Colfax Q4 2014 – Good execution in a still sluggish environment
Colfax Corp. (NYSE: CFX) reported Q4 2014 net sales of just over $1.2 billion, an increase of 3% over the same period last year.
13% growth came from acquisitions offset by a negative 7% impact from foreign exchange and a 3% organic decline in revenues.
Adjusted EPS for the 2014 fourth quarter was $0.72 per share which represents an 18% increase versus the $0.61 per share reported last year.
The Conference Call Transcript as always is provided by Seeking Alpha.
There were positive news as p.e. the improved operating margin of 13.7% in the gas and fluid handling segment, but at the same time in their largest gas and fluid handling end market, power generation, revenues for the quarter decreased by 10% organically, while orders were off by 16% organically.
Better news came from the general industrial end market, where sales increased 7% organically and orders increased by 4% organically.
As CEO Steve Simms pointed out: „while the fourth quarter results included excellent execution and working capital management and strong margins in gas and fluid handling, we were again hampered by a sluggish demand environment resulting in an organic revenue decline for the full-year of 2014.“
And they „expect 2015 to be another year without revenue growth, but with continued margin improvement.
But the most interesting point came at the end of the prepared remarks: Steve Simms gave a clear hint that Colfax is already examining acquisition candidates. Only the due diligence process takes more time than anticipated: „we expect to announce a number of strategically compelling and financially attractive situations in the late second quarter or early third quarter of 2015.“
That’s Colfax!
Don’t forget that part of their business model is to grow by the successful integration of acquired companies.
So let’s hope that this will not be in the heavy industries segment where they always will depend of a few large orders.
Colfax stock at this price level remains a buy!