Press Release Details
Colfax Reports Second Quarter Results
RICHMOND, Va., Aug 04, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- 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 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
===== =====
SOURCE Colfax Corporation
http://www.colfaxcorp.com
Copyright (C) 2009 PR Newswire. All rights reserved