Colfax Corporation Announces Third Quarter 2021 Results
November 4, 2021
- Posted $0.17 EPS from continuing operations and $0.54 of adjusted EPS
- Increased sales 20% to $966 million including a 15% organic sales-per-day improvement
- Reported strong progress on integration of acquisitions
- Announced continued progress to Q1 2022 separation including new post-separation name for MedTech growth company
WILMINGTON, DE, Nov. 04, 2021 (GLOBE NEWSWIRE) — Colfax Corporation (NYSE: CFX), a leading diversified technology company, today announced its financial results for the third quarter of 2021 and provided other updates.
The Company reported third quarter net income from continuing operations of $27 million, or $0.17 per share, compared to $16 million, or $0.12 per share, in the prior year period. Adjusted earnings of $0.54 per share rose 32% from $0.41 in the prior year period. Adjustments to US GAAP results are included in this release.
In the third quarter, sales of $966 million increased 20%, or 15% on an organic sales-per-day basis versus the prior year comparable period. The Company also achieved operating income of $64 million, compared to $62 million in the prior year quarter. Third quarter adjusted EBITA of $132 million increased 22% compared to $108 million in the prior year quarter, and adjusted EBITA margins increased 20 basis points to 13.6%. Excluding recent acquisitions, adjusted EBITA margins were approximately 70 basis points higher. Colfax generated operating cash flow of $97 million and free cash flow of $68 million in the third quarter, compared with operating cash flow of $80 million and free cash flow of $49 million in the prior year quarter.
“Our businesses performed well and organically grew faster than the market this quarter in a dynamic business environment,” said Matt Trerotola, Colfax President and CEO. “ESAB exceeded our expectations this quarter, as it effectively managed through the inflationary and supply chain pressures to deliver strong growth and operating margin expansion. In MedTech, recent acquisitions drove double-digit growth in the quarter. Organic sales-per-day growth was positive versus 2020 and 2019 despite the rise in COVID cases, which temporarily weighed on elective surgery volumes and further increased supply chain and logistics challenges. We expect gradual improvement in the fourth quarter, creating a strong growth trajectory into 2022. Both of our businesses are operationally and strategically well-positioned for the planned separation of Colfax into two independent companies in the first quarter of 2022.”
Colfax has made strong progress integrating its recent acquisitions. The foot and ankle businesses have been combined into a unified platform that can be leveraged to efficiently scale and rapidly grow at double-digit rates to approximately $100 million of revenue over the next three years. Our teams are working closely together to secure Mathys’ path to higher revenue growth and $15 million of cost synergies that was previously outlined. Acquisitions will continue to be an important part of the Company’s strategy to shape its medical technology business for faster growth.
Medical Technology segment sales of $360 million in the quarter increased 14% overall. Organic sales-per-day increased 1% which includes approximately 200 basis points of pressure from prior year non-recurring sales of personal protective equipment. The Company recently expanded its hip portfolio with the EMPOWR™ Dual Mobility Hip System, adding another clinically differentiated product into its fast-growing reconstructive business. This is the latest addition to the EMPOWR Hip portfolio that provides surgeons with a solution to treat a large patient group needing better joint stability.
Fabrication Technology segment (ESAB) third quarter sales of $606 million increased 24% on an organic sales-per-day basis and 23% overall. Sales growth was balanced, with strong growth in both developed and developing regions. New product innovation continues to accelerate and significantly contribute to growth, with 67 year-to-date product launches and an expectation of 100 for the full year.
The Company commented that it expects a higher projected tax rate and COVID-driven headwinds will lead to results at the lower end of its $2.10-$2.20 full year adjusted EPS forecast. Colfax continues to expect approximately $275 million of free cash flow excluding separation costs in 2021.
Colfax On-Track for Q1 2022 Separation, Announces New Name
The Company is making meaningful progress on its expected tax-free spin-off of its ESAB business to Colfax shareholders in the form of a dividend in the first quarter of 2022. Substantial progress has been made to create two independent Boards with relevant skills, experiences and diversity, and with limited overlap. The Company also announced that it will transition to its new name, Enovis™, at the time of the separation.
“Enovis captures our vision of combining innovation with our passion for continuous improvement to deliver superior patient outcomes,” said Mr. Trerotola. “As we strategically pivot to a company focused on creating medical technology that improves lives, the Enovis brand emphasizes the differentiated value and accretive foresight we will bring healthcare professionals and their patients around the world.”
Conference Call and Webcast
The Company will hold a conference call to discuss its third quarter 2021 results beginning at 8:00 a.m. Eastern on Thursday, November 4, which will be open to the public by calling +1-888-771-4371 (U.S. callers) and +1-847-585-4405 (International callers) and referencing the conference ID number 50243903 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 (“CBS”), a comprehensive set of tools and processes, to create superior value for customers, shareholders and associates. In March of 2021, Colfax announced its intention to separate into two independent and public companies, which is targeted to be completed in the first quarter of 2022 to accelerate strategic momentum and unlock additional value creation potential; one business will focus on specialty medical technologies and the other on fabrication technologies. For more information about Colfax and our separation activities, please visit www.colfaxcorp.com.