Lincoln Electric Reports Second Consecutive Record Sales Quarter of $744.0 Million; 2Q '12 Sales Increase of 6.4%; 2Q Operating Income Increase of 20.0%; 2Q EPS of $0.79, $0.81 as Adjusted, an Increase of 16.2%, 19.1% as Adjusted

Jul 30, 2012, 08:54 ET from Lincoln Electric Holdings, Inc.

CLEVELAND, July 30, 2012 /PRNewswire/ -- 

Second Quarter and First Half 2012 Highlights

  • Sales were $744.0 million, an increase of 6.4% from the Second Quarter 2011; First Half 2012 Sales were $1.5 billion, an increase of 13.3% from 2011
  • Operating income increased 20.0% to $96.0 million, or 12.9% of sales, from $80.0 million, or 11.4% of sales, in the Second Quarter 2011; Adjusted operating income increased 23.4% to $98.7 million or 13.3% of sales
  • Net income increased 16.3% to $66.3 million, or $0.79 per diluted share, from $57.0 million, or $0.68 per diluted share, in the Second Quarter 2011; Adjusted net income increased 19.6% to $68.1 million, or $0.81 per diluted share, from $57.0 million, or $0.68 per diluted share, in the Second Quarter 2011
  • Net cash provided by operating activities in the Second Quarter 2012 increased $52.9 million, or 183.4%, to $81.7 million; Net cash provided by operating activities in the First Half 2012 increased $115.3 million, or 253.0%, to $160.9 million

Lincoln Electric Holdings, Inc. (the "Company") (Nasdaq: LECO) today 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%.  Operating income for the second quarter increased $16.0 million to $96.0 million, or 12.9% of sales, from $80.0 million, or 11.4% of sales, in the comparable 2011 period.  The effective tax rate for the second quarter 2012 was 32.4% compared with 30.0% 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%.  Operating income for the six months ended June 30, 2012 increased $48.2 million to $187.7 million, or 12.8% of sales, from $139.5 million, or 10.7% 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% compared with 26.8% 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, 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. 

"We are cautious entering the second half of 2012 as we face increased uncertainty in both the political and economic environments around the world.  Although our North American markets remain strong, we have seen demand softening in most of our international markets and global economic growth forecasts continue to weaken.  Our global growth strategies, which include acquisitions, new product introductions and increasing our commercial presence worldwide, will help us offset the weak economic conditions.  Our solid liquidity and ongoing attention to continuous improvements in our operations will provide the increased operating leverage and flexibility required to execute our long-term strategic objectives."

Net cash provided by operating activities increased $52.9 million to $81.7 million in the second quarter from $28.8 million for the comparable period in 2011.  During the quarter, the Company returned $34.2 million to shareholders through the payment of $14.2 million in dividends and the repurchase of $20.0 million, or 428,300 of the Company's common shares, for treasury.  The Company also invested $27.4 million in acquisitions and voluntarily contributed $18.0 million to its U.S. pension plans during the quarter.

Net cash provided by operating activities increased $115.3 million to $160.9 million in the six months ended June 30, 2012 from $45.6 million for the comparable period in 2011.  During the period, the Company repaid its $80.0 million senior unsecured note.  The Company also returned $68.5 million to shareholders through the payment of $28.4 million in dividends and the repurchase of $40.1 million, or 860,684 of the Company's common shares, for treasury during the period.  The Company also invested $49.3 million in acquisitions and voluntarily contributed $36.0 million to its U.S. pension plans.

The Company's Board of Directors declared a quarterly cash dividend of $0.17 per share, which was paid on July 13, 2012 to holders of record as of June 29, 2012.

Financial results for the second quarter 2012 can also be obtained at http://www.lincolnelectric.com/InvestorNews.

A conference call to discuss the second quarter 2012 financial results is scheduled for today, Monday, July 30, 2012, at 10:00 a.m., Eastern Time.  An audio webcast of the call is accessible through the Company's website at http://www.lincolnelectric.com/InvestorWebcasts/.

Adjusted operating income, adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures that management believes are important to investors to evaluate and compare the Company's financial performance from period to period. Management uses this information in assessing and evaluating the Company's underlying operating performance.  Non-GAAP financial measures should be read in conjunction with the GAAP financial measures, as non-GAAP measures are a supplement to, and not a replacement for, GAAP financial measures.  Please refer to the attached schedule for a reconciliation of non-GAAP financial measures to the related GAAP financial measures.

Lincoln Electric is the world leader in the design, development and manufacture of arc welding products, robotic arc welding systems, plasma and oxyfuel cutting equipment and has a leading global position in the brazing and soldering alloys market.  Headquartered in Cleveland, Ohio, Lincoln has 45 manufacturing locations, including operations and joint ventures in 20 countries and a worldwide network of distributors and sales offices covering more than 160 countries.  For more information about Lincoln Electric and its products and services, visit the Company's website at http://www.lincolnelectric.com.

The Company's expectations and beliefs concerning the future contained in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements reflect management's current expectations and involve a number of risks and uncertainties.  Forward-looking statements generally can be identified by the use of words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "forecast," "guidance" or words of similar meaning.  Actual results may differ materially from such statements due to a variety of factors that could adversely affect the Company's operating results.  The factors include, but are not limited to: general economic and market conditions; the effectiveness of operating initiatives; currency exchange and interest rates; adverse outcome of pending or potential litigation; possible acquisitions; market risks and price fluctuations related to the purchase of commodities and energy; global regulatory complexity; and the possible effects of events beyond our control, such as political unrest, acts of terror and natural disasters, on the Company or its customers, suppliers and the economy in general.  For additional discussion, see "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K.

Lincoln Electric Holdings, Inc.

Financial Highlights 

(In thousands, except per share amounts)

(Unaudited)

Consolidated Statements of Income

Three Months Ended June 30,

Fav (Unfav) to Prior Year

2012

 % of Sales 

2011

 % of Sales 

$

%

Net sales

$     744,045

100.0%

$     699,293

100.0%

$       44,752

6.4%

Cost of goods sold

519,048

69.8%

503,789

72.0%

(15,259)

(3.0%)

Gross profit

224,997

30.2%

195,504

28.0%

29,493

15.1%

Selling, general & administrative expenses

127,714

17.2%

115,546

16.5%

(12,168)

(10.5%)

Rationalization and asset impairment charges (gains)

1,258

0.2%

(75)

-

(1,333)

(1777.3%)

Operating income

96,025

12.9%

80,033

11.4%

15,992

20.0%

Interest income

849

0.1%

661

0.1%

188

28.4%

Equity earnings in affiliates

2,006

0.3%

1,715

0.2%

291

17.0%

Other income 

403

0.1%

712

0.1%

(309)

(43.4%)

Interest expense

(1,126)

(0.2%)

(1,627)

(0.2%)

501

30.8%

Income before income taxes

98,157

13.2%

81,494

11.7%

16,663

20.4%

Income taxes

31,792

4.3%

24,472

3.5%

(7,320)

(29.9%)

Effective tax rate

32.4%

30.0%

(2.4%)

Net income including noncontrolling interests

66,365

8.9%

57,022

8.2%

9,343

16.4%

Noncontrolling interests in subsidiaries' earnings

46

-

9

-

37

411.1%

Net income

$       66,319

8.9%

$       57,013

8.2%

$         9,306

16.3%

Basic earnings per share 

$           0.80

$           0.69

$           0.11

15.9%

Diluted earnings per share 

$           0.79

$           0.68

$           0.11

16.2%

Weighted average shares (basic)

83,328

83,037

Weighted average shares (diluted)

84,448

84,105

Six Months Ended June 30,

Fav (Unfav) to Prior Year

2012

 % of Sales 

2011

 % of Sales 

$

%

Net sales

$  1,471,167

100.0%

$  1,298,472

100.0%

$     172,695

13.3%

Cost of goods sold

1,030,905

70.1%

941,530

72.5%

(89,375)

(9.5%)

Gross profit

440,262

29.9%

356,942

27.5%

83,320

23.3%

Selling, general & administrative expenses

251,329

17.1%

217,165

16.7%

(34,164)

(15.7%)

Rationalization and asset impairment charges (gains)

1,258

0.1%

282

-

(976)

(346.1%)

Operating income

187,675

12.8%

139,495

10.7%

48,180

34.5%

Interest income

1,732

0.1%

1,269

0.1%

463

36.5%

Equity earnings in affiliates

2,698

0.2%

2,545

0.2%

153

6.0%

Other income 

1,269

0.1%

2,007

0.2%

(738)

(36.8%)

Interest expense

(2,298)

(0.2%)

(3,285)

(0.3%)

987

30.0%

Income before income taxes

191,076

13.0%

142,031

10.9%

49,045

34.5%

Income taxes

60,562

4.1%

38,067

2.9%

(22,495)

(59.1%)

Effective tax rate

31.7%

26.8%

(4.9%)

Net income including noncontrolling interests

130,514

8.9%

103,964

8.0%

26,550

25.5%

Noncontrolling interests in subsidiaries' (loss) earnings

(48)

-

41

-

(89)

(217.1%)

Net income

$     130,562

8.9%

$     103,923

8.0%

$       26,639

25.6%

Basic earnings per share 

$           1.57

$           1.25

$           0.32

25.6%

Diluted earnings per share 

$           1.54

$           1.23

$           0.31

25.2%

Weighted average shares (basic)

83,390

83,414

Weighted average shares (diluted)

84,527

84,493

Lincoln Electric Holdings, Inc.

Financial Highlights 

(In thousands, except per share amounts)

(Unaudited)

Non-GAAP Financial Measures

Three Months Ended June 30,

Six Months Ended June 30,

2012

2011

2012

2011

Operating income as reported

$             96,025

$             80,033

$           187,675

$           139,495

   Special items (pre-tax):

      Rationalization and asset impairment charges (gains) (1)

1,258

(75)

1,258

282

      Venezuelan statutory severance obligation  (2)

1,381

-

1,381

-

Adjusted operating income (4)

$             98,664

$             79,958

$           190,314

$           139,777

Net income as reported

$             66,319

$             57,013

$           130,562

$           103,923

   Special items (after-tax):

      Rationalization and asset impairment charges (gains) (1)

915

(44)

915

237

      Venezuelan statutory severance obligation  (2)

906

-

906

-

      Adjustment for tax audit settlements (3)

-

-

-

(4,844)

Adjusted net income (4)

$             68,140

$             56,969

$           132,383

$             99,316

Diluted earnings per share as reported

$                 0.79

$                 0.68

$                 1.54

$                 1.23

Special items

0.02

-

0.03

(0.05)

Adjusted diluted earnings per share (4)

$                 0.81

$                 0.68

$                 1.57

$                 1.18

Weighted average shares (diluted)

84,448

84,105

84,527

84,493

(1)

The three and six month periods ended June 30, 2012 include charges associated with severance and other costs from the consolidation of manufacturing operations initiated in 2012.  The three and six month periods ended June 30, 2011 include charges associated with severance and other costs from the consolidation of manufacturing operations initiated in 2009 offset by gains related to the sale of assets at rationalized operations.

 

(2)

Represents an unfavorable adjustment due to a change in Venezuelan labor law which provides for increased employee severance obligations.

 

(3)

Represents a favorable adjustment for tax audit settlements.

 

(4)

Adjusted operating income, Adjusted net income and Adjusted diluted earnings per share are non-GAAP financial measures that management believes are important to investors to evaluate and compare the Company's financial performance from period to period.  Management uses this information in assessing and evaluating the Company's underlying operating performance.  Non-GAAP financial measures should be read in conjunction with the GAAP financial measures, as non-GAAP measures are a supplement to, and not a replacement for, GAAP financial measures.

Lincoln Electric Holdings, Inc.

Financial Highlights 

(In thousands)

(Unaudited)

Balance Sheet Highlights

June 30,

December 31,

Selected Consolidated Balance Sheet Data

2012

2011

Cash and cash equivalents

$       307,963

$       361,101

Total current assets

1,236,340

1,219,270

Property, plant and equipment, net

476,478

470,451

Total assets

2,021,988

1,976,776

Total current liabilities

459,420

471,042

Short-term debt (1)

20,733

101,418

Long-term debt

2,396

1,960

Total equity

1,281,008

1,193,242

June 30,

December 31,

Net Operating Working Capital

2012

2011

Accounts receivable

$       422,532

$       386,197

Inventory

400,562

373,238

Trade accounts payable

202,413

176,312

Net operating working capital

$       620,681

$       583,123

Net operating working capital to net sales(2)

20.9%

21.0%

June 30,

December 31,

Invested Capital

2012

2011

Short-term debt (1)

$         20,733

$       101,418

Long-term debt

2,396

1,960

Total debt

23,129

103,378

Total equity

1,281,008

1,193,242

Invested capital

$    1,304,137

$    1,296,620

Total debt / invested capital

1.8%

8.0%

Return on invested capital (3)

18.8%

16.9%

(1)

Includes current portion of long-term debt.

 

(2)

Net operating working capital to net sales is defined as net operating working capital divided by annualized rolling three months of sales.

 

(3)

Return on invested capital is defined as rolling 12 months of earnings excluding tax-effected interest divided by invested capital.

 

Lincoln Electric Holdings, Inc.

Financial Highlights 

(In thousands, except per share amounts)

(Unaudited)

Consolidated Statements of Cash Flows

Three Months Ended June 30,

2012

2011

OPERATING ACTIVITIES:

Net income

$              66,319

$              57,013

Noncontrolling interests in subsidiaries' earnings 

46

9

Net income including noncontrolling interests

66,365

57,022

Adjustments to reconcile Net income including noncontrolling interests to Net

  cash provided by operating activities:

Asset impairment charges (gains)

-

(204)

Depreciation and amortization

16,206

16,143

Equity earnings in affiliates, net 

(1,154)

(196)

Other non-cash items, net

20,315

5,592

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

Decrease (increase) in accounts receivable

8,203

(32,399)

Increase in inventories

(6,240)

(49,663)

(Decrease) increase in trade accounts payable

(6,958)

10,484

Decrease in accrued pensions

(17,887)

(9,140)

Net change in other current assets and liabilities

3,409

31,815

Net change in other long-term assets and liabilities

(537)

(616)

NET CASH PROVIDED BY OPERATING ACTIVITIES

81,722

28,838

INVESTING ACTIVITIES:

Capital expenditures

(13,680)

(13,867)

Acquisition of businesses, net of cash acquired

(27,439)

-

Proceeds from sale of property, plant and equipment

128

707

Other investing activities

(1,541)

-

NET CASH USED BY INVESTING ACTIVITIES

(42,532)

(13,160)

FINANCING ACTIVITIES:

Net change in borrowings

(1,371)

(167)

Proceeds from exercise of stock options

4,772

3,335

Tax benefit from exercise of stock options

2,471

1,312

Purchase of shares for treasury

(20,040)

(12,404)

Cash dividends paid to shareholders

(14,177)

(13,018)

NET CASH USED BY FINANCING ACTIVITIES

(28,345)

(20,942)

Effect of exchange rate changes on Cash and cash equivalents

(3,720)

1,764

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

7,125

(3,500)

Cash and cash equivalents at beginning of period

300,838

341,415

Cash and cash equivalents at end of period

$            307,963

$            337,915

Cash dividends paid per share

$                  0.17

$                0.155

 

Lincoln Electric Holdings, Inc.

Financial Highlights 

(In thousands, except per share amounts)

(Unaudited)

Consolidated Statements of Cash Flows

Six Months Ended June 30,

2012

2011

OPERATING ACTIVITIES:

Net income

$            130,562

$            103,923

Noncontrolling interests in subsidiaries' (loss) earnings 

(48)

41

Net income including noncontrolling interests

130,514

103,964

Adjustments to reconcile Net income including noncontrolling interests to Net

  cash provided by operating activities:

Asset impairment charges (gains)

-

23

Depreciation and amortization

31,785

31,349

Equity earnings in affiliates, net 

(711)

(558)

Other non-cash items, net

35,674

24,432

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

Increase in accounts receivable

(21,549)

(75,723)

Increase in inventories

(20,702)

(111,727)

Increase in trade accounts payable

16,383

66,037

Decrease in accrued pensions

(36,857)

(16,544)

Net change in other current assets and liabilities

22,484

27,385

Net change in other long-term assets and liabilities

3,865

(3,062)

NET CASH PROVIDED BY OPERATING ACTIVITIES

160,886

45,576

INVESTING ACTIVITIES:

Capital expenditures

(26,247)

(29,370)

Acquisition of businesses, net of cash acquired

(49,335)

(17,881)

Proceeds from sale of property, plant and equipment

338

849

Other investing activities

(1,541)

-

NET CASH USED BY INVESTING ACTIVITIES

(76,785)

(46,402)

FINANCING ACTIVITIES:

Net change in borrowings

(85,369)

(1,486)

Proceeds from exercise of stock options

12,212

6,199

Tax benefit from exercise of stock options

5,454

2,027

Purchase of shares for treasury

(40,138)

(13,309)

Cash dividends paid to shareholders

(28,363)

(26,005)

NET CASH USED BY FINANCING ACTIVITIES

(136,204)

(32,574)

Effect of exchange rate changes on Cash and cash equivalents

(1,035)

5,122

DECREASE IN CASH AND CASH EQUIVALENTS

(53,138)

(28,278)

Cash and cash equivalents at beginning of period

361,101

366,193

Cash and cash equivalents at end of period

$            307,963

$            337,915

Cash dividends paid per share

$                  0.34

$                  0.31

 

Lincoln Electric Holdings, Inc.

Segment Highlights 

(In thousands)

(Unaudited)

North

South

The Harris

America

Europe 

Asia Pacific

America

Products

Corporate /

Welding

Welding

Welding

Welding

Group

Eliminations

Consolidated

Three months ended

    June 30, 2012

Net sales

$           416,223

$        114,437

$          85,433

$          37,169

$          90,783

$                  -

$           744,045

Inter-segment sales 

39,658

4,466

5,076

11

2,353

(51,564)

-

     Total

$           455,881

$        118,903

$          90,509

$          37,180

$          93,136

$         (51,564)

$           744,045

EBIT(1)

$             76,479

$          10,399

$            3,425

$            1,599

$            9,041

$           (2,509)

$             98,434

     As a percent of total sales

16.8%

8.7%

3.8%

4.3%

9.7%

13.2%

Special items charge (gain)(2)

$                    77

$               592

$               589

$            1,381

$                    -

$                    -

$               2,639

EBIT, as adjusted(4)

$             76,556

$          10,991

$            4,014

$            2,980

$            9,041

$           (2,509)

$           101,073

     As a percent of total sales

16.8%

9.2%

4.4%

8.0%

9.7%

13.6%

Three months ended

     June 30, 2011

Net sales

$           321,656

$        139,248

$        102,721

$          37,769

$          97,899

$                    -

$           699,293

Inter-segment sales 

37,222

6,302

3,397

120

2,017

(49,058)

-

     Total

$           358,878

$        145,550

$        106,118

$          37,889

$          99,916

$         (49,058)

$           699,293

EBIT(1)

$             58,120

$          11,039

$            1,365

$            3,527

$            9,197

$              (788)

$             82,460

     As a percent of total sales

16.2%

7.6%

1.3%

9.3%

9.2%

11.8%

Special items charge (gain)(3)

$                      -

$                 34

$              (109)

$                   -

$                    -

$                    -

$                  (75)

EBIT, as adjusted(4)

$             58,120

$          11,073

$            1,256

$            3,527

$            9,197

$              (788)

$             82,385

     As a percent of total sales

16.2%

7.6%

1.2%

9.3%

9.2%

11.8%

Six months ended

     June 30, 2012

Net sales

$           797,552

$        240,240

$        177,996

$          77,007

$        178,372

$                  -

$        1,471,167

Inter-segment sales 

73,200

8,917

8,893

11

4,736

(95,757)

-

     Total

$           870,752

$        249,157

$        186,889

$          77,018

$        183,108

$         (95,757)

$        1,471,167

EBIT(1)

$           145,998

$          23,210

$            5,998

$            4,504

$          16,194

$           (4,262)

$           191,642

     As a percent of total sales

16.8%

9.3%

3.2%

5.8%

8.8%

13.0%

Special items charge (gain)(2)

$                    77

$               592

$               589

$            1,381

$                    -

$                    -

$               2,639

EBIT, as adjusted(4)

$           146,075

$          23,802

$            6,587

$            5,885

$          16,194

$           (4,262)

$           194,281

     As a percent of total sales

16.8%

9.6%

3.5%

7.6%

8.8%

13.2%

Six months ended

     June 30, 2011

Net sales

$           602,413

$        253,456

$        190,281

$          71,842

$        180,480

$                  -

$        1,298,472

Inter-segment sales 

72,349

10,137

6,610

120

4,250

(93,466)

-

     Total

$           674,762

$        263,593

$        196,891

$          71,962

$        184,730

$         (93,466)

$        1,298,472

EBIT(1)

$           104,756

$          16,593

$            1,492

$            5,575

$          15,740

$              (109)

$           144,047

     As a percent of total sales

15.5%

6.3%

0.8%

7.7%

8.5%

11.1%

Special items charge (gain)(3)

$                      -

$               392

$              (110)

$                  -

$                    -

$                    -

$                  282

EBIT, as adjusted(4)

$           104,756

$          16,985

$            1,382

$            5,575

$          15,740

$              (109)

$           144,329

     As a percent of total sales

15.5%

6.4%

0.7%

7.7%

8.5%

11.1%

(1)

EBIT is defined as Operating income plus Equity earnings in affiliates and Other income.

 

(2)

Special items include rationalization and asset impairment charges (gains) and an unfavorable adjustment  due to a change in Venezuelan labor law which provides for increased employee severance obligations.

 

(3)

Special items include rationalization and asset impairment charges (gains).

 

(4)

The primary profit measure used by management to assess segment performance is EBIT, as adjusted.  EBIT for each operating segment is adjusted for special items to derive EBIT, as adjusted. 

 

Lincoln Electric Holdings, Inc.

Change in Net Sales by Segment

(In thousands)

(Unaudited)

Three Months Ended June 30th Change in Net Sales by Segment

Change in Net Sales due to:

Net Sales

Foreign

Net Sales

2011

Volume

Acquisitions

Price

Exchange

2012

Operating Segments

North America Welding

$    321,656

$      42,862

$      44,239

$      10,945

$      (3,479)

$    416,223

Europe Welding

139,248

(12,681)

-

2,394

(14,524)

114,437

Asia Pacific Welding

102,721

(17,544)

-

1,219

(963)

85,433

South America Welding

37,769

(1,940)

-

4,518

(3,178)

37,169

The Harris Products Group

97,899

3,923

-

(7,681)

(3,358)

90,783

Consolidated

$    699,293

$      14,620

$      44,239

$      11,395

$    (25,502)

$    744,045

% Change

North America Welding

13.3%

13.8%

3.4%

(1.1%)

29.4%

Europe Welding

(9.1%)

-

1.7%

(10.4%)

(17.8%)

Asia Pacific Welding

(17.1%)

-

1.2%

(0.9%)

(16.8%)

South America Welding

(5.1%)

-

12.0%

(8.4%)

(1.6%)

The Harris Products Group

4.0%

-

(7.8%)

(3.4%)

(7.3%)

Consolidated

2.1%

6.3%

1.6%

(3.6%)

6.4%

Six Months Ended June 30th Change in Net Sales by Segment

Change in Net Sales due to:

Net Sales

Foreign

Net Sales

2011

Volume

Acquisitions

Price

Exchange

2012

Operating Segments

North America Welding

$    602,413

$    106,141

$      71,557

$      21,785

$      (4,344)

$    797,552

Europe Welding

253,456

(8,881)

8,322

7,756

(20,413)

240,240

Asia Pacific Welding

190,281

(17,162)

-

3,110

1,767

177,996

South America Welding

71,842

1,653

-

7,576

(4,064)

77,007

The Harris Products Group

180,480

9,301

-

(6,911)

(4,498)

178,372

Consolidated

$ 1,298,472

$      91,052

$      79,879

$      33,316

$    (31,552)

$ 1,471,167

% Change

North America Welding

17.6%

11.9%

3.6%

(0.7%)

32.4%

Europe Welding

(3.5%)

3.3%

3.1%

(8.1%)