Manufacturing and engineering company,
) reported adjusted earnings per share of 59 cents in the fourth
quarter of 2013, reflecting an increase of 45.2% year over year.
Adjusted earnings per share of 61 cents, however, included a gain
of 2 cents related to certain tax matters. Excluding this
one-time gain, earnings per share in the quarter were 59 cents,
in line with the Zacks Consensus Estimate.
For 2013, Colfax reported adjusted earnings per share of $2.04,
up compared with $1.34 recorded in the year-ago quarter.
Net sales generated in the fourth-quarter 2013 were $1,171.4
million, up 14.0% year over year and ahead of the Zacks Consensus
Estimate of $1,087 million. The increase can be attributed to the
10.2% gain from existing businesses and 6.5% contribution from
acquisitions, partially offset by a 2.7% negative impact of
foreign currency translation.
Total orders in the quarter were $547.8 million, up 5.3% year
over year while backlog at the end of the quarter was $1,577.4
million, compared with $1,431.5 million at the end of
Colfax generates revenue under two heads, which are briefly
Revenue from the Gas and Fluid Handling segment came in at $511.4
million, up 10.0% year over year. Fabrication Technology revenue
grew 2.8% year over year to $503.2 million.
In 2013, Colfax generated net sales of $4,207.2 million,
reflecting an increase of 7.5% year over year. The top-line
result also surpassed the Zacks Consensus Estimate of $4,123.0
Colfax recorded 13.1% year-over-year increase in cost of goods
sold, which as a percentage of revenue was at 69.5%, down 60
basis points year over year. Gross margin in the quarter was
30.5%. Selling, general and administrative (SG&A) expenses,
as a percentage of revenue, were 18.7%, against 22.8% in the
Adjusted operating income margin expanded 190 basis points year
over year to 10.6% in the quarter.
Balance Sheet/ Cash Flow
Exiting the fourth quarter of 2013, Colfax's cash and cash
equivalents were at $311.3 million, roughly half of $639.3
million recorded in the preceding quarter. Long-term debt was at
$1.5 billion versus $1.4 billion in the previous quarter.
Colfax generated $362.2 million cash flow from operating
activities in 2013, versus $174.0 million generated in 2012.
Capital spent on purchase of fixed assets was $71.5 million, down
from $83.2 million in 2012.
Colfax maintained its 2014 guidance provided earlier in Dec 2013.
It anticipates organic revenue growth within a range of 1-3%;
including 2-4% growth in Fluid Handling, 4-6% growth in Howden
and (1%)-2% growth in Fabrication Technology. Total revenue is
anticipated to be within the $4.5-$4.625 billion range.
Adjusted earnings per share are estimated within the $2.40-$2.65
range, excluding 43 cents from restructuring costs and 6 cents
from tax adjustments. (GAAP) earnings per share are anticipated
to be within $2.14-$2.34 range.
Colfax currently has a market capitalization of $6.1 billion and
currently holds a Zacks Rank #3 (Hold). Some better-ranked stocks
in the industry, with a Zacks Rank #2 (Buy) are
Altra Industrial Motion Corp.
Barnes Group Inc.
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