0000059527-21-000032.txt : 20211028 0000059527-21-000032.hdr.sgml : 20211028 20211028084759 ACCESSION NUMBER: 0000059527-21-000032 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 20211028 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20211028 DATE AS OF CHANGE: 20211028 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LINCOLN ELECTRIC HOLDINGS INC CENTRAL INDEX KEY: 0000059527 STANDARD INDUSTRIAL CLASSIFICATION: METALWORKING MACHINERY & EQUIPMENT [3540] IRS NUMBER: 340359955 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-01402 FILM NUMBER: 211355200 BUSINESS ADDRESS: STREET 1: 22801 ST CLAIR AVE CITY: CLEVELAND STATE: OH ZIP: 44117 BUSINESS PHONE: 2164818100 MAIL ADDRESS: STREET 1: 22801 ST CLAIR AVE CITY: CLEVELAND STATE: OH ZIP: 44117 FORMER COMPANY: FORMER CONFORMED NAME: LINCOLN ELECTRIC CO DATE OF NAME CHANGE: 19920703 8-K 1 leco-20211028x8k.htm 8-K
0000059527false00000595272021-10-282021-10-28

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 28, 2021

LINCOLN ELECTRIC HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

0-1402

(Commission File Number)

Ohio

    

34-1860551

(State or other jurisdiction of
incorporation)

(I.R.S. Employer Identification No.)

22801 St. Clair Avenue, Cleveland, Ohio 44117

(Address of principal executive offices, with zip code)

(216) 481-8100

(Registrant’s telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of exchange on which registered

Common Shares, without par value

LECO

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02

Results of Operations and Financial Condition.

On October 28, 2021, Lincoln Electric Holdings, Inc. (the “Company”) issued a press release reporting its financial results for the quarter ended September 30, 2021.  A copy of the Company’s press release issued on October 28, 2021 is attached hereto as Exhibit 99.1 and incorporated herein by reference.  The press release is also available through the Company’s website at www.lincolnelectric.com.  The information in this Current Report on Form 8-K, including the Exhibit, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits

99.1  The Company’s press release dated October 28, 2021.

104 Cover page Interactive Data File (formatted as Inline XBRL and contained in the Exhibit 101 attachments)

LINCOLN ELECTRIC HOLDINGS, INC.

INDEX TO EXHIBITS

Exhibit No.

   

Exhibit

99.1

The Company’s press release dated October 28, 2021.

 104

Cover page Interactive Data File (formatted as Inline XBRL and contained in the Exhibit 101 attachments)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

LINCOLN ELECTRIC HOLDINGS, INC.

/s/ Gabriel Bruno

Gabriel Bruno

Executive Vice President, Chief Financial Officer and Treasurer

(Principal Financial and Accounting Officer)

October 28, 2021

EX-99.1 2 leco-20211028ex9916b620b.htm EX-99.1

Exhibit 99.1

Investor Relations: Amanda Butler (216) 383-2534

Amanda_Butler@lincolnelectric.com

LINCOLN ELECTRIC REPORTS THIRD QUARTER 2021 RESULTS

Third Quarter 2021 Highlights

Net sales increase 20.6% to record $806.5 million on 18.3% higher organic sales

Operating income margin of 14.3%; Adjusted operating income margin of 15.2%

EPS decreases 45.4% to $0.53; Adjusted EPS increases 41.8% to record $1.56

Cash flow from operations increase 23% to $109.9 million

ROIC increases 440 basis points to 22.8%

Pension plan termination resulted in pre-tax non-cash charges of $73.6 million

CLEVELAND, Thursday, October 28 2021 - Lincoln Electric Holdings, Inc. (the “Company”) (Nasdaq: LECO) today reported third quarter 2021 net income of $31.8 million, or diluted earnings per share (EPS) of $0.53, which includes special item after-tax charges of $62.0 million, or $1.03 EPS. Special item charges primarily relate to the termination of a pension plan. This compares with prior year period net income of $58.5 million, or $0.97 EPS, which included special item after-tax charges of $7.5 million, or $0.13 EPS. Excluding these items, third quarter 2021 adjusted net income was $93.8 million, or $1.56 Adjusted EPS. This compares with Adjusted net income of $66.0 million, or $1.10 Adjusted EPS in the prior year period.

Third quarter 2021 sales increased 20.6% to $806.5 million from an 18.3% increase in organic sales, 2.0% benefit from acquisitions and 0.3% favorable foreign exchange. Operating income for the third quarter 2021 was $115.6 million, or 14.3% of sales, including special item charges of $7.2 million. This compares with operating income of $77.8 million, or 11.6% of sales, in the prior year period. Excluding special items, adjusted operating income was $122.7 million, or 15.2% of sales, as compared with $84.1 million, or 12.6% of sales, in the prior year period.

“I am pleased to report that strong execution of our 2025 Higher Standard Strategy initiatives delivered record third quarter adjusted earnings performance,” said Christopher L. Mapes, Chairman, President and Chief Executive Officer. “We are serving strong demand and are effectively managing inflationary headwinds and supply chain constraints, which generated solid cash flows, cash conversion and superior returns.”

Pension Plan Termination

During the third quarter 2021, the Company recognized $73.6 million of non-cash pension settlement charges associated with lump sum distributions related to the termination of a pension plan.  In October 2021, the Company entered into an agreement to purchase a group annuity contract with an insurance company to settle the remaining pension obligations of this plan.  The Company estimates fourth quarter 2021 pre-tax settlement charges of approximately $35 - $45 million related to the annuity purchase. The Company anticipates using any surplus assets to fund future contributions into another retirement plan.

Nine Months 2021 Summary

Net income for the nine months ended September 30, 2021 was $202.0 million, or $3.36 EPS. This compares with $141.0 million, or $2.34 EPS, in the comparable 2020 period. Reported EPS includes special item after-tax charges of $75.1 million or $1.25 EPS, as compared with special item after-tax net charges of $33.9 million, or $0.57 EPS in the prior year period. Excluding these items, adjusted net income for the nine months ended September 30, 2021 increased 58.4% to $277.1 million, or $4.61 EPS, compared with $174.9 million, or $2.91 EPS, in the comparable 2020 period.

Sales increased 21.8% to $2.4 billion in the nine months ended September 30, 2021 from a 19.4% increase in organic sales, 1.6% favorable foreign exchange and a 0.9% benefit from acquisitions. Operating income for the nine months ended September 30, 2021 was $341.3 million, or 14.3% of sales. This compares with operating income of $198.6 million, or 10.1% of sales, in the comparable 2020 period. Excluding special items, adjusted operating income was $357.1 million, or 14.9% of sales, as compared with $235.5 million, or 12.0% of sales, in the comparable 2020 period.


LINCOLN ELECTRIC REPORTS THIRD QUARTER 2021 RESULTS

Dividend

The Company's Board of Directors declared a 9.8% increase in the quarterly cash dividend, from $0.51 per share to $0.56 per share, or $2.24 per share on an annual basis. The declared quarterly cash dividend of $0.56 per share is payable January 14, 2022 to shareholders of record as of December 31, 2021.

Webcast Information

A conference call to discuss third quarter 2021 financial results will be webcast live today, October 28, 2021, at 10:00 a.m., Eastern Time.  This webcast is accessible at https://ir.lincolnelectric.com. Listeners should go to the web site prior to the call to register, download and install any necessary audio software. A replay of the webcast will be available on the Company's web site.

If investors would like to ask questions, please dial (877) 344-3899 (domestic) or (315) 625-3087 (international) and use confirmation code 8735626. Telephone participants are asked to dial in 10 - 15 minutes prior to the start of the conference call.

Financial results for the third quarter 2021 can also be obtained at https://ir.lincolnelectric.com.

About Lincoln Electric

Lincoln Electric is the world leader in the design, development and manufacture of arc welding products, automated joining, assembly and cutting systems, plasma and oxy-fuel cutting equipment and has a leading global position in brazing and soldering alloys.  Headquartered in Cleveland, Ohio, Lincoln has 55 manufacturing locations in 18 countries and a worldwide network of distributors and sales offices covering more than 160 countries.  For more information about Lincoln Electric and its products and services, visit the Company’s website at https://www.lincolnelectric.com.

Non-GAAP Information

Adjusted operating income, Adjusted net income, Adjusted EBIT, Adjusted effective tax rate, Adjusted diluted earnings per share, Organic sales, Cash conversion, Return on invested capital and Earnings before interest, taxes, depreciation and amortization ("EBITDA") are non-GAAP financial measures. Management uses non-GAAP measures to assess the Company's operating performance by excluding certain disclosed special items that management believes are not representative of the Company's core business. Management believes that excluding these special items enables them to make better period-over-period comparisons and benchmark the Company's operational performance against other companies in its industry more meaningfully. Furthermore, management believes that non-GAAP financial measures provide investors with meaningful information that provides a more complete understanding of Company operating results and enables investors to analyze financial and business trends more thoroughly. Non-GAAP financial measures should not be viewed in isolation, are not a substitute for GAAP measures and have limitations including, but not limited to, their usefulness as comparative measures as other companies may define their non-GAAP measures differently.

Forward-Looking Statements

The Company’s expectations and beliefs concerning the future contained in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements reflect management’s current expectations and involve a number of risks and uncertainties.  Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “guidance” or words of similar meaning.  Actual results may differ materially from such statements due to a variety of factors that could adversely affect the Company’s operating results.  The factors include, but are not limited to: general economic, financial and market conditions; the effectiveness of operating initiatives; completion of planned divestitures; interest rates; disruptions, uncertainty or volatility in the credit markets that may limit our access to capital; currency exchange rates and devaluations; adverse outcome of pending or potential litigation; actual costs of the Company’s rationalization plans; possible acquisitions, including the Company’s ability to successfully integrate acquisitions; market risks and price fluctuations related to the purchase of commodities and energy; global regulatory complexity; the effects of changes in tax law; tariff rates in the countries where the Company conducts business; and the possible effects of events beyond our control, such as political unrest, acts of terror, natural disasters and pandemics, including the current coronavirus disease ("COVID-19") pandemic, on the Company or its customers, suppliers and the economy in general.  For additional discussion, see “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.


Lincoln Electric Holdings, Inc.

Financial Highlights

(In thousands, except per share amounts)

(Unaudited)

Consolidated Statements of Income

    

    

Fav (Unfav) to

 

Three Months Ended September 30, 

Prior Year

 

2021

% of Sales

    

2020

    

% of Sales

$

%

 

Net sales

$

806,454

 

100.0

%

$

668,888

 

100.0

%

$

137,566

20.6

%

Cost of goods sold

538,282

 

66.7

%

453,501

 

67.8

%

 

(84,781)

(18.7)

%

Gross profit

 

268,172

 

33.3

%

 

215,387

 

32.2

%

 

52,785

24.5

%

Selling, general & administrative expenses

 

149,118

 

18.5

%

 

131,337

 

19.6

%

 

(17,781)

(13.5)

%

Rationalization and asset impairment charges

 

3,484

 

0.4

%

 

6,257

 

0.9

%

 

2,773

44.3

%

Operating income

 

115,570

 

14.3

%

 

77,793

 

11.6

%

 

37,777

48.6

%

Interest expense, net

 

5,714

 

0.7

%

 

5,552

 

0.8

%

 

(162)

(2.9)

%

Other income (expense)

 

(71,441)

 

(8.9)

%

 

1,062

 

0.2

%

 

(72,503)

(6,827.0)

%

Income before income taxes

 

38,415

 

4.8

%

 

73,303

 

11.0

%

 

(34,888)

(47.6)

%

Income taxes

 

6,658

 

0.8

%

 

14,797

 

2.2

%

 

8,139

55.0

%

Effective tax rate

 

17.3

%

 

20.2

%

  

 

2.9

%

  

Net income including non-controlling interests

 

31,757

 

3.9

%

 

58,506

 

8.7

%

 

(26,749)

(45.7)

%

Non-controlling interests in subsidiaries’ income (loss)

 

 

 

27

 

 

(27)

(100.0)

%

Net income

$

31,757

 

3.9

%

$

58,479

 

8.7

%

$

(26,722)

(45.7)

%

Basic earnings per share

$

0.54

$

0.98

 

$

(0.44)

(44.9)

%

Diluted earnings per share

$

0.53

$

0.97

 

$

(0.44)

(45.4)

%

Weighted average shares (basic)

 

59,289

 

 

59,426

 

  

 

  

  

Weighted average shares (diluted)

 

60,055

 

 

60,018

 

  

 

  

    

    

Fav (Unfav) to

 

Nine Months Ended September 30, 

Prior Year

 

 

2021

% of Sales

    

2020

% of Sales

    

$

%

 

Net sales

$

2,389,929

 

100.0

$

1,961,606

 

100.0

$

428,323

21.8

Cost of goods sold

 

1,593,981

 

66.7

1,319,519

 

67.3

 

(274,462)

(20.8)

Gross profit

 

795,948

 

33.3

642,087

 

32.7

 

153,861

24.0

Selling, general & administrative expenses

 

446,351

 

18.7

407,440

 

20.8

 

(38,911)

(9.6)

Rationalization and asset impairment charges

 

8,277

 

0.3

36,016

 

1.8

 

27,739

77.0

Operating income

 

341,320

 

14.3

198,631

 

10.1

 

142,689

71.8

Interest expense, net

 

16,736

 

0.7

16,891

 

0.9

 

155

0.9

Other income (expense)

 

(71,155)

 

(3.0)

1,168

 

0.1

 

(72,323)

(6,192.0)

Income before income taxes

 

253,429

 

10.6

182,908

 

9.3

 

70,521

38.6

Income taxes

 

51,259

 

2.1

41,834

 

2.1

 

(9,425)

(22.5)

Effective tax rate

 

20.2

%

22.9

%

  

 

2.7

%

  

Net income including non-controlling interests

 

202,170

 

8.5

141,074

 

7.2

 

61,096

43.3

Non-controlling interests in subsidiaries’ income (loss)

 

131

 

 

37

 

 

94

254.1

Net income

$

202,039

 

8.5

$

141,037

 

7.2

$

61,002

43.3

Basic earnings per share

$

3.40

 

$

2.36

 

$

1.04

44.1

Diluted earnings per share

$

3.36

 

$

2.34

 

$

1.02

43.6

Weighted average shares (basic)

 

59,465

 

59,655

 

  

 

  

  

Weighted average shares (diluted)

 

60,168

 

60,202

 

  

 

  

  


Lincoln Electric Holdings, Inc.

Financial Highlights

(In thousands)

(Unaudited)

Balance Sheet Highlights

Selected Consolidated Balance Sheet Data

    

September 30, 2021

    

December 31, 2020

 

Cash and cash equivalents

$

160,559

$

257,279

Accounts receivable, net

443,054

373,487

Inventories

 

524,433

 

381,258

Total current assets

 

1,235,958

 

1,112,343

Property, plant and equipment, net

 

520,081

 

522,092

Total assets

 

2,568,797

 

2,314,453

Trade accounts payable

 

309,202

 

256,530

Total current liabilities

 

745,420

 

549,449

Short-term debt (1)

 

41,404

 

2,734

Long-term debt, less current portion

 

717,787

 

715,456

Total equity

 

857,893

 

790,250

Operating Working Capital

September 30, 2021

December 31, 2020

Average operating working capital to Net sales (2)

 

18.6

%  

 

17.4

%

Invested Capital

September 30, 2021

December 31, 2020

Short-term debt (1)

$

41,404

$

2,734

Long-term debt, less current portion

 

717,787

 

715,456

Total debt

 

759,191

 

718,190

Total equity

 

857,893

 

790,250

Invested capital

$

1,617,084

$

1,508,440

Total debt / invested capital

 

46.9

%  

 

47.6

%

(1)

Includes current portion of long-term debt.

(2)

Average operating working capital to Net sales is defined as the sum of Accounts receivable, Inventories and contract assets less Trade accounts payable and contract liabilities as of period end divided by annualized rolling three months of Net sales.


Lincoln Electric Holdings, Inc.

Financial Highlights

(In thousands, except per share amounts)

(Unaudited)

 Non-GAAP Financial Measures

  

Three Months Ended September 30, 

 

Nine Months Ended September 30, 

 

2021

2020

2021

2020

 

Operating income as reported

$

115,570

$

77,793

 

$

341,320

$

198,631

Special items (pre-tax):

 

  

 

  

 

  

 

  

Rationalization and asset impairment charges (2)

 

3,484

 

6,257

 

8,277

 

36,016

Acquisition transaction costs (3)

 

 

 

1,923

 

Amortization of step up in value of acquired inventories (4)

 

3,690

 

 

5,531

 

806

Adjusted operating income (1)

$

122,744

$

84,050

 

$

357,051

$

235,453

As a percent of total sales

 

15.2

%

 

12.6

%

14.9

%

 

12.0

%

Net income as reported

$

31,757

$

58,479

 

$

202,039

$

141,037

Special items:

 

  

 

  

 

  

 

  

Rationalization and asset impairment charges (2)

 

3,484

 

6,257

 

8,277

 

36,016

Acquisition transaction costs (3)

 

 

 

1,923

 

Pension settlement charges (5)

 

73,562

 

3,188

 

80,098

 

6,522

Amortization of step up in value of acquired inventories (4)

 

3,690

 

 

5,531

 

806

Tax effect of Special items (6)

 

(18,743)

 

(1,911)

 

(20,737)

 

(9,463)

Adjusted net income (1)

 

93,750

 

66,013

 

277,131

 

174,918

Non-controlling interests in subsidiaries’ income (loss)

 

 

27

 

131

 

37

Interest expense, net

 

5,714

 

5,552

 

16,736

 

16,891

Income taxes as reported

 

6,658

 

14,797

 

51,259

 

41,834

Tax effect of Special items (6)

 

18,743

 

1,911

 

20,737

 

9,463

Adjusted EBIT (1)

$

124,865

$

88,300

 

$

365,994

$

243,143

Effective tax rate as reported

 

17.3

%

 

20.2

%

20.2

%

 

22.9

%

Net special item tax impact

 

4.0

%

 

%

0.4

%

 

(0.2)

%

Adjusted effective tax rate (1)

 

21.3

%

 

20.2

%

20.6

%

 

22.7

%

Diluted earnings per share as reported

$

0.53

$

0.97

 

$

3.36

$

2.34

Special items per share

 

1.03

 

0.13

 

1.25

 

0.57

Adjusted diluted earnings per share (1)

$

1.56

$

1.10

 

$

4.61

$

2.91

Weighted average shares (diluted)

 

60,055

 

60,018

 

60,168

 

60,202

(1)

Adjusted operating income, Adjusted net income, Adjusted EBIT, Adjusted effective tax rate and Adjusted diluted earnings per share are non-GAAP financial measures. Refer to Non-GAAP Information section.

(2)

Primarily related to severance, gains or losses on the disposal of assets and asset impairments of long-lived assets.

(3)

Related to acquisitions and are included in Selling, general & administrative expenses.

(4)

Related to acquisitions and are included in Cost of goods sold.

(5)

Settlement charges related to lump sum pension payments associated with the termination of a pension plan and are included in Other income (expense).

(6)

Includes the net tax impact of Special items recorded during the respective periods.

The tax effect of Special items impacting pre-tax income was calculated as the pre-tax amount multiplied by the applicable tax rate. The applicable tax rates reflect the taxable jurisdiction and nature of each Special item.


Lincoln Electric Holdings, Inc.

Financial Highlights

(In thousands, except per share amounts)

(Unaudited)

Non-GAAP Financial Measures

    

Twelve Months Ended September 30, 

 

Return on Invested Capital

    

2021

    

2020

Net income as reported

$

267,117

$

204,753

Rationalization and asset impairment charges

 

17,729

 

44,867

Acquisition transaction costs

 

1,923

 

Pension settlement charges

 

81,695

 

6,522

Amortization of step up in value of acquired inventories

 

5,531

 

806

Tax effect of Special items (2)

 

(21,868)

 

(11,030)

Adjusted net income (1)

$

352,127

$

245,918

Plus: Interest expense, net of tax of $5,893 and $6,177 in 2021 and 2020, respectively

 

17,520

 

18,564

Less: Interest income, net of tax of $402 and $513 in 2021 and 2020, respectively

 

1,193

 

1,543

Adjusted net income before tax-effected interest

$

368,454

$

262,939

Invested Capital

September 30, 2021

September 30, 2020

Short-term debt

$

41,404

$

1,147

Long-term debt, less current portion

 

717,787

 

715,687

Total debt

 

759,191

 

716,834

Total equity

 

857,893

 

710,744

Invested capital

$

1,617,084

$

1,427,578

Return on invested capital (1)

 

22.8

%  

 

18.4

%

    

Twelve Months Ended September 30, 

Total Debt / EBITDA

2021

2020

Net income as reported

$

267,117

$

204,753

Income taxes

      

67,321

      

58,412

Interest expense, net

 

21,818

 

22,685

Depreciation and amortization

 

80,484

 

81,653

EBITDA (1)

$

436,740

$

367,503

September 30, 2021

September 30, 2020

Total debt

$

759,191

$

716,834

Total debt / EBITDA

 

1.74

 

1.95

(1)Adjusted net income, Return on invested capital and EBITDA are non-GAAP financial measures. Refer to Non-GAAP Information section.
(2)Includes the net tax impact of Special items recorded during the respective periods.

The tax effect of Special items impacting pre-tax income was calculated as the pre-tax amount multiplied by the applicable tax rate. The applicable tax rates reflect the taxable jurisdiction and nature of each Special item.


Lincoln Electric Holdings, Inc.

Financial Highlights

(In thousands, except per share amounts)

(Unaudited)

Condensed Consolidated Statements of Cash Flows

Three Months Ended September 30, 

2021

2020

OPERATING ACTIVITIES:

  

 

  

Net income

$

31,757

$

58,479

Non-controlling interests in subsidiaries’ income (loss)

 

 

27

Net income including non-controlling interests

 

31,757

 

58,506

Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities:

 

  

 

  

Rationalization and asset impairment net charges

 

212

 

22

Depreciation and amortization

 

22,050

 

19,488

Equity earnings in affiliates, net

 

(108)

 

(80)

Pension settlement charges

73,562

3,188

Other non-cash items, net

 

389

 

(670)

Changes in operating assets and liabilities, net of effects from acquisitions:

 

  

 

  

Decrease (increase) in accounts receivable

 

16,359

 

(30,517)

(Increase) decrease in inventories

 

(45,670)

 

26,948

Decrease in trade accounts payable

 

(8,294)

 

(2,218)

Net change in other current assets and liabilities

 

31,838

 

14,232

Net change in other long-term assets and liabilities

 

(12,204)

 

649

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

109,891

 

89,548

INVESTING ACTIVITIES:

 

  

 

  

Capital expenditures

 

(18,672)

 

(12,105)

Acquisition of businesses, net of cash acquired

 

(74,882)

 

Proceeds from sale of property, plant and equipment

1,290

739

NET CASH USED BY INVESTING ACTIVITIES

 

(92,264)

 

(11,366)

FINANCING ACTIVITIES:

 

  

 

  

Net change in borrowings

 

31,132

 

(48,230)

Proceeds from exercise of stock options

 

2,249

 

5,959

Purchase of shares for treasury

 

(50,160)

 

(223)

Cash dividends paid to shareholders

 

(30,338)

 

(29,131)

NET CASH USED BY FINANCING ACTIVITIES

 

(47,117)

 

(71,625)

Effect of exchange rate changes on Cash and cash equivalents

 

(835)

 

2,867

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

 

(30,325)

 

9,424

Cash and cash equivalents at beginning of period

 

190,884

 

143,055

Cash and cash equivalents at end of period

$

160,559

$

152,479

Cash dividends paid per share

$

0.51

$

0.49


Lincoln Electric Holdings, Inc.

Financial Highlights

(In thousands, except per share amounts)

(Unaudited)

    

Nine Months Ended September 30, 

2021

2020

OPERATING ACTIVITIES:

 

  

 

  

Net income

$

202,039

$

141,037

Non-controlling interests in subsidiaries’ income (loss)

 

131

 

37

Net income including non-controlling interests

 

202,170

 

141,074

Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities:

 

  

 

  

Rationalization and asset impairment net (gains) charges

 

(1,162)

 

21,927

Depreciation and amortization

 

60,558

 

60,566

Equity earnings in affiliates, net

 

(399)

 

(323)

Pension settlement charges

80,098

6,522

Other non-cash items, net

 

(10,967)

 

(9,292)

Changes in operating assets and liabilities, net of effects from acquisitions:

 

  

 

  

Increase in accounts receivable

 

(71,212)

 

(6,851)

Increase in inventories

 

(128,856)

 

(3,430)

Increase (decrease) in trade accounts payable

 

54,981

 

(42,333)

Net change in other current assets and liabilities

 

78,959

 

46,642

Net change in other long-term assets and liabilities

 

(9,045)

 

1,059

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

255,125

 

215,561

INVESTING ACTIVITIES:

 

  

 

  

Capital expenditures

 

(46,440)

 

(37,116)

Acquisition of businesses, net of cash acquired

 

(158,605)

 

Proceeds from sale of property, plant and equipment

 

3,847

 

6,957

Other investing activities

 

6,500

 

NET CASH USED BY INVESTING ACTIVITIES

 

(194,698)

 

(30,159)

FINANCING ACTIVITIES:

 

  

 

  

Net change in borrowings

 

32,295

 

(33,135)

Proceeds from exercise of stock options

 

7,921

 

7,961

Purchase of shares for treasury

 

(103,848)

 

(113,198)

Cash dividends paid to shareholders

 

(91,717)

 

(88,945)

Other financing activities

(763)

NET CASH USED BY FINANCING ACTIVITIES

 

(156,112)

 

(227,317)

Effect of exchange rate changes on Cash and cash equivalents

 

(1,035)

 

(5,169)

DECREASE IN CASH AND CASH EQUIVALENTS

 

(96,720)

 

(47,084)

Cash and cash equivalents at beginning of period

 

257,279

 

199,563

Cash and cash equivalents at end of period

$

160,559

$

152,479

Cash dividends paid per share

$

1.53

$

1.47


Lincoln Electric Holdings, Inc.

Segment Highlights

(In thousands)

(Unaudited)

    

Americas

    

International 

    

The Harris

    

Corporate /

    

 

Welding

Welding

Products Group

Eliminations

Consolidated

 

Three months ended September 30, 2021

 

  

 

  

 

  

 

  

 

  

Net sales

$

461,508

$

227,165

$

117,781

$

$

806,454

Inter-segment sales

 

37,480

 

7,078

 

1,945

 

(46,503)

 

Total sales

$

498,988

$

234,243

$

119,726

$

(46,503)

$

806,454

Net income

  

  

  

$

31,757

As a percent of total sales

 

 

  

 

  

 

  

 

3.9

%

EBIT (1)

$

10,983

$

22,417

$

15,433

$

(4,704)

$

44,129

As a percent of total sales

 

2.2

%  

 

9.6

%  

 

12.9

%  

 

 

5.5

%

Special items charges (gains) (3)

 

73,574

 

6,615

 

547

 

 

80,736

Adjusted EBIT (2)

$

84,557

$

29,032

$

15,980

$

(4,704)

$

124,865

As a percent of total sales

 

16.9

%  

 

12.4

%  

 

13.3

%  

 

 

15.5

%

Three months ended September 30, 2020

 

  

 

  

 

  

 

  

 

  

Net sales

$

371,535

$

196,937

$

100,416

$

$

668,888

Inter-segment sales

 

29,368

 

4,898

 

1,898

 

(36,164)

 

Total sales

$

400,903

$

201,835

$

102,314

$

(36,164)

$

668,888

Net income

  

  

  

$

58,479

As a percent of total sales

 

 

  

 

  

 

  

 

8.7

%

EBIT (1)

$

52,076

$

11,031

$

17,587

$

(1,839)

$

78,855

As a percent of total sales

 

13.0

%  

 

5.5

%  

 

17.2

%  

 

 

11.8

%

Special items charges (gains) (4)

 

7,044

 

2,401

 

 

 

9,445

Adjusted EBIT (2)

$

59,120

$

13,432

$

17,587

$

(1,839)

$

88,300

As a percent of total sales

 

14.7

%  

 

6.7

%  

 

17.2

%  

 

 

13.2

%

(1)

EBIT is defined as Operating income plus Other income (expense).

(2)

The primary profit measure used by management to assess segment performance is Adjusted EBIT.  EBIT for each operating segment is adjusted for special items to derive Adjusted EBIT.

(3)

Special items in 2021 reflect Rationalization and asset impairment charges of $3,484 primarily in International Welding, pension settlement charges of $73,562 in Americas Welding and amortization of the step up in value of acquired inventories of $3,143 and $547 in International Welding and The Harris Products Group, respectively, related to acquisitions.

(4)

Special items in 2020 reflect Rationalization and asset impairment charges of $3,856 and $2,401 in Americas Welding and International Welding, respectively, and pension settlement charges of $3,188 in Americas Welding.


Lincoln Electric Holdings, Inc.

Segment Highlights

(In thousands)

(Unaudited)

    

Americas

    

International

    

The Harris

    

Corporate /

    

 

Welding

Welding

Products Group

Eliminations

Consolidated

 

Nine months ended September 30, 2021

 

  

 

  

 

  

 

  

 

  

Net sales

$

1,344,218

$

702,596

$

343,115

$

$

2,389,929

Inter-segment sales

 

109,993

 

18,260

 

6,376

 

(134,629)

 

Total sales

$

1,454,211

$

720,856

$

349,491

$

(134,629)

$

2,389,929

Net income

 

  

 

  

 

  

$

202,039

As a percent of total sales

 

 

  

 

  

 

  

 

8.5

%

EBIT (1)

$

165,644

$

64,150

$

52,342

$

(11,971)

$

270,165

As a percent of total sales

 

11.4

%  

 

8.9

%  

 

15.0

%  

 

 

11.3

%

Special items charges (gains) (3)

 

79,664

 

13,695

 

547

 

1,923

 

95,829

Adjusted EBIT (2)

$

245,308

$

77,845

$

52,889

$

(10,048)

$

365,994

As a percent of total sales

 

16.9

%  

 

10.8

%  

 

15.1

%  

 

 

15.3

%

Nine months ended September 30, 2020

 

  

 

  

 

  

 

  

 

  

Net sales

$

1,123,299

$

572,027

$

266,280

$

$

1,961,606

Inter-segment sales

 

81,644

 

13,667

 

5,376

 

(100,687)

 

Total sales

$

1,204,943

$

585,694

$

271,656

$

(100,687)

$

1,961,606

Net income

 

  

 

  

 

  

$

141,037

As a percent of total sales

 

 

  

 

  

 

  

 

7.2

%

EBIT (1)

$

142,283

$

20,626

$

41,792

$

(4,902)

$

199,799

As a percent of total sales

 

11.8

%  

 

3.5

%  

 

15.4

%  

 

 

10.2

%

Special items charges (gains) (4)

 

34,241

 

9,103

 

 

 

43,344

Adjusted EBIT (2)

$

176,524

$

29,729

$

41,792

$

(4,902)

$

243,143

As a percent of total sales

 

14.6

%  

 

5.1

%  

 

15.4

%  

 

 

12.4

%

(1)

EBIT is defined as Operating income plus Other income (expense).

(2)

The primary profit measure used by management to assess segment performance is Adjusted EBIT.  EBIT for each operating segment is adjusted for special items to derive Adjusted EBIT.

(3)

Special items in 2021 reflect pension settlement charges of $79,652 and $446 in Americas Welding and International Welding, respectively, Rationalization and asset impairment charges of $8,277 primarily in International Welding, amortization of the step up in value of acquired inventories of $4,984 and $547 in International Welding and The Harris Products Group, respectively, and acquisition transaction costs of $1,923 in Corporate/Eliminations related to acquisitions.

(4)

Special items in 2020 reflect Rationalization and asset impairment charges of $27,719 and $8,297 in Americas Welding and International Welding, respectively, amortization of the step up in value of acquired inventories of $806 in International Welding related to an acquisition, and pension settlement charges of $6,522 in Americas Welding.


Lincoln Electric Holdings, Inc.

Change in Net Sales by Segment

(In thousands)

(Unaudited)

Three Months Ended September 30th Change in Net Sales by Segment

    

Change in Net Sales due to:

    

    

 

Net Sales

Foreign

Net Sales

 

2020

Volume

Acquisitions

Price

Exchange

2021

 

Operating Segments

  

 

  

 

  

 

  

 

  

 

  

Americas Welding

$

371,535

$

42,341

 

$

 

$

43,957

 

$

3,675

$

461,508

International Welding

196,937

 

7,452

 

3,371

 

21,205

 

(1,800)

 

227,165

The Harris Products Group

100,416

 

(1,287)

 

9,880

 

8,609

 

163

 

117,781

Consolidated

$

668,888

$

48,506

 

$

13,251

 

$

73,771

 

$

2,038

$

806,454

% Change

  

 

  

 

  

 

  

 

  

 

  

Americas Welding

 

11.4

%

11.8

%

1.0

%

 

24.2

%

International Welding

 

3.8

%

1.7

%

10.8

%

(0.9)

%

 

15.3

%

The Harris Products Group

 

(1.3)

%

9.8

%

8.6

%

0.2

%

 

17.3

%

Consolidated

 

7.3

%

2.0

%

11.0

%

0.3

%

 

20.6

%

Nine Months Ended September 30th Change in Net Sales by Segment

    

    

Change in Net Sales due to:

    

    

 

Net Sales

Foreign

Net Sales

 

2020

Volume

Acquisitions

Price

Exchange

2021

 

Operating Segments

 

  

 

  

 

  

 

  

 

  

 

  

Americas Welding

 

$

1,123,299

 

$

128,836

$

$

80,352

$

11,731

 

$

1,344,218

International Welding

 

572,027

 

63,797

6,956

40,537

19,279

 

702,596

The Harris Products Group

 

266,280

 

28,775

9,880

38,031

149

 

343,115

Consolidated

 

$

1,961,606

 

$

221,408

 

$

16,836

 

$

158,920

 

$

31,159

 

$

2,389,929

% Change

 

  

 

  

 

  

 

  

 

  

 

  

Americas Welding

 

11.5

%

7.2

%

1.0

%

19.7

%

International Welding

 

 

11.2

%

1.2

%

7.1

%

3.4

%

22.8

%

The Harris Products Group

 

10.8

%

3.7

%

14.3

%

0.1

%

28.9

%

Consolidated

 

 

11.3

%

0.9

%

8.1

%

1.6

%

21.8

%


EX-101.SCH 3 leco-20211028.xsd EX-101.SCH 00090 - Document - Document and Entity Information link:presentationLink link:calculationLink link:definitionLink EX-101.LAB 4 leco-20211028_lab.xml EX-101.LAB EX-101.PRE 5 leco-20211028_pre.xml EX-101.PRE XML 6 leco-20211028x8k_htm.xml IDEA: XBRL DOCUMENT 0000059527 2021-10-28 2021-10-28 0000059527 false 8-K 2021-10-28 LINCOLN ELECTRIC HOLDINGS, INC 0-1402 OH 34-1860551 22801 St. Clair Avenue Cleveland OH 44117 216 481-8100 false false false false Common Shares, without par value LECO NASDAQ false XML 7 R1.htm IDEA: XBRL DOCUMENT v3.21.2
Document and Entity Information
Oct. 28, 2021
Document and Entity Information  
Document Type 8-K
Document Period End Date Oct. 28, 2021
Entity File Number 0-1402
Entity Registrant Name LINCOLN ELECTRIC HOLDINGS, INC
Entity Incorporation, State or Country Code OH
Entity Tax Identification Number 34-1860551
Entity Address, Address Line One 22801 St. Clair Avenue
Entity Address, State or Province OH
Entity Address, City or Town Cleveland
Entity Address, Postal Zip Code 44117
City Area Code 216
Local Phone Number 481-8100
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Shares, without par value
Trading Symbol LECO
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0000059527
Amendment Flag false
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