Slide 1: Second Quarter 2013 Earnings Conference Call
SECOND 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: Q2 2013 Highlights
4 Q2 2013 HIGHLIGHTS • Adjusted net income of $62.0 million ($0.56 per share) compared to $43.1 million ($0.35 per share) in Q2 2012 • Net sales of $1.07 billion, an increase of 2.7% from Q2 2012 net sales of $1.05 billion (an organic decrease of 0.3%) • Adjusted operating income of $116.6 million c
Slide 5: Year to Date 2013 Highlights
5 YEAR TO DATE 2013 HIGHLIGHTS • Adjusted net income of $95.5 million ($0.83 per share) compared to $68.6 million ($0.59 per share) in the six months ended June 29, 2012 • Net sales of $2.02 billion, an increase of 4.6% from the six months ended June 29, 2012 net sales of $1.93 billion (an organic d
Slide 6: Gas and Fluid Handling
GAS AND FLUID HANDLING
Slide 7: Gas and Fluid Handling Q2 2013 Highlights
7 GAS AND FLUID HANDLING Q2 2013 HIGHLIGHTS • Net sales of $516.8 million compared to Q2 2012 net sales of $496.5 million in Q2 2012 (an organic increase of 3.6%) • Adjusted segment operating income of $69.9 million and adjusted segment operating income margin of 13.5% – Improvement over Q2 2012 of
Slide 8: Gas and Fluid Handling YTD 2013 Highlights
8 GAS AND FLUID HANDLING YTD 2013 HIGHLIGHTS • Net sales of $941.9 million compared to net sales of $921.8 million in the six months ended June 29, 2012, an increase of 2.2% (an organic increase of 1.2%) • Adjusted segment operating income of $114.1 million and adjusted segment operating income marg
Slide 9: Orders and Backlog
9 ORDERS AND BACKLOG $534.5 $478.2 $1,032.0 $980.3 $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 $1,200.0 Q2 2012 Q2 2013 YTD 2012 YTD 2013 $0.00 $200.00 $400.00 $600.00 $800.00 $1,000.00 $1,200.00 $1,400.00 $1,600.00 $1.44B $1.38B ORDERS BACKLOG(1) (1) Backlo
Slide 10: Geographic Exposure
10 GEOGRAPHIC EXPOSURE YTD 2013 REVENUE $496.5 $516.8 $921.8 $941.9 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 $700.0 $800.0 $900.0 $1,000.0 Q2 2012 Q2 2013 YTD 2012 YTD 2013 67% 33% Foremarket Aftermarket REVENUE AFTERMARKET REVENUE YTD 2013 52% 48% Developed Economies Emerging Markets Note: Do
Slide 11: Q2 2013 Sales and Orders by End Market
11 Q2 2013 SALES AND ORDERS BY END MARKET Power Generation 39% Oil, Gas & Petro-chemical 22% Marine 11% Mining 5% General Industrial and Other 23% SALES: $516.8 Million Total Growth (Decline) Organic Growth (Decline) Power Generation 39.4 % 40.2 % Oil, Gas & Petrochemical (10.7)% (9.5)% Marine 4.0 %
Slide 12: YTD 2013 Sales and Orders by End Market
12 YTD 2013 SALES AND ORDERS BY END MARKET Power Generation 38% Oil, Gas & Petro-chemical 22% Marine 12% Mining 5% General Industrial and Other 23% SALES: $941.9 Million Total Growth (Decline) Organic Growth (Decline) Power Generation 29.4 % 30.5 % Oil, Gas & Petrochemical (13.1)% (13.8)% Marine 2.6
Slide 13: Power Generation Market Perspective
13 POWER GENERATION MARKET PERSPECTIVE SALES & ORDERS GROWTH (DECLINE) 40% • Served by both Howden and Colfax Fluid Handling • Driven by fundamental global undersupply of electricity • Growth is driven by environmental upgrades in China and the U.S. and strong pump sales to natural gas-combined cycl
Slide 14: Oil, Gas & Petrochemical Market Perspective
14 OIL, GAS & PETROCHEMICAL MARKET PERSPECTIVE SALES & ORDERS DECLINE 24% • Served by both Howden and Colfax Fluid Handling • Period over period comparisons are difficult due to the timing of large projects • Quoting activity remains strong across all major served markets led by transportation, low
Slide 15: Marine Market Perspective
15 MARINE MARKET PERSPECTIVE SALES & ORDERS GROWTH (DECLINE) 11% • Primarily served by Colfax Fluid Handling • Order growth for five consecutive quarters despite overall decline in new shipbuilding activity • Introduction of important new product - Smart Technology CM-1000 – Provides shipowners subs
Slide 16: Mining Market Perspective
16 MINING MARKET PERSPECTIVE SALES & ORDERS (DECLINE) GROWTH 5% • Primarily served by Howden • Driven by demand of mined resources, including: coal, iron ore, copper, gold, nickel and potash • Overall market environment in capital equipment for mining applications remains subdued, particularly in Au
Slide 17: General Industrial & Other Market Perspective
17 GENERAL INDUSTRIAL & OTHER MARKET PERSPECTIVE SALES & ORDERS DECLINE 20% • Includes both Howden and Colfax Fluid Handling • Soft market conditions in chemical processing sector • Transportation sector weak across geographies YTD 2013 SALES SPLIT YTD 2013 ORDERS SPLIT 23% HIGHLIGHTS Q2 2013 vs. Q2
Slide 18: Fabrication Technology
FABRICATION TECHNOLOGY
Slide 19: Fabrication Technology Q2 2013 Highlights
19 FABRICATION TECHNOLOGY Q2 2013 HIGHLIGHTS • Net sales of $557.3 million compared to net sales of $549.2 million in Q2 2012, an increase of 1.5% (an organic decline of 3.8%) • Adjusted segment operating income of $59.4 million and adjusted segment operating income margin of 10.7% – Sequential marg
Slide 20: Fabrication Technology YTD 2013 Highlights
20 FABRICATION TECHNOLOGY YTD 2013 HIGHLIGHTS • Net sales of $1.08 billion compared to net sales of $1.01 billion in the six months ended June 29, 2012, an increase of 6.9% (an organic decline of 3.7%) • Adjusted segment operating income of $103.9 million and adjusted segment operating income margin
Slide 21: Geographic Exposure
21 GEOGRAPHIC EXPOSURE YTD 2013 REVENUE $549.2 $557.3 $1,010.2 $1,079.4 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 $700.0 $800.0 $900.0 $1,000.0 $1,100.0 Q2 2012 Q2 2013 YTD 2012 YTD 2013 74% 26% Consumables Equipment REVENUE REVENUE YTD 2013 38% 62% Developed Economies Emerging Markets Note: Do
Slide 22: Results of Operations
RESULTS OF OPERATIONS
Slide 23: Income Statement Summary
23 INCOME STATEMENT SUMMARY (unaudited) Refer to Appendix for Non-GAAP reconciliation and footnotes. Note: Dollars in millions, except per share amounts. June 28, 2013 June 29, 2012 June 28, 2013 June 29, 2012 Net sales 1,074.1$ 1,045.7$ 2,021.3$ 1,932.0$ Gross profit 337.8$ 314.9$ 628.5$ 556.6$ % 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 adjusted net income, adjusted net income per share, adjusted operating income, organic sales growth (decline) and organic order growth (decline). Adjusted
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 28.2% and 29.0% for the second quarter and six months ended June 28, 2013, respectively, and 31% for both the second quarter and six months ended June 29, 20
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) 110,462 11.7 % 96,670 9.0 % (23,153) 183,979 9.1 % 61,106 6.6 % 43,285 4.3 % (68,216) 36,175 1.9 % Charter acquisition-related expe
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 Charter, Soldex and Co-Vent. The impact related to the Charter Acquisition represents 12 days of activity for ESAB a
Slide 29: EPS Guidance
29 EPS GUIDANCE (unaudited) _____________________ Dollars in thousands, except share data. Low High EBIT (1) 432,000 456,000 Interest Expense (78,000) (78,000) Tax (107,000) (114,000) Noncontrolling Interest (27,000) (27,000) Adjusted net income - Colfax 220,000 237,000 Adjusted Net Income Allocated
Slide 30: Non-GAAP Reconciliation
30 NON-GAAP RECONCILIATION (unaudited) Projected net income per share - diluted 1.70$ 1.85$ Restructuring costs 0.24 0.24 Asbestos coverage litigation 0.03 0.03 Tax adjustment (0.02) (0.02) - Projected adjusted net income per share - diluted 1.95$ 2.10$ 2013 Note: Guidance as of 7/25/13
Slide 31: EPS Illustration Using Analyst Consensus
31 EPS ILLUSTRATION USING ANALYST CONSENSUS (unaudited) _____________________ Dollars in thousands, except share data. Note: This slide is for illustrative purposes to highlight the relationship between full year earnings per share calculated on a discrete basis compared to the earnings per share ca