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 ...

Industry Overview - The Zacks Manufacturing-Tools & Related Products industry includes companies that develop and distribute various tools and technology solutions, serving multiple sectors such as industrial, commercial, oil & gas, and healthcare [3] - The industry is currently facing challenges due to weakness in the manufacturing sector, with the Manufacturing Purchasing Manager's Index at 46.8% in July, indicating contraction [4] Current Challenges - There is a persistent weakness in the manufacturing sector, with the New Orders Index also in contraction at 47.4% for four consecutive months [4] - Rising input costs and supply chain issues are negatively impacting profitability, leading to increased logistics expenses [5] Strategic Responses - Industry participants are focusing on cost-control measures and investments in product development to remain competitive [2] - Companies are implementing cost management initiatives, including streamlining operations and optimizing supply networks [5] Investment and Growth Potential - Continuous investment in product development and innovation is expected to drive long-term growth, despite the potential for highly-leveraged balance sheets [6] - Stanley Black & Decker, Inc. and Lincoln Electric Holdings, Inc. are highlighted as companies well-positioned to navigate current market challenges [2][11] Performance Metrics - The Zacks Manufacturing-Tools & Related Products industry has underperformed compared to the broader sector and the S&P 500, with a 7.6% appreciation over the past year versus 14.5% and 23% for the sector and S&P 500, respectively [9] - The industry is currently trading at a forward P/E ratio of 20.52X, slightly below the S&P 500's 21.49X but above the sector's 19.00X [10] Company Highlights - Stanley Black & Decker has shown resilience with better-than-expected results in the last four quarters and a 20.3% average earnings surprise [12] - Lincoln Electric is experiencing improving orders and strong backlogs, with a focus on automation solutions and new technologies [13][14]

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].

[Financial Performance Summary](index=1&type=section&id=Financial%20Performance%20Summary) Lincoln Electric reported sales and net income declines in Q2 and H1 2024, maintaining stable adjusted operating margins amidst financing activities [Second Quarter 2024 Performance](index=1&type=section&id=Second%20Quarter%202024%20Performance) Q2 2024 Financial Performance | Financial Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,022.0 million | $1,060.6 million | -3.7% | | Net Income | $101.7 million | $137.3 million | -25.9% | | Diluted EPS | $1.77 | $2.36 | -25.0% | | Adjusted Net Income | $134.3 million | $142.2 million | -5.6% | | Adjusted EPS | $2.34 | $2.44 | -4.1% | | Operating Income Margin | 14.6% | 16.8% | -220 bps | | Adjusted Operating Income Margin | 17.4% | 17.4% | 0 bps | - The **3.7%** decrease in Q2 sales was driven by a **4.4%** decline in organic sales, which was partially offset by a **1.2%** benefit from acquisitions[3](index=3&type=chunk) - Management attributed the solid profit and earnings results to effective cost management and execution of strategic initiatives while navigating a challenging part of the cycle[4](index=4&type=chunk) - The company returned **$91 million** to shareholders during the quarter through dividends and share repurchases[7](index=7&type=chunk) [Six Months 2024 Performance](index=1&type=section&id=Six%20Months%202024%20Performance) H1 2024 Financial Performance | Financial Metric | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $2,002.9 million | $2,099.9 million | -4.6% | | Net Income | $225.1 million | $259.3 million | -13.2% | | Diluted EPS | $3.91 | $4.44 | -11.9% | | Adjusted Net Income | $262.9 million | $266.5 million | -1.3% | | Adjusted EPS | $4.57 | $4.57 | 0.0% | | Operating Income Margin | 15.7% | 16.3% | -60 bps | | Adjusted Operating Income Margin | 17.4% | 16.8% | +60 bps | - The **4.6%** sales decrease for the first six months was primarily due to a **5.3%** decline in organic sales[6](index=6&type=chunk) [Financing Activities](index=2&type=section&id=Financing%20Activities) - On June 20, 2024, the company agreed to issue **$550 million** in new senior unsecured private placement notes with maturities ranging from 5 to 10 years[8](index=8&type=chunk) - Proceeds from the notes were used to repay a **$400 million** term loan. Once fully issued, total debt will be **$1.25 billion** with a weighted average effective interest rate of **4.08%**[8](index=8&type=chunk) - The company also entered into a new **$1 billion** revolving credit facility, with initial interest at SOFR plus **1.10%**[8](index=8&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) Consolidated financial statements show decreased net sales and income for Q2 and H1 2024, impacted by charges, with stable balance sheet and reduced operating cash flow [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Q2 2024 Consolidated Statements of Income | Metric (Q2) | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,021.7 million | $1,060.6 million | -3.7% | | Gross Profit | $383.8 million | $373.4 million | +2.8% | | Operating Income | $148.8 million | $178.0 million | -16.4% | | Net Income | $101.7 million | $137.3 million | -25.9% | H1 2024 Consolidated Statements of Income | Metric (Six Months) | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $2,002.9 million | $2,099.9 million | -4.6% | | Gross Profit | $752.2 million | $728.8 million | +3.2% | | Operating Income | $313.9 million | $342.4 million | -8.3% | | Net Income | $225.1 million | $259.3 million | -13.2% | - Rationalization and asset impairment charges significantly increased to **$26.5 million** in Q2 2024 from **$2.7 million** in Q2 2023, negatively impacting operating income[14](index=14&type=chunk) [Balance Sheet Highlights](index=5&type=section&id=Balance%20Sheet%20Highlights) Selected Balance Sheet Data | Selected Balance Sheet Data | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $272.7 million | $393.8 million | | Total assets | $3,415.2 million | $3,377.3 million | | Total debt | $1,104.7 million | $1,105.2 million | | Total equity | $1,312.9 million | $1,308.9 million | | Total debt / invested capital | 45.7% | 45.8% | - Average operating working capital as a percentage of Net sales increased to **18.0%** at the end of Q2 2024 from **17.1%** at the end of 2023[16](index=16&type=chunk)[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q2 2024 Cash Flow Activities | Cash Flow Activity (Q2) | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $170.7 million | $198.8 million | | Net Cash used by Investing Activities | ($174.8 million) | ($60.3 million) | | Net Cash used by Financing Activities | ($93.1 million) | ($115.6 million) | | Decrease in Cash | ($102.3 million) | $21.7 million (Increase) | H1 2024 Cash Flow Activities | Cash Flow Activity (Six Months) | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $304.0 million | $322.8 million | | Net Cash used by Investing Activities | ($200.7 million) | ($76.3 million) | | Net Cash used by Financing Activities | ($218.5 million) | ($226.9 million) | | Decrease in Cash | ($121.1 million) | $23.3 million (Increase) | - For the first six months of 2024, the company spent **$160.8 million** on share repurchases and **$81.7 million** on cash dividends[29](index=29&type=chunk) [Segment Performance](index=10&type=section&id=Segment%20Performance) Segment performance varied in Q2 2024, with Americas Welding maintaining strong margins despite sales decline, International Welding facing significant drops, and Harris Products Group showing sales growth [Segment Highlights](index=10&type=section&id=Segment%20Highlights) Q2 2024 Segment Performance | Q2 2024 Segment Performance | Americas Welding | International Welding | Harris Products | | :--- | :--- | :--- | :--- | | Net Sales | $648.9 million | $238.8 million | $134.0 million | | % Change YoY | -4.1% | -5.8% | +2.9% | | Adjusted EBIT | $136.7 million | $25.7 million | $24.9 million | | Adjusted EBIT Margin | 19.9% | 10.4% | 18.2% | H1 2024 Segment Performance | Six Months 2024 Segment Performance | Americas Welding | International Welding | Harris Products | | :--- | :--- | :--- | :--- | | Net Sales | $1,273.0 million | $474.5 million | $255.3 million | | % Change YoY | -4.7% | -6.2% | -1.2% | | Adjusted EBIT | $272.8 million | $53.5 million | $44.8 million | | Adjusted EBIT Margin | 20.3% | 10.9% | 17.1% | - International Welding's Q2 reported EBIT was a loss of **$(5.5) million**, primarily due to **$26.3 million** in rationalization charges and a **$5.0 million** loss on asset disposal related to the disposition of its Russian entity[31](index=31&type=chunk)[33](index=33&type=chunk) [Change in Net Sales by Segment](index=12&type=section&id=Change%20in%20Net%20Sales%20by%20Segment) Q2 2024 Net Sales Change by Segment | Q2 2024 % Change in Net Sales vs. Q2 2023 | Volume | Acquisitions | Price | Foreign Exchange | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Americas Welding | (6.7)% | 1.8% | 1.0% | (0.2)% | (4.1)% | | International Welding | (3.8)% | 0.0% | (1.2)% | (0.8)% | (5.8)% | | The Harris Products Group | (1.9)% | — | 5.2% | (0.3)% | 2.9% | | **Consolidated** | **(5.4)%** | **1.2%** | **1.0%** | **(0.4)%** | **(3.7)%** | - Consolidated sales decline in Q2 was driven by a **5.4%** decrease in volume, partially offset by positive contributions from acquisitions (**1.2%**) and pricing (**1.0%**)[41](index=41&type=chunk) - The Harris Products Group was the only segment to post sales growth in Q2, driven by a strong **5.2%** price increase that more than offset a **1.9%** volume decline[41](index=41&type=chunk) [Non-GAAP Financial Measures Reconciliation](index=6&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) The company provides detailed reconciliations of GAAP to non-GAAP measures, showing Q2 2024 adjusted EPS at **$2.34**, adjusted operating margin flat at **17.4%**, and adjusted ROIC improved to **23.7%** [Reconciliation of Operating Income, Net Income, and EPS](index=6&type=section&id=Reconciliation%20of%20Operating%20Income%2C%20Net%20Income%2C%20and%20EPS) Q2 2024 Reconciliation of Operating Income, Net Income, and EPS | Q2 2024 Reconciliation | Reported (GAAP) | Special Items (pre-tax) | Adjusted (Non-GAAP) | | :--- | :--- | :--- | :--- | | Operating Income | $148.8 million | $28.8 million | $177.6 million | | Net Income | $101.7 million | $32.6 million (after-tax) | $134.3 million | | Diluted EPS | $1.77 | $0.57 | $2.34 | - Q2 2024 pre-tax special items included **$26.5 million** in rationalization charges, **$2.2 million** in acquisition costs, and a **$5.0 million** loss on asset disposal[19](index=19&type=chunk) - The adjusted effective tax rate for Q2 2024 was **21.2%**, compared to the reported rate of **25.6%**[19](index=19&type=chunk) [Reconciliation of Return on Invested Capital (ROIC)](index=7&type=section&id=Reconciliation%20of%20Return%20on%20Invested%20Capital%20%28ROIC%29) Return on Invested Capital (TTM) | Return on Invested Capital (TTM) | June 30, 2024 | June 30, 2023 | | :--- | :--- | :--- | | Reported ROIC | 22.3% | 22.0% | | Adjusted ROIC | 23.7% | 22.9% | - Adjusted net operating profit after taxes (NOPAT) for the twelve months ending June 30, 2024 was **$573.4 million**, an increase from **$530.5 million** in the prior year period[24](index=24&type=chunk) [Other Information](index=2&type=section&id=Other%20Information) This section provides standard corporate information, including Lincoln Electric's business description and legal disclaimers regarding forward-looking statements and non-GAAP measures [About Lincoln Electric](index=2&type=section&id=About%20Lincoln%20Electric) - Lincoln Electric is described as the world leader in the engineering, design, and manufacturing of advanced arc welding solutions, automated joining, assembly and cutting systems[10](index=10&type=chunk) - The company operates **71** manufacturing and automation system integration locations across **21** countries and serves customers in over **160** countries[10](index=10&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) - The press release contains forward-looking statements that involve risks and uncertainties, and actual results may differ materially from expectations[12](index=12&type=chunk) - Key risk factors cited include general economic conditions, interest rates, currency exchange rates, tariff rates, and geopolitical events such as the Russia-Ukraine conflict[12](index=12&type=chunk)