Record Sales and Orders Drive Strong Performance in 2008 RICHMOND,
Va., Feb. 20 /PRNewswire-FirstCall/ -- Colfax Corporation (NYSE:
CFX), a global leader in engineered fluid handling products and
systems, today announced financial results for the fourth quarter
and full year ended December 31, 2008. On a year-over-year basis,
highlights for the quarter and the year include: Fourth quarter of
2008 (all comparisons versus the fourth quarter of 2007) -- Net
income of $10.4 million (24 cents per share - basic and diluted);
Adjusted net income (as defined below) of $17.5 million (40 cents
per share), an increase of 19.1% -- Net sales of $159.3 million, an
increase of 10.9%; Organic sales growth (as defined below) of 19.1%
-- Operating income of $21.7 million; Adjusted operating income (as
defined below) of $28.6 million, an increase of 14.9% -- EBITDA (as
defined below) of $25.2 million; Adjusted EBITDA (as defined below)
of $32.1 million, an increase of 10.8% -- Fourth quarter orders of
$126.3 million, a decrease of 19.3%; Organic order decline (as
defined below) of 15.8% -- Backlog of $337.3 million at period end
Full year 2008 (all comparisons versus 2007) -- Net loss of $0.6
million (11 cents per share - basic and diluted); Adjusted net
income (as defined below) of $53.7 million ($1.22 per share), an
increase of 32.8% -- Net sales of $604.9 million, an increase of
19.5%; Organic sales growth (as defined below) of 13.9% --
Operating income of $16.7 million; Adjusted operating income (as
defined below) of $90.8 million, an increase of 24.5% -- EBITDA (as
defined below) of $31.5 million; Adjusted EBITDA (as defined below)
of $105.6 million, an increase of 19.8% -- Record orders for the
year of $669.2 million, an increase of 15.1%; Organic order growth
(as defined below) of 7.0% 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 had an excellent fourth quarter," said John Young,
president and CEO of Colfax Corporation. "Our strong results were
driven by organic sales growth of 19% and a 210 basis point
improvement in gross profit margin. We also delivered record
results for the year, including organic sales growth of 14%, in
line with our low double-digit growth expectation. Sales growth was
lead by increased demand in the power generation, commercial marine
and general industrial end markets. We are well positioned heading
into 2009, with a higher backlog than we had at the beginning of
2008." He continued, "Despite our recent performance and our
relatively strong backlog, we expect that the second half of the
year could be very challenging if current economic conditions
persist. We remain cautious on our outlook but continue to expect
organic sales growth in the range of 1% to 3% and adjusted earnings
per share of $1.10 to $1.17 for 2009. Our focus continues to be on
growing the business through expanding our served markets,
executing on our breakthrough initiatives and pursuing acquisitions
while controlling costs. Our strong financial position allows us to
be flexible as well as opportunistic. We believe that the long-term
fundamentals of our end markets including the need for
infrastructure and energy worldwide bode well for our
fluid-handling products and solutions." 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 Friday, February 20 at 8:00 a.m. EST. The call will be
open to the public through 719-325-4744 or 877-723-9518 and webcast
via Colfax's website at http://www.colfaxcorp.com/ under the
"Investor Relations" section. Access to a supplemental slide
presentation can also be found at the Colfax website under the same
heading. Both the audio of this call and the slide presentation
will be archived on the website later today and will be available
until the next quarterly call. In addition, a replay of this call
will be available until approximately March 6, 2009. The replay
number in the U.S. is 888-203-1112 and internationally it is
719-457-0820, and the access code is 4053059. 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 http://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 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. COLFAX CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited (amounts in
thousands, except per share data) Three Months Ended Year Ended
------------------ ---------- December 31, December 31, December
31, December 31, 2008 2007 2008 2007 ---- ---- ---- ---- Net sales
$159,311 $143,703 $604,854 $506,305 Cost of sales 101,557 94,488
387,667 330,714 ------- ------ ------- ------- Gross profit 57,754
49,215 217,187 175,591 Initial public offering- related costs -- --
57,017 -- Selling, general and administrative expenses 27,718
23,223 125,234 98,500 Research and development expenses 1,426 1,087
5,856 4,162 Asbestos liability and defense (income) costs 1,978
(31,946) (4,771) (63,978) Asbestos coverage litigation expenses
4,905 5,314 17,162 13,632 ----- ----- ------ ------ Operating
income 21,727 51,537 16,689 123,275 Interest expense 2,138 4,830
11,822 19,246 ----- ----- ------ ------ Income before income taxes
19,589 46,707 4,867 104,029 Provision for income taxes 9,210 17,715
5,438 39,147 ----- ------ ----- ------ Net income (loss) $10,379
$28,992 $(571) $64,882 ======= ======= ===== ======= Net income
(loss) available to common shareholders per share - basic and
diluted $0.24 $0.77 $(0.11) $1.79 ===== ===== ====== ===== COLFAX
CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS Preliminary and
Unaudited (amounts in thousands) December 31, ------------ 2008
2007 ---- ---- ASSETS CURRENT ASSETS: Cash and cash equivalents
$28,762 $48,093 Trade receivables, less allowance for doubtful
accounts 101,064 84,430 Inventories, net 80,327 68,287 Asbestos
insurance asset 26,473 19,059 Asbestos insurance receivable 36,371
44,664 Other current assets 21,860 22,534 ------ ------ Total
current assets 294,857 287,067 Deferred income taxes, net 53,428
36,447 Property, plant and equipment, net 92,090 88,391 Goodwill
and intangible assets, net 179,046 185,353 Long-term asbestos
insurance asset 277,542 286,169 Deferred loan costs, pension and
other assets 16,113 13,113 ------ ------ Total assets $913,076
$896,540 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES: Current portion of long-term debt and capital
leases $5,420 $2,640 Accounts payable 52,138 48,910 Accrued
asbestos liability 28,574 28,901 Other accrued liabilities 68,154
67,923 ------ ------ Total current liabilities 154,286 148,374
Long-term debt, less current portion 91,701 203,853 Long-term
dividend payable to shareholders -- 35,054 Long-term asbestos
liability 328,684 347,332 Pension and accrued post-retirement
benefits 130,188 71,365 Other liabilities 41,286 37,511 ------
------ Total liabilities 746,145 843,489 Shareholders' equity
166,931 53,051 ------- ------ Total liabilities and shareholders'
equity $913,076 $896,540 ======== ======== COLFAX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Preliminary and
Unaudited (amounts in thousands) Year ended December 31,
------------- 2008 2007 ---- ---- Cash flows from operating
activities: Net (loss) income $(571) $64,882 Adjustments to
reconcile net (loss) income to cash (used in) provided by operating
activities: Depreciation and amortization 14,788 15,239 Noncash
stock-based compensation 11,330 -- Write off of deferred loan costs
4,614 -- Other adjustments for non-cash items 994 1,609 Deferred
income taxes (13,357) 22,186 Changes in working capital (27,680)
3,344 Changes in other operating assets and liabilities (21,631)
(32,777) ------- ------- Net cash (used in) provided by operating
activities (31,513) 74,483 Cash flows from investing activities:
Purchases of fixed assets (20,113) (13,671) Acquisitions, net of
cash received (439) (32,987) Proceeds from sale of fixed assets 23
133 -- --- Net cash used in investing activities (20,529) (46,525)
Cash flows from financing activities: Borrowings under term credit
facility 100,000 55,000 Payments under term credit facility
(210,278) (11,791) Proceeds from borrowings on revolving credit
facilities 28,185 58,000 Repayments of borrowings on revolving
credit facilities (28,158) (86,500) Proceeds from the issuance of
common stock, net of offering costs 193,020 -- Repurchases of
common stock (5,731) -- Dividends paid to preferred shareholders
(38,546) -- Other (3,656) (2,972) ------ ------ Net cash provided
by financing activities 34,836 11,737 Effect of exchange rates on
cash (2,125) 790 ------ --- (Decrease) increase in cash and cash
equivalents (19,331) 40,485 Cash and cash equivalents, beginning of
year 48,093 7,608 ------ ----- Cash and cash equivalents, end of
year $28,762 $48,093 ======= ======= COLFAX CORPORATION
Reconciliation of GAAP to non-GAAP Financial Measures Unaudited
(dollars in thousands, except per share data) Three Months Ended
Year Ended ------------------ ---------- December 31, December 31,
December 31, December 31, 2008 2007 2008 2007 ---- ---- ---- ----
EBITDA Net income (loss) $10,379 $28,992 $(571) $64,882 Interest
expense 2,138 4,830 11,822 19,246 Provision for income taxes 9,210
17,715 5,438 39,147 Depreciation and amortization 3,443 4,034
14,788 15,239 ----- ----- ------ ------ EBITDA $25,170 $55,571
$31,477 $138,514 ======= ======= ======= ======== EBITDA margin
15.8% 38.7% 5.2% 27.4% Adjusted EBITDA Net income (loss) $10,379
$28,992 $(571) $64,882 Interest expense 2,138 4,830 11,822 19,246
Provision for income taxes 9,210 17,715 5,438 39,147 Depreciation
and amortization 3,443 4,034 14,788 15,239 IPO-related costs -- --
57,017 -- Legacy legal adjustment -- -- 4,131 -- Due diligence
costs -- -- 582 -- Asbestos liability and defense (income) costs
1,978 (31,946) (4,771) (63,978) Asbestos coverage litigation
expense 4,905 5,314 17,162 13,632 ----- ----- ------ ------
Adjusted EBITDA $32,053 $28,939 $105,598 $88,168 ======= =======
======== ======= Adjusted EBITDA margin 20.1% 20.1% 17.5% 17.4%
Adjusted Net Income and Adjusted Earnings per Share Net income
(loss) $10,379 $28,992 $(571) $64,882 IPO-related costs -- --
57,017 -- Legacy legal adjustment -- -- 4,131 -- Due diligence
costs -- -- 582 -- Asbestos liability and defense (income) costs
1,978 (31,946) (4,771) (63,978) Asbestos coverage litigation
expense 4,905 5,314 17,162 13,632 Interest adjustment to effect IPO
at beginning of period -- 2,143 2,302 7,536 Tax adjustment to 34%
effective rate 210 10,161 (22,201) 18,333 --- ------ ------- ------
Adjusted net income $17,472 $14,664 $53,651 $40,405 ======= =======
======= ======= Adjusted net income margin 11.0% 10.2% 8.9% 8.0%
Shares outstanding at closing of IPO 44,006,026 44,006,026
44,006,026 44,006,026 Adjusted net income per share $0.40 $0.33
$1.22 $0.92 ===== ===== ===== ===== Net income (loss) per share -
basic and diluted in accordance with GAAP $0.24 $0.77 $(0.11) $1.79
===== ===== ====== ===== Adjusted Operating Income Operating income
$21,727 $51,537 $16,689 $123,275 IPO-related costs -- -- 57,017 --
Legacy legal adjustment -- -- 4,131 -- Due diligence costs -- --
582 -- Asbestos liability and defense (income) costs 1,978 (31,946)
(4,771) (63,978) Asbestos coverage litigation expense 4,905 5,314
17,162 13,632 ----- ----- ------ ------ Adjusted operating income
$28,610 $24,905 $90,810 $72,929 ======= ======= ======= =======
Adjusted operating income margin 18.0% 17.3% 15.0% 14.4% COLFAX
CORPORATION Sales and Order Growth Unaudited (amounts in millions)
Sales Orders ------ ------ $ % $ % -- -- -- -- Three Months Ended
December 31, 2007 $143.7 $156.5 Components of Growth: Organic
growth from existing businesses 27.4 19.1% (24.7) (15.8%)
Acquisitions 0.8 0.6% 3.1 2.0% Foreign currency translation (12.6)
(8.8%) (8.6) (5.5%) ---- ----- Total Growth 15.6 10.9% (30.2)
(19.3%) ---- ----- Three Months Ended December 31, 2008 $159.3
$126.3 ====== ====== Sales Orders ------ ------ $ % $ % -- -- -- --
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 ====== ======
COLFAX CORPORATION Reconciliation of Projected 2009 Net Income Per
Share to Adjusted Net Income Per Share Preliminary and Unaudited
(amounts in dollars) EPS Range --------- Projected 2009 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 2009 adjusted
net income per share - fully diluted $1.10 $1.17 ===== =====
http://www.newscom.com/cgi-bin/prnh/20080508/DC21739LOGO
http://photoarchive.ap.org/ DATASOURCE: Colfax Corporation CONTACT:
Mitzi Reynolds, Vice President, Investor Relations of Colfax
Corporation, +1-804-327-5689 Web Site: http://www.colfaxcorp.com/
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