Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2020shares | |
Cover [Abstract] | |
Title of 12(b) Security | Common Shares, without par value |
Entity Address, State or Province | OH |
Entity Tax Identification Number | 34-1860551 |
Entity Registrant Name | LINCOLN ELECTRIC HOLDINGS INC |
Entity Address, Address Line One | 22801 St. Clair Avenue |
City Area Code | 216 |
Local Phone Number | 481-8100 |
Entity Interactive Data Current | Yes |
Entity Shell Company | false |
Entity Central Index Key | 0000059527 |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Sep. 30, 2020 |
Document Transition Report | false |
Entity File Number | 0-1402 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Common Stock, Shares Outstanding | 59,470,712 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q3 |
Trading Symbol | LECO |
Entity Address, Postal Zip Code | 44117 |
Entity Address, City or Town | Cleveland |
Entity Address, State or Province | OH |
Security Exchange Name | NASDAQ |
Entity Emerging Growth Company | false |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Net sales (Note 2) | $ 668,888 | $ 730,783 | $ 1,961,606 | $ 2,266,965 |
Cost of goods sold | 453,501 | 492,432 | 1,319,519 | 1,500,312 |
Gross profit | 215,387 | 238,351 | 642,087 | 766,653 |
Selling, general & administrative expenses | 131,337 | 148,312 | 407,440 | 472,108 |
Rationalization and asset impairment charges (Note 6) | 6,257 | 1,495 | 36,016 | 6,337 |
Operating income | 77,793 | 88,544 | 198,631 | 288,208 |
Interest Income (Expense), Net | (5,552) | (6,400) | (16,891) | (17,621) |
Other income (expense) (Note 14) | 1,062 | 9,653 | 1,168 | 17,612 |
Income before income taxes | 73,303 | 91,797 | 182,908 | 288,199 |
Income taxes (Note 15) | 14,797 | 19,340 | 41,834 | 58,832 |
Net income including non-controlling interests | 58,506 | 72,457 | 141,074 | 229,367 |
Non-controlling interests in subsidiaries’ income (loss) | 27 | (4) | 37 | (26) |
Net income | $ 58,479 | $ 72,461 | $ 141,037 | $ 229,393 |
Basic earnings per share (Note 3) | $ 0.98 | $ 1.18 | $ 2.36 | $ 3.68 |
Diluted earnings per share (Note 3) | 0.97 | 1.17 | 2.34 | 3.64 |
Cash dividends declared per share | $ 0.49 | $ 0.47 | $ 1.47 | $ 1.41 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income including non-controlling interests | $ 58,506 | $ 72,457 | $ 141,074 | $ 229,367 |
Other comprehensive income (loss), net of tax: | ||||
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax of $337 and $(62) in the three and nine months ended September 30, 2020; $(66) and $(121) in the three and nine months ended September 30, 2019. | 639 | (348) | (622) | (320) |
Defined benefit pension plan activity, net of tax of $(776) and $(8,303) in the three and nine months ended September 30, 2020; $536 and $673 in the three and nine months ended September 30, 2019. | (1,304) | 613 | (23,731) | 2,491 |
Currency translation adjustment | 13,039 | (24,025) | (43,101) | (14,040) |
Other comprehensive income (loss): | 12,374 | (23,760) | (67,454) | (11,869) |
Comprehensive income | 70,880 | 48,697 | 73,620 | 217,498 |
Comprehensive income (loss) attributable to non-controlling interests | 62 | 254 | 14 | 234 |
Comprehensive income attributable to shareholders | $ 70,818 | $ 48,443 | $ 73,606 | $ 217,264 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, tax (benefit) | $ 337 | $ (66) | $ (62) | $ (121) |
Unrecognized amounts from defined benefit pension plans, tax benefit (expense) | $ (776) | $ 536 | $ (8,303) | $ 673 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and cash equivalents | $ 152,479 | $ 199,563 |
Accounts receivable (less allowance for doubtful accounts of $15,657 in 2020; $16,002 in 2019) | 373,044 | 374,649 |
Inventories (Note 9) | 396,214 | 393,748 |
Other current assets | 104,474 | 107,621 |
Total Current Assets | 1,026,211 | 1,075,581 |
Property, plant and equipment (less accumulated depreciation of $858,288 in 2020; $825,769 in 2019) | 504,520 | 529,344 |
Goodwill | 331,473 | 337,107 |
Other assets | 355,295 | 429,181 |
TOTAL ASSETS | 2,217,499 | 2,371,213 |
LIABILITIES AND EQUITY | ||
Short-term debt (Note 12) | 1,147 | 34,969 |
Trade accounts payable | 226,494 | 273,002 |
Accrued employee compensation and benefits | 121,967 | 83,033 |
Other current liabilities | 183,553 | 172,131 |
Total Current Liabilities | 533,161 | 563,135 |
Long-Term Liabilities | ||
Long-term debt, less current portion (Note 12) | 715,687 | 712,302 |
Other liabilities | 257,907 | 276,699 |
Total Liabilities | 1,506,755 | 1,552,136 |
Shareholders’ Equity | ||
Common shares | 9,858 | 9,858 |
Additional paid-in capital | 404,086 | 389,446 |
Retained earnings | 2,790,579 | 2,736,481 |
Accumulated other comprehensive loss | (343,281) | (275,850) |
Treasury shares | (2,151,417) | (2,041,763) |
Total Shareholders’ Equity | 709,825 | 818,172 |
Non-controlling interests | 919 | 905 |
Total Equity | 710,744 | 819,077 |
TOTAL LIABILITIES AND TOTAL EQUITY | $ 2,217,499 | $ 2,371,213 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 15,657 | $ 16,002 |
Accumulated depreciation | $ 858,288 | $ 825,769 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Treasury Stock [Member] | Noncontrolling Interests |
Cash dividends declared per share | $ 0.47 | ||||||
Beginning balance at Dec. 31, 2018 | $ 887,592 | $ 9,858 | $ 360,308 | $ 2,564,440 | $ (293,739) | $ (1,753,925) | $ 650 |
Beginning Balance (in shares) at Dec. 31, 2018 | 63,546,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income including non-controlling interests | 71,466 | 71,480 | (14) | ||||
Unrecognized amounts from defined benefit pension plans, net of tax | 787 | 787 | |||||
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax | 329 | 329 | |||||
Currency translation adjustment | 5,136 | 5,099 | 37 | ||||
Cash dividends declared - $0.49 per share and $0.47 per share in 2020 and 2019, respectively | (29,847) | (29,847) | |||||
Stock-based compensation activity | 148,000 | ||||||
Issuance of shares under benefit plans | 4,786 | 3,302 | 1,484 | ||||
Purchase of treasury shares | (75,584) | (75,584) | |||||
Purchase of shares for treasury (in shares) | (894,000) | ||||||
Stockholders' Equity, Other | 0 | 808 | (808) | ||||
Ending balance at Mar. 31, 2019 | $ 864,665 | $ 9,858 | 364,418 | 2,605,265 | (287,524) | (1,828,025) | 673 |
Ending Balance (in shares) at Mar. 31, 2019 | 62,800,000 | ||||||
Cash dividends declared per share | $ 1.41 | ||||||
Beginning balance at Dec. 31, 2018 | $ 887,592 | $ 9,858 | 360,308 | 2,564,440 | (293,739) | (1,753,925) | 650 |
Beginning Balance (in shares) at Dec. 31, 2018 | 63,546,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income including non-controlling interests | 229,367 | ||||||
Unrecognized amounts from defined benefit pension plans, net of tax | 2,491 | ||||||
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax | (320) | ||||||
Currency translation adjustment | (14,040) | ||||||
Ending balance at Sep. 30, 2019 | $ 813,808 | $ 9,858 | 377,584 | 2,704,486 | (305,868) | (1,973,136) | 884 |
Ending Balance (in shares) at Sep. 30, 2019 | 61,149,000 | ||||||
Cash dividends declared per share | $ 0.47 | ||||||
Beginning balance at Mar. 31, 2019 | $ 864,665 | $ 9,858 | 364,418 | 2,605,265 | (287,524) | (1,828,025) | 673 |
Beginning Balance (in shares) at Mar. 31, 2019 | 62,800,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income including non-controlling interests | 85,444 | 85,452 | (8) | ||||
Unrecognized amounts from defined benefit pension plans, net of tax | 1,091 | 1,091 | |||||
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax | (301) | (301) | |||||
Currency translation adjustment | 4,849 | 4,884 | (35) | ||||
Cash dividends declared - $0.49 per share and $0.47 per share in 2020 and 2019, respectively | (29,279) | (29,279) | |||||
Stock-based compensation activity | 13,000 | ||||||
Issuance of shares under benefit plans | 4,919 | 4,783 | 136 | ||||
Purchase of treasury shares | (85,330) | (85,330) | |||||
Purchase of shares for treasury (in shares) | (1,034,000) | ||||||
Stockholders' Equity, Other | 0 | (282) | 282 | ||||
Ending balance at Jun. 30, 2019 | $ 846,058 | $ 9,858 | 368,919 | 2,661,720 | (281,850) | (1,913,219) | 630 |
Ending Balance (in shares) at Jun. 30, 2019 | 61,779,000 | ||||||
Cash dividends declared per share | $ 0.47 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income including non-controlling interests | $ 72,457 | 72,461 | (4) | ||||
Unrecognized amounts from defined benefit pension plans, net of tax | 613 | 613 | |||||
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax | (348) | (348) | |||||
Currency translation adjustment | (24,025) | (24,283) | 258 | ||||
Cash dividends declared - $0.49 per share and $0.47 per share in 2020 and 2019, respectively | (28,931) | (28,931) | |||||
Stock-based compensation activity | 107,000 | ||||||
Issuance of shares under benefit plans | 9,107 | 7,996 | 1,111 | ||||
Purchase of treasury shares | (61,028) | (61,028) | |||||
Purchase of shares for treasury (in shares) | (737,000) | ||||||
Stockholders' Equity, Other | (95) | 669 | (764) | ||||
Ending balance at Sep. 30, 2019 | $ 813,808 | $ 9,858 | 377,584 | 2,704,486 | (305,868) | (1,973,136) | 884 |
Ending Balance (in shares) at Sep. 30, 2019 | 61,149,000 | ||||||
Cash dividends declared per share | $ 0.49 | ||||||
Beginning balance at Dec. 31, 2019 | $ 819,077 | $ 9,858 | 389,446 | 2,736,481 | (275,850) | (2,041,763) | 905 |
Beginning Balance (in shares) at Dec. 31, 2019 | 60,592,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income including non-controlling interests | 55,555 | 55,562 | (7) | ||||
Unrecognized amounts from defined benefit pension plans, net of tax | 609 | 609 | |||||
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax | (2,369) | (2,369) | |||||
Currency translation adjustment | (70,608) | (70,567) | (41) | ||||
Cash dividends declared - $0.49 per share and $0.47 per share in 2020 and 2019, respectively | (29,280) | (29,280) | |||||
Stock-based compensation activity | 152,000 | ||||||
Issuance of shares under benefit plans | 4,738 | 2,826 | 1,912 | ||||
Purchase of treasury shares | (109,762) | (109,762) | |||||
Purchase of shares for treasury (in shares) | (1,357,000) | ||||||
Stockholders' Equity, Other | 0 | (5,176) | 5,176 | ||||
Ending balance at Mar. 31, 2020 | $ 667,960 | $ 9,858 | 387,096 | 2,767,939 | (348,177) | (2,149,613) | 857 |
Ending Balance (in shares) at Mar. 31, 2020 | 59,387,000 | ||||||
Cash dividends declared per share | $ 1.47 | ||||||
Beginning balance at Dec. 31, 2019 | $ 819,077 | $ 9,858 | 389,446 | 2,736,481 | (275,850) | (2,041,763) | 905 |
Beginning Balance (in shares) at Dec. 31, 2019 | 60,592,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income including non-controlling interests | 141,074 | ||||||
Unrecognized amounts from defined benefit pension plans, net of tax | (23,731) | ||||||
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax | (622) | ||||||
Currency translation adjustment | $ (43,101) | ||||||
Purchase of shares for treasury (in shares) | (1,400,000) | ||||||
Ending balance at Sep. 30, 2020 | $ 710,744 | $ 9,858 | 404,086 | 2,790,579 | (343,281) | (2,151,417) | 919 |
Ending Balance (in shares) at Sep. 30, 2020 | 59,471,000 | ||||||
Cash dividends declared per share | $ 0.49 | ||||||
Beginning balance at Mar. 31, 2020 | $ 667,960 | $ 9,858 | 387,096 | 2,767,939 | (348,177) | (2,149,613) | 857 |
Beginning Balance (in shares) at Mar. 31, 2020 | 59,387,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income including non-controlling interests | 27,013 | 26,996 | 17 | ||||
Unrecognized amounts from defined benefit pension plans, net of tax | (23,036) | (23,036) | |||||
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax | 1,108 | 1,108 | |||||
Currency translation adjustment | 14,468 | 14,485 | (17) | ||||
Cash dividends declared - $0.49 per share and $0.47 per share in 2020 and 2019, respectively | (29,260) | (29,260) | |||||
Stock-based compensation activity | 25,000 | ||||||
Issuance of shares under benefit plans | 5,071 | 4,754 | 317 | ||||
Purchase of treasury shares | (3,213) | (3,213) | |||||
Purchase of shares for treasury (in shares) | (45,000) | ||||||
Stockholders' Equity, Other | 0 | 2,842 | (2,842) | ||||
Ending balance at Jun. 30, 2020 | $ 660,111 | $ 9,858 | 394,692 | 2,762,833 | (355,620) | (2,152,509) | 857 |
Ending Balance (in shares) at Jun. 30, 2020 | 59,367,000 | ||||||
Cash dividends declared per share | $ 0.49 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income including non-controlling interests | $ 58,506 | 58,479 | 27 | ||||
Unrecognized amounts from defined benefit pension plans, net of tax | (1,304) | (1,304) | |||||
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax | 639 | 639 | |||||
Currency translation adjustment | 13,039 | 13,004 | 35 | ||||
Cash dividends declared - $0.49 per share and $0.47 per share in 2020 and 2019, respectively | (29,326) | (29,326) | |||||
Stock-based compensation activity | 106,000 | ||||||
Issuance of shares under benefit plans | 9,808 | 8,493 | 1,315 | ||||
Purchase of treasury shares | (223) | (223) | |||||
Purchase of shares for treasury (in shares) | (2,000) | ||||||
Stockholders' Equity, Other | (506) | 901 | (1,407) | ||||
Ending balance at Sep. 30, 2020 | $ 710,744 | $ 9,858 | $ 404,086 | $ 2,790,579 | $ (343,281) | $ (2,151,417) | $ 919 |
Ending Balance (in shares) at Sep. 30, 2020 | 59,471,000 |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY CONSOLIDATED STATEMENTS OF EQUITY (parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||||||||
Cash dividends declared per share | $ 0.49 | $ 0.49 | $ 0.49 | $ 0.47 | $ 0.47 | $ 0.47 | $ 1.47 | $ 1.41 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 141,037 | $ 229,393 |
Non-controlling interests in subsidiaries’ income (loss) | 37 | (26) |
Net income including non-controlling interests | 141,074 | 229,367 |
Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities: | ||
Rationalization and asset impairment net charges (Note 6) | 21,927 | 1,069 |
Depreciation and amortization | 60,566 | 60,400 |
Equity earnings in affiliates, net | (323) | (1,266) |
Deferred income taxes | (10,143) | 4,045 |
Stock-based compensation | 11,656 | 12,602 |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Remeasurement (Gain) Loss, Net | 0 | (7,601) |
Other, net | (4,283) | (7,362) |
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 other current assets | 8,027 | 3,227 |
Decrease in trade accounts payable | (42,333) | (34,202) |
Increase in other current liabilities | 38,615 | 31,113 |
Net change in other assets and liabilities | 1,059 | 1,647 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 215,561 | 280,666 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capital expenditures | (37,116) | (53,551) |
Payments to Acquire Businesses, Net of Cash Acquired | 0 | (136,735) |
Proceeds from sale of property, plant and equipment | 6,957 | 9,491 |
Other Investing Activities | 0 | 2,000 |
NET CASH USED BY INVESTING ACTIVITIES | (30,159) | (178,795) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Payments on short-term borrowings | (3,504) | 0 |
Amounts due banks, net | (29,619) | 2,439 |
Payments on long-term borrowings | (12) | (6) |
Proceeds from exercise of stock options | 7,961 | 6,210 |
Purchase of shares for treasury (Note 8) | (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 on Cash and Cash Equivalents | (5,169) | (1,647) |
Cash and Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect | (47,084) | (202,237) |
Cash and Cash Equivalents, Beginning Balance | 199,563 | 358,849 |
Cash and Cash Equivalents, Ending Balance | $ 152,479 | $ 156,612 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation As used in this report, the term “Company,” except as otherwise indicated by the context, means Lincoln Electric Holdings, Inc. and its wholly-owned and majority-owned subsidiaries for which it has a controlling interest. The consolidated financial statements include the accounts of all legal entities in which the Company holds a controlling interest. The Company is also considered to have a controlling interest in a variable interest entity (“VIE”) if the Company determines it is the primary beneficiary of the VIE. Investments in legal entities in which the Company does not own a majority interest but has the ability to exercise significant influence over operating and financial policies are accounted for using the equity method. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these unaudited consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements. However, in the opinion of management, these unaudited consolidated financial statements contain all the adjustments (consisting of normal recurring accruals) considered necessary to present fairly the financial position, results of operations and cash flows for the interim periods. Operating results for the nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020. The accompanying Consolidated Balance Sheet at December 31, 2019 has been derived from the audited financial statements at that date, but does not include all of the information and notes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. COVID-19 Assessment In March 2020, the World Health Organization categorized the current coronavirus disease (“COVID-19”) as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. COVID-19 continues to spread throughout the United States and other countries across the world, and 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 Company’s 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 Company’s 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. The Company’s consolidated financial statements presented herein reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting periods presented. Such estimates and assumptions affect, among other things, the Company’s goodwill, long-lived asset and indefinite-lived intangible asset valuation; inventory valuation; assessment of the annual effective tax rate; valuation of deferred income taxes and income tax contingencies; the allowance for doubtful accounts; measurement of compensation cost for certain share-based awards and cash bonus plans; and pension plan assumptions. Events and changes in circumstances arising after September 30, 2020, including those resulting from the continued impacts of COVID-19, will be reflected in management’s estimates for future periods. New Accounting Pronouncements: This section provides a description of new accounting pronouncements ("Accounting Standard Update" or "ASU") issued by the Financial Accounting Standards Board ("FASB") that are applicable to the Company. The following ASUs were adopted as of January 1, 2020, unless otherwise noted below: Standard Description ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20), issued August 2018. ASU 2018-14 modifies disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The ASU also requires an entity to disclose the weighted-average interest crediting rates for cash balance plans and to explain the reasons for significant gains and losses related to changes in the benefit obligation. These disclosure requirements will be reflected in the Notes to the consolidated financial statements in the Company's Form 10-K for the year ended December 31, 2020. ASU No. 2018-13, Fair Value Measurement (Topic 944) , issued August 2018. ASU 2018-13 eliminates, amends and adds disclosure requirements related to fair value measurements. The ASU removes disclosure requirements pertaining to the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels and the valuation processes for Level 3 fair value measurements. Refer to Note 17 to the consolidated financial statements for further details. ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), issued June 2016. ASU 2016-13 modifies disclosure and measurement requirements related to credit losses. Topic 326 requires that an entity estimate impairment of trade receivables based on expected losses rather than incurred losses. The adoption did not have a material impact on the Company's consolidated financial statements. ASU No. 2020-04, Reference Rate Reform (Topic 848) , issued March 2020. ASU 2020-04 provides temporary optional guidance to ease the financial reporting burden associated with the expected market transition from the London Inter-Bank Offer Rate ("LIBOR") to alternative reference rates. The Company adopted the ASU on March 12, 2020 and it is effective through December 31, 2022. As of September 30, 2020, the Company has not utilized any of the optional guidance; however, it will continue to assess the potential impact on the Company’s debt contracts and hedging relationships through the effective period. The Company is currently evaluating the impact on its financial statements of the following ASU: Standard Description ASU No. 2019-12, Income Taxes (Topic 740) , issued December 2019. ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The ASU is effective January 1, 2021 and early adoption is permitted. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | REVENUE RECOGNITION The following table presents the Company's Net sales disaggregated by product line: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Consumables $ 379,177 $ 420,980 $ 1,118,688 $ 1,308,788 Equipment 289,711 309,803 842,918 958,177 Net sales $ 668,888 $ 730,783 $ 1,961,606 $ 2,266,965 Consumable sales consist of electrodes, fluxes, specialty welding consumables and brazing and soldering alloys. Equipment sales consist of arc welding power sources, welding accessories, fabrication, plasma cutters, wire feeding systems, automated joining, assembly and cutting systems, fume extraction equipment, CNC plasma and oxy-fuel cutting systems and regulators and torches used in oxy-fuel welding, cutting and brazing. Consumable and Equipment products are sold within each of the Company’s operating segments. Within the Equipment product line, there are certain customer contracts related to automation products that may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines the standalone selling price based on the prices charged to customers or using expected cost plus margin. Less than 10% of the Company's Net sales are recognized over time. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Numerator: Net income $ 58,479 $ 72,461 $ 141,037 $ 229,393 Denominator (shares in 000's): Basic weighted average shares outstanding 59,426 61,380 59,655 62,282 Effect of dilutive securities - Stock options and awards 592 681 547 690 Diluted weighted average shares outstanding 60,018 62,061 60,202 62,972 Basic earnings per share $ 0.98 $ 1.18 $ 2.36 $ 3.68 Diluted earnings per share $ 0.97 $ 1.17 $ 2.34 $ 3.64 For the three months ended September 30, 2020 and 2019, common shares subject to equity-based awards of 557,198 and 548,049, respectively, were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive. For the nine months ended September 30, 2020 and 2019, common shares subject to equity-based awards of 547,329 and 514,402, respectively, were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS During July 2019, the Company acquired the controlling stake of Kaynak Tekniği Sanayi ve Ticaret A.Ş. (“Askaynak”). Askaynak, based in Turkey, is a supplier and manufacturer of welding consumables, arc welding equipment, including plasma and oxy-fuel cutting equipment and robotic welding systems. The acquisition advanced the Company's regional growth strategy in Europe, the Middle East and Africa. During April 2019, the Company acquired Baker Industries, Inc. ("Baker"). Baker, based in Detroit, Michigan, is a provider of custom tooling, parts and fixtures primarily serving automotive and aerospace markets. The acquisition complimented the Company's automation portfolio and its metal additive manufacturing service business. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company's business units are aligned into three operating segments. The operating segments consist of Americas Welding, International Welding and The Harris Products Group. The Americas Welding segment includes welding operations in North and South America. The International Welding segment includes welding operations in Europe, Africa, Asia and Australia. The Harris Products Group includes the Company’s global oxy-fuel cutting, soldering and brazing businesses as well as its retail business in the United States. Segment performance is measured and resources are allocated based on a number of factors, the primary measure being the adjusted earnings before interest and income taxes (“Adjusted EBIT”) profit measure. EBIT is defined as Operating income plus Other income (expense). EBIT is adjusted for special items as determined by management such as the impact of rationalization activities, certain asset impairment charges and gains or losses on disposals of assets. The following table presents Adjusted EBIT by segment: Americas Welding International Welding The Harris Corporate / Consolidated Three Months Ended September 30, 2020 Net sales $ 371,535 $ 196,937 $ 100,416 $ — $ 668,888 Inter-segment sales 29,368 4,898 1,898 (36,164) — Total $ 400,903 $ 201,835 $ 102,314 $ (36,164) $ 668,888 Adjusted EBIT $ 59,120 $ 13,432 $ 17,587 $ (1,839) $ 88,300 Special items charge (gain) (1) 7,044 2,401 — — 9,445 EBIT $ 52,076 $ 11,031 $ 17,587 $ (1,839) $ 78,855 Interest income 293 Interest expense (5,845) Income before income taxes $ 73,303 Three Months Ended September 30, 2019 Net sales $ 443,521 $ 205,378 $ 81,884 $ — $ 730,783 Inter-segment sales 31,101 4,441 1,857 (37,399) — Total $ 474,622 $ 209,819 $ 83,741 $ (37,399) $ 730,783 Adjusted EBIT $ 74,110 $ 10,184 $ 11,038 $ (1,632) $ 93,700 Special items charge (gain) (2) — (4,497) — — (4,497) EBIT $ 74,110 $ 14,681 $ 11,038 $ (1,632) $ 98,197 Interest income 491 Interest expense (6,891) Income before income taxes $ 91,797 Nine Months Ended September 30, 2020 Net sales $ 1,123,299 $ 572,027 $ 266,280 $ — $ 1,961,606 Inter-segment sales 81,644 13,667 5,376 (100,687) — Total $ 1,204,943 $ 585,694 $ 271,656 $ (100,687) $ 1,961,606 Adjusted EBIT $ 176,524 $ 29,729 $ 41,792 $ (4,902) $ 243,143 Special items charge (gain) (1) 34,241 9,103 — — 43,344 EBIT $ 142,283 $ 20,626 $ 41,792 $ (4,902) $ 199,799 Interest income 1,576 Interest expense (18,467) Income before income taxes $ 182,908 Nine Months Ended September 30, 2019 Net sales $ 1,377,847 $ 635,770 $ 253,348 $ — $ 2,266,965 Inter-segment sales 95,300 12,838 5,837 (113,975) — Total $ 1,473,147 $ 648,608 $ 259,185 $ (113,975) $ 2,266,965 Adjusted EBIT $ 240,713 $ 38,699 $ 35,045 $ (8,643) $ 305,814 Special items charge (gain) (2) 3,115 (4,925) — 1,804 (6) EBIT $ 237,598 $ 43,624 $ 35,045 $ (10,447) $ 305,820 Interest income 2,047 Interest expense (19,668) Income before income taxes $ 288,199 (1) In the three months ended September 30, 2020, special items 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. In the nine months ended September 30, 2020, special items 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 related to an acquisition in International Welding and pension settlement charges of $6,522 in Americas Welding. (2) In the three months ended September 30, 2019, special items reflect Rationalization and asset impairment charges $1,495, amortization of step up in value of acquired inventories of $1,609 related to the acquisition of Askaynak and a gain on change in control of $7,601 related to the acquisition of Askaynak in International Welding. In the nine months ended September 30, 2019, special items reflect Rationalization and asset impairment charges of $1,716 and $4,621 in Americas Welding and International Welding, respectively, amortization of step up in value of acquired inventories of $1,399 in Americas Welding and $1,609 related to the acquisition of Askaynak in International Welding, gains on disposals of assets of $3,554 in International Welding and acquisition transaction and integration costs of $1,804 in Corporate / Eliminations related to the Air Liquide Welding acquisition and a gain on change in control of $7,601 related to the acquisition of Askaynak in International Welding. |
RATIONALIZATION AND ASSET IMPAI
RATIONALIZATION AND ASSET IMPAIRMENTS | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
RATIONALIZATION AND ASSET IMPAIRMENTS | RATIONALIZATION AND ASSET IMPAIRMENTS The Company recorded Rationalization and asset impairment net charges of $36,016 and $6,337 in the nine months ended September 30, 2020 and 2019, respectively. The charges are primarily related to employee severance, non-cash asset impairments of long-lived assets and gains or losses on the disposal of assets. During 2020, the Company initiated rationalization plans within Americas Welding and International Welding segments. The plans include headcount restructuring and the consolidation of manufacturing facilities to better align the cost structure with economic conditions and operating needs. At September 30, 2020, liabilities of $218 and $6,592 for Americas Welding and International Welding, respectively, were recognized in Other current liabilities in the Company's Condensed Consolidated Balance Sheet. During 2019, the Company initiated rationalization plans within International Welding. The plans include headcount restructuring and the consolidation of manufacturing operations to better align the cost structure with economic conditions and operating needs. At September 30, 2020, liabilities of $4,934 were recognized in Other current liabilities in the Company's Condensed Consolidated Balance Sheet. The Company believes the rationalization actions will positively impact future results of operations and will not have a material effect on liquidity and sources and uses of capital. The Company continues to evaluate its cost structure and additional rationalization actions may result in charges in future periods. The following table summarizes the activity related to rationalization liabilities for the nine months ended September 30, 2020: Americas Welding International Welding Consolidated Balance, December 31, 2019 $ — $ 8,202 $ 8,202 Payments and other adjustments (5,367) (5,180) (10,547) Charged to expense 5,585 8,504 14,089 Balance, September 30, 2020 $ 218 $ 11,526 $ 11,744 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | |
Comprehensive Income (Loss) Note [Text Block] | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ("AOCI") The following tables set forth the total changes in accumulated other comprehensive income (loss) ("AOCI") by component, net of taxes: Three Months Ended September 30, 2020 Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges Defined benefit pension plan activity Currency translation adjustment Total Balance at June 30, 2020 $ 365 $ (92,973) $ (263,012) $ (355,620) Other comprehensive income (loss) (104) (4,411) 2 13,004 3 8,489 Amounts reclassified from AOCI 743 1 3,107 2 — 3,850 Net current-period other 639 (1,304) 13,004 12,339 Balance at September 30, 2020 $ 1,004 $ (94,277) $ (250,008) $ (343,281) Three Months Ended September 30, 2019 Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges Defined benefit pension plan activity Currency translation adjustment Total Balance at June 30, 2019 $ 1,722 $ (80,171) $ (203,401) $ (281,850) Other comprehensive income (loss) (268) — (24,283) 3 (24,551) Amounts reclassified from AOCI (80) 1 613 2 — 533 Net current-period other (348) 613 (24,283) (24,018) Balance at September 30, 2019 $ 1,374 $ (79,558) $ (227,684) $ (305,868) (1) During the 2020 period, this AOCI reclassification is a component of Net sales of $(551) (net of tax of $(205)) and Cost of goods sold of $192 (net of tax of $8); during the 2019 period, the reclassification is a component of Net sales of $(15) and Cost of goods sold of $(95) (net of tax of $(22)). See Note 16 to the consolidated financial statements for additional details. (2) This AOCI component is included in the computation of net periodic pension costs (net of tax of $(776) and $536 during the three months ended September 30, 2020 and 2019, respectively). See Note 13 to the consolidated financial statements for additional details. (3) The Other comprehensive income (loss) before reclassifications excludes $35 and $258 attributable to Non-controlling interests in the three months ended September 30, 2020 and 2019, respectively. The following tables set forth the total changes in AOCI by component, net of taxes: Nine Months Ended September 30, 2020 Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges Defined benefit pension plan activity Currency translation adjustment Total Balance at December 31, 2019 $ 1,626 $ (70,546) $ (206,930) $ (275,850) Other comprehensive income (loss) (2,304) (30,538) 2 (43,078) 3 (75,920) Amounts reclassified from AOCI 1,682 1 6,807 2 — 8,489 Net current-period other (622) (23,731) (43,078) (67,431) Balance at September 30, 2020 $ 1,004 $ (94,277) $ (250,008) $ (343,281) Nine Months Ended September 30, 2019 Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges Defined benefit pension plan activity Currency translation adjustment Total Balance at December 31, 2018 $ 1,694 $ (82,049) $ (213,384) $ (293,739) Other comprehensive income (loss) 521 — (14,300) 3 (13,779) Amounts reclassified from AOCI (841) 1 2,491 2 — 1,650 Net current-period other (320) 2,491 (14,300) (12,129) Balance at September 30, 2019 $ 1,374 $ (79,558) $ (227,684) $ (305,868) (1) During the 2020 period, this AOCI reclassification is a component of Net sales of $(1,657) (net of tax of $(624)) and Cost of goods sold of $25 (net of tax of $(92)); during the 2019 period, this AOCI reclassification is a component of Net sales of $557 (net of tax of $203) and Cost of goods sold of $(284) (net of tax of $(82)). See Note 16 to the consolidated financial statements for additional details. (2) This AOCI component is included in the computation of net periodic pension costs (net of tax of $(8,303) and $673 during the nine months ended September 30, 2020 and 2019, respectively). See Note 13 to the consolidated financial statements for additional details. |
COMMON STOCK REPURCHASE PROGRAM
COMMON STOCK REPURCHASE PROGRAM | 9 Months Ended |
Sep. 30, 2020 | |
COMMON STOCK REPURCHASE PROGRAM [Abstract] | |
Common Share Repurchase Program [Text Block] | COMMON STOCK REPURCHASE PROGRAMThe Company has a share repurchase program for up to 55 million shares of the Company's common shares. On February 12, 2020, the Company's Board of Director's approved a new share repurchase program authorizing the Company to repurchase, in the aggregate, up to an additional 10 million shares of its outstanding common shares under this program. From time to time at management's discretion, the Company repurchases its common shares in the open market, depending on market conditions, stock price and other factors. During the nine months ended September 30, 2020, the Company purchased a total of 1.4 million shares at an average cost per share of $80.22. As of September 30, 2020, there remained 11.5 million common shares available for repurchase under these programs. The repurchased common shares remain in treasury and have not been retired. |
INVENTORY VALUATION
INVENTORY VALUATION | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORY VALUATION | INVENTORIES Inventories in the Condensed Consolidated Balance Sheets are comprised of the following components: September 30, 2020 December 31, 2019 Raw materials $ 110,590 $ 116,716 Work-in-process 69,501 63,744 Finished goods 216,123 213,288 Total $ 396,214 $ 393,748 |
LEASES (Notes)
LEASES (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Lessee, Operating Leases [Text Block] | LEASES The table below summarizes the right-of-use assets and lease liabilities in the Company's Condensed Consolidated Balance sheets: Operating Leases Balance Sheet Classification September 30, 2020 December 31, 2019 Right-of-use assets Other assets $ 46,626 $ 51,533 Current liabilities Other current liabilities $ 12,821 $ 13,572 Noncurrent liabilities Other liabilities 36,949 39,076 Total lease liabilities $ 49,770 $ 52,648 The Company determines if an agreement is a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of the Company’s operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on information available at commencement date to present value the lease payments. The Company has operating leases for sales offices, manufacturing facilities, warehouses and distribution centers, transportation equipment, office equipment and information technology equipment. Some of these leases are noncancelable. Variable or short-term lease costs contained within the Company’s operating leases are not material. Most leases include one or more options to renew, which can extend the lease term from 1 year to 11 years or more. The exercise of lease renewal options is at the Company's sole discretion. Certain leases also include options to purchase the leased property. Leases with an initial term of 12 months or less are not recorded on the Company's Condensed Consolidated Balance sheets. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. Total lease expense, which is included in Cost of goods sold and Selling, general and administrative expenses in the Company's Consolidated Statements of Income, was $5,655 and $17,665 in the three and nine months ended September 30, 2020 and $6,290 and $18,725 in the three and nine months ended September 30, 2019, respectively. Cash paid for amounts included in the measurement of lease liabilities for the three and nine months ended September 30, 2020, respectively, were $3,733 and $11,727 and are included in Net cash provided by operating activities in the Company's Consolidated Statements of Cash Flows. Cash paid for amounts included in the measurement of lease liabilities for the three and nine months ended September 30, 2019, respectively, were $4,528 and $13,761 and are included in Net cash provided by operating activities in the Company's Consolidated Statements of Cash Flows. Right-of-use assets obtained in exchange for operating lease liabilities were $214 and $2,249 during the three and nine months ended September 30, 2020 and $1,550 and $16,223 for the three and nine months ended September 30, 2019, respectively. The total future minimum lease payments for noncancelable operating leases were as follows: September 30, 2020 2020 $ 3,218 2021 13,619 2022 9,962 2023 8,233 2024 6,754 After 2025 14,544 Total lease payments $ 56,330 Less: Imputed interest (6,560) Operating lease liabilities $ 49,770 As of September 30, 2020, the weighted average remaining lease term is 7.1 years and the weighted average discount rate used to determine the operating lease liability is 3.5%. |
PRODUCT WARRANTY COSTS
PRODUCT WARRANTY COSTS | 9 Months Ended |
Sep. 30, 2020 | |
Product Warranties Disclosures [Abstract] | |
PRODUCT WARRANTY COSTS | PRODUCT WARRANTY COSTS The changes in the carrying amount of product warranty accruals are as follows: Nine Months Ended September 30, 2020 2019 Balance at beginning of year $ 20,650 $ 19,778 Accruals for warranties 13,629 12,494 Settlements (10,699) (11,787) Foreign currency translation and other adjustments (126) (125) Balance at September 30 $ 23,454 $ 20,360 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Revolving Credit Agreements The Company has a line of credit totaling $400,000 through the Amended and Restated Credit Agreement (the “Credit Agreement”). The Credit Agreement has a term of 5 years with a maturity date of June 30, 2022 and may be increased, subject to certain conditions, by an additional amount up to $100,000. The interest rate on borrowings is based on either LIBOR or the prime rate, plus a spread based on the Company’s leverage ratio, at the Company’s election. The Credit Agreement contains customary affirmative, negative and financial covenants for credit facilities of this type, including limitations on the Company and its subsidiaries with respect to liens, investments, distributions, mergers and acquisitions, dispositions of assets, transactions with affiliates and a fixed charges coverage ratio and total leverage ratio. As of September 30, 2020, the Company was in compliance with all of its covenants and had no outstanding borrowings under the Credit Agreement. The Company has other lines of credit totaling $50,000. As of September 30, 2020 the Company was in compliance with all of its covenants and had $1,039 outstanding at September 30, 2020. Senior Unsecured Notes On April 1, 2015 and October 20, 2016, the Company entered into separate Note Purchase Agreements pursuant to which it issued senior unsecured notes (the "Notes") through a private placement. The 2015 Notes and 2016 Notes each have an aggregate principal amount of $350,000, comprised of four different series ranging from $50,000 to $100,000, with maturity dates ranging from August 20, 2025 through April 1, 2045, and interest rates ranging from 2.75% to 4.02%. Interest on the Notes is paid semi-annually. The Company's total weighted average effective interest rate and remaining weighted average tenure of the Notes is 3.3% and 13.6 years, respectively. The proceeds of the Notes were used for general corporate purposes. The Notes contain certain affirmative and negative covenants. As of September 30, 2020, the Company was in compliance with all of its debt covenants relating to the Notes. Shelf Agreements On November 27, 2018, the Company entered into seven uncommitted master note facilities (the "Shelf Agreements") that allow borrowings up to $700,000 in the aggregate. The Shelf Agreements have a term of 5 years and the average life of borrowings cannot exceed 15 years. The Company is required to comply with covenants similar to those contained in the Notes. As of September 30, 2020, the Company was in compliance with all of its covenants and had no outstanding borrowings under the Shelf Agreements. Fair Value of Debt At September 30, 2020 and December 31, 2019, the fair value of long-term debt, including the current portion, was approximate ly $785,579 a nd $721,494, respectively, which was determined using available market information and methodologies requiring judgment. The carrying value of this debt at such dates was $715,795 and $712,414, respectively. Since judgment is required in interpreting market information, the fair value of the debt is not necessarily the amount which could be realized in a current market exchange. |
RETIREMENT AND POSTRETIREMENT B
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS | RETIREMENT AND POSTRETIREMENT BENEFIT PLANS The components of total pension cost were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans Service cost $ 39 $ 718 $ 35 $ 697 $ 117 $ 2,216 $ 105 $ 2,126 Interest cost 3,346 673 4,652 903 11,447 2,052 13,958 2,761 Expected return on plan assets (6,009) (1,076) (6,245) (1,087) (17,431) (3,097) (18,735) (3,317) Amortization of prior service cost — 15 — 16 — 46 — 47 Amortization of net loss 459 468 413 720 865 1,563 1,240 1,877 Settlement charges (1) 3,188 — — — 6,522 — — — Defined benefit plans 1,023 798 (1,145) 1,249 1,520 2,780 (3,432) 3,494 Multi-employer plans — 274 — 227 — 800 — 717 Defined contribution plans 4,945 931 5,506 692 15,322 2,406 17,205 1,615 Total pension cost $ 5,968 $ 2,003 $ 4,361 $ 2,168 $ 16,842 $ 5,986 $ 13,773 $ 5,826 (1) Pension settlement charges resulting from lump sum pension payments in the three and nine months ended September 30, 2020. The defined benefit plan components of Total pension cost, other than service cost, are included in Other income (expense) in the Company's Consolidated Statements of Income. In March 2020, the Company approved an amendment to terminate the Lincoln Electric Company Retirement Annuity Program plan effective as of December 31, 2020. The Company provided notice to participants of the intent to terminate the plan and applied for a determination letter. Pension obligations will be distributed through a combination of lump sum payments to eligible plan participants and through the purchase of a group annuity contract. Upon settlement of the pension obligations, the Company will reclassify unrecognized actuarial gains or losses, currently recorded in AOCI, to the Company's Consolidated Statements of Income as settlement gains or charges in the second half of 2021. The Company anticipates the termination process will take approximately two years to complete. |
OTHER INCOME (EXPENSE)
OTHER INCOME (EXPENSE) | 9 Months Ended |
Sep. 30, 2020 | |
Other Income and Expenses [Abstract] | |
Other Income and Other Expense Disclosure [Text Block] | OTHER INCOME (EXPENSE) The components of Other income (expense) were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Equity earnings in affiliates $ 81 $ 206 $ 323 $ 3,002 Other components of net periodic pension (cost) income (1,064) 628 (1,967) 2,169 Other income (expense) (1) 2,045 8,819 2,812 12,441 Total Other income (expense) $ 1,062 $ 9,653 $ 1,168 $ 17,612 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company recognized $41,834 of tax expense on pretax income of $182,908, resulting in an effective income tax rate of 22.9% for the nine months ended September 30, 2020. The effective income tax rate was 20.4% for the nine months ended September 30, 2019. The increase in the effective tax rate for the nine months ended September 30, 2020, as compared with the same period in 2019, was primarily due to recording the tax expense associated with a valuation allowance in 2020, smaller tax benefits related to the vesting of stock based compensation in 2020 and income tax benefits for the settlement of tax items recorded in 2019. The U.S. Department of Treasury and the Internal Revenue Service released proposed and final regulations on July 20, 2020 pertaining to the Global Intangible Low-Taxed Income and other provisions of the Internal Revenue Code. The Company is assessing the impact of the regulations and potential for early election of the regulations for prior years. As of September 30, 2020, the Company had $20,481 of unrecognized tax benefits. If recognized, approximately $17,043 would be reflected as a component of income tax expense. The Company files income tax returns in the U.S. and various state, local and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local or non-U.S. income tax examinations by tax authorities for years before 2016. The Company is currently subject to U.S., various state and non-U.S. income tax audits. Unrecognized tax benefits are reviewed on an ongoing basis and are adjusted for changing facts and circumstances, including progress of tax audits and closing of statutes of limitations. Based on information currently available, management believes that additional audit activity could be completed and/or statutes of limitations may close relating to existing unrecognized tax benefits. It is reasonably possible there could be a reduction of $865 in previously unrecognized tax benefits by the end of the third quarter 2021. |
DERIVATIVES
DERIVATIVES | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | DERIVATIVES The Company uses derivative instruments to manage exposures to currency exchange rates, interest rates and commodity prices arising in the normal course of business. Both at inception and on an ongoing basis, the derivative instruments that qualify for hedge accounting are assessed as to their effectiveness, when applicable. Hedge ineffectiveness was immaterial in the nine months ended September 30, 2020 and 2019. The Company is subject to the credit risk of the counterparties to derivative instruments. Counterparties include a number of major banks and financial institutions. None of the concentrations of risk with any individual counterparty was considered significant at September 30, 2020. The Company does not expect any counterparties to fail to meet their obligations. Cash Flow Hedges Certain foreign currency forward contracts were qualified and designated as cash flow hedges. The dollar equivalent gross notional amount of these short-term contracts was $66,566 at September 30, 2020 and $59,982 at December 31, 2019. During March and April 2020, in anticipation of future debt issuance associated with the Notes referenced in Note 12, the Company entered into interest rate forward starting swap agreements to hedge the variability of future changes in interest rates. The forward starting swap agreements were qualified and designated as a cash flow hedge. The changes in fair value are recorded as part of AOCI, and upon completion of debt issuance and termination of the swaps, are amortized to interest expense over the life of the underlying debt. The dollar equivalent gross notional amount of the long-term contracts was $100,000 at September 30, 2020 and have a termination date of August 2025. Fair Value Hedges From time to time the company will enter into certain interest rate swap agreements that are qualified and designated as fair value hedges. At September 30, 2020, the Company had no interest rate swap agreements outstanding. The Company terminated $50,000 of interest rate swaps in the nine months ended September 30, 2020, which resulted in a gain of $6,629 that will be amortized to interest expense over the remaining life of the underlying debt. Net Investment Hedges The Company has cross currency swap agreements that are qualified and designated as net investment hedges. The dollar equivalent gross notional amount of these contracts is $50,000 as of September 30, 2020 and December 31, 2019, respectively. Derivatives Not Designated as Hedging Instruments The Company has certain foreign exchange forward contracts that are not designated as hedges. These derivatives are held as economic hedges of certain balance sheet exposures. The dollar equivalent gross notional amount of these contracts was $390,926 and $363,820 at September 30, 2020 and December 31, 2019, respectively. Fair values of derivative instruments in the Company’s Condensed Consolidated Balance Sheets follow: September 30, 2020 December 31, 2019 Derivatives by hedge designation Other Current Assets Other Current Liabilities Other Assets Other Liabilities Other Current Assets Other Current Liabilities Other Assets Other Liabilities Designated as hedging instruments: Foreign exchange contracts $ 1,034 $ 1,476 $ — $ — $ 1,288 $ 522 $ — $ — Interest rate swap agreements — — — — — — 2,964 — Forward starting swap agreements — — 1,876 — — — — — Cross currency swap agreements — — — 1,877 — — — 653 Not designated as hedging instruments: Foreign exchange contracts 3,067 2,872 — — 2,397 973 — — Total derivatives $ 4,101 $ 4,348 $ 1,876 $ 1,877 $ 3,685 $ 1,495 $ 2,964 $ 653 The effects of undesignated derivative instruments on the Company’s Consolidated Statements of Income consisted of the following: Three Months Ended September 30, Nine Months Ended September 30, Derivatives by hedge designation Classification of gain (loss) 2020 2019 2020 2019 Foreign exchange contracts Selling, general & administrative expenses $ 6,381 $ (710) $ (12,141) $ 5,707 The effects of designated hedges on AOCI and the Company’s Consolidated Statements of Income consisted of the following: Total gain (loss) recognized in AOCI, net of tax September 30, 2020 December 31, 2019 Foreign exchange contracts $ (468) $ 620 Forward starting swap agreements 1,407 — Net investment contracts 65 1,006 The Company expects a loss of $468 related to existing contracts to be reclassified from AOCI, net of tax, to earnings over the next 12 months as the hedged transactions are realized. Three Months Ended September 30, Nine Months Ended September 30, Derivative type Gain (loss) recognized in the Consolidated Statements of Income: 2020 2019 2020 2019 Foreign exchange contracts Sales $ (756) $ (15) $ (2,281) $ 760 Cost of goods sold (200) 117 67 366 |
FAIR VALUE
FAIR VALUE | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE The following table provides a summary of assets and liabilities as of September 30, 2020, measured at fair value on a recurring basis: Description Balance as of Quoted Prices Significant Significant Assets: Foreign exchange contracts $ 4,101 $ — $ 4,101 $ — Forward starting swap agreements 1,876 — 1,876 — Total assets $ 5,977 $ — $ 5,977 $ — Liabilities: Foreign exchange contracts 4,348 — 4,348 — Cross currency swap agreements 1,877 — 1,877 — Deferred compensation 29,728 — 29,728 — Total liabilities $ 35,953 $ — $ 35,953 $ — The following table provides a summary of assets and liabilities as of December 31, 2019, measured at fair value on a recurring basis: Description Balance as of December 31, 2019 Quoted Prices Significant Significant Assets: Foreign exchange contracts $ 3,685 $ — $ 3,685 $ — Interest rate swap agreements 2,964 — 2,964 — Total assets $ 6,649 $ — $ 6,649 $ — Liabilities: Foreign exchange contracts $ 1,495 $ — $ 1,495 $ — Cross currency swap agreements 653 — 653 — Contingent considerations 470 — — 470 Deferred compensation 29,170 — 29,170 — Total liabilities $ 31,788 $ — $ 31,318 $ 470 The Company’s derivative contracts are valued at fair value using the market approach. The Company measures the fair value of foreign exchange contracts and swap agreements using Level 2 inputs based on observable spot and forward rates in active markets. The deferred compensation liability is the Company’s obligation under its executive deferred compensation plan. The Company measures the fair value of the liability using the market values of the participants’ underlying investment fund elections. The fair value of Cash and cash equivalents, Accounts receivable, Short-term debt excluding the current portion of long-term debt and Trade accounts payable approximated book value due to the short-term nature of these instruments at both September 30, 2020 and December 31, 2019. The Company has various financial instruments, including cash and cash equivalents, short and long-term debt and forward contracts. While these financial instruments are subject to concentrations of credit risk, the Company has minimized this risk by entering into arrangements with a number of major banks and financial institutions and investing in several high-quality instruments. The Company does not expect any counterparties to fail to meet their obligations. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NEW ACCOUNTING PRONOUNCEMENTS | The following ASUs were adopted as of January 1, 2020, unless otherwise noted below: Standard Description ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20), issued August 2018. ASU 2018-14 modifies disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The ASU also requires an entity to disclose the weighted-average interest crediting rates for cash balance plans and to explain the reasons for significant gains and losses related to changes in the benefit obligation. These disclosure requirements will be reflected in the Notes to the consolidated financial statements in the Company's Form 10-K for the year ended December 31, 2020. ASU No. 2018-13, Fair Value Measurement (Topic 944) , issued August 2018. ASU 2018-13 eliminates, amends and adds disclosure requirements related to fair value measurements. The ASU removes disclosure requirements pertaining to the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels and the valuation processes for Level 3 fair value measurements. Refer to Note 17 to the consolidated financial statements for further details. ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), issued June 2016. ASU 2016-13 modifies disclosure and measurement requirements related to credit losses. Topic 326 requires that an entity estimate impairment of trade receivables based on expected losses rather than incurred losses. The adoption did not have a material impact on the Company's consolidated financial statements. ASU No. 2020-04, Reference Rate Reform (Topic 848) , issued March 2020. ASU 2020-04 provides temporary optional guidance to ease the financial reporting burden associated with the expected market transition from the London Inter-Bank Offer Rate ("LIBOR") to alternative reference rates. The Company adopted the ASU on March 12, 2020 and it is effective through December 31, 2022. As of September 30, 2020, the Company has not utilized any of the optional guidance; however, it will continue to assess the potential impact on the Company’s debt contracts and hedging relationships through the effective period. The Company is currently evaluating the impact on its financial statements of the following ASU: Standard Description ASU No. 2019-12, Income Taxes (Topic 740) , issued December 2019. ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The ASU is effective January 1, 2021 and early adoption is permitted. |
Segments | The Company's business units are aligned into three operating segments. The operating segments consist of Americas Welding, International Welding and The Harris Products Group. The Americas Welding segment includes welding operations in North and South America. The International Welding segment includes welding operations in Europe, Africa, Asia and Australia. The Harris Products Group includes the Company’s global oxy-fuel cutting, soldering and brazing businesses as well as its retail business in the United States. Segment performance is measured and resources are allocated based on a number of factors, the primary measure being the adjusted earnings before interest and income taxes (“Adjusted EBIT”) profit measure. EBIT is defined as Operating income plus Other income (expense). EBIT is adjusted for special items as determined by management such as the impact of rationalization activities, certain asset impairment charges and gains or losses on disposals of assets. |
Lessee, Leases [Policy Text Block] | The Company determines if an agreement is a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of the Company’s operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on information available at commencement date to present value the lease payments. The Company has operating leases for sales offices, manufacturing facilities, warehouses and distribution centers, transportation equipment, office equipment and information technology equipment. Some of these leases are noncancelable. Variable or short-term lease costs contained within the Company’s operating leases are not material. Most leases include one or more options to renew, which can extend the lease term from 1 year to 11 years or more. The exercise of lease renewal options is at the Company's sole discretion. Certain leases also include options to purchase the leased property. Leases with an initial term of 12 months or less are not recorded on the Company's Condensed Consolidated Balance sheets. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. |
Financial Instruments | The Company uses derivative instruments to manage exposures to currency exchange rates, interest rates and commodity prices arising in the normal course of business. Both at inception and on an ongoing basis, the derivative instruments that qualify for hedge accounting are assessed as to their effectiveness, when applicable. Hedge ineffectiveness was immaterial in the nine months ended September 30, 2020 and 2019. The Company is subject to the credit risk of the counterparties to derivative instruments. Counterparties include a number of major banks and financial institutions. None of the concentrations of risk with any individual counterparty was considered significant at September 30, 2020. The Company does not expect any counterparties to fail to meet their obligations. Cash Flow Hedges Certain foreign currency forward contracts were qualified and designated as cash flow hedges. The dollar equivalent gross notional amount of these short-term contracts was $66,566 at September 30, 2020 and $59,982 at December 31, 2019. During March and April 2020, in anticipation of future debt issuance associated with the Notes referenced in Note 12, the Company entered into interest rate forward starting swap agreements to hedge the variability of future changes in interest rates. The forward starting swap agreements were qualified and designated as a cash flow hedge. The changes in fair value are recorded as part of AOCI, and upon completion of debt issuance and termination of the swaps, are amortized to interest expense over the life of the underlying debt. The dollar equivalent gross notional amount of the long-term contracts was $100,000 at September 30, 2020 and have a termination date of August 2025. Fair Value Hedges From time to time the company will enter into certain interest rate swap agreements that are qualified and designated as fair value hedges. At September 30, 2020, the Company had no interest rate swap agreements outstanding. The Company terminated $50,000 of interest rate swaps in the nine months ended September 30, 2020, which resulted in a gain of $6,629 that will be amortized to interest expense over the remaining life of the underlying debt. Net Investment Hedges The Company has cross currency swap agreements that are qualified and designated as net investment hedges. The dollar equivalent gross notional amount of these contracts is $50,000 as of September 30, 2020 and December 31, 2019, respectively. Derivatives Not Designated as Hedging Instruments The Company has certain foreign exchange forward contracts that are not designated as hedges. These derivatives are held as economic hedges of certain balance sheet exposures. The dollar equivalent gross notional amount of these contracts was $390,926 and $363,820 at September 30, 2020 and December 31, 2019, respectively. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Disaggregation of Revenue [Abstract] | |
Disaggregation of Revenue [Table Text Block] | The following table presents the Company's Net sales disaggregated by product line: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Consumables $ 379,177 $ 420,980 $ 1,118,688 $ 1,308,788 Equipment 289,711 309,803 842,918 958,177 Net sales $ 668,888 $ 730,783 $ 1,961,606 $ 2,266,965 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Numerator: Net income $ 58,479 $ 72,461 $ 141,037 $ 229,393 Denominator (shares in 000's): Basic weighted average shares outstanding 59,426 61,380 59,655 62,282 Effect of dilutive securities - Stock options and awards 592 681 547 690 Diluted weighted average shares outstanding 60,018 62,061 60,202 62,972 Basic earnings per share $ 0.98 $ 1.18 $ 2.36 $ 3.68 Diluted earnings per share $ 0.97 $ 1.17 $ 2.34 $ 3.64 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of financial information for the reportable segments | The following table presents Adjusted EBIT by segment: Americas Welding International Welding The Harris Corporate / Consolidated Three Months Ended September 30, 2020 Net sales $ 371,535 $ 196,937 $ 100,416 $ — $ 668,888 Inter-segment sales 29,368 4,898 1,898 (36,164) — Total $ 400,903 $ 201,835 $ 102,314 $ (36,164) $ 668,888 Adjusted EBIT $ 59,120 $ 13,432 $ 17,587 $ (1,839) $ 88,300 Special items charge (gain) (1) 7,044 2,401 — — 9,445 EBIT $ 52,076 $ 11,031 $ 17,587 $ (1,839) $ 78,855 Interest income 293 Interest expense (5,845) Income before income taxes $ 73,303 Three Months Ended September 30, 2019 Net sales $ 443,521 $ 205,378 $ 81,884 $ — $ 730,783 Inter-segment sales 31,101 4,441 1,857 (37,399) — Total $ 474,622 $ 209,819 $ 83,741 $ (37,399) $ 730,783 Adjusted EBIT $ 74,110 $ 10,184 $ 11,038 $ (1,632) $ 93,700 Special items charge (gain) (2) — (4,497) — — (4,497) EBIT $ 74,110 $ 14,681 $ 11,038 $ (1,632) $ 98,197 Interest income 491 Interest expense (6,891) Income before income taxes $ 91,797 Nine Months Ended September 30, 2020 Net sales $ 1,123,299 $ 572,027 $ 266,280 $ — $ 1,961,606 Inter-segment sales 81,644 13,667 5,376 (100,687) — Total $ 1,204,943 $ 585,694 $ 271,656 $ (100,687) $ 1,961,606 Adjusted EBIT $ 176,524 $ 29,729 $ 41,792 $ (4,902) $ 243,143 Special items charge (gain) (1) 34,241 9,103 — — 43,344 EBIT $ 142,283 $ 20,626 $ 41,792 $ (4,902) $ 199,799 Interest income 1,576 Interest expense (18,467) Income before income taxes $ 182,908 Nine Months Ended September 30, 2019 Net sales $ 1,377,847 $ 635,770 $ 253,348 $ — $ 2,266,965 Inter-segment sales 95,300 12,838 5,837 (113,975) — Total $ 1,473,147 $ 648,608 $ 259,185 $ (113,975) $ 2,266,965 Adjusted EBIT $ 240,713 $ 38,699 $ 35,045 $ (8,643) $ 305,814 Special items charge (gain) (2) 3,115 (4,925) — 1,804 (6) EBIT $ 237,598 $ 43,624 $ 35,045 $ (10,447) $ 305,820 Interest income 2,047 Interest expense (19,668) Income before income taxes $ 288,199 (1) In the three months ended September 30, 2020, special items 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. In the nine months ended September 30, 2020, special items 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 related to an acquisition in International Welding and pension settlement charges of $6,522 in Americas Welding. (2) In the three months ended September 30, 2019, special items reflect Rationalization and asset impairment charges $1,495, amortization of step up in value of acquired inventories of $1,609 related to the acquisition of Askaynak and a gain on change in control of $7,601 related to the acquisition of Askaynak in International Welding. In the nine months ended September 30, 2019, special items reflect Rationalization and asset impairment charges of $1,716 and $4,621 in Americas Welding and International Welding, respectively, amortization of step up in value of acquired inventories of $1,399 in Americas Welding and $1,609 related to the acquisition of Askaynak in International Welding, gains on disposals of assets of $3,554 in International Welding and acquisition transaction and integration costs of $1,804 in Corporate / Eliminations related to the Air Liquide Welding acquisition and a gain on change in control of $7,601 related to the acquisition of Askaynak in International Welding. |
RATIONALIZATION AND ASSET IMP_2
RATIONALIZATION AND ASSET IMPAIRMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Reserve by Type of Cost [Table Text Block] | The following table summarizes the activity related to rationalization liabilities for the nine months ended September 30, 2020: Americas Welding International Welding Consolidated Balance, December 31, 2019 $ — $ 8,202 $ 8,202 Payments and other adjustments (5,367) (5,180) (10,547) Charged to expense 5,585 8,504 14,089 Balance, September 30, 2020 $ 218 $ 11,526 $ 11,744 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Tables) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | ||
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The following tables set forth the total changes in accumulated other comprehensive income (loss) ("AOCI") by component, net of taxes: Three Months Ended September 30, 2020 Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges Defined benefit pension plan activity Currency translation adjustment Total Balance at June 30, 2020 $ 365 $ (92,973) $ (263,012) $ (355,620) Other comprehensive income (loss) (104) (4,411) 2 13,004 3 8,489 Amounts reclassified from AOCI 743 1 3,107 2 — 3,850 Net current-period other 639 (1,304) 13,004 12,339 Balance at September 30, 2020 $ 1,004 $ (94,277) $ (250,008) $ (343,281) Three Months Ended September 30, 2019 Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges Defined benefit pension plan activity Currency translation adjustment Total Balance at June 30, 2019 $ 1,722 $ (80,171) $ (203,401) $ (281,850) Other comprehensive income (loss) (268) — (24,283) 3 (24,551) Amounts reclassified from AOCI (80) 1 613 2 — 533 Net current-period other (348) 613 (24,283) (24,018) Balance at September 30, 2019 $ 1,374 $ (79,558) $ (227,684) $ (305,868) (1) During the 2020 period, this AOCI reclassification is a component of Net sales of $(551) (net of tax of $(205)) and Cost of goods sold of $192 (net of tax of $8); during the 2019 period, the reclassification is a component of Net sales of $(15) and Cost of goods sold of $(95) (net of tax of $(22)). See Note 16 to the consolidated financial statements for additional details. (2) This AOCI component is included in the computation of net periodic pension costs (net of tax of $(776) and $536 during the three months ended September 30, 2020 and 2019, respectively). See Note 13 to the consolidated financial statements for additional details. | The following tables set forth the total changes in AOCI by component, net of taxes: Nine Months Ended September 30, 2020 Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges Defined benefit pension plan activity Currency translation adjustment Total Balance at December 31, 2019 $ 1,626 $ (70,546) $ (206,930) $ (275,850) Other comprehensive income (loss) (2,304) (30,538) 2 (43,078) 3 (75,920) Amounts reclassified from AOCI 1,682 1 6,807 2 — 8,489 Net current-period other (622) (23,731) (43,078) (67,431) Balance at September 30, 2020 $ 1,004 $ (94,277) $ (250,008) $ (343,281) Nine Months Ended September 30, 2019 Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges Defined benefit pension plan activity Currency translation adjustment Total Balance at December 31, 2018 $ 1,694 $ (82,049) $ (213,384) $ (293,739) Other comprehensive income (loss) 521 — (14,300) 3 (13,779) Amounts reclassified from AOCI (841) 1 2,491 2 — 1,650 Net current-period other (320) 2,491 (14,300) (12,129) Balance at September 30, 2019 $ 1,374 $ (79,558) $ (227,684) $ (305,868) (1) During the 2020 period, this AOCI reclassification is a component of Net sales of $(1,657) (net of tax of $(624)) and Cost of goods sold of $25 (net of tax of $(92)); during the 2019 period, this AOCI reclassification is a component of Net sales of $557 (net of tax of $203) and Cost of goods sold of $(284) (net of tax of $(82)). See Note 16 to the consolidated financial statements for additional details. (2) This AOCI component is included in the computation of net periodic pension costs (net of tax of $(8,303) and $673 during the nine months ended September 30, 2020 and 2019, respectively). See Note 13 to the consolidated financial statements for additional details. |
INVENTORY VALUATION Schedule of
INVENTORY VALUATION Schedule of Inventory, Current (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory [Line Items] | |
Schedule of Inventory, Current [Table Text Block] | Inventories in the Condensed Consolidated Balance Sheets are comprised of the following components: September 30, 2020 December 31, 2019 Raw materials $ 110,590 $ 116,716 Work-in-process 69,501 63,744 Finished goods 216,123 213,288 Total $ 396,214 $ 393,748 |
LEASES Schedule Of Leases In Ba
LEASES Schedule Of Leases In Balance Sheets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Schedule Of Leases In Balance Sheet [Table Text Block] | The table below summarizes the right-of-use assets and lease liabilities in the Company's Condensed Consolidated Balance sheets: Operating Leases Balance Sheet Classification September 30, 2020 December 31, 2019 Right-of-use assets Other assets $ 46,626 $ 51,533 Current liabilities Other current liabilities $ 12,821 $ 13,572 Noncurrent liabilities Other liabilities 36,949 39,076 Total lease liabilities $ 49,770 $ 52,648 |
LEASES Schedule of Maturities o
LEASES Schedule of Maturities of Lease Liabilities, Operating Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | The total future minimum lease payments for noncancelable operating leases were as follows: September 30, 2020 2020 $ 3,218 2021 13,619 2022 9,962 2023 8,233 2024 6,754 After 2025 14,544 Total lease payments $ 56,330 Less: Imputed interest (6,560) Operating lease liabilities $ 49,770 |
PRODUCT WARRANTY COSTS (Tables)
PRODUCT WARRANTY COSTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Product Warranties Disclosures [Abstract] | |
Schedule of the changes in the carrying amount of product warranty accruals | The changes in the carrying amount of product warranty accruals are as follows: Nine Months Ended September 30, 2020 2019 Balance at beginning of year $ 20,650 $ 19,778 Accruals for warranties 13,629 12,494 Settlements (10,699) (11,787) Foreign currency translation and other adjustments (126) (125) Balance at September 30 $ 23,454 $ 20,360 |
RETIREMENT AND POSTRETIREMENT_2
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
Components of total pension cost | The components of total pension cost were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans Service cost $ 39 $ 718 $ 35 $ 697 $ 117 $ 2,216 $ 105 $ 2,126 Interest cost 3,346 673 4,652 903 11,447 2,052 13,958 2,761 Expected return on plan assets (6,009) (1,076) (6,245) (1,087) (17,431) (3,097) (18,735) (3,317) Amortization of prior service cost — 15 — 16 — 46 — 47 Amortization of net loss 459 468 413 720 865 1,563 1,240 1,877 Settlement charges (1) 3,188 — — — 6,522 — — — Defined benefit plans 1,023 798 (1,145) 1,249 1,520 2,780 (3,432) 3,494 Multi-employer plans — 274 — 227 — 800 — 717 Defined contribution plans 4,945 931 5,506 692 15,322 2,406 17,205 1,615 Total pension cost $ 5,968 $ 2,003 $ 4,361 $ 2,168 $ 16,842 $ 5,986 $ 13,773 $ 5,826 (1) Pension settlement charges resulting from lump sum pension payments in the three and nine months ended September 30, 2020. |
OTHER INCOME (EXPENSE) (Tables)
OTHER INCOME (EXPENSE) (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Nonoperating Income (Expense) [Table Text Block] | The components of Other income (expense) were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Equity earnings in affiliates $ 81 $ 206 $ 323 $ 3,002 Other components of net periodic pension (cost) income (1,064) 628 (1,967) 2,169 Other income (expense) (1) 2,045 8,819 2,812 12,441 Total Other income (expense) $ 1,062 $ 9,653 $ 1,168 $ 17,612 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair values of derivative instruments on the Company's Consolidated Balance Sheets | Fair values of derivative instruments in the Company’s Condensed Consolidated Balance Sheets follow: September 30, 2020 December 31, 2019 Derivatives by hedge designation Other Current Assets Other Current Liabilities Other Assets Other Liabilities Other Current Assets Other Current Liabilities Other Assets Other Liabilities Designated as hedging instruments: Foreign exchange contracts $ 1,034 $ 1,476 $ — $ — $ 1,288 $ 522 $ — $ — Interest rate swap agreements — — — — — — 2,964 — Forward starting swap agreements — — 1,876 — — — — — Cross currency swap agreements — — — 1,877 — — — 653 Not designated as hedging instruments: Foreign exchange contracts 3,067 2,872 — — 2,397 973 — — Total derivatives $ 4,101 $ 4,348 $ 1,876 $ 1,877 $ 3,685 $ 1,495 $ 2,964 $ 653 |
Schedule of effects of undesignated derivative instruments on the Company's Consolidated Statements of Income | The effects of undesignated derivative instruments on the Company’s Consolidated Statements of Income consisted of the following: Three Months Ended September 30, Nine Months Ended September 30, Derivatives by hedge designation Classification of gain (loss) 2020 2019 2020 2019 Foreign exchange contracts Selling, general & administrative expenses $ 6,381 $ (710) $ (12,141) $ 5,707 |
Schedule of effects of designated hedges on AOCI and the entity's Consolidated Statements of Income | The effects of designated hedges on AOCI and the Company’s Consolidated Statements of Income consisted of the following: Total gain (loss) recognized in AOCI, net of tax September 30, 2020 December 31, 2019 Foreign exchange contracts $ (468) $ 620 Forward starting swap agreements 1,407 — Net investment contracts 65 1,006 The Company expects a loss of $468 related to existing contracts to be reclassified from AOCI, net of tax, to earnings over the next 12 months as the hedged transactions are realized. Three Months Ended September 30, Nine Months Ended September 30, Derivative type Gain (loss) recognized in the Consolidated Statements of Income: 2020 2019 2020 2019 Foreign exchange contracts Sales $ (756) $ (15) $ (2,281) $ 760 Cost of goods sold (200) 117 67 366 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Summary of assets and liabilities measured at fair value on a recurring basis | The following table provides a summary of assets and liabilities as of September 30, 2020, measured at fair value on a recurring basis: Description Balance as of Quoted Prices Significant Significant Assets: Foreign exchange contracts $ 4,101 $ — $ 4,101 $ — Forward starting swap agreements 1,876 — 1,876 — Total assets $ 5,977 $ — $ 5,977 $ — Liabilities: Foreign exchange contracts 4,348 — 4,348 — Cross currency swap agreements 1,877 — 1,877 — Deferred compensation 29,728 — 29,728 — Total liabilities $ 35,953 $ — $ 35,953 $ — The following table provides a summary of assets and liabilities as of December 31, 2019, measured at fair value on a recurring basis: Description Balance as of December 31, 2019 Quoted Prices Significant Significant Assets: Foreign exchange contracts $ 3,685 $ — $ 3,685 $ — Interest rate swap agreements 2,964 — 2,964 — Total assets $ 6,649 $ — $ 6,649 $ — Liabilities: Foreign exchange contracts $ 1,495 $ — $ 1,495 $ — Cross currency swap agreements 653 — 653 — Contingent considerations 470 — — 470 Deferred compensation 29,170 — 29,170 — Total liabilities $ 31,788 $ — $ 31,318 $ 470 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Basis of Presentation [Line Items] | ||||
Other components of net periodic pension (cost) income | $ (1,064) | $ 628 | $ (1,967) | $ 2,169 |
REVENUE RECOGNITION (Disaggrega
REVENUE RECOGNITION (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 668,888 | $ 730,783 | $ 1,961,606 | $ 2,266,965 |
Welding Equipment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 289,711 | 309,803 | 842,918 | 958,177 |
Welding Consumables [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 379,177 | $ 420,980 | $ 1,118,688 | $ 1,308,788 |
REVENUE RECOGNITION (Textual) (
REVENUE RECOGNITION (Textual) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Percentage Net Sales Over Time (less than) | 10.00% | |
Customer Advances, Current | $ 15,749 | $ 16,040 |
Billings in Excess of Cost, Current | 14,090 | 16,274 |
Unbilled Contracts Receivable | $ 29,688 | $ 33,566 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator: | ||||
Net income (loss) | $ 58,479 | $ 72,461 | $ 141,037 | $ 229,393 |
Denominator (shares in 000's): | ||||
Basic weighted average shares outstanding (in shares) | 59,426,000 | 61,380,000 | 59,655,000 | 62,282,000 |
Effect of dilutive securities - Stock options and awards (in shares) | 592,000 | 681,000 | 547,000 | 690,000 |
Diluted weighted average shares outstanding (in shares) | 60,018,000 | 62,061,000 | 60,202,000 | 62,972,000 |
Earnings (loss) per share | ||||
Basic earnings per share (Note 3) | $ 0.98 | $ 1.18 | $ 2.36 | $ 3.68 |
Diluted earnings per share (Note 3) | $ 0.97 | $ 1.17 | $ 2.34 | $ 3.64 |
Anti-dilutive shares excluded from the computation of diluted earnings per share | 557,198 | 548,049 | 547,329 | 514,402 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Acquisitions | ||
Payments to Acquire Businesses, Net of Cash Acquired | $ 0 | $ 136,735 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||||
Sep. 30, 2020USD ($)$ / shares | Jun. 30, 2020$ / shares | Mar. 31, 2020$ / shares | Sep. 30, 2019USD ($)$ / shares | Jun. 30, 2019$ / shares | Mar. 31, 2019$ / shares | Sep. 30, 2020USD ($)segment$ / shares | Sep. 30, 2019USD ($)$ / shares | |||||
Financial information for the reportable segments | ||||||||||||
Rationalization and asset impairment charges (Note 6) | $ 6,257 | $ 1,495 | $ 36,016 | $ 6,337 | ||||||||
Number of operating segments | segment | 3 | |||||||||||
Net sales | 668,888 | 730,783 | $ 1,961,606 | 2,266,965 | ||||||||
Inter-segment sales | 0 | 0 | 0 | 0 | ||||||||
Total | 668,888 | 730,783 | 1,961,606 | 2,266,965 | ||||||||
EBIT, as adjusted | 88,300 | 93,700 | 243,143 | 305,814 | ||||||||
Special items charge (gain) | 9,445 | [1] | (4,497) | [2] | 43,344 | [1] | (6) | [2] | ||||
Business Combination, Step Acquisition, Equity Interest in Acquiree, Remeasurement Gain (Loss), Net | 0 | 7,601 | ||||||||||
EBIT | 78,855 | 98,197 | 199,799 | 305,820 | ||||||||
Interest income | 293 | 491 | 1,576 | 2,047 | ||||||||
Interest expense | (5,845) | (6,891) | (18,467) | (19,668) | ||||||||
Income before income taxes | $ 73,303 | $ 91,797 | $ 182,908 | $ 288,199 | ||||||||
Cash dividends declared per share | $ / shares | $ 0.49 | $ 0.49 | $ 0.49 | $ 0.47 | $ 0.47 | $ 0.47 | $ 1.47 | $ 1.41 | ||||
The Harris Products Group | ||||||||||||
Financial information for the reportable segments | ||||||||||||
Net sales | $ 100,416 | $ 81,884 | $ 266,280 | $ 253,348 | ||||||||
Inter-segment sales | 1,898 | 1,857 | 5,376 | 5,837 | ||||||||
Total | 102,314 | 83,741 | 271,656 | 259,185 | ||||||||
EBIT, as adjusted | 17,587 | 11,038 | 41,792 | 35,045 | ||||||||
Special items charge (gain) | 0 | [1] | 0 | [2] | 0 | [1] | 0 | [2] | ||||
EBIT | 17,587 | 11,038 | 41,792 | 35,045 | ||||||||
Corporate / Eliminations | ||||||||||||
Financial information for the reportable segments | ||||||||||||
Acquisition Transaction and Integration Costs | 1,804 | |||||||||||
Net sales | 0 | 0 | 0 | 0 | ||||||||
Inter-segment sales | (36,164) | (37,399) | (100,687) | (113,975) | ||||||||
Total | (36,164) | (37,399) | (100,687) | (113,975) | ||||||||
EBIT, as adjusted | (1,839) | (1,632) | (4,902) | (8,643) | ||||||||
Special items charge (gain) | 0 | [1] | 0 | [2] | 0 | [1] | 1,804 | [2] | ||||
EBIT | (1,839) | (1,632) | (4,902) | (10,447) | ||||||||
Americas Welding | ||||||||||||
Financial information for the reportable segments | ||||||||||||
Rationalization and asset impairment charges (Note 6) | 3,856 | 27,719 | 1,716 | |||||||||
Net sales | 371,535 | 443,521 | 1,123,299 | 1,377,847 | ||||||||
Inter-segment sales | 29,368 | 31,101 | 81,644 | 95,300 | ||||||||
Total | 400,903 | 474,622 | 1,204,943 | 1,473,147 | ||||||||
EBIT, as adjusted | 59,120 | 74,110 | 176,524 | 240,713 | ||||||||
Special items charge (gain) | 7,044 | [1] | 0 | [2] | 34,241 | [1] | 3,115 | [2] | ||||
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Gain (Loss) Due to Settlement and Curtailment | (3,188) | (6,522) | ||||||||||
Business Combination, Inventory Step Up | 1,399 | |||||||||||
EBIT | 52,076 | 74,110 | 142,283 | 237,598 | ||||||||
International Welding | ||||||||||||
Financial information for the reportable segments | ||||||||||||
Rationalization and asset impairment charges (Note 6) | 2,401 | 1,495 | 8,297 | 4,621 | ||||||||
Net sales | 196,937 | 205,378 | 572,027 | 635,770 | ||||||||
Inter-segment sales | 4,898 | 4,441 | 13,667 | 12,838 | ||||||||
Total | 201,835 | 209,819 | 585,694 | 648,608 | ||||||||
EBIT, as adjusted | 13,432 | 10,184 | 29,729 | 38,699 | ||||||||
Special items charge (gain) | 2,401 | [1] | (4,497) | [2] | 9,103 | [1] | (4,925) | [2] | ||||
Business Combination, Inventory Step Up | 1,609 | 806 | 1,609 | |||||||||
Business Combination, Step Acquisition, Equity Interest in Acquiree, Remeasurement Gain (Loss), Net | 7,601 | 7,601 | ||||||||||
Gain (Loss) on Disposition of Assets | 3,554 | |||||||||||
EBIT | $ 11,031 | $ 14,681 | $ 20,626 | $ 43,624 | ||||||||
[1] | In the three months ended September 30, 2020, special items 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. In the nine months ended September 30, 2020, special items 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 related to an acquisition in International Welding and pension settlement charges of $6,522 in Americas Welding. | |||||||||||
[2] | In the three months ended September 30, 2019, special items reflect Rationalization and asset impairment charges $1,495, amortization of step up in value of acquired inventories of $1,609 related to the acquisition of Askaynak and a gain on change in control of $7,601 related to the acquisition of Askaynak in International Welding. In the nine months ended September 30, 2019, special items reflect Rationalization and asset impairment charges of $1,716 and $4,621 in Americas Welding and International Welding, respectively, amortization of step up in value of acquired inventories of $1,399 in Americas Welding and $1,609 related to the acquisition of Askaynak in International Welding, gains on disposals of assets of $3,554 in International Welding and acquisition transaction and integration costs of $1,804 in Corporate / Eliminations related to the Air Liquide Welding acquisition and a gain on change in control of $7,601 related to the acquisition of Askaynak in International Welding. |
RATIONALIZATION AND ASSET IMP_3
RATIONALIZATION AND ASSET IMPAIRMENTS Summary of Activity Related to Rationalization Liabilities by Segment (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Rationalization and Asset Impairments | ||
Restructuring Reserve | $ 11,744 | $ 8,202 |
Payments and other adjustments | (10,547) | |
Business Exit Costs | 14,089 | |
Americas Welding | ||
Rationalization and Asset Impairments | ||
Restructuring Reserve | 218 | 0 |
Payments and other adjustments | (5,367) | |
Business Exit Costs | 5,585 | |
International Welding | ||
Rationalization and Asset Impairments | ||
Restructuring Reserve | 11,526 | $ 8,202 |
Payments and other adjustments | (5,180) | |
Business Exit Costs | $ 8,504 |
RATIONALIZATION AND ASSET IMP_4
RATIONALIZATION AND ASSET IMPAIRMENTS (Textual) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Rationalization and Asset Impairments | |||||
Rationalization and asset impairment charges (Note 6) | $ 6,257 | $ 1,495 | $ 36,016 | $ 6,337 | |
Business Exit Costs | 14,089 | ||||
Restructuring Reserve | 11,744 | 11,744 | $ 8,202 | ||
Americas Welding 2020 Plans [Member] | |||||
Rationalization and Asset Impairments | |||||
Restructuring Reserve | 218 | 218 | |||
International Welding 2020 Plans [Member] | |||||
Rationalization and Asset Impairments | |||||
Restructuring Reserve | 6,592 | 6,592 | |||
International Welding | |||||
Rationalization and Asset Impairments | |||||
Rationalization and asset impairment charges (Note 6) | 2,401 | $ 1,495 | 8,297 | $ 4,621 | |
Business Exit Costs | 8,504 | ||||
Restructuring Reserve | 11,526 | 11,526 | $ 8,202 | ||
International Welding 2019 Plans [Member] | |||||
Rationalization and Asset Impairments | |||||
Restructuring Reserve | $ 4,934 | $ 4,934 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |||||
Accumulated Other Comprehensive Loss Income [Line Items] | ||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ (343,281) | $ (305,868) | $ (343,281) | $ (305,868) | $ (355,620) | $ (275,850) | $ (281,850) | $ (293,739) | ||||
Income Tax Expense (Benefit) | (14,797) | (19,340) | (41,834) | (58,832) | ||||||||
Cost of Goods and Services Sold | 453,501 | 492,432 | 1,319,519 | 1,500,312 | ||||||||
Net sales | 668,888 | 730,783 | 1,961,606 | 2,266,965 | ||||||||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 8,489 | (24,551) | (75,920) | (13,779) | ||||||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 3,850 | (533) | 8,489 | 1,650 | ||||||||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | 12,339 | (24,018) | (67,431) | (12,129) | ||||||||
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member] | ||||||||||||
Accumulated Other Comprehensive Loss Income [Line Items] | ||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | 1,004 | 1,374 | 1,004 | 1,374 | 365 | 1,626 | 1,722 | 1,694 | ||||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | (104) | (268) | (2,304) | 521 | ||||||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 743 | [1] | (80) | [1] | 1,682 | [2] | (841) | [2] | ||||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | 639 | (348) | (622) | (320) | ||||||||
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | ||||||||||||
Accumulated Other Comprehensive Loss Income [Line Items] | ||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (94,277) | (79,558) | (94,277) | (79,558) | (92,973) | (70,546) | (80,171) | (82,049) | ||||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | (4,411) | [3] | 0 | (30,538) | 0 | |||||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 3,107 | [3] | (613) | [3] | 6,807 | [4] | 2,491 | [4] | ||||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | (1,304) | 613 | (23,731) | 2,491 | ||||||||
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | ||||||||||||
Accumulated Other Comprehensive Loss Income [Line Items] | ||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (250,008) | (227,684) | (250,008) | (227,684) | $ (263,012) | $ (206,930) | $ (203,401) | $ (213,384) | ||||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 13,004 | [5] | (24,283) | [5] | (43,078) | [6] | (14,300) | [6] | ||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | 0 | 0 | 0 | ||||||||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | 13,004 | (24,283) | (43,078) | (14,300) | ||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member] | Sales | ||||||||||||
Accumulated Other Comprehensive Loss Income [Line Items] | ||||||||||||
Income Tax Expense (Benefit) | 205 | 624 | (203) | |||||||||
Net sales | (551) | (15) | (1,657) | 557 | ||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member] | Cost of Sales [Member] | ||||||||||||
Accumulated Other Comprehensive Loss Income [Line Items] | ||||||||||||
Income Tax Expense (Benefit) | (8) | 22 | (92) | (82) | ||||||||
Cost of Goods and Services Sold | 192 | (95) | 25 | (284) | ||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | ||||||||||||
Accumulated Other Comprehensive Loss Income [Line Items] | ||||||||||||
Income Tax Expense (Benefit) | 776 | (536) | 8,303 | (673) | ||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | ||||||||||||
Accumulated Other Comprehensive Loss Income [Line Items] | ||||||||||||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest | $ 35 | $ 258 | $ (23) | $ 260 | ||||||||
[1] | During the 2020 period, this AOCI reclassification is a component of Net sales of $(551) (net of tax of $(205)) and Cost of goods sold of $192 (net of tax of $8); during the 2019 period, the reclassification is a component of Net sales of $(15) and Cost of goods sold of $(95) (net of tax of $(22)). See Note 16 to the consolidated financial statements for additional details. | |||||||||||
[2] | During the 2020 period, this AOCI reclassification is a component of Net sales of $(1,657) (net of tax of $(624)) and Cost of goods sold of $25 (net of tax of $(92)); during the 2019 period, this AOCI reclassification is a component of Net sales of $557 (net of tax of $203) and Cost of goods sold of $(284) (net of tax of $(82)). See Note 16 to the consolidated financial statements for additional details. | |||||||||||
[3] | This AOCI component is included in the computation of net periodic pension costs (net of tax of $(776) and $536 during the three months ended September 30, 2020 and 2019, respectively). See Note 13 to the consolidated financial statements for additional details. | |||||||||||
[4] | This AOCI component is included in the computation of net periodic pension costs (net of tax of $(8,303) and $673 during the nine months ended September 30, 2020 and 2019, respectively). See Note 13 to the consolidated financial statements for additional details. | |||||||||||
[5] | The Other comprehensive income (loss) before reclassifications excludes $35 and $258 attributable to Non-controlling interests in the three months ended September 30, 2020 and 2019, respectively. | |||||||||||
[6] | The Other comprehensive income (loss) before reclassifications excludes $(23) and $260 attributable to Non-controlling interests in the nine months ended September 30, 2020 and 2019, respectively. |
COMMON STOCK REPURCHASE PROGR_2
COMMON STOCK REPURCHASE PROGRAM (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2020 | Feb. 12, 2020 | |
COMMON STOCK REPURCHASE PROGRAM [Abstract] | ||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 55,000,000 | 10,000,000 |
Purchase of shares for treasury (in shares) | 1,400,000 | |
Treasury Stock Acquired, Average Cost Per Share | $ 80.22 | |
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased | 11,500,000 |
INVENTORY VALUATION (Details)
INVENTORY VALUATION (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory [Line Items] | ||
Percentage of LIFO Inventory | 35.00% | 36.00% |
Raw materials | $ 110,590 | $ 116,716 |
Work-in-process | 69,501 | 63,744 |
Finished goods | 216,123 | 213,288 |
Inventory, Net | 396,214 | 393,748 |
Excess of current cost over LIFO cost | $ 76,204 | $ 75,292 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Lessee, Lease, Description [Line Items] | |||||
Operating Lease, Weighted Average Remaining Lease Term | 7 years 1 month 6 days | 7 years 1 month 6 days | |||
Lease, Cost | $ 5,655 | $ 6,290 | $ 17,665 | $ 18,725 | |
Operating Lease, Payments | 3,733 | 4,528 | 11,727 | 13,761 | |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 214 | $ 1,550 | $ 2,249 | $ 16,223 | |
Operating Lease, Weighted Average Discount Rate, Percent | 3.50% | 3.50% | |||
Leases, Operating [Abstract] | |||||
Operating Lease, Right-of-Use Asset | $ 46,626 | $ 46,626 | $ 51,533 | ||
Operating Lease, Liability, Current | 12,821 | 12,821 | 13,572 | ||
Operating Lease, Liability, Noncurrent | 36,949 | 36,949 | 39,076 | ||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |||||
2020 | 3,218 | 3,218 | |||
2021 | 13,619 | 13,619 | |||
2022 | 9,962 | 9,962 | |||
2023 | 8,233 | 8,233 | |||
2024 | 6,754 | 6,754 | |||
After 2025 | 14,544 | 14,544 | |||
Total lease payments | 56,330 | 56,330 | |||
Less: Imputed interest | (6,560) | (6,560) | |||
Operating lease liabilities | $ 49,770 | $ 49,770 | $ 52,648 | ||
Minimum [Member] | |||||
Lessee, Lease, Description [Line Items] | |||||
Lessee, Operating Lease, Renewal Term | 1 year | 1 year | |||
Maximum | |||||
Lessee, Lease, Description [Line Items] | |||||
Lessee, Operating Lease, Renewal Term | 11 years | 11 years |
PRODUCT WARRANTY COSTS (Details
PRODUCT WARRANTY COSTS (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Changes in the carrying amount of product warranty accruals | ||
Balance at beginning of year | $ 20,650 | $ 19,778 |
Accruals for warranties | 13,629 | 12,494 |
Settlements | (10,699) | (11,787) |
Standard And Extended Product Warranty Accrual Foreign Currency Translation Gain Loss and Other Adjustments | (126) | (125) |
Balance at end of period | $ 23,454 | $ 20,360 |
DEBT (Details)
DEBT (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||||
Oct. 31, 2016 | Apr. 30, 2015 | Sep. 30, 2020 | Dec. 31, 2019 | Oct. 20, 2016 | Apr. 01, 2015 | |
Debt | ||||||
Borrowings on Line of Credit | $ 1,147 | $ 34,969 | ||||
Revolving credit agreement | ||||||
Debt | ||||||
Borrowing capacity under the line of credit | $ 400,000 | |||||
Covenant compliance description | As of September 30, 2020, the Company was in compliance with all of its covenants | |||||
Additional increase in borrowing capacity of the line of credit available at the entity's option | $ 100,000 | |||||
Debt Instrument, Term | 5 years | |||||
Senior Notes [Member] | ||||||
Debt | ||||||
Debt, Weighted Average Interest Rate | 3.30% | |||||
Debt Instrument, Covenant Compliance | As of September 30, 2020, the Company was in compliance with all of its debt covenants | |||||
Senior Notes 2015 [Member] | ||||||
Debt | ||||||
Debt Instrument, Initiation Date | Apr. 1, 2015 | |||||
Debt Instrument, Face Amount | $ 350,000 | |||||
Senior Notes 2016 [Member] | ||||||
Debt | ||||||
Debt Instrument, Initiation Date | Oct. 20, 2016 | |||||
Debt Instrument, Face Amount | $ 350,000 | |||||
Weighted Average [Member] | ||||||
Debt | ||||||
Debt Instrument, Term | 13 years 7 months 6 days | |||||
Private Placement [Member] | ||||||
Debt | ||||||
Debt Instrument, Term | 5 years | |||||
Debt Instrument, Covenant Compliance | As of September 30, 2020, the Company was in compliance with all of its covenants | |||||
Debt Instrument, Unused Borrowing Capacity, Amount | $ 700,000 | |||||
us-gaap_OtherLinesOfCredit [Member] | ||||||
Debt | ||||||
Borrowing capacity under the line of credit | $ 50,000 | |||||
Covenant compliance description | As of September 30, 2020 the Company was in compliance with all of its covenants | |||||
Line of Credit, Current | $ 1,039 | |||||
Minimum [Member] | ||||||
Debt | ||||||
Lessee, Operating Lease, Renewal Term | 1 year | |||||
Minimum [Member] | Senior Notes [Member] | ||||||
Debt | ||||||
Debt Instrument, Maturity Date | Aug. 20, 2025 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 2.75% | |||||
Debt Instrument, Face Amount | $ 50,000 | |||||
Maximum | ||||||
Debt | ||||||
Lessee, Operating Lease, Renewal Term | 11 years | |||||
Maximum | Senior Notes [Member] | ||||||
Debt | ||||||
Debt Instrument, Maturity Date | Apr. 1, 2045 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 4.02% | |||||
Debt Instrument, Face Amount | $ 100,000 | |||||
Maximum | Private Placement [Member] | ||||||
Debt | ||||||
Debt Instrument, Term | 15 years |
DEBT Fair Value of Debt (Detail
DEBT Fair Value of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Fair value of long-term debt | $ 785,579 | $ 721,494 |
Debt and Capital Lease Obligations, Excluding Short-term Borrowings | $ 715,795 | $ 712,414 |
RETIREMENT AND POSTRETIREMENT_3
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Domestic Plan [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Service cost | $ 39 | $ 35 | $ 117 | $ 105 | |
Interest cost | 3,346 | 4,652 | 11,447 | 13,958 | |
Expected return on plan assets | (6,009) | (6,245) | (17,431) | (18,735) | |
Amortization of prior service cost | 0 | 0 | 0 | 0 | |
Amortization of net loss | 459 | 413 | 865 | 1,240 | |
Settlement charges (1) | [1] | 3,188 | 0 | 6,522 | 0 |
Defined benefit plans | 1,023 | (1,145) | 1,520 | (3,432) | |
Multi-employer plans | 0 | 0 | 0 | 0 | |
Defined contribution plans | 4,945 | 5,506 | 15,322 | 17,205 | |
Total pension cost | 5,968 | 4,361 | 16,842 | 13,773 | |
Foreign Plan [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Service cost | 718 | 697 | 2,216 | 2,126 | |
Interest cost | 673 | 903 | 2,052 | 2,761 | |
Expected return on plan assets | (1,076) | (1,087) | (3,097) | (3,317) | |
Amortization of prior service cost | 15 | 16 | 46 | 47 | |
Amortization of net loss | 468 | 720 | 1,563 | 1,877 | |
Settlement charges (1) | [1] | 0 | 0 | 0 | 0 |
Defined benefit plans | 798 | 1,249 | 2,780 | 3,494 | |
Multi-employer plans | 274 | 227 | 800 | 717 | |
Defined contribution plans | 931 | 692 | 2,406 | 1,615 | |
Total pension cost | 2,003 | $ 2,168 | 5,986 | $ 5,826 | |
Americas Welding | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Settlement charges (1) | $ 3,188 | $ 6,522 | |||
[1] | Pension settlement charges resulting from lump sum pension payments in the three and nine months ended September 30, 2020. |
OTHER INCOME (EXPENSE) (Details
OTHER INCOME (EXPENSE) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Other Income and Expenses [Abstract] | ||||
Equity earnings in affiliates | $ 81 | $ 206 | $ 323 | $ 3,002 |
Other income (expense) (1) | 2,045 | 8,819 | 2,812 | 12,441 |
Other components of net periodic pension (cost) income | (1,064) | 628 | (1,967) | 2,169 |
Total Other income (expense) | $ 1,062 | 9,653 | 1,168 | 17,612 |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Remeasurement Gain (Loss), Net | 0 | 7,601 | ||
Acquisitions | ||||
Business Combination, Step Acquisition, Equity Interest in Acquiree, Remeasurement Gain (Loss), Net | $ 0 | 7,601 | ||
International Welding | ||||
Other Income and Expenses [Abstract] | ||||
Business Combination, Step Acquisition, Equity Interest in Acquiree, Remeasurement Gain (Loss), Net | 7,601 | 7,601 | ||
Acquisitions | ||||
Business Combination, Step Acquisition, Equity Interest in Acquiree, Remeasurement Gain (Loss), Net | $ 7,601 | $ 7,601 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income taxes (Note 15) | $ 14,797 | $ 19,340 | $ 41,834 | $ 58,832 |
Pre-tax income | 73,303 | $ 91,797 | $ 182,908 | $ 288,199 |
Effective income tax rate (as a percent) | 22.90% | 20.40% | ||
Unrecognized tax benefits | 20,481 | $ 20,481 | ||
Unrecognized tax benefits that, if recognized, would be reflected as a component of income tax expense | 17,043 | 17,043 | ||
Reasonably possible reduction in prior years' unrecognized tax benefits during the next twelve months | $ 865 | $ 865 |
DERIVATIVES (Fair Value of Deri
DERIVATIVES (Fair Value of Derivative Instruments) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | $ 4,101 | $ 3,685 |
Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 4,348 | 1,495 |
Other Noncurrent Assets [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 1,876 | 2,964 |
Other Liabilities [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 1,877 | 653 |
Designated as Hedging Instrument | Foreign exchange contracts | Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 1,034 | 1,288 |
Designated as Hedging Instrument | Foreign exchange contracts | Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 1,476 | 522 |
Designated as Hedging Instrument | Foreign exchange contracts | Other Noncurrent Assets [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 0 | 0 |
Designated as Hedging Instrument | Foreign exchange contracts | Other Liabilities [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 0 | 0 |
Designated as Hedging Instrument | Interest Rate Swap [Member] | Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 0 | 0 |
Designated as Hedging Instrument | Interest Rate Swap [Member] | Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 0 | 0 |
Designated as Hedging Instrument | Interest Rate Swap [Member] | Other Noncurrent Assets [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 0 | 2,964 |
Designated as Hedging Instrument | Interest Rate Swap [Member] | Other Liabilities [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 0 | 0 |
Designated as Hedging Instrument | Forward Contracts [Member] | Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 0 | 0 |
Designated as Hedging Instrument | Forward Contracts [Member] | Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 0 | 0 |
Designated as Hedging Instrument | Forward Contracts [Member] | Other Noncurrent Assets [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 1,876 | 0 |
Designated as Hedging Instrument | Forward Contracts [Member] | Other Liabilities [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 0 | 0 |
Designated as Hedging Instrument | Cross Currency Interest Rate Contract [Member] | Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 0 | 0 |
Designated as Hedging Instrument | Cross Currency Interest Rate Contract [Member] | Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 0 | 0 |
Designated as Hedging Instrument | Cross Currency Interest Rate Contract [Member] | Other Noncurrent Assets [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 0 | 0 |
Designated as Hedging Instrument | Cross Currency Interest Rate Contract [Member] | Other Liabilities [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 1,877 | 653 |
Not designated as hedging instruments | Foreign exchange contracts | Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 3,067 | 2,397 |
Not designated as hedging instruments | Foreign exchange contracts | Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 2,872 | 973 |
Not designated as hedging instruments | Foreign exchange contracts | Other Noncurrent Assets [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 0 | 0 |
Not designated as hedging instruments | Foreign exchange contracts | Other Liabilities [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | $ 0 | $ 0 |
DERIVATIVES (Income Statement I
DERIVATIVES (Income Statement Impact) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Foreign exchange contracts | Selling, general and administrative expense | ||||
Effects of undesignated cash flow hedges on the entity's Consolidated Statements of Income | ||||
Gains (loss) recognized in income | $ 6,381 | $ (710) | $ (12,141) | $ 5,707 |
DERIVATIVES (AOCI Impact) (Deta
DERIVATIVES (AOCI Impact) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Foreign exchange contracts | |||||
Effects of designated cash flow hedges on the entity's AOCI | |||||
Gain (loss) recognized in AOCI, net of tax | $ (468) | $ 620 | |||
Foreign exchange contracts | Sales | |||||
Effects of designated cash flow hedges on the entity's AOCI | |||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ (756) | $ (15) | (2,281) | $ 760 | |
Foreign exchange contracts | Cost of goods sold | |||||
Effects of designated cash flow hedges on the entity's AOCI | |||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ (200) | $ 117 | 67 | $ 366 | |
Forward Contracts [Member] | |||||
Effects of designated cash flow hedges on the entity's AOCI | |||||
Gain (loss) recognized in AOCI, net of tax | 1,407 | 0 | |||
Net Investment Hedging [Member] | |||||
Effects of designated cash flow hedges on the entity's AOCI | |||||
Gain (loss) recognized in AOCI, net of tax | $ 65 | $ 1,006 |
DERIVATIVES (Textual) (Details)
DERIVATIVES (Textual) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Derivative [Line Items] | |||
Deferred Gain (Loss) on Discontinuation of Interest Rate Fair Value Hedge | $ 6,629 | ||
(Gain) loss expected to be reclassified from AOCI to earnings, next twelve months | $ 468 | ||
Gain (loss) expected to be reclassified from AOCI to earnings, period of recognition | 12 months | ||
Hedge ineffectiveness was immaterial | Hedge ineffectiveness was immaterial in the nine months ended September 30, 2020 and 2019. | Hedge ineffectiveness was immaterial in the three months ended September 30, 2020 and 2019. | |
Net Investment Hedging [Member] | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Derivative Asset, Notional Amount | $ 50,000 | $ 50,000 | |
Foreign exchange contracts | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Derivative Asset, Notional Amount | 66,566 | 59,982 | |
Foreign exchange contracts | Not designated as hedging instruments | |||
Derivative [Line Items] | |||
Derivative Asset, Notional Amount | 390,926 | $ 363,820 | |
Forward Contracts [Member] | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Derivative Asset, Notional Amount | 100,000 | ||
Terminated Interest Rate Swap [Member] | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Derivative Asset, Notional Amount | $ 50,000 |
FAIR VALUE (Details)
FAIR VALUE (Details) - Fair Value, Recurring [Member] - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets: | ||
Total assets | $ 5,977 | $ 6,649 |
Liabilities: | ||
Contingent consideration | 470 | |
Deferred compensation | 29,728 | 29,170 |
Total liabilities | 35,953 | 31,788 |
Foreign exchange contracts | ||
Assets: | ||
Derivative Asset | 4,101 | 3,685 |
Liabilities: | ||
Liabilities | 4,348 | 1,495 |
Net Investment Hedging [Member] | ||
Liabilities: | ||
Liabilities | 1,877 | 653 |
Interest Rate Swap [Member] | ||
Assets: | ||
Derivative Asset | 2,964 | |
Forward Contracts [Member] | ||
Assets: | ||
Derivative Asset | 1,876 | |
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration | 0 | |
Deferred compensation | 0 | 0 |
Total liabilities | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) | Foreign exchange contracts | ||
Assets: | ||
Derivative Asset | 0 | 0 |
Liabilities: | ||
Liabilities | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) | Net Investment Hedging [Member] | ||
Liabilities: | ||
Liabilities | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) | Interest Rate Swap [Member] | ||
Assets: | ||
Derivative Asset | 0 | |
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) | Forward Contracts [Member] | ||
Assets: | ||
Derivative Asset | 0 | |
Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Total assets | 5,977 | 6,649 |
Liabilities: | ||
Contingent consideration | 0 | |
Deferred compensation | 29,728 | 29,170 |
Total liabilities | 35,953 | 31,318 |
Significant Other Observable Inputs (Level 2) | Foreign exchange contracts | ||
Assets: | ||
Derivative Asset | 4,101 | 3,685 |
Liabilities: | ||
Liabilities | 4,348 | 1,495 |
Significant Other Observable Inputs (Level 2) | Net Investment Hedging [Member] | ||
Liabilities: | ||
Liabilities | 1,877 | 653 |
Significant Other Observable Inputs (Level 2) | Interest Rate Swap [Member] | ||
Assets: | ||
Derivative Asset | 2,964 | |
Significant Other Observable Inputs (Level 2) | Forward Contracts [Member] | ||
Assets: | ||
Derivative Asset | 1,876 | |
Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration | 470 | |
Deferred compensation | 0 | 0 |
Total liabilities | 0 | 470 |
Significant Unobservable Inputs (Level 3) | Foreign exchange contracts | ||
Assets: | ||
Derivative Asset | 0 | 0 |
Liabilities: | ||
Liabilities | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Net Investment Hedging [Member] | ||
Liabilities: | ||
Liabilities | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Interest Rate Swap [Member] | ||
Assets: | ||
Derivative Asset | $ 0 | |
Significant Unobservable Inputs (Level 3) | Forward Contracts [Member] | ||
Assets: | ||
Derivative Asset | $ 0 |
FAIR VALUE (Textual) (Details)
FAIR VALUE (Textual) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets and liabilities measured at fair value on a recurring basis | ||
Fair value of long-term debt | $ 785,579 | $ 721,494 |
Carrying value of long-term debt | $ 715,795 | $ 712,414 |