What changed in this filing

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Item 1. Financial Statements

2025-04-30 compared with 2024-10-31 · 175 added, 283 removed, 328 unchanged (58% of the section changed)

3 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Net sales (Note 2)

1 unchanged sentence

Selling, general & administrative expenses

Rationalization and asset impairment charges (Note 6)

Rationalization and asset impairment net charges (Note 6)

Operating income

Interest expense, net

Other (expense) income

Income before income taxes

7 unchanged sentences

(In thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Other comprehensive income (loss), net of tax:

Unrealized (loss) gain on derivatives designated and qualifying as cash flow hedges

Unrealized gain on derivatives designated and qualifying as cash flow hedges

Defined benefit pension plan activity

5 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

September 30, 2024

(Dollars in thousands)

March 31, 2025

December 31, 2024

19 unchanged sentences

Shareholders' Equity

Common Shares

Common shares, without par value - at stated capital amount;

authorized 240,000,000 shares;

issued 98,581,434 shares in 2025 and 2024;

outstanding 55,826,284 shares in 2025 and 56,211,219 in 2024

Additional paid-in capital

1 unchanged sentence

Accumulated other comprehensive loss

Treasury Shares

Treasury shares, at cost - 42,755,150 shares in 2025 and 42,370,215 shares in 2024

( 3,047,239 )

17 unchanged sentences

( 3,047,239 )

Defined benefit pension plan activity, net of tax

Unrealized (loss) on derivatives designated and qualifying as cash flow hedges, net of tax

Currency translation adjustment, net of tax

Cash dividends declared – $ 0.71 per share

Stock-based compensation activity

Purchase of shares for treasury

Balance at June 30, 2024

( 2,839,641 )

Defined benefit pension plan activity, net of tax

Unrealized (loss) on derivatives designated and qualifying as cash flow hedges, net of tax

Currency translation adjustment, net of tax

Cash dividends declared – $ 0.71 per share

Stock-based compensation activity

Purchase of shares for treasury

Balance at September 30, 2024

( 2,889,873 )

LINCOLN ELECTRIC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(In thousands, except per share amounts)

Comprehensive

2 unchanged sentences

( 2,682,554 )

Defined benefit pension plan activity, net of tax

Unrecognized amounts from defined benefit pension plans, net of tax

Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax

5 unchanged sentences

( 2,789,312 )

Defined benefit pension plan activity, net of tax

Unrealized loss on derivatives designated and qualifying as cash flow hedges, net of tax

Currency translation adjustment, net of tax

Cash dividends declared – $ 0.64 per share

Stock-based compensation activity

Purchase of shares for treasury

Balance at June 30, 2023

( 2,570,678 )

Defined benefit pension plan activity, net of tax

Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax

Currency translation adjustment

Cash dividends declared – $ 0.64 per share

Stock-based compensation activity

Purchase of shares for treasury

Balance at September 30, 2023

( 2,615,748 )

LINCOLN ELECTRIC HOLDINGS, INC.

1 unchanged sentence

(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

4 unchanged sentences

Stock-based compensation

Pension settlement net charges

Changes in operating assets and liabilities, net of effects from acquisitions:

Decrease in accounts receivable

(Increase) decrease in inventories

Increase in other current assets

Decrease in trade accounts payable

Increase in other current liabilities

Increase in accounts receivable

Increase in inventories

Decrease in other current assets

Increase in trade accounts payable

Increase (decrease) in other current liabilities

Net change in other assets and liabilities

2 unchanged sentences

Capital expenditures

Acquisition of businesses, net of cash acquired

Proceeds from sale of property, plant and equipment

Purchase of marketable securities

NET CASH USED BY INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from (payments on) short-term borrowings

Proceeds from long-term borrowings

(Payments on) proceeds from short-term borrowings

Payments on long-term borrowings

4 unchanged sentences

Effect of exchange rate changes on Cash and cash equivalents

INCREASE IN CASH AND CASH EQUIVALENTS

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

Cash and cash equivalents at beginning of period

11 unchanged sentences

However, in the opinion of management, these unaudited consolidated financial statements contain all the adjustments (consisting of normal recurring accruals) considered necessary to present fairly the financial position, results of operations and cash flows for the interim periods.

Operating results for the nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024.

Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025.

The accompanying Condensed Consolidated Balance Sheet at December 31, 2024 has been derived from the audited financial statements at that date, but does not include all of the information and notes required by GAAP for complete financial statements.

1 unchanged sentence

Certain reclassifications have been made to the prior period amounts to conform to the current period presentation, none of which are material.

In March 2022, in response to Russia’s invasion of Ukraine, the Company announced it was ceasing operations in Russia and implementing plans to support its Russian employees.

In May 2024, the Company disposed of its Russian entity and completed its exit from the Russian market.

As a result, $ 22,566 of cumulative translation adjustment previously recognized within Other comprehensive income (loss) was recorded to Rationalization and asset impairment charges on the Consolidated Statements of Income in the nine months ended September 30, 2024.

New Accounting Pronouncements:

This section provides a description of new accounting pronouncements (“Accounting Standards Updates” or “ASUs”) issued by the Financial Accounting Standards Board (“FASB”) that are applicable to the Company.

The following ASUs were adopted as of January 1, 2025:

2023-09, Income Taxes (Topic 740), issued December 2023.

Requires disclosure of specific categories in rate reconciliation and additional information for reconciling items that meet a quantitative threshold, additional information about income taxes paid, and disclosure of disaggregated income tax information.

The Company will adopt the required disclosures for the 2025 annual period.

LINCOLN ELECTRIC HOLDINGS, INC.

1 unchanged sentence

Dollars in thousands, except per share amounts

The following ASUs were adopted as of January 1, 2024:

2023-01, Leases-Common Control Arrangements (Topic 842), issued March 2023

Requires a lessee in a common-control arrangement to amortize leasehold improvements that it owns over the improvements’ useful life, regardless of the lease term.

The requirements of the ASU are effective January 1, 2024 and the adoption did not have an impact on the Company’s consolidated financial statements.

2023-07, Segment Reporting (Topic 280), issued November 2023

Requires enhanced disclosures about significant segment expenses, including significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), the title and position of the CODM, an amount for other segment items by reportable segment, and disclosures about segment profit or loss and assets on an annual and interim basis.

The Company is currently evaluating the impact on its financial statements of the following ASUs:

2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures , issued November 2024

Requires enhanced disclosures of specified information about certain costs and expenses.

The amendments are effective for annual periods beginning January 1, 2027, and interim periods beginning January 1, 2028.

Early adoption is permitted.

The Company will adopt the required disclosures for the annual period.

2022-04, Liabilities-Supplier Finance Programs (Subtopic 405-50), issued September 2022.

Requires disclosure about a company’s supplier finance programs, including a period-over-period balance roll forward.

This requirement of the ASU is effective for annual periods beginning January 1, 2024 and should be applied prospectively.

The Company will adopt the required disclosures for the annual period.

The Company is currently evaluating the impact on its financial statements of the following ASUs:

2023-06, Disclosure Improvement s , issued October 2023

2 unchanged sentences

Early adoption is prohibited.

2023-09, Income Taxes (Topic 740), issued December 2023.

The amendments are effective January 1, 2025 and early adoption is permitted.

2024-01, Compensation – Stock Compensation (Topic 718), issued March 2024

Requires determining whether a profits interest award should be accounted for as a share-based payment arrangement or other compensation in accordance with Topic 718.

The amendments are effective for annual periods beginning January 1, 2025, and interim periods within those annual periods.

Early adoption is permitted.

NOTE 2 — REVENUE RECOGNITION

The following table presents the Company’s Net sales disaggregated by product line:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Consumable sales consist of welding, brazing and soldering filler metals.

Equipment sales consist of arc welding, welding accessories, arc welding equipment, wire feeding systems, fume control equipment, plasma and oxy-fuel cutting systems, specialty gas regulators, and education solutions;

as well as a comprehensive portfolio of automated solutions

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

for joining, cutting, material handling, module assembly, and end of line testing.

Equipment sales consist of arc welding equipment, welding accessories, wire feeding systems, fume control equipment, plasma and oxy-fuel cutting systems, specialty gas regulators, and education solutions;

as well as a comprehensive portfolio of automated solutions for joining, cutting, material handling, module assembly, and end of line testing.

Consumable and Equipment products are sold within each of the Company’s operating segments.

3 unchanged sentences

Approximately 10 % of the Company’s Net sales are recognized over time.

At September 30, 2024, the Company recorded $ 33,940 related to advance customer payments and $ 78,331 related to billings in excess of revenue recognized.

At March 31, 2025, the Company recorded $ 44,822 related to advance customer payments and $ 59,324 related to billings in excess of revenue recognized.

These contract liabilities are included in Other current liabilities in the Condensed Consolidated Balance Sheets.

2 unchanged sentences

The Company records an asset for contracts where it has recognized revenue, but has not yet invoiced the customer for goods or services.

At September 30, 2024 and December 31, 2023, the Company recorded $ 57,481 and $ 41,816 , respectively, related to these contract assets which are included in Other current assets in the Condensed Consolidated Balance Sheets.

At March 31, 2025 and December 31, 2024, the Company recorded $ 87,263 and $ 81,781 , respectively, related to these contract assets which are included in Other current assets in the Condensed Consolidated Balance Sheets.

Contract asset amounts are expected to be billed within the next twelve months.

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

NOTE 3 — EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Denominator (shares in 000's):

4 unchanged sentences

Diluted earnings per share

For the three months ended September 30, 2024 and 2023, common shares subject to equity-based awards of 43,250 and 19,368 , respectively, were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive.

For the nine months ended September 30, 2024 and 2023, common shares subject to equity-based awards of 38,665 and 67,549 , respectively, were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive.

For the three months ended March 31, 2025 and 2024, common shares subject to equity-based awards of 21,704 and 25,147 , respectively, were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive.

NOTE 4 — ACQUISITIONS

On April 1, 2025, the Company acquired an approximate 35 % ownership interest of Alloy Steel Australia (Int) Pty Ltd.

(“Alloy Steel”), a privately held manufacturer of maintenance and repair solutions, for a purchase price of approximately $ 43,000 .

Alloy Steel supplies proprietary technology, engineering services and digital monitoring to the mining sector.

The acquired companies discussed below are accounted for as business combinations and are included in the consolidated financial statements as of the date of acquisition.

The acquired companies are not material individually, or in the aggregate, to the actual or pro forma Consolidated Statements of Income or Consolidated Statements of Cash Flows;

as such, pro forma information related to these acquisitions has not been presented.

On July 30, 2024, the Company acquired 100 % ownership of Vanair Manufacturing, LLC (“Vanair”), a privately held, Michigan City, Indiana-based, manufacturer for a total purchase price of $ 109,993 , net of cash acquired and certain debt-like items.

In 2023, Vanair generated sales of approximately $ 100,000 (unaudited).

Vanair offers a comprehensive portfolio of mobile power solutions, including vehicle-mounted compressors, generators, welders, hydraulics, chargers/boosters and electrified power equipment.

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

On June 3, 2024, the Company acquired 100 % ownership of Inrotech A/S (“Inrotech”), a privately held automation system integration and technology firm headquartered in Odense, Denmark.

4 unchanged sentences

The purchase price was $ 108,844 , net of cash acquired.

In 2023, RedViking generated sales of approximately $ 70,000 (unaudited).

RedViking specializes in the development and integration of state-of-the-art autonomous guided vehicles and mobile robots, custom assembly and dynamic test systems, and proprietary manufacturing execution system software.

The acquisition broadened the Company’s portfolio of automation solutions and extends the Company’s ability to serve customers in the growing aerospace and defense industries.

On May 3, 2023, the Company acquired 100 % ownership of Powermig Automação e Soldagem Ltda.

(“Powermig”), a privately held automation engineering firm headquartered in Caxias do Sul, Rio Grande do Sul, in Brazil.

The purchase price was $ 29,572 , net of cash acquired.

Powermig specializes in designing and engineering industrial welding automation solutions for the heavy industry and transportation sectors.

The acquisition broadened the Company’s automation portfolio and capabilities.

During the three and nine months ended September 30, 2024, the Company recognized acquisition costs of $ 610 and $ 4,551 , respectively, which are included in Selling, general & administrative expenses on the Consolidated Statements of Income and are expensed as incurred.

The acquired companies are accounted for as business combinations and are included in the consolidated financial statements as of the date of acquisition.

The acquired companies discussed above are not material individually, or in the aggregate, to the actual or pro forma Consolidated Statements of Income or Consolidated Statements of Cash Flows;

as such, pro forma information related to these acquisitions has not been presented.

During the three months ended March 31, 2025 and 2024, the Company recognized acquisition costs of $ 802 and $ 1,762 , respectively, which are included in Selling, general & administrative expenses on the Consolidated Statements of Income and are expensed as incurred.

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

NOTE 5 — SEGMENT INFORMATION

The Company’s business units are aligned into three operating segments.

The Company’s primary business is the design, development and manufacture of arc welding products, automated joining, assembly and cutting systems, plasma and oxy-fuel cutting equipment.

The Company also has a leading global position in brazing and soldering alloys.

The Company’s products include arc welding, brazing and soldering filler metals (consumables), arc welding equipment, plasma and oxyfuel cutting systems, wire feeding systems, fume control equipment, welding accessories, specialty gas regulators, and education solutions;

as well as a comprehensive portfolio of automated solutions for joining, cutting, material handling, module assembly, and end of line testing.

The Company has aligned its organizational and leadership structure into three operating segments to support growth strategies and enhance the utilization of the Company’s worldwide resources and global sourcing initiatives.

The operating segments consist of Americas Welding, International Welding and The Harris Products Group.

1 unchanged sentence

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.

The Harris Products Group includes the Company’s global cutting, soldering and brazing businesses, specialty gas equipment, as well as its retail business in the United States.

Segment performance is measured and resources are allocated based on a number of factors, the primary measure being the adjusted earnings before interest and income taxes ("Adjusted EBIT") profit measure.

EBIT is defined as Operating income plus Other (expense) income.

EBIT is 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.

EBIT is defined as Operating income plus Other income.

Segment EBIT is 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 Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer.

The CODM uses segment Adjusted EBIT to allocate resources for each segment predominantly in establishing the Company’s long-term strategy and in developing the annual budget.

The CODM considers actual performance using Adjusted EBIT when making decisions about allocating capital and resources to the segments.

LINCOLN ELECTRIC HOLDINGS, INC.

3 unchanged sentences

International

Three Months Ended September 30, 2024

Three Months Ended March 31, 2025

Inter-segment sales

Adjusted EBIT

Cost of goods sold

Other segment expenses (3)

Special items charge (1)

Interest income

Interest expense

Income before income taxes

Three Months Ended September 30, 2023

Inter-segment sales

Adjusted EBIT

3 unchanged sentences

Income before income taxes

Nine Months Ended September 30, 2024

Capital expenditures

Depreciation and amortization

Three Months Ended March 31, 2024

Inter-segment sales

Adjusted EBIT

Cost of goods sold

Other segment expenses (3)

Special items charge (2)

Interest income

Interest expense

Income before income taxes

Nine Months Ended September 30, 2023

Inter-segment sales

Adjusted EBIT

3 unchanged sentences

Income before income taxes

(1) In the three months ended September 30, 2024, special items primarily include Rationalization and asset impairment net charges of $ 16,282 in Americas Welding, $ 2,676 in International Welding and $ 1,269 in Harris Products Group.

In addition, there was an amortization of step up in value of acquired inventories of $ 3,109 and $ 250 in Americas Welding and International Welding, respectively, a pension settlement charge of $ 3,966 in Americas Welding and acquisition transaction costs of $ 610 in Corporate/Eliminations.

(2) In the three months ended September 30, 2023, special items include amortization of step up in value of acquired inventories of $ 3,648 in Americas Welding and $ 1,204 in International Welding and Rationalization and asset impairment net charges of $ 408 in Americas Welding and $ 6,666 in International Welding.

Capital expenditures

Depreciation and amortization

(1) In the three months ended March 31, 2025, special items primarily include Rationalization and asset impairment net charges of $ 2,135 , $ 1,552 and $ 178 in Americas Welding, International Welding and The Harris Products Group, respectively, as discussed in Note 6 and Acquisition transaction costs of $ 802 in Corporate/Eliminations.

(2) In the three months ended March 31, 2024, special items include Rationalization and asset impairment net charges of $ 3,069 and $ 1,536 in International Welding and The Harris Products Group, respectively, as discussed in Note 6 and Acquisition transaction costs of $ 1,762 in Corporate/Eliminations.

(3) Other segment expenses primarily include:

Selling, general & administrative expenses – including bonus and research and development expenses.

Rationalization and asset impairment net charges – refer to Note 6 for further discussion.

LINCOLN ELECTRIC HOLDINGS, INC.

1 unchanged sentence

Dollars in thousands, except per share amounts

(3) In the nine months ended September 30, 2024, special items primarily include Rationalization and asset impairment net charges of $ 16,521 in Americas Welding, $ 32,030 in International Welding, including the impact of the Company’s disposition of its Russian entity, and $ 2,666 in The Harris Products.

In addition, there was a loss on asset disposal of $ 4,950 recorded to Other (expense) income in International Welding, an amortization of step up in value of acquired inventories of $ 3,224 and $ 250 in Americas Welding and International Welding, respectively, a pension settlement charge of $ 3,966 in Americas Welding, and acquisition transaction costs of $ 4,551 in Corporate/Eliminations.

(4) In the nine months ended September 30, 2023, special items include amortization of step up in value of acquired inventories of $ 9,390 in Americas Welding and $ 2,862 in International Welding, Rationalization and asset impairment net charges of $ 408 in Americas Welding and $ 10,210 in International Welding and a gain on asset disposal of $ 1,646 in International Welding.

NOTE 6 — RATIONALIZATION AND ASSET IMPAIRMENTS

During 2024, the Company initiated rationalization plans within International Welding, Americas Welding and The Harris Products Group.

During 2023, the Company also initiated rationalization plans within International Welding.

The plans in both years impacted headcount and included the consolidation of manufacturing facilities to better align with the cost structure, economic conditions and operating needs.

As a result of these plans, in the nine months ended September 30, 2024, the Company recorded Rationalization and asset impairment net charges of $ 32,030 in International Welding, of which $ 22,566 is associated with the disposal of the Company’s Russian entity.

The Company also incurred Rationalization and asset impairment net charges of $ 16,521 in Americas Welding and $ 2,666 in The Harris Products Group in the same period.

In the comparable 2023 period, the Company recorded Rationalization and asset impairment net charges of $ 10,210 in International Welding and $ 408 in Americas Welding.

At September 30, 2024 and December 31, 2023, liabilities of $ 19,046 and $ 15,086 , respectively, were recognized in Other current liabilities in the Company’s Condensed Consolidated Balance Sheet.

The Company anticipates approximately $ 6,000 of additional charges in the fourth quarter of 2024 related to the completion of these plans.

The Company has rationalization plans within International Welding, Americas Welding and The Harris Products Group.

The plans impacted headcount and included the consolidation of manufacturing facilities to better align with the cost structure, economic conditions and operating needs of the business.

As a result of these plans, in the three months ended March 31, 2025, the Company recorded Rationalization and asset impairment net charges of $ 2,135 in Americas Welding, $ 1,552 in International Welding and $ 178 in The Harris Products Group.

In the three months ended March 31, 2024, the Company recorded Rationalization and asset impairment net charges of $ 3,069 in International Welding and $ 1,536 in The Harris Products Group.

At March 31, 2025 and December 31, 2024, rationalization liabilities of $ 7,598 and $ 14,146 , respectively, were recognized in Other current liabilities in the Company’s Condensed Consolidated Balance Sheet.

The Company does not anticipate significant additional charges related to the completion of these 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.

The Company continues to evaluate its cost structure and additional rationalization actions may result in charges in future periods.

The following table summarizes the activity related to rationalization liabilities for the nine months ended September 30, 2024:

The following table summarizes the activity related to rationalization liabilities for the three months ended March 31, 2025:

International

3 unchanged sentences

Charged to expense

Balance at September 30, 2024

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

Balance at March 31, 2025

NOTE 7 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ("AOCI")

The following tables set forth the total changes in AOCI by component, net of taxes:

Three Months Ended September 30, 2024

Unrealized gain

(loss) on derivatives

designated and

Defined benefit

qualifying as cash

Balance at June 30, 2024

Other comprehensive (loss) income before reclassification

Amounts reclassified from AOCI

Net current-period other comprehensive (loss) income

Balance at September 30, 2024

Three Months Ended September 30, 2023

Unrealized gain

(loss) on derivatives

designated and

Defined benefit

qualifying as cash

Balance at June 30, 2023

Other comprehensive income (loss) before reclassification

Amounts reclassified from AOCI

Net current-period other comprehensive income (loss)

Balance at September 30, 2023

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Unrealized gain

4 unchanged sentences

Balance at December 31, 2024

Other comprehensive income (loss) before reclassification

Other comprehensive income before reclassification

Amounts reclassified from AOCI

Net current-period other comprehensive (loss) income

Balance at September 30, 2024

Net current-period other comprehensive income (loss)

Balance at March 31, 2025

LINCOLN ELECTRIC HOLDINGS, INC.

1 unchanged sentence

Dollars in thousands, except per share amounts

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Unrealized gain

4 unchanged sentences

Balance at December 31, 2023

Other comprehensive income before reclassification

Other comprehensive income (loss) before reclassification

Amounts reclassified from AOCI

Net current-period other comprehensive income (loss)

Balance at September 30, 2023

Balance at March 31, 2024

NOTE 8 — INVENTORIES

Inventories in the Condensed Consolidated Balance Sheets are comprised of the following components:

September 30, 2024

March 31, 2025

December 31, 2024

2 unchanged sentences

Finished goods

At September 30, 2024 and December 31, 2023, approximately 33 % and 37 %, respectively, of total inventories were valued using the last-in, first-out ("LIFO") method.

The excess of current cost over LIFO cost was $ 125,975 and $ 129,946 at September 30, 2024 and December 31, 2023, respectively.

At both March 31, 2025 and December 31, 2024, approximately 35 % of total inventories were valued using the last-in, first-out ("LIFO") method.

The excess of current cost over LIFO cost was $ 122,394 and $ 120,633 at March 31, 2025 and December 31, 2024, respectively.

NOTE 9 — LEASES

2 unchanged sentences

Balance Sheet Classification

September 30, 2024

March 31, 2025

December 31, 2024

5 unchanged sentences

Total lease liabilities

Total lease expense, which is included in Cost of goods sold and Selling, general & administrative expenses in the Company’s Consolidated Statements of Income, was $ 5,657 and $ 18,390 in the three and nine months ended September 30, 2024 and $ 5,322 and $ 11,173 in the three and nine months ended September 30, 2023, respectively.

Cash paid for amounts included in the measurement of lease liabilities for the three and nine months ended September 30, 2024, respectively, were $ 3,771 and $ 11,918 and are included in Net cash provided by operating activities in the Company’s Consolidated Statements of Cash Flows.

Cash paid for amounts included in the measurement of lease liabilities for the three and nine months ended September 30, 2023, respectively, were $ 3,494 and $ 9,716 and are included in Net cash provided by operating activities in the Company’s Consolidated Statements of Cash Flows.

Right-of-use assets obtained

Total lease expense, which is included in Cost of goods sold and Selling, general & administrative expenses in the Company’s Consolidated Statements of Income, was $ 5,890 and $ 6,161 in the three months ended March 31, 2025 and 2024, respectively.

Cash paid for amounts included in the measurement of lease liabilities for the three months ended March 31, 2025 and 2024, was $ 2,552 and $ 4,049 , respectively, are included in Net cash provided by operating activities in the Company’s Consolidated Statements of Cash Flows.

Right-of-use assets obtained in exchange for operating lease liabilities during the three months ended March 31, 2025 and 2024 were $ 254 and $ 3,546 , respectively.

LINCOLN ELECTRIC HOLDINGS, INC.

1 unchanged sentence

Dollars in thousands, except per share amounts

in exchange for operating lease liabilities were $ 5,426 and $ 16,043 during the three and nine months ended September 30, 2024 and $ 1,077 and $ 6,410 during the three and nine months ended September 30, 2023, respectively.

The total future minimum lease payments for noncancelable operating leases were as follows:

September 30, 2024

March 31, 2025

Total lease payments

1 unchanged sentence

Operating lease liabilities

As of September 30, 2024 the weighted average remaining lease term is 6.5 years and the weighted average discount rate used to determine the operating lease liability is 3.7 %.

As of March 31, 2025 the weighted average remaining lease term is 6.3 years and the weighted average discount rate used to determine the operating lease liability is 3.7 %.

N OTE 10 — DEBT

Revolving Credit Agreements

On June 20, 2024, the Company terminated its existing $ 500,000 revolving credit facility and entered into a new $ 1 billion revolving credit facility, which may be increased, subject to certain conditions including the consent of its lenders, by an additional amount up to $ 300,000 .

The new revolving credit facility matures on June 20, 2029.

The new revolving credit facility will initially bear interest on outstanding borrowings at a per annum rate equal to secured overnight finance rate (“SOFR”) plus 1.10 % and could fluctuate based on the Company’s total net leverage ratio at a spread ranging from SOFR plus 1.10 % to SOFR plus 1.60 %.

The financial covenants consist of a maximum net leverage ratio of 3.5 x EBITDA and a minimum interest coverage ratio of 2.5 x EBITDA.

The new revolving credit facility contains customary representations and warranties, as well as customary affirmative, negative and financial covenants for credit facilities of this type (subject to negotiated baskets and exceptions), including limitations on the Company and its subsidiaries with respect to liens, investments, distributions, mergers and acquisitions, dispositions of assets and transactions with affiliates.

As of September 30, 2024, the Company was in compliance with all of its covenants and had no outstanding borrowings under the new revolving credit facility.

The Company has other lines of credit and debt agreements totaling $ 39,993 .

As of September 30, 2024, the Company was in compliance with all of its covenants and had outstanding debt under short-term lines of credit of $ 11,993 .

At March 31, 2025 and December 31, 2024, debt consisted of the following:

March 31, 2025

December 31, 2024

Long-term debt

Interest Rate

Senior Unsecured Notes

On June 20, 2024, the Company entered into a Note Purchase Agreement (the “NPA”) pursuant to which it agreed to issue new senior unsecured notes (“2024 Notes”) in an aggregate principal amount of $ 550,000 , at par.

Pursuant to the NPA, the Company issued one series of the 2024 Notes in the aggregate principal amount of $ 400,000 on June 20, 2024, and two series of the 2024 Notes each in the aggregate principal amount of $ 75,000 on August 22, 2024.

2015 Notes - Series A due August 20, 2025

2015 Notes - Series B due August 20, 2030

2015 Notes - Series C due April 1, 2035

2015 Notes - Series D due April 1, 2045

2016 Notes - Series A due October 20, 2028

2016 Notes - Series B due October 20, 2033

2016 Notes - Series C due October 20, 2037

2016 Notes - Series D due October 20, 2041

2024 Notes - Series A due August 22, 2029

2024 Notes - Series B due August 22, 2031

2024 Notes - Series C due June 20, 2034

Other borrowings due through 2030

Plus interest rate swap adjustment

Less current portion

Less debt issuance costs

Long-term debt, less current portion

Short-term debt

Amounts due to banks

Current portion long-term debt

Total short-term debt

(1) Interest rate was 7.97 % at both March 31, 2025 and December 31, 2024.

(2) Weighted average interest rate of other borrowings related to liquidity needs in a hyperinflationary country was 44.8 % and 47.8 % as of March 31, 2025 and December 31, 2024, respectively.

LINCOLN ELECTRIC HOLDINGS, INC.

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Dollars in thousands, except per share amounts

The maturity and interest rates of the 2024 Notes are as follows:

Maturity Date

Interest Rate

August 22, 2029

August 22, 2031

June 20, 2034

On April 1, 2015 and October 20, 2016, the Company entered into separate Note Purchase Agreements pursuant to which it issued senior unsecured notes (the "Notes") through a private placement.

The 2015 Notes and 2016 Notes each have an aggregate principal amount of $ 350,000 , comprised of four different series ranging from $ 50,000 to $ 100,000 , with maturity dates ranging from August 20, 2025 through April 1, 2045, and interest rates ranging from 2.75 % to 4.02 %.

Interest on the Notes is paid semi-annually.

The Company’s total weighted average effective interest rate and remaining weighted average tenure of the senior unsecured notes is 4.08 %, including the impact from terminated swap agreements as discussed in Note 12, and 9.2 years, respectively.

Senior Unsecured Notes

As of March 31, 2025, the Company’s total weighted average effective interest rate and remaining weighted average tenure of the senior unsecured notes is 4.08 %, including the impact from terminated swap agreements, and 8.7 years, respectively.

The senior unsecured notes contain certain affirmative and negative covenants.

As of September 30, 2024, the Company was in compliance with all of its debt covenants relating to the senior unsecured notes.

On November 29, 2022, the Company entered into a term loan in the aggregate principal amount of $ 400,000 (the “Term Loan”), which was borrowed in full.

On June 20, 2024, the Company used the net proceeds from the issuance of the initial series of 2024 Notes to repay the Term Loan in full.

In June 2024, the Company terminated the interest rate swaps that were associated with the Term Loan and realized a gain of $ 2,428 , which is recorded in Other (expense) income.

As of March 31, 2025, the Company was in compliance with all of its debt covenants relating to the senior unsecured notes.

Revolving Credit Agreements

On June 20, 2024, the Company entered into a $ 1 billion revolving credit facility, which may be increased, subject to certain conditions including the consent of its lenders, by an additional amount up to $ 300,000 .

The revolving credit facility matures on June 20, 2029.

The revolving credit facility will initially bear interest on outstanding borrowings at a per annum rate equal to secured overnight finance rate (“ SOFR ”) plus 1.10 % and could fluctuate based on the Company’s total net leverage ratio at a spread ranging from SOFR plus 1.10 % to SOFR plus 1.60 %.

The financial covenants consist of a maximum net leverage ratio of 3.5 x EBITDA and a minimum interest coverage ratio of 2.5 x EBITDA.

The revolving credit facility contains customary representations and warranties, as well as customary affirmative, negative and financial covenants for credit facilities of this type (subject to negotiated baskets and exceptions), including limitations on the Company and its subsidiaries with respect to liens, investments, distributions, mergers and acquisitions, dispositions of assets and transactions with affiliates.

As of March 31, 2025, the Company was in compliance with all of its covenants and had no outstanding borrowings under the revolving credit facility.

The Company has other lines of credit and debt agreements totaling $ 31,457 .

As of March 31, 2025, the Company was in compliance with all of its covenants and had outstanding debt under short-term lines of credit of $ 4,391 .

Fair Value of Debt

At September 30, 2024 and December 31, 2023, the fair value of long-term debt, including the current portion, was approximately $ 1,235,998 and $ 1,013,795 , respectively, which was determined using available market information and methodologies requiring judgment.

At March 31, 2025 and December 31, 2024, the fair value of long-term debt, including the current portion, was approximately $ 1,200,149 and $ 1,184,313 , respectively.

The approximate fair value of the Company’s long-term debt, including current maturities, was based on a valuation model using Level 2 observable inputs using available market information and methodologies requiring judgment.

The carrying value of this debt at such dates was $ 1,250,477 and $ 1,250,555 , respectively.

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NOTE 11 — INCOME TAXES

The Company recognized $ 101,217 of tax expense on pretax income of $ 427,096 , resulting in an effective income tax rate of 23.7 % for the nine months ended September 30, 2024.

The effective income tax rate was 20.7 % for the nine months ended September 30, 2023.

The effective tax rate was higher for the nine months ended September 30, 2024, as compared with the same period in 2023, primarily due to mix of earnings and discrete tax items.

As of September 30, 2024, the Company had $ 13,971 of unrecognized tax benefits.

If recognized, approximately $ 11,453 would be reflected as a component of income tax expense.

The Company files income tax returns in the U.S.

and various state, local and foreign jurisdictions.

With few exceptions, the Company is no longer subject to U.S.

federal, state and local or non-U.S.

income tax examinations by tax authorities for years before 2019.

The Company is currently subject to U.S., various state and non-U.S.

income tax audits.

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

Unrecognized tax benefits are reviewed on an ongoing basis and are adjusted for changing facts and circumstances, including progress of tax audits and closing of statutes of limitations.

Based on information currently available, management believes that additional audit activity could be completed and/or statutes of limitations may close relating to existing unrecognized tax benefits.

It is reasonably possible there could be a reduction of $ 2,550 in previously unrecognized tax benefits by the end of the third quarter 2025.

The Company recognized $ 34,748 of tax expense on pretax income of $ 153,235 , resulting in an effective income tax rate of 22.7 % for the three months ended March 31, 2025.

The effective income tax rate was 22.2 % for the three months ended March 31, 2024.

The effective tax rate was higher for the three months ended March 31, 2025, as compared with the same period in 2024, primarily due to mix of earnings and discrete tax items.

NOTE 12 — DERIVATIVES

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Both at inception and on an ongoing basis, the derivative instruments that qualify for hedge accounting are assessed as to their effectiveness, when applicable.

Hedge ineffectiveness was immaterial in the three and nine months ended September 30, 2024 and 2023.

Hedge ineffectiveness was immaterial in the three months ended March 31, 2025 and 2024.

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

The Company is subject to the credit risk of the counterparties to derivative instruments.

Counterparties include a number of major banks and financial institutions.

None of the concentrations of risk with any individual counterparty was considered significant at September 30, 2024.

None of the concentrations of risk with any individual counterparty was considered significant at March 31, 2025.

The Company does not expect any counterparties to fail to meet their obligations.

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Certain foreign currency forward contracts are qualified and designated as cash flow hedges.

The dollar equivalent gross notional amount of these short-term contracts was $ 94,030 at September 30, 2024 and $ 84,148 at December 31, 2023.

The Company had interest rate forward starting swap agreements that were qualified and designated as cash flow hedges that were terminated during the second quarter of 2024.

At December 31, 2023, the dollar equivalent gross notional amount of the contracts was $ 100,000 .

Upon termination of the contracts in the second quarter of 2024, the Company had a gain of $ 25,852 recorded in AOCI that will be amortized to Interest expense, net over the life of the associated debt.

The Company has commodity contracts that are qualified and designated as cash flow hedges.

The notional amount of these contracts were 25,000 pounds and 200,000 pounds at September 30, 2024 and December 31, 2023, respectively.

In March 2023, the Company entered into interest rate swap agreements, which were qualified and designated as cash flow hedges, with an aggregate notional amount of $ 150,000 .

In June 2024, the Company terminated the interest rate swaps that were associated with the Term Loan and realized a gain of $ 2,428 , which is recorded in Other (expense) income.

The dollar equivalent gross notional amount of these short-term contracts was $ 88,276 and $ 96,444 at March 31, 2025 and December 31, 2024, respectively.

The Company had interest rate forward starting swap agreements that were qualified and designated as cash flow hedges that were terminated during 2024.

Upon termination of the contracts in 2024, the company had a gain of $ 25,852 recorded in AOCI that will be amortized to Interest expense, net over the life of the associated debt.

Net Investment Hedges

The Company has foreign currency forward contracts that qualify and are designated as net investment hedges.

The dollar equivalent gross notional amount of these contracts was $ 334,947 and $ 119,607 at September 30, 2024 and December 31, 2023, respectively.

The dollar equivalent gross notional amount of these contracts was $ 354,894 and $ 319,450 at March 31, 2025 and December 31, 2024, respectively.

Derivatives Not Designated as Hedging Instruments

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These derivatives are held as economic hedges of certain balance sheet exposures.

The dollar equivalent gross notional amount of these contracts was $ 384,414 and $ 492,600 at September 30, 2024 and December 31, 2023, respectively.

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

Fair values of derivative instruments in the Company’s Condensed Consolidated Balance Sheets follow:

September 30, 2024

The dollar equivalent gross notional amount of these contracts was $ 380,684 and $ 421,754 at March 31, 2025 and December 31, 2024, respectively.

Fair values of derivative instruments in the Company’s Condensed Consolidated Balance Sheets consisted of the following:

March 31, 2025

December 31, 2024

2 unchanged sentences

Foreign exchange contracts

Interest rate swap agreements

Forward starting swap agreements

Net investment contracts

Commodity contracts

Not designated as hedging instruments:

2 unchanged sentences

The effects of undesignated derivative instruments on the Company’s Consolidated Statements of Income consisted of the following:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Derivatives by hedge designation

Classification of (loss) gain

Classification of gain (loss)

Not designated as hedges:

2 unchanged sentences

& administrative expenses

The effects of designated hedges on AOCI and the Company’s Consolidated Statements of Income consisted of the following:

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

The effects of designated hedges on AOCI consisted of the following:

Total gain (loss) recognized in AOCI, net of tax

September 30, 2024

March 31, 2025

December 31, 2024

Foreign exchange contracts

Interest rate swap agreements

Forward starting swap agreements

Net investment contracts

Commodity contracts

The Company expects a loss of $ 2,004 related to existing contracts to be reclassified from AOCI, net of tax, to earnings over the next 12 months as the hedged transactions are realized.

Three Months Ended September 30,

Nine Months Ended September 30,

Gain (loss) recognized in the

The Company expects a gain of $ 394 related to existing contracts to be reclassified from AOCI, net of tax, to earnings over the next 12 months as the hedged transactions are realized.

The effects of designated hedges on the Company’s Consolidated Statements of Income consisted of the following:

Three Months Ended March 31,

(Loss) gain recognized in the

Derivative type

6 unchanged sentences

Interest expense, net

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

NOTE 13 - FAIR VALUE

The following table provides a summary of assets and liabilities as of September 30, 2024, measured at fair value on a recurring basis:

The following table provides a summary of assets and liabilities as of March 31, 2025, measured at fair value on a recurring basis:

Quoted Prices in

4 unchanged sentences

Observable Inputs

September 30, 2024

March 31, 2025

Inputs (Level 3)

Foreign exchange contracts

Commodity contracts

Pension surplus

3 unchanged sentences

Total liabilities

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

The following table provides a summary of assets and liabilities as of December 31, 2024, measured at fair value on a recurring basis:

8 unchanged sentences

Foreign exchange contracts

Interest rate swap agreements

Commodity contracts

Forward starting swap agreements

Net investment contracts

Pension Surplus

Foreign exchange contracts

Net investment contracts

Deferred compensation

1 unchanged sentence

The fair value of the Company’s pension surplus assets are based on quoted market prices in active markets and are included in the Level 1 fair value hierarchy.

The pension surplus assets are invested in money market and short-term duration bond funds at September 30, 2024.

The pension surplus assets are invested in money market and short-term duration bond funds at March 31, 2025.

The Company’s derivative contracts are valued at fair value using the market approach.

The Company measures the fair value of foreign exchange contracts, forward starting swap agreements, net investment contracts and interest rate swap agreements using Level 2 inputs based on observable spot and forward rates in active markets.

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

The Company measures the fair value of foreign exchange contracts and net investment contracts using Level 2 inputs based on observable spot and forward rates in active markets.

The deferred compensation liability is the Company’s obligation under its executive deferred compensation plan.

The Company measures the fair value of the liability using the market values of the participants’ underlying investment fund elections.

The fair value of Cash and cash equivalents, Marketable securities, Accounts receivable, Short-term debt excluding the current portion of Long-term debt and Trade accounts payable approximated book value due to the short-term nature of these instruments at both September 30, 2024 and December 31, 2023.

The fair value of Cash and cash equivalents, Accounts receivable, Short-term debt excluding the current portion of Long-term debt and Trade accounts payable approximated book value due to the short-term nature of these instruments at both March 31, 2025 and December 31, 2024.

The Company has various financial instruments, including cash and cash equivalents, short and long-term debt and forward contracts.

4 unchanged sentences

The Company pays the financial institution the stated amount of the confirmed invoices from its designated suppliers on the original maturity dates of the invoices.

Invoices with suppliers have terms between 120 and 180 days .

The Company does not provide secured legal assets or other forms of guarantees under the arrangement and has no involvement in establishing the terms or conditions of the arrangement between its suppliers and the financial institution.

The amounts due to the financial institution for suppliers that participate in the supplier financing program are included in Trade accounts payable on the Company’s Condensed Consolidated Balance Sheets, and the associated payments are included in operating activities in the Consolidated Statements of Cash Flows.

At September 30, 2024 and December 31, 2023, Trade accounts payable included $ 32,760 and $ 29,111 , respectively, payable to suppliers that have elected to participate in the supplier financing program.

At March 31, 2025 and December 31, 2024, Trade accounts payable included $ 33,938 and $ 29,164 , respectively, payable to suppliers that have elected to participate in the supplier financing program.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements