Attached files
| file | filename |
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| 8-K - 8-K - LINCOLN ELECTRIC HOLDINGS INC | a12-24738_18k.htm |
Exhibit 99.1
Media Contact: Roy L. Morrow (216) 383-4893
Roy_Morrow@lincolnelectric.com
Lincoln Electric Reports 3Q’12 Sales of $697.6 Million;
3Q Operating income increase of 18.5%;
3Q EPS of $0.77, $0.80 as adjusted, an increase of 16.7%, 21.2% as adjusted
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Third Quarter and Nine Month Highlights |
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§ Sales were $697.6 million in the Third Quarter 2012; Sales were $2.2 billion for the nine months ended September 30, 2012, an increase of 8.4% from 2011 |
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§ Operating income increased 18.5% to $88.7 million, or 12.7% of sales, from $74.8 million, or 10.7% of sales, in the Third Quarter 2011; Adjusted operating income increased 22.6% to $91.8 million or 13.2% of sales |
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§ Operating income increased 29.0% to $276.4 million, or 12.7% of sales, from $214.3 million, or 10.7% of sales, in the nine months ended September 30, 2011; Adjusted operating income increased 31.4% to $282.1 million, or 13.0% of sales |
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§ Net income increased 16.6% to $64.8 million, or $0.77 per diluted share, from $55.5 million, or $0.66 per diluted share, in the Third Quarter 2011; Adjusted net income increased 21.5% to $67.5 million, or $0.80 per diluted share, from $55.5 million, or $0.66 per diluted share, in the Third Quarter 2011 |
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§ Net cash provided by operating activities was $82.5 million in the Third Quarter 2012; Net cash provided by operating activities in the nine months ended September 30, 2012 increased $112.9 million, or 86.6%, to $243.3 million |
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CLEVELAND, Ohio, U.S.A., October 31, 2012 -- Lincoln Electric Holdings, Inc. (the “Company”) (Nasdaq: LECO) today reported third quarter 2012 net income of $64.8 million, or $0.77 per diluted share. Adjusted net income was $67.5 million, or $0.80 per diluted share, compared to adjusted net income of $55.5 million, or $0.66 per diluted share, in the comparable 2011 period.
Sales were $697.6 million in the third quarter 2012 versus $701.6 million in the comparable 2011 period, a decrease of 0.6%. Operating income for the third quarter increased $13.9 million to $88.7 million, or 12.7% of sales, from $74.8 million, or 10.7% of sales, in the comparable 2011 period. The effective tax rate for the third quarter 2012 was 28.8% compared with 27.0% in the same period of 2011.
- more -
Lincoln Electric Reports Third Quarter 2012 Financial Results
Sales for the nine months ended September 30, 2012 were $2.2 billion versus $2.0 billion in the comparable 2011 period, an increase of 8.4%. Operating income for the nine months ended September 30, 2012 increased $62.1 million to $276.4 million, or 12.7% of sales, from $214.3 million, or 10.7% of sales, in the comparable 2011 period.
Net income for the nine months ended September 30, 2012 was $195.3 million, or $2.32 per diluted share, compared with net income of $159.5 million, or $1.88 per diluted share, in the comparable 2011 period. Adjusted net income was $199.9 million, or $2.37 per diluted share, compared to adjusted net income of $154.8 million, or $1.83 per diluted share, in the comparable 2011 period. The effective tax rate for the nine months ended September 30, 2012 was 30.8% compared with 26.9% in 2011. The nine months ended September 30, 2011 included a favorable $4.8 million tax adjustment for tax audit settlements.
“The Company delivered excellent operating results this quarter,” said John M. Stropki, Chairman and Chief Executive Officer. “We expanded margins significantly, drove our return on invested capital to almost 19% and generated strong operating cash flows which we will continue to deploy to increase shareholder value.
“Our strong operating performance was delivered in spite of the challenges associated with a weaker macroeconomic environment in international markets and the slowing growth rates in our North America Welding segment. Despite these headwinds, we saw stabilization in orders and revenues. Although we remain cautious for the near term, we are mildly optimistic that the global economy could show moderate improvement in 2013.
“Our overall performance reflects the successful execution of our global growth and operational improvement strategies. We will continue to explore attractive acquisitions that will shape our product portfolio and grow our global reach. We plan to continue our strong investment in new product development and global commercial infrastructure. We remain well positioned to execute our long-term strategic objectives, achieving significant earnings growth and superior returns on invested capital.”
- more -
Lincoln Electric Reports Third Quarter 2012 Financial Results
Net cash provided by operating activities decreased $2.3 million to $82.5 million in the third quarter from $84.8 million for the comparable period in 2011. Third quarter cash flows from operations was reduced by a $56.0 million deposit related to a Canadian income tax dispute. During the quarter, the Company returned $34.2 million to shareholders through the payment of $14.2 million in dividends and the repurchase of $20.0 million, or 481,300 of the Company’s common shares, for treasury. The Company also invested $3.5 million in acquisitions and voluntarily contributed $17.3 million to its U.S. pension plans during the quarter.
Net cash provided by operating activities increased $112.9 million to $243.3 million in the nine months ended September 30, 2012 from $130.4 million for the comparable period in 2011. The 2012 cash flows from operations was reduced by a $56.0 million deposit related to a Canadian income tax dispute. During the period, the Company repaid its $80.0 million senior unsecured note. The Company also returned $102.7 million to shareholders through the payment of $42.5 million in dividends and the repurchase of $60.2 million, or 1,341,984 of the Company’s common shares, for treasury during the period. The Company also invested $52.9 million in acquisitions and voluntarily contributed $53.3 million to its U.S. pension plans.
The Company’s Board of Directors declared a quarterly cash dividend of $0.17 per share, which was paid on October 15, 2012 to holders of record on September 28, 2012.
Financial results for the third quarter 2012 can also be obtained at http://www.lincolnelectric.com/InvestorNews.
A conference call to discuss the third quarter 2012 financial results is scheduled for today, Wednesday, October 31, 2012, at 10:00 a.m., Eastern Time. An audio webcast of the call is accessible through the Company’s website at http://www.lincolnelectric.com/InvestorWebcasts/.
- more -
Lincoln Electric Reports Third Quarter 2012 Financial Results
Adjusted operating income, adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures that management believes are important to investors to evaluate and compare the Company’s financial performance from period to period. Management uses this information in assessing and evaluating the Company’s underlying operating performance. Non-GAAP financial measures should be read in conjunction with the GAAP financial measures, as non-GAAP measures are a supplement to, and not a replacement for, GAAP financial measures. Please refer to the attached schedule for a reconciliation of non-GAAP financial measures to the related GAAP financial measures.
Lincoln Electric is the world leader in the design, development and manufacture of arc welding products, robotic arc welding systems, plasma and oxyfuel cutting equipment and has a leading global position in the brazing and soldering alloys market. Headquartered in Cleveland, Ohio, Lincoln has 45 manufacturing locations, including operations and joint ventures in 20 countries and a worldwide network of distributors and sales offices covering more than 160 countries. For more information about Lincoln Electric and its products and services, visit the Company’s website at http://www.lincolnelectric.com.
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 and market conditions; the effectiveness of operating initiatives; currency exchange and interest rates; adverse outcome of pending or potential litigation; possible acquisitions; market risks and price fluctuations related to the purchase of commodities and energy; global regulatory complexity; and the possible effects of events beyond our control, such as political unrest, acts of terror and natural disasters, 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.
#103112#
Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)
Consolidated Statements of Income
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Three Months Ended September 30, |
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Fav (Unfav) to Prior Year |
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2012 |
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% of Sales |
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2011 |
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% of Sales |
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$ |
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% |
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Net sales |
|
$ |
697,552 |
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100.0% |
|
$ |
701,624 |
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100.0% |
|
$ |
(4,072 |
) |
(0.6%) |
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Cost of goods sold |
|
484,190 |
|
69.4% |
|
516,172 |
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73.6% |
|
31,982 |
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6.2% |
| |||
|
Gross profit |
|
213,362 |
|
30.6% |
|
185,452 |
|
26.4% |
|
27,910 |
|
15.0% |
| |||
|
Selling, general & administrative expenses |
|
121,602 |
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17.4% |
|
110,629 |
|
15.8% |
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(10,973 |
) |
(9.9%) |
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Rationalization and asset impairment charges (gains) |
|
3,059 |
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0.4% |
|
— |
|
— |
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(3,059 |
) |
(100.0%) |
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Operating income |
|
88,701 |
|
12.7% |
|
74,823 |
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10.7% |
|
13,878 |
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18.5% |
| |||
|
Interest income |
|
916 |
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0.1% |
|
1,167 |
|
0.2% |
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(251 |
) |
(21.5%) |
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Equity earnings in affiliates |
|
1,566 |
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0.2% |
|
1,488 |
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0.2% |
|
78 |
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5.2% |
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|
Other income |
|
746 |
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0.1% |
|
147 |
|
— |
|
599 |
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407.5% |
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Interest expense |
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(1,040 |
) |
(0.1%) |
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(1,752 |
) |
(0.2%) |
|
712 |
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40.6% |
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Income before income taxes |
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90,889 |
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13.0% |
|
75,873 |
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10.8% |
|
15,016 |
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19.8% |
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Income taxes |
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26,153 |
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3.7% |
|
20,515 |
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2.9% |
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(5,638 |
) |
(27.5%) |
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Effective tax rate |
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28.8% |
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27.0% |
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(1.7% |
) |
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Net income including noncontrolling interests |
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64,736 |
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9.3% |
|
55,358 |
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7.9% |
|
9,378 |
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16.9% |
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|
Noncontrolling interests in subsidiaries’ loss |
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(29 |
) |
— |
|
(172 |
) |
— |
|
143 |
|
83.1% |
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|
Net income |
|
$ |
64,765 |
|
9.3% |
|
$ |
55,530 |
|
7.9% |
|
$ |
9,235 |
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16.6% |
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|
|
|
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|
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|
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Basic earnings per share |
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$ |
0.78 |
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$ |
0.66 |
|
|
|
$ |
0.12 |
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18.2% |
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|
Diluted earnings per share |
|
$ |
0.77 |
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|
$ |
0.66 |
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|
$ |
0.11 |
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16.7% |
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Weighted average shares (basic) |
|
82,918 |
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|
83,613 |
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Weighted average shares (diluted) |
|
83,916 |
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|
84,549 |
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|
|
|
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Nine Months Ended September 30, |
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Fav (Unfav) to Prior Year |
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2012 |
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% of Sales |
|
2011 |
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% of Sales |
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$ |
|
% |
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Net sales |
|
$ |
2,168,719 |
|
100.0% |
|
$ |
2,000,096 |
|
100.0% |
|
$ |
168,623 |
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8.4% |
|
|
Cost of goods sold |
|
1,515,095 |
|
69.9% |
|
1,457,702 |
|
72.9% |
|
(57,393 |
) |
(3.9%) |
| |||
|
Gross profit |
|
653,624 |
|
30.1% |
|
542,394 |
|
27.1% |
|
111,230 |
|
20.5% |
| |||
|
Selling, general & administrative expenses |
|
372,931 |
|
17.2% |
|
327,794 |
|
16.4% |
|
(45,137 |
) |
(13.8%) |
| |||
|
Rationalization and asset impairment charges (gains) |
|
4,317 |
|
0.2% |
|
282 |
|
— |
|
(4,035 |
) |
(1430.9%) |
| |||
|
Operating income |
|
276,376 |
|
12.7% |
|
214,318 |
|
10.7% |
|
62,058 |
|
29.0% |
| |||
|
Interest income |
|
2,648 |
|
0.1% |
|
2,436 |
|
0.1% |
|
212 |
|
8.7% |
| |||
|
Equity earnings in affiliates |
|
4,264 |
|
0.2% |
|
4,033 |
|
0.2% |
|
231 |
|
5.7% |
| |||
|
Other income |
|
2,015 |
|
0.1% |
|
2,154 |
|
0.1% |
|
(139 |
) |
(6.5%) |
| |||
|
Interest expense |
|
(3,338 |
) |
(0.2%) |
|
(5,037 |
) |
(0.3%) |
|
1,699 |
|
33.7% |
| |||
|
Income before income taxes |
|
281,965 |
|
13.0% |
|
217,904 |
|
10.9% |
|
64,061 |
|
29.4% |
| |||
|
Income taxes |
|
86,715 |
|
4.0% |
|
58,582 |
|
2.9% |
|
(28,133 |
) |
(48.0%) |
| |||
|
Effective tax rate |
|
30.8% |
|
|
|
26.9% |
|
|
|
(3.9% |
) |
|
| |||
|
Net income including noncontrolling interests |
|
195,250 |
|
9.0% |
|
159,322 |
|
8.0% |
|
35,928 |
|
22.6% |
| |||
|
Noncontrolling interests in subsidiaries’ loss |
|
(77 |
) |
— |
|
(131 |
) |
— |
|
54 |
|
41.2% |
| |||
|
Net income |
|
$ |
195,327 |
|
9.0% |
|
$ |
159,453 |
|
8.0% |
|
$ |
35,874 |
|
22.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
Basic earnings per share |
|
$ |
2.35 |
|
|
|
$ |
1.90 |
|
|
|
$ |
0.45 |
|
23.7% |
|
|
Diluted earnings per share |
|
$ |
2.32 |
|
|
|
$ |
1.88 |
|
|
|
$ |
0.44 |
|
23.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
Weighted average shares (basic) |
|
83,233 |
|
|
|
83,781 |
|
|
|
|
|
|
| |||
|
Weighted average shares (diluted) |
|
84,326 |
|
|
|
84,826 |
|
|
|
|
|
|
| |||
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, |
| ||||||||
|
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
Operating income as reported |
|
$ |
88,701 |
|
$ |
74,823 |
|
$ |
276,376 |
|
$ |
214,318 |
|
|
Special items (pre-tax): |
|
|
|
|
|
|
|
|
| ||||
|
Rationalization and asset impairment charges (gains) (1) |
|
3,059 |
|
— |
|
4,317 |
|
282 |
| ||||
|
Venezuelan statutory severance obligation (2) |
|
— |
|
— |
|
1,381 |
|
— |
| ||||
|
Adjusted operating income (4) |
|
$ |
91,760 |
|
$ |
74,823 |
|
$ |
282,074 |
|
$ |
214,600 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net income as reported |
|
$ |
64,765 |
|
$ |
55,530 |
|
$ |
195,327 |
|
$ |
159,453 |
|
|
Special items (after-tax): |
|
|
|
|
|
|
|
|
| ||||
|
Rationalization and asset impairment charges (gains) (1) |
|
2,704 |
|
— |
|
3,619 |
|
237 |
| ||||
|
Venezuelan statutory severance obligation (2) |
|
— |
|
— |
|
906 |
|
— |
| ||||
|
Adjustment for tax audit settlements (3) |
|
— |
|
— |
|
— |
|
(4,844 |
) | ||||
|
Adjusted net income (4) |
|
$ |
67,469 |
|
$ |
55,530 |
|
$ |
199,852 |
|
$ |
154,846 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Diluted earnings per share as reported |
|
$ |
0.77 |
|
$ |
0.66 |
|
$ |
2.32 |
|
$ |
1.88 |
|
|
Special items |
|
0.03 |
|
— |
|
0.05 |
|
(0.05 |
) | ||||
|
Adjusted diluted earnings per share (4) |
|
$ |
0.80 |
|
$ |
0.66 |
|
$ |
2.37 |
|
$ |
1.83 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted average shares (diluted) |
|
83,916 |
|
84,549 |
|
84,326 |
|
84,826 |
| ||||
|
(1) |
The three and nine month periods ended September 30, 2012 include net charges associated with severance, impairment and other costs from the consolidation of manufacturing operations initiated in 2012 partially offset by gains related to the sale of assets at rationalized operations. The nine month period ended Septembr 30, 2011 includes charges associated with severance and other costs from the consolidation of manufacturing operations initiated in 2009 partially offset by gains related to the sale of assets at rationalized operations. |
|
|
|
|
(2) |
Represents an unfavorable adjustment due to a change in Venezuelan labor law which provides for increased employee severance obligations. |
|
|
|
|
(3) |
Represents a favorable adjustment for tax audit settlements. |
|
|
|
|
(4) |
Adjusted operating income, Adjusted net income and Adjusted diluted earnings per share are non-GAAP financial measures that management believes are important to investors to evaluate and compare the Company’s financial performance from period to period. Management uses this information in assessing and evaluating the Company’s underlying operating performance. Non-GAAP financial measures should be read in conjunction with the GAAP financial measures, as non-GAAP measures are a supplement to, and not a replacement for, GAAP financial measures. |
Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands)
(Unaudited)
Balance Sheet Highlights
|
Selected Consolidated Balance Sheet Data |
|
September 30, |
|
December 31, |
| ||
|
|
|
|
|
|
| ||
|
Cash and cash equivalents |
|
$ |
340,675 |
|
$ |
361,101 |
|
|
Total current assets |
|
1,239,631 |
|
1,219,270 |
| ||
|
Property, plant and equipment, net |
|
479,024 |
|
470,451 |
| ||
|
Total assets |
|
2,091,522 |
|
1,976,776 |
| ||
|
|
|
|
|
|
| ||
|
Total current liabilities |
|
492,702 |
|
471,042 |
| ||
|
Short-term debt (1) |
|
19,494 |
|
101,418 |
| ||
|
Long-term debt |
|
1,680 |
|
1,960 |
| ||
|
Total equity |
|
1,336,191 |
|
1,193,242 |
| ||
|
|
|
|
|
|
| ||
|
Net Operating Working Capital |
|
September 30, 2012 |
|
December 31, |
| ||
|
|
|
|
|
|
| ||
|
Accounts receivable |
|
$ |
391,360 |
|
$ |
386,197 |
|
|
Inventory |
|
390,948 |
|
373,238 |
| ||
|
Trade accounts payable |
|
186,545 |
|
176,312 |
| ||
|
Net operating working capital |
|
$ |
595,763 |
|
$ |
583,123 |
|
|
|
|
|
|
|
| ||
|
Net operating working capital to net sales (2) |
|
21.4% |
|
21.0% |
| ||
|
|
|
|
|
|
| ||
|
Invested Capital |
|
September 30, 2012 |
|
December 31, |
| ||
|
|
|
|
|
|
| ||
|
Short-term debt (1) |
|
$ |
19,494 |
|
$ |
101,418 |
|
|
Long-term debt |
|
1,680 |
|
1,960 |
| ||
|
Total debt |
|
21,174 |
|
103,378 |
| ||
|
Total equity |
|
1,336,191 |
|
1,193,242 |
| ||
|
Invested capital |
|
$ |
1,357,365 |
|
$ |
1,296,620 |
|
|
|
|
|
|
|
| ||
|
Total debt / invested capital |
|
1.6% |
|
8.0% |
| ||
|
Return on invested capital (3) |
|
18.7% |
|
16.9% |
| ||
|
(1) |
Includes current portion of long-term debt. |
|
|
|
|
(2) |
Net operating working capital to net sales is defined as net operating working capital divided by annualized rolling three months of sales. |
|
|
|
|
(3) |
Return on invested capital is defined as rolling 12 months of earnings excluding tax-effected interest divided by invested capital. |
Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)
Consolidated Statements of Cash Flows
|
|
|
Three Months Ended September 30, |
| ||||
|
|
|
2012 |
|
2011 |
| ||
|
OPERATING ACTIVITIES: |
|
|
|
|
| ||
|
Net income |
|
$ |
64,765 |
|
$ |
55,530 |
|
|
Noncontrolling interests in subsidiaries’ loss |
|
(29 |
) |
(172 |
) | ||
|
Net income including noncontrolling interests |
|
64,736 |
|
55,358 |
| ||
|
Adjustments to reconcile Net income including noncontrolling interests to Net cash provided by operating activities: |
|
|
|
|
| ||
|
Rationalization and asset impairment charges |
|
357 |
|
— |
| ||
|
Depreciation and amortization |
|
16,435 |
|
15,740 |
| ||
|
Equity earnings in affiliates, net |
|
(738 |
) |
(758 |
) | ||
|
Other non-cash items, net |
|
(6,515 |
) |
3,624 |
| ||
|
Changes in operating assets and liabilities, net of effects from acquisitions: |
|
|
|
|
| ||
|
Decrease in accounts receivable |
|
35,299 |
|
3,436 |
| ||
|
Decrease in inventories |
|
13,870 |
|
13,000 |
| ||
|
Decrease in trade accounts payable |
|
(17,565 |
) |
(31,049 |
) | ||
|
Decrease in accrued pensions |
|
(17,615 |
) |
(13,946 |
) | ||
|
Net change in other current assets and liabilities |
|
50,929 |
|
39,699 |
| ||
|
Net change in other long-term assets and liabilities |
|
(56,738 |
) |
(302 |
) | ||
|
NET CASH PROVIDED BY OPERATING ACTIVITIES |
|
82,455 |
|
84,802 |
| ||
|
|
|
|
|
|
| ||
|
INVESTING ACTIVITIES: |
|
|
|
|
| ||
|
Capital expenditures |
|
(13,060 |
) |
(21,380 |
) | ||
|
Acquisition of businesses, net of cash acquired |
|
(3,516 |
) |
(44,459 |
) | ||
|
Proceeds from sale of property, plant and equipment |
|
200 |
|
154 |
| ||
|
NET CASH USED BY INVESTING ACTIVITIES |
|
(16,376 |
) |
(65,685 |
) | ||
|
|
|
|
|
|
| ||
|
FINANCING ACTIVITIES: |
|
|
|
|
| ||
|
Net change in borrowings |
|
(2,632 |
) |
(1,392 |
) | ||
|
Proceeds from exercise of stock options |
|
483 |
|
1,012 |
| ||
|
Tax benefit from exercise of stock options |
|
140 |
|
300 |
| ||
|
Purchase of shares for treasury |
|
(20,017 |
) |
(14,321 |
) | ||
|
Cash dividends paid to shareholders |
|
(14,147 |
) |
(12,996 |
) | ||
|
NET CASH USED BY FINANCING ACTIVITIES |
|
(36,173 |
) |
(27,397 |
) | ||
|
|
|
|
|
|
| ||
|
Effect of exchange rate changes on Cash and cash equivalents |
|
2,806 |
|
(8,175 |
) | ||
|
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
32,712 |
|
(16,455 |
) | ||
|
Cash and cash equivalents at beginning of period |
|
307,963 |
|
337,915 |
| ||
|
Cash and cash equivalents at end of period |
|
$ |
340,675 |
|
$ |
321,460 |
|
|
|
|
|
|
|
| ||
|
Cash dividends paid per share |
|
$ |
0.17 |
|
$ |
0.155 |
|
Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)
Consolidated Statements of Cash Flows
|
|
|
Nine Months Ended September 30, |
| ||||
|
|
|
2012 |
|
2011 |
| ||
|
OPERATING ACTIVITIES: |
|
|
|
|
| ||
|
Net income |
|
$ |
195,327 |
|
$ |
159,453 |
|
|
Noncontrolling interests in subsidiaries’ loss |
|
(77 |
) |
(131 |
) | ||
|
Net income including noncontrolling interests |
|
195,250 |
|
159,322 |
| ||
|
Adjustments to reconcile Net income including noncontrolling interests to Net cash provided by operating activities: |
|
|
|
|
| ||
|
Rationalization and asset impairment charges |
|
357 |
|
23 |
| ||
|
Depreciation and amortization |
|
48,220 |
|
47,089 |
| ||
|
Equity earnings in affiliates, net |
|
(1,449 |
) |
(1,316 |
) | ||
|
Other non-cash items, net |
|
29,159 |
|
28,056 |
| ||
|
Changes in operating assets and liabilities, net of effects from acquisitions: |
|
|
|
|
| ||
|
Decrease (increase) in accounts receivable |
|
13,750 |
|
(72,287 |
) | ||
|
Increase in inventories |
|
(6,832 |
) |
(98,727 |
) | ||
|
(Decrease) increase in trade accounts payable |
|
(1,182 |
) |
34,988 |
| ||
|
Decrease in accrued pensions |
|
(54,472 |
) |
(30,490 |
) | ||
|
Net change in other current assets and liabilities |
|
73,413 |
|
67,084 |
| ||
|
Net change in other long-term assets and liabilities |
|
(52,873 |
) |
(3,364 |
) | ||
|
NET CASH PROVIDED BY OPERATING ACTIVITIES |
|
243,341 |
|
130,378 |
| ||
|
|
|
|
|
|
| ||
|
INVESTING ACTIVITIES: |
|
|
|
|
| ||
|
Capital expenditures |
|
(39,307 |
) |
(50,750 |
) | ||
|
Acquisition of businesses, net of cash acquired |
|
(52,851 |
) |
(62,340 |
) | ||
|
Proceeds from sale of property, plant and equipment |
|
538 |
|
1,003 |
| ||
|
Other investing activities |
|
(1,541 |
) |
— |
| ||
|
NET CASH USED BY INVESTING ACTIVITIES |
|
(93,161 |
) |
(112,087 |
) | ||
|
|
|
|
|
|
| ||
|
FINANCING ACTIVITIES: |
|
|
|
|
| ||
|
Net change in borrowings |
|
(88,001 |
) |
(2,878 |
) | ||
|
Proceeds from exercise of stock options |
|
12,695 |
|
7,211 |
| ||
|
Tax benefit from exercise of stock options |
|
5,594 |
|
2,327 |
| ||
|
Purchase of shares for treasury |
|
(60,155 |
) |
(27,630 |
) | ||
|
Cash dividends paid to shareholders |
|
(42,510 |
) |
(39,001 |
) | ||
|
NET CASH USED BY FINANCING ACTIVITIES |
|
(172,377 |
) |
(59,971 |
) | ||
|
|
|
|
|
|
| ||
|
Effect of exchange rate changes on Cash and cash equivalents |
|
1,771 |
|
(3,053 |
) | ||
|
DECREASE IN CASH AND CASH EQUIVALENTS |
|
(20,426 |
) |
(44,733 |
) | ||
|
Cash and cash equivalents at beginning of period |
|
361,101 |
|
366,193 |
| ||
|
Cash and cash equivalents at end of period |
|
$ |
340,675 |
|
$ |
321,460 |
|
|
|
|
|
|
|
| ||
|
Cash dividends paid per share |
|
$ |
0.51 |
|
$ |
0.465 |
|
Lincoln Electric Holdings, Inc.
Segment Highlights
(In thousands)
(Unaudited)
|
|
|
North |
|
Europe |
|
Asia Pacific |
|
South |
|
The Harris |
|
Corporate / |
|
Consolidated |
| |||||||
|
Three months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Net sales |
|
$ |
390,327 |
|
$ |
104,480 |
|
$ |
76,263 |
|
$ |
44,545 |
|
$ |
81,937 |
|
$ |
— |
|
$ |
697,552 |
|
|
Inter-segment sales |
|
28,186 |
|
3,261 |
|
2,748 |
|
27 |
|
1,869 |
|
(36,091 |
) |
— |
| |||||||
|
Total |
|
$ |
418,513 |
|
$ |
107,741 |
|
$ |
79,011 |
|
$ |
44,572 |
|
$ |
83,806 |
|
$ |
(36,091 |
) |
$ |
697,552 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
EBIT (1) |
|
$ |
70,320 |
|
$ |
6,641 |
|
$ |
1,346 |
|
$ |
7,587 |
|
$ |
7,739 |
|
$ |
(2,620 |
) |
$ |
91,013 |
|
|
As a percent of total sales |
|
16.8% |
|
6.2% |
|
1.7% |
|
17.0% |
|
9.2% |
|
|
|
13.0% |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Special items charge (gain) (2) |
|
$ |
477 |
|
$ |
1,874 |
|
$ |
708 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
3,059 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
EBIT, as adjusted (4) |
|
$ |
70,797 |
|
$ |
8,515 |
|
$ |
2,054 |
|
$ |
7,587 |
|
$ |
7,739 |
|
$ |
(2,620 |
) |
$ |
94,072 |
|
|
As a percent of total sales |
|
16.9% |
|
7.9% |
|
2.6% |
|
17.0% |
|
9.2% |
|
|
|
13.5% |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Three months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Net sales |
|
$ |
345,182 |
|
$ |
128,294 |
|
$ |
97,790 |
|
$ |
44,169 |
|
$ |
86,189 |
|
$ |
— |
|
$ |
701,624 |
|
|
Inter-segment sales |
|
33,070 |
|
3,238 |
|
4,111 |
|
254 |
|
2,485 |
|
(43,158 |
) |
— |
| |||||||
|
Total |
|
$ |
378,252 |
|
$ |
131,532 |
|
$ |
101,901 |
|
$ |
44,423 |
|
$ |
88,674 |
|
$ |
(43,158 |
) |
$ |
701,624 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
EBIT (1) |
|
$ |
53,436 |
|
$ |
10,282 |
|
$ |
1,899 |
|
$ |
4,025 |
|
$ |
5,010 |
|
$ |
1,806 |
|
$ |
76,458 |
|
|
As a percent of total sales |
|
14.1% |
|
7.8% |
|
1.9% |
|
9.1% |
|
5.6% |
|
|
|
10.9% |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Special items charge (gain) (3) |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
EBIT, as adjusted (4) |
|
$ |
53,436 |
|
$ |
10,282 |
|
$ |
1,899 |
|
$ |
4,025 |
|
$ |
5,010 |
|
$ |
1,806 |
|
$ |
76,458 |
|
|
As a percent of total sales |
|
14.1% |
|
7.8% |
|
1.9% |
|
9.1% |
|
5.6% |
|
|
|
10.9% |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Nine months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Net sales |
|
$ |
1,187,879 |
|
$ |
344,720 |
|
$ |
254,259 |
|
$ |
121,552 |
|
$ |
260,309 |
|
$ |
— |
|
$ |
2,168,719 |
|
|
Inter-segment sales |
|
101,386 |
|
12,178 |
|
11,641 |
|
38 |
|
6,605 |
|
(131,848 |
) |
— |
| |||||||
|
Total |
|
$ |
1,289,265 |
|
$ |
356,898 |
|
$ |
265,900 |
|
$ |
121,590 |
|
$ |
266,914 |
|
$ |
(131,848 |
) |
$ |
2,168,719 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
EBIT (1) |
|
$ |
216,318 |
|
$ |
29,851 |
|
$ |
7,344 |
|
$ |
12,091 |
|
$ |
23,933 |
|
$ |
(6,882 |
) |
$ |
282,655 |
|
|
As a percent of total sales |
|
16.8% |
|
8.4% |
|
2.8% |
|
9.9% |
|
9.0% |
|
|
|
13.0% |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Special items charge (gain) (2) |
|
$ |
554 |
|
$ |
2,466 |
|
$ |
1,297 |
|
$ |
1,381 |
|
$ |
— |
|
$ |
— |
|
$ |
5,698 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
EBIT, as adjusted (4) |
|
$ |
216,872 |
|
$ |
32,317 |
|
$ |
8,641 |
|
$ |
13,472 |
|
$ |
23,933 |
|
$ |
(6,882 |
) |
$ |
288,353 |
|
|
As a percent of total sales |
|
16.8% |
|
9.1% |
|
3.2% |
|
11.1% |
|
9.0% |
|
|
|
13.3% |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Nine months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Net sales |
|
$ |
947,594 |
|
$ |
381,750 |
|
$ |
288,072 |
|
$ |
116,011 |
|
$ |
266,669 |
|
$ |
— |
|
$ |
2,000,096 |
|
|
Inter-segment sales |
|
105,419 |
|
13,375 |
|
10,721 |
|
374 |
|
6,735 |
|
(136,624 |
) |
— |
| |||||||
|
Total |
|
$ |
1,053,013 |
|
$ |
395,125 |
|
$ |
298,793 |
|
$ |
116,385 |
|
$ |
273,404 |
|
$ |
(136,624 |
) |
$ |
2,000,096 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
EBIT (1) |
|
$ |
158,192 |
|
$ |
26,875 |
|
$ |
3,391 |
|
$ |
9,600 |
|
$ |
20,750 |
|
$ |
1,697 |
|
$ |
220,505 |
|
|
As a percent of total sales |
|
15.0% |
|
6.8% |
|
1.1% |
|
8.2% |
|
7.6% |
|
|
|
11.0% |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Special items charge (gain) (3) |
|
$ |
— |
|
$ |
392 |
|
$ |
(110 |
) |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
282 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
EBIT, as adjusted (4) |
|
$ |
158,192 |
|
$ |
27,267 |
|
$ |
3,281 |
|
$ |
9,600 |
|
$ |
20,750 |
|
$ |
1,697 |
|
$ |
220,787 |
|
|
As a percent of total sales |
|
15.0% |
|
6.9% |
|
1.1% |
|
8.2% |
|
7.6% |
|
|
|
11.0% |
| |||||||
|
(1) |
EBIT is defined as Operating income plus Equity earnings in affiliates and Other income. |
|
|
|
|
(2) |
Special items in the three and nine month periods ended September 30, 2012 include rationalization and asset impairment charges (gains). Special items in the nine months ended September 30, 2012 also include an unfavorable adjustment due to a change in Venezuelan labor law which provides for increased employee severance obligations. |
|
|
|
|
(3) |
Special items include rationalization and asset impairment charges (gains). |
|
|
|
|
(4) |
The primary profit measure used by management to assess segment performance is EBIT, as adjusted. EBIT for each operating segment is adjusted for special items to derive EBIT, as adjusted. |
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 |
|
Volume |
|
Acquisitions |
|
Price |
|
Foreign |
|
Net Sales |
| ||||||
|
Operating Segments |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
North America Welding |
|
$ |
345,182 |
|
$ |
9,479 |
|
$ |
26,804 |
|
$ |
9,267 |
|
$ |
(405 |
) |
$ |
390,327 |
|
|
Europe Welding |
|
128,294 |
|
(11,366 |
) |
— |
|
(630 |
) |
(11,818 |
) |
104,480 |
| ||||||
|
Asia Pacific Welding |
|
97,790 |
|
(18,989 |
) |
— |
|
(1,035 |
) |
(1,503 |
) |
76,263 |
| ||||||
|
South America Welding |
|
44,169 |
|
(1,237 |
) |
— |
|
5,114 |
|
(3,501 |
) |
44,545 |
| ||||||
|
The Harris Products Group |
|
86,189 |
|
6,440 |
|
— |
|
(7,220 |
) |
(3,472 |
) |
81,937 |
| ||||||
|
Consolidated |
|
$ |
701,624 |
|
$ |
(15,673 |
) |
$ |
26,804 |
|
$ |
5,496 |
|
$ |
(20,699 |
) |
$ |
697,552 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
North America Welding |
|
|
|
2.7% |
|
7.8% |
|
2.7% |
|
(0.1%) |
|
13.1% |
| ||||||
|
Europe Welding |
|
|
|
(8.9%) |
|
— |
|
(0.5%) |
|
(9.2%) |
|
(18.6%) |
| ||||||
|
Asia Pacific Welding |
|
|
|
(19.4%) |
|
— |
|
(1.1%) |
|
(1.5%) |
|
(22.0%) |
| ||||||
|
South America Welding |
|
|
|
(2.8%) |
|
— |
|
11.6% |
|
(7.9%) |
|
0.9% |
| ||||||
|
The Harris Products Group |
|
|
|
7.5% |
|
— |
|
(8.4%) |
|
(4.0%) |
|
(4.9%) |
| ||||||
|
Consolidated |
|
|
|
(2.2%) |
|
3.8% |
|
0.8% |
|
(3.0%) |
|
(0.6%) |
| ||||||
Nine Months Ended September 30th Change in Net Sales by Segment
|
|
|
|
|
Change in Net Sales due to: |
|
|
| ||||||||||||
|
|
|
Net Sales |
|
Volume |
|
Acquisitions |
|
Price |
|
Foreign |
|
Net Sales |
| ||||||
|
Operating Segments |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
North America Welding |
|
$ |
947,594 |
|
$ |
115,620 |
|
$ |
98,361 |
|
$ |
31,052 |
|
$ |
(4,748 |
) |
$ |
1,187,879 |
|
|
Europe Welding |
|
381,750 |
|
(20,247 |
) |
8,322 |
|
7,126 |
|
(32,231 |
) |
344,720 |
| ||||||
|
Asia Pacific Welding |
|
288,072 |
|
(36,151 |
) |
— |
|
2,075 |
|
263 |
|
254,259 |
| ||||||
|
South America Welding |
|
116,011 |
|
416 |
|
— |
|
12,690 |
|
(7,565 |
) |
121,552 |
| ||||||
|
The Harris Products Group |
|
266,669 |
|
15,741 |
|
— |
|
(14,131 |
) |
(7,970 |
) |
260,309 |
| ||||||
|
Consolidated |
|
$ |
2,000,096 |
|
$ |
75,379 |
|
$ |
106,683 |
|
$ |
38,812 |
|
$ |
(52,251 |
) |
$ |
2,168,719 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
North America Welding |
|
|
|
12.2% |
|
10.4% |
|
3.3% |
|
(0.5%) |
|
25.4% |
| ||||||
|
Europe Welding |
|
|
|
(5.3%) |
|
2.2% |
|
1.9% |
|
(8.4%) |
|
(9.7%) |
| ||||||
|
Asia Pacific Welding |
|
|
|
(12.5%) |
|
— |
|
0.7% |
|
0.1% |
|
(11.7%) |
| ||||||
|
South America Welding |
|
|
|
0.4% |
|
— |
|
10.9% |
|
(6.5%) |
|
4.8% |
| ||||||
|
The Harris Products Group |
|
|
|
5.9% |
|
— |
|
(5.3%) |
|
(3.0%) |
|
(2.4%) |
| ||||||
|
Consolidated |
|
|
|
3.8% |
|
5.3% |
|
1.9% |
|
(2.6%) |
|
8.4% |
| ||||||