UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 6, 2008
Colfax Corporation
(Exact name of registrant as specified in its charter)
| Delaware | 001-34045 | 54-1887631 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (I.R.S. Employer Identification No.) |
8730 Stony Point Parkway, Suite 150
Richmond, VA 23235
(Address of Principal Executive Offices) (Zip Code)
(804) 560-4070
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Section 7 – Regulation FD
| Item 7.01 | Regulation FD Disclosure. |
Attached hereto as Exhibit 99.1 and incorporated herein by reference are slides to be used by Colfax Corporation for investor presentations.
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Section 9 – Financial Statements and Exhibits.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits |
| 99.1 | Colfax Corporation investor presentation slides, furnished pursuant to Item 7.01. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Colfax Corporation | ||||
| Date: August 7, 2008 | By: | /s/ JOHN A. YOUNG | ||
| Name: | John A. Young | |||
| Title: | President and Chief Executive Officer | |||
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EXHIBIT INDEX
| 99.1 | Colfax Corporation investor presentation slides. |
 Investor Presentation August 2008 Exhibit 99.1 ***** ***** ***** ***** ***** ***** ***** ***** ***** ***** ***** ***** ***** ***** ***** ***** ***** ***** ***** ***** ********** ********** ********** ********** ********** ********** ********** ********** ********** ********** ********** ********** ********** ********** ********** ********** ********** |
 1 Forward Looking Statements The following information 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 Registration Statement on Form S-1 under the caption "Risk
Factors" and other reports filed with the U.S. Securities and Exchange
Commission. In addition, these statements are based on a number of
assumptions that are subject to change. This presentation speaks only as of
this date. Colfax disclaims any duty to update the information herein.
|
 2 Company Overview 2007 Revenue of $506.3mm ~2,000 associates worldwide 16 principal production facilities in 7 countries Over 300 direct sales and marketing associates More than 450 authorized distributors in 79 countries Headquartered in Richmond, VA Colfax is Strategically Focused on Serving Key Infrastructure End Markets in the Fluid Handling Industry 2 & 3 Screw 2 & 3 Screw Pumps Pumps Centrifugal Pumps Progressive Cavity Pumps Precision Gear Pumps Specialty Valves Fluid Handling Systems End Markets Products Global Navy General Industrial Commercial Marine Oil & Gas Power Generation |
 3 Colfax Business System Drives Business Improvement POLICY DEPLOYMENT POLICY DEPLOYMENT On Time Delivery - On Time Delivery - - Products and Services Products and Services Customer Satisfaction Customer Satisfaction Voice of the Customer Voice of the Customer Total Associate Involvement Production Production Poka-Yoke Jidoka Strategic Supplier Strategic Supplier Design for Design for Preparation Preparation Development Development Six Sigma Six Sigma Product Development QFD Six Sigma DOE Multi-skilled JIT System Process Workforce Accounting DMP SMED Visual TPM One-piece Problem Management Flow Solving Benchmark Benchmark 5S 5S Metrics Metrics Standard Standard Measurement Measurement Cellularization Cellularization Work Work System
Analysis System
Analysis Profitable Sales Growth Profitable Sales Growth Six Sigma Quality Six Sigma Quality Cost Control and Improvement Cost Control and Improvement Derived from the proven Danaher Business System Utilize Voice of the Customer (“VOC”) to target breakthrough growth initiatives, new products and applications Conduct root-cause analysis, develop process improvements and implement sustainable systems Culture of continuous improvement All aspects of operations and strategic planning CBS is How We Manage Our Business and Has Been The Key Driver to Our Success |
 4 Investment Highlights Global leader in specialty fluid handling products Proven application expertise in solving critical customer needs Serving fast growing infrastructure driven end markets Leading brand names generating aftermarket sales and services Experienced management team in place to grow organically and through strategic acquisition Significant insider ownership Consistent Track Record of Driving Profitable Organic Sales Growth
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 5 2 and 3 Screw Pumps 2 and 3 Screw Pumps Well Recognized Brands Across Served Markets Fluid Handling Systems Fluid Handling Systems Broad Product Portfolio Focused on Customer Applications Precision Gear Pumps Precision Gear Pumps Progressive Cavity Pumps Progressive Cavity Pumps Specialty Valves Specialty Valves Centrifugal Pumps Centrifugal Pumps |
 6 Strong Application Expertise Customer building new pipeline to transport crude oil from Karama oil field in western Egypt to base production facility onto Sumed pipeline for storage and further transfer Turn-key solution - design, build, install large lube oil skid system Allweiler chosen because of technical competency Shipped in November 2007 and to be commissioned at start-up in 2010 Customer contracted to design / build critical auxiliary system components for a new Finnish 1.6 GW nuclear power plant Turn-key solution - design, build, install, commission three identical skid packages Warren chosen because of versatility in handling crude oil applications Shipped, installed and commissioned in early 2006 Follow-on order shipped in December 2007 with a subsequent order booked in 2Q08 Situation Analysis Colfax Solution Situation Analysis Colfax Solution |
 7 Develop New Products, Applications and
Technologies Driven by Voice of the Customer End-user Problem: Stricter environmental standards regarding inadvertent discharge of oily water in port resulting in large fines to ship owners Colfax Solution: Introduced Imo magnetic drive pump to eliminate seal leakages Developing integrated fluid handling system with sensors designed to proactively alert ship engineer of a leak Control Unit Leakage Sensor Example: Commercial Marine Driven by VOC, Examples of New Products Introduced in 2007 Allweiler’s ALLTRIMM Gas Engine Pump Gas Engine Pump Skid Skid Imo’s ACG Optiline Warren’s Vertical Submersible Bitumen Pump |
 8 Power Generation General Industrial Oil & Gas Commercial Marine Global Navy Asia Europe United States Canada Central & South America Middle East & Africa Large and Diverse Customer Base and End Markets Blue Chip Customer Base with No Single Customer Representing More Than 3% of Sales in
2007 ____________________ (1) Includes Distribution (11%), Chemical Processing (6%), Building Products (4%), Machinery Support (3%), Wastewater (2%), Heat Transfer (2%), Pulp and Paper (1%), Diesel Engines (1%) and Other (14%). 44% 24% 15% 11% 6% (1) 24% 47% 7% 16% 3% 2007 Revenues By End Markets 2007 Revenues By Geography Blue Chip Customers Blue Chip Customers Blue Chip Customers 2% |
 9 ~$23.4bn ~$0.3bn ~$2.2bn ~$3.8bn ~$2.0bn Global infrastructure development will continue to drive increased capital investment
and will benefit local suppliers as well as international exporters of
fluid handling equipment In the U.S., we expect Congress to continue to appropriate funds for new ship construction for the next generation of naval vessels as older classes are decommissioned. Sovereign nations outsid e of the U.S. will continue to expand their fleets as they address national security concerns Activity in Asia and the Middle East to be robust as economic growth and a fundamental
under supply of power generation capacity continues to drive significant
investment in energy infrastructure projects Efficiency improvements will continue to drive demand in the world’s developed
economies Activity within the global crude oil market to remain favorable as
capacity constraints and increased global demand keep crude oil prices
elevated which drives further development of heavy oil fields where Colfax
products excel Growth in international trade and high demand
for crude oil should continue to create demand for container ships, bulk
carriers, tankers and supply vessels Serving Fast Growing Infrastructure Driven
End Markets Estimated Market Size Size Favorable Long Term Demand Driven by Global Infrastructure Build Market Expectations |
 10 EMEA ~ 1,000 Associates 2007 Sales (1) = $274mm Asia Pacific ~ 300 Associates 2007 Sales (1) = $83mm Extensive Global Sales, Distribution and Manufacturing Footprint ____________________ (1) Sales figures reflect sales destination. Excludes sales of $1mm to other
destinations. Americas ~ 700 Associates 2007 Sales (1) = $148mm % of Revenue: 29% % of Revenue: 54% % of Revenue: 16% LSC Houston Warren Corporate HQ Richmond Imo Kentucky Imo Monroe Sanford Aberdeen Houttuin Tushaco Vapi Tushaco Daman Colfax Wuxi Imo AB Stockholm Allweiler Gottmandingen Portland Valve Allweiler Tours Allweiler Radolfzell Allweiler Bottrop Fairmount Automation Expanding Global Footprint Allows Us to Serve Fast Growing, Developing Markets
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 11 Target Fast Growing Regions Capitalize on growth opportunities by offering regionally developed products and
solutions Standard packages of Imo & Allweiler products produced at our greenfield, Wuxi China facility for Commercial Marine Continue to invest in sales and marketing capabilities to more effectively serve local
Asia Pacific markets Leverage application expertise to design fluid handling solutions that cater to heavy
crude oil exploration in Latin America, Middle East and Russia Utilize Indian / Chinese low cost manufacturing to supply components to other Colfax
business units Assam, India Assam, India Shanghai, China Shanghai, China |
 12 Leading Brands Generating Aftermarket Sales and Services Est. 1860 Acq. 1998 Est. 1897 Acq. 1997 Est. 1929 Acq. 1998 Est. 1931 Acq. 1997 Est. 1973 Acq. 2004 Est. 1920 Acq. 2004 Est. 1967 Acq. 2005 Est. 1968 Acq. 2007 Est. 1996 Acq. 2007 Product history dating back to 1860 provides large installed base High quality, reliable products used in critical applications Tendency for customers to replace “like for like” products Significant aftermarket demand for replacement products, spare parts and repair & maintenance services Approximately 25% of Revenues were Derived from Aftermarket Sales and Services in
2007 |
 13 Continue to proactively engage with highly strategic targets Product, market and geographically focused searches Evaluate opportunistic bolt-on companies Pursue adjacent fluid handling acquisitions Continue to Pursue Strategic Acquisitions that Complement Our Platform Effective Selection and Integration of 12 Acquisitions Since 1995 Acquisition Criteria Acquisition Initiatives Acquire companies in the fluid handling industry Strong brand name recognition Leading market position Differentiated product technology / highly engineered product Complementary end market / geographic focus Attain double digit return on investment in the 3 rd year |
 14 Asbestos Update Claims arise from purchased components previously included in our products Significant solvent insurance coverage Bad faith lawsuit against insurance carriers increases costs in near term Estimated annual liability and related defense costs of $5 - $7 million before potential insurance asset adjustments 50,020 37,554 59,217 30,000 36,000 42,000 48,000 54,000 60,000 2005 2006 2007 Average Cost of Resolved Claims Unresolved Claims $6,194 $5,232 $8,896 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 2005 2006 2007 |
 15 21.6 million shares sold (11.9 million primary / 9.7 million secondary) 44.0 million shares outstanding post offering Primarily to repay a portion of existing debt, effective redemption of preferred stock
through conversion and sale of common, pay dividends and general corporate
purposes IPO Summary Shares Sold Use of Proceeds $18.00 per share IPO Price Began trading May 8, 2008 Completed offering May 13, 2008 Date $193.0 million Net Proceeds Key Ownership Founders Mitchell P. Rales and Steven M. Rales own ~44% Mitchell P. Rales is Chairman |
| Financial Overview * * * * * * * * |
 17 $309.7 $345.5 $393.6 $506.3 $0.0 $120.0 $240.0 $360.0 $480.0 $600.0 2004 2005 2006 2007 $39.6 $29.6 $138.5 $68.1 $0.0 $30.0 $60.0 $90.0 $120.0 $150.0 2004 2005 2006 2007 $41.0 $57.1 $64.8 $88.2 $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 2004 2005 2006 2007 Financial Performance Overview Revenue SG&A as a % of Revenue ____________________ Note: Dollars in millions. Refer to the Appendix for the Non-GAAP reconciliation. (1) Excludes legacy asbestos related expenses (income) of $29.4mm, $18.1mm, $33.8mm, and ($50.3mm) in 2004, 2005, 2006 and 2007 respectively. Excludes discontinued operations expenses (income) of ($56.5mm), ($0.6mm) and $1.4mm in 2004, 2005 and 2006 respectively. % Margin 13.2% 16.5% 16.5% 17.4% Adjusted EBITDA (1) EBITDA % Margin 22.0% 11.5% 7.5% 27.4% 25.0% 21.6% 20.4% 19.5% 0.0% 6.0% 12.0% 18.0% 24.0% 30.0% 2004 2005 2006 2007 555 bps of Improvement 11.8% 13.5% Acquisitions 1.4% 8.0% FX Translation 0.8% 7.1% Total Growth 13.9% 28.6% -- -- -- -- Existing Businesses 5.4% 6.1% 0.1% 11.6% |
 18 ____________________ Note: Dollars in millions. Historical Orders & Backlog $118.3 $179.3 $292.8 $224.7 $384.0 $0.0 $80.0 $160.0 $240.0 $320.0 $400.0 2005 2006 2007 - Q2 2007 Q2 2008 $140.6 $188.8 $271.4 $369.1 $0.0 $100.0 $200.0 $300.0 $400.0 Q2 2007 Q2 2008 YTD 2007 YTD 2008 Orders Backlog 18.8% Acquisitions 3.1% FX Translation 12.4% Total Growth -- -- -- -- 34.3% 21.4% 2.4% 12.2% 36.0% Existing Businesses -- -- -- -- Accelerating Order and Backlog Growth 47.8% 5.5% 17.6% 70.9% -- -- -- -- |
 19 $20.8 $27.5 $39.0 $49.5 $0.0 $20.0 $40.0 $60.0 Q2 2007 Q2 2008 - YTD 2007 YTD 2008 Financial Performance Overview ____________________ Note: Dollars in millions. Refer to the Appendix for the Non-GAAP reconciliation. % Margin 17.0% 17.0% Adjusted EBITDA Revenue $122.4 $161.4 $237.2 $292.1 $0.0 $100.0 $200.0 $300.0 Q2 2007 Q2 2008 - YTD 2007 YTD 2008 18.3% Acquisitions 0.8% FX Translation 12.7% Total Growth 31.9% -- -- -- Existing Businesses -- -- -- 16.4% 16.9% 10.5% 1.5% 11.2% 23.1% Consistent Track Record of Profitable Sales Growth |
 20 __________________ Note: Dollars in millions. Refer to the Appendix for the Non-GAAP reconciliation. Income Statement Summary Long Term Goals: Annual Sales of $1 Billion, Gross Profit Margin of 40% & EBITDA Margin of 20% Six Months Ended Delta 6/27/2008 6/29/2007 $ % Orders $369.1 $271.4 $97.7 36.0% Sales $292.1 $237.2 $54.9 23.1% Gross Profit $105.0 $81.9 $23.1 28.2% % of Sales 35.9% 34.5% Adjusted SG&A Expense $60.2 $48.5 $11.7 24.1% R&D Expense $3.0 $2.1 $0.9 42.9% Adjusted Operating Income $41.9 $31.3 $10.6 33.8% % of Sales 14.3% 13.2% Adjusted EBITDA $49.5 $39.0 $10.5 27.1% % of Sales 16.9% 16.4% Adjusted Net Income $24.0 $16.7 $7.3 43.9% % of Sales 8.2% 7.0% |
 21 Well Positioned for the Future Leading Brand Names Generating Aftermarket Sales and Services Experienced Management Team in Place to Grow Organically and Through Strategic Acquisitions Global Leader in Specialty Fluid Handling Products Proven Application Expertise in Solving Critical Customer Needs Serving Fast Growing Infrastructure Driven End Markets Significant Insider Ownership Post Offering |
| Appendix * * * * * * * |
 23 ____________________ Note: Dollars in thousands. Non-GAAP Reconciliation June 27, June 29, June 27, June 29, 2008 2007 2008 2007 EBITDA Net (loss) income (31,399) $ 4,841 $ (24,601) $ 10,879 $ Interest expense 3,236 4,458 7,733 9,216 (Benefit) provision for income taxes (12,679) 3,049 (9,101) 6,999 Depreciation and amortization 3,955 4,185 7,650 7,683 EBITDA (36,887) $ 16,533 $ (18,319) $ 34,777 $ EBITDA margin -22.9% 13.5% -6.3% 14.7% Adjusted EBITDA Net (loss) income (31,399) $ 4,841 $ (24,601) $ 10,879 $ Interest expense 3,236 4,458 7,733 9,216 (Benefit) provision for income taxes (12,679) 3,049 (9,101) 6,999 Depreciation and amortization 3,955 4,185 7,650 7,683 Initial public offering related costs 57,017 - 57,017 - Legacy legal adjustment 4,131 - 4,131 - Asbestos liability and defense (income) costs
(715) 558 (437) (1,747) Asbestos coverage litigation expense 3,970 3,678 7,109 5,931 Adjusted EBITDA 27,516 $ 20,769 $ 49,501 $ 38,961 $ Adjusted EBITDA margin 17.0% 17.0% 16.9% 16.4% Three Months Ended Six Months Ended |
 24 ____________________ Note: Dollars in thousands, except per share amounts. Non-GAAP Reconciliation June 27, June 29, June 27, June 29, 2008 2007 2008 2007 Three Months Ended Six Months Ended Adjusted Net Income and Adjusted Earnings per Share Net (loss) income (31,399) $ 4,841 $ (24,601) $ 10,879 $ Initial public offering related costs 57,017 - 57,017 - Legacy legal adjustment 4,131 - 4,131 - Asbestos liability and defense (income) costs
(715) 558 (437) (1,747) Asbestos coverage litigation expense 3,970 3,678 7,109 5,931 Interest adjustment to effect IPO at beginning of period 725 1,636 2,302 3,250 Tax adjustment to 34% effective rate (19,836) (1,630) (21,484) (1,607) Adjusted net income 13,893 $ 9,083 $ 24,037 $ 16,706 $ Adjusted net income margin 8.6% 7.4% 8.2% 7.0% Shares outstanding at closing of IPO 44,006,026 44,006,026 44,006,026 44,006,026 Adjusted net income per share - basic 0.32 $
0.21 $
0.55 $
0.38 $
Net (loss) income per share-basic and diluted in accordance with GAAP (1.01) $ 0.22 $
(0.99) $ 0.50 $
Adjusted Operating Income Operating (loss) income (40,842) $ 12,348 $ (25,969) $ 27,094 $ Initial public offering related costs 57,017 - 57,017 - Legacy legal adjustment 4,131 - 4,131 - Asbestos liability and defense (income) costs
(715) 558 (437) (1,747) Asbestos coverage litigation expense 3,970 3,678 7,109 5,931 Adjusted operating income 23,561 $ 16,584 $ 41,851 $ 31,278 $ Adjusted operating income margin 14.6% 13.5% 14.3% 13.2% |
 25 ____________________ Note: Dollars in thousands Non-GAAP Reconciliation Adjusted EBITDA Net income 64,882 $ 94 $
12,247 $ 57,306 $ Interest expense 19,246 14,186 9,026 6,918 Provision (benefit) for income taxes 39,147 3,866 6,907 (6,010) Depreciation and amortization 15,239 11,481 11,430 9,872 Legacy Asbestos (income) expenses (50,346) 33,816 18,112 29,412 Discontinued operations expense (income) - 1,397 (616) (56,489) Adjusted EBITDA 88,168 $ 64,840 $ 57,106 $ 41,009 $ 2007 2006 2005 2004 EBITDA Net (loss) income 64,882 $ 94 $
12,247 $ 57,306 $ Interest expense 19,246 14,186 9,026 6,918 (Benefit) provision for income taxes 39,147 3,866 6,907 (6,010) Depreciation and amortization 15,239 11,481 11,430 9,872 EBITDA 138,514 $ 29,627 $ 39,610 $ 68,086 $ |
 26 ____________________ Note: Dollars in thousands. Non-GAAP Reconciliation 6/27/2008 6/29/2007 Adjusted Selling, General and Administrative Expenses Selling, general and administrative expenses 64,283 $
48,516 $ Legacy legal adjustment (1) (4,131) - Adjusted selling, general and administrative
expenses 60,152 $
48,516 Six Months Ended (1) Charge related to a non-asbestos product liability case. |
 27 ____________________ Note: Dollars in millions. Non-GAAP Reconciliation $ % $ % Three Months Ended June 29, 2007 122.4 $ 140.6 $ Components of Growth: Organic Growth from Existing Businesses 22.4 18.3% 26.5 18.8% Acquisitions 1.0 0.8% 4.3 3.1% Foreign Currency Translation 15.6 12.7% 17.4 12.4% Total Growth 39.0 31.9% 48.2 34.3% Three Months Ended June 27, 2008 161.4 $ 188.8 $ $ % $ % Six Months Ended June 29, 2007 237.2 $ 271.4 $ Components of Growth: Organic Growth from Existing Businesses 24.8 10.5% 58.1 21.4% Acquisitions 3.5 1.5% 6.4 2.4% Foreign Currency Translation 26.6 11.2% 33.2 12.2% Total Growth 54.9 23.1% 97.7 36.0% Six Months Ended June 27, 2008 292.1 $ 369.1 $ Sales Orders Sales Orders |