Lincoln Electric Announces New Organizational and Segment Reporting Structure
09 February 2016 - 11:30PM
Lincoln Electric Holdings Inc., (“Lincoln Electric,” the “Company”)
(Nasdaq:LECO) today announced that it has realigned its
organizational and leadership structure to drive greater
operational efficiency and further support the Company’s 2020
vision and growth strategy.
Lincoln Electric has combined its North America Welding and
South America Welding businesses into “Americas Welding.” This
segment will be led by George Blankenship in the newly created
position of Executive Vice President and President, Americas
Welding. Additionally, the Europe Welding and Asia Pacific
Welding businesses will be combined into “International Welding,”
and will be led by Mathias Hallmann, in the newly created position
of Senior Vice President and President, International Welding. The
Company will continue to operate and report The Harris Products
Group business separately, which includes the Company’s global
cutting, soldering and brazing businesses, as well as retail
channel distribution in the United States.
“We believe our new welding organizational structure will
improve efficiencies by further integrating operational and product
development processes across regions to better serve customer
needs,” said Christopher L. Mapes, Lincoln Electric’s Chairman,
President and Chief Executive Officer. “This structure also
leverages the functional and technical strength of our core teams
in developing markets, which will help accelerate profitable growth
in advanced applications as part of our 2020 growth strategy.”
The reclassification of historical results into the three new
reportable segments for previously reported periods for 2013, 2014
and the 2015 first, second and third quarters are attached and can
also be obtained on our Investor Relations website at
http://ir.lincolnelectric.com. The Company did not operate under
the realigned segment structure for any of these prior periods and
will begin to report comparative results under the new structure
effective with the filing of its Quarterly Report on Form 10-Q for
the period ended March 31, 2016.
About Lincoln Electric
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 47 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 and its products and services, visit the Company’s website
at www.lincolnelectric.com.
GAAP Information
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 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.
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 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, including in highly inflationary countries such as
Venezuela; adverse outcome of pending or potential litigation;
actual costs of the Company’s rationalization plans; possible
acquisitions; market risks and price fluctuations related to the
purchase of commodities and energy; global regulatory complexity;
and the possible effects of events beyond our control, such as
political unrest, acts of terror and natural disasters, 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,
2014.
Lincoln Electric Holdings, Inc. |
Segment Highlights |
(In thousands) (Unaudited) |
|
|
|
Americas Welding |
|
International Welding |
|
The Harris Products Group |
|
Corporate / Eliminations |
|
Consolidated |
Three months ended September 30, 2015 |
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
454,172 |
|
|
$ |
128,072 |
|
|
$ |
62,922 |
|
|
$ |
— |
|
|
$ |
645,166 |
|
Inter-segment
sales |
|
25,571 |
|
|
5,400 |
|
|
2,307 |
|
|
(33,278 |
) |
|
— |
|
Total |
|
$ |
479,743 |
|
|
$ |
133,472 |
|
|
$ |
65,229 |
|
|
$ |
(33,278 |
) |
|
$ |
645,166 |
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1) |
|
$ |
(83,413 |
) |
|
$ |
(5,676 |
) |
|
$ |
6,422 |
|
|
$ |
(748 |
) |
|
$ |
(83,415 |
) |
As a percent of total sales |
|
(17.4 |
%) |
|
(4.3 |
%) |
|
9.8 |
% |
|
|
|
(12.9 |
%) |
Special items charge
(2) |
|
$ |
166,178 |
|
|
$ |
14,944 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
181,122 |
|
EBIT, as adjusted
(3) |
|
$ |
82,765 |
|
|
$ |
9,268 |
|
|
$ |
6,422 |
|
|
$ |
(748 |
) |
|
$ |
97,707 |
|
As a percent of total sales |
|
17.3 |
% |
|
6.9 |
% |
|
9.8 |
% |
|
|
|
15.1 |
% |
Three months ended June 30, 2015 |
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
451,001 |
|
|
$ |
141,927 |
|
|
$ |
71,812 |
|
|
$ |
— |
|
|
$ |
664,740 |
|
Inter-segment
sales |
|
23,902 |
|
|
5,311 |
|
|
2,716 |
|
|
(31,929 |
) |
|
— |
|
Total |
|
$ |
474,903 |
|
|
$ |
147,238 |
|
|
$ |
74,528 |
|
|
$ |
(31,929 |
) |
|
$ |
664,740 |
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1) |
|
$ |
79,421 |
|
|
$ |
9,778 |
|
|
$ |
8,250 |
|
|
$ |
634 |
|
|
$ |
98,083 |
|
As a percent of total sales |
|
16.7 |
% |
|
6.6 |
% |
|
11.1 |
% |
|
|
|
14.8 |
% |
Special items charge
(2) |
|
$ |
— |
|
|
$ |
1,239 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,239 |
|
EBIT, as adjusted
(3) |
|
$ |
79,421 |
|
|
$ |
11,017 |
|
|
$ |
8,250 |
|
|
$ |
634 |
|
|
$ |
99,322 |
|
As a percent of total sales |
|
16.7 |
% |
|
7.5 |
% |
|
11.1 |
% |
|
|
|
14.9 |
% |
Three months ended March 31, 2015 |
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
448,837 |
|
|
$ |
139,247 |
|
|
$ |
69,816 |
|
|
$ |
— |
|
|
$ |
657,900 |
|
Inter-segment
sales |
|
23,023 |
|
|
5,027 |
|
|
2,011 |
|
|
(30,061 |
) |
|
— |
|
Total |
|
$ |
471,860 |
|
|
$ |
144,274 |
|
|
$ |
71,827 |
|
|
$ |
(30,061 |
) |
|
$ |
657,900 |
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1) |
|
$ |
75,415 |
|
|
$ |
10,934 |
|
|
$ |
7,549 |
|
|
$ |
60 |
|
|
$ |
93,958 |
|
As a percent of total sales |
|
16.0 |
% |
|
7.6 |
% |
|
10.5 |
% |
|
|
|
14.3 |
% |
Special items
charge |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
EBIT, as adjusted
(3) |
|
$ |
75,415 |
|
|
$ |
10,934 |
|
|
$ |
7,549 |
|
|
$ |
60 |
|
|
$ |
93,958 |
|
As a percent of total sales |
|
16.0 |
% |
|
7.6 |
% |
|
10.5 |
% |
|
|
|
14.3 |
% |
Nine months ended September 30, 2015 |
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
1,354,010 |
|
|
$ |
409,246 |
|
|
$ |
204,550 |
|
|
$ |
— |
|
|
$ |
1,967,806 |
|
Inter-segment
sales |
|
72,496 |
|
|
15,738 |
|
|
7,034 |
|
|
(95,268 |
) |
|
— |
|
Total |
|
$ |
1,426,506 |
|
|
$ |
424,984 |
|
|
$ |
211,584 |
|
|
$ |
(95,268 |
) |
|
$ |
1,967,806 |
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1) |
|
$ |
71,423 |
|
|
$ |
15,036 |
|
|
$ |
22,221 |
|
|
$ |
(54 |
) |
|
$ |
108,626 |
|
As a percent of total sales |
|
5.0 |
% |
|
3.5 |
% |
|
10.5 |
% |
|
|
|
5.5 |
% |
Special items charge
(2) |
|
$ |
166,178 |
|
|
$ |
16,183 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
182,361 |
|
EBIT, as adjusted
(3) |
|
$ |
237,601 |
|
|
$ |
31,219 |
|
|
$ |
22,221 |
|
|
$ |
(54 |
) |
|
$ |
290,987 |
|
As a percent of total sales |
|
16.7 |
% |
|
7.3 |
% |
|
10.5 |
% |
|
|
|
14.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) EBIT
is defined as Operating income plus Equity earnings in affiliates
and Other income. |
(2)
Special items in indicated periods include rationalization charges
related to employee severance and other related costs.
Special items in the three and nine months ended September 30, 2015
also include charges related to pension settlements, charges
related to the impairment of long-lived assets and goodwill and
charges related to Venezuelan remeasurement losses upon the
adoption of a new foreign exchange mechanism. |
(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. |
Lincoln Electric Holdings, Inc. |
Segment Highlights |
(In thousands) (Unaudited) |
|
|
|
Americas Welding |
|
International Welding |
|
The Harris Products Group |
|
Corporate / Eliminations |
|
Consolidated |
Three months ended December 31, 2014 |
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
460,907 |
|
|
$ |
157,090 |
|
|
$ |
65,957 |
|
|
$ |
— |
|
|
$ |
683,954 |
|
Inter-segment
sales |
|
26,074 |
|
|
4,825 |
|
|
1,821 |
|
|
(32,720 |
) |
|
— |
|
Total |
|
$ |
486,981 |
|
|
$ |
161,915 |
|
|
$ |
67,778 |
|
|
$ |
(32,720 |
) |
|
$ |
683,954 |
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1) |
|
$ |
89,600 |
|
|
$ |
10,183 |
|
|
$ |
6,380 |
|
|
$ |
649 |
|
|
$ |
106,812 |
|
As a percent of total sales |
|
18.4 |
% |
|
6.3 |
% |
|
9.4 |
% |
|
|
|
15.6 |
% |
Special items charge
(2) |
|
$ |
— |
|
|
$ |
166 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
166 |
|
EBIT, as adjusted
(4) |
|
$ |
89,600 |
|
|
$ |
10,349 |
|
|
$ |
6,380 |
|
|
$ |
649 |
|
|
$ |
106,978 |
|
As a percent of total sales |
|
18.4 |
% |
|
6.4 |
% |
|
9.4 |
% |
|
|
|
15.6 |
% |
Three months ended September 30, 2014 |
|
|
|
|
|
|
|
|
Net sales |
|
$ |
469,390 |
|
|
$ |
168,004 |
|
|
$ |
78,383 |
|
|
$ |
— |
|
|
$ |
715,777 |
|
Inter-segment
sales |
|
27,244 |
|
|
4,715 |
|
|
2,009 |
|
|
(33,968 |
) |
|
— |
|
Total |
|
$ |
496,634 |
|
|
$ |
172,719 |
|
|
$ |
80,392 |
|
|
$ |
(33,968 |
) |
|
$ |
715,777 |
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1) |
|
$ |
83,444 |
|
|
$ |
(13,757 |
) |
|
$ |
8,947 |
|
|
$ |
(302 |
) |
|
$ |
78,332 |
|
As a percent of total sales |
|
16.8 |
% |
|
(8.0 |
%) |
|
11.1 |
% |
|
|
|
10.9 |
% |
Special items charge
(2) |
|
$ |
582 |
|
|
$ |
28,486 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
29,068 |
|
EBIT, as adjusted
(4) |
|
$ |
84,026 |
|
|
$ |
14,729 |
|
|
$ |
8,947 |
|
|
$ |
(302 |
) |
|
$ |
107,400 |
|
As a percent of total sales |
|
16.9 |
% |
|
8.5 |
% |
|
11.1 |
% |
|
|
|
15.0 |
% |
Three months ended June 30, 2014 |
|
|
|
|
|
|
|
|
Net sales |
|
$ |
465,524 |
|
|
$ |
185,588 |
|
|
$ |
77,419 |
|
|
$ |
— |
|
|
$ |
728,531 |
|
Inter-segment
sales |
|
28,989 |
|
|
6,080 |
|
|
2,262 |
|
|
(37,331 |
) |
|
— |
|
Total |
|
$ |
494,513 |
|
|
$ |
191,668 |
|
|
$ |
79,681 |
|
|
$ |
(37,331 |
) |
|
$ |
728,531 |
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1) |
|
$ |
92,494 |
|
|
$ |
14,471 |
|
|
$ |
7,178 |
|
|
$ |
785 |
|
|
$ |
114,928 |
|
As a percent of total sales |
|
18.7 |
% |
|
7.6 |
% |
|
9.0 |
% |
|
|
|
15.8 |
% |
Special items charge
(3) |
|
$ |
3,447 |
|
|
$ |
857 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,304 |
|
EBIT, as adjusted
(4) |
|
$ |
95,941 |
|
|
$ |
15,328 |
|
|
$ |
7,178 |
|
|
$ |
785 |
|
|
$ |
119,232 |
|
As a percent of total sales |
|
19.4 |
% |
|
8.0 |
% |
|
9.0 |
% |
|
|
|
16.4 |
% |
Three months
ended March 31, 2014 |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
441,849 |
|
|
$ |
170,742 |
|
|
$ |
72,471 |
|
|
$ |
— |
|
|
$ |
685,062 |
|
Inter-segment
sales |
|
28,217 |
|
|
5,988 |
|
|
2,118 |
|
|
(36,323 |
) |
|
— |
|
Total |
|
$ |
470,066 |
|
|
$ |
176,730 |
|
|
$ |
74,589 |
|
|
$ |
(36,323 |
) |
|
$ |
685,062 |
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1) |
|
$ |
66,070 |
|
|
$ |
8,284 |
|
|
$ |
6,058 |
|
|
$ |
2,670 |
|
|
$ |
83,082 |
|
As a percent of total sales |
|
14.1 |
% |
|
4.7 |
% |
|
8.1 |
% |
|
|
|
12.1 |
% |
Special items charge
(3) |
|
$ |
17,618 |
|
|
$ |
30 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
17,648 |
|
EBIT, as adjusted
(4) |
|
$ |
83,688 |
|
|
$ |
8,314 |
|
|
$ |
6,058 |
|
|
$ |
2,670 |
|
|
$ |
100,730 |
|
As a percent of total sales |
|
17.8 |
% |
|
4.7 |
% |
|
8.1 |
% |
|
|
|
14.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) EBIT
is defined as Operating income plus Equity earnings in affiliates
and Other income. |
(2)
Special items in the three months ended December 31, 2014 and
September 30, 2014 represent net asset impairment charges.
Special items in the three months ended September 30, 2014 also
includes net rationalization charges and a gain on sale of real
estate. |
(3)
Special items in the three months ended June 30, 2014 and March 30,
2014 include net rationalization charges partially offset by gains
related to the sale of assets at rationalized operations and the
impact of Venezuelan remeasurement losses related to the adoption
of a new foreign exchange mechanism. |
(4) 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. |
Lincoln Electric Holdings, Inc. |
Segment Highlights |
(In thousands) |
(Unaudited) |
|
|
|
Americas Welding |
|
International Welding |
|
The Harris Products Group |
|
Corporate / Eliminations |
|
Consolidated |
Twelve months
ended December 31, 2014 |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
1,837,670 |
|
|
$ |
681,424 |
|
|
$ |
294,230 |
|
|
|
|
$ |
2,813,324 |
|
Inter-segment
sales |
|
110,524 |
|
|
21,608 |
|
|
8,210 |
|
|
(140,342 |
) |
|
— |
|
Total |
|
$ |
1,948,194 |
|
|
$ |
703,032 |
|
|
$ |
302,440 |
|
|
$ |
(140,342 |
) |
|
$ |
2,813,324 |
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1) |
|
$ |
331,608 |
|
|
$ |
19,181 |
|
|
$ |
28,563 |
|
|
$ |
3,802 |
|
|
$ |
383,154 |
|
As a percent of total sales |
|
17.0 |
% |
|
2.7 |
% |
|
9.4 |
% |
|
|
|
13.6 |
% |
Special items charge
(2) |
|
$ |
21,647 |
|
|
$ |
29,539 |
|
|
$ |
— |
|
|
|
|
$ |
51,186 |
|
EBIT, as adjusted
(3) |
|
$ |
353,255 |
|
|
$ |
48,720 |
|
|
$ |
28,563 |
|
|
$ |
3,802 |
|
|
$ |
434,340 |
|
As a percent of total sales |
|
18.1 |
% |
|
6.9 |
% |
|
9.4 |
% |
|
|
|
15.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) EBIT
is defined as Operating income plus Equity earnings in affiliates
and Other income. |
(2)
Special items in the twelve months ended December 31, 2014 include
net rationalization and asset impairment charges partially offset
by the gain on sale of real estate. Special items in the
twelve months ended December 31, 2014 also include the impact of
Venezuelan remeasurement losses related to the adoption of a new
foreign exchange mechanism. |
(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. |
|
|
Americas Welding |
|
International Welding |
|
The Harris Products Group |
|
Corporate / Eliminations |
|
Consolidated |
Twelve months
ended December 31, 2013 |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
1,848,663 |
|
|
$ |
695,831 |
|
|
$ |
308,177 |
|
|
$ |
— |
|
|
$ |
2,852,671 |
|
Inter-segment
sales |
|
105,811 |
|
|
22,668 |
|
|
9,605 |
|
|
(138,084 |
) |
|
— |
|
Total |
|
$ |
1,954,474 |
|
|
$ |
718,499 |
|
|
$ |
317,782 |
|
|
$ |
(138,084 |
) |
|
$ |
2,852,671 |
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (1) |
|
$ |
364,186 |
|
|
$ |
29,921 |
|
|
$ |
27,826 |
|
|
$ |
(5,948 |
) |
|
$ |
415,985 |
|
As a percent of total sales |
|
18.6 |
% |
|
4.2 |
% |
|
8.8 |
% |
|
|
|
14.6 |
% |
Special items charge
(2) |
|
$ |
13,250 |
|
|
$ |
8,116 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
21,366 |
|
EBIT, as adjusted
(3) |
|
$ |
377,436 |
|
|
$ |
38,037 |
|
|
$ |
27,826 |
|
|
$ |
(5,948 |
) |
|
$ |
437,351 |
|
As a percent of total sales |
|
19.3 |
% |
|
5.3 |
% |
|
8.8 |
% |
|
|
|
15.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) EBIT
is defined as Operating income plus Equity earnings in affiliates
and Other income. |
(2)
Special items in the twelve months ended December 31, 2013 include
net rationalization and asset impairment charges, a loss on the
sale of land and the impact of 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. |
Contact
Amanda Butler
Director, Investor Relations
Tel: 216.383.2534
Email: Amanda_Butler@lincolnelectric.com
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