ANNAPOLIS JUNCTION, MD, Aug. 06, 2020 (GLOBE NEWSWIRE) -- Colfax Corporation (NYSE: CFX), a leading diversified technology company, today announced its financial results for the second quarter of 2020.
The Company reported a net loss from continuing operations of $3.6 million, or $0.03 per share, in the quarter, compared to net income of $0.01 in the prior year quarter. On an adjusted basis, the Company reported earnings of $0.09 per diluted share, compared to $0.54 in the second quarter of 2019. Adjustments to reported earnings are included in the reconciliation schedules provided.
For the second quarter, Colfax reported net sales of $620 million, 32% lower than the previous year’s quarter due to the current year impact from COVID-19-related demand reductions. Excluding the impact from currency translation adjustments, organic sales decreased 28%. The Company realized sequential improvements for each month in the second quarter, with June organic sales 19% lower than the prior year. The Company also reported second quarter adjusted EBITA of $45 million, or 7.3% of sales, as temporary savings measures partially mitigated the impact from the volume declines.
During the second quarter the Company generated operating cash flow of $37 million and free cash flow of $18 million, and repaid $300 million of its credit agreement borrowings. The Company completed the second quarter with 4.2 times net leverage and ample liquidity, including $66 million of cash and $1.2 billion of capacity under its credit agreement and other facilities.
“During the quarter we stayed focused on our principal objectives of keeping associates safe, maintaining supply to our customers, and protecting Colfax’s financial health,” said Matt Trerotola, Colfax President and CEO. “I’m very pleased with the resiliency of our businesses and teams through this challenging period. We deployed temporary measures and successfully drove Q2 decremental margin to 28%. Sales per day rates sequentially improved each month, including July. We expect to pace our temporary cost measures with sales levels in the third quarter to deliver sequentially higher profit and remain cash flow positive.
“We continue to pursue our growth agenda in this softer demand environment. During the first half of 2020, we launched over 35 new products in our FabTech business, including the WeldCloud Notes document management software to enhance our digital solution tools. Our MedTech business product launches include today’s announcement of Motion iQ™, a patient relationship management tool that seamlessly connects clinicians and patients across the orthopedic care continuum. We are well-positioned to resume our long-term growth momentum as market conditions improve.”
The Company also reported that its Medical Technology segment sales decreased 35% in the quarter on a reported basis and 34% organically versus the prior year period. Fabrication Technology segment sales decreased 30% in the quarter on a reported basis and 25% organically versus the prior year period. Both segments recorded sequential improvements each month during the quarter, with June Medical Technology organic sales declining 16% and Fabrication Technology organic sales declining 20%. The Medical Technology segment reported adjusted EBITA margins of 3.2%, versus 16.5% in the comparable prior year period, and the Fabrication Technology segment reported adjusted EBITA margins of 12.6%, compared to 15.2% in the prior year second quarter.
Given the uncertainties of customer demand due to the COVID-19 pandemic, Colfax is not providing financial guidance for 2020.
About Colfax Corporation
Colfax Corporation 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. Colfax believes that its brands are among the most highly recognized in each of the markets that it serves. The Company uses its Colfax Business System (“CBS”), a comprehensive set of tools, processes and values, to create superior value for customers, shareholders and associates. Colfax’s common stock is traded on the NYSE under the ticker “CFX.”
