Lincoln Electric Holdings Inc (LECO) 10-Q Quarterly Report October 2018

-- Lincoln Electric Holdings, Inc. (the “Company”) (Nasdaq: LECO) today reported third quarter 2018 net income of $70.5 million, or diluted earnings per share (EPS) of $1.07. This compares with $106.1 million, or $1.59 EPS in the prior year period. Reported EPS includes special item after-tax charges of $8.9 million, or $0.14 EPS. The prior year included special item after-tax income of $44.4 million, including a bargain purchase gain of $51.6 million. Excluding these items, third quarter 2018 adjusted net income increased 28.5% to $79.4 million, or $1.21 EPS, as compared with $61.8 million, or $0.93 EPS in the prior year period.

Third quarter 2018 sales increased 10.1% to $737.1 million from a 14.9% improvement in organic sales in the Americas Welding segment. Organic sales in the International Welding segment declined 5.3% in the quarter.

Operating income for the third quarter 2018 was $100.8 million, or 13.7% of sales. This compares with operating income of $135.6 million, or 20.3% of sales, in the comparable 2017 period. On an adjusted basis, operating income increased 16.5% to $104.4 million, or 14.2% of sales, as compared with $89.6 million, or 13.4% of sales, in the prior year period.

“We achieved solid third quarter organic sales growth from strong demand in Americas Welding and price management worldwide,” stated Christopher L. Mapes, Chairman, President and Chief Executive Officer. “We are realizing synergies in our International Welding business from our Air Liquide Welding acquisition despite incurring lower volumes from our integration activities. We remain very confident in the long-term value we are generating from this acquisition. Our regional initiatives, price measures and productivity improvements delivered higher margin performance, solid cash flows and cash conversion in the quarter. We continue to execute well on our strategic goals and are positioned to deliver superior value for our stakeholders.”

Nine Months 2018 Summary

Net income for the nine months ended September 30, 2018 was $200.2 million, or $3.03 EPS. This compares with $223.3 million, or $3.35 EPS, in the comparable 2017 period. Reported EPS includes special item after-tax net charges of $32.9 million or $0.50 EPS. The prior year included special item after-tax income of $38.1 million, including a bargain purchase gain of $51.6 million. Excluding these items, adjusted net income for the nine months ended September 30, 2018 increased 25.9% to $233.1 million, or $3.53 EPS, compared with $185.2 million, or $2.78 EPS, in the comparable 2017 period. The effective tax rate for the nine months ended September 30, 2018 was 27.0% due to special items. Excluding special items, the effective tax rate was 24.1%, which compares to 28.8% in the comparable 2017 period.

Sales increased 21.7% to $2.3 billion in the nine months ended September 30, 2018 from a 12.6% benefit from acquisitions, an 8.7% improvement in organic sales and 0.5% from favorable foreign exchange.

Operating income for the nine months ended September 30, 2018 was $280.6 million, or 12.3% of sales. This compares with operating income of $300.6 million, or 16.0% of sales, in the comparable 2017 period. On an adjusted basis, operating income increased 17.5% to $308.6 million, or 13.5% of sales, as compared with $262.7 million, or 14.0% of sales, in the comparable 2017 period.

The following information was filed by Lincoln Electric Holdings Inc (LECO) on Thursday, October 25, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Lincoln Electric Holdings Inc's 10-Q Quarterly Report:

Financial - Shares Highlight
This increase was predominantly due to cash provided by operating activities and proceeds from marketable securities partially offset by purchases of common shares for treasury and cash dividends paid to shareholders.

Financial - Shares Highlight
(3) Cash used by financing activities increased in the nine months ended September 30, 2018, compared with the nine months ended September 30, 2017 due to higher purchases of common shares for treasury.
Other - Other Highlight
(2) Cash provided by investing activities increased for the nine months ended September 30, 2018, compared with the nine months ended September 30, 2017 predominantly due to the proceeds from marketable securities in 2018.
Financial - Earnings Highlight
The following table presents the reconciliation of both Net income as reported to Adjusted operating income and Adjusted EBIT as well as Diluted earnings per share as reported to Adjusted diluted earnings per share: (1) Charges primarily related to severance, asset impairments and gains or losses on the disposal of assets as discussed in Note 6 to the consolidated financial statements.
Revenue - Product Highlight
The following table presents Adjusted EBIT by segment: Increase for the three months ended September 30, 2018 as compared to September 30, 2017 driven by stronger organic sales.
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As of September 30, 2018,...Read more
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Lincoln Electric Holdings Inc provided additional information to their SEC Filing as exhibits

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Ticker: LECO
CIK: 59527
Form Type: 10-Q Quarterly Report
Accession Number: 0000059527-18-000032
Submitted to the SEC: Fri Oct 26 2018 5:36:19 AM EST
Accepted by the SEC: Fri Oct 26 2018
Period: Sunday, September 30, 2018
Industry: Metalworkg Machinery And Equipment

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Lincoln Electric Holdings Inc (LECO) SEC Filing 10-Q Quarterly report for the period ending Sunday, September 30, 2018

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