Slide 1: Second Quarter 2014 Earnings Conference Call
SECOND 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
Fa “a. — COLFAX Sa
Slide 4: Q2 2014 Highlights
4 Q2 2014 HIGHLIGHTS • Adjusted net income of $59.6 million ($0.48 per share) compared to $62.0 million ($0.56 per share) in Q2 2013 – Q2 2014 includes approximately $22 million of pretax non-cash expenses related to an impairment, a business disposition and a Venezuelan currency devaluation • Net s
Slide 5: Year to Date 2014 Highlights
5 YEAR TO DATE 2014 HIGHLIGHTS • Adjusted net income of $111.2 million ($0.91 per share) compared to $95.5 million ($0.83 per share) in the six months ended June 28, 2013 • Net sales of $2.25 billion, an increase of 11.5% from the six months ended June 28, 2013 net sales of $2.02 billion (flat organ
Slide 6: Gas and Fluid Handling
GAS AND FLUID HANDLING
Slide 7: Gas and Fluid Handling Q2 2014 Highlights
7 GAS AND FLUID HANDLING Q2 2014 HIGHLIGHTS • Net sales of $568.9 million compared to net sales of $516.8 million in Q2 2013, an increase of 10.1% (an organic decrease of 7.0%) • Adjusted segment operating income of $45.7 million and adjusted segment operating income margin of 8.0% • Second quarter
Slide 8: Gas and Fluid Handling YTD 2014 Highlights
8 GAS AND FLUID HANDLING YTD 2014 HIGHLIGHTS • Net sales of $1.14 billion compared to net sales of $941.9 million in the six months ended June 28, 2013, an increase of 21.3% (an organic increase of 3.2%) • Adjusted segment operating income of $101.7 million and adjusted segment operating income marg
Slide 9: Orders and Backlog
9 ORDERS AND BACKLOG $478.2 $593.8 $980.3 $1,177.2 $0.0 $150.0 $300.0 $450.0 $600.0 $750.0 $900.0 $1,050.0 $1,200.0 Q2 2013 Q2 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 are presented on
Slide 10: Geographic Exposure and Revenue
10 GEOGRAPHIC EXPOSURE YTD 2014 REVENUE $516.8 $568.9 $941.9 $1,142.9 $0.0 $150.0 $300.0 $450.0 $600.0 $750.0 $900.0 $1,050.0 $1,200.0 Q2 2013 Q2 2014 YTD 2013 YTD 2014 66% 34% Foremarket Aftermarket REVENUE AFTERMARKET REVENUE YTD 2014 57% 43% Developed Economies Emerging Markets Note: Dollars in m
Slide 11: Q2 2014 Sales and Orders by End Market
11 Q2 2014 SALES AND ORDERS BY END MARKET Power Generation 32% Oil, Gas & Petro-chemical 20% Marine 11% Mining 6% General Industrial and Other 31% SALES: $568.9 Million Total (Decline) Growth Organic (Decline) Growth Power Generation (10.8)% (14.9)% Oil, Gas & Petrochemical 0.6% (16.8)% Marine 6.5%
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: $1.14 Billion Total Growth Organic Growth (Decline) Power Generation 14.4% 5.9% Oil, Gas & Petrochemical 11.8% (5.0)% Marine 5.8% 2.7% Mining 5.5
Slide 13: Power Generation Market Perspective
13 POWER GENERATION MARKET PERSPECTIVE SALES & ORDERS (DECLINE) GROWTH 35% • 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. • Fluid Handling orders impacted by downturn in demand for combined cycle power s
Slide 14: Oil, Gas & Petrochemical Market Perspective
14 OIL, GAS & PETROCHEMICAL MARKET PERSPECTIVE SALES & ORDERS GROWTH (DECLINE) 17% • Served by both Howden and Colfax Fluid Handling • Period over period comparisons are difficult due to the timing of large projects • Continue to see deferrals of major projects across core geographies, particularly
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) 6% • Primarily served by Howden • Remains a depressed market; faced subdued spending for the past year and a half • Some bright spots; received a large Australian order for a tin and zinc mine and some additional copper projects in Chile •
Slide 17: General Industrial & Other Market Perspective
17 GENERAL INDUSTRIAL & OTHER MARKET PERSPECTIVE SALES & ORDERS GROWTH 28% • Includes both Howden and Colfax Fluid Handling • Volatile quarter to quarter due to large orders • Howden had significant activity in steel and cement; steel plant desulfurization being the most active • Fluid Handling bene
Slide 18: Fabrication Technology
FABRICATION TECHNOLOGY
Slide 19: Fabrication Technology Q2 2014 Highlights
19 FABRICATION TECHNOLOGY Q2 2014 HIGHLIGHTS • Net sales of $630.4 million compared to net sales of $557.3 million in Q2 2013, an increase of 13.1% (an organic decline of 3.1%) • Adjusted segment operating income of $77.1 million and adjusted segment operating income margin of 12.2% – Sequential mar
Slide 20: Fabrication Technology YTD 2014 Highlights
20 FABRICATION TECHNOLOGY YTD 2014 HIGHLIGHTS • Net sales of $1.11 billion compared to net sales of $1.08 billion in the six months ended June 28, 2013, an increase of 2.9% (an organic decline of 2.8%) • Adjusted segment operating income of $131.0 million and adjusted segment operating income margin
Slide 21: Geographic Exposure and Revenue
21 GEOGRAPHIC EXPOSURE YTD 2014 REVENUE $557.3 $630.4 $1,079.4 $1,110.8 $0.0 $150.0 $300.0 $450.0 $600.0 $750.0 $900.0 $1,050.0 $1,200.0 Q2 2013 Q2 2014 YTD 2013 YTD 2014 74% 26% Consumables Equipment REVENUE REVENUE YTD 2014 46% 54% Developed Economies Emerging Markets Note: Dollars in millions (un
Slide 22: Results of Operations
RESULTS OF OPERATIONS
Slide 23: Income Statement Summary
23 INCOME STATEMENT SUMMARY (unaudited) Refer to Appendix for Non-GAAP reconciliation and footnotes. Note: Dollars in millions, except per share amounts. June 27, 2014 June 28, 2013 June 27, 2014 June 28, 2013 Net sales 1,199.3$ 1,074.1$ 2,253.7$ 2,021.3$ Gross profit 388.2$ 337.8$ 713.8$ 628.5$ % o
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 —$ Victor net sales Operating income (loss) 39,052 6.9 % 70,252 11.1 % (13,636) 95,668 8.0 % 69,247 13.4 % 55,143 9.9 % (12,738) 111,652 10.4 % Restructuring and
Slide 27: Non-GAAP Reconciliation (preliminary, unaudited)
27 NON-GAAP RECONCILIATION (preliminary, unaudited) (1) The (Benefit from) provision for income taxes for the second quarter and six months ended June 27, 2014 reflects our current estimate, which is subject to change. The final amount for the second quarter and six months ended June 27, 2014 will b
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 (July Update)
29 2014 OUTLOOK SUMMARY (July Update) _____________________ Note: Guidance as of July 17, 2014. Revenue Range 2014 Total $4.70 billion To $4.80 billion EPS and Adjusted Net Income Range 2014 Net income per share (1) $2.31 To $2.57 Adjusted net income $273 million To $291 million 2014 Adjusted net in
Slide 30: 2014 Outlook Summary (July Update)
30 2014 OUTLOOK SUMMARY (July Update) _____________________ Note: Guidance as of July 17, 2014. (1) Includes $10 million of transaction costs and year-one fair value adjustments. In thousands, except per share data LOW HIGH Revenue 4,700,000$ 4,800,000$ Adjusted Operating Profit (1) 485,000 510,000
Slide 31: Non-GAAP Reconciliation (July Update)
31 NON-GAAP RECONCILIATION (July Update) _____________________ Note: Guidance as of July 17, 2014. (1) Reflects the impact of the preferred stock conversion for GAAP EPS due to the anti-dilution of the if-converted method. (2) A substantial gain on tax valuation allowances will increase GAAP earning