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
Third quarter 2024 sales decreased 4.8% to
“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
Nine Months 2024 Summary
Net income for the nine months ended
Sales decreased 4.7% to
Dividend
The Company’s Board of Directors declared a quarterly cash dividend of
Webcast Information
A conference call to discuss third quarter 2024 financial results will be webcast live today,
About
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
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Financial Highlights (In thousands, except per share amounts) (Unaudited) |
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Consolidated Statements of Income |
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Fav (Unfav) to |
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Three Months Ended |
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Prior Year |
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2024 |
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% of Sales |
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2023 |
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% of Sales |
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$ |
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% |
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Net sales |
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$ |
983,759 |
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100.0 |
|
% |
$ |
1,033,214 |
|
100.0 |
% |
$ |
(49,455 |
) |
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(4.8 |
) |
% |
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Cost of goods sold |
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631,681 |
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64.2 |
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% |
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667,584 |
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64.6 |
% |
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35,903 |
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5.4 |
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% |
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Gross profit |
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352,078 |
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35.8 |
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% |
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365,630 |
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35.4 |
% |
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(13,552 |
) |
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(3.7 |
) |
% |
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Selling, general & administrative expenses |
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186,291 |
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18.9 |
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% |
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187,115 |
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18.1 |
% |
|
824 |
|
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0.4 |
|
% |
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Rationalization and asset impairment charges |
|
|
20,227 |
|
|
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2.1 |
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% |
|
7,074 |
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0.7 |
% |
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(13,153 |
) |
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(185.9 |
) |
% |
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Operating income |
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145,560 |
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14.8 |
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% |
|
171,441 |
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16.6 |
% |
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(25,881 |
) |
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(15.1 |
) |
% |
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Interest expense, net |
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11,974 |
|
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1.2 |
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% |
|
10,809 |
|
1.0 |
% |
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(1,165 |
) |
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(10.8 |
) |
% |
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Other (expense) income |
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(1,644 |
) |
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(0.2 |
) |
% |
|
801 |
|
0.1 |
% |
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(2,445 |
) |
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(305.2 |
) |
% |
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Income before income taxes |
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131,942 |
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13.4 |
|
% |
|
161,433 |
|
15.6 |
% |
|
(29,491 |
) |
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(18.3 |
) |
% |
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Income taxes |
|
|
31,186 |
|
|
|
3.2 |
|
% |
|
32,090 |
|
3.1 |
% |
|
904 |
|
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2.8 |
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% |
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Effective tax rate |
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23.6 |
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% |
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19.9 |
% |
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(3.7 |
) |
% |
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Net income |
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$ |
100,756 |
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10.2 |
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% |
$ |
129,343 |
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12.5 |
% |
$ |
(28,587 |
) |
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(22.1 |
) |
% |
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Basic earnings per share |
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$ |
1.78 |
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$ |
2.26 |
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$ |
(0.48 |
) |
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(21.2 |
) |
% |
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Diluted earnings per share |
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$ |
1.77 |
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$ |
2.22 |
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$ |
(0.45 |
) |
|
(20.3 |
) |
% |
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Weighted average shares (basic) |
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56,565 |
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|
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57,320 |
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Weighted average shares (diluted) |
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57,066 |
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58,136 |
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Fav (Unfav) to |
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Nine Months Ended |
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Prior Year |
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2024 |
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% of Sales |
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2023 |
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% of Sales |
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$ |
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% |
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Net sales |
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$ |
2,986,639 |
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100.0 |
% |
$ |
3,133,122 |
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100.0 |
% |
$ |
(146,483 |
) |
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(4.7 |
) |
% |
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Cost of goods sold |
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1,882,349 |
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|
63.0 |
% |
|
2,038,707 |
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65.1 |
% |
|
156,358 |
|
|
7.7 |
|
% |
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Gross profit |
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|
1,104,290 |
|
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|
37.0 |
% |
|
1,094,415 |
|
34.9 |
% |
|
9,875 |
|
|
0.9 |
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% |
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Selling, general & administrative expenses |
|
|
593,523 |
|
|
|
19.9 |
% |
|
569,979 |
|
18.2 |
% |
|
(23,544 |
) |
|
(4.1 |
) |
% |
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Rationalization and asset impairment charges |
|
|
51,322 |
|
|
|
1.7 |
% |
|
10,618 |
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0.3 |
% |
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(40,704 |
) |
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(383.3 |
) |
% |
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Operating income |
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|
459,445 |
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15.4 |
% |
|
513,818 |
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16.4 |
% |
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(54,373 |
) |
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(10.6 |
) |
% |
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Interest expense, net |
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|
31,414 |
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|
1.1 |
% |
|
35,708 |
|
1.1 |
% |
|
4,294 |
|
|
12.0 |
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% |
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Other (expense) income |
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(935 |
) |
|
|
— |
% |
|
11,727 |
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0.4 |
% |
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(12,662 |
) |
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(108.0 |
) |
% |
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Income before income taxes |
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427,096 |
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14.3 |
% |
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489,837 |
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15.6 |
% |
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(62,741 |
) |
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(12.8 |
) |
% |
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Income taxes |
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|
101,217 |
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3.4 |
% |
|
101,232 |
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3.2 |
% |
|
15 |
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0.0 |
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% |
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Effective tax rate |
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23.7 |
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% |
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20.7 |
% |
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(3.0 |
) |
% |
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Net income |
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$ |
325,879 |
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10.9 |
% |
$ |
388,605 |
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12.4 |
% |
$ |
(62,726 |
) |
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(16.1 |
) |
% |
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Basic earnings per share |
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$ |
5.74 |
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|
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$ |
6.76 |
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$ |
(1.02 |
) |
|
(15.1 |
) |
% |
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Diluted earnings per share |
|
$ |
5.68 |
|
|
|
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|
$ |
6.67 |
|
|
|
$ |
(0.99 |
) |
|
(14.8 |
) |
% |
|
Weighted average shares (basic) |
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|
56,749 |
|
|
|
|
|
|
57,465 |
|
|
|
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|
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Weighted average shares (diluted) |
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|
57,349 |
|
|
|
|
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|
58,277 |
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Financial Highlights (In thousands) (Unaudited) |
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Balance Sheet Highlights |
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Selected Consolidated Balance Sheet Data |
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Cash and cash equivalents |
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$ |
404,218 |
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$ |
393,787 |
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Accounts receivable, net |
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|
517,035 |
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|
538,830 |
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Inventories |
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|
612,412 |
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562,864 |
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Total current assets |
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1,757,101 |
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1,693,111 |
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Property, plant and equipment, net |
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|
624,403 |
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|
575,316 |
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Total assets |
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3,664,545 |
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3,377,297 |
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Trade accounts payable |
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|
323,584 |
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|
325,435 |
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Total current liabilities |
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951,336 |
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|
754,610 |
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Short-term debt (1) |
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|
111,993 |
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|
2,439 |
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Long-term debt, less current portion |
|
|
1,150,616 |
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|
1,102,771 |
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Total equity |
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|
1,339,190 |
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1,308,852 |
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Operating Working Capital |
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Average operating working capital to Net sales (2) |
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|
19.1 |
% |
|
17.1 |
% |
|
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Short-term debt (1) |
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$ |
111,993 |
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$ |
2,439 |
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Long-term debt, less current portion |
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|
1,150,616 |
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|
1,102,771 |
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Total debt |
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|
1,262,609 |
|
|
1,105,210 |
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Total equity |
|
|
1,339,190 |
|
|
1,308,852 |
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Invested capital |
|
$ |
2,601,799 |
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$ |
2,414,062 |
|
|
|
|
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|
|
|
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Total debt / invested capital |
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|
48.5 |
% |
|
45.8 |
% |
|
(1) |
Includes current portion of long-term debt. |
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(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. |
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Financial Highlights (In thousands, except per share amounts) (Unaudited) |
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Non-GAAP Financial Measures |
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Three Months Ended |
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Nine Months Ended |
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|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
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Operating income as reported |
|
$ |
145,560 |
|
|
$ |
171,441 |
|
|
|
$ |
459,445 |
|
|
$ |
513,818 |
|
|
|
Special items (pre-tax): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
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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 |
|
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As a percent of net sales |
|
|
17.3 |
|
% |
|
17.7 |
|
% |
|
|
17.4 |
|
% |
|
17.1 |
|
% |
|
|
|
|
|
|
|
|
|
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|
|
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|
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Net income as reported |
|
$ |
100,756 |
|
|
$ |
129,343 |
|
|
|
$ |
325,879 |
|
|
$ |
388,605 |
|
|
|
Special items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
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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 |
) |
|
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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 |
|
|
|
|
|
|
|
|
|
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|
|
|
|
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|
||||
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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. |
|
|
Financial Highlights (In thousands, except per share amounts) (Unaudited) |
|||||||||
|
Non-GAAP Financial Measures |
|||||||||
|
|
|
|
|
|
|
|
|
||
|
|
|
Twelve Months Ended |
|
||||||
|
Return on |
|
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 |
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||||
|
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. |
|
Financial Highlights (In thousands, except per share amounts) (Unaudited) |
|||||||
|
Condensed Consolidated Statements of Cash Flows |
|||||||
|
|
|
|
|
|
|
||
|
|
Three Months Ended |
||||||
|
|
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 |
|
|
Financial Highlights (In thousands, except per share amounts) (Unaudited) |
||||||||
|
Condensed Consolidated Statements of Cash Flows |
||||||||
|
|
|
|
|
|
|
|
||
|
|
|
Nine Months Ended |
||||||
|
|
|
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 |
|
|
Segment Highlights (1) (In thousands) (Unaudited) |
|||||||||||||||||
|
|
|
|
|
International |
|
The Harris |
|
Corporate / |
|
|
|
|
|||||
|
|
|
Welding |
|
Welding |
|
|
|
Eliminations |
|
Consolidated |
|
||||||
|
Three months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
||||||||||||||||
|
(4) |
Special items in 2023 primarily reflect amortization of step up in value of acquired inventories of |
||||||||||||||||
|
Segment Highlights (In thousands) (Unaudited) |
|||||||||||||||||
|
|
|
|
|
International |
|
The Harris |
|
Corporate / |
|
|
|
|
|||||
|
|
|
Welding |
|
Welding |
|
|
|
Eliminations |
|
Consolidated |
|
||||||
|
Nine months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
(4) |
Special items in 2023 primarily reflect amortization of step up in value of acquired inventories of |
|
Change in (In thousands) (Unaudited) |
||||||||||||||||||||||
|
Three Months Ended |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
Change in |
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign |
|
|
|
|||||||
|
|
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 |
|
|
|
|
|
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 |
) |
% |
|
|
|
|
|
|
(3.0 |
) |
% |
|
— |
|
|
7.1 |
|
% |
|
(0.5 |
) |
% |
|
3.6 |
|
% |
|
Consolidated |
|
|
|
|
(8.7 |
) |
% |
|
3.0 |
% |
|
1.0 |
|
% |
|
(0.1 |
) |
% |
|
(4.8 |
) |
% |
|
Nine Months Ended |
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
Change in |
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign |
|
|
|
|||||||
|
|
|
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 |
|
|
|
|
|
|
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 |
) |
% |
|
|
|
|
|
|
|
(3.9 |
) |
% |
|
— |
|
|
4.4 |
|
% |
|
(0.2 |
) |
% |
|
0.4 |
|
% |
|
Consolidated |
|
|
|
|
|
(6.7 |
) |
% |
|
1.5 |
% |
|
0.6 |
|
% |
|
(0.1 |
) |
% |
|
(4.7 |
) |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241031404876/en/
Vice President, Investor Relations
Tel: 216.383.2534
Email: Amanda_Butler@lincolnelectric.com
Source:
