Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2016shares | |
Document and Entity Information | |
Entity Registrant Name | LINCOLN ELECTRIC HOLDINGS INC |
Entity Central Index Key | 59,527 |
Document Type | 10-Q |
Document Period End Date | Mar. 31, 2016 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 68,807,794 |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Net sales | $ 550,722 | $ 657,900 |
Cost of goods sold | 361,620 | 437,510 |
Gross profit | 189,102 | 220,390 |
Selling, general & administrative expenses | 113,810 | 129,891 |
Operating income | 75,292 | 90,499 |
Other income (expense): | ||
Interest income | 430 | 593 |
Equity earnings in affiliates | 626 | 849 |
Other income | 661 | 2,610 |
Interest expense | (3,827) | (1,844) |
Total other income (expense) | (2,110) | 2,208 |
Income before income taxes | 73,182 | 92,707 |
Income taxes | 19,558 | 24,389 |
Net income including non-controlling interests | 53,624 | 68,318 |
Non-controlling interests in subsidiaries’ loss | (14) | (36) |
Net income | $ 53,638 | $ 68,354 |
Basic earnings (loss) per share (in dollars per share) | $ 0.77 | $ 0.90 |
Diluted earnings (loss) per share (in dollars per share) | 0.76 | 0.89 |
Cash dividends declared per share (in dollars per share) | $ 0.32 | $ 0.29 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net income including non-controlling interests | $ 53,624 | $ 68,318 |
Other comprehensive income, net of tax: | ||
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax of $(203) and $58 in the three months ended March 31, 2016 and 2015 | 836 | 1,100 |
Defined benefit pension plan activity, net of tax of $911 and $2,395 in the three months ended March 31, 2016 and 2015 | 1,618 | 3,538 |
Currency translation adjustment | 24,249 | (56,552) |
Other comprehensive income (loss) | 26,703 | (51,914) |
Comprehensive income | 80,327 | 16,404 |
Comprehensive income (loss) attributable to non-controlling interests | 1 | (577) |
Comprehensive income attributable to shareholders | $ 80,326 | $ 16,981 |
CONSOLIDATED STATEMENTS OF COM4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, tax (benefit) | $ (203) | $ 58 |
Unrecognized amounts from defined benefit pension plans, tax | $ 911 | $ 2,395 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
ASSETS | ||
Cash and cash equivalents | $ 220,996 | $ 304,183 |
Accounts receivable (less allowance for doubtful accounts of $7,233 in 2016; $7,299 in 2015) | 286,120 | 264,715 |
Inventories: | ||
Raw materials | 86,314 | 87,919 |
Work-in-process | 44,355 | 39,555 |
Finished goods | 162,040 | 148,456 |
Total inventory | 292,709 | 275,930 |
Other current assets | 102,522 | 91,167 |
Total Current Assets | 902,347 | 935,995 |
Property, Plant and Equipment | ||
Land | 46,821 | 45,775 |
Buildings | 362,426 | 362,325 |
Machinery and equipment | 718,062 | 696,849 |
Property, Plant and Equipment, Gross | 1,127,309 | 1,104,949 |
Less accumulated depreciation | 713,483 | 693,626 |
Property, Plant and Equipment, Net | 413,826 | 411,323 |
Goodwill | 190,596 | 187,504 |
Non-current assets | 270,326 | 249,349 |
TOTAL ASSETS | 1,777,095 | 1,784,171 |
LIABILITIES AND EQUITY | ||
Short-term debt | 24,844 | 4,278 |
Trade accounts payable | 159,590 | 152,620 |
Other current liabilities | 217,021 | 213,224 |
Total Current Liabilities | 401,455 | 370,122 |
Long-Term Liabilities | ||
Long-term debt, less current portion | 350,106 | 350,347 |
Other long-term liabilities | 132,865 | 131,254 |
Total Long-Term Liabilities | 482,971 | 481,601 |
Shareholders’ Equity | ||
Common shares | 9,858 | 9,858 |
Additional paid-in capital | 276,853 | 272,908 |
Retained earnings | 2,157,330 | 2,125,838 |
Accumulated other comprehensive loss | (269,579) | (296,267) |
Treasury shares | (1,282,655) | (1,180,750) |
Total Shareholders’ Equity | 891,807 | 931,587 |
Non-controlling interests | 862 | 861 |
Total Equity | 892,669 | 932,448 |
TOTAL LIABILITIES AND EQUITY | $ 1,777,095 | $ 1,784,171 |
CONDENSED CONSOLIDATED BALANCE6
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 7,233 | $ 7,299 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 53,638 | $ 68,354 |
Non-controlling interests in subsidiaries’ loss | (14) | (36) |
Net income including non-controlling interests | 53,624 | 68,318 |
Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities: | ||
Rationalization and asset impairment charges | 0 | 30 |
Depreciation and amortization | 15,625 | 16,032 |
Equity earnings in affiliates, net | (2) | (216) |
Deferred income taxes | (4,238) | (16,886) |
Stock-based compensation | 2,154 | 1,957 |
Pension expense | 4,144 | 5,679 |
Pension contributions and payments | (20,865) | (21,234) |
Other, net | 5 | (3,633) |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||
Increase in accounts receivable | (16,592) | (25,377) |
Increase in inventories | (10,780) | (16,233) |
(Increase) decrease in other current assets | (10,546) | 25,657 |
Increase (decrease) in trade accounts payable | 4,657 | (12,916) |
Increase in other current liabilities | 7,635 | 29,412 |
Net change in other long-term assets and liabilities | (460) | 2,194 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 24,361 | 52,784 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capital expenditures | (8,885) | (12,456) |
Proceeds from sale of property, plant and equipment | 458 | 1,187 |
Other Investing Activities | 0 | 2,024 |
NET CASH USED BY INVESTING ACTIVITIES | (8,427) | (9,245) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from short-term borrowings | 1,295 | 1,517 |
Payments on short-term borrowings | (563) | (4,774) |
Amounts due banks, net | 21,055 | 104,370 |
Proceeds from Issuance of Long-term Debt | 224 | 2,500 |
Payments on long-term borrowings | (255) | (2,103) |
Proceeds from exercise of stock options | 2,015 | 1,733 |
Excess tax benefits from stock-based compensation | 357 | 537 |
Purchase of shares for treasury | (102,488) | (102,853) |
Cash dividends paid to shareholders | (22,625) | (22,329) |
Other financing activities | (3,806) | (20) |
NET CASH USED BY FINANCING ACTIVITIES | (104,791) | (21,422) |
Effect of exchange rate changes on Cash and cash equivalents | 5,670 | (11,479) |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (83,187) | 10,638 |
Cash and cash equivalents at beginning of period | 304,183 | 278,379 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 220,996 | $ 289,017 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | As used in this report, the term “Company,” except as otherwise indicated by the context, means Lincoln Electric Holdings, Inc. and its wholly-owned and majority-owned subsidiaries for which it has a controlling interest. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these unaudited consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements. However, in the opinion of management, these unaudited consolidated financial statements contain all the adjustments (consisting of normal recurring accruals) considered necessary to present fairly the financial position, results of operations and cash flows for the interim periods. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results to be expected for the year ending December 31, 2016 . The accompanying Consolidated Balance Sheet at December 31, 2015 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, 2015 . Certain reclassifications have been made to the prior year financial statements to conform to current year classifications. Venezuela — Highly Inflationary Economy Venezuela is a highly inflationary economy under GAAP. As a result, the financial statements of the Company’s Venezuelan operation are reported under highly inflationary accounting rules as of January 1, 2010. Under highly inflationary accounting, the financial statements of the Company’s Venezuelan operation have been remeasured into the Company’s reporting currency and exchange gains and losses from the remeasurement of monetary assets and liabilities are reflected in current earnings. In January 2014, the Venezuelan government announced the formation of the National Center of Foreign Trade (“CENCOEX”) to replace the Commission for the Administration of Currency Exchange (“CADIVI”). Effective January 24, 2014, the exchange rate applicable to the settlement of certain transactions through CENCOEX, including payments of dividends and royalties, changed to utilize the Complementary System of Foreign Currency Administration ("SICAD") auction-based exchange rate (the "SICAD rate") as opposed to the official rate. In February 2014, the government announced a new market based foreign exchange system, the SICAD II. The exchange rate established through SICAD II fluctuated daily and was significantly higher than both the official rate and the SICAD rate. At March 31, 2014, the Company determined that the rate used in remeasuring the Venezuelan operation's financial statements into U.S. dollars would change to the SICAD rate. In February 2015, the Venezuelan government eliminated the SICAD II rate and announced a new exchange market called the Marginal Currency System ("SIMADI"), which allows for trading based on supply and demand. At September 30, 2015, the Company determined that the rate used in remeasuring the Venezuelan operation's financial statements into U.S. dollars would change to the SIMADI rate, as the SIMADI rate most appropriately approximates the rates used to transact business in its Venezuelan operations. At September 30, 2015, the SIMADI rate was 199.4 bolivars to the U.S. dollar, resulting in a remeasurement charge on the bolivar-denominated monetary net asset position of $4,334 . This foreign exchange loss was recorded in Selling, general & administrative expenses during the three months ended September 30, 2015. Additionally, the Company recorded lower of cost or net realizable value inventory adjustments of $22,880 within Cost of goods sold, related to the adoption of the SIMADI rate. In the first quarter of 2016, the Venezuelan government reduced its three-tier system of exchange rates to two tiers by eliminating the SICAD rate and stated that the SIMADI rate, which was renamed DICOM, would be free floating. As of March 31, 2016 , the DICOM rate was 272.9 bolivars to the U.S. dollar. If the Company were to convert bolivars at a rate other than the DICOM rate, the Company may realize additional losses or gains to earnings. Future impacts to earnings of applying highly inflationary accounting for Venezuela on the Company’s consolidated financial statements will be dependent upon the applied currency exchange mechanisms, the movements in the applicable exchange rates between the bolivar and the U.S. dollar and the amount of monetary assets and liabilities included in the Company’s Venezuelan operation’s balance sheet. The bolivar-denominated monetary net liability position was $748 at March 31, 2016 , including $510 of cash and cash equivalents as compared with a bolivar-denominated monetary net asset position of $32 at December 31, 2015 , including $642 of cash and cash equivalents. New Accounting Pronouncements Adopted: In September 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2015-16, "Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments." ASU 2015-16 requires an acquiring entity to recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments also require an entity to record the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. An entity must present separately on the face of the statement of operations or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The amendments should be applied prospectively. ASU 2015-16 was adopted by the Company effective January 1, 2016 and did not have an impact on the Company's financial statements. In May 2015, the FASB issued ASU No. 2015-07, "Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share." ASU 2015-07 removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient and removes the requirement to make certain disclosures for these investments. The amendment should be applied retrospectively. ASU 2015-07 was adopted by the Company effective January 1, 2016 and did not have an impact on the Company's financial statements. New Accounting Pronouncements Yet to be Adopted: In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." ASU 2016-09 amends several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. If early adopted, an entity must adopt all of the amendments in the same period. The Company is currently evaluating the impact of the adoption of ASU 2016-09 on the Company's financial statements. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." ASU 2016-02 aims to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requiring disclosure of key information about leasing agreements. Entities are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2016-02 on the Company's financial statements. In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." ASU 2014-09 requires an entity to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the amendment provides five steps that an entity should apply when recognizing revenue. The amendment also specifies the accounting of some costs to obtain or fulfill a contract with a customer and expands the disclosure requirements around contracts with customers. An entity can either adopt this amendment retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying the update recognized at the date of initial application. In August 2015, the FASB issued ASU 2015-14, " Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," which deferred the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted as of annual reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact of the adoption of ASU 2014-09 on the Company's financial statements. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended March 31, 2016 2015 Numerator: Net income $ 53,638 $ 68,354 Denominator: Basic weighted average shares outstanding (in 000's) 69,585 76,242 Effect of dilutive securities - Stock options and awards (in 000's) 661 817 Diluted weighted average shares outstanding (in 000's) 70,246 77,059 Basic earnings per share $ 0.77 $ 0.90 Diluted earnings per share $ 0.76 $ 0.89 For the three months ended March 31, 2016 and 2015 , common shares subject to equity-based awards of 776,600 and 407,290 , respectively, were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS During August 2015, the Company acquired Specialised Welding Products ("SWP"). SWP, based in Melbourne, Australia, is a provider of specialty welding consumables and fabrication, maintenance and repair services for alloy and wear resistant products commonly used in mining and energy sector applications. The acquisition broadens the Company's presence and specialty alloy offering in Australia and New Zealand. During August 2015, the Company acquired Rimrock Holdings Corporation ("Rimrock"). Rimrock is a manufacturer of industrial automation products and robotic systems with two divisions, Wolf Robotics LLC, based in Fort Collins, Colorado, and Rimrock Corporation, based in Columbus, Ohio. Wolf Robotics integrates robotic welding and cutting systems predominantly for heavy fabrication and transportation OEMs and suppliers. The acquisition advances the Company's leadership position in automated welding and cutting solutions. Rimrock Corporation designs and manufactures automated spray systems and turnkey robotic systems for the die casting, foundry and forging markets. The Company is currently reviewing strategic options for Rimrock Corporation. Pro forma information related to these acquisitions have not been presented because the impact on the Company’s Consolidated Statements of Operations is not material. Acquired companies are included in the Company’s consolidated financial statements as of the date of acquisition. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company’s primary business is the design and manufacture 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, CNC and plasma cutters, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, consumable electrodes, fluxes and welding accessories. 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. During the first quarter of 2016, the Company realigned 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 primarily includes welding operations in Europe, Africa, Asia and Australia. The Harris Products Group includes the Company’s global cutting, soldering and brazing businesses as well as its retail business in the United States. All prior period results have been revised to reflect the realigned segment structure. Segment performance is measured and resources are allocated based on a number of factors, the primary profit measure being earnings before interest and income taxes (“EBIT”), as adjusted. EBIT is defined as Operating income plus Equity earnings in affiliates and Other income. Segment EBIT is adjusted for special items as determined by management such as the impact of rationalization activities, certain asset impairment charges and gains or losses on disposals of assets. Financial information for the reportable segments follows: Americas Welding International Welding The Harris Products Group Corporate / Eliminations Consolidated Three Months Ended March 31, 2016 Net sales $ 359,008 $ 124,305 $ 67,409 $ — $ 550,722 Inter-segment sales 23,831 4,426 2,303 (30,560 ) — Total $ 382,839 $ 128,731 $ 69,712 $ (30,560 ) $ 550,722 EBIT, as adjusted $ 61,438 $ 6,233 $ 7,711 $ 1,197 $ 76,579 Special items charge (gain) — — — — — EBIT $ 61,438 $ 6,233 $ 7,711 $ 1,197 $ 76,579 Interest income 430 Interest expense (3,827 ) Income before income taxes $ 73,182 Three months ended March 31, 2015 Net sales $ 448,837 $ 139,247 $ 69,816 $ — $ 657,900 Inter-segment sales 23,023 5,027 2,011 (30,061 ) — Total $ 471,860 $ 144,274 $ 71,827 $ (30,061 ) $ 657,900 EBIT, as adjusted $ 75,415 $ 10,934 $ 7,549 $ 60 $ 93,958 Special items charge (gain) — — — — — EBIT $ 75,415 $ 10,934 $ 7,549 $ 60 $ 93,958 Interest income 593 Interest expense (1,844 ) Income before income taxes $ 92,707 |
RATIONALIZATION AND ASSET IMPAI
RATIONALIZATION AND ASSET IMPAIRMENTS | 3 Months Ended |
Mar. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
RATIONALIZATION AND ASSET IMPAIRMENTS | RATIONALIZATION AND ASSET IMPAIRMENTS In prior periods, the Company initiated various rationalization plans whose costs were substantially recognized in the prior year. As such, no charges were recorded in the three months ended March 31, 2016 . A description of each restructuring plan and the related costs follows: Americas Welding Plans: During 2015, the Company initiated a rationalization plan within Americas Welding that included a voluntary separation incentive program covering certain U.S.-based employees. The plan was completed during 2016. International Welding Plans: During 2015, the Company initiated rationalization plans within International Welding. The plans include headcount restructuring to better align cost structures with economic conditions and operating needs. The Company does not anticipate any additional charges related to the completion of these plans. At March 31, 2016 , liabilities relating to the International Welding plans of $7,173 were recognized in Other current liabilities, which will be substantially paid during 2016. The Company believes the rationalization actions will positively impact future results of operations and will not have a material effect on liquidity and sources and uses of capital. The Company continues to evaluate its cost structure and additional rationalization actions may result in charges in future periods. The following tables summarize the activity related to the rationalization liabilities by segment for the three months ended March 31, 2016 : Americas Welding International Welding Consolidated Balance, December 31, 2015 $ 67 $ 7,598 $ 7,665 Payments and other adjustments (67 ) (425 ) (492 ) Charged to expense — — — Balance, March 31, 2016 $ — $ 7,173 $ 7,173 |
EQUITY
EQUITY | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | EQUITY Changes in equity for the three months ended March 31, 2016 are as follows: Shareholders’ Equity Non-controlling Interests Total Equity Balance, December 31, 2015 $ 931,587 $ 861 $ 932,448 Comprehensive income (loss): Net income (loss) 53,638 (14 ) 53,624 Other comprehensive income 26,688 15 26,703 Total comprehensive income 80,326 1 80,327 Cash dividends declared - $0.32 per share (22,145 ) — (22,145 ) Issuance of shares under benefit plans 4,527 — 4,527 Purchase of shares for treasury (102,488 ) — (102,488 ) Balance, March 31, 2016 $ 891,807 $ 862 $ 892,669 In July 2013, the Company's Board of Directors authorized a new share repurchase program, which increased the total number of the Company's common shares authorized to be repurchased to 45 million shares. At management’s discretion, the Company repurchases its common shares from time to time in the open market, depending on market conditions, stock price and other factors. During the three month period ended March 31, 2016 , the Company purchased a total of 1.9 million shares. As of March 31, 2016 , there remained 2.8 million common shares available for repurchase under this program. The repurchased common shares remain in treasury and have not been retired. In April 2016, the Company's Board of Directors authorized a new share repurchase program for up to an additional 10 million of the Company's common shares. The following tables set forth the total changes in accumulated other comprehensive income (loss) ("AOCI") by component, net of taxes for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges Defined benefit pension plan activity Currency translation adjustment Total Balance at December 31, 2015 $ 548 $ (99,776 ) $ (197,039 ) $ (296,267 ) Other comprehensive income (loss) 1,699 (20 ) 24,234 3 25,913 Amounts reclassified from AOCI (863 ) 1 1,638 2 — 775 Net current-period other 836 1,618 24,234 26,688 Balance at March 31, 2016 $ 1,384 $ (98,158 ) $ (172,805 ) $ (269,579 ) Three Months Ended March 31, 2015 Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges Defined benefit pension plan activity Currency translation adjustment Total Balance at December 31, 2014 $ (9 ) $ (197,893 ) $ (90,720 ) $ (288,622 ) Other comprehensive income (loss) 1,322 — (56,011 ) 3 (54,689 ) Amounts reclassified from AOCI (222 ) 1 3,538 2 — 3,316 Net current-period other 1,100 3,538 (56,011 ) (51,373 ) Balance at March 31, 2015 $ 1,091 $ (194,355 ) $ (146,731 ) $ (339,995 ) 1 During the 2016 period, this AOCI reclassification is a component of Net sales of $ (787) (net of tax of $ (278) ) and Cost of goods sold of $ (76) (net of tax of $ 22 ); during the 2015 period, the reclassification is a component of Net sales of $ (529) (net of tax of $ (249) ) and Cost of goods sold of $ 307 (net of tax of $ 202 ). (See Note 15 - Derivatives for additional details.) 2 This AOCI component is included in the computation of net periodic pension costs (net of tax of $ 911 and $ 2,395 during the three months ended March 31, 2016 and 2015, respectively). (See Note 13 - Retirement and Postretirement Benefit Plans for additional details.) 3 The Other comprehensive income (loss) before reclassifications excludes $ 15 and $ (541) attributable to Non-controlling interests in the three months ended March 31, 2016 and 2015, respectively. The following tables set forth the total changes in AOCI by component, net of taxes for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges Defined benefit pension plan activity Currency translation adjustment Total Balance at December 31, 2015 $ 548 $ (99,776 ) $ (197,039 ) $ (296,267 ) Other comprehensive income (loss) 1,699 (20 ) 24,234 3 25,913 Amounts reclassified from AOCI (863 ) 1 1,638 2 — 775 Net current-period other 836 1,618 24,234 26,688 Balance at March 31, 2016 $ 1,384 $ (98,158 ) $ (172,805 ) $ (269,579 ) Three Months Ended March 31, 2015 Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges Defined benefit pension plan activity Currency translation adjustment Total Balance at December 31, 2014 $ (9 ) $ (197,893 ) $ (90,720 ) $ (288,622 ) Other comprehensive income (loss) 1,322 — (56,011 ) 3 (54,689 ) Amounts reclassified from AOCI (222 ) 1 3,538 2 — 3,316 Net current-period other 1,100 3,538 (56,011 ) (51,373 ) Balance at March 31, 2015 $ 1,091 $ (194,355 ) $ (146,731 ) $ (339,995 ) 1 During the 2016 period, this AOCI reclassification is a component of Net sales of $(787) (net of tax of $(278) ) and Cost of goods sold of $(76) (net of tax of $22 ); during the 2015 period, the reclassification is a component of Net sales of $(529) (net of tax of $(249) ) and Cost of goods sold of $307 (net of tax of $202 ). (See Note 14 - Derivatives for additional details.) 2 This AOCI component is included in the computation of net periodic pension costs (net of tax of $911 and $2,395 during the three months ended March 31, 2016 and 2015 , respectively). (See Note 12 - Retirement and Postretirement Benefit Plans for additional details.) 3 The Other comprehensive income (loss) before reclassifications excludes $15 and $(541) attributable to Non-controlling interests in the three months ended March 31, 2016 and 2015 , respectively. |
INVENTORY VALUATION
INVENTORY VALUATION | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORY VALUATION | INVENTORY VALUATION The valuation of last-in, first-out ("LIFO") method inventories is made at the end of each year based on inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs. Actual year-end costs and inventory levels may differ from interim LIFO inventory valuations. The excess of current cost over LIFO cost was $59,765 at March 31, 2016 and December 31, 2015 . |
ACCRUED EMPLOYEE BONUS
ACCRUED EMPLOYEE BONUS | 3 Months Ended |
Mar. 31, 2016 | |
Accrued Employee Compensation And Benefits Disclosure Abstract | |
ACCRUED EMPLOYEE BONUS | ACCRUED EMPLOYEE BONUS Other current liabilities at March 31, 2016 and 2015 include accruals for year-end bonuses and related payroll taxes of $26,174 and $32,987 , respectively, related to the Company’s employees worldwide. The payment of bonuses is discretionary and subject to approval by the Board of Directors. A majority of annual bonuses are paid in December, resulting in an increasing bonus accrual during the Company’s fiscal year. |
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES The Company, like other manufacturers, is subject from time to time to a variety of civil and administrative proceedings arising in the ordinary course of business. Such claims and litigation include, without limitation, product liability claims, regulatory claims and health, safety and environmental claims, some of which relate to cases alleging asbestos induced illnesses. The claimants in the asbestos cases seek compensatory and punitive damages, in most cases for unspecified amounts. The Company believes it has meritorious defenses to these claims and intends to contest such suits vigorously. The Company accrues its best estimate of the probable costs, after a review of the facts with management and counsel and taking into account past experience. If an unfavorable outcome is determined to be reasonably possible but not probable, or if the amount of loss cannot be reasonably estimated, disclosure is provided for material claims or litigation. Many of the current cases are in differing procedural stages and information on the circumstances of each claimant, which forms the basis for judgments as to the validity or ultimate disposition of such actions, varies greatly. Therefore, in many situations a range of possible losses cannot be made. Reserves are adjusted as facts and circumstances change and related management assessments of the underlying merits and the likelihood of outcomes change. Moreover, reserves only cover identified and/or asserted claims. Future claims could, therefore, give rise to increases to such reserves. Based on the Company's historical experience in litigating product liability claims, including a significant number of dismissals, summary judgments and defense verdicts in many cases and immaterial settlement amounts, as well as the Company's current assessment of the underlying merits of the claims and applicable insurance, the Company believes resolution of these claims and proceedings, individually or in the aggregate, will not have a material effect on the Company's consolidated financial statements. |
PRODUCT WARRANTY COSTS
PRODUCT WARRANTY COSTS | 3 Months Ended |
Mar. 31, 2016 | |
Product Warranties Disclosures [Abstract] | |
PRODUCT WARRANTY COSTS | PRODUCT WARRANTY COSTS The changes in the carrying amount of product warranty accruals for the three months ended March 31, 2016 and 2015 are as follows: Three Months Ended March 31, 2016 2015 Balance at December 31 $ 19,469 $ 15,579 Accruals for warranties 3,035 2,979 Settlements (3,063 ) (3,209 ) Foreign currency translation 147 (271 ) Balance at March 31 $ 19,588 $ 15,078 |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The Company has a line of credit totaling $400,000 through the Amended and Restated Credit Agreement (the “Credit Agreement”), which was entered into on September 12, 2014 . The Credit Agreement contains customary affirmative, negative and financial covenants for credit facilities of this type, including limitations on the Company and its subsidiaries with respect to liens, investments, distributions, mergers and acquisitions, dispositions of assets, transactions with affiliates and a fixed charges coverage ratio and total leverage ratio. As of March 31, 2016, the Company was in compliance with all of its covenants and had no outstanding borrowings under the Credit Agreement. The Credit Agreement has a five -year term and may be increased, subject to certain conditions, by an additional amount up to $100,000 . The interest rate on borrowings is based on either LIBOR or the prime rate, plus a spread based on the Company’s leverage ratio, at the Company’s election. On April 1, 2015 , the Company entered into a Note Purchase Agreement pursuant to which it agreed to issue Senior Unsecured Notes (the "Notes") in the aggregate principal amount of $350,000 through a private placement. At March 31, 2016 , $349,161 , net of debt issuance costs of $839 and excluding accretion of original issuance costs, was outstanding and recorded in Long-term debt, less current portion. The proceeds are being used for general corporate purposes. The Notes, as shown in the table below, have maturities ranging from 10 to 30 years with a weighted average effective interest rate of 3.5% , excluding accretion of original issuance costs, and an average tenure of 19 years. Interest is payable semi-annually. The Notes contain certain affirmative and negative covenants. As of March 31, 2016, the Company was in compliance with all of its debt covenants . The maturity and interest rates of the Notes are as follows: Amount Maturity Date Interest Rate Series A $ 100,000 August 20, 2025 3.15 % Series B 100,000 August 20, 2030 3.35 % Series C 50,000 April 1, 2035 3.61 % Series D 100,000 April 1, 2045 4.02 % |
RETIREMENT AND POSTRETIREMENT B
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS | 3 Months Ended |
Mar. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS | RETIREMENT AND POSTRETIREMENT BENEFIT PLANS The components of total pension cost were as follows: Three Months Ended March 31, 2016 2015 Service cost $ 4,430 $ 5,422 Interest cost 6,011 10,331 Expected return on plan assets (8,864 ) (15,738 ) Amortization of prior service cost (99 ) (156 ) Amortization of net loss 2,666 5,820 Defined benefit plans 4,144 5,679 Multi-employer plans 202 217 Defined contribution plans 1,969 3,016 Total pension cost $ 6,315 $ 8,912 The Company voluntarily contributed $20,000 to its defined benefit plans in the United States during the three months ended March 31, 2016 . The decrease in components of total pension cost for the defined benefit plans in 2016 was primarily due to the purchase of a group annuity contract in August 2015. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company recognized $19,558 of tax expense on pre-tax income of $73,182 , resulting in an effective income tax rate of 26.7% for the three months ended March 31, 2016 . The effective income tax rate was 26.3% for the three months ended March 31, 2015 . The 2016 effective income tax rate was lower than the Company’s statutory rate primarily due to the utilization of U.S. tax credits and deductions, income earned in lower tax rate jurisdictions and utilization of loss carry-forwards for which valuation allowances had been previously provided. The 2015 effective income tax rate was lower than the Company’s statutory rate due to the utilization of U.S. tax credits, refund interest recognized as a reduction to tax expense and income earned in lower tax rate jurisdictions. As of March 31, 2016 , the Company had $14,526 of unrecognized tax benefits. If recognized, approximately $8,369 would be reflected as a component of income tax expense. The Company files income tax returns in the U.S. and various state, local and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local or non-U.S. income tax examinations by tax authorities for years before 2011. The Company is currently subject to various U.S. state and non-U.S. income tax audits. Unrecognized tax benefits are reviewed on an ongoing basis and are adjusted for changing facts and circumstances, including progress of tax audits and closing of statutes of limitations. Based on information currently available, management believes that additional audit activity could be completed and/or statutes of limitations may close relating to existing unrecognized tax benefits. It is reasonably possible there could be a reduction of $2,236 in previously unrecognized tax benefits by the end of the first quarter 2017 . |
DERIVATIVES
DERIVATIVES | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | DERIVATIVES The Company uses derivatives to manage exposures to currency exchange rates, interest rates and commodity prices arising in the normal course of business. Both at inception and on an ongoing basis, the derivative instruments that qualify for hedge accounting are assessed as to their effectiveness, when applicable. Hedge ineffectiveness was immaterial in the three months ended March 31, 2016 and 2015. The Company is subject to the credit risk of the counterparties to derivative instruments. Counterparties include a number of major banks and financial institutions. None of the concentrations of risk with any individual counterparty was considered significant at March 31, 2016 . The Company does not expect any counterparties to fail to meet their obligations. Cash Flow Hedges Certain foreign currency forward contracts were qualified and designated as cash flow hedges. The dollar equivalent gross notional amount of these short-term contracts was $46,497 at March 31, 2016 and $30,388 at December 31, 2015 . Net Investment Hedges The Company has foreign currency forward contracts that were qualified and designated as net investment hedges. No such contracts were outstanding at March 31, 2016 and December 31, 2015 . 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 $290,209 at March 31, 2016 and $267,626 at December 31, 2015 . The Company had short-term silver forward contracts with notional amounts of $3,219 and $2,804 at March 31, 2016 and December 31, 2015 . Fair values of derivative instruments in the Company’s Consolidated Balance Sheets follow: March 31, 2016 December 31, 2015 Derivatives by hedge designation Other Current Assets Other Current Liabilities Other Current Assets Other Current Liabilities Designated as hedging instruments: Foreign exchange contracts $ 1,268 $ 708 $ 178 $ 731 Not designated as hedging instruments: Foreign exchange contracts 9,821 2,021 625 2,303 Commodity contracts 3 32 40 8 Total derivatives $ 11,092 $ 2,761 $ 843 $ 3,042 The effects of undesignated derivative instruments on the Company’s Consolidated Statements of Operations for the three months ended March 31, 2016 and 2015 consisted of the following: Three Months Ended March 31, Derivatives by hedge designation Classification of gain (loss) 2016 2015 Not designated as hedges: Foreign exchange contracts Selling, general & administrative expenses $ 3,597 $ (9,604 ) Commodity contracts Cost of goods sold (369 ) (144 ) The effects of designated hedges on AOCI and the Company’s Consolidated Statements of Operations consisted of the following: Total gain (loss) recognized in AOCI, net of tax March 31, 2016 December 31, 2015 Foreign exchange contracts $ 285 $ (551 ) Net investment contracts 1,099 1,099 The Company expects a gain of $285 related to existing contracts to be reclassified from AOCI, net of tax, to earnings over the next 12 months as the hedged transactions are realized. Three Months Ended March 31, Derivative type Gain (loss) reclassified from AOCI to: 2016 2015 Foreign exchange contracts Sales $ (787 ) $ (529 ) Cost of goods sold (76 ) 307 |
FAIR VALUE
FAIR VALUE | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE The following table provides a summary of assets and liabilities as of March 31, 2016 , measured at fair value on a recurring basis: Description Balance as of Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Foreign exchange contracts $ 11,089 $ — $ 11,089 $ — Commodity contracts 3 — 3 — Total assets $ 11,092 $ — $ 11,092 $ — Liabilities: Foreign exchange contracts $ 2,729 $ — $ 2,729 $ — Commodity contracts 32 — 32 — Contingent consideration 1,761 — — 1,761 Forward contract 28,543 — — 28,543 Deferred compensation 24,127 — 24,127 — Total liabilities $ 57,192 $ — $ 26,888 $ 30,304 The following table provides a summary of assets and liabilities as of December 31, 2015 , measured at fair value on a recurring basis: Description Balance as of December 31, 2015 Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Foreign exchange contracts $ 803 $ — $ 803 $ — Commodity contracts 40 — 40 — Total assets $ 843 $ — $ 843 $ — Liabilities: Foreign exchange contracts $ 3,034 $ — $ 3,034 $ — Commodity contracts 8 — 8 — Contingent considerations 9,184 — — 9,184 Forward contract 26,484 — — 26,484 Deferred compensation 23,201 — 23,201 — Total liabilities $ 61,911 $ — $ 26,243 $ 35,668 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 Company measures the fair value of commodity contracts using Level 2 inputs through observable market transactions in active markets provided by financial institutions. During the three months ended March 31, 2016 , there were no transfers between Levels 1, 2 or 3. In connection with an acquisition, the Company recorded a contingent consideration fair valued at $1,761 as of March 31, 2016 . Under the contingent consideration agreement the amount to be paid is based upon actual financial results of the acquired entity over the three-year period ending August 2018. The fair value of the contingent consideration is a Level 3 valuation and fair valued using a probability weighted discounted cash flow analysis. In connection with an acquisition, the Company obtained a controlling financial interest in the acquired entity and at the same time entered into a contract to obtain the remaining financial interest in the entity over a three -year period through 2016. The amount to be paid to obtain the remaining financial interest will be based upon actual financial results of the entity. A liability was recorded for the Canadian dollar denominated forward contract at a fair value of $28,543 as of March 31, 2016 . The change in liability from December 31, 2015 was primarily the result of foreign exchange translation and additional accruals of $193 for the three months ended March 31, 2016 . The fair value of the contract is a Level 3 valuation and is based on the present value of the expected future payments. The expected future payments are based on a multiple of forecasted earnings and cash flows over the three-year period ending December 31, 2016, present valued utilizing a risk based discount rate of 3.5% reflective of the Company's cost of debt and 14.0% as a risk adjusted cost of capital. The deferred compensation liability is the Company’s obligation under its executive deferred compensation plan. The Company measures the fair value of the liability using the market values of the participants’ underlying investment fund elections. The fair value of Cash and cash equivalents, Accounts receivable, Short-term debt excluding the current portion of long-term debt and Trade accounts payable approximated book value due to the short-term nature of these instruments at both March 31, 2016 and December 31, 2015 . The fair value of long-term debt at March 31, 2016 and December 31, 2015 , including the current portion, was approximately $348,911 and $342,602 , respectively, which was determined using available market information and methodologies requiring judgment. The carrying value of this debt at such dates was $351,275 and $351,803 , respectively. Since considerable judgment is required in interpreting market information, the fair value of the debt is not necessarily the amount that could be realized in a current market exchange. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Segments | The Company’s primary business is the design and manufacture 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, CNC and plasma cutters, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, consumable electrodes, fluxes and welding accessories. 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. During the first quarter of 2016, the Company realigned 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 primarily includes welding operations in Europe, Africa, Asia and Australia. The Harris Products Group includes the Company’s global cutting, soldering and brazing businesses as well as its retail business in the United States. All prior period results have been revised to reflect the realigned segment structure. Segment performance is measured and resources are allocated based on a number of factors, the primary profit measure being earnings before interest and income taxes (“EBIT”), as adjusted. EBIT is defined as Operating income plus Equity earnings in affiliates and Other income. Segment EBIT is adjusted for special items as determined by management such as the impact of rationalization activities, certain asset impairment charges and gains or losses on disposals of assets. |
Inventories | The valuation of last-in, first-out ("LIFO") method inventories is made at the end of each year based on inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs. Actual year-end costs and inventory levels may differ from interim LIFO inventory valuations. |
Financial Instruments | The Company uses derivatives to manage exposures to currency exchange rates, interest rates and commodity prices arising in the normal course of business. Both at inception and on an ongoing basis, the derivative instruments that qualify for hedge accounting are assessed as to their effectiveness, when applicable. Hedge ineffectiveness was immaterial in the three months ended March 31, 2016 and 2015. The Company is subject to the credit risk of the counterparties to derivative instruments. Counterparties include a number of major banks and financial institutions. None of the concentrations of risk with any individual counterparty was considered significant at March 31, 2016 . The Company does not expect any counterparties to fail to meet their obligations. Cash Flow Hedges Certain foreign currency forward contracts were qualified and designated as cash flow hedges. The dollar equivalent gross notional amount of these short-term contracts was $46,497 at March 31, 2016 and $30,388 at December 31, 2015 . Net Investment Hedges The Company has foreign currency forward contracts that were qualified and designated as net investment hedges. No such contracts were outstanding at March 31, 2016 and December 31, 2015 . 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 $290,209 at March 31, 2016 and $267,626 at December 31, 2015 . The Company had short-term silver forward contracts with notional amounts of $3,219 and $2,804 at March 31, 2016 and December 31, 2015 . |
NEW ACCOUNTING PRONOUNCEMENTS | New Accounting Pronouncements Adopted: In September 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2015-16, "Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments." ASU 2015-16 requires an acquiring entity to recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments also require an entity to record the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. An entity must present separately on the face of the statement of operations or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The amendments should be applied prospectively. ASU 2015-16 was adopted by the Company effective January 1, 2016 and did not have an impact on the Company's financial statements. In May 2015, the FASB issued ASU No. 2015-07, "Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share." ASU 2015-07 removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient and removes the requirement to make certain disclosures for these investments. The amendment should be applied retrospectively. ASU 2015-07 was adopted by the Company effective January 1, 2016 and did not have an impact on the Company's financial statements. New Accounting Pronouncements Yet to be Adopted: In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting." ASU 2016-09 amends several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. If early adopted, an entity must adopt all of the amendments in the same period. The Company is currently evaluating the impact of the adoption of ASU 2016-09 on the Company's financial statements. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." ASU 2016-02 aims to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requiring disclosure of key information about leasing agreements. Entities are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2016-02 on the Company's financial statements. In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." ASU 2014-09 requires an entity to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the amendment provides five steps that an entity should apply when recognizing revenue. The amendment also specifies the accounting of some costs to obtain or fulfill a contract with a customer and expands the disclosure requirements around contracts with customers. An entity can either adopt this amendment retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying the update recognized at the date of initial application. In August 2015, the FASB issued ASU 2015-14, " Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," which deferred the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted as of annual reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact of the adoption of ASU 2014-09 on the Company's financial statements. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended March 31, 2016 2015 Numerator: Net income $ 53,638 $ 68,354 Denominator: Basic weighted average shares outstanding (in 000's) 69,585 76,242 Effect of dilutive securities - Stock options and awards (in 000's) 661 817 Diluted weighted average shares outstanding (in 000's) 70,246 77,059 Basic earnings per share $ 0.77 $ 0.90 Diluted earnings per share $ 0.76 $ 0.89 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of financial information for the reportable segments | Financial information for the reportable segments follows: Americas Welding International Welding The Harris Products Group Corporate / Eliminations Consolidated Three Months Ended March 31, 2016 Net sales $ 359,008 $ 124,305 $ 67,409 $ — $ 550,722 Inter-segment sales 23,831 4,426 2,303 (30,560 ) — Total $ 382,839 $ 128,731 $ 69,712 $ (30,560 ) $ 550,722 EBIT, as adjusted $ 61,438 $ 6,233 $ 7,711 $ 1,197 $ 76,579 Special items charge (gain) — — — — — EBIT $ 61,438 $ 6,233 $ 7,711 $ 1,197 $ 76,579 Interest income 430 Interest expense (3,827 ) Income before income taxes $ 73,182 Three months ended March 31, 2015 Net sales $ 448,837 $ 139,247 $ 69,816 $ — $ 657,900 Inter-segment sales 23,023 5,027 2,011 (30,061 ) — Total $ 471,860 $ 144,274 $ 71,827 $ (30,061 ) $ 657,900 EBIT, as adjusted $ 75,415 $ 10,934 $ 7,549 $ 60 $ 93,958 Special items charge (gain) — — — — — EBIT $ 75,415 $ 10,934 $ 7,549 $ 60 $ 93,958 Interest income 593 Interest expense (1,844 ) Income before income taxes $ 92,707 |
RATIONALIZATION AND ASSET IMP26
RATIONALIZATION AND ASSET IMPAIRMENTS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Reserve by Type of Cost [Table Text Block] | The following tables summarize the activity related to the rationalization liabilities by segment for the three months ended March 31, 2016 : Americas Welding International Welding Consolidated Balance, December 31, 2015 $ 67 $ 7,598 $ 7,665 Payments and other adjustments (67 ) (425 ) (492 ) Charged to expense — — — Balance, March 31, 2016 $ — $ 7,173 $ 7,173 |
EQUITY (Tables)
EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Schedule of changes in equity | Changes in equity for the three months ended March 31, 2016 are as follows: Shareholders’ Equity Non-controlling Interests Total Equity Balance, December 31, 2015 $ 931,587 $ 861 $ 932,448 Comprehensive income (loss): Net income (loss) 53,638 (14 ) 53,624 Other comprehensive income 26,688 15 26,703 Total comprehensive income 80,326 1 80,327 Cash dividends declared - $0.32 per share (22,145 ) — (22,145 ) Issuance of shares under benefit plans 4,527 — 4,527 Purchase of shares for treasury (102,488 ) — (102,488 ) Balance, March 31, 2016 $ 891,807 $ 862 $ 892,669 |
Components of accumulated other comprehensive (loss) income | The following tables set forth the total changes in accumulated other comprehensive income (loss) ("AOCI") by component, net of taxes for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges Defined benefit pension plan activity Currency translation adjustment Total Balance at December 31, 2015 $ 548 $ (99,776 ) $ (197,039 ) $ (296,267 ) Other comprehensive income (loss) 1,699 (20 ) 24,234 3 25,913 Amounts reclassified from AOCI (863 ) 1 1,638 2 — 775 Net current-period other 836 1,618 24,234 26,688 Balance at March 31, 2016 $ 1,384 $ (98,158 ) $ (172,805 ) $ (269,579 ) Three Months Ended March 31, 2015 Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges Defined benefit pension plan activity Currency translation adjustment Total Balance at December 31, 2014 $ (9 ) $ (197,893 ) $ (90,720 ) $ (288,622 ) Other comprehensive income (loss) 1,322 — (56,011 ) 3 (54,689 ) Amounts reclassified from AOCI (222 ) 1 3,538 2 — 3,316 Net current-period other 1,100 3,538 (56,011 ) (51,373 ) Balance at March 31, 2015 $ 1,091 $ (194,355 ) $ (146,731 ) $ (339,995 ) 1 During the 2016 period, this AOCI reclassification is a component of Net sales of $ (787) (net of tax of $ (278) ) and Cost of goods sold of $ (76) (net of tax of $ 22 ); during the 2015 period, the reclassification is a component of Net sales of $ (529) (net of tax of $ (249) ) and Cost of goods sold of $ 307 (net of tax of $ 202 ). (See Note 15 - Derivatives for additional details.) 2 This AOCI component is included in the computation of net periodic pension costs (net of tax of $ 911 and $ 2,395 during the three months ended March 31, 2016 and 2015, respectively). (See Note 13 - Retirement and Postretirement Benefit Plans for additional details.) 3 The Other comprehensive income (loss) before reclassifications excludes $ 15 and $ (541) attributable to Non-controlling interests in the three months ended March 31, 2016 and 2015, respectively. The following tables set forth the total changes in AOCI by component, net of taxes for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges Defined benefit pension plan activity Currency translation adjustment Total Balance at December 31, 2015 $ 548 $ (99,776 ) $ (197,039 ) $ (296,267 ) Other comprehensive income (loss) 1,699 (20 ) 24,234 3 25,913 Amounts reclassified from AOCI (863 ) 1 1,638 2 — 775 Net current-period other 836 1,618 24,234 26,688 Balance at March 31, 2016 $ 1,384 $ (98,158 ) $ (172,805 ) $ (269,579 ) Three Months Ended March 31, 2015 Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges Defined benefit pension plan activity Currency translation adjustment Total Balance at December 31, 2014 $ (9 ) $ (197,893 ) $ (90,720 ) $ (288,622 ) Other comprehensive income (loss) 1,322 — (56,011 ) 3 (54,689 ) Amounts reclassified from AOCI (222 ) 1 3,538 2 — 3,316 Net current-period other 1,100 3,538 (56,011 ) (51,373 ) Balance at March 31, 2015 $ 1,091 $ (194,355 ) $ (146,731 ) $ (339,995 ) 1 During the 2016 period, this AOCI reclassification is a component of Net sales of $(787) (net of tax of $(278) ) and Cost of goods sold of $(76) (net of tax of $22 ); during the 2015 period, the reclassification is a component of Net sales of $(529) (net of tax of $(249) ) and Cost of goods sold of $307 (net of tax of $202 ). (See Note 14 - Derivatives for additional details.) 2 This AOCI component is included in the computation of net periodic pension costs (net of tax of $911 and $2,395 during the three months ended March 31, 2016 and 2015 , respectively). (See Note 12 - Retirement and Postretirement Benefit Plans for additional details.) 3 The Other comprehensive income (loss) before reclassifications excludes $15 and $(541) attributable to Non-controlling interests in the three months ended March 31, 2016 and 2015 , respectively. |
PRODUCT WARRANTY COSTS (Tables)
PRODUCT WARRANTY COSTS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Product Warranties Disclosures [Abstract] | |
Schedule of the changes in the carrying amount of product warranty accruals | The changes in the carrying amount of product warranty accruals for the three months ended March 31, 2016 and 2015 are as follows: Three Months Ended March 31, 2016 2015 Balance at December 31 $ 19,469 $ 15,579 Accruals for warranties 3,035 2,979 Settlements (3,063 ) (3,209 ) Foreign currency translation 147 (271 ) Balance at March 31 $ 19,588 $ 15,078 |
DEBT Senior Unsecured Notes (Ta
DEBT Senior Unsecured Notes (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Instrument [Line Items] | |
Schedule of Debt [Table Text Block] | The maturity and interest rates of the Notes are as follows: Amount Maturity Date Interest Rate Series A $ 100,000 August 20, 2025 3.15 % Series B 100,000 August 20, 2030 3.35 % Series C 50,000 April 1, 2035 3.61 % Series D 100,000 April 1, 2045 4.02 % |
RETIREMENT AND POSTRETIREMENT30
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Components of total pension cost | The components of total pension cost were as follows: Three Months Ended March 31, 2016 2015 Service cost $ 4,430 $ 5,422 Interest cost 6,011 10,331 Expected return on plan assets (8,864 ) (15,738 ) Amortization of prior service cost (99 ) (156 ) Amortization of net loss 2,666 5,820 Defined benefit plans 4,144 5,679 Multi-employer plans 202 217 Defined contribution plans 1,969 3,016 Total pension cost $ 6,315 $ 8,912 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair values of derivative instruments on the Company's Consolidated Balance Sheets | Fair values of derivative instruments in the Company’s Consolidated Balance Sheets follow: March 31, 2016 December 31, 2015 Derivatives by hedge designation Other Current Assets Other Current Liabilities Other Current Assets Other Current Liabilities Designated as hedging instruments: Foreign exchange contracts $ 1,268 $ 708 $ 178 $ 731 Not designated as hedging instruments: Foreign exchange contracts 9,821 2,021 625 2,303 Commodity contracts 3 32 40 8 Total derivatives $ 11,092 $ 2,761 $ 843 $ 3,042 |
Schedule of effects of undesignated derivative instruments on the Company's Consolidated Statements of Income | The effects of undesignated derivative instruments on the Company’s Consolidated Statements of Operations for the three months ended March 31, 2016 and 2015 consisted of the following: Three Months Ended March 31, Derivatives by hedge designation Classification of gain (loss) 2016 2015 Not designated as hedges: Foreign exchange contracts Selling, general & administrative expenses $ 3,597 $ (9,604 ) Commodity contracts Cost of goods sold (369 ) (144 ) |
Schedule of effects of designated hedges on AOCI and the entity's Consolidated Statements of Income | The effects of designated hedges on AOCI and the Company’s Consolidated Statements of Operations consisted of the following: Total gain (loss) recognized in AOCI, net of tax March 31, 2016 December 31, 2015 Foreign exchange contracts $ 285 $ (551 ) Net investment contracts 1,099 1,099 The Company expects a gain of $285 related to existing contracts to be reclassified from AOCI, net of tax, to earnings over the next 12 months as the hedged transactions are realized. Three Months Ended March 31, Derivative type Gain (loss) reclassified from AOCI to: 2016 2015 Foreign exchange contracts Sales $ (787 ) $ (529 ) Cost of goods sold (76 ) 307 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Summary of assets and liabilities measured at fair value on a recurring basis | The following table provides a summary of assets and liabilities as of March 31, 2016 , measured at fair value on a recurring basis: Description Balance as of Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Foreign exchange contracts $ 11,089 $ — $ 11,089 $ — Commodity contracts 3 — 3 — Total assets $ 11,092 $ — $ 11,092 $ — Liabilities: Foreign exchange contracts $ 2,729 $ — $ 2,729 $ — Commodity contracts 32 — 32 — Contingent consideration 1,761 — — 1,761 Forward contract 28,543 — — 28,543 Deferred compensation 24,127 — 24,127 — Total liabilities $ 57,192 $ — $ 26,888 $ 30,304 The following table provides a summary of assets and liabilities as of December 31, 2015 , measured at fair value on a recurring basis: Description Balance as of December 31, 2015 Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Foreign exchange contracts $ 803 $ — $ 803 $ — Commodity contracts 40 — 40 — Total assets $ 843 $ — $ 843 $ — Liabilities: Foreign exchange contracts $ 3,034 $ — $ 3,034 $ — Commodity contracts 8 — 8 — Contingent considerations 9,184 — — 9,184 Forward contract 26,484 — — 26,484 Deferred compensation 23,201 — 23,201 — Total liabilities $ 61,911 $ — $ 26,243 $ 35,668 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2015USD ($) | Mar. 31, 2016USD ($)VEB / $ | Sep. 30, 2015VEB / $ | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Venezuela-Highly Inflationary Economy | |||||
Venezuela foreign currency transaction loss | $ 4,334 | ||||
Inventory Write-down | 22,880 | ||||
DICOMRate | VEB / $ | 272.9 | 199.4 | |||
Net bolivar-denominated monetary assets position | 32 | $ (748) | |||
Cash and cash equivalents | 304,183 | 220,996 | $ 289,017 | $ 278,379 | |
VENEZUELA | |||||
Venezuela-Highly Inflationary Economy | |||||
Cash and cash equivalents | $ 642 | $ 510 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Numerator: | ||
Net income | $ 53,638 | $ 68,354 |
Denominator: | ||
Basic weighted average shares outstanding (in shares) | 69,585,000 | 76,242,000 |
Effect of dilutive securities - Stock options and awards (in shares) | 661,000 | 817,000 |
Diluted weighted average shares outstanding (in shares) | 70,246,000 | 77,059,000 |
Earnings (loss) per share | ||
Basic earnings (loss) per share (in dollars per share) | $ 0.77 | $ 0.90 |
Diluted earnings (loss) per share (in dollars per share) | $ 0.76 | $ 0.89 |
Anti-dilutive shares excluded from the computation of diluted earnings per share | 776,600 | 407,290 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Acquisitions | ||
Annual sales at the date of acquisition | $ 550,722 | $ 657,900 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016USD ($)segment | Mar. 31, 2015USD ($) | |
Financial information for the reportable segments | ||
Number of operating segments | segment | 3 | |
Net sales | $ 550,722 | $ 657,900 |
Inter-segment sales | 0 | 0 |
Total | 550,722 | 657,900 |
EBIT, as adjusted | 76,579 | 93,958 |
Special items net charges | 0 | 0 |
EBIT | 76,579 | 93,958 |
Interest income | 430 | 593 |
Interest expense | (3,827) | (1,844) |
Income before income taxes | 73,182 | 92,707 |
The Harris Products Group | ||
Financial information for the reportable segments | ||
Net sales | 67,409 | 69,816 |
Inter-segment sales | 2,303 | 2,011 |
Total | 69,712 | 71,827 |
EBIT, as adjusted | 7,711 | 7,549 |
Special items net charges | 0 | 0 |
EBIT | 7,711 | 7,549 |
Corporate / Eliminations | ||
Financial information for the reportable segments | ||
Net sales | 0 | 0 |
Inter-segment sales | (30,560) | (30,061) |
Total | (30,560) | (30,061) |
EBIT, as adjusted | 1,197 | 60 |
Special items net charges | 0 | 0 |
EBIT | 1,197 | 60 |
Americas Welding | ||
Financial information for the reportable segments | ||
Net sales | 359,008 | 448,837 |
Inter-segment sales | 23,831 | 23,023 |
Total | 382,839 | 471,860 |
EBIT, as adjusted | 61,438 | 75,415 |
Special items net charges | 0 | 0 |
EBIT | 61,438 | 75,415 |
International Welding | ||
Financial information for the reportable segments | ||
Net sales | 124,305 | 139,247 |
Inter-segment sales | 4,426 | 5,027 |
Total | 128,731 | 144,274 |
EBIT, as adjusted | 6,233 | 10,934 |
Special items net charges | 0 | 0 |
EBIT | $ 6,233 | $ 10,934 |
RATIONALIZATION AND ASSET IMP37
RATIONALIZATION AND ASSET IMPAIRMENTS Summary of Activity Related to Rationalization Liabilities by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Rationalization and Asset Impairments | ||
Restructuring Reserve | $ 7,173 | $ 7,665 |
Payments and other adjustments | (492) | |
Business Exit Costs | 0 | |
Americas Welding | ||
Rationalization and Asset Impairments | ||
Restructuring Reserve | 0 | 67 |
Payments and other adjustments | (67) | |
Business Exit Costs | 0 | |
International Welding | ||
Rationalization and Asset Impairments | ||
Restructuring Reserve | 7,173 | $ 7,598 |
Payments and other adjustments | (425) | |
Business Exit Costs | $ 0 |
RATIONALIZATION AND ASSET IMP38
RATIONALIZATION AND ASSET IMPAIRMENTS (Textual) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Rationalization and Asset Impairments | |||
Restructuring Reserve | $ 7,173 | $ 7,665 | |
Special Items Charge (Gain) | 0 | $ 0 | |
Other current assets | 102,522 | 91,167 | |
Other current liabilities | 217,021 | 213,224 | |
International Welding | |||
Rationalization and Asset Impairments | |||
Restructuring Reserve | 7,173 | $ 7,598 | |
Special Items Charge (Gain) | $ 0 | $ 0 |
EQUITY (Details)
EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||||||
Mar. 31, 2016 | Mar. 31, 2015 | Apr. 20, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||
Non-controlling interests | $ 862 | $ 861 | |||||
Stockholders' Equity Attributable to Parent | $ 891,807 | 931,587 | |||||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 45,000,000 | 10,000,000 | |||||
Treasury Stock, Shares, Acquired | 1,945,405 | ||||||
Changes in equity | |||||||
Balance at the beginning of the period | $ 932,448 | ||||||
Comprehensive income: | |||||||
Net income including non-controlling interests | 53,624 | $ 68,318 | |||||
Other comprehensive income | 26,703 | (51,914) | |||||
Total comprehensive income (loss) | 80,327 | $ 16,404 | |||||
Cash dividends declared - $0.32 per share for the three months ended March 31, 2016 | $ (22,145) | ||||||
Cash dividends declared per share (in dollars per share) | $ 0.32 | $ 0.29 | |||||
Issuance of shares under benefit plans | $ 4,527 | ||||||
Purchase of shares for treasury | (102,488) | ||||||
Balance at the end of the period | 892,669 | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (269,579) | $ (339,995) | (296,267) | $ (288,622) | |||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 25,913 | (54,689) | |||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 775 | 3,316 | |||||
Net Current-Period Other Comprehensive Income (Loss), Net of Tax | 26,688 | (51,373) | |||||
Net sales | 550,722 | 657,900 | |||||
Cost of goods sold | 361,620 | 437,510 | |||||
Income Tax Expense (Benefit) | $ 19,558 | 24,389 | |||||
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased | 2,802,516 | ||||||
Shareholders' Equity | |||||||
Comprehensive income: | |||||||
Net income including non-controlling interests | $ 53,638 | ||||||
Other comprehensive income | 26,688 | ||||||
Total comprehensive income (loss) | 80,326 | ||||||
Cash dividends declared - $0.32 per share for the three months ended March 31, 2016 | (22,145) | ||||||
Issuance of shares under benefit plans | 4,527 | ||||||
Purchase of shares for treasury | (102,488) | ||||||
Noncontrolling Interests | |||||||
Comprehensive income: | |||||||
Net income including non-controlling interests | (14) | ||||||
Other comprehensive income | 15 | ||||||
Total comprehensive income (loss) | 1 | ||||||
Cash dividends declared - $0.32 per share for the three months ended March 31, 2016 | 0 | ||||||
Issuance of shares under benefit plans | 0 | ||||||
Purchase of shares for treasury | 0 | ||||||
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | 1,384 | 1,091 | 548 | (9) | |||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 1,699 | 1,322 | |||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (863) | [1] | (222) | [2] | |||
Net Current-Period Other Comprehensive Income (Loss), Net of Tax | 836 | 1,100 | |||||
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income | Sales | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||
Net sales | (787) | (529) | |||||
Income Tax Expense (Benefit) | (278) | (249) | |||||
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income | Cost of goods sold | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||
Cost of goods sold | (76) | 307 | |||||
Income Tax Expense (Benefit) | 22 | 202 | |||||
Accumulated Defined Benefit Plans Adjustment [Member] | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (98,158) | (194,355) | (99,776) | (197,893) | |||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | (20) | 0 | |||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 1,638 | [3] | 3,538 | [4] | |||
Net Current-Period Other Comprehensive Income (Loss), Net of Tax | 1,618 | 3,538 | |||||
Accumulated Defined Benefit Plans Adjustment [Member] | Reclassification out of Accumulated Other Comprehensive Income | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||
Income Tax Expense (Benefit) | 911 | 2,395 | |||||
Accumulated Translation Adjustment [Member] | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (172,805) | (146,731) | $ (197,039) | $ (90,720) | |||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 24,234 | [5] | (56,011) | [6] | |||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | 0 | |||||
Net Current-Period Other Comprehensive Income (Loss), Net of Tax | 24,234 | (56,011) | |||||
Accumulated Translation Adjustment [Member] | Reclassification out of Accumulated Other Comprehensive Income | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||
Other Comprehensive (Income) Loss, Net of Tax, Portion Attributable to Noncontrolling Interest | $ 15 | $ (541) | |||||
[1] | During the 2016 period, this AOCI reclassification is a component of Net sales of $(787) (net of tax of $(278)) and Cost of goods sold of $(76) (net of tax of $22); during the 2015 period, the reclassification is a component of Net sales of $(529) (net of tax of $(249)) and Cost of goods sold of $307 (net of tax of $202). (See Note 15 - Derivatives for additional details.) | ||||||
[2] | During the 2016 period, this AOCI reclassification is a component of Net sales of $(787) (net of tax of $(278)) and Cost of goods sold of $(76) (net of tax of $22); during the 2015 period, the reclassification is a component of Net sales of $(529) (net of tax of $(249)) and Cost of goods sold of $307 (net of tax of $202). (See Note 14 - Derivatives for additional details.) | ||||||
[3] | This AOCI component is included in the computation of net periodic pension costs (net of tax of $911 and $2,395 during the three months ended March 31, 2016 and 2015, respectively). (See Note 13 - Retirement and Postretirement Benefit Plans for additional details.) | ||||||
[4] | This AOCI component is included in the computation of net periodic pension costs (net of tax of $911 and $2,395 during the three months ended March 31, 2016 and 2015, respectively). (See Note 12 - Retirement and Postretirement Benefit Plans for additional details.) | ||||||
[5] | The Other comprehensive income (loss) before reclassifications excludes $15 and $(541) attributable to Non-controlling interests in the three months ended March 31, 2016 and 2015, respectively. | ||||||
[6] | The Other comprehensive income (loss) before reclassifications excludes $15 and $(541) attributable to Non-controlling interests in the three months ended March 31, 2016 and 2015, respectively. |
EQUITY COMMON SHARE REPURCHASE
EQUITY COMMON SHARE REPURCHASE PROGRAM (Details) - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 20, 2016 | |
Subsequent Event [Line Items] | ||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 45,000,000 | 10,000,000 |
Treasury Stock, Shares, Acquired | 1,945,405 | |
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased | 2,802,516 |
INVENTORY VALUATION (Details)
INVENTORY VALUATION (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Excess of current cost over LIFO cost | $ 59,765 | $ 59,765 |
ACCRUED EMPLOYEE BONUS (Details
ACCRUED EMPLOYEE BONUS (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Mar. 31, 2015 |
Accrued Employee Compensation And Benefits Disclosure Abstract | ||
Accruals for year-end bonuses and related payroll taxes included in other current liabilities | $ 26,174 | $ 32,987 |
PRODUCT WARRANTY COSTS (Details
PRODUCT WARRANTY COSTS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Changes in the carrying amount of product warranty accruals | ||
Balance at beginning of year | $ 19,469 | $ 15,579 |
Accruals for warranties | 3,035 | 2,979 |
Settlements | (3,063) | (3,209) |
Foreign currency translation | 147 | (271) |
Balance at end of year | $ 19,588 | $ 15,078 |
DEBT (Details)
DEBT (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Apr. 30, 2015 | Sep. 30, 2014 | Mar. 31, 2016 | |
Debt | |||
Unamortized Debt Issuance Expense | $ 839 | ||
Revolving credit agreement | |||
Debt | |||
Borrowing capacity under the line of credit | $ 400,000 | ||
Line of Credit Facility, Initiation Date | Sep. 12, 2014 | ||
Covenant compliance description | As of March 31, 2016, the Company was in compliance with all of its covenants | ||
Additional increase in borrowing capacity of the line of credit available at the entity's option | $ 100,000 | ||
Debt Instrument, Term | 5 years | ||
Senior Notes [Member] | |||
Debt | |||
Debt Instrument, Initiation Date | Apr. 1, 2015 | ||
Debt Instrument, Face Amount | $ 350,000 | ||
Debt, Weighted Average Interest Rate | 3.50% | ||
Debt Instrument, Covenant Compliance | As of March 31, 2016, the Company was in compliance with all of its debt covenants | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 349,161 | ||
Weighted Average [Member] | |||
Debt | |||
Debt Instrument, Term | 19 years | ||
Minimum [Member] | Senior Notes [Member] | |||
Debt | |||
Debt Instrument, Term | 10 years | ||
Maximum | Senior Notes [Member] | |||
Debt | |||
Debt Instrument, Term | 30 years | ||
Senior Notes Series A [Member] | |||
Debt | |||
Debt Instrument, Maturity Date | Aug. 20, 2025 | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.15% | ||
Debt Instrument, Face Amount | $ 100,000 | ||
Senior Notes Series B [Member] | |||
Debt | |||
Debt Instrument, Maturity Date | Aug. 20, 2030 | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.35% | ||
Debt Instrument, Face Amount | $ 100,000 | ||
Senior Notes Series C [Member] | |||
Debt | |||
Debt Instrument, Maturity Date | Apr. 1, 2035 | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.61% | ||
Debt Instrument, Face Amount | $ 50,000 | ||
Senior Notes Series D [Member] | |||
Debt | |||
Debt Instrument, Maturity Date | Apr. 1, 2045 | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.02% | ||
Debt Instrument, Face Amount | $ 100,000 |
RETIREMENT AND POSTRETIREMENT45
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | ||
Service cost | $ 4,430 | $ 5,422 |
Interest cost | 6,011 | 10,331 |
Expected return on plan assets | (8,864) | (15,738) |
Amortization of prior service cost | (99) | (156) |
Amortization of net loss | 2,666 | 5,820 |
Defined benefit plans | 4,144 | 5,679 |
Multi-employer plans | 202 | 217 |
Defined contribution plans | 1,969 | 3,016 |
Total pension cost | 6,315 | $ 8,912 |
Voluntarily contribution to defined benefit plans in United States | $ 20,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Income taxes | $ 19,558 | $ 24,389 |
Pre-tax income | $ 73,182 | $ 92,707 |
Effective income tax rate (as a percent) | 26.70% | 26.30% |
Unrecognized tax benefits | $ 14,526 | |
Unrecognized tax benefits that, if recognized, would be reflected as a component of income tax expense | 8,369 | |
Reasonably possible reduction in prior years' unrecognized tax benefits during the next twelve months | $ 2,236 |
DERIVATIVES (Fair Value of Deri
DERIVATIVES (Fair Value of Derivative Instruments) (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | $ 11,092 | $ 843 |
Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 2,761 | 3,042 |
Designated as Hedging Instrument | Foreign exchange contracts | Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 1,268 | 178 |
Designated as Hedging Instrument | Foreign exchange contracts | Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 708 | 731 |
Not designated as hedging instruments | Foreign exchange contracts | Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 9,821 | 625 |
Not designated as hedging instruments | Foreign exchange contracts | Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 2,021 | 2,303 |
Not designated as hedging instruments | Commodity contracts | Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 3 | 40 |
Not designated as hedging instruments | Commodity contracts | Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | $ 32 | $ 8 |
DERIVATIVES (Income Statement I
DERIVATIVES (Income Statement Impact) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Foreign exchange contracts | Selling, general and administrative expense | ||
Effects of undesignated cash flow hedges on the entity's Consolidated Statements of Income | ||
Gains (loss) recognized in income | $ 3,597 | $ (9,604) |
Commodity contracts | Cost of goods sold | ||
Effects of undesignated cash flow hedges on the entity's Consolidated Statements of Income | ||
Gains (loss) recognized in income | $ (369) | $ (144) |
DERIVATIVES (AOCI Impact) (Deta
DERIVATIVES (AOCI Impact) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Foreign exchange contracts | |||
Effects of designated cash flow hedges on the entity's AOCI | |||
Gain (loss) recognized in AOCI, net of tax | $ 285 | $ (551) | |
Foreign exchange contracts | Sales | |||
Effects of designated cash flow hedges on the entity's AOCI | |||
Gain (loss) reclassified from AOCI to income | (787) | $ (529) | |
Foreign exchange contracts | Cost of goods sold | |||
Effects of designated cash flow hedges on the entity's AOCI | |||
Gain (loss) reclassified from AOCI to income | (76) | $ 307 | |
Net Investment Hedging [Member] | |||
Effects of designated cash flow hedges on the entity's AOCI | |||
Gain (loss) recognized in AOCI, net of tax | $ 1,099 | $ 1,099 |
DERIVATIVES (Textual) (Details)
DERIVATIVES (Textual) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Derivative [Line Items] | ||
Gain (loss) expected to be reclassified from AOCI to earnings, next twelve months | $ 285 | |
Gain (loss) expected to be reclassified from AOCI to earnings, period of recognition | 12 months | |
Hedge ineffectiveness was immaterial | Hedge ineffectiveness was immaterial in the three months ended March 31, 2016 and 2015. | |
Foreign exchange contracts | Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 46,497 | $ 30,388 |
Foreign exchange contracts | Not designated as hedging instruments | ||
Derivative [Line Items] | ||
Derivative, notional amount | 290,209 | 267,626 |
Silver forward contract | Not designated as hedging instruments | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 3,219 | $ 2,804 |
FAIR VALUE (Details)
FAIR VALUE (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Liabilities: | ||
Contingent consideration | $ 1,761 | |
Fair Value, Measurements, Recurring [Member] | Fair value. | ||
Assets: | ||
Total assets | 11,092 | $ 843 |
Liabilities: | ||
Contingent consideration | 1,761 | 9,184 |
Forward contract | 28,543 | 26,484 |
Deferred compensation | 24,127 | 23,201 |
Total liabilities | 57,192 | 61,911 |
Fair Value, Measurements, Recurring [Member] | Fair value. | Foreign exchange contracts | ||
Assets: | ||
Assets | 11,089 | 803 |
Liabilities: | ||
Liabilities | 2,729 | 3,034 |
Fair Value, Measurements, Recurring [Member] | Fair value. | Commodity contracts | ||
Assets: | ||
Assets | 3 | 40 |
Liabilities: | ||
Liabilities | 32 | 8 |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Forward contract | 0 | 0 |
Deferred compensation | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) | Foreign exchange contracts | ||
Assets: | ||
Assets | 0 | 0 |
Liabilities: | ||
Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) | Commodity contracts | ||
Assets: | ||
Assets | 0 | 0 |
Liabilities: | ||
Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Total assets | 11,092 | 843 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Forward contract | 0 | 0 |
Deferred compensation | 24,127 | 23,201 |
Total liabilities | 26,888 | 26,243 |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | Foreign exchange contracts | ||
Assets: | ||
Assets | 11,089 | 803 |
Liabilities: | ||
Liabilities | 2,729 | 3,034 |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | Commodity contracts | ||
Assets: | ||
Assets | 3 | 40 |
Liabilities: | ||
Liabilities | 32 | 8 |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration | 1,761 | 9,184 |
Forward contract | 28,543 | 26,484 |
Deferred compensation | 0 | 0 |
Total liabilities | 30,304 | 35,668 |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | Foreign exchange contracts | ||
Assets: | ||
Assets | 0 | 0 |
Liabilities: | ||
Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | Commodity contracts | ||
Assets: | ||
Assets | 0 | 0 |
Liabilities: | ||
Liabilities | $ 0 | $ 0 |
FAIR VALUE (Textual) (Details)
FAIR VALUE (Textual) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Assets and liabilities measured at fair value on a recurring basis | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Period Increase (Decrease) | $ 193 | |
Fair value of contingent consideration liability | $ 1,761 | |
Business Combination Arrangement Remaining Interest Period | 3 years | |
Cost of debt (as a percent) | 3.50% | |
Risk adjusted cost of capital (as a percent) | 14.00% | |
Fair value of long-term debt | $ 348,911 | $ 342,602 |
Carrying value of long-term debt | 351,275 | 351,803 |
Estimate of Fair Value Measurement [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Fair value of contingent consideration liability | 1,761 | 9,184 |
Fair Value of forward contract liability | $ 28,543 | $ 26,484 |