Lincoln Electric Reports 1Q EPS of $0.80, $0.92 as adjusted; 1Q Sales of $718.6 million

   Lincoln Electric Reports 1Q EPS of $0.80, $0.92 as adjusted; 1Q Sales of
                                $718.6 million

PR Newswire

CLEVELAND, April 23, 2013

CLEVELAND, April 23, 2013 /PRNewswire/ --

 First Quarter 2013 Highlights
   oSales were $718.6 million in the First Quarter 2013
   oOperating income was $88.6 million, or 12.3% of sales, in the First
     Quarter 2013, a 3.3% decrease from the First Quarter 2012; Adjusted
     operating income increased 8.4% to $99.3 million, or 13.8% of sales, from
     the First Quarter 2012
   oOperating income includes charges of $10.7 million, including a $0.12 per
     diluted share charge for the Venezuelan currency devaluation
   oNet income increased 4.0% to $66.8 million, or $0.80 per diluted share,
     from $64.2 million, or $0.76 per diluted share, in the First Quarter
     2012; Adjusted net income increased 20.1% to $77.1 million, or $0.92 per
     diluted share

Lincoln Electric Holdings,Inc. (the "Company") (Nasdaq: LECO) today reported
first quarter 2013 net income of $66.8 million, or $0.80 per diluted share.
Adjusted net income was $77.1 million, or $0.92 per diluted share, compared to
adjusted net income of $64.2 million, or $0.76 per diluted share, in the
comparable 2012 period.

Sales were $718.6 million in the first quarter 2013 versus $727.1 million in
the comparable 2012 period, a decrease of 1.2%. Operating income for the
first quarter decreased $3.0 million to $88.6 million, or 12.3% of sales, from
$91.7 million, or 12.6% of sales, in the comparable 2012 period. Special
items that impacted operating income in the first quarter 2013 include pre-tax
rationalization charges of $1.1 million, and pre-tax charges of $1.6 million
and $8.1 million to Costs of goods sold and Selling, general and
administrative expenses, respectively, related to the devaluation of the
Venezuelan currency.

Net income for the three months ended March 31, 2013 was $66.8 million, or
$0.80 per diluted share, compared with net income of $64.2 million, or $0.76
per diluted share, in 2012. Adjusted net income was $77.1 million, or $0.92
per diluted share, compared to adjusted net income of $64.2 million, or $0.76
per diluted share, in 2012. The effective tax rate for the three months ended
March 31, 2013 was 26.3% compared with 31.0% in 2012. The lower effective tax
rate is due to the effect of the renewed U.S. research and development credit
and decreases in the valuation allowance.

"We are pleased to report excellent first quarter results that illustrate
continued strength in our profitability measures despite softer market
conditions," said John M. Stropki, Executive Chairman. "Our strong operating
performance is a result of our globally focused efforts on operational
improvement, including optimizing product and customer mix.

"In the near term we remain cautious due to the softer macroeconomic
environment. However, we continue to be very well positioned to capitalize
when global market growth resumes."

Christopher L. Mapes, President and Chief Executive Officer added, "Despite
the uncertain economic environment, we are committed to continuing to enhance
shareholder returns as we work towards the goals set in our '2020 Vision'. Our
solid balance sheet provides the flexibility required to execute our long-term
strategic objectives and allows us to remain focused on global growth
strategies, including attractive acquisitions to shape our product portfolio
and global reach."

The Company's Board of Directors declared a quarterly cash dividend of $0.20
per share, which was paid on April 15, 2013 to holders of record on March 28,
2013. The Company made voluntary contributions of $50.0 million to the
Company's U.S pension plans and returned $12.8 million to shareholders through
the repurchase of 228,822 of the Company's common shares for treasury.

Webcast Information

A conference call to discuss first quarter 2013 financial results will be
webcast live today, Tuesday, April23, 2013, at 11:00a.m., Eastern Time.
This webcast is accessible at http://www.lincolnelectric.com/InvestorWebcasts.
Listeners should go to the web site prior to the call to register and 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) 407-9205 (domestic) or (201) 689-8054
(international). A telephonic replay will be available starting at 1:00 p.m.
Eastern Time today and will end on Tuesday, April 30, 2013 at 11:59 p.m.
Eastern Time. To listen to the replay, please dial (877) 660-6853 (domestic)
or (201) 612-7415 (international) and use confirmation code 411951.

Financial results for the first quarter 2013 can also be obtained at
http://www.lincolnelectric.com/InvestorNews.

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 45
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
http://www.lincolnelectric.com.

Non-GAAP Information

Adjusted operating income, adjusted net income and adjusted diluted earnings
per share are non-GAAP financial measures that management believes are
important to investors to evaluate and compare the Company's financial
performance from period to period. Management uses this information in
assessing and evaluating the Company's underlying operating performance.
Non-GAAP financial measures should be read in conjunction with the GAAP
financial measures, as non-GAAP measures are a supplement to, and not a
replacement for, GAAP financial measures. Please refer to the attached
schedule for a reconciliation of non-GAAP financial measures to the related
GAAP financial measures.

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; currency exchange and
interest rates; adverse outcome of pending or potential litigation; actual
costs of the Company's rationalization plans; possible acquisitions; market
risks and price fluctuations related to the purchase of commodities and
energy; global regulatory complexity; 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 Form10-K.



Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)
Consolidated Statements of Income
                                      Three months ended March 31,                  Fav (Unfav) to
                                                                                    Prior Year
                                      2013       %ofSales  2012       %ofSales  $          %
Net sales                             $ 718,573  100.0%      $ 727,122  100.0%      $ (8,549)  (1.2%)
Cost of goods sold                    492,001    68.5%       511,857    70.4%       19,856     3.9%
Gross profit                          226,572    31.5%       215,265    29.6%       11,307     5.3%
Selling, general& administrative     136,891    19.1%       123,615    17.0%       (13,276)   (10.7%)
expenses
Rationalizationandassetimpairment
charges                               1,051      0.1%        —          —           (1,051)    (100.0%)

(gains)
Operating income                      88,630     12.3%       91,650     12.6%       (3,020)    (3.3%)
Interest income                       1,026      0.1%        883        0.1%        143        16.2%
Equity earnings in affiliates         1,259      0.2%        692        0.1%        567        81.9%
Other income                          714        0.1%        866        0.1%        (152)      (17.6%)
Interest expense                      (950)      (0.1%)      (1,172)    (0.2%)      222        18.9%
Income before income taxes            90,679     12.6%       92,919     12.8%       (2,240)    (2.4%)
Income taxes                          23,836     3.3%        28,770     4.0%        4,934      17.1%
Effective tax rate                    26.3%                  31.0%                  4.7%
Net income including non-controlling  66,843     9.3%        64,149     8.8%        2,694      4.2%
interests
Non-controlling interests in
subsidiaries'                         37         —           (94)       —           131        139.4%

earnings (loss)
Net income                            $ 66,806   9.3%        $ 64,243   8.8%        $ 2,563    4.0%
Basic earnings per share              $ 0.81                 $ 0.77                 $ 0.04     5.2%
Diluted earnings per share            $ 0.80                 $ 0.76                 $ 0.04     5.3%
Weighted average shares (basic)       82,719                 83,452
Weighted average shares (diluted)     83,786                 84,608



Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)
Non-GAAP Financial Measures
                                         Three months ended March 31,
                                         2013            2012
Operating income as reported             $   88,630      $  91,650
Special items (pre-tax):
Rationalization charges (gains)(1)      1,051           —
Venezuelan currency devaluation(2)      9,660           —
Adjusted operating income (3)            $   99,341      $  91,650
Net income as reported                   $   66,806      $  64,243
Special items (after-tax):
Rationalization charges (gains)(1)      673             —
Venezuelan currency devaluation(2)      9,660           —
Adjusted net income (3)                  $   77,139      $  64,243
Diluted earnings per share as reported   $   0.80        $  0.76
Special items                            0.12            —
Adjusted diluted earnings per share (3)  $   0.92        $  0.76
Weighted average shares (diluted)        83,786          84,608



    The three months ended March 31, 2013 include net charges associated with
(1) severance and other costs from the consolidation of manufacturing
    operations initiated in 2012 partially offset by gains related to the sale
    of assets at rationalized operations.
(2) Represents the impact of the devaluation of the Venezuelan currency.
    Adjusted operating income, Adjusted net income and Adjusted diluted
    earnings per share are non-GAAP financial measures that management
    believes are important to investors to evaluate and compare the Company's
(3) financial performance from period to period. Management uses this
    information in assessing and evaluating the Company's underlying operating
    performance. Non-GAAP financial measures should be read in conjunction
    with the GAAP financial measures, as non-GAAP measures are a supplement
    to, and not a replacement for, GAAP financial measures.





Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands)
(Unaudited)
Balance Sheet Highlights
SelectedConsolidatedBalanceSheetData      March 31, 2013  December 31,
                                                              2012
Cash and cash equivalents                     $  248,455      $   286,464
Total current assets                          1,164,660       1,132,816
Property, plant and equipment, net            481,074         486,236
Total assets                                  2,103,527       2,089,863
Total current liabilities                     458,981         440,267
Short-term debt (1)                           17,035          18,676
Long-term debt                                1,448           1,599
Total equity                                  1,403,545       1,358,321
Net Operating Working Capital                 March 31, 2013  December 31,
                                                              2012
Accounts receivable                           $  423,767      $   360,662
Inventory                                     377,260         364,890
Trade accounts payable                        216,256         209,647
Net operating working capital                 $  584,771      $   515,905
Net operating working capital to net sales    20.3%           18.8%
(2)
Invested Capital                              March 31, 2013  December 31,
                                                              2012
Short-term debt (1)                           $  17,035       $   18,676
Long-term debt                                1,448           1,599
Total debt                                    18,483          20,275
Total equity                                  1,403,545       1,358,321
Invested capital                              $  1,422,028    $   1,378,596
Total debt / invested capital                 1.3%            1.5%
Return on invested capital (3)                18.3%           18.7%



(1) Includes current portion of long-term debt.
(2) Net operating working capital to net sales is defined as net operating
    working capital divided by annualized rolling three months of sales.
(3) Return on invested capital is defined as rolling 12 months of earnings
    excluding tax-effected interest divided by invested capital.





Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)
Condensed Consolidated Statements of Cash Flows
                                                  Three months ended March 31,
                                                  2013            2012
OPERATING ACTIVITIES:
Net income                                        $  66,806       $  64,243
Non-controlling interests in subsidiaries'        37              (94)
earnings (loss)
Net income including non-controlling interests    66,843          64,149
Adjustments to reconcile Net income including
non-controlling interests to Net cash

(used) provided by operating activities:
Rationalization and asset impairment charges      114             —
Depreciation and amortization                     17,397          15,579
Equity (earnings) loss in affiliates, net         (436)           443
Other non-cash items, net                         22,302          15,359
Changes in operating assets and liabilities, net
of effects from acquisitions:
Increase in accounts receivable                   (66,585)        (29,752)
Increase in inventories                           (16,334)        (14,462)
Increase in trade accounts payable                8,268           23,341
Net change in other current assets and            4,182           19,075
liabilities
Decrease in accrued pensions                      (55,663)        (18,970)
Net change in other long-term assets and          (236)           4,402
liabilities
NET CASH (USED) PROVIDED BY OPERATING ACTIVITIES  (20,148)        79,164
INVESTING ACTIVITIES:
Capital expenditures                              (15,138)        (12,567)
Acquisition of businesses, net of cash acquired   (549)           (21,896)
Proceeds from sale of property, plant and         105             210
equipment
NET CASH USED BY INVESTING ACTIVITIES             (15,582)        (34,253)
FINANCING ACTIVITIES:
Net change in borrowings                          (1,492)         (83,998)
Proceeds from exercise of stock options           9,658           7,440
Excess tax benefits from stock based              3,989           2,983
compensation
Purchase of shares for treasury                   (12,780)        (20,098)
Cash dividends paid to shareholders               —               (14,186)
NET CASH USED BY FINANCING ACTIVITIES             (625)           (107,859)
Effect of exchange rate changes on Cash and cash  (1,654)         2,685
equivalents
DECREASE IN CASH AND CASH EQUIVALENTS             (38,009)        (60,263)
Cash and cash equivalents at beginning of period  286,464         361,101
Cash and cash equivalents at end of period        $  248,455      $  300,838
Cash dividends paid per share                     $  —            $  0.17



Lincoln Electric Holdings, Inc.
Segment Highlights
(In thousands)
(Unaudited)
               North                               South      TheHarris
                          Europe     AsiaPacific                         Corporate/
               America                             America    Products                  Consolidated
                          Welding    Welding                              Eliminations
               Welding                             Welding    Group
Three months
ended

March 31,
2013
Net sales      $ 419,554  $ 110,491  $   70,039    $ 36,374   $   82,115  $  —          $  718,573
Inter-segment  28,985     4,279      4,384         20         2,224       (39,892)      —
sales
Total          $ 448,539  $ 114,770  $   74,423    $ 36,394   $   84,339  $  (39,892)   $  718,573
EBIT ^(1)      $ 75,800   $ 10,707   $   2,096     $ (4,548)  $   7,151   $  (603)      $  90,603
As a percent
of total       16.9%      9.3%       2.8%          (12.5%)    8.5%                      12.6%
sales
Special items
charge (gain)  $ 860      $ (6)      $   197       $ 9,660    $   —       $  —          $  10,711
^(2)
EBIT, as       $ 76,660   $ 10,701   $   2,293     $ 5,112    $   7,151   $  (603)      $  101,314
adjusted ^(3)
As a percent
of total       17.1%      9.3%       3.1%          14.0%      8.5%                      14.1%
sales
Three months
ended

March 31,
2012
Net sales      $ 381,329  $ 125,803  $   92,563    $ 39,838   $   87,589  $  —          $  727,122
Inter-segment  33,542     4,451      3,817         —          2,383       (44,193)      —
sales
Total          $ 414,871  $ 130,254  $   96,380    $ 39,838   $   89,972  $  (44,193)   $  727,122
EBIT ^(1)      $ 69,519   $ 12,811   $   2,573     $ 2,905    $   7,153   $  (1,753)    $  93,208
As a percent
of total       16.8%      9.8%       2.7%          7.3%       8.0%                      12.8%
sales
Special items  $ —        $ —        $   —         $ —        $   —       $  —          $  —
charge (gain)
EBIT, as       $ 69,519   $ 12,811   $   2,573     $ 2,905    $   7,153   $  (1,753)    $  93,208
adjusted ^(3)
As a percent
of total       16.8%      9.8%       2.7%          7.3%       8.0%                      12.8%
sales



(1) EBIT is defined as Operating income plus Equity earnings in affiliates and
    Other income.
    Special items in the three months ended March 31, 2013 include
(2) rationalization and asset impairment charges (gains) and the impact of the
    devaluation of the Venezuelan currency.
    The primary profit measure used by management to assess segment
(3) performance is EBIT, as adjusted. EBIT for each operating segment is
    adjusted for special items to derive EBIT, as adjusted.



Lincoln Electric Holdings, Inc.
Change in Net Sales by Segment
(In thousands)
(Unaudited)


Three Months Ended March 31st Change in Net Sales by Segment
                          Change in Net Sales due to:
              NetSales                                        Foreign     NetSales
                          Volume       Acquisitions  Price
              2012                                             Exchange    2013
Operating
Segments
North
America       $ 381,329   $ (7,350)    $  40,260     $ 5,276   $ 39        $ 419,554
Welding
Europe        125,803     (9,007)      —             (3,976)   (2,329)     110,491
Welding
Asia Pacific  92,563      (20,145)     —             (1,921)   (458)       70,039
Welding
South
America       39,838      (3,321)      —             1,992     (2,135)     36,374
Welding
The Harris
Products      87,589      (3,807)      —             (459)     (1,208)     82,115
Group
Consolidated  $ 727,122   $ (43,630)   $  40,260     $ 912     $ (6,091)   $ 718,573
% Change
North
America                   (1.9%)       10.6%         1.4%      —           10.0%
Welding
Europe                    (7.2%)       —             (3.2%)    (1.9%)      (12.2%)
Welding
Asia Pacific              (21.8%)      —             (2.1%)    (0.5%)      (24.3%)
Welding
South
America                   (8.3%)       —             5.0%      (5.4%)      (8.7%)
Welding
The Harris
Products                  (4.3%)       —             (0.5%)    (1.4%)      (6.2%)
Group
Consolidated              (6.0%)       5.5%          0.1%      (0.8%)      (1.2%)

SOURCE Lincoln Electric Holdings, Inc.

Website: http://www.lincolnelectric.com
Contact: Investor Relations: Amanda Butler (216) 383-2534,
Amanda_Butler@lincolnelectric.com
 
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