Document
false0000059527LINCOLN ELECTRIC HOLDINGS INC 0000059527 2020-04-27 2020-04-27


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): April 27, 2020
 
LINCOLN ELECTRIC HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
0-1402
(Commission File Number)
 
Ohio
 
34-1860551
(State or other jurisdiction of
incorporation)
 
(I.R.S. Employer Identification No.)
 
22801 St. Clair Avenue, Cleveland, Ohio 44117
(Address of principal executive offices, with zip code)
 
(216) 481-8100
(Registrant’s telephone number, including area code)
 
Not applicable
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
☐            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐           Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of exchange on which registered
Common Shares, without par value
LECO
The NASDAQ Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 




Item 2.02
 
Results of Operations and Financial Condition.
 
 
On April 27, 2020, Lincoln Electric Holdings, Inc. (the “Company”) issued a press release reporting its financial results for the quarter ended March 31, 2020.  A copy of the Company’s press release issued on April 27, 2020 is attached hereto as Exhibit 99.1 and incorporated herein by reference.  The press release is also available through the Company’s website at www.lincolnelectric.com.  The information in this Current Report on Form 8-K, including the Exhibit, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.
 
 
 
Item 9.01
 
Financial Statements and Exhibits.
 
 
 
 
 
(d) Exhibits
 
 
 
 
 
99.1  The Company’s press release dated April 27, 2020.
 
 
104 Cover page Interactive Data File (formatted as Inline XBRL and contained in the Exhibit 101 attachments)





SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
LINCOLN ELECTRIC HOLDINGS, INC.
 
 
 
 
 
/s/ Vincent K. Petrella
 
 
Vincent K. Petrella
 
 
Executive Vice President
 
 
April 27, 2020















































LINCOLN ELECTRIC HOLDINGS, INC.
 
INDEX TO EXHIBITS
 
 
 
 
Exhibit No.
 
Exhibit
 
 
 
 
The Company’s press release dated April 27, 2020.
 104
 
 Cover page Interactive Data File (formatted as Inline XBRL and contained in the Exhibit 101 attachments)




Lincoln Electric Reports First Quarter 2020 Financial Results


Exhibit 99.1
 
Investor Relations: Amanda Butler (216) 383-2534
[email protected]

LINCOLN ELECTRIC REPORTS FIRST QUARTER 2020 RESULTS
First Quarter 2020 Highlights
§    Operating as an “essential business” (1) in substantially all locations to serve customers
§    Implemented best practice hygiene and safety measures to protect employees
§    Net sales declined 7.5%; Organic sales declined 9.5%
§    Operating income margin declined 90 basis points to 11.5%; Adjusted operating income margin declined 40 basis points to 12.6%
§    Q1 EPS decreases 18.8% to $0.91; Adjusted EPS decreases 14.5% to $1.00
§    $140 million returned to shareholders through dividends and share repurchases
§    Solid balance sheet with 1.85 Total debt/EBITDA ratio, $163 million in cash and $314 million in available credit under existing borrowing facilities
 
 
CLEVELAND, Monday, April 27, 2020 - Lincoln Electric Holdings, Inc. (the “Company”) (Nasdaq: LECO) today reported first quarter 2020 net income of $55.6 million, or diluted earnings per share (EPS) of $0.91, which includes special item after-tax net charges of $5.4 million, or $0.09 EPS. This compares with prior year period net income of $71.5 million, or $1.12 EPS, which included special item after-tax charges of $3.5 million, or $0.05 EPS. Excluding these items, first quarter 2020 adjusted net income was $60.9 million, or $1.00 EPS, as compared with $75.0 million, or $1.17 EPS in the prior year period. The reported and adjusted effective tax rate was 26.8% in the first quarter 2020 as compared with a reported 23.1% tax rate in the prior year period, or 22.9% on an adjusted basis.

First quarter 2020 sales decreased 7.5% to $702.0 million from a 9.5% decrease in organic sales and 1.3% unfavorable foreign exchange, partially offset by a 3.2% benefit from acquisitions. Operating income for the first quarter 2020 was $81.1 million, or 11.5% of sales. This compares with operating income of $94.5 million, or 12.4% of sales, in the prior year period. Excluding special items, adjusted operating income was $88.4 million, or 12.6% of sales, as compared with $98.8 million, or 13.0% of sales, in the prior year period.

“We executed well in an increasingly challenging environment,” said Christopher L. Mapes, Chairman, President and Chief Executive Officer. “Our priority has been to protect employees’ health and safety as we operated as an ‘essential business’ across substantially all of our locations in the quarter.”

“Global demand trends weakened significantly in April, declining in the low 40% range versus the prior year,” stated Mapes. “To mitigate the impact of lower demand, we expanded our cost reduction initiatives and expect these new measures, combined with earlier actions, to now generate $40 to $45 million in realized cost savings in 2020. While we expect demand to trough in the second quarter, our strong investment-grade balance sheet profile, liquidity, and cash flow generation give me tremendous confidence in our ability to successfully navigate this challenging period and generate long-term value for our shareholders.”










______________________________________________________________________________
(1)
"Essential business" defined as business that continues to operate within a critical infrastructure sector established by the Cybersecurity & Infrastructure Security Agency of the U.S. Department of Homeland Security, a well as other governments worldwide.


Lincoln Electric Reports First Quarter 2020 Financial Results


Webcast Information
 
A conference call to discuss first quarter 2020 financial results will be webcast live today, April 27, 2020, 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 9746539. Telephone participants are asked to dial in 10 - 15 minutes prior to the start of the conference call.

Financial results for the first quarter 2020 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 59 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") outbreak, on the Company or its customers, suppliers and the economy in general.  The Company has begun to see the impacts of COVID-19 on its markets and operations including softening demand, supply chain disruptions, and other logistics constraints. The full extent to which COVID-19 will adversely impact the Company’s business depends on future developments, which are highly uncertain and unpredictable, including new information concerning the severity of the outbreak and the effectiveness of actions globally to contain or mitigate its effects. While this matter will negatively impact the Company’s results of operations, cash flows and financial position, the


Lincoln Electric Reports First Quarter 2020 Financial Results


current level of uncertainty over the economic and operational impacts of COVID-19 means the full financial impact cannot be reasonably estimated at this time. For additional discussion, see “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.



Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)
Consolidated Statements of Income
 
 
Three Months Ended March 31,
 
Fav (Unfav) to
Prior Year
 
 
2020
 
% of Sales
 
2019
 
% of Sales
 
$
 
%
Net sales
 
$
701,991

 
100.0
%
 
$
759,174

 
100.0
%
 
$
(57,183
)
 
(7.5
%)
Cost of goods sold
 
464,669

 
66.2
%
 
500,753

 
66.0
%
 
36,084

 
7.2
%
Gross profit
 
237,322

 
33.8
%
 
258,421

 
34.0
%
 
(21,099
)
 
(8.2
%)
Selling, general & administrative expenses
 
149,727

 
21.3
%
 
160,408

 
21.1
%
 
10,681

 
6.7
%
Rationalization and asset impairment charges
 
6,521

 
0.9
%
 
3,535

 
0.5
%
 
(2,986
)
 
(84.5
%)
Operating income
 
81,074

 
11.5
%
 
94,478

 
12.4
%
 
(13,404
)
 
(14.2
%)
Interest expense, net
 
5,458

 
0.8
%
 
5,323

 
0.7
%
 
(135
)
 
(2.5
%)
Other income (expense)
 
309

 
—

 
3,763

 
0.5
%
 
(3,454
)
 
(91.8
%)
Income before income taxes
 
75,925

 
10.8
%
 
92,918

 
12.2
%
 
(16,993
)
 
(18.3
%)
Income taxes
 
20,370

 
2.9
%
 
21,452

 
2.8
%
 
1,082

 
5.0
%
Effective tax rate
 
26.8
%
 
 

 
23.1
%
 
 

 
(3.7
%)
 


Net income including non-controlling interests
 
55,555

 
7.9
%
 
71,466

 
9.4
%
 
(15,911
)
 
(22.3
%)
Non-controlling interests in subsidiaries’ loss
 
(7
)
 
—

 
(14
)
 
—

 
7

 
50.0
%
Net income
 
$
55,562

 
7.9
%
 
$
71,480

 
9.4
%
 
$
(15,918
)
 
(22.3
%)
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings per share
 
$
0.92

 
 

 
$
1.13

 
 

 
$
(0.21
)
 
(18.6
%)
Diluted earnings per share
 
$
0.91

 
 

 
$
1.12

 
 

 
$
(0.21
)
 
(18.8
%)
Weighted average shares (basic)
 
60,184

 
 

 
63,160

 
 

 
 

 
 

Weighted average shares (diluted)
 
60,799

 
 

 
63,899

 
 

 
 

 
 




Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands)
(Unaudited)
 
Balance Sheet Highlights
 
Selected Consolidated Balance Sheet Data
 
March 31, 2020
 
December 31, 2019
Cash and cash equivalents
 
$
163,375

 
$
199,563

Total current assets
 
1,059,344

 
1,075,581

Property, plant and equipment, net
 
503,179

 
529,344

Total assets
 
2,305,900

 
2,371,213

Total current liabilities
 
654,822

 
563,135

Short-term debt (1)
 
132,378

 
34,969

Long-term debt, less current portion
 
715,950

 
712,302

Total equity
 
667,960

 
819,077

 
 
 
 
 
Operating Working Capital
 
March 31, 2020
 
December 31, 2019
Accounts receivable, net
 
$
385,673

 
$
374,649

Inventories
 
398,248

 
393,748

Trade accounts payable
 
248,335

 
273,002

Operating working capital
 
$
535,586

 
$
495,395

 
 
 
 
 
Average operating working capital to Net sales (2)
 
19.1
%
 
16.8
%
 
 
 
 
 
Invested Capital
 
March 31, 2020
 
December 31, 2019
Short-term debt (1)
 
$
132,378

 
$
34,969

Long-term debt, less current portion
 
715,950

 
712,302

Total debt
 
848,328

 
747,271

Total equity
 
667,960

 
819,077

Invested capital
 
$
1,516,288

 
$
1,566,348

 
 
 
 
 
Total debt / invested capital
 
55.9
%
 
47.7
%

(1)
Includes current portion of long-term debt.
(2)
Average operating working capital to Net sales is defined as operating working capital 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 March 31,
 
 
2020
 
2019
Operating income as reported
 
$
81,074

 
$
94,478

Special items (pre-tax):
 
 
 
 
Rationalization and asset impairment charges (2)
 
6,521

 
3,535

Acquisition transaction and integration costs (3)
 
—

 
790

Amortization of step up in value of acquired inventories (4)
 
806

 
—

Adjusted operating income (1)
 
$
88,401

 
$
98,803

As a percent of total sales
 
12.6
%
 
13.0
 %
 
 
 
 
 
Net income as reported
 
$
55,562

 
$
71,480

Special items:
 
 
 
 
Rationalization and asset impairment charges (2)
 
6,521

 
3,535

Acquisition transaction and integration costs (3)
 
—

 
790

Amortization of step up in value of acquired inventories (4)
 
806

 
—

Tax effect of Special items (5)
 
(1,976
)
 
(813
)
Adjusted net income (1)
 
60,913

 
74,992

Non-controlling interests in subsidiaries’ loss
 
(7
)
 
(14
)
Interest expense, net
 
5,458

 
5,323

Income taxes as reported
 
20,370

 
21,452

Tax effect of Special items (5)
 
1,976

 
813

Adjusted EBIT (1)
 
$
88,710

 
$
102,566

 
 
 
 
 
Effective tax rate as reported
 
26.8
%
 
23.1
 %
Net special item tax impact
 
—

 
(0.2
%)
Adjusted effective tax rate (1)
 
26.8
%
 
22.9
 %
 
 
 
 
 
Diluted earnings per share as reported
 
$
0.91

 
$
1.12

Special items per share
 
0.09

 
0.05

Adjusted diluted earnings per share (1)
 
$
1.00

 
$
1.17

 
 
 
 
 
Weighted average shares (diluted)
 
60,799

 
63,899

(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, asset impairments and gains or losses on the disposal of assets.
(3)
Related to the acquisition of Air Liquide Welding and are included in Selling, general & administrative expenses.
(4)
Related to an acquisition and are included in Cost of goods sold.
(5)
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 March 31,
Return on Invested Capital
 
2020
 
2019
Net income as reported
 
$
277,191

 
$
297,722

Rationalization and asset impairment charges
 
18,174

 
18,645

Acquisition transaction and integration costs
 
1,014

 
3,381

Pension settlement charges
 
—

 
5,928

Amortization of step up in value of acquired inventories
 
3,814

 
—

Gains on asset disposals
 
(3,554
)
 
—

Gain on change in control
 
(7,601
)
 
—

Tax effect of Special items (2)
 
(8,549
)
 
(7,328
)
Adjusted net income (1)
 
$
280,489

 
$
318,348

Plus: Interest expense, net of tax of $6,484 and $6,211 in 2020 and 2019, respectively
 
19,489

 
18,666

Less: Interest income, net of tax of $605 and $1,605 in 2020 and 2019, respectively
 
1,818

 
4,825

Adjusted net income before tax-effected interest
 
$
298,160

 
$
332,189

 
 
 
 
 
Invested Capital
 
March 31, 2020
 
March 31, 2019
Short-term debt
 
$
132,378

 
$
110

Long-term debt, less current portion
 
715,950

 
705,725

Total debt
 
848,328

 
705,835

Total equity
 
667,960

 
864,665

Invested capital
 
$
1,516,288

 
$
1,570,500

 
 
 
 
 
Return on invested capital (1)
 
19.7
%
 
21.2
%
 
 
 
 
 
 
 
Twelve Months Ended March 31,
Total Debt / EBITDA
 
2020
 
2019
Net income as reported
 
$
277,191

 
$
297,722

Income taxes
 
74,328

 
79,741

Interest expense, net
 
23,550

 
18,447

Depreciation and amortization
 
83,614

 
73,113

EBITDA (1)
 
$
458,683

 
$
469,023

 
 
 
 
 
 
 
March 31, 2020
 
March 31, 2019
Total debt
 
$
848,328

 
$
705,835

 
 
 
 
 
Total debt / EBITDA
 
1.85

 
1.50


(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, including tax benefits of $4,852 for the settlement of a tax item as well as tax deductions associated with an investment in a subsidiary in the twelve months ended March 31, 2020.
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 March 31,
 
 
2020
 
2019
OPERATING ACTIVITIES:
 
 

 
 

Net income
 
$
55,562

 
$
71,480

Non-controlling interests in subsidiaries’ loss
 
(7
)
 
(14
)
Net income including non-controlling interests
 
55,555

 
71,466

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

 
 

Rationalization and asset impairment net (gains) charges
 
(236
)
 
1,424

Depreciation and amortization
 
21,028

 
18,901

Equity earnings in affiliates, net
 
(162
)
 
(448
)
Other non-cash items, net
 
(4,182
)
 
4,394

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

Increase in accounts receivable
 
(25,698
)
 
(26,900
)
Increase in inventories
 
(17,401
)
 
(14,638
)
Decrease in trade accounts payable
 
(16,676
)
 
(15,107
)
Net change in other current assets and liabilities
 
11,693

 
(14,648
)
Net change in other long-term assets and liabilities
 
(1,949
)
 
1,434

NET CASH PROVIDED BY OPERATING ACTIVITIES
 
21,972

 
25,878

 
 
 
 
 
INVESTING ACTIVITIES:
 
 

 
 

Capital expenditures
 
(11,828
)
 
(16,251
)
Proceeds from sale of property, plant and equipment
 
6,100

 
302

Other investing activities
 
—

 
2,000

NET CASH USED BY INVESTING ACTIVITIES
 
(5,728
)
 
(13,949
)
 
 
 
 
 
FINANCING ACTIVITIES:
 
 

 
 

Net change in borrowings
 
97,777

 
(3
)
Proceeds from exercise of stock options
 
1,047

 
637

Purchase of shares for treasury
 
(109,762
)
 
(75,584
)
Cash dividends paid to shareholders
 
(30,675
)
 
(30,560
)
NET CASH USED BY FINANCING ACTIVITIES
 
(41,613
)
 
(105,510
)
 
 
 
 
 
Effect of exchange rate changes on Cash and cash equivalents
 
(10,819
)
 
1,866

DECREASE IN CASH AND CASH EQUIVALENTS
 
(36,188
)
 
(91,715
)
Cash and cash equivalents at beginning of period
 
199,563

 
358,849

Cash and cash equivalents at end of period
 
$
163,375

 
$
267,134

 
 
 
 
 
Cash dividends paid per share
 
$
0.49

 
$
0.47





Lincoln Electric Holdings, Inc.
Segment Highlights
(In thousands)
(Unaudited)
 
 
Americas Welding
 
International Welding
 
The Harris
Products Group
 
Corporate /
Eliminations
 
Consolidated
Three months ended March 31, 2020
 
 
 
 

 
 

 
 

 
 

Net sales
 
$
418,535

 
$
197,923

 
$
85,533

 
$
—

 
$
701,991

Inter-segment sales
 
24,783

 
4,483

 
1,725

 
(30,991
)
 
—

Total
 
$
443,318

 
$
202,406

 
$
87,258

 
$
(30,991
)
 
$
701,991

 
 
 
 
 
 
 
 
 
 
 
Net income
 
 
 
 
 
 
 
 
 
$
55,562

As a percent of total sales
 
 
 
 
 
 
 
 
 
7.9
%
 
 
 
 
 
 
 
 
 
 
 
EBIT (1)
 
$
69,512

 
$
478

 
$
12,492

 
$
(1,099
)
 
$
81,383

As a percent of total sales
 
15.7
%
 
0.2
%
 
14.3
%
 
 

 
11.6
%
Special items charges (gains) (3)
 
1,190

 
6,137

 
—

 
—

 
7,327

Adjusted EBIT (2)
 
$
70,702

 
$
6,615

 
$
12,492

 
$
(1,099
)
 
$
88,710

As a percent of total sales
 
15.9
%
 
3.3
%
 
14.3
%
 
 

 
12.6
%
 
 
 
 
 
 
 
 
 
 
 
Three months ended March 31, 2019
 
 

 
 

 
 

 
 

 
 

Net sales
 
$
457,719

 
$
218,086

 
$
83,369

 
$
—

 
$
759,174

Inter-segment sales
 
29,388

 
4,209

 
1,867

 
(35,464
)
 
—

Total
 
$
487,107

 
$
222,295

 
$
85,236

 
$
(35,464
)
 
$
759,174

 
 
 
 
 
 
 
 
 
 
 
Net income
 
 
 
 
 
 
 
 
 
$
71,480

As a percent of total sales
 
 
 
 
 
 
 
 
 
9.4
%
 
 
 
 
 
 
 
 
 
 
 
EBIT (1)
 
$
80,416

 
$
11,138

 
$
10,519

 
$
(3,832
)
 
$
98,241

As a percent of total sales
 
16.5
%
 
5.0
%
 
12.3
%
 
 

 
12.9
%
Special items charges (gains) (4)
 
1,336

 
2,199

 
—

 
790

 
4,325

Adjusted EBIT (2)
 
$
81,752

 
$
13,337

 
$
10,519

 
$
(3,042
)
 
$
102,566

As a percent of total sales
 
16.8
%
 
6.0
%
 
12.3
%
 
 

 
13.5
%
(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 2020 reflect Rationalization and asset impairment charges of $1,190 and $5,331 in Americas Welding and International Welding, respectively, and amortization of step up in value of acquired inventories of $806 in International Welding related to an acquisition.
(4)
Special items in 2019 reflect Rationalization and asset impairment charges of $1,336 in Americas Welding and $2,199 in International Welding and acquisition transaction and integration costs of $790 in Corporate/Eliminations related to the acquisition of Air Liquide Welding.



Lincoln Electric Holdings, Inc.
Change in Net Sales by Segment
(In thousands)
(Unaudited)
Three Months Ended March 31st Change in Net Sales by Segment
 
 
 
 
 
 
 
 
 
 
 
Change in Net Sales due to:
 
 
 
 
Net Sales
2019
 
Volume
 
Acquisitions
 
Price
 
Foreign
Exchange
 
Net Sales
2020
Operating Segments
 
 

 
 

 
 

 
 

 
 

 
 

Americas Welding
 
$
457,719

 
$
(37,692
)
 
$
6,190

 
$
(5,392
)
 
$
(2,290
)
 
$
418,535

International Welding
 
218,086

 
(30,507
)
 
18,302

 
(1,691
)
 
(6,267
)
 
197,923

The Harris Products Group
 
83,369

 
2,800

 
—

 
323

 
(959
)
 
85,533

Consolidated
 
$
759,174

 
$
(65,399
)
 
$
24,492

 
$
(6,760
)
 
$
(9,516
)
 
$
701,991

 
 
 
 
 
 
 
 
 
 
 
 
 
% Change
 
 

 
 

 
 

 
 

 
 

 
 

Americas Welding
 
—
%
 
(8.2
%)
 
1.4
%
 
(1.2
%)
 
(0.5
%)
 
(8.6
%)
International Welding
 
 

 
(14.0
%)
 
8.4
%
 
(0.8
%)
 
(2.9
%)
 
(9.2
%)
The Harris Products Group
 
 

 
3.4
%
 
—

 
0.4
%
 
(1.2
%)
 
2.6
%
Consolidated
 
 

 
(8.6
%)
 
3.2
%
 
(0.9
%)
 
(1.3
%)
 
(7.5
%)