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.
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 |
% |
- Includes current portion of long-term debt.
- 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 |
|
|
- 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.
- Primarily related to severance, gains or losses on the disposal
of assets and asset impairments of long-lived assets.
- Related to acquisitions and are included in Selling, general
& administrative expenses.
- Related to acquisitions and are included in Cost of goods
sold.
- Settlement charges related to lump sum pension payments
associated with the termination of a pension plan and are included
in Other income (expense).
- 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 |
|
|
- Adjusted net income, Return on invested capital and EBITDA are
non-GAAP financial measures. Refer to Non-GAAP Information
section.
- 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 (1)
(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 |
% |
|
- 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 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.
- 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 |
% |
|
- 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 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.
- 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 |
% |
Contact
Amanda Butler
Vice President, Investor Relations & Communications
Tel: 216.383.2534
Email: Amanda_Butler@lincolnelectric.com
Lincoln Electric (NASDAQ:LECO)
過去 株価チャート
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Lincoln Electric (NASDAQ:LECO)
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から 7 2023 まで 7 2024