Lincoln Electric Holdings (LECO), a manufacturer of welding, cutting, and brazing products, has announced a 6.51 percent rise in profit for the quarter ended Jun. 30, 2014. The company earned $77.33 million or $0.96 a share in the second-quarter compared with $72.61 million or $0.87 a share a year ago. Adjusted earnings per share met the analysts' expectation of $1.01.
Revenue during the second-quarter went up marginally 0.15 percent to $728.53 million from $727.43 million in the last year period.
Gross margin expanded by 131 basis points over the last year period to 34.35 percent. Total expenses as a percentage of revenues decreased to 84.59 percent from 85.67 percent in the same period last year. That has resulted in improvement of 108 basis points in operating margins to 15.41 percent.
The company reported operating income of $112.28 million, compared with $104.27 million in the previous year period.
Christopher L. Mapes, chairman, president and CEO stated, "We are pleased to report improving trends in our business from growth in our innovative solutions and benefits from acquisitions. We achieved a 16.0% adjusted operating income margin in the quarter, reinforcing the solid execution of our '2020 Vision and Strategy' by improving mix, operating leverage and driving continuous improvement throughout our operations. Cash returned to shareholders accelerated in the quarter and we now expect to achieve $250 million in share repurchases this year."
Cash Flow
Lincoln Electric Holdings has generated cash of $118.60 million from operating activities during the first half, up 36.25 percent or $31.55 million when compared with the last year period. The company has generated 8.39 cents of operating cash flow in every sales dollar for the first half, up from 6.02 cents in the same period last year.
The company has spent $34.55 million cash to meet investing activities during the first half, as against cash outgo of $39.35 million in the last year period. It has made net capital expenditure of $34.44 million during the first half, which was higher by 13.07 percent or $3.98 million, from a year ago.
The company's free cash flow accounted for 70.96 percent of operating cash flow for the first half, compared with 65.01 percent in the last year period.
The company has spent $162.44 million cash to meet financing activities during the first half, as against cash outgo of $73.15 million in the last year period. It has made net repayment of $10.14 million debt during the first half. It has spent net of $115.32 million on repurchase of common stocks.
The company's cash dividend payment increased 123.88 percent or $20.54 million to $37.12 million. Dividend payment accounted for 31.30 percent of operating cash flow for the first half, compared with 19.05 percent in the same period previous year.
As on Jun. 30, 2014, the company's cash balance stood at $204.28 million, down 20.32 percent or $52.10 million from Jun. 30, 2013.
Shares of the company went down by 41 cents or 0.61 percent to close at $66.77 on Friday.
