Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2021shares | |
Cover page. | |
Document Quarterly Report | true |
Document Transition Report | false |
Document Type | 10-Q |
Document Period End Date | Mar. 31, 2021 |
Entity File Number | 0-1402 |
Entity Registrant Name | LINCOLN ELECTRIC HOLDINGS, INC. |
Entity Incorporation, State or Country Code | OH |
Entity Tax Identification Number | 34-1860551 |
Entity Address, Address Line One | 22801 St. Clair Avenue |
Entity Address, City or Town | Cleveland |
Entity Address, State or Province | OH |
Entity Address, Postal Zip Code | 44117 |
City Area Code | 216 |
Local Phone Number | 481-8100 |
Title of 12(b) Security | Common Shares, without par value |
Trading Symbol | LECO |
Security Exchange Name | NASDAQ |
Entity Central Index Key | 0000059527 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Interactive Data Current | Yes |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 59,537,683 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | Q1 |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CONSOLIDATED STATEMENTS OF INCOME | ||
Net sales (Note 2) | $ 757,021 | $ 701,991 |
Cost of goods sold | 503,254 | 464,669 |
Gross profit | 253,767 | 237,322 |
Selling, general & administrative expenses | 145,676 | 149,727 |
Rationalization and asset impairment charges (Note 6) | 4,163 | 6,521 |
Operating income | 103,928 | 81,074 |
Interest expense, net | 5,359 | 5,458 |
Other income (expense) (Note 14) | (1,416) | 309 |
Income before income taxes | 97,153 | 75,925 |
Income taxes (Note 15) | 23,020 | 20,370 |
Net income including non-controlling interests | 74,133 | 55,555 |
Non-controlling interests in subsidiaries' income (loss) | (44) | (7) |
Net income | $ 74,177 | $ 55,562 |
Basic earnings per share (Note 3) | $ 1.24 | $ 0.92 |
Diluted earnings per share (Note 3) | 1.23 | 0.91 |
Cash dividends declared per share | $ 0.51 | $ 0.49 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||
Net income including non-controlling interests | $ 74,133 | $ 55,555 |
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax of $2,309 and $(716) in the three months ended March 31, 2021 and 2020 | 7,290 | (2,369) |
Defined benefit pension plan activity, net of tax of $815 and $164 in the three months ended March 31, 2021 and 2020 | 5,060 | 609 |
Currency translation adjustment | (22,743) | (70,608) |
Other comprehensive income (loss): | (10,393) | (72,368) |
Comprehensive income | 63,740 | (16,813) |
Comprehensive income (loss) attributable to non-controlling interests | (203) | (48) |
Comprehensive income attributable to shareholders | $ 63,943 | $ (16,765) |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||
Unrealized (loss) gain on derivatives designated and qualifying as cash flow hedges, tax | $ 2,309 | $ (716) |
Unrecognized amounts from defined benefit pension plans, tax | $ 815 | $ 164 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 242,126 | $ 257,279 |
Accounts receivable (less allowance for doubtful accounts of $14,029 in 2021; $14,779 in 2020) | 431,350 | 373,487 |
Inventories (Note 9) | 415,901 | 381,258 |
Other current assets | 106,910 | 100,319 |
Total Current Assets | 1,196,287 | 1,112,343 |
Property, plant and equipment (less accumulated depreciation of $875,114 in 2021; $884,647 in 2020) | 500,449 | 522,092 |
Goodwill | 334,194 | 335,593 |
Other assets | 330,819 | 344,425 |
TOTAL ASSETS | 2,361,749 | 2,314,453 |
Current Liabilities | ||
Short-term debt (Note 12) | 3,607 | 2,734 |
Trade accounts payable | 294,062 | 256,530 |
Accrued employee compensation and benefits | 92,769 | 98,437 |
Other current liabilities | 224,023 | 191,748 |
Total Current Liabilities | 614,461 | 549,449 |
Long-term debt, less current portion (Note 12) | 715,328 | 715,456 |
Other liabilities | 228,552 | 259,298 |
Total Liabilities | 1,558,341 | 1,524,203 |
Shareholders' Equity | ||
Common Shares | 9,858 | 9,858 |
Additional paid-in capital | 418,529 | 409,958 |
Retained earnings | 2,864,223 | 2,821,359 |
Accumulated other comprehensive loss | (312,424) | (302,190) |
Treasury Shares | (2,176,671) | (2,149,714) |
Total Shareholders' Equity | 803,515 | 789,271 |
Non-controlling interests | (107) | 979 |
Total Equity | 803,408 | 790,250 |
TOTAL LIABILITIES AND TOTAL EQUITY | $ 2,361,749 | $ 2,314,453 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 14,029 | $ 14,779 |
Accumulated depreciation | $ 875,114 | $ 884,647 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) [Member] | Treasury Shares | Noncontrolling Interests | Total |
Beginning Balance at Dec. 31, 2019 | $ 9,858 | $ 389,446 | $ 2,736,481 | $ (275,850) | $ (2,041,763) | $ 905 | $ 819,077 |
Beginning Balance (in shares) at Dec. 31, 2019 | 60,592,000 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 55,562 | (7) | 55,555 | ||||
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 | (70,567) | (41) | (70,608) | ||||
Cash dividends declared | (29,280) | (29,280) | |||||
Stock-based compensation activity | 2,826 | 1,912 | 4,738 | ||||
Stock-based compensation activity (in shares) | 152,000 | ||||||
Purchase of shares for treasury | (109,762) | (109,762) | |||||
Purchase of shares for treasury (in shares) | (1,357,000) | ||||||
Other | (5,176) | 5,176 | |||||
Ending Balance at Mar. 31, 2020 | $ 9,858 | 387,096 | 2,767,939 | (348,177) | (2,149,613) | 857 | 667,960 |
Ending Balance (in shares) at Mar. 31, 2020 | 59,387,000 | ||||||
Beginning Balance at Dec. 31, 2020 | $ 9,858 | 409,958 | 2,821,359 | (302,190) | (2,149,714) | 979 | 790,250 |
Beginning Balance (in shares) at Dec. 31, 2020 | 59,641,000 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 74,177 | (44) | 74,133 | ||||
Unrecognized amounts from defined benefit pension plans, net of tax | 5,060 | 5,060 | |||||
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax | 7,290 | 7,290 | |||||
Currency translation adjustment | (22,584) | (159) | (22,743) | ||||
Cash dividends declared | (30,572) | (30,572) | |||||
Stock-based compensation activity | 7,680 | 1,502 | 9,182 | ||||
Stock-based compensation activity (in shares) | 134,000 | ||||||
Purchase of shares for treasury | (28,459) | $ (28,459) | |||||
Purchase of shares for treasury (in shares) | (237,000) | (200,000) | |||||
Other | 891 | (741) | (883) | $ (733) | |||
Ending Balance at Mar. 31, 2021 | $ 9,858 | $ 418,529 | $ 2,864,223 | $ (312,424) | $ (2,176,671) | $ (107) | $ 803,408 |
Ending Balance (in shares) at Mar. 31, 2021 | 59,538,000 |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CONSOLIDATED STATEMENTS OF EQUITY | ||
Cash dividends declared per share (in dollars per share) | $ 0.51 | $ 0.49 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 74,177 | $ 55,562 |
Non-controlling interests in subsidiaries' income (loss) | (44) | (7) |
Net income including non-controlling interests | 74,133 | 55,555 |
Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities: | ||
Rationalization and asset impairment net charges (Note 6) | 60 | (236) |
Depreciation and amortization | 19,118 | 21,028 |
Equity earnings in affiliates, net | (177) | (162) |
Deferred income taxes | (16,115) | (3,685) |
Stock-based compensation | 6,402 | 3,691 |
Other, net | 9,016 | (4,188) |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||
Increase in accounts receivable | (65,795) | (25,698) |
Increase in inventories | (42,568) | (17,401) |
Increase in other current assets | (8,095) | (1,789) |
Increase (decrease) in trade accounts payable | 42,325 | (16,676) |
Increase in other current liabilities | 30,266 | 13,482 |
Net change in other assets and liabilities | (3,308) | (1,949) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 45,262 | 21,972 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capital expenditures | (9,936) | (11,828) |
Proceeds from sale of property, plant and equipment | 584 | 6,100 |
Other investing activities | 6,500 | 0 |
NET CASH USED BY INVESTING ACTIVITIES | (2,852) | (5,728) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Amounts due banks, net | 1,307 | 97,777 |
Proceeds from exercise of stock options | 2,780 | 1,047 |
Purchase of shares for treasury (Note 8) | (28,459) | (109,762) |
Cash dividends paid to shareholders | (30,999) | (30,675) |
NET CASH USED BY FINANCING ACTIVITIES | (55,371) | (41,613) |
Effect of exchange rate changes on Cash and cash equivalents | (2,192) | (10,819) |
DECREASE IN CASH AND CASH EQUIVALENTS | (15,153) | (36,188) |
Cash and cash equivalents at beginning of period | 257,279 | 199,563 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 242,126 | $ 163,375 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 — 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. 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 three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021. The accompanying Consolidated Balance Sheet at December 31, 2020 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, 2020. The current coronavirus disease (“COVID- 19”) pandemic has adversely impacted global economic conditions and has contributed to significant volatility in financial markets beginning in early calendar year 2020. Although the Company's estimates contemplate current conditions, the inputs into certain significant and critical accounting estimates include judgments and assumptions about the economic implications of the COVID-19 pandemic and how management expects them to change in the future. It is reasonably possible that actual results experienced may differ materially from the Company's estimates in future periods, which could affect our results of operations and financial condition. For additional discussion, see “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. 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 ASU was adopted as of January 1, 2021: Standard Description ASU No. 2019-12, Income Taxes (Topic 740) 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 adoption did not have a material impact on the Company’s consolidated financial statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2021 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | NOTE 2 — REVENUE RECOGNITION The following table presents the Company’s Net sales disaggregated by product line: Three Months Ended March 31, 2021 2020 Consumables $ 434,179 $ 405,840 Equipment 322,842 296,151 Net sales $ 757,021 $ 701,991 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. At March 31, 2021, the Company recorded $19,292 related to advance customer payments and $22,744 related to billings in excess of revenue recognized. These contract liabilities are included in Other current liabilities in the Condensed Consolidated Balance Sheets. At December 31, 2020, the balances related to advance customer payments and billings in excess of revenue recognized were $14,920 and $21,396, respectively. Substantially all of the Company’s contract liabilities are recognized within twelve months based on contract duration. The Company records an asset for contracts where it has recognized revenue, but has not yet invoiced the customer for goods or services. At March 31, 2021 and December 31, 2020, the Company recorded $25,709 and $22,113, respectively, related to these contract assets which are included in Other current assets in the Condensed Consolidated Balance Sheets. Contract asset amounts are expected to be billed within the next twelve months. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2021 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 3 — EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended March 31, 2021 2020 Numerator: Net income $ 74,177 $ 55,562 Denominator (shares in 000's): Basic weighted average shares outstanding 59,642 60,184 Effect of dilutive securities - Stock options and awards 657 615 Diluted weighted average shares outstanding 60,299 60,799 Basic earnings per share $ 1.24 $ 0.92 Diluted earnings per share $ 1.23 $ 0.91 For the three months ended March 31, 2021 and 2020, common shares subject to equity-based awards of 89,592 and 655,764, respectively, were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Mar. 31, 2021 | |
ACQUISITIONS | |
ACQUISITIONS | NOTE 4 — ACQUISITIONS During April 2021, the Company acquired Zeman Bauelemente Produktionsgesellschaft m.b.H.(“Zeman Bauelemente"), a division of the Zeman Group. Zeman Bauelemente, based in Vienna, Austria, is a leading designer and manufacturer of robotic assembly and arc welding systems that automate the tacking and welding of steel beams. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2021 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | NOTE 5 — 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: The Harris Americas International Products Corporate / Welding Welding Group Eliminations Consolidated Three Months Ended March 31, 2021 Net sales $ 425,242 $ 223,079 $ 108,700 $ — $ 757,021 Inter-segment sales 32,748 4,285 2,147 (39,180) — Total $ 457,990 $ 227,364 $ 110,847 $ (39,180) $ 757,021 Adjusted EBIT $ 76,617 $ 18,816 $ 18,697 $ (1,456) $ 112,674 Special items charge (gain) (1) 4,440 4,609 — 1,113 10,162 EBIT $ 72,177 $ 14,207 $ 18,697 $ (2,569) $ 102,512 Interest income 454 Interest expense (5,813) Income before income taxes $ 97,153 Three Months Ended March 31, 2020 Net sales $ 418,535 $ 197,923 $ 85,533 $ — $ 701,991 Inter-segment sales 24,783 4,483 1,725 (30,991) — Total $ 443,318 $ 202,406 $ 87,258 $ (30,991) $ 701,991 Adjusted EBIT $ 70,702 $ 6,615 $ 12,492 $ (1,099) $ 88,710 Special items charge (gain) (2) 1,190 6,137 — — 7,327 EBIT $ 69,512 $ 478 $ 12,492 $ (1,099) $ 81,383 Interest income 860 Interest expense (6,318) Income before income taxes $ 75,925 (1) In the three months ended March 31, 2021, special items reflect Rationalization and asset impairment charges of $4,163 in International Welding, pension settlement charges of $4,440 and $446 in Americas Welding and International Welding, respectively, and acquisition transaction costs of $1,113 in Corporate/Eliminations related to an acquisition. (2) In the three months ended March 31, 2020, special items reflect Rationalization and asset impairment charges of $1,190 and $5,331 in Americas Welding and International We lding , respectively, and amortization of step up in value of acquired inventories of $806 in International Welding related to an acquisition. |
RATIONALIZATION AND ASSET IMPAI
RATIONALIZATION AND ASSET IMPAIRMENTS | 3 Months Ended |
Mar. 31, 2021 | |
RATIONALIZATION AND ASSET IMPAIRMENTS | |
RATIONALIZATION AND ASSET IMPAIRMENTS | NOTE 6 — RATIONALIZATION AND ASSET IMPAIRMENTS The Company recorded Rationalization and asset impairment net charges of $4,163 and $6,521 in the three months ended March 31, 2021 and 2020, 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 and 2021, the Company initiated rationalization plans within Americas Welding and International Welding segments. The plans include headcount restructuring and the consolidation of manufacturing operations to better align the Company’s cost structure with economic conditions and operating needs. At March 31, 2021, liabilities of 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 three months ended March 31, 2021: International Americas Welding Welding Consolidated Balance at December 31, 2020 $ 25 $ 13,597 $ 13,622 Payments and other adjustments (25) (4,545) (4,570) Charged to expense — 4,103 4,103 Balance at March 31, 2021 $ — $ 13,155 $ 13,155 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | 3 Months Ended |
Mar. 31, 2021 | |
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | NOTE 7 – 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 March 31, 2021 Unrealized gain (loss) on derivatives designated and Defined benefit Currency qualifying as cash pension plan translation flow hedges activity adjustment Total Balance at December 31, 2020 $ 2,487 $ (101,770) $ (202,907) $ (302,190) Other comprehensive income (loss) before reclassification 7,066 602 (22,584) 3 (14,916) Amounts reclassified from AOCI 224 1 4,458 2 — 4,682 Net current-period other comprehensive income (loss) 7,290 5,060 (22,584) (10,234) Balance at March 31, 2021 $ 9,777 $ (96,710) $ (225,491) $ (312,424) Three Months Ended March 31, 2020 Unrealized gain (loss) on derivatives designated and Defined benefit Currency qualifying as cash pension plan translation flow hedges activity adjustment Total Balance at December 31, 2019 $ 1,626 $ (70,546) $ (206,930) $ (275,850) Other comprehensive income (loss) before reclassification (2,312) — (70,567) 3 (72,879) Amounts reclassified from AOCI (57) 1 609 2 — 552 Net current-period other comprehensive income (loss) (2,369) 609 (70,567) (72,327) Balance at March 31, 2020 $ (743) $ (69,937) $ (277,497) $ (348,177) (1) During the three months ended March 31, 2021, the AOCI reclassification is a component of Net sales of $102 (net of tax of $42 ) and Cost of goods sold of $326 (net of tax of $133 ); during the three months ended March 31, 2020, the reclassification is a component of Net sales of $(41) (net of tax of $(21) ) and Cost of goods sold of $(98) (net of tax of $(24) ). 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 $1,456 and $164 during the three months ended March 31, 2021 and 2020, respectively). See Note 13 to the consolidated financial statements for additional details. (3) The Other comprehensive income (loss) before reclassifications excludes $(159) and $(41) attributable to Non-controlling interests in the three months ended March 31, 2021 and 2020, respectively. |
COMMON STOCK REPURCHASE PROGRAM
COMMON STOCK REPURCHASE PROGRAM | 3 Months Ended |
Mar. 31, 2021 | |
COMMON STOCK REPURCHASE PROGRAM | |
COMMON STOCK REPURCHASE PROGRAM | NOTE 8 — COMMON STOCK REPURCHASE PROGRAM The 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 three months ended March 31, 2021, the Company purchased a total of 0.2 million shares at an average cost per share of $120.55. As of March 31, 2021, 11.2 million common shares remained available for repurchase under these programs. The repurchased common shares remain in treasury and have not been retired. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2021 | |
INVENTORY | |
INVENTORY | NOTE 9 — INVENTORIES Inventories in the Condensed Consolidated Balance Sheets are comprised of the following components: March 31, 2021 December 31, 2020 Raw materials $ 115,278 $ 111,888 Work-in-process 67,097 60,341 Finished goods 233,526 209,029 Total $ 415,901 $ 381,258 At March 31, 2021 and December 31, 2020, approximately 36% and 35%, respectively, of total inventories were valued using the last-in, first-out ("LIFO") method. The excess of current cost over LIFO cost was $79,435 and $75,581 at March 31, 2021 and December 31, 2020, respectively. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2021 | |
LEASES | |
LEASES | NOTE 10 — 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 March 31, 2021 December 31, 2020 Right-of-use assets Other assets $ 39,936 $ 43,570 Current liabilities Other current liabilities $ 10,652 $ 11,502 Noncurrent liabilities Other liabilities 31,175 33,988 Total lease liabilities $ 41,827 $ 45,490 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 $5,051 and $5,219 in the three months ended March 31, 2021 and 2020, respectively. Cash paid for amounts included in the measurement of lease liabilities at March 31, 2021 and 2020, respectively, were $3,389 and $4,097 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 during the three months ended March 31, 2021 and 2020 were $0 and $2,035, respectively. The total future minimum lease payments for noncancelable operating leases were as follows: March 31, 2021 2021 $ 9,132 2022 9,559 2023 7,596 2024 6,038 2025 3,253 After 2025 11,713 Total lease payments $ 47,291 Less: Imputed interest 5,464 Operating lease liabilities $ 41,827 As of March 31, 2021, the weighted average remaining lease term is 7.2 years and the weighted average discount rate used to determine the operating lease liability is 3.5%. |
PRODUCT WARRANTY COSTS
PRODUCT WARRANTY COSTS | 3 Months Ended |
Mar. 31, 2021 | |
PRODUCT WARRANTY COSTS | |
PRODUCT WARRANTY COSTS | NOTE 11 — PRODUCT WARRANTY COSTS The changes in the carrying amount of product warranty accruals are as follows: Year Ended March 31, 2021 2020 Balance at beginning of year $ 21,760 $ 20,650 Accruals for warranties 3,136 4,117 Settlements (3,253) (3,591) Foreign currency translation and other adjustments (156) (318) Balance at March 31 $ 21,487 $ 20,858 |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2021 | |
DEBT | |
DEBT | NOTE 12 — 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 March 31, 2021, the Company was in compliance with all of its covenants and had no outstanding borrowings under the Credit Agreement. On April 23, 2021, the Company amended and restated the Credit Agreement by entering into the Second Amended and Restated Credit Agreement (“Second Credit Agreement”). The Second Credit Agreement has a line of credit totaling . The interest rate on borrowings is based on LIBOR plus a spread based on the Company’s net leverage ratio. The Amended and Restated Credit Agreement contains customary representations and warranties, as well as customary affirmative, negative and financial covenants for credit facilities of this type (subject to negotiated baskets and exceptions), including limitations on the Company and its subsidiaries with respect to liens, investments, distributions, mergers and acquisitions, dispositions of assets and transactions with affiliates. The Company has other lines of credit totaling $81,234. As of March 31, 2021, the Company was in compliance with all of its covenants and had $3,497 outstanding at March 31, 2021. 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 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 March 31, 2021, the Company was in compliance with all of its covenants and had no outstanding borrowings under the Shelf Agreements. Fair Value of Debt At March 31, 2021 and December 31, 2020, the fair value of long-term debt, including the current portion, was approximately $739,945 and $793,591, respectively, which was determined using available market information and methodologies requiring judgment. The carrying value of this debt at such dates was $715,438 and $715,567, 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 | 3 Months Ended |
Mar. 31, 2021 | |
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS | |
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS | NOTE 13 — RETIREMENT AND POSTRETIREMENT BENEFIT PLANS The components of total pension cost were as follows: Three Months Ended March 31, 2021 2020 U.S. pension Non-U.S. U.S. pension Non-U.S. plans pension plans plans pension plans Service cost $ 49 $ 471 $ 39 $ 756 Interest cost 2,981 616 4,050 696 Expected return on plan assets (4,509) (972) (5,711) (1,007) Amortization of prior service cost — 12 — 15 Amortization of net loss 581 435 203 555 Settlement charges (1) 4,440 446 — — Defined benefit plans 3,542 1,008 (1,419) 1,015 Multi-employer plans — 244 — 269 Defined contribution plans 5,162 845 5,626 702 Total pension cost $ 8,704 $ 2,097 $ 4,207 $ 1,986 (1) Pension settlement charges primarily resulting from lump sum pension payments in the three months ended March 31, 2021. 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 be substantially complete by the end of 2021. |
OTHER INCOME (EXPENSE)
OTHER INCOME (EXPENSE) | 3 Months Ended |
Mar. 31, 2021 | |
OTHER INCOME (EXPENSE) | |
OTHER INCOME (EXPENSE) | NOTE 14 — OTHER INCOME (EXPENSE) The components of Other income (expense) were as follows: Three Months Ended March 31, 2021 2020 Equity earnings in affiliates $ 176 $ 162 Other components of net periodic pension (cost) income (1) (4,030) 1,199 Other income (expense) 2,438 (1,052) Total Other income (expense) $ (1,416) $ 309 (1) Other components of net periodic pension (cost) income includes pension settlements and curtailments. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2021 | |
INCOME TAXES | |
INCOME TAXES | NOTE 15 — INCOME TAXES The Company recognized $23,020 of tax expense on pretax income of $97,153, resulting in an effective income tax rate of 23.7% for the three months ended March 31, 2021. The effective income tax rate was 26.8% for the three months ended March 31, 2020. The decrease in the effective tax rate for the three months ended March 31, 2021, as compared with the same period in 2020, was primarily due to income earned in lower tax rate jurisdictions in 2021, as well as higher tax expense associated with a valuation allowance recorded in 2020. As of March 31, 2021, the Company had $17,768 of unrecognized tax benefits. If recognized, approximately $14,281 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 2017. 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 $1,749 in previously unrecognized tax benefits by the end of the first quarter 2022. |
DERIVATIVES
DERIVATIVES | 3 Months Ended |
Mar. 31, 2021 | |
DERIVATIVES | |
DERIVATIVES | NOTE 16 — 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 three months ended March 31, 2021 and 2020. 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 March 31, 2021. 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 $67,654 at March 31, 2021 and $69,051 at December 31, 2020. 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 March 31, 2021 and December 31, 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 March 31, 2021, the Company had no interest rate swap agreements outstanding. The Company terminated $50,000 of interest rate swaps in the three months ended March 31, 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 March 31, 2021 and December 31, 2020, 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 $585,340 and $391,112 at March 31, 2021 and December 31, 2020, respectively. Fair values of derivative instruments in the Company’s Condensed Consolidated Balance Sheets follow: March 31, 2021 December 31, 2020 Other Other Other Other Current Current Other Other Current Current Other Other Derivatives by hedge designation Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Designated as hedging instruments: Foreign exchange contracts $ 1,337 $ 1,090 $ — $ — $ 2,451 $ 1,124 $ — $ — Forward starting swap agreements — — 13,510 — — — 4,876 — Cross currency swap agreements — — — 2,263 — — — 4,308 Not designated as hedging instruments: Foreign exchange contracts 2,715 1,682 — — 1,398 3,485 — — Total derivatives $ 4,052 $ 2,772 $ 13,510 $ 2,263 $ 3,849 $ 4,609 $ 4,876 $ 4,308 The effects of undesignated derivative instruments on the Company’s Consolidated Statements of Income consisted of the following: Three Months Ended March 31, Derivatives by hedge designation Classification of gain (loss) 2021 2020 Not designated as hedges: Foreign exchange contracts Selling, general & administrative expenses $ (1,286) $ (22,133) 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 March 31, 2021 December 31, 2020 Foreign exchange contracts $ (90) $ 660 Forward starting swap agreements 10,109 3,649 Net investment contracts (242) (1,822) The Company expects a loss of $90 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 March 31, Gain (loss) recognized in the Derivative type Consolidated Statements of Income: 2021 2020 Foreign exchange contracts Sales $ 144 $ (62) Cost of goods sold (458) 122 |
FAIR VALUE
FAIR VALUE | 3 Months Ended |
Mar. 31, 2021 | |
FAIR VALUE. | |
FAIR VALUE | NOTE 17 - FAIR VALUE The following table provides a summary of assets and liabilities as of March 31, 2021, measured at fair value on a recurring basis: Quoted Prices in Active Markets for Identical Assets or Significant Other Significant Balance as of Liabilities Observable Inputs Unobservable Description March 31, 2021 (Level 1) (Level 2) Inputs (Level 3) Assets: Foreign exchange contracts $ 4,052 $ — $ 4,052 $ — Forward starting swap agreements 13,510 — 13,510 — Total assets $ 17,562 $ — $ 17,562 $ — Liabilities: Foreign exchange contracts $ 2,772 $ — $ 2,772 $ — Cross currency swap agreements 2,263 — 2,263 — Deferred compensation 40,775 — 40,775 — Total liabilities $ 45,810 $ — $ 45,810 $ — The following table provides a summary of assets and liabilities as of December 31, 2020, measured at fair value on a recurring basis: Quoted Prices in Active Markets for Identical Assets or Significant Other Significant Balance as of Liabilities Observable Inputs Unobservable Description December 31, 2020 (Level 1) (Level 2) Inputs (Level 3) Assets: Foreign exchange contracts $ 3,849 $ — $ 3,849 $ — Interest rate swap agreements 4,876 — 4,876 — Total assets $ 8,725 $ — $ 8,725 $ — Liabilities: Foreign exchange contracts $ 4,609 $ — $ 4,609 $ — Cross currency swap agreements 4,308 — 4,308 — Deferred compensation 41,539 — 41,539 — Total liabilities $ 50,456 $ — $ 50,456 $ — 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 March 31, 2021 and December 31, 2020. 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. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | 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. 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 three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021. The accompanying Consolidated Balance Sheet at December 31, 2020 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, 2020. |
COVID-19 Assessment | The current coronavirus disease (“COVID- 19”) pandemic has adversely impacted global economic conditions and has contributed to significant volatility in financial markets beginning in early calendar year 2020. Although the Company's estimates contemplate current conditions, the inputs into certain significant and critical accounting estimates include judgments and assumptions about the economic implications of the COVID-19 pandemic and how management expects them to change in the future. It is reasonably possible that actual results experienced may differ materially from the Company's estimates in future periods, which could affect our results of operations and financial condition. For additional discussion, see “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. |
New Accounting Pronouncements | 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 ASU was adopted as of January 1, 2021: Standard Description ASU No. 2019-12, Income Taxes (Topic 740) 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 adoption did not have a material impact on the Company’s consolidated financial statements. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
REVENUE RECOGNITION | |
Disaggregation of revenue by product line | Three Months Ended March 31, 2021 2020 Consumables $ 434,179 $ 405,840 Equipment 322,842 296,151 Net sales $ 757,021 $ 701,991 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
EARNINGS PER SHARE | |
Computation of basic and diluted earnings per share | Three Months Ended March 31, 2021 2020 Numerator: Net income $ 74,177 $ 55,562 Denominator (shares in 000's): Basic weighted average shares outstanding 59,642 60,184 Effect of dilutive securities - Stock options and awards 657 615 Diluted weighted average shares outstanding 60,299 60,799 Basic earnings per share $ 1.24 $ 0.92 Diluted earnings per share $ 1.23 $ 0.91 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
SEGMENT INFORMATION | |
Schedule of financial information for the reportable segments | The following table presents Adjusted EBIT by segment: The Harris Americas International Products Corporate / Welding Welding Group Eliminations Consolidated Three Months Ended March 31, 2021 Net sales $ 425,242 $ 223,079 $ 108,700 $ — $ 757,021 Inter-segment sales 32,748 4,285 2,147 (39,180) — Total $ 457,990 $ 227,364 $ 110,847 $ (39,180) $ 757,021 Adjusted EBIT $ 76,617 $ 18,816 $ 18,697 $ (1,456) $ 112,674 Special items charge (gain) (1) 4,440 4,609 — 1,113 10,162 EBIT $ 72,177 $ 14,207 $ 18,697 $ (2,569) $ 102,512 Interest income 454 Interest expense (5,813) Income before income taxes $ 97,153 Three Months Ended March 31, 2020 Net sales $ 418,535 $ 197,923 $ 85,533 $ — $ 701,991 Inter-segment sales 24,783 4,483 1,725 (30,991) — Total $ 443,318 $ 202,406 $ 87,258 $ (30,991) $ 701,991 Adjusted EBIT $ 70,702 $ 6,615 $ 12,492 $ (1,099) $ 88,710 Special items charge (gain) (2) 1,190 6,137 — — 7,327 EBIT $ 69,512 $ 478 $ 12,492 $ (1,099) $ 81,383 Interest income 860 Interest expense (6,318) Income before income taxes $ 75,925 (1) In the three months ended March 31, 2021, special items reflect Rationalization and asset impairment charges of $4,163 in International Welding, pension settlement charges of $4,440 and $446 in Americas Welding and International Welding, respectively, and acquisition transaction costs of $1,113 in Corporate/Eliminations related to an acquisition. (2) In the three months ended March 31, 2020, special items reflect Rationalization and asset impairment charges of $1,190 and $5,331 in Americas Welding and International We lding , respectively, and amortization of step up in value of acquired inventories of $806 in International Welding related to an acquisition. |
RATIONALIZATION AND ASSET IMP_2
RATIONALIZATION AND ASSET IMPAIRMENTS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
RATIONALIZATION AND ASSET IMPAIRMENTS | |
Summary of the activity related to the rationalization liabilities by segment | The following table summarizes the activity related to rationalization liabilities for the three months ended March 31, 2021: International Americas Welding Welding Consolidated Balance at December 31, 2020 $ 25 $ 13,597 $ 13,622 Payments and other adjustments (25) (4,545) (4,570) Charged to expense — 4,103 4,103 Balance at March 31, 2021 $ — $ 13,155 $ 13,155 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, 2021 Unrealized gain (loss) on derivatives designated and Defined benefit Currency qualifying as cash pension plan translation flow hedges activity adjustment Total Balance at December 31, 2020 $ 2,487 $ (101,770) $ (202,907) $ (302,190) Other comprehensive income (loss) before reclassification 7,066 602 (22,584) 3 (14,916) Amounts reclassified from AOCI 224 1 4,458 2 — 4,682 Net current-period other comprehensive income (loss) 7,290 5,060 (22,584) (10,234) Balance at March 31, 2021 $ 9,777 $ (96,710) $ (225,491) $ (312,424) Three Months Ended March 31, 2020 Unrealized gain (loss) on derivatives designated and Defined benefit Currency qualifying as cash pension plan translation flow hedges activity adjustment Total Balance at December 31, 2019 $ 1,626 $ (70,546) $ (206,930) $ (275,850) Other comprehensive income (loss) before reclassification (2,312) — (70,567) 3 (72,879) Amounts reclassified from AOCI (57) 1 609 2 — 552 Net current-period other comprehensive income (loss) (2,369) 609 (70,567) (72,327) Balance at March 31, 2020 $ (743) $ (69,937) $ (277,497) $ (348,177) (1) During the three months ended March 31, 2021, the AOCI reclassification is a component of Net sales of $102 (net of tax of $42 ) and Cost of goods sold of $326 (net of tax of $133 ); during the three months ended March 31, 2020, the reclassification is a component of Net sales of $(41) (net of tax of $(21) ) and Cost of goods sold of $(98) (net of tax of $(24) ). 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 $1,456 and $164 during the three months ended March 31, 2021 and 2020, respectively). See Note 13 to the consolidated financial statements for additional details. (3) The Other comprehensive income (loss) before reclassifications excludes $(159) and $(41) attributable to Non-controlling interests in the three months ended March 31, 2021 and 2020, respectively. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
INVENTORY | |
Schedule of Inventory, Current [Table Text Block] | Inventories in the Condensed Consolidated Balance Sheets are comprised of the following components: March 31, 2021 December 31, 2020 Raw materials $ 115,278 $ 111,888 Work-in-process 67,097 60,341 Finished goods 233,526 209,029 Total $ 415,901 $ 381,258 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
LEASES | |
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 March 31, 2021 December 31, 2020 Right-of-use assets Other assets $ 39,936 $ 43,570 Current liabilities Other current liabilities $ 10,652 $ 11,502 Noncurrent liabilities Other liabilities 31,175 33,988 Total lease liabilities $ 41,827 $ 45,490 |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | The total future minimum lease payments for noncancelable operating leases were as follows: March 31, 2021 2021 $ 9,132 2022 9,559 2023 7,596 2024 6,038 2025 3,253 After 2025 11,713 Total lease payments $ 47,291 Less: Imputed interest 5,464 Operating lease liabilities $ 41,827 |
PRODUCT WARRANTY COSTS (Tables)
PRODUCT WARRANTY COSTS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
PRODUCT WARRANTY COSTS | |
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: Year Ended March 31, 2021 2020 Balance at beginning of year $ 21,760 $ 20,650 Accruals for warranties 3,136 4,117 Settlements (3,253) (3,591) Foreign currency translation and other adjustments (156) (318) Balance at March 31 $ 21,487 $ 20,858 |
RETIREMENT AND POSTRETIREMENT_2
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS | |
Components of Pension Cost for Defined Benefit Plans | The components of total pension cost were as follows: Three Months Ended March 31, 2021 2020 U.S. pension Non-U.S. U.S. pension Non-U.S. plans pension plans plans pension plans Service cost $ 49 $ 471 $ 39 $ 756 Interest cost 2,981 616 4,050 696 Expected return on plan assets (4,509) (972) (5,711) (1,007) Amortization of prior service cost — 12 — 15 Amortization of net loss 581 435 203 555 Settlement charges (1) 4,440 446 — — Defined benefit plans 3,542 1,008 (1,419) 1,015 Multi-employer plans — 244 — 269 Defined contribution plans 5,162 845 5,626 702 Total pension cost $ 8,704 $ 2,097 $ 4,207 $ 1,986 (1) Pension settlement charges primarily resulting from lump sum pension payments in the three months ended March 31, 2021. |
OTHER INCOME (EXPENSE) (Tables)
OTHER INCOME (EXPENSE) (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
OTHER INCOME (EXPENSE) | |
Schedule of Other Nonoperating Income (Expense) | The components of Other income (expense) were as follows: Three Months Ended March 31, 2021 2020 Equity earnings in affiliates $ 176 $ 162 Other components of net periodic pension (cost) income (1) (4,030) 1,199 Other income (expense) 2,438 (1,052) Total Other income (expense) $ (1,416) $ 309 (1) Other components of net periodic pension (cost) income includes pension settlements and curtailments. |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
DERIVATIVES | |
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: March 31, 2021 December 31, 2020 Other Other Other Other Current Current Other Other Current Current Other Other Derivatives by hedge designation Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Designated as hedging instruments: Foreign exchange contracts $ 1,337 $ 1,090 $ — $ — $ 2,451 $ 1,124 $ — $ — Forward starting swap agreements — — 13,510 — — — 4,876 — Cross currency swap agreements — — — 2,263 — — — 4,308 Not designated as hedging instruments: Foreign exchange contracts 2,715 1,682 — — 1,398 3,485 — — Total derivatives $ 4,052 $ 2,772 $ 13,510 $ 2,263 $ 3,849 $ 4,609 $ 4,876 $ 4,308 |
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 March 31, Derivatives by hedge designation Classification of gain (loss) 2021 2020 Not designated as hedges: Foreign exchange contracts Selling, general & administrative expenses $ (1,286) $ (22,133) |
Schedule of effects of designated cash flow 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 March 31, 2021 December 31, 2020 Foreign exchange contracts $ (90) $ 660 Forward starting swap agreements 10,109 3,649 Net investment contracts (242) (1,822) The Company expects a loss of $90 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 March 31, Gain (loss) recognized in the Derivative type Consolidated Statements of Income: 2021 2020 Foreign exchange contracts Sales $ 144 $ (62) Cost of goods sold (458) 122 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
FAIR VALUE. | |
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 March 31, 2021, measured at fair value on a recurring basis: Quoted Prices in Active Markets for Identical Assets or Significant Other Significant Balance as of Liabilities Observable Inputs Unobservable Description March 31, 2021 (Level 1) (Level 2) Inputs (Level 3) Assets: Foreign exchange contracts $ 4,052 $ — $ 4,052 $ — Forward starting swap agreements 13,510 — 13,510 — Total assets $ 17,562 $ — $ 17,562 $ — Liabilities: Foreign exchange contracts $ 2,772 $ — $ 2,772 $ — Cross currency swap agreements 2,263 — 2,263 — Deferred compensation 40,775 — 40,775 — Total liabilities $ 45,810 $ — $ 45,810 $ — The following table provides a summary of assets and liabilities as of December 31, 2020, measured at fair value on a recurring basis: Quoted Prices in Active Markets for Identical Assets or Significant Other Significant Balance as of Liabilities Observable Inputs Unobservable Description December 31, 2020 (Level 1) (Level 2) Inputs (Level 3) Assets: Foreign exchange contracts $ 3,849 $ — $ 3,849 $ — Interest rate swap agreements 4,876 — 4,876 — Total assets $ 8,725 $ — $ 8,725 $ — Liabilities: Foreign exchange contracts $ 4,609 $ — $ 4,609 $ — Cross currency swap agreements 4,308 — 4,308 — Deferred compensation 41,539 — 41,539 — Total liabilities $ 50,456 $ — $ 50,456 $ — |
REVENUE RECOGNITION (Textual) (
REVENUE RECOGNITION (Textual) (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Percentage Net Sales Over Time | 10.00% | |
Unbilled Contracts Receivable | $ 25,709 | $ 22,113 |
Advance Customer Payments [Member] | ||
Contract with customer liability | 19,292 | 14,920 |
Billings in Excess of Revenue Recognized [Member] | ||
Contract with customer liability | $ 22,744 | $ 21,396 |
REVENUE RECOGNITION (Disaggrega
REVENUE RECOGNITION (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Net sales (Note 2) | $ 757,021 | $ 701,991 |
Welding Consumables [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales (Note 2) | 434,179 | 405,840 |
Welding Equipment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales (Note 2) | $ 322,842 | $ 296,151 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Numerator: | ||
Net income | $ 74,177 | $ 55,562 |
Denominator (shares in 000's): | ||
Basic weighted average shares outstanding (in shares) | 59,642,000 | 60,184,000 |
Effect of dilutive securities - stock options and awards (in shares) | 657,000 | 615,000 |
Diluted weighted average shares outstanding (in shares) | 60,299,000 | 60,799,000 |
Basic earnings per share (in dollars per share) | $ 1.24 | $ 0.92 |
Diluted earnings per share (in dollars per share) | $ 1.23 | $ 0.91 |
Anti-dilutive shares excluded from the computation of diluted earnings per share | 89,592 | 655,764 |
SEGMENT INFORMATION (Financial
SEGMENT INFORMATION (Financial Information of Reportable Segments) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Financial information for the reportable segments | ||
Net sales (Note 2) | $ 757,021 | $ 701,991 |
Revenue from Related Parties | 0 | 0 |
Segment, including Inter-segment, sales | 757,021 | 701,991 |
EBIT, as adjusted | 112,674 | 88,710 |
Special items charge (Gain) | 10,162 | 7,327 |
EBIT | 102,512 | 81,383 |
Interest income | 454 | 860 |
Interest expense | (5,813) | (6,318) |
Income before income taxes | 97,153 | 75,925 |
Rationalization and asset impairment charges (gains) | 4,163 | 6,521 |
Corporate/Eliminations | ||
Financial information for the reportable segments | ||
Net sales (Note 2) | 0 | 0 |
Revenue from Related Parties | (39,180) | (30,991) |
Segment, including Inter-segment, sales | (39,180) | (30,991) |
EBIT, as adjusted | (1,456) | (1,099) |
Special items charge (Gain) | 1,113 | |
EBIT | (2,569) | (1,099) |
Acquisition Transaction and Integration Costs | 1,113 | |
Acquisition Transaction and Integration Costs | 1,113 | |
Americas Welding [Member] | ||
Financial information for the reportable segments | ||
Rationalization and asset impairment charges (gains) | 1,190 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement and Curtailment | 4,440 | |
Americas Welding [Member] | Operating Segments | ||
Financial information for the reportable segments | ||
Net sales (Note 2) | 425,242 | 418,535 |
Revenue from Related Parties | 32,748 | 24,783 |
Segment, including Inter-segment, sales | 457,990 | 443,318 |
EBIT, as adjusted | 76,617 | 70,702 |
Special items charge (Gain) | 4,440 | 1,190 |
EBIT | 72,177 | 69,512 |
International Welding [Member] | ||
Financial information for the reportable segments | ||
Rationalization and asset impairment charges (gains) | 4,163 | 5,331 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement and Curtailment | 446 | |
Business Combination, Inventory Step Up | 806 | |
International Welding [Member] | Operating Segments | ||
Financial information for the reportable segments | ||
Net sales (Note 2) | 223,079 | 197,923 |
Revenue from Related Parties | 4,285 | 4,483 |
Segment, including Inter-segment, sales | 227,364 | 202,406 |
EBIT, as adjusted | 18,816 | 6,615 |
Special items charge (Gain) | 4,609 | 6,137 |
EBIT | 14,207 | 478 |
The Harris Products Group | Operating Segments | ||
Financial information for the reportable segments | ||
Net sales (Note 2) | 108,700 | 85,533 |
Revenue from Related Parties | 2,147 | 1,725 |
Segment, including Inter-segment, sales | 110,847 | 87,258 |
EBIT, as adjusted | 18,697 | 12,492 |
EBIT | $ 18,697 | $ 12,492 |
SEGMENT INFORMATION (Textual) (
SEGMENT INFORMATION (Textual) (Details) | 3 Months Ended |
Mar. 31, 2021segment | |
SEGMENT INFORMATION | |
Number of operating segments (segments) | 3 |
RATIONALIZATION AND ASSET IMP_3
RATIONALIZATION AND ASSET IMPAIRMENTS (Summary of Activity Related to Rationalization Liabilities by Segment) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Activity related to the rationalization liabilities by segment | |
Balance at the beginning of the period | $ 13,622 |
Payments and other adjustments | (4,570) |
Charged to expense | 4,103 |
Balance at the end of the period | 13,155 |
Americas Welding [Member] | |
Activity related to the rationalization liabilities by segment | |
Balance at the beginning of the period | 25 |
Payments and other adjustments | (25) |
Charged to expense | 0 |
Balance at the end of the period | 0 |
International Welding [Member] | |
Activity related to the rationalization liabilities by segment | |
Balance at the beginning of the period | 13,597 |
Payments and other adjustments | (4,545) |
Charged to expense | 4,103 |
Balance at the end of the period | $ 13,155 |
RATIONALIZATION AND ASSET IMP_4
RATIONALIZATION AND ASSET IMPAIRMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | |||
Rationalization and asset impairment charges (gains) | $ 4,163 | $ 6,521 | |
Restructuring liability | 13,155 | $ 13,622 | |
Americas Welding [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Rationalization and asset impairment charges (gains) | 1,190 | ||
Restructuring liability | 0 | 25 | |
International Welding [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Rationalization and asset impairment charges (gains) | 4,163 | $ 5,331 | |
Restructuring liability | 13,155 | $ 13,597 | |
Restructure Plans 2020 [Member] | International Welding [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring liability | $ 13,155 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Accumulated Other Comprehensive Loss Income [Line Items] | ||
Accumulated other comprehensive loss, Beginning Balance | $ (302,190) | $ (275,850) |
Other comprehensive income (loss) before reclassification | (14,916) | (72,879) |
Amounts reclassified from AOCI | 4,682 | 552 |
Net current-period other comprehensive income (loss) | (10,234) | (72,327) |
Accumulated other comprehensive loss, Ending Balance | (312,424) | (348,177) |
Net sales (Note 2) | 757,021 | 701,991 |
Income taxes | 23,020 | 20,370 |
Cost of goods sold | 503,254 | 464,669 |
Other Comprehensive (Income) Loss, Net of Tax, Portion Attributable to Noncontrolling Interest | (159) | (41) |
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges | ||
Accumulated Other Comprehensive Loss Income [Line Items] | ||
Accumulated other comprehensive loss, Beginning Balance | 2,487 | 1,626 |
Other comprehensive income (loss) before reclassification | 7,066 | (2,312) |
Amounts reclassified from AOCI | 224 | (57) |
Net current-period other comprehensive income (loss) | 7,290 | (2,369) |
Accumulated other comprehensive loss, Ending Balance | 9,777 | (743) |
Defined benefit pension plan activity | ||
Accumulated Other Comprehensive Loss Income [Line Items] | ||
Accumulated other comprehensive loss, Beginning Balance | (101,770) | (70,546) |
Other comprehensive income (loss) before reclassification | 602 | 0 |
Amounts reclassified from AOCI | 4,458 | 609 |
Net current-period other comprehensive income (loss) | 5,060 | 609 |
Accumulated other comprehensive loss, Ending Balance | (96,710) | (69,937) |
Currency translation adjustment | ||
Accumulated Other Comprehensive Loss Income [Line Items] | ||
Accumulated other comprehensive loss, Beginning Balance | (202,907) | (206,930) |
Other comprehensive income (loss) before reclassification | (22,584) | (70,567) |
Amounts reclassified from AOCI | 0 | 0 |
Net current-period other comprehensive income (loss) | (22,584) | (70,567) |
Accumulated other comprehensive loss, Ending Balance | (225,491) | (277,497) |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Defined benefit pension plan activity | ||
Accumulated Other Comprehensive Loss Income [Line Items] | ||
Income taxes | 1,456 | 164 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Sales | Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges | ||
Accumulated Other Comprehensive Loss Income [Line Items] | ||
Net sales (Note 2) | 102 | (41) |
Income taxes | 42 | (21) |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cost of goods sold | Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges | ||
Accumulated Other Comprehensive Loss Income [Line Items] | ||
Income taxes | 133 | (24) |
Cost of goods sold | $ 326 | $ (98) |
COMMON STOCK REPURCHASE PROGR_2
COMMON STOCK REPURCHASE PROGRAM (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2021 | Feb. 12, 2020 | |
COMMON STOCK REPURCHASE PROGRAM | ||
Shares authorized for repurchase under share repurchase program (in shares) | 55,000,000 | 10,000,000 |
Shares purchased in the open market under share repurchase program (in shares) | 200,000 | |
Average cost per share of shares purchased in the open market under share repurchase program (in dollars per share) | $ 120.55 | |
Remaining shares available for repurchase under the stock repurchase program (in shares) | 11,200,000 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
INVENTORY | ||
Raw materials | $ 115,278 | $ 111,888 |
Work-in-process | 67,097 | 60,341 |
Finished goods | 233,526 | 209,029 |
Inventories, net | $ 415,901 | $ 381,258 |
Percentage of total inventories valued using the LIFO method (as a percent) | 36.00% | 35.00% |
Excess of current cost over LIFO cost | $ 79,435 | $ 75,581 |
LEASES Leases (Details)
LEASES Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
LEASES | ||
Operating Lease, Weighted Average Remaining Lease Term | 7 years 2 months 12 days | |
Lease, Cost | $ 5,051 | $ 5,219 |
Operating Lease, Payments | 3,389 | 4,097 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 0 | $ 2,035 |
Operating Lease, Weighted Average Discount Rate, Percent | 3.50% |
LEASES Schedule of Leases in Ba
LEASES Schedule of Leases in Balance Sheets (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
LEASES | ||
Operating Lease, Right-of-Use Asset | $ 39,936 | $ 43,570 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:OtherAssets | us-gaap:OtherAssets |
Operating Lease, Liability, Current | $ 10,652 | $ 11,502 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other Liabilities, Current | Other Liabilities, Current |
Operating Lease, Liability, Noncurrent | $ 31,175 | $ 33,988 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent |
Operating Lease, Liability | $ 41,827 | $ 45,490 |
LEASES Maturities of Lease Liab
LEASES Maturities of Lease Liabilities, Operating Leases (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
LEASES | ||
2021 | $ 9,132 | |
2022 | 9,559 | |
2023 | 7,596 | |
2024 | 6,038 | |
2025 | 3,253 | |
After 2025 | 11,713 | |
Total lease payments | 47,291 | |
Less: Imputed interest | (5,464) | |
Operating lease liabilities | $ 41,827 | $ 45,490 |
PRODUCT WARRANTY COSTS (Details
PRODUCT WARRANTY COSTS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Changes in the carrying amount of product warranty accruals | ||
Balance at beginning of year | $ 21,760 | $ 20,650 |
Accruals for warranties | 3,136 | 4,117 |
Settlements | (3,253) | (3,591) |
Foreign currency translation and other adjustments | (156) | (318) |
Balance at end of year | $ 21,487 | $ 20,858 |
DEBT (Long-Term Debt) (Details)
DEBT (Long-Term Debt) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
Oct. 31, 2016 | Apr. 30, 2015 | Mar. 31, 2021 | Dec. 31, 2020 | Oct. 20, 2016 | Apr. 01, 2015 | |
Debt Instrument [Line Items] | ||||||
Amounts due banks | $ 3,607 | $ 2,734 | ||||
Fair value of long-term debt | 739,945 | 793,591 | ||||
Carrying value of long-term debt | $ 715,438 | $ 715,567 | ||||
Senior Notes 2016 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Face Amount | $ 350,000 | |||||
Debt Instrument, Issuance Date | Oct. 20, 2016 | |||||
Senior Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt, Weighted Average Interest Rate | 3.30% | |||||
Debt Instrument, Covenant Compliance | As of March 31, 2021, the Company was in compliance with all of its debt covenants | |||||
Weighted Average [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Term | 13 years 1 month 6 days | |||||
Senior Notes 2015 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Face Amount | $ 350,000 | |||||
Debt Instrument, Issuance Date | Apr. 1, 2015 | |||||
Minimum | Senior Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Face Amount | $ 50,000 | |||||
Debt Instrument, Maturity Date | Aug. 20, 2025 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 2.75% | |||||
Maximum | Senior Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Face Amount | $ 100,000 | |||||
Debt Instrument, Maturity Date | Apr. 1, 2045 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 4.02% |
DEBT (Revolving Credit Agreemen
DEBT (Revolving Credit Agreement) (Details) - USD ($) $ in Thousands | Apr. 23, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | |||
Short-term debt (Note 12) | $ 3,607 | $ 2,734 | |
Revolving credit agreement | |||
Debt Instrument [Line Items] | |||
Borrowing capacity under the line of credit | $ 500,000 | $ 400,000 | |
Credit facility covenant compliance | As of March 31, 2021, the Company was in compliance with all of its covenants | ||
Debt Instrument, Term | 5 years | 5 years | |
Additional increase in borrowing capacity of the line of credit available at the entity's option | $ 150,000 | $ 100,000 | |
Other lines of credit | |||
Debt Instrument [Line Items] | |||
Borrowing capacity under the line of credit | 81,234 | ||
Line of Credit, Current | $ 3,497 |
DEBT (Shelf facility) (Details)
DEBT (Shelf facility) (Details) - Private Placement [Member] $ in Thousands | Nov. 27, 2018USD ($)loan | Mar. 31, 2021 |
Debt Instrument [Line Items] | ||
Number of uncommitted master note facilities | loan | 7 | |
Debt Instrument, Unused Borrowing Capacity, Amount | $ | $ 700,000 | |
Debt Instrument, Term | 5 years | |
Debt Instrument, Covenant Compliance | As of March 31, 2021, the Company was in compliance with all of its covenants | |
Maximum | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Term | 15 years |
RETIREMENT AND POSTRETIREMENT_3
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
United States | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost | $ 49 | $ 39 |
Interest cost | 2,981 | 4,050 |
Expected return on plan assets | (4,509) | (5,711) |
Amortization of prior service cost | 0 | 0 |
Amortization of net loss | 581 | 203 |
Settlement charges (1) | 4,440 | 0 |
Defined benefit plans | 3,542 | (1,419) |
Multi-employer plans | 0 | 0 |
Defined contribution plans | 5,162 | 5,626 |
Total pension cost | 8,704 | 4,207 |
Foreign Plan [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost | 471 | 756 |
Interest cost | 616 | 696 |
Expected return on plan assets | (972) | (1,007) |
Amortization of prior service cost | 12 | 15 |
Amortization of net loss | 435 | 555 |
Settlement charges (1) | 446 | 0 |
Defined benefit plans | 1,008 | 1,015 |
Multi-employer plans | 244 | 269 |
Defined contribution plans | 845 | 702 |
Total pension cost | $ 2,097 | $ 1,986 |
OTHER INCOME (EXPENSE) (Details
OTHER INCOME (EXPENSE) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
OTHER INCOME (EXPENSE) | ||
Equity earnings in affiliates | $ 176 | $ 162 |
Other components of net periodic pension (cost) income | (4,030) | 1,199 |
Other income (expense) | 2,438 | (1,052) |
Total Other income (expense) | $ (1,416) | $ 309 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
INCOME TAXES | ||
Income taxes | $ 23,020 | $ 20,370 |
Pre-tax income | $ 97,153 | $ 75,925 |
Effective tax rate | 23.70% | 26.80% |
Unrecognized tax benefits | $ 17,768 | |
Unrecognized tax benefits that, if recognized, would be reflected as a component of income tax expense | 14,281 | |
Reasonably possible further reduction in prior years' unrecognized tax benefits during the next twelve months | $ 1,749 |
DERIVATIVES (Fair Value of Deri
DERIVATIVES (Fair Value of Derivative Instruments) (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | $ 4,052 | $ 3,849 |
Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 2,772 | 4,609 |
Other Noncurrent Assets [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 13,510 | 4,876 |
Other Noncurrent Liabilities [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 2,263 | 4,308 |
Designated as Hedging Instruments | Foreign exchange contracts | Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 1,337 | 2,451 |
Designated as Hedging Instruments | Foreign exchange contracts | Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 1,090 | 1,124 |
Designated as Hedging Instruments | Foreign exchange contracts | Other Noncurrent Assets [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 0 | 0 |
Designated as Hedging Instruments | Foreign exchange contracts | Other Noncurrent Liabilities [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 0 | 0 |
Designated as Hedging Instruments | Forward Contracts [Member] | Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 0 | 0 |
Designated as Hedging Instruments | Forward Contracts [Member] | Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 0 | 0 |
Designated as Hedging Instruments | Forward Contracts [Member] | Other Noncurrent Assets [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 13,510 | 4,876 |
Designated as Hedging Instruments | Forward Contracts [Member] | Other Noncurrent Liabilities [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 0 | 0 |
Designated as Hedging Instruments | Cross Currency Interest Rate Contract [Member] | Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 0 | 0 |
Designated as Hedging Instruments | Cross Currency Interest Rate Contract [Member] | Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 0 | 0 |
Designated as Hedging Instruments | 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 Instruments | Cross Currency Interest Rate Contract [Member] | Other Noncurrent Liabilities [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 2,263 | 4,308 |
Not designated as hedging instruments | Foreign exchange contracts | Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 2,715 | 1,398 |
Not designated as hedging instruments | Foreign exchange contracts | Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 1,682 | 3,485 |
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 Noncurrent Liabilities [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | $ 0 | $ 0 |
DERIVATIVES (Derivatives Income
DERIVATIVES (Derivatives Income Statement Impact) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Foreign exchange contracts | Selling, General and Administrative Expenses [Member] | ||
Effects of undesignated derivative instruments on the entity's Consolidated Statements of Income | ||
Gains (losses) recognized in income | $ (1,286) | $ (22,133) |
DERIVATIVES (AOCI Impact) (Deta
DERIVATIVES (AOCI Impact) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Foreign exchange contracts | |||
Fair values of derivative instruments | |||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification and Tax | $ (90) | $ 660 | |
Forward Contracts [Member] | |||
Fair values of derivative instruments | |||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification and Tax | 10,109 | 3,649 | |
Net Investment Hedging [Member] | |||
Fair values of derivative instruments | |||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification and Tax | (242) | $ (1,822) | |
Sales | Foreign exchange contracts | |||
Fair values of derivative instruments | |||
Gain (loss) reclassified from AOCI to earnings | 144 | $ (62) | |
Cost of goods sold | Foreign exchange contracts | |||
Fair values of derivative instruments | |||
Gain (loss) reclassified from AOCI to earnings | $ (458) | $ 122 |
DERIVATIVES (Textual) (Details)
DERIVATIVES (Textual) (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021USD ($)item | Dec. 31, 2020USD ($) | Mar. 31, 2020USD ($) | |
Derivative [Line Items] | |||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | $ (90) | ||
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimate of Time to Transfer | 12 months | ||
Deferred Gain (Loss) on Discontinuation of Interest Rate Fair Value Hedge | $ (6,629) | ||
Interest Rate Swap [Member] | |||
Derivative [Line Items] | |||
Number of interest rate swap agreements outstanding | item | 0 | ||
Designated as Hedging Instruments | Foreign exchange contracts | |||
Derivative [Line Items] | |||
Derivative Asset, Notional Amount | $ 67,654 | $ 69,051 | |
Designated as Hedging Instruments | Net Investment Hedging [Member] | |||
Derivative [Line Items] | |||
Derivative Asset, Notional Amount | 50,000 | 50,000 | |
Designated as Hedging Instruments | Forward Contracts [Member] | |||
Derivative [Line Items] | |||
Derivative Asset, Notional Amount | 100,000 | ||
Designated as Hedging Instruments | Terminated Interest Rate Swap [Member] | |||
Derivative [Line Items] | |||
Derivative Asset, Notional Amount | 50,000 | ||
Not designated as hedging instruments | Foreign exchange contracts | |||
Derivative [Line Items] | |||
Derivative Asset, Notional Amount | $ 585,340 | $ 391,112 |
FAIR VALUE (Summary of Fair Val
FAIR VALUE (Summary of Fair Value Assets and Liabilities) (Details) - Recurring basis - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Assets: | ||
Total assets | $ 17,562 | $ 8,725 |
Liabilities: | ||
Deferred compensation | 40,775 | 41,539 |
Total liabilities | 45,810 | 50,456 |
Foreign exchange contracts | ||
Assets: | ||
Assets | 4,052 | 3,849 |
Liabilities: | ||
Liabilities | 2,772 | 4,609 |
Forward Contracts [Member] | ||
Assets: | ||
Assets | 13,510 | |
Interest Rate Swap [Member] | ||
Assets: | ||
Assets | 4,876 | |
Net Investment Hedging [Member] | ||
Liabilities: | ||
Liabilities | 2,263 | 4,308 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Deferred compensation | 0 | 0 |
Total liabilities | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Foreign exchange contracts | ||
Assets: | ||
Assets | 0 | 0 |
Liabilities: | ||
Liabilities | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Forward Contracts [Member] | ||
Assets: | ||
Assets | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest Rate Swap [Member] | ||
Assets: | ||
Assets | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Net Investment Hedging [Member] | ||
Liabilities: | ||
Liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Total assets | 17,562 | 8,725 |
Liabilities: | ||
Deferred compensation | 40,775 | 41,539 |
Total liabilities | 45,810 | 50,456 |
Significant Other Observable Inputs (Level 2) | Foreign exchange contracts | ||
Assets: | ||
Assets | 4,052 | 3,849 |
Liabilities: | ||
Liabilities | 2,772 | 4,609 |
Significant Other Observable Inputs (Level 2) | Forward Contracts [Member] | ||
Assets: | ||
Assets | 13,510 | |
Significant Other Observable Inputs (Level 2) | Interest Rate Swap [Member] | ||
Assets: | ||
Assets | 4,876 | |
Significant Other Observable Inputs (Level 2) | Net Investment Hedging [Member] | ||
Liabilities: | ||
Liabilities | 2,263 | 4,308 |
Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Deferred compensation | 0 | 0 |
Total liabilities | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Foreign exchange contracts | ||
Assets: | ||
Assets | 0 | 0 |
Liabilities: | ||
Liabilities | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Forward Contracts [Member] | ||
Assets: | ||
Assets | 0 | |
Significant Unobservable Inputs (Level 3) | Interest Rate Swap [Member] | ||
Assets: | ||
Assets | 0 | |
Significant Unobservable Inputs (Level 3) | Net Investment Hedging [Member] | ||
Liabilities: | ||
Liabilities | $ 0 | $ 0 |