Slide 1: Third Quarter 2011 Earnings Call
Third Quarter 2011 Earnings Call October 27, 2011
Slide 2: Forward-Looking Statements
Q3 2011 Earnings Call 1 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'
Slide 3: Q3 2011 Highlights
Q3 2011 Earnings Call 2 ▪ Adjusted net income of $16.3 million (37 cents per share) compared to $9.5 million (22 cents per share) in Q3 2010, an increase of 71.6%; Q3 2011 results include the positive 2 cent per share effect of currency translation ▪ Net sales of $170.3 million compared to $132.4 mi
Slide 4: Year to Date 2011 Highlights
Q3 2011 Earnings Call 3 ▪ Adjusted net income of $40.5 million (91 cents per share) compared to $23.3 million (53 cents per share) for year to date 2010, an increase of 73.8%; 2011 results include the positive 6 cent per share effect of currency translation ▪ Net sales of $515.6 million compared to
Slide 5: Orders and Backlog
Q3 2011 Earnings Call 4 ____________________ Note: Dollars in millions. Orders Orders and Backlog Backlog $314 $370 $383 $373 $351 $297 $281 $291 $325 $327 $349 $400 $322 $0.0 $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 $350.0 $400.0 $450.0 Q3 2008Q4 2008Q1 2009Q2 2009Q3 2009Q4 2009Q1 2010Q2 2010Q3 201
Slide 6: Revenue and Adjusted Operating Income
Q3 2011 Earnings Call 5 $15.6 $23.9 $39.3 $62.8 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 Q3 2010 Q3 2011 YTD 2010 YTD 2011 Adjusted Operating Income (1) Revenue $132.4 $170.3 $375.3 $515.6 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 Q3 2010Q3 2011 YTD 2010 YTD 2011 Existing Businesses
Slide 7: Q3 2011 Sales and Orders by End Market
Q3 2011 Earnings Call 6 Q3 2011 Sales and Orders by End Market General Industrial 35% Oil & Gas 20% Power Generation 12% Defense 8% Commercial Marine 25% Total Growth (Decline) Organic Growth (Decline) Commercial Marine 26 % 14 % Oil & Gas 89 % 18 % Power Generation (8)% (11)% Defense 3 % 2 % Genera
Slide 8: YTD 2011 Sales and Orders by End Market
Q3 2011 Earnings Call 7 YTD 2011 Sales and Orders by End Market General Industrial 34% Oil & Gas 23% Power Generation 11% Defense 7% Commercial Marine 25% Total Growth Organic Growth (Decline) Commercial Marine 29 % 18 % Oil & Gas 156 % 30 % Power Generation 1 % (1)% Defense 2 % 1 % General Industri
Slide 9: Oil & Gas Market Perspective
Q3 2011 Earnings Call 8 Oil & Gas Market Perspective Highlights and Outlook ▪ Rosscor very robust enabling entry into new accounts ▪ Strong quoting activity in the market ▪ Projects increasing in size Colfax YTD 2011 Sales Split 23% O&G Colfax YTD 2011 Orders Split 23% O&G Sales & Orders Growth Q3 2
Slide 10: General Industrial Market Perspective
Q3 2011 Earnings Call 9 General Industrial Market Perspective Highlights and Outlook ▪ Sales and orders up for the quarter and year to date ▪ Order strength is geographically broad - based, with continued strength in North America, Europe and Asia ▪ Growth in Q3 2011 was spread across our submarkets
Slide 11: Power Generation Market Perspective
Q3 2011 Earnings Call 10 Power Generation Market Perspective Highlights and Outlook ▪ Sales decline due to decision to exit certain business in the Middle East ▪ Record orders for the quarter, including a large project in the Middle East, and growth in South America, the Middle East and Asia ▪ Large
Slide 12: Defense Market Perspective
Q3 2011 Earnings Call 11 Defense Market Perspective Highlights and Outlook ▪ Sales and orders both increased during Q3 2011 ▪ Shipment and order activity continue to follow timing of specific ship programs (large orders are booked and delivered over multiple years) ▪ Two large orders booked this qua
Slide 13: Commercial Marine Market Perspective
Q3 2011 Earnings Call 12 Commercial Marine Market Perspective Colfax YTD 2011 Sales Split 25% Comm. Marine Colfax YTD 2011 Orders Split 24% Comm. Marine Highlights and Outlook ▪ Sales and orders both increased during the quarter, orders for Q3 2010 were relatively weak ▪ Cancellations were $2 millio
Slide 14: Charter Acquisition Rationale
Q3 2011 Earnings Call 13 Charter Acquisition Rationale LAYS FOUNDATION FOR A LEADING MULTI - PLATFORM GLOBAL ENTERPRISE FINANCIALLY COMPELLING PROVIDES LONG - TERM VALUE CREATION OPPORTUNITIES ENHANCES BUSINESS PROFILE ACCELERATES GROWTH STRATEGY
Slide 15: Products & Applications: ESAB
Q3 2011 Earnings Call 14 Products & Applications: ESAB #2 global manufacturer of welding & cutting products; technology & innovation leader Developed Economies Emerging Markets 59% 41% GEOGRAPHIC EXPOSURE 1H 2011 LTM = £1.3b Foremarket Aftermarket 27% 73% AFTERMARKET REVENUES 1H 2011 LTM = £1.3b CON
Slide 16: Products & Applications: Howden
Q3 2011 Earnings Call 15 Products & Applications: Howden Leading global manufacturer of heavy - duty fans and compressors; energy, power and mining key drivers of revenue Foremarket Aftermarket AFTERMARKET REVENUES 1H 2011 LTM = £0.6b 60% 40% Developed Economies 50% Emerging Markets 50% GEOGRAPHIC E
Slide 17: Combined Strength: Enhances Business Profile
Q3 2011 Earnings Call 16 Combined Strength: Enhances Business Profile Meaningful recurring revenue stream 1H 2011 LTM Pro - Forma = $3.5b Aftermarket 55% 45% Foremarket Considerable exposure to emerging markets 1H 2011 LTM Pro - Forma = $3.5b Emerging Markets 44% 56% Developed Markets Balance betwee
Slide 18: Strong Financial Condition
Q3 2011 Earnings Call 17 ▪ Strong balance sheet ▪ Debt of $75 million, principal payments of $10 million in 2011 ▪ Cash of $64 million ▪ $130 million available on revolver Strong Financial Condition
Slide 19: Income Statement Summary: Three Months Ended
Q3 2011 Earnings Call 18 Refer to Appendix for Non - GAAP reconciliation and footnotes. __________________ Note: Dollars in millions. Income Statement Summary (Unaudited) Three Months Ended Change September 30, 2011 October 1, 2010 $ % Orders $ 174.8 $ 124.1 $ 50.7 40.9 % Sales $ 170.3 $ 132.4 $ 37.
Slide 20: Income Statement Summary: Nine Months Ended
Q3 2011 Earnings Call 19 Refer to Appendix for Non - GAAP reconciliation and footnotes. __________________ Note: Dollars in millions. Income Statement Summary (Unaudited) Nine Months Ended Change September 30, 2011 October 1, 2010 $ % Orders $ 529.4 $ 399.2 $ 130.2 32.6 % Sales $ 515.6 $ 375.3 $ 140
Slide 21: Appendix
Q3 2011 Earnings Call 20 Appendix
Slide 22: Non-GAAP Financial Information
Q3 2011 Earnings Call 21 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, earnings before interest, taxes depreciation and amortizati on
Slide 23: Non-GAAP Reconciliation: EBITDA and Adjusted EBITDA
Q3 2011 Earnings Call 22 ____________________ Note: Dollars in thousands. Non - GAAP Reconciliation (unaudited) September 30, 2011 October 1, 2010 September 30, 2011 October 1, 2010 EBITDA Net income 3,690$ 5,851$ 20,635$ 7,565$ Interest expense 1,218 1,544 4,507 5,075 Provision for income taxes 532
Slide 24: Non-GAAP Reconciliation: Adjusted Net Income and EPS
Q3 2011 Earnings Call 23 ____________________ Note: Dollars in thousands, except share data. Non - GAAP Reconciliation (unaudited) (1) As we are currently anticipating a significant reduction in our 2011 adjusted - basis effective tax rate from 32% to 30.5%, the ef fective tax rates used to calculat
Slide 25: Sales & Order Growth
Q3 2011 Earnings Call 24 ____________________ Note: Dollars in millions. Sales & Order Growth - (unaudited) $ % $ % $ % Nine months ended October 1, 2010 375.3$ 399.2$ 351.2$ Components of Change: Existing Businesses 52.6 14.0 % 53.2 13.3 % (17.3) (4.9)% Acquisitions 65.7 17.5 % 55.1 13.8 % 40.6 11.