RICHMOND, Va., Feb. 18 /PRNewswire-FirstCall/ -- Colfax Corporation
(NYSE: CFX), a global leader in fluid-handling solutions for
critical applications, today announced financial results for the
fourth quarter and full year ended December 31, 2009. On a
year-over-year basis, highlights for the quarter and the year
include: Fourth quarter of 2009 (all comparisons versus the fourth
quarter of 2008) -- Net income of $5.1 million (12 cents per share
- basic and diluted) including restructuring and other related
charges of $7.4 million; adjusted net income (as defined below) of
$11.2 million (26 cents per share), a decrease of 35.7% including
positive currency effects of 2 cents per share -- Net sales of
$131.0 million, a decrease of 17.8%; organic sales decline (as
defined below) of 23.5% -- Operating income of $9.0 million;
adjusted operating income (as defined below) of $18.3 million, a
decrease of 36.2% including positive currency effects of $1.0
million -- EBITDA (as defined below) of $12.8 million; adjusted
EBITDA (as defined below) of $22.1 million, a decrease of 31.1%
including positive currency effects of $1.2 million -- Fourth
quarter orders of $101.6 million, a decrease of 22.4%; organic
order decline (as defined below) of 28.3% -- Backlog of $290.9
million at period end Full year 2009 (all comparisons versus 2008)
-- Net income of $21.7 million (50 cents per share - basic and
diluted) including restructuring and other related charges of $18.2
million; adjusted net income (as defined below) of $40.1 million
(93 cents per share), a decrease of 25.3% including negative
currency effects of 9 cents per share -- Net sales of $525.0
million, a decrease of 13.2%; organic sales decline (as defined
below) of 8.1% -- Operating income of $38.5 million; adjusted
operating income (as defined below) of $66.2 million, a decrease of
27.1% including negative currency effects of $5.4 million -- EBITDA
(as defined below) of $52.9 million; adjusted EBITDA (as defined
below) of $80.6 million, a decrease of 23.7% including negative
currency effects of $5.9 million -- Orders for the year of $462.4
million, a decrease of 32.2%; organic order decline (as defined
below) of 29.0%. 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 preliminary GAAP
financial measures. "Our fourth quarter results came in as
expected," said Clay Kiefaber, President and CEO of Colfax
Corporation. "Looking at the year, Colfax faced a challenging
environment. Sales were down 8% organically, driven by a 25%
decline in our general industrial end market. A sharp rebound in
our navy business helped to mitigate the impact of the weakness in
general industrial. Organic orders decreased 29% in 2009 with
declines in all markets except global navy which had a significant
order increase of 72%. We made substantial progress on our
restructuring efforts during the year as evidenced by our gross
profit margin. We're continuing to implement our cost reduction
plans which will help us leverage our cost structure as markets
improve." He added, "We are beginning to see some signs of economic
recovery including sequential order improvement in the general
industrial end market. However, we expect our businesses to
continue to be under pressure in 2010 as most of them are
later-cycle businesses and lag the broader economy. Our strong
financial condition provides us with the flexibility to continue to
weather current conditions. We remain focused on our growth
initiatives in key end markets, cost reductions, and acquisition
opportunities which will better position us when our markets fully
recover. Based on our current backlog and order rates, we are
expecting organic sales to decline in the range of 5% to 9% and
adjusted net income per share to be $.67 to $.77 for 2010."
Non-GAAP Financial Measures and Other Adjustments 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 acquisitions
and 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
preliminary GAAP results has been provided in the financial tables
included in this press release. At December 31, 2009, the Company
standardized its definition of an order among its businesses, as
well as the methodology for calculating the currency impact on
backlog. Orders and backlog are presented in accordance with the
revised methodology for all periods presented. As a result, orders
for the quarter and year ended December 31, 2008 increased by $4.7
million, or 3.7%, and $12.9 million, or 1.9%, respectively. Backlog
for the year ended December 31, 2008 increased by $11.6 million, or
3.4%. Applying the revised methodology, orders for the quarter and
year ended December 31, 2009 decreased by $3.8 million, or 3.6%,
and increased $7.7 million, or 1.7%, respectively. Backlog for 2009
increased by $21.7 million, or 8.1%. Conference Call and Webcast
Colfax will host a conference call to provide details about its
results and outlook on Thursday, February 18 at 8:00 a.m. ET. The
call will be open to the public through 877-303-7908 or
678-373-0875 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 Year Ended December
31, December 31, December 31, December 31, 2009 2008 2009 2008 ----
---- ---- ---- Net sales $130,971 $159,311 $525,024 $604,854 Cost
of sales 83,960 101,557 339,237 387,667 ------ ------- -------
------- Gross profit 47,011 57,754 185,787 217,187 Initial public
offering related costs - - - 57,017 Selling, general and
administrative expenses 27,426 27,718 113,674 125,234 Research and
development expenses 1,320 1,426 5,930 5,856 Restructuring and
other related charges 7,420 - 18,175 - Asbestos liability and
defense (income) costs (1,017) 1,978 (2,193) (4,771) Asbestos
coverage litigation expenses 2,904 4,905 11,742 17,162 ----- -----
------ ------ Operating income 8,958 21,727 38,459 16,689 Interest
expense 1,746 2,138 7,212 11,822 ----- ----- ----- ------ Income
before income taxes 7,212 19,589 31,247 4,867 Provision for income
taxes 2,092 9,210 9,525 5,438 ----- ----- ----- ----- Net income
(loss) $5,120 $10,379 $21,722 $(571) ====== ======= ======= =====
Net income (loss) per share-basic and diluted $0.12 $0.24 $0.50
$(0.11) ===== ===== ===== ====== Colfax Corporation Condensed
Consolidated Balance Sheets Dollars in thousands (Preliminary and
unaudited) December 31, 2009 2008 ---- ---- ASSETS CURRENT ASSETS:
Cash and cash equivalents $49,963 $28,762 Trade receivables, less
allowance for doubtful accounts 88,493 101,064 Inventories, net
71,150 80,327 Asbestos insurance asset 30,606 26,473 Asbestos
insurance receivable 28,991 36,371 Other current assets 20,358
21,860 ------ ------ Total current assets 289,561 294,857 Deferred
income taxes, net 52,023 53,428 Property, plant and equipment, net
90,434 92,090 Goodwill and intangible assets, net 179,206 179,046
Long-term asbestos insurance asset 358,843 277,542 Long-term
asbestos insurance receivable 16,876 - Deferred loan costs, pension
and other assets 16,188 16,113 ------ ------ Total assets
$1,003,131 $913,076 ========== ======== LIABILITIES AND
SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of
long-term debt and capital leases $8,969 $5,420 Accounts payable
36,579 52,138 Accrued asbestos liability 34,866 28,574 Other
accrued liabilities 63,785 68,154 ------ ------ Total current
liabilities 144,199 154,286 Long-term debt, less current portion
82,516 91,701 Long-term asbestos liability 408,903 328,684 Pension
and accrued post-retirement benefits 126,953 130,188 Other
liabilities 41,728 41,286 ------ ------ Total liabilities 804,299
746,145 Shareholder's equity 198,832 166,931 ------- ------- Total
liabilities and shareholders' equity $1,003,131 $913,076 ==========
======== Colfax Corporation Condensed Consolidated Statement of
Cash Flows Dollars in thousands (Preliminary and unaudited) Year
ended December 31, 2009 2008 ---- ---- Cash flows from operating
activities: Net income (loss) $21,722 $(571) Adjustments to
reconcile net income (loss) to cash provided by (used in) operating
activities: Depreciation, amortization and fixed asset impairment
charges 15,074 14,788 Noncash stock-based compensation 2,593 11,330
Other adjustments for non-cash items 613 5,608 Deferred income
taxes 3,593 (13,357) Changes in working capital 6,144 (29,148)
Changes in other operating assets and liabilities (11,453) (21,631)
------- ------- Net cash provided by (used in) operating activities
38,286 (32,981) Cash flows from investing activities: Purchases of
fixed assets (11,006) (18,645) Acquisitions, net of cash received
(1,260) (439) Proceeds from sale of fixed assets 219 23 --- -- Net
cash used in investing activities (12,047) (19,061) Cash flows from
financing activities: Borrowings under term credit facility -
100,000 Payments under term credit facility (5,000) (210,278)
Proceeds from borrowings on revolving credit facilities - 28,185
Repayments of borrowings on revolving credit facilities - (28,158)
Proceeds from the issuance of common stock, net of offering costs -
193,020 Repurchases of common stock - (5,731) Dividends paid to
preferred shareholders - (38,546) Other (417) (3,656) ---- ------
Net cash (used in) provided by financing activities (5,417) 34,836
Effect of exchange rates on cash 379 (2,125) --- ------ Increase
(decrease) in cash and cash equivalents 21,201 (19,331) Cash and
cash equivalents, beginning of year 28,762 48,093 ------ ------
Cash and cash equivalents, end of year $49,963 $28,762 =======
======= Colfax Corporation Reconciliation of GAAP to non-GAAP
Financial Measures Dollars in thousands, except per share data
(Unaudited) Three Months Ended Year Ended December 31, December 31,
December 31, December 31, 2009 2008 2009 2008 ---- ---- ---- ----
EBITDA Net income (loss) $5,120 $10,379 $21,722 $(571) Interest
expense 1,746 2,138 7,212 11,822 Provision for income taxes 2,092
9,210 9,525 5,438 Depreciation and amortization 3,834 3,443 14,426
14,788 ----- ----- ------ ------ EBITDA $12,792 $25,170 $52,885
$31,477 ======= ======= ======= ======= EBITDA margin 9.8% 15.8%
10.1% 5.2% Adjusted EBITDA Net income (loss) $5,120 $10,379 $21,722
$(571) Interest expense 1,746 2,138 7,212 11,822 Provision for
income taxes 2,092 9,210 9,525 5,438 Depreciation and amortization
3,834 3,443 14,426 14,788 Restructuring and other related charges
7,420 - 18,175 - IPO-related costs - - - 57,017 Legacy legal
adjustment - - - 4,131 Due diligence costs - - - 582 Asbestos
liability and defense (income) costs (1,017) 1,978 (2,193) (4,771)
Asbestos coverage litigation expenses 2,904 4,905 11,742 17,162
----- ----- ------ ------ Adjusted EBITDA $22,099 $32,053 $80,609
$105,598 ======= ======= ======= ======== Adjusted EBITDA margin
16.9% 20.1% 15.4% 17.5% Adjusted Net Income and Adjusted Earnings
per Share Net income (loss) $5,120 $10,379 $21,722 $(571)
Restructuring and other related charges 7,420 - 18,175 -
IPO-related costs - - - 57,017 Legacy legal adjustment - - - 4,131
Due diligence costs - - - 582 Asbestos liability and defense
(income) costs (1,017) 1,978 (2,193) (4,771) Asbestos coverage
litigation expenses 2,904 4,905 11,742 17,162 Interest adjustment
to effect IPO at beginning of period - - - 2,302 Tax adjustment to
effective rate of 32% and 34%, respectively (3,194) 210 (9,346)
(22,201) ------ --- ------ ------- Adjusted net income $11,233
$17,472 $40,100 $53,651 ======= ======= ======= ======= Adjusted
net income margin 8.6% 11.0% 7.6% 8.9% Weighted average shares
outstanding - diluted 43,449,493 - 43,325,704 - Shares outstanding
at closing of IPO - 44,006,026 - 44,006,026 Adjusted net income per
share $0.26 $0.40 $0.93 $1.22 ===== ===== ===== ===== Net income
(loss) per share-basic and diluted in accordance with GAAP $0.12
$0.24 $0.50 $(0.11) ===== ===== ===== ====== Adjusted Operating
Income Operating income $8,958 $21,727 $38,459 $16,689
Restructuring and other related charges 7,420 - 18,175 -
IPO-related costs - - - 57,017 Legacy legal adjustment - - - 4,131
Due diligence costs - - - 582 Asbestos liability and defense
(income) costs (1,017) 1,978 (2,193) (4,771) Asbestos coverage
litigation expenses 2,904 4,905 11,742 17,162 ----- ----- ------
------ Adjusted operating income $18,265 $28,610 $66,183 $90,810
======= ======= ======= ======= Adjusted operating income margin
13.9% 18.0% 12.6% 15.0% Colfax Corporation Change in Sales and
Orders Dollars in millions (Unaudited) Sales Orders $ % $ %
--------------- --------------- Three Months Ended December 31,
2008 $159.3 $131.0 Components of Change: Existing Businesses (37.5)
(23.5)% (37.1) (28.3)% Acquisitions 0.5 0.3% 1.0 0.8% Foreign
Currency Translation 8.7 5.4% 6.7 5.1% ----- ----- Total (28.3)
(17.8)% (29.4) (22.4)% ----- ----- Three Months Ended December 31,
2009 $131.0 $101.6 ====== ====== Sales Orders Backlog at $ % $ %
Period End -------------- --------------- --------------- Year
ended December 31, 2008 $604.9 $682.1 $349.0 Components of Change:
Existing Businesses (48.8) (8.1)% (198.0) (29.0)% (66.8) (19.1)%
Acquisitions 1.0 0.2% 1.4 0.2% 0.7 0.2% Foreign Currency
Translation (32.1) (5.3)% (23.1) (3.4)% 8.0 2.3% ----- ------ -----
Total (79.9) (13.2)% (219.7) (32.2)% (58.1) (16.6)% ------ ------
------ Year ended December 31, 2009 $525.0 $462.4 $290.9 ======
====== ====== Colfax Corporation Reconciliation of Projected 2010
Net Income Per Share to Adjusted Net Income Per Share Amounts in
Dollars (Unaudited) EPS Range --------- Projected net income per
share - fully diluted $0.41 $0.51 Estimated restructuring and other
related charges(1) 0.06 0.06 Asbestos coverage litigation 0.14 0.14
Asbestos liability and defense costs 0.06 0.06 ---- ---- Projected
adjusted net income per share - fully diluted $0.67 $0.77 =====
===== (1) Represents estimated costs related to restructuring
actions implemented through February 15, 2010, including $.03 per
share of termination benefits for the Company's former CEO. Assumes
continuation of the German furlough program throughout 2010.
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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