Lincoln Electric Reports Record Sales Quarter

Sales were a record $744.0 million in the second quarter 2012, but the company is cautious of the increased uncertainty in both the political and economic environments around the world. North American markets remain strong, but demand is softening in most international markets and global economic growth forecasts continue to weaken.

Lincoln Electric Holdings, Inc. (Cleveland, OH) reported second quarter 2012 net income of $66.3 million, or $0.79 per diluted share. Adjusted net income was $68.1 million, or $0.81 per diluted share, compared to adjusted net income of $57.0 million, or $0.68 per diluted share, in the comparable 2011 period.

Sales were $744.0 million in the second quarter 2012 versus $699.3 million in the comparable 2011 period, an increase of 6.4 percent.  Operating income for the second quarter increased $16.0 million to $96.0 million, or 12.9 percent of sales, from $80.0 million, or 11.4 percent of sales, in the comparable 2011 period.  The effective tax rate for the second quarter 2012 was 32.4 percent compared with 30.0 percent in the same period of 2011.

Sales for the six months ended June 30, 2012 were $1.5 billion versus $1.3 billion in the comparable 2011 period, an increase of 13.3 percent.  Operating income for the six months ended June 30, 2012 increased $48.2 million to $187.7 million, or 12.8 percent of sales, from $139.5 million, or 10.7 percent of sales, in the comparable 2011 period.

Net income for the six months ended June 30, 2012 was $130.6 million, or $1.54 per diluted share, compared with net income of $103.9 million, or $1.23 per diluted share, in the comparable 2011 period.  Adjusted net income was $132.4 million, or $1.57 per diluted share, compared to adjusted net income of $99.3 million, or $1.18 per diluted share, in the comparable 2011 period.  The effective tax rate for the six months ended June 30, 2012 was 31.7 percent compared with 26.8 percent in 2011.  The six months ended June 30, 2011 included a favorable $4.8 million tax adjustment for tax audit settlements.

“We are pleased to report our second consecutive quarter of record sales,” said John M. Stropki, the chairman and chief executive officer. “Sales levels, overall profitability and operating cash flows all improved during the quarter despite the ongoing economic challenges in many of our key markets.  The continued strength in operating performance was driven by the strong performance in North America, improved product mix and better pricing dynamics in many of our business segments.