Lincoln Electric Holdings LECO Form 10-Q filing Q2 FY2026

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

LINCOLN ELECTRIC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(In thousands, except per share amounts)

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See notes to these consolidated financial statements.

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LINCOLN ELECTRIC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(In thousands)

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See notes to these consolidated financial statements.

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LINCOLN ELECTRIC HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

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See notes to these consolidated financial statements.

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LINCOLN ELECTRIC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED)

(In thousands, except per share amounts)

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LINCOLN ELECTRIC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED)

(In thousands, except per share amounts)

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LINCOLN ELECTRIC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)

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See notes to these consolidated financial statements.

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands, except per share amounts

NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Lincoln Electric Holdings, Inc. and its wholly-owned and majority-owned subsidiaries for which it has a controlling interest (the “Company”) after elimination of all inter-company accounts, transactions and profits.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these unaudited consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements. However, in the opinion of management, these unaudited consolidated financial statements contain all the adjustments (consisting of normal recurring accruals) considered necessary to present fairly the financial position, results of operations and cash flows for the interim periods. Operating results for the six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026.

The accompanying Condensed Consolidated Balance Sheet at December 31, 2025 has been derived from the audited financial statements at that date, but does not include all of the information and notes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Certain reclassifications have been made to the prior period amounts to conform to the current period presentation, none of which are material.

New Accounting Pronouncements:

This section provides a description of new accounting pronouncements (“Accounting Standards Updates” or “ASUs”) issued by the Financial Accounting Standards Board (“FASB”) that are applicable to the Company.

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

The Company is currently evaluating the impact on its financial statements of the following ASUs:

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Standard Description

ASU No. 2025-09, Derivatives and Hedging, issued November 2025 Updates hedge accounting guidance to better align financial reporting with risk management activities. The amendments are effective for annual periods beginning after December 15, 2026 and interim periods within those annual reporting periods. Early adoption is permitted.

ASU No. 2025-06, Goodwill and Other – Internal-Use Software, issued September 2025 Updates requirements for capitalization of internal-use software costs. The amendments are effective for annual periods beginning after December 15, 2027 and interim periods within those annual reporting periods. Early adoption is permitted.

ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures, issued November 2024 Requires enhanced disclosures of specified information about certain costs and expenses. The amendments are effective for annual periods beginning January 1, 2027, and interim periods beginning January 1, 2028. Early adoption is prohibited.

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NOTE 2 — REVENUE RECOGNITION

The following table presents the Company’s Net sales disaggregated by product line:

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Consumable sales consist of welding, brazing and soldering filler metals. Equipment sales consist of arc welding equipment, laser, plasma and oxyfuel cutting systems, wire feeding systems, fume control equipment, welding accessories, specialty gas regulators, mobile power equipment, wear solutions, software and education solutions. Automation sales consist of a comprehensive portfolio of solutions for joining, cutting, material handling, module assembly, and end of line testing. Consumable and Equipment products are sold within each of the Company’s operating segments. Automation products are sold within the Company’s Americas Welding and International Welding operating segments.

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Within the Automation product line, there are certain customer contracts related to automation products that may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines the standalone selling price based on the prices charged to customers or using expected cost plus margin. Approximately 10% of the Company’s consolidated Net sales are recognized over time.

At June 30, 2026, the Company recorded $41,105 related to advance customer payments and $41,855 related to billings in excess of revenue recognized. These contract liabilities are included in Other current liabilities in the Condensed Consolidated Balance Sheets. At December 31, 2025, the balances related to advance customer payments and billings in excess of revenue recognized were $49,451 and $62,778, respectively. Substantially all of the Company’s contract liabilities are recognized within twelve months based on contract duration. The Company records an asset for contracts where it has recognized revenue, but has not yet invoiced the customer for goods or services.

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

At June 30, 2026 and December 31, 2025, the Company recorded $77,035 and $78,211, respectively, related to these contract assets which are included in Other current assets in the Condensed Consolidated Balance Sheets. Contract asset amounts are expected to be billed within the next twelve months.

NOTE 3 — EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share:

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For the three months ended June 30, 2026 and 2025, common shares subject to equity-based awards of 37,641 and 27,376, respectively, were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive. For the six months ended June 30, 2026 and 2025, common shares subject to equity-based awards of 50,156 and 33,692, respectively, were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive.

NOTE 4 — ACQUISITIONS

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The acquired company discussed below is accounted for as a business combination and is included in the consolidated financial statements as of the date of acquisition. The acquired company is not material to the actual or pro forma Consolidated Statements of Income or Consolidated Statements of Cash Flows; as such, pro forma information related to this acquisition has not been presented.

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On April 1, 2025, the Company acquired a 35% ownership interest in Alloy Steel Australia (Int) Pty Ltd. (“Alloy Steel”), a privately held manufacturer of maintenance and repair solutions headquartered in Perth, Australia. On August 1, 2025, the Company acquired the remaining 65% ownership interest in Alloy Steel. In total, the Company acquired 100% ownership of Alloy Steel for a total purchase price of $131,154, net of cash acquired and certain debt-like items. Alloy Steel supplies proprietary technology, engineering services and digital monitoring to the mining sector.

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The Company recognized acquisition costs of $356 during the six months ended June 30, 2026, and $429 and $1,231 during the three and six months ended June 30, 2025, respectively. Acquisition costs are included in Selling, general & administrative expenses on the Consolidated Statements of Income and are expensed as incurred.

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NOTE 5 — SEGMENT INFORMATION

The Company is a high-performance industrial machinery and technology leader who helps customers manufacture and maintain vital equipment and infrastructure. The Company’s innovative solutions enable higher quality and productivity across a variety of processes including welding, cutting, brazing, machining, process automation, and field repair.

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The Company’s products include arc welding equipment, filler metals (welding, brazing and soldering consumables), cutting systems (laser, plasma and oxyfuel), wire feeding systems, fume control equipment, welding accessories,

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

specialty gas regulators, mobile power equipment, wear solutions, software, and education solutions; as well as a comprehensive portfolio of automated solutions and system integration services for joining, cutting, material handling, module assembly, and end of line testing. Services include additive manufacturing, precision fabrication, wear services, upfitting, and training.

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The Company has aligned its organizational and leadership structure into three operating segments to support growth strategies and enhance the utilization of the Company’s worldwide resources and global sourcing initiatives. The operating segments consist of Americas Welding, International Welding and The Harris Products Group. The Americas Welding segment includes welding operations in North and South America. The International Welding segment includes welding operations in Europe, Africa, Asia and Australia. The Harris Products Group includes the Company’s global cutting, soldering and brazing businesses, specialty gas equipment, as well as its retail business in the United States.

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Segment performance is measured and resources are allocated based on a number of factors, the primary measure being the adjusted earnings before interest and income taxes ("Adjusted EBIT") profit measure. Adjusted EBIT is defined as Operating income plus Other income (expense), adjusted for special items as determined by management such as the impact of rationalization activities, certain asset impairment charges and gains or losses on disposals of assets.

The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer. The CODM uses segment Adjusted EBIT to allocate resources for each segment predominantly in establishing the Company’s long-term strategy and in developing the annual budget. The CODM considers actual performance using Adjusted EBIT when making decisions about allocating capital and resources to the segments.

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

The following tables present Adjusted EBIT by segment and other segment information:

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(1) In the three months ended June 30, 2026, special items within Other segment expenses primarily include Rationalization and asset impairment net charges of $1,012, $2,282, and $187 in Americas Welding, International Welding, and The Harris Products Group, respectively, as discussed in Note 6.

(2) In the three months ended June 30, 2025, special items within Other segment expenses primarily include Rationalization and asset impairment net charges of $905, $1,551, and $86 in Americas Welding, International Welding, and The Harris Products Group, respectively, as discussed in Note 6.

(3) Other segment expenses primarily include:

a. Selling, general & administrative expenses – including bonus and research and development expenses.

b. Rationalization and asset impairment net charges – refer to Note 6 for further discussion.

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

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(1) In the six months ended June 30, 2026, special items within Other segment expenses primarily include Rationalization and asset impairment net charges of $1,585, $4,054, and $5 in Americas Welding, International Welding, and The Harris Products Group, respectively, as discussed in Note 6.

(2) In the six months ended June 30, 2025, special items within Other segment expenses primarily include Rationalization and asset impairment net charges of $3,040, $3,103, and $264 in Americas Welding, International Welding, and The Harris Products Group, respectively, as discussed in Note 6.

(3) Other segment expenses primarily include:

a. Selling, general & administrative expenses – including bonus and research and development expenses.

b. Rationalization and asset impairment net charges – refer to Note 6 for further discussion.

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

The following table presents reconciliations of segment information to the Company’s consolidated totals:

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NOTE 6 — RATIONALIZATION AND ASSET IMPAIRMENTS

The Company has rationalization plans within all three of its reportable segments. The plans impacted headcount and included the consolidation of manufacturing facilities to better align with the cost structure, economic conditions and operating needs of the business.

The following table presents Rationalization and asset impairment net charges by segment:

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At June 30, 2026 and December 31, 2025, rationalization liabilities of $3,533 and $7,085, respectively, were recognized in Other current liabilities in the Company’s Condensed Consolidated Balance Sheet. The Company does not anticipate significant additional charges related to the completion of these plans.

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

The Company believes the rationalization actions will positively impact future results of operations and will not have a material effect on liquidity and sources and uses of capital. The Company continues to evaluate its cost structure and additional rationalization actions may result in charges in future periods.

The following table summarizes the activity related to rationalization liabilities for the six months ended June 30, 2026:

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NOTE 7 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ("AOCI")

The following tables set forth the total changes in AOCI by component, net of taxes:

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

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NOTE 8 — INVENTORIES

Inventories in the Condensed Consolidated Balance Sheets are comprised of the following components:

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At both June 30, 2026 and December 31, 2025, approximately 38% of total inventories were valued using the last-in, first-out ("LIFO") method. The excess of current cost over LIFO cost was $143,613 and $138,589 at June 30, 2026 and December 31, 2025, respectively.

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

NOTE 9 — LEASES

The table below summarizes the right-of-use assets and lease liabilities in the Company’s Condensed Consolidated Balance Sheets:

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The total future minimum lease payments for noncancelable operating leases were as follows:

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As of June 30, 2026 the weighted average remaining lease term is 5.7 years and the weighted average discount rate used to determine the operating lease liability is 3.8%.

Other information related to leases was as follows:

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(1) Amounts are included in Costs of goods sold and Selling, general and administrative expenses in the Company’s Consolidated Statement of Income.

(2) Amounts are included in Net Cash Provided by Operating Activities in the Company’s Consolidated Statement of Cash Flows.

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

NOTE 10 — DEBT

At June 30, 2026 and December 31, 2025, debt consisted of the following:

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(1) Interest rate was 7.97% at December 31, 2025.

(2) Weighted average interest rate on the revolving credit facility was 4.7% as of December 31, 2025. Weighted average interest rate of other lines of credit related to liquidity needs in a hyperinflationary country was 41.6% as of December 31, 2025.

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

Senior Unsecured Notes

As of June 30, 2026, the Company’s total weighted average effective interest rate and remaining weighted average tenure of the senior unsecured notes was 4.16%, including the impact from terminated swap agreements, and 8.2 years, respectively. The senior unsecured notes contain certain affirmative and negative covenants. As of June 30, 2026, the Company was in compliance with all of its debt covenants relating to the senior unsecured notes.

Revolving Credit Agreements

On June 20, 2024, the Company entered into a $1 billion revolving credit facility, which may be increased, subject to certain conditions including the consent of its lenders, by an additional amount up to $300,000. The revolving credit facility matures on June 20, 2029. The revolving credit facility will initially bear interest on outstanding borrowings at a per annum rate equal to secured overnight finance rate (“SOFR”) plus 1.10% and could fluctuate based on the Company’s total net leverage ratio at a spread ranging from SOFR plus 1.10% to SOFR plus 1.60%. The financial covenants consist of a maximum net leverage ratio of 3.5x EBITDA and a minimum interest coverage ratio of 2.5x EBITDA. The revolving credit facility contains customary representations and warranties, as well as customary affirmative, negative and financial covenants for credit facilities of this type (subject to negotiated baskets and exceptions), including limitations on the Company and its subsidiaries with respect to liens, investments, distributions, mergers and acquisitions, dispositions of assets and transactions with affiliates. As of June 30, 2026 the Company was in compliance with all of its covenants and had no outstanding borrowings under the revolving credit facility.

The Company has other lines of credit and debt agreements totaling $47,482. As of June 30, 2026, the Company was in compliance with all of its covenants and had no outstanding debt under short-term lines of credit.

Fair Value of Debt

At June 30, 2026 and December 31, 2025, the fair value of long-term debt, including the current portion, was approximately $1,074,811 and $1,125,338, respectively. The approximate fair value of the Company’s long-term debt, including current maturities, was based on a valuation model using Level 2 observable inputs using available market information and methodologies requiring judgment. The carrying value of this debt at such dates was $1,150,054 and $1,150,232, respectively. Since judgment is required in interpreting market information, the fair value of the debt is not necessarily the amount which could be realized in a current market exchange.

NOTE 11 — INCOME TAXES

The Company recognized $86,335 of tax expense on pre-tax income of $381,236, resulting in an effective income tax rate of 22.6% for the six months ended June 30, 2026. The effective income tax rate was 22.2% for the six months ended June 30, 2025. The effective tax rate was higher for the six months ended June 30, 2026, as compared with the same period in 2025, primarily due to the mix of earnings and timing of discrete tax items.

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NOTE 12 — DERIVATIVES

The Company uses derivative instruments to manage exposures to currency exchange rates, interest rates and commodity prices arising in the normal course of business. Both at inception and on an ongoing basis, the derivative instruments that qualify for hedge accounting are assessed as to their effectiveness, when applicable. Hedge ineffectiveness was immaterial in the three and six months ended June 30, 2026 and 2025.

The Company is subject to the credit risk of the counterparties to derivative instruments. Counterparties include a number of major banks and financial institutions. None of the concentrations of risk with any individual counterparty

LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

was considered significant at June 30, 2026. The Company does not expect any counterparties to fail to meet their obligations.

Cash Flow Hedges

Certain foreign currency forward contracts are qualified and designated as cash flow hedges. The dollar equivalent gross notional amount of these short-term contracts was $75,802 and $88,555 at June 30, 2026 and December 31, 2025, respectively.

Net Investment Hedges

The Company has foreign currency forward contracts and zero-cost collar contracts that qualify and are designated as net investment hedges. The dollar equivalent gross notional amount of the foreign currency forward contracts and zero-cost collar contracts were $307,871 and $337,659 at June 30, 2026 and December 31, 2025, respectively.

Derivatives Not Designated as Hedging Instruments

The Company has certain foreign exchange forward contracts that are not designated as hedges. These derivatives are held as economic hedges of certain balance sheet exposures. The dollar equivalent gross notional amount of these contracts was $577,777 and $370,668 at June 30, 2026 and December 31, 2025, respectively.

Fair values of derivative instruments in the Company’s Condensed Consolidated Balance Sheets consisted of the following:

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The effects of undesignated derivative instruments on the Company’s Consolidated Statements of Income consisted of the following:

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

The effects of designated hedges on AOCI consisted of the following:

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The Company expects a gain of $993 related to existing contracts to be reclassified from AOCI, net of tax, to earnings over the next 12 months as the hedged transactions are realized.

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The effects of designated hedges on the Company’s Consolidated Statements of Income consisted of the following:

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NOTE 13 — FAIR VALUE

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The following table provides a summary of assets and liabilities as of June 30, 2026, measured at fair value on a recurring basis:

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LINCOLN ELECTRIC HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dollars in thousands, except per share amounts

The following table provides a summary of assets and liabilities as of December 31, 2025, measured at fair value on a recurring basis:

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The fair value of the Company’s pension surplus assets are based on quoted market prices in active markets and are included in the Level 1 fair value hierarchy. The pension surplus assets were invested in money market and short-term duration bond funds at both June 30, 2026 and December 31, 2025.

The Company’s derivative contracts are valued at fair value using the market approach. The Company measures the fair value of foreign exchange contracts and net investment contracts using Level 2 inputs based on observable spot and forward rates in active markets.

The deferred compensation liability is the Company’s obligation under its executive deferred compensation plan. The Company measures the fair value of the liability using the market values of the participants’ underlying investment fund elections.

The fair value of Cash and cash equivalents, Accounts receivable, Short-term debt excluding the current portion of Long-term debt and Trade accounts payable approximated book value due to the short-term nature of these instruments at both June 30, 2026 and December 31, 2025.

The Company has various financial instruments, including cash and cash equivalents, short and long-term debt and forward contracts. While these financial instruments are subject to concentrations of credit risk, the Company has minimized this risk by entering into arrangements with a number of major banks and financial institutions and investing in several high-quality instruments. The Company does not expect any counterparties to fail to meet their obligations.

NOTE 14 — SUPPLIER FINANCING PROGRAM

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The Company’s suppliers, at the supplier’s sole discretion, are able to factor receivables due from the Company to a financial institution on terms directly negotiated with the financial institution without affecting the Company’s balance sheet classification of the corresponding payable. The Company pays the financial institution the stated amount of the confirmed invoices from its designated suppliers on the original maturity dates of the invoices. At June 30, 2026 and December 31, 2025, Trade accounts payable included $32,229 and $25,709, respectively, payable to suppliers that have elected to participate in the supplier financing program.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollars in thousands, except per share amounts)

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read together with the Company’s unaudited consolidated financial statements and other financial information included elsewhere in this Quarterly Report on Form 10-Q.

General

The Company is a high-performance industrial machinery and technology leader who helps customers manufacture and maintain vital equipment and infrastructure. The Company’s innovative solutions enable higher quality and productivity across a variety of processes including welding, cutting, brazing, machining, process automation, and field repair.

The Company’s products include arc welding equipment, filler metals (welding, brazing and soldering consumables), cutting systems (laser, plasma and oxyfuel), wire feeding systems, fume control equipment, welding accessories, specialty gas regulators, mobile power equipment, wear solutions, software, and education solutions; as well as a comprehensive portfolio of automated solutions and system integration services for joining, cutting, material handling, module assembly, and end of line testing. Services include additive manufacturing, precision fabrication, wear services, upfitting, and training.

Solutions range in technology and features from basic units used for personal, maintenance and light manufacturing use to highly sophisticated robotic solutions for complex fabrication and production activities.

The Company’s business units are aligned into three operating segments. The operating segments consist of Americas Welding, International Welding and The Harris Products Group. The Americas Welding segment includes welding operations in North and South America. The International Welding segment includes welding operations in Europe, Africa, Asia and Australia. The Harris Products Group includes the Company’s global cutting, soldering and brazing businesses, specialty gas equipment, as well as the retail business which is primarily in the United States.

Results of Operations

The following tables show the Company’s results of operations:

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Net Sales:

The following tables summarize the impact of volume, acquisitions, price and foreign currency exchange rates on Net sales on a consolidated basis:

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Net sales increased for the three and six months ended June 30, 2026 due to an increase in organic sales and a benefit from acquisitions and foreign exchange. The increase in organic sales for the three months ended June 30, 2026 is driven by an increase in pricing, primarily due to higher input costs, as well as higher volumes. The increase in organic sales for the six months ended June 30, 2026 is driven by an increase in pricing, primarily due to higher input costs.

Gross Profit:

Gross profit as a percentage of sales decreased 0.5% and 0.6% for the three and six months ended June 30, 2026, respectively, as compared to the same 2025 periods, driven by unfavorable impacts from product mix and higher input costs. This includes last-in, first-out (“LIFO”) charges of $4,186 and $5,024 for the three and six months ended June 30, 2026 and LIFO charges of $8,523 and $10,284 for the three and six months ended June 30, 2025, respectively, which are primarily due to rising input costs.

Selling, General & Administrative Expenses:

Selling, general & administrative expenses increased in the three and six months ended June 30, 2026 as compared to the same 2025 periods, primarily due to increases in spend related to the Company’s RISE strategic initiatives, acquisitions and the unfavorable impact of foreign currency translation. Selling, general & administrative expenses as a percentage of sales decreased primarily due to higher organic sales.

Operating Income:

Operating income as a percentage of sales was 18.1% for the three months ended June 30, 2026 as compared to 17.6% in the prior year period. Excluding special items, Operating income as a percentage of sales was 18.4% for the three months ended June 30, 2026 as compared with 17.9% in the prior year period. Operating income as a percentage of sales was 17.4% for the six months ended June 30, 2026 as compared to 17.1% in the prior year period. Excluding special items, Operating income as a percentage of sales was 17.6% in the six months ended June 30, 2026 as compared with 17.4% in the prior year period. Refer to explanations above for additional details. Also refer to Non-GAAP Financial Measures for a reconciliation of Adjusted operating income.

Income Taxes:

The effective tax rate was higher for the three and six months ended June 30, 2026 as compared to the same 2025 periods, primarily due to the mix of earnings and timing of discrete tax items.

Segment Results

The following tables present components of Net sales by segment:

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(1) Increase for the three and six months ended June 30, 2026 in Americas Welding is primarily due to improved industrial demand and higher project volumes within the automation product line. Decrease for the three months ended June 30, 2026 in International Welding is primarily due to slowing industrial activity in Europe and the Middle East conflict. Decrease for the six months ended June 30, 2026 in International Welding is primarily due to slowing industrial activity in Europe, the Middle East conflict and lower project volumes within the automation product line. Decrease for the three and six months ended June 30, 2026 in The Harris Products Group is primarily due to a challenging prior year comparison resulting from expanded market presence in retail.

(2) Increase in all segments due to price actions taken in response to higher input costs.

(3) Increase in International Welding due to the acquisition discussed in Note 4 to the consolidated financial statements.

(4) Increase for the three and six months ended June 30, 2026 for all three segments was primarily attributable to the favorable impact of a stronger U.S. dollar.

Segment performance is measured and resources are allocated based on a number of factors, the primary measure being the Adjusted EBIT profit measure. Adjusted EBIT is defined as Operating income plus Other income, adjusted for special items as determined by management such as the impact of rationalization activities, certain asset impairment charges and gains or losses on disposals of assets.

The following tables presents Adjusted EBIT by segment:

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(1) Adjusted EBIT and Adjusted EBIT as a percent of sales increased for the three months ended June 30, 2026 as compared to June 30, 2025 primarily driven by the favorable net impact of organic sales partially offset by rising input costs.

(2) Adjusted EBIT and Adjusted EBIT as a percent of sales decreased for the three months ended June 30, 2026 as compared to June 30, 2025 primarily driven by unfavorable impact of lower volumes and higher input costs, partially offset by the benefit of acquisitions.

(3) Adjusted EBIT and Adjusted EBIT as a percent of sales increased for the three months ended June 30, 2026 as compared to June 30, 2025 primarily driven by operating leverage from higher organic sales.

(4) The three months ended June 30, 2026 and 2025 exclude Rationalization and asset impairment net charges of $1,012 and $905, respectively, as discussed in Note 6 to the consolidated financial statements.

(5) The three months ended June 30, 2026 and 2025 exclude Rationalization and asset impairment net charges of $2,282 and $1,551, respectively, as discussed in Note 6 to the consolidated financial statements.

(6) The three months ended June 30, 2026 and 2025 exclude Rationalization and asset impairment net charges of $187 and $86, respectively, as discussed in Note 6 to the consolidated financial statements.

(7) The three months ended June 30, 2026 and 2025 exclude transaction costs of $15 and $429, respectively, as discussed in Note 4 to the consolidated financial statements.

(8) See non-GAAP Financial Measures for a reconciliation of Net income as reported and Adjusted EBIT.

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(1) Adjusted EBIT and Adjusted EBIT as a percent of sales increased for the six months ended June 30, 2026 as compared to June 30, 2025 driven by a favorable net impact of organic sales, partially offset by rising input costs.

(2) Adjusted EBIT and Adjusted EBIT as a percent of sales decreased for the six months ended June 30, 2026 as compared to June 30, 2025 primarily driven by the unfavorable impact of lower volumes and higher input costs, partially offset by the benefit of acquisitions.

(3) Adjusted EBIT and Adjusted EBIT as a percentage of sales increased for the six months ended June 30, 2026 as compared to June 30, 2025 primarily driven by operating leverage from higher organic sales.

(4) The six months ended June 30, 2026 and 2025 exclude Rationalization and asset impairment net charges of $1,585 and $3,040, respectively, as discussed in Note 6 to the consolidated financial statements.

(5) The six months ended June 30, 2026 and 2025 exclude Rationalization and asset impairment net charges of $4,054 and $3,103, respectively, as discussed in Note 6 to the consolidated financial statements.

(6) The six months ended June 30, 2026 and 2025 exclude Rationalization and asset impairment net charges of $5 and $264, respectively, as discussed in Note 6 to the consolidated financial statements.

(7) The six months ended June 30, 2026 and 2025 exclude transaction costs of $668 and $1,231, respectively, as discussed in Note 4 to the consolidated financial statements.

(8) See non-GAAP Financial Measures for a reconciliation of Net income as reported and Adjusted EBIT.

Non-GAAP Financial Measures

The Company reviews Adjusted operating income, Adjusted net income, Adjusted EBIT, Adjusted effective tax rate, Adjusted diluted earnings per share, Adjusted return on invested capital (“Adjusted ROIC”), Adjusted net operating profit after taxes, Free cash flow, Cash conversion and Organic sales, all non-GAAP financial measures, in assessing and evaluating the Company’s underlying operating performance. These non-GAAP financial measures exclude the impact of special items on the Company’s reported financial results. Non-GAAP financial measures should be read in conjunction with the generally accepted accounting principles in the United States ("GAAP") financial measures, as non-GAAP measures are a supplement to, and not a replacement for, GAAP financial measures.

The following table presents the reconciliations of Operating income as reported to Adjusted operating income, Net income as reported to Adjusted net income and Adjusted EBIT, Effective tax rate as reported to Adjusted effective tax rate and Diluted earnings per share as reported to Adjusted diluted earnings per share:

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(1) Primarily related to restructuring activities as discussed in Note 6 to the consolidated financial statements.

(2) Transaction costs primarily relate to acquisitions and are included in Selling, general & administrative expenses.

(3) Costs relate to acquisitions and are included in Cost of goods sold.

(4) Includes the net tax impact of Special items recorded during the respective periods. The tax effect of Special items impacting pre-tax income was calculated as the pre-tax amount multiplied by the applicable tax rate. The applicable tax rates reflect the taxable jurisdiction and nature of each Special item.

Liquidity and Capital Resources

Overview

The Company’s primary sources of liquidity are operating cash flows and revolving credit facilities. As of June 30, 2026, the Company had $242,443 of cash and cash equivalents on hand and no outstanding borrowings under its $1,047,482 revolving credit facilities.

The Company’s capital allocation priorities include internal investment to support existing operations and organic growth, investment in acquisitions to grow the business and then returning capital to shareholders through dividends and share repurchases.

The Company’s cash flow from operations can be cyclical. In assessing liquidity, the Company reviews working capital measurements to define areas for improvement. Management anticipates the Company will be able to satisfy cash requirements for its ongoing businesses for the foreseeable future primarily with cash generated by operations, existing cash balances, borrowings under its existing credit facilities and raising debt in capital markets.

The Company continues to expand globally and periodically consider acquisitions that would involve significant investments. The Company can fund its global expansion plans with operational cash flow, but a significant acquisition may require access to capital markets, in particular, the long-term debt market, as well as the syndicated bank loan market. The Company’s financing strategy is to fund itself at the lowest after-tax cost of funding. Where possible, the Company utilizes operational cash flows and raises capital in the most efficient market, usually the United States, and then lends funds to the specific subsidiary needing or requiring funding. If additional acquisitions providing appropriate financial benefits become available, additional expenditures may be made.

Cash Flow

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The following table reflects changes in key cash flow measures:

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(1) Cash provided by operating activities increased for the six months ended June 30, 2026, compared with the six months ended June 30, 2025 primarily due to favorable working capital.

As of June 30, 2026, the Company had cash of $242,443, of which $181,012 was held by international subsidiaries.

In July 2026, the Company paid a cash dividend of $0.79 per share, or $43,060, to shareholders of record on June 30, 2026.

The Company currently anticipates capital expenditures of $110,000 to $130,000 in 2026. Anticipated capital expenditures include investments to increase capacity, improve operational effectiveness and for general maintenance. Management critically evaluates all proposed capital expenditures and expects each project to increase efficiency, reduce costs, support sales growth or improve the overall safety and environmental conditions of the Company’s facilities.

Revolving Credit Agreements

On June 20, 2024, the Company entered into a $1 billion revolving credit facility. The revolving credit facility matures on June 20, 2029. Additionally, the Company has other lines of credit with total availability of $47,482. As of June 30, 2026, the Company had total availability of $1,047,482 under its revolving credit facilities. Refer to Note 10 to the consolidated financial statements for further information on our revolving lines of credit.

Working Capital Ratios

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(1) Average operating working capital to net sales is defined as the sum of Accounts receivable, Inventories and contract assets less Trade accounts payable and contract liabilities as of period end divided by annualized rolling three months of Net sales.

Stock Repurchase Program

On February 12, 2020, the Company’s Board authorized a share repurchase program for up to 10 million shares of the Company’s common stock. As of June 30, 2026, there were 4.6 million shares available under the authorization. The Company is not obligated to make any repurchases.

Rationalization and Asset Impairments

Refer to Note 6 to the consolidated financial statements for a discussion of the Company’s rationalization plans. The Company believes the rationalization actions will positively impact future results of operations and will not have a material effect on liquidity and sources and uses of capital.

Acquisitions

Refer to Note 4 to the consolidated financial statements for a discussion of the Company’s recent acquisitions.

Return on Invested Capital

The Company reviews ROIC in assessing and evaluating the Company’s underlying operating performance. As discussed in the Non-GAAP Financial Measures section above, Adjusted ROIC is a non-GAAP financial measure that the Company believes is a meaningful metric to investors in evaluating the Company’s financial performance. The calculation may be different than the method used by other companies to calculate ROIC. Adjusted ROIC is defined as rolling 12 months of Adjusted net income excluding tax-effected interest income and expense divided by invested capital. Invested capital is defined as total debt, which includes Short-term debt and Long-term debt, less current portions, plus Total equity.

The following table presents the reconciliations of ROIC and Adjusted ROIC to net income:

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(1) Includes the net tax impact of Special items recorded during the respective periods. The tax effect of Special items impacting pre-tax income was calculated as the pre-tax amount multiplied by the applicable tax rate. The applicable tax rates reflect the taxable jurisdiction and nature of each Special item.

New Accounting Pronouncements

Refer to Note 1 to the consolidated financial statements for a discussion of new accounting pronouncements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the Company’s exposure to market risk since December 31, 2025. See “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company carried out an evaluation under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Company’s management, including the Chief Executive Officer and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2026.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting that occurred during the quarter ended June 30, 2026 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is subject, from time to time, to a variety of civil and administrative proceedings arising out of its normal operations, including, without limitation, product liability claims, regulatory claims and health, safety and environmental claims. Among such proceedings are the cases described below.

As of June 30, 2026, the Company was a co-defendant in cases alleging asbestos induced illness involving claims by approximately 701 plaintiffs, which is a net decrease of 351 claims from those previously reported. In each instance, the Company is one of a large number of defendants. The asbestos claimants seek compensatory and punitive damages, in most cases for unspecified sums. Since January 1, 1995, the Company has been a co-defendant in asbestos cases that have been resolved as follows: 57,695 of those claims were dismissed, 23 were tried to defense verdicts, 7 were tried to plaintiff verdicts (which were reversed or resolved after appeal), 2 were resolved by agreement for an immaterial amount and 1,026 were decided in favor of the Company following summary judgment motions.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this Quarterly Report on Form 10-Q, the reader should carefully consider the factors discussed in “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer purchases of its common shares during the second quarter of 2026 were as follows:

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(1) The above share repurchases include the surrender of the Company’s common shares in connection with the vesting of restricted awards.

(2) On February 12, 2020, the Company’s Board of Directors authorized a new share repurchase program for up to an additional 10 million shares of the Company’s common stock. Total shares purchased through the share repurchase programs were 5.4 million shares at a total cost of $1,038 million for a weighted average cost of $193.05 per share through June 30, 2026.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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ITEM 5. OTHER INFORMATION

During the quarter ended June 30, 2026, none of the Company’s directors or officers adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Item 408(a) of Regulation S-K.

ITEM 6. EXHIBITS

(a) Exhibits

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10.1* Form of Restricted Stock Unit Agreement for Non-Employee Directors under 2023 Stock Plan for Non-Employee Directors (filed herewith). 31.1 Certification of the Chairman and Chief Executive Officer (Principal Executive Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 (filed herewith). 31.2 Certification of the Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 (filed herewith). 32.1 Certification of the Chairman and Chief Executive Officer (Principal Executive Officer) and Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith). 101.INS Inline XBRL Instance Document 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document (104) Cover page Interactive Data File (formatted as Inline XBRL and contained in the Exhibit 101 attachments) | | Inline XBRL Taxonomy Extension Label Linkbase Document | | * Reflects management contract or other compensatory arrangement required to be filed as an exhibit pursuant to Item 15(b) of this report | |

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​ ​ ​ ​ LINCOLN ELECTRIC HOLDINGS, INC.

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​ ​ /s/ Gabriel Bruno

​ ​ Gabriel Bruno

​ ​ Executive Vice President, Chief Financial Officer and Treasurer

​ ​ (Principal Financial and Accounting Officer)

​ ​ July 30, 2026

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