Slide 1: Fourth Quarter 2011 Earnings Conference Call
Prepared by February 7, 2012 Fourth Quarter 2011 Earnings Conference Call
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, e
Slide 3: Q4 and Full Year 2011 Results
3 3 Q4 and Full Year 2011 Results
Slide 4: Q4 2011 Highlights
4 Q4 2011 Highlights • Adjusted net income of $17.6 million ($0.40 per share) compared to $16.9 million ($0.39 per share) in Q4 2010, an increase of 4.1% • Net sales of $177.8 million compared to $166.7 million in Q4 2010, an increase of 6.7% • Adjusted operating income of $26.8 million compared to
Slide 5: Full Year 2011 Highlights
5 Full Year 2011 Highlights • Adjusted net income of $58.1 million ($1.31 per share) compared to $40.2 million ($0.92 per share) in 2010, an increase of 44.5% • Net sales of $693.4 million compared to $542.0 million in 2010, an increase of 27.9% • Adjusted operating income of $89.6 million compared
Slide 6: Orders and Backlog
6 Orders and Backlog 6 Orders $133.6 $153.4 $532.8 $682.8 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 $700.0 $800.0 Q4 2010 Q4 2011 2010 2011 Existing Businesses 8.8 % 12.2 % Acquisitions 6.7 % 12.0 % FX Translation (0.7)% 4.0 % Total Growth 14.8 % 28.2 % Backlog $370 $383 $373 $347 $327 $349 $32
Slide 7: Revenue and Adjusted Operating Income
7 Revenue and Adjusted Operating Income 7 Revenue $166.7 $177.8 $542.0 $693.4 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 $700.0 $800.0 Q4 2010 Q4 2011 2010 2011 Existing Businesses (2.3)% 9.0 % Acquisitions 9.4 % 15.0 % FX Translation (0.4)% 3.9 % Total Growth 6.7 % 27.9 % Adjusted Operating Inc
Slide 8: Q4 2011 Sales and Orders by End Market
8 Q4 2011 Sales and Orders by End Market 8 Sales: $177.8 million Orders: $153.4 million General Industrial 32% Oil & Gas 24% Power Generation 13% Defense 8% Commercial Marine 23% General Industrial 40% Oil & Gas 17% Power Generation 13% Defense 6% Commercial Marine 24% Total Growth (Decline) Organic
Slide 9: 2011 Sales and Orders by End Market
9 2011 Sales and Orders by End Market 9 Sales: $693.4 million Orders: $682.8 million General Industrial 33% Oil & Gas 23% Power Generation 11% Defense 8% Commercial Marine 25% General Industrial 36% Oil & Gas 22% Power Generation 12% Defense 6% Commercial Marine 24% Total Growth (Decline) Organic Gr
Slide 10: Fluid-Handling End Markets
10 10 Fluid - Handling End Markets
Slide 11: Oil & Gas Market Perspective
11 Oil & Gas Market Perspective 11 Sales & Orders Growth (Decline) Q4 2011 vs. Q4 2010 2011 vs. 2010 Total Organic Total Organic Sales 24% (12)% 100% 12% Orders 10% 6% 69% 12% Colfax 2011 Sales Split 23% O&G Colfax 2011 Orders Split 22% O&G Highlights ▪ COT - Puritech expands service offering ▪ Robu
Slide 12: General Industrial Market Perspective
12 General Industrial Market Perspective 12 Sales & Orders Growth (Decline) Q4 2011 vs. Q4 2010 2011 vs. 2010 Total Organic Total Organic Sales 13% 9% 23% 14% Orders 10% (2)% 23% 11% Colfax 2011 Sales Split 33% General Industrial Colfax 2011 Orders Split Highlights ▪ Order rate remains strong, with
Slide 13: Power Generation Market Perspective
13 Power Generation Market Perspective 13 Sales & Orders Growth Q4 2011 vs. Q4 2010 2011 vs. 2010 Total Organic Total Organic Sales 7% 7% 3% 1% Orders 45% 46% 19% 18% Colfax 2011 Sales Split 11% Power Gen. Colfax 2011 Orders Split Highlights ▪ New infrastructure projects in Asia and the Middle East
Slide 14: Defense Market Perspective
14 Defense Market Perspective 14 Sales & Orders (Decline) Growth Q4 2011 vs. Q4 2010 2011 vs. 2010 Total Organic Total Organic Sales (26)% (26)% (8)% (9)% Orders 17% 17% (24)% (24)% Colfax 2011 Sales Split 8% Defense Colfax 2011 Orders Split Highlights ▪ Shipment and order activity continue to follo
Slide 15: Commercial Marine Market Perspective
15 Commercial Marine Market Perspective 15 Sales & Orders Growth Q4 2011 vs. Q4 2010 2011 vs. 2010 Total Organic Total Organic Sales -- (1)% 21% 12% Orders 13% 12% 38% 29% Colfax 2011 Sales Split 25% Comm. Marine Colfax 2011 Orders Split Highlights ▪ Sales were relatively flat, in line with internal
Slide 16: Howden and ESAB Update
Howden and ESAB Update 16 COLFAX
Slide 17: Charter Acquisition Update
17 Charter Acquisition Update • Transaction successfully closed on January 13 th • Initial focus at Howden: – Intensify focus of lean – Streamline functions and simplify organizational structure – Leverage existing best practice models – Deploy CBS and improve our value - added selling capability •
Slide 18: Results of Operations
Results of Operations 18 COLFAX
Slide 19: Income Statement Summary (Q4)
19 Income Statement Summary (unaudited) 19 Refer to Appendix for Non - GAAP reconciliation and footnotes. __________________ Note: Dollars in millions. Change 2011 2010 $ % Orders $ 153.4 $ 133.6 $ 19.8 14.8 % Sales $ 177.8 $ 166.7 $ 11.1 6.7 % Gross profit $ 61.5 $ 59.6 $ 1.9 3.2 % % of sales 34.6%
Slide 20: Income Statement Summary (Twelve Months)
20 Income Statement Summary (unaudited) 20 Refer to Appendix for Non - GAAP reconciliation and footnotes. __________________ Note: Dollars in millions. Twelve Months Ended December 31, Change 2011 2010 $ % Orders $ 682.8 $ 532.8 $ 150.0 28.2 % Sales $ 693.4 $ 542.0 $ 151.4 27.9 % Gross profit $ 240.
Slide 21: Appendix
Appendix 2 COLFAX
Slide 22: Disclaimer
22 Disclaimer 22 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, earnings before interest, tax
Slide 23: Non-GAAP Reconciliation
23 Non - GAAP Reconciliation (unaudited) ____________________ Note: Dollars in thousands. 2011 2010 2011 2010 EBITDA Net income (16,080)$ 8,650$ 4,555$ 16,215$ Interest expense 1,412 1,609 5,919 6,684 Provision for income taxes 7,095 9,296 15,432 11,473 Depreciation and amortization 5,172 4,888 22,5
Slide 24: Non-GAAP Reconciliation
24 Non - GAAP Reconciliation (unaudited) ____________________ Note: Dollars in thousands. ( 1) The effective tax rates used to calculate adjusted net income and adjusted net income per share present income taxes are 30.5 % for the 2011 periods and to 32% for the 2010 periods. 2011 2010 2011 2010 Adj
Slide 25: Sales & Order Growth
25 Sales & Order Growth (unaudited) ____________________ Note: Dollars in millions. $ % $ % $ % Twelve months ended December 31, 2010 542.0$ 532.8$ 313.5$ Components of Change: Existing Businesses 48.8 9.0 % 65.0 12.2 % (1.1) (0.4)% Acquisitions 81.3 15.0 % 64.0 12.0 % 40.2 12.8 % Foreign Currency T
Slide 26: 2012 Outlook Summary
26 2012 Outlook Summary Revenue Range 2012 Total (1) $4.0 billion To $4.1 billion EPS and Adjusted Net Income Range 2012 Net income per share $0.41 To $0.57 Adjusted net income $165,200 To $185,000 2012 Adjusted net income per share (1) $1.45 To $1.65 Assumptions Asbestos coverage litigation $6 mill
Slide 27: 2012 Outlook Summary (continued)
27 2012 Outlook Summary (continued) Assumptions (continued) Depreciation $100 million Amortization $76 million Interest Expense (based on LIBOR = 25 bps, EURIBOR = 70 bps) $98 million Capital Expenditures 2.5% of revenue Pension funding in excess of expense $40 million Preferred dividend $20 million
Slide 28: 2012 Organic Growth Outlook
28 2012 Organic Growth Outlook Note: Guidance as of 2/7/12 2012 Forecast Organic Growth Fluid handling 4 - 8% Howden 10 - 15% ESAB 2 - 4%
Slide 29: 2012 Rollforward
29 2012 Rollforward ____________________ Note: Dollars in thousands. Guidance as of 2/7/12. (1) Calculated using the 2012 definition. (See Non - GAAP Reconciliation included in this Appendix) Low High 2011 Proforma sales, Colfax adjusted operating income (1) FX @ 1.30 = Euro 1.00, others at January
Slide 30: Significant Impacts on 2012 Projected Earnings Per Share
30 Significant Impacts on 2012 Projected Earnings Per Share EPS Impact Preferred Stock Impact on EPS Available to Common Shareholders $0.20 / share Asbestos Liability and Defense Costs $0.05 / share Incremental Amortization of Intangibles $0.16 / share Pension Expense $0.15 / share
Slide 31: 2011 Adjusted Net Income – Current Presentation
31 2011 Adjusted Net Income – Current Presentation Q1 Q2 Q3 Q4 2011 Net income (loss) 6,555$ 10,390$ 3,690$ (16,080)$ 4,555$ Charter acquisition-related expense - - 5,728 25,324 31,052 Asbestos coverage litigation expense 2,066 3,302 3,086 2,246 10,700 Restructuring and other related charges 1,977 2
Slide 32: Non-GAAP Reconciliation
32 Non - GAAP Reconciliation (unaudited) Projected net income per share - diluted $ 0.41 $ 0.57 Fair value adjustments - Charter inventory and backlog 0.48 0.48 Restructuring costs - Charter 0.25 0.25 Asbestos coverage litigation 0.06 0.06 Charter transaction costs 0.40 0.40 Tax adjustment (0.15) (0