GlobeNewswire Inc | Oct 27, 2020 07:31AM EDT

October 27, 2020

Third Quarter 2020 Highlights?Net sales decline narrows to 8.5% on 8.3% lower organic sales?Operating income margin of 11.6%; Adjusted operating income margin of 12.6%?EPS of $0.97; Adjusted EPS of $1.10?Solid balance sheet profile and strong cash flow generation with 117% cashconversion?Cost reduction actions now estimated to provide $80 to $85 million ofbenefits in 2020

CLEVELAND, Oct. 27, 2020 (GLOBE NEWSWIRE) -- Lincoln Electric Holdings,Inc. (the Company) (Nasdaq: LECO) today reported third quarter 2020 net income of $58.5 million, or diluted earnings per share (EPS) of $0.97, which includes special item after-tax charges of $7.5 million, or $0.13 EPS. This compares with prior year period net income of $72.5 million, or $1.17 EPS, which included special item after-tax net benefits of $4.8 million, or $0.08 EPS. Excluding these items, third quarter 2020 Adjusted net income was $66.0 million, or $1.10 Adjusted EPS. This compares with Adjusted net income of $67.7 million, or $1.09 Adjusted EPS in the prior year period.

Third quarter 2020 sales decreased 8.5% to $668.9 million from an 8.3% decrease in organic sales and 0.2% unfavorable foreign exchange. Operating income for the third quarter 2020 was $77.8 million, or 11.6% of sales, including $6.3 million in rationalization and asset impairment charges. This compares with operating income of $88.5 million, or 12.1% of sales, in the prior year period. Excluding special items, Adjusted operating income was $84.1 million, or 12.6% of sales, as compared with $91.6 million, or 12.5% of sales, in the prior year period.

We operated safely while supporting a rebound in demand across all of our regions and reportable segments in the third quarter," stated Christopher L. Mapes, Chairman, President and Chief Executive Officer. Improved demand and diligent cost management generated solid profitability and earnings performance in the quarter. Mapes continued, Looking ahead, we are well-positioned to maximize growth and are focused on increasing profitability and returns to generate long-term value for our shareholders.

Nine Months 2020 Summary

Net income for the nine months ended September 30, 2020 was $141.0 million, or $2.34 EPS, which includes special item after-tax charges of $33.9 million, or $0.57 EPS. This compares with prior year period net income of $229.4 million, or $3.64 EPS, which included special item after-tax net benefits of $5.8 million, or $0.09 EPS. Excluding these items, Adjusted net income for the nine months ended September 30, 2020 was $174.9 million, or $2.91 Adjusted EPS, compared with Adjusted net income of $223.6 million, or $3.55 Adjusted EPS, in the comparable 2019 period.

Sales decreased 13.5% to $2.0 billion in the nine months ended September 30, 2020 from a 14.3% decrease in organic sales and 0.9% unfavorable foreign exchange, partially offset by a 1.8% benefit from acquisitions. Operating income for the nine months ended September 30, 2020 was $198.6 million, or 10.1% of sales. This compares with operating income of $288.2 million, or 12.7% of sales, in the comparable 2019 period. Excluding special items, Adjusted operating income was $235.5 million, or 12.0% of sales, as compared with $296.3 million, or 13.1% of sales, in the comparable 2019 period.

Dividend

The Company's Board of Directors declared a 4.1% increase in the quarterly cash dividend, from $0.49 per share to $0.51 per share, or $2.04 per share on an annual basis. The declared quarterly cash dividend of $0.51 per share is payable January 15, 2021 to shareholders of record as of December 31, 2020.

Webcast Information

A conference call to discuss third quarter 2020 financial results will be webcast live today, October 27, 2020, 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 3879509. Telephone participants are asked to dial in 10 - 15 minutes prior to the start of the conference call.

Financial results for the third 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 Electric has 59 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. New and changing government actions to address the COVID-19 pandemic continue to occur. As a result, the countries in which the Companys products are manufactured and distributed are in varying stages of restrictions. Certain jurisdictions may have to re-establish restrictions due to a resurgence in COVID-19 cases. Additionally, although most of the Companys customers have re-opened and increased operating levels, such customers may be forced to close or limit operations as any new COVID-19 outbreaks occur. Even as government restrictions are lifted and economies reopen, the ultimate shape of the economic recovery is uncertain and may continue to negatively impact the Company's results of operations, cash flows and financial position in subsequent quarters. Given this current 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

Three Months Ended September 30, Fav (Unfav) to Prior Year 2020 %ofSales 2019 %ofSales $ %Net sales $ 668,888 100.0 % $ 730,783 100.0 % $ (61,895 ) (8.5 %)Cost of goods sold 453,501 67.8 % 492,432 67.4 % 38,931 7.9 %Gross profit 215,387 32.2 % 238,351 32.6 % (22,964 ) (9.6 %)Selling, general& administrative 131,337 19.6 % 148,312 20.3 % 16,975 11.4 %expensesRationalizationandassetimpairment 6,257 0.9 % 1,495 0.2 % (4,762 ) (318.5 %)chargesOperating income 77,793 11.6 % 88,544 12.1 % (10,751 ) (12.1 %)Interest expense, net 5,552 0.8 % 6,400 0.9 % 848 13.3 %Other income (expense) 1,062 0.2 % 9,653 1.3 % (8,591 ) (89.0 %)Income before income taxes 73,303 11.0 % 91,797 12.6 % (18,494 ) (20.1 %)Income taxes 14,797 2.2 % 19,340 2.6 % 4,543 23.5 %Effective tax rate 20.2 % 21.1 % 0.9 % Net income including non-controlling 58,506 8.7 % 72,457 9.9 % (13,951 ) (19.3 %)interestsNon-controlling interests in 27 ? (4 ) ? 31 775.0 %subsidiaries? income (loss)Net income $ 58,479 8.7 % $ 72,461 9.9 % $ (13,982 ) (19.3 %) Basic earnings per share $ 0.98 $ 1.18 $ (0.20 ) (16.9 %)Diluted earnings per share $ 0.97 $ 1.17 $ (0.20 ) (17.1 %)Weighted average shares (basic) 59,426 61,380 Weighted average shares (diluted) 60,018 62,061 Nine Months Ended September 30, Fav (Unfav) to Prior Year 2020 % of Sales 2019 % of Sales $ %Net sales $ 1,961,606 100.0 % $ 2,266,965 100.0 % $ (305,359 ) (13.5 %)Cost of goods sold 1,319,519 67.3 % 1,500,312 66.2 % 180,793 12.1 %Gross profit 642,087 32.7 % 766,653 33.8 % (124,566 ) (16.2 %)Selling, general& administrative 407,440 20.8 % 472,108 20.8 % 64,668 13.7 %expensesRationalizationandassetimpairment 36,016 1.8 % 6,337 0.3 % (29,679 ) (468.3 %)chargesOperating income 198,631 10.1 % 288,208 12.7 % (89,577 ) (31.1 %)Interest expense, net 16,891 0.9 % 17,621 0.8 % 730 4.1 %Other income (expense) 1,168 0.1 % 17,612 0.8 % (16,444 ) (93.4 %)Income before income taxes 182,908 9.3 % 288,199 12.7 % (105,291 ) (36.5 %)Income taxes 41,834 2.1 % 58,832 2.6 % 16,998 28.9 %Effective tax rate 22.9 % 20.4 % (2.5 %) Net income including non-controlling 141,074 7.2 % 229,367 10.1 % (88,293 ) (38.5 %)interestsNon-controlling interests in 37 ? (26 ) ? 63 242.3 %subsidiaries? income (loss)Net income $ 141,037 7.2 % $ 229,393 10.1 % $ (88,356 ) (38.5 %) Basic earnings per share $ 2.36 $ 3.68 $ (1.32 ) (35.9 %)Diluted earnings per share $ 2.34 $ 3.64 $ (1.30 ) (35.7 %)Weighted average shares (basic) 59,655 62,282 Weighted average shares (diluted) 60,202 62,972

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

Balance Sheet Highlights

SelectedConsolidatedBalanceSheetData September 30, December 31, 2020 2019Cash and cash equivalents $ 152,479 $ 199,563 Total current assets 1,026,211 1,075,581 Property, plant and equipment, net 504,520 529,344 Total assets 2,217,499 2,371,213 Total current liabilities 533,161 563,135 Short-term debt ^(1) 1,147 34,969 Long-term debt, less current portion 715,687 712,302 Total equity 710,744 819,077 Operating Working Capital September 30, December 31, 2020 2019Accounts receivable, net $ 373,044 $ 374,649 Inventories 396,214 393,748 Trade accounts payable 226,494 273,002 Operating working capital $ 542,764 $ 495,395 Average operating working capital to Net 20.3 % 16.8 %sales ^(2) Invested Capital September 30, December 31, 2020 2019Short-term debt ^(1) $ 1,147 $ 34,969 Long-term debt, less current portion 715,687 712,302 Total debt 716,834 747,271 Total equity 710,744 819,077 Invested capital $ 1,427,578 $ 1,566,348 Total debt / invested capital 50.2 % 47.7 %

-- Includes current portion of long-term debt. -- Average operating working capital to Net sales is defined as operating 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 Nine Months Ended September 30, September 30, 2020 2019 2020 2019Operating income as $ 77,793 $ 88,544 $ 198,631 $ 288,208 reportedSpecial items (pre-tax): Rationalization andasset impairment 6,257 1,495 36,016 6,337 charges^(2)Acquisition transactionand integration costs^ ? ? ? 1,804 (3)Amortization of step upin value of acquired ? 1,609 806 3,008 inventories ^(4)Gains on asset disposals ? ? ? (3,045 )^(5)Adjusted operating $ 84,050 $ 91,648 $ 235,453 $ 296,312 income ^(1)As a percent of total 12.6 % 12.5 % 12.0 % 13.1 %sales Net income as reported $ 58,479 $ 72,461 $ 141,037 $ 229,393 Special items: Rationalization andasset impairment 6,257 1,495 36,016 6,337 charges^(2)Acquisition transactionand integration costs^ ? ? ? 1,804 (3)Pension settlement 3,188 ? 6,522 ? charges ^(5)Amortization of step upin value of acquired ? 1,609 806 3,008 inventories ^(4)Gains on asset disposals ? ? ? (3,554 )^(6)Gain on change in ? (7,601 ? (7,601 )control^(7)Tax effect of Special (1,911 ) (255 (9,463 ) (5,819 )items ^(8)Adjusted net income ^(1) 66,013 67,709 174,918 223,568 Non-controllinginterests in 27 (4 ) 37 (26 )subsidiaries? income(loss)Interest expense, net 5,552 6,400 16,891 17,621 Income taxes as reported 14,797 19,340 41,834 58,832 Tax effect of Special 1,911 255 9,463 5,819 items ^(8)Adjusted EBIT ^(1) $ 88,300 $ 93,700 $ 243,143 $ 305,814 Effective tax rate as 20.2 % 21.1 % 22.9 % 20.4 %reportedNet special item tax ? 1.3 % (0.2 %) 2.0 %impactAdjusted effective tax 20.2 % 22.4 % 22.7 % 22.4 %rate ^(1) Diluted earnings per $ 0.97 $ 1.17 $ 2.34 $ 3.64 share as reportedSpecial items per share 0.13 (0.08 ) 0.57 (0.09 )Adjusted diluted $ 1.10 $ 1.09 $ 2.91 $ 3.55 earnings per share ^(1) Weighted average shares 60,018 62,061 60,202 62,972 (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, asset impairments of long-lived assets and gains or losses on the disposal of assets. -- Related to the acquisition of Air Liquide Welding and are included in Selling, general & administrative expenses. -- Related to an acquisition and are included in Cost of goods sold. -- Primarily included in Cost of goods sold. -- Related to lump sum pension payments and are included in Other income (expense). -- 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 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 nine months ended September 30, 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

Twelve Months Ended September 30,Return on Invested Capital 2020 2019Net income as reported $ 204,753 $ 316,232 Rationalization and asset impairment charges 44,867 7,269 Acquisition transaction and integration costs ? 2,637 Pension settlement charges 6,522 1,696 Amortization of step up in value of acquired 806 3,008 inventoriesGains on asset disposals ? (3,554 )Gain on change in control ? (7,601 )Tax effect of Special items ^(2) (11,030 ) (12,583 )Adjusted net income ^(1) $ 245,918 $ 307,104 Plus: Interest expense, net of tax of $6,177 18,564 19,265 and $6,410 in 2020 and 2019, respectivelyLess: Interest income, net of tax of $513 and 1,543 2,785 $926 in 2020 and 2019, respectivelyAdjusted net income before tax-effected $ 262,939 $ 323,584 interest Invested Capital September 30, September 30, 2020 2019Short-term debt $ 1,147 $ 13,293 Long-term debt, less current portion 715,687 713,884 Total debt 716,834 727,177 Total equity 710,744 813,808 Invested capital $ 1,427,578 $ 1,540,985 Return on invested capital ^(1) 18.4 % 21.0 % Twelve Months Ended September 30,Total Debt / EBITDA 2020 2019Net income as reported $ 204,753 $ 316,232 Income taxes 58,412 66,508 Interest expense, net 22,685 21,964 Depreciation and amortization 81,653 78,800 EBITDA ^(1) $ 367,503 $ 483,504 September 30, September 30, 2020 2019Total debt $ 716,834 $ 727,177 Total debt / EBITDA 1.95 1.50

-- 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, 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 September 30, 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 September 30, 2020 2019OPERATING ACTIVITIES: Net income $ 58,479 $ 72,461 Non-controlling interests in subsidiaries? income 27 (4 )(loss)Net income including non-controlling interests 58,506 72,457 Adjustments to reconcile Net income includingnon-controlling interests to Net cash provided by operating activities:Rationalization and asset impairment charges 22 ? Depreciation and amortization 19,488 21,148 Equity earnings in affiliates, net (80 ) (49 )Gain on change in control ? (7,601 )Other non-cash items, net 2,518 3,566 Changes in operating assets and liabilities, net of effects from acquisitions:(Increase) decrease in accounts receivable (30,517 ) 45,374 Decrease (increase) in inventories 26,948 (8,709 )Decrease in trade accounts payable (2,218 ) (18,733 )Net change in other current assets and liabilities 14,232 20,393 Net change in other long-term assets and 649 835 liabilitiesNET CASH PROVIDED BY OPERATING ACTIVITIES 89,548 128,681 INVESTING ACTIVITIES: Capital expenditures (12,105 ) (17,038 )Acquisition of businesses, net of cash acquired ? (28,892 )Proceeds from sale of property, plant and equipment 739 779 NET CASH USED BY INVESTING ACTIVITIES (11,366 ) (45,151 ) FINANCING ACTIVITIES: Net change in borrowings (48,230 ) (27,544 )Proceeds from exercise of stock options 5,959 5,250 Purchase of shares for treasury (223 ) (61,028 )Cash dividends paid to shareholders (29,131 ) (29,061 )NET CASH USED BY FINANCING ACTIVITIES (71,625 ) (112,383 ) Effect of exchange rate changes on Cash and cash 2,867 (4,396 )equivalentsINCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 9,424 (33,249 )Cash and cash equivalents at beginning of period 143,055 189,861 Cash and cash equivalents at end of period $ 152,479 $ 156,612 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

Nine Months Ended September 30, 2020 2019OPERATING ACTIVITIES: Net income $ 141,037 $ 229,393 Non-controlling interests in subsidiaries? income 37 (26 )(loss)Net income including non-controlling interests 141,074 229,367 Adjustments to reconcile Net income includingnon-controlling interests to Net cash provided by operating activities:Rationalization and asset impairment net charges 21,927 1,069 Depreciation and amortization 60,566 60,400 Equity earnings in affiliates, net (323 ) (1,266 )Gain on change in control ? (7,601 )Other non-cash items, net (2,770 ) 9,285 Changes in operating assets and liabilities, net of effects from acquisitions:(Increase) decrease in accounts receivable (6,851 ) 24,103 Increase in inventories (3,430 ) (36,476 )Decrease in trade accounts payable (42,333 ) (34,202 )Net change in other current assets and liabilities 46,642 34,340 Net change in other long-term assets and 1,059 1,647 liabilitiesNET CASH PROVIDED BY OPERATING ACTIVITIES 215,561 280,666 INVESTING ACTIVITIES: Capital expenditures (37,116 ) (53,551 )Acquisition of businesses, net of cash acquired ? (136,735 )Proceeds from sale of property, plant and equipment 6,957 9,491 Other investing activities ? 2,000 NET CASH USED BY INVESTING ACTIVITIES (30,159 ) (178,795 ) FINANCING ACTIVITIES: Net change in borrowings (33,135 ) 2,433 Proceeds from exercise of stock options 7,961 6,210 Purchase of shares for treasury (113,198 ) (221,942 )Cash dividends paid to shareholders (88,945 ) (89,162 )NET CASH USED BY FINANCING ACTIVITIES (227,317 ) (302,461 ) Effect of exchange rate changes on Cash and cash (5,169 ) (1,647 )equivalentsDECREASE IN CASH AND CASH EQUIVALENTS (47,084 ) (202,237 )Cash and cash equivalents at beginning of period 199,563 358,849 Cash and cash equivalents at end of period $ 152,479 $ 156,612 Cash dividends paid per share $ 1.47 $ 1.41

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

Americas International TheHarris Corporate/ Welding Welding Products Eliminations Consolidated GroupThree months ended September 30, 2020Net sales $ 371,535 $ 196,937 $ 100,416 $ ? $ 668,888 Inter-segment 29,368 4,898 1,898 (36,164 ) ? salesTotal $ 400,903 $ 201,835 $ 102,314 $ (36,164 ) $ 668,888 Net income $ 58,479 As a percentof total 8.7 %sales EBIT^ (1) $ 52,076 $ 11,031 $ 17,587 $ (1,839 ) $ 78,855 As a percentof total 13.0 % 5.5 % 17.2 % 11.8 %salesSpecial itemscharges 7,044 2,401 ? ? 9,445 (gains) ^(3)Adjusted EBIT $ 59,120 $ 13,432 $ 17,587 $ (1,839 ) $ 88,300 ^(2)As a percentof total 14.7 % 6.7 % 17.2 % 13.2 %sales Three months ended September 30, 2019Net sales $ 443,521 $ 205,378 $ 81,884 $ ? $ 730,783 Inter-segment 31,101 4,441 1,857 (37,399 ) ? salesTotal $ 474,622 $ 209,819 $ 83,741 $ (37,399 ) $ 730,783 Net income $ 72,461 As a percentof total 9.9 %sales EBIT ^(1) $ 74,110 $ 14,681 $ 11,038 $ (1,632 ) $ 98,197 As a percentof total 15.6 % 7.0 % 13.2 % 13.4 %salesSpecial itemscharges ? (4,497 ) ? ? (4,497 )(gains) ^(4)Adjusted EBIT $ 74,110 $ 10,184 $ 11,038 $ (1,632 ) $ 93,700 ^(2)As a percentof total 15.6 % 4.9 % 13.2 % 12.8 %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 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. -- Special items in 2019 reflect Rationalization and asset impairment charges of $1,495, amortization of step up in value of acquired inventories of $1,609 and a gain on change in control of $7,601 related to the acquisition of Askaynak in International Welding.

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

Americas International TheHarris Corporate/ Welding Welding Products Eliminations Consolidated GroupNine months ended September 30, 2020Net sales $ 1,123,299 $ 572,027 $ 266,280 $ ? $ 1,961,606 Inter-segment 81,644 13,667 5,376 (100,687) ? salesTotal $ 1,204,943 $ 585,694 $ 271,656 $ (100,687) $ 1,961,606 Net income $ 141,037 As a percentof total 7.2 %sales EBIT ^(1) $ 142,283 $ 20,626 $ 41,792 $ (4,902) $ 199,799 As a percentof total 11.8 % 3.5 % 15.4 % 10.2 %salesSpecial itemscharges 34,241 9,103 ? ? 43,344 (gains) ^(3)Adjusted EBIT $ 176,524 $ 29,729 $ 41,792 $ (4,902) $ 243,143 ^(2)As a percentof total 14.6 % 5.1 % 15.4 % 12.4 %sales Nine months ended September 30, 2019Net sales $ 1,377,847 $ 635,770 $ 253,348 $ ? $ 2,266,965 Inter-segment 95,300 12,838 5,837 (113,975) ? salesTotal $ 1,473,147 $ 648,608 $ 259,185 $ (113,975) $ 2,266,965 Net income $ 229,393 As a percentof total 10.1 %sales EBIT ^(1) $ 237,598 $ 43,624 $ 35,045 $ (10,447) $ 305,820 As a percentof total 16.1 % 6.7 % 13.5 % 13.5 %salesSpecial itemscharges 3,115 (4,925) ? 1,804 (6) (gains) ^(4)Adjusted EBIT $ 240,713 $ 38,699 $ 35,045 $ (8,643) $ 305,814 ^(2)As a percentof total 16.3 % 6.0 % 13.5 % 13.5 %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 2020 reflect Rationalization and asset impairment charges of $27,719 and $8,297 in Americas Welding and International 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 $6,522 in Americas Welding, -- Special items in 2019 reflect Rationalization and asset impairment charges of $1,716 in Americas Welding and $4,621 in International Welding, amortization of step up in value of acquired inventories of $1,399 in Americas Welding and $1,609 in International Welding, gains on disposals of assets of $3,554 and a gain on change in control of $7,601 related to the acquisition of Askaynak in International Welding 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 September 30th Change in Net Sales by Segment Change in Net Sales due to: NetSales Volume Acquisitions Price Foreign NetSales 2019 Exchange 2020Operating SegmentsAmericas $ 443,521 $ (69,028 ) $ ? $ (682 ) $ (2,276 ) $ 371,535 WeldingInternational 205,378 (10,964 ) ? 70 2,453 196,937 WeldingThe HarrisProducts 81,884 10,461 ? 9,472 (1,401 ) 100,416 GroupConsolidated $ 730,783 $ (69,531 ) $ ? $ 8,860 $ (1,224 ) $ 668,888 % Change Americas (15.6 %) ? (0.2 %) (0.5 %) (16.2 %)WeldingInternational (5.3 %) ? ? 1.2 % (4.1 %)WeldingThe HarrisProducts 12.8 % ? 11.6 % (1.7 %) 22.6 %GroupConsolidated (9.5 %) ? 1.2 % (0.2 %) (8.5 %) Nine Months Ended September 30th Change in Net Sales by Segment Change in Net Sales due to: NetSales Volume Acquisitions Price Foreign NetSales 2019 Exchange 2020Operating SegmentsAmericas $ 1,377,847 $ (245,755 ) $ 6,190 $ (7,479 ) $ (7,504 ) $ 1,123,299 WeldingInternational 635,770 (85,923 ) 33,521 (2,901 ) (8,440 ) 572,027 WeldingThe HarrisProducts 253,348 6,370 ? 10,073 (3,511 ) 266,280 GroupConsolidated $ 2,266,965 $ (325,308 ) $ 39,711 $ (307 ) $ (19,455 ) $ 1,961,606 % Change Americas ? % (17.8 %) 0.4 % (0.5 %) (0.5 %) (18.5 %)WeldingInternational (13.5 %) 5.3 % (0.5 %) (1.3 %) (10.0 %)WeldingThe HarrisProducts 2.5 % ? 4.0 % (1.4 %) 5.1 %GroupConsolidated (14.3 %) 1.8 % ? (0.9 %) (13.5 %)

Contact

Amanda Butler Vice President, Investor Relations & Communications Tel: 216.383.2534 Email: Amanda_Butler@lincolnelectric.com