• Lincoln Electric Reports Fourth Quarter and Full Year 2021 Results

    Source: Nasdaq GlobeNewswire / 10 Feb 2022 06:30:01   America/Chicago



    Fourth Quarter 2021 Highlights

    • Net sales increase 21.7% to record $844.3 million on 19.0% higher organic sales
       
    • Operating income margin of 14.3%; Adjusted operating income margin of 14.5%
       
    • EPS increases 15.7% to $1.25; Adjusted EPS increases 29.8% to record $1.61

    Full Year 2021 Highlights

    • Record Net sales of $3.2 billion with 19.3% higher organic sales
       
    • Operating income margin of 14.3%; Adjusted operating income margin of 14.8%
       
    • EPS increases 34.5% to $4.60; Adjusted EPS increases 49.9% to record $6.22
       
    • ROIC increases 620 basis points to 23.9%
       
    • $286 million returned to shareholders through dividends and share repurchases

    CLEVELAND, Feb. 10, 2022 (GLOBE NEWSWIRE) -- Lincoln Electric Holdings, Inc. (the “Company”) (Nasdaq: LECO) today reported fourth quarter 2021 net income of $74.4 million, or diluted earnings per share (EPS) of $1.25, which includes special item after-tax charges of $21.8 million, or $0.36 EPS. Special item charges primarily relate to the termination of a pension plan. This compares with prior year period net income of $65.1 million, or $1.08 EPS, which included special item after-tax charges of $9.9 million, or $0.16 EPS. Excluding these items, fourth quarter 2021 Adjusted net income was $96.2 million, or $1.61 Adjusted EPS. This compares with Adjusted net income of $75.0 million, or $1.24 adjusted EPS, in the prior year period.

    Fourth quarter 2021 sales increased 21.7% to $844.3 million from a 19.0% increase in organic sales and a 4.7% benefit from acquisitions, partially offset by 2.0% unfavorable foreign exchange. Operating income for the fourth quarter 2021 was $120.3 million, or 14.3% of sales, including special item charges of $1.8 million. This compares with operating income of $83.4 million, or 12.0% of sales, in the prior year period. Excluding special items, Adjusted operating income was $122.2 million, or 14.5% of sales, as compared with $92.9 million, or 13.4% of sales, in the prior year period.

    “We finished the year with record sales and adjusted EPS while navigating a challenging operating environment,” stated Christopher L. Mapes, Chairman, President and Chief Executive Officer. “Our team did an outstanding job during another rigorous year putting our customers first while advancing our strategic initiatives, innovation, and operational excellence.” Mapes continued, “Looking ahead, we are well-positioned to capitalize on growth opportunities as conditions improve and capital investments accelerate, and are raising our 2025 Higher Standard strategy growth and profitability goals to reflect the superior value we will generate through this cycle.”

    Twelve Months 2021 Summary

    Net income for the twelve months ended December 31, 2021 was $276.5 million, or $4.60 EPS. This compares with $206.1 million, or $3.42 EPS, in 2020. Reported EPS includes special item after-tax charges of $96.9 million or $1.62 EPS, as compared with special item after-tax net charges of $43.8 million, or $0.73 EPS in 2020. Excluding these items, full year 2021 Adjusted net income for the year ended December 31, 2021 increased 49.4% to $373.3 million, or $6.22 Adjusted EPS, compared with $249.9 million, or $4.15 Adjusted EPS, in 2020.

    Sales increased 21.8% to $3.2 billion in the twelve months ended December 31, 2021 from a 19.3% increase in organic sales, a 1.9% benefit from acquisitions and 0.6% favorable foreign exchange. Operating income for full year 2021 was $461.7 million, or 14.3% of sales, as compared with $282.1 million, or 10.6% of sales, in 2020. Excluding special items, Adjusted operating income was $479.2 million, or 14.8% of sales, as compared with $328.3 million, or 12.4% of sales, in 2020.

    Webcast Information

    A conference call to discuss fourth quarter 2021 financial results will be webcast live today, February 10, 2022, at 10:00 a.m., Eastern Time.  This webcast is accessible at https://ir.lincolnelectric.com. Listeners should go to the web site prior to the call to register, download and install any necessary audio software. A replay of the webcast will be available on the Company's web site.

    If investors would like to ask questions, please dial (877) 344-3899 (domestic) or (315) 625-3087 (international) and use confirmation code 2165948. Telephone participants are asked to dial in 10 - 15 minutes prior to the start of the conference call.

    Financial results for the fourth quarter 2021 can also be obtained at https://ir.lincolnelectric.com.

    About Lincoln Electric

    Lincoln Electric is the world leader in the engineering, design, and manufacturing of advanced arc welding solutions, automated joining, assembly and cutting systems, plasma and oxy-fuel cutting equipment, and has a leading global position in brazing and soldering alloys. Lincoln is recognized as the Welding Expert™ for its leading material science, software development, automation engineering, and application expertise, which advance customers’ fabrication capabilities to help them build a better world. Headquartered in Cleveland, Ohio, Lincoln has 56 manufacturing locations in 19 countries and a worldwide network of distributors and sales offices serving customers in over 160 countries. For more information about Lincoln Electric and its products and services, visit the Company’s website at https://www.lincolnelectric.com.

    Non-GAAP Information

    Adjusted operating income, Adjusted net income, Adjusted EBIT, Adjusted effective tax rate, Adjusted diluted earnings per share, Organic sales, Cash conversion and Return on invested capital are non-GAAP financial measures. Management uses non-GAAP measures to assess the Company's operating performance by excluding certain disclosed special items that management believes are not representative of the Company's core business. Management believes that excluding these special items enables them to make better period-over-period comparisons and benchmark the Company's operational performance against other companies in its industry more meaningfully. Furthermore, management believes that non-GAAP financial measures provide investors with meaningful information that provides a more complete understanding of Company operating results and enables investors to analyze financial and business trends more thoroughly. Non-GAAP financial measures should not be viewed in isolation, are not a substitute for GAAP measures and have limitations including, but not limited to, their usefulness as comparative measures as other companies may define their non-GAAP measures differently.

    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, financial 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; adverse outcome of pending or potential litigation; actual costs of the Company’s rationalization plans; possible acquisitions, including the Company’s ability to successfully integrate acquisitions; market risks and price fluctuations related to the purchase of commodities and energy; global regulatory complexity; the effects of changes in tax law; tariff rates in the countries where the Company conducts business; and the possible effects of events beyond our control, such as political unrest, acts of terror, natural disasters and pandemics, including the current coronavirus disease ("COVID-19") pandemic, 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, 2020.



    Lincoln Electric Holdings, Inc.
    Financial Highlights
    (In thousands, except per share amounts)
    (Unaudited)

    Consolidated Statements of Income

                     
                   Fav (Unfav) to 
      Three Months Ended December 31,  Prior Year 
      2021 % of Sales    2020    % of Sales $ % 
    Net sales $844,251  100.0 %$693,794  100.0%$150,457  21.7 %
    Cost of goods sold  571,594  67.7 % 464,540  67.0% (107,054) (23.0)%
    Gross profit  272,657  32.3 % 229,254  33.0% 43,403  18.9 %
    Selling, general & administrative expenses  150,758  17.9 % 136,362  19.7% (14,396) (10.6)%
    Rationalization and asset impairment charges  1,550  0.2 % 9,452  1.4% 7,902  83.6 %
    Operating income  120,349  14.3 % 83,440  12.0% 36,909  44.2 %
    Interest expense, net  5,478  0.6 % 5,082  0.7% (396) (7.8)%
    Other income (expense)  (43,302) (5.1)% 2,774  0.4% (46,076) (1,661.0)%
    Income before income taxes  71,569  8.5 % 81,132  11.7% (9,563) (11.8)%
    Income taxes  (2,841) (0.3)% 16,062  2.3% 18,903  117.7 %
    Effective tax rate  (4.0)%   19.8 %   23.8 %  
    Net income including non-controlling interests  74,410  8.8 % 65,070  9.4% 9,340  14.4 %
    Non-controlling interests in subsidiaries’ income (loss)  (17) —   (8) —  (9) 112.5 %
    Net income $74,427  8.8 %$65,078  9.4%$9,349  14.4 %
                     
    Basic earnings per share $1.26    $1.09    $0.17  15.6 %
    Diluted earnings per share $1.25    $1.08    $0.17  15.7 %
    Weighted average shares (basic)  58,842     59,567         
    Weighted average shares (diluted)  59,637     60,301         


                      
                    Fav (Unfav) to 
      Twelve Months Ended December 31, Prior Year 
      2021 % of Sales    2020 % of Sales    $ % 
    Net sales $3,234,180  100.0 %$2,655,400  100.0%$578,780  21.8 %
    Cost of goods sold  2,165,575  67.0 % 1,784,059  67.2% (381,516) (21.4)%
    Gross profit  1,068,605  33.0 % 871,341  32.8% 197,264  22.6 %
    Selling, general & administrative expenses  597,109  18.5 % 543,802  20.5% (53,307) (9.8)%
    Rationalization and asset impairment charges  9,827  0.3 % 45,468  1.7% 35,641  78.4 %
    Operating income  461,669  14.3 % 282,071  10.6% 179,598  63.7 %
    Interest expense, net  22,214  0.7 % 21,973  0.8% (241) (1.1)%
    Other income (expense)  (114,457) (3.5)% 3,942  0.1% (118,399) (3,003.5)%
    Income before income taxes  324,998  10.0 % 264,040  9.9% 60,958  23.1 %
    Income taxes  48,418  1.5 % 57,896  2.2% 9,478  16.4 %
    Effective tax rate  14.9 %   21.9 %   7.0 %  
    Net income including non-controlling interests  276,580  8.6 % 206,144  7.8% 70,436  34.2 %
    Non-controlling interests in subsidiaries’ income (loss)  114  —   29  —  85  293.1 %
    Net income $276,466  8.5 %$206,115  7.8%$70,351  34.1 %
                      
    Basic earnings per share $4.66    $3.46    $1.20  34.7 %
    Diluted earnings per share $4.60    $3.42    $1.18  34.5 %
    Weighted average shares (basic)  59,309     59,633         
    Weighted average shares (diluted)  60,062     60,248         



    Lincoln Electric Holdings, Inc.
    Financial Highlights
    (In thousands)
    (Unaudited)

    Balance Sheet Highlights

            
    Selected Consolidated Balance Sheet Data    December 31, 2021    December 31, 2020 
    Cash and cash equivalents $192,958 $257,279 
    Accounts receivable, net  429,074  373,487 
    Inventories  539,919  381,258 
    Total current assets  1,289,593  1,112,343 
    Property, plant and equipment, net  511,744  522,092 
    Total assets  2,592,307  2,314,453 
    Trade accounts payable  330,230  256,530 
    Total current liabilities  755,905  549,449 
    Short-term debt (1)  52,730  2,734 
    Long-term debt, less current portion  717,089  715,456 
    Total equity  863,909  790,250 
            
    Operating Working Capital December 31, 2021 December 31, 2020 
    Average operating working capital to Net sales (2)  16.3% 17.4%
            
    Invested Capital December 31, 2021 December 31, 2020 
    Short-term debt (1) $52,730 $2,734 
    Long-term debt, less current portion  717,089  715,456 
    Total debt  769,819  718,190 
    Total equity  863,909  790,250 
    Invested capital $1,633,728 $1,508,440 
            
    Total debt / invested capital  47.1% 47.6%


     (1) Includes current portion of long-term debt.
     (2) Average operating working capital to Net sales is defined as the sum of Accounts receivable, Inventories and contract assets less Trade accounts payable and contract liabilities as of period end divided by annualized rolling three months of Net sales.



    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, 
      2021 2020  2021 2020 
    Operating income as reported $120,349  $83,440   $461,669  $282,071  
    Special items (pre-tax):              
    Rationalization and asset impairment charges (2)  1,550   9,452    9,827   45,468  
    Acquisition transaction costs (3)  —   —    1,923   —  
    Amortization of step up in value of acquired inventories (4)  273   —    5,804   806  
    Adjusted operating income (1) $122,172  $92,892   $479,223  $328,345  
    As a percent of total sales  14.5 % 13.4 %  14.8 % 12.4 %
                   
    Net income as reported $74,427  $65,078   $276,466  $206,115  
    Special items:              
    Rationalization and asset impairment charges (2)  1,550   9,452    9,827   45,468  
    Acquisition transaction costs (3)  —   —    1,923   —  
    Pension settlement charges (5)  46,404   1,597    126,502   8,119  
    Amortization of step up in value of acquired inventories (4)  273   —    5,804   806  
    Tax effect of Special items (6)  (26,451)  (1,131)   (47,188)  (10,594) 
    Adjusted net income (1)  96,203   74,996    373,334   249,914  
    Non-controlling interests in subsidiaries’ income (loss)  (17)  (8)   114   29  
    Interest expense, net  5,478   5,082    22,214   21,973  
    Income taxes as reported  (2,841)  16,062    48,418   57,896  
    Tax effect of Special items (6)  26,451   1,131    47,188   10,594  
    Adjusted EBIT (1) $125,274  $97,263   $491,268  $340,406  
                   
    Effective tax rate as reported  (4.0)% 19.8 %  14.9 % 21.9 %
    Net special item tax impact  23.7 % (1.1)%  5.5 % (0.4)%
    Adjusted effective tax rate (1)  19.7 % 18.7 %  20.4 % 21.5 %
                   
    Diluted earnings per share as reported $1.25  $1.08   $4.60  $3.42  
    Special items per share  0.36   0.16    1.62   0.73  
    Adjusted diluted earnings per share (1) $1.61  $1.24   $6.22  $4.15  
                   
    Weighted average shares (diluted)  59,637   60,301    60,062   60,248  


     (1) Adjusted operating income, Adjusted net income, Adjusted EBIT, Adjusted effective tax rate and Adjusted diluted earnings per share are non-GAAP financial measures. Refer to Non-GAAP Information section.
     (2) Primarily related to severance, gains or losses on the disposal of assets and asset impairments of long-lived assets.
     (3) Related to acquisitions and are included in Selling, general & administrative expenses.
     (4) Related to acquisitions and are included in Cost of goods sold.
     (5) Settlement charges related to lump sum pension payments and annuity purchase associated with the termination of a pension plan and are included in Other income (expense).
     (6) Includes the net tax impact of Special items recorded during the respective periods. The tax effect of Special items impacting pre-tax income was calculated as the pre-tax amount multiplied by the applicable tax rate. The applicable tax rates reflect the taxable jurisdiction and nature of each Special item.



    Lincoln Electric Holdings, Inc.
    Financial Highlights
    (In thousands, except per share amounts)
    (Unaudited)

    Non-GAAP Financial Measures

            
         Twelve Months Ended December 31,  
    Return on Invested Capital    2021
    		    2020
    		 
    Net income as reported $276,466  $206,115  
    Rationalization and asset impairment charges  9,827   45,468  
    Acquisition transaction costs  1,923   —  
    Pension settlement charges  126,502   8,119  
    Amortization of step up in value of acquired inventories  5,804   806  
    Tax effect of Special items (2)  (47,188)  (10,594) 
    Adjusted net income (1) $373,334  $249,914  
    Plus: Interest expense, net of tax of $5,987 and $6,026 in 2021 and 2020, respectively  17,794   17,933  
    Less: Interest income, net of tax of $395 and $500 in 2021 and 2020, respectively  1,172   1,486  
    Adjusted net income before tax-effected interest $389,956  $266,361  
            
    Invested Capital December 31, 2021 December 31, 2020 
    Short-term debt $52,730  $2,734  
    Long-term debt, less current portion  717,089   715,456  
    Total debt  769,819   718,190  
    Total equity  863,909   790,250  
    Invested capital $1,633,728  $1,508,440  
            
    Return on invested capital (1)  23.9 % 17.7 %


     (1) Adjusted net income and Return on invested capital are non-GAAP financial measures. Refer to Non-GAAP Information section.
     (2) Includes the net tax impact of Special items recorded during the respective periods. The tax effect of Special items impacting pre-tax income was calculated as the pre-tax amount multiplied by the applicable tax rate. The applicable tax rates reflect the taxable jurisdiction and nature of each Special item.



    Lincoln Electric Holdings, Inc.
    Financial Highlights
    (In thousands, except per share amounts)
    (Unaudited)

    Condensed Consolidated Statements of Cash Flows

          
     Three Months Ended December 31, 
     2021 2020
    OPERATING ACTIVITIES:     
    Net income$74,427  $65,078 
    Non-controlling interests in subsidiaries’ income (loss) (17)  (8)
    Net income including non-controlling interests 74,410   65,070 
    Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities:     
    Rationalization and asset impairment net charges 108   (92)
    Depreciation and amortization 20,588   19,926 
    Equity earnings in affiliates, net (100)  (85)
    Pension settlement charges 46,404   1,597 
    Other non-cash items, net (10,777)  3,617 
    Changes in operating assets and liabilities, net of effects from acquisitions:     
    Decrease in accounts receivable 5,368   10,433 
    (Increase) decrease in inventories (25,491)  26,181 
    Increase in trade accounts payable 27,413   24,414 
    Net change in other current assets and liabilities (34,580)  (9,621)
    Net change in other long-term assets and liabilities 6,595   (5,639)
    NET CASH PROVIDED BY OPERATING ACTIVITIES 109,938   135,801 
          
    INVESTING ACTIVITIES:     
    Capital expenditures (16,091)  (22,085)
    Acquisition of businesses, net of cash acquired 2,499   — 
    Proceeds from sale of property, plant and equipment 2,934   710 
    Other investing activities —   2,321 
    NET CASH USED BY INVESTING ACTIVITIES (10,658)  (19,054)
          
    FINANCING ACTIVITIES:     
    Net change in borrowings 13,673   1,375 
    Proceeds from exercise of stock options 11,311   9,231 
    Purchase of shares for treasury (60,678)  (257)
    Cash dividends paid to shareholders (30,134)  (29,173)
    NET CASH USED BY FINANCING ACTIVITIES (65,828)  (18,824)
          
    Effect of exchange rate changes on Cash and cash equivalents (1,053)  6,877 
    INCREASE IN CASH AND CASH EQUIVALENTS 32,399   104,800 
    Cash and cash equivalents at beginning of period 160,559   152,479 
    Cash and cash equivalents at end of period$192,958  $257,279 
          
    Cash dividends paid per share$0.51  $0.49 



    Lincoln Electric Holdings, Inc.
    Financial Highlights
    (In thousands, except per share amounts)
    (Unaudited)

           
         Year Ended December 31, 
      2021
    		 2020
    OPERATING ACTIVITIES:      
    Net income $276,466  $206,115 
    Non-controlling interests in subsidiaries’ income (loss)  114   29 
    Net income including non-controlling interests  276,580   206,144 
    Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities:      
    Rationalization and asset impairment net (gains) charges  (1,054)  21,835 
    Depreciation and amortization  81,146   80,492 
    Equity earnings in affiliates, net  (499)  (408)
    Pension settlement charges  126,502   8,119 
    Other non-cash items, net  (21,744)  (5,675)
    Changes in operating assets and liabilities, net of effects from acquisitions:      
    (Increase) decrease in accounts receivable  (65,844)  3,582 
    (Increase) decrease in inventories  (154,347)  22,751 
    Increase (decrease) in trade accounts payable  82,394   (17,919)
    Net change in other current assets and liabilities  44,379   37,021 
    Net change in other long-term assets and liabilities  (2,450)  (4,580)
    NET CASH PROVIDED BY OPERATING ACTIVITIES  365,063   351,362 
           
    INVESTING ACTIVITIES:      
    Capital expenditures  (62,531)  (59,201)
    Acquisition of businesses, net of cash acquired  (156,106)  — 
    Proceeds from sale of property, plant and equipment  6,781   7,667 
    Other investing activities  6,500   2,321 
    NET CASH USED BY INVESTING ACTIVITIES  (205,356)  (49,213)
           
    FINANCING ACTIVITIES:      
    Net change in borrowings  45,968   (31,760)
    Proceeds from exercise of stock options  19,232   17,192 
    Purchase of shares for treasury  (164,526)  (113,455)
    Cash dividends paid to shareholders  (121,851)  (118,118)
    Other financing activities  (763)  — 
    NET CASH USED BY FINANCING ACTIVITIES  (221,940)  (246,141)
           
    Effect of exchange rate changes on Cash and cash equivalents  (2,088)  1,708 
    (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS  (64,321)  57,716 
    Cash and cash equivalents at beginning of period  257,279   199,563 
    Cash and cash equivalents at end of period $192,958  $257,279 
           
    Cash dividends paid per share $2.04  $1.96 



    Lincoln Electric Holdings, Inc.
    Segment Highlights (1)
    (In thousands)
    (Unaudited)

                     
         Americas    International     The Harris    Corporate /       
      Welding Welding Products Group Eliminations Consolidated 
    Three months ended December 31, 2021                
    Net sales $480,263 $245,529 $118,459 $—  $844,251 
    Inter-segment sales  30,657  8,071  1,720  (40,448)  — 
    Total sales $510,920 $253,600 $120,179 $(40,448) $844,251 
                     
    Net income             $74,427 
    As a percent of total sales              8.8%
                     
    EBIT (1) $40,258 $26,824 $12,320 $(2,355) $77,047 
    As a percent of total sales  7.9% 10.6% 10.3%    9.1%
    Special items charges (gains) (3)  43,450  1,539  3,238  —   48,227 
    Adjusted EBIT (2) $83,708 $28,363 $15,558 $(2,355) $125,274 
    As a percent of total sales  16.4% 11.2% 12.9%    14.8%
                     
    Three months ended December 31, 2020                
    Net sales $386,571 $214,782 $92,441 $—  $693,794 
    Inter-segment sales  27,734  4,827  1,658  (34,219)  — 
    Total sales $414,305 $219,609 $94,099 $(34,219) $693,794 
                     
    Net income             $65,078 
    As a percent of total sales              9.4%
                     
    EBIT (1) $68,456 $4,949 $13,362 $(553) $86,214 
    As a percent of total sales  16.5% 2.3% 14.2%    12.4%
    Special items charges (gains) (4)  748  10,301  —  —   11,049 
    Adjusted EBIT (2) $69,204 $15,250 $13,362 $(553) $97,263 
    As a percent of total sales  16.7% 6.9% 14.2%    14.0%


     (1) EBIT is defined as Operating income plus Other income (expense).
     (2) The primary profit measure used by management to assess segment performance is Adjusted EBIT.  EBIT for each operating segment is adjusted for special items to derive Adjusted EBIT.
     (3) Special items in 2021 reflect Rationalization and asset impairment charges of $1,550 primarily in International Welding, pension settlement charges of $43,439 and $2,965 in Americas Welding and The Harris Products Group, respectively, and amortization of the step up in value of acquired inventories of $273 in The Harris Products Group, related to acquisitions.
     (4) Special items in 2020 reflect Rationalization and asset impairment net charges of ($849) and $10,301 in Americas Welding and International Welding, respectively, and pension settlement charges of $1,597 in Americas Welding.



    Lincoln Electric Holdings, Inc.
    Segment Highlights
    (In thousands)
    (Unaudited)

                     
         Americas    International    The Harris    Corporate /       
      Welding Welding Products Group Eliminations Consolidated 
    Year ended December 31, 2021                
    Net sales $1,824,481 $948,125 $461,574 $—  $3,234,180 
    Inter-segment sales  140,650  26,331  8,096  (175,077)  — 
    Total sales $1,965,131 $974,456 $469,670 $(175,077) $3,234,180 
                     
    Net income             $276,466 
    As a percent of total sales              8.5%
                     
    EBIT (1) $205,902 $90,974 $64,662 $(14,326) $347,212 
    As a percent of total sales  10.5% 9.3% 13.8%    10.7%
    Special items charges (gains) (3)  123,114  15,234  3,785  1,923   144,056 
    Adjusted EBIT (2) $329,016 $106,208 $68,447 $(12,403) $491,268 
    As a percent of total sales  16.7% 10.9% 14.6%    15.2%
                     
    Year ended December 31, 2020                
    Net sales $1,509,870 $786,809 $358,721 $—  $2,655,400 
    Inter-segment sales  109,378  18,494  7,034  (134,906)  — 
    Total sales $1,619,248 $805,303 $365,755 $(134,906) $2,655,400 
                     
    Net income             $206,115 
    As a percent of total sales              7.8%
                     
    EBIT (1) $210,739 $25,575 $55,154 $(5,455) $286,013 
    As a percent of total sales  13.0% 3.2% 15.1%    10.8%
    Special items charges (gains) (4)  34,989  19,404  —  —   54,393 
    Adjusted EBIT (2) $245,728 $44,979 $55,154 $(5,455) $340,406 
    As a percent of total sales  15.2% 5.6% 15.1%    12.8%


     (1) EBIT is defined as Operating income plus Other income (expense).
     (2) The primary profit measure used by management to assess segment performance is Adjusted EBIT.  EBIT for each operating segment is adjusted for special items to derive Adjusted EBIT.
     (3) Special items in 2021 reflect pension settlement charges of $123,091, $2,965 and $446 in Americas Welding, The Harris Products Group and International Welding, respectively, Rationalization and asset impairment charges of $9,827 primarily in International Welding, amortization of the step up in value of acquired inventories of $4,984 and $820 in International Welding and The Harris Products Group, respectively, and acquisition transaction costs of $1,923 in Corporate/Eliminations related to acquisitions.
     (4) Special items in 2020 reflect Rationalization and asset impairment charges of $26,870 and $18,598 in Americas Welding and International Welding, respectively, amortization of the step up in value of acquired inventories of $806 in International Welding related to an acquisition, and pension settlement charges of $8,119 in Americas Welding.



    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 
     2020 Volume Acquisitions Price Exchange 2021 
    Operating Segments                  
    Americas Welding$386,571 $35,759  $— $56,615 $1,318  $480,263 
    International Welding 214,782  (1,764)  17,517  29,920  (14,926)  245,529 
    The Harris Products Group 92,441  4,997   15,073  6,428  (480)  118,459 
    Consolidated$ 693,794 $ 38,992  $ 32,590 $ 92,963 $ (14,088) $ 844,251 
                       
    % Change                  
    Americas Welding    9.3 % —  14.6% 0.3 % 24.2%
    International Welding    (0.8)% 8.2% 13.9% (6.9)% 14.3%
    The Harris Products Group    5.4 % 16.3% 7.0% (0.5)% 28.1%
    Consolidated     5.6 %  4.7%  13.4%  (2.0)%  21.7%

    Twelve Months Ended December 31st Change in Net Sales by Segment

                        
            Change in Net Sales due to:    
      Net Sales          Foreign Net Sales 
      2020 Volume Acquisitions Price Exchange 2021 
    Operating Segments                   
    Americas Welding $1,509,870 $164,595 $— $136,967 $13,049  $1,824,481 
    International Welding  786,809  62,033  24,473  70,457  4,353   948,125 
    The Harris Products Group  358,721  33,772  24,953  44,459  (331)  461,574 
    Consolidated $ 2,655,400 $ 260,400 $ 49,426 $ 251,883 $ 17,071  $ 3,234,180 
                        
    % Change                   
    Americas Welding     10.9% —  9.1% 0.9 % 20.8%
    International Welding     7.9% 3.1% 9.0% 0.6 % 20.5%
    The Harris Products Group     9.4% 7.0% 12.4% (0.1)% 28.7%
    Consolidated      9.8%  1.9%  9.5%  0.6 %  21.8%

     


    Contact

Amanda Butler
Vice President, Investor Relations & Communications
Tel: 216.383.2534
Email: Amanda_Butler@lincolnelectric.com

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