Slide 1: Second Quarter 2012 Earnings Conference Call
Second Quarter 2012 Earnings Conference Call July 27, 2012
Slide 2: Forward-Looking Statements
2 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 plans, objectives, e
Slide 3: Q2 2012 Results
Q2 2012 Results 3 COLFAX
Slide 4: Q2 2012 Highlights
4 Q2 2012 Highlights • Adjusted net income of $43.1 million ($0.35 per share) compared to $12.8 million ($0.29 per share) in Q2 2011 • Net sales of $1.05 billion, an increase of 2.4% from Q2 2011 proforma net sales of $1.02 billion • Adjusted operating income of $97.3 million compared to $20.3 milli
Slide 5: Year to Date 2012 Highlights
5 Year to Date 2012 Highlights • Adjusted net income of $68.6 million ($0.59 per share) compared to $22.0 million ($0.50 per share) in Q2 2011 • Net sales of $1.93 billion, an increase of 6.3% from the six months ended July 1, 2011 proforma net sales of $1.82 billion • Adjusted operating income of $
Slide 6: Gas- and Fluid-Handling
Gas- and Fluid- Handling 6 COLFAX
Slide 7: Gas- and Fluid-Handling Q2 2012 Highlights
7 Gas - and Fluid - Handling Q2 2012 Highlights • Net sales of $496.5 million compared to proforma net sales of $460.8 million in Q2 2011, an increase of 7.7% • Adjusted segment operating income of $62.8 million and adjusted segment operating income margin of 12.6% • Q2 2012 orders of $534.4 million
Slide 8: Gas- and Fluid-Handling YTD 2012 Highlights
8 Gas - and Fluid - Handling YTD 2012 Highlights • Net sales of $921.8 million compared to proforma net sales of $803.8 million in Q2 2011, an increase of 14.7% • Adjusted segment operating income of $101.6 million and adjusted segment operating income margin of 11.0% • Orders of $1.03 billion compa
Slide 9: Orders and Backlog
9 Orders and Backlog 9 Orders (1) $522.5 $534.5 $974.4 $1,031.9 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 $700.0 $800.0 $900.0 $1,000.0 $1,100.0 Q2 2011 Q2 2012 YTD 2011 YTD 2012 Backlog (1) $0.0 $250.0 $500.0 $750.0 $1,000.0 $1,250.0 $1,500.0 (1) Order and backlog data for the periods prior to
Slide 10: Revenue
10 Revenue 10 Revenue (1) $460.8 $496.5 $803.8 $921.8 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 $700.0 $800.0 $900.0 $1,000.0 Q2 2011 Q2 2012 YTD 2011 YTD 2012 (1) Q2 2011 and YTD 2011 sales are presented on a proforma basis. __________________ Note: Dollars in millions (unaudited). Aftermarket
Slide 11: Q2 2012 Sales and Orders by End Market
11 Q2 2012 Sales and Orders by End Market 11 Sales: $496.5 million Orders: $534.4 million Total Growth (Decline) Organic Growth (Decline) Power Generation 12.5 % 15.1 % Oil, Gas & Petrochemical 0.6% 6.6% Marine (15.3)% (9.0)% Mining 52.2% 61.4% General Industrial & Other 9.2 % 13.8 % Total 7.7 % 12.
Slide 12: YTD 2012 Sales and Orders by End Market
12 YTD 2012 Sales and Orders by End Market 12 Sales: $921.8 million Orders: $1,031.9 million Total Growth (Decline) Organic Growth (Decline) Power Generation 20.2 % 21.8% Oil, Gas & Petrochemical 23.1% 12.1% Marine (9.6)% (5.3)% Mining 34.5% 41.4% General Industrial & Other 8.9% 11.5% Total 14.7% 14
Slide 13: Power Generation Market Perspective
13 Power Generation Market Perspective 13 Sales & Orders Growth Q2 2012 vs. Q2 2011 YTD 2012 vs. YTD 2011 Total Organic Total Organic Sales 12.5% 15.1% 20.2% 21.8% Orders 44.7% 48.5% 20.1% 22.2% Colfax YTD 2012 Sales Split 30% Power Gen. Colfax YTD 2012 Orders Split Highlights ▪ Served by both Howde
Slide 14: Oil, Gas & Petrochemical Market Perspective
14 Oil, Gas & Petrochemical Market Perspective 14 Sales & Orders Growth (Decline) Colfax YTD 2012 Sales Split 26% OG&P Colfax YTD 2012 Orders Split 26% OG&P Highlights ▪ Served by both Howden and Colfax Fluid Handling ▪ National oil companies in Latin America and Russia expanding production and refi
Slide 15: Marine Market Perspective
15 Marine Market Perspective 15 Sales & Orders (Decline) Growth Colfax YTD 2012 Sales Split 12% Marine Colfax YTD 2012 Orders Split Highlights ▪ Comprised of commercial marine and government, or defense, customers ▪ Primarily served by Colfax Fluid Handling ▪ New ship build is down from 2011 peak ▪
Slide 16: Mining Market Perspective
16 Mining Market Perspective 16 Sales & Orders Growth (Decline) Colfax YTD 2012 Sales Split 9% Mining Colfax YTD 2012 Orders Split Highlights ▪ Primarily served by Howden ▪ Includes centrifugal and axial fans, providing mine ventilation ▪ Driven by demand of mined resources, including: coal, iron or
Slide 17: General Industrial & Other Market Perspective
17 General Industrial & Other Market Perspective 17 Sales & Orders Growth (Decline) Colfax YTD 2012 Sales Split 23% GI&O Colfax YTD 2012 Orders Split Highlights ▪ Includes both Howden and Colfax Fluid Handling ▪ Represents a variety of industrial fans and compressors, tunnel ventilation and pumps se
Slide 18: Fabrication Technology
18 18 Fabrication Technology
Slide 19: Fabrication Technology Q2 2012 Highlights
19 Fabrication Technology Q2 2012 Highlights • Net sales of $549.2 million compared to proforma net sales of $560.1 million in Q2 2011, a decrease of 2.0%; an organic increase of 6.9% • Adjusted segment operating income of $45.4 million and adjusted operating income margin of 8.3% • Higher consumabl
Slide 20: Fabrication Technology YTD 2012 Highlights
20 Fabrication Technology YTD 2012 Highlights • Net sales of $1.01 billion, a decrease of 0.4% compared to proforma YTD Q2 2011 sales; an organic increase of 6.3% • Adjusted segment operating income of $79.4 million and adjusted operating income margin of 7.9% • Higher consumable volumes in North Am
Slide 21: Revenue
21 Revenue 21 Revenue (1) $560.1 $549.2 $1,013.8 $1,010.2 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 $700.0 $800.0 $900.0 $1,000.0 $1,100.0 Q2 2011 Q2 2012 YTD 2011 YTD 2012 (1) Q2 2011 and YTD 2011 sales are presented on a proforma basis. __________________ Note: Dollars in millions (unaudited)
Slide 22: Results of Operations
Results of Operations 2 COLFAX
Slide 23: Income Statement Summary (Three Months)
23 Income Statement Summary (unaudited) 23 Refer to Appendix for Non - GAAP reconciliation and footnotes. __________________ Note: Dollars in millions. Three Months Ended Change June 29, 2012 July 1, 2011 Net sales $ 1,045.6 $ 186.7 Gross profit $ 327.9 $ 64.7 % of sales 31.4% 34.7% SG&A expense $ 2
Slide 24: Income Statement Summary (Six Months)
24 Income Statement Summary (unaudited) 24 Refer to Appendix for Non - GAAP reconciliation and footnotes. __________________ Note: Dollars in millions. Six Months Ended Change June 29, 2012 July 1, 2011 Net sales $ 1,932.0 $ 345.3 Gross profit $ 583.3 $ 117.9 % of sales 30.2% 34.2% SG&A expense $ 47
Slide 25: Appendix
Appendix 2s COLFAX
Slide 26: Disclaimer
26 Disclaimer 26 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 and orga
Slide 27: Non-GAAP Reconciliation
27 Non - GAAP Reconciliation (unaudited) ____________________ Note: Dollars in thousands. (1) The effective tax rates used to calculate adjusted net income and adjusted net income per share are 31% for the second quarte r a nd six months ended June 29, 2012 and 32% for the second quarter and six mon
Slide 28: Non-GAAP Reconciliation (Q2)
28 Non - GAAP Reconciliation (unaudited) Net sales -$ -$ Operating income 42,077 8.5% 32,405 5.9% (14,176) 60,306 5.8% 21,421 11.5% (4,714) 16,707$ 8.9% Charter acquisition-related expense - - 766 766 - - - Restructuring and other related charges 3,035 13,006 2,517 18,558 156 86 242 Asbestos coverag
Slide 29: Non-GAAP Reconciliation (YTD)
29 Non - GAAP Reconciliation (unaudited) Net sales -$ -$ Operating income 61,106 6.6% 43,285 4.3% (68,216) 36,175 1.9% 39,390$ 11.4% (11,351)$ 28,039$ 8.1% Charter acquisition-related expense - - 43,617 43,617 - - - Restructuring and other related charges 3,815 19,122 4,264 27,201 1,170 1,049 2,219
Slide 30: Sales & Order Growth
30 Sales & Order Growth (unaudited) ____________________ Note: Dollars in millions. $ % $ % Proforma three months ended July 1, 2011 1,021.0$ 522.5$ Components of Change: Existing Businesses 97.3 9.5 % 37.4 7.2 % Acquisitions 9.9 1.0 % 7.4 1.4 % Foreign Currency Translation (82.6) (8.1)% (32.9) (6.3
Slide 31: Balance Sheet
31 Balance Sheet (unaudited) Dollars in thousands, except share amounts June 29, 2012 December 31, 2011 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 538,956 $ 75,108 Trade receivables, less allowance for doubtful accounts of $6,092 and $2,578 904,760 117,475 Inventories, net 530,352 56,136 Oth
Slide 32: 2012 Outlook Summary (July Update)
32 2012 Outlook Summary (July Update) Revenue Range 2012 Total $3.9 billion To $4.0 billion EPS and Adjusted Net Income Range 2012 Net loss per share $(0.45) To $(0.35) Adjusted net income – Colfax (1) $142.8 million To $153.3 million 2012 Adjusted net income per share (2) $1.35 To $1.45 Assumptions
Slide 33: 2012 Outlook Summary (continued)
33 2012 Outlook Summary (continued) Assumptions (continued) Depreciation $70 million Amortization $105 million Interest Expense $95 million Capital Expenditures 2.0% of revenue Pension funding in excess of expense $40 million Preferred dividend $19 million Note: Guidance as of 7/27/12
Slide 34: 2012 Guidance Update
34 2012 Guidance Update (unaudited) Low High Low High Adjusted Operating Profit- February Guidance Foreign Currency Rate Adjustment (7.5) (8.0) Update to Adjusted Operating Profit 9.4 (3.0) Updated Adjusted Operating Profit 359.5$ 374.6$ Interest Expense (95.0) (95.0) Income tax (80.7) (85.3) 183.8
Slide 35: 2012 EPS Reconciliation
35 2012 EPS Reconciliation (unaudited) Low High Original Guidance $ 1.45 $ 1.65 Impact of 9 million new shares (0.07) (0.07) More profit attributable to entities not wholly owned (0.03) (0.03) Narrowing range of operating profit 0.07 (0.02) Tax rate (0.02) (0.03) FX- stronger dollar (0.05) (0.05) Re
Slide 36: Non-GAAP Reconciliation
36 Non - GAAP Reconciliation (unaudited) Projected net loss per share - diluted $ (0.45) $ (0.35) Fair value adjustments - Charter inventory and backlog 0.78 0.78 Restructuring costs 0.43 0.43 Asbestos coverage litigation 0.09 0.09 Charter transaction costs 0.44 0.44 Tax adjustment 0.06 0.06 Project