10-Q 1 cir-20211003.htm 10-Q cir-20211003
000109188312/3144561Q3FALSE20,257,9958,3749,0350.010.011,000,0001,000,000————0.010.0129,000,00029,000,00021,627,25921,373,81320,254,77120,001,3250.0 million0.0 million913.53.253.0four yearsthree years3252.400010918832021-01-012021-10-03xbrli:shares00010918832021-11-08iso4217:USD00010918832021-10-0300010918832020-12-31iso4217:USDxbrli:shares00010918832021-07-052021-10-0300010918832020-06-292020-09-2700010918832020-01-012020-09-270001091883us-gaap:RetainedEarningsMember2021-01-012021-10-0300010918832019-12-3100010918832020-09-270001091883us-gaap:CommonStockMember2021-07-040001091883us-gaap:AdditionalPaidInCapitalMember2021-07-040001091883us-gaap:RetainedEarningsMember2021-07-040001091883us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-040001091883us-gaap:TreasuryStockMember2021-07-0400010918832021-07-040001091883us-gaap:RetainedEarningsMember2021-07-052021-10-030001091883us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-10-030001091883us-gaap:CommonStockMember2021-07-052021-10-030001091883us-gaap:AdditionalPaidInCapitalMember2021-07-052021-10-030001091883us-gaap:CommonStockMember2021-10-030001091883us-gaap:AdditionalPaidInCapitalMember2021-10-030001091883us-gaap:RetainedEarningsMember2021-10-030001091883us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-10-030001091883us-gaap:TreasuryStockMember2021-10-030001091883us-gaap:CommonStockMember2020-06-280001091883us-gaap:AdditionalPaidInCapitalMember2020-06-280001091883us-gaap:RetainedEarningsMember2020-06-280001091883us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-280001091883us-gaap:TreasuryStockMember2020-06-2800010918832020-06-280001091883us-gaap:RetainedEarningsMember2020-06-292020-09-270001091883us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-292020-09-270001091883us-gaap:CommonStockMember2020-06-292020-09-270001091883us-gaap:AdditionalPaidInCapitalMember2020-06-292020-09-270001091883srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-09-270001091883us-gaap:CommonStockMember2020-09-270001091883us-gaap:AdditionalPaidInCapitalMember2020-09-270001091883us-gaap:RetainedEarningsMember2020-09-270001091883us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-270001091883us-gaap:TreasuryStockMember2020-09-270001091883us-gaap:CommonStockMember2020-12-310001091883us-gaap:AdditionalPaidInCapitalMember2020-12-310001091883us-gaap:RetainedEarningsMember2020-12-310001091883us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001091883us-gaap:TreasuryStockMember2020-12-310001091883us-gaap:CommonStockMember2021-01-012021-10-030001091883us-gaap:AdditionalPaidInCapitalMember2021-01-012021-10-030001091883us-gaap:CommonStockMember2019-12-310001091883us-gaap:AdditionalPaidInCapitalMember2019-12-310001091883us-gaap:RetainedEarningsMember2019-12-310001091883us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001091883us-gaap:TreasuryStockMember2019-12-310001091883us-gaap:RetainedEarningsMember2020-01-012020-09-270001091883us-gaap:RetainedEarningsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-12-310001091883us-gaap:CommonStockMember2020-01-012020-09-27xbrli:pure0001091883cir:DVBusinessMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2021-01-012021-10-030001091883cir:DVBusinessMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2021-07-052021-10-030001091883us-gaap:DiscontinuedOperationsHeldforsaleMember2021-07-052021-10-030001091883us-gaap:DiscontinuedOperationsHeldforsaleMember2020-06-292020-09-270001091883us-gaap:DiscontinuedOperationsHeldforsaleMember2021-01-012021-10-030001091883us-gaap:DiscontinuedOperationsHeldforsaleMember2020-01-012020-09-2700010918832018-04-022021-10-0300010918832019-01-012021-10-0300010918832020-01-012021-10-030001091883cir:AerospaceDefenseMembercir:CommercialAerospaceandOtherMember2021-07-052021-10-030001091883cir:AerospaceDefenseMembercir:CommercialAerospaceandOtherMember2020-06-292020-09-270001091883cir:AerospaceDefenseMembercir:CommercialAerospaceandOtherMember2021-01-012021-10-030001091883cir:AerospaceDefenseMembercir:CommercialAerospaceandOtherMember2020-01-012020-09-270001091883cir:AerospaceDefenseMembercir:DefenseMember2021-07-052021-10-030001091883cir:AerospaceDefenseMembercir:DefenseMember2020-06-292020-09-270001091883cir:AerospaceDefenseMembercir:DefenseMember2021-01-012021-10-030001091883cir:AerospaceDefenseMembercir:DefenseMember2020-01-012020-09-270001091883cir:AerospaceDefenseMember2021-07-052021-10-030001091883cir:AerospaceDefenseMember2020-06-292020-09-270001091883cir:AerospaceDefenseMember2021-01-012021-10-030001091883cir:AerospaceDefenseMember2020-01-012020-09-270001091883cir:IndustrialMembercir:ValvesMember2021-07-052021-10-030001091883cir:IndustrialMembercir:ValvesMember2020-06-292020-09-270001091883us-gaap:EMEAMembercir:ValvesMember2021-01-012021-10-030001091883cir:IndustrialMembercir:ValvesMember2020-01-012020-09-270001091883cir:PumpsMembercir:IndustrialMember2021-07-052021-10-030001091883cir:PumpsMembercir:IndustrialMember2020-06-292020-09-270001091883cir:PumpsMembersrt:NorthAmericaMember2021-01-012021-10-030001091883cir:PumpsMembercir:IndustrialMember2020-01-012020-09-270001091883cir:IndustrialMember2021-07-052021-10-030001091883cir:IndustrialMember2020-06-292020-09-270001091883cir:IndustrialMember2021-01-012021-10-030001091883cir:IndustrialMember2020-01-012020-09-270001091883cir:AerospaceDefenseMemberus-gaap:EMEAMember2021-07-052021-10-030001091883cir:AerospaceDefenseMemberus-gaap:EMEAMember2020-06-292020-09-270001091883cir:AerospaceDefenseMemberus-gaap:EMEAMember2021-01-012021-10-030001091883cir:AerospaceDefenseMemberus-gaap:EMEAMember2020-01-012020-09-270001091883cir:AerospaceDefenseMembersrt:NorthAmericaMember2021-07-052021-10-030001091883cir:AerospaceDefenseMembersrt:NorthAmericaMember2020-06-292020-09-270001091883cir:AerospaceDefenseMembersrt:NorthAmericaMember2021-01-012021-10-030001091883cir:AerospaceDefenseMembersrt:NorthAmericaMember2020-01-012020-09-270001091883cir:AerospaceDefenseMembercir:OtherCountriesMember2021-07-052021-10-030001091883cir:AerospaceDefenseMembercir:OtherCountriesMember2020-06-292020-09-270001091883cir:AerospaceDefenseMembercir:OtherCountriesMember2021-01-012021-10-030001091883cir:AerospaceDefenseMembercir:OtherCountriesMember2020-01-012020-09-270001091883us-gaap:EMEAMembercir:IndustrialMember2021-07-052021-10-030001091883us-gaap:EMEAMembercir:IndustrialMember2020-06-292020-09-270001091883us-gaap:EMEAMembercir:IndustrialMember2021-01-012021-10-030001091883us-gaap:EMEAMembercir:IndustrialMember2020-01-012020-09-270001091883cir:IndustrialMembersrt:NorthAmericaMember2021-07-052021-10-030001091883cir:IndustrialMembersrt:NorthAmericaMember2020-06-292020-09-270001091883cir:IndustrialMembersrt:NorthAmericaMember2021-01-012021-10-030001091883cir:IndustrialMembersrt:NorthAmericaMember2020-01-012020-09-270001091883cir:OtherCountriesMembercir:IndustrialMember2021-07-052021-10-030001091883cir:OtherCountriesMembercir:IndustrialMember2020-06-292020-09-270001091883cir:OtherCountriesMembercir:IndustrialMember2021-01-012021-10-030001091883cir:OtherCountriesMembercir:IndustrialMember2020-01-012020-09-270001091883us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2021-10-030001091883us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2020-12-310001091883us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2021-01-012021-10-030001091883us-gaap:OtherNoncurrentAssetsMember2021-10-030001091883us-gaap:OtherNoncurrentAssetsMember2020-12-310001091883us-gaap:OtherNoncurrentAssetsMember2021-01-012021-10-030001091883us-gaap:AccruedLiabilitiesMember2021-10-030001091883us-gaap:AccruedLiabilitiesMember2020-12-310001091883us-gaap:AccruedLiabilitiesMember2021-01-012021-10-030001091883us-gaap:OtherNoncurrentLiabilitiesMember2021-10-030001091883us-gaap:OtherNoncurrentLiabilitiesMember2020-12-310001091883us-gaap:OtherNoncurrentLiabilitiesMember2021-01-012021-10-030001091883us-gaap:MaterialReconcilingItemsMember2021-07-052021-10-030001091883us-gaap:MaterialReconcilingItemsMember2021-01-012021-10-030001091883cir:AerospaceandDefenseSegmentMember2021-07-052021-10-030001091883cir:IndustrialSegmentMember2021-07-052021-10-030001091883us-gaap:CorporateMember2021-07-052021-10-030001091883us-gaap:OtherExpenseMembercir:AerospaceandDefenseSegmentMember2021-07-052021-10-030001091883us-gaap:OtherExpenseMembercir:IndustrialSegmentMember2021-07-052021-10-030001091883us-gaap:CorporateMemberus-gaap:OtherExpenseMember2021-07-052021-10-030001091883us-gaap:OtherExpenseMember2021-07-052021-10-030001091883cir:BusinessSalesMembercir:AerospaceandDefenseSegmentMember2021-01-012021-10-030001091883cir:BusinessSalesMembercir:IndustrialSegmentMember2021-01-012021-10-030001091883cir:BusinessSalesMemberus-gaap:CorporateMember2021-01-012021-10-030001091883cir:BusinessSalesMember2021-01-012021-10-030001091883cir:AerospaceandDefenseSegmentMember2021-01-012021-10-030001091883cir:IndustrialSegmentMember2021-01-012021-10-030001091883us-gaap:CorporateMember2021-01-012021-10-030001091883us-gaap:OtherExpenseMembercir:AerospaceandDefenseSegmentMember2021-01-012021-10-030001091883us-gaap:OtherExpenseMembercir:IndustrialSegmentMember2021-01-012021-10-030001091883us-gaap:CorporateMemberus-gaap:OtherExpenseMember2021-01-012021-10-030001091883us-gaap:OtherExpenseMember2021-01-012021-10-030001091883cir:HeaterAndControlValveDivestitureMember2021-07-052021-10-030001091883cir:HeaterAndControlValveDivestitureMember2021-01-012021-10-030001091883cir:CryoDivestitureMember2021-01-012021-10-030001091883us-gaap:SalesMember2021-07-052021-10-030001091883us-gaap:SalesMember2021-01-012021-10-030001091883cir:SalesContingencyIndemnificationPreviouslyDivestedBusinessMembercir:IndustrialMember2021-07-052021-10-030001091883us-gaap:CorporateMembercir:SalesStreamliningOperationsAndReducingCostsMember2021-07-052021-10-030001091883cir:AerospaceandDefenseSegmentMember2020-06-292020-09-270001091883cir:BusinessSalesMembercir:IndustrialSegmentMember2020-06-292020-09-270001091883cir:BusinessSalesMemberus-gaap:CorporateMember2020-06-292020-09-270001091883cir:BusinessSalesMember2020-06-292020-09-270001091883us-gaap:OtherExpenseMembercir:AerospaceandDefenseSegmentMember2020-06-292020-09-270001091883us-gaap:SalesMembercir:IndustrialSegmentMember2020-06-292020-09-270001091883us-gaap:SalesMemberus-gaap:CorporateMember2020-06-292020-09-270001091883us-gaap:SalesMember2020-06-292020-09-270001091883cir:IndustrialSegmentMember2020-06-292020-09-270001091883us-gaap:CorporateMember2020-06-292020-09-270001091883cir:BusinessSalesMembercir:AerospaceandDefenseSegmentMember2020-01-012020-09-270001091883cir:BusinessSalesMembercir:IndustrialSegmentMember2020-01-012020-09-270001091883cir:BusinessSalesMemberus-gaap:CorporateMember2020-01-012020-09-270001091883cir:BusinessSalesMember2020-01-012020-09-270001091883cir:AerospaceandDefenseSegmentMember2020-01-012020-09-270001091883cir:IndustrialSegmentMember2020-01-012020-09-270001091883us-gaap:CorporateMember2020-01-012020-09-270001091883us-gaap:OtherExpenseMembercir:AerospaceandDefenseSegmentMember2020-01-012020-09-270001091883cir:ReliabilityServicesDivestitureMembercir:IndustrialSegmentMember2020-01-012020-09-270001091883us-gaap:CorporateMembercir:ReliabilityServicesDivestitureMember2020-01-012020-09-270001091883cir:ReliabilityServicesDivestitureMember2020-01-012020-09-270001091883us-gaap:SalesMembercir:IndustrialSegmentMember2020-01-012020-09-270001091883us-gaap:SalesMemberus-gaap:CorporateMember2020-01-012020-09-270001091883us-gaap:SalesMember2020-01-012020-09-270001091883cir:BusinessSalesMembercir:ISDivestitureMember2020-06-292020-09-270001091883cir:BusinessSalesMembercir:ISDivestitureMember2020-01-012020-09-270001091883cir:ISDivestitureMember2020-03-302020-06-280001091883cir:IndustrialMembercir:ISDivestitureMemberus-gaap:OperatingExpenseMembercir:DivestitureMember2020-03-302020-06-280001091883cir:DistributedValvesandEngineeredValvesBusinessMember2020-06-292020-09-270001091883cir:DistributedValvesandEngineeredValvesBusinessMember2020-01-012020-09-270001091883us-gaap:FacilityClosingMembercir:AdvancedFlowSolutionsMember2021-07-052021-10-030001091883us-gaap:FacilityClosingMembercir:IndustrialMember2021-07-052021-10-030001091883us-gaap:FacilityClosingMemberus-gaap:CorporateMember2021-07-052021-10-030001091883us-gaap:FacilityClosingMember2021-07-052021-10-030001091883us-gaap:EmployeeSeveranceMembercir:AdvancedFlowSolutionsMember2021-07-052021-10-030001091883cir:IndustrialMemberus-gaap:EmployeeSeveranceMember2021-07-052021-10-030001091883us-gaap:CorporateMemberus-gaap:EmployeeSeveranceMember2021-07-052021-10-030001091883us-gaap:EmployeeSeveranceMember2021-07-052021-10-030001091883cir:AdvancedFlowSolutionsMember2021-07-052021-10-030001091883us-gaap:FacilityClosingMembercir:AdvancedFlowSolutionsMember2021-01-012021-10-030001091883us-gaap:FacilityClosingMembercir:IndustrialMember2021-01-012021-10-030001091883us-gaap:FacilityClosingMemberus-gaap:CorporateMember2021-01-012021-10-030001091883us-gaap:FacilityClosingMember2021-01-012021-10-030001091883us-gaap:EmployeeSeveranceMembercir:AdvancedFlowSolutionsMember2021-01-012021-10-030001091883cir:IndustrialMemberus-gaap:EmployeeSeveranceMember2021-01-012021-10-030001091883us-gaap:CorporateMemberus-gaap:EmployeeSeveranceMember2021-01-012021-10-030001091883us-gaap:EmployeeSeveranceMember2021-01-012021-10-030001091883cir:AdvancedFlowSolutionsMember2021-01-012021-10-030001091883us-gaap:FacilityClosingMembercir:AdvancedFlowSolutionsMember2020-06-292020-09-270001091883us-gaap:FacilityClosingMembercir:IndustrialMember2020-06-292020-09-270001091883us-gaap:FacilityClosingMemberus-gaap:CorporateMember2020-06-292020-09-270001091883us-gaap:FacilityClosingMember2020-06-292020-09-270001091883us-gaap:EmployeeSeveranceMembercir:AdvancedFlowSolutionsMember2020-06-292020-09-270001091883cir:IndustrialMemberus-gaap:EmployeeSeveranceMember2020-06-292020-09-270001091883us-gaap:CorporateMemberus-gaap:EmployeeSeveranceMember2020-06-292020-09-270001091883us-gaap:EmployeeSeveranceMember2020-06-292020-09-270001091883cir:AdvancedFlowSolutionsMember2020-06-292020-09-270001091883us-gaap:FacilityClosingMembercir:AdvancedFlowSolutionsMember2020-01-012020-09-270001091883us-gaap:FacilityClosingMembercir:IndustrialMember2020-01-012020-09-270001091883us-gaap:FacilityClosingMemberus-gaap:CorporateMember2020-01-012020-09-270001091883us-gaap:FacilityClosingMember2020-01-012020-09-270001091883us-gaap:EmployeeSeveranceMembercir:AdvancedFlowSolutionsMember2020-01-012020-09-270001091883cir:IndustrialMemberus-gaap:EmployeeSeveranceMember2020-01-012020-09-270001091883us-gaap:CorporateMemberus-gaap:EmployeeSeveranceMember2020-01-012020-09-270001091883us-gaap:EmployeeSeveranceMember2020-01-012020-09-270001091883cir:AdvancedFlowSolutionsMember2020-01-012020-09-270001091883us-gaap:EmployeeSeveranceMembercir:IndustrialSegmentMember2021-10-030001091883cir:IndustrialSegmentMemberus-gaap:InventoriesMember2021-10-030001091883us-gaap:EmployeeSeveranceMembercir:IndustrialSegmentMember2020-06-292020-09-270001091883us-gaap:EmployeeSeveranceMembercir:IndustrialSegmentMember2020-01-012020-09-270001091883cir:AerospaceMember2020-12-310001091883cir:IndustrialMember2020-12-310001091883cir:AerospaceMember2021-01-012021-10-030001091883cir:AerospaceMember2021-10-030001091883cir:IndustrialMember2021-10-030001091883us-gaap:PatentsMember2021-10-030001091883us-gaap:CustomerRelationshipsMember2021-10-030001091883cir:AcquiredTechnologyMember2021-10-030001091883us-gaap:TrademarksAndTradeNamesMember2021-10-030001091883cir:AerospaceMember2021-07-052021-10-030001091883cir:AerospaceMember2020-06-292020-09-270001091883cir:AerospaceMember2020-01-012020-09-270001091883us-gaap:MaterialReconcilingItemsMember2020-06-292020-09-270001091883us-gaap:MaterialReconcilingItemsMember2020-01-012020-09-270001091883us-gaap:OperatingSegmentsMember2021-07-052021-10-030001091883us-gaap:OperatingSegmentsMember2020-06-292020-09-270001091883us-gaap:OperatingSegmentsMember2021-01-012021-10-030001091883us-gaap:OperatingSegmentsMember2020-01-012020-09-270001091883us-gaap:CorporateMember2021-10-030001091883us-gaap:CorporateMember2020-12-310001091883us-gaap:FairValueInputsLevel2Member2021-10-030001091883us-gaap:FairValueInputsLevel2Member2020-12-310001091883srt:MinimumMember2021-01-012021-10-030001091883srt:MaximumMember2021-01-012021-10-030001091883us-gaap:CrossCurrencyInterestRateContractMember2019-07-120001091883us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-10-030001091883us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-12-310001091883us-gaap:InterestRateSwapMembercir:CitizenBankNationalAssociationMember2021-10-030001091883us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMember2021-10-030001091883us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMember2020-12-31iso4217:EUR0001091883us-gaap:ForwardContractsMember2021-10-030001091883cir:AccruedLiabilitiesAndOtherCurrentLiabilitiesMember2021-10-030001091883cir:AccruedLiabilitiesAndOtherCurrentLiabilitiesMember2020-12-310001091883us-gaap:CashFlowHedgingMember2021-07-052021-10-030001091883us-gaap:CashFlowHedgingMember2021-01-012021-10-030001091883us-gaap:InterestRateSwapMember2021-07-052021-10-030001091883us-gaap:InterestRateSwapMember2021-01-012021-10-030001091883us-gaap:InterestRateSwapMember2021-10-030001091883cir:TermLoanMember2021-10-030001091883cir:TermLoanMember2020-12-310001091883cir:TermLoanMember2021-01-012021-10-030001091883cir:TermLoanMember2020-01-012020-09-2700010918832020-03-200001091883us-gaap:RevolvingCreditFacilityMember2021-01-012021-10-030001091883us-gaap:RevolvingCreditFacilityMember2021-10-030001091883cir:NewCreditAgreementMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-01-012021-04-040001091883cir:NewCreditAgreementMember2021-01-012021-04-040001091883cir:TermLoanMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-01-012021-04-040001091883us-gaap:InterestRateSwapMember2018-04-122018-04-120001091883us-gaap:CrossCurrencyInterestRateContractMember2018-04-122018-04-120001091883cir:IndustrialSegmentCustomerMember2021-10-030001091883us-gaap:StandbyLettersOfCreditMember2021-10-030001091883us-gaap:StandbyLettersOfCreditMember2020-12-310001091883cir:WageandHourActionCaliforniaMemberus-gaap:SettledLitigationMember2021-10-030001091883us-gaap:PensionPlansDefinedBenefitMembercountry:US2021-07-052021-10-030001091883us-gaap:PensionPlansDefinedBenefitMembercountry:US2020-06-292020-09-270001091883us-gaap:PensionPlansDefinedBenefitMembercountry:US2021-01-012021-10-030001091883us-gaap:PensionPlansDefinedBenefitMembercountry:US2020-01-012020-09-270001091883us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-01-012021-10-030001091883us-gaap:PensionPlansDefinedBenefitMemberus-gaap:ForeignPlanMember2021-07-052021-10-030001091883us-gaap:PensionPlansDefinedBenefitMemberus-gaap:ForeignPlanMember2020-06-292020-09-270001091883us-gaap:PensionPlansDefinedBenefitMemberus-gaap:ForeignPlanMember2021-01-012021-10-030001091883us-gaap:PensionPlansDefinedBenefitMemberus-gaap:ForeignPlanMember2020-01-012020-09-270001091883us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2021-07-052021-10-030001091883us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2020-06-292020-09-270001091883us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2021-01-012021-10-030001091883us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2020-01-012020-09-270001091883us-gaap:EmployeeStockOptionMember2021-10-0300010918832021-05-252021-05-2500010918832019-05-090001091883us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-10-030001091883us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-09-270001091883us-gaap:PerformanceSharesMember2021-01-012021-10-030001091883us-gaap:PerformanceSharesMember2020-01-012020-09-270001091883us-gaap:RestrictedStockUnitsRSUMembersrt:MinimumMember2021-01-012021-10-030001091883us-gaap:RestrictedStockUnitsRSUMembersrt:MaximumMember2021-01-012021-10-030001091883us-gaap:RestrictedStockUnitsRSUMember2021-10-030001091883cir:RestrictedStockUnitsManagementStockPurchasePlanMember2021-01-012021-10-030001091883us-gaap:SellingGeneralAndAdministrativeExpensesMemberus-gaap:PhantomShareUnitsPSUsMember2021-01-012021-10-030001091883cir:RestructuringandRelatedCostIncurredCostMemberus-gaap:PhantomShareUnitsPSUsMember2021-01-012021-10-030001091883us-gaap:SegmentDiscontinuedOperationsMemberus-gaap:PhantomShareUnitsPSUsMember2021-01-012021-10-030001091883cir:RestrictedStockUnitsManagementStockPurchasePlanMember2020-01-012020-09-270001091883cir:RestrictedStockUnitsManagementStockPurchasePlanMember2021-10-030001091883us-gaap:SellingGeneralAndAdministrativeExpensesMembercir:CashSettledStockUnitAwardsMember2021-01-012021-10-030001091883us-gaap:SellingGeneralAndAdministrativeExpensesMembercir:CashSettledStockUnitAwardsMember2020-01-012020-09-270001091883us-gaap:AccumulatedTranslationAdjustmentMember2020-12-310001091883us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-12-310001091883us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2020-12-310001091883us-gaap:AccumulatedTranslationAdjustmentMember2021-01-012021-10-030001091883us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2021-01-012021-10-030001091883us-gaap:AccumulatedTranslationAdjustmentMember2021-10-030001091883us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-10-030001091883us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2021-10-030001091883us-gaap:AccumulatedTranslationAdjustmentMember2019-12-310001091883us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-12-310001091883us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2019-12-310001091883us-gaap:AccumulatedTranslationAdjustmentMember2020-01-012020-09-270001091883us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-01-012020-09-270001091883us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2020-01-012020-09-270001091883us-gaap:AccumulatedTranslationAdjustmentMember2020-09-270001091883us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-09-270001091883us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2020-09-270001091883us-gaap:EmployeeStockOptionMember2021-07-052021-10-030001091883us-gaap:EmployeeStockOptionMember2020-06-292020-09-27

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 3, 2021
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number 001-14962
cir-20211003_g1.jpg
CIRCOR INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter) 
Delaware04-3477276
(State or Other Jurisdiction of
Incorporation or Organization)		(I.R.S. Employer
Identification No.)
30 Corporate Drive, Suite 200
Burlington,MA01803-4238
(Address of principal executive offices)(Zip Code)
(781) 270-1200
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12 (b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareCIRNew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☐Accelerated filer☒Emerging growth company☐
Non-accelerated filer☐Smaller reporting company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    Yes  ☐    No  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of November 8, 2021, there were 20,257,995 shares of the registrant’s Common Stock, par value $0.01 per share, outstanding.


CIRCOR INTERNATIONAL, INC.
TABLE OF CONTENTS
 Page
Condensed Consolidated Balance Sheets as of October 3, 2021 and December 31, 2020
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended October 3, 2021 and September 27, 2020
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended October 3, 2021 and September 27, 2020
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended October 3, 2021 and September 27, 2020
Condensed Consolidated Statements of Shareholders' Equity for the Three and Nine Months Ended October 3, 2021 and September 27, 2020
2
PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
CIRCOR INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(UNAUDITED)
October 3, 2021December 31, 2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$71,969 $76,452 
Trade accounts receivable, less allowance for doubtful accounts of $8,374 and $9,035 at October 3, 2021 and December 31, 2020, respectively
93,222 102,730 
Inventories132,242 129,084 
Prepaid expenses and other current assets118,783 93,226 
Assets held for sale— 5,073 
Total Current Assets416,216 406,565 
PROPERTY, PLANT AND EQUIPMENT, NET158,327 168,763 
OTHER ASSETS:
Goodwill155,739 158,944 
Intangibles, net315,452 353,595 
Deferred income taxes761 779 
Other assets43,780 41,882 
TOTAL ASSETS$1,090,275 $1,130,528 
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable$72,883 $61,236 
Accrued expenses and other current liabilities74,357 75,624 
Accrued compensation and benefits32,454 28,332 
Total Current Liabilities179,694 165,192 
LONG-TERM DEBT507,093 507,888 
DEFERRED INCOME TAXES26,767 28,980 
PENSION LIABILITY, NET152,322 163,642 
OTHER NON-CURRENT LIABILITIES39,855 58,785 
SHAREHOLDERS’ EQUITY:
Preferred stock, $0.01 par value; 1,000,000 shares authorized; no shares issued and outstanding— — 
Common stock, $0.01 par value; 29,000,000 shares authorized; 21,627,259 and 21,373,813 issued at October 3, 2021 and December 31, 2020 respectively217 214 
Additional paid-in capital453,761 452,728 
(Accumulated deficit) retained earnings(107,996)(86,461)
Common treasury stock, at cost (1,372,488 shares at October 3, 2021 and December 31, 2020)
(74,472)(74,472)
Accumulated other comprehensive loss, net of tax(86,966)(85,968)
Total Shareholders’ Equity184,544 206,041 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$1,090,275 $1,130,528 
    

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.





3


CIRCOR INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(UNAUDITED)
 Three Months EndedNine Months Ended
October 3, 2021September 27, 2020October 3, 2021September 27, 2020
Net revenues$190,782 $186,640 $561,783 $564,920 
Cost of revenues130,027 130,630 385,061 389,905 
Gross profit 60,755 56,010 176,722 175,015 
Selling, general and administrative expenses53,265 50,652 167,792 164,948 
Impairment charges— — — 116,182 
Special and restructuring charges (recoveries), net814 938 6,808 (35,747)
Operating income (loss)6,676 4,420 2,122 (70,368)
Other expense (income):
Interest expense, net7,997 8,202 24,325 25,699 
Other expense (income), net134 765 (2,543)229 
Total other expense, net 8,131 8,967 21,782 25,928 
Income (loss) from continuing operations before income taxes (1,455)(4,547)(19,660)(96,296)
(Benefit from) provision for income taxes (92)54,318 3,268 40,923 
Income (loss) from continuing operations, net of tax(1,363)(58,865)(22,928)(137,219)
Income (loss) from discontinued operations, net of tax2,510 341 1,393 (34,345)
Net income (loss)$1,147 $(58,524)$(21,535)$(171,564)
Basic income (loss) per common share:
Basic from continuing operations$(0.07)$(2.94)$(1.14)$(6.87)
Basic from discontinued operations$0.12 $0.02 $0.07 $(1.72)
Net income (loss)$0.06 $(2.93)$(1.07)$(8.59)
Diluted income (loss) per common share:
Diluted from continuing operations$(0.07)$(2.94)$(1.14)$(6.87)
Diluted from discontinued operations$0.12 $0.02 $0.07 $(1.72)
Net income (loss)$0.06 $(2.93)$(1.07)$(8.59)
Weighted average number of common shares outstanding:
Basic20,257 20,001 20,181 19,975 
Diluted20,257 20,001 20,181 19,975 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
CIRCOR INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
(UNAUDITED)

 Three Months EndedNine Months Ended
 October 3, 2021September 27, 2020October 3, 2021September 27, 2020
Net income (loss)$1,147 $(58,524)$(21,535)$(171,564)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments(2,587)2,817 (5,951)(3,418)
Interest rate swap adjustments (1) 1,644 1,373 4,792 (192)
Pension adjustment 50 44 161 126 
Other comprehensive income (loss), net of tax(893)4,234 (998)(3,484)
COMPREHENSIVE INCOME (LOSS)$254 $(54,290)$(22,533)$(175,048)
(1) Net of an income tax effect of $0.0 million and $0.0 million for the three months ended October 3, 2021 and September 27, 2020, respectively, and $0.0 million and $(0.5) million for the nine months ended October 3, 2021 and September 27, 2020, respectively.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
CIRCOR INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(UNAUDITED)
 Nine Months Ended
OPERATING ACTIVITIESOctober 3, 2021September 27, 2020
Net loss$(21,535)$(171,564)
Income (loss) from discontinued operations, net of income taxes1,393 (34,345)
Loss from continuing operations (22,928)(137,219)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation17,505 14,881 
Amortization31,929 32,418 
Change in provision for bad debt expense(353)7,219 
Write down of inventory 1,201 2,386 
Compensation expense for share-based plans4,165 4,076 
Amortization of debt issuance costs3,032 6,463 
Deferred tax provision823 35,582 
Goodwill Impairment— 116,182 
Loss (gain) on sale of businesses1,308 (54,253)
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:
Trade accounts receivable8,937 18,051 
Inventories(12,095)(8,477)
Prepaid expenses and other assets(32,680)(39,184)
Accounts payable, accrued expenses and other liabilities6,310 (30,468)
Net cash provided by (used in) continuing operating activities7,154 (32,343)
Net cash used in discontinued operating activities(2,484)(14,022)
Net cash provided by (used in) operating activities4,670 (46,365)
INVESTING ACTIVITIES
Additions to property, plant and equipment(10,579)(9,147)
Proceeds from the sale of property, plant and equipment2 (122)
Proceeds from the sale of business9,993 166,210 
Proceeds from beneficial interest of factored receivables1,531 2,212 
Net cash provided by continuing investing activities 947 159,153 
Net cash provided by (used in) discontinued investing activities— (11,338)
Net cash provided by investing activities947 147,815 
FINANCING ACTIVITIES
Proceeds from long-term debt145,550 165,800 
Payments of long-term debt(148,450)(279,191)
Proceeds from the exercise of stock options151 117 
Withholding tax payments on net share settlements of equity awards(4,154)— 
Net cash used in financing activities(6,903)(113,274)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(3,163)29 
(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH(4,449)(11,795)
Cash, cash equivalents, and restricted cash at beginning of period77,696 85,727 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD$73,247 $73,932 
Non-cash investing activities:
Purchases of property and equipment included in accounts payable and accrued expenses$1,519 $596 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6
CIRCOR INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE THREE AND NINE MONTHS ENDED OCTOBER 3, 2021 AND SEPTEMBER 27, 2020
(in thousands)
(UNAUDITED)

 Common StockAdditional
Paid-in
Capital		Retained Earnings (Accumulated
deficit)		Accumulated
Other
Comprehensive
Income (Loss)		Treasury StockTotal
Shareholders’
Equity
SharesAmount
Balance as of July 4, 202120,248 $216 $452,512 $(109,143)$(86,073)$(74,472)$183,040 
Net income— — — 1,147 — — 1,147 
Other comprehensive (loss), net of tax— — — — (893)— (893)
Conversion of restricted stock units and tax withholding on net share settlements7 1 (13)— — — (12)
Stock options exercised— — — — — — — 
Share-based plan compensation — — 1,262 — — — 1,262 
Balance as of October 3, 202120,255 $217 $453,761 $(107,996)$(86,966)$(74,472)$184,544 
Balance as of June 28, 202019,994 214 449,576 (13,982)(87,985)(74,472)273,351 
Net loss— — — (58,524)— — (58,524)
Other comprehensive income, net of tax— — — — 4,234 4,234 
Conversion of restricted stock units and tax withholding on net share settlements4 — (11)— — — (11)
Stock options exercised— — — — — — — 
Share-based plan compensation— — 1,786 — — — 1,786 
Other— — — (22)— — (22)
Balance as of September 27, 202019,998 $214 $451,351 $(72,528)$(83,751)$(74,472)$220,814 



























7
CIRCOR INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE THREE AND NINE MONTHS ENDED OCTOBER 3, 2021 AND SEPTEMBER 27, 2020
(in thousands)
(UNAUDITED)
Common StockAdditional
Paid-in
Capital		Retained Earnings (Accumulated
deficit)		Accumulated
Other
Comprehensive
Loss		Treasury StockTotal
Shareholders’
Equity
SharesAmount
Balance as of December 31, 202020,001 $214 $452,728 $(86,461)$(85,968)$(74,472)$206,041 
Net loss— — — (21,535)— — (21,535)
Other comprehensive loss, net of tax— — — — (998)— (998)
Conversion of restricted stock units230 3 (3,283)— — (3,280)
Stock options exercised24 — 151 — — — 151 
Share-based plan compensation — — 4,165 — — — 4,165 
Balance as of October 3, 202120,255 $217 $453,761 $(107,996)$(86,966)$(74,472)$184,544 
Balance as of December 31, 201919,912 213 446,657 99,280 (80,267)(74,472)391,411 
Net loss— — — (171,564)— — (171,564)
Cumulative effect adjustment related to adoption of current expected credit loss standard (ASC 326)— — — (222)— — (222)
Other comprehensive loss, net of tax— — — — (3,484)— (3,484)
Conversion of restricted stock units83 1 275 — — — 276 
Stock options exercised3 — 117 — — — 117 
Share-based plan compensation— — 4,302 — — — 4,302 
Other— — — (22)$— $— (22)
Balance as of September 27, 202019,998 $214 $451,351 $(72,528)$(83,751)$(74,472)$220,814 
8
CIRCOR INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

(1) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of CIRCOR International, Inc. (“CIRCOR” or the “Company”) have been prepared according to the rules and regulations of the United States (“U.S.”) Securities and Exchange Commission (“SEC”) for interim reporting, along with accounting principles generally accepted in the U.S. (“GAAP”). In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal and recurring items) necessary for a fair presentation of the Company’s results of operations, financial position and cash flows for the periods presented. The Company prepares its interim financial information using the same accounting principles it uses for its annual audited consolidated financial statements. Certain information and note disclosures normally included in the annual audited consolidated financial statements have been condensed or omitted in accordance with SEC rules. The Company believes that the disclosures made in its condensed consolidated financial statements and the accompanying notes are adequate to make the information presented not misleading.
The condensed consolidated balance sheet as of December 31, 2020 was derived from CIRCOR’s audited consolidated financial statements as of that date but does not include all of the information and notes required for annual financial statements. The Company recommends that the financial statements included in its Quarterly Report on Form 10-Q be read in conjunction with the consolidated financial statements and notes included in its Annual Report on Form 10-K for the year ended December 31, 2020.

CIRCOR operates and reports financial information using a fiscal year ending December 31. The data periods contained within its Quarterly Reports on Form 10-Q reflect the results of operations for the 13-week, 26-week and 39-week periods which generally end on the Sunday nearest to the calendar quarter-end date. Operating results for the three and nine months ended October 3, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 or any future period.

Unless otherwise indicated, all financial information and statistical data included in these notes to the Company's condensed consolidated financial statements relate to its continuing operations, with dollar amounts expressed in thousands (except share and per-share data).

COVID-19

In March 2020, the World Health Organization declared the outbreak of COVID-19, which continues to spread throughout the U.S. and the world, as a pandemic. The pandemic is having an impact on the global economy, resulting in rapidly changing market and economic conditions. As of March 29, 2020, the Company experienced a significant decline in its market capitalization below its consolidated book value. As a result, management concluded that there was a goodwill and an intangible asset impairment triggering event for the Company in the first quarter of 2020. Through its impairment analysis, the Company determined that goodwill in its Industrial segment was impaired and recognized a $116.2 million impairment charge. See Note 7, Goodwill and Intangibles, net, for additional information on the goodwill impairment.
The effects of the COVID-19 pandemic continue to negatively impact the Company’s results of operations, cash flows and financial position. The Company’s condensed consolidated financial statements presented herein reflect management's estimates and assumptions regarding the effects of COVID-19 as of the date of the condensed consolidated financial statements.


(2) Summary of Significant Accounting Policies

The significant accounting policies used in preparation of these condensed consolidated financial statements for the three and nine months ended October 3, 2021 are consistent with those discussed in Note 2 to the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, except as updated below with respect to newly adopted accounting standards.

The preparation of these financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying disclosures. Some of the more significant estimates, which are impacted by management's estimates and assumptions regarding the effects of COVID-19, relate to recoverability of goodwill and indefinite-lived trade names, estimated total costs for ongoing long-term
9
revenue contracts where transfer of control occurs over time, inventory valuation, share-based compensation, amortization and impairment of long-lived assets, income taxes (including valuation allowance), fair value of disposal group, pension benefit obligations, acquisition accounting, penalty accruals for late shipments, asset valuations, and product warranties. While management believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ materially from those estimates.

New Accounting Standards - Adopted

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In January 2021, the FASB issued ASU 2021-01 which clarified the scope of Topic 848. Topic 848 contains optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships, and other areas or transactions that are impacted by reference rate reform (i.e., by the transition of LIBOR and other interbank offered rates to alternative reference interest rates). The new standard was effective upon issuance and generally can be applied to contract modifications through December 31, 2022. The Company adopted this standard as of January 1, 2021, and intends to apply the provisions of this standard to contract modifications if and when applicable. During the interim period ended October 3, 2021, the adoption of the standard did not have a material impact on the Company’s condensed consolidated financial statements.


(3) Discontinued Operations

Discontinued Operations

During 2020, the Company’s wholly-owned subsidiary, CIRCOR Energy Products LLC (“CEP”), completed the disposition of its Distributed Valves (“DV”) business. The transaction is subject to an earn out of 50% of net profit (only if positive) from closing through December 31, 2022. As part of the transaction, CEP retained certain liabilities and responsibility for closing CEP's Mexico manufacturing facility. During the three and nine months ended October 3, 2021, the Company continued to settle certain retained liabilities. During the three months ended October 3, 2021, the Company recognized a gain of $2.7 million related to an extinguished liability for the lease settlement of the Mexico manufacturing facility.

The following table presents the summarized components of income (loss) from discontinued operations of the DV business for the three and nine months ended October 3, 2021 and September 27, 2020 (in thousands):
Three Months EndedNine Months Ended
October 3, 2021September 27, 2020October 3, 2021September 27, 2020
Net revenues$— $— $— $10,055 
Cost of revenues— — — 26,399 
Gross profit (loss)— — — (16,344)
Selling, general and administrative expenses— — (84)9,074 
Special and restructuring charges (recoveries), net(31)(938)17 18,189 
Operating income (loss)31 938 67 (43,607)
Other (income) expense:
Interest (income), net— — — (14)
Other (income) expense, net(2,479)763 (1,581)981 
Total other (income) expense, net(2,479)763 (1,581)967 
Income (loss) from discontinued operations, before income taxes2,510 175 1,648 (44,574)
Provision for (benefit from) income tax — (166)255 (10,229)
Income (loss) from discontinued operations, net of tax $2,510 $341 $1,393 $(34,345)






10
(4) Revenue Recognition

The Company's revenue is derived from a variety of contracts. A significant portion of revenues are from contracts associated with the design, development, manufacture or modification of highly engineered, complex and severe environment products with customers who are either in or service the aerospace, defense and industrial markets. Contracts within the defense markets are primarily with U.S. military customers. These contracts typically are subject to the Federal Acquisition Regulations (“FAR”). The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Contracts may be modified to account for changes in contract specifications and requirements.

For revenue that is recognized from products and services transferred to customers over-time, the Company uses an input measure (e.g., costs incurred to date relative to total estimated costs at completion, known as the “cost-to-cost” method) to measure progress. The Company uses the cost-to-cost measure of progress because it best depicts the transfer of control to the customer which occurs as it incurs costs on its contracts. Under the cost-to-cost measure of progress, revenue is recognized proportionally as costs are incurred. Contract costs include labor, materials and subcontractors’ costs, other direct costs and an allocation of overhead, as appropriate.

As of October 3, 2021, the Company had $199.0 million of transaction price related to remaining performance obligations. The Company expects to recognize approximately 25% of its remaining performance obligations as revenue during the remainder of 2021, 59% in 2022, and the remaining 16% in 2023 and thereafter.

In order to determine revenue recognized during the period from contract liabilities at the beginning of the period, the Company first allocates revenue to the individual contract liabilities balances outstanding at the beginning of the period until the revenue exceeds that balance. If additional advances are received on those contracts in subsequent periods, it assumes all revenue recognized in the reporting period first applies to the beginning contract liabilities as opposed to a portion applying to the new advances for the period. Revenue recognized during the nine months ended October 3, 2021 that was included in contract liabilities as of the beginning of the period amounted to $22.5 million.

Disaggregation of Revenue. The Company determined that disaggregating revenue into these categories meets the disclosure objective in Topic 606 which is to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The following tables present revenue disaggregated by major product line and geographical market (in thousands):
Three Months EndedNine Months Ended
October 3, 2021September 27, 2020October 3, 2021September 27, 2020
Aerospace & Defense Segment
Commercial Aerospace & Other$21,096 $19,142 $67,197 $70,657 
Defense40,388 43,107 115,050 119,326 
Total61,484 62,249 182,247 189,983 
Industrial Segment
Valves 48,657 49,846 141,438 153,489 
Pumps 80,641 74,545 238,098 221,448 
Total129,298 124,391 379,536 374,937 
Net Revenues$190,782 $186,640 $561,783 $564,920 

11
Three Months EndedNine Months Ended
October 3, 2021September 27, 2020October 3, 2021September 27, 2020
Aerospace & Defense Segment
EMEA$15,097 $13,936 $43,946 $42,996 
North America43,173 44,932 128,288 135,627 
Other3,214 3,381 10,013 11,360 
Total61,484 62,249 182,247 189,983 
Industrial Segment
EMEA59,500 52,146 179,109 161,572 
North America35,194 40,765 106,019 128,610 
Other34,604 31,480 94,408 84,755 
Total129,298 124,391 379,536 374,937 
Net Revenues$190,782 $186,640 $561,783 $564,920 

Contract Balances. The Company’s contract assets and contract liabilities balances as of October 3, 2021 and December 31, 2020 are as follows (in thousands):
October 3, 2021December 31, 2020Increase/(Decrease)
Contract assets:
Recorded within prepaid expenses and other current assets$85,132 $67,352 $17,780 
Recorded within other non-current assets12,036 10,824 1,212 
$97,168 $78,176 $18,992 
Contract liabilities:
Recorded within accrued expenses and other current liabilities$19,187 $23,585 $(4,398)
Recorded within other non-current liabilities5,983 9,412 (3,429)
$25,170 $32,997 $(7,827)
Contract assets increased by $19.0 million during the nine months ended October 3, 2021, primarily due to unbilled revenue recognized during the period for over-time revenue contracts within the Defense and Refinery Valves businesses.

Contract liabilities decreased by $7.8 million during the nine months ended October 3, 2021, primarily due to recognition of revenue against customer advances within the Defense business in excess of advances received during the period, partially offset by customer advances received in excess of revenue recognized in the Industrial Pumps and Valves businesses.

Revenue on over time contracts is recognized as the Company, in accordance with the terms of the applicable contract, transfers control in the underlying products or services to the customer, which occurs as it incurs costs on its contracts under the cost-to-cost measure of progress. Revenue on over time contracts may be recognized before or after payments, advances or progress billings from customers are received. Recognition of revenue on over time contracts before the Company can invoice the customer can result in contract assets. Receipt of progress billings or advances from customers in advance of recognizing revenue can result in contract liabilities. Contract assets and contract liabilities amounts presented above are determined at the contract level unit of account. At the contract level it is determined whether the contract is in a net contract asset or net contract liability position.

Contract assets are generally classified between current (one year or less) and non-current (more than one year) based on factors such as when payments are due. Contract liabilities are generally classified between current and non-current based on factors such as expected timing of satisfaction of performance obligation.

Allowance for Credit Losses

The Company continuously monitors collections and payments from its customers and maintains a provision for estimated credit losses or doubtful accounts based upon expected losses, its historical experience, expectation of changes in risk of loss and any specific customer collection issues that it has identified. During the nine months ended October 3, 2021, there were no material changes in the allowance for credit losses including additional allowances, write-offs or recoveries. During the nine
12
months ended September 27, 2020, the Company recognized a $5.9 million charge for allowance against a customer receivable. Other than that there were no other material changes including additional allowances, write-offs or recoveries.

(5) Special and Restructuring Charges (Recoveries), net

Special and restructuring charges (recoveries), net

Special and restructuring charges (recoveries), net consist of restructuring costs (including costs to exit a product line or program) as well as certain special charges (recoveries) such as significant litigation settlements and other transactions (charges or recoveries) that are described below. All items described below are recorded in Special and restructuring charges (recoveries), net on the condensed consolidated statements of operations. Certain other special and restructuring charges (recoveries) such as inventory related items may be recorded in cost of revenues given the nature of the item.

The table below summarizes the amounts recorded within the special and restructuring charges (recoveries), net line item on the condensed consolidated statements of operations for the three and nine months ended October 3, 2021 and September 27, 2020 (in thousands):
Special & restructuring charges (recoveries), net
Three Months EndedNine Months Ended
October 3, 2021September 27, 2020October 3, 2021September 27, 2020
Special charges (recoveries), net$1,126 $436 $2,779 $(39,720)
Restructuring charges (recoveries), net(312)502 4,029 3,973 
Total special and restructuring charges (recoveries), net$814 $938 $6,808 $(35,747)

Special charges (recoveries), net

The table below details the special charges (recoveries), net recognized for the three and nine months ended October 3, 2021 (in thousands):
Special charges (recoveries), net
Three Months Ended October 3, 2021
Aerospace & DefenseIndustrialCorporate

Total
Heater & Control Valve divestiture charges$— $481 $143 $624 
Other special charges (recoveries), net— 376 126 502 
Total special charges (recoveries), net$— $857 $269 $1,126 
Special charges (recoveries), net
Nine Months Ended October 3, 2021
Aerospace & DefenseIndustrialCorporate

Total
Cryo divestiture gain$— $(1,947)$— $(1,947)
Heater & Control Valve divestiture charges— 3,459 143 3,602 
Other special charges (recoveries), net35 995 94 1,124 
Total special charges (recoveries), net$35 $2,507 $237 $2,779 

Heater & Control Valve divestiture: During the three and nine months ended October 3, 2021, the Company recognized special charges of $0.6 million and $3.6 million, respectively, related to the sale of the Heater and Control Valve businesses. The Company also recognized charges of $0.1 million in Corporate associated with the divestiture during the three and nine months ended October 3, 2021.

Cryo divestiture: During the nine months ended October 3, 2021, the Company recognized a net special recovery of $1.9 million from the sale of the Cryo business. The Company received cash proceeds of $7.2 million and recognized a pre-tax gain on sale of $1.9 million.
13
Other special charges (recoveries), net: The Company recognized special charges of $0.5 million and $1.1 million for the three and nine months ended October 3, 2021, respectively. Included in the charge recognized during the nine months ended October 3, 2021 within the Industrial segment is $0.9 million pertaining to a contingency indemnification to the buyer of a previously divested business. The Company also recognized charges of $0.1 million in Corporate associated with streamlining operations and reducing costs during the three months ended October 3, 2021.

The table below details the special charges (recoveries), net recognized for the three and nine months ended September 27, 2020 (in thousands):
Special charges (recoveries), net
Three Months Ended September 27, 2020
Aerospace & DefenseIndustrialCorporate

Total
I&S divestiture$— $— $249 $249 
Other special charges— —