LECO - Earnings call transcript Q1 2018 | Lincoln Electric Holdings, Inc.

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Operator

Greetings, and welcome to Lincoln Electric's 2018 First Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode and this call is being recorded. It is now my pleasure to introduce your host, Amanda Butler, Vice President of Investor Relations and Communications. Thank you.

You may begin.

Amanda Butler

good and Latoya, you, morning, everyone. Thank Lincoln to Electric's XXXX call. conference quarter first Welcome financial and slide earlier our released Investor Electric results We our in lincolnelectric.com today, as the an the to website at well section. release attachment you this as call's presentation, Relations on Lincoln as find can

discussion Officer; our today Petrella. our as Chief quarter Officer, Vince the Joining Mapes, Vince the Chairman, well me call will on overview President more quarter as Lincoln's will with begin results, and performance the Chris Chris first detail. is and an Chief Executive cover Financial in

Following risks may our please But note happy materially expectations differ forward-looking, this take discussion, before statements certain your be made in during XX-Q. from our XX-K prepared questions. remarks, a results we're that affect call may our results factors. we discussion uncertainties actual of risks start our may SEC our to and Forms our and to filings the number and press A some and of due release that in are provided of on

addition, financial release, available the measures the measure not over with found GAAP. Investor the section call turn to U.S. website comparable our in non-GAAP that reconciliation is to the is may financial of In conform A GAAP measures I'll our of at in do which to discuss again Chris earnings that, tables we most And Relations in Mapes. lincolnelectric.com.

Chris Mapes

everyone. Good you, Thank morning, Amanda.

and for in reinforce momentum good X.X% strengthening X.X% to and $XXX pleased are volume solutions. first our continued from results end demand sales Organic the price. report the X.X% our million. increased These higher quarter. increased We to in the Sales sales markets XX.X% growth

incurred acquisition. margin a modest XX.X% year-over-year in also we Liquide adjusted Air increase adjusted We our decline business, to our benefited in sales the from income. In operating XX.X%. operating Our a income achieved legacy XX.X% from Welding

operational sharp actions. initiatives reflected performance to in cost material solid and Our increases raw pricing progress in mitigating

our pricing initiatives will that us inflationary global confident to actions productivity allow We are pressures. offset and

our lag the initiatives, is there of have confident full are benefit strategy. we While that to we achieve the right

to inflationary continue aggressively will We the business headwinds. manage against

earnings share Working capital this Electric legacy and manage XX Liquide increased $X.XX. Moving Welding sales requirements business increased carefully per XX% The levels. to the XX.X%. and earnings. Air sales, with continue with improved Lincoln ratio to capital Adjusted cycle quarter cash to XX.X% the to basis points ROIC increased working to

to and largest momentum a expand, markets Moving most X. general first industries end pace. in to Slide quarter which sectors, growth continued heavy increased fabrication, our solid of two We as digit at achieved the including double

Welding of Group. organic Our segments, The by sales across Products increased the led Americas and reportable all our Harris

at quarter, increased high mid industrial remained investments at attractive. increased a second capital both strong product also a By in benefit achieved double improvement exports and continues levels our growth organic equipment remain while production US broad the digit to We which have from in double Demand portfolio, consumable area, to rate. percent single to automation demand. and trends digit sector end sales global rate from digit

growth expect single high XXXX. We sales continue to percent mid organic to digit in

generation to continuing control will invest processed and the are well we solutions small technology a quarter, for portfolio growth drive solutions our In company cycle. We to the in support our acquired fifth monitoring. IoT software to which based of

Asia that acquisition also We the completed region. and supports services Pacific in bolt-on a solutions hardfacing small

the are efficient on a continues business ahead to Liquide Slide X, of enterprise successful shape more the our integration to pacing we in Air as into activities, Moving Welding and the team plan region.

synergy from quarter, streamlined run a are procurement resulted commercial benefit quarter progress ALW's EPS first $X.XX rate. legacy $X.XX in to per starting synergies and in to are EPS manufacturing more consolidating addition in contribution distribution adjusted of departments. and $X.XX the and We our and making administrative the benefit platforms, which This represents

will to on integration our updating plans, our will progress. forward Vince? you and And call to look aggressively pass implement the Vince. continue to We now I

Vince Petrella

Chris. you, Thank

Slide X. to Moving

quarter Liquide consolidated volume growth, XX% from benefit first X.X% price sales foreign and XX.X% higher increased acquisition from the Welding X.X% and exchange. favorable on Our X.X% Air

half gross basis the first margin decline in quarter Liquide Our Welding. of prior profit to XX.X%, compared year. was % XXX the with addition declined as points Air XX.X the Approximately of

basis the and offset by items, year. acquisition Segment. Americas gross Favorable our prior or mix a of point XX.X%, $XXX,XXX special XX margin LIFO timing price, versus the profit Excluding in was charge recovery Welding including a was decline cost

to increased XX.X% related million expense to Liquide Air of SG&A Our the or Welding $XXX expenses. due XX.X% addition acquisition of sales and

increased items, SG&A was currency operating Excluding charges costs The to X.X% $XX.X income special from costs. foreign asset impairments to due higher million integration activities, results and our the incentive acquisition and million, rationalization or and transaction primarily effects, to the special increase Operating compensation in item related salary $XX.X translation integration to XX.X% $XXX.X of million. and increased acquisition XX.X% sales. wage Reported and costs. included income and European approximately unfavorable

income million, or Excluding of these XX.X% to special XX.X% sales. items, $XX.X increased adjusted operating

and basis the of items, prior year salaries compensation incentive unfavorable XX.X% point to wages. price decline sales, or would Excluding have higher of acquisition $XX.X a special been income due versus operating adjusted and million, costs costs, XX the

with Our effective quarter in compared rate year was tax XX.X%, prior XX.X% the period. first

our quarter items, tax was special rate XX.X%. first Excluding

the stock to future full-year expect to be low items discrete tax continue and of We the to extent tax exercises. subject mix earnings our including XXXX and options the timing XX% rate effective range, mid of to in

$X.XX, an of on First favorable On share to XX% to diluted basis, with increased quarter year. adjusted prior higher increased a Act. the earnings X.X% $X.XX diluted and sales Tax $X.XX per the in the per US compared organic earnings share impact

of XX.X% and strengthened compensation basis adjusted wage rising the Now digit top Segment's and end and rose all dollars at across incentive channels declined three segments increased grew growth to to on XX.X% costs. quarter Consumable percent end to markets. material on $XX.X strong adjusted the first Demand points markets Welding and Americas Americas costs, X. quarter the The volumes Segment's margin quarter equipment moving rate. rate. automation most and end million. in high a geographical resumed EBIT the to raw at mid Slide through EBIT XX double-digit single higher

basis Moving Adjusted to because of Pacific. to X. and Segment to adjusted EBIT of margin growth the million, Liquide to in the declined slide $XX The acquisition. addition International Welding X.X% increased Welding due Asia XX.X% XXX points EBIT Air

X.X% versus Volumes acquisition were markets. margin Excluding increased energy year. end and related related with and lower in impacted Organic the EBIT prior sales X.X% sales higher price decline was activities volumes. seven by acquisition, a adjusted decline point a XX the basis X.X%, and X.X%

Now moving Products to Group. the Harris

as X.X% First channels. from volumes quarter solid Volume all was by offset mix. sales steady margin across XX.X% demand EBIT and held unfavorable leverage increased at price

$XX from addition quarter, Slide operations first in million needs XX. working generated of sales Welding. of the to Air higher We cash increased capital and as the rates, Liquide the with flow Moving growth

Liquide operating a versus the working Welding, was XX XX.X%, average period. the Excluding capital prior basis ratio Air year point improvement

Moving rate, higher share quarter to in in the to $XX payout and shareholders returned XX. Slide repurchases. $XX million dividend with XX% million We

in million the acquisitions invested with small also $XX mentioned. $X We bolt-on the expenditures million capital previously business in and for

be full-year estimate of to million. range to the $XX capital continued $XX spending to We in million

program and I allocation through prioritizing the growth With activities. share dividend returning balance Latoya? cash this maintain in to expect for like to call XXXX, to shareholders our strategy investments turn repurchase over would and capital We that questions.

Operator

Instructions] Thank [Operator you.

question Research Vertical is from Partners. first The Joe O'Dea of

open. is line Your

Joe O'Dea

good morning. Hi,

where you've the seen pure consumables on that and forward just about Is Or and in that seeing you're quarters. just bit couple demand end of markets? past the up of within little get is seeing thinking increases? that mix what more in of trying question anything you're to cost some a of First the digits a reflection double front pull there

Chris Mapes

strength we're of markets very I the end is confident in seeing think one we are that globally. the things

So that now. for quarters few we've seen a

We think that we're continue the and QX we inflationary challenge global. that that are through the see really QX. is to I seeing as pressures And into move

that an products and a period price a that are time is much of some forward. I environment believing it from there's of a no been these got question of inflationary by we've across in for have impacted impacted the pull increases considerable we've difficult But that And going a time. forward. in portfolio, for pieces So probably pull

just I of really it that So of across the the is strengthening continuing seeing that globally. believe we're demand most portfolio

pricing that Although, multitude are there actions occurring world. are the of around globally

Joe O'Dea

you some on the about And and sensitivity kind of challenging talk then about quarter some So presumably price-cost Thanks. then cost is of a lag have in you in I effect price locked the would of first a in in little Can than typically increases. situation. second mean general I just advance? there's quarter a mean think just with the bit more quarter that costs the timing of

you still still case think I So this cadence if and Is the in we we to margins and with incremental over go that back half the course to XQ last inflation continued back update gave, you looking of range. can are year the about the the XX% quarter? in XX% talk of for the cost

Chris Mapes

range normalized those to also will to and inflationary us the material still achieve roll XX% increases. quarter, increases I are environment. to incrementals putting our when Yes, and starts but environment during the financials XX% normalized in And the to second of expectation through that of come last the more the a continuing more continue raw succeeding that I quarter stabilize. the do incrementals able to be say into quarter. of the cost chase those inflationary Jo. We're expect price We increases would that into course market to

for the in of So incrementals stabilization types we we've the achieving see that need achieved to to us in those environment start inflationary past. really

Operator

The question you. of Jones next Thank from Stifel. Nathan is

open. is line Your

Nathan Jones

to same of The second how can that kind Good put the of of off in and much everyone. up have I are I'm talk back the any increases stock the on guess and through magnitude, follow some in to here. increases you first questions quarter, of those those pricing did the price incremental going morning, lower of on you margin quarter pricing you the about -- magnitude.

Vince Petrella

I across of increases say high. did effectivity our the very were stick price So the would businesses bulk global the

with pricing we expect of year-over-year see pricing we're to changes similar will think activities least that I these types into year-over-year future mitigate what a going will prior continue welding But being of first these the impact. largely up in through pricing quarter, at If the we second more basis. the saw in the That's on pricing putting global course marketplace. X.X%. line during I up the Americas the in We're in of that to of space. is X.X%; near the at in lapping see International mindful you type very digit pricing again quarter the business our was mid-single look year welding

Nathan Jones

guess Okay world where I particularly increases save you're on little on I price the marketplace. the equipment thinking to side, this increased about know the logical maybe a affect demand is a in might of ask bit productivity going to the And next step salaries money. the how of lot the was

price you I on the through demand Like increases here price? have potential we to demand what equipment, on point might where's that material putting these increase? through that on here? some impact you're to have point how those at affect raw how think tipping could -- see continue As to continue pass and do mean prices You if

Chris Mapes

capital OEMs that side. the our the investment equipment beyond just frankly the seeing not drive is We're can with assist them equipment. technologies Yes. have profile marketplace in drive on need larger continue And participants these capabilities to equipment of with into to reinvestment that an productivity other the demand and the productivity. side Quite the fact for solutions ability to continuing that the that and on

on occurring not are we're increases area, So we of the nor with particular is material moving the seeing portfolio consumable of any just any than is the expecting through product that because it the side the portfolio. which certainly certainly raw of mitigation are on equipment rapid less that side

Nathan Jones

helpful. Okay, that's

future? increases is or point are at any think demand price declines in position you this the in could don't driving here these your So

Chris Mapes

look automation our quarter in And of business up side don't. large have side, these that capital still demands. you in the moving as purchase. think double-digit I could confidence if you also towards capital towards OEM on especially me And gives the industries, equipment the more of I they're also we at No, that trendline are seeing higher favorable which businesses, that equipment look a being the our

Operator

Thank Saree Deutsche is you. from Bank. question The next of Boroditsky

line is open. Your

Saree Boroditsky

Thank you, good morning.

the $X.XX do year? think integration half around running of previous the Air in With side of I accretion, to up Liquide ahead guidance for you second schedule, the of your see

Chris Mapes

we're Europe certainly improvements. excited steadily we're and integration. look, in Well, We've very our working about with making making the got progress the team

operational the And excited at are relates changes But really on well those supporting their progress we're business. progress there's that the And those them certainly very are forecast teams, the long-term with financial the excited procurement we're not integration. excited acquisition with the improvements efficiencies, at making as to within making, global as side, expectations We technologies with to as both activity. still we've and as as the making for Electric, Lincoln found bullish change the much that not current teams about the it I'm certainly a seeing benefits of our any lot but on to integration; point. we're our this the any

Saree Boroditsky

quarter. comp wage was with impact go as compensation margins to debate the as associated incentive through the fourth quarter? Thank costs those if we that wondering And the expectations quantify year? of pressures I could you. for we in headwind you go the and would I the headwinds remainder expect to then incentive just Americas mentioned and your especially

Vince Petrella

Right.

x-Air that are company really is against -foreign factors. So $X profitability that the higher plans is we for to a the attributable can increase to established to currency increase S and components Liquide dollars expect as those increase the that And largely translation. kind of because achievement recording, as year-over-year of the x year-over-year on of see basis of over the XXXX. well continue performance higher

Operator

Baird. question Mig is Dobre The of from next you. Thank

line open. is now Your

Mig Dobre

Good morning. you. thank Yes,

Just clarify thinking you've that based XQ, or QX, maybe in versus be to sequentially, pricing is raw action should of we're in still a cost, material a so even where your comment, up to with be in your about right if will higher fair QX now now margins XXXX, well? there as your terms commentary looking XQ prior are for environment? price things up it steel thinking stay And more the QX on prices say if normalized we flat or catch into caught

Vince Petrella

Yes.

I think the closed I gap is that the first. fourth the quarter to we're Mick, would way closing from gap. the is The describe it,

any hopefully that continue close the gap will I little pressures second the in we've increase continual half should to better we inflationary the barring first that of think second the performance need to in seen year see and year. a in the bit of quarter incremental in half

Mig Dobre

Okay.

be So caught up basically. you'll

Vince Petrella

gap. We will the continue to close

Mig Dobre

follow-up my bit ask Then little deployment. on Okay. capital about - a

updated You've this are cash help watching about you done be some to you're thinking that thoughts share thinking buybacks. What Can to forward? of we for-- as maybe things you're of going should returning us understand the maybe shareholders? portion some how how some

Vince Petrella

continue Sure. those the to that fit I that for priorities reiterate the look And attractive to would business. and in reinvest our are our opportunities inorganic are strategy in top marketplace.

the earnings ratios our company. again When you as year. distributions for dividend continue that the to our than cash continue attractive for on We we increase increase priority our for refer will will well. payout what shares mode. reinvest those more of to what we quarter, believe that run our a of as by to to buyback business out look remainder first dividend in trajectories lastly, top repurchases the in rate the of higher looking long rate XX%. are in market by- little to flows it take course opportunities for share prices expected maintenance growth we is know the as the I the business. the We line And shareholders, And opportunities spent in and and -term would quarter, the are, million those to $XX at presently to year. during We're the which So is then comes a about of and during we with share

Operator

Thank Jim from next Oppenheimer. is you. Giannakouros The question of

open. Your line is

Jim Giannakouros

price XX you out Hey, everyone you XQ? missed number of on apologize called thank think us Good bps gap in Did it that give morning, I I you. that I a XQ. morning. but if cost

Vince Petrella

cost in on No. the on is I to the didn't. XX gross points price But be number estimated contraction basis quarter first margins.

Jim Giannakouros

trying margin, end a gross you're answer get And us be you growth automation tough, be then sells. can market yes, a comparison color the price I may give for quarter? to posted automation? again, this On may tough that to just want feel you perspective. beat comps. and progression Just, you tough that a leveraging spoke know on mix but but double-digit lumpiness I to cost like-to-like historical thanks. Any how margin just on get better in from citing that to

Chris Mapes

we different really business. than of parts costs machine seeing and are is automation no equipment other input the the First in

So automation and margin particular, top year-over-year higher inflationary than line. activity seeing the perspective, well. seen in a we've business, some there From to growth margin of largely more the we're of as book due digit both at profile rates in improvement sequentially the the double

So there's there sort we'll a a move business meaningful on to grow and other continues is any underlying that's than secular basis. of at nice pace strong year-over-year say

Jim Giannakouros

you. few thank guys slide key bullets action one have And X, you a last there. Okay, on

hurdles Now there to there call Chris for -- there's or on tracking that mentioned could would is track that no where synergies. million $XX you you're ahead plan operational of that But you that anything out have have call is -- been that arisen? unforeseen change

Vince Petrella

we in this level than would and we business. just had on integration outset. that simply laid plans rapid been execute a ago, anticipated to the of today say higher anything we've because what the our a able is If we've two synergy our I on actions pace at confidence or quarter out that was accelerated initially acquisition than the it more

and are X, of that We still is standing our our the hopefully we're just savings slide to a view or probabilities Chris' higher level on comments appropriate at the believe quarter two reiterate show of based would today been what we have success those execution. And the again, these and a behind the original saying So, are what estimates. that we maybe on ago.

Chris Mapes

confidence is would our Yes. that the importance just this for the we for acquisition add strategic term. I long in shareholders, the have

excited found people, long-term things strategic seven opportunities eight believe We've multitude that have that we're had and very had business for excited a about we of months, now have international operations. with OEMs this with. very talented We they We're just of for the our very of the lots can about. lots that impact relationships or

Operator

The you. from Seth Markets. Thank of question is next Weber Capital RBC

Your line is open.

Seth Weber

can Hi, morning. -- international back were volumes the lower we thought. I want good commentary? we market go to than The what

the that so expect I around regional guess I out talk on that is that also about Can energy but to color that? softer? add could called think markets two questions. disruption what I some you did dislocation And continue? acquisition. up, and say you there Thank any you. maybe are Pac maybe mean whether you I I Asia to think you was that are the you heard, that

Chris Mapes

Right.

saying channel with of start and the that go sales I product and Liquide are in by some terms attractive. would forward strategy not of leading activities business So the our Air that deliberately us to and integration positioning are shed product

improvements there go you and well perspective, an profile. end revenue but we would Europe you more actions, pricing trajectories, I and in the I attractive as Certainly, assets compared I and longer believe saw were margin of maybe volume Americas, think marketplace opportunities. a that consolidating to of some it exception to deliberate see also richer on Pacific, be our line, the of the as the are short-term mix facilities to in some that, tell an that Europe, from the are slight markets tell will broad-based as market consolidation you would energy the business higher improvement. over the what of very can a some that have forward market movement end in showed impact in with -- bulk the will we attractive the term the more I Asia a that which activities in and

what the and Pacific Europe. speaking not are Asia So but say that broadly I maybe we're Americas seeing rapidly improving, the as markets in with compared would as

Seth Weber

seeing share any of acquisitions, anything of Or I guess? Vince. to Okay, like your defend any digging reactions Are there you trying -- local any or has of to into competitors kind been the European that?

Vince Petrella

standpoint input alone terms We're in seeing size a extent increases. of and up be in a of we global The with not moving increases on costs nature from competitive that price cost cannot basis and are ignored.

increases perspective. broad a from And competitive so seeing across landscape we're the pricing

Seth Weber

then thoughts maybe would a driving for Okay. demand have industries. what you process be -- what's why Chris. that as comment to and Do And The follow-up about any just lower and that?

Chris Mapes

any quarter. caution data process data. point at one We for We have be within first I would would we've that. can't its that No, comment on really by that looked it. area one saying driving towards don't any one it point

it that's be just anomaly an not business but anything may we're just just towards it, overreacting we So in that the to believing the point material. can't data, in

Operator

Thank Global. you. question Liptak The from next of Walt is Seaport

open. line Your is

Walt Liptak

guys. Alright, morning, Good thanks.

how the think to changes? do give us in it's costing could, guess -- I the and reduced much follow-up channel I just international How these volume of one. you product wondered the the Yes. idea go changes got markets in you an the do down. through you much the with growth a Vince, think to you As if quarter? last rate

Vince Petrella

Walt. a great That's question, Yes.

impact, that, but to there. with able it noise it a continue There's of integration a with lot provide it's the level might define -- and us analytical you with to analysis, comfortable the a well towards running if push necessity products. within Air not trying you richer evaluate As business, the did confident can mix of we be I'm but to number core the for data. have probably of that a to for of side, certainly to the and easier as the were imagine Liquide be just us as

that pieces expected we businesses, I that the would we portfolio that are. to think need for and us, We it's were the these of to knew pieces strategy address, there when we drive. combining more important

and I continue then quarters couple see that that of for to another out. we'll settle should think

Walt Liptak

Okay, yes.

great think I it's a strategy.

maybe Europe us So market if you like rate I idea an welding. wondered it the growing. are the of sounds markets for can growth give

Vince Petrella

welding just the extrapolate with agree and the within try to that back probably at GDP data I you. while look that the On I side, same you the do, from region.

for seeing a markets growth beginning are grow. the to We may There what of I growth us also. exactly Difficult we couple are to it's European welding you've slightly But rate that might then be. expect be the within and in probably that that are market seeing that would growing areas got understand impact, the low side. impacting digits faster. single inflationary the on

Walt Liptak

it thanks on -- for you maybe, Is Are gap? North I way closing to closing where the that America? are Okay, you leading, basis gap Asia, you how as where the -- Then that. lagging? the are and you it, you're wondered closest cost, could is Europe, where at to back to now geographic if we look question a go price from this

Chris Mapes

point point inflation. would slightly is was an you would I took that there, there it the our our as the business, challenge think that well actually I to amount international pricing I as with again Americas see business. towards enormous Well, business. global Harris that When associated we out price of a actions

actions don't improvement that all broad would mitigate But as an business region area. no challenges to out that we I be I has of are Harris and in Our and one Harris necessarily to that of one in got any look although aggressive concern, at need globally, being able an outlier. think area We've our portfolio as point region towards mitigating business. stands them needing the across continued we

Walt Liptak

energy largely you And wondered you're mills. that's changed as just like doing I one, mills measure sounds pipe probably to Okay, are last a alright, great. how then And the think pipe well. the is as business now. I doing it US-based I guess it markets if

Chris Mapes

would mills, value that of well Well, a pipeline, and of the as I think oil. as increasing as now probably as stability consistency and longer-term it Walt much I you, as pipe tell it seeing is less

So, look, and where has more is the investment. oil steady we've the maintained, in more seen it's now people pricing become giving confidence capital which

got in XXXX I a energy portion business. for to We've You're going large oil why have of highest points continue confidence the in their Lincoln energy which shale oil see Electric. segment the assets some to I favorably in term I relates trend as or investment for Americas to over longer of that's should being the the it that that prices continue since component. believe are XXXX to And

Operator

Thank you. of is Reilly FBR. The from question Burke B next Liam

Your open. line is

Liam Burke

to the good automation and Vince. you, Thank a us morning, Could morning, sales quarter-to-quarter. Chris, there? Chris. behind project-oriented can you from activity sense lumpy be going give the the business activity the Good as how bid or order

Chris Mapes

solid, bid that moving back Matter business fact, strong. activity The of very order Yes. has actually the within I been very strong. see that very looks as we're into QX

in that. shift I mix that seeing slight of the segment we're which is inside a would element towards other The point

with back industries come over nice very nice the our activity some So last projects some general XX-XX days. businesses have and in very quotation

certainly we at in number some challenged the as of some believe we So that automation Electric, finding that enter view I still demand. as times that of And trend choppiness need those that to to employees about with a and around going can problem. that we to world going it's we XXXX. meet QX one we think throughout continue way to this solid book. fundamentally solve OEMs move And with are the Lincoln here at certainly solid backlog, associated business have this recognize it. And But manufacturers quotation we're in

Liam Burke

just the then board? across automation, the on geographically, staying businesses And solid

Chris Mapes

global us Yes, for much profile. is although profile certainly it that's more than Americas of a an

desires is the assets some significant globally. portion a global and expand of have But an We continue strategy Americas to to some strategy. it today automation

Operator

next Steve from is question Markets. KeyBanc Thank you. of Capital Barger The

line open. Your is

Steve Barger

just about last good that on OEM to morning. automation. follow Hey, Chris thinking about up comment

improving driving how or think measuring investments market share that's in automated lines? you do right gains product are of cycle or tech CapEx now that or see enabled you the With these can you the effectiveness

Chris Mapes

over we automation why automate continued catalysts reasons fabrication large of welding to like we it's area of certainly years. months. few able Steve, in be when we last we in into various last that those And The general made remain. some of business, a to industries back the believe And the that at processes Well, general desire investment one of efficiency people over productivity. the look improve and OEMs seeing the a to couple stepping

to cycle on So are their many we that they I'm confident challenged side. which know automation. and business, enough I demand to see able that to talked investment employees OEMs still meet back in identify still capital being the drives in them the to the upcoming

So we it Xx show in you those still profile to believing will welding. might solid confidence growth that the in that and are the that growth core expect growth catalysts see we global to around just get a be a profile, continue that

Steve Barger

Got small portfolio? tech about it's it. what point that you line that how can is? acquisition did, growth? that I How And into but this it the the you more fits leverage product And know with talk for you

Chris Mapes

that and small with was to process Yes. business was And opportunity weld accuracy some controls data analytics. associated it acquire very an interesting small software the It had weld just for us acquisition. a technologies and

building continued IoT. to bring us about. just that That's our versus around we're software to So another something enhancement It's an why perspective acquisition of opportunity us excited for internally. complement in an solutions portfolio from

Steve Barger

be of drive you're ability confident us whatever of just the we've hear LECO's Got cost. that on be you is price to in it. recover concern product just can remind inflation in. a the line realization more is but that able I the probably the biggest talked out about position market the already, And squeeze investors one to if call And to price lot able I from to about there? around Vince, why can

Vince Petrella

performance on that been Yes. of good Thanks understanding Steve. is our It's Having the increases in for a predicated period our history confidence of very ability types input the seen perform of a our really seek business brand environments. costs has time, of company. and cycles to the recovery of strength result the and these and over long historically

businesses stabilize. increasing globally that inflationary I inflationary will range this it playing company again. to The that that react to a normalized I'm confident me a incrementals gives We're our that. of the to more assurance of be we history. And very starts because So environment. see environment see and restored level out in rapidly once

Operator

Thank Research. you. Chris question is Longbow next The Longbow Research from of Dankert

open. Your line is

Chris Dankert

Thanks me kind question. on see auto. coming for growth it It's now? my Any the automotive production And have or some guys. just comment to on general of fab morning, right back. comment of quarter the forgive versus missed any that's more Hi, great I did you taking in but if

Chris Mapes

positive for Actually us in was quarter. Auto very the

got mid some We driving high that are the over digits few applications. We've We've in quarters. unique last into automotive. been space up single

believe I comparisons continue the the although favorable rates our flattened market build So in slightly automotive to see to especially space. decreasing, we in US here have

Chris Dankert

anything lumpiness as you, I'm of of really And Got or that that on back great new but I automation that quick. sure news else guess going thinking there. far growth said introductions, circle to just a labor anything there forward? product to as should about should aware people trying lot we then driving be be is you find we efficiency

Chris Mapes

of from that Well, you the innovation space, I semi-automatic automation OEM at cell. cell, they're element process into moving with every in generally unique least for literally particular because think user, driving an automated automation the that are that's

processes with advanced their has solutions their the So the and we're with them from current providing each one those fabrication, uniqueness depending process. some OEMs of upon current that participating

or tracking whether would elements systems of process. that technologies the to it and acquisition that vision So on other that's new or small whether we've analytics data of got types well be enhance

I drives the into new and for the that's it marketplace capabilities automation of that one OEM. about new things think is interesting technologies

Operator

of Thank will Dobre Mig last in Baird. queue you. question from be The

line open. is Your

Mig Dobre

taking up. for follow thanks my Yes,

little year? Products Harris maybe think of going that you comment a can know Group, bit the are about comparisons the we for a expectations volume How tougher. I little forward? to bit Going your do getting

Vince Petrella

single high type during from I that see will The serve of to finish continue to I the business of to strengthening. think an And digit the perspective. a remainder strong year. sales the end organic mid they markets remain year the are

Group the the falling remainder off So see those of rates don't types products I growth of Harris of for XXXX.

Mig Dobre

that this it's think of here that kind is Do And or you both. organic parse about obviously pricing it too would to volume? finally as talking mostly drives a you that mostly but include catch-up pricing are improving well. Not

Chris Mapes

Well.

that I think it's catch-up business. a pricing little bit of a in

made had assist is got Group a in that that product and new would they've the the marketplace. I HVAC Mig OEM The products products driving their usage got of Harris flame our that Harris Products advanced the point gas We've to business some new into individuals the They've investments portfolio. manage within other perfect towards brazing couple which thing, that we've more that large do their also has facilities effectively. of been another generation technologies

of about some they impact. So we're to at to QX, way as that. see of continued Harrison also marketplace, I the mitigate advancement a that think QX some also we mitigate pricing move as But looking into advancing products new moving going to those the certainly are to as

Mig Dobre

in I've like And well. changed that's Okay, any on noticed XXXX so reporting been you've going what's And since way the line that a adjustments color you're as income lastly looks P&L. to you've It and have other your here? great. question. items QX affiliates on housekeeping impacted, equity some some and made

Vince Petrella

only the expense. of treatment is change pension portions in real of classification The components

other the was went that into there to effect the all in quarter pension new below profit accounting be first So requires service expense a operating components of than line. reflected that cost standard

going below the amortizations, sake. forward. So items types for be operating of we consistency's pension And profit settlements, line interest year reclassified those prior financing costs, the will

the in we some coming release when be in will more there on XX-Q further the the that disclosure in that gives So weeks. you footnotes ourXX-Q detail here some

Operator

I to the Q&A for would like back This turn Vince concludes call closing our over now to Petrella remarks. session.

Vince Petrella

and everyone the the joining discussing Lincoln very thank Latoya. to for Thank look And your quarter. us you Electric. Thank strategic forward interest and in next call programs much. for of on you, in We operational continued today, the our progression

Operator

this Ladies concludes program. and the gentlemen,

You may disconnect.

have Everyone disconnect. great day. now may You

Lincoln Electric (LECO) 23 Apr 182018 Q1 Earnings call transcript