segment revenues decreased by $1.1 million, or 4%, for the quarter ended April 4, 2010 compared to the quarter ended March 29, 2009. The decrease in revenues was the net result of an organic decline of 13%, or $3.6 million, driven by softening markets for commercial aerospace, military and defense shipments. This decrease was partially offset by 8%, or $2.2 million, in higher revenues resulting from the March 2009 acquisitions of Bodet Aero (“Bodet”) and Atlas Productions (“Atlas”) and $0.4 million from foreign currency fluctuations. Orders for this segment increased $10.6 million to $33.0 million for the three months ended April 4, 2010 compared to $22.4 million for the three months ended March 29, 2009. This increase was due mainly to the timing of military landing gear spare parts orders, an increase in commercial aftermarket activities and military orders. Backlog has increased by $12.8 million to $121.0 million as of April 4, 2010 compared to the same period in 2009. There have been some signs that the commercial aerospace markets are seeing modest year over year improvement; however, we remain cautious on 2010 anticipating shipments to remain relatively flat compared to 2009.

Flow Technologies segment revenues increased by $3.3 million, or 6%, for the quarter ended April 4, 2010 compared to the quarter ended March 29, 2009. The increase in revenues was the net result of an incremental $1.7 million from organic growth primarily due to semiconductor strength, which has rebounded from distressed levels in 2009. Additionally, Flow Technologies experienced $1.6 million in higher revenues resulting from foreign currency fluctuations primarily due to higher Euro and English Pound strength compared to the US dollar. Orders for this segment increased $14.1 million to $67.8 million for the three months ended April 4, 2010 compared to $53.6 million for the three months ended March 29, 2009 with improvement in most markets except commercial construction and chemical and refining. Backlog has increased by $11.4 million to $74.0 million as of April 4, 2010 compared to the same period in 2009 driven primarily by a large U.S. naval order booked during the fourth quarter of 2009, which is not expected to ship until 2011. Our 2010 outlook continues to be cautious for most of our Flow Technologies markets except U.S. naval where we have a strong opening backlog.

Gross profit for the Aerospace segment increased $0.2 million, or 2%, for the quarter ended April 4, 2010 compared to the quarter ended March 29, 2009. This segment’s increase was primarily due to $0.5 million from the March 2009 acquisitions of Bodet and Atlas and $0.1 million from favorable foreign exchange rates. This increase was partially offset by a decline of $0.4 million due primarily to the revenue declines and lost operating leverage. Gross margins improved by 200 basis points due to favorable product mix and productivity gains.

Selling, general and administrative expenses for the Energy segment increased 10%, or $1.0 million, compared to the first quarter 2009 due to a $2.7 million increase from the acquisition of Pipeline Engineering and a $0.4 million increase due to foreign exchange rates. These increases were partially offset by a $2.1 million operational decline due to lower commissions, administrative and severance costs.

Read the The complete Report



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