Lincoln Electric Reports First Quarter 2025 Results

About this update from Lincoln Electric Holdings, Inc.

First Quarter 2025 Highlights Net sales of $1,004 million Operating income margin of 16.4%; Adjusted operating income margin of 16.9% EPS of $2.10 ; Adjusted EPS of $2.16 Record first quarter cash flows from operations of $186 million and 130% cash conversion Returned $150 million to shareholders through dividends and share repurchases CLEVELAND --(BUSINESS WIRE)-- Lincoln Electric Holdings, Inc. (the “Company”) (Nasdaq: LECO) today reported first quarter 2025 net income of $118.5 million , or diluted earnings per share (EPS) of $2.10 , which included special item after-tax net charges of $3.4 million , or $0.06 EPS. This compares with prior year period net income of $123.4 million , or $2.14 EPS, which included special item after-tax net charges of $5.2 million , or $0.09 EPS. Excluding special items, first quarter 2025 adjusted net income was $121.9 million , or $2.16 adjusted EPS. This compares with adjusted net income of $128.7 million , or $2.23 adjusted EPS, in the prior year period. First quarter 2025 sales increased 2.4% to $1,004.4 million reflecting a 4.9% benefit from acquisitions, partially offset by a 1.2% decrease in organic sales and 1.3% unfavorable foreign exchange. Operating income for the first quarter 2025 was $164.9 million , or 16.4% of sales, as compared with operating income of $165 million , or 16.8% of sales, in the prior year period. Excluding special items, adjusted operating income was $169.4 million , or 16.9% of sales, as compared with $171.4 million , or 17.5% of sales, in the prior year period. “We continued to execute well in the quarter with solid core operating results,” said Steven B. Hedlund , Chair, President and Chief Executive Officer. “We are continuing to invest in the business and are focused on integrating our acquisitions to expand growth and margin performance, while diligently managing costs and maintaining a cautious posture during this portion of the cycle.” Hedlund concluded, “Our action plans, strong balance sheet and record cash flow generation position us well to navigate this dynamic period and continue to generate long-term value for our shareholders.” Webcast Information A conference call to discuss first quarter 2025 financial results will be webcast live today, April 30, 2025 , 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 20 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; the effectiveness of information systems and cybersecurity programs; presence of artificial intelligence technologies; 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; the Company’s ability to complete 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, including but not limited to, the ongoing conflicts between Russia and Ukraine and in the Middle East , 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, 2024 . Lincoln Electric Holdings, Inc. Financial Highlights (In thousands, except per share amounts) (Unaudited) Consolidated Statements of Income Fav (Unfav) to Three Months Ended March 31 , Prior Year 2025 % of Sales 2024 % of Sales $ % Net sales $ 1,004,388 100.0 % $ 981,197 100.0 % $ 23,191 2.4 % Cost of goods sold 638,940 63.6 % 612,798 62.5 % (26,142 ) (4.3 )% Gross profit 365,448 36.4 % 368,399 37.5 % (2,951 ) (0.8 )% Selling, general & administrative expenses 196,665 19.6 % 198,747 20.3 % 2,082 1.0 % Rationalization and asset impairment charges 3,865 0.4 % 4,605 0.5 % 740 16.1 % Operating income 164,918 16.4 % 165,047 16.8 % (129 ) (0.1 )% Interest expense, net 12,127 1.2 % 8,779 0.9 % (3,348 ) (38.1 )% Other income 444 — % 2,262 0.2 % (1,818 ) (80.4 )% Income before income taxes 153,235 15.3 % 158,530 16.2 % (5,295 ) (3.3 )% Income taxes 34,748 3.5 % 35,115 3.6 % 367 1.0 % Effective tax rate 22.7 % 22.2 % (0.5 )% Net income $ 118,487 11.8 % $ 123,415 12.6 % $ (4,928 ) (4.0 )% Basic earnings per share $ 2.11 $ 2.17 $ (0.06 ) (2.8 )% Diluted earnings per share $ 2.10 $ 2.14 $ (0.04 ) (1.9 )% Weighted average shares (basic) 56,058 56,865 Weighted average shares (diluted) 56,527 57,641 Lincoln Electric Holdings, Inc. Financial Highlights (In thousands) (Unaudited) Balance Sheet Highlights Selected Consolidated Balance Sheet Data March 31, 2025 December 31, 2024 Cash and cash equivalents $ 394,705 $ 377,262 Accounts receivable, net 522,721 481,979 Inventories 574,329 544,037 Total current assets 1,729,627 1,645,281 Property, plant and equipment, net 636,158 619,181 Total assets 3,625,074 3,520,142 Trade accounts payable 365,267 296,590 Total current liabilities (1) 969,854 878,802 Long-term debt, less current portion 1,150,473 1,150,551 Total equity 1,340,170 1,327,433 Operating Working Capital March 31, 2025 December 31, 2024 Average operating working capital to Net sales (2) 17.8 % 16.9 % Invested Capital March 31, 2025 December 31, 2024 Short-term debt (1) $ 109,620 $ 110,524 Long-term debt, less current portion 1,150,473 1,150,551 Total debt 1,260,093 1,261,075 Total equity 1,340,170 1,327,433 Invested capital $ 2,600,263 $ 2,588,508 Total debt / invested capital 48.5 % 48.7 % (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 March 31 , 2025 2024 Operating income as reported $ 164,918 $ 165,047 Special items (pre-tax): Rationalization and asset impairment charges (2) 3,865 4,605 Acquisition transaction costs (3) 802 1,762 Amortization of step up in value of acquired inventories (4) (140 ) — Adjusted operating income (1) $ 169,445 $ 171,414 As a percent of net sales 16.9 % 17.5 % Net income as reported $ 118,487 $ 123,415 Special items: Rationalization and asset impairment charges (2) 3,865 4,605 Acquisition transaction costs (3) 802 1,762 Amortization of step up in value of acquired inventories (4) (140 ) — Tax effect of Special items (5) (1,158 ) (1,126 ) Adjusted net income (1) 121,856 128,656 Interest expense, net 12,127 8,779 Income taxes as reported 34,748 35,115 Tax effect of Special items (5) 1,158 1,126 Adjusted EBIT (1) $ 169,889 $ 173,676 Effective tax rate as reported 22.7 % 22.2 % Net special item tax impact 0.1 % (0.2 )% Adjusted effective tax rate (1) 22.8 % 22.0 % Diluted earnings per share as reported $ 2.10 $ 2.14 Special items per share 0.06 0.09 Adjusted diluted earnings per share (1) $ 2.16 $ 2.23 Weighted average shares (diluted) 56,527 57,641 (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) 2025 charges primarily relate to rationalization plans initiated in Americas Welding and International Welding. 2024 charges primarily relate to rationalization plans initiated within International Welding and the Harris Products Group . (3) Transaction costs related to acquisitions which are included in Selling, general & administrative expenses. (4) Costs related to acquisitions which are included in Cost of goods sold. (5) 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 March 31 , Return on Invested Capital 2025 2024 Net income as reported $ 461,180 $ 546,733 Plus: Interest expense (after-tax) 41,450 36,519 Less: Interest income (after-tax) 6,868 6,793 Net operating profit after taxes $ 495,762 $ 576,459 Special Items: Rationalization and asset impairment charges 55,120 (7,586 ) Acquisition transaction costs 6,085 1,762 Pension settlement charges 3,792 845 Amortization of step up in value of acquired inventories 4,883 8,397 Loss on asset disposal 4,950 — Tax effect of Special items (2) (11,545 ) 2,228 Adjusted net operating profit after taxes (1) $ 559,047 $ 582,105 Invested Capital March 31, 2025 March 31, 2024 Short-term debt $ 109,620 $ 4,720 Long-term debt, less current portion 1,150,473 1,102,677 Total debt 1,260,093 1,107,397 Total equity 1,340,170 1,307,828 Invested capital $ 2,600,263 $ 2,415,225 Return on invested capital as reported 19.1 % 23.9 % Adjusted return on invested capital (1) 21.5 % 24.1 % (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. 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 March 31 , 2025 2024 OPERATING ACTIVITIES: Net income $ 118,487 $ 123,415 Adjustments to reconcile Net income to Net cash provided by operating activities: Rationalization and asset impairment net charges — 64 Depreciation and amortization 23,784 21,586 Other non-cash items, net 2,796 11,946 Changes in operating assets and liabilities, net of effects from acquisitions: Increase in accounts receivable (34,108 ) (9,603 ) Increase in inventories (20,167 ) (9,416 ) Decrease in other current assets 2,057 3,331 Increase in trade accounts payable 64,884 3,957 Increase (decrease) in other current liabilities 21,206 (8,121 ) Net change in other long-term assets and liabilities 6,754 (3,865 ) NET CASH PROVIDED BY OPERATING ACTIVITIES 185,693 133,294 INVESTING ACTIVITIES: Capital expenditures (26,949 ) (26,256 ) Proceeds from sale of property, plant and equipment 4,646 316 NET CASH USED BY INVESTING ACTIVITIES (22,303 ) (25,940 ) FINANCING ACTIVITIES: (Payments on) proceeds from short-term borrowings (904 ) 2,016 Payments on long-term borrowings (169 ) (169 ) Proceeds from exercise of stock options 6,254 24,438 Purchase of shares for treasury (106,694 ) (110,405 ) Cash dividends paid to shareholders (42,975 ) (41,280 ) NET CASH USED BY FINANCING ACTIVITIES (144,488 ) (125,400 ) Effect of exchange rate changes on Cash and cash equivalents (1,459 ) (763 ) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 17,443 (18,809 ) Cash and cash equivalents at beginning of period 377,262 393,787 Cash and cash equivalents at end of period $ 394,705 $ 374,978 Cash dividends paid per share $ 0.75 $ 0.71 Lincoln Electric Holdings, Inc. Segment Highlights (1) (In thousands) (Unaudited) Americas International The Harris Corporate / Welding Welding Products Group Eliminations Consolidated Three months ended March 31, 2025 Net sales $ 653,107 $ 219,061 $ 132,220 $ — $ 1,004,388 Inter-segment sales 30,372 6,832 3,984 (41,188 ) — Total sales $ 683,479 $ 225,893 $ 136,204 $ (41,188 ) $ 1,004,388 Net income $ 118,487 As a percent of total sales 11.8 % EBIT (1) $ 122,063 $ 21,600 $ 24,151 $ (2,452 ) $ 165,362 As a percent of total sales 17.9 % 9.6 % 17.7 % 16.5 % Special items charges (3) 2,135 1,412 178 802 4,527 Adjusted EBIT (2) $ 124,198 $ 23,012 $ 24,329 $ (1,650 ) $ 169,889 As a percent of total sales 18.2 % 10.2 % 17.9 % 16.9 % Three months ended March 31, 2024 Net sales $ 624,099 $ 235,761 $ 121,337 $ — $ 981,197 Inter-segment sales 29,978 8,408 3,093 (41,479 ) — Total sales $ 654,077 $ 244,169 $ 124,430 $ (41,479 ) $ 981,197 Net income $ 123,415 As a percent of total sales 12.6 % EBIT (1) $ 136,100 $ 24,707 $ 18,342 $ (11,840 ) $ 167,309 As a percent of total sales 20.8 % 10.1 % 14.7 % 17.1 % Special items charges (4) — 3,069 1,536 1,762 6,367 Adjusted EBIT (2) $ 136,100 $ 27,776 $ 19,878 $ (10,078 ) $ 173,676 As a percent of total sales 20.8 % 11.4 % 16.0 % 17.7 % (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 2025 primarily reflect Rationalization and asset impairments net charges of $2,135 in Americas Welding, $1,552 in International Welding and $178 in Harris Products Group , as well as acquisition transaction costs of $802 in Corporate/Eliminations. (4) Special items in 2024 primarily reflect rationalization and asset impairment charges of $3,069 and $1,536 in International Welding and the Harris Products Group , respectively, and acquisition transaction costs of $1,762 in Corporate/Eliminations. Lincoln Electric Holdings, Inc. Change in Net Sales by Segment (In thousands) (Unaudited) Three Months Ended March 31 st Change in Net Sales by Segment Change in Net Sales due to: Net Sales Foreign Net Sales 2024 Volume Price Acquisitions Exchange 2025 Operating Segments Americas Welding $ 624,099 $ (24,740 ) $ 13,369 $ 47,327 $ (6,948 ) $ 653,107 International Welding 235,761 (13,648 ) 828 815 (4,695 ) 219,061 The Harris Products Group 121,337 787 11,534 — (1,438 ) 132,220 Consolidated $ 981,197 $ (37,601 ) $ 25,731 $ 48,142 $ (13,081 ) $ 1,004,388 % Change Americas Welding (4.0 ) % 2.1 % 7.6 % (1.1 )% 4.6 % International Welding (5.8 ) % 0.4 % 0.3 % (2.0 )% (7.1 )% The Harris Products Group 0.6 % 9.5 % — (1.2 )% 9.0 % Consolidated (3.8 ) % 2.6 % 4.9 % (1.3 ) % 2.4 % View source version on businesswire.com : https://www.businesswire.com/news/home/20250430262474/en/ Amanda Butler Vice President, Investor Relations & Communications Tel: 216.383.2534 Email: [email protected] Source: Lincoln Electric Holdings, Inc.

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