Third Quarter Highlights vs. Prior Year
- Operating income up 7% to $95 million, or 13.8% of sales, despite 1% lower sales
- Adjusted operating income up 11% to $101 million and up 150 bps to 14.7% of sales
- Cash flow from operations up 88% to $155 million
- Returned $60 million to shareholders through share repurchases and dividends
CLEVELAND, Oct. 31, 2013 (GLOBE NEWSWIRE) -- Lincoln Electric Holdings, Inc. (the "Company") (Nasdaq:LECO) today reported third quarter 2013 net income of $66.0 million, or $0.80 per diluted share, compared to net income of $64.8 million, or $0.77 per diluted share, in the comparable 2012 period. Adjusted net income was $71.1 million, or $0.86 per diluted share, compared to adjusted net income of $67.5 million, or $0.80 per diluted share, in the comparable 2012 period.
Sales were $691.9 million in the third quarter 2013 versus $697.6 million in the comparable 2012 period, a decrease of 0.8%. Operating income for the third quarter increased $6.5 million to $95.2 million, or 13.8% of sales, from $88.7 million, or 12.7% of sales, in the comparable 2012 period. Special items that impacted operating income in the third quarter 2013 included pre-tax charges of $6.3 million associated with rationalization and non-cash asset impairment charges.
Sales for the nine months ended September 30, 2013 were $2.1 billion versus $2.2 billion in the comparable 2012 period, a decrease of 1.4%. Operating income for the nine months ended September 30, 2013 increased $11.7 million to $288.1 million, or 13.5% of sales, from $276.4 million, or 12.7% of sales, in the comparable 2012 period.
Net income for the nine months ended September 30, 2013 was $205.5 million, or $2.47 per diluted share, compared with net income of $195.3 million, or $2.32 per diluted share, in 2012. Adjusted net income was $224.0 million, or $2.69 per diluted share, compared to adjusted net income of $199.9 million, or $2.37 per diluted share, in 2012. The effective tax rate for the nine months ended September 30, 2013 was 31.0% compared with 30.8% in 2012.
Christopher L. Mapes, President and Chief Executive Officer stated, "We delivered solid results in the quarter by focusing on initiatives that enhance profitability and shareholder returns. We continued to lower our cost base, reshape our platform and mix and invest in solutions that capitalize on high-growth opportunities. While we saw some stabilization late in the quarter, ongoing weak end market conditions keep us cautious in the near-term. As such, we remain focused on driving continued year-over-year expansion in profitability and returns while serving our customers with innovative solutions."
The Company's Board of Directors declared a quarterly cash dividend of $0.20 per share, which was paid on October 15, 2013 to holders of record on September 30, 2013. During the quarter, the Company returned $44.0 million to shareholders through the repurchase of 710,726 of the Company's common shares.
During the nine months ended September 30, 2013, the Company made voluntary contributions of $75.2 million to its U.S. pension plans and returned $113.6 million to shareholders through the repurchase of 1,954,372 of the Company's common shares.
Webcast Information
A conference call to discuss third quarter 2013 financial results will be webcast live today, Thursday, October 31, 2013, 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) 407-9205 (domestic) or (201) 689-8054 (international). A telephonic replay will be available starting at 12:00 p.m. Eastern Time today and will end on Thursday, November 14, 2013 at 11:59 p.m. Eastern Time. To listen to the replay, please dial (877) 660-6853 (domestic) or (201) 612-7415 (international) and use confirmation code 100563.
Financial results for the third quarter 2013 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 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.
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; currency exchange and interest rates; 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.
| Lincoln Electric Holdings, Inc. | ||||||
| Financial Highlights | ||||||
| (In thousands, except per share amounts) | ||||||
| (Unaudited) | ||||||
| Consolidated Statements of Income | ||||||
| Three months ended September 30, | Fav (Unfav) to Prior Year | |||||
| 2013 | % of Sales | 2012 | % of Sales | $ | % | |
| Net sales | $ 691,875 | 100.0% | $ 697,552 | 100.0% | $ (5,677) | (0.8%) |
| Cost of goods sold | 459,178 | 66.4% | 484,190 | 69.4% | 25,012 | 5.2% |
| Gross profit | 232,697 | 33.6% | 213,362 | 30.6% | 19,335 | 9.1% |
| Selling, general & administrative expenses | 131,217 | 19.0% | 121,602 | 17.4% | (9,615) | (7.9%) |
| Rationalization and asset impairment charges | 6,302 | 0.9% | 3,059 | 0.4% | (3,243) | (106.0%) |
| Operating income | 95,178 | 13.8% | 88,701 | 12.7% | 6,477 | 7.3% |
| Interest income | 536 | 0.1% | 916 | 0.1% | (380) | (41.5%) |
| Equity earnings in affiliates | 1,170 | 0.2% | 1,566 | 0.2% | (396) | (25.3%) |
| Other income | 1,514 | 0.2% | 746 | 0.1% | 768 | 102.9% |
| Interest expense | (558) | (0.1%) | (1,040) | (0.1%) | 482 | 46.3% |
| Income before income taxes | 97,840 | 14.1% | 90,889 | 13.0% | 6,951 | 7.6% |
| Income taxes | 33,588 | 4.9% | 26,153 | 3.7% | (7,435) | (28.4%) |
| Effective tax rate | 34.3% | 28.8% | (5.5%) | |||
| Net income including non-controlling interests | 64,252 | 9.3% | 64,736 | 9.3% | (484) | (0.7%) |
| Non-controlling interests in subsidiaries' loss | (1,792) | (0.3%) | (29) | — | (1,763) | (6,079.3%) |
| Net income | $ 66,044 | 9.5% | $ 64,765 | 9.3% | $ 1,279 | 2.0% |
| Basic earnings per share | $ 0.81 | $ 0.78 | $ 0.03 | 3.8% | ||
| Diluted earnings per share | $ 0.80 | $ 0.77 | $ 0.03 | 3.9% | ||
| Weighted average shares (basic) | 81,644 | 82,918 | ||||
| Weighted average shares (diluted) | 82,707 | 83,916 | ||||
| Nine months ended September 30, | Fav (Unfav) to Prior Year | |||||
| 2013 | % of Sales | 2012 | % of Sales | $ | % | |
| Net sales | $ 2,137,880 | 100.0% | $ 2,168,719 | 100.0% | $ (30,839) | (1.4%) |
| Cost of goods sold | 1,438,273 | 67.3% | 1,515,095 | 69.9% | 76,822 | 5.1% |
| Gross profit | 699,607 | 32.7% | 653,624 | 30.1% | 45,983 | 7.0% |
| Selling, general & administrative expenses | 403,323 | 18.9% | 372,931 | 17.2% | (30,392) | (8.1%) |
| Rationalization and asset impairment charges | 8,204 | 0.4% | 4,317 | 0.2% | (3,887) | (90.0%) |
| Operating income | 288,080 | 13.5% | 276,376 | 12.7% | 11,704 | 4.2% |
| Interest income | 2,452 | 0.1% | 2,648 | 0.1% | (196) | (7.4%) |
| Equity earnings in affiliates | 3,687 | 0.2% | 4,264 | 0.2% | (577) | (13.5%) |
| Other income | 3,141 | 0.1% | 2,015 | 0.1% | 1,126 | 55.9% |
| Interest expense | (2,307) | (0.1%) | (3,338) | (0.2%) | 1,031 | 30.9% |
| Income before income taxes | 295,053 | 13.8% | 281,965 | 13.0% | 13,088 | 4.6% |
| Income taxes | 91,431 | 4.3% | 86,715 | 4.0% | (4,716) | (5.4%) |
| Effective tax rate | 31.0% | 30.8% | (0.2%) | |||
| Net income including non-controlling interests | 203,622 | 9.5% | 195,250 | 9.0% | 8,372 | 4.3% |
| Non-controlling interests in subsidiaries' loss | (1,834) | (0.1%) | (77) | — | (1,757) | (2,281.8%) |
| Net income | $ 205,456 | 9.6% | $ 195,327 | 9.0% | $ 10,129 | 5.2% |
| Basic earnings per share | $ 2.50 | $ 2.35 | $ 0.15 | 6.4% | ||
| Diluted earnings per share | $ 2.47 | $ 2.32 | $ 0.15 | 6.5% | ||
| Weighted average shares (basic) | 82,260 | 83,233 | ||||
| Weighted average shares (diluted) | 83,314 | 84,326 | ||||
| Lincoln Electric Holdings, Inc. | ||||
| Financial Highlights | ||||
| (In thousands, except per share amounts) | ||||
| (Unaudited) | ||||
| Non-GAAP Financial Measures | ||||
| Three months ended September 30, | Nine months ended September 30, | |||
| 2013 | 2012 | 2013 | 2012 | |
| Operating income as reported | $ 95,178 | $ 88,701 | $ 288,080 | $ 276,376 |
| Special items (pre-tax): | ||||
| Rationalization and asset impairment charges (1) | 6,302 | 3,059 | 8,204 | 4,317 |
| Venezuelan currency devaluation (2) | — | — | 12,198 | — |
| Venezuelan statutory severance obligation (3) | — | — | — | 1,381 |
| Adjusted operating income (5) | $ 101,480 | $ 91,760 | $ 308,482 | $ 282,074 |
| Net income as reported | $ 66,044 | $ 64,765 | $ 205,456 | $ 195,327 |
| Special items (after-tax): | ||||
| Rationalization and asset impairment charges (1) | 6,098 | 2,704 | 7,350 | 3,619 |
| Venezuelan currency devaluation (2) | — | — | 12,198 | — |
| Venezuelan statutory severance obligation (3) | — | — | — | 906 |
| Special items attributable to non-controlling | (1,021) | — | (1,021) | — |
| interests (4) | ||||
| Adjusted net income (5) | $ 71,121 | $ 67,469 | $ 223,983 | $ 199,852 |
| Diluted earnings per share as reported | $ 0.80 | $ 0.77 | $ 2.47 | $ 2.32 |
| Special items | 0.06 | 0.03 | 0.22 | 0.05 |
| Adjusted diluted earnings per share (5) | $ 0.86 | $ 0.80 | $ 2.69 | $ 2.37 |
| Weighted average shares (diluted) | 82,707 | 83,916 | 83,314 | 84,326 |
| (1) The three and nine months ended September 30, 2013 include net charges associated with long-lived asset impairments and severance and other related costs from the consolidation of manufacturing operations partially offset by gains related to the sale of assets at rationalized operations. | ||||
| (2) Represents the impact of the devaluation of the Venezuelan currency. | ||||
| (3) Represents an unfavorable adjustment due to a change in Venezuelan labor law, which provides for increased employee severance obligations. | ||||
| (4) Represents the portion of the long-lived asset attributable to non-controlling interests. | ||||
| (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. | ||||
| Lincoln Electric Holdings, Inc. | ||
| Financial Highlights | ||
| (In thousands) | ||
| (Unaudited) | ||
| Balance Sheet Highlights | ||
| Selected Consolidated Balance Sheet Data | September 30, 2013 | December 31, 2012 |
| Cash and cash equivalents | $ 330,309 | $ 286,464 |
| Total current assets | 1,182,649 | 1,132,816 |
| Property, plant and equipment, net | 478,673 | 486,236 |
| Total assets | 2,119,641 | 2,089,863 |
| Total current liabilities | 481,195 | 440,267 |
| Short-term debt (1) | 14,892 | 18,676 |
| Long-term debt | 1,251 | 1,599 |
| Total equity | 1,428,819 | 1,358,321 |
| Net Operating Working Capital | September 30, 2013 | December 31, 2012 |
| Accounts receivable | $ 375,224 | $ 360,662 |
| Inventory | 369,863 | 364,890 |
| Trade accounts payable | 177,006 | 209,647 |
| Net operating working capital | $ 568,081 | $ 515,905 |
| Net operating working capital to net sales (2) | 20.5% | 18.8% |
| Invested Capital | September 30, 2013 | December 31, 2012 |
| Short-term debt (1) | $ 14,892 | $ 18,676 |
| Long-term debt | 1,251 | 1,599 |
| Total debt | 16,143 | 20,275 |
| Total equity | 1,428,819 | 1,358,321 |
| Invested capital | $ 1,444,962 | $ 1,378,596 |
| Total debt / invested capital | 1.1% | 1.5% |
| Return on invested capital (3) | 18.5% | 18.7% |
| (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) | ||
| Condensed Consolidated Statements of Cash Flows | ||
| Three months ended September 30, | ||
| 2013 | 2012 | |
| OPERATING ACTIVITIES: | ||
| Net income | $ 66,044 | $ 64,765 |
| Non-controlling interests in subsidiaries' loss | (1,792) | (29) |
| Net income including non-controlling interests | 64,252 | 64,736 |
| Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities: | ||
| Rationalization and asset impairment charges | 4,695 | 357 |
| Depreciation and amortization | 17,326 | 16,435 |
| Equity earnings in affiliates, net | (431) | (738) |
| Pension expense | 7,326 | 8,900 |
| Pension contributions and payments | (3,066) | (18,765) |
| Other non-cash items, net | 5,421 | (14,265) |
| Changes in operating assets and liabilities, net of effects from acquisitions: | ||
| Decrease in accounts receivable | 25,385 | 35,299 |
| Decrease in inventories | 2,419 | 13,870 |
| Decrease in trade accounts payable | (20,863) | (17,565) |
| Net change in other current assets and liabilities | 50,006 | 50,929 |
| Net change in other long-term assets and liabilities | 2,570 | (56,738) |
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 155,040 | 82,455 |
| INVESTING ACTIVITIES: | ||
| Capital expenditures | (28,643) | (13,060) |
| Acquisition of businesses, net of cash acquired | (260) | (3,516) |
| Proceeds from sale of property, plant and equipment | 204 | 200 |
| NET CASH USED BY INVESTING ACTIVITIES | (28,699) | (16,376) |
| FINANCING ACTIVITIES: | ||
| Net change in borrowings | 404 | (2,632) |
| Proceeds from exercise of stock options | 2,873 | 483 |
| Excess tax benefits from stock-based compensation | 1,508 | 140 |
| Purchase of shares for treasury | (43,964) | (20,017) |
| Cash dividends paid to shareholders | (16,407) | (14,147) |
| NET CASH USED BY FINANCING ACTIVITIES | (55,586) | (36,173) |
| Effect of exchange rate changes on Cash and cash equivalents | 3,165 | 2,806 |
| INCREASE IN CASH AND CASH EQUIVALENTS | 73,920 | 32,712 |
| Cash and cash equivalents at beginning of period | 256,389 | 307,963 |
| Cash and cash equivalents at end of period | $ 330,309 | $ 340,675 |
| Cash dividends paid per share | $ 0.20 | $ 0.17 |
| Lincoln Electric Holdings, Inc. | ||
| Financial Highlights | ||
| (In thousands, except per share amounts) | ||
| (Unaudited) | ||
| Condensed Consolidated Statements of Cash Flows | ||
| Nine months ended September 30, | ||
| 2013 | 2012 | |
| OPERATING ACTIVITIES: | ||
| Net income | $ 205,456 | $ 195,327 |
| Non-controlling interests in subsidiaries' loss | (1,834) | (77) |
| Net income including non-controlling interests | 203,622 | 195,250 |
| Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities: | ||
| Rationalization and asset impairment charges | 5,049 | 357 |
| Depreciation and amortization | 51,881 | 48,220 |
| Equity earnings in affiliates, net | (1,313) | (1,449) |
| Pension expense | 22,261 | 26,590 |
| Pension contributions and payments | (84,417) | (57,814) |
| Other non-cash items, net | 29,757 | 5,911 |
| Changes in operating assets and liabilities, net of effects from acquisitions: | ||
| (Increase) decrease in accounts receivable | (17,982) | 13,750 |
| Increase in inventories | (9,889) | (6,832) |
| Decrease in trade accounts payable | (32,703) | (1,182) |
| Net change in other current assets and liabilities | 75,627 | 73,413 |
| Net change in other long-term assets and liabilities | 198 | (52,873) |
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 242,091 | 243,341 |
| INVESTING ACTIVITIES: | ||
| Capital expenditures | (59,691) | (39,307) |
| Acquisition of businesses, net of cash acquired | (4,936) | (52,851) |
| Proceeds from sale of property, plant and equipment | 796 | 538 |
| Other investing activities | (4,217) | (1,541) |
| NET CASH USED BY INVESTING ACTIVITIES | (68,048) | (93,161) |
| FINANCING ACTIVITIES: | ||
| Net change in borrowings | (2,351) | (88,001) |
| Proceeds from exercise of stock options | 16,077 | 12,695 |
| Excess tax benefits from stock-based compensation | 6,973 | 5,594 |
| Purchase of shares for treasury | (113,641) | (60,155) |
| Cash dividends paid to shareholders | (32,987) | (42,510) |
| Other financing activities | (2,809) | — |
| NET CASH USED BY FINANCING ACTIVITIES | (128,738) | (172,377) |
| Effect of exchange rate changes on Cash and cash equivalents | (1,460) | 1,771 |
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 43,845 | (20,426) |
| Cash and cash equivalents at beginning of period | 286,464 | 361,101 |
| Cash and cash equivalents at end of period | $ 330,309 | $ 340,675 |
| Cash dividends paid per share | $ 0.40 | $ 0.51 |
| 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 | |||||||
| September 30, 2013 | |||||||
| Net sales | $ 404,113 | $ 98,522 | $ 63,834 | $ 51,715 | $ 73,691 | $ — | $ 691,875 |
| Inter-segment sales | 35,355 | 5,256 | 3,821 | 151 | 2,311 | (46,894) | — |
| Total | $ 439,468 | $ 103,778 | $ 67,655 | $ 51,866 | $ 76,002 | $ (46,894) | $ 691,875 |
| EBIT (1) | $ 75,242 | $ 6,286 | $ (5,703) | $ 15,942 | $ 6,917 | $ (822) | $ 97,862 |
| As a percent of total sales | 17.1% | 6.1% | (8.4%) | 30.7% | 9.1% | 14.1% | |
| Special items charge (2) | $ (17) | $ 1,595 | $ 4,724 | $ — | $ — | $ — | $ 6,302 |
| EBIT, as adjusted (4) | $ 75,225 | $ 7,881 | $ (979) | $ 15,942 | $ 6,917 | $ (822) | $ 104,164 |
| As a percent of total sales | 17.1% | 7.6% | (1.4%) | 30.7% | 9.1% | 15.1% | |
| Three months ended | |||||||
| September 30, 2012 | |||||||
| Net sales | $ 390,327 | $ 104,480 | $ 76,263 | $ 44,545 | $ 81,937 | $ — | $ 697,552 |
| Inter-segment sales | 28,186 | 3,261 | 2,748 | 27 | 1,869 | (36,091) | — |
| Total | $ 418,513 | $ 107,741 | $ 79,011 | $ 44,572 | $ 83,806 | $ (36,091) | $ 697,552 |
| EBIT (1) | $ 70,320 | $ 6,641 | $ 1,346 | $ 7,587 | $ 7,739 | $ (2,620) | $ 91,013 |
| As a percent of total sales | 16.8% | 6.2% | 1.7% | 17.0% | 9.2% | 13.0% | |
| Special items charge (3) | $ 477 | $ 1,874 | $ 708 | $ — | $ — | $ — | $ 3,059 |
| EBIT, as adjusted (4) | $ 70,797 | $ 8,515 | $ 2,054 | $ 7,587 | $ 7,739 | $ (2,620) | $ 94,072 |
| As a percent of total sales | 16.9% | 7.9% | 2.6% | 17.0% | 9.2% | 13.5% | |
| Nine months ended | |||||||
| September 30, 2013 | |||||||
| Net sales | $ 1,242,736 | $ 317,674 | $ 203,112 | $ 132,592 | $ 241,766 | $ — | $ 2,137,880 |
| Inter-segment sales | 99,869 | 13,865 | 12,579 | 222 | 7,209 | (133,744) | — |
| Total | $ 1,342,605 | $ 331,539 | $ 215,691 | $ 132,814 | $ 248,975 | $ (133,744) | $ 2,137,880 |
| EBIT (1) | $ 233,553 | $ 26,450 | $ (3,464) | $ 19,921 | $ 21,411 | $ (2,963) | $ 294,908 |
| As a percent of total sales | 17.4% | 8.0% | (1.6%) | 15.0% | 8.6% | 13.8% | |
| Special items charge (2) | $ 1,109 | $ 1,664 | $ 5,431 | $ 12,198 | $ — | $ — | $ 20,402 |
| EBIT, as adjusted (4) | $ 234,662 | $ 28,114 | $ 1,967 | $ 32,119 | $ 21,411 | $ (2,963) | $ 315,310 |
| As a percent of total sales | 17.5% | 8.5% | 0.9% | 24.2% | 8.6% | 14.7% | |
| Nine months ended | |||||||
| September 30, 2012 | |||||||
| Net sales | $ 1,187,879 | $ 344,720 | $ 254,259 | $ 121,552 | $ 260,309 | $ — | $ 2,168,719 |
| Inter-segment sales | 101,386 | 12,178 | 11,641 | 38 | 6,605 | (131,848) | — |
| Total | $ 1,289,265 | $ 356,898 | $ 265,900 | $ 121,590 | $ 266,914 | $ (131,848) | $ 2,168,719 |
| EBIT (1) | $ 216,318 | $ 29,851 | $ 7,344 | $ 12,091 | $ 23,933 | $ (6,882) | $ 282,655 |
| As a percent of total sales | 16.8% | 8.4% | 2.8% | 9.9% | 9.0% | 13.0% | |
| Special items charge (3) | $ 554 | $ 2,466 | $ 1,297 | $ 1,381 | $ — | $ — | $ 5,698 |
| EBIT, as adjusted (4) | $ 216,872 | $ 32,317 | $ 8,641 | $ 13,472 | $ 23,933 | $ (6,882) | $ 288,353 |
| As a percent of total sales | 16.8% | 9.1% | 3.2% | 11.1% | 9.0% | 13.3% | |
| (1) EBIT is defined as Operating income plus Equity earnings in affiliates and Other income. | |||||||
| (2) Special items in the three and nine months ended September 30, 2013 include net rationalization and asset impairment charges. The nine months ended September 30, 2013 special charges also include the impact of the devaluation of the Venezuelan currency. | |||||||
| (3) Special items in the three and nine months ended September 30, 2012 include net rationalization and asset impairment charges. The nine months ended September 30, 2012 special charges also include an unfavorable adjustment due to a change in Venezuelan labor law, which provides for increased employee severance obligations. | |||||||
| (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 September 30th Change in Net Sales by Segment | ||||||
| Change in Net Sales due to: | ||||||
| Net Sales | Foreign | Net Sales | ||||
| 2012 | Volume | Acquisitions | Price | Exchange | 2013 | |
| Operating Segments | ||||||
| North America Welding | $ 390,327 | $ (921) | $ 15,258 | $ 848 | $ (1,399) | $ 404,113 |
| Europe Welding | 104,480 | (8,613) | — | 265 | 2,390 | 98,522 |
| Asia Pacific Welding | 76,263 | (9,648) | — | (989) | (1,792) | 63,834 |
| South America Welding | 44,545 | 1,807 | — | 7,867 | (2,504) | 51,715 |
| The Harris Products Group | 81,937 | (20) | — | (7,606) | (620) | 73,691 |
| Consolidated | $ 697,552 | $ (17,395) | $ 15,258 | $ 385 | $ (3,925) | $ 691,875 |
| % Change | ||||||
| North America Welding | (0.2%) | 3.9% | 0.2% | (0.4%) | 3.5% | |
| Europe Welding | (8.2%) | — | 0.3% | 2.3% | (5.7%) | |
| Asia Pacific Welding | (12.7%) | — | (1.3%) | (2.3%) | (16.3%) | |
| South America Welding | 4.1% | — | 17.7% | (5.6%) | 16.1% | |
| The Harris Products Group | — | — | (9.3%) | (0.8%) | (10.1%) | |
| Consolidated | (2.5%) | 2.2% | 0.1% | (0.6%) | (0.8%) | |
| Nine Months Ended September 30th Change in Net Sales by Segment | ||||||
| Change in Net Sales due to: | ||||||
| Net Sales | Foreign | Net Sales | ||||
| 2012 | Volume | Acquisitions | Price | Exchange | 2013 | |
| Operating Segments | ||||||
| North America Welding | $ 1,187,879 | $ (28,842) | $ 78,472 | $ 7,478 | $ (2,251) | $ 1,242,736 |
| Europe Welding | 344,720 | (23,244) | — | (2,922) | (880) | 317,674 |
| Asia Pacific Welding | 254,259 | (44,970) | — | (3,973) | (2,204) | 203,112 |
| South America Welding | 121,552 | 1,546 | — | 15,864 | (6,370) | 132,592 |
| The Harris Products Group | 260,309 | (1,830) | — | (14,421) | (2,292) | 241,766 |
| Consolidated | $ 2,168,719 | $ (97,340) | $ 78,472 | $ 2,026 | $ (13,997) | $ 2,137,880 |
| % Change | ||||||
| North America Welding | (2.4%) | 6.6% | 0.6% | (0.2%) | 4.6% | |
| Europe Welding | (6.7%) | — | (0.8%) | (0.3%) | (7.8%) | |
| Asia Pacific Welding | (17.7%) | — | (1.6%) | (0.9%) | (20.1%) | |
| South America Welding | 1.3% | — | 13.1% | (5.2%) | 9.1% | |
| The Harris Products Group | (0.7%) | — | (5.5%) | (0.9%) | (7.1%) | |
| Consolidated | (4.5%) | 3.6% | 0.1% | (0.6%) | (1.4%) | |