Lincoln Electric Reports Third Quarter 2022 Results


 
Third Quarter 2022 Highlights
  • Net sales increase 16% to record $935.2 million on 21% higher organic sales
  • Operating income margin of 15.2% and Adjusted operating income margin of 16.4%
  • EPS increases 253% to record $1.87; Adjusted EPS increases 31% to record $2.04
  • ROIC increases 930 basis points to 26.8%; Adjusted ROIC increases 590 basis points to 28.7%
  • Returned $59 million in the quarter and $255 million year-to-date to shareholders through dividends and share repurchases

CLEVELAND, Oct. 27, 2022 (GLOBE NEWSWIRE) -- Lincoln Electric Holdings, Inc. (the “Company”) (Nasdaq: LECO) today reported third quarter 2022 net income of $109.2 million, or diluted earnings per share (EPS) of $1.87 which includes special item after-tax net charges of $10.3 million or $0.17 EPS. This compares with prior year period net income of $31.8 million, or $0.53 EPS, which included special item after-tax charges of $62.0 million, or $1.03 EPS. Excluding these items, third quarter 2022 Adjusted net income was $119.6 million, or $2.04 Adjusted EPS. This compares with Adjusted net income of $93.8 million, or $1.56 Adjusted EPS, in the prior year period.

Third quarter 2022 sales increased 16.0% to $935.2 million from a 21.3% increase in organic sales and a 1.3% benefit from acquisitions, partially offset by 6.6% unfavorable foreign exchange. Operating income for the third quarter 2022 was $142.1 million, or 15.2% of sales. This compares with operating income of $115.6 million, or 14.3% of sales, in the prior year period. Excluding special items, Adjusted operating income was $153.2 million, or 16.4% of sales, as compared with $122.7 million, or 15.2% of sales, in the prior year period.

“We achieved record third quarter sales, profitability, earnings and returns with outperformance led by Americas Welding and automation, stated Christopher L. Mapes, Lincoln’s Chairman, President and Chief Executive Officer. “In the third quarter we returned to 2019 volume levels with considerably superior returns, which demonstrates the strong execution of our Higher Standard 2025 Strategy initiatives under challenging operating conditions.  We generated solid cash flows and cash conversion in the quarter, which further strengthens our balance sheet profile as we invest in growth and increase returns to shareholders through the cycle.” Mapes continued, “We are also excited about our recently announced definitive agreement to acquire Fori Automation, Inc., which would accelerate our automation growth strategy with a combined annual revenue run rate of over $850 million and adds complementary automation engineering capabilities and an expanded geographic footprint to further service customers’ capital investment needs.”     

Nine Months 2022 Summary

Net income for the nine months ended September 30, 2022 was $363.1 million, or $6.17 EPS. This compares with $202.0 million, or $3.36 EPS, in the comparable 2021 period. Reported EPS includes special item after-tax net charges of $9.4 million or $0.16 EPS, as compared with special item after-tax net charges of $75.1 million, or $1.25 EPS in the prior year period. Excluding these items, adjusted net income for the nine months ended September 30, 2022 increased 34.4% to $372.4 million, or $6.33 EPS, compared with $277.1 million, or $4.61 EPS, in the comparable 2021 period.

Sales increased 18.4% to $2.8 billion in the nine months ended September 30, 2022 from a 21.3% increase in organic sales and a 2.9% benefit from acquisitions, partially offset by 5.7% unfavorable foreign exchange. Operating income for the nine months ended September 30, 2022 was $470.8 million, or 16.6% of sales. This compares with operating income of $341.3 million, or 14.3% of sales, in the comparable 2021 period. Excluding special items, adjusted operating income was $484.4 million, or 17.1% of sales, as compared with $357.1 million, or 14.9% of sales, in the comparable 2021 period.

Dividend

The Company’s Board of Directors declared a 14.3% increase in the quarterly cash dividend, from $0.56 per share to $0.64 per share, or $2.56 per share on an annual basis. The declared quarterly cash dividend of $0.64 per share is payable January 14, 2023 to shareholders of record as of December 31, 2022.

Other Matters

On October 14, 2022, the Company entered into a definitive agreement to acquire Fori Automation, Inc. (the “contemplated acquisition”), a privately held, leading automation engineering firm specializing in the design and manufacture of complex, multi-armed automated welding systems, assembly systems, material handling solutions, large-scale, industrial guidance vehicles (AGVs) and end of line testing systems.  The definitive agreement provides for a cash purchase price of $427 million, subject to a customary working capital adjustment. The Company intends to fund the transaction with cash on hand and arranged credit. The contemplated acquisition is subject to regulatory approval and other customary closing conditions and is expected to close in the fourth quarter of 2022.

Webcast Information

A conference call to discuss third quarter 2022 financial results will be webcast live today, October 27, 2022, at 10:00 a.m., Eastern Time. Those interested in participating via webcast in listen-only mode can access the event here or on the Company's Investor Relations home page at https://ir.lincolnelectric.com. For participants who would like to participate via telephone, please register here to receive the dial-in number along with a unique PIN number that is required to access the call. A replay of the earnings call will be available via webcast on the Company's website.

About Lincoln Electric

Lincoln Electric is the world leader in the engineering, design, and manufacturing of advanced arc welding solutions, automated joining, assembly and cutting systems, plasma and oxy-fuel cutting equipment, and has a leading global position in brazing and soldering alloys. Lincoln is recognized as the Welding Expert™ for its leading materials science, software development, automation engineering, and application expertise, which advance customers’ fabrication capabilities to help them build a better world. Headquartered in Cleveland, Ohio, Lincoln has 56 manufacturing locations in 19 countries and a worldwide network of distributors and sales offices serving customers in over 160 countries. For more information about Lincoln Electric and its products and services, visit the Company’s website at https://www.lincolnelectric.com.

Non-GAAP Information

Adjusted operating income, Adjusted net income, Adjusted EBIT, Adjusted effective tax rate, Adjusted diluted earnings per share (“Adjusted EPS”), Organic sales, Cash conversion, Adjusted net operating profit after taxes and Adjusted return on invested capital (“Adjusted ROIC”) are non-GAAP financial measures. Management uses non-GAAP measures to assess the Company's operating performance by excluding certain disclosed special items that management believes are not representative of the Company's core business. Management believes that excluding these special items enables them to make better period-over-period comparisons and benchmark the Company's operational performance against other companies in its industry more meaningfully. Furthermore, management believes that non-GAAP financial measures provide investors with meaningful information that provides a more complete understanding of Company operating results and enables investors to analyze financial and business trends more thoroughly. Non-GAAP financial measures should not be viewed in isolation, are not a substitute for GAAP measures and have limitations including, but not limited to, their usefulness as comparative measures as other companies may define their non-GAAP measures differently.

Forward-Looking Statements

The Company’s expectations and beliefs concerning the future contained in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements reflect management’s current expectations and involve a number of risks and uncertainties.  Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “guidance” or words of similar meaning.  Actual results may differ materially from such statements due to a variety of factors that could adversely affect the Company’s operating results.  The factors include, but are not limited to: general economic, financial and market conditions; the effectiveness of 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, including the current coronavirus disease ("COVID-19") pandemic, 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, 2021 and on Form 10-Q for the quarter ended March 31, 2022.


Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)

Consolidated Statements of Income

                  
                Fav (Unfav) to 
  Three Months Ended September 30,  Prior Year 
  2022 % of Sales    2021     % of Sales $ % 
Net sales $935,240  100.0%$806,454  100.0 %$128,786  16.0 %
Cost of goods sold  625,722  66.9% 538,282  66.7 % (87,440) (16.2)%
Gross profit  309,518  33.1% 268,172  33.3 % 41,346  15.4 %
Selling, general & administrative expenses  159,045  17.0% 149,118  18.5 % (9,927) (6.7)%
Rationalization and asset impairment charges  8,364  0.9% 3,484  0.4 % (4,880) (140.1)%
Operating income  142,109  15.2% 115,570  14.3 % 26,539  23.0 %
Interest expense, net  8,210  0.9% 5,714  0.7 % (2,496) (43.7)%
Other income (expense)  3,588  0.4% (71,441) (8.9)% 75,029  105.0 %
Income before income taxes  137,487  14.7% 38,415  4.8 % 99,072  257.9 %
Income taxes  28,262  3.0% 6,658  0.8 % (21,604) (324.5)%
Effective tax rate  20.6%    17.3 %   (3.3)%  
Net income $109,225  11.7%$31,757  3.9 %$77,468  243.9 %
                  
Basic earnings per share $1.89    $0.54    $1.35  250.0 %
Diluted earnings per share $1.87    $0.53    $1.34  252.8 %
Weighted average shares (basic)  57,823     59,289         
Weighted average shares (diluted)  58,526     60,055         


                  
                Fav (Unfav) to 
  Nine Months Ended September 30,  Prior Year 
  2022 % of Sales    2021  % of Sales    $ % 
Net sales $2,830,277  100.0%$2,389,929  100.0 %$440,348  18.4 %
Cost of goods sold  1,857,501  65.6% 1,593,981  66.7 % (263,520) (16.5)%
Gross profit  972,776  34.4% 795,948  33.3 % 176,828  22.2 %
Selling, general & administrative expenses  492,523  17.4% 446,351  18.7 % (46,172) (10.3)%
Rationalization and asset impairment charges  9,405  0.3% 8,277  0.3 % (1,128) (13.6)%
Operating income  470,848  16.6% 341,320  14.3 % 129,528  37.9 %
Interest expense, net  20,867  0.7% 16,736  0.7 % (4,131) (24.7)%
Other income (expense)  7,088  0.3% (71,155) (3.0)% 78,243  110.0 %
Income before income taxes  457,069  16.1% 253,429  10.6 % 203,640  80.4 %
Income taxes  93,991  3.3% 51,259  2.1 % (42,732) (83.4)%
Effective tax rate  20.6%    20.2 %   (0.4)%  
Net income including non-controlling interests  363,078  12.8% 202,170  8.5 % 160,908  79.6 %
Non-controlling interests in subsidiaries’ income (loss)      131     (131) (100.0)%
Net income $363,078  12.8%$202,039  8.5 %$161,039  79.7 %
                  
Basic earnings per share $6.24    $3.40    $2.84  83.5 %
Diluted earnings per share $6.17    $3.36    $2.81  83.6 %
Weighted average shares (basic)  58,148     59,465         
Weighted average shares (diluted)  58,815     60,168         



Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands)
(Unaudited)

Balance Sheet Highlights

        
Selected Consolidated Balance Sheet Data    September 30, 2022    December 31, 2021 
Cash and cash equivalents $141,307 $192,958 
Accounts receivable, net  463,106  429,074 
Inventories  632,376  539,919 
Total current assets  1,395,398  1,289,593 
Property, plant and equipment, net  489,961  511,744 
Total assets  2,651,965  2,592,307 
Trade accounts payable  329,890  330,230 
Total current liabilities  820,328  755,905 
Short-term debt (1)  68,375  52,730 
Long-term debt, less current portion  711,250  717,089 
Total equity  924,228  863,909 
        
Operating Working Capital September 30, 2022 December 31, 2021 
Average operating working capital to Net sales (2)  19.5% 16.3%
        
Invested Capital September 30, 2022 December 31, 2021 
Short-term debt (1) $68,375 $52,730 
Long-term debt, less current portion  711,250  717,089 
Total debt  779,625  769,819 
Total equity  924,228  863,909 
Invested capital $1,703,853 $1,633,728 
        
Total debt / invested capital  45.8% 47.1%

(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,  
  2022  2021   2022  2021  
Operating income as reported $142,109  $115,570   $470,848  $341,320  
Special items (pre-tax):              
Rationalization and asset impairment charges (2)  8,364   3,484    9,405   8,277  
Acquisition transaction costs (3)  3,068       3,068   1,923  
Amortization of step up in value of acquired inventories (4)  (353)  3,690    1,106   5,531  
Adjusted operating income (1) $153,188  $122,744   $484,427  $357,051  
As a percent of total sales  16.4 % 15.2 %  17.1 % 14.9 %
               
Net income as reported $109,225  $31,757   $363,078  $202,039  
Special items:              
Rationalization and asset impairment charges (2)  8,364   3,484    9,405   8,277  
Acquisition transaction costs (3)  3,068       3,068   1,923  
Pension charges and other net gains (5)     73,562    (4,273)  80,098  
Amortization of step up in value of acquired inventories (4)  (353)  3,690    1,106   5,531  
Tax effect of Special items (6)  (731)  (18,743)   58   (20,737) 
Adjusted net income (1)  119,573   93,750    372,442   277,131  
Non-controlling interests in subsidiaries’ income (loss)            131  
Interest expense, net  8,210   5,714    20,867   16,736  
Income taxes as reported  28,262   6,658    93,991   51,259  
Tax effect of Special items (6)  731   18,743    (58)  20,737  
Adjusted EBIT (1) $156,776  $124,865   $487,242  $365,994  
               
Effective tax rate as reported  20.6 % 17.3 %  20.6 % 20.2 %
Net special item tax impact  (1.1)% 4.0 %  (0.5)% 0.4 %
Adjusted effective tax rate (1)  19.5 % 21.3 %  20.1 % 20.6 %
               
Diluted earnings per share as reported $1.87  $0.53   $6.17  $3.36  
Special items per share  0.17   1.03    0.16   1.25  
Adjusted diluted earnings per share (1) $2.04  $1.56   $6.33  $4.61  
               
Weighted average shares (diluted)  58,526   60,055    58,815   60,168  

(1) Adjusted operating income, Adjusted net income, Adjusted EBIT, Adjusted effective tax rate and Adjusted diluted earnings per share are non-GAAP financial measures. Refer to Non-GAAP Information section.

(2) 2022 charges are primarily related to non-cash asset impairment charges. 2021 charges are primarily related to severance, gains or losses on the disposal of assets.

(3) Related to the contemplated acquisition and are included in Selling, general & administrative expenses.

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

(5) Pension settlement charges due to lump sum pension payments and other net gains primarily due to the final settlement associated with the termination of a pension plan and are included in Other income (expense).

(6) Includes the net tax impact of Special items recorded during the respective periods. The tax effect of Special items impacting pre-tax income was calculated as the pre-tax amount multiplied by the applicable tax rate. The applicable tax rates reflect the taxable jurisdiction and nature of each Special item.


Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)

Non-GAAP Financial Measures

        
     Twelve Months Ended September 30,  
Return on Invested Capital    2022     2021  
Net income as reported $437,505  $267,117  
Plus: Interest expense (after-tax)  20,732   17,520  
Less: Interest income (after-tax)  1,019   1,193  
Net operating profit after taxes $457,218  $283,444  
Special Items:       
Rationalization and asset impairment charges  10,955   17,729  
Acquisition transaction costs  3,068   1,923  
Pension settlement charges  42,131   81,695  
Amortization of step up in value of acquired inventories  1,379   5,531  
Tax effect of Special items (2)  (26,393)  (21,868) 
Adjusted net operating profit after taxes (1) $488,358  $368,454  
        
Invested Capital September 30, 2022 September 30, 2021 
Short-term debt $68,375  $41,404  
Long-term debt, less current portion  711,250   717,787  
Total debt  779,625   759,191  
Total equity  924,228   857,893  
Invested capital $1,703,853  $1,617,084  
        
Return on invested capital as reported  26.8 % 17.5 %
Adjusted return on invested capital (1)  28.7 % 22.8 %

(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, 
 2022  2021 
OPERATING ACTIVITIES:     
Net income$109,225  $31,757 
Non-controlling interests in subsidiaries’ income (loss)     
Net income including non-controlling interests 109,225   31,757 
Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities:     
Rationalization and asset impairment net charges 7,889   212 
Depreciation and amortization 19,250   22,050 
Equity earnings in affiliates, net 434   (108)
Pension settlement charges    73,562 
Other non-cash items, net (1,409)  389 
Changes in operating assets and liabilities, net of effects from acquisitions:     
Decrease in accounts receivable 39,390   16,359 
Increase in inventories (22,984)  (45,670)
Decrease in trade accounts payable (24,680)  (8,294)
Net change in other current assets and liabilities 11,296   31,838 
Net change in other long-term assets and liabilities (8,128)  (12,204)
NET CASH PROVIDED BY OPERATING ACTIVITIES 130,283   109,891 
      
INVESTING ACTIVITIES:     
Capital expenditures (17,699)  (18,672)
Acquisition of businesses, net of cash acquired (199)  (74,882)
Proceeds from sale of property, plant and equipment 646   1,290 
NET CASH USED BY INVESTING ACTIVITIES (17,252)  (92,264)
      
FINANCING ACTIVITIES:     
Net change in borrowings (56,830)  31,132 
Proceeds from exercise of stock options 751   2,249 
Purchase of shares for treasury (26,518)  (50,160)
Cash dividends paid to shareholders (32,463)  (30,338)
NET CASH USED BY FINANCING ACTIVITIES (115,060)  (47,117)
      
Effect of exchange rate changes on Cash and cash equivalents (9,460)  (835)
DECREASE IN CASH AND CASH EQUIVALENTS (11,489)  (30,325)
Cash and cash equivalents at beginning of period 152,796   190,884 
Cash and cash equivalents at end of period$141,307  $160,559 
      
Cash dividends paid per share$0.56  $0.51 


Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)

Condensed Consolidated Statements of Cash Flows

       
     Nine Months Ended September 30, 
  2022  2021 
OPERATING ACTIVITIES:      
Net income $363,078  $202,039 
Non-controlling interests in subsidiaries’ income (loss)     131 
Net income including non-controlling interests  363,078   202,170 
Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities:      
Rationalization and asset impairment net charges (gains)  7,776   (1,162)
Depreciation and amortization  59,009   60,558 
Equity earnings in affiliates, net  254   (399)
Pension settlement charges     80,098 
Other non-cash items, net  2,413   (10,967)
Changes in operating assets and liabilities, net of effects from acquisitions:      
Increase in accounts receivable  (64,569)  (71,212)
Increase in inventories  (135,578)  (128,856)
Increase in trade accounts payable  19,572   54,981 
Net change in other current assets and liabilities  32,470   78,959 
Net change in other long-term assets and liabilities  (12,841)  (9,045)
NET CASH PROVIDED BY OPERATING ACTIVITIES  271,584   255,125 
       
INVESTING ACTIVITIES:      
Capital expenditures  (52,301)  (46,440)
Acquisition of businesses, net of cash acquired  (22,294)  (158,605)
Proceeds from sale of property, plant and equipment  2,338   3,847 
Other investing activities     6,500 
NET CASH USED BY INVESTING ACTIVITIES  (72,257)  (194,698)
       
FINANCING ACTIVITIES:      
Net change in borrowings  14,999   32,295 
Proceeds from exercise of stock options  2,168   7,921 
Purchase of shares for treasury  (156,216)  (103,848)
Cash dividends paid to shareholders  (98,377)  (91,717)
Other financing activities     (763)
NET CASH USED BY FINANCING ACTIVITIES  (237,426)  (156,112)
       
Effect of exchange rate changes on Cash and cash equivalents  (13,552)  (1,035)
DECREASE IN CASH AND CASH EQUIVALENTS  (51,651)  (96,720)
Cash and cash equivalents at beginning of period  192,958   257,279 
Cash and cash equivalents at end of period $141,307  $160,559 
       
Cash dividends paid per share $1.68  $1.53 



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, 2022                
Net sales $585,628  $216,497 $133,115 $  $935,240 
Inter-segment sales  35,353   9,994  2,642  (47,989)   
Total sales $620,981  $226,491 $135,757 $(47,989) $935,240 
                 
Net income             $109,225 
As a percent of total sales              11.7%
                 
EBIT (1) $119,157  $16,861 $14,432 $(4,753) $145,697 
As a percent of total sales  19.2 % 7.4% 10.6%    15.6%
Special items charges (gains) (3)  (353)  8,364    3,068   11,079 
Adjusted EBIT (2) $118,804  $25,225 $14,432 $(1,685) $156,776 
As a percent of total sales  19.1 % 11.1% 10.6%    16.8%
                 
Three months ended September 30, 2021                
Net sales $461,508  $227,165 $117,781 $  $806,454 
Inter-segment sales  37,480   7,078  1,945  (46,503)   
Total sales $498,988  $234,243 $119,726 $(46,503) $806,454 
                 
Net income             $31,757 
As a percent of total sales              3.9%
                 
EBIT (1) $10,983  $22,417 $15,433 $(4,704) $44,129 
As a percent of total sales  2.2 % 9.6% 12.9%    5.5%
Special items charges (gains) (4)  73,574   6,615  547     80,736 
Adjusted EBIT (2) $84,557  $29,032 $15,980 $(4,704) $124,865 
As a percent of total sales  16.9 % 12.4% 13.3%    15.5%

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

(2) The primary profit measure used by management to assess segment performance is Adjusted EBIT.  EBIT for each operating segment is adjusted for special items to derive Adjusted EBIT.

(3) Special items in 2022 primarily reflect an adjustment to the amortization of step up in value of acquired inventories of $353 in Americas Welding related to an acquisition, Rationalization and asset impairment charges of $8,364 in International Welding and acquisition transaction costs of $3,068 in Corporate/Eliminations related to the contemplated acquisition.

(4) Special items in 2021 reflect Rationalization and asset impairment charges of $3,484 primarily in International Welding, pension settlement charges of $73,562 in Americas Welding and amortization of step up in value of acquired inventories of $3,143 and $547 in International Welding and The Harris Products Group, respectively, related to acquisitions.


Lincoln Electric Holdings, Inc.
Segment Highlights (1)
(In thousands)
(Unaudited)

                 
     Americas    International    The Harris    Corporate /       
  Welding Welding Products Group Eliminations Consolidated 
Nine months ended September 30, 2022                
Net sales $1,715,342  $711,167 $403,768 $  $2,830,277 
Inter-segment sales  92,540   25,749  8,570  (126,859)   
Total sales $1,807,882  $736,916 $412,338 $(126,859) $2,830,277 
                 
Net income             $363,078 
As a percent of total sales              12.8%
                 
EBIT (1) $352,066  $87,456 $51,952 $(13,538) $477,936 
As a percent of total sales  19.5 % 11.9% 12.6%    16.9%
Special items charges (gains) (3)  (3,627)  9,865    3,068   9,306 
Adjusted EBIT (2) $348,439  $97,321 $51,952 $(10,470) $487,242 
As a percent of total sales  19.3 % 13.2% 12.6%    17.2%
                 
Nine months ended September 30, 2021                
Net sales $1,344,218  $702,596 $343,115 $  $2,389,929 
Inter-segment sales  109,993   18,260  6,376  (134,629)   
Total sales $1,454,211  $720,856 $349,491 $(134,629) $2,389,929 
                 
Net income             $202,039 
As a percent of total sales              8.5%
                 
EBIT (1) $165,644  $64,150 $52,342 $(11,971) $270,165 
As a percent of total sales  11.4 % 8.9% 15.0%    11.3%
Special items charges (gains) (4)  79,664   13,695  547  1,923   95,829 
Adjusted EBIT (2) $245,308  $77,845 $52,889 $(10,048) $365,994 
As a percent of total sales  16.9 % 10.8% 15.1%    15.3%

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

(2) The primary profit measure used by management to assess segment performance is Adjusted EBIT.  EBIT for each operating segment is adjusted for special items to derive Adjusted EBIT.

(3) Special items in 2022 primarily reflect amortization of step up in value of acquired inventories of $1,106 in Americas Welding related to an acquisition, acquisition transaction costs of $3,068 in Corporate/Eliminations related to the contemplated acquisition and a $3,735 net gain related to the final settlement associated with the termination of a pension plan in Americas Welding. Special items in 2022 also include Rationalization and asset impairment charges of $10,403 in International Welding and net gains of $998 in Americas Welding.

(4) Special items in 2021 reflect pension settlement charges of $79,652 and $446 in Americas Welding and International Welding, respectively, Rationalization and asset impairment charges of $8,277 primarily in International Welding, amortization of step up in value of acquired inventories of $4,984 and $547 in International Welding and The Harris Products Group, respectively, and acquisition transaction costs of $1,923 in Corporate/Eliminations related to acquisitions.


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 
 2021 Volume Acquisitions Price Exchange 2022  
Operating Segments                  
Americas Welding$461,508 $52,521 $4,724 $69,888  $(3,013) $585,628  
International Welding 227,165  5,538    31,430   (47,636)  216,497  
The Harris Products Group 117,781  13,089  5,552  (579)  (2,728)  133,115  
Consolidated$ 806,454 $ 71,148 $ 10,276 $ 100,739  $ (53,377) $ 935,240  
                   
% Change                  
Americas Welding    11.4% 1.0% 15.1 % (0.7)% 26.9 %
International Welding    2.4%   13.8 % (21.0)% (4.7)%
The Harris Products Group    11.1% 4.7% (0.5)% (2.3)% 13.0 %
Consolidated     8.8%  1.3%  12.5 %  (6.6)%  16.0 %

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

                    
        Change in Net Sales due to:    
  Net Sales          Foreign Net Sales 
  2021 Volume Acquisitions Price Exchange 2022 
Operating Segments                   
Americas Welding $1,344,218 $119,809  $11,906 $243,960 $(4,551) $1,715,342 
International Welding  702,596  (12,348)  17,632  130,433  (127,146)  711,167 
The Harris Products Group  343,115  15,657   39,411  10,964  (5,379)  403,768 
Consolidated $ 2,389,929 $ 123,118  $ 68,949 $ 385,357 $ (137,076) $ 2,830,277 
                    
% Change                   
Americas Welding     8.9 % 0.9% 18.1% (0.3)% 27.6%
International Welding     (1.8)% 2.5% 18.6% (18.1)% 1.2%
The Harris Products Group     4.6 % 11.5% 3.2% (1.6)% 17.7%
Consolidated      5.2 %  2.9%  16.1%  (5.7)%  18.4%
 

Coordonnées