CIRCOR International, Inc. (NYSE:CIR) Q2 2020 Earnings Conference Call - Final Transcript

Aug 07, 2020 • 09:00 am ET


CIRCOR International, Inc. (NYSE:CIR) Q2 2020 Earnings Conference Call - Final Transcript


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Greetings, and welcome to CIRCOR International's Second Quarter 2020 Earnings Conference Call. [Operator Instructions] I will now turn the conference over to David Calusdian from Sharon Merrill Associates. Thank you, sir. You may begin.

David C. Calusdian

Thank you, and good morning, everyone. On the call today is Scott Buckhout, CIRCOR's President and CEO; and Abhi Khandelwal, the company's Chief Financial Officer. The slides we'll be referring to today are available on CIRCOR's website at on the Webcast & Presentation Section of the Investors link.

Please turn to Slide 2. Today's discussion contains forward-looking statements that identify future expectations. These expectations are subject to known and unknown risks, uncertainties, and other factors. For a full discussion of these factors, the company advises you to review CIRCOR's Form 10-K, 10-Qs, and other SEC filings. The company's filings are available on its website at Actual results could differ materially from those anticipated or implied by today's remarks. Any forward-looking statements only represent the company's views only as of today, August 7, 2020. While CIRCOR may choose to update these forward-looking statements at a later date, the company specifically disclaims any duty to do so.

On today's call, management will refer to adjusted operating income, adjusted operating margins, adjusted net income, adjusted EPS, free cash flow, net debt and organic measures. These non-GAAP metrics exclude certain special charges and recoveries. The reconciliation of CIRCOR's non-GAAP measures to the comparable GAAP measures are available in the financial tables of the earnings press release on CIRCOR's website.

I'll now turn the call over to Scott.

Scott A. Buckhout

Thank you, David, and good morning, everyone. Before getting into our second quarter highlights, I want to acknowledge the CIRCOR team's continuous dedication and productivity during this difficult time. The CIRCOR team has gone above and beyond to deliver essential products to our customers, while keeping each other safe and maintaining business continuity.

Please turn to Slide 3. CIRCOR delivered a strong second quarter despite unprecedented macro challenges. I'm proud of the portfolio transformation that we've executed over the last couple of years. With the recent divestiture of Distributed Valves, we completed our shift out of upstream oil and gas and other commodity businesses. As a result of this transformation, we've sharpened our focus on our core mission-critical flow control platforms, and we position CIRCOR for strong future growth.

Our current portfolio of mission-critical businesses is more diversified and less cyclical, mitigating the impact of the broader economic environment. In addition, our portfolio of products has differentiated technology and a strong market position that has enabled us to raise prices through the current downturn.

Turning to operations, all of our factories are operating in line with customer demand. As of today, we're absorbing some inefficiencies associated with safety protocols we put in place to ensure our employees' safety. We continue to manage some COVID-19-related challenges on the supply chain side. Beyond this, we're experiencing limited direct disruption in operations from COVID-19. Despite these challenges, the CIRCOR operating system is delivering improved operating