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 July 25, 2016, Lincoln Electric Holdings, Inc. (the “Company”) issued a press release reporting its financial results for the quarter ended March 31, 2016. A copy of the Company’s press release issued on July 25, 2016 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 July 25, 2016. |
LINCOLN ELECTRIC HOLDINGS, INC. | ||
/s/ Vincent K. Petrella | ||
Vincent K. Petrella | ||
Executive Vice President, Chief Financial Officer and Treasurer | ||
(principal financial officer) | ||
July 25, 2016 |
Exhibit No. | Exhibit | ||
99.1 | The Company’s press release dated July 25, 2016. | ||
Second Quarter 2016 Key Metric Highlights |
§ Sales declined 10.9% primarily due to lower volumes |
§ Operating income margin of 8.1%, Adjusted operating income margin of 13.9% |
§ Returned $122 million to shareholders through dividends and share repurchases |
§ Deconsolidated the Venezuelan subsidiary and recorded a $34.3 million pretax charge ($34.1 million non-cash) |
Three Months Ended June 30, | Fav (Unfav) to Prior Year | ||||||||||||||||||||
2016 | % of Sales | 2015 | % of Sales | $ | % | ||||||||||||||||
Net sales | $ | 592,418 | 100.0 | % | $ | 664,740 | 100.0 | % | $ | (72,322 | ) | (10.9 | %) | ||||||||
Cost of goods sold | 389,491 | 65.7 | % | 438,959 | 66.0 | % | 49,468 | 11.3 | % | ||||||||||||
Gross profit | 202,927 | 34.3 | % | 225,781 | 34.0 | % | (22,854 | ) | (10.1 | %) | |||||||||||
Selling, general & administrative expenses | 120,497 | 20.3 | % | 127,755 | 19.2 | % | 7,258 | 5.7 | % | ||||||||||||
Rationalization and asset impairment charges | — | — | 1,239 | 0.2 | % | 1,239 | 100.0 | % | |||||||||||||
Loss on deconsolidation of Venezuelan subsidiary | 34,348 | 5.8 | % | — | — | (34,348 | ) | (100.0 | %) | ||||||||||||
Operating income | 48,082 | 8.1 | % | 96,787 | 14.6 | % | (48,705 | ) | (50.3 | %) | |||||||||||
Interest income | 435 | 0.1 | % | 738 | 0.1 | % | (303 | ) | (41.1 | %) | |||||||||||
Equity earnings in affiliates | 839 | 0.1 | % | 979 | 0.1 | % | (140 | ) | (14.3 | %) | |||||||||||
Other income | 588 | 0.1 | % | 317 | — | 271 | 85.5 | % | |||||||||||||
Interest expense | (4,186 | ) | (0.7 | %) | (4,387 | ) | (0.7 | %) | 201 | 4.6 | % | ||||||||||
Income before income taxes | 45,758 | 7.7 | % | 94,434 | 14.2 | % | (48,676 | ) | (51.5 | %) | |||||||||||
Income taxes | 14,449 | 2.4 | % | 23,558 | 3.5 | % | 9,109 | 38.7 | % | ||||||||||||
Effective tax rate | 31.6 | % | 24.9 | % | (6.7 | %) | |||||||||||||||
Net income including non-controlling interests | 31,309 | 5.3 | % | 70,876 | 10.7 | % | (39,567 | ) | (55.8 | %) | |||||||||||
Non-controlling interests in subsidiaries’ loss | (8 | ) | — | (22 | ) | — | 14 | 63.6 | % | ||||||||||||
Net income | $ | 31,317 | 5.3 | % | $ | 70,898 | 10.7 | % | $ | (39,581 | ) | (55.8 | %) | ||||||||
Basic earnings per share | $ | 0.46 | $ | 0.95 | $ | (0.49 | ) | (51.6 | %) | ||||||||||||
Diluted earnings per share | $ | 0.45 | $ | 0.94 | $ | (0.49 | ) | (52.1 | %) | ||||||||||||
Weighted average shares (basic) | 68,181 | 75,000 | |||||||||||||||||||
Weighted average shares (diluted) | 68,890 | 75,773 | |||||||||||||||||||
Six months ended June 30th, | Fav (Unfav) to Prior Year | ||||||||||||||||||||
2016 | % of Sales | 2015 | % of Sales | $ | % | ||||||||||||||||
Net sales | $ | 1,143,140 | 100.0 | % | $ | 1,322,640 | 100.0 | % | $ | (179,500 | ) | (13.6 | %) | ||||||||
Cost of goods sold | 751,111 | 65.7 | % | 876,469 | 66.3 | % | 125,358 | 14.3 | % | ||||||||||||
Gross profit | 392,029 | 34.3 | % | 446,171 | 33.7 | % | (54,142 | ) | (12.1 | %) | |||||||||||
Selling, general & administrative expenses | 234,307 | 20.5 | % | 257,646 | 19.5 | % | 23,339 | 9.1 | % | ||||||||||||
Rationalization and asset impairment charges | — | — | 1,239 | 0.1 | % | 1,239 | 100.0 | % | |||||||||||||
Loss on deconsolidation of Venezuelan subsidiary | 34,348 | 3.0 | % | — | — | (34,348 | ) | (100.0 | %) | ||||||||||||
Operating income | 123,374 | 10.8 | % | 187,286 | 14.2 | % | (63,912 | ) | (34.1 | %) | |||||||||||
Interest income | 865 | 0.1 | % | 1,331 | 0.1 | % | (466 | ) | (35.0 | %) | |||||||||||
Equity earnings in affiliates | 1,465 | 0.1 | % | 1,828 | 0.1 | % | (363 | ) | (19.9 | %) | |||||||||||
Other income | 1,249 | 0.1 | % | 2,927 | 0.2 | % | (1,678 | ) | (57.3 | %) | |||||||||||
Interest expense | (8,013 | ) | (0.7 | %) | (6,231 | ) | (0.5 | %) | (1,782 | ) | (28.6 | %) | |||||||||
Income before income taxes | 118,940 | 10.4 | % | 187,141 | 14.1 | % | (68,201 | ) | (36.4 | %) | |||||||||||
Income taxes | 34,007 | 3.0 | % | 47,947 | 3.6 | % | 13,940 | 29.1 | % | ||||||||||||
Effective tax rate | 28.6 | % | 25.6 | % | (3.0 | %) | |||||||||||||||
Net income including non-controlling interests | 84,933 | 7.4 | % | 139,194 | 10.5 | % | (54,261 | ) | (39.0 | %) | |||||||||||
Non-controlling interests in subsidiaries’ loss | (22 | ) | — | (58 | ) | — | 36 | 62.1 | % | ||||||||||||
Net income | $ | 84,955 | 7.4 | % | $ | 139,252 | 10.5 | % | $ | (54,297 | ) | (39.0 | %) | ||||||||
Basic earnings per share | $ | 1.23 | $ | 1.84 | $ | (0.61 | ) | (33.2 | %) | ||||||||||||
Diluted earnings per share | $ | 1.22 | $ | 1.82 | $ | (0.60 | ) | (33.0 | %) | ||||||||||||
Weighted average shares (basic) | 68,883 | 75,621 | |||||||||||||||||||
Weighted average shares (diluted) | 69,569 | 76,416 |
Selected Consolidated Balance Sheet Data | June 30, 2016 | December 31, 2015 | ||||||
Cash and cash equivalents | $ | 237,019 | $ | 304,183 | ||||
Total current assets | 921,618 | 935,995 | ||||||
Property, plant and equipment, net | 383,867 | 411,323 | ||||||
Total assets | 1,837,401 | 1,784,171 | ||||||
Total current liabilities | 559,790 | 370,122 | ||||||
Short-term debt (1) | 159,908 | 4,278 | ||||||
Long-term debt | 360,931 | 350,347 | ||||||
Total equity | 792,414 | 932,448 | ||||||
Operating Working Capital | June 30, 2016 | December 31, 2015 | ||||||
Accounts receivable | $ | 291,645 | $ | 264,715 | ||||
Inventory | 292,587 | 275,930 | ||||||
Trade accounts payable | 173,037 | 152,620 | ||||||
Operating working capital | $ | 411,195 | $ | 388,025 | ||||
Operating working capital to net sales (2) | 17.4 | % | 17.1 | % | ||||
Invested Capital | June 30, 2016 | December 31, 2015 | ||||||
Short-term debt (1) | $ | 159,908 | $ | 4,278 | ||||
Long-term debt | 360,931 | 350,347 | ||||||
Total debt | 520,839 | 354,625 | ||||||
Total equity | 792,414 | 932,448 | ||||||
Invested capital | $ | 1,313,253 | $ | 1,287,073 | ||||
Total debt / invested capital | 39.7 | % | 27.6 | % |
(1) | Includes current portion of long-term debt. |
(2) | Operating working capital to net sales is defined as operating working capital divided by annualized rolling three months of net sales. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Operating income as reported | $ | 48,082 | $ | 96,787 | 123,374 | 187,286 | ||||||||||
Special items (pre-tax): | ||||||||||||||||
Rationalization and asset impairment charges (1) | — | 1,239 | — | 1,239 | ||||||||||||
Loss on deconsolidation of Venezuelan subsidiary (2) | 34,348 | — | 34,348 | — | ||||||||||||
Adjusted operating income (4) | $ | 82,430 | $ | 98,026 | $ | 157,722 | $ | 188,525 | ||||||||
As a percent of total sales | 13.9 | % | 14.7 | % | 13.8 | % | 14.3 | % | ||||||||
Net income as reported | $ | 31,317 | $ | 70,898 | $ | 84,955 | $ | 139,252 | ||||||||
Special items (after-tax): | ||||||||||||||||
Rationalization and asset impairment charges (1) | — | 900 | — | 900 | ||||||||||||
Loss on deconsolidation of Venezuelan subsidiary (2) | 33,251 | — | 33,251 | — | ||||||||||||
Income tax valuation reversals (3) | (7,196 | ) | — | (7,196 | ) | — | ||||||||||
Adjusted net income (4) | $ | 57,372 | $ | 71,798 | $ | 111,010 | $ | 140,152 | ||||||||
Diluted earnings per share as reported | $ | 0.45 | $ | 0.94 | $ | 1.22 | $ | 1.82 | ||||||||
Special items | 0.38 | 0.01 | 0.38 | 0.01 | ||||||||||||
Adjusted diluted earnings per share (4) | $ | 0.83 | $ | 0.95 | $ | 1.60 | $ | 1.83 | ||||||||
Weighted average shares (diluted) | 68,890 | 75,773 | 69,569 | 76,416 | ||||||||||||
(1) | The three and six months ended June 30, 2015 include net charges primarily related to severance and other related costs. |
(2) | The three and six months ended June 30, 2016 reflect a charge (non-cash charge of $34.1 million pretax and $33.0 million after-tax) related to the deconsolidation of the Company's Venezuelan subsidiary in the second quarter 2016. |
(3) | The three and six months ended June 30, 2016 reflect reduced income tax expense related to the reversal of an income tax valuation allowance as a result of a legal entity change to realign the Company’s tax structure. |
(4) | Adjusted operating income, Adjusted net income and Adjusted diluted earnings per share 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 believe 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. |
Twelve Months Ended June 30, | ||||||||
Return on Invested Capital | 2016 | 2015 | ||||||
Net income as reported | $ | 73,181 | $ | 260,153 | ||||
Rationalization and asset impairment charges (gains), net of tax of $1,437 and ($651) in 2016 and 2015, respectively | 17,281 | 31,122 | ||||||
Loss on deconsolidation of Venezuelan subsidiary, net of tax of $1,097 | 33,251 | — | ||||||
Income tax valuation reversals | (7,196 | ) | — | |||||
Pension settlement charges, net of tax of $55,428 | 87,310 | — | ||||||
Venezuela currency devaluation | 27,214 | — | ||||||
Noncontrolling interest | — | (805 | ) | |||||
Adjusted net income (1) | $ | 231,041 | $ | 290,470 | ||||
Plus: Interest expense , net of tax of $9,038 and $5,402 in 2016 and 2015, respectively | 14,568 | 8,707 | ||||||
Less: Interest income , net of tax of $861 and $990 in 2016 and 2015, respectively | 1,387 | 1,595 | ||||||
Adjusted net income before tax effected interest | $ | 244,222 | $ | 297,582 | ||||
Invested Capital | June 30, 2016 | June 30, 2015 | ||||||
Short-term debt | $ | 159,908 | $ | 62,595 | ||||
Long-term debt | 360,931 | 151,563 | ||||||
Total debt | 520,839 | 214,158 | ||||||
Total equity | 792,414 | 1,196,658 | ||||||
Invested capital | $ | 1,313,253 | $ | 1,410,816 | ||||
Return on invested capital (1)(2) | 18.6 | % | 21.1 | % | ||||
(1) | Adjusted net income and Return on invested capital 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 believe 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. |
(2) | Return on invested capital is defined as rolling 12 months of Adjusted net income excluding tax-effected interest income and expense divided by invested capital. |
Three Months Ended June 30, | ||||||||
2016 | 2015 | |||||||
OPERATING ACTIVITIES: | ||||||||
Net income | $ | 31,317 | $ | 70,898 | ||||
Non-controlling interests in subsidiaries’ loss | (8 | ) | (22 | ) | ||||
Net income including non-controlling interests | 31,309 | 70,876 | ||||||
Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities: | ||||||||
Loss on deconsolidation of Venezuelan subsidiary | 34,348 | — | ||||||
Depreciation and amortization | 16,607 | 15,686 | ||||||
Equity earnings in affiliates, net | (56 | ) | (272 | ) | ||||
Pension expense | 5,112 | 4,925 | ||||||
Pension contributions and payments | (712 | ) | (26,471 | ) | ||||
Other non-cash items, net | (3,316 | ) | 12,772 | |||||
Changes in operating assets and liabilities, net of effects from acquisitions: | ||||||||
(Increase) decrease in accounts receivable | (5,801 | ) | 11,695 | |||||
(Increase) decrease in inventories | (4,712 | ) | 17,773 | |||||
Increase (decrease) in trade accounts payable | 17,571 | (18,301 | ) | |||||
Net change in other current assets and liabilities | 10,918 | (11,234 | ) | |||||
Net change in other long-term assets and liabilities | (272 | ) | (163 | ) | ||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 100,996 | 77,286 | ||||||
INVESTING ACTIVITIES: | ||||||||
Capital expenditures | (15,894 | ) | (16,761 | ) | ||||
Acquisition of businesses, net of cash acquired | (71,567 | ) | — | |||||
Proceeds from sale of property, plant and equipment | 221 | 234 | ||||||
Other investing activities | (283 | ) | — | |||||
NET CASH USED BY INVESTING ACTIVITIES | (87,523 | ) | (16,527 | ) | ||||
FINANCING ACTIVITIES: | ||||||||
Net change in borrowings | 137,514 | 42,540 | ||||||
Proceeds from exercise of stock options | 3,700 | 2,303 | ||||||
Excess tax benefits from stock-based compensation | 1,165 | 756 | ||||||
Purchase of shares for treasury | (100,445 | ) | (55,615 | ) | ||||
Cash dividends paid to shareholders | (22,022 | ) | (21,919 | ) | ||||
Other financing activities | (14,438 | ) | (7,976 | ) | ||||
NET CASH PROVIDED BY (USED BY) FINANCING ACTIVITIES | 5,474 | (39,911 | ) | |||||
Effect of exchange rate changes on Cash and cash equivalents | (2,924 | ) | 2,872 | |||||
INCREASE IN CASH AND CASH EQUIVALENTS | 16,023 | 23,720 | ||||||
Cash and cash equivalents at beginning of period | 220,996 | 289,017 | ||||||
Cash and cash equivalents at end of period | $ | 237,019 | $ | 312,737 | ||||
Cash dividends paid per share | $ | 0.32 | $ | 0.29 |
Six Months Ended June 30, | ||||||||
2016 | 2015 | |||||||
OPERATING ACTIVITIES: | ||||||||
Net income | $ | 84,955 | $ | 139,252 | ||||
Non-controlling interests in subsidiaries’ loss | (22 | ) | (58 | ) | ||||
Net income including non-controlling interests | 84,933 | 139,194 | ||||||
Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities: | ||||||||
Rationalization and asset impairment charges | — | 30 | ||||||
Loss on deconsolidation of Venezuelan subsidiary | 34,348 | — | ||||||
Depreciation and amortization | 32,232 | 31,718 | ||||||
Equity earnings in affiliates, net | (58 | ) | (488 | ) | ||||
Pension expense | 9,256 | 10,604 | ||||||
Pension contributions and payments | (21,577 | ) | (47,705 | ) | ||||
Other non-cash items, net | (5,395 | ) | (5,790 | ) | ||||
Changes in operating assets and liabilities, net of effects from acquisitions: | ||||||||
Increase in accounts receivable | (22,393 | ) | (13,682 | ) | ||||
(Increase) decrease in inventories | (15,492 | ) | 1,540 | |||||
Increase (decrease) in trade accounts payable | 22,228 | (31,217 | ) | |||||
Net change in other current assets and liabilities (1) | 8,007 | 43,835 | ||||||
Net change in other long-term assets and liabilities | (732 | ) | 2,031 | |||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 125,357 | 130,070 | ||||||
INVESTING ACTIVITIES: | ||||||||
Capital expenditures | (24,779 | ) | (29,217 | ) | ||||
Acquisition of businesses, net of cash acquired | (71,567 | ) | — | |||||
Proceeds from sale of property, plant and equipment | 679 | 1,421 | ||||||
Other investing activities | (283 | ) | 2,024 | |||||
NET CASH USED BY INVESTING ACTIVITIES | (95,950 | ) | (25,772 | ) | ||||
FINANCING ACTIVITIES: | ||||||||
Net change in borrowings | 159,270 | 144,050 | ||||||
Proceeds from exercise of stock options | 5,715 | 4,036 | ||||||
Excess tax benefits from stock-based compensation | 1,522 | 1,293 | ||||||
Purchase of shares for treasury | (202,933 | ) | (158,468 | ) | ||||
Cash dividends paid to shareholders | (44,647 | ) | (44,248 | ) | ||||
Other financing activities | (18,244 | ) | (7,996 | ) | ||||
NET CASH USED BY FINANCING ACTIVITIES | (99,317 | ) | (61,333 | ) | ||||
Effect of exchange rate changes on Cash and cash equivalents | 2,746 | (8,607 | ) | |||||
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (67,164 | ) | 34,358 | |||||
Cash and cash equivalents at beginning of period | 304,183 | 278,379 | ||||||
Cash and cash equivalents at end of period | $ | 237,019 | $ | 312,737 | ||||
Cash dividends paid per share | $ | 0.64 | $ | 0.58 |
(1) | Net change in other current assets and liabilities in 2015 includes the receipt of a $25 million tax refund. |
Americas Welding | International Welding | The Harris Products Group | Corporate / Eliminations | Consolidated | ||||||||||||||||
Three months ended June 30, 2016 | ||||||||||||||||||||
Net sales | $ | 388,372 | $ | 132,815 | $ | 71,231 | $ | — | $ | 592,418 | ||||||||||
Inter-segment sales | 23,456 | 3,841 | 2,824 | (30,121 | ) | — | ||||||||||||||
Total | $ | 411,828 | $ | 136,656 | $ | 74,055 | $ | (30,121 | ) | $ | 592,418 | |||||||||
EBIT (2) | $ | 65,201 | $ | 9,670 | $ | 9,284 | $ | (34,646 | ) | $ | 49,509 | |||||||||
As a percent of total sales | 15.8 | % | 7.1 | % | 12.5 | % | 8.4 | % | ||||||||||||
Special items charge (3) | — | — | — | 34,348 | 34,348 | |||||||||||||||
Adjusted EBIT (4) | $ | 65,201 | $ | 9,670 | $ | 9,284 | $ | (298 | ) | $ | 83,857 | |||||||||
As a percent of total sales | 15.8 | % | 7.1 | % | 12.5 | % | 14.2 | % | ||||||||||||
Three months ended June 30, 2015 | ||||||||||||||||||||
Net sales | $ | 451,001 | $ | 141,927 | $ | 71,812 | $ | — | $ | 664,740 | ||||||||||
Inter-segment sales | 23,902 | 5,311 | 2,716 | (31,929 | ) | — | ||||||||||||||
Total | $ | 474,903 | $ | 147,238 | $ | 74,528 | $ | (31,929 | ) | $ | 664,740 | |||||||||
EBIT (2) | $ | 79,421 | $ | 9,778 | $ | 8,250 | $ | 634 | $ | 98,083 | ||||||||||
As a percent of total sales | 16.7 | % | 6.6 | % | 11.1 | % | 14.8 | % | ||||||||||||
Special items charge (3) | — | 1,239 | — | — | 1,239 | |||||||||||||||
Adjusted EBIT (4) | $ | 79,421 | $ | 11,017 | $ | 8,250 | $ | 634 | $ | 99,322 | ||||||||||
As a percent of total sales | 16.7 | % | 7.5 | % | 11.1 | % | 14.9 | % | ||||||||||||
Six months ended June 30, 2016 | ||||||||||||||||||||
Net sales | $ | 747,380 | $ | 257,120 | $ | 138,640 | $ | — | $ | 1,143,140 | ||||||||||
Inter-segment sales | 47,287 | 8,267 | 5,127 | (60,681 | ) | — | ||||||||||||||
Total | $ | 794,667 | $ | 265,387 | $ | 143,767 | $ | (60,681 | ) | $ | 1,143,140 | |||||||||
EBIT (2) | $ | 126,639 | $ | 15,903 | $ | 16,995 | $ | (33,449 | ) | $ | 126,088 | |||||||||
As a percent of total sales | 15.9 | % | 6.0 | % | 11.8 | % | 11.0 | % | ||||||||||||
Special items charge (3) | $ | — | $ | — | $ | — | $ | 34,348 | $ | 34,348 | ||||||||||
Adjusted EBIT (4) | $ | 126,639 | $ | 15,903 | $ | 16,995 | $ | 899 | $ | 160,436 | ||||||||||
As a percent of total sales | 15.9 | % | 6.0 | % | 11.8 | % | 14.0 | % | ||||||||||||
Six months ended June 30, 2015 | ||||||||||||||||||||
Net sales | $ | 899,838 | $ | 281,174 | $ | 141,628 | $ | — | $ | 1,322,640 | ||||||||||
Inter-segment sales | 46,925 | 10,338 | 4,727 | (61,990 | ) | — | ||||||||||||||
Total | $ | 946,763 | $ | 291,512 | $ | 146,355 | $ | (61,990 | ) | $ | 1,322,640 | |||||||||
EBIT (2) | $ | 154,836 | $ | 20,712 | $ | 15,799 | $ | 694 | $ | 192,041 | ||||||||||
As a percent of total sales | 16.4 | % | 7.1 | % | 10.8 | % | 14.5 | % | ||||||||||||
Special items charge (3) | $ | — | $ | 1,239 | $ | — | $ | — | $ | 1,239 | ||||||||||
Adjusted EBIT (4) | $ | 154,836 | $ | 21,951 | $ | 15,799 | $ | 694 | $ | 193,280 | ||||||||||
As a percent of total sales | 16.4 | % | 7.5 | % | 10.8 | % | 14.6 | % |
(1) | As previously announced on February 9, 2016, the Company realigned its organizational structure into three operating segments which was effective beginning in the first quarter of 2016. |
(2) | EBIT is defined as Operating income plus Equity earnings in affiliates and Other income. |
(3) | Special items within Corporate/Elimination during the three and six months ended June 30, 2016 reflect a charge ($34.1 million non-cash) related to the deconsolidation of the Company's Venezuelan subsidiary in the second quarter 2016. |
(4) | 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. |
Three Months Ended June 30th Change in Net Sales by Segment | ||||||||||||||||||||||||
Change in Net Sales due to: | ||||||||||||||||||||||||
Net Sales 2015 | Volume | Acquisitions | Price | Foreign Exchange | Net Sales 2016 | |||||||||||||||||||
Operating Segments | ||||||||||||||||||||||||
Americas Welding | $ | 451,001 | $ | (59,999 | ) | $ | 16,323 | $ | 193,706 | $ | (212,659 | ) | $ | 388,372 | ||||||||||
International Welding | 141,927 | (5,112 | ) | 3,702 | (3,883 | ) | (3,819 | ) | 132,815 | |||||||||||||||
The Harris Products Group | 71,812 | 736 | — | (809 | ) | (508 | ) | 71,231 | ||||||||||||||||
Consolidated | $ | 664,740 | $ | (64,375 | ) | $ | 20,025 | $ | 189,014 | $ | (216,986 | ) | $ | 592,418 | ||||||||||
Americas Welding (excluding Venezuela) | $ | 427,649 | $ | (55,013 | ) | 16,323 | $ | (1,071 | ) | $ | (5,349 | ) | $ | 382,539 | ||||||||||
Consolidated (excluding Venezuela) | $ | 641,389 | $ | (59,389 | ) | $ | 20,025 | $ | (5,764 | ) | $ | (9,676 | ) | $ | 586,585 | |||||||||
% Change | ||||||||||||||||||||||||
Americas Welding | (13.3 | %) | 3.6 | % | 43.0 | % | (47.2 | %) | (13.9 | %) | ||||||||||||||
International Welding | (3.6 | %) | 2.6 | % | (2.7 | %) | (2.7 | %) | (6.4 | %) | ||||||||||||||
The Harris Products Group | 1.0 | % | — | (1.1 | %) | (0.7 | %) | (0.8 | %) | |||||||||||||||
Consolidated | (9.7 | %) | 3.0 | % | 28.4 | % | (32.6 | %) | (10.9 | %) | ||||||||||||||
Americas Welding (excluding Venezuela) | (12.9 | %) | 3.8 | % | (0.3 | %) | (1.3 | %) | (10.5 | %) | ||||||||||||||
Consolidated (excluding Venezuela) | (9.3 | %) | 3.1 | % | (0.9 | %) | (1.5 | %) | (8.5 | %) | ||||||||||||||
Six Months Ended June 30th Change in Net Sales by Segment | ||||||||||||||||||||||||
Change in Net Sales due to: | ||||||||||||||||||||||||
Net Sales 2015 | Volume | Acquisitions | Price | Foreign Exchange | Net Sales 2016 | |||||||||||||||||||
Operating Segments | ||||||||||||||||||||||||
Americas Welding | $ | 899,838 | $ | (145,062 | ) | $ | 23,300 | $ | 274,026 | $ | (304,722 | ) | $ | 747,380 | ||||||||||
International Welding | 281,174 | (14,934 | ) | 7,168 | (6,988 | ) | (9,300 | ) | $ | 257,120 | ||||||||||||||
The Harris Products Group | 141,628 | 2,126 | — | (3,213 | ) | (1,901 | ) | $ | 138,640 | |||||||||||||||
Consolidated | $ | 1,322,640 | $ | (157,870 | ) | $ | 30,468 | $ | 263,825 | $ | (315,923 | ) | $ | 1,143,140 | ||||||||||
Americas Welding (excluding Venezuela) | $ | 853,607 | $ | (125,817 | ) | $ | 23,300 | $ | (2,052 | ) | $ | (12,472 | ) | $ | 736,566 | |||||||||
Consolidated (excluding Venezuela) | $ | 1,276,410 | $ | (138,626 | ) | $ | 30,468 | $ | (12,253 | ) | $ | (23,672 | ) | $ | 1,132,327 | |||||||||
% Change | ||||||||||||||||||||||||
Americas Welding | (16.1 | %) | 2.6 | % | 30.5 | % | (33.9 | %) | (16.9 | %) | ||||||||||||||
International Welding | (5.3 | %) | 2.5 | % | (2.5 | %) | (3.3 | %) | (8.6 | %) | ||||||||||||||
The Harris Products Group | 1.5 | % | — | (2.3 | %) | (1.3 | %) | (2.1 | %) | |||||||||||||||
Consolidated | (11.9 | %) | 2.3 | % | 19.9 | % | (23.9 | %) | (13.6 | %) | ||||||||||||||
Americas Welding (excluding Venezuela) | (14.7 | %) | 2.7 | % | (0.2 | %) | (1.5 | %) | (13.7 | %) | ||||||||||||||
Consolidated (excluding Venezuela) | (10.9 | %) | 2.4 | % | (1.0 | %) | (1.9 | %) | (11.3 | %) | ||||||||||||||