Lincoln Electric Holdings Inc. (NASDAQ:LECO) Q4 2014 Earnings Conference Call - Final Transcript

Feb 17, 2015 • 10:00 am ET

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Lincoln Electric Holdings Inc. (NASDAQ:LECO) Q4 2014 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Greetings and welcome to the Lincoln Electric Fourth Quarter and Full Year 2014 Financial Results Conference Call. At this time, all participants are in listen-only-mode. As a reminder, this call is being recorded. It's now my pleasure to introduce your host, Vincent Petrella, Executive Vice President and Chief Financial Officer. Sir, you may begin.

Executive
Vincent Petrella

Thank you, Syed and good morning to everyone. Welcome to the Lincoln Electric 2014 fourth quarter conference call. We released our financial results for the quarter and the full year this morning prior to the markets open and our release is available on the Lincoln Electric website at lincolnelectric.com.

Joining me on the call today is Chris Mapes, our Chairman and Chief Executive Officer. Chris will start the discussion this morning with an overview of our full year 2014 results. I will then cover the fourth quarter numbers in more detail as well as our uses of cash. We will then take questions following our prepared remarks. As part of our webcast today, we are using a Slide presentation, which can be accessed on our website under the Company and Investor Relations tabs.

Before we start our discussion, please be reminded that certain statements made during this call and in our discussions may be forward-looking and actual results may differ from our expectations. Actual results may differ materially from such statements due to a variety of factors that could adversely affect the company's operating results. Risks and uncertainties that may affect our results are provided in our press release and in our SEC filings on Forms 10-K and 10-Q. Additionally, we also discuss financial measures that do not conform to US GAAP and you may find important information on our use of these measures and their reconciliation to US GAAP in the financial tables that we have included in our earnings release.

With that, let me turn the call over to Chris Mapes. Chris?

Executive
Chris Mapes

Thank you, Vince, and good morning to everyone joining us on the call today. Moving to slide 3, I'm pleased to report that we finished 2014 with record results and operating income margin on an adjusted basis, earnings, working capital and cash flow performance. We did this even with relatively flat sales, reflecting uneven market conditions, a challenging year-over-year comparison from our Venezuelan business, and rising foreign exchange headwinds.

We also increased returns with a 19.1% ROIC, up 20 basis points year-over-year and returned approximately 95% of our cash flow from operations or a record $380 million to shareholders through dividends and share repurchases.

We feel these results give us continued confidence in our 2020 vision and strategy and our ability to execute on the plan. So, I would like to thank our employees, partners and customers around the world for another solid year for Lincoln Electric.

Moving to slide 4, which highlights key income statement items. Reported full year 2014 sales declined 1.4% to $2.8 billion. Gains from our automation acquisitions and from pricing actions were offset by an unfavorable impact from