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Lincoln Electric Reports Third Quarter 2013 Results



Lincoln Electric Reports Third Quarter 2013 Results

3Q EPS Increases 4% to $0.80, Adjusted EPS Increases 8% to $0.86

                   Third Quarter Highlights vs. Prior Year

  * Operating income up 7% to $95 million, or 13.8% of sales, despite 1% lower
    sales
  * Adjusted operating income up 11% to $101 million and up 150 bps to 14.7%
    of sales
  * Cash flow from operations up 88% to $155 million
  * Returned $60 million to shareholders through share repurchases and
    dividends

CLEVELAND, Oct. 31, 2013 (GLOBE NEWSWIRE) -- Lincoln Electric Holdings, Inc.
(the "Company") (Nasdaq:LECO) today reported third quarter 2013 net income of
$66.0 million, or $0.80 per diluted share, compared to net income of $64.8
million, or $0.77 per diluted share, in the comparable 2012 period. Adjusted
net income was $71.1 million, or $0.86 per diluted share, compared to adjusted
net income of $67.5 million, or $0.80 per diluted share, in the comparable
2012 period.

Sales were $691.9 million in the third quarter 2013 versus $697.6 million in
the comparable 2012 period, a decrease of 0.8%. Operating income for the third
quarter increased $6.5 million to $95.2 million, or 13.8% of sales, from $88.7
million, or 12.7% of sales, in the comparable 2012 period. Special items that
impacted operating income in the third quarter 2013 included pre-tax charges
of $6.3 million associated with rationalization and non-cash asset impairment
charges.

Sales for the nine months ended September 30, 2013 were $2.1 billion versus
$2.2 billion in the comparable 2012 period, a decrease of 1.4%. Operating
income for the nine months ended September 30, 2013 increased $11.7 million to
$288.1 million, or 13.5% of sales, from $276.4 million, or 12.7% of sales, in
the comparable 2012 period.

Net income for the nine months ended September 30, 2013 was $205.5 million, or
$2.47 per diluted share, compared with net income of $195.3 million, or $2.32
per diluted share, in 2012. Adjusted net income was $224.0 million, or $2.69
per diluted share, compared to adjusted net income of $199.9 million, or $2.37
per diluted share, in 2012. The effective tax rate for the nine months ended
September 30, 2013 was 31.0% compared with 30.8% in 2012.

Christopher L. Mapes, President and Chief Executive Officer stated, "We
delivered solid results in the quarter by focusing on initiatives that enhance
profitability and shareholder returns. We continued to lower our cost base,
reshape our platform and mix and invest in solutions that capitalize on
high-growth opportunities. While we saw some stabilization late in the
quarter, ongoing weak end market conditions keep us cautious in the near-term.
As such, we remain focused on driving continued year-over-year expansion in
profitability and returns while serving our customers with innovative
solutions."

The Company's Board of Directors declared a quarterly cash dividend of $0.20
per share, which was paid on October 15, 2013 to holders of record on
September 30, 2013. During the quarter, the Company returned $44.0 million to
shareholders through the repurchase of 710,726 of the Company's common shares.

During the nine months ended September 30, 2013, the Company made voluntary
contributions of $75.2 million to its U.S. pension plans and returned $113.6
million to shareholders through the repurchase of 1,954,372 of the Company's
common shares.

Webcast Information

A conference call to discuss third quarter 2013 financial results will be
webcast live today, Thursday, October 31, 2013, at 10:00 a.m., Eastern Time.
This webcast is accessible at http://ir.lincolnelectric.com. 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 12:00 p.m.
Eastern Time today and will end on Thursday, November 14, 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 100563.  

Financial results for the third quarter 2013 can also be obtained at
http://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 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 Form 10-K.

 
Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)
Consolidated Statements of Income
                                                                                         
                                     Three months ended September 30,          Fav (Unfav) to
                                                                               Prior Year
                                     2013      % of Sales 2012      % of Sales $        %
Net sales                            $ 691,875 100.0%     $ 697,552 100.0%     $        (0.8%)
                                                                               (5,677)
Cost of goods sold                   459,178   66.4%      484,190   69.4%      25,012   5.2%
Gross profit                         232,697   33.6%      213,362   30.6%      19,335   9.1%
Selling, general & administrative    131,217   19.0%      121,602   17.4%      (9,615)  (7.9%)
expenses
Rationalization and asset impairment 6,302     0.9%       3,059     0.4%       (3,243)  (106.0%)
charges
Operating income                     95,178    13.8%      88,701    12.7%      6,477    7.3%
Interest income                      536       0.1%       916       0.1%       (380)    (41.5%)
Equity earnings in affiliates        1,170     0.2%       1,566     0.2%       (396)    (25.3%)
Other income                         1,514     0.2%       746       0.1%       768      102.9%
Interest expense                     (558)     (0.1%)     (1,040)   (0.1%)     482      46.3%
Income before income taxes           97,840    14.1%      90,889    13.0%      6,951    7.6%
Income taxes                         33,588    4.9%       26,153    3.7%       (7,435)  (28.4%)
Effective tax rate                   34.3%                28.8%                (5.5%)    
Net income including non-controlling 64,252    9.3%       64,736    9.3%       (484)    (0.7%)
interests
Non-controlling interests in         (1,792)   (0.3%)     (29)      —          (1,763)  (6,079.3%)
subsidiaries' loss
Net income                           $ 66,044  9.5%       $ 64,765  9.3%       $ 1,279  2.0%
                                                                                         
Basic earnings per share              $ 0.81               $ 0.78               $ 0.03  3.8%
Diluted earnings per share            $ 0.80               $ 0.77               $ 0.03  3.9%
Weighted average shares (basic)      81,644               82,918                         
Weighted average shares (diluted)    82,707               83,916                         
                                                                                         
                                     Nine months ended September 30,           Fav (Unfav) to
                                                                               Prior Year
                                     2013      % of Sales 2012      % of Sales $        %
Net sales                            $         100.0%     $         100.0%     $        (1.4%)
                                     2,137,880            2,168,719            (30,839)
Cost of goods sold                   1,438,273 67.3%      1,515,095 69.9%      76,822   5.1%
Gross profit                         699,607   32.7%      653,624   30.1%      45,983   7.0%
Selling, general & administrative    403,323   18.9%      372,931   17.2%      (30,392) (8.1%)
expenses
Rationalization and asset impairment 8,204     0.4%       4,317     0.2%       (3,887)  (90.0%)
charges
Operating income                     288,080   13.5%      276,376   12.7%      11,704   4.2%
Interest income                      2,452     0.1%       2,648     0.1%       (196)    (7.4%)
Equity earnings in affiliates        3,687     0.2%       4,264     0.2%       (577)    (13.5%)
Other income                         3,141     0.1%       2,015     0.1%       1,126    55.9%
Interest expense                     (2,307)   (0.1%)     (3,338)   (0.2%)     1,031    30.9%
Income before income taxes           295,053   13.8%      281,965   13.0%      13,088   4.6%
Income taxes                         91,431    4.3%       86,715    4.0%       (4,716)  (5.4%)
Effective tax rate                   31.0%                30.8%                (0.2%)    
Net income including non-controlling 203,622   9.5%       195,250   9.0%       8,372    4.3%
interests
Non-controlling interests in         (1,834)   (0.1%)     (77)      —          (1,757)  (2,281.8%)
subsidiaries' loss
Net income                           $ 205,456 9.6%       $ 195,327 9.0%       $ 10,129 5.2%
                                                                                         
Basic earnings per share              $ 2.50               $ 2.35               $ 0.15  6.4%
Diluted earnings per share            $ 2.47               $ 2.32               $ 0.15  6.5%
Weighted average shares (basic)      82,260               83,233                         
Weighted average shares (diluted)    83,314               84,326                         

 
 
Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)
                                                                  
Non-GAAP Financial                                                
Measures
                                                                  
                      Three months ended September Nine months ended September
                      30,                          30,
                      2013           2012          2013          2012
Operating income as    $ 95,178       $ 88,701      $ 288,080     $ 276,376
reported
Special items                                                     
(pre-tax):
Rationalization and
asset impairment      6,302          3,059         8,204         4,317
charges (1)
Venezuelan currency   —              —             12,198        —
devaluation (2)
Venezuelan statutory
severance             —              —             —             1,381
obligation (3)
Adjusted operating     $ 101,480      $ 91,760      $ 308,482     $ 282,074
income (5)
                                                                  
Net income as          $ 66,044       $ 64,765      $ 205,456     $ 195,327
reported
Special items                                                     
(after-tax):
Rationalization and
asset impairment      6,098          2,704         7,350         3,619
charges (1)
Venezuelan currency   —              —             12,198        —
devaluation (2)
Venezuelan statutory
severance             —              —             —             906
obligation (3)
Special items
attributable to       (1,021)        —             (1,021)       —
non-controlling 
interests (4)                                                     
Adjusted net income    $ 71,121       $ 67,469      $ 223,983     $ 199,852
(5)
                                                                  
Diluted earnings per   $ 0.80         $ 0.77        $ 2.47        $ 2.32
share as reported
Special items         0.06           0.03          0.22          0.05
Adjusted diluted
earnings per share     $ 0.86         $ 0.80        $ 2.69        $ 2.37
(5)
                                                                  
Weighted average      82,707         83,916        83,314        84,326
shares (diluted)
                                                                  
(1)  The three and nine months ended September 30, 2013 include net charges
associated with long-lived asset impairments and severance and other related
costs from the consolidation of manufacturing operations partially offset by
gains related to the sale of assets at rationalized operations. 
(2)  Represents the impact of the devaluation of the Venezuelan currency.
(3)  Represents an unfavorable adjustment due to a change in Venezuelan labor
law, which provides for increased employee severance obligations.
(4)  Represents the portion of the long-lived asset attributable to
non-controlling interests.
(5)  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.

 
 
Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands)
(Unaudited)
                                                                   
Balance Sheet Highlights                                           
                                                                   
Selected Consolidated Balance Sheet Data           September 30,  December 31,
                                                   2013           2012
Cash and cash equivalents                           $ 330,309      $ 286,464
Total current assets                               1,182,649      1,132,816
Property, plant and equipment, net                 478,673        486,236
Total assets                                       2,119,641      2,089,863
Total current liabilities                          481,195        440,267
Short-term debt (1)                                14,892         18,676
Long-term debt                                     1,251          1,599
Total equity                                       1,428,819      1,358,321
                                                                   
Net Operating Working Capital                      September 30,  December 31,
                                                   2013           2012
Accounts receivable                                 $ 375,224      $ 360,662
Inventory                                          369,863        364,890
Trade accounts payable                             177,006        209,647
Net operating working capital                       $ 568,081      $ 515,905
                                                                   
Net operating working capital to net sales (2)     20.5%          18.8%
                                                                   
Invested Capital                                   September 30,  December 31,
                                                   2013           2012
Short-term debt (1)                                 $ 14,892       $ 18,676
Long-term debt                                     1,251          1,599
Total debt                                         16,143         20,275
Total equity                                       1,428,819      1,358,321
Invested capital                                    $ 1,444,962    $ 1,378,596
                                                                   
Total debt / invested capital                      1.1%           1.5%
Return on invested capital (3)                     18.5%          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 September 30,
                                              2013             2012
OPERATING ACTIVITIES:                                           
Net income                                     $ 66,044         $ 64,765
Non-controlling interests in subsidiaries'    (1,792)          (29)
loss
Net income including non-controlling          64,252           64,736
interests
Adjustments to reconcile Net income including
non-controlling interests to Net cash                           
provided by operating activities:
Rationalization and asset impairment charges  4,695            357
Depreciation and amortization                 17,326           16,435
Equity earnings in affiliates, net            (431)            (738)
Pension expense                               7,326            8,900
Pension contributions and payments            (3,066)          (18,765)
Other non-cash items, net                     5,421            (14,265)
Changes in operating assets and liabilities,                    
net of effects from acquisitions:
Decrease in accounts receivable               25,385           35,299
Decrease in inventories                       2,419            13,870
Decrease in trade accounts payable            (20,863)         (17,565)
Net change in other current assets and        50,006           50,929
liabilities
Net change in other long-term assets and      2,570            (56,738)
liabilities
NET CASH PROVIDED BY OPERATING ACTIVITIES     155,040          82,455
                                                                
INVESTING ACTIVITIES:                                           
Capital expenditures                          (28,643)         (13,060)
Acquisition of businesses, net of cash        (260)            (3,516)
acquired
Proceeds from sale of property, plant and     204              200
equipment
NET CASH USED BY INVESTING ACTIVITIES         (28,699)         (16,376)
                                                                
FINANCING ACTIVITIES:                                           
Net change in borrowings                      404              (2,632)
Proceeds from exercise of stock options       2,873            483
Excess tax benefits from stock-based          1,508            140
compensation
Purchase of shares for treasury               (43,964)         (20,017)
Cash dividends paid to shareholders           (16,407)         (14,147)
NET CASH USED BY FINANCING ACTIVITIES         (55,586)         (36,173)
                                                                
Effect of exchange rate changes on Cash and   3,165            2,806
cash equivalents
INCREASE IN CASH AND CASH EQUIVALENTS         73,920           32,712
Cash and cash equivalents at beginning of     256,389          307,963
period
Cash and cash equivalents at end of period     $ 330,309        $ 340,675
                                                                
Cash dividends paid per share                  $ 0.20           $ 0.17

 
 
Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)
                                                                
Condensed Consolidated Statements of Cash Flows
                                                                
                                               Nine months ended September 30,
                                               2013            2012
OPERATING ACTIVITIES:                                           
Net income                                      $ 205,456       $ 195,327
Non-controlling interests in subsidiaries'     (1,834)         (77)
loss
Net income including non-controlling interests 203,622         195,250
Adjustments to reconcile Net income including
non-controlling interests to Net cash provided                  
by operating activities:
Rationalization and asset impairment charges   5,049           357
Depreciation and amortization                  51,881          48,220
Equity earnings in affiliates, net             (1,313)         (1,449)
Pension expense                                22,261          26,590
Pension contributions and payments             (84,417)        (57,814)
Other non-cash items, net                      29,757          5,911
Changes in operating assets and liabilities,                    
net of effects from acquisitions:
(Increase) decrease in accounts receivable     (17,982)        13,750
Increase in inventories                        (9,889)         (6,832)
Decrease in trade accounts payable             (32,703)        (1,182)
Net change in other current assets and         75,627          73,413
liabilities
Net change in other long-term assets and       198             (52,873)
liabilities
NET CASH PROVIDED BY OPERATING ACTIVITIES      242,091         243,341
                                                                
INVESTING ACTIVITIES:                                           
Capital expenditures                           (59,691)        (39,307)
Acquisition of businesses, net of cash         (4,936)         (52,851)
acquired
Proceeds from sale of property, plant and      796             538
equipment
Other investing activities                     (4,217)         (1,541)
NET CASH USED BY INVESTING ACTIVITIES          (68,048)        (93,161)
                                                                
FINANCING ACTIVITIES:                                           
Net change in borrowings                       (2,351)         (88,001)
Proceeds from exercise of stock options        16,077          12,695
Excess tax benefits from stock-based           6,973           5,594
compensation
Purchase of shares for treasury                (113,641)       (60,155)
Cash dividends paid to shareholders            (32,987)        (42,510)
Other financing activities                     (2,809)         —
NET CASH USED BY FINANCING ACTIVITIES          (128,738)       (172,377)
                                                                
Effect of exchange rate changes on Cash and    (1,460)         1,771
cash equivalents
INCREASE (DECREASE) IN CASH AND CASH           43,845          (20,426)
EQUIVALENTS
Cash and cash equivalents at beginning of      286,464         361,101
period
Cash and cash equivalents at end of period      $ 330,309       $ 340,675
                                                                
Cash dividends paid per share                   $ 0.40          $ 0.51

 
 
Lincoln Electric Holdings, Inc.
Segment Highlights
(In thousands)
(Unaudited)
                                                                                
              North                           South   The Harris                
              America   Europe   Asia Pacific America Products   Corporate /
              Welding    Welding  Welding     Welding Group       Eliminations  Consolidated
Three months                                                                    
ended
September 30,                                                                   
2013
Net sales     $ 404,113 $ 98,522 $ 63,834     $       $ 73,691   $ —           $ 691,875
                                              51,715
Inter-segment 35,355    5,256    3,821        151     2,311      (46,894)      —
sales
Total         $ 439,468 $        $ 67,655     $       $ 76,002   $ (46,894)    $ 691,875
                        103,778               51,866
EBIT ^(1)     $ 75,242  $ 6,286  $ (5,703)    $       $ 6,917    $ (822)       $ 97,862
                                              15,942
As a percent
of total      17.1%     6.1%     (8.4%)       30.7%   9.1%                     14.1%
sales
Special items $ (17)    $ 1,595  $ 4,724      $ —     $ —        $ —           $ 6,302
charge ^(2)
EBIT, as      $ 75,225  $ 7,881  $ (979)      $       $ 6,917    $ (822)       $ 104,164
adjusted ^(4)                                 15,942
As a percent
of total      17.1%     7.6%     (1.4%)       30.7%   9.1%                     15.1%
sales
Three months                                                                    
ended
September 30,                                                                   
2012
Net sales     $ 390,327 $        $ 76,263     $       $ 81,937   $ —           $ 697,552
                        104,480               44,545
Inter-segment 28,186    3,261    2,748        27      1,869      (36,091)      —
sales
Total         $ 418,513 $        $ 79,011     $       $ 83,806   $ (36,091)    $ 697,552
                        107,741               44,572
EBIT ^(1)     $ 70,320  $ 6,641  $ 1,346      $ 7,587 $ 7,739    $ (2,620)     $ 91,013
As a percent
of total      16.8%     6.2%     1.7%         17.0%   9.2%                     13.0%
sales
Special items $ 477     $ 1,874  $ 708        $ —     $ —        $ —           $ 3,059
charge ^(3)
EBIT, as      $ 70,797  $ 8,515  $ 2,054      $ 7,587 $ 7,739    $ (2,620)     $ 94,072
adjusted ^(4)
As a percent
of total      16.9%     7.9%     2.6%         17.0%   9.2%                     13.5%
sales
Nine months                                                                     
ended
September 30,                                                                   
2013
Net sales     $         $        $ 203,112    $       $ 241,766  $ —           $ 2,137,880
              1,242,736 317,674               132,592
Inter-segment 99,869    13,865   12,579       222     7,209      (133,744)     —
sales
Total         $         $        $ 215,691    $       $ 248,975  $ (133,744)   $ 2,137,880
              1,342,605 331,539               132,814
EBIT ^(1)     $ 233,553 $ 26,450 $ (3,464)    $       $ 21,411   $ (2,963)     $ 294,908
                                              19,921
As a percent
of total      17.4%     8.0%     (1.6%)       15.0%   8.6%                     13.8%
sales
Special items $ 1,109   $ 1,664  $ 5,431      $       $ —        $ —           $ 20,402
charge ^(2)                                   12,198
EBIT, as      $ 234,662 $ 28,114 $ 1,967      $       $ 21,411   $ (2,963)     $ 315,310
adjusted ^(4)                                 32,119
As a percent
of total      17.5%     8.5%     0.9%         24.2%   8.6%                     14.7%
sales
Nine months                                                                     
ended
September 30,                                                                   
2012
Net sales     $         $        $ 254,259    $       $ 260,309  $ —           $ 2,168,719
              1,187,879 344,720               121,552
Inter-segment 101,386   12,178   11,641       38      6,605      (131,848)     —
sales
Total         $         $        $ 265,900    $       $ 266,914  $ (131,848)   $ 2,168,719
              1,289,265 356,898               121,590
EBIT ^(1)     $ 216,318 $ 29,851 $ 7,344      $       $ 23,933   $ (6,882)     $ 282,655
                                              12,091
As a percent
of total      16.8%     8.4%     2.8%         9.9%    9.0%                     13.0%
sales
Special items $ 554     $ 2,466  $ 1,297      $ 1,381 $ —        $ —           $ 5,698
charge ^(3)
EBIT, as      $ 216,872 $ 32,317 $ 8,641      $       $ 23,933   $ (6,882)     $ 288,353
adjusted ^(4)                                 13,472
As a percent
of total      16.8%     9.1%     3.2%         11.1%   9.0%                     13.3%
sales
(1)  EBIT is defined as Operating income plus Equity earnings in affiliates and Other
income.
(2)  Special items in the three and nine months ended September 30, 2013 include net
rationalization and asset impairment charges. The nine months ended September 30, 2013
special charges also include the impact of the devaluation of the Venezuelan currency.
(3)  Special items in the three and nine months ended September 30, 2012 include net
rationalization and asset impairment charges. The nine months ended September 30, 2012
special charges also include an unfavorable adjustment due to a change in Venezuelan labor
law, which provides for increased employee severance obligations.
(4)  The primary profit measure used by management to assess segment 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 September 30th Change in Net Sales by Segment
                                                                      
                           Change in Net Sales due to:                
                 Net Sales                                 Foreign   Net Sales
                 2012       Volume   Acquisitions  Price   Exchange  2013
Operating                                                             
Segments
North America    $ 390,327 $ (921)  $ 15,258      $ 848    $ (1,399) $ 404,113
Welding
Europe Welding   104,480   (8,613)  —             265      2,390     98,522
Asia Pacific     76,263    (9,648)  —             (989)    (1,792)   63,834
Welding
South America    44,545    1,807    —             7,867    (2,504)   51,715
Welding
The Harris       81,937    (20)     —             (7,606)  (620)     73,691
Products Group
Consolidated     $ 697,552 $        $ 15,258      $ 385    $ (3,925) $ 691,875
                           (17,395)
% Change                                                              
North America              (0.2%)   3.9%          0.2%     (0.4%)    3.5%
Welding
Europe Welding             (8.2%)   —             0.3%     2.3%      (5.7%)
Asia Pacific               (12.7%)  —             (1.3%)   (2.3%)    (16.3%)
Welding
South America              4.1%     —             17.7%    (5.6%)    16.1%
Welding
The Harris                 —        —             (9.3%)   (0.8%)    (10.1%)
Products Group
Consolidated               (2.5%)   2.2%          0.1%     (0.6%)    (0.8%)
                                                                      
                                                                      
Nine Months Ended September 30th Change in Net Sales by Segment
                                                                      
                           Change in Net Sales due to:                
                 Net Sales                                 Foreign   Net Sales
                 2012       Volume   Acquisitions  Price   Exchange  2013
Operating                                                             
Segments
North America    $         $        $ 78,472      $ 7,478  $ (2,251) $
Welding          1,187,879 (28,842)                                  1,242,736
Europe Welding   344,720   (23,244) —             (2,922)  (880)     317,674
Asia Pacific     254,259   (44,970) —             (3,973)  (2,204)   203,112
Welding
South America    121,552   1,546    —             15,864   (6,370)   132,592
Welding
The Harris       260,309   (1,830)  —             (14,421) (2,292)   241,766
Products Group
Consolidated     $         $        $ 78,472      $ 2,026  $         $
                 2,168,719 (97,340)                        (13,997)  2,137,880
% Change                                                              
North America              (2.4%)   6.6%          0.6%     (0.2%)    4.6%
Welding
Europe Welding             (6.7%)   —             (0.8%)   (0.3%)    (7.8%)
Asia Pacific               (17.7%)  —             (1.6%)   (0.9%)    (20.1%)
Welding
South America              1.3%     —             13.1%    (5.2%)    9.1%
Welding
The Harris                 (0.7%)   —             (5.5%)   (0.9%)    (7.1%)
Products Group
Consolidated               (4.5%)   3.6%          0.1%     (0.6%)    (1.4%)

CONTACT: Investor Relations:
         Amanda Butler (216) 383-2534
         Amanda_Butler@lincolnelectric.com

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