FULLTEXT DEL 2 AV 2
10-K – 2026-02-25 – leco-20251231x10k.htm
February 25, 2026
February 25, 2026
/s/ Gabriel Bruno
/s/ Gabriel Bruno
Gabriel Bruno as
Gabriel Bruno as
Attorney-in-Fact for
Attorney-in-Fact for
Marc A. Howze, Director
Kathryn Jo Lincoln, Director
February 25, 2026
February 25, 2026
/s/ Gabriel Bruno
/s/ Gabriel Bruno
Gabriel Bruno as
Gabriel Bruno as
Attorney-in-Fact for
Attorney-in-Fact for
Phillip J. Mason, Director
Ben P. Patel, Director
February 25, 2026
February 25, 2026
41
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Lincoln Electric Holdings, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Lincoln Electric Holdings, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 25, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.
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Goodwill impairment evaluation – Reporting unit subject to quantitative assessment
Description of the Matter
As disclosed in Note 5 to the consolidated financial statements, at December 31, 2025, the Company’s total goodwill was $887 million. As disclosed in Note 1 to the consolidated financial statements, goodwill is tested for impairment in the fourth quarter using the same date each year or more frequently if changes in circumstances or the occurrence of events indicate potential impairment. The Company first assesses qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount and whether it is necessary to perform a quantitative goodwill impairment test. The quantitative test is only required if the Company concludes that it is more-likely-than-not that a reporting unit’s fair value is less than its carrying amount. The Company may 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 elected to perform a quantitative assessment for certain reporting units during the fourth quarter of 2025. The Company determined that the fair value of the reporting units were in excess of their carrying values.
Auditing the annual goodwill impairment test for a certain reporting unit under the quantitative assessment was complex due to the estimation required in determining the fair value of the reporting unit. In particular, the fair value estimate using the income approach was sensitive to the weighted average cost of capital. Elements of the weighted average cost of capital are forward-looking and could be affected by future economic conditions.
How We Addressed the Matter in Our Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment evaluation, including controls over the significant assumption mentioned above.
To test the estimated fair value used in the Company’s annual goodwill impairment test for the reporting unit, our audit procedures included, among others, assessing the valuation methodology, testing the weighted average cost of capital, and performing sensitivity analyses of underlying assumptions to evaluate their responsiveness to changes for significance. We identified the weighted average cost of capital as a significant assumption. We involved valuation specialists to assist with our evaluation of the methodology applied and the reasonableness of the weighted average cost of capital. Specifically, we evaluated the components of the weighted average cost of capital assumptions used by performing an independent corroborative analysis with involvement of valuation specialists.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since at least 1923, but we are unable to determine the specific year.
Cleveland, OH
February 25, 2026
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Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Lincoln Electric Holdings, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Lincoln Electric Holdings, Inc.’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Lincoln Electric Holdings, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.
As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Alloy Steel Australia (Int) Pty Ltd. (“Alloy Steel”) which is included in the 2025 consolidated financial statements of the Company and constituted approximately 4% of total assets as of December 31, 2025 and 0.4% of net sales for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Alloy Steel.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2025 consolidated financial statements of the Company and our report dated February 25, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Cleveland, Ohio
February 25, 2026
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LINCOLN ELECTRIC HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Year Ended December 31,
2025
2024
2023
Net sales (Note 2)
$
4,233,003
$
4,008,670
$
4,191,636
Cost of goods sold
2,698,751
2,535,758
2,726,191
Gross profit
1,534,252
1,472,912
1,465,445
Selling, general & administrative expenses
797,994
780,590
758,910
Rationalization and asset impairment net charges (Note 7)
18,199
55,860
( 11,314 )
Operating income
718,059
636,462
717,849
Interest expense, net
51,561
42,786
44,371
Other income (Note 12)
8,952
473
13,388
Income before income taxes
675,450
594,149
686,866
Income taxes (Note 13)
154,917
128,041
141,618
Net income
$
520,533
$
466,108
$
545,248
Basic earnings per share (Note 3)
$
9.39
$
8.23
$
9.50
Diluted earnings per share (Note 3)
$
9.32
$
8.15
$
9.37
Cash dividends declared per share
$
3.04
$
2.88
$
2.63
See notes to these consolidated financial statements.
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LINCOLN ELECTRIC HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
Year Ended December 31,
2025
2024
2023
Net income
$
520,533
$
466,108
$
545,248
Other comprehensive income (loss), net of tax:
Unrealized gain on derivatives designated and qualifying as cash flow hedges
432
719
2,627
Defined benefit pension plan activity
( 14 )
948
( 215 )
Currency translation adjustment
93,786
( 71,955 )
43,139
Other comprehensive income (loss):
94,204
( 70,288 )
45,551
Comprehensive income
$
614,737
$
395,820
$
590,799
See notes to these consolidated financial statements.
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LINCOLN ELECTRIC HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
December 31,
2025
2024
ASSETS
Current Assets
Cash and cash equivalents
$
308,789
$
377,262
Accounts receivable (less allowance for doubtful accounts of $ 11,326 in 2025;
$ 12,674 in 2024)
538,791
481,979
Inventories (Note 16)
633,364
544,037
Other current assets
258,568
242,003
Total Current Assets
1,739,512
1,645,281
Property, plant and equipment (Note 1)
702,762
619,181
Intangibles, net (Note 5)
250,424
221,005
Goodwill (Note 5)
886,686
804,927
Deferred income taxes (Note 13)
47,077
77,611
Other assets
151,116
152,137
TOTAL ASSETS
$
3,777,577
$
3,520,142
LIABILITIES AND EQUITY
Current Liabilities
Amounts due to banks (Note 9)
$
143,780
$
10,520
Trade accounts payable
364,934
296,590
Accrued employee compensation and benefits
116,158
104,374
Dividends payable
43,328
42,158
Other current liabilities
288,491
325,156
Current portion of long-term debt (Note 9)
—
100,004
Total Current Liabilities
956,691
878,802
Long-term debt, less current portion (Note 9)
1,150,228
1,150,551
Deferred income taxes (Note 13)
52,104
10,464
Other liabilities
148,760
152,892
Total Liabilities
2,307,783
2,192,709
Shareholders' Equity
Preferred shares, without par value - at stated capital amount; authorized - 5,000,000 shares; issued and outstanding - none
—
—
Common shares, without par value - at stated capital amount; authorized - 240,000,000 shares; issued - 98,581,434 shares in 2025 and 2024; outstanding - 54,845,950 shares in 2025 and 56,211,219 shares in 2024
9,858
9,858
Additional paid-in capital
601,566
566,740
Retained earnings
4,342,080
3,993,016
Accumulated other comprehensive loss (Note 8)
( 205,931 )
( 300,135 )
Treasury shares, at cost - 43,735,484 shares in 2025 and 42,370,215 shares in 2024
( 3,277,779 )
( 2,942,046 )
Total Equity
1,469,794
1,327,433
TOTAL LIABILITIES AND TOTAL EQUITY
$
3,777,577
$
3,520,142
See notes to these consolidated financial statements.
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LINCOLN ELECTRIC HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(In thousands, except per share amounts)
Accumulated
Common
Additional
Other
Shares
Common
Paid-In
Retained
Comprehensive
Treasury
Outstanding
Shares
Capital
Earnings
Income (Loss)
Shares
Total
Balance at December 31, 2022
57,624
$
9,858
$
481,857
$
3,306,500
$
( 275,398 )
$
( 2,488,776 )
$
1,034,041
Net income
545,248
545,248
Defined benefit pension plan activity, net of tax
( 215 )
( 215 )
Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax
2,627
2,627
Currency translation adjustment
43,139
43,139
Cash dividends declared – $ 2.63 per share
( 151,513 )
( 151,513 )
Stock-based compensation activity
451
43,609
4,987
48,596
Purchase of shares for treasury
( 1,098 )
( 198,765 )
( 198,765 )
Other
( 2,109 )
( 12,197 )
( 14,306 )
Balance at December 31, 2023
56,977
9,858
523,357
3,688,038
( 229,847 )
( 2,682,554 )
1,308,852
Net income
466,108
466,108
Defined benefit pension plan activity, net of tax
948
948
Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax
719
719
Currency translation adjustment
( 71,955 )
( 71,955 )
Cash dividends declared – $ 2.88 per share
( 163,875 )
( 163,875 )
Stock-based compensation activity
463
47,197
4,259
51,456
Purchase of shares for treasury
( 1,229 )
( 263,751 )
( 263,751 )
Other
( 3,814 )
2,745
( 1,069 )
Balance at December 31, 2024
56,211
9,858
566,740
3,993,016
( 300,135 )
( 2,942,046 )
1,327,433
Net income
520,533
520,533
Defined benefit pension plan activity, net of tax
( 14 )
( 14 )
Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax
432
432
Currency translation adjustment
93,786
93,786
Cash dividends declared – $ 3.04 per share
( 168,135 )
( 168,135 )
Stock-based compensation activity
268
29,351
2,575
31,926
Purchase of shares for treasury
( 1,633 )
( 338,308 )
( 338,308 )
Other
5,475
( 3,334 )
2,141
Balance at December 31, 2025
54,846
$
9,858
$
601,566
$
4,342,080
$
( 205,931 )
$
( 3,277,779 )
$
1,469,794
See notes to these consolidated financial statements.
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LINCOLN ELECTRIC HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended December 31,
2025
2024
2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income
$
520,533
$
466,108
$
545,248
Adjustments to reconcile Net income to Net cash provided by operating activities:
Rationalization and asset impairment net charges (Note 7)
1,141
20,887
4,779
Depreciation and amortization
98,546
88,238
86,670
Gain on sale of property
—
—
( 36,187 )
Deferred income taxes (Note 13)
82,744
( 40,328 )
( 20,926 )
Stock-based compensation
20,348
24,052
26,231
Pension settlement net charges
719
3,792
—
Other, net
2,655
( 6,780 )
( 17,464 )
Changes in operating assets and liabilities, net of effects from acquisitions:
(Increase) decrease in accounts receivable
( 26,433 )
52,829
14,980
(Increase) decrease in inventories
( 47,783 )
25,355
122,094
Increase in other current assets
( 10,568 )
( 41,558 )
( 35,608 )
Increase (decrease) in trade accounts payable
56,257
( 27,189 )
( 32,028 )
(Decrease) increase in other current liabilities
( 26,090 )
32,703
10,056
Net change in other assets and liabilities
( 10,896 )
868
( 303 )
NET CASH PROVIDED BY OPERATING ACTIVITIES
661,173
598,977
667,542
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures
( 126,974 )
( 116,603 )
( 90,987 )
Acquisition of businesses, net of cash acquired (Note 4)
( 137,530 )
( 252,746 )
( 32,685 )
Proceeds from sale of property, plant and equipment
7,178
7,798
49,494
Other investing activities
—
320
( 551 )
NET CASH USED BY INVESTING ACTIVITIES
( 257,326 )
( 361,231 )
( 74,729 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from (payments on) on short-term borrowings
133,252
8,449
( 79,873 )
Proceeds from long-term borrowings
—
550,000
—
Payments on long-term borrowings
( 100,169 )
( 400,677 )
( 8,109 )
Proceeds from exercise of stock options
11,578
27,404
22,365
Purchase of shares for treasury
( 338,308 )
( 263,751 )
( 198,765 )
Cash dividends paid to shareholders
( 168,240 )
( 162,143 )
( 148,010 )
Other financing activities
—
( 3,922 )
—
NET CASH USED BY FINANCING ACTIVITIES
( 461,887 )
( 244,640 )
( 412,392 )
Effect of exchange rate changes on Cash and cash equivalents
( 10,433 )
( 9,631 )
16,216
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
( 68,473 )
( 16,525 )
196,637
Cash and cash equivalents at beginning of period
377,262
393,787
197,150
CASH AND CASH EQUIVALENTS AT END OF PERIOD
$
308,789
$
377,262
$
393,787
See notes to these consolidated financial statements.
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LINCOLN ELECTRIC HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of Lincoln Electric Holdings, Inc. and its wholly-owned and majority-owned subsidiaries for which it has a controlling interest (the "Company") after elimination of all inter-company accounts, transactions and profits.
Certain reclassifications have been made to the prior period amounts to conform to the current period presentation, none of which are material.
General Information
The Company is a high-performance industrial machinery and technology leader who helps customers manufacture and maintain vital equipment and infrastructure. 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.
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. 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.
Translation of Foreign Currencies
Asset and liability accounts are translated into U.S. dollars using exchange rates in effect at the dates of the Consolidated Balance Sheets; revenue and expense accounts are translated at average monthly exchange rates. Translation adjustments are reflected as a component of Total equity.
The translation of assets and liabilities originally denominated in foreign currencies into U.S. dollars is for consolidation purposes and does not necessarily indicate that the Company could realize or settle the reported value of those assets and liabilities in U.S. dollars. Additionally, such a translation does not necessarily indicate that the Company could return or distribute the reported U.S. dollar value of the net equity of its foreign operations to shareholders.
Foreign currency transaction net (gains) losses are included in Selling, general & administrative expenses and were ($ 4,638 ), ($ 1,406 ) and $ 1,744 in 2025, 2024 and 2023, respectively.
Cash Equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
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Inventories
Inventories are valued at the lower of cost or net realizable value. 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 last-in, first-out (“LIFO”) basis. At December 31, 2025 and 2024, approximately 38 % and 35 % of total inventories, respectively, were valued using the LIFO method. Cost of other inventories is determined by costing methods that approximate a first-in, first-out (“FIFO”) basis. Refer to Note 16 for additional details.
Long-lived Assets
Property, Plant and Equipment
Property, plant and equipment are stated at cost and include improvements which significantly increase capacities or extend the useful lives of existing plant and equipment. Depreciation and amortization are computed using a straight-line method over useful lives ranging from 3 years to 20 years for machinery, tools and equipment, and up to 40 years for buildings. Net gains or losses related to asset dispositions are recognized in earnings in the period in which dispositions occur.
Routine maintenance, repairs and replacements are expensed as incurred. The Company capitalizes interest costs associated with long-term construction in progress.
Property, plant and equipment, net in the Consolidated Balance Sheet is comprised of the following components:
December 31,
2025
2024
Land
$
66,036
$
64,016
Buildings
499,506
445,319
Machinery and equipment
1,080,026
975,480
1,645,568
1,484,815
Less accumulated depreciation
942,806
865,634
Total
$
702,762
$
619,181
Leases
The Company determines if an agreement is a lease at inception. The Company records a right-of-use asset on its Consolidated Balance Sheets to represent its right to use an underlying asset for the lease term. The Company records a lease liability on its Consolidated Balance Sheets to represent its obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of the Company’s operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on information available at commencement date to present value the lease payments.
The Company has operating leases for sales offices, manufacturing facilities, warehouses and distribution centers, transportation equipment, office equipment and information technology equipment. Some of these leases are noncancelable. Variable or short-term lease costs contained within the Company’s operating leases are not material. Most leases include one or more options to renew , which can extend the lease term from 1 to 11 years or more. The exercise of lease renewal options is at the Company’s sole discretion. Certain leases also include options to purchase the leased property. Leases with an initial term of 12 months or less are not recorded on the Company’s Consolidated Balance Sheets. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.
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The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Impairments
The Company periodically evaluates whether current facts or circumstances indicate that the carrying value of its depreciable long-lived assets, including right-of-use assets and finite-lived intangible assets, to be held and used may not be recoverable. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by the long-lived asset, or the appropriate grouping of assets, is compared to the carrying value to determine whether impairment exists. If an asset is determined to be impaired, a loss is recognized to the extent that carrying value exceeds fair value. Fair value is measured based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows. Refer to Notes 5, 7 and 17 for additional details.
Goodwill and Intangibles
Goodwill is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired. Intangible assets other than goodwill are recorded at fair value at the time acquired or at cost, if applicable. Intangible assets that do not have indefinite lives are amortized in line with the pattern in which the economic benefits of the intangible asset are consumed. If the pattern of economic benefit cannot be reliably determined, the intangible assets are amortized on a straight-line basis over the shorter of the legal or estimated life. These types of assets are assessed for impairment in a manner consistent with long-lived assets described above. Goodwill and indefinite-lived intangible assets are not amortized, but are tested for impairment in the fourth quarter using the same date each year or more frequently if changes in circumstances or the occurrence of events indicate potential impairment.
In performing the annual impairment test, the fair value of each indefinite-lived intangible asset is compared to its carrying value and an impairment charge is recorded if the carrying value exceeds the fair value. For goodwill, the Company first assesses qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, and whether it is necessary to perform the quantitative goodwill impairment test. The quantitative test is only required if the Company concludes that it is more-likely-than-not that a reporting unit’s fair value is less than 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. 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.
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. 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. Refer to Note 5 for additional details.
Fair Value Measurements
Financial assets and liabilities, such as the Company’s defined benefit pension plan assets and derivative contracts, are valued at fair value using the market and income valuation approaches. Fair value is defined as the price that would be
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received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The following hierarchy is used to classify the inputs that measure fair value:
Level 1
Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.
Level 2
Inputs to the valuation methodology include:
· Quoted prices for similar assets or liabilities in active markets;
· Quoted prices for identical or similar assets or liabilities in inactive markets;
· Inputs other than quoted prices that are observable for the asset or liability; and
· Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
If the asset or liability has a specific (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.
Level 3
Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
Refer to Notes 11 and 15 for additional details.
Revenue Recognition
Revenue is recognized when obligations under the terms of a contract are satisfied and control is transferred to the customer. Revenue is measured as the amount of consideration the Company expects to be entitled to in exchange for goods or services. Substantially all of the Company’s sales arrangements are short-term in nature involving a single performance obligation. The Company recognizes revenue when the performance obligation is satisfied and control of the product is transferred to the customer generally based upon shipping terms. In addition, certain customized automation performance obligations are accounted for over time. Under this method, revenue recognition is primarily based upon the ratio of costs incurred to date compared with estimated total costs to complete. The cumulative impact of revisions to total estimated costs is reflected in the period of the change, including anticipated losses. Approximately 10 % of the Company’s Net sales are recognized over time.
The Company recognizes any discounts, credits, returns, rebates and incentive programs based on reasonable estimates as a reduction of sales to arrive at Net sales at the same time the related revenue is recorded. Taxes collected by the Company, including sales tax and value added tax, are excluded from Net sales. The Company recognizes freight billed as a component of Net sales and shipping costs as a component of Cost of goods sold when control transfers to the customer. Sales commissions are expensed when incurred because the amortization period is generally one year or less. These costs are recorded within Selling, general and administrative expenses in the Company’s Consolidated Statements of Income.
The Company’s payment terms vary by the type and location of the customer and the products or services offered. The Company does not offer any payment terms that would meet the requirements for consideration as a financing component under Accounting Standards Codification Topic 606.
Refer to Note 2 for additional details.
Distribution Costs
Distribution costs, including warehousing and freight related to product shipments, are included in Cost of goods sold.
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Stock-Based Compensation
Expense is recognized for all awards of stock-based compensation by allocating the aggregate grant date fair value over the vesting period. No expense is recognized for any stock options, restricted or deferred shares or restricted stock units ultimately forfeited because the recipients fail to meet vesting requirements.
Common stock issuable upon the exercise of employee stock options is excluded from the calculation of diluted earnings per share when the calculation of option equivalent shares is anti-dilutive. Refer to Note 10 for additional details.
Financial Instruments
The Company uses derivative instruments to manage exposures to interest rates, commodity prices and currency exchange rate fluctuations on certain purchase and sales transactions, balance sheet and net investment exposures. Derivative contracts to hedge currency and commodity exposures are generally written on a short-term basis, but may cover exposures for up to 3 years while interest rate contracts may cover longer periods consistent with the terms of the underlying debt. The Company does not enter into derivatives for trading or speculative purposes.
All derivatives are recognized at fair value on the Company’s Consolidated Balance Sheets. The accounting for gains and losses resulting from changes in fair value depends on the use of the derivative and whether it is designated and qualifies for hedge accounting. The Company formally documents the relationship of the hedge with the hedged item as well as the risk-management strategy for all designated hedges. Both at inception and on an ongoing basis, the hedging instrument is assessed as to its effectiveness, when applicable. If and when a derivative is determined not to be highly effective as a hedge, the underlying hedged transaction is no longer likely to occur, or the derivative is terminated, hedge accounting is discontinued. The cash flows from settled derivative contracts are recognized in Net cash provided by operating activities in the Company’s Consolidated Statements of Cash Flows.
The Company is subject to the credit risk of the counterparties to derivative instruments. Counterparties include a number of major banks and financial institutions. The Company manages individual counterparty exposure by monitoring the credit rating of the counterparty and the size of financial commitments and exposures between the Company and the counterparty.
Cash flow hedges
Certain foreign currency forward contracts and commodity contracts are qualified and designated as cash flow hedges. The effective portion of the fair value unrealized gain or loss on cash flow hedges are reported as a component of Accumulated other comprehensive income ("AOCI") with offsetting amounts recorded as Other current assets, Other assets, Other current liabilities or Other liabilities depending on the position and the duration of the contract. At settlement, the realized gain or loss is recorded in Cost of goods sold or Net sales for hedges of purchases and sales, respectively, in the same period or periods during which the hedged transaction affects earnings. The ineffective portion on cash flow hedges is recognized in current earnings.
Net investment hedges
The Company has foreign currency forward contracts and zero-cost collar contracts that qualify and are designated as net investment hedges. For derivative instruments that qualify as a net investment hedge, the effective portion of the fair value gains or losses are recognized in AOCI with offsetting amounts recorded as Other current assets, Other assets, Other current liabilities or Other liabilities depending on the position and the duration of the contract. The gains or losses are subsequently reclassified to Selling, general and administrative expenses, as the underlying hedged investment is liquidated.
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Derivatives not designated as hedging instruments
The Company has certain foreign exchange forward contracts which are not designated as hedges. These derivatives are held as hedges of certain balance sheet exposures. The gains or losses on t hese contracts are recognized in Selling, general and administrative expenses, offsetting the losses or gains on the exposures being hedged.
Refer to Note 14 for additional details.
Research and Development
Research and development costs are charged to Selling, general and administrative expenses as incurred and totaled $ 85,550 , $ 81,821 and $ 71,235 in 2025, 2024 and 2023, respectively.
Bonus
The Company’s discretionary employee bonus programs, which for certain U.S.-based employees are net of medical costs, are included in Selling, general and administrative expenses. Bonus costs were $ 180,708 , $ 166,554 and $ 192,498 in 2025, 2024 and 2023, respectively.
Income Taxes
Deferred income taxes are recognized at currently enacted tax rates for temporary differences between the GAAP and income tax basis of assets and liabilities and operating loss and tax credit carry-forwards. In assessing the realizability of deferred tax assets, the Company assesses whether it is more-likely-than-not that a portion or all of the deferred tax assets will not be realized.
The Company maintains liabilities for unrecognized tax benefits related to uncertain income tax positions in various jurisdictions. The Company uses judgment in determining whether the technical merits of tax positions are more-likely-than-not to be sustained. Judgment is also used in measuring the related amount of tax benefit that qualifies for recognition, including the interpretation of applicable tax law, regulations and tax rulings.
The Company elects to treat any Global Intangible Low Taxed Income inclusion as a period expense in the year incurred.
Refer to Note 13 for additional details.
Acquisitions
The acquisition of a business is accounted for as a business combination, which requires the assets acquired and liabilities assumed be recognized at their respective fair values as of the acquisition date. The process of estimating the fair values of certain tangible assets, identifiable intangible assets and assumed liabilities requires the use of judgment in determining the appropriate assumptions and estimates. The Company uses the income, market or cost approach (or a combination thereof) for the valuation as appropriate. The valuation inputs in these models and analyses are based on market participant assumptions. Market participants are considered to be buyers and sellers unrelated to the Company in the principal or most advantageous market for the asset or liability.
Fair value estimates are based on a series of judgments about future events and uncertainties and rely on estimates and assumptions. Management values property, plant and equipment using the cost approach supported where available by observable market data, which includes consideration of obsolescence. Management values acquired intangible assets using the relief from royalty method or excess earnings method, forms of the income approach supported by observable market data for peer companies. The significant assumptions used to estimate the value of the acquired intangible assets include discount rates and certain assumptions that form the basis of future cash flows (such as revenue growth rates, customer attrition rates, and royalty rates). Acquired inventories are marked to fair value. For certain items, the pre-
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acquisition carrying value is determined to be a reasonable approximation of fair value based on information available to the Company. Refer to Note 4 for additional details.
Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions in certain circumstances that affect the amounts reported in the accompanying consolidated financial statements and notes. Actual results could differ from these estimates.
New Accounting Pronouncements
The following section provides a description of new Accounting Standards Updates (“ASU”) issued by the Financial Accounting Standards Board ("FASB") that are applicable to the Company.
The following ASU was adopted as of January 1, 2025 and did not have a significant financial impact on the Company’s consolidated financial statements unless otherwise described within the table below:
Standard
Description
ASU No. 2023-09, Income Taxes (Topic 740) , issued December 2023.
Requires disclosure of specific categories in rate reconciliation and additional information for reconciling items that meet a quantitative threshold, additional information about income taxes paid, and disclosure of disaggregated income tax information. The amendments are effective January 1, 2025. Refer to Note 13 for the disclosure impacts.
The Company is currently evaluating the impact on its financial statements of the following ASUs:
Standard
Description
ASU No. 2025-09, Derivatives and Hedging , issued November 2025
Updates hedge accounting guidance to better align with financial reporting with risk management activities. The amendments are effective for annual periods beginning after December 15, 2026 and interim periods within those annual reporting periods. Early adoption is permitted.
ASU No. 2025-06, Goodwill and Other – Internal-Use Software , issued September 2025
Updates requirements for capitalization of internal-use software costs. The amendments are effective for annual periods beginning after December 15, 2027 and interim periods within those annual reporting periods. Early adoption is permitted.
ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures , issued November 2024
Requires enhanced disclosures of specified information about certain costs and expenses. The amendments are effective for annual periods beginning January 1, 2027, and interim periods beginning January 1, 2028. Early adoption is prohibited.
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NOTE 2 — REVENUE RECOGNITION
The following table presents the Company’s Net sales disaggregated by product line:
Year Ended December 31,
2025
2024
2023
Consumables
$
2,283,101
$
2,088,721
$
2,212,314
Equipment
1,079,603
1,008,524
1,038,290
Automation
870,299
911,425
941,032
Net sales
$
4,233,003
$
4,008,670
$
4,191,636
Consumable sales consist of welding, brazing and soldering filler metals. Equipment sales consist of arc welding equipment, laser, plasma and oxyfuel cutting systems, wire feeding systems, fume control equipment, welding accessories, specialty gas regulators, mobile power equipment, wear solutions, software and education solutions. Automation sales consist of a comprehensive portfolio of solutions for joining, cutting, material handling, module assembly, and end of line testing. Consumable and Equipment products are sold within each of the Company’s operating segments. Automation products are sold within the Company’s Americas Welding and International Welding operating segments.
Within the Automation product line, there are certain customer contracts that may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines the standalone selling price based on the prices charged to customers or using expected cost plus margin. Approximately 10 % of the Company’s Net sales are recognized over time.
At December 31, 2025, the Company recorded $ 49,451 related to advance customer payments and $ 62,778 related to billings in excess of revenue recognized. These contract liabilities are included in Other current liabilities in the Consolidated Balance Sheets. At December 31, 2024, the balances related to advance customer payments and billings in excess of revenue recognized were $ 63,473 and $ 57,960 , respectively. Substantially all of the Company’s contract liabilities are recognized within twelve months based on contract duration. The Company records an asset for contracts where it has recognized revenue, but has not yet invoiced the customer for goods or services. At December 31, 2025 and 2024, $ 78,211 and $ 81,781 , respectively, related to these contract assets which are included in Other current assets in the Consolidated Balance Sheets. Contract asset amounts are expected to be billed within the next twelve months.
NOTE 3 - EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per share:
Year Ended December 31,
2025
2024
2023
Numerator:
Net income
$
520,533
$
466,108
$
545,248
Denominator (shares in 000's):
Basic weighted average shares outstanding
55,410
56,639
57,364
Effect of dilutive securities - Stock options and awards
465
555
857
Diluted weighted average shares outstanding
55,875
57,194
58,221
Basic earnings per share
$
9.39
$
8.23
$
9.50
Diluted earnings per share
$
9.32
$
8.15
$
9.37
For the years ended December 31, 2025, 2024 and 2023, common shares subject to equity-based awards of 19,194 , 20,495 and 69,901 , respectively, were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive.
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NOTE 4 – ACQUISITIONS
The acquired companies are accounted for as business combinations and are included in the consolidated financial statements as of the date of acquisition. The acquired companies discussed below are not material individually, or in the aggregate, to the actual or pro forma Consolidated Statements of Income or Consolidated Statements of Cash Flows; as such, pro forma information related to these acquisitions has not been presented.
On April 1, 2025, the Company acquired a 35 % ownership interest in Alloy Steel Australia (Int) Pty Ltd. (“Alloy Steel”), a privately held manufacturer of maintenance and repair solutions headquartered in Perth, Australia. On August 1, 2025, the Company acquired the remaining 65 % ownership interest in Alloy Steel. In total, the Company acquired 100 % ownership of Alloy Steel for a total purchase price of $ 131,427 , net of cash acquired and certain debt-like items. In 2024, Alloy Steel generated sales of approximately $ 48,000 (unaudited). Alloy Steel supplies proprietary technology, engineering services and digital monitoring to the mining sector.
On July 30, 2024, the Company acquired 100 % ownership of Vanair Manufacturing, LLC (“Vanair”), a privately held, Michigan City, Indiana-based, manufacturer for a total purchase price of $ 108,651 , net of cash acquired and certain debt-like items. Vanair offers a comprehensive portfolio of mobile power solutions, including vehicle-mounted compressors, generators, welders, hydraulics, chargers/boosters, and electrified power equipment.
On June 3, 2024, the Company acquired 100 % ownership of Inrotech A/S (“Inrotech”), a privately held automation system integration and technology firm headquartered in Odense, Denmark. The purchase price was $ 42,352 , net of cash acquired. Inrotech specializes in automated welding systems that are differentiated by proprietary adaptive intelligence software and computer vision which guides and optimizes the welding process without the need for programming or the use of computer aided design files. The state-of-the-art vision-based technology is used in the shipbuilding, energy, and heavy industry sectors, where welding accessibility can be challenging for traditional automated systems, but precision and quality are mission critical.
On April 1, 2024, the Company acquired 100 % ownership of Superior Controls, LLC (“RedViking”), a privately held automation system integrator based in Plymouth, Michigan. The purchase price was $ 107,447 , net of cash acquired. RedViking specializes in the development and integration of state-of-the-art autonomous guided vehicles and mobile robots, custom assembly and dynamic test systems, and proprietary manufacturing execution system software. The acquisition broadened the Company’s portfolio of automation solutions and extends the Company’s ability to serve customers in the growing aerospace and defense industries.
On May 3, 2023, the Company acquired 100 % ownership of Powermig Automação e Soldagem Ltda. (“Powermig”), a privately held automation engineering firm headquartered in Caxias do Sul, Rio Grande do Sul, in Brazil. The purchase price was $ 29,572 , net of cash acquired. Powermig specializes in designing and engineering industrial welding automation solutions for the heavy industry and transportation sectors. The acquisition broadened the Company’s automation portfolio and capabilities.
During the years ended December 31, 2025, 2024 and 2023, the Company recognized acquisition costs of $ 2,739 , $ 7,042 and $ 0 respectively, which are included in Selling, general and administrative expenses on the Consolidated Statements of Income and are expensed as incurred.
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NOTE 5 – GOODWILL AND INTANGIBLES
The changes in the carrying amount of goodwill by reportable segments for the years ended December 31, 2025 and 2024 were as follows:
The Harris
Americas
International
Products
Welding
Welding
Group
Consolidated
Balance as of December 31, 2023
$
497,600
153,479
43,373
694,452
Additions and adjustments (1)
101,657
33,427
—
135,084
Foreign currency translation
( 13,443 )
( 10,644 )
( 522 )
( 24,609 )
Balance as of December 31, 2024
585,814
176,262
42,851
804,927
Additions and adjustments (2)
( 662 )
57,575
—
56,913
Foreign currency translation
8,048
16,220
578
24,846
Balance as of December 31, 2025
$
593,200
$
250,057
$
43,429
$
886,686
(1) Additions to Americas Welding reflect goodwill recognized in the acquisitions of Vanair and RedViking. Additions to International Welding reflect goodwill recognized in the acquisition of Inrotech.
(2) Decreases to Americas Welding reflects Vanair and RedViking purchase accounting adjustments. Additions to International Welding reflect goodwill recognized in the acquisition of Alloy Steel .
Gross carrying values and accumulated amortization of intangible assets other than goodwill by asset class were as follows:
December 31, 2025
December 31, 2024
Gross
Accumulated
Gross
Accumulated
Amount
Amortization
Amount
Amortization
Intangible assets not subject to amortization
Trademarks and trade names
$
16,311
$
16,208
Intangible assets subject to amortization
Trademarks and trade names
$
109,798
$
57,807
$
106,512
$
55,078
Customer relationships
217,968
115,783
192,196
106,719
Technology and know-how
102,495
36,483
82,019
29,478
Patents
24,173
16,820
23,901
16,008
Other
44,260
37,688
42,315
34,863
Total intangible assets subject to amortization
$
498,694
$
264,581
$
446,943
$
242,146
During 2025, the Company acquired intangible assets either individually or as part of a group of assets, with an initial purchase price allocation and weighted-average useful-life as follows:
Year Ended December 31, 2025
Purchase Price
Weighted
Allocation
Average Life
Acquired intangible assets subject to amortization
Trademarks and trade names
$
7,407
15
Customer relationships
25,491
14
Technology and know-how
19,685
20
Other
1,295
5
Total acquired intangible assets subject to amortization
$
53,878
Aggregate amortization expense was $ 29,717 , $ 27,075 and $ 25,983 for 2025, 2024 and 2023, respectively. At December 31, 2025, the Company’s estimated annual amortization expense for intangible assets for each of the next five years is $ 33,696 in 2026, $ 31,456 in 2027, $ 30,143 in 2028, $ 25,961 in 2029 and $ 22,034 in 2030.
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NOTE 6 – SEGMENT INFORMATION
The Company is a high-performance industrial machinery and technology leader who helps customers manufacture and maintain vital equipment and infrastructure. 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.
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. Services include additive manufacturing, precision fabrication, wear services, upfitting, and training.
The Company has aligned its organizational and leadership structure into three operating segments to support growth strategies and enhance the utilization of the Company’s worldwide resources and global sourcing initiatives. The operating segments consist of Americas Welding, International Welding and The Harris Products Group. The Americas Welding segment includes welding operations in North and South America. The International Welding segment includes welding operations in Europe, Africa, Asia and Australia. The Harris Products Group includes the Company’s global cutting, soldering and brazing businesses, specialty gas equipment, as well as its retail business in the United States.
Segment performance is measured and resources are allocated based on a number of factors, the primary measure being the adjusted earnings before interest and income taxes ("Adjusted EBIT") profit measure. Adjusted EBIT is defined as Operating income plus Other income (expense), adjusted for special items as determined by management such as the impact of rationalization activities, certain asset impairment charges and gains or losses on disposals of assets.
The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer. The CODM uses segment Adjusted EBIT to allocate resources for each segment predominantly in establishing the Company’s long-term strategy and in developing the annual budget. The CODM considers actual performance using Adjusted EBIT when making decisions about allocating capital and resources to the segments.
The accounting principles applied at the operating segment level are generally the same as those applied at the consolidated financial statement level with the exception of LIFO. Segment assets include inventories measured on a FIFO basis while consolidated inventories include inventories reported on a LIFO basis. Segment and consolidated income before interest and income taxes include the effect of inventories reported on a LIFO basis. At December 31, 2025, 2024 and 2023 approximately 38 %, 35 % and 37 %, respectively, of total inventories were valued using the LIFO method. LIFO is used for a substantial portion of U.S. inventories included in Americas Welding. Inter-segment sales are recorded at agreed upon prices that approximate arm’s length prices and are eliminated in consolidation. Corporate-level expenses are allocated to the operating segments.
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The following tables present Adjusted EBIT by segment and other segment information:
The Harris
Americas
International
Products
Welding
Welding
Group
Total
For the Year Ended December 31, 2025
Net sales
$
2,723,561
$
930,865
$
578,577
$
4,233,003
Inter-segment sales
128,922
30,160
15,084
174,166
2,852,483
961,025
593,661
4,407,169
Reconciliation to Consolidated Net sales
Elimination of inter-segment sales
( 174,166 )
Net sales
$
4,233,003
Cost of goods sold (1)
1,747,274
692,622
430,100
Other segment expenses (1) (4)
581,080
169,260
57,021
Addback: Special items charge (1)
( 10,710 )
( 11,442 )
( 1,068 )
Segment Adjusted EBIT
$
534,839
$
110,585
$
107,608
$
753,032
Other Segment Information
Total assets
$
2,464,376
$
1,244,117
$
431,259
4,139,752
Capital expenditures
( 93,333 )
( 20,509 )
( 13,132 )
( 126,974 )
Depreciation and amortization
67,942
23,549
10,432
101,923
For the Year Ended December 31, 2024
Net sales
$
2,564,847
$
933,722
$
510,101
$
4,008,670
Inter-segment sales
135,758
35,861
12,321
183,940
2,700,605
969,583
522,422
4,192,610
Reconciliation to Consolidated Net sales
Elimination of inter-segment sales
( 183,940 )
Net sales
$
4,008,670
Cost of goods sold (2)
1,638,568
700,428
378,292
Other segment expenses (2) (4)
559,670
200,785
59,757
Addback: Special items charge (2)
( 27,821 )
( 37,747 )
( 3,955 )
Segment Adjusted EBIT
$
530,188
$
106,117
$
88,328
$
724,633
Other Segment Information
Total assets
$
2,416,411
$
1,050,327
$
346,645
$
3,813,383
Capital expenditures
( 94,528 )
( 17,814 )
( 4,144 )
( 116,486 )
Depreciation and amortization
57,016
21,735
10,091
88,842
For the Year Ended December 31, 2023
Net sales
$
2,655,546
$
1,040,006
$
496,084
$
4,191,636
Inter-segment sales
127,536
31,498
10,641
169,675
2,783,082
1,071,504
506,725
4,361,311
Reconciliation to Consolidated Net sales
Elimination of inter-segment sales
( 169,675 )
Net sales
$
4,191,636
Cost of goods sold (3)
1,739,850
776,982
377,748
Other segment expenses (3) (4)
514,821
148,304
54,833
Addback: Special items charge (3)
( 9,858 )
9,721
—
Segment Adjusted EBIT
$
538,269
$
136,497
$
74,144
$
748,910
Other Segment Information
Total assets
$
2,365,737
$
1,046,369
$
340,463
$
3,752,569
Capital expenditures
( 61,752 )
( 20,568 )
( 8,550 )
( 90,870 )
Depreciation and amortization
55,821
22,023
9,611
87,455
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(1) 2025 special items within Other segment expenses primarily include Rationalization and asset impairment net charges of $ 9,838 , $ 7,293 and $ 1,068 in Americas Welding, International Welding and The Harris Products Group, respectively, as discussed in Note 7. In addition, there was a pension settlement net charge of $ 647 in Americas Welding and $ 72 in International Welding. Special items within Cost of goods sold primarily include amortization of the step up in value of acquired inventories of $ 225 in Americas Welding and $ 3,739 in International Welding .
(2) 2024 special items within Other segment expenses primarily include Rationalization and asset impairment net charges of $ 32,960 in International Welding, including the impact of the Company’s disposition of its Russian entity, $ 18,840 in Americas Welding and $ 3,955 in the Harris Products Group. In addition, there was a loss on asset disposal of $ 4,950 recorded to Other (expense) income in International Welding, a pension settlement net charge of $ 4,205 in Americas Welding and a pension settlement net gain of $ 413 in International Welding. Special items within Cost of goods sold primarily include amortization of the step up in value of acquired inventories of $ 4,776 and $ 250 in Americas Welding and International Welding, respectively.
(3) 2023 special items within Other segment expenses primarily include Rationalization and asset impairment net charges of $ 468 in Americas Welding and net gains of $ 11,782 in International Welding. In addition, there was a gain on asset disposal of $ 1,646 and pension settlement net charges of $ 845 in International Welding. Special items within Cost of goods sold primarily include amortization of the step up in value of acquired inventories of $ 9,390 in Americas Welding and $ 2,862 in International Welding.
(4) Other segment expenses primarily include:
a. Selling, general and administrative expenses – including bonus and research and development expenses.
b. Rationalization and asset impairment net charges – refer to Note 7 for further discussion.
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The following table presents reconciliations of segment information to the Company’s consolidated totals:
Year Ended December 31,
2025
2024
2023
Reconciliation of Segment Adjusted EBIT to Consolidated Income before income taxes
Segment Adjusted EBIT
$
753,032
$
724,633
$
748,910
Addback: Segment special items charge
( 23,220 )
( 69,523 )
( 137 )
Corporate special items charge (1)
( 2,401 )
( 7,147 )
—
Elimination of inter-segment profit
( 2,923 )
( 2,410 )
( 1,286 )
Unallocated corporate income (expense)
2,523
( 8,618 )
( 16,250 )
Interest income
6,818
10,130
6,762
Interest expense
( 58,379 )
( 52,916 )
( 51,133 )
Consolidated Income before income taxes
$
675,450
$
594,149
$
686,866
(1) Corporate special items primarily include acquisition transaction costs.
Reconciliation of Other Segment Information to Consolidated Information
Capital expenditures
Segment totals
$
( 126,974 )
$
( 116,486 )
$
( 90,870 )
Adjustments
—
( 117 )
( 117 )
Consolidated totals
$
( 126,974 )
$
( 116,603 )
$
( 90,987 )
Depreciation and amortization
Segment totals
$
101,923
$
88,842
$
87,455
Adjustments
( 3,377 )
( 604 )
( 785 )
Consolidated totals
$
98,546
$
88,238
$
86,670
Reconciliation of Segment Assets to Consolidated Assets
December 31, 2025
December 31, 2024
Total segment assets
$
4,139,752
$
3,813,383
Corporate assets
41,033
20,745
LIFO reserve not allocated to segments
( 138,589 )
( 120,633 )
Eliminations
( 264,619 )
( 193,353 )
Total consolidated assets
$
3,777,577
$
3,520,142
Export sales (excluding inter-company sales) from the United States were $ 191,417 in 2025, $ 244,334 in 2024 and $ 238,704 in 2023. No individual customer comprised more than 10% of the Company’s total revenues in 2025, 2024 or 2023.
The geographic split of the Company’s Net sales, based on the location of the customer, and property, plant and equipment were as follows:
Year Ended December 31,
2025
2024
2023
Net sales:
United States
$
2,632,122
$
2,355,262
$
2,398,560
Foreign countries
1,600,881
1,653,408
1,793,076
Total
$
4,233,003
$
4,008,670
$
4,191,636
F-23
Table of Contents
December 31,
2025
2024
2023
Property, plant and equipment, net:
United States
$
403,122
$
344,533
$
293,172
Foreign countries
299,640
274,648
282,144
Total
$
702,762
$
619,181
$
575,316
NOTE 7 – RATIONALIZATION AND ASSET IMPAIRMENTS
The Company has rationalization plans within all three of its reportable segments. The plans impacted headcount and included the consolidation of manufacturing facilities to better align with the cost structure, economic conditions and operating needs of the business.
The following table present Rationalization and asset impairment net charges/(gains) by segment:
December 31,
2025
2024
2023
Americas Welding
$
9,838
$
18,840
$
468
International Welding (1)
7,293
32,960
( 11,782 )
The Harris Products Group
1,068
3,955
—
Total
$
18,199
$
55,755
$
( 11,314 )
(1) $ 22,566 of International Welding charges in 2024 relate to the Russian entity disposal.
At December 31, 2025 and 2024, rationalization liabilities of $ 7,085 and $ 14,146 , respectively, were recognized in Other current liabilities in the Company's Consolidated Balance Sheet. The Company does not anticipate significant additional charges related to the completion of these plans.
The Company believes the rationalization actions will positively impact future results of operations and will not have a material effect on liquidity and sources and uses of capital. The Company continues to evaluate its cost structure and additional rationalization actions may result in charges in future periods.
The following table summarizes the activity related to the rationalization liabilities:
Americas
International
The Harris
Welding
Welding
Products Group
Consolidated
Balance at December 31, 2023
$
—
$
15,086
$
—
$
15,086
Payments and other adjustments
( 11,957 )
( 21,893 )
( 2,063 )
( 35,913 )
Charged to expense
17,585
14,369
3,019
34,973
Balance at December 31, 2024
$
5,628
$
7,562
$
956
$
14,146
Payments and other adjustments
( 14,522 )
( 8,057 )
( 1,540 )
( 24,119 )
Charged to expense
9,838
6,208
1,012
17,058
Balance at December 31, 2025
$
944
$
5,713
$
428
$
7,085
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Table of Contents
NOTE 8 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ("AOCI")
The following tables set forth the total changes in AOCI by component, net of taxes:
Unrealized gain
(loss) on derivatives
designated and
Defined benefit
Currency
qualifying as cash
pension plan
translation
flow hedges
activity
adjustment
Total
Balance at December 31, 2023
$
16,536
$
( 1,996 )
$
( 244,387 )
$
( 229,847 )
Other comprehensive income (loss) before reclassification
1,831
( 1,591 )
( 71,955 )
( 71,715 )
Amounts reclassified from AOCI
( 1,112 )
2,539
—
1,427
Net current-period other comprehensive income (loss)
719
948
( 71,955 )
( 70,288 )
Balance at December 31, 2024
$
17,255
$
( 1,048 )
$
( 316,342 )
$
( 300,135 )
Other comprehensive income before reclassification
3,820
173
93,786
97,779
Amounts reclassified from AOCI
( 3,388 )
( 187 )
—
( 3,575 )
Net current-period other comprehensive income (loss)
432
( 14 )
93,786
94,204
Balance at December 31, 2025
$
17,687
$
( 1,062 )
$
( 222,556 )
$
( 205,931 )
NOTE 9 – DEBT
At December 31, 2025 and 2024, debt consisted of the following:
December 31,
2025
2024
Long-term debt
Interest Rate
Senior Unsecured Notes
2015 Notes - Series A due August 20, 2025 (1)
3.15
%
$
—
$
100,000
2015 Notes - Series B due August 20, 2030
3.35
%
100,000
100,000
2015 Notes - Series C due April 1, 2035
3.61
%
50,000
50,000
2015 Notes - Series D due April 1, 2045
4.02
%
100,000
100,000
2016 Notes - Series A due October 20, 2028
2.75
%
100,000
100,000
2016 Notes - Series B due October 20, 2033
3.03
%
100,000
100,000
2016 Notes - Series C due October 20, 2037
3.27
%
100,000
100,000
2016 Notes - Series D due October 20, 2041
3.52
%
50,000
50,000
2024 Notes - Series A due August 22, 2029
5.55
%
75,000
75,000
2024 Notes - Series B due August 22, 2031
5.62
%
75,000
75,000
2024 Notes - Series C due June 20, 2034
5.74
%
400,000
400,000
Other borrowings due through 2030
Variable (2)
10
10
1,150,010
1,250,010
Plus interest rate swap adjustment
2,678
3,355
Less current portion
—
100,004
Less debt issuance costs
2,460
2,810
Long-term debt, less current portion
1,150,228
1,150,551
Short-term debt
Amounts due to banks
Variable (3)
143,780
10,520
Current portion long-term debt
—
100,004
Total short-term debt
143,780
110,524
Total debt
$
1,294,008
$
1,261,075
F-25
Table of Contents
(1) On August 20, 2025, the Company repaid the Series A notes in full at maturity.
(2) Interest rate was 7.97 % for both years ended December 31, 2025 and 2024.
(3) Weighted average interest rate on the revolving credit facility was 4.7 % as of December 31, 2025. Weighted average interest of other lines of credit related to liquidity needs in a hyperinflationary country was 41.6 % in 2025 and 47.8 % in 2024.
At December 31, 2025 and 2024, the fair value of long-term debt, including the current portion, was approximately $ 1,125,338 and $ 1,184,313 , respectively. The approximate fair value of the Company’s long-term debt, including current maturities, was based on a valuation model using Level 2 observable inputs using available market information and methodologies requiring judgment. The carrying value of this debt at such dates was $ 1,150,232 and $ 1,250,555 respectively. Since judgment is required in interpreting market information, the fair value of the debt is not necessarily the amount which could be realized in a current market exchange.
Senior Unsecured Notes
On June 20, 2024, the Company entered into a Note Purchase Agreement (the “NPA”) pursuant to which it agreed to issue new senior unsecured notes (“2024 Notes”) in an aggregate principal amount of $ 550,000 , at par. Pursuant to the NPA, the Company issued one series of the 2024 Notes in the aggregate principal amount of $ 400,000 on June 20, 2024, and two series of the 2024 Notes each in the aggregate principal amount of $ 75,000 on August 22, 2024.
On April 1, 2015 and October 20, 2016 , the Company entered into separate Note Purchase Agreements pursuant to which it issued senior unsecured notes each in the aggregate principal amount of $ 350,000 , at par. On August 20, 2025, the Company repaid its $ 100,000 2015 Series A notes in full at maturity.
As of December 31, 2025, the Company’s total weighted average effective interest rate and remaining weighted average tenure of the senior unsecured notes is 4.2 %, including the impact from terminated swap agreements and 8.7 years, respectively. Interest on the senior unsecured notes is paid semi-annually. The senior unsecured notes contain certain affirmative and negative covenants. As of December 31, 2025, the Company was in compliance with all of its debt covenants relating to the senior unsecured notes.
Revolving Credit Agreements
On June 20, 2024, the Company terminated its existing $ 500,000 revolving credit facility and entered into a $ 1 billion revolving credit facility, which may be increased, subject to certain conditions including the consent of its lenders, by an additional amount up to $ 300,000 . The revolving credit facility matures on June 20, 2029. The revolving credit facility will initially bear interest on outstanding borrowings at a per annum rate equal to SOFR plus 1.10 % and could fluctuate based on the Company’s total net leverage ratio at a spread ranging from SOFR plus 1.10 % to SOFR plus 1.60 %. The financial covenants consist of a maximum net leverage ratio of 3.5 x EBITDA and a minimum interest coverage ratio of 2.5 x EBITDA. The revolving credit facility contains customary representations and warranties, as well as customary affirmative, negative and financial covenants for credit facilities of this type (subject to negotiated baskets and exceptions), including limitations on the Company and its subsidiaries with respect to liens, investments, distributions, mergers and acquisitions, dispositions of assets and transactions with affiliates. As of December 31, 2025, the Company was in compliance with all of its covenants . The Company had borrowings under the revolving credit facility of $ 142,000 as of December 31, 2025.
The Company has other lines of credit and debt agreements totaling $ 26,854 . As of December 31, 2025 the Company was in compliance with all of its covenants and had outstanding debt under short-term lines of credit of $ 1,780 .
F-26
Table of Contents
Other
Maturities of long-term debt, including payments for amounts due banks, for the five years succeeding December 31, 2025 are $ 143,780 in 2026, $ 6 in 2027, $ 100,000 in 2028, $ 75,000 in 2029, $ 100,000 in 2030 and $ 875,000 thereafter. Total interest paid was $ 58,829 in 2025, $ 51,264 in 2024 and $ 49,366 in 2023. The difference between interest paid and interest expense is due to the accrual of interest associated with the Senior Unsecured Notes and interest rate derivative contracts discussed in Note 14.
NOTE 10 – STOCK PLANS
On April 19, 2023, the shareholders of the Company approved the 2023 Equity and Incentive Compensation Plan ("2023 Employee Plan"), which replaced the 2015 Equity and Incentive Compensation Plan (“2015 Employee Plan”). The 2023 Employee Plan provides for the granting of options, appreciation rights, restricted shares, restricted stock units and performance-based awards up to an additional 2,025,000 of the Company’s common shares. In addition, on April 19, 2023, the shareholders of the Company approved the 2023 Stock Plan for Non-Employee Directors ("2023 Director Plan"), which replaced the 2015 Stock Plan for Non-Employee Directors (“2015 Director Plan”). The 2023 Director Plan provides for the granting of options, restricted shares and restricted stock units up to an additional 200,000 of the Company’s common shares. At December 31, 2025, there were 1,828,205 common shares available for future grant under all plans.
Stock Options
The following table summarizes stock option activity for the year ended December 31, 2025 under all Plans:
Weighted
Average
Number of
Exercise
Options
Price
Balance at beginning of year
696,546
$
135.17
Options granted
54,495
215.90
Options exercised
( 126,092 )
91.83
Options canceled
( 449 )
69.67
Options forfeited
( 2,817 )
233.40
Balance at end of year
621,683
150.63
Exercisable at end of year
521,057
137.09
Options granted under the 2023 Employee Plan and its predecessor plans may be outstanding for a maximum of 10 years from the date of grant. The majority of options granted vest ratably over a period of 3 years from the grant date. The exercise prices of all options were equal to the quoted market price of the Company’s common shares at the date of grant. The Company issued shares of common stock from treasury upon all exercises of stock options in 2025. In 2025, all options issued were under the 2023 Employee Plan.
The Company uses the Black-Scholes option pricing model for estimating fair values of options. In estimating the fair value of options granted, the expected option life is based on the Company’s historical experience. The expected volatility is based on historical volatility. The weighted average assumptions for each of the three years ended December 31 were as follows:
2025
2024
2023
Expected volatility
26.18
%
26.90
%
27.63
%
Dividend yield
1.60
%
1.40
%
1.59
%
Risk-free interest rate
4.37
%
4.26
%
4.04
%
Expected option life (years)
4.8
4.8
4.8
Weighted average fair value per option granted during the year
$
55.85
$
66.20
$
46.94
F-27
Table of Contents
The following table summarizes non-vested stock options for the year ended December 31, 2025:
Weighted Average
Number of
Fair Value at
Options
Grant Date
Balance at beginning of year
110,567
$
53.42
Granted
54,495
55.85
Vested
( 61,170 )
47.47
Canceled
( 449 )
16.49
Forfeited
( 2,817 )
61.67
Balance at end of year
100,626
58.05
The aggregate intrinsic value of options outstanding and exercisable which would have been received by the optionees had all awards been exercised at December 31, 2025 was $ 55,960 and $ 53,811 , respectively. The total intrinsic value of awards exercised during 2025, 2024 and 2023 was $ 16,162 , $ 47,929 and $ 35,414 , respectively. The total fair value of options that vested during 2025, 2024 and 2023 was $ 2,931 , $ 8,367 and $ 3,684 , respectively.
The following table summarizes information about awards outstanding as of December 31, 2025:
Outstanding
Exercisable
Weighted
Weighted
Weighted
Weighted
Number of
Average
Average
Number of
Average
Average
Stock
Exercise
Remaining
Stock
Exercise
Remaining
Exercise Price Range
Options
Price
Life (years)
Options
Price
Life (years)
Under $ 99.99
86,768
$
86.43
2.95
86,768
$
86.43
2.95
$ 100.00 - $ 199.99
387,136
133.64
5.95
374,189
132.17
5.91
Over $ 200.00
147,779
232.85
8.47
60,100
240.86
8.13
621,683
6.13
521,057
5.67
Restricted Stock Units ("RSUs") and Performance Share Units ("PSUs")
The following table summarizes RSU and PSU activity for the year ended December 31, 2025 under all Plans:
Weighted
Average
Number of
Grant Date
Units
Fair Value
Balance at beginning of year
293,418
$
176.70
Units granted
118,411
205.23
Units vested
( 162,121 )
145.66
Units forfeited
( 7,934 )
201.11
Balance at end of year
241,774
210.59
RSUs are valued at the quoted market price on the grant date. The majority of RSUs vest over a period of 3 years . The Company issues shares of common stock from treasury upon the vesting of RSUs and any earned dividend equivalents. Conversion of 28,634 RSUs and PSUs to common shares in 2025 were deferred as part of the 2005 Deferred Compensation Plan for Executives (the "2005 Plan"). As of December 31, 2025, 111,088 RSUs and PSUs, including related dividend equivalents, have been deferred under the 2005 Plan. These units are reflected within dilutive shares in the calculation of earnings per share. In 2025, 70,355 RSUs were issued under the 2023 Employee Plan and the 2023 Director Plan. The remaining weighted average vesting period of all non-vested RSUs is 1.9 years as of December 31, 2025.
PSUs are valued at the quoted market price on the grant date. PSUs vest over a period of 3 years and are based on the Company’s performance relative to pre-established performance goals. The Company issues common stock from treasury upon the vesting of PSUs and any earned dividend equivalents. In 2025, the Company issued 48,056 PSUs and
F-28
Table of Contents
has 73,566 PSUs outstanding as of December 31, 2025 under the 2015 and 2023 Employee Plans at a weighted average fair value of $ 213.01 per share. The remaining weighted average vesting period of all non-vested PSUs is 1.6 years as of December 31, 2025.
Stock-Based Compensation Expense
Expense is recognized for all awards of stock-based compensation by allocating the aggregate grant date fair value over the vesting period. No expense is recognized for any stock options, restricted or deferred shares, RSUs or PSUs ultimately forfeited because recipients fail to meet vesting requirements. Total stock-based compensation expense recognized in the Consolidated Statements of Income for 2025, 2024 and 2023 was $ 20,526 , $ 24,000 and $ 26,223 , respectively. The related tax benefit for 2025, 2024 and 2023 was $ 5,139 , $ 6,009 and $ 6,711 , respectively. As of December 31, 2025, total unrecognized stock-based compensation expense related to non-vested stock options, RSUs and PSUs was $ 16,927 , which is expected to be recognized over a weighted average period of approximately 1.8 years.
Lincoln Stock Purchase Plan
The 1995 Lincoln Stock Purchase Plan provides employees the ability to purchase open market shares on a commission-free basis up to a limit of ten thousand dollars annually. Under this plan, 800,000 shares have been authorized to be purchased. There were no shares purchased in 2025, 2024 or 2023.
NOTE 11 – RETIREMENT ANNUITY AND GUARANTEED CONTINUOUS EMPLOYMENT PLANS
The Company maintains a number of defined benefit and defined contribution plans to provide retirement benefits for employees. These plans are maintained and contributions are made in accordance with the Employee Retirement Income Security Act of 1974 ("ERISA"), local statutory law or as determined by the Board. The plans generally provide benefits based upon years of service and compensation. Pension plans are funded except for a domestic non-qualified pension plan for certain key employees and certain foreign plans. The Company uses a December 31 measurement date for its plans.
The Company does not have, and does not provide for, any postretirement or postemployment benefits other than pensions and certain non-U.S. statutory termination benefits.
F-29
Table of Contents
Defined Benefit Plans
Contributions are made in amounts sufficient to fund current service costs on a current basis and to fund past service costs, if any, over various amortization periods.
Obligations and Funded Status
December 31,
2025
2024
U.S.
Non-U.S.
U.S.
Non-U.S.
pension plans
pension plans
pension plans
pension plans
Change in benefit obligations
Benefit obligations at beginning of year
$
7,862
$
85,372
$
8,370
$
126,030
Service cost
177
1,379
156
1,014
Interest cost
351
3,391
477
3,785
Plan participants' contributions
—
17
—
42
Acquisitions & other adjustments
( 153 )
( 290 )
( 897 )
( 792 )
Actuarial loss (gain)
192
( 2,091 )
( 244 )
283
Benefits paid
( 1,129 )
( 6,749 )
—
( 6,634 )
Settlements/curtailments (1)
—
( 3,341 )
—
( 32,564 )
Currency translation
—
9,091
—
( 5,792 )
Benefit obligations at end of year
7,300
86,779
7,862
85,372
Change in plan assets
Fair value of plan assets at beginning of year
—
54,542
—
91,222
Actual return on plan assets
—
2,228
—
( 1,019 )
Employer contributions
—
704
—
2,545
Plan participants' contributions
—
17
—
42
Benefits paid
—
( 4,181 )
—
( 4,212 )
Settlements (1)
—
( 3,298 )
—
( 30,741 )
Currency translation
—
5,329
—
( 3,295 )
Fair value of plan assets at end of year
—
55,341
—
54,542
Funded status at end of year
( 7,300 )
( 31,438 )
( 7,862 )
( 30,830 )
Unrecognized actuarial net loss (gain)
2,054
( 381 )
1,988
2,370
Unrecognized prior service cost
—
1
—
( 36 )
Unrecognized transition obligation, net
—
24
—
24
Net amount recognized
$
( 5,246 )
$
( 31,794 )
$
( 5,874 )
$
( 28,472 )
(1) Settlements in 2024 resulting from lump sum pension payments .
The after-tax amounts of unrecognized actuarial net loss, prior service costs and transition obligation included in Accumulated other comprehensive loss at December 31, 2025 were $ 1,044 , $ 1 and $ 17 , respectively. The actuarial loss represents changes in the estimated obligation not yet recognized in the Consolidated Income Statement.
The Company terminated the Lincoln Electric Company Retirement Annuity Program (“RAP”) plan effective as of December 31, 2020. The surplus assets were transferred to a suspense account in January 2022 and are being used to fund employer matching contributions in the Company’s Savings Plan. The surplus assets as of December 31, 2025 and 2024 were $ 12,082 and $ 27,059 , respectively, and are recorded in Other current assets and Other assets in the Company’s Consolidated Balance Sheets.
F-30
Table of Contents
Amounts Recognized in Consolidated Balance Sheets
December 31,
2025
2024
U.S.
Non-U.S.
U.S.
Non-U.S.
pension plans
pension plans
pension plans
pension plans
Prepaid pensions (1)
$
—
$
707
$
—
$
845
Accrued pension liability, current (2)
( 991 )
( 2,633 )
( 1,003 )
( 2,556 )
Accrued pension liability, long-term (3)
( 6,309 )
( 29,512 )
( 6,859 )
( 29,119 )
Accumulated other comprehensive loss, excluding tax effects
2,054
( 356 )
1,988
2,358
Net amount recognized in the balance sheets
$
( 5,246 )
$
( 31,794 )
$
( 5,874 )
$
( 28,472 )
(1) Included in Other assets.
(2) Included in Other current liabilities.
(3) Included in Other liabilities.
Components of Pension Cost for Defined Benefit Plans
Year Ended December 31,
2025
2024
2023
U.S. pension
Non-U.S.
U.S. pension
Non-U.S.
U.S. pension
Non-U.S.
plans
pension plans
plans
pension plans
plans
pension plans
Service cost
$
177
$
1,379
$
156
$
1,014
$
166
$
955
Interest cost
351
3,391
477
3,785
466
4,867
Expected return on plan assets
—
( 2,271 )
—
( 2,574 )
—
( 3,839 )
Other adjustments
—
—
—
—
—
117
Amortization of prior service cost
—
( 5 )
—
( 7 )
—
( 8 )
Amortization of net loss (gain)
125
50
155
( 62 )
80
( 374 )
Settlement and curtailment charges
—
719
—
3,818
256
949
Defined benefit plans
$
653
$
3,263
$
788
$
5,974
$
968
$
2,667
The components of Pension cost for defined benefit plans, other than service cost, are included in Other income in the Company’s Consolidated Statements of Income.
Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets
December 31,
2025
2024
U.S.
Non-U.S.
U.S.
Non-U.S.
pension plans
pension plans
pension plans
pension plans
Projected benefit obligation
$
7,132
$
52,108
$
7,819
$
50,363
Accumulated benefit obligation
6,762
49,099
7,424
47,867
Fair value of plan assets
—
20,188
—
18,980
The total accumulated benefit obligation for all plans was $ 90,076 as of December 31, 2025 and $ 89,759 as of December 31, 2024.
F-31
Table of Contents
Benefit Payments for Plans
Benefits expected to be paid for the plans are as follows:
U.S.
Non-U.S.
pension plans
pension plans
Estimated Payments
2026
$
1,015
$
7,150
2027
998
5,845
2028
906
6,264
2029
887
5,614
2030
905
5,723
2031 through 2035
3,701
32,184
Assumptions
Weighted average assumptions used to measure the benefit obligation for the Company’s significant defined benefit plans as of December 31, 2025 and 2024 were as follows:
December 31,
2025
2024
U.S.
Non-U.S.
U.S.
Non-U.S.
pension plans
pension plans
pension plans
pension plans
Discount Rate
4.8
%
4.2
%
4.8
%
4.0
%
Rate of increase in compensation
3.0
%
6.2
%
3.0
%
5.6
%
Weighted average assumptions used to measure the net periodic benefit cost for the Company’s significant defined benefit plans for each of the three years ended December 31 were as follows:
December 31,
2025
2024
2023
U.S.
Non-U.S.
U.S.
Non-U.S.
U.S.
Non-U.S.
pension plans
pension plans
pension plans
pension plans
pension plans
pension plans
Discount rate
4.8
%
4.0
%
6.0
%
3.9
%
5.8
%
4.2
%
Rate of increase in compensation
3.0
%
5.6
%
3.0
%
4.8
%
3.0
%
3.7
%
Expected return on plan assets
—
4.2
%
—
3.8
%
—
4.4
%
To develop the discount rate assumptions, the Company refers to the yield derived from matching projected pension payments with maturities of bonds rated AA or an equivalent quality. The expected long-term rate of return assumption is based on the weighted average expected return of the various asset classes in the plans’ portfolio and the targeted allocation of plan assets. The asset class return is developed using historical asset return performance as well as current market conditions such as inflation, interest rates and equity market performance. The rate of compensation increase is determined by the Company based upon annual reviews.
Pension Plans’ Assets
The primary objective of the pension plans’ investment policy is to ensure sufficient assets are available to provide benefit obligations when such obligations mature. Investment management practices must comply with ERISA or any other applicable regulations and rulings. The overall investment strategy for the defined benefit pension plans’ assets is to achieve a rate of return over a normal business cycle relative to an acceptable level of risk that is consistent with the long-term objectives of the portfolio. Excluding the RAP plan assets, the target allocation for plan assets is 10 % to 15 % equity securities and 85 % to 90 % debt and other securities.
F-32
Table of Contents
The following table sets forth, by level within the fair value hierarchy, the pension plans’ assets as of December 31, 2025:
Pension Plans' Assets at Fair Value as of December 31, 2025
Quoted Prices in
Active Markets
Significant
for Identical
Significant Other
Unobservable
Assets
Observable Inputs
Inputs
(Level 1)
(Level 2)
(Level 3)
Total
Cash and cash equivalents
$
1,568
$
—
$
—
$
1,568
Fixed income securities (1)
Corporate debt and other obligations
—
6,374
—
6,374
Investments measured at NAV (2)
Common trusts and 103-12 investments (3)
—
—
—
47,399
Total investments at fair value
$
1,568
$
6,374
$
—
$
55,341
The following table sets forth, by level within the fair value hierarchy, the pension plans’ assets as of December 31, 2024:
Pension Plans' Assets at Fair Value as of December 31, 2024
Quoted Prices in
Active Markets
Significant
for Identical
Significant Other
Unobservable
Assets
Observable Inputs
Inputs
(Level 1)
(Level 2)
(Level 3)
Total
Cash and cash equivalents
$
1,974
$
—
$
—
$
1,974
Fixed income securities (1)
Corporate debt and other obligations
—
6,063
—
6,063
Investments measured at NAV (2)
Common trusts and 103-12 investments (3)
—
—
—
46,505
Total investments at fair value
$
1,974
$
6,063
$
—
$
54,542
(1) Fixed income securities are primarily comprised of governmental and corporate bonds directly held by the plans. Governmental and corporate bonds are valued using both market observable inputs for similar assets that are traded on an active market and the closing price on the active market on which the individual securities are traded.
(2) Certain assets that are measured at fair value using the net asset value ("NAV") practical expedient have not been classified in the fair value hierarchy.
(3) Common trusts and 103-12 investments (collectively "Trusts") are comprised of a number of investment funds that invest in a diverse portfolio of assets including equity securities, corporate and governmental bonds, equity and credit indexes and money markets. Trusts are valued at the NAV as determined by their custodian. NAV represents the accumulation of the unadjusted quoted close prices on the reporting date for the underlying investments divided by the total shares outstanding at the reporting dates.
Supplemental Executive Retirement Plan
The Company maintained a domestic unfunded Supplemental Executive Retirement Plan ("SERP") under which non-qualified supplemental pension benefits are paid to certain employees in addition to amounts received under the Company’s terminated qualified retirement plan which was subject to IRS limitations on covered compensation. The annual cost of this program has been included in the determination of total net pension costs shown above and was $ 225 , $ 340 and $ 650 in 2025, 2024 and 2023, respectively. The projected benefit obligation associated with this plan is also included in the pension disclosure shown above and was $ 4,523 , $ 5,034 and $ 5,461 at December 31, 2025, 2024 and 2023, respectively.
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Defined Contribution Plans
Substantially all U.S. employees are covered under defined contribution plans. In October 2016, the Company announced a plan redesign of The Lincoln Electric Company Employee Savings Plan (“Savings Plan”) that was effective January 1, 2017. The Savings Plan provides that eligible employees receive up to 6 % of employees’ annual compensation through Company matching contributions of 100 % of the first 3 % of employee compensation contributed to the plan, and automatic Company contributions equal to 3 % of annual compensation. In addition, certain employees affected by the RAP freeze in 2016 are also eligible to receive employer contributions equal to 6 % of annual compensation for a minimum period of five years or to the end of the year in which they complete thirty years of service.
Effective January 1, 2017, the Company created The Lincoln Electric Company Restoration Plan (“Restoration Plan”). The Restoration Plan is a domestic unfunded plan maintained for the purpose of providing certain employees the ability to fully participate in standard employee retirement offerings, which are limited by IRS regulations on covered compensation.
The annual costs recognized for defined contribution plans were $ 29,790 , $ 29,029 and $ 29,443 in 2025, 2024 and 2023, respectively.
Other Benefits
The Cleveland, Ohio, area operations have a Guaranteed Continuous Employment Plan covering substantially all local employees which, in general, provides that the Company will provide work for at least 75 % of every standard work week (presently 40 hours). This plan does not guarantee employment when the Company’s ability to continue normal operations is seriously restricted by events beyond the control of the Company. The Company has reserved the right to terminate this plan effective at the end of a calendar year by giving notice of such termination not less than six months prior to the end of such year.
NOTE 12 — OTHER INCOME
The components of Other income were as follows:
Year Ended December 31,
2025
2024
2023
Equity earnings in affiliates
$
1,948
$
235
$
556
Other components of net periodic pension cost (1)
( 2,393 )
( 5,692 )
( 2,573 )
Other income (2)
9,397
5,930
15,405
Total Other income
$
8,952
$
473
$
13,388
(1) Other components of net periodic pension cost includes pension settlements and curtailments as discussed in Note 11.
(2) Other income primarily relates to non-recurring items and non-operating gains and losses.
NOTE 13 – INCOME TAXES
The components of income before income taxes were as follows:
Year Ended December 31,
2025
2024
2023
U.S.
$
514,355
$
496,339
$
508,316
Non-U.S.
161,095
97,810
178,550
Total
$
675,450
$
594,149
$
686,866
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The components of income tax expense (benefit) were as follows:
Year Ended December 31,
2025
2024
2023
Current:
Federal
$
15,863
$
109,943
$
95,514
Non-U.S.
42,685
37,997
45,830
State and local
13,395
21,217
24,132
71,943
169,157
165,476
Deferred:
Federal
74,885
( 31,178 )
( 13,068 )
Non-U.S.
( 4,124 )
( 5,269 )
( 7,515 )
State and local
12,213
( 4,669 )
( 3,275 )
82,974
( 41,116 )
( 23,858 )
Total
$
154,917
$
128,041
$
141,618
The differences between total income tax expense and the amount computed by applying the statutory federal income tax rate to income before income taxes for the three years ended December 31, 2025 were as follows:
Year Ended December 31,
2025
2024
2023
Statutory rate applied to pre-tax income
$
141,845
21.0
%
$
124,771
21.0
%
$
144,242
21.0
%
Domestic reconciling items:
State and local income taxes, net of federal tax benefit (1)
22,795
3.4
14,172
2.4
17,979
2.6
Tax credits
Research and development credit
( 8,800 )
( 1.3 )
( 10,010 )
( 1.7 )
( 9,600 )
( 1.4 )
Other
( 102 )
—
( 102 )
—
( 99 )
—
Nontaxable and nondeductible items
Section 162(m) limitation
7,560
1.1
12,810
2.2
3,360
0.5
Other
679
0.1
679
0.1
694
0.1
Cross-border taxes
Foreign tax credit
( 6,018 )
( 0.9 )
( 7,042 )
( 1.2 )
( 7,136 )
( 1.0 )
Foreign derived intangible income deduction
—
—
( 13,766 )
( 2.3 )
( 10,411 )
( 1.5 )
Other
171
—
( 1,039 )
( 0.2 )
( 2,040 )
( 0.3 )
Exercises of stock-based compensation
( 7,525 )
( 1.1 )
( 12,528 )
( 2.1 )
( 8,814 )
( 1.3 )
Other
( 8,027 )
( 1.3 )
361
0.1
5,625
0.8
Foreign reconciling items:
Mexico
7,959
1.2
1,926
0.3
3,090
0.4
Other foreign jurisdictions
4,491
0.7
17,329
2.9
5,046
0.7
Worldwide changes in prior year unrecognized tax benefits
( 111 )
—
480
0.1
( 318 )
—
Total effective tax rate
$
154,917
22.9
%
$
128,041
21.6
%
$
141,618
20.6
%
(1) State and local income taxes in California, Florida, Michigan, Minnesota, Pennsylvania, Texas and Wisconsin for 2025, California, Illinois, Kentucky, Michigan, Pennsylvania, Wisconsin, and City of Euclid, Ohio for 2024 and California, Iowa, Illinois, Kentucky, Michigan, Pennsylvania, Wisconsin and City of Euclid, Ohio for 2023 made up the majority (greater than 50%) of the tax effect in this category.
The One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States on July 4, 2025. Many of the tax provisions within the OBBBA are designed to accelerate tax deductions and could lead to lower tax payments. The
OBBBA has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.
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During 2025, the Company recognized a one-time tax expense of approximately $ 11,700 related to the cumulative impact of the OBBBA provisions to date. This tax expense primarily relates to restoration of immediate expensing for current and previously capitalized domestic research and development expenditures and the reinstatement of 100% bonus depreciation on qualified property both of which impact international tax provisions regarding foreign derived intangible income.
The effective tax rate was higher in 2025 as compared to 2024 primarily driven by the impact of the OBBBA as discussed above, partially offset by the mix of earnings and timing of discrete tax items.
The amounts of income tax payments, net of refunds, were as follows:
Year Ended December 31,
2025
Federal
$
47,779
Foreign
Canada
8,562
Mexico
5,836
All other foreign
18,214
State and local
20,331
Total (1)
$
100,722
(1) Total income tax payments, net of refunds, in 2025 as compared to 2024 were lower primarily due to the election of provisions from the OBBBA.
Total income tax payments, net of refunds, during the years ended December 31, 2024 and 2023 were $ 157,542 and $ 180,512 , respectively.
Deferred Taxes
Significant components of deferred tax assets and liabilities at December 31, 2025 and 2024, were as follows:
December 31,
2025
2024
Deferred tax assets:
Tax loss and credit carry-forwards
$
27,883
$
43,417
Inventory
7,348
1,555
Other accruals
29,308
31,671
Research and development capitalization
5,454
86,697
Employee benefits
27,495
27,866
Pension obligations
4,647
7,025
Other
14,758
9,508
Deferred tax assets, gross
116,893
207,739
Valuation allowance
( 4,802 )
( 35,284 )
Deferred tax assets, net
112,091
172,455
Deferred tax liabilities:
Property, plant and equipment
50,169
43,048
Intangible assets
34,279
31,214
Inventory
7,720
6,785
Pension and other benefit liabilities
2,302
5,890
Other
22,648
18,371
Deferred tax liabilities
117,118
105,308
Total deferred taxes
$
( 5,027 )
$
67,147
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At December 31, 2025, certain subsidiaries had net operating loss carry-forwards of approximately $ 7,491 that expire in various years from 2033 through 2035, plus $ 59,479 for which there is no expiration date.
In assessing the realizability of deferred tax assets, the Company assesses whether it is more-likely-than-not that a portion or all of the deferred tax assets will not be realized. The Company considers the scheduled reversal of deferred tax liabilities, tax planning strategies and projected future taxable income in making this assessment. At December 31, 2025, 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. The amount of net deferred tax assets considered realizable could be increased or reduced in the future if the Company’s assessment of future taxable income or tax planning strategies changes.
The Company determined it will repatriate earnings for certain non-U.S. subsidiaries, which are subject to foreign withholding taxes. The Company has estimated the associated tax to be $ 78 . The Company considers remaining earnings and outside basis in all other non-U.S. subsidiaries to be indefinitely reinvested and has not recorded any deferred taxes as such estimate is not practicable.
Unrecognized Tax Benefits
Liabilities for unrecognized tax benefits related to uncertain tax positions are classified as Other liabilities unless expected to be paid in one year. Additionally, to the extent a position would not result in a cash tax liability, those amounts are generally recorded to Deferred income taxes to offset tax attributes. The Company recognizes interest and penalties related to unrecognized tax benefits in Income taxes. Current income tax expense included benefit of $ 152 and expense of $ 145 for the years ended December 31, 2025 and 2024, respectively, for interest and penalties. For those same years, the Company’s accrual for interest and penalties related to unrecognized tax benefits totaled $ 2,512 and $ 2,495 , respectively.
The following table summarizes the activity related to unrecognized tax benefits:
2025
2024
Balance at beginning of year
$
10,887
$
12,592
Increase related to current year tax positions
1,010
1,701
Decrease related to prior years' tax positions
( 110 )
( 870 )
Decrease related to settlements with taxing authorities
—
—
Resolution of and other decreases in prior years' tax liabilities
( 2,152 )
( 1,982 )
Other
678
( 554 )
Balance at end of year
$
10,313
$
10,887
The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $ 8,840 at December 31, 2025 and $ 9,343 at December 31, 2024.
The Company files income tax returns in the U.S. and various state, local and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local or non-U.S. income tax examinations by tax authorities for years before 2020. The Company is currently subject to various state, U.S. and non-U.S. income tax audits. The Company is generally not able to precisely estimate the ultimate settlement amounts or timing until after the close of an audit. The Company evaluates its tax positions and establishes liabilities for unrecognized tax benefits related to uncertain tax positions that may be challenged by local authorities and may not be fully sustained.
Unrecognized tax benefits are reviewed on an ongoing basis and are adjusted for changing facts and circumstances, including management’s judgment in the interpretation of applicable tax law, regulation or tax ruling, the progress of tax audits and closing of statutes of limitations. Based on information currently available, management believes that additional audit activity could be completed and/or statutes of limitations may close relating to existing unrecognized tax benefits.
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NOTE 14 – DERIVATIVES
The Company uses derivative instruments to manage exposures to currency exchange rates, interest rates and commodity prices arising in the normal course of business. Both at inception and on an ongoing basis, the derivative instruments that qualify for hedge accounting are assessed as to their effectiveness, when applicable. Hedge ineffectiveness was immaterial for each of the three years in the period ended December 31, 2025.
The Company is subject to the credit risk of the counterparties to derivative instruments. Counterparties include a number of major banks and financial institutions. None of the concentrations of risk with any individual counterparty was considered significant at December 31, 2025. The Company does not expect any counterparties to fail to meet their obligations.
Cash flow hedges
Certain foreign currency forward contracts are qualified and designated as cash flow hedges. The dollar equivalent gross notional amount of these short-term contracts was $ 88,555 and $ 96,444 at December 31, 2025 and 2024, respectively.
The Company had interest rate forward starting swap agreements that were qualified and designated as cash flow hedges that were terminated during 2024. Upon termination of the contracts in 2024, the Company had a gain of $ 25,852 recorded in AOCI that will be amortized to Interest expense, net over the life of the associated debt.
Net investment hedges
The Company has foreign currency forward contracts and zero-cost collar contracts that qualify and are designated as net investment hedges. The dollar equivalent gross notional amount of the foreign currency forward contracts and zero-cost collar contracts were $ 337,659 and $ 319,450 at December 31, 2025 and December 31, 2024, respectively.
Derivatives not designated as hedging instruments
The Company has certain foreign exchange forward contracts which are not designated as hedges. These derivatives are held as hedges of certain balance sheet exposures. The dollar equivalent gross notional amount of these contracts were $ 370,668 and $ 421,754 at December 31, 2025 and 2024, respectively.
Fair values of derivative instruments in the Company’s Consolidated Balance Sheets follow:
December 31, 2025
December 31, 2024
Other
Other
Other
Other
Current
Current
Other
Other
Current
Current
Other
Other
Derivatives by hedge designation
Assets
Liabilities
Assets
Liabilities
Assets
Liabilities
Assets
Liabilities
Designated as hedging instruments:
Foreign exchange contracts
$
2,149
$
289
$
—
$
—
$
1,663
$
2,972
$
—
$
—
Net investment contracts
102
12,529
—
—
10,276
—
—
—
Not designated as hedging instruments:
Foreign exchange contracts
582
470
—
—
1,560
4,251
—
—
Total derivatives
$
2,833
$
13,288
$
—
$
—
$
13,499
$
7,223
$
—
$
—
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The effects of undesignated derivative instruments on the Company’s Consolidated Statements of Income consisted of the following:
Year Ended December 31,
Derivatives by hedge designation
Classification of (loss) gain
2025
2024
Not designated as hedges:
Foreign exchange contracts
Selling, general & administrative expenses
$
25,417
$
( 11,198 )
The effects of designated cash flow hedges on AOCI and the Company’s Consolidated Statements of Income consisted of the following:
December 31,
Total (loss) gain recognized in AOCI, net of tax
2025
2024
Foreign exchange contracts
$
1,396
$
( 812 )
Forward starting swap agreements
16,291
18,067
Net investment contracts
( 5,721 )
20,403
The Company expects a loss of $ 1,396 related to existing contracts to be reclassified from AOCI, net of tax, to earnings over the next 12 months as the hedged transactions are realized.
Year Ended December 31,
Gain (loss) recognized in the
Derivative type
Consolidated Statements of Income:
2025
2024
Foreign exchange contracts
Net Sales
$
2,349
$
( 625 )
Cost of goods sold
242
494
Forward starting swap agreements
Interest expense, net
2,755
1,394
NOTE 15 – FAIR VALUE
The following table provides a summary of assets and liabilities as of December 31, 2025 measured at fair value on a recurring basis:
Quoted Prices in
Active Markets for
Identical Assets or
Significant Other
Significant
Balance as of
Liabilities
Observable Inputs
Unobservable
Description
December 31, 2025
(Level 1)
(Level 2)
Inputs (Level 3)
Assets:
Foreign exchange contracts
$
2,731
$
—
$
2,731
$
—
Net investment contracts
102
—
102
—
Pension surplus
12,082
12,082
—
—
Total assets
$
14,915
$
12,082
$
2,833
$
—
Liabilities:
Foreign exchange contracts
$
759
$
—
$
759
$
—
Net investment contracts
12,529
—
12,529
—
Deferred compensation
24,456
—
24,456
—
Total liabilities
$
37,744
$
—
$
37,744
$
—
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The following table provides a summary of assets and liabilities as of December 31, 2024 measured at fair value on a recurring basis:
Quoted Prices in
Active Markets for
Identical Assets or
Significant Other
Significant
Balance as of
Liabilities
Observable Inputs
Unobservable
Description
December 31, 2024
(Level 1)
(Level 2)
Inputs (Level 3)
Assets:
Foreign exchange contracts
$
3,223
$
—
$
3,223
$
—
Net investment contracts
10,276
—
10,276
—
Pension surplus
27,059
27,059
—
—
Total assets
$
40,558
$
27,059
$
13,499
$
—
Liabilities:
Foreign exchange contracts
$
7,223
$
—
$
7,223
$
—
Deferred compensation
55,425
—
55,425
—
Total liabilities
$
62,648
$
—
$
62,648
$
—
The fair value of the Company’s pension surplus assets are based on quoted market prices in active markets and are included in the Level 1 fair value hierarchy. The pension surplus assets were invested in money market and short-term duration bond funds at both December 31, 2025 and December 31, 2024.
The Company’s derivative contracts are valued at fair value using the market approach. The Company measures the fair value of foreign exchange contracts and net investment contracts using Level 2 inputs based on observable spot and forward rates in active markets. During the year ended December 31, 2025 there were no transfers between Levels 1, 2 or 3.
The deferred compensation liability is the Company’s obligation under its executive deferred compensation plan. The Company measures the fair value of the liability using the market values of the participants’ underlying investment fund elections.
The fair value of Cash and cash equivalents, Accounts receivable, Short-term debt excluding the current portion of Long-term debt and Trade accounts payable approximated book value due to the short-term nature of these instruments at both December 31, 2025 and December 31, 2024. Refer to Note 9 for the fair value estimate of debt.
The Company has various financial instruments, including cash and cash equivalents, short and long-term debt and forward contracts. While these financial instruments are subject to concentrations of credit risk, the Company has minimized this risk by entering into arrangements with a number of major banks and financial institutions and investing in several high-quality instruments. The Company does not expect any counterparties to fail to meet their obligations.
NOTE 16 – INVENTORY
Inventories in the Consolidated Balance Sheet is comprised of the following components:
December 31,
2025
2024
Raw materials
$
164,440
$
153,596
Work-in-process
124,351
123,406
Finished goods
344,573
267,035
Total
$
633,364
$
544,037
The valuation of LIFO inventories is made at the end of each year based on inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs. Actual year-end inventory levels and costs may differ from interim LIFO inventory valuations. At December 31, 2025 and 2024, approximately 38 % and 35 % of total inventories, respectively, were valued using the LIFO method. The
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excess of current cost over LIFO cost was $ 138,589 at December 31, 2025 and $ 120,633 at December 31, 2024, or a charge of $ 17,956 in 2025 as compared with a benefit of $ 9,313 in 2024.
NOTE 17 – LEASES
The table below summarizes the right-of-use assets and lease liabilities in the Company’s Consolidated Balance sheets:
Operating Leases
Balance Sheet Classification
December 31, 2025
December 31, 2024
Right-of-use assets
Other assets
$
52,989
$
54,276
Current liabilities
Other current liabilities
$
13,460
$
13,110
Noncurrent liabilities
Other liabilities
40,061
42,124
Total lease liabilities
$
53,521
$
55,234
The total future minimum lease payments for noncancelable operating leases were as follows:
December 31, 2025
2026
$
15,232
2027
12,229
2028
10,273
2029
7,456
2030
3,802
After 2030
10,781
Total lease payments
$
59,773
Less: Imputed interest
6,252
Operating lease liabilities
$
53,521
Other information related to leases was as follows:
2025
2024
2023
Lease expense (1)
$
27,674
$
24,778
$
24,408
Cash paid for amounts included in the measurement of lease liabilities (2)
15,031
15,874
13,450
Right-of-use assets obtained in exchange for operating lease liabilities
12,683
17,591
9,249
Weighted average discount rate
3.7
%
3.7
%
3.5
%
Weighted average remaining lease term
6.1 years
6.4 years
7.0 years
(1) Amounts are included in Cost of goods sold and Selling, general and administrative expenses in the Company’s Consolidated Statement of Income.
(2) Amounts are included in Net Cash Provided by Operating Activities in the Company’s Consolidated Statement of Cash Flows.
NOTE 18 – CONTINGENCIES
The Company, like other manufacturers, is subject from time to time to a variety of civil and administrative proceedings arising in the ordinary course of business. Such claims and litigation include, without limitation, product liability claims, regulatory claims, employment-related claims and health, safety and environmental claims, some of which relate to cases alleging asbestos induced illnesses. The claimants in the asbestos cases seek compensatory and punitive damages, in most cases for unspecified amounts. The Company believes it has meritorious defenses to these claims and intends to contest such suits vigorously.
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The Company accrues its best estimate of the probable costs, after a review of the facts with management and counsel and taking into account past experience. For claims or litigation that are material, if an unfavorable outcome is determined to be reasonably possible and the amount of loss can be reasonably estimated, or if an unfavorable outcome is determined to be probable and the amount of loss cannot be reasonably estimated, disclosure would be provided. Many of the current cases are in differing procedural stages and information on the circumstances of each claimant, which forms the basis for judgments as to the validity or ultimate disposition of such actions, varies greatly. Therefore, in many situations a range of possible losses cannot be made. Reserves are adjusted as facts and circumstances change and related management assessments of the underlying merits and the likelihood of outcomes change. Moreover, reserves only cover identified and/or asserted claims. Future claims could, therefore, give rise to increases to such reserves.
Based on the Company’s historical experience in litigating product liability claims, including a significant number of dismissals, summary judgments and defense verdicts in many cases and immaterial settlement amounts, as well as the Company’s current assessment of the underlying merits of the claims and applicable insurance, the Company believes resolution of these claims and proceedings, individually or in the aggregate, will not have a material effect on the Company’s consolidated financial statements.
NOTE 19 – SUPPLIER FINANCING PROGRAM
The Company’s suppliers, at the supplier’s sole discretion, are able to factor receivables due from the Company to a financial institution on terms directly negotiated with the financial institution without affecting the Company’s balance sheet classification of the corresponding payable. The Company pays the financial institution the stated amount of the confirmed invoices from its designated suppliers on the original maturity dates of the invoices. Invoices with suppliers have terms between 120 and 180 days . The Company does not provide secured legal assets or other forms of guarantees under the arrangement and has no involvement in establishing the terms or conditions of the arrangement between its suppliers and the financial institution. The amounts due to the financial institution for suppliers that participate in the supplier financing program are included in Trade accounts payable on the Company’s Consolidated Balance Sheets, and the associated payments are included in operating activities in the Consolidated Statements of Cash Flows. At December 31, 2025 and 2024, Trade accounts payable included $ 25,709 and $ 29,164 , respectively, payable to suppliers that have elected to participate in the supplier financing program.
Year Ended December 31,
2025
2024
Confirmed obligations at beginning of the period
$
29,164
$
29,111
Invoices confirmed during the period
97,353
103,908
Confirmed invoices paid during the period
( 100,808 )
( 103,855 )
Confirmed obligations outstanding at the end of the period
$
25,709
$
29,164
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SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS
LINCOLN ELECTRIC HOLDINGS, INC.
(In thousands)
Additions
Balance at
Charged to
(Credited)
Beginning
Costs and
Charged to
Balance at End
Description
Of period
Expenses
Other Accounts (1)
Deductions (2)
of Period
Allowance for doubtful accounts:
Year Ended December 31, 2025
$
12,674
$
3,053
$
236
$
4,637
$
11,326
Year Ended December 31, 2024
11,464
4,371
( 2,057 )
1,104
12,674
Year Ended December 31, 2023
12,556
1,195
( 94 )
2,193
11,464
Deferred tax asset valuation allowance:
Year Ended December 31, 2025
$
35,284
$
2,625
$
( 32,539 )
$
568
$
4,802
Year Ended December 31, 2024
36,876
3,010
( 3,532 )
1,070
35,284
Year Ended December 31, 2023
44,627
4,570
( 606 )
11,715
36,876
(1) Primarily relates to currency translation, valuation allowance adjustments and other items. The change in the 2025 deferred tax asset valuation allowance includes a reduction of approximately $ 32,000 related to these adjustments.
(2) For the Allowance for doubtful accounts, deductions relate to uncollectible accounts written-off, net of recoveries. For the Deferred tax asset valuation allowance, deductions relate to the reversal of valuation allowances due to the realization of net operating loss carryforwards.
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QuickLinks
ITEM 1.
BUSINESS
1
ITEM 1A.
RISK FACTORS
5
ITEM 1B.
UNRESOLVED STAFF COMMENTS
13
ITEM 1C.
CYBERSECURITY
13
ITEM 1D.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
15
ITEM 2.
PROPERTIES
15
ITEM 3.
LEGAL PROCEEDINGS
17
ITEM 4.
MINE SAFETY DISCLOSURES
17
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
17
ITEM 6.
SELECTED FINANCIAL DATA (Dollars in thousands, except per share amounts)
18
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollars in thousands, except per share amounts)
18
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (Dollars in thousands, except per share amounts)
32
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
33
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
33
ITEM 9A.
CONTROLS AND PROCEDURES
33
ITEM 9B.
OTHER INFORMATION
34
ITEM 9C.
DISCLOSURE REGARDING FOREIGN JURSIDICTIONS THAT PREVENT INSPECTIONS
34
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
34
ITEM 11.
EXECUTIVE COMPENSATION
34
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
34
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
35
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
35
ITEM 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
35
ITEM 16.
FORM 10-K SUMMARY
40
SIGNATURES
41
Report of Independent Registered Public Accounting Firm – Consolidated Financial Statements
F-1
Report of Independent Registered Public Accounting Firm – Internal Controls Over Financial Reporting
F-3
LINCOLN ELECTRIC HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
F-7
LINCOLN ELECTRIC HOLDINGS, INC. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts)
F-5
LINCOLN ELECTRIC HOLDINGS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands, except per share amounts)
F-6
LINCOLN ELECTRIC HOLDINGS, INC. CONSOLIDATED STATEMENTS OF EQUITY (In thousands, except per share amounts)
F-8
LINCOLN ELECTRIC HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
F-9
LINCOLN ELECTRIC HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share amounts)
F-10
SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS LINCOLN ELECTRIC HOLDINGS, INC. (In thousands)
F-43