The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and notes included in Part I, Item I "Financial Statements" of this quarterly report and the audited financial statements and related footnotes included in our Prospectus that forms a part of our Registration Statement on Form S-1, as amended (Registration No. 333-148486), which Prospectus was filed pursuant to Rule 424(b)(4) on May 8, 2008.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements contained in this Form 10-Q that are not historical facts are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Exchange Act. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this Form 10-Q is filed with the SEC. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including statements regarding: projections of revenue, profit margins, expenses, tax provisions and tax rates, earnings or losses from operations, cash flows, pension and benefit obligations and funding requirements, synergies or other financial items; plans, strategies and objectives of management for future operations including statements relating to potential acquisitions, compensation plans, purchase commitments; developments, performance or industry or market rankings relating to products or services; future economic conditions or performance; the outcome of outstanding claims or legal proceedings including asbestos-related and insurance liabilities; potential gains and recoveries of costs; assumptions underlying any of the foregoing; and any other statements that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future. Forward-looking statements may be characterized by terminology such as "believe," "anticipate," "should," "would," "intend," "plan," "will," "expects," "estimates," "projects," "positioned," "strategy," and similar expressions. These statements are based on assumptions and assessments made by our management in light of their experience and perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including but not limited to the following:

• risks associated with our international operations;

• significant movements in foreign currency exchange rates;

• the competitive environment in our industry;

• our ability to identify and successfully integrate attractive acquisition targets;

• the amount of and our ability to estimate our asbestos-related liabilities;

• the solvency of our insurers and the likelihood of payment for asbestos-related claims;

• our ability to manage and grow our business and execution of our business and growth strategies;

• the level of capital investment and expenditures by our customers in our strategic markets;

• our ability to expand our business in our targeted markets;

• our ability to cross-sell our product portfolio to existing customers;

• our financial performance; and

• others risks and factors, listed under the "Risk Factors" section of our Prospectus that forms a part of our Registration Statement on Form S-1, as amended (Registration No. 333-148486), which Prospectus was filed pursuant to Rule 424(b)(4) on May 8, 2008.

Any such forward-looking statements are not guarantees of future performance and actual results, developments and business decisions may differ materially from those envisaged by such forward-looking statements. These forward-looking statements speak only as of the date this Form 10-Q is filed with the SEC. We do not assume any obligation and do not intend to update any forward-looking statement except as required by law. See the "Risk Factors" section of our Prospectus that forms a part of our Registration Statement on Form S-1, as amended (Registration No. 333-148486), which Prospectus was filed pursuant to Rule 424(b)(4) on May 8, 2008 for a further discussion regarding some of the reasons that actual results may be materially different from those that we anticipate.

Overview

We are a global supplier of a broad range of fluid handling products, including pumps, fluid handling systems and specialty valves. We believe that we are a leading manufacturer of rotary positive displacement pumps, which include screw pumps, gear pumps and progressive cavity pumps. We have a global manufacturing footprint, with production facilities in Europe, North America and Asia, as well as worldwide sales and distribution channels. Our products serve a variety of applications in five strategic markets: commercial marine, oil and gas, power generation, global navy and general industrial. We design and engineer our products to high quality and reliability standards for use in critical fluid handling applications where performance is paramount. We also offer customized fluid handling solutions to meet individual customer needs based on our in-depth technical knowledge of the applications in which our products are used. Our products are marketed principally under the Allweiler, Fairmount, Houttuin, Imo, LSC, Portland Valve, Tushaco, Warren and Zenith brand names. We believe that our brands are widely known and have a premium position in our industry. Allweiler, Houttuin, Imo and Warren are among the oldest and most recognized brands in the markets in which we participate, with Allweiler dating back to 1860.

We believe that one of our most significant competitive advantages comes through a comprehensive set of tools and processes we employ that we refer to as the Colfax Business System ("CBS"). CBS is a disciplined strategic planning and execution methodology designed to achieve excellence and world-class financial performance in all aspects of our business by focusing on the Voice of the Customer and continuously improving quality, delivery and cost.

Outlook

We believe that we are well positioned to continue to grow organically by enhancing our product offerings and expanding our customer base in each of our strategic markets. We expect favorable market conditions to continue throughout 2008 as follows:

• In the commercial marine industry, we expect growth in international trade and high demand for crude oil to continue to create demand for container ships and tankers.

• We expect activity within the global oil and gas market to remain favorable as capacity constraints and increased global demand keep oil and gas prices elevated.

• In the power generation industry, we expect activity in Asia and the Middle East to be robust as economic growth continues to drive significant investment in energy infrastructure projects.

• In the global navy industry, we expect that sovereign nations outside of the U.S. will continue to expand their fleets as they address national security concerns. In the U.S., we expect Congress to continue to appropriate funds for new ship construction for the next generation of naval vessels as older classes are decommissioned. We also expect increased demand for integrated fluid handling systems and solutions for both new ship platforms and existing ship classes that reduce operating costs and improve efficiency as the U.S. Navy seeks to man vessels with fewer personnel.

• In the general industrial market, we expect that the continued economic development of regions throughout the world will continue to drive increased capital investment and will benefit local suppliers as well as international exporters of fluid handling equipment.

Our global manufacturing sales and distribution network allows us to target fast growing regions throughout the world. We have production and distribution facilities in both India and China. We intend to leverage these investments to substantially grow our market share in these emerging markets and plan to continue to invest in sales and marketing resources to increase our overall coverage.

We will also continue to target aftermarket opportunities in our strategic markets as we generally are able to generate higher margins on aftermarket parts and service than on foremarket opportunities. For the three and six months ended June 27, 2008 aftermarket sales and services represented approximately 25% of our revenues.

We also expect to continue to grow as a result of strategic acquisitions. We believe that the extensive experience of our management team in acquiring and effectively integrating acquisition targets should enable us to capitalize on opportunities in the future.

Key Performance Measures

The discussion of our results of operations that follows focuses on some of the key financial measures that we use to evaluate our business. We evaluate growth using several measures described below, including net sales, orders and order backlog. Our sales growth is affected by many factors, particularly the impact of acquisitions, the impact of fluctuating foreign exchange rates, and growth in our existing businesses. To facilitate the comparison between reporting periods, we describe the impact of each of these three factors on our sales growth below in tabular format under the heading "Sales and Orders."

Orders and order backlog are highly indicative of our future revenue and thus a key measure of anticipated performance. Orders consist of orders for products or services from our customers. Order backlog consists of unfilled orders.

Seasonality

We experience seasonality in our fluid handling business. As our customers seek to fully utilize capital spending budgets before the end of the year, our shipments generally peak during the fourth quarter. Also, our European operations typically experience a slowdown during the July and August holiday season.

Results of Operations

Items Affecting Comparability of Reported Results

The comparability of our operating results for the three and six months ended June 27, 2008 and June 29, 2007 is affected by the following significant items:

Acquisitions

Acquisitions significantly affect our reported results and can make period to period comparisons of results difficult. As a result, we disclose our sales growth between periods both from existing and acquired businesses.

On January 31, 2007, we completed the acquisition of Lubrication Systems Company of Texas ("LSC"), a manufacturer of fluid handling systems, including oil mist lubrication and oil purification systems. LSC strengthens our presence in the oil and gas end-market, particularly in the downstream refinery segment, broadens our overall lubrication portfolio, and presents the opportunity to expand its product application to other markets.

On November 29, 2007, we acquired Fairmount Automation, Inc. ("Fairmount"), an original equipment manufacturer of mission critical programmable automation controllers in fluid handling applications primarily for the U.S. Navy. In addition to strengthening our existing position with the U.S. Navy, we intend to leverage Fairmount's experienced engineering talent and technology expertise to develop a portfolio of fluid handling solutions with diagnostic and prognostic capabilities for industrial applications.

Foreign Currency Fluctuations

A significant portion of our sales, approximately 71.2% and 70.6%, respectively, for the three and six months ended June 27, 2008, is denominated in currencies other than the U.S. dollar, most notably the Euro and the Swedish Krona. Because much of our manufacturing and employee costs are outside the U.S., a significant portion of our costs are also denominated in currencies other than the U.S. dollar. Changes in foreign exchange rates can impact our results and is quantified, when significant, in our discussion of the results of our operations.

IPO-related Costs

Results for the three months and six months ended June 27, 2008 include $57.0 million of nonrecurring costs associated with our IPO. This amount includes $10.0 million of share based compensation and $27.8 million of special cash bonuses paid under previously adopted executive compensation plans as well as $2.8 million of employer payroll taxes and other related costs. It also included $11.8 million to reimburse the selling stockholders for the underwriting discount on the shares sold by them; and the write off of $4.6 million of deferred loan costs associated with the early termination of a credit facility.

Legacy Legal Adjustment

Selling, general and administrative expenses for the three and six months ended June 27, 2008 include a $4.1 million charge to legacy legal reserves in the second quarter related to ongoing non-asbestos litigation based upon recent advice of legal counsel regarding probable outcome based on available defenses, availability of witnesses and estimated range of loss. This litigation arose from the sale and subsequent repair of a product by a division of a subsidiary that was divested prior to Colfax's acquisition of the subsidiary. We have not been in the business of supplying or servicing this type of product for in excess of 15 years.

Legacy Asbestos (Income) Expense

Legacy asbestos (income) expense includes all asbestos-related costs and is comprised of projected indemnity cost, changes in the projected asbestos liability, changes in the probable insurance recovery of the projected asbestos-related liability, changes in the probable recovery of asbestos liability and defense costs paid in prior periods, and actual defense costs expensed in the period ("Asbestos liability and defense costs (income)"). It also includes legal costs related to the actions against two of our subsidiaries' respective insurers and a former parent company of one of the subsidiaries ("Asbestos coverage litigation expenses"). See "-Asbestos-Related Litigation" above for a further discussion of legacy asbestos expenses.

The table below presents legacy asbestos (income) expense for the periods indicated:

                                                       Three Months Ended                Six Months Ended
                                                   June 27,          June 29,       June 27,          June 29,
(Amounts in millions)                                2008              2007           2008              2007
Asbestos liability and defense costs (income)     $     (0.7 )      $      0.6     $     (0.4 )      $     (1.7 )
Asbestos coverage litigation expenses             $      4.0        $      3.7     $      7.1        $      5.9

Asbestos liability and defense costs (income) was $(0.7) million and $(0.4) million, net of estimated insurance recoveries, for the three and six months ended June 27, 2008 compared to $0.6 million and $(1.7) million for the three and six months ended June 29, 2007, respectively. Fluctuations among the periods were primarily caused by two items: (i) the timing of settlements received by insurers which related to insurance policies which were not included in the Company's 15 year estimate of asbestos-related liability cost and, as such, were recorded as income or (ii) an increase to the insurance receivable based upon an acknowledgement by an insurer of additional solvent coverage.

Legal costs related to the subsidiaries' action against their asbestos insurers were $4.0 million and $7.1 million for the three and six months ended June 27, 2008 compared to $3.7 million and $5.9 million for the three and six months ended June 29, 2007, respectively. See "-Note 12 Commitments and Contingencies-Asbestos Liabilities and Insurance Assets" for a further discussion of recent developments in asbestos litigation.

Sales and Orders

Our sales growth is affected by many factors including acquisitions, the impact of fluctuating foreign exchange rates, and growth in our existing businesses. To facilitate the comparison between reporting periods, we disclose the impact of each of these three factors. Growth due to acquisitions includes incremental sales due to an acquisition during the period or incremental sales due to reporting a full year's sales for an acquisition that occurred in the prior year. The impact of foreign currency translation is the difference between sales from existing businesses valued at current year foreign exchange rates and the same sales valued at prior year foreign exchange rates. Sales growth from existing businesses excludes both the impact of acquisitions and foreign exchange rate fluctuations, thus providing a measure of growth due to factors such as price, mix and volume.

Orders and order backlog are highly indicative of our future revenue and thus key measures of anticipated performance. Orders consist of orders for products or services from our customers. Order backlog consists of unfilled orders. The components of order growth are presented on the same basis as sales growth.

The following tables present components of our sales and order growth, as well as sales by fluid handling product for the periods indicated:

                                       Sales              Orders
(Amounts in millions)                 $       %          $       %
Three Months Ended June 29, 2007   $ 122.4            $ 140.6

Components of Growth:
Existing Businesses                   22.4   18.3 %      26.5   18.8 %
Acquisitions                           1.0    0.8 %       4.3    3.1 %
Foreign Currency Translation          15.6   12.7 %      17.4   12.4 %

Total Growth                          39.0   31.9 %      48.2   34.3 %

Three Months Ended June 27, 2008   $ 161.4            $ 188.8


                                       Sales              Orders          Backlog at
(Amounts in millions)                 $       %          $       %        Period End
Six Months Ended June 29, 2007     $ 237.2            $ 271.4            $      224.7

Components of Growth:
Existing Businesses                   24.8   10.5 %      58.1   21.4 %          107.4   47.8 %
Acquisitions                           3.5    1.5 %       6.4    2.4 %           12.3    5.5 %
Foreign Currency Translation          26.6   11.2 %      33.2   12.2 %           39.6   17.6 %

Total Growth                          54.9   23.1 %      97.7   36.0 %          159.3   70.9 %

Six Months Ended June 27, 2008     $ 292.1            $ 369.1            $      384.0

                                                     Three Months Ended         Six Months Ended
                                                    June 27,     June 29,     June 27,     June 29,
(Amounts in millions)                                 2008         2007         2008         2007
Net Sales by Product:
Pumps, including aftermarket parts and service     $    129.3    $    99.2   $    243.1   $    200.1
Systems, including installation service                  27.0         19.5         39.3         28.3
Valves                                                    2.1          2.4          3.8          5.1
Other                                                     3.0          1.3          5.9          3.7

Total net sales                                    $    161.4    $   122.4   $    292.1   $    237.2

As detailed above, sales growth from existing business increased 18.3% and 10.5% for the three and six months periods ended June 27, 2008, respectively, over the comparable period in the prior year. In both periods, these increases were primarily attributable to increased volume and demand in the commercial marine, general industrial and power generation end-markets. Commercial marine sales grew 13.6% and 5.8% for the three and six month periods ended June 27, 2008, respectively. Sales for the general industrial end market grew 25.7% and 19.2% for the three and six month periods ended June 27, 2008, respectively. Sales for the power generation end market grew 61.0% and 46.5% for the three and six month periods ended June 27, 2008, respectively. Oil and gas sales were down 5.3% for the quarter and 14.7% for the year to date period primarily due to an unusually large project that was delivered in the second quarter of 2007. Navy sales were down 35.6% and 31.2% for the quarter and year to date periods. We expect increased Navy revenue in the second half of 2008.

Acquisition growth of 0.8% for the quarter was due to the acquisition of Fairmount on November 29, 2007. Year to date acquisition growth of 1.5% was due to the acquisition of LSC on January 31, 2007 and Fairmount on November 29, 2007. Foreign currency translation increased sales and orders in both the quarter to date and year to date periods. These increases were primarily due to the weakening of the U.S. dollar against the Euro.

Order growth was strong during the quarter and year to date periods ended June 27, 2008. Most notably, commercial marine orders increased by 6.3% and 37.2% during the quarter to date and year to date periods ended June 27, 2008, respectively. In the power generation market, orders were up 31.5% for the quarter and 19.3% year to date. In the oil and gas end market, orders were up 63.2% for the quarter and 11.1% year to date. In the general industrial end market, orders were up 19.5% for the quarter and 15.0% year to date. Navy orders were down 15.0% for the quarter but up 20.4% year to date.

Gross Profit

The following table presents our gross profit and gross profit margin figures
for the periods indicated:



                                   Three Months Ended             Six Months Ended
                               June 27,         June 29,       June 27,       June 29,
       (Amounts in millions)     2008             2007           2008           2007
       Gross Profit            $    56.8       $     43.0     $    105.0     $     81.9
       Gross Profit Margin          35.2 %           35.2 %         35.9 %         34.5 %

Gross profit for the three months ended June 27, 2008 increased $13.8 million, or 32.1%, from the comparable period in the prior year. Of the $13.8 million increase, $8.0 million was attributable to growth from existing businesses, $0.5 million was due to the acquisition of Fairmount on November 29, 2007, and $5.2 million was due to the impact of foreign exchange rates.

Gross profit for the six months ended June 27, 2008 increased $23.1 million, or 28.2%, from the comparable period in the prior year. Of the $23.1 million increase, $12.5 million was attributable to growth from existing businesses, $1.4 million was due to the acquisition of LSC on January 31, 2007 and Fairmount on November 29, 2007, and $9.2 million was due to the impact of foreign exchange rates.

For the quarter gross profit margins were flat when compared with the prior year but increased 140 basis points for the year to date period. For the quarter margin remained flat as unfavorable mix offset leverage from increased volume. Sales to the higher margin oil and gas end market were 11.1% of total sales in the current year quarter as compared to 16.1% of total sales in the comparable prior year period. The margin improvement for the year to date period was primarily driven by the Company's European operations and reflects increased aftermarket sales and favorable pricing and cost control in the commercial marine market.

Selling, General and Administrative Expenses ("SG&A")

The following table presents our selling, general and administrative expenses for the periods indicated:

                                                 Three Months Ended                  Six Months Ended
                                             June 27,          June 29,         June 27,          June 29,
(Amounts in millions)                          2008              2007             2008              2007
SG&A Expenses                                $    35.8        $     25.4       $     64.3        $     48.5
SG&A Expenses as a percentage of sales            22.2 %            20.8 %           22.0 %            20.5 %

Selling, general and administrative expenses increased $10.4 million to $35.8 million for the three months ended June 27, 2008 compared to $25.4 million for the three months ended June 29, 2007. Of the $10.4 million increase, $4.1 million relates to a charge for a legacy legal matter, while $2.6 million was due to the impact of foreign exchange rates and $0.4 million was due to the acquisition of Fairmount. The remaining increase was primarily due to increased variable selling expenses and increased professional and other costs associated with becoming a public company during the three months ended June 27, 2008. Excluding the effect of the $4.1million charge to legacy legal reserves, selling, general and administrative expenses as a percent of sales would be 19.6%, a 120 basis point decrease from the prior year period which is primarily the result of timing and leverage.

Selling, general and administrative expenses increased $15.8 million to $64.3 million for the six months ended June 27, 2008 compared to $48.5 million for the six months ended June 29, 2007. Of the $15.8 million increase, $4.1 million relates to a charge for a legacy legal matter, while $4.8 million was due to the impact of foreign exchange rates and $1.3 million was due to the acquisitions of Fairmount and LSC. The remaining increase was primarily due to variable selling expenses and increased audit and professional fees and other costs associated with becoming a public company during the six months ended June 27, 2008 and a gain in the prior year period of $1.1 million from the sale of available for sale equity securities. Excluding the effect of the $4.1 million charge to legacy legal reserves, selling, general and administrative expenses as a percent of sales would be 20.6% for the six months ended June 27, 2008. Excluding the effect of the $1.1 million gain from the sale of securities, selling, general and administrative expenses as a percent of sales would be 20.9 % for the six months ended June 29, 2007.

Operating (Loss) Income

The table below presents operating income data for the periods indicated:



                                   Three Months Ended              Six Months Ended
                                June 27,         June 29,       June 27,       June 29,
     (Amounts in millions)        2008             2007           2008           2007
. . .