Attached files
| file | filename |
|---|---|
| 8-K - 8-K - LINCOLN ELECTRIC HOLDINGS INC | a11-5971_18k.htm |
Exhibit 99.1
Media Contact: Roy L. Morrow (216) 383-4893
Roy_Morrow@lincolnelectric.com
Investors Contact: Earl L. Ward (216) 383-5067
Earl_Ward@lincolnelectric.com
Lincoln Electric reports 4Q’10 Sales increase of 22.0%;
4Q Operating income increase of 34.3% or 26.3%, as adjusted;
4Q EPS of $0.98 or $0.90, as adjusted
|
|
Fourth Quarter 2010 Highlights |
|
|
§ Sales were $564.3 million, an increase of 22.0% from the Fourth Quarter 2009 |
|
|
§ Operating income increased 34.3% to $52.3 million from $39.0 million in the Fourth Quarter 2009 |
|
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§ Excluding special items, adjusted operating income increased 26.3% to $54.5 million from $43.2 million in the Fourth Quarter 2009 |
|
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§ Net income increased 70.5% to $41.5 million, or $0.98 per diluted share, from $24.3 million, or $0.57 per diluted share, in the Fourth Quarter 2009 |
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§ Excluding special items, adjusted net income increased 38.2% to $38.3 million, or $0.90 per diluted share, from $27.7 million, or $0.65 per diluted share, in the Fourth Quarter 2009 |
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CLEVELAND, Ohio, U.S.A., February 18, 2011 -- Lincoln Electric Holdings, Inc. (the “Company”) (Nasdaq: LECO) today reported fourth quarter 2010 net income of $41.5 million, or $0.98 per diluted share. Sales were $564.3 million in the fourth quarter 2010 versus $462.4 million in the comparable 2009 period, an increase of 22.0%. Operating income for the fourth quarter increased $13.4 million to $52.3 million, or 9.3% of sales, from $39.0 million in the comparable 2009 period. Adjusted operating income in the quarter was $54.5 million, or 9.7% of sales.
- more -
Lincoln Electric Reports Fourth Quarter 2010 Financial Results
Net income for the fourth quarter 2010 was $41.5 million, or $0.98 per diluted share, compared with net income of $24.3 million, or $0.57 per diluted share, in the fourth quarter 2009. Adjusted net income was $38.3 million, or $0.90 per diluted share, compared with $27.7 million, or $0.65 per diluted share, in the fourth quarter 2009. The effective tax rate for the fourth quarter 2010 was 20.1%, or 29.1% as adjusted, compared with 40.1% in 2009.
“We are pleased with our operating results for the fourth quarter and full year 2010. Our year over year sales continued to be strong and provides good momentum as we focus our attention to 2011,” said John M. Stropki, Chairman and Chief Executive Officer.
“Current demand levels are positive and we are seeing improvement in most market segments and geographic regions. Our focus on new products, market share gains and productivity provides good upside for leverage as the global recovery continues into 2011. Our strong financial position and dedicated workforce continue to provide the flexibility and focus to execute our long-term strategic objectives to the benefit of our customers, shareholders and employees.”
Net cash provided by operating activities was $53.3 million in the fourth quarter compared with $19.0 million for the comparable period in 2009.
Sales for 2010 were $2.1 billion versus $1.7 billion in 2009, an increase of 19.7%. Operating income for 2010 increased $93.2 million to $186.4 million, or 9.0% of sales, from $93.2 million in 2009. Adjusted operating income in 2010 was $189.2 million, or 9.1% of sales.
Net income for 2010 was $130.2 million, or $3.06 per diluted share, compared with net income of $48.6 million, or $1.14 per diluted share, for 2009. Adjusted net income was $129.6 million, or $3.04 per diluted share, compared with $73.1 million, or $1.71 per diluted share, for 2009. The effective tax rate for 2010 was 29.3%, or 31.6% as adjusted, compared with 43.7% in 2009.
Net cash provided by operating activities was $157.0 million in 2010 compared with $250.4 million in 2009. The Company returned $87.1 million to shareholders through the payment of $47.4 million in dividends and the repurchase of $39.7 million of the Company’s shares for treasury during 2010.
- more -
Lincoln Electric Reports Fourth Quarter 2010 Financial Results
The Company’s Board of Directors declared a quarterly cash dividend of $0.31 per share, which was paid on January 14, 2011 to holders of record as of December 31, 2010.
Financial results for the fourth quarter 2010 can also be obtained at http://www.lincolnelectric.com/InvestorNews.
A conference call to discuss the fourth quarter 2010 financial results is scheduled for today, Friday, February 18, 2011, at 10:00 a.m., Eastern Time. An audio webcast of the call is accessible through the Company’s website at http://www.lincolnelectric.com/InvestorWebcasts/.
Adjusted operating income, adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures that management believes are important to investors to evaluate and compare the Company’s financial performance from period to period. Management uses this information in assessing and evaluating the Company’s underlying operating performance. Non-GAAP financial measures should be read in conjunction with the GAAP financial measures, as non-GAAP measures are merely a supplement to, and not a replacement for, GAAP financial measures. Please refer to the attached schedule for a reconciliation of non-GAAP financial measures to the related GAAP financial measures.
Lincoln Electric is the world leader in the design, development and manufacture of arc welding products, robotic arc welding systems, plasma and oxyfuel cutting equipment and has a leading global position in the brazing and soldering alloys market. Headquartered in Cleveland, Ohio, Lincoln has 40 manufacturing locations, including operations and joint ventures in 19 countries and a worldwide network of distributors and sales offices covering more than 160 countries. For more information about Lincoln Electric, its products and services, visit the Company’s website at http://www.lincolnelectric.com.
- more -
Lincoln Electric Reports Fourth Quarter 2010 Financial Results
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. 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 and market conditions; the effectiveness of operating initiatives; currency exchange and interest rates; adverse outcome of pending or potential litigation; possible acquisitions; market risks and price fluctuations related to the purchase of commodities and energy; global regulatory complexity; and the possible effects of international terrorism and hostilities 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.
#021811#
Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)
Consolidated Statements of Income
|
|
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Three Months Ended December 31, |
|
Fav (Unfav) to Prior Year |
| |||||||||||
|
|
|
2010 |
|
% of Sales |
|
2009 |
|
% of Sales |
|
$ |
|
% |
| |||
|
Net sales |
|
$ |
564,292 |
|
100.0% |
|
$ |
462,449 |
|
100.0% |
|
$ |
101,843 |
|
22.0% |
|
|
Cost of goods sold |
|
416,460 |
|
73.8% |
|
327,951 |
|
70.9% |
|
(88,509 |
) |
(27.0%) |
| |||
|
Gross profit |
|
147,832 |
|
26.2% |
|
134,498 |
|
29.1% |
|
13,334 |
|
9.9% |
| |||
|
Selling, general & administrative expenses |
|
93,321 |
|
16.5% |
|
91,347 |
|
19.8% |
|
(1,974 |
) |
(2.2%) |
| |||
|
Rationalization and asset impairment charges |
|
2,175 |
|
0.4% |
|
4,177 |
|
0.9% |
|
2,002 |
|
47.9% |
| |||
|
Operating income |
|
52,336 |
|
9.3% |
|
38,974 |
|
8.4% |
|
13,362 |
|
34.3% |
| |||
|
Interest income |
|
600 |
|
0.1% |
|
682 |
|
0.1% |
|
(82 |
) |
(12.0%) |
| |||
|
Equity earnings in affiliates |
|
487 |
|
0.1% |
|
1,098 |
|
0.2% |
|
(611 |
) |
(55.6%) |
| |||
|
Other income |
|
493 |
|
0.1% |
|
1,248 |
|
0.3% |
|
(755 |
) |
(60.5%) |
| |||
|
Interest expense |
|
(1,940 |
) |
(0.3%) |
|
(1,974 |
) |
(0.4%) |
|
34 |
|
1.7% |
| |||
|
Income before income taxes |
|
51,976 |
|
9.2% |
|
40,028 |
|
8.7% |
|
11,948 |
|
29.8% |
| |||
|
Income taxes |
|
10,467 |
|
1.9% |
|
16,050 |
|
3.5% |
|
5,583 |
|
34.8% |
| |||
|
Effective tax rate |
|
20.1% |
|
|
|
40.1% |
|
|
|
20.0% |
|
|
| |||
|
Net income including noncontrolling interests |
|
41,509 |
|
7.4% |
|
23,978 |
|
5.2% |
|
17,531 |
|
73.1% |
| |||
|
Noncontrolling interests in subsidiaries’ earnings (loss) |
|
6 |
|
— |
|
(367 |
) |
(0.1%) |
|
(373 |
) |
(101.6%) |
| |||
|
Net income |
|
$ |
41,503 |
|
7.4% |
|
$ |
24,345 |
|
5.3% |
|
$ |
17,158 |
|
70.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
Basic earnings per share |
|
$ |
0.99 |
|
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|
$ |
0.57 |
|
|
|
$ |
0.42 |
|
73.7% |
|
|
Diluted earnings per share |
|
$ |
0.98 |
|
|
|
$ |
0.57 |
|
|
|
$ |
0.41 |
|
71.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
Weighted average shares (basic) |
|
41,969 |
|
|
|
42,408 |
|
|
|
|
|
|
| |||
|
Weighted average shares (diluted) |
|
42,455 |
|
|
|
42,730 |
|
|
|
|
|
|
| |||
|
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|
Twelve Months Ended December 31, |
|
Fav (Unfav) to Prior Year |
| |||||||||||
|
|
|
2010 |
|
% of Sales |
|
2009 |
|
% of Sales |
|
$ |
|
% |
| |||
|
Net sales |
|
$ |
2,070,172 |
|
100.0% |
|
$ |
1,729,285 |
|
100.0% |
|
$ |
340,887 |
|
19.7% |
|
|
Cost of goods sold |
|
1,506,353 |
|
72.8% |
|
1,273,017 |
|
73.6% |
|
(233,336 |
) |
(18.3%) |
| |||
|
Gross profit |
|
563,819 |
|
27.2% |
|
456,268 |
|
26.4% |
|
107,551 |
|
23.6% |
| |||
|
Selling, general & administrative expenses |
|
377,773 |
|
18.2% |
|
333,138 |
|
19.3% |
|
(44,635 |
) |
(13.4%) |
| |||
|
Rationalization and asset impairment (gains) charges |
|
(384 |
) |
— |
|
29,897 |
|
1.7% |
|
30,281 |
|
101.3% |
| |||
|
Operating income |
|
186,430 |
|
9.0% |
|
93,233 |
|
5.4% |
|
93,197 |
|
100.0% |
| |||
|
Interest income |
|
2,381 |
|
0.1% |
|
3,462 |
|
0.2% |
|
(1,081 |
) |
(31.2%) |
| |||
|
Equity earnings (loss) in affiliates |
|
3,171 |
|
0.2% |
|
(5,025 |
) |
(0.3%) |
|
8,196 |
|
163.1% |
| |||
|
Other income |
|
1,817 |
|
0.1% |
|
3,589 |
|
0.2% |
|
(1,772 |
) |
(49.4%) |
| |||
|
Interest expense |
|
(6,691 |
) |
(0.3%) |
|
(8,521 |
) |
(0.5%) |
|
1,830 |
|
21.5% |
| |||
|
Income before income taxes |
|
187,108 |
|
9.0% |
|
86,738 |
|
5.0% |
|
100,370 |
|
115.7% |
| |||
|
Income taxes |
|
54,898 |
|
2.7% |
|
37,905 |
|
2.2% |
|
(16,993 |
) |
(44.8%) |
| |||
|
Effective tax rate |
|
29.3% |
|
|
|
43.7% |
|
|
|
14.4% |
|
|
| |||
|
Net income including noncontrolling interests |
|
132,210 |
|
6.4% |
|
48,833 |
|
2.8% |
|
83,377 |
|
170.7% |
| |||
|
Noncontrolling interests in subsidiaries’ earnings |
|
1,966 |
|
0.1% |
|
257 |
|
— |
|
(1,709 |
) |
(665.0%) |
| |||
|
Net income |
|
$ |
130,244 |
|
6.3% |
|
$ |
48,576 |
|
2.8% |
|
$ |
81,668 |
|
168.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
Basic earnings per share |
|
$ |
3.09 |
|
|
|
$ |
1.15 |
|
|
|
$ |
1.94 |
|
168.7% |
|
|
Diluted earnings per share |
|
$ |
3.06 |
|
|
|
$ |
1.14 |
|
|
|
$ |
1.92 |
|
168.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
Weighted average shares (basic) |
|
42,203 |
|
|
|
42,391 |
|
|
|
|
|
|
| |||
|
Weighted average shares (diluted) |
|
42,612 |
|
|
|
42,634 |
|
|
|
|
|
|
| |||
Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)
Non-GAAP Financial Measures
|
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
| ||||||||
|
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
| ||||
|
Operating income as reported |
|
$ |
52,336 |
|
$ |
38,974 |
|
$ |
186,430 |
|
$ |
93,233 |
|
|
Special items (pre-tax): |
|
|
|
|
|
|
|
|
| ||||
|
Rationalization and asset impairment charges (gains) (1) |
|
2,175 |
|
4,177 |
|
(384 |
) |
29,897 |
| ||||
|
Venezuela - functional currency change and devaluation (2) |
|
— |
|
— |
|
3,123 |
|
— |
| ||||
|
Pension settlement gain |
|
— |
|
— |
|
— |
|
(2,144 |
) | ||||
|
Adjusted operating income (5) |
|
$ |
54,511 |
|
$ |
43,151 |
|
$ |
189,169 |
|
$ |
120,986 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net income as reported |
|
$ |
41,503 |
|
$ |
24,345 |
|
$ |
130,244 |
|
$ |
48,576 |
|
|
Special items (after-tax): |
|
|
|
|
|
|
|
|
| ||||
|
Rationalization and asset impairment charges (gains) (1) |
|
2,002 |
|
3,382 |
|
(894 |
) |
23,789 |
| ||||
|
Venezuela - functional currency change and devaluation (2) |
|
— |
|
— |
|
3,560 |
|
— |
| ||||
|
Pension settlement gain |
|
— |
|
— |
|
— |
|
(2,144 |
) | ||||
|
Gain on sale of property of equity investment |
|
— |
|
— |
|
— |
|
(5,667 |
) | ||||
|
Loss on disposal of equity investment (3) |
|
— |
|
— |
|
— |
|
7,943 |
| ||||
|
Adjustment of tax contingency (4) |
|
(5,092 |
) |
— |
|
(5,092 |
) |
— |
| ||||
|
Noncontrolling interests (1) |
|
(108 |
) |
— |
|
1,782 |
|
601 |
| ||||
|
Adjusted net income (5) |
|
$ |
38,305 |
|
$ |
27,727 |
|
$ |
129,600 |
|
$ |
73,098 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Diluted earnings per share as reported |
|
$ |
0.98 |
|
$ |
0.57 |
|
$ |
3.06 |
|
$ |
1.14 |
|
|
Special items |
|
(0.08 |
) |
0.08 |
|
(0.02 |
) |
0.57 |
| ||||
|
Adjusted diluted earnings per share (5) |
|
$ |
0.90 |
|
$ |
0.65 |
|
$ |
3.04 |
|
$ |
1.71 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted average shares (diluted) |
|
42,455 |
|
42,730 |
|
42,612 |
|
42,634 |
| ||||
(1) The three months ended December 31, 2010 includes charges associated with the consolidation of manufacturing operations initiated in 2009 as well as impairment charges associated with assets to be disposed. The twelve months ended December 31, 2010 include gains of $4,555 ($4,596 after-tax) on the disposal of assets at rationalized operations offset by charges of $4,171 ($3,702 after-tax) primarily associated with the consolidation of manufacturing operations initiated in 2009. The closure of certain manufacturing operations included those with noncontrolling interests.
The three and twelve month periods ended December 31, 2009 include primarily employee severance costs.
(2) Represents the impact of the change in the functional currency of the Company’s Venezuelan operation to the dollar and the devaluation of the Venezuelan currency.
(3) Represents the impact of the completion of the Company’s 100% acquisition of Jinzhou Jin Tai Welding and Metal Co., Ltd. and associated disposal of the Company’s 35% interest in Taiwan-based Kuang Tai Metal Industrial Co., Ltd.
(4) Represents the adjustment for a change in applicable tax regulations in the Asia Pacific Welding segment.
(5) Adjusted operating income, Adjusted net income and Adjusted diluted earnings per share are non-GAAP financial measures that management believes are important to investors to evaluate and compare the Company’s financial performance from period to period. Management uses this information in assessing and evaluating the Company’s underlying operating performance. Non-GAAP financial measures should be read in conjunction with the GAAP financial measures, as non-GAAP measures are merely a supplement to, and not a replacement for, GAAP financial measures.
Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands)
(Unaudited)
Balance Sheet Highlights
|
Selected Consolidated Balance Sheet Data |
|
December 31, |
|
December 31, |
| ||
|
|
|
|
|
|
| ||
|
Cash and cash equivalents |
|
$ |
366,193 |
|
$ |
388,136 |
|
|
Total current assets |
|
1,082,512 |
|
1,023,546 |
| ||
|
Property, plant and equipment, net |
|
478,566 |
|
460,061 |
| ||
|
Total assets |
|
1,783,788 |
|
1,705,292 |
| ||
|
|
|
|
|
|
| ||
|
Total current liabilities |
|
335,592 |
|
297,971 |
| ||
|
Short-term debt |
|
13,078 |
|
35,867 |
| ||
|
Long-term debt |
|
84,627 |
|
87,850 |
| ||
|
Total equity |
|
1,149,478 |
|
1,085,675 |
| ||
|
|
|
|
|
|
| ||
|
Net Operating Working Capital |
|
December 31, |
|
December 31, |
| ||
|
|
|
|
|
|
| ||
|
Accounts receivable |
|
$ |
321,948 |
|
$ |
273,700 |
|
|
Inventory |
|
291,730 |
|
255,743 |
| ||
|
Trade accounts payable |
|
147,111 |
|
100,052 |
| ||
|
Net operating working capital |
|
$ |
466,567 |
|
$ |
429,391 |
|
|
|
|
|
|
|
| ||
|
Net operating working capital to net sales (1) |
|
20.7% |
|
23.2% |
| ||
|
|
|
|
|
|
| ||
|
Invested Capital |
|
December 31, |
|
December 31, |
| ||
|
|
|
|
|
|
| ||
|
Short-term debt |
|
$ |
13,078 |
|
$ |
35,867 |
|
|
Long-term debt |
|
84,627 |
|
87,850 |
| ||
|
Total debt |
|
97,705 |
|
123,717 |
| ||
|
Total equity |
|
1,149,478 |
|
1,085,675 |
| ||
|
Invested capital |
|
$ |
1,247,183 |
|
$ |
1,209,392 |
|
|
|
|
|
|
|
| ||
|
Total debt / invested capital |
|
7.8% |
|
10.2% |
| ||
|
Return on invested capital (2) |
|
10.7% |
|
4.3% |
| ||
(1) Net operating working capital to net sales is defined as net operating working capital divided by annualized rolling three months of sales.
(2) Return on invested capital is defined as rolling 12 months of earnings excluding tax-effected interest divided by invested capital.
Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)
Consolidated Statements of Cash Flows
|
|
|
Three Months Ended December 31, |
| ||||
|
|
|
2010 |
|
2009 |
| ||
|
OPERATING ACTIVITIES: |
|
|
|
|
| ||
|
Net income |
|
$ |
41,503 |
|
$ |
24,345 |
|
|
Noncontrolling interests in subsidiaries’ earnings (loss) |
|
6 |
|
(367 |
) | ||
|
Net income including noncontrolling interests |
|
41,509 |
|
23,978 |
| ||
|
Adjustments to reconcile Net income including noncontrolling interests to Net cash provided by operating activities: |
|
|
|
|
| ||
|
Rationalization and asset impairment charges |
|
443 |
|
2,940 |
| ||
|
Depreciation and amortization |
|
14,935 |
|
14,265 |
| ||
|
Equity loss (earnings) in affiliates, net |
|
104 |
|
(400 |
) | ||
|
Other non-cash items, net |
|
6,506 |
|
3,993 |
| ||
|
Changes in operating assets and liabilities, net of effects from acquisitions: |
|
|
|
|
| ||
|
Decrease in accounts receivable |
|
640 |
|
3,330 |
| ||
|
Decrease in inventories |
|
28,299 |
|
21,863 |
| ||
|
Decrease in trade accounts payable |
|
(6,992 |
) |
(13,975 |
) | ||
|
Decrease in accrued pensions |
|
(9,565 |
) |
(8,697 |
) | ||
|
Net change in other current assets and liabilities |
|
(27,474 |
) |
(29,464 |
) | ||
|
Net change in other long-term assets and liabilities |
|
4,859 |
|
1,204 |
| ||
|
NET CASH PROVIDED BY OPERATING ACTIVITIES |
|
53,264 |
|
19,037 |
| ||
|
|
|
|
|
|
| ||
|
INVESTING ACTIVITIES: |
|
|
|
|
| ||
|
Capital expenditures |
|
(17,357 |
) |
(11,916 |
) | ||
|
Acquisition of businesses, net of cash acquired |
|
(17,674 |
) |
(7,891 |
) | ||
|
Proceeds from sale of property, plant and equipment |
|
275 |
|
(81 |
) | ||
|
NET CASH USED BY INVESTING ACTIVITIES |
|
(34,756 |
) |
(19,888 |
) | ||
|
|
|
|
|
|
| ||
|
FINANCING ACTIVITIES: |
|
|
|
|
| ||
|
Net change in borrowings |
|
(9,574 |
) |
(6,476 |
) | ||
|
Proceeds from exercise of stock options |
|
2,189 |
|
400 |
| ||
|
Tax benefit from exercise of stock options |
|
741 |
|
90 |
| ||
|
Purchase of shares for treasury |
|
(16,722 |
) |
— |
| ||
|
Cash dividends paid to shareholders |
|
(11,780 |
) |
(11,454 |
) | ||
|
NET CASH USED BY FINANCING ACTIVITIES |
|
(35,146 |
) |
(17,440 |
) | ||
|
|
|
|
|
|
| ||
|
Effect of exchange rate changes on Cash and cash equivalents |
|
294 |
|
460 |
| ||
|
DECREASE IN CASH AND CASH EQUIVALENTS |
|
(16,344 |
) |
(17,831 |
) | ||
|
Cash and cash equivalents at beginning of period |
|
382,537 |
|
405,967 |
| ||
|
Cash and cash equivalents at end of period |
|
$ |
366,193 |
|
$ |
388,136 |
|
|
|
|
|
|
|
| ||
|
Cash dividends paid per share |
|
$ |
0.28 |
|
$ |
0.27 |
|
Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)
Consolidated Statements of Cash Flows
|
|
|
Twelve Months Ended December 31, |
| ||||
|
|
|
2010 |
|
2009 |
| ||
|
OPERATING ACTIVITIES: |
|
|
|
|
| ||
|
Net income |
|
$ |
130,244 |
|
$ |
48,576 |
|
|
Noncontrolling interests in subsidiaries’ earnings |
|
1,966 |
|
257 |
| ||
|
Net income including noncontrolling interests |
|
132,210 |
|
48,833 |
| ||
|
Adjustments to reconcile Net income including noncontrolling interests to Net cash provided by operating activities: |
|
|
|
|
| ||
|
Rationalization and asset impairment (gains) charges |
|
(4,391 |
) |
2,940 |
| ||
|
Depreciation and amortization |
|
57,357 |
|
56,598 |
| ||
|
Equity (earnings) loss in affiliates, net |
|
(600 |
) |
8,554 |
| ||
|
Other non-cash items, net |
|
29,966 |
|
23,434 |
| ||
|
Changes in operating assets and liabilities, net of effects from acquisitions: |
|
|
|
|
| ||
|
(Increase) decrease in accounts receivable |
|
(47,958 |
) |
60,913 |
| ||
|
(Increase) decrease in inventories |
|
(28,912 |
) |
127,739 |
| ||
|
Increase (decrease) in trade accounts payable |
|
47,323 |
|
(30,364 |
) | ||
|
Decrease in accrued pensions |
|
(38,806 |
) |
(39,185 |
) | ||
|
Net change in other current assets and liabilities |
|
13,792 |
|
(12,556 |
) | ||
|
Net change in other long-term assets and liabilities |
|
(3,003 |
) |
3,444 |
| ||
|
NET CASH PROVIDED BY OPERATING ACTIVITIES |
|
156,978 |
|
250,350 |
| ||
|
|
|
|
|
|
| ||
|
INVESTING ACTIVITIES: |
|
|
|
|
| ||
|
Capital expenditures |
|
(60,565 |
) |
(38,201 |
) | ||
|
Additions to equity investment in affiliates |
|
— |
|
(488 |
) | ||
|
Acquisition of businesses, net of cash acquired |
|
(18,856 |
) |
(25,449 |
) | ||
|
Proceeds from sale of property, plant and equipment |
|
10,021 |
|
557 |
| ||
|
NET CASH USED BY INVESTING ACTIVITIES |
|
(69,400 |
) |
(63,581 |
) | ||
|
|
|
|
|
|
| ||
|
FINANCING ACTIVITIES: |
|
|
|
|
| ||
|
Net change in borrowings |
|
(27,179 |
) |
(43,828 |
) | ||
|
Proceeds from exercise of stock options |
|
3,508 |
|
705 |
| ||
|
Tax benefit from exercise of stock options |
|
1,210 |
|
195 |
| ||
|
Purchase of shares for treasury |
|
(39,682 |
) |
(343 |
) | ||
|
Cash dividends paid to shareholders |
|
(47,364 |
) |
(45,801 |
) | ||
|
NET CASH USED BY FINANCING ACTIVITIES |
|
(109,507 |
) |
(89,072 |
) | ||
|
|
|
|
|
|
| ||
|
Effect of exchange rate changes on Cash and cash equivalents |
|
(14 |
) |
6,107 |
| ||
|
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |
|
(21,943 |
) |
103,804 |
| ||
|
Cash and cash equivalents at beginning of period |
|
388,136 |
|
284,332 |
| ||
|
Cash and cash equivalents at end of period |
|
$ |
366,193 |
|
$ |
388,136 |
|
|
|
|
|
|
|
| ||
|
Cash dividends paid per share |
|
$ |
1.12 |
|
$ |
1.08 |
|
Lincoln Electric Holdings, Inc.
Segment Highlights
(In thousands)
(Unaudited)
|
|
|
North |
|
Europe |
|
Asia Pacific |
|
South |
|
The Harris |
|
Corporate / Eliminations |
|
Consolidated |
| |||||||
|
Three months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Net sales |
|
$ |
272,413 |
|
$ |
104,152 |
|
$ |
90,127 |
|
$ |
32,410 |
|
$ |
65,190 |
|
$ |
— |
|
$ |
564,292 |
|
|
Inter-segment sales |
|
27,468 |
|
3,543 |
|
3,236 |
|
152 |
|
1,764 |
|
(36,163 |
) |
— |
| |||||||
|
Total |
|
$ |
299,881 |
|
$ |
107,695 |
|
$ |
93,363 |
|
$ |
32,562 |
|
$ |
66,954 |
|
$ |
(36,163 |
) |
$ |
564,292 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
EBIT (1) |
|
$ |
47,708 |
|
$ |
1,895 |
|
$ |
220 |
|
$ |
2,048 |
|
$ |
1,646 |
|
$ |
(201 |
) |
$ |
53,316 |
|
|
As a percent of total sales |
|
15.9% |
|
1.8% |
|
0.2% |
|
6.3% |
|
2.5% |
|
|
|
9.4% |
| |||||||
|
Special items (4) |
|
$ |
— |
|
$ |
407 |
|
$ |
481 |
|
$ |
— |
|
$ |
1,287 |
|
$ |
— |
|
$ |
2,175 |
|
|
EBIT, as adjusted (3) |
|
$ |
47,708 |
|
$ |
2,302 |
|
$ |
701 |
|
$ |
2,048 |
|
$ |
2,933 |
|
$ |
(201 |
) |
$ |
55,491 |
|
|
As a percent of total sales |
|
15.9% |
|
2.1% |
|
0.8% |
|
6.3% |
|
4.4% |
|
|
|
9.8% |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Three months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Net sales |
|
$ |
218,207 |
|
$ |
85,808 |
|
$ |
75,136 |
|
$ |
29,974 |
|
$ |
53,324 |
|
$ |
— |
|
$ |
462,449 |
|
|
Inter-segment sales |
|
21,894 |
|
1,724 |
|
2,051 |
|
308 |
|
1,546 |
|
(27,523 |
) |
— |
| |||||||
|
Total |
|
$ |
240,101 |
|
$ |
87,532 |
|
$ |
77,187 |
|
$ |
30,282 |
|
$ |
54,870 |
|
$ |
(27,523 |
) |
$ |
462,449 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
EBIT (1) |
|
$ |
41,668 |
|
$ |
1,641 |
|
$ |
(4,632 |
) |
$ |
3,554 |
|
$ |
(50 |
) |
$ |
(861 |
) |
$ |
41,320 |
|
|
As a percent of total sales |
|
17.4% |
|
1.9% |
|
(6.0% |
) |
11.7% |
|
(0.1% |
) |
|
|
8.9% |
| |||||||
|
Special items (4) |
|
$ |
195 |
|
$ |
1,010 |
|
$ |
1,876 |
|
$ |
— |
|
$ |
1,096 |
|
$ |
— |
|
$ |
4,177 |
|
|
EBIT, as adjusted (3) |
|
$ |
41,863 |
|
$ |
2,651 |
|
$ |
(2,756 |
) |
$ |
3,554 |
|
$ |
1,046 |
|
$ |
(861 |
) |
$ |
45,497 |
|
|
As a percent of total sales |
|
17.4% |
|
3.0% |
|
(3.6% |
) |
11.7% |
|
1.9% |
|
|
|
9.8% |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Twelve months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Net sales |
|
$ |
1,013,193 |
|
$ |
359,925 |
|
$ |
324,092 |
|
$ |
117,419 |
|
$ |
255,543 |
|
$ |
— |
|
$ |
2,070,172 |
|
|
Inter-segment sales |
|
108,849 |
|
13,330 |
|
12,546 |
|
1,216 |
|
6,641 |
|
(142,582 |
) |
— |
| |||||||
|
Total |
|
$ |
1,122,042 |
|
$ |
373,255 |
|
$ |
336,638 |
|
$ |
118,635 |
|
$ |
262,184 |
|
$ |
(142,582 |
) |
$ |
2,070,172 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
EBIT (1) |
|
$ |
162,192 |
|
$ |
14,537 |
|
$ |
5,493 |
|
$ |
4,431 |
|
$ |
11,440 |
|
$ |
(6,675 |
) |
$ |
191,418 |
|
|
As a percent of total sales |
|
14.5% |
|
3.9% |
|
1.6% |
|
3.7% |
|
4.4% |
|
|
|
9.2% |
| |||||||
|
Special items (2) |
|
$ |
— |
|
$ |
2,486 |
|
$ |
(3,741 |
) |
$ |
3,123 |
|
$ |
871 |
|
$ |
— |
|
$ |
2,739 |
|
|
EBIT, as adjusted (3) |
|
$ |
162,192 |
|
$ |
17,023 |
|
$ |
1,752 |
|
$ |
7,554 |
|
$ |
12,311 |
|
$ |
(6,675 |
) |
$ |
194,157 |
|
|
As a percent of total sales |
|
14.5% |
|
4.6% |
|
0.5% |
|
6.4% |
|
4.7% |
|
|
|
9.4% |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Twelve months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Net sales |
|
$ |
858,180 |
|
$ |
346,383 |
|
$ |
208,280 |
|
$ |
99,171 |
|
$ |
217,271 |
|
$ |
— |
|
$ |
1,729,285 |
|
|
Inter-segment sales |
|
85,630 |
|
8,725 |
|
4,051 |
|
308 |
|
7,739 |
|
(106,453 |
) |
— |
| |||||||
|
Total |
|
$ |
943,810 |
|
$ |
355,108 |
|
$ |
212,331 |
|
$ |
99,479 |
|
$ |
225,010 |
|
$ |
(106,453 |
) |
$ |
1,729,285 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
EBIT (1) |
|
$ |
124,158 |
|
$ |
(6,531 |
) |
$ |
(27,841 |
) |
$ |
10,120 |
|
$ |
(4,765 |
) |
$ |
(3,344 |
) |
$ |
91,797 |
|
|
As a percent of total sales |
|
13.2% |
|
(1.8% |
) |
(13.1% |
) |
10.2% |
|
(2.1% |
) |
|
|
5.3% |
| |||||||
|
Special items (5) |
|
$ |
10,386 |
|
$ |
4,335 |
|
$ |
9,006 |
|
$ |
528 |
|
$ |
5,774 |
|
$ |
— |
|
$ |
30,029 |
|
|
EBIT, as adjusted (3) |
|
$ |
134,544 |
|
$ |
(2,196 |
) |
$ |
(18,835 |
) |
$ |
10,648 |
|
$ |
1,009 |
|
$ |
(3,344 |
) |
$ |
121,826 |
|
|
As a percent of total sales |
|
14.3% |
|
(0.6% |
) |
(8.9% |
) |
10.7% |
|
0.4% |
|
|
|
7.0% |
| |||||||
(1) EBIT is defined as Operating income plus Equity earnings (loss) in affiliates and Other income.
(2) Special items include rationalization charges (gains) and the impact of the change in the functional currency of the Company’s Venezuelan operation to the dollar and the devaluation of the Venezuelan currency.
(3) The primary profit measure used by management to assess segment performance is EBIT, as adjusted. EBIT for each operating segment is adjusted for special items to derive EBIT, as adjusted.
(4) Special items include rationalization charges.
(5) Special items include rationalization charges, a gain on the sale of a property, a pension settlement gain and a loss related to an acquisition included in Equity earnings (loss) in affiliates.
Lincoln Electric Holdings, Inc.
Change in Net Sales by Segment
(In thousands)
(Unaudited)
Three Months Ended December 31st Change in Net Sales by Segment
|
|
|
|
|
Change in Net Sales due to: |
|
|
| ||||||||||||
|
|
|
Net Sales |
|
|
|
|
|
|
|
Foreign |
|
Net Sales |
| ||||||
|
|
|
2009 |
|
Volume |
|
Acquisitions |
|
Price |
|
Exchange |
|
2010 |
| ||||||
|
Operating Segments |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
North America Welding |
|
$ |
218,207 |
|
$ |
50,683 |
|
$ |
— |
|
$ |
1,751 |
|
$ |
1,772 |
|
$ |
272,413 |
|
|
Europe Welding |
|
85,808 |
|
18,565 |
|
5,331 |
|
1,029 |
|
(6,581 |
) |
104,152 |
| ||||||
|
Asia Pacific Welding |
|
75,136 |
|
8,841 |
|
— |
|
2,808 |
|
3,342 |
|
90,127 |
| ||||||
|
South America Welding |
|
29,974 |
|
6,702 |
|
— |
|
2,228 |
|
(6,494 |
) |
32,410 |
| ||||||
|
The Harris Products Group |
|
53,324 |
|
5,286 |
|
— |
|
6,858 |
|
(278 |
) |
65,190 |
| ||||||
|
Consolidated |
|
$ |
462,449 |
|
$ |
90,077 |
|
$ |
5,331 |
|
$ |
14,674 |
|
$ |
(8,239 |
) |
$ |
564,292 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
North America Welding |
|
|
|
23.2% |
|
— |
|
0.8% |
|
0.8% |
|
24.8% |
| ||||||
|
Europe Welding |
|
|
|
21.6% |
|
6.2% |
|
1.2% |
|
(7.7% |
) |
21.4% |
| ||||||
|
Asia Pacific Welding |
|
|
|
11.8% |
|
— |
|
3.7% |
|
4.4% |
|
20.0% |
| ||||||
|
South America Welding |
|
|
|
22.4% |
|
— |
|
7.4% |
|
(21.7% |
) |
8.1% |
| ||||||
|
The Harris Products Group |
|
|
|
9.9% |
|
— |
|
12.9% |
|
(0.5% |
) |
22.3% |
| ||||||
|
Consolidated |
|
|
|
19.5% |
|
1.2% |
|
3.2% |
|
(1.8% |
) |
22.0% |
| ||||||
Twelve Months Ended December 31st Change in Net Sales by Segment
|
|
|
|
|
Change in Net Sales due to: |
|
|
| ||||||||||||
|
|
|
Net Sales |
|
|
|
|
|
|
|
Foreign |
|
Net Sales |
| ||||||
|
|
|
2009 |
|
Volume |
|
Acquisitions |
|
Price |
|
Exchange |
|
2010 |
| ||||||
|
Operating Segments |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
North America Welding |
|
$ |
858,180 |
|
$ |
150,814 |
|
$ |
— |
|
$ |
(7,709 |
) |
$ |
11,908 |
|
$ |
1,013,193 |
|
|
Europe Welding |
|
346,383 |
|
30,175 |
|
5,331 |
|
(9,668 |
) |
(12,296 |
) |
359,925 |
| ||||||
|
Asia Pacific Welding |
|
208,280 |
|
20,077 |
|
86,235 |
|
(3,165 |
) |
12,665 |
|
324,092 |
| ||||||
|
South America Welding |
|
99,171 |
|
25,724 |
|
— |
|
7,432 |
|
(14,908 |
) |
117,419 |
| ||||||
|
The Harris Products Group |
|
217,271 |
|
16,264 |
|
— |
|
19,303 |
|
2,705 |
|
255,543 |
| ||||||
|
Consolidated |
|
$ |
1,729,285 |
|
$ |
243,054 |
|
$ |
91,566 |
|
$ |
6,193 |
|
$ |
74 |
|
$ |
2,070,172 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
North America Welding |
|
|
|
17.6% |
|
— |
|
(0.9% |
) |
1.4% |
|
18.1% |
| ||||||
|
Europe Welding |
|
|
|
8.7% |
|
1.5% |
|
(2.8% |
) |
(3.5% |
) |
3.9% |
| ||||||
|
Asia Pacific Welding |
|
|
|
9.6% |
|
41.4% |
|
(1.5% |
) |
6.1% |
|
55.6% |
| ||||||
|
South America Welding |
|
|
|
25.9% |
|
— |
|
7.5% |
|
(15.0% |
) |
18.4% |
| ||||||
|
The Harris Products Group |
|
|
|
7.5% |
|
— |
|
8.9% |
|
1.2% |
|
17.6% |
| ||||||
|
Consolidated |
|
|
|
14.1% |
|
5.3% |
|
0.4% |
|
— |
|
19.7% |
| ||||||