EX-99.2 3 a992proformafinancialinfor.htm EXHIBIT 99.2 Exhibit


Exhibit 99.2

Unaudited Pro Forma Condensed Consolidated Financial Information

On September 30, 2019, pursuant to the previously disclosed purchase agreement, dated as of May 15, 2019, by and among Colfax Corporation, a Delaware corporation (the “Company”) and certain entities affiliated with KPS Capital Partners, LP (collectively, the “Purchaser”), the Company completed the divestiture of certain subsidiaries and assets comprising the Company’s Air & Gas Handling business (the “Business”). The aggregate purchase price of $1.8 billion comprised $1.67 billion paid at closing, the assumption of certain liabilities, and is subject to certain adjustments pursuant to the purchase agreement.

The sale of the Business is considered a significant disposition for purposes of Item 2.01 of Form 8-K. As a result, the Company prepared the accompanying unaudited pro forma condensed consolidated financial information in accordance with Article 11 of Regulation S-X.

The Company presented its operations for the Air & Gas Handling business as discontinued operations in its condensed consolidated financial statements included in the Form 10-Q for the three and six months ended June 28, 2019. The accompanying unaudited pro forma condensed consolidated statements of operations for the six months ended June 28, 2019 and for years ended December 31, 2018, 2017, and 2016 give effect to this divestiture as if it had occurred on January 1, 2016. The following unaudited pro forma condensed consolidated balance sheet gives effect to this divestiture as if it had occurred on June 28, 2019, the date of the Company’s most recently filed balance sheet.

The unaudited pro forma condensed consolidated financial information should be read in conjunction with (i) the audited consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Colfax’s Form 10-K for the year ended December 31, 2018 filed with the SEC on February 21, 2019, and (ii) the unaudited condensed consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” included in Colfax’s Form 10-Q for the three and six months ended June 28, 2019 filed with the SEC on August 6, 2019.

The unaudited pro forma condensed consolidated financial information is presented based on assumptions, adjustments, and currently available information described in the accompanying notes and is intended for informational purposes only. The unaudited pro forma condensed consolidated financial information is not necessarily indicative of what Colfax’s results of operations or financial condition would have been had the divestiture been completed on the dates assumed. In addition, it is not necessarily indicative of Colfax’s future results of operations or financial condition.





COLFAX CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
June 28, 2019
(Dollars in thousands)

 
 
 
Pro Forma Adjustments
 
 
 
 
Company
As Reported
 
Divestiture of Air & Gas Handling
 
Company
Pro Forma
 
ASSETS
 
 
 
 
 
 
CURRENT ASSETS:
 
 
 
 
 
 
Cash and cash equivalents
$
131,925

 
$
—

 
$
131,925

 
Trade receivables, less allowance for doubtful accounts of $31,678
616,263

 
—

 
616,263

 
Inventories, net
594,800

 
—

 
594,800

 
Other current assets
171,622

 
—

 
171,622

 
Current portion of assets held for sale
2,121,983

 
(2,121,983
)
(a)
—

 
Total current assets
3,636,593

 
(2,121,983
)
 
1,514,610

 
Property, plant and equipment, net
488,956

 
—

 
488,956

 
Goodwill
2,822,093

 
—

 
2,822,093

 
Intangible assets, net
2,314,420

 
—

 
2,314,420

 
Lease asset - right of use
153,924

 
—

 
153,924

 
Other assets
483,267

 
—

 
483,267

 
Total assets
$
9,899,253

 
$
(2,121,983
)
 
$
7,777,270

 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
CURRENT LIABILITIES:
 
 
 
 
 
 
Current portion of long-term debt
$
39,524

 
$
—

 
$
39,524

 
Accounts payable
399,812

 
—

 
399,812

 
Customer advances and billings in excess of costs incurred
16,277

 
—

 
16,277

 
Accrued liabilities
448,558

 
—

 
448,558

 
Current portion of liabilities held for sale
694,384

 
(694,384
)
(a)
—

 
Total current liabilities
1,598,555

 
(694,384
)
 
904,171

 
Long-term debt, less current portion
4,078,232

 
(1,652,188
)
(c)
2,426,044

 
Non-current lease liability
119,398

 
—

 
119,398

 
Other liabilities
846,719

 
—

 
846,719

 
Total liabilities
6,642,904

 
(2,346,572
)
 
4,296,332

 
 
 
 
 
 
 
 
EQUITY:
 
 
 
 
 
 
Total Colfax Corporation equity
3,094,798

 
339,234

(a)
3,434,032

 
Noncontrolling interest
161,551

 
(114,645
)
(b)
46,906

 
Total equity
3,256,349

 
224,589

 
3,480,938

 
Total liabilities and equity
$
9,899,253

 
$
(2,121,983
)
 
$
7,777,270

 

See Notes to unaudited pro forma condensed consolidated financial information.





COLFAX CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Six Months Ended June 28, 2019
(Dollars in thousands, except per share amounts)

 
 
 
Pro Forma Adjustments
 
 
 
 
Company
As Reported
 
Divestiture of Air & Gas Handling
 
Company
Pro Forma
 
Net sales
$
1,592,566

 
$
—

 
$
1,592,566

 
Cost of sales
955,495

 
—

 
955,495

 
Gross profit
637,071

 
—

 
637,071

 
Selling, general and administrative expense
555,788

 
—

 
555,788

 
Restructuring and other related charges
37,416

 
—

 
37,416

 
Operating income
43,867

 
—

 
43,867

 
Interest expense, net
54,992

 
—

 
54,992

 
Loss from continuing operations before income taxes
(11,125
)
 
—

 
(11,125
)
 
Provision for income taxes
8,193

 
(36
)
(g)
8,157

 
Net loss from continuing operations
(19,318
)
 
36

 
(19,282
)
 
Loss from discontinued operations, net of taxes
(495,289
)
 
489,899

(d)
(5,390
)
(f)
Net loss
(514,607
)
 
489,935

 
(24,672
)
 
Less: income attributable to noncontrolling interest, net of taxes
6,650

 
(4,430
)
(b)
2,220

 
Net loss attributable to Colfax Corporation
$
(521,257
)
 
$
494,365

 
$
(26,892
)
 
Net loss per share - basic
 
 
 
 
 
 
Continuing operations
$
(0.16
)
 
$
—

 
$
(0.16
)
 
Discontinued operations
$
(3.70
)
 
$
3.66

 
$
(0.04
)
 
Consolidated operations
$
(3.86
)
 
$
3.66

 
$
(0.20
)
 
Net loss per share - diluted
 
 
 
 
 
 
Continuing operations
$
(0.16
)
 
$
—

 
$
(0.16
)
 
Discontinued operations
$
(3.70
)
 
$
3.66

 
$
(0.04
)
 
Consolidated operations
$
(3.86
)
 
$
3.66

 
$
(0.20
)
 
Weighted-average shares of common stock outstanding:
 
 
 
 
 
 
Basic
134,991,844

 
 
 
134,991,844

 
Diluted
134,991,844

 
 
 
134,991,844

 

See Notes to unaudited pro forma condensed consolidated financial information.






COLFAX CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended December 31, 2018
(Dollars in thousands, except per share amounts)
 
 
 
Pro Forma Adjustments
 
 
 
 
Company
As Reported
 
Divestiture of Air & Gas Handling (e)
 
Company
Pro Forma
 
Net sales
$
3,666,812

 
$
(1,473,729
)
 
$
2,193,083

 
Cost of sales
2,533,973

 
(1,070,266
)
 
1,463,707

 
Gross profit
1,132,839

 
(403,463
)
 
729,376

 
Selling, general and administrative expense
818,210

 
(269,447
)
 
548,763

 
Restructuring and other related charges
77,686

 
(48,609
)
 
29,077

 
Operating income
236,943

 
(85,407
)
 
151,536

 
Pension settlement (gain)
(39
)
 
—

 
(39
)
 
Interest expense (income), net
44,052

 
5,031

 
49,083

 
Loss on short term investments
10,128

 
—

 
10,128

 
Income from continuing operations before income taxes
182,802

 
(90,438
)
 
92,364

 
Income tax (benefit) provision
(21
)
 
1,298

(g)
1,277

 
Net income from continuing operations
182,823

 
(91,736
)
 
91,087

 
Discontinued Operations:
 
 
 
 
 
 
Loss from discontinued operations, net of taxes
(28,350
)
 
—

 
(28,350
)
(f)
Net income
154,473

 
(91,736
)
 
62,737

 
Less: income attributable to noncontrolling interest, net of taxes
14,277

 
(13,616
)
(b)
661

 
Net income attributable to Colfax Corporation
$
140,196

 
$
(78,120
)
 
$
62,076

 
Net income (loss) per share - basic
 
 
 
 
 
 
Continuing operations
$
1.40

 
$
(0.65
)
 
$
0.75

 
Discontinued operations
$
(0.24
)
 
$
—

 
$
(0.24
)
 
Consolidated operations
$
1.16

 
$
(0.65
)
 
$
0.52

*
Net income (loss) per share - diluted
 
 
 
 
 
 
Continuing operations
$
1.40

 
$
(0.65
)
 
$
0.75

 
Discontinued operations
$
(0.24
)
 
$
—

 
$
(0.24
)
 
Consolidated operations
$
1.16

 
$
(0.65
)
 
$
0.51

 
Weighted-average shares of common stock outstanding:
 
 
 
 
 
 
Basic
120,288,297

 
 
 
120,288,297

 
Diluted
120,795,056

 
 
 
120,795,056

 
* Net income per share does not foot due to rounding

See Notes to unaudited pro forma condensed consolidated financial information.





COLFAX CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended December 31, 2017
(Dollars in thousands, except per share amounts)
 
 
 
Pro Forma Adjustments
 
 
 
 
Company
As Reported
 
Divestiture of Air & Gas Handling (e)
 
Company
Pro Forma
 
Net sales
$
3,300,184

 
$
(1,362,902
)
 
$
1,937,282

 
Cost of sales
2,270,709

 
(1,005,006
)
 
1,265,703

 
Gross profit
1,029,475

 
(357,896
)
 
671,579

 
Selling, general and administrative expense
732,340

 
(231,692
)
 
500,648

 
Restructuring and other related charges
68,351

 
(33,018
)
 
35,333

 
Goodwill and intangible asset impairment charge
152,700

 
(152,700
)
 
—

 
Operating income
76,084

 
59,514

 
135,598

 
Pension settlement loss
46,933

 
—

 
46,933

 
Interest expense, net
41,137

 
(1,031
)
 
40,106

 
(Loss) income from continuing operations before income taxes
(11,986
)
 
60,545

 
48,559

 
Income tax provision (benefit)
42,554

 
(63,997
)
(g)
(21,443
)
 
Net (loss) income from continuing operations
(54,540
)
 
124,542

 
70,002

 
Discontinued Operations:
 
 
 
 
 
 
Income from discontinued operations, net of taxes
224,047

 
—

 
224,047

(f)
Net income (loss)
169,507

 
124,542

 
294,049

 
Less: income attributable to noncontrolling interest, net of taxes
18,417

 
(16,844
)
(b)
1,573

 
Net income attributable to Colfax Corporation
$
151,090

 
$
141,386

 
$
292,476

 
Net (loss) income per share - basic
 
 
 
 
 
 
Continuing operations
$
(0.59
)
 
$
1.15

 
$
0.56

 
Discontinued operations
$
1.82

 
$
—

 
$
1.82

 
Consolidated operations
$
1.23

 
$
1.15

 
$
2.37

*
Net (loss) income per share - diluted
 
 
 
 
 
 
Continuing operations
$
(0.59
)
 
$
1.14

 
$
0.55

 
Discontinued operations
$
1.81

(h)
$
—

 
$
1.81

 
Consolidated operations
$
1.22

 
$
1.14

 
$
2.36

 
Weighted-average shares of common stock outstanding:
 
 
 
 
 
 
Basic
123,229,806

 
 
 
123,229,806

 
Diluted
123,229,806

(h)
 
 
123,996,201

 
* Net income per share does not foot due to rounding

See Notes to unaudited pro forma condensed consolidated financial information.







COLFAX CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended December 31, 2016
(Dollars in thousands, except per share amounts)
 
 
 
Pro Forma Adjustments
 
 
 
 
As Reported
 
Divestiture of Air & Gas Handling (e)
 
Pro Forma
 
Net sales
$
3,185,753

 
$
(1,385,261
)
 
$
1,800,492

 
Cost of sales
2,193,371

 
(1,014,827
)
 
1,178,544

 
Gross profit
992,382

 
(370,434
)
 
621,948

 
Selling, general and administrative expense
696,800

 
(220,304
)
 
476,496

 
Restructuring and other related charges
58,496

 
(26,808
)
 
31,688

 
Goodwill and intangible asset impairment charge
238

 
—

 
238

 
Operating income
236,848

 
(123,322
)
 
113,526

 
Pension settlement loss
48

 
—

 
48

 
Interest expense (income), net
30,276

 
569

 
30,845

 
Income from continuing operations before income taxes
206,524

 
(123,891
)
 
82,633

 
Income tax provision
51,772

 
(41,562
)
(g)
10,210

 
Net income from continuing operations
154,752

 
(82,329
)
 
72,423

 
Discontinued Operations:
 
 
 
 
 
 
Loss from discontinued operations, net of taxes
(9,561
)
 
—

 
(9,561
)
(e)
Net income
145,191

 
(82,329
)
 
62,862

 
Less: income (loss) attributable to noncontrolling interest, net of taxes
17,080

 
(17,173
)
(b)
(93
)
 
Net income attributable to Colfax Corporation
$
128,111

 
$
(65,156
)
 
$
62,955

 
Net income (loss) per share - basic
 
 
 
 
 
 
Continuing operations
$
1.12

 
$
(0.53
)
 
$
0.59

 
Discontinued operations
$
(0.08
)
 
$
—

 
$
(0.08
)
 
Consolidated operations
$
1.04

 
$
(0.53
)
 
$
0.51

 
Net income (loss) per share - diluted
 
 
 
 
 
 
Continuing operations
$
1.12

 
$
(0.53
)
 
$
0.59

 
Discontinued operations
$
(0.08
)
 
$
—

 
$
(0.08
)
 
Consolidated operations
$
1.04

 
$
(0.53
)
 
$
0.51

 
Weighted-average shares of common stock outstanding:
 
 
 
 
 
 
Basic
122,911,581

 
 
 
122,911,581

 
Diluted
123,198,726

 
 
 
123,198,726

 

See Notes to unaudited pro forma condensed consolidated financial information.




COLFAX CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

(a)
Adjustment reflects the assets and liabilities of the Air & Gas Handling business, which were previously classified as held for sale, and the related equity.

(b)
Adjustment represents noncontrolling interests in subsidiaries which were historically part of the Air & Gas Handling business.

(c)
Adjustment reflects the use of the cash proceeds from the sale of the Air & Gas Handling business, net of transaction expenses and estimated taxes, to pay down debt.

(d)
Adjustment reflects the historical loss from discontinued operations, net of tax, associated with the Air & Gas Handling business.

(e)
Adjustment reflects the discontinued operations of the Air & Gas Handling business, except as otherwise noted.

(f)
The income (loss) from discontinued operations, net of tax, remaining after removing the Air & Gas Handling business, relates to the historical Fluid Handling discontinued operations including the Company's retained asbestos-related activities and gain on disposal associated with the Fluid Handling business.

(g)
Adjustment represents the tax effects of the Air & Gas Handling business divestiture to achieve the pro forma tax for the continuing operations of Colfax.

(h)
The weighted-average shares of common stock outstanding used in the diluted net income per share from discontinued operations for the year ended December 31, 2017 includes an additional 0.8 million potentially dilutive securities.