Lincoln Electric Holdings Inc 10-Q for FY2025 Q1

Lincoln Electric Holdings Inc (LECO)

10-Q 2025-04-30 For: 2025-03-31

Added on April 04, 2026

About this 10-Q

Lincoln Electric Holdings Inc filed this 10-Q on April 30, 2025, covering the quarter ended March 31, 2025 (FY2025 Q1).

Headline figures

Quarter ended March 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1B; up 2.4% from $981.2M a year earlier
Net income: $118.49M; down 4.0% from net income of $123.42M a year earlier
Diluted EPS: $2.10; down 1.9% from $2.14 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)		7
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS		8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		20
Item 3. Quantitative and Qualitative Disclosures About Market Risk		28
Item 4. Controls and Procedures		28

PART II. OTHER INFORMATION		28
Item 1. Legal Proceedings		28
Item 1A. Risk Factors		29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		29
Item 4. Mine Safety Disclosures		29
Item 5. Other Information		30
Item 6. Exhibits		35
Signatures		31


	Three Months Ended March 31,
	2025		2024
Net sales (Note 2)	$	1,004,388	$	981,197
Cost of goods sold		638,940		612,798
Gross profit		365,448		368,399
Selling, general & administrative expenses		196,665		198,747
Rationalization and asset impairment net charges (Note 6)		3,865		4,605
Operating income		164,918		165,047
Interest expense, net		12,127		8,779
Other income		444		2,262
Income before income taxes		153,235		158,530
Income taxes (Note 11)		34,748		35,115
Net income	$	118,487	$	123,415

Basic earnings per share (Note 3)	$	2.11	$	2.17
Diluted earnings per share (Note 3)	$	2.10	$	2.14
Cash dividends declared per share	$	0.75	$	0.71


	March 31, 2025		December 31, 2024
	(UNAUDITED)		(NOTE 1)
ASSETS
Current Assets
Cash and cash equivalents	$	394,705	$	377,262
Accounts receivable (less allowance for doubtful accounts of $15,112 in 2025; $12,674 in 2024)		522,721		481,979
Inventories (Note 8)		574,329		544,037
Other current assets		237,872		242,003
Total Current Assets		1,729,627		1,645,281
Property, plant and equipment (less accumulated depreciation of $884,856 in 2025; $865,634 in 2024)		636,158		619,181
Goodwill		813,698		804,927
Other assets		445,591		450,753
TOTAL ASSETS	$	3,625,074	$	3,520,142
LIABILITIES AND EQUITY
Current Liabilities
Short-term debt (Note 10)	$	109,620	$	110,524
Trade accounts payable		365,267		296,590
Accrued employee compensation and benefits		113,767		104,374
Other current liabilities		381,200		367,314
Total Current Liabilities		969,854		878,802
Long-term debt, less current portion (Note 10)		1,150,473		1,150,551
Other liabilities		164,577		163,356
Total Liabilities		2,284,904		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 55,826,284 shares in 2025 and 56,211,219 in 2024		9,858		9,858
Additional paid-in capital		581,250		566,740
Retained earnings		4,067,213		3,993,016
Accumulated other comprehensive loss		(270,912)		(300,135)
Treasury shares, at cost - 42,755,150 shares in 2025 and 42,370,215 shares in 2024		(3,047,239)		(2,942,046)
Total Equity		1,340,170		1,327,433
TOTAL LIABILITIES AND TOTAL EQUITY	$	3,625,074	$	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

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 March 31, 2025
Net sales	$	653,107	$	219,061	$	132,220	$	—	$	1,004,388
Inter-segment sales		30,372		6,832		3,984		(41,188)		—
Total		683,479		225,893		136,204		(41,188)		1,004,388
Cost of goods sold		417,700		163,442		97,974		(40,176)		638,940
Gross profit		265,779		62,451		38,230		(1,012)		365,448
Other segment expenses⁽³⁾		143,716		40,851		14,079		1,440		200,086
EBIT		122,063		21,600		24,151		(2,452)		165,362
Special items charge ⁽¹⁾		2,135		1,412		178		802		4,527
Adjusted EBIT	$	124,198	$	23,012	$	24,329	$	(1,650)	$	169,889
Special items charge ⁽¹⁾										(4,527)
Interest income										2,255
Interest expense										(14,382)
Income before income taxes									$	153,235

Total assets	$	2,445,066	$	1,093,775	$	388,804	$	(302,571)	$	3,625,074
Capital expenditures		21,766		3,608		1,575		—		26,949
Depreciation and amortization		16,114		5,378		2,663		(371)		23,784

Three Months Ended March 31, 2024
Net sales	$	624,099	$	235,761	$	121,337	$	—	$	981,197
Inter-segment sales		29,978		8,408		3,093		(41,479)		—
Total		654,077		244,169		124,430		(41,479)		981,197
Cost of goods sold		388,605		175,047		90,730		(41,584)		612,798
Gross profit		265,472		69,122		33,700		105		368,399
Other segment expenses⁽³⁾		129,372		44,415		15,358		11,945		201,090
EBIT	$	136,100	$	24,707	$	18,342	$	(11,840)	$	167,309
Special items charge ⁽²⁾		—		3,069		1,536		1,762		6,367
Adjusted EBIT	$	136,100	$	27,776	$	19,878	$	(10,078)	$	173,676
Special items charge ⁽²⁾										(6,367)
Interest income										3,221
Interest expense										(12,000)
Income before income taxes									$	158,530

Total assets	$	2,354,812	$	987,321	$	353,485	$	(315,901)	$	3,379,717
Capital expenditures		21,853		3,423		980		—		26,256
Depreciation and amortization		14,086		5,313		2,426		(239)		21,586


	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		(6,693)		(2,974)		(746)		(10,413)
Charged to expense		2,135		1,552		178		3,865
Balance at March 31, 2025	$	1,070	$	6,140	$	388	$	7,598


	Three Months Ended March 31, 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		1,148		—		29,679		30,827
Amounts reclassified from AOCI		(319)		(1,285)		—		(1,604)
Net current-period other comprehensive income (loss)		829		(1,285)		29,679		29,223
Balance at March 31, 2025	$	18,084	$	(2,333)	$	(286,663)	$	(270,912)


	Three Months Ended March 31, 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		4,528		—		(13,395)		(8,867)
Amounts reclassified from AOCI		(813)		73		—		(740)
Net current-period other comprehensive income (loss)		3,715		73		(13,395)		(9,607)
Balance at March 31, 2024	$	20,251	$	(1,923)	$	(257,782)	$	(239,454)



	March 31, 2025		December 31, 2024
Raw materials	$	162,629	$	153,596
Work-in-process		120,963		123,406
Finished goods		290,737		267,035
Total	$	574,329	$	544,037


Operating Leases	Balance Sheet Classification	March 31, 2025		December 31, 2024
Right-of-use assets	Other assets	$	51,324	$	54,276

Current liabilities	Other current liabilities	$	12,833	$	13,110
Noncurrent liabilities	Other liabilities		39,445		42,124
Total lease liabilities		$	52,278	$	55,234


	Three Months Ended March 31,
	2025		2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	118,487	$	123,415
Adjustments to reconcile Net income to Net cash provided by operating activities:
Rationalization and asset impairment net charges		—		64
Depreciation and amortization		23,784		21,586
Deferred income taxes		(5,838)		(7,348)
Stock-based compensation		8,352		14,190
Other, net		282		5,104
Changes in operating assets and liabilities, net of effects from acquisitions:
Increase in accounts receivable		(34,108)		(9,603)
Increase in inventories		(20,167)		(9,416)
Decrease in other current assets		2,057		3,331
Increase in trade accounts payable		64,884		3,957
Increase (decrease) in other current liabilities		21,206		(8,121)
Net change in other assets and liabilities		6,754		(3,865)
NET CASH PROVIDED BY OPERATING ACTIVITIES		185,693		133,294
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(26,949)		(26,256)
Proceeds from sale of property, plant and equipment		4,646		316
NET CASH USED BY INVESTING ACTIVITIES		(22,303)		(25,940)
CASH FLOWS FROM FINANCING ACTIVITIES
(Payments on) proceeds from short-term borrowings		(904)		2,016
Payments on long-term borrowings		(169)		(169)
Proceeds from exercise of stock options		6,254		24,438
Purchase of shares for treasury		(106,694)		(110,405)
Cash dividends paid to shareholders		(42,975)		(41,280)
NET CASH USED BY FINANCING ACTIVITIES		(144,488)		(125,400)
Effect of exchange rate changes on Cash and cash equivalents		(1,459)		(763)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		17,443		(18,809)

Cash and cash equivalents at beginning of period		377,262		393,787
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	394,705	$	374,978


	March 31, 2025
2025	$	12,241
2026		12,499
2027		9,909
2028		8,125
2029		5,411
After 2029		11,576
Total lease payments	$	59,761
Less: Imputed interest		7,483
Operating lease liabilities	$	52,278



			March 31, 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⁾			9		10
				1,250,009		1,250,010
Plus interest rate swap adjustment				3,186		3,355
Less current portion				100,004		100,004
Less debt issuance costs				2,718		2,810
Long-term debt, less current portion				1,150,473		1,150,551
Short-term debt
Amounts due to banks	Variable⁽²⁾			9,616		10,520
Current portion long-term debt				100,004		100,004
Total short-term debt				109,620		110,524
Total debt			$	1,260,093	$	1,261,075


	March 31, 2025								December 31, 2024
	Other		Other						Other		Other
	Current		Current		Other		Other		Current		Current		Other		Other
Derivatives by hedge designation	Assets		Liabilities		Assets		Liabilities		Assets		Liabilities		Assets		Liabilities
Designated as hedging instruments:
Foreign exchange contracts	$	1,131	$	822	$	—	$	—	$	1,663	$	2,972	$	—	$	—
Net investment contracts		—		8,479		—		—		10,276		—		—		—
Not designated as hedging instruments:
Foreign exchange contracts		893		1,330		—		—		1,560		4,251		—		—
Total derivatives	$	2,024	$	10,631	$	—	$	—	$	13,499	$	7,223	$	—	$	—


		Three Months Ended March 31,
Derivatives by hedge designation	Classification of gain (loss)	2025		2024
Not designated as hedges:
Foreign exchange contracts	Selling, general & administrative expenses	$	8,333	$	(1,615)



Total gain (loss) recognized in AOCI, net of tax	March 31, 2025		December 31, 2024
Foreign exchange contracts	$	394	$	(812)
Forward starting swap agreements		17,690		18,067
Net investment contracts		13,583		20,403


		Three Months Ended March 31,
	(Loss) gain recognized in the
Derivative type	Consolidated Statements of Income:	2025		2024
Foreign exchange contracts	Sales	$	(713)	$	839
	Cost of goods sold		361		232
Commodity contracts	Cost of goods sold		—		2
Forward starting swap agreements	Interest expense, net		689		—


			Quoted Prices in
			Active Markets for
			Identical Assets or		Significant Other		Significant
	Balance as of		Liabilities		Observable Inputs		Unobservable
Description	March 31, 2025		(Level 1)		(Level 2)		Inputs (Level 3)
Assets:
Foreign exchange contracts	$	2,024	$	—	$	2,024	$	—
Pension surplus		23,691		23,691		—		—
Total assets	$	25,715	$	23,691	$	2,024	$	—
Liabilities:
Foreign exchange contracts	$	2,152	$	—	$	2,152	$	—
Net investment contracts		8,479		—		8,479		—
Deferred compensation		53,356		—		53,356		—
Total liabilities	$	63,987	$	—	$	63,987	$	—


	Three Months Ended March 31,
												Favorable (Unfavorable)
	2025						2024					2025 vs. 2024
	Amount			% of Sales			Amount			% of Sales		$			%
Net sales	$	1,004,388					$	981,197				$	23,191		2.4	%
Cost of goods sold		638,940						612,798					(26,142)		(4.3)	%
Gross profit		365,448			36.4	%		368,399		37.5	%		(2,951)		(0.8)	%
Selling, general & administrative expenses		196,665			19.6	%		198,747		20.3	%		2,082		1.0	%
Rationalization and asset impairment net charges		3,865			0.4	%		4,605		0.5	%		740		16.1	%
Operating income		164,918			16.4	%		165,047		16.8	%		(129)		(0.1)	%
Interest expense, net		12,127						8,779					(3,348)		(38.1)	%
Other income		444						2,262					(1,818)		(80.4)	%
Income before income taxes		153,235			15.3	%		158,530		16.2	%		(5,295)		(3.3)	%
Income taxes		34,748						35,115					367		1.0	%
Effective tax rate		22.7	%					22.2	%				(0.5)	%
Net income	$	118,487			11.8	%	$	123,415		12.6	%	$	(4,928)		(4.0)	%
Diluted earnings per share	$	2.10					$	2.14				$	(0.04)		(1.9)	%


Three Months Ended March 31,			Change in Net Sales due to:
	Net Sales											Foreign			Net Sales
	2024		Volume			Price			Acquisitions			Exchange			2025
Lincoln Electric Holdings, Inc.	$	981,197	$	(37,601)		$	25,731		$	48,142		$	(13,081)		$	1,004,388
% Change
Lincoln Electric Holdings, Inc.				(3.8)	%		2.6	%		4.9	%		(1.3)	%		2.4	%


	March 31, 2025		December 31, 2024		March 31, 2024
Average operating working capital to Net sales ⁽¹⁾	17.8	%	16.9	%	18.8	%
Days sales in Inventories	115.7		106.0		120.5
Days sales in Accounts receivable	50.5		46.9		53.6
Average days in Trade accounts payable	58.6		45.8		54.9


	Twelve Months Ended March 31,
	2025			2024
Net income as reported	$	461,180		$	546,733
Plus: Interest expense (after-tax)		41,450			36,519
Less: Interest income (after-tax)		6,868			6,793
Net operating profit after taxes	$	495,762		$	576,459
Special items:
Rationalization and asset impairment net charges		55,120			(7,586)
Acquisition transaction costs		6,085			1,762
Pension settlement charges		3,792			845
Amortization of step up in value of acquired inventories		4,883			8,397
Loss on asset disposal		4,950			—
Tax effect of Special items ⁽¹⁾		(11,545)			2,228
Adjusted net operating profit after taxes	$	559,047		$	582,105

Invested Capital	March 31, 2025			March 31, 2024
Short-term debt	$	109,620		$	4,720
Long-term debt, less current portion		1,150,473			1,102,677
Total debt		1,260,093			1,107,397
Total equity		1,340,170			1,307,828
Invested capital	$	2,600,263		$	2,415,225

Return on invested capital as reported		19.1	%		23.9	%
Adjusted return on invested capital		21.5	%		24.1	%


					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⁾
January 1 - 31, 2025	130,719	⁽¹⁾		$ 191.92	130,245	6,551,864
February 1 - 28, 2025	130,991	⁽¹⁾		203.47	117,227	6,434,637
March 1 - 31, 2025	280,582	⁽¹⁾		195.86	264,212	6,170,425
Total	542,292			$ 196.75	511,684




10.1*	Form of Stock Option Agreement for Executive Officers (filed herewith).
10.2*	Form of Restricted Stock Unit Agreement for Executive Officers (filed herewith).
10.3*	Form of Performance Share Award Agreement for Executive Officers (filed herewith).
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

* Reflects management contract or other compensatory arrangement required to be filed as an exhibit pursuant to Item 15(b) of this report


		LINCOLN ELECTRIC HOLDINGS, INC.

		/s/ Gabriel Bruno
		Gabriel Bruno
		Executive Vice President, Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)
		April 30, 2025

Pril 2
Date: April 30, 2025
	/s/ Steven B. Hedlund
	Steven B. Hedlund
	Chair, President and Chief Executive Officer