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CIRCOR Reports First Quarter Earnings of $0.76 Per Share

BURLINGTON, Mass., April 30 /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 March 30, 2008.

Revenues for the 2008 first quarter were $176.6 million, an increase of 9.5% from $161.3 million for the first quarter 2007. Net income for the first quarter 2008 increased 74% to $12.9 million, or $0.76 per diluted share, compared to $7.4 million, or $0.45 per diluted share, for the 2007 first quarter.

The Company received orders totaling $237.0 million during the first quarter 2008, an increase of 27% over $186.8 million in orders in the first quarter of 2007 due to strength in naval, aerospace and energy markets, including both projects and distribution products, and a sequential increase of 39% over the fourth quarter of 2007. Backlog at March-end 2008 reached another record of $452.0 million, up 45% over March-end 2007 backlog of $311.2 million, and sequentially increasing 15% over the fourth quarter of 2007.

During the first quarter of 2008, the Company used $5.4 million of free cash flow (defined as net cash from operating activities, less capital expenditures and dividends paid) due to investment in working capital to support its record backlog as of March 30, 2008.

Circor's Instrumentation and Thermal Fluid Controls Products segment revenues increased 9%, to $88.5 million from $81.3 million in the first quarter 2007, with 4% of the increase due to favorable currency adjustments. Incoming orders for this segment were $111.2 million for the first quarter 2008, an increase of 31% from $84.8 million in the first quarter 2007, which included large maritime orders as well as strong aerospace orders. Sequentially, this segment's orders grew 19% and ending backlog grew 17% to $159.5 million. This segment's operating margin for the first quarter 2008 was 11.3% compared to 7.9% in the first quarter of 2007, and 8.3% in the fourth quarter of 2007. Compared to the first quarter of 2007 improvement primarily came from price, mix of shipments and productivity.

Circor's Energy Products segment revenues increased by $8.2 million, or 10%, to $88.1 million for the quarter ended March 30, 2008 compared to $80.0 million in the quarter ended April 1, 2007. Higher foreign exchange rates, primarily the higher Euro, compared to the US dollar, accounted for $7.2 million of the incremental revenue increase. Incoming orders for the quarter were $125.9 million, an increase of 23% over $102.1 million in the first quarter of 2007 and 63% sequentially with ending backlog totaling $292.6 million, a 51% increase compared to $194.3 million at the end of the first quarter 2007, and 15% sequentially. This segment's operating margin was 16.2% during the first quarter of 2008 compared to 12.7% for the first quarter of 2007 and 15.3% for the fourth quarter of 2007. The first quarter of 2008 benefited from high margins on some large international oil and gas projects as well as favorable currency impacts.

Bill Higgins, Circor's President and Chief Executive Officer, said, "Our first quarter results exceeded our expectations as a result of strong global markets, a great mix of shipments and margin expansion in both segments. Globally, our oil and gas markets have remained solid. Large project quotations continue at a high level and the North American short-cycle business orders rebounded with our backlog growing over the fourth quarter 2007. Meanwhile, orders for our Instrumentation and Thermal Fluid Controls Products were also strong especially in aerospace where the markets continue to look solid as well as maritime orders where we won some large naval related orders to be shipped in 2009 and 2010."

Mr. Higgins added, "The most notable area of improvement in the quarter was our healthy segment operating margins (which exclude corporate and special charge expenses) at 13.8% which was the highest since Circor became public at the end of 1999. Although we will still have quarters that are up and down, the focus on operational excellence and lean manufacturing over the past few years, leadership development, strong customer markets, favorable currency, as well as positive product and project mix all have contributed to the great results."

Circor provided guidance for its second quarter 2008 results, indicating it expects earnings to be in the range of $0.74 to $0.83 per diluted share, excluding special charges. The guidance compares favorably to earnings in the second quarter 2007 of $0.60 per diluted share.

CIRCOR International will hold a conference call to review its first quarter results tomorrow, May 1, 2008 at 1:00 p.m. ET. Interested parties may access the call by dialing (888)-244-2511 from the US and Canada and (913) 312-1418 from international locations. A replay of the call will be available from 4:00 pm ET on Thursday, May 1, 2008, through 4:00 pm ET on Thursday, May 8, 2008. To access the replay, interested parties should dial (888) 203-1112 or (719) 457-0820 and enter confirmation code #4902483 when prompted. The presentation slides that will be discussed in the conference call are expected to be available today, April 30, 2008, by 6:00 pm ET and may be downloaded from the quarterly earnings page of the investor section on the CIRCOR website at 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 6, 2008.

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
                                             March 30, 2008      April 1, 2007


        Net revenues                              $176,575           $161,263
        Cost of revenues                           121,686            116,471
          GROSS PROFIT                              54,889             44,792
        Selling, general and
         administrative expenses                    35,220             32,087
        Special charges (income), net                  160                691
          OPERATING INCOME                          19,509             12,014
        Other (income) expense:
          Interest income                             (202)               (53)
          Interest expense                             347              1,271
          Other (income) expense, net                  401                (97)
            Total other expense                        546              1,121
          INCOME BEFORE INCOME TAXES                18,963             10,893
        Provision for income taxes                   6,068              3,486
          NET INCOME                               $12,895             $7,407

        Earnings per common share:
          Basic                                      $0.77              $0.46
          Diluted                                    $0.76              $0.45

        Weighted average common shares
         outstanding:
          Basic                                     16,679             16,209
          Diluted                                   16,872             16,533



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

                                                    Three Months Ended
                                           March 30, 2008       April 1, 2007


       OPERATING ACTIVITIES
       Net income                               $12,895              $7,407
       Adjustments to reconcile net
        income to net cash provided
        by operating activities:
           Depreciation                           2,874               2,808
           Amortization                             656                 626
           Compensation expense of
            stock-based plans                     1,503                 966
           Tax effect of share based
            compensation                         (1,171)               (711)
           (Gain) Loss on sale of
            property, plant and equipment           (83)                 31
           Equity earnings and paid
            dividends of affiliate, net               -                 (56)

           Changes in operating assets
            and liabilities, net of
            effects from business
            acquisitions:
             Trade accounts receivable           (6,858)              5,857
             Inventories                         (5,090)             (3,688)
             Prepaid expenses and other
              assets                             (3,477)             (6,123)
             Accounts payable, accrued
              expenses and other
              liabilities                        (3,138)            (10,161)
       Net cash used in operating
        activities                               (1,889)             (3,044)

       INVESTING ACTIVITIES
       Additions to property, plant and
        equipment                                (2,851)             (1,776)
       Proceeds from disposal or sale of
        property, plant and equipment                94                 341
       Proceeds from sale of investments          5,451                   -
       Net cash provided by (used in)
        investing activities                      2,694              (1,435)

       FINANCING ACTIVITIES
       Proceeds from debt borrowings             16,500              25,244
       Payments of debt                         (13,606)            (23,576)
       Dividends paid                              (626)               (609)
       Proceeds from the exercise of
        stock options                             2,115                 965
       Tax effect of share based
        compensation                              1,171                 711
       Net cash provided by financing
        activities                                5,554               2,735
       Effect of exchange rate changes on
        cash and cash equivalents                 1,669                 142

       INCREASE IN CASH AND CASH
        EQUIVALENTS                               8,028              (1,602)
       Cash and cash equivalents at
        beginning of year                        34,662              28,652
       CASH AND CASH EQUIVALENTS AT END
        OF PERIOD                               $42,690             $27,050



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

                                         March 30, 2008   Dec 31, 2007

       ASSETS
       Current Assets:
         Cash & cash equivalents              $42,690       $34,662
         Investments                            4,036         8,861
         Trade accounts receivable, less
          allowance for doubtful accounts
          of $2,238 and $2,151,
          respectively                        137,295       125,663
         Inventories                          182,601       171,661
         Prepaid expenses and other
          current assets                        7,406         3,990
         Insurance receivable                   7,131         6,885
         Deferred income taxes                  8,979         8,220
         Assets held for sale                     312           312
           Total Current Assets               390,450       360,254

       Property, Plant and Equipment, net      84,713        82,465

       Other Assets:
         Goodwill                             181,732       169,110
         Intangibles, net                      47,097        47,373
         Non current insurance receivable       5,014         5,014
         Other assets                             907        12,253
       Total Assets                          $709,913      $676,469

       LIABILITIES AND SHAREHOLDERS'
        EQUITY
       Current Liabilities:
         Accounts payable                     $83,961       $82,038
         Accrued expenses and other
          current liabilities                  77,079        72,481
         Accrued compensation and benefits     18,068        21,498
         Asbestos liability                    10,038         9,697
         Income taxes payable                   8,930         7,900
         Notes payable and current portion
          of long-term debt                       232           201
           Total Current Liabilities          198,308       193,815

       Long-Term Debt, net of current
        portion                                24,785        21,901
       Deferred Income Taxes                   20,065        19,106
       Long term asbestos liability             7,062         7,062
       Other Non-Current Liabilities           13,314        14,201
       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 16,816,007 and 16,650,407
          issued and outstanding,
          respectively                            168           167
         Additional paid-in capital           245,967       240,000
         Retained earnings                    156,913       144,644
         Accumulated other comprehensive
          income                               43,331        35,573
           Total Shareholders' Equity         446,379       420,384
       Total Liabilities and Shareholders'
        Equity                               $709,913      $676,469



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

                                                  Three Months Ended
                                         March 30, 2008       April 1, 2007

         ORDERS
           Instrumentation &
            Thermal Fluid Controls            $111,166             $84,771

           Energy Products                     125,860             102,071

           Total orders                       $237,026            $186,842


                                         March 30, 2008       April 1, 2007

         BACKLOG
           Instrumentation &
            Thermal Fluid Controls            $159,468            $116,910

           Energy Products                     292,575             194,339

           Total backlog                      $452,043            $311,249

         Note: Backlog includes all unshipped customer orders.



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

                                                          2007
                                             1ST QTR     2ND QTR     3RD QTR

       NET REVENUES

         Instrumentation & Thermal Fluid
          Controls (TFC)                     $81,296     $85,740    $85,094
         Energy Products                      79,967      80,197     78,923
           Total                             161,263     165,937    164,017

       OPERATING MARGIN

         Instrumentation & TFC                   7.9%        8.7%       7.1%
         Energy Products                        12.7%       16.3%      17.4%
           Segment operating margin             10.3%       12.4%      12.1%
         Corporate expenses                     -2.4%       -2.4%      -3.0%
         Special charges                        -0.4%       -0.4%      -1.3%
           Total operating margin                7.4%        9.5%       7.8%

       OPERATING INCOME

         Instrumentation & TFC (excl.
          special & unusual charges)           6,433       7,438      6,076
         Energy Products (excl. special &
          unusual charges)                    10,125      13,063     13,745
           Segment operating income (excl.
            special & unusual charges)        16,558      20,501     19,821
         Corporate expenses (excl. special
          & unusual charges)                  (3,853)     (4,056)    (4,942)
         Special (charges) income, net          (691)       (615)    (2,130)

           Total operating income             12,014      15,830     12,749

       INTEREST EXPENSE, NET                  (1,218)       (884)      (744)
       OTHER (EXPENSE) INCOME, NET                97        (215)     1,508

         PRETAX INCOME                        10,893      14,731     13,513
       PROVISION FOR INCOME TAXES             (3,486)     (4,713)    (3,148)
       EFFECTIVE TAX RATE                       32.0%       32.0%      23.3%
         NET INCOME                           $7,407     $10,018    $10,365

       Weighted Average Common Shares
        Outstanding (Diluted)                 16,533      16,679     16,768

       EARNINGS PER COMMON SHARE (Diluted)     $0.45       $0.60      $0.62

       EBIT                                  $12,111     $15,615    $14,257
       Depreciation                            2,808       2,812      2,662
       Amortization of intangibles               626         632        659
         EBITDA                              $15,545     $19,059    $17,578

       EBITDA AS A PERCENT OF SALES              9.6%       11.5%      10.7%

       CAPITAL EXPENDITURES                   $1,776      $2,266     $2,844


                                                   2007               2008
                                            4TH QTR   Full Year     1ST QTR

       NET REVENUES

         Instrumentation & Thermal Fluid
          Controls (TFC)                    $91,466    $343,596     $88,450
         Energy Products                     83,057     322,144      88,125
           Total                            174,523     665,740     176,575

       OPERATING MARGIN

         Instrumentation & TFC                  8.3%        8.0%       11.3%
         Energy Products                       15.3%       15.4%       16.2%
           Segment operating margin            11.6%       11.6%       13.8%
         Corporate expenses                    -2.9%       -2.7%       -2.6%
         Special charges                        0.5%       -0.4%       -0.1%
           Total operating margin               9.3%        8.5%       11.0%

       OPERATING INCOME

         Instrumentation & TFC (excl.
          special & unusual charges)          7,589      27,536       9,994
         Energy Products (excl. special &
          unusual charges)                   12,675      49,608      14,303
           Segment operating income
            (excl. special & unusual
            charges)                         20,264      77,144      24,297
         Corporate expenses (excl.
          special & unusual charges)         (5,012)    (17,863)     (4,628)
         Special (charges) income, net          922      (2,514)       (160)

           Total operating income            16,174      56,767      19,509

       INTEREST EXPENSE, NET                   (155)     (3,001)       (145)
       OTHER (EXPENSE) INCOME, NET             (133)      1,257        (401)

         PRETAX INCOME                       15,886      55,023      18,963
       PROVISION FOR INCOME TAXES            (5,765)    (17,112)     (6,068)
       EFFECTIVE TAX RATE                      36.3%       31.1%       32.0%
         NET INCOME                         $10,121     $37,911     $12,895

       Weighted Average Common Shares
        Outstanding (Diluted)                16,925      16,730      16,872

       EARNINGS PER COMMON SHARE
        (Diluted)                             $0.60       $2.27       $0.76

       EBIT                                 $16,041     $58,024     $19,108
       Depreciation                           2,588      10,870       2,874
       Amortization of intangibles              662       2,579         656
         EBITDA                             $19,291     $71,473     $22,638

       EBITDA AS A PERCENT OF SALES            11.1%       10.7%       12.8%

       CAPITAL EXPENDITURES                  $5,097     $11,983      $2,851



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


                                                           2007
                                              1ST QTR     2ND QTR     3RD QTR

      FREE CASH FLOW [NET CASH FLOW
       FROM OPERATING ACTIVITIES LESS
       CAPITAL EXPENDITURES LESS
       DIVIDENDS PAID]                        $(5,429)     $5,439     $11,470
          ADD:  Capital expenditures            1,776       2,266       2,844
                Dividends paid                    609         614         617

       NET CASH PROVIDED BY (USED IN)
        OPERATING ACTIVITIES                  $(3,044)     $8,319     $14,931

      NET (CASH) DEBT [TOTAL DEBT LESS
       CASH & CASH EQUIVALENTS LESS
       INVESTMENTS]                           $39,366     $29,848     $11,815
          ADD:  Cash & cash equivalents        27,050      25,281      30,174
                Investments                        87          94         100

       TOTAL DEBT                             $66,503     $55,223     $42,089

      NET DEBT AS % OF NET CAPITALIZATION          10%          7%          3%

       NET CAPITALIZATION [TOTAL DEBT
        PLUS SHAREHOLDERS' EQUITY LESS
        CASH & CASH EQUIVALENTS, LESS
        INVESTMENTS]                         $408,944    $415,386    $420,951
          LESS: Total debt                    (66,503)    (55,223)    (42,089)
          ADD:  Cash & cash equivalents        27,050      25,281      30,174
                Investments                        87          94         100

       TOTAL SHAREHOLDERS' EQUITY             369,578     385,538     409,136
          ADD:  Total debt                     66,503      55,223      42,089

       TOTAL CAPITAL                         $436,081    $440,761    $451,225

      TOTAL DEBT / TOTAL CAPITAL                   15%         13%          9%

      EBIT [NET INCOME LESS INTEREST
       EXPENSE, NET LESS TAXES]               $12,111     $15,615     $14,257
          LESS: Interest expense, net          (1,218)       (884)       (744)
                Provision for income taxes     (3,486)     (4,713)     (3,148)

       NET INCOME                              $7,407     $10,018     $10,365

      EBITDA [NET INCOME LESS INTEREST
       EXPENSE, NET LESS DEPRECIATION LESS
       AMORTIZATION LESS TAXES]               $15,545     $19,059     $17,578
          LESS:
                Interest expense, net          (1,218)       (884)       (744)
                Depreciation                   (2,808)     (2,812)     (2,662)
                Amortization of intangibles      (626)       (632)       (659)
                Provision for income taxes     (3,486)     (4,713)     (3,148)

       NET INCOME                              $7,407     $10,018     $10,365


                                                     2007               2008
                                              4TH QTR   Full Year     1ST QTR

      FREE CASH FLOW [NET CASH FLOW
       FROM OPERATING ACTIVITIES
       LESS CAPITAL EXPENDITURES LESS
       DIVIDENDS PAID]                        $30,989     $42,469     $(5,366)
          ADD:  Capital expenditures            5,097      11,983       2,851
                Dividends paid                    624       2,464         626

       NET CASH PROVIDED BY (USED IN)
        OPERATING ACTIVITIES                  $36,710     $56,916     $(1,889)

      NET (CASH) DEBT [TOTAL DEBT LESS
       CASH & CASH EQUIVALENTS LESS
       INVESTMENTS]                          $(21,421)   $(21,421)   $(21,709)
          ADD:  Cash & cash equivalents        34,662      34,662      42,690
                Investments                     8,861       8,861       4,036

       TOTAL DEBT                             $22,102     $22,102     $25,017

      NET DEBT AS % OF NET CAPITALIZATION          -5%         -5%         -5%

       NET CAPITALIZATION [TOTAL DEBT
        PLUS SHAREHOLDERS' EQUITY LESS
        CASH & CASH EQUIVALENTS, LESS
        INVESTMENTS]                         $398,963    $398,963    $424,670
          LESS: Total debt                    (22,102)    (22,102)    (25,017)
          ADD:  Cash & cash equivalents        34,662      34,662      42,690
                Investments                     8,861       8,861       4,036

       TOTAL SHAREHOLDERS' EQUITY             420,384     420,384     446,379
          ADD:  Total debt                     22,102      22,102      25,017

       TOTAL CAPITAL                         $442,486    $442,486    $471,396

      TOTAL DEBT / TOTAL CAPITAL                    5%          5%          5%

      EBIT [NET INCOME LESS
       INTEREST EXPENSE, NET LESS TAXES]      $16,041     $58,024     $19,108
          LESS: Interest expense, net            (155)     (3,001)       (145)
                Provision for income taxes     (5,765)    (17,112)     (6,068)

       NET INCOME                             $10,121     $37,911     $12,895

      EBITDA [NET INCOME LESS INTEREST
       EXPENSE, NET LESS DEPRECIATION LESS
       AMORTIZATION LESS TAXES]               $19,291     $71,473     $22,638
          LESS:
                Interest expense, net            (155)     (3,001)       (145)
                Depreciation                   (2,588)    (10,870)     (2,874)
                Amortization of intangibles      (662)     (2,579)       (656)
                Provision for income taxes     (5,765)    (17,112)     (6,068)

       NET INCOME                             $10,121     $37,911     $12,895

Source: CIRCOR International, Inc.

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