Slide 1: Third Quarter 2014 Earnings Conference Call
THIRD QUARTER 2014 | 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: Colfax
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Slide 4: Q3 2014 Highlights
4 Q3 2014 HIGHLIGHTS • Adjusted net income of $71.3 million ($0.57 per share) compared to $64.1 million ($0.56 per share) in Q3 2013 – Q3 2013 included non-cash gains of $0.04 related to adjustments to deferred tax balances • Net sales of $1.16 billion, an increase of 14.8% from Q3 2013 net sales of
Slide 5: Year to Date 2014 Highlights
5 YEAR TO DATE 2014 HIGHLIGHTS • Adjusted net income of $182.5 million ($1.48 per share) compared to $159.7 million ($1.41 per share) in the nine months ended September 27, 2013 • Net sales of $3.42 billion, an increase of 12.6% from the nine months ended September 27, 2013 net sales of $3.04 billio
Slide 6: Gas and Fluid Handling
GAS AND FLUID HANDLING
Slide 7: Gas and Fluid Handling Q3 2014 Highlights
7 GAS AND FLUID HANDLING Q3 2014 HIGHLIGHTS • Net sales of $564.7 million compared to net sales of $511.4 million in Q3 2013, an increase of 10.4% (an organic decline of 5.3%) • Adjusted segment operating income of $67.3 million and adjusted segment operating income margin of 11.9% • Third quarter o
Slide 8: Gas and Fluid Handling YTD 2014 Highlights
8 GAS AND FLUID HANDLING YTD 2014 HIGHLIGHTS • Net sales of $1.71 billion compared to net sales of $1.45 billion in the nine months ended September 27, 2013, an increase of 17.5% (flat organically) • Adjusted segment operating income of $168.9 million and adjusted segment operating income margin of
Slide 9: Orders and Backlog
9 ORDERS AND BACKLOG $533.3 $539.4 $1,513.6 $1,716.6 $0.0 $200.0 $400.0 $600.0 $800.0 $1,000.0 $1,200.0 $1,400.0 $1,600.0 $1,800.0 Q3 2013 Q3 2014 YTD 2013 YTD 2014 - 200.0 400.0 600.0 800.0 1,000.0 1,200.0 1,400.0 1,600.0 1,800.0 ORDERS BACKLOG(1) (1) Backlog data for the periods prior to Q1 2012 a
Slide 10: Geographic Exposure
10 GEOGRAPHIC EXPOSURE YTD 2014 REVENUE $511.4 $564.7 $1,453.2 $1,707.5 $0.0 $200.0 $400.0 $600.0 $800.0 $1,000.0 $1,200.0 $1,400.0 $1,600.0 $1,800.0 Q3 2013 Q3 2014 YTD 2013 YTD 2014 66% 34% Foremarket Aftermarket REVENUE AFTERMARKET REVENUE YTD 2014 57% 43% Developed Economies Emerging Markets Not
Slide 11: Q3 2014 Sales and Orders by End Market
11 Q3 2014 SALES AND ORDERS BY END MARKET Power Generation 35% Oil, Gas & Petro-chemical 20% Marine 11% Mining 6% General Industrial and Other 28% SALES: $564.7 Million Total Growth (Decline) Organic (Decline) Growth Power Generation 4.4% (7.5)% Oil, Gas & Petrochemical (4.6)% (11.7)% Marine 0.0% 1.
Slide 12: YTD 2014 Sales and Orders by End Market
12 YTD 2014 SALES AND ORDERS BY END MARKET Power Generation 36% Oil, Gas & Petro-chemical 20% Marine 10% Mining 5% General Industrial and Other 29% SALES: $1.71 Billion Total Growth Organic Growth (Decline) Power Generation 10.9% 1.2% Oil, Gas & Petrochemical 5.9% (7.4)% Marine 3.8% 2.2% Mining 36.8
Slide 13: Power Generation Market Perspective
13 POWER GENERATION MARKET PERSPECTIVE SALES & ORDERS GROWTH (DECLINE) 34% • Served by both Howden and Colfax Fluid Handling • Lower sales due to new-build project timing in China and slow aftermarket sales in the U.S. • Howden saw declines in China SCR orders, partially offset by continued strong i
Slide 14: Oil, Gas & Petrochemical Market Perspective
14 OIL, GAS & PETROCHEMICAL MARKET PERSPECTIVE SALES & ORDERS (DECLINE) GROWTH 18% • Served by both Howden and Colfax Fluid Handling • Period over period comparisons are difficult due to the timing of large projects • Revenue declines due to softening order book; received $20 million turbo fan order
Slide 15: Marine Market Perspective
15 MARINE MARKET PERSPECTIVE SALES & ORDERS GROWTH 14% • Primarily served by Colfax Fluid Handling • Continued strength in offshore supply vessel (OSV), with continued pricing pressure in commercial marine • Excellent quarter for bookings, led by defense, strong OSV and continued success of CM-1000
Slide 16: Mining Market Perspective
16 MINING MARKET PERSPECTIVE SALES & ORDERS GROWTH (DECLINE) 5% • Primarily served by Howden • Remains a depressed market; faced subdued spending for the past year and a half • Some bright spots, including expansion into hard rock mining in China with our first order received during the quarter • Or
Slide 17: General Industrial & Other Market Perspective
17 GENERAL INDUSTRIAL & OTHER MARKET PERSPECTIVE SALES & ORDERS GROWTH (DECLINE) 29% • Includes both Howden and Colfax Fluid Handling • Volatile quarter to quarter due to large orders • Near term opportunities for fans and large gas-gas heaters in China for steel plants to be fitted with flue-gas de
Slide 18: Fabrication Technology
FABRICATION TECHNOLOGY
Slide 19: Fabrication Technology Q3 2014 Highlights
19 FABRICATION TECHNOLOGY Q3 2014 HIGHLIGHTS • Net sales of $599.8 million compared to net sales of $503.2 million in Q3 2013, an increase of 19.2% (an organic decline of 2.3%) • Adjusted segment operating income of $72.2 million and adjusted segment operating income margin of 12.0% – Improvement ov
Slide 20: Fabrication Technology YTD 2014 Highlights
20 FABRICATION TECHNOLOGY YTD 2014 HIGHLIGHTS • Net sales of $1.71 billion compared to net sales of $1.58 billion in the nine months ended September 27, 2013, an increase of 8.1% (an organic decline of 2.6%) • Adjusted segment operating income of $203.1 million and adjusted segment operating income
Slide 21: Geographic Exposure
21 GEOGRAPHIC EXPOSURE YTD 2014 REVENUE $503.2 $599.8 $1,582.6 $1,710.6 $0.0 $200.0 $400.0 $600.0 $800.0 $1,000.0 $1,200.0 $1,400.0 $1,600.0 $1,800.0 Q3 2013 Q3 2014 YTD 2013 YTD 2014 74% 26% Consumables Equipment REVENUE REVENUE YTD 2014 48% 52% Developed Economies Emerging Markets Note: Dollars in
Slide 22: Results of Operations
RESULTS OF OPERATIONS
Slide 23: Income Statement Summary
23 INCOME STATEMENT SUMMARY (unaudited) Refer to Appendix for Non-GAAP reconciliation and footnotes. Note: Dollars in millions, except per share amounts. September 26, 2014 September 27, 2013 September 26, 2014 September 27, 2013 Net sales 1,164.5$ 1,014.6$ 3,418.1$ 3,035.8$ Gross profit 373.2$ 320.
Slide 24: eee. SS
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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, adjusted net income, adjusted net income per share, adjusted operating income, org
Slide 26: Non-GAAP Reconciliation
26 NON-GAAP RECONCILIATION (unaudited) _____________________ Note: Dollars in thousands. Corporate and Other Corporate and Other Net sales -$ Operating income (loss) 65,182 11.5 % 65,283 10.9 % (11,659) 118,806 10.2 % 64,135 12.5 % 52,124 10.4 % (13,461) 102,798 10.1 % Restructuring and other relate
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 29.8% and 29.3% for the third quarter and nine months ended September 26, 2014, respectively, and 21.7% and 26.2% for the third quarter and nine months ended
Slide 28: Sales & Orders Growth
28 SALES & ORDERS GROWTH (unaudited) _____________________ Note: Dollars in millions. (1) Represents the incremental sales, orders and order backlog as a result of our acquisitions of Clarus Fluid Intelligence, LLC, CKD Kompressory a.s., the global industrial and industry division of Flakt Woods Gro
Slide 29: 2014 Outlook Summary (October Update)
29 2014 OUTLOOK SUMMARY (October Update) _____________________ Note: Guidance as of October 23, 2014. Revenue Range 2014 Total $4.675 billion To $4.725 billion EPS and Adjusted Net Income Range 2014 Net income per share $2.24 To $2.35 Adjusted net income $262 million To $270 million 2014 Adjusted ne
Slide 30: 2014 Outlook Summary (October Update)
30 2014 OUTLOOK SUMMARY (October Update) _____________________ Note: Guidance as of October 23, 2014. (1) Includes $10 million of transaction costs and year-one fair value adjustments. In thousands, except per share data LOW HIGH Revenue 4,675,000$ 4,725,000$ Adjusted Operating Profit 468,000 478,00
Slide 31: Non-GAAP Reconciliation (October Update)
31 NON-GAAP RECONCILIATION (October Update) _____________________ Note: Guidance as of October 23, 2014. (1) Reflects the impact of the preferred stock conversion for GAAP EPS due to the anti-dilution of the if-converted method. LOW HIGH Projected net income per share - diluted 2.24$ 2.35$ Restructu