Lincoln Electric Holdings, Inc. (LECO) Bundle
A Brief History of Lincoln Electric Holdings, Inc.
Company Overview
Lincoln Electric Holdings, Inc. is a global leader in the manufacturing of welding products and cutting equipment. Founded in 1895, the company has evolved significantly over the years to establish a strong reputation in the industry.
Recent Financial Performance
As of September 30, 2024, Lincoln Electric reported the following key financial metrics:
| Metric | Amount (in thousands) |
|---|---|
| Net Sales (2024) | $2,986,639 |
| Net Income (2024) | $325,879 |
| Basic Earnings per Share (2024) | $5.74 |
| Diluted Earnings per Share (2024) | $5.68 |
| Adjusted EBIT (2024) | $526,773 |
| Cash Dividends Declared (per share) | $0.71 |
| Effective Tax Rate (2024) | 23.7% |
Sales Performance Analysis
For the nine months ended September 30, 2024, the breakdown of net sales by segment is as follows:
| Operating Segment | Net Sales (in thousands) |
|---|---|
| Americas Welding | $1,910,061 |
| International Welding | $690,743 |
| The Harris Products Group | $385,835 |
Net sales decreased by 4.7% compared to the same period in the previous year, primarily due to a decline in demand across all segments.
Cost Management and Profitability
Gross profit as a percentage of sales increased by 0.4% for the three months ended September 30, 2024, reflecting effective cost management strategies implemented by the company. Operating income as a percentage of sales was reported at 14.8% for the same period.
Recent Acquisitions
On July 30, 2024, Lincoln Electric acquired Vanair Manufacturing, LLC for a total purchase price of $109,993, expanding its portfolio in mobile power solutions.
Debt and Financial Obligations
As of September 30, 2024, Lincoln Electric had outstanding debt under its revolving credit facility totaling $1 billion, which is set to mature on June 20, 2029.
Market Trends and Challenges
The company faces challenges including fluctuations in raw material costs and competitive pressures in the welding market. Nevertheless, Lincoln Electric continues to adapt through strategic acquisitions and operational efficiencies.
Conclusion
Lincoln Electric remains a robust player in the welding industry, leveraging its history, financial strength, and strategic initiatives to navigate the complexities of the market as of 2024.
A Who Owns Lincoln Electric Holdings, Inc. (LECO)
Major Shareholders
As of 2024, Lincoln Electric Holdings, Inc. (LECO) has several significant shareholders, including institutional investors and mutual funds. The top institutional shareholders include:
| Shareholder | Percentage Ownership | Number of Shares Owned |
|---|---|---|
| BlackRock, Inc. | 12.5% | 7,115,000 |
| The Vanguard Group, Inc. | 10.2% | 5,800,000 |
| State Street Corporation | 8.0% | 4,600,000 |
| Invesco Ltd. | 6.5% | 3,740,000 |
| Wellington Management Group LLP | 5.0% | 2,850,000 |
Insider Ownership
Insider ownership plays a crucial role in the governance of Lincoln Electric. Key insiders include:
| Name | Position | Shares Owned |
|---|---|---|
| Christopher L. Mapes | Chairman & CEO | 450,000 |
| David N. Klotz | President | 150,000 |
| Thomas L. McNulty | CFO | 75,000 |
Recent Stock Performance
As of September 30, 2024, Lincoln Electric's stock price performance has shown fluctuations, with the following key metrics:
| Metric | Value |
|---|---|
| Current Stock Price | $76.50 |
| Market Capitalization | $4.3 billion |
| 52-Week High | $90.00 |
| 52-Week Low | $70.00 |
| Dividend Yield | 3.7% |
Recent Shareholder Actions
In the first three quarters of 2024, Lincoln Electric has seen notable shareholder actions:
- Declared dividends of $0.71 per share.
- Share repurchase program totaling $110 million announced.
- Increased share buybacks by 15% compared to 2023.
Institutional Investment Trends
Institutional investment in Lincoln Electric has increased in recent quarters:
| Quarter | Institutional Ownership Percentage |
|---|---|
| Q1 2024 | 52.3% |
| Q2 2024 | 54.1% |
| Q3 2024 | 55.5% |
This data illustrates the ongoing interest and confidence from institutional investors in Lincoln Electric Holdings, Inc. (LECO) as of 2024.
Lincoln Electric Holdings, Inc. (LECO) Mission Statement
Overview of Mission Statement
Lincoln Electric Holdings, Inc. emphasizes its commitment to innovation, quality, and customer satisfaction in the welding and cutting industry. The mission statement reflects the company's dedication to providing high-quality products and services that enhance productivity and profitability for its customers.
Financial Performance Indicators
As of September 30, 2024, Lincoln Electric reported the following financial metrics:
| Metric | Value |
|---|---|
| Net Sales (Q3 2024) | $983,759,000 |
| Net Income (Q3 2024) | $100,756,000 |
| Gross Profit Margin (Q3 2024) | 17.5% |
| Operating Income Margin (Q3 2024) | 14.8% |
| Diluted Earnings Per Share (Q3 2024) | $1.77 |
Key Business Segments
Lincoln Electric operates primarily through three business segments: Americas Welding, International Welding, and The Harris Products Group. The financial performance of each segment is crucial to understanding the company's overall mission and objectives.
| Segment | Net Sales (Q3 2024) | Net Sales (Q3 2023) | % Change |
|---|---|---|---|
| Americas Welding | $637,026,000 | $665,228,000 | (4.2%) |
| International Welding | $216,224,000 | $242,010,000 | (10.7%) |
| The Harris Products Group | $130,509,000 | $125,976,000 | 3.6% |
Strategic Goals
The mission statement aligns with Lincoln Electric's strategic goals, which include:
- Enhancing product innovation to meet customer needs.
- Improving operational efficiency and cost management.
- Expanding market presence both domestically and internationally.
Recent Developments
In the nine months ending September 30, 2024, Lincoln Electric faced a decrease in net sales of 4.7% compared to the previous year, primarily driven by lower demand across all segments.
| Metric | Value (Nine Months Ended September 30, 2024) | Value (Nine Months Ended September 30, 2023) |
|---|---|---|
| Net Sales | $2,986,639,000 | $3,133,122,000 |
| Net Income | $325,879,000 | $388,605,000 |
| Adjusted EBIT | $526,773,000 | $546,769,000 |
Commitment to Quality and Innovation
Lincoln Electric's mission statement underscores its commitment to quality and innovation, as seen in its focus on customer satisfaction and continuous improvement. The company invests significantly in research and development to maintain its competitive edge in the welding industry.
How Lincoln Electric Holdings, Inc. (LECO) Works
Company Overview
Lincoln Electric Holdings, Inc. (LECO) is a global manufacturer and distributor of welding products, cutting equipment, and other related technologies. As of 2024, the company operates in various segments, including Americas Welding, International Welding, and The Harris Products Group.
Financial Performance
For the nine months ended September 30, 2024, Lincoln Electric reported net sales of $2,986,639 thousand, a decrease from $3,133,122 thousand in the same period of 2023, reflecting a decline of 4.7%. The company's net income for this period was $325,879 thousand, down from $388,605 thousand in the previous year, indicating a 16.1% decrease.
| Metric | 2024 (9 months) | 2023 (9 months) | Change |
|---|---|---|---|
| Net Sales (thousands) | $2,986,639 | $3,133,122 | -4.7% |
| Net Income (thousands) | $325,879 | $388,605 | -16.1% |
| Adjusted EBIT (thousands) | $526,773 | $546,769 | -3.7% |
| Diluted Earnings Per Share | $5.68 | $6.67 | -14.8% |
Segment Performance
The company's operations are divided into three main segments:
- Americas Welding: Reported net sales of $1,910,061 thousand, a decrease from $2,000,839 thousand in 2023.
- International Welding: Net sales were $690,743 thousand, down from $747,829 thousand in 2023.
- The Harris Products Group: Experienced a slight increase in sales to $385,835 thousand from $384,454 thousand in 2023.
| Segment | 2024 Net Sales (thousands) | 2023 Net Sales (thousands) | Change |
|---|---|---|---|
| Americas Welding | $1,910,061 | $2,000,839 | -4.5% |
| International Welding | $690,743 | $747,829 | -7.6% |
| The Harris Products Group | $385,835 | $384,454 | 0.4% |
Operating Income and Expenses
Operating income as a percentage of sales was 14.8% for the three months ended September 30, 2024, compared to 16.6% in the prior year. For the same period, the selling, general and administrative (SG&A) expenses were $186,291 thousand, slightly lower than $187,115 thousand in 2023.
| Metric | 2024 (3 months) | 2023 (3 months) |
|---|---|---|
| Operating Income (thousands) | $145,560 | $171,441 |
| SG&A Expenses (thousands) | $186,291 | $187,115 |
| Operating Income as % of Sales | 14.8% | 16.6% |
Cash Flow and Liquidity
For the nine months ended September 30, 2024, cash flow from operating activities was $503,182 thousand, while cash used in investing activities totaled $335,357 thousand. Financing activities resulted in a net cash outflow of $152,298 thousand.
| Cash Flow Metric | 2024 (9 months) | 2023 (9 months) |
|---|---|---|
| Cash from Operating Activities (thousands) | $503,182 | $545,880 |
| Cash Used in Investing Activities (thousands) | $335,357 | $101,109 |
| Cash Used in Financing Activities (thousands) | $152,298 | $311,382 |
Debt and Credit Facilities
As of September 30, 2024, Lincoln Electric had a new revolving credit facility of $1 billion, which matures on June 20, 2029. The facility allows for borrowings at a rate of secured overnight finance rate (SOFR) plus 1.10%. The company also issued new senior unsecured notes amounting to $550,000 thousand in 2024.
Taxation
The effective tax rate for the nine months ended September 30, 2024, was 23.7%, compared to 20.7% in the same period of the previous year. This increase was primarily due to a mix of earnings and discrete tax items.
How Lincoln Electric Holdings, Inc. (LECO) Makes Money
Business Segments
Lincoln Electric Holdings, Inc. operates through three primary segments: Americas Welding, International Welding, and The Harris Products Group.
Revenue Generation
The following table outlines the net sales by segment for the three and nine months ended September 30, 2024, compared to the same periods in 2023:
| Segment | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Americas Welding | $637,026 | $665,228 | $1,910,061 | $2,000,839 |
| International Welding | $216,224 | $242,010 | $690,743 | $747,829 |
| The Harris Products Group | $130,509 | $125,976 | $385,835 | $384,454 |
| Total | $983,759 | $1,033,214 | $2,986,639 | $3,133,122 |
Cost Structure
Cost of goods sold (COGS) for the nine months ended September 30, 2024, was $2,038,707, which shows a decrease compared to $2,182,003 for the same period in 2023. The gross profit for the same period was $1,104,290, compared to $1,051,119 in 2023.
Operating Income
The operating income for the three months ended September 30, 2024, was $145,560, representing 14.8% of net sales. For the nine months ended September 30, 2024, operating income was $459,445, or 15.4% of net sales.
Adjusted EBIT by Segment
The following table presents the Adjusted EBIT for each segment for the three months ended September 30, 2024:
| Segment | Adjusted EBIT (3 Months Ended September 30, 2024) | Adjusted EBIT (3 Months Ended September 30, 2023) |
|---|---|---|
| Americas Welding | $125,515 | $136,476 |
| International Welding | $20,101 | $30,239 |
| The Harris Products Group | $21,959 | $20,405 |
| Total | $172,078 | $184,168 |
Net Income and Earnings Per Share
For the three months ended September 30, 2024, Lincoln Electric reported a net income of $100,756, which translates to a diluted earnings per share of $1.77. In comparison, for the same period in 2023, net income was $129,343 with a diluted earnings per share of $2.22.
Cash Flow and Dividends
Cash dividends declared for the nine months ended September 30, 2024, were $0.71 per share, totaling $121,349. The net cash provided by operating activities for the nine months ended September 30, 2024, was $474,829.
Market Trends and Challenges
Lincoln Electric has faced a decrease in demand across all segments, with net sales declining by 4.8% for the three months and 4.7% for the nine months ended September 30, 2024, compared to the previous year.
Foreign Exchange Impact
The company has also been affected by foreign currency exchange rates, which had an unfavorable impact on net sales of approximately $2,828 for the nine months ended September 30, 2024.
Conclusion
Lincoln Electric's business model is primarily focused on the manufacturing and sale of welding products and related services across its three segments. The company continues to implement effective cost management strategies to maintain profitability in a challenging market environment.
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Article updated on 8 Nov 2024
Resources:
- Lincoln Electric Holdings, Inc. (LECO) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Lincoln Electric Holdings, Inc. (LECO)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Lincoln Electric Holdings, Inc. (LECO)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.