Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2018shares | |
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 | Sep. 30, 2018 |
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 | 64,445,633 |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net sales (Note 2) | $ 737,099 | $ 669,491 | $ 2,284,847 | $ 1,877,246 |
Cost of goods sold | 485,547 | 451,610 | 1,506,625 | 1,240,391 |
Gross profit | 251,552 | 217,881 | 778,222 | 636,855 |
Selling, general & administrative expenses | 148,129 | 133,826 | 473,260 | 387,820 |
Restructuring, Settlement and Impairment Provisions | 2,636 | 0 | 24,353 | 0 |
Bargain purchase gain (Note 4) | 0 | 51,585 | 0 | 51,585 |
Operating income | 100,787 | 135,640 | 280,609 | 300,620 |
Interest Income (Expense), Net | (3,969) | (4,595) | (13,222) | (14,984) |
Other income (expense) (Note 13) | (1,074) | (403) | 6,818 | 6,872 |
Income before income taxes | 95,744 | 130,642 | 274,205 | 292,508 |
Income taxes (Note 14) | 25,209 | 24,531 | 73,991 | 69,218 |
Net income including non-controlling interests | 70,535 | 106,111 | 200,214 | 223,290 |
Non-controlling interests in subsidiaries’ earnings (loss) | (4) | (15) | (13) | (32) |
Net income | $ 70,539 | $ 106,126 | $ 200,227 | $ 223,322 |
Basic earnings (loss) per share (in dollars per share) | $ 1.09 | $ 1.61 | $ 3.07 | $ 3.40 |
Diluted earnings (loss) per share (in dollars per share) | 1.07 | 1.59 | 3.03 | 3.35 |
Cash dividends declared per share (in dollars per share) | $ 0.39 | $ 0.35 | $ 1.17 | $ 1.05 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income including non-controlling interests | $ 70,535 | $ 106,111 | $ 200,214 | $ 223,290 |
Other comprehensive income (loss), net of tax: | ||||
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax of $390 and $415 in the three and nine months ended September 30, 2018; $239 and $(95) in the three and nine months ended September 30, 2017. | 1,416 | (684) | 1,039 | 563 |
Defined benefit pension plan activity, net of tax of $1,278 and $1,927 in the three and nine months ended September 30, 2018; $2,170 and $2,532 in the three and nine months ended September 30, 2017. | 3,855 | 3,958 | 5,863 | 5,384 |
Currency translation adjustment | (467) | 18,931 | (31,422) | 72,820 |
Other comprehensive income (loss): | 4,804 | 22,205 | (24,520) | 78,767 |
Comprehensive income | 75,339 | 128,316 | 175,694 | 302,057 |
Comprehensive income (loss) attributable to non-controlling interests | (65) | 16 | (105) | 47 |
Comprehensive income attributable to shareholders | $ 75,404 | $ 128,300 | $ 175,799 | $ 302,010 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, tax (benefit) | $ 390 | $ 239 | $ 415 | $ (95) |
Unrecognized amounts from defined benefit pension plans, tax benefit (expense) | $ 1,278 | $ 2,170 | $ 1,927 | $ 2,532 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash and cash equivalents | $ 398,200 | $ 326,701 |
Accounts receivable (less allowance for doubtful accounts of $13,986 in 2018; $15,943 in 2017) | 409,594 | 395,279 |
Inventories (Note 8) | 377,431 | 348,667 |
Marketable Securities | 99,282 | 179,125 |
Other current assets | 121,065 | 123,836 |
Total Current Assets | 1,405,572 | 1,373,608 |
Property, plant and equipment (less accumulated depreciation of $799,084 in 2018; $787,780 in 2017) | 461,828 | 477,031 |
Goodwill | 233,741 | 234,582 |
Other assets | 318,504 | 321,326 |
TOTAL ASSETS | 2,419,645 | 2,406,547 |
LIABILITIES AND EQUITY | ||
Short-term debt (Note 11) | 794 | 2,131 |
Trade accounts payable | 246,783 | 269,763 |
Accrued employee compensation and benefits | 138,622 | 91,902 |
Other current liabilities | 159,352 | 164,946 |
Total Current Liabilities | 545,551 | 528,742 |
Long-Term Liabilities | ||
Long-term debt, less current portion (Note 11) | 698,468 | 704,136 |
Other liabilities | 247,758 | 241,216 |
Total Liabilities | 1,491,777 | 1,474,094 |
Shareholders’ Equity | ||
Common shares | 9,858 | 9,858 |
Additional paid-in capital | 357,749 | 334,309 |
Retained earnings | 2,505,396 | 2,388,219 |
Accumulated other comprehensive loss | (271,614) | (247,186) |
Treasury shares | (1,674,232) | (1,553,563) |
Total Shareholders’ Equity | 927,157 | 931,637 |
Non-controlling interests | 711 | 816 |
Total Equity (Note 7) | 927,868 | 932,453 |
TOTAL LIABILITIES AND TOTAL EQUITY | $ 2,419,645 | $ 2,406,547 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 13,986 | $ 15,943 |
Accumulated depreciation | $ 799,084 | $ 787,780 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 200,227 | $ 223,322 |
Non-controlling interests in subsidiaries’ earnings (loss) | (13) | (32) |
Net income including non-controlling interests | 200,214 | 223,290 |
Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities: | ||
Rationalization and asset impairment net gains (Note 6) | (1,408) | 0 |
Bargain purchase gain (Note 4) | 0 | 51,585 |
Depreciation and amortization | 53,946 | 50,457 |
Equity earnings in affiliates, net | (1,427) | (216) |
Deferred income taxes | 4,444 | 3,129 |
Stock-based compensation | 13,583 | 9,966 |
Pension expense and settlement charges (Note 12) | 2,714 | 816 |
Other, net | (8,659) | (330) |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||
Increase in accounts receivable | (25,492) | (24,300) |
Increase in inventories | (41,533) | (22,526) |
(Increase) decrease in other current assets | (12,081) | 515 |
Decrease in trade accounts payable | (17,523) | (8,932) |
Increase in other current liabilities | 58,397 | 61,332 |
Net change in other assets and liabilities | 4,602 | 3,738 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 229,777 | 245,354 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capital expenditures | (48,746) | (38,959) |
Payments to Acquire Businesses, Net of Cash Acquired | 6,591 | (72,468) |
Proceeds from sale of property, plant and equipment | 10,585 | 1,994 |
Purchase of marketable securities | (268,335) | (145,553) |
Proceeds from marketable securities | 348,178 | 5,190 |
NET CASH PROVIDED BY (USED BY) INVESTING ACTIVITIES | 48,273 | (249,796) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Amounts due banks, net | (639) | (602) |
Proceeds from Issuance of Long-term Debt | 0 | 34 |
Payments on long-term borrowings | (7) | (37) |
Proceeds from exercise of stock options | 4,448 | 14,333 |
Purchase of shares for treasury (Note 7) | (121,477) | (23,012) |
Cash dividends paid to shareholders | (76,674) | (69,083) |
Other financing activities | (2,170) | (15,561) |
NET CASH USED BY FINANCING ACTIVITIES | (196,519) | (93,928) |
Effect of exchange rate changes on Cash and cash equivalents | (10,032) | 18,644 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 71,499 | (79,726) |
Cash and cash equivalents at beginning of period | 326,701 | 379,179 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 398,200 | $ 299,453 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation 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 consolidated financial statements include the accounts of all legal entities in which the Company holds a controlling interest. The Company is also considered to have a controlling interest in a variable interest entity (“VIE”) if the Company determines it is the primary beneficiary of the VIE. Investments in legal entities in which the Company does not own a majority interest but has the ability to exercise significant influence over operating and financial policies are accounted for using the equity method. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these unaudited consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements. However, in the opinion of management, these unaudited consolidated financial statements contain all the adjustments (consisting of normal recurring accruals) considered necessary to present fairly the financial position, results of operations and cash flows for the interim periods. Operating results for the nine months ended September 30, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 . The accompanying Consolidated Balance Sheet at December 31, 2017 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, 2017 . Certain reclassifications have been made to the prior year financial statements to conform to current year classifications. New Accounting Pronouncements: This section provides a description of new accounting pronouncements ("Accounting Standard Update" or "ASU") issued by the Financial Accounting Standards Board ("FASB") that are applicable to the Company. The following ASUs were adopted as of January 1, 2018 and did not have a significant financial impact on the Company's consolidated financial statements unless otherwise described within the table below: Standard Description ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities , issued August 2017. ASU 2017-12 provides updated guidance to more closely align hedge accounting with a company's risk management strategy, to simplify the application of hedge accounting and to better portray the economic results of hedging instruments in the financial statements. The Company early adopted the ASU on January 1, 2018. Standard Description ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Period Pension Cost and Net Periodic Postretirement Benefit Cost , issued March 2017. ASU 2017-07 requires an entity to report the service cost component of the net periodic benefit cost in the same income statement line item as other employee compensation costs. The other components of the net periodic benefit cost are required to be presented in the income statement separately from the service cost component and outside of any subtotal of operating income. Additionally, only the service cost component will be eligible for capitalization in assets. The impact of the adoption resulted in the reclassification of the other components of net periodic benefit cost from Cost of goods sold and Selling, general & administrative expenses to Other income (expense). The reclassification resulted in an increase in Operating income of $2,570 as a result of a decrease in Pension settlement charges of $5,283, partially offset by increases in Cost of goods sold of $1,635 and Selling, general & administrative expenses of $1,078 for the three months ended September 30, 2017. The reclassification resulted in a decrease in Operating income of $1,578 as a result of a decrease in Pension settlement charges of $5,283, partially offset by increases in Cost of goods sold of $4,005 and Selling, general & administrative expenses of $2,856 for the nine months ended September 30, 2017. Refer to Note 12 to the consolidated financial statements for details. ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, issued January 2017. ASU 2017-01 provides updated guidance for evaluating whether certain transactions should be accounted for as an acquisition (or disposal) of an asset or a business. ASU No. 2016-18, Statement of Cash Flows(Topic 230): Restricted Cash, issued November 2016. ASU 2016-18 requires amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU No. 2016-16 , Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory, issued October 2016. ASU 2016-16 requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, issued August 2016. ASU 2016-15 reduces existing diversity in practice by addressing eight specific cash flow issues related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2014-09, Revenue from Contracts with Customers (Topic 606) issued May 2014 and ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , issued August 2015. 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. The standard 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. ASU 2015-14 deferred the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted ASU 2014-09 as of January 1, 2018 using the modified retrospective transition method applied to those contracts that were not completed as of that date. The adoption did not have a material impact on the consolidated financial statements. Refer to Note 2 to the consolidated financial statements for further details. The Company is currently evaluating the impact on its financial statements of the following ASUs: Standard Description ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20), issued August 2018. ASU 2018-14 modifies disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The ASU also requires an entity to disclose the weighted-average interest crediting rates for cash balance plans and to explain the reasons for significant gains and losses related to changes in the benefit obligation. The ASU is effective January 1, 2020 and early adoption is permitted. ASU No. 2018-13, Fair Value Measurement (Topic 944) , issued August 2018. ASU 2018-13 eliminates, amends and adds disclosure requirements related to fair value measurements. The ASU impacts various elements of fair value disclosure, including but not limited to, changes in unrealized gains or losses, significant unobservable inputs and measurement uncertainty. The ASU is effective January 1, 2020 and early adoption is permitted. ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) , issued February 2018. ASU 2018-02 allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the U.S. Tax Act (as defined within Note 14 to the consolidated financial statements). The ASU only applies to the income tax effects of the U.S. Tax Act, all other existing guidance remains the same. The ASU is effective January 1, 2019, early adoption is permitted and the ASU should be applied retrospectively to each period impacted by the U.S. Tax Act. ASU No. 2016-02, Leases (Topic 842) , issued February 2016 and ASU 2018-10, Codification Improvements to Topic 842, Leases , issued July 2018. 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. ASU 2018-10 provides narrow amendments to clarify how to apply certain aspects of the new lease standard. Entities are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. The ASU is effective January 1, 2019 and early adoption is permitted. The Company has established a cross-functional team to implement the ASU and is in the process of gathering data on all leases and designing a new system solution. The Company is also evaluating its processes and internal controls to meet the ASU’s accounting, reporting and disclosure requirements. While the Company has not yet completed its evaluation of the ASU’s impact, the Company expects to recognize a right of use asset and a corresponding liability on the Consolidated Balance Sheets related to substantially all operating lease arrangements. The Company plans to adopt the package of practical expedients for all leases commenced before January 1, 2019. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | REVENUE RECOGNITION Adoption of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)" On January 1, 2018, the Company adopted ASU 2014-09 (“Topic 606”) using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historic accounting. The cumulative impact of adopting Topic 606 as of January 1, 2018 did not have a material impact to the consolidated financial statements. The Company does not expect the impact of the adoption of Topic 606 to be material to the consolidated financial statements on an ongoing basis. Revenue Recognition Revenue is recognized when obligations under the terms of a contract are satisfied and control is transferred to the customer. Revenue is measured as the amount of consideration the Company expects to be entitled to in exchange for goods or services. The Company recognizes any discounts, credits, returns, rebates and incentive programs based on reasonable estimates as a reduction of sales to arrive at Net sales at the same time the related revenue is recorded. Taxes collected by the Company, including sales tax and value add tax, are excluded from Net sales. The Company recognizes freight billed as a component of Net sales and shipping costs as a component of Cost of goods sold when control transfers to the customer. Sales commissions are expensed when incurred because the amortization period is generally one year or less. These costs are recorded within Selling, general and administrative expenses in the Company's Consolidated Statements of Income. The Company’s payment terms vary by the type and location of the customer and the products or services offered. The Company does not offer any payment terms that would meet the requirements for consideration as a financing component under Topic 606. The following table presents the Company's Net sales disaggregated by product line: Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Consumables $ 426,837 $ 1,329,768 Equipment 310,262 955,079 Net sales $ 737,099 $ 2,284,847 Consumable sales consist of electrodes, fluxes, specialty welding consumables and brazing and soldering alloys. Equipment sales consist of arc welding power sources, welding accessories, fabrication, plasma cutters, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, CNC plasma and oxy-fuel cutting systems and regulators and torches used in oxy-fuel welding, cutting and brazing. Consumable and Equipment products are sold within each of the Company’s operating segments. Substantially all of the Company's sales arrangements are short-term in nature involving a single performance obligation. The Company recognizes revenue when control of the product is transferred to the customer based upon shipping terms. Within the Equipment product line, there are certain customer contracts related to automation products that may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines the standalone selling price based on the prices charged to customers or using expected cost plus margin. In addition, for certain customized automation deliverables within the Equipment product line, there are contracts accounted for over time. Under this method, revenue recognition is primarily based upon the ratio of costs incurred to date compared with estimated total costs to complete. The cumulative impact of revisions to total estimated costs is reflected in the period of the change, including anticipated losses. Less than 10% of the Company's Net sales are recognized over time. At September 30, 2018 , the Company recorded $18,302 related to advance customer payments and $15,095 related to billings in excess of revenue recognized. These contract liabilities are included in Other current liabilities in the Condensed Consolidated Balance Sheets. At January 1, 2018, the balances related to advance customer payments and billings in excess of revenue recognized were $19,683 and $11,132 , respectively. Substantially all of the Company’s contract liabilities are recognized within twelve months based on contract duration. The Company records an asset for contracts where it has recognized revenue, but has not yet invoiced the customer for goods or services. At September 30, 2018 and January 1, 2018, $33,429 and $22,229 , respectively, related to these future customer receivables was included in Other current assets in the Condensed Consolidated Balance Sheets. Contract asset amounts are expected to be billed within the next twelve months. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Net income $ 70,539 $ 106,126 $ 200,227 $ 223,322 Denominator (shares in 000's): Basic weighted average shares outstanding 64,821 65,806 65,245 65,769 Effect of dilutive securities - Stock options and awards 831 896 810 910 Diluted weighted average shares outstanding 65,652 66,702 66,055 66,679 Basic earnings per share $ 1.09 $ 1.61 $ 3.07 $ 3.40 Diluted earnings per share $ 1.07 $ 1.59 $ 3.03 $ 3.35 For the three months ended September 30, 2018 and 2017 , common shares subject to equity-based awards of 346,168 and 182,615 , respectively, were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive. For the nine months ended September 30, 2018 and 2017 , common shares subject to equity-based awards of 317,528 and 807,763 , respectively, were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS On July 31, 2017, the Company completed its acquisition of Air Liquide Welding, a subsidiary of Air Liquide. The agreed upon purchase price was $135,123 , which was adjusted for certain debt like obligations, for a net purchase price of $61,953 , net of cash acquired. The primary debt like obligations were pension liabilities. The acquisition was accounted for as a business combination. The funding of the cash portion of the purchase price and acquisition costs was provided for with available cash. The complementary business enhanced the Company’s global specialty consumables portfolio and extended its channel reach for equipment systems and cutting, soldering and brazing solutions in Europe. The acquisition also offers European customers more comprehensive welding solutions, greater technical application expertise and improved service levels. The fair value of the net assets acquired exceeded the purchase consideration, resulting in a bargain purchase gain at acquisition, which was included in Bargain purchase gain in the Company’s Consolidated Statements of Income for the nine months ended September 30, 2017. The Company believes that the bargain purchase gain was primarily the result of the divestiture by Air Liquide of the welding business, which was outside Air Liquide’s core business, as part of an overall repositioning of its core business. The Company anticipates future integration initiatives are necessary in order to achieve commercial and operational synergies. The following table summarizes the purchase price allocation for the Air Liquide Welding acquisition: Assets acquired and liabilities assumed As of July 31, 2017 Accounts receivable $ 89,442 Inventory (1) 97,803 Property, plant and equipment (2) 73,056 Intangible assets (3) 11,715 Accounts payable (65,640 ) Pension liability (67,563 ) Bargain purchase gain (6) (49,650 ) Net other assets and liabilities (4) (27,210 ) Total purchase price, net of cash acquired (5) $ 61,953 (1) A portion of inventories acquired were sold in the third quarter of 2017 resulting in a $2,314 increase in Cost of goods sold for the amortization of step up in the value of acquired inventories. (2) Property, plant and equipment acquired includes a number of manufacturing and distribution sites, including the related facilities, land and leased sites, and machinery and equipment for use in manufacturing operations. (3) $7,099 of the intangible asset balance was assigned to a trade name expected to have an indefinite life. Of the remaining amount, $1,183 was assigned to a finite-lived trade name ( 10 year weighted average useful life) and $3,433 was assigned to other intangible assets ( 9 year weighted average life). (4) Consists primarily of other accrued liabilities. (5) Reflects a receivable from seller for an agreed upon purchase price adjustment. The payment of $ 10,983 was received in the first quarter of 2018. (6) An adjustment of $ 1,935 was recorded to the Bargain purchase gain in the fourth quarter of 2017. In the three and nine months ended September 30, 2018 , the Company recognized $970 and $3,665 , respectively, in acquisition transaction and integration costs related to the acquisition of Air Liquide Welding. In the three and nine months ended September 30, 2017 , the Company recognized $3,273 and $11,386 , respectively, in acquisition transaction and integration costs related to the acquisition of Air Liquide Welding. Such costs were expensed as incurred and are included in Selling, general & administrative expenses in the Company's Consolidated Statements of Income. Pro forma information related to this acquisition has not been presented because the impact on the Company’s Consolidated Statements of Income is not material. Acquired companies are included in the Company's consolidated financial statements as of the date of acquisition. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company's business units are aligned into three operating segments. The operating segments consist of Americas Welding, International Welding and The Harris Products Group. The Americas Welding segment includes welding operations in North and South America. The International Welding segment includes welding operations in Europe, Africa, Asia and Australia. The Harris Products Group includes the Company’s global cutting, soldering and brazing businesses as well as its retail business in the United States. Segment performance is measured and resources are allocated based on a number of factors, the primary profit measure being adjusted earnings before interest and income taxes (“Adjusted EBIT”). EBIT is defined as Operating income plus Other income (expense). 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 September 30, 2018 Net sales $ 454,010 $ 209,622 $ 73,467 $ — $ 737,099 Inter-segment sales 31,845 3,663 1,537 (37,045 ) — Total $ 485,855 $ 213,285 $ 75,004 $ (37,045 ) $ 737,099 Adjusted EBIT $ 89,253 $ 10,721 $ 8,676 $ (1,099 ) $ 107,551 Special items charge (gain) (1) 4,232 2,636 — 970 7,838 EBIT $ 85,021 $ 8,085 $ 8,676 $ (2,069 ) $ 99,713 Interest income 1,993 Interest expense (5,962 ) Income before income taxes $ 95,744 Three Months Ended September 30, 2017 Net sales $ 398,289 $ 197,617 $ 73,585 $ — $ 669,491 Inter-segment sales 25,546 5,451 2,064 (33,061 ) — Total $ 423,835 $ 203,068 $ 75,649 $ (33,061 ) $ 669,491 Adjusted EBIT $ 74,096 $ 10,612 $ 9,244 $ 570 $ 94,522 Special items charge (gain) (2) 5,283 2,314 — (48,312 ) (40,715 ) EBIT $ 68,813 $ 8,298 $ 9,244 $ 48,882 $ 135,237 Interest income 1,327 Interest expense (5,922 ) Income before income taxes $ 130,642 Nine Months Ended September 30, 2018 Net sales $ 1,351,297 $ 700,315 $ 233,235 $ — $ 2,284,847 Inter-segment sales 89,671 13,669 5,447 (108,787 ) — Total $ 1,440,968 $ 713,984 $ 238,682 $ (108,787 ) $ 2,284,847 Adjusted EBIT $ 254,850 $ 41,970 $ 28,058 $ (4,443 ) $ 320,435 Special items charge (gain) (1) 4,990 24,353 — 3,665 33,008 EBIT $ 249,860 $ 17,617 $ 28,058 $ (8,108 ) $ 287,427 Interest income 5,273 Interest expense (18,495 ) Income before income taxes $ 274,205 Nine Months Ended September 30, 2017 Net sales $ 1,186,760 $ 468,003 $ 222,483 $ — $ 1,877,246 Inter-segment sales 75,380 15,214 6,763 (97,357 ) — Total $ 1,262,140 $ 483,217 $ 229,246 $ (97,357 ) $ 1,877,246 Adjusted EBIT $ 217,317 $ 29,713 $ 27,491 $ 369 $ 274,890 Special items charge (gain) (2) 5,283 2,314 — (40,199 ) (32,602 ) EBIT $ 212,034 $ 27,399 $ 27,491 $ 40,568 $ 307,492 Interest income 3,349 Interest expense (18,333 ) Income before income taxes $ 292,508 (1) In the three months ended September 30, 2018, special items reflect pension settlement charges of $4,232 in Americas Welding, rationalization and asset impairment charges of $2,636 in International Welding and transaction and integration costs of $970 in Corporate / Eliminations related to the Air Liquide Welding acquisition as discussed in Note 4 to the consolidated financial statements. In the nine months ended September 30, 2018 , special items reflect pension settlement charges of $4,990 in Americas Welding, rationalization and asset impairment charges of $24,353 in International Welding and transaction and integration costs of $3,665 in Corporate / Eliminations related to the Air Liquide Welding acquisition as discussed in Note 4 to the consolidated financial statements. (2) In the three and nine months ended September 30, 2017 , special items reflect pension settlement charges of $5,283 in Americas Welding, amortization of step up in value of acquired inventories of $2,314 in International Welding and transaction and integration costs of $3,273 and $11,386 , respectively, offset by a bargain purchase gain of $51,585 in Corporate / Eliminations related to the Air Liquide Welding acquisition as discussed in Note 4 to the consolidated financial statements. |
RATIONALIZATION AND ASSET IMPAI
RATIONALIZATION AND ASSET IMPAIRMENTS | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
RATIONALIZATION AND ASSET IMPAIRMENTS | RATIONALIZATION AND ASSET IMPAIRMENTS The Company recorded rationalization and asset impairment net charges of $24,353 in the nine months ended September 30, 2018 . The 2018 charges are primarily related to employee severance, asset impairments and gains or losses on the disposal of assets. A description of the Company's restructuring plans and the related costs is as follows: During 2018, the Company initiated rationalization plans within International Welding. The plans include headcount restructuring and the consolidation of manufacturing operations to better align the cost structures with economic conditions and operating needs. At September 30, 2018 , liabilities of $9,331 were recognized in Other current liabilities in the Company's Condensed Consolidated Balance Sheet. During 2017, the Company initiated rationalization plans within International Welding. The plans include headcount restructuring and the consolidation of manufacturing operations to better align the cost structures with economic conditions and operating needs. Liabilities related to these plans were substantially paid at September 30, 2018. 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 table summarizes the activity related to the rationalization liabilities in the International Welding segment: Nine Months Ended September 30, 2018 Balance, December 31, 2017 $ 6,803 Payments and other adjustments (20,053 ) Charged to expense 25,761 Balance, September 30, 2018 $ 12,511 |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | EQUITY Changes in equity for the nine months ended September 30, 2018 are as follows: Shareholders’ Equity Non-controlling Interests Total Equity Balance at December 31, 2017 $ 931,637 $ 816 $ 932,453 Comprehensive income (loss): Net income 200,227 (13 ) 200,214 Other comprehensive income (loss) (24,428 ) (92 ) (24,520 ) Total comprehensive income (loss) 175,799 (105 ) 175,694 Cash dividends declared - $1.17 per share (76,833 ) — (76,833 ) Issuance of shares under benefit plans 18,031 — 18,031 Purchase of shares for treasury (1) (121,477 ) — (121,477 ) Balance at September 30, 2018 $ 927,157 $ 711 $ 927,868 (1) The Company's total common shares authorized to be repurchased under the current repurchase program is 55 million shares. As of September 30, 2018 , there remained 7.1 million common shares available for repurchase under this program. The repurchased common shares remain in treasury and have not been retired. 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 September 30, 2018 and 2017 : Three Months Ended September 30, 2018 Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges Defined benefit pension plan activity Currency translation adjustment Total Balance at June 30, 2018 $ 498 $ (83,269 ) $ (193,708 ) $ (276,479 ) Other comprehensive income (loss) 1,218 — (406 ) 3 812 Amounts reclassified from AOCI 198 1 3,855 2 — 4,053 Net current-period other 1,416 3,855 (406 ) 4,865 Balance at September 30, 2018 $ 1,914 $ (79,414 ) $ (194,114 ) $ (271,614 ) Three Months Ended September 30, 2017 Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges Defined benefit pension plan activity Currency translation adjustment Total Balance at June 30, 2017 $ 1,834 $ (94,513 ) $ (179,844 ) $ (272,523 ) Other comprehensive income (loss) (1,814 ) — 18,900 3 17,086 Amounts reclassified from AOCI 1,130 1 3,958 2 — 5,088 Net current-period other (684 ) 3,958 18,900 22,174 Balance at September 30, 2017 $ 1,150 $ (90,555 ) $ (160,944 ) $ (250,349 ) (1) During the 2018 period, this AOCI reclassification is a component of Net sales of $ (124) (net of tax of $ (19) ) and Cost of goods sold of $ 74 (net of tax of $ (5) ); during the 2017 period, the reclassification is a component of Net sales of $ 968 (net of tax of $ 398 ) and Cost of goods sold of $ 162 (net of tax of $ 25 ). See Note 15 to the consolidated financial statements for additional details. (2) This AOCI component is included in the computation of net periodic pension costs (net of tax of $ 1,278 and $ 2,170 during the three months ended September 30, 2018 and 2017 , respectively). See Note 12 to the consolidated financial statements for additional details. (3) The Other comprehensive income (loss) before reclassifications excludes $ (61) and $ 31 attributable to Non-controlling interests in the three months ended September 30, 2018 and 2017 , respectively. The following tables set forth the total changes in AOCI by component, net of taxes, for the nine months ended September 30, 2018 and 2017 : Nine Months Ended September 30, 2018 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, 2017 $ 875 $ (85,277 ) $ (162,784 ) $ (247,186 ) Other comprehensive income (loss) 987 — (31,330 ) 3 (30,343 ) Amounts reclassified from AOCI 52 1 5,863 2 — 5,915 Net current-period other 1,039 5,863 (31,330 ) (24,428 ) Balance at September 30, 2018 $ 1,914 $ (79,414 ) $ (194,114 ) $ (271,614 ) Nine Months Ended September 30, 2017 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, 2016 $ 587 $ (95,939 ) $ (233,685 ) $ (329,037 ) Other comprehensive income (loss) (1,547 ) — 72,741 3 71,194 Amounts reclassified from AOCI 2,110 1 5,384 2 — 7,494 Net current-period other 563 5,384 72,741 78,688 Balance at September 30, 2017 $ 1,150 $ (90,555 ) $ (160,944 ) $ (250,349 ) (1) During the 2018 period, the AOCI reclassification is a component of Net sales of $(12) (net of tax of $(25) ) and Cost of goods sold of $40 (net of tax of $(24) ); during the 2017 period, the AOCI reclassification is a component of Net sales of $1,580 (net of tax of $602 ) and Cost of goods sold of $530 (net of tax of $214 ). See Note 15 to the consolidated financial statements for additional details. (2) The AOCI component is included in the computation of net periodic pension costs (net of tax of $1,927 and $2,532 during the nine months ended September 30, 2018 and 2017 , respectively). See Note 12 to the consolidated financial statements for additional details. (3) The Other comprehensive income (loss) before reclassifications excludes $(92) and $79 attributable to Non-controlling interests in the nine months ended September 30, 2018 and 2017 , respectively. |
INVENTORY VALUATION
INVENTORY VALUATION | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORY VALUATION | INVENTORIES Inventories in the Condensed Consolidated Balance Sheet is comprised of the following components: September 30, 2018 December 31, 2017 Raw materials $ 104,421 $ 97,577 Work-in-process 60,465 50,695 Finished goods 212,545 200,395 Total $ 377,431 $ 348,667 At September 30, 2018 and December 31, 2017 , approximately 37% and 32% of total inventories were valued using the last-in, first out ("LIFO") method, respectively. The excess of current cost over LIFO cost was $78,312 at September 30, 2018 and $68,641 at December 31, 2017 . |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
Sep. 30, 2018 | |
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, employment-related 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. For claims or litigation that are material, if an unfavorable outcome is determined to be reasonably possible and the amount of loss can be reasonably estimated, or if an unfavorable outcome is determined to be probable and the amount of loss cannot be reasonably estimated, disclosure would be provided. 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 | 9 Months Ended |
Sep. 30, 2018 | |
Product Warranties Disclosures [Abstract] | |
PRODUCT WARRANTY COSTS | PRODUCT WARRANTY COSTS The changes in the carrying amount of product warranty accruals are as follows: Nine Months Ended September 30, 2018 2017 Balance at beginning of year $ 22,029 $ 21,053 Accruals for warranties 6,855 8,118 Settlements (8,064 ) (8,672 ) Foreign currency translation and other adjustments (1) 349 2,368 Balance at September 30 $ 21,169 $ 22,867 (1) At September 30, 2017, Foreign currency translation and other adjustments includes $2,114 in an acquired liability related to the Air Liquide Welding acquisition as discussed in Note 4 to the consolidated financial statements. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Revolving Credit Agreement The Company has a line of credit totaling $400,000 through the Amended and Restated Credit Agreement (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 the London Inter-Bank Offered Rate ("LIBOR") or the prime rate, plus a spread based on the Company’s leverage ratio, at the Company’s election. The Company amended and restated the Credit Agreement on June 30, 2017 , extending the maturity of the line of credit to June 30, 2022 . 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 September 30, 2018, the Company was in compliance with all of its covenants and had no outstanding borrowings under the Credit Agreement. Senior Unsecured Notes On April 1, 2015 and October 20, 2016 , the Company entered into separate Note Purchase Agreements pursuant to which it issued senior unsecured notes (the "Notes") through a private placement. The 2015 Notes and 2016 Notes each have an aggregate principal amount of $350,000 , comprised of four different series ranging from $50,000 to $100,000 , with maturity dates ranging from August 20, 2025 through April 1, 2045 , and interest rates ranging from 2.75% and 4.02% . Interest on the Notes is paid semi-annually. The Company's total weighted average effective interest rate and weighted average initial tenure of the Notes is 3.3% and 18 years, respectively. The proceeds of the Notes were used for general corporate purposes. The Notes contain certain affirmative and negative covenants. As of September 30, 2018, the Company was in compliance with all of its debt covenants relating to the Notes. |
RETIREMENT AND POSTRETIREMENT B
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS | RETIREMENT AND POSTRETIREMENT BENEFIT PLANS The components of total pension cost were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans Service cost $ 35 $ 796 $ 164 $ 761 $ 105 $ 2,479 $ 459 $ 1,935 Interest cost 4,574 867 4,882 887 13,561 2,774 14,623 2,220 Expected return on plan assets (6,450 ) (1,174 ) (8,306 ) (1,163 ) (20,281 ) (3,714 ) (23,648 ) (3,062 ) Amortization of prior service cost — — — 4 — 1 — 12 Amortization of net loss 355 546 506 477 1,123 1,676 1,599 1,395 Settlement charges (1) 4,232 — 5,283 — 4,990 — 5,283 — Defined benefit plans 2,746 1,035 2,529 966 (502 ) 3,216 (1,684 ) 2,500 Multi-employer plans — 226 — 217 — 687 — 634 Defined contribution plans 5,712 813 5,390 789 17,216 2,678 17,224 1,524 Total pension cost $ 8,458 $ 2,074 $ 7,919 $ 1,972 $ 16,714 $ 6,581 $ 15,540 $ 4,658 (1) Pension settlement charges resulting from lump sum pension payments in the three and nine months ended September 30, 2018 and 2017. The defined benefit plan components of Total pension cost, other than service cost, are included Other income (expense) in the Company's Consolidated Statements of Income. |
OTHER INCOME (EXPENSE)
OTHER INCOME (EXPENSE) | 9 Months Ended |
Sep. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Other Income and Other Expense Disclosure [Text Block] | OTHER INCOME (EXPENSE) The components of Other income (expense) were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Equity earnings in affiliates $ 542 $ 766 $ 3,301 $ 2,001 Other components of net periodic pension (cost) income (1) (2,950 ) (2,570 ) (130 ) 1,578 Other income 1,334 1,401 3,647 3,293 Total Other income (expense) $ (1,074 ) $ (403 ) $ 6,818 $ 6,872 (1) Other components of net periodic pension (cost) income include pension settlement charges in the three and nine months ended September 30, 2018 of $4,232 and $4,990 , respectively, and charges of $5,283 in the three and nine months ended September 30, 2017. Refer to Note 12 to the consolidated financial statements for details. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company recognized $73,991 of tax expense on pretax income of $274,205 , resulting in an effective income tax rate of 27.0% for the nine months ended September 30, 2018 . The effective income tax rate was 23.7% for the nine months ended September 30, 2017 . The U.S. Tax Cuts and Jobs Act (the “U.S. Tax Act”) was enacted on December 22, 2017. The SEC staff issued Staff Accounting Bulletin No. 118 ("SAB 118"), which provides for a one-year measurement period and provides guidance for the application of ASC Topic 740, Income Taxes . The Company recognized the income tax effects of the U.S. Tax Act to the extent applicable for 2017, the year of enactment. The provisional expense recognized in 2017 primarily related to taxes on the Company’s unremitted foreign earnings, partially offset by the re-measurement of deferred tax assets and liabilities. The amounts recorded in 2017 were based on reasonable estimates at that time. In the first quarter of 2018, the Department of Treasury and Internal Revenue Service issued Treasury Notice 2018-13. Notice 2018-13 requires the use of the spot exchange rate, instead of the average annual exchange rate, to value unremitted foreign earnings as of December 31, 2017. Based on this new guidance, in the first quarter of 2018 the Company increased the amount recorded in 2017 related to taxes on unremitted foreign earnings by $2,500 . The Company recorded an additional adjustment of $2,394 in the third quarter of 2018 primarily due to higher foreign earnings. The Company continues to gather additional information and will complete the accounting within the prescribed measurement period. The increase in the effective tax rate for the nine months ended September 30, 2018 , as compared with the same period in 2017, was primarily due to the nontaxable bargain purchase gain recorded in the third quarter of 2017 in connection with the Air Liquide Welding acquisition, 2018 rationalization charges in regions with low or no tax benefit and 2018 adjustments and incremental tax expense related to the U.S. Tax Act. The 2018 incremental tax expense is the result of the Global Intangible Low-Taxed Income (“GILTI”) provisions of the U.S. Tax Act, partially offset by the Foreign-Derived Intangible Income (“FDII”) provisions. The amount recorded is based on a reasonable estimate as of September 30, 2018 . The Company has not determined its accounting policy with respect to GILTI and has therefore included the 2018 estimate as a period cost and included as part of the estimated annual effective tax rate. The Company is continuing to gather additional information to complete its analysis within the prescribed measurement period. The Company is also continuing to analyze applicability of the Base Erosion Anti-Abuse Tax ("BEAT") and the interest expense limitation during the prescribed period. As of September 30, 2018 , the Company had $15,683 of unrecognized tax benefits. If recognized, approximately $12,075 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 2014. The Company is currently subject to U.S., various 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 $2,000 in previously unrecognized tax benefits by the end of the third quarter 2019 . |
DERIVATIVES
DERIVATIVES | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | DERIVATIVES The Company uses derivative instruments to manage exposures to currency exchange rates, interest rates and commodity prices arising in the normal course of business. Both at inception and on an ongoing basis, the derivative instruments that qualify for hedge accounting are assessed as to their effectiveness, when applicable. Hedge ineffectiveness was immaterial in the nine months ended September 30, 2018 and 2017. The Company is subject to the credit risk of the counterparties to derivative instruments. Counterparties include a number of major banks and financial institutions. None of the concentrations of risk with any individual counterparty was considered significant at September 30, 2018 . 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 $52,450 at September 30, 2018 and $35,489 at December 31, 2017 . Fair Value Hedges Certain interest rate swap agreements were qualified and designated as fair value hedges. At September 30, 2018 , the Company had interest rate swap agreements outstanding that effectively convert notional amounts of $125,000 of debt from a fixed interest rate to a variable interest rate based on three-month LIBOR plus a spread of between 0.5% and 1.8% . The variable rates reset every three months, at which time payment or receipt of interest will be settled. Net Investment Hedges From time to time, the Company executes foreign currency forward contracts that qualify and are designated as net investment hedges. No such contracts were outstanding at September 30, 2018 and December 31, 2017 . 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 $334,722 at September 30, 2018 and $340,884 at December 31, 2017 . Fair values of derivative instruments in the Company’s Condensed Consolidated Balance Sheets follow: September 30, 2018 December 31, 2017 Derivatives by hedge designation Other Current Assets Other Current Liabilities Other Liabilities Other Current Assets Other Current Liabilities Other Liabilities Designated as hedging instruments: Foreign exchange contracts $ 940 $ 399 $ — $ 519 $ 604 $ — Interest rate swap agreements — — 10,871 — — 5,085 Not designated as hedging instruments: Foreign exchange contracts 4,604 405 — 2,257 3,747 — Total derivatives $ 5,544 $ 804 $ 10,871 $ 2,776 $ 4,351 $ 5,085 The effects of undesignated derivative instruments on the Company’s Consolidated Statements of Income consisted of the following: Three Months Ended September 30, Nine Months Ended September 30, Derivatives by hedge designation Classification of gain (loss) 2018 2017 2018 2017 Not designated as hedges: Foreign exchange contracts Selling, general & administrative expenses $ 4,894 $ 968 $ 9,143 $ 1,580 The effects of designated hedges on AOCI and the Company’s Consolidated Statements of Income consisted of the following: Total gain (loss) recognized in AOCI, net of tax September 30, 2018 December 31, 2017 Foreign exchange contracts $ 392 $ (224 ) Net investment contracts 1,522 1,099 The Company expects a gain of $392 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 September 30, Nine Months Ended September 30, Derivative type Gain (loss) recognized in the Consolidated Statements of Income: 2018 2017 2018 2017 Foreign exchange contracts Sales $ (143 ) $ 968 $ (37 ) $ 1,580 Cost of goods sold (69 ) 162 (16 ) 530 |
FAIR VALUE
FAIR VALUE | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE The following table provides a summary of assets and liabilities as of September 30, 2018 , 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 $ 5,544 $ — $ 5,544 $ — Marketable securities 99,282 — 99,282 — Total assets $ 104,826 $ — $ 104,826 $ — Liabilities: Foreign exchange contracts $ 804 $ — $ 804 $ — Interest rate swap agreements 10,871 — 10,871 — Contingent consideration 2,100 — — 2,100 Deferred compensation 27,385 — 27,385 — Total liabilities $ 41,160 $ — $ 39,060 $ 2,100 The following table provides a summary of assets and liabilities as of December 31, 2017 , measured at fair value on a recurring basis: Description Balance as of December 31, 2017 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 $ 2,776 $ — $ 2,776 $ — Marketable securities 179,125 — 179,125 — Total assets $ 181,901 $ — $ 181,901 $ — Liabilities: Foreign exchange contracts $ 4,351 $ — $ 4,351 $ — Interest rate swap agreements 5,085 — 5,085 — Contingent considerations 7,086 — — 7,086 Deferred compensation 25,397 — 25,397 — Total liabilities $ 41,919 $ — $ 34,833 $ 7,086 During the nine months ended September 30, 2018 , there were no transfers between Levels 1, 2 or 3. The Company’s derivative contracts are valued at fair value using the market approach. The Company measures the fair value of foreign exchange contracts, net investment contracts and interest rate swap agreements using Level 2 inputs based on observable spot and forward rates in active markets. The Company measures the fair value of marketable securities using Level 2 inputs based on quoted market prices for similar assets in active markets. In connection with acquisitions, the Company recorded contingent consideration liabilities, which will be paid based upon actual financial results of the acquired entity for specified future periods. The fair value of the contingent considerations are a Level 3 valuation and fair valued using either a probability weighted discounted cash flow analysis or an option pricing model. 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 September 30, 2018 and December 31, 2017 . The fair value of long-term debt at September 30, 2018 and December 31, 2017 , including the current portion, was approximately $631,600 and $687,428 , respectively, which was determined using available market information and methodologies requiring judgment. The carrying value of this debt at such dates was $698,578 and $704,247 , 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) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Revenue Recognition, Policy | Revenue is recognized when obligations under the terms of a contract are satisfied and control is transferred to the customer. Revenue is measured as the amount of consideration the Company expects to be entitled to in exchange for goods or services. The Company recognizes any discounts, credits, returns, rebates and incentive programs based on reasonable estimates as a reduction of sales to arrive at Net sales at the same time the related revenue is recorded. Taxes collected by the Company, including sales tax and value add tax, are excluded from Net sales. The Company recognizes freight billed as a component of Net sales and shipping costs as a component of Cost of goods sold when control transfers to the customer. Sales commissions are expensed when incurred because the amortization period is generally one year or less. These costs are recorded within Selling, general and administrative expenses in the Company's Consolidated Statements of Income. The Company’s payment terms vary by the type and location of the customer and the products or services offered. The Company does not offer any payment terms that would meet the requirements for consideration as a financing component under Topic 606. |
Segments | The Company's business units are aligned into three operating segments. The operating segments consist of Americas Welding, International Welding and The Harris Products Group. The Americas Welding segment includes welding operations in North and South America. The International Welding segment includes welding operations in Europe, Africa, Asia and Australia. The Harris Products Group includes the Company’s global cutting, soldering and brazing businesses as well as its retail business in the United States. Segment performance is measured and resources are allocated based on a number of factors, the primary profit measure being adjusted earnings before interest and income taxes (“Adjusted EBIT”). EBIT is defined as Operating income plus Other income (expense). 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 Instruments | The Company uses derivative instruments to manage exposures to currency exchange rates, interest rates and commodity prices arising in the normal course of business. Both at inception and on an ongoing basis, the derivative instruments that qualify for hedge accounting are assessed as to their effectiveness, when applicable. Hedge ineffectiveness was immaterial in the nine months ended September 30, 2018 and 2017. The Company is subject to the credit risk of the counterparties to derivative instruments. Counterparties include a number of major banks and financial institutions. None of the concentrations of risk with any individual counterparty was considered significant at September 30, 2018 . 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 $52,450 at September 30, 2018 and $35,489 at December 31, 2017 . Fair Value Hedges Certain interest rate swap agreements were qualified and designated as fair value hedges. At September 30, 2018 , the Company had interest rate swap agreements outstanding that effectively convert notional amounts of $125,000 of debt from a fixed interest rate to a variable interest rate based on three-month LIBOR plus a spread of between 0.5% and 1.8% . The variable rates reset every three months, at which time payment or receipt of interest will be settled. Net Investment Hedges From time to time, the Company executes foreign currency forward contracts that qualify and are designated as net investment hedges. No such contracts were outstanding at September 30, 2018 and December 31, 2017 . 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 $334,722 at September 30, 2018 and $340,884 at December 31, 2017 . |
NEW ACCOUNTING PRONOUNCEMENTS | The following ASUs were adopted as of January 1, 2018 and did not have a significant financial impact on the Company's consolidated financial statements unless otherwise described within the table below: Standard Description ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities , issued August 2017. ASU 2017-12 provides updated guidance to more closely align hedge accounting with a company's risk management strategy, to simplify the application of hedge accounting and to better portray the economic results of hedging instruments in the financial statements. The Company early adopted the ASU on January 1, 2018. Standard Description ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Period Pension Cost and Net Periodic Postretirement Benefit Cost , issued March 2017. ASU 2017-07 requires an entity to report the service cost component of the net periodic benefit cost in the same income statement line item as other employee compensation costs. The other components of the net periodic benefit cost are required to be presented in the income statement separately from the service cost component and outside of any subtotal of operating income. Additionally, only the service cost component will be eligible for capitalization in assets. The impact of the adoption resulted in the reclassification of the other components of net periodic benefit cost from Cost of goods sold and Selling, general & administrative expenses to Other income (expense). The reclassification resulted in an increase in Operating income of $2,570 as a result of a decrease in Pension settlement charges of $5,283, partially offset by increases in Cost of goods sold of $1,635 and Selling, general & administrative expenses of $1,078 for the three months ended September 30, 2017. The reclassification resulted in a decrease in Operating income of $1,578 as a result of a decrease in Pension settlement charges of $5,283, partially offset by increases in Cost of goods sold of $4,005 and Selling, general & administrative expenses of $2,856 for the nine months ended September 30, 2017. Refer to Note 12 to the consolidated financial statements for details. ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, issued January 2017. ASU 2017-01 provides updated guidance for evaluating whether certain transactions should be accounted for as an acquisition (or disposal) of an asset or a business. ASU No. 2016-18, Statement of Cash Flows(Topic 230): Restricted Cash, issued November 2016. ASU 2016-18 requires amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU No. 2016-16 , Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory, issued October 2016. ASU 2016-16 requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, issued August 2016. ASU 2016-15 reduces existing diversity in practice by addressing eight specific cash flow issues related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2014-09, Revenue from Contracts with Customers (Topic 606) issued May 2014 and ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , issued August 2015. 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. The standard 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. ASU 2015-14 deferred the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted ASU 2014-09 as of January 1, 2018 using the modified retrospective transition method applied to those contracts that were not completed as of that date. The adoption did not have a material impact on the consolidated financial statements. Refer to Note 2 to the consolidated financial statements for further details. The Company is currently evaluating the impact on its financial statements of the following ASUs: Standard Description ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20), issued August 2018. ASU 2018-14 modifies disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The ASU also requires an entity to disclose the weighted-average interest crediting rates for cash balance plans and to explain the reasons for significant gains and losses related to changes in the benefit obligation. The ASU is effective January 1, 2020 and early adoption is permitted. ASU No. 2018-13, Fair Value Measurement (Topic 944) , issued August 2018. ASU 2018-13 eliminates, amends and adds disclosure requirements related to fair value measurements. The ASU impacts various elements of fair value disclosure, including but not limited to, changes in unrealized gains or losses, significant unobservable inputs and measurement uncertainty. The ASU is effective January 1, 2020 and early adoption is permitted. ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) , issued February 2018. ASU 2018-02 allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the U.S. Tax Act (as defined within Note 14 to the consolidated financial statements). The ASU only applies to the income tax effects of the U.S. Tax Act, all other existing guidance remains the same. The ASU is effective January 1, 2019, early adoption is permitted and the ASU should be applied retrospectively to each period impacted by the U.S. Tax Act. ASU No. 2016-02, Leases (Topic 842) , issued February 2016 and ASU 2018-10, Codification Improvements to Topic 842, Leases , issued July 2018. 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. ASU 2018-10 provides narrow amendments to clarify how to apply certain aspects of the new lease standard. Entities are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. The ASU is effective January 1, 2019 and early adoption is permitted. The Company has established a cross-functional team to implement the ASU and is in the process of gathering data on all leases and designing a new system solution. The Company is also evaluating its processes and internal controls to meet the ASU’s accounting, reporting and disclosure requirements. While the Company has not yet completed its evaluation of the ASU’s impact, the Company expects to recognize a right of use asset and a corresponding liability on the Consolidated Balance Sheets related to substantially all operating lease arrangements. The Company plans to adopt the package of practical expedients for all leases commenced before January 1, 2019. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disaggregation of Revenue [Abstract] | |
Disaggregation of Revenue [Table Text Block] | The following table presents the Company's Net sales disaggregated by product line: Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Consumables $ 426,837 $ 1,329,768 Equipment 310,262 955,079 Net sales $ 737,099 $ 2,284,847 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Net income $ 70,539 $ 106,126 $ 200,227 $ 223,322 Denominator (shares in 000's): Basic weighted average shares outstanding 64,821 65,806 65,245 65,769 Effect of dilutive securities - Stock options and awards 831 896 810 910 Diluted weighted average shares outstanding 65,652 66,702 66,055 66,679 Basic earnings per share $ 1.09 $ 1.61 $ 3.07 $ 3.40 Diluted earnings per share $ 1.07 $ 1.59 $ 3.03 $ 3.35 |
ACQUISITIONS Acquisitions (Tabl
ACQUISITIONS Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Business Combination [Table Text Block] | The following table summarizes the purchase price allocation for the Air Liquide Welding acquisition: Assets acquired and liabilities assumed As of July 31, 2017 Accounts receivable $ 89,442 Inventory (1) 97,803 Property, plant and equipment (2) 73,056 Intangible assets (3) 11,715 Accounts payable (65,640 ) Pension liability (67,563 ) Bargain purchase gain (6) (49,650 ) Net other assets and liabilities (4) (27,210 ) Total purchase price, net of cash acquired (5) $ 61,953 (1) A portion of inventories acquired were sold in the third quarter of 2017 resulting in a $2,314 increase in Cost of goods sold for the amortization of step up in the value of acquired inventories. (2) Property, plant and equipment acquired includes a number of manufacturing and distribution sites, including the related facilities, land and leased sites, and machinery and equipment for use in manufacturing operations. (3) $7,099 of the intangible asset balance was assigned to a trade name expected to have an indefinite life. Of the remaining amount, $1,183 was assigned to a finite-lived trade name ( 10 year weighted average useful life) and $3,433 was assigned to other intangible assets ( 9 year weighted average life). (4) Consists primarily of other accrued liabilities. (5) Reflects a receivable from seller for an agreed upon purchase price adjustment. The payment of $ 10,983 was received in the first quarter of 2018. (6) An adjustment of $ 1,935 was recorded to the Bargain purchase gain in the fourth quarter of 2017. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, 2018 Net sales $ 454,010 $ 209,622 $ 73,467 $ — $ 737,099 Inter-segment sales 31,845 3,663 1,537 (37,045 ) — Total $ 485,855 $ 213,285 $ 75,004 $ (37,045 ) $ 737,099 Adjusted EBIT $ 89,253 $ 10,721 $ 8,676 $ (1,099 ) $ 107,551 Special items charge (gain) (1) 4,232 2,636 — 970 7,838 EBIT $ 85,021 $ 8,085 $ 8,676 $ (2,069 ) $ 99,713 Interest income 1,993 Interest expense (5,962 ) Income before income taxes $ 95,744 Three Months Ended September 30, 2017 Net sales $ 398,289 $ 197,617 $ 73,585 $ — $ 669,491 Inter-segment sales 25,546 5,451 2,064 (33,061 ) — Total $ 423,835 $ 203,068 $ 75,649 $ (33,061 ) $ 669,491 Adjusted EBIT $ 74,096 $ 10,612 $ 9,244 $ 570 $ 94,522 Special items charge (gain) (2) 5,283 2,314 — (48,312 ) (40,715 ) EBIT $ 68,813 $ 8,298 $ 9,244 $ 48,882 $ 135,237 Interest income 1,327 Interest expense (5,922 ) Income before income taxes $ 130,642 Nine Months Ended September 30, 2018 Net sales $ 1,351,297 $ 700,315 $ 233,235 $ — $ 2,284,847 Inter-segment sales 89,671 13,669 5,447 (108,787 ) — Total $ 1,440,968 $ 713,984 $ 238,682 $ (108,787 ) $ 2,284,847 Adjusted EBIT $ 254,850 $ 41,970 $ 28,058 $ (4,443 ) $ 320,435 Special items charge (gain) (1) 4,990 24,353 — 3,665 33,008 EBIT $ 249,860 $ 17,617 $ 28,058 $ (8,108 ) $ 287,427 Interest income 5,273 Interest expense (18,495 ) Income before income taxes $ 274,205 Nine Months Ended September 30, 2017 Net sales $ 1,186,760 $ 468,003 $ 222,483 $ — $ 1,877,246 Inter-segment sales 75,380 15,214 6,763 (97,357 ) — Total $ 1,262,140 $ 483,217 $ 229,246 $ (97,357 ) $ 1,877,246 Adjusted EBIT $ 217,317 $ 29,713 $ 27,491 $ 369 $ 274,890 Special items charge (gain) (2) 5,283 2,314 — (40,199 ) (32,602 ) EBIT $ 212,034 $ 27,399 $ 27,491 $ 40,568 $ 307,492 Interest income 3,349 Interest expense (18,333 ) Income before income taxes $ 292,508 (1) In the three months ended September 30, 2018, special items reflect pension settlement charges of $4,232 in Americas Welding, rationalization and asset impairment charges of $2,636 in International Welding and transaction and integration costs of $970 in Corporate / Eliminations related to the Air Liquide Welding acquisition as discussed in Note 4 to the consolidated financial statements. In the nine months ended September 30, 2018 , special items reflect pension settlement charges of $4,990 in Americas Welding, rationalization and asset impairment charges of $24,353 in International Welding and transaction and integration costs of $3,665 in Corporate / Eliminations related to the Air Liquide Welding acquisition as discussed in Note 4 to the consolidated financial statements. (2) In the three and nine months ended September 30, 2017 , special items reflect pension settlement charges of $5,283 in Americas Welding, amortization of step up in value of acquired inventories of $2,314 in International Welding and transaction and integration costs of $3,273 and $11,386 , respectively, offset by a bargain purchase gain of $51,585 in Corporate / Eliminations related to the Air Liquide Welding acquisition as discussed in Note 4 to the consolidated financial statements. |
RATIONALIZATION AND ASSET IMP_2
RATIONALIZATION AND ASSET IMPAIRMENTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Reserve by Type of Cost [Table Text Block] | The following table summarizes the activity related to the rationalization liabilities in the International Welding segment: Nine Months Ended September 30, 2018 Balance, December 31, 2017 $ 6,803 Payments and other adjustments (20,053 ) Charged to expense 25,761 Balance, September 30, 2018 $ 12,511 |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of changes in equity | Changes in equity for the nine months ended September 30, 2018 are as follows: Shareholders’ Equity Non-controlling Interests Total Equity Balance at December 31, 2017 $ 931,637 $ 816 $ 932,453 Comprehensive income (loss): Net income 200,227 (13 ) 200,214 Other comprehensive income (loss) (24,428 ) (92 ) (24,520 ) Total comprehensive income (loss) 175,799 (105 ) 175,694 Cash dividends declared - $1.17 per share (76,833 ) — (76,833 ) Issuance of shares under benefit plans 18,031 — 18,031 Purchase of shares for treasury (1) (121,477 ) — (121,477 ) Balance at September 30, 2018 $ 927,157 $ 711 $ 927,868 (1) The Company's total common shares authorized to be repurchased under the current repurchase program is 55 million shares. As of September 30, 2018 , there remained 7.1 million common shares available for repurchase under this program. The repurchased common shares remain in treasury and have not been retired. |
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 September 30, 2018 and 2017 : Three Months Ended September 30, 2018 Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges Defined benefit pension plan activity Currency translation adjustment Total Balance at June 30, 2018 $ 498 $ (83,269 ) $ (193,708 ) $ (276,479 ) Other comprehensive income (loss) 1,218 — (406 ) 3 812 Amounts reclassified from AOCI 198 1 3,855 2 — 4,053 Net current-period other 1,416 3,855 (406 ) 4,865 Balance at September 30, 2018 $ 1,914 $ (79,414 ) $ (194,114 ) $ (271,614 ) Three Months Ended September 30, 2017 Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges Defined benefit pension plan activity Currency translation adjustment Total Balance at June 30, 2017 $ 1,834 $ (94,513 ) $ (179,844 ) $ (272,523 ) Other comprehensive income (loss) (1,814 ) — 18,900 3 17,086 Amounts reclassified from AOCI 1,130 1 3,958 2 — 5,088 Net current-period other (684 ) 3,958 18,900 22,174 Balance at September 30, 2017 $ 1,150 $ (90,555 ) $ (160,944 ) $ (250,349 ) (1) During the 2018 period, this AOCI reclassification is a component of Net sales of $ (124) (net of tax of $ (19) ) and Cost of goods sold of $ 74 (net of tax of $ (5) ); during the 2017 period, the reclassification is a component of Net sales of $ 968 (net of tax of $ 398 ) and Cost of goods sold of $ 162 (net of tax of $ 25 ). See Note 15 to the consolidated financial statements for additional details. (2) This AOCI component is included in the computation of net periodic pension costs (net of tax of $ 1,278 and $ 2,170 during the three months ended September 30, 2018 and 2017 , respectively). See Note 12 to the consolidated financial statements for additional details. (3) The Other comprehensive income (loss) before reclassifications excludes $ (61) and $ 31 attributable to Non-controlling interests in the three months ended September 30, 2018 and 2017 , respectively. The following tables set forth the total changes in AOCI by component, net of taxes, for the nine months ended September 30, 2018 and 2017 : Nine Months Ended September 30, 2018 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, 2017 $ 875 $ (85,277 ) $ (162,784 ) $ (247,186 ) Other comprehensive income (loss) 987 — (31,330 ) 3 (30,343 ) Amounts reclassified from AOCI 52 1 5,863 2 — 5,915 Net current-period other 1,039 5,863 (31,330 ) (24,428 ) Balance at September 30, 2018 $ 1,914 $ (79,414 ) $ (194,114 ) $ (271,614 ) Nine Months Ended September 30, 2017 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, 2016 $ 587 $ (95,939 ) $ (233,685 ) $ (329,037 ) Other comprehensive income (loss) (1,547 ) — 72,741 3 71,194 Amounts reclassified from AOCI 2,110 1 5,384 2 — 7,494 Net current-period other 563 5,384 72,741 78,688 Balance at September 30, 2017 $ 1,150 $ (90,555 ) $ (160,944 ) $ (250,349 ) (1) During the 2018 period, the AOCI reclassification is a component of Net sales of $(12) (net of tax of $(25) ) and Cost of goods sold of $40 (net of tax of $(24) ); during the 2017 period, the AOCI reclassification is a component of Net sales of $1,580 (net of tax of $602 ) and Cost of goods sold of $530 (net of tax of $214 ). See Note 15 to the consolidated financial statements for additional details. (2) The AOCI component is included in the computation of net periodic pension costs (net of tax of $1,927 and $2,532 during the nine months ended September 30, 2018 and 2017 , respectively). See Note 12 to the consolidated financial statements for additional details. (3) The Other comprehensive income (loss) before reclassifications excludes $(92) and $79 attributable to Non-controlling interests in the nine months ended September 30, 2018 and 2017 , respectively. |
INVENTORY VALUATION Schedule of
INVENTORY VALUATION Schedule of Inventory, Current (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory [Line Items] | |
Schedule of Inventory, Current [Table Text Block] | Inventories in the Condensed Consolidated Balance Sheet is comprised of the following components: September 30, 2018 December 31, 2017 Raw materials $ 104,421 $ 97,577 Work-in-process 60,465 50,695 Finished goods 212,545 200,395 Total $ 377,431 $ 348,667 |
PRODUCT WARRANTY COSTS (Tables)
PRODUCT WARRANTY COSTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 are as follows: Nine Months Ended September 30, 2018 2017 Balance at beginning of year $ 22,029 $ 21,053 Accruals for warranties 6,855 8,118 Settlements (8,064 ) (8,672 ) Foreign currency translation and other adjustments (1) 349 2,368 Balance at September 30 $ 21,169 $ 22,867 (1) At September 30, 2017, Foreign currency translation and other adjustments includes $2,114 in an acquired liability related to the Air Liquide Welding acquisition as discussed in Note 4 to the consolidated financial statements. |
RETIREMENT AND POSTRETIREMENT_2
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Components of total pension cost | The components of total pension cost were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans U.S. pension plans Non-U.S. pension plans Service cost $ 35 $ 796 $ 164 $ 761 $ 105 $ 2,479 $ 459 $ 1,935 Interest cost 4,574 867 4,882 887 13,561 2,774 14,623 2,220 Expected return on plan assets (6,450 ) (1,174 ) (8,306 ) (1,163 ) (20,281 ) (3,714 ) (23,648 ) (3,062 ) Amortization of prior service cost — — — 4 — 1 — 12 Amortization of net loss 355 546 506 477 1,123 1,676 1,599 1,395 Settlement charges (1) 4,232 — 5,283 — 4,990 — 5,283 — Defined benefit plans 2,746 1,035 2,529 966 (502 ) 3,216 (1,684 ) 2,500 Multi-employer plans — 226 — 217 — 687 — 634 Defined contribution plans 5,712 813 5,390 789 17,216 2,678 17,224 1,524 Total pension cost $ 8,458 $ 2,074 $ 7,919 $ 1,972 $ 16,714 $ 6,581 $ 15,540 $ 4,658 (1) Pension settlement charges resulting from lump sum pension payments in the three and nine months ended September 30, 2018 and 2017. |
OTHER INCOME (EXPENSE) (Tables)
OTHER INCOME (EXPENSE) (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Nonoperating Income (Expense) [Table Text Block] | The components of Other income (expense) were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Equity earnings in affiliates $ 542 $ 766 $ 3,301 $ 2,001 Other components of net periodic pension (cost) income (1) (2,950 ) (2,570 ) (130 ) 1,578 Other income 1,334 1,401 3,647 3,293 Total Other income (expense) $ (1,074 ) $ (403 ) $ 6,818 $ 6,872 (1) Other components of net periodic pension (cost) income include pension settlement charges in the three and nine months ended September 30, 2018 of $4,232 and $4,990 , respectively, and charges of $5,283 in the three and nine months ended September 30, 2017. Refer to Note 12 to the consolidated financial statements for details. |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 Condensed Consolidated Balance Sheets follow: September 30, 2018 December 31, 2017 Derivatives by hedge designation Other Current Assets Other Current Liabilities Other Liabilities Other Current Assets Other Current Liabilities Other Liabilities Designated as hedging instruments: Foreign exchange contracts $ 940 $ 399 $ — $ 519 $ 604 $ — Interest rate swap agreements — — 10,871 — — 5,085 Not designated as hedging instruments: Foreign exchange contracts 4,604 405 — 2,257 3,747 — Total derivatives $ 5,544 $ 804 $ 10,871 $ 2,776 $ 4,351 $ 5,085 |
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 Income consisted of the following: Three Months Ended September 30, Nine Months Ended September 30, Derivatives by hedge designation Classification of gain (loss) 2018 2017 2018 2017 Not designated as hedges: Foreign exchange contracts Selling, general & administrative expenses $ 4,894 $ 968 $ 9,143 $ 1,580 |
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 Income consisted of the following: Total gain (loss) recognized in AOCI, net of tax September 30, 2018 December 31, 2017 Foreign exchange contracts $ 392 $ (224 ) Net investment contracts 1,522 1,099 The Company expects a gain of $392 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 September 30, Nine Months Ended September 30, Derivative type Gain (loss) recognized in the Consolidated Statements of Income: 2018 2017 2018 2017 Foreign exchange contracts Sales $ (143 ) $ 968 $ (37 ) $ 1,580 Cost of goods sold (69 ) 162 (16 ) 530 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, 2018 , 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 $ 5,544 $ — $ 5,544 $ — Marketable securities 99,282 — 99,282 — Total assets $ 104,826 $ — $ 104,826 $ — Liabilities: Foreign exchange contracts $ 804 $ — $ 804 $ — Interest rate swap agreements 10,871 — 10,871 — Contingent consideration 2,100 — — 2,100 Deferred compensation 27,385 — 27,385 — Total liabilities $ 41,160 $ — $ 39,060 $ 2,100 The following table provides a summary of assets and liabilities as of December 31, 2017 , measured at fair value on a recurring basis: Description Balance as of December 31, 2017 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 $ 2,776 $ — $ 2,776 $ — Marketable securities 179,125 — 179,125 — Total assets $ 181,901 $ — $ 181,901 $ — Liabilities: Foreign exchange contracts $ 4,351 $ — $ 4,351 $ — Interest rate swap agreements 5,085 — 5,085 — Contingent considerations 7,086 — — 7,086 Deferred compensation 25,397 — 25,397 — Total liabilities $ 41,919 $ — $ 34,833 $ 7,086 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Basis of Presentation [Line Items] | |||||
Other components of net periodic pension (cost) income (1) | [1] | $ (2,950) | $ (2,570) | $ (130) | $ 1,578 |
Operating Income (Loss) [Member] | Adjustments for New Accounting Pronouncement [Member] | |||||
Basis of Presentation [Line Items] | |||||
Other components of net periodic pension (cost) income (1) | (2,570) | 1,578 | |||
Cost of Sales [Member] | Adjustments for New Accounting Pronouncement [Member] | |||||
Basis of Presentation [Line Items] | |||||
Other components of net periodic pension (cost) income (1) | 1,635 | 4,005 | |||
Selling, General and Administrative Expenses [Member] | Adjustments for New Accounting Pronouncement [Member] | |||||
Basis of Presentation [Line Items] | |||||
Other components of net periodic pension (cost) income (1) | 1,078 | 2,856 | |||
Pension settlement charges [Member] | Adjustments for New Accounting Pronouncement [Member] | |||||
Basis of Presentation [Line Items] | |||||
Other components of net periodic pension (cost) income (1) | $ (5,283) | $ (5,283) | |||
[1] | Other components of net periodic pension (cost) income include pension settlement charges in the three and nine months ended September 30, 2018 of $4,232 and $4,990, respectively, and charges of $5,283 in the three and nine months ended September 30, 2017. Refer to Note 12 to the consolidated financial statements for details. |
REVENUE RECOGNITION (Disaggrega
REVENUE RECOGNITION (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Sales Revenue, Goods, Net | $ 737,099 | $ 669,491 | $ 2,284,847 | $ 1,877,246 |
Welding Equipment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales Revenue, Goods, Net | 310,262 | 955,079 | ||
Welding Consumables [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales Revenue, Goods, Net | $ 426,837 | $ 1,329,768 |
REVENUE RECOGNITION (Textual) (
REVENUE RECOGNITION (Textual) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 |
Revenue from Contract with Customer [Abstract] | ||
Percentage Net Sales Over Time (less than) | 10.00% | |
Customer Advances, Current | $ 18,302 | $ 19,683 |
Billings in Excess of Cost, Current | 15,095 | 11,132 |
Unbilled Contracts Receivable | $ 33,429 | $ 22,229 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator: | ||||
Net income (loss) | $ 70,539 | $ 106,126 | $ 200,227 | $ 223,322 |
Denominator (shares in 000's): | ||||
Basic weighted average shares outstanding (in shares) | 64,821,000 | 65,806,000 | 65,245,000 | 65,769,000 |
Effect of dilutive securities - Stock options and awards (in shares) | 831,000 | 896,000 | 810,000 | 910,000 |
Diluted weighted average shares outstanding (in shares) | 65,652,000 | 66,702,000 | 66,055,000 | 66,679,000 |
Earnings (loss) per share | ||||
Basic earnings (loss) per share (in dollars per share) | $ 1.09 | $ 1.61 | $ 3.07 | $ 3.40 |
Diluted earnings (loss) per share (in dollars per share) | $ 1.07 | $ 1.59 | $ 3.03 | $ 3.35 |
Anti-dilutive shares excluded from the computation of diluted earnings per share | 346,168 | 182,615 | 317,528 | 807,763 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jul. 31, 2017 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Mar. 31, 2018 | |||
Acquisitions | ||||||||||
Business Combination Receivable From Seller | $ 10,983 | |||||||||
Sales Revenue, Goods, Net | $ 737,099 | $ 669,491 | $ 2,284,847 | $ 1,877,246 | ||||||
Business Combination, Bargain Purchase, Gain Recognized, Amount | $ 0 | $ (51,585) | 0 | (51,585) | ||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ (6,591) | $ 72,468 | ||||||||
Air Liquide Welding [Member] | ||||||||||
Acquisitions | ||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | $ 89,442 | |||||||||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | 7,099 | |||||||||
Business Combination, Bargain Purchase, Gain Recognized, Amount | (49,650) | [1] | $ 1,935 | |||||||
Business Combination, Recognized Identifiable Other Assets Acquired and Other Liabilities Assumed, Net | [2] | (27,210) | ||||||||
Business Combination, Consideration Transferred | 135,123 | |||||||||
Payments to Acquire Businesses, Net of Cash Acquired | 61,953 | [3] | $ 61,953 | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | [4] | 97,803 | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | [5] | 73,056 | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | [6] | 11,715 | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable | (65,640) | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Pension Liability | $ (67,563) | |||||||||
Trademarks and Trade Names [Member] | Air Liquide Welding [Member] | ||||||||||
Acquisitions | ||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years | |||||||||
Other Intangible Assets, Net | $ 1,183 | |||||||||
Other Intangible Assets [Member] | Air Liquide Welding [Member] | ||||||||||
Acquisitions | ||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 9 years | |||||||||
Other Intangible Assets, Net | $ 3,433 | |||||||||
[1] | An adjustment of $1,935 was recorded to the Bargain purchase gain in the fourth quarter of 2017. | |||||||||
[2] | Consists primarily of other accrued liabilities. | |||||||||
[3] | Reflects a receivable from seller for an agreed upon purchase price adjustment. The payment of $10,983 was received in the first quarter of 2018. | |||||||||
[4] | nventories acquired were sold in the third quarter of 2017 resulting in a $2,314 increase in Cost of goods sold for the amortization of step up in the value of acquired inventories. | |||||||||
[5] | Property, plant and equipment acquired includes a number of manufacturing and distribution sites, including the related facilities, land and leased sites, and machinery and equipment for use in manufacturing operations. | |||||||||
[6] | $7,099 of the intangible asset balance was assigned to a trade name expected to have an indefinite life. Of the remaining amount, $1,183 was assigned to a finite-lived trade name (10 year weighted average useful life) and $3,433 was assigned to other intangible assets (9 year weighted average life). |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)segment | Sep. 30, 2017USD ($) | |||||
Financial information for the reportable segments | ||||||||
Restructuring, Settlement and Impairment Provisions | $ 2,636 | $ 0 | $ 24,353 | $ 0 | ||||
Number of operating segments | segment | 3 | |||||||
Net sales (Note 2) | 737,099 | 669,491 | $ 2,284,847 | 1,877,246 | ||||
Inter-segment sales | 0 | 0 | 0 | 0 | ||||
Total | 737,099 | 669,491 | 2,284,847 | 1,877,246 | ||||
EBIT, as adjusted | 107,551 | 94,522 | 320,435 | 274,890 | ||||
Special items charge (gain) | 7,838 | [1] | (40,715) | [2] | 33,008 | [1] | (32,602) | [2] |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Gain (Loss) Due to Settlement and Curtailment | (4,232) | (5,283) | (4,990) | (5,283) | ||||
EBIT | 99,713 | 135,237 | 287,427 | 307,492 | ||||
Interest income | 1,993 | 1,327 | 5,273 | 3,349 | ||||
Interest expense | (5,962) | (5,922) | (18,495) | (18,333) | ||||
Income before income taxes | 95,744 | 130,642 | 274,205 | 292,508 | ||||
Bargain purchase gain (Note 4) | 0 | 51,585 | 0 | 51,585 | ||||
The Harris Products Group | ||||||||
Financial information for the reportable segments | ||||||||
Net sales (Note 2) | 73,467 | 73,585 | 233,235 | 222,483 | ||||
Inter-segment sales | 1,537 | 2,064 | 5,447 | 6,763 | ||||
Total | 75,004 | 75,649 | 238,682 | 229,246 | ||||
EBIT, as adjusted | 8,676 | 9,244 | 28,058 | 27,491 | ||||
Special items charge (gain) | 0 | [1] | 0 | [2] | 0 | [1] | 0 | [2] |
EBIT | 8,676 | 9,244 | 28,058 | 27,491 | ||||
Corporate / Eliminations | ||||||||
Financial information for the reportable segments | ||||||||
Acquisition Transaction and Integration Costs | 970 | 3,273 | 3,665 | 11,386 | ||||
Net sales (Note 2) | 0 | 0 | 0 | 0 | ||||
Inter-segment sales | (37,045) | (33,061) | (108,787) | (97,357) | ||||
Total | (37,045) | (33,061) | (108,787) | (97,357) | ||||
EBIT, as adjusted | (1,099) | 570 | (4,443) | 369 | ||||
Special items charge (gain) | 970 | [1] | (48,312) | [2] | 3,665 | [1] | (40,199) | [2] |
EBIT | (2,069) | 48,882 | (8,108) | 40,568 | ||||
Bargain purchase gain (Note 4) | 51,585 | |||||||
Americas Welding | ||||||||
Financial information for the reportable segments | ||||||||
Net sales (Note 2) | 454,010 | 398,289 | 1,351,297 | 1,186,760 | ||||
Inter-segment sales | 31,845 | 25,546 | 89,671 | 75,380 | ||||
Total | 485,855 | 423,835 | 1,440,968 | 1,262,140 | ||||
EBIT, as adjusted | 89,253 | 74,096 | 254,850 | 217,317 | ||||
Special items charge (gain) | 4,232 | [1] | 5,283 | [2] | 4,990 | [1] | 5,283 | [2] |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Gain (Loss) Due to Settlement and Curtailment | (4,232) | (5,283) | (4,990) | (5,283) | ||||
EBIT | 85,021 | 68,813 | 249,860 | 212,034 | ||||
International Welding | ||||||||
Financial information for the reportable segments | ||||||||
Restructuring, Settlement and Impairment Provisions | 2,636 | 24,353 | ||||||
Net sales (Note 2) | 209,622 | 197,617 | 700,315 | 468,003 | ||||
Inter-segment sales | 3,663 | 5,451 | 13,669 | 15,214 | ||||
Total | 213,285 | 203,068 | 713,984 | 483,217 | ||||
EBIT, as adjusted | 10,721 | 10,612 | 41,970 | 29,713 | ||||
Special items charge (gain) | 2,636 | [1] | 2,314 | [2] | 24,353 | [1] | 2,314 | [2] |
Business Combination, Inventory Step Up | 2,314 | 2,314 | ||||||
EBIT | $ 8,085 | $ 8,298 | $ 17,617 | $ 27,399 | ||||
[1] | In the three months ended September 30, 2018, special items reflect pension settlement charges of $4,232 in Americas Welding, rationalization and asset impairment charges of $2,636 in International Welding and transaction and integration costs of $970 in Corporate / Eliminations related to the Air Liquide Welding acquisition as discussed in Note 4 to the consolidated financial statements. In the nine months ended September 30, 2018, special items reflect pension settlement charges of $4,990 in Americas Welding, rationalization and asset impairment charges of $24,353 in International Welding and transaction and integration costs of $3,665 in Corporate / Eliminations related to the Air Liquide Welding acquisition as discussed in Note 4 to the consolidated financial statements. | |||||||
[2] | In the three and nine months ended September 30, 2017, special items reflect pension settlement charges of $5,283 in Americas Welding, amortization of step up in value of acquired inventories of $2,314 in International Welding and transaction and integration costs of $3,273 and $11,386, respectively, offset by a bargain purchase gain of $51,585 in Corporate / Eliminations related to the Air Liquide Welding acquisition as discussed in Note 4 to the consolidated financial statements. |
RATIONALIZATION AND ASSET IMP_3
RATIONALIZATION AND ASSET IMPAIRMENTS Summary of Activity Related to Rationalization Liabilities by Segment (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Rationalization and Asset Impairments | ||
Restructuring Reserve | $ 12,511 | $ 6,803 |
Payments and other adjustments | (20,053) | |
Business Exit Costs | $ 25,761 |
RATIONALIZATION AND ASSET IMP_4
RATIONALIZATION AND ASSET IMPAIRMENTS (Textual) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Rationalization and Asset Impairments | |||||
Restructuring, Settlement and Impairment Provisions | $ 2,636 | $ 0 | $ 24,353 | $ 0 | |
Business Exit Costs | 25,761 | ||||
Restructuring Reserve | 12,511 | 12,511 | $ 6,803 | ||
International Welding 2018 Plans [Member] | |||||
Rationalization and Asset Impairments | |||||
Restructuring Reserve | 9,331 | 9,331 | |||
International Welding | |||||
Rationalization and Asset Impairments | |||||
Restructuring, Settlement and Impairment Provisions | $ 2,636 | $ 24,353 |
EQUITY (Details)
EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | ||||||
Non-controlling interests | $ 711 | $ 711 | $ 816 | ||||||||||
Stockholders' Equity Attributable to Parent | $ 927,157 | $ 927,157 | 931,637 | ||||||||||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 55,000,000 | 55,000,000 | |||||||||||
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased | 7,110,169 | 7,110,169 | |||||||||||
Changes in equity | |||||||||||||
Balance at the beginning of the period | $ 932,453 | ||||||||||||
Comprehensive income: | |||||||||||||
Net income including non-controlling interests | $ 70,535 | $ 106,111 | 200,214 | $ 223,290 | |||||||||
Other comprehensive income (loss) | 4,804 | 22,205 | (24,520) | 78,767 | |||||||||
Total comprehensive income (loss) | $ 75,339 | $ 128,316 | 175,694 | $ 302,057 | |||||||||
Cash dividends declared - $1.17 per share | $ (76,833) | ||||||||||||
Cash dividends declared per share (in dollars per share) | $ 0.39 | $ 0.35 | $ 1.17 | $ 1.05 | |||||||||
Issuance of shares under benefit plans | $ 18,031 | ||||||||||||
Purchase of shares for treasury (1) | [1] | (121,477) | |||||||||||
Balance at the end of the period | $ 927,868 | 927,868 | |||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (271,614) | $ (250,349) | (271,614) | $ (250,349) | $ (276,479) | (247,186) | $ (272,523) | $ (329,037) | |||||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 812 | 17,086 | (30,343) | 71,194 | |||||||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 4,053 | 5,088 | 5,915 | 7,494 | |||||||||
Net Current-Period Other Comprehensive Income (Loss), Net of Tax | 4,865 | 22,174 | (24,428) | 78,688 | |||||||||
Net sales (Note 2) | 737,099 | 669,491 | 2,284,847 | 1,877,246 | |||||||||
Cost of goods sold | 485,547 | 451,610 | 1,506,625 | 1,240,391 | |||||||||
Income Tax Expense (Benefit) | (25,209) | (24,531) | (73,991) | (69,218) | |||||||||
Shareholders' Equity | |||||||||||||
Comprehensive income: | |||||||||||||
Net income including non-controlling interests | 200,227 | ||||||||||||
Other comprehensive income (loss) | (24,428) | ||||||||||||
Total comprehensive income (loss) | 175,799 | ||||||||||||
Cash dividends declared - $1.17 per share | (76,833) | ||||||||||||
Issuance of shares under benefit plans | 18,031 | ||||||||||||
Purchase of shares for treasury (1) | [1] | (121,477) | |||||||||||
Noncontrolling Interests | |||||||||||||
Comprehensive income: | |||||||||||||
Net income including non-controlling interests | (13) | ||||||||||||
Other comprehensive income (loss) | (92) | ||||||||||||
Total comprehensive income (loss) | (105) | ||||||||||||
Cash dividends declared - $1.17 per share | 0 | ||||||||||||
Issuance of shares under benefit plans | 0 | ||||||||||||
Purchase of shares for treasury (1) | [1] | 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 | 1,914 | 1,150 | 1,914 | 1,150 | 498 | 875 | 1,834 | 587 | |||||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 1,218 | (1,814) | 987 | (1,547) | |||||||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 198 | [2] | 1,130 | [2] | 52 | [3] | 2,110 | [3] | |||||
Net Current-Period Other Comprehensive Income (Loss), Net of Tax | 1,416 | (684) | 1,039 | 563 | |||||||||
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 (Note 2) | (124) | 968 | (12) | 1,580 | |||||||||
Income Tax Expense (Benefit) | 19 | (398) | 25 | (602) | |||||||||
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 | 74 | 162 | 40 | 530 | |||||||||
Income Tax Expense (Benefit) | (5) | 25 | (24) | 214 | |||||||||
Accumulated Defined Benefit Plans Adjustment [Member] | |||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (79,414) | (90,555) | (79,414) | (90,555) | (83,269) | (85,277) | (94,513) | (95,939) | |||||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 0 | 0 | 0 | 0 | |||||||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 3,855 | [4] | 3,958 | [4] | 5,863 | [5] | 5,384 | [5] | |||||
Net Current-Period Other Comprehensive Income (Loss), Net of Tax | 3,855 | 3,958 | 5,863 | 5,384 | |||||||||
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) | (1,278) | (2,170) | (1,927) | (2,532) | |||||||||
Accumulated Translation Adjustment [Member] | |||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (194,114) | (160,944) | (194,114) | (160,944) | $ (193,708) | $ (162,784) | $ (179,844) | $ (233,685) | |||||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | (406) | [6] | 18,900 | [6] | (31,330) | [7] | 72,741 | [7] | |||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | 0 | 0 | 0 | |||||||||
Net Current-Period Other Comprehensive Income (Loss), Net of Tax | (406) | 18,900 | (31,330) | 72,741 | |||||||||
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 | $ (61) | $ 31 | $ (92) | $ 79 | |||||||||
[1] | The Company's total common shares authorized to be repurchased under the current repurchase program is 55 million shares. As of September 30, 2018, there remained 7.1 million common shares available for repurchase under this program. The repurchased common shares remain in treasury and have not been retired. | ||||||||||||
[2] | During the 2018 period, this AOCI reclassification is a component of Net sales of $(124) (net of tax of $(19)) and Cost of goods sold of $74 (net of tax of $(5)); during the 2017 period, the reclassification is a component of Net sales of $968 (net of tax of $398) and Cost of goods sold of $162 (net of tax of $25). See Note 15 to the consolidated financial statements for additional details. | ||||||||||||
[3] | During the 2018 period, the AOCI reclassification is a component of Net sales of $(12) (net of tax of $(25)) and Cost of goods sold of $40 (net of tax of $(24)); during the 2017 period, the AOCI reclassification is a component of Net sales of $1,580 (net of tax of $602) and Cost of goods sold of $530 (net of tax of $214). See Note 15 to the consolidated financial statements for additional details. | ||||||||||||
[4] | This AOCI component is included in the computation of net periodic pension costs (net of tax of $1,278 and $2,170 during the three months ended September 30, 2018 and 2017, respectively). See Note 12 to the consolidated financial statements for additional details. | ||||||||||||
[5] | The AOCI component is included in the computation of net periodic pension costs (net of tax of $1,927 and $2,532 during the nine months ended September 30, 2018 and 2017, respectively). See Note 12 to the consolidated financial statements for additional details. | ||||||||||||
[6] | The Other comprehensive income (loss) before reclassifications excludes $(61) and $31 attributable to Non-controlling interests in the three months ended September 30, 2018 and 2017, respectively. | ||||||||||||
[7] | The Other comprehensive income (loss) before reclassifications excludes $(92) and $79 attributable to Non-controlling interests in the nine months ended September 30, 2018 and 2017, respectively. |
INVENTORY VALUATION (Details)
INVENTORY VALUATION (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Inventory [Line Items] | ||
Percentage of LIFO Inventory | 37.00% | 32.00% |
Raw materials | $ 104,421 | $ 97,577 |
Work-in-process | 60,465 | 50,695 |
Finished goods | 212,545 | 200,395 |
Inventory, Net | 377,431 | 348,667 |
Excess of current cost over LIFO cost | $ 78,312 | $ 68,641 |
PRODUCT WARRANTY COSTS (Details
PRODUCT WARRANTY COSTS (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | ||
Changes in the carrying amount of product warranty accruals | |||
Balance at beginning of year | $ 22,029 | $ 21,053 | |
Accruals for warranties | 6,855 | 8,118 | |
Settlements | (8,064) | (8,672) | |
Standard And Extended Product Warranty Accrual Foreign Currency Translation Gain Loss and Other Adjustments | [1] | 349 | 2,368 |
Balance at end of period | $ 21,169 | 22,867 | |
Air Liquide Welding [Member] | |||
Changes in the carrying amount of product warranty accruals | |||
Standard And Extended Product Warranty Accrual Foreign Currency Translation Gain Loss and Other Adjustments | $ 2,114 | ||
[1] | At September 30, 2017, Foreign currency translation and other adjustments includes $2,114 in an acquired liability related to the Air Liquide Welding acquisition as discussed in Note 4 to the consolidated financial statements. |
DEBT (Details)
DEBT (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||||
Jun. 30, 2017 | Oct. 31, 2016 | Apr. 30, 2015 | Sep. 30, 2018 | Oct. 20, 2016 | Apr. 01, 2015 | |
Debt | ||||||
Line of Credit Facility, Expiration Date | Jun. 30, 2022 | |||||
Revolving credit agreement | ||||||
Debt | ||||||
Borrowing capacity under the line of credit | $ 400,000 | |||||
Line of Credit Facility, Initiation Date | Jun. 30, 2017 | |||||
Covenant compliance description | As of September 30, 2018, 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, Weighted Average Interest Rate | 3.30% | |||||
Debt Instrument, Covenant Compliance | As of September 30, 2018, the Company was in compliance with all of its debt covenants | |||||
Senior Notes 2015 [Member] | ||||||
Debt | ||||||
Debt Instrument, Initiation Date | Apr. 1, 2015 | |||||
Debt Instrument, Face Amount | $ 350,000 | |||||
Senior Notes 2016 [Member] | ||||||
Debt | ||||||
Debt Instrument, Initiation Date | Oct. 20, 2016 | |||||
Debt Instrument, Face Amount | $ 350,000 | |||||
Weighted Average [Member] | ||||||
Debt | ||||||
Debt Instrument, Term | 18 years | |||||
Minimum [Member] | Senior Notes [Member] | ||||||
Debt | ||||||
Debt Instrument, Maturity Date | Aug. 20, 2025 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 2.75% | |||||
Debt Instrument, Face Amount | $ 50,000 | |||||
Maximum | Senior Notes [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 POSTRETIREMENT_3
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Settlement charges (1) | $ 4,232 | $ 5,283 | $ 4,990 | $ 5,283 | |
Foreign Plan [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Service cost | 796 | 761 | 2,479 | 1,935 | |
Interest cost | 867 | 887 | 2,774 | 2,220 | |
Expected return on plan assets | (1,174) | (1,163) | (3,714) | (3,062) | |
Amortization of prior service cost | 0 | 4 | 1 | 12 | |
Amortization of net loss | 546 | 477 | 1,676 | 1,395 | |
Settlement charges (1) | [1] | 0 | 0 | 0 | 0 |
Defined benefit plans | 1,035 | 966 | 3,216 | 2,500 | |
Multi-employer plans | 226 | 217 | 687 | 634 | |
Defined contribution plans | 813 | 789 | 2,678 | 1,524 | |
Total pension cost | 2,074 | 1,972 | 6,581 | 4,658 | |
Domestic Plan [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Service cost | 35 | 164 | 105 | 459 | |
Interest cost | 4,574 | 4,882 | 13,561 | 14,623 | |
Expected return on plan assets | (6,450) | (8,306) | (20,281) | (23,648) | |
Amortization of prior service cost | 0 | 0 | 0 | 0 | |
Amortization of net loss | 355 | 506 | 1,123 | 1,599 | |
Settlement charges (1) | [1] | 4,232 | 5,283 | 4,990 | 5,283 |
Defined benefit plans | 2,746 | 2,529 | (502) | (1,684) | |
Multi-employer plans | 0 | 0 | 0 | 0 | |
Defined contribution plans | 5,712 | 5,390 | 17,216 | 17,224 | |
Total pension cost | 8,458 | 7,919 | 16,714 | 15,540 | |
Americas Welding | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Settlement charges (1) | $ 4,232 | $ 5,283 | $ 4,990 | $ 5,283 | |
[1] | Pension settlement charges resulting from lump sum pension payments in the three and nine months ended September 30, 2018 and 2017. |
OTHER INCOME (EXPENSE) (Details
OTHER INCOME (EXPENSE) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Other Income and Expenses [Abstract] | |||||
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Gain (Loss) Due to Settlement and Curtailment | $ (4,232) | $ (5,283) | $ (4,990) | $ (5,283) | |
Equity earnings in affiliates | 542 | 766 | 3,301 | 2,001 | |
Other income | 1,334 | 1,401 | 3,647 | 3,293 | |
Other components of net periodic pension (cost) income (1) | [1] | (2,950) | (2,570) | (130) | 1,578 |
Total Other income (expense) | $ (1,074) | $ (403) | $ 6,818 | $ 6,872 | |
[1] | Other components of net periodic pension (cost) income include pension settlement charges in the three and nine months ended September 30, 2018 of $4,232 and $4,990, respectively, and charges of $5,283 in the three and nine months ended September 30, 2017. Refer to Note 12 to the consolidated financial statements for details. |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Income taxes (Note 14) | $ 25,209 | $ 24,531 | $ 73,991 | $ 69,218 | |
Pre-tax income | 95,744 | $ 130,642 | $ 274,205 | $ 292,508 | |
Effective income tax rate (as a percent) | 27.00% | 23.70% | |||
Transition Tax Expense Benefit Net Resulting from Tax Reform Act | 2,394 | $ 2,500 | |||
Unrecognized tax benefits | 15,683 | $ 15,683 | |||
Unrecognized tax benefits that, if recognized, would be reflected as a component of income tax expense | 12,075 | 12,075 | |||
Reasonably possible reduction in prior years' unrecognized tax benefits during the next twelve months | $ 2,000 | $ 2,000 |
DERIVATIVES (Fair Value of Deri
DERIVATIVES (Fair Value of Derivative Instruments) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | $ 5,544 | $ 2,776 |
Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 804 | 4,351 |
Other Liabilities [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 10,871 | 5,085 |
Designated as Hedging Instrument | Foreign exchange contracts | Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 940 | 519 |
Designated as Hedging Instrument | Foreign exchange contracts | Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 399 | 604 |
Designated as Hedging Instrument | Foreign exchange contracts | Other Liabilities [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 0 | 0 |
Designated as Hedging Instrument | Interest Rate Swap [Member] | Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 0 | 0 |
Designated as Hedging Instrument | Interest Rate Swap [Member] | Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 0 | 0 |
Designated as Hedging Instrument | Interest Rate Swap [Member] | Other Liabilities [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 10,871 | 5,085 |
Not designated as hedging instruments | Foreign exchange contracts | Other Current Assets | ||
Fair values of derivative instruments | ||
Fair value of derivative assets | 4,604 | 2,257 |
Not designated as hedging instruments | Foreign exchange contracts | Other Current Liabilities | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | 405 | 3,747 |
Not designated as hedging instruments | Foreign exchange contracts | Other Liabilities [Member] | ||
Fair values of derivative instruments | ||
Fair value of derivative liabilities | $ 0 | $ 0 |
DERIVATIVES (Income Statement I
DERIVATIVES (Income Statement Impact) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
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 | $ 4,894 | $ 968 | $ 9,143 | $ 1,580 |
DERIVATIVES (AOCI Impact) (Deta
DERIVATIVES (AOCI Impact) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Foreign exchange contracts | |||||
Effects of designated cash flow hedges on the entity's AOCI | |||||
Gain (loss) recognized in AOCI, net of tax | $ 392 | $ (224) | |||
Foreign exchange contracts | Sales | |||||
Effects of designated cash flow hedges on the entity's AOCI | |||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ (143) | $ 968 | (37) | $ 1,580 | |
Foreign exchange contracts | Cost of goods sold | |||||
Effects of designated cash flow hedges on the entity's AOCI | |||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ (69) | $ 162 | (16) | $ 530 | |
Net Investment Hedging [Member] | |||||
Effects of designated cash flow hedges on the entity's AOCI | |||||
Gain (loss) recognized in AOCI, net of tax | $ 1,522 | $ 1,099 |
DERIVATIVES (Textual) (Details)
DERIVATIVES (Textual) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Derivative [Line Items] | |||
Gain (loss) expected to be reclassified from AOCI to earnings, next twelve months | $ 392 | ||
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 nine months ended September 30, 2018 and 2017. | Hedge ineffectiveness was immaterial in the three and nine months ended September 30, 2018 and 2017. | |
Foreign exchange contracts | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ 52,450 | $ 35,489 | |
Foreign exchange contracts | Not designated as hedging instruments | |||
Derivative [Line Items] | |||
Derivative, notional amount | 334,722 | $ 340,884 | |
Interest Rate Swap [Member] | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ 125,000 | ||
Minimum [Member] | |||
Derivative [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | ||
Maximum | |||
Derivative [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 1.80% |
FAIR VALUE (Details)
FAIR VALUE (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets: | ||
Marketable Securities | $ 99,282 | $ 179,125 |
Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Marketable Securities | 99,282 | 179,125 |
Total assets | 104,826 | 181,901 |
Liabilities: | ||
Contingent consideration | 2,100 | 7,086 |
Deferred compensation | 27,385 | 25,397 |
Total liabilities | 41,160 | 41,919 |
Fair Value, Measurements, Recurring [Member] | Foreign exchange contracts | ||
Assets: | ||
Assets | 5,544 | 2,776 |
Liabilities: | ||
Liabilities | 804 | 4,351 |
Fair Value, Measurements, Recurring [Member] | Interest Rate Swap [Member] | ||
Liabilities: | ||
Liabilities | 10,871 | 5,085 |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) | ||
Assets: | ||
Marketable Securities | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration | 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) | Interest Rate Swap [Member] | ||
Liabilities: | ||
Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Marketable Securities | 99,282 | 179,125 |
Total assets | 104,826 | 181,901 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Deferred compensation | 27,385 | 25,397 |
Total liabilities | 39,060 | 34,833 |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | Foreign exchange contracts | ||
Assets: | ||
Assets | 5,544 | 2,776 |
Liabilities: | ||
Liabilities | 804 | 4,351 |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | Interest Rate Swap [Member] | ||
Liabilities: | ||
Liabilities | 10,871 | 5,085 |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Marketable Securities | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration | 2,100 | 7,086 |
Deferred compensation | 0 | 0 |
Total liabilities | 2,100 | 7,086 |
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) | Interest Rate Swap [Member] | ||
Liabilities: | ||
Liabilities | $ 0 | $ 0 |
FAIR VALUE (Textual) (Details)
FAIR VALUE (Textual) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets and liabilities measured at fair value on a recurring basis | ||
Fair value of long-term debt | $ 631,600 | $ 687,428 |
Carrying value of long-term debt | $ 698,578 | $ 704,247 |