LINCOLN ELECTRIC HOLDINGS, INC. CLEVELAND, Oct. 30, 2015 /PRNewswire/ --
Third Quarter 2015 Key Metric
Highlights
· Adjusted operating income margin
increased 40 basis points to 15.1%
· Reported results include $181
million of pre-tax special
charges, $127 million after-tax,
or $1.71 per diluted share
Lincoln Electric Holdings, Inc. (the "Company") (Nasdaq: LECO) today reported third quarter 2015 net losses of $60.5 million, or $0.82 per diluted share, which includes the impact of $126.7 million of after-tax special item charges, or $1.71 per diluted share. This compares with net income of $45.7 million, or earnings per share (EPS) of $0.57 in the comparable 2014 period. Excluding these items, third quarter 2015 Adjusted net income was $66.2 million, or Adjusted EPS of $0.89. Third quarter 2014 Adjusted net income was $74.9 million, or Adjusted EPS of $0.94.
Sales decreased $70.6 million to $645.2 million in the third quarter 2015 as favorable price and acquisitions were offset by lower volumes and unfavorable foreign currency translation. Operating losses for the third quarter 2015 were $84.0 million compared with earnings of $76.1 million, or 10.6% of sales, in the comparable 2014 period. Adjusted operating income was $97.1 million, or 15.1% of sales. This compares with $105.2 million, or 14.7% of sales in 2014.
Third quarter 2015 Adjusted operating income excludes the following pre-tax charges: a $136.3 million non-cash charge primarily related to a previously announced pension annuity contract purchase, a $26.5 million non-cash charge related to a Venezuelan currency remeasurement loss and $18.3 million ($6.1 million non-cash) of rationalization and asset impairment charges primarily related to our ongoing efforts to align our business to current market conditions.
Christopher L. Mapes, Chairman, President and Chief Executive Officer stated, "We improved profit margin performance on an adjusted basis in weakening market conditions and against difficult year-over-year comparisons. Further to the cost reductions initiated in the second quarter, we implemented additional measures that in aggregate now provide approximately $20 million to $25 million in annualized temporary cost savings and $10 million to $12 million in annualized structural savings. Looking ahead, we will continue to execute on our '2020 Vision and Strategy' and manage margin performance through aggressive cost reduction actions in a slowing demand environment. We expect these actions will ensure the organization is well positioned to capitalize on profitable growth when conditions improve."
Dividend and Share Repurchases
The Company's Board of Directors declared a 10.3% increase in the quarterly cash dividend, from $0.29 per share to $0.32, or $1.28 per share on an annual basis. The declared quarterly cash dividend of $0.32 per share is payable January 15, 2016 to shareholders of record as of December 31, 2015.
During the quarter, the Company returned $161.0 million to shareholders through dividends and the repurchase of 2.4 million of the Company's common shares. Through the first nine months of 2015, the Company returned $363.7 million to shareholders through dividends and the repurchase of 4.7 million of the Company's common shares. The Company is maintaining its 2015 share repurchase target of $400 million of the Company's common shares.
Venezuela Update
The Company is now utilizing the SIMADI rate as of September 30, 2015 for remeasurement purposes, as it believes that this rate more appropriately approximates the rates used to transact business in its Venezuelan operations. Fourth quarter 2015 Venezuela results will be presented using the SIMADI rate. The SIMADI rate is an auction-based exchange rate, which was 199.4 bolivars to the U.S. dollar as of September 30, 2015, compared to the SICAD I rate exchange rate, which was 13.5 bolivars to the U.S. dollar on that date.
As a result of this change, the Company incurred a pre-tax and after-tax charge of $26.5 million in the third quarter of 2015. This represents a lower of cost or market inventory adjustment of $22.2 million recorded in costs of goods sold and a remeasurement loss of $4.3 million recorded in selling general and administrative expenses. Third quarter 2015 Venezuela financial performance included Net sales of $34.7 million and Adjusted net income of $0.2 million. Third quarter 2014 Venezuela financial performance included Net sales of $12.8 million and Adjusted net loss of $1.2 million.
The results of our Venezuelan operations could be negatively impacted by additional currency remeasurements or devaluations, increased costs due to changes in raw material sourcing, the potential inability to obtain required production materials resulting in interruptions to operations or other actions by the Venezuelan government that could limit or cause cessation of operations.
Nine Months 2015 Summary
Net income for the nine months ended September 30, 2015 was $78.8 million, or EPS of $1.04, which includes the impact of $127.6 million of after-tax charges, or $1.68 per diluted share. This compares with net income of $179.5 million, or EPS of $2.22, in 2014. Adjusted net income for the nine months ended September 30, 2015 was $206.4 million, or Adjusted EPS of $2.72, compared with Adjusted net income of $230.5 million, or Adjusted EPS of $2.86, in 2014.
Sales decreased 7.6% to $2.0 billion in the nine months ended September 30, 2015 as favorable price and acquisitions were offset by lower volumes and unfavorable foreign currency translation. Operating income for the nine months ended September 30, 2015 decreased to $103.3 million, or 5.2% of sales, compared with $268.8 million, or 12.6% of sales, in the comparable 2014 period. Adjusted operating income was $285.6 million or 14.5% of sales, compared with $319.9 million, or 15.0% of sales in 2014 which includes a $3.9 million gain, $2.5 million after-tax or $0.03 per diluted share, from an insurance settlement.
Webcast Information
A conference call to discuss third quarter 2015 financial results will be webcast live today, October 30, 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 53335548. Telephone participants are asked to dial in 10-15 minutes prior to the start of the conference call.
Financial results for the third 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 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; 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 September 30, Fav (Unfav) to Prior Year
-------------------------------- -------------------------
2015 % of Sales 2014 % of Sales $ %
---- ---------- ---- ---------- --- ---
Net sales $645,166 100.0% $715,777 100.0% $(70,611) (9.9%)
Cost of goods sold 446,272 69.2% 474,168 66.2% 27,896 5.9%
------- ------- ------
Gross profit 198,894 30.8% 241,609 33.8% (42,715) (17.7%)
Selling, general & administrative expenses 128,299 19.9% 136,424 19.1% 8,125 6.0%
Rationalization and asset impairment charges 18,285 2.8% 29,068 4.1% 10,783 37.1%
Pension settlement charges 136,331 21.1% - - (136,331) (100.0%)
------- --- --------
Operating income (loss) (84,021) (13.0%) 76,117 10.6% (160,138) (210.4%)
Interest income 692 0.1% 627 0.1% 65 10.4%
Equity earnings in affiliates 310 - 1,172 0.2% (862) (73.5%)
Other income 296 - 1,043 0.1% (747) (71.6%)
Interest expense (5,803) (0.9%) (1,174) (0.2%) (4,629) (394.3%)
------ ------ ------
Income (loss) before income taxes (88,526) (13.7%) 77,785 10.9% (166,311) (213.8%)
Income taxes (28,045) (4.3%) 32,953 4.6% 60,998 185.1%
------- ------ ------
Effective tax rate 31.7% 42.4% 10.7%
Net income (loss) including non-controlling interests (60,481) (9.4%) 44,832 6.3% (105,313) (234.9%)
Non-controlling interests in subsidiaries' loss (15) - (857) (0.1%) 842 98.2%
Net income (loss) $(60,466) (9.4%) $45,689 6.4% $(106,155) (232.3%)
======== ======= =========
Basic earnings (loss) per share $(0.82) $0.58 $(1.40) (241.4%)
Diluted earnings (loss) per share $(0.82) $0.57 $(1.39) (243.9%)
Weighted average shares (basic) 73,754 78,817
Weighted average shares (diluted) 73,754 79,725
Nine months ended September 30, Fav (Unfav) to Prior Year
------------------------------- -------------------------
2015 % of Sales 2014 % of Sales $ %
---- ---------- ---- ---------- --- ---
Net sales $1,967,806 100.0% $2,129,370 100.0% $(161,564) (7.6%)
Cost of goods sold 1,322,741 67.2% 1,411,158 66.3% 88,417 6.3%
--------- --------- ------
Gross profit 645,065 32.8% 718,212 33.7% (73,147) (10.2%)
Selling, general & administrative expenses 385,945 19.6% 419,495 19.7% 33,550 8.0%
Rationalization and asset impairment charges 19,524 1.0% 29,887 1.4% 10,363 (34.7%)
Pension Settlement Charges 136,331 6.9% - - (136,331) (100.0%)
------- ---
Operating income (loss) 103,265 5.2% 268,830 12.6% (165,565) (61.6%)
Interest income 2,023 0.1% 2,465 0.1% (442) (17.9%)
Equity earnings in affiliates 2,138 0.1% 4,308 0.2% (2,170) (50.4%)
Other income 3,223 0.2% 3,204 0.2% 19 0.6%
Interest expense (12,034) (0.6%) (3,730) (0.2%) (8,304) (222.6%)
------- ------ ------
Income (loss) before income taxes 98,615 5.0% 275,077 12.9% (176,462) (64.2%)
Income taxes 19,902 1.0% 96,532 4.5% 76,630 79.4%
------ ------ ------
Effective tax rate 20.2% 35.1% 14.9%
Net income (loss) including non-controlling interests 78,713 4.0% 178,545 8.4% (99,832) (55.9%)
Non-controlling interests in subsidiaries' loss (73) - (929) - 856 92.1%
--- ----
Net income (loss) $78,786 4.0% $179,474 8.4% $(100,688) (56.1%)
======= ======== =========
Basic earnings (loss) per share $1.05 $2.25 $(1.20) (53.3%)
Diluted earnings (loss) per share $1.04 $2.22 $(1.18) (53.2%)
Weighted average shares (basic) 74,999 79,779
Weighted average shares (diluted) 75,764 80,702
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,
-------------------------------- -------------------------------
2015 2014 2015 2014
---- ---- ---- ----
Operating income (loss) as reported (84,021) 76,117 103,265 268,830
Special items (pre-tax):
Rationalization and asset impairment charges (1) 18,285 29,068 19,524 29,887
Venezuela foreign exchange losses (2) 26,506 - 26,506 21,133
Pension settlement charges (3) 136,331 - 136,331 -
Adjusted operating income (loss) (5) $97,101 $105,185 $285,626 $319,850
======= ======== ======== ========
Net income (loss) as reported $(60,466) $45,689 $78,786 $179,474
Special items (after-tax):
Rationalization and asset impairment charges (1) 16,832 30,056 17,732 30,747
Venezuela foreign exchange losses (2) 26,506 - 26,506 21,133
Pension settlement charges (3) 83,341 - 83,341 -
Special items attributable to non-controlling - (805) - (805)
Interests
Adjusted net income (loss) (5) $66,213 $74,940 $206,365 $230,549
======= ======= ======== ========
Diluted earnings (loss) per share as reported $(0.82) $0.57 $1.04 $2.22
Special items (4) 1.71 0.37 1.68 0.64
Adjusted diluted earnings per share (4)(5) $0.89 $0.94 $2.72 $2.86
===== ===== ===== =====
Weighted average shares (diluted) (4) 74,460 79,725 75,764 80,702
(1) The three and nine months ended
September 30, 2015 and 2014 include
net charges primarily related to
severance and other related costs
and long-lived asset impairments.
The three and nine months ended
September 30, 2015 also include a
goodwill asset impairment charge.
Rationalization charges in 2014 are
partially offset by gains related to
the sale of assets at rationalized
operations.
(2) The three and nine months ended
September 30, 2015 and nine months
ended September 2014 represent the
impacts of Venezuelan remeasurement
losses related to the adoption of
new foreign exchange mechanisms.
(3) The three and nine months ended
September 30, 2015 include pension
settlement charges primarily related
to the purchase of a group annuity
contract.
(4) Adjusted diluted earnings per share
for the three months ended September
30, 2015 include the dilutive effect
of common share equivalents.
Reported diluted loss per share
excludes the effect of common stock
equivalents because their inclusion
would be anti-dilutive.
(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, 2015 December 31, 2014
------------------ -----------------
Cash and cash equivalents $364,345 $278,379
Total current assets 1,068,858 1,096,202
Property, plant and equipment, net 421,940 438,746
Total assets 1,928,091 1,939,215
Total current liabilities 437,429 492,395
Short-term debt (1) 2,453 68,166
Long-term debt 350,899 2,488
Total equity 1,011,969 1,285,781
Net Operating Working Capital September 30, 2015 December 31, 2014
------------------ -----------------
Accounts receivable $310,824 $337,664
Inventory 308,625 341,057
Trade accounts payable 166,858 209,745
------- -------
Net operating working capital $452,591 $468,976
======== ========
Net operating working capital to net sales (2) 17.5% 17.1%
Invested Capital September 30, 2015 December 31, 2014
------------------ -----------------
Short-term debt (1) $2,453 $68,166
Long-term debt 350,899 2,488
------- -----
Total debt 353,352 70,654
Total equity 1,011,969 1,285,781
--------- ---------
Invested capital $1,365,321 $1,356,435
========== ==========
Total debt / invested capital 25.9% 5.2%
Return on invested capital (3) 12.0% 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 September 30,
--------------------------------
2015 2014
---- ----
OPERATING ACTIVITIES:
Net income (loss) $(60,466) $45,689
Non-controlling interests in subsidiaries' loss (15) (857)
--- ----
Net income (loss) including non-controlling interests (60,481) 44,832
Adjustments to reconcile Net income (loss) including non-controlling interests to Net cash provided by operating activities:
Rationalization and asset impairment charges 6,090 28,588
Depreciation and amortization 16,179 17,117
Equity (earnings) loss in affiliates, net 236 (404)
Pension expense and settlement charges 141,244 4,158
Pension contributions and payments (4,416) (10,479)
Other non-cash items, net (46,517) 9,382
Changes in operating assets and liabilities, net of effects from acquisitions:
Decrease in accounts receivable 28,343 20,953
Decrease in inventories 26,284 6,302
(Decrease) increase in trade accounts payable (3,412) 3,915
Net change in other current assets and liabilities 3,197 25,919
Net change in other long-term assets and liabilities (1,381) (835)
------ ----
NET CASH PROVIDED BY OPERATING ACTIVITIES 105,366 149,448
INVESTING ACTIVITIES:
Capital expenditures (10,970) (15,483)
Acquisition of businesses, net of cash acquired (33,882) -
Proceeds from sale of property, plant and equipment 752 11,537
Other investing activities (2,103) -
------ ---
NET CASH USED BY INVESTING ACTIVITIES (46,203) (3,946)
FINANCING ACTIVITIES:
Net change in borrowings 170,371 81,257
Proceeds from exercise of stock options 564 1,935
Excess tax benefits from stock-based compensation 194 883
Purchase of shares for treasury (139,337) (130,070)
Cash dividends paid to shareholders (21,694) (18,276)
Other financing activities (44) -
--- ---
NET CASH PROVIDED BY (USED BY) FINANCING ACTIVITIES 10,054 (64,271)
Effect of exchange rate changes on Cash and cash equivalents (17,609) (5,993)
------- ------
INCREASE IN CASH AND CASH EQUIVALENTS 51,608 75,238
Cash and cash equivalents at beginning of period 312,737 204,285
-------
Cash and cash equivalents at end of period $364,345 $279,523
======== ========
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
Nine months ended September 30,
-------------------------------
2015 2014
---- ----
OPERATING ACTIVITIES:
Net income $78,786 $179,474
Non-controlling interests in subsidiaries'
loss (73) (929)
--- ----
Net income including non-controlling
interests 78,713 178,545
Adjustments to reconcile Net income
including non-controlling interests to Net
cash
provided by operating activities:
Rationalization and asset impairment charges 6,120 29,447
Depreciation and amortization 47,897 53,017
Equity earnings in affiliates, net (252) (1,901)
Pension expense and settlement charges 151,848 9,634
Pension contributions and payments (52,121) (34,643)
Other non-cash items, net (52,307) 30,041
Changes in operating assets and liabilities,
net of effects from acquisitions:
Decrease (increase) in accounts receivable 14,661 (22,388)
Decrease (increase) in inventories 27,824 (11,153)
Decrease in trade accounts payable (34,629) (11,534)
Net change in other current assets and
liabilities 47,032 53,299
Net change in other long-term assets and
liabilities 650 (4,311)
--- ------
NET CASH PROVIDED BY OPERATING ACTIVITIES 235,436 268,053
INVESTING ACTIVITIES:
Capital expenditures (40,187) (55,430)
Acquisition of businesses, net of cash
acquired (33,882) (892)
Proceeds from sale of property, plant and
equipment 2,173 17,046
Other investing activities (79) 778
NET CASH USED BY INVESTING ACTIVITIES (71,975) (38,498)
FINANCING ACTIVITIES:
Net change in borrowings 314,420 71,114
Proceeds from exercise of stock options 4,600 5,945
Excess tax benefits from stock-based
compensation 1,487 3,361
Purchase of shares for treasury (297,804) (249,403)
Cash dividends paid to shareholders (65,942) (55,395)
Other financing activities (8,040) (2,330)
NET CASH USED BY FINANCING ACTIVITIES (51,279) (226,708)
Effect of exchange rate changes on Cash and
cash equivalents (26,216) (23,149)
------- -------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 85,966 (20,302)
Cash and cash equivalents at beginning of
period 278,379 299,825
Cash and cash equivalents at end of period $364,345 $279,523
======== ========
Cash dividends paid per share $0.87 $0.69
Lincoln Electric Holdings, Inc.
Segment Highlights
(In thousands)
(Unaudited)
North Europe Asia Pacific South The Harris Corporate / Consolidated
America Welding Welding America Products Eliminations
Welding Welding Group
------- ------- -----
Three months ended September 30, 2015
Net sales $408,416 $80,596 $45,505 $47,727 $62,922 $ - $645,166
Inter-segment sales 28,055 4,631 2,794 36 2,307 (37,823) -
Total $436,471 $85,227 $48,299 $47,763 $65,229 $(37,823) $645,166
======== ======= ======= ======= ======= ======== ========
EBIT (1) $(69,661) $8,069 $(2,938) $(24,661) $6,422 $(646) $(83,415)
As a percent of total sales (16.0%) 9.5% (6.1%) (51.6%) 9.8% (12.9%)
Special items charge (gain) (2) $149,404 $268 $4,944 $26,506 $ - $ - $181,122
EBIT, as adjusted (4) $79,743 $8,337 $2,006 $1,845 $6,422 $(646) $97,707
As a percent of total sales 18.3% 9.8% 4.2% 3.9% 9.8% 15.1%
Three months ended September 30, 2014
Net sales $439,621 $107,507 $57,404 $32,862 $78,383 $ - $715,777
Inter-segment sales 30,365 4,533 3,595 9 2,009 (40,511) -
Total $469,986 $112,040 $60,999 $32,871 $80,392 $(40,511) $715,777
======== ======== ======= ======= ======= ======== ========
EBIT (1) $84,450 $15,302 $(28,871) $(1,172) $8,947 $(324) $78,332
As a percent of total sales 18.0% 13.7% (47.3%) (3.6%) 11.1% 10.9%
Special items charge (gain) (3) $ - $(81) $28,567 $582 $ - $ - $29,068
EBIT, as adjusted (4) $84,450 $15,221 $(304) $(590) $8,947 $(324) $107,400
As a percent of total sales 18.0% 13.6% (0.5%) (1.8%) 11.1% 15.0%
Nine months ended September 30, 2015
Net sales $1,236,479 $259,915 $143,798 $123,064 $204,550 $ - $1,967,806
Inter-segment sales 79,797 12,687 9,028 154 7,034 (108,700) -
Total $1,316,276 $272,602 $152,826 $123,218 $211,584 $(108,700) $1,967,806
========== ======== ======== ======== ======== ========= ==========
EBIT (1) $79,017 $25,059 $2,434 $(20,133) $22,221 $28 $108,626
As a percent of total sales 6.0% 9.2% 1.6% (16.3%) 10.5% 5.5%
Special items charge (gain) (2) $149,404 $1,507 $4,944 $26,506 $ - $ - $182,361
EBIT, as adjusted (4) $228,421 $26,566 $7,378 $6,373 $22,221 $28 $290,987
As a percent of total sales 17.4% 9.7% 4.8% 5.2% 10.5% 14.8%
Nine months ended September 30, 2014
Net sales $1,271,017 $328,487 $185,687 $115,906 $228,273 $ - $2,129,370
Inter-segment sales 96,668 15,887 11,644 73 6,389 (130,661) -
Total $1,367,685 $344,374 $197,331 $115,979 $234,662 $(130,661) $2,129,370
========== ======== ======== ======== ======== ========= ==========
EBIT (1) $247,077 $38,489 $(29,029) $(5,545) $22,183 $3,167 $276,342
As a percent of total sales 18.1% 11.2% (14.7%) (4.8%) 9.5% 13.0%
Special items charge (gain) (3) $(68) $923 $28,450 $21,715 $ - $ - $51,020
EBIT, as adjusted (4) $247,009 $39,412 $(579) $16,170 $22,183 $3,167 $327,362
As a percent of total sales 18.1% 11.4% (0.3%) 13.9% 9.5% 15.4%
(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, 2015
represent rationalization charges
related to employee severance and
other related costs, charges related
to pension settlements, charges
related to the impairment of long-
lived assets and goodwill and
charges relating to a Venezuelan
remeasurement loss related to the
adoption of a new foreign exchange
mechanism.
(3) Special items in the three and nine
months ended September 30, 2014
include non-cash asset impairment
charges partially offset by net
rationalization gains including a
gain on the sale of real estate.
Special items in the nine months
ended September 30, 2014 also
include the impact of the Venezuelan
remeasurement losses related to the
adoption of a new foreign exchange
mechanism in the first quarter.
(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 Volume Acquisitions Price Foreign Net Sales
2014 Exchange 2015
---- -------- ----
Operating Segments
North America Welding $439,621 $(44,838) $19,637 $4,157 $(10,161) $408,416
Europe Welding 107,507 (10,268) - (874) (15,769) 80,596
Asia Pacific Welding 57,404 (9,575) 1,801 (570) (3,555) 45,505
South America Welding 32,862 (2,057) - 26,140 (9,218) 47,727
The Harris Products Group 78,383 (6,563) - (5,418) (3,480) 62,922
------ ------ --- ------ ------
Consolidated $715,777 $(73,301) $21,438 $23,435 $(42,183) $645,166
======== ======== ======= ======= ======== ========
% Change
North America Welding (10.2%) 4.5% 0.9% (2.3%) (7.1%)
Europe Welding (9.6%) - (0.8%) (14.7%) (25.0%)
Asia Pacific Welding (16.7%) 3.1% (1.0%) (6.2%) (20.7%)
South America Welding (6.3%) - 79.5% (28.1%) 45.2%
The Harris Products Group (8.4%) - (6.9%) (4.4%) (19.7%)
Consolidated (10.2%) 3.0% 3.3% (5.9%) (9.9%)
Nine Months Ended September 30th Change in Net Sales by Segment
Change in Net Sales due to:
---------------------------
Net Sales Volume Acquisitions Price Foreign Net Sales
2014 Exchange 2015
---- -------- ----
Operating Segments
North America Welding $1,271,017 $(65,764) $46,358 $9,637 $(24,769) $1,236,479
Europe Welding 328,487 (10,409) - (1,757) (56,406) 259,915
Asia Pacific Welding 185,687 (33,970) 1,801 (1,856) (7,864) 143,798
South America Welding 115,906 (15,351) - 63,310 (40,801) 123,064
The Harris Products Group 228,273 (346) - (13,988) (9,389) 204,550
------- ---- --- ------- ------
Consolidated $2,129,370 $(125,840) $48,159 $55,346 $(139,229) $1,967,806
========== ========= ======= ======= ========= ==========
% Change
North America Welding (5.2%) 3.6% 0.8% (1.9%) (2.7%)
Europe Welding (3.2%) - (0.5%) (17.2%) (20.9%)
Asia Pacific Welding (18.3%) 1.0% (1.0%) (4.2%) (22.6%)
South America Welding (13.2%) - 54.6% (35.2%) 6.2%
The Harris Products Group (0.2%) - (6.1%) (4.1%) (10.4%)
Consolidated (5.9%) 2.3% 2.6% (6.5%) (7.6%)
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/lincoln-electric-reports-third-quarter-2015-results-300169415.html
SOURCE Lincoln Electric Holdings, Inc.
