Welding and cutting products manufacturer Lincoln Electric Holdings, Inc. has announced that its 2008 sales increased 8.7% to $2.5 billion from $2.3 billion in 2007. The company's net income for 2008 increased 4.7% to $212.3 million, or $4.93 per diluted share, from $202.7 million, or $4.67 per diluted share, in 2007.
Operating income for 2008 increased 6.4% to $295.4 million from $277.6 million in 2007 or increased 13.5% excluding rationalization and asset impairment charges.
Sales for the company's North American operations were $1.45 billion in 2008 versus $1.40 billion in 2007, an increase of 3.6%. U.S. export sales in 2008 increased 24.6% to $242.3 million from $194.5 million in 2007.
Sales at Lincoln subsidiaries outside North America increased 16.9% to $1.03 billion in 2008, compared with $879.4 million in 2007. Excluding acquisitions and the effect of changes in foreign currency exchange rates, sales outside North America increased 5.4% in 2008 compared with 2007.
Net income for 2008 increased 4.7% to $212.3 million. Included in net income was a $19.4 million charge ($18.3 million after-tax), or $0.43 per diluted share, associated with rationalization and non-cash asset impairment charges.
Sales for the fourth quarter decreased 9.3% to $526.2 million from $580.3 million in the comparable 2007 period. Sales for the company's North American operations were $309.0 million in the quarter versus $345.1 million in the comparable quarter last year, a decrease of 10.5%. U.S. export sales in the quarter increased 16.4% to $53.8 million from $46.3 million in 2007.
Sales at Lincoln subsidiaries outside North America decreased to $217.2 million in the fourth quarter compared with $235.2 million in the year-ago quarter, a decrease of 7.7%. Excluding acquisitions and the effect of changes in foreign currency exchange rates, sales outside North America decreased 3.5% in the quarter.
Net income for the fourth quarter decreased 60.7% to $19.5 million, or $0.46 per diluted share, from $49.5 million in 2007. Excluding rationalization and asset impairment charges, net income decreased 22.9% to $37.8 million, or $0.88 per diluted share. The 2008 fourth quarter effective tax rate increased to 40.7% compared with 28.8% in 2007, primarily as a result of asset impairment charges with no tax benefit.
Net cash provided by operating activities was $40.7 million in the fourth quarter and $257.4 million for the full year of 2008. During 2008, the company paid $42.8 million in dividends and spent $42.3 million on share repurchases. The company's Board of Directors declared a quarterly cash dividend of $0.27 per share, which was paid on January 15, 2009 to holders of record as of December 31, 2008.
John Stropki, Chairman and Chief Executive Officer of Lincoln Electric, said: "Financial results for 2008 were the best in Lincoln's history. "Sales of nearly $2.5 billion and net income of $4.93 per diluted share were both records. Results in the fourth quarter, however, started to reflect the significant challenges in this very difficult economic environment.
"During the fourth quarter, our sales around the world suffered from the weakened global economy, and we expect the lower sales volumes experienced in the quarter to continue. The impact of liquidating high cost inventory combined with declining volumes will continue to pressure margins into 2009."
