Singapore markets closed
  • Straits Times Index

    3,101.93
    +9.82 (+0.32%)
     
  • Nikkei

    28,029.57
    +276.20 (+1.00%)
     
  • Hang Seng

    23,766.69
    -22.24 (-0.09%)
     
  • FTSE 100

    7,122.32
    -6.89 (-0.10%)
     
  • BTC-USD

    47,357.24
    -9,273.15 (-16.37%)
     
  • CMC Crypto 200

    1,367.14
    -74.62 (-5.18%)
     
  • S&P 500

    4,538.43
    -38.67 (-0.84%)
     
  • Dow

    34,580.08
    -59.71 (-0.17%)
     
  • Nasdaq

    15,085.47
    -295.85 (-1.92%)
     
  • Gold

    1,782.10
    +21.40 (+1.22%)
     
  • Crude Oil

    66.22
    -0.28 (-0.42%)
     
  • 10-Yr Bond

    1.3430
    -0.1050 (-7.25%)
     
  • FTSE Bursa Malaysia

    1,501.74
    0.00 (0.00%)
     
  • Jakarta Composite Index

    6,538.51
    -45.31 (-0.69%)
     
  • PSE Index

    7,055.19
    +22.65 (+0.32%)
     
BANKS:

DBS CEO says tough for digital banks to muscle into Singapore

Lincoln Electric Reports Third Quarter 2021 Results

  • Oops!
    Something went wrong.
    Please try again later.
·24-min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.


Third Quarter 2021 Highlights

CLEVELAND, Oct. 28, 2021 (GLOBE NEWSWIRE) -- Lincoln Electric Holdings, Inc. (the “Company”) (Nasdaq: LECO) today reported third quarter 2021 net income of $31.8 million, or diluted earnings per share (EPS) of $0.53, which includes special item after-tax charges of $62.0 million, or $1.03 EPS. Special item charges primarily relate to the termination of a pension plan. This compares with prior year period net income of $58.5 million, or $0.97 EPS, which included special item after-tax charges of $7.5 million, or $0.13 EPS. Excluding these items, third quarter 2021 adjusted net income was $93.8 million, or $1.56 Adjusted EPS. This compares with Adjusted net income of $66.0 million, or $1.10 Adjusted EPS in the prior year period.

Third quarter 2021 sales increased 20.6% to $806.5 million from an 18.3% increase in organic sales, 2.0% benefit from acquisitions and 0.3% favorable foreign exchange. Operating income for the third quarter 2021 was $115.6 million, or 14.3% of sales, including special item charges of $7.2 million. This compares with operating income of $77.8 million, or 11.6% of sales, in the prior year period. Excluding special items, adjusted operating income was $122.7 million, or 15.2% of sales, as compared with $84.1 million, or 12.6% of sales, in the prior year period.

“I am pleased to report that strong execution of our 2025 Higher Standard Strategy initiatives delivered record third quarter adjusted earnings performance,” said Christopher L. Mapes, Chairman, President and Chief Executive Officer. “We are serving strong demand and are effectively managing inflationary headwinds and supply chain constraints, which generated solid cash flows, cash conversion and superior returns.”

Pension Plan Termination

During the third quarter 2021, the Company recognized $73.6 million of non-cash pension settlement charges associated with lump sum distributions related to the termination of a pension plan. In October 2021, the Company entered into an agreement to purchase a group annuity contract with an insurance company to settle the remaining pension obligations of this plan. The Company estimates fourth quarter 2021 pre-tax settlement charges of approximately $35 - $45 million related to the annuity purchase. The Company anticipates using any surplus assets to fund future contributions into another retirement plan.

Nine Months 2021 Summary

Net income for the nine months ended September 30, 2021 was $202.0 million, or $3.36 EPS. This compares with $141.0 million, or $2.34 EPS, in the comparable 2020 period. Reported EPS includes special item after-tax charges of $75.1 million or $1.25 EPS, as compared with special item after-tax net charges of $33.9 million, or $0.57 EPS in the prior year period. Excluding these items, adjusted net income for the nine months ended September 30, 2021 increased 58.4% to $277.1 million, or $4.61 EPS, compared with $174.9 million, or $2.91 EPS, in the comparable 2020 period.

Sales increased 21.8% to $2.4 billion in the nine months ended September 30, 2021 from a 19.4% increase in organic sales, 1.6% favorable foreign exchange and a 0.9% benefit from acquisitions. Operating income for the nine months ended September 30, 2021 was $341.3 million, or 14.3% of sales. This compares with operating income of $198.6 million, or 10.1% of sales, in the comparable 2020 period. Excluding special items, adjusted operating income was $357.1 million, or 14.9% of sales, as compared with $235.5 million, or 12.0% of sales, in the comparable 2020 period.

Dividend

The Company's Board of Directors declared a 9.8% increase in the quarterly cash dividend, from $0.51 per share to $0.56 per share, or $2.24 per share on an annual basis. The declared quarterly cash dividend of $0.56 per share is payable January 14, 2022 to shareholders of record as of December 31, 2021.

Webcast Information

A conference call to discuss third quarter 2021 financial results will be webcast live today, October 28, 2021, at 10:00 a.m., Eastern Time. This webcast is accessible at https://ir.lincolnelectric.com. Listeners should go to the web site prior to the call to register, download and install any necessary audio software. A replay of the webcast will be available on the Company's web site.

If investors would like to ask questions, please dial (877) 344-3899 (domestic) or (315) 625-3087 (international) and use confirmation code 8735626. Telephone participants are asked to dial in 10 - 15 minutes prior to the start of the conference call.

Financial results for the third quarter 2021 can also be obtained at https://ir.lincolnelectric.com.

About Lincoln Electric

Lincoln Electric is the world leader in the design, development and manufacture of arc welding products, automated joining, assembly and cutting systems, plasma and oxy-fuel cutting equipment and has a leading global position in brazing and soldering alloys. Headquartered in Cleveland, Ohio, Lincoln has 55 manufacturing locations in 18 countries and a worldwide network of distributors and sales offices covering more than 160 countries. For more information about Lincoln Electric and its products and services, visit the Company’s website at https://www.lincolnelectric.com.

Non-GAAP Information

Adjusted operating income, Adjusted net income, Adjusted EBIT, Adjusted effective tax rate, Adjusted diluted earnings per share, Organic sales, Cash conversion, Return on invested capital and Earnings before interest, taxes, depreciation and amortization ("EBITDA") are non-GAAP financial measures. Management uses non-GAAP measures to assess the Company's operating performance by excluding certain disclosed special items that management believes are not representative of the Company's core business. Management believes that excluding these special items enables them to make better period-over-period comparisons and benchmark the Company's operational performance against other companies in its industry more meaningfully. Furthermore, management believes that non-GAAP financial measures provide investors with meaningful information that provides a more complete understanding of Company operating results and enables investors to analyze financial and business trends more thoroughly. Non-GAAP financial measures should not be viewed in isolation, are not a substitute for GAAP measures and have limitations including, but not limited to, their usefulness as comparative measures as other companies may define their non-GAAP measures differently.

Forward-Looking Statements

The Company’s expectations and beliefs concerning the future contained in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect management’s current expectations and involve a number of risks and uncertainties. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “guidance” or words of similar meaning. Actual results may differ materially from such statements due to a variety of factors that could adversely affect the Company’s operating results. The factors include, but are not limited to: general economic, financial and market conditions; the effectiveness of operating initiatives; completion of planned divestitures; interest rates; disruptions, uncertainty or volatility in the credit markets that may limit our access to capital; currency exchange rates and devaluations; adverse outcome of pending or potential litigation; actual costs of the Company’s rationalization plans; possible acquisitions, including the Company’s ability to successfully integrate acquisitions; market risks and price fluctuations related to the purchase of commodities and energy; global regulatory complexity; the effects of changes in tax law; tariff rates in the countries where the Company conducts business; and the possible effects of events beyond our control, such as political unrest, acts of terror, natural disasters and pandemics, including the current coronavirus disease ("COVID-19") pandemic, on the Company or its customers, suppliers and the economy in general. For additional discussion, see “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

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

Consolidated Statements of Income

Fav (Unfav) to

Three Months Ended September 30,

Prior Year

2021

% of Sales

2020

% of Sales

$

%

Net sales

$

806,454

100.0

%

$

668,888

100.0

%

$

137,566

20.6

%

Cost of goods sold

538,282

66.7

%

453,501

67.8

%

(84,781

)

(18.7

)

%

Gross profit

268,172

33.3

%

215,387

32.2

%

52,785

24.5

%

Selling, general & administrative expenses

149,118

18.5

%

131,337

19.6

%

(17,781

)

(13.5

)

%

Rationalization and asset impairment charges

3,484

0.4

%

6,257

0.9

%

2,773

44.3

%

Operating income

115,570

14.3

%

77,793

11.6

%

37,777

48.6

%

Interest expense, net

5,714

0.7

%

5,552

0.8

%

(162

)

(2.9

)

%

Other income (expense)

(71,441

)

(8.9

)

%

1,062

0.2

%

(72,503

)

(6,827.0

)

%

Income before income taxes

38,415

4.8

%

73,303

11.0

%

(34,888

)

(47.6

)

%

Income taxes

6,658

0.8

%

14,797

2.2

%

8,139

55.0

%

Effective tax rate

17.3

%

20.2

%

2.9

%

Net income including non-controlling interests

31,757

3.9

%

58,506

8.7

%

(26,749

)

(45.7

)

%

Non-controlling interests in subsidiaries’ income (loss)

27

(27

)

(100.0

)

%

Net income

$

31,757

3.9

%

$

58,479

8.7

%

$

(26,722

)

(45.7

)

%

Basic earnings per share

$

0.54

$

0.98

$

(0.44

)

(44.9

)

%

Diluted earnings per share

$

0.53

$

0.97

$

(0.44

)

(45.4

)

%

Weighted average shares (basic)

59,289

59,426

Weighted average shares (diluted)

60,055

60,018


Fav (Unfav) to

Nine Months Ended September 30,

Prior Year

2021

% of Sales

2020

% of Sales

$

%

Net sales

$

2,389,929

100.0

%

$

1,961,606

100.0

%

$

428,323

21.8

%

Cost of goods sold

1,593,981

66.7

%

1,319,519

67.3

%

(274,462

)

(20.8

)

%

Gross profit

795,948

33.3

%

642,087

32.7

%

153,861

24.0

%

Selling, general & administrative expenses

446,351

18.7

%

407,440

20.8

%

(38,911

)

(9.6

)

%

Rationalization and asset impairment charges

8,277

0.3

%

36,016

1.8

%

27,739

77.0

%

Operating income

341,320

14.3

%

198,631

10.1

%

142,689

71.8

%

Interest expense, net

16,736

0.7

%

16,891

0.9

%

155

0.9

%

Other income (expense)

(71,155

)

(3.0

)

%

1,168

0.1

%

(72,323

)

(6,192.0

)

%

Income before income taxes

253,429

10.6

%

182,908

9.3

%

70,521

38.6

%

Income taxes

51,259

2.1

%

41,834

2.1

%

(9,425

)

(22.5

)

%

Effective tax rate

20.2

%

22.9

%

2.7

%

Net income including non-controlling interests

202,170

8.5

%

141,074

7.2

%

61,096

43.3

%

Non-controlling interests in subsidiaries’ income (loss)

131

37

94

254.1

%

Net income

$

202,039

8.5

%

$

141,037

7.2

%

$

61,002

43.3

%

Basic earnings per share

$

3.40

$

2.36

$

1.04

44.1

%

Diluted earnings per share

$

3.36

$

2.34

$

1.02

43.6

%

Weighted average shares (basic)

59,465

59,655

Weighted average shares (diluted)

60,168

60,202


Lincoln Electric Holdings, Inc.

Financial Highlights
(In thousands)
(Unaudited)

Balance Sheet Highlights

Selected Consolidated Balance Sheet Data

September 30,
2021

December 31,
2020

Cash and cash equivalents

$

160,559

$

257,279

Accounts receivable, net

443,054

373,487

Inventories

524,433

381,258

Total current assets

1,235,958

1,112,343

Property, plant and equipment, net

520,081

522,092

Total assets

2,568,797

2,314,453

Trade accounts payable

309,202

256,530

Total current liabilities

745,420

549,449

Short-term debt (1)

41,404

2,734

Long-term debt, less current portion

717,787

715,456

Total equity

857,893

790,250

Operating Working Capital

September 30,
2021

December 31,
2020

Average operating working capital to Net sales (2)

18.6

%

17.4

%

Invested Capital

September 30,
2021

December 31, 2020

Short-term debt (1)

$

41,404

$

2,734

Long-term debt, less current portion

717,787

715,456

Total debt

759,191

718,190

Total equity

857,893

790,250

Invested capital

$

1,617,084

$

1,508,440

Total debt / invested capital

46.9

%

47.6

%

  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 September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Operating income as reported

$

115,570

$

77,793

$

341,320

$

198,631

Special items (pre-tax):

Rationalization and asset impairment charges (2)

3,484

6,257

8,277

36,016

Acquisition transaction costs (3)

1,923

Amortization of step up in value of acquired inventories (4)

3,690

5,531

806

Adjusted operating income (1)

$

122,744

$

84,050

$

357,051

$

235,453

As a percent of total sales

15.2

%

12.6

%

14.9

%

12.0

%

Net income as reported

$

31,757

$

58,479

$

202,039

$

141,037

Special items:

Rationalization and asset impairment charges (2)

3,484

6,257

8,277

36,016

Acquisition transaction costs (3)

1,923

Pension settlement charges (5)

73,562

3,188

80,098

6,522

Amortization of step up in value of acquired inventories (4)

3,690

5,531

806

Tax effect of Special items (6)

(18,743

)

(1,911

)

(20,737

)

(9,463

)

Adjusted net income (1)

93,750

66,013

277,131

174,918

Non-controlling interests in subsidiaries’ income (loss)

27

131

37

Interest expense, net

5,714

5,552

16,736

16,891

Income taxes as reported

6,658

14,797

51,259

41,834

Tax effect of Special items (6)

18,743

1,911

20,737

9,463

Adjusted EBIT (1)

$

124,865

$

88,300

$

365,994

$

243,143

Effective tax rate as reported

17.3

%

20.2

%

20.2

%

22.9

%

Net special item tax impact

4.0

%

%

0.4

%

(0.2

)

%

Adjusted effective tax rate (1)

21.3

%

20.2

%

20.6

%

22.7

%

Diluted earnings per share as reported

$

0.53

$

0.97

$

3.36

$

2.34

Special items per share

1.03

0.13

1.25

0.57

Adjusted diluted earnings per share (1)

$

1.56

$

1.10

$

4.61

$

2.91

Weighted average shares (diluted)

60,055

60,018

60,168

60,202

  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 acquisitions and are included in Selling, general & administrative expenses.

  4. Related to acquisitions and are included in Cost of goods sold.

  5. Settlement charges related to lump sum pension payments associated with the termination of a pension plan 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 September 30,

Return on Invested Capital

2021

2020

Net income as reported

$

267,117

$

204,753

Rationalization and asset impairment charges

17,729

44,867

Acquisition transaction costs

1,923

Pension settlement charges

81,695

6,522

Amortization of step up in value of acquired inventories

5,531

806

Tax effect of Special items (2)

(21,868

)

(11,030

)

Adjusted net income (1)

$

352,127

$

245,918

Plus: Interest expense, net of tax of $5,893 and $6,177 in 2021 and 2020, respectively

17,520

18,564

Less: Interest income, net of tax of $402 and $513 in 2021 and 2020, respectively

1,193

1,543

Adjusted net income before tax-effected interest

$

368,454

$

262,939

Invested Capital

September 30, 2021

September 30, 2020

Short-term debt

$

41,404

$

1,147

Long-term debt, less current portion

717,787

715,687

Total debt

759,191

716,834

Total equity

857,893

710,744

Invested capital

$

1,617,084

$

1,427,578

Return on invested capital (1)

22.8

%

18.4

%


Twelve Months Ended September 30,

Total Debt / EBITDA

2021

2020

Net income as reported

$

267,117

$

204,753

Income taxes

67,321

58,412

Interest expense, net

21,818

22,685

Depreciation and amortization

80,484

81,653

EBITDA (1)

$

436,740

$

367,503

September 30, 2021

September 30, 2020

Total debt

$

759,191

$

716,834

Total debt / EBITDA

1.74

1.95

  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 September 30,

2021

2020

OPERATING ACTIVITIES:

Net income

$

31,757

$

58,479

Non-controlling interests in subsidiaries’ income (loss)

27

Net income including non-controlling interests

31,757

58,506

Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities:

Rationalization and asset impairment net charges

212

22

Depreciation and amortization

22,050

19,488

Equity earnings in affiliates, net

(108

)

(80

)

Pension settlement charges

73,562

3,188

Other non-cash items, net

389

(670

)

Changes in operating assets and liabilities, net of effects from acquisitions:

Decrease (increase) in accounts receivable

16,359

(30,517

)

(Increase) decrease in inventories

(45,670

)

26,948

Decrease in trade accounts payable

(8,294

)

(2,218

)

Net change in other current assets and liabilities

31,838

14,232

Net change in other long-term assets and liabilities

(12,204

)

649

NET CASH PROVIDED BY OPERATING ACTIVITIES

109,891

89,548

INVESTING ACTIVITIES:

Capital expenditures

(18,672

)

(12,105

)

Acquisition of businesses, net of cash acquired

(74,882

)

Proceeds from sale of property, plant and equipment

1,290

739

NET CASH USED BY INVESTING ACTIVITIES

(92,264

)

(11,366

)

FINANCING ACTIVITIES:

Net change in borrowings

31,132

(48,230

)

Proceeds from exercise of stock options

2,249

5,959

Purchase of shares for treasury

(50,160

)

(223

)

Cash dividends paid to shareholders

(30,338

)

(29,131

)

NET CASH USED BY FINANCING ACTIVITIES

(47,117

)

(71,625

)

Effect of exchange rate changes on Cash and cash equivalents

(835

)

2,867

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

(30,325

)

9,424

Cash and cash equivalents at beginning of period

190,884

143,055

Cash and cash equivalents at end of period

$

160,559

$

152,479

Cash dividends paid per share

$

0.51

$

0.49


Lincoln Electric Holdings, Inc.

Financial Highlights
(In thousands, except per share amounts)
(Unaudited)

Nine Months Ended September 30,

2021

2020

OPERATING ACTIVITIES:

Net income

$

202,039

$

141,037

Non-controlling interests in subsidiaries’ income (loss)

131

37

Net income including non-controlling interests

202,170

141,074

Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities:

Rationalization and asset impairment net (gains) charges

(1,162

)

21,927

Depreciation and amortization

60,558

60,566

Equity earnings in affiliates, net

(399

)

(323

)

Pension settlement charges

80,098

6,522

Other non-cash items, net

(10,967

)

(9,292

)

Changes in operating assets and liabilities, net of effects from acquisitions:

Increase in accounts receivable

(71,212

)

(6,851

)

Increase in inventories

(128,856

)

(3,430

)

Increase (decrease) in trade accounts payable

54,981

(42,333

)

Net change in other current assets and liabilities

78,959

46,642

Net change in other long-term assets and liabilities

(9,045

)

1,059

NET CASH PROVIDED BY OPERATING ACTIVITIES

255,125

215,561

INVESTING ACTIVITIES:

Capital expenditures

(46,440

)

(37,116

)

Acquisition of businesses, net of cash acquired

(158,605

)

Proceeds from sale of property, plant and equipment

3,847

6,957

Other investing activities

6,500

NET CASH USED BY INVESTING ACTIVITIES

(194,698

)

(30,159

)

FINANCING ACTIVITIES:

Net change in borrowings

32,295

(33,135

)

Proceeds from exercise of stock options

7,921

7,961

Purchase of shares for treasury

(103,848

)

(113,198

)

Cash dividends paid to shareholders

(91,717

)

(88,945

)

Other financing activities

(763

)

NET CASH USED BY FINANCING ACTIVITIES

(156,112

)

(227,317

)

Effect of exchange rate changes on Cash and cash equivalents

(1,035

)

(5,169

)

DECREASE IN CASH AND CASH EQUIVALENTS

(96,720

)

(47,084

)

Cash and cash equivalents at beginning of period

257,279

199,563

Cash and cash equivalents at end of period

$

160,559

$

152,479

Cash dividends paid per share

$

1.53

$

1.47


Lincoln Electric Holdings, Inc.

Segment Highlights (1)
(In thousands)
(Unaudited)

Americas

International

The Harris

Corporate /

Welding

Welding

Products Group

Eliminations

Consolidated

Three months ended September 30, 2021

Net sales

$

461,508

$

227,165

$

117,781

$

$

806,454

Inter-segment sales

37,480

7,078

1,945

(46,503

)

Total sales

$

498,988

$

234,243

$

119,726

$

(46,503

)

$

806,454

Net income

$

31,757

As a percent of total sales

3.9

%

EBIT (1)

$

10,983

$

22,417

$

15,433

$

(4,704

)

$

44,129

As a percent of total sales

2.2

%

9.6

%

12.9

%

5.5

%

Special items charges (gains) (3)

73,574

6,615

547

80,736

Adjusted EBIT (2)

$

84,557

$

29,032

$

15,980

$

(4,704

)

$

124,865

As a percent of total sales

16.9

%

12.4

%

13.3

%

15.5

%

Three months ended September 30, 2020

Net sales

$

371,535

$

196,937

$

100,416

$

$

668,888

Inter-segment sales

29,368

4,898

1,898

(36,164

)

Total sales

$

400,903

$

201,835

$

102,314

$

(36,164

)

$

668,888

Net income

$

58,479

As a percent of total sales

8.7

%

EBIT (1)

$

52,076

$

11,031

$

17,587

$

(1,839

)

$

78,855

As a percent of total sales

13.0

%

5.5

%

17.2

%

11.8

%

Special items charges (gains) (4)

7,044

2,401

9,445

Adjusted EBIT (2)

$

59,120

$

13,432

$

17,587

$

(1,839

)

$

88,300

As a percent of total sales

14.7

%

6.7

%

17.2

%

13.2

%

  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 $3,484 primarily in International Welding, pension settlement charges of $73,562 in Americas Welding and amortization of the step up in value of acquired inventories of $3,143 and $547 in International Welding and The Harris Products Group, respectively, related to acquisitions.

  4. Special items in 2020 reflect Rationalization and asset impairment charges of $3,856 and $2,401 in Americas Welding and International Welding, respectively, and pension settlement charges of $3,188 in Americas Welding.


Lincoln Electric Holdings, Inc.

Segment Highlights
(In thousands)
(Unaudited)

Americas

International

The Harris

Corporate /

Welding

Welding

Products Group

Eliminations

Consolidated

Nine months ended September 30, 2021

Net sales

$

1,344,218

$

702,596

$

343,115

$

$

2,389,929

Inter-segment sales

109,993

18,260

6,376

(134,629

)

Total sales

$

1,454,211

$

720,856

$

349,491

$

(134,629

)

$

2,389,929

Net income

$

202,039

As a percent of total sales

8.5

%

EBIT (1)

$

165,644

$

64,150

$

52,342

$

(11,971

)

$

270,165

As a percent of total sales

11.4

%

8.9

%

15.0

%

11.3

%

Special items charges (gains) (3)

79,664

13,695

547

1,923

95,829

Adjusted EBIT (2)

$

245,308

$

77,845

$

52,889

$

(10,048

)

$

365,994

As a percent of total sales

16.9

%

10.8

%

15.1

%

15.3

%

Nine months ended September 30, 2020

Net sales

$

1,123,299

$

572,027

$

266,280

$

$

1,961,606

Inter-segment sales

81,644

13,667

5,376

(100,687

)

Total sales

$

1,204,943

$

585,694

$

271,656

$

(100,687

)

$

1,961,606

Net income

$

141,037

As a percent of total sales

7.2

%

EBIT (1)

$

142,283

$

20,626

$

41,792

$

(4,902

)

$

199,799

As a percent of total sales

11.8

%

3.5

%

15.4

%

10.2

%

Special items charges (gains) (4)

34,241

9,103

43,344

Adjusted EBIT (2)

$

176,524

$

29,729

$

41,792

$

(4,902

)

$

243,143

As a percent of total sales

14.6

%

5.1

%

15.4

%

12.4

%

  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 $79,652 and $446 in Americas Welding and International Welding, respectively, Rationalization and asset impairment charges of $8,277 primarily in International Welding, amortization of the step up in value of acquired inventories of $4,984 and $547 in International Welding and The Harris Products Group, respectively, and acquisition transaction costs of $1,923 in Corporate/Eliminations related to acquisitions.

  4. Special items in 2020 reflect Rationalization and asset impairment charges of $27,719 and $8,297 in Americas Welding and International Welding, respectively, amortization of the step up in value of acquired inventories of $806 in International Welding related to an acquisition, and pension settlement charges of $6,522 in Americas Welding.


Lincoln Electric Holdings, Inc.

Change in Net Sales by Segment
(In thousands)
(Unaudited)

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

Change in Net Sales due to:

Net Sales

Foreign

Net Sales

2020

Volume

Acquisitions

Price

Exchange

2021

Operating Segments

Americas Welding

$

371,535

$

42,341

$

$

43,957

$

3,675

$

461,508

International Welding

196,937

7,452

3,371

21,205

(1,800

)

227,165

The Harris Products Group

100,416

(1,287

)

9,880

8,609

163

117,781

Consolidated

$

668,888

$

48,506

$

13,251

$

73,771

$

2,038

$

806,454

% Change

Americas Welding

11.4

%

11.8

%

1.0

%

24.2

%

International Welding

3.8

%

1.7

%

10.8

%

(0.9

)

%

15.3

%

The Harris Products Group

(1.3

)

%

9.8

%

8.6

%

0.2

%

17.3

%

Consolidated

7.3

%

2.0

%

11.0

%

0.3

%

20.6

%

Nine Months Ended September 30th Change in Net Sales by Segment

Change in Net Sales due to:

Net Sales

Foreign

Net Sales

2020

Volume

Acquisitions

Price

Exchange

2021

Operating Segments

Americas Welding

$

1,123,299

$

128,836

$

$

80,352

$

11,731

$

1,344,218

International Welding

572,027

63,797

6,956

40,537

19,279

702,596

The Harris Products Group

266,280

28,775

9,880

38,031

149

343,115

Consolidated

$

1,961,606

$

221,408

$

16,836

$

158,920

$

31,159

$

2,389,929

% Change

Americas Welding

11.5

%

7.2

%

1.0

%

19.7

%

International Welding

11.2

%

1.2

%

7.1

%

3.4

%

22.8

%

The Harris Products Group

10.8

%

3.7

%

14.3

%

0.1

%

28.9

%

Consolidated

11.3

%

0.9

%

8.1

%

1.6

%

21.8

%


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


Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting