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What changed in LINCOLN ELECTRIC HOLDINGS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of LINCOLN ELECTRIC HOLDINGS INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+170 added−167 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-26)

Top changes in LINCOLN ELECTRIC HOLDINGS INC's 2025 10-K

170 paragraphs added · 167 removed · 150 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

22 edited+4 added−2 removed15 unchanged
Biggest changeCompetition in the arc welding and cutting industry is based on brand preference, product quality, price, performance, warranty, delivery, service and technical support. The Company believes its performance against these factors has contributed to the Company’s position as the leader in the industry. Most of the Company’s products may be classified as standard commercial articles and are manufactured for stock.
Biggest changeThe Company believes its performance against these factors has contributed to the Company’s position as the leader in the arc welding industry and leader in automation, cutting, mobile and power solutions. Most of the Company’s consumables and equipment products are classified as standard commercial articles and are manufactured for stock; whereas automation solutions are primarily custom or build-to-print systems.
This evaluation is utilized by the Company’s CEO, as well as segment business and functional executives, to identify high potential and diverse talent for further development to establish strong succession plans for the Company’s most critical roles. ​ The Company believes that the practices outlined above result in sustained increases in shareholder value and reflect its compensation philosophy of aligning long-term pay and performance. ​ Health and Safety ​ Health and safety is a priority for the Company, and its vision is an accident-free workplace with zero safety incidents.
This evaluation is utilized by the Company’s CEO, as well as segment business and functional executives, to identify high potential talent for further development to establish strong succession plans for the Company’s most critical roles. ​ The Company believes that the practices outlined above result in sustained increases in shareholder value and reflect its compensation philosophy of aligning long-term pay and performance. ​ Health and Safety ​ Health and safety is a priority for the Company, and its vision is an accident-free workplace with zero safety incidents.
The Company focuses on recruiting and developing diverse talent and reviews and updates its human resources processes and benchmarks roles and compensation externally on a regular basis to help prevent bias and promote an engaged, industry-leading workplace. 3 Table of Contents ​ Compensation ​ The Company’s compensation program is designed to attract and retain exceptional employees and to maintain a strong pay for performance culture.
The Company focuses on recruiting and 3 Table of Contents ​ developing talent and reviews and updates its human resources processes and benchmarks roles and compensation externally on a regular basis to help prevent bias and promote an engaged, industry-leading workplace. ​ Compensation ​ The Company’s compensation program is designed to attract and retain exceptional employees and to maintain a strong pay for performance culture.
The Company participates in community meetings, local business associations, offers plant visits, provides grants to nonprofit organizations and donates resources and time through in-kind gifts, employee volunteerism and non-profit board service. The Company’s partnership with academia includes executive-led lectures and donations of equipment and engineering expertise to support lab and research initiatives.
The Company participates in community meetings, local business associations, offers plant visits, provides grants to nonprofit organizations and donates resources and time through in-kind gifts, employee matching programs, volunteerism and non-profit board service. The Company’s partnership with academia includes executive-led lectures and donations of equipment and engineering expertise to support lab and research initiatives.
The number of persons employed by the Company worldwide at December 31, 2024 was approximately 12,000. ​ Employee Engagement ​ The Company strongly believes that employee engagement drives better business results and that a highly engaged workforce can increase innovation, productivity and bottom-line performance while reducing costs.
The number of persons employed by the Company worldwide at December 31, 2025 was approximately 12,000. ​ Employee Engagement ​ The Company strongly believes that employee engagement drives better business results and that a highly engaged workforce can increase innovation, productivity and bottom-line performance while reducing costs.
The Company’s programs include formal leadership, management and professional development programs, tuition reimbursement for external accredited programs, comprehensive employee safety and compliance training, early career and internship programs, mentoring, self-guided online courses, instructor-led programs and special project and rotational assignments that can lead to extensive global exposure. ​ Global Diversity and Culture ​ The Company has a globally diverse workforce with many cultures, subcultures, religions, lifestyles, and languages.
The Company’s programs include formal leadership, management and professional development programs, tuition reimbursement for external accredited programs, comprehensive employee safety and compliance training, early career and internship programs, mentoring, self-guided online courses, instructor-led programs and special project and rotational assignments that can lead to extensive global exposure. ​ Global Workforce and Culture ​ The Company has a global workforce with many cultures, subcultures, religions, lifestyles, and languages.
Outside of the Americas, the Company has an international sales organization comprised of Company employees and agents who sell products from the Company’s various manufacturing sites to distributors and product users. 1 Table of Contents ​ The Company’s major end-user markets include: ● general fabrication, ● energy (oil and gas, power generation and process industries), ● heavy industries (heavy fabrication, ship building and maintenance and repair), ● automotive and transportation, and ● construction and infrastructure.
Outside of the Americas, the Company has an international sales organization comprised of Company employees and agents who sell products from the Company’s various manufacturing sites to distributors and product users. 1 Table of Contents ​ The Company’s major end-user markets include: ● general fabrication, ● energy (oil and gas, power generation and process industries), ● heavy industries (heavy fabrication, ship building and maintenance and repair), ● automotive and transportation, and ● structural (non-residential construction and infrastructure).
Overall demand for arc welding and cutting products is largely determined by economic cycles and the level of capital spending in manufacturing and other industrial sectors. See "Item 1A. Risk Factors" for further discussion regarding risks associated with customers, general economic conditions and demand. Competition Conditions in the arc welding and cutting industry are highly competitive.
Overall demand for arc welding and cutting products is largely determined by economic cycles and the level of capital spending in manufacturing and other industrial sectors. See "Item 1A. Risk Factors" for further discussion regarding risks associated with customers, general economic conditions and demand.
This close relationship between the technical sales force and the direct customers, together with its supportive relationship with its distributors, who are particularly interested in handling the broad range of the Company’s products, is an important element of the Company’s market success and a valuable asset of the Company.
This close relationship between the technical sales force and direct customers, as well as with distributors, who are particularly interested in handling the broad range of the Company’s products, is an important element of the Company’s market success and a valuable asset of the Company.
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.
Solutions The Company’s products include arc welding equipment, filler metals (welding, brazing and soldering consumables), cutting systems (laser, plasma and oxyfuel), wire feeding systems, fume control equipment, welding accessories, specialty gas regulators, mobile power equipment, wear solutions, software, and education solutions; as well as a comprehensive portfolio of automated solutions and system integration services for joining, cutting, material handling, module assembly, and end of line testing.
The Company believes it has a competitive advantage in the marketplace because of its highly trained technical sales force and the support of its welding research and development staff to assist customers in optimizing their welding applications. This allows the Company to introduce its products to new users and to establish and maintain close relationships with its customers.
The Company believes it has a competitive advantage in the marketplace because of its highly trained engineers, technical sales force and the innovative solutions engineered by its welding research and development staff to assist customers in optimizing their fabrication operations. This allows the Company to introduce its solutions to new users and establish and maintain close relationships with its customers.
Customers The Company’s products are sold in both domestic and international markets. In the Americas, products are sold principally through industrial distributors, retailers and also directly to users of welding products (OEMs, manufacturers and integrators).
In the Americas, products are sold principally through industrial distributors, retailers and also directly to users of welding products (OEMs, manufacturers and integrators).
The Company has, through wholly-owned subsidiaries, manufacturing facilities located in the United States, Australia, Austria, Brazil, Canada, China, Colombia, Denmark, France, Germany, India, Italy, Mexico, Poland, Portugal, Romania, South Korea, Spain, Turkey and the United Kingdom. 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.
Manufacturing Footprint The Company has, through wholly owned subsidiaries, manufacturing and automation facilities in 20 countries located in the United States, Australia, Austria, Brazil, Canada, China, Colombia, Denmark, France, Germany, India, Italy, Mexico, Poland, Portugal, Romania, South Korea, Spain, Turkey and the United Kingdom. Reportable Segments The Company’s business units are aligned into three operating segments.
In addition, the Company is ISO 9001 certified at 47 facilities worldwide. The Company ensures compliance as well as the continuous improvement of the environmental performance of its products and operations through its global Environmental, Health, Safety and Quality (“EHS&Q”) systems.
The Company ensures compliance as well as the continuous improvement of the environmental performance of its products and operations through its global Environmental, Health, Safety and Quality (“EHS&Q”) systems.
The Company has a longstanding commitment to equal opportunity in all aspects of employment—including employee compensation, job placement and promotion regardless of gender, race or other personal characteristics. The Company’s culture is underpinned by its core values, including the guiding principle championed by James F. and John C.
The Company has a longstanding commitment to equal opportunity in all aspects of employment—including employee compensation, job placement and promotion regardless of gender, race or other personal characteristics.
Patents and Trademarks The Company holds many valuable patents, primarily in arc welding, and actively protects its innovations as research and development has progressed in both the United States and major international jurisdictions. The Company believes its trademarks are an important asset and aggressively pursues brand management. Environmental Regulations The Company’s facilities are subject to environmental regulations.
Patents and Trademarks The Company holds many valuable patents, primarily in arc welding, and actively protects its innovations as research and development has progressed in both the United States and major international jurisdictions.
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 the retail business in the United States.
The Harris Products Group includes the Company’s global cutting, soldering and brazing businesses, specialty gas equipment, as well as the retail business which is primarily in the United States. Customers The Company’s products are sold in both domestic and international markets.
To date, compliance with these environmental regulations has not had a material adverse effect on the Company’s earnings. The Company is ISO 14001 certified at 2 Table of Contents ​ most significant manufacturing facilities in North America and Europe and is progressing towards certification at its remaining facilities worldwide.
The Company believes its trademarks are an important asset and aggressively pursues brand management. 2 Table of Contents ​ Environmental Regulations The Company’s facilities are subject to environmental regulations. To date, compliance with these environmental regulations has not had a material adverse effect on the Company’s earnings.
Lincoln when they founded Lincoln Electric 130 years ago – The Golden Rule: Treat Others How You Would Like to Be Treated.
The Company’s culture is underpinned by its core values, including the guiding principle championed by its founders over 130 years ago – The Golden Rule: Treat Others How You Would Like to Be Treated.
The Lincoln Electric Company began operations in 1895 and was incorporated under the laws of the State of Ohio in 1906. During 1998, The Lincoln Electric Company reorganized into a holding company structure, and Lincoln Electric Holdings, Inc. became the publicly-held parent of Lincoln Electric subsidiaries worldwide, including The Lincoln Electric Company.
Founded in 1895 and incorporated in the state of Ohio in 1906 as The Lincoln Electric Company, the Company reorganized into a holding company structure as Lincoln Electric Holdings, Inc. in 1998. The Company is a high-performance industrial machinery and technology leader who helps customers manufacture and maintain vital equipment and infrastructure.
The arc welding power sources and wire feeding systems manufactured by the Company range in technology from basic units used for light manufacturing and maintenance to highly sophisticated robotic applications for high volume production welding and fabrication.
Services include additive manufacturing, precision fabrication, wear services, upfitting, and training. Solutions range in technology and features from basic units used for personal, maintenance and light manufacturing use to highly sophisticated robotic solutions for complex fabrication and production activities.
The Company believes it is the world’s largest manufacturer of consumables and equipment with relatively few major broad-line competitors worldwide, but numerous smaller competitors in specific geographic markets. The Company continues to pursue strategies to heighten its competitiveness in domestic and international markets, which includes positioning low cost manufacturing facilities in most geographical markets.
Competition Commercial conditions in the arc welding, cutting and automation/system integration industries are highly competitive due to the fragmented profile of the regional markets. The Company believes it is the world’s largest manufacturer of arc welding solutions and has relatively few global broad-line competitors worldwide, but numerous smaller competitors in specific geographic markets.
Removed
The Company is the world leader in the design, development and manufacture of arc welding solutions, automated joining, assembly and cutting systems, plasma and oxyfuel cutting equipment, and has a leading global position in brazing and soldering alloys.
Added
The Company’s innovative solutions enable higher quality and productivity across a variety of processes including welding, cutting, brazing, machining, process automation, and field repair.
Removed
Three primary types of arc welding consumables are produced: (1) coated manual or stick electrodes; (2) solid wire produced in coil, reel or drum forms for continuous feeding in mechanized welding; and (3) cored wire produced in coil form for continuous feeding in mechanized welding.
Added
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, Middle East, Africa, Asia and Australia.
Added
The Company extends its competitiveness in domestic and international markets through high quality, differentiated solutions and services, and has established manufacturing facilities in most geographical markets to cost effectively serve regional demand. Competition in the arc welding and cutting industry is based on brand preference, product quality, price, performance, warranty, delivery, service, commercial programs, and technical support.
Added
The Company is ISO 14001 certified at most significant manufacturing facilities in North America and Europe and is progressing towards certification at its remaining facilities worldwide. In addition, the Company is ISO 9001 certified at 49 facilities worldwide.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

49 edited+6 added−3 removed58 unchanged
Biggest changeThe amount of income taxes paid is subject to ongoing audits by the U.S. federal, state and local tax authorities and by foreign tax authorities. If these audits result in assessments different from amounts reserved, future financial results may include unfavorable adjustments which could have a material adverse effect on our results of operations.
Biggest changeIf these audits result in assessments different from amounts reserved, future financial results may include unfavorable adjustments, which could have a material adverse effect on our results of operations. ​ 11 Table of Contents ​ Evolving international laws and enforcement relating to data privacy could adversely affect our operations.
Our Board of Directors (“Board”) provides oversight of the ERM process and systematically reviews identified critical risks. The Audit Committee also reviews major financial risk exposures and the steps management has taken to monitor and control them.
Our Board of Directors (the “Board”) provides oversight of the ERM process and systematically reviews identified critical risks. The Audit Committee of the Board also reviews major financial risk exposures and the steps management has taken to monitor and control them.
Any such disruption could cause delays in the production and distribution of our products and the loss of sales and customers. Insurance proceeds may not adequately compensate the Company for the losses. Availability of and volatility in energy costs or raw material prices may adversely affect our business.
Any such disruption could cause delays in the production and distribution of our products and the loss of sales and customers. Insurance proceeds may not adequately compensate the Company for our losses. Availability of and volatility in energy costs or raw material prices may adversely affect our business.
The Company continues to invest in cybersecurity, including measures intended to maintain and enhance cybersecurity resilience, and the Company’s cybersecurity risks are regularly monitored by the Audit Committee of our Board. Nevertheless, due to the nature of cybersecurity threats, there can be no assurance that our preventive efforts can fully mitigate the risks of all cybersecurity threats and cybersecurity incidents.
The Company continues to invest in cybersecurity, including measures intended to maintain and enhance cybersecurity resilience, and the Company’s cybersecurity risks are regularly monitored by the Audit Committee of the Board. Nevertheless, due to the nature of cybersecurity threats, there can be no assurance that our preventive efforts can fully mitigate the risks of all cybersecurity threats and cybersecurity incidents.
Risks Related to Human Capital Our operations depend on maintaining a skilled workforce, and any interruption in our workforce could negatively impact our results of operations and financial condition. Our success depends in part on the efforts and abilities of our management team and key employees. Their skills, experience and industry knowledge significantly benefit our operations and performance.
Risks Related to Human Capital Management Our operations depend on maintaining a skilled workforce, and any interruption in our workforce could negatively impact our results of operations and financial condition. Our success depends in part on the efforts and abilities of our management team and key employees. Their skills, experience and industry knowledge significantly benefit our operations and performance.
Laws and regulations addressing personal information, including with respect to the European Union’s General Data Protection Regulation ("GDPR"), U.S. state privacy laws such as the California Consumer Privacy Act, and the interpretation and enforcement of these and similar laws and regulations, are continuously evolving and there is significant uncertainty with respect to how compliance with these laws and regulations may develop and the costs and complexity of future compliance.
Laws and regulations addressing personal information, including with respect to the European Union’s General Data Protection Regulation, U.S. state privacy laws, such as the California Consumer Privacy Act, and the interpretation and enforcement of these and similar laws and regulations, are continuously evolving and there is significant uncertainty with respect to how compliance with these laws and regulations may develop and the costs and complexity of future compliance.
Even if we are successful defending such claims or product liability coverage is adequate, claims of this nature could cause customers to lose confidence in our products and our Company. Warranty claims are not generally covered by insurance, and we may incur significant warranty costs in the future for which we would not be reimbursed.
Even if we are successful in defending such claims and product liability coverage is adequate, claims of this nature could cause customers to lose confidence in our products and the Company. Warranty claims are not generally covered by insurance, and we may incur significant warranty costs in the future for which we would not be reimbursed.
The long-term impact of the asbestos loss contingency, in the aggregate, on operating results, operating cash flows and access to capital markets is difficult to assess, particularly since claims are in many different stages of development and we benefit significantly from cost-sharing with co-defendants and insurance carriers.
The long-term impact of an asbestos loss contingency, in the aggregate, on operating results, operating cash flows and access to capital markets is difficult to assess, particularly since claims are in many different stages of development and we benefit significantly from cost-sharing with co-defendants and insurance carriers.
Our business is also subject to increasingly complex and changing laws and regulations enacted to protect business and personal information in the United States and other jurisdictions regarding privacy, data protection and data security, including those related to the collection, storage, use, transmission and protection of personal information and other customer, vendor or employee data.
Our business is also subject to complex and changing laws and regulations enacted to protect business and personal information in the United States and other jurisdictions regarding privacy, data protection and data security, including those related to the collection, storage, use, transmission and protection of personal information and other customer, vendor or employee data.
Additional risks and uncertainties of which we are currently unaware or that we currently believe to be immaterial may also adversely affect our business. 5 Table of Contents ​ Risks Related to Economic Conditions General economic, financial and market conditions may adversely affect our financial condition, results of operations and access to capital markets.
Additional risks and uncertainties of which we are currently unaware or that we currently believe to be immaterial may also adversely affect our business. 5 Table of Contents ​ Risks Related to Economic Conditions General economic, financial and market conditions may adversely affect our financial condition, results of operations and access to capital markets for our business.
However, cybersecurity threats, cybersecurity incidents or disruptions involving our systems or those of our third-party business partners, or any failure by us or our third-party business partners to effectively address, enforce or maintain our information systems could interrupt our ability to manage and operate the business, impact data, and adversely affect our business strategy, results of operations and financial condition, including major disruptions to business operations, loss of intellectual property, release of confidential information, alteration or corruption of data or systems, costs related to remediation and recovery, and litigation including individual claims or consumer class actions, commercial litigation, 7 Table of Contents ​ administrative, and civil or criminal investigations or actions, regulatory intervention and sanctions or fines, investigation and remediation costs and possible prolonged negative publicity.
However, cybersecurity threats, cybersecurity incidents or disruptions involving our systems or those of our third-party business partners, or any failure by us or our third-party business partners to effectively address, enforce or maintain our information systems could interrupt our ability to manage and operate the business, impact data, and adversely affect our business strategy, results of operations and financial condition, including major disruptions to business operations, loss of intellectual property, release of confidential information, alteration or corruption of data or systems, costs related to remediation and recovery, and litigation including individual claims or consumer class actions, commercial litigation, administrative, and civil or criminal investigations or actions, regulatory intervention and sanctions or fines, investigation and remediation costs and possible prolonged negative publicity.
Forward-looking statements, and our future performance, operating results, financial position and liquidity, are subject to a variety of factors that could materially affect results, including those risks described below. Forward-looking statements made in this report speak only as of the date of the statement, and, except as required by law, we undertake no obligation to update those statements.
Forward-looking statements, and our future performance, operating results, financial condition and liquidity, are subject to a variety of factors that could materially affect results, including those risks described below. Forward-looking statements made in this report speak only as of the date of the statement, and, except as required by law, we undertake no obligation to update those statements.
We may be subject to additional regulations or restrictions in jurisdictions where we operate, including charges to fund additional energy-efficient activities, assessments or fees, and operational restrictions such as reduced emission allowances. Compliance with climate change regulations and restrictions may result in additional costs, including increased production costs and taxes, which could adversely impact our financial position.
We may be subject to additional regulations or restrictions in jurisdictions where we operate, including charges to fund additional energy-efficient activities, assessments or fees, and operational restrictions, such as reduced emission allowances. Compliance with climate change regulations and restrictions may result in additional costs, including increased production costs and taxes, which could adversely impact our financial condition.
The introduction of artificial intelligence ("AI") and machine-learning technologies, particularly generative AI, into internal processes, third-party services and/or new and existing offerings may result in new or expanded risks and liabilities, including due to enhanced governmental or regulatory scrutiny, litigation, compliance issues, ethical concerns, confidentiality or security risks, as well as other factors that could adversely affect our business, reputation and financial results.
The introduction of AI and machine-learning technologies, particularly generative AI, into internal processes, third-party services and/or new and existing offerings may result in new or expanded risks and liabilities due to enhanced governmental or regulatory scrutiny, litigation, compliance issues, ethical concerns, confidentiality or security risks, as well as other factors that could adversely affect our business, reputation and financial results.
Some environmental laws impose strict, retroactive and joint and several liability for the remediation of the release of hazardous substances, even for conduct that was lawful at the time it occurred, or for the conduct of or conditions caused by prior operators, predecessors or third parties.
Certain environmental laws impose strict, retroactive and joint and several liability for the remediation of the release of hazardous substances, even for conduct that was lawful at the time it occurred, or for the conduct of or conditions caused by prior operators, predecessors or third parties.
Our facilities and operations, and the facilities and operations of our suppliers and customers, could be disrupted by events beyond our control, such as war, acts of terror, political unrest, pandemics, labor disputes and natural disasters, including events caused by climate change.
Our facilities and operations, and the facilities and operations of our suppliers and customers, could be disrupted by events beyond our control, such as war, acts of terror, political unrest, pandemics, labor disputes, trade policies, and natural disasters, including events caused by climate change.
Claims of intellectual property infringement might also require us to redesign affected products, enter into costly settlements or license agreements, pay costly damage awards or face a temporary or permanent injunction prohibiting us from manufacturing, marketing or selling certain of our products. The competitive pressures we face could harm our revenue, results of operations and prospects.
Claims of intellectual property infringement might also require us to redesign affected products, enter into costly settlements or license agreements, pay costly damage awards or face a temporary or permanent injunction prohibiting us from manufacturing, marketing or selling certain of our products. 9 Table of Contents ​ The competitive pressures we face could harm our revenue, results of operations and prospects.
While we intend to contest these lawsuits vigorously, and believe we have applicable insurance relating to these claims, there are several risks and uncertainties that may affect our liability for personal injury claims relating to exposure to asbestos, including the future impact of changing cost sharing arrangements or a change in our overall trial experience.
While we intend to contest these lawsuits vigorously, and believe we have applicable insurance relating to these claims, there are several risks and 10 Table of Contents ​ uncertainties that may affect our liability for personal injury claims relating to exposure to asbestos, including the future impact of changing cost sharing arrangements or a change in our overall trial experience.
The use of artificial intelligence can lead to unintended consequences, including generating content that appears correct but is factually inaccurate, misleading or otherwise flawed, or that results in unintended biases and discriminatory outcomes, which could harm our reputation and business and expose us to risks related to inaccuracies or errors in the output of such technologies.
The use of AI can lead to unintended consequences, including generating content that appears correct but is factually inaccurate, misleading or otherwise flawed, or that results in unintended biases and discriminatory outcomes, which could harm our reputation and business and expose us to risks related to inaccuracies or errors in the output of such technologies.
Risks Related to Manufacturing and Operations Economic and supply disruptions associated with events beyond our control, such as war, acts of terror, political unrest, pandemics, labor disputes and natural disasters could adversely affect our supply chain and distribution channels or result in loss of sales and customers.
Risks Related to Manufacturing and Operations Economic, geopolitical and supply disruptions associated with events beyond our control, such as war, acts of terror, political unrest, pandemics, labor disputes, trade policies, and natural disasters, could adversely affect our supply chain and distribution channels or result in loss of sales and customers.
Since January 1, 1995, we have been a co-defendant in asbestos cases that have been resolved as follows: 57,080 of those claims were dismissed, 23 were tried to defense verdicts, 7 were tried to plaintiff verdicts (which were reversed or resolved after appeal), 1 was resolved by agreement for an immaterial amount and 1,018 were decided in favor of the Company following summary judgment motions.
Since January 1, 1995, we have been a co-defendant in asbestos cases that have been resolved as follows: 57,272 of those claims were dismissed, 23 were tried to defense verdicts, 7 were tried to plaintiff verdicts (which were reversed or resolved after appeal), 1 was resolved by agreement for an immaterial amount and 1,023 were decided in favor of the Company following summary judgment motions.
Any failure, or perceived failure, to comply with data protection or privacy-related legal obligations may result in governmental enforcement actions, regulatory intervention and sanctions or fines, investigating costs, consumer 11 Table of Contents ​ class actions or commercial litigation, or negative publicity, and could have an adverse effect on our operations and financial condition. ​ Our global operations are subject to increasingly complex environmental regulatory requirements.
Any failure, or perceived failure, to comply with data protection or privacy-related legal obligations may result in governmental enforcement actions, regulatory intervention and sanctions or fines, investigating costs, consumer class actions or commercial litigation, or negative publicity, and could have an adverse effect on our operations and financial condition. ​ Our global operations are subject to increasingly complex environmental regulatory requirements.
As of December 31, 2024, we were a co-defendant in cases alleging asbestos induced illness involving claims by approximately 1,300 plaintiffs. In each instance, we are one of a large number of defendants. The asbestos claimants allege that exposure to asbestos contained in welding consumables caused the plaintiffs to develop adverse pulmonary diseases, including mesothelioma and other lung cancers.
As of December 31, 2025, we were a co-defendant in cases alleging asbestos induced illness involving claims by approximately 1,126 plaintiffs. In each instance, we are one of a large number of defendants. The asbestos claimants allege that exposure to asbestos contained in welding consumables caused the plaintiffs to develop adverse pulmonary diseases, including mesothelioma and other lung cancers.
Our sales and results of operations, as well as our plans to expand in some foreign countries, could be adversely affected by this increased competition.
Our sales and results of operations, as well as our plans to expand in certain foreign countries, could be adversely affected by this increased competition.
If economic, business and industry conditions 6 Table of Contents ​ deteriorate, capital spending in those sectors may be substantially decreased, which could reduce demand for our products and have an adverse effect on our revenues and results of operations.
If economic, business and industry conditions deteriorate, capital spending in those sectors may be substantially decreased, which could reduce demand for our products and have an adverse effect on our revenues and results of operations.
Any of these events could have an adverse effect on our business strategy, results of operations and financial condition. ​ We may be incorporating artificial intelligence technologies into our products, services and processes. These technologies may present business, compliance and reputational risks.
Any of these events could have an adverse effect on our business strategy, results of operations and financial condition. ​ We may be incorporating AI technologies into our products, services and processes. These technologies may present business, compliance and reputational risks.
For example, while steel manufacturers traditionally have not been significant competitors in the domestic arc welding industry, some 9 Table of Contents ​ foreign integrated steel producers manufacture selected consumable arc welding products and robotic arm manufacturers compete in the automated welding and cutting space. In addition, in certain markets of the world, distributors manufacture and sell arc welding products.
For example, while steel manufacturers traditionally have not been significant competitors in the domestic arc welding industry, certain foreign integrated steel producers manufacture selected consumable arc welding products and robotic arm manufacturers compete in the automated welding and cutting space. In addition, in certain markets of the world, distributors manufacture and sell arc welding products.
Our goal is to proactively manage risks in a structured approach and in conjunction with the strategic planning process, with the intent to preserve and enhance shareholder value. However, these and other risks and uncertainties could cause our results to vary materially from recent results or from our anticipated future results.
Our goal is to proactively manage risks in a structured approach and in conjunction with the strategic planning process, with the intent to preserve and enhance shareholder value. However, the risk factors described below and other risks and uncertainties could cause our results to vary materially from recent results or from our anticipated future results.
Recessionary economic cycles, global supply chain disruptions, higher logistics costs, higher interest rates, inflation, higher raw materials costs, higher labor costs, trade barriers in the world markets, financial turmoil related to sovereign debt and changes in tax laws or trade laws or other economic factors and other challenges affecting the countries and industries in which we do business, including, but not limited to, the ongoing conflicts between Russia and Ukraine and in the Middle East, could adversely affect demand for our products.
Recessionary economic cycles, global supply chain disruptions, higher logistics costs, high interest rates, inflation, higher raw materials costs, higher labor costs, trade barriers in the world markets, financial turmoil related to sovereign debt and changes in tax laws or trade laws or other economic factors and other challenges affecting the countries and industries in which we do business, including, but not limited to, geopolitical conflicts, could adversely affect demand for our products.
Our current operational cash flow is sufficient to fund our acquisition plans, but a significant acquisition could require access to the capital markets. 8 Table of Contents ​ Additionally, from time to time, we may identify assets for strategic divestitures that would increase capital resources available for other activities and create organizational and operational efficiencies.
Our current operational cash flow is sufficient to fund our acquisition plans, but a significant acquisition could require access to the capital markets. Additionally, we may identify assets for strategic divestitures that would increase capital resources available for other activities and create organizational and operational efficiencies.
In certain 10 Table of Contents ​ cases, we design automated welding systems for use in a customer’s production facilities (including automotive production facilities), which could expose us to financial losses or professional liability.
In certain cases, we design automated welding systems for use in a customer’s production facilities (including automotive production facilities), which could expose us to financial losses or professional liability.
They are also influenced by import duties and tariffs speculative action, world supply and demand balances, inventory levels, availability of substitute materials, currency exchange rates, anticipated or perceived shortages, government trade practices and regulations and other factors.
They are also influenced by import duties and tariff actions, world supply and demand balances, inventory levels, availability of substitute materials, currency exchange rates, anticipated or perceived shortages, government trade practices and regulations and other factors.
There are a number of risks in doing business internationally, which may impede our ability to achieve our strategic objectives relating to our foreign operations, including: ● Political and economic uncertainty and social turmoil; ● Corporate governance and management challenges in consideration of the numerous U.S. and foreign laws and regulations, including regulations relating to import-export control, technology transfer restrictions, repatriation of earnings and funds, exchange controls, labor regulations, nationalization, tariffs, data protection and privacy requirements, anti-boycott provisions and anti-bribery laws (such as the Foreign Corrupt Practices Act and the Organization for Economic Co-operation and Development Convention); ● International terrorism and hostilities; ● Changes in the global regulatory environment, including revised or newly created laws, regulations or standards relating to the Company, our products or the markets in which we operate; and ● Significant fluctuations in relative currency values; in particular, an increase in the value of the U.S. dollar against foreign currencies could have an adverse effect on our profitability and financial condition, as well as the imposition of exchange controls, currency devaluations and hyperinflation.
There are a number of risks in doing business internationally, which may impede our ability to achieve our strategic objectives relating to our foreign operations, including: ● Political and economic uncertainty and social turmoil; ● Corporate governance and management challenges in consideration of the numerous U.S. and foreign laws and regulations, including regulations relating to import-export control, technology transfer restrictions, repatriation of earnings and funds, exchange controls, labor regulations, nationalization, changes in tariffs and trade policies, data protection and privacy requirements, anti-boycott provisions and anti-bribery laws (such as the Foreign Corrupt Practices Act and the Organization for Economic Co-operation and Development Convention); ● International terrorism and hostilities; ● Changes in the global regulatory environment, including revised or new laws, regulations or standards relating to the Company, our products or the markets in which we operate; and ● Significant fluctuations in relative currency values; in particular, an increase in the value of the U.S. dollar against foreign currencies could have an adverse effect on our profitability and financial condition, as well as the imposition of exchange controls, currency devaluations and hyperinflation. 6 Table of Contents ​ The cyclical nature and maturity of the arc welding and cutting industry in developed markets may adversely affect our performance.
Increases in the cost of raw materials and components may adversely affect our profitability if we are unable to pass these cost increases along to our customers or reduce our cost of goods sold.
Increases in the cost of raw materials and components, including as a result of tariffs, may adversely affect our profitability if we are unable to pass these cost increases along to our customers or reduce our cost of goods sold.
As a result of these actions, we will likely continue to incur charges, which may include but are not limited to asset impairments, employee severance costs, charges for pension and other postretirement contractual benefits and pension settlements, any of which could be significant, and could adversely affect our financial condition and results of operations.
These actions may reduce our profitability in the periods incurred and we will likely continue to incur charges, which may include but are not limited to asset impairments, employee severance costs, charges for pension and other post-retirement contractual benefits and pension settlements, any of which could be significant, and could adversely affect our financial condition and results of operations.
We also face increasing complexity in our products design and procurement operations as we adjust to new and future requirements relating to the design, production and labeling of our products that are sold worldwide in multiple jurisdictions. The ultimate costs under environmental laws and the timing of these costs are difficult to predict.
We also face increasing complexity in our products design and procurement operations as we adjust to new and future requirements relating to the design, production and labeling of our products that are sold worldwide in multiple jurisdictions.
We cannot be certain that we will be successful in pursuing potential acquisition candidates or that the consequences of any acquisition would be beneficial to us. Future acquisitions may expose us to unexpected liabilities and involve the expenditure of significant funds and management time.
Part of our business strategy is to pursue targeted business acquisition opportunities, including foreign investment opportunities. We cannot be certain that we will be successful in pursuing potential acquisition candidates or that the consequences of any acquisition would be beneficial to us. Future acquisitions may expose us to unexpected liabilities and involve the expenditure of significant funds and management time.
The cyclical nature and maturity of the arc welding and cutting industry in developed markets may adversely affect our performance. The arc welding and cutting industry is generally a mature industry in developed markets such as North America and Western Europe and is cyclical in nature.
The arc welding and cutting industry is generally a mature industry in developed markets, such as North America and Western Europe, and is cyclical in nature.
With our strategy to expand internationally into developing markets, we may incur additional risks as some developing economies lack a sufficiently trained labor pool.
With our strategy to continue expanding internationally into developing markets, we may encounter additional risks as certain developing economies lack a sufficiently trained labor pool.
We are subject to risks relating to our information systems and data. The conduct and management of our business relies extensively on information systems, which contain confidential information related to our customers, suppliers and employees and other proprietary business information.
We are subject to risks relating to our information systems and data that could have an adverse effect on our business strategy, results of operations and financial condition. ​ The conduct and management of our business relies extensively on information systems, which contain confidential information related to our customers, suppliers and employees and other proprietary business information.
Our effective tax rate could be adversely affected by changes in the mix among earnings in countries with differing statutory tax rates, changes in the valuation allowances of deferred tax assets or changes in tax laws. In addition, there is uncertainty in changes to the U.S. tax rate due to the new U.S. presidential administration.
Our effective tax rate could be adversely affected by changes in the mix among earnings in countries with differing statutory tax rates, changes in the valuation allowances of deferred tax assets or changes in tax laws.
We have previously initiated, and may initiate in the future, significant rationalization activities to align our business with market conditions and improve our overall competitiveness, including with respect to the integration of acquired businesses. Such rationalization activities could fail to deliver the desired competitive cost structure and could result in disruptions in customer service.
We have previously initiated, and may initiate in the future, significant rationalization activities to align our business with market conditions and improve our overall competitiveness, including with respect to the integration of acquired businesses.
If our products, services, support and cost structure do not enable us to compete successfully based on any of the criteria listed above, our revenue, results of operations and prospects could suffer.
Additionally, the emergence of AI-enabled robotic solutions has increased the competitive pressure on our automation business. If our products, services, support and cost structure do not enable us to compete successfully based on any of the criteria listed above, our revenue, results of operations and prospects could suffer.
There can be no assurance that changes in tax laws or regulations, both within the United States and the various foreign jurisdictions in which we operate, such as the 15% global minimum tax under The Organization for Economic Co-operation and Development (the “OECD”) Pillar Two, Global Anti-Base Erosion Rules (the “Pillar Two Rules”), will not materially and adversely affect our effective tax rate, tax payments, financial condition and results of operations.
There can be no assurance that changes in tax laws or regulations, both within the United States and the various foreign jurisdictions in which we operate, such as the 15% global minimum tax under The Organization for Economic Co-operation and Development Pillar Two, Global Anti-Base Erosion Rules will not materially and adversely affect our effective tax rate, tax payments, financial condition and results of operations. ​ The amount of income taxes paid by the Company, including its subsidiaries, is subject to ongoing audits by the U.S. federal, state and local tax authorities and by foreign tax authorities, as applicable.
Our operating results are sensitive to changes in general economic conditions.
Our operating results are sensitive to changes in general economic conditions and an adverse change in demand.
We cannot predict what further action may be taken with respect to tariffs or trade relations between the United States and other governments.
We cannot predict what further action may be taken with respect to tariffs or trade relations between the United States and other governments. The U.S. presidential administration has imposed tariffs on foreign imports into the United States and, in response, many foreign countries have implemented or increased tariffs on imports into their countries.
Any interruption of our workforce, including rationalization efforts related to the integration of acquired businesses, interruptions due to unionization efforts, changes in labor relations or shortages of appropriately skilled individuals could impact our results of operations and financial condition.
Any interruption of our workforce, including rationalization efforts related to the integration of acquired businesses, interruptions due to unionization efforts, changes in labor relations or shortages of appropriately skilled individuals could impact our results of operations and financial condition. 8 Table of Contents ​ Risks Related to Business Strategy We may not be able to complete our acquisition or divestiture strategies, successfully integrate acquired businesses and, in certain cases, we may be required to retain liabilities for certain matters relating to divestitures.
Any further changes in the United States or international trade policy could have an adverse impact on our business. ​ We conduct our sales and distribution operations on a worldwide basis and maintain manufacturing facilities in a number of foreign countries, which subjects us to risks associated with doing business outside the United States.
While we cannot predict the ultimate impact on our business and potential additional U.S. tariffs and retaliatory actions by other countries remain unknown, the impacts could adversely affect our financial condition, results of operations and access to capital markets. ​ We conduct our sales and distribution operations on a worldwide basis and maintain manufacturing facilities in a number of foreign countries, which subjects us to risks associated with doing business outside the United States.
Cybersecurity threat actors also may attempt to exploit vulnerabilities in software that is commonly used by companies in cloud-based services and bundled software. To date, no such cybersecurity incidents have had a material impact on our business or operations.
To date, no such cybersecurity incidents have had a material impact on our business or operations.
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Risks Related to Business Strategy We may not be able to complete our acquisition or divestiture strategies, successfully integrate acquired businesses and, in certain cases, we may be required to retain liabilities for certain matters. Part of our business strategy is to pursue targeted business acquisition opportunities, including foreign investment opportunities.
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We have taken actions to address the impact of these initial trade policies and will continue to monitor evolving trade negotiations to determine if additional measures are warranted, although these actions may not be successful.
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We may take additional actions in the future to further optimize our cost structure and improve the efficiency of our operations, which will reduce our profitability in the periods incurred.
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Cybersecurity threat actors also may attempt to 7 Table of Contents ​ exploit vulnerabilities in software that is commonly used by companies in cloud-based services and bundled software. In addition, the rapid evolution and increased adoption of artificial intelligence (“AI”) technologies may increase our cybersecurity risks and the cybersecurity risks of our third-party business partners.
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Evolving international laws and enforcement relating to data privacy could adversely affect our operations.
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The ultimate costs under environmental laws and the timing of these costs are difficult to predict. 12 Table of Contents ​ As a provider of products to the U.S. government, we are subject to additional risks related to unusual performance conditions and enhanced compliance risks, which could have an adverse effect our results of operations and financial condition.
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Our business with the U.S. government subjects us to unusual risks, including compliance with and changes in governmental acquisition regulations. Our agreements relating to the sale of products to government entities may be subject to termination, reduction or modification, either at the convenience of the government or for our failure to perform, or other unsatisfactory performance under the applicable contract.
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We are subject to government investigations of our business practices and compliance with government acquisition regulations.
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If the Company were charged with wrongdoing as a result of any such investigation, it could be suspended from bidding on or receiving awards of new government contracts, and we could be subject to fines or penalties associated with contract non-compliance or resulting from such investigations, which could have an adverse effect on our results of operations and financial condition.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe purpose of this committee is to inform and make strategic decisions on IT-related matters, including the prevention, detection, mitigation and remediation of cybersecurity incidents. In addition, the CIO regularly reviews key cybersecurity risk metrics and reporting designed to measure the effectiveness of related processes and procedures as part of quarterly updates to the Audit Committee.
Biggest changeIn addition, the CDIO regularly reviews key cybersecurity risk metrics and reporting designed to measure the effectiveness of related processes and procedures as part of quarterly updates to the Audit Committee. The CDIO utilizes this information in her reporting to the Board and Audit Committee of the Board. ​ 14 Table of Contents ​
Risk Factors. ​ Governance ​ Our Board oversees the management of our risks, including risks from cybersecurity threats, on an enterprise-wide basis, and the Lead Independent Director promotes our Board’s engagement in this process. Our Board has delegated oversight of the risk assessment and mitigation process with respect to cybersecurity to the Audit Committee of our Board.
Risk Factors. ​ Governance ​ The Board oversees the management of our risks, including risks from cybersecurity threats, on an enterprise-wide basis, and the Lead Independent Director promotes our Board’s engagement in this process. The Board has delegated oversight of the risk assessment and mitigation process with respect to cybersecurity to the Audit Committee of the Board.
We conduct third-party and internal assessments of our environments, including system penetration testing, test our recovery and response processes, and we consider industry standards when developing our information security program.
We conduct third-party and internal assessments of our information technology environments, including system penetration testing, test our recovery and response processes, and we consider industry standards when developing our information security program.
However, if as a result of any future incidents our systems are significantly damaged, cease to function properly or are subject to a significant cybersecurity incident, we may suffer an interruption in our ability to manage and operate the business, and our results of operations and financial condition could be adversely affected.
However, if as a result of any future incidents our systems are significantly damaged, cease to function properly or are subject to a significant cybersecurity incident, including those involving AI systems, we may suffer an interruption in our ability to manage and operate the business, and our results of operations and financial condition could be adversely affected.
The Audit Committee regularly monitors the Company’s cybersecurity risks and receives updates from the Chief Information Officer (“CIO”) at each meeting. In addition, the Audit Committee regularly reviews the overall effectiveness of the information technology security environment as part of quarterly updates provided by the CIO. The CIO reports to the full Board about cybersecurity on an annual basis.
The Audit Committee regularly monitors the Company’s cybersecurity risks and receives updates from the Chief Digital Information Officer (“CDIO”) at each meeting. In addition, the Audit Committee regularly reviews the overall effectiveness of the information technology security environment as part of quarterly updates provided by the CDIO.
Our CIO has over 25 years of experience in the Information Technology (“IT”) and cybersecurity industry. The CIO is responsible for assessing and managing material risks from cybersecurity threats, including monitoring the prevention, detection, mitigation and remediation of cybersecurity incidents. On at least a quarterly basis, the CIO chairs the IT Governance Committee, which includes the executive management team.
The CDIO reports to the full Board about cybersecurity on an annual basis. ​ Our CDIO has over 25 years of experience in the Information Technology (“IT”) and cybersecurity industry. The CDIO is responsible for assessing and managing material risks from cybersecurity threats, including monitoring the prevention, detection, mitigation and remediation of cybersecurity incidents.
Like many companies, our systems and those of our third party providers who provide us with services and products may be subject to cybersecurity threats and cybersecurity incidents. To date, no such cybersecurity incidents have had or are reasonably likely to have a material impact on our Company, including its business strategy, results of operations or financial condition.
Like many companies, our systems and those of our third party providers who provide us with services and products may be subject to cybersecurity threats and cybersecurity incidents, including those arising from the use of AI 13 Table of Contents ​ technologies.
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The CIO utilizes this information in her reporting to the Board and Audit Committee of the Board. ​ 13 Table of Contents ​
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AI-driven tools, whether deployed internally or by third parties, can introduce new vulnerabilities such as adversarial attacks, data poisoning, or unintended behaviors in automated decision-making systems. To date, no such cybersecurity incidents have had or are reasonably likely to have a material impact on our Company, including its business strategy, results of operations or financial condition.
Added
On at least a quarterly basis, the CDIO chairs a meeting of the IT Governance Committee, which includes the executive management team. The purpose of this committee is to inform and make strategic decisions on IT-related matters, including the prevention, detection, mitigation and remediation of cybersecurity incidents.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn May 2024, the Company disposed of its Russian entity and completed its exit from the Russian market. In addition, the Company maintains operating leases for some manufacturing facilities, distribution centers and sales offices throughout the world. Refer to Note 17 to the consolidated financial statements for information regarding the Company’s lease commitments. ​ 15 Table of Contents ​
Biggest changeIn addition, the Company maintains operating leases for some manufacturing facilities, distribution centers and sales offices throughout the world. Refer to Note 17 to the consolidated financial statements for information regarding the Company’s lease commitments. ​ 16 Table of Contents ​
Poland ​ Bielawa; Dzierzoniow. Romania ​ Buzau. South Korea ​ Siheung-si. Spain ​ Valencia; Zaragoza. Turkey ​ Istanbul. United Kingdom ​ Sheffield, England; Port Talbot, Wales. The Harris Products Group: ​ ​ United States ​ Mason, Ohio; Gainesville, Georgia; Winston Salem, North Carolina; Gordonsville, and Carthage, Tennessee. Brazil ​ Maua. Italy ​ Verona. Mexico ​ Guadalupe. Poland ​ Dzierzoniow.
Poland ​ Bielawa; Dzierzoniow. Romania ​ Buzau. South Korea ​ Siheung-si. Spain ​ Valencia; Zaragoza. Turkey ​ Istanbul. United Kingdom ​ Sheffield, England; Port Talbot, Wales. The Harris Products Group: ​ ​ United States ​ Mason, Ohio; Gainesville, Georgia; Winston Salem, North Carolina; Gordonsville, and Carthage, Tennessee. Brazil ​ Maua. Italy ​ Rivoli Veronese. Mexico ​ Guadalupe. Poland ​ Dzierzoniow.
Brazil ​ Atibaia; Guarulhos; Caxias do Sul. Canada ​ Toronto; Mississauga; Hamilton; Montreal. Colombia ​ Bogota. ​ Mexico ​ Mexico City; Torreon; Saltillo. International Welding: ​ ​ Australia ​ Newcastle; Gladstone. Austria ​ Scheifling. China ​ Tangshan; Shanghai; Beijing. ​ ​ Denmark ​ Odense. France ​ Partheny. Germany ​ Essen; Eisenberg; Frankfurt; Saarbrücken. India ​ Chennai; Pune. Italy ​ Corsalone.
Brazil ​ Atibaia; Guarulhos; Caxias do Sul. Canada ​ Toronto; Mississauga; Hamilton; Montreal. Colombia ​ Bogota. ​ Mexico ​ Mexico City; Torreon; Saltillo. International Welding: ​ ​ Australia ​ Gladstone; Newcastle; Perth. Austria ​ Scheifling. China ​ Tangshan; Shanghai; Beijing. ​ ​ Denmark ​ Odense. France ​ Parthenay. Germany ​ Essen; Eisenberg; Saarbrücken. India ​ Chennai; Pune. Italy ​ Corsalone.
Total Cleveland area property consists of 244 acres, of which present manufacturing facilities comprise an area of approximately 3,017,090 square feet. 14 Table of Contents ​ The Company has 71 manufacturing and automation system integration facilities, including operations and joint ventures across 20 countries, the significant locations (grouped by operating segment) of which are as follows: ​ ​ ​ ​ Americas Welding: ​ United States ​ Cleveland, Columbus, Coldwater, Fort Loramie, and Orrville, Ohio; Reno, Nevada; Ladson, South Carolina; Chattanooga, Tennessee; Detroit, and Plymouth, Michigan; Fort Collins, Colorado; Bettendorf, Iowa; Michigan City, Indiana.
Total Cleveland area property consists of 250 acres, of which present manufacturing facilities comprise an area of approximately 3,092,666 square feet. 15 Table of Contents ​ The Company has 71 manufacturing and automation system integration facilities, including operations and joint ventures across 20 countries, the significant locations (grouped by reportable segment) are as follows: ​ ​ ​ ​ Americas Welding: ​ ​ ​ ​ United States ​ Cleveland, Columbus, Coldwater, Fort Loramie, and Orrville, Ohio; Reno, Nevada; Ladson, South Carolina; Chattanooga, Tennessee; Detroit, and Plymouth, Michigan; Fort Collins, Colorado; Bettendorf, Iowa; Michigan City, Indiana.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAs of December 31, 2024, the Company was a co-defendant in cases alleging asbestos induced illness involving claims by approximately 1,300 plaintiffs, which is a net decrease of 41 claims from those previously reported. In each instance, the Company is one of a large number of defendants.
Biggest changeAs of December 31, 2025, the Company was a co-defendant in cases alleging asbestos induced illness involving claims by approximately 1,126 plaintiffs, which is a net decrease of 107 claims from those previously reported. In each instance, the Company is one of a large number of defendants.
Since January 1, 1995, the Company has been a co-defendant in asbestos cases that have been resolved as follows: 57,080 of those claims were dismissed, 23 were tried to defense verdicts, 7 were tried to plaintiff verdicts (which were reversed or resolved after appeal), 1 was resolved by agreement for an immaterial amount and 1,018 were decided in favor of the Company following summary judgment motions. ​
Since January 1, 1995, the Company has been a co-defendant in asbestos cases that have been resolved as follows: 57,272 of those claims were dismissed, 23 were tried to defense verdicts, 7 were tried to plaintiff verdicts (which were reversed or resolved after appeal), 1 was resolved by agreement for an immaterial amount and 1,023 were decided in favor of the Company following summary judgment motions. ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer purchases of equity securities for the fourth quarter 2024 were: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of Shares ​ Maximum Number ​ ​ ​ ​ ​ ​ ​ Purchased ​ of Shares that May ​ ​ Total Number of ​ ​ ​ ​ as Part of Publicly ​ Yet be Purchased ​ ​ Shares ​ Average Price ​ Announced Plans or ​ Under the Plans Period ​ Purchased ​ Paid Per Share ​ Programs ​ or Programs (2) October 1 - 31, 2024 96,952 (1) ​ $ 193.69 94,974 6,835,014 November 1 - 30, 2024 77,126 (1) ​ 209.68 76,266 6,758,748 December 1 - 31, 2024 79,534 (1) ​ 203.63 76,639 6,682,109 Total 253,612 ​ 192.84 247,879 ​ (1) The above share repurchases include the surrender of the Company’s common shares in connection with the vesting of restricted awards.
Biggest changeIssuer purchases of equity securities for the fourth quarter 2025 were: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares ​ Maximum Number ​ ​ ​ ​ ​ ​ ​ Purchased ​ of Shares that May ​ ​ Total Number of ​ ​ ​ ​ as Part of Publicly ​ Yet be Purchased ​ ​ Shares ​ Average Price ​ Announced Plans or ​ Under the Plans Period ​ Purchased ​ Paid Per Share ​ Programs ​ or Programs (2) October 1 - 31, 2025 ​ 79,732 (1) ​ ​ $ 237.44 ​ 77,458 ​ 5,230,495 November 1 - 30, 2025 ​ 20,299 (1) ​ ​ 229.13 ​ 20,293 ​ 5,210,202 December 1 - 31, 2025 ​ 117,121 (1) ​ ​ 237.46 ​ 113,571 ​ 5,096,631 Total 217,152 ​ 236.67 211,322 ​ ​ (1) The above share repurchases include the surrender of the Company’s common shares in connection with the vesting of restricted awards.
This graph assumes that $100 was invested on December 31, 2019 in each of the Company’s common shares, the S&P 500 and the S&P 400.
This graph assumes that $100 was invested on December 31, 2020 in each of the Company’s common shares, the S&P 500 and the S&P 400.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s common shares are traded on The NASDAQ Global Select Market under the symbol "LECO." The number of record holders of common shares at January 31, 2025 was 2,189.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s common shares are traded on The NASDAQ Global Select Market under the symbol "LECO." The number of record holders of common shares at January 31, 2026 was 2,081.
Total shares purchased through the share repurchase program were 3.3 million shares at a total cost of $584.5 million for a weighted average cost of $176.18 per share through December 31, 2024. 16 Table of Contents ​ The following line graph compares the yearly percentage change in the cumulative total shareholder return on the Company’s common stock against the cumulative total return of the S&P Composite 500 Stock Index ("S&P 500") and the S&P 400 MidCap Index ("S&P 400") for the five-year calendar period commencing January 1, 2020 and ending December 31, 2024.
Total shares purchased through the share repurchase program were 4.9 million shares at a total cost of $912.1 million for a weighted average cost of $186.01 per share through December 31, 2025. 17 Table of Contents ​ The following line graph compares the yearly percentage change in the cumulative total shareholder return on the Company’s common stock against the cumulative total return of the S&P Composite 500 Stock Index ("S&P 500") and the S&P 400 MidCap Index ("S&P 400") for the five-year calendar period commencing January 1, 2021 and ending December 31, 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest change(3) Costs related to acquisitions which are included in Cost of goods sold. 23 Table of Contents ​ The following table presents the reconciliations of Net income as reported to Adjusted net income and Adjusted EBIT, Effective tax rate as reported to Adjusted effective tax rate and Diluted earnings per share as reported to Adjusted diluted earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 Net income as reported ​ $ 466,108 $ 545,248 ​ Special items: ​ ​ ​ Rationalization and asset impairment net charges (1) ​ 55,860 (11,314) ​ Acquisition transaction costs (2) ​ 7,042 — ​ Pension settlement net charges (3) ​ 3,792 845 ​ Amortization of step up in value of acquired inventories (4) ​ 5,026 12,252 ​ Loss (gain) on asset disposal (5) ​ 4,950 (1,646) ​ Tax effect of Special items (6) ​ (11,513) 2,537 ​ Adjusted net income ​ $ 531,265 $ 547,922 ​ Interest expense, net ​ 42,786 44,371 ​ Income taxes as reported ​ 128,041 141,618 ​ Tax effect of Special items (6) ​ 11,513 (2,537) ​ Adjusted EBIT ​ $ 713,605 $ 731,374 ​ Effective tax rate as reported ​ 21.6 % 20.6 % Net special item tax impact ​ (0.8) % (0.4) % Adjusted effective tax rate ​ 20.8 % 20.2 % Diluted earnings per share as reported ​ $ 8.15 $ 9.37 ​ Special items per share ​ 1.14 0.04 ​ Adjusted diluted earnings per share ​ $ 9.29 $ 9.41 ​ ​ (1) Items in 2024 primarily relate to rationalization plans initiated in the third quarter of 2024 in all three segments, as well as previously initiated plans and the disposition of the Company’s Russian entity in International Welding .
Biggest changeFrom time to time, management evaluates and discloses to investors the following non-GAAP measures: Free cash flow ("FCF"), defined as Net cash provided by operating activities less Capital expenditures (the Company considers FCF to be a liquidity measure that provides useful information to management and investors about how the amount of cash generated by our business, after the purchase of property and equipment, can be used for debt service, acquisitions, paying dividends and repurchasing our common shares); Cash conversion, defined as FCF divided by Adjusted net income; Organic sales, reflects changes in volumes and prices, and excludes the effects of foreign currency and acquisitions. 24 Table of Contents ​ The following table presents the reconciliations of Operating income as reported to Adjusted operating income, Net income as reported to Adjusted net income and Adjusted EBIT, Effective tax rate as reported to Adjusted effective tax rate and Diluted earnings per share as reported to Adjusted diluted earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Operating income as reported ​ $ 718,059 ​ $ 636,462 ​ Special items (pre-tax): ​ ​ ​ ​ ​ Rationalization and asset impairment net charges (1) ​ 18,199 ​ 55,860 ​ Acquisition transaction costs (2) ​ 2,739 ​ 7,042 ​ Amortization of step up in value of acquired inventories (3) ​ 3,964 ​ 5,026 ​ Adjusted operating income ​ $ 742,961 ​ $ 704,390 ​ As a percentage of net sales ​ ​ 17.6% ​ ​ 17.6% ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income as reported ​ $ 520,533 ​ $ 466,108 ​ Special items: ​ ​ ​ ​ ​ ​ Rationalization and asset impairment net charges (1) ​ 18,199 ​ ​ 55,860 ​ Acquisition transaction costs (2) ​ 2,739 ​ ​ 7,042 ​ Amortization of step up in value of acquired inventories (3) ​ 3,964 ​ ​ 5,026 ​ Pension settlement net charges (4) ​ 719 ​ ​ 3,792 ​ Loss on asset disposal (5) ​ — ​ ​ 4,950 ​ Tax effect of Special items (6) (7) ​ 5,177 ​ ​ (11,513) ​ Adjusted net income ​ ​ 551,331 ​ ​ 531,265 ​ Interest expense, net ​ 51,561 ​ ​ 42,786 ​ Income taxes as reported ​ 154,917 ​ ​ 128,041 ​ Tax effect of Special items (6) (7) ​ (5,177) ​ ​ 11,513 ​ Adjusted EBIT ​ $ 752,632 ​ $ 713,605 ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective tax rate as reported ​ 22.9 % ​ 21.6 % Net special item tax impact (7) ​ (1.5) % ​ (0.8) % Adjusted effective tax rate ​ 21.4 % ​ 20.8 % ​ ​ ​ ​ ​ ​ ​ ​ Diluted earnings per share as reported ​ $ 9.32 ​ $ 8.15 ​ Special items per share ​ 0.55 ​ ​ 1.14 ​ Adjusted diluted earnings per share ​ $ 9.87 ​ $ 9.29 ​ ​ (1) 2025 and 2024 net charges primarily relate to rationalization plans within all three segments.
EBIT is defined as Operating income plus Other income. 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.
Adjusted EBIT is defined as Operating income plus Other income, 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.
Key financial measures utilized by the Company’s executive management and operating units in order to evaluate the results of its business and in understanding key variables impacting the current and future results of the Company include: sales; gross profit; selling, general and administrative expenses; operating income; earnings before interest and taxes; earnings before interest, taxes and bonus; net income; adjusted operating income; adjusted earnings before interest and income taxes; adjusted earnings before interest, taxes and bonus; adjusted net income; adjusted diluted earnings per share; operating cash flows; and capital expenditures, as well as applicable ratios such as return on invested capital, adjusted return on invested capital and average operating working capital to sales.
Key financial measures utilized by the Company’s executive management and operating units in order to evaluate the results of its business and in understanding key variables impacting the current and future results of the Company include: sales; gross profit; selling, general and administrative expenses; operating income; earnings before interest and taxes; net income; adjusted operating income; adjusted earnings before interest and income taxes; adjusted net income; adjusted diluted earnings per share; operating cash flows; and capital expenditures, as well as applicable ratios such as return on invested capital, adjusted return on invested capital and average operating working capital to sales.
The Company has, through wholly-owned subsidiaries, manufacturing facilities located in the United States, Australia, Austria, Brazil, Canada, China, Colombia, Denmark, France, Germany, India, Italy, Mexico, Poland, Portugal, Romania, South Korea, Spain, Turkey and the United Kingdom.
The Company has, through wholly owned subsidiaries, manufacturing and automation facilities located in the United States, Australia, Austria, Brazil, Canada, China, Colombia, Denmark, France, Germany, India, Italy, Mexico, Poland, Portugal, Romania, South Korea, Spain, Turkey and the United Kingdom.
These measures are reviewed at monthly, quarterly and annual intervals and are compared with historical periods, as well as objectives established by the Board of the Company. ​ The discussion that follows includes a comparison of our results of operations, liquidity and capital resources for fiscal years ended December 31, 2024 and 2023.
These measures are reviewed at monthly, quarterly and annual intervals and are compared with historical periods, as well as objectives established by the Board of the Company. ​ The discussion that follows includes a comparison of our results of operations, liquidity and capital resources for fiscal years ended December 31, 2025 and 2024.
To date, compliance with these environmental regulations has not had a material adverse effect on the Company’s earnings. The Company is ISO 14001 certified at most significant manufacturing facilities in North America and Europe and is progressing towards certification at its remaining facilities worldwide. In addition, the Company is ISO 9001 certified at 47 facilities worldwide.
To date, compliance with these environmental regulations has not had a material adverse effect on the Company’s earnings. The Company is ISO 14001 certified at most significant manufacturing facilities in North America and Europe and is progressing towards certification at its remaining facilities worldwide. In addition, the Company is ISO 9001 certified at 49 facilities worldwide.
The Company can fund its global expansion plans with operational cash flow, but a significant acquisition may require access to capital markets, in particular, the long-term debt market, as well as the syndicated bank loan market. The Company’s financing strategy is to fund itself at the lowest after-tax cost of funding.
The Company can fund its global expansion plans with operational cash flow, but a significant acquisition may require access to capital markets, particularly the long-term debt market, as well as the syndicated bank loan market. The Company’s financing strategy is to fund itself at the lowest after-tax cost of funding.
Changes in economic and operating conditions, actual growth below the assumed market participant assumptions or an increase in the discount rate could result in an impairment charge in a future period. Acquisitions Upon acquisition of a business, the Company uses the income, market or cost approach (or a combination thereof) for the valuation as appropriate.
Changes in economic and operating conditions, actual growth below the assumed market participant assumptions or an increase in the discount rate could result in an impairment charge in a future period. 31 Table of Contents ​ Acquisitions Upon acquisition of a business, the Company uses the income, market or cost approach (or a combination thereof) for the valuation as appropriate.
The Company’s products support our customers' sustainable operations through enhanced worker safety, reduced emissions, improved energy efficiency, reduced waste and regulatory compliance. Key Indicators Key economic measures relevant to the Company include industrial production trends, steel consumption, purchasing manager indices, capacity utilization within durable goods manufacturers and consumer confidence indicators.
The Company’s products support our customers' sustainable operations through enhanced worker safety, reduced emissions, improved energy efficiency, reduced waste and regulatory compliance. 19 Table of Contents ​ Key Indicators Key economic measures relevant to the Company include industrial production trends, steel consumption, purchasing manager indices, capacity utilization within durable goods manufacturers and consumer confidence indicators.
Key 18 Table of Contents ​ industries which provide a relative indication of demand drivers to the Company include steel, farm machinery and equipment, construction and transportation, fabricated metals, electrical equipment, ship and boat building, defense, truck manufacturing, energy and railroad equipment.
Key industries which provide a relative indication of demand drivers to the Company include steel, farm machinery and equipment, construction and transportation, fabricated metals, electrical equipment, ship and boat building, defense, truck manufacturing, energy and railroad equipment.
For a comparison of the Company’s results of operations, liquidity and capital resources for the fiscal years ended December 31, 2023 and 2022, see “Item 7.
For a comparison of the Company’s results of operations, liquidity and capital resources for the fiscal years ended December 31, 2024 and 2023, see “Item 7.
Fixed manufacturing overhead costs are allocated to inventory based on normal production capacity and abnormal manufacturing costs are recognized as period costs. Cost for a substantial portion of U.S. inventories is determined on a LIFO basis. LIFO was used for 35% and 37% of total inventories at December 31, 2024 and 2023, respectively.
Fixed manufacturing overhead costs are allocated to inventory based on normal production capacity and abnormal manufacturing costs are recognized as period costs. Cost for a substantial portion of U.S. inventories is determined on a LIFO basis. LIFO was used for 38% and 35% of total inventories at December 31, 2025 and 2024, respectively.
Fair values are determined using established business valuation techniques and models developed by the Company, estimates of market participant assumptions of future cash flows, future growth rates and discount rates to value 30 Table of Contents ​ estimated cash flows.
Fair values are determined using established business valuation techniques and models developed by the Company, estimates of market participant assumptions of future cash flows, future growth rates and discount rates to value estimated cash flows.
If warranted, these estimates and assumptions may be changed as current trends are assessed and updated. Historically, the Company’s estimates have been determined to be reasonable. No material changes to the Company’s 28 Table of Contents ​ accounting policies were made during 2024.
If warranted, these estimates and assumptions may be changed as current trends are assessed and updated. 29 Table of Contents ​ Historically, the Company’s estimates have been determined to be reasonable. No material changes to the Company’s accounting policies were made during 2025.
The principal raw materials essential to the Company’s business are steel, electronic components, engines, brass, copper, silver, aluminum alloys, robotic components and various chemicals, all of which are normally available for purchase in the open market. The Company’s facilities are subject to environmental regulations.
The principal raw materials essential to the Company’s business are steel, electronic components, engines, brass, copper, silver, aluminum alloys, robotic components and various chemicals, all of which are normally available for purchase in the open market.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 27, 2024.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 25, 2025.
(6) 2024 excludes Rationalization and asset impairment net charges of $3,955 as discussed in Note 7. (7) 2024 excludes acquisition transaction costs of $7,042 as discussed in Note 4. (8) See non-GAAP Financial Measures for a reconciliation of Net income as reported and Adjusted EBIT.
(6) 2025 excludes Rationalization and asset impairment net charges of $1,068. 2024 excludes Rationalization and asset impairment net charges of $3,955. (7) 2025 excludes acquisition transaction costs of $2,401 as discussed in Note 4. 2024 excludes acquisition transaction costs of $7,042. (8) See non-GAAP Financial Measures for a reconciliation of Net income as reported and Adjusted EBIT.
Stock Repurchase Program On February 12, 2020, the Company’s Board authorized a share repurchase program for up to 10 million shares of the Company’s common stock. As of December 31, 2024, there were 6.7 million shares available under the authorization. The Company is not obligated to make any repurchases.
Stock Repurchase Program On February 12, 2020, the Company’s Board authorized a share repurchase program for up to 10 million shares of the Company’s common stock. As of December 31, 2025, there were 5.1 million shares available under the authorization. The Company is not obligated to make any repurchases.
At December 31, 2024, the Company had approximately $207,739 of gross deferred tax assets related to deductible temporary differences and tax loss and credit carry-forwards, which may reduce taxable income in future years.
At December 31, 2025, the Company had approximately $116,893 of gross deferred tax assets related to deductible temporary differences and tax loss and credit carry-forwards, which may reduce taxable income in future years.
The Company invests in the research and development of arc welding products in order to continue its market leading product offering and improve the quality and productivity of welding applications. In addition, the Company actively protects its innovations with patents and trade secrets globally.
The Company invests in the research and development of its solutions in order to continue its market leading product offering and improve the quality, productivity and sustainability of its solutions. In addition, the Company actively protects its innovations with patents and trade secrets globally.
At December 31, 2024, a valuation allowance of $35,284 was recorded against certain deferred tax assets based on this assessment. The 29 Table of Contents ​ Company believes it is more-likely-than-not that the tax benefit of the remaining net deferred tax assets will be realized.
At December 31, 2025, 30 Table of Contents ​ a valuation allowance of $4,802 was recorded against certain deferred tax assets based on this assessment. The Company believes it is more-likely-than-not that the tax benefit of the remaining net deferred tax assets will be realized.
Non-GAAP Financial Measures The Company reviews Adjusted operating income, Adjusted EBIT, Adjusted net income, adjusted effective tax rate, Adjusted diluted earnings per share, Adjusted return on invested capital, and Adjusted net operating profit after taxes, all non-GAAP financial measures, in assessing and evaluating the Company’s underlying operating performance.
Non-GAAP Financial Measures The Company reviews Adjusted operating income, Adjusted net income, Adjusted EBIT, Adjusted effective tax rate, Adjusted diluted earnings per share, Adjusted return on invested capital (“Adjusted ROIC”) , Adjusted net operating profit after taxes, Free cash flow, Cash conversion and Organic sales, all non-GAAP financial measures, in assessing and evaluating the Company’s underlying operating performance.
Working Capital Ratios ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Average operating working capital to Net sales (1) 16.9 % 17.1 % Days sales in Inventories 106.0 104.6 ​ Days sales in Accounts receivable 46.9 50.0 ​ Average days in Trade accounts payable 45.8 47.6 ​ ​ (1) Average operating working capital to Net sales is defined as the sum of Accounts receivable, Inventories and contract assets less Trade accounts payable and contract liabilities as of period end divided by annualized rolling three months of Net sales.
Working Capital Ratios ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Average operating working capital to Net sales (1) (2) 17.9 % 16.9 % Days sales in Inventories (1) (2) 116.4 106.0 ​ Days sales in Accounts receivable 49.4 46.9 ​ Average days in Trade accounts payable 53.4 45.8 ​ ​ (1) Average operating working capital to Net sales is defined as the sum of Accounts receivable, Inventories and contract assets less Trade accounts payable and contract liabilities as of period end divided by annualized rolling three months of Net sales.
The Company believes its significant investment in research and development, its highly trained technical sales force and its extensive distributor network provide a competitive advantage in the marketplace. The Company’s products are sold globally. In the Americas, products are sold principally through industrial distributors, retailers and also directly to users of welding products.
The Company believes its significant investment in research and development, its highly trained technical sales force and its extensive distributor network provide a competitive advantage in the marketplace. The Company’s products are sold globally through industrial distributors, direct to end users, retailers and wholesalers.
If the carrying amount exceeds the fair value, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit.
For quantitative testing, the Company compares the fair value of each reporting unit with its carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit.
The Company may also perform a quantitative test in instances where the more-likely-than-not threshold has not been met, including when general macroeconomic conditions or changes to the reporting unit warrant a refresh of the baseline used in a qualitative test. For quantitative testing, the Company compares the fair value of each reporting unit with its carrying amount.
The Company may also perform a quantitative test in instances where the more-likely-than-not threshold has not been met, including when general macroeconomic conditions, changes to the reporting unit or the passage of time warrants a refresh of the baseline used in a qualitative test.
The Company ensures compliance and the continuous improvement of the environmental performance of its products and operations through its global Environmental, Health, Safety and Quality (“EHS&Q”) systems.
The Company ensures compliance and the continuous improvement of the environmental performance of its products and operations through its global EHS&Q systems.
This Annual Report on Form 10-K contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those indicated in the forward-looking statements. See "Item 1A. Risk Factors" for more information regarding forward-looking statements.
This Annual Report on Form 10-K contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those indicated in the forward-looking statements. See "Item 1A. Risk Factors" for more information regarding forward-looking statements. General The Company is a high-performance industrial machinery and technology leader who helps customers manufacture and maintain vital equipment and infrastructure.
Other Material Obligations As of December 31, 2024, there was a total liability of $55,425 for deferred compensation, which includes $30,901 in Other current liabilities. 26 Table of Contents ​ Off-Balance Sheet Arrangements The Company utilizes letters of credit to back certain payment and performance obligations.
As of December 31, 2025, the Company had total purchase commitments of $76,500, which includes $76,348 in current liabilities. Other Material Obligations As of December 31, 2025, there was a total liability of $24,456 for deferred compensation, which includes $894 in Other current liabilities. Off-Balance Sheet Arrangements The Company utilizes letters of credit to back certain payment and performance obligations.
In January 2025, the Company paid a cash dividend of $0.75 per share, or $42,158, to shareholders of record on December 31, 2024, which reflects a 5.6% increase in the Company’s dividend payout rate. 25 Table of Contents ​ The Company currently anticipates capital expenditures of $100,000 to $120,000 in 2025.
In January 2026, the Company paid a cash dividend of $0.79 per share, or $43,328, to shareholders of record on December 31, 2025, which reflects a 5.3% increase in the Company’s dividend payout rate. The Company currently anticipates capital expenditures of $110,000 to $130,000 in 2026.
Invested capital is defined as total debt, which includes Amounts due banks, Current portion of long-term debt and Long-term debt, less current portions, plus Total equity. ​ 27 Table of Contents ​ The following table presents the reconciliation of ROIC and Adjusted ROIC to net income: ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on Invested Capital 2024 2023 Net income as reported ​ $ 466,108 ​ $ 545,248 ​ Plus: Interest expense (after-tax) ​ 39,665 ​ 38,050 ​ Less: Interest income (after-tax) ​ 7,593 ​ 5,033 ​ Net operating profit after taxes ​ $ 498,180 ​ $ 578,265 ​ Special items: ​ ​ ​ ​ ​ ​ ​ Rationalization and asset impairment net charges ​ ​ 55,860 ​ ​ (11,314) ​ Acquisition transaction costs ​ ​ 7,042 ​ ​ — ​ Pension settlement net charges ​ ​ 3,792 ​ ​ 845 ​ Amortization of step up in value of acquired inventories ​ ​ 5,026 ​ ​ 12,252 ​ Loss (gain) on asset disposal ​ ​ 4,950 ​ ​ (1,646) ​ Tax effect of Special items (1) ​ ​ (11,513) ​ ​ 2,537 ​ Adjusted net operating profit after taxes ​ $ 563,337 ​ $ 580,939 ​ ​ ​ ​ ​ ​ ​ ​ ​ Invested Capital ​ ​ ​ ​ ​ ​ ​ Short-term debt ​ $ 110,524 ​ $ 2,439 ​ Long-term debt, less current portion ​ ​ 1,150,551 ​ ​ 1,102,771 ​ Total debt ​ ​ 1,261,075 ​ ​ 1,105,210 ​ Total equity ​ ​ 1,327,433 ​ ​ 1,308,852 ​ Invested capital ​ $ 2,588,508 ​ $ 2,414,062 ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on invested capital as reported ​ ​ 19.2 % ​ 24.0 % Adjusted return on invested capital ​ 21.8 % 24.1 % ​ (1) Includes the net tax impact of Special items recorded during the respective periods.
Invested capital is defined as total debt, which includes Amounts due to banks, Current portion of long-term debt and Long-term debt, less current portions, plus Total equity. 28 Table of Contents ​ The following table presents the reconciliation of ROIC and Adjusted ROIC to net income: ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on Invested Capital ​ ​ ​ 2025 ​ ​ ​ 2024 Net income as reported ​ $ 520,533 ​ $ 466,108 ​ Plus: Interest expense (after-tax) ​ 43,762 ​ 39,665 ​ Less: Interest income (after-tax) ​ 5,118 ​ 7,593 ​ Net operating profit after taxes ​ ​ 559,177 ​ ​ 498,180 ​ Special items: ​ ​ ​ ​ ​ ​ ​ Rationalization and asset impairment net charges ​ ​ 18,199 ​ ​ 55,860 ​ Acquisition transaction costs ​ ​ 2,739 ​ ​ 7,042 ​ Pension settlement net charges ​ ​ 719 ​ ​ 3,792 ​ Amortization of step up in value of acquired inventories ​ ​ 3,964 ​ ​ 5,026 ​ Loss on asset disposal ​ ​ — ​ ​ 4,950 ​ Tax effect of Special items (1) ​ ​ 5,177 ​ ​ (11,513) ​ Adjusted net operating profit after taxes ​ $ 589,975 ​ $ 563,337 ​ ​ ​ ​ ​ ​ ​ ​ ​ Invested Capital ​ ​ ​ ​ ​ ​ ​ Short-term debt ​ $ 143,780 ​ $ 110,524 ​ Long-term debt, less current portion ​ ​ 1,150,228 ​ ​ 1,150,551 ​ Total debt ​ ​ 1,294,008 ​ ​ 1,261,075 ​ Total equity ​ ​ 1,469,794 ​ ​ 1,327,433 ​ Invested capital ​ $ 2,763,802 ​ $ 2,588,508 ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on invested capital as reported ​ ​ 20.2 % ​ 19.2 % Adjusted return on invested capital ​ 21.3 % 21.8 % ​ (1) Includes the net tax impact of Special items recorded during the respective periods, including the cumulative impact of the OBBBA provisions.
(3) Pension settlement net charges are primarily due to the final settlement associated with the termination of pension plans and are included in Other income. Refer to Note 11 for further discussion. ​ (4) Costs related to acquisitions which are included in Cost of goods sold. (5) Loss (gain) on asset disposal included in Other income.
(4) Pension settlement net charges are included in Other income. 2024 net charges are primarily due to the final settlement associated with the termination of a pension plan. Refer to Note 11 to the consolidated financial statements for further discussion. (5) Loss on asset disposal included in Other income.
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’s innovative solutions enable higher quality and productivity across a variety of processes including welding, cutting, brazing, machining, process automation, and field repair. 18 Table of Contents ​ The Company’s products include arc welding equipment, filler metals (welding, brazing and soldering consumables), cutting systems (laser, plasma and oxyfuel), wire feeding systems, fume control equipment, welding accessories, specialty gas regulators, mobile power equipment, wear solutions, software, and education solutions; as well as a comprehensive portfolio of automated solutions and system integration services for joining, cutting, material handling, module assembly, and end of line testing.
(4) 2024 excludes Rationalization and asset impairment net charges of $18,840, the amortization of step up in value of acquired inventories of $4,776 and pension settlement charges of $4,205 . 2023 excludes Rationalization and asset impairment net charges of $468 and the amortization of step up in value of acquired inventories of $9,390 . 22 Table of Contents ​ (5) 2024 excludes Rationalization and asset impairment net charges of $32,960 primarily due to restructuring activities, including the impact of the Company’s disposition of its Russian entity as discussed in Note 7, a loss on asset disposal of $4,950, the amortization of the step up in value of acquired inventories of $250 and pension settlement gain of $413 . 2023 excludes pension settlement charges of $845, a gain on asset disposal of $1,646, the amortization of step up in value of acquired inventories of $2,862 and Rationalization and asset impairment net gains of $11,782.
(5) 2025 primarily excludes Rationalization and asset impairment net charges of $7,293, the amortization of the step up in value of acquired inventories of $3,739 and pension settlement charges of $72 . 2024 primarily excludes Rationalization and asset impairment net charges of $32,960 primarily due to restructuring activities, including the impact of the Company’s disposition of its Russian entity, a loss on asset disposal of $4,950, amortization of the step up in value of acquired inventories of $250 and pension settlement gain of $413 .
(3) Increase for The Harris Products Group due to price actions taken in response to higher commodity costs. 21 Table of Contents ​ Adjusted Earnings Before Interest and Income Taxes (“Adjusted EBIT”): Segment performance is measured and resources are allocated based on a number of factors, the primary measure being the Adjusted EBIT profit measure.
(4) Increase for International Welding relates to the weaker U.S. dollar. 22 Table of Contents ​ Adjusted Earnings Before Interest and Income Taxes (“Adjusted EBIT”): Segment performance is measured and resources are allocated based on a number of factors, the primary measure being the Adjusted EBIT profit measure.
Revolving Credit Agreements and Other Lines of Credit On June 20, 2024, the Company terminated its existing $500,000 revolving credit facility and entered into a $1 billion revolving credit facility. The revolving credit facility matures on June 20, 2029. As of December 31, 2024, the Company had $1 billion of availability under the revolving credit facility.
Revolving Credit Agreements The Company has a $1 billion revolving credit facility which matures on June 20, 2029. As of December 31, 2025, the Company had $858,000 of availability under the revolving credit facility. Additionally, the Company has other lines of credit with total availability of $25,074 as of December 31, 2025.
Operating Income: Operating income as a percentage of sales was 15.9% in 2024 as compared to 17.1% in 2023. Excluding special items, Operating income as a percentage of sales was 17.6% in 2024 as compared to 17.1% in the prior year. Refer to explanations above for additional details.
Refer to Note 7 to the consolidated financial statements for further information on the Company’s rationalization plans. Operating Income: Operating income as a percentage of sales was 17.0% in 2025 as compared to 15.9% in 2024. Excluding special items, Operating income as a percentage of sales was 17.6% for both 2025 and 2024. Refer to explanations above for additional details.
Contractual Obligations Debt As of December 31, 2024, the total amount of debt outstanding was $1,261,075, which includes $110,524 in short-term debt. Refer to Note 9 for further information on our debt and interest. Lease Obligations As of December 31, 2024, the Company’s total future minimum lease payments were $61,942, which includes $14,896 in short-term lease obligations.
Contractual Obligations Debt As of December 31, 2025, the total amount of debt outstanding was $1,294,008, which includes $143,780 in short-term debt. Refer to Note 9 to the consolidated financial statements for further information on our debt and interest.
Results of Operations The following table shows the Company’s results of operations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Favorable (Unfavorable) ​ 2024 ​ 2023 ​ 2024 vs. 2023 ​ ​ Amount % of Sales Amount % of Sales $ % Net sales $ 4,008,670 ​ ​ ​ ​ $ 4,191,636 ​ ​ $ (182,966) (4.4) % Cost of goods sold 2,535,758 ​ ​ ​ 2,726,191 ​ ​ 190,433 7.0 % Gross profit 1,472,912 ​ 36.7 % 1,465,445 35.0 % 7,467 0.5 % Selling, general & administrative expenses 780,590 ​ 19.5 % 758,910 18.1 % (21,680) (2.9) % Rationalization and asset impairment net charges 55,860 ​ 1.4 % (11,314) (0.3) % (67,174) (593.7) % Operating income 636,462 ​ 15.9 % 717,849 17.1 % (81,387) (11.3) % Interest expense, net 42,786 ​ ​ ​ 44,371 ​ ​ 1,585 3.6 % Other income 473 ​ ​ ​ 13,388 ​ ​ (12,915) (96.5) % Income before income taxes 594,149 ​ 14.8 % 686,866 16.4 % (92,717) (13.5) % Income taxes 128,041 ​ ​ ​ 141,618 ​ ​ 13,577 9.6 % Effective tax rate 21.6 % ​ ​ 20.6 % ​ ​ (1.0) % ​ ​ Net income $ 466,108 ​ 11.6 % $ 545,248 13.0 % $ (79,140) (14.5) % Diluted earnings per share $ 8.15 ​ ​ ​ ​ $ 9.37 ​ $ (1.22) (13.0) % ​ 19 Table of Contents ​ Net Sales: T he following table summarizes the impacts of volume, acquisitions, price and foreign currency exchange rates on Net sales for the twelve months ended December 31, 2024 on a consolidated basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in Net Sales due to: ​ ​ ​ ​ Net Sales ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign ​ Net Sales ​ ​ 2023 Volume Acquisitions Price Exchange 2024 Lincoln Electric Holdings, Inc. ​ $ 4,191,636 ​ $ (301,161) ​ $ 102,757 ​ $ 30,398 $ (14,960) ​ $ 4,008,670 ​ % Change ​ ​ ​ ​ ​ ​ ​ ​ ​ Lincoln Electric Holdings, Inc. ​ ​ ​ ​ (7.2) % 2.5 % 0.7 % ​ (0.4) % ​ (4.4) % ​ Net sales decreased primarily due to softer demand across all segments.
Results of Operations The following table shows the Company’s results of operations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Favorable (Unfavorable) ​ 2025 ​ 2024 ​ 2025 vs. 2024 ​ ​ Amount ​ ​ ​ % of Sales ​ ​ ​ Amount ​ ​ ​ % of Sales ​ ​ ​ $ ​ ​ ​ % Net sales $ 4,233,003 ​ ​ ​ ​ $ 4,008,670 ​ ​ $ 224,333 5.6 % Cost of goods sold 2,698,751 ​ ​ ​ 2,535,758 ​ ​ ​ (162,993) (6.4) % Gross profit 1,534,252 ​ 36.2 % 1,472,912 36.7 % 61,340 4.2 % Selling, general & administrative expenses 797,994 ​ 18.9 % 780,590 19.5 % (17,404) (2.2) % Rationalization and asset impairment net charges 18,199 ​ 0.4 % 55,860 1.4 % ​ 37,661 67.4 % Operating income 718,059 ​ 17.0 % 636,462 15.9 % 81,597 12.8 % Interest expense, net 51,561 ​ ​ ​ 42,786 ​ ​ (8,775) (20.5) % Other income 8,952 ​ ​ ​ 473 ​ ​ ​ 8,479 1,792.6 % Income before income taxes 675,450 ​ 16.0 % 594,149 14.8 % 81,301 13.7 % Income taxes 154,917 ​ ​ ​ 128,041 ​ ​ (26,876) (21.0) % Effective tax rate 22.9 % ​ ​ 21.6 % ​ ​ ​ (1.3) % ​ ​ Net income $ 520,533 ​ 12.3 % $ 466,108 11.6 % $ 54,425 11.7 % Diluted earnings per share $ 9.32 ​ ​ ​ ​ $ 8.15 ​ ​ $ 1.17 14.4 % ​ 20 Table of Contents ​ Net Sales: T he following table summarizes the impacts of volume, acquisitions, price and foreign currency exchange rates on Net sales for the year ended December 31, 2025 on a consolidated basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in Net Sales due to: ​ ​ ​ ​ ​ ​ ​ Net Sales ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign ​ Net Sales ​ ​ ​ ​ ​ 2024 ​ ​ ​ Volume ​ ​ ​ Price ​ ​ ​ Acquisitions ​ ​ ​ Exchange ​ ​ ​ 2025 Lincoln Electric Holdings, Inc. ​ $ 4,008,670 ​ $ (147,682) ​ $ 246,540 ​ $ 106,478 $ 18,997 ​ $ 4,233,003 ​ % Change ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lincoln Electric Holdings, Inc. ​ ​ ​ ​ (3.7) % 6.2 % 2.7 % ​ 0.4 % ​ 5.6 % ​ Net sales increased for the year ended December 31, 2025 primarily due to an increase in organic sales and a benefit from acquisitions.
Actual year-end inventory levels and costs may differ from interim LIFO inventory valuations. The excess of current cost over LIFO cost was $120,633 and $129,946 at December 31, 2024 and 2023, respectively. The Company reviews the net realizable value of inventory on an on-going basis with consideration given to deterioration, obsolescence and other factors.
Actual year-end inventory levels and costs may differ from interim LIFO inventory valuations. The excess of current cost over LIFO cost was $138,589 and $120,633 at December 31, 2025 and 2024, respectively.
The Company’s cash flow from operations can be cyclical. In assessing liquidity, the Company reviews working capital measurements to define areas for improvement.
The Company’s capital allocation priorities include internal investment to support existing operations and organic growth, investment in acquisitions to grow the business and then returning capital to shareholders through dividends and share repurchases. The Company’s cash flow from operations can be cyclical. In assessing liquidity, the Company reviews working capital measurements to define areas for improvement.
Refer to Note 17 for further information on our lease obligations. Purchase Commitments Purchase commitments include contractual obligations for raw materials and services. As of December 31, 2024, the Company had total purchase commitments of $91,028, which includes $89,792 in current liabilities.
Lease Obligations As of December 31, 2025, the Company’s total future minimum lease payments were $59,773, which includes $15,232 in short-term lease obligations. Refer to Note 17 to the consolidated financial statements for further information on our lease obligations. 27 Table of Contents ​ Purchase Commitments Purchase commitments include contractual obligations for raw materials and services.
(2) Increase for Americas Welding and International Welding due to the acquisitions discussed in Note 4 to the consolidated financial statements.
Increase in The Harris Products Group due to the expanded market presence in the retail channel. (2) Increase in all segments due to price actions taken in response to higher input costs. (3) Increase for Americas Welding and International Welding due to the acquisitions discussed in Note 4 to the consolidated financial statements.
(2) Decrease for 2024 as compared to 2023 primarily driven by unfavorable impact of lower volumes, partially offset by cost reduction actions. (3) Increase for 2024 compared to 2023 primarily reflects effective cost management and operational improvements.
(2) Adjusted EBIT and Adjusted EBIT as a percent of sales increased for 2025 as compared to 2024 primarily as a result of acquisitions and effective cost management, partially offset by the unfavorable impact of lower volumes.
(2) Transaction costs related to acquisitions which are included in Selling, general & administrative expenses.
Charges in 2024 include the impact of the Company’s disposition of its Russian entity. (2) Transaction costs related to acquisitions which are included in Selling, general & administrative expenses . (3) Costs related to acquisitions which are included in Cost of goods sold.
Cash Flow ​ The following table reflects changes in key cash flow measures: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, $ Change ​ ​ 2024 2023 2024 vs. 2023 Cash provided by operating activities (1) ​ $ 598,977 ​ $ 667,542 ​ $ (68,565) Cash used by investing activities (2) ​ (361,231) ​ (74,729) ​ (286,502) Capital expenditures ​ (116,603) ​ (90,987) ​ (25,616) Acquisition of businesses, net of cash acquired ​ (252,746) ​ (32,685) ​ (220,061) Proceeds from sale of property, plant and equipment ​ ​ 7,798 ​ ​ 49,494 ​ ​ (41,696) Cash used by financing activities (3) ​ (244,640) ​ ​ (412,392) ​ 167,752 Proceeds from (payments on) short-term borrowings ​ 8,449 ​ (79,873) ​ 88,322 Proceeds from long-term borrowings ​ ​ 550,000 ​ ​ — ​ ​ 550,000 Payments on long-term borrowings ​ ​ (400,677) ​ ​ (8,109) ​ ​ (392,568) Purchase of shares for treasury ​ (263,751) ​ (198,765) ​ (64,986) Cash dividends paid to shareholders ​ (162,143) ​ (148,010) ​ (14,133) (Decrease) increase in Cash and cash equivalents ​ (16,525) ​ 196,637 ​ (213,162) ​ (1) Cash provided by operating activities decreased in 2024 as compared to 2023 primarily due to decreased earnings and working capital.
Cash Flow ​ The following table reflects changes in key cash flow measures: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ $ Change ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2025 vs. 2024 Cash provided by operating activities (1) ​ $ 661,173 ​ $ 598,977 ​ $ 62,196 Cash used by investing activities ​ (257,326) ​ (361,231) ​ 103,905 Capital expenditures ​ (126,974) ​ (116,603) ​ (10,371) Acquisition of businesses, net of cash acquired ​ (137,530) ​ (252,746) ​ 115,216 Cash used by financing activities (2) ​ (461,887) ​ ​ (244,640) ​ (217,247) Proceeds from (payments on) short-term borrowings ​ 133,252 ​ 8,449 ​ 124,803 Proceeds from long-term borrowings ​ ​ — ​ ​ 550,000 ​ ​ (550,000) Payments on long-term borrowings ​ ​ (100,169) ​ ​ (400,677) ​ ​ 300,508 Purchase of shares for treasury ​ (338,308) ​ (263,751) ​ (74,557) Cash dividends paid to shareholders ​ (168,240) ​ (162,143) ​ (6,097) (Decrease) increase in Cash and cash equivalents ​ (68,473) ​ (16,525) ​ (51,948) ​ (1) Cash provided by operating activities increased in 2025 as compared to 2024 primarily due to the net favorable impacts of the election of provisions from the OBBBA, partially offset by unfavorable working capital.
Rationalization and Asset Impairment Net Charges: Net charges in 2024 of $55,860 primarily relate to rationalization plans initiated in the third quarter of 2024 in all three segments, as well as previously initiated plans and the disposition of the Company’s Russian entity in International Welding .
SG&A expenses as a percentage of sales decreased primarily due to effective cost management. Rationalization and Asset Impairment Net Charges: Charges in 2025 and 2024 relate to rationalization plans within all three reportable segments . Charges in 2024 include the impact of the Company’s disposition of its Russian entity.
(2) Cash used by investing activities increased in 2024 as compared to 2023 primarily for capital expenditures and the acquisition of businesses in 2024.
(2) Cash used by financing activities increased in 2025 as compared to 2024 primarily due to the increase in purchases of shares for treasury and proceeds from long-term borrowings in the prior year.
Also refer to Non-GAAP Financial Measures for a reconciliation of Adjusted operating income. Other Income: Other income for 2024 primarily relates to the gain on termination of interest rate swaps and other miscellaneous income, partially offset by pension settlement charges and a loss on asset disposal.
Also refer to Non-GAAP Financial Measures for a reconciliation of Adjusted operating income. Other Income: Other income for 2025 primarily relates to the non-recurring items such as equity income and other non-operating gains.
The following table presents Adjusted EBIT by segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Favorable ​ ​ ​ ​ ​ ​ ​ ​ (Unfavorable) ​ ​ December 31, ​ 2024 vs. 2023 ​ 2024 ​ 2023 ​ $ ​ % ​ Americas Welding: ​ ​ ​ ​ ​ ​ Net sales ​ $ 2,564,847 ​ $ 2,655,546 ​ $ (90,699) ​ (3.4) % Inter-segment sales ​ ​ 135,758 ​ 127,536 ​ 8,222 ​ 6.4 % Total Sales ​ $ 2,700,605 ​ $ 2,783,082 ​ $ (82,477) ​ (3.0) % Adjusted EBIT (4) ​ $ 530,188 ​ $ 538,269 ​ $ (8,081) ​ (1.5) % As a percent of total sales (1) ​ ​ 19.6 % 19.3 % ​ ​ 0.3 % International Welding: ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 933,722 ​ $ 1,040,006 ​ $ (106,284) ​ (10.2) % Inter-segment sales ​ ​ 35,861 ​ 31,498 ​ 4,363 ​ 13.9 % Total Sales ​ $ 969,583 ​ $ 1,071,504 ​ $ (101,921) ​ (9.5) % Adjusted EBIT (5) ​ $ 106,117 ​ $ 136,497 ​ $ (30,380) ​ (22.3) % As a percent of total sales (2) ​ ​ 10.9 % 12.7 % ​ ​ (1.8) % The Harris Products Group: ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 510,101 ​ $ 496,084 ​ $ 14,017 ​ 2.8 % Inter-segment sales ​ ​ 12,321 ​ 10,641 ​ 1,680 ​ 15.8 % Total Sales ​ $ 522,422 ​ $ 506,725 ​ $ 15,697 ​ 3.1 % Adjusted EBIT (6) ​ $ 88,328 ​ $ 74,144 ​ $ 14,184 ​ 19.1 % As a percent of total sales (3) ​ ​ 16.9 % 14.6 % ​ ​ 2.3 % Corporate / Eliminations: ​ ​ ​ ​ ​ ​ ​ ​ Inter-segment sales ​ $ (183,940) ​ $ (169,675) ​ $ (14,265) ​ 8.4 % Adjusted EBIT (7) ​ ​ (11,028) ​ (17,536) ​ 6,508 ​ (37.1) % Consolidated: ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 4,008,670 ​ $ 4,191,636 ​ $ (182,966) ​ (4.4) % Net income ​ $ 466,108 ​ $ 545,248 ​ $ (79,140) ​ (14.5) % As a percent of total sales ​ ​ 11.6 % 13.0 % ​ ​ (1.4) % Adjusted EBIT (8) ​ $ 713,605 ​ $ 731,374 ​ $ (17,769) ​ (2.4) % As a percent of sales ​ ​ 17.8 % 17.4 % ​ ​ 0.4 % ​ (1) Increase for 2024 as compared to 2023 primarily driven by effective cost management, cost reduction actions, partially offset by the unfavorable impact of lower volumes.
The following table presents Adjusted EBIT by segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Favorable ​ ​ ​ ​ ​ ​ ​ ​ (Unfavorable) ​ ​ December 31, ​ 2025 vs. 2024 ​ ​ ​ ​ 2025 ​ 2024 ​ $ ​ % ​ Americas Welding: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 2,723,561 ​ $ 2,564,847 ​ $ 158,714 ​ 6.2 % Inter-segment sales ​ ​ 128,922 ​ 135,758 ​ (6,836) ​ (5.0) % Total Sales ​ $ 2,852,483 ​ $ 2,700,605 ​ $ 151,878 ​ 5.6 % Adjusted EBIT (1)(4) ​ $ 534,839 ​ $ 530,188 ​ $ 4,651 ​ 0.9 % As a percent of total sales (1) ​ ​ 18.7 % 19.6 % ​ ​ (0.9) % International Welding: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 930,865 ​ $ 933,722 ​ $ (2,857) ​ (0.3) % Inter-segment sales ​ ​ 30,160 ​ 35,861 ​ (5,701) ​ (15.9) % Total Sales ​ $ 961,025 ​ $ 969,583 ​ $ (8,558) ​ (0.9) % Adjusted EBIT (2)(5) ​ $ 110,585 ​ $ 106,117 ​ $ 4,468 ​ 4.2 % As a percent of total sales (2) ​ ​ 11.5 % 10.9 % ​ ​ 0.6 % The Harris Products Group: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 578,577 ​ $ 510,101 ​ $ 68,476 ​ 13.4 % Inter-segment sales ​ ​ 15,084 ​ 12,321 ​ 2,763 ​ 22.4 % Total Sales ​ $ 593,661 ​ $ 522,422 ​ $ 71,239 ​ 13.6 % Adjusted EBIT (3)(6) ​ $ 107,608 ​ $ 88,328 ​ $ 19,280 ​ 21.8 % As a percent of total sales (3) ​ ​ 18.1 % 16.9 % ​ ​ 1.2 % Corporate / Eliminations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Inter-segment sales ​ $ (174,166) ​ $ (183,940) ​ $ (9,774) ​ (5.3) % Adjusted EBIT (7) ​ ​ (400) ​ (11,028) ​ 10,628 ​ 96.4 % Consolidated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 4,233,003 ​ $ 4,008,670 ​ $ 224,333 ​ 5.6 % Net income ​ $ 520,533 ​ $ 466,108 ​ $ 54,425 ​ 11.7 % As a percent of Net sales ​ ​ 12.3 % 11.6 % ​ ​ 0.7 % Adjusted EBIT (8) ​ $ 752,632 ​ $ 713,605 ​ $ 39,027 ​ 5.5 % As a percent of Net sales ​ ​ 17.8 % 17.8 % ​ ​ 0.0 % ​ (1) Adjusted EBIT increased for 2025 as compared to 2024 primarily driven by the favorable net impact of organic sales and acquisitions, partially offset by unfavorable impact of product mix; Adjusted EBIT as a percent of sales decreased for the same period due to the unfavorable impact of lower volumes, product mix and acquisitions.
Gross Profit: Gross profit as a percentage of sales increased 1.7% as compared to 2023 driven by the benefit of effective cost management, cost reduction actions and operational efficiencies. Selling, General & Administrative ("SG&A") Expenses: SG&A expenses increased in 2024 as compared to 2023 primarily due to SG&A associated with acquisitions, partially offset by lower employee-related costs .
The increase in organic sales is driven by an increase in pricing primarily due to higher input costs, partially offset by lower volumes. Gross Profit: Gross profit as a percentage of sales decreased 0.5% for 2025 as compared to 2024 driven by lower volumes partially offset by effective cost management.
Additionally, the Company has other lines of credit with total availability of $35,088 as of December 31, 2024. Refer to Note 9 for further information on our revolving credit agreements and other lines of credit.
Refer to Note 9 to the consolidated financial statements for further information on our revolving credit agreements.
The Company paid $162,143 and $148,010 in cash dividends to its shareholders during 2024 and 2023, respectively.
As of December 31, 2025, the Company had cash of $308,789, of which $294,130 was held by international subsidiaries. 26 Table of Contents ​ The Company paid $168,240 and $162,143 in cash dividends to its shareholders during 2025 and 2024, respectively.
Income taxes: The effective tax rate was higher in 2024 as compared to 2023 primarily due to the mix of earnings and discrete tax items. 20 Table of Contents ​ Segment Results Net Sales: The table below summarizes the impacts of volume, acquisitions, price and foreign currency exchange rates on Net sales for the twelve months ended December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in Net Sales due to: ​ ​ Net Sales ​ ​ ​ ​ ​ ​ Foreign Net Sales ​ 2023 ​ Volume (1) Acquisitions (2) Price (3) ​ Exchange ​ 2024 ​ Operating Segments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Americas Welding $ 2,655,546 ​ $ (192,454) ​ $ 101,097 ​ $ 10,770 $ (10,112) ​ $ 2,564,847 ​ International Welding ​ 1,040,006 ​ (96,658) ​ 1,660 ​ (8,413) ​ (2,873) ​ 933,722 ​ The Harris Products Group ​ 496,084 ​ (12,049) ​ — ​ 28,041 ​ (1,975) ​ 510,101 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % Change ​ ​ ​ ​ ​ ​ ​ Americas Welding ​ ​ ​ ​ (7.2) % 3.8 % ​ 0.4 % ​ (0.4) % ​ (3.4) % International Welding ​ ​ ​ ​ (9.3) % 0.2 % ​ (0.8) % ​ (0.3) % ​ (10.2) % The Harris Products Group ​ ​ ​ ​ (2.4) % — ​ ​ 5.7 % ​ (0.4) % ​ 2.8 % ​ (1) Decrease in all segments due to softer demand across broad industrial markets.
Refer to Note 13 to the consolidated financial statements for further details. 21 Table of Contents ​ Segment Results Net Sales: The table below summarizes the impacts of volume, acquisitions, price and foreign currency exchange rates on Net sales for the year ended December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in Net Sales due to: ​ ​ ​ ​ ​ ​ ​ ​ Net Sales ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign ​ ​ ​ Net Sales ​ 2024 ​ Volume (1) ​ ​ ​ Price (2) ​ ​ ​ Acquisitions (3) ​ Exchange (4) ​ 2025 ​ Operating Segments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Americas Welding $ 2,564,847 ​ $ (107,480) ​ $ 184,483 ​ $ 86,361 $ (4,650) ​ $ 2,723,561 ​ International Welding ​ 933,722 ​ (47,629) ​ 3,062 ​ 20,117 ​ 21,593 ​ 930,865 ​ The Harris Products Group ​ 510,101 ​ 7,427 ​ 58,995 ​ — ​ 2,054 ​ 578,577 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % Change ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Americas Welding ​ ​ ​ ​ (4.2) % 7.2 % ​ 3.4 % ​ (0.2) % ​ 6.2 % International Welding ​ ​ ​ ​ (5.1) % 0.3 % ​ 2.2 % ​ 2.3 % ​ (0.3) % The Harris Products Group ​ ​ ​ ​ 1.5 % 11.6 % ​ — ​ ​ 0.3 % ​ 13.4 % ​ (1) Decrease in Americas Welding and International Welding due to lower capital spending impacting equipment and automation, as well as weakened industrial demand trends in portions of International Welding.
Liquidity and Capital Resources Overview The Company’s primary sources of liquidity are operating cash flows and revolving credit facilities.
(7) During 2025, the Company recognized tax expense of approximately $11,700, reflecting the cumulative impact of the OBBBA provisions. Refer to Note 13 to the consolidated financial statements for further details. 25 Table of Contents ​ Liquidity and Capital Resources Overview The Company’s primary sources of liquidity are operating cash flows and revolving credit facilities.
Removed
General The Company is the world’s largest designer and manufacturer of arc welding and cutting products, manufacturing a broad line of arc welding equipment, consumable welding products and other welding and cutting products. The Company is one of only a few worldwide broad-line manufacturers of welding, cutting and brazing products.
Added
Services include additive manufacturing, precision fabrication, wear services, upfitting, and training. ​ Solutions range in technology and features from basic units used for personal, maintenance and light manufacturing use to highly sophisticated robotic solutions for complex fabrication and production activities.
Removed
The Company is the world leader in the design, development and manufacture of arc welding products, automated joining, 17 Table of Contents ​ assembly and cutting systems, plasma and oxy-fuel cutting equipment. The Company also has a leading global position in brazing and soldering alloys.
Added
In 2025, the U.S. government announced a series of tariffs on imported goods into the U.S., which prompted retaliatory actions from some of its trading partners.
Removed
Outside of the Americas, the Company has an international sales organization comprised of Company employees and agents who sell products from the Company’s various manufacturing sites to distributors and product users.
Added
The Company has taken actions to address the impact of these trade policies and while the Company cannot predict the ultimate impact on its business, the Company will continue to monitor evolving trade negotiations to determine if additional measures are warranted. The Company’s facilities are subject to environmental regulations.
Removed
Key operating measures utilized by the operating units to manage the Company include orders, backlog, sales, inventory and fill-rates, all of which provide key indicators of business trends. These measures are reported on various cycles including daily, weekly and monthly depending on the needs established by operating management.
Added
The year ended December 31, 2025 includes a last-in, first-out (“LIFO”) charge of $17,956, which is primarily due to rising input costs. This compares with a LIFO benefit of $9,313 in 2024. Selling, General & Administrative ("SG&A") Expenses: SG&A expenses increased in 2025 as compared to 2024 primarily due to acquisitions.
Removed
Net gains in 2023 primarily reflect a gain on the sale of a property of $36,187, partially offset by Rationalization and asset impairment charges of $24,873 primarily within International Welding. Refer to Note 7 to the consolidated financial statements for further information on the Company’s rationalization plans.
Added
Income Taxes: The effective tax rate was higher in 2025 as compared to 2024 primarily driven by the impact of the One Big Beautiful Bill Act (“OBBBA”), partially offset by the mix of earnings and timing of discrete tax items.
Removed
From time to time, management evaluates and discloses to investors the following non-GAAP measures: Free cash flow ("FCF"), defined as Net cash provided by operating activities less Capital expenditures (the Company considers FCF to be a liquidity measure that provides useful information to management and investors about how the amount of cash generated by our business, after the purchase of property and equipment, can be used for debt service, acquisitions, paying dividends and repurchasing our common shares); Cash conversion, defined as FCF divided by Adjusted net income; Organic sales, reflects changes in volumes and prices, and excludes the effects of foreign currency and acquisitions.
Added
(3) Adjusted EBIT and Adjusted EBIT as a percent of sales increased for 2025 as compared to 2024 primarily as a result of higher organic sales and effective cost management. 23 Table of Contents ​ (4) 2025 primarily excludes Rationalization and asset impairment net charges of $9,838 and pension settlement charges of $647 . 2024 primarily excludes Rationalization and asset impairment net charges of $18,840 and amortization of the step up in value of acquired inventories of $4,776 and pension settlement charges of $4,205 .
Removed
The following table presents a reconciliation of Operating income as reported to Adjusted operating income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 Operating income as reported ​ $ 636,462 ​ $ 717,849 ​ Special items (pre-tax): ​ ​ ​ Rationalization and asset impairment net charges (1) ​ 55,860 ​ (11,314) ​ Acquisition transaction costs (2) ​ 7,042 ​ — ​ Amortization of step up in value of acquired inventories (3) ​ 5,026 ​ 12,252 ​ Adjusted operating income ​ $ 704,390 ​ $ 718,787 ​ As a percent of total sales ​ ​ 17.6% ​ ​ 17.1% ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) 2024 charges primarily relate to rationalization plans initiated in the third quarter of 2024 in all three segments, as well as previously initiated plans and the disposition of the Company’s Russian entity in International Welding . 2023 net gains primarily relates to the gain on sale of a property, partially offset by charges within International Welding.
Added
As of December 31, 2025, the Company had $308,789 of cash and cash equivalents on hand and $143,780 of outstanding borrowings under its $1,026,854 revolving credit facilities .
Removed
Items in 2023 reflects a gain on the sale of a property, partially offset by Rationalization and asset impairment charges within International Welding. (2) Transaction costs related to acquisitions which are included in Selling, general and administrative expenses. Refer to Note 4 for further discussion.
Added
(2) Due to the strategic increase of inventory to serve customers, the Company had higher inventories relative to expected Net sales resulting in higher Days sales in Inventories and Average operating working capital to Net sales.
Removed
As of December 31, 2024, the Company had $377,262 of cash and cash equivalents on hand and $10,520 of outstanding borrowings under its $1,045,608 revolving credit facilities . 24 Table of Contents ​ The Company’s capital allocation priorities include internal investment to support existing operations and organic growth, investment in acquisitions to grow the business and then returning capital to shareholders through dividends and share repurchases.
Removed
(3) Cash used by financing activities decreased in 2024 as compared to 2023 primarily due to the proceeds from the 2024 Notes issuances, partially offset by the repayment of the Term Loan as described in Note 9 . As of December 31, 2024, the Company had cash of $249,895 held by international subsidiaries.
Removed
If actual market conditions differ from those projected by management, and the Company’s estimates prove to be inaccurate, write-downs of inventory values and adjustments to Cost of goods sold may be required. Historically, the Company’s reserves have approximated actual experience.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+0 added−0 removed3 unchanged
Biggest changeAt December 31, 2024, the Company hedged certain third-party and intercompany purchases and sales. The gross notional dollar amount of these foreign exchange contracts at December 31, 2024 was $96,444. At December 31, 2024, a hypothetical 10% strengthening or weakening in the U.S. dollar would have changed Accumulated other comprehensive income (loss) by $785.
Biggest changeAt December 31, 2025, the Company hedged certain third-party and intercompany purchases and sales. The gross notional dollar amount of these foreign exchange contracts at December 31, 2025 was $88,555. At December 31, 2025, a hypothetical 10% strengthening or weakening in the U.S. dollar would have changed Accumulated other comprehensive income (loss) by $77.
The fair value of the Company’s cash and cash equivalents at December 31, 2024 approximated cost due to the short-term duration. These financial instruments are subject to concentrations of credit risk. The Company has minimized this risk by entering into investments with a number of major banks and financial institutions and investing in high-quality instruments.
The fair value of the Company’s cash and cash equivalents at December 31, 2025 approximated cost due to the short-term duration. These financial instruments are subject to concentrations of credit risk. The Company has minimized this risk by entering into investments with a number of major banks and financial institutions and investing in high-quality instruments.
The derivative, borrowing and investment arrangements in effect at December 31, 2024 were compared to the hypothetical foreign exchange rates in the sensitivity analysis to determine the effect on the Company’s current period consolidated financial statements. 31 Table of Contents ​ Foreign Currency Exchange Risk The Company enters into forward foreign exchange contracts principally to hedge the currency fluctuations in transactions denominated in foreign currencies, thereby limiting the Company’s risk that would otherwise result from changes in exchange rates.
The derivative, borrowing and investment arrangements in effect at December 31, 2025 were compared to the hypothetical foreign exchange rates in the sensitivity analysis to determine the effect on the Company’s current period consolidated financial statements. 32 Table of Contents ​ Foreign Currency Exchange Risk The Company enters into forward foreign exchange contracts principally to hedge the currency fluctuations in transactions denominated in foreign currencies, thereby limiting the Company’s risk that would otherwise result from changes in exchange rates.
Included below is a sensitivity analysis based upon a hypothetical 10% weakening or strengthening in the U.S. dollar compared to foreign currency exchange rates at December 31, 2024.
Included below is a sensitivity analysis based upon a hypothetical 10% weakening or strengthening in the U.S. dollar compared to foreign currency exchange rates at December 31, 2025.
A hypothetical 10% change in the year-end exchange rates would have resulted in an increase or decrease to Income before income taxes of $17,271 related to these positions.
A hypothetical 10% change in the year-end exchange rates would have resulted in an increase or decrease to Income before income taxes of $2,779 related to these positions.
The Company enters into forward foreign exchange contracts to hedge transaction exposures or significant cross-border intercompany loans by either purchasing or selling specified amounts of foreign currency at a specified date. The gross notional dollar amount of these foreign exchange contracts at December 31, 2024 was $421,754.
The Company enters into forward foreign exchange contracts to hedge transaction exposures or significant cross-border intercompany loans by either purchasing or selling specified amounts of foreign currency at a specified date. The gross notional dollar amount of these foreign exchange contracts at December 31, 2025 was $370,668.
The Company also has a foreign currency forward contract hedge designated as a net investment hedge with a notional dollar amount of $319,450 at December 31, 2024. At December 31, 2024, any loss (or gain) resulting from the hypothetical 10% strengthening or weakening in the U.S. dollar would have changed Accumulated other comprehensive income (loss) by $32,617.
The Company also has a foreign currency forward contract hedge designated as a net investment hedge with a notional dollar amount of $337,659 at December 31, 2025. At December 31, 2025, any loss (or gain) resulting from the hypothetical 10% strengthening or weakening in the U.S. dollar would have changed Accumulated other comprehensive income (loss) by $27,652.

Other LECO 10-K year-over-year comparisons