Manufacturing and engineering company,
) reported adjusted earnings per share of 43 cents in
first-quarter 2014, reflecting year-over-year growth of 65.4%.
However, the bottom-line result fell short of the Zacks Consensus
Estimate of 44 cents.
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Colfax generated net sales of $1,054.3 million in first-quarter
2014, reflecting an increase of 11.3% year over year. The
improvement can be attributed to a 5.6% contribution from
existing businesses and a 9% gain from acquisitions, offset
partially by a 3.3% negative impact from foreign currency
The top-line result surpassed the Zacks Consensus Estimate of
Total orders in the quarter were $583.4 million, up 16.2% year
over year, while backlog at the end of the quarter was $1,592.0
million, compared with $1,438.5 million at the end of
Colfax generates revenues under two heads, which are briefly
Revenues generated from the Gas and Fluid Handling segment were
$573.9 million, up 35.0% year over year. Fabrication Technology
revenues declined 8.0% year over year to $480.4 million.
Colfax's cost of sales in first-quarter 2014 increased 11% and
represented 69.1% of total revenue, down 20 basis points (bps)
year over year. Gross margin in the quarter was 30.9%, up 20 bps
year over year. Selling, general and administrative (SG&A)
expenses, as a percentage of revenue, were at 22.0%, against
22.6% in the year-ago quarter.
Adjusted operating income margin expanded 60 basis points year
over year to 8.9% in the quarter.
Balance Sheet/ Cash Flow
Exiting first-quarter 2014, Colfax had cash and cash equivalents
of $482.2 million, up from $311.3 million recorded in the
year-ago quarter. Long-term debt was at $1.1 billion versus $1.5
billion in the previous quarter.
During the quarter, Colfax used $67.0 million of cash for
operating activities, up from $13.4 million used in the year-ago
quarter. Capital spent on purchase of fixed assets was $12.6
million, down 29.9% year over year.
Subsequent to the end of first-quarter 2014, Colfax on Apr 14,
announced the completion of the acquisition of Victor
Technologies Holdings, Inc. from Irving Place Capital for $947.3
Accounting for contributions from the Victor acquisition, Colfax
increased its sales guidance for 2014 to $4.85−$4.99 billion
range from the previous projection of $4.5−$4.625 billion range.
Tax rate is expected to be within the 29−30% range, while
interest expense is predicted to be nearly $58 million.
Adjusted earnings per share are estimated within the $2.45−$2.70
range, up compared with the prior expectation of $2.40−$2.65.
Including one-time charges of 49 cents, GAAP earnings per share
are anticipated within the $1.96−$2.21 range. This reflects a
decline from the previous range of $2.14−$2.34.
Colfax currently has a market capitalization of $7.5 billion and
currently holds a Zacks Rank #2 (Buy). Some better-ranked stocks
in the industry, with a Zacks Rank #1 (Strong Buy) are
Sun Hydraulics Corp.