Lincoln Electric Holdings, Inc. (the “Company”) (Nasdaq: LECO)
today reported second quarter 2019 net income of $85.5 million, or
diluted earnings per share (EPS) of $1.36, which includes special
item after-tax net benefits of $4.6 million, or $0.08 EPS. This
compares with prior year net income of $68.9 million, or $1.04 EPS,
which included special item after-tax charges of $11.5 million, or
$0.18 EPS. Excluding these items, second quarter 2019 adjusted net
income was $80.9 million, or $1.28 EPS, as compared with $80.4
million, or $1.22 EPS in the prior year period. The effective tax
rate was 17.4% in the second quarter 2019 as compared with 27.0% in
the prior year period. Excluding special items, the adjusted
effective tax rate was 22.0%, which compares to 24.6% in the
comparable 2018 period.
Second quarter 2019 sales decreased 1.7% to $777.0 million from
a 3.5% decrease in organic sales and 1.7% unfavorable foreign
exchange, partially offset by a 3.4% benefit from acquisitions.
Operating income for the second quarter 2019 was $105.2 million, or
13.5% of sales. This compares with operating income of $94.6
million, or 12.0% of sales, in the prior year period. On an
adjusted basis, operating income was $105.9 million, or 13.6% of
sales, as compared with $107.0 million, or 13.5% of sales, in the
prior year period.
"We maintained strong margin performance and improved cash
generation, cash conversion and returns in a slowing economic
environment,” stated Christopher L. Mapes, Chairman, President and
Chief Executive Officer. “As we navigate through the cycle, we are
focused on the successful execution of our growth initiatives,
achieving operational excellence and maintaining diligent cost
controls to mitigate the impact of moderating growth."
Six Months 2019 Summary
Net income for the six months ended June 30,
2019 was $156.9 million, or $2.47 EPS. This compares
with $129.7 million, or $1.96 EPS, in the
comparable 2018 period. Reported EPS includes special
item after-tax net benefits of $1.1 million or $0.01 EPS, as
compared with special item after-tax charges of $24.0 million, or
$0.36 EPS in the prior year period. Excluding these items, adjusted
net income for the six months ended June 30,
2019 increased 1.4% to $155.9 million, or $2.46 EPS,
compared with $153.7 million, or $2.32 EPS, in the
comparable 2018 period. The effective tax rate was 20.1%
for the six months ended June 30, 2019 as compared with 27.3% in
the prior year period. Excluding special items, the adjusted
effective tax rate was 22.4%, which compares to 24.5% in the
comparable 2018 period.
Sales decreased 0.7% to $1.5 billion in the six
months ended June 30, 2019 from a 1.3% decrease in organic
sales, 2.4% unfavorable foreign exchange, partially offset by a
3.0% benefit from acquisitions. Operating income for the six
months ended June 30, 2019 was $199.7 million,
or 13.0% of sales. This compares with operating income
of $179.8 million, or 11.6% of sales, in the
comparable 2018 period. On an adjusted basis, operating
income was $204.7 million, or 13.3% of sales, as compared
with $204.2 million, or 13.2% of sales, in the
comparable 2018 period.
Webcast Information
A conference call to discuss second quarter 2019 financial
results will be webcast live today, July 23, 2019, 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.
Investors who are unable to access the webcast may listen to the
conference call live by telephone by dialing (877) 344-3899
(domestic) or (315) 625-3087 (international) and use confirmation
code 3041829. Telephone participants are asked to dial in 10 - 15
minutes prior to the start of the conference call.
Financial results for the second quarter 2019 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, robotic arc welding
systems, plasma and oxy-fuel cutting equipment and has a leading
global position in the brazing and soldering alloys market.
Headquartered in Cleveland, Ohio, Lincoln has 60 manufacturing
locations, including operations and joint ventures in 19 countries
and a worldwide network of distributors and sales offices covering
more than 160 countries. For more information about Lincoln
Electric and its products and services, visit the Company’s website
at 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 and Return on invested capital are non-GAAP financial
measures. Management uses non-GAAP measures to assess the Company's
operating performance by excluding certain disclosed special items
that management believes are not representative of the Company's
core business. Management believes that excluding these special
items enables them to make better period-over-period comparisons
and benchmark the Company's operational performance against other
companies in its industry more meaningfully. Furthermore,
management 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 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 and natural disasters, on the
Company or its customers, suppliers and the economy in general. For
additional discussion, see “Item 1A. Risk Factors” in the Company’s
Annual Report on Form 10-K for the year ended December 31,
2018.
Contact
Amanda ButlerVice President, Investor Relations &
CommunicationsTel: 216.383.2534Email:
Amanda_Butler@lincolnelectric.com
Lincoln Electric
Holdings, Inc.Financial
Highlights(In thousands, except per share
amounts)(Unaudited)
Consolidated Statements of
Income
| |
|
Three Months Ended June 30, |
|
Fav (Unfav) to Prior Year |
| |
|
2019 |
|
% of Sales |
|
2018 |
|
% of Sales |
|
$ |
|
|
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
777,008 |
|
|
100.0 |
% |
|
$ |
790,052 |
|
|
100.0 |
% |
|
$ |
(13,044 |
) |
|
(1.7 |
%) |
| Cost of goods sold |
|
507,127 |
|
|
65.3 |
% |
|
519,936 |
|
|
65.8 |
% |
|
12,809 |
|
|
2.5 |
% |
| Gross profit |
|
269,881 |
|
|
34.7 |
% |
|
270,116 |
|
|
34.2 |
% |
|
(235 |
) |
|
(0.1 |
%) |
| Selling, general &
administrative expenses |
|
163,388 |
|
|
21.0 |
% |
|
163,940 |
|
|
20.8 |
% |
|
552 |
|
|
0.3 |
% |
|
Rationalization and asset impairment charges |
|
1,307 |
|
|
0.2 |
% |
|
11,542 |
|
|
1.5 |
% |
|
10,235 |
|
|
88.7 |
% |
| Operating income |
|
105,186 |
|
|
13.5 |
% |
|
94,634 |
|
|
12.0 |
% |
|
10,552 |
|
|
11.2 |
% |
| Interest expense, net |
|
5,898 |
|
|
0.8 |
% |
|
4,812 |
|
|
0.6 |
% |
|
(1,086 |
) |
|
(22.6 |
%) |
| Other income (expense) |
|
4,196 |
|
|
0.5 |
% |
|
4,441 |
|
|
0.6 |
% |
|
(245 |
) |
|
(5.5 |
%) |
| Income before income
taxes |
|
103,484 |
|
|
13.3 |
% |
|
94,263 |
|
|
11.9 |
% |
|
9,221 |
|
|
9.8 |
% |
| Income taxes |
|
18,040 |
|
|
2.3 |
% |
|
25,404 |
|
|
3.2 |
% |
|
7,364 |
|
|
29.0 |
% |
| Effective tax rate |
|
17.4 |
% |
|
|
|
27.0 |
% |
|
|
|
9.6 |
% |
|
|
| Net income including
non-controlling interests |
|
85,444 |
|
|
11.0 |
% |
|
68,859 |
|
|
8.7 |
% |
|
16,585 |
|
|
24.1 |
% |
| Non-controlling interests in
subsidiaries’ loss |
|
(8 |
) |
|
— |
|
|
(5 |
) |
|
— |
|
|
(3 |
) |
|
(60.0 |
%) |
| Net income |
|
$ |
85,452 |
|
|
11.0 |
% |
|
$ |
68,864 |
|
|
8.7 |
% |
|
$ |
16,588 |
|
|
24.1 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Basic earnings per share |
|
$ |
1.37 |
|
|
|
|
$ |
1.05 |
|
|
|
|
$ |
0.32 |
|
|
30.5 |
% |
| Diluted earnings per
share |
|
$ |
1.36 |
|
|
|
|
$ |
1.04 |
|
|
|
|
$ |
0.32 |
|
|
30.8 |
% |
| Weighted average shares
(basic) |
|
62,305 |
|
|
|
|
65,337 |
|
|
|
|
|
|
|
| Weighted average shares
(diluted) |
|
62,970 |
|
|
|
|
66,121 |
|
|
|
|
|
|
|
| |
|
Six Months Ended June 30, |
|
Fav (Unfav) toPrior
Year |
| |
|
2019 |
|
% of Sales |
|
2018 |
|
% of Sales |
|
$ |
|
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net sales |
|
$ |
1,536,182 |
|
|
100.0 |
% |
|
$ |
1,547,748 |
|
|
100.0 |
% |
|
$ |
(11,566 |
) |
|
(0.7 |
%) |
| Cost of goods sold |
|
|
1,007,880 |
|
|
65.6 |
% |
|
|
1,021,078 |
|
|
66.0 |
% |
|
|
13,198 |
|
|
1.3 |
% |
| Gross profit |
|
528,302 |
|
|
34.4 |
% |
|
526,670 |
|
|
34.0 |
% |
|
1,632 |
|
|
0.3 |
% |
| Selling, general &
administrative expenses |
|
323,796 |
|
|
21.1 |
% |
|
325,131 |
|
|
21.0 |
% |
|
1,335 |
|
|
0.4 |
% |
|
Rationalization and asset impairment charges |
|
4,842 |
|
|
0.3 |
% |
|
21,717 |
|
|
1.4 |
% |
|
16,875 |
|
|
77.7 |
% |
| Operating income |
|
199,664 |
|
|
13.0 |
% |
|
179,822 |
|
|
11.6 |
% |
|
19,842 |
|
|
11.0 |
% |
| Interest expense, net |
|
11,221 |
|
|
0.7 |
% |
|
9,253 |
|
|
0.6 |
% |
|
(1,968 |
) |
|
(21.3 |
%) |
| Other income (expense) |
|
7,959 |
|
|
0.5 |
% |
|
7,892 |
|
|
0.5 |
% |
|
67 |
|
|
0.8 |
% |
| Income before income
taxes |
|
196,402 |
|
|
12.8 |
% |
|
178,461 |
|
|
11.5 |
% |
|
17,941 |
|
|
10.1 |
% |
| Income taxes |
|
39,492 |
|
|
2.6 |
% |
|
48,782 |
|
|
3.2 |
% |
|
9,290 |
|
|
19.0 |
% |
| Effective tax rate |
|
20.1 |
% |
|
|
|
27.3 |
% |
|
|
|
7.2 |
% |
|
|
| Net income including
non-controlling interests |
|
156,910 |
|
|
10.2 |
% |
|
129,679 |
|
|
8.4 |
% |
|
27,231 |
|
|
21.0 |
% |
| Non-controlling interests in
subsidiaries’ loss |
|
(22 |
) |
|
— |
|
|
(9 |
) |
|
— |
|
|
(13 |
) |
|
(144.4 |
%) |
| Net income |
|
$ |
156,932 |
|
|
10.2 |
% |
|
$ |
129,688 |
|
|
8.4 |
% |
|
$ |
27,244 |
|
|
21.0 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Basic earnings per share |
|
$ |
2.50 |
|
|
|
|
$ |
1.98 |
|
|
|
|
$ |
0.52 |
|
|
26.3 |
% |
| Diluted earnings per
share |
|
$ |
2.47 |
|
|
|
|
$ |
1.96 |
|
|
|
|
$ |
0.51 |
|
|
26.0 |
% |
| Weighted average shares
(basic) |
|
62,733 |
|
|
|
|
65,458 |
|
|
|
|
|
|
|
| Weighted average shares
(diluted) |
|
63,419 |
|
|
|
|
66,257 |
|
|
|
|
|
|
|
Lincoln Electric
Holdings, Inc.Financial
Highlights(In
thousands)(Unaudited)
Balance Sheet Highlights
|
Selected Consolidated Balance Sheet Data |
|
June 30, 2019 |
|
December 31, 2018 |
|
Cash and cash equivalents |
|
$ |
189,861 |
|
|
$ |
358,849 |
|
| Total current assets |
|
1,127,863 |
|
|
1,237,799 |
|
| Property, plant and equipment,
net |
|
512,364 |
|
|
478,801 |
|
| Total assets |
|
2,394,333 |
|
|
2,349,825 |
|
| Total current liabilities |
|
571,011 |
|
|
538,182 |
|
| Short-term debt (1) |
|
30,110 |
|
|
111 |
|
| Long-term debt, less current
portion |
|
710,458 |
|
|
702,549 |
|
| Total equity |
|
846,058 |
|
|
887,592 |
|
| |
|
|
|
|
| Operating Working
Capital |
|
June 30, 2019 |
|
December 31, 2018 |
| Accounts receivable, net |
|
$ |
428,353 |
|
|
$ |
396,885 |
|
| Inventories |
|
397,752 |
|
|
361,829 |
|
| Trade accounts payable |
|
254,814 |
|
|
268,600 |
|
| Operating working capital |
|
$ |
571,291 |
|
|
$ |
490,114 |
|
| |
|
|
|
|
| Average operating working
capital to Net sales (2) |
|
18.4 |
% |
|
16.5 |
% |
| |
|
|
|
|
| Invested
Capital |
|
June 30, 2019 |
|
December 31, 2018 |
| Short-term debt (1) |
|
$ |
30,110 |
|
|
$ |
111 |
|
| Long-term debt, less current
portion |
|
710,458 |
|
|
702,549 |
|
| Total debt |
|
740,568 |
|
|
702,660 |
|
| Total equity |
|
846,058 |
|
|
887,592 |
|
| Invested capital |
|
$ |
1,586,626 |
|
|
$ |
1,590,252 |
|
| |
|
|
|
|
| Total debt / invested
capital |
|
46.7 |
% |
|
44.2 |
% |
- Includes current portion of long-term debt.
- Average operating working capital to Net sales is defined as
operating working capital 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 June 30, |
|
Six Months Ended June 30, |
| |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
Operating income as reported |
|
$ |
105,186 |
|
|
$ |
94,634 |
|
|
$ |
199,664 |
|
|
$ |
179,822 |
|
|
Special items (pre-tax): |
|
|
|
|
|
|
|
|
|
Rationalization and asset impairment charges (2) |
|
1,307 |
|
|
11,542 |
|
|
4,842 |
|
|
21,717 |
|
|
Acquisition transaction and integration costs (3) |
|
1,014 |
|
|
788 |
|
|
1,804 |
|
|
2,695 |
|
|
Amortization of step up in value of acquired inventories (4) |
|
1,399 |
|
|
— |
|
|
1,399 |
|
|
— |
|
|
Gains on asset disposals (5) |
|
(3,045 |
) |
|
— |
|
|
(3,045 |
) |
|
— |
|
| Adjusted operating income
(1) |
|
$ |
105,861 |
|
|
$ |
106,964 |
|
|
$ |
204,664 |
|
|
$ |
204,234 |
|
|
As a percent of total sales |
|
13.6 |
% |
|
13.5 |
% |
|
13.3 |
% |
|
13.2 |
% |
| |
|
|
|
|
|
|
|
|
| Net income as reported |
|
$ |
85,452 |
|
|
$ |
68,864 |
|
|
$ |
156,932 |
|
|
$ |
129,688 |
|
|
Special items: |
|
|
|
|
|
|
|
|
|
Rationalization and asset impairment charges (2) |
|
1,307 |
|
|
11,542 |
|
|
4,842 |
|
|
21,717 |
|
|
Acquisition transaction and integration costs (3) |
|
1,014 |
|
|
788 |
|
|
1,804 |
|
|
2,695 |
|
|
Pension settlement charges (6) |
|
— |
|
|
— |
|
|
— |
|
|
758 |
|
|
Amortization of step up in value of acquired inventories (4) |
|
1,399 |
|
|
— |
|
|
1,399 |
|
|
— |
|
|
Gains on asset disposals (5) |
|
(3,554 |
) |
|
— |
|
|
(3,554 |
) |
|
— |
|
|
Tax effect of Special items (7) |
|
(4,751 |
) |
|
(784 |
) |
|
(5,564 |
) |
|
(1,165 |
) |
| Adjusted net income (1) |
|
80,867 |
|
|
80,410 |
|
|
155,859 |
|
|
153,693 |
|
|
Non-controlling interests in subsidiaries’ loss |
|
(8 |
) |
|
(5 |
) |
|
(22 |
) |
|
(9 |
) |
|
Interest expense, net |
|
5,898 |
|
|
4,812 |
|
|
11,221 |
|
|
9,253 |
|
|
Income taxes as reported |
|
18,040 |
|
|
25,404 |
|
|
39,492 |
|
|
48,782 |
|
|
Tax effect of Special items (7) |
|
4,751 |
|
|
784 |
|
|
5,564 |
|
|
1,165 |
|
| Adjusted EBIT (1) |
|
$ |
109,548 |
|
|
$ |
111,405 |
|
|
$ |
212,114 |
|
|
$ |
212,884 |
|
| |
|
|
|
|
|
|
|
|
| Effective tax rate as
reported |
|
17.4 |
% |
|
27.0 |
% |
|
20.1 |
% |
|
27.3 |
% |
| Net special item tax
impact |
|
4.6 |
% |
|
(2.4 |
%) |
|
2.3 |
% |
|
(2.8 |
)% |
| Adjusted effective tax rate
(1) |
|
22.0 |
% |
|
24.6 |
% |
|
22.4 |
% |
|
24.5 |
% |
| |
|
|
|
|
|
|
|
|
| Diluted earnings per share as
reported |
|
$ |
1.36 |
|
|
$ |
1.04 |
|
|
$ |
2.47 |
|
|
$ |
1.96 |
|
| Special items per share |
|
(0.08 |
) |
|
0.18 |
|
|
(0.01 |
) |
|
0.36 |
|
| Adjusted diluted earnings per
share (1) |
|
$ |
1.28 |
|
|
$ |
1.22 |
|
|
$ |
2.46 |
|
|
$ |
2.32 |
|
| |
|
|
|
|
|
|
|
|
| Weighted average shares
(diluted) |
|
62,970 |
|
|
66,121 |
|
|
63,419 |
|
|
66,257 |
|
- Adjusted operating income, Adjusted net income, Adjusted EBIT,
Adjusted effective tax rate and Adjusted diluted earnings per share
are non-GAAP financial measures. Management uses non-GAAP measures
to assess the Company's operating performance by excluding certain
disclosed special items that management believes are not
representative of the Company's core business. Management believes
that excluding these special items enables them to make better
period-over-period comparisons and benchmark the Company's
operational performance against other companies in its industry
more meaningfully. Furthermore, management 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.
- Primarily related to severance, asset impairments and gains or
losses on the disposal of assets.
- Related to the acquisition of Air Liquide Welding and are
included in Selling, general & administrative expenses.
- Related to the acquisition of Baker Industries, Inc. and are
included in Cost of goods sold.
- Primarily included in Cost of goods sold.
- Related to lump sum pension payments and are included in Other
income (expense).
- Includes the net tax impact of Special items recorded during
the respective periods, including tax benefits of $4,852 for the
settlement of a tax item as well as tax deductions associated with
an investment in a subsidiary in the three and six months ended
June 30, 2019.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 June 30, |
| Return on Invested
Capital |
|
2019 |
|
2018 |
|
Net income as reported |
|
$ |
314,310 |
|
|
$ |
259,995 |
|
|
Rationalization and asset impairment charges |
|
8,410 |
|
|
28,307 |
|
|
Pension settlement charges |
|
5,928 |
|
|
8,908 |
|
|
Acquisition transaction and integration costs |
|
3,607 |
|
|
9,584 |
|
|
Amortization of step up in value of acquired inventories |
|
1,399 |
|
|
4,578 |
|
|
Gains on asset disposals |
|
(3,554 |
) |
|
— |
|
|
Bargain purchase gain |
|
— |
|
|
(49,650 |
) |
|
Tax effect of Special items (3) |
|
(11,295 |
) |
|
21,256 |
|
|
Adjusted net income (1) |
|
$ |
318,805 |
|
|
$ |
282,978 |
|
|
Plus: Interest expense, net of tax of $6,178 and $6,077 in 2019 and
2018, respectively |
|
18,569 |
|
|
18,265 |
|
|
Less: Interest income, net of tax of $1,302 and $1,509 in 2019 and
2018, respectively |
|
3,912 |
|
|
4,537 |
|
|
Adjusted net income before tax-effected interest |
|
$ |
333,462 |
|
|
$ |
296,706 |
|
|
|
|
|
|
|
| Invested
Capital |
|
June 30, 2019 |
|
June 30, 2018 |
|
Short-term debt |
|
$ |
30,110 |
|
|
$ |
1,889 |
|
|
Long-term debt, less current portion |
|
710,458 |
|
|
700,194 |
|
|
Total debt |
|
740,568 |
|
|
702,083 |
|
|
Total equity |
|
846,058 |
|
|
943,508 |
|
| Invested capital |
|
$ |
1,586,626 |
|
|
$ |
1,645,591 |
|
| |
|
|
|
|
| Return on invested capital
(1)(2) |
|
21.0 |
% |
|
18.0 |
% |
- Adjusted net income and Return on invested capital are non-GAAP
financial measures. Management uses non-GAAP measures to assess the
Company's operating performance by excluding certain disclosed
special items that management believes are not representative of
the Company's core business. Management believes that excluding
these special items enables them to make better period-over-period
comparisons and benchmark the Company's operational performance
against other companies in its industry more meaningfully.
Furthermore, management 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.
- Return on invested capital is defined as rolling 12 months of
Adjusted net income before tax-effected interest income and expense
divided by Invested capital.
- Includes the net tax impact of Special items recorded during
the respective periods, including tax benefits of $4,852 for the
settlement of a tax item as well as tax deductions associated with
an investment in a subsidiary in the twelve months ended June 30,
2019 and net charges of $31,116 related to the U.S. Tax Act in the
twelve months ended June 30, 2018.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 June 30, |
| |
|
2019 |
|
2018 |
| OPERATING ACTIVITIES: |
|
|
|
|
|
Net income |
|
$ |
85,452 |
|
|
$ |
68,864 |
|
| Non-controlling interests in
subsidiaries’ loss |
|
(8 |
) |
|
(5 |
) |
| Net income including
non-controlling interests |
|
85,444 |
|
|
68,859 |
|
|
Adjustments to reconcile Net income including non-controlling
interests to Net cash provided by operating activities: |
|
|
|
|
|
Rationalization and asset impairment net gains |
|
(355 |
) |
|
(50 |
) |
|
Depreciation and amortization |
|
20,351 |
|
|
18,189 |
|
|
Equity earnings in affiliates, net |
|
(769 |
) |
|
(839 |
) |
|
Other non-cash items, net |
|
1,325 |
|
|
(654 |
) |
|
Changes in operating assets and liabilities, net of effects from
acquisitions: |
|
|
|
|
|
Decrease in accounts receivable |
|
5,629 |
|
|
561 |
|
|
(Increase) decrease in inventories |
|
(13,129 |
) |
|
153 |
|
|
(Decrease) increase in trade accounts payable |
|
(362 |
) |
|
1,670 |
|
|
Net change in other current assets and liabilities |
|
28,595 |
|
|
(9,124 |
) |
|
Net change in other long-term assets and liabilities |
|
(622 |
) |
|
1,016 |
|
| NET CASH PROVIDED BY OPERATING
ACTIVITIES |
|
126,107 |
|
|
79,781 |
|
| |
|
|
|
|
| INVESTING ACTIVITIES: |
|
|
|
|
|
Capital expenditures |
|
(20,262 |
) |
|
(16,726 |
) |
|
Acquisition of businesses, net of cash acquired |
|
(107,843 |
) |
|
356 |
|
|
Proceeds from sale of property, plant and equipment |
|
8,410 |
|
|
109 |
|
|
Purchase of marketable securities |
|
— |
|
|
(129,122 |
) |
|
Proceeds from marketable securities |
|
— |
|
|
126,767 |
|
| NET CASH USED BY INVESTING
ACTIVITIES |
|
(119,695 |
) |
|
(18,616 |
) |
| |
|
|
|
|
| FINANCING ACTIVITIES: |
|
|
|
|
|
Net change in borrowings |
|
29,980 |
|
|
273 |
|
|
Proceeds from exercise of stock options |
|
323 |
|
|
637 |
|
|
Purchase of shares for treasury |
|
(85,330 |
) |
|
(35,508 |
) |
|
Cash dividends paid to shareholders |
|
(29,541 |
) |
|
(25,589 |
) |
| NET CASH USED BY FINANCING
ACTIVITIES |
|
(84,568 |
) |
|
(60,187 |
) |
| |
|
|
|
|
| Effect of exchange rate
changes on Cash and cash equivalents |
|
883 |
|
|
(12,940 |
) |
| DECREASE IN CASH AND CASH
EQUIVALENTS |
|
(77,273 |
) |
|
(11,962 |
) |
| Cash and cash equivalents at
beginning of period |
|
267,134 |
|
|
369,056 |
|
| Cash and cash equivalents at
end of period |
|
$ |
189,861 |
|
|
$ |
357,094 |
|
| |
|
|
|
|
| Cash dividends paid per
share |
|
$ |
0.47 |
|
|
$ |
0.39 |
|
Lincoln Electric
Holdings, Inc.Financial
Highlights(In thousands, except per share
amounts)(Unaudited)
Condensed Consolidated Statements of Cash
Flows
| |
|
Six Months Ended June 30, |
| |
|
2019 |
|
2018 |
| OPERATING ACTIVITIES: |
|
|
|
|
|
Net income |
|
$ |
156,932 |
|
|
$ |
129,688 |
|
| Non-controlling interests in
subsidiaries’ loss |
|
(22 |
) |
|
(9 |
) |
| Net income including
non-controlling interests |
|
156,910 |
|
|
129,679 |
|
|
Adjustments to reconcile Net income including non-controlling
interests to Net cash provided by operating activities: |
|
|
|
|
|
Rationalization and asset impairment net charges |
|
1,069 |
|
|
626 |
|
|
Depreciation and amortization |
|
39,252 |
|
|
36,323 |
|
|
Equity earnings in affiliates, net |
|
(1,217 |
) |
|
(1,377 |
) |
|
Other non-cash items, net |
|
5,719 |
|
|
6,648 |
|
|
Changes in operating assets and liabilities, net of effects from
acquisitions: |
|
|
|
|
|
Increase in accounts receivable |
|
(21,271 |
) |
|
(39,907 |
) |
|
Increase in inventories |
|
(27,767 |
) |
|
(27,899 |
) |
|
(Decrease) increase in trade accounts payable |
|
(15,469 |
) |
|
4,861 |
|
|
Net change in other current assets and liabilities |
|
13,947 |
|
|
12,384 |
|
|
Net change in other long-term assets and liabilities |
|
812 |
|
|
2,220 |
|
| NET CASH PROVIDED BY OPERATING
ACTIVITIES |
|
151,985 |
|
|
123,558 |
|
| |
|
|
|
|
| INVESTING ACTIVITIES: |
|
|
|
|
|
Capital expenditures |
|
(36,513 |
) |
|
(31,383 |
) |
|
Acquisition of businesses, net of cash acquired |
|
(107,843 |
) |
|
6,591 |
|
|
Proceeds from sale of property, plant and equipment |
|
8,712 |
|
|
227 |
|
|
Purchase of marketable securities |
|
— |
|
|
(218,667 |
) |
|
Proceeds from marketable securities |
|
— |
|
|
258,733 |
|
|
Other investing activities |
|
2,000 |
|
|
— |
|
| NET CASH (USED BY) PROVIDED BY
INVESTING ACTIVITIES |
|
(133,644 |
) |
|
15,501 |
|
| |
|
|
|
|
| FINANCING ACTIVITIES: |
|
|
|
|
|
Net change in borrowings |
|
29,977 |
|
|
210 |
|
|
Proceeds from exercise of stock options |
|
960 |
|
|
2,599 |
|
|
Purchase of shares for treasury |
|
(160,914 |
) |
|
(50,232 |
) |
|
Cash dividends paid to shareholders |
|
(60,101 |
) |
|
(51,250 |
) |
| NET CASH USED BY FINANCING
ACTIVITIES |
|
(190,078 |
) |
|
(98,673 |
) |
| |
|
|
|
|
| Effect of exchange rate
changes on Cash and cash equivalents |
|
2,749 |
|
|
(9,993 |
) |
| (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS |
|
(168,988 |
) |
|
30,393 |
|
| Cash and cash equivalents at
beginning of period |
|
358,849 |
|
|
326,701 |
|
| Cash and cash equivalents at
end of period |
|
$ |
189,861 |
|
|
$ |
357,094 |
|
| |
|
|
|
|
| Cash dividends paid per
share |
|
$ |
0.94 |
|
|
$ |
0.78 |
|
Lincoln Electric Holdings,
Inc.Segment Highlights (1)(In
thousands)(Unaudited)
| |
|
AmericasWelding |
|
InternationalWelding |
|
The HarrisProducts
Group |
|
Corporate /Eliminations |
|
Consolidated |
| Three months ended June 30,
2019 |
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
476,607 |
|
|
$ |
212,306 |
|
|
$ |
88,095 |
|
|
$ |
— |
|
|
$ |
777,008 |
|
| Inter-segment sales |
|
34,811 |
|
|
4,188 |
|
|
2,113 |
|
|
(41,112 |
) |
|
— |
|
|
Total |
|
$ |
511,418 |
|
|
$ |
216,494 |
|
|
$ |
90,208 |
|
|
$ |
(41,112 |
) |
|
$ |
777,008 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Net income |
|
|
|
|
|
|
|
|
|
$ |
85,452 |
|
|
As a percent of total sales |
|
|
|
|
|
|
|
|
|
11.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
| EBIT (1) |
|
$ |
83,072 |
|
|
$ |
17,805 |
|
|
$ |
13,488 |
|
|
$ |
(4,983 |
) |
|
$ |
109,382 |
|
|
As a percent of total sales |
|
16.2 |
% |
|
8.2 |
% |
|
15.0 |
% |
|
|
|
14.1 |
% |
| Special items charges (gains)
(3) |
|
1,779 |
|
|
(2,627 |
) |
|
— |
|
|
1,014 |
|
|
166 |
|
| Adjusted EBIT (2) |
|
$ |
84,851 |
|
|
$ |
15,178 |
|
|
$ |
13,488 |
|
|
$ |
(3,969 |
) |
|
$ |
109,548 |
|
|
As a percent of total sales |
|
16.6 |
% |
|
7.0 |
% |
|
15.0 |
% |
|
|
|
14.1 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| Three months ended June 30,
2018 |
|
|
|
|
|
|
|
|
| Net sales |
|
$ |
462,515 |
|
|
$ |
243,373 |
|
|
$ |
84,164 |
|
|
$ |
— |
|
|
$ |
790,052 |
|
| Inter-segment sales |
|
31,240 |
|
|
5,497 |
|
|
2,003 |
|
|
(38,740 |
) |
|
— |
|
|
Total |
|
$ |
493,755 |
|
|
$ |
248,870 |
|
|
$ |
86,167 |
|
|
$ |
(38,740 |
) |
|
$ |
790,052 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Net income |
|
|
|
|
|
|
|
|
|
$ |
68,864 |
|
|
As a percent of total sales |
|
|
|
|
|
|
|
|
|
8.7 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| EBIT (1) |
|
$ |
88,158 |
|
|
$ |
4,734 |
|
|
$ |
10,157 |
|
|
$ |
(3,974 |
) |
|
$ |
99,075 |
|
|
As a percent of total sales |
|
17.9 |
% |
|
1.9 |
% |
|
11.8 |
% |
|
|
|
12.5 |
% |
| Special items charges (gains)
(4) |
|
— |
|
|
11,542 |
|
|
— |
|
|
788 |
|
|
12,330 |
|
| Adjusted EBIT (2) |
|
$ |
88,158 |
|
|
$ |
16,276 |
|
|
$ |
10,157 |
|
|
$ |
(3,186 |
) |
|
$ |
111,405 |
|
|
As a percent of total sales |
|
17.9 |
% |
|
6.5 |
% |
|
11.8 |
% |
|
|
|
14.1 |
% |
- EBIT is defined as Operating income plus Other income
(expense).
- 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.
- Special items in 2019 reflect Rationalization and asset
impairment charges of $380 in Americas Welding and $927 in
International Welding, amortization of step up in value of acquired
inventories of $1,399 in Americas Welding, gains on disposals of
assets of $3,554 in International Welding and acquisition
transaction and integration costs of $1,014 in
Corporate/Eliminations related to the acquisition of Air Liquide
Welding.
- Special items in 2018 reflect rationalization and asset
impairment charges of $11,542 in International Welding. Special
items in 2018 also reflect acquisition transaction and integration
costs of $788 in Corporate/Eliminations related to the acquisition
of Air Liquide Welding.
Lincoln Electric Holdings,
Inc.Segment Highlights(In
thousands)(Unaudited)
| |
|
AmericasWelding |
|
InternationalWelding |
|
The HarrisProducts
Group |
|
Corporate /Eliminations |
|
Consolidated |
| Six months ended June 30,
2019 |
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
934,326 |
|
|
$ |
430,392 |
|
|
$ |
171,464 |
|
|
$ |
— |
|
|
$ |
1,536,182 |
|
| Inter-segment sales |
|
64,199 |
|
|
8,397 |
|
|
3,980 |
|
|
(76,576 |
) |
|
— |
|
|
Total |
|
$ |
998,525 |
|
|
$ |
438,789 |
|
|
$ |
175,444 |
|
|
$ |
(76,576 |
) |
|
$ |
1,536,182 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Net income |
|
|
|
|
|
|
|
|
|
$ |
156,932 |
|
|
As a percent of total sales |
|
|
|
|
|
|
|
|
|
10.2 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| EBIT (1) |
|
$ |
163,488 |
|
|
$ |
28,943 |
|
|
$ |
24,007 |
|
|
$ |
(8,815 |
) |
|
$ |
207,623 |
|
|
As a percent of total sales |
|
16.4 |
% |
|
6.6 |
% |
|
13.7 |
% |
|
|
|
13.5 |
% |
| Special items charges (gains)
(3) |
|
3,115 |
|
|
(428 |
) |
|
— |
|
|
1,804 |
|
|
4,491 |
|
| Adjusted EBIT (2) |
|
$ |
166,603 |
|
|
$ |
28,515 |
|
|
$ |
24,007 |
|
|
$ |
(7,011 |
) |
|
$ |
212,114 |
|
|
As a percent of total sales |
|
16.7 |
% |
|
6.5 |
% |
|
13.7 |
% |
|
|
|
13.8 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| Six months ended June 30,
2018 |
|
|
|
|
|
|
|
|
| Net sales |
|
$ |
897,287 |
|
|
$ |
490,693 |
|
|
$ |
159,768 |
|
|
$ |
— |
|
|
$ |
1,547,748 |
|
| Inter-segment sales |
|
57,826 |
|
|
10,006 |
|
|
3,910 |
|
|
(71,742 |
) |
|
— |
|
|
Total |
|
$ |
955,113 |
|
|
$ |
500,699 |
|
|
$ |
163,678 |
|
|
$ |
(71,742 |
) |
|
$ |
1,547,748 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Net income |
|
|
|
|
|
|
|
|
|
$ |
129,688 |
|
|
As a percent of total sales |
|
|
|
|
|
|
|
|
|
8.4 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| EBIT (1) |
|
$ |
164,839 |
|
|
$ |
9,532 |
|
|
$ |
19,382 |
|
|
$ |
(6,039 |
) |
|
$ |
187,714 |
|
|
As a percent of total sales |
|
17.3 |
% |
|
1.9 |
% |
|
11.8 |
% |
|
|
|
12.1 |
% |
| Special items charges (gains)
(4) |
|
758 |
|
|
21,717 |
|
|
— |
|
|
2,695 |
|
|
25,170 |
|
| Adjusted EBIT (2) |
|
$ |
165,597 |
|
|
$ |
31,249 |
|
|
$ |
19,382 |
|
|
$ |
(3,344 |
) |
|
$ |
212,884 |
|
|
As a percent of total sales |
|
17.3 |
% |
|
6.2 |
% |
|
11.8 |
% |
|
|
|
13.8 |
% |
- EBIT is defined as Operating income plus Other income
(expense).
- 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.
- Special items in 2019 reflect Rationalization and asset
impairment charges of $1,716 in Americas Welding and $3,126 in
International Welding, amortization of step up in value of acquired
inventories of $1,399 in Americas Welding, gains on disposals of
assets of $3,554 in International Welding and acquisition
transaction and integration costs of $1,804 in
Corporate/Eliminations related to the acquisition of Air Liquide
Welding.
- Special items in 2018 reflect pension settlement charges of
$758 in Americas Welding, rationalization and asset impairment
charges of $21,717 in International Welding and acquisition
transaction and integration costs of $2,695 in
Corporate/Eliminations related to the acquisition of Air Liquide
Welding.
Lincoln Electric
Holdings, Inc.Change in Net Sales by
Segment(In
thousands)(Unaudited)
| Three
Months Ended June 30th Change in Net Sales by Segment |
| |
| |
|
|
|
Change in Net Sales due to: |
|
|
| |
|
Net Sales 2018 |
|
Volume |
|
Acquisitions |
|
Price |
|
ForeignExchange |
|
Net Sales 2019 |
| Operating
Segments |
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas Welding |
|
$ |
462,515 |
|
|
$ |
(16,756 |
) |
|
$ |
21,512 |
|
|
$ |
11,599 |
|
|
$ |
(2,263 |
) |
|
$ |
476,607 |
|
| International Welding |
|
243,373 |
|
|
(23,550 |
) |
|
— |
|
|
2,837 |
|
|
(10,354 |
) |
|
212,306 |
|
| The Harris Products Group |
|
84,164 |
|
|
(417 |
) |
|
5,656 |
|
|
(635 |
) |
|
(673 |
) |
|
88,095 |
|
|
Consolidated |
|
$ |
790,052 |
|
|
$ |
(40,723 |
) |
|
$ |
27,168 |
|
|
$ |
13,801 |
|
|
$ |
(13,290 |
) |
|
$ |
777,008 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| % Change |
|
|
|
|
|
|
|
|
|
|
|
|
| Americas Welding |
|
|
|
(3.6 |
%) |
|
4.7 |
% |
|
2.5 |
% |
|
(0.5 |
%) |
|
3.0 |
% |
| International Welding |
|
|
|
(9.7 |
%) |
|
— |
|
|
1.2 |
% |
|
(4.3 |
%) |
|
(12.8 |
%) |
| The Harris Products Group |
|
|
|
(0.5 |
%) |
|
6.7 |
% |
|
(0.8 |
%) |
|
(0.8 |
%) |
|
4.7 |
% |
|
Consolidated |
|
|
|
(5.2 |
%) |
|
3.4 |
% |
|
1.7 |
% |
|
(1.7 |
%) |
|
(1.7 |
%) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Six
Months Ended June 30th Change in Net Sales by Segment |
| |
|
|
|
|
|
|
| |
|
|
|
Change in Net Sales due to: |
|
|
| |
|
Net Sales 2018 |
|
Volume |
|
Acquisitions |
|
Price |
|
Foreign Exchange |
|
Net Sales 2019 |
| Operating
Segments |
|
|
|
|
|
|
|
|
|
|
|
|
| Americas Welding |
|
$ |
897,287 |
|
|
$ |
(29,151 |
) |
|
$ |
34,232 |
|
|
$ |
39,027 |
|
|
$ |
(7,069 |
) |
|
$ |
934,326 |
|
| International Welding |
|
490,693 |
|
|
(41,467 |
) |
|
— |
|
|
9,312 |
|
|
(28,146 |
) |
|
430,392 |
|
| The Harris Products Group |
|
159,768 |
|
|
2,544 |
|
|
11,430 |
|
|
(185 |
) |
|
(2,093 |
) |
|
171,464 |
|
|
Consolidated |
|
$ |
1,547,748 |
|
|
$ |
(68,074 |
) |
|
$ |
45,662 |
|
|
$ |
48,154 |
|
|
$ |
(37,308 |
) |
|
$ |
1,536,182 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| % Change |
|
|
|
|
|
|
|
|
|
|
|
|
| Americas Welding |
|
|
|
|
(3.2 |
%) |
|
3.8 |
% |
|
4.3 |
% |
|
(0.8 |
%) |
|
4.1 |
% |
| International Welding |
|
|
|
(8.5 |
%) |
|
— |
|
|
1.9 |
% |
|
(5.7 |
%) |
|
(12.3 |
%) |
| The Harris Products Group |
|
|
|
1.6 |
% |
|
7.2 |
% |
|
(0.1 |
%) |
|
(1.3 |
%) |
|
7.3 |
% |
|
Consolidated |
|
|
|
(4.4 |
%) |
|
3.0 |
% |
|
3.1 |
% |
|
(2.4 |
%) |
|
(0.7 |
%) |
Lincoln Electric (NASDAQ:LECO)
過去 株価チャート
から 6 2024 まで 7 2024
Lincoln Electric (NASDAQ:LECO)
過去 株価チャート
から 7 2023 まで 7 2024
