69 added · 69 removed between the two most recent 10-Ks. The risks a company starts — or stops — disclosing are often the story.
Newly disclosed
Results of Operations The following table shows the Company’s results of operations: Year Ended December 31, Favorable (Unfavorable) 2025 2024 2025 vs. 2024 Amount % of Sales Amount % of Sales $ % Net sales $ 4,233,003 $ 4,008,670 $ 224,333 5.6 % Cost of goods sold 2,698,751 2,535,758 (162,993) (6.4) % Gross profit 1,534,252 36.2 % 1,472,912 36.7 % 61,340 4.2 % Selling, general & administrative expenses 797,994 18.9 % 780,590 19.5 % (17,404) (2.2) % Rationalization and asset impairment net charges 18,199 0.4 % 55,860 1.4 % 37,661 67.4 % Operating income 718,059 17.0 % 636,462 15.9 % 81,597 12.8 % Interest expense, net 51,561 42,786 (8,775) (20.5) % Other income 8,952 473 8,479 1,792.6 % Income before income taxes 675,450 16.0 % 594,149 14.8 % 81,301 13.7 % Income taxes 154,917 128,041 (26,876) (21.0) % Effective tax rate 22.9 % 21.6 % (1.3) % Net income $ 520,533 12.3 % $ 466,108 11.6 % $ 54,425 11.7 % Diluted earnings per share $ 9.32 $ 8.15 $ 1.17 14.4 % 20 Table of Contents Net Sales: T he following table summarizes the impacts of volume, acquisitions, price and foreign currency exchange rates on Net sales for the year ended December 31, 2025 on a consolidated basis: Change in Net Sales due to: Net Sales Foreign Net Sales 2024 Volume Price Acquisitions Exchange 2025 Lincoln Electric Holdings, Inc. $ 4,008,670 $ (147,682) $ 246,540 $ 106,478 $ 18,997 $ 4,233,003 % Change Lincoln Electric Holdings, Inc. (3.7) % 6.2 % 2.7 % 0.4 % 5.6 % Net sales increased for the year ended December 31, 2025 primarily due to an increase in organic sales and a benefit from acquisitions.
(3) Adjusted EBIT and Adjusted EBIT as a percent of sales increased for 2025 as compared to 2024 primarily as a result of higher organic sales and effective cost management. 23 Table of Contents (4) 2025 primarily excludes Rationalization and asset impairment net charges of $9,838 and pension settlement charges of $647 . 2024 primarily excludes Rationalization and asset impairment net charges of $18,840 and amortization of the step up in value of acquired inventories of $4,776 and pension settlement charges of $4,205 .
Organic sales, reflects changes in volumes and prices, and excludes the effects of foreign currency and acquisitions. 24 Table of Contents The following table presents the reconciliations of Operating income as reported to Adjusted operating income, Net income as reported to Adjusted net income and Adjusted EBIT, Effective tax rate as reported to Adjusted effective tax rate and Diluted earnings per share as reported to Adjusted diluted earnings per share: Year Ended December 31, 2025 2024 Operating income as reported $ 718,059 $ 636,462 Special items (pre-tax): Rationalization and asset impairment net charges (1) 18,199 55,860 Acquisition transaction costs (2) 2,739 7,042 Amortization of step up in value of acquired inventories (3) 3,964 5,026 Adjusted operating income $ 742,961 $ 704,390 As a percentage of net sales 17.6% 17.6% Net income as reported $ 520,533 $ 466,108 Special items: Rationalization and asset impairment net charges (1) 18,199 55,860 Acquisition transaction costs (2) 2,739 7,042 Amortization of step up in value of acquired inventories (3) 3,964 5,026 Pension settlement net charges (4) 719 3,792 Loss on asset disposal (5) — 4,950 Tax effect of Special items (6) (7) 5,177 (11,513) Adjusted net income 551,331 531,265 Interest expense, net 51,561 42,786 Income taxes as reported 154,917 128,041 Tax effect of Special items (6) (7) (5,177) 11,513 Adjusted EBIT $ 752,632 $ 713,605 Effective tax rate as reported 22.9 % 21.6 % Net special item tax impact (7) (1.5) % (0.8) % Adjusted effective tax rate 21.4 % 20.8 % Diluted earnings per share as reported $ 9.32 $ 8.15 Special items per share 0.55 1.14 Adjusted diluted earnings per share $ 9.87 $ 9.29 (1) 2025 and 2024 net charges primarily relate to rationalization plans within all three segments.
Cash Flow The following table reflects changes in key cash flow measures: Year Ended December 31, $ Change 2025 2024 2025 vs. 2024 Cash provided by operating activities (1) $ 661,173 $ 598,977 $ 62,196 Cash used by investing activities (257,326) (361,231) 103,905 Capital expenditures (126,974) (116,603) (10,371) Acquisition of businesses, net of cash acquired (137,530) (252,746) 115,216 Cash used by financing activities (2) (461,887) (244,640) (217,247) Proceeds from (payments on) short-term borrowings 133,252 8,449 124,803 Proceeds from long-term borrowings — 550,000 (550,000) Payments on long-term borrowings (100,169) (400,677) 300,508 Purchase of shares for treasury (338,308) (263,751) (74,557) Cash dividends paid to shareholders (168,240) (162,143) (6,097) (Decrease) increase in Cash and cash equivalents (68,473) (16,525) (51,948) (1) Cash provided by operating activities increased in 2025 as compared to 2024 primarily due to the net favorable impacts of the election of provisions from the OBBBA, partially offset by unfavorable working capital.
Harris Co., Inc., Lincoln Global, Inc, Lincoln Electric Automation, Inc. and the purchasers party thereto (filed as Exhibit 10.1 to Form 8-K of Lincoln Electric Holdings, Inc., filed on June 24, 2024, SEC File No. 0-1402, and incorporated herein by reference and made part hereof). 36 Table of Contents 10.8* Non-Employee Directors’ Deferred Compensation Plan (Amended and Restated as of January 1, 2021) (filed as Exhibit 10.18 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2020, SEC File No. 0-1402, and incorporated herein by reference and made a part hereof). 10.9* 2005 Deferred Compensation Plan for Executives (Amended and Restated as of January 1, 2021) (filed as Exhibit 10.21 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2020, SEC File No. 0-1402, and incorporated herein by reference and made a part hereof). 10.10* The Lincoln Electric Company Restoration Plan (filed as Exhibit 4.3 to Form S-8 of Lincoln Electric Holdings, Inc. filed on December 19, 2016, SEC File No. 333-215168, and incorporated herein by reference and made a part hereof). 10.11* Amendment No. 1 to The Lincoln Electric Company Restoration Plan (filed as Exhibit 10.3 to Form 10-Q of Lincoln Electric Holdings, Inc. for the quarter ended September 30, 2020, SEC File No. 0-1402, and incorporated herein by reference and made a part hereof). 10.12* The Lincoln Electric Company Employee Savings Plan As Amended and Restated Effective January 1, 2025 (filed as Exhibit 10.12 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2024, SEC File No. 0-1402, and incorporated herein by reference and made a part hereof). 10.13* Form of Change in Control Severance Agreement (as entered into by the Company and its executive officers) (filed as Exhibit 10.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on November 21, 2017, SEC File No. 0-1402, and incorporated herein by reference and made a part hereof). 10.14* Amendment No. 1 to Form of Change in Control Severance Agreement (as entered into by the Company and its executive officers) (filed as Exhibit 10.5 to Form 10-Q of Lincoln Electric Holdings, Inc. for the quarter ended September 30, 2020, SEC File No. 0-1402, and incorporated herein by reference and made a part hereof). 10.15* Lincoln Electric Holdings, Inc.
The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates. F-1 Table of Contents Goodwill impairment evaluation – Reporting unit subject to quantitative assessment Description of the Matter As disclosed in Note 5 to the consolidated financial statements, at December 31, 2025, the Company’s total goodwill was $887 million.
Rationalization and Asset Impairment Net Charges: Charges in 2025 and 2024 relate to rationalization plans within all three reportable segments .
Changes in economic and operating conditions, actual growth below the assumed market participant assumptions or an increase in the discount rate could result in an impairment charge in a future period. 31 Table of Contents Acquisitions Upon acquisition of a business, the Company uses the income, market or cost approach (or a combination thereof) for the valuation as appropriate.
As disclosed in Note 1 to the consolidated financial statements, goodwill is tested for impairment in the fourth quarter using the same date each year or more frequently if changes in circumstances or the occurrence of events indicate potential impairment.
The Company first assesses qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount and whether it is necessary to perform a quantitative goodwill impairment test.
How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment evaluation, including controls over the significant assumption mentioned above.
To test the estimated fair value used in the Company’s annual goodwill impairment test for the reporting unit, our audit procedures included, among others, assessing the valuation methodology, testing the weighted average cost of capital, and performing sensitivity analyses of underlying assumptions to evaluate their responsiveness to changes for significance.
No longer disclosed
Results of Operations The following table shows the Company’s results of operations: Year Ended December 31, Favorable (Unfavorable) 2024 2023 2024 vs. 2023 Amount % of Sales Amount % of Sales $ % Net sales $ 4,008,670 $ 4,191,636 $ (182,966) (4.4) % Cost of goods sold 2,535,758 2,726,191 190,433 7.0 % Gross profit 1,472,912 36.7 % 1,465,445 35.0 % 7,467 0.5 % Selling, general & administrative expenses 780,590 19.5 % 758,910 18.1 % (21,680) (2.9) % Rationalization and asset impairment net charges 55,860 1.4 % (11,314) (0.3) % (67,174) (593.7) % Operating income 636,462 15.9 % 717,849 17.1 % (81,387) (11.3) % Interest expense, net 42,786 44,371 1,585 3.6 % Other income 473 13,388 (12,915) (96.5) % Income before income taxes 594,149 14.8 % 686,866 16.4 % (92,717) (13.5) % Income taxes 128,041 141,618 13,577 9.6 % Effective tax rate 21.6 % 20.6 % (1.0) % Net income $ 466,108 11.6 % $ 545,248 13.0 % $ (79,140) (14.5) % Diluted earnings per share $ 8.15 $ 9.37 $ (1.22) (13.0) % 19 Table of Contents Net Sales: T he following table summarizes the impacts of volume, acquisitions, price and foreign currency exchange rates on Net sales for the twelve months ended December 31, 2024 on a consolidated basis: Change in Net Sales due to: Net Sales Foreign Net Sales 2023 Volume Acquisitions Price Exchange 2024 Lincoln Electric Holdings, Inc. $ 4,191,636 $ (301,161) $ 102,757 $ 30,398 $ (14,960) $ 4,008,670 % Change Lincoln Electric Holdings, Inc. (7.2) % 2.5 % 0.7 % (0.4) % (4.4) % Net sales decreased primarily due to softer demand across all segments.
Rationalization and Asset Impairment Net Charges: Net charges in 2024 of $55,860 primarily relate to rationalization plans initiated in the third quarter of 2024 in all three segments, as well as previously initiated plans and the disposition of the Company’s Russian entity in International Welding .
The following table presents a reconciliation of Operating income as reported to Adjusted operating income: Year Ended December 31, 2024 2023 Operating income as reported $ 636,462 $ 717,849 Special items (pre-tax): Rationalization and asset impairment net charges (1) 55,860 (11,314) Acquisition transaction costs (2) 7,042 — Amortization of step up in value of acquired inventories (3) 5,026 12,252 Adjusted operating income $ 704,390 $ 718,787 As a percent of total sales 17.6% 17.1% (1) 2024 charges primarily relate to rationalization plans initiated in the third quarter of 2024 in all three segments, as well as previously initiated plans and the disposition of the Company’s Russian entity in International Welding . 2023 net gains primarily relates to the gain on sale of a property, partially offset by charges within International Welding.
(3) Costs related to acquisitions which are included in Cost of goods sold. 23 Table of Contents The following table presents the reconciliations of Net income as reported to Adjusted net income and Adjusted EBIT, Effective tax rate as reported to Adjusted effective tax rate and Diluted earnings per share as reported to Adjusted diluted earnings per share: Year Ended December 31, 2024 2023 Net income as reported $ 466,108 $ 545,248 Special items: Rationalization and asset impairment net charges (1) 55,860 (11,314) Acquisition transaction costs (2) 7,042 — Pension settlement net charges (3) 3,792 845 Amortization of step up in value of acquired inventories (4) 5,026 12,252 Loss (gain) on asset disposal (5) 4,950 (1,646) Tax effect of Special items (6) (11,513) 2,537 Adjusted net income $ 531,265 $ 547,922 Interest expense, net 42,786 44,371 Income taxes as reported 128,041 141,618 Tax effect of Special items (6) 11,513 (2,537) Adjusted EBIT $ 713,605 $ 731,374 Effective tax rate as reported 21.6 % 20.6 % Net special item tax impact (0.8) % (0.4) % Adjusted effective tax rate 20.8 % 20.2 % Diluted earnings per share as reported $ 8.15 $ 9.37 Special items per share 1.14 0.04 Adjusted diluted earnings per share $ 9.29 $ 9.41 (1) Items in 2024 primarily relate to rationalization plans initiated in the third quarter of 2024 in all three segments, as well as previously initiated plans and the disposition of the Company’s Russian entity in International Welding .
Cash Flow The following table reflects changes in key cash flow measures: Year Ended December 31, $ Change 2024 2023 2024 vs. 2023 Cash provided by operating activities (1) $ 598,977 $ 667,542 $ (68,565) Cash used by investing activities (2) (361,231) (74,729) (286,502) Capital expenditures (116,603) (90,987) (25,616) Acquisition of businesses, net of cash acquired (252,746) (32,685) (220,061) Proceeds from sale of property, plant and equipment 7,798 49,494 (41,696) Cash used by financing activities (3) (244,640) (412,392) 167,752 Proceeds from (payments on) short-term borrowings 8,449 (79,873) 88,322 Proceeds from long-term borrowings 550,000 — 550,000 Payments on long-term borrowings (400,677) (8,109) (392,568) Purchase of shares for treasury (263,751) (198,765) (64,986) Cash dividends paid to shareholders (162,143) (148,010) (14,133) (Decrease) increase in Cash and cash equivalents (16,525) 196,637 (213,162) (1) Cash provided by operating activities decreased in 2024 as compared to 2023 primarily due to decreased earnings and working capital.
The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates. F-1 Table of Contents Purchase price allocation related to the acquisition of Superior Controls, LLC (“RedViking”) Description of the Matter As disclosed in Note 4 to the consolidated financial statements, on April 1, 2024, the Company acquired 100% ownership of RedViking.
Net gains in 2023 primarily reflect a gain on the sale of a property of $36,187, partially offset by Rationalization and asset impairment charges of $24,873 primarily within International Welding.
(2) Cash used by investing activities increased in 2024 as compared to 2023 primarily for capital expenditures and the acquisition of businesses in 2024.
Items in 2023 reflects a gain on the sale of a property, partially offset by Rationalization and asset impairment charges within International Welding.
For example, we tested controls over management’s review of the significant assumptions described above along with the completeness and accuracy of the data used in these fair value estimates.
Income taxes: The effective tax rate was higher in 2024 as compared to 2023 primarily due to the mix of earnings and discrete tax items. 20 Table of Contents Segment Results Net Sales: The table below summarizes the impacts of volume, acquisitions, price and foreign currency exchange rates on Net sales for the twelve months ended December 31, 2024: Change in Net Sales due to: Net Sales Foreign Net Sales 2023 Volume (1) Acquisitions (2) Price (3) Exchange 2024 Operating Segments Americas Welding $ 2,655,546 $ (192,454) $ 101,097 $ 10,770 $ (10,112) $ 2,564,847 International Welding 1,040,006 (96,658) 1,660 (8,413) (2,873) 933,722 The Harris Products Group 496,084 (12,049) — 28,041 (1,975) 510,101 % Change Americas Welding (7.2) % 3.8 % 0.4 % (0.4) % (3.4) % International Welding (9.3) % 0.2 % (0.8) % (0.3) % (10.2) % The Harris Products Group (2.4) % — 5.7 % (0.4) % 2.8 % (1) Decrease in all segments due to softer demand across broad industrial markets.