noodls browser compatibility check

The security settings of your browser are blocking the execution of scripts.

To use noodls, javascript support must be enabled. Please change your browser's security settings to enable javascript.

If you have changed your browser's security settings, you can click here.

related announcements

Company News

Economy, Business and Finance

Lincoln Electric Holdings Inc.

10/30/2025 | Press release | Distributed by Public on 10/30/2025 11:36

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollars in thousands, except per share amounts)

This Management's Discussion and Analysis of Financial Condition and Results of Operations should be read together with the Company's unaudited consolidated financial statements and other financial information included elsewhere in this Quarterly Report on Form 10-Q.

General

The Company is the world's largest designer and manufacturer of arc welding and cutting products, manufacturing a broad line of arc welding equipment, consumable welding products and other welding and cutting products. Welding products include arc welding power sources, computer numerical control and plasma cutters, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, consumable electrodes, fluxes, welding accessories and specialty welding consumables and fabrication. The Company's product offering also includes oxy-fuel cutting systems and regulators and torches used in oxy-fuel welding, cutting and brazing. In addition, the Company has a leading global position in the brazing and soldering alloys market.

The Company's products are sold globally. In the Americas, products are sold principally through industrial distributors, retailers and also directly to users of welding products. Outside of the Americas, the Company has an international sales organization comprised of Company employees and agents who sell products from the Company's various manufacturing sites to distributors and product users.

The Company's business units are aligned into three operating segments. The operating segments consist of Americas Welding, International Welding and The Harris Products Group. The Americas Welding segment includes welding operations in North and South America. The International Welding segment includes welding operations in Europe, Africa, Asia and Australia. The Harris Products Group includes the Company's global oxy-fuel cutting, soldering and brazing businesses as well as its retail business in the United States.

In 2025, the U.S. government announced a series of tariffs on imported goods into the U.S., which prompted retaliatory actions from some of its trading partners. The Company has taken actions to address the impact of these trade policies and while the Company cannot predict the ultimate impact on its business, the Company will continue to monitor evolving trade negotiations to determine if additional measures are warranted.

Results of Operations

The following table shows the Company's results of operations:


	Three Months Ended September 30,
												Favorable (Unfavorable)
	2025						2024					2025 vs. 2024
	Amount			% of Sales			Amount			% of Sales		$			%
Net sales	$	1,061,227					$	983,759				$	77,468		7.9	%
Cost of goods sold		671,916						631,681					(40,235)		(6.4)	%
Gross profit		389,311			36.7	%		352,078		35.8	%		37,233		10.6	%
Selling, general & administrative expenses		206,823			19.5	%		186,291		18.9	%		(20,532)		(11.0)	%
Rationalization and asset impairment net charges		5,831			0.5	%		20,227		2.1	%		14,396		71.2	%
Operating income		176,657			16.6	%		145,560		14.8	%		31,097		21.4	%
Interest expense, net		13,648						11,974					(1,674)		(14.0)	%
Other income (expense)		2,986						(1,644)					4,630		281.6	%
Income before income taxes		165,995			15.6	%		131,942		13.4	%		34,053		25.8	%
Income taxes		43,367						31,186					(12,181)		(39.1)	%
Effective tax rate		26.1	%					23.6	%				(2.5)	%
Net income	$	122,628			11.6	%	$	100,756		10.2	%	$	21,872		21.7	%
Diluted earnings per share	$	2.21					$	1.77				$	0.44		24.9	%


	Nine Months Ended September 30,
												Favorable (Unfavorable)
	2025						2024					2025 vs. 2024
	Amount			% of Sales			Amount			% of Sales		$			%
Net sales	$	3,154,288					$	2,986,639				$	167,649		5.6	%
Cost of goods sold		1,993,982						1,882,349					(111,633)		(5.9)	%
Gross profit		1,160,306			36.8	%		1,104,290		37.0	%		56,016		5.1	%
Selling, general & administrative expenses		614,349			19.5	%		593,523		19.9	%		(20,826)		(3.5)	%
Rationalization and asset impairment net charges		12,238			0.4	%		51,322		1.7	%		39,084		76.2	%
Operating income		533,719			16.9	%		459,445		15.4	%		74,274		16.2	%
Interest expense, net		38,394						31,414					(6,980)		(22.2)	%
Other income (expense)		7,464						(935)					8,399		898.3	%
Income before income taxes		502,789			15.9	%		427,096		14.3	%		75,693		17.7	%
Income taxes		118,278						101,217					(17,061)		(16.9)	%
Effective tax rate		23.5	%					23.7	%				0.2	%
Net income	$	384,511			12.2	%	$	325,879		10.9	%	$	58,632		18.0	%
Diluted earnings per share	$	6.86					$	5.68				$	1.18		20.8	%

Net Sales:

The following table summarizes the impact of volume, acquisitions, price and foreign currency exchange rates on Net sales on a consolidated basis:


Three Months Ended September 30,			Change in Net Sales due to:
	Net Sales											Foreign			Net Sales
	2024		Volume			Price			Acquisitions			Exchange			2025
Lincoln Electric Holdings, Inc.	$	983,759	$	(21,187)		$	76,410		$	16,710		$	5,535		$	1,061,227
% Change
Lincoln Electric Holdings, Inc.				(2.2)	%		7.8	%		1.7	%		0.6	%		7.9	%


Nine Months Ended September 30,			Change in Net Sales due to:
	Net Sales											Foreign		Net Sales
	2024		Volume			Price			Acquisitions			Exchange		2025
Lincoln Electric Holdings, Inc.	$	2,986,639	$	(82,635)		$	155,116		$	95,359		$	(191)	$	3,154,288
% Change
Lincoln Electric Holdings, Inc.				(2.8)	%		5.2	%		3.2	%		-		5.6	%

Net sales increased for the three and nine months ended September 30, 2025 due to an increase in organic sales and a benefit from acquisitions. The increase in organic sales for both the three and nine months ended September 30, 2025 is driven by an increase in pricing primarily due to higher input costs, partially offset by lower volumes.

Gross Profit:

Gross profit as a percentage of sales increased 0.9% for the three months ended September 30, 2025 as compared to the same 2024 period, driven by effective cost management and favorable mix. Gross profit as a percentage of sales decreased 0.2% for the nine months ended September 30, 2025 as compared to the same 2024 period, driven by lower volumes partially offset by effective cost management. The three and nine months ended September 30, 2025 includes last-in, first-out ("LIFO") charges of $4,804 and $15,088, respectively, which are primarily due to rising input costs. This compares with a benefit of $1,196 and $3,971 in the comparable 2024 periods.

Selling, General & Administrative Expenses:

Selling, general and administrative expenses increased in the three and nine months ended September 30, 2025 as compared to the same 2024 periods, primarily due to increases in employee costs and acquisitions, partially offset by effective cost management.

Operating Income:

Operating income as a percentage of sales was 16.6% for the three months ended September 30, 2025 as compared to 14.8% in the prior year period. Excluding special items, Operating income as a percentage of sales was 17.4% for the three months ended September 30, 2025 as compared to 17.3% in the prior year period. Operating income as a percentage of sales was 16.9% for the nine months ended September 30, 2025 as compared to 15.4% in the prior year period. Excluding special items, Operating income as a percentage of sales, was 17.4% for both comparable periods. Refer to explanations above for additional details. Also refer to Non-GAAP Financial Measures for a reconciliation of Adjusted operating income.

Rationalization and Asset Impairment Net Charges:

Charges in 2025 and 2024 relate to rationalization plans within all three reportable segments. Charges in 2024 include the impact of the Company's disposition of its Russian entity. Refer to Note 6 to the consolidated financial statements for further information on the Company's rationalization plans.

Income Taxes:

The effective tax rate was higher for the three months ended September 30, 2025 as compared to the same 2024 period, primarily driven by the impact of the One Big Beautiful Bill Act ("OBBBA"), as discussed in Note 11, partially offset by the mix of earnings and timing of discrete tax items.

Segment Results

The following table presents components of sales by segment:


Three Months Ended September 30,			Change in Net Sales due to:
	Net Sales											Foreign			Net Sales
	2024		Volume ⁽¹⁾			Price ⁽²⁾			Acquisitions ⁽³⁾			Exchange ⁽⁴⁾			2025
Operating Segments
Americas Welding	$	637,026	$	(15,011)		$	60,885		$	8,842		$	52		$	691,794
International Welding		216,224		(9,174)			93			7,868			4,618			219,629
The Harris Products Group		130,509		2,998			15,432			-			865			149,804

% Change
Americas Welding				(2.4)	%		9.6	%		1.4	%		-			8.6	%
International Welding				(4.2)	%		-			3.7	%		2.1	%		1.6	%
The Harris Products Group				2.3	%		11.8	%		-			0.7	%		14.8	%


Nine Months Ended September 30,				Change in Net Sales due to:
	Net Sales											Foreign			Net Sales
	2024		Volume ⁽¹⁾			Price ⁽²⁾			Acquisitions ⁽³⁾			Exchange			2025
Operating Segments
Americas Welding	$	1,910,061	$	(62,097)		$	116,519		$	86,361		$	(9,213)		$	2,041,631
International Welding		690,743		(38,994)			1,773			8,998			8,994			671,514
The Harris Products Group		385,835		18,456			36,824			-			28			441,143

% Change
Americas Welding				(3.3)	%		6.1	%		4.5	%		(0.4)	%		6.9	%
International Welding				(5.6)	%		0.3	%		1.3	%		1.2	%		(2.8)	%
The Harris Products Group				4.8	%		9.5	%		-			-			14.3	%

(1)

Decrease for the three and nine months ended September 30, 2025 for Americas Welding and International Welding due to weakened industrial demand trends. Increase for the three and nine months ended September 30, 2025 for The Harris Products Group due to the expanded market presence.

(2)

Increase due to price actions taken in response to higher input costs.

(3)

Increase for Americas Welding and International Welding due to the acquisitions discussed in Note 4 to the consolidated financial statements.

(4)

Increase for the three months ended September 30, 2025 for International Welding relates to the weaker U.S. dollar.

Segment performance is measured and resources are allocated based on a number of factors, the primary measure being the Adjusted EBIT profit measure. Adjusted EBIT is defined as Operating income plus Other income (expense), adjusted for special items as determined by management such as the impact of rationalization activities, certain asset impairment charges and gains or losses on disposals of assets.

The following table presents Adjusted EBIT by segment:


							Favorable (Unfavorable)
	Three Months Ended September 30,						2025 vs. 2024
	2025			2024			$		%
Americas Welding:
Net sales	$	691,794		$	637,026		$	54,768	8.6	%
Inter-segment sales		30,058			30,845			(787)	(2.6)	%
Total Sales	$	721,852		$	667,871			53,981	8.1	%
Adjusted EBIT ^{(1) (4)}	$	131,615		$	125,515			6,100	4.9	%
As a percent of total sales ⁽¹⁾		18.2	%		18.8	%			(0.6)	%
International Welding:
Net sales	$	219,629		$	216,224			3,405	1.6	%
Inter-segment sales		9,830			7,371			2,459	33.4	%
Total Sales	$	229,459		$	223,595			5,864	2.6	%
Adjusted EBIT ^{(2) (5)}	$	25,821		$	20,101			5,720	28.5	%
As a percent of total sales ⁽²⁾		11.3	%		9.0	%			2.3	%
The Harris Products Group:
Net sales	$	149,804		$	130,509			19,295	14.8	%
Inter-segment sales		3,441			3,155			286	9.1	%
Total Sales	$	153,245		$	133,664			19,581	14.6	%
Adjusted EBIT ^{(3) (6)}	$	28,078		$	21,959			6,119	27.9	%
As a percent of total sales ⁽³⁾		18.3	%		16.4	%			1.9	%
Corporate / Eliminations:
Inter-segment sales	$	(43,329)		$	(41,371)			(1,958)	(4.7)	%
Adjusted EBIT ⁽⁷⁾		2,034			4,503			(2,469)	(54.8)	%
Consolidated:
Net sales	$	1,061,227		$	983,759			77,468	7.9	%
Net income	$	122,628		$	100,756			21,872	21.7	%
As a percent of total sales		11.6	%		10.2	%			1.4	%
Adjusted EBIT ⁽⁸⁾	$	187,548		$	172,078			15,470	9.0	%
As a percent of sales		17.7	%		17.5	%			0.2	%

(1)

Adjusted EBIT increased for the three months ended September 30, 2025 as compared to September 30, 2024 primarily driven by favorable net impact of organic sales, partially offset by unfavorable impact of product mix; Adjusted EBIT as a percent of sales decreased for the same period due to unfavorable product mix.

(2)

Adjusted EBIT and Adjusted EBIT as a percent of sales increased for the three months ended September 30, 2025 as compared to September 30, 2024 primarily as a result of the benefit of acquisitions, partially offset by the unfavorable impact of lower volumes.

(3)

Adjusted EBIT and Adjusted EBIT as a percent of sales increased for the three months ended September 30, 2025 as compared to September 30, 2024 primarily as a result of the favorable impact of organic sales, partially offset by unfavorable impact of higher input costs.

(4)

The three months ended September 30, 2025 exclude Rationalization and asset impairment net charges of $4,150 as discussed in Note 6. The three months ended September 30, 2024 exclude Rationalization and asset impairment net charges of $16,282 primarily due to restructuring activities, the amortization of the step up in value of acquired inventories of $3,109 and pension settlement charges of $3,966.

(5)

The three months ended September 30, 2025 exclude Rationalization and asset impairment net charges of $1,365 as discussed in Note 6 and the amortization of the step up in value of acquired inventories of $1,397. The three months ended September 30, 2024 exclude Rationalization and asset impairment net charges of $2,676 primarily due to restructuring activities and the amortization of the step up in value of acquired inventories of $250.

(6)

The three months ended September 30, 2025 exclude Rationalization and asset impairment net charges of $316 as discussed in Note 6. The three months ended September 30, 2024 exclude Rationalization and asset impairment net charges of $1,269 primarily due to restructuring activities.

(7)

The three months ended September 30, 2025 exclude acquisition transaction costs of $452as discussed in Note 4. The three months ended September 30, 2024 exclude acquisition transaction costs of $610.

(8)

See non-GAAP Financial Measures for a reconciliation of Net income as reported and Adjusted EBIT.



							Favorable (Unfavorable)
	Nine Months Ended September 30,						2025 vs. 2024
	2025			2024			$		%
Americas Welding:
Net sales	$	2,041,631		$	1,910,061		$	131,570	6.9	%
Inter-segment sales		103,821			98,624			5,197	5.3	%
Total Sales	$	2,145,452		$	2,008,685			136,767	6.8	%
Adjusted EBIT ^{(1) (4)}	$	393,728		$	398,265			(4,537)	(1.1)	%
As a percent of total sales ⁽¹⁾		18.4	%		19.8	%			(1.4)	%
International Welding:
Net sales	$	671,514		$	690,743			(19,229)	(2.8)	%
Inter-segment sales		24,303			24,628			(325)	(1.3)	%
Total Sales	$	695,817		$	715,371			(19,554)	(2.7)	%
Adjusted EBIT ^{(2) (5)}	$	79,383		$	73,587			5,796	7.9	%
As a percent of total sales ⁽²⁾		11.4	%		10.3	%			1.1	%
The Harris Products Group:
Net sales	$	441,143		$	385,835			55,308	14.3	%
Inter-segment sales		12,535			9,520			3,015	31.7	%
Total Sales	$	453,678		$	395,355			58,323	14.8	%
Adjusted EBIT ^{(3) (6)}	$	84,291		$	66,761			17,530	26.3	%
As a percent of total sales ⁽³⁾		18.6	%		16.9	%			1.7	%
Corporate / Eliminations:
Inter-segment sales	$	(140,659)		$	(132,772)			(7,887)	(5.9)	%
Adjusted EBIT ⁽⁷⁾		(816)			(11,840)			11,024	93.1	%
Consolidated:
Net sales	$	3,154,288		$	2,986,639			167,649	5.6	%
Net income	$	384,511		$	325,879			58,632	18.0	%
As a percent of total sales		12.2	%		10.9	%			1.3	%
Adjusted EBIT ⁽⁸⁾	$	556,586		$	526,773			29,813	5.7	%
As a percent of sales		17.6	%		17.6	%			(0.0)	%

(1)

Adjusted EBIT and Adjusted EBIT as a percent of sales decreasedfor the nine months ended September 30, 2025 as compared to September 30, 2024 primarily driven by the unfavorable impact of lower volumes, product mix and acquisitions.

(2)

Adjusted EBIT and Adjusted EBIT as a percent of sales increasedfor the nine months ended September 30, 2025 as compared to September 30, 2024 primarily as a result of the benefit of acquisitions, effective cost management and a favorable prior year comparison due to operational inefficiencies in 2024 which were not repeated in the current year.

(3)

Adjusted EBIT and Adjusted EBIT as a percent of salesincreased for the nine months ended September 30, 2025 as compared to September 30, 2024 primarily as a result of higher organic sales, effective cost management and operational improvements.

(4)

The nine months ended September 30, 2025 exclude Rationalization and asset impairment net charges of $7,190 as discussed in Note 6. The nine months ended September 30, 2024 exclude Rationalization and asset impairment net charges of $16,521 primarily due to restructuring activities, the amortization of the step up in value of acquired inventories of $3,224 and pension settlement charges of $3,966.

(5)

The nine months ended September 30, 2025 exclude Rationalization and asset impairment net charges of $4,468 as discussed in Note 6 and the amortization of the step up in value of acquired inventories of $1,257. The nine months ended September 30, 2024 exclude Rationalization and asset impairment net charges of $32,030 primarily due to restructuring activities, including the impact of the Company's disposition of its Russian entity, a loss on asset disposal of $4,950 and the amortization of the step up in value of acquired inventories of $250.

(6)

The nine months ended September 30, 2025 exclude Rationalization and asset impairment net charges of $580 as discussed in Note 6. The nine months ended September 30, 2024 exclude Rationalization and asset impairment net charges of $2,666 primarily due to restructuring activities.

(7)

The nine months ended September 30, 2025 exclude acquisition transaction costs of $1,683 as discussed in Note 4. The nine months ended September 30, 2024 exclude acquisition transaction costs of $4,551.

(8)

See non-GAAP Financial Measures for a reconciliation of Net income as reported and Adjusted EBIT.

Non-GAAP Financial Measures

The Company reviews Adjusted operating income, Adjusted net income, Adjusted EBIT, Adjusted effective tax rate, Adjusted diluted earnings per share, Adjusted return on invested capital ("Adjusted ROIC"), Adjusted net operating profit after taxes, Cash conversion and Organic sales, all non-GAAP financial measures, in assessing and evaluating the Company's underlying operating performance. These non-GAAP financial measures exclude the impact of special items on the Company's reported financial results. Non-GAAP financial measures should be read in conjunction with the generally accepted accounting principles in the United States ("GAAP") financial measures, as non-GAAP measures are a supplement to, and not a replacement for, GAAP financial measures.

The following table presents the reconciliations of Operating income as reported to Adjusted operating income, Net income as reported to Adjusted net income and Adjusted EBIT, Effective tax rate as reported to Adjusted effective tax rate and Diluted earnings per share as reported to Adjusted diluted earnings per share:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Operating income as reported	$	176,657		$	145,560		$	533,719		$	459,445
Special items (pre-tax):
Rationalization and asset impairment charges ⁽²⁾		5,831			20,227			12,238			51,322
Acquisition transaction costs ⁽³⁾		452			610			1,683			4,551
Amortization of step up in value of acquired inventories ⁽⁵⁾		1,622			3,359			1,482			3,474
Adjusted operating income ⁽¹⁾	$	184,562		$	169,756		$	549,122		$	518,792
As a percentage of net sales		17.4	%		17.3	%		17.4	%		17.4	%

Net income as reported	$	122,628		$	100,756		$	384,511		$	325,879
Special items:
Rationalization and asset impairment charges ⁽²⁾		5,831			20,227			12,238			51,322
Acquisition transaction costs ⁽³⁾		452			610			1,683			4,551
Pension settlement charges ⁽⁴⁾		-			3,966			-			3,966
Amortization of step up in value of acquired inventories ⁽⁵⁾		1,622			3,359			1,482			3,474
Loss on asset disposal ⁽⁶⁾		-			-			-			4,950
Tax effect of Special items ^{(7) (8)}		6,685			(6,550)			4,772			(8,858)
Adjusted net income		137,218			122,368			404,686			385,284
Interest expense, net		13,648			11,974			38,394			31,414
Income taxes as reported		43,367			31,186			118,278			101,217
Tax effect of Special items ^{(7) (8)}		(6,685)			6,550			(4,772)			8,858
Adjusted EBIT ⁽¹⁾	$	187,548		$	172,078		$	556,586		$	526,773

Effective tax rate as reported		26.1	%		23.6	%		23.5	%		23.7	%
Net special item tax impact ⁽⁸⁾		(5.0)	%		-	%		(1.6)	%		(1.5)	%
Adjusted effective tax rate ⁽¹⁾		21.1	%		23.6	%		21.9	%		22.2	%

Diluted earnings per share as reported	$	2.21		$	1.77		$	6.86		$	5.68
Special items per share		0.26			0.37			0.36			1.04
Adjusted diluted earnings per share ⁽¹⁾	$	2.47		$	2.14		$	7.22		$	6.72

(1)

Adjustedoperating income, adjusted net income, adjusted EBIT, adjusted effective tax rate and adjusted diluted EPS are non-GAAP financial measures. Refer to Non-GAAP Information section.

(2)

2025 and 2024 net charges primarily relate to rationalization plans within all three segments. Charges in 2024 include the impact of the Company's disposition of its Russian entity.

(3)

Transaction costs related to acquisitions which are included in Selling, general & administrative expenses.

(4)

Pension settlement charges primarily due to the final settlement associated with the termination of a pension plan and are included in Other income (expense).

(5)

Costs related to acquisitions which are included in Cost of goods sold.

(6)

Loss on asset disposal included in Other income (expense).

(7)

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.

(8)

During the third quarter of 2025, the Company recognized tax expense of approximately $8,800, reflecting the cumulative impact of the OBBBA provisions. Refer to Note 11 for further detail.

Liquidity and Capital Resources

Overview

The Company's primary sources of liquidity are operating cash flows and revolving credit facilities. As of September 30, 2025, the Company had $292,997 of cash and cash equivalents on hand and $88,199 of outstanding borrowings under its $1,031,386 revolving credit facilities.

The Company's capital allocation priorities include internal investment to support existing operations and organic growth, investment in acquisitions to grow the business and then returning capital to shareholders through dividends and share repurchases.

The Company's cash flow from operations can be cyclical. In assessing liquidity, the Company reviews working capital measurements to define areas for improvement. Management anticipates the Company will be able to satisfy cash requirements for its ongoing businesses for the foreseeable future primarily with cash generated by operations, existing cash balances, borrowings under its existing credit facilities and raising debt in capital markets.

The Company continues to expand globally and periodically consider acquisitions that would involve significant investments. The Company can fund its global expansion plans with operational cash flow, but a significant acquisition may require access to capital markets, in particular, the long-term debt market, as well as the syndicated bank loan market. The Company's financing strategy is to fund itself at the lowest after-tax cost of funding. Where possible, the Company utilizes operational cash flows and raises capital in the most efficient market, usually the United States, and then lends funds to the specific subsidiary needing or requiring funding. If additional acquisitions providing appropriate financial benefits become available, additional expenditures may be made.

Cash Flow

The following table reflects changes in key cash flow measures:


	Nine Months Ended September 30,
	2025		2024		$ Change
Cash provided by operating activities ⁽¹⁾	$	566,208	$	503,182	$	63,026
Cash used by investing activities		(214,275)		(335,357)		121,082
Capital expenditures		(84,028)		(85,117)		1,089
Acquisition of businesses, net of cash acquired		(136,655)		(252,746)		116,091
Cash used by financing activities ⁽²⁾		(425,394)		(152,298)		(273,096)
Proceeds from short-term borrowings		77,678		5,521		72,157
Proceeds from long-term borrowings		-		550,000		(550,000)
Payments on long-term borrowings		(100,169)		(400,508)		300,339
Purchase of shares for treasury		(286,488)		(211,212)		(75,276)
Cash dividends paid to shareholders		(126,476)		(121,979)		(4,497)
(Decrease) increase in Cash and cash equivalents		(84,265)		10,431		(94,696)

(1)

Cash provided by operating activities increased for the nine months ended September 30, 2025, compared with the nine months ended September 30, 2024primarily due to the net impacts of the OBBBA and improved working capital.

(2)

Cash used by financing activities increased for the nine months ended September 30, 2025, compared with the nine months ended September 30, 2024 primarily due to the increase in purchases of shares for treasury and proceeds from long-term borrowings in the prior year.

As of September 30, 2025, the Company had cash of $292,997, of which $272,870 was held by international subsidiaries.

In October 2025, the Company paid a cash dividend of $0.75 per share, or $41,270, to shareholders of record on September 30, 2025.

The Company currently anticipates capital expenditures of $100,000 to $120,000 in 2025. Anticipated capital expenditures include investments to increase capacity, improve operational effectiveness and for general maintenance. Management critically evaluates all proposed capital expenditures and expects each project to increase efficiency, reduce costs, support sales growth or improve the overall safety and environmental conditions of the Company's facilities.

Revolving Credit Agreements

On June 20, 2024, the Company entered into a $1 billion revolving credit facility. The revolving credit facility matures on June 20, 2029. As of September 30, 2025, the Company had $915,000 of availability under the revolving credit facility. Additionally, the Company has other lines of credit with total availability of $28,187 as of September 30, 2025. Refer to Note 10 for further information on our revolving lines of credit.

Working Capital Ratios


	September 30, 2025		December 31, 2024		September 30, 2024
Average operating working capital to Net sales ⁽¹⁾	18.6	%	16.9	%	19.1	%
Days sales in Inventories	127.1		106.0		123.4
Days sales in Accounts receivable	46.9		46.9		51.4
Average days in Trade accounts payable	60.8		45.8		52.3

(1)

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.

Stock Repurchase Program

On February 12, 2020, the Company's Board authorized a share repurchase program for up to 10 million shares of the Company's common stock. As of September 30, 2025, there were 5.3 million shares available under the authorization. The Company is not obligated to make any repurchases.

Rationalization and Asset Impairments

Refer to Note 6 to the consolidated financial statements for a discussion of the Company's rationalization plans. The Company believes the rationalization actions will positively impact future results of operations and will not have a material effect on liquidity and sources and uses of capital.

Acquisitions

Refer to Note 4 to the consolidated financial statements for a discussion of the Company's recent acquisitions.

Return on Invested Capital

The Company reviews ROIC in assessing and evaluating the Company's underlying operating performance. As discussed in the Non-GAAP Financial Measures section above, Adjusted ROIC is a non-GAAP financial measure that the Company believes is a meaningful metric to investors in evaluating the Company's financial performance. The calculation may be different than the method used by other companies to calculate ROIC. Adjusted ROIC is defined as rolling 12 months of Adjusted net income excluding tax-effected interest income and expense divided by invested capital. Invested capital is defined as total debt, which includes Short-term debt and Long-term debt, less current portions, plus Total equity.

The following table presents the reconciliations of ROIC and Adjusted ROIC to net income:


	Twelve Months Ended September 30,
	2025			2024
Net income as reported	$	524,740		$	482,523
Plus: Interest expense (after-tax)		43,488			37,665
Less: Interest income (after-tax)		6,181			7,845
Net operating profit after taxes	$	562,047		$	512,343
Special items:
Rationalization and asset impairment net charges		16,776			29,390
Acquisition transaction costs		4,174			4,554
Pension settlement net (gains) charges		(174)			4,811
Amortization of step up in value of acquired inventories		3,034			3,471
Loss on asset disposal		-			4,950
Tax effect of Special items ⁽¹⁾		2,117			(2,413)
Adjusted net operating profit after taxes	$	587,974		$	557,106

Invested Capital	September 30, 2025			September 30, 2024
Short-term debt	$	88,203		$	111,993
Long-term debt, less current portion		1,150,315			1,150,616
Total debt		1,238,518			1,262,609
Total equity		1,414,633			1,339,190
Invested capital	$	2,653,151		$	2,601,799

Return on invested capital as reported		21.2	%		19.7	%
Adjusted return on invested capital		22.2	%		21.4	%

(1)

Includes the net tax impact of Special items recorded during the respective periods, including the cumulative impact of the OBBBA provisions. 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.

New Accounting Pronouncements

Refer to Note 1 to the consolidated financial statements for a discussion of new accounting pronouncements.

Forward-looking Statements

The Company's expectations and beliefs concerning the future contained in this report 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 commercial and operating initiatives; the effectiveness of information systems and cybersecurity systems; presence of artificial intelligence technologies; 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, including any changes from the new legislation implemented in the OBBBA; tariff rates in the countries where the Company conducts business; and the possible effects of events beyond

our control, including but not limited to, the ongoing geopolitical conflicts, political unrest, acts of terror, natural disasters and pandemics on the Company or its customers, suppliers and the economy in general. For additional discussion, see "Item 1A. Risk Factors" presented herein, as well as in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2025.

Lincoln Electric Holdings Inc. published this content on October 30, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 30, 2025 at 17:37 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]