CFX 8-K - Q3 2013 Earnings
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): October 24, 2013
 

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.)

 

8170 Maple Lawn Boulevard, Suite 180
Fulton, MD 20759
(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 October 24, 2013, Colfax Corporation issued a press release reporting financial results for the third quarter ended September 27, 2013. 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 October 24, 2013 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 October 24, 2013, reporting financial results for the third quarter ended September 27, 2013.

99.2
Colfax Corporation slides for October 24, 2013 conference call reporting financial results for the third quarter ended September 27, 2013.




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:     October 24, 2013                        By: /s/ C. Scott Brannan
Name: C. Scott Brannan
Title: Senior Vice President, Finance and Chief
Financial Officer

 




EXHIBIT INDEX

99.1
Colfax Corporation press release dated October 24, 2013, reporting financial results for the third quarter ended September 27, 2013.

99.2
Colfax Corporation slides for October 24, 2013 conference call reporting financial results for the third quarter ended September 27, 2013.




Q3 2013 Earnings Press Release


COLFAX REPORTS RECORD THIRD QUARTER 2013 RESULTS
FULTON, MD - October 24, 2013 - Colfax Corporation (NYSE: CFX) today announced its financial results for the third quarter ended September 27, 2013. On a year-over-year basis, highlights for the third quarter and year-to-date period include:
Third Quarter of 2013 (all comparisons versus the third quarter of 2012)
Net income of $50.4 million ($0.48 per dilutive share); adjusted net income (as defined below) of $64.1 million ($0.56 per share), which includes a non-cash 4 cents per share gain related to a discrete deferred tax benefit
Net sales of $1.015 billion, an increase of 6.3% from Q3 2012 net sales (an organic increase of 3.0%)
Operating income of $102.8 million; adjusted operating income (as defined below) of $112.2 million
Third quarter gas- and fluid-handling orders of $533.3 million compared to orders of $443.8 million in Q3 2012, an increase of 20.2% (an organic increase of 16.4%)
Gas- and fluid-handling backlog of $1.447 billion at period end
Nine Months Ended September 27, 2013 (all comparisons versus the nine months ended September 28, 2012)
Net income of $126.2 million ($1.23 per dilutive share); adjusted net income (as defined below) of $159.7 million ($1.41 per share)
Net sales of $3.036 billion, an increase of 5.2% from net sales for the nine months ended September 28, 2012 (an organic increase of 0.1%)
Operating income of $286.8 million; adjusted operating income (as defined below) of $307.0 million
Gas- and fluid-handling orders of $1.514 billion, an increase of 2.6%
Adjusted net income, adjusted net income per share, adjusted operating income, organic sales growth and organic order growth (decline) 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, “We are pleased to report another strong quarter operationally in both segments. Strong order trends and organic revenue growth in the gas- and fluid- handling segment speak to the strength of that business.  While revenues in fabrication technology fell short of expectations, we were again able to improve margins through our cost reduction programs.  However, we expect tepid demand trends to continue in this segment for the balance of the year.  Across the organization, we continue to drive the steps necessary to build long-term sustainable growth.  Additionally, we are very excited about our recently announced acquisitions and we remain focused on our stated bolt-on acquisition strategy.”  




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, organic sales growth and organic order growth (decline). Adjusted net income, adjusted net income per share and adjusted operating income exclude asbestos coverage litigation expense, restructuring and other related charges, expenses related to the Charter acquisition and fair value adjustments related to the ESAB and Howden inventory and backlog amortization expense to the extent they impact the periods presented. The effective tax rates used to calculate adjusted net income and adjusted net income per share are 21.7% and 26.2% for the three and nine months ended September 27, 2013, respectively, and 25.3% and 29.0% for the third quarter and nine months ended September 28, 2012, respectively. Organic sales growth 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 asbestos insurance coverage issues, expenses and significant year-one fair value adjustment amortization expense related to the Charter acquisition and major restructuring programs.
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, October 24, 2013 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 79579503, 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 2012 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:
Farand Pawlak, Director of Investor Relations
Colfax Corporation
301-323-9054
Farand.Pawlak@colfaxcorp.com




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



 
Three Months Ended
 
Nine Months Ended
 
September 27, 2013
 
September 28, 2012
 
September 27, 2013
 
September 28, 2012
 
 
 
 
 
 
 
 
Net sales
$
1,014,570

 
$
954,440

 
$
3,035,831

 
$
2,886,459

Cost of sales
694,276

 
666,453

 
2,086,990

 
2,041,904

Gross profit
320,294

 
287,987

 
948,841

 
844,555

Selling, general and administrative expense
208,132

 
217,143

 
641,835

 
661,191

Charter acquisition-related expense

 

 

 
43,617

Restructuring and other related charges
8,737

 
15,865

 
17,428

 
43,066

Asbestos coverage litigation expense
627

 
3,313

 
2,801

 
8,840

Operating income
102,798

 
51,666

 
286,777

 
87,841

Interest expense
17,536

 
23,557

 
58,879

 
68,280

Income before income taxes
85,262

 
28,109

 
227,898

 
19,561

Provision for income taxes(1)
19,787

 
13,610

 
62,948

 
86,891

Net income (loss)
65,475

 
14,499

 
164,950

 
(67,330
)
Less: income attributable to noncontrolling interest, net of taxes
10,000

 
5,405

 
23,448

 
16,808

Net income (loss) attributable to Colfax Corporation
55,475

 
9,094

 
141,502

 
(84,138
)
Dividends on preferred stock
5,086

 
5,072

 
15,254

 
13,879

Net income (loss) available to Colfax Corporation common shareholders
$
50,389

 
$
4,022

 
$
126,248

 
$
(98,017
)
Net income (loss) per share- basic
$
0.49

 
$
0.04

 
$
1.25

 
$
(1.09
)
Net income (loss) per share- diluted
$
0.48

 
$
0.04

 
$
1.23

 
$
(1.09
)
__________
(1) Provision for income taxes for the nine months ended September 28, 2012 was significantly impacted by the reassessment of certain deferred tax assets as of the date of the Charter acquisition, which resulted in an increase in the Company's valuation allowance, and the Charter acquisition-related expenses that are either not deductible for tax purposes or were incurred in jurisdictions where no tax benefit can be recognized.




Colfax Corporation
Reconciliation of GAAP to Non-GAAP Financial Measures
Dollars in thousands, except per share data
(Unaudited)
 
Three Months Ended
 
Nine Months Ended
 
September 27, 2013
 
September 28, 2012
 
September 27, 2013
 
September 28, 2012
Adjusted Operating Income
 
 
 
 
 
 
 
Operating income
$
102,798

 
$
51,666

 
$
286,777

 
$
87,841

Restructuring and other related charges
8,737

 
15,865

 
17,428

 
43,066

Charter acquisition-related expense

 

 

 
43,617

Fair value adjustments - ESAB/Howden backlog and inventory amortization expense

 
14,455

 

 
62,582

Asbestos coverage litigation expense
627

 
3,313

 
2,801

 
8,840

Adjusted operating income
$
112,162

 
$
85,299

 
$
307,006

 
$
245,946

Adjusted operating income margin
11.1
%
 
8.9
%
 
10.1
%
 
8.5
%
Adjusted Net Income and Adjusted Net Income Per Share
 
 
 
 
 
 
 
Net income (loss) attributable to Colfax Corporation
$
55,475

 
$
9,094

 
$
141,502

 
$
(84,138
)
Restructuring and other related charges
8,737

 
15,865

 
17,428

 
43,066

Charter acquisition-related expense

 

 

 
43,617

Fair value adjustments - ESAB/Howden backlog and inventory amortization expense

 
14,455

 

 
62,582

Asbestos coverage litigation expense
627

 
3,313

 
2,801

 
8,840

Tax adjustment(1)
(714
)
 
(2,025
)
 
(2,068
)
 
35,320

Adjusted net income
64,125

 
40,702

 
159,663

 
109,287

Adjusted net income margin
6.3
%
 
4.3
%
 
5.3
%
 
3.8
%
Dividends on preferred stock
5,086

 
5,072

 
15,254

 
13,879

Adjusted net income available to Colfax Corporation common shareholders
59,039

 
35,630

 
144,409

 
95,408

Less: adjusted net income attributable to participating securities(2)

 
4,582

 
4,571

 
12,256

 
$
59,039

 
$
31,048

 
$
139,838

 
$
83,152

Weighted-average shares outstanding - diluted
115,384,669

 
94,791,928

 
99,281,670

 
90,829,160

Adjusted net income per share
$
0.56

 
$
0.33

 
$
1.41

 
$
0.92

 
 
 
 
 
 
 
 
Net income (loss) per share— diluted (in accordance with GAAP)
$
0.48

 
$
0.04

 
$
1.23

 
$
(1.09
)
__________
(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 September 28, 2012.
 
(2) Adjusted net income per share for periods prior to April 23, 2013 were calculated consistently with the two-class method in accordance with GAAP as the Series A preferred stock were considered participating securities. Subsequent to April 23, 2013, adjusted net income per share was calculated consistently with the if-converted method in accordance with GAAP as the Series A preferred stock were no longer participating securities. Adjusted net income per share for the nine months ended September 27, 2013 excludes the impact of 12,173,291 common stock equivalent shares as their inclusion would be anti-dilutive.




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


 
Net Sales
 
Orders
 
 
 
$
 
%
 
$
 
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the three months ended September 28, 2012
$
954.4

 
 
 
$
443.8

 
 
 
 
 
 
Components of Change:
 
 
 
 
 
 
 
 
 
 
 
Existing Businesses
29.1

 
3.0
 %
 
72.6

 
16.4
 %
 
 
 
 
Acquisitions(1)
37.6

 
3.9
 %
 
6.7

 
1.5
 %
 
 
 
 
Foreign Currency Translation
(6.5
)
 
(0.6
)%
 
10.2

 
2.3
 %
 
 
 
 
Total
60.2

 
6.3
 %
 
89.5

 
20.2
 %
 
 
 
 
For the three months ended September 27, 2013
$
1,014.6

 
 
 
$
533.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
 
Orders
 
Backlog at Period End
 
$
 
%
 
$
 
%
 
$
 
%
 
 
 
 
 
 
 
 
 
 
 
 
As of and for the nine months ended September 28, 2012
$
2,886.5

 
 
 
$
1,475.7

 
 
 
$
1,382.4

 
 
Components of Change:
 
 
 
 
 
 
 
 
 
 
 
Existing Businesses
2.4

 
0.1
 %
 
(2.5
)
 
(0.2
)%
 
44.7

 
3.2
 %
Acquisitions(1)
180.2

 
6.2
 %
 
46.2

 
3.1
 %
 
21.4

 
1.6
 %
Foreign Currency Translation
(33.3
)
 
(1.1
)%
 
(5.8
)
 
(0.3
)%
 
(1.6
)
 
(0.1
)%
Total
149.3

 
5.2
 %
 
37.9

 
2.6
 %
 
64.5

 
4.7
 %
As of and for the nine months ended September 27, 2013
$
3,035.8

 
 
 
$
1,513.6

 
 
 
$
1,446.9

 
 

 
(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 for ESAB and Howden as the acquisition closed on January 13, 2012.


thirdquarter2013earnings
THIRD QUARTER 2013 | 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 2012 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.


 
Q3 2013 RESULTS


 
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 increase of 6.3% from Q3 2012 net sales of $954.4 million (an organic increase of 3.0%) • Adjusted operating income of $112.2 million compared to $85.3 million in Q3 2012 • Third quarter gas- and fluid-handling orders of $533.3 million compared to orders of $443.8 million in Q3 2012, an increase of 20.2% (an organic increase of 16.4%) • Gas- and fluid-handling backlog of $1.45 billion at period end


 
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 (an organic increase of 0.1%) • Adjusted operating income of $307.0 million compared to $245.9 million in the nine months ended September 28, 2012 • Gas- and fluid-handling orders of $1.51 billion compared to orders of $1.48 billion in the nine months ended September 28, 2012, an increase of 2.6%


 
GAS AND FLUID HANDLING


 
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 220 basis points • Third quarter orders of $533.3 million compared to $443.8 million in Q3 2012, an increase of 20.2% (an organic increase of 16.4%) • Backlog of $1.45 billion at period end


 
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 margin of 12.5% • Orders of $1.51 billion compared to $1.48 billion in the nine months ended September 28, 2012, an increase of 2.6%


 
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 2012 are presented on a proforma basis. Note: Dollars in millions (unaudited). $1.39B QTD YTD Existing Businesses 16.4 % (0.2)% Acquisitions 1.5 % 3.1 % FX Translation 2.3 % (0.3)% Total Growth 20.2 % 2.6 % $1.45B $1.38B


 
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: Dollars in millions (unaudited). QTD YTD Existing Businesses 7.5 % 3.3 % Acquisitions 1.4 % 1.9 % FX Translation 1.1 % (0.4)% Total Growth 10.0 % 4.8 %


 
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 % 15.5 % Mining (70.9)% (70.2)% General Industrial & Other 23.0 % 17.4 % Total 10.0 % 7.5 % Power Generation 36% Oil, Gas & Petro-chemical 21% Marine 11% Mining 8% General Industrial and Other 24% ORDERS: $533.3 Million Total Growth (Decline) Organic Growth (Decline) Power Generation 30.8 % 29.2 % Oil, Gas & Petrochemical 20.3 % 17.3 % Marine (2.0)% (6.1)% Mining 28.6 % 24.5 % General Industrial & Other 15.7 % 8.7 % Total 20.2 % 16.4 %


 
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 % 5.7 % Mining (48.6)% (47.0)% General Industrial & Other 6.2 % 1.2 % Total 4.8% 3.3 % Power Generation 38% Oil, Gas & Petro-chemical 23% Marine 11% Mining 6% General Industrial and Other 22% ORDERS: $1.51 Billion Total Growth (Decline) Organic Growth (Decline) Power Generation 17.2% 14.2 % Oil, Gas & Petrochemical (3.6)% (5.6)% Marine 2.8 % 0.1 % Mining (32.4)% (27.0)% General Industrial & Other 1.0% (5.5)% Total 2.6 % (0.2)%


 
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, as well as record levels of maintenance work in South Africa YTD 2013 SALES SPLIT YTD 2013 ORDERS SPLIT 38% HIGHLIGHTS Q3 2013 vs. Q3 2012 YTD 2013 vs. YTD 2012 Total Organic Total Organic Sales 28.5 % 28.7 % 29.1 % 29.9 % Orders 30.8 % 29.2 % 17.2 % 14.2 %


 
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 • Benefiting from our previous investments in a local presence in the Middle East, where our selling and technical resources are starting to drive gains YTD 2013 SALES SPLIT YTD 2013 ORDERS SPLIT 22% HIGHLIGHTS Q3 2013 vs. Q3 2012 YTD 2013 vs. YTD 2012 Total Organic Total Organic Sales 1.5 % (0.8)% (8.4)% (9.6)% Orders 20.3 % 17.3 % (3.6)% (5.6)%


 
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 comprised of commercial marine and government, or defense, customers Q3 2013 vs. Q3 2012 YTD 2013 vs. YTD 2012 Total Organic Total Organic Sales 22.6 % 15.5 % 8.9 % 5.7 % Orders (2.0)% (6.1)% 2.8 % 0.1 %


 
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 SALES SPLIT YTD 2013 ORDERS SPLIT 5% HIGHLIGHTS Q3 2013 vs. Q3 2012 YTD 2013 vs. YTD 2012 Total Organic Total Organic Sales (70.9)% (70.2)% (48.6)% (47.0)% Orders 28.6 % 24.5 % (32.4)% (27.0)%


 
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 plants, particularly in China – Recent enforcement efforts in China make this a significant near term opportunity YTD 2013 SALES SPLIT YTD 2013 ORDERS SPLIT 23% HIGHLIGHTS Q3 2013 vs. Q3 2012 YTD 2013 vs. YTD 2012 Total Organic Total Organic Sales 23.0 % 17.4 % 6.2 % 1.2 % Orders 15.7 % 8.7 % 1.0 % (5.5)%


 
FABRICATION TECHNOLOGY


 
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 margin improvement of 70 basis points – Improvement over Q3 2012 of 240 basis points


 
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 margin of 10.2% – Improvement over the nine months ended September 28, 2012 of 200 basis points


 
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 (unaudited). QTD YTD Volume 0.3 % (3.2)% Price/ Mix (1.5)% 0.3 % Acquisitions 6.3 % 10.3 % FX Translation (2.3)% (1.9)% Total Growth 2.8 % 5.5 %


 
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. 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$ 948.8$ 844.6$ % of sales 31.6 % 30.2 % 31.3 % 29.3 % SG&A expense 208.1$ 217.1$ 641.8$ 661.2$ % of sales 20.5 % 22.7 % 21.1 % 22.9 % Adjusted operating income 112.2$ 85.3$ 307.0$ 245.9$ % of sales 11.1 % 8.9 % 10.1 % 8.5 % Adjusted net income 64.1$ 40.7$ 159.7$ 109.3$ % of sales 6.3 % 4.3 % 5.3 % 3.8 % Adjusted net income per share 0.56$ 0.33$ 1.41$ 0.92$ Three Months Ended Nine Months Ended


 
APPENDIX


 
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 organic order growth (decline). Adjusted net income, adjusted net income per share, projected adjusted net income per share and adjusted operating income exclude asbestos coverage litigation expense, expenses related to major restructuring programs and expenses and significant year-one fair value adjustment amortization expense related to the Charter acquisition, to the extent they impact the periods presented. 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 September 28, 2012. Projected adjusted net income per share was calculated using an effective tax rate of 27% and 28% for the fourth quarter and year ended December 31, 2013, 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 asbestos insurance coverage issues and expenses, expenses and year-one fair value adjustment amortization expense related to the Charter acquisition and major restructuring programs. 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) (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 September 28, 2012. (2) Adjusted net income per share for periods prior to April 23, 2013 were calculated consistently with the two-class method in accordance with GAAP as the Series A preferred stock were considered participating securities. Subsequent to April 23, 2013, adjusted net income per share was calculated consistently with the if- converted method in accordance with GAAP as the Series A preferred stock were no longer participating securities. Adjusted net income per share for the nine months ended September 27, 2013 excludes the impact of 12,173,291 common stock equivalent shares as their inclusion would be anti-dilutive. _____________________ Note: Dollars in thousands, except per share amounts. September 27, 2013 September 28, 2012 September 27, 2013 September 28, 2012 Adjusted Net Income and Adjusted Net Income Per Share Net income (loss) attributable to Colfax Corporation 55,475 9,094$ 141,502$ (84,138)$ Restructuring and other related charges 8,737 15,865 17,428 43,066 Charter acquisition-related expense — — — 43,617 Fair value adjustments - ESAB/Howden backlog and inventory amortization expense — 14,455 — 62,582 Asbestos coverage litigation expense 627 3,313 2,801 8,840 Tax adjustment(1) (714) (2,025) (2,068) 35,320 Adjusted net income 64,125 40,702 159,663 109,287 Adjusted net income margin 6.3 % 4.3 % 5.3 % 3.8 % Dividends on preferred stock 5,086 5,072 15,254 13,879 Adjusted net income available to Colfax Corporation common shareholders 59,039 35,630 144,409 95,408 Less: adjusted net income attributable to participating securities (2) — 4,582 4,571 12,256 59,039$ 31,048$ 139,838$ 83,152$ Weighted-average shares outstanding - diluted 115,384,669 94,791,928 99,281,670 90,829,160 Adjusted net income per share 0.56$ 0.33$ 1.41$ 0.92$ Net income (loss) per share— diluted (in accordance with GAAP) 0.48$ 0.04$ 1.23$ (1.09)$ Three Months Ended Nine Months Ended


 
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 expense — — — — — — — — Restructuring and other related charges 3,278 5,459 — 8,737 1,564 12,498 1,803 15,865 Asbestos coverage litigation expense 627 — — 627 3,313 — — 3,313 Fair value adjustments - ESAB/Howden backlog and inventory amortization expense — — — — 14,455 — — 14,455 Adjusted operating income (loss) 68,040$ 13.3 % 57,583$ 11.4 % (13,461)$ 112,162$ 11.1 % 51,693$ 11.1 % 43,855$ 9.0 % (10,249)$ 85,299$ 8.9 % 954,440$ Q3 2013 - QTD Q3 2012 - QTD Gas and Fluid Handling Fabrication Technology Total Colfax Corporation Gas and Fluid Handling Fabrication Technology Total Colfax Corporation 511,360$ 503,210$ 1,014,570$ 464,873$ 489,567$ Corporate and Other Corporate and Other et sales $ —$ Operating income (loss) 174,597 12.0 % 148,794 9.4 % (36,614) 286,7 7 9.4 % 93,467 6.7 % 74,642 5.0 % (80,268) 87,841 3.0 % Charter acquisition-related expense — — — 43,617 43,617 Restructuring and other related charges 4,744 12,684 — 17,428 5,379 31,620 6,067 43,066 Asbestos coverage litigation expense 2,801 — — 2,801 8,840 — — 8,840 Fair value adjustments - ESAB/Howden backlog and inventory amortization expense — — — — 45,597 16,985 — 62,582 Adjusted operating income (loss) 182,142$ 12.5 % 161,478$ 10.2 % (36,614)$ 307,006$ 10.1 % 153,283$ 11.1 % 123,247$ 8.2 % (30,584)$ 245,946$ 8.5 % 2,886,459$ Q3 2013 - YTD Q3 2012 - YTD Gas and Fluid Handling Fabrication Technology Total Colfax Corporation Gas and Fluid Handling Fabrication Technology Total Colfax Corporation 1,453,228$ 1,582,603$ 3,035,831$ 1,386,699$ 1,499,760$


 
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 for ESAB and Howden as the acquisition closed on January 13, 2012. $ % $ % For the three months ended September 28, 2012 954.4$ 443.8$ Components of Change: Existing Businesses 29.1 3.0 % 72.6 16.4 % Acquisitions (1) 37.6 3.9 % 6.7 1.5 % Foreign Currency Translation (6.5) (0.6)% 10.2 2.3 % Total 60.2 6.3 % 89.5 20.2 % For the three months ended September 27, 2013 1,014.6$ 533.3$ $ % $ % $ % As of and for the nine months ended September 28, 2012 2,886.5$ 1,475.7$ 1,382.4$ Components of Change: Existing Businesses 2.4 0.1 % (2.5) (0.2)% 44.7 3.2 % Acquisitions (1) 180.2 6.2 % 46.2 3.1 % 21.4 1.6 % Foreign Currency Translation (33.3) (1.1)% (5.8) (0.3)% (1.6) (0.1)% Total 149.3 5.2 % 37.9 2.6 % 64.5 4.7 % As of and for the nine months ended September 27, 2013 3,035.8$ 1,513.6$ 1,446.9$ Backlog at Period End Net Sales Orders Net Sales Orders


 
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 share data Revenue- Base Business 1,045,000$ 1,075,000$ Acquired Entities (1) 40,000 40,000 Revenue 1,085,000$ 1,115,000$ 4,120,000$ 4,150,000$ Adjusted Operating Profit 115,000 122,000 422,000 429,000 Interest (17,000) (17,000) (76,000) (76,000) Taxes (27,000) (29,000) (92,000) (94,000) Noncontrolling interest (7,000) (7,000) (31,000) (31,000) Adjusted Net Income- Colfax 64,000 69,000 223,000 228,000 Adjusted EPS 0.56$ 0.60$ 1.98$ 2.03$ Q4 2013


 
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) - - Projected adjusted net income per share - diluted 0.56$ 0.60$ 1.98$ 2.03$ 2013 EPS Range