CLEVELAND, Feb. 17, 2015 /PRNewswire/ --
|
Fourth Quarter and
Full Year 2014 Key Metric Highlights
|
- Q4 reported operating income margin
at 15.3% of sales; 15.4% on an adjusted basis
- FY2014 operating income margin at
13.3% of sales; a record 15.1% on an adjusted basis
- Record FY2014 cash flows from
operations - up 18.5% to $402 million
- Solid execution with 19.1% ROIC and a
record 16.5% average operating working capital ratio
- Returned a record $380 million to
shareholders in FY2014 through share repurchases and dividend
payments
|
Lincoln Electric Holdings, Inc. (the "Company") (Nasdaq:
LECO) today reported fourth quarter 2014 net income of $75.2 million, or $0.96 per diluted share. This compares with
net income of $88.3 million, or
$1.07 per diluted share, in the
comparable 2013 period. Adjusted net income in the fourth
quarter 2014 was $75.4 million, or
$0.96 per diluted share, compared
with adjusted net income of $89.2
million, or $1.09 per diluted
share, in the comparable 2013 period. The 2013 period
includes a benefit of $0.22 per
diluted share from our Venezuelan operations, which operates in a
hyper-inflationary environment. This compares with no
contribution to Adjusted net income from our Venezuelan operations
in the fourth quarter 2014.
Sales decreased 4.3% to $684.0
million in the fourth quarter 2014 versus $714.8 million in the comparable 2013 period
primarily due to unfavorable foreign currency translation and
volume weakness in our South America Welding segment.
Operating income for the fourth quarter decreased 11.8% to
$104.9 million, or 15.3% of sales,
from $118.9 million, or 16.6% of
sales, in the comparable 2013 period. Adjusted operating
income decreased 12.3% to $105.1
million or 15.4% of sales, compared with $119.9 million, or 16.8% of sales in 2013.
Lower 2014 operating income results primarily reflect a challenging
year-over-year comparison in our South America Welding segment due
to contraction in our Venezuelan operations.
Christopher L. Mapes, Chairman,
President and Chief Executive Officer stated, "We ended the year
with a strong finish highlighted by compelling results in
North America and record
performance across key metrics. Steady execution of our '2020
initiatives' helped offset a challenging year-over-year comparison
from our Venezuelan business and rising foreign exchange
headwinds. I am pleased to report that excluding Venezuela, the business achieved a 130 basis
point expansion in operating income margin on an adjusted basis and
ten percent growth in EPS in 2014. Looking ahead to 2015, we
expect to benefit from our diversified end market and geographic
exposure, as well as the strength of our portfolio. While we
are cautious about near-term factors such as foreign exchange and
oil prices, we expect our strategic initiatives will continue to
generate value for all of our stakeholders through the cycle."
Dividend and Share Repurchases
The Company's Board of Directors increased the quarterly cash
dividend 26%, from $0.23 per share to
$0.29, which was paid on January 15, 2015 to shareholders of record as of
December 31, 2014. During the
quarter, the Company returned $57.8
million to shareholders through the repurchase of the
Company's common shares. The Company's 2015 share repurchase
target is $400
million.
Twelve Months 2014 Summary
Net income for the twelve months ended December 31, 2014 was $254.7 million, or $3.18 per diluted share, which includes
rationalization and asset impairment charges of $30.9 million and charges of $21.1 million from Venezuelan foreign exchange
remeasurement losses related to the adoption of a new foreign
exchange mechanism in the first quarter. This compares with
net income of $293.8 million, or
$3.54 per diluted share, in
2013. Adjusted net income was $305.9
million, or $3.82 per diluted
share, compared with adjusted net income of $313.2 million, or $3.77 per diluted share, in 2013. Adjusted
net income for the twelve months ended December 31, 2014 includes earnings of
$0.17 per diluted share from the
Company's Venezuelan operations as compared with $0.46 per diluted share in the comparable 2013
period.
Sales remained relatively steady at $2.8
billion in the twelve months ended December 31, 2014 as compared with $2.9 billion in the comparable 2013 period.
This result reflects lower volumes and unfavorable foreign exchange
translation being offset by pricing actions and acquisitions.
Operating income for the twelve months ended December 31, 2014 decreased to $373.7 million, or 13.3% of sales, compared with
$407.0 million, or 14.3% of sales, in
the comparable 2013 period. Adjusted operating income was
$424.9 million or 15.1% of sales,
compared with $428.4 million, or
15.0% of sales in 2013. Operating income and Adjusted
operating income include a $3.9
million gain, $2.5 million
after-tax or $0.03 per diluted share,
from an insurance settlement.
Webcast Information
A conference call to discuss fourth quarter and full year 2014
financial results will be webcast live today, February 17,
2015, at 10:00 a.m., Eastern Time. This webcast is
accessible at http://ir.lincolnelectric.com. Listeners should
go to the web site prior to the call to register and download and
install any necessary audio software. A replay of the webcast
will be available on the Company's web site.
Investors who are unable to access the webcast may listen to the
conference call live by telephone by dialing (877) 344-3899
(domestic) or (315) 625-3087 (international) and use confirmation
code 61512318. Telephone participants are asked to dial in
10-15 minutes prior to the start of the conference call.
Financial results for the fourth quarter and full year 2014 can
also be obtained at http://ir.lincolnelectric.com.
About Lincoln Electric
Lincoln Electric is the world leader in the design, development
and manufacture of arc welding products, robotic arc welding
systems, plasma and oxy-fuel cutting equipment and has a leading
global position in the brazing and soldering alloys market.
Headquartered in Cleveland, Ohio,
Lincoln has 47 manufacturing locations, including operations and
joint ventures in 19 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.
Non-GAAP Information
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.
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 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, including in
highly inflationary countries such as Venezuela; adverse outcome of pending or
potential litigation; actual costs of the Company's rationalization
plans; 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.
|
Lincoln Electric
Holdings, Inc.
|
|
Financial
Highlights
|
|
(In thousands,
except per share amounts)
|
|
(Unaudited)
|
|
|
Consolidated
Statements of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Fav (Unfav) to
Prior Year
|
|
|
2014
|
|
|
% of Sales
|
|
2013
|
|
|
% of Sales
|
|
$
|
|
%
|
|
Net sales
|
|
$
|
683,954
|
|
|
100.0
|
%
|
|
$
|
714,791
|
|
|
100.0
|
%
|
|
$
|
(30,837)
|
|
|
(4.3%)
|
|
|
Cost of goods
sold
|
|
452,869
|
|
|
66.2
|
%
|
|
471,744
|
|
|
66.0
|
%
|
|
18,875
|
|
|
4.0
|
%
|
|
Gross
profit
|
|
231,085
|
|
|
33.8
|
%
|
|
243,047
|
|
|
34.0
|
%
|
|
(11,962)
|
|
|
(4.9%)
|
|
|
Selling,
general & administrative expenses
|
|
126,002
|
|
|
18.4
|
%
|
|
123,883
|
|
|
17.3
|
%
|
|
(2,119)
|
|
|
(1.7%)
|
|
|
Rationalization and asset impairment
charges
|
|
166
|
|
|
—
|
|
|
259
|
|
|
—
|
|
|
93
|
|
|
35.9
|
%
|
|
Operating
income
|
|
104,917
|
|
|
15.3
|
%
|
|
118,905
|
|
|
16.6
|
%
|
|
(13,988)
|
|
|
(11.8%)
|
|
|
Interest
income
|
|
628
|
|
|
0.1
|
%
|
|
868
|
|
|
0.1
|
%
|
|
(240)
|
|
|
(27.6%)
|
|
|
Equity earnings in
affiliates
|
|
1,104
|
|
|
0.2
|
%
|
|
1,119
|
|
|
0.2
|
%
|
|
(15)
|
|
|
(1.3%)
|
|
|
Other
income
|
|
791
|
|
|
0.1
|
%
|
|
1,053
|
|
|
0.1
|
%
|
|
(262)
|
|
|
(24.9%)
|
|
|
Interest
expense
|
|
(6,704)
|
|
|
(1.0%)
|
|
|
(557)
|
|
|
(0.1%)
|
|
|
(6,147)
|
|
|
—
|
|
|
Income before income
taxes
|
|
100,736
|
|
|
14.7
|
%
|
|
121,388
|
|
|
17.0
|
%
|
|
(20,652)
|
|
|
(17.0%)
|
|
|
Income
taxes
|
|
25,401
|
|
|
3.7
|
%
|
|
33,323
|
|
|
4.7
|
%
|
|
7,922
|
|
|
23.8
|
%
|
|
Effective tax
rate
|
|
25.2
|
%
|
|
|
|
|
27.5
|
%
|
|
|
|
|
2.3
|
%
|
|
|
|
|
Net income including
non-controlling interests
|
|
75,335
|
|
|
11.0
|
%
|
|
88,065
|
|
|
12.3
|
%
|
|
(12,730)
|
|
|
(14.5%)
|
|
|
Non-controlling
interests in subsidiaries'
earnings
(loss)
|
|
123
|
|
|
—
|
|
|
(259)
|
|
|
—
|
|
|
382
|
|
|
147.5
|
%
|
|
Net income
|
|
$
|
75,212
|
|
|
11.0
|
%
|
|
$
|
88,324
|
|
|
12.4
|
%
|
|
$
|
(13,112)
|
|
|
(14.8%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
|
0.97
|
|
|
|
|
|
$
|
1.09
|
|
|
|
|
|
$
|
(0.12)
|
|
|
(11.0%)
|
|
|
Diluted earnings per
share
|
|
$
|
0.96
|
|
|
|
|
|
$
|
1.07
|
|
|
|
|
|
$
|
(0.11)
|
|
|
(10.3%)
|
|
|
Weighted average
shares (basic)
|
|
77,403
|
|
|
|
|
|
81,132
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares (diluted)
|
|
78,280
|
|
|
|
|
|
82,184
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months
ended December 31,
|
|
Fav (Unfav) to
Prior Year
|
|
|
2014
|
|
|
% of
Sales
|
|
2013
|
|
|
% of
Sales
|
|
$
|
|
%
|
|
Net sales
|
|
$
|
2,813,324
|
|
|
100.0
|
%
|
|
$
|
2,852,671
|
|
|
100.0
|
%
|
|
$
|
(39,347)
|
|
|
(1.4%)
|
|
|
Cost of goods
sold
|
|
1,864,027
|
|
|
66.3
|
%
|
|
1,910,017
|
|
|
67.0
|
%
|
|
45,990
|
|
|
2.4
|
%
|
|
Gross
profit
|
|
949,297
|
|
|
33.7
|
%
|
|
942,654
|
|
|
33.0
|
%
|
|
6,643
|
|
|
0.7
|
%
|
|
Selling,
general & administrative expenses
|
|
545,497
|
|
|
19.4
|
%
|
|
527,206
|
|
|
18.5
|
%
|
|
(18,291)
|
|
|
(3.5%)
|
|
|
Rationalization and asset impairment
charges
|
|
30,053
|
|
|
1.1
|
%
|
|
8,463
|
|
|
0.3
|
%
|
|
(21,590)
|
|
|
(255.1%)
|
|
|
Operating
income
|
|
373,747
|
|
|
13.3
|
%
|
|
406,985
|
|
|
14.3
|
%
|
|
(33,238)
|
|
|
(8.2%)
|
|
|
Interest
income
|
|
3,093
|
|
|
0.1
|
%
|
|
3,320
|
|
|
0.1
|
%
|
|
(227)
|
|
|
(6.8%)
|
|
|
Equity earnings in
affiliates
|
|
5,412
|
|
|
0.2
|
%
|
|
4,806
|
|
|
0.2
|
%
|
|
606
|
|
|
12.6
|
%
|
|
Other
income
|
|
3,995
|
|
|
0.1
|
%
|
|
4,194
|
|
|
0.1
|
%
|
|
(199)
|
|
|
(4.7%)
|
|
|
Interest
expense
|
|
(10,434)
|
|
|
(0.4%)
|
|
|
(2,864)
|
|
|
(0.1%)
|
|
|
(7,570)
|
|
|
(264.3%)
|
|
|
Income before income
taxes
|
|
375,813
|
|
|
13.4
|
%
|
|
416,441
|
|
|
14.6
|
%
|
|
(40,628)
|
|
|
(9.8%)
|
|
|
Income
taxes
|
|
121,933
|
|
|
4.3
|
%
|
|
124,754
|
|
|
4.4
|
%
|
|
2,821
|
|
|
2.3
|
%
|
|
Effective tax
rate
|
|
32.4
|
%
|
|
|
|
|
30.0
|
%
|
|
|
|
|
(2.4%)
|
|
|
|
|
|
Net income including
non-controlling interests
|
|
253,880
|
|
|
9.0
|
%
|
|
291,687
|
|
|
10.2
|
%
|
|
(37,807)
|
|
|
(13.0%)
|
|
|
Non-controlling
interests in subsidiaries'
earnings
(loss)
|
|
(806)
|
|
|
—
|
|
|
(2,093)
|
|
|
(0.1%)
|
|
|
1,287
|
|
|
61.5
|
%
|
|
Net income
|
|
$
|
254,686
|
|
|
9.1
|
%
|
|
$
|
293,780
|
|
|
10.3
|
%
|
|
$
|
(39,094)
|
|
|
(13.3%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
|
3.22
|
|
|
|
|
|
$
|
3.58
|
|
|
|
|
|
$
|
(0.36)
|
|
|
(10.1%)
|
|
|
Diluted earnings per
share
|
|
$
|
3.18
|
|
|
|
|
|
$
|
3.54
|
|
|
|
|
|
$
|
(0.36)
|
|
|
(10.2%)
|
|
|
Weighted average
shares (basic)
|
|
79,185
|
|
|
|
|
|
81,978
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares (diluted)
|
|
80,096
|
|
|
|
|
|
83,042
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lincoln Electric
Holdings, Inc.
|
|
Financial
Highlights
|
|
(In thousands,
except per share amounts)
|
|
(Unaudited)
|
|
|
Non-GAAP Financial
Measures
|
|
|
|
|
Three months ended
December 31,
|
|
Twelve months
ended December 31,
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
Operating income as
reported
|
|
$
|
104,917
|
|
|
$
|
118,905
|
|
|
$
|
373,747
|
|
|
$
|
406,985
|
|
|
Special items
(pre-tax):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization and
asset impairment charges (1)
|
|
166
|
|
|
259
|
|
|
30,053
|
|
|
8,463
|
|
|
Loss on the sale of
land (2)
|
|
—
|
|
|
705
|
|
|
—
|
|
|
705
|
|
|
Venezuela foreign
exchange losses (3)
|
|
—
|
|
|
—
|
|
|
21,133
|
|
|
12,198
|
|
|
Adjusted operating
income (5)
|
|
$
|
105,083
|
|
|
$
|
119,869
|
|
|
$
|
424,933
|
|
|
$
|
428,351
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income as
reported
|
|
$
|
75,212
|
|
|
$
|
88,324
|
|
|
$
|
254,686
|
|
|
$
|
293,780
|
|
|
Special items
(after-tax):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rationalization and
asset impairment charges (1)
|
|
167
|
|
|
223
|
|
|
30,914
|
|
|
7,573
|
|
|
Loss on the sale of
land (2)
|
|
—
|
|
|
705
|
|
|
—
|
|
|
705
|
|
|
Venezuela foreign
exchange losses (3)
|
|
—
|
|
|
—
|
|
|
21,133
|
|
|
12,198
|
|
|
Special items
attributable to non-controlling
interests (4)
|
|
—
|
|
|
(47)
|
|
|
(805)
|
|
|
(1,068)
|
|
|
Adjusted net income
(5)
|
|
$
|
75,379
|
|
|
$
|
89,205
|
|
|
$
|
305,928
|
|
|
$
|
313,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share as reported
|
|
$
|
0.96
|
|
|
$
|
1.07
|
|
|
$
|
3.18
|
|
|
$
|
3.54
|
|
|
Special
items
|
|
—
|
|
|
0.02
|
|
|
0.64
|
|
|
0.23
|
|
|
Adjusted diluted
earnings per share (5)
|
|
$
|
0.96
|
|
|
$
|
1.09
|
|
|
$
|
3.82
|
|
|
$
|
3.77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares (diluted)
|
|
78,280
|
|
|
82,184
|
|
|
80,096
|
|
|
83,042
|
|
|
(1)
|
The three and twelve
months ended December 31, 2014 include non-cash asset impairment
charges. The twelve months ended December 31, 2014 also
includes net rationalization credits including gains on the sale of
assets. The three and twelve months ended December 31, 2013
include net charges associated with long-lived asset impairments
and severance and other related costs from the consolidation of
manufacturing operations partially offset by gains related to
the sale of assets, including real estate, at rationalized
operations.
|
|
(2)
|
Represents the loss
realized related to the sale of land.
|
|
(3)
|
The twelve months
ended December 31, 2014 represents the impact of the Venezuelan
remeasurement loss related to the adoption of a new foreign
exchange mechanism in the first quarter. The twelve months
ended December 31, 2013 represents the impact of the devaluation of
the Venezuelan currency.
|
|
(4)
|
Represents the
portion of special items attributable to non-controlling
interests.
|
|
(5)
|
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
|
|
December 31,
2014
|
|
December 31,
2013
|
|
Cash and cash
equivalents
|
|
$
|
278,379
|
|
|
$
|
299,825
|
|
|
Total current
assets
|
|
1,098,677
|
|
|
1,130,775
|
|
|
Property, plant and
equipment, net
|
|
437,209
|
|
|
484,005
|
|
|
Total
assets
|
|
1,939,215
|
|
|
2,151,867
|
|
|
Total current
liabilities
|
|
492,419
|
|
|
456,917
|
|
|
Short-term debt
(1)
|
|
68,166
|
|
|
15,296
|
|
|
Long-term
debt
|
|
2,488
|
|
|
3,791
|
|
|
Total
equity
|
|
1,285,781
|
|
|
1,530,688
|
|
|
|
|
|
|
|
|
|
Net Operating
Working Capital
|
|
December 31,
2014
|
|
December 31,
2013
|
|
Accounts
receivable
|
|
$
|
321,862
|
|
|
$
|
367,134
|
|
|
Inventory
|
|
330,840
|
|
|
349,963
|
|
|
Trade accounts
payable
|
|
202,482
|
|
|
212,799
|
|
|
Net operating working
capital
|
|
$
|
450,220
|
|
|
$
|
504,298
|
|
|
|
|
|
|
|
|
|
Net operating working
capital to net sales (2)
|
|
16.5
|
%
|
|
17.6
|
%
|
|
|
|
|
|
|
|
|
Invested
Capital
|
|
December 31,
2014
|
|
December 31,
2013
|
|
Short-term debt
(1)
|
|
$
|
68,166
|
|
|
$
|
15,296
|
|
|
Long-term
debt
|
|
2,488
|
|
|
3,791
|
|
|
Total debt
|
|
70,654
|
|
|
19,087
|
|
|
Total
equity
|
|
1,285,781
|
|
|
1,530,688
|
|
|
Invested
capital
|
|
$
|
1,356,435
|
|
|
$
|
1,549,775
|
|
|
|
|
|
|
|
|
|
Total debt / invested
capital
|
|
5.2
|
%
|
|
1.2
|
%
|
|
Return on invested
capital (3)
|
|
19.1
|
%
|
|
18.9
|
%
|
|
(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)
|
|
|
Condensed
Consolidated Statements of Cash Flows
|
|
|
|
|
Three months ended
December 31,
|
|
|
2014
|
|
|
2013
|
|
|
OPERATING
ACTIVITIES:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
75,212
|
|
|
$
|
88,324
|
|
|
Non-controlling
interests in subsidiaries' earnings (loss)
|
|
123
|
|
|
(259)
|
|
|
Net income including
non-controlling interests
|
|
75,335
|
|
|
88,065
|
|
|
Adjustments to
reconcile Net income including non-controlling interests to Net
cash
provided
by operating activities:
|
|
|
|
|
|
|
|
Rationalization and
asset impairment charges
|
|
127
|
|
|
43
|
|
|
Depreciation and
amortization
|
|
16,590
|
|
|
17,002
|
|
|
Equity loss
(earnings) in affiliates, net
|
|
53
|
|
|
(347)
|
|
|
Pension
expense
|
|
2,761
|
|
|
7,513
|
|
|
Pension contributions
and payments
|
|
(1,429)
|
|
|
(2,939)
|
|
|
Other non-cash items,
net
|
|
14,357
|
|
|
(296)
|
|
|
Changes in operating
assets and liabilities, net of effects from
acquisitions:
|
|
|
|
|
|
|
|
Decrease in accounts
receivable
|
|
28,264
|
|
|
12,545
|
|
|
Decrease in
inventories
|
|
5,435
|
|
|
23,199
|
|
|
Increase in trade
accounts payable
|
|
13,669
|
|
|
33,497
|
|
|
Net change in other
current assets and liabilities
|
|
(24,954)
|
|
|
(80,601)
|
|
|
Net change in other
long-term assets and liabilities
|
|
3,441
|
|
|
(878)
|
|
|
NET CASH PROVIDED BY
OPERATING ACTIVITIES
|
|
133,649
|
|
|
96,803
|
|
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES:
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
(17,560)
|
|
|
(16,324)
|
|
|
Acquisition of
businesses, net of cash acquired
|
|
(23,338)
|
|
|
(48,225)
|
|
|
Proceeds from sale of
property, plant and equipment
|
|
411
|
|
|
597
|
|
|
Other investing
activities
|
|
—
|
|
|
2,500
|
|
|
NET CASH USED BY
INVESTING ACTIVITIES
|
|
(40,487)
|
|
|
(61,452)
|
|
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES:
|
|
|
|
|
|
|
|
Net change in
borrowings
|
|
(17,783)
|
|
|
511
|
|
|
Proceeds from
exercise of stock options
|
|
3,171
|
|
|
4,220
|
|
|
Excess tax benefits
from stock-based compensation
|
|
2,606
|
|
|
3,629
|
|
|
Purchase of shares
for treasury
|
|
(57,775)
|
|
|
(54,238)
|
|
|
Cash dividends paid
to shareholders
|
|
(17,866)
|
|
|
(16,290)
|
|
|
Transactions with
non-controlling interests
|
|
—
|
|
|
(3,278)
|
|
|
NET CASH USED BY
FINANCING ACTIVITIES
|
|
(87,647)
|
|
|
(65,446)
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on Cash and cash equivalents
|
|
(6,659)
|
|
|
(389)
|
|
|
DECREASE IN CASH AND
CASH EQUIVALENTS
|
|
(1,144)
|
|
|
(30,484)
|
|
|
Cash and cash
equivalents at beginning of period
|
|
279,523
|
|
|
330,309
|
|
|
Cash and cash
equivalents at end of period
|
|
$
|
278,379
|
|
|
$
|
299,825
|
|
|
|
|
|
|
|
|
|
Cash dividends paid
per share
|
|
$
|
0.23
|
|
|
$
|
0.20
|
|
|
Lincoln Electric
Holdings, Inc.
|
|
Financial
Highlights
|
|
(In thousands,
except per share amounts)
|
|
(Unaudited)
|
|
|
Condensed
Consolidated Statements of Cash Flows
|
|
|
|
|
Twelve months
ended December 31,
|
|
|
2014
|
|
|
2013
|
|
|
OPERATING
ACTIVITIES:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
254,686
|
|
|
$
|
293,780
|
|
|
Non-controlling
interests in subsidiaries' loss
|
|
(806)
|
|
|
(2,093)
|
|
|
Net income including
non-controlling interests
|
|
253,880
|
|
|
291,687
|
|
|
Adjustments to
reconcile Net income including non-controlling interests to Net
cash
provided
by operating activities:
|
|
|
|
|
|
|
|
Rationalization and
asset impairment charges
|
|
29,574
|
|
|
5,092
|
|
|
Depreciation and
amortization
|
|
69,607
|
|
|
68,883
|
|
|
Equity earnings in
affiliates, net
|
|
(1,848)
|
|
|
(1,660)
|
|
|
Pension
expense
|
|
12,395
|
|
|
29,774
|
|
|
Pension contributions
and payments
|
|
(36,072)
|
|
|
(87,356)
|
|
|
Other non-cash items,
net
|
|
44,398
|
|
|
29,461
|
|
|
Changes in operating
assets and liabilities, net of effects from
acquisitions:
|
|
|
|
|
|
|
|
Decrease (increase) in
accounts receivable
|
|
5,876
|
|
|
(5,437)
|
|
|
(Increase) decrease in
inventories
|
|
(5,718)
|
|
|
13,310
|
|
|
Increase in trade
accounts payable
|
|
2,135
|
|
|
794
|
|
|
Net change in other
current assets and liabilities
|
|
28,345
|
|
|
(4,974)
|
|
|
Net change in other
long-term assets and liabilities
|
|
(870)
|
|
|
(680)
|
|
|
NET CASH PROVIDED BY
OPERATING ACTIVITIES
|
|
401,702
|
|
|
338,894
|
|
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES:
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
(72,990)
|
|
|
(76,015)
|
|
|
Acquisition of
businesses, net of cash acquired
|
|
(24,230)
|
|
|
(53,161)
|
|
|
Proceeds from sale of
property, plant and equipment
|
|
17,457
|
|
|
1,393
|
|
|
Other investing
activities
|
|
778
|
|
|
(1,717)
|
|
|
NET CASH USED BY
INVESTING ACTIVITIES
|
|
(78,985)
|
|
|
(129,500)
|
|
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES:
|
|
|
|
|
|
|
|
Net change in
borrowings
|
|
53,331
|
|
|
(1,840)
|
|
|
Proceeds from
exercise of stock options
|
|
9,116
|
|
|
20,297
|
|
|
Excess tax benefits
from stock-based compensation
|
|
5,967
|
|
|
10,602
|
|
|
Purchase of shares
for treasury
|
|
(307,178)
|
|
|
(167,879)
|
|
|
Cash dividends paid
to shareholders
|
|
(73,261)
|
|
|
(49,277)
|
|
|
Transactions with
non-controlling interests
|
|
(2,330)
|
|
|
(6,087)
|
|
|
NET CASH USED BY
FINANCING ACTIVITIES
|
|
(314,355)
|
|
|
(194,184)
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on Cash and cash equivalents
|
|
(29,808)
|
|
|
(1,849)
|
|
|
(DECREASE) INCREASE
IN CASH AND CASH EQUIVALENTS
|
|
(21,446)
|
|
|
13,361
|
|
|
Cash and cash
equivalents at beginning of period
|
|
299,825
|
|
|
286,464
|
|
|
Cash and cash
equivalents at end of period
|
|
$
|
278,379
|
|
|
$
|
299,825
|
|
|
|
|
|
|
|
|
|
Cash dividends paid
per share
|
|
$
|
0.92
|
|
|
$
|
0.60
|
|
|
Lincoln Electric
Holdings, Inc.
|
|
Segment
Highlights
|
|
(In
thousands)
|
|
(Unaudited)
|
|
|
|
North
America
Welding
|
|
Europe
Welding
|
|
Asia Pacific
Welding
|
|
South
America
Welding
|
|
The Harris
Products
Group
|
|
Corporate /
Eliminations
|
|
Consolidated
|
|
Three months ended
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
429,907
|
|
|
$
|
97,288
|
|
|
$
|
58,113
|
|
|
$
|
32,689
|
|
|
$
|
65,957
|
|
|
$
|
—
|
|
|
$
|
683,954
|
|
|
Inter-segment
sales
|
|
28,064
|
|
|
3,699
|
|
|
3,176
|
|
|
71
|
|
|
1,821
|
|
|
(36,831)
|
|
|
—
|
|
|
Total
|
|
$
|
457,971
|
|
|
$
|
100,987
|
|
|
$
|
61,289
|
|
|
$
|
32,760
|
|
|
$
|
67,778
|
|
|
$
|
(36,831)
|
|
|
$
|
683,954
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1)
|
|
$
|
88,456
|
|
|
$
|
9,429
|
|
|
$
|
1,715
|
|
|
$
|
(217)
|
|
|
$
|
6,380
|
|
|
$
|
1,049
|
|
|
$
|
106,812
|
|
|
As a percent of total
sales
|
|
19.3
|
%
|
|
9.3
|
%
|
|
2.8
|
%
|
|
(0.7%)
|
|
|
9.4
|
%
|
|
|
|
|
15.6
|
%
|
|
Special items (gain)
charge (2)
|
|
$
|
—
|
|
|
$
|
(19)
|
|
|
$
|
185
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
166
|
|
|
EBIT, as adjusted
(4)
|
|
$
|
88,456
|
|
|
$
|
9,410
|
|
|
$
|
1,900
|
|
|
$
|
(217)
|
|
|
$
|
6,380
|
|
|
$
|
1,049
|
|
|
$
|
106,978
|
|
|
As a percent of total
sales
|
|
19.3
|
%
|
|
9.3
|
%
|
|
3.1
|
%
|
|
(0.7%)
|
|
|
9.4
|
%
|
|
|
|
|
15.6
|
%
|
|
Three months ended
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
410,033
|
|
|
$
|
111,874
|
|
|
$
|
63,170
|
|
|
$
|
63,303
|
|
|
$
|
66,411
|
|
|
$
|
—
|
|
|
$
|
714,791
|
|
|
Inter-segment
sales
|
|
27,385
|
|
|
6,046
|
|
|
2,327
|
|
|
11
|
|
|
2,396
|
|
|
(38,165)
|
|
|
—
|
|
|
Total
|
|
$
|
437,418
|
|
|
$
|
117,920
|
|
|
$
|
65,497
|
|
|
$
|
63,314
|
|
|
$
|
68,807
|
|
|
$
|
(38,165)
|
|
|
$
|
714,791
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1)
|
|
$
|
83,902
|
|
|
$
|
7,752
|
|
|
$
|
(792)
|
|
|
$
|
25,187
|
|
|
$
|
6,415
|
|
|
$
|
(1,387)
|
|
|
$
|
121,077
|
|
|
As a percent of total
sales
|
|
19.2
|
%
|
|
6.6
|
%
|
|
(1.2%)
|
|
|
39.8
|
%
|
|
9.3
|
%
|
|
|
|
|
16.9
|
%
|
|
Special items (gain)
charge (3)
|
|
$
|
(57)
|
|
|
$
|
381
|
|
|
$
|
640
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
964
|
|
|
EBIT, as adjusted
(4)
|
|
$
|
83,845
|
|
|
$
|
8,133
|
|
|
$
|
(152)
|
|
|
$
|
25,187
|
|
|
$
|
6,415
|
|
|
$
|
(1,387)
|
|
|
$
|
122,041
|
|
|
As a percent of total
sales
|
|
19.2
|
%
|
|
6.9
|
%
|
|
(0.2%)
|
|
|
39.8
|
%
|
|
9.3
|
%
|
|
|
|
|
17.1
|
%
|
|
Twelve months
ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
1,700,924
|
|
|
$
|
425,775
|
|
|
$
|
243,800
|
|
|
$
|
148,595
|
|
|
$
|
294,230
|
|
|
$
|
—
|
|
|
$
|
2,813,324
|
|
|
Inter-segment
sales
|
|
124,732
|
|
|
19,586
|
|
|
14,820
|
|
|
144
|
|
|
8,210
|
|
|
(167,492)
|
|
|
—
|
|
|
Total
|
|
$
|
1,825,656
|
|
|
$
|
445,361
|
|
|
$
|
258,620
|
|
|
$
|
148,739
|
|
|
$
|
302,440
|
|
|
$
|
(167,492)
|
|
|
$
|
2,813,324
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1)
|
|
$
|
335,533
|
|
|
$
|
47,918
|
|
|
$
|
(27,314)
|
|
|
$
|
(5,762)
|
|
|
$
|
28,563
|
|
|
$
|
4,216
|
|
|
$
|
383,154
|
|
|
As a percent of total
sales
|
|
18.4
|
%
|
|
10.8
|
%
|
|
(10.6%)
|
|
|
(3.9%)
|
|
|
9.4
|
%
|
|
|
|
|
13.6
|
%
|
|
Special items (gain)
charge (2)
|
|
$
|
(68)
|
|
|
$
|
904
|
|
|
$
|
28,635
|
|
|
$
|
21,715
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
51,186
|
|
|
EBIT, as adjusted
(4)
|
|
$
|
335,465
|
|
|
$
|
48,822
|
|
|
$
|
1,321
|
|
|
$
|
15,953
|
|
|
$
|
28,563
|
|
|
$
|
4,216
|
|
|
$
|
434,340
|
|
|
As a percent of total
sales
|
|
18.4
|
%
|
|
11.0
|
%
|
|
0.5
|
%
|
|
10.7
|
%
|
|
9.4
|
%
|
|
|
|
|
15.4
|
%
|
|
Twelve months
ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
1,652,769
|
|
|
$
|
429,548
|
|
|
$
|
266,282
|
|
|
$
|
195,895
|
|
|
$
|
308,177
|
|
|
$
|
—
|
|
|
$
|
2,852,671
|
|
|
Inter-segment
sales
|
|
127,254
|
|
|
19,911
|
|
|
14,906
|
|
|
233
|
|
|
9,605
|
|
|
(171,909)
|
|
|
—
|
|
|
Total
|
|
$
|
1,780,023
|
|
|
$
|
449,459
|
|
|
$
|
281,188
|
|
|
$
|
196,128
|
|
|
$
|
317,782
|
|
|
$
|
(171,909)
|
|
|
$
|
2,852,671
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1)
|
|
$
|
317,455
|
|
|
$
|
34,202
|
|
|
$
|
(4,256)
|
|
|
$
|
45,108
|
|
|
$
|
27,826
|
|
|
$
|
(4,350)
|
|
|
$
|
415,985
|
|
|
As a percent of total
sales
|
|
17.8
|
%
|
|
7.6
|
%
|
|
(1.5%)
|
|
|
23.0
|
%
|
|
8.8
|
%
|
|
|
|
|
14.6
|
%
|
|
Special items (gain)
charge (3)
|
|
$
|
1,052
|
|
|
$
|
2,045
|
|
|
$
|
6,071
|
|
|
$
|
12,198
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,366
|
|
|
EBIT, as adjusted
(4)
|
|
$
|
318,507
|
|
|
$
|
36,247
|
|
|
$
|
1,815
|
|
|
$
|
57,306
|
|
|
$
|
27,826
|
|
|
$
|
(4,350)
|
|
|
$
|
437,351
|
|
|
As a percent of total
sales
|
|
17.9
|
%
|
|
8.1
|
%
|
|
0.6
|
%
|
|
29.2
|
%
|
|
8.8
|
%
|
|
|
|
|
15.3
|
%
|
|
(1)
|
EBIT is defined as
Operating income plus Equity earnings in affiliates and Other
income.
|
|
(2)
|
Special items in the
three and twelve months ended December 31, 2014 include non-cash
asset impairment charges. The twelve months ended December
31, 2014 also includes net rationalization credits including gains
on the sale of assets. Special items in the twelve months
ended December 31, 2014 also include the impact of the Venezuelan
remeasurement losses related to the adoption of a new foreign
exchange mechanism in the first quarter.
|
|
(3)
|
Special items in the
three and twelve months ended December 31, 2013 include net
rationalization and asset impairment charges and the impact of the
devaluation of the Venezuelan currency.
|
|
(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
December 31st Change in Net Sales by Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Net
Sales due to:
|
|
|
|
|
|
Net Sales
2013
|
|
|
Volume
|
|
Acquisitions
|
|
Price
|
|
Foreign
Exchange
|
|
Net Sales
2014
|
|
|
Operating
Segments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
Welding
|
|
$
|
410,033
|
|
|
$
|
5,331
|
|
|
$
|
15,936
|
|
|
$
|
2,902
|
|
|
$
|
(4,295)
|
|
|
$
|
429,907
|
|
|
Europe
Welding
|
|
111,874
|
|
|
(2,156)
|
|
|
—
|
|
|
(912)
|
|
|
(11,518)
|
|
|
97,288
|
|
|
Asia Pacific
Welding
|
|
63,170
|
|
|
(4,866)
|
|
|
—
|
|
|
374
|
|
|
(565)
|
|
|
58,113
|
|
|
South America
Welding
|
|
63,303
|
|
|
(27,900)
|
|
|
—
|
|
|
13,896
|
|
|
(16,610)
|
|
|
32,689
|
|
|
The Harris Products
Group
|
|
66,411
|
|
|
4,874
|
|
|
—
|
|
|
(3,927)
|
|
|
(1,401)
|
|
|
65,957
|
|
|
Consolidated
|
|
$
|
714,791
|
|
|
$
|
(24,717)
|
|
|
$
|
15,936
|
|
|
$
|
12,333
|
|
|
$
|
(34,389)
|
|
|
$
|
683,954
|
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
Welding
|
|
|
|
|
1.3
|
%
|
|
3.9
|
%
|
|
0.7
|
%
|
|
(1.0%)
|
|
|
4.8
|
%
|
|
Europe
Welding
|
|
|
|
|
(1.9%)
|
|
|
—
|
|
|
(0.8%)
|
|
|
(10.3%)
|
|
|
(13.0%)
|
|
|
Asia Pacific
Welding
|
|
|
|
|
(7.7%)
|
|
|
—
|
|
|
0.6
|
%
|
|
(0.9%)
|
|
|
(8.0%)
|
|
|
South America
Welding
|
|
|
|
|
(44.1%)
|
|
|
—
|
|
|
22.0
|
%
|
|
(26.2%)
|
|
|
(48.4%)
|
|
|
The Harris Products
Group
|
|
|
|
|
7.3
|
%
|
|
—
|
|
|
(5.9%)
|
|
|
(2.1%)
|
|
|
(0.7%)
|
|
|
Consolidated
|
|
|
|
|
(3.5%)
|
|
|
2.2
|
%
|
|
1.7
|
%
|
|
(4.8%)
|
|
|
(4.3%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended December 31st Change in Net Sales by
Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Net
Sales due to:
|
|
|
|
|
|
Net Sales
2013
|
|
|
Volume
|
|
Acquisitions
|
|
Price
|
|
Foreign
Exchange
|
|
Net Sales
2014
|
|
|
Operating
Segments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
Welding
|
|
$
|
1,652,769
|
|
|
$
|
4,335
|
|
|
$
|
42,184
|
|
|
$
|
13,247
|
|
|
$
|
(11,611)
|
|
|
$
|
1,700,924
|
|
|
Europe
Welding
|
|
429,548
|
|
|
8,107
|
|
|
—
|
|
|
(3,722)
|
|
|
(8,158)
|
|
|
425,775
|
|
|
Asia Pacific
Welding
|
|
266,282
|
|
|
(17,516)
|
|
|
—
|
|
|
1,351
|
|
|
(6,317)
|
|
|
243,800
|
|
|
South America
Welding
|
|
195,895
|
|
|
(59,554)
|
|
|
—
|
|
|
57,461
|
|
|
(45,207)
|
|
|
148,595
|
|
|
The Harris Products
Group
|
|
308,177
|
|
|
6,722
|
|
|
—
|
|
|
(18,411)
|
|
|
(2,258)
|
|
|
294,230
|
|
|
Consolidated
|
|
$
|
2,852,671
|
|
|
$
|
(57,906)
|
|
|
$
|
42,184
|
|
|
$
|
49,926
|
|
|
$
|
(73,551)
|
|
|
$
|
2,813,324
|
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
Welding
|
|
|
|
|
0.3
|
%
|
|
2.6
|
%
|
|
0.8
|
%
|
|
(0.7%)
|
|
|
2.9
|
%
|
|
Europe
Welding
|
|
|
|
|
1.9
|
%
|
|
—
|
|
|
(0.9%)
|
|
|
(1.9%)
|
|
|
(0.9%)
|
|
|
Asia Pacific
Welding
|
|
|
|
|
(6.6%)
|
|
|
—
|
|
|
0.5
|
%
|
|
(2.4%)
|
|
|
(8.4%)
|
|
|
South America
Welding
|
|
|
|
|
(30.4%)
|
|
|
—
|
|
|
29.3
|
%
|
|
(23.1%)
|
|
|
(24.1%)
|
|
|
The Harris Products
Group
|
|
|
|
|
2.2
|
%
|
|
—
|
|
|
(6.0%)
|
|
|
(0.7%)
|
|
|
(4.5%)
|
|
|
Consolidated
|
|
|
|
|
(2.0%)
|
|
|
1.5
|
%
|
|
1.8
|
%
|
|
(2.6%)
|
|
|
(1.4%)
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/lincoln-electric-reports-fourth-quarter-and-full-year-2014-results-300036714.html
SOURCE Lincoln Electric Holdings, Inc.