Slide 1: Third Quarter 2013 Earnings Conference Call
THIRD 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
Fa “a. — COLFAX Sa
Slide 4: Q3 2013 Highlights
4 Q3 2013 HIGHLIGHTS • Adjusted net income of $64.1 million ($0.56 per share) compared to $40.7 million ($0.33 per share) in Q3 2012, which include non-cash gains of $0.04 and $0.03 related to adjustments to deferred tax balances for Q3 2013 and Q3 2012, respectively • Net sales of $1.01 billion, an
Slide 5: Year to Date 2013 Highlights
5 YEAR TO DATE 2013 HIGHLIGHTS • Adjusted net income of $159.7 million ($1.41 per share) compared to $109.3 million ($0.92 per share) in the nine months ended September 28, 2012 • Net sales of $3.04 billion, an increase of 5.2% from the nine months ended September 28, 2012 net sales of $2.89 billion
Slide 6: Gas and Fluid Handling
GAS AND FLUID HANDLING
Slide 7: Gas and Fluid Handling Q3 2013 Highlights
7 GAS AND FLUID HANDLING Q3 2013 HIGHLIGHTS • Net sales of $511.4 million compared to Q3 2012 net sales of $464.9 million in Q3 2012 (an organic increase of 7.5%) • Adjusted segment operating income of $68.0 million and adjusted segment operating income margin of 13.3% – Improvement over Q3 2012 of
Slide 8: Gas and Fluid Handling YTD 2013 Highlights
8 GAS AND FLUID HANDLING YTD 2013 HIGHLIGHTS • Net sales of $1.45 billion compared to net sales of $1.39 billion in the nine months ended September 28, 2012, an increase of 4.8% (an organic increase of 3.3%) • Adjusted segment operating income of $182.1 million and adjusted segment operating income
Slide 9: Orders and Backlog
9 ORDERS AND BACKLOG $443.8 $533.3 $1,475.7 $1,513.6 $0.0 $200.0 $400.0 $600.0 $800.0 $1,000.0 $1,200.0 $1,400.0 $1,600.0 Q3 2012 Q3 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 ORDERS BACKLOG(1) (1) Backlog data for the periods prior to Q1 201
Slide 10: Geographic Exposure
10 GEOGRAPHIC EXPOSURE YTD 2013 REVENUE $464.9 $511.4 $1,386.7 $1,453.2 $0.0 $200.0 $400.0 $600.0 $800.0 $1,000.0 $1,200.0 $1,400.0 $1,600.0 Q3 2012 Q3 2013 YTD 2012 YTD 2013 67% 33% Foremarket Aftermarket REVENUE AFTERMARKET REVENUE YTD 2013 52% 48% Developed Economies Emerging Markets Note: Dollar
Slide 11: Q3 2013 Sales and Orders by End Market
11 Q3 2013 SALES AND ORDERS BY END MARKET Power Generation 37% Oil, Gas & Petro-chemical 22% Marine 12% Mining 3% General Industrial and Other 26% SALES: $511.4 Million Total Growth (Decline) Organic Growth (Decline) Power Generation 28.5 % 28.7 % Oil, Gas & Petrochemical 1.5 % (0.8)% Marine 22.6 %
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: $1.45 Billion Total Growth (Decline) Organic Growth (Decline) Power Generation 29.1 % 29.9 % Oil, Gas & Petrochemical (8.4)% (9.6)% Marine 8.9 %
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) 23% • Served by both Howden and Colfax Fluid Handling • Strong order placement in midstream, along with robust activity in downstream as the Middle East and Southeast Asia refining capacity continues to increase • Benefit
Slide 15: Marine Market Perspective
15 MARINE MARKET PERSPECTIVE SALES & ORDERS GROWTH (DECLINE) 11% • Primarily served by Colfax Fluid Handling • Sales increase driven largely by continued strength in vessels serving the offshore oil & gas industry YTD 2013 SALES SPLIT YTD 2013 ORDERS SPLIT 12% HIGHLIGHTS Note: Marine market comprise
Slide 16: Mining Market Perspective
16 MINING MARKET PERSPECTIVE SALES & ORDERS (DECLINE) GROWTH 6% • Primarily served by Howden • Driven by demand of mined resources, including: coal, iron ore, copper, gold, nickel and potash • Order growth despite subdued market environment due to a large Mongolian order received during Q3 YTD 2013
Slide 17: General Industrial & Other Market Perspective
17 GENERAL INDUSTRIAL & OTHER MARKET PERSPECTIVE SALES & ORDERS GROWTH (DECLINE) 22% • Includes both Howden and Colfax Fluid Handling • Quarterly comparisons can be quite volatile due to the lumpiness of large orders • Significant opportunity for us in the environmental enhancement area for steel pl
Slide 18: Fabrication Technology
FABRICATION TECHNOLOGY
Slide 19: Fabrication Technology Q3 2013 Highlights
19 FABRICATION TECHNOLOGY Q3 2013 HIGHLIGHTS • Net sales of $503.2 million compared to net sales of $489.5 million in Q3 2012, an increase of 2.8% (an organic decline of 1.2%) • Adjusted segment operating income of $57.6 million and adjusted segment operating income margin of 11.4% – Sequential marg
Slide 20: Fabrication Technology YTD 2013 Highlights
20 FABRICATION TECHNOLOGY YTD 2013 HIGHLIGHTS • Net sales of $1.58 billion compared to net sales of $1.50 billion in the nine months ended September 28, 2012, an increase of 5.5% (an organic decline of 2.9%) • Adjusted segment operating income of $161.5 million and adjusted segment operating income
Slide 21: Geographic Exposure
21 GEOGRAPHIC EXPOSURE YTD 2013 REVENUE $489.5 $503.2 $1,499.8 $1,582.6 $0.0 $200.0 $400.0 $600.0 $800.0 $1,000.0 $1,200.0 $1,400.0 $1,600.0 Q3 2012 Q3 2013 YTD 2012 YTD 2013 74% 26% Consumables Equipment REVENUE REVENUE YTD 2013 38% 62% Developed Economies Emerging Markets Note: Dollars in millions
Slide 22: Results of Operations
RESULTS OF OPERATIONS
Slide 23: Income Statement Summary
23 INCOME STATEMENT SUMMARY (unaudited) Refer to Appendix for Non-GAAP reconciliation and footnotes. Note: Dollars in millions, except per share amounts. September 27, 2013 September 28, 2012 September 27, 2013 September 28, 2012 Net sales 1,014.6$ 954.4$ 3,035.8$ 2,886.5$ Gross profit 320.3$ 288.0$
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 21.7% and 26.2% for the third quarter and nine months ended September 27, 2013, respectively, and 25.3% and 29.0% for the third quarter and nine months ended
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) 64,135 12.5 % 52,124 10.4 % (13,461) 102,798 10.1 % 32,361 7.0 % 31,357 6.4 % (12,052) 51,666 5.4 % Charter acquisition-related exp
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, Co-Vent and Clarus. The impact related to the Charter Acquisition represents 12 days of activity fo
Slide 29: 2013 Outlook Summary (October Update)
29 2013 OUTLOOK SUMMARY (OCTOBER UPDATE) (unaudited) _____________________ Note: Guidance as of October 24, 2013. (1) Due to the transaction costs and fair value accounting adjustments, the acquired entities are expected to be approximately breakeven at operating profit. In thousands, except per sha
Slide 30: Non-GAAP Reconciliation
30 NON-GAAP RECONCILIATION (unaudited) _____________________ Note: Guidance as of October 24, 2013. Projected net income per share - diluted 0.37$ 0.41$ 1.59$ 1.64$ Restructuring costs 0.23 0.23 0.43 0.43 Asbestos coverage litigation 0.01 0.01 0.03 0.03 Tax adjustment (0.05) (0.05) (0.07) (0.07) - -