RICHMOND, Va., Aug. 4 /PRNewswire-FirstCall/ -- Colfax Corporation
(NYSE: CFX), a global leader in engineered fluid handling products
and systems, today announced financial results for the second
quarter ended July 3, 2009. On a year-over-year basis, highlights
for the quarter and the first six months of 2009 include: Second
quarter of 2009 (all comparisons versus the second quarter of 2008)
-- Net income of $4.4 million (10 cents per share - basic and
diluted); Adjusted net income (as defined below) of $8.5 million
(20 cents per share), a decrease of 38.8% including negative
currency effects of 4 cents per share -- Net sales of $129.2
million, a decrease of 20.0%; Organic sales decline (as defined
below) of 10.2% -- Operating income of $8.3 million; Adjusted
operating income (as defined below) of $14.3 million, a decrease of
39.4% including negative currency effects of $2.3 million -- EBITDA
(as defined below) of $11.8 million; Adjusted EBITDA (as defined
below) of $17.8 million, a decrease of 35.2% including negative
currency effects of $2.6 million -- Second quarter orders of $104.1
million, a decrease of 44.9%; Organic order decline (as defined
below) of 38.3% -- Backlog of $292.3 million at period end First
half of 2009 (all comparisons versus the first half of 2008) -- Net
income of $11.2 million (26 cents per share - basic and diluted);
Adjusted net income (as defined below) of $18.9 million (44 cents
per share), a decrease of 21.5% including negative currency effects
of 9 cents per share -- Net sales of $265.5 million, a decrease of
9.1%; Organic sales growth (as defined below) of 2.4% -- Operating
income of $20.1 million; Adjusted operating income (as defined
below) of $31.4 million, a decrease of 25.0% including negative
currency effects of $5.6 million -- EBITDA (as defined below) of
$27.0 million; Adjusted EBITDA (as defined below) of $38.3 million,
a decrease of 22.7% including negative currency effects of $6.2
million -- Orders for the six month period of $224.9 million, a
decrease of 39.1%; Organic order decline (as defined below) of
32.0% Adjusted net income, adjusted net income per share, adjusted
operating income, EBITDA, adjusted EBITDA, organic sales growth
(decline) and organic order growth (decline) are not financial
measures calculated in accordance with generally accepted
accounting principles in the U.S. ("GAAP"). See below for a
description of the measures' usefulness and a reconciliation of
these measures to their most directly comparable GAAP financial
measures. "We had lower results in the second quarter versus prior
year due to reduced OEM demand and push-out of project deliveries,"
said John Young, president and CEO of Colfax Corporation. "While
sales were up in our global navy and commercial marine end markets,
they were offset by declines in our general industrial and power
generation end markets. Orders were lower in all end markets." He
added, "We continued to implement cost reduction initiatives during
the quarter and have announced the closing of our Sanford, North
Carolina facility and the consolidation of its operations into
other facilities. We expect to realize savings of about $13 million
in 2009 related to actions taken since the beginning of the year.
We will be implementing additional restructuring measures this year
to reduce our cost structure and better position us when markets
improve. We are well positioned to weather the economic uncertainty
with our strong financial condition and sound execution of our
long-term strategies." The Company expects adjusted earnings per
share of $0.93 to $1.00 for 2009. Non-GAAP Financial Measures
Colfax has provided in this press release financial information
that has not been prepared in accordance with GAAP. These non-GAAP
financial measures are adjusted net income, adjusted net income per
share, adjusted operating income, EBITDA, adjusted EBITDA, organic
sales growth (decline) and organic order growth (decline). Adjusted
net income, adjusted net income per share, adjusted operating
income and adjusted EBITDA exclude asbestos liability and defense
costs (income) and asbestos coverage litigation expenses, certain
legacy legal charges, certain due diligence costs, restructuring
and other related charges as well as one time initial public
offering-related costs to the extent they impact the periods
presented. Adjusted net income also reflects interest expense as if
the initial public offering (IPO) had occurred at the beginning of
2007 and presents income taxes at an effective tax rate of 32% in
2009 and 34% in 2008. Adjusted net income per share in 2008 assumes
the 44,006,026 shares outstanding at the closing of the IPO to be
outstanding since January 1, 2007. Projected adjusted net income
per share excludes actual and estimated restructuring and other
related charges, asbestos coverage litigation expenses and asbestos
liability and defense costs. Organic sales growth (decline) and
organic order growth (decline) exclude the impact of foreign
exchange rate fluctuations. These non-GAAP financial measures
assist Colfax in comparing its operating performance on a
consistent basis because, among other things, they remove the
impact of changes in our capital structure and asset base,
non-recurring items such as IPO-related costs, legacy asbestos
issues (except in the case of EBITDA) and items outside the control
of its operating management team. Non-GAAP financial measures
should not be considered in isolation from, or as a substitute for,
financial information calculated in accordance with GAAP. Investors
are encouraged to review the reconciliation of these non-GAAP
measures to their most directly comparable GAAP financial measures.
A reconciliation of non-GAAP financial measures presented above to
GAAP results has been provided in the financial tables included in
this press release. Conference Call and Webcast Colfax will host a
conference call to provide details about its results and business
strategy on Tuesday, August 4 at 8:30 a.m. ET. The call will be
open to the public through 888-298-3451 or 719-457-2640 and webcast
via Colfax's website at http://www.colfaxcorp.com/ under the
"Investor Relations" section. Access to a supplemental slide
presentation can also be found at the Colfax website under the same
heading. Both the audio of this call and the slide presentation
will be archived on the website later today and will be available
until the next quarterly call. About Colfax Corporation Colfax
Corporation is a global leader in critical fluid-handling products
and technologies. Through its global operating subsidiaries, Colfax
manufactures positive displacement industrial pumps and valves used
in oil & gas, power generation, commercial marine, global naval
and general industrial markets. Colfax's operating subsidiaries
supply products under the well-known brands Allweiler, Fairmount
Automation, Houttuin, Imo, LSC, Portland Valve, Tushaco, Warren and
Zenith. Colfax is traded on the NYSE under the ticker "CFX."
Additional information about Colfax is available at
http://www.colfaxcorp.com/. CAUTIONARY NOTE CONCERNING FORWARD
LOOKING STATEMENTS: This press release may contain forward-looking
statements, including forward-looking statements within the meaning
of the U.S. Private Securities Litigation Reform Act of 1995. Such
forward-looking statements include, but are not limited to,
statements concerning Colfax's plans, objectives, expectations and
intentions and other statements that are not historical or current
facts. Forward-looking statements are based on Colfax's current
expectations and involve risks and uncertainties that could cause
actual results to differ materially from those expressed or implied
in such forward-looking statements. Factors that could cause
Colfax's results to differ materially from current expectations
include, but are not limited to factors detailed in Colfax's
reports filed with the U.S. Securities and Exchange Commission as
well as its Annual Report on Form 10-K under the caption "Risk
Factors". In addition, these statements are based on a number of
assumptions that are subject to change. This press release speaks
only as of this date. Colfax disclaims any duty to update the
information herein. The term "Colfax" in reference to the
activities described in this press release may mean one or more of
Colfax's global operating subsidiaries and/or their internal
business divisions and does not necessarily indicate activities
engaged in by Colfax Corporation. Colfax Corporation Condensed
Consolidated Statements of Operations Dollars in thousands, except
per share data (unaudited) Three Months Ended Six Months Ended
------------------ ---------------- July 3, 2009 June 27, 2008 July
3, 2009 June 27, 2008 ------------ ------------- ------------
------------- Net sales $129,185 $161,431 $265,508 $292,082 Cost of
sales 84,630 104,654 172,938 187,127 ------ ------- ------- -------
Gross profit 44,555 56,777 92,570 104,955 Initial public offering
related costs - 57,017 - 57,017 Selling, general and administrative
expenses 28,586 35,776 58,112 64,283 Research and development
expenses 1,680 1,571 3,087 2,952 Restructuring and other related
charges 486 - 1,147 - Asbestos liability and defense costs (income)
1,482 (715) 3,127 (437) Asbestos coverage litigation expenses 4,027
3,970 6,993 7,109 ----- ----- ----- ----- Operating income (loss)
8,294 (40,842) 20,104 (25,969) Interest expense 1,786 3,236 3,632
7,733 ----- ----- ----- ----- Income (loss) before income taxes
6,508 (44,078) 16,472 (33,702) Provision (benefit) for income taxes
2,142 (12,679) 5,245 (9,101) ----- ------- ----- ------ Net income
(loss) $4,366 $(31,399) $11,227 $(24,601) ====== ======== =======
======== Net income (loss) per share-basic and diluted $0.10
$(1.01) $0.26 $(0.99) ===== ====== ===== ====== Colfax Corporation
Reconciliation of GAAP to non-GAAP Financial Measures Dollars in
thousands, except per share data (unaudited) Three Months Ended Six
Months Ended ------------ ---------- July 3, 2009 June 27, 2008
July 3, 2009 June 27, 2008 EBITDA Net income (loss) $4,366
$(31,399) $11,227 $(24,601) Interest expense 1,786 3,236 3,632
7,733 Provision (benefit) for income taxes 2,142 (12,679) 5,245
(9,101) Depreciation and amortization 3,538 3,955 6,911 7,650 -----
----- ----- ----- EBITDA $11,832 $(36,887) $27,015 $(18,319)
======= ======== ======= ======== EBITDA margin 9.2% (22.9)% 10.2%
(6.3)% Adjusted EBITDA Net income (loss) $4,366 $(31,399) $11,227
$(24,601) Interest expense 1,786 3,236 3,632 7,733 Provision for
income taxes 2,142 (12,679) 5,245 (9,101) Depreciation and
amortization 3,538 3,955 6,911 7,650 Restructuring and other
related charges 486 - 1,147 - IPO-related costs - 57,017 - 57,017
Legacy legal adjustment - 4,131 - 4,131 Asbestos liability and
defense costs (income) 1,482 (715) 3,127 (437) Asbestos coverage
litigation expense 4,027 3,970 6,993 7,109 ----- ----- ----- -----
Adjusted EBITDA $17,827 $27,516 $38,282 $49,501 ======= =======
======= ======= Adjusted EBITDA margin 13.8% 17.0% 14.4% 16.9%
Adjusted Net Income and Adjusted Earnings per Share Net income
(loss) $4,366 $(31,399) $11,227 $(24,601) Restructuring and other
related charges 486 - 1,147 - IPO-related costs - 57,017 - 57,017
Legacy legal adjustment - 4,131 - 4,131 Asbestos liability and
defense costs 1,482 (715) 3,127 (437) Asbestos coverage litigation
expense 4,027 3,970 6,993 7,109 Interest adjustment to effect IPO
at beginning of period - 725 - 2,302 Tax adjustment to effective
rate of 32% and 34%, respectively (1,859) (19,836) (3,631) (21,484)
------ ------- ------ ------- Adjusted net income $8,502 $13,893
$18,863 $24,037 ====== ======= ======= ======= Adjusted net income
margin 6.6% 8.6% 7.1% 8.2% Weighted average shares outstanding -
diluted 43,245,990 - 43,237,856 - Shares outstanding at closing of
IPO - 44,006,026 - 44,006,026 Adjusted net income per share $0.20
$0.32 $0.44 $0.55 ===== ===== ===== ===== Net income per share-
basic and diluted in accordance with GAAP $0.10 $(1.01) $0.26
$(0.99) ===== ====== ===== ====== Adjusted Operating Income
Operating income (loss) $8,294 $(40,842) $20,104 $(25,969)
Restructuring and other related charges 486 - 1,147 - IPO-related
costs - 57,017 - 57,017 Legacy legal adjustment - 4,131 - 4,131
Asbestos liability and defense costs 1,482 (715) 3,127 (437)
Asbestos coverage litigation expense 4,027 3,970 6,993 7,109 -----
----- ----- ----- Adjusted operating income $14,289 $23,561 $31,371
$41,851 ======= ======= ======= ======= Adjusted operating income
margin 11.1% 14.6% 11.8% 14.3% Colfax Corporation Sales and Orders
Growth Dollars in millions (unaudited) Sales Orders ----- ------ $
% $ % -------- -------- Three Months Ended June 27, 2008 $161.4
$188.8 Components of Growth: Existing Businesses (16.4) (10.2)%
(72.3) (38.3)% Foreign Currency Translation (15.8) (9.8)% (12.4)
(6.6)% ----- ----- Total Growth (32.2) (20.0)% (84.7) (44.9)%
------ ------ Three Months Ended July 3, 2009 $129.2 $104.1 ======
====== Sales Orders ----- ------ Backlog at $ % $ % Period End
-------- -------- ---------- Six Months Ended June 27, 2008 $292.1
$369.1 $384.0 Components of Growth: Existing Businesses 7.0 2.4%
(118.2) (32.0)% (63.8) (16.6)% Foreign Currency Translation (33.6)
(11.5)% (26.0) (7.0)% (27.9) (7.3)% ----- ------ ----- Total Growth
(26.6) (9.1)% (144.2) (39.1)% (91.7) (23.9)% ---- ----- ---- Six
Months Ended July 3, 2009 $265.5 $224.9 $292.3 ====== ====== ======
Colfax Corporation Reconciliation of Projected 2009 Net Income Per
Share to Adjusted Net Income Per Share Amounts in Dollars
(unaudited) EPS Range --------- Projected net income per share -
fully diluted $0.57 $0.64 Actual first half restructuring and other
related charges 0.02 0.02 Estimated second half restructuring and
other related charges 0.04 0.04 Asbestos coverage litigation 0.19
0.19 Asbestos liability and defense costs 0.11 0.11 ---- ----
Projected adjusted net income per share - fully diluted $0.93 $1.00
===== ===== DATASOURCE: Colfax Corporation CONTACT: Mitzi Reynolds,
Vice President, Investor Relations of Colfax Corporation,
+1-804-327-5689 Web Site: http://www.colfaxcorp.com/
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