Lincoln Electric(LECO) - 2025 Q3 - Quarterly Results

Financial Performance - Third quarter 2025 net income was $122.6 million, or diluted EPS of $2.21, compared to $100.8 million, or $1.77 EPS in the prior year period, reflecting a 21.7% increase [2][3]. - For the nine months ended September 30, 2025, net income was $384.5 million, or $6.86 EPS, compared to $325.9 million, or $5.68 EPS in the prior year, marking an 18.0% increase [4][5]. - Adjusted net income for the nine months was $404.7 million, or $7.22 adjusted EPS, compared to $385.3 million, or $6.72 adjusted EPS in the prior year [4][5]. - Net income for Q3 2025 rose to $122,628 thousand, up from $100,756 thousand in Q3 2024, marking a growth of 21.7% [18]. - Net income for the nine months ended September 30, 2025, was $384,511, an increase of 17.9% compared to $325,879 in 2024 [27]. Sales and Revenue - Sales for the third quarter 2025 increased by 7.9% to $1,061.2 million, driven by a 5.6% increase in organic sales and a 1.7% contribution from acquisitions [3][7]. - Nine-month sales increased by 5.6% to $3,154.3 million, with organic sales growth of 2.4% and a 3.2% benefit from acquisitions [5][7]. - Total sales for the nine months ended September 30, 2025, reached $3,154,288, up from $2,986,639 in 2024, representing a growth of 5.6% [34]. - The Americas Welding segment reported net sales of $2,041,631 for the nine months ended September 30, 2025, compared to $1,910,061 in 2024, a growth of 6.9% [34]. - The International Welding segment's net sales for the nine months ended September 30, 2025, were $671,514, slightly down from $690,743 in 2024, a decrease of 2.8% [34]. - The Harris Products Group achieved net sales of $441,143 for the nine months ended September 30, 2025, up from $385,835 in 2024, an increase of 14.4% [34]. Operating Efficiency - Operating income margin improved to 16.6% in Q3 2025, up from 14.8% in the prior year, with adjusted operating income margin at 17.4% [3][7]. - Adjusted operating income for Q3 2025 was $184,562 thousand, compared to $169,756 thousand in Q3 2024, reflecting an increase of 8.4% [18]. - Cash conversion rate improved to 149% in Q3 2025 from 134% in Q3 2024, indicating enhanced operational efficiency [23]. - Average operating working capital to net sales improved to 18.6% in Q3 2025 from 16.9% in Q4 2024 [15]. - Total debt to invested capital ratio decreased to 46.7% from 48.7%, indicating improved capital efficiency [15]. - Return on invested capital as reported increased to 21.2% in 2025 from 19.7% in 2024 [21]. Cash Flow and Dividends - Cash flows from operations reached $237 million, achieving a cash conversion rate of 149% [7]. - The Board declared a quarterly cash dividend of $0.79 per share, representing a 5.3% increase from the previous dividend [6]. - The company returned $94 million to shareholders through dividends and share repurchases during the quarter [7]. - Cash dividends paid per share increased to $2.25 in 2025 from $2.13 in 2024, marking a rise of 5.6% [27]. - The company reported a net cash provided by operating activities of $566,208 for the nine months ended September 30, 2025, compared to $503,182 in 2024, an increase of 12.5% [27]. - The company experienced a net cash used by investing activities of $214,275 for the nine months ended September 30, 2025, compared to $335,357 in 2024, indicating a reduction in cash outflow of 36.1% [27]. Asset Management - Cash and cash equivalents decreased to $292,997 thousand from $377,262 thousand, a decline of approximately 22.4% [15]. - Total assets increased to $3,815,105 thousand, up from $3,520,142 thousand, representing a growth of about 8.4% [15]. - Capital expenditures for the nine months ended September 30, 2025, were $84,028, slightly down from $85,117 in 2024 [27]. Segment Performance - The Americas Welding segment's net sales increased by 6.9% due to acquisitions and price adjustments [38]. - The International Welding segment's net sales are projected to decline by 2.8% in 2025, despite a positive contribution from foreign exchange [38]. - The Harris Products Group is expected to see a significant growth of 14.3% in net sales for 2025, driven by volume and price increases [38]. - Overall, the consolidated net sales change was influenced by a volume decrease of $(82,635) and a price increase of $155,116 [38]. - Foreign exchange impacts were minimal, with a net change of $(191) across all segments [38]. - The company is focusing on strategic pricing and acquisitions to drive future growth across its segments [38].