Slide 1: Second Quarter 2015 Earnings Conference Call
SECOND 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: Q2 2015 Results
Q2 2015 RESULTS
Slide 4: Q2 2015 Highlights
4 Q2 2015 HIGHLIGHTS • Adjusted net income of $63.0 million ($0.50 per share) compared to $59.6 million ($0.48 per share) in Q2 2014 • Q2 2015 excludes non-cash charges of $4.7 million associated with the refinancing of the Company's credit agreement • Net sales of $1.025 billion, a decrease of 14.5
Slide 5: Year to Date 2015 Highlights
5 YEAR TO DATE 2015 HIGHLIGHTS • Adjusted net income of $107.6 million ($0.86 per share) compared to $111.2 million ($0.91 per share) in the six months ended June 27, 2014 • Net sales of $1.936 billion, a decrease of 14.1% from the six months ended June 27, 2014 net sales of $2.254 billion (an organ
Slide 6: Gas and Fluid Handling
GAS AND FLUID HANDLING
Slide 7: Gas and Fluid Handling Q2 2015 Highlights
7 GAS AND FLUID HANDLING Q2 2015 HIGHLIGHTS • Net sales of $504.9 million compared to net sales of $568.9 million in Q2 2014, a decrease of 11.2% (an organic decline of 0.9%) • Adjusted segment operating income of $64.2 million and adjusted segment operating income margin of 12.7% as compared to 8.0
Slide 8: Gas and Fluid Handling YTD 2015 Highlights
8 GAS AND FLUID HANDLING YTD 2015 HIGHLIGHTS • Net sales of $927.1 million compared to net sales of $1.143 billion in the six months ended June 27, 2014, a decrease of 18.9% (an organic decline of 9.1%) • Adjusted segment operating income of $100.5 million and adjusted segment operating income margi
Slide 9: Orders and Backlog
9 ORDERS AND BACKLOG ORDERS BACKLOG Note: Dollars in millions (unaudited). $1.58B QTD YTD Existing Businesses (4.7)% (9.6)% Acquisitions —% —% FX Translation (10.7)% (9.8)% Total Decline (15.4)% (19.4)% $1.35B $1.36B
Slide 10: Geographic Exposure
10 GEOGRAPHIC EXPOSURE YTD 2015 REVENUE REVENUE AFTERMARKET REVENUE YTD 2015 Note: Dollars in millions (unaudited). QTD YTD Existing Businesses (0.9)% (9.1)% Acquisitions —% —% FX Translation (10.3)% (9.8)% Total Decline (11.2)% (18.9)% ▪ Foremarket ▪ Aftermarket ▪ Developed Economies ▪ Emerging Mar
Slide 11: Q2 2015 Sales and Orders by End Market
11 Q2 2015 SALES AND ORDERS BY END MARKET SALES: $504.9 million Total Decline Organic Growth (Decline) Power Generation (5.9)% 0.6% Oil, Gas & Petrochemical (9.9)% 2.8% Marine (6.0)% 8.9% Mining (2.6)% 11.7% General Industrial & Other (21.0)% (10.3)% Total (11.2)% (0.9)% ORDERS: $502.3 million Total
Slide 12: YTD 2015 Sales and Orders by End Market
12 YTD 2015 SALES AND ORDERS BY END MARKET SALES: $927.1 million Total Decline Organic (Decline) Growth Power Generation (21.9)% (15.9)% Oil, Gas & Petrochemical (20.8)% (7.9)% Marine (11.6)% 2.9% Mining (4.1)% 8.7% General Industrial & Other (18.8)% (8.6)% Total (18.9)% (9.1)% ORDERS: $949.3 millio
Slide 13: Power Generation Market Perspective
13 POWER GENERATION MARKET PERSPECTIVE SALES & ORDERS (DECLINE) GROWTH • Served by both Howden and Colfax Fluid Handling • New-build activity offset non-recurring SCR projects in China • Solid aftermarket order growth in North America • Continued focus on new-build market in Southeast and East Asia
Slide 14: Oil, Gas & Petrochemical Market Perspective
14 OIL, GAS & PETROCHEMICAL MARKET PERSPECTIVE SALES & ORDERS (DECLINE) GROWTH • Served by both Howden and Colfax Fluid Handling • Period over period comparisons are difficult due to the timing of large projects • Quarterly order growth led by $40 million supply contract at Howden Compressors Divisi
Slide 15: Marine Market Perspective
15 MARINE MARKET PERSPECTIVE SALES & ORDERS (DECLINE) GROWTH • Primarily served by Colfax Fluid Handling • Year over year comparisons affected by $30 million Defense contract awarded in Q2 2014 • Commercial ship building down • Continued focus on aftermarket growth and expansion of product line YTD
Slide 16: Mining Market Perspective
16 MINING MARKET PERSPECTIVE SALES & ORDERS (DECLINE) GROWTH • Primarily served by Howden • Remains a depressed market; focused on winning targeted projects YTD 2015 SALES SPLIT YTD 2015 ORDERS SPLIT HIGHLIGHTS Q2 2015 vs. Q2 2014 YTD 2015 vs. YTD 2014 Total Organic Total Organic Sales (2.6)% 11.7%
Slide 17: General Industrial & Other Market Perspective
17 GENERAL INDUSTRIAL & OTHER MARKET PERSPECTIVE SALES & ORDERS DECLINE • Includes both Howden and Colfax Fluid Handling • Steel industry spend significantly down compared to prior year • Modest growth in other industrial sectors YTD 2015 SALES SPLIT YTD 2015 ORDERS SPLIT HIGHLIGHTS Q2 2015 vs. Q2 2
Slide 18: Fabrication Technology
FABRICATION TECHNOLOGY
Slide 19: Fabrication Technology Q2 2015 Highlights
19 FABRICATION TECHNOLOGY Q2 2015 HIGHLIGHTS • Net sales of $520.5 million compared to net sales of $630.4 million in Q2 2014, a decrease of 17.4% (an organic decline of 7.8%) • Adjusted segment operating income of $53.9 million and adjusted segment operating income margin of 10.4%
Slide 20: Fabrication Technology YTD 2015 Highlights
20 FABRICATION TECHNOLOGY YTD 2015 HIGHLIGHTS • Net sales of $1.009 billion compared to net sales of $1.111 billion in the six months ended June 27, 2014, a decrease of 9.1% (an organic decline of 7.2%) • Adjusted segment operating income of $111.2 million and adjusted segment operating income margi
Slide 21: Geographic Exposure
21 GEOGRAPHIC EXPOSURE YTD 2015 REVENUE REVENUE REVENUE YTD 2015 Note: Dollars in millions (unaudited). ▪ Consumables ▪ Equipment 74% 26% ▪ Developed Economies ▪ Emerging Markets 47% 53% QTD YTD Volume (3.9)% (4.0)% Price/ Mix (3.9)% (3.2)% Acquisitions 3.1% 11.1% FX Translation (12.7)% (13.0)% Tota
Slide 22: Results of Operations
RESULTS OF OPERATIONS
Slide 23: Income Statement Summary
23 INCOME STATEMENT SUMMARY (unaudited) Refer to Appendix for Non-GAAP reconciliation and footnotes. Note: Dollars in millions, except per share amounts. Three Months Ended Six Months Ended June 26, 2015 June 27, 2014 June 26, 2015 June 27, 2014 Net sales $ 1,025.4 $ 1,199.3 $ 1,936.4 $ 2,253.7 Gros
Slide 24: Colfax
COLFAX > —— Se ——aan
Slide 25: Disclaimer
25 DISCLAIMER Colfax has provided financial information that has not been prepared in accordance with GAAP. These non-GAAP financial measures are projected adjusted net income, projected adjusted net income per share, projected adjusted operating income, adjusted net income, adjusted net income per
Slide 26: Non-GAAP Reconciliation
26 NON-GAAP RECONCILIATION (unaudited) _____________________ Note: Dollars in thousands. Six Months Ended June 26, 2015 Six Months Ended June 27, 2014 Gas and Fluid Handling Fabrication Technology Corporate and Other Total Colfax Corporation Gas and Fluid Handling Fabrication Technology Corporate an
Slide 27: Non-GAAP Reconciliation
27 NON-GAAP RECONCILIATION (unaudited) (1) The effective tax rates used to calculate adjusted net income and adjusted net income per share are 28.3% and 28.8% for the three and six months ended June 26, 2015, respectively, and 30.7% and 29.0% for the three and six months ended June 27, 2014, respect
Slide 28: Change in Sales, Orders and Backlog
28 CHANGE IN SALES, ORDERS AND BACKLOG (unaudited) _____________________ Note: Dollars in millions. (1) Represents the incremental sales as a result of our acquisition of Victor Technologies Holdings, Inc. Net Sales Orders Backlog at Period End $ % $ % $ % As of and for the six months ended June 27,
Slide 29: 2015 Outlook Summary (July Update)
29 2015 OUTLOOK SUMMARY (July Update) _____________________ Note: Guidance as of July 23, 2015. (1) Excludes impact of restructuring charges, gain on reversal of tax accruals and non-cash charges on debt refinancing. (2) Portion of range relates to uncertainty on tax extenders. REVENUE RANGE 2015 To
Slide 30: 2015 Outlook Summary (July Update)
30 2015 OUTLOOK SUMMARY (July Update) _____________________ Note: Guidance as of July 23, 2015. In thousands, except per share data 2015 Low High Revenue $ 4,035,000 $ 4,110,000 Adjusted Operating Profit (1) 405,000 423,000 Interest (47,000 ) (47,000 ) Taxes (104,000 ) (109,000 ) Noncontrolling inte
Slide 31: Non-GAAP Reconciliation (July Update)
31 NON-GAAP RECONCILIATION (July Update) _____________________ Note: Guidance as of July 23, 2015. 2015 EPS Range Low High Projected net income per share - diluted $ 1.61 $ 1.71 Restructuring costs 0.39 0.39 Non-cash charge on debt refinancing (1) 0.04 0.04 Tax adjustment (2) (0.21 ) (0.21 ) Project