Company Announcements

Lincoln Electric Reports Third Quarter 2024 Results

Third Quarter 2024 Highlights

  • Net sales of $984 million
  • Operating income margin of 14.8%; Adjusted operating income margin of 17.3%
  • EPS of $1.77; Adjusted EPS of $2.14
  • Cash flows from operations of $199 million and 134% cash conversion
  • Returned $91 million to shareholders through dividends and share repurchases

CLEVELAND--(BUSINESS WIRE)--Oct. 31, 2024-- Lincoln Electric Holdings, Inc. (the “Company”) (Nasdaq: LECO) today reported third quarter 2024 net income of $100.8 million, or diluted earnings per share (EPS) of $1.77, which includes special item after-tax net charges of $21.6 million, or $0.37 EPS. This compares with prior year period net income of $129.3 million, or $2.22 EPS, which included special item after-tax net charges of $10.1 million, or $0.18 EPS. Excluding special items, third quarter 2024 adjusted net income was $122.4 million, or $2.14 adjusted EPS. This compares with adjusted net income of $139.5 million, or $2.40 adjusted EPS, in the prior year period.

Third quarter 2024 sales decreased 4.8% to $983.8 million reflecting a 7.7% decrease in organic sales and a 3.0% benefit from acquisitions. Operating income for the third quarter 2024 was $145.6 million, or 14.8% of sales, as compared with operating income of $171.4 million, or 16.6% of sales, in the prior year period. Excluding special items, adjusted operating income was $169.8 million, or 17.3% of sales, as compared with $183.4 million, or 17.7% of sales, in the prior year period.

“Third quarter results demonstrated the resilience of our business as benefits from our strategic initiatives, diligent cost management, and lower employee-related costs generated solid profitability and cash flow performance,” stated Steven B. Hedlund, President and Chief Executive Officer. “During the quarter we initiated broader cost saving measures to address slowing organic sales trends, while investing in long-term growth and operational excellence, which will position the Company to outperform through the cycle.”

Nine Months 2024 Summary

Net income for the nine months ended September 30, 2024 was $325.9 million, or $5.68 EPS, which includes special item after-tax net charges of $59.4 million, or $1.04 EPS. This compares with prior year period net income of $388.6 million, or $6.67 EPS, which included special item after-tax net charges of $17.3 million, or $0.30 EPS. Excluding these items, adjusted net income for the nine months ended September 30, 2024 decreased 5.1% to $385.3 million, or $6.72 EPS, compared with $405.9 million, or $6.97 EPS, in the prior year period.

Sales decreased 4.7% to $2,986.6 million in the nine months ended September 30, 2024 reflecting a 6.1% decrease in organic sales and a 1.5% benefit from acquisitions. Operating income for the nine months ended September 30, 2024 was $459.4 million, or 15.4% of sales. This compares with operating income of $513.8 million, or 16.4% of sales, in the comparable 2023 period. Excluding special items, adjusted operating income was $518.8 million, or 17.4% of sales, as compared with $536.7 million, or 17.1% of sales, in the prior year period.

Dividend

The Company’s Board of Directors declared a quarterly cash dividend of $0.75 per share, or $3.00 per share on an annualized basis, a 5.6% increase from the prior quarterly cash dividend. The declared quarterly cash dividend of $0.75 per share is payable January 15, 2025 to shareholders of record as of December 31, 2024.

Webcast Information

A conference call to discuss third quarter 2024 financial results will be webcast live today, October 31, 2024, 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 dial (888) 440-4368 (domestic) or (646) 960-0856 (international) and use confirmation code 6709091. 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 operates 71 manufacturing and automation system integration locations across 21 countries and maintains 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, 2023

Lincoln Electric Holdings, Inc.

Financial Highlights

(In thousands, except per share amounts)

(Unaudited)

 

Consolidated Statements of Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fav (Unfav) to

 

 

 

Three Months Ended September 30,

 

Prior Year

 

 

 

2024

 

 

% of Sales

 

2023

 

% of Sales

 

$

 

%

 

Net sales

 

$

983,759

 

 

 

100.0

 

%

$

1,033,214

 

100.0

%

$

(49,455

)

 

(4.8

)

%

Cost of goods sold

 

 

631,681

 

 

 

64.2

 

%

 

667,584

 

64.6

%

 

35,903

 

 

5.4

 

%

Gross profit

 

 

352,078

 

 

 

35.8

 

%

 

365,630

 

35.4

%

 

(13,552

)

 

(3.7

)

%

Selling, general & administrative expenses

 

 

186,291

 

 

 

18.9

 

%

 

187,115

 

18.1

%

 

824

 

 

0.4

 

%

Rationalization and asset impairment charges

 

 

20,227

 

 

 

2.1

 

%

 

7,074

 

0.7

%

 

(13,153

)

 

(185.9

)

%

Operating income

 

 

145,560

 

 

 

14.8

 

%

 

171,441

 

16.6

%

 

(25,881

)

 

(15.1

)

%

Interest expense, net

 

 

11,974

 

 

 

1.2

 

%

 

10,809

 

1.0

%

 

(1,165

)

 

(10.8

)

%

Other (expense) income

 

 

(1,644

)

 

 

(0.2

)

%

 

801

 

0.1

%

 

(2,445

)

 

(305.2

)

%

Income before income taxes

 

 

131,942

 

 

 

13.4

 

%

 

161,433

 

15.6

%

 

(29,491

)

 

(18.3

)

%

Income taxes

 

 

31,186

 

 

 

3.2

 

%

 

32,090

 

3.1

%

 

904

 

 

2.8

 

%

Effective tax rate

 

 

23.6

 

%

 

 

 

 

19.9

%

 

 

 

(3.7

)

%

 

 

Net income

 

$

100,756

 

 

 

10.2

 

%

$

129,343

 

12.5

%

$

(28,587

)

 

(22.1

)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

1.78

 

 

 

 

 

$

2.26

 

 

 

$

(0.48

)

 

(21.2

)

%

Diluted earnings per share

 

$

1.77

 

 

 

 

 

$

2.22

 

 

 

$

(0.45

)

 

(20.3

)

%

Weighted average shares (basic)

 

 

56,565

 

 

 

 

 

 

57,320

 

 

 

 

 

 

 

 

Weighted average shares (diluted)

 

 

57,066

 

 

 

 

 

 

58,136

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fav (Unfav) to

 

 

 

Nine Months Ended September 30,

 

Prior Year

 

 

 

2024

 

 

% of Sales

 

2023

 

% of Sales

 

$

 

%

 

Net sales

 

$

2,986,639

 

 

 

100.0

%

$

3,133,122

 

100.0

%

$

(146,483

)

 

(4.7

)

%

Cost of goods sold

 

 

1,882,349

 

 

 

63.0

%

 

2,038,707

 

65.1

%

 

156,358

 

 

7.7

 

%

Gross profit

 

 

1,104,290

 

 

 

37.0

%

 

1,094,415

 

34.9

%

 

9,875

 

 

0.9

 

%

Selling, general & administrative expenses

 

 

593,523

 

 

 

19.9

%

 

569,979

 

18.2

%

 

(23,544

)

 

(4.1

)

%

Rationalization and asset impairment charges

 

 

51,322

 

 

 

1.7

%

 

10,618

 

0.3

%

 

(40,704

)

 

(383.3

)

%

Operating income

 

 

459,445

 

 

 

15.4

%

 

513,818

 

16.4

%

 

(54,373

)

 

(10.6

)

%

Interest expense, net

 

 

31,414

 

 

 

1.1

%

 

35,708

 

1.1

%

 

4,294

 

 

12.0

 

%

Other (expense) income

 

 

(935

)

 

 

%

 

11,727

 

0.4

%

 

(12,662

)

 

(108.0

)

%

Income before income taxes

 

 

427,096

 

 

 

14.3

%

 

489,837

 

15.6

%

 

(62,741

)

 

(12.8

)

%

Income taxes

 

 

101,217

 

 

 

3.4

%

 

101,232

 

3.2

%

 

15

 

 

0.0

 

%

Effective tax rate

 

 

23.7

 

%

 

 

 

 

20.7

%

 

 

 

(3.0

)

%

 

 

Net income

 

$

325,879

 

 

 

10.9

%

$

388,605

 

12.4

%

$

(62,726

)

 

(16.1

)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

5.74

 

 

 

 

 

$

6.76

 

 

 

$

(1.02

)

 

(15.1

)

%

Diluted earnings per share

 

$

5.68

 

 

 

 

 

$

6.67

 

 

 

$

(0.99

)

 

(14.8

)

%

Weighted average shares (basic)

 

 

56,749

 

 

 

 

 

 

57,465

 

 

 

 

 

 

 

 

Weighted average shares (diluted)

 

 

57,349

 

 

 

 

 

 

58,277

 

 

 

 

 

 

 

 

Lincoln Electric Holdings, Inc.

Financial Highlights

(In thousands)

(Unaudited)

 

Balance Sheet Highlights

 

 

 

 

 

 

 

 

 

Selected Consolidated Balance Sheet Data

 

September 30, 2024

 

December 31, 2023

 

Cash and cash equivalents

 

$

404,218

 

$

393,787

 

Accounts receivable, net

 

 

517,035

 

 

538,830

 

Inventories

 

 

612,412

 

 

562,864

 

Total current assets

 

 

1,757,101

 

 

1,693,111

 

Property, plant and equipment, net

 

 

624,403

 

 

575,316

 

Total assets

 

 

3,664,545

 

 

3,377,297

 

Trade accounts payable

 

 

323,584

 

 

325,435

 

Total current liabilities

 

 

951,336

 

 

754,610

 

Short-term debt (1)

 

 

111,993

 

 

2,439

 

Long-term debt, less current portion

 

 

1,150,616

 

 

1,102,771

 

Total equity

 

 

1,339,190

 

 

1,308,852

 

 

 

 

 

 

 

 

 

Operating Working Capital

 

September 30, 2024

 

December 31, 2023

 

Average operating working capital to Net sales (2)

 

 

19.1

%

 

17.1

%

 

 

 

 

 

 

 

 

Invested Capital

 

September 30, 2024

 

December 31, 2023

 

Short-term debt (1)

 

$

111,993

 

$

2,439

 

Long-term debt, less current portion

 

 

1,150,616

 

 

1,102,771

 

Total debt

 

 

1,262,609

 

 

1,105,210

 

Total equity

 

 

1,339,190

 

 

1,308,852

 

Invested capital

 

$

2,601,799

 

$

2,414,062

 

 

 

 

 

 

 

 

 

Total debt / invested capital

 

 

48.5

%

 

45.8

%

(1)

 

Includes current portion of long-term debt.

(2)

 

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 September 30,

 

 

Nine Months Ended September 30,

 

 

 

2024

 

2023

 

 

2024

 

2023

 

Operating income as reported

 

$

145,560

 

 

$

171,441

 

 

 

$

459,445

 

 

$

513,818

 

 

Special items (pre-tax):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rationalization and asset impairment charges (2)

 

 

20,227

 

 

 

7,074

 

 

 

 

51,322

 

 

 

10,618

 

 

Acquisition transaction costs (3)

 

 

610

 

 

 

 

 

 

 

4,551

 

 

 

 

 

Amortization of step up in value of acquired inventories (5)

 

 

3,359

 

 

 

4,852

 

 

 

 

3,474

 

 

 

12,252

 

 

Adjusted operating income (1)

 

$

169,756

 

 

$

183,367

 

 

 

$

518,792

 

 

$

536,688

 

 

As a percent of net sales

 

 

17.3

 

%

 

17.7

 

%

 

 

17.4

 

%

 

17.1

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income as reported

 

$

100,756

 

 

$

129,343

 

 

 

$

325,879

 

 

$

388,605

 

 

Special items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rationalization and asset impairment charges (2)

 

 

20,227

 

 

 

7,074

 

 

 

 

51,322

 

 

 

10,618

 

 

Acquisition transaction costs (3)

 

 

610

 

 

 

 

 

 

 

4,551

 

 

 

 

 

Pension settlement charges (4)

 

 

3,966

 

 

 

 

 

 

 

3,966

 

 

 

 

 

Amortization of step up in value of acquired inventories (5)

 

 

3,359

 

 

 

4,852

 

 

 

 

3,474

 

 

 

12,252

 

 

Loss (gain) on asset disposal (6)

 

 

 

 

 

 

 

 

 

4,950

 

 

 

(1,646

)

 

Tax effect of Special items (7)

 

 

(6,550

)

 

 

(1,780

)

 

 

 

(8,858

)

 

 

(3,908

)

 

Adjusted net income (1)

 

 

122,368

 

 

 

139,489

 

 

 

 

385,284

 

 

 

405,921

 

 

Interest expense, net

 

 

11,974

 

 

 

10,809

 

 

 

 

31,414

 

 

 

35,708

 

 

Income taxes as reported

 

 

31,186

 

 

 

32,090

 

 

 

 

101,217

 

 

 

101,232

 

 

Tax effect of Special items (7)

 

 

6,550

 

 

 

1,780

 

 

 

 

8,858

 

 

 

3,908

 

 

Adjusted EBIT (1)

 

$

172,078

 

 

$

184,168

 

 

 

$

526,773

 

 

$

546,769

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective tax rate as reported

 

 

23.6

 

%

 

19.9

 

%

 

 

23.7

 

%

 

20.7

 

%

Net special item tax impact

 

 

 

%

 

(0.4

)

%

 

 

(1.5

)

%

 

(0.1

)

%

Adjusted effective tax rate (1)

 

 

23.6

 

%

 

19.5

 

%

 

 

22.2

 

%

 

20.6

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share as reported

 

$

1.77

 

 

$

2.22

 

 

 

$

5.68

 

 

$

6.67

 

 

Special items per share

 

 

0.37

 

 

 

0.18

 

 

 

 

1.04

 

 

 

0.30

 

 

Adjusted diluted earnings per share (1)

 

$

2.14

 

 

$

2.40

 

 

 

$

6.72

 

 

$

6.97

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares (diluted)

 

 

57,066

 

 

 

58,136

 

 

 

 

57,349

 

 

 

58,277

 

 

(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)

 

Items in 2024 primarily relate to rationalization plans initiated during the third quarter of 2024 in all three segments, as well as previously initiated plans and the disposition of the Company’s Russian entity in International Welding.  Items in 2023 primarily relate to plans previously initiated within International Welding.

 

(3)  

 

Related to acquisitions and are included in Selling, general & administrative expenses.

 

(4)

 

Pension settlement charges primarily due to the final settlement associated with the termination of a pension plan and are included in Other (expense) income.

 

(5)

 

Related to acquisitions and are included in Cost of goods sold.

 

(6)

 

Loss (gain) on asset disposal is included in Other (expense) income.

 

(7)

 

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 September 30,

 

Return on Invested Capital

 

2024

 

2023

 

Net income as reported

 

$

482,523

 

 

$

497,751

 

 

Plus: Interest expense (after-tax)

 

 

37,665

 

 

 

36,283

 

 

Less: Interest income (after-tax)

 

 

7,845

 

 

 

3,104

 

 

Net operating profit after taxes

 

$

512,343

 

 

$

530,930

 

 

Special Items:

 

 

 

 

 

 

 

Rationalization and asset impairment charges

 

 

29,390

 

 

 

13,001

 

 

Acquisition transaction costs

 

 

4,554

 

 

 

2,935

 

 

Pension settlement charges

 

 

4,811

 

 

 

 

 

Amortization of step up in value of acquired inventories

 

 

3,471

 

 

 

12,253

 

 

Loss (gain) on asset disposal

 

 

4,950

 

 

 

(1,646

)

 

Tax effect of Special items (2)

 

 

(2,413

)

 

 

(5,159

)

 

Adjusted net operating profit after taxes (1)

 

$

557,106

 

 

$

552,314

 

 

 

 

 

 

 

 

 

 

Invested Capital

 

September 30, 2024

 

September 30, 2023

 

Short-term debt

 

$

111,993

 

 

$

7,700

 

 

Long-term debt, less current portion

 

 

1,150,616

 

 

 

1,102,858

 

 

Total debt

 

 

1,262,609

 

 

 

1,110,558

 

 

Total equity

 

 

1,339,190

 

 

 

1,225,582

 

 

Invested capital

 

$

2,601,799

 

 

$

2,336,140

 

 

 

 

 

 

 

 

 

 

Return on invested capital as reported

 

 

19.7

 

%

 

22.7

 

%

Adjusted return on invested capital (1)

 

 

21.4

 

%

 

23.6

 

%

(1)

 

Adjusted net operating profit after taxes and adjusted ROIC are non-GAAP financial measures.  Refer to Non-GAAP Information section.

(2)

 

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 September 30,

 

2024

 

2023

OPERATING ACTIVITIES:

 

 

 

 

 

Net income

$

100,756

 

 

$

129,343

 

Adjustments to reconcile Net income to Net cash provided by operating activities:

 

 

 

 

 

Rationalization and asset impairment net charges

 

2,168

 

 

 

(6

)

Depreciation and amortization

 

22,644

 

 

 

21,489

 

Pension settlement net charges

 

3,966

 

 

 

 

Other non-cash items, net

 

(7,051

)

 

 

41

 

Changes in operating assets and liabilities, net of effects from acquisitions:

 

 

 

 

 

Decrease in accounts receivable

 

50,650

 

 

 

25,585

 

Decrease in inventories

 

5,930

 

 

 

51,514

 

Net change in other current assets

 

(14,758

)

 

 

(1,454

)

Decrease in trade accounts payable

 

(35,844

)

 

 

(26,238

)

Net change in other current liabilities

 

72,402

 

 

 

29,226

 

Net change in other long-term assets and liabilities

 

(1,662

)

 

 

(6,396

)

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

199,201

 

 

 

223,104

 

 

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

 

 

Capital expenditures

 

(35,722

)

 

 

(25,907

)

Acquisition of businesses, net of cash acquired

 

(100,092

)

 

 

(28

)

Proceeds from sale of property, plant and equipment

 

1,203

 

 

 

704

 

Purchase of marketable securities

 

 

 

 

468

 

NET CASH USED BY INVESTING ACTIVITIES

 

(134,611

)

 

 

(24,763

)

 

 

 

 

 

 

FINANCING ACTIVITIES:

 

 

 

 

 

Proceeds from (payments on) short-term borrowings

 

6,099

 

 

 

(2,594

)

Proceeds from long-term borrowings

 

150,000

 

 

 

 

Payments on long-term borrowings

 

(169

)

 

 

(1,019

)

Proceeds from exercise of stock options

 

899

 

 

 

1,289

 

Purchase of shares for treasury

 

(50,392

)

 

 

(45,355

)

Cash dividends paid to shareholders

 

(40,283

)

 

 

(36,805

)

NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES

 

66,154

 

 

 

(84,484

)

 

 

 

 

 

 

Effect of exchange rate changes on Cash and cash equivalents

 

802

 

 

 

8,327

 

INCREASE IN CASH AND CASH EQUIVALENTS

 

131,546

 

 

 

122,184

 

Cash and cash equivalents at beginning of period

 

272,672

 

 

 

220,483

 

Cash and cash equivalents at end of period

$

404,218

 

 

$

342,667

 

 

 

 

 

 

 

Cash dividends paid per share

$

0.71

 

 

$

0.64

 

Lincoln Electric Holdings, Inc.

Financial Highlights

(In thousands, except per share amounts)

(Unaudited)

 

Condensed Consolidated Statements of Cash Flows

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

2024

 

2023

OPERATING ACTIVITIES:

 

 

 

 

 

 

Net income

 

$

325,879

 

 

$

388,605

 

Adjustments to reconcile Net income to Net cash provided by operating activities:

 

 

 

 

 

 

Rationalization and asset impairment net charges

 

 

25,919

 

 

 

1,128

 

Depreciation and amortization

 

 

65,095

 

 

 

64,701

 

Pension settlement net charges

 

 

3,966

 

 

 

 

Other non-cash items, net

 

 

9,484

 

 

 

21,427

 

Changes in operating assets and liabilities, net of effects from acquisitions:

 

 

 

 

 

 

Increase in accounts receivable

 

 

36,166

 

 

 

6,695

 

(Increase) decrease in inventories

 

 

(21,696

)

 

 

57,781

 

Net change in other current assets

 

 

(19,911

)

 

 

(14,729

)

Increase in trade accounts payable

 

 

(6,888

)

 

 

(24,672

)

Net change in other current liabilities

 

 

67,310

 

 

 

57,975

 

Net change in other long-term assets and liabilities

 

 

17,858

 

 

 

(13,031

)

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

 

503,182

 

 

 

545,880

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

 

 

 

Capital expenditures

 

 

(85,117

)

 

 

(66,459

)

Acquisition of businesses, net of cash acquired

 

 

(252,746

)

 

 

(32,685

)

Proceeds from sale of property, plant and equipment

 

 

2,506

 

 

 

4,596

 

Purchase of marketable securities

 

 

 

 

 

(6,561

)

NET CASH USED BY INVESTING ACTIVITIES

 

 

(335,357

)

 

 

(101,109

)

 

 

 

 

 

 

 

FINANCING ACTIVITIES:

 

 

 

 

 

 

Proceeds from (payments on) short-term borrowings

 

 

5,521

 

 

 

(74,818

)

Proceeds from long-term borrowings

 

 

550,000

 

 

 

 

Payments on long-term borrowings

 

 

(400,508

)

 

 

(7,997

)

Proceeds from exercise of stock options

 

 

25,880

 

 

 

13,299

 

Purchase of shares for treasury

 

 

(211,212

)

 

 

(130,589

)

Cash dividends paid to shareholders

 

 

(121,979

)

 

 

(111,277

)

NET CASH USED BY FINANCING ACTIVITIES

 

 

(152,298

)

 

 

(311,382

)

 

 

 

 

 

 

 

Effect of exchange rate changes on Cash and cash equivalents

 

 

(5,096

)

 

 

12,128

 

INCREASE IN CASH AND CASH EQUIVALENTS

 

 

10,431

 

 

 

145,517

 

Cash and cash equivalents at beginning of period

 

 

393,787

 

 

 

197,150

 

Cash and cash equivalents at end of period

 

$

404,218

 

 

$

342,667

 

 

 

 

 

 

 

 

Cash dividends paid per share

 

$

2.13

 

 

$

1.92

 

Lincoln Electric Holdings, Inc.

Segment Highlights (1)

(In thousands)

(Unaudited)

 

 

 

Americas

 

International

 

The Harris

 

Corporate /

 

 

 

 

 

 

Welding

 

Welding

 

Products Group

 

Eliminations

 

Consolidated

 

Three months ended September 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

637,026

 

$

216,224

 

$

130,509

 

$

 

 

$

983,759

 

Inter-segment sales

 

 

30,845

 

 

7,371

 

 

3,155

 

 

(41,371

)

 

 

 

Total sales

 

$

667,871

 

$

223,595

 

$

133,664

 

$

(41,371

)

 

$

983,759

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

$

100,756

 

As a percent of total sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBIT (1)

 

$

102,158

 

$

17,175

 

$

20,690

 

$

3,893

 

 

$

143,916

 

As a percent of total sales

 

 

15.3

%

 

7.7

%

 

15.5

%

 

 

 

 

14.6

%

Special items charges (3)

 

 

23,357

 

 

2,926

 

 

1,269

 

 

610

 

 

 

28,162

 

Adjusted EBIT (2)

 

$

125,515

 

$

20,101

 

$

21,959

 

$

4,503

 

 

$

172,078

 

As a percent of total sales

 

 

18.8

%

 

9.0

%

 

16.4

%

 

 

 

 

17.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

665,228

 

$

242,010

 

$

125,976

 

$

 

 

$

1,033,214

 

Inter-segment sales

 

 

28,875

 

 

4,896

 

 

2,299

 

 

(36,070

)

 

 

 

Total sales

 

$

694,103

 

$

246,906

 

$

128,275

 

$

(36,070

)

 

$

1,033,214

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

$

129,343

 

As a percent of total sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBIT (1)

 

$

132,420

 

$

22,369

 

$

20,405

 

$

(2,952

)

 

$

172,242

 

As a percent of total sales

 

 

19.1

%

 

9.1

%

 

15.9

%

 

 

 

 

16.7

%

Special items charges (4)

 

 

4,056

 

 

7,870

 

 

 

 

 

 

 

11,926

 

Adjusted EBIT (2)

 

$

136,476

 

$

30,239

 

$

20,405

 

$

(2,952

)

 

$

184,168

 

As a percent of total sales

 

 

19.7

%

 

12.2

%

 

15.9

%

 

 

 

 

17.8

%

(1)

 

EBIT is defined as Operating income plus Other (expense) income.

(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 2024 primarily reflect Rationalization net charges of $16,282 in Americas Welding, $2,676 in International Welding and $1,269 in Harris Products Group. In addition, there was an amortization of step up in value of acquired inventories of $3,109 and $250 in Americas Welding and International Welding, respectively, pension settlement charges of $3,966 in Americas Welding and acquisition transaction costs of $610 in Corporate/Eliminations.

(4)

 

Special items in 2023 primarily reflect amortization of step up in value of acquired inventories of $3,648 and $1,204 in Americas and International Welding, respectively, and rationalization and asset impairment net charges of $408 and $6,666 in Americas and International Welding, respectively.

Lincoln Electric Holdings, Inc.

Segment Highlights

(In thousands)

(Unaudited)

 

 

 

Americas

 

International

 

The Harris

 

Corporate /

 

 

 

 

 

 

Welding

 

Welding

 

Products Group

 

Eliminations

 

Consolidated

 

Nine months ended September 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

1,910,061

 

$

690,743

 

$

385,835

 

$

 

 

$

2,986,639

 

Inter-segment sales

 

 

98,624

 

 

24,628

 

 

9,520

 

 

(132,772

)

 

 

 

Total sales

 

$

2,008,685

 

$

715,371

 

$

395,355

 

$

(132,772

)

 

$

2,986,639

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

$

325,879

 

As a percent of total sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBIT (1)

 

$

374,554

 

$

36,357

 

$

64,095

 

$

(16,496

)

 

$

458,510

 

As a percent of total sales

 

 

18.6

%

 

5.1

%

 

16.2

%

 

 

 

 

15.4

%

Special items charges (3)

 

 

23,711

 

 

37,230

 

 

2,666

 

 

4,656

 

 

 

68,263

 

Adjusted EBIT (2)

 

$

398,265

 

$

73,587

 

$

66,761

 

$

(11,840

)

 

$

526,773

 

As a percent of total sales

 

 

19.8

%

 

10.3

%

 

16.9

%

 

 

 

 

17.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

2,000,839

 

$

747,829

 

$

384,454

 

$

 

 

$

3,133,122

 

Inter-segment sales

 

 

92,043

 

 

19,941

 

 

8,063

 

 

(120,047

)

 

 

 

Total sales

 

$

2,092,882

 

$

767,770

 

$

392,517

 

$

(120,047

)

 

$

3,133,122

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

$

388,605

 

As a percent of total sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBIT (1)

 

$

399,002

 

$

82,183

 

$

58,898

 

$

(14,538

)

 

$

525,545

 

As a percent of total sales

 

 

19.1

%

 

10.7

%

 

15.0

%

 

 

 

 

16.8

%

Special items charges (4)

 

 

9,798

 

 

11,426

 

 

 

 

 

 

 

21,224

 

Adjusted EBIT (2)

 

$

408,800

 

$

93,609

 

$

58,898

 

$

(14,538

)

 

$

546,769

 

As a percent of total sales

 

 

19.5

%

 

12.2

%

 

15.0

%

 

 

 

 

17.5

%

(1)

 

EBIT is defined as Operating income plus Other income.

(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 2024 primarily reflect rationalization net charges of $16,521 in Americas Welding, $32,030 in International Welding, including the impact of the Company’s disposition of its Russian entity, and $2,666 in Harris Products Group. In addition, there was a loss on asset disposal of $4,950 recorded to Other (expense) income in International Welding, an amortization of step up in value of acquired inventories of $3,224 and $250 in Americas Welding and International Welding, respectively, pension settlement charges of $3,966 in Americas Welding, and acquisition transaction costs of $4,551 in Corporate/Eliminations.

(4)

 

Special items in 2023 primarily reflect amortization of step up in value of acquired inventories of $9,390 and $2,862 in Americas and International Welding, respectively, Rationalization and asset impairment net charges of $408 and $10,210 in Americas and International Welding, respectively, and a gain on asset disposal of $1,646 in International Welding.

 Lincoln Electric Holdings, Inc.

Change in Net Sales by Segment

(In thousands)

(Unaudited)

 

Three Months Ended September 30th Change in Net Sales by Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in Net Sales due to:

 

 

 

 

 

Net Sales

 

 

 

 

 

 

 

 

 

 

Foreign

 

Net Sales

 

 

2023

 

Volume

 

Acquisitions

 

Price

 

Exchange

 

2024

 

 

Operating Segments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas Welding

$

665,228

 

$

(57,292

)

 

$

30,212

 

$

2,505

 

 

$

(3,627

)

 

$

637,026

 

 

International Welding

 

242,010

 

 

(28,899

)

 

 

1,064

 

 

(1,349

)

 

 

3,398

 

 

 

216,224

 

 

The Harris Products Group

 

125,976

 

 

(3,727

)

 

 

 

 

8,898

 

 

 

(638

)

 

 

130,509

 

 

Consolidated

$

1,033,214

 

$

(89,918

)

 

$

31,276

 

$

10,054

 

 

$

(867

)

 

$

983,759

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas Welding

 

 

 

 

(8.6

)

%

 

4.5

%

 

0.4

 

%

 

(0.5

)

%

 

(4.2

)

%

International Welding

 

 

 

 

(11.9

)

%

 

0.4

%

 

(0.6

)

%

 

1.4

 

%

 

(10.7

)

%

The Harris Products Group

 

 

 

 

(3.0

)

%

 

 

 

7.1

 

%

 

(0.5

)

%

 

3.6

 

%

Consolidated

 

 

 

 

(8.7

)

%

 

3.0

%

 

1.0

 

%

 

(0.1

)

%

 

(4.8

)

%

Nine Months Ended September 30th Change in Net Sales by Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in Net Sales due to:

 

 

 

 

 

 

Net Sales

 

 

 

 

 

 

 

 

 

 

Foreign

 

Net Sales

 

 

 

2023

 

Volume

 

Acquisitions

 

Price

 

Exchange

 

2024

 

 

Operating Segments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas Welding

 

$

2,000,839

 

$

(145,610

)

 

$

46,796

 

$

11,311

 

 

$

(3,275

)

 

$

1,910,061

 

 

International Welding

 

 

747,829

 

 

(50,728

)

 

 

1,121

 

 

(8,508

)

 

 

1,029

 

 

 

690,743

 

 

The Harris Products Group

 

 

384,454

 

 

(15,106

)

 

 

 

 

17,069

 

 

 

(582

)

 

 

385,835

 

 

Consolidated

 

$

3,133,122

 

$

(211,444

)

 

$

47,917

 

$

19,872

 

 

$

(2,828

)

 

$

2,986,639

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas Welding

 

 

 

 

 

(7.3

)

%

 

2.3

%

 

0.6

 

%

 

(0.2

)

%

 

(4.5

)

%

International Welding

 

 

 

 

 

(6.8

)

%

 

0.1

%

 

(1.1

)

%

 

0.1

 

%

 

(7.6

)

%

The Harris Products Group

 

 

 

 

 

(3.9

)

%

 

 

 

4.4

 

%

 

(0.2

)

%

 

0.4

 

%

Consolidated

 

 

 

 

 

(6.7

)

%

 

1.5

%

 

0.6

 

%

 

(0.1

)

%

 

(4.7

)

%

 

Amanda Butler
Vice President, Investor Relations & Communications
Tel: 216.383.2534
Email: Amanda_Butler@lincolnelectric.com

Source: Lincoln Electric Holdings, Inc.