Attached files
| file | filename |
|---|---|
| 8-K - 8-K - LINCOLN ELECTRIC HOLDINGS INC | a12-4588_18k.htm |
Exhibit 99.1
Media Contact: Roy L. Morrow (216) 383-4893
Roy_Morrow@lincolnelectric.com
Lincoln Electric Reports Record 2011 Sales;
4Q’11 Sales increase of 23.1%;
4Q Operating income increase of 57.4%;
4Q EPS of $0.68, an increase of 38.8%
|
|
Fourth Quarter and Full Year 2011 Highlights |
|
|
§ Sales were $694.5 million, an increase of 23.1% from the Fourth Quarter 2010; Full year 2011 Sales were $2.7 billion, an increase of 30.2% from 2010 |
|
|
§ Operating income increased 57.4% to $82.4 million, or 11.9% of sales, from $52.3 million, or 9.3% of sales, in the Fourth Quarter 2010 |
|
|
§ Full year Operating income increased 59.1% to $296.7 million, or 11.0% of sales, from $186.4 million, or 9.0% of sales, in 2010 |
|
|
§ Net income increased 39.1% to $57.7 million, or $0.68 per diluted share, from $41.5 million, or $0.49 per diluted share, in the Fourth Quarter 2010 |
|
|
§ Full year Net income increased 66.8% to $217.2 million, or $2.56 per diluted share, from $130.2 million, or $1.53 per diluted share, in 2010 |
|
|
§ Adjusted net income for 2011 increased 64.0% to $212.6 million, or $2.51 per diluted share, from $129.6 million, or $1.52 per diluted share, in 2010 |
|
|
§ Net cash provided by operating activities in 2011 increased $36.5 million, or 23.3%, to $193.5 million in 2011 |
|
|
|
CLEVELAND, Ohio, U.S.A., February 17, 2012 -- Lincoln Electric Holdings, Inc. (the “Company”) (Nasdaq: LECO) today reported fourth quarter 2011 net income of $57.7 million, or $0.68 per diluted share. Sales were $694.5 million in the fourth quarter 2011 versus $564.3 million in the comparable 2010 period, an increase of 23.1%. Operating income for the fourth quarter increased $30.0 million to $82.4 million, or 11.9% of sales, from $52.3 million, or 9.3% of sales, in the comparable 2010 period.
Net income for the fourth quarter 2011 was $57.7 million, or $0.68 per diluted share, compared with net income of $41.5 million, or $0.49 per diluted share, in the fourth quarter 2010. The effective tax rate for the fourth quarter 2011 was 30.8% compared with 20.1% in 2010. The fourth quarter 2010 included a favorable $5.1 million tax adjustment.
- more -
Lincoln Electric Reports Fourth Quarter 2011 Financial Results
Sales for the twelve months ended December 31, 2011 were $2.7 billion versus $2.1 billion in the comparable 2010 period, an increase of 30.2%. Operating income for the twelve months ended December 31, 2011 increased $110.3 million to $296.7 million, or 11.0% of sales, from $186.4 million, or 9.0% of sales, in the comparable 2010 period.
Net income for the twelve months ended December 31, 2011, was $217.2 million, or $2.56 per diluted share, compared with net income of $130.2 million, or $1.53 per diluted share, for the comparable period in 2010. Adjusted net income was $212.6 million, or $2.51 per diluted share, compared with $129.6 million, or $1.52 per diluted share, for the twelve months ended December 31, 2010. The effective tax rate for the twelve months ended December 31, 2011, was 28.0%, or 29.6% as adjusted, compared with 29.3% in 2010, or 31.6% as adjusted. In the twelve months ended December 31, 2011, the Company recorded a $4.8 million favorable adjustment for tax audit settlements.
“Our 2011 sales represent the highest level in Company history and mark the second consecutive year over year increase of more than 20%,” said John M. Stropki, Chairman and Chief Executive Officer. “We ended the year with strong operating results and good leverage in most segments. The continued strength in both sales and profitability during the fourth quarter were particularly positive considering the ongoing global economic and political uncertainty in many of our key markets.
“Despite this volatile climate, we enter 2012 with good momentum, particularly in North America, our largest segment, where the overall manufacturing environment continues to improve. We remain focused on our global growth strategies, which include acquisitions, new product introductions and increasing our commercial presence. In addition, our ongoing attention to continuous improvements in our operations and business segments will provide the increased operating leverage and flexibility required to execute our long-term strategic objectives for the benefit of our customers, shareholders and employees.”
Net cash provided by operating activities increased $9.9 million to $63.1 million in the fourth quarter from $53.3 million for the comparable period in 2010. The Company also returned $22.3 million to shareholders through the payment of $12.9 million in dividends and the repurchase of $9.4 million or 255,912 shares.
- more -
Lincoln Electric Reports Fourth Quarter 2011 Financial Results
Net cash provided by operating activities increased $36.5 million to $193.5 million in the twelve months ended December 31, 2011 from $157.0 million for the comparable period in 2010. The Company returned $88.9 million to shareholders through the payment of $51.9 million in dividends and the repurchase of $37.0 million of the Company’s shares for treasury during the twelve months ended December 31, 2011. The Company’s cash balance as of December 31, 2011 is $361.1 million.
The Company’s Board of Directors declared a quarterly cash dividend of $0.17 per share, which was paid on January 13, 2012 to holders of record as of December 31, 2011.
Financial results for the fourth quarter 2011 can also be obtained at http://www.lincolnelectric.com/InvestorNews.
A conference call to discuss the fourth quarter 2011 financial results is scheduled for today, Friday, February 17, 2012, 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 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 42 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 2011 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. 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 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 events beyond our control, such as political unrest, acts of terror and natural disasters, 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.
#021712#
Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)
Consolidated Statements of Income
|
|
|
Three Months Ended December 31, |
|
Fav (Unfav) to Prior Year |
| |||||||||||
|
|
|
2011 |
|
% of Sales |
|
2010 |
|
% of Sales |
|
$ |
|
% |
| |||
|
Net sales |
|
$ |
694,513 |
|
100.0% |
|
$ |
564,292 |
|
100.0% |
|
$ |
130,221 |
|
23.1% |
|
|
Cost of goods sold |
|
500,170 |
|
72.0% |
|
416,460 |
|
73.8% |
|
(83,710 |
) |
(20.1%) |
| |||
|
Gross profit |
|
194,343 |
|
28.0% |
|
147,832 |
|
26.2% |
|
46,511 |
|
31.5% |
| |||
|
Selling, general & administrative expenses |
|
111,981 |
|
16.1% |
|
93,321 |
|
16.5% |
|
(18,660 |
) |
(20.0%) |
| |||
|
Rationalization and asset impairment charges (gains) |
|
— |
|
— |
|
2,175 |
|
0.4% |
|
2,175 |
|
100.0% |
| |||
|
Operating income |
|
82,362 |
|
11.9% |
|
52,336 |
|
9.3% |
|
30,026 |
|
57.4% |
| |||
|
Interest income |
|
685 |
|
0.1% |
|
600 |
|
0.1% |
|
85 |
|
14.2% |
| |||
|
Equity earnings in affiliates |
|
1,352 |
|
0.2% |
|
487 |
|
0.1% |
|
865 |
|
177.6% |
| |||
|
Other income |
|
695 |
|
— |
|
493 |
|
0.1% |
|
202 |
|
41.0% |
| |||
|
Interest expense |
|
(1,667 |
) |
(0.2%) |
|
(1,940 |
) |
(0.3%) |
|
273 |
|
14.1% |
| |||
|
Income before income taxes |
|
83,427 |
|
12.0% |
|
51,976 |
|
9.2% |
|
31,451 |
|
60.5% |
| |||
|
Income taxes |
|
25,736 |
|
3.7% |
|
10,467 |
|
1.9% |
|
(15,269 |
) |
(145.9%) |
| |||
|
Effective tax rate |
|
30.8% |
|
|
|
20.1% |
|
|
|
(10.7% |
) |
|
| |||
|
Net income including noncontrolling interests |
|
57,691 |
|
8.3% |
|
41,509 |
|
7.4% |
|
16,182 |
|
39.0% |
| |||
|
Noncontrolling interests in subsidiaries’ (loss) earnings |
|
(42 |
) |
— |
|
6 |
|
— |
|
(48 |
) |
(800.0%) |
| |||
|
Net income |
|
$ |
57,733 |
|
8.3% |
|
$ |
41,503 |
|
7.4% |
|
$ |
16,230 |
|
39.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
Basic earnings per share |
|
$ |
0.69 |
|
|
|
$ |
0.49 |
|
|
|
$ |
0.20 |
|
40.8% |
|
|
Diluted earnings per share |
|
$ |
0.68 |
|
|
|
$ |
0.49 |
|
|
|
$ |
0.19 |
|
38.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
Weighted average shares (basic) |
|
83,384 |
|
|
|
83,937 |
|
|
|
|
|
|
| |||
|
Weighted average shares (diluted) |
|
84,384 |
|
|
|
84,911 |
|
|
|
|
|
|
| |||
|
|
|
Twelve Months Ended December 31, |
|
Fav (Unfav) to Prior Year |
| |||||||||||
|
|
|
2011 |
|
% of Sales |
|
2010 |
|
% of Sales |
|
$ |
|
% |
| |||
|
Net sales |
|
$ |
2,694,609 |
|
100.0% |
|
$ |
2,070,172 |
|
100.0% |
|
$ |
624,437 |
|
30.2% |
|
|
Cost of goods sold |
|
1,957,872 |
|
72.7% |
|
1,506,353 |
|
72.8% |
|
(451,519 |
) |
(30.0%) |
| |||
|
Gross profit |
|
736,737 |
|
27.3% |
|
563,819 |
|
27.2% |
|
172,918 |
|
30.7% |
| |||
|
Selling, general & administrative expenses |
|
439,775 |
|
16.3% |
|
377,773 |
|
18.2% |
|
(62,002 |
) |
(16.4%) |
| |||
|
Rationalization and asset impairment charges (gains) |
|
282 |
|
— |
|
(384 |
) |
— |
|
(666 |
) |
(173.4%) |
| |||
|
Operating income |
|
296,680 |
|
11.0% |
|
186,430 |
|
9.0% |
|
110,250 |
|
59.1% |
| |||
|
Interest income |
|
3,121 |
|
0.1% |
|
2,381 |
|
0.1% |
|
740 |
|
31.1% |
| |||
|
Equity earnings in affiliates |
|
5,385 |
|
0.2% |
|
3,171 |
|
0.2% |
|
2,214 |
|
69.8% |
| |||
|
Other income |
|
2,849 |
|
0.1% |
|
1,817 |
|
0.1% |
|
1,032 |
|
56.8% |
| |||
|
Interest expense |
|
(6,704 |
) |
(0.2%) |
|
(6,691 |
) |
(0.3%) |
|
(13 |
) |
(0.2%) |
| |||
|
Income before income taxes |
|
301,331 |
|
11.2% |
|
187,108 |
|
9.0% |
|
114,223 |
|
61.0% |
| |||
|
Income taxes |
|
84,318 |
|
3.1% |
|
54,898 |
|
2.7% |
|
(29,420 |
) |
(53.6%) |
| |||
|
Effective tax rate |
|
28.0% |
|
|
|
29.3% |
|
|
|
1.3% |
|
|
| |||
|
Net income including noncontrolling interests |
|
217,013 |
|
8.1% |
|
132,210 |
|
6.4% |
|
84,803 |
|
64.1% |
| |||
|
Noncontrolling interests in subsidiaries’ (loss) earnings |
|
(173 |
) |
— |
|
1,966 |
|
0.1% |
|
(2,139 |
) |
(108.8%) |
| |||
|
Net income |
|
$ |
217,186 |
|
8.1% |
|
$ |
130,244 |
|
6.3% |
|
$ |
86,942 |
|
66.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
Basic earnings per share |
|
$ |
2.60 |
|
|
|
$ |
1.54 |
|
|
|
$ |
1.06 |
|
68.8% |
|
|
Diluted earnings per share |
|
$ |
2.56 |
|
|
|
$ |
1.53 |
|
|
|
$ |
1.03 |
|
67.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
Weighted average shares (basic) |
|
83,681 |
|
|
|
84,407 |
|
|
|
|
|
|
| |||
|
Weighted average shares (diluted) |
|
84,708 |
|
|
|
85,223 |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
Per share amounts and the weighted average number of common shares outstanding have been retroactively adjusted to give effect to the two-for-one stock split on May 31, 2011. |
| |||||||||||||||
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, |
| ||||||||
|
|
|
2011 |
|
2010 |
|
2011 |
|
2010 |
| ||||
|
Operating income as reported |
|
$ |
82,362 |
|
$ |
52,336 |
|
$ |
296,680 |
|
$ |
186,430 |
|
|
Special items (pre-tax): |
|
|
|
|
|
|
|
|
| ||||
|
Rationalization and asset impairment charges (gains) (1) |
|
— |
|
2,175 |
|
282 |
|
(384 |
) | ||||
|
Venezuela - functional currency change and devaluation (2) |
|
— |
|
— |
|
— |
|
3,123 |
| ||||
|
Adjusted operating income (5) |
|
$ |
82,362 |
|
$ |
54,511 |
|
$ |
296,962 |
|
$ |
189,169 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net income as reported |
|
$ |
57,733 |
|
$ |
41,503 |
|
$ |
217,186 |
|
$ |
130,244 |
|
|
Special items (after-tax): |
|
|
|
|
|
|
|
|
| ||||
|
Rationalization and asset impairment charges (gains) (1) |
|
— |
|
2,002 |
|
237 |
|
(894 |
) | ||||
|
Venezuela - functional currency change and devaluation (2) |
|
— |
|
— |
|
— |
|
3,560 |
| ||||
|
Noncontrolling interests (1) |
|
— |
|
(108 |
) |
— |
|
1,782 |
| ||||
|
Adjustment for tax contingency (3) |
|
— |
|
(5,092 |
) |
— |
|
(5,092 |
) | ||||
|
Adjustment for tax audit settlements (4) |
|
— |
|
— |
|
(4,844 |
) |
— |
| ||||
|
Adjusted net income (5) |
|
$ |
57,733 |
|
$ |
38,305 |
|
$ |
212,579 |
|
$ |
129,600 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Diluted earnings per share as reported |
|
$ |
0.68 |
|
$ |
0.49 |
|
$ |
2.56 |
|
$ |
1.53 |
|
|
Special items |
|
— |
|
(0.04 |
) |
(0.05 |
) |
(0.01 |
) | ||||
|
Adjusted diluted earnings per share (5) |
|
$ |
0.68 |
|
$ |
0.45 |
|
$ |
2.51 |
|
$ |
1.52 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted average shares (diluted) |
|
84,384 |
|
84,911 |
|
84,708 |
|
85,223 |
| ||||
(1) The three month period ended December 31, 2010 and the twelve month periods ended December 31, 2011 and 2010 include gains related to the sale of assets at rationalized operations offset by charges associated with severance and other costs from the consolidation of manufacturing operations initiated in 2009. In 2010, the closure of certain manufacturing operations included noncontrolling interests.
(2) Represents the impact of the change in the functional currency of the Company’s Venezuelan operation to the U.S. dollar and the devaluation of the Venezuelan currency.
(3) Represents the adjustment for a change in applicable tax regulations in the Asia Pacific Welding segment.
(4) Represents a favorable adjustment for tax audit settlements.
(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 a supplement to, and not a replacement for, GAAP financial measures.
Per share amounts and the weighted average number of common shares outstanding have been retroactively adjusted to give effect to the two-for-one stock split on May 31, 2011.
Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands)
(Unaudited)
Balance Sheet Highlights
|
|
|
December 31, |
|
December 31, |
| ||
|
Selected Consolidated Balance Sheet Data |
|
2011 |
|
2010 |
| ||
|
|
|
|
|
|
| ||
|
Cash and cash equivalents |
|
$ |
361,101 |
|
$ |
366,193 |
|
|
Total current assets |
|
1,219,270 |
|
1,082,512 |
| ||
|
Property, plant and equipment, net |
|
470,451 |
|
478,566 |
| ||
|
Total assets |
|
1,976,776 |
|
1,783,788 |
| ||
|
|
|
|
|
|
| ||
|
Total current liabilities |
|
471,042 |
|
335,592 |
| ||
|
Short-term debt (1) |
|
101,418 |
|
13,078 |
| ||
|
Long-term debt |
|
1,960 |
|
84,627 |
| ||
|
Total equity |
|
1,193,242 |
|
1,149,478 |
| ||
|
|
|
December 31, |
|
December 31, |
| ||
|
Net Operating Working Capital |
|
2011 |
|
2010 |
| ||
|
|
|
|
|
|
| ||
|
Accounts receivable |
|
$ |
386,197 |
|
$ |
321,948 |
|
|
Inventory |
|
373,238 |
|
291,730 |
| ||
|
Trade accounts payable |
|
176,312 |
|
147,111 |
| ||
|
Net operating working capital |
|
$ |
583,123 |
|
$ |
466,567 |
|
|
|
|
|
|
|
| ||
|
Net operating working capital to net sales (2) |
|
21.0% |
|
20.7% |
| ||
|
|
|
December 31, |
|
December 31, |
| ||
|
Invested Capital |
|
2011 |
|
2010 |
| ||
|
|
|
|
|
|
| ||
|
Short-term debt (1) |
|
$ |
101,418 |
|
$ |
13,078 |
|
|
Long-term debt |
|
1,960 |
|
84,627 |
| ||
|
Total debt |
|
103,378 |
|
97,705 |
| ||
|
Total equity |
|
1,193,242 |
|
1,149,478 |
| ||
|
Invested capital |
|
$ |
1,296,620 |
|
$ |
1,247,183 |
|
|
|
|
|
|
|
| ||
|
Total debt / invested capital |
|
8.0% |
|
7.8% |
| ||
|
Return on invested capital (3) |
|
16.9% |
|
10.7% |
| ||
(1) Includes current portion of long-term debt.
(2) Net operating working capital to net sales is defined as net operating working capital divided by annualized rolling three months of sales.
(3) 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, |
| ||||
|
|
|
2011 |
|
2010 |
| ||
|
OPERATING ACTIVITIES: |
|
|
|
|
| ||
|
Net income |
|
$ |
57,733 |
|
$ |
41,503 |
|
|
Noncontrolling interests in subsidiaries’ (loss) earnings |
|
(42 |
) |
6 |
| ||
|
Net income including noncontrolling interests |
|
57,691 |
|
41,509 |
| ||
|
Adjustments to reconcile Net income including noncontrolling interests to Net cash provided by operating activities: |
|
|
|
|
| ||
|
Rationalization and asset impairment charges |
|
— |
|
443 |
| ||
|
Depreciation and amortization |
|
14,962 |
|
14,935 |
| ||
|
Equity (earnings) loss in affiliates, net |
|
(655 |
) |
104 |
| ||
|
Other non-cash items, net |
|
16,508 |
|
6,506 |
| ||
|
Changes in operating assets and liabilities, net of effects from acquisitions: |
|
|
|
|
| ||
|
Decrease in accounts receivable |
|
4,769 |
|
640 |
| ||
|
Decrease in inventories |
|
47,048 |
|
28,299 |
| ||
|
Decrease in trade accounts payable |
|
(26,316 |
) |
(6,992 |
) | ||
|
Decrease in accrued pensions |
|
(1,286 |
) |
(9,565 |
) | ||
|
Net change in other current assets and liabilities |
|
(49,103 |
) |
(27,474 |
) | ||
|
Net change in other long-term assets and liabilities |
|
(478 |
) |
4,859 |
| ||
|
NET CASH PROVIDED BY OPERATING ACTIVITIES |
|
63,140 |
|
53,264 |
| ||
|
|
|
|
|
|
| ||
|
INVESTING ACTIVITIES: |
|
|
|
|
| ||
|
Capital expenditures |
|
(15,063 |
) |
(17,357 |
) | ||
|
Acquisition of businesses, net of cash acquired |
|
(3,889 |
) |
(17,674 |
) | ||
|
Proceeds from sale of property, plant and equipment |
|
243 |
|
275 |
| ||
|
NET CASH USED BY INVESTING ACTIVITIES |
|
(18,709 |
) |
(34,756 |
) | ||
|
|
|
|
|
|
| ||
|
FINANCING ACTIVITIES: |
|
|
|
|
| ||
|
Net change in borrowings |
|
10,827 |
|
(9,574 |
) | ||
|
Proceeds from exercise of stock options |
|
4,140 |
|
2,189 |
| ||
|
Tax benefit from exercise of stock options |
|
589 |
|
741 |
| ||
|
Purchase of shares for treasury |
|
(9,367 |
) |
(16,722 |
) | ||
|
Cash dividends paid to shareholders |
|
(12,934 |
) |
(11,780 |
) | ||
|
Other |
|
3,346 |
|
— |
| ||
|
NET CASH USED BY FINANCING ACTIVITIES |
|
(3,399 |
) |
(35,146 |
) | ||
|
|
|
|
|
|
| ||
|
Effect of exchange rate changes on Cash and cash equivalents |
|
(1,391 |
) |
294 |
| ||
|
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
39,641 |
|
(16,344 |
) | ||
|
Cash and cash equivalents at beginning of period |
|
321,460 |
|
382,537 |
| ||
|
Cash and cash equivalents at end of period |
|
$ |
361,101 |
|
$ |
366,193 |
|
|
|
|
|
|
|
| ||
|
Cash dividends paid per share |
|
$ |
0.155 |
|
$ |
0.14 |
|
Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)
Consolidated Statements of Cash Flows
|
|
|
Twelve Months Ended December 31, |
| ||||
|
|
|
2011 |
|
2010 |
| ||
|
OPERATING ACTIVITIES: |
|
|
|
|
| ||
|
Net income |
|
$ |
217,186 |
|
$ |
130,244 |
|
|
Noncontrolling interests in subsidiaries’ (loss) earnings |
|
(173 |
) |
1,966 |
| ||
|
Net income including noncontrolling interests |
|
217,013 |
|
132,210 |
| ||
|
Adjustments to reconcile Net income including noncontrolling interests to Net cash provided by operating activities: |
|
|
|
|
| ||
|
Rationalization and asset impairment charges (gains) |
|
23 |
|
(4,391 |
) | ||
|
Depreciation and amortization |
|
62,051 |
|
57,357 |
| ||
|
Equity earnings in affiliates, net |
|
(1,971 |
) |
(600 |
) | ||
|
Other non-cash items, net |
|
44,564 |
|
29,966 |
| ||
|
Changes in operating assets and liabilities, net of effects from acquisitions: |
|
|
|
|
| ||
|
Increase in accounts receivable |
|
(67,518 |
) |
(47,958 |
) | ||
|
Increase in inventories |
|
(51,679 |
) |
(28,912 |
) | ||
|
Increase in trade accounts payable |
|
8,672 |
|
47,323 |
| ||
|
Decrease in accrued pensions |
|
(31,776 |
) |
(38,806 |
) | ||
|
Net change in other current assets and liabilities |
|
17,981 |
|
13,792 |
| ||
|
Net change in other long-term assets and liabilities |
|
(3,842 |
) |
(3,003 |
) | ||
|
NET CASH PROVIDED BY OPERATING ACTIVITIES |
|
193,518 |
|
156,978 |
| ||
|
|
|
|
|
|
| ||
|
INVESTING ACTIVITIES: |
|
|
|
|
| ||
|
Capital expenditures |
|
(65,813 |
) |
(60,565 |
) | ||
|
Acquisition of businesses, net of cash acquired |
|
(66,229 |
) |
(18,856 |
) | ||
|
Proceeds from sale of property, plant and equipment |
|
1,246 |
|
10,021 |
| ||
|
NET CASH USED BY INVESTING ACTIVITIES |
|
(130,796 |
) |
(69,400 |
) | ||
|
|
|
|
|
|
| ||
|
FINANCING ACTIVITIES: |
|
|
|
|
| ||
|
Net change in borrowings |
|
7,949 |
|
(27,179 |
) | ||
|
Proceeds from exercise of stock options |
|
11,351 |
|
3,508 |
| ||
|
Tax benefit from exercise of stock options |
|
2,916 |
|
1,210 |
| ||
|
Purchase of shares for treasury |
|
(36,997 |
) |
(39,682 |
) | ||
|
Cash dividends paid to shareholders |
|
(51,935 |
) |
(47,364 |
) | ||
|
Other |
|
3,346 |
|
— |
| ||
|
NET CASH USED BY FINANCING ACTIVITIES |
|
(63,370 |
) |
(109,507 |
) | ||
|
|
|
|
|
|
| ||
|
Effect of exchange rate changes on Cash and cash equivalents |
|
(4,444 |
) |
(14 |
) | ||
|
DECREASE IN CASH AND CASH EQUIVALENTS |
|
(5,092 |
) |
(21,943 |
) | ||
|
Cash and cash equivalents at beginning of period |
|
366,193 |
|
388,136 |
| ||
|
Cash and cash equivalents at end of period |
|
$ |
361,101 |
|
$ |
366,193 |
|
|
|
|
|
|
|
| ||
|
Cash dividends paid per share |
|
$ |
0.62 |
|
$ |
0.56 |
|
Lincoln Electric Holdings, Inc.
Segment Highlights
(In thousands)
(Unaudited)
|
|
|
North |
|
|
|
|
|
South |
|
The Harris |
|
|
|
|
| |||||||
|
|
|
America |
|
Europe |
|
Asia Pacific |
|
America |
|
Products |
|
Corporate / |
|
|
| |||||||
|
|
|
Welding |
|
Welding |
|
Welding |
|
Welding |
|
Group |
|
Eliminations |
|
Consolidated |
| |||||||
|
Three months ended December 31, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Net sales |
|
$ |
361,905 |
|
$ |
126,942 |
|
$ |
88,204 |
|
$ |
40,673 |
|
$ |
76,789 |
|
$ |
— |
|
$ |
694,513 |
|
|
Inter-segment sales |
|
30,895 |
|
4,047 |
|
4,893 |
|
120 |
|
1,761 |
|
(41,716 |
) |
— |
| |||||||
|
Total |
|
$ |
392,800 |
|
$ |
130,989 |
|
$ |
93,097 |
|
$ |
40,793 |
|
$ |
78,550 |
|
$ |
(41,716 |
) |
$ |
694,513 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
EBIT (1) |
|
$ |
69,732 |
|
$ |
8,904 |
|
$ |
(652 |
) |
$ |
3,295 |
|
$ |
4,401 |
|
$ |
(1,271 |
) |
$ |
84,409 |
|
|
As a percent of total sales |
|
17.8% |
|
6.8% |
|
(0.7% |
) |
8.1% |
|
5.6% |
|
|
|
12.2% |
| |||||||
|
Special items charge (gain) (2) |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
EBIT, as adjusted (3) |
|
$ |
69,732 |
|
$ |
8,904 |
|
$ |
(652 |
) |
$ |
3,295 |
|
$ |
4,401 |
|
$ |
(1,271 |
) |
$ |
84,409 |
|
|
As a percent of total sales |
|
17.8% |
|
6.8% |
|
(0.7% |
) |
8.1% |
|
5.6% |
|
|
|
12.2% |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Three months ended December 31, 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
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 charge (gain) (2) |
|
$ |
— |
|
$ |
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% |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Twelve months ended December 31, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Net sales |
|
$ |
1,309,499 |
|
$ |
508,692 |
|
$ |
376,276 |
|
$ |
156,684 |
|
$ |
343,458 |
|
$ |
— |
|
$ |
2,694,609 |
|
|
Inter-segment sales |
|
136,314 |
|
17,422 |
|
15,614 |
|
494 |
|
8,496 |
|
(178,340 |
) |
— |
| |||||||
|
Total |
|
$ |
1,445,813 |
|
$ |
526,114 |
|
$ |
391,890 |
|
$ |
157,178 |
|
$ |
351,954 |
|
$ |
(178,340 |
) |
$ |
2,694,609 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
EBIT (1) |
|
$ |
227,924 |
|
$ |
35,779 |
|
$ |
2,739 |
|
$ |
12,895 |
|
$ |
25,151 |
|
$ |
426 |
|
$ |
304,914 |
|
|
As a percent of total sales |
|
15.8% |
|
6.8% |
|
0.7% |
|
8.2% |
|
7.1% |
|
|
|
11.3% |
| |||||||
|
Special items charge (gain) (2) |
|
$ |
— |
|
$ |
392 |
|
$ |
(110 |
) |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
282 |
|
|
EBIT, as adjusted (3) |
|
$ |
227,924 |
|
$ |
36,171 |
|
$ |
2,629 |
|
$ |
12,895 |
|
$ |
25,151 |
|
$ |
426 |
|
$ |
305,196 |
|
|
As a percent of total sales |
|
15.8% |
|
6.9% |
|
0.7% |
|
8.2% |
|
7.1% |
|
|
|
11.3% |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Twelve months ended December 31, 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
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 charge (gain) (4) |
|
$ |
— |
|
$ |
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% |
| |||||||
(1) EBIT is defined as Operating income plus Equity earnings in affiliates and Other income.
(2) Special items include rationalization and asset impairment charges (gains).
(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 (gains) and the impact of the change in the functional currency of the Company’s Venezuelan operation to the U.S. dollar and the devaluation of the Venezuelan currency.
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 |
| ||||||
|
|
|
2010 |
|
Volume |
|
Acquisitions |
|
Price |
|
Exchange |
|
2011 |
| ||||||
|
Operating Segments |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
North America Welding |
|
$ |
272,413 |
|
$ |
45,461 |
|
$ |
30,772 |
|
$ |
14,775 |
|
$ |
(1,516 |
) |
$ |
361,905 |
|
|
Europe Welding |
|
104,152 |
|
4,805 |
|
15,207 |
|
5,644 |
|
(2,866 |
) |
126,942 |
| ||||||
|
Asia Pacific Welding |
|
90,127 |
|
(5,650 |
) |
— |
|
373 |
|
3,354 |
|
88,204 |
| ||||||
|
South America Welding |
|
32,410 |
|
5,017 |
|
— |
|
4,201 |
|
(955 |
) |
40,673 |
| ||||||
|
The Harris Products Group |
|
65,190 |
|
4,287 |
|
— |
|
8,355 |
|
(1,043 |
) |
76,789 |
| ||||||
|
Consolidated |
|
$ |
564,292 |
|
$ |
53,920 |
|
$ |
45,979 |
|
$ |
33,348 |
|
$ |
(3,026 |
) |
$ |
694,513 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
North America Welding |
|
|
|
16.7% |
|
11.3% |
|
5.4% |
|
(0.6% |
) |
32.9% |
| ||||||
|
Europe Welding |
|
|
|
4.6% |
|
14.6% |
|
5.4% |
|
(2.8% |
) |
21.9% |
| ||||||
|
Asia Pacific Welding |
|
|
|
(6.3% |
) |
— |
|
0.4% |
|
3.7% |
|
(2.1% |
) | ||||||
|
South America Welding |
|
|
|
15.5% |
|
— |
|
13.0% |
|
(2.9% |
) |
25.5% |
| ||||||
|
The Harris Products Group |
|
|
|
6.6% |
|
— |
|
12.8% |
|
(1.6% |
) |
17.8% |
| ||||||
|
Consolidated |
|
|
|
9.6% |
|
8.1% |
|
5.9% |
|
(0.5% |
) |
23.1% |
| ||||||
Twelve Months Ended December 31st Change in Net Sales by Segment
|
|
|
|
|
Change in Net Sales due to: |
|
|
| ||||||||||||
|
|
|
Net Sales |
|
|
|
|
|
|
|
Foreign |
|
Net Sales |
| ||||||
|
|
|
2010 |
|
Volume |
|
Acquisitions |
|
Price |
|
Exchange |
|
2011 |
| ||||||
|
Operating Segments |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
North America Welding |
|
$ |
1,013,193 |
|
$ |
194,618 |
|
$ |
54,452 |
|
$ |
41,839 |
|
$ |
5,397 |
|
$ |
1,309,499 |
|
|
Europe Welding |
|
359,925 |
|
42,376 |
|
66,425 |
|
20,390 |
|
19,576 |
|
508,692 |
| ||||||
|
Asia Pacific Welding |
|
324,092 |
|
26,198 |
|
— |
|
3,305 |
|
22,681 |
|
376,276 |
| ||||||
|
South America Welding |
|
117,419 |
|
24,209 |
|
— |
|
11,618 |
|
3,438 |
|
156,684 |
| ||||||
|
The Harris Products Group |
|
255,543 |
|
18,625 |
|
— |
|
65,753 |
|
3,537 |
|
343,458 |
| ||||||
|
Consolidated |
|
$ |
2,070,172 |
|
$ |
306,026 |
|
$ |
120,877 |
|
$ |
142,905 |
|
$ |
54,629 |
|
$ |
2,694,609 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
North America Welding |
|
|
|
19.2% |
|
5.4% |
|
4.1% |
|
0.5% |
|
29.2% |
| ||||||
|
Europe Welding |
|
|
|
11.8% |
|
18.5% |
|
5.7% |
|
5.4% |
|
41.3% |
| ||||||
|
Asia Pacific Welding |
|
|
|
8.1% |
|
— |
|
1.0% |
|
7.0% |
|
16.1% |
| ||||||
|
South America Welding |
|
|
|
20.6% |
|
— |
|
9.9% |
|
2.9% |
|
33.4% |
| ||||||
|
The Harris Products Group |
|
|
|
7.3% |
|
— |
|
25.7% |
|
1.4% |
|
34.4% |
| ||||||
|
Consolidated |
|
|
|
14.8% |
|
5.8% |
|
6.9% |
|
2.6% |
|
30.2% |
| ||||||