Slide 1: Fourth Quarter 2015 Earnings Conference Call
FOURTH QUARTER 2015 | EARNINGS CONFERENCE CALL
Slide 2: Forward-Looking Statements
2 FORWARD-LOOKING STATEMENTS The following information contains forward-looking statements, including forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements concerning Colfax's
Slide 3: Q4 2015 Results
Q4 2015 RESULTS
Slide 4: Q4 2015 Highlights
4 Q4 2015 HIGHLIGHTS • Organic revenue decline of 3.8% • Sequential margin improvement of 350 basis points over Q3 2015 Q4 2015 Q4 2014 (In millions, except per share data) Revenue $ 1,061.5 $ 1,206.4 Adjusted Operating Profit $ 100.6 $ 136.7 Margin % 9.5 % 11.3 % Adjusted Net Income $ 63.0 $ 89.7 A
Slide 5: Full Year 2015 Highlights
5 FULL YEAR 2015 HIGHLIGHTS • Organic revenue decline of 6.6% • Margin decline of 140 basis points Unaudited Year Ended December 31, 2015 2014 (In millions, except per share data) Revenue $ 3,967.1 $ 4,624.5 Adjusted Operating Profit $ 345.8 $ 467.7 Margin % 8.7 % 10.1 % Adjusted Net Income $ 200.1
Slide 6: Gas and Fluid Handling
GAS AND FLUID HANDLING
Slide 7: Gas and Fluid Handling Q4 2015 and Full Year Results
7 GAS AND FLUID HANDLING Q4 2015 AND FULL YEAR RESULTS REVENUE QTD YTD Existing Businesses (2.7)% (7.3)% Acquisitions 3.8% 2.1% FX Translation (9.0)% (9.7)% Total Decline (7.9)% (14.9)% Note: Dollars in millions (unaudited). ADJUSTED OPERATING PROFIT 13.7% 11.8% 10.9% 9.8% AFTERMARKET REVENUE 2015 G
Slide 8: Gas and Fluid Handling Orders and Backlog
8 ORDERS QTD YTD Existing Businesses (18.8)% (12.6)% Acquisitions 5.7% 2.5% FX Translation (9.2)% (9.6)% Total Decline (22.3)% (19.7)% Note: Dollars in millions (unaudited). BACKLOG ORDERS AND BACKLOG YTD Existing Businesses (10.4)% Acquisitions 3.1% FX Translation (11.3)% Total Decline (18.6)%
Slide 9: Q4 2015 Sales and Orders by End Market
9 Q4 2015 SALES AND ORDERS BY END MARKET SALES: $572.8 million Total (Decline) Growth Organic (Decline) Growth Power Generation (24.6)% (17.8)% Oil, Gas & Petrochemical 22.7% 23.6% Marine 7.8% 18.0% Mining (52.1)% (35.5)% General Industrial & Other (2.6)% (1.0)% Total (7.9)% (2.7)% ORDERS: $443.0 mi
Slide 10: Full Year 2015 Sales and Orders by End Market
10 FULL YEAR 2015 SALES AND ORDERS BY END MARKET SALES: $1.982 billion Total Decline Organic (Decline) Growth Power Generation (21.3)% (14.7)% Oil, Gas & Petrochemical (2.6)% 3.0% Marine (9.6)% 3.6% Mining (33.1)% (17.7)% General Industrial & Other (13.9)% (7.0)% Total (14.9)% (7.3)% ORDERS: $1.836
Slide 11: Power Generation Market Perspective
11 POWER GENERATION MARKET PERSPECTIVE SALES & ORDERS DECLINE • Served by both Howden and Colfax Fluid Handling • Sales decline primarily due to SCR projects in China completed in 2014 • Chinese air quality standards will augment 2016 sales and orders • Outlook for new power construction and afterma
Slide 12: Oil, Gas & Petrochemical Market Perspective
12 OIL, GAS & PETROCHEMICAL MARKET PERSPECTIVE SALES & ORDERS GROWTH (DECLINE) • Served by both Howden and Colfax Fluid Handling • Period over period comparisons are difficult due to the timing of large projects with several large orders in fourth quarter of 2014 • Orders year to date only modestly
Slide 13: Marine Market Perspective
13 MARINE MARKET PERSPECTIVE SALES & ORDERS GROWTH (DECLINE) • Primarily served by Colfax Fluid Handling • Fourth quarter growth reflects stabilizing new shipbuilding activity and scope of product expanding with key customers • Full year order decline primarily due to large, multi-year defense order
Slide 14: Mining Market Perspective
14 MINING MARKET PERSPECTIVE SALES & ORDERS DECLINE • Primarily served by Howden • Remains a depressed market; focused on winning targeted projects YTD 2015 SALES SPLIT YTD 2015 ORDERS SPLIT HIGHLIGHTS Q4 2015 vs. Q4 2014 YTD 2015 vs. YTD 2014 Total Organic Total Organic Sales (52.1)% (35.5)% (33.1)
Slide 15: General Industrial & Other Market Perspective
15 GENERAL INDUSTRIAL & OTHER MARKET PERSPECTIVE SALES & ORDERS DECLINE • Includes both Howden and Colfax Fluid Handling • Weak demand for industrial capital equipment driver of sales and order declines • Relatively stronger fourth quarter sales levels driven by project timing, not improved market c
Slide 16: Fabrication Technology
FABRICATION TECHNOLOGY
Slide 17: Fabrication Technology Q4 2015 and Full Year Results
17 FABRICATION TECHNOLOGY Q4 2015 AND FULL YEAR RESULTS REVENUE Note: Dollars in millions (unaudited). ADJUSTED OPERATING PROFIT 10.7% 9.1% 11.6% 10.0% AFTERMARKET REVENUE 2015 GEOGRAPHIC EXPOSURE 2015 QTD YTD Volume (1.3)% (2.4)% Price/ Mix (3.5)% (3.4)% Acquisitions —% 5.4% FX Translation (11.6)%
Slide 18: Results of Operations
RESULTS OF OPERATIONS
Slide 19: Income Statement Summary
19 INCOME STATEMENT SUMMARY (unaudited) Refer to Appendix for Non-GAAP reconciliation and footnotes. Note: Dollars in millions, except per share amounts. Three Months Ended Year Ended December 31, 2015 December 31, 2014 December 31, 2015 December 31, 2014 Net sales $ 1,061.5 $ 1,206.4 $ 3,967.1 $ 4,
Slide 20: Colfax
COLFAX > —— Se ——aan
Slide 21: Disclaimer
21 DISCLAIMER Colfax has provided financial information that has not been prepared in accordance with GAAP. These non-GAAP financial measures are adjusted net income, adjusted net income per share, adjusted operating income, adjusted operating income margin, organic sales growth (decline) and organi
Slide 22: Non-GAAP Reconciliation
22 NON-GAAP RECONCILIATION (unaudited) _____________________ Note: Dollars in thousands. Year Ended December 31, 2015 Year Ended December 31, 2014 Gas and Fluid Handling Fabrication Technology Corporate and Other Total Colfax Corporation Gas and Fluid Handling Fabrication Technology Corporate and Ot
Slide 23: Non-GAAP Reconciliation
23 NON-GAAP RECONCILIATION (unaudited) (1) The effective tax rates used to calculate adjusted net income and adjusted net income per share are 25.1% and 27.5% for the fourth quarter and full year ended December 31, 2015, respectively, and 24.5% and 27.8% for the fourth quarter and full year ended De
Slide 24: Change in Sales, Orders and Backlog
24 CHANGE IN SALES, ORDERS AND BACKLOG (unaudited) _____________________ Note: Dollars in millions. (1) Represents the incremental sales and orders as a result of our acquisitions of RootsTM blowers and compressors and Simsmart Technologies. (2) Represents the incremental sales, orders and order bac
Slide 25: Balance Sheets
25 BALANCE SHEETS (unaudited) _____________________ Note: Dollars in thousands. December 31, 2015 2014 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 197,469 $ 305,448 Trade receivables, less allowance for doubtful accounts of $39,505 and $27,256 888,166 1,029,150 Inventories, net 420,386 442,73
Slide 26: Statements of Cash Flows
26 STATEMENTS OF CASH FLOWS (unaudited) _____________________ Note: Dollars in thousands. Year Ended December 31, 2015 2014 Cash flows from operating activities: Net income $ 187,178 $ 420,273 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortizatio