Slide 1: Fourth Quarter 2014 Earnings Conference Call
FOURTH 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
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Slide 4: Q4 2014 Highlights
4 Q4 2014 HIGHLIGHTS • Adjusted net income of $89.7 million ($0.72 per share) compared to $70.1 million ($0.61 per share) in Q4 2013 • Net sales of $1.206 billion, an increase of 3.0% from Q4 2013 net sales of $1.171 billion (an organic decline of 3.4%) • Adjusted operating income of $136.7 million
Slide 5: Full Year 2014 Highlights
5 FULL YEAR 2014 HIGHLIGHTS • Adjusted net income of $272.3 million ($2.20 per share) compared to $229.8 million ($2.04 per share) in 2013 • Net sales of $4.624 billion, an increase of 9.9% from full year 2013 net sales of $4.207 billion (an organic decline of 1.9%) • Adjusted operating income of $4
Slide 6: Gas and Fluid Handling
GAS AND FLUID HANDLING
Slide 7: Gas and Fluid Handling Q4 2014 Highlights
7 GAS AND FLUID HANDLING Q4 2014 HIGHLIGHTS • Net sales of $622.1 million compared to net sales of $650.8 million in Q4 2013, a decrease of 4.4% (an organic decline of 5.3%) • Adjusted segment operating income of $85.3 million and adjusted segment operating income margin of 13.7% – Improvement over
Slide 8: Gas and Fluid Handling Full Year 2014 Highlights
8 GAS AND FLUID HANDLING FULL YEAR 2014 HIGHLIGHTS • Net sales of $2.330 billion compared to net sales of $2.104 billion in 2013, an increase of 10.7% (an organic decline of 1.5%) • Adjusted segment operating income of $254.2 million and adjusted segment operating income margin of 10.9% • Orders of
Slide 9: Orders and Backlog
9 ORDERS AND BACKLOG $547.8 $570.1 $2,061.4 $2,286.7 $0.0 $250.0 $500.0 $750.0 $1,000.0 $1,250.0 $1,500.0 $1,750.0 $2,000.0 $2,250.0 $2,500.0 Q4 2013 Q4 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 t
Slide 10: Geographic Exposure
10 GEOGRAPHIC EXPOSURE YTD 2014 REVENUE $650.8 $622.1 $2,104.0 $2,329.6 $0.0 $250.0 $500.0 $750.0 $1,000.0 $1,250.0 $1,500.0 $1,750.0 $2,000.0 $2,250.0 $2,500.0 Q4 2013 Q4 2014 YTD 2013 YTD 2014 65% 35% Foremarket Aftermarket REVENUE AFTERMARKET REVENUE YTD 2014 55% 45% Developed Economies Emerging
Slide 11: Q4 2014 Sales and Orders by End Market
11 Q4 2014 SALES AND ORDERS BY END MARKET Power Generation 36% Oil, Gas & Petro-chemical 21% Marine 9% Mining 7% General Industrial and Other 27% SALES: $622.1 Million Total (Decline) Growth Organic (Decline) Growth Power Generation (10.5)% (9.6)% Oil, Gas & Petrochemical (15.6)% (13.8)% Marine (13.
Slide 12: Full Year 2014 Sales and Orders by End Market
12 FULL YEAR 2014 SALES AND ORDERS BY END MARKET Power Generation 36% Oil, Gas & Petro-chemical 20% Marine 10% Mining 6% General Industrial and Other 28% SALES: $2.330 Billion Total Growth (Decline) Organic (Decline) Growth Power Generation 4.3% (2.1)% Oil, Gas & Petrochemical (1.0)% (9.5)% Marine (
Slide 13: Power Generation Market Perspective
13 POWER GENERATION MARKET PERSPECTIVE SALES & ORDERS (DECLINE) GROWTH 33% • 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. • Howden saw declines in China SCR orders, partially offset by continued strong i
Slide 14: Oil, Gas & Petrochemical Market Perspective
14 OIL, GAS & PETROCHEMICAL MARKET PERSPECTIVE SALES & ORDERS (DECLINE) GROWTH 20% • Served by both Howden and Colfax Fluid Handling • Period over period comparisons are difficult due to the timing of large projects • Macro oil price trends having little, if any, impact on quoting activity • Receive
Slide 15: Marine Market Perspective
15 MARINE MARKET PERSPECTIVE SALES & ORDERS (DECLINE) GROWTH 13% • Primarily served by Colfax Fluid Handling • Significant CM-1000 commissioning activity • Requirement to meet low sulfur/low viscosity regulations provide opportunity 2014 SALES SPLIT 2014 ORDERS SPLIT 10% HIGHLIGHTS Note: Marine mark
Slide 16: Mining Market Perspective
16 MINING MARKET PERSPECTIVE SALES & ORDERS GROWTH (DECLINE) 5% • Primarily served by Howden • Remains a depressed market; faced subdued spending for the past year and a half • Some bright spots, including follow on orders for Australia copper mine and ventilation systems for copper and gold mines i
Slide 17: General Industrial & Other Market Perspective
17 GENERAL INDUSTRIAL & OTHER MARKET PERSPECTIVE SALES & ORDERS GROWTH 29% • Includes both Howden and Colfax Fluid Handling • Volatile quarter to quarter due to large orders • Near term opportunities for fans and large gas-gas heaters in China for steel plants to be fitted with flue-gas desulfurizat
Slide 18: Fabrication Technology
FABRICATION TECHNOLOGY
Slide 19: Fabrication Technology Q4 2014 Highlights
19 FABRICATION TECHNOLOGY Q4 2014 HIGHLIGHTS • Net sales of $584.3 million compared to net sales of $520.6 million in Q4 2013, an increase of 12.2% (an organic decline of 1.1%) • Adjusted segment operating income of $62.7 million and adjusted segment operating income margin of 10.7%
Slide 20: Fabrication Technology Full Year 2014 Highlights
20 FABRICATION TECHNOLOGY FULL YEAR 2014 HIGHLIGHTS • Net sales of $2.295 billion compared to net sales of $2.103 billion in 2013, an increase of 9.1% (an organic decline of 2.3%) • Adjusted segment operating income of $265.8 million and adjusted segment operating income margin of 11.6% – Improvemen
Slide 21: Geographic Exposure
21 GEOGRAPHIC EXPOSURE 2014 REVENUE $520.6 $584.3 $2,103.2 $2,294.9 $0.0 $250.0 $500.0 $750.0 $1,000.0 $1,250.0 $1,500.0 $1,750.0 $2,000.0 $2,250.0 $2,500.0 Q4 2013 Q4 2014 YTD 2013 YTD 2014 71% 29% Consumables Equipment REVENUE REVENUE 2014 48% 52% Developed Economies Emerging Markets Note: Dollars
Slide 22: Results of Operations
RESULTS OF OPERATIONS
Slide 23: Income Statement Summary
23 INCOME STATEMENT SUMMARY (unaudited) Refer to Appendix for Non-GAAP reconciliation and footnotes. Note: Dollars in millions, except per share amounts. December 31, 2014 December 31, 2013 December 31, 2014 December 31, 2013 Net sales 1,206.4$ 1,171.4$ 4,624.5$ 4,207.2$ Gross profit 391.8$ 357.4$ 1
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 et sales -$ -$ Operating income (loss) 70,375 11.3 % 48,239 8.3 % (11,273) 107,341 8.9 % 85,682 13.2 % 45,767 8.8 % (11,834) 119,615 10.2 % Restructuring and other related
Slide 27: Non-GAAP Reconciliation
27 NON-GAAP RECONCILIATION (unaudited) (1) The effective tax rates used to calculate adjusted net income and adjusted net income per share are 24.5% and 27.8% for the fourth quarter and full year ended December 31, 2014, respectively, and 27.6% and 26.6% for the fourth quarter and full year ended De
Slide 28: Sales & Orders Growth
28 SALES & ORDERS GROWTH (unaudited) _____________________ Note: Dollars in millions. (1) Represents the incremental sales and orders as a result of our acquisitions of Clarus Fluid Intelligence, LLC, CKD Kompressory a.s., the global industrial and industry division of Flakt Woods Group, TLT-Babcock
Slide 29: Balance Sheets
29 BALANCE SHEETS (unaudited) _____________________ Note: Dollars in thousands, except share amounts. 2014 2013(1) ASSETS CURRENT ASSETS: Cash and cash equivalents 305,448$ 311,301$ Trade receivables, less allowance for doubtful accounts of $27,256 and $31,282 1,029,150 1,023,732 Inventories, net 44
Slide 30: Statements of Cash Flows
30 STATEMENTS OF CASH FLOWS (unaudited) _____________________ Note: Dollars in thousands. 2014 2013 Cash flows from operating activities: Net income 420,273$ 209,143$ Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization and impairment charges 1
Slide 31: 2015 Outlook Summary
31 2015 OUTLOOK SUMMARY REVENUE RANGE 2015 Total $4.250 billion To $4.400 billion EPS AND ADJUSTED NET INCOME RANGE 2015 Net income per share $1.75 To $1.95 Adjusted operating income $460 million $495 million Adjusted net income $282 million To $308 million 2015 Adjusted net income per share (1) $2.
Slide 32: Non-GAAP Reconciliation
32 NON-GAAP RECONCILIATION (Unaudited) Note: Guidance as of 2/5/15. Low High Projected net income per share - diluted $ 1.75 $ 1.95 Restructuring costs 0.39 0.39 Tax adjustment (0.11) (0.11) Projected adjusted net income per share - diluted $2.03 $2.23 2015 EPS Range