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CIRCOR Reports First Quarter Earnings of $0.45 Per Share

BURLINGTON, Mass., May 2 /PRNewswire-FirstCall/ -- CIRCOR International, Inc. (NYSE:CIR), a leading provider of valves and other fluid control devices for the instrumentation, aerospace, thermal fluid and energy markets, today announced results for the first quarter ended April 1, 2007.

Revenues for the 2007 first quarter were $161.3 million, an increase of 27% from $127.3 million for the first quarter 2006. Net income for the first quarter 2007 increased 43% to $7.4 million, or $0.45 per diluted share, compared to $5.2 million, or $0.32 per diluted share, for the 2006 first quarter.

The Company received orders totaling $186.8 million during the first quarter 2007, a decrease of 8% over the first quarter of 2006 due to the timing of large aerospace and energy project orders, but a sequential increase of 9% over the fourth quarter of 2006. Backlog at March-end 2007 reached another record of $311.2 million, up 29% over March-end 2006 and sequentially increasing 9% over the fourth quarter of 2006.

During the first quarter of 2007, the Company used $5.4 million of free cash flow (defined as net cash from operating activities, less capital expenditures and dividends paid). The use of cash resulted from an investment in working capital to support its record backlog as of April 1, 2007.

Circor's Instrumentation and Thermal Fluid Controls Products segment revenues increased 12% to $81.3 million from $72.4 million in the first quarter 2006. Incoming orders for this segment were $84.8 million for the first quarter 2007, equivalent to the first quarter 2006 after adjusting for the sale of a small business in France, in the fourth quarter 2006. Sequentially, this segment's orders grew 12% and ending backlog grew 3% to $116.9 million as market conditions in this segment's aerospace, instrumentation and steam markets remain relatively healthy. This segment's operating margin for the first quarter 2007 was 7.2%, including a $0.6 million special charge related to the closing of a U.S. plant, or 7.9% excluding the special charge, 30 basis points below the operating margin achieved in the fourth quarter 2006. The U.S. plant closing is expected to cost approximately $1.0 million in the first half of 2007, and yield annualized savings of $1.7 million from the reduction of fixed costs and the related foreign-sourcing of inventory.

Circor's Energy Products segment revenues increased 46% to $80.0 million from $54.9 million in the first quarter last year. Incoming orders for the quarter were $102.1 million, a decrease of 12% from the strong intake in the first quarter of 2006, and ending backlog totaled $194.3 million, a 49% increase compared to the end of the first quarter 2006. Sequentially, this segment's orders grew 7% and ending backlog grew 13% as capital spending in the energy sector continued at high levels. This segment's operating margin was 12.5% during the first quarter of 2006 compared to 10.4% for the first quarter of 2006. The first quarter of 2007 benefited from significantly higher units shipped including project shipments from Sagebrush Pipeline Equipment Co., which was acquired in early February 2006.

David A. Bloss, Sr., Circor's Chairman and Chief Executive Officer, said, "Our first quarter results exceeded our expectations as a result of stronger markets and shipments from both segments of the Company. Globally, our oil and gas markets have remained very active with large project quotations continuing at a robust pace. North American short-cycle business also remains healthy and above our estimates, but is subject to near-term changes in drilling activity and, therefore, we remain cautious about the second half of 2007 for this sector. Meanwhile, orders for our Instrumentation and Thermal Fluid Controls product lines showed a nice uplift from last year's first quarter and sequentially from the fourth quarter of 2006. These markets remain healthy as well and we've made some significant improvements in our on- time delivery performance that has contributed to this increase in customer orders."

Mr. Bloss added, "From an operational performance standpoint, progress is being made in correcting the manufacturing issues within our Instrumentation and Thermal Fluid Controls segment where the effects of changes in key personnel, increased component outsourcing to reduce costs and basic shop floor efficiency improvements all have begun to take hold."

Circor provided guidance for its second quarter 2007 results, indicating it expects earnings to be in the range of $0.53 to $0.56 per diluted share, excluding anticipated special charges related to a facility closure announced internally during the first quarter. The guidance compares favorably to earnings in the second quarter 2006 of $0.40 per diluted share.

CIRCOR International has scheduled a conference call to review its results for the first quarter of 2007 tomorrow, May 3, 2007, at 10:00 am ET. Interested parties may access the call by dialing (888) 208-1814 from the US and Canada and (719) 457-2655 from international locations. A replay of the call will be available from 1:00 p.m. ET on May 3, 2007 through midnight on May 9, 2007. To access the replay, interested parties should dial (888) 203- 1112 or (719) 457-0820 and enter confirmation code # 4767805 when prompted. The presentation slides that will be discussed in the conference call are expected to be available on Wednesday, May 2, 2007, by 6:00 pm ET. The presentation slides may be downloaded from the quarterly earnings page of the investor section on the CIRCOR website: http://www.circor.com/quarterlyearnings/. An audio recording of the conference call also is expected to be posted on the company's website by May 7, 2007.

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. 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 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.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share data)
                                  UNAUDITED

                                                 Three Months Ended
                                           April 1, 2007      April 2, 2006

    Net revenues                                $161,263           $127,295
    Cost of revenues                             116,471             88,957
      GROSS PROFIT                                44,792             38,338
    Selling, general and
     administrative expenses                      32,087             29,849
    Special charges                                  691                  -
      OPERATING INCOME                            12,014              8,489
    Other (income) expense:
      Interest income                                (53)              (109)
      Interest expense                             1,271              1,133
      Other (income) expense, net                    (97)              (131)
        Total other expense                        1,121                893
      INCOME BEFORE INCOME TAXES                  10,893              7,596
    Provision for income taxes                     3,486              2,431
      NET INCOME                                  $7,407             $5,165

    Earnings per common share:
      Basic                                        $0.46              $0.33
      Diluted                                      $0.45              $0.32

    Weighted average common shares
     outstanding:
      Basic                                       16,209             15,853
      Diluted                                     16,533             16,197



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

                                                Three Months Ended
                                         April 1, 2007       April 2, 2006

    OPERATING ACTIVITIES
    Net income                                  $7,407              $5,165
    Adjustments to reconcile net
     income to net cash provided
     by operating activities:
      Depreciation                               2,808               2,619
      Amortization                                 626                 515
      Compensation expense of
       stock-based plans                           966                 790
      Tax effect of share based
       compensation                               (711)               (368)
      (Gain) loss on disposal of
       property, plant and equipment                31                 (23)
      Equity in undistributed
       income of affiliates                        (56)                (33)

      Changes in operating assets and
       liabilities, net of effects from
       business acquisitions:
        Trade accounts receivable                5,857               2,405
        Inventories                             (3,688)             (6,222)
        Prepaid expenses and other
         assets                                 (6,123)             (2,378)
        Accounts payable, accrued
         expenses and other liabilities        (10,161)             (5,510)
    Net cash used in operating
     activities                                 (3,044)             (3,040)

    INVESTING ACTIVITIES
    Additions to property, plant and
     equipment                                  (1,776)             (1,578)
    Proceeds from disposal of
     property, plant and equipment                 341                  14
    Proceeds from sale of assets held
     for sale                                        -                 100
    Business acquisitions, net of
     cash acquired                                   -             (61,015)

    Net cash used in investing
     activities                                 (1,435)            (62,479)

    FINANCING ACTIVITIES
    Proceeds from debt borrowings               25,244              64,608
    Payments of debt                           (23,576)             (3,578)
    Dividends paid                                (609)               (595)
    Proceeds from the exercise of
     stock options                                 965                 297
    Tax effect of share based
     compensation                                  711                 368
    Net cash provided by financing
     activities                                  2,735              61,100
    Effect of exchange rate changes
     on cash and cash equivalents                  142                 376

    DECREASE IN CASH AND CASH
     EQUIVALENTS                                (1,602)             (4,043)
    Cash and cash equivalents at
     beginning of year                          28,652              31,112
    CASH AND CASH EQUIVALENTS AT END
     OF PERIOD                                 $27,050             $27,069



                          CIRCOR INTERNATIONAL, INC.
                         CONSOLIDATED BALANCE SHEETS
                      (in thousands, except share data)
                                  UNAUDITED

                                           April 1, 2007    December 31, 2006

    ASSETS
    Current Assets:
      Cash and cash equivalents                  $27,050              $28,652
      Investments                                     87                   86
      Trade accounts receivable, less
       allowance for doubtful accounts
       of $2,537 and $2,523, respectively        103,186              108,689
      Inventories                                154,645              150,160
      Prepaid expenses and other
       current assets                              9,001                2,926
      Deferred income taxes                        6,618                7,305
      Assets held for sale                         3,360                3,132
        Total Current Assets                     303,947              300,950

    Property, Plant and Equipment,
     net                                          77,855               79,039

    Other Assets:
      Goodwill                                   164,207              163,720
      Intangibles, net                            48,765               49,226
      Other assets                                12,841               12,740
    Total Assets                                $607,615             $605,675

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current Liabilities:
      Accounts payable                           $70,341              $71,788
      Accrued expenses and other
       current liabilities                        49,070               54,359
      Accrued compensation and benefits           14,394               15,325
      Income taxes payable                           953                6,027
      Notes payable and current portion
       of long-term debt                             348                  415
        Total Current Liabilities                135,106              147,914

    Long-Term Debt, net of current
     portion                                      66,155               64,411
    Deferred Income Taxes                         22,727               21,674
    Other Non-Current Liabilities                 14,049               14,375
    Shareholders' Equity:
      Preferred stock, $.01 par
       value; 1,000,000 shares
       authorized; no shares issued
       and outstanding                                 -                    -
      Common stock, $.01 par value;
       29,000,000 shares authorized;
       and 16,289,391 and 16,181,070
       issued and outstanding, respectively          163                  162
      Additional paid-in capital                 227,218              224,508
      Retained earnings                          115,994              109,251
      Accumulated other comprehensive
       income                                     26,203               23,380
        Total Shareholders' Equity               369,578              357,301
    Total Liabilities and Shareholders'
     Equity                                     $607,615             $605,675



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

                                              Three Months Ended
                                     April 1, 2007          April 2, 2006

    ORDERS
      Instrumentation &
       Thermal Fluid Controls              $84,771                $87,264

      Energy Products                      102,071                115,979

      Total orders                        $186,842               $203,243


                                     April 1, 2007      December 31, 2006

    BACKLOG
      Instrumentation &
       Thermal Fluid Controls             $116,910               $113,434

      Energy Products                      194,339                172,235

      Total backlog                       $311,249               $285,669

    Note: Backlog includes all unshipped customer orders.



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

                                                        2006
                                     1ST QTR   2ND QTR   3RD QTR   4TH QTR

    NET REVENUES

      Instrumentation & Thermal
       Fluid Controls (TFC)          $72,434   $79,470   $79,205   $81,591
      Energy Products                 54,861    64,919    71,207    88,024
        Total                        127,295   144,389   150,412   169,615

    OPERATING MARGIN

      Instrumentation & TFC              9.1%      8.6%      9.5%      8.2%
      Energy Products                   10.4%     11.4%     13.2%     15.7%
        Segment operating margin         9.7%      9.9%     11.3%     12.1%
      Corporate expenses                -3.0%     -2.5%     -2.8%     -2.4%
      Special charges                    0.0%      0.0%     -0.3%     -0.1%
        Total operating margin           6.7%      7.4%      8.1%      9.5%

    OPERATING INCOME

      Instrumentation & TFC (excl.
       special & unusual charges)      6,595     6,861     7,522     6,680
      Energy Products (excl. special
       & unusual charges)              5,702     7,429     9,420    13,797
        Segment operating income
         (excl. special & unusual
         charges)                     12,297    14,290    16,942    20,477
      Corporate expenses              (3,809)   (3,578)   (4,284)   (4,146)
      Special charges                      -                (479)     (200)

        Total operating income         8,488    10,712    12,179    16,131

    INTEREST EXPENSE, NET             (1,024)   (1,464)   (1,383)   (1,246)
    OTHER (EXPENSE) INCOME, NET          131       248       (27)     (486)

      PRETAX INCOME                    7,595     9,496    10,769    14,399
    PROVISION FOR INCOME TAXES        (2,431)   (3,038)   (3,446)   (4,016)
    EFFECTIVE TAX RATE                  32.0%     32.0%     32.0%     27.9%
      NET INCOME                      $5,164    $6,458    $7,323   $10,383

    Weighted Average Common Shares
     Outstanding (Diluted)            16,197    16,332    16,368    16,438

    EARNINGS PER COMMON SHARE
     (Diluted)                         $0.32     $0.40     $0.45     $0.63

    EARNINGS PER COMMON SHARE
     (Diluted) excluding special
     charges                           $0.32     $0.40     $0.47     $0.64

    EBIT                              $8,619   $10,960   $12,152   $15,645
    Depreciation                       2,619     3,169     2,901     2,517
    Amortization of intangibles          515       567       709       603
      EBITDA                         $11,753   $14,696   $15,762   $18,765

    EBITDA AS A PERCENT OF SALES         9.2%     10.2%     10.5%     11.1%

    CAPITAL EXPENDITURES              $1,578    $1,742    $3,823    $2,790



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

                                                2006             2007
                                                 YTD           1ST QTR

    NET REVENUES

       Instrumentation & Thermal
        Fluid Controls (TFC)                $312,700           $81,296
       Energy Products                       279,011            79,967
         Total                               591,711           161,263

    OPERATING MARGIN

       Instrumentation & TFC                     8.8%              7.9%
       Energy Products                          13.0%             12.7%
         Segment operating margin               10.8%             10.3%
       Corporate expenses                       -2.7%             -2.4%
       Special charges                          -0.1%             -0.4%
         Total operating margin                  8.0%              7.4%

    OPERATING INCOME

       Instrumentation & TFC (excl.
        special & unusual charges)            27,658             6,433
       Energy Products (excl. special
        & unusual charges)                    36,348            10,125
         Segment operating income
          (excl. special & unusual
          charges)                            64,006            16,558
       Corporate expenses                    (15,817)           (3,853)
       Special charges                          (679)             (691)

         Total operating income               47,510            12,014

    INTEREST EXPENSE, NET                     (5,117)           (1,218)
    OTHER (EXPENSE) INCOME, NET                 (134)               97

       PRETAX INCOME                          42,259            10,893
    PROVISION FOR INCOME TAXES               (12,931)           (3,486)
    EFFECTIVE TAX RATE                          30.6%             32.0%
       NET INCOME                            $29,328            $7,407

    Weighted Average Common Shares
     Outstanding (Diluted)                    16,291            16,533

    EARNINGS PER COMMON SHARE
     (Diluted)                                 $1.80             $0.45

    EARNINGS PER COMMON SHARE
     (Diluted) excluding special
     charges                                   $1.83             $0.48

    EBIT                                     $47,376           $12,111
    Depreciation                              11,206             2,808
    Amortization of intangibles                2,394               626
       EBITDA                                $60,976           $15,545

    EBITDA AS A PERCENT OF SALES                10.3%              9.6%

    CAPITAL EXPENDITURES                      $9,933            $1,776



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

                                                       2006
                                       1ST QTR        2ND QTR         3RD QTR

    FREE CASH FLOW [NET CASH FLOW
     FROM OPERATING ACTIVITIES LESS
     CAPITAL EXPENDITURES LESS
     DIVIDENDS PAID]                   $(5,213)          $402          $8,865
        ADD:   Capital expenditures      1,578          1,742           3,823
               Dividends paid              595            600             600

      NET CASH PROVIDED BY (USED IN)
       OPERATING ACTIVITIES            $(3,040)        $2,744         $13,288

    NET (CASH) DEBT [TOTAL DEBT LESS
     CASH AND CASH EQUIVALENTS LESS
     INVESTMENTS]                      $68,271        $64,336         $55,157
        ADD:   Cash and cash
                equivalents             27,069         25,966          33,265
               Investments                   -          2,639              90

      TOTAL DEBT                       $95,340        $92,941         $88,512

    NET DEBT AS % OF NET
     CAPITALIZATION                       17.7%          16.2%           13.9%

      NET CAPITALIZATION [TOTAL DEBT
       PLUS SHAREHOLDERS' EQUITY LESS
       CASH AND CASH EQUIVALENTS,
       LESS INVESTMENTS]              $385,659       $397,814        $397,012
        LESS:  Total debt              (95,340)       (92,941)        (88,512)
        ADD:   Cash and cash
                equivalents             27,069         25,966          33,265
               Investments                   -          2,639              90

      TOTAL SHAREHOLDERS' EQUITY       317,388        333,478         341,855
        ADD:   Total debt               95,340         92,941          88,512

      TOTAL CAPITAL                   $412,728       $426,419        $430,367

    TOTAL DEBT / TOTAL CAPITAL            23.1%          21.8%           20.6%

    EBIT [NET INCOME LESS INTEREST
     EXPENSE, NET]                      $8,619        $10,960         $12,152
        LESS:  Interest expense, net    (1,024)        (1,464)         (1,383)
               Provision for income
                taxes                   (2,431)        (3,038)         (3,446)

      NET INCOME                        $5,164         $6,458          $7,323

    EBITDA [NET INCOME LESS INTEREST
     EXPENSE, NET LESS DEPRECIATION
     LESS AMORTIZATION LESS TAXES]     $11,753        $14,696         $15,762
        LESS:  Interest expense, net    (1,024)        (1,464)         (1,383)
               Depreciation             (2,619)        (3,169)         (2,901)
               Amortization of
                intangibles               (515)          (567)           (709)
               Provision for income
                taxes                   (2,431)        (3,038)         (3,446)

      NET INCOME                        $5,164         $6,458          $7,323

    INCOME EXCLUDING SPECIAL CHARGES
     [NET INCOME LESS SPECIAL CHARGES,
     NET OF TAX]                        $5,164         $6,458          $7,649
        LESS:  Special charges, net
         of tax                              -              -            (326)

      NET INCOME                        $5,164         $6,458          $7,323

      Weighted average common shares
       outstanding (diluted)            16,197         16,332          16,368

      EARNINGS PER SHARE EXCLUDING
       SPECIAL CHARGES                   $0.32          $0.40           $0.47
                                             -              -               -



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

                                                  2006                  2007
                                       4TH QTR            YTD         1ST QTR

    FREE CASH FLOW [NET CASH FLOW
     FROM OPERATING ACTIVITIES LESS
     CAPITAL EXPENDITURES LESS
     DIVIDENDS PAID]                   $13,476        $17,530         $(5,429)
        ADD:   Capital expenditures      2,790          9,933           1,776
               Dividends paid              600          2,395             609

      NET CASH PROVIDED BY (USED IN)
       OPERATING ACTIVITIES            $16,866        $29,858         $(3,044)

    NET (CASH) DEBT [TOTAL DEBT LESS
     CASH AND CASH EQUIVALENTS LESS
     INVESTMENTS]                      $36,088        $36,088         $39,366
        ADD:   Cash and cash
                equivalents             28,652         28,652          27,050
               Investments                  86             86              87

      TOTAL DEBT                       $64,826        $64,826         $66,503

    NET DEBT AS % OF NET
     CAPITALIZATION                        9.2%           9.2%            9.6%

      NET CAPITALIZATION [TOTAL DEBT
       PLUS SHAREHOLDERS' EQUITY LESS
       CASH AND CASH EQUIVALENTS,
       LESS INVESTMENTS]              $393,389       $393,389        $408,944
        LESS:  Total debt              (64,826)       (64,826)        (66,503)
        ADD:   Cash and cash
                equivalents             28,652         28,652          27,050
               Investments                  86             86              87

      TOTAL SHAREHOLDERS' EQUITY       357,301        357,301         369,578
        ADD:   Total debt              $64,826        $64,826         $66,503

      TOTAL CAPITAL                   $422,127       $422,127        $436,081

    TOTAL DEBT / TOTAL CAPITAL            15.4%          15.4%           15.3%

    EBIT [NET INCOME LESS INTEREST
     EXPENSE, NET]                     $15,645        $47,376         $12,111
        LESS:  Interest expense, net    (1,246)        (5,117)         (1,218)
               Provision for income
                taxes                   (4,016)       (12,931)         (3,486)

      NET INCOME                       $10,383        $29,328          $7,407

    EBITDA [NET INCOME LESS INTEREST
     EXPENSE, NET LESS DEPRECIATION
     LESS AMORTIZATION LESS TAXES]     $18,765        $60,976         $15,545
        LESS:  Interest expense, net    (1,246)        (5,117)         (1,218)
               Depreciation             (2,517)       (11,206)         (2,808)
               Amortization of
                intangibles               (603)        (2,394)           (626)
               Provision for income
                taxes                   (4,016)       (12,931)         (3,486)

      NET INCOME                       $10,383        $29,328          $7,407

    INCOME EXCLUDING SPECIAL CHARGES
     [NET INCOME LESS SPECIAL CHARGES,
     NET OF TAX]                       $10,527        $29,799          $7,877

        LESS:  Special charges, net
         of tax                           (144)          (471)           (470)

      NET INCOME                       $10,383        $29,328          $7,407

      Weighted average common shares
       outstanding (diluted)            16,438         16,291          16,533

      EARNINGS PER SHARE EXCLUDING
       SPECIAL CHARGES                   $0.64          $1.83           $0.48
                                             -              -               -

Source: CIRCOR International, Inc.

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