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Form 8-K Colfax CORP For: Jul 23

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July 23, 2015 6:29 AM EDT
UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549
 

FORM 8-K
 

CURRENT REPORT
 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported): July 23, 2015
 

Colfax Corporation

(Exact name of registrant as specified in its charter)

 
Delaware
001-34045
54-1887631
(State or other jurisdiction
(Commission
(I.R.S. Employer
of incorporation)
File Number)
Identification No.)

 

420 National Business Parkway, 5th Floor
Annapolis Junction, MD 20701
(Address of Principal Executive Offices) (Zip Code)
 
(301) 323-9000
(Registrant's telephone number, including area code)
 
(Former name or former address, if changed since last report)

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Item 2.02. Results of Operations and Financial Condition.

On July 23, 2015, Colfax Corporation issued a press release reporting financial results for the second quarter ended June 26, 2015. A copy of Colfax Corporation's press release is attached to this report as Exhibit 99.1 and is incorporated in this report by reference. Colfax Corporation has scheduled a conference call for 8:00 a.m. EDT on July 23, 2015 to discuss its financial results, and slides for that call are attached to this report as Exhibit 99.2 and are incorporated in this report by reference.





Item 9.01. Financial Statements and Exhibits.

(d)    Exhibits

99.1
Colfax Corporation press release dated July 23, 2015, reporting financial results for the second quarter ended June 26, 2015.

99.2
Colfax Corporation slides for July 23, 2015 conference call reporting financial results for the second quarter ended June 26, 2015.



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Colfax Corporation                     Date:     July 23, 2015                    By: /s/ C. Scott Brannan
Name: C. Scott Brannan
Title: Senior Vice President, Finance,
Chief Financial Officer and Treasurer

 



EXHIBIT INDEX

99.1
Colfax Corporation press release dated July 23, 2015, reporting financial results for the second quarter ended June 26, 2015.

99.2
Colfax Corporation slides for July 23, 2015 conference call reporting financial results for the second quarter ended June 26, 2015.








COLFAX REPORTS SECOND QUARTER 2015 RESULTS

•
Second quarter net income per dilutive share of $0.42, adjusted net income per share of $0.50
•
Second quarter net sales decreased 14.5% (a decrease of 4.5% organically) to $1,025.4 million
•
Gas- and fluid-handling finished the period with backlog of $1.364 billion
ANNAPOLIS JUNCTION, MD - July 23, 2015 - Colfax Corporation (NYSE: CFX), a leading global manufacturer of gas- and fluid-handling and fabrication technology products and services, today announced its financial results for the second quarter ended June 26, 2015.
For the second quarter of 2015, net income was $53.1 million, or $0.42 per dilutive share. Adjusted net income (as defined below) was $63.0 million, or $0.50 per share, compared to $59.6 million for the second quarter of 2014, or $0.48 per share.
Net sales were $1,025.4 million in the second quarter, a decrease of 14.5% from the prior year. Net sales decreased 4.5% organically compared to the second quarter of 2014. Second quarter operating income was $96.6 million, with adjusted operating income (as defined below) of $105.4 million. Adjusted operating income margin (as defined below) was 10.3% in the second quarter, an increase of 120 basis points from the prior year.
Second quarter gas- and fluid-handling orders decreased by 15.4% to $502.3 million compared to orders of $593.8 million for the second quarter of 2014, an organic order decrease of 4.7%. Gas- and fluid-handling finished the period with backlog of $1,364.4 million.

For the six months ended June 26, 2015 net income was $105.2 million, or $0.84 per dilutive share. Adjusted net income (as defined below) was $107.6 million, or $0.86 per share. Net sales for the six months ended June 26, 2015 were $1.936 billion, a decrease of 14.1% compared to net sales for the six months ended June 27, 2014. Operating income for the six months ended June 26, 2015 was $174.0 million, with adjusted operating income (as defined below) of $186.6 million. Adjusted operating income margin (as defined below) for the six months ended June 27, 2014 was 9.6%, an increase of 60 basis points as compared to the six months ended June 27, 2014.
Adjusted net income, adjusted net income per share, adjusted operating income, adjusted operating income margin, organic sales decrease and organic order decrease are not financial measures calculated in accordance with generally accepted accounting principles in the U.S. (“GAAP”). See below for a description of the measures' usefulness and a reconciliation of these measures to their most directly comparable GAAP financial measures.
Steve Simms, President and Chief Executive Officer, stated, “Operating performance in our Gas and Fluid Handling segment met our expectations with significant improvement in operating margins despite flattish sales. In Fabrication Technology, continued impact from lower oil and gas and mining spending resulted in lower than expected sales with the consequent decrease in operating margins.  We are aggressively reducing our cost base in response to the weak end markets in Fabrication Technology and have also lowered our expectations for the balance of 2015 in light of the persistently tepid demand.”




Non-GAAP Financial Measures and Other Adjustments
Colfax has provided in this press release 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, adjusted operating income margin, organic sales decrease and organic order decrease. Adjusted net income, adjusted net income per share, adjusted operating income and adjusted operating income margin exclude restructuring and other related charges. Adjusted net income and adjusted net income per share exclude the write-off of certain deferred financing fees and original issue discount associated with the refinancing of Colfax's credit agreement for the three and six months ended June 26, 2015, and the preferred stock conversion inducement payment for the six months ended June 27, 2014. The effective tax rates used to calculate adjusted net income and adjusted net income per share are 28.3% and 28.8% for the three and six months ended June 26, 2015, respectively. The effective tax rates used to calculate adjusted net income and adjusted net income per share are 30.7% and 29.0% for the three and six months ended June 27, 2014, respectively. Organic sales decrease and organic order decrease exclude the impact of acquisitions and foreign exchange rate fluctuations. These non-GAAP financial measures assist Colfax in comparing its operating performance on a consistent basis because, among other things, they remove the impact of restructuring and other related charges, write-off of certain deferred financing fees and original issue discount, and the preferred stock conversion inducement payment.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information calculated in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of non-GAAP financial measures presented above to GAAP results has been provided in the financial tables included in this press release.
Conference Call and Webcast
Colfax will host a conference call to provide details about its results on Thursday, July 23, 2015 at 8:00 a.m. EDT. The call will be open to the public through 877-303-7908 (U.S. callers) or 678-373-0875 (international callers) and referencing the conference ID number 83052694, or through webcast via Colfax's website at www.colfaxcorp.com under the “Investors” section. Access to a supplemental slide presentation can also be found at the Colfax website under the same heading. Both the audio of this call and the slide presentation will be archived on the website later today and will be available until the next quarterly call.
About Colfax Corporation
Colfax Corporation is a diversified global manufacturing and engineering company that provides gas- and fluid-handling and fabrication technology products and services to commercial and governmental customers around the world under the Howden, Colfax Fluid Handling and ESAB brands. Colfax believes that its brands are among the most highly recognized in each of the markets that it serves. Colfax is traded on the NYSE under the ticker "CFX." Additional information about Colfax is available at www.colfaxcorp.com.
CAUTIONARY NOTE CONCERNING FORWARD LOOKING STATEMENTS:
This press release may contain forward-looking statements, including forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements concerning Colfax's plans, objectives, expectations and intentions and other statements that are not historical or current fact. Forward-looking statements are based on Colfax's current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements. Factors that could cause Colfax's results to differ materially from current expectations include, but are not limited to factors detailed in Colfax's reports filed with the U.S. Securities and Exchange Commission including its 2014 Annual Report on Form 10-K under the caption “Risk Factors.” In addition, these statements are based on a number of assumptions that are subject to change. This press release speaks only as of the date hereof. Colfax disclaims any duty to update the information herein.
The term “Colfax” in reference to the activities described in this press release may mean one or more of Colfax's global operating subsidiaries and/or their internal business divisions and does not necessarily indicate activities engaged in by Colfax Corporation.
Contact:
Terry Ross, Vice President of Investor Relations
Colfax Corporation
301-323-9054



Colfax Corporation
Condensed Consolidated Statements of Income
Dollars in thousands, except per share data
(Unaudited)



 
Three Months Ended
 
Six Months Ended
 
June 26, 2015
 
June 27, 2014
 
June 26, 2015
 
June 27, 2014
 
 
 
 
 
 
 
 
Net sales
$
1,025,375

 
$
1,199,336

 
$
1,936,445

 
$
2,253,667

Cost of sales
697,338

 
811,165

 
1,313,970

 
1,539,864

Gross profit
328,037

 
388,171

 
622,475

 
713,803

Selling, general and administrative expense
222,629

 
279,029

 
435,861

 
510,611

Restructuring and other related charges
8,834

 
13,474

 
12,587

 
19,786

Operating income
96,574

 
95,668

 
174,027

 
183,406

Interest expense (1)
14,249

 
13,624

 
26,293

 
25,946

Income before income taxes
82,325

 
82,044

 
147,734

 
157,460

Provision for (benefit from) income taxes
23,496

 
(116,300
)
 
32,630

 
(95,721
)
Net income
58,829

 
198,344

 
115,104

 
253,181

Less: income attributable to noncontrolling interest, net of taxes
5,702

 
6,559

 
9,921

 
14,606

Net income attributable to Colfax Corporation
53,127

 
191,785

 
105,183

 
238,575

Dividends on preferred stock
—

 
—

 
—

 
2,348

Preferred stock conversion inducement payment
—

 
—

 
—

 
19,565

Net income available to Colfax Corporation common shareholders
$
53,127

 
$
191,785

 
$
105,183

 
$
216,662

Net income per share - basic
$
0.43

 
$
1.55

 
$
0.85

 
$
1.83

Net income per share - diluted
$
0.42

 
$
1.53

 
$
0.84

 
$
1.81

__________
(1) Includes noncash charges associated with the write-off of original issue discount and deferred costs in connection with the refinancing of our primary credit facility of $4.7 million during the three and six months ended June 26, 2015.



Colfax Corporation
Reconciliation of GAAP to Non-GAAP Financial Measures
In thousands, except per share data
(Unaudited)
 
Three Months Ended
 
Six Months Ended
 
June 26, 2015
 
June 27, 2014
 
June 26, 2015
 
June 27, 2014
Adjusted Operating Income
 
 
 
 
 
 
 
Operating income
$
96,574

 
$
95,668

 
$
174,027

 
$
183,406

Restructuring and other related charges
8,834

 
13,474

 
12,587

 
19,786

Adjusted operating income
$
105,408

 
$
109,142

 
$
186,614

 
$
203,192

Adjusted operating income margin
10.3
%
 
9.1
%
 
9.6
%
 
9.0
%
 
Three Months Ended
 
Six Months Ended
 
June 26, 2015
 
June 27, 2014
 
June 26, 2015
 
June 27, 2014
Adjusted Net Income
 
 
 
 
 
 
 
Net income attributable to Colfax Corporation
$
53,127

 
$
191,785

 
$
105,183

 
$
238,575

Restructuring and other related charges
8,834

 
13,474

 
12,587

 
19,786

Debt extinguishment charges - Refinancing of credit agreement
4,731

 
—

 
4,731

 
—

Tax adjustment(1)
(3,643
)
 
(145,634
)
 
(14,905
)
 
(147,122
)
Adjusted net income
$
63,049

 
$
59,625

 
$
107,596

 
$
111,239

Adjusted net income margin
6.1
%
 
5.0
%
 
5.6
%
 
4.9
%
 
 
 
 
 
 
 
 
Adjusted Net Income Per Share
 
 
 
 
 
 
 
Net income available to Colfax Corporation common shareholders
$
53,127

 
$
191,785

 
$
105,183

 
$
216,662

Restructuring and other related charges
8,834

 
13,474

 
12,587

 
19,786

Debt extinguishment charges - Refinancing of credit agreement
4,731

 
—

 
4,731

 
—

Preferred stock conversion inducement payment(2)
—

 
—

 
—

 
19,565

Tax adjustment(1)
(3,643
)
 
(145,634
)
 
(14,905
)
 
(147,122
)
Adjusted net income available to Colfax Corporation common shareholders
63,049

 
59,625

 
107,596

 
108,891

Dividends on preferred stock(2)
—

 
—

 
—

 
2,348

 
$
63,049

 
$
59,625

 
$
107,596

 
$
111,239

Weighted-average shares outstanding - diluted
125,261,738

 
125,485,480

 
125,181,467

 
122,721,700

Adjusted net income per share
$
0.50

 
$
0.48

 
$
0.86

 
$
0.91

 
 
 
 
 
 
 
 
Net income per share — diluted (in accordance with GAAP)
$
0.42

 
$
1.53

 
$
0.84

 
$
1.81

__________
(1) The effective tax rates used to calculate adjusted net income and adjusted net income per share are 28.3% and 28.8% for the three and six months ended June 26, 2015, respectively, and 30.7% and 29.0% for the three and six months ended June 27, 2014, respectively.
 
(2) Adjusted net income per share for the period prior to February 12, 2014 was calculated under the if-converted method in accordance with GAAP. On February 12, 2014, the Series A Perpetual Convertible Preferred Stock were converted to Common stock and the Company paid a $19.6 million conversion inducement to the holders of the Series A Perpetual Convertible Preferred Stock.


Colfax Corporation
Change in Sales, Orders and Backlog
Dollars in millions
(Unaudited)


 
Net Sales
 
Orders
 
 
 
$
 
%
 
$
 
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the three months ended June 27, 2014
$
1,199.3

 
 
 
$
593.8

 
 
 
 
 
 
Components of Change:
 
 
 
 
 
 
 
 
 
 
 
Existing Businesses
(53.9
)
 
(4.5
)%
 
(28.1
)
 
(4.7
)%
 
 
 
 
Acquisitions (1)
19.4

 
1.6
 %
 
—

 
—
 %
 
 
 
 
Foreign Currency Translation
(139.4
)
 
(11.6
)%
 
(63.4
)
 
(10.7
)%
 
 
 
 
Total
(173.9
)
 
(14.5
)%
 
(91.5
)
 
(15.4
)%
 
 
 
 
For the three months ended June 26, 2015
$
1,025.4

 
 
 
$
502.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
 
Orders
 
Backlog at Period End
 
$
 
%
 
$
 
%
 
$
 
%
 
 
 
 
 
 
 
 
 
 
 
 
As of and for the six months ended June 27, 2014
$
2,253.7

 
 
 
$
1,177.2

 
 
 
$
1,584.8

 
 
Components of Change:
 
 
 
 
 
 
 
 
 
 
 
Existing Businesses
(183.2
)
 
(8.1
)%
 
(112.8
)
 
(9.6
)%
 
(55.0
)
 
(3.5
)%
Acquisitions (1)
123.3

 
5.5
 %
 
—

 
—
 %
 
—

 
—
 %
Foreign Currency Translation
(257.4
)
 
(11.5
)%
 
(115.1
)
 
(9.8
)%
 
(165.4
)
 
(10.4
)%
Total
(317.3
)
 
(14.1
)%
 
(227.9
)
 
(19.4
)%
 
(220.4
)
 
(13.9
)%
As of and for the six months ended June 26, 2015
$
1,936.4

 
 
 
$
949.3

 
 
 
$
1,364.4

 
 

 
(1) Represents the incremental sales as a result of our acquisition of Victor Technologies Holdings, Inc.





SECOND QUARTER 2015 | EARNINGS CONFERENCE CALL

 
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 plans, objectives, expectations and intentions and other statements that are not historical or current facts. Forward-looking statements are based on Colfax's current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements. Factors that could cause Colfax's results to differ materially from current expectations include, but are not limited to, factors detailed in Colfax's reports filed with the U.S. Securities and Exchange Commission including its 2014 Annual Report on Form 10-K under the caption “Risk Factors”. In addition, these statements are based on a number of assumptions that are subject to change. This presentation speaks only as of this date. Colfax disclaims any duty to update the information herein.

 
Q2 2015 RESULTS

 
4 Q2 2015 HIGHLIGHTS • Adjusted net income of $63.0 million ($0.50 per share) compared to $59.6 million ($0.48 per share) in Q2 2014 • Q2 2015 excludes non-cash charges of $4.7 million associated with the refinancing of the Company's credit agreement • Net sales of $1.025 billion, a decrease of 14.5% from Q2 2014 net sales of $1.199 billion (an organic decline of 4.5%) • Adjusted operating income of $105.4 million and adjusted operating income margin of 10.3%, an increase of 120 basis points from Q2 2014 • Second quarter gas- and fluid-handling orders of $502.3 million compared to orders of $593.8 million in Q2 2014, a decrease of 15.4% (an organic decline of 4.7%) • Gas- and fluid-handling backlog of $1.364 billion at period end

 
5 YEAR TO DATE 2015 HIGHLIGHTS • Adjusted net income of $107.6 million ($0.86 per share) compared to $111.2 million ($0.91 per share) in the six months ended June 27, 2014 • Net sales of $1.936 billion, a decrease of 14.1% from the six months ended June 27, 2014 net sales of $2.254 billion (an organic decline of 8.1%) • Adjusted operating income of $186.6 million and adjusted operating income margin of 9.6%, a margin increase of 60 basis points from the six months ended June 27, 2014 • Gas- and fluid-handling orders of $949.3 million compared to orders of $1.177 billion in the six months ended June 27, 2014, a decrease of 19.4% (an organic decline of 9.6%)

 
GAS AND FLUID HANDLING

 
7 GAS AND FLUID HANDLING Q2 2015 HIGHLIGHTS • Net sales of $504.9 million compared to net sales of $568.9 million in Q2 2014, a decrease of 11.2% (an organic decline of 0.9%) • Adjusted segment operating income of $64.2 million and adjusted segment operating income margin of 12.7% as compared to 8.0% in Q2 2014 • Second quarter orders of $502.3 million compared to orders of $593.8 million in Q2 2014, a decrease of 15.4% (an organic decline of 4.7%) • Backlog of $1.364 billion at period end

 
8 GAS AND FLUID HANDLING YTD 2015 HIGHLIGHTS • Net sales of $927.1 million compared to net sales of $1.143 billion in the six months ended June 27, 2014, a decrease of 18.9% (an organic decline of 9.1%) • Adjusted segment operating income of $100.5 million and adjusted segment operating income margin of 10.8%, an improvement of 190 basis points over the six months ended June 27, 2014 • Orders of $949.3 million compared to orders of $1.177 billion in the six months ended June 27, 2014, a decrease of 19.4% (an organic decline of 9.6%)

 
9 ORDERS AND BACKLOG ORDERS BACKLOG Note: Dollars in millions (unaudited). $1.58B QTD YTD Existing Businesses (4.7)% (9.6)% Acquisitions —% —% FX Translation (10.7)% (9.8)% Total Decline (15.4)% (19.4)% $1.35B $1.36B

 
10 GEOGRAPHIC EXPOSURE YTD 2015 REVENUE REVENUE AFTERMARKET REVENUE YTD 2015 Note: Dollars in millions (unaudited). QTD YTD Existing Businesses (0.9)% (9.1)% Acquisitions —% —% FX Translation (10.3)% (9.8)% Total Decline (11.2)% (18.9)% ▪ Foremarket ▪ Aftermarket ▪ Developed Economies ▪ Emerging Markets 35% 65% 43% 57%

 
11 Q2 2015 SALES AND ORDERS BY END MARKET SALES: $504.9 million Total Decline Organic Growth (Decline) Power Generation (5.9)% 0.6% Oil, Gas & Petrochemical (9.9)% 2.8% Marine (6.0)% 8.9% Mining (2.6)% 11.7% General Industrial & Other (21.0)% (10.3)% Total (11.2)% (0.9)% ORDERS: $502.3 million Total Growth (Decline) Organic Growth (Decline) Power Generation 3.4% 11.1% Oil, Gas & Petrochemical 17.8% 30.9% Marine (60.9)% (51.1)% Mining (38.3)% (23.1)% General Industrial & Other (21.9)% (9.9)% Total (15.4)% (4.7)%

 
12 YTD 2015 SALES AND ORDERS BY END MARKET SALES: $927.1 million Total Decline Organic (Decline) Growth Power Generation (21.9)% (15.9)% Oil, Gas & Petrochemical (20.8)% (7.9)% Marine (11.6)% 2.9% Mining (4.1)% 8.7% General Industrial & Other (18.8)% (8.6)% Total (18.9)% (9.1)% ORDERS: $949.3 million Total (Decline) Growth Organic (Decline) Growth Power Generation (22.1)% (15.7)% Oil, Gas & Petrochemical 13.1% 25.6% Marine (43.8)% (31.9)% Mining (29.0)% (15.7)% General Industrial & Other (20.9)% (10.2)% Total (19.4)% (9.6)%

 
13 POWER GENERATION MARKET PERSPECTIVE SALES & ORDERS (DECLINE) GROWTH • Served by both Howden and Colfax Fluid Handling • New-build activity offset non-recurring SCR projects in China • Solid aftermarket order growth in North America • Continued focus on new-build market in Southeast and East Asia YTD 2015 SALES SPLIT YTD 2015 ORDERS SPLIT HIGHLIGHTS Q2 2015 vs. Q2 2014 YTD 2015 vs. YTD 2014 Total Organic Total Organic Sales (5.9)% 0.6% (21.9)% (15.9)% Orders 3.4% 11.1% (22.1)% (15.7)% 34% 34%

 
14 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 • Quarterly order growth led by $40 million supply contract at Howden Compressors Division YTD 2015 SALES SPLIT YTD 2015 ORDERS SPLIT HIGHLIGHTS Q2 2015 vs. Q2 2014 YTD 2015 vs. YTD 2014 Total Organic Total Organic Sales (9.9)% 2.8% (20.8)% (7.9)% Orders 17.8% 30.9% 13.1% 25.6% 20% 24%

 
15 MARINE MARKET PERSPECTIVE SALES & ORDERS (DECLINE) GROWTH • Primarily served by Colfax Fluid Handling • Year over year comparisons affected by $30 million Defense contract awarded in Q2 2014 • Commercial ship building down • Continued focus on aftermarket growth and expansion of product line YTD 2015 SALES SPLIT YTD 2015 ORDERS SPLIT HIGHLIGHTS Note: Marine market comprised of commercial marine and government, or defense, customers Q2 2015 vs. Q2 2014 YTD 2015 vs. YTD 2014 Total Organic Total Organic Sales (6.0)% 8.9% (11.6)% 2.9% Orders (60.9)% (51.1)% (43.8)% (31.9)% 11% 10%

 
16 MINING MARKET PERSPECTIVE SALES & ORDERS (DECLINE) GROWTH • Primarily served by Howden • Remains a depressed market; focused on winning targeted projects YTD 2015 SALES SPLIT YTD 2015 ORDERS SPLIT HIGHLIGHTS Q2 2015 vs. Q2 2014 YTD 2015 vs. YTD 2014 Total Organic Total Organic Sales (2.6)% 11.7% (4.1)% 8.7% Orders (38.3)% (23.1)% (29.0)% (15.7)% 6% 5%

 
17 GENERAL INDUSTRIAL & OTHER MARKET PERSPECTIVE SALES & ORDERS DECLINE • Includes both Howden and Colfax Fluid Handling • Steel industry spend significantly down compared to prior year • Modest growth in other industrial sectors YTD 2015 SALES SPLIT YTD 2015 ORDERS SPLIT HIGHLIGHTS Q2 2015 vs. Q2 2014 YTD 2015 vs. YTD 2014 Total Organic Total Organic Sales (21.0)% (10.3)% (18.8)% (8.6)% Orders (21.9)% (9.9)% (20.9)% (10.2)% 29% 27%

 
FABRICATION TECHNOLOGY

 
19 FABRICATION TECHNOLOGY Q2 2015 HIGHLIGHTS • Net sales of $520.5 million compared to net sales of $630.4 million in Q2 2014, a decrease of 17.4% (an organic decline of 7.8%) • Adjusted segment operating income of $53.9 million and adjusted segment operating income margin of 10.4%

 
20 FABRICATION TECHNOLOGY YTD 2015 HIGHLIGHTS • Net sales of $1.009 billion compared to net sales of $1.111 billion in the six months ended June 27, 2014, a decrease of 9.1% (an organic decline of 7.2%) • Adjusted segment operating income of $111.2 million and adjusted segment operating income margin of 11.0%

 
21 GEOGRAPHIC EXPOSURE YTD 2015 REVENUE REVENUE REVENUE YTD 2015 Note: Dollars in millions (unaudited). ▪ Consumables ▪ Equipment 74% 26% ▪ Developed Economies ▪ Emerging Markets 47% 53% QTD YTD Volume (3.9)% (4.0)% Price/ Mix (3.9)% (3.2)% Acquisitions 3.1% 11.1% FX Translation (12.7)% (13.0)% Total Decline (17.4)% (9.1)%

 
RESULTS OF OPERATIONS

 
23 INCOME STATEMENT SUMMARY (unaudited) Refer to Appendix for Non-GAAP reconciliation and footnotes. Note: Dollars in millions, except per share amounts. Three Months Ended Six Months Ended June 26, 2015 June 27, 2014 June 26, 2015 June 27, 2014 Net sales $ 1,025.4 $ 1,199.3 $ 1,936.4 $ 2,253.7 Gross profit $ 328.0 $ 388.2 $ 622.5 $ 713.8 % of sales 32.0 % 32.4 % 32.1 % 31.7 % SG&A expense $ 222.6 $ 279.0 $ 435.9 $ 510.6 % of sales 21.7 % 23.3 % 22.5 % 22.7 % Adjusted operating income $ 105.4 $ 109.1 $ 186.6 $ 203.2 % of sales 10.3 % 9.1 % 9.6 % 9.0 % Adjusted net income $ 63.0 $ 59.6 $ 107.6 $ 111.2 % of sales 6.1 % 5.0 % 5.6 % 4.9 % Adjusted net income per share $ 0.50 $ 0.48 $ 0.86 $ 0.91

 
APPENDIX

 
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, projected adjusted operating income, adjusted net income, adjusted net income per share, adjusted operating income, adjusted operating income margin, organic sales growth (decline) and organic order growth (decline). Projected adjusted net income, projected adjusted net income per share, projected adjusted operating income, adjusted net income, adjusted net income per share, adjusted operating income and adjusted operating income margin exclude the impact of restructuring and other related charges. Projected adjusted net income, projected adjusted net income per share, adjusted net income and adjusted net income per share for the 2015 periods presented exclude the impact of the write-off of certain deferred financing fees and original issue discount associated with the refinancing of Colfax's credit agreement. Adjusted net income and adjusted net income per share for the six months ended June 27, 2014 exclude the impact of the preferred stock conversion inducement payment. The effective tax rates used to calculate adjusted net income and adjusted net income per share are 28.3% and 28.8% for the three and six months ended June 26, 2015, respectively, and 30.7% and 29.0% for the three and six months ended June 27, 2014, respectively. Organic sales growth (decline) and organic order growth (decline) exclude the impact of acquisitions and foreign exchange rate fluctuations. These non-GAAP financial measures assist Colfax in comparing its operating performance on a consistent basis because, among other things, they remove the impact of restructuring and other related charges, write-off of certain deferred financing fees and original issue discount and the preferred stock conversion inducement payment. Sales and order information by end market are estimates. We periodically update our customer groupings order to refine these estimates.

 
26 NON-GAAP RECONCILIATION (unaudited) _____________________ Note: Dollars in thousands. Six Months Ended June 26, 2015 Six Months Ended June 27, 2014 Gas and Fluid Handling Fabrication Technology Corporate and Other Total Colfax Corporation Gas and Fluid Handling Fabrication Technology Corporate and Other Total Colfax Corporation Net sales $ 927,084 $ 1,009,361 $ — $ 1,936,445 $ 1,142,889 $ 1,110,778 $ — $ 2,253,667 Operating income (loss) 95,159 10.3 % 103,937 10.3 % (25,069 ) 174,027 9.0 % 92,150 8.1 % 120,703 10.9 % (29,447 ) 183,406 8.1 % Restructuring and other related charges 5,304 7,283 — 12,587 9,538 10,248 — 19,786 Adjusted operating income (loss) $ 100,463 10.8 % $ 111,220 11.0 % $ (25,069 ) $ 186,614 9.6 % $ 101,688 8.9 % $ 130,951 11.8 % $ (29,447 ) $ 203,192 9.0 % Three Months Ended June 26, 2015 Three Months Ended June 27, 2014 Gas and Fluid Handling Fabrication Technology Corporate and Other Total Colfax Corporation Gas and Fluid Handling Fabrication Technology Corporate and Other Total Colfax Corporation Net sales $ 504,875 $ 520,500 $ — $ 1,025,375 $ 568,940 $ 630,396 $ — $ 1,199,336 Operating income (loss) 61,547 12.2 % 47,699 9.2 % (12,672 ) 96,574 9.4 % 39,052 6.9 % 70,252 11.1 % (13,636 ) 95,668 8.0 % Restructuring and other related charges 2,659 6,175 — 8,834 6,638 6,836 — 13,474 Adjusted operating income (loss) $ 64,206 12.7 % $ 53,874 10.4 % $ (12,672 ) $ 105,408 10.3 % $ 45,690 8.0 % $ 77,088 12.2 % $ (13,636 ) $ 109,142 9.1 %

 
27 NON-GAAP RECONCILIATION (unaudited) (1) The effective tax rates used to calculate adjusted net income and adjusted net income per share are 28.3% and 28.8% for the three and six months ended June 26, 2015, respectively, and 30.7% and 29.0% for the three and six months ended June 27, 2014, respectively. (2) Adjusted net income per share for the period prior to February 12, 2014 was calculated under the if-converted method in accordance with GAAP. On February 12, 2014, the Series A Perpetual Convertible Preferred Stock were converted to Common stock and the Company paid a $19.6 million conversion inducement to the holders of the Series A Perpetual Convertible Preferred Stock. _____________________ Note: Dollars in thousands, except per share amounts. Three Months Ended Six Months Ended June 26, 2015 June 27, 2014 June 26, 2015 June 27, 2014 Adjusted Net Income Net income attributable to Colfax Corporation $ 53,127 $ 191,785 $ 105,183 $ 238,575 Restructuring and other related charges 8,834 13,474 12,587 19,786 Debt extinguishment charges - Refinancing of credit agreement 4,731 — 4,731 — Tax adjustment(1) (3,643 ) (145,634 ) (14,905 ) (147,122 ) Adjusted net income $ 63,049 $ 59,625 $ 107,596 $ 111,239 Adjusted net income margin 6.1 % 5.0 % 5.6 % 4.9 % Adjusted Net Income Per Share Net income available to Colfax Corporation common shareholders $ 53,127 $ 191,785 $ 105,183 $ 216,662 Restructuring and other related charges 8,834 13,474 12,587 19,786 Debt extinguishment charges - Refinancing of credit agreement 4,731 — 4,731 — Preferred stock conversion inducement payment(2) — — — 19,565 Tax adjustment(1) (3,643 ) (145,634 ) (14,905 ) (147,122 ) Adjusted net income available to Colfax Corporation common shareholders 63,049 59,625 107,596 108,891 Dividends on preferred stock(2) — — — 2,348 $ 63,049 $ 59,625 $ 107,596 $ 111,239 Weighted-average shares outstanding - diluted 125,261,738 125,485,480 125,181,467 122,721,700 Adjusted net income per share $ 0.50 $ 0.48 $ 0.86 $ 0.91 Net income per share — diluted (in accordance with GAAP) $ 0.42 $ 1.53 $ 0.84 $ 1.81

 
28 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 six months ended June 27, 2014 $ 2,253.7 $ 1,177.2 $ 1,584.8 Components of Change: Existing Businesses (183.2 ) (8.1 )% (112.8 ) (9.6 )% (55.0 ) (3.5 )% Acquisition(1) 123.3 5.5 % — — % — — % Foreign Currency Translation (257.4 ) (11.5 )% (115.1 ) (9.8 )% (165.4 ) (10.4 )% Total (317.3 ) (14.1 )% (227.9 ) (19.4 )% (220.4 ) (13.9 )% As of and for the six months ended June 26, 2015 $ 1,936.4 $ 949.3 $ 1,364.4 Net Sales Orders $ % $ % For the three months ended June 27, 2014 $ 1,199.3 $ 593.8 Components of Change: Existing Businesses (53.9 ) (4.5 )% (28.1 ) (4.7 )% Acquisition(1) 19.4 1.6 % — — % Foreign Currency Translation (139.4 ) (11.6 )% (63.4 ) (10.7 )% Total (173.9 ) (14.5 )% (91.5 ) (15.4 )% For the three months ended June 26, 2015 $ 1,025.4 $ 502.3

 
29 2015 OUTLOOK SUMMARY (July Update) _____________________ Note: Guidance as of July 23, 2015. (1) Excludes impact of restructuring charges, gain on reversal of tax accruals and non-cash charges on debt refinancing. (2) Portion of range relates to uncertainty on tax extenders. REVENUE RANGE 2015 Total $4.035 billion To $4.110 billion EPS AND ADJUSTED NET INCOME RANGE 2015 Net income per share $1.61 To $1.71 Adjusted operating income $405 million To $423 million Adjusted net income - Colfax (1) $231 million To $243 million 2015 Adjusted net income per share (1) $1.83 To $1.93 ASSUMPTIONS Restructuring costs $50 million Euro (average for year) $1.10 Tax rate - adjusted basis/GAAP (2) 28-30% Outstanding shares 126 million Depreciation $87 million Amortization (including $2 million inventory step-up) $63 million Interest expense (based on LIBOR and EURIBOR = 25 bps) $47 million

 
30 2015 OUTLOOK SUMMARY (July Update) _____________________ Note: Guidance as of July 23, 2015. In thousands, except per share data 2015 Low High Revenue $ 4,035,000 $ 4,110,000 Adjusted Operating Profit (1) 405,000 423,000 Interest (47,000 ) (47,000 ) Taxes (104,000 ) (109,000 ) Noncontrolling interest (23,000 ) (24,000 ) Adjusted Net Income - Colfax $ 231,000 $ 243,000 Adjust EPS $ 1.83 $ 1.93 (1) Includes transaction costs and year-one fair value adjustments from the Roots Acquisition of $6 million.

 
31 NON-GAAP RECONCILIATION (July Update) _____________________ Note: Guidance as of July 23, 2015. 2015 EPS Range Low High Projected net income per share - diluted $ 1.61 $ 1.71 Restructuring costs 0.39 0.39 Non-cash charge on debt refinancing (1) 0.04 0.04 Tax adjustment (2) (0.21 ) (0.21 ) Projected adjusted net income per share - diluted $ 1.83 $ 1.93 (1) Reflects the non-cash charge associated with the June 2015 refinancing of the principal credit facility. (2) Excludes gain on tax accrual reversals and tax implication of adjustments above.

 

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