Founded in 1895, now with over 12,000 employees, Lincoln Electric Holdings, Inc. (NASDAQ: LECO ) is the world's largest manufacturer of arc welding products. It manufactures in cells a line of arc welding equipment, with additional welding productsEquity strategist [Bernard Holdings]. Objective view on the directional bias of markets. Technical expertise bridges the complex relationships between value drivers, capital flows and price action. Partners are represented over the cross-section of financial marke ...

Financial Data and Key Metrics Changes - The company reported a 5% decline in third quarter sales to $984 million, primarily due to an 8.7% decrease in volumes, while pricing increased by 1% and acquisitions contributed 3% to sales [12][22] - Gross profit dollars decreased approximately 4% to $352 million, with a gross profit margin of 35.8%, which increased by 40 basis points compared to the prior year [12][22] - Adjusted operating income declined approximately 7% to $170 million, with an adjusted operating income margin of 17.3%, reflecting a 70 basis point benefit from incentive compensation adjustments [14][22] Business Line Data and Key Metrics Changes - Americas Welding sales decreased 4%, primarily due to an 8.6% decline in volumes, while price and acquisitions contributed approximately 5% to sales growth [17] - International Welding sales declined approximately 11% on 12% lower volumes, with a 9% adjusted EBIT margin reflecting the impact of lower volumes [18][19] - Harris Products Group saw a 4% increase in sales, driven by a 7% price increase, while volumes decreased by 3% [20] Market Data and Key Metrics Changes - The company experienced broad weakness across its customer base, particularly in heavy industries and automotive sectors, leading to a cautious posture among general industry customers [6][7] - OEM sales declined at double the rate of distribution channel sales, with distribution channel organic sales performance remaining steady year-over-year [7] - The company expects fourth quarter organic sales to decline in the high-single-digit percent range, reflecting continued market challenges [22] Company Strategy and Development Direction - The company is maintaining a balanced capital allocation strategy, investing in internal growth projects and acquisitions while returning $91 million in cash to shareholders [5][22] - Temporary and permanent cost savings actions are expected to generate $40 million to $50 million in annualized savings, with a focus on aligning the business to market conditions [8][9] - The company launched over 35 new products, the largest launch in five years, focusing on productivity and expanding presence in underpenetrated areas [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model and strategic initiatives, despite a challenging quarter, and expects to outperform in the next growth cycle [11][22] - The company anticipates continued pressure in the automotive sector, with delays in capital projects impacting automation portfolio sales into 2025 [7][32] - Management is focused on innovation and long-term profitable growth, while navigating current market conditions [9][10] Other Important Information - The company generated $199 million in cash flows from operations, resulting in a 134% cash conversion rate [21] - The effective tax rate for the third quarter was 23.6%, with an adjusted effective tax rate of 22.2% year-to-date [16][22] - The company announced its 29th consecutive annual dividend rate increase to $3 per share in 2025 [22] Q&A Session Summary Question: Can you provide details on October order rates across major product categories and markets? - Management expects fourth quarter organic sales to decline in the high single-digits, indicating a continuation of the dynamics seen in Q3 [25] Question: Can you clarify the split of cost actions specific to the automation strategy? - Management noted operational improvements in the automation business, tracking into the low teens on EBIT despite pressures from acquisitions [26] Question: How do you view price-cost neutrality heading into 2025? - The company aims to maintain a price-cost neutral posture, implementing pricing as inflationary trends arise [29] Question: What is the visibility for automation growth in the first half of next year? - Management indicated a low double-digit decline in automation organic sales, driven by delays in capital decision-making in the automotive sector [30] Question: How do you plan to navigate the challenges in the automotive sector? - The company remains confident in its long-term automation strategy and is focused on improving margin profiles while exploring acquisition opportunities [35] Question: Can you clarify the expected EBIT margin for the Americas segment? - The EBIT margin for the Americas segment is expected to be in the 18% to 19% range for the full year, with fourth quarter margins expected to reflect similar pressures as Q3 [42] Question: How is the company balancing inventory levels in a slowing market? - The company is ensuring sufficient inventory to meet customer demand while trimming working capital to free up cash [63] Question: Is there any concern about market share losses in the current environment? - Management does not see significant market share losses, attributing challenges more to the mix of business rather than broad losses [65]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to _____________ Commission File Number: 0-1402 LINCOLN ELECTRIC HOLDINGS, INC. (Exact name of registrant as specified in its charter ...

Core Insights - Lincoln Electric Holdings (LECO) reported revenue of $983.76 million for the quarter ended September 2024, a decrease of 4.8% year-over-year, with EPS at $2.14 compared to $2.40 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $970.1 million by 1.41%, while the EPS surpassed the consensus estimate of $2.05 by 4.39% [1] Revenue Performance - Net Sales for the Harris Products Group were $130.51 million, exceeding the average estimate of $124.76 million, reflecting a year-over-year increase of 3.6% [3] - Net Sales for International Welding were $216.22 million, slightly above the average estimate of $213.95 million, but down 10.7% year-over-year [3] - Net Sales for Americas Welding were $637.03 million, surpassing the estimated $626.40 million, representing a decline of 4.2% compared to the previous year [3] Total Sales Analysis - Total Sales for the Harris Products Group reached $133.66 million, exceeding the average estimate of $125.39 million, with a year-over-year increase of 4.2% [3] - Total Sales for International Welding were $223.60 million, above the average estimate of $215.39 million, but down 9.4% year-over-year [3] - Total Sales for Americas Welding were $667.87 million, compared to the average estimate of $652.23 million, indicating a decline of 3.8% year-over-year [3] Inter-segment Sales - Inter-segment sales for Americas Welding were $30.85 million, exceeding the average estimate of $29.89 million, with a year-over-year increase of 6.8% [3] - Inter-segment sales for International Welding were $7.37 million, surpassing the average estimate of $5.48 million, reflecting a significant year-over-year increase of 50.6% [3] - Inter-segment sales for the Harris Products Group were $3.16 million, compared to the average estimate of $2.45 million, representing a year-over-year increase of 37.2% [3] Adjusted EBIT - Adjusted EBIT for Americas Welding was $125.52 million, exceeding the average estimate of $121.58 million [3] - Adjusted EBIT for Corporate/Eliminations was $4.50 million, compared to the average estimate of -$3.03 million, indicating a positive year-over-year change [3] Stock Performance - Lincoln Electric shares have returned +2.7% over the past month, outperforming the Zacks S&P 500 composite's +1% change [4] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [4]

Financial Performance - Net sales for Q3 2024 were $984 million, a decrease of 4.8% compared to the prior year[1][2] - EPS for Q3 2024 was $1.77, down from $2.22 in the prior year, with adjusted EPS at $2.14 compared to $2.40[1][2] - For the nine months ended September 30, 2024, net income was $325.9 million, or $5.68 EPS, down from $388.6 million, or $6.67 EPS in the prior year[4][12] - Total sales for the nine months decreased 4.7% to $2.99 billion, reflecting a 6.1% decrease in organic sales[5][12] - Net income for Q3 2024 was $100,756, down 22.1% from $129,343 in Q3 2023[15] - Net income for the three months ended September 30, 2024, was $100,756, a decrease of 22% from $129,343 in the same period of 2023[17] - The net income for the nine months ended September 30, 2024, was $325,879 thousand, or 10.9% of total sales, compared to $388,605 thousand and 12.4% in the prior year[20] Operating Income - Operating income margin was 14.8%, with adjusted operating income margin at 17.3%[1][2] - Operating income for Q3 2024 was reported at $145,560, a decrease of 15.1% from $171,441 in Q3 2023[15] - Adjusted operating income for Q3 2024 was $169,756, compared to $183,367 in Q3 2023, reflecting a decline of 7.4%[15] Cash Flow and Dividends - Cash flows from operations reached $199 million, achieving a cash conversion rate of 134%[1] - The company returned $91 million to shareholders through dividends and share repurchases[1] - The Board declared a quarterly cash dividend of $0.75 per share, a 5.6% increase from the previous dividend[6] - Net cash provided by operating activities for the nine months ended September 30, 2024, was $503,182, down from $545,880 in 2023, reflecting a decrease of approximately 7%[18] - Cash dividends paid per share increased to $2.13 for the nine months ended September 30, 2024, compared to $1.92 in 2023, marking an increase of approximately 11%[18] Assets and Liabilities - Total assets increased to $3.66 billion as of September 30, 2024, compared to $3.38 billion at the end of 2023[13] - Total debt increased to $1,262,609 as of September 30, 2024, up from $1,105,210 at the end of 2023, representing a rise of 14.2%[14] - Invested capital rose to $2,601,799 as of September 30, 2024, compared to $2,414,062 at the end of 2023, an increase of 7.8%[14] - Average operating working capital to net sales increased to 19.1% as of September 30, 2024, compared to 17.1% at the end of 2023[14] Capital Expenditures and Investments - The company reported a significant increase in capital expenditures, totaling $85,117 for the nine months ended September 30, 2024, compared to $66,459 in 2023, representing a 28% increase[18] - The acquisition of businesses net of cash acquired amounted to $252,746 for the nine months ended September 30, 2024, a substantial increase from $32,685 in the same period of 2023[18] - The net cash used by investing activities for the nine months ended September 30, 2024, was $335,357, compared to $101,109 in 2023, indicating a significant increase in investment activity[18] Segment Performance - Total sales for the Americas Welding segment for the nine months ended September 30, 2024, were $2,008,685 thousand, a decrease from $2,092,882 thousand in the same period of 2023[20] - The Harris Products Group reported net sales of $395,355 thousand for the nine months ended September 30, 2024, compared to $392,517 thousand in the same period of 2023[20] - The Americas Welding segment experienced a volume decline of $57,292 thousand for the three months ended September 30, 2024, contributing to an overall decrease in consolidated net sales[21] - The International Welding segment reported a net sales decrease of 10.7% for the three months ended September 30, 2024, with total sales of $216,224 thousand[21] - Americas Welding reported net sales of $2,000,839, a decrease of 7.3% compared to the previous period[22] - International Welding net sales were $747,829, reflecting a decline of 6.8%[22] - The Harris Products Group achieved net sales of $384,454, down 3.9% from the prior year[22] Market Trends and Projections - The projected net sales for 2024 is $2,986,639, indicating a potential recovery[22] - Volume change contributed to a decrease of $(211,444) in consolidated net sales[22] - Price changes positively impacted consolidated net sales by $19,872[22] - Foreign exchange effects negatively impacted consolidated net sales by $(2,828)[22]

Sometimes it feels like getting through a maze trying to find new investment opportunities Floresco Productions VAL S&P 500 (*SPX) Lovel % Change 8.64% Star 500 ( 31 x) X) Level % Change (*DJA) Level % Change Nasdaq Composite (*IXIC) Level % Change 5.65% 10.36% 4.00% 0.00% -4.00% Aug 6 Aug 8 Aug 10 Aug 12 Aug 14 Aug 16 Aug 18 Aug 20 Aug 22 Seeking AlphaQ Aug 25, 2024, 3:07 AM EDT Powered by YCHARTS Data by YCharts Just when it seems like the market is going to head lower it took off in the other direction a ...

For Immediate Release Chicago, IL – August 5, 2024 – Today, Zacks Equity Research discusses Stanley Black & Decker, Inc. (SWK) and Lincoln Electric Holdings, Inc. (LECO) . Industry: Manufacturing Tools Link: https://www.zacks.com/commentary/2315124/2-manufacturing-tools-stocks-to-watch-despite-industryheadwinds Weakness in the manufacturing sector, slowdown in new orders and lingering effects of supply chain issues have marred the outlook of the Zacks Manufacturing-Tools & Related Products industry. The sho ...

Lincoln Electric Holdings, Inc. (LECO) reported adjusted earnings of $2.34 per share in the second quarter of 2024, beating the Zacks Consensus Estimate of $2.30. The bottom line decreased 4.1% year over year. Including one-time items, the bottom line was $1.77 per share compared with $2.36 in the prior-year quarter. Total revenues fell 3.7% year over year to $1.02 billion. However, the top line marginally beat the Zacks Consensus Estimate of $1.01 billion. The decline was due to a 4.4% fall in organic sale ...

Weakness in the manufacturing sector, slowdown in new orders and lingering effects of supply chain issues have marred the outlook of the Zacks Manufacturing-Tools & Related Products industry. The shortage of skilled labor in the United States is another concern for the industry. However, industry participants' focus on cost-control measures and investments in product development have been allowing them to stay competitive in the market. Stanley Black & Decker, Inc. (SWK) and Lincoln Electric Holdings, Inc. ...

Financial Performance - Net sales for the three months ended June 30, 2024, were $1,021,683, a decrease of 3.7% compared to $1,060,565 in the same period of 2023[74]. - Gross profit margin increased to 37.6% for the three months ended June 30, 2024, up from 35.2% in the prior year, driven by effective cost management[74][77]. - Operating income for the three months ended June 30, 2024, was $148,838, representing 14.6% of sales, down from 16.8% in the prior year[74][80]. - Net income for the three months ended June 30, 2024, was $101,708, a decrease of 25.9% from $137,331 in the same period of 2023[74]. - Diluted earnings per share for the three months ended June 30, 2024, were $1.77, down from $2.36 in the prior year, reflecting a 25.0% decline[74]. - For the six months ended June 30, 2024, net sales were $2,002,880, a decrease of 4.6% from $2,099,908 in the same period of 2023[76]. - Net income for the six months ended June 30, 2024, was $225,123, a decrease of 13.2% from $259,262 in 2023[88]. - Adjusted operating income for the three months ended June 30, 2024, was $177,622, compared to $184,225 for the same period in 2023, representing a decrease of 0.3%[94]. - Net income as reported for the six months ended June 30, 2024, was $225,123, down from $259,262 in the same period of 2023, a decline of 13.2%[94]. Segment Performance - Americas Welding net sales decreased to $648,936, a 4.1% decline compared to the previous year[83]. - International Welding net sales fell to $238,758, representing a 5.8% decrease year-over-year[83]. - The Harris Products Group achieved net sales of $133,989, reflecting a 2.9% increase compared to the same period last year[83]. - Adjusted EBIT for the Americas Welding segment was $136,651, a decrease of 2.3% from $139,870 in the prior year[85]. - Adjusted EBIT for the International Welding segment dropped to $25,709, a decline of 23.9% compared to the previous year[85]. - The Harris Products Group's adjusted EBIT increased by 27.7% to $24,923, up from $19,510 in the same quarter last year[85]. Expenses and Charges - SG&A expenses increased to $208,485 for the three months ended June 30, 2024, compared to $192,748 in the same period of 2023, primarily due to acquisitions and higher employee-related costs[74][78]. - Rationalization and asset impairment charges rose to $26,490 for the three months ended June 30, 2024, compared to $2,667 in the same period of 2023, primarily due to the disposal of the Company's Russian entity[74][79]. Tax and Effective Rates - The effective tax rate increased to 25.6% for the three months ended June 30, 2024, compared to 20.6% in the prior year, primarily due to a mix of earnings and discrete tax items[74][82]. Cash Flow and Investments - Cash provided by operating activities for the six months ended June 30, 2024, was $303,981, a decrease of 5.8% from $322,776 in the same period of 2023[99]. - Cash used by investing activities increased significantly to $(200,746) for the six months ended June 30, 2024, compared to $(76,346) in the same period of 2023, an increase of 162.5%[99]. - Cash and cash equivalents decreased by 30.8%, or $121,115, to $272,672 during the six months ended June 30, 2024, from $393,787 as of December 31, 2023[100]. - Average operating working capital to net sales increased to 18.0% as of June 30, 2024, compared to 17.1% as of December 31, 2023[101]. Capital and Debt Management - The company anticipates capital expenditures of $90,000 to $110,000 in 2024, focusing on maintenance and efficiency improvements[100]. - The company plans to fund global expansion primarily through operational cash flow, with potential access to capital markets for significant acquisitions[98]. - Total debt as of June 30, 2024, was $1,104,684, a decrease from $1,114,304 in 2023, reflecting a reduction of approximately 1%[103]. - Total equity increased to $1,312,906 as of June 30, 2024, compared to $1,201,424 in 2023, marking an increase of around 9%[103]. - The company reported a return on invested capital (ROIC) of 22.3% for the twelve months ended June 30, 2024, compared to 22.0% in 2023, showing a slight improvement[103]. - The company entered into a new $1 billion revolving credit facility on June 20, 2024, replacing a previous $500 million facility, with a maturity date of June 20, 2029[106]. - The company issued new senior unsecured notes totaling $550,000, with $400,000 issued on June 20, 2024, and two additional series of $75,000 each scheduled for August 22, 2024[107]. - The company terminated its existing interest rate swaps associated with a term loan, realizing a gain of $2,428 recorded in Other income (expense)[109]. - The company remains in compliance with all financial covenants related to its debt agreements as of June 30, 2024[107]. Future Outlook and Risks - The company experienced a decrease in volumes and operational inefficiencies, impacting overall performance negatively[89]. - Future outlook includes a focus on effective cost management and operational improvements to enhance profitability[86]. - The company anticipates potential risks including economic conditions, interest rates, and geopolitical events that may impact future operating results[110]. Long-term Performance - Net income for the twelve months ended June 30, 2024, was $511,110, compared to $477,633 for the same period in 2023, representing an increase of approximately 7%[103]. - Adjusted net operating profit after taxes for the twelve months ended June 30, 2024, was $573,360, up from $530,454 in 2023, indicating a growth of about 8%[103].