Lincoln Electric (LECO) 31 Jul 242024 Q2 Earnings call transcript

Greetings, and welcome to the Lincoln Electric 2024 Second Quarter Financial Results Conference Call. [Operator Instructions] This call is being recorded. It is my pleasure to introduce your host, Amanda Butler, Vice President of Investor Relations Communications. Thank you.

You may begin.

good and Greg, you, morning, everyone. Thank Legal to Electric's Second Call. Conference XXXX Quarter Welcome financial and lincolnelectric.com earlier our released results We our today, Relations this slide Investor release call you presentation the at in section. and find can

me President Chief Hedlund, our Financial Executive is Bruno, and Officer. Gabe the today and Joining on Chief Steve call Officer;

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

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

A measures section reconciliation comparable website again non-GAAP the we most in release, our the to found Investor of financial Relations of In do addition, not GAAP discussed measures GAAP financial that available in which earnings our measures tables the is in lincolnelectric.com. conform U.S. at to

that, call with turn the Steve over I'll Hedlund. And Steve? to

Thank Good you, morning, Amanda. everyone.

Slide costs. to the results, to of report execution strong strategy am X. has management higher pleased quarter standard team's the diligent of and structural our improvements demonstrating business initiatives, solid in which second cycle. organic I year's record a XX.X% through challenging us successfully margin last at we income to steady the enabled navigate held rate. sales X% quarter, portion Despite of in more of the an decline our operating Turning

on for operational focused team I initiatives environment. global dynamic our and would a executing like thank to commercial in staying customers our and the

cash solid flow and at conversion XXX%. performance, cash reported also earnings We generation

capital million quarter repurchases. maintaining in our did the acquisitions, and growth in shareholders dividend and strong ROIC in We business. while stewardship but the not via through continue only to invest also this quartile highlighting $XX returned cash CapEx performance X in top We share internal to

the industry OEM Slide production quarter. automotive welding customers, X experienced heavy to to levels conditions weak demand general segments in macroeconomic lower due industry organic the sales in impacting production We sector. and to trends in among X discuss customers Turning lower our moderating our

We also and plans and of capital between a projects automation fabricators platforms as the small- investment as moderate rebalance capital hybrids in for in internal pause their increasing economic saw the combustion and future medium-sized OEMs automotive powertrain product EVs, spending uncertainty. face

factors, challenging in equipment year sales X% with These along prior comparisons resulted in decline. a organic

the X end or at Looking and international of sector approximately sectors X by growth strong industries General global end markets, challenged. modestly, projects. infrastructure our industry markets construction in while our more and heavy XX% energy quarter, end our sales declined mix automotive of led grew and were

that our line in for to growth is highlighted $XXX Moving pleased previously which from X to sales new I year, have XXX-plus pleased million our Slide prior Viking versus strategy. basis acquisitions X which discuss X generates approximately points and Vanair, Automation to April am of announced with of report earlier Red acquisition annualized we we in growth. today. This including We I'm investments and sales long-term year-to-date. added acquisitions,

has solutions. developed deployed it that designed across game proprietary changer automatically with robot of wells days a a can is complex robot broad a reduce impressive a programs to believe a customers Denmark a from to This enables applications, range Initially program intervention. welding automation the to is human make we takes integrator solution technology repetitive but minutes. Inrotech AI-based shipbuilding First, this time technology in to that for be small that minimal

this to while and of Vanair, welding leading acquisition which is of customer mobile solutions. mobile products portfolio existing sell our expanding we solutions segment the today, a announced player the for to power extends in This reach service battery-powered truck Earlier acquisition industry. channel our our

response co-development we earnings run to projects working We year generate been Vanair have full to have estimate initial to operations. pre that rate strong launched several to $X.XX work integrate as will X customer on their the an our have products acquisitions very of We with $X.XX we and synergies date. share seen per

an report on Slide to fast NEVI I designed initiative. charger and fast our the successfully meet EV Velion X we our proud am that that XXX-kilowatt to charger specifically update Moving requirements. initial was launched to U.S.

feedback private of have have received key achieved sales a NEVI to number opportunities several prospective and customers We tied milestones from pursue fleets. and very continue and to encouraging program

much market the how deployment accept However, nevi last in to significantly in X begun vehicles investments months. charging with able evolved funds of new has charger has been levels, slow. future-proof market charging the And the The has question higher to hardware. EV very to

have several or result, hardware manufacturers industry layoffs. a exited announced become leading EV the charging insolvent, significant As

While positive, specifications. new to In products response, NEVI's customer to to enable accelerate customers of capabilities our been better and introduction response of that leveraging value proposition technology architecture differ the modular us the serve our many has evolving product manufacturing nature to products needs. want now materially from overwhelmingly are we

XXXX. to will this expect revenue any of start We extend late meaningful the ramp

market an performance are improved remain adoption. to without in for manufacturing business, significant need opportunity that incremental by is the with expenses the associated investments. inflection our operating further long-term and EV charger commercial reaching of almost this is confident potential attractive point pursue the additive We that fully the The initiative which continue we offset will

invest maturation ability technology welding our position while business. to opportunities ahead execution create of the of team's manufacturing core The after to outside am we many on the cycle. and to is our development several of I capitalize us competencies long-term value and to efficiency. through deliver to superior operational evidence in growth efforts These the pleased leverage our legacy a value our additive of of with strategy in incubation environment years challenging continue

quarter the Gabe second more to in now call I'll to Bruno pass detail. And cover financials

Steve. you, Thank

Moving to Slide X.

of X.X% which sales prior increased points Gross exchange. lower increased were record profit from profit to benefited points by X% million X% and and margin, Our unfavorable to $XXX partially achieved declined which approximately XXX quarter foreign acquisitions, from price dollars basis billion year. a to X.X% offset XX.X% $X We second X% the primarily XX versus basis gross volumes. higher

Effective million strong We LIFO $X.X cost quarter. generated the and operational benefit in profit performance. management recognized improvements a

SG&A of a percent costs increased sales Our year lower XX.X% acquisitions, higher million increased from corporate $XX of a X% sequentially. sales combination basis incremental employee-related to costs. points expense relatively on as but or unallocated steady and versus prior approximately overhead SG&A was XXX

expenses corporate closer year. half to million $X in the per the to We expect of quarter back be

special $XX charge a business. Reported operating income final declined of in XX% item million $XX our the Russian including million, primarily liquidation due noncash to rationalization charges to from $XXX million

transaction loss We to million which our also a divestiture disposal an million $X related helps $X shape incurred asset in international acquisition-related from a and costs. model small

adjusted at items, prior approximately income special our XX.X%. X% Excluding to margin million, and while year $XXX adjusted operating operating declined steady versus held income

the our Interest billion million of rate, proceeds these expense in loan we senior fund year. our have completed $XXX with we rate in versus year in impact X% interest notes $X.XX $XX.X total note to including refinancing recent acquisitions. average X.XX%. new $XXX repay and be weighted to August, debt late our expense a million, relatively for transactions quarter in the and interest June, net This Once will used swaps the flat full term of the net of unsecured expect million declined where issued prior announced reflects interest XXXX to we

new At into revolver. entered and X-year the also our liquidity higher not credit against EBITDA billion to align We borrowings performance. XX, we $X increase revolving any did a with facility June have

a asset discussed. a I $X.X we reported Moving the the the on million reflects further million $X rate $X.X This offset which termination quarter. the million interest impact statement, of income previously net of loss down swaps expense from in disposal, gain other by the

other million prior was million in and items, income special $X.X Excluding $X.X year period. was the

was quarter rate second lower on adjusted effective was an basis, tax Our On tax XX.X%. rate reported income. XX.X% our

year continue extent effective the tax expect adjusted discrete and our items. to tax of anticipated low full rate to We the of in subject to mid-XX% be earnings to range mix XXXX

Second share quarter diluted $X.XX. per earnings was

was items, special earnings share Excluding diluted per $X.XX. adjusted

The product sales reflecting and sales challenging Americas and and X% Viking our systems. the Steve approximately Welding with in Price of segments benefits Moving to all volumes to acquisitions in prior areas, X% lower previously decreased growth. the contributed discussed, automation our Red Slide X.X% a compression equipment across primarily comparison quarter, year and Mig X reportable on due factors X. Power

increased We expect management. second in segment price basis points versus XX XXX adjusted on quarter X% margin of to XX cost benefits approximately Americas quarter. The to effective points prior to XX.X% basis EBIT the adjusted Welding declined $XXX million. EBIT year third

Americas welding remainder of to expect the range EBIT the for XX% XX% in year. the margin operate We to

in continued X% portions the International impact was offset European Moving Welding regions adjusted margin as repeat. not be to underlying performance declined Asia The lower by cost expect segment automation Strong X% on Price mitigate disciplined performance volumes. X.X% XX.X% activity The and margin did but approximately sales East lower quarter-specific Pacific Middle and Slide macros. declined project we X. price volumes. sales to do offset of weak reflects to which inefficiencies, EBIT management, lower helped which operating by and not

range in We XX% to EBIT the full to year segment XX% expect for continue the margin XXXX. perform to the

Group Moving Slide to Harris on XX. Products the

the grew Harris Volume but management. by their reflecting record improvements sales narrow led partially XX% quarter declines high as was challenged price in margin which XX.X% volumes. HVAC offset X% on points by market. effective XXX lower X%, increased quarter, were to offset and costs. approximately EBIT increased basis to to by Second $XX specialty metal cost a seasonally a adjusted retail The EBIT increased higher in Adjusted gas rising approximately X% continued and million. operations structural and

the team the the year. to in EBIT expect balance of XX% XX% range to We the for margins generate

Moving operations quarter, to in conversion. flows the cash from in We $XXX generated cash XX. XXX% million resulting Slide in

versus Our decreased levels. period improved XX% year operating the inventory points to average comparable XX capital working on basis

shareholders XX. return in from in $XXX approximately adjusted invested XX.X%. and capital $XX returned Moving Slide $XX higher payout We quarter dividend the in We a CapEx of million solid and our $XX We to million in million on acquisitions. of maintained invested growth million million repurchases. $XXX through share to

For opportunistic the of to year, and share balance on the will growth focus continue repurchases. we

XX operating assumptions. year Turning to Slide our and full XXXX

the assumptions end a slowing that trends reflect we more cycle. provided are May the late We in of market maintaining challenged portion industrial in

to tracked assumptions. in these June have Our July and lower sales

As risk industries plans OEMs the the expenditure operating present second assumptions. we added heavy as of of timing half demand year, are focused factors these the we our trends X progress and to through capital automotive on

XXXX, As stated the the sales mid-single organic percent in in May, we at likely higher with digit expect decline typical end seasonality. range a of in

to in expected XX and which slower in of most activity from industrial in to points sales welding We to million segments. XXX of recognition. Americas Acquisitions the on to We anticipate growth basis the are to weighted welding. fourth notable based $XX of capital expect acquisition $XX year, revenue weak million be of contribute primarily be price second the contribute headwinds volume spending, with timing quarter the will will half our sales

approximate with the growth In the third contribution to addition of we quarter, point sales an XXX expect consolidated basis Vanair.

to the We to contribute EPS integration expect with half year the acquisitions high $X.XX $X.XX second in of activity. of adjusted between

basis at Excluding performance XX.X% initiatives. We XX reflects benefits benefits margin points, structural acquisitions, average improvements diligent the working cost impact continue up to well full may we basis. we the This year as the income operating acquisitions a Harris are model to by both of anticipate in margin that and cost-saving on impact. full Automation's year unfavorably operating from but management income early solid as approximately operating estimated to our the minimize estimate

the initiatives strong percent accelerating ability portion by XXX-plus Before we conversion. technology with remain the mitigate efficient cash well like also acquisitions. focused I We're questions, call we through would our line and of stable summarize with are business innovation top while that for driving the from pass through I managing our new through businesses a new adjacent as as weakness on margins, into flows demonstrated solutions cycle, whether to market operating growth. as challenging core our more and cash a to the by demand by in

turn would over like call to the questions. now I And for

And today comes Instructions] looks first line [Operator from of like Angel the it Castillo Morgan Stanley. our question from

where bit continued little kind a you're just unpack there demand It we we're at looked of bit some seeing market from into production perspective. sequential like saw end an improvement the were buckets could second we under kind hoping others what where maybe was of little half. just more the deterioration a hearing of but I or

and kind on to date of kind today, So kind books just of based evolving? you order your that just see of conditions where

Yes.

for question. So that Angel, thanks

adjusted in assumptions in as the same we acceleration business. an and as July. heavy ag at saw we our certain Just noted, we of of the progression the side June May, patterns to within saw those we And emphasize, industry, in end of demand areas of our particularly softness

And about even so we market talked the about some into hybrid. demand is second half. automation between our of When its within investment, more we pause between considering progressively see and next that steps the how ICE we've business, EV think

And we or pause air continuing. so see that pocket

the And at look market of we what that's seen so end we we progression, as more same in date. assumptions have. why see our have in to as we we maintained business the And

could within just automation. have quantify you maybe you now And degree us help coverage of

that kind still orders, kind we've that case? month you've of historically, just the of evolving? is some pause had in coverage seen of given think I kind of the within Or Is level how that. visibility that

that's that sign, we our did in the some outlook. think assumption we automation to fair to And midsized in the business average of type is about particularly fabricators. still But short cycle in Yes. small I on saw of point a XX% X-month which pullback,

to X of months X beyond for representation for look we mean that projects, they or extend the shorter projects some continues in X, months general, at be I for, is mean on a us. do end fair between mix. example, a But So that. But I of our and the longer challenge

comes Blair from of question Oppenheimer. with next line our And the Bryan

medium-term And that a revenue been surprising Has rate given expectation view of still time of all landscape? team's will competitive a the not parts it's brand? bailing the as the that pushed fast shifted I'm terms on similarly, back moving mix line In potential commercialization, accretive your that, has the revenue bit. DC be

Yes.

One, reverse money more adoption to infrastructure there. in the charging NEVI buying around think anyone were And needs the program is spending that in the is, people revenue rate adopt of than has have everyone that. be slower is market much the missed has anticipated, has And at which fast in timing on of in believe thought of to second U.S. the robust the standardization they to the the take U.S. order buying how that as going electric effects. or $X to the the Yes, to platform had billion We industry. in market common aren't question of opportunity EV is we still do we the billion remarks, mentioned Bryan, which I that standard main vehicles. and hardware XXX-kilowatt to be accretive still The quickly to at. else invested real been So business. X order. I charger, rollout $X going as drive expect a funds relatively would the the prepared the to driven The the everybody drive DC be the

have at that. terms out Now service in best they and figure capacity at seeing to looking vehicles to finite to trying lot charging how people a looking a of can what site you're is levels, optimize take higher the that electrical the of

got customers the on map so of of that. with And you've They X charge sharing idea had dynamic power which different power about typically lot something sharing, lot a how ideas to between different of a anyway. different road our involve dispensers. was we do

be the been very period great team going believe where getting has a in that us guess accelerating able to of quickly potential, anyone's to to now how we're doing are when think a the so But to we'd we capability it's mature customers. still work this to that to be job and I so time. short is long-term in on but and position that a And offer in as we of the

helpful Understood. Very color.

directionally. encouraging, additives on were least comments Your quite at

So intriguing scale? medium-term the we've platform potential that a now your guess how what's revenue to always found team. of rate very your of profitability? and just what's additive, initiative about the I be to think technology current does initiative set, or for And team run level

Yes.

that rate which outside doesn't observers, to revenue blocks we've on printing exciting order appreciate sound on Bryan, from the of now a and I million, business progressed So basis the position that things of printing the is the run coupons can necessarily all but customers the would $XX go prospective passing colors. able to test works to that to doing production, on parts that be those technology and those, of actually we're all nature to destructive now validate into tests flying with of testing

groundswell use for large there's to so And to of for good. manufacturing replace we're seeing castings chain real not enthusiasm the those base targeted the customer particularly among which parts very a and which long quality supply is a of additive

lot before a into them customer service. typically put can has to do them weld on of The repairs they

technology time. gives them our much quality and a product a So higher shorter lead

brackets in production just part trying this level validation been from this about from additive for seeing to and about are for we're at that exciting million we're uptick a get around not revenues point, a to milestone able the investing is stage very develop expense this, us to into significant the this a several great the -- customers our getting the business. standpoint off that million tremendous at actually while the move So $X very to to technology a encouraging. black and the flip using is to the of financial to activity red operating years We've from large $X from least and more parts be

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

off a well. high as value that customer. but And it rate small be? think Run today, don't Is addressable potential start additive in rate market revenue, growth the commercialization I you I Brian's would would what that following to to size know, there. $XX it that the guess early market up the, for million on I'll question extremely like do seem addressable of for relatively very with still

Yes.

your So early of numbers very big about that we're have let talking me very Nate, excited customers it, talking in big to all piggyback and really numbers justify the we we really And that commercialization those about. have are on we're don't yet this. comments the are POs but

projections as play give we for point upside with ready around we're view revenue a like. long-term this yet where So the guidance a not the business you but we're to at great optionality, and and or

these create that And how term development additive, capital very Steve investment, patience in dynamics we're a operating, and and gives just in value Nate, both terms that gives just we fast outlook strategies. us the commercial to DC both us the chargers promising the and of navigate navigating shared while areas, of these long

I'm of Okay. bit acquisition. second in automation. value talk my -- took question, going to ask you Vanair own are a your leverage the you going to recent It I'm on willing the you're strategic departure LECO? from brings leverage kind you to think Can How that that can little grow acquisitions your about your a or portfolio? to focused business portfolio multiple? if that purchase own and synergies cost of than grow What to faster the to

talk I'll Nate, about purchase I'll and let multiple. then Gabe the the Sure. handle strategy,

really So excited about this we're acquisition.

products selling the into truck been work have We several industry for years.

our welding-based our One to the existing leading we distribution market We been products to limited. and are, of will our sell that the significantly much competitors think traditional the through reach ability ability has penetrate actually customers and is work that found truck stronger than acquisition industry. in to accelerate this this channels fairly of market our we've

solutions instead gasoline on been environmental benefits have diesel battery to working And use we able and lot be that a powered and provide a with then a engine. both or of customers battery-powered to Vanair operating of

strength see and industry, of to the to bring expand be we to strengths portfolio. that. the going to this future to really think, we that we're bring some They together, of that. product we accelerate able And as part the some So and

I that excited lot a to this So for us see there's transaction. about of reasons be

the Nate, comments just to add on a couple of financials.

So EBIT a double-digit pointed to you we saw low profile. type that

are X-year and a acquisitions, to on to in that drive objectives, of it average these like Our you cycle. corporate we know, type about think as

growth business. this excited trajectory. operating in can what we business model of shaping we're in has the This So been about the do double-digit

So the potential we as kind here. maintaining see of growth that

So about about you high we're you that's when very estate single-digit talking multiple price exclude then And exciting the if real components a for multiples. that purchase us. some think type of the of

this So you have through made within we're transactions, of a of we fits business. also have about percentage had business. automation just type way of reinforce steady core how pretty But within I'll in a acquisitions. larger our growth the our you And very one welding seen excited us acquisitions emphasize comments

So way driving using parts at business look growth. and all to as accelerate growth acquisitions of we a in our

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

out steady? drill guess they seem the It's I we've new confidence and months for on of at I trends in on Were morning. like Joe your Grabowski June wanted July. and little saw saw on choppy? -- further on in settled you what kind a level the X I Were July? final Mig to in your of and this you of the based this guess, Does visibility year the June it they

Joe, in has to just example, the choppy. been relatively general, for -- general point I first environment I'd industry. just

profile saw that's I gives the we're and that cycle what still. you single confidence us to Obviously, low in mid-single-digit mean, June general we assumptions. were looks are balance, seen business fab. components type in a digits in of business. we've like But our line So short in that longer cycle what But automation extend maintaining largely our in July do what on down

us for the are of us. what particularly that's of July the heavy area responds seen side So monitoring seen how in that we announcements areas gives we've industry patterns the that assumptions. in I important we decision that the term are closely, capital But follow confidence ag, to pointed there. the to, maintaining you've long in how June, automotive the mean, on market those there we're of saw making general, some It's an risk pretty progresses, some and

that. side, point, close obviously, will to I interesting on add very Joe, we're staying the automotive an

production from We and has XXXX the out general, in out not that XXXX. hearing pushed are schedules industry,

and So coming progresses seeing bit optimism a or the this of little that pause how gives air in months. us pocket

what in inherently So confidence us assumptions. gives that's maintaining our

a Joe, of little this color bit I'll add Steve. comments. Gabe's to just is

second So of when have in that business but the at that see the as a business as of grabbed we through industries, particular, headlines, down quarter, mining at did the ag quite far production step we the when really in down heavy look not ag in subsectors still the look heavy the and so cuts portion portion, most significant of construction materially. industries, we but

So we be believe the that we're these production also at could their do we've There production already seen some the And customers to industries. potentially through step balance what with levels. from depending down remain could assuming some We're in flat our downside levels decide that. to the all year. there of that heavy going of on recovery be

watching closely. that very we're So

And the in the for lot automation we production not business the their have as then and in they're of mentioned, product pause dates the Gabe start-up launch side OEMs a out as automotive to 'XX, of a saw products pushed They plans. 'XX rethinking going were 'XX.

So to the to have again. of backside made that going very A, critical that to be I to and product business But will pocket the we've to we air projects didn't seen to XX us those that long the assess you for that. some how there's are starting will flow okay, me continue and able really do XX days whether be indication product the do want decisions B. get for answers quickly have And believe the on, OEMs we're next

international. And helpful color. maybe a follow-up very then just on quick That's

You your year? Europe, the macro mentioned additional color segment thoughts pricing will trend kind and on of a in in second maybe maybe in on half challenging of that the the where International

being more So in seen expectations disciplined pricing, Asia. what East types expect you saw second volume we've some just But see in very some to with of pricing Middle from the did I EBIT year, see first to those the an would we I in I trends challenged. in of more managing strength EBIT half profile. half, in our say costs continues profile. point of overall some to in of we same. and improvement mean areas the the improvement of perspective, the in should Europe be

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

You Does you pocket they talked versus positive for that needed about investments? reconsider end? investments recovery we do mean about guess, away changeovers? less expect then to OEMs the I EVs model from if would air equipment a when would Or what to one, ICE back that? look how auto And EV think like

Yes.

So Sure, we're expecting lot the in on to to these get XX projects next a days. of XX answers

time relatively to them the production on for decide that's type played agnostic. So better based need more whether just call, the to vehicle efficient. automakers of we're much something they do that we're to the how we relatively out. to we'll quarterly automation work next that make them, hopefully, earnings by We make so that the will in invest visibility have ICE or an indifferent We're hybrid at a an the make EV,

pretty they release been dates. And been the those to they need to so pushing that here since the back of order start outright. hold canceling we production in quickly expect, haven't haven't programs fully They orders

XX-day say window. So XX- to a that's we why it's

And industries. heavy drive to about then what But then you bit little you what guidance, going investment the guide? are would the could the and to a risk talked auto weakness helpful. That's back assumptions that? just And Great. explain to built just into the

already The just highlighted highlighted of of July, date. entail in business, of factors we've seen. be mining. in are our Steve within and just our mix heavy construction -- activity business that the assumptions the we're of to business. June, seeing we're those what the to But components some progressing risk watchful a Saree, how industries,

second risks more it's on of patterns. through of of have the business the impact that quarter of just those an progression we we're in watchful But current areas that that our demand So the same seen into could we've July. highlight

Capital. from question Loop Dankert next is Chris with the Our of line

and I kind us here? markets maybe seeing to level kind just discussion the here, impressive growth a you trended just geographically through July that's on set the end where just infrastructure round can Maybe of you're guess, and has out growth how that of rate. construction low pretty of teens, up

Yes.

So a as seen you've Chris, generally environment, we noted. choppy have

Some the been perspective, QX. in quarter, give areas were of high last We have into up you just a positive. mid-teens up we're construction infrastructure this quarter. But international markets to teens, down were mid-single digits we

been it's So choppy. very

that's So a after see. pretty and would expect we strong to lot XXXX And what we run a just of of consistency seen we at had haven't throughout choppiness. more

been environment. So a choppy that a a investment we're U.S. infrastructure hopeful more could little choppiness more bit bit to the see in relatively but drive demand, it's continued little more

it. And expectation again, just then kind little there? margin Can bit in in detail volume doesn't the better Got EBIT you're give a you some your back it sound Is half of like expecting it maybe for of it's improvement you related. -- -- international. highlighted the for

there what's cost improvement on Just in is specifically? half? driven? of action it any mix kind Is helping the that back So comments drive

Yes.

Chris, quarter, my the isolated you were adjustments second we have quarter. So to operational had comments, specific in the up picked that that during may some efficiencies,

gives of you in we're XX% our out, range. to those type that pull actually that to So as confidence line us XX%

in our itself onetime that it's that expected there's in highlighting just are XX%, reverse range So see performance should that some costs XX%. we should nature of more and of more that operational

the line [Operator it from like looks our Instructions] next Liptak Walt with Research. comes question And Seaport of

of got ask going from pause? in with your we've has for industrial, But industry, to think It do here, is for have demand May, Like just macro. customers like you them we sounds want gotten paused the on I wanted what of feedback this the slowing. X kind the any on like slowed? some heavy why about said, you that you general ask to

industry, Walt, think Well, in the you the midsize to like broad in the activity. uncertainty the going market general the drive to uncertainties, small, you'd when the fabricators point and level general, is of to

the So choppiness and has orders in inconsistent. that and production PMI of of mix been just inventories, all new the and

just And progression so I in uncertainty industry. the in general some think that drives

consistent in saw that to inherently PMI but hopeful don't we're to QX, of indices and a QX just So trend choppiness the we point production outlook. industrial the

progresses. the how industry more why little in that's So we're a perspective bit our choppy general of

about go, future things Lincoln changing think, those automatically. -- when like do or think you you'll have in things down, trends around, think the ramping down? deal has you your things in just way guys either or in just sort I program I down I something How the and the do that you in know step structure? especially look America, we with North way Okay. start could of automatically, macro that guys like that, cut costs at Great. you don't -- if where And But mean, I those guess, you you past, some think ramping cost what as of is anything addressed the other to the like like

Walt, type as disciplined we're So discretionary in spending. you very looking know, at

Americas. larger sharing, in component profit the being You're the to referring the

So that does move with profitability.

So levers and the -- pulling where is we're our needed. consistent posture

and cost softness what much though, seeing, you're lot maintain is and what in our of our doing efficiency. initiatives on mix reduction So in yet a of demand cost focused to very ability we're margins. are a and enterprise-wide And

exists to At And so continue still the playbook very managing improvements time, levers that in have same is you're our the we'll and And business. costs. in still disciplined seeing play. all we be within

So we're managing X it ways.

initiatives are short all and profit the initiatives all have dynamics cost enterprise-wide You that cost enterprise-wide our initiatives. the but driven improvement by term, then

their fab direction future and reflects region, seeing I'll can, what appreciate we Walt, the will and right, confidence which who of equipment If put particularly Americas portion uncertainty the weakness uncertainty the the we're will is in where the around just to And look spend what interest of we focus add. amount tremendous this that sure, amount of small is I'm automation the tremendous their at in you segment, of and headed. win really policies in the that a Steve. gen portion economy in rates of election are there's around they capital. There's just then willingness and a business, as place.

we're CapEx doing consumables, seeing business. that And not so is OpEx on impact The of the the what too side, side bad. the

it. on perspective give to you that Just

you within prices you mean, then the bit just a final maintain inventory pricing of the we've I little Okay. some seen wonder business? could your part pricing. Great. And me, about does the talk channel one come -- levels a commodities recently. And maybe business. down for part just of can consumables I commodities and around if Great.

done we've picked XX comments what you quarter. So see into may up to date, expect my points this XXX you progressively now what of in to we So have right? pricing third of basis -- pricing

price. to is posture our hold So

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And posture to maintain so we've progressively. actions and protect taken model our those that

Great.

the in luck second half. Good Okay.

from final of our today Steve KeyBanc. the And with Barger line question comes

line international markets always opportunity strategy focus been if there the automation product to automation or exposure has now, is in breadth conversion is in firm the But The sales even until in international concentrated of the given increase delayed up. Americas.

the and a attractive the question is down keen really expanding business Steve. always interest industry The Yes, had comes to And where where how dynamics participate very decided market attractiveness in the evolution us. automation the to to of structure some impacts markets or We've globally. manufacturers the integration to us. of not just on of really robot historical some based an and

a example, most we're which chosen for integration Europe, on the automation and the means in suppliers, margins business, with be price to there. of more just our have in competing there's manufacturers and lot pressure robot So

Inrotech, just high-value with to integrators seen proprietary, our integrator. with very So you've being specialized, focus been and high general very to have a now strategy automation plays as solution very Europe has on a Zeman in that opposed technology

We continue world. to look for around opportunities the

be to what enter We we we'll our markets around continue and to will for attractive execute test think us continue that to strategy. hypothesis

Or AI Is bigger Inrotech, in point kinks? is still just with scale? the To the to super the Yes. working seems $XX is interesting. this platform programming And million on vision-based? a out that a needed sales, technology product it finished this

you're is It Steve. Yes, vision-based. correct,

the its does really looking it's then I and to it attributes major how explain what demonstrations impressive. making a myself of of does to don't decide what because do. It's to it it's it it it great bit just seen it, little that me CAD file own, quite understand One really I've which a on the not don't comparing sees require of and being is at decisions but large ask it the parts

the technology the to them a some bigger to think be our really robust. around and market. work integrate but fairly I access it scale business it's a is to the into platforms, There'll So the is giving platform investment

Harris TAM think translate well? do or And application addressable an as can that that? for market you like technology to How about

the automation I it about TAM general, think current larger business. we mean, for in our than much much, When is

So we're it small a in player how and be know based what look technology, the $XX-plus world and mean, right? the new to many to on points, it. what we I that's seen When about relatively excited at we you really about very take we remains But a about Inrotech can in really share places we're our a customers' different know billion it. it particular, market, pain technology,

floor closing conclude And Gabe, the turn I remarks. call like that to our yours. does back would for is the to question-and-answer Bruno Gabe session.

future Electric. our for much. joining upcoming show forward initiatives for everyone in you in us of thank in new to very showcasing at today continued like would technologies October. progression look your call trade Lincoln strategic the FABTECH We discussing interest to the the and I and the on Thank

all concludes And may now that and gentlemen, ladies Thank call. for joining, and today's you you disconnect.