[10-Q] LINCOLN ELECTRIC HOLDINGS INC Quarterly Earnings Report

Q: How did Lincoln Electric (LECO) perform in Q3 2025?

Q3 net sales were $1,061,227,000 vs. $983,759,000 a year ago, and diluted EPS was $2.21 vs. $1.77.

Q: What debt actions did Lincoln Electric take in 2025?

It repaid $100,000,000 of 2015 Series A notes at maturity on August 20, 2025 and had $85,000,000 outstanding on its revolver.

Q: How did new U.S. tax law affect LECO in Q3 2025?

The OBBBA resulted in about $8,800,000 of tax expense; the company expects lower tax payments in the current year.

Q: What were LECO’s shares outstanding at quarter-end?

Common shares outstanding were 55,026,176 as of September 30, 2025.

Q: How did segment sales trend in Q3 2025?

Consumables net sales were $590,873,000 and Equipment net sales were $470,354,000 .

Filing Impact

(Moderate)

Filing Sentiment

(Neutral)

Form Type

10-Q

Rhea-AI Filing Summary

Lincoln Electric Holdings (LECO) reported stronger Q3 results. Net sales were $1,061,227,000, up from $983,759,000 a year ago, and diluted EPS rose to $2.21 from $1.77. Operating income increased to $176,657,000 from $145,560,000 as gross profit reached $389,311,000. For the first nine months, revenue was $3,154,288,000 and diluted EPS was $6.86, both higher year over year.

Cash generation remained solid. Net cash provided by operating activities was $566,208,000 for the nine months, funding capital expenditures of $84,028,000, dividends of $126,476,000, and treasury share purchases of $286,488,000. The company repaid its $100,000,000 2015 Series A notes at maturity on August 20, 2025 and had $85,000,000 drawn on its $1 billion revolver at quarter-end.

Lincoln completed the acquisition of Alloy Steel Australia for $131,238,000 (net), expanding solutions for the mining sector. The One Big Beautiful Bill Act resulted in approximately $8,800,000 of tax expense in Q3; the company expects lower tax payments in the current year. Shares outstanding were 55,026,176 as of September 30, 2025.

Insights

Q3 showed margin and EPS gains, with steady cash flow.

Lincoln Electric delivered higher sales and operating income, with Q3 net sales of $1,061,227,000 and operating income of $176,657,000. Diluted EPS rose to $2.21, reflecting improved gross profit and controlled special charges. For the nine months, revenue reached $3,154,288,000 and diluted EPS was $6.86.

Cash generation was robust: operating cash flow of $566,208,000 supported capex, dividends, and buybacks, while long-term debt remained stable after repaying $100,000,000 of 2015 Series A notes. The revolver balance was $85,000,000 at quarter-end under a facility maturing in 2029.

Strategically, the $131,238,000 Alloy Steel acquisition adds mining-focused technology and services. The OBBBA tax law added about $8,800,000 of tax expense in Q3, though the company expects lower tax payments this year. Subsequent filings may provide additional detail on integration benefits and tax effects.

10/30/2025 - 01:36 PM

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________

Commission File Number: 0-1402

LINCOLN ELECTRIC HOLDINGS, INC.

(Exact name of registrant as specified in its charter)


Ohio		34-1860551
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

22801 St. Clair Avenue, Cleveland, Ohio		44117
(Address of principal executive offices)		(Zip Code)

(216) 481-8100

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of exchange on which registered
Common Shares, without par value	LECO	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ⌧ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ⌧ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “small reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ⌧

The number of shares outstanding of the registrant’s common shares as of September 30, 2025 was 55,026,176.

Table of Contents

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION		3
Item 1. Financial Statements		3
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)		3
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)		4
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)		5
CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)		6
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)		8
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS		9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		24
Item 3. Quantitative and Qualitative Disclosures About Market Risk		35
Item 4. Controls and Procedures		35

PART II. OTHER INFORMATION		35
Item 1. Legal Proceedings		35
Item 1A. Risk Factors		35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		36
Item 4. Mine Safety Disclosures		36
Item 5. Other Information		36
Item 6. Exhibits		37
Signatures		38

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

LINCOLN ELECTRIC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(In thousands, except per share amounts)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
Net sales (Note 2)	$	1,061,227	$	983,759	$	3,154,288	$	2,986,639
Cost of goods sold		671,916		631,681		1,993,982		1,882,349
Gross profit		389,311		352,078		1,160,306		1,104,290
Selling, general & administrative expenses		206,823		186,291		614,349		593,523
Rationalization and asset impairment net charges (Note 6)		5,831		20,227		12,238		51,322
Operating income		176,657		145,560		533,719		459,445
Interest expense, net		13,648		11,974		38,394		31,414
Other income (expense)		2,986		(1,644)		7,464		(935)
Income before income taxes		165,995		131,942		502,789		427,096
Income taxes (Note 11)		43,367		31,186		118,278		101,217
Net income	$	122,628	$	100,756	$	384,511	$	325,879

Basic earnings per share (Note 3)	$	2.23	$	1.78	$	6.92	$	5.74
Diluted earnings per share (Note 3)	$	2.21	$	1.77	$	6.86	$	5.68
Cash dividends declared per share	$	0.75	$	0.71	$	2.25	$	2.13

See notes to these consolidated financial statements.

Table of Contents

LINCOLN ELECTRIC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(In thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Net income	$	122,628	$	100,756	$	384,511	$	325,879
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges		83		(960)		1,085		(6)
Defined benefit pension plan activity		(685)		2,772		(2,007)		2,851
Currency translation adjustment		(651)		12,267		89,147		(8,824)
Other comprehensive income (loss):		(1,253)		14,079		88,225		(5,979)
Comprehensive income	$	121,375	$	114,835	$	472,736	$	319,900

See notes to these consolidated financial statements.

Table of Contents

LINCOLN ELECTRIC HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)


	September 30, 2025		December 31, 2024
	(UNAUDITED)		(NOTE 1)
ASSETS
Current Assets
Cash and cash equivalents	$	292,997	$	377,262
Accounts receivable (less allowance for doubtful accounts of $15,089 in 2025; $12,674 in 2024)		501,538		481,979
Inventories (Note 8)		671,515		544,037
Other current assets		313,922		242,003
Total Current Assets		1,779,972		1,645,281
Property, plant and equipment (less accumulated depreciation of $928,004 in 2025; $865,634 in 2024)		677,257		619,181
Goodwill		887,885		804,927
Other assets		469,991		450,753
TOTAL ASSETS	$	3,815,105	$	3,520,142
LIABILITIES AND EQUITY
Current Liabilities
Short-term debt (Note 10)	$	88,203	$	110,524
Trade accounts payable		398,721		296,590
Accrued employee compensation and benefits		212,626		104,374
Other current liabilities		339,874		367,314
Total Current Liabilities		1,039,424		878,802
Long-term debt, less current portion (Note 10)		1,150,315		1,150,551
Other liabilities		210,733		163,356
Total Liabilities		2,400,472		2,192,709
Shareholders' Equity
Common shares, without par value - at stated capital amount; authorized 240,000,000 shares; issued 98,581,434 shares in 2025 and 2024; outstanding 55,026,176 shares in 2025 and 56,211,219 in 2024		9,858		9,858
Additional paid-in capital		595,644		566,740
Retained earnings		4,247,355		3,993,016
Accumulated other comprehensive loss		(211,910)		(300,135)
Treasury shares, at cost - 43,555,258 shares in 2025 and 42,370,215 shares in 2024		(3,226,314)		(2,942,046)
Total Equity		1,414,633		1,327,433
TOTAL LIABILITIES AND TOTAL EQUITY	$	3,815,105	$	3,520,142

See notes to these consolidated financial statements.

Table of Contents

LINCOLN ELECTRIC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED)

(In thousands, except per share amounts)


								Accumulated
	Common			Additional				Other
	Shares	Common		Paid-In		Retained		Comprehensive		Treasury
	Outstanding	Shares		Capital		Earnings		Income (Loss)		Shares		Total
Balance at December 31, 2024	56,211	$	9,858	$	566,740	$	3,993,016	$	(300,135)	$	(2,942,046)	$	1,327,433
Net income							118,487						118,487
Defined benefit pension plan activity, net of tax									(1,285)				(1,285)
Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax									829				829
Currency translation adjustment, net of tax									29,679				29,679
Cash dividends declared – $0.75 per share							(42,073)						(42,073)
Stock-based compensation activity	157				13,105						1,501		14,606
Purchase of shares for treasury	(542)										(106,694)		(106,694)
Other					1,405		(2,217)						(812)
Balance at March 31, 2025	55,826	$	9,858	$	581,250	$	4,067,213	$	(270,912)	$	(3,047,239)	$	1,340,170
Net income							143,396						143,396
Defined benefit pension plan activity, net of tax									(37)				(37)
Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax									173				173
Currency translation adjustment, net of tax									60,119				60,119
Cash dividends declared – $0.75 per share							(41,080)						(41,080)
Stock-based compensation activity	8				3,985						80		4,065
Purchase of shares for treasury	(648)										(127,130)		(127,130)
Other					999		(1,062)						(63)
Balance at June 30, 2025	55,186	$	9,858	$	586,234	$	4,168,467	$	(210,657)	$	(3,174,289)	$	1,379,613
Net income							122,628						122,628
Defined benefit pension plan activity, net of tax									(685)				(685)
Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax									83				83
Currency translation adjustment, net of tax									(651)				(651)
Cash dividends declared – $0.75 per share							(41,449)						(41,449)
Stock-based compensation activity	66				6,661						639		7,300
Purchase of shares for treasury	(226)										(52,664)		(52,664)
Other					2,749		(2,291)						458
Balance at September 30, 2025	55,026	$	9,858	$	595,644	$	4,247,355	$	(211,910)	$	(3,226,314)	$	1,414,633

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LINCOLN ELECTRIC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED)

(In thousands, except per share amounts)


								Accumulated
	Common			Additional				Other
	Shares	Common		Paid-In		Retained		Comprehensive		Treasury
	Outstanding	Shares		Capital		Earnings		Income (Loss)		Shares		Total
Balance at December 31, 2023	56,977	$	9,858	$	523,357	$	3,688,038	$	(229,847)	$	(2,682,554)	$	1,308,852
Net income							123,415						123,415
Defined benefit pension plan activity, net of tax									73				73
Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax									3,715				3,715
Currency translation adjustment, net of tax									(13,395)				(13,395)
Cash dividends declared – $0.71 per share							(41,273)						(41,273)
Stock-based compensation activity	397				34,981						3,647		38,628
Purchase of shares for treasury	(466)										(110,405)		(110,405)
Other					2,101		(3,883)						(1,782)
Balance at March 31, 2024	56,908	$	9,858	$	560,439	$	3,766,297	$	(239,454)	$	(2,789,312)	$	1,307,828
Net income							101,708						101,708
Defined benefit pension plan activity, net of tax									6				6
Unrealized loss on derivatives designated and qualifying as cash flow hedges, net of tax									(2,761)				(2,761)
Currency translation adjustment, net of tax									(7,696)				(7,696)
Cash dividends declared – $0.71 per share							(40,236)						(40,236)
Stock-based compensation activity	9				4,646						86		4,732
Purchase of shares for treasury	(242)										(50,415)		(50,415)
Other					(5,758)		5,498						(260)
Balance at June 30, 2024	56,675	$	9,858	$	559,327	$	3,833,267	$	(249,905)	$	(2,839,641)	$	1,312,906
Net income							100,756						100,756
Defined benefit pension plan activity, net of tax									2,772				2,772
Unrealized (loss) on derivatives designated and qualifying as cash flow hedges, net of tax									(960)				(960)
Currency translation adjustment, net of tax									12,267				12,267
Cash dividends declared – $0.71 per share							(40,105)						(40,105)
Stock-based compensation activity	17				1,863						160		2,023
Purchase of shares for treasury	(267)										(50,392)		(50,392)
Other					(42)		(35)						(77)
Balance at September 30, 2024	56,425	$	9,858	$	561,148	$	3,893,883	$	(235,826)	$	(2,889,873)	$	1,339,190

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LINCOLN ELECTRIC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)


	Nine Months Ended September 30,
	2025		2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	384,511	$	325,879
Adjustments to reconcile Net income to Net cash provided by operating activities:
Rationalization and asset impairment net charges		1,211		25,919
Depreciation and amortization		72,990		65,095
Deferred income taxes		71,395		(13,340)
Stock-based compensation		15,910		19,503
Pension settlement net charges		—		3,966
Other, net		(3,119)		3,321
Changes in operating assets and liabilities, net of effects from acquisitions:
Decrease in accounts receivable		9,430		36,166
Increase in inventories		(87,222)		(21,696)
Increase in other current assets		(66,050)		(19,911)
Increase (decrease) in trade accounts payable		90,555		(6,888)
Increase in other current liabilities		78,458		67,310
Net change in other assets and liabilities		(1,861)		17,858
NET CASH PROVIDED BY OPERATING ACTIVITIES		566,208		503,182
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(84,028)		(85,117)
Acquisition of businesses, net of cash acquired		(136,655)		(252,746)
Proceeds from sale of property, plant and equipment		6,408		2,506
NET CASH USED BY INVESTING ACTIVITIES		(214,275)		(335,357)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings		77,678		5,521
Proceeds from long-term borrowings		—		550,000
Payments on long-term borrowings		(100,169)		(400,508)
Proceeds from exercise of stock options		10,061		25,880
Purchase of shares for treasury		(286,488)		(211,212)
Cash dividends paid to shareholders		(126,476)		(121,979)
NET CASH USED BY FINANCING ACTIVITIES		(425,394)		(152,298)
Effect of exchange rate changes on Cash and cash equivalents		(10,804)		(5,096)
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(84,265)		10,431

Cash and cash equivalents at beginning of period		377,262		393,787
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	292,997	$	404,218

See notes to these consolidated financial statements.

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands, except per share amounts

NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Lincoln Electric Holdings, Inc. and its wholly-owned and majority-owned subsidiaries for which it has a controlling interest (the “Company”) after elimination of all inter-company accounts, transactions and profits.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these unaudited consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements. However, in the opinion of management, these unaudited consolidated financial statements contain all the adjustments (consisting of normal recurring accruals) considered necessary to present fairly the financial position, results of operations and cash flows for the interim periods. Operating results for the nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025.

The accompanying Condensed Consolidated Balance Sheet at December 31, 2024 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, 2024.

Certain reclassifications have been made to the prior period amounts to conform to the current period presentation, none of which are material.

New Accounting Pronouncements:

This section provides a description of new accounting pronouncements (“Accounting Standards Updates” or “ASUs”) issued by the Financial Accounting Standards Board (“FASB”) that are applicable to the Company.

The following ASU was adopted as of January 1, 2025:

Standard		Description
ASU No. 2023-09, Income Taxes (Topic 740), issued December 2023.		Requires disclosure of specific categories in rate reconciliation and additional information for reconciling items that meet a quantitative threshold, additional information about income taxes paid, and disclosure of disaggregated income tax information. The Company will adopt the required disclosures for the 2025 annual period.

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

The Company is currently evaluating the impact on its financial statements of the following ASUs:







Standard		Description
ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software, issued September 2025		Updates requirements for capitalization of internal-use software costs. The amendments are effective for annual periods beginning after December 15, 2027 and interim periods within those annual reporting periods. Early adoption is permitted.
ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, issued November 2024		Requires enhanced disclosures of specified information about certain costs and expenses. The amendments are effective for annual periods beginning January 1, 2027, and interim periods beginning January 1, 2028. Early adoption is permitted.
ASU No. 2023-06, Disclosure Improvements, issued October 2023		Requires amending certain disclosure and presentation requirements for a variety of topics within the ASC. The effective date for each amended topic in the ASC is either the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or S-K becomes effective, or June 30, 2027, if the SEC has not removed the requirements by that date. Early adoption is prohibited.

NOTE 2 — REVENUE RECOGNITION

The following table presents the Company’s Net sales disaggregated by product line:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Consumables	$	590,873	$	514,575	$	1,706,122	$	1,588,734
Equipment		470,354		469,184		1,448,166		1,397,905
Net sales	$	1,061,227	$	983,759	$	3,154,288	$	2,986,639

Consumable sales consist of welding, brazing and soldering filler metals. Equipment sales consist of arc welding equipment, welding accessories, wire feeding systems, fume control equipment, plasma and oxy-fuel cutting systems, specialty gas regulators, and education solutions; as well as a comprehensive portfolio of automated solutions for joining, cutting, material handling, module assembly, and end of line testing. 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. Approximately 10% of the Company’s Net sales are recognized over time.

At September 30, 2025, the Company recorded $49,608 related to advance customer payments and $43,427 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, 2024, the balances related to advance customer payments and billings in excess of revenue recognized were $63,473 and $57,960, 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 September 30, 2025 and December 31, 2024, the Company recorded $109,078 and $81,781, 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.

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

NOTE 3 — EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Numerator:
Net income	$	122,628	$	100,756	$	384,511	$	325,879
Denominator (shares in 000's):
Basic weighted average shares outstanding		55,097		56,565		55,567		56,749
Effect of dilutive securities - Stock options and awards		477		501		453		600
Diluted weighted average shares outstanding		55,574		57,066		56,020		57,349
Basic earnings per share	$	2.23	$	1.78	$	6.92	$	5.74
Diluted earnings per share	$	2.21	$	1.77	$	6.86	$	5.68

For the three months ended September 30, 2025 and 2024, common shares subject to equity-based awards of 19,416 and 43,250, respectively, were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive. For the nine months ended September 30, 2025 and 2024, common shares subject to equity-based awards of 2,089 and 38,665, respectively, were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive.

NOTE 4 — ACQUISITIONS

The acquired companies discussed below are accounted for as business combinations and are included in the consolidated financial statements as of the date of acquisition. The acquired companies are not material individually, or in the aggregate, to the actual or pro forma Consolidated Statements of Income or Consolidated Statements of Cash Flows; as such, pro forma information related to these acquisitions has not been presented.

On April 1, 2025, the Company acquired a 35% ownership interest of Alloy Steel Australia (Int) Pty Ltd. (“Alloy Steel”), a privately held manufacturer of maintenance and repair solutions headquartered in Perth, Australia. On August 1, 2025, the Company acquired the remaining 65% ownership of Alloy Steel. In total, the Company acquired 100% ownership of Alloy Steel for a total purchase price of $131,238, net of cash acquired and certain debt-like items. Alloy Steel supplies proprietary technology, engineering services and digital monitoring to the mining sector.

On July 30, 2024, the Company acquired 100% ownership of Vanair Manufacturing, LLC (“Vanair”), a privately held, Michigan City, Indiana-based, manufacturer for a total purchase price of $108,651, net of cash acquired and certain debt-like items. Vanair offers a comprehensive portfolio of mobile power solutions, including vehicle-mounted compressors, generators, welders, hydraulics, chargers/boosters and electrified power equipment.

On June 3, 2024, the Company acquired 100% ownership of Inrotech A/S (“Inrotech”), a privately held automation system integration and technology firm headquartered in Odense, Denmark. The purchase price was $42,352, net of cash acquired. Inrotech specializes in automated welding systems that are differentiated by proprietary adaptive intelligence software and computer vision which guides and optimizes the welding process without the need for programming or the use of computer aided design files. The state-of-the-art vision-based technology is used in the shipbuilding, energy, and heavy industry sectors, where welding accessibility can be challenging for traditional automated systems, but precision and quality are mission critical.

On April 1, 2024, the Company acquired 100% ownership of Superior Controls, LLC (“RedViking”), a privately held automation system integrator based in Plymouth, Michigan. The purchase price was $107,447, net of cash acquired.

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

RedViking specializes in the development and integration of state-of-the-art autonomous guided vehicles and mobile robots, custom assembly and dynamic test systems, and proprietary manufacturing execution system software.

The Company recognized acquisition costs of $452 and $1,683 during the three and nine months ended September 30, 2025, respectively, and $610 and $4,551 during the three and nine months ended September 30, 2024, respectively. Acquisition costs are included in Selling, general & administrative expenses on the Consolidated Statements of Income and are expensed as incurred.

NOTE 5 — SEGMENT INFORMATION

The Company’s primary business is the design, development and manufacture of arc welding products, automated joining, assembly and cutting systems, plasma and oxy-fuel cutting equipment. The Company also has a leading global position in brazing and soldering alloys.

The Company’s products include arc welding, brazing and soldering filler metals (consumables), arc welding equipment, plasma and oxyfuel cutting systems, wire feeding systems, fume control equipment, welding accessories, specialty gas regulators, and education solutions; as well as a comprehensive portfolio of automated solutions for joining, cutting, material handling, module assembly, and end of line testing.

The Company has aligned its organizational and leadership structure into three operating segments to support growth strategies and enhance the utilization of the Company’s worldwide resources and global sourcing initiatives. 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 cutting, soldering and brazing businesses, specialty gas equipment, 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. Adjusted EBIT is defined as Operating income plus Other income (expense), 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 Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer. The CODM uses segment Adjusted EBIT to allocate resources for each segment predominantly in establishing the Company’s long-term strategy and in developing the annual budget. The CODM considers actual performance using Adjusted EBIT when making decisions about allocating capital and resources to the segments.

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

The following tables present Adjusted EBIT by segment and other segment information:


					The Harris
	Americas		International		Products
	Welding		Welding		Group		Total
Three Months Ended September 30, 2025
Net sales	$	691,794	$	219,629	$	149,804	$	1,061,227
Inter-segment sales		30,058		9,830		3,441		43,329
		721,852		229,459		153,245		1,104,556
Reconciliation to Consolidated Net sales
Elimination of inter-segment sales								(43,329)
Net sales							$	1,061,227
Cost of goods sold ⁽¹⁾		438,400		164,747		111,126
Other segment expenses^{(1) (3)}		156,212		41,653		14,357
Addback: Special items charge ⁽¹⁾		(4,375)		(2,762)		(316)
Segment Adjusted EBIT	$	131,615	$	25,821	$	28,078	$	185,514

Other Segment Information
Total assets	$	2,454,340	$	1,240,393	$	438,659	$	4,133,392
Capital expenditures		(27,038)		(3,697)		(902)		(31,637)
Depreciation and amortization		17,176		6,119		2,576		25,871

Three Months Ended September 30, 2024
Net sales	$	637,026	$	216,224	$	130,509	$	983,759
Inter-segment sales		30,845		7,371		3,155		41,371
		667,871		223,595		133,664		1,025,130
Reconciliation to Consolidated Net sales
Elimination of inter-segment sales								(41,371)
Net sales							$	983,759
Cost of goods sold ⁽²⁾		410,715		164,274		98,093
Other segment expenses^{(2) (3)}		154,998		42,146		14,881
Addback: Special items charge ⁽²⁾		(23,357)		(2,926)		(1,269)
Segment Adjusted EBIT	$	125,515	$	20,101	$	21,959	$	167,575

Other Segment Information
Total assets	$	2,520,357	$	1,087,973	$	361,292	$	3,969,622
Capital expenditures		(28,748)		(6,208)		(765)		(35,721)
Depreciation and amortization		14,751		5,551		2,538		22,840

(1)

In the three months ended September 30, 2025, special items within Other segment expenses primarily include Rationalization and asset impairment net charges of $4,150, $1,365 and $316 in Americas Welding, International Welding and The Harris Products Group, respectively, as discussed in Note 6. Special items within Cost of goods sold primarily include an amortization of step up in value of acquired inventories of $1,397 in International Welding.

(2)

In the three months ended September 30, 2024, special items within Other segment expenses include Rationalization and asset impairment net charges of $16,282, $2,676 and $1,269 in Americas Welding, International Welding and The Harris Products Group, respectively, and a pension settlement charge of $3,966 in Americas Welding. Special items within Cost of goods sold primarily include an amortization of step up in value of acquired inventories of $3,109 and $250 in Americas Welding and International Welding, respectively.

(3)

Other segment expenses primarily include:

Selling, general & administrative expenses – including bonus and research and development expenses.

Rationalization and asset impairment net charges – refer to Note 6 for further discussion.

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts


					The Harris
	Americas		International		Products
	Welding		Welding		Group		Total
Nine Months Ended September 30, 2025
Net sales	$	2,041,631	$	671,514	$	441,143	$	3,154,288
Inter-segment sales		103,821		24,303		12,535		140,659
		2,145,452		695,817		453,678		3,294,947
Reconciliation to Consolidated Net sales
Elimination of inter-segment sales								(140,659)
Net sales							$	3,154,288
Cost of goods sold ⁽¹⁾		1,305,298		498,475		327,074
Other segment expenses^{(1) (3)}		453,841		123,684		42,893
Addback: Special items charge ⁽¹⁾		(7,415)		(5,725)		(580)
Segment Adjusted EBIT	$	393,728	$	79,383	$	84,291	$	557,402

Other Segment Information
Total assets	$	2,454,340	$	1,240,393	$	438,659	$	4,133,392
Capital expenditures		(68,776)		(11,911)		(3,340)		(84,028)
Depreciation and amortization		50,429		16,982		7,837		75,248

Nine Months Ended September 30, 2024
Net sales	$	1,910,061	$	690,743	$	385,835	$	2,986,639
Inter-segment sales		98,624		24,628		9,520		132,772
		2,008,685		715,371		395,355		3,119,411
Reconciliation to Consolidated Net sales
Elimination of inter-segment sales								(132,772)
Net sales							$	2,986,639
Cost of goods sold ⁽²⁾		1,210,212		517,219		285,936
Other segment expenses^{(2) (3)}		423,919		161,795		45,324
Addback: Special items charge ⁽²⁾		(23,711)		(37,230)		(2,666)
Segment Adjusted EBIT	$	398,265	$	73,587	$	66,761	$	538,613

Other Segment Information
Total assets	$	2,520,357	$	1,087,973	$	361,292	$	3,969,622
Capital expenditures		(68,879)		(13,500)		(2,738)		(85,117)
Depreciation and amortization		42,095		16,061		7,528		65,684

(1)

In the nine months ended September 30, 2025, special items within Other segment expenses primarily include Rationalization and asset impairment net charges of $7,190, $4,468 and $580 in Americas Welding, International Welding and The Harris Products Group, respectively, as discussed in Note 6. Special items within Cost of goods sold primarily include an amortization of step up in value of acquired inventories of $1,257 in International Welding.

(2)

In the nine months ended September 30, 2024, special items within Other segment expenses include Rationalization and asset impairment net charges of $16,521 in Americas Welding, $32,030 in International Welding, including the impact of the Company’s disposition of its Russian entity, and $2,666 in The Harris Products. In addition, there was a loss on asset disposal of $4,950 recorded to Other (expense) income in International Welding and a pension settlement charge of $3,966 in Americas Welding. Special items within Cost of goods sold primarily include an amortization of step up in value of acquired inventories of $3,224 and $250 in Americas Welding and International Welding, respectively.

(3)

Other segment expenses primarily include:

Selling, general & administrative expenses – including bonus and research and development expenses.

Rationalization and asset impairment net charges – refer to Note 6 for further discussion.

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

The following table presents reconciliations of segment information to the Company’s consolidated totals:


	Three Months Ended September 30,				Nine Months Ended September 30,
		2025		2024		2025		2024
Reconciliation of Segment Adjusted EBIT to Consolidated Income before income taxes
Segment Adjusted EBIT	$	185,514	$	167,575	$	557,402	$	538,613
Addback: Segment special items charge		(7,453)		(27,552)		(13,720)		(63,607)
Corporate special items charge ⁽¹⁾		(452)		(610)		(1,683)		(4,656)
Elimination of inter-segment profit		(972)		31		(3,794)		(1,753)
Unallocated corporate expenses, net		3,006		4,472		2,978		(10,087)
Interest income		1,501		2,108		5,418		7,301
Interest expense		(15,149)		(14,082)		(43,812)		(38,715)
Consolidated Income before income taxes	$	165,995	$	131,942	$	502,789	$	427,096

⁽¹⁾Corporate special items primarily include acquisition transaction costs.

Reconciliation of Other Segment Information to Consolidated Information
Capital expenditures
Segment totals	$	(31,637)	$	(35,721)	$	(84,028)	$	(85,117)
Adjustments		—		—		—		—
Consolidated totals	$	(31,637)	$	(35,721)	$	(84,028)	$	(85,117)

Depreciation and amortization
Segment totals	$	25,871	$	22,840	$	75,248	$	65,684
Adjustments		(1,127)		(195)		(2,258)		(589)
Consolidated totals	$	24,744	$	22,645	$	72,990	$	65,095

Reconciliation of Segment Assets to Consolidated Assets					September 30, 2025		December 31, 2024
Total segment assets					$	4,133,392	$	3,813,383
Corporate assets						36,301		20,745
LIFO reserve not allocated to segments						(135,721)		(120,633)
Eliminations						(218,867)		(193,353)
Total consolidated assets					$	3,815,105	$	3,520,142

NOTE 6 — RATIONALIZATION AND ASSET IMPAIRMENTS

The Company has rationalization plans within all three of its reportable segments. The plans impacted headcount and included the consolidation of manufacturing facilities to better align with the cost structure, economic conditions and operating needs of the business. As a result of these plans, in the nine months ended September 30, 2025, the Company recorded Rationalization and asset impairment net charges of $7,190 in Americas Welding, $4,468 in International Welding and $580 in The Harris Products Group. In the nine months ended September 30, 2024, the Company recorded Rationalization and asset impairment net charges of $32,030 in International Welding, of which $22,566 is associated with the disposal of the Company’s Russian entity. The Company also incurred Rationalization and asset impairment net charges of $16,521 in Americas Welding and $2,666 in The Harris Products Group in the same period.

At September 30, 2025 and December 31, 2024, rationalization liabilities of $5,731 and $14,146, respectively, were recognized in Other current liabilities in the Company’s Condensed Consolidated Balance Sheet. The Company does not anticipate significant additional charges related to the completion of these plans.

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.

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

The following table summarizes the activity related to rationalization liabilities for the nine months ended September 30, 2025:


	Americas		International		The Harris Products
	Welding		Welding		Group		Consolidated
Balance at December 31, 2024	$	5,628	$	7,562	$	956	$	14,146
Payments and other adjustments		(11,630)		(6,380)		(1,432)		(19,442)
Charged to expense		7,190		3,257		580		11,027
Balance at September 30, 2025	$	1,188	$	4,439	$	104	$	5,731

NOTE 7 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ("AOCI")

The following tables set forth the total changes in AOCI by component, net of taxes:


	Three Months Ended September 30, 2025
	Unrealized gain
	(loss) on derivatives
	designated and		Defined benefit		Currency
	qualifying as cash		pension plan		translation
	flow hedges		activity		adjustment		Total
Balance at June 30, 2025	$	18,257	$	(2,370)	$	(226,544)	$	(210,657)
Other comprehensive income (loss) before reclassification		1,300		—		(651)		649
Amounts reclassified from AOCI		(1,217)		(685)		—		(1,902)
Net current-period other comprehensive income (loss)		83		(685)		(651)		(1,253)
Balance at September 30, 2025	$	18,340	$	(3,055)	$	(227,195)	$	(211,910)


	Three Months Ended September 30, 2024
	Unrealized gain
	(loss) on derivatives
	designated and		Defined benefit		Currency
	qualifying as cash		pension plan		translation
	flow hedges		activity		adjustment		Total
Balance at June 30, 2024	$	17,490	$	(1,917)	$	(265,478)	$	(249,905)
Other comprehensive (loss) income before reclassification		(1,332)		—		12,267		10,935
Amounts reclassified from AOCI		372		2,772		—		3,144
Net current-period other comprehensive (loss) income		(960)		2,772		12,267		14,079
Balance at September 30, 2024	$	16,530	$	855	$	(253,211)	$	(235,826)


	Nine Months Ended September 30, 2025
	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, 2024	$	17,255	$	(1,048)	$	(316,342)	$	(300,135)
Other comprehensive income before reclassification		3,405		—		89,147		92,552
Amounts reclassified from AOCI		(2,320)		(2,007)		—		(4,327)
Net current-period other comprehensive income (loss)		1,085		(2,007)		89,147		88,225
Balance at September 30, 2025	$	18,340	$	(3,055)	$	(227,195)	$	(211,910)

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts


	Nine Months Ended September 30, 2024
	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, 2023	$	16,536	$	(1,996)	$	(244,387)	$	(229,847)
Other comprehensive income (loss) before reclassification		1,021		—		(8,824)		(7,803)
Amounts reclassified from AOCI		(1,027)		2,851		—		1,824
Net current-period other comprehensive (loss) income		(6)		2,851		(8,824)		(5,979)
Balance at September 30, 2024	$	16,530	$	855	$	(253,211)	$	(235,826)

NOTE 8 — INVENTORIES

Inventories in the Condensed Consolidated Balance Sheets are comprised of the following components:



	September 30, 2025		December 31, 2024
Raw materials	$	170,509	$	153,596
Work-in-process		141,357		123,406
Finished goods		359,649		267,035
Total	$	671,515	$	544,037

At both September 30, 2025 and December 31, 2024, approximately 35% of total inventories were valued using the last-in, first-out ("LIFO") method. The excess of current cost over LIFO cost was $135,721 and $120,633 at September 30, 2025 and December 31, 2024, respectively.

NOTE 9 — LEASES

The table below summarizes the right-of-use assets and lease liabilities in the Company’s Condensed Consolidated Balance sheets:


Operating Leases	Balance Sheet Classification	September 30, 2025		December 31, 2024
Right-of-use assets	Other assets	$	55,553	$	54,276

Current liabilities	Other current liabilities	$	13,829	$	13,110
Noncurrent liabilities	Other liabilities		42,352		42,124
Total lease liabilities		$	56,181	$	55,234

Total lease expense, which is included in Cost of goods sold and Selling, general & administrative expenses in the Company’s Consolidated Statements of Income, was $7,964 and $20,298 in the three and nine months ended September 30, 2025 and $5,657 and $18,390 in the three and nine months ended September 30, 2024, respectively. Cash paid for amounts included in the measurement of lease liabilities for the three and nine months ended September 30, 2025, respectively, were $4,340 and $10,882 and are included in Net cash provided by operating activities in the Company’s Consolidated Statements of Cash Flows. Cash paid for amounts included in the measurement of lease liabilities for the three and nine months ended September 30, 2024, respectively, were $3,771 and $11,918 and are included in Net cash provided by operating activities in the Company’s Consolidated Statements of Cash Flows. Right-of-use assets obtained in exchange for operating lease liabilities were $6,981 and $11,634 during the three and nine months ended September 30, 2025 and $5,426 and $16,043 during the three and nine months ended September 30, 2024, respectively.

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

The total future minimum lease payments for noncancelable operating leases were as follows:


	September 30, 2025
2025	$	5,564
2026		15,010
2027		12,013
2028		10,085
2029		7,259
After 2029		14,293
Total lease payments	$	64,224
Less: Imputed interest		8,043
Operating lease liabilities	$	56,181

As of September 30, 2025 the weighted average remaining lease term is 6.2 years and the weighted average discount rate used to determine the operating lease liability is 3.7%.

NOTE 10 — DEBT

At September 30, 2025 and December 31, 2024, debt consisted of the following:



			September 30, 2025		December 31, 2024
Long-term debt	Interest Rate
Senior Unsecured Notes
2015 Notes - Series A due August 20, 2025⁽¹⁾	3.15	%	$	—	$	100,000
2015 Notes - Series B due August 20, 2030	3.35	%		100,000		100,000
2015 Notes - Series C due April 1, 2035	3.61	%		50,000		50,000
2015 Notes - Series D due April 1, 2045	4.02	%		100,000		100,000
2016 Notes - Series A due October 20, 2028	2.75	%		100,000		100,000
2016 Notes - Series B due October 20, 2033	3.03	%		100,000		100,000
2016 Notes - Series C due October 20, 2037	3.27	%		100,000		100,000
2016 Notes - Series D due October 20, 2041	3.52	%		50,000		50,000
2024 Notes - Series A due August 22, 2029	5.55	%		75,000		75,000
2024 Notes - Series B due August 22, 2031	5.62	%		75,000		75,000
2024 Notes - Series C due June 20, 2034	5.74	%		400,000		400,000
Other borrowings due through 2030	Variable⁽²⁾			10		10
				1,150,010		1,250,010
Plus interest rate swap adjustment				2,847		3,355
Less current portion⁽¹⁾				4		100,004
Less debt issuance costs				2,538		2,810
Long-term debt, less current portion				1,150,315		1,150,551
Short-term debt
Amounts due to banks	Variable⁽³⁾			88,199		10,520
Current portion long-term debt⁽¹⁾				4		100,004
Total short-term debt				88,203		110,524
Total debt			$	1,238,518	$	1,261,075

(1)

On August 20, 2025, the Company repaid the Series A notes in full at maturity.

(2)

Interest rate was 7.97% at both September 30, 2025 and December 31, 2024.

(3)

Weighted average interest rate on the revolving credit facility was 5.2% as of September 30, 2025. Weighted average interest rate of other lines of credit related to liquidity needs in a hyperinflationary country was 44.7% and 47.8% as of September 30, 2025 and December 31, 2024, respectively.

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

Senior Unsecured Notes

As of September 30, 2025, the Company’s total weighted average effective interest rate and remaining weighted average tenure of the senior unsecured notes is 4.16%, including the impact from terminated swap agreements, and 8.9 years, respectively. The senior unsecured notes contain certain affirmative and negative covenants. As of September 30, 2025, the Company was in compliance with all of its debt covenants relating to the senior unsecured notes.

On August 20, 2025, the Company repaid its $100,000 2015 Series A notes in full at maturity.

Revolving Credit Agreements

On June 20, 2024, the Company entered into a $1 billion revolving credit facility, which may be increased, subject to certain conditions including the consent of its lenders, by an additional amount up to $300,000. The revolving credit facility matures on June 20, 2029. The revolving credit facility will initially bear interest on outstanding borrowings at a per annum rate equal to secured overnight finance rate (“SOFR”) plus 1.10% and could fluctuate based on the Company’s total net leverage ratio at a spread ranging from SOFR plus 1.10% to SOFR plus 1.60%. The financial covenants consist of a maximum net leverage ratio of 3.5x EBITDA and a minimum interest coverage ratio of 2.5x EBITDA. The revolving credit facility 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. As of September 30, 2025, the Company was in compliance with all of its covenants. The Company had borrowings under the revolving credit facility of $85,000 as of September 30, 2025.

The Company has other lines of credit and debt agreements totaling $31,386. As of September 30, 2025, the Company was in compliance with all of its covenants and had outstanding debt under short-term lines of credit of $3,199.

Fair Value of Debt

At September 30, 2025 and December 31, 2024, the fair value of long-term debt, including the current portion, was approximately $1,124,349 and $1,184,313, respectively. The approximate fair value of the Company’s long-term debt, including current maturities, was based on a valuation model using Level 2 observable inputs using available market information and methodologies requiring judgment. The carrying value of this debt at such dates was $1,150,319 and $1,250,555, 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.

NOTE 11 — INCOME TAXES

The One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States on July 4, 2025. Many of the tax provisions within the OBBBA are designed to accelerate tax deductions and could lead to lower tax payments. The OBBBA has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

During the third quarter of 2025, the Company recognized tax expense of approximately $8,800 related to the cumulative impact of the OBBBA provisions to date. This tax expense primarily relates to restoration of immediate expensing for current and previously capitalized domestic research and development expenditures and the reinstatement of 100% bonus depreciation on qualified property both of which impact international tax provisions regarding foreign-derived intangible income. While the ultimate impact the OBBBA will have on the Company’s financial position, results of operations, and cash flows remains to be determined, the Company expects to realize lower tax payments in the current year.

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

The Company recognized $118,278 of tax expense on pre-tax income of $502,789, resulting in an effective income tax rate of 23.5% for the nine months ended September 30, 2025. The effective income tax rate was 23.7% for the nine months ended September 30, 2024. The effective tax rate was lower for the nine months ended September 30, 2025, as compared with the same period in 2024, primarily due to the mix of earnings and timing of discrete tax items partially offset by the impact of the OBBBA as discussed above.

NOTE 12 — 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 and nine months ended September 30, 2025 and 2024.

The Company is subject to the credit risk of the counterparties to derivative instruments. Counterparties include a number of major banks and financial institutions. None of the concentrations of risk with any individual counterparty was considered significant at September 30, 2025. The Company does not expect any counterparties to fail to meet their obligations.

Cash Flow Hedges

Certain foreign currency forward contracts are qualified and designated as cash flow hedges. The dollar equivalent gross notional amount of these short-term contracts was $91,061 and $96,444 at September 30, 2025 and December 31, 2024, respectively.

The Company had interest rate forward starting swap agreements that were qualified and designated as cash flow hedges that were terminated during 2024. Upon termination of the contracts in 2024, the Company had a gain of $25,852 recorded in AOCI that will be amortized to Interest expense, net over the life of the associated debt.

Net Investment Hedges

The Company has foreign currency forward contracts and zero-cost collar contracts that qualify and are designated as net investment hedges. The dollar equivalent gross notional amount of the foreign currency forward contracts and zero-cost collar contracts were $376,744 and $319,450 at September 30, 2025 and December 31, 2024, 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 $479,502 and $421,754 at September 30, 2025 and December 31, 2024, respectively.

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

Fair values of derivative instruments in the Company’s Condensed Consolidated Balance Sheets consisted of the following:


	September 30, 2025								December 31, 2024
	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	$	2,745	$	423	$	—	$	—	$	1,663	$	2,972	$	—	$	—
Net investment contracts		534		26,280		—		—		10,276		—		—		—
Not designated as hedging instruments:
Foreign exchange contracts		417		1,186		—		—		1,560		4,251		—		—
Total derivatives	$	3,696	$	27,889	$	—	$	—	$	13,499	$	7,223	$	—	$	—

The effects of undesignated derivative instruments on the Company’s Consolidated Statements of Income consisted of the following:

Three Months Ended

Nine Months Ended

September 30,

Derivatives by hedge designation

Classification of gain (loss)

2025

2024

2025

2024

Not designated as hedges:

Foreign exchange contracts

Selling, general & administrative expenses

113

3,108

22,071

(3,663)

The effects of designated hedges on AOCI consisted of the following:



Total gain (loss) recognized in AOCI, net of tax	September 30, 2025		December 31, 2024
Foreign exchange contracts	$	1,517	$	(812)
Forward starting swap agreements		16,823		18,067
Net investment contracts		(3,303)		20,403

The Company expects a gain of $1,517 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.

The effects of designated hedges on the Company’s Consolidated Statements of Income consisted of the following:


		Three Months Ended				Nine Months Ended
	Gain (loss) recognized in the	September 30,				September 30,
Derivative type	Consolidated Statements of Income:	2025		2024		2025		2024
Foreign exchange contracts	Sales	$	1,387	$	(630)	$	1,052	$	657
	Cost of goods sold		(219)		40		324		524
Forward starting swap agreements	Interest expense, net		689		639		2,066		706

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

NOTE 13 — FAIR VALUE

The following table provides a summary of assets and liabilities as of September 30, 2025, 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	September 30, 2025		(Level 1)		(Level 2)		Inputs (Level 3)
Assets:
Foreign exchange contracts	$	3,162	$	—	$	3,162	$	—
Net investment contracts		534		—		534		—
Pension surplus		19,059		19,059		—		—
Total assets	$	22,755	$	19,059	$	3,696	$	—
Liabilities:
Foreign exchange contracts	$	1,609	$	—	$	1,609	$	—
Net investment contracts		26,280		—		26,280		—
Deferred compensation		35,454		—		35,454		—
Total liabilities	$	63,343	$	—	$	63,343	$	—

The following table provides a summary of assets and liabilities as of December 31, 2024, 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, 2024		(Level 1)		(Level 2)		Inputs (Level 3)
Assets:
Foreign exchange contracts	$	3,223	$	—	$	3,223	$	—
Net investment contracts		10,276		—		10,276		—
Pension surplus		27,059		27,059		—		—
Total assets	$	40,558	$	27,059	$	13,499	$	—
Liabilities:
Foreign exchange contracts	$	7,223	$	—	$	7,223	$	—
Deferred compensation		55,425		—		55,425		—
Total liabilities	$	62,648	$	—	$	62,648	$	—

The fair value of the Company’s pension surplus assets are based on quoted market prices in active markets and are included in the Level 1 fair value hierarchy. The pension surplus assets were invested in money market and short-term duration bond funds at both September 30, 2025 and December 31, 2024.

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 net investment contracts 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.

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

The fair value of Cash and cash equivalents, Accounts receivable, Short-term debt excluding the current portion of Long-term debt and Trade accounts payable approximated book value due to the short-term nature of these instruments at both September 30, 2025 and December 31, 2024.

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.

NOTE 14 — SUPPLIER FINANCING PROGRAM

The Company’s suppliers, at the supplier’s sole discretion, are able to factor receivables due from the Company to a financial institution on terms directly negotiated with the financial institution without affecting the Company’s balance sheet classification of the corresponding payable. The Company pays the financial institution the stated amount of the confirmed invoices from its designated suppliers on the original maturity dates of the invoices. At September 30, 2025 and December 31, 2024, Trade accounts payable included $36,599 and $29,164, respectively, payable to suppliers that have elected to participate in the supplier financing program.

(1)

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollars in thousands, except per share amounts)

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read together with the Company’s unaudited consolidated financial statements and other financial information included elsewhere in this Quarterly Report on Form 10-Q.

General

The Company is the world’s largest designer and manufacturer of arc welding and cutting products, manufacturing a broad line of arc welding equipment, consumable welding products and other welding and cutting products. Welding products include arc welding power sources, computer numerical control and plasma cutters, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, consumable electrodes, fluxes, welding accessories and specialty welding consumables and fabrication. The Company’s product offering also includes oxy-fuel cutting systems and regulators and torches used in oxy-fuel welding, cutting and brazing. In addition, the Company has a leading global position in the brazing and soldering alloys market.

The Company’s products are sold globally. In the Americas, products are sold principally through industrial distributors, retailers and also directly to users of welding products. Outside of the Americas, the Company has an international sales organization comprised of Company employees and agents who sell products from the Company’s various manufacturing sites to distributors and product users.

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.

In 2025, the U.S. government announced a series of tariffs on imported goods into the U.S., which prompted retaliatory actions from some of its trading partners. The Company has taken actions to address the impact of these trade policies and while the Company cannot predict the ultimate impact on its business, the Company will continue to monitor evolving trade negotiations to determine if additional measures are warranted.

Table of Contents

Results of Operations

The following table shows the Company’s results of operations:


	Three Months Ended September 30,
												Favorable (Unfavorable)
	2025						2024					2025 vs. 2024
	Amount			% of Sales			Amount			% of Sales		$			%
Net sales	$	1,061,227					$	983,759				$	77,468		7.9	%
Cost of goods sold		671,916						631,681					(40,235)		(6.4)	%
Gross profit		389,311			36.7	%		352,078		35.8	%		37,233		10.6	%
Selling, general & administrative expenses		206,823			19.5	%		186,291		18.9	%		(20,532)		(11.0)	%
Rationalization and asset impairment net charges		5,831			0.5	%		20,227		2.1	%		14,396		71.2	%
Operating income		176,657			16.6	%		145,560		14.8	%		31,097		21.4	%
Interest expense, net		13,648						11,974					(1,674)		(14.0)	%
Other income (expense)		2,986						(1,644)					4,630		281.6	%
Income before income taxes		165,995			15.6	%		131,942		13.4	%		34,053		25.8	%
Income taxes		43,367						31,186					(12,181)		(39.1)	%
Effective tax rate		26.1	%					23.6	%				(2.5)	%
Net income	$	122,628			11.6	%	$	100,756		10.2	%	$	21,872		21.7	%
Diluted earnings per share	$	2.21					$	1.77				$	0.44		24.9	%


	Nine Months Ended September 30,
												Favorable (Unfavorable)
	2025						2024					2025 vs. 2024
	Amount			% of Sales			Amount			% of Sales		$			%
Net sales	$	3,154,288					$	2,986,639				$	167,649		5.6	%
Cost of goods sold		1,993,982						1,882,349					(111,633)		(5.9)	%
Gross profit		1,160,306			36.8	%		1,104,290		37.0	%		56,016		5.1	%
Selling, general & administrative expenses		614,349			19.5	%		593,523		19.9	%		(20,826)		(3.5)	%
Rationalization and asset impairment net charges		12,238			0.4	%		51,322		1.7	%		39,084		76.2	%
Operating income		533,719			16.9	%		459,445		15.4	%		74,274		16.2	%
Interest expense, net		38,394						31,414					(6,980)		(22.2)	%
Other income (expense)		7,464						(935)					8,399		898.3	%
Income before income taxes		502,789			15.9	%		427,096		14.3	%		75,693		17.7	%
Income taxes		118,278						101,217					(17,061)		(16.9)	%
Effective tax rate		23.5	%					23.7	%				0.2	%
Net income	$	384,511			12.2	%	$	325,879		10.9	%	$	58,632		18.0	%
Diluted earnings per share	$	6.86					$	5.68				$	1.18		20.8	%

Table of Contents

Net Sales:

The following table summarizes the impact of volume, acquisitions, price and foreign currency exchange rates on Net sales on a consolidated basis:


Three Months Ended September 30,			Change in Net Sales due to:
	Net Sales											Foreign			Net Sales
	2024		Volume			Price			Acquisitions			Exchange			2025
Lincoln Electric Holdings, Inc.	$	983,759	$	(21,187)		$	76,410		$	16,710		$	5,535		$	1,061,227
% Change
Lincoln Electric Holdings, Inc.				(2.2)	%		7.8	%		1.7	%		0.6	%		7.9	%


Nine Months Ended September 30,			Change in Net Sales due to:
	Net Sales											Foreign		Net Sales
	2024		Volume			Price			Acquisitions			Exchange		2025
Lincoln Electric Holdings, Inc.	$	2,986,639	$	(82,635)		$	155,116		$	95,359		$	(191)	$	3,154,288
% Change
Lincoln Electric Holdings, Inc.				(2.8)	%		5.2	%		3.2	%		—		5.6	%

Net sales increased for the three and nine months ended September 30, 2025 due to an increase in organic sales and a benefit from acquisitions. The increase in organic sales for both the three and nine months ended September 30, 2025 is driven by an increase in pricing primarily due to higher input costs, partially offset by lower volumes.

Gross Profit:

Gross profit as a percentage of sales increased 0.9% for the three months ended September 30, 2025 as compared to the same 2024 period, driven by effective cost management and favorable mix. Gross profit as a percentage of sales decreased 0.2% for the nine months ended September 30, 2025 as compared to the same 2024 period, driven by lower volumes partially offset by effective cost management. The three and nine months ended September 30, 2025 includes last-in, first-out (“LIFO”) charges of $4,804 and $15,088, respectively, which are primarily due to rising input costs. This compares with a benefit of $1,196 and $3,971 in the comparable 2024 periods.

Selling, General & Administrative Expenses:

Selling, general and administrative expenses increased in the three and nine months ended September 30, 2025 as compared to the same 2024 periods, primarily due to increases in employee costs and acquisitions, partially offset by effective cost management.

Operating Income:

Operating income as a percentage of sales was 16.6% for the three months ended September 30, 2025 as compared to 14.8% in the prior year period. Excluding special items, Operating income as a percentage of sales was 17.4% for the three months ended September 30, 2025 as compared to 17.3% in the prior year period. Operating income as a percentage of sales was 16.9% for the nine months ended September 30, 2025 as compared to 15.4% in the prior year period. Excluding special items, Operating income as a percentage of sales, was 17.4% for both comparable periods. Refer to explanations above for additional details. Also refer to Non-GAAP Financial Measures for a reconciliation of Adjusted operating income.

Rationalization and Asset Impairment Net Charges:

Charges in 2025 and 2024 relate to rationalization plans within all three reportable segments. Charges in 2024 include the impact of the Company’s disposition of its Russian entity. Refer to Note 6 to the consolidated financial statements for further information on the Company’s rationalization plans.

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Income Taxes:

The effective tax rate was higher for the three months ended September 30, 2025 as compared to the same 2024 period, primarily driven by the impact of the One Big Beautiful Bill Act (“OBBBA”), as discussed in Note 11, partially offset by the mix of earnings and timing of discrete tax items.

Segment Results

The following table presents components of sales by segment:


Three Months Ended September 30,			Change in Net Sales due to:
	Net Sales											Foreign			Net Sales
	2024		Volume ⁽¹⁾			Price ⁽²⁾			Acquisitions ⁽³⁾			Exchange ⁽⁴⁾			2025
Operating Segments
Americas Welding	$	637,026	$	(15,011)		$	60,885		$	8,842		$	52		$	691,794
International Welding		216,224		(9,174)			93			7,868			4,618			219,629
The Harris Products Group		130,509		2,998			15,432			—			865			149,804

% Change
Americas Welding				(2.4)	%		9.6	%		1.4	%		—			8.6	%
International Welding				(4.2)	%		—			3.7	%		2.1	%		1.6	%
The Harris Products Group				2.3	%		11.8	%		—			0.7	%		14.8	%


Nine Months Ended September 30,				Change in Net Sales due to:
	Net Sales											Foreign			Net Sales
	2024		Volume ⁽¹⁾			Price ⁽²⁾			Acquisitions ⁽³⁾			Exchange			2025
Operating Segments
Americas Welding	$	1,910,061	$	(62,097)		$	116,519		$	86,361		$	(9,213)		$	2,041,631
International Welding		690,743		(38,994)			1,773			8,998			8,994			671,514
The Harris Products Group		385,835		18,456			36,824			—			28			441,143

% Change
Americas Welding				(3.3)	%		6.1	%		4.5	%		(0.4)	%		6.9	%
International Welding				(5.6)	%		0.3	%		1.3	%		1.2	%		(2.8)	%
The Harris Products Group				4.8	%		9.5	%		—			—			14.3	%

(1)

Decrease for the three and nine months ended September 30, 2025 for Americas Welding and International Welding due to weakened industrial demand trends. Increase for the three and nine months ended September 30, 2025 for The Harris Products Group due to the expanded market presence.

(2)

Increase due to price actions taken in response to higher input costs.

(3)

Increase for Americas Welding and International Welding due to the acquisitions discussed in Note 4 to the consolidated financial statements.

(4)

Increase for the three months ended September 30, 2025 for International Welding relates to the weaker U.S. dollar.

Segment performance is measured and resources are allocated based on a number of factors, the primary measure being the Adjusted EBIT profit measure. Adjusted EBIT is defined as Operating income plus Other income (expense), 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.

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The following table presents Adjusted EBIT by segment:


							Favorable (Unfavorable)
	Three Months Ended September 30,						2025 vs. 2024
	2025			2024			$		%
Americas Welding:
Net sales	$	691,794		$	637,026		$	54,768	8.6	%
Inter-segment sales		30,058			30,845			(787)	(2.6)	%
Total Sales	$	721,852		$	667,871			53,981	8.1	%
Adjusted EBIT ^{(1) (4)}	$	131,615		$	125,515			6,100	4.9	%
As a percent of total sales ⁽¹⁾		18.2	%		18.8	%			(0.6)	%
International Welding:
Net sales	$	219,629		$	216,224			3,405	1.6	%
Inter-segment sales		9,830			7,371			2,459	33.4	%
Total Sales	$	229,459		$	223,595			5,864	2.6	%
Adjusted EBIT ^{(2) (5)}	$	25,821		$	20,101			5,720	28.5	%
As a percent of total sales ⁽²⁾		11.3	%		9.0	%			2.3	%
The Harris Products Group:
Net sales	$	149,804		$	130,509			19,295	14.8	%
Inter-segment sales		3,441			3,155			286	9.1	%
Total Sales	$	153,245		$	133,664			19,581	14.6	%
Adjusted EBIT ^{(3) (6)}	$	28,078		$	21,959			6,119	27.9	%
As a percent of total sales⁽³⁾		18.3	%		16.4	%			1.9	%
Corporate / Eliminations:
Inter-segment sales	$	(43,329)		$	(41,371)			(1,958)	(4.7)	%
Adjusted EBIT ⁽⁷⁾		2,034			4,503			(2,469)	(54.8)	%
Consolidated:
Net sales	$	1,061,227		$	983,759			77,468	7.9	%
Net income	$	122,628		$	100,756			21,872	21.7	%
As a percent of total sales		11.6	%		10.2	%			1.4	%
Adjusted EBIT ⁽⁸⁾	$	187,548		$	172,078			15,470	9.0	%
As a percent of sales		17.7	%		17.5	%			0.2	%

(1)

Adjusted EBIT increased for the three months ended September 30, 2025 as compared to September 30, 2024 primarily driven by favorable net impact of organic sales, partially offset by unfavorable impact of product mix; Adjusted EBIT as a percent of sales decreased for the same period due to unfavorable product mix.

(2)

Adjusted EBIT and Adjusted EBIT as a percent of sales increased for the three months ended September 30, 2025 as compared to September 30, 2024 primarily as a result of the benefit of acquisitions, partially offset by the unfavorable impact of lower volumes.

(3)

Adjusted EBIT and Adjusted EBIT as a percent of sales increased for the three months ended September 30, 2025 as compared to September 30, 2024 primarily as a result of the favorable impact of organic sales, partially offset by unfavorable impact of higher input costs.

(4)

The three months ended September 30, 2025 exclude Rationalization and asset impairment net charges of $4,150 as discussed in Note 6. The three months ended September 30, 2024 exclude Rationalization and asset impairment net charges of $16,282 primarily due to restructuring activities, the amortization of the step up in value of acquired inventories of $3,109 and pension settlement charges of $3,966.

(5)

The three months ended September 30, 2025 exclude Rationalization and asset impairment net charges of $1,365 as discussed in Note 6 and the amortization of the step up in value of acquired inventories of $1,397. The three months ended September 30, 2024 exclude Rationalization and asset impairment net charges of $2,676 primarily due to restructuring activities and the amortization of the step up in value of acquired inventories of $250.

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(6)

The three months ended September 30, 2025 exclude Rationalization and asset impairment net charges of $316 as discussed in Note 6. The three months ended September 30, 2024 exclude Rationalization and asset impairment net charges of $1,269 primarily due to restructuring activities.

(7)

The three months ended September 30, 2025 exclude acquisition transaction costs of $452 as discussed in Note 4. The three months ended September 30, 2024 exclude acquisition transaction costs of $610.

(8)

See non-GAAP Financial Measures for a reconciliation of Net income as reported and Adjusted EBIT.



							Favorable (Unfavorable)
	Nine Months Ended September 30,						2025 vs. 2024
	2025			2024			$		%
Americas Welding:
Net sales	$	2,041,631		$	1,910,061		$	131,570	6.9	%
Inter-segment sales		103,821			98,624			5,197	5.3	%
Total Sales	$	2,145,452		$	2,008,685			136,767	6.8	%
Adjusted EBIT ^{(1) (4)}	$	393,728		$	398,265			(4,537)	(1.1)	%
As a percent of total sales ⁽¹⁾		18.4	%		19.8	%			(1.4)	%
International Welding:
Net sales	$	671,514		$	690,743			(19,229)	(2.8)	%
Inter-segment sales		24,303			24,628			(325)	(1.3)	%
Total Sales	$	695,817		$	715,371			(19,554)	(2.7)	%
Adjusted EBIT ^{(2) (5)}	$	79,383		$	73,587			5,796	7.9	%
As a percent of total sales ⁽²⁾		11.4	%		10.3	%			1.1	%
The Harris Products Group:
Net sales	$	441,143		$	385,835			55,308	14.3	%
Inter-segment sales		12,535			9,520			3,015	31.7	%
Total Sales	$	453,678		$	395,355			58,323	14.8	%
Adjusted EBIT ^{(3) (6)}	$	84,291		$	66,761			17,530	26.3	%
As a percent of total sales⁽³⁾		18.6	%		16.9	%			1.7	%
Corporate / Eliminations:
Inter-segment sales	$	(140,659)		$	(132,772)			(7,887)	(5.9)	%
Adjusted EBIT ⁽⁷⁾		(816)			(11,840)			11,024	93.1	%
Consolidated:
Net sales	$	3,154,288		$	2,986,639			167,649	5.6	%
Net income	$	384,511		$	325,879			58,632	18.0	%
As a percent of total sales		12.2	%		10.9	%			1.3	%
Adjusted EBIT ⁽⁸⁾	$	556,586		$	526,773			29,813	5.7	%
As a percent of sales		17.6	%		17.6	%			(0.0)	%

(1)

Adjusted EBIT and Adjusted EBIT as a percent of sales decreased for the nine months ended September 30, 2025 as compared to September 30, 2024 primarily driven by the unfavorable impact of lower volumes, product mix and acquisitions.

(2)

Adjusted EBIT and Adjusted EBIT as a percent of sales increased for the nine months ended September 30, 2025 as compared to September 30, 2024 primarily as a result of the benefit of acquisitions, effective cost management and a favorable prior year comparison due to operational inefficiencies in 2024 which were not repeated in the current year.

(3)

Adjusted EBIT and Adjusted EBIT as a percent of sales increased for the nine months ended September 30, 2025 as compared to September 30, 2024 primarily as a result of higher organic sales, effective cost management and operational improvements.

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(4)

The nine months ended September 30, 2025 exclude Rationalization and asset impairment net charges of $7,190 as discussed in Note 6. The nine months ended September 30, 2024 exclude Rationalization and asset impairment net charges of $16,521 primarily due to restructuring activities, the amortization of the step up in value of acquired inventories of $3,224 and pension settlement charges of $3,966.

(5)

The nine months ended September 30, 2025 exclude Rationalization and asset impairment net charges of $4,468 as discussed in Note 6 and the amortization of the step up in value of acquired inventories of $1,257. The nine months ended September 30, 2024 exclude Rationalization and asset impairment net charges of $32,030 primarily due to restructuring activities, including the impact of the Company’s disposition of its Russian entity, a loss on asset disposal of $4,950 and the amortization of the step up in value of acquired inventories of $250.

(6)

The nine months ended September 30, 2025 exclude Rationalization and asset impairment net charges of $580 as discussed in Note 6. The nine months ended September 30, 2024 exclude Rationalization and asset impairment net charges of $2,666 primarily due to restructuring activities.

(7)

The nine months ended September 30, 2025 exclude acquisition transaction costs of $1,683 as discussed in Note 4. The nine months ended September 30, 2024 exclude acquisition transaction costs of $4,551.

(8)

See non-GAAP Financial Measures for a reconciliation of Net income as reported and Adjusted EBIT.

Non-GAAP Financial Measures

The Company reviews Adjusted operating income, Adjusted net income, Adjusted EBIT, Adjusted effective tax rate, Adjusted diluted earnings per share, Adjusted return on invested capital (“Adjusted ROIC”), Adjusted net operating profit after taxes, Cash conversion and Organic sales, all non-GAAP financial measures, in assessing and evaluating the Company’s underlying operating performance. These non-GAAP financial measures exclude the impact of special items on the Company’s reported financial results. Non-GAAP financial measures should be read in conjunction with the generally accepted accounting principles in the United States ("GAAP") financial measures, as non-GAAP measures are a supplement to, and not a replacement for, GAAP financial measures.

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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:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Operating income as reported	$	176,657		$	145,560		$	533,719		$	459,445
Special items (pre-tax):
Rationalization and asset impairment charges ⁽²⁾		5,831			20,227			12,238			51,322
Acquisition transaction costs ⁽³⁾		452			610			1,683			4,551
Amortization of step up in value of acquired inventories ⁽⁵⁾		1,622			3,359			1,482			3,474
Adjusted operating income ⁽¹⁾	$	184,562		$	169,756		$	549,122		$	518,792
As a percentage of net sales		17.4	%		17.3	%		17.4	%		17.4	%

Net income as reported	$	122,628		$	100,756		$	384,511		$	325,879
Special items:
Rationalization and asset impairment charges ⁽²⁾		5,831			20,227			12,238			51,322
Acquisition transaction costs ⁽³⁾		452			610			1,683			4,551
Pension settlement charges ⁽⁴⁾		—			3,966			—			3,966
Amortization of step up in value of acquired inventories ⁽⁵⁾		1,622			3,359			1,482			3,474
Loss on asset disposal ⁽⁶⁾		—			—			—			4,950
Tax effect of Special items ^{(7) (8)}		6,685			(6,550)			4,772			(8,858)
Adjusted net income		137,218			122,368			404,686			385,284
Interest expense, net		13,648			11,974			38,394			31,414
Income taxes as reported		43,367			31,186			118,278			101,217
Tax effect of Special items^{(7) (8)}		(6,685)			6,550			(4,772)			8,858
Adjusted EBIT⁽¹⁾	$	187,548		$	172,078		$	556,586		$	526,773

Effective tax rate as reported		26.1	%		23.6	%		23.5	%		23.7	%
Net special item tax impact ⁽⁸⁾		(5.0)	%		—	%		(1.6)	%		(1.5)	%
Adjusted effective tax rate⁽¹⁾		21.1	%		23.6	%		21.9	%		22.2	%

Diluted earnings per share as reported	$	2.21		$	1.77		$	6.86		$	5.68
Special items per share		0.26			0.37			0.36			1.04
Adjusted diluted earnings per share⁽¹⁾	$	2.47		$	2.14		$	7.22		$	6.72

(1)

Adjusted operating income, adjusted net income, adjusted EBIT, adjusted effective tax rate and adjusted diluted EPS are non-GAAP financial measures. Refer to Non-GAAP Information section.

(2)

2025 and 2024 net charges primarily relate to rationalization plans within all three segments. Charges in 2024 include the impact of the Company’s disposition of its Russian entity.

(3)

Transaction costs related to acquisitions which are included in Selling, general & administrative expenses.

(4)

Pension settlement charges primarily due to the final settlement associated with the termination of a pension plan and are included in Other income (expense).

(5)

Costs related to acquisitions which are included in Cost of goods sold.

(6)

Loss on asset disposal included in Other income (expense).

(7)

Includes the net tax impact of Special items recorded during the respective periods. The tax effect of Special items impacting pre-tax income was calculated as the pre-tax amount multiplied by the applicable tax rate. The applicable tax rates reflect the taxable jurisdiction and nature of each Special item.

(8)

During the third quarter of 2025, the Company recognized tax expense of approximately $8,800, reflecting the cumulative impact of the OBBBA provisions. Refer to Note 11 for further detail.

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Liquidity and Capital Resources

Overview

The Company’s primary sources of liquidity are operating cash flows and revolving credit facilities. As of September 30, 2025, the Company had $292,997 of cash and cash equivalents on hand and $88,199 of outstanding borrowings under its $1,031,386 revolving credit facilities.

The Company’s capital allocation priorities include internal investment to support existing operations and organic growth, investment in acquisitions to grow the business and then returning capital to shareholders through dividends and share repurchases.

The Company’s cash flow from operations can be cyclical. In assessing liquidity, the Company reviews working capital measurements to define areas for improvement. Management anticipates the Company will be able to satisfy cash requirements for its ongoing businesses for the foreseeable future primarily with cash generated by operations, existing cash balances, borrowings under its existing credit facilities and raising debt in capital markets.

The Company continues to expand globally and periodically consider acquisitions that would involve significant investments. The Company can fund its global expansion plans with operational cash flow, but a significant acquisition may require access to capital markets, in particular, the long-term debt market, as well as the syndicated bank loan market. The Company’s financing strategy is to fund itself at the lowest after-tax cost of funding. Where possible, the Company utilizes operational cash flows and raises capital in the most efficient market, usually the United States, and then lends funds to the specific subsidiary needing or requiring funding. If additional acquisitions providing appropriate financial benefits become available, additional expenditures may be made.

Cash Flow

The following table reflects changes in key cash flow measures:


	Nine Months Ended September 30,
	2025		2024		$ Change
Cash provided by operating activities⁽¹⁾	$	566,208	$	503,182	$	63,026
Cash used by investing activities		(214,275)		(335,357)		121,082
Capital expenditures		(84,028)		(85,117)		1,089
Acquisition of businesses, net of cash acquired		(136,655)		(252,746)		116,091
Cash used by financing activities⁽²⁾		(425,394)		(152,298)		(273,096)
Proceeds from short-term borrowings		77,678		5,521		72,157
Proceeds from long-term borrowings		—		550,000		(550,000)
Payments on long-term borrowings		(100,169)		(400,508)		300,339
Purchase of shares for treasury		(286,488)		(211,212)		(75,276)
Cash dividends paid to shareholders		(126,476)		(121,979)		(4,497)
(Decrease) increase in Cash and cash equivalents		(84,265)		10,431		(94,696)

(1)

Cash provided by operating activities increased for the nine months ended September 30, 2025, compared with the nine months ended September 30, 2024 primarily due to the net impacts of the OBBBA and improved working capital.

(2)

Cash used by financing activities increased for the nine months ended September 30, 2025, compared with the nine months ended September 30, 2024 primarily due to the increase in purchases of shares for treasury and proceeds from long-term borrowings in the prior year.

As of September 30, 2025, the Company had cash of $292,997, of which $272,870 was held by international subsidiaries.

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In October 2025, the Company paid a cash dividend of $0.75 per share, or $41,270, to shareholders of record on September 30, 2025.

The Company currently anticipates capital expenditures of $100,000 to $120,000 in 2025. Anticipated capital expenditures include investments to increase capacity, improve operational effectiveness and for general maintenance. Management critically evaluates all proposed capital expenditures and expects each project to increase efficiency, reduce costs, support sales growth or improve the overall safety and environmental conditions of the Company’s facilities.

Revolving Credit Agreements

On June 20, 2024, the Company entered into a $1 billion revolving credit facility. The revolving credit facility matures on June 20, 2029. As of September 30, 2025, the Company had $915,000 of availability under the revolving credit facility. Additionally, the Company has other lines of credit with total availability of $28,187 as of September 30, 2025. Refer to Note 10 for further information on our revolving lines of credit.

Working Capital Ratios


	September 30, 2025		December 31, 2024		September 30, 2024
Average operating working capital to Net sales ⁽¹⁾	18.6	%	16.9	%	19.1	%
Days sales in Inventories	127.1		106.0		123.4
Days sales in Accounts receivable	46.9		46.9		51.4
Average days in Trade accounts payable	60.8		45.8		52.3

(1)

Average operating working capital to net sales is defined as the sum of Accounts receivable, Inventories and contract assets less Trade accounts payable and contract liabilities as of period end divided by annualized rolling three months of Net sales.

Stock Repurchase Program

On February 12, 2020, the Company’s Board authorized a share repurchase program for up to 10 million shares of the Company’s common stock. As of September 30, 2025, there were 5.3 million shares available under the authorization. The Company is not obligated to make any repurchases.

Rationalization and Asset Impairments

Refer to Note 6 to the consolidated financial statements for a discussion of the Company’s rationalization plans. 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.

Acquisitions

Refer to Note 4 to the consolidated financial statements for a discussion of the Company’s recent acquisitions.

Return on Invested Capital

The Company reviews ROIC in assessing and evaluating the Company’s underlying operating performance. As discussed in the Non-GAAP Financial Measures section above, Adjusted ROIC is a non-GAAP financial measure that the Company believes is a meaningful metric to investors in evaluating the Company’s financial performance. The calculation may be different than the method used by other companies to calculate ROIC. Adjusted ROIC is defined as rolling 12 months of Adjusted net income excluding tax-effected interest income and expense divided by invested capital. Invested capital is defined as total debt, which includes Short-term debt and Long-term debt, less current portions, plus Total equity.

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The following table presents the reconciliations of ROIC and Adjusted ROIC to net income:


	Twelve Months Ended September 30,
	2025			2024
Net income as reported	$	524,740		$	482,523
Plus: Interest expense (after-tax)		43,488			37,665
Less: Interest income (after-tax)		6,181			7,845
Net operating profit after taxes	$	562,047		$	512,343
Special items:
Rationalization and asset impairment net charges		16,776			29,390
Acquisition transaction costs		4,174			4,554
Pension settlement net (gains) charges		(174)			4,811
Amortization of step up in value of acquired inventories		3,034			3,471
Loss on asset disposal		—			4,950
Tax effect of Special items ⁽¹⁾		2,117			(2,413)
Adjusted net operating profit after taxes	$	587,974		$	557,106

Invested Capital	September 30, 2025			September 30, 2024
Short-term debt	$	88,203		$	111,993
Long-term debt, less current portion		1,150,315			1,150,616
Total debt		1,238,518			1,262,609
Total equity		1,414,633			1,339,190
Invested capital	$	2,653,151		$	2,601,799

Return on invested capital as reported		21.2	%		19.7	%
Adjusted return on invested capital		22.2	%		21.4	%

(1)

Includes the net tax impact of Special items recorded during the respective periods, including the cumulative impact of the OBBBA provisions. The tax effect of Special items impacting pre-tax income was calculated as the pre-tax amount multiplied by the applicable tax rate. The applicable tax rates reflect the taxable jurisdiction and nature of each Special item.

New Accounting Pronouncements

Refer to Note 1 to the consolidated financial statements for a discussion of new accounting pronouncements.

Forward-looking Statements

The Company’s expectations and beliefs concerning the future contained in this report are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect management’s current expectations and involve a number of risks and uncertainties. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “guidance” or words of similar meaning. Actual results may differ materially from such statements due to a variety of factors that could adversely affect the Company’s operating results. The factors include, but are not limited to: general economic, financial and market conditions; the effectiveness of commercial and operating initiatives; the effectiveness of information systems and cybersecurity systems; presence of artificial intelligence technologies; completion of planned divestitures; interest rates; disruptions, uncertainty or volatility in the credit markets that may limit our access to capital; currency exchange rates and devaluations; adverse outcome of pending or potential litigation; actual costs of the Company’s rationalization plans; possible acquisitions, including the Company’s ability to successfully integrate acquisitions; market risks and price fluctuations related to the purchase of commodities and energy; global regulatory complexity; the effects of changes in tax law, including any changes from the new legislation implemented in the OBBBA; tariff rates in the countries where the Company conducts business; and the possible effects of events beyond

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our control, including but not limited to, the ongoing geopolitical conflicts, political unrest, acts of terror, natural disasters and pandemics on the Company or its customers, suppliers and the economy in general. For additional discussion, see “Item 1A. Risk Factors” presented herein, as well as in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2025.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the Company’s exposure to market risk since December 31, 2024. See “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company carried out an evaluation under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Company’s management, including the Chief Executive Officer and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2025.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting that occurred during the quarter ended September 30, 2025 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is subject, from time to time, to a variety of civil and administrative proceedings arising out of its normal operations, including, without limitation, product liability claims, regulatory claims and health, safety and environmental claims. Among such proceedings are the cases described below.

As of September 30, 2025, the Company was a co-defendant in cases alleging asbestos induced illness involving claims by approximately 1,233 plaintiffs, which is a net decrease of 3 claims from those previously reported. In each instance, the Company is one of a large number of defendants. The asbestos claimants seek compensatory and punitive damages, in most cases for unspecified sums. Since January 1, 1995, the Company has been a co-defendant in asbestos cases that have been resolved as follows: 57,155 of those claims were dismissed, 23 were tried to defense verdicts, 7 were tried to plaintiff verdicts (which were reversed or resolved after appeal), 1 was resolved by agreement for an immaterial amount and 1,021 were decided in favor of the Company following summary judgment motions.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this Quarterly Report on Form 10-Q, the reader should carefully consider the factors discussed in “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2025.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer purchases of its common shares during the third quarter of 2025 were as follows:


						Total Number of
						Shares	Maximum Number
						Repurchased	of Shares that May
	Total Number of					as Part of Publicly	Yet be Purchased
	Shares			Average Price		Announced Plans or	Under the Plans or
Period	Repurchased			Paid Per Share		Programs	Programs ⁽²⁾
July 1 - 31, 2025	109,235	⁽¹⁾		$	220.16	99,867	5,424,374
August 1 - 31, 2025	59,698	⁽¹⁾	^''''		242.12	59,282	5,365,092
September 1 - 30, 2025	57,546	⁽¹⁾			246.08	57,139	5,307,953
Total	226,479			$	232.53	216,288

(1)

The above share repurchases include the surrender of the Company’s common shares in connection with the vesting of restricted awards.

(2)

On February 12, 2020, the Company’s Board of Directors authorized a new share repurchase program for up to an additional 10 million shares of the Company’s common stock. Total shares purchased through the share repurchase programs were 4.7 million shares at a total cost of $862.1 million for a weighted average cost of $183.73 per share through September 30, 2025.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

During the quarter ended September 30, 2025, none of the Company’s directors or officers adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Item 408(a) of Regulation S-K.

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ITEM 6. EXHIBITS

(a)

Exhibits




31.1	Certification of the Chair, President and Chief Executive Officer (Principal Executive Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 (filed herewith).
31.2	Certification of the Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 (filed herewith).
32.1	Certification of the Chair, President and Chief Executive Officer (Principal Executive Officer) and Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
104	Cover page Interactive Data File (formatted as Inline XBRL and contained in the Exhibit 101 attachments)
	Inline XBRL Taxonomy Extension Label Linkbase Document

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		LINCOLN ELECTRIC HOLDINGS, INC.

		/s/ Gabriel Bruno
		Gabriel Bruno
		Executive Vice President, Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)
		October 30, 2025

Source: View Original Filing on SEC EDGAR

FAQ

How did Lincoln Electric (LECO) perform in Q3 2025?

Q3 net sales were $1,061,227,000 vs. $983,759,000 a year ago, and diluted EPS was $2.21 vs. $1.77.

What were Lincoln Electric’s cash flows year-to-date 2025?

Net cash provided by operating activities was $566,208,000 for the nine months ended September 30, 2025.

Did LECO make acquisitions in 2025?

Yes. The company acquired 100% of Alloy Steel Australia for $131,238,000 (net) to expand mining-sector solutions.

What debt actions did Lincoln Electric take in 2025?

It repaid $100,000,000 of 2015 Series A notes at maturity on August 20, 2025 and had $85,000,000 outstanding on its revolver.

How did new U.S. tax law affect LECO in Q3 2025?

The OBBBA resulted in about $8,800,000 of tax expense; the company expects lower tax payments in the current year.

What were LECO’s shares outstanding at quarter-end?

Common shares outstanding were 55,026,176 as of September 30, 2025.

How did segment sales trend in Q3 2025?

Consumables net sales were $590,873,000 and Equipment net sales were $470,354,000.

[10-Q] LINCOLN ELECTRIC HOLDINGS INC Quarterly Earnings Report

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How did Lincoln Electric (LECO) perform in Q3 2025?

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Did LECO make acquisitions in 2025?

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