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Lincoln Electric Reports Second Quarter 2015 Results

Jul 27 2015
Q2 EPS of $0.94, Adjusted EPS of $0.95

CLEVELAND, July 27, 2015 /PRNewswire/ --

 

 


Second Quarter 2015 Key Metric Highlights

 
  • Sales decreased 8.8% to $665 million, down 2.9% excluding unfavorable foreign exchange on weaker volumes
  • Operating income margin of 14.6% of net sales, or 14.7% on an adjusted basis
  • Net operating working capital at 18.0% of net sales
  • Cash flows from operations for first half 2015 up 9.7% to $130 million
 

 

Lincoln Electric Holdings, Inc. (the "Company") (Nasdaq: LECO) today reported second quarter 2015 net income of $70.9 million, or $0.94 diluted earnings per share (EPS).  This compares with net income of $77.3 million, or EPS of $0.96 in the comparable 2014 period.  Adjusted net income was $71.8 million, or Adjusted EPS of $0.95, compared to $81.5 million, or Adjusted EPS of $1.01, in the comparable 2014 period.  The 2014 adjusted EPS includes $0.04 of earnings from our Venezuelan operations, which operates in a hyper-inflationary environment.  This compares with earnings of $0.02 per share from our Venezuelan operations in the second quarter 2015.

Sales decreased 8.8% to $664.7 million in the second quarter 2015 versus $728.5 million in the comparable 2014 period primarily due to lower volumes and unfavorable foreign currency translation.  Operating income for the second quarter decreased 13.8% to $96.8 million, or 14.6% of sales, from $112.3 million, or 15.4% of sales, in the comparable 2014 period.  Adjusted operating income decreased 15.9% to $98.0 million or 14.7% of sales, compared with $116.6 million, or 16.0% of sales in 2014.  The Company recognized charges to interest expense of $2.1 million or $0.03 per diluted share, representing adjustments in the quarter to the amount expected to be paid to acquire additional interests of a majority-owned subsidiary.  Income taxes in the quarter ending June 30, 2015 include discrete tax benefits of $3.4 million, or $0.05 per diluted share.  Operating Income and Adjusted operating income in the second quarter 2014 included a $3.9 million gain, $2.5 million after-tax or $0.03 per diluted share, from an insurance settlement. 

Christopher L. Mapes, Chairman, President and Chief Executive Officer stated, "Business conditions were challenging in the quarter as growth in automation was offset by weaker oil and gas and U.S. export demand.  We initiated a number of actions during the quarter to align our cost structure with softer market conditions, which helped generate modest sequential improvements in our profit margins and operating working capital ratio to net sales.  While we remain cautious on 2015 demand trends, we continue to invest in our strategic programs and expect our efforts will help maximize profitability and shareholder returns through the economic cycle."

Dividend and Share Repurchases

The Company's Board of Directors declared a quarterly cash dividend of $0.29 per share, which was paid on July 15, 2015 to shareholders of record as of June 30, 2015.  During the quarter, the Company returned $55.6 million to shareholders through the repurchase of the Company's common shares.

Six Months 2015 Summary

Net income for the six months ended June 30, 2015 was $139.3 million, or EPS of $1.82.  This compares with net income of $133.8 million, or EPS of $1.65, in 2014.  Adjusted net income for the six months ended June 30, 2015 was $140.2 million, or Adjusted EPS of $1.83, compared with Adjusted net income of $155.6 million, or Adjusted EPS of $1.92, in 2014.  Adjusted net income for the six months ended June 30, 2015 includes earnings of $0.04 per diluted share from the Company's Venezuelan operations as compared with $0.18 per diluted share in the comparable 2014 period. 

Sales decreased 6.4% to $1.3 billion in the six months ended June 30, 2015 as compared with $1.4 billion in the comparable 2014 period.  This result primarily reflects unfavorable foreign exchange translation.  Operating income for the six months ended June 30, 2015 decreased to $187.3 million, or 14.2% of sales, compared with $192.7 million, or 13.6% of sales, in the comparable 2014 period.  Adjusted operating income was $188.5 million or 14.3% of sales, compared with $214.7 million, or 15.2% of sales in 2014.

Webcast Information

A conference call to discuss second quarter 2015 financial results will be webcast live today, July 27, 2015, at 10:00 a.m., Eastern Time.  This webcast is accessible at http://ir.lincolnelectric.com.  Listeners should go to the web site prior to the call to register and download and install any necessary audio software.  A replay of the webcast will be available on the Company's web site.

Investors who are unable to access the webcast may listen to the conference call live by telephone by dialing (877) 344-3899 (domestic) or (315) 625-3087 (international) and use confirmation code 76673627.  Telephone participants are asked to dial in 10-15 minutes prior to the start of the conference call.

Financial results for the second quarter 2015 can also be obtained at http://ir.lincolnelectric.com.

About Lincoln Electric

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 47 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 www.lincolnelectric.com.

Non-GAAP Information

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.

Forward-Looking Statements

The Company's expectations and beliefs concerning the future contained in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements reflect management's current expectations and involve a number of risks and uncertainties.  Forward-looking statements generally can be identified by the use of words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "forecast," "guidance" or words of similar meaning.  Actual results may differ materially from such statements due to a variety of factors that could adversely affect the Company's operating results.  The factors include, but are not limited to: general economic and market conditions; the effectiveness of operating initiatives; completion of planned divestitures; interest rates; disruptions, uncertainty or volatility in the credit markets that may limit our access to capital; currency exchange rates and devaluations, including in highly inflationary countries such as Venezuela; adverse outcome of pending or potential litigation; actual costs of the Company's rationalization plans; 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 for the year ended December 31, 2014.

 

 

 

Lincoln Electric Holdings, Inc.

Financial Highlights

(In thousands, except per share amounts)

(Unaudited)

Consolidated Statements of Income

 
                         
   

Three months ended June 30,

 

Fav (Unfav) to Prior Year

   

2015

 

% of Sales

 

2014

 

% of Sales

 

$

 

%

Net sales

 

$

664,740

   

100.0%

   

$

728,531

   

100.0%

   

$

(63,791)

   

(8.8%)

 

Cost of goods sold

 

438,959

   

66.0%

   

478,264

   

65.6%

   

39,305

   

8.2%

 

Gross profit

 

225,781

   

34.0%

   

250,267

   

34.4%

   

(24,486)

   

(9.8%)

 

Selling, general & administrative expenses

 

127,755

   

19.2%

   

137,156

   

18.8%

   

9,401

   

6.9%

 

Rationalization and asset impairment charges

 

1,239

   

0.2%

   

836

   

0.1%

   

(403)

   

(48.2%)

 

Operating income

 

96,787

   

14.6%

   

112,275

   

15.4%

   

(15,488)

   

(13.8%)

 

Interest income

 

738

   

0.1%

   

924

   

0.1%

   

(186)

   

(20.1%)

 

Equity earnings in affiliates

 

979

   

0.1%

   

1,575

   

0.2%

   

(596)

   

(37.8%)

 

Other income

 

317

   

   

1,078

   

0.1%

   

(761)

   

(70.6%)

 

Interest expense

 

(4,387)

   

(0.7%)

   

(986)

   

(0.1%)

   

(3,401)

   

(344.9%)

 

Income before income taxes

 

94,434

   

14.2%

   

114,866

   

15.8%

   

(20,432)

   

(17.8%)

 

Income taxes

 

23,558

   

3.5%

   

37,577

   

5.2%

   

14,019

   

37.3%

 

Effective tax rate

 

24.9%

       

32.7%

       

7.8%

     

Net income including non-controlling interests

 

70,876

   

10.7%

   

77,289

   

10.6%

   

(6,413)

   

(8.3%)

 

Non-controlling interests in subsidiaries' loss

 

(22)

   

   

(43)

   

   

21

   

48.8%

 

Net income

 

$

70,898

   

10.7%

   

$

77,332

   

10.6%

   

$

(6,434)

   

(8.3%)

 
                         

Basic earnings per share

 

$

0.95

       

$

0.97

       

$

(0.02)

   

(2.1%)

 

Diluted earnings per share

 

$

0.94

       

$

0.96

       

$

(0.02)

   

(2.1%)

 

Weighted average shares (basic)

 

75,000

       

79,873

             

Weighted average shares (diluted)

 

75,773

       

80,773

             
   

Six months ended June 30,

 

Fav (Unfav) to Prior Year

   

2015

 

% of Sales

 

2014

 

% of Sales

 

$

 

%

Net sales

 

$

1,322,640

   

100.0%

   

$

1,413,593

   

100.0%

   

$

(90,953)

   

(6.4%)

 

Cost of goods sold

 

876,469

   

66.3%

   

936,990

   

66.3%

   

60,521

   

6.5%

 

Gross profit

 

446,171

   

33.7%

   

476,603

   

33.7%

   

(30,432)

   

(6.4%)

 

Selling, general & administrative expenses

 

257,646

   

19.5%

   

283,071

   

20.0%

   

25,425

   

9.0%

 

Rationalization and asset impairment charges

 

1,239

   

0.1%

   

819

   

0.1%

   

(420)

   

51.3%

 

Operating income

 

187,286

   

14.2%

   

192,713

   

13.6%

   

(5,427)

   

(2.8%)

 

Interest income

 

1,331

   

0.1%

   

1,838

   

0.1%

   

(507)

   

(27.6%)

 

Equity earnings in affiliates

 

1,828

   

0.1%

   

3,136

   

0.2%

   

(1,308)

   

(41.7%)

 

Other income

 

2,927

   

0.2%

   

2,161

   

0.2%

   

766

   

35.4%

 

Interest expense

 

(6,231)

   

(0.5%)

   

(2,556)

   

(0.2%)

   

(3,675)

   

(143.8%)

 

Income before income taxes

 

187,141

   

14.1%

   

197,292

   

14.0%

   

(10,151)

   

(5.1%)

 

Income taxes

 

47,947

   

3.6%

   

63,579

   

4.5%

   

15,632

   

24.6%

 

Effective tax rate

 

25.6%

       

32.2%

       

6.6%

     

Net income including non-controlling interests

 

139,194

   

10.5%

   

133,713

   

9.5%

   

5,481

   

4.1%

 

Non-controlling interests in subsidiaries' loss

 

(58)

   

   

(72)

   

   

14

   

19.4%

 

Net income

 

$

139,252

   

10.5%

   

$

133,785

   

9.5%

   

$

5,467

   

4.1%

 
                         

Basic earnings per share

 

$

1.84

       

$

1.67

       

$

0.17

   

10.2%

 

Diluted earnings per share

 

$

1.82

       

$

1.65

       

$

0.17

   

10.3%

 

Weighted average shares (basic)

 

75,621

       

80,260

             

Weighted average shares (diluted)

 

76,416

       

81,194

             

 

 

 

Lincoln Electric Holdings, Inc.

Financial Highlights

(In thousands, except per share amounts)

(Unaudited)

Non-GAAP Financial Measures

 
   

Three months ended June 30,

 

Six months ended June 30,

   

2015

 

2014

 

2015

 

2014

Operating income as reported

 

$

96,787

   

$

112,275

   

$

187,286

   

$

192,713

 

Special items (pre-tax):

               

Rationalization and asset impairment charges (1)

 

1,239

   

836

   

1,239

   

819

 

Venezuela foreign exchange losses (2)

 

   

3,468

   

   

21,133

 

Adjusted operating income (3)

 

$

98,026

   

$

116,579

   

$

188,525

   

$

214,665

 
                 

Net income as reported

 

$

70,898

   

$

77,332

   

$

139,252

   

$

133,785

 

Special items (after-tax):

               

Rationalization and asset impairment charges (1)

 

900

   

698

   

900

   

691

 

Venezuela foreign exchange losses (2)

 

   

3,468

   

   

21,133

 

Adjusted net income (3)

 

$

71,798

   

$

81,498

   

$

140,152

   

$

155,609

 
                 

Diluted earnings per share as reported

 

$

0.94

   

$

0.96

   

$

1.82

   

$

1.65

 

Special items

 

0.01

   

0.05

   

0.01

   

0.27

 

Adjusted diluted earnings per share (3)

 

$

0.95

   

$

1.01

   

$

1.83

   

$

1.92

 
                 

Weighted average shares (diluted)

 

75,773

   

80,773

   

76,416

   

81,194

 

 

(1)

The three and six months ended June 30, 2015 and 2014 include net charges primarily related to severance and other related costs.  Rationalization charges in 2014 are partially offset by gains related to the sale of assets at rationalized operations.

(2)

The three and six months ended June 30, 2014 represents the impact of the Venezuelan remeasurement loss related to the adoption of a new foreign exchange mechanism.

(3)

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

 

June 30, 2015

 

December 31, 2014

Cash and cash equivalents

 

$

312,737

   

$

278,379

 

Total current assets

 

1,089,236

   

1,098,677

 

Property, plant and equipment, net

 

429,329

   

437,209

 

Total assets

 

1,950,166

   

1,939,215

 

Total current liabilities

 

470,556

   

492,419

 

Short-term debt (1)

 

62,595

   

68,166

 

Long-term debt

 

151,563

   

2,488

 

Total equity

 

1,196,658

   

1,285,781

 
         

Net Operating Working Capital

 

June 30, 2015

 

December 31, 2014

Accounts receivable

 

$

329,223

   

$

321,862

 

Inventory

 

321,723

   

330,840

 

Trade accounts payable

 

172,114

   

202,482

 

Net operating working capital

 

$

478,832

   

$

450,220

 
         

Net operating working capital to net sales (2)

 

18.0%

   

16.5%

 
         

Invested Capital

 

June 30, 2015

 

December 31, 2014

Short-term debt (1)

 

$

62,595

   

$

68,166

 

Long-term debt

 

151,563

   

2,488

 

Total debt

 

214,158

   

70,654

 

Total equity

 

1,196,658

   

1,285,781

 

Invested capital

 

$

1,410,816

   

$

1,356,435

 
         

Total debt / invested capital

 

15.2%

   

5.2%

 

Return on invested capital (3)

 

18.9%

   

19.1%

 

 

(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 June 30,

   

2015

 

2014

OPERATING ACTIVITIES:

       

Net income

 

$

70,898

   

$

77,332

 

Non-controlling interests in subsidiaries' loss

 

(22)

   

(43)

 

Net income including non-controlling interests

 

70,876

   

77,289

 

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

   provided by operating activities:

       

Rationalization and asset impairment charges

 

   

894

 

Depreciation and amortization

 

15,686

   

17,969

 

Equity earnings in affiliates, net

 

(272)

   

(701)

 

Pension expense

 

4,925

   

2,676

 

Pension contributions and payments

 

(26,471)

   

(2,083)

 

Other non-cash items, net

 

12,772

   

(3,325)

 

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

       

  Decrease in accounts receivable

 

11,695

   

544

 

  Decrease (increase) in inventories

 

17,773

   

(2,298)

 

  Decrease in trade accounts payable

 

(18,301)

   

(3,341)

 

  Net change in other current assets and liabilities

 

(11,234)

   

21,833

 

  Net change in other long-term assets and liabilities

 

(163)

   

(4,483)

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

77,286

   

104,974

 
         

INVESTING ACTIVITIES:

       

Capital expenditures

 

(16,761)

   

(25,441)

 

Proceeds from sale of property, plant and equipment

 

234

   

4,443

 

Other investing activities

 

   

205

 

NET CASH USED BY INVESTING ACTIVITIES

 

(16,527)

   

(20,793)

 
         

FINANCING ACTIVITIES:

       

Net change in borrowings

 

42,540

   

(2,087)

 

Proceeds from exercise of stock options

 

2,303

   

1,054

 

Excess tax benefits from stock-based compensation

 

756

   

826

 

Purchase of shares for treasury

 

(55,615)

   

(68,312)

 

Cash dividends paid to shareholders

 

(21,919)

   

(18,496)

 

Other financing activities

 

(7,976)

   

 

NET CASH USED BY FINANCING ACTIVITIES

 

(39,911)

   

(87,015)

 
         

Effect of exchange rate changes on Cash and cash equivalents

 

2,872

   

1,732

 

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

23,720

   

(1,102)

 

Cash and cash equivalents at beginning of period

 

289,017

   

205,387

 

Cash and cash equivalents at end of period

 

$

312,737

   

$

204,285

 
         

Cash dividends paid per share

 

$

0.29

   

$

0.23

 

 

  

 

Lincoln Electric Holdings, Inc.

Financial Highlights

(In thousands, except per share amounts)

(Unaudited)

 

Condensed Consolidated Statements of Cash Flows

 
   

Six months ended June 30,

   

2015

 

2014

OPERATING ACTIVITIES:

       

Net income

 

$

139,252

   

$

133,785

 

Non-controlling interests in subsidiaries' loss

 

(58)

   

(72)

 

Net income including non-controlling interests

 

139,194

   

133,713

 

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

   provided by operating activities:

       

Rationalization and asset impairment charges

 

30

   

859

 

Depreciation and amortization

 

31,718

   

35,900

 

Equity earnings in affiliates, net

 

(488)

   

(1,497)

 

Pension expense

 

10,604

   

5,476

 

Pension contributions and payments

 

(47,705)

   

(24,164)

 

Other non-cash items, net

 

(5,790)

   

20,659

 

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

       

  Increase in accounts receivable

 

(13,682)

   

(43,341)

 

  Decrease (increase) in inventories

 

1,540

   

(17,455)

 

  Decrease in trade accounts payable

 

(31,217)

   

(15,449)

 

  Net change in other current assets and liabilities

 

43,835

   

27,380

 

  Net change in other long-term assets and liabilities

 

2,031

   

(3,476)

 

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

130,070

   

118,605

 
         

INVESTING ACTIVITIES:

       

Capital expenditures

 

(29,217)

   

(39,947)

 

Acquisition of businesses, net of cash acquired

 

   

(892)

 

Proceeds from sale of property, plant and equipment

 

1,421

   

5,509

 

Other investing activities

 

2,024

   

778

 

NET CASH USED BY INVESTING ACTIVITIES

 

(25,772)

   

(34,552)

 
         

FINANCING ACTIVITIES:

       

Net change in borrowings

 

144,050

   

(10,143)

 

Proceeds from exercise of stock options

 

4,036

   

4,010

 

Excess tax benefits from stock-based compensation

 

1,293

   

2,478

 

Purchase of shares for treasury

 

(158,468)

   

(119,333)

 

Cash dividends paid to shareholders

 

(44,248)

   

(37,119)

 

Other financing activities

 

(7,996)

   

(2,330)

 

NET CASH USED BY FINANCING ACTIVITIES

 

(61,333)

   

(162,437)

 
         

Effect of exchange rate changes on Cash and cash equivalents

 

(8,607)

   

(17,156)

 

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

34,358

   

(95,540)

 

Cash and cash equivalents at beginning of period

 

278,379

   

299,825

 

Cash and cash equivalents at end of period

 

$

312,737

   

$

204,285

 
         

Cash dividends paid per share

 

$

0.58

   

$

0.46

 

 

 

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 June 30, 2015

                       

Net sales

 

$

415,075

   

$

90,903

   

$

49,043

   

$

37,907

   

$

71,812

   

$

   

$

664,740

 

Inter-segment sales

 

25,613

   

4,463

   

2,964

   

118

   

2,716

   

(35,874)

   

 

Total

 

$

440,688

   

$

95,366

   

$

52,007

   

$

38,025

   

$

74,528

   

$

(35,874)

   

$

664,740

 
                             

EBIT (1)

 

$

77,494

   

$

8,242

   

$

2,244

   

$

1,378

   

$

8,250

   

$

475

   

$

98,083

 

As a percent of total sales

 

17.6%

   

8.6%

   

4.3%

   

3.6%

   

11.1%

       

14.8%

 

Special items charge (gain) (2)

 

$

   

$

1,239

   

$

   

$

   

$

   

$

   

$

1,239

 

EBIT, as adjusted (4)

 

$

77,494

   

$

9,481

   

$

2,244

   

$

1,378

   

$

8,250

   

$

475

   

$

99,322

 

As a percent of total sales

 

17.6%

   

9.9%

   

4.3%

   

3.6%

   

11.1%

       

14.9%

 


Three months ended June 30, 2014

                         

Net sales

 

$

429,490

   

$

115,574

   

$

66,997

   

$

39,051

   

$

77,419

   

$

   

$

728,531

 

Inter-segment sales

 

33,360

   

5,494

   

3,600

   

35

   

2,262

   

(44,751)

   

 

Total

 

$

462,850

   

$

121,068

   

$

70,597

   

$

39,086

   

$

79,681

   

$

(44,751)

   

$

728,531

 
                             

EBIT (1)

 

$

91,216

   

$

13,934

   

$

473

   

$

1,527

   

$

7,178

   

$

600

   

$

114,928

 

As a percent of total sales

 

19.7%

   

11.5%

   

0.7%

   

3.9%

   

9.0%

       

15.8%

 

Special items charge (gain) (3)

 

$

(21)

   

$

965

   

$

(108)

   

$

3,468

   

$

   

$

   

$

4,304

 

EBIT, as adjusted (4)

 

$

91,195

   

$

14,899

   

$

365

   

$

4,995

   

$

7,178

   

$

600

   

$

119,232

 

As a percent of total sales

 

19.7%

   

12.3%

   

0.5%

   

12.8%

   

9.0%

       

16.4%

 


Six months ended June 30, 2015

                       

Net sales

 

$

828,063

   

$

179,319

   

$

98,293

   

$

75,337

   

$

141,628

   

$

   

$

1,322,640

 

Inter-segment sales

 

51,742

   

8,056

   

6,234

   

118

   

4,727

   

(70,877)

   

 

Total

 

$

879,805

   

$

187,375

   

$

104,527

   

$

75,455

   

$

146,355

   

$

(70,877)

   

$

1,322,640

 
                             

EBIT (1)

 

$

148,678

   

$

16,990

   

$

5,372

   

$

4,528

   

$

15,799

   

$

674

   

$

192,041

 

As a percent of total sales

 

16.9%

   

9.1%

   

5.1%

   

6.0%

   

10.8%

       

14.5%

 

Special items charge (gain) (2)

 

$

   

$

1,239

   

$

   

$

   

$

   

$

   

$

1,239

 

EBIT, as adjusted (4)

 

$

148,678

   

$

18,229

   

$

5,372

   

$

4,528

   

$

15,799

   

$

674

   

$

193,280

 

As a percent of total sales

 

16.9%

   

9.7%

   

5.1%

   

6.0%

   

10.8%

       

14.6%

 


Six months ended June 30, 2014

                       

Net sales

 

$

831,396

   

$

220,980

   

$

128,283

   

$

83,044

   

$

149,890

   

$

   

$

1,413,593

 

Inter-segment sales

 

66,303

   

11,354

   

8,049

   

64

   

4,380

   

(90,150)

   

 

Total

 

$

897,699

   

$

232,334

   

$

136,332

   

$

83,108

   

$

154,270

   

$

(90,150)

   

$

1,413,593

 
                             

EBIT (1)

 

$

162,627

   

$

23,187

   

$

(158)

   

$

(4,373)

   

$

13,236

   

$

3,491

   

$

198,010

 

As a percent of total sales

 

18.1%

   

10.0%

   

(0.1%)

   

(5.3%)

   

8.6%

       

14.0%

 

Special items charge (gain) (3)

 

$

(68)

   

$

1,004

   

$

(117)

   

$

21,133

   

$

   

$

   

$

21,952

 

EBIT, as adjusted (4)

 

$

162,559

   

$

24,191

   

$

(275)

   

$

16,760

   

$

13,236

   

$

3,491

   

$

219,962

 

As a percent of total sales

 

18.1%

   

10.4%

   

(0.2%)

   

20.2%

   

8.6%

       

15.6%

 

 

 

(1)

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

 

(2)

Special items in the three and six months ended June 30, 2015 represent rationalization charges related to employee severance and other related costs. 

 

(3)

Special items in the three and six months ended June 30, 2014 include net charges primarily related to severance and other related costs from the consolidation of manufacturing operations partially offset by gains related to the sale of assets at rationalized operations and the impact of the Venezuelan remeasurement losses related to the adoption of a new foreign exchange mechanism.

 

(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 June 30th Change in Net Sales by Segment

             
       

Change in Net Sales due to:

   
   

Net Sales

2014

 

Volume

 

Acquisitions

 

Price

 

Foreign

Exchange

 

Net Sales

2015

Operating Segments

                       

North America Welding

 

$

429,490

   

$

(21,853)

   

$

14,250

   

$

1,457

   

$

(8,269)

   

$

415,075

 

Europe Welding

 

115,574

   

(3,343)

   

   

(582)

   

(20,746)

   

90,903

 

Asia Pacific Welding

 

66,997

   

(15,292)

   

   

(617)

   

(2,045)

   

49,043

 

South America Welding

 

39,051

   

(8,601)

   

   

15,696

   

(8,239)

   

37,907

 

The Harris Products Group

 

77,419

   

1,743

   

   

(3,981)

   

(3,369)

   

71,812

 

Consolidated

 

$

728,531

   

$

(47,346)

   

$

14,250

   

$

11,973

   

$

(42,668)

   

$

664,740

 

% Change

                       

North America Welding

     

(5.1%)

   

3.3%

   

0.3%

   

(1.9%)

   

(3.4%)

 

Europe Welding

     

(2.9%)

   

   

(0.5%)

   

(18.0%)

   

(21.3%)

 

Asia Pacific Welding

     

(22.8%)

   

   

(0.9%)

   

(3.1%)

   

(26.8%)

 

South America Welding

     

(22.0%)

   

   

40.2%

   

(21.1%)

   

(2.9%)

 

The Harris Products Group

     

2.3%

   

   

(5.1%)

   

(4.4%)

   

(7.2%)

 

Consolidated

     

(6.5%)

   

2.0%

   

1.6%

   

(5.9%)

   

(8.8%)

 
                         
                         

Six Months Ended June 30th Change in Net Sales by Segment

             
       

Change in Net Sales due to:

   
   

Net Sales

2014

 

Volume

 

Acquisitions

 

Price

 

Foreign

Exchange

 

Net Sales

2015

Operating Segments

                       

North America Welding

 

$

831,396

   

$

(20,926)

   

$

26,721

   

$

5,480

   

$

(14,608)

   

$

828,063

 

Europe Welding

 

220,980

   

(141)

   

   

(883)

   

(40,637)

   

179,319

 

Asia Pacific Welding

 

128,283

   

(24,395)

   

   

(1,286)

   

(4,309)

   

98,293

 

South America Welding

 

83,044

   

(13,294)

   

   

37,170

   

(31,583)

   

75,337

 

The Harris Products Group

 

149,890

   

6,217

   

   

(8,570)

   

(5,909)

   

141,628

 

Consolidated

 

$

1,413,593

   

$

(52,539)

   

$

26,721

   

$

31,911

   

$

(97,046)

   

$

1,322,640

 

% Change

                       

North America Welding

     

(2.5%)

   

3.2%

   

0.7%

   

(1.8%)

   

(0.4%)

 

Europe Welding

     

(0.1%)

   

   

(0.4%)

   

(18.4%)

   

(18.9%)

 

Asia Pacific Welding

     

(19.0%)

   

   

(1.0%)

   

(3.4%)

   

(23.4%)

 

South America Welding

     

(16.0%)

   

   

44.8%

   

(38.0%)

   

(9.3%)

 

The Harris Products Group

     

4.1%

   

   

(5.7%)

   

(3.9%)

   

(5.5%)

 

Consolidated

     

(3.7%)

   

1.9%

   

2.3%

   

(6.9%)

   

(6.4%)

 

 

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/lincoln-electric-reports-second-quarter-2015-results-300118815.html

SOURCE Lincoln Electric Holdings, Inc.

Amanda Butler, Director, Investor Relations , Tel: 216.383.2534, Email: Amanda_Butler@lincolnelectric.com