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TheStreet Open House

Lincoln Electric's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Stock quotes in this article: LECO

But before we get started, let me remind you that certain statements made during this call and in our discussions may be forward-looking and actual results may differ from our expectations. Actual results may differ materially from such statements due to a variety of factors that could adversely affect the company's operating results. Risks and uncertainties that may affect our results are provided in our press release and in our SEC filings on Form 10-K and Form 10-Q.

Now, let me turn the call over to John Stropki.

John Stropki

Thank you, Vice and good morning everyone. Our first quarter results were very positive setting the record for the highest sales quarter in our history. Overall profitability and cash flows also improved significantly. Strong performance in the quarter resulted from improved product mix and better pricing dynamics in all of our segments.

We experienced very strong sales in North America, driven by demand in both the export and domestic markets for our high technology equipment. Recent acquisitions also played a role and had a very positive impact. Sales were up 21.4% to $727 million. Operating income rose 54% to $92 million or 12.6% of sales, and net income increased 37% to $64 million or $0.76 per diluted share. Excellent sales results for the first quarter of 2012 had a great start for the year.

Looking at the segments, our North American operations had a very strong growth in the quarter. Sales rose 36% year over year to $381 million. Export sales increased 43% from the same period a year ago, and export sales to the BRIC countries, including intercompany sales, were up over 21% over the same period.

Consumable sales were strong across the board, giving strong sales in the automotive and transportation segments. We also saw continuing strength in both the construction and ag equipment manufacturing segments. Welding equipment sales grew significantly in the quarter as our customers continued to embrace Lincoln’s waveform technology.

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