Lincoln Electric Holdings Inc 10-Q for FY2025 Q2

Lincoln Electric Holdings Inc (LECO)

10-Q 2025-07-31 For: 2025-06-30

Added on April 04, 2026

About this 10-Q

Lincoln Electric Holdings Inc filed this 10-Q on July 31, 2025, covering the quarter ended June 30, 2025 (FY2025 Q2).

Headline figures

Quarter ended June 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.09B; up 6.6% from $1.02B a year earlier
Net income: $143.4M; up 41.0% from net income of $101.71M a year earlier
Diluted EPS: $2.56; up 44.6% from $1.77 a year earlier

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Ohio		34-1860551
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

22801 St. Clair Avenue, Cleveland, Ohio		44117
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol	Name of exchange on which registered
Common Shares, without par value	LECO	The NASDAQ Stock Market LLC


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

PART I. FINANCIAL INFORMATION		3
Item 1. Financial Statements		3
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)		3
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)		4
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)		5
CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)		6
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)		8
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS		9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		23
Item 3. Quantitative and Qualitative Disclosures About Market Risk		33
Item 4. Controls and Procedures		33

PART II. OTHER INFORMATION		33
Item 1. Legal Proceedings		33
Item 1A. Risk Factors		33
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		34
Item 4. Mine Safety Disclosures		34
Item 5. Other Information		34
Item 6. Exhibits		35
Signatures		36


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Net sales (Note 2)	$	1,088,673	$	1,021,683	$	2,093,061	$	2,002,880
Cost of goods sold		683,126		637,870		1,322,066		1,250,668
Gross profit		405,547		383,813		770,995		752,212
Selling, general & administrative expenses		210,861		208,485		407,526		407,232
Rationalization and asset impairment net charges (Note 6)		2,542		26,490		6,407		31,095
Operating income		192,144		148,838		357,062		313,885
Interest expense, net		12,619		10,661		24,746		19,440
Other income (expense)		4,034		(1,553)		4,478		709
Income before income taxes		183,559		136,624		336,794		295,154
Income taxes (Note 11)		40,163		34,916		74,911		70,031
Net income	$	143,396	$	101,708	$	261,883	$	225,123

Basic earnings per share (Note 3)	$	2.58	$	1.79	$	4.69	$	3.96
Diluted earnings per share (Note 3)	$	2.56	$	1.77	$	4.66	$	3.91
Cash dividends declared per share	$	0.75	$	0.71	$	1.50	$	1.42


	June 30, 2025		December 31, 2024
	(UNAUDITED)		(NOTE 1)
ASSETS
Current Assets
Cash and cash equivalents	$	299,481	$	377,262
Accounts receivable (less allowance for doubtful accounts of $14,395 in 2025; $12,674 in 2024)		554,277		481,979
Inventories (Note 8)		621,440		544,037
Other current assets		250,028		242,003
Total Current Assets		1,725,226		1,645,281
Property, plant and equipment (less accumulated depreciation of $917,968 in 2025; $865,634 in 2024)		660,672		619,181
Goodwill		829,483		804,927
Other assets		511,988		450,753
TOTAL ASSETS	$	3,727,369	$	3,520,142
LIABILITIES AND EQUITY
Current Liabilities
Short-term debt (Note 10)	$	105,323	$	110,524
Trade accounts payable		375,833		296,590
Accrued employee compensation and benefits		167,471		104,374
Other current liabilities		376,612		367,314
Total Current Liabilities		1,025,239		878,802
Long-term debt, less current portion (Note 10)		1,150,395		1,150,551
Other liabilities		172,122		163,356
Total Liabilities		2,347,756		2,192,709
Shareholders' Equity
Common shares, without par value - at stated capital amount; authorized 240,000,000 shares; issued 98,581,434 shares in 2025 and 2024; outstanding 55,186,252 shares in 2025 and 56,211,219 in 2024		9,858		9,858
Additional paid-in capital		586,234		566,740
Retained earnings		4,168,467		3,993,016
Accumulated other comprehensive loss		(210,657)		(300,135)
Treasury shares, at cost - 43,395,182 shares in 2025 and 42,370,215 shares in 2024		(3,174,289)		(2,942,046)
Total Equity		1,379,613		1,327,433
TOTAL LIABILITIES AND TOTAL EQUITY	$	3,727,369	$	3,520,142


								Accumulated
	Common			Additional				Other
	Shares	Common		Paid-In		Retained		Comprehensive		Treasury
	Outstanding	Shares		Capital		Earnings		Income (Loss)		Shares		Total
Balance at December 31, 2024	56,211	$	9,858	$	566,740	$	3,993,016	$	(300,135)	$	(2,942,046)	$	1,327,433
Net income							118,487						118,487
Defined benefit pension plan activity, net of tax									(1,285)				(1,285)
Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax									829				829
Currency translation adjustment, net of tax									29,679				29,679
Cash dividends declared - $0.75 per share							(42,073)						(42,073)
Stock-based compensation activity	157				13,105						1,501		14,606
Purchase of shares for treasury	(542)										(106,694)		(106,694)
Other					1,405		(2,217)						(812)
Balance at March 31, 2025	55,826	$	9,858	$	581,250	$	4,067,213	$	(270,912)	$	(3,047,239)	$	1,340,170
Net income							143,396						143,396
Defined benefit pension plan activity, net of tax									(37)				(37)
Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax									173				173
Currency translation adjustment, net of tax									60,119				60,119
Cash dividends declared – $0.75 per share							(41,080)						(41,080)
Stock-based compensation activity	8				3,985						80		4,065
Purchase of shares for treasury	(648)										(127,130)		(127,130)
Other					999		(1,062)						(63)
Balance at June 30, 2025	55,186	$	9,858	$	586,234	$	4,168,467	$	(210,657)	$	(3,174,289)	$	1,379,613

Standard		Description
ASU No. 2023-09, Income Taxes (Topic 740), issued December 2023.		Requires disclosure of specific categories in rate reconciliation and additional information for reconciling items that meet a quantitative threshold, additional information about income taxes paid, and disclosure of disaggregated income tax information. The Company will adopt the required disclosures for the 2025 annual period.


Standard		Description
ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures, issued November 2024		Requires enhanced disclosures of specified information about certain costs and expenses. The amendments are effective for annual periods beginning January 1, 2027, and interim periods beginning January 1, 2028. Early adoption is permitted.
ASU No. 2023-06, Disclosure Improvements, issued October 2023		Requires amending certain disclosure and presentation requirements for a variety of topics within the ASC. The effective date for each amended topic in the ASC is either the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or S-K becomes effective, or June 30, 2027, if the SEC has not removed the requirements by that date. Early adoption is prohibited.


					The Harris
	Americas		International		Products		Corporate /
	Welding		Welding		Group		Eliminations		Consolidated
Three Months Ended June 30, 2025
Net sales	$	696,730	$	232,824	$	159,119	$	—	$	1,088,673
Inter-segment sales		43,391		7,641		5,110		(56,142)		—
Total		740,121		240,465		164,229		(56,142)		1,088,673
Cost of goods sold		449,197		170,287		117,975		(54,333)		683,126
Other segment expenses⁽³⁾		153,914		41,179		14,456		(180)		209,369
EBIT		137,010		28,999		31,798		(1,629)		196,178
Special items charge ⁽¹⁾		905		1,551		86		429		2,971
Adjusted EBIT	$	137,915	$	30,550	$	31,884	$	(1,200)	$	199,149
Special items charge ⁽¹⁾										(2,971)
Interest income										1,662
Interest expense										(14,281)
Income before income taxes									$	183,559

Total assets	$	2,469,216	$	1,159,578	$	422,559	$	(323,984)	$	3,727,369
Capital expenditures		19,972		4,609		862		—		25,443
Depreciation and amortization		17,139		5,485		2,598		(760)		24,462

Three Months Ended June 30, 2024
Net sales	$	648,936	$	238,758	$	133,989	$	—	$	1,021,683
Inter-segment sales		37,800		8,849		3,272		(49,921)		—
Total		686,736		247,607		137,261		(49,921)		1,021,683
Cost of goods sold		410,892		177,897		97,113		(48,032)		637,870
Other segment expenses⁽³⁾		139,547		75,235		15,085		6,661		236,528
EBIT		136,297		(5,525)		25,063		(8,550)		147,285
Special items charge ⁽²⁾		354		31,234		(140)		2,286		33,734
Adjusted EBIT	$	136,651	$	25,709	$	24,923	$	(6,264)	$	181,019
Special items charge ⁽²⁾										(33,734)
Interest income										1,972
Interest expense										(12,633)
Income before income taxes									$	136,624

Total assets	$	2,338,883	$	1,035,871	$	363,787	$	(323,292)	$	3,415,249
Capital expenditures		18,276		3,869		994		—		23,139
Depreciation and amortization		13,258		5,197		2,565		(155)		20,865


	Americas		International		The Harris Products
	Welding		Welding		Group		Consolidated
Balance at December 31, 2024	$	5,628	$	7,562	$	956	$	14,146
Payments and other adjustments		(7,935)		(4,410)		(1,117)		(13,462)
Charged to expense		3,040		2,428		264		5,732
Balance at June 30, 2025	$	733	$	5,580	$	103	$	6,416


	Three Months Ended June 30, 2025
	Unrealized gain
	(loss) on derivatives
	designated and		Defined benefit		Currency
	qualifying as cash		pension plan		translation
	flow hedges		activity		adjustment		Total
Balance at March 31, 2025	$	18,084	$	(2,333)	$	(286,663)	$	(270,912)
Other comprehensive income before reclassification		957		—		60,119		61,076
Amounts reclassified from AOCI		(784)		(37)		—		(821)
Net current-period other comprehensive income (loss)		173		(37)		60,119		60,255
Balance at June 30, 2025	$	18,257	$	(2,370)	$	(226,544)	$	(210,657)


	Three Months Ended June 30, 2024
	Unrealized gain
	(loss) on derivatives
	designated and		Defined benefit		Currency
	qualifying as cash		pension plan		translation
	flow hedges		activity		adjustment		Total
Balance at March 31, 2024	$	20,251	$	(1,923)	$	(257,782)	$	(239,454)
Other comprehensive loss before reclassification		(2,175)		—		(7,696)		(9,871)
Amounts reclassified from AOCI		(586)		6		—		(580)
Net current-period other comprehensive (loss) income		(2,761)		6		(7,696)		(10,451)
Balance at June 30, 2024	$	17,490	$	(1,917)	$	(265,478)	$	(249,905)


	Six Months Ended June 30, 2025
	Unrealized gain
	(loss) on derivatives
	designated and		Defined benefit		Currency
	qualifying as cash		pension plan		translation
	flow hedges		activity		adjustment		Total
Balance at December 31, 2024	$	17,255	$	(1,048)	$	(316,342)	$	(300,135)
Other comprehensive income before reclassification		2,105		—		89,798		91,903
Amounts reclassified from AOCI		(1,103)		(1,322)		—		(2,425)
Net current-period other comprehensive income (loss)		1,002		(1,322)		89,798		89,478
Balance at June 30, 2025	$	18,257	$	(2,370)	$	(226,544)	$	(210,657)


	Six Months Ended June 30, 2024
	Unrealized gain
	(loss) on derivatives
	designated and		Defined benefit		Currency
	qualifying as cash		pension plan		translation
	flow hedges		activity		adjustment		Total
Balance at December 31, 2023	$	16,536	$	(1,996)	$	(244,387)	$	(229,847)
Other comprehensive income (loss) before reclassification		2,353		—		(21,091)		(18,738)
Amounts reclassified from AOCI		(1,399)		79		—		(1,320)
Net current-period other comprehensive income (loss)		954		79		(21,091)		(20,058)
Balance at June 30, 2024	$	17,490	$	(1,917)	$	(265,478)	$	(249,905)


	Six Months Ended June 30,
	2025		2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	261,883	$	225,123
Adjustments to reconcile Net income to Net cash provided by operating activities:
Rationalization and asset impairment net charges		675		23,751
Depreciation and amortization		48,246		42,451
Deferred income taxes		(26,342)		(3,864)
Stock-based compensation		12,277		18,379
Other, net		(854)		2,020
Changes in operating assets and liabilities, net of effects from acquisitions:
Increase in accounts receivable		(52,208)		(14,484)
Increase in inventories		(47,648)		(27,626)
Increase in other current assets		(3,408)		(5,153)
Increase in trade accounts payable		68,092		28,956
Increase (decrease) in other current liabilities		68,579		(5,092)
Net change in other assets and liabilities		229		19,520
NET CASH PROVIDED BY OPERATING ACTIVITIES		329,521		303,981
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(52,392)		(49,395)
Acquisition of businesses, net of cash acquired		(32,309)		(152,654)
Proceeds from sale of property, plant and equipment		5,231		1,303
NET CASH USED BY INVESTING ACTIVITIES		(79,470)		(200,746)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on short-term borrowings		(5,206)		(578)
Proceeds from long-term borrowings		—		400,000
Payments on long-term borrowings		(169)		(400,339)
Proceeds from exercise of stock options		6,394		24,981
Purchase of shares for treasury		(233,824)		(160,820)
Cash dividends paid to shareholders		(84,904)		(81,696)
NET CASH USED BY FINANCING ACTIVITIES		(317,709)		(218,452)
Effect of exchange rate changes on Cash and cash equivalents		(10,123)		(5,898)
DECREASE IN CASH AND CASH EQUIVALENTS		(77,781)		(121,115)

Cash and cash equivalents at beginning of period		377,262		393,787
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	299,481	$	272,672



	June 30, 2025		December 31, 2024
Raw materials	$	159,154	$	153,596
Work-in-process		131,368		123,406
Finished goods		330,918		267,035
Total	$	621,440	$	544,037


	June 30, 2025
2025	$	9,120
2026		13,635
2027		10,932
2028		9,050
2029		6,250
After 2029		12,300
Total lease payments	$	61,287
Less: Imputed interest		7,331
Operating lease liabilities	$	53,956



			June 30, 2025		December 31, 2024
Long-term debt	Interest Rate
Senior Unsecured Notes
2015 Notes - Series A due August 20, 2025	3.15	%	$	100,000	$	100,000
2015 Notes - Series B due August 20, 2030	3.35	%		100,000		100,000
2015 Notes - Series C due April 1, 2035	3.61	%		50,000		50,000
2015 Notes - Series D due April 1, 2045	4.02	%		100,000		100,000
2016 Notes - Series A due October 20, 2028	2.75	%		100,000		100,000
2016 Notes - Series B due October 20, 2033	3.03	%		100,000		100,000
2016 Notes - Series C due October 20, 2037	3.27	%		100,000		100,000
2016 Notes - Series D due October 20, 2041	3.52	%		50,000		50,000
2024 Notes - Series A due August 22, 2029	5.55	%		75,000		75,000
2024 Notes - Series B due August 22, 2031	5.62	%		75,000		75,000
2024 Notes - Series C due June 20, 2034	5.74	%		400,000		400,000
Other borrowings due through 2030	Variable⁽¹⁾			10		10
				1,250,010		1,250,010
Plus interest rate swap adjustment				3,016		3,355
Less current portion				100,004		100,004
Less debt issuance costs				2,627		2,810
Long-term debt, less current portion				1,150,395		1,150,551
Short-term debt
Amounts due to banks	Variable⁽²⁾			5,319		10,520
Current portion long-term debt				100,004		100,004
Total short-term debt				105,323		110,524
Total debt			$	1,255,718	$	1,261,075


Operating Leases	Balance Sheet Classification	June 30, 2025		December 31, 2024
Right-of-use assets	Other assets	$	53,206	$	54,276

Current liabilities	Other current liabilities	$	13,399	$	13,110
Noncurrent liabilities	Other liabilities		40,557		42,124
Total lease liabilities		$	53,956	$	55,234


		Three Months Ended June 30,				Six Months Ended June 30,
Derivatives by hedge designation	Classification of gain (loss)	2025		2024		2025		2024
Not designated as hedges:
Foreign exchange contracts	Selling, general & administrative expenses	$	13,625	$	(5,155)	$	21,958	$	(6,771)



Total gain (loss) recognized in AOCI, net of tax	June 30, 2025		December 31, 2024
Foreign exchange contracts	$	970	$	(812)
Forward starting swap agreements		17,287		18,067
Net investment contracts		(6,004)		20,403


		Three Months Ended June 30,				Six Months Ended June 30,
	(Loss) gain recognized in the
Derivative type	Consolidated Statements of Income:	2025		2024		2025		2024
Foreign exchange contracts	Sales	$	378	$	447	$	(335)	$	1,286
	Cost of goods sold		182		251		543		484
Forward starting swap agreements	Interest expense, net		689		66		1,378		66


			Quoted Prices in
			Active Markets for
			Identical Assets or		Significant Other		Significant
	Balance as of		Liabilities		Observable Inputs		Unobservable
Description	June 30, 2025		(Level 1)		(Level 2)		Inputs (Level 3)
Assets:
Foreign exchange contracts	$	8,068	$	—	$	8,068	$	—
Pension surplus		21,327		21,327		—		—
Total assets	$	29,395	$	21,327	$	8,068	$	—
Liabilities:
Foreign exchange contracts	$	3,381	$	—	$	3,381	$	—
Net investment contracts		32,040		—		32,040		—
Deferred compensation		54,016		—		54,016		—
Total liabilities	$	89,437	$	—	$	89,437	$	—


	Three Months Ended June 30,
												Favorable (Unfavorable)
	2025						2024					2025 vs. 2024
	Amount			% of Sales			Amount			% of Sales		$			%
Net sales	$	1,088,673					$	1,021,683				$	66,990		6.6	%
Cost of goods sold		683,126						637,870					(45,256)		(7.1)	%
Gross profit		405,547			37.3	%		383,813		37.6	%		21,734		5.7	%
Selling, general & administrative expenses		210,861			19.4	%		208,485		20.4	%		(2,376)		(1.1)	%
Rationalization and asset impairment net charges		2,542			0.2	%		26,490		2.6	%		23,948		90.4	%
Operating income		192,144			17.6	%		148,838		14.6	%		43,306		29.1	%
Interest expense, net		12,619						10,661					(1,958)		(18.4)	%
Other income (expense)		4,034						(1,553)					5,587		359.8	%
Income before income taxes		183,559			16.9	%		136,624		13.4	%		46,935		34.4	%
Income taxes		40,163						34,916					(5,247)		(15.0)	%
Effective tax rate		21.9	%					25.6	%				3.7	%
Net income	$	143,396			13.2	%	$	101,708		10.0	%	$	41,688		41.0	%
Diluted earnings per share	$	2.56					$	1.77				$	0.79		44.6	%


Three Months Ended June 30,			Change in Net Sales due to:
	Net Sales											Foreign			Net Sales
	2024		Volume			Price			Acquisitions			Exchange			2025
Lincoln Electric Holdings, Inc.	$	1,021,683	$	(23,847)		$	52,975		$	30,507		$	7,355		$	1,088,673
% Change
Lincoln Electric Holdings, Inc.				(2.3)	%		5.2	%		3.0	%		0.7	%		6.6	%


	June 30, 2025		December 31, 2024		June 30, 2024
Average operating working capital to Net sales ⁽¹⁾	18.4	%	16.9	%	18.0	%
Days sales in Inventories	117.3		106.0		117.0
Days sales in Accounts receivable	49.4		46.9		51.9
Average days in Trade accounts payable	56.6		45.8		56.3


	Twelve Months Ended June 30,
	2025			2024
Net income as reported	$	502,868		$	511,110
Plus: Interest expense (after-tax)		42,688			36,607
Less: Interest income (after-tax)		6,636			7,654
Net operating profit after taxes	$	538,920		$	540,063
Special items:
Rationalization and asset impairment net charges		31,172			16,237
Acquisition transaction costs		4,332			3,944
Pension settlement charges		3,792			845
Amortization of step up in value of acquired inventories		4,771			4,964
Loss on asset disposal		—			4,950
Tax effect of Special items ⁽¹⁾		(11,118)			2,357
Adjusted net operating profit after taxes	$	571,869		$	573,360

Invested Capital	June 30, 2025			June 30, 2024
Short-term debt	$	105,323		$	6,254
Long-term debt, less current portion		1,150,395			1,098,430
Total debt		1,255,718			1,104,684
Total equity		1,379,613			1,312,906
Invested capital	$	2,635,331		$	2,417,590

Return on invested capital as reported		20.4	%		22.3	%
Adjusted return on invested capital		21.7	%		23.7	%


					Total Number of
					Shares	Maximum Number
					Repurchased	of Shares that May
	Total Number of				as Part of Publicly	Yet be Purchased
	Shares		Average Price		Announced Plans or	Under the Plans or
Period	Repurchased		Paid Per Share		Programs	Programs ⁽²⁾
April 1 - 30, 2025	99,975	⁽¹⁾		$ 179.96	99,248	6,071,177
May 1 - 31, 2025	311,506	⁽¹⁾		$ 191.49	310,448	5,760,729
June 1 - 30, 2025	236,918	⁽¹⁾		$ 208.86	236,488	5,524,241
Total	648,399			$ 196.06	646,184




31.1	Certification of the Chair, President and Chief Executive Officer (Principal Executive Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 (filed herewith).
31.2	Certification of the Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 (filed herewith).
32.1	Certification of the Chair, President and Chief Executive Officer (Principal Executive Officer) and Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
104	Cover page Interactive Data File (formatted as Inline XBRL and contained in the Exhibit 101 attachments)
	Inline XBRL Taxonomy Extension Label Linkbase Document


		LINCOLN ELECTRIC HOLDINGS, INC.

		/s/ Gabriel Bruno
		Gabriel Bruno
		Executive Vice President, Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)
		July 31, 2025

Pril 2
Date: July 31, 2025
	/s/ Steven B. Hedlund
	Steven B. Hedlund
	Chair, President and Chief Executive Officer