Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 15, 2024

LINCOLN ELECTRIC HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

0-1402

(Commission File Number)


Ohio		34-1860551
(State or other jurisdiction of incorporation)		(I.R.S. Employer Identification No.)

22801 St. Clair Avenue, Cleveland, Ohio 44117

(Address of principal executive offices, with zip code)

(216) 481-8100

(Registrant’s telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of exchange on which registered
Common Shares, without par value	LECO	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02	Results of Operations and Financial Condition.

	On February 15, 2024, Lincoln Electric Holdings, Inc. (the “Company”) issued a press release reporting its financial results for the quarter ended December 31, 2023. A copy of the Company’s press release issued on February 15, 2024 is attached hereto as Exhibit 99.1 and incorporated herein by reference. The press release is also available through the Company’s website at www.lincolnelectric.com. The information in this Current Report on Form 8-K, including the Exhibit, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

Item 9.01	Financial Statements and Exhibits.

		(d) Exhibits

		99.1 The Company’s press release dated February 15, 2024.
		104 Cover page Interactive Data File (formatted as Inline XBRL and contained in the Exhibit 101 attachments)

LINCOLN ELECTRIC HOLDINGS, INC.

INDEX TO EXHIBITS


Exhibit No.		Exhibit

99.1		The Company’s press release dated February 15, 2024.
104		Cover page Interactive Data File (formatted as Inline XBRL and contained in the Exhibit 101 attachments)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	LINCOLN ELECTRIC HOLDINGS, INC.

	/s/ Gabriel Bruno
	Gabriel Bruno
	Executive Vice President, Chief Financial Officer and Treasurer
	(Principal Financial and Accounting Officer)
	February 15, 2024

Exhibit 99.1

Investor Relations: Amanda Butler (216) 383-2534

Amanda_Butler@lincolnelectric.com

LINCOLN ELECTRIC REPORTS FOURTH QUARTER AND FULL YEAR 2023 RESULTS

Fourth Quarter 2023 Highlights

◾

Net sales increase 13.7% to record $1.1 billion

◾

Record operating income margin of 19.3% and adjusted operating income margin of 17.2%

◾

Record EPS of $2.70 and adjusted EPS of $2.45

Full Year 2023 Highlights

◾

Net sales increase 11.4% to record $4.2 billion

◾

Record operating income margin and adjusted operating income margin of 17.1%

◾

Record EPS of $9.37 and adjusted EPS of $9.41

◾

Cash flows from operations increase 74% to record $668 million with 105% cash conversion⁽¹⁾

◾

Returned $347 million to shareholders through dividends and share repurchases

CLEVELAND, Thursday, February 15, 2024 - Lincoln Electric Holdings, Inc. (the “Company”) (Nasdaq: LECO) today reported fourth quarter 2023 net income of $156.6 million, or diluted earnings per share (EPS) of $2.70, which includes special item after-tax net gains of $14.6 million, or $0.25 EPS. This compares with prior year period net income of $109.1 million, or $1.87 EPS, which included special item after-tax net charges of $4.1 million. Excluding special items, fourth quarter 2023 adjusted net income was $142 million, or $2.45 adjusted EPS. This compares with adjusted net income of $113.2 million, or $1.94 adjusted EPS, in the prior year period.

Fourth quarter 2023 sales increased 13.7% to $1.1 billion reflecting a 2.6% increase in organic sales, a 9.8% benefit from acquisitions and 1.3% favorable foreign exchange. Operating income for the fourth quarter 2023 was $204 million, or 19.3% of sales. This compares with operating income of $141.5 million, or 15.2% of sales, in the prior year period. Excluding special items, adjusted operating income was $182.1 million, or 17.2% of sales, as compared with $146.8 million, or 15.8% of sales, in the prior year period.

“I am pleased to report that we achieved record performance in 2023, reflecting strong demand for our solutions and effective execution of our Higher Standard strategy,” commented Steven B. Hedlund, President and Chief Executive Officer. “This achievement is a fitting capstone to Chris Mapes’ eleven year tenure leading the company. We finished the year with good momentum across most end markets.” Hedlund concluded, “Looking ahead, we will continue to advance the business by focusing on our customers, bringing innovative products to market and driving operational excellence.”

Twelve Months 2023 Summary

Net income for the twelve months ended December 31, 2023 was $545.2 million, or $9.37 EPS, which includes special item after-tax net charges of $2.7 million, or $0.04 EPS. This compares with prior period net income of $472.2 million, or $8.04 EPS, which included special item after-tax net charges of $13.4 million, or $0.23 EPS. Excluding special items, adjusted net income for the twelve months ended December 31, 2023 increased 12.8% to $548 million, or $9.41 EPS, compared with $485.7 million, or $8.27 EPS, in the prior year period.

Sales increased 11.4% to $4.2 billion in the twelve months ended December 31, 2023 reflecting a 4% increase in organic sales, a 7.4% benefit from acquisitions and 0.1% favorable foreign exchange. Operating income for the twelve months ended December 31, 2023 was $717.8 million, or 17.1% of sales. This compares with operating income of $612.3 million, or 16.3% of sales, in the prior year period. Excluding special items, adjusted operating income was $718.8 million, or 17.1% of sales, as compared with $631.2 million, or 16.8% of sales, in the prior year period.

_______________________________________________________________________________

(1)

Cash conversion is defined as net cash provided by operating activities less capital expenditures divided by adjusted net income.

LINCOLN ELECTRIC REPORTS FOURTH QUARTER AND FULL YEAR 2023 RESULTS

Webcast Information

A conference call to discuss fourth quarter and full year 2023 financial results will be webcast live today, February 15, 2024, at 10:00 a.m., Eastern Time. Those interested in participating via webcast in listen-only mode can access the event here or on the Company's Investor Relations home page at https://ir.lincolnelectric.com. For participants who would like to participate via telephone, please dial (888) 440-4368 (domestic) or (646) 960-0856 (international) and use confirmation code 6709091. A replay of the earnings call will be available via webcast on the Company's website.

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 materials 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 operates 71 manufacturing and automation system integration locations across 21 countries and maintains 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 (“adjusted EPS”), Organic sales, Cash conversion, adjusted net operating profit after taxes and adjusted return on invested capital (“adjusted ROIC”) 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 commercial and 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 the impact of the Russia-Ukraine conflict, political unrest, acts of terror, natural disasters and pandemics 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, 2022.

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
	2023			% of Sales			2022			% of Sales		$			%
Net sales	$	1,058,514			100.0	%	$	930,934		100.0	%	$	127,580		13.7	%
Cost of goods sold		687,484			64.9	%		622,950		66.9	%		(64,534)		(10.4)	%
Gross profit		371,030			35.1	%		307,984		33.1	%		63,046		20.5	%
Selling, general & administrative expenses		188,931			17.8	%		164,113		17.6	%		(24,818)		(15.1)	%
Rationalization and asset impairment charges		(21,932)			(2.1)	%		2,383		0.3	%		24,315		1,020.4	%
Operating income		204,031			19.3	%		141,488		15.2	%		62,543		44.2	%
Interest expense, net		8,663			0.8	%		8,633		0.9	%		(30)		(0.3)	%
Other income		1,662			0.2	%		2,903		0.3	%		(1,241)		(42.7)	%
Income before income taxes		197,030			18.6	%		135,758		14.6	%		61,272		45.1	%
Income taxes		40,386			3.8	%		26,612		2.9	%		(13,774)		(51.8)	%
Effective tax rate		20.5	%					19.6	%				(0.9)	%
Net income	$	156,644			14.8	%	$	109,146		11.7	%	$	47,498		43.5	%

Basic earnings per share	$	2.75					$	1.89				$	0.86		45.5	%
Diluted earnings per share	$	2.70					$	1.87				$	0.83		44.4	%
Weighted average shares (basic)		57,063						57,676
Weighted average shares (diluted)		57,911						58,459


											Fav (Unfav) to
	Twelve Months Ended December 31,										Prior Year
	2023			% of Sales		2022			% of Sales		$			%
Net sales	$	4,191,636		100.0	%	$	3,761,211		100.0	%	$	430,425		11.4	%
Cost of goods sold		2,726,191		65.0	%		2,480,451		65.9	%		(245,740)		(9.9)	%
Gross profit		1,465,445		35.0	%		1,280,760		34.1	%		184,685		14.4	%
Selling, general & administrative expenses		758,910		18.1	%		656,636		17.5	%		(102,274)		(15.6)	%
Rationalization and asset impairment charges		(11,314)		(0.3)	%		11,788		0.3	%		23,102		196.0	%
Operating income		717,849		17.1	%		612,336		16.3	%		105,513		17.2	%
Interest expense, net		44,371		1.1	%		29,500		0.8	%		(14,871)		(50.4)	%
Other income		13,388		0.3	%		9,991		0.3	%		3,397		34.0	%
Income before income taxes		686,866		16.4	%		592,827		15.8	%		94,039		15.9	%
Income taxes		141,618		3.4	%		120,603		3.2	%		(21,015)		(17.4)	%
Effective tax rate		20.6	%				20.3	%				(0.3)	%
Net income	$	545,248		13.0	%	$	472,224		12.6	%	$	73,024		15.5	%

Basic earnings per share	$	9.50				$	8.14				$	1.36		16.7	%
Diluted earnings per share	$	9.37				$	8.04				$	1.33		16.5	%
Weighted average shares (basic)		57,364					58,030
Weighted average shares (diluted)		58,221					58,749

Lincoln Electric Holdings, Inc.

Financial Highlights

(In thousands)

(Unaudited)

Balance Sheet Highlights


Selected Consolidated Balance Sheet Data	December 31, 2023			December 31, 2022
Cash and cash equivalents	$	393,787		$	197,150
Accounts receivable, net		538,830			541,529
Inventories		562,864			665,451
Total current assets		1,693,111			1,557,790
Property, plant and equipment, net		575,316			544,871
Total assets		3,377,297			3,180,546
Trade accounts payable		325,435			352,079
Total current liabilities		754,610			852,897
Short-term debt ⁽¹⁾		2,439			93,483
Long-term debt, less current portion		1,102,771			1,110,396
Total equity		1,308,852			1,034,041

Operating Working Capital	December 31, 2023			December 31, 2022
Average operating working capital to Net sales ⁽²⁾		17.1	%		20.9	%

Invested Capital	December 31, 2023			December 31, 2022
Short-term debt ⁽¹⁾	$	2,439		$	93,483
Long-term debt, less current portion		1,102,771			1,110,396
Total debt		1,105,210			1,203,879
Total equity		1,308,852			1,034,041
Invested capital	$	2,414,062		$	2,237,920

Total debt / invested capital		45.8	%		53.8	%

(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,
	2023			2022			2023			2022
Operating income as reported	$	204,031		$	141,488		$	717,849		$	612,336
Special items (pre-tax):
Rationalization and asset impairment charges ⁽²⁾		(21,932)			2,383			(11,314)			11,788
Acquisition transaction costs ⁽³⁾		—			2,935			—			6,003
Amortization of step up in value of acquired inventories ⁽⁴⁾		—			—			12,252			1,106
Adjusted operating income ⁽¹⁾	$	182,099		$	146,806		$	718,787		$	631,233
As a percent of total sales		17.2	%		15.8	%		17.1	%		16.8	%

Net income as reported	$	156,644		$	109,146		$	545,248		$	472,224
Special items:
Rationalization and asset impairment charges ⁽²⁾		(21,932)			2,383			(11,314)			11,788
Acquisition transaction costs ⁽³⁾		—			2,935			—			6,003
Pension settlement net charges⁽⁵⁾		845			—			845			(4,273)
Amortization of step up in value of acquired inventories ⁽⁴⁾		—			—			12,252			1,106
Gain on asset disposal ⁽⁶⁾		—			—			(1,646)			—
Tax effect of Special items ⁽⁷⁾		6,445			(1,250)			2,537			(1,192)
Adjusted net income ⁽¹⁾		142,002			113,214			547,922			485,656
Interest expense, net		8,663			8,633			44,371			29,500
Income taxes as reported		40,386			26,612			141,618			120,603
Tax effect of Special items ⁽⁷⁾		(6,445)			1,250			(2,537)			1,192
Adjusted EBIT ⁽¹⁾	$	184,606		$	149,709		$	731,374		$	636,951

Effective tax rate as reported		20.5	%		19.6	%		20.6	%		20.3	%
Net special item tax impact		(1.2)	%		0.1	%		(0.4)	%		(0.2)	%
Adjusted effective tax rate ⁽¹⁾		19.3	%		19.7	%		20.2	%		20.1	%

Diluted earnings per share as reported	$	2.70		$	1.87		$	9.37		$	8.04
Special items per share		(0.25)			0.07			0.04			0.23
Adjusted diluted earnings per share ⁽¹⁾	$	2.45		$	1.94		$	9.41		$	8.27

Weighted average shares (diluted)		57,911			58,459			58,221			58,749

(1)

Adjusted operating income, adjusted net income, adjusted EBIT, adjusted effective tax rate and adjusted diluted EPS are non-GAAP financial measures. Refer to Non-GAAP Information section.

(2)

2023 gain is primarily related to the sale of a property partially offset by rationalization and asset impairment charges within International Welding. 2022 charges are primarily related to employee severance, gains or losses on the disposal of assets and other related costs and non-cash asset impairment charges.

(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)

2023 charges related to pension settlements included in Other income. 2022 net gains primarily due to the final settlement associated with the termination of a pension plan and are included in Other income.

(6)

Gain on asset disposal and included in Other income.

(7)

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	2023			2022
Net income as reported	$	545,248		$	472,224
Plus: Interest expense (after-tax)		38,050			23,276
Less: Interest income (after-tax)		5,033			1,202
Net operating profit after taxes	$	578,265		$	494,298
Special items:
Rationalization and asset impairment charges		(11,314)			11,788
Acquisition transaction costs		—			6,003
Pension settlement net charges		845			(4,273)
Amortization of step up in value of acquired inventories		12,252			1,106
Gain on asset disposal		(1,646)			—
Tax effect of Special items ⁽²⁾		2,537			(1,192)
Adjusted net operating profit after taxes ⁽¹⁾	$	580,939		$	507,730

Invested Capital	December 31, 2023			December 31, 2022
Short-term debt	$	2,439		$	93,483
Long-term debt, less current portion		1,102,771			1,110,396
Total debt		1,105,210			1,203,879
Total equity		1,308,852			1,034,041
Invested capital	$	2,414,062		$	2,237,920

Return on invested capital as reported		24.0	%		22.1	%
Adjusted return on invested capital⁽¹⁾		24.1	%		22.7	%

(1)

Adjusted net operating profit after taxes and adjusted ROIC 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.

Lincoln Electric Holdings, Inc.

Financial Highlights

(In thousands, except per share amounts)

(Unaudited)

Condensed Consolidated Statements of Cash Flows


	Three Months Ended December 31,
	2023		2022
OPERATING ACTIVITIES:
Net income	$	156,644	$	109,146
Adjustments to reconcile Net income to Net cash provided by operating activities:
Rationalization and asset impairment net charges		3,651		324
Depreciation and amortization		21,969		19,050
Gain on sale of property		(36,187)		—
Other non-cash items, net		(33,586)		(13,624)
Changes in operating assets and liabilities, net of effects from acquisitions:
Decrease (increase) in accounts receivable		8,285		(441)
Decrease in inventories		64,313		54,390
(Decrease) in trade accounts payable		(7,356)		(2,720)
Net change in other current assets and liabilities		(68,798)		(58,966)
Net change in other long-term assets and liabilities		12,727		4,644
NET CASH PROVIDED BY OPERATING ACTIVITIES		121,662		111,803

INVESTING ACTIVITIES:
Capital expenditures		(24,528)		(19,582)
Acquisition of businesses, net of cash acquired		—		(414,004)
Proceeds from sale of property, plant and equipment		44,898		994
Other investing activities		6,010		159
NET CASH PROVIDED BY (USED BY) INVESTING ACTIVITIES		26,380		(432,433)

FINANCING ACTIVITIES:
(Payments on) proceeds from short-term borrowings		(5,057)		24,955
(Payments on) proceeds from long-term borrowings		(112)		399,843
Proceeds from exercise of stock options		9,068		4,217
Purchase of shares for treasury		(68,176)		(25,077)
Cash dividends paid to shareholders		(36,733)		(32,347)
Other financing activities		—		(441)
NET CASH (USED BY) PROVIDED BY FINANCING ACTIVITIES		(101,010)		371,150

Effect of exchange rate changes on Cash and cash equivalents		4,088		5,323
INCREASE IN CASH AND CASH EQUIVALENTS		51,120		55,843
Cash and cash equivalents at beginning of period		342,667		141,307
Cash and cash equivalents at end of period	$	393,787	$	197,150

Cash dividends paid per share	$	0.64	$	0.56

Lincoln Electric Holdings, Inc.

Financial Highlights

(In thousands, except per share amounts)

(Unaudited)

Condensed Consolidated Statements of Cash Flows


	Year Ended December 31,
	2023		2022
OPERATING ACTIVITIES:
Net income	$	545,248	$	472,224
Adjustments to reconcile Net income to Net cash provided by operating activities:
Rationalization and asset impairment net charges		4,779		8,100
Depreciation and amortization		86,670		78,059
Gain on sale of property		(36,187)		—
Other non-cash items, net		(12,159)		(10,958)
Changes in operating assets and liabilities, net of effects from acquisitions:
Decrease (increase) in accounts receivable		14,980		(65,010)
Decrease (increase) in inventories		122,094		(81,188)
(Decrease) increase in trade accounts payable		(32,028)		16,852
Net change in other current assets and liabilities		(25,552)		(26,496)
Net change in other long-term assets and liabilities		(303)		(8,197)
NET CASH PROVIDED BY OPERATING ACTIVITIES		667,542		383,386

INVESTING ACTIVITIES:
Capital expenditures		(90,987)		(71,883)
Acquisition of businesses, net of cash acquired		(32,685)		(436,298)
Proceeds from sale of property, plant and equipment		49,494		3,331
Other investing activities		(551)		159
NET CASH USED BY INVESTING ACTIVITIES		(74,729)		(504,691)

FINANCING ACTIVITIES:
(Payments on) proceeds from short-term borrowings		(79,873)		34,351
(Payments on) proceeds from long-term borrowings		(8,109)		405,444
Proceeds from exercise of stock options		22,365		6,385
Purchase of shares for treasury		(198,765)		(181,293)
Cash dividends paid to shareholders		(148,010)		(130,724)
Other financing activities		—		(438)
NET CASH (USED BY) PROVIDED BY FINANCING ACTIVITIES		(412,392)		133,725

Effect of exchange rate changes on Cash and cash equivalents		16,216		(8,228)
INCREASE IN CASH AND CASH EQUIVALENTS		196,637		4,192
Cash and cash equivalents at beginning of period		197,150		192,958
Cash and cash equivalents at end of period	$	393,787	$	197,150

Cash dividends paid per share	$	2.56	$	2.24

Lincoln Electric Holdings, Inc.

Segment Highlights

(In thousands)

(Unaudited)


	Americas			International			The Harris			Corporate /
	Welding			Welding			Products Group			Eliminations		Consolidated
Three months ended December 31, 2023
Net sales	$	654,707		$	292,177		$	111,630		$	—	$	1,058,514
Inter-segment sales		35,493			11,557			2,578			(49,628)		—
Total sales	$	690,200		$	303,734		$	114,208		$	(49,628)	$	1,058,514

Net income												$	156,644
As a percent of total sales													14.8	%

EBIT⁽¹⁾	$	129,409		$	64,035		$	15,246		$	(2,997)	$	205,693
As a percent of total sales		18.7	%		21.1	%		13.3	%				19.4	%
Special items charges (gain) ⁽³⁾		60			(21,147)			—			—		(21,087)
Adjusted EBIT ⁽²⁾	$	129,469		$	42,888		$	15,246		$	(2,997)	$	184,606
As a percent of total sales		18.8	%		14.1	%		13.3	%				17.4	%

Three months ended December 31, 2022
Net sales	$	573,592		$	243,114		$	114,228		$	—	$	930,934
Inter-segment sales		29,479			5,754			2,470			(37,703)		—
Total sales	$	603,071		$	248,868		$	116,698		$	(37,703)	$	930,934

Net income												$	109,146
As a percent of total sales													11.7	%

EBIT ⁽¹⁾	$	113,813		$	21,020		$	12,056		$	(2,498)	$	144,391
As a percent of total sales		18.9	%		8.4	%		10.3	%				15.5	%
Special items charges ⁽⁴⁾		567			1,816			—			2,935		5,318
Adjusted EBIT ⁽²⁾	$	114,380		$	22,836		$	12,056		$	437	$	149,709
As a percent of total sales		19.0	%		9.2	%		10.3	%				16.1	%

(1)

EBIT is defined as Operating income plus Other income.

(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 2023 primarily reflect a net gain of $21,992 related to the sale of a property, partially offset by rationalization and asset impairment charges, and pension settlement charges of $845 in International Welding.

(4)

Special items in 2022 primarily reflect Rationalization and asset impairment charges of $1,816 and $567 in International Welding and Americas Welding, respectively, and acquisition transaction costs of $2,935 in Corporate/Eliminations.

Lincoln Electric Holdings, Inc.

Segment Highlights

(In thousands)

(Unaudited)


	Americas			International			The Harris			Corporate /
	Welding			Welding			Products Group			Eliminations		Consolidated
Year ended December 31, 2023
Net sales	$	2,655,546		$	1,040,006		$	496,084		$	—	$	4,191,636
Inter-segment sales		127,536			31,498			10,641			(169,675)		—
Total sales	$	2,783,082		$	1,071,504		$	506,725		$	(169,675)	$	4,191,636

Net income												$	545,248
As a percent of total sales													13.0	%

EBIT ⁽¹⁾	$	528,411		$	146,218		$	74,144		$	(17,536)	$	731,237
As a percent of total sales		19.0	%		13.6	%		14.6	%				17.4	%
Special items charges (gain) ⁽³⁾		9,858			(9,721)			—			—		137
Adjusted EBIT ⁽²⁾	$	538,269		$	136,497		$	74,144		$	(17,536)	$	731,374
As a percent of total sales		19.3	%		12.7	%		14.6	%				17.4	%

Year ended December 31, 2022
Net sales	$	2,288,934		$	954,281		$	517,996		$	—	$	3,761,211
Inter-segment sales		122,019			31,503			11,040			(164,562)		—
Total sales	$	2,410,953		$	985,784		$	529,036		$	(164,562)	$	3,761,211

Net income												$	472,224
As a percent of total sales													12.6	%

EBIT ⁽¹⁾	$	465,879		$	108,476		$	64,008		$	(16,036)	$	622,327
As a percent of total sales		19.3	%		11.0	%		12.1	%				16.5	%
Special items (gain) charges ⁽⁴⁾		(3,060)			11,681			—			6,003		14,624
Adjusted EBIT ⁽²⁾	$	462,819		$	120,157		$	64,008		$	(10,033)	$	636,951
As a percent of total sales		19.2	%		12.2	%		12.1	%				16.9	%

(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 2023 primarily reflect amortization of step up in value of acquired inventories of $9,390 and $2,862 in Americas and International Welding, respectively, Rationalization and asset impairment net charges of $468 and net gains of $11,782 in Americas and International Welding, respectively, pension settlement charges of $845 in International Welding and gain on asset disposal of $1,646 in International Welding.

(4)

Special items in 2022 primarily reflect amortization of step up in value of acquired inventories of $1,106 in Americas Welding, acquisition transaction costs of $6,003 in Corporate/Eliminations and a $3,735 net gain related to the final settlement associated with the termination of a pension plan in Americas Welding. Special items in 2022 also include Rationalization and asset impairment charges of $11,681 in International Welding and net gains of $431 in Americas Welding.

Lincoln Electric Holdings, Inc.

Change in Net Sales by Segment

(In thousands)

(Unaudited)

Three Months Ended December 31^st Change in Net Sales by Segment


			Change in Net Sales due to:
	Net Sales											Foreign			Net Sales
	2022		Volume			Acquisitions			Price			Exchange			2023
Operating Segments
Americas Welding	$	573,592	$	14,754		$	61,138		$	2,964		$	2,259		$	654,707
International Welding		243,114		11,874			30,149			(1,654)			8,694			292,177
The Harris Products Group		114,228		(7,904)			—			4,126			1,180			111,630
Consolidated	$	930,934	$	18,724		$	91,287		$	5,436		$	12,133		$	1,058,514

% Change
Americas Welding				2.6	%		10.7	%		0.5	%		0.4	%		14.1	%
International Welding				4.9	%		12.4	%		(0.7)	%		3.6	%		20.2	%
The Harris Products Group				(6.9)	%		—			3.6	%		1.0	%		(2.3)	%
Consolidated				2.0	%		9.8	%		0.6	%		1.3	%		13.7	%

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


			Change in Net Sales due to:
	Net Sales											Foreign			Net Sales
	2022		Volume			Acquisitions			Price			Exchange			2023
Operating Segments
Americas Welding	$	2,288,934	$	109,860		$	222,493		$	37,125		$	(2,866)		$	2,655,546
International Welding		954,281		12,519			54,078			14,691			4,437			1,040,006
The Harris Products Group		517,996		(36,693)			—			12,330			2,451			496,084
Consolidated	$	3,761,211	$	85,686		$	276,571		$	64,146		$	4,022		$	4,191,636

% Change
Americas Welding				4.8	%		9.7	%		1.6	%		(0.1)	%		16.0	%
International Welding				1.3	%		5.7	%		1.5	%		0.5	%		9.0	%
The Harris Products Group				(7.1)	%		—			2.4	%		0.5	%		(4.2)	%
Consolidated				2.3	%		7.4	%		1.7	%		0.1	%		11.4	%

Document and Entity Information	Feb. 15, 2024
Document and Entity Information
Document Type	8-K
Document Period End Date	Feb. 15, 2024
Entity File Number	0-1402
Entity Registrant Name	LINCOLN ELECTRIC HOLDINGS, INC
Entity Incorporation, State or Country Code	OH
Entity Tax Identification Number	34-1860551
Entity Address, Address Line One	22801 St. Clair Avenue
Entity Address, State or Province	OH
Entity Address, City or Town	Cleveland
Entity Address, Postal Zip Code	44117
City Area Code	216
Local Phone Number	481-8100
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Shares, without par value
Trading Symbol	LECO
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Central Index Key	0000059527
Amendment Flag	false