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): January 9, 2009
Colfax
Corporation
(Exact
name of registrant as specified in its charter)
|
Delaware
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001-34045
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54-1887631
|
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(State
or other jurisdiction
|
(Commission
|
(I.R.S.
Employer
|
|
of
incorporation)
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File
Number)
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Identification
No.)
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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
January 9, 2009, Colfax Corporation issued a press release providing 2009
outlook and preliminary 2008 highlights. 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 January 9, 2009 to discuss its
2009 outlook and preliminary 2008 highlights, 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
|
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99.1
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Colfax
Corporation press release dated January 9, 2009, providing 2009 outlook
and preliminary 2008 highlights.
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|
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99.2
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Colfax
Corporation slides for January 9, 2009 conference call to discuss
2009 outlook and preliminary 2008
highlights.
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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.
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Colfax
Corporation
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||||
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Date: January
9, 2009
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By:
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/s/
JOHN A. YOUNG
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Name:
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John
A. Young
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|||
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Title:
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President
and Chief Executive Officer
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|||
4
EXHIBIT
INDEX
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99.1
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Colfax
Corporation press release dated January 9, 2009, providing 2009 outlook
and preliminary 2008 highlights.
|
|
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99.2
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Colfax
Corporation slides for January 9, 2009 conference call to discuss
2009 outlook and preliminary 2008
highlights.
|
5
Colfax
Provides 2009 Outlook and Preliminary 2008 Highlights
Richmond, VA — January 9, 2009 -
Colfax Corporation (NYSE: CFX), a global leader in engineered fluid
handling products and systems, announced today that it expects full-year 2009
net earnings in the range of $.80 to $.87 per share. The range for
adjusted net earnings is $1.10 to $1.17 per share and excludes the impact of
asbestos-related items. The company expects organic sales growth in
2009, which excludes the impact of foreign exchange rate fluctuations and
acquisitions, to be in the range of 1% to 3%.
The
company expects full year 2008 net sales to be approximately $605 million, an
increase of 19%. Organic sales growth for 2008 is expected to be
about 14%, in line with the company’s low double-digit organic growth
expectation for the year. Orders for the year increased 15% to
approximately $670 million. On an organic basis, the company expects
orders to be up 7% over 2007. The backlog on December 31, 2008 was
approximately $331 million.
“We are
expecting modest organic sales growth in 2009,” said John Young, president and
CEO of Colfax Corporation. “While we are entering the year with a
sizable backlog, we remain cautious about the second half of the year due to the
uncertainty related to the weak global economy and its potential impact on our
end markets. We believe we’re well positioned to execute on our
long-term strategies given our broad product portfolio, global footprint in
diverse markets and unmatched application expertise. We believe these
strengths, combined with our solid financial condition, will enable us to
perform successfully in a challenging economic environment.”
Conference
Call and Webcast
Colfax
will host a conference call to review the outlook and answer questions on Friday
January 9, 2009 at 8:00 a.m. EST. The call will be open to the public through
719-325-4749 or 877-723-9502 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 our next
quarterly earnings call. In addition, a replay of this call will be available
until approximately January 23, 2009. The replay number is 888-203-1112 (or
719-457-0820) for international participants), and the access code is
4979159.
Non-GAAP
Financial Measures
Colfax
has provided financial information that has not been prepared in accordance with
GAAP. These non-GAAP financial measures are adjusted net income per share,
organic sales growth and organic order growth. Adjusted net income per
share excludes asbestos liability and defense costs (income) and asbestos
coverage litigation expense. 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.
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.
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 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.
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Colfax
Corporation
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||||||||
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Reconciliation
of GAAP to Non-GAAP Financial Measures
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||||||||
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(amounts
in dollars)
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||||||||
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(preliminary
unaudited)
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||||||||
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EPS Range
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||||||||
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Projected
net income per share - fully diluted
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$ | 0.80 | $ | 0.87 | ||||
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Asbestos
coverage litigation
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0.28 | 0.28 | ||||||
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Asbestos
liability and defense costs
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0.16 | 0.16 | ||||||
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Income
tax benefit at 32%
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(0.14 | ) | (0.14 | ) | ||||
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Projected
adjusted net income per share - fully diluted
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$ | 1.10 | $ | 1.17 | ||||
3
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Colfax
Corporation
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||||||||||||||||
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Sales
and Order Growth
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||||||||||||||||
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(amounts
in millions)
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||||||||||||||||
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(preliminary
unaudited)
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||||||||||||||||
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Sales
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Orders
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|||||||||||||||
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$
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%
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$
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%
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|||||||||||||
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Twelve
Months Ended December 31, 2007
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$ | 506 | $ | 582 | ||||||||||||
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Components
of Growth:
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||||||||||||||||
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Organic
Growth from Existing Businesses
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69 | 14 | % | 41 | 7 | % | ||||||||||
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Acquisitions
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6 | 1 | % | 12 | 2 | % | ||||||||||
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Foreign
Currency Translation
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24 | 5 | % | 35 | 6 | % | ||||||||||
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Total
Growth
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98 | 19 | % | 89 | 15 | % | ||||||||||
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Twelve
Months Ended December 31, 2008
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$ | 605 | $ | 670 | ||||||||||||
CONTACT: Investors,
Mitzi Reynolds, Vice President of Investor Relations, +1-804-327-5689,
investors@colfaxcorp.com
2009 Outlook Call
January 9, 2009
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
Net sales of
approximately $605 million, an increase of 19% (organic growth
of
14%)
14%)
Fourth quarter net sales of
approximately $159 million, an increase of 11% (organic growth
of 18%)
of 18%)
Orders of approximately
$670 million, an increase of 15% (organic growth of 7%)
Fourth quarter orders of
approximately $127 million, a decline of 19% (organic decline
of
16%)
16%)
Backlog of approximately
$331 million at 12/31/08
Strong balance sheet and
cash flow
IPO in May – net
proceeds of $193 million
Strong performance in
2008
2008 Highlights
(All 2008
financial numbers are estimates)
2
Adjusted EPS for 2009 of $1.10 to
$1.17
2009 Outlook
Summary
$585 million
to
$570 million
2009 Total
3%
to
1%
2009 Organic growth
(1)
Revenue Range
$2.5 million
Incremental public company
costs
43.3 million
Outstanding
shares
$8 million
Interest expense
32%
Tax rate
$1.41
Euro
$7 million
Asbestos liability and defense
(income) costs
$12 million
Asbestos coverage
litigation
Assumptions
$1.17
to
$1.10
2009 Adjusted net income per share
(2)
$0.87
to
$0.80
2009 Net income per
share
EPS Range
(1)
Excludes impact of foreign exchange
rate fluctuations and acquisitions
(2)
Excludes impact of asbestos coverage
litigation and asbestos liability and defense (income) costs
(See Appendix for Non-GAAP
reconciliation)
3
Strong Financial
Condition
Debt to adjusted EBITDA < 1 times
as of the end of the third quarter
(covenant – 3.25 to 1.00)
Fixed charge coverage > 6 times
as of the end of the third quarter
(covenant – 1.5 to 1.0)
Approximately $133 million available
on revolver at year end (expires in 2013)
Approximately $25 million in cash as
of 1/8/09
Strong balance sheet and credit
availability provide flexibility
4
Market Trends
International trade and demand for
bulk commodities and oil continuing to
drive new ship construction
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
aftermarket business
Declining orders and risk of
potential cancellations / project delays
Our Plan for 2009
Expand sales of high spec marine
vessels such as FPSOs and bitumen tankers
Focus on developing and expanding
sales of new products such as Optiline,
which eliminates seal leakage
which eliminates seal leakage
Increase aftermarket sales;
foremarket sales have been robust over the last 5
years
years
Colfax Estimated
08 Sales Split
08 Sales Split
24%
Comm.
Marine
Comm.
Marine
Commercial Marine Market
Perspective
Executing strategies to drive
profitable sales growth
5
Colfax Estimated
08 Sales Split
08 Sales Split
15%
O&G
O&G
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
and increase efficiency
Application expertise critical to
winning large project orders
Volatile oil prices and economic
downturn resulting in project delays
Our Plan for 2009
Support and expand customer base
globally
Open sales and engineering office in
Bahrain to support growth in exploration
of heavy oil fields in the Middle East
of heavy oil fields in the Middle East
Focus on providing system solutions
which offer total savings of ownership
when considering capital, energy and maintenance costs over several years
when considering capital, energy and maintenance costs over several years
Oil & Gas Market
Perspective
Strong product portfolio capable of
solving needs of evolving oil & gas market
6
Colfax Estimated
08 Sales Split
08 Sales Split
13%
Power
Gen.
Power
Gen.
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
employed to satisfy growing global demand
Our Plan for 2009
Support and expand customer base
including OEMs and end users
Participate in developing energy
infrastructure projects in less developed
countries such as Iraq
countries such as Iraq
Power Generation Market
Perspective
Leading supplier of lubrication
solutions to power generation OEMs
7
Developing innovative fluid handling
products and systems to drive future growth
Colfax Estimated
08 Sales Split
08 Sales Split
6%
Navy
Navy
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
reduce operating costs
Our Plan for 2009
Support U.S. Navy expansion programs
including plans for 8 new submarines
over the next 10 years
over the next 10 years
Develop innovative control solutions
for mission and safety critical processes
and machinery in harsh environments
and machinery in harsh environments
Continue to develop Smart Valve
technology which reduces operating costs
and improves efficiency
and improves efficiency
Global Navy Market
Perspective
8
Leading supplier of highly
engineered fluid handling products and systems with global reach
Colfax Estimated
08 Sales Split
08 Sales Split
42%
General
Industrial
General
Industrial
Market Trends
Global economic development driving
increased capital investment
Developing regions embracing
engineered products and solutions that
reduce costs and increase efficiency
reduce costs and increase efficiency
Global footprint and channel
optimization required to cover broad end
market applications
market applications
Uncertain economy impacting some end
markets
Our Plan for 2009
Continue to expand and diversify
customer base
Develop solutions that improve
efficiency
General Industrial
Perspective
9
2009 Priorities
Continue to invest in our growth
initiatives, breakthrough opportunities are critical
to our future growth
to our future growth
Pursue acquisitions that will
support organic growth initiatives, strengthen
relationships with channel partners and customers, and solidify our competitive
position in targeted end markets
relationships with channel partners and customers, and solidify our competitive
position in targeted end markets
Maintain profitability by reducing
operating expenses and controlling costs
throughout businesses
throughout businesses
Well positioned to execute long-term
strategies
10
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 Growing
Infrastructure Driven End
Markets
Infrastructure Driven End
Markets
Strong Financial Condition
11
Appendix
12
Disclaimer
Colfax has provided financial
information that has not been prepared in accordance with GAAP. These
non-GAAP financial measures are adjusted net income per share, organic sales growth and organic
order growth. Adjusted net income per share excludes asbestos liability and defense costs
(income) and asbestos coverage litigation expense. 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.
non-GAAP financial measures are adjusted net income per share, organic sales growth and organic
order growth. Adjusted net income per share excludes asbestos liability and defense costs
(income) and asbestos coverage litigation expense. 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.
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.
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.
13
|
(amounts
in dollars)
|
||||||||
|
(preliminary
unaudited)
|
||||||||
|
EPS Range
|
||||||||
|
Projected
net income per share - fully diluted
|
$ | 0.80 | $ | 0.87 | ||||
|
Asbestos
coverage litigation
|
0.28 | 0.28 | ||||||
|
Asbestos
liability and defense costs
|
0.16 | 0.16 | ||||||
|
Income
tax benefit at 32%
|
(0.14 | ) | (0.14 | ) | ||||
|
Projected
adjusted net income per share - fully diluted
|
$ | 1.10 | $ | 1.17 | ||||
|
(amounts
in millions)
|
||||||||||||||||
|
(preliminary
unaudited)
|
||||||||||||||||
|
Sales
|
Orders
|
|||||||||||||||
|
$
|
%
|
$
|
%
|
|||||||||||||
|
Three
Months Ended December 31, 2007
|
$ | 144 | $ | 156 | ||||||||||||
|
Components
of Growth:
|
||||||||||||||||
|
Organic
Growth from Existing Businesses
|
25 | 18 | % | (25 | ) | -16 | % | |||||||||
|
Acquisitions
|
1 | 1 | % | 3 | 2 | % | ||||||||||
|
Foreign
Currency Translation
|
(11 | ) | -8 | % | (8 | ) | -5 | % | ||||||||
|
Total
Growth
|
15 | 11 | % | (29 | ) | -19 | % | |||||||||
|
Three
Months Ended December 31, 2008
|
$ | 159 | $ | 127 | ||||||||||||
|
Sales
|
Orders
|
|||||||||||||||
|
$
|
%
|
$
|
%
|
|||||||||||||
|
Twelve
Months Ended December 31, 2007
|
$ | 506 | $ | 582 | ||||||||||||
|
Components
of Growth:
|
||||||||||||||||
|
Organic
Growth from Existing Businesses
|
69 | 14 | % | 41 | 7 | % | ||||||||||
|
Acquisitions
|
6 | 1 | % | 12 | 2 | % | ||||||||||
|
Foreign
Currency Translation
|
24 | 5 | % | 35 | 6 | % | ||||||||||
|
Total
Growth
|
98 | 19 | % | 89 | 15 | % | ||||||||||
|
Twelve
Months Ended December 31, 2008
|
$ | 605 | $ | 670 | ||||||||||||
