Lincoln Electric Reports Second Quarter 2014 Results
Q2 EPS $0.96, Adjusted EPS increases 11% to $1.01
CLEVELAND, July 27, 2014 /PRNewswire/ --
| Second Quarter 2014 Highlights |
|
Lincoln Electric Holdings, Inc. (the "Company") (Nasdaq: LECO) today reported second quarter 2014 net income of $77.3 million, or $0.96 per diluted share. Net income was $72.6 million, or $0.87 per diluted share, in the comparable 2013 period. Adjusted net income was $81.5 million, or $1.01 per diluted share, compared to adjusted net income of $75.7 million, or $0.91 per diluted share, in the comparable 2013 period. Adjusted net income in the second quarter of 2014 includes earnings of $0.04 per diluted share from the Company's Venezuelan operations.
Sales were relatively steady at $728.5 million in the second quarter 2014 versus $727.4 million in the comparable 2013 period. Operating income for the second quarter increased 7.7% to $112.3 million, or 15.4% of sales, from $104.3 million, or 14.3% of sales, in the comparable 2013 period. Adjusted operating income increased 8.3% to $116.6 million or 16.0% of sales, compared with $107.7 million, or 14.8% of sales in 2013. Operating income and Adjusted operating income include a $3.9 million gain, $2.5 million after-tax or $0.03 per diluted share, from an insurance settlement.
Christopher L. Mapes, Chairman, President and Chief Executive Officer stated, "We are pleased to report improving trends in our business from growth in our innovative solutions and benefits from acquisitions. We achieved a 16.0% adjusted operating income margin in the quarter, reinforcing the solid execution of our '2020 Vision and Strategy' by improving mix, operating leverage and driving continuous improvement throughout our operations. Cash returned to shareholders accelerated in the quarter and we now expect to achieve $250 million in share repurchases this year."
Net income for the six months ended June 30, 2014 was $133.8 million, or $1.65 per diluted share, compared with net income of $139.4 million, or $1.67 per diluted share, in 2013. Adjusted net income was $155.6 million, or $1.92 per diluted share, compared to adjusted net income of $152.9 million, or $1.83 per diluted share, in 2013. Adjusted net income for the six months ended June 30, 2014 includes earnings of $0.18 per diluted share from the Company's Venezuelan operations.
Sales decreased 2.2% to $1.41 billion in the six months ended June 30, 2014 versus $1.45 billion in the comparable 2013 period. This decrease reflects lower volumes and unfavorable foreign exchange translation, partially offset by acquisitions. Operating income for the six months ended June 30, 2014 remained relatively flat at $192.7 million, or 13.6% of sales, compared to $192.9 million, or 13.3% of sales, in the comparable 2013 period. Results in 2014 include charges of $21.2 million from Venezuelan foreign exchange remeasurement losses related to the adoption of a new foreign exchange mechanism in the first quarter. Adjusted operating income increased 3.7% to $214.7 million or 15.2% of sales, compared with $207.0 million, or 14.3% of sales in 2013. Operating income and Adjusted operating income include a $3.9 million gain, $2.5 million after-tax or $0.03 per diluted share, from an insurance settlement.
The Company's Board of Directors declared a quarterly cash dividend of $0.23 per share, which was paid on July 15, 2014 to holders of record on June 30, 2014. During the quarter, the Company returned $68.3 million to shareholders through the repurchase of 1,009,353 of the Company's common shares.
Webcast Information
A conference call to discuss second quarter 2014 financial results will be webcast live on Monday, July 28, 2014, 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) 344-3899 (domestic) or (315) 625-3087 (international) and use confirmation code 68746760. Telephone participants are asked to dial in 10-15 minutes prior to the start of the conference call.
Financial results for the second quarter 2014 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 48 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; interest rates; currency exchange rates and devaluations, including in highly inflationary countries such as Venezuela; 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. |
||||||||||||||||||||
| Consolidated Statements of Income |
||||||||||||||||||||
| Three months ended June 30, |
Fav (Unfav) to Prior Year |
|||||||||||||||||||
| 2014 |
% of Sales |
2013 |
% of Sales |
$ |
% |
|||||||||||||||
| Net sales |
$ |
728,531 |
100.0 |
% |
$ |
727,432 |
100.0 |
% |
$ |
1,099 |
0.2 |
% |
||||||||
| Cost of goods sold |
478,264 |
65.6 |
% |
487,094 |
67.0 |
% |
8,830 |
1.8 |
% |
|||||||||||
| Gross profit |
250,267 |
34.4 |
% |
240,338 |
33.0 |
% |
9,929 |
4.1 |
% |
|||||||||||
| Selling, general & administrative expenses |
137,156 |
18.8 |
% |
135,215 |
18.6 |
% |
(1,941) |
(1.4) |
% |
|||||||||||
| Rationalization and asset impairment charges |
836 |
0.1 |
% |
851 |
0.1 |
% |
15 |
1.8 |
% |
|||||||||||
| Operating income |
112,275 |
15.4 |
% |
104,272 |
14.3 |
% |
8,003 |
7.7 |
% |
|||||||||||
| Interest income |
924 |
0.1 |
% |
890 |
0.1 |
% |
34 |
3.8 |
% |
|||||||||||
| Equity earnings in affiliates |
1,575 |
0.2 |
% |
1,258 |
0.2 |
% |
317 |
25.2 |
% |
|||||||||||
| Other income |
1,078 |
0.1 |
% |
913 |
0.1 |
% |
165 |
18.1 |
% |
|||||||||||
| Interest expense |
(986) |
(0.1) |
% |
(799) |
(0.1) |
% |
(187) |
(23.4) |
% |
|||||||||||
| Income before income taxes |
114,866 |
15.8 |
% |
106,534 |
14.6 |
% |
8,332 |
7.8 |
% |
|||||||||||
| Income taxes |
37,577 |
5.2 |
% |
34,007 |
4.7 |
% |
(3,570) |
(10.5) |
% |
|||||||||||
| Effective tax rate |
32.7 |
% |
31.9 |
% |
(0.8) |
% |
||||||||||||||
| Net income including non-controlling interests |
77,289 |
10.6 |
% |
72,527 |
10.0 |
% |
4,762 |
6.6 |
% |
|||||||||||
| Non-controlling interests in subsidiaries' loss |
(43) |
— |
(79) |
— |
36 |
45.6 |
% |
|||||||||||||
| Net income |
$ |
77,332 |
10.6 |
% |
$ |
72,606 |
10.0 |
% |
$ |
4,726 |
6.5 |
% |
||||||||
| Basic earnings per share |
$ |
0.97 |
$ |
0.88 |
$ |
0.09 |
10.2 |
% |
||||||||||||
| Diluted earnings per share |
$ |
0.96 |
$ |
0.87 |
$ |
0.09 |
10.3 |
% |
||||||||||||
| Weighted average shares (basic) |
79,873 |
82,419 |
||||||||||||||||||
| Weighted average shares (diluted) |
80,773 |
83,411 |
||||||||||||||||||
| Six months ended June 30, |
Fav (Unfav) to Prior Year |
|||||||||||||||||||
| 2014 |
% of Sales |
2013 |
% of Sales |
$ |
% |
|||||||||||||||
| Net sales |
$ |
1,413,593 |
100.0 |
% |
$ |
1,446,005 |
100.0 |
% |
$ |
(32,412) |
(2.2) |
% |
||||||||
| Cost of goods sold |
936,990 |
66.3 |
% |
979,095 |
67.7 |
% |
42,105 |
4.3 |
% |
|||||||||||
| Gross profit |
476,603 |
33.7 |
% |
466,910 |
32.3 |
% |
9,693 |
2.1 |
% |
|||||||||||
| Selling, general & administrative expenses |
283,071 |
20.0 |
% |
272,106 |
18.8 |
% |
(10,965) |
(4.0) |
% |
|||||||||||
| Rationalization and asset impairment charges |
819 |
0.1 |
% |
1,902 |
0.1 |
% |
1,083 |
56.9 |
% |
|||||||||||
| Operating income |
192,713 |
13.6 |
% |
192,902 |
13.3 |
% |
(189) |
(0.1) |
% |
|||||||||||
| Interest income |
1,838 |
0.1 |
% |
1,916 |
0.1 |
% |
(78) |
(4.1) |
% |
|||||||||||
| Equity earnings in affiliates |
3,136 |
0.2 |
% |
2,517 |
0.2 |
% |
619 |
24.6 |
% |
|||||||||||
| Other income |
2,161 |
0.2 |
% |
1,627 |
0.1 |
% |
534 |
32.8 |
% |
|||||||||||
| Interest expense |
(2,556) |
(0.2) |
% |
(1,749) |
(0.1) |
% |
(807) |
(46.1) |
% |
|||||||||||
| Income before income taxes |
197,292 |
14.0 |
% |
197,213 |
13.6 |
% |
79 |
— |
||||||||||||
| Income taxes |
63,579 |
4.5 |
% |
57,843 |
4.0 |
% |
(5,736) |
(9.9) |
% |
|||||||||||
| Effective tax rate |
32.2 |
% |
29.3 |
% |
(2.9) |
% |
||||||||||||||
| Net income including non-controlling interests |
133,713 |
9.5 |
% |
139,370 |
9.6 |
% |
(5,657) |
(4.1) |
% |
|||||||||||
| Non-controlling interests in subsidiaries' loss |
(72) |
— |
(42) |
— |
(30) |
(71.4) |
% |
|||||||||||||
| Net income |
$ |
133,785 |
9.5 |
% |
$ |
139,412 |
9.6 |
% |
$ |
(5,627) |
(4.0) |
% |
||||||||
| Basic earnings per share |
$ |
1.67 |
$ |
1.69 |
$ |
(0.02) |
(1.2) |
% |
||||||||||||
| Diluted earnings per share |
$ |
1.65 |
$ |
1.67 |
$ |
(0.02) |
(1.2) |
% |
||||||||||||
| Weighted average shares (basic) |
80,260 |
82,569 |
||||||||||||||||||
| Weighted average shares (diluted) |
81,194 |
83,606 |
||||||||||||||||||
| Lincoln Electric Holdings, Inc. |
|||||||||||||
| Non-GAAP Financial Measures |
|||||||||||||
| Three months ended June 30, |
Six months ended June 30, |
||||||||||||
| 2014 |
2013 |
2014 |
2013 |
||||||||||
| Operating income as reported |
$ |
112,275 |
$ |
104,272 |
$ |
192,713 |
$ |
192,902 |
|||||
| Special items (pre-tax): |
|||||||||||||
| Rationalization and asset impairment charges (1) |
836 |
851 |
819 |
1,902 |
|||||||||
| Venezuela foreign exchange losses (2) |
3,468 |
2,538 |
21,133 |
12,198 |
|||||||||
| Adjusted operating income (3) |
$ |
116,579 |
$ |
107,661 |
$ |
214,665 |
$ |
207,002 |
|||||
| Net income as reported |
$ |
77,332 |
$ |
72,606 |
$ |
133,785 |
$ |
139,412 |
|||||
| Special items (after-tax): |
|||||||||||||
| Rationalization and asset impairment charges (1) |
698 |
579 |
691 |
1,252 |
|||||||||
| Venezuela foreign exchange losses (2) |
3,468 |
2,538 |
21,133 |
12,198 |
|||||||||
| Adjusted net income (3) |
$ |
81,498 |
$ |
75,723 |
$ |
155,609 |
$ |
152,862 |
|||||
| Diluted earnings per share as reported |
$ |
0.96 |
$ |
0.87 |
$ |
1.65 |
$ |
1.67 |
|||||
| Special items |
0.05 |
0.04 |
0.27 |
0.16 |
|||||||||
| Adjusted diluted earnings per share (3) |
$ |
1.01 |
$ |
0.91 |
$ |
1.92 |
$ |
1.83 |
|||||
| Weighted average shares (diluted) |
80,773 |
83,411 |
81,194 |
83,606 |
|||||||||
| (1) |
The three and six months ended June 30, 2014 and 2013 include net charges associated with 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) |
The three and six months ended June 30, 2014 represents the impact of the Venezuelan remeasurement loss related to the adoption of a new foreign exchange mechanism in the first quarter. The three and six months ended June 30, 2013 represents the impact of the devaluation of the Venezuelan currency. |
| (3) |
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. |
|||||||
| Balance Sheet Highlights |
|||||||
| Selected Consolidated Balance Sheet Data |
June 30, 2014 |
December 31, 2013 |
|||||
| Cash and cash equivalents |
$ |
204,285 |
$ |
299,825 |
|||
| Total current assets |
1,105,739 |
1,130,775 |
|||||
| Property, plant and equipment, net |
481,861 |
484,005 |
|||||
| Total assets |
2,144,839 |
2,151,867 |
|||||
| Total current liabilities |
464,489 |
456,917 |
|||||
| Short-term debt (1) |
6,908 |
15,296 |
|||||
| Long-term debt |
1,159 |
3,791 |
|||||
| Total equity |
1,521,473 |
1,530,688 |
|||||
| Net Operating Working Capital |
June 30, 2014 |
December 31, 2013 |
|||||
| Accounts receivable |
$ |
407,223 |
$ |
367,134 |
|||
| Inventory |
368,027 |
349,963 |
|||||
| Trade accounts payable |
196,929 |
212,799 |
|||||
| Net operating working capital |
$ |
578,321 |
$ |
504,298 |
|||
| Net operating working capital to net sales (2) |
19.8 |
% |
17.6 |
% |
|||
| Invested Capital |
June 30, 2014 |
December 31, 2013 |
|||||
| Short-term debt (1) |
$ |
6,908 |
$ |
15,296 |
|||
| Long-term debt |
1,159 |
3,791 |
|||||
| Total debt |
8,067 |
19,087 |
|||||
| Total equity |
1,521,473 |
1,530,688 |
|||||
| Invested capital |
$ |
1,529,540 |
$ |
1,549,775 |
|||
| Total debt / invested capital |
0.5 |
% |
1.2 |
% |
|||
| Return on invested capital (3) |
18.9 |
% |
18.9 |
% |
|||
| (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. |
|||||||
| Condensed Consolidated Statements of Cash Flows |
Three months ended June 30, |
||||||
| 2014 |
2013 |
||||||
| OPERATING ACTIVITIES: |
|||||||
| Net income |
$ |
77,332 |
$ |
72,606 |
|||
| Non-controlling interests in subsidiaries' loss |
(43) |
(79) |
|||||
| Net income including non-controlling interests |
77,289 |
72,527 |
|||||
| Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities: |
|||||||
| Rationalization and asset impairment charges |
894 |
240 |
|||||
| Depreciation and amortization |
17,969 |
17,158 |
|||||
| Equity earnings in affiliates, net |
(701) |
(446) |
|||||
| Pension expense |
2,676 |
7,320 |
|||||
| Pension contributions and payments |
(2,083) |
(26,030) |
|||||
| Other non-cash items, net |
(3,325) |
9,991 |
|||||
| Changes in operating assets and liabilities, net of effects from acquisitions: |
|||||||
| Decrease in accounts receivable |
544 |
23,218 |
|||||
| (Increase) decrease in inventories |
(2,298) |
4,026 |
|||||
| Decrease in trade accounts payable |
(3,341) |
(20,108) |
|||||
| Net change in other current assets and liabilities |
21,833 |
21,439 |
|||||
| Net change in other long-term assets and liabilities |
(4,483) |
(2,136) |
|||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES |
104,974 |
107,199 |
|||||
| INVESTING ACTIVITIES: |
|||||||
| Capital expenditures |
(25,441) |
(15,910) |
|||||
| Acquisition of businesses, net of cash acquired |
— |
(4,127) |
|||||
| Proceeds from sale of property, plant and equipment |
4,443 |
487 |
|||||
| Other investing activities |
205 |
(4,217) |
|||||
| NET CASH USED BY INVESTING ACTIVITIES |
(20,793) |
(23,767) |
|||||
| FINANCING ACTIVITIES: |
|||||||
| Net change in borrowings |
(2,087) |
(1,263) |
|||||
| Proceeds from exercise of stock options |
1,054 |
3,546 |
|||||
| Excess tax benefits from stock-based compensation |
826 |
1,476 |
|||||
| Purchase of shares for treasury |
(68,312) |
(56,897) |
|||||
| Cash dividends paid to shareholders |
(18,496) |
(16,580) |
|||||
| Transactions with non-controlling interests |
— |
(2,809) |
|||||
| NET CASH USED BY FINANCING ACTIVITIES |
(87,015) |
(72,527) |
|||||
| Effect of exchange rate changes on Cash and cash equivalents |
1,732 |
(2,971) |
|||||
| (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |
(1,102) |
7,934 |
|||||
| Cash and cash equivalents at beginning of period |
205,387 |
248,455 |
|||||
| Cash and cash equivalents at end of period |
$ |
204,285 |
$ |
256,389 |
|||
| Cash dividends paid per share |
$ |
0.23 |
$ |
0.20 |
|||
| Lincoln Electric Holdings, Inc. |
|||||||
| Condensed Consolidated Statements of Cash Flows |
Six months ended June 30, |
||||||
| 2014 |
2013 |
||||||
| OPERATING ACTIVITIES: |
|||||||
| Net income |
$ |
133,785 |
$ |
139,412 |
|||
| Non-controlling interests in subsidiaries' loss |
(72) |
(42) |
|||||
| Net income including non-controlling interests |
133,713 |
139,370 |
|||||
| Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities: |
|||||||
| Rationalization and asset impairment charges |
859 |
354 |
|||||
| Depreciation and amortization |
35,900 |
34,555 |
|||||
| Equity earnings in affiliates, net |
(1,497) |
(882) |
|||||
| Pension expense |
5,476 |
14,935 |
|||||
| Pension contributions and payments |
(24,164) |
(81,351) |
|||||
| Other non-cash items, net |
20,659 |
24,336 |
|||||
| Changes in operating assets and liabilities, net of effects from acquisitions: |
|||||||
| Increase in accounts receivable |
(43,341) |
(43,367) |
|||||
| Increase in inventories |
(17,455) |
(12,308) |
|||||
| Decrease in trade accounts payable |
(15,449) |
(11,840) |
|||||
| Net change in other current assets and liabilities |
27,380 |
25,621 |
|||||
| Net change in other long-term assets and liabilities |
(3,476) |
(2,372) |
|||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES |
118,605 |
87,051 |
|||||
| INVESTING ACTIVITIES: |
|||||||
| Capital expenditures |
(39,947) |
(31,048) |
|||||
| Acquisition of businesses, net of cash acquired |
(892) |
(4,676) |
|||||
| Proceeds from sale of property, plant and equipment |
5,509 |
592 |
|||||
| Other investing activities |
778 |
(4,217) |
|||||
| NET CASH USED BY INVESTING ACTIVITIES |
(34,552) |
(39,349) |
|||||
| FINANCING ACTIVITIES: |
|||||||
| Net change in borrowings |
(10,143) |
(2,755) |
|||||
| Proceeds from exercise of stock options |
4,010 |
13,204 |
|||||
| Excess tax benefits from stock-based compensation |
2,478 |
5,465 |
|||||
| Purchase of shares for treasury |
(119,333) |
(69,677) |
|||||
| Cash dividends paid to shareholders |
(37,119) |
(16,580) |
|||||
| Transactions with non-controlling interests |
(2,330) |
(2,809) |
|||||
| NET CASH USED BY FINANCING ACTIVITIES |
(162,437) |
(73,152) |
|||||
| Effect of exchange rate changes on Cash and cash equivalents |
(17,156) |
(4,625) |
|||||
| DECREASE IN CASH AND CASH EQUIVALENTS |
(95,540) |
(30,075) |
|||||
| Cash and cash equivalents at beginning of period |
299,825 |
286,464 |
|||||
| Cash and cash equivalents at end of period |
$ |
204,285 |
$ |
256,389 |
|||
| Cash dividends paid per share |
$ |
0.46 |
$ |
0.20 |
|||
| Lincoln Electric Holdings, Inc. |
|||||||||||||||||||||||||||
| North America Welding |
Europe Welding |
Asia Pacific Welding |
South America Welding |
The Harris Products Group |
Corporate / Eliminations |
Consolidated |
|||||||||||||||||||||
| Three months ended June 30, 2014 |
|||||||||||||||||||||||||||
| Net sales |
$ |
429,490 |
$ |
115,574 |
$ |
66,997 |
$ |
39,051 |
$ |
77,419 |
$ |
728,531 |
|||||||||||||||
| Inter-segment sales |
33,360 |
5,494 |
3,600 |
35 |
2,262 |
(44,751) |
— |
||||||||||||||||||||
| Total |
$ |
462,850 |
$ |
121,068 |
$ |
70,597 |
$ |
39,086 |
$ |
79,681 |
$ |
(44,751) |
$ |
728,531 |
|||||||||||||
| EBIT (1) |
$ |
91,216 |
$ |
13,934 |
$ |
473 |
$ |
1,527 |
$ |
7,178 |
$ |
600 |
$ |
114,928 |
|||||||||||||
| As a percent of total sales |
19.7 |
% |
11.5 |
% |
0.7 |
% |
3.9 |
% |
9.0 |
% |
15.8 |
% |
|||||||||||||||
| Special items (gain) charge (2) |
$ |
(21) |
$ |
965 |
$ |
(108) |
$ |
3,468 |
$ |
— |
$ |
— |
$ |
4,304 |
|||||||||||||
| EBIT, as adjusted (4) |
$ |
91,195 |
$ |
14,899 |
$ |
365 |
$ |
4,995 |
$ |
7,178 |
$ |
600 |
$ |
119,232 |
|||||||||||||
| As a percent of total sales |
19.7 |
% |
12.3 |
% |
0.5 |
% |
12.8 |
% |
9.0 |
% |
16.4 |
% |
|||||||||||||||
| Three months ended June 30, 2013 |
|||||||||||||||||||||||||||
| Net sales |
$ |
419,069 |
$ |
108,661 |
$ |
69,239 |
$ |
44,503 |
$ |
85,960 |
$ |
— |
$ |
727,432 |
|||||||||||||
| Inter-segment sales |
35,529 |
4,330 |
4,374 |
51 |
2,674 |
(46,958) |
— |
||||||||||||||||||||
| Total |
$ |
454,598 |
$ |
112,991 |
$ |
73,613 |
$ |
44,554 |
$ |
88,634 |
$ |
(46,958) |
$ |
727,432 |
|||||||||||||
| EBIT (1) |
$ |
82,511 |
$ |
9,457 |
$ |
143 |
$ |
8,527 |
$ |
7,343 |
$ |
(1,538) |
$ |
106,443 |
|||||||||||||
| As a percent of total sales |
18.2 |
% |
8.4 |
% |
0.2 |
% |
19.1 |
% |
8.3 |
% |
14.6 |
% |
|||||||||||||||
| Special items (gain) charge (3) |
$ |
266 |
$ |
75 |
$ |
510 |
$ |
2,538 |
$ |
— |
$ |
— |
$ |
3,389 |
|||||||||||||
| EBIT, as adjusted (4) |
$ |
82,777 |
$ |
9,532 |
$ |
653 |
$ |
11,065 |
$ |
7,343 |
$ |
(1,538) |
$ |
109,832 |
|||||||||||||
| As a percent of total sales |
18.2 |
% |
8.4 |
% |
0.9 |
% |
24.8 |
% |
8.3 |
% |
15.1 |
% |
|||||||||||||||
| Six months ended June 30, 2014 |
|||||||||||||||||||||||||||
| Net sales |
$ |
831,396 |
$ |
220,980 |
$ |
128,283 |
$ |
83,044 |
$ |
149,890 |
$ |
— |
$ |
1,413,593 |
|||||||||||||
| Inter-segment sales |
66,303 |
11,354 |
8,049 |
64 |
4,380 |
(90,150) |
— |
||||||||||||||||||||
| Total |
$ |
897,699 |
$ |
232,334 |
$ |
136,332 |
$ |
83,108 |
$ |
154,270 |
$ |
(90,150) |
$ |
1,413,593 |
|||||||||||||
| EBIT (1) |
$ |
162,627 |
$ |
23,187 |
$ |
(158) |
$ |
(4,373) |
$ |
13,236 |
$ |
3,491 |
$ |
198,010 |
|||||||||||||
| As a percent of total sales |
18.1 |
% |
10.0 |
% |
(0.1) |
% |
(5.3) |
% |
8.6 |
% |
14.0 |
% |
|||||||||||||||
| Special items (gain) charge (2) |
$ |
(68) |
$ |
1,004 |
$ |
(117) |
$ |
21,133 |
$ |
— |
$ |
— |
$ |
21,952 |
|||||||||||||
| EBIT, as adjusted (4) |
$ |
162,559 |
$ |
24,191 |
$ |
(275) |
$ |
16,760 |
$ |
13,236 |
$ |
3,491 |
$ |
219,962 |
|||||||||||||
| As a percent of total sales |
18.1 |
% |
10.4 |
% |
(0.2) |
% |
20.2 |
% |
8.6 |
% |
15.6 |
% |
|||||||||||||||
| Six months ended June 30, 2013 |
|||||||||||||||||||||||||||
| Net sales |
$ |
838,623 |
$ |
219,152 |
$ |
139,278 |
$ |
80,877 |
$ |
168,075 |
$ |
— |
$ |
1,446,005 |
|||||||||||||
| Inter-segment sales |
64,514 |
8,609 |
8,758 |
71 |
4,898 |
(86,850) |
— |
||||||||||||||||||||
| Total |
$ |
903,137 |
$ |
227,761 |
$ |
148,036 |
$ |
80,948 |
$ |
172,973 |
$ |
(86,850) |
$ |
1,446,005 |
|||||||||||||
| EBIT (1) |
$ |
158,311 |
$ |
20,164 |
$ |
2,239 |
$ |
3,979 |
$ |
14,494 |
$ |
(2,141) |
$ |
197,046 |
|||||||||||||
| As a percent of total sales |
17.5 |
% |
8.9 |
% |
1.5 |
% |
4.9 |
% |
8.4 |
% |
13.6 |
% |
|||||||||||||||
| Special items (gain) charge (3) |
$ |
1,126 |
$ |
69 |
$ |
707 |
$ |
12,198 |
$ |
— |
$ |
— |
$ |
14,100 |
|||||||||||||
| EBIT, as adjusted (4) |
$ |
159,437 |
$ |
20,233 |
$ |
2,946 |
$ |
16,177 |
$ |
14,494 |
$ |
(2,141) |
$ |
211,146 |
|||||||||||||
| As a percent of total sales |
17.7 |
% |
8.9 |
% |
2.0 |
% |
20.0 |
% |
8.4 |
% |
14.6 |
% |
|||||||||||||||
| (1) |
EBIT is defined as Operating income plus Equity earnings in affiliates and Other income. |
| (2) |
Special items in the three and six months ended June 30, 2014 include net charges primarily related to severance and other related costs from the consolidation of manufacturing operations partially offset by gains related to the sale of assets at rationalized operations and the impact of the Venezuelan remeasurement losses related to the adoption of a new foreign exchange mechanism in the first quarter. |
| (3) |
Special items in the three and six months ended June 30, 2013 include net rationalization and asset impairment charges and the impact of the devaluation of the Venezuelan currency. |
| (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. |
||||||||||||||||||||||||
| Three Months Ended June 30th Change in Net Sales by Segment |
||||||||||||||||||||||||
| Change in Net Sales due to: |
||||||||||||||||||||||||
| Net Sales 2013 |
Volume |
Acquisitions |
Price |
Foreign Exchange |
Net Sales 2014 |
|||||||||||||||||||
| Operating Segments |
||||||||||||||||||||||||
| North America Welding |
$ |
419,069 |
$ |
(794) |
$ |
8,462 |
$ |
4,435 |
$ |
(1,682) |
$ |
429,490 |
||||||||||||
| Europe Welding |
108,661 |
3,410 |
— |
(212) |
3,715 |
115,574 |
||||||||||||||||||
| Asia Pacific Welding |
69,239 |
(264) |
— |
370 |
(2,348) |
66,997 |
||||||||||||||||||
| South America Welding |
44,503 |
(8,770) |
— |
16,709 |
(13,391) |
39,051 |
||||||||||||||||||
| The Harris Products Group |
85,960 |
(3,984) |
— |
(4,571) |
14 |
77,419 |
||||||||||||||||||
| Consolidated |
$ |
727,432 |
$ |
(10,402) |
$ |
8,462 |
$ |
16,731 |
$ |
(13,692) |
$ |
728,531 |
||||||||||||
| % Change |
||||||||||||||||||||||||
| North America Welding |
(0.2) |
% |
2.0 |
% |
1.1 |
% |
(0.4) |
% |
2.5 |
% |
||||||||||||||
| Europe Welding |
3.1 |
% |
— |
(0.2) |
% |
3.4 |
% |
6.4 |
% |
|||||||||||||||
| Asia Pacific Welding |
(0.4) |
% |
— |
0.5 |
% |
(3.4) |
% |
(3.2) |
% |
|||||||||||||||
| South America Welding |
(19.7) |
% |
— |
37.5 |
% |
(30.1) |
% |
(12.3) |
% |
|||||||||||||||
| The Harris Products Group |
(4.6) |
% |
— |
(5.3) |
% |
— |
(9.9) |
% |
||||||||||||||||
| Consolidated |
(1.4) |
% |
1.2 |
% |
2.3 |
% |
(1.9) |
% |
0.2 |
% |
||||||||||||||
| Six Months Ended June 30th Change in Net Sales by Segment |
||||||||||||||||||||||||
| Change in Net Sales due to: |
||||||||||||||||||||||||
| Net Sales 2013 |
Volume |
Acquisitions |
Price |
Foreign Exchange |
Net Sales 2014 |
|||||||||||||||||||
| Operating Segments |
||||||||||||||||||||||||
| North America Welding |
$ |
838,623 |
$ |
(24,204) |
$ |
16,331 |
$ |
5,675 |
$ |
(5,029) |
$ |
831,396 |
||||||||||||
| Europe Welding |
219,152 |
(2,077) |
— |
(1,762) |
5,667 |
220,980 |
||||||||||||||||||
| Asia Pacific Welding |
139,278 |
(5,650) |
— |
45 |
(5,390) |
128,283 |
||||||||||||||||||
| South America Welding |
80,877 |
(10,796) |
— |
30,410 |
(17,447) |
83,044 |
||||||||||||||||||
| The Harris Products Group |
168,075 |
(3,584) |
— |
(13,775) |
(826) |
149,890 |
||||||||||||||||||
| Consolidated |
$ |
1,446,005 |
$ |
(46,311) |
$ |
16,331 |
$ |
20,593 |
$ |
(23,025) |
$ |
1,413,593 |
||||||||||||
| % Change |
||||||||||||||||||||||||
| North America Welding |
(2.9) |
% |
1.9 |
% |
0.7 |
% |
(0.6) |
v |
(0.9) |
% |
||||||||||||||
| Europe Welding |
(0.9) |
% |
— |
(0.8) |
% |
2.6 |
% |
0.8 |
% |
|||||||||||||||
| Asia Pacific Welding |
(4.1) |
% |
— |
— |
(3.9) |
% |
(7.9) |
% |
||||||||||||||||
| South America Welding |
(13.3) |
% |
— |
37.6 |
% |
(21.6) |
% |
2.7 |
% |
|||||||||||||||
| The Harris Products Group |
(2.1) |
% |
— |
(8.2) |
% |
(0.5) |
% |
(10.8) |
% |
|||||||||||||||
| Consolidated |
(3.2) |
% |
1.1 |
% |
1.4 |
% |
(1.6) |
% |
(2.2) |
% |
||||||||||||||
SOURCE Lincoln Electric Holdings, Inc.
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