Lincoln Electric Holdings, Inc. (the “Company”) (Nasdaq: LECO)
today reported second quarter 2023 net income of $137.3 million, or
diluted earnings per share (EPS) of $2.36, which includes special
item after-tax net charges of $4.9 million, or $0.08 EPS. This
compares with prior year period net income of $127.8 million, or
$2.18 EPS, which included special item after-tax net charges of
$0.4 million. Excluding special items, second quarter 2023 adjusted
net income was $142.2 million, or $2.44 adjusted EPS. This compares
with adjusted net income of $128.2 million, or $2.18 adjusted EPS,
in the prior year period.
Second quarter 2023 sales increased 9.4% to
$1,060.6 million reflecting a 4.5% increase in organic sales and a
5.2% benefit from acquisitions, partially offset by 0.2%
unfavorable foreign exchange. Operating income for the second
quarter 2023 was $178.0 million, or 16.8% of sales. This compares
with operating income of $167.5 million, or 17.3% of sales, in the
prior year period. Excluding special items, adjusted operating
income was $184.2 million, or 17.4% of sales, as compared with
$168.1 million, or 17.3% of sales, in the prior year period.
“Our record second quarter performance, including
adjusted operating income margin and earnings, demonstrates
continued strong momentum in the business and excellent execution
of our Higher Standard 2025 Strategy,” commented Christopher L.
Mapes, Chairman, President and Chief Executive Officer. “Our strong
profit performance across all segments reflects how we are winning
in the market with an industry-leading portfolio of differentiated
solutions and application experts, disciplined cost management and
improved operational efficiency from our Lincoln Business System
initiatives.” Mapes continued, “As announced earlier today, I am
confident that our year-end leadership transition with Steve
Hedlund serving as President and CEO, will continue the Company’s
momentum and success in the years ahead.”
Six Months 2023 Summary
Net income for the six months ended June 30, 2023
was $259.3 million, or $4.44 EPS, which includes special item
after-tax net charges of $7.2 million, or $0.13 EPS. This compares
with prior period net income of $253.9 million, or $4.30 EPS, which
included special item after-tax net gains of $1.0 million, or $0.01
EPS. Excluding these items, adjusted net income for the six months
ended June 30, 2023 increased 5.4% to $266.5 million, or $4.57 EPS,
compared with $252.9 million, or $4.29 EPS, in the comparable 2022
period.
Sales increased 10.8% to $2,099.9 million in the
six months ended June 30, 2023 reflecting a 6.5% increase in
organic sales and a 5.4% benefit from acquisitions, partially
offset by 1.0% unfavorable foreign exchange. Operating income for
the six months ended June 30, 2023 was $342.4 million, or 16.3% of
sales. This compares with operating income of $328.7 million, or
17.3% of sales, in the comparable 2022 period. Excluding special
items, adjusted operating income was $353.3 million, or 16.8% of
sales, as compared with $331.2 million, or 17.5% of sales, in the
comparable 2022 period.
Webcast Information
A conference call to discuss second quarter 2023 financial
results will be webcast live today, July 27, 2023, at
10:00 a.m., Eastern Time. Those interested in
participating via webcast in listen-only mode can access the event
here or on the Company's Investor Relations home page at
https://ir.lincolnelectric.com. For participants who would
like to participate via telephone, please register here to receive
the dial-in number along with a unique PIN number that is required
to access the call. A replay of the earnings call will be available
via webcast on the Company's website.
About Lincoln Electric
Lincoln Electric is the world leader in the
engineering, design, and manufacturing of advanced arc welding
solutions, automated joining, assembly and cutting systems, plasma
and oxy-fuel cutting equipment, and has a leading global position
in brazing and soldering alloys. Lincoln is recognized as the
Welding Expert™ for its leading materials science, software
development, automation engineering, and application expertise,
which advance customers’ fabrication capabilities to help them
build a better world. Headquartered in Cleveland, Ohio, Lincoln has
71 manufacturing locations in 20 countries and a worldwide network
of distributors and sales offices serving customers in over 160
countries. For more information about Lincoln Electric and its
products and services, visit the Company’s website
at https://www.lincolnelectric.com.
Non-GAAP Information
Adjusted operating income, adjusted net income,
adjusted EBIT, adjusted effective tax rate, adjusted diluted
earnings per share (“adjusted EPS”), Organic sales, Cash
conversion, adjusted net operating profit after taxes and adjusted
return on invested capital (“adjusted ROIC”) are non-GAAP financial
measures. Management uses non-GAAP measures to assess the Company's
operating performance by excluding certain disclosed special items
that management believes are not representative of the Company's
core business. Management believes that excluding these special
items enables them to make better period-over-period comparisons
and benchmark the Company's operational performance against other
companies in its industry more meaningfully. Furthermore,
management believes that non-GAAP financial measures provide
investors with meaningful information that provides a more complete
understanding of Company operating results and enables investors to
analyze financial and business trends more thoroughly. Non-GAAP
financial measures should not be viewed in isolation, are not a
substitute for GAAP measures and have limitations including, but
not limited to, their usefulness as comparative measures as other
companies may define their non-GAAP measures differently.
Forward-Looking Statements
The Company’s expectations and beliefs concerning
the future contained in this news release are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements reflect management’s current
expectations and involve a number of risks and uncertainties.
Forward-looking statements generally can be identified by the use
of words such as “may,” “will,” “expect,” “intend,” “estimate,”
“anticipate,” “believe,” “forecast,” “guidance” or words of similar
meaning. Actual results may differ materially from such statements
due to a variety of factors that could adversely affect the
Company’s operating results. The factors include, but are not
limited to: general economic, financial and market conditions; the
effectiveness of commercial and operating initiatives; completion
of planned divestitures; interest rates;
disruptions, uncertainty or volatility in the credit markets
that may limit our access to capital; currency exchange rates and
devaluations; adverse outcome of pending or potential litigation;
actual costs of the Company’s rationalization plans; possible
acquisitions, including the Company’s ability to successfully
integrate acquisitions; market risks and price fluctuations related
to the purchase of commodities and energy; global regulatory
complexity; the effects of changes in tax law; tariff rates in the
countries where the Company conducts business; and the possible
effects of events beyond our control, such as the impact of the
Russia-Ukraine conflict, political unrest, acts of terror, natural
disasters and pandemics on the Company or its customers, suppliers
and the economy in general. For additional discussion, see “Item
1A. Risk Factors” in the Company’s Annual Report on Form 10-K
for the year ended December 31, 2022.
Lincoln
Electric Holdings, Inc. Financial
Highlights (In thousands, except per share
amounts) (Unaudited) |
|
Consolidated
Statements of
Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fav (Unfav) to |
|
|
|
Three Months Ended June 30, |
|
Prior Year |
|
|
|
2023 |
|
% of Sales |
|
2022 |
|
|
% of Sales |
|
$ |
|
% |
|
Net sales |
|
$ |
1,060,565 |
|
|
100.0 |
% |
$ |
969,589 |
|
|
100.0 |
|
% |
$ |
90,976 |
|
|
9.4 |
|
% |
Cost of
goods sold |
|
|
687,137 |
|
|
64.8 |
% |
|
636,108 |
|
|
65.6 |
|
% |
|
(51,029 |
) |
|
(8.0 |
) |
% |
Gross
profit |
|
|
373,428 |
|
|
35.2 |
% |
|
333,481 |
|
|
34.4 |
|
% |
|
39,947 |
|
|
12.0 |
|
% |
Selling,
general & administrative expenses |
|
|
192,748 |
|
|
18.2 |
% |
|
166,792 |
|
|
17.2 |
|
% |
|
(25,956 |
) |
|
(15.6 |
) |
% |
Rationalization and asset impairment charges |
|
|
2,667 |
|
|
0.3 |
% |
|
(844 |
) |
|
(0.1 |
) |
% |
|
(3,511 |
) |
|
(416.0 |
) |
% |
Operating
income |
|
|
178,013 |
|
|
16.8 |
% |
|
167,533 |
|
|
17.3 |
|
% |
|
10,480 |
|
|
6.3 |
|
% |
Interest
expense, net |
|
|
11,699 |
|
|
1.1 |
% |
|
6,459 |
|
|
0.7 |
|
% |
|
(5,240 |
) |
|
(81.1 |
) |
% |
Other income
(expense) |
|
|
6,746 |
|
|
0.6 |
% |
|
(1,133 |
) |
|
(0.1 |
) |
% |
|
7,879 |
|
|
695.4 |
|
% |
Income
before income taxes |
|
|
173,060 |
|
|
16.3 |
% |
|
159,941 |
|
|
16.5 |
|
% |
|
13,119 |
|
|
8.2 |
|
% |
Income
taxes |
|
|
35,729 |
|
|
3.4 |
% |
|
32,118 |
|
|
3.3 |
|
% |
|
(3,611 |
) |
|
(11.2 |
) |
% |
Effective
tax rate |
|
|
20.6 |
% |
|
|
|
|
20.1 |
|
% |
|
|
|
(0.5 |
) |
% |
|
|
Net
income |
|
$ |
137,331 |
|
|
12.9 |
% |
$ |
127,823 |
|
|
13.2 |
|
% |
$ |
9,508 |
|
|
7.4 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share |
|
$ |
2.39 |
|
|
|
|
$ |
2.20 |
|
|
|
|
$ |
0.19 |
|
|
8.6 |
|
% |
Diluted
earnings per share |
|
$ |
2.36 |
|
|
|
|
$ |
2.18 |
|
|
|
|
$ |
0.18 |
|
|
8.3 |
|
% |
Weighted
average shares (basic) |
|
|
57,479 |
|
|
|
|
|
58,016 |
|
|
|
|
|
|
|
|
|
Weighted
average shares (diluted) |
|
|
58,303 |
|
|
|
|
|
58,688 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fav (Unfav) to |
|
|
|
Six Months Ended June 30, |
|
Prior Year |
|
|
|
2023 |
|
% of Sales |
|
2022 |
|
% of Sales |
|
$ |
|
% |
|
Net sales |
|
$ |
2,099,908 |
|
|
100.0 |
% |
$ |
1,895,037 |
|
100.0 |
% |
$ |
204,871 |
|
|
10.8 |
|
% |
Cost of
goods sold |
|
|
1,371,123 |
|
|
65.3 |
% |
|
1,231,779 |
|
65.0 |
% |
|
(139,344 |
) |
|
(11.3 |
) |
% |
Gross
profit |
|
|
728,785 |
|
|
34.7 |
% |
|
663,258 |
|
35.0 |
% |
|
65,527 |
|
|
9.9 |
|
% |
Selling,
general & administrative expenses |
|
|
382,864 |
|
|
18.2 |
% |
|
333,478 |
|
17.6 |
% |
|
(49,386 |
) |
|
(14.8 |
) |
% |
Rationalization and asset impairment charges |
|
|
3,544 |
|
|
0.2 |
% |
|
1,041 |
|
0.1 |
% |
|
(2,503 |
) |
|
(240.4 |
) |
% |
Operating
income |
|
|
342,377 |
|
|
16.3 |
% |
|
328,739 |
|
17.3 |
% |
|
13,638 |
|
|
4.1 |
|
% |
Interest
expense, net |
|
|
24,899 |
|
|
1.2 |
% |
|
12,657 |
|
0.7 |
% |
|
(12,242 |
) |
|
(96.7 |
) |
% |
Other
income |
|
|
10,926 |
|
|
0.5 |
% |
|
3,500 |
|
0.2 |
% |
|
7,426 |
|
|
212.2 |
|
% |
Income
before income taxes |
|
|
328,404 |
|
|
15.6 |
% |
|
319,582 |
|
16.9 |
% |
|
8,822 |
|
|
2.8 |
|
% |
Income
taxes |
|
|
69,142 |
|
|
3.3 |
% |
|
65,729 |
|
3.5 |
% |
|
(3,413 |
) |
|
(5.2 |
) |
% |
Effective
tax rate |
|
|
21.1 |
% |
|
|
|
|
20.6 |
% |
|
|
|
(0.5 |
) |
% |
|
|
Net
income |
|
$ |
259,262 |
|
|
12.3 |
% |
$ |
253,853 |
|
13.4 |
% |
$ |
5,409 |
|
|
2.1 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share |
|
$ |
4.51 |
|
|
|
|
$ |
4.35 |
|
|
|
$ |
0.16 |
|
|
3.7 |
|
% |
Diluted
earnings per share |
|
$ |
4.44 |
|
|
|
|
$ |
4.30 |
|
|
|
$ |
0.14 |
|
|
3.3 |
|
% |
Weighted
average shares (basic) |
|
|
57,537 |
|
|
|
|
|
58,311 |
|
|
|
|
|
|
|
|
Weighted
average shares (diluted) |
|
|
58,353 |
|
|
|
|
|
58,970 |
|
|
|
|
|
|
|
|
Lincoln
Electric Holdings, Inc. Financial
Highlights (In thousands)
(Unaudited) |
|
Balance Sheet Highlights |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Consolidated Balance Sheet Data |
|
June 30, 2023 |
|
December 31, 2022 |
|
Cash and
cash equivalents |
|
$ |
220,483 |
|
$ |
197,150 |
|
Accounts
receivable, net |
|
|
570,294 |
|
|
541,529 |
|
Inventories |
|
|
674,754 |
|
|
665,451 |
|
Total
current assets |
|
|
1,646,178 |
|
|
1,557,790 |
|
Property,
plant and equipment, net |
|
|
563,180 |
|
|
544,871 |
|
Total
assets |
|
|
3,311,188 |
|
|
3,180,546 |
|
Trade
accounts payable |
|
|
358,160 |
|
|
352,079 |
|
Total
current liabilities |
|
|
810,762 |
|
|
852,897 |
|
Short-term
debt (1) |
|
|
10,406 |
|
|
93,483 |
|
Long-term
debt, less current portion |
|
|
1,103,898 |
|
|
1,110,396 |
|
Total
equity |
|
|
1,201,424 |
|
|
1,034,041 |
|
|
|
|
|
|
|
|
|
Operating Working Capital |
|
June 30, 2023 |
|
December 31, 2022 |
|
Average
operating working capital to Net sales (2) |
|
|
18.9 |
% |
|
20.9 |
% |
|
|
|
|
|
|
|
|
Invested Capital |
|
June 30, 2023 |
|
December 31, 2022 |
|
Short-term
debt (1) |
|
$ |
10,406 |
|
$ |
93,483 |
|
Long-term
debt, less current portion |
|
|
1,103,898 |
|
|
1,110,396 |
|
Total
debt |
|
|
1,114,304 |
|
|
1,203,879 |
|
Total
equity |
|
|
1,201,424 |
|
|
1,034,041 |
|
Invested
capital |
|
$ |
2,315,728 |
|
$ |
2,237,920 |
|
|
|
|
|
|
|
|
|
Total debt /
invested capital |
|
|
48.1 |
% |
|
53.8 |
% |
- Includes current portion of long-term debt.
- Average operating working capital to Net sales is defined as
the sum of Accounts receivable, Inventories and contract assets
less Trade accounts payable and contract liabilities as of period
end divided by annualized rolling three months of Net sales.
Lincoln
Electric Holdings, Inc. Financial
Highlights (In thousands, except per share
amounts) (Unaudited) |
|
Non-GAAP Financial Measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
|
Operating income as reported |
|
$ |
178,013 |
|
|
$ |
167,533 |
|
|
|
$ |
342,377 |
|
|
$ |
328,739 |
|
|
Special items (pre-tax): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization and asset impairment charges (2) |
|
|
2,667 |
|
|
|
(844 |
) |
|
|
|
3,544 |
|
|
|
1,041 |
|
|
Amortization of step up in value of acquired inventories (3) |
|
|
3,545 |
|
|
|
1,459 |
|
|
|
|
7,401 |
|
|
|
1,459 |
|
|
Adjusted
operating income (1) |
|
$ |
184,225 |
|
|
$ |
168,148 |
|
|
|
$ |
353,322 |
|
|
$ |
331,239 |
|
|
As a percent of total sales |
|
|
17.4 |
|
% |
|
17.3 |
|
% |
|
|
16.8 |
|
% |
|
17.5 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
as reported |
|
$ |
137,331 |
|
|
$ |
127,823 |
|
|
|
$ |
259,262 |
|
|
$ |
253,853 |
|
|
Special items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization and asset impairment charges (2) |
|
|
2,667 |
|
|
|
(844 |
) |
|
|
|
3,544 |
|
|
|
1,041 |
|
|
Pension settlement net gains (4) |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
(4,273 |
) |
|
Amortization of step up in value of acquired inventories (3) |
|
|
3,545 |
|
|
|
1,459 |
|
|
|
|
7,401 |
|
|
|
1,459 |
|
|
Gain on asset disposal (5) |
|
|
— |
|
|
|
— |
|
|
|
|
(1,646 |
) |
|
|
— |
|
|
Tax effect of Special items (6) |
|
|
(1,311 |
) |
|
|
(252 |
) |
|
|
|
(2,129 |
) |
|
|
789 |
|
|
Adjusted net
income (1) |
|
|
142,232 |
|
|
|
128,186 |
|
|
|
|
266,432 |
|
|
|
252,869 |
|
|
Interest expense, net |
|
|
11,699 |
|
|
|
6,459 |
|
|
|
|
24,899 |
|
|
|
12,657 |
|
|
Income taxes as reported |
|
|
35,729 |
|
|
|
32,118 |
|
|
|
|
69,142 |
|
|
|
65,729 |
|
|
Tax effect of Special items (6) |
|
|
1,311 |
|
|
|
252 |
|
|
|
|
2,129 |
|
|
|
(789 |
) |
|
Adjusted
EBIT (1) |
|
$ |
190,971 |
|
|
$ |
167,015 |
|
|
|
$ |
362,602 |
|
|
$ |
330,466 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective
tax rate as reported |
|
|
20.6 |
|
% |
|
20.1 |
|
% |
|
|
21.1 |
|
% |
|
20.6 |
|
% |
Net special
item tax impact |
|
|
0.1 |
|
% |
|
0.1 |
|
% |
|
|
0.0 |
|
% |
|
(0.2 |
) |
% |
Adjusted
effective tax rate (1) |
|
|
20.7 |
|
% |
|
20.2 |
|
% |
|
|
21.1 |
|
% |
|
20.4 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share as reported |
|
$ |
2.36 |
|
|
$ |
2.18 |
|
|
|
$ |
4.44 |
|
|
$ |
4.30 |
|
|
Special
items per share |
|
|
0.08 |
|
|
|
— |
|
|
|
|
0.13 |
|
|
|
(0.01 |
) |
|
Adjusted
diluted earnings per share (1) |
|
$ |
2.44 |
|
|
$ |
2.18 |
|
|
|
$ |
4.57 |
|
|
$ |
4.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares (diluted) |
|
|
58,303 |
|
|
|
58,688 |
|
|
|
|
58,353 |
|
|
|
58,970 |
|
|
(1) Adjusted operating income, adjusted net
income, adjusted EBIT, adjusted effective tax rate and adjusted
diluted EPS are non-GAAP financial measures. Refer to Non-GAAP
Information section.(2) 2023 charges are primarily related to
restructuring activities and impairments within International
Welding. 2022 charges are primarily related to severance, gains or
losses on the disposal of assets.(3) Related to acquisitions and
are included in Cost of goods sold.(4) Pension net gains primarily
due to the final settlement associated with the termination of a
pension plan and are included in Other income (expense).(5) Gain on
asset disposal and included in Other income (expense).(6) Includes
the net tax impact of Special items recorded during the respective
periods. The tax effect of Special items impacting pre-tax income
was calculated as the pre-tax amount multiplied by the applicable
tax rate. The applicable tax rates reflect the taxable jurisdiction
and nature of each Special item.
Lincoln
Electric Holdings, Inc. Financial
Highlights (In thousands, except per share
amounts) (Unaudited) |
|
Non-GAAP Financial Measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended June 30, |
|
Return on Invested Capital |
|
2023 |
|
|
2022 |
|
|
Net income as reported |
|
$ |
477,633 |
|
|
$ |
360,037 |
|
|
Plus: Interest expense (after-tax) |
|
|
33,234 |
|
|
|
18,832 |
|
|
Less: Interest income (after-tax) |
|
|
1,999 |
|
|
|
986 |
|
|
Net operating profit after taxes |
|
$ |
508,868 |
|
|
$ |
377,883 |
|
|
Special
Items: |
|
|
|
|
|
|
|
Rationalization and asset impairment charges |
|
|
14,291 |
|
|
|
6,075 |
|
|
Acquisition transaction costs (2) |
|
|
6,003 |
|
|
|
— |
|
|
Pension settlement charges (3) |
|
|
— |
|
|
|
115,693 |
|
|
Amortization of step up in value of acquired inventories |
|
|
7,048 |
|
|
|
5,422 |
|
|
Gain on asset disposal |
|
|
(1,646 |
) |
|
|
— |
|
|
Tax effect of Special items (4) |
|
|
(4,110 |
) |
|
|
(44,405 |
) |
|
Adjusted net
operating profit after taxes (1) |
|
$ |
530,454 |
|
|
$ |
460,668 |
|
|
|
|
|
|
|
|
|
|
Invested Capital |
|
June 30, 2023 |
|
June 30, 2022 |
|
Short-term debt |
|
$ |
10,406 |
|
|
$ |
125,458 |
|
|
Long-term debt, less current portion |
|
|
1,103,898 |
|
|
|
712,908 |
|
|
Total debt |
|
|
1,114,304 |
|
|
|
838,366 |
|
|
Total equity |
|
|
1,201,424 |
|
|
|
912,983 |
|
|
Invested
capital |
|
$ |
2,315,728 |
|
|
$ |
1,751,349 |
|
|
|
|
|
|
|
|
|
|
Return on
invested capital as reported |
|
|
22.0 |
|
% |
|
21.6 |
|
% |
Adjusted
return on invested capital (1) |
|
|
22.9 |
|
% |
|
26.3 |
|
% |
(1) Adjusted net operating profit after taxes and
adjusted ROIC are non-GAAP financial measures. Refer to Non-GAAP
Information section.(2) Related to acquisitions and are included in
Selling, general & administrative expenses.(3) Related to lump
sum pension payments due to the final settlement associated with
the termination of a pension plan.(4) Includes the net tax impact
of Special items recorded during the respective periods. The tax
effect of Special items impacting pre-tax income was calculated as
the pre-tax amount multiplied by the applicable tax rate. The
applicable tax rates reflect the taxable jurisdiction and nature of
each Special item.
Lincoln
Electric Holdings, Inc. Financial
Highlights (In thousands, except per share
amounts) (Unaudited) |
|
|
|
|
|
|
Condensed Consolidated Statements of Cash
Flows |
|
|
|
|
|
|
Three Months Ended June 30, |
|
2023 |
|
|
2022 |
|
OPERATING
ACTIVITIES: |
|
|
|
|
|
Net income |
$ |
137,331 |
|
|
$ |
127,823 |
|
Adjustments to reconcile Net income to Net cash provided by
operating activities: |
|
|
|
|
|
Rationalization and asset impairment net charges |
|
1,134 |
|
|
|
(1,301 |
) |
Depreciation and amortization |
|
21,917 |
|
|
|
19,868 |
|
Equity earnings in affiliates, net |
|
(106 |
) |
|
|
(67 |
) |
Other non-cash items, net |
|
22,180 |
|
|
|
11,043 |
|
Changes in operating assets and liabilities, net of effects from
acquisitions: |
|
|
|
|
|
Decrease (Increase) in accounts receivable |
|
8,774 |
|
|
|
(17,839 |
) |
Decrease (Increase) in inventories |
|
76 |
|
|
|
(57,187 |
) |
(Decrease) Increase in trade accounts payable |
|
(5,275 |
) |
|
|
4,968 |
|
Net change in other current assets and liabilities |
|
21,574 |
|
|
|
14,210 |
|
Net change in other long-term assets and liabilities |
|
(8,760 |
) |
|
|
(3,306 |
) |
NET CASH
PROVIDED BY OPERATING ACTIVITIES |
|
198,845 |
|
|
|
98,211 |
|
|
|
|
|
|
|
INVESTING
ACTIVITIES: |
|
|
|
|
|
Capital expenditures |
|
(21,765 |
) |
|
|
(15,930 |
) |
Acquisition of businesses, net of cash acquired |
|
(32,657 |
) |
|
|
(82 |
) |
Proceeds from sale of property, plant and equipment |
|
578 |
|
|
|
1,123 |
|
Purchase of marketable securities |
|
(6,453 |
) |
|
|
— |
|
NET CASH
USED BY INVESTING ACTIVITIES |
|
(60,297 |
) |
|
|
(14,889 |
) |
|
|
|
|
|
|
FINANCING
ACTIVITIES: |
|
|
|
|
|
(Payments on) short-term borrowings |
|
(28,277 |
) |
|
|
(33,448 |
) |
(Payments on) proceeds from long-term borrowings |
|
(6,875 |
) |
|
|
8,969 |
|
Proceeds from exercise of stock options |
|
9,534 |
|
|
|
382 |
|
Purchase of shares for treasury |
|
(53,075 |
) |
|
|
(25,119 |
) |
Cash dividends paid to shareholders |
|
(36,889 |
) |
|
|
(32,553 |
) |
NET CASH
USED BY FINANCING ACTIVITIES |
|
(115,582 |
) |
|
|
(81,769 |
) |
|
|
|
|
|
|
Effect of
exchange rate changes on Cash and cash equivalents |
|
(1,286 |
) |
|
|
(3,130 |
) |
INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS |
|
21,680 |
|
|
|
(1,577 |
) |
Cash and
cash equivalents at beginning of period |
|
198,803 |
|
|
|
154,373 |
|
Cash and
cash equivalents at end of period |
$ |
220,483 |
|
|
$ |
152,796 |
|
|
|
|
|
|
|
Cash
dividends paid per share |
$ |
0.64 |
|
|
$ |
0.56 |
|
Lincoln
Electric Holdings, Inc. Financial
Highlights (In thousands, except per share
amounts) (Unaudited) |
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash
Flows |
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
2023 |
|
|
2022 |
|
OPERATING
ACTIVITIES: |
|
|
|
|
|
|
Net income |
|
$ |
259,262 |
|
|
$ |
253,853 |
|
Adjustments to reconcile Net income to Net cash provided by
operating activities: |
|
|
|
|
|
|
Rationalization and asset impairment net charges |
|
|
1,134 |
|
|
|
(113 |
) |
Depreciation and amortization |
|
|
43,212 |
|
|
|
39,759 |
|
Equity earnings in affiliates, net |
|
|
(294 |
) |
|
|
(180 |
) |
Other non-cash items, net |
|
|
21,680 |
|
|
|
3,822 |
|
Changes in operating assets and liabilities, net of effects from
acquisitions: |
|
|
|
|
|
|
Increase in accounts receivable |
|
|
(18,890 |
) |
|
|
(103,959 |
) |
Decrease (Increase) in inventories |
|
|
6,267 |
|
|
|
(112,594 |
) |
Increase in trade accounts payable |
|
|
1,566 |
|
|
|
44,252 |
|
Net change in other current assets and liabilities |
|
|
15,474 |
|
|
|
21,174 |
|
Net change in other long-term assets and liabilities |
|
|
(6,635 |
) |
|
|
(4,713 |
) |
NET CASH
PROVIDED BY OPERATING ACTIVITIES |
|
|
322,776 |
|
|
|
141,301 |
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES: |
|
|
|
|
|
|
Capital expenditures |
|
|
(40,552 |
) |
|
|
(34,602 |
) |
Acquisition of businesses, net of cash acquired |
|
|
(32,657 |
) |
|
|
(22,095 |
) |
Proceeds from sale of property, plant and equipment |
|
|
3,892 |
|
|
|
1,692 |
|
Purchase of marketable securities |
|
|
(7,029 |
) |
|
|
— |
|
NET CASH
USED BY INVESTING ACTIVITIES |
|
|
(76,346 |
) |
|
|
(55,005 |
) |
|
|
|
|
|
|
|
FINANCING
ACTIVITIES: |
|
|
|
|
|
|
(Payments on) proceeds from short-term borrowings |
|
|
(72,224 |
) |
|
|
64,960 |
|
(Payments on) proceeds from long-term borrowings |
|
|
(6,978 |
) |
|
|
6,869 |
|
Proceeds from exercise of stock options |
|
|
12,010 |
|
|
|
1,417 |
|
Purchase of shares for treasury |
|
|
(85,234 |
) |
|
|
(129,698 |
) |
Cash dividends paid to shareholders |
|
|
(74,472 |
) |
|
|
(65,914 |
) |
NET CASH
USED BY FINANCING ACTIVITIES |
|
|
(226,898 |
) |
|
|
(122,366 |
) |
|
|
|
|
|
|
|
Effect of
exchange rate changes on Cash and cash equivalents |
|
|
3,801 |
|
|
|
(4,092 |
) |
INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS |
|
|
23,333 |
|
|
|
(40,162 |
) |
Cash and
cash equivalents at beginning of period |
|
|
197,150 |
|
|
|
192,958 |
|
Cash and
cash equivalents at end of period |
|
$ |
220,483 |
|
|
$ |
152,796 |
|
|
|
|
|
|
|
|
Cash
dividends paid per share |
|
$ |
1.28 |
|
|
$ |
1.12 |
|
Lincoln
Electric Holdings, Inc. Segment
Highlights (1) (In
thousands) (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
International |
|
The Harris |
|
Corporate / |
|
|
|
|
|
|
Welding |
|
Welding |
|
Products Group |
|
Eliminations |
|
Consolidated |
|
Three months ended June 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
676,966 |
|
$ |
253,403 |
|
$ |
130,196 |
|
$ |
— |
|
|
$ |
1,060,565 |
|
Inter-segment sales |
|
|
30,850 |
|
|
8,292 |
|
|
2,867 |
|
|
(42,009 |
) |
|
|
— |
|
Total sales |
|
$ |
707,816 |
|
$ |
261,695 |
|
$ |
133,063 |
|
$ |
(42,009 |
) |
|
$ |
1,060,565 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
137,331 |
|
As a percent of total sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
(1) |
|
$ |
136,913 |
|
$ |
30,519 |
|
$ |
19,510 |
|
$ |
(2,183 |
) |
|
$ |
184,759 |
|
As a percent of total sales |
|
|
19.3 |
% |
|
11.7 |
% |
|
14.7 |
% |
|
|
|
|
17.4 |
% |
Special
items charges (3) |
|
|
2,957 |
|
|
3,255 |
|
|
— |
|
|
— |
|
|
|
6,212 |
|
Adjusted
EBIT (2) |
|
$ |
139,870 |
|
$ |
33,774 |
|
$ |
19,510 |
|
$ |
(2,183 |
) |
|
$ |
190,971 |
|
As a percent of total sales |
|
|
19.8 |
% |
|
12.9 |
% |
|
14.7 |
% |
|
|
|
|
18.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
595,659 |
|
$ |
236,629 |
|
$ |
137,301 |
|
$ |
— |
|
|
$ |
969,589 |
|
Inter-segment sales |
|
|
29,031 |
|
|
9,527 |
|
|
2,866 |
|
|
(41,424 |
) |
|
|
— |
|
Total sales |
|
$ |
624,690 |
|
$ |
246,156 |
|
$ |
140,167 |
|
$ |
(41,424 |
) |
|
$ |
969,589 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
127,823 |
|
As a percent of total sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
(1) |
|
$ |
117,606 |
|
$ |
34,855 |
|
$ |
17,922 |
|
$ |
(3,983 |
) |
|
$ |
166,400 |
|
As a percent of total sales |
|
|
18.8 |
% |
|
14.2 |
% |
|
12.8 |
% |
|
|
|
|
17.2 |
% |
Special
items charges (4) |
|
|
461 |
|
|
154 |
|
|
— |
|
|
— |
|
|
|
615 |
|
Adjusted
EBIT (2) |
|
$ |
118,067 |
|
$ |
35,009 |
|
$ |
17,922 |
|
$ |
(3,983 |
) |
|
$ |
167,015 |
|
As a percent of total sales |
|
|
18.9 |
% |
|
14.2 |
% |
|
12.8 |
% |
|
|
|
|
17.2 |
% |
(1) EBIT is defined as Operating income plus Other
income (expense).(2) The primary profit measure used by management
to assess segment performance is adjusted EBIT. EBIT for each
operating segment is adjusted for special items to derive adjusted
EBIT.(3) Special items in 2023 primarily reflect amortization of
step up in value of acquired inventories of $2,957 and $588 in
Americas and International Welding, respectively, Rationalization
and asset impairment net charges of $2,667 in International
Welding.(4) Special items in 2022 primarily reflect the
amortization of step up in value of acquired inventories of $1,459
in Americas Welding related to an acquisition and Rationalization
and asset impairment net gains of $998 in Americas Welding and net
charges of $154 in International Welding.
Lincoln
Electric Holdings, Inc. Segment
Highlights (In thousands)
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
International |
|
The Harris |
|
Corporate / |
|
|
|
|
|
|
Welding |
|
Welding |
|
Products Group |
|
Eliminations |
|
Consolidated |
|
Six
months ended June 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
1,335,611 |
|
|
$ |
505,819 |
|
$ |
258,478 |
|
$ |
— |
|
|
$ |
2,099,908 |
|
|
Inter-segment sales |
|
|
63,168 |
|
|
|
15,045 |
|
|
5,764 |
|
|
(83,977 |
) |
|
|
— |
|
|
Total sales |
|
$ |
1,398,779 |
|
|
$ |
520,864 |
|
$ |
264,242 |
|
$ |
(83,977 |
) |
|
$ |
2,099,908 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
259,262 |
|
|
As a percent of total sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12.3 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
(1) |
|
$ |
266,582 |
|
|
$ |
59,814 |
|
$ |
38,493 |
|
$ |
(11,586 |
) |
|
$ |
353,303 |
|
|
As a percent of total sales |
|
|
19.1 |
|
% |
|
11.5 |
% |
|
14.6 |
% |
|
|
|
|
16.8 |
|
% |
Special
items charges (3) |
|
|
5,742 |
|
|
|
3,557 |
|
|
— |
|
|
— |
|
|
|
9,299 |
|
|
Adjusted
EBIT (2) |
|
$ |
272,324 |
|
|
$ |
63,371 |
|
$ |
38,493 |
|
$ |
(11,586 |
) |
|
$ |
362,602 |
|
|
As a percent of total sales |
|
|
19.5 |
|
% |
|
12.2 |
% |
|
14.6 |
% |
|
|
|
|
17.3 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six
months ended June 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
1,129,714 |
|
|
$ |
494,670 |
|
$ |
270,653 |
|
$ |
— |
|
|
$ |
1,895,037 |
|
|
Inter-segment sales |
|
|
57,187 |
|
|
|
15,755 |
|
|
5,928 |
|
|
(78,870 |
) |
|
|
— |
|
|
Total sales |
|
$ |
1,186,901 |
|
|
$ |
510,425 |
|
$ |
276,581 |
|
$ |
(78,870 |
) |
|
$ |
1,895,037 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
253,853 |
|
|
As a percent of total sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13.4 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
(1) |
|
$ |
232,909 |
|
|
$ |
70,595 |
|
$ |
37,520 |
|
$ |
(8,785 |
) |
|
$ |
332,239 |
|
|
As a percent of total sales |
|
|
19.6 |
|
% |
|
13.8 |
% |
|
13.6 |
% |
|
|
|
|
17.5 |
|
% |
Special
items charges (4) |
|
|
(3,274 |
) |
|
|
1,501 |
|
|
— |
|
|
— |
|
|
|
(1,773 |
) |
|
Adjusted
EBIT (2) |
|
$ |
229,635 |
|
|
$ |
72,096 |
|
$ |
37,520 |
|
$ |
(8,785 |
) |
|
$ |
330,466 |
|
|
As a percent of total sales |
|
|
19.3 |
|
% |
|
14.1 |
% |
|
13.6 |
% |
|
|
|
|
17.4 |
|
% |
(1) EBIT is defined as Operating income plus Other
income (expense).(2) The primary profit measure used by management
to assess segment performance is adjusted EBIT. EBIT for each
operating segment is adjusted for special items to derive adjusted
EBIT.(3) Special items in 2023 primarily reflect amortization of
step up in value of acquired inventories of $5,742 and $1,659 in
Americas and International Welding, respectively, Rationalization
and asset impairment net charges of $3,544 in International
Welding, and a gain on asset disposal of $1,646 in International
Welding.(4) Special items in 2022 primarily reflect Rationalization
and asset impairment charges of $2,039 in International Welding and
net gains of $998 in Americas Welding, amortization of step up in
value of acquired inventories of $1,459 in Americas Welding and a
$3,735 net gain related to final settlement associated with the
termination of a pension plan in Americas Welding.
Lincoln
Electric Holdings, Inc. Change in Net Sales
by Segment (In thousands)
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30th Change in Net
Sales by Segment |
|
|
|
|
|
Change in Net Sales due to: |
|
|
|
|
|
Net Sales |
|
|
|
|
|
|
|
|
|
|
Foreign |
|
Net Sales |
|
|
2022 |
|
Volume |
|
Acquisitions |
|
Price |
|
Exchange |
|
2023 |
|
|
Operating Segments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas Welding |
$ |
595,659 |
|
$ |
34,384 |
|
|
$ |
43,947 |
|
$ |
5,974 |
|
$ |
(2,998 |
) |
|
$ |
676,966 |
|
|
International Welding |
|
236,629 |
|
|
9,006 |
|
|
|
6,009 |
|
|
999 |
|
|
760 |
|
|
|
253,403 |
|
|
The Harris
Products Group |
|
137,301 |
|
|
(8,853 |
) |
|
|
— |
|
|
1,408 |
|
|
340 |
|
|
|
130,196 |
|
|
Consolidated |
$ |
969,589 |
|
$ |
34,537 |
|
|
$ |
49,956 |
|
$ |
8,381 |
|
$ |
(1,898 |
) |
|
$ |
1,060,565 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
Welding |
|
|
|
|
5.8 |
|
% |
|
7.4 |
% |
|
1.0 |
% |
|
(0.5 |
) |
% |
|
13.6 |
|
% |
International Welding |
|
|
|
|
3.8 |
|
% |
|
2.5 |
% |
|
0.4 |
% |
|
0.3 |
|
% |
|
7.1 |
|
% |
The Harris
Products Group |
|
|
|
|
(6.4 |
) |
% |
|
— |
|
|
1.0 |
% |
|
0.2 |
|
% |
|
(5.2 |
) |
% |
Consolidated |
|
|
|
|
3.6 |
|
% |
|
5.2 |
% |
|
0.9 |
% |
|
(0.2 |
) |
% |
|
9.4 |
|
% |
Six Months
Ended June 30th Change in Net
Sales by
Segment |
|
|
|
|
|
|
Change in Net Sales due to: |
|
|
|
|
|
|
Net Sales |
|
|
|
|
|
|
|
|
|
|
Foreign |
|
Net Sales |
|
|
|
2022 |
|
Volume |
|
Acquisitions |
|
Price |
|
Exchange |
|
2023 |
|
|
Operating Segments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas Welding |
|
$ |
1,129,714 |
|
$ |
93,034 |
|
|
$ |
89,196 |
|
$ |
30,673 |
|
$ |
(7,006 |
) |
|
$ |
1,335,611 |
|
|
International Welding |
|
|
494,670 |
|
|
(5,651 |
) |
|
|
13,365 |
|
|
15,868 |
|
|
(12,433 |
) |
|
|
505,819 |
|
|
The Harris
Products Group |
|
|
270,653 |
|
|
(13,870 |
) |
|
|
— |
|
|
1,973 |
|
|
(278 |
) |
|
|
258,478 |
|
|
Consolidated |
|
$ |
1,895,037 |
|
$ |
73,513 |
|
|
$ |
102,561 |
|
$ |
48,514 |
|
$ |
(19,717 |
) |
|
$ |
2,099,908 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
Welding |
|
|
|
|
|
8.2 |
|
% |
|
7.9 |
% |
|
2.7 |
% |
|
(0.6 |
) |
% |
|
18.2 |
|
% |
International Welding |
|
|
|
|
|
(1.1 |
) |
% |
|
2.7 |
% |
|
3.2 |
% |
|
(2.5 |
) |
% |
|
2.3 |
|
% |
The Harris
Products Group |
|
|
|
|
|
(5.1 |
) |
% |
|
— |
|
|
0.7 |
% |
|
(0.1 |
) |
% |
|
(4.5 |
) |
% |
Consolidated |
|
|
|
|
|
3.9 |
|
% |
|
5.4 |
% |
|
2.6 |
% |
|
(1.0 |
) |
% |
|
10.8 |
|
% |
Contact
Amanda Butler
Vice President, Investor Relations & Communications
Tel: 216.383.2534
Email: Amanda_Butler@lincolnelectric.com
Lincoln Electric (NASDAQ:LECO)
Gráfico Histórico do Ativo
De Mai 2024 até Jun 2024
Lincoln Electric (NASDAQ:LECO)
Gráfico Histórico do Ativo
De Jun 2023 até Jun 2024