• Lincoln Electric Reports Second Quarter 2021 Results

    Source: Nasdaq GlobeNewswire / 27 Jul 2021 06:30:01   America/Chicago


     
    Second Quarter 2021 Highlights
    • Net sales increase 39.9% to $826.5 million on 36.0% higher organic sales
       
    • Operating income margin of 14.7%; Adjusted operating income margin of 15.1%
       
    • EPS increases 255.6% to record $1.60; Adjusted EPS increases 108.8% to record $1.67
       
    • Strong cash flow from operations of $100.0 million
       
    • ROIC increases 280 basis points to 21.4%

    CLEVELAND, July 27, 2021 (GLOBE NEWSWIRE) -- Lincoln Electric Holdings, Inc. (the “Company”) (Nasdaq: LECO) today reported second quarter 2021 net income of $96.1 million, or diluted earnings per share (EPS) of $1.60, which includes special item after-tax charges of $4.5 million, or $0.07 EPS. This compares with prior year period net income of $27.0 million, or $0.45 EPS, which included special item after-tax charges of $21.0 million, or $0.35 EPS. Excluding these items, second quarter 2021 Adjusted net income was $100.6 million, or $1.67 Adjusted EPS. This compares with Adjusted net income of $48.0 million, or $0.80 Adjusted EPS in the prior year period.

    Second quarter 2021 sales increased 39.9% to $826.5 million from a 36.0% increase in organic sales, 3.3% favorable foreign exchange and a 0.6% benefit from acquisitions. Operating income for the second quarter 2021 was $121.8 million, or 14.7% of sales, including special item charges of $3.3 million. This compares with operating income of $39.8 million, or 6.7% of sales, in the prior year period. Excluding special items, Adjusted operating income was $125.1 million, or 15.1% of sales, as compared with $63.0 million, or 10.7% of sales, in the prior year period.

    “We achieved record second quarter earnings performance while servicing accelerating demand and improving productivity in a challenging operating environment,” said Christopher L. Mapes, Chairman, President and Chief Executive Officer. “The team has done a superb job working through supply chain constraints and mitigating inflationary headwinds, which we expect will continue through 2021.” Mapes continued, “With 80% of our revenue driven by growing end markets, we are accelerating our investments in growth and operational excellence to deliver superior value to our stakeholders through this cycle.”

    Six Months 2021 Summary

    Net income for the six months ended June 30, 2021 was $170.3 million, or $2.83 EPS. This compares with $82.6 million, or $1.37 EPS, in the comparable 2020 period. Reported EPS includes special item after-tax charges of $13.1 million or $0.21 EPS, as compared with special item after-tax net charges of $26.3 million, or $0.44 EPS in the prior year period. Excluding these items, adjusted net income for the six months ended June 30, 2021 increased 68.4% to $183.4 million, or $3.04 EPS, compared with $108.9 million, or $1.81 EPS, in the comparable 2020 period.

    Sales increased 22.5% to $1.6 billion in the six months ended June 30, 2021 from a 20.0% increase in organic sales, 2.3% favorable foreign exchange and a 0.3% benefit from acquisitions. Operating income for the six months ended June 30, 2021 was $225.8 million, or 14.3% of sales. This compares with operating income of $120.8 million, or 9.3% of sales, in the comparable 2020 period. Excluding special items, adjusted operating income was $234.3 million, or 14.8% of sales, as compared with $151.4 million, or 11.7% of sales, in the comparable 2020 period.

    Webcast Information

    A conference call to discuss second quarter 2021 financial results will be webcast live today, July 27, 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 9053554. Telephone participants are asked to dial in 10 - 15 minutes prior to the start of the conference call.

    Financial results for the second 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 June 30,  Prior Year 
      2021 % of Sales    2020     % of Sales $ % 
    Net sales $826,454  100.0%$590,727  100.0%$235,727  39.9 %
    Cost of goods sold  552,445  66.8% 401,349  67.9% (151,096) (37.6)%
    Gross profit  274,009  33.2% 189,378  32.1% 84,631  44.7 %
    Selling, general & administrative expenses  151,557  18.3% 126,376  21.4% (25,181) (19.9)%
    Rationalization and asset impairment charges  630  0.1% 23,238  3.9% 22,608  97.3 %
    Operating income  121,822  14.7% 39,764  6.7% 82,058  206.4 %
    Interest expense, net  5,663  0.7% 5,881  1.0% 218  3.7 %
    Other income (expense)  1,702  0.2% (203) —  1,905  938.4 %
    Income before income taxes  117,861  14.3% 33,680  5.7% 84,181  249.9 %
    Income taxes  21,581  2.6% 6,667  1.1% (14,914) (223.7)%
    Effective tax rate  18.3%    19.8 %    1.5 %   
    Net income including non-controlling interests  96,280  11.6% 27,013  4.6% 69,267  256.4 %
    Non-controlling interests in subsidiaries’ income (loss)  175  —  17  —  158  929.4 %
    Net income $96,105  11.6%$26,996  4.6%$69,109  256.0 %
                      
    Basic earnings per share $1.62    $0.45    $1.17  260.0 %
    Diluted earnings per share $1.60    $0.45    $1.15  255.6 %
    Weighted average shares (basic)  59,464     59,354            
    Weighted average shares (diluted)  60,164     59,831           


                     
                      Fav (Unfav) to 
      Six Months Ended June 30,  Prior Year 
      2021 % of Sales    2020 % of Sales    $ % 
    Net sales $1,583,475 100.0% $1,292,718 100.0% $290,757  22.5 % 
    Cost of goods sold  1,055,699 66.7%  866,018 67.0%  (189,681) (21.9)% 
    Gross profit  527,776 33.3%  426,700 33.0%  101,076  23.7 % 
    Selling, general & administrative expenses  297,233 18.8%  276,103 21.4%  (21,130) (7.7)% 
    Rationalization and asset impairment charges  4,793 0.3%  29,759 2.3%  24,966  83.9 % 
    Operating income  225,750 14.3%  120,838 9.3%  104,912  86.8 % 
    Interest expense, net  11,022 0.7%  11,339 0.9%  317  2.8 % 
    Other income (expense)  286 —  106 —  180  169.8 % 
    Income before income taxes  215,014 13.6%  109,605 8.5%  105,409  96.2 % 
    Income taxes  44,601 2.8%  27,037 2.1%  (17,564) (65.0)% 
    Effective tax rate  20.7%   24.7%    4.0 %   
    Net income including non-controlling interests  170,413 10.8%  82,568 6.4%  87,845  106.4 % 
    Non-controlling interests in subsidiaries’ income (loss)  131 —  10 —  121  1,210.0 % 
    Net income $170,282 10.8% $82,558 6.4% $87,724  106.3 % 
                     
    Basic earnings per share $2.86   $1.38   $1.48  107.2 % 
    Diluted earnings per share $2.83   $1.37   $1.46  106.6 % 
    Weighted average shares (basic)  59,553    59,769           
    Weighted average shares (diluted)  60,229    60,300           



    Lincoln Electric Holdings, Inc.
    Financial Highlights
    (In thousands)
    (Unaudited)

    Balance Sheet Highlights

            
    Selected Consolidated Balance Sheet Data    June 30, 2021    December 31, 2020 
    Cash and cash equivalents $190,884 $257,279 
    Accounts receivable, net  457,454  373,487 
    Inventories  477,677  381,258 
    Total current assets  1,237,940  1,112,343 
    Property, plant and equipment, net  513,686  522,092 
    Total assets  2,512,726  2,314,453 
    Trade accounts payable  317,771  256,530 
    Total current liabilities  696,020  549,449 
    Short-term debt (1)  10,435  2,734 
    Long-term debt, less current portion  718,137  715,456 
    Total equity  859,623  790,250 
            
    Operating Working Capital June 30, 2021 December 31, 2020 
    Average operating working capital to Net sales (2)  17.2%   17.4%
            
    Invested Capital June 30, 2021 December 31, 2020 
    Short-term debt (1) $10,435 $2,734 
    Long-term debt, less current portion  718,137  715,456 
    Total debt  728,572  718,190 
    Total equity  859,623  790,250 
    Invested capital $1,588,195 $1,508,440 
            
    Total debt / invested capital  45.9%   47.6%

    (1) Includes current portion of long-term debt.

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

    Lincoln Electric Holdings, Inc.
    Financial Highlights
    (In thousands, except per share amounts)
    (Unaudited)

     Non-GAAP Financial Measures

                   
       Three Months Ended June 30,   Six Months Ended June 30,  
      2021  2020   2021  2020  
    Operating income as reported $121,822  $39,764   $225,750  $120,838  
    Special items (pre-tax):                  
    Rationalization and asset impairment charges (2)  630   23,238    4,793   29,759  
    Acquisition transaction costs (3)  810   —    1,923   —  
    Amortization of step up in value of acquired inventories (4)  1,841   —    1,841   806  
    Adjusted operating income (1) $125,103  $63,002   $234,307  $151,403  
    As a percent of total sales  15.1 % 10.7 %  14.8 % 11.7 %
                   
    Net income as reported $96,105  $26,996   $170,282  $82,558  
    Special items:                  
    Rationalization and asset impairment charges (2)  630   23,238    4,793   29,759  
    Acquisition transaction costs (3)  810   —    1,923   —  
    Pension settlement charges (5)  1,650   3,334    6,536   3,334  
    Amortization of step up in value of acquired inventories (4)  1,841   —    1,841   806  
    Tax effect of Special items (6)  (433)  (5,576)   (1,994)  (7,552) 
    Adjusted net income (1)  100,603   47,992    183,381   108,905  
    Non-controlling interests in subsidiaries’ income (loss)  175   17    131   10  
    Interest expense, net  5,663   5,881    11,022   11,339  
    Income taxes as reported  21,581   6,667    44,601   27,037  
    Tax effect of Special items (6)  433   5,576    1,994   7,552  
    Adjusted EBIT (1) $128,455  $66,133   $241,129  $154,843  
                   
    Effective tax rate as reported  18.3 % 19.8 %  20.7 % 24.7 %
    Net special item tax impact  (0.4)% 0.5 %  (0.5)% (0.6)%
    Adjusted effective tax rate (1)  17.9 % 20.3 %  20.2 % 24.1 %
                   
    Diluted earnings per share as reported $1.60  $0.45   $2.83  $1.37  
    Special items per share  0.07   0.35    0.21   0.44  
    Adjusted diluted earnings per share (1) $1.67  $0.80   $3.04  $1.81  
                   
    Weighted average shares (diluted)  60,164   59,831    60,229   60,300  
    1. Adjusted operating income, Adjusted net income, Adjusted EBIT, Adjusted effective tax rate and Adjusted diluted earnings per share are non-GAAP financial measures. Refer to Non-GAAP Information section.
    2. Primarily related to severance, gains or losses on the disposal of assets and asset impairments of long-lived assets.
    3. Related to an acquisition and are included in Selling, general & administrative expenses.
    4. Related to acquisitions and are included in Cost of goods sold.
    5. Related to lump sum pension payments and are included in Other income (expense).
    6. Includes the net tax impact of Special items recorded during the respective periods.

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

    Lincoln Electric Holdings, Inc.
    Financial Highlights
    (In thousands, except per share amounts)
    (Unaudited)

    Non-GAAP Financial Measures

            
         Twelve Months Ended June 30,  
    Return on Invested Capital    2021     2020  
    Net income as reported $293,839  $218,735  
    Rationalization and asset impairment charges  20,502   40,105  
    Acquisition transaction costs  1,923   —  
    Pension settlement charges  11,321   3,334  
    Amortization of step up in value of acquired inventories  1,841   2,415  
    Gain on change in control  —   (7,601) 
    Tax effect of Special items (2)  (5,036)  (9,374) 
    Adjusted net income (1) $324,390  $247,614  
    Plus: Interest expense, net of tax of $5,843 and $6,439 in 2021 and 2020, respectively  17,368   19,348  
    Less: Interest income, net of tax of $389 and $563 in 2021 and 2020, respectively  1,166   1,691  
    Adjusted net income before tax-effected interest $340,592  $265,271  
            
    Invested Capital June 30, 2021 June 30, 2020 
    Short-term debt $10,435  $49,597  
    Long-term debt, less current portion  718,137   715,817  
    Total debt  728,572   765,414  
    Total equity  859,623   660,111  
    Invested capital $1,588,195  $1,425,525  
            
    Return on invested capital (1)  21.4 %   18.6 %


           
         Twelve Months Ended June 30, 
    Total Debt / EBITDA 2021 2020
    Net income as reported $293,839 $218,735
    Income taxes       75,460       62,955
    Interest expense, net  21,656  23,533
    Depreciation and amortization  77,922  83,313
    EBITDA (1) $468,877 $388,536
           
      June 30, 2021 June 30, 2020
    Total debt $728,572 $765,414
           
    Total debt / EBITDA  1.55  1.97
    1. Adjusted net income, Return on invested capital and EBITDA are non-GAAP financial measures. Refer to Non-GAAP Information section.
    2. Includes the net tax impact of Special items recorded during the respective periods.

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

    Lincoln Electric Holdings, Inc.
    Financial Highlights
    (In thousands, except per share amounts)
    (Unaudited)

    Condensed Consolidated Statements of Cash Flows

          
     Three Months Ended June 30, 
     2021  2020 
    OPERATING ACTIVITIES:       
    Net income$96,105  $26,996 
    Non-controlling interests in subsidiaries’ income (loss) 175   17 
    Net income including non-controlling interests 96,280   27,013 
    Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities:       
    Rationalization and asset impairment net (gains) charges (1,434)  22,141 
    Depreciation and amortization 19,390   20,050 
    Equity earnings in affiliates, net (114)  (81)
    Other non-cash items, net (4,123)  (1,106)
    Changes in operating assets and liabilities, net of effects from acquisitions:       
    (Increase) decrease in accounts receivable (21,776)  49,364 
    Increase in inventories (40,618)  (12,977)
    Increase (decrease) in trade accounts payable 20,950   (23,439)
    Net change in other current assets and liabilities 24,950   20,717 
    Net change in other long-term assets and liabilities 6,467   2,359 
    NET CASH PROVIDED BY OPERATING ACTIVITIES 99,972   104,041 
          
    INVESTING ACTIVITIES:       
    Capital expenditures (17,832)  (13,183)
    Acquisition of businesses, net of cash acquired (83,723)  — 
    Proceeds from sale of property, plant and equipment 1,973   118 
    NET CASH USED BY INVESTING ACTIVITIES (99,582)  (13,065)
          
    FINANCING ACTIVITIES:       
    Net change in borrowings (144)  (82,682)
    Proceeds from exercise of stock options 2,892   955 
    Purchase of shares for treasury (25,229)  (3,213)
    Cash dividends paid to shareholders (30,380)  (29,139)
    Other financing activities (763)  — 
    NET CASH USED BY FINANCING ACTIVITIES (53,624)  (114,079)
          
    Effect of exchange rate changes on Cash and cash equivalents 1,992   2,783 
    DECREASE IN CASH AND CASH EQUIVALENTS (51,242)  (20,320)
    Cash and cash equivalents at beginning of period 242,126   163,375 
    Cash and cash equivalents at end of period$190,884  $143,055 
          
    Cash dividends paid per share$0.51  $0.49 



    Lincoln Electric Holdings, Inc.
    Financial Highlights
    (In thousands, except per share amounts)
    (Unaudited)

         Six Months Ended June 30, 
      2021  2020 
    OPERATING ACTIVITIES:        
    Net income $170,282  $82,558 
    Non-controlling interests in subsidiaries’ income (loss)  131   10 
    Net income including non-controlling interests  170,413   82,568 
    Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities:        
    Rationalization and asset impairment net (gains) charges  (1,374)  21,905 
    Depreciation and amortization  38,508   41,078 
    Equity earnings in affiliates, net  (291)  (243)
    Other non-cash items, net  (4,820)  (5,288)
    Changes in operating assets and liabilities, net of effects from acquisitions:        
    (Increase) decrease in accounts receivable  (87,571)  23,666 
    Increase in inventories  (83,186)  (30,378)
    Increase (decrease) in trade accounts payable  63,275   (40,115)
    Net change in other current assets and liabilities  47,121   32,410 
    Net change in other long-term assets and liabilities  3,159   410 
    NET CASH PROVIDED BY OPERATING ACTIVITIES  145,234   126,013 
           
    INVESTING ACTIVITIES:        
    Capital expenditures  (27,768)  (25,011)
    Acquisition of businesses, net of cash acquired  (83,723)  — 
    Proceeds from sale of property, plant and equipment  2,557   6,218 
    Other investing activities  6,500   — 
    NET CASH USED BY INVESTING ACTIVITIES  (102,434)  (18,793)
           
    FINANCING ACTIVITIES:        
    Net change in borrowings  1,163   15,095 
    Proceeds from exercise of stock options  5,672   2,002 
    Purchase of shares for treasury  (53,688)  (112,975)
    Cash dividends paid to shareholders  (61,379)  (59,814)
    Other financing activities  (763)  — 
    NET CASH USED BY FINANCING ACTIVITIES  (108,995)  (155,692)
           
    Effect of exchange rate changes on Cash and cash equivalents  (200)  (8,036)
    DECREASE IN CASH AND CASH EQUIVALENTS  (66,395)  (56,508)
    Cash and cash equivalents at beginning of period  257,279   199,563 
    Cash and cash equivalents at end of period $190,884  $143,055 
           
    Cash dividends paid per share $1.02  $0.98 

    Lincoln Electric Holdings, Inc.
    Segment Highlights (1)
    (In thousands)
    (Unaudited)

         Americas    International     The Harris    Corporate /       
      Welding Welding Products Group Eliminations Consolidated 
    Three months ended June 30, 2021                     
    Net sales $457,468 $252,352 $116,634 $—  $826,454 
    Inter-segment sales  39,765  6,897  2,284  (48,946)  — 
    Total sales $497,233 $259,249 $118,918 $(48,946) $826,454 
                     
    Net income                $96,105 
    As a percent of total sales                 11.6%
                     
    EBIT (1) $82,484 $27,526 $18,212 $(4,698) $123,524 
    As a percent of total sales  16.6%   10.6%   15.3%      14.9%
    Special items charges (gains) (3)  1,650  2,471  —  810   4,931 
    Adjusted EBIT (2) $84,134 $29,997 $18,212 $(3,888) $128,455 
    As a percent of total sales  16.9%   11.6%   15.3%      15.5%
                     
    Three months ended June 30, 2020                     
    Net sales $333,229 $177,167 $80,331 $—  $590,727 
    Inter-segment sales  27,493  4,286  1,753  (33,532)  — 
    Total sales $360,722 $181,453 $82,084 $(33,532) $590,727 
                     
    Net income                $26,996 
    As a percent of total sales                 4.6%
                     
    EBIT (1) $20,695 $9,117 $11,713 $(1,964) $39,561 
    As a percent of total sales  5.7%   5.0%   14.3%      6.7%
    Special items charges (gains) (4)  26,007  565  —  —   26,572 
    Adjusted EBIT (2) $46,702 $9,682 $11,713 $(1,964) $66,133 
    As a percent of total sales  12.9%   5.3%   14.3%      11.2%

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

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

    (3)        Special items in 2021 reflect Rationalization and asset impairment charges of $630 in International Welding, pension settlement charges of $1,650 in Americas Welding, amortization of step up in value of acquired inventories of $1,841 in International Welding related to an acquisition and acquisition transaction costs of $810 in Corporate/Eliminations related to an acquisition.

    (4)        Special items in 2020 reflect Rationalization and asset impairment charges of $22,673 and $565 in Americas Welding and International Welding, respectively, and pension settlement charges of $3,334 in Americas Welding.

    Lincoln Electric Holdings, Inc.
    Segment Highlights
    (In thousands)
    (Unaudited)

                     
         Americas    International    The Harris    Corporate /       
      Welding Welding Products Group Eliminations Consolidated 
    Six months ended June 30, 2021                     
    Net sales $882,710 $475,431 $225,334 $—  $1,583,475 
    Inter-segment sales  72,513  11,182  4,431  (88,126)  — 
    Total sales $955,223 $486,613 $229,765 $(88,126) $1,583,475 
                     
    Net income                $170,282 
    As a percent of total sales                 10.8%
                     
    EBIT (1) $154,661 $41,733 $36,909 $(7,267) $226,036 
    As a percent of total sales  16.2%   8.6%   16.1%      14.3%
    Special items charges (gains) (3)  6,090  7,080  —  1,923   15,093 
    Adjusted EBIT (2) $160,751 $48,813 $36,909 $(5,344) $241,129 
    As a percent of total sales  16.8%   10.0%   16.1%      15.2%
                     
    Six months ended June 30, 2020                     
    Net sales $751,764 $375,090 $165,864 $—  $1,292,718 
    Inter-segment sales  52,276  8,769  3,478  (64,523)  — 
    Total sales $804,040 $383,859 $169,342 $(64,523) $1,292,718 
                     
    Net income                $82,558 
    As a percent of total sales                 6.4%
                     
    EBIT (1) $90,207 $9,595 $24,205 $(3,063) $120,944 
    As a percent of total sales  11.2%   2.5%   14.3%      9.4%
    Special items charges (gains) (4)  27,197  6,702  —  —   33,899 
    Adjusted EBIT (2) $117,404 $16,297 $24,205 $(3,063) $154,843 
    As a percent of total sales  14.6%   4.2%   14.3%      12.0%

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

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

    (3)        Special items in 2021 reflect pension settlement charges of $6,090 and $446 in Americas Welding and International Welding, respectively, Rationalization and asset impairment charges of $4,793 in International Welding, amortization of step up in value of acquired inventories of $1,841 in International Welding and acquisition transaction costs of $1,923 in Corporate/Eliminations related to an acquisition.

    (4)        Special items in 2020 reflect Rationalization and asset impairment charges of $23,863 and $5,896 in Americas Welding and International Welding, respectively, amortization of step up in value of acquired inventories of $806 in International Welding related to an acquisition, and pension settlement charges of $3,334 in Americas Welding.

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

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

                       
           Change in Net Sales due to:          
     Net Sales          Foreign Net Sales 
     2020 Volume Acquisitions Price Exchange 2021 
    Operating Segments                        
    Americas Welding$333,229 $90,285 $— $27,330 $6,624 $457,468 
    International Welding 177,167  45,095  3,585  14,712  11,793  252,352 
    The Harris Products Group 80,331  18,421  —  16,979  903  116,634 
    Consolidated$ 590,727 $ 153,801 $ 3,585 $ 59,021 $ 19,320 $ 826,454 
                       
    % Change                        
    Americas Welding    27.1% —  8.2% 2.0% 37.3%
    International Welding    25.5% 2.0% 8.3% 6.7% 42.4%
    The Harris Products Group    22.9% —  21.1% 1.1% 45.2%
    Consolidated     26.0%  0.6%  10.0%  3.3%  39.9%

    Six Months Ended June 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 $751,764 $86,495 $— $36,395 $8,056  $882,710 
    International Welding  375,090  56,345  3,585  19,332  21,079   475,431 
    The Harris Products Group  165,864  30,062  —  29,422  (14)  225,334 
    Consolidated $ 1,292,718 $ 172,902 $ 3,585 $ 85,149 $ 29,121  $ 1,583,475 
                        
    % Change                         
    Americas Welding     11.5% —  4.8% 1.1 % 17.4%
    International Welding     15.0% 1.0% 5.2% 5.6 % 26.8%
    The Harris Products Group     18.1% —  17.7% —   35.9%
    Consolidated      13.4%  0.3%  6.6%  2.3 %  22.5%

     


    Contact

Amanda Butler
Vice President, Investor Relations & Communications
Tel: 216.383.2534
Email: Amanda_Butler@lincolnelectric.com

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