CLEVELAND, Feb. 18, 2011 /PRNewswire/ --
Fourth Quarter 2010 Highlights
- Sales were $564.3 million, an
increase of 22.0% from the Fourth Quarter 2009
- Operating income increased 34.3% to $52.3 million from $39.0
million in the Fourth Quarter 2009
- Excluding special items, adjusted operating income increased
26.3% to $54.5 million from
$43.2 million in the Fourth Quarter
2009
- Net income increased 70.5% to $41.5
million, or $0.98 per diluted
share, from $24.3 million, or
$0.57 per diluted share, in the
Fourth Quarter 2009
- Excluding special items, adjusted net income increased 38.2% to
$38.3 million, or $0.90 per diluted share, from $27.7 million, or $0.65 per diluted share, in the Fourth Quarter
2009
Lincoln Electric Holdings, Inc. (the "Company") (Nasdaq: LECO)
today reported fourth quarter 2010 net income of $41.5 million, or $0.98 per diluted share. Sales were
$564.3 million in the fourth quarter
2010 versus $462.4 million in the
comparable 2009 period, an increase of 22.0%. Operating
income for the fourth quarter increased $13.4 million to $52.3 million, or 9.3% of sales,
from $39.0 million in the comparable
2009 period. Adjusted operating income in the quarter was
$54.5 million, or 9.7% of sales.
Net income for the fourth quarter 2010 was $41.5 million, or $0.98 per diluted share, compared with net income
of $24.3 million, or $0.57 per diluted share, in the fourth quarter
2009. Adjusted net income was $38.3
million, or $0.90 per diluted
share, compared with $27.7 million,
or $0.65 per diluted share, in the
fourth quarter 2009. The effective tax rate for the fourth
quarter 2010 was 20.1%, or 29.1% as adjusted, compared with 40.1%
in 2009.
"We are pleased with our operating results for the fourth
quarter and full year 2010. Our year over year sales
continued to be strong and provides good momentum as we focus our
attention to 2011," said John M.
Stropki, Chairman and Chief Executive Officer.
"Current demand levels are positive and we are seeing
improvement in most market segments and geographic regions.
Our focus on new products, market share gains and
productivity provides good upside for leverage as the global
recovery continues into 2011. Our strong financial position
and dedicated workforce continue to provide the flexibility and
focus to execute our long-term strategic objectives to the benefit
of our customers, shareholders and employees."
Net cash provided by operating activities was $53.3 million in the fourth quarter compared with
$19.0 million for the comparable
period in 2009.
Sales for 2010 were $2.1 billion
versus $1.7 billion in 2009, an
increase of 19.7%. Operating income for 2010 increased
$93.2 million to $186.4 million, or
9.0% of sales, from $93.2 million in
2009. Adjusted operating income in 2010 was $189.2 million, or 9.1% of sales.
Net income for 2010 was $130.2
million, or $3.06 per diluted
share, compared with net income of $48.6
million, or $1.14 per diluted
share, for 2009. Adjusted net income was $129.6 million, or $3.04 per diluted share, compared with
$73.1 million, or $1.71 per diluted share, for 2009. The
effective tax rate for 2010 was 29.3%, or 31.6% as adjusted,
compared with 43.7% in 2009.
Net cash provided by operating activities was $157.0 million in 2010 compared with $250.4 million in 2009. The Company
returned $87.1 million to
shareholders through the payment of $47.4
million in dividends and the repurchase of $39.7 million of the Company's shares for
treasury during 2010.
The Company's Board of Directors declared a quarterly cash
dividend of $0.31 per share, which
was paid on January 14, 2011 to
holders of record as of December 31,
2010.
Financial results for the fourth quarter 2010 can also be
obtained at http://www.lincolnelectric.com/InvestorNews.
A conference call to discuss the fourth quarter 2010 financial
results is scheduled for today, Friday,
February 18, 2011, 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 merely 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 oxyfuel cutting equipment and has a leading
global position in the brazing and soldering alloys market.
Headquartered in Cleveland,
Ohio, Lincoln has 40 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, 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.
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 international terrorism and hostilities
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,
|
|
Fav (Unfav)
to Prior Year
|
|
|
2010
|
|
% of
Sales
|
|
2009
|
|
% of
Sales
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
564,292
|
|
100.0%
|
|
$
462,449
|
|
100.0%
|
|
$ 101,843
|
|
22.0%
|
|
Cost of goods sold
|
416,460
|
|
73.8%
|
|
327,951
|
|
70.9%
|
|
(88,509)
|
|
(27.0%)
|
|
Gross profit
|
147,832
|
|
26.2%
|
|
134,498
|
|
29.1%
|
|
13,334
|
|
9.9%
|
|
Selling, general &
administrative expenses
|
93,321
|
|
16.5%
|
|
91,347
|
|
19.8%
|
|
(1,974)
|
|
(2.2%)
|
|
Rationalization and asset
impairment charges
|
2,175
|
|
0.4%
|
|
4,177
|
|
0.9%
|
|
2,002
|
|
47.9%
|
|
Operating income
|
52,336
|
|
9.3%
|
|
38,974
|
|
8.4%
|
|
13,362
|
|
34.3%
|
|
Interest income
|
600
|
|
0.1%
|
|
682
|
|
0.1%
|
|
(82)
|
|
(12.0%)
|
|
Equity earnings in
affiliates
|
487
|
|
0.1%
|
|
1,098
|
|
0.2%
|
|
(611)
|
|
(55.6%)
|
|
Other income
|
493
|
|
0.1%
|
|
1,248
|
|
0.3%
|
|
(755)
|
|
(60.5%)
|
|
Interest expense
|
(1,940)
|
|
(0.3%)
|
|
(1,974)
|
|
(0.4%)
|
|
34
|
|
1.7%
|
|
Income before income
taxes
|
51,976
|
|
9.2%
|
|
40,028
|
|
8.7%
|
|
11,948
|
|
29.8%
|
|
Income taxes
|
10,467
|
|
1.9%
|
|
16,050
|
|
3.5%
|
|
5,583
|
|
34.8%
|
|
Effective tax rate
|
20.1%
|
|
|
|
40.1%
|
|
|
|
20.0%
|
|
|
|
Net income including
noncontrolling interests
|
41,509
|
|
7.4%
|
|
23,978
|
|
5.2%
|
|
17,531
|
|
73.1%
|
|
Noncontrolling interests in
subsidiaries' earnings (loss)
|
6
|
|
-
|
|
(367)
|
|
(0.1%)
|
|
(373)
|
|
(101.6%)
|
|
Net income
|
$
41,503
|
|
7.4%
|
|
$
24,345
|
|
5.3%
|
|
$ 17,158
|
|
70.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
$
0.99
|
|
|
|
$
0.57
|
|
|
|
$
0.42
|
|
73.7%
|
|
Diluted earnings per
share
|
$
0.98
|
|
|
|
$
0.57
|
|
|
|
$
0.41
|
|
71.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
(basic)
|
41,969
|
|
|
|
42,408
|
|
|
|
|
|
|
|
Weighted average shares
(diluted)
|
42,455
|
|
|
|
42,730
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve
Months Ended December 31,
|
|
Fav (Unfav)
to Prior Year
|
|
|
2010
|
|
% of
Sales
|
|
2009
|
|
% of
Sales
|
|
$
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$ 2,070,172
|
|
100.0%
|
|
$ 1,729,285
|
|
100.0%
|
|
$ 340,887
|
|
19.7%
|
|
Cost of goods sold
|
1,506,353
|
|
72.8%
|
|
1,273,017
|
|
73.6%
|
|
(233,336)
|
|
(18.3%)
|
|
Gross profit
|
563,819
|
|
27.2%
|
|
456,268
|
|
26.4%
|
|
107,551
|
|
23.6%
|
|
Selling, general &
administrative expenses
|
377,773
|
|
18.2%
|
|
333,138
|
|
19.3%
|
|
(44,635)
|
|
(13.4%)
|
|
Rationalization and asset
impairment (gains) charges
|
(384)
|
|
-
|
|
29,897
|
|
1.7%
|
|
30,281
|
|
101.3%
|
|
Operating income
|
186,430
|
|
9.0%
|
|
93,233
|
|
5.4%
|
|
93,197
|
|
100.0%
|
|
Interest income
|
2,381
|
|
0.1%
|
|
3,462
|
|
0.2%
|
|
(1,081)
|
|
(31.2%)
|
|
Equity earnings (loss) in
affiliates
|
3,171
|
|
0.2%
|
|
(5,025)
|
|
(0.3%)
|
|
8,196
|
|
163.1%
|
|
Other income
|
1,817
|
|
0.1%
|
|
3,589
|
|
0.2%
|
|
(1,772)
|
|
(49.4%)
|
|
Interest expense
|
(6,691)
|
|
(0.3%)
|
|
(8,521)
|
|
(0.5%)
|
|
1,830
|
|
21.5%
|
|
Income before income
taxes
|
187,108
|
|
9.0%
|
|
86,738
|
|
5.0%
|
|
100,370
|
|
115.7%
|
|
Income taxes
|
54,898
|
|
2.7%
|
|
37,905
|
|
2.2%
|
|
(16,993)
|
|
(44.8%)
|
|
Effective tax rate
|
29.3%
|
|
|
|
43.7%
|
|
|
|
14.4%
|
|
|
|
Net income including
noncontrolling interests
|
132,210
|
|
6.4%
|
|
48,833
|
|
2.8%
|
|
83,377
|
|
170.7%
|
|
Noncontrolling interests in
subsidiaries' earnings
|
1,966
|
|
0.1%
|
|
257
|
|
-
|
|
(1,709)
|
|
(665.0%)
|
|
Net income
|
$
130,244
|
|
6.3%
|
|
$
48,576
|
|
2.8%
|
|
$ 81,668
|
|
168.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
$
3.09
|
|
|
|
$
1.15
|
|
|
|
$
1.94
|
|
168.7%
|
|
Diluted earnings per
share
|
$
3.06
|
|
|
|
$
1.14
|
|
|
|
$
1.92
|
|
168.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
(basic)
|
42,203
|
|
|
|
42,391
|
|
|
|
|
|
|
|
Weighted average shares
(diluted)
|
42,612
|
|
|
|
42,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
Operating income as
reported
|
|
$ 52,336
|
|
$ 38,974
|
|
$ 186,430
|
|
$ 93,233
|
|
Special items
(pre-tax):
|
|
|
|
|
|
|
|
|
|
Rationalization and asset
impairment charges (gains) (1)
|
|
2,175
|
|
4,177
|
|
(384)
|
|
29,897
|
|
Venezuela - functional currency change and devaluation (2)
|
|
-
|
|
-
|
|
3,123
|
|
-
|
|
Pension
settlement gain
|
|
-
|
|
-
|
|
-
|
|
(2,144)
|
|
Adjusted operating income
(5)
|
|
$ 54,511
|
|
$ 43,151
|
|
$ 189,169
|
|
$ 120,986
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income as
reported
|
|
$ 41,503
|
|
$ 24,345
|
|
$ 130,244
|
|
$ 48,576
|
|
Special items
(after-tax):
|
|
|
|
|
|
|
|
|
|
Rationalization and asset impairment charges (gains)
(1)
|
|
2,002
|
|
3,382
|
|
(894)
|
|
23,789
|
|
Venezuela - functional currency change and devaluation (2)
|
|
-
|
|
-
|
|
3,560
|
|
-
|
|
Pension
settlement gain
|
|
-
|
|
-
|
|
-
|
|
(2,144)
|
|
Gain on sale
of property of equity investment
|
|
-
|
|
-
|
|
-
|
|
(5,667)
|
|
Loss on
disposal of equity investment (3)
|
|
-
|
|
-
|
|
-
|
|
7,943
|
|
Adjustment
of tax contingency (4)
|
|
(5,092)
|
|
-
|
|
(5,092)
|
|
-
|
|
Noncontrolling interests (1)
|
|
(108)
|
|
-
|
|
1,782
|
|
601
|
|
Adjusted net income
(5)
|
|
$ 38,305
|
|
$ 27,727
|
|
$ 129,600
|
|
$ 73,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share as
reported
|
|
$ 0.98
|
|
$ 0.57
|
|
$
3.06
|
|
$
1.14
|
|
Special items
|
|
(0.08)
|
|
0.08
|
|
(0.02)
|
|
0.57
|
|
Adjusted diluted earnings per
share (5)
|
|
$ 0.90
|
|
$ 0.65
|
|
$
3.04
|
|
$
1.71
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
(diluted)
|
|
42,455
|
|
42,730
|
|
42,612
|
|
42,634
|
|
|
|
|
|
|
|
|
|
|
|
(1) The three months ended
December 31, 2010 includes charges associated with the
consolidation of manufacturing operations initiated in 2009 as well
as impairment charges associated with assets to be disposed.
The twelve months ended December 31, 2010 include gains of
$4,555 ($4,596 after-tax) on the disposal of assets at rationalized
operations offset by charges of $4,171 ($3,702 after-tax) primarily
associated with the consolidation of manufacturing operations
initiated in 2009. The closure of certain manufacturing
operations included those with noncontrolling interests.
|
|
The three and twelve month
periods ended December 31, 2009 include primarily employee
severance costs.
|
|
(2) Represents the impact
of the change in the functional currency of the Company's
Venezuelan operation to the dollar and the devaluation of the
Venezuelan currency.
|
|
(3) Represents the impact
of the completion of the Company's 100% acquisition of Jinzhou Jin
Tai Welding and Metal Co., Ltd. and associated disposal of the
Company's 35% interest in Taiwan-based Kuang Tai Metal Industrial
Co., Ltd.
|
|
(4) Represents the
adjustment for a change in applicable tax regulations in the Asia
Pacific Welding segment.
|
|
(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 merely a supplement to, and not a replacement
for, GAAP financial measures.
|
|
|
|
|
|
|
|
|
|
|
|
Lincoln
Electric Holdings, Inc.
|
|
Financial
Highlights
|
|
(In
thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Balance Sheet
Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
Selected Consolidated Balance
Sheet Data
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
366,193
|
|
$
388,136
|
|
Total current assets
|
|
1,082,512
|
|
1,023,546
|
|
Property, plant and equipment,
net
|
|
478,566
|
|
460,061
|
|
Total assets
|
|
1,783,788
|
|
1,705,292
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
335,592
|
|
297,971
|
|
Short-term debt
|
|
13,078
|
|
35,867
|
|
Long-term debt
|
|
84,627
|
|
87,850
|
|
Total equity
|
|
1,149,478
|
|
1,085,675
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
Net Operating Working
Capital
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
Accounts receivable
|
|
$
321,948
|
|
$
273,700
|
|
Inventory
|
|
291,730
|
|
255,743
|
|
Trade accounts
payable
|
|
147,111
|
|
100,052
|
|
Net operating working
capital
|
|
$
466,567
|
|
$
429,391
|
|
|
|
|
|
|
|
Net operating working capital to
net sales (1)
|
|
20.7%
|
|
23.2%
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
Invested Capital
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
Short-term debt
|
|
$
13,078
|
|
$
35,867
|
|
Long-term debt
|
|
84,627
|
|
87,850
|
|
Total debt
|
|
97,705
|
|
123,717
|
|
Total equity
|
|
1,149,478
|
|
1,085,675
|
|
Invested capital
|
|
$
1,247,183
|
|
$
1,209,392
|
|
|
|
|
|
|
|
Total debt / invested
capital
|
|
7.8%
|
|
10.2%
|
|
Return on invested capital
(2)
|
|
10.7%
|
|
4.3%
|
|
|
|
|
|
|
|
(1) Net operating working
capital to net sales is defined as net operating working capital
divided by annualized rolling three months of sales.
|
|
|
|
(2) 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)
|
|
|
|
|
|
|
|
Consolidated Statements of Cash
Flows
|
|
|
|
|
|
|
|
Three Months
Ended December 31,
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
OPERATING ACTIVITIES:
|
|
|
|
|
|
Net income
|
|
$ 41,503
|
|
$ 24,345
|
|
Noncontrolling interests in
subsidiaries' earnings (loss)
|
|
6
|
|
(367)
|
|
Net income including
noncontrolling interests
|
|
41,509
|
|
23,978
|
|
Adjustments to reconcile
Net income including noncontrolling interests to Net
|
|
|
|
|
|
cash provided by
operating activities:
|
|
|
|
|
|
Rationalization and asset
impairment charges
|
|
443
|
|
2,940
|
|
Depreciation and
amortization
|
|
14,935
|
|
14,265
|
|
Equity loss (earnings) in
affiliates, net
|
|
104
|
|
(400)
|
|
Other non-cash items,
net
|
|
6,506
|
|
3,993
|
|
Changes in operating
assets and liabilities, net of effects from
acquisitions:
|
|
|
|
|
|
Decrease in accounts
receivable
|
|
640
|
|
3,330
|
|
Decrease in
inventories
|
|
28,299
|
|
21,863
|
|
Decrease in trade accounts
payable
|
|
(6,992)
|
|
(13,975)
|
|
Decrease in accrued
pensions
|
|
(9,565)
|
|
(8,697)
|
|
Net change in other
current assets and liabilities
|
|
(27,474)
|
|
(29,464)
|
|
Net change in other
long-term assets and liabilities
|
|
4,859
|
|
1,204
|
|
NET CASH PROVIDED BY OPERATING
ACTIVITIES
|
|
53,264
|
|
19,037
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
Capital
expenditures
|
|
(17,357)
|
|
(11,916)
|
|
Acquisition of businesses,
net of cash acquired
|
|
(17,674)
|
|
(7,891)
|
|
Proceeds from sale of
property, plant and equipment
|
|
275
|
|
(81)
|
|
NET CASH USED BY INVESTING
ACTIVITIES
|
|
(34,756)
|
|
(19,888)
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
Net change in
borrowings
|
|
(9,574)
|
|
(6,476)
|
|
Proceeds from exercise of
stock options
|
|
2,189
|
|
400
|
|
Tax benefit from exercise
of stock options
|
|
741
|
|
90
|
|
Purchase of shares for
treasury
|
|
(16,722)
|
|
-
|
|
Cash dividends paid to
shareholders
|
|
(11,780)
|
|
(11,454)
|
|
NET CASH USED BY FINANCING
ACTIVITIES
|
|
(35,146)
|
|
(17,440)
|
|
|
|
|
|
|
|
Effect of exchange rate changes
on Cash and cash equivalents
|
|
294
|
|
460
|
|
DECREASE IN CASH AND CASH
EQUIVALENTS
|
|
(16,344)
|
|
(17,831)
|
|
Cash and cash equivalents at
beginning of period
|
|
382,537
|
|
405,967
|
|
Cash and cash equivalents at end
of period
|
|
$ 366,193
|
|
$ 388,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid per
share
|
|
$
0.28
|
|
$
0.27
|
|
|
|
|
|
|
Lincoln
Electric Holdings, Inc.
|
|
Financial
Highlights
|
|
(In
thousands, except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Consolidated Statements of Cash
Flows
|
|
|
|
|
|
|
|
Twelve
Months Ended December 31,
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
OPERATING ACTIVITIES:
|
|
|
|
|
|
Net income
|
|
$ 130,244
|
|
$ 48,576
|
|
Noncontrolling interests in
subsidiaries' earnings
|
|
1,966
|
|
257
|
|
Net income including
noncontrolling interests
|
|
132,210
|
|
48,833
|
|
Adjustments to reconcile
Net income including noncontrolling interests to Net
|
|
|
|
|
|
cash provided by
operating activities:
|
|
|
|
|
|
Rationalization and asset
impairment (gains) charges
|
|
(4,391)
|
|
2,940
|
|
Depreciation and
amortization
|
|
57,357
|
|
56,598
|
|
Equity (earnings) loss in
affiliates, net
|
|
(600)
|
|
8,554
|
|
Other non-cash items,
net
|
|
29,966
|
|
23,434
|
|
Changes in operating
assets and liabilities, net of effects from
acquisitions:
|
|
|
|
|
|
(Increase) decrease in
accounts receivable
|
|
(47,958)
|
|
60,913
|
|
(Increase) decrease in
inventories
|
|
(28,912)
|
|
127,739
|
|
Increase (decrease) in
trade accounts payable
|
|
47,323
|
|
(30,364)
|
|
Decrease in accrued
pensions
|
|
(38,806)
|
|
(39,185)
|
|
Net change in other
current assets and liabilities
|
|
13,792
|
|
(12,556)
|
|
Net change in other
long-term assets and liabilities
|
|
(3,003)
|
|
3,444
|
|
NET CASH PROVIDED BY OPERATING
ACTIVITIES
|
|
156,978
|
|
250,350
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
Capital
expenditures
|
|
(60,565)
|
|
(38,201)
|
|
Additions to equity
investment in affiliates
|
|
-
|
|
(488)
|
|
Acquisition of businesses,
net of cash acquired
|
|
(18,856)
|
|
(25,449)
|
|
Proceeds from sale of
property, plant and equipment
|
|
10,021
|
|
557
|
|
NET CASH USED BY INVESTING
ACTIVITIES
|
|
(69,400)
|
|
(63,581)
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
Net change in
borrowings
|
|
(27,179)
|
|
(43,828)
|
|
Proceeds from exercise of
stock options
|
|
3,508
|
|
705
|
|
Tax benefit from exercise
of stock options
|
|
1,210
|
|
195
|
|
Purchase of shares for
treasury
|
|
(39,682)
|
|
(343)
|
|
Cash dividends paid to
shareholders
|
|
(47,364)
|
|
(45,801)
|
|
NET CASH USED BY FINANCING
ACTIVITIES
|
|
(109,507)
|
|
(89,072)
|
|
|
|
|
|
|
|
Effect of exchange rate changes
on Cash and cash equivalents
|
|
(14)
|
|
6,107
|
|
(DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS
|
|
(21,943)
|
|
103,804
|
|
Cash and cash equivalents at
beginning of period
|
|
388,136
|
|
284,332
|
|
Cash and cash equivalents at end
of period
|
|
$ 366,193
|
|
$ 388,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid per
share
|
|
$
1.12
|
|
$
1.08
|
|
|
|
|
|
|
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 December 31,
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
272,413
|
|
$ 104,152
|
|
$
90,127
|
|
$ 32,410
|
|
$ 65,190
|
|
$
-
|
|
$
564,292
|
|
Inter-segment sales
|
|
27,468
|
|
3,543
|
|
3,236
|
|
152
|
|
1,764
|
|
(36,163)
|
|
-
|
|
Total
|
|
$
299,881
|
|
$ 107,695
|
|
$
93,363
|
|
$ 32,562
|
|
$ 66,954
|
|
$
(36,163)
|
|
$
564,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1)
|
|
$
47,708
|
|
$ 1,895
|
|
$
220
|
|
$ 2,048
|
|
$
1,646
|
|
$
(201)
|
|
$
53,316
|
|
As a percent
of
total
sales
|
|
15.9%
|
|
1.8%
|
|
0.2%
|
|
6.3%
|
|
2.5%
|
|
|
|
9.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special items (4)
|
|
$
-
|
|
$
407
|
|
$
481
|
|
$
-
|
|
$
1,287
|
|
$
-
|
|
$
2,175
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT, as adjusted (3)
|
|
$
47,708
|
|
$ 2,302
|
|
$
701
|
|
$ 2,048
|
|
$
2,933
|
|
$
(201)
|
|
$
55,491
|
|
As a percent
of
total
sales
|
|
15.9%
|
|
2.1%
|
|
0.8%
|
|
6.3%
|
|
4.4%
|
|
|
|
9.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
218,207
|
|
$ 85,808
|
|
$
75,136
|
|
$ 29,974
|
|
$ 53,324
|
|
$
-
|
|
$
462,449
|
|
Inter-segment sales
|
|
21,894
|
|
1,724
|
|
2,051
|
|
308
|
|
1,546
|
|
(27,523)
|
|
-
|
|
Total
|
|
$
240,101
|
|
$ 87,532
|
|
$
77,187
|
|
$ 30,282
|
|
$ 54,870
|
|
$
(27,523)
|
|
$
462,449
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1)
|
|
$
41,668
|
|
$ 1,641
|
|
$
(4,632)
|
|
$ 3,554
|
|
$
(50)
|
|
$
(861)
|
|
$
41,320
|
|
As a percent
of
total
sales
|
|
17.4%
|
|
1.9%
|
|
(6.0%)
|
|
11.7%
|
|
(0.1%)
|
|
|
|
8.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special items (4)
|
|
$
195
|
|
$ 1,010
|
|
$
1,876
|
|
$
-
|
|
$
1,096
|
|
$
-
|
|
$
4,177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT, as adjusted (3)
|
|
$
41,863
|
|
$ 2,651
|
|
$
(2,756)
|
|
$ 3,554
|
|
$
1,046
|
|
$
(861)
|
|
$
45,497
|
|
As a percent
of
total
sales
|
|
17.4%
|
|
3.0%
|
|
(3.6%)
|
|
11.7%
|
|
1.9%
|
|
|
|
9.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended December 31,
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$ 1,013,193
|
|
$ 359,925
|
|
$
324,092
|
|
$ 117,419
|
|
$ 255,543
|
|
$
-
|
|
$
2,070,172
|
|
Inter-segment sales
|
|
108,849
|
|
13,330
|
|
12,546
|
|
1,216
|
|
6,641
|
|
(142,582)
|
|
-
|
|
Total
|
|
$ 1,122,042
|
|
$ 373,255
|
|
$
336,638
|
|
$ 118,635
|
|
$ 262,184
|
|
$
(142,582)
|
|
$
2,070,172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1)
|
|
$
162,192
|
|
$ 14,537
|
|
$
5,493
|
|
$ 4,431
|
|
$ 11,440
|
|
$
(6,675)
|
|
$
191,418
|
|
As a percent
of
total
sales
|
|
14.5%
|
|
3.9%
|
|
1.6%
|
|
3.7%
|
|
4.4%
|
|
|
|
9.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special items (2)
|
|
$
-
|
|
$ 2,486
|
|
$
(3,741)
|
|
$ 3,123
|
|
$
871
|
|
$
-
|
|
$
2,739
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT, as adjusted (3)
|
|
$
162,192
|
|
$ 17,023
|
|
$
1,752
|
|
$ 7,554
|
|
$ 12,311
|
|
$
(6,675)
|
|
$
194,157
|
|
As a percent
of
total
sales
|
|
14.5%
|
|
4.6%
|
|
0.5%
|
|
6.4%
|
|
4.7%
|
|
|
|
9.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended December 31,
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
858,180
|
|
$ 346,383
|
|
$
208,280
|
|
$ 99,171
|
|
$ 217,271
|
|
$
-
|
|
$
1,729,285
|
|
Inter-segment sales
|
|
85,630
|
|
8,725
|
|
4,051
|
|
308
|
|
7,739
|
|
(106,453)
|
|
-
|
|
Total
|
|
$
943,810
|
|
$ 355,108
|
|
$
212,331
|
|
$ 99,479
|
|
$ 225,010
|
|
$
(106,453)
|
|
$
1,729,285
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1)
|
|
$
124,158
|
|
$ (6,531)
|
|
$
(27,841)
|
|
$ 10,120
|
|
$
(4,765)
|
|
$
(3,344)
|
|
$
91,797
|
|
As a percent
of
total
sales
|
|
13.2%
|
|
(1.8%)
|
|
(13.1%)
|
|
10.2%
|
|
(2.1%)
|
|
|
|
5.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special items (5)
|
|
$
10,386
|
|
$ 4,335
|
|
$
9,006
|
|
$
528
|
|
$
5,774
|
|
$
-
|
|
$
30,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT, as adjusted (3)
|
|
$
134,544
|
|
$ (2,196)
|
|
$
(18,835)
|
|
$ 10,648
|
|
$
1,009
|
|
$
(3,344)
|
|
$
121,826
|
|
As a percent
of
total
sales
|
|
14.3%
|
|
(0.6%)
|
|
(8.9%)
|
|
10.7%
|
|
0.4%
|
|
|
|
7.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) EBIT is defined as
Operating income plus Equity earnings (loss) in affiliates and
Other income.
|
|
(2) Special items include
rationalization charges (gains) and the impact of the change in the
functional currency of the Company's Venezuelan operation to the
dollar and the devaluation of the Venezuelan currency.
|
|
(3) 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.
|
|
(4) Special items include
rationalization charges.
|
|
(5) Special items include
rationalization charges, a gain on the sale of a property, a
pension settlement gain and a loss related to an acquisition
included in Equity earnings (loss) in affiliates.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
Foreign
|
|
Net
Sales
|
|
|
|
2009
|
|
Volume
|
|
Acquisitions
|
|
Price
|
|
Exchange
|
|
2010
|
|
Operating
Segments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Welding
|
|
$
218,207
|
|
$ 50,683
|
|
$
-
|
|
$ 1,751
|
|
$ 1,772
|
|
$
272,413
|
|
Europe Welding
|
|
85,808
|
|
18,565
|
|
5,331
|
|
1,029
|
|
(6,581)
|
|
104,152
|
|
Asia Pacific Welding
|
|
75,136
|
|
8,841
|
|
-
|
|
2,808
|
|
3,342
|
|
90,127
|
|
South America Welding
|
|
29,974
|
|
6,702
|
|
-
|
|
2,228
|
|
(6,494)
|
|
32,410
|
|
The Harris Products
Group
|
|
53,324
|
|
5,286
|
|
-
|
|
6,858
|
|
(278)
|
|
65,190
|
|
Consolidated
|
|
$
462,449
|
|
$ 90,077
|
|
$
5,331
|
|
$ 14,674
|
|
$ (8,239)
|
|
$
564,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Welding
|
|
|
|
23.2%
|
|
-
|
|
0.8%
|
|
0.8%
|
|
24.8%
|
|
Europe Welding
|
|
|
|
21.6%
|
|
6.2%
|
|
1.2%
|
|
(7.7%)
|
|
21.4%
|
|
Asia Pacific Welding
|
|
|
|
11.8%
|
|
-
|
|
3.7%
|
|
4.4%
|
|
20.0%
|
|
South America Welding
|
|
|
|
22.4%
|
|
-
|
|
7.4%
|
|
(21.7%)
|
|
8.1%
|
|
The Harris Products
Group
|
|
|
|
9.9%
|
|
-
|
|
12.9%
|
|
(0.5%)
|
|
22.3%
|
|
Consolidated
|
|
|
|
19.5%
|
|
1.2%
|
|
3.2%
|
|
(1.8%)
|
|
22.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December
31st Change in Net Sales by Segment
|
|
|
|
|
|
Change in
Net Sales due to:
|
|
|
|
|
Net
Sales
|
|
|
|
|
|
|
|
Foreign
|
|
Net
Sales
|
|
|
|
2009
|
|
Volume
|
|
Acquisitions
|
|
Price
|
|
Exchange
|
|
2010
|
|
Operating
Segments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Welding
|
|
$
858,180
|
|
$ 150,814
|
|
$
-
|
|
$ (7,709)
|
|
$ 11,908
|
|
$
1,013,193
|
|
Europe Welding
|
|
346,383
|
|
30,175
|
|
5,331
|
|
(9,668)
|
|
(12,296)
|
|
359,925
|
|
Asia Pacific Welding
|
|
208,280
|
|
20,077
|
|
86,235
|
|
(3,165)
|
|
12,665
|
|
324,092
|
|
South America Welding
|
|
99,171
|
|
25,724
|
|
-
|
|
7,432
|
|
(14,908)
|
|
117,419
|
|
The Harris Products
Group
|
|
217,271
|
|
16,264
|
|
-
|
|
19,303
|
|
2,705
|
|
255,543
|
|
Consolidated
|
|
$ 1,729,285
|
|
$ 243,054
|
|
$
91,566
|
|
$ 6,193
|
|
$
74
|
|
$
2,070,172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Welding
|
|
|
|
17.6%
|
|
-
|
|
(0.9%)
|
|
1.4%
|
|
18.1%
|
|
Europe Welding
|
|
|
|
8.7%
|
|
1.5%
|
|
(2.8%)
|
|
(3.5%)
|
|
3.9%
|
|
Asia Pacific Welding
|
|
|
|
9.6%
|
|
41.4%
|
|
(1.5%)
|
|
6.1%
|
|
55.6%
|
|
South America Welding
|
|
|
|
25.9%
|
|
-
|
|
7.5%
|
|
(15.0%)
|
|
18.4%
|
|
The Harris Products
Group
|
|
|
|
7.5%
|
|
-
|
|
8.9%
|
|
1.2%
|
|
17.6%
|
|
Consolidated
|
|
|
|
14.1%
|
|
5.3%
|
|
0.4%
|
|
-
|
|
19.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Lincoln Electric Holdings, Inc.