Ohio | 34-1860551 | |
(State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) |
Item 2.02 | Results of Operations and Financial Condition. | |
On February 14, 2014, Lincoln Electric Holdings, Inc. (the “Company”) issued a press release reporting its financial results for the quarter ended December 31, 2013. A copy of the Company’s press release issued on February 14, 2014 is attached hereto as Exhibit 99.1 and incorporated herein by reference. The press release is also available through the Company’s website at www.lincolnelectric.com. The information in this Current Report on Form 8-K, including the Exhibit, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act. | ||
Item 9.01 | Financial Statements and Exhibits. | |
(d) Exhibits | ||
99.1 The Company’s press release dated February 14, 2014. |
LINCOLN ELECTRIC HOLDINGS, INC. | ||
/s/ Vincent K. Petrella | ||
Vincent K. Petrella | ||
Senior Vice President, Chief Financial Officer and Treasurer | ||
(principal financial and accounting officer) | ||
February 14, 2014 |
Exhibit No. | Exhibit | ||
99.1 | The Company’s press release dated February 14, 2014. | ||
Fourth Quarter and Full Year Highlights vs. Prior Year |
§ Q4 Operating income up 39% to $119 million, or 16.6% of sales on a 4% increase in sales |
§ Q4 Adjusted operating income up 32% to $120 million and up 350 bps to 16.8% of sales |
§ Q4 Net income up 42% to $88 million; Adjusted net income $89 million, including $18 million from Venezuela |
§ FY2013 Net income up 14% to $294 million; Adjusted net income $313 million, including $38 million from Venezuela |
§ Q4 Cash flow from operations up 15% to $97 million in the fourth quarter; up 4% to $339 million in 2013 |
§ Returned $71 million to shareholders through share repurchases and dividends in Q4; returned $217 million in 2013 |
Three months ended December 31, | Fav (Unfav) to Prior Year | ||||||||||||||||||||
2013 | % of Sales | 2012 | % of Sales | $ | % | ||||||||||||||||
Net sales | $ | 714,791 | 100.0 | % | $ | 684,648 | 100.0 | % | $ | 30,143 | 4.4 | % | |||||||||
Cost of goods sold | 471,744 | 66.0 | % | 471,616 | 68.9 | % | (128 | ) | — | ||||||||||||
Gross profit | 243,047 | 34.0 | % | 213,032 | 31.1 | % | 30,015 | 14.1 | % | ||||||||||||
Selling, general & administrative expenses | 123,883 | 17.3 | % | 122,290 | 17.9 | % | (1,593 | ) | (1.3 | %) | |||||||||||
Rationalization and asset impairment charges | 259 | — | 5,037 | 0.7 | % | 4,778 | 94.9 | % | |||||||||||||
Operating income | 118,905 | 16.6 | % | 85,705 | 12.5 | % | 33,200 | 38.7 | % | ||||||||||||
Interest income | 868 | 0.1 | % | 1,340 | 0.2 | % | (472 | ) | (35.2 | %) | |||||||||||
Equity earnings in affiliates | 1,119 | 0.2 | % | 743 | 0.1 | % | 376 | 50.6 | % | ||||||||||||
Other income | 1,053 | 0.1 | % | 670 | 0.1 | % | 383 | 57.2 | % | ||||||||||||
Interest expense | (557 | ) | (0.1 | %) | (853 | ) | (0.1 | %) | 296 | 34.7 | % | ||||||||||
Income before income taxes | 121,388 | 17.0 | % | 87,605 | 12.8 | % | 33,783 | 38.6 | % | ||||||||||||
Income taxes | 33,323 | 4.7 | % | 25,639 | 3.7 | % | (7,684 | ) | (30.0 | %) | |||||||||||
Effective tax rate | 27.5 | % | 29.3 | % | 1.8 | % | |||||||||||||||
Net income including non-controlling interests | 88,065 | 12.3 | % | 61,966 | 9.1 | % | 26,099 | 42.1 | % | ||||||||||||
Non-controlling interests in subsidiaries’ loss | (259 | ) | — | (118 | ) | — | (141 | ) | (119.5 | %) | |||||||||||
Net income | $ | 88,324 | 12.4 | % | $ | 62,084 | 9.1 | % | $ | 26,240 | 42.3 | % | |||||||||
Basic earnings per share | $ | 1.09 | $ | 0.75 | $ | 0.34 | 45.3 | % | |||||||||||||
Diluted earnings per share | $ | 1.07 | $ | 0.74 | $ | 0.33 | 44.6 | % | |||||||||||||
Weighted average shares (basic) | 81,132 | 82,651 | |||||||||||||||||||
Weighted average shares (diluted) | 82,184 | 83,677 | |||||||||||||||||||
Twelve months ended December 31, | Fav (Unfav) to Prior Year | ||||||||||||||||||||
2013 | % of Sales | 2012 | % of Sales | $ | % | ||||||||||||||||
Net sales | $ | 2,852,671 | 100.0 | % | $ | 2,853,367 | 100.0 | % | $ | (696 | ) | — | |||||||||
Cost of goods sold | 1,910,017 | 67.0 | % | 1,986,711 | 69.6 | % | 76,694 | 3.9 | % | ||||||||||||
Gross profit | 942,654 | 33.0 | % | 866,656 | 30.4 | % | 75,998 | 8.8 | % | ||||||||||||
Selling, general & administrative expenses | 527,206 | 18.5 | % | 495,221 | 17.4 | % | (31,985 | ) | (6.5 | %) | |||||||||||
Rationalization and asset impairment charges | 8,463 | 0.3 | % | 9,354 | 0.3 | % | 891 | 9.5 | % | ||||||||||||
Operating income | 406,985 | 14.3 | % | 362,081 | 12.7 | % | 44,904 | 12.4 | % | ||||||||||||
Interest income | 3,320 | 0.1 | % | 3,988 | 0.1 | % | (668 | ) | (16.8 | %) | |||||||||||
Equity earnings in affiliates | 4,806 | 0.2 | % | 5,007 | 0.2 | % | (201 | ) | (4.0 | %) | |||||||||||
Other income | 4,194 | 0.1 | % | 2,685 | 0.1 | % | 1,509 | 56.2 | % | ||||||||||||
Interest expense | (2,864 | ) | (0.1 | %) | (4,191 | ) | (0.1 | %) | 1,327 | 31.7 | % | ||||||||||
Income before income taxes | 416,441 | 14.6 | % | 369,570 | 13.0 | % | 46,871 | 12.7 | % | ||||||||||||
Income taxes | 124,754 | 4.4 | % | 112,354 | 3.9 | % | (12,400 | ) | (11.0 | %) | |||||||||||
Effective tax rate | 30.0 | % | 30.4 | % | 0.4 | % | |||||||||||||||
Net income including non-controlling interests | 291,687 | 10.2 | % | 257,216 | 9.0 | % | 34,471 | 13.4 | % | ||||||||||||
Non-controlling interests in subsidiaries’ loss | (2,093 | ) | (0.1 | %) | (195 | ) | — | (1,898 | ) | (973.3 | %) | ||||||||||
Net income | $ | 293,780 | 10.3 | % | $ | 257,411 | 9.0 | % | $ | 36,369 | 14.1 | % | |||||||||
Basic earnings per share | $ | 3.58 | $ | 3.10 | $ | 0.48 | 15.5 | % | |||||||||||||
Diluted earnings per share | $ | 3.54 | $ | 3.06 | $ | 0.48 | 15.7 | % | |||||||||||||
Weighted average shares (basic) | 81,978 | 83,087 | |||||||||||||||||||
Weighted average shares (diluted) | 83,042 | 84,175 | |||||||||||||||||||
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Operating income as reported | $ | 118,905 | $ | 85,705 | $ | 406,985 | $ | 362,081 | ||||||||
Special items (pre-tax): | ||||||||||||||||
Rationalization and asset impairment charges (1) | 259 | 5,037 | 8,463 | 9,354 | ||||||||||||
Loss on the sale of land (2) | 705 | — | 705 | — | ||||||||||||
Venezuelan currency devaluation (3) | — | — | 12,198 | — | ||||||||||||
Venezuelan statutory severance obligation (4) | — | — | — | 1,381 | ||||||||||||
Adjusted operating income (6) | $ | 119,869 | $ | 90,742 | $ | 428,351 | $ | 372,816 | ||||||||
Net income as reported | $ | 88,324 | $ | 62,084 | $ | 293,780 | $ | 257,411 | ||||||||
Special items (after-tax): | ||||||||||||||||
Rationalization and asset impairment charges (1) | 223 | 3,823 | 7,573 | 7,442 | ||||||||||||
Loss on the sale of land (2) | 705 | — | 705 | — | ||||||||||||
Venezuelan currency devaluation (3) | — | — | 12,198 | — | ||||||||||||
Venezuelan statutory severance obligation (4) | — | — | — | 906 | ||||||||||||
Special items attributable to non-controlling interests (5) | (47 | ) | — | (1,068 | ) | — | ||||||||||
Adjusted net income (6) | $ | 89,205 | $ | 65,907 | $ | 313,188 | $ | 265,759 | ||||||||
Diluted earnings per share as reported | $ | 1.07 | $ | 0.74 | $ | 3.54 | $ | 3.06 | ||||||||
Special items | 0.02 | 0.05 | 0.23 | 0.10 | ||||||||||||
Adjusted diluted earnings per share (6) | $ | 1.09 | $ | 0.79 | $ | 3.77 | $ | 3.16 | ||||||||
Weighted average shares (diluted) | 82,184 | 83,677 | 83,042 | 84,175 |
(1) | 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 at rationalized operations. |
(2) | Represents the loss realized related to the sale of land. |
(3) | Represents the impact of the devaluation of the Venezuelan currency. |
(4) | Represents an unfavorable adjustment due to a change in Venezuelan labor law, which provides for increased employee severance obligations. |
(5) | The three months ended December 31, 2013 represents the portion of land sale attributable to non-controlling interests. The three and twelve months ended December 31, 2013 include the portion of land sale and the long-lived asset impairments attributable to non-controlling interests. |
(6) | 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. |
Selected Consolidated Balance Sheet Data | December 31, 2013 | December 31, 2012 | ||||||
Cash and cash equivalents | $ | 299,825 | $ | 286,464 | ||||
Total current assets | 1,130,775 | 1,132,816 | ||||||
Property, plant and equipment, net | 484,005 | 486,236 | ||||||
Total assets | 2,151,867 | 2,089,863 | ||||||
Total current liabilities | 456,779 | 440,267 | ||||||
Short-term debt (1) | 15,296 | 18,676 | ||||||
Long-term debt | 3,791 | 1,599 | ||||||
Total equity | 1,530,688 | 1,358,321 | ||||||
Net Operating Working Capital | December 31, 2013 | December 31, 2012 | ||||||
Accounts receivable | $ | 367,134 | $ | 360,662 | ||||
Inventory | 349,963 | 364,890 | ||||||
Trade accounts payable | 212,799 | 209,647 | ||||||
Net operating working capital | $ | 504,298 | $ | 515,905 | ||||
Net operating working capital to net sales (2) | 17.6 | % | 18.8 | % | ||||
Invested Capital | December 31, 2013 | December 31, 2012 | ||||||
Short-term debt (1) | $ | 15,296 | $ | 18,676 | ||||
Long-term debt | 3,791 | 1,599 | ||||||
Total debt | 19,087 | 20,275 | ||||||
Total equity | 1,530,688 | 1,358,321 | ||||||
Invested capital | $ | 1,549,775 | $ | 1,378,596 | ||||
Total debt / invested capital | 1.2 | % | 1.5 | % | ||||
Return on invested capital (3) | 18.9 | % | 18.7 | % |
(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. |
Three months ended December 31, | ||||||||
2013 | 2012 | |||||||
OPERATING ACTIVITIES: | ||||||||
Net income | $ | 88,324 | $ | 62,084 | ||||
Non-controlling interests in subsidiaries’ loss | (259 | ) | (118 | ) | ||||
Net income including non-controlling interests | 88,065 | 61,966 | ||||||
Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities: | ||||||||
Rationalization and asset impairment charges | 43 | 1,383 | ||||||
Depreciation and amortization | 17,002 | 17,114 | ||||||
Equity (earnings) loss in affiliates, net | (347 | ) | 1,609 | |||||
Pension expense | 7,513 | 8,849 | ||||||
Pension contributions and payments | (2,939 | ) | (11,832 | ) | ||||
Other non-cash items, net | (296 | ) | 3,677 | |||||
Changes in operating assets and liabilities, net of effects from acquisitions: | ||||||||
Decrease in accounts receivable | 12,545 | 44,009 | ||||||
Decrease in inventories | 23,199 | 35,118 | ||||||
Increase in trade accounts payable | 33,497 | 17,292 | ||||||
Net change in other current assets and liabilities | (80,601 | ) | (61,032 | ) | ||||
Net change in other long-term assets and liabilities | (878 | ) | (34,010 | ) | ||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 96,803 | 84,143 | ||||||
INVESTING ACTIVITIES: | ||||||||
Capital expenditures | (16,324 | ) | (13,408 | ) | ||||
Acquisition of businesses, net of cash acquired | (48,225 | ) | (81,751 | ) | ||||
Proceeds from sale of property, plant and equipment | 597 | 849 | ||||||
Other investing activities | 2,500 | — | ||||||
NET CASH USED BY INVESTING ACTIVITIES | (61,452 | ) | (94,310 | ) | ||||
FINANCING ACTIVITIES: | ||||||||
Net change in borrowings | 511 | (1,302 | ) | |||||
Proceeds from exercise of stock options | 4,220 | 6,081 | ||||||
Excess tax benefits from stock-based compensation | 3,629 | 2,225 | ||||||
Purchase of shares for treasury | (54,238 | ) | (20,863 | ) | ||||
Cash dividends paid to shareholders | (16,290 | ) | (30,602 | ) | ||||
Transactions with non-controlling interests | (3,278 | ) | — | |||||
NET CASH USED BY FINANCING ACTIVITIES | (65,446 | ) | (44,461 | ) | ||||
Effect of exchange rate changes on Cash and cash equivalents | (389 | ) | 417 | |||||
DECREASE IN CASH AND CASH EQUIVALENTS | (30,484 | ) | (54,211 | ) | ||||
Cash and cash equivalents at beginning of period | 330,309 | 340,675 | ||||||
Cash and cash equivalents at end of period | $ | 299,825 | $ | 286,464 | ||||
Cash dividends paid per share | $ | 0.20 | $ | 0.37 |
Twelve months ended December 31, | ||||||||
2013 | 2012 | |||||||
OPERATING ACTIVITIES: | ||||||||
Net income | $ | 293,780 | $ | 257,411 | ||||
Non-controlling interests in subsidiaries’ loss | (2,093 | ) | (195 | ) | ||||
Net income including non-controlling interests | 291,687 | 257,216 | ||||||
Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities: | ||||||||
Rationalization and asset impairment charges | 5,092 | 1,740 | ||||||
Depreciation and amortization | 68,883 | 65,334 | ||||||
Equity (earnings) loss in affiliates, net | (1,660 | ) | 160 | |||||
Pension expense | 29,774 | 35,439 | ||||||
Pension contributions and payments | (87,356 | ) | (69,646 | ) | ||||
Other non-cash items, net | 29,461 | 9,588 | ||||||
Changes in operating assets and liabilities, net of effects from acquisitions: | ||||||||
(Increase) decrease in accounts receivable | (5,437 | ) | 57,759 | |||||
Decrease in inventories | 13,310 | 28,286 | ||||||
Increase in trade accounts payable | 794 | 16,110 | ||||||
Net change in other current assets and liabilities | (4,974 | ) | 12,381 | |||||
Net change in other long-term assets and liabilities | (680 | ) | (86,883 | ) | ||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 338,894 | 327,484 | ||||||
INVESTING ACTIVITIES: | ||||||||
Capital expenditures | (76,015 | ) | (52,715 | ) | ||||
Acquisition of businesses, net of cash acquired | (53,161 | ) | (134,602 | ) | ||||
Proceeds from sale of property, plant and equipment | 1,393 | 1,387 | ||||||
Other investing activities | (1,717 | ) | (1,541 | ) | ||||
NET CASH USED BY INVESTING ACTIVITIES | (129,500 | ) | (187,471 | ) | ||||
FINANCING ACTIVITIES: | ||||||||
Net change in borrowings | (1,840 | ) | (89,303 | ) | ||||
Proceeds from exercise of stock options | 20,297 | 18,776 | ||||||
Excess tax benefits from stock-based compensation | 10,602 | 7,819 | ||||||
Purchase of shares for treasury | (167,879 | ) | (81,018 | ) | ||||
Cash dividends paid to shareholders | (49,277 | ) | (73,112 | ) | ||||
Transactions with non-controlling interests | (6,087 | ) | — | |||||
NET CASH USED BY FINANCING ACTIVITIES | (194,184 | ) | (216,838 | ) | ||||
Effect of exchange rate changes on Cash and cash equivalents | (1,849 | ) | 2,188 | |||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 13,361 | (74,637 | ) | |||||
Cash and cash equivalents at beginning of period | 286,464 | 361,101 | ||||||
Cash and cash equivalents at end of period | $ | 299,825 | $ | 286,464 | ||||
Cash dividends paid per share | $ | 0.60 | $ | 0.88 |
North America Welding | Europe Welding | Asia Pacific Welding | South America Welding | The Harris Products Group | Corporate / Eliminations | Consolidated | ||||||||||||||||||||||
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 charge (2) | $ | (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 | % | ||||||||||||||||
Three months ended December 31, 2012 | ||||||||||||||||||||||||||||
Net sales | $ | 392,939 | $ | 107,507 | $ | 70,223 | $ | 39,931 | $ | 74,048 | $ | — | $ | 684,648 | ||||||||||||||
Inter-segment sales | 29,676 | 3,870 | 3,188 | — | 1,944 | (38,678 | ) | — | ||||||||||||||||||||
Total | $ | 422,615 | $ | 111,377 | $ | 73,411 | $ | 39,931 | $ | 75,992 | $ | (38,678 | ) | $ | 684,648 | |||||||||||||
EBIT (1) | $ | 75,925 | $ | 3,914 | $ | (5,090 | ) | $ | 4,829 | $ | 5,544 | $ | 1,996 | $ | 87,118 | |||||||||||||
As a percent of total sales | 18.0 | % | 3.5 | % | (6.9 | %) | 12.1 | % | 7.3 | % | 12.7 | % | ||||||||||||||||
Special items charge (3) | $ | 273 | $ | 1,068 | $ | 3,696 | $ | — | $ | — | $ | — | $ | 5,037 | ||||||||||||||
EBIT, as adjusted (4) | $ | 76,198 | $ | 4,982 | $ | (1,394 | ) | $ | 4,829 | $ | 5,544 | $ | 1,996 | $ | 92,155 | |||||||||||||
As a percent of total sales | 18.0 | % | 4.5 | % | (1.9 | %) | 12.1 | % | 7.3 | % | 13.5 | % | ||||||||||||||||
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 charge (2) | $ | 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 | % | ||||||||||||||||
Twelve months ended December 31, 2012 | ||||||||||||||||||||||||||||
Net sales | $ | 1,580,818 | $ | 452,227 | $ | 324,482 | $ | 161,483 | $ | 334,357 | $ | — | $ | 2,853,367 | ||||||||||||||
Inter-segment sales | 131,062 | 16,048 | 14,829 | 38 | 8,549 | (170,526 | ) | — | ||||||||||||||||||||
Total | $ | 1,711,880 | $ | 468,275 | $ | 339,311 | $ | 161,521 | $ | 342,906 | $ | (170,526 | ) | $ | 2,853,367 | |||||||||||||
EBIT (1) | $ | 292,243 | $ | 33,765 | $ | 2,254 | $ | 16,920 | $ | 29,477 | $ | (4,886 | ) | $ | 369,773 | |||||||||||||
As a percent of total sales | 17.1 | % | 7.2 | % | 0.7 | % | 10.5 | % | 8.6 | % | 13.0 | % | ||||||||||||||||
Special items charge (3) | $ | 827 | $ | 3,534 | $ | 4,993 | $ | 1,381 | $ | — | $ | — | $ | 10,735 | ||||||||||||||
EBIT, as adjusted (4) | $ | 293,070 | $ | 37,299 | $ | 7,247 | $ | 18,301 | $ | 29,477 | $ | (4,886 | ) | $ | 380,508 | |||||||||||||
As a percent of total sales | 17.1 | % | 8.0 | % | 2.1 | % | 11.3 | % | 8.6 | % | 13.3 | % |
(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, 2013 include net rationalization and asset impairment charges and a loss recognized on the sale of land. The twelve months ended December 31, 2013 special charges also include the impact of the devaluation of the Venezuelan currency. |
(3) | Special items in the three and twelve months ended December 31, 2012 include net rationalization and asset impairment charges. The twelve months ended December 31, 2012 special charges also include an unfavorable adjustment due to a change in Venezuelan labor law, which provides for increased employee severance obligations. |
(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. |
Change in Net Sales due to: | ||||||||||||||||||||||||
Net Sales 2012 | Volume | Acquisitions | Price | Foreign Exchange | Net Sales 2013 | |||||||||||||||||||
Operating Segments | ||||||||||||||||||||||||
North America Welding | $ | 392,939 | $ | 5,880 | $ | 12,970 | $ | 307 | $ | (2,063 | ) | $ | 410,033 | |||||||||||
Europe Welding | 107,507 | 4,726 | — | (2,774 | ) | 2,415 | 111,874 | |||||||||||||||||
Asia Pacific Welding | 70,223 | (3,994 | ) | — | (974 | ) | (2,085 | ) | 63,170 | |||||||||||||||
South America Welding | 39,931 | 11,723 | — | 13,866 | (2,217 | ) | 63,303 | |||||||||||||||||
The Harris Products Group | 74,048 | 3,106 | — | (10,327 | ) | (416 | ) | 66,411 | ||||||||||||||||
Consolidated | $ | 684,648 | $ | 21,441 | $ | 12,970 | $ | 98 | $ | (4,366 | ) | $ | 714,791 | |||||||||||
% Change | ||||||||||||||||||||||||
North America Welding | 1.5 | % | 3.3 | % | 0.1 | % | (0.5 | %) | 4.4 | % | ||||||||||||||
Europe Welding | 4.4 | % | — | (2.6 | %) | 2.2 | % | 4.1 | % | |||||||||||||||
Asia Pacific Welding | (5.7 | %) | — | (1.4 | %) | (3.0 | %) | (10.0 | %) | |||||||||||||||
South America Welding | 29.4 | % | — | 34.7 | % | (5.6 | %) | 58.5 | % | |||||||||||||||
The Harris Products Group | 4.2 | % | — | (13.9 | %) | (0.6 | %) | (10.3 | %) | |||||||||||||||
Consolidated | 3.1 | % | 1.9 | % | — | (0.6 | %) | 4.4 | % |
Change in Net Sales due to: | ||||||||||||||||||||||||
Net Sales 2012 | Volume | Acquisitions | Price | Foreign Exchange | Net Sales 2013 | |||||||||||||||||||
Operating Segments | ||||||||||||||||||||||||
North America Welding | $ | 1,580,818 | $ | (22,962 | ) | $ | 91,442 | $ | 7,785 | $ | (4,314 | ) | $ | 1,652,769 | ||||||||||
Europe Welding | 452,227 | (18,518 | ) | — | (5,696 | ) | 1,535 | 429,548 | ||||||||||||||||
Asia Pacific Welding | 324,482 | (48,964 | ) | — | (4,947 | ) | (4,289 | ) | 266,282 | |||||||||||||||
South America Welding | 161,483 | 13,269 | — | 29,730 | (8,587 | ) | 195,895 | |||||||||||||||||
The Harris Products Group | 334,357 | 1,276 | — | (24,748 | ) | (2,708 | ) | 308,177 | ||||||||||||||||
Consolidated | $ | 2,853,367 | $ | (75,899 | ) | $ | 91,442 | $ | 2,124 | $ | (18,363 | ) | $ | 2,852,671 | ||||||||||
% Change | ||||||||||||||||||||||||
North America Welding | (1.5 | %) | 5.8 | % | 0.5 | % | (0.3 | %) | 4.6 | % | ||||||||||||||
Europe Welding | (4.1 | %) | — | (1.3 | %) | 0.3 | % | (5.0 | %) | |||||||||||||||
Asia Pacific Welding | (15.1 | %) | — | (1.5 | %) | (1.3 | %) | (17.9 | %) | |||||||||||||||
South America Welding | 8.2 | % | — | 18.4 | % | (5.3 | %) | 21.3 | % | |||||||||||||||
The Harris Products Group | 0.4 | % | — | (7.4 | %) | (0.8 | %) | (7.8 | %) | |||||||||||||||
Consolidated | (2.7 | %) | 3.2 | % | 0.1 | % | (0.6 | %) | — |