SEC Filings

10-Q
LINCOLN ELECTRIC HOLDINGS INC filed this Form 10-Q on 10/30/2017
Entire Document
 

Working Capital Ratios
 
 
September 30, 2017
 
December 31, 2016
 
September 30, 2016
Average operating working capital to net sales (1)
 
20.5
%
 
15.6
%
 
17.7
%
Days sales in Inventories
 
108.8
 
92.1
 
100.3
Days sales in Accounts receivable
 
58.6
 
47.7
 
48.2
Average days in Trade accounts payable
 
54.8
 
48.9
 
45.3
(1) Average operating working capital to net sales is defined as the sum of Accounts receivable and Inventories less Trade accounts payable as of period end divided by annualized rolling three months of Net sales.

Return on Invested Capital
The Company reviews return on invested capital ("ROIC") in assessing and evaluating the Company's underlying operating performance. ROIC is a non-GAAP financial measure that the Company believes is a meaningful metric to investors in evaluating the Company’s financial performance and may be different than the method used by other companies to calculate ROIC. ROIC is defined as rolling 12 months of Adjusted net income excluding tax-effected interest income and expense divided by invested capital. Invested capital is defined as total debt, which includes Short-term debt and Long-term debt, less current portions, plus Total equity.
ROIC for the twelve months ended September 30, 2017 and 2016 were as follows:
 
 
Twelve Months Ended September 30,
 
 
2017
 
2016
Net income
 
$
276,717

 
$
193,696

Rationalization and asset impairment charges, net of tax of ($16)
 

 
450

Pension settlement charges, net of tax of $2,023 and $2,438 in 2017 and 2016, respectively
 
3,260

 
3,969

Loss on deconsolidation of Venezuelan subsidiary, net of tax of $1,097
 

 
33,251

Income tax valuation reversals
 

 
(7,196
)
Venezuela currency devaluation
 

 
708

Acquisition transaction and integration costs, net of tax of $2,929
 
8,457

 

Amortization of step up in value of acquired inventories, net of tax of $569
 
1,745

 

Bargain purchase gain
 
(51,585
)
 

Adjusted net income
 
$
238,594

 
$
224,878

Plus: Interest expense, net of tax of $9,795 and $6,816 in 2017 and 2016, respectively
 
15,789

 
13,342

Less: Interest income, net of tax of $1,614 and $596 in 2017 and 2016, respectively
 
2,602

 
1,182

Adjusted net income before tax effected interest
 
$
251,781

 
$
237,038

 
 
 
 
 
Invested Capital
 
September 30, 2017
 
September 30, 2016
Short-term debt
 
$
2,135

 
$
183,827

Long-term debt, less current portion
 
704,804

 
359,831

Total debt
 
706,939

 
543,658

Total equity
 
945,928

 
752,917

Invested capital
 
$
1,652,867

 
$
1,296,575

Return on invested capital
 
15.2
%
 
18.3
%

New Accounting Pronouncements
Refer to Note 1 to the consolidated financial statements for a discussion of new accounting pronouncements.

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