Colfax Corporation (NYSE:CFX), a leading global manufacturer of gas- and fluid-handling and fabrication technology products and services, today announced its financial results for the third quarter of 2016. Net income was $28.0 million, or $0.23 per dilutive share, compared to $18.4 million, or $0.15 per share, for the third quarter of 2015. Adjusted net income was $47.8 million, or $0.39 per share, compared to $29.5 million, or $0.24per share for the comparable 2015 period.
The Company reported third quarter net sales of $879.2 million, compared with $969.1 million in the comparable 2015 quarter. A 2.6% foreign exchange impact contributed to the 9.3% decrease. Third quarter operating income was $50.5 millionor 5.7% of sales, and adjusted operating income was $78.3 million or 8.9% of sales. The prior year third quarter operating income margin was 4.7%, and the adjusted operating income margin was 6.0%.
“We delivered another solid profit performance this quarter and made substantial progress on our internal efforts to improve margins,” said Matthew Trerotola, President and Chief Executive Officer. “Several large project wins lifted our Gas and Fluid Handling segment orders by almost 9% organically, but these awards were the result of our differentiated solutions and CBS driven improvement and not a broader improvement in business conditions. We also achieved increasing benefits from our restructuring efforts and remain on track to deliver the $50 million of planned savings for this year. Our strong execution on productivity and restructuring projects contributed to an improved adjusted operating margin despite lower volume.”
“We continue to view our end markets as near the bottom of the cycle and are implementing several new actions to further improve our long-term cost structure,” Mr. Trerotola continued. “Colfax has strong growth potential as our end markets improve, we gain momentum in our industrial and aftermarket initiatives, and execute our strategic growth program. We have many levers to create long-term shareholder value.”
Colfax also announced that the Delaware Supreme Court affirmed prior court rulings regarding the Company’s rights under excess insurance policies for asbestos coverage. This ruling is expected to result in the receipt from excess insurers of approximately $88 million of prior unreimbursed costs funded by the Company, although the timing of the cash receipts remains uncertain. It is also expected to reduce the extent to which the Company is required to fund future defense and settlement costs. Because the Court ruled that payment under the various policies differed in some cases, the Company recorded an $8.2 million non-cash charge in the third quarter.
As a result of recent performance, the pace of cost reduction actions and its near-term market outlook heading into the fourth quarter, the Company raised the lower end of its previously-issued guidance range by 5 cents for full-year 2016.
Conference Call and Webcast
Colfax will host a conference call to provide details about its results on Thursday, October 27, 2016 at 8:00 a.m. EDT. The call will be open to the public through 877-303-7908 (U.S. callers) or 678-373-0875 (international callers) and referencing the conference ID number 94418094, 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.
About Colfax Corporation
Colfax Corporation is a diversified global manufacturing and engineering company that provides gas- and fluid-handling and fabrication technology products and services to commercial and governmental customers around the world under the Howden, Colfax Fluid Handling and ESAB brands. Colfax believes that its brands are among the most highly recognized in each of the markets that it serves. Colfax is traded on the NYSE under the ticker “CFX.” Additional information about Colfax is available at www.colfaxcorp.com.