Lincoln Electric (LECO) 12 Feb 212020 Q4 Earnings call transcript

Greetings, and welcome to Lincoln Electric 2020 Fourth Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. And this call is being recorded. It is my pleasure to introduce your host, Amanda Butler, Vice President of Investor Relations and Communications. Thank you.

begin. may You

release , Lincoln Electric's Michelle our morning, Welcome the well section. find everyone. results call's Relations to Thank presentation Investor website slide fourth and at quarter Lincoln as our can you XXXX today, on released an conference to attachment earlier this the you, as and good as Electric call. financial in We lincolnelectric.com

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questions. Following remarks, our prepared your we're take happy to

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addition, do to GAAP. to our Investor with section earnings not And that, reconciliation is in to measures financial again U.S. available found measures we Chris of GAAP the call Chris? lincolnelectric.com. over the Relations of financial conform non-GAAP measure I'll Mapes. comparable tables at in discuss A most our is In the that turn in the release, website which

for We We’ve XXXX XXXX. you exemplified business. to be our as on company. internally employees. XXXX, drive like our environmental to bonus values our record with I'm and our of others positioning and good proud strategy golden wages, In delivering we safety of guided the how all and ended to higher long-term Good stakeholders. supporting safeguarded minimize XXXX on committed that on We we're challenging community to We and impact executing one as Thank am The for and Lincoln standard benefits our our performance. engagement as value COVID-XX an another to year would programs report, and XXXX. we we for and achieved essential as our I world's by our were We recognized solid customers again everyone. in focused one lead treating morning, a the Ethisphere. report for named momentum to And amplified Electric challenges rule most being Amanda. our you, growth remained in were live global outreach. treated. culture, of employer of initiatives pleased organizations top by ethical the named recovery a

resulted our X, year savings Slide offset lower recovery the We of reduction sales. often compensation, a cost incentive combined achieved initiatives. $XX sales XX% lower executing and by decline organic Lincoln April in XXXX solid in of the in aggressively benefits. actions to largely These momentum, with deploying cost planned impact saving early playbook on Turning trough cost million permanent

from conversion. Adjusted XXXX. our return margin invested income basis earnings on capital that XX.X% declined cash our XX operating cash points in XXX% per in XX.X% XX% earnings achieved at represented We $X.XX flow to strong adjusted performance Our history. compressed free highest and share to approximately cash and flows third operations,

through dividend repurchases our $XXX XXth and to million consecutive continued in program. in to the increase share shareholders return also We cash XXXX in

high the regions sectors. as all two welding of quarter the and for improvement segments single-digit most in we trends improved in end Looking a Pacific North sequential Geographically, the exceeding on good end organic percent single-digit single-digit to recovery equipment in decline consumable a at rate equipment first demand to achieved with recover XXXX. consumable in quarter. in and across and to percent ongoing continued sales Europe markets a Globally, improved We low in low-to-mid the our Slide fourth demand geographic time the saw narrowed fourth X, demand Asia decline. percent to quarter. America improved declined fourth

weakened to a percent automation the at will from trends near We're the quarter was capital for fourth acceleration as and or an by of levels, expected and by automation mid As mid-teens resumption benefit XXXX. to opportunity decline encouraged orders to spending. growth translate in these portfolio trough that

were as gas which narrowed of remain declines that in growing of the expect grew our fourth sales in sectors approximately XX% sales end XX% in the market. at improve industry challenged from quarter. transportation We heavy end XXXX. Looking fourth would and third General through sales XX% automotive up is from demand markets, started to and and approximately quarter quarter oil to industries

to Moving X. Slide

with at to expect to modestly we quarter And prior across levels. January, Looking that pleased report I'm first rates sales have order compared segments. all continued to be year to improve flat higher organic

supply conditions current high customers COVID-XX risks, remain chain XXXX. cautious suggest sales we given uncertainties, organic general trends for While on growth demand single-digit and

benefits a quarter actions fourth in permanent rate run we million million exited quarter savings. cost $XX and in Our the per of savings $XX cost yielded the year with

As conditions in service we cost XXXX, temporary to savings ease expect as improved would grow. we

[$XX] occur savings will the million, year. of the full And actions. substantially cost $XX incremental from expect in to year cost half to first primarily of for million continue permanent benefits these We XXXX

rising We freight are headwinds and material seeing in inflationary costs. raw XXXX labor, to

to full and Pricing be material cost actions We the for we positive mitigate will neutral price incremental labor by anticipate offset raw costs inflation. savings. And achieving to freight the expect year. higher costs

further and globally pressures increases our address inflationary price pricing actions issued already are markets. across to these preparing have We

growth, percent year average in full organic margin mid-to-high for range XX% our for Given expect will the high we our single-digit assumption XXXX. incremental

COVID we through fourth are more call confident detail. this While business growth I'll And our growth we quarter in strength profit strategy, the markets the balance as encouraged expect earnings our prospects rebound. XXXX, ability to operate now continue cover our to in to during uncertain by of of much the year. and our pass sheet environment team's financials to Gabe and sales, deliver to We're

Thank you, Chris.

as declined X% basis price lower of foreign consolidated X.X% from Slide exchange. offset quarter to points XX from fourth impact X.X% a Moving and an by volumes unfavorable X, sales benefit our was

profit cost benefits the price margin reduction actions basis increased gross volumes. as Our quarter. in XX% offset from cost and to positive XX lower management points Price was

reduction in expense of basis the X.X% reflecting decreased approximately million points as or declined incentive SG&A sales Our by SG&A XX.X%. $XX cost savings from percent million, XX partially $X which compensation. offset to was higher actions,

Reported and million XX of included XXXX versus SG&A expect of charges, increase prior to from Operating compensation. operating XXX We year. benefited or XX.X% operating million incentive operating income basis income $XX.X XX% results special cost of Adjusted million income adjusted increased due excluding to items a sales. point in higher savings. to increased increase sales, basis $XX wage $XX.X rationalization X.X% $X.X the income expense or to million points

was this Our our compares period. XX.X% effective tax mix with to quarter prior fourth XX.X%. in and year discrete rate Due items, the of earnings

items. expect $X.XX diluted increased full extent XX% range effective tax rate to in X.X% anticipated quarter per XXXX in of We discrete of the compared to year tax share subject mix be with our and to $X.XX prior Fourth earnings year. earnings the the low-to-mid

to increased earnings per adjusted share Excluding special diluted $X.XX. X.X% items

industries. declined segments increased to benefits adjusted $XX.X reduction end XX spending. improving EBIT adjusted and Now our reflecting Energy X.X% from XX.X% narrowed organic lower Americas trends million. to actions industry sales moving of XX.X%, margin Welding reportable Slide segments the basis demand heavy points X, to relatively Americas industries, on discretionary general markets Welding, year-over-year in The growth EBIT cost declines and fourth in quarter to steady automotive in challenged. remain transportation,

which Welding the XXX modest recovery points sales benefits Asia a European decreased Moving automotive to X, China was heavy adjusted end and and in of increased concentration X.X% and in have sectors on adjusted growth X.X% led Slide where $XX.X reflecting segment’s The XX.X% strong cost in we key discretionary lowered the Organic ongoing growth in industry. reduction EBIT million. margin larger by to EBIT Pacific, International in spending. increased basis activities to

from to growth adjusted Harris EBIT reduction increases and North million. basis in due to the American EBIT sales particular Moving price channel primarily increased costs to commodity channel, cost and silver strength Products rising XX.X% in and and XXX continued to XX. Slide to increased Fourth points Group in due XX.X% Adjusted on action. strong retail quarter Organic retail $XX.X the management the increased XX% margin price the copper.

free Moving improved cash recovery. a flows flow. elevated to record. Slide strong Capital cash from conversion to million XX in operations we the quarter $XXX Working generated remained from XXX% support ratio intentionally and sequentially cash fourth a And

near-term a position working debt our We to with ratio grade expect strengthened profile improve maintained strong We that fourth $XXX through quarter XXXX balance sheet to no liquidity million in investment maturities. the capital and

in ahead Looking strong cash cash XXXX, excess generation XX%. we to and of flow expect conversion

capital XX, We returned and Slide quarter. our through million our allocation capital dividend invested million pursued we to in Moving spending disciplined the program strategy. during $XX to $XX shareholders

of we XXXX, uses Looking the ahead to flows, expect cash to growth. prioritize of cash on given our strength

to is strategy. And active are of be to range the maintaining program in expected we highest capital million XXXX spending our that standard million. M&A Our $XX an $XX supports

returning like program share call through opportunistic for to basis. questions. on our to also X.X% repurchases that, the I with We higher to turn dividend shareholders through would and committed payout With cash rate, remain an over a

we question-and-answer-session. ask ask To [Operator that to and a be Instructions] follow-up at you you has please question that gentlemen, line stated. will mute queue. opportunity to we and place and noise, ensure everyone question participate, To prevent on Ladies this that once question time, background the been has a your then one the return your any ask we conducting

Our with from of Boroditsky Saree the line first comes question Jefferies.

open. Please go line is ahead. Your

good Hi, morning.

you And there appreciate guidance give segments? of higher Or where versus similar understand see this this XXXX. in you or of us across lower is just single-digit But is the high is help price volume? that. growth could growth? much guidance how We you pretty anywhere So

But as in for where timeframe year quarter you we we see -- during the that see of as progress Saree increases. that we today. second profile high-single-digit where growth Chris growth pandemic. the some more anniversarying as nice the so here price to we point to volume this of to speak the through most at that's you troughed year. but announce Inherently come growth did mentioned and we'll are impact expect this the accelerated increases we Yes, And we of we're from know

So as price additional guidance? upside in that be increases, you to your put current -- will price

be. Yes, it would

over just cash last for cash in average And thing you're know you strong coming XXX%. to conversion one out put year typically a generation on then but you guidance XX% cash closer off flow Perfect. I XXXX.

to you So than see is less reason XXXX? that there would in any expect that

think And that is see real I the this Chris. look, twofold. challenge it we really is Saree, with

that cycle which sure really and are components the time. more chain of to in parts for is on the it's our we type be is a of point the we're they because inventory also operating that that where to First the more resilient is that uncommon in our make we into they're just when great conservative visibility. have as model to able to marketplace actually cash increase we've and to challenges a the we're set will migrating there maybe time throughout element that our probably have cash those And need various period at believe world utilizing then the growth the we see levels the growth we not chain within we solutions directions and times doing units to second that considerable out what this driving ensure supply around support look supply and out marketplace, that that our point this and drive we products some are these And through slightly this of business. don't at that in of is exist to can year XXXX to going which

chain we've conservative. as cycle at uncommon servicing the the more for the and supply challenges even drivers. thought made our two under So target in the then are utilization this really, for little bit slightly and with growth about a cash us point have Not the those us the year, be to

the I color. appreciate

going chain Chris wise about to ended X days maintain the higher that of more inventories. just and also to to so And there's dealing I'm days Saree, as add, year just the at much pandemic in it's supply we levels uncertainty continue inventory X and risks we feel mentioned, -- intentional. with in that's

Thanks. quarter. I appreciate the color. the on Congratulations

Melius Thank you. And our next the with question of line Research. from Wertheimer comes Rob

line open. go Your Please is ahead.

good Hi, all. morning

Rob. Hey,

you And the I underlying market you otherwise? know there think you tumultuous this how on you're and to Just on how it is I you through all dynamics progress -- a very you and Thank international/Europe year bit, you. gaining next managed whether think special. to operating maybe Canada. -- the speak know in wonder can of well. share or ported if traction makes and couple the looks much that's come the years? guys a just so even of over there. that along Europe you out stop And how It's broaden maybe I'll system

Yes for have in proud question business in the the say teams last the over to made look, would business of especially thanks I'm I our European the the that enormously XX just and Rob. progress international months. XX

your of said target. we progress we'd once we've then improvements focused strategy business. that And already the to good I I a for made been important we for in shareholders broad that markets. Even ensure that chain the across as our for long market then go regain pandemic relates in you to the Standard double-digit most the has progress and to over the And set that the next in levels to those a doing metrics metric. call solutions set customer our believe of that think performance in quarters for for the It's portfolio, right But then in be step we that of place certainly started customers it last the have to share our structural during very that Higher very about assisted was service were path The taken that time the pre-pandemic those sure across that on And has are us And our challenges with supplier focus choice. our both of as supply we've are -- market of been we that right performing that that consumables up the because for while on host on we're had XXXX that stayed business. something capture that the to. make and portfolios resilient. is be service to as there hold what to us our talking To That share in driving to We've there equipment the their we it with is in to think as business. improvements over relates with of few longer cost want are starting a team we we profit as quarters target areas we're many XXXX knows I've customer them deliberate And that still the the that and business. cost well I performance. operating market? on said you the approach able they're confident I'm improvements to that a was throughout that'll quickly. shift and need International and international. and doesn't moving of work need that show of made on question

you for response. thank that Okay,

Nathan with the next Jones our comes Stifel. And line of from you. Thank question

go Your line is ahead. open. Please

morning, Good everyone.

Morning. Good

Nathan. morning Good

to Digging getting lag I on going and costs there to follow-up a a through here. between equation recall if just XXXX was pricing correctly and back I cost price wanted up.

more model Is margin your that were And that short-term there. maybe to quarter there anything time or you you increases to this some if few changing been ago? the pricing something expect you more pricing two And quickly see did time? that there than proactive that's than over next taken there's price gain pressure last years a have or that allows now

from two that you recovery times with that that lag would significant early XXXX think much I we costs, the where good pretty within a coming your quite escalation one great that in in multiple it's might going in you about packaging risks to cyclical quarter with that, that probably the some XXXX Nathan, back associated by a XXXXs commercial be or material lag creates confidence share in freight us rapid of think and as then has and the at there it's maybe I've the through environments for And we business to of and be I'll and a issues But the host to about recovery be so frankly to more further moving address ensure it cycle that there'll into that really I that I managed raw a activities perspective get been the in in look, from lag. and that the we'll But managing are XXXX. associated not of and our agree costs with But we which throughout really to require the those perform many price it's we've with saw challenges historically year. working And through areas our those believe a cost. that costs, got as business. also ability I understand many challenges us price take very relates in do to we team cost assessment we ability analysis. that little see but been the cycle

Fair enough. on question Automation the my And business. then follow-up

any little through impact more of have drive second clear in the margins half year patents about fourth increased on guys had a revenue the automation about lower earlier velocity now beginning that was pretty things automation based you orders or that talking bit on XXXX growth the the to XXXX. in challenged going of to that expect in of that Can please? talk pipeline? you been moving middle the just quarter, would You And to be have the

we're the quarter orders. about for was probably order many what we of for Electric will capital continue in the people see the and had to was fourth it markets. and a early I industrial quarter, growth our we automation think in But I business decisions that us from with Automation Lincoln believe where that XXXXs. results in fourth conserving into driving removed a significant are made around to solid see in Americas begin organic tell economic as into the the drop further Electric in would to our as business. begin back on the margins business migrating disruption business saw we'll improvements believe see drag with to to Well, the and I that a from that people removed North And the quarter many saw Lincoln think back and to it in in our further that troughed QX. certainly QX had I'd as out the the we are pandemic replicate we has you that I we the begin QX do more the business their spend market like of that central very really year is half American capital that in that see order the results and that like

business think to now I of signs migrating as positive expected and see parts of we that just the So signals. of some early but positive with had XXXX, activity a -- that the we're we continuance as in activity lot need into order

in Could growth in you quarter? automation auto fourth the share

comment, I'll Nathan. just

of a was see to just change we'll mid-part I step expect the would still it but that's revenues So by though, have contributions XXXX. the choppy to positive. activity Choppy you that

business Automation but six lag We we're between our have three optimistic a to we months, see. on what pretty in of

questions. Great, taking thanks for my

Longbow line comes our of Research. Thank was Chris the you. Dankert next And from question

go ahead. Please open. is line Your

Hey, good guys. morning,

Chris. Hi,

looking the it's very are industry to on kind and seen of there chase to of here? book at or automation, opportunities I of table what's sticking automotive-centric heavy opportunities of now, when other or mean -- the down come order are outside automotive? curious is still kind back percolating any or there really I'm you're we any have Kind orders there

in to comes that's of interesting with in to field that really automation will seen of supply the pandemic I industries really maybe we a with you impact order out the with to increases were projects think beyond tell associated had. to we've that exacerbated associated one automotive that had be was challenges because not chains our And dynamics Chris, that I of the expand just relative pandemic. challenge into I challenges the have non-automotive. going QX the industries. to the many we large concentration safe, which traditionally automotive-centric employees the the really think that all very going been Matter keeping start associated improvement book fact, of pandemic is couple

see I book, that the are of they'll think from again, have think that So always will industries the there don't pandemic divergence improvements I more around through broad in part that we make believe automation heavy automotive quite space that in the been industry's imply But strong today they Automotive utilization their amplify over there's also. the minimize climb general continuing longer the prevalent that to XXXX market in of start we concentration in us, seeing the automotive. spending is we disruption for going But see moving term improvements automation as automation. probably recover continue I around move want the see that and industry across automotive of of to CapEx to industrial businesses not and as early only I seeing and that cycle. we're in just to particular still and pandemic the that the to the frankly segment is. piece activity as and in XXXX Those the

so for Thanks that. it. much Got

what maybe add to going I'm to Chris just Chris, said. just say to

cycle you throughout the kind If the the as is so year pullback part monitoring industries cycle that kind And investment. progress But heavy at the there construction. look you expectations that Ag, went in just capital to of favorable early peaked industry mining, more markets throughout XXXX, pandemic on of you are the remember the and through down heavy we of then XXXX. hit

cycle still we're of on half so the turn. comparing the could kind will and of back low the where the part to in And XXXX. it more back year industries so of be optimistic But you when heavy go

interesting there's this opportunity besides sounds auto. thank Yes, much the color. you that it. Got very out I it. like mean so Got there for

page. to on glad same you hear are the yes, So

parts. we've in costs I I moving guys from the off here, rolling you executing savings XXXX into Obviously, million guess into kind we set level quarter? costs what all on of the by first SG&A million $X of kind throughout of to into Do of $XXX you heading on first lot permanent did terms the million kind I come you've can of temporary the been mid-XX that at guess got the $X were for you -- year. quarter this what range offset looking us back low think from point? in

Just, Chris cost I $XX And that. you changes, million. any to close think just permanent at first run the year's on structural of didn't side a savings mean $X about quarter. at quarter than had rate. it more in look impact -- temporary I then the we broadly we're and million have trends When we our that first Last

the So start we'll first going But quarter. savings have less conversations I'm in into temporary to really migrating our incrementals.

should we the environment. stay in operating with pandemic the So

looking incrementals compared savings level into continue as first the quarter. XXXX to we've we'll quarters. look into full at some a really But being choppy quarters year, of we cost with noise comparables high-XXs mid the as to the all throughout to the with maintain So that highlighted

so And luck, of best Understood, guys. for color. the well, thanks much

Thank you.

when to start to that to sheet strategy as with we still look invest a Standard Electric out I business up want that advantages us And to acquisitions, it's identify that's on one follow but we're first in. want see has for I automation identify that we migrating able we happy be at Lincoln area our business. continue I growth is, we only XXXX that to that am balance to question our not build am mean just believe continue growth, Yes, look, of to business, that to to a an toward other Higher Chris, the automation, profile -- that markets

moving it think 'XX. us a be as and I we're catalyst for through 'XX can So

stuff. Thanks again. Exciting

Thank a of with Mig next you. Baird. question line And Dobre our comes from

line Please Your ahead. open. is go

fact everyone. this I on doesn't raw is to Thank the a going wondering guess And clear embed point, you to your comments I morning, pricing want I and back pretty whole to question. that the for I'm it's guidance go that at right? that upside. the are of mean frankly, why lot pricing off. materials Good seem taking

Chris pricing that XXXX. the So XXXX high-single-digit had was mean guys talked and I you you about fantastic pricing.

I you is more guidance way about is way simply your factor ability in push it are the than So thinking the there you're guess, a normal kind of uncertainty conservatism wondering I'm prices? structuring of and to the or

Well drive Meg, first, pressures of it's ability thanks any not lack business. to cost to assure confidence I the within our of question. can our recovery you Look, in

I our that to that effective Again to show model it think but there associated very got being historical we're some we've lags manage at ability is with recovery. times at are in it. effective able

directly more As I probably your you relates in it to tell question, early would that we're that cycle.

And portion beginning is may addressed other see like at to we -- we're commodity this to certainly structural be increases cost in those of that. you may As in business. associated multiple And feel XXXXs. early early have I'm with comments, my I challenges like and mentioned the that the

the certainly we'll the managing of XXXX. than any to to effectivity duration activities the our at we that to having that as us. those globally. business about increase that a discussions around other in we said, some in of or those discussion had of confidence provide over started we'll level confident markets hit further not able XXXX, and believe I And as cost be be we're able to so that recover cover confident but have increases cost We address those the guidance believe We've that costs

competitive for is as environment can Thank far Chris. you is that you maybe different But bit to a and clarify as assess it. here the

a take competitors to similar going are your to? think You approach

steel the and I the public market steel in are from and hide have on no seeing air the industrial execute companies the not to be Look, concerns have ability will fact our from I inflationary freights that out pricing strategy information the everything what able I markets will really ocean there and that and we're pressures. that from freights I review improvements be all over really no on have of our -- to idea. there wage

markets So importantly, being or and of dynamic work again, had process our most going to our being issues. Lincoln in the with and And I'm there address structural not great changes and those any aware times when in other recover the we've these a costs to and out the business. able in customers Lincoln team from confidence

for million $XX maybe here follow-up my you about of cost then were Gabe, And in so XXXX, $XX the of temporary. outlined out Understood. million savings you that

this million labor or at -- the looking temporary we're into or cost think year? of is that the How and further $XX Thank that somehow the of reverting? that Is slide should line rather you. As savings headwind. down out $XX you're something we though, baked of rest guidance those happens calling million only cost kind about of

Sense Mircea. how will markets we see be rebound, Yes, right. to responsive really,

conversation anchored of into activity dynamic we go that market. as So an we that's that in why will on the incremental second, and third savings with how we'll see aligned quarters restore dependent be anniversary, growth, and temporary which we

in conversation volatility back we why come an to that's quarter-by-quarter that -- XXXX. to saw with incremental So we

business, terms and costs Okay, back have of those the that come how they're more into more volume. you so on control in

Yes.

you. Undersood. Thank

Morgan from with Cumming Stanley. comes our you. line the Thank And question next Dillon

Your Please go ahead. line is open.

wanted of growth to guess versus am kind several I And this point. an in a And to Great. wanted the describe guys. your Thanks returning cycle in a so of just I another ask the that question. construction alluded industrial for you you environment to just bit of year-over-year bit of at comments at market a energy of next high Chris, at of morning of looking Good How some I your this seen the year. fact you've end mix the breadth this you kind that cycle I level. a of ones? the shift terms in I saw being across recovery kind other just tone quarter-over-quarter. guess weaker, would start of

you that the is can how So, you're just expecting talk kind wondering broad about if XXXX? recovery based in of

as regions and you seeing base. a growth broad. to from seeing Electric gas. very about all and think as talk continued across statement. it's think I we're were and Oh, segment our talking about going that when I mean, And positive a -- across geographic oil -- think oil That's improvement we sequentially much I be we hear I Lincoln

the in growth that We've the as business. now there seen some per are in demand oil stability as markets. element be much out gas the see $XX increase of much a broader whether around remember barrel. not higher certainly We've across start the in to There in stabilize marketplace. Let's as there'll We've it's oil range seen we an seen of and stability. discussions growing

that market that probably migrating So, it want wouldn't to we It's compressing. to perspective. like is the way not see I a just that in would imply growth from

I think a real push see heavy to in industries. you're going

in the point ag, a I we're reinvestment at think for cycle in that mining, construction. in in

talk segments multiple infrastructure improvement. whether I growth. two are today seen potential growth will U.S., associated about positively. perspective I should not talking of with there see the when fact XXXX. for of the would things which another confidently in see that a -- growth. be are support base the verticals when package about organic sequential that three I dynamics our see be lead are growth I We about the geographic look But -- on I've an that me that it's in to business moving pretty catalyst those or yet at broad quarters Those

of is priorities to you under out, And in priorities hadn't several it context years since But one while of That's -- year three XXXX, that of of didn't understandable. completed Chris. Okay, you just some switching maybe first quick think that I you any the helpful. the guess the Thanks I think kind real in like sheet top great. a of kind laid balance comes -- allocation look capital M&A, M&A the mentioned. was XXXX which certainly I over

I out your little the revisit So to marketplace about strategy? in attractive today. maybe going kind a you're talk still thinking a that of opportunities guess, next M&A? to year, willingness be can you part of about bit know I seeing the Is

strategy. that Yes, at of is capital I Dillon, allocation always share our would the you with M&A top

obviously We're to our very or items looking invest our actively for and that repurchases into get ability our want we allocation capital other and acquisitions to you dividend acquisitions we're to strategy specifically we execute on we're me like our within vehicles shareholders. But our the committed let discusses share assure capital market solutions looking. Standard So have our before place to Higher for more business. quality always XXXX bring to

change business, businesses of we're they down slowed haven't wanting paused. with We engaged any of have But our looking solutions who level by as would and were business of even that disruption Lincoln But individuals some love forward and have might pandemic. on some for in all selling during imagine their their the to migrate actively execute process Electric thought XXXX. and those you within can acquisitions has that to might that

for Okay, guys. great, time, helpful. Thanks very the

question from Walt Global. with next our the Seaport Liptak of comes line And you. Thank

is line go ahead. open. Please Your

Hi, I in trends the about thanks. morning. of wanted quarter. some Good just Good to automation. ask recent

like capital some wonder picking turn be I automation what year? up and for we budgets early the As the calendar looks orders could in the

are demand believe that across broken demand I into that Walt, broad with as in capital our be believe all agree on order migrated we're to into out spending those -- spending they We've But not XXXX. very catalysts improvements there about the side, some the portfolio trends. Yes, in or continue We've that. read in as talked to going trends about QX. the automation business are favorable any were continued capital in region I you We've we've there. investments Again talking seen their improvements see we're to consistent that out see we entering as for XXXX. improvement particular we what I just

really well-positioned in to and see we're our Our to that that structural a are and business XXXX. believe should into starting business moving see in area we growth is improvement as of start

Okay. right. channel you're if sounds see to some capital. distributors starting safety wonder in the yet? starting I of I All inventory. we're see Thank back the you're channel stock on wonder if It you. And some similar kind thought working build building the to like a inventory. that in

Yes. I Walt it seeing necessarily yet. that point can't we're

that still But strategic visibility we globally pandemic. to individuals and starting I back in And occur. the chain. increase the challenges there lot to I a that the told our March a has ensure teams think say able the of started make it, I products but supply could were in in necessarily continue our to decision components of inventory be of made we support that more There that can't and strategy. XXXX disruption they March into to there's broadly as get pockets we back And be COVID-XX we made levels. to if and our to had product, of

that helped us minimize think our for customers. I issues

with and Electric level utilization moves supply As per in have day Gabe strategy chains, demand market a sheet said, balance now. the but back what into of to yes, position higher this we service able we're entering our I and think on Lincoln a marketplace our good there XXXX the a inventory right And be as than execute that's with to the our if to will better be are challenges in customers. historically,

share you for may share to authorization as Wanted I have but sense. of us repurchase? missed repurchase the size the makes about have review know it you and this, that Yes, can Okay. the with

allocation million have that's our part disciplined market of our share we a remained saw and with be we're XX.X not is spend the around suspended somewhere maintenance about and we that. will of lot authorized as strategy in we shares of level repurchases, so of and in million total we terms and Yes, capital $XX

in that be you Does this market, or do that you'll think be mean year a year for bigger you'll will buybacks? Okay. be the opportunistic

hopefully Yes, and go be that part perspective. have apply capital expect budget. more the earlier our that acquisitions. as well, we're back moving shares in we're I we're the really can a that. but out and And allocating we toward make a targeting would the at to it sure share question. more capital there don't amount. We Again executing not to a incentive compensation, we toward want particular at utilization making particular of on marketplace certainly minimum XXXX, to an we're has to with I repurchase really that relative of looking from investments will amount acquisitions wanting we're through And not a that our it and sure as targeting us in certainly we're doing expecting that to year. as be to relates business XXXX in the execute dilution of

Makes Thank Okay. sense. you.

line of from Thank Markets. comes Barger you. the And with Capital Steve our last question KeyBanc

Please Your line is open. go ahead.

Hey, good morning, everybody.

morning, Good Steve.

on improvements. and comments international specific general the growth Chris, appreciate

a margin Just years. there few for quite around looking been at it's X%

year in volume to basis walk could the as point to picks there of or double-digit progression function XXXX get from a the a here maybe? of per say points is steady more you up So XXX where step

Harris say things Look, would think -- toward One point I that is I you I would two Steve. our back business.

we now year-over-year improvement And operation executed business portfolio. high-performing a in for we that the steady, in I of profile. is to consistent, us think business in margin ago, on our for were when, that that of And that we front that. to we investors So was going improve make several the were years improvements said and more structural a business Lincoln Electric

very approach us an quite business. that just then in of think of as business, more I short bit that actions getting bit tell that about the then structural the because we're is of looking I into operational think the little But am taken you consistent, over what of for I business a quickly XX term International actually flywheel step to a our aggressive a I it better would from a about you'll frankly, change I As see little next in year. every think we've months, where making kind XX some

business to in it step longer portfolio longer do months. then have almost we a little business. targets hybrid a the consistent the International get our XX in I term it's think to little I that So, think see of when term a improvement XX bit generating But next the over opportunity us we approach. you'll for

into organically, a R&D you something or is of that think new And strategy or differentiated get that's Higher have primarily is products, Thank about you output part truly anything group When XXXX you. it. Standard Got quality category? to solutions. that the new can into or that driving existing efficiency does expand the

both, Oh, I would tell you Steve.

whether that for if to fabrication in we make no even innings. to they're list you technologies. brought to last three else our looking there that the as that solutions very at product other some look an to new or continue twin the are world new very, the identify very solutions market is investing we space the year Lincoln their ways two and product, I opportunity currently of our that market important to But or believe really to we're let's two, business early quickly that additive HyperFill that the in one for the can I is wire at are something new solutions new you think be five and a that that's there But PIPEFAB go there place also improvements the in customers the in that enhance Electric; can operating not it's or which that's look, is years I down just brought place. technologies out. forgot whether

question into enter where solutions small areas recently, products really very relates market, to markets. last or quite solutions other it an breakthrough very and one into business, the a markets. basis. but the identify things to which to potential spaces that to our got that's of But migrate still we've additive of inside might of longer well side R&D solutions piece been new delivering very frankly into interesting as allow space your very Again is Look, Lincoln Electric, few to develop over frankly processes technologies, small visibility we've and from the other had trying we've about the So revenue to continue years. minimis strategy enhance a but only term very a that exciting had little as very, quite small some that us we're other comment, business market as de that not as solutions we current a

transition you. to that performed have That's automation really growth takeaways any the there? can I from downturn? to how you in And and XXXX, guess you great Anything as do you mitigate the there detail. cyclicality then Thank are other well, back in

some that Whitehead are Mike there to I think doing who us really leverage across is portfolio. So, a for things; of runs nice job trying business that

more we're business that always be the seen can versus for quite we we to to we've know have those his engineers a But Steve, the the place we of the ensure automation that that in any in improvements performs some multiple to down we ideas one to ago, work can can human in be because I about so have processes frankly we things that of across that point some ensure we little and when moving controls economic requirements at that have going able can of some more that when the other one have it's improvements servicing multiple as our businesses think time. at So servicing minimize we're business unique to working large automation team our I continue an probably to on make we're the have when equipment. projects automation of groups six a few the had how tools and automation I'll leveraging businesses we automation business is four impacts business at cycle have was things I within Lincoln projects site made years emerging. customers to a or think five also we're the the that months think forward. with That also that cycle. But wouldn't of the consumable share leveraging versus and capital been are bit about of as our that also we various solution. certainly criticality in that make in some Mike the as challenged improvements we're that customer that How just the our Electric? resources customers and I way site last in on had

double-digit Should the about. frame translates or expect international positives of since from single-digit a the organic and we've of I'm one the two for digits, more much call some up And in. should talked comp back that in -- Americas in Understood. the obviously Gabe Americas that up last segments? we just versus automation we growth into high-single in easier growth going to framework squeeze the on the just how

like the increases the organic consolidated see Americas that upside on provide that the I'd we to improvements will framework. of right us and Steve, We yes, just mid-XXXX you're -- automation in to to segment. to overall view stick within some want stick that kind

Got you. it. Thank

Thank you. remarks. to session. would This like does And conclude the question call back Gabe closing turn I to for answer the Bruno and

our for much. Lincoln today forward to to the joining everyone and look thank strategic you on future. you, in the continued Thank interest Michelle. initiatives for discussing Thank of strict in us like We very the your progression I'd Electric. call

And conclude Ladies today's in you day. all may a for Everyone participating you great and thank disconnect. conference. gentlemen, have program. This does the