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): May 22, 2009
 

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
(Registrants 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 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.
 
 
 
 
 
 
 
 
 
2

 
 
Item 9.01 Financial Statements and Exhibits.

(d)           Exhibits

 
99.1
Colfax Corporation investor presentation slides

 
 
 
 
 
 
 
 
 
 

 
 
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: May 22, 2009
By:
/s/ JOHN A. YOUNG
 
 
Name:
John A. Young
 
Title:
President and Chief Executive Officer
     
 
 
 
 
 
 
 
 
 
 

 
 
4

 
 
EXHIBIT INDEX

 
99.1
Colfax Corporation investor presentation slides.


 
 
 
 
 
 
 
 
 
 

 
 
5

 

Investor Presentation

May 2009

Exhibit 99.1

 

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 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
presentation speaks only as of this date.  Colfax disclaims any duty to update the information herein.

Forward-Looking Statements

1

 

  2008 revenue of
$605 million

  ~2,100 associates
worldwide

  15 principal
production facilities in
7 countries

  Over 300 direct
sales and marketing
associates

  More than 450
authorized distributors
in approximately 80
countries

  Headquartered in
Richmond, VA

Colfax is strategically focused on serving key infrastructure end markets in the fluid handling industry

2 & 3 Screw

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

Company Overview

2

 

  Founded in 1995

  John Young, President & CEO, was an original founder

  Equity capital provided by Mitch and Steve Rales, founders of Danaher (NYSE: DHR)

  Targeted global industrial companies with strong brands

  12 acquisitions, 5 divestitures

  Exclusively focused on fluid handling industry

  Proven, experienced management team

  Began trading on the NYSE in May 2008

There are approximately 5,000 pump companies globally and Colfax is in the top 15

Background

3

 

POLICY DEPLOYMENT

On Time Delivery - Products and Services

Customer

Satisfaction

Voice

of the

Customer

Production         Poka-Yoke           Jidoka            Strategic Supplier            Design for

Preparation                                        Development                                         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      5S            Metrics           Standard                 Measurement               Cellularization

                                 WorkSystem Analysis                     

Profitable

Sales

Growth

Six Sigma Quality

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

  Integrated in all aspects
of operations and strategic
planning

CBS is how we manage our business and has been a key driver of our success

Colfax Business System Drives Business Improvement

4

 

  Global leader in specialty fluid handling products

  Proven application expertise in solving critical customer needs

  Serving fast growing global infrastructure driven end markets

  Leading brand names generating aftermarket sales and services

  Experienced management team in place to grow organically and through strategic           
acquisition           

  Strong financial position

  Significant insider ownership

Consistent track record of driving profitable organic sales growth

Investment Highlights

5

 

6

Broad Product Portfolio Focused on Customer Applications

Centrifugal Pumps

Specialty Valves

Progressive Cavity Pumps

Precision Gear Pumps

Fluid Handling Systems

Well recognized brands across served markets

2 and 3 Screw Pumps

 

7

Serving Critical Applications in Our Key End Markets

General
Industrial

Power
Generation

Oil & Gas

Commercial
Marine

Global Navy

Key Markets

Applications

Brands

Commercial

Marine

Fuel oil transfer; oil transport; water and wastewater handling

Allweiler,

Houttuin

,

I

mo

AB

Oil & Gas

Crude oil gathering; pipeline services; unloading and loading; rotating

equipment lubrication; lube oi

l purification

Allweiler, Houttuin,

Imo,

LSC,

Tushaco

,

Warren

Power Generation

Fuel unloading, transfer, burner and injection; rotating equipment

lubrication

Allweiler, Imo,

Tushaco

, Warren

Global

Navy

Fuel oil transfer; oil transport; water and wastewate

r handling; firefighting;

fluid control

Allweiler,

Fairmount,

I

mo

,

I

m

o

AB,

Portland

Valve,

Warren

General Industrial

Machinery lubrication; hydraulic elevators; chemical processing; pulp and

paper processing; food and beverage processing

Allweiler,

Fairm

ount,

Houttuin,

I

mo

,

Tushaco

, Warren,

Zenith

Key Markets

Applications

Brands

Commercial

Marine

Fuel oil transfer; oil transport; water and wastewater handling

Allweiler,

Houttuin

,

I

mo

AB

Oil & Gas

Crude oil gathering; pipeline services; unloading and loading; rotating

equipment lubrication; lube oi

l purification

Allweiler, Houttuin,

Imo,

LSC,

Tushaco

,

Warren

Power Generation

Fuel unloading, transfer, burner and injection; rotating equipment

lubrication

Allweiler, Imo,

Tushaco

, Warren

Global

Navy

Fuel oil transfer; oil transport; water and wastewate

r handling; firefighting;

fluid control

Allweiler,

Fairmount,

I

mo

,

I

m

o

AB,

Portland

Valve,

Warren

General Industrial

Machinery lubrication; hydraulic elevators; chemical processing; pulp and

paper processing; food and beverage processing

Allweiler,

Fairm

ount,

Houttuin,

I

mo

,

Tushaco

, Warren,

Zenith

 

Situation Analysis

Husky Energy moves heavy crude oil along pipelines
from the oil fields in Northern Canada through
extremely harsh environment to a central blending
facility

  Colfax engineers and the customer's project engineer
jointly developed the design, quality, and testing spec

Warren GTS-H268 2 screw pumps with specially
designed internal wear resistant components were
chosen to meet the rigorous application

  Colfax pumps installed – 6X increase in service life

Customer realizes $2M annual savings - spare parts
alone
   

Colfax Solution

Situation Analysis

Major Venezuelan oil company moves 180,000 BPD of
sand laden crude oil through pipelines using  a
competitor’s pumps.  Pumps are failing after only 3 - 4
months due to excessive wear

Colfax Solution

  For the past 40 years Husky has turned to Colfax and
the Imo 8L 3 screw pump – more than 80 installations

Reliable in the toughest environment

Superior energy efficiency – reduces operating
costs

  Imo 8L is the industry standard for Canadian pipeline
applications from 400 to 2500 gallons per minute

Strong Application Expertise

Proven expertise in meeting customer needs in heavy oil applications

New Imo 8L-912Y  

8

 

Driven by VOC, examples of new products introduced in 2008

Develop New Products, Applications and Technologies                  
Driven by Voice of the Customer

Step 1 - VOC

Step 1a – VOC Summary

Step 2 – Prioritization

Step 3 – Specification

All-Heat SMART

EMTEC SMART

Benefits

1.

Senses wear & alerts
end-user

2.

Easy to upgrade

Benefits

1.

50% energy usage
reduction

2.

Eliminates system
components (cooler &
valve)

Simplifies OEM
design

Easier installation  

All-Fuel SMART

Benefits

1.

Efficient seal
leakage monitoring
system - best value

2.

Easy to upgrade

9

 

Blue chip customer base with no single customer representing more than 3% of sales in 2008

____________________

(1)

Includes Distribution (11%), Chemical Processing (7%), Machinery Support (5%), Building Products (4%), Wastewater (2%), Heat Transfer (2%), Pulp and Paper (1%), Diesel Engines (1%), Food & Beverage (1%) and Other (7%).

(2)

Revenues based on our shipping destination.

41%

25%

14%

14%

6%

(1)

22%

51%

5%

15%

4%

3%

2008 Revenues By End Markets

2008 Revenues By Geography (2)

Blue Chip Customers

Large and Diverse Customer Base and End Markets

10

 

~$24.8bn

~$0.3bn

~$2.3bn

~$4.0bn

~$2.0bn

Global infrastructure development will drive capital investment long term and will benefit local
suppliers as well as international exporters of fluid handling equipment.  Demand has softened in
several portions of the general industrial market including chemical, building products, diesel engine
and distribution primarily in Europe and North America.

In the U.S., expect Congress to continue to appropriate funds for new ship construction as older
naval vessels are decommissioned.  Increased demand for integrated fluid handling systems for
both new ship platforms and existing ship classes that reduce operating costs and improve
efficiency as the U.S. Navy seeks to man vessels with fewer personnel also anticipated.  Sovereign
nations outside of the U.S. continue to expand their fleets as they address national security
concerns.

Expect activity in Asia and the Middle East to remain strong as economic growth and fundamental
undersupply of power generation capacity continues to drive investment in energy infrastructure
projects.  Efficiency improvements will continue to drive demand in the world’s developed
economies.

Expect activity within the crude oil market to remain favorable as long term capacity constraints and
global demand drive further development of heavy oil fields, but are experiencing project delays.  In
pipeline applications, demand for highly efficient products expected to remain strong as customers
continue to focus on total cost of ownership.  In refinery applications, a reduction in capital
investment by customers is believed will reduce the demand for our products.

Expect international trade and demand for crude oil and other commodities as well as the age of the
global merchant fleet to continue to create demand for new ship construction; however, expect new
orders to be significantly lower than in the past two years.  Expect sales to grow primarily from
existing orders; likely to have order cancellations.  Believe the increase in the size of the global fleet
will create an opportunity to supply aftermarket parts and service.

Estimated

Market Size

Favorable long term demand driven by global infrastructure build

Market Expectations

Serving Fast Growing Infrastructure Driven End Markets

11

 

EMEA

~ 1,170 Associates

     2008 Sales (1) = $338mm

Asia Pacific

~ 280 Associates

     2008 Sales (1) = $93mm

____________________

(1)

Sales figures reflect sales destination.

Americas

~ 650 Associates

2008 Sales (1) = $174mm

% of Revenue: 29%

% of Revenue: 56%

% of Revenue: 15%

LSC

Houston

Warren

Corporate HQ Richmond

Imo Kentucky

Imo Monroe

Sanford

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

Extensive Global Sales, Distribution and Manufacturing
Footprint

12

 

  Capitalize on growth opportunities by offering regionally developed products and solutions

Standard packages of Imo and 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

Opened sales and engineering office in Bahrain in March

  Utilize Indian / Chinese low cost manufacturing to supply components to other Colfax business
units

  Execute acquisitions

Assam, India

Shanghai, China

Target Fast Growing Regions

13

 

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 and maintenance
services

Approximately 24% of revenues were derived from aftermarket sales and services in 2008

Leading Brands Generating Aftermarket Sales and Services

14

 

  Continue to proactively engage with
highly strategic targets

  Product, market and geographically
focused searches

  Evaluate opportunistic bolt-on
companies

  Pursue adjacent fluid handling
acquisitions

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

Continue to Pursue Strategic Acquisitions that
Complement Our Platform

15

 

  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 or liability adjustments

Asbestos Update

2008

2007

2006

2005

60,000

54,000

48,000

42,000

36,000

30,000

59,217

35,357

37,554

50,020

Average Cost of Resolved Claims

Unresolved Claims

$6,194

$5,378

$5,232

$8,896

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

2005

2006

2007

2008

16

 

Financial Overview

17

 

2009

Q1

2008

Q1

-

2008

2007

2006

2005

$720.0

$600.0

$480.0

$360.0

$240.0

$120.0

$0.0

$136.3

$130.7

$604.9

$506.3

$393.6

$345.5

15.0%

16.8%

17.5%

17.4%

16.3%

15.9%

% Margin

--

--

--

--

19.5%

4.5%

1.1%

13.9%

4.3%

--

28.6%

13.9%

Total Growth

(13.6)%

--

7.1%

0.8%

--

FX Translation

--

--

8.0%

1.4%

--

Acquisitions

17.9%

--

13.5%

11.8%

--

Existing
Businesses

Revenue and Adjusted EBITDA

(1) Refer to Appendix for Non-GAAP reconciliation.

__________________

Note: Dollars in millions.      

Revenue

Adjusted EBITDA (1)

$54.8

$64.1

$88.2

$105.6

$22.0

$20.5

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

2005

2006

2007

2008

Q1

2008

Q1

2009

18

 

____________________

Note: Dollars in millions.

Q1 2009

Q1 2008

-

2008

2007

2006

2005

$720.0

$600.0

$480.0

$360.0

$240.0

$120.0

$0.0

$120.8

$180.3

$669.2

$581.5

$442.3

$370.4

Orders

Backlog

Orders and Backlog

--

--

--

--

15.1%

6.1%

2.0%

7.0%

(33.0)%

--

31.5%

19.4%

Total Growth

(7.5)%

--

7.8%

0.5%

--

FX Translation

--

--

6.1%

1.2%

--

Acquisitions

(25.5)%

--

17.6%

17.7%

--

Existing
Businesses

15.2%

(5.0)%

5.2%

15.0%

(13.6)%

--

63.3%

51.6%

Total Growth

(10.8)%

--

13.1%

12.1%

--

FX Translation

--

--

3.0%

--

--

Acquisitions

(2.8)%

--

47.2%

39.5%

--

Existing
Businesses

$118.3

$179.3

$292.8

$337.3

$353.6

$305.6

$0.0

$80.0

$160.0

$240.0

$320.0

$400.0

2005

2006

2007

2008

-

Q1 2008

Q1 2009

19

 

Refer to Appendix for Non-GAAP reconciliation.

__________________

Note: Dollars in millions.      

Income Statement Summary

Long Term Goals:  Annual sales of $1 billion, gross profit margin of 40% & EBITDA margin of 20%

20

 

____________________

Note: Dollars in millions.

Statement of Cash Flows Summary

21

 

Strong Financial Condition

Debt to adjusted EBITDA < 1 times

Approximately $130 million available on revolver (expires in 2013)

Approximately $30 million in cash

Strong balance sheet and credit availability provide flexibility

____________________

Note: As of 4/3/09

22

 

Adjusted EPS for 2009 of $1.00 to $1.07

2009 Outlook Summary

$540 million

to

$525 million

2009 Total

(4)%

to

(2)%

2009 Organic growth (1)

Revenue Range

$1.07

to

$1.00

2009 Adjusted net income per share (2)

$0.76

to

$0.69

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 costs and severance and asset impairment

(See Appendix for Non-GAAP reconciliation)

Note:  Outlook as of 5/8/09

$2.5 million

Incremental public company costs

43.3 million

Outstanding shares

$8 million

Interest expense

32%

Tax rate

$1.32

Euro

$7 million

Asbestos liability and defense costs

$12 million

Asbestos coverage litigation

Assumptions

23

 

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

Growing Infrastructure

Driven End Markets

CBS-Driven Culture Focused
on Profitable Sales Growth

24

 

Appendix

25

 

Disclaimer

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, certain severance and asset impairment charges as well as one time initial public
offering-related costs to the extent they impact the periods presented.  Adjusted selling, general and administrative
expenses exclude severance and asset impairment costs, certain legacy legal charges and certain due diligence
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
asbestos coverage litigation, asbestos liability and defense costs and severance and asset impairment costs.  
Organic sales growth 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.

Sales and order information by end market are estimates.  We periodically update our customer groupings in order
to refine these estimates.  During 2008, reclassifications of previously reported amounts were made to conform to
current period presentation.  No changes have been made to total sales or orders.

26

 

____________________

Note: Dollars in thousands.

Non-GAAP Reconciliation

27

 

Non-GAAP Reconciliation

____________________

Note: Dollars in thousands.

2008

2007

2006

2005

EBITDA

Net (loss) income

(571)

$            

64,882

$         

94

$                 

12,247

$         

Interest expense

11,822

            

19,246

            

14,186

            

9,026

              

Provision for income taxes

5,438

              

39,147

            

3,866

              

6,907

              

Depreciation and amortization

14,788

            

15,239

            

11,481

            

11,430

            

EBITDA

31,477

$         

138,514

$        

29,627

$         

39,610

$         

EBITDA margin

5.2%

27.4%

7.5%

11.5%

Adjusted EBITDA

Net (loss) income

(571)

$            

64,882

$         

94

$                 

12,247

$         

Interest expense

11,822

            

19,246

            

14,186

            

9,026

              

Provision for income taxes

5,438

              

39,147

            

3,866

              

6,907

              

Depreciation and amortization

14,788

            

15,239

            

11,481

            

11,430

            

Legacy asbestos expense (income)

12,391

            

(50,346)

         

33,816

            

18,112

            

IPO - related costs

57,017

            

-

                     

-

                     

-

                     

Legacy legal expenses

4,131

              

-

                     

8,330

              

3,100

              

Due diligence costs

582

                 

-

                     

-

                     

-

                     

Other post-employment benefit settlement

-

                     

-

                     

(9,102)

            

(251)

               

Cross currency swap

-

                     

-

                     

-

                     

(2,075)

            

Environmental indemnification

-

                     

-

                     

-

                     

(3,100)

            

Discontinued operations

-

                     

-

                     

1,397

              

(616)

               

Adjusted EBITDA

105,598

$        

88,168

$         

64,068

$         

54,780

$         

Adjusted EBITDA margin

17.5%

17.4%

16.3%

15.9%

28

 

____________________

Note: Dollars in thousands, except per share amounts.

Non-GAAP Reconciliation

29

 

____________________

Note: Dollars in thousands.

Non-GAAP Reconciliation

30

 

____________________

Note: Dollars in millions.

Sales & Order Growth

31

 

Sales & Order Growth

____________________

Note: Dollars in millions.

$

%

$

%

Year Ended December 31, 2005

345.5

$         

370.4

$         

Components of Growth:

Organic Growth from Existing Businesses

40.7

              

11.8%

65.6

              

17.7%

Acquisitions

4.8

               

1.4%

4.4

               

1.2%

Foreign Currency Translation

2.6

               

0.8%

1.9

               

0.5%

Total Growth

48.1

              

13.9%

71.9

              

19.4%

Year Ended December 31, 2006

393.6

$         

442.3

$         

Components of Growth:

Organic Growth from Existing Businesses

53.3

              

13.5%

77.7

              

17.6%

Acquisitions

31.3

              

8.0%

27.2

              

6.1%

Foreign Currency Translation

                28.1

7.1%

                34.3

7.8%

Total Growth

112.7

            

28.6%

139.2

            

31.5%

Year Ended December 31, 2007

506.3

$         

581.5

$         

Components of Growth:

Organic Growth from Existing Businesses

70.2

              

13.9%

40.9

              

7.0%

Acquisitions

5.5

               

1.1%

11.7

              

2.0%

Foreign Currency Translation

22.9

              

4.5%

35.1

              

6.1%

Total Growth

98.6

              

19.5%

87.7

              

15.1%

Year Ended December 31, 2008

604.9

$         

669.2

$         

Sales

Orders

32

 

Non-GAAP Reconciliation

33