Apr. 29--Lincoln Electric Holdings Inc. announced its first-quarter financial results Tuesday, and there was little positive about them.

Most of the company's financial categories reflected declines over the same period last year, and represent fewer sales and less income than the welding manufacturer typically sees.

Lincoln reported a 33.6 percent decrease in sales to $411.8 million during the period that ended March 31.

Since the company initiated cost-cutting efforts including reductions to its work force, introducing a Voluntary Separation Program and cutting hours, Lincoln incurred a 2009 pre-tax rationalization charge of $11.7 million, bringing the quarter's operating income down to just $1 million.

"Our first-quarter results reflect the difficult challenges and negative impacts of the depressed global economy," said John M. Stropki, chairman and chief executive officer. "The rapid and steep deterioration in overall global demand, combined with the liquidation of our higher cost inventory, resulted in a significant reduction in profitability during the quarter."

North American sales also dropped from $371.1 million in last year's first quarter to $246.7 million this year.

However, net cash from operating activities increased 6.1 percent to $71.7 million in the first quarter, and Lincoln paid $11.4 million in dividends.

The company also looks forward to an expansion of its customer base as a result of an agreement signed by its subsidiary, Lincoln Asia Pacific, to fully purchase Jinzhou Jin Tai Welding and Metal Co., a Jinzhou, China-based metal inert gas wire manufacturing firm.

Officials also reiterated that the rationalization should begin saving the company about $20 million per quarter after the next three months.

"In addition, we are actively evaluating additional actions which will further rationalize staffing, compensation levels and manufacturing facilities around the world," Stropki said.

"We estimate these actions will generate additional annualized savings of $20 million to $25 million and result in pre-tax rationalization charges of $8 million to $10 million.

"We are confident we will emerge from the global recession with a more efficient and highly competitive business model -- one which will further strengthen our market leadership position, accelerate our global growth and improve our overall profitability," he said.

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