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SEGMENT INFORMATION | 12 Months Ended
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Dec. 31, 2024
SEGMENT INFORMATION |
SEGMENT INFORMATION | NOTE 6 – SEGMENT INFORMATION The Company’s primary business is the design, development and manufacture of arc welding products, automated joining, assembly and cutting systems, plasma and oxy-fuel cutting equipment. The Company also has a leading global position in brazing and soldering alloys. The Company’s products include arc welding, brazing and soldering filler metals (consumables), arc welding equipment, plasma and oxyfuel cutting systems, wire feeding systems, fume control equipment, welding accessories, specialty gas regulators, and education solutions; as well as a comprehensive portfolio of automated solutions for joining, cutting, material handling, module assembly, and end of line testing. The Company has aligned its organizational and leadership structure into three operating segments to support growth strategies and enhance the utilization of the Company’s worldwide resources and global sourcing initiatives. The operating segments consist of Americas Welding, International Welding and The Harris Products Group. The Americas Welding segment includes welding operations in North and South America. The International Welding segment includes welding operations in Europe, Africa, Asia and Australia. The Harris Products Group includes the Company’s global cutting, soldering and brazing businesses, specialty gas equipment, 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 measure being the adjusted earnings before interest and income taxes ("Adjusted EBIT") profit measure. EBIT is defined as Operating income plus Other income. Segment EBIT is adjusted for special items as determined by management such as the impact of rationalization activities, certain asset impairment charges and gains or losses on disposals of assets. The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer. The CODM uses segment Adjusted EBIT to allocate resources for each segment predominantly in establishing the Company’s long-term strategy and in developing the annual budget. The CODM considers actual performance using Adjusted EBIT when making decisions about allocating capital and resources to the segments. The accounting principles applied at the operating segment level are generally the same as those applied at the consolidated financial statement level with the exception of LIFO. Segment assets include inventories measured on a FIFO basis while consolidated inventories include inventories reported on a LIFO basis. Segment and consolidated income before interest and income taxes include the effect of inventories reported on a LIFO basis. At December 31, 2024, 2023 and 2022 approximately 35%, 37% and 38%, respectively, of total inventories were valued using the LIFO method. LIFO is used for a substantial portion of U.S. inventories included in Americas Welding. Inter-segment sales are recorded at agreed upon prices that approximate arm’s length prices and are eliminated in consolidation. Corporate-level expenses are allocated to the operating segments. Financial information for the reportable segments follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | The Harris | ​ | ​ | ​ | ​ | ​ | ​
​ | Americas | ​ | International | ​ | Products | ​ | Corporate / | ​ | ​ | ​
​ | Welding (1) |  | Welding (2) |  | Group (3) |  | Eliminations (4) |  | Consolidated
For the Year Ended December 31, 2024 | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Net sales | $ | 2,564,847 | ​ | $ | 933,722 | ​ | $ | 510,101 | ​ | $ | — | ​ | $ | 4,008,670
Inter-segment sales |  | 135,758 | ​ |  | 35,861 | ​ |  | 12,321 | ​ |  | (183,940) | ​ | ​ | —
Total sales | ​ | 2,700,605 | ​ | ​ | 969,583 | ​ | ​ | 522,422 | ​ | ​ | (183,940) | ​ | ​ | 4,008,670
Cost of goods sold | ​ | 1,638,568 | ​ | ​ | 700,428 | ​ | ​ | 378,292 | ​ | ​ | (181,530) | ​ | ​ | 2,535,758
Gross profit | ​ | 1,062,037 | ​ | ​ | 269,155 | ​ | ​ | 144,130 | ​ | ​ | (2,410) | ​ | ​ | 1,472,912
Other segment expenses (5) | ​ | 559,670 | ​ | ​ | 200,785 | ​ | ​ | 59,757 | ​ | ​ | 15,765 | ​ | ​ | 835,977
EBIT | ​ | 502,367 | ​ | ​ | 68,370 | ​ | ​ | 84,373 | ​ | ​ | (18,175) | ​ | ​ | 636,935
Special items charge |  | 27,821 | ​ |  | 37,747 | ​ |  | 3,955 | ​ |  | 7,147 | ​ | ​ | 76,670
Adjusted EBIT | $ | 530,188 | ​ | $ | 106,117 | ​ | $ | 88,328 | ​ | $ | (11,028) | ​ | $ | 713,605
Special items charge | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (76,670)
Interest income | ​ | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | 10,130
Interest expense | ​ | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | (52,916)
Income before income taxes | ​ | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ | $ | 594,149
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total assets | $ | 2,416,411 | ​ | $ | 1,050,327 | ​ | $ | 346,645 | ​ | $ | (293,241) | ​ | $ | 3,520,142
Capital expenditures |  | 94,528 | ​ |  | 17,814 | ​ |  | 4,144 | ​ |  | 117 | ​ | ​ | 116,603
Depreciation and amortization |  | 57,016 | ​ |  | 21,735 | ​ |  | 10,091 | ​ |  | (604) | ​ | ​ | 88,238
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
For the Year Ended December 31, 2023 |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Net sales | $ | 2,655,546 | ​ | $ | 1,040,006 | ​ | $ | 496,084 | ​ | $ | — | ​ | $ | 4,191,636
Inter-segment sales |  | 127,536 | ​ |  | 31,498 | ​ |  | 10,641 | ​ |  | (169,675) | ​ | ​ | —
Total | ​ | 2,783,082 | ​ | ​ | 1,071,504 | ​ | ​ | 506,725 | ​ | ​ | (169,675) | ​ | ​ | 4,191,636
Cost of goods sold | ​ | 1,739,850 | ​ | ​ | 776,982 | ​ | ​ | 377,748 | ​ | ​ | (168,389) | ​ | ​ | 2,726,191
Gross profit | ​ | 1,043,232 | ​ | ​ | 294,522 | ​ | ​ | 128,977 | ​ | ​ | (1,286) | ​ | ​ | 1,465,445
Other segment expenses (5) | ​ | 514,821 | ​ | ​ | 148,304 | ​ | ​ | 54,833 | ​ | ​ | 16,250 | ​ | ​ | 734,208
EBIT | ​ | 528,411 | ​ | ​ | 146,218 | ​ | ​ | 74,144 | ​ | ​ | (17,536) | ​ | ​ | 731,237
Special items charge (gain) |  | 9,858 | ​ |  | (9,721) | ​ |  | — | ​ |  | — | ​ | ​ | 137
Adjusted EBIT | $ | 538,269 | ​ | $ | 136,497 | ​ | $ | 74,144 | ​ | $ | (17,536) | ​ | $ | 731,374
Special items charge | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (137)
Interest income | ​ | ​ | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | 6,762
Interest expense | ​ | ​ | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | (51,133)
Income before income taxes | ​ | ​ | ​ |  |  | ​ |  |  | ​ |  |  | ​ | $ | 686,866
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total assets | $ | 2,365,737 | ​ | $ | 1,046,369 | ​ | $ | 340,463 | ​ | $ | (375,272) | ​ | $ | 3,377,297
Capital expenditures |  | 61,752 | ​ |  | 20,568 | ​ |  | 8,550 | ​ |  | 117 | ​ | ​ | 90,987
Depreciation and amortization | ​ | 55,821 | ​ |  | 22,023 | ​ |  | 9,611 | ​ |  | (785) | ​ | ​ | 86,670
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
For the Year Ended December 31, 2022 |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  |
Net sales | $ | 2,288,934 | ​ | $ | 954,281 | ​ | $ | 517,996 | ​ | $ | — | ​ | $ | 3,761,211
Inter-segment sales |  | 122,019 | ​ |  | 31,503 | ​ |  | 11,040 | ​ |  | (164,562) | ​ | ​ | —
Total | ​ | 2,410,953 | ​ | ​ | 985,784 | ​ | ​ | 529,036 | ​ | ​ | (164,562) | ​ | ​ | 3,761,211
Cost of goods sold | ​ | 1,514,203 | ​ | ​ | 719,051 | ​ | ​ | 410,861 | ​ | ​ | (163,664) | ​ | ​ | 2,480,451
Gross profit | ​ | 896,750 | ​ | ​ | 266,733 | ​ | ​ | 118,175 | ​ | ​ | (898) | ​ | ​ | 1,280,760
Other segment expenses (5) | ​ | 430,871 | ​ | ​ | 158,257 | ​ | ​ | 54,167 | ​ | ​ | 15,138 | ​ | ​ | 658,433
EBIT | ​ | 465,879 | ​ | ​ | 108,476 | ​ | ​ | 64,008 | ​ | ​ | (16,036) | ​ | ​ | 622,327
Special items (gain) charge |  | (3,060) | ​ |  | 11,681 | ​ |  | — | ​ |  | 6,003 | ​ | ​ | 14,624
Adjusted EBIT | $ | 462,819 | ​ | $ | 120,157 | ​ | $ | 64,008 | ​ | $ | (10,033) | ​ | $ | 636,951
Special items charge | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (14,624)
Interest income | ​ | ​ | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | 1,607
Interest expense | ​ | ​ | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | (31,107)
Income before income taxes | ​ | ​ | ​ |  |  | ​ |  |  | ​ |  |  | ​ | $ | 592,827
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total assets | $ | 2,122,729 | ​ | $ | 994,905 | ​ | $ | 361,989 | ​ | $ | (299,077) | ​ | $ | 3,180,546
Capital expenditures |  | 43,003 | ​ |  | 17,955 | ​ |  | 10,925 | ​ |  | — | ​ | ​ | 71,883
Depreciation and amortization |  | 47,291 | ​ |  | 20,949 | ​ |  | 9,819 | ​ |  | — | ​ | ​ | 78,059
​
(1) | 2024 special items reflect Rationalization and asset impairment net charges of $18,840, an amortization of step up in value of acquired inventories of $4,776 and a pension settlement net charge of $4,205.
2023 special items reflect Rationalization and asset impairment net charges of $468 and amortization of step up in value of acquired inventories of $9,390. 2022 special items reflect Rationalization and asset impairment net gains of $431, final settlement gains related to the termination of a pension plan of $3,735 and amortization of step up in value of acquired inventories of $1,106.
(2) | 2024 special items reflect Rationalization and asset impairment net charges of $32,960 including the impact of the Company’s disposition of its Russian entity, a loss on asset disposal of $4,950, an amortization of step up in value of acquired inventories of $250 and a pension settlement gain of $413.
2023 special items reflect Rationalization and asset impairment net gains of $11,782, amortization of step up in value of acquired inventories of $2,862, gain on asset disposal of $1,646, and pension settlement charges of $845. 2022 special items reflect Rationalization and asset impairment charges of $11,681.
(3) | 2024 special items reflect Rationalization and asset impairment net charges of $3,955.
(4) | 2024 special items reflect transaction costs of $7,042 related to acquisitions as discussed in Note 4 to the consolidated financial statements.
2022 special items reflect transaction costs of $6,003 related acquisitions as discussed in Note 4 to the consolidated financial statements.
(5) | Other segment expenses primarily include:
| a. | Selling, general and administrative expenses – including bonus and research and development expenses.
| b. | Rationalization and asset impairment net charges – refer to Note 7 for further discussion.
Export sales (excluding inter-company sales) from the United States were $244,334 in 2024, $238,704 in 2023 and $173,033 in 2022. No individual customer comprised more than 10% of the Company’s total revenues in 2024, 2023 and 2022. The geographic split of the Company’s Net sales, based on the location of the customer, and property, plant and equipment were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended December 31,
​ |  | 2024 |  | 2023 |  | 2022
Net sales: |  | ​ |  |  | ​ |  |  | ​ |
United States | ​ | $ | 2,355,262 | ​ | $ | 2,398,560 | ​ | $ | 2,128,457
Foreign countries | ​ |  | 1,653,408 | ​ |  | 1,793,076 | ​ |  | 1,632,754
Total | ​ | $ | 4,008,670 | ​ | $ | 4,191,636 | ​ | $ | 3,761,211
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31,
​ |  | 2024 |  | 2023 |  | 2022
Property, plant and equipment, net: |  | ​ |  |  | ​ |  |  | ​ |
United States | ​ | $ | 344,533 | ​ | $ | 293,172 | ​ | $ | 267,654
Foreign countries | ​ |  | 274,648 | ​ |  | 282,144 | ​ |  | 277,217
Total | ​ | $ | 619,181 | ​ | $ | 575,316 | ​ | $ | 544,871
​

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