Press Release Details

RICHMOND, Va., Feb. 20 /PRNewswire-FirstCall/ -- Colfax Corporation (NYSE: CFX - News), a global leader in engineered fluid handling products and systems, today announced financial results for the fourth quarter and full year ended December 31, 2008. On a year-over-year basis, highlights for the quarter and the year include:

Fourth quarter of 2008 (all comparisons versus the fourth quarter of 2007)

• Net income of $10.4 million (24 cents per share - basic and diluted); Adjusted net income (as defined below) of $17.5 million (40 cents per share), an increase of 19.1%
  
• Net sales of $159.3 million, an increase of 10.9%; Organic sales growth (as defined below) of 19.1%
  
• Operating income of $21.7 million; Adjusted operating income (as defined below) of $28.6 million, an increase of 14.9%
  
• EBITDA (as defined below) of $25.2 million; Adjusted EBITDA (as defined below) of $32.1 million, an increase of 10.8%
  
• Fourth quarter orders of $126.3 million, a decrease of 19.3%; Organic order decline (as defined below) of 15.8%
  
• Backlog of $337.3 million at period end

Full year 2008 (all comparisons versus 2007)

• Net loss of $0.6 million (11 cents per share - basic and diluted); Adjusted net income (as defined below) of $53.7 million ($1.22 per share), an increase of 32.8%
  
• Net sales of $604.9 million, an increase of 19.5%; Organic sales growth (as defined below) of 13.9%
  
• Operating income of $16.7 million; Adjusted operating income (as defined below) of $90.8 million, an increase of 24.5%
  
• EBITDA (as defined below) of $31.5 million; Adjusted EBITDA (as defined below) of $105.6 million, an increase of 19.8%
  
• Record orders for the year of $669.2 million, an increase of 15.1%; Organic order growth (as defined below) of 7.0%

Adjusted net income, adjusted net income per share, adjusted operating income, EBITDA, adjusted EBITDA, organic sales growth and organic order growth 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 an excellent fourth quarter," said John Young, president and CEO of Colfax Corporation. "Our strong results were driven by organic sales growth of 19% and a 210 basis point improvement in gross profit margin. We also delivered record results for the year, including organic sales growth of 14%, in line with our low double-digit growth expectation. Sales growth was lead by increased demand in the power generation, commercial marine and general industrial end markets. We are well positioned heading into 2009, with a higher backlog than we had at the beginning of 2008."

He continued, "Despite our recent performance and our relatively strong backlog, we expect that the second half of the year could be very challenging if current economic conditions persist. We remain cautious on our outlook but continue to expect organic sales growth in the range of 1% to 3% and adjusted earnings per share of $1.10 to $1.17 for 2009. Our focus continues to be on growing the business through expanding our served markets, executing on our breakthrough initiatives and pursuing acquisitions while controlling costs. Our strong financial position allows us to be flexible as well as opportunistic. We believe that the long-term fundamentals of our end markets including the need for infrastructure and energy worldwide bode well for our fluid-handling products and solutions."

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 and organic order growth. Adjusted net income, adjusted net income per share, adjusted operating income and adjusted EBITDA exclude asbestos liability and defense cost (income) and asbestos coverage litigation expense, certain legacy legal charges, certain due diligence costs, as well as one time initial public offering-related costs. 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 34%. Adjusted net income per share assumes the 44,006,026 shares outstanding at the closing of the IPO to be outstanding since January 1, 2007. Organic sales growth and organic order growth 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 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 Friday, February 20 at 8:00 a.m. EST. The call will be open to the public through 719-325-4744 or 877-723-9518 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. In addition, a replay of this call will be available until approximately March 6, 2009. The replay number in the U.S. is 888-203-1112 and internationally it is 719-457-0820, and the access code is 4053059.

About Colfax Corporation

Colfax Corporation is a global leader in critical fluid-handling solutions, including the manufacture of positive displacement industrial pumps and valves used in global oil & gas, power generation, marine, naval and a variety of other industrial applications. Key product brands include 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's products, businesses and practices is available at www.colfaxcorp.com

Cautionary Note Concerning Forward Looking Statements

This press release contains forward-looking statements, including forward-looking statements within the meaning of the 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 Registration Statement on Form S-1 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.