Colfax Corporation (NYSE:CFX) Q4 2018 Earnings Conference Call Transcript

Feb 13, 2019 • 08:30 am ET

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Colfax Corporation (NYSE:CFX) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the Colfax Fourth Quarter Earnings Call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will have a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder, today's conference is being recorded for replay purposes.

It is now my pleasure to turn the conference over to your host, Mr. Kevin Johnson, Vice President of Finance. Please proceed.

Executive
Kevin Johnson

Thank you, Haley. Good morning, everyone, and thank you for joining us. My name is Kevin Johnson, and I'm Vice President of Finance at Colfax. Joining me on the call today are Matt Trerotola, President and CEO; and Chris Hix, Senior Vice President and CFO.

Our earnings release was issued this morning and is available in the Investors section of our website, colfaxcorp.com. We will be using a slide presentation to walk you through today's call, which can also be found on our website. Both the audio and slide presentation of this call will be archived on the website later today and will be available until the next quarterly earnings call.

During this call, we'll be making some forward-looking statements about our beliefs and estimates regarding future events and results. These forward-looking statements are subject to risks and uncertainties, including those set forth in our SEC filings. Actual results might differ materially from any forward-looking statements that we make today. The forward-looking statements speak only as of today, and we do not assume any obligation or intend to update them, except as required by law.

With respect to any non-GAAP financial measures made during the call today, the accompanying reconciliation information relating to those measures can be found in our earnings press release and today's slide presentation.

Now I'd like to turn it over to Matt, who will start on Slide 3.

Executive
Matthew L. Trerotola

Thanks, Kevin, and good morning. 2018 has been a transformational year for Colfax, during which we reshaped our Company and established an even stronger foundation for our future. First, we finished the year with strong financial results, including earnings growth of 33%, placing us well ahead of the commitment we made in December of 2017.

ESAB achieved strong and accelerating sales growth across all regions, including strong contributions from new products and the team has done a great job of protecting margins in a year of notable cost escalation.

Our Howden business recovered from the market challenges of late 2017 and the team has gotten the business firmly back on a path to mid-teen segment margins. They've successfully grown sales in the faster growing industrial applications, which are now half of the business, and Howden exits 2018 with strong momentum on both order growth and margins and is well placed for a strong performance in 2019. We've successfully driven restructuring actions within both of our businesses and delivered $37 million of restructuring cost savings.

Our progress improving the vitality of both businesses shows the power of CBS and supports our margin and