LECO Lincoln Electric Holdings Inc

Lincoln Electric Reports 2003 Fourth-Quarter and Year-End Financial Results - 2003 Fourth Quarter Diluted EPS 34 cents; $1.31 Full Year CLEVELAND, Feb. 13 /PRNewswire-FirstCall/ -- Lincoln Electric Holdings, Inc. today reported net income of $14.1 million for the 2003 fourth quarter, or 34 cents per diluted share, on net sales of $269.4 million. The results compare with $18.4 million in net income, or 43 cents per diluted share, on net sales of $238.5 million in the 2002 fourth quarter. "The increase we saw in incoming orders starting in September for our U.S. operations continued through December and is encouraging for 2004," said Anthony A. Massaro, Chairman and Chief Executive Officer. "We are very pleased with our results and believe they reflect the signs of a recovering North American industrial economy. This, combined with our continued global expansion, puts Lincoln in a very positive competitive position. We face 2004 with cautious optimism as the industrial sector continues to strengthen." The Company's U.S. operations had net sales of $157.6 million in the quarter, compared with $143.9 million in the year-ago period, over a 9% increase. Export sales were $16 million, compared with $15.2 million in the same quarter in 2002. Non-U.S. net sales in the quarter were $111.8 million, compared with $94.6 million in the same quarter last year. In local currencies, non-U.S. net sales were $97.2 million, an increase of about 3%. Net income for 2003 was $54.5 million, or $1.31 per diluted share, compared with $29.3 million, or 68 cents per diluted share, in 2002. The 2003 net income includes rationalization charges of approximately $1.3 million, net of tax. Excluding the rationalization charges, net income was $55.8 million, or $1.34 per diluted share. Net income in 2002, before the cumulative effect of an accounting change, was $66.9 million, or $1.56 per diluted share. Excluding the cumulative effect of an accounting change and rationalization charges, 2002 net income was $73.9million, or $1.73 per diluted share. Net sales in 2003 were $1.04 billion, compared with $994.1 million in 2002. U.S. operations had net sales of $614.5 million in 2003, compared with $612.4 million in 2002. Export sales were $62.1 million in the 2003year, compared with $63.2 million in 2002. The Company's non-U.S. net sales were $426 million, compared with $381.7 million in 2002. In local currencies, non- U.S. net sales were essentially the same, compared with the year-ago period. These sales donot include Lincoln's AS Kaynak joint venture in Turkey or the Kuang Tai joint venture in China and Taiwan. As previously reported, Lincoln has signed an agreement to purchase majority interests in several Kuang Tai China operations. Cash flow from operations in 2003 was $95.7 million, compared with $103.6 million in the previous year. Cash flow was significantly affected by voluntary funding of $40 million to the Company's U.S. pension plans in 2003, compared with $20 million in 2002. The Board of Directors of Lincoln Electric Holdings, Inc. has authorized share repurchase programs for up to 15 million shares of the Company's common stock. During 2003, the Company repurchased 1,917,022 shares of its stock at a cost of $41.9 million. Total shares purchased through the share repurchase programs were 9,657,811 shares at a cost of $199.1 million through December 31, 2003. In 2003, the holders of Lincoln Electric Holdings, Inc. stock received $26.7 million in dividends. The Board of Directors also declared a cash dividend of 16 cents per share for holders of record December 31, 2003, which was paid January 15, 2004. 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. Headquartered in Cleveland, Ohio, Lincoln has operations, manufacturing alliances and joint ventures in 18 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 Web site 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 statementsdue to a variety of factors that could adversely affect the Company's operating results. The factors include, but are not limited to: the effectiveness of operating initiatives; currency exchange and interest rates; adverse outcome of pending or potential litigation; possible acquisitions; the strength of demand for the Company's products; and the possible effects of international terrorism and hostilities on the Company or its customers, suppliers and the economy in general. Lincoln Electric Holdings, Inc. Financial Highlights (amounts in millions, except per share data) (Unaudited) Consolidated Three Months to December 31, Statements of Income 2003 2002 Net Sales $269.4 100.0% $238.5 100.0% Cost of Goods Sold 196.3 72.9% 167.3 70.1% Gross Profit 73.1 27.1% 71.2 29.9% SG&A Expenses 56.3 20.9% 46.2 19.4% Operating Income 16.8 6.2% 25.0 10.5% Interest Income 1.2 0.5% 1.1 0.4% Equity Earnings in Affiliates 0.4 0.1% 0.7 0.3% Other Income 1.1 0.4% (0.5) (0.2%) Interest Expense (1.9) (0.7%) (2.4) (1.0%) Income Before Income Taxes 17.6 6.5% 23.9 10.0% Income Taxes 3.5 1.3% 5.5 2.3% Net Income $14.1 5.2% $18.4 7.7% Basic Earnings Per Share $0.34 $0.44 Diluted Earnings Per Share $0.34 $0.43 Weighted Average Shares (Basic) 40.8 42.1 Weighted Average Shares (Diluted) 41.1 42.5 Lincoln Electric Holdings, Inc. Financial Highlights (amounts in millions, except per share data) (Unaudited) Consolidated Twelve Months to December 31, Statements of Income 2003 2002 Net Sales $1,040.5 100.0% $994.1 100.0% Cost of Goods Sold 759.9 73.0% 694.1 69.8% Gross Profit 280.6 27.0% 300.0 30.2% SG&A Expenses 210.7 20.2% 198.0 19.9% Rationalization Charges 1.7 0.2% 10.5 1.1% Operating Income 68.2 6.6%91.5 9.2% Interest Income 3.2 0.3% 3.2 0.3% Equity Earnings in Affiliates 2.9 0.3% 1.9 0.2% Other Income 3.0 0.2% 0.4 0.0% Interest Expense (8.1) (0.8%) (9.1) (0.9%) Income Before Income Taxes and Cumulative Effect of a Change in Accounting Principle 69.2 6.6% 87.9 8.8% Income Taxes 14.7 1.4% 21.0 2.1% Income Before Cumulative Effect of a Change in Accounting Principle 54.5 5.2% 66.9 6.7% Cumulative Effect of a Change in Accounting Principle, net of tax - 0.0% (37.6) (3.8%) Net Income $54.5 5.2% $29.3 2.9% Basic Earnings Per Share Before the Cumulative Effect of a Change in Accounting Principle $1.32 $1.58 Cumulative Effect of a Change in Accounting Principle, net of tax - (0.89) Basic Earnings Per Share $1.32 $0.69 Basic Earnings Per Share Before the Cumulative Effect of a Change in Accounting Principle$1.32 $1.58 Rationalization Charges (A) 0.03 0.17 Basic Earnings Per Share without the Cumulative Effect of a Change in Accounting Principle and Rationalization Charges (A) $1.35 $1.75 Diluted Earnings Per Share Before the Cumulative Effect of a Change in Accounting Principle $1.31 $1.56 Cumulative Effect of a Change in Accounting Principle, net of tax - (0.88) Diluted Earnings Per Share $1.31 $0.68 Diluted Earnings Per Share Before the Cumulative Effect of a Change in Accounting Principle $1.31 $1.56 Rationalization Charges(A) 0.03 0.17 Diluted Earnings Per Share without the Cumulative Effect of a Change in Accounting Principle and Rationalization Charges (A) $1.34 $1.73 Weighted Average Shares (Basic) 41.4 42.3 Weighted Average Shares (Diluted) 41.5 42.8 (A) Basic and diluted earnings per share without rationalization charges are presented as management believes this financial measure is 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. Lincoln Electric Holdings, Inc. Financial Highlights (amounts in millions, except per share data) (Unaudited) Selected Consolidated December 31, December 31, Balance Sheet Data 2003 2002 Cash and Cash Equivalents $170.5 $176.1 Total Current Assets 555.4 524.0 Net Property, Plant and Equipment 282.3 271.9 Total Assets 928.9 901.3 Total Current Liabilities 213.1 191.6 Short-Term Debt 4.3 14.4 Long-Term Debt 169.0 174.1 Total Shareholders' Equity 478.5 429.2 Twelve Months to December 31, Selected Consolidated Cash Flow Data 2003 2002 Cash Flow from Operations $95.7 $103.6 Capital Expenditures 34.8 27.9 Acquisitions 3.7 8.0 Purchase of Common Shares for Treasury, net 35.2 8.3 (Decrease) Increase in Cash and Cash Equivalents (5.6) 152.6 Depreciation and Amortization 37.7 37.0 Dividends Paid 26.7 25.4 Cash Dividends Paid Per Share $0.64 $0.60 DATASOURCE: Lincoln Electric Holdings, Inc. CONTACT: Roy L. Morrow of Lincoln Electric Holdings, Inc., +1-216-383-4893, or Web site: http://www.lincolnelectric.com/

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