Colfax Clocks 20% Sales Growth In Q3, Beats Estimates

Colfax Corp CFX reported third-quarter sales growth of 20% year-over-year to $965.89 million, +15% on an organic sales-per-day basis, beating the consensus of $958.430 million.
Adjusted EPS improved to $0.54 from $0.41 in 3Q20, beating the consensus of $0.53.
The gross margin contracted by 78 bps to 41.9%.
The operating income was $63.99 million (+3.3% Y/Y) and the margin contracted by 106 bps to 6.6%.
Colfax generated cash from operating activities year-to-date of $259.88 million, compared to $173.13 million a year ago.
Adjusted EBITDA was $131.6 million (+22.2% Y/Y), and the margin expanded by 20 bps to 13.6%.
The company says ESAB exceeded expectations this quarter, as it effectively managed through the inflationary and supply chain pressures to deliver strong growth and operating margin expansion. In MedTech, recent acquisitions drove double-digit growth in the quarter. Organic sales-per-day growth was positive compared to 2020 and 2019.
Medical Technology segment sales of $360 million (+14% Y/Y) and Fabrication Technology segment (ESAB) sales of $606 million (+23%Y/Y).
The company is making meaningful progress on the expected tax-free spin-off of its ESAB business to Colfax shareholders in the form of a dividend in the first quarter of 2022. The company also announced that it would transition to its new name, Enovis, during the separation.
FY21 Outlook: Colfax expects a higher projected tax rate, and COVID-driven headwinds will lead to results at the lower end of its $2.10-$2.20 full-year adjusted EPS forecast. It continues to expect ~$275 million of free cash flow.
Price Action: CFX share closed lower by 0.26% at $52.75 on Wednesday.

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Colfax Clocks 20% Sales Growth In Q3, Beats Estimates