Q3 2021 Earnings Presentation

INDUSTRIAL

AEROSPACE & DEFENSE

2021 Third Quarter Earnings Call

November 12th, 2021

This presentation contains certain statements that are "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995 (the "Act"). 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, although not all forward-looking statements are accompanied by such words. 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 may differ materially from the expectations we describe in our forward-looking statements. Forward-looking statements, including statements about outlook for future quarters, the expected and potential direct or indirect impacts of the COVID-19 pandemic on our business, the realization of cost reductions from restructuring activities and expected synergies, the number of new product launches and future cash flows from operating activities, involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: the duration and severity of the COVID-19 pandemic and its impact on the global economy; changes in the price of and demand for oil and gas in both domestic and international markets; any adverse changes in governmental policies; variability of raw material and component pricing; changes in our suppliers' performance; fluctuations in foreign currency exchange rates; changes in tariffs or other taxes related to doing business internationally; our ability to hire and retain key personnel; our ability to operate our manufacturing facilities at efficient levels including our ability to prevent cost overruns and reduce costs; our ability to generate increased cash by reducing our working capital; our prevention of the accumulation of excess inventory; our ability to successfully implement our divestiture; restructuring or simplification strategies; fluctuations in interest rates; our ability to successfully defend product liability actions; as well as the uncertainty associated with the current worldwide economic conditions and the continuing impact on economic and financial conditions in the United States and around the world, including as a result of COVID- 19, natural disasters, terrorist attacks and other similar matters. We advise you to read further about these and other risk factors set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q and Part I, Item 1A, "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2020, which is filed with the Securities and Exchange Commission ("SEC") and is available on the SEC's website at www.sec.gov. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

See page 18 for information on the use of non-GAAP financial measures.

3Q Summary

Strong underlying demand across CIRCOR reflected in orders and backlog

• 3Q Orders +16% … 3Q YTD Orders +11%
• 3Q Backlog +5% … 3Q YTD Backlog +15%

Executing well despite challenging supply chain environment

• 3Q Revenue +2% y/y … ~$10M revenue delayed (~5 points of organic growth)
• 3Q AOI +80 bps y/y, +240 bps vs. 2Q … additional pricing actions and productivity

Supply chain challenges accelerated near quarter end

• Material supply shortages
• Transportation / logistics constraints
• Labor availability
• Material inflation

Revised guidance for 2021 reflects shift in expected revenue timing

• Expect ~$25M of total year revenue to shift out of 2021 due to supply chain challenges

2

3Q'21 Reported Results

($ millions except EPS)
		3Q'21	y/y	vs. 2Q'21
	Backlog	435	5%	(0)%
	Orders	194	16%	(8)%
	Organic %		15%	(7)%
	Revenue	191	2%	0%
	Organic %		1%	1%
	AOI	19	11%	31%
	AOI %	10.1%	80 bps	240 bps
	GAAP EPS	$0.06	n/a	n/a
	Adj. EPS	$0.50	39%	44%
	FCF	7	n/a	(18)%
	% of adj. net	66%
	income

Comments on 3Q'21 results

Orders growth indicative of continued strong demand across Industrial end markets, offset by timing of large Defense orders

Revenue growth adversely impacted by $10 million … supply chain issues, logistics constraints, and labor availability across CIRCOR

Adjusted operating margin of $19 / 10.1%

• Incremental y/y margins of 46%
• Sequential improvement driven by additional pricing actions and mix offsetting inflation

Free cash flow lower than expected due to timing of milestone collections on long-term projects

Executing well in a challenging global environment

Organic revenue, Adjusted Operating Income (AOI), Adjusted EPS,	3
and Free Cash Flow (FCF) are non-GAAP measures

3Q'21 Industrial Segment Highlights

($ millions)

Orders		Organic		3Q 2021 Orders

		y/y	vs. 2Q'21
	$156	+28%	(9)%
	$140
$107
3Q'20	2Q'21	3Q'21
Revenue		Organic

• End market demand remains strong … orders growth across all regions with strength in N. America and EMEA
• Backlog up 30% YTD, above pre-COVID levels … highest Downstream aftermarket backlog since 2017
• Book-to-billof 1.1x

3Q 2021 Revenue

$124$130$129

3Q'20

2Q'21

3Q'21

AOI

7.9%8.0%8.7%

$10	$10	$11
3Q'20	2Q'21	3Q'21

y/y	vs. 2Q'21

+3% +1%

AOI expansion

y/y	vs. 2Q'21
+80 bps		+70 bps

• Revenue increase driven by strength in EMEA, China, and India partially offset by North America
• Global supply chain and logistics constraints adversely impacted revenue by $6 million / 5 pts of growth

3Q 2021 AOI

• 30% incremental margins … sequential improvement in price and productivity partially offset by higher inflation
• Expecting margin expansion in 4Q'21 despite continued headwind from higher inflation

Organic revenue and Adjusted Operating Income (AOI) are non-GAAP measures

4

Numbers may not add due to rounding

3Q'21 Aerospace & Defense Segment Highlights

($ millions)

Orders

$59	$54	$54
3Q'20	2Q'21	3Q'21

Organic

y/y	vs. 2Q'21

(10)% 0%

3Q 2021 Orders

• Defense orders down due to non-repeat of large
  Dreadnought order in 3Q'20
• Commercial recovery continues … 3rd consecutive quarter of sequential orders growth

Revenue

$62	$61	$61

3Q'20

2Q'21

3Q'21

Organic

y/y	vs. 2Q'21

(2)% +2%

3Q 2021 Revenue

• Revenue down due to lower Defense OEM shipments, partially offset by commercial recovery and higher Defense aftermarket
• Global supply chain and logistics constraints adversely impacted revenue by $4 million / 6 pts of growth

AOI

23.7%		24.2%
	19.9%
$15	$12	$15
3Q'20	2Q'21	3Q'21

AOI expansion	3Q 2021 AOI
y/y	vs. 2Q'21	•	Margin improvement driven by price actions, Defense
					program mix, and productivity
+50 bps		+430 bps
	•	Expect 4Q'21 margins to be roughly in line with prior year

Organic revenue and Adjusted Operating Income (AOI) are non-GAAP measures

5

Numbers may not add due to rounding