Circor International (CIR) 8-K CIRCOR Posts Third Quarter Earnings of $0.21 per share

Exhibit 99.1

PRESS RELEASE

Contact:	Kenneth W. Smith
	Chief Financial Officer
	CIRCOR International, Inc.
	(781) 270-1200

CIRCOR Posts Third Quarter Earnings of $0.21 per share

· Orders increase 11% and backlog rises 22% to record $100 million

· Lower project shipments and one-time costs impact third quarter results

Burlington, MA, October 21, 2004

CIRCOR International, Inc. (NYSE: CIR), a leading provider of valves and fluid control products for the instrumentation, fluid regulation and petrochemical markets, announced today results for the third quarter ended September 26, 2004. Net income for the third quarter of 2004 was $3.3 million, or $0.21 per diluted share, compared to $4.4 million, or $0.28 per diluted share, for the 2003 third quarter. Revenues for the 2004 third quarter were $89.8 million, an increase of 4% from $86.7 million for the third quarter 2003.

For the nine months ended September 26, 2004, net income was $11.7 million or $0.73 per diluted share. Net income for the nine months ended September 28, 2003, totaled $12.6 million or $0.81 per diluted share. Revenues for the first nine months of 2004 were $275.0 million, an increase of 5% from $263.0 million for the first nine months of 2003.

During the quarter, the Company generated $4.2 million of free cash flow (defined as net cash from operating activities, less capital expenditures and dividends paid) and, for the first nine months of 2004, the Company generated $12.7 million of free cash flow. At the end of the quarter the Company remained in a positive net cash position (cash, cash equivalents, and investments less total debt).

The Company indicated that its third quarter results were in line with its expectations and revised guidance issued on September 13, 2004. The Company’s Chairman and Chief Executive Officer, Mr. David A. Bloss, Sr., commented, “While business conditions improved slightly compared to last year, higher raw material costs and other factors lowered our profitability. Price increases have been implemented in most businesses to help offset the continuing rise in stainless steel costs. In addition, this quarter we experienced adverse weather affecting our Tampa, Florida operation. Although our facility was unharmed, a number of our employees missed work to attend to their residences and freight services used for shipping and receiving were disrupted during the recent storms. We also recorded other one-time costs this quarter including a write-down of a building currently held for sale and the write-off of fixed assets related to a product line that was relocated.”

CIRCOR’s Petrochemical Product segment revenues decreased 7% to $36.8 million from $39.5 million in the third quarter of last year due to the timing of project shipments this quarter which overshadowed the benefits from the acquisition of Mallard Control in April 2004. Incoming orders for the quarter were up 19% compared to the third quarter 2003. Backlog increased 34% compared to September 28, 2003, and increased 9% since June 27, 2004. Mr. Bloss indicated that the high level of incoming orders and record level backlog this quarter indicates that international oil and gas project activity remains healthy. He further stated, “This segment’s operating margin of 7.8% for the third quarter 2004 excluding special charges remained essentially unchanged sequentially despite higher metals costs and lower third quarter international project shipment volume, both of which masked profitability improvements in our North American operations. Shipments for international projects tend to be rather erratic depending upon the contractors’ delivery schedule for the individual projects in our backlog.”

CIRCOR’s Instrumentation and Thermal Fluid Controls Products segment revenues were up 13% to $53.0 million for the third quarter compared to $47.1 million for the same period last year and up 8% on a nine-month year-to-date basis. Incoming orders for this segment were up 6% compared to the third quarter last year, and backlog at quarter-end also increased 8% versus last year. Order levels benefited from two acquisitions made in the fourth quarter of 2003, both serving analytical sampling applications. Operating margin for this segment was 10.9% during the third quarter 2004, compared to 11.9% last year.

CIRCOR’s guidance for its fourth quarter is $0.28 to $0.32 per share excluding special charges. Mr. Bloss stated, “We expect that higher project-related shipment volume, improved profitability from pricing actions and higher efficiencies will increase the Company’s performance for the fourth quarter compared to our third quarter results. However, we have lowered our previous guidance for the fourth quarter due to the continuing higher steel costs and higher compliance costs for Sarbanes-Oxley 404.”

Bloss further added some thoughts on the Company’s ongoing inventory reduction efforts. According to Bloss, “In 2003, Circor made substantial progress in its program of inventory reduction, which freed up significant amounts of working capital by reducing both active and excess inventories. This program continues throughout 2004. In conjunction with our next quarterly review of the market value of our excess inventory, we will determine whether a more aggressive market value adjustment is necessary in order to allow us to expedite the sale and disposal of our remaining slow moving inventory. This determination will be made in the fourth quarter and could result in a non-cash charge to earnings that is not included the fourth quarter guidance above.”

CIRCOR International has scheduled a conference call to review its results for the third quarter 2004 on Friday, October 22, 2004, at 9:00am ET. Interested parties may access the call by dialing (800) 406-5356 or (913) 981-5572. A replay of the call will be available from noon ET on October 22, 2004 through midnight on October 28, 2004. To access the replay, interested parties should dial (888) 203-1112 or (719) 457-0820 and enter confirmation code #981226 when prompted. The presentation slides that will be discussed in the conference call are expected to be available on Thursday, October 21, 2004, by 6:00pm ET. The presentation slides may be downloaded from the quarterly earnings page

of the investor section on the CIRCOR website:http://www.CIRCOR.com. An audio recording of the conference call also is expected to be posted on the company’s website by October 26, 2004.

CIRCOR International, Inc. is a leading provider of valves and fluid control products that allow customers around the world to use fluids safely and efficiently in the instrumentation, thermal fluid regulation and petrochemical markets. CIRCOR’s executive headquarters are located at 25 Corporate Drive, Burlington, MA 01803.

This press release contains certain statements that are “forward-looking statements” as that term is defined under the Private Securities Litigation Reform Act of 1995 (the “Act”) and releases issued by the Securities and Exchange Commission (SEC). The words “may,” “hope,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” “continue,” and other expressions which are predictions of or indicate future events and trends and which do not relate to historical matters identify forward-looking statements. We believe that it is important to communicate our future expectations to our stockholders, and we, therefore, make forward-looking statements in reliance upon the safe harbor provisions of the Act. However, there may be events in the future that we are not able to accurately predict or control, and our actual results, performance or achievements may differ materially from the expectations we describe in our forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the cyclicality and highly competitive nature of some of our end markets, changes in the price of and demand for oil and gas in both domestic and international markets, variability of raw material and component pricing, fluctuations in foreign currency exchange rates, and our ability to continue operating our manufacturing facilities at efficient levels and to successfully implement our acquisition strategy. We advise you to read further about these and other risk factors set forth under the caption “Certain Risk Factors That May Affect Future Results” in our SEC filings. 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 BALANCE SHEETS

(in thousands, except share data)

UNAUDITED

	September 26, 2004		December 31, 2003
ASSETS
Current Assets:
Cash and cash equivalents	$	60,055	$	58,202
Investments		7,953		7,840
Trade accounts receivable, less allowance for doubtful accounts of $2,436 and $2,119, respectively		60,473		64,830
Inventories		112,679		97,278
Prepaid expenses and other current assets		3,904		4,587
Deferred income taxes		6,493		6,303
Assets held for sale		952		3,884
Total Current Assets		252,509		242,924
Property, Plant and Equipment, net		58,888		61,737
Other Assets:
Goodwill		118,162		111,448
Intangibles, net		1,549		1,587
Other assets		6,085		6,167
Total Assets	$	437,193	$	423,863
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	37,487	$	37,635
Accrued expenses and other current liabilities		30,731		27,742
Income taxes payable		2,890		1,491
Notes payable and current portion of long-term debt		15,249		17,268
Total Current Liabilities		86,357		84,136
Long-term Debt, net of current portion		42,841		43,791
Deferred Income Taxes		6,625		6,303
Other Noncurrent Liabilities		10,967		9,820
Minority Interest		4,615		4,653
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 15,417,049 and 15,302,127 issued and outstanding, respectively		154		153
Additional paid-in capital		208,044		206,160
Retained earnings		64,741		54,793
Accumulated other comprehensive income		12,849		14,054
Total Shareholders’ Equity		285,788		275,160
Total Liabilities and Shareholders’ Equity	$	437,193	$	423,863

CIRCOR INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

UNAUDITED

	Three Months Ended						Nine Months Ended
	September 26, 2004			September 28, 2003			September 26, 2004			September 28, 2003
Net revenues	$	89,760		$	86,661		$	275,009		$	263,048
Cost of revenues		63,091			61,801			192,373			186,445
GROSS PROFIT		26,669			24,860			82,636			76,603
Selling, general and administrative expenses		20,591			16,788			61,673			53,545
Special charges		265			271			303			271
OPERATING INCOME		5,813			7,801			20,660			22,787
Other (income) expense:
Interest income		(181	)		(192	)		(536	)		(495	)
Interest expense		1,182	��		1,512			3,529			4,625
Other income, net		(241	)		(362	)		(291	)		(1,054	)
Total other expense		760			958			2,702			3,076
INCOME BEFORE INCOME TAXES		5,053			6,843			17,958			19,711
Provision for income taxes		1,770			2,464			6,285			7,096
NET INCOME	$	3,283		$	4,379		$	11,673		$	12,615
Earnings per common share:
Basic	$	0.21		$	0.29		$	0.76		$	0.83
Diluted	$	0.21		$	0.28		$	0.73		$	0.81
Weighted average common shares outstanding:
Basic		15,371			15,237			15,338			15,177
Diluted		15,825			15,812			15,885			15,620

CIRCOR INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

UNAUDITED

	Nine Months Ended
	September 26, 2004			September 28, 2003
OPERATING ACTIVITIES
Net income	$	11,673		$	12,615
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		7,561			7,511
Amortization		153			223
Compensation expense of stock-based plans		461			203
Loss on disposal of property, plant and equipment		191			43
Loss on write-down of property, plant and equipment		—			30
Loss on write-down of assets held for sale		238			—
Gain on sale of assets held for sale		(387	)		—
Gain on sale of marketable securities		—			(64	)
Equity in undistributed earnings of affiliates		(86	)		—
Changes in operating assets and liabilities, net of effects from business acquisitions:
Trade accounts receivable		6,172			(3,773	)
Inventories		(12,092	)		15,758
Prepaid expenses and other assets		(524	)		(192	)
Accounts payable, accrued expenses and other liabilities		4,698			7,720
Net cash provided by operating activities		18,058			40,074
INVESTING ACTIVITIES
Additions to property, plant and equipment		(3,626	)		(5,793	)
Proceeds from sale of property, plant and equipment		821			38
Proceeds from sale of assets held for sale		3,030			—
Business acquisitions, net of cash acquired		(12,198	)		—
Purchase of investments		(1,456	)		—
Proceeds from sale of investments		1,456			4,128
Other		(1	)		(17	)
Net cash used in investing activities		(11,974	)		(1,644	)
FINANCING ACTIVITIES
Proceeds from long-term borrowings		322			810
Payments of long-term debt		(3,559	)		(3,924	)
Dividends paid		(1,725	)		(1,706	)
Proceeds from the exercise of stock options		1,098			1,102
Net cash used in financing activities		(3,864	)		(3,718	)
Effect of exchange rate changes on cash and cash equivalents		(367	)		1,753
INCREASE IN CASH AND CASH EQUIVALENTS		1,853			36,465
Cash and cash equivalents at beginning of year		58,202			38,382
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	60,055		$	74,847

CIRCOR INTERNATIONAL, INC.

SUMMARY OF ORDERS AND BACKLOG

(in thousands)

UNAUDITED

	Three Months Ended				Nine Months Ended
	September 26, 2004		September 28, 2003		September 26, 2004		September 28, 2003
ORDERS
Instrumentation & Thermal Fluid Controls	$	51,688	$	48,682	$	162,941	$	148,739
Petrochemical		41,755		35,139		123,228		121,836
Total orders	$	93,443	$	83,821	$	286,169	$	270,575
	September 26, 2004		September 28, 2003
BACKLOG
Instrumentation & Thermal Fluid Controls	$	40,412	$	37,524
Petrochemical		59,732		44,718
Total backlog	$	100,144	$	82,242

Note: Backlog includes all unshipped customer orders.

CIRCOR INTERNATIONAL, INC.

SUMMARY REPORT BY SEGMENT

(in thousands, except earnings per share)

UNAUDITED

	2003																2004
	1ST QTR				2ND QTR			3RD QTR			4TH QTR			YEAR			1ST QTR			2ND QTR			3RD QTR			YTD
NET REVENUES
Instrumentation & Thermal Fluid Controls (TFC)	$	49,119			$	50,963		$	47,132		$	53,561		$	200,775		$	51,639		$	54,864		$	52,966		$	159,469
Petrochemical		38,044				38,261			39,529			42,844			158,678			39,058			39,688			36,794			115,540
Total		87,163				89,224			86,661			96,405			359,453			90,697			94,552			89,760			275,009
OPERATING MARGIN
Instrumentation & TFC		12.2	%			12.5	%		11.9	%		9.5	%		11.5	%		11.2	%		11.4	%		10.9	%		11.2	%
Petrochemical		7.6	%			8.6	%		10.9	%		12.1	%		9.9	%		10.9	%		7.7	%		7.8	%		8.8	%
Segment operating margin		10.2	%	��		10.8	%		11.5	%		10.7	%		10.8	%		11.1	%		9.8	%		9.7	%		10.2	%
Corporate expenses		-1.9	%			-2.1	%		-2.1	%		-2.1	%		-2.1	%		-2.5	%		-2.3	%		-2.9	%		-2.6	%
Special charges		0.0	%			0.0	%		-0.3	%		-1.1	%		-0.4	%		0.0	%		0.0	%		-0.3	%		-0.1	%
Total operating margin		8.2	%			8.7	%		9.0	%		7.5	%		8.3	%		8.5	%		7.5	%		6.5	%		7.5	%
OPERATING INCOME
Instrumentation & TFC (excl. special charges)		5,982				6,359			5,622			5,110			23,073			5,776			6,239			5,786			17,801
Petrochemical (excl. special charges)		2,876				3,303			4,309			5,171			15,659			4,251			3,066			2,877			10,194
Segment operating income (excl. special charges)		8,858				9,662			9,931			10,281			38,732			10,027			9,305			8,663			27,995
Corporate expenses		(1,674	)			(1,860	)		(1,859	)		(1,989	)		(7,382	)		(2,259	)		(2,188	)		(2,585	)		(7,032	)
Special charges		—				—			(271	)		(1,092	)		(1,363	)		(38	)		—			(265	)		(303	)
Total operating income		7,184				7,802			7,801			7,200			29,987			7,730			7,117			5,813			20,660
INTEREST EXPENSE, NET		(1,461	)			(1,349	)		(1,320	)		(1,021	)		(5,151	)		(1,020	)		(972	)		(1,001	)		(2,993	)
OTHER (EXPENSE) INCOME, NET		275				417			362			(217	)		837			(143	)		193			241			291
PRETAX INCOME		5,998				6,870			6,843			5,962			25,673			6,567			6,338			5,053			17,958
PROVISION FOR INCOME TAXES		(2,159	)			(2,473	)		(2,464	)		(704	)		(7,800	)		(2,299	)		(2,216	)		(1,770	)		(6,285	)
EFFECTIVE TAX RATE		36.0	%			36.0	%		36.0	%		11.8	%		30.4	%		35.0	%		35.0	%		35.0	%		35.0	%
NET INCOME	$	3,839			$	4,397		$	4,379		$	5,258		$	17,873		$	4,268		$	4,122		$	3,283		$	11,673
Weighted Average Common Shares Outstanding (Diluted)		15,533				15,634			15,812			15,919			15,675			16,001			15,908			15,825			15,885
EARNINGS PER COMMON SHARE (Diluted)	$	0.25			$	0.28		$	0.28		$	0.33		$	1.14		$	0.27		$	0.26		$	0.21		$	0.73
EARNINGS PER COMMON SHARE (Diluted) excluding special charges	$	0.25			$	0.28		$	0.29		$	0.37		$	1.20		$	0.27		$	0.26		$	0.22		$	0.75
EBIT	$	7,459			$	8,219		$	8,163		$	6,983		$	30,824		$	7,587		$	7,310		$	6,054		$	20,951
Depreciation		2,470				2,563			2,478			2,053			9,564			2,680			2,353			2,528			7,561
Amortization of intangibles		74				75			74			75			298			77			38			38			153
EBITDA	$	10,003			$	10,857		$	10,715		$	9,111		$	40,686		$	10,344		$	9,701		$	8,620		$	28,665
EBITDA AS A PERCENT OF SALES		11.5	%			12.2	%		12.4	%		9.5	%		11.3	%		11.4	%		10.3	%		9.6	%		10.4	%
CAPITAL EXPENDITURES	$	795			$	1,058		$	3,940		$	1,030		$	6,823		$	1,294		$	1,575		$	757		$	3,626

CIRCOR INTERNATIONAL, INC.

RECONCILIATION OF KEY PERFORMANCE MEASURES TO COMMONLY USED

GENERALLY ACCEPTED ACCOUNTING PRINCIPLE TERMS

(in thousands)

UNAUDITED

	2003															2004
	1ST QTR			2ND QTR			3RD QTR			4TH QTR			YEAR			1ST QTR			2ND QTR			3RD QTR			YTD
FREE CASH FLOW [NET CASH FLOW FROM OPERATING ACTIVITIES LESS CAPITAL EXPENDITURES LESS DIVIDENDS PAID]	$	14,533		$	10,603		$	7,439		$	16,968		$	49,543		$	2,254		$	6,265		$	4,188		$	12,707
ADD: Capital expenditures		795			1,058			3,940			1,030			6,823			1,294			1,575			757			3,626
Dividends paid		567			569			570			574			2,280			573			576			576			1,725
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	15,895		$	12,230		$	11,949		$	18,572		$	58,646		$	4,121		$	8,416		$	5,521		$	18,058
NET (CASH) DEBT [TOTAL DEBT LESS CASH AND CASH EQUIVALENTS LESS INVESTMENTS]	$	20,209		$	8,005		$	254		$	(4,983	)	$	(4,983	)	$	(8,706	)	$	(4,054	)	$	(9,918	)	$	(9,918	)
ADD: Cash and cash equivalents		51,419			65,017			74,847			58,202			58,202			59,963			54,527			60,055			60,055
Investments		4,072			1,464			—			7,840			7,840			7,679			7,517			7,953			7,953
TOTAL DEBT	$	75,700		$	74,486		$	75,101		$	61,059		$	61,059		$	58,936		$	57,990		$	58,090		$	58,090
NET DEBT AS % OF NET CAPITALIZATION		7.5	%		3.0	%		0.1	%		-1.8	%		-1.8	%		-3.3	%		-1.5	%		-3.6	%		-3.6	%
NET (CASH) DEBT [As defined above]	$	20,209		$	8,005		$	254		$	(4,983	)	$	(4,983	)	$	(8,706	)	$	(4,054	)	$	(9,918	)	$	(9,918	)
ADD: Cash and cash equivalents		51,419			65,017			74,847			58,202			58,202			59,963			54,527			60,055			60,055
Investments		4,072			1,464			—			7,840			7,840			7,679			7,517			7,953			7,953
TOTAL DEBT	$	75,700		$	74,486		$	75,101		$	61,059		$	61,059		$	58,936		$	57,990		$	58,090		$	58,090
NET CAPITALIZATION [TOTAL DEBT PLUS SHAREHOLDERS’ EQUITY LESS CASH AND CASH EQUIVALENTS, LESS INVESTMENTS]	$	270,090		$	266,529		$	263,505		$	270,177		$	270,177		$	267,728		$	276,260		$	275,870		$	275,870
LESS: Debt		(75,700	)		(74,486	)		(75,101	)		(61,059	)		(61,059	)		(58,936	)		(57,990	)		(58,090	)		(58,090	)
ADD: Cash and cash equivalents		51,419			65,017			74,847			58,202			58,202			59,963			54,527			60,055			60,055
Investments		4,072			1,464			—			7,840			7,840			7,679			7,517			7,953			7,953
TOTAL SHAREHOLDERS’ EQUITY		249,881			258,524			263,251			275,160			275,160			276,434			280,314			285,788			285,788
ADD: TOTAL DEBT		75,700			74,486			75,101			61,059			61,059			58,936			57,990			58,090			58,090
TOTAL CAPITAL	$	325,581		$	333,010		$	338,352		$	336,219		$	336,219		$	335,370		$	338,304		$	343,878		$	343,878
TOTAL DEBT / TOTAL CAPITAL		23.3	%		22.4	%		22.2	%		18.2	%		18.2	%		17.6	%		17.1	%		16.9	%		16.9	%
EBIT [NET INCOME LESS INTEREST EXPENSE, NET]	$	7,459		$	8,219		$	8,163		$	6,983		$	30,824		$	7,587		$	7,310		$	6,054		$	20,951
LESS: Interest expense, net		(1,461	)		(1,349	)		(1,320	)		(1,021	)		(5,151	)		(1,020	)		(972	)		(1,001	)		(2,993	)
Provision for income taxes		(2,159	)		(2,473	)		(2,464	)		(704	)		(7,800	)		(2,299	)		(2,216	)		(1,770	)		(6,285	)
NET INCOME	$	3,839		$	4,397		$	4,379		$	5,258			17,873		$	4,268		$	4,122		$	3,283		$	11,673
EBITDA [NET INCOME LESS INTEREST EXPENSE, NET LESS DEPRECIATION LESS AMORTIZATION LESS TAXES]	$	10,003		$	10,857		$	10,715		$	9,111		$	40,686		$	10,344		$	9,701		$	8,620		$	28,665
LESS:
Interest expense, net		(1,461	)		(1,349	)		(1,320	)		(1,021	)		(5,151	)		(1,020	)		(972	)		(1,001	)		(2,993	)
Depreciation		(2,470	)		(2,563	)		(2,478	)		(2,053	)		(9,564	)		(2,680	)		(2,353	)		(2,528	)		(7,561	)
Amortization of intangibles		(74	)		(75	)		(74	)		(75	)		(298	)		(77	)		(38	)		(38	)		(153	)
Provision for income taxes		(2,159	)		(2,473	)		(2,464	)		(704	)		(7,800	)		(2,299	)		(2,216	)		(1,770	)		(6,285	)
NET INCOME	$	3,839		$	4,397		$	4,379		$	5,258		$	17,873		$	4,268		$	4,122		$	3,283		$	11,673
INCOME EXCLUDING SPECIAL CHARGES [NET INCOME LESS SPECIAL CHARGES, NET OF TAX]	$	3,839		$	4,397		$	4,552		$	5,957		$	18,822		$	4,293		$	4,122		$	3,455		$	11,870
LESS: Special charges, net of tax		—			—			(173	)		(699	)		(949	)		(25	)		—			(172	)		(197	)
NET INCOME	$	3,839		$	4,397		$	4,379		$	5,258		$	17,873		$	4,268		$	4,122		$	3,283		$	11,673