Colfax Corp. (NYSE: CFX) the industrial manufacturing and fluid handling company released its Q2 2014 results which came in a bit short of analysts expectaions.
Adjusted net income per share were $0.48 and net sales increased 11.7% to $1.199 billion but declined organically by 5.0%.
There were weeknesses due to soft demand in welding and pumping markets, as well as certain issues in fluid handling as CEO Steven E. Simms pointed out but the recent acquisitions performed generally in line with expectations.
So how did Colfax react to these difficult markets? They applied their Colfax Business System (CBS) tools in a rigorous way to realize additional cost savings.
At the Vamberk site in the Czech republic e.g. the ESAB business established an electronic pool system delivers direct to the customer, bypassing any warehouse or distribution centers.
Nevertheless for the balance of the year Colfax decided to reduce their 2014 guidance because sales in the fabrication technology and in the fluid handling business were below expectations.
But don’t get confused or disappointed!
All this means only temporary weekness for Colfax and as some of their markets are a bit soft they continue to apply their CBS tools and reduce costs more rigorously than ever!
Their balance sheet is strong, the debt level is reasonable. This enables them to continue to acquire and integrate opportunistically when occasions arise.
Colfax share price ended Friday at $ 67.67
Colfax is a buy for the long term investor even if it is not exactly cheap … but quality rarely is!