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Lincoln Electric Reports Fourth Quarter and Full Year 2021 Results
المصدر: Nasdaq GlobeNewswire / 10 فبراير 2022 07:30:01 America/New_York
Fourth Quarter 2021 Highlights- Net sales increase 21.7% to record $844.3 million on 19.0% higher organic sales
- Operating income margin of 14.3%; Adjusted operating income margin of 14.5%
- EPS increases 15.7% to $1.25; Adjusted EPS increases 29.8% to record $1.61
Full Year 2021 Highlights
- Record Net sales of $3.2 billion with 19.3% higher organic sales
- Operating income margin of 14.3%; Adjusted operating income margin of 14.8%
- EPS increases 34.5% to $4.60; Adjusted EPS increases 49.9% to record $6.22
- ROIC increases 620 basis points to 23.9%
- $286 million returned to shareholders through dividends and share repurchases
CLEVELAND, Feb. 10, 2022 (GLOBE NEWSWIRE) -- Lincoln Electric Holdings, Inc. (the “Company”) (Nasdaq: LECO) today reported fourth quarter 2021 net income of $74.4 million, or diluted earnings per share (EPS) of $1.25, which includes special item after-tax charges of $21.8 million, or $0.36 EPS. Special item charges primarily relate to the termination of a pension plan. This compares with prior year period net income of $65.1 million, or $1.08 EPS, which included special item after-tax charges of $9.9 million, or $0.16 EPS. Excluding these items, fourth quarter 2021 Adjusted net income was $96.2 million, or $1.61 Adjusted EPS. This compares with Adjusted net income of $75.0 million, or $1.24 adjusted EPS, in the prior year period.
Fourth quarter 2021 sales increased 21.7% to $844.3 million from a 19.0% increase in organic sales and a 4.7% benefit from acquisitions, partially offset by 2.0% unfavorable foreign exchange. Operating income for the fourth quarter 2021 was $120.3 million, or 14.3% of sales, including special item charges of $1.8 million. This compares with operating income of $83.4 million, or 12.0% of sales, in the prior year period. Excluding special items, Adjusted operating income was $122.2 million, or 14.5% of sales, as compared with $92.9 million, or 13.4% of sales, in the prior year period.
“We finished the year with record sales and adjusted EPS while navigating a challenging operating environment,” stated Christopher L. Mapes, Chairman, President and Chief Executive Officer. “Our team did an outstanding job during another rigorous year putting our customers first while advancing our strategic initiatives, innovation, and operational excellence.” Mapes continued, “Looking ahead, we are well-positioned to capitalize on growth opportunities as conditions improve and capital investments accelerate, and are raising our 2025 Higher Standard strategy growth and profitability goals to reflect the superior value we will generate through this cycle.”
Twelve Months 2021 Summary
Net income for the twelve months ended December 31, 2021 was $276.5 million, or $4.60 EPS. This compares with $206.1 million, or $3.42 EPS, in 2020. Reported EPS includes special item after-tax charges of $96.9 million or $1.62 EPS, as compared with special item after-tax net charges of $43.8 million, or $0.73 EPS in 2020. Excluding these items, full year 2021 Adjusted net income for the year ended December 31, 2021 increased 49.4% to $373.3 million, or $6.22 Adjusted EPS, compared with $249.9 million, or $4.15 Adjusted EPS, in 2020.
Sales increased 21.8% to $3.2 billion in the twelve months ended December 31, 2021 from a 19.3% increase in organic sales, a 1.9% benefit from acquisitions and 0.6% favorable foreign exchange. Operating income for full year 2021 was $461.7 million, or 14.3% of sales, as compared with $282.1 million, or 10.6% of sales, in 2020. Excluding special items, Adjusted operating income was $479.2 million, or 14.8% of sales, as compared with $328.3 million, or 12.4% of sales, in 2020.
Webcast Information
A conference call to discuss fourth quarter 2021 financial results will be webcast live today, February 10, 2022, at 10:00 a.m., Eastern Time. This webcast is accessible at https://ir.lincolnelectric.com. Listeners should go to the web site prior to the call to register, download and install any necessary audio software. A replay of the webcast will be available on the Company's web site.
If investors would like to ask questions, please dial (877) 344-3899 (domestic) or (315) 625-3087 (international) and use confirmation code 2165948. Telephone participants are asked to dial in 10 - 15 minutes prior to the start of the conference call.
Financial results for the fourth quarter 2021 can also be obtained at https://ir.lincolnelectric.com.
About Lincoln Electric
Lincoln Electric is the world leader in the engineering, design, and manufacturing of advanced arc welding solutions, automated joining, assembly and cutting systems, plasma and oxy-fuel cutting equipment, and has a leading global position in brazing and soldering alloys. Lincoln is recognized as the Welding Expert™ for its leading material science, software development, automation engineering, and application expertise, which advance customers’ fabrication capabilities to help them build a better world. Headquartered in Cleveland, Ohio, Lincoln has 56 manufacturing locations in 19 countries and a worldwide network of distributors and sales offices serving customers in over 160 countries. For more information about Lincoln Electric and its products and services, visit the Company’s website at https://www.lincolnelectric.com.
Non-GAAP Information
Adjusted operating income, Adjusted net income, Adjusted EBIT, Adjusted effective tax rate, Adjusted diluted earnings per share, Organic sales, Cash conversion and Return on invested capital are non-GAAP financial measures. Management uses non-GAAP measures to assess the Company's operating performance by excluding certain disclosed special items that management believes are not representative of the Company's core business. Management believes that excluding these special items enables them to make better period-over-period comparisons and benchmark the Company's operational performance against other companies in its industry more meaningfully. Furthermore, management believes that non-GAAP financial measures provide investors with meaningful information that provides a more complete understanding of Company operating results and enables investors to analyze financial and business trends more thoroughly. Non-GAAP financial measures should not be viewed in isolation, are not a substitute for GAAP measures and have limitations including, but not limited to, their usefulness as comparative measures as other companies may define their non-GAAP measures differently.
Forward-Looking Statements
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, financial and market conditions; the effectiveness of operating initiatives; completion of planned divestitures; interest rates; disruptions, uncertainty or volatility in the credit markets that may limit our access to capital; currency exchange rates and devaluations; adverse outcome of pending or potential litigation; actual costs of the Company’s rationalization plans; possible acquisitions, including the Company’s ability to successfully integrate acquisitions; market risks and price fluctuations related to the purchase of commodities and energy; global regulatory complexity; the effects of changes in tax law; tariff rates in the countries where the Company conducts business; and the possible effects of events beyond our control, such as political unrest, acts of terror, natural disasters and pandemics, including the current coronavirus disease ("COVID-19") pandemic, 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 for the year ended December 31, 2020.
Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)Consolidated Statements of Income
Fav (Unfav) to Three Months Ended December 31, Prior Year 2021 % of Sales 2020 % of Sales $ % Net sales $ 844,251 100.0 % $ 693,794 100.0 % $ 150,457 21.7 % Cost of goods sold 571,594 67.7 % 464,540 67.0 % (107,054 ) (23.0 ) % Gross profit 272,657 32.3 % 229,254 33.0 % 43,403 18.9 % Selling, general & administrative expenses 150,758 17.9 % 136,362 19.7 % (14,396 ) (10.6 ) % Rationalization and asset impairment charges 1,550 0.2 % 9,452 1.4 % 7,902 83.6 % Operating income 120,349 14.3 % 83,440 12.0 % 36,909 44.2 % Interest expense, net 5,478 0.6 % 5,082 0.7 % (396 ) (7.8 ) % Other income (expense) (43,302 ) (5.1 ) % 2,774 0.4 % (46,076 ) (1,661.0 ) % Income before income taxes 71,569 8.5 % 81,132 11.7 % (9,563 ) (11.8 ) % Income taxes (2,841 ) (0.3 ) % 16,062 2.3 % 18,903 117.7 % Effective tax rate (4.0 ) % 19.8 % 23.8 % Net income including non-controlling interests 74,410 8.8 % 65,070 9.4 % 9,340 14.4 % Non-controlling interests in subsidiaries’ income (loss) (17 ) — (8 ) — (9 ) 112.5 % Net income $ 74,427 8.8 % $ 65,078 9.4 % $ 9,349 14.4 % Basic earnings per share $ 1.26 $ 1.09 $ 0.17 15.6 % Diluted earnings per share $ 1.25 $ 1.08 $ 0.17 15.7 % Weighted average shares (basic) 58,842 59,567 Weighted average shares (diluted) 59,637 60,301 Fav (Unfav) to Twelve Months Ended December 31, Prior Year 2021 % of Sales 2020 % of Sales $ % Net sales $ 3,234,180 100.0 % $ 2,655,400 100.0 % $ 578,780 21.8 % Cost of goods sold 2,165,575 67.0 % 1,784,059 67.2 % (381,516 ) (21.4 ) % Gross profit 1,068,605 33.0 % 871,341 32.8 % 197,264 22.6 % Selling, general & administrative expenses 597,109 18.5 % 543,802 20.5 % (53,307 ) (9.8 ) % Rationalization and asset impairment charges 9,827 0.3 % 45,468 1.7 % 35,641 78.4 % Operating income 461,669 14.3 % 282,071 10.6 % 179,598 63.7 % Interest expense, net 22,214 0.7 % 21,973 0.8 % (241 ) (1.1 ) % Other income (expense) (114,457 ) (3.5 ) % 3,942 0.1 % (118,399 ) (3,003.5 ) % Income before income taxes 324,998 10.0 % 264,040 9.9 % 60,958 23.1 % Income taxes 48,418 1.5 % 57,896 2.2 % 9,478 16.4 % Effective tax rate 14.9 % 21.9 % 7.0 % Net income including non-controlling interests 276,580 8.6 % 206,144 7.8 % 70,436 34.2 % Non-controlling interests in subsidiaries’ income (loss) 114 — 29 — 85 293.1 % Net income $ 276,466 8.5 % $ 206,115 7.8 % $ 70,351 34.1 % Basic earnings per share $ 4.66 $ 3.46 $ 1.20 34.7 % Diluted earnings per share $ 4.60 $ 3.42 $ 1.18 34.5 % Weighted average shares (basic) 59,309 59,633 Weighted average shares (diluted) 60,062 60,248 Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands)
(Unaudited)Balance Sheet Highlights
Selected Consolidated Balance Sheet Data December 31, 2021 December 31, 2020 Cash and cash equivalents $ 192,958 $ 257,279 Accounts receivable, net 429,074 373,487 Inventories 539,919 381,258 Total current assets 1,289,593 1,112,343 Property, plant and equipment, net 511,744 522,092 Total assets 2,592,307 2,314,453 Trade accounts payable 330,230 256,530 Total current liabilities 755,905 549,449 Short-term debt (1) 52,730 2,734 Long-term debt, less current portion 717,089 715,456 Total equity 863,909 790,250 Operating Working Capital December 31, 2021 December 31, 2020 Average operating working capital to Net sales (2) 16.3 % 17.4 % Invested Capital December 31, 2021 December 31, 2020 Short-term debt (1) $ 52,730 $ 2,734 Long-term debt, less current portion 717,089 715,456 Total debt 769,819 718,190 Total equity 863,909 790,250 Invested capital $ 1,633,728 $ 1,508,440 Total debt / invested capital 47.1 % 47.6 % (1) Includes current portion of long-term debt. (2) Average operating working capital to Net sales is defined as the sum of Accounts receivable, Inventories and contract assets less Trade accounts payable and contract liabilities as of period end divided by annualized rolling three months of Net sales. Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)Non-GAAP Financial Measures
Three Months Ended December 31, Twelve Months Ended December 31, 2021 2020 2021 2020 Operating income as reported $ 120,349 $ 83,440 $ 461,669 $ 282,071 Special items (pre-tax): Rationalization and asset impairment charges (2) 1,550 9,452 9,827 45,468 Acquisition transaction costs (3) — — 1,923 — Amortization of step up in value of acquired inventories (4) 273 — 5,804 806 Adjusted operating income (1) $ 122,172 $ 92,892 $ 479,223 $ 328,345 As a percent of total sales 14.5 % 13.4 % 14.8 % 12.4 % Net income as reported $ 74,427 $ 65,078 $ 276,466 $ 206,115 Special items: Rationalization and asset impairment charges (2) 1,550 9,452 9,827 45,468 Acquisition transaction costs (3) — — 1,923 — Pension settlement charges (5) 46,404 1,597 126,502 8,119 Amortization of step up in value of acquired inventories (4) 273 — 5,804 806 Tax effect of Special items (6) (26,451 ) (1,131 ) (47,188 ) (10,594 ) Adjusted net income (1) 96,203 74,996 373,334 249,914 Non-controlling interests in subsidiaries’ income (loss) (17 ) (8 ) 114 29 Interest expense, net 5,478 5,082 22,214 21,973 Income taxes as reported (2,841 ) 16,062 48,418 57,896 Tax effect of Special items (6) 26,451 1,131 47,188 10,594 Adjusted EBIT (1) $ 125,274 $ 97,263 $ 491,268 $ 340,406 Effective tax rate as reported (4.0 ) % 19.8 % 14.9 % 21.9 % Net special item tax impact 23.7 % (1.1 ) % 5.5 % (0.4 ) % Adjusted effective tax rate (1) 19.7 % 18.7 % 20.4 % 21.5 % Diluted earnings per share as reported $ 1.25 $ 1.08 $ 4.60 $ 3.42 Special items per share 0.36 0.16 1.62 0.73 Adjusted diluted earnings per share (1) $ 1.61 $ 1.24 $ 6.22 $ 4.15 Weighted average shares (diluted) 59,637 60,301 60,062 60,248 (1) Adjusted operating income, Adjusted net income, Adjusted EBIT, Adjusted effective tax rate and Adjusted diluted earnings per share are non-GAAP financial measures. Refer to Non-GAAP Information section. (2) Primarily related to severance, gains or losses on the disposal of assets and asset impairments of long-lived assets. (3) Related to acquisitions and are included in Selling, general & administrative expenses. (4) Related to acquisitions and are included in Cost of goods sold. (5) Settlement charges related to lump sum pension payments and annuity purchase associated with the termination of a pension plan and are included in Other income (expense). (6) Includes the net tax impact of Special items recorded during the respective periods. The tax effect of Special items impacting pre-tax income was calculated as the pre-tax amount multiplied by the applicable tax rate. The applicable tax rates reflect the taxable jurisdiction and nature of each Special item.
Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)Non-GAAP Financial Measures
Twelve Months Ended December 31, Return on Invested Capital 2021 2020 Net income as reported $ 276,466 $ 206,115 Rationalization and asset impairment charges 9,827 45,468 Acquisition transaction costs 1,923 — Pension settlement charges 126,502 8,119 Amortization of step up in value of acquired inventories 5,804 806 Tax effect of Special items (2) (47,188 ) (10,594 ) Adjusted net income (1) $ 373,334 $ 249,914 Plus: Interest expense, net of tax of $5,987 and $6,026 in 2021 and 2020, respectively 17,794 17,933 Less: Interest income, net of tax of $395 and $500 in 2021 and 2020, respectively 1,172 1,486 Adjusted net income before tax-effected interest $ 389,956 $ 266,361 Invested Capital December 31, 2021 December 31, 2020 Short-term debt $ 52,730 $ 2,734 Long-term debt, less current portion 717,089 715,456 Total debt 769,819 718,190 Total equity 863,909 790,250 Invested capital $ 1,633,728 $ 1,508,440 Return on invested capital (1) 23.9 % 17.7 % (1) Adjusted net income and Return on invested capital are non-GAAP financial measures. Refer to Non-GAAP Information section. (2) Includes the net tax impact of Special items recorded during the respective periods. The tax effect of Special items impacting pre-tax income was calculated as the pre-tax amount multiplied by the applicable tax rate. The applicable tax rates reflect the taxable jurisdiction and nature of each Special item. Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)Condensed Consolidated Statements of Cash Flows
Three Months Ended December 31, 2021 2020 OPERATING ACTIVITIES: Net income $ 74,427 $ 65,078 Non-controlling interests in subsidiaries’ income (loss) (17 ) (8 ) Net income including non-controlling interests 74,410 65,070 Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities: Rationalization and asset impairment net charges 108 (92 ) Depreciation and amortization 20,588 19,926 Equity earnings in affiliates, net (100 ) (85 ) Pension settlement charges 46,404 1,597 Other non-cash items, net (10,777 ) 3,617 Changes in operating assets and liabilities, net of effects from acquisitions: Decrease in accounts receivable 5,368 10,433 (Increase) decrease in inventories (25,491 ) 26,181 Increase in trade accounts payable 27,413 24,414 Net change in other current assets and liabilities (34,580 ) (9,621 ) Net change in other long-term assets and liabilities 6,595 (5,639 ) NET CASH PROVIDED BY OPERATING ACTIVITIES 109,938 135,801 INVESTING ACTIVITIES: Capital expenditures (16,091 ) (22,085 ) Acquisition of businesses, net of cash acquired 2,499 — Proceeds from sale of property, plant and equipment 2,934 710 Other investing activities — 2,321 NET CASH USED BY INVESTING ACTIVITIES (10,658 ) (19,054 ) FINANCING ACTIVITIES: Net change in borrowings 13,673 1,375 Proceeds from exercise of stock options 11,311 9,231 Purchase of shares for treasury (60,678 ) (257 ) Cash dividends paid to shareholders (30,134 ) (29,173 ) NET CASH USED BY FINANCING ACTIVITIES (65,828 ) (18,824 ) Effect of exchange rate changes on Cash and cash equivalents (1,053 ) 6,877 INCREASE IN CASH AND CASH EQUIVALENTS 32,399 104,800 Cash and cash equivalents at beginning of period 160,559 152,479 Cash and cash equivalents at end of period $ 192,958 $ 257,279 Cash dividends paid per share $ 0.51 $ 0.49
Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share amounts)
(Unaudited)Year Ended December 31, 2021 2020 OPERATING ACTIVITIES: Net income $ 276,466 $ 206,115 Non-controlling interests in subsidiaries’ income (loss) 114 29 Net income including non-controlling interests 276,580 206,144 Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities: Rationalization and asset impairment net (gains) charges (1,054 ) 21,835 Depreciation and amortization 81,146 80,492 Equity earnings in affiliates, net (499 ) (408 ) Pension settlement charges 126,502 8,119 Other non-cash items, net (21,744 ) (5,675 ) Changes in operating assets and liabilities, net of effects from acquisitions: (Increase) decrease in accounts receivable (65,844 ) 3,582 (Increase) decrease in inventories (154,347 ) 22,751 Increase (decrease) in trade accounts payable 82,394 (17,919 ) Net change in other current assets and liabilities 44,379 37,021 Net change in other long-term assets and liabilities (2,450 ) (4,580 ) NET CASH PROVIDED BY OPERATING ACTIVITIES 365,063 351,362 INVESTING ACTIVITIES: Capital expenditures (62,531 ) (59,201 ) Acquisition of businesses, net of cash acquired (156,106 ) — Proceeds from sale of property, plant and equipment 6,781 7,667 Other investing activities 6,500 2,321 NET CASH USED BY INVESTING ACTIVITIES (205,356 ) (49,213 ) FINANCING ACTIVITIES: Net change in borrowings 45,968 (31,760 ) Proceeds from exercise of stock options 19,232 17,192 Purchase of shares for treasury (164,526 ) (113,455 ) Cash dividends paid to shareholders (121,851 ) (118,118 ) Other financing activities (763 ) — NET CASH USED BY FINANCING ACTIVITIES (221,940 ) (246,141 ) Effect of exchange rate changes on Cash and cash equivalents (2,088 ) 1,708 (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (64,321 ) 57,716 Cash and cash equivalents at beginning of period 257,279 199,563 Cash and cash equivalents at end of period $ 192,958 $ 257,279 Cash dividends paid per share $ 2.04 $ 1.96
Lincoln Electric Holdings, Inc.
Segment Highlights (1)
(In thousands)
(Unaudited)Americas International The Harris Corporate / Welding Welding Products Group Eliminations Consolidated Three months ended December 31, 2021 Net sales $ 480,263 $ 245,529 $ 118,459 $ — $ 844,251 Inter-segment sales 30,657 8,071 1,720 (40,448 ) — Total sales $ 510,920 $ 253,600 $ 120,179 $ (40,448 ) $ 844,251 Net income $ 74,427 As a percent of total sales 8.8 % EBIT (1) $ 40,258 $ 26,824 $ 12,320 $ (2,355 ) $ 77,047 As a percent of total sales 7.9 % 10.6 % 10.3 % 9.1 % Special items charges (gains) (3) 43,450 1,539 3,238 — 48,227 Adjusted EBIT (2) $ 83,708 $ 28,363 $ 15,558 $ (2,355 ) $ 125,274 As a percent of total sales 16.4 % 11.2 % 12.9 % 14.8 % Three months ended December 31, 2020 Net sales $ 386,571 $ 214,782 $ 92,441 $ — $ 693,794 Inter-segment sales 27,734 4,827 1,658 (34,219 ) — Total sales $ 414,305 $ 219,609 $ 94,099 $ (34,219 ) $ 693,794 Net income $ 65,078 As a percent of total sales 9.4 % EBIT (1) $ 68,456 $ 4,949 $ 13,362 $ (553 ) $ 86,214 As a percent of total sales 16.5 % 2.3 % 14.2 % 12.4 % Special items charges (gains) (4) 748 10,301 — — 11,049 Adjusted EBIT (2) $ 69,204 $ 15,250 $ 13,362 $ (553 ) $ 97,263 As a percent of total sales 16.7 % 6.9 % 14.2 % 14.0 % (1) EBIT is defined as Operating income plus Other income (expense). (2) The primary profit measure used by management to assess segment performance is Adjusted EBIT. EBIT for each operating segment is adjusted for special items to derive Adjusted EBIT. (3) Special items in 2021 reflect Rationalization and asset impairment charges of $1,550 primarily in International Welding, pension settlement charges of $43,439 and $2,965 in Americas Welding and The Harris Products Group, respectively, and amortization of the step up in value of acquired inventories of $273 in The Harris Products Group, related to acquisitions. (4) Special items in 2020 reflect Rationalization and asset impairment net charges of ($849) and $10,301 in Americas Welding and International Welding, respectively, and pension settlement charges of $1,597 in Americas Welding. Lincoln Electric Holdings, Inc.
Segment Highlights
(In thousands)
(Unaudited)Americas International The Harris Corporate / Welding Welding Products Group Eliminations Consolidated Year ended December 31, 2021 Net sales $ 1,824,481 $ 948,125 $ 461,574 $ — $ 3,234,180 Inter-segment sales 140,650 26,331 8,096 (175,077 ) — Total sales $ 1,965,131 $ 974,456 $ 469,670 $ (175,077 ) $ 3,234,180 Net income $ 276,466 As a percent of total sales 8.5 % EBIT (1) $ 205,902 $ 90,974 $ 64,662 $ (14,326 ) $ 347,212 As a percent of total sales 10.5 % 9.3 % 13.8 % 10.7 % Special items charges (gains) (3) 123,114 15,234 3,785 1,923 144,056 Adjusted EBIT (2) $ 329,016 $ 106,208 $ 68,447 $ (12,403 ) $ 491,268 As a percent of total sales 16.7 % 10.9 % 14.6 % 15.2 % Year ended December 31, 2020 Net sales $ 1,509,870 $ 786,809 $ 358,721 $ — $ 2,655,400 Inter-segment sales 109,378 18,494 7,034 (134,906 ) — Total sales $ 1,619,248 $ 805,303 $ 365,755 $ (134,906 ) $ 2,655,400 Net income $ 206,115 As a percent of total sales 7.8 % EBIT (1) $ 210,739 $ 25,575 $ 55,154 $ (5,455 ) $ 286,013 As a percent of total sales 13.0 % 3.2 % 15.1 % 10.8 % Special items charges (gains) (4) 34,989 19,404 — — 54,393 Adjusted EBIT (2) $ 245,728 $ 44,979 $ 55,154 $ (5,455 ) $ 340,406 As a percent of total sales 15.2 % 5.6 % 15.1 % 12.8 % (1) EBIT is defined as Operating income plus Other income (expense). (2) The primary profit measure used by management to assess segment performance is Adjusted EBIT. EBIT for each operating segment is adjusted for special items to derive Adjusted EBIT. (3) Special items in 2021 reflect pension settlement charges of $123,091, $2,965 and $446 in Americas Welding, The Harris Products Group and International Welding, respectively, Rationalization and asset impairment charges of $9,827 primarily in International Welding, amortization of the step up in value of acquired inventories of $4,984 and $820 in International Welding and The Harris Products Group, respectively, and acquisition transaction costs of $1,923 in Corporate/Eliminations related to acquisitions. (4) Special items in 2020 reflect Rationalization and asset impairment charges of $26,870 and $18,598 in Americas Welding and International Welding, respectively, amortization of the step up in value of acquired inventories of $806 in International Welding related to an acquisition, and pension settlement charges of $8,119 in Americas Welding. Lincoln Electric Holdings, Inc.
Change in Net Sales by Segment
(In thousands)
(Unaudited)Three Months Ended December 31st Change in Net Sales by Segment
Change in Net Sales due to: Net Sales Foreign Net Sales 2020 Volume Acquisitions Price Exchange 2021 Operating Segments Americas Welding $ 386,571 $ 35,759 $ — $ 56,615 $ 1,318 $ 480,263 International Welding 214,782 (1,764 ) 17,517 29,920 (14,926 ) 245,529 The Harris Products Group 92,441 4,997 15,073 6,428 (480 ) 118,459 Consolidated $ 693,794 $ 38,992 $ 32,590 $ 92,963 $ (14,088 ) $ 844,251 % Change Americas Welding 9.3 % — 14.6 % 0.3 % 24.2 % International Welding (0.8 ) % 8.2 % 13.9 % (6.9 ) % 14.3 % The Harris Products Group 5.4 % 16.3 % 7.0 % (0.5 ) % 28.1 % Consolidated 5.6 % 4.7 % 13.4 % (2.0 ) % 21.7 % Twelve Months Ended December 31st Change in Net Sales by Segment
Change in Net Sales due to: Net Sales Foreign Net Sales 2020 Volume Acquisitions Price Exchange 2021 Operating Segments Americas Welding $ 1,509,870 $ 164,595 $ — $ 136,967 $ 13,049 $ 1,824,481 International Welding 786,809 62,033 24,473 70,457 4,353 948,125 The Harris Products Group 358,721 33,772 24,953 44,459 (331 ) 461,574 Consolidated $ 2,655,400 $ 260,400 $ 49,426 $ 251,883 $ 17,071 $ 3,234,180 % Change Americas Welding 10.9 % — 9.1 % 0.9 % 20.8 % International Welding 7.9 % 3.1 % 9.0 % 0.6 % 20.5 % The Harris Products Group 9.4 % 7.0 % 12.4 % (0.1 ) % 28.7 % Consolidated 9.8 % 1.9 % 9.5 % 0.6 % 21.8 % 
Contact Amanda Butler Vice President, Investor Relations & Communications Tel: 216.383.2534 Email: Amanda_Butler@lincolnelectric.com
- Net sales increase 21.7% to record $844.3 million on 19.0% higher organic sales