Lauren Romeo, Portfolio Manager for Royce & Associates, says CIRCOR International, Inc. (CIR) CEO Scott Buckhout has developed and launched a plan to unlock the company’s true growth and profitability potential. Under Buckhout’s leadership, CIR has set the following targets for 2018: 4% to 6% compound annual organic sales growth; a roughly 500 basis point improvement in operating margin to about 15%; compound annual EPS growth of 15%; and free cash flow conversion of greater than 100%.
“He’s also brought on additional management talent to help CIR achieve these goals,” Romeo says. “The team is already making inroads, simplifying CIR’s corporate structure, beginning to rationalize plants and its supplier base, exiting unprofitable product lines, and implementing a continuous productivity improvement program called CIRCOR Business System.”
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Romeo says CIR is likely to supplement its internal growth by redeploying its improved free cash flow into strategic acquisitions that expand or enhance its product set.
“Initiatives underway to drive growth include accelerating new product development, increasing CIR’s presence in high-growth geographies where it is under-represented, and cross-selling products into new, relevant end markets,” Romeo says.
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