Slide 1: Fourth Quarter 2013 Earnings Conference Call
FOURTH QUARTER 2013 | 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: Q4 2013 Highlights
4 Q4 2013 HIGHLIGHTS • Adjusted net income of $70.1 million ($0.61 per share) compared to $50.5 million ($0.42 per share) in Q4 2012 • Net sales of $1.17 billion, an increase of 14% from Q4 2012 net sales of $1.03 billion (an organic increase of 10.2%) • Adjusted operating income of $124.4 million c
Slide 5: Full Year 2013 Highlights
5 FULL YEAR 2013 HIGHLIGHTS • Adjusted net income of $229.8 million ($2.04 per share) compared to $159.8 million ($1.34 per share) • Net sales of $4.21 billion, an increase of 7.5% from full year 2012 net sales of $3.91 billion (an organic increase of 2.7%) • Adjusted operating income of $431.4 mill
Slide 6: Gas and Fluid Handling
GAS AND FLUID HANDLING
Slide 7: Gas and Fluid Handling Q4 2013 Highlights
7 GAS AND FLUID HANDLING Q4 2013 HIGHLIGHTS • Net sales of $650.8 million compared to net sales of $514.4 million in Q4 2012, an increase of 26.5% (an organic increase of 17.9%) • Adjusted segment operating income of $78.1 million and adjusted segment operating income margin of 12.0% – Margins flat
Slide 8: Gas and Fluid Handling Full Year 2013 Highlights
8 GAS AND FLUID HANDLING FULL YEAR 2013 HIGHLIGHTS • Net sales of $2.104 billion compared to net sales of $1.901 billion in 2012, an increase of 10.7% (an organic increase of 7.3%) • Adjusted segment operating income of $260.3 million and adjusted segment operating income margin of 12.4% • Orders of
Slide 9: Orders and Backlog
9 ORDERS AND BACKLOG $520.3 $547.8 $1,996.0 $2,061.4 $0.0 $250.0 $500.0 $750.0 $1,000.0 $1,250.0 $1,500.0 $1,750.0 $2,000.0 $2,250.0 Q4 2012 Q4 2013 YTD 2012 YTD 2013 - 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
Slide 10: Geographic Exposure
10 GEOGRAPHIC EXPOSURE YTD 2013 REVENUE $514.4 $650.8 $1,901.1 $2,104.0 $0.0 $250.0 $500.0 $750.0 $1,000.0 $1,250.0 $1,500.0 $1,750.0 $2,000.0 $2,250.0 Q4 2012 Q4 2013 YTD 2012 YTD 2013 67% 33% Foremarket Aftermarket REVENUE AFTERMARKET REVENUE YTD 2013 53% 47% Developed Economies Emerging Markets N
Slide 11: Q4 2013 Sales and Orders by End Market
11 Q4 2013 SALES AND ORDERS BY END MARKET Power Generation 38% Oil, Gas & Petro-chemical 23% Marine 10% Mining 6% General Industrial and Other 23% SALES: $650.8 Million Total Growth Organic Growth (Decline) Power Generation 38.4% 32.1% Oil, Gas & Petrochemical 33.4% 20.4% Marine 2.1% (0.5)% Mining 6
Slide 12: Full Year 2013 Sales and Orders by End Market
12 FULL YEAR 2013 SALES AND ORDERS BY END MARKET Power Generation 38% Oil, Gas & Petro-chemical 23% Marine 11% Mining 5% General Industrial and Other 23% SALES: $2.104 Billion Total Growth (Decline) Organic Growth (Decline) Power Generation 31.8 % 30.5 % Oil, Gas & Petrochemical 1.9 % (2.2)% Marine
Slide 13: Power Generation Market Perspective
13 POWER GENERATION MARKET PERSPECTIVE SALES & ORDERS GROWTH 38% • Served by both Howden and Colfax Fluid Handling • Driven by fundamental global undersupply of electricity • Growth driven by environmental upgrades in China and the U.S., strong pump sales to natural gas combined cycle power stations
Slide 14: Oil, Gas & Petrochemical Market Perspective
14 OIL, GAS & PETROCHEMICAL MARKET PERSPECTIVE SALES & ORDERS GROWTH (DECLINE) 22% • Served by both Howden and Colfax Fluid Handling • Strong quotation activity in our midstream business, particularly in the Middle East and Southeast Asia • Benefiting from our previous investments in a local presenc
Slide 15: Marine Market Perspective
15 MARINE MARKET PERSPECTIVE SALES & ORDERS GROWTH (DECLINE) 12% • Primarily served by Colfax Fluid Handling • Sales increase driven largely by continued strength in vessels serving the offshore oil & gas industry • $4 million of CM-1000 orders in Q4 2013 SALES SPLIT 2013 ORDERS SPLIT 11% HIGHLIGHTS
Slide 16: Mining Market Perspective
16 MINING MARKET PERSPECTIVE SALES & ORDERS GROWTH (DECLINE) 5% • Primarily served by Howden • Driven by demand of mined resources, including: coal, iron ore, copper, gold, nickel and potash • Significant decline in orders driven by decreased industry capital expenditures 2013 SALES SPLIT 2013 ORDER
Slide 17: General Industrial & Other Market Perspective
17 GENERAL INDUSTRIAL & OTHER MARKET PERSPECTIVE SALES & ORDERS GROWTH (DECLINE) 23% • Includes both Howden and Colfax Fluid Handling • Quarterly comparisons can be quite volatile due to the lumpiness of large orders • Environmental upgrades, particularly in China, offering significant opportunity 2
Slide 18: Fabrication Technology
FABRICATION TECHNOLOGY
Slide 19: Fabrication Technology Q4 2013 Highlights
19 FABRICATION TECHNOLOGY Q4 2013 HIGHLIGHTS • Net sales of $520.6 million compared to net sales of $513.0 million in Q4 2012, an increase of 1.5% (an organic increase of 2.5%) • Adjusted segment operating income of $58.2 million and adjusted segment operating income margin of 11.2%
Slide 20: Fabrication Technology Full Year 2013 Highlights
20 FABRICATION TECHNOLOGY FULL YEAR 2013 HIGHLIGHTS • Net sales of $2.1 billion compared to net sales of $2.0 billion in 2012, an increase of 4.5% (an organic decline of 1.5%) • Adjusted segment operating income of $219.6 million and adjusted segment operating income margin of 10.4% – Improvement of
Slide 21: Geographic Exposure
21 GEOGRAPHIC EXPOSURE 2013 REVENUE $513.0 $520.6 $2,012.7 $2,103.2 $0.0 $250.0 $500.0 $750.0 $1,000.0 $1,250.0 $1,500.0 $1,750.0 $2,000.0 $2,250.0 Q4 2012 Q4 2013 YTD 2012 YTD 2013 74% 26% Consumables Equipment REVENUE REVENUE 2013 40% 60% Developed Economies Emerging Markets Note: Dollars in milli
Slide 22: Results of Operations
RESULTS OF OPERATIONS
Slide 23: Income Statement Summary
23 INCOME STATEMENT SUMMARY (unaudited) Refer to Appendix for Non-GAAP reconciliation and footnotes. Note: Dollars in millions, except per share amounts. December 31, 2013 December 31, 2012 December 31, 2013 December 31, 2012 Net sales 1,171.4$ 1,027.4$ 4,207.2$ 3,913.9$ Gross profit 357.4$ 307.6$ 1
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 adjusted net income, adjusted net income per share, projected adjusted net income per share, adjusted operating income, organic sales growth (decline) and
Slide 26: Non-GAAP Reconciliation
26 NON-GAAP RECONCILIATION (unaudited) (1) The effective tax rates used to calculate adjusted net income and adjusted net income per share are 27.6% and 26.6% for the fourth quarter and full year ended December 31, 2013, respectively, and 15.0% and 25.0% for the fourth quarter and full year ended De
Slide 27: Non-GAAP Reconciliation
27 NON-GAAP RECONCILIATION (unaudited) _____________________ Note: Dollars in thousands. Corporate and Other Corporate and Other Net sales —$ —$ Operating income (loss) 85,682 13.2 % 45,767 8.8 % (11,834) 119,615 10.2 % 39,405 7.7 % 20,306 4.0 % (7,543) 52,168 5.1 % Charter acquisition-related expen
Slide 28: Sales & Orders Growth
28 SALES & ORDERS GROWTH (unaudited) _____________________ Note: Dollars in millions. (1) Represents the incremental sales and orders as a result of our acquisitions of Charter, Soldex, Co-Vent, Clarus, CKD Kompressory, Flakt Woods, TLT-Babcock, Alphair, and Sicelub. The full year impact related to
Slide 29: Balance Sheet
29 BALANCE SHEET (unaudited) _____________________ Note: Dollars in thousands, except per share amounts. 2013 2012 ASSETS CURRENT ASSETS: Cash and cash equivalents 311,301$ 482,449$ Trade receivables, less allowance for doubtful accounts of $31,282 and $16,464 1,030,892 873,382 Inventories, net 445,
Slide 30: Statement of Cash Flows
30 STATEMENT OF CASH FLOWS (unaudited) _____________________ Note: Dollars in thousands. 2013 2012 2011 Cash flows from operating activities: Net income (loss) 209,143$ (42,264)$ 4,555$ Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, amortizatio