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LINCOLN ELECTRIC REPORTS RECORD 2012 SALES AND EPS; 4Q SALES OF $684.6 MILLION; FULL YEAR SALES OF $2.9 BILLION; 4Q OPERATING INCOME INCREASE OF 4.1%; ADJUSTED OPERATING INCOME INCREASE OF 10.2%; 4Q EPS OF $0.74, $0.79 AS ADJUSTED; FULL YEAR EPS OF $3.06,

Feb 15 2013
LINCOLN ELECTRIC REPORTS RECORD 2012 SALES AND EPS; 4Q SALES OF $684.6 MILLION; FULL YEAR SALES OF $2.9 BILLION; 4Q OPERATING INCOME INCREASE OF 4.1%; ADJUSTED OPERATING INCOME INCREASE OF 10.2%; 4Q EPS OF $0.74, $0.79 AS ADJUSTED; FULL YEAR EPS OF $3.06, $3.16 AS ADJUSTED

CLEVELAND, Feb. 15, 2013 /PRNewswire/ -- 

Fourth Quarter and Full Year 2012 Highlights

  • Sales were $684.6 million in the Fourth Quarter 2012; Sales were $2.9 billion for the Full year 2012, an increase of 5.9% from 2011
  • Operating income increased 4.1% to $85.7 million, or 12.5% of sales, from $82.4 million, or 11.9% of sales, in the Fourth Quarter 2011; Adjusted operating income increased 10.2% to $90.7 million, or 13.3% of sales
  • Operating income increased 22.0% to $362.1 million, or 12.7% of sales, from $296.7 million, or 11.0% of sales, in the Full year 2011; Adjusted operating income increased 25.5% to $372.8 million, or 13.1% of sales
  • Net income increased 7.5% to $62.1 million, or $0.74 per diluted share, from $57.7 million, or $0.68 per diluted share, in the Fourth Quarter 2011; Adjusted net income increased 14.2% to $65.9 million, or $0.79 per diluted share
  • Net income increased 18.5% to $257.4 million, or $3.06 per diluted share, from $217.2 million, or $2.56 per diluted share, in the Full year 2011; Adjusted net income increased 25.0% to $265.8 million, or $3.16 per diluted share from $212.6 million, or $2.51 per diluted share
  • Net cash provided by operating activities in the Fourth Quarter 2012 increased $21.0 million, or 33.3%, to $84.1 million; Net cash provided by operating activities in the Full year 2012 increased $134.0 million, or 69.2%, to $327.5 million

Lincoln Electric Holdings, Inc. (the "Company") (Nasdaq: LECO) today reported fourth quarter 2012 net income of $62.1 million, or $0.74 per diluted share.  Adjusted net income was $65.9 million, or $0.79 per diluted share, compared to adjusted net income of $57.7 million, or $0.68 per diluted share, in the comparable 2011 period.

Sales were $684.6 million in the fourth quarter 2012 versus $694.5 million in the comparable 2011 period, a decrease of 1.4%.  Operating income for the fourth quarter increased $3.3 million to $85.7 million, or 12.5% of sales, from $82.4 million, or 11.9% of sales, in the comparable 2011 period.  The effective tax rate for the fourth quarter 2012 was 29.3% compared with 30.8% in the same period of 2011.  

Sales for the twelve months ended December 31, 2012 were $2.9 billion versus $2.7 billion in 2011, an increase of 5.9%.  Operating income for the twelve months ended December 31, 2012 increased $65.4 million to $362.1 million, or 12.7% of sales, from $296.7 million, or 11.0% of sales, in 2011.

Net income for the twelve months ended December 31, 2012 was $257.4 million, or $3.06 per diluted share, compared with net income of $217.2 million, or $2.56 per diluted share, in 2011.  Adjusted net income was $265.8 million, or $3.16 per diluted share, compared to adjusted net income of $212.6 million, or $2.51 per diluted share, in 2011.  The effective tax rate for the twelve months ended December 31, 2012 was 30.4% compared with 28.0% in 2011.  The twelve months ended December 31, 2011 included a favorable $4.8 million tax adjustment for tax audit settlements.

"Our 2012 sales and earnings per share represent the highest in the Company's 118 year history," said John M. Stropki, Chairman of the Board.  "We are also pleased to report that we expanded margins, significantly increased return on invested capital and generated record cash flows.

"As we head into 2013, we continue to be cautious based on the uncertain global macroeconomic environment. We expect to see slower year-over-year overall growth in at least the first half of 2013; however, we remain very confident in our ability to execute our long-term strategic initiatives even in these challenging times."

Christopher L. Mapes, President and Chief Executive Officer added, "The goals set in our '2020 Vision' remain a priority, with our focus on achieving significant earnings growth and superior returns on invested capital. We continue to explore attractive acquisitions that will shape our product portfolio and grow our global reach, invest in new product development and expand our global commercial infrastructure.  Our continued attention to improvement in operating results and execution of our global growth strategies keep us well positioned to achieve our long-term goals."

Net cash provided by operating activities increased $21.0 million to $84.1 million in the fourth quarter from $63.1 million for the comparable period in 2011.  Fourth quarter cash flows from operations were reduced by a $33.4 million deposit related to a Canadian income tax assessment.  During the quarter, the Company returned $51.5 million to shareholders through the payment of $30.6 million in dividends and the repurchase of $20.9 million, or 455,518 of the Company's common shares, for treasury.  Dividends paid during the period included a December 28, 2012 dividend payment, which would normally have been paid in January 2013. The Company also invested $81.8 million in acquisitions and voluntarily contributed $10.1 million to its U.S. pension plans during the quarter.

Net cash provided by operating activities increased $134.0 million to $327.5 million in the twelve months ended December 31, 2012 from $193.5 million in 2011.  The 2012 cash flows from operations was reduced by a $89.4 million deposit related to a Canadian income tax assessment.  During the period, the Company repaid its $80.0 million senior unsecured note.  The Company also returned $154.1 million to shareholders through the payment of $73.1 million in dividends and the repurchase of $81.0 million, or 1,797,502 of the Company's common shares, for treasury during the period.  The Company also invested $134.6 million in acquisitions and voluntarily contributed $63.4 million to its U.S. pension plans.

The Company's Board of Directors declared a quarterly cash dividend of $0.20 per share, which was paid on December 28, 2012 to holders of record on December 17, 2012.

Financial results for the fourth quarter 2012 can also be obtained at http://www.lincolnelectric.com/InvestorNews.

A conference call to discuss fourth quarter 2012 financial results is scheduled for today, Friday, February 15, 2013, 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 oxy-fuel cutting equipment and has a leading global position in the brazing and soldering alloys market.  Headquartered in Cleveland, Ohio, Lincoln has 45 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 and its products and services, visit the Company's website at http://www.lincolnelectric.com.

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.


 

 

Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)

Consolidated Statements of Income

                                 
                         
   

Three months ended December 31, 2012

 

Fav (Unfav) to Prior Year

   

2012

 

% of Sales

 

2011

 

% of Sales

 

$

 

%

Net sales

 

$

684,648

 

100.0%

 

$

694,513

 

100.0%

 

$

(9,865)

 

(1.4%)

Cost of goods sold

 

471,616

 

68.9%

 

500,170

 

72.0%

 

28,554

 

5.7%

Gross profit

 

213,032

 

31.1%

 

194,343

 

28.0%

 

18,689

 

9.6%

Selling, general & administrative expenses

 

122,290

 

17.9%

 

111,981

 

16.1%

 

(10,309)

 

(9.2%)

Rationalization and asset impairment 
     charges (gains)

 

5,037

 

0.7%

 

 

 

(5,037)

 

(100.0%)

Operating income

 

85,705

 

12.5%

 

82,362

 

11.9%

 

3,343

 

4.1%

Interest income

 

1,340

 

0.2%

 

685

 

0.1%

 

655

 

95.6%

Equity earnings in affiliates

 

743

 

0.1%

 

1,352

 

0.2%

 

(609)

 

(45.0%)

Other income

 

670

 

0.1%

 

695

 

0.1%

 

(25)

 

(3.6%)

Interest expense

 

(853)

 

(0.1%)

 

(1,667)

 

(0.2%)

 

814

 

48.8%

Income before income taxes

 

87,605

 

12.8%

 

83,427

 

12.0%

 

4,178

 

5.0%

Income taxes

 

25,639

 

3.7%

 

25,736

 

3.7%

 

97

 

0.4%

Effective tax rate

 

29.3%

     

30.8%

     

1.5%

   

Net income including non-controlling
    interests

 

61,966

 

9.1%

 

57,691

 

8.3%

 

4,275

 

7.4%

Non-controlling interests in subsidiaries' 
    loss

 

(118)

 

 

(42)

 

 

(76)

 

(181.0%)

Net income

 

$

62,084

 

9.1%

 

$

57,733

 

8.3%

 

$

4,351

 

7.5%

                         

Basic earnings per share

 

$

0.75

     

$

0.69

     

$

0.06

 

8.7%

Diluted earnings per share

 

$

0.74

     

$

0.68

     

$

0.06

 

8.8%

Weighted average shares (basic)

 

82,651

     

83,384

           

Weighted average shares (diluted)

 

83,677

     

84,384

           
                         
   

Twelve months ended December 31,

 

Fav (Unfav) to Prior Year

   

2012

 

% of Sales

 

2011

 

% of Sales

 

$

 

%

Net sales

 

$

2,853,367

 

100.0%

 

$

2,694,609

 

100.0%

 

$

158,758

 

5.9%

Cost of goods sold

 

1,986,711

 

69.6%

 

1,957,872

 

72.7%

 

(28,839)

 

(1.5%)

Gross profit

 

866,656

 

30.4%

 

736,737

 

27.3%

 

129,919

 

17.6%

Selling, general & administrative expenses

 

495,221

 

17.4%

 

439,775

 

16.3%

 

(55,446)

 

(12.6%)

Rationalization and asset impairment 
    charges  (gains)

 

9,354

 

0.3%

 

282

 

 

(9,072)

 

(3,217.0%)

Operating income

 

362,081

 

12.7%

 

296,680

 

11.0%

 

65,401

 

22.0%

Interest income

 

3,988

 

0.1%

 

3,121

 

0.1%

 

867

 

27.8%

Equity earnings in affiliates

 

5,007

 

0.2%

 

5,385

 

0.2%

 

(378)

 

(7.0%)

Other income

 

2,685

 

0.1%

 

2,849

 

0.1%

 

(164)

 

(5.8%)

Interest expense

 

(4,191)

 

(0.1%)

 

(6,704)

 

(0.2%)

 

2,513

 

37.5%

Income before income taxes

 

369,570

 

13.0%

 

301,331

 

11.2%

 

68,239

 

22.6%

Income taxes

 

112,354

 

3.9%

 

84,318

 

3.1%

 

(28,036)

 

(33.3%)

Effective tax rate

 

30.4%

     

28.0%

     

(2.4%)

   

Net income including non-controlling 
    interests

 

257,216

 

9.0%

 

217,013

 

8.1%

 

40,203

 

18.5%

Non-controlling interests in subsidiaries' 
    loss

 

(195)

 

 

(173)

 

 

(22)

 

(12.7%)

Net income

 

$

257,411

 

9.0%

 

$

217,186

 

8.1%

 

$

40,225

 

18.5%

                         

Basic earnings per share

 

$

3.10

     

$

2.60

     

$

0.50

 

19.2%

Diluted earnings per share

 

$

3.06

     

$

2.56

     

$

0.50

 

19.5%

Weighted average shares (basic)

 

83,087

     

83,681

           

Weighted average shares (diluted)

 

84,175

     

84,708

           
                         

 

 

 

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,

   

2012

 

2011

 

2012

 

2011

Operating income as reported

 

$

85,705

   

$

82,362

   

$

362,081

   

$

296,680

 

Special items (pre-tax):

                       

   Rationalization and asset impairment charges (gains) (1)

 

5,037

   

   

9,354

   

282

 

   Venezuelan statutory severance obligation (2)

 

   

   

1,381

   

 

Adjusted operating income (4)

 

$

90,742

   

$

82,362

   

$

372,816

   

$

296,962

 
                 

Net income as reported

 

$

62,084

   

$

57,733

   

$

257,411

   

$

217,186

 

Special items (after-tax):

                       

   Rationalization and asset impairment charges (gains) (1)

 

3,823

   

   

7,442

   

237

 

   Venezuelan statutory severance obligation (2)

 

   

   

906

   

 

Adjustment for tax audit settlements (3)

 

   

   

   

(4,844)

 

Adjusted net income (4)

 

$

65,907

   

$

57,733

   

$

265,759

   

$

212,579

 
                 

Diluted earnings per share as reported

 

$

0.74

   

$

0.68

   

$

3.06

   

$

2.56

 

Special items

 

0.05

   

   

0.10

   

(0.05)

 

Adjusted diluted earnings per share (4)

 

$

0.79

   

$

0.68

   

$

3.16

   

$

2.51

 
                 

Weighted average shares (diluted)

 

83,677

   

84,384

   

84,175

   

84,708

 
   

(1)

The three and twelve months ended December 31, 2012 include net charges associated with severance, impairment and other costs from the consolidation of manufacturing operations initiated in 2012 partially offset by gains related to the sale of assets at rationalized operations.  The twelve months ended December 31, 2011 includes charges associated with severance and other costs from the consolidation of manufacturing operations initiated in 2009 partially offset by gains related to the sale of assets at rationalized operations.

   

(2)

Represents an unfavorable adjustment due to a change in Venezuelan labor law which provides for increased employee severance obligations.

   

(3)

Represents a favorable adjustment for tax audit settlements.

   

(4)

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.

 

 

 

Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands)
(Unaudited)

Balance Sheet Highlights

                 

Selected Consolidated Balance Sheet Data

 

December 31, 2012

   

December 31, 2011

 

Cash and cash equivalents

 

$

286,464

   

$

361,101

 

Total current assets

 

1,132,816

   

1,219,270

 

Property, plant and equipment, net

 

486,236

   

470,451

 

Total assets

 

2,089,863

   

1,976,776

 

Total current liabilities

 

440,267

   

471,042

 

Short-term debt (1)

 

18,676

   

101,418

 

Long-term debt

 

1,599

   

1,960

 

Total equity

 

1,358,321

   

1,193,242

 
         

Net Operating Working Capital

 

December 31, 2012

   

December 31, 2011

 

Accounts receivable

 

$

360,662

   

$

386,197

 

Inventory

 

364,890

   

373,238

 

Trade accounts payable

 

209,647

   

176,312

 

Net operating working capital

 

$

515,905

   

$

583,123

 
         

Net operating working capital to net sales (2)

 

18.8%

   

21.0%

 
         

Invested Capital

 

December 31, 2012

   

December 31, 2011

 

Short-term debt (1)

 

$

18,676

   

$

101,418

 

Long-term debt

 

1,599

   

1,960

 

Total debt

 

20,275

   

103,378

 

Total equity

 

1,358,321

   

1,193,242

 

Invested capital

 

$

1,378,596

   

$

1,296,620

 
         

Total debt / invested capital

 

1.5%

   

8.0%

 

Return on invested capital (3)

 

18.7%

   

16.9%

 
   

(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)

 

Condensed Consolidated Statements of Cash Flows

                 
   

Three months ended December 31,

   

2012

 

2011

OPERATING ACTIVITIES:

           

Net income

 

$

62,084

   

$

57,733

 

Non-controlling interests in subsidiaries' loss

 

(118)

   

(42)

 

Net income including non-controlling interests

 

61,966

   

57,691

 

Adjustments to reconcile Net income including non-controlling interests to Net cash

    provided by operating activities:

           

Rationalization and asset impairment charges

 

1,383

   

 

Depreciation and amortization

 

17,114

   

14,962

 

Equity loss (earnings) in affiliates, net

 

1,609

   

(655)

 

Other non-cash items, net

 

11,423

   

16,508

 

Changes in operating assets and liabilities, net of effects from acquisitions:

           

Decrease in accounts receivable

 

44,009

   

4,769

 

Decrease in inventories

 

35,118

   

47,048

 

Increase (decrease) in trade accounts payable

 

17,292

   

(26,316)

 

Net change in other current assets and liabilities

 

(61,032)

   

(49,103)

 

Decrease in accrued pensions

 

(10,729)

   

(1,286)

 

Net change in other long-term assets and liabilities

 

(34,010)

   

(478)

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

84,143

   

63,140

 
         

INVESTING ACTIVITIES:

           

Capital expenditures

 

(13,408)

   

(15,063)

 

Acquisition of businesses, net of cash acquired

 

(81,751)

   

(3,889)

 

Proceeds from sale of property, plant and equipment

 

849

   

243

 

NET CASH USED BY INVESTING ACTIVITIES

 

(94,310)

   

(18,709)

 
         

FINANCING ACTIVITIES:

           

Net change in borrowings

 

(1,302)

   

10,827

 

Proceeds from exercise of stock options

 

6,081

   

4,140

 

Tax benefit from exercise of stock options

 

2,225

   

589

 

Purchase of shares for treasury

 

(20,863)

   

(9,367)

 

Cash dividends paid to shareholders

 

(30,602)

   

(12,934)

 

Other financing activities

 

   

3,346

 

NET CASH USED BY FINANCING ACTIVITIES

 

(44,461)

   

(3,399)

 
         

Effect of exchange rate changes on Cash and cash equivalents

 

417

   

(1,391)

 

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

 

(54,211)

   

39,641

 

Cash and cash equivalents at beginning of period

 

340,675

   

321,460

 

Cash and cash equivalents at end of period

 

$

286,464

   

$

361,101

 
         

Cash dividends paid per share

 

$

0.37

   

$

0.155

 

 

 

Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)

 

Condensed Consolidated Statements of Cash Flows

                 
   

Twelve months ended December 31,

   

2012

 

2011

OPERATING ACTIVITIES:

           

Net income

 

$

257,411

   

$

217,186

 

Non-controlling interests in subsidiaries' loss

 

(195)

   

(173)

 

Net income including non-controlling interests

 

257,216

   

217,013

 

Adjustments to reconcile Net income including non-controlling interests to Net cash

    provided by operating activities:

           

Rationalization and asset impairment charges

 

1,740

   

23

 

Depreciation and amortization

 

65,334

   

62,051

 

Equity loss (earnings) in affiliates, net

 

160

   

(1,971)

 

Other non-cash items, net

 

40,582

   

44,564

 

Changes in operating assets and liabilities, net of effects from acquisitions:

           

Decrease (increase) in accounts receivable

 

57,759

   

(67,518)

 

Decrease (increase) in inventories

 

28,286

   

(51,679)

 

Increase in trade accounts payable

 

16,110

   

8,672

 

Net change in other current assets and liabilities

 

12,381

   

17,981

 

Decrease in accrued pensions

 

(65,201)

   

(31,776)

 

Net change in other long-term assets and liabilities

 

(86,883)

   

(3,842)

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

327,484

   

193,518

 
         

INVESTING ACTIVITIES:

           

Capital expenditures

 

(52,715)

   

(65,813)

 

Acquisition of businesses, net of cash acquired

 

(134,602)

   

(66,229)

 

Proceeds from sale of property, plant and equipment

 

1,387

   

1,246

 

Other investing activities

 

(1,541)

   

 

NET CASH USED BY INVESTING ACTIVITIES

 

(187,471)

   

(130,796)

 
         

FINANCING ACTIVITIES:

           

Net change in borrowings

 

(89,303)

   

7,949

 

Proceeds from exercise of stock options

 

18,776

   

11,351

 

Tax benefit from exercise of stock options

 

7,819

   

2,916

 

Purchase of shares for treasury

 

(81,018)

   

(36,997)

 

Cash dividends paid to shareholders

 

(73,112)

   

(51,935)

 

Other financing activities

 

   

3,346

 

NET CASH USED BY FINANCING ACTIVITIES

 

(216,838)

   

(63,370)

 
         

Effect of exchange rate changes on Cash and cash equivalents

 

2,188

   

(4,444)

 

DECREASE IN CASH AND CASH EQUIVALENTS

 

(74,637)

   

(5,092)

 

Cash and cash equivalents at beginning of period

 

361,101

   

366,193

 

Cash and cash equivalents at end of period

 

$

286,464

   

$

361,101

 
         

Cash dividends paid per share

 

$

0.88

   

$

0.62

 

 

 

Lincoln Electric Holdings, Inc.
Segment Highlights
(In thousands)
(Unaudited)

                                                         
   

North

America

Welding

 

Europe

Welding

 

Asia Pacific

Welding

 

South

America

Welding

 

The Harris

Products

Group

 

Corporate /

Eliminations

 

Consolidated

Three months ended

   December 31, 2012

                           

Net sales

 

$

392,939

 

$

107,507

 

$

70,223

 

$

39,931

 

$

74,048

 

$

 

$

684,648

Inter-segment sales

 

29,676

 

3,870

 

3,188

 

 

1,944

 

(38,678)

 

Total

 

$

422,615

 

$

111,377

 

$

73,411

 

$

39,931

 

$

75,992

 

$

(38,678)

 

$

684,648

EBIT (1)

 

$

75,925

 

$

3,914

 

$

(5,090)

 

$

4,829

 

$

5,544

 

$

1,996

 

$

87,118

As a percent of total sales

 

18.0%

 

3.5%

 

(6.9%)

 

12.1%

 

7.3%

     

12.7%

Special items charge (gain) (2)

 

$

273

 

$

1,068

 

$

3,696

 

$

 

$

 

$

 

$

5,037

EBIT, as adjusted (4)

 

$

76,198

 

$

4,982

 

$

(1,394)

 

$

4,829

 

$

5,544

 

$

1,996

 

$

92,155

As a percent of total sales

 

18.0%

 

4.5%

 

(1.9%)

 

12.1%

 

7.3%

     

13.5%

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)

 

$

 

$

 

$

 

$

 

$

 

$

 

$

EBIT, as adjusted (4)

 

$

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%

Twelve months ended

   December 31, 2012

                           

Net sales

 

$

1,580,818

 

$

452,227

 

$

324,482

 

$

161,483

 

$

334,357

 

$

 

$

2,853,367

Inter-segment sales

 

131,062

 

16,048

 

14,829

 

38

 

8,549

 

(170,526)

 

Total

 

$

1,711,880

 

$

468,275

 

$

339,311

 

$

161,521

 

$

342,906

 

$

(170,526)

 

$

2,853,367

EBIT (1)

 

$

292,243

 

$

33,765

 

$

2,254

 

$

16,920

 

$

29,477

 

$

(4,886)

 

$

369,773

As a percent of total sales

 

17.1%

 

7.2%

 

0.7%

 

10.5%

 

8.6%

     

13.0%

Special items charge (gain) (2)

 

$

827

 

$

3,534

 

$

4,993

 

$

1,381

 

$

 

$

 

$

10,735

EBIT, as adjusted (4)

 

$

293,070

 

$

37,299

 

$

7,247

 

$

18,301

 

$

29,477

 

$

(4,886)

 

$

380,508

As a percent of total sales

 

17.1%

 

8.0%

 

2.1%

 

11.3%

 

8.6%

     

13.3%

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) (3)

 

$

 

$

392

 

$

(110)

 

$

 

$

 

$

 

$

282

EBIT, as adjusted (4)

 

$

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%

   

(1)

EBIT is defined as Operating income plus Equity earnings in affiliates and Other income.

   

(2)

Special items in the three and twelve month periods ended December 31, 2012 include rationalization and asset impairment charges (gains).  Special items in the twelve months ended December 31, 2012 also include an unfavorable adjustment due to a change in Venezuelan labor law which provides for increased employee severance obligations.

   

(3)

Special items include rationalization and asset impairment charges (gains).

   

(4)

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.

 

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

2011

 

Volume

 

Acquisitions

 

Price

 

Foreign

Exchange

 

Net Sales

2012

Operating Segments

                       

North America Welding

 

$

361,905

 

$

(2,722)

 

$

26,469

 

$

6,072

 

$

1,215

 

$

392,939

Europe Welding

 

126,942

 

(15,952)

 

 

(2,252)

 

(1,231)

 

107,507

Asia Pacific Welding

 

88,204

 

(18,138)

 

 

(429)

 

586

 

70,223

South America Welding

 

40,673

 

(1,700)

 

 

2,894

 

(1,936)

 

39,931

The Harris Products Group

 

76,789

 

(2,058)

 

 

704

 

(1,387)

 

74,048

Consolidated

 

$

694,513

 

$

(40,570)

 

$

26,469

 

$

6,989

 

$

(2,753)

 

$

684,648

% Change

                       

North America Welding

     

(0.8%)

 

7.3%

 

1.7%

 

0.3%

 

8.6%

Europe Welding

     

(12.6%)

 

 

(1.8%)

 

(1.0%)

 

(15.3%)

Asia Pacific Welding

     

(20.6%)

 

 

(0.5%)

 

0.7%

 

(20.4%)

South America Welding

     

(4.2%)

 

 

7.1%

 

(4.8%)

 

(1.8%)

The Harris Products Group

     

(2.7%)

 

 

0.9%

 

(1.8%)

 

(3.6%)

Consolidated

     

(5.8%)

 

3.8%

 

1.0%

 

(0.4%)

 

(1.4%)

 


 

Twelve Months Ended December 31st Change in Net Sales by Segment

                                                 
       

Change in Net Sales due to:

   
   

Net Sales

2011

 

Volume

 

Acquisitions

 

Price

 

Foreign

Exchange

 

Net Sales

2012

Operating Segments

                       

North America Welding

 

$

1,309,499

 

$

112,898

 

$

124,830

 

$

37,124

 

$

(3,533)

 

$

1,580,818

Europe Welding

 

508,692

 

(36,199)

 

8,322

 

4,874

 

(33,462)

 

452,227

Asia Pacific Welding

 

376,276

 

(54,289)

 

 

1,646

 

849

 

324,482

South America Welding

 

156,684

 

(1,284)

 

 

15,584

 

(9,501)

 

161,483

The Harris Products Group

 

343,458

 

13,683

 

 

(13,427)

 

(9,357)

 

334,357

Consolidated

 

$

2,694,609

 

$

34,809

 

$

133,152

 

$

45,801

 

$

(55,004)

 

$

2,853,367

% Change

                       

North America Welding

     

8.6%

 

9.5%

 

2.8%

 

(0.3%)

 

20.7%

Europe Welding

     

(7.1%)

 

1.6%

 

1.0%

 

(6.6%)

 

(11.1%)

Asia Pacific Welding

     

(14.4%)

 

 

0.4%

 

0.2%

 

(13.8%)

South America Welding

     

(0.8%)

 

 

9.9%

 

(6.1%)

 

3.1%

The Harris Products Group

     

4.0%

 

 

(3.9%)

 

(2.7%)

 

(2.6%)

Consolidated

     

1.3%

 

4.9%

 

1.7%

 

(2.0%)

 

5.9%

SOURCE Lincoln Electric Holdings, Inc.

Roy L. Morrow, +1-216-383-4893, Roy_Morrow@lincolnelectric.com

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Lincoln Electric Holdings Inc's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.