CLEVELAND, July 27, 2015
/PRNewswire/ --
Second Quarter 2015 Key Metric Highlights
|
|
- Sales decreased 8.8% to $665 million, down
2.9% excluding unfavorable foreign exchange on weaker volumes
|
- Operating income margin of 14.6% of net
sales, or 14.7% on an adjusted basis
|
- Net operating working capital at 18.0% of net
sales
|
- Cash flows from operations for first half
2015 up 9.7% to $130 million
|
|
Lincoln Electric Holdings, Inc. (the "Company") (Nasdaq:
LECO) today reported second quarter 2015 net income of $70.9 million, or $0.94 diluted earnings per share (EPS).
This compares with net income of $77.3
million, or EPS of $0.96 in
the comparable 2014 period. Adjusted net income was
$71.8 million, or Adjusted EPS of
$0.95, compared to $81.5 million, or Adjusted EPS of $1.01, in the comparable 2014 period. The
2014 adjusted EPS includes $0.04 of
earnings from our Venezuelan operations, which operates in a
hyper-inflationary environment. This compares with earnings
of $0.02 per share from our
Venezuelan operations in the second quarter 2015.
Sales decreased 8.8% to $664.7
million in the second quarter 2015 versus $728.5 million in the comparable 2014 period
primarily due to lower volumes and unfavorable foreign currency
translation. Operating income for the second quarter
decreased 13.8% to $96.8 million, or
14.6% of sales, from $112.3 million,
or 15.4% of sales, in the comparable 2014 period. Adjusted
operating income decreased 15.9% to $98.0
million or 14.7% of sales, compared with $116.6 million, or 16.0% of sales in 2014.
The Company recognized charges to interest expense of $2.1 million or $0.03 per diluted share, representing adjustments
in the quarter to the amount expected to be paid to acquire
additional interests of a majority-owned subsidiary. Income
taxes in the quarter ending June 30, 2015 include discrete tax
benefits of $3.4 million, or
$0.05 per diluted share.
Operating Income and Adjusted operating income in the second
quarter 2014 included a $3.9 million
gain, $2.5 million after-tax or
$0.03 per diluted share, from an
insurance settlement.
Christopher L. Mapes, Chairman,
President and Chief Executive Officer stated, "Business conditions
were challenging in the quarter as growth in automation was offset
by weaker oil and gas and U.S. export demand. We initiated a
number of actions during the quarter to align our cost structure
with softer market conditions, which helped generate modest
sequential improvements in our profit margins and operating working
capital ratio to net sales. While we remain cautious on 2015
demand trends, we continue to invest in our strategic programs and
expect our efforts will help maximize profitability and shareholder
returns through the economic cycle."
Dividend and Share Repurchases
The Company's Board of Directors declared a quarterly cash
dividend of $0.29 per share, which
was paid on July 15, 2015 to
shareholders of record as of June 30,
2015. During the quarter, the Company returned $55.6 million to shareholders through the
repurchase of the Company's common shares.
Six Months 2015 Summary
Net income for the six months ended June
30, 2015 was $139.3 million,
or EPS of $1.82. This compares
with net income of $133.8 million, or
EPS of $1.65, in 2014. Adjusted
net income for the six months ended June 30,
2015 was $140.2 million, or
Adjusted EPS of $1.83, compared with
Adjusted net income of $155.6
million, or Adjusted EPS of $1.92, in 2014. Adjusted net income for the
six months ended June 30, 2015
includes earnings of $0.04 per
diluted share from the Company's Venezuelan operations as compared
with $0.18 per diluted share in the
comparable 2014 period.
Sales decreased 6.4% to $1.3
billion in the six months ended June
30, 2015 as compared with $1.4
billion in the comparable 2014 period. This result
primarily reflects unfavorable foreign exchange translation.
Operating income for the six months ended June 30, 2015 decreased to $187.3 million, or 14.2% of sales, compared with
$192.7 million, or 13.6% of sales, in
the comparable 2014 period. Adjusted operating income was
$188.5 million or 14.3% of sales,
compared with $214.7 million, or
15.2% of sales in 2014.
Webcast Information
A conference call to discuss second quarter 2015 financial
results will be webcast live today, July 27, 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 76673627. Telephone participants are asked to dial in
10-15 minutes prior to the start of the conference call.
Financial results for the second quarter 2015 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
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 for
the year ended December 31, 2014.
Lincoln Electric
Holdings, Inc.
|
Financial
Highlights
|
(In thousands,
except per share amounts)
|
(Unaudited)
|
Consolidated
Statements of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30,
|
|
Fav (Unfav) to
Prior Year
|
|
|
2015
|
|
% of Sales
|
|
2014
|
|
% of Sales
|
|
$
|
|
%
|
Net sales
|
|
$
|
664,740
|
|
|
100.0%
|
|
|
$
|
728,531
|
|
|
100.0%
|
|
|
$
|
(63,791)
|
|
|
(8.8%)
|
|
Cost of goods
sold
|
|
438,959
|
|
|
66.0%
|
|
|
478,264
|
|
|
65.6%
|
|
|
39,305
|
|
|
8.2%
|
|
Gross
profit
|
|
225,781
|
|
|
34.0%
|
|
|
250,267
|
|
|
34.4%
|
|
|
(24,486)
|
|
|
(9.8%)
|
|
Selling,
general & administrative expenses
|
|
127,755
|
|
|
19.2%
|
|
|
137,156
|
|
|
18.8%
|
|
|
9,401
|
|
|
6.9%
|
|
Rationalization and asset impairment
charges
|
|
1,239
|
|
|
0.2%
|
|
|
836
|
|
|
0.1%
|
|
|
(403)
|
|
|
(48.2%)
|
|
Operating
income
|
|
96,787
|
|
|
14.6%
|
|
|
112,275
|
|
|
15.4%
|
|
|
(15,488)
|
|
|
(13.8%)
|
|
Interest
income
|
|
738
|
|
|
0.1%
|
|
|
924
|
|
|
0.1%
|
|
|
(186)
|
|
|
(20.1%)
|
|
Equity earnings in
affiliates
|
|
979
|
|
|
0.1%
|
|
|
1,575
|
|
|
0.2%
|
|
|
(596)
|
|
|
(37.8%)
|
|
Other
income
|
|
317
|
|
|
—
|
|
|
1,078
|
|
|
0.1%
|
|
|
(761)
|
|
|
(70.6%)
|
|
Interest
expense
|
|
(4,387)
|
|
|
(0.7%)
|
|
|
(986)
|
|
|
(0.1%)
|
|
|
(3,401)
|
|
|
(344.9%)
|
|
Income before income
taxes
|
|
94,434
|
|
|
14.2%
|
|
|
114,866
|
|
|
15.8%
|
|
|
(20,432)
|
|
|
(17.8%)
|
|
Income
taxes
|
|
23,558
|
|
|
3.5%
|
|
|
37,577
|
|
|
5.2%
|
|
|
14,019
|
|
|
37.3%
|
|
Effective tax
rate
|
|
24.9%
|
|
|
|
|
32.7%
|
|
|
|
|
7.8%
|
|
|
|
Net income including
non-controlling interests
|
|
70,876
|
|
|
10.7%
|
|
|
77,289
|
|
|
10.6%
|
|
|
(6,413)
|
|
|
(8.3%)
|
|
Non-controlling
interests in subsidiaries' loss
|
|
(22)
|
|
|
—
|
|
|
(43)
|
|
|
—
|
|
|
21
|
|
|
48.8%
|
|
Net income
|
|
$
|
70,898
|
|
|
10.7%
|
|
|
$
|
77,332
|
|
|
10.6%
|
|
|
$
|
(6,434)
|
|
|
(8.3%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
|
0.95
|
|
|
|
|
$
|
0.97
|
|
|
|
|
$
|
(0.02)
|
|
|
(2.1%)
|
|
Diluted earnings per
share
|
|
$
|
0.94
|
|
|
|
|
$
|
0.96
|
|
|
|
|
$
|
(0.02)
|
|
|
(2.1%)
|
|
Weighted average
shares (basic)
|
|
75,000
|
|
|
|
|
79,873
|
|
|
|
|
|
|
|
Weighted average
shares (diluted)
|
|
75,773
|
|
|
|
|
80,773
|
|
|
|
|
|
|
|
|
|
Six months ended
June 30,
|
|
Fav (Unfav) to
Prior Year
|
|
|
2015
|
|
% of
Sales
|
|
2014
|
|
% of
Sales
|
|
$
|
|
%
|
Net sales
|
|
$
|
1,322,640
|
|
|
100.0%
|
|
|
$
|
1,413,593
|
|
|
100.0%
|
|
|
$
|
(90,953)
|
|
|
(6.4%)
|
|
Cost of goods
sold
|
|
876,469
|
|
|
66.3%
|
|
|
936,990
|
|
|
66.3%
|
|
|
60,521
|
|
|
6.5%
|
|
Gross
profit
|
|
446,171
|
|
|
33.7%
|
|
|
476,603
|
|
|
33.7%
|
|
|
(30,432)
|
|
|
(6.4%)
|
|
Selling,
general & administrative expenses
|
|
257,646
|
|
|
19.5%
|
|
|
283,071
|
|
|
20.0%
|
|
|
25,425
|
|
|
9.0%
|
|
Rationalization and asset impairment
charges
|
|
1,239
|
|
|
0.1%
|
|
|
819
|
|
|
0.1%
|
|
|
(420)
|
|
|
51.3%
|
|
Operating
income
|
|
187,286
|
|
|
14.2%
|
|
|
192,713
|
|
|
13.6%
|
|
|
(5,427)
|
|
|
(2.8%)
|
|
Interest
income
|
|
1,331
|
|
|
0.1%
|
|
|
1,838
|
|
|
0.1%
|
|
|
(507)
|
|
|
(27.6%)
|
|
Equity earnings in
affiliates
|
|
1,828
|
|
|
0.1%
|
|
|
3,136
|
|
|
0.2%
|
|
|
(1,308)
|
|
|
(41.7%)
|
|
Other
income
|
|
2,927
|
|
|
0.2%
|
|
|
2,161
|
|
|
0.2%
|
|
|
766
|
|
|
35.4%
|
|
Interest
expense
|
|
(6,231)
|
|
|
(0.5%)
|
|
|
(2,556)
|
|
|
(0.2%)
|
|
|
(3,675)
|
|
|
(143.8%)
|
|
Income before income
taxes
|
|
187,141
|
|
|
14.1%
|
|
|
197,292
|
|
|
14.0%
|
|
|
(10,151)
|
|
|
(5.1%)
|
|
Income
taxes
|
|
47,947
|
|
|
3.6%
|
|
|
63,579
|
|
|
4.5%
|
|
|
15,632
|
|
|
24.6%
|
|
Effective tax
rate
|
|
25.6%
|
|
|
|
|
32.2%
|
|
|
|
|
6.6%
|
|
|
|
Net income including
non-controlling interests
|
|
139,194
|
|
|
10.5%
|
|
|
133,713
|
|
|
9.5%
|
|
|
5,481
|
|
|
4.1%
|
|
Non-controlling
interests in subsidiaries' loss
|
|
(58)
|
|
|
—
|
|
|
(72)
|
|
|
—
|
|
|
14
|
|
|
19.4%
|
|
Net income
|
|
$
|
139,252
|
|
|
10.5%
|
|
|
$
|
133,785
|
|
|
9.5%
|
|
|
$
|
5,467
|
|
|
4.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
|
1.84
|
|
|
|
|
$
|
1.67
|
|
|
|
|
$
|
0.17
|
|
|
10.2%
|
|
Diluted earnings per
share
|
|
$
|
1.82
|
|
|
|
|
$
|
1.65
|
|
|
|
|
$
|
0.17
|
|
|
10.3%
|
|
Weighted average
shares (basic)
|
|
75,621
|
|
|
|
|
80,260
|
|
|
|
|
|
|
|
Weighted average
shares (diluted)
|
|
76,416
|
|
|
|
|
81,194
|
|
|
|
|
|
|
|
Lincoln Electric
Holdings, Inc.
|
Financial
Highlights
|
(In thousands,
except per share amounts)
|
(Unaudited)
|
Non-GAAP Financial
Measures
|
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Operating income as
reported
|
|
$
|
96,787
|
|
|
$
|
112,275
|
|
|
$
|
187,286
|
|
|
$
|
192,713
|
|
Special items
(pre-tax):
|
|
|
|
|
|
|
|
|
Rationalization and
asset impairment charges (1)
|
|
1,239
|
|
|
836
|
|
|
1,239
|
|
|
819
|
|
Venezuela foreign
exchange losses (2)
|
|
—
|
|
|
3,468
|
|
|
—
|
|
|
21,133
|
|
Adjusted operating
income (3)
|
|
$
|
98,026
|
|
|
$
|
116,579
|
|
|
$
|
188,525
|
|
|
$
|
214,665
|
|
|
|
|
|
|
|
|
|
|
Net income as
reported
|
|
$
|
70,898
|
|
|
$
|
77,332
|
|
|
$
|
139,252
|
|
|
$
|
133,785
|
|
Special items
(after-tax):
|
|
|
|
|
|
|
|
|
Rationalization and
asset impairment charges (1)
|
|
900
|
|
|
698
|
|
|
900
|
|
|
691
|
|
Venezuela foreign
exchange losses (2)
|
|
—
|
|
|
3,468
|
|
|
—
|
|
|
21,133
|
|
Adjusted net income
(3)
|
|
$
|
71,798
|
|
|
$
|
81,498
|
|
|
$
|
140,152
|
|
|
$
|
155,609
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share as reported
|
|
$
|
0.94
|
|
|
$
|
0.96
|
|
|
$
|
1.82
|
|
|
$
|
1.65
|
|
Special
items
|
|
0.01
|
|
|
0.05
|
|
|
0.01
|
|
|
0.27
|
|
Adjusted diluted
earnings per share (3)
|
|
$
|
0.95
|
|
|
$
|
1.01
|
|
|
$
|
1.83
|
|
|
$
|
1.92
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares (diluted)
|
|
75,773
|
|
|
80,773
|
|
|
76,416
|
|
|
81,194
|
|
(1)
|
The three and six
months ended June 30, 2015 and 2014 include net charges primarily
related to severance and other related costs. Rationalization
charges in 2014 are partially offset by gains related to the
sale of assets at rationalized operations.
|
(2)
|
The three and six
months ended June 30, 2014 represents the impact of the Venezuelan
remeasurement loss related to the adoption of a new foreign
exchange mechanism.
|
(3)
|
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
|
|
June 30,
2015
|
|
December 31,
2014
|
Cash and cash
equivalents
|
|
$
|
312,737
|
|
|
$
|
278,379
|
|
Total current
assets
|
|
1,089,236
|
|
|
1,098,677
|
|
Property, plant and
equipment, net
|
|
429,329
|
|
|
437,209
|
|
Total
assets
|
|
1,950,166
|
|
|
1,939,215
|
|
Total current
liabilities
|
|
470,556
|
|
|
492,419
|
|
Short-term debt
(1)
|
|
62,595
|
|
|
68,166
|
|
Long-term
debt
|
|
151,563
|
|
|
2,488
|
|
Total
equity
|
|
1,196,658
|
|
|
1,285,781
|
|
|
|
|
|
|
Net Operating
Working Capital
|
|
June 30,
2015
|
|
December 31,
2014
|
Accounts
receivable
|
|
$
|
329,223
|
|
|
$
|
321,862
|
|
Inventory
|
|
321,723
|
|
|
330,840
|
|
Trade accounts
payable
|
|
172,114
|
|
|
202,482
|
|
Net operating working
capital
|
|
$
|
478,832
|
|
|
$
|
450,220
|
|
|
|
|
|
|
Net operating working
capital to net sales (2)
|
|
18.0%
|
|
|
16.5%
|
|
|
|
|
|
|
Invested
Capital
|
|
June 30,
2015
|
|
December 31,
2014
|
Short-term debt
(1)
|
|
$
|
62,595
|
|
|
$
|
68,166
|
|
Long-term
debt
|
|
151,563
|
|
|
2,488
|
|
Total debt
|
|
214,158
|
|
|
70,654
|
|
Total
equity
|
|
1,196,658
|
|
|
1,285,781
|
|
Invested
capital
|
|
$
|
1,410,816
|
|
|
$
|
1,356,435
|
|
|
|
|
|
|
Total debt / invested
capital
|
|
15.2%
|
|
|
5.2%
|
|
Return on invested
capital (3)
|
|
18.9%
|
|
|
19.1%
|
|
(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
June 30,
|
|
|
2015
|
|
2014
|
OPERATING
ACTIVITIES:
|
|
|
|
|
Net income
|
|
$
|
70,898
|
|
|
$
|
77,332
|
|
Non-controlling
interests in subsidiaries' loss
|
|
(22)
|
|
|
(43)
|
|
Net income including
non-controlling interests
|
|
70,876
|
|
|
77,289
|
|
Adjustments to
reconcile Net income including non-controlling interests to Net
cash
provided
by operating activities:
|
|
|
|
|
Rationalization and
asset impairment charges
|
|
—
|
|
|
894
|
|
Depreciation and
amortization
|
|
15,686
|
|
|
17,969
|
|
Equity earnings in
affiliates, net
|
|
(272)
|
|
|
(701)
|
|
Pension
expense
|
|
4,925
|
|
|
2,676
|
|
Pension contributions
and payments
|
|
(26,471)
|
|
|
(2,083)
|
|
Other non-cash items,
net
|
|
12,772
|
|
|
(3,325)
|
|
Changes in operating
assets and liabilities, net of effects from
acquisitions:
|
|
|
|
|
Decrease
in accounts receivable
|
|
11,695
|
|
|
544
|
|
Decrease
(increase) in inventories
|
|
17,773
|
|
|
(2,298)
|
|
Decrease
in trade accounts payable
|
|
(18,301)
|
|
|
(3,341)
|
|
Net
change in other current assets and liabilities
|
|
(11,234)
|
|
|
21,833
|
|
Net
change in other long-term assets and liabilities
|
|
(163)
|
|
|
(4,483)
|
|
NET CASH PROVIDED BY
OPERATING ACTIVITIES
|
|
77,286
|
|
|
104,974
|
|
|
|
|
|
|
INVESTING
ACTIVITIES:
|
|
|
|
|
Capital
expenditures
|
|
(16,761)
|
|
|
(25,441)
|
|
Proceeds from sale of
property, plant and equipment
|
|
234
|
|
|
4,443
|
|
Other investing
activities
|
|
—
|
|
|
205
|
|
NET CASH USED BY
INVESTING ACTIVITIES
|
|
(16,527)
|
|
|
(20,793)
|
|
|
|
|
|
|
FINANCING
ACTIVITIES:
|
|
|
|
|
Net change in
borrowings
|
|
42,540
|
|
|
(2,087)
|
|
Proceeds from
exercise of stock options
|
|
2,303
|
|
|
1,054
|
|
Excess tax benefits
from stock-based compensation
|
|
756
|
|
|
826
|
|
Purchase of shares
for treasury
|
|
(55,615)
|
|
|
(68,312)
|
|
Cash dividends paid
to shareholders
|
|
(21,919)
|
|
|
(18,496)
|
|
Other financing
activities
|
|
(7,976)
|
|
|
—
|
|
NET CASH USED BY
FINANCING ACTIVITIES
|
|
(39,911)
|
|
|
(87,015)
|
|
|
|
|
|
|
Effect of exchange
rate changes on Cash and cash equivalents
|
|
2,872
|
|
|
1,732
|
|
INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS
|
|
23,720
|
|
|
(1,102)
|
|
Cash and cash
equivalents at beginning of period
|
|
289,017
|
|
|
205,387
|
|
Cash and cash
equivalents at end of period
|
|
$
|
312,737
|
|
|
$
|
204,285
|
|
|
|
|
|
|
Cash dividends paid
per share
|
|
$
|
0.29
|
|
|
$
|
0.23
|
|
Lincoln Electric
Holdings, Inc.
|
Financial
Highlights
|
(In thousands,
except per share amounts)
|
(Unaudited)
|
|
Condensed
Consolidated Statements of Cash Flows
|
|
|
|
Six months ended
June 30,
|
|
|
2015
|
|
2014
|
OPERATING
ACTIVITIES:
|
|
|
|
|
Net income
|
|
$
|
139,252
|
|
|
$
|
133,785
|
|
Non-controlling
interests in subsidiaries' loss
|
|
(58)
|
|
|
(72)
|
|
Net income including
non-controlling interests
|
|
139,194
|
|
|
133,713
|
|
Adjustments to
reconcile Net income including non-controlling interests to Net
cash
provided
by operating activities:
|
|
|
|
|
Rationalization and
asset impairment charges
|
|
30
|
|
|
859
|
|
Depreciation and
amortization
|
|
31,718
|
|
|
35,900
|
|
Equity earnings in
affiliates, net
|
|
(488)
|
|
|
(1,497)
|
|
Pension
expense
|
|
10,604
|
|
|
5,476
|
|
Pension contributions
and payments
|
|
(47,705)
|
|
|
(24,164)
|
|
Other non-cash items,
net
|
|
(5,790)
|
|
|
20,659
|
|
Changes in operating
assets and liabilities, net of effects from
acquisitions:
|
|
|
|
|
Increase
in accounts receivable
|
|
(13,682)
|
|
|
(43,341)
|
|
Decrease
(increase) in inventories
|
|
1,540
|
|
|
(17,455)
|
|
Decrease
in trade accounts payable
|
|
(31,217)
|
|
|
(15,449)
|
|
Net
change in other current assets and liabilities
|
|
43,835
|
|
|
27,380
|
|
Net
change in other long-term assets and liabilities
|
|
2,031
|
|
|
(3,476)
|
|
NET CASH PROVIDED BY
OPERATING ACTIVITIES
|
|
130,070
|
|
|
118,605
|
|
|
|
|
|
|
INVESTING
ACTIVITIES:
|
|
|
|
|
Capital
expenditures
|
|
(29,217)
|
|
|
(39,947)
|
|
Acquisition of
businesses, net of cash acquired
|
|
—
|
|
|
(892)
|
|
Proceeds from sale of
property, plant and equipment
|
|
1,421
|
|
|
5,509
|
|
Other investing
activities
|
|
2,024
|
|
|
778
|
|
NET CASH USED BY
INVESTING ACTIVITIES
|
|
(25,772)
|
|
|
(34,552)
|
|
|
|
|
|
|
FINANCING
ACTIVITIES:
|
|
|
|
|
Net change in
borrowings
|
|
144,050
|
|
|
(10,143)
|
|
Proceeds from
exercise of stock options
|
|
4,036
|
|
|
4,010
|
|
Excess tax benefits
from stock-based compensation
|
|
1,293
|
|
|
2,478
|
|
Purchase of shares
for treasury
|
|
(158,468)
|
|
|
(119,333)
|
|
Cash dividends paid
to shareholders
|
|
(44,248)
|
|
|
(37,119)
|
|
Other financing
activities
|
|
(7,996)
|
|
|
(2,330)
|
|
NET CASH USED BY
FINANCING ACTIVITIES
|
|
(61,333)
|
|
|
(162,437)
|
|
|
|
|
|
|
Effect of exchange
rate changes on Cash and cash equivalents
|
|
(8,607)
|
|
|
(17,156)
|
|
INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS
|
|
34,358
|
|
|
(95,540)
|
|
Cash and cash
equivalents at beginning of period
|
|
278,379
|
|
|
299,825
|
|
Cash and cash
equivalents at end of period
|
|
$
|
312,737
|
|
|
$
|
204,285
|
|
|
|
|
|
|
Cash dividends paid
per share
|
|
$
|
0.58
|
|
|
$
|
0.46
|
|
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
June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
415,075
|
|
|
$
|
90,903
|
|
|
$
|
49,043
|
|
|
$
|
37,907
|
|
|
$
|
71,812
|
|
|
$
|
—
|
|
|
$
|
664,740
|
|
Inter-segment
sales
|
|
25,613
|
|
|
4,463
|
|
|
2,964
|
|
|
118
|
|
|
2,716
|
|
|
(35,874)
|
|
|
—
|
|
Total
|
|
$
|
440,688
|
|
|
$
|
95,366
|
|
|
$
|
52,007
|
|
|
$
|
38,025
|
|
|
$
|
74,528
|
|
|
$
|
(35,874)
|
|
|
$
|
664,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1)
|
|
$
|
77,494
|
|
|
$
|
8,242
|
|
|
$
|
2,244
|
|
|
$
|
1,378
|
|
|
$
|
8,250
|
|
|
$
|
475
|
|
|
$
|
98,083
|
|
As a percent of total
sales
|
|
17.6%
|
|
|
8.6%
|
|
|
4.3%
|
|
|
3.6%
|
|
|
11.1%
|
|
|
|
|
14.8%
|
|
Special items charge
(gain) (2)
|
|
$
|
—
|
|
|
$
|
1,239
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,239
|
|
EBIT, as adjusted
(4)
|
|
$
|
77,494
|
|
|
$
|
9,481
|
|
|
$
|
2,244
|
|
|
$
|
1,378
|
|
|
$
|
8,250
|
|
|
$
|
475
|
|
|
$
|
99,322
|
|
As a percent of total
sales
|
|
17.6%
|
|
|
9.9%
|
|
|
4.3%
|
|
|
3.6%
|
|
|
11.1%
|
|
|
|
|
14.9%
|
|
Three months ended June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
429,490
|
|
|
$
|
115,574
|
|
|
$
|
66,997
|
|
|
$
|
39,051
|
|
|
$
|
77,419
|
|
|
$
|
—
|
|
|
$
|
728,531
|
|
Inter-segment
sales
|
|
33,360
|
|
|
5,494
|
|
|
3,600
|
|
|
35
|
|
|
2,262
|
|
|
(44,751)
|
|
|
—
|
|
Total
|
|
$
|
462,850
|
|
|
$
|
121,068
|
|
|
$
|
70,597
|
|
|
$
|
39,086
|
|
|
$
|
79,681
|
|
|
$
|
(44,751)
|
|
|
$
|
728,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1)
|
|
$
|
91,216
|
|
|
$
|
13,934
|
|
|
$
|
473
|
|
|
$
|
1,527
|
|
|
$
|
7,178
|
|
|
$
|
600
|
|
|
$
|
114,928
|
|
As a percent of total
sales
|
|
19.7%
|
|
|
11.5%
|
|
|
0.7%
|
|
|
3.9%
|
|
|
9.0%
|
|
|
|
|
15.8%
|
|
Special items charge
(gain) (3)
|
|
$
|
(21)
|
|
|
$
|
965
|
|
|
$
|
(108)
|
|
|
$
|
3,468
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,304
|
|
EBIT, as adjusted
(4)
|
|
$
|
91,195
|
|
|
$
|
14,899
|
|
|
$
|
365
|
|
|
$
|
4,995
|
|
|
$
|
7,178
|
|
|
$
|
600
|
|
|
$
|
119,232
|
|
As a percent of total
sales
|
|
19.7%
|
|
|
12.3%
|
|
|
0.5%
|
|
|
12.8%
|
|
|
9.0%
|
|
|
|
|
16.4%
|
|
Six months ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
828,063
|
|
|
$
|
179,319
|
|
|
$
|
98,293
|
|
|
$
|
75,337
|
|
|
$
|
141,628
|
|
|
$
|
—
|
|
|
$
|
1,322,640
|
|
Inter-segment
sales
|
|
51,742
|
|
|
8,056
|
|
|
6,234
|
|
|
118
|
|
|
4,727
|
|
|
(70,877)
|
|
|
—
|
|
Total
|
|
$
|
879,805
|
|
|
$
|
187,375
|
|
|
$
|
104,527
|
|
|
$
|
75,455
|
|
|
$
|
146,355
|
|
|
$
|
(70,877)
|
|
|
$
|
1,322,640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1)
|
|
$
|
148,678
|
|
|
$
|
16,990
|
|
|
$
|
5,372
|
|
|
$
|
4,528
|
|
|
$
|
15,799
|
|
|
$
|
674
|
|
|
$
|
192,041
|
|
As a percent of total
sales
|
|
16.9%
|
|
|
9.1%
|
|
|
5.1%
|
|
|
6.0%
|
|
|
10.8%
|
|
|
|
|
14.5%
|
|
Special items charge
(gain) (2)
|
|
$
|
—
|
|
|
$
|
1,239
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,239
|
|
EBIT, as adjusted
(4)
|
|
$
|
148,678
|
|
|
$
|
18,229
|
|
|
$
|
5,372
|
|
|
$
|
4,528
|
|
|
$
|
15,799
|
|
|
$
|
674
|
|
|
$
|
193,280
|
|
As a percent of total
sales
|
|
16.9%
|
|
|
9.7%
|
|
|
5.1%
|
|
|
6.0%
|
|
|
10.8%
|
|
|
|
|
14.6%
|
|
Six months ended June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
831,396
|
|
|
$
|
220,980
|
|
|
$
|
128,283
|
|
|
$
|
83,044
|
|
|
$
|
149,890
|
|
|
$
|
—
|
|
|
$
|
1,413,593
|
|
Inter-segment
sales
|
|
66,303
|
|
|
11,354
|
|
|
8,049
|
|
|
64
|
|
|
4,380
|
|
|
(90,150)
|
|
|
—
|
|
Total
|
|
$
|
897,699
|
|
|
$
|
232,334
|
|
|
$
|
136,332
|
|
|
$
|
83,108
|
|
|
$
|
154,270
|
|
|
$
|
(90,150)
|
|
|
$
|
1,413,593
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1)
|
|
$
|
162,627
|
|
|
$
|
23,187
|
|
|
$
|
(158)
|
|
|
$
|
(4,373)
|
|
|
$
|
13,236
|
|
|
$
|
3,491
|
|
|
$
|
198,010
|
|
As a percent of total
sales
|
|
18.1%
|
|
|
10.0%
|
|
|
(0.1%)
|
|
|
(5.3%)
|
|
|
8.6%
|
|
|
|
|
14.0%
|
|
Special items charge
(gain) (3)
|
|
$
|
(68)
|
|
|
$
|
1,004
|
|
|
$
|
(117)
|
|
|
$
|
21,133
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,952
|
|
EBIT, as adjusted
(4)
|
|
$
|
162,559
|
|
|
$
|
24,191
|
|
|
$
|
(275)
|
|
|
$
|
16,760
|
|
|
$
|
13,236
|
|
|
$
|
3,491
|
|
|
$
|
219,962
|
|
As a percent of total
sales
|
|
18.1%
|
|
|
10.4%
|
|
|
(0.2%)
|
|
|
20.2%
|
|
|
8.6%
|
|
|
|
|
15.6%
|
|
|
(1)
|
EBIT is defined as
Operating income plus Equity earnings in affiliates and Other
income.
|
|
(2)
|
Special items in the
three and six months ended June 30, 2015 represent rationalization
charges related to employee severance and other related
costs.
|
|
(3)
|
Special items in the
three and six months ended June 30, 2014 include net charges
primarily related to severance and other related costs from the
consolidation of manufacturing operations partially offset by
gains related to the sale of assets at rationalized operations and
the impact of the Venezuelan remeasurement losses related to the
adoption of a new foreign exchange mechanism.
|
|
(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
June 30th Change in Net Sales by Segment
|
|
|
|
|
|
|
|
|
|
|
|
Change in Net
Sales due to:
|
|
|
|
|
Net Sales
2014
|
|
Volume
|
|
Acquisitions
|
|
Price
|
|
Foreign
Exchange
|
|
Net Sales
2015
|
Operating
Segments
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
Welding
|
|
$
|
429,490
|
|
|
$
|
(21,853)
|
|
|
$
|
14,250
|
|
|
$
|
1,457
|
|
|
$
|
(8,269)
|
|
|
$
|
415,075
|
|
Europe
Welding
|
|
115,574
|
|
|
(3,343)
|
|
|
—
|
|
|
(582)
|
|
|
(20,746)
|
|
|
90,903
|
|
Asia Pacific
Welding
|
|
66,997
|
|
|
(15,292)
|
|
|
—
|
|
|
(617)
|
|
|
(2,045)
|
|
|
49,043
|
|
South America
Welding
|
|
39,051
|
|
|
(8,601)
|
|
|
—
|
|
|
15,696
|
|
|
(8,239)
|
|
|
37,907
|
|
The Harris Products
Group
|
|
77,419
|
|
|
1,743
|
|
|
—
|
|
|
(3,981)
|
|
|
(3,369)
|
|
|
71,812
|
|
Consolidated
|
|
$
|
728,531
|
|
|
$
|
(47,346)
|
|
|
$
|
14,250
|
|
|
$
|
11,973
|
|
|
$
|
(42,668)
|
|
|
$
|
664,740
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
Welding
|
|
|
|
(5.1%)
|
|
|
3.3%
|
|
|
0.3%
|
|
|
(1.9%)
|
|
|
(3.4%)
|
|
Europe
Welding
|
|
|
|
(2.9%)
|
|
|
—
|
|
|
(0.5%)
|
|
|
(18.0%)
|
|
|
(21.3%)
|
|
Asia Pacific
Welding
|
|
|
|
(22.8%)
|
|
|
—
|
|
|
(0.9%)
|
|
|
(3.1%)
|
|
|
(26.8%)
|
|
South America
Welding
|
|
|
|
(22.0%)
|
|
|
—
|
|
|
40.2%
|
|
|
(21.1%)
|
|
|
(2.9%)
|
|
The Harris Products
Group
|
|
|
|
2.3%
|
|
|
—
|
|
|
(5.1%)
|
|
|
(4.4%)
|
|
|
(7.2%)
|
|
Consolidated
|
|
|
|
(6.5%)
|
|
|
2.0%
|
|
|
1.6%
|
|
|
(5.9%)
|
|
|
(8.8%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30th Change in Net Sales by Segment
|
|
|
|
|
|
|
|
|
|
|
|
Change in Net
Sales due to:
|
|
|
|
|
Net Sales
2014
|
|
Volume
|
|
Acquisitions
|
|
Price
|
|
Foreign
Exchange
|
|
Net Sales
2015
|
Operating
Segments
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
Welding
|
|
$
|
831,396
|
|
|
$
|
(20,926)
|
|
|
$
|
26,721
|
|
|
$
|
5,480
|
|
|
$
|
(14,608)
|
|
|
$
|
828,063
|
|
Europe
Welding
|
|
220,980
|
|
|
(141)
|
|
|
—
|
|
|
(883)
|
|
|
(40,637)
|
|
|
179,319
|
|
Asia Pacific
Welding
|
|
128,283
|
|
|
(24,395)
|
|
|
—
|
|
|
(1,286)
|
|
|
(4,309)
|
|
|
98,293
|
|
South America
Welding
|
|
83,044
|
|
|
(13,294)
|
|
|
—
|
|
|
37,170
|
|
|
(31,583)
|
|
|
75,337
|
|
The Harris Products
Group
|
|
149,890
|
|
|
6,217
|
|
|
—
|
|
|
(8,570)
|
|
|
(5,909)
|
|
|
141,628
|
|
Consolidated
|
|
$
|
1,413,593
|
|
|
$
|
(52,539)
|
|
|
$
|
26,721
|
|
|
$
|
31,911
|
|
|
$
|
(97,046)
|
|
|
$
|
1,322,640
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
Welding
|
|
|
|
(2.5%)
|
|
|
3.2%
|
|
|
0.7%
|
|
|
(1.8%)
|
|
|
(0.4%)
|
|
Europe
Welding
|
|
|
|
(0.1%)
|
|
|
—
|
|
|
(0.4%)
|
|
|
(18.4%)
|
|
|
(18.9%)
|
|
Asia Pacific
Welding
|
|
|
|
(19.0%)
|
|
|
—
|
|
|
(1.0%)
|
|
|
(3.4%)
|
|
|
(23.4%)
|
|
South America
Welding
|
|
|
|
(16.0%)
|
|
|
—
|
|
|
44.8%
|
|
|
(38.0%)
|
|
|
(9.3%)
|
|
The Harris Products
Group
|
|
|
|
4.1%
|
|
|
—
|
|
|
(5.7%)
|
|
|
(3.9%)
|
|
|
(5.5%)
|
|
Consolidated
|
|
|
|
(3.7%)
|
|
|
1.9%
|
|
|
2.3%
|
|
|
(6.9%)
|
|
|
(6.4%)
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/lincoln-electric-reports-second-quarter-2015-results-300118815.html
SOURCE Lincoln Electric Holdings, Inc.