Previous Statements by LECO
» Lincoln Electric's CEO Discusses Q4 2011 Results - Earnings Call Transcript
» Lincoln Electric Holdings' CEO Discusses Q3 2011 Results - Earnings Call Transcript
» Lincoln Electric Holdings CEO Discusses Q2 2011 Results - Earnings Call Transcript
» Lincoln Electric Holdings Inc. Q3 2009 Earnings Call Transcript
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.
The launch of our new energy efficient FlexTec inverter platform has been one of the best in our long company history. Automation sales continue to accelerate in North America as customers invest in tools that help them reduce their costs and improve quality. Our recent North American acquisitions Torchmate, Techalloy and Arc Products, all performed quite well in the quarter.Continuing to expand our specialty consumable products offerings, during early March we acquired Weartech, a manufacturer of cobalt-based consumable products with operations in California and Port Talbot, Wales. We’re also quickly integrating Weartech into our broad consumable product portfolio. The general industrial economic environment in North America remains positive but appears to be moderating. Key industrial metrics that we follow such as industrial production and capacity utilization across factories in the United States are running ahead of last year’s comparables but showing some month to month volatility. Total manufacturing industrial production in the U.S., excluding high-tech segment, was trending 5 points ahead of 2011 in March of 2012 while capacity utilization was running at approximately 78%. The U.S. purchasing manager index also continues to indicate a growing economy although the measure is softer than the Q1 2011 measurement. Turning to our Lincoln Europe welding segment, the economic environment continues to present both challenges and opportunities basically along geographical lines and market segments. While Southern Europe remained challenged, we did see improvements in the region coming mainly from the UK, France, Eastern Europe, Russia, the Middle East and Africa. With consumable demand and volumes in the traditional European core businesses generally down, we have focused heavily on margin improvements through price discipline and driving product mix towards higher value equipment and chemistry-based consumable products, which contributed to a margin improvement of over 3% of sales compared to last year. The energy-driven business and particularly the oil and gas segment in the Middle East has continued to drive strong demand for our products. Robust fourth quarter sales into this segment continued into the first quarter of 2012, with year-over-year sales increases of over 60% into the region. The Middle East and North Africa market remained a positive for equipment and consumable exports from the United States and China. Read the rest of this transcript for free on seekingalpha.com