1Q’12 Sales increase of 21.4%;1Q Operating income increase of 54.1%;1Q EPS of $0.76, an increase of 38.2%
CLEVELAND, Ohio, U.S.A., April 25, 2012 -- Lincoln Electric Holdings, Inc. (the “Company”) (Nasdaq: LECO) yesterday reported first quarter 2012 net income of $64.2 million, or $0.76 per diluted share. Sales were $727.1 million in the first quarter 2012 versus $599.2 million in the comparable 2011 period, an increase of 21.4%. Operating income for the first quarter increased $32.2 million to $91.7 million, or 12.6% of sales, from $59.5 million, or 9.9% of sales, in the comparable 2011 period.
Net income for the first quarter 2012 was $64.2 million, or $0.76 per diluted share, compared with net income of $46.9 million, or $0.55 per diluted share, in the first quarter 2011. The effective tax rate for the first quarter 2012 was 31.0% compared with 22.5% in 2011. The first quarter 2011 included a favorable $4.8 million tax adjustment for tax audit settlements.
"We are pleased to report excellent results for the first quarter of 2012,” said John M. Stropki, Chairman and Chief Executive Officer. “Sales levels for the quarter were a record and overall profitability and operating cash flows improved significantly. Our strong operating performance in the quarter was the result of improved product mix, better pricing dynamics in all of our business segments and the positive impact from recent acquisitions. The continued strength in both sales and profitability during the quarter were particularly positive considering the ongoing economic challenges in many of our key markets.
“The excellent start to 2012 and improved results from all of our operating segments provides the Company with good momentum to capture available market opportunities in an uncertain economic and political environment. We are seeing robust year over year sales growth with particular strength in equipment and automation. We remain focused on our global growth strategies, which include acquisitions, new product introductions and increasing our commercial presence worldwide. In addition, our ongoing attention to continuous improvements in our operations will provide the increased operating leverage and flexibility required to execute our long-term strategic objectives."
Net cash provided by operating activities increased $62.5 million to $79.2 million in the first quarter from $16.7 million for the comparable period in 2011. During the quarter, the Company repaid its $80.0 million senior unsecured note. The Company also returned $34.3 million to shareholders through the payment of $14.2 million in dividends and the repurchase of $20.1 million, or 432,384 of the Company’s shares, for treasury during the three months ended March 31, 2012.
The Company’s Board of Directors declared a quarterly cash dividend of $0.17 per share, which was paid on April 13, 2012 to holders of record as of March 31, 2012.
Adjusted operating income, adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures that management believes are important to investors to evaluate and compare the Company's financial performance from period to period. Management uses this information in assessing and evaluating the Company's underlying operating performance. Non-GAAP financial measures should be read in conjunction with the GAAP financial measures, as non-GAAP measures are a supplement to, and not a replacement for, GAAP financial measures. Please refer to the attached schedule for a reconciliation of non-GAAP financial measures to the related GAAP financial measures.
Lincoln Electric is the world leader in the design, development and manufacture of arc welding products, robotic arc welding systems, plasma and oxyfuel cutting equipment and has a leading global position in the brazing and soldering alloys market. Headquartered in Cleveland, Ohio, Lincoln has 44 manufacturing locations, including operations and joint ventures in 20 countries and a worldwide network of distributors and sales offices covering more than 160 countries. For more information about Lincoln Electric and its products and services, visit the Company’s website at http://www.lincolnelectric.com
The Company’s expectations and beliefs concerning the future contained in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect management’s current expectations and involve a number of risks and uncertainties. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “guidance” or words of similar meaning. Actual results may differ materially from such statements due to a variety of factors that could adversely affect the Company’s operating results. The factors include, but are not limited to: general economic and market conditions; the effectiveness of operating initiatives; currency exchange and interest rates; adverse outcome of pending or potential litigation; possible acquisitions; market risks and price fluctuations related to the purchase of commodities and energy; global regulatory complexity; and the possible effects of events beyond our control, such as political unrest, acts of terror and natural disasters, on the Company or its customers, suppliers and the economy in general. For additional discussion, see “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K.