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):
November 5, 2008
Colfax
Corporation
(Exact
name of registrant as specified in its charter)
|
Delaware
|
001-34045
|
54-1887631
|
|
(State
or other jurisdiction
|
(Commission
|
(I.R.S.
Employer
|
|
of
incorporation)
|
File
Number)
|
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))
Item
2.02. Results of Operations and Financial Condition.
On
November 5, 2008, Colfax Corporation issued a press release reporting financial
results for the quarter ended September 26, 2008. A copy of Colfax Corporation’s
press release is attached to this report as Exhibit 99.1 and is
incorporated in this report by reference. Colfax Corporation has scheduled
a
conference call for 8:00 a.m. EST on November 5, 2008 to discuss its financial
results, and slides for that call are attached to this report as Exhibit 99.2
and are incorporated in this report by reference.
2
Item
9.01. Financial Statements and Exhibits.
(d) Exhibits
|
99.1
|
Colfax
Corporation press release dated November 5, 2008, reporting financial
results for the quarter ended September 26,
2008.
|
|
99.2
|
Colfax
Corporation slides for November 5, 2008 conference call for financial
results for the quarter ended September 26,
2008.
|
3
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:
November 5, 2008
|
By:
|
/s/
JOHN A. YOUNG
|
|
|
|
|
Name:
|
John
A. Young
|
||
|
|
Title:
|
President
and Chief Executive Officer
|
||
4
EXHIBIT
INDEX
|
99.1
|
Colfax
Corporation press release dated November 5, 2008, reporting financial
results for the quarter ended September 26,
2008.
|
|
99.2
|
Colfax
Corporation slides for November 5, 2008 conference call for financial
results for the quarter ended September 26,
2008.
|
COLFAX
REPORTS THIRD QUARTER 2008 FINANCIAL RESULTS
Board
Approves Stock Repurchase Program
RICHMOND,
VA., November 5, 2008 - Colfax Corporation (NYSE: CFX), a global leader in
engineered fluid handling products and systems, today announced financial
results for the third quarter ended September 26, 2008. On a year-over-year
basis, highlights for the quarter and the first nine months of 2008 include:
Third
quarter of 2008 (all
comparisons versus the third quarter of 2007, unless otherwise
noted)
| • |
Net
income of $13.7 million (31 cents per share – basic and diluted);
Adjusted net income (as defined below) of $12.1 million (28 cents
per
share), an increase of 34.4%
|
| • |
Net
sales of $153.5 million, an increase of 22.4%; Organic sales growth
(as
defined below) of 14.3%
|
| • |
Operating
income of $20.9 million; Adjusted operating income (as defined below)
of
$20.3 million, an increase of 21.5%
|
| • |
EBITDA
(as defined below) of $24.6 million; Adjusted EBITDA (as defined
below) of
$24.0 million, an increase of 18.6%
|
| • |
Third
quarter orders of $173.8 million, an increase of 13.2%; Organic order
growth (as defined below) of 5.7%
|
| • |
Backlog
of $383.1 million at period end
|
Year-to-date
2008 (all
comparisons versus the year-to-date 2007, unless otherwise noted)
| • |
Net
loss of $10.9 million (43 cents per share – basic and diluted);
Adjusted net income (as defined below) of $36.2 million (82 cents
per
share), an increase of 40.6%
|
| • |
Net
sales of $445.5 million, an increase of 22.9%; Organic sales growth
(as
defined below) of 11.8%
|
| • |
Operating
loss of $5.0 million; Adjusted operating income (as defined below)
of
$62.2 million, an increase of 29.5%
|
| • |
EBITDA
(as defined below) of $6.3 million; Adjusted EBITDA (as defined below)
of
$73.5 million, an increase of 24.2%
|
| • |
Record
orders for the nine month period of $542.9 million, an increase of
27.7%;
Organic order growth (as defined below) of
15.7%
|
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
are
pleased with our third quarter performance,” said John Young, President and CEO
of Colfax Corporation. “We experienced organic sales growth across all of our
end markets, most notably in commercial marine and power generation. With our
recent order activity and current backlog, we are on target to meet our low
double-digit organic sales growth goal for the year and expect to have a strong
fourth quarter. Longer term, we believe we are well positioned as we enter
2009
with a diverse backlog and a strong balance sheet. The activity levels in our
end markets remain sound; however, we’re closely monitoring the impact of the
recent economic uncertainty on our businesses.”
1
The
Company also announced today that its board of directors has authorized the
repurchase of up to $20 million of the Company’s common stock on the open market
or in privately negotiated transactions. The timing and amount of any shares
repurchased will be determined by the Company’s management based on its
evaluation of market conditions and other factors. The repurchase program will
be funded using the Company’s working capital. The Company has approximately 44
million shares outstanding.
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 Wednesday, November 5, 2008 at 8:00 a.m. EST. The call will be
open
to the public through 719-325-4906 or 877-440-5807and 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 November 20, 2008. The replay
number in the U.S. is 888-203-1112 and internationally it is 719-457-0820,
and
the access code is 9343586.
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
2
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.
###
Contact:
Mitzi
Reynolds, Vice President, Investor Relations, Colfax Corporation
804-327-5689
3
Colfax
Corporation
Condensed
Consolidated Statement of Operations
(amounts
in thousands, except per share data)
(unaudited)
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||
|
September 26, 2008
|
September 28, 2007
|
September 26, 2008
|
September 28, 2007
|
||||||||||
|
Net
sales
|
$
|
153,461
|
$
|
125,361
|
$
|
445,543
|
$
|
362,602
|
|||||
|
Cost
of sales
|
98,983
|
80,849
|
286,110
|
236,226
|
|||||||||
|
Gross
profit
|
54,478
|
44,512
|
159,433
|
126,376
|
|||||||||
|
Initial
public offering related costs
|
-
|
-
|
57,017
|
-
|
|||||||||
|
Selling,
general and administrative expenses
|
33,233
|
26,761
|
97,516
|
75,277
|
|||||||||
|
Research
and development expenses
|
1,478
|
1,005
|
4,430
|
3,075
|
|||||||||
|
Asbestos
liability and defense (income) costs
|
(6,312
|
)
|
(30,285
|
)
|
(6,749
|
)
|
(32,032
|
)
|
|||||
|
Asbestos
coverage litigation expenses
|
5,148
|
2,387
|
12,257
|
8,318
|
|||||||||
|
Operating
income (loss)
|
20,931
|
|
44,644
|
(5,038
|
)
|
71,738
|
|||||||
|
Interest
expense
|
1,951
|
5,200
|
9,684
|
14,416
|
|||||||||
|
Income
(loss) before income taxes
|
18,980
|
|
39,444
|
(14,722
|
)
|
57,322
|
|||||||
|
Provision
(benefit) for income taxes
|
5,329
|
|
14,433
|
(3,772
|
)
|
21,432
|
|||||||
|
Net
income (loss)
|
$
|
13,651
|
|
$
|
25,011
|
$
|
(10,950
|
)
|
$
|
35,890
|
|||
|
Net
income (loss) available to common shareholders per share—basic and
diluted
|
$
|
0.31
|
$
|
1.14
|
$
|
(0.43
|
)
|
$
|
1.02
|
||||
4
Colfax
Corporation
Reconciliation
of GAAP to non-GAAP Financial Measures
(amounts
in thousands, except per share data)
(unaudited)
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||
|
September 26,
|
September 28,
|
September 26,
|
September 28,
|
||||||||||
|
2008
|
2007
|
2008
|
2007
|
||||||||||
|
EBITDA
|
|||||||||||||
|
Net
income (loss)
|
$
|
13,651
|
$
|
25,011
|
$
|
(10,950
|
)
|
$
|
35,890
|
||||
|
Interest
expense
|
1,951
|
5,200
|
9,684
|
14,416
|
|||||||||
|
Provision
(benefit) for income taxes
|
5,329
|
14,433
|
(3,772
|
)
|
21,432
|
||||||||
|
Depreciation
and amortization
|
3,695
|
3,522
|
11,345
|
11,205
|
|||||||||
|
EBITDA
|
$
|
24,626
|
$
|
48,166
|
$
|
6,307
|
$
|
82,943
|
|||||
|
EBITDA
margin
|
16.0
|
%
|
38.4
|
%
|
1.4
|
%
|
22.9
|
%
|
|||||
|
Adjusted
EBITDA
|
|||||||||||||
|
Net
income (loss)
|
$
|
13,651
|
$
|
25,011
|
$
|
(10,950
|
)
|
$
|
35,890
|
||||
|
Interest
expense
|
1,951
|
5,200
|
9,684
|
14,416
|
|||||||||
|
Provision
(benefit) for income taxes
|
5,329
|
14,433
|
(3,772
|
)
|
21,432
|
||||||||
|
Depreciation
and amortization
|
3,695
|
3,522
|
11,345
|
11,205
|
|||||||||
|
IPO-related
costs
|
-
|
-
|
57,017
|
-
|
|||||||||
|
Legacy
legal adjustment
|
-
|
-
|
4,131
|
-
|
|||||||||
|
Due
diligence costs
|
582
|
-
|
582
|
-
|
|||||||||
|
Asbestos
liability and defense (income) costs
|
(6,312
|
)
|
(30,285
|
)
|
(6,749
|
)
|
(32,032
|
)
|
|||||
|
Asbestos
coverage litigation expense
|
5,148
|
2,387
|
12,257
|
8,318
|
|||||||||
|
Adjusted
EBITDA
|
$
|
24,044
|
$
|
20,268
|
$
|
73,545
|
$
|
59,229
|
|||||
|
Adjusted
EBITDA margin
|
15.7
|
%
|
16.2
|
%
|
16.5
|
%
|
16.3
|
%
|
|||||
|
Adjusted
Net Income and Adjusted Earnings per Share
|
|||||||||||||
|
Net
income (loss)
|
$
|
13,651
|
$
|
25,011
|
$
|
(10,950
|
)
|
$
|
35,890
|
||||
|
IPO-related
costs
|
-
|
-
|
57,017
|
-
|
|||||||||
|
Legacy
legal adjustment
|
-
|
-
|
4,131
|
-
|
|||||||||
|
Due
diligence costs
|
582
|
-
|
582
|
-
|
|||||||||
|
Asbestos
liability and defense (income) costs
|
(6,312
|
)
|
(30,285
|
)
|
(6,749
|
)
|
(32,032
|
)
|
|||||
|
Asbestos
coverage litigation expense
|
5,148
|
2,387
|
12,257
|
8,318
|
|||||||||
|
Interest
adjustment to effect IPO at beginning of period
|
-
|
2,143
|
2,302
|
5,393
|
|||||||||
|
Tax
adjustment to 34% effective rate
|
(926
|
)
|
9,779
|
(22,410
|
)
|
8,172
|
|||||||
|
Adjusted
net income
|
$
|
12,143
|
$
|
9,035
|
$
|
36,180
|
$
|
25,741
|
|||||
|
Adjusted
net income margin
|
7.9
|
%
|
7.2
|
%
|
8.1
|
%
|
7.1
|
%
|
|||||
|
Shares
outstanding at closing of IPO
|
44,006,026
|
44,006,026
|
44,006,026
|
44,006,026
|
|||||||||
|
Adjusted
net income per share
|
$
|
0.28
|
$
|
0.21
|
$
|
0.82
|
$
|
0.58
|
|||||
|
Net
income (loss) per share-basic
|
|||||||||||||
|
and
diluted in accordance with GAAP
|
$
|
0.31
|
$
|
1.14
|
$
|
(0.43
|
)
|
$
|
1.02
|
||||
|
Adjusted
Operating Income
|
|||||||||||||
|
Operating
income (loss)
|
$
|
20,931
|
$
|
44,644
|
$
|
(5,038
|
)
|
$
|
71,738
|
||||
|
IPO-related
costs
|
-
|
-
|
57,017
|
-
|
|||||||||
|
Legacy
legal adjustment
|
-
|
-
|
4,131
|
-
|
|||||||||
|
Due
diligence costs
|
582
|
-
|
582
|
-
|
|||||||||
|
Asbestos
liability and defense (income) costs
|
(6,312
|
)
|
(30,285
|
)
|
(6,749
|
)
|
(32,032
|
)
|
|||||
|
Asbestos
coverage litigation expense
|
5,148
|
2,387
|
12,257
|
8,318
|
|||||||||
|
Adjusted
operating income
|
$
|
20,349
|
$
|
16,746
|
$
|
62,200
|
$
|
48,024
|
|||||
|
Adjusted
operating income margin
|
13.3
|
%
|
13.4
|
%
|
14.0
|
%
|
13.2
|
%
|
|||||
5
Colfax
Corporation
Sales and
Order Growth
(amounts
in millions)
(unaudited)
|
(Amounts in millions)
|
Sales
|
Orders
|
|||||||||||
|
$
|
%
|
$
|
%
|
||||||||||
|
Three
Months Ended September 28, 2007
|
$
|
125.4
|
$
|
153.6
|
|||||||||
|
|
|||||||||||||
|
Components
of Growth:
|
|||||||||||||
|
Existing
Businesses
|
17.9
|
14.3
|
%
|
8.7
|
5.7
|
%
|
|||||||
|
Acquisitions
|
1.2
|
1.0
|
%
|
2.2
|
1.4
|
%
|
|||||||
|
Foreign
Currency Translation
|
9.0
|
7.1
|
%
|
9.3
|
6.0
|
%
|
|||||||
|
Total
Growth
|
28.1
|
22.4
|
%
|
20.2
|
13.2
|
%
|
|||||||
|
|
|||||||||||||
|
Three
Months Ended September 26, 2008
|
$
|
153.5
|
$
|
173.8
|
|||||||||
|
(Amounts in millions)
|
Sales
|
Orders
|
|||||||||||
|
$
|
%
|
$
|
%
|
||||||||||
|
Nine
Months Ended September 28, 2007
|
$
|
362.6
|
$
|
425.0
|
|||||||||
|
|
|||||||||||||
|
Components
of Growth:
|
|||||||||||||
|
Existing
Businesses
|
42.7
|
11.8
|
%
|
66.8
|
15.7
|
%
|
|||||||
|
Acquisitions
|
4.7
|
1.3
|
%
|
8.6
|
2.0
|
%
|
|||||||
|
Foreign
Currency Translation
|
35.5
|
9.8
|
%
|
42.5
|
10.0
|
%
|
|||||||
|
Total
Growth
|
82.9
|
22.9
|
%
|
117.9
|
27.7
|
%
|
|||||||
|
Nine
Months Ended September 26, 2008
|
$
|
445.5
|
$
|
542.9
|
|||||||||
6
Q3
2008 Earnings
Call
November
5,
2008
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 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 presentation speaks only as of this date. Colfax disclaims any duty to update the
information herein.
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 presentation speaks only as of this date. Colfax disclaims any duty to update the
information herein.
Forward-Looking
Statements
1
Adjusted
net income of $12.1 million
(28 cents per share), an increase of 34.4%
Net
sales of $153.5 million, an
increase of 22.4% (organic growth of 14.3%)
Adjusted
operating income of $20.3
million, an increase of 21.5%
Adjusted
EBITDA of $24.0 million, an
increase of 18.6%
Third
quarter orders of $173.8
million, an increase of 13.2% (organic growth of 5.7%)
Record
backlog of $383.1
million
Well
positioned for strong
performance
Q3
2008
Highlights
2
Adjusted
net income of $36.2 million
(82 cents per share), an increase of 40.6%
Net
sales of $445.5 million, an
increase of 22.9% (organic growth of 11.8%)
Adjusted
operating income of $62.2
million, an increase of 29.5%
Adjusted
EBITDA of $73.5 million, an
increase of 24.2%
Orders
of $542.9 million, an
increase of 27.7% (organic growth of 15.7%)
Well
positioned for strong
performance
YTD
2008
Highlights
3
____________________
Note:
Dollars in
millions.
Orders
Backlog
5.7%
Acquisitions
1.4%
FX
Translation
6.0%
Total
Growth
--
--
--
13.2%
15.7%
2.0%
10.0%
27.7%
Existing
Businesses
Businesses
--
--
--
Accelerating
order and backlog
growth
38.8%
5.1%
1.8%
45.7%
--
--
--
Historical
Orders &
Backlog
4
%
Margin
16.2%
15.7%
Adjusted
EBITDA (1)
Revenue
14.3%
Acquisitions
1.0%
FX
Translation
7.1%
Total
Growth
22.4%
--
--
--
Existing
Businesses
Businesses
--
--
--
16.3%
16.5%
11.8%
1.3%
9.8%
22.9%
Consistent
track record of
profitable sales growth
Financial
Performance
Overview
(1)
Refer
to Appendix for Non-GAAP
reconciliation.
__________________
Note:
Dollars in
millions.
5
Q3
2008
Sales: $153.5 million
Q3
2008
Orders: $173.8 million
Well
positioned in five attractive
and diverse end markets
Q3
2008 Sales and Orders by
End Market
6
YTD
2008
Sales: $445.5 million
YTD
2008
Orders: $542.9 million
Well
positioned in five attractive
and diverse end markets
YTD
2008 Sales and Orders by
End Market
7
Q3
2008
Year-Over-Year Results
Orders
up 4.1% year-over-year (-3.7%
organic growth)
Sales
up 31.8% year-over-year (19.5%
organic growth)
YTD
2008
Year-Over-Year Results
Orders
up 37.5% year-over-year
(22.1% organic growth)
Sales
up 25.2% year-over-year (11.2%
organic growth)
Market
Trends
Growth
in international trade and
demand for bulk commodities and oil
continuing to drive new ship construction
continuing to drive new ship construction
Aging
fleet, environmental
regulations requiring ship owners to upgrade or
replace ships
replace ships
Local
presence required to
effectively serve customers and capture aftermarket
business
business
Executing
strategies to drive
profitable sales growth
Colfax
Q3 08
Orders Split
Orders Split
22%
Comm.
Marine
Comm.
Marine
Colfax
Q3 08
Sales Split
Sales Split
29%
Comm.
Marine
Comm.
Marine
Commercial
Marine Market
Perspective
8
Strong
product portfolio capable of
solving needs of evolving oil & gas market
Colfax
Q3 08
Orders Split
Orders Split
17%
O&G
O&G
Colfax
Q3 08
Sales Split
Sales Split
13%
O&G
O&G
Q3
2008
Year-Over-Year Results
Orders
up 41.8% year-over-year
(36.5% organic growth)
Sales
up 3.3% year-over-year (0.7%
organic growth)
YTD
2008
Year-Over-Year Results
Orders
up 30.4% year-over-year
(23.1% organic growth)
Sales
down 2.2% year-over-year
(-7.6% organic growth)
Market
Trends
Capacity
constraints and global
demand spurring heavy oil exploration,
transport and processing
transport and processing
Customers
focusing more on “total
cost of ownership” to reduce downtime and
increase efficiency
increase efficiency
Application
expertise critical to
winning large project orders
Oil
&
Gas
Market
Perspective
9
Leading
supplier of lubrication
solutions to power generation OEMs
Colfax
Q3 08
Orders Split
Orders Split
16%
Power
Gen.
Power
Gen.
Colfax
Q3 08
Sales Split
Sales Split
11%
Power
Gen.
Power
Gen.
Q3
2008
Year-Over-Year Results
Orders
up 10.7% year-over-year (4.5%
organic growth)
Sales
up 23.8% year-over-year (19.3%
organic growth)
YTD
2008
Year-Over-Year Results
Orders
up 19.2% year-over-year
(10.8% organic growth)
Sales
up 48.9% year-over-year (37.7%
organic growth)
Market
Trends
Economic
growth in Asia and Middle
East driving investment in energy
infrastructure projects
infrastructure projects
Aging
power infrastructure in mature
markets creating upgrade projects to
increase efficiency and lower operating costs
increase efficiency and lower operating costs
Multiple
forms of power generation
(gas, coal, hydro, nuclear) being employed
to satisfy growing global demand
to satisfy growing global demand
Power
Generation Market
Perspective
10
Developing
innovative fluid handling
products and systems to drive future growth
Colfax
Q3 08
Orders Split
Orders Split
6%
Navy
Navy
Colfax
Q3 08
Sales Split
Sales Split
5%
Navy
Navy
Q3
2008
Year-Over-Year Results
Orders
up 45.7% year-over-year
(12.0% organic growth)
Sales
up 40.2% year-over-year (19.3%
organic growth)
YTD
2008
Year-Over-Year Results
Orders
up 50.4% year-over-year
(17.4% organic growth)
Sales
down 2.9% year-over-year
(-18.8% organic growth)
Market
Trends
New
ships replacing older
decommissioned vessels in the U.S.
Sovereign
navies around the world
expanding fleets to address heightened
national security level concerns
national security level concerns
Increased
demand for integrated
fluid handling systems and solutions to reduce
operating costs
operating costs
Global
Navy Market
Perspective
11
Leading
supplier of highly
engineered fluid handling products and systems with global reach
Colfax
Q3 08
Orders Split
Orders Split
Colfax
Q3 08
Sales Split
Sales Split
42%
General
Industrial
General
Industrial
Q3
2008
Year-Over-Year Results
Orders
up 6.8% year-over-year (1.0%
organic growth)
Sales
up 21.3% year-over-year (14.2%
organic growth)
YTD
2008
Year-Over-Year Results
Orders
up 20.5% year-over-year
(10.7% organic growth)
Sales
up 27.9% year-over-year (17.2%
organic growth)
Market
Trends
Global
economic development driving
increased capital investment
Developing
regions embracing
engineered products and solutions that reduce
costs and increase efficiency
costs and increase efficiency
Global
footprint and channel
optimization required to cover broad end market
applications
applications
39%
General
Industrial
General
Industrial
General
Industrial
Perspective
12
Refer
to Appendix for Non-GAAP
reconciliation.
__________________
Note:
Dollars in
millions.
Income
Statement
Summary
13
Refer
to Appendix for Non-GAAP
reconciliation.
__________________
Note:
Dollars in
millions.
Income
Statement
Summary
14
____________________
Note:
Dollars in
millions.
Statement
of Cash Flows
Summary
15
Well
Positioned for the
Future
Leading
Brand Names
Generating Aftermarket
Generating Aftermarket
Sales
and
Services
Experienced
Management
Team in Place to Grow
Organically and Through
Strategic Acquisitions
Team in Place to Grow
Organically and Through
Strategic Acquisitions
Global
Leader in Specialty
Fluid Handling Products
Fluid Handling Products
Proven
Application
Expertise
in
Solving
Critical
Customer Needs
Serving
Fast
Growing
Infrastructure
Driven
End
Markets
CBS-Driven
Culture Focused
on Profitable Sales Growth
on Profitable Sales Growth
16
Appendix
17
Adjusted
net income, adjusted net
income per share, adjusted operating income, EBITDA, adjusted
EBITDA, adjusted selling, general and administrative expenses, organic sales growth and organic
order growth are non-GAAP financial measures. 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 selling, general and administrative
expenses exclude certain legacy legal charges and certain due diligence 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.
EBITDA, adjusted selling, general and administrative expenses, organic sales growth and organic
order growth are non-GAAP financial measures. 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 selling, general and administrative
expenses exclude certain legacy legal charges and certain due diligence 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.
Disclaimer
18
