UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
or
For the transition period from _____________ to _____________
Commission File Number:
(Exact name of registrant as specified in its charter)
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “small reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
The number of shares outstanding of the registrant’s common shares as of September 30, 2022 was
TABLE OF CONTENTS
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) | 4 | |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 25 | |
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 36 | |
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 37 | |
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EX-101 | Instance Document |
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EX-101 | Schema Document |
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EX-101 | Calculation Linkbase Document |
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EX-101 | Label Linkbase Document |
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EX-101 | Presentation Linkbase Document |
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EX-101 | Definition Linkbase Document |
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2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LINCOLN ELECTRIC HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2022 |
| 2021 |
| 2022 |
| 2021 | |||||
Net sales (Note 2) |
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Cost of goods sold |
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Gross profit |
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Selling, general & administrative expenses |
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Rationalization and asset impairment charges (Note 6) |
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Operating income |
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Interest expense, net |
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Other income (expense) (Note 14) |
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Income before income taxes |
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Income taxes (Note 15) |
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Net income including non-controlling interests |
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Non-controlling interests in subsidiaries’ income (loss) |
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Net income | $ | | $ | | $ | | $ | | ||||
Basic earnings per share (Note 3) | $ | | $ | | $ | | $ | | ||||
Diluted earnings per share (Note 3) | $ | | $ | | $ | | $ | | ||||
Cash dividends declared per share | $ | | $ | | $ | | $ | |
See notes to these consolidated financial statements.
3
LINCOLN ELECTRIC HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(In thousands)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2022 |
| 2021 |
| 2022 |
| 2021 | |||||
Net income including non-controlling interests |
| $ | |
| $ | |
| $ | |
| $ | |
Other comprehensive income (loss), net of tax: |
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Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax of $ |
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Defined benefit pension plan activity, net of tax of $ |
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Currency translation adjustment |
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Other comprehensive income (loss): |
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Comprehensive income |
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Comprehensive income (loss) attributable to non-controlling interests |
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Comprehensive income attributable to shareholders | $ | | $ | | $ | | $ | |
See notes to these consolidated financial statements.
4
LINCOLN ELECTRIC HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, 2022 | December 31, 2021 | |||||
(UNAUDITED) | (NOTE 1) | |||||
ASSETS |
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Current Assets |
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Cash and cash equivalents | $ | | $ | | ||
Accounts receivable (less allowance for doubtful accounts of $ |
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Inventories (Note 9) |
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Other current assets |
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Total Current Assets |
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Property, plant and equipment (less accumulated depreciation of $ | | | ||||
Goodwill |
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Other assets |
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TOTAL ASSETS | $ | | $ | | ||
LIABILITIES AND EQUITY |
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Current Liabilities |
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Short-term debt (Note 12) | $ | | $ | | ||
Trade accounts payable |
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Accrued employee compensation and benefits |
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Other current liabilities |
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Total Current Liabilities |
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Long-term debt, less current portion (Note 12) |
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Other liabilities |
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Total Liabilities |
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Shareholders' Equity |
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Common Shares |
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Additional paid-in capital |
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Retained earnings |
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Accumulated other comprehensive loss |
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Treasury Shares |
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Total Shareholders' Equity |
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Non-controlling interests |
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Total Equity |
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TOTAL LIABILITIES AND TOTAL EQUITY | $ | | $ | |
See notes to these consolidated financial statements.
5
LINCOLN ELECTRIC HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(UNAUDITED)
(In thousands, except per share amounts)
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Common | Additional | Other | Non- | ||||||||||||||||||||
Shares | Common | Paid-In | Retained | Comprehensive | Treasury | Controlling | |||||||||||||||||
| Outstanding |
| Shares |
| Capital |
| Earnings |
| Income (Loss) |
| Shares |
| Interests |
| Total | ||||||||
Balance at December 31, 2021 |
| | $ | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | |||||||
Net income |
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Unrecognized amounts from defined benefit pension plans, net of tax |
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Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax |
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Currency translation adjustment |
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Cash dividends declared - $ |
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Stock-based compensation activity |
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Purchase of shares for treasury |
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Other |
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Balance at March 31, 2022 |
| | $ | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | |||||||
Net income |
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Unrecognized amounts from defined benefit pension plans, net of tax |
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Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax |
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Currency translation adjustment |
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Cash dividends declared – $ |
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Stock-based compensation activity |
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Purchase of shares for treasury |
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Other |
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Balance at June 30, 2022 |
| | $ | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | |||||||
Net income |
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Unrecognized amounts from defined benefit pension plans, net of tax |
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Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax |
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Currency translation adjustment |
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Cash dividends declared – $ |
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Stock-based compensation activity |
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Purchase of shares for treasury |
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Other |
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Balance at September 30, 2022 | | $ | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | |
6
LINCOLN ELECTRIC HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(UNAUDITED)
(In thousands, except per share amounts)
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| Accumulated |
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Common | Additional | Other | Non- | ||||||||||||||||||||
Shares | Common | Paid-In | Retained | Comprehensive | Treasury | Controlling | |||||||||||||||||
| Outstanding |
| Shares |
| Capital |
| Earnings |
| Income (Loss) |
| Shares |
| Interests |
| Total | ||||||||
Balance at December 31, 2020 |
| | $ | | $ | | $ | | $ | ( | $ | ( | $ | | $ | | |||||||
Net income |
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Unrecognized amounts from defined benefit pension plans, net of tax |
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Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax |
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Currency translation adjustment |
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Cash dividends declared – $ |
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Stock-based compensation activity |
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Purchase of shares for treasury |
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Other |
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Balance at March 31, 2021 |
| | $ | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | |||||||
Net income |
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Unrecognized amounts from defined benefit pension plans, net of tax |
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Unrealized loss on derivatives designated and qualifying as cash flow hedges, net of tax |
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Currency translation adjustment |
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Cash dividends declared – $ |
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Stock-based compensation activity |
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Purchase of shares for treasury |
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Other |
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Balance at June 30, 2021 |
| | $ | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | |||||||
Net income |
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Unrecognized amounts from defined benefit pension plans, net of tax |
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Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax |
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Currency translation adjustment |
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Cash dividends declared – $ |
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Stock-based compensation activity |
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Purchase of shares for treasury |
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Other |
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Balance at September 30, 2021 | | $ | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | |
7
LINCOLN ELECTRIC HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
Nine Months Ended September 30, | ||||||
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| 2022 |
| 2021 | ||
CASH FLOWS FROM OPERATING ACTIVITIES |
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Net income | $ | | $ | | ||
Non-controlling interests in subsidiaries' income (loss) |
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Net income including non-controlling interests |
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Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities: |
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Rationalization and asset impairment net charges (gains) (Note 6) |
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Depreciation and amortization |
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Equity earnings (loss) in affiliates, net |
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Deferred income taxes |
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Stock-based compensation |
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Pension settlement charges | | | ||||
Other, net |
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Changes in operating assets and liabilities, net of effects from acquisitions: |
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Increase in accounts receivable |
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Increase in inventories |
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Increase in other current assets |
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Increase in trade accounts payable |
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Increase in other current liabilities |
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Net change in other assets and liabilities |
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NET CASH PROVIDED BY OPERATING ACTIVITIES |
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CASH FLOWS FROM INVES |