Slide 1: Fourth Quarter 2012 Earnings Conference Call
Fourth Quarter 2012 Earnings Conference Call February 6, 2013
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, expecta
Slide 3: Q4 and Full Year 2012 Results
3 Q4 and Full Year 2012 Results
Slide 4: Q4 2012 Highlights
4 Q4 2012 Highlights • Adjusted net income of $50.5 million ($0.42 per share) compared to $14.4 million ($0.33 per share) in Q4 2011 • Net sales of $1.03 billion, a decrease of 2.1% from Q4 2011 proforma net sales of $1.05 billion (an organic decrease of 2.5%) • Adjusted operating income of $88.9 mi
Slide 5: Full Year 2012 Highlights
5 Full Year 2012 Highlights • Adjusted net income of $159.8 million ($1.34 per share) compared to $49.6 million ($1.12 per share) in 2011 • Net sales of $3.9 billion, an increase of 1.9% from full year 2011 proforma net sales of $3.8 billion (an organic increase of 5.3%) • Adjusted operating income
Slide 6: Gas- and Fluid-Handling
Gas- and Fluid- Handling 6 COLFAX
Slide 7: Gas- and Fluid-Handling Q4 2012 Highlights
7 Gas- and Fluid-Handling Q4 2012 Highlights • Net sales of $514.4 million compared to proforma net sales of $530.3 million in Q4 2011, a decrease of 3.0% (an organic decrease of 2.9%) • Adjusted segment operating income of $62.4 million and adjusted segment operating income margin of 12.1% • Q4 201
Slide 8: Gas- and Fluid-Handling Full Year 2012 Highlights
8 Gas- and Fluid-Handling Full Year 2012 Highlights • Net sales of $1.901 billion compared to proforma net sales of $1.757 billion in 2011, an increase of 8.2% (an organic increase of 9.2%) • Adjusted segment operating income of $215.7 million and adjusted segment operating income margin of 11.3% •
Slide 9: Orders and Backlog
9 Orders and Backlog Orders(1) $499.0 $520.3 $1,924.6 $1,996.0 $0.0 $250.0 $500.0 $750.0 $1,000.0 $1,250.0 $1,500.0 $1,750.0 $2,000.0 Q4 2011 Q4 2012 YTD 2011 YTD 2012 (1) Order and backlog data for the periods prior to Q2 2012 are presented on a proforma basis. __________________ Note: Dollars in m
Slide 10: Revenue
Developed Economies 52% Emerging Markets 48% Foremarket 68% Aftermarket 32% 10 Revenue Revenue(1) $530.3 $514.4 $1,757.1 $1,901.1 $0.0 $250.0 $500.0 $750.0 $1,000.0 $1,250.0 $1,500.0 $1,750.0 $2,000.0 Q4 2011 Q4 2012 YTD 2011 YTD 2012 (1) Q4 2011 and YTD 2011 sales are presented on a proforma basis.
Slide 11: Q4 2012 Sales and Orders by End Market
Mining 11% Marine 9% Oil, Gas & Petro- chemical 21% Power Generation 32% General Industrial and Other 27% Oil, Gas & Petro- chemical 22% Marine 12% Mining 7% General Industrial and Other 24% Power Generation 35% 11 Q4 2012 Sales and Orders by End Market Total Growth (Decline) Organic Growth (Decline
Slide 12: Full Year 2012 Sales and Orders by End Market
12 Full Year 2012 Sales and Orders by End Market Total Growth (Decline) Organic Growth (Decline) Power Generation 13.8 % 15.3 % Oil, Gas & Petrochemical 8.3 % 4.9 % Marine (7.5)% (3.7)% Mining 15.5 % 21.9 % General Industrial & Other 7.4 % 8.8 % Total 8.2 % 9.2 % Total Growth (Decline) Organic Growt
Slide 13: Power Generation Market Perspective
13 Power Generation Market Perspective Sales & Orders Growth (Decline) Colfax 2012 Sales Split Colfax 2012 Orders Split Highlights Served by both Howden and Colfax Fluid Handling Driven by global fundamental undersupply of electricity Growth is strong in China, South Africa and South East Asia 33
Slide 14: Oil, Gas & Petrochemical Market Perspective
14 Oil, Gas & Petrochemical Market Perspective Sales & Orders (Decline) Growth 23% OG&P 24% OG&P Highlights Served by both Howden and Colfax Fluid Handling National oil companies in Latin America and Russia expanding production and refinery capacity Continued weakness in construction of pipelines
Slide 15: Marine Market Perspective
15 Marine Market Perspective Sales & Orders Growth (Decline) Highlights Primarily served by Colfax Fluid Handling New ship build is down from 2011 peak Q4 orders strong for oil & gas service vessels __________________ Note: Total and organic growth (decline) is calculated on a proforma basis. Mar
Slide 16: Mining Market Perspective
16 Mining Market Perspective Sales & Orders (Decline) Growth 9% Mining Colfax 2012 Orders Split Highlights Primarily served by Howden Driven by demand of mined resources, including: coal, iron ore, copper, gold, nickel and potash Received largest order in at least the past 15 years during quarter
Slide 17: General Industrial & Other Market Perspective
17 General Industrial & Other Market Perspective Sales & Orders Growth 24% GI&O Highlights Includes both Howden and Colfax Fluid Handling Strong sales and orders for industrial fans and compressors, particularly for steel industry Continued weakness in European market for industrial pumps 23% GI&
Slide 18: Fabrication Technology
Fabrication Technology 18 COLFAX
Slide 19: Fabrication Technology Q4 2012 Highlights
19 Fabrication Technology Q4 2012 Highlights • Net sales of $513.0 million compared to proforma net sales of $519.5 million in Q4 2011, a decrease of 1.3% (an organic decline of 2.2%) • Adjusted segment operating income of $33.9 million and adjusted operating income margin of 6.6% – Soldexa contribu
Slide 20: Fabrication Technology Full Year 2012 Highlights
20 Fabrication Technology Full Year 2012 Highlights • Net sales of $2.0 billion, a decrease of 3.3% compared to proforma 2011 sales (an organic increase of 2.0%) • Adjusted segment operating income of $157.2 million and adjusted operating income margin of 7.8% • Higher consumable volumes in North Am
Slide 21: Revenue
Developed Economies 41% Emerging Markets 59% Equipment 26% Consumables 74% 21 Revenue Revenue(1) $519.5 $513.0 $2,082.0 $2,012.7 $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 $2,000.0 $2,200.0 Q4 2011 Q4 2012 YTD 2011 YTD 2012 (1) Q4 2011 and YTD 2011 sales are presen
Slide 22: Results of Operations
Results of Operations 2 COLFAX
Slide 23: Income Statement Summary (Q4)
23 Income Statement Summary (unaudited) Refer to Appendix for Non-GAAP reconciliation and footnotes. __________________ Note: Dollars in millions, except per share amounts. December 31, 2012 December 31, 2011 Net sales 1,027.4$ 177.8$ Gross profit 307.6$ 61.5$ % of sales 29.9 % 34.6 % SG&A expense 2
Slide 24: Income Statement Summary (Full Year)
24 Income Statement Summary (unaudited) Refer to Appendix for Non-GAAP reconciliation and footnotes. __________________ Note: Dollars in millions, except per share amounts. December 31, 2012 December 31, 2011 Net sales 3,913.9$ 693.4$ Gross profit 1,152.1$ 240.1$ % of sales 29.4 % 34.6 % SG&A expens
Slide 25: Appendix
Appendix 25 COLFAX
Slide 26: Disclaimer
26 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 27: Non-GAAP Reconciliation
27 Non-GAAP Reconciliation (unaudited) ____________________ Note: Dollars in thousands, except per share amounts. (1) The effective tax rates used to calculate adjusted net income and adjusted net income per share are 15% and 25% for the fourth quarter and full year ended December 31, 2012, respecti
Slide 28: Non-GAAP Reconciliation (Q4)
28 Non-GAAP Reconciliation (unaudited) ____________________ Note: Dollars in thousands. Corporate and Other Corporate and Other Net sales $ - $ - Soldexa net sales Operating income (loss) 39,405 7.7 % 20,306 4.0 % (7,543) 52,168 5.1 % 23,171 13.0 % (30,744) (7,573) (4.3)% Charter acquisition-related
Slide 29: Non-GAAP Reconciliation (Full Year)
29 Non-GAAP Reconciliation (unaudited) ____________________ Note: Dollars in thousands. Corporate and Other Corporate and Other Net sales —$ —$ Operating income (loss) 132,872 7.0 % 94,948 4.7 % (87,811) 140,009 3.6 % 78,032$ 11.3 % (52,126)$ 25,906 3.7 % Charter acquisition-related expense — — 43,6
Slide 30: Sales & Order Growth
30 Sales & Order Growth (unaudited) ____________________ Note: Dollars in millions. $ % $ % Proforma for the three months ended December 31, 2011 1,049.8$ 499.0$ Components of Change: Existing Businesses (26.5) (2.5)% 9.6 1.9 % Acquisitions 34.2 3.3 % 22.1 4.4 % Foreign Currency Translation (30.1) (
Slide 31: Balance Sheet
31 Balance Sheet (unaudited) 2012 2011 ASSETS CURRENT ASSETS: Cash and cash equivalents 482,449$ 75,108$ Trade receivables, less allowance for doubtful accounts of $16,464 and $2,578 873,382 117,475 Inventories, net 493,649 56,136 Other current assets 285,906 102,489 Total current assets 2,135,386 3
Slide 32: 2013 Outlook Summary
32 2013 Outlook Summary Revenue Range 2013 Total (1) $4.175 billion To $4.250 billion EPS and Adjusted Net Income Range 2013 Net income per share $1.40 To $1.60 Adjusted net income $186,600 To $209,600 2013 Adjusted net income per share (1) $1.70 To $1.90 Assumptions Asbestos coverage litigation $5
Slide 33: 2013 Outlook Summary (continued)
33 2013 Outlook Summary (continued) Assumptions (continued) Depreciation $75 million Amortization $40 million Interest Expense (based on LIBOR and EURIBOR = 25 bps) $90 million Capital Expenditures 2.5% of revenue Pension funding in excess of expense $30 million Preferred dividend $20 million Note:
Slide 34: 2013 Organic Growth Outlook
34 2013 Organic Growth Outlook Note: Guidance as of 2/6/13 2013 Forecast Organic Growth Fluid handling (4)-0% Howden 4-6% Fabrication Technology 0-2%
Slide 35: 2013 Rollforward
35 2013 Rollforward ____________________ Note: Dollars in thousands, except per share amounts. Guidance as of 2/6/13 (See Non-GAAP Reconciliation included in this Appendix) Low High 2012 Actuals- sales/ adjusted operating income ESAB/ Howden additional 2 weeks Soldexa/ Covent incremental Projected b
Slide 36: Non-GAAP Reconciliation
36 Non-GAAP Reconciliation (unaudited) Note: Guidance as of 2/6/13 Projected net income per share - diluted 1.40$ 1.60$ Restructuring costs 0.27 0.27 Asbestos coverage litigation 0.05 0.05 Tax adjustment (0.02) (0.02) Projected adjusted net income per share - diluted 1.70$ 1.90$ 2013 EPS Range