ANNAPOLIS JUNCTION, MD, Oct. 29, 2020 (GLOBE NEWSWIRE) -- Colfax Corporation (NYSE: CFX), a leading diversified technology company, today announced its financial results for the third quarter of 2020.
The Company reported net income from continuing operations of $16.0 million, or $0.12 per share, in the quarter, compared to $0.02 in the prior year quarter. On an adjusted basis, the Company reported earnings of $0.41 per diluted share, compared to $0.50 in the third quarter of 2019. Adjustments to reported earnings are included in this release.
Colfax reported third quarter net sales of $806 million, 30% sequentially higher than second quarter 2020 net sales. Compared to the prior year quarter, sales declined 5% due to the current year impact on demand from COVID-19. Excluding the impact from currency translation adjustments, organic sales decreased 3% year-over-year. The Company also reported third quarter adjusted EBITA of $108 million, or 13.4% of sales, as compared with $126 million, or 14.9% of sales, in the prior year quarter. During the quarter, the Company generated operating cash flow of $80 million and free cash flow of $49 million.
“We are pleased to report significantly stronger sequential results across both of our segments,” said Matt Trerotola, Colfax President and CEO. “Customer demand has returned to healthier levels and our teams are accelerating our recovery momentum. MedTech’s rapid return to growth and FabTech’s strong decrementals contributed to solid earnings and cash flow this quarter, and we expect further sequential improvement in the fourth quarter. We are confident that our transformed portfolio, proven business management system, and innovation path will compound value through sales, profit and cash flow expansion.”
The Company also announced the signing of an agreement to acquire certain extremity product lines from Stryker Corporation for cash consideration of $15 million. Sales are expected to be approximately $20 million in the first full year following the close of the transaction, which is expected to occur in the fourth quarter of 2020, subject to customary closing conditions.
“Our strategic growth program is active, and this acquisition is a great example of one of the many exciting opportunities we have in our pipeline to expand and strengthen our existing businesses,” said Mr. Trerotola. “By acquiring these core technologies, we will broaden our successful Reconstructive product line and gain entry into the adjacent high-growth foot and ankle market.”
Colfax’s Fabrication Technology segment sales decreased 9% in the quarter on a reported basis and decreased 6% organically versus the prior year period, and reported adjusted EBITA margins of 14.7%, compared to 15.2% in the prior year. Medical Technology segment sales increased 2% in the quarter on a reported basis and 1% organically versus the prior year period, including a 2% benefit from nonrecurring sales of personal protective equipment. The segment also reported adjusted EBITA margins of 15.9%, compared to 18.5% in the prior year. Medical Technology segment adjusted EBITA margins included higher supply chain costs related to COVID-19.
The Company expects continued sequential improvement in the fourth quarter of 2020, with adjusted earnings from continuing operations of $0.45 to $0.50 per diluted share.
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.”
