Lincoln Electric Reports 2003 Fourth-Quarter and Year-End Financial Results
February 13 2004 - 9:14AM
PR Newswire (US)
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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