Colfax Corporation Announces Fourth Quarter and Full Year 2021 Results

• Strong operating performance supported $0.06 EPS from continuing operations and $0.59 of adjusted EPS
• Achieved a strong quarter of cash flow, contributing to full year operating cash flow of $356 million and free cash flow of $277 million
• Positioned for separation into two independent public companies near the end of the first quarter 2022 with strong growth outlooks for both businesses
  

Wilmington, DE, Feb. 22, 2022 (GLOBE NEWSWIRE) —  Colfax Corporation (NYSE: CFX), a leading diversified technology company, today announced its financial results for the fourth quarter and fiscal year 2021 and provided additional updates.

The Company reported fourth quarter net income from continuing operations of $10 million, or $0.06 per share, compared to $41 million, or $0.29 per share, in the prior year period. Adjusted earnings of $0.59 per share rose 16% from $0.51 in the prior year period. The Company also reported full year net income from continuing operations of $94 million, or $0.60 per share, and adjusted earnings of $2.14. Adjustments to US GAAP results are included in this release.

In the fourth quarter, sales of $1,023 million increased 24%, or 16% on an organic sales-per-day basis versus the prior year period. The Company earned operating income of $55 million, compared to $58 million in the prior year quarter. Fourth quarter adjusted EBITA of $136 million increased 21% compared to $113 million in the prior year quarter, and adjusted EBITA margins decreased 30 basis points to 13.3%. Excluding recent acquisitions, adjusted EBITA margins were approximately 20 basis points higher. Colfax generated operating cash flow of $96 million in the quarter and $356 million for the full year. Full year free cash flow, when excluding outflows related to the intended separation of Colfax into two independent public companies, was $277 million.

Medical Technology segment sales of $399 million in the quarter increased 29% compared to the prior period, and 10% on an organic sales-per-day basis. Fabrication Technology segment (ESAB) fourth quarter sales of $624 million increased 20% compared to the prior year period, and 20% on an organic sales-per-day basis.

“We delivered a strong quarter and year of financial results with both businesses continuing to outperform their respective markets,” said Matt Trerotola, Colfax President and CEO. “ESAB effectively executed in a period of inflationary and supply chain pressures to deliver solid growth and operating margin expansion. Our MedTech business drove double-digit organic growth versus 2020, and we delivered organic growth versus 2019 despite on-going pandemic challenges. As we exit this pivotal year and approach our separation date, I am confident that both businesses are operationally and strategically well-positioned to accelerate growth and create long-term shareholder value.”

Separation Update

The Company reported that it has completed most steps in preparation for the tax-free spin-off of its ESAB business to Colfax shareholders near the end of the first quarter, subject to obtaining final approval from the Board of Directors and market, regulatory and other customary conditions. Colfax intends to distribute 90% of the outstanding shares in ESAB to Colfax shareholders on a pro rata basis in a distribution intended to be tax-free to Colfax. The Company plans to divest its 10% retained shares in ESAB within 12 months after the spin-off in a tax-efficient exchange for its outstanding debt. Details on the transaction are included in ESAB’s Form 10 registration statement, which will be publicly filed today with the Securities and Exchange Commission. Colfax also announced that it intends to launch ESAB with net debt equal to approximately 2.75 times its trailing twelve-month pro forma EBITDA, or approximately $1.2 billion.

“Upon separation, both of these leading businesses will have the financial flexibility to achieve their long-term strategic goals of accelerating growth, expanding margins and generating cash flow to create long-term shareholder value”, said Mr. Trerotola.

The determination of the respective boards of directors is nearly complete for both ESAB and Colfax, which will be renamed Enovis at the time of separation. The boards will include existing Colfax directors and new directors with skills and perspectives that are relevant to each company. Mitch Rales, current Colfax Chairman, is expected to serve as Chairman of both business’ boards.

2022 Financial Outlook

Colfax reported that it expects strong sales and profit growth in 2022 for both of its businesses with typical seasonal patterns and improving business conditions as the year progresses. Enovis is projecting sales to grow 10-14% in 2022, including 6-9% from organic growth, and to generate segment-level adjusted EBITDA of $280-$300 million. ESAB is expecting 7-10% organic sales growth in 2022 with segment-level adjusted EBITDA of $455-$475 million. Segment-level adjusted EBITDA excludes future corporate costs.

Investor Calls Scheduled for Monday, March 14, 2022

In anticipation of the separation of Colfax being completed near the end of the first quarter of 2022, Enovis and ESAB each announced investor calls scheduled for Monday, March 14, 2022 to discuss their respective strategies for value creation including 2022 forecasted performance. ESAB CEO Shyam Kambeyanda and his team will present from 9:00 a.m. to 10:30 a.m. Eastern time, followed by a thirty-minute break and then a presentation by Enovis CEO Matt Trerotola and his team from 11:00 a.m. to approximately 1:00 p.m. Eastern time. For more information, please visit the Investor Relations section of our website https://ir.enovis.com/events-presentations.

Conference Call and Webcast

The Company will hold a conference call to discuss its fourth quarter and fiscal year 2021 results beginning at 8:00 a.m. Eastern on Tuesday, February 22, which will be open to the public by calling +1-877-303-7908 (U.S. callers) and +1-678-373-0875 (International callers) and referencing the conference ID number 7466839 and through webcast via Colfax’s website 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.

About Colfax Corporation

Colfax Corporation (NYSE: CFX) is a leading diversified technology company that provides orthopedic and fabrication technology products and services to customers around the world, principally under the DJO and ESAB brands. The Company uses its Colfax Business System, a comprehensive set of tools and processes, to create superior value for customers, stockholders and associates. In March of 2021, Colfax announced its intention to separate into two independent and public companies, which is targeted to be completed near the end of the first quarter of 2022, to accelerate strategic momentum and unlock additional value creation potential. Enovis Corporation will focus on medical technologies and ESAB Corporation will focus on fabrication technologies. For more information about Colfax and our separation activities, please visit www.colfaxcorp.com.

Contact:

Mike Macek
Vice President, Finance
Colfax Corporation
+1-302-252-9129
investorrelations@colfaxcorp.com

Source: Colfax Corporation