Lincoln Electric (LECO) 8-K Lincoln Electric Reports Record 2008 Second Quarter Financial Results

Exhibit 99.1	Media Contact: Roy L. Morrow (216) 383-4893
	Roy_Morrow@lincolnelectric.com
	Investors Contact: Joseph P. Kelley (216) 383-8346
	Joe_Kelley@lincolnelectric.com

LINCOLN ELECTRIC REPORTS RECORD
2008 SECOND QUARTER FINANCIAL RESULTS

Three Months Ended June 30, 2008

• Sales increased 19.3% to $699.8 million

• Operating income increased 21.6% to $91.6 million

• Net income increased 26.9% to $70.1 million

• Diluted earnings per share increased 27.6% to $1.62

Six Months Ended June 30, 2008

• Sales increased 16.2% to $1.32 billion

• Operating income increased 18.4% to $170.1 million

• Net income increased 19.7% to $123.6 million

• Diluted earnings per share increased 20.6% to $2.87

     CLEVELAND, Ohio, U.S.A., July 23, 2008 — Lincoln Electric Holdings, Inc. (the “Company”) (NASDAQ: LECO) today reported record 2008 second quarter operating income, increasing 21.6% to $91.6 million from $75.4 million in 2007, on a sales increase of 19.3%. Net income for the second quarter increased 26.9% to $70.1 million, or $1.62 per diluted share from $55.2 million, or $1.27 per diluted share in 2007. The 2008 second quarter effective tax rate was 26.3% compared with 29.6% in 2007.

     Sales for the second quarter increased 19.3% to $699.8 million from $586.6 million in the comparable period of 2007. Sales for the Company’s North American operations were $400.7 million in the quarter versus $363.8 million in the comparable quarter last year, an increase of 10.1%. U.S. export sales in the quarter increased 28.6% to $64.5 million from $50.1 million in 2007.

     Sales at Lincoln subsidiaries outside North America increased to $299.1 million in the second quarter, compared with $222.8 million in the year ago quarter, an increase of 34.2%. Excluding acquisitions and the effect of changes in foreign currency exchange rates, sales outside North America increased 12.3% in the quarter.

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Lincoln Electric Reports Record 2008 Second Quarter Financial Results

     “I am pleased to report excellent results for the second quarter,” said John M. Stropki, Chairman and Chief Executive Officer. “We continue to realize strong sales results, profitability and cash flows despite a challenging North American industrial economic cycle, continued unprecedented volatility in the metals markets and significant challenges in ensuring supply availability. Our broad market position in key global growth segments allowed us to take advantage of expansion opportunities, and minimize the impact of softening in traditional markets. We continue to be focused in executing our global strategy, capitalizing on key infrastructure development opportunities, and leveraging our value-driven welding product and service offering.”

     Operating income for the first six months of 2008 increased 18.4% to $170.1 million from $143.7 million in 2007, on a sales increase of 16.2%. Net income for the first half increased 19.7% to $123.6 million, or $2.87 per diluted share from $103.2 million, or $2.38 per diluted share in 2007.

     Sales for the first six months increased 16.2% to $1.32 billion from $1.14 billion in the comparable period of 2007. Sales for the Company’s North American operations were $771.8 million in the first half versus $709.6 million in the comparable period last year, an increase of 8.8%. U.S. export sales in the first half increased 29.1% to $126.0 million from $97.6 million in 2007.

     Sales at Lincoln subsidiaries outside North America increased to $548.2 million in the first half, compared with $426.1 million for the comparable period in 2007, an increase of 28.7%. Excluding acquisitions and the effect of changes in foreign currency exchange rates, sales outside North America increased 9.6% in the first half.

     Net cash provided by operating activities was $53.2 million in the second quarter compared with $65.1 million for the comparable period in 2007. For the first half, net cash provided by operating activities was $120.7 million compared with $107.5 million for the comparable period in 2007. During the first half of 2008, the Company paid $21.4 million in dividends. The Company’s Board of Directors declared a quarterly cash dividend of $0.25, which was paid on July 15, 2008 to holders of record as of June 30, 2008.

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Lincoln Electric Reports Record 2008 Second Quarter Financial Results

     Lincoln Electric is the world leader in the design, development and manufacture of arc welding products, robotic arc-welding systems, plasma and oxyfuel cutting equipment and has a leading global position in the brazing and soldering alloys market. Headquartered in Cleveland, Ohio, Lincoln has 38 manufacturing locations, including operations and joint ventures in 20 countries and a worldwide network of distributors and sales offices covering more than 160 countries. For more information about Lincoln Electric, its products and services, visit the Company’s website athttp://www.lincolnelectric.com.

     The Company’s expectations and beliefs concerning the future contained in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect management’s current expectations and involve a number of risks and uncertainties. Actual results may differ materially from such statements due to a variety of factors that could adversely affect the Company’s operating results. The factors include, but are not limited to: the effectiveness of operating initiatives; currency exchange and interest rates; adverse outcome of pending or potential litigation; possible acquisitions; market risks and price fluctuations related to the purchase of commodities and energy; global regulatory complexity; and the possible effects of international terrorism and hostilities on the Company or its customers, suppliers and the economy in general. For additional discussion, see “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K.

     A conference call to discuss second quarter 2008 results is scheduled for today, Wednesday, July 23, 2008 at 10:00 a.m. Eastern Time. An audio webcast of the call is accessible through the investor tab on the Company’s website athttp://www.lincolnelectric.com.

#2008-423#

Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share data)
(Unaudited)

Consolidated Statements of Income

	Three Months Ended June 30,												Fav (Unfav) to Prior Year
	2008			% of Sales			2007			% of Sales			$			%
Net sales	$	699,826			100.0	%	$	586,638			100.0	%	$	113,188			19.3	%
Cost of goods sold		495,112			70.7	%		417,970			71.2	%		(77,142	)		(18.5	%)
Gross profit		204,714			29.3	%		168,668			28.8	%		36,046			21.4	%
Selling, general & administrative expenses		113,118			16.2	%		93,317			15.9	%		(19,801	)		(21.2	%)
Operating income		91,596			13.1	%		75,351			12.8	%		16,245			21.6	%
Interest income		1,865			0.3	%		1,699			0.3	%		166			9.8	%
Equity earnings in affiliates		3,814			0.5	%		3,677			0.6	%		137			3.7	%
Other income		627			0.1	%		580			0.1	%		47			8.1	%
Interest expense		(2,802	)		(0.4	%)		(2,786	)		(0.5	%)		(16	)		(0.6	%)
Income before income taxes		95,100			13.6	%		78,521			13.4	%		16,579			21.1	%
Income taxes		24,972			3.6	%		23,272			4.0	%		(1,700	)		(7.3	%)
Effective tax rate		26.3	%					29.6	%					3.3	%
Net income	$	70,128			10.0	%	$	55,249			9.4	%	$	14,879			26.9	%
Basic earnings per share	$	1.64					$	1.29					$	0.35			27.1	%
Diluted earnings per share	$	1.62					$	1.27					$	0.35			27.6	%
Weighted average shares (basic)		42,709						42,947
Weighted average shares (diluted)		43,173						43,461

Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share data)
(Unaudited)

Consolidated Statements of Income

	Six Months Ended June 30,												Fav (Unfav) to Prior Year
	2008			% of Sales			2007			% of Sales			$			%
Net sales	$	1,320,053			100.0	%	$	1,135,681			100.0	%	$	184,372			16.2	%
Cost of goods sold		937,888			71.0	%		808,797			71.2	%		(129,091	)		(16.0	%)
Gross profit		382,165			29.0	%		326,884			28.8	%		55,281			16.9	%
Selling, general & administrative expenses		212,079			16.1	%		182,837			16.1	%		(29,242	)		(16.0	%)
Rationalization charges		—			0.0	%		396			0.0	%		396			100.0	%
Operating income		170,086			12.9	%		143,651			12.6	%		26,435			18.4	%
Interest income		4,299			0.3	%		3,149			0.3	%		1,150			36.5	%
Equity earnings in affiliates		4,363			0.3	%		5,155			0.5	%		(792	)		(15.4	%)
Other income		1,126			0.1	%		1,044			0.1	%		82			7.9	%
Interest expense		(5,783	)		(0.4	%)		(5,513	)		(0.5	%)		(270	)		(4.9	%)
Income before income taxes		174,091			13.2	%		147,486			13.0	%		26,605			18.0	%
Income taxes		50,486			3.8	%		44,237			3.9	%		(6,249	)		(14.1	%)
Effective tax rate		29.0	%					30.0	%					1.0	%
Net income(1)	$	123,605			9.4	%	$	103,249			9.1	%	$	20,356			19.7	%

Reconciliation of Net Income as Reported to Adjusted Net Income Excluding Non-Recurring Item: 

	Six Months Ended June 30,				Change
	2008		2007		$			%
Net income as reported(1)	$	123,605	$	103,249	$	20,356			19.7	%
Non-recurring item:
European rationalization charges (after-tax)		—		396		(396	)		(100.0	%)
Adjusted net income excluding non-recurring item(2)	$	123,605	$	103,645	$	19,960			19.3	%
Basic earnings per share	$	2.90	$	2.41	$	0.49			20.3	%
Non-recurring item(1)		—		0.01		(0.01	)		(100.0	%)
Basic earnings per share excluding non-recurring item(2)	$	2.90	$	2.42	$	0.48			19.8	%
Diluted earnings per share	$	2.87	$	2.38	$	0.49			20.6	%
Non-recurring item(1)		—		0.01		(0.01	)		(100.0	%)
Diluted earnings per share excluding non-recurring item(2)	$	2.87	$	2.39	$	0.48			20.1	%
Weighted average shares (basic)		42,692		42,895
Weighted average shares (diluted)		43,132		43,407

(1)

Net income includes a charge of $396 ($396 after-tax) in 2007 related to European rationalization actions.

(2)

Adjusted net income excluding the non-recurring item and basic and diluted earnings per share excluding the non-recurring item are non-GAAP financial measures that management believes are important to investors to evaluate and compare the Company’s financial performance from period to period. Management uses this information in assessing and evaluating the Company’s underlying operating performance.

Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands)
(Unaudited)

Balance Sheet Highlights

Selected Consolidated Balance Sheet Data

	June 30,		December 31,
	2008		2007
Cash and cash equivalents	$	268,357	$	217,382
Total current assets		1,194,861		969,648
Property, plant and equipment, net		462,835		429,944
Total assets		1,937,641		1,645,296
Total current liabilities		479,695		311,921
Short-term debt		63,274		12,486
Long-term debt		87,701		117,329
Total shareholders’ equity		1,223,162		1,087,220

Net Operating Working Capital

	June 30,			December 31,
	2008			2007
Trade accounts receivable	$	432,455		$	344,058
Inventory		403,833			343,849
Trade accounts payable		208,167			152,301
Net operating working capital	$	628,121		$	535,606
Net operating working capital % to net sales		25.5	%		23.5	%

Invested Capital

	June 30,			December 31,
	2008			2007
Short-term debt	$	63,274		$	12,486
Long-term debt		87,701			117,329
Total debt		150,975			129,815
Equity		1,223,162			1,087,220
Total	$	1,374,137		$	1,217,035
Total debt/capitalization		11.0	%		10.7	%
Return on invested capital		20.3	%		20.5	%

Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share data)
(Unaudited)

Consolidated Statements of Cash Flows

	Three Months Ended June 30,
	2008			2007
OPERATING ACTIVITIES:
Net income	$	70,128		$	55,249
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		14,441			13,322
Equity earnings of affiliates, net		(2,921	)		(2,853	)
Other non-cash items, net		1,206			(8,013	)
Changes in operating assets and liabilities net of effects from acquisitions:
Increase in accounts receivable		(24,529	)		(18,025	)
(Increase) decrease in inventories		(9,954	)		5,880
Increase (decrease) in accounts payable		6,385			(752	)
Net change in other current assets and liabilities		(5,109	)		23,490
Net change in other long-term assets and liabilities		3,515			(3,189	)
NET CASH PROVIDED BY OPERATING ACTIVITIES		53,162			65,109
INVESTING ACTIVITIES:
Capital expenditures		(18,286	)		(13,916	)
Acquisition of businesses, net of cash acquired		(15,589	)		(52	)
Proceeds from sale of property, plant and equipment		42			128
NET CASH USED BY INVESTING ACTIVITIES		(33,833	)		(13,840	)
FINANCING ACTIVITIES:
Net change in borrowings		15,173			5,748
Proceeds from exercise of stock options		3,844			2,636
Tax benefit from exercise of stock options		1,889			2,240
Cash dividends paid to shareholders		(10,660	)		(9,422	)
NET CASH USED BY FINANCING ACTIVITIES		10,246			1,202
Effect of exchange rate changes on cash and cash equivalents		929			974
INCREASE IN CASH AND CASH EQUIVALENTS		30,504			53,445
Cash and cash equivalents at beginning of period		237,853			94,536
Cash and cash equivalents at end of period	$	268,357		$	147,981
Cash dividends paid per share	$	0.25		$	0.22

Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands, except per share data)
(Unaudited)

Consolidated Statements of Cash Flows

	Six Months Ended June 30,
	2008			2007
OPERATING ACTIVITIES:
Net income	$	123,605		$	103,249
Adjustments to reconcile net income to net cash provided by operating activities:
Rationalization charges		—			396
Depreciation and amortization		28,348			25,833
Equity earnings of affiliates, net		(2,917	)		(3,987	)
Other non-cash items, net		5,022			(10,690	)
Changes in operating assets and liabilities net of effects from acquisitions:
Increase in accounts receivable		(61,703	)		(53,759	)
Increase in inventories		(36,924	)		(12,236	)
Increase in accounts payable		37,557			14,529
Net change in other current assets and liabilities		34,849			52,511
Net change in other long-term assets and liabilities		(7,152	)		(8,394	)
NET CASH PROVIDED BY OPERATING ACTIVITIES		120,685			107,452
INVESTING ACTIVITIES:
Capital expenditures		(31,098	)		(29,640	)
Acquisition of businesses, net of cash acquired		(24,264	)		(4,414	)
Proceeds from sale of property, plant and equipment		314			201
NET CASH USED BY INVESTING ACTIVITIES		(55,048	)		(33,853	)
FINANCING ACTIVITIES:
Net change in borrowings		14,078			(35,972	)
Proceeds from exercise of stock options		5,435			5,062
Tax benefit from exercise of stock options		2,708			2,736
Purchase of shares for treasury		(18,033	)		—
Cash dividends paid to shareholders		(21,380	)		(18,825	)
NET CASH USED BY FINANCING ACTIVITIES		(17,192	)		(46,999	)
Effect of exchange rate changes on cash and cash equivalents		2,530			1,169
INCREASE IN CASH AND CASH EQUIVALENTS		50,975			27,769
Cash and cash equivalents at beginning of period		217,382			120,212
Cash and cash equivalents at end of period	$	268,357		$	147,981
Cash dividends paid per share	$	0.50		$	0.44

Lincoln Electric Holdings, Inc.
Financial Highlights
(In thousands)
(Unaudited)

Segment Highlights

	North						Other
	America			Europe			Countries			Eliminations			Consolidated
Three months ended June 30, 2008
Net sales to unaffiliated customers	$	400,735		$	170,978		$	128,113		$	—		$	699,826
Inter-segment sales		31,145			7,339			2,731			(41,215	)		—
Total	$	431,880		$	178,317		$	130,844		$	(41,215	)	$	699,826
Income before interest and income taxes	$	62,049		$	20,510		$	12,385		$	1,093		$	96,037
As a percent of total sales		14.4	%		11.5	%		9.5	%					13.7	%
Three months ended June 30, 2007
Net sales to unaffiliated customers	$	363,846		$	132,219		$	90,573		$	—		$	586,638
Inter-segment sales		25,644			4,525			2,853			(33,022	)		—
Total	$	389,490		$	136,744		$	93,426		$	(33,022	)	$	586,638
Income before interest and income taxes	$	55,130		$	18,507		$	7,347		$	(1,376	)	$	79,608
As a percent of total sales		14.2	%		13.5	%		7.9	%					13.6	%

	North						Other
	America			Europe			Countries			Eliminations			Consolidated
Six months ended June 30, 2008
Net sales to unaffiliated customers	$	771,848		$	318,423		$	229,782		$	—		$	1,320,053
Inter-segment sales		58,211			14,264			4,297			(76,772	)		—
Total	$	830,059		$	332,687		$	234,079		$	(76,772	)	$	1,320,053
Income before interest and income taxes	$	118,582		$	38,729		$	17,424		$	840		$	175,575
As a percent of total sales		14.3	%		11.6	%		7.4	%					13.3	%
Six months ended June 30, 2007
Net sales to unaffiliated customers	$	709,566		$	254,000		$	172,115		$	—		$	1,135,681
Inter-segment sales		49,672			11,184			8,296			(69,152	)		—
Total	$	759,238		$	265,184		$	180,411		$	(69,152	)	$	1,135,681
Income before interest and income taxes	$	104,233		$	33,189		$	13,735		$	(1,307	)	$	149,850
As a percent of total sales		13.7	%		12.5	%		7.6	%					13.2	%