GlobeNewswire Inc | Feb 12, 2021 07:30AM EST

February 12, 2021

Fourth Quarter 2020 Highlights

* Net sales decline 5.8% to $693.8 million on 5.6% lower organic sales * Operating income margin of 12.0%; Adjusted operating income margin of 13.4% * EPS increases 4.9% to $1.08; Adjusted EPS increases 7.8% to $1.24 * Record fourth quarter cash flows from operations of $135.8 million with 152% cash conversion

CLEVELAND, Feb. 12, 2021 (GLOBE NEWSWIRE) -- Lincoln Electric Holdings,Inc. (the Company) (Nasdaq: LECO) today reported fourth quarter 2020 net income of $65.1 million, or diluted earnings per share (EPS) of $1.08, which includes special item after-tax charges of $9.9 million, or $0.16 EPS. This compares with prior year period net income of $63.7 million, or $1.03 EPS, which included special item after-tax charges of $7.3 million, or $0.12 EPS. Excluding these items, fourth quarter 2020 Adjusted net income was $75.0 million, or $1.24 Adjusted EPS. This compares with Adjusted net income of $71.0 million, or $1.15 Adjusted EPS in the prior year period.

Fourth quarter 2020 sales decreased 5.8% to $693.8 million from a 5.6% decrease in organic sales and 0.2% unfavorable foreign exchange. Operating income for the fourth quarter 2020 was $83.4 million, or 12.0% of sales, including $9.5 million in rationalization charges. This compares with operating income of $82.7 million, or 11.2% of sales, in the prior year period. Excluding special items, Adjusted operating income was $92.9 million, or 13.4% of sales, as compared with $91.6 million, or 12.4% of sales, in the prior year period.

I am proud of our organizations outstanding teamwork during this challenging year as we have been focused on safely serving our customers with improving demand through the fourth quarter," stated Christopher L. Mapes, Chairman, President and Chief Executive Officer. Strong execution of our strategic initiatives and cost reduction actions generated record cash flows, strong cash conversion performance and earnings growth in the quarter while also delivering record safety and environmental performance. Mapes continued, Looking ahead, we are well-positioned to capitalize on growth and increase profitability and returns as we focus on achieving our long-term Higher Standard 2025 Strategy goals and superior long-term value for our stakeholders.

Twelve Months 2020 Summary

Net income for the twelve months ended December 31, 2020 was $206.1 million, or $3.42 EPS, which includes special item after-tax charges of $43.8 million, or $0.73 EPS. This compares with prior year period net income of $293.1 million, or $4.68 EPS, which included special item after-tax net charges of $1.5 million, or $0.02 EPS. Excluding these items, Adjusted net income for the twelve months ended December 31, 2020 was $249.9 million, or $4.15 Adjusted EPS, compared with Adjusted net income of $294.6 million, or $4.70 Adjusted EPS, in the comparable 2019 period.

Sales decreased 11.6% to $2.7 billion in the twelve months ended December 31, 2020 from a 12.2% decrease in organic sales and 0.7% unfavorable foreign exchange, partially offset by a 1.3% benefit from acquisitions. Operating income for the twelve months ended December 31, 2020 was $282.1 million, or 10.6% of sales. This compares with operating income of $370.9 million, or 12.4% of sales, in the comparable 2019 period. Excluding special items, Adjusted operating income was $328.3 million, or 12.4% of sales, as compared with $387.9 million, or 12.9% of sales, in the comparable 2019 period.

Webcast Information

A conference call to discuss fourth quarter 2020 financial results will be webcast live today, February 12, 2021, at 10:00a.m., Eastern Time. This webcast is accessible at https://ir.lincolnelectric.com. Listeners should go to the web site prior to the call to register, download and install any necessary audio software. A replay of the webcast will be available on the Company's web site.

If investors would like to ask questions, please dial (877) 344-3899 (domestic) or (315) 625-3087 (international) and use confirmation code 7190715. Telephone participants are asked to dial in 10 - 15 minutes prior to the start of the conference call.

Financial results for the fourth quarter 2020 can also be obtained at https://ir.lincolnelectric.com.

About Lincoln Electric

Lincoln Electric is the world leader in the design, development and manufacture of arc welding products, automated joining, assembly and cutting systems, plasma and oxy-fuel cutting equipment and has a leading global position in brazing and soldering alloys. Headquartered in Cleveland, Ohio, Lincoln has 55 manufacturing locations in 18 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 Companys website at https://www.lincolnelectric.com.

Non-GAAP Information

Adjusted operating income, Adjusted net income, Adjusted EBIT, Adjusted effective tax rate, Adjusted diluted earnings per share, Organic sales, Cash conversion, Return on invested capital and Earnings before interest, taxes, depreciation and amortization ("EBITDA") are non-GAAP financial measures. Management uses non-GAAP measures to assess the Company's operating performance by excluding certain disclosed special items that management believes are not representative of the Company's core business. Management believes that excluding these special items enables them to make better period-over-period comparisons and benchmark the Company's operational performance against other companies in its industry more meaningfully. Furthermore, management believes that non-GAAP financial measures provide investors with meaningful information that provides a more complete understanding of Company operating results and enables investors to analyze financial and business trends more thoroughly. Non-GAAP financial measures should not be viewed in isolation, are not a substitute for GAAP measures and have limitations including, but not limited to, their usefulness as comparative measures as other companies may define their non-GAAP measures differently.

Forward-Looking Statements

The Companys 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 managements 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 Companys operating results. The factors include, but are not limited to: general economic, financial and market conditions; the effectiveness of operating initiatives; 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 Companys rationalization plans; possible acquisitions, including the Companys 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; tariff rates in the countries where the Company conducts business; and the possible effects of events beyond our control, such as political unrest, acts of terror, natural disasters and pandemics, including the current coronavirus disease ("COVID-19") outbreak, on the Company or its customers, suppliers and the economy in general. The Company has experienced the negative impacts of COVID-19 on its markets and operations; however, the ultimate duration and severity on the Company's business remains unknown. Although the Companys customers have re-opened and increased operating levels, such customers may be forced to close or limit operations should a resurgence of COVID-19 cases occur. Given this continued level of economic and operational uncertainty over the impacts of COVID-19, the ultimate financial impact cannot be reasonably estimated at this time. For additional discussion, see Item 1A. Risk Factors in the Companys Annual Report on Form10-K for the year ended December 31, 2019 and on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020.

Lincoln Electric Holdings,Inc.Financial Highlights(In thousands, except per share amounts)(Unaudited)

Consolidated Statements of Income

Fav(Unfav)to Three Months Ended December31, PriorYear 2020 %ofSales 2019 %ofSales $ %Net sales $ 693,794 100.0 % $ 736,307 100.0 % $ (42,513 ) (5.8 ) %Cost of goods 464,540 67.0 % 495,373 67.3 % 30,833 6.2 %soldGross profit 229,254 33.0 % 240,934 32.7 % (11,680 ) (4.8 ) %Selling,general & 136,362 19.7 % 149,381 20.3 % 13,019 8.7 %administrativeexpensesRationalizationand asset 9,452 1.4 % 8,851 1.2 % (601 ) (6.8 )impairment %chargesOperating 83,440 12.0 % 82,702 11.2 % 738 0.9 %incomeInterest 5,082 0.7 % 5,794 0.8 % 712 12.3 %expense, netOther income 2,774 0.4 % 3,386 0.5 % (612 ) (18.1 )(expense) %Income before 81,132 11.7 % 80,294 10.9 % 838 1.0 %income taxesIncome taxes 16,062 2.3 % 16,578 2.3 % 516 3.1 %Effective tax 19.8 % 20.6 % 0.8 % rateNet incomeincluding 65,070 9.4 % 63,716 8.7 % 1,354 2.1 %non-controllinginterestsNon-controllinginterests in (8 ) ? ? ? (8 ) (100.0 )subsidiaries? %income (loss)Net income $ 65,078 9.4 % $ 63,716 8.7 % $ 1,362 2.1 % Basic earnings $ 1.09 $ 1.04 $ 0.05 4.8 %per shareDilutedearnings per $ 1.08 $ 1.03 $ 0.05 4.9 %shareWeightedaverage shares 59,567 60,996 (basic)Weightedaverage shares 60,301 61,710 (diluted)

Fav(Unfav)to Twelve Months Ended December 31, PriorYear 2020 %ofSales 2019 %ofSales $ %Net sales $ 2,655,400 100.0 % $ 3,003,272 100.0 % $ (347,872 ) (11.6 ) %Cost of goods 1,784,059 67.2 % 1,995,685 66.5 % 211,626 10.6 %soldGross profit 871,341 32.8 % 1,007,587 33.5 % (136,246 ) (13.5 ) %Selling,general & 543,802 20.5 % 621,489 20.7 % 77,687 12.5 %administrativeexpensesRationalizationand asset 45,468 1.7 % 15,188 0.5 % (30,280 ) (199.4 )impairment %chargesOperating 282,071 10.6 % 370,910 12.4 % (88,839 ) (24.0 )income %Interest 21,973 0.8 % 23,415 0.8 % 1,442 6.2 %expense, netOther income 3,942 0.1 % 20,998 0.7 % (17,056 ) (81.2 )(expense) %Income before 264,040 9.9 % 368,493 12.3 % (104,453 ) (28.3 )income taxes %Income taxes 57,896 2.2 % 75,410 2.5 % 17,514 23.2 %Effective tax 21.9 % 20.5 % (1.5 ) rate %Net incomeincluding 206,144 7.8 % 293,083 9.8 % (86,939 ) (29.7 )non-controlling %interestsNon-controllinginterests in 29 ? (26 ) ? 55 211.5 %subsidiaries?income (loss)Net income $ 206,115 7.8 % $ 293,109 9.8 % $ (86,994 ) (29.7 ) % Basic earnings $ 3.46 $ 4.73 $ (1.27 ) (26.8 )per share %Diluted )earnings per $ 3.42 $ 4.68 $ (1.26 ) (26.9 %shareWeightedaverage shares 59,633 61,960 (basic)Weightedaverage shares 60,248 62,658 (diluted)

Lincoln Electric Holdings,Inc.Financial Highlights(In thousands)(Unaudited)

Balance Sheet Highlights

SelectedConsolidated December31,2020 December31,2019 Balance Sheet DataCash and cash $ 257,279 $ 199,563 equivalentsTotal current 1,112,343 1,075,581 assetsProperty, plant 522,092 529,344 and equipment, netTotal assets 2,314,453 2,371,213 Total current 549,449 563,135 liabilitiesShort-term debt ^ 2,734 34,969 (1)Long-term debt,less current 715,456 712,302 portionTotal equity 790,250 819,077 Operating Working December31,2020 December31,2019 CapitalAccounts $ 373,487 $ 374,649 receivable, netInventories 381,258 393,748 Trade accounts 256,530 273,002 payableOperating working $ 498,215 $ 495,395 capital Average operatingworking capital to 18.0 % 16.8 %Net sales ^(2) Invested Capital December31,2020 December31,2019 Short-term debt ^ $ 2,734 $ 34,969 (1)Long-term debt,less current 715,456 712,302 portionTotal debt 718,190 747,271 Total equity 790,250 819,077 Invested capital $ 1,508,440 $ 1,566,348 Total debt / 47.6 % 47.7 %invested capital

(1) Includes current portion of long-term debt. Average operating working capital to Net sales is defined as operating(2) working capital as of period end divided by annualized rolling three months of Net sales.



Lincoln Electric Holdings,Inc.Financial Highlights(In thousands, except per share amounts)(Unaudited)

Non-GAAP Financial Measures

Three Months Ended Twelve Months Ended December31, December 31, 2020 2019 2020 2019Operating income as $ 83,440 $ 82,702 $ 282,071 $ 370,910 reportedSpecial items (pre-tax):Rationalization andasset impairment 9,452 8,851 45,468 15,188 charges ^(2)Acquisitiontransaction and ? ? ? 1,804 integration costs ^(3)Amortization of stepup in value of ? ? 806 3,008 acquired inventories^(4)Gains on asset ? ? ? (3,045 )disposals ^(5)Adjusted operating $ 92,892 $ 91,553 $ 328,345 $ 387,865 income ^(1)As a percent of total 13.4 % 12.4 % 12.4 % 12.9 %sales Net income as $ 65,078 $ 63,716 $ 206,115 $ 293,109 reportedSpecial items: Rationalization andasset impairment 9,452 8,851 45,468 15,188 charges ^(2)Acquisitiontransaction and ? ? ? 1,804 integration costs ^(3)Pension settlement 1,597 ? 8,119 ? charges ^(6)Amortization of stepup in value of ? ? 806 3,008 acquired inventories^(4)Gains on asset ? ? ? (3,554 )disposals ^(5)Gain on change in ? ? ? (7,601 )control ^(7)Tax effect of Special (1,131 ) (1,567 ) (10,594 ) (7,386 )items ^(8)Adjusted net income ^ 74,996 71,000 249,914 294,568 (1)Non-controllinginterests in (8 ) ? 29 (26 )subsidiaries? income(loss)Interest expense, net 5,082 5,794 21,973 23,415 Income taxes as 16,062 16,578 57,896 75,410 reportedTax effect of Special 1,131 1,567 10,594 7,386 items ^(8)Adjusted EBIT ^(1) $ 97,263 $ 94,939 $ 340,406 $ 400,753 Effective tax rate as 19.8 % 20.6 % 21.9 % 20.5 %reportedNet special item tax (1.1 ) (0.2 ) (0.4 ) 1.4 %impact % % %Adjusted effective 18.7 % 20.4 % 21.5 % 21.9 %tax rate ^(1) Diluted earnings per $ 1.08 $ 1.03 $ 3.42 $ 4.68 share as reportedSpecial items per 0.16 0.12 0.73 0.02 shareAdjusted dilutedearnings per share ^ $ 1.24 $ 1.15 $ 4.15 $ 4.70 (1) Weighted average 60,301 61,710 60,248 62,658 shares (diluted)

Adjusted operating income, Adjusted net income, Adjusted EBIT, Adjusted(1) effective tax rate and Adjusted diluted earnings per share are non-GAAP financial measures. Refer to Non-GAAP Information section.(2) Primarily related to severance, asset impairments of long-lived assets and gains or losses on the disposal of assets.(3) Related to the acquisition of Air Liquide Welding and are included in Selling, general & administrative expenses.(4) Related to an acquisition and are included in Cost of goods sold.(5) Primarily included in Cost of goods sold.(6) Related to lump sum pension payments and are included in Other income (expense).(7) Related to the acquisition of Askaynak and is included in Other income (expense). Includes the net tax impact of Special items recorded during the respective(8) periods, including tax benefits of $4,852 for the settlement of a tax item as well as tax deductions associated with an investment in a subsidiary in the twelve months ended December 31, 2019. 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.



Lincoln Electric Holdings,Inc.Financial Highlights(In thousands, except per share amounts)(Unaudited)

Non-GAAP Financial Measures

TwelveMonthsEndedDecember31, Return on Invested Capital 2020 2019 Net income as reported $ 206,115 $ 293,109 Rationalization and asset 45,468 15,188 impairment chargesAcquisition transaction and ? 1,804 integration costsPension settlement charges 8,119 ? Amortization of step up in 806 3,008 value of acquired inventoriesGains on asset disposals ? (3,554 ) Gain on change in control ? (7,601 ) Tax effect of Special items ^ (10,594 ) (7,386 ) (2)Adjusted net income ^(1) $ 249,914 $ 294,568 Plus: Interest expense, netof tax of $6,026 and $6,477 17,933 19,465 in 2020 and 2019,respectivelyLess: Interest income, net oftax of $500 and $631 in 2020 1,486 1,896 and 2019, respectivelyAdjusted net income before $ 266,361 $ 312,137 tax-effected interest Invested Capital December31,2020 December31,2019 Short-term debt $ 2,734 $ 34,969 Long-term debt, less current 715,456 712,302 portionTotal debt 718,190 747,271 Total equity 790,250 819,077 Invested capital $ 1,508,440 $ 1,566,348 Return on invested capital ^ 17.7 % 19.9 % (1) TwelveMonthsEndedDecember31, Total Debt / EBITDA 2020 2019 Net income as reported $ 206,115 $ 293,109 Income taxes 57,896 75,410 Interest expense, net 21,973 23,415 Depreciation and amortization 80,492 81,487 EBITDA ^(1) $ 366,476 $ 473,421 December31,2020 December31,2019 Total debt $ 718,190 $ 747,271 Total debt / EBITDA 1.96 1.58

(1) Adjusted net income, Return on invested capital and EBITDA are non-GAAP financial measures. Refer to Non-GAAP Information section. Includes the net tax impact of Special items recorded during the respective(2) periods, including tax benefits of $4,852 for the settlement of a tax item as well as tax deductions associated with an investment in a subsidiary in the twelve months ended December 31, 2019. 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.



Lincoln Electric Holdings,Inc.Financial Highlights(In thousands, except per share amounts)(Unaudited)

Condensed Consolidated Statements of Cash Flows

Three Months Ended December31, 2020 2019OPERATING ACTIVITIES: Net income $ 65,078 $ 63,716 Non-controlling interests in subsidiaries? (8 ) ? income (loss)Net income including non-controlling interests 65,070 63,716 Adjustments to reconcile Net income includingnon-controlling interests to Net cash provided by operating activities:Rationalization and asset impairment charges (92 ) 2,431 (gains)Depreciation and amortization 19,926 21,087 Equity earnings in affiliates, net (85 ) (161 )Other non-cash items, net 5,214 12,203 Changes in operating assets and liabilities, net of effects from acquisitions:Decrease in accounts receivable 10,433 26,291 Decrease in inventories 26,181 24,453 Increase in trade accounts payable 24,414 25,863 Net change in other current assets and (9,621 ) (51,294 )liabilitiesNet change in other long-term assets and (5,639 ) (2,070 )liabilitiesNET CASH PROVIDED BY OPERATING ACTIVITIES 135,801 122,519 INVESTING ACTIVITIES: Capital expenditures (22,085 ) (16,064 )Acquisition of businesses, net of cash acquired ? 2,018 Proceeds from sale of property, plant and 710 18 equipmentOther investing activities 2,321 ? NET CASH USED BY INVESTING ACTIVITIES (19,054 ) (14,028 ) FINANCING ACTIVITIES: Net change in borrowings 1,375 21,889 Proceeds from exercise of stock options 9,231 8,137 Purchase of shares for treasury (257 ) (70,751 )Cash dividends paid to shareholders (29,173 ) (28,758 )NET CASH USED BY FINANCING ACTIVITIES (18,824 ) (69,483 ) Effect of exchange rate changes on Cash and cash 6,877 3,943 equivalentsINCREASE IN CASH AND CASH EQUIVALENTS 104,800 42,951 Cash and cash equivalents at beginning of period 152,479 156,612 Cash and cash equivalents at end of period $ 257,279 $ 199,563 Cash dividends paid per share $ 0.49 $ 0.47

Lincoln Electric Holdings,Inc.Financial Highlights(In thousands, except per share amounts)(Unaudited)

Condensed Consolidated Statements of Cash Flows

Year Ended December31, 2020 2019OPERATING ACTIVITIES: Net income $ 206,115 $ 293,109 Non-controlling interests in subsidiaries? 29 (26 )income (loss)Net income including non-controlling interests 206,144 293,083 Adjustments to reconcile Net income includingnon-controlling interests to Net cash provided by operating activities:Rationalization and asset impairment net 21,835 3,500 chargesDepreciation and amortization 80,492 81,487 Equity earnings in affiliates, net (408 ) (1,427 )Gain on change in control ? (7,601 )Other non-cash items, net 2,444 21,488 Changes in operating assets and liabilities, net of effects from acquisitions:Decrease in accounts receivable 3,582 50,394 Decrease (increase) in inventories 22,751 (12,023 )Decrease in trade accounts payable (17,919 ) (8,339 )Net change in other current assets and 37,021 (16,954 )liabilitiesNet change in other long-term assets and (4,580 ) (423 )liabilitiesNET CASH PROVIDED BY OPERATING ACTIVITIES 351,362 403,185 INVESTING ACTIVITIES: Capital expenditures (59,201 ) (69,615 )Acquisition of businesses, net of cash ? (134,717 )acquiredProceeds from sale of property, plant and 7,667 9,509 equipmentOther investing activities 2,321 2,000 NET CASH USED BY INVESTING ACTIVITIES (49,213 ) (192,823 ) FINANCING ACTIVITIES: Net change in borrowings (31,760 ) 24,322 Proceeds from exercise of stock options 17,192 14,347 Purchase of shares for treasury (113,455 ) (292,693 )Cash dividends paid to shareholders (118,118 ) (117,920 )NET CASH USED BY FINANCING ACTIVITIES (246,141 ) (371,944 ) Effect of exchange rate changes on Cash and 1,708 2,296 cash equivalentsINCREASE (DECREASE) IN CASH AND CASH 57,716 (159,286 )EQUIVALENTSCash and cash equivalents at beginning of 199,563 358,849 periodCash and cash equivalents at end of period $ 257,279 $ 199,563 Cash dividends paid per share $ 1.96 $ 1.88

Lincoln Electric Holdings, Inc.Segment Highlights (1)(In thousands)(Unaudited)

Americas International TheHarris Corporate/ Welding Welding ProductsGroup Eliminations Consolidated Three monthsended December31,2020Net sales $ 386,571 $ 214,782 $ 92,441 $ ? $ 693,794 Inter-segment 27,734 4,827 1,658 (34,219 ) ? salesTotal $ 414,305 $ 219,609 $ 94,099 $ (34,219 ) $ 693,794 Net income $ 65,078 As a percent of 9.4 %total sales EBIT^ (1) $ 68,456 $ 4,949 $ 13,362 $ (553 ) $ 86,214 As a percent of 16.5 % 2.3 % 14.2 % 12.4 %total salesSpecial itemscharges (gains) ^ 748 10,301 ? ? 11,049 (3)Adjusted EBIT ^ $ 69,204 $ 15,250 $ 13,362 $ (553 ) $ 97,263 (2)As a percent of 16.7 % 6.9 % 14.2 % 14.0 %total sales Three monthsended December31,2019Net sales $ 437,899 $ 218,606 $ 79,802 $ ? $ 736,307 Inter-segment 28,042 4,853 1,650 (34,545 ) ? salesTotal $ 465,941 $ 223,459 $ 81,452 $ (34,545 ) $ 736,307 Net income $ 63,716 As a percent of 8.7 %total sales EBIT ^(1) $ 75,006 $ 4,501 $ 8,886 $ (2,305 ) $ 86,088 As a percent of 16.1 % 2.0 % 10.9 % 11.7 %total salesSpecial itemscharges (gains) ^ ? 7,081 1,770 ? 8,851 (4)Adjusted EBIT ^ $ 75,006 $ 11,582 $ 10,656 $ (2,305 ) $ 94,939 (2)As a percent of 16.1 % 5.2 % 13.1 % 12.9 %total sales

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

The primary profit measure used by management to assess segment performance(2) is Adjusted EBIT. EBIT for each operating segment is adjusted for special items to derive Adjusted EBIT. Special items in 2020 reflect Rationalization and asset impairment gains of(3) $849 and charges of $10,301 in Americas Welding and International Welding, respectively and pension settlement charges of $1,597 in Americas Welding.(4) Special items in 2019 reflect Rationalization and asset impairment charges of $7,081 in International Welding and $1,770 in The Harris Products Group.

Lincoln Electric Holdings, Inc.Segment Highlights (1)(In thousands)(Unaudited)

Americas International TheHarris Corporate/ Welding Welding ProductsGroup Eliminations Consolidated Year ended December31,2020Net sales $ 1,509,870 $ 786,809 $ 358,721 $ ? $ 2,655,400 Inter-segment 109,378 18,494 7,034 (134,906 ) ? salesTotal $ 1,619,248 $ 805,303 $ 365,755 $ (134,906 ) $ 2,655,400 Net income $ 206,115 As a percent of 7.8 %total sales EBIT ^(1) $ 210,739 $ 25,575 $ 55,154 $ (5,455 ) $ 286,013 As a percent of 13.0 % 3.2 % 15.1 % 10.8 %total salesSpecial itemscharges (gains) ^ 34,989 19,404 ? ? 54,393 (3)Adjusted EBIT ^ $ 245,728 $ 44,979 $ 55,154 $ (5,455 ) $ 340,406 (2)As a percent of 15.2 % 5.6 % 15.1 % 12.8 %total sales Year ended December31,2019Net sales $ 1,815,746 $ 854,376 $ 333,150 $ ? $ 3,003,272 Inter-segment 123,342 17,691 7,487 (148,520 ) ? salesTotal $ 1,939,088 $ 872,067 $ 340,637 $ (148,520 ) $ 3,003,272 Net income $ 293,109 As a percent of 9.8 %total sales EBIT ^(1) $ 312,604 $ 48,125 $ 43,931 $ (12,752 ) $ 391,908 As a percent of 16.1 % 5.5 % 12.9 % 13.0 %total salesSpecial itemscharges (gains) ^ 3,115 2,156 1,770 1,804 8,845 (4)Adjusted EBIT ^ $ 315,719 $ 50,281 $ 45,701 $ (10,948 ) $ 400,753 (2)As a percent of 16.3 % 5.8 % 13.4 % 13.3 %total sales

(1) EBIT is defined as Operating income plus Other income (expense). The primary profit measure used by management to assess segment performance(2) is Adjusted EBIT. EBIT for each operating segment is adjusted for special items to derive Adjusted EBIT. Special items in 2020 reflect Rationalization and asset impairment net charges of $26,870 and $18,598 in Americas Welding and International(3) Welding, respectively, amortization of step up in value of acquired inventories of $806 in International Welding related to an acquisition, and pension settlement charges of $8,119 in Americas Welding. Special items in 2019 reflect Rationalization and asset impairment charges of $1,716 in Americas Welding, $11,702 in International Welding and $1,770 in The Harris Products Group, amortization of step up in value of acquired(4) inventories of $1,399 in Americas Welding and $1,609 in International Welding, gains on disposals of assets of $3,554 in International Welding, a gain on change in control of $7,601 related to the acquisition of Askaynak and acquisition transaction and integration costs of $1,804 in Corporate/ Eliminations related to the acquisition of Air Liquide Welding

Lincoln Electric Holdings,Inc.Change in Net Sales by Segment(In thousands)(Unaudited)

Three Months Ended December 31st Change in Net Sales by Segment

ChangeinNetSalesdueto: NetSales Foreign NetSales 2019 Volume Acquisitions Price Exchange 2020Operating SegmentsAmericas $ 437,899 $ (54,412 ) $ ? $ 5,164 $ (2,080 ) $ 386,571 WeldingInternational 218,606 (7,341 ) ? 1,101 2,416 214,782 WeldingThe HarrisProducts 79,802 5,872 ? 8,498 (1,731 ) 92,441 GroupConsolidated $ 736,307 $ (55,881 ) $ ? $ 14,763 $ (1,395 ) $ 693,794 % Change Americas (12.4 ) ? 1.2 % (0.5 ) (11.7 )Welding % % %International (3.4 ) ? 0.5 % 1.1 % (1.7 )Welding % %The Harris )Products 7.4 % ? 10.6 % (2.2 % 15.8 %GroupConsolidated (7.6 ) ? 2.0 % (0.2 ) (5.8 ) % % %

Twelve Months Ended December 31st Change in Net Sales by Segment

ChangeinNetSalesdueto: NetSales Foreign NetSales 2019 Volume Acquisitions Price Exchange 2020 Operating SegmentsAmericas $ 1,815,746 $ (300,167 ) $ 6,190 $ (2,315 ) $ (9,584 ) $ 1,509,870 WeldingInternational 854,376 (93,264 ) 33,521 (1,800 ) (6,024 ) 786,809 WeldingThe HarrisProducts 333,150 12,242 ? 18,571 (5,242 ) 358,721 GroupConsolidated $ 3,003,272 $ (381,189 ) $ 39,711 $ 14,456 $ (20,850 ) $ 2,655,400 % Change Americas (16.5 ) 0.3 % (0.1 ) (0.5 ) (16.8 )% Welding % % %International (10.9 ) 3.9 % (0.2 ) (0.7 ) (7.9 )% Welding % % %The Harris )Products 3.7 % ? 5.6 % (1.6 % 7.7 % GroupConsolidated (12.7 ) 1.3 % 0.5 % (0.7 ) (11.6 )% % %



Contact

Amanda ButlerVice President, Investor Relations & CommunicationsTel: 216.383.2534Email: Amanda_Butler@lincolnelectric.com