Lincoln Electric (LECO) 27 Oct 222022 Q3 Earnings call transcript

Greetings, and welcome to the Lincoln Electric 2022 Third Quarter Financial Results Conference Call. [Operator Instructions]. And this call is being recorded. It is now my pleasure to introduce your host, Amanda Butler, Vice President of Investor Relations and Communications. Thank you, you may begin.

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

Operating for overview Officer; Steve of today of business Chris Officer; Gabe trends. detail. as cover agreement assumptions Bruno, begin will Automation. will Chief Financial performance the Joining Gabe acquire our full Mapes, finally, with our Chairman, financial well in our me call an results on and President discuss And review as Lincoln's and Steve our Officer. Hedland, definitive the discussion and Chief quarterly a and Chris will year conclude with announced is more to and Chris Chief Executive our

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

note call materially and statements our our factors. XX-Q. start certain uncertainties on in made some that A we expectations discussion our and our from results release our filings this during number in actual risks affect are to of results due discussion, of Before that and the press a provided XX-K risk forward-looking be may Forms please of SEC may may differ and

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

Good Amanda. morning, Thank everyone. you,

earnings as servicing growth record on to quarter as operating of job environment. and increasingly momentum activity capital in Americas industrial The automation on customers I'm report X. in an well and pleased did excellent an sales, Slide and dynamic to Welding returns investment. organization Turning strong great another profitability, capturing

key operational driving sales cycle our through a million, increase first, higher led through $XXX on customers XX% growth strategic shapes in putting our XXXX on price excellence successfully record innovating, standard current We employees been and in higher the and focus XX% X% organic achieved of Our to has navigating investing volumes. conditions. and market by and initiatives

Our from offset third benefited quarter approximate also translation. from which unfavorable X% partially foreign sales impact an acquisitions, X% exchange

with to operating Our more XXXX record considerably an years achieved margin. the return margin volume adjusted level at X profitability We to third value a consolidated marks quarter XX.X% and model XX% with levels our ago. that a is compared operating incremental with quarter third generating

We are year-to-date operating market at chain standard are our their are higher navigating also through end operating but XXXX consumables in our while improving strategy ranges. portfolio. target that segments are conditions within unique long-term standard margin higher margin Supply managing dynamics,

our challenged we However, equipment. to be continue in

we've a an neutral inflationary cost While are position in achieved we and to year-to-date, productivity price environment mitigate operate continue impact. the to driving

a Returning record implemented headwind. quarter in products earnings we per $X.XX, a XX% currency increased highlights. However, foreign and have share further Adjusted our performance to actions certain third pressures. offset inflationary pricing to to despite $X.XX markets,

which $XX year-to-date record a and conversion our dividends million, share a returns on through flows the with a to operations cash quarter Additionally, we bringing share XX.X% achieved of $XXX repurchases. $XXX We includes increase XX% XX% adjusted invested in capital million rate. and from returned repurchases, in to our return cash shareholders million

Operating Hedland, cover and in call our to standard XXth announced Officer, at towards recently to also XXXX business organic strategy our reaffirming to higher achieving the I'm trends. model, progress our Chief our our going targets. And our We XX.X%, dividend Steve increase consecutive now sales confidence pass

everyone. Chris. morning, Good you, Thank

in good China every achieved Looking main on our segments and Slide our performance across momentum all sales region, third quarter We excluding X. organic product of at X across groups.

product automation notably strengthening driven demand and by activity investments, production most strong reflect industrial demand. platform trends Our

end our at automotive markets, acceleration growth all transportation. sales an organic achieved demand Looking sectors, across in we in led X by end

also and over us as turbine heightened and as customers the other existing are a an in for production we benefiting EV fabrication solutions manufacturing investment activity and investments both trays end allowed this to and well or industry-leading investment and internationally. leadership and In maintained in proprietary energy period. position solutions energy, cycle growing Lincoln's extended expect host have from trend greenfield to support in We to capital of activity wind in continue of the sectors, battery or capture capacity accelerated increase Americas automation projects. the auto has this our

construction are and we strengthening in rates. Americas infrastructure and percent China. high general Europe levels maintained activity industries, all remain growth levels, as heavy OEMs reflects addition, mid-teens industries to seeing offset industry address industries fabrication Heavy elevated general weaker demand backlog international in production by low In partially

that in transportation performance catalysts quarter our and the acute shortening shortage third reshoring sector. energy skilled and favor change of infrastructure, the government growth the long-term significant including electrification reflects investments also supply of Our and welders, business, of the

are Gabe in the these we and see now well once of pass Americas positioned and automation. strength the confident industrial markets that I'll activity While around to due third we detail. near-term investments cover headwinds And each unique more and stabilize to China in pace call the area, to we cautious in to are quarter Europe we growth in are to continue and capture the financials

Steve. you, Thank

profit quarter. XX% fourth of Gross and and volumes recorded year from mix a the by $X offset consolidated Slide prior LIFO the in X% In to increased $XX quarter, increase These million expect from higher management. exchange quarter primarily translation, X.X% acquisitions. a million a partially The charge in Turkish increased to I higher euro the cost and lira. versus or XX.X% Moving charge approximately benefit $X volumes, currently increase on million the X. we increases third $XXX a a million. foreign X.X% unfavorable were sales our and XX% price, reflected

partially and was impact lower foreign operating leverage million unfavorable improvement from profit offset currency $XX by translation. approximately Our

XX.X%. year at Our was versus profit gross prior third steady quarter the margin relatively

$XX increased million Our of higher a decreased primarily compensation operating as expense and points increased sales SG&A million. or incentive employee approximately to Reported XX% higher $X percent discretionary costs of of million higher spending. basis XXX SG&A $X to income to million as well $XXX sales. as due on X% XX%

offset costs million $XX income million favorable adjusted exchange recent items, announcement, transaction on Excluding increased foreign to of segment operational an unfavorable higher operating and partially our $X and million in which mix, XX% automation charge translation. to acquisition from improvements our volumes special impairment asset automation primarily and [indiscernible] related by $XXX was

to income incremental operating million borrowings. XX.X%, margin. margin adjusted expense generating quarter approximately points XXX in Our to basis $X.X higher increased million a increased Interest on $X XX.X% the

We the in interest acquisition. to expect quarter be fourth impacted expense Fore the book by from borrowings

to effective as earnings XX% was adjusted mix due our tax rate discrete quarter and and items. approximately reported third Our of

We expect subject XXXX to tax of XX%, to of items. year mix and full our extent effective anticipated discrete be the tax earnings rate approximately

Third diluted share $X.XX. quarter per earnings increased to XXX%

items, incurred $X.XX special foreign increased to diluted a XX% EPS translation. We a record $X.XX. to Excluding share impact from unfavorable currency adjusted per earnings

approximate adjusted EBIT versus quarter as benefit led improvements led growth, the sales and basis organic inflation and XX% from adjusted was accelerated million. such customer and growth, the growth cost approximately energy Welding consumables. XXX segments contributed end approximately basis reportable to XXX from capital volume third XX% sales industries and automation markets year. X. management Organic production EBIT an The XX.X% by points sales Moving [indiscernible] as general automotive, Americas approximately in automation effective margin quarter implemented reflecting activity on operational to mitigate prior pricing and increased to to XX% to increased Slide The solid key acquisition by strong points Americas segment's approximately Welding growth. increased our investment. and $XXX volume XX%

Welding Europe. adjusted XXX International of million and to or The by Moving translation. to margin approximately broadening and which points unfavorable $X and exchange EBIT the Turkey, India. declined by $XX Middle unfavorable actions in translation. increased EBIT and of unfavorable inflation strongest basis East decreased XX% to pricing to foreign Slide to with mix $X segment's exchange to timing X% and approximately impacted the increased sales due Volumes pricing actions adjusted higher XX% The Organic mitigate from mitigate prior demand foreign and made was in adjustments price primarily million, led million XX.X% XX% X. price

Moving to the Harris Products Group on Slide X.

in decreased offset year-end weakening leverage and point approximately XX% expected commodity from quarter and solutions XXX reflecting to XX% adjusted gas customers. specialty for which commodity prices. August. the back due anniversaried retail XX in the approximately margin $XX organic offerings. Third demand serving is than benefited channel, and a FTP increase market, HVAC certain pricing metal basis increases increased in on operating stronger Harris's EBIT X% lower on in EBIT trends. fulfillment high decline Volume the to higher metals which continued to price also softness HVAC in through persist The volumes basis acquisition These sales orders on segment from points expected was in a the decreased The of sales serving continued declining consumer to decreases adjusted XX.X%, million.

we the We cash at XX% sales working higher inventory maintain the in remained the higher X. Cash elevated levels flows conversion, support chain Moving $XXX XX% quarter quarter. operating seasonally supply of to of million, average end conditions. mitigate generated of increased sales as levels operations reflecting from challenging high Slide at flows to to capital cash and XX.X%

continue above balance of be to expect cash the the through conversion year. We XX% to or at

to pass assumptions September and of our count. a through our with maintain balanced Fori have share million, maintain X.X higher discuss us September cycle. X% And I'll million Slide to our year-to-date, at $XXX balance for buybacks capital balance million outstanding recent over of and strategy to announcement. Through in $XXX back XX have on million spent the returned million allocation to We debt and year invested $XX the position a through Chris XX. strong we of dividend a automation the shareholders profile repurchased repurchases. shares share million approximately the CapEx Moving call updated and share $XX payout to spending We or now sheet of allowing net our approximately

Thank you Gabe.

confidence to organic Welding to XXXX Slide of into we full in remain seasonal typical high my sales follow year strength Turning this incremental discuss The and Americas Heading and well trends equipment. our challenging growth automation in conditions, secular high on year. achieving for a the capital as fourth end cadence to XX strong global our expect ability quarter, the and continued assumptions. and reinforces as margin range our mitigate performance to Americas demand

cautious trends. channel on previously retail Group Harris welding we mentioned, consumer international on more soft As Products we're the in and

acquire to Turning Automation, recent announcement year. Fori agreement to later our we've to Slide close discuss expect a XX. We signed this I'm excited which we that definitive to

production held Lincoln's solutions solutions portfolio, industry. and Fori a leading drive firm our systems welding automation as as complex which material They systems. provide automated leader offering providing and to distinguishes engineering testing efficiencies handling across privately further platforms. large-scale, in These OEMs in assembly to with also automation end-of-line complementary are automation the well

are across our end strongly floors, and and both customers factory to the tremendous serve We which markets. up from ARC opportunities on positioned offers now downstream cross-selling

of sales accelerates Fori XX outside Korea. new Europe us presence is rate increase facilities current proposed with and portfolio transaction footprint in sites of our broad run South annual sales located to which China XXXX would Detroit, our Michigan international the India automation $XXX automation over $X a across towards with to billion. of our that XX and million, a goal The headquartered Americas, network expands

Fori's achieving with integration existing we XXXX. percent and will post margins, profit margin volume double-digit our automation automation target comparable its are low expect EBIT growth mid-teens EBIT margins percent and support synergies portfolio in

by agreed of with a cash growth integration million approximately to multiple and a line new represents XX. our of disciplined ERP Turning price profit system, driven and We've X.Xx to business processes. top $XXX Slide Lincoln which EBITDA purchase improvement including through a system synergies

costs. to be business accretive year $X.XX first by the earnings $X.XX and the reflecting full borrowing close, integration to expect post in to We

to to expect accretion that also to $X.XX in double $X.XX We XXXX.

transaction we to which with announced, cash a in expect we fund loan As finalize the approximately $XXX later to term of this intend million range quarter.

I'd all proud value of team for for higher conclusion, our the executing to continues reiterate increase million annual $XX We And I to who to EBITDA call forma customers, I'd to leverage driving XX, how September X.Xx million gross to over drive will to in debt to our industry lead ratio shareholders. am basis our increase investment-grade $XX approximately global standard on term will strategy which now expect of In by like a pro loan our innovation maintains of expense interest servicing as like on and our the and our profile. the turn questions.

Instructions]. [Operator

Our Blair question Bryan comes of line first Oppenheimer. from with the

Had a very solid quarter.

Bryan. Thanks, Yes.

contemplated for extremely forma XX into given likely simple my were the XXX year remain that jumping XXXX, trends incurred $XXX. plus here, you're XXXX. with revenue now that when target and the deal have you off the by getting correct this encouraging automation relative least the run was the billion pro X at Automation given if the point rate if plus. math going of transaction, to established $X it's if reasonable proves to think size I'm something curious, into the Fury to $X billion it's you And

and plan of a in are fragmented on We trends question. That's the underlying to But that opportunities for portfolio. growth not our potentially confidence I've to we that assets see we we I I'll automation the exceed target. second valued Electric recognize there to and that in was had. really of And question, the continue still got a it's to think which Lincoln automation. in in could we of sort portion some lot a your marketplace, tell bring like strategy you very great that that need focus Fori is in

that is the automation continued pace record and at and we're backlog into at moving Our fourth level a quarter. as

material AGV capabilities, leverage of that's broader which we to brings being bring, months. which floor. an growth continued And the strategy automation our exceed I to across the the technologies some base the Electric, desire bolt is for the to and that opportunity utilized manufacturing seeing as potentially on that in advanced we're Fori the business us handling on especially executing is us acquisitions believe relative with just XX they over new the target Lincoln customer that strategic it more our into next on certainly space, we're can

minimum commercialization. term to about catalyst scale the Lincoln's if of DC optionality in market, partnerships the may out intriguing. I wondering Lincoln We or, great charge another I competitive the at play as guess, All the strategy angle technology or your on to that hear. was and longer and opportunity the announcement the look over thinking touch could with And story. regard find fast for you're highlight that potential of Maybe potential go-to-market how you initiative. BV the pretty currently towards recent you

Steve potentially very Yes. we Lincoln color let what company. power excited Officer, about initiative. business. we're on have you inside the within Electric. Steve Chief has mean Operating the technologies scaling it could driving And It's at for initiative and We're EV our our been And that really more where that electronics Hedland I'll provide with competencies the really the really

Yes. Thank you, Chris.

our for well long initial our proposition the value still -- I this we're operators I designing in and them. -- ChargePoint understand would people Bryan, both on early unmet high-duty and Biomerica so history, say, manufacturing They very story And resonates and an enter market, environments. understand far use believe we're electronics very all integrated market. can cycle to easily that the this vertically very feedback we severe positioned the power need we're address well people that in the requirements. heard we've chargers as They We've So strategy. with had guess, innings our into as market meet provide with is and discussions who other and in

our start So to up really engineering the get ready and for to now to scale for it's challenges operations production. teams

question the Walt line with next Our of Liptak from comes Seaport.

if of you're and you will the that detail the more stable, offset could out cautious do a about how big India, out India. you're you Turkey bit or our -- little ask to you little in is -- us and looked seeing -- what is seeing Europe think -- provide Turkey about it bit bit and you sustainable in enough internationally. called a be with I just And talked more a growth but you're wanted wonder I enough little about future? that that

demand the to models work that energy around as highlighting what and with into move as and that look, I think especially challenges specifically just the permeating in colder certainly that's across mean months, Europe. managing Well, Europe may is crisis probably we through those energy migrating they we're international Yes. markets the the QX the into potential the and in and uncertainty uncertainty

some we've So business. seen choppiness in that

in Some it some We thing the mention in bring me which actually active of that that be of probably But Fori been Turkey. have we've driven also the investments that so that although in is did the demand model the large support market. pricing is us I choppiness most by actions made the consumable what in We've involved like because some will might areas inflation. other dynamics automation that or be able a with the concerns into that may of on what the start made as may we'll fact, Lincoln facility that a on and to like company investments that's site finishing our really of looking we're and actually head I believe not factored we perspectives international market. should to India. we're that We an that in But look Electric our be managing that We've achieve we're strategy, for have XXXX. the up India, like. well. to we strategy acquisition able going

the occur those centered So the it they're and of in challenges is of we will that the markets. really that markets because around more certainly some of seeing those energy inflation think around the uncertainty some

Are past? you signs Okay. doing we're you been are region it in Or maybe or a Great. signs slowing? you've And -- acceleration you that is seeing just great. early any getting? through the seeing the of can Americas the is X clearly, cycle any

believing cycle. some that that. industrial believe I and there is that our and those Americas investments of positive in automation belief early certainly still -- prepared in also certainly, why customers and the especially investing we're you markets that cycle. quarter-to-quarter, a the I out industrial be we're I behind to we've in in And from cycle And business, of in But economy But those of think see segments. then and to the in a positive from belief our go between positive our serve benefiting industrial some are benefiting our Walt, because we portion and business in business believe migration reason this were a might we're seeing today. broadly,

So that we'll that are to evaluate many exiting believe positively moving XXXX. I positive for and XXXX, very for trend hope that. that's of segments positive us our that still a starting a that's as look at we're on When we're trend, have I continue this And we positive would to us. thematic

Okay. true. that's Yes, certainly

[Operator Instructions].

line comes Dobre question the of next Our Baird. with from Mig

It's Jogaboski morning. on quarter. for Mig nice this Really

more your or double-digit which So Is growth for prior you the likely growth that but anything there you to end about organic reiterated the fourth tougher Is can this in cautiousness higher quarter and you compared just point pricing? to the quarters. implies mentioned now the international moderating guidance, XX% growth to? low X XX% comps

in currency quarter. keep just continuing also assume And into actions pricing the quarter fourth you Joe, we we impact the and took third to the year, fourth that from last you anniversary see the see year's continue that in that we experienced mind last quarter.

sales, of some in to terms seeing of that that. range. provides we're organic But that higher the So type end offsets

it. Got

outsized transportation higher. driving automotive in in growth the follow-up, impressive a on function was what's my bit, a little the step then expand it this took really growth? kind And of Maybe quarter, and Okay.

XX%, read you production So think reports, vehicle tracked up and light levels, with was about but just, in production that. September our business vehicles, the Joe, we can almost the

good seeing So production plus on fulfillment capital investment. you're

coming capital the our business. from see You automation investment

have and inventory production the talked, automotive positioned that our low sector. you're to we're seeing we've as within been in So the levels serve results.

make to my transition And have at automotive believe don't looked the before, in that technologies and I engine. Joe, I that same that as look requires technologies forward at requires do towards they on industry know that in combustion going to they're time, we marketplace the within that's seen And facilities, a within I at automotive, we've internal career, towards is and new they're changes to requires I EVs. profile historically mentioned we've those -- slightly think new the we would the see continue investment, have when and comment trying but other of migration more differently migrating type demand it for capital yet basis. that their

Electric. Lincoln we're another So And also that automotive underlying that transition and creates demand within probably transportation catalyst seeing space. for the it's

comes from next Barger the of Our with Steve line KeyBanc. question

how Fori an for and complementary some -- products, like looks has your robotics? things market estimate do changes new but have It you addressable also Great. this for like for you some the automation

I'm know the automation flexible automation. We're automation Steve, it that, What more that. with and we it know utilizing your cobots, with manufacturing flexible the towards you The step market systems, material certainly, that process. handling talk because within really need strategy. migrating addressable seeing move -- our I executing might our as possible. when I'm you XXXX where in is the to spend on how time can In should automation, to are more be. automation facility. just migrate that of desire portion you AGVs not there's industries migration about are you in that flexible a really, are what other sure past, But think our put We where a permanent change some about put that ready -- automation to have that's we're do to we in AGVs think the we about

expand And for the portion that marketplace that us. of does so

around the last manufacturing cell that within other installation The wasn't And It and is, interesting, a facilities around facility. application. the all own or looked I at just that was X of automation at had we thing one weeks it's of and that X in or manufacturing process. was our welding large cutting

also in strategy addressable within think, continuing as of is this able we the and those potential kinds identify and opportunities, those be a move have and market capabilities participate forward. to of expansion We I to

right. you're So

core. got the I think in great it's some new capabilities for They've us.

for to strategy. capabilities, that an to those can share as and and our even and larger migrate customer potentially the base. with think sandbox you continue to that us longer in automation, global I term than about we executing think play we're opens up we'll on

in would a station the a TVs unbalanced the I industries to for builds which around good applications other for places heavy, market suited and us gives been are Steve, take line. that have had handling steel product and parts that where really ideally customers for and they like. suited while through that so we a in their well structural historically, move through add lot heavy to And a moving way designs and warehouse efficiently of different. and AGVs haven't those excitement can are to very large, factories, fabrication They're that The factory from parts station

Yes.

interoperable you I set? other AGVs are exciting your talk point think the flexibility, other And And AGVs acquisition. are products? these vision to part for guess products to how your these as the maybe your for about product on automation expand and a really interoperability you I this relative can of

driven Yes, want that to within for business. their we where we within systems. then to And communicating make floor that productivity that aligns information for Steve, operability shop importantly, are Certainly, looking our sure looking and with customers make that, the the operability are we sure maximizing want the what process. within customers X as that really develop really I can be by we the drivers think that's

as what still products comments, to we're my our those we we that can as relates So from about can with Steve's But very early innings it's for portfolio. us it you systems. to in and excited our addition comments product do think tell

agree. I No, Yes.

I think it's a great pickup.

with comes Jones question from Stifel. Nathan next Our

This is Farley on for Adam Nathan.

So it's volume chains see. versus be shipped at -- supply lot improving How this are which potentially from higher much rates quarter, a that is volume order increases backlogs to faster the reaccelerated comparisons pace? of in a nice to

I think through are Adam, driven activity. by drivers consumable it, production So the

in in on side. more we -- stability consumable been our as the seeing mentioned chain comments, supply we've So the

Americas, side, So that's real on driven currently. tint automation And strong then by activity the again, growth. the

our Our study the fourth backlogs into to third enter are from quarter. entering holding quarter

side. demand strong real the automation on So as as well

your another way, lead improving? where Okay. Maybe are versus Are XXXX? just times times lead your today

shared I've times you that are sequentially. look, lead the improving with So

of of may There we're in consumable We raw associated it's still that be of of mentioned, I not with components, the and material like points more with in of starting the issue some As our and that the metals-based control we have inputs see price them, to stability of not some some but availability. the automation. we challenges an in might are utilizing our on electronic equipment chips components some the side business the products.

that future, next is to probably quarters. we're areas, X in those the supply those seeing at expect areas X the going least chain So still the see which in to of challenges the for foreseeable chain what supply challenges and we're at least for we see

equipment that's still back made on believe you'd really commercial And the that, our A our even are for bounced our as way side of I frankly, products our internally. minimize are that marketplace early as have initiatives lot chain have to the marketplace. and the we well. market, quite proud on really the I by to And materials X mentioned, last additional challenging the for consumable side. did the and fact use And of frankly, and strength out expect, we well And the business But that we've both try in customers. to the we today in metrics and of think X business just to some supply through going the and about with customers available business. improvements, from our of And the it able ready thinking how manage served balance the been very in have we have on, So the the quarters. side sheet delivery is we're we've of quite very performing us of procuring raw marketplace. components our over the challenges our decided might impacts our to seen teams protect those to on-time

Cumming question next the Morgan line Stanley. Dillon comes of from Our with

to sorry the just on on one to ask but of automation, check kind targets another I wanted I'm margin business. of in EBIT the

XXXX You mid-teens-ish kind the that of terms average probably the next structurally XX% lid total years? obviously kind of is I'm close in do actually on company few of margins underwrote level kind What the automation. for corporate to over by level. getting year, curious, average broader you're kind closer of this to keeping target of of kind the going just to

corporate right made at this we're profile. on average a at tracking EBIT year our we've Dylan, OP. And So low track step to that right, objective, change that being double-digit

profile, on we've that target. that continued achieving to mentioned much That's going come Fori mid-teens both targeted organically. towards very growth sides As and we're from commensurate the with

leverage some have System. also you Business there, but development Lincoln our continued So of volume

profile year, our double last talking digits, We're So on increased now track margin high about single to to and mid- meet and we're low our we're XX%. digits objective. into

I that that chain kind the Okay. I unlock EBIT there next parts guess kind of going could Got in-sourcing might over the where was consider too, automation of And business? of maybe that, few supply greater any for margin you potential it. years with that is, are a

capabilities always into would We're more at be we the looking whether bringing business.

great to the and ability our a the a margin the relates capability acquisition catalyst as as I bring is for profile. us to to in AGVs it Fore think add a

creator. an think us other a of thinking we're challenged we because position. I up think But that from a necessarily we're from would that today catalyst a supply can't to to product believe not something That's capability that, that. enormous quite I about in-sourcing perspective markets value a be frankly, be today could opening

we it. Now I share we'd if you then strategically, also consider can with did,

to the that do term. benefit and our would that's if strategy sheet we're longer But not today, balance something that we to that the ability have be think a contemplating. We that's something

drove Okay. in That's performance could just maybe or vis-a-vis that of the gas sneak cost unexpected fair. in put kind broadening margin broader one a pressures of of Gabe, mentioned to I'm around the weakness kind that prepared that labor, of Welding terms of international point impact freight, some if curious in regard Europe your versus just can that you remarks inflationary of et around of kind with And you in the saw EBIT finer I kind last inflation like inflation in. any just you cetera? margin one natural energy electricity quarter.

continued maintain and the respond it's do neutral No, ready pricing pricing energy we we're particularly but with pressures, side, actions to cost to inflation, on Yes. to posture. anticipate price broader that

Our last with Liptak Seaport. is Walt follow-up question the in queue from a

handling percentage Just the maybe What welding versus the one acquisition. one last Fori is mix automation other? the material on versus of

in going really Walt, time. that and look, I'm this provided out, at information probably we point haven't not to

an in nice then that add at participating is the business. think is business capabilities when not we of welding and a we've -- be new the our that I larger it I And does element frankly, AGV slight business. look got as may that we're have weldments quite inside testing the in-the-line thing to in the the

to automation really mind one question. X there's that I and is For globally. about we first me, people no come think there's cutting reasons, welding believe when

But we lot built also think reputation customers marketplace. can to involve we and that understand built I business. don't a we've of have in make We've the that broader capabilities, this do may even things sure that arc. need the we

we business, internally. time, of got automation I we're look our trying with term. this strategy longer so But and think to it's Fori complements a in at mix at do the And nice inside what point that

exposure much Europe understand. for sense. versus the Fori. makes I international could if you wonder Yes, Americas with then Okay. in us maybe is much and geographic mix, help I how how

Yes.

once to will in. Fori be integration integration the process, able broad even automation Once for what, Fori will well. to be to folded able just start you period determine know we'll be a it Well, what's versus in difficult ability to an migrate You start well, have very process, across short us the time be we us and the know we because what's portfolio. technologies of those capabilities

in more it So a but the has around nice world, presence than the of markets, certainly concentrated was look, it it it in areas because market U.S. globally the than couple but global. North American-centric is those more a is global developing

and to now turn I Bruno Ladies this question-and-answer to session. gentlemen, would back our closing for you. the Thank concludes remarks. Gabe like call

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

you concludes your for participation. and call. today's Thank conference Ladies this gentlemen,

disconnect. now may You