GlobeNewswire Inc | Oct 28, 2021 07:30AM EDT

October 28, 2021

Third Quarter 2021 Highlights * Net sales increase 20.6% to record $806.5 million on 18.3% higher organic sales * Operating income margin of 14.3%; Adjusted operating income margin of 15.2% * EPS decreases 45.4% to $0.53; Adjusted EPS increases 41.8% to record $1.56 * Cash flow from operations increase 23% to $109.9 million * ROIC increases 440 basis points to 22.8% * Pension plan termination resulted in pre-tax non-cash charges of $73.6 million

CLEVELAND, Oct. 28, 2021 (GLOBE NEWSWIRE) -- Lincoln Electric Holdings,Inc. (the Company) (Nasdaq: LECO) today reported third quarter 2021 net income of $31.8 million, or diluted earnings per share (EPS) of $0.53, which includes special item after-tax charges of $62.0 million, or $1.03 EPS. Special item charges primarily relate to the termination of a pension plan. This compares with prior year period net income of $58.5 million, or $0.97 EPS, which included special item after-tax charges of $7.5 million, or $0.13 EPS. Excluding these items, third quarter 2021 adjusted net income was $93.8 million, or $1.56 Adjusted EPS. This compares with Adjusted net income of $66.0 million, or $1.10 Adjusted EPS in the prior year period.

Third quarter 2021 sales increased 20.6% to $806.5 million from an 18.3% increase in organic sales, 2.0% benefit from acquisitions and 0.3% favorable foreign exchange. Operating income for the third quarter 2021 was $115.6 million, or 14.3% of sales, including special item charges of $7.2 million. This compares with operating income of $77.8 million, or 11.6% of sales, in the prior year period. Excluding special items, adjusted operating income was $122.7 million, or 15.2% of sales, as compared with $84.1 million, or 12.6% of sales, in the prior year period.

I am pleased to report that strong execution of our 2025 Higher Standard Strategy initiatives delivered record third quarter adjusted earnings performance, said Christopher L. Mapes, Chairman, President and Chief Executive Officer. We are serving strong demand and are effectively managing inflationary headwinds and supply chain constraints, which generated solid cash flows, cash conversion and superior returns.

Pension Plan Termination

During the third quarter 2021, the Company recognized $73.6 million of non-cash pension settlement charges associated with lump sum distributions related to the termination of a pension plan. In October 2021, the Company entered into an agreement to purchase a group annuity contract with an insurance company to settle the remaining pension obligations of this plan. The Company estimates fourth quarter 2021 pre-tax settlement charges of approximately $35 - $45 million related to the annuity purchase. The Company anticipates using any surplus assets to fund future contributions into another retirement plan.

Nine Months 2021 Summary

Net income for the nine months ended September 30, 2021 was $202.0 million, or $3.36 EPS. This compares with $141.0 million, or $2.34 EPS, in the comparable 2020 period. Reported EPS includes special item after-tax charges of $75.1 million or $1.25 EPS, as compared with special item after-tax net charges of $33.9 million, or $0.57 EPS in the prior year period. Excluding these items, adjusted net income for the nine months ended September 30, 2021 increased 58.4% to $277.1 million, or $4.61 EPS, compared with $174.9 million, or $2.91 EPS, in the comparable 2020 period.

Sales increased 21.8% to $2.4 billion in the nine months ended September 30, 2021 from a 19.4% increase in organic sales, 1.6% favorable foreign exchange and a 0.9% benefit from acquisitions. Operating income for the nine months ended September 30, 2021 was $341.3 million, or 14.3% of sales. This compares with operating income of $198.6 million, or 10.1% of sales, in the comparable 2020 period. Excluding special items, adjusted operating income was $357.1 million, or 14.9% of sales, as compared with $235.5 million, or 12.0% of sales, in the comparable 2020 period.

Dividend

The Company's Board of Directors declared a 9.8% increase in the quarterly cash dividend, from $0.51 per share to $0.56 per share, or $2.24 per share on an annual basis. The declared quarterly cash dividend of $0.56 per share is payable January 14, 2022 to shareholders of record as of December 31, 2021.

Webcast Information

A conference call to discuss third quarter 2021 financial results will be webcast live today, October 28, 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 8735626. Telephone participants are asked to dial in 10 - 15 minutes prior to the start of the conference call.

Financial results for the third quarter 2021 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") pandemic, on the Company or its customers, suppliers and the economy in general. For additional discussion, see Item 1A. Risk Factors in the Companys Annual Report on Form10-K for the year ended December 31, 2020.

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

Consolidated Statements of Income

Fav(Unfav)to Three Months Ended September30, PriorYear 2021 %ofSales 2020 %ofSales $ % Net sales $ 806,454 100.0 % $ 668,888 100.0 % $ 137,566 20.6 %Cost of goods 538,282 66.7 % 453,501 67.8 % (84,781 ) (18.7 ) %soldGross profit 268,172 33.3 % 215,387 32.2 % 52,785 24.5 %Selling,general & 149,118 18.5 % 131,337 19.6 % (17,781 ) (13.5 ) %administrativeexpensesRationalizationand asset 3,484 0.4 % 6,257 0.9 % 2,773 44.3 %impairmentchargesOperating 115,570 14.3 % 77,793 11.6 % 37,777 48.6 %incomeInterest 5,714 0.7 % 5,552 0.8 % (162 ) (2.9 ) %expense, netOther income (71,441 ) (8.9 ) % 1,062 0.2 % (72,503 ) (6,827.0 ) %(expense)Income before 38,415 4.8 % 73,303 11.0 % (34,888 ) (47.6 ) %income taxesIncome taxes 6,658 0.8 % 14,797 2.2 % 8,139 55.0 %Effective tax 17.3 % 20.2 % 2.9 % rateNet incomeincluding 31,757 3.9 % 58,506 8.7 % (26,749 ) (45.7 ) %non-controllinginterestsNon-controllinginterests in ? ? 27 ? (27 ) (100.0 ) %subsidiaries?income (loss)Net income $ 31,757 3.9 % $ 58,479 8.7 % $ (26,722 ) (45.7 ) % Basic earnings $ 0.54 $ 0.98 $ (0.44 ) (44.9 ) %per shareDilutedearnings per $ 0.53 $ 0.97 $ (0.44 ) (45.4 ) %shareWeightedaverage shares 59,289 59,426 (basic)Weightedaverage shares 60,055 60,018 (diluted)

Fav(Unfav)to Nine Months Ended September30, PriorYear 2021 %ofSales 2020 %ofSales $ % Net sales $ 2,389,929 100.0 % $ 1,961,606 100.0 % $ 428,323 21.8 %Cost of goods 1,593,981 66.7 % 1,319,519 67.3 % (274,462 ) (20.8 ) %soldGross profit 795,948 33.3 % 642,087 32.7 % 153,861 24.0 %Selling,general & 446,351 18.7 % 407,440 20.8 % (38,911 ) (9.6 ) %administrativeexpensesRationalizationand asset 8,277 0.3 % 36,016 1.8 % 27,739 77.0 %impairmentchargesOperating 341,320 14.3 % 198,631 10.1 % 142,689 71.8 %incomeInterest 16,736 0.7 % 16,891 0.9 % 155 0.9 %expense, netOther income (71,155 ) (3.0 ) % 1,168 0.1 % (72,323 ) (6,192.0 ) %(expense)Income before 253,429 10.6 % 182,908 9.3 % 70,521 38.6 %income taxesIncome taxes 51,259 2.1 % 41,834 2.1 % (9,425 ) (22.5 ) %Effective tax 20.2 % 22.9 % 2.7 % rateNet incomeincluding 202,170 8.5 % 141,074 7.2 % 61,096 43.3 %non-controllinginterestsNon-controllinginterests in 131 ? 37 ? 94 254.1 %subsidiaries?income (loss)Net income $ 202,039 8.5 % $ 141,037 7.2 % $ 61,002 43.3 % Basic earnings $ 3.40 $ 2.36 $ 1.04 44.1 %per shareDilutedearnings per $ 3.36 $ 2.34 $ 1.02 43.6 %shareWeightedaverage shares 59,465 59,655 (basic)Weightedaverage shares 60,168 60,202 (diluted)

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

Balance Sheet Highlights

Selected Consolidated Balance September30, December 31, Sheet Data 2021 2020Cash and cash equivalents $ 160,559 $ 257,279 Accounts receivable, net 443,054 373,487 Inventories 524,433 381,258 Total current assets 1,235,958 1,112,343 Property, plant and equipment, 520,081 522,092 netTotal assets 2,568,797 2,314,453 Trade accounts payable 309,202 256,530 Total current liabilities 745,420 549,449 Short-term debt ^(1) 41,404 2,734 Long-term debt, less current 717,787 715,456 portionTotal equity 857,893 790,250 Operating Working Capital September30, December 31, 2021 2020Average operating working 18.6 % 17.4 %capital to Net sales ^(2) Invested Capital September30, December 31, 2021 2020Short-term debt ^(1) $ 41,404 $ 2,734 Long-term debt, less current 717,787 715,456 portionTotal debt 759,191 718,190 Total equity 857,893 790,250 Invested capital $ 1,617,084 $ 1,508,440 Total debt / invested capital 46.9 % 47.6 %

-- Includes current portion of long-term debt. -- Average operating working capital to Net sales is defined as the sum of Accounts receivable, Inventories and contract assets less Trade accounts payable and contract liabilities as of period end divided by annualized rolling three months of Net sales.

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

Non-GAAP Financial Measures

Three Months Ended Nine Months Ended September30, September30, 2021 2020 2021 2020 Operating income as $ 115,570 $ 77,793 $ 341,320 $ 198,631 reportedSpecial items (pre-tax):Rationalization andasset impairment 3,484 6,257 8,277 36,016 charges ^(2)Acquisitiontransaction costs ^ ? ? 1,923 ? (3)Amortization ofstep up in value of 3,690 ? 5,531 806 acquiredinventories ^(4)Adjusted operating $ 122,744 $ 84,050 $ 357,051 $ 235,453 income ^(1)As a percent of 15.2 % 12.6 % 14.9 % 12.0 %total sales Net income as $ 31,757 $ 58,479 $ 202,039 $ 141,037 reportedSpecial items: Rationalization andasset impairment 3,484 6,257 8,277 36,016 charges ^(2)Acquisitiontransaction costs ^ ? ? 1,923 ? (3)Pension settlement 73,562 3,188 80,098 6,522 charges ^(5)Amortization ofstep up in value of 3,690 ? 5,531 806 acquiredinventories ^(4)Tax effect of (18,743 ) (1,911 ) (20,737 ) (9,463 ) Special items ^(6)Adjusted net income 93,750 66,013 277,131 174,918 ^(1)Non-controllinginterests in ? 27 131 37 subsidiaries?income (loss)Interest expense, 5,714 5,552 16,736 16,891 netIncome taxes as 6,658 14,797 51,259 41,834 reportedTax effect of 18,743 1,911 20,737 9,463 Special items ^(6)Adjusted EBIT ^(1) $ 124,865 $ 88,300 $ 365,994 $ 243,143 Effective tax rate 17.3 % 20.2 % 20.2 % 22.9 %as reportedNet special item 4.0 % ? % 0.4 % (0.2 ) %tax impactAdjusted effective 21.3 % 20.2 % 20.6 % 22.7 %tax rate ^(1) Diluted earningsper share as $ 0.53 $ 0.97 $ 3.36 $ 2.34 reportedSpecial items per 1.03 0.13 1.25 0.57 shareAdjusted dilutedearnings per share $ 1.56 $ 1.10 $ 4.61 $ 2.91 ^(1) Weighted average 60,055 60,018 60,168 60,202 shares (diluted)

-- Adjusted operating income, Adjusted net income, Adjusted EBIT, Adjusted effective tax rate and Adjusted diluted earnings per share are non-GAAP financial measures. Refer to Non-GAAP Information section. -- Primarily related to severance, gains or losses on the disposal of assets and asset impairments of long-lived assets. -- Related to acquisitions and are included in Selling, general & administrative expenses. -- Related to acquisitions and are included in Cost of goods sold. -- Settlement charges related to lump sum pension payments associated with the termination of a pension plan and are included in Other income (expense). -- Includes the net tax impact of Special items recorded during the respective periods.The tax effect of Special items impacting pre-tax income was calculated as the pre-tax amount multiplied by the applicable tax rate. The applicable tax rates reflect the taxable jurisdiction and nature of each Special item.

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

Non-GAAP Financial Measures

TwelveMonthsEndedSeptember30, Return on Invested Capital 2021 2020 Net income as reported $ 267,117 $ 204,753 Rationalization and asset 17,729 44,867 impairment chargesAcquisition transaction costs 1,923 ? Pension settlement charges 81,695 6,522 Amortization of step up in 5,531 806 value of acquired inventoriesTax effect of Special items ^ (21,868 ) (11,030 ) (2)Adjusted net income ^(1) $ 352,127 $ 245,918 Plus: Interest expense, netof tax of $5,893 and $6,177 17,520 18,564 in 2021 and 2020,respectivelyLess: Interest income, net oftax of $402 and $513 in 2021 1,193 1,543 and 2020, respectivelyAdjusted net income before $ 368,454 $ 262,939 tax-effected interest Invested Capital September30,2021 September30,2020 Short-term debt $ 41,404 $ 1,147 Long-term debt, less current 717,787 715,687 portionTotal debt 759,191 716,834 Total equity 857,893 710,744 Invested capital $ 1,617,084 $ 1,427,578 Return on invested capital ^ 22.8 % 18.4 %(1)

TwelveMonthsEndedSeptember30,Total Debt / 2021 2020EBITDANet income $ 267,117 $ 204,753 as reportedIncome taxes 67,321 58,412 Interest 21,818 22,685 expense, netDepreciationand 80,484 81,653 amortizationEBITDA ^(1) $ 436,740 $ 367,503 September30,2021 September30,2020 Total debt $ 759,191 $ 716,834 Total debt / 1.74 1.95 EBITDA

-- 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 periods.The tax effect of Special items impacting pre-tax income was calculated as the pre-tax amount multiplied by the applicable tax rate. The applicable tax rates reflect the taxable jurisdiction and nature of each Special item.

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

Condensed Consolidated Statements of Cash Flows

Three Months Ended September30, 2021 2020 OPERATING ACTIVITIES: Net income $ 31,757 $ 58,479 Non-controlling interests in subsidiaries? income ? 27 (loss)Net income including non-controlling interests 31,757 58,506 Adjustments to reconcile Net income includingnon-controlling interests to Net cash provided by operating activities:Rationalization and asset impairment net charges 212 22 Depreciation and amortization 22,050 19,488 Equity earnings in affiliates, net (108 ) (80 ) Pension settlement charges 73,562 3,188 Other non-cash items, net 389 (670 ) Changes in operating assets and liabilities, net of effects from acquisitions:Decrease (increase) in accounts receivable 16,359 (30,517 ) (Increase) decrease in inventories (45,670 ) 26,948 Decrease in trade accounts payable (8,294 ) (2,218 ) Net change in other current assets and 31,838 14,232 liabilitiesNet change in other long-term assets and (12,204 ) 649 liabilitiesNET CASH PROVIDED BY OPERATING ACTIVITIES 109,891 89,548 INVESTING ACTIVITIES: Capital expenditures (18,672 ) (12,105 ) Acquisition of businesses, net of cash acquired (74,882 ) ? Proceeds from sale of property, plant and 1,290 739 equipmentNET CASH USED BY INVESTING ACTIVITIES (92,264 ) (11,366 ) FINANCING ACTIVITIES: Net change in borrowings 31,132 (48,230 ) Proceeds from exercise of stock options 2,249 5,959 Purchase of shares for treasury (50,160 ) (223 ) Cash dividends paid to shareholders (30,338 ) (29,131 ) NET CASH USED BY FINANCING ACTIVITIES (47,117 ) (71,625 ) Effect of exchange rate changes on Cash and cash (835 ) 2,867 equivalents(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (30,325 ) 9,424 Cash and cash equivalents at beginning of period 190,884 143,055 Cash and cash equivalents at end of period $ 160,559 $ 152,479 Cash dividends paid per share $ 0.51 $ 0.49

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

Nine Months Ended September30, 2021 2020 OPERATING ACTIVITIES: Net income $ 202,039 $ 141,037 Non-controlling interests in subsidiaries? 131 37 income (loss)Net income including non-controlling 202,170 141,074 interestsAdjustments to reconcile Net incomeincluding non-controlling interests to Net cash provided by operating activities:Rationalization and asset impairment net (1,162 ) 21,927 (gains) chargesDepreciation and amortization 60,558 60,566 Equity earnings in affiliates, net (399 ) (323 ) Pension settlement charges 80,098 6,522 Other non-cash items, net (10,967 ) (9,292 ) Changes in operating assets and liabilities, net of effects from acquisitions:Increase in accounts receivable (71,212 ) (6,851 ) Increase in inventories (128,856 ) (3,430 ) Increase (decrease) in trade accounts 54,981 (42,333 ) payableNet change in other current assets and 78,959 46,642 liabilitiesNet change in other long-term assets and (9,045 ) 1,059 liabilitiesNET CASH PROVIDED BY OPERATING ACTIVITIES 255,125 215,561 INVESTING ACTIVITIES: Capital expenditures (46,440 ) (37,116 ) Acquisition of businesses, net of cash (158,605 ) ? acquiredProceeds from sale of property, plant and 3,847 6,957 equipmentOther investing activities 6,500 ? NET CASH USED BY INVESTING ACTIVITIES (194,698 ) (30,159 ) FINANCING ACTIVITIES: Net change in borrowings 32,295 (33,135 ) Proceeds from exercise of stock options 7,921 7,961 Purchase of shares for treasury (103,848 ) (113,198 ) Cash dividends paid to shareholders (91,717 ) (88,945 ) Other financing activities (763 ) ? NET CASH USED BY FINANCING ACTIVITIES (156,112 ) (227,317 ) Effect of exchange rate changes on Cash and (1,035 ) (5,169 ) cash equivalentsDECREASE IN CASH AND CASH EQUIVALENTS (96,720 ) (47,084 ) Cash and cash equivalents at beginning of 257,279 199,563 periodCash and cash equivalents at end of period $ 160,559 $ 152,479 Cash dividends paid per share $ 1.53 $ 1.47

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

Americas International TheHarris Corporate/ Welding Welding ProductsGroup Eliminations Consolidated Three months ended September30,2021Net sales $ 461,508 $ 227,165 $ 117,781 $ ? $ 806,454 Inter-segment 37,480 7,078 1,945 (46,503 ) ? salesTotal sales $ 498,988 $ 234,243 $ 119,726 $ (46,503 ) $ 806,454 Net income $ 31,757 As a percent of 3.9 % total sales EBIT^ (1) $ 10,983 $ 22,417 $ 15,433 $ (4,704 ) $ 44,129 As a percent of 2.2 % 9.6 % 12.9 % 5.5 % total salesSpecial itemscharges (gains) ^ 73,574 6,615 547 ? 80,736 (3)Adjusted EBIT ^(2) $ 84,557 $ 29,032 $ 15,980 $ (4,704 ) $ 124,865 As a percent of 16.9 % 12.4 % 13.3 % 15.5 % total sales Three months ended September30,2020Net sales $ 371,535 $ 196,937 $ 100,416 $ ? $ 668,888 Inter-segment 29,368 4,898 1,898 (36,164 ) ? salesTotal sales $ 400,903 $ 201,835 $ 102,314 $ (36,164 ) $ 668,888 Net income $ 58,479 As a percent of 8.7 % total sales EBIT ^(1) $ 52,076 $ 11,031 $ 17,587 $ (1,839 ) $ 78,855 As a percent of 13.0 % 5.5 % 17.2 % 11.8 % total salesSpecial itemscharges (gains) ^ 7,044 2,401 ? ? 9,445 (4)Adjusted EBIT ^(2) $ 59,120 $ 13,432 $ 17,587 $ (1,839 ) $ 88,300 As a percent of 14.7 % 6.7 % 17.2 % 13.2 % total sales

-- EBIT is defined as Operating income plus Other income (expense). -- The primary profit measure used by management to assess segment performance is Adjusted EBIT. EBIT for each operating segment is adjusted for special items to derive Adjusted EBIT. -- Special items in 2021 reflect Rationalization and asset impairment charges of $3,484 primarily in International Welding, pension settlement charges of $73,562 in Americas Welding and amortization of the step up in value of acquired inventories of $3,143 and $547 in International Welding and The Harris Products Group, respectively, related to acquisitions. -- Special items in 2020 reflect Rationalization and asset impairment charges of $3,856 and $2,401 in Americas Welding and International Welding, respectively, and pension settlement charges of $3,188 in Americas Welding.

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

Americas International TheHarris Corporate/ Welding Welding ProductsGroup Eliminations Consolidated Nine months ended September30,2021Net sales $ 1,344,218 $ 702,596 $ 343,115 $ ? $ 2,389,929 Inter-segment 109,993 18,260 6,376 (134,629 ) ? salesTotal sales $ 1,454,211 $ 720,856 $ 349,491 $ (134,629 ) $ 2,389,929 Net income $ 202,039 As a percent of 8.5 % total sales EBIT ^(1) $ 165,644 $ 64,150 $ 52,342 $ (11,971 ) $ 270,165 As a percent of 11.4 % 8.9 % 15.0 % 11.3 % total salesSpecial itemscharges (gains) ^ 79,664 13,695 547 1,923 95,829 (3)Adjusted EBIT ^(2) $ 245,308 $ 77,845 $ 52,889 $ (10,048 ) $ 365,994 As a percent of 16.9 % 10.8 % 15.1 % 15.3 % total sales Nine months ended September30,2020Net sales $ 1,123,299 $ 572,027 $ 266,280 $ ? $ 1,961,606 Inter-segment 81,644 13,667 5,376 (100,687 ) ? salesTotal sales $ 1,204,943 $ 585,694 $ 271,656 $ (100,687 ) $ 1,961,606 Net income $ 141,037 As a percent of 7.2 % total sales EBIT ^(1) $ 142,283 $ 20,626 $ 41,792 $ (4,902 ) $ 199,799 As a percent of 11.8 % 3.5 % 15.4 % 10.2 % total salesSpecial itemscharges (gains) ^ 34,241 9,103 ? ? 43,344 (4)Adjusted EBIT ^(2) $ 176,524 $ 29,729 $ 41,792 $ (4,902 ) $ 243,143 As a percent of 14.6 % 5.1 % 15.4 % 12.4 % total sales

-- EBIT is defined as Operating income plus Other income (expense). -- The primary profit measure used by management to assess segment performance is Adjusted EBIT. EBIT for each operating segment is adjusted for special items to derive Adjusted EBIT. -- Special items in 2021 reflect pension settlement charges of $79,652 and $446 in Americas Welding and International Welding, respectively, Rationalization and asset impairment charges of $8,277 primarily in International Welding, amortization of the step up in value of acquired inventories of $4,984 and $547 in International Welding and The Harris Products Group, respectively, and acquisition transaction costs of $1,923 in Corporate/Eliminations related to acquisitions. -- Special items in 2020 reflect Rationalization and asset impairment charges of $27,719 and $8,297 in Americas Welding and International Welding, respectively, amortization of the step up in value of acquired inventories of $806 in International Welding related to an acquisition, and pension settlement charges of $6,522 in Americas Welding.

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

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

ChangeinNetSalesdueto: NetSales Foreign NetSales 2020 Volume Acquisitions Price Exchange 2021 Operating SegmentsAmericas $ 371,535 $ 42,341 $ ? $ 43,957 $ 3,675 $ 461,508 WeldingInternational 196,937 7,452 3,371 21,205 (1,800 ) 227,165 WeldingThe HarrisProducts 100,416 (1,287 ) 9,880 8,609 163 117,781 GroupConsolidated $ 668,888 $ 48,506 $ 13,251 $ 73,771 $ 2,038 $ 806,454 % Change Americas 11.4 % ? 11.8 % 1.0 % 24.2 %WeldingInternational 3.8 % 1.7 % 10.8 % (0.9 ) % 15.3 %WeldingThe HarrisProducts (1.3 ) % 9.8 % 8.6 % 0.2 % 17.3 %GroupConsolidated 7.3 % 2.0 % 11.0 % 0.3 % 20.6 %

Nine Months Ended September 30th Change in Net Sales by Segment

ChangeinNetSalesdueto: NetSales Foreign NetSales 2020 Volume Acquisitions Price Exchange 2021 Operating SegmentsAmericas $ 1,123,299 $ 128,836 $ ? $ 80,352 $ 11,731 $ 1,344,218 WeldingInternational 572,027 63,797 6,956 40,537 19,279 702,596 WeldingThe HarrisProducts 266,280 28,775 9,880 38,031 149 343,115 GroupConsolidated $ 1,961,606 $ 221,408 $ 16,836 $ 158,920 $ 31,159 $ 2,389,929 % Change Americas 11.5 % ? 7.2 % 1.0 % 19.7 %WeldingInternational 11.2 % 1.2 % 7.1 % 3.4 % 22.8 %WeldingThe HarrisProducts 10.8 % 3.7 % 14.3 % 0.1 % 28.9 %GroupConsolidated 11.3 % 0.9 % 8.1 % 1.6 % 21.8 %



Contact

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