Slide 1: First Quarter 2015 Earnings Conference Call
FIRST QUARTER 2015 | 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: Q1 2015 Results
Q1 2015 RESULTS
Slide 4: Q1 2015 Highlights
4 Q1 2015 HIGHLIGHTS • Adjusted net income of $44.5 million ($0.36 per share) compared to $51.6 million ($0.43 per share) in Q1 2014 • Net sales of $911.1 million, a decrease of 13.6% from Q1 2014 net sales of $1,054.3 million (an organic decline of 12.3%) • Adjusted operating income of $81.2 millio
Slide 5: Gas and Fluid Handling
GAS AND FLUID HANDLING
Slide 6: Gas and Fluid Handling Q1 2015 Highlights
6 GAS AND FLUID HANDLING Q1 2015 HIGHLIGHTS • Net sales of $422.2 million compared to net sales of $573.9 million in Q1 2014, a decrease of 26.4% (an organic decline of 17.2%) • Adjusted segment operating income of $36.3 million and adjusted segment operating income margin of 8.6% • First quarter or
Slide 7: Orders and Backlog
7 ORDERS AND BACKLOG ORDERS BACKLOG Note: Dollars in millions (unaudited). $1.59B Q1 Existing Businesses (14.5)% Acquisitions —% FX Translation (8.9)% Total Decline (23.4)% $1.40B $1.35B
Slide 8: Geographic Exposure
8 GEOGRAPHIC EXPOSURE 2015 REVENUE REVENUE AFTERMARKET REVENUE 2015 Note: Dollars in millions (unaudited). Q1 Existing Businesses (17.2)% Acquisitions —% FX Translation (9.2)% Total Decline (26.4)% ▪ Foremarket ▪ Aftermarket ▪ Developed Economies ▪ Emerging Markets 34% 66% 42% 58%
Slide 9: Q1 2015 Sales and Orders by End Market
9 Q1 2015 SALES AND ORDERS BY END MARKET SALES: $422.2 million Total Decline Organic (Decline) Growth Power Generation (34.4)% (28.6)% Oil, Gas & Petrochemical (31.9)% (18.8)% Marine (17.4)% (3.3)% Mining (6.4)% 4.3% General Industrial & Other (16.8)% (7.3)% Total (26.4)% (17.2)% ORDERS: $446.9 mill
Slide 10: Power Generation Market Perspective
10 POWER GENERATION MARKET PERSPECTIVE SALES & ORDERS DECLINE • Served by both Howden and Colfax Fluid Handling • Declines due to tailing off of China SCR and timing of new- build projects • Continued strong investment levels in new capacity in Southeast Asia 2015 SALES SPLIT 2015 ORDERS SPLIT HIGHL
Slide 11: Oil, Gas & Petrochemical Market Perspective
11 OIL, GAS & PETROCHEMICAL MARKET PERSPECTIVE SALES & ORDERS (DECLINE) GROWTH • Served by both Howden and Colfax Fluid Handling • Period over period comparisons are difficult due to the timing of large projects • Received follow-on compressor orders in Middle East and orders for multiple Russian do
Slide 12: Marine Market Perspective
12 MARINE MARKET PERSPECTIVE SALES & ORDERS (DECLINE) GROWTH • Primarily served by Colfax Fluid Handling • Defense spending increase partially offset by declines from commercial ship building and offshore vessels for the oil & gas sector 2015 SALES SPLIT 2015 ORDERS SPLIT HIGHLIGHTS Note: Marine mar
Slide 13: Mining Market Perspective
13 MINING MARKET PERSPECTIVE SALES & ORDERS (DECLINE) GROWTH • Primarily served by Howden • Remains a depressed market; focused on winning targeted projects 2015 SALES SPLIT 2015 ORDERS SPLIT HIGHLIGHTS Q1 2015 vs. Q1 2014 Total Organic Sales (6.4)% 4.3% Orders (18.6)% (7.3)% 5% 5%
Slide 14: General Industrial & Other Market Perspective
14 GENERAL INDUSTRIAL & OTHER MARKET PERSPECTIVE SALES & ORDERS DECLINE • Includes both Howden and Colfax Fluid Handling • Volatile quarter to quarter due to large orders • Increased pump orders in Q1 2015 and continued expansion into new industrial applications suggests potential for modest growth
Slide 15: Fabrication Technology
FABRICATION TECHNOLOGY
Slide 16: Fabrication Technology Highlights
16 FABRICATION TECHNOLOGY HIGHLIGHTS • Net sales of $488.9 million compared to net sales of $480.4 million in Q1 2014, an increase of 1.8% (an organic decline of 6.4%) • Adjusted segment operating income of $57.3 million and adjusted segment operating income margin of 11.7% •Improvement of 50 basis
Slide 17: Geographic Exposure
17 GEOGRAPHIC EXPOSURE 2015 REVENUE REVENUE REVENUE 2015 Note: Dollars in millions (unaudited). ▪ Consumables ▪ Equipment 75% 25% ▪ Developed Economies ▪ Emerging Markets 46% 54% Q1 Volume (4.0)% Price/ Mix (2.4)% Acquisitions 21.6% FX Translation (13.4)% Total Growth 1.8%
Slide 18: Results of Operations
RESULTS OF OPERATIONS
Slide 19: Income Statement Summary
19 INCOME STATEMENT SUMMARY (unaudited) Refer to Appendix for Non-GAAP reconciliation and footnotes. Note: Dollars in millions, except per share amounts. Three Months Ended March 27, 2015 March 28, 2014 Net sales $ 911.1 $ 1,054.3 Gross profit $ 294.4 $ 325.6 % of sales 32.3 % 30.9 % SG&A expense $
Slide 20: Colfax
COLFAX > —— Se ——aan
Slide 21: Disclaimer
21 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 22: Non-GAAP Reconciliation
22 NON-GAAP RECONCILIATION (unaudited) (1) The effective tax rates used to calculate adjusted net income and adjusted net income per share are 29.5% and 27.0% for the first quarters of 2015 and 2014, respectively. (2) Adjusted net income per share for periods prior to February 12, 2014, was calculat
Slide 23: Non-GAAP Reconciliation
23 NON-GAAP RECONCILIATION (unaudited) _____________________ Note: Dollars in thousands. Three Months Ended March 27, 2015 Three Months Ended March 28, 2014 Gas and Fluid Handling Fabrication Technology Corporate and Other Total Colfax Corporation Gas and Fluid Handling Fabrication Technology Corpor
Slide 24: Change in Sales, Orders and Backlog
24 CHANGE IN SALES, ORDERS AND BACKLOG (unaudited) _____________________ Note: Dollars in millions. (1) Represents the incremental sales as a result of our acquisition of Victor Technologies Holdings, Inc. Net Sales Orders Backlog at Period End $ % $ % $ % As of and for the three months ended March