Colfax Reports Second Quarter 2019 Results
August 06, 2019
- Achieved results ahead of expectations
- Delivered 3% sales growth in Medical Technology segment including 3% organic improvement
- Grew Fabrication Technology sales 6% including 4% organic growth; improved year-over-year segment operating income and adjusted EBITA margins by 100 and 90 basis points, respectively
- Moved Air & Gas Handling segment to discontinued operations, expect to complete divestiture this year
ANNAPOLIS JUNCTION, MD – August 6, 2019 – Colfax Corporation (NYSE: CFX), a leading diversified technology company, today announced its financial results for the second quarter of 2019.
The Company reported a net loss of $466.6 million or $3.45 per share in the quarter, which includes a non-cash charge of $3.48 per share for the pending divestiture of its Air & Gas Handling business that is mostly attributable to the recognition of cumulative foreign currency translation effects from the long-term strengthening of the U.S. Dollar. Excluding the divestiture impacts, strategic transaction costs, restructuring expenses and acquisition-related amortization costs, the Company reported fully consolidated adjusted net income of $0.64 per share in the second quarter 2019 versus $0.61 in the second quarter of 2018. This quarter’s results included double-digit order growth in the Air & Gas Handling segment, which is expected to be divested later this year and is reflected as a discontinued operation in the Company’s financial statements.
On a continuing operations basis, Colfax reported second quarter net sales of $909 million, net income from continuing operations of $0.01 per share, and adjusted earnings of $0.54 per share. The Fabrication Technology segment organically grew 4% with flat volumes, and the Medical Technology segment organically expanded 3% versus the prior year period. Second quarter adjusted EBITA was $127 million with adjusted EBITA margin of 14.0%, reflecting the first quarter acquisition of the higher-margin Medical Technology segment and improvements in the Fabrication Technology segment. Fabrication Technology achieved operating income margin of 13.7% and adjusted EBITA margin of 15.2%, a 90-basis point increase in adjusted EBITA margin compared to the prior year second quarter as a result of improved pricing, productivity, and cost reductions.
“We are pleased to report strong performance across our segments,” said Matt Trerotola, Colfax President and CEO. “MedTech’s revenue growth is ramping up, reflecting improving operational execution in Prevention and Rehabilitation and double-digit growth in the Reconstructive product line. The FabTech segment delivered healthy organic growth and made steady progress toward our margin goal. Our focused commercial strategy, innovation, and customer service levels in FabTech resulted in growth in nearly all regional markets.”
“Over the past several years, we made strategic and structural operating improvements to the Air & Gas Handling business to significantly improve its margins and reposition it in faster-growing markets. This enabled us to sign an agreement to sell the business at a more attractive value. The sale contractual contingencies have expired, most regulatory approvals have been received, and we continue to expect the transaction to close this year. We have reshaped our portfolio to be higher-margin, less cyclical and with more consistent cash flow.”
The Company also announced that it continues to expect its businesses to achieve the previously announced 2019 adjusted EPS guidance of $2.55 to $2.65 on a fully consolidated basis, which represents $1.90 to $2.00 from continuing operations. Colfax expects third quarter 2019 adjusted EPS from continuing operations of $0.45 to $0.50. Colfax will provide additional guidance and pro forma information in its call with investors scheduled for later today.
Conference Call and Webcast
Colfax will host a conference call to provide details about its results today at 8:00 a.m. EDT. The call will be open to the public by calling 877-303-7908 (U.S. callers) or +1-678-373-0875 (international callers) and referencing the conference ID number 6778466 or through webcast via Colfax’s website at www.colfaxcorp.com under the “Investors” 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.