• Lincoln Electric Reports Second Quarter 2023 Results

    Source: Nasdaq GlobeNewswire / 27 Jul 2023 07:30:01   America/New_York


     
    Second Quarter 2023 Highlights
    • Net sales increase 9.4% to record $1,061 million on 4.5% higher organic sales
       
    • Operating income margin of 16.8%; Adjusted operating income margin of 17.4%
       
    • Record EPS of $2.36; Record adjusted EPS of $2.44
       
    • Cash flows from operations increase 102% to record $199 million
       
    • Returned $90 million to shareholders through dividends and share repurchases

    CLEVELAND, July 27, 2023 (GLOBE NEWSWIRE) -- Lincoln Electric Holdings, Inc. (the “Company”) (Nasdaq: LECO) today reported second quarter 2023 net income of $137.3 million, or diluted earnings per share (EPS) of $2.36, which includes special item after-tax net charges of $4.9 million, or $0.08 EPS. This compares with prior year period net income of $127.8 million, or $2.18 EPS, which included special item after-tax net charges of $0.4 million. Excluding special items, second quarter 2023 adjusted net income was $142.2 million, or $2.44 adjusted EPS. This compares with adjusted net income of $128.2 million, or $2.18 adjusted EPS, in the prior year period.

    Second quarter 2023 sales increased 9.4% to $1,060.6 million reflecting a 4.5% increase in organic sales and a 5.2% benefit from acquisitions, partially offset by 0.2% unfavorable foreign exchange. Operating income for the second quarter 2023 was $178.0 million, or 16.8% of sales. This compares with operating income of $167.5 million, or 17.3% of sales, in the prior year period. Excluding special items, adjusted operating income was $184.2 million, or 17.4% of sales, as compared with $168.1 million, or 17.3% of sales, in the prior year period.

    “Our record second quarter performance, including adjusted operating income margin and earnings, demonstrates continued strong momentum in the business and excellent execution of our Higher Standard 2025 Strategy,” commented Christopher L. Mapes, Chairman, President and Chief Executive Officer. “Our strong profit performance across all segments reflects how we are winning in the market with an industry-leading portfolio of differentiated solutions and application experts, disciplined cost management and improved operational efficiency from our Lincoln Business System initiatives.” Mapes continued, “As announced earlier today, I am confident that our year-end leadership transition with Steve Hedlund serving as President and CEO, will continue the Company’s momentum and success in the years ahead.”

    Six Months 2023 Summary

    Net income for the six months ended June 30, 2023 was $259.3 million, or $4.44 EPS, which includes special item after-tax net charges of $7.2 million, or $0.13 EPS. This compares with prior period net income of $253.9 million, or $4.30 EPS, which included special item after-tax net gains of $1.0 million, or $0.01 EPS. Excluding these items, adjusted net income for the six months ended June 30, 2023 increased 5.4% to $266.5 million, or $4.57 EPS, compared with $252.9 million, or $4.29 EPS, in the comparable 2022 period.

    Sales increased 10.8% to $2,099.9 million in the six months ended June 30, 2023 reflecting a 6.5% increase in organic sales and a 5.4% benefit from acquisitions, partially offset by 1.0% unfavorable foreign exchange. Operating income for the six months ended June 30, 2023 was $342.4 million, or 16.3% of sales. This compares with operating income of $328.7 million, or 17.3% of sales, in the comparable 2022 period. Excluding special items, adjusted operating income was $353.3 million, or 16.8% of sales, as compared with $331.2 million, or 17.5% of sales, in the comparable 2022 period.

    Webcast Information

    A conference call to discuss second quarter 2023 financial results will be webcast live today, July 27, 2023, at 10:00 a.m., Eastern Time. Those interested in participating via webcast in listen-only mode can access the event here or on the Company's Investor Relations home page at https://ir.lincolnelectric.com. For participants who would like to participate via telephone, please register here to receive the dial-in number along with a unique PIN number that is required to access the call. A replay of the earnings call will be available via webcast on the Company's website.

    About Lincoln Electric

    Lincoln Electric is the world leader in the engineering, design, and manufacturing of advanced arc welding solutions, automated joining, assembly and cutting systems, plasma and oxy-fuel cutting equipment, and has a leading global position in brazing and soldering alloys. Lincoln is recognized as the Welding Expert™ for its leading materials science, software development, automation engineering, and application expertise, which advance customers’ fabrication capabilities to help them build a better world. Headquartered in Cleveland, Ohio, Lincoln has 71 manufacturing locations in 20 countries and a worldwide network of distributors and sales offices serving customers in over 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 (“adjusted EPS”), Organic sales, Cash conversion, adjusted net operating profit after taxes and adjusted return on invested capital (“adjusted ROIC”) 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 commercial and 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 the impact of the Russia-Ukraine conflict, political unrest, acts of terror, natural disasters and pandemics 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, 2022.


    Lincoln Electric Holdings, Inc.
    Financial Highlights
    (In thousands, except per share amounts)
    (Unaudited)    		 
    Consolidated Statements of Income               
                    Fav (Unfav) to 
      Three Months Ended June 30, Prior Year 
      2023 % of Sales 2022  % of Sales $ % 
    Net sales $1,060,565  100.0%$969,589  100.0 %$90,976  9.4 %
    Cost of goods sold  687,137  64.8% 636,108  65.6 % (51,029) (8.0)%
    Gross profit  373,428  35.2% 333,481  34.4 % 39,947  12.0 %
    Selling, general & administrative expenses  192,748  18.2% 166,792  17.2 % (25,956) (15.6)%
    Rationalization and asset impairment charges  2,667  0.3% (844) (0.1)% (3,511) (416.0)%
    Operating income  178,013  16.8% 167,533  17.3 % 10,480  6.3 %
    Interest expense, net  11,699  1.1% 6,459  0.7 % (5,240) (81.1)%
    Other income (expense)  6,746  0.6% (1,133) (0.1)% 7,879  695.4 %
    Income before income taxes  173,060  16.3% 159,941  16.5 % 13,119  8.2 %
    Income taxes  35,729  3.4% 32,118  3.3 % (3,611) (11.2)%
    Effective tax rate  20.6%    20.1 %   (0.5)%  
    Net income $137,331  12.9%$127,823  13.2 %$9,508  7.4 %
                      
    Basic earnings per share $2.39    $2.20    $0.19  8.6 %
    Diluted earnings per share $2.36    $2.18    $0.18  8.3 %
    Weighted average shares (basic)  57,479     58,016         
    Weighted average shares (diluted)  58,303     58,688         


                      
                 Fav (Unfav) to 
      Six Months Ended June 30, Prior Year 
      2023 % of Sales 2022 % of Sales $ % 
    Net sales $2,099,908  100.0%$1,895,037 100.0%$204,871  10.8 %
    Cost of goods sold  1,371,123  65.3% 1,231,779 65.0% (139,344) (11.3)%
    Gross profit  728,785  34.7% 663,258 35.0% 65,527  9.9 %
    Selling, general & administrative expenses  382,864  18.2% 333,478 17.6% (49,386) (14.8)%
    Rationalization and asset impairment charges  3,544  0.2% 1,041 0.1% (2,503) (240.4)%
    Operating income  342,377  16.3% 328,739 17.3% 13,638  4.1 %
    Interest expense, net  24,899  1.2% 12,657 0.7% (12,242) (96.7)%
    Other income  10,926  0.5% 3,500 0.2% 7,426  212.2 %
    Income before income taxes  328,404  15.6% 319,582 16.9% 8,822  2.8 %
    Income taxes  69,142  3.3% 65,729 3.5% (3,413) (5.2)%
    Effective tax rate  21.1%    20.6%   (0.5)%  
    Net income $259,262  12.3%$253,853 13.4%$5,409  2.1 %
                      
    Basic earnings per share $4.51    $4.35   $0.16  3.7 %
    Diluted earnings per share $4.44    $4.30   $0.14  3.3 %
    Weighted average shares (basic)  57,537     58,311        
    Weighted average shares (diluted)  58,353     58,970        


    Lincoln Electric Holdings, Inc.
    Financial Highlights
    (In thousands)
    (Unaudited)    		 
    Balance Sheet Highlights       
            
    Selected Consolidated Balance Sheet Data    June 30, 2023 December 31, 2022 
    Cash and cash equivalents $220,483 $197,150 
    Accounts receivable, net  570,294  541,529 
    Inventories  674,754  665,451 
    Total current assets  1,646,178  1,557,790 
    Property, plant and equipment, net  563,180  544,871 
    Total assets  3,311,188  3,180,546 
    Trade accounts payable  358,160  352,079 
    Total current liabilities  810,762  852,897 
    Short-term debt (1)  10,406  93,483 
    Long-term debt, less current portion  1,103,898  1,110,396 
    Total equity  1,201,424  1,034,041 
            
    Operating Working Capital June 30, 2023 December 31, 2022 
    Average operating working capital to Net sales (2)  18.9% 20.9%
            
    Invested Capital June 30, 2023 December 31, 2022 
    Short-term debt (1) $10,406 $93,483 
    Long-term debt, less current portion  1,103,898  1,110,396 
    Total debt  1,114,304  1,203,879 
    Total equity  1,201,424  1,034,041 
    Invested capital $2,315,728 $2,237,920 
            
    Total debt / invested capital  48.1% 53.8%
    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 June 30,   Six Months Ended June 30,  
      2023  2022   2023  2022  
    Operating income as reported $178,013  $167,533   $342,377  $328,739  
    Special items (pre-tax):              
    Rationalization and asset impairment charges (2)  2,667   (844)   3,544   1,041  
    Amortization of step up in value of acquired inventories (3)  3,545   1,459    7,401   1,459  
    Adjusted operating income (1) $184,225  $168,148   $353,322  $331,239  
    As a percent of total sales  17.4 % 17.3 %  16.8 % 17.5 %
                   
    Net income as reported $137,331  $127,823   $259,262  $253,853  
    Special items:              
    Rationalization and asset impairment charges (2)  2,667   (844)   3,544   1,041  
    Pension settlement net gains (4)  —   —    —   (4,273) 
    Amortization of step up in value of acquired inventories (3)  3,545   1,459    7,401   1,459  
    Gain on asset disposal (5)  —   —    (1,646)  —  
    Tax effect of Special items (6)  (1,311)  (252)   (2,129)  789  
    Adjusted net income (1)  142,232   128,186    266,432   252,869  
    Interest expense, net  11,699   6,459    24,899   12,657  
    Income taxes as reported  35,729   32,118    69,142   65,729  
    Tax effect of Special items (6)  1,311   252    2,129   (789) 
    Adjusted EBIT (1) $190,971  $167,015   $362,602  $330,466  
                   
    Effective tax rate as reported  20.6 % 20.1 %  21.1 % 20.6 %
    Net special item tax impact  0.1 % 0.1 %  0.0 % (0.2)%
    Adjusted effective tax rate (1)  20.7 % 20.2 %  21.1 % 20.4 %
                   
    Diluted earnings per share as reported $2.36  $2.18   $4.44  $4.30  
    Special items per share  0.08   —    0.13   (0.01) 
    Adjusted diluted earnings per share (1) $2.44  $2.18   $4.57  $4.29  
                   
    Weighted average shares (diluted)  58,303   58,688    58,353   58,970  

    (1) Adjusted operating income, adjusted net income, adjusted EBIT, adjusted effective tax rate and adjusted diluted EPS are non-GAAP financial measures. Refer to Non-GAAP Information section.
    (2) 2023 charges are primarily related to restructuring activities and impairments within International Welding. 2022 charges are primarily related to severance, gains or losses on the disposal of assets.
    (3) Related to acquisitions and are included in Cost of goods sold.
    (4) Pension net gains primarily due to the final settlement associated with the termination of a pension plan and are included in Other income (expense).
    (5) Gain on asset disposal and 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 June 30,  
    Return on Invested Capital    2023  2022  
    Net income as reported $477,633  $360,037  
    Plus: Interest expense (after-tax)  33,234   18,832  
    Less: Interest income (after-tax)  1,999   986  
    Net operating profit after taxes $508,868  $377,883  
    Special Items:       
    Rationalization and asset impairment charges  14,291   6,075  
    Acquisition transaction costs (2)  6,003   —  
    Pension settlement charges (3)  —   115,693  
    Amortization of step up in value of acquired inventories  7,048   5,422  
    Gain on asset disposal  (1,646)  —  
    Tax effect of Special items (4)  (4,110)  (44,405) 
    Adjusted net operating profit after taxes (1) $530,454  $460,668  
            
    Invested Capital June 30, 2023 June 30, 2022 
    Short-term debt $10,406  $125,458  
    Long-term debt, less current portion  1,103,898   712,908  
    Total debt  1,114,304   838,366  
    Total equity  1,201,424   912,983  
    Invested capital $2,315,728  $1,751,349  
            
    Return on invested capital as reported  22.0 % 21.6 %
    Adjusted return on invested capital (1)  22.9 % 26.3 %

    (1) Adjusted net operating profit after taxes and adjusted ROIC are non-GAAP financial measures. Refer to Non-GAAP Information section.
    (2) Related to acquisitions and are included in Selling, general & administrative expenses.
    (3) Related to lump sum pension payments due to the final settlement associated with the termination of a pension plan.
    (4) 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 June 30,
     2023  2022 
    OPERATING ACTIVITIES:     
    Net income$137,331  $127,823 
    Adjustments to reconcile Net income to Net cash provided by operating activities:     
    Rationalization and asset impairment net charges 1,134   (1,301)
    Depreciation and amortization 21,917   19,868 
    Equity earnings in affiliates, net (106)  (67)
    Other non-cash items, net 22,180   11,043 
    Changes in operating assets and liabilities, net of effects from acquisitions:     
    Decrease (Increase) in accounts receivable 8,774   (17,839)
    Decrease (Increase) in inventories 76   (57,187)
    (Decrease) Increase in trade accounts payable (5,275)  4,968 
    Net change in other current assets and liabilities 21,574   14,210 
    Net change in other long-term assets and liabilities (8,760)  (3,306)
    NET CASH PROVIDED BY OPERATING ACTIVITIES 198,845   98,211 
          
    INVESTING ACTIVITIES:     
    Capital expenditures (21,765)  (15,930)
    Acquisition of businesses, net of cash acquired (32,657)  (82)
    Proceeds from sale of property, plant and equipment 578   1,123 
    Purchase of marketable securities (6,453)  — 
    NET CASH USED BY INVESTING ACTIVITIES (60,297)  (14,889)
          
    FINANCING ACTIVITIES:     
    (Payments on) short-term borrowings (28,277)  (33,448)
    (Payments on) proceeds from long-term borrowings (6,875)  8,969 
    Proceeds from exercise of stock options 9,534   382 
    Purchase of shares for treasury (53,075)  (25,119)
    Cash dividends paid to shareholders (36,889)  (32,553)
    NET CASH USED BY FINANCING ACTIVITIES (115,582)  (81,769)
          
    Effect of exchange rate changes on Cash and cash equivalents (1,286)  (3,130)
    INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 21,680   (1,577)
    Cash and cash equivalents at beginning of period 198,803   154,373 
    Cash and cash equivalents at end of period$220,483  $152,796 
          
    Cash dividends paid per share$0.64  $0.56 


    Lincoln Electric Holdings, Inc.
    Financial Highlights
    (In thousands, except per share amounts)
    (Unaudited)
           
    Condensed Consolidated Statements of Cash Flows      
         Six Months Ended June 30,
      2023  2022 
    OPERATING ACTIVITIES:      
    Net income $259,262  $253,853 
    Adjustments to reconcile Net income to Net cash provided by operating activities:      
    Rationalization and asset impairment net charges  1,134   (113)
    Depreciation and amortization  43,212   39,759 
    Equity earnings in affiliates, net  (294)  (180)
    Other non-cash items, net  21,680   3,822 
    Changes in operating assets and liabilities, net of effects from acquisitions:      
    Increase in accounts receivable  (18,890)  (103,959)
    Decrease (Increase) in inventories  6,267   (112,594)
    Increase in trade accounts payable  1,566   44,252 
    Net change in other current assets and liabilities  15,474   21,174 
    Net change in other long-term assets and liabilities  (6,635)  (4,713)
    NET CASH PROVIDED BY OPERATING ACTIVITIES  322,776   141,301 
           
    INVESTING ACTIVITIES:      
    Capital expenditures  (40,552)  (34,602)
    Acquisition of businesses, net of cash acquired  (32,657)  (22,095)
    Proceeds from sale of property, plant and equipment  3,892   1,692 
    Purchase of marketable securities  (7,029)  — 
    NET CASH USED BY INVESTING ACTIVITIES  (76,346)  (55,005)
           
    FINANCING ACTIVITIES:      
    (Payments on) proceeds from short-term borrowings  (72,224)  64,960 
    (Payments on) proceeds from long-term borrowings  (6,978)  6,869 
    Proceeds from exercise of stock options  12,010   1,417 
    Purchase of shares for treasury  (85,234)  (129,698)
    Cash dividends paid to shareholders  (74,472)  (65,914)
    NET CASH USED BY FINANCING ACTIVITIES  (226,898)  (122,366)
           
    Effect of exchange rate changes on Cash and cash equivalents  3,801   (4,092)
    INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS  23,333   (40,162)
    Cash and cash equivalents at beginning of period  197,150   192,958 
    Cash and cash equivalents at end of period $220,483  $152,796 
           
    Cash dividends paid per share $1.28  $1.12 


    Lincoln Electric Holdings, Inc.
    Segment Highlights (1)
    (In thousands)
    (Unaudited)    		 
                     
         Americas International The Harris Corporate /    
      Welding Welding Products Group Eliminations Consolidated 
    Three months ended June 30, 2023                
    Net sales $676,966 $253,403 $130,196 $—  $1,060,565 
    Inter-segment sales  30,850  8,292  2,867  (42,009)  — 
    Total sales $707,816 $261,695 $133,063 $(42,009) $1,060,565 
                     
    Net income             $137,331 
    As a percent of total sales              12.9%
                     
    EBIT (1) $136,913 $30,519 $19,510 $(2,183) $184,759 
    As a percent of total sales  19.3% 11.7% 14.7%    17.4%
    Special items charges (3)  2,957  3,255  —  —   6,212 
    Adjusted EBIT (2) $139,870 $33,774 $19,510 $(2,183) $190,971 
    As a percent of total sales  19.8% 12.9% 14.7%    18.0%
                     
    Three months ended June 30, 2022                
    Net sales $595,659 $236,629 $137,301 $—  $969,589 
    Inter-segment sales  29,031  9,527  2,866  (41,424)  — 
    Total sales $624,690 $246,156 $140,167 $(41,424) $969,589 
                     
    Net income             $127,823 
    As a percent of total sales              13.2%
                     
    EBIT (1) $117,606 $34,855 $17,922 $(3,983) $166,400 
    As a percent of total sales  18.8% 14.2% 12.8%    17.2%
    Special items charges (4)  461  154  —  —   615 
    Adjusted EBIT (2) $118,067 $35,009 $17,922 $(3,983) $167,015 
    As a percent of total sales  18.9% 14.2% 12.8%    17.2%

    (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 2023 primarily reflect amortization of step up in value of acquired inventories of $2,957 and $588 in Americas and International Welding, respectively, Rationalization and asset impairment net charges of $2,667 in International Welding.
    (4) Special items in 2022 primarily reflect the amortization of step up in value of acquired inventories of $1,459 in Americas Welding related to an acquisition and Rationalization and asset impairment net gains of $998 in Americas Welding and net charges of $154 in International Welding.


    Lincoln Electric Holdings, Inc.
    Segment Highlights
    (In thousands)
    (Unaudited)    		 
                     
         Americas International The Harris Corporate /    
      Welding Welding Products Group Eliminations Consolidated 
    Six months ended June 30, 2023                
    Net sales $1,335,611  $505,819 $258,478 $—  $2,099,908  
    Inter-segment sales  63,168   15,045  5,764  (83,977)  —  
    Total sales $1,398,779  $520,864 $264,242 $(83,977) $2,099,908  
                     
    Net income             $259,262  
    As a percent of total sales              12.3 %
                     
    EBIT (1) $266,582  $59,814 $38,493 $(11,586) $353,303  
    As a percent of total sales  19.1 % 11.5% 14.6%    16.8 %
    Special items charges (3)  5,742   3,557  —  —   9,299  
    Adjusted EBIT (2) $272,324  $63,371 $38,493 $(11,586) $362,602  
    As a percent of total sales  19.5 % 12.2% 14.6%    17.3 %
                     
    Six months ended June 30, 2022                
    Net sales $1,129,714  $494,670 $270,653 $—  $1,895,037  
    Inter-segment sales  57,187   15,755  5,928  (78,870)  —  
    Total sales $1,186,901  $510,425 $276,581 $(78,870) $1,895,037  
                     
    Net income             $253,853  
    As a percent of total sales              13.4 %
                     
    EBIT (1) $232,909  $70,595 $37,520 $(8,785) $332,239  
    As a percent of total sales  19.6 % 13.8% 13.6%    17.5 %
    Special items charges (4)  (3,274)  1,501  —  —   (1,773) 
    Adjusted EBIT (2) $229,635  $72,096 $37,520 $(8,785) $330,466  
    As a percent of total sales  19.3 % 14.1% 13.6%    17.4 %

    (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 2023 primarily reflect amortization of step up in value of acquired inventories of $5,742 and $1,659 in Americas and International Welding, respectively, Rationalization and asset impairment net charges of $3,544 in International Welding, and a gain on asset disposal of $1,646 in International Welding.
    (4) Special items in 2022 primarily reflect Rationalization and asset impairment charges of $2,039 in International Welding and net gains of $998 in Americas Welding, amortization of step up in value of acquired inventories of $1,459 in Americas Welding and a $3,735 net gain related to final settlement associated with the termination of a pension plan in Americas Welding.

    Lincoln Electric Holdings, Inc.
    Change in Net Sales by Segment
    (In thousands)
    (Unaudited)    		 
                       
    Three Months Ended June 30th Change in Net Sales by Segment 
           Change in Net Sales due to:          
     Net Sales          Foreign Net Sales 
     2022 Volume Acquisitions Price Exchange 2023  
    Operating Segments                  
    Americas Welding$595,659 $34,384  $43,947 $5,974 $(2,998) $676,966  
    International Welding 236,629  9,006   6,009  999  760   253,403  
    The Harris Products Group 137,301  (8,853)  —  1,408  340   130,196  
    Consolidated$969,589 $34,537  $49,956 $8,381 $(1,898) $1,060,565  
                       
    % Change                  
    Americas Welding    5.8 % 7.4% 1.0% (0.5)% 13.6 %
    International Welding    3.8 % 2.5% 0.4% 0.3 % 7.1 %
    The Harris Products Group    (6.4)% —  1.0% 0.2 % (5.2)%
    Consolidated    3.6 % 5.2% 0.9% (0.2)% 9.4 %


    Six Months Ended June 30th Change in Net Sales by Segment             
            Change in Net Sales due to:    
      Net Sales          Foreign Net Sales 
      2022 Volume Acquisitions Price Exchange 2023  
    Operating Segments                   
    Americas Welding $1,129,714 $93,034  $89,196 $30,673 $(7,006) $1,335,611  
    International Welding  494,670  (5,651)  13,365  15,868  (12,433)  505,819  
    The Harris Products Group  270,653  (13,870)  —  1,973  (278)  258,478  
    Consolidated $1,895,037 $73,513  $102,561 $48,514 $(19,717) $2,099,908  
                        
    % Change                   
    Americas Welding     8.2 % 7.9% 2.7% (0.6)% 18.2 %
    International Welding     (1.1)% 2.7% 3.2% (2.5)% 2.3 %
    The Harris Products Group     (5.1)% —  0.7% (0.1)% (4.5)%
    Consolidated     3.9 % 5.4% 2.6% (1.0)% 10.8 %

    Contact

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

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