Ohio | 34-1860551 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
22801 St. Clair Avenue, Cleveland, Ohio | 44117 | |
(Address of principal executive offices) | (Zip Code) |
(216) 481-8100 |
(Registrant’s telephone number, including area code) |
Not applicable |
(Former name, former address and former fiscal year, if changed since last report) |
Large accelerated filer x | Accelerated filer o | |
Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
EX-31.1 | Certification of the Chairman, President and Chief Executive Officer (Principal Executive Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934. | |
EX-31.2 | Certification of the Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934. | |
EX-32.1 | Certification of the Chairman, President and Chief Executive Officer (Principal Executive Officer) and Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
EX-101 | Instance Document | |
EX-101 | Schema Document | |
EX-101 | Calculation Linkbase Document | |
EX-101 | Label Linkbase Document | |
EX-101 | Presentation Linkbase Document | |
EX-101 | Definition Linkbase Document |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net sales | $ | 592,418 | $ | 664,740 | $ | 1,143,140 | $ | 1,322,640 | |||||||
Cost of goods sold | 389,491 | 438,959 | 751,111 | 876,469 | |||||||||||
Gross profit | 202,927 | 225,781 | 392,029 | 446,171 | |||||||||||
Selling, general & administrative expenses | 120,497 | 127,755 | 234,307 | 257,646 | |||||||||||
Rationalization and asset impairment charges | — | 1,239 | — | 1,239 | |||||||||||
Loss on deconsolidation of Venezuelan subsidiary | 34,348 | — | 34,348 | — | |||||||||||
Operating income | 48,082 | 96,787 | 123,374 | 187,286 | |||||||||||
Other income (expense): | |||||||||||||||
Interest income | 435 | 738 | 865 | 1,331 | |||||||||||
Equity earnings in affiliates | 839 | 979 | 1,465 | 1,828 | |||||||||||
Other income | 588 | 317 | 1,249 | 2,927 | |||||||||||
Interest expense | (4,186 | ) | (4,387 | ) | (8,013 | ) | (6,231 | ) | |||||||
Total other income (expense) | (2,324 | ) | (2,353 | ) | (4,434 | ) | (145 | ) | |||||||
Income before income taxes | 45,758 | 94,434 | 118,940 | 187,141 | |||||||||||
Income taxes | 14,449 | 23,558 | 34,007 | 47,947 | |||||||||||
Net income including non-controlling interests | 31,309 | 70,876 | 84,933 | 139,194 | |||||||||||
Non-controlling interests in subsidiaries’ loss | (8 | ) | (22 | ) | (22 | ) | (58 | ) | |||||||
Net income | $ | 31,317 | $ | 70,898 | $ | 84,955 | $ | 139,252 | |||||||
Basic earnings per share | $ | 0.46 | $ | 0.95 | $ | 1.23 | $ | 1.84 | |||||||
Diluted earnings per share | $ | 0.45 | $ | 0.94 | $ | 1.22 | $ | 1.82 | |||||||
Cash dividends declared per share | $ | 0.32 | $ | 0.29 | $ | 0.64 | $ | 0.58 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income including non-controlling interests | $ | 31,309 | $ | 70,876 | $ | 84,933 | $ | 139,194 | |||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax of $207 and $4 in the three and six months ended June 30, 2016; $160 and $218 in the three and six months ended June 30, 2015 | (645 | ) | (579 | ) | 191 | 521 | |||||||||
Defined benefit pension plan activity, net of tax of $1,132 and $2,043 in the three and six months ended June 30, 2016; $1,975 and $4,370 in the three and six months ended June 30, 2015 | 2,617 | 3,571 | 4,235 | 7,109 | |||||||||||
Currency translation adjustment | (18,997 | ) | 15,150 | 5,252 | (41,402 | ) | |||||||||
Other comprehensive income (loss): | (17,025 | ) | 18,142 | 9,678 | (33,772 | ) | |||||||||
Comprehensive income | 14,284 | 89,018 | 94,611 | 105,422 | |||||||||||
Comprehensive income (loss) attributable to non-controlling interests | (58 | ) | 5 | (57 | ) | (572 | ) | ||||||||
Comprehensive income attributable to shareholders | $ | 14,342 | $ | 89,013 | $ | 94,668 | $ | 105,994 |
June 30, 2016 | December 31, 2015 | ||||||
(UNAUDITED) | (NOTE 1) | ||||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 237,019 | $ | 304,183 | |||
Accounts receivable (less allowance for doubtful accounts of $7,363 in 2016; $7,299 in 2015) | 291,645 | 264,715 | |||||
Inventories: | |||||||
Raw materials | 85,249 | 87,919 | |||||
Work-in-process | 45,770 | 39,555 | |||||
Finished goods | 161,568 | 148,456 | |||||
Total inventory | 292,587 | 275,930 | |||||
Other current assets | 100,367 | 91,167 | |||||
Total Current Assets | 921,618 | 935,995 | |||||
Property, Plant and Equipment | |||||||
Land | 46,157 | 45,775 | |||||
Buildings | 340,763 | 362,325 | |||||
Machinery and equipment | 706,821 | 696,849 | |||||
Property, plant and equipment | 1,093,741 | 1,104,949 | |||||
Less accumulated depreciation | 709,874 | 693,626 | |||||
Property, Plant and Equipment, Net | 383,867 | 411,323 | |||||
Goodwill | 237,457 | 187,504 | |||||
Non-current assets | 294,459 | 249,349 | |||||
TOTAL ASSETS | $ | 1,837,401 | $ | 1,784,171 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities | |||||||
Short-term debt | $ | 159,908 | $ | 4,278 | |||
Trade accounts payable | 173,037 | 152,620 | |||||
Other current liabilities | 226,845 | 213,224 | |||||
Total Current Liabilities | 559,790 | 370,122 | |||||
Long-Term Liabilities | |||||||
Long-term debt, less current portion | 360,931 | 350,347 | |||||
Other long-term liabilities | 124,266 | 131,254 | |||||
Total Long-Term Liabilities | 485,197 | 481,601 | |||||
Shareholders’ Equity | |||||||
Common shares | 9,858 | 9,858 | |||||
Additional paid-in capital | 283,166 | 272,908 | |||||
Retained earnings | 2,167,000 | 2,125,838 | |||||
Accumulated other comprehensive loss | (286,554 | ) | (296,267 | ) | |||
Treasury shares | (1,381,860 | ) | (1,180,750 | ) | |||
Total Shareholders’ Equity | 791,610 | 931,587 | |||||
Non-controlling interests | 804 | 861 | |||||
Total Equity | 792,414 | 932,448 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 1,837,401 | $ | 1,784,171 |
Six Months Ended June 30, | |||||||
2016 | 2015 | ||||||
CASH FLOWS FROM 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 | ) | |||
Deferred income taxes | (8,163 | ) | (6,337 | ) | |||
Stock-based compensation | 4,843 | 3,889 | |||||
Pension expense | 9,256 | 10,604 | |||||
Pension contributions and payments | (21,577 | ) | (47,705 | ) | |||
Other, net | (2,075 | ) | (3,342 | ) | |||
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 other current assets | (1,609 | ) | 30,632 | ||||
Increase (decrease) in trade accounts payable | 22,228 | (31,217 | ) | ||||
Increase in other current liabilities | 9,616 | 13,203 | |||||
Net change in other long-term assets and liabilities | (732 | ) | 2,031 | ||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 125,357 | 130,070 | |||||
CASH FLOWS FROM 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 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Proceeds from short-term borrowings | 1,892 | 1,729 | |||||
Payments on short-term borrowings | (1,522 | ) | (6,968 | ) | |||
Amounts due banks, net | 159,090 | 2,451 | |||||
Proceeds from long-term borrowings | 261 | 152,500 | |||||
Payments on long-term borrowings | (451 | ) | (5,662 | ) | |||
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 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Numerator: | |||||||||||||||
Net income | $ | 31,317 | $ | 70,898 | $ | 84,955 | $ | 139,252 | |||||||
Denominator (shares in 000's): | |||||||||||||||
Basic weighted average shares outstanding | 68,181 | 75,000 | 68,883 | 75,621 | |||||||||||
Effect of dilutive securities - Stock options and awards | 709 | 773 | 686 | 795 | |||||||||||
Diluted weighted average shares outstanding | 68,890 | 75,773 | 69,569 | 76,416 | |||||||||||
Basic earnings per share | $ | 0.46 | $ | 0.95 | $ | 1.23 | $ | 1.84 | |||||||
Diluted earnings per share | $ | 0.45 | $ | 0.94 | $ | 1.22 | $ | 1.82 |
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 | ||||||||
Adjusted EBIT | $ | 65,201 | $ | 9,670 | $ | 9,284 | $ | (298 | ) | $ | 83,857 | ||||||||
Special items charge | — | — | — | 34,348 | 34,348 | ||||||||||||||
EBIT | $ | 65,201 | $ | 9,670 | $ | 9,284 | $ | (34,646 | ) | $ | 49,509 | ||||||||
Interest income | 435 | ||||||||||||||||||
Interest expense | (4,186 | ) | |||||||||||||||||
Income before income taxes | $ | 45,758 | |||||||||||||||||
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 | ||||||||
Adjusted EBIT | $ | 79,421 | $ | 11,017 | $ | 8,250 | $ | 634 | $ | 99,322 | |||||||||
Special items charge | — | 1,239 | — | — | 1,239 | ||||||||||||||
EBIT | $ | 79,421 | $ | 9,778 | $ | 8,250 | $ | 634 | $ | 98,083 | |||||||||
Interest income | 738 | ||||||||||||||||||
Interest expense | (4,387 | ) | |||||||||||||||||
Income before income taxes | $ | 94,434 | |||||||||||||||||
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 | ||||||||
Adjusted EBIT | $ | 126,639 | $ | 15,903 | $ | 16,995 | $ | 899 | $ | 160,436 | |||||||||
Special items charge | — | — | — | 34,348 | 34,348 | ||||||||||||||
EBIT | $ | 126,639 | $ | 15,903 | $ | 16,995 | $ | (33,449 | ) | $ | 126,088 | ||||||||
Interest income | 865 | ||||||||||||||||||
Interest expense | (8,013 | ) | |||||||||||||||||
Income before income taxes | $ | 118,940 | |||||||||||||||||
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 | ||||||||
Adjusted EBIT | $ | 154,836 | $ | 21,951 | $ | 15,799 | $ | 694 | $ | 193,280 | |||||||||
Special items charge | — | 1,239 | — | — | 1,239 | ||||||||||||||
EBIT | $ | 154,836 | $ | 20,712 | $ | 15,799 | $ | 694 | $ | 192,041 | |||||||||
Interest income | 1,331 | ||||||||||||||||||
Interest expense | (6,231 | ) | |||||||||||||||||
Income before income taxes | $ | 187,141 | |||||||||||||||||
Americas Welding | International Welding | Consolidated | |||||||||
Balance, December 31, 2015 | $ | 67 | $ | 7,598 | $ | 7,665 | |||||
Payments and other adjustments | (67 | ) | (1,187 | ) | (1,254 | ) | |||||
Charged to expense | — | — | — | ||||||||
Balance, June 30, 2016 | $ | — | $ | 6,411 | $ | 6,411 |
Shareholders’ Equity | Non-controlling Interests | Total Equity | |||||||||
Balance at December 31, 2015 | $ | 931,587 | $ | 861 | $ | 932,448 | |||||
Comprehensive income (loss): | |||||||||||
Net income (loss) | 84,955 | (22 | ) | 84,933 | |||||||
Other comprehensive income (loss) | 9,713 | (35 | ) | 9,678 | |||||||
Total comprehensive income (loss) | 94,668 | (57 | ) | 94,611 | |||||||
Cash dividends declared - $0.64 per share | (43,792 | ) | — | (43,792 | ) | ||||||
Issuance of shares under benefit plans | 12,080 | — | 12,080 | ||||||||
Purchase of shares for treasury | (202,933 | ) | — | (202,933 | ) | ||||||
Balance at June 30, 2016 | $ | 791,610 | $ | 804 | $ | 792,414 |
Three Months Ended June 30, 2016 | |||||||||||||||||||
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges | Defined benefit pension plan activity | Currency translation adjustment | Total | ||||||||||||||||
Balance at March 31, 2016 | $ | 1,384 | $ | (98,158 | ) | $ | (172,805 | ) | $ | (269,579 | ) | ||||||||
Other comprehensive income (loss) before reclassification | (339 | ) | 5 | (21,790 | ) | 3 | (22,124 | ) | |||||||||||
Amounts reclassified from AOCI | (306 | ) | 1 | 2,612 | 2 | 2,843 | 4 | 5,149 | |||||||||||
Net current-period other comprehensive income (loss) | (645 | ) | 2,617 | (18,947 | ) | (16,975 | ) | ||||||||||||
Balance at June 30, 2016 | $ | 739 | $ | (95,541 | ) | $ | (191,752 | ) | $ | (286,554 | ) | ||||||||
Three Months Ended June 30, 2015 | |||||||||||||||||||
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges | Defined benefit pension plan activity | Currency translation adjustment | Total | ||||||||||||||||
Balance at March 31, 2015 | $ | 1,091 | $ | (194,355 | ) | $ | (146,731 | ) | $ | (339,995 | ) | ||||||||
Other comprehensive income (loss) before reclassification | (893 | ) | — | 15,123 | 3 | 14,230 | |||||||||||||
Amounts reclassified from AOCI | 314 | 1 | 3,571 | 2 | — | 3,885 | |||||||||||||
Net current-period other comprehensive income (loss) | (579 | ) | 3,571 | 15,123 | 18,115 | ||||||||||||||
Balance at June 30, 2015 | $ | 512 | $ | (190,784 | ) | $ | (131,608 | ) | $ | (321,880 | ) | ||||||||
1 | During the 2016 period, this AOCI reclassification is a component of Net sales of $(152) (net of tax of $(69)) and Cost of goods sold of $(154) (net of tax of $(16)); during the 2015 period, the reclassification is a component of Net sales of $8 (net of tax of $(75)) and Cost of goods sold of $306 (net of tax of $205). (See Note 14 - Derivatives for additional details.) |
2 | This AOCI component is included in the computation of net periodic pension costs (net of tax of $1,132 and $1,975 during the three months ended June 30, 2016 and 2015, respectively). (See Note 12 - Retirement and Postretirement Benefit Plans for additional details.) |
3 | The Other comprehensive income (loss) before reclassifications excludes $(51) and $27 attributable to Non-controlling interests in the three months ended June 30, 2016 and 2015, respectively. |
4 | The reclassification from AOCI reflects foreign currency translation losses recognized due to the Company's deconsolidation of its Venezuelan subsidiary. (See Note 1 - Significant Accounting Policies for additional details.) |
Six Months Ended June 30, 2016 | |||||||||||||||||||
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges | Defined benefit pension plan activity | Currency translation adjustment | Total | ||||||||||||||||
Balance at December 31, 2015 | $ | 548 | $ | (99,776 | ) | $ | (197,039 | ) | $ | (296,267 | ) | ||||||||
Other comprehensive income (loss) before reclassification | 1,360 | (15 | ) | 2,444 | 3 | 3,789 | |||||||||||||
Amounts reclassified from AOCI | (1,169 | ) | 1 | 4,250 | 2 | 2,843 | 4 | 5,924 | |||||||||||
Net current-period other comprehensive income (loss) | 191 | 4,235 | 5,287 | 9,713 | |||||||||||||||
Balance at June 30, 2016 | $ | 739 | $ | (95,541 | ) | $ | (191,752 | ) | $ | (286,554 | ) | ||||||||
Six Months Ended June 30, 2015 | |||||||||||||||||||
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges | Defined benefit pension plan activity | Currency translation adjustment | Total | ||||||||||||||||
Balance at December 31, 2014 | $ | (9 | ) | $ | (197,893 | ) | $ | (90,720 | ) | $ | (288,622 | ) | |||||||
Other comprehensive income (loss) before reclassification | 429 | — | (40,888 | ) | 3 | (40,459 | ) | ||||||||||||
Amounts reclassified from AOCI | 92 | 1 | 7,109 | 2 | — | 7,201 | |||||||||||||
Net current-period other comprehensive income (loss) | 521 | 7,109 | (40,888 | ) | (33,258 | ) | |||||||||||||
Balance at June 30, 2015 | $ | 512 | $ | (190,784 | ) | $ | (131,608 | ) | $ | (321,880 | ) | ||||||||
1 | During the 2016 period, this AOCI reclassification is a component of Net sales of $(939) (net of tax of $(347)) and Cost of goods sold of $(230) (net of tax of $6); during the 2015 period, the reclassification is a component of Net sales of $(521) (net of tax of $(324)) and Cost of goods sold of $613 (net of tax of $407). (See Note 14 - Derivatives for additional details.) |
2 | This AOCI component is included in the computation of net periodic pension costs (net of tax of $2,043 and $4,370 during the six months ended June 30, 2016 and 2015, respectively). (See Note 12 - Retirement and Postretirement Benefit Plans for additional details.) |
3 | The Other comprehensive income (loss) before reclassifications excludes $(36) and $(514) attributable to Non-controlling interests in the six months ended June 30, 2016 and 2015, respectively. |
4 | The reclassification from AOCI reflects foreign currency translation losses recognized due to the Company's deconsolidation of its Venezuelan subsidiary. (See Note 1 - Significant Accounting Policies for additional details.) |
Six Months Ended June 30, | |||||||
2016 | 2015 | ||||||
Balance at December 31 | $ | 19,469 | $ | 15,579 | |||
Accruals for warranties | 6,444 | 7,327 | |||||
Settlements | (6,178 | ) | (6,796 | ) | |||
Foreign currency translation | 107 | (229 | ) | ||||
Balance at June 30 | $ | 19,842 | $ | 15,881 |
Amount | Maturity Date | Interest Rate | ||||||
Series A | $ | 100,000 | August 20, 2025 | 3.15 | % | |||
Series B | 100,000 | August 20, 2030 | 3.35 | % | ||||
Series C | 50,000 | April 1, 2035 | 3.61 | % | ||||
Series D | 100,000 | April 1, 2045 | 4.02 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Service cost | $ | 4,439 | $ | 5,038 | $ | 8,869 | $ | 10,460 | |||||||
Interest cost | 6,018 | 10,413 | 12,029 | 20,744 | |||||||||||
Expected return on plan assets | (8,894 | ) | (16,242 | ) | (17,758 | ) | (31,980 | ) | |||||||
Amortization of prior service cost | (99 | ) | (156 | ) | (198 | ) | (312 | ) | |||||||
Amortization of net loss | 3,648 | 1 | 5,872 | 6,314 | 1 | 11,692 | |||||||||
Defined benefit plans | 5,112 | 4,925 | 9,256 | 10,604 | |||||||||||
Multi-employer plans | 193 | 211 | 395 | 428 | |||||||||||
Defined contribution plans | 2,192 | 2,945 | 4,161 | 5,961 | |||||||||||
Total pension cost | $ | 7,497 | $ | 8,081 | $ | 13,812 | $ | 16,993 |
1 | The amortization of net loss includes a $959 charge resulting from the deconsolidation of the Venezuelan subsidiary during the three and six months ended June 30, 2016. |
June 30, 2016 | December 31, 2015 | |||||||||||||||
Derivatives by hedge designation | Other Current Assets | Other Current Liabilities | Other Current Assets | Other Current Liabilities | ||||||||||||
Designated as hedging instruments: | ||||||||||||||||
Foreign exchange contracts | $ | 499 | $ | 568 | $ | 178 | $ | 731 | ||||||||
Interest rate swap agreements | — | 162 | — | — | ||||||||||||
Not designated as hedging instruments: | ||||||||||||||||
Foreign exchange contracts | 3,982 | 3,732 | 625 | 2,303 | ||||||||||||
Commodity contracts | — | — | 40 | 8 | ||||||||||||
Total derivatives | $ | 4,481 | $ | 4,462 | $ | 843 | $ | 3,042 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||
Derivatives by hedge designation | Classification of gain (loss) | 2016 | 2015 | 2016 | 2015 | |||||||||||||
Not designated as hedges: | ||||||||||||||||||
Foreign exchange contracts | Selling, general & administrative expenses | $ | (10,507 | ) | $ | 2,512 | $ | (6,910 | ) | $ | (7,092 | ) | ||||||
Commodity contracts | Cost of goods sold | (373 | ) | 194 | (742 | ) | 50 |
Total gain (loss) recognized in AOCI, net of tax | June 30, 2016 | December 31, 2015 | ||||||
Foreign exchange contracts | $ | (260 | ) | $ | (551 | ) | ||
Net investment contracts | 1,099 | 1,099 | ||||||
Interest rate swap agreements | (100 | ) | — |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||
Derivative type | Gain (loss) reclassified from AOCI to: | 2016 | 2015 | 2016 | 2015 | |||||||||||||
Foreign exchange contracts | Sales | $ | (152 | ) | $ | 8 | $ | (939 | ) | $ | (521 | ) | ||||||
Cost of goods sold | (154 | ) | 306 | (230 | ) | 613 |
Description | Balance as of June 30, 2016 | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Assets: | ||||||||||||||||
Foreign exchange contracts | $ | 4,481 | $ | — | $ | 4,481 | $ | — | ||||||||
Total assets | $ | 4,481 | $ | — | $ | 4,481 | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Foreign exchange contracts | $ | 4,300 | $ | — | $ | 4,300 | $ | — | ||||||||
Interest rate swap agreements | 162 | — | 162 | — | ||||||||||||
Contingent considerations | 9,251 | — | — | 9,251 | ||||||||||||
Forward contract | 14,936 | — | — | 14,936 | ||||||||||||
Deferred compensation | 24,266 | — | 24,266 | — | ||||||||||||
Total liabilities | $ | 52,915 | $ | — | $ | 28,728 | $ | 24,187 |
Description | Balance as of December 31, 2015 | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Assets: | ||||||||||||||||
Foreign exchange contracts | $ | 803 | $ | — | $ | 803 | $ | — | ||||||||
Commodity contracts | 40 | — | 40 | — | ||||||||||||
Total assets | $ | 843 | $ | — | $ | 843 | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Foreign exchange contracts | $ | 3,034 | $ | — | $ | 3,034 | $ | — | ||||||||
Commodity contracts | 8 | — | 8 | — | ||||||||||||
Contingent considerations | 9,184 | — | — | 9,184 | ||||||||||||
Forward contract | 26,484 | — | — | 26,484 | ||||||||||||
Deferred compensation | 23,201 | — | 23,201 | — | ||||||||||||
Total liabilities | $ | 61,911 | $ | — | $ | 26,243 | $ | 35,668 |
Three Months Ended June 30, | ||||||||||||||||||||
2016 | 2015 | Change | ||||||||||||||||||
Amount | % of Sales | Amount | % of Sales | Amount | % | |||||||||||||||
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 | %) | ||||||||||
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 | %) |
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 | %) | |||||||||||||
Three Months Ended June 30, | |||||||||||||
2016 | 2015 | $ Change | % Change | ||||||||||
Americas Welding: | |||||||||||||
Net sales | $ | 388,372 | $ | 451,001 | (62,629 | ) | (13.9 | %) | |||||
Inter-segment sales | 23,456 | 23,902 | (446 | ) | (1.9 | %) | |||||||
Total Sales | $ | 411,828 | $ | 474,903 | (63,075 | ) | (13.3 | %) | |||||
Adjusted EBIT | $ | 65,201 | $ | 79,421 | (14,220 | ) | (17.9 | %) | |||||
As a percent of total sales | 15.8 | % | 16.7 | % | (0.9 | %) | |||||||
International Welding: | |||||||||||||
Net sales | $ | 132,815 | $ | 141,927 | (9,112 | ) | (6.4 | %) | |||||
Inter-segment sales | 3,841 | 5,311 | (1,470 | ) | (27.7 | %) | |||||||
Total Sales | $ | 136,656 | $ | 147,238 | (10,582 | ) | (7.2 | %) | |||||
Adjusted EBIT | $ | 9,670 | $ | 11,017 | (1,347 | ) | (12.2 | %) | |||||
As a percent of total sales | 7.1 | % | 7.5 | % | (0.4 | %) | |||||||
The Harris Products Group: | |||||||||||||
Net sales | $ | 71,231 | $ | 71,812 | (581 | ) | (0.8 | %) | |||||
Inter-segment sales | 2,824 | 2,716 | 108 | 4.0 | % | ||||||||
Total Sales | $ | 74,055 | $ | 74,528 | (473 | ) | (0.6 | %) | |||||
Adjusted EBIT | $ | 9,284 | $ | 8,250 | 1,034 | 12.5 | % | ||||||
As a percent of total sales | 12.5 | % | 11.1 | % | 1.4 | % | |||||||
Corporate / Eliminations: | |||||||||||||
Inter-segment sales | $ | (30,121 | ) | $ | (31,929 | ) | 1,808 | (5.7 | %) | ||||
Adjusted EBIT | (298 | ) | 634 | (932 | ) | (147.0 | %) | ||||||
Consolidated: | |||||||||||||
Net sales | $ | 592,418 | $ | 664,740 | (72,322 | ) | (10.9 | %) | |||||
Adjusted EBIT | $ | 83,857 | $ | 99,322 | (15,465 | ) | (15.6 | %) | |||||
As a percent of sales | 14.2 | % | 14.9 | % | (0.7 | %) |
Six Months Ended June 30, | |||||||||||||||||||||
2016 | 2015 | Change | |||||||||||||||||||
Amount | % of Sales | Amount | % of Sales | Amount | % | ||||||||||||||||
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 | %) | |||||||||||
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 | %) |
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 | %) | |||||||||||||
Six Months Ended June 30, | |||||||||||||
2016 | 2015 | $ Change | % Change | ||||||||||
Americas Welding: | |||||||||||||
Net sales | $ | 747,380 | $ | 899,838 | (152,458 | ) | (16.9 | %) | |||||
Inter-segment sales | 47,287 | 46,925 | 362 | 0.8 | % | ||||||||
Total Sales | $ | 794,667 | $ | 946,763 | (152,096 | ) | (16.1 | %) | |||||
Adjusted EBIT | $ | 126,639 | $ | 154,836 | (28,197 | ) | (18.2 | %) | |||||
As a percent of total sales | 15.9 | % | 16.4 | % | (0.5 | %) | |||||||
International Welding: | |||||||||||||
Net sales | $ | 257,120 | $ | 281,174 | (24,054 | ) | (8.6 | %) | |||||
Inter-segment sales | 8,267 | 10,338 | (2,071 | ) | (20.0 | %) | |||||||
Total Sales | $ | 265,387 | $ | 291,512 | (26,125 | ) | (9.0 | %) | |||||
Adjusted EBIT | $ | 15,903 | $ | 21,951 | (6,048 | ) | (27.6 | %) | |||||
As a percent of total sales | 6.0 | % | 7.5 | % | (1.5 | %) | |||||||
The Harris Products Group: | |||||||||||||
Net sales | $ | 138,640 | $ | 141,628 | (2,988 | ) | (2.1 | %) | |||||
Inter-segment sales | 5,127 | 4,727 | 400 | 8.5 | % | ||||||||
Total Sales | $ | 143,767 | $ | 146,355 | (2,588 | ) | (1.8 | %) | |||||
Adjusted EBIT | $ | 16,995 | $ | 15,799 | 1,196 | 7.6 | % | ||||||
As a percent of total sales | 11.8 | % | 10.8 | % | 1.0 | % | |||||||
Corporate / Eliminations: | |||||||||||||
Inter-segment sales | $ | (60,681 | ) | $ | (61,990 | ) | 1,309 | (2.1 | %) | ||||
Adjusted EBIT | 899 | 694 | 205 | 29.5 | % | ||||||||
Consolidated: | |||||||||||||
Net sales | $ | 1,143,140 | $ | 1,322,640 | (179,500 | ) | (13.6 | %) | |||||
Adjusted EBIT | $ | 160,436 | $ | 193,280 | (32,844 | ) | (17.0 | %) | |||||
As a percent of sales | 14.0 | % | 14.6 | % | (0.6 | %) |
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 | — | 1,239 | — | 1,239 | |||||||||||
Loss on deconsolidation of Venezuelan subsidiary | 34,348 | — | 34,348 | — | |||||||||||
Adjusted operating income | $ | 82,430 | $ | 98,026 | $ | 157,722 | $ | 188,525 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income as reported | $ | 31,317 | $ | 70,898 | $ | 84,955 | $ | 139,252 | |||||||
Special items (after-tax): | |||||||||||||||
Rationalization and asset impairment charges | — | 900 | — | 900 | |||||||||||
Loss on deconsolidation of Venezuelan subsidiary | 33,251 | — | 33,251 | — | |||||||||||
Income tax valuation reversal | (7,196 | ) | — | (7,196 | ) | — | |||||||||
Adjusted net income | $ | 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 | $ | 0.83 | $ | 0.95 | $ | 1.60 | $ | 1.83 |
Six Months Ended June 30, | |||||||||||
2016 | 2015 | Change | |||||||||
Cash provided by operating activities | $ | 125,357 | $ | 130,070 | $ | (4,713 | ) | ||||
Cash used by investing activities | (95,950 | ) | (25,772 | ) | (70,178 | ) | |||||
Capital expenditures | (24,779 | ) | (29,217 | ) | 4,438 | ||||||
Acquisition of businesses, net of cash acquired | (71,567 | ) | — | (71,567 | ) | ||||||
Proceeds from sale of property, plant and equipment | 679 | 1,421 | (742 | ) | |||||||
Other investing activities | (283 | ) | 2,024 | (2,307 | ) | ||||||
Cash used by financing activities | (99,317 | ) | (61,333 | ) | (37,984 | ) | |||||
Proceeds from (payments on) short-term borrowings, net | 159,460 | (2,788 | ) | 162,248 | |||||||
(Payments on) proceeds from long-term borrowings, net | (190 | ) | 146,838 | (147,028 | ) | ||||||
Proceeds from exercise of stock options | 5,715 | 4,036 | 1,679 | ||||||||
Excess tax benefits from stock-based compensation | 1,522 | 1,293 | 229 | ||||||||
Purchase of shares for treasury | (202,933 | ) | (158,468 | ) | (44,465 | ) | |||||
Cash dividends paid to shareholders | (44,647 | ) | (44,248 | ) | (399 | ) | |||||
Other financing activities | (18,244 | ) | (7,996 | ) | (10,248 | ) | |||||
(Decrease) increase in Cash and cash equivalents | (67,164 | ) | 34,358 |
June 30, 2016 | December 31, 2015 | June 30, 2015 | |||||||
Operating working capital to net sales 1 | 17.4 | % | 17.1 | % | 18.7 | % | |||
Days sales in Total inventory | 97.0 | 89.2 | 95.7 | ||||||
Days sales in Accounts receivable | 48.4 | 46.9 | 49.7 | ||||||
Average days in Trade accounts payable | 45.1 | 38.7 | 40.4 |
Twelve Months Ended June 30, | ||||||||
Return on Invested Capital | 2016 | 2015 | ||||||
Net income | $ | 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 interests | — | (805 | ) | |||||
Adjusted net income | $ | 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 | 18.6 | % | 21.1 | % |
Period | Total Number of Shares Repurchased | Average Price Paid Per Share | Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (2) | |||||||||
April 1 - 30, 2016 | 390,542 | (1) | $ | 59.33 | 390,100 | 12,412,416 | |||||||
May 1 - 31, 2016 | 408,400 | 60.88 | 408,400 | 12,004,016 | |||||||||
June 1 - 30, 2016 | 871,891 | (1) | 60.11 | 871,789 | 11,132,227 | ||||||||
Total | 1,670,833 | 60.12 | 1,670,289 |
(1) | The above share repurchases include the surrender of the Company's common shares in connection with the vesting of restricted awards. |
(2) | In April 2016, the Company's Board of Directors authorized a new share repurchase program, which increased the total number of the Company’s common shares authorized to be repurchased to 55 million shares. Total shares purchased through the share repurchase programs were 43,867,773 shares at a total cost of $1.5 billion for a weighted average cost of $34.21 per share through June 30, 2016. |
31.1 | Certification of the Chairman, President and Chief Executive Officer (Principal Executive Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934. | |
31.2 | Certification of the Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934. | |
32.1 | Certification of the Chairman, President and Chief Executive Officer (Principal Executive Officer) and Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
LINCOLN ELECTRIC HOLDINGS, INC. | ||
/s/ Geoffrey P. Allman | ||
Geoffrey P. Allman | ||
Senior Vice President, Corporate Controller | ||
(principal accounting officer) | ||
July 26, 2016 |
1. | I have reviewed this quarterly report on Form 10-Q of Lincoln Electric Holdings, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: July 26, 2016 | ||
/s/ Christopher L. Mapes | ||
Christopher L. Mapes Chairman, President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Lincoln Electric Holdings, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: July 26, 2016 | ||
/s/ Vincent K. Petrella | ||
Vincent K. Petrella Executive Vice President, Chief Financial Officer and Treasurer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report. |
Date: July 26, 2016 | ||
/s/ Christopher L. Mapes | ||
Christopher L. Mapes Chairman, President and Chief Executive Officer | ||
/s/ Vincent K. Petrella | ||
Vincent K. Petrella Executive Vice President, Chief Financial Officer and Treasurer |
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Document and Entity Information |
6 Months Ended |
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Jun. 30, 2016
shares
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Document and Entity Information | |
Entity Registrant Name | LINCOLN ELECTRIC HOLDINGS INC |
Entity Central Index Key | 0000059527 |
Document Type | 10-Q |
Document Period End Date | Jun. 30, 2016 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 67,264,898 |
Document Fiscal Year Focus | 2016 |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Income Statement [Abstract] | ||||
Net sales | $ 592,418 | $ 664,740 | $ 1,143,140 | $ 1,322,640 |
Cost of goods sold | 389,491 | 438,959 | 751,111 | 876,469 |
Gross profit | 202,927 | 225,781 | 392,029 | 446,171 |
Selling, general & administrative expenses | 120,497 | 127,755 | 234,307 | 257,646 |
Restructuring, Settlement and Impairment Provisions | 0 | 1,239 | 0 | 1,239 |
Deconsolidation, (Gain) Loss, Amount | 34,348 | 0 | 34,348 | 0 |
Operating income | 48,082 | 96,787 | 123,374 | 187,286 |
Other income (expense): | ||||
Interest income | 435 | 738 | 865 | 1,331 |
Equity earnings in affiliates | 839 | 979 | 1,465 | 1,828 |
Other income | 588 | 317 | 1,249 | 2,927 |
Interest expense | (4,186) | (4,387) | (8,013) | (6,231) |
Total other income (expense) | (2,324) | (2,353) | (4,434) | (145) |
Income before income taxes | 45,758 | 94,434 | 118,940 | 187,141 |
Income taxes | 14,449 | 23,558 | 34,007 | 47,947 |
Net income including non-controlling interests | 31,309 | 70,876 | 84,933 | 139,194 |
Non-controlling interests in subsidiaries’ loss | (8) | (22) | (22) | (58) |
Net income | $ 31,317 | $ 70,898 | $ 84,955 | $ 139,252 |
Basic earnings (loss) per share (in dollars per share) | $ 0.46 | $ 0.95 | $ 1.23 | $ 1.84 |
Diluted earnings (loss) per share (in dollars per share) | 0.45 | 0.94 | 1.22 | 1.82 |
Cash dividends declared per share (in dollars per share) | $ 0.32 | $ 0.29 | $ 0.64 | $ 0.58 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, tax (benefit) | $ 207 | $ 160 | $ 4 | $ 218 |
Unrecognized amounts from defined benefit pension plans, tax | $ 1,132 | $ 1,975 | $ 2,043 | $ 4,370 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 7,363 | $ 7,299 |
BASIS OF PRESENTATION |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | Principles of Consolidation As used in this report, the term “Company,” except as otherwise indicated by the context, means Lincoln Electric Holdings, Inc. and its wholly-owned and majority-owned subsidiaries for which it has a controlling interest. The consolidated financial statements include the accounts of all legal entities in which the Company holds a controlling financial interest. The Company is also considered to have a controlling financial interest in a variable interest entity (“VIE”) if the Company determines it is the primary beneficiary of the VIE. Investments in legal entities in which the Company does not own a majority interest but has the ability to exercise significant influence over operating and financial policies are accounted for using the equity method. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these unaudited consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements. However, in the opinion of management, these unaudited consolidated financial statements contain all the adjustments (consisting of normal recurring accruals) considered necessary to present fairly the financial position, results of operations and cash flows for the interim periods. Operating results for the six months ended June 30, 2016 are not necessarily indicative of the results to be expected for the year ending December 31, 2016. The accompanying Consolidated Balance Sheet at December 31, 2015 has been derived from the audited financial statements at that date, but does not include all of the information and notes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Certain reclassifications have been made to the prior year financial statements to conform to current year classifications. Venezuela — Deconsolidation Effective June 30, 2016, the Company determined that deteriorating conditions in Venezuela have led the Company to no longer meet the accounting criteria for control over its Venezuelan subsidiary. Therefore, as of June 30, 2016, the Company deconsolidated the financial statements of its subsidiary in Venezuela and began reporting the results under the cost method of accounting. As a result of the deconsolidation, the Company recorded a pretax charge of $34,348 ($33,251 after-tax) in the second quarter of 2016. The pretax charge includes the write-off of the Company’s investment in Venezuela, including all inter-company balances and $283 of Cash and cash equivalents. Additionally, the charge includes foreign currency translation losses and pension losses previously included in Accumulated other comprehensive loss. The restrictive exchange controls in Venezuela and the lack of access to U.S. dollars through official currency exchange mechanisms have resulted in an other-than-temporary lack of exchangeability between the Venezuela bolivar and the U.S. dollar, and have restricted the Venezuela operations ability to pay dividends and satisfy other obligations denominated in U.S. dollars. Additionally, other operating restrictions including government controls on pricing, profits, imports and restrictive labor laws have significantly impacted the Company’s ability to make key operational decisions, including the ability to manage its capital structure, purchasing, product pricing and labor relations. The Company expects these conditions will continue for the foreseeable future. Subsequent to the deconsolidation under the voting interest consolidation model, the Company determined that the Venezuelan subsidiary is considered to be a VIE. As the Company does not have the power to direct the activities that most significantly affect the Venezuela subsidiary's economic performance, the Company is not the primary beneficiary of the VIE and therefore would not consolidate the entity under the VIE consolidation model. Due to the lack of ability to settle U.S. dollar obligations, the Company does not intend to sell into nor purchase inventory from the Venezuela entity at this time. Additionally, the Company has no remaining financial commitments to the Venezuelan subsidiary and therefore believes the exposure to future losses are not material. Although the Venezuela operations will continue to operate in future periods under the cost method of accounting, the Company will no longer include the results of the Venezuelan subsidiary in its Consolidated Financial Statements. Under the cost method of accounting, if cash were to be received from the Venezuela entity in future periods from the sale of inventory, dividends or royalties, income would be recognized. The Company does not anticipate dividend or royalty payments being made in the foreseeable future. Prior to deconsolidation, the financial statements of the Company’s Venezuelan operation had been reported under highly inflationary accounting rules since January 1, 2010. Under highly inflationary accounting, the financial statements of the Company’s Venezuelan operation had been remeasured into the Company’s reporting currency and exchange gains and losses from the remeasurement of monetary assets and liabilities were reflected in current earnings. In February 2015, the Venezuelan government announced a new exchange market called the Marginal Currency System ("SIMADI"), which allows for trading based on supply and demand. At September 30, 2015, the Company determined that the rate used in remeasuring the Venezuelan operation's financial statements into U.S. dollars would change to the SIMADI rate, as the SIMADI rate most appropriately approximates the rates used to transact business in its Venezuelan operations. At September 30, 2015, the SIMADI rate was 199.4 bolivars to the U.S. dollar, resulting in a remeasurement charge on the bolivar-denominated monetary net asset position of $4,334. This foreign exchange loss was recorded in Selling, general & administrative expenses during the three months ended September 30, 2015. Additionally, the Company recorded lower of cost or net realizable value inventory adjustments of $22,880 within Cost of goods sold, related to the adoption of the SIMADI rate. In the first quarter of 2016, the Venezuelan government reduced its three-tier system of exchange rates to two tiers and stated that the SIMADI rate, which was renamed DICOM, would be free floating. As of June 30, 2016, the DICOM rate was 628.3 bolivars to the U.S. dollar. New Accounting Pronouncements Adopted: In February 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis." ASU 2015-02 modifies the evaluation of whether limited partnership and similar legal entities are VIEs or voting interest entities; affects the consolidation analysis of reporting entities that are involved with VIEs; and provides scope exceptions. The amendment may be applied using a modified-retrospective approach, through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective or retrospectively. ASU 2015-02 was adopted by the Company effective January 1, 2016 and did not have an impact on the Company's financial statements. New Accounting Pronouncements Yet to be Adopted: In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." ASU 2016-13 requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. The income statement reflects the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decrease of expected credit losses that have taken place during the period. The amendment should be applied using a modified-retrospective approach, through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of ASU 2016-13 on the Company's financial statements. In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." ASU 2016-09 amends several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. If early adopted, an entity must adopt all of the amendments in the same period. The Company is currently evaluating the impact of the adoption of ASU 2016-09 on the Company's financial statements. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." ASU 2016-02 aims to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requiring disclosure of key information about leasing agreements. Entities are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2016-02 on the Company's financial statements. In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." ASU 2014-09 requires an entity to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the amendment provides five steps that an entity should apply when recognizing revenue. The amendment also specifies the accounting of some costs to obtain or fulfill a contract with a customer and expands the disclosure requirements around contracts with customers. An entity can either adopt this amendment retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying the update recognized at the date of initial application. In August 2015, the FASB issued ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," which deferred the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted as of annual reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact of the adoption of ASU 2014-09 on the Company's financial statements. |
EARNINGS PER SHARE |
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EARNINGS PER SHARE | EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share:
For the three months ended June 30, 2016 and 2015, common shares subject to equity-based awards of 810,200 and 556,371, respectively, were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive. For the six months ended June 30, 2016 and 2015, common shares subject to equity-based awards of 750,209 and 481,831, respectively, were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive. |
ACQUISITIONS |
6 Months Ended |
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Jun. 30, 2016 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS During May 2016, the Company acquired Vizient Manufacturing Solutions ("Vizient"). Vizient, based in Bettendorf, Iowa, is a robotic integrator specializing in custom engineered tooling and automated arc welding systems for general and heavy fabrication applications. The acquisition will assist in diversifying end-market exposure and broadening global growth opportunities. During August 2015, the Company acquired Specialised Welding Products ("SWP"). SWP, based in Melbourne, Australia, is a provider of specialty welding consumables and fabrication, maintenance and repair services for alloy and wear resistant products commonly used in mining and energy sector applications. The acquisition broadens the Company's presence and specialty alloy offering in Australia and New Zealand. During August 2015, the Company acquired Rimrock Holdings Corporation ("Rimrock"). Rimrock is a manufacturer of industrial automation products and robotic systems with two divisions, Wolf Robotics LLC, based in Fort Collins, Colorado, and Rimrock Corporation, based in Columbus, Ohio. Wolf Robotics integrates robotic welding and cutting systems predominantly for heavy fabrication and transportation OEMs and suppliers. The acquisition advances the Company's leadership position in automated welding and cutting solutions. Rimrock Corporation designs and manufactures automated spray systems and turnkey robotic systems for the die casting, foundry and forging markets. Pro forma information related to these acquisitions have not been presented because the impact on the Company’s Consolidated Statements of Operations is not material. Acquired companies are included in the Company’s consolidated financial statements as of the date of acquisition. |
SEGMENT INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | SEGMENT INFORMATION The Company’s primary business is the design and manufacture of arc welding and cutting products, manufacturing a broad line of arc welding equipment, consumable welding products and other welding and cutting products. Welding products include arc welding power sources, CNC and plasma cutters, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, consumable electrodes, fluxes and welding accessories. The Company's product offering also includes oxy-fuel cutting systems and regulators and torches used in oxy-fuel welding, cutting and brazing. In addition, the Company has a leading global position in the brazing and soldering alloys market. During the first quarter of 2016, the Company realigned its organizational and leadership structure into three operating segments to support growth strategies and enhance the utilization of the Company’s worldwide resources and global sourcing initiatives. The operating segments consist of Americas Welding, International Welding and The Harris Products Group. The Americas Welding segment includes welding operations in North and South America. The International Welding segment primarily includes welding operations in Europe, Africa, Asia and Australia. The Harris Products Group includes the Company’s global cutting, soldering and brazing businesses as well as its retail business in the United States. All prior period results have been revised to reflect the realigned segment structure. Segment performance is measured and resources are allocated based on a number of factors, the primary profit measure being adjusted earnings before interest and income taxes (“Adjusted EBIT”). EBIT is defined as Operating income plus Equity earnings in affiliates and Other income. Segment EBIT is adjusted for special items as determined by management such as the impact of rationalization activities, certain asset impairment charges and gains or losses on disposals of assets. Financial information for the reportable segments follows:
In the three and six months ended June 30, 2016, special items within Corporate/Eliminations reflect a loss on the deconsolidation of the Venezuelan subsidiary. In the three and six months ended June 30, 2015, special items in International Welding reflect rationalization activity charges. |
RATIONALIZATION AND ASSET IMPAIRMENTS |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RATIONALIZATION AND ASSET IMPAIRMENTS | RATIONALIZATION AND ASSET IMPAIRMENTS In prior periods, the Company initiated various rationalization plans whose costs were substantially recognized in the prior year. As such, no charges were recorded in the six months ended June 30, 2016. A description of each restructuring plan and the related costs follows: Americas Welding Plans: During 2015, the Company initiated a rationalization plan within Americas Welding that included a voluntary separation incentive program covering certain U.S.-based employees. The plan was completed during 2016. International Welding Plans: During 2015, the Company initiated rationalization plans within International Welding. The plans include headcount restructuring to better align cost structures with economic conditions and operating needs. The Company does not anticipate any additional charges related to the completion of these plans. At June 30, 2016, liabilities relating to the International Welding plans of $6,411 were recognized in Other current liabilities. The Company believes the rationalization actions will positively impact future results of operations and will not have a material effect on liquidity and sources and uses of capital. The Company continues to evaluate its cost structure and additional rationalization actions may result in charges in future periods. The following tables summarize the activity related to the rationalization liabilities by segment for the six months ended June 30, 2016:
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EQUITY |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY | EQUITY Changes in equity for the six months ended June 30, 2016 are as follows:
In April 2016, the Company's Board of Directors authorized a new share repurchase program, which increased the total number of the Company's common shares authorized to be repurchased to 55 million shares. At management’s discretion, the Company repurchases its common shares from time to time in the open market, depending on market conditions, stock price and other factors. During the three and six month period ended June 30, 2016, the Company purchased a total of 1.7 million and 3.6 million shares, respectively. As of June 30, 2016, there remained 11.1 million common shares available for repurchase under this program. The repurchased common shares remain in treasury and have not been retired. The following tables set forth the total changes in accumulated other comprehensive income (loss) ("AOCI") by component, net of taxes for the three months ended June 30, 2016 and 2015:
The following tables set forth the total changes in AOCI by component, net of taxes for the six months ended June 30, 2016 and 2015:
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INVENTORY VALUATION |
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Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORY VALUATION | INVENTORY VALUATION The valuation of last-in, first-out ("LIFO") method inventories is made at the end of each year based on inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs. Actual year-end costs and inventory levels may differ from interim LIFO inventory valuations. The excess of current cost over LIFO cost was $61,787 at June 30, 2016 and $59,765 at December 31, 2015. |
ACCRUED EMPLOYEE BONUS |
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Jun. 30, 2016 | |
Accrued Employee Compensation And Benefits Disclosure Abstract | |
ACCRUED EMPLOYEE BONUS | ACCRUED EMPLOYEE BONUS Other current liabilities at June 30, 2016 and 2015 include accruals for year-end bonuses and related payroll taxes of $48,506 and $59,402, respectively, related to the Company’s employees worldwide. The payment of bonuses is discretionary and subject to approval by the Board of Directors. A majority of annual bonuses are paid in December, resulting in an increasing bonus accrual during the Company’s fiscal year. |
CONTINGENCIES |
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Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES The Company, like other manufacturers, is subject from time to time to a variety of civil and administrative proceedings arising in the ordinary course of business. Such claims and litigation include, without limitation, product liability claims, regulatory claims and health, safety and environmental claims, some of which relate to cases alleging asbestos induced illnesses. The claimants in the asbestos cases seek compensatory and punitive damages, in most cases for unspecified amounts. The Company believes it has meritorious defenses to these claims and intends to contest such suits vigorously. The Company accrues its best estimate of the probable costs, after a review of the facts with management and counsel and taking into account past experience. If an unfavorable outcome is determined to be reasonably possible but not probable, or if the amount of loss cannot be reasonably estimated, disclosure is provided for material claims or litigation. Many of the current cases are in differing procedural stages and information on the circumstances of each claimant, which forms the basis for judgments as to the validity or ultimate disposition of such actions, varies greatly. Therefore, in many situations a range of possible losses cannot be made. Reserves are adjusted as facts and circumstances change and related management assessments of the underlying merits and the likelihood of outcomes change. Moreover, reserves only cover identified and/or asserted claims. Future claims could, therefore, give rise to increases to such reserves. Based on the Company's historical experience in litigating product liability claims, including a significant number of dismissals, summary judgments and defense verdicts in many cases and immaterial settlement amounts, as well as the Company's current assessment of the underlying merits of the claims and applicable insurance, the Company believes resolution of these claims and proceedings, individually or in the aggregate, will not have a material effect on the Company's consolidated financial statements. |
PRODUCT WARRANTY COSTS |
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Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PRODUCT WARRANTY COSTS | PRODUCT WARRANTY COSTS The changes in the carrying amount of product warranty accruals for the six months ended June 30, 2016 and 2015 are as follows:
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DEBT |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT Revolving Credit Agreement The Company has a line of credit totaling $400,000 through the Amended and Restated Credit Agreement (the “Credit Agreement”), which was entered into on September 12, 2014. The Credit Agreement contains customary affirmative, negative and financial covenants for credit facilities of this type, including limitations on the Company and its subsidiaries with respect to liens, investments, distributions, mergers and acquisitions, dispositions of assets, transactions with affiliates and a fixed charges coverage ratio and total leverage ratio. As of June 30, 2016, the Company was in compliance with all of its covenants and had $135,000 in outstanding borrowings under the Credit Agreement which was recorded in Short-term debt. The Credit Agreement has a five-year term and may be increased, subject to certain conditions, by an additional amount up to $100,000. The interest rate on borrowings is based on either LIBOR or the prime rate, plus a spread based on the Company’s leverage ratio, at the Company’s election. Senior Unsecured Notes On April 1, 2015, the Company entered into a Note Purchase Agreement pursuant to which it agreed to issue Senior Unsecured Notes (the "Notes") in the aggregate principal amount of $350,000 through a private placement. At June 30, 2016, $349,175, net of debt issuance costs of $825 and excluding accretion of original issuance costs, was outstanding and recorded in Long-term debt, less current portion. The proceeds are being used for general corporate purposes. The Notes, as shown in the table below, have maturities ranging from 10 to 30 years with a weighted average effective interest rate of 3.5%, excluding accretion of original issuance costs, and an average tenure of 19 years. Interest is payable semi-annually. The Notes contain certain affirmative and negative covenants. As of June 30, 2016, the Company was in compliance with all of its debt covenants. The maturity and interest rates of the Notes are as follows:
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RETIREMENT AND POSTRETIREMENT BENEFIT PLANS |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS | RETIREMENT AND POSTRETIREMENT BENEFIT PLANS The components of total pension cost were as follows:
The Company voluntarily contributed $20,000 to its defined benefit plans in the United States during the six months ended June 30, 2016. The decrease in the components of total pension cost for the defined benefit plans in 2016 was primarily due to the purchase of a group annuity contract in August 2015. |
INCOME TAXES |
6 Months Ended |
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Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company recognized $34,007 of tax expense on pretax income of $118,940, resulting in an effective income tax rate of 28.6% for the six months ended June 30, 2016. The effective income tax rate was 25.6% for the six months ended June 30, 2015. The 2016 and 2015 effective income tax rates were lower than the Company’s statutory rate primarily due to the utilization of U.S. tax credits, income earned in lower tax rate jurisdictions and the reversal of an income tax valuation allowance as a result of a legal entity change to realign the Company’s tax structure. The 2015 effective income tax rate was also lower due to refund interest recognized as a reduction to tax expense. As of June 30, 2016, the Company had $14,496 of unrecognized tax benefits. If recognized, approximately $8,880 would be reflected as a component of income tax expense. The Company files income tax returns in the U.S. and various state, local and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local or non-U.S. income tax examinations by tax authorities for years before 2011. The Company is currently subject to various U.S. state and non-U.S. income tax audits. Unrecognized tax benefits are reviewed on an ongoing basis and are adjusted for changing facts and circumstances, including progress of tax audits and closing of statutes of limitations. Based on information currently available, management believes that additional audit activity could be completed and/or statutes of limitations may close relating to existing unrecognized tax benefits. It is reasonably possible there could be a reduction of $2,384 in previously unrecognized tax benefits by the end of the second quarter 2017. |
DERIVATIVES |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVES | DERIVATIVES The Company uses derivatives to manage exposures to currency exchange rates, interest rates and commodity prices arising in the normal course of business. Both at inception and on an ongoing basis, the derivative instruments that qualify for hedge accounting are assessed as to their effectiveness, when applicable. Hedge ineffectiveness was immaterial in the six months ended June 30, 2016 and 2015. The Company is subject to the credit risk of the counterparties to derivative instruments. Counterparties include a number of major banks and financial institutions. None of the concentrations of risk with any individual counterparty was considered significant at June 30, 2016. The Company does not expect any counterparties to fail to meet their obligations. Cash Flow Hedges Certain foreign currency forward contracts and interest rate swap agreements were qualified and designated as cash flow hedges. The dollar equivalent gross notional amount of these short-term contracts was $121,144 at June 30, 2016 and $30,388 at December 31, 2015. Net Investment Hedges The Company has foreign currency forward contracts that were qualified and designated as net investment hedges. No such contracts were outstanding at June 30, 2016 and December 31, 2015. Derivatives Not Designated as Hedging Instruments The Company has certain foreign exchange forward contracts that are not designated as hedges. These derivatives are held as economic hedges of certain balance sheet exposures. The dollar equivalent gross notional amount of these contracts was $296,373 at June 30, 2016 and $267,626 at December 31, 2015. The Company had short-term silver forward contracts with notional amounts of $2,804 at December 31, 2015. Fair values of derivative instruments in the Company’s Consolidated Balance Sheets follow:
The effects of undesignated derivative instruments on the Company’s Consolidated Statements of Operations for the three and six months ended June 30, 2016 and 2015 consisted of the following:
The effects of designated hedges on AOCI and the Company’s Consolidated Statements of Operations consisted of the following:
The Company expects a loss of $260 related to existing contracts to be reclassified from AOCI, net of tax, to earnings over the next 12 months as the hedged transactions are realized.
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FAIR VALUE |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE | FAIR VALUE The following table provides a summary of assets and liabilities as of June 30, 2016, measured at fair value on a recurring basis:
The following table provides a summary of assets and liabilities as of December 31, 2015, measured at fair value on a recurring basis:
The Company’s derivative contracts are valued at fair value using the market approach. The Company measures the fair value of foreign exchange contracts and interest rate swap agreements using Level 2 inputs based on observable spot and forward rates in active markets. The Company measures the fair value of commodity contracts using Level 2 inputs through observable market transactions in active markets provided by financial institutions. During the six months ended June 30, 2016, there were no transfers between Levels 1, 2 or 3. In connection with acquisitions, the Company recorded contingent considerations fair valued at $9,251 as of June 30, 2016. Under the contingent consideration agreements, the amounts to be paid are based upon actual financial results of the acquired entities for specified future periods. The fair value of the contingent considerations are a Level 3 valuation and fair valued using probability weighted discounted cash flow analyses. In connection with an acquisition, the Company obtained a controlling financial interest in the acquired entity and at the same time entered into a contract to obtain the remaining financial interest in the entity over a three-year period. The amount to be paid to obtain the remaining financial interest will be based upon actual financial results of the entity through 2016. A liability was recorded for the Canadian dollar denominated forward contract at a fair value of $14,936 as of June 30, 2016. The change in liability from December 31, 2015 was primarily the result of a $14,438 payment to acquire an additional financial interest in the entity offset by foreign exchange translation and additional accruals of $531 for the six months ended June 30, 2016. The fair value of the contract is a Level 3 valuation and is based on the present value of the expected future payments. The expected future payments are based on a multiple of forecasted earnings and cash flows over the three-year period ending December 31, 2016, present valued utilizing a risk based discount rate of 3.5% reflective of the Company's cost of debt and 13.7% as a risk adjusted cost of capital. The deferred compensation liability is the Company’s obligation under its executive deferred compensation plan. The Company measures the fair value of the liability using the market values of the participants’ underlying investment fund elections. The fair value of Cash and cash equivalents, Accounts receivable, Short-term debt excluding the current portion of long-term debt and Trade accounts payable approximated book value due to the short-term nature of these instruments at both June 30, 2016 and December 31, 2015. The fair value of long-term debt at June 30, 2016 and December 31, 2015, including the current portion, was approximately $381,128 and $342,602, respectively, which was determined using available market information and methodologies requiring judgment. The carrying value of this debt at such dates was $361,089 and $351,803, respectively. Since considerable judgment is required in interpreting market information, the fair value of the debt is not necessarily the amount that could be realized in a current market exchange. |
BASIS OF PRESENTATION (Policies) |
6 Months Ended |
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Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Segments | The Company’s primary business is the design and manufacture of arc welding and cutting products, manufacturing a broad line of arc welding equipment, consumable welding products and other welding and cutting products. Welding products include arc welding power sources, CNC and plasma cutters, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, consumable electrodes, fluxes and welding accessories. The Company's product offering also includes oxy-fuel cutting systems and regulators and torches used in oxy-fuel welding, cutting and brazing. In addition, the Company has a leading global position in the brazing and soldering alloys market. During the first quarter of 2016, the Company realigned its organizational and leadership structure into three operating segments to support growth strategies and enhance the utilization of the Company’s worldwide resources and global sourcing initiatives. The operating segments consist of Americas Welding, International Welding and The Harris Products Group. The Americas Welding segment includes welding operations in North and South America. The International Welding segment primarily includes welding operations in Europe, Africa, Asia and Australia. The Harris Products Group includes the Company’s global cutting, soldering and brazing businesses as well as its retail business in the United States. All prior period results have been revised to reflect the realigned segment structure. Segment performance is measured and resources are allocated based on a number of factors, the primary profit measure being adjusted earnings before interest and income taxes (“Adjusted EBIT”). EBIT is defined as Operating income plus Equity earnings in affiliates and Other income. Segment EBIT is adjusted for special items as determined by management such as the impact of rationalization activities, certain asset impairment charges and gains or losses on disposals of assets. |
Inventories | The valuation of last-in, first-out ("LIFO") method inventories is made at the end of each year based on inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs. Actual year-end costs and inventory levels may differ from interim LIFO inventory valuations. |
Financial Instruments | The Company uses derivatives to manage exposures to currency exchange rates, interest rates and commodity prices arising in the normal course of business. Both at inception and on an ongoing basis, the derivative instruments that qualify for hedge accounting are assessed as to their effectiveness, when applicable. Hedge ineffectiveness was immaterial in the six months ended June 30, 2016 and 2015. The Company is subject to the credit risk of the counterparties to derivative instruments. Counterparties include a number of major banks and financial institutions. None of the concentrations of risk with any individual counterparty was considered significant at June 30, 2016. The Company does not expect any counterparties to fail to meet their obligations. Cash Flow Hedges Certain foreign currency forward contracts and interest rate swap agreements were qualified and designated as cash flow hedges. The dollar equivalent gross notional amount of these short-term contracts was $121,144 at June 30, 2016 and $30,388 at December 31, 2015. Net Investment Hedges The Company has foreign currency forward contracts that were qualified and designated as net investment hedges. No such contracts were outstanding at June 30, 2016 and December 31, 2015. Derivatives Not Designated as Hedging Instruments The Company has certain foreign exchange forward contracts that are not designated as hedges. These derivatives are held as economic hedges of certain balance sheet exposures. The dollar equivalent gross notional amount of these contracts was $296,373 at June 30, 2016 and $267,626 at December 31, 2015. The Company had short-term silver forward contracts with notional amounts of $2,804 at December 31, 2015. |
NEW ACCOUNTING PRONOUNCEMENTS | New Accounting Pronouncements Adopted: In February 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis." ASU 2015-02 modifies the evaluation of whether limited partnership and similar legal entities are VIEs or voting interest entities; affects the consolidation analysis of reporting entities that are involved with VIEs; and provides scope exceptions. The amendment may be applied using a modified-retrospective approach, through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective or retrospectively. ASU 2015-02 was adopted by the Company effective January 1, 2016 and did not have an impact on the Company's financial statements. New Accounting Pronouncements Yet to be Adopted: In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." ASU 2016-13 requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. The income statement reflects the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decrease of expected credit losses that have taken place during the period. The amendment should be applied using a modified-retrospective approach, through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of ASU 2016-13 on the Company's financial statements. In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." ASU 2016-09 amends several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. If early adopted, an entity must adopt all of the amendments in the same period. The Company is currently evaluating the impact of the adoption of ASU 2016-09 on the Company's financial statements. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." ASU 2016-02 aims to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requiring disclosure of key information about leasing agreements. Entities are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2016-02 on the Company's financial statements. In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." ASU 2014-09 requires an entity to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the amendment provides five steps that an entity should apply when recognizing revenue. The amendment also specifies the accounting of some costs to obtain or fulfill a contract with a customer and expands the disclosure requirements around contracts with customers. An entity can either adopt this amendment retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying the update recognized at the date of initial application. In August 2015, the FASB issued ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," which deferred the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted as of annual reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact of the adoption of ASU 2014-09 on the Company's financial statements. |
EARNINGS PER SHARE (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of computation of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted earnings per share:
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SEGMENT INFORMATION (Tables) |
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of financial information for the reportable segments | Financial information for the reportable segments follows:
|
RATIONALIZATION AND ASSET IMPAIRMENTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Reserve by Type of Cost [Table Text Block] | The following tables summarize the activity related to the rationalization liabilities by segment for the six months ended June 30, 2016:
|
EQUITY (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in equity | Changes in equity for the six months ended June 30, 2016 are as follows:
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Components of accumulated other comprehensive (loss) income | The following tables set forth the total changes in accumulated other comprehensive income (loss) ("AOCI") by component, net of taxes for the three months ended June 30, 2016 and 2015:
The following tables set forth the total changes in AOCI by component, net of taxes for the six months ended June 30, 2016 and 2015:
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PRODUCT WARRANTY COSTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the changes in the carrying amount of product warranty accruals | The changes in the carrying amount of product warranty accruals for the six months ended June 30, 2016 and 2015 are as follows:
|
DEBT Senior Unsecured Notes (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt [Table Text Block] | The maturity and interest rates of the Notes are as follows:
|
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of total pension cost | The components of total pension cost were as follows:
|
DERIVATIVES (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair values of derivative instruments on the Company's Consolidated Balance Sheets | Fair values of derivative instruments in the Company’s Consolidated Balance Sheets follow:
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Schedule of effects of undesignated derivative instruments on the Company's Consolidated Statements of Income | The effects of undesignated derivative instruments on the Company’s Consolidated Statements of Operations for the three and six months ended June 30, 2016 and 2015 consisted of the following:
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Schedule of effects of designated hedges on AOCI and the entity's Consolidated Statements of Income | The effects of designated hedges on AOCI and the Company’s Consolidated Statements of Operations consisted of the following:
The Company expects a loss of $260 related to existing contracts to be reclassified from AOCI, net of tax, to earnings over the next 12 months as the hedged transactions are realized.
|
FAIR VALUE (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of assets and liabilities measured at fair value on a recurring basis | The following table provides a summary of assets and liabilities as of June 30, 2016, measured at fair value on a recurring basis:
The following table provides a summary of assets and liabilities as of December 31, 2015, measured at fair value on a recurring basis:
|
BASIS OF PRESENTATION (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Jun. 30, 2016
USD ($)
VEB / $
|
Jun. 30, 2015
USD ($)
|
Jun. 30, 2016
USD ($)
VEB / $
|
Jun. 30, 2015
USD ($)
|
Dec. 31, 2015
USD ($)
|
Sep. 30, 2015
VEB / $
|
Dec. 31, 2014
USD ($)
|
|
Venezuela-Highly Inflationary Economy | |||||||
Deconsolidation, (Gain) Loss, Amount | $ 34,348 | $ 0 | $ 34,348 | $ 0 | |||
DeconsolidationGainOrLossAmountNet | 33,251 | ||||||
Cash Divested from Deconsolidation | $ 283 | ||||||
Venezuela foreign currency transaction loss | $ 4,334 | ||||||
Inventory Write-down | 22,880 | ||||||
DICOMRate | VEB / $ | 628.3 | 628.3 | 199.4 | ||||
Cash and cash equivalents | $ 237,019 | $ 312,737 | $ 237,019 | $ 312,737 | $ 304,183 | $ 278,379 |
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Numerator: | ||||
Net income | $ 31,317 | $ 70,898 | $ 84,955 | $ 139,252 |
Denominator (shares in 000's): | ||||
Basic weighted average shares outstanding (in shares) | 68,181,000 | 75,000,000 | 68,883,000 | 75,621,000 |
Effect of dilutive securities - Stock options and awards (in shares) | 709,000 | 773,000 | 686,000 | 795,000 |
Diluted weighted average shares outstanding (in shares) | 68,890,000 | 75,773,000 | 69,569,000 | 76,416,000 |
Earnings (loss) per share | ||||
Basic earnings (loss) per share (in dollars per share) | $ 0.46 | $ 0.95 | $ 1.23 | $ 1.84 |
Diluted earnings (loss) per share (in dollars per share) | $ 0.45 | $ 0.94 | $ 1.22 | $ 1.82 |
Anti-dilutive shares excluded from the computation of diluted earnings per share | 810,200 | 556,371 | 750,209 | 481,831 |
ACQUISITIONS (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Acquisitions | ||||
Annual sales at the date of acquisition | $ 592,418 | $ 664,740 | $ 1,143,140 | $ 1,322,640 |
SEGMENT INFORMATION (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016
USD ($)
|
Jun. 30, 2015
USD ($)
|
Jun. 30, 2016
USD ($)
segment
|
Jun. 30, 2015
USD ($)
|
|
Financial information for the reportable segments | ||||
Number of operating segments | segment | 3 | |||
Net sales | $ 592,418 | $ 664,740 | $ 1,143,140 | $ 1,322,640 |
Inter-segment sales | 0 | 0 | 0 | 0 |
Total | 592,418 | 664,740 | 1,143,140 | 1,322,640 |
EBIT, as adjusted | 83,857 | 99,322 | 160,436 | 193,280 |
Special items net charges | 34,348 | 1,239 | 34,348 | 1,239 |
EBIT | 49,509 | 98,083 | 126,088 | 192,041 |
Interest income | 435 | 738 | 865 | 1,331 |
Interest expense | (4,186) | (4,387) | (8,013) | (6,231) |
Income before income taxes | 45,758 | 94,434 | 118,940 | 187,141 |
The Harris Products Group | ||||
Financial information for the reportable segments | ||||
Net sales | 71,231 | 71,812 | 138,640 | 141,628 |
Inter-segment sales | 2,824 | 2,716 | 5,127 | 4,727 |
Total | 74,055 | 74,528 | 143,767 | 146,355 |
EBIT, as adjusted | 9,284 | 8,250 | 16,995 | 15,799 |
Special items net charges | 0 | 0 | 0 | 0 |
EBIT | 9,284 | 8,250 | 16,995 | 15,799 |
Corporate / Eliminations | ||||
Financial information for the reportable segments | ||||
Net sales | 0 | 0 | 0 | 0 |
Inter-segment sales | (30,121) | (31,929) | (60,681) | (61,990) |
Total | (30,121) | (31,929) | (60,681) | (61,990) |
EBIT, as adjusted | (298) | 634 | 899 | 694 |
Special items net charges | 34,348 | 0 | 34,348 | 0 |
EBIT | (34,646) | 634 | (33,449) | 694 |
Americas Welding | ||||
Financial information for the reportable segments | ||||
Net sales | 388,372 | 451,001 | 747,380 | 899,838 |
Inter-segment sales | 23,456 | 23,902 | 47,287 | 46,925 |
Total | 411,828 | 474,903 | 794,667 | 946,763 |
EBIT, as adjusted | 65,201 | 79,421 | 126,639 | 154,836 |
Special items net charges | 0 | 0 | 0 | 0 |
EBIT | 65,201 | 79,421 | 126,639 | 154,836 |
International Welding | ||||
Financial information for the reportable segments | ||||
Net sales | 132,815 | 141,927 | 257,120 | 281,174 |
Inter-segment sales | 3,841 | 5,311 | 8,267 | 10,338 |
Total | 136,656 | 147,238 | 265,387 | 291,512 |
EBIT, as adjusted | 9,670 | 11,017 | 15,903 | 21,951 |
Special items net charges | 0 | 1,239 | 0 | 1,239 |
EBIT | $ 9,670 | $ 9,778 | $ 15,903 | $ 20,712 |
RATIONALIZATION AND ASSET IMPAIRMENTS Summary of Activity Related to Rationalization Liabilities by Segment (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Rationalization and Asset Impairments | ||
Restructuring Reserve | $ 6,411 | $ 7,665 |
Payments and other adjustments | (1,254) | |
Business Exit Costs | 0 | |
Americas Welding | ||
Rationalization and Asset Impairments | ||
Restructuring Reserve | 0 | 67 |
Payments and other adjustments | (67) | |
Business Exit Costs | 0 | |
International Welding | ||
Rationalization and Asset Impairments | ||
Restructuring Reserve | 6,411 | $ 7,598 |
Payments and other adjustments | (1,187) | |
Business Exit Costs | $ 0 |
RATIONALIZATION AND ASSET IMPAIRMENTS (Textual) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
|
Rationalization and Asset Impairments | |||||
Restructuring Reserve | $ 6,411 | $ 6,411 | $ 7,665 | ||
Special Items Charge (Gain) | 34,348 | $ 1,239 | 34,348 | $ 1,239 | |
Other current assets | 100,367 | 100,367 | 91,167 | ||
Other current liabilities | 226,845 | 226,845 | 213,224 | ||
International Welding | |||||
Rationalization and Asset Impairments | |||||
Restructuring Reserve | 6,411 | 6,411 | $ 7,598 | ||
Special Items Charge (Gain) | $ 0 | $ 1,239 | $ 0 | $ 1,239 |
EQUITY COMMON SHARE REPURCHASE PROGRAM (Details) |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2016
shares
|
Jun. 30, 2016
shares
|
|
COMMON SHARE REPURCHASE PROGRAM [Abstract] | ||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 55,000,000 | 55,000,000 |
Treasury Stock, Shares, Acquired | 1,670,289 | 3,615,694 |
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased | 11,132,227 | 11,132,227 |
INVENTORY VALUATION (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Excess of current cost over LIFO cost | $ 61,787 | $ 59,765 |
ACCRUED EMPLOYEE BONUS (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Jun. 30, 2015 |
---|---|---|
Accrued Employee Compensation And Benefits Disclosure Abstract | ||
Accruals for year-end bonuses and related payroll taxes included in other current liabilities | $ 48,506 | $ 59,402 |
PRODUCT WARRANTY COSTS (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Changes in the carrying amount of product warranty accruals | ||
Balance at beginning of year | $ 19,469 | $ 15,579 |
Accruals for warranties | 6,444 | 7,327 |
Settlements | (6,178) | (6,796) |
Foreign currency translation | 107 | (229) |
Balance at end of year | $ 19,842 | $ 15,881 |
DEBT (Details) - USD ($) $ in Thousands |
1 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Apr. 30, 2015 |
Sep. 30, 2014 |
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Debt | ||||
Short-term Bank Loans and Notes Payable | $ 159,908 | $ 4,278 | ||
Unamortized Debt Issuance Expense | 825 | |||
Revolving credit agreement | ||||
Debt | ||||
Borrowing capacity under the line of credit | $ 400,000 | |||
Line of Credit Facility, Initiation Date | Sep. 12, 2014 | |||
Covenant compliance description | As of June 30, 2016, the Company was in compliance with all of its covenants | |||
Short-term Bank Loans and Notes Payable | $ 135,000 | |||
Additional increase in borrowing capacity of the line of credit available at the entity's option | $ 100,000 | |||
Debt Instrument, Term | 5 years | |||
Senior Notes [Member] | ||||
Debt | ||||
Debt Instrument, Initiation Date | Apr. 01, 2015 | |||
Debt Instrument, Face Amount | $ 350,000 | |||
Debt, Weighted Average Interest Rate | 3.50% | |||
Debt Instrument, Covenant Compliance | As of June 30, 2016, the Company was in compliance with all of its debt covenants | |||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 349,175 | |||
Weighted Average [Member] | ||||
Debt | ||||
Debt Instrument, Term | 19 years | |||
Minimum [Member] | Senior Notes [Member] | ||||
Debt | ||||
Debt Instrument, Term | 10 years | |||
Maximum | Senior Notes [Member] | ||||
Debt | ||||
Debt Instrument, Term | 30 years | |||
Senior Notes Series A [Member] | ||||
Debt | ||||
Debt Instrument, Maturity Date | Aug. 20, 2025 | |||
Debt Instrument, Interest Rate, Stated Percentage | 3.15% | |||
Debt Instrument, Face Amount | $ 100,000 | |||
Senior Notes Series B [Member] | ||||
Debt | ||||
Debt Instrument, Maturity Date | Aug. 20, 2030 | |||
Debt Instrument, Interest Rate, Stated Percentage | 3.35% | |||
Debt Instrument, Face Amount | $ 100,000 | |||
Senior Notes Series C [Member] | ||||
Debt | ||||
Debt Instrument, Maturity Date | Apr. 01, 2035 | |||
Debt Instrument, Interest Rate, Stated Percentage | 3.61% | |||
Debt Instrument, Face Amount | $ 50,000 | |||
Senior Notes Series D [Member] | ||||
Debt | ||||
Debt Instrument, Maturity Date | Apr. 01, 2045 | |||
Debt Instrument, Interest Rate, Stated Percentage | 4.02% | |||
Debt Instrument, Face Amount | $ 100,000 |
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||||
Service cost | $ 4,439 | $ 5,038 | $ 8,869 | $ 10,460 | ||||||
Interest cost | 6,018 | 10,413 | 12,029 | 20,744 | ||||||
Expected return on plan assets | (8,894) | (16,242) | (17,758) | (31,980) | ||||||
Amortization of prior service cost | (99) | (156) | (198) | (312) | ||||||
Amortization of net loss | 3,648 | [1] | 5,872 | 6,314 | [2] | 11,692 | ||||
Defined benefit plans | 5,112 | 4,925 | 9,256 | 10,604 | ||||||
Multi-employer plans | 193 | 211 | 395 | 428 | ||||||
Defined contribution plans | 2,192 | 2,945 | 4,161 | 5,961 | ||||||
Total pension cost | 7,497 | $ 8,081 | 13,812 | $ 16,993 | ||||||
Voluntarily contribution to defined benefit plans in United States | 20,000 | |||||||||
VENEZUELA | ||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||||
Amortization of net loss | $ 959 | $ 959 | ||||||||
|
INCOME TAXES (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Income Tax Disclosure [Abstract] | ||||
Income taxes | $ 14,449 | $ 23,558 | $ 34,007 | $ 47,947 |
Pre-tax income | 45,758 | $ 94,434 | $ 118,940 | $ 187,141 |
Effective income tax rate (as a percent) | 28.60% | 25.60% | ||
Unrecognized tax benefits | 14,496 | $ 14,496 | ||
Unrecognized tax benefits that, if recognized, would be reflected as a component of income tax expense | 8,880 | 8,880 | ||
Reasonably possible reduction in prior years' unrecognized tax benefits during the next twelve months | $ 2,384 | $ 2,384 |
DERIVATIVES (Fair Value of Derivative Instruments) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | $ 4,481 | $ 843 |
Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 4,462 | 3,042 |
Designated as Hedging Instrument | Foreign exchange contracts | Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 499 | 178 |
Designated as Hedging Instrument | Foreign exchange contracts | Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 568 | 731 |
Designated as Hedging Instrument | Interest Rate Swap [Member] | Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 0 | 0 |
Designated as Hedging Instrument | Interest Rate Swap [Member] | Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 162 | 0 |
Not designated as hedging instruments | Foreign exchange contracts | Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 3,982 | 625 |
Not designated as hedging instruments | Foreign exchange contracts | Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 3,732 | 2,303 |
Not designated as hedging instruments | Commodity contracts | Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 0 | 40 |
Not designated as hedging instruments | Commodity contracts | Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | $ 0 | $ 8 |
DERIVATIVES (Income Statement Impact) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Foreign exchange contracts | Selling, general and administrative expense | ||||
Effects of undesignated cash flow hedges on the entity's Consolidated Statements of Income | ||||
Gains (loss) recognized in income | $ (10,507) | $ 2,512 | $ (6,910) | $ (7,092) |
Commodity contracts | Cost of goods sold | ||||
Effects of undesignated cash flow hedges on the entity's Consolidated Statements of Income | ||||
Gains (loss) recognized in income | $ (373) | $ 194 | $ (742) | $ 50 |
DERIVATIVES (AOCI Impact) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
|
Foreign exchange contracts | |||||
Effects of designated cash flow hedges on the entity's AOCI | |||||
Gain (loss) recognized in AOCI, net of tax | $ (260) | $ (551) | |||
Foreign exchange contracts | Sales | |||||
Effects of designated cash flow hedges on the entity's AOCI | |||||
Gain (loss) reclassified from AOCI to income | $ (152) | $ 8 | (939) | $ (521) | |
Foreign exchange contracts | Cost of goods sold | |||||
Effects of designated cash flow hedges on the entity's AOCI | |||||
Gain (loss) reclassified from AOCI to income | $ (154) | $ 306 | (230) | $ 613 | |
Net Investment Hedging [Member] | |||||
Effects of designated cash flow hedges on the entity's AOCI | |||||
Gain (loss) recognized in AOCI, net of tax | 1,099 | 1,099 | |||
Interest Rate Swap [Member] | |||||
Effects of designated cash flow hedges on the entity's AOCI | |||||
Gain (loss) recognized in AOCI, net of tax | $ (100) | $ 0 |
DERIVATIVES (Textual) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Derivative [Line Items] | ||
Gain (loss) expected to be reclassified from AOCI to earnings, next twelve months | $ (260) | |
Gain (loss) expected to be reclassified from AOCI to earnings, period of recognition | 12 months | |
Hedge ineffectiveness was immaterial | Hedge ineffectiveness was immaterial in the six months ended June 30, 2016 and 2015. | |
Foreign exchange contracts | Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 121,144 | $ 30,388 |
Foreign exchange contracts | Not designated as hedging instruments | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 296,373 | 267,626 |
Silver forward contract | Not designated as hedging instruments | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 2,804 |
FAIR VALUE (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Liabilities: | ||
Contingent consideration | $ 9,251 | |
Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Total assets | 4,481 | $ 843 |
Liabilities: | ||
Contingent consideration | 9,251 | 9,184 |
Forward contract | 14,936 | 26,484 |
Deferred compensation | 24,266 | 23,201 |
Total liabilities | 52,915 | 61,911 |
Fair Value, Measurements, Recurring [Member] | Foreign exchange contracts | ||
Assets: | ||
Assets | 4,481 | 803 |
Liabilities: | ||
Liabilities | 4,300 | 3,034 |
Fair Value, Measurements, Recurring [Member] | Interest Rate Swap [Member] | ||
Liabilities: | ||
Liabilities | 162 | |
Fair Value, Measurements, Recurring [Member] | Commodity contracts | ||
Assets: | ||
Assets | 40 | |
Liabilities: | ||
Liabilities | 8 | |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Forward contract | 0 | 0 |
Deferred compensation | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) | Foreign exchange contracts | ||
Assets: | ||
Assets | 0 | 0 |
Liabilities: | ||
Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) | Interest Rate Swap [Member] | ||
Liabilities: | ||
Liabilities | 0 | |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) | Commodity contracts | ||
Assets: | ||
Assets | 0 | |
Liabilities: | ||
Liabilities | 0 | |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Total assets | 4,481 | 843 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Forward contract | 0 | 0 |
Deferred compensation | 24,266 | 23,201 |
Total liabilities | 28,728 | 26,243 |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | Foreign exchange contracts | ||
Assets: | ||
Assets | 4,481 | 803 |
Liabilities: | ||
Liabilities | 4,300 | 3,034 |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | Interest Rate Swap [Member] | ||
Liabilities: | ||
Liabilities | 162 | |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | Commodity contracts | ||
Assets: | ||
Assets | 40 | |
Liabilities: | ||
Liabilities | 8 | |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration | 9,251 | 9,184 |
Forward contract | 14,936 | 26,484 |
Deferred compensation | 0 | 0 |
Total liabilities | 24,187 | 35,668 |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | Foreign exchange contracts | ||
Assets: | ||
Assets | 0 | 0 |
Liabilities: | ||
Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | Interest Rate Swap [Member] | ||
Liabilities: | ||
Liabilities | $ 0 | |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | Commodity contracts | ||
Assets: | ||
Assets | 0 | |
Liabilities: | ||
Liabilities | $ 0 |
FAIR VALUE (Textual) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Assets and liabilities measured at fair value on a recurring basis | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Period Increase (Decrease) | $ 531 | |
Fair value of contingent consideration liability | $ 9,251 | |
Business Combination Arrangement Remaining Interest Period | 3 years | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases, (Sales), Issuances, (Settlements) | $ 14,438 | |
Cost of debt (as a percent) | 3.50% | |
Risk adjusted cost of capital (as a percent) | 13.70% | |
Fair value of long-term debt | $ 381,128 | $ 342,602 |
Carrying value of long-term debt | 361,089 | 351,803 |
Fair Value, Measurements, Recurring [Member] | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Fair value of contingent consideration liability | 9,251 | 9,184 |
Fair Value of forward contract liability | $ 14,936 | $ 26,484 |
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