Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission File Number: 0-1402
LINCOLN ELECTRIC HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Ohio
34-1860551
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
22801 St. Clair Avenue, Cleveland, Ohio
44117
(Address of principal executive offices)
(Zip Code)
(216) 481-8100
(Registrant’s telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of exchange on which registered
Common Shares, without par value
LECO
The NASDAQ Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “small reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No
The number of shares outstanding of the registrant’s common shares as of March 31, 2022 was 58,097,417.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
3
Item 1. Financial Statements
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
4
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
5
CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)
6
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
7
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
20
Item 3. Quantitative and Qualitative Disclosures About Market Risk
29
Item 4. Controls and Procedures
PART II. OTHER INFORMATION
30
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
31
Item 4. Mine Safety Disclosures
Item 6. Exhibits
32
Signatures
33
EX-10.1
Form of Stock Option Agreement for Executive Officers (filed herewith).
EX-10.2
Form of Restricted Stock Unit Agreement for Executive Officers (filed herewith).
EX-10.3
Form of Performance Share Award Agreement for Executive Officers (filed herewith).
EX-31.1
Certification of the Chairman, President and Chief Executive Officer (Principal Executive Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
EX-31.2
Certification of the Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.
EX-32.1
Certification of the Chairman, President and Chief Executive Officer (Principal Executive Officer) and Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
EX-101
Instance Document
Schema Document
Calculation Linkbase Document
Label Linkbase Document
Presentation Linkbase Document
Definition Linkbase Document
2
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended March 31,
2022
2021
Net sales (Note 2)
$
925,448
757,021
Cost of goods sold
595,671
503,254
Gross profit
329,777
253,767
Selling, general & administrative expenses
166,686
145,676
Rationalization and asset impairment charges (Note 6)
1,885
4,163
Operating income
161,206
103,928
Interest expense, net
6,198
5,359
Other income (expense) (Note 14)
4,634
(1,416)
Income before income taxes
159,642
97,153
Income taxes (Note 15)
33,611
23,020
Net income including non-controlling interests
126,031
74,133
Non-controlling interests in subsidiaries’ income (loss)
1
(44)
Net income
126,030
74,177
Basic earnings per share (Note 3)
2.15
1.24
Diluted earnings per share (Note 3)
2.13
1.23
Cash dividends declared per share
0.56
0.51
See notes to these consolidated financial statements.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on derivatives designated and qualifying as cash flow hedges, net of tax of $2,051 and $2,309 in the three months ended March 31, 2022 and 2021
5,355
7,290
Defined benefit pension plan activity, net of tax of $14 and $815 in the three months ended March 31, 2022 and 2021
107
5,060
Currency translation adjustment
(7,449)
(22,743)
Other comprehensive loss:
(1,987)
(10,393)
Comprehensive income
124,044
63,740
Comprehensive income (loss) attributable to non-controlling interests
135
(203)
Comprehensive income attributable to shareholders
123,909
63,943
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 2022
December 31, 2021
(NOTE 1)
ASSETS
Current Assets
Cash and cash equivalents
154,373
192,958
Accounts receivable (less allowance for doubtful accounts of $10,665 in 2022; $11,105 in 2021)
516,231
429,074
Inventories (Note 9)
599,781
539,919
Other current assets
157,448
127,642
Total Current Assets
1,427,833
1,289,593
Property, plant and equipment (less accumulated depreciation of $877,707 in 2022; $868,036 in 2021)
511,873
511,744
Goodwill
437,141
430,162
Other assets
359,497
360,808
TOTAL ASSETS
2,736,344
2,592,307
LIABILITIES AND EQUITY
Current Liabilities
Short-term debt (Note 12)
150,560
52,730
Trade accounts payable
369,415
330,230
Accrued employee compensation and benefits
109,797
108,562
Other current liabilities
297,880
264,383
Total Current Liabilities
927,652
755,905
Long-term debt, less current portion (Note 12)
715,032
717,089
Other liabilities
230,600
255,404
Total Liabilities
1,873,284
1,728,398
Shareholders' Equity
Common Shares
9,858
Additional paid-in capital
462,217
451,268
Retained earnings
3,063,721
2,970,303
Accumulated other comprehensive loss
(259,507)
(257,386)
Treasury Shares
(2,413,171)
(2,309,941)
Total Shareholders' Equity
863,118
864,102
Non-controlling interests
(58)
(193)
Total Equity
863,060
863,909
TOTAL LIABILITIES AND TOTAL EQUITY
CONSOLIDATED STATEMENTS OF EQUITY
Accumulated
Common
Additional
Other
Non-
Shares
Paid-In
Retained
Comprehensive
Treasury
Controlling
Outstanding
Capital
Earnings
Income (Loss)
Interests
Total
Balance at December 31, 2021
58,787
Unrecognized amounts from defined benefit pension plans, net of tax
Unrealized gain on derivatives designated and qualifying as cash flow hedges, net of tax
(7,583)
134
Cash dividends declared - $0.56 per share
(32,505)
Stock-based compensation activity
116
10,834
1,349
12,183
Purchase of shares for treasury
(805)
(104,579)
115
(107)
Balance at March 31, 2022
58,098
Balance at December 31, 2020
59,641
409,958
2,821,359
(302,190)
(2,149,714)
979
790,250
Unrealized loss on derivatives designated and qualifying as cash flow hedges, net of tax
(22,584)
(159)
Cash dividends declared – $0.51 per share
(30,572)
7,680
1,502
9,182
(237)
(28,459)
891
(741)
(883)
(733)
Balance at March 31, 2021
59,538
418,529
2,864,223
(312,424)
(2,176,671)
803,408
CONSOLIDATED STATEMENTS OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES
Non-controlling interests in subsidiaries' income (loss)
Adjustments to reconcile Net income including non-controlling interests to Net cash provided by operating activities:
Rationalization and asset impairment net charges (Note 6)
1,188
60
Depreciation and amortization
19,891
19,118
Equity earnings in affiliates, net
(113)
(177)
Deferred income taxes
(18,207)
(16,115)
Stock-based compensation
11,148
6,402
Other, net
(162)
9,016
Changes in operating assets and liabilities, net of effects from acquisitions:
Increase in accounts receivable
(86,120)
(65,795)
Increase in inventories
(55,407)
(42,568)
Increase in other current assets
(25,152)
(8,095)
Increase in trade accounts payable
39,284
42,325
Increase in other current liabilities
32,116
30,266
Net change in other assets and liabilities
(1,407)
(3,308)
NET CASH PROVIDED BY OPERATING ACTIVITIES
43,090
45,262
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures
(18,672)
(9,936)
Acquisition of businesses, net of cash acquired
(22,013)
—
Proceeds from sale of property, plant and equipment
569
584
Other investing activities
6,500
NET CASH USED BY INVESTING ACTIVITIES
(40,116)
(2,852)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in borrowings
96,308
1,307
Proceeds from exercise of stock options
1,035
2,780
Purchase of shares for treasury (Note 8)
Cash dividends paid to shareholders
(33,361)
(30,999)
NET CASH USED BY FINANCING ACTIVITIES
(40,597)
(55,371)
Effect of exchange rate changes on Cash and cash equivalents
(962)
(2,192)
DECREASE IN CASH AND CASH EQUIVALENTS
(38,585)
(15,153)
Cash and cash equivalents at beginning of period
257,279
CASH AND CASH EQUIVALENTS AT END OF PERIOD
242,126
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 three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022.
The accompanying Consolidated Balance Sheet at December 31, 2021 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, 2021.
In March 2022, in response to Russia’s invasion of Ukraine, the Company announced it was ceasing operations in Russia and implementing plans to support its Russian employees. Although the Company’s Net sales and Total assets in Russia are less than 1% of consolidated Net sales for the year ended December 31, 2021 and less than 1% of consolidated Total assets as of December 31, 2021, the Russia-Ukraine conflict and sanctions imposed globally may result in economic and supply chain disruptions, the ultimate financial impact of which cannot be reasonably estimated at this time. The Company will continue to monitor the Russia-Ukraine conflict and its potential impacts.
Subsequent Events
Cumulative inflation in Turkey over the preceding three-year period reached 100% during the first quarter of 2022. As a result, the Company changed the functional currency of its Turkish subsidiary to the U.S. dollar as of April 1, 2022.
Management has evaluated and disclosed all material events occurring subsequent to the date of the financial statements up to April 28, 2022, the filing date of this Quarterly Report on Form 10-Q.
New Accounting Pronouncements:
There were no new accounting pronouncements ("Accounting Standard Updates" or "ASUs") issued by the Financial Accounting Standards Board ("FASB") that are applicable to the Company as of January 1, 2022.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 2 — REVENUE RECOGNITION
The following table presents the Company’s Net sales disaggregated by product line:
Consumables
539,162
434,179
Equipment
386,286
322,842
Net sales
Consumable sales consist of electrodes, fluxes, specialty welding consumables and brazing and soldering alloys. Equipment sales consist of arc welding power sources, welding accessories, fabrication, plasma cutters, wire feeding systems, automated joining, assembly and cutting systems, fume extraction equipment, CNC plasma and oxy-fuel cutting systems and regulators and torches used in oxy-fuel welding, cutting and brazing. Consumable and Equipment products are sold within each of the Company’s operating segments.
Within the Equipment 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. Less than 10% of the Company’s Net sales are recognized over time.
At March 31, 2022, the Company recorded $70,096 related to advance customer payments and $33,284 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, 2021, the balances related to advance customer payments and billings in excess of revenue recognized were $72,047 and $40,450, respectively. Substantially all of the Company’s contract liabilities are recognized within twelve months based on contract duration. The Company records an asset for contracts where it has recognized revenue, but has not yet invoiced the customer for goods or services. At March 31, 2022 and December 31, 2021, the Company recorded $43,941 and $25,300, 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:
Numerator:
Denominator (shares in 000's):
Basic weighted average shares outstanding
58,606
59,642
Effect of dilutive securities - Stock options and awards
666
657
Diluted weighted average shares outstanding
59,272
60,299
Basic earnings per share
Diluted earnings per share
9
For the three months ended March 31, 2022 and 2021, common shares subject to equity-based awards of 69,614 and 89,592, respectively, were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive.
NOTE 4 — ACQUISITIONS
During March 2022, the Company acquired Kestra Universal Soldas, Industria e Comercio, Imporacao e Exportacao Ltda. (“Kestra”), a privately held manufacturer headquartered in Atibaia, Sao Paulo State, Brazil. Kestra manufactures and provides specialty welding consumables, wear plates and maintenance and repair services for alloy and wear-resistant products commonly used in mining, steel, agricultural and industrial mill applications.
During July 2021, the Company acquired Overstreet-Hughes Company, Inc. and Shoals Tubular, Inc. (“FTP”). FTP manufactures copper and aluminum headers, distributor assemblies and manifolds in the United States and Mexico for the heating, ventilation, and air conditioning sector (“HVAC”). The acquisition further differentiated The Harris Products Group’s competitive position serving HVAC original equipment manufacturers with a comprehensive portfolio of solutions for the fabrication of HVAC coils and accelerates growth in this market.
During April 2021, the Company acquired Zeman Bauelemente Produktionsgesellschaft m.b.H. (“Zeman"), a division of the Zeman Group. Zeman, based in Vienna, Austria, is a leading designer and manufacturer of robotic assembly and arc welding systems that automate the tacking and welding of steel beams. The acquisition expanded the Company’s international automation capabilities to serve customers in the structural steel and infrastructure sectors.
Pro forma information related to the acquisitions discussed above has not been presented because the impact on the Company’s Consolidated Statements of Income is not material. The preliminary purchase price allocations are expected to be finalized within the allowable measurement period. The acquired companies are included in the Company's consolidated financial statements as of the date of acquisition.
NOTE 5 — SEGMENT INFORMATION
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 oxy-fuel cutting, soldering and brazing businesses as well as its retail business in the United States.
Segment performance is measured and resources are allocated based on a number of factors, the primary measure being the adjusted earnings before interest and income taxes (“Adjusted EBIT”) profit measure. EBIT is defined as Operating income plus Other income (expense). EBIT is 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.
10
The following table presents Adjusted EBIT by segment:
The Harris
Americas
International
Products
Corporate /
Welding
Group
Eliminations
Consolidated
Three Months Ended March 31, 2022
534,055
258,041
133,352
Inter-segment sales
28,156
6,228
3,062
(37,446)
562,211
264,269
136,414
Adjusted EBIT
111,568
37,087
19,598
(4,801)
163,452
Special items charge (gain) (1)
(3,735)
1,347
(2,388)
EBIT
115,303
35,740
165,840
Interest income
376
Interest expense
(6,574)
Three Months Ended March 31, 2021
425,242
223,079
108,700
32,748
4,285
2,147
(39,180)
457,990
227,364
110,847
76,617
18,816
18,697
(1,456)
112,674
Special items charge (gain) (2)
4,440
4,609
1,113
10,162
72,177
14,207
(2,569)
102,512
454
(5,813)
NOTE 6 — RATIONALIZATION AND ASSET IMPAIRMENTS
The Company recorded Rationalization and asset impairment net charges of $1,885 and $4,163 in the three months ended March 31, 2022 and 2021, respectively. The charges are primarily related to employee severance, non-cash asset impairments of long-lived assets and gains or losses on the disposal of assets.
During 2021, the Company initiated rationalization plans within the International Welding segment. The plans include headcount restructuring and the consolidation of manufacturing operations to better align the Company’s cost structure with economic conditions and operating needs. At March 31, 2022, liabilities of $1,770 for International Welding were recognized in Other current liabilities in the Company’s Condensed Consolidated Balance Sheet.
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.
11
The following table summarizes the activity related to rationalization liabilities for the three months ended March 31, 2022:
2,990
Payments and other adjustments
(1,917)
Charged to expense
697
1,770
NOTE 7 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ("AOCI")
The following tables set forth the total changes in accumulated other comprehensive income (loss) ("AOCI") by component, net of taxes:
Unrealized gain
(loss) on derivatives
designated and
Defined benefit
Currency
qualifying as cash
pension plan
translation
flow hedges
activity
adjustment
8,094
(13,231)
(252,249)
Other comprehensive income (loss) before reclassification
5,849
(1,734)
Amounts reclassified from AOCI
(494)
(387)
Net current-period other comprehensive income (loss)
(2,121)
13,449
(13,124)
(259,832)
2,487
(101,770)
(202,907)
7,066
602
(14,916)
224
4,458
4,682
(10,234)
9,777
(96,710)
(225,491)
12
NOTE 8 — COMMON STOCK REPURCHASE PROGRAM
The Company has a share repurchase program for up to 10 million shares of the Company’s common shares. From time to time at management’s discretion, the Company repurchases its common shares in the open market, depending on market conditions, stock price and other factors. During the three months ended March 31, 2022, the Company purchased a total of 0.8 million shares at an average cost per share of $129.97. As of March 31, 2022, 9.5 million common shares remained available for repurchase under these programs. The repurchased common shares remain in treasury and have not been retired.
NOTE 9 — INVENTORIES
Inventories in the Condensed Consolidated Balance Sheets are comprised of the following components:
Raw materials
174,515
143,394
Work-in-process
108,927
97,834
Finished goods
316,339
298,691
At March 31, 2022 and December 31, 2021, approximately 36% of total inventories were valued using the last-in, first-out ("LIFO") method. The excess of current cost over LIFO cost was $121,064 and $114,176 at March 31, 2022 and December 31, 2021, respectively.
NOTE 10 — LEASES
The table below summarizes the right-of-use assets and lease liabilities in the Company’s Condensed Consolidated Balance sheets:
Operating Leases
Balance Sheet Classification
Right-of-use assets
49,372
47,966
Current liabilities
10,397
10,218
Noncurrent liabilities
40,418
38,960
Total lease liabilities
50,815
49,178
Total lease expense, which is included in Cost of goods sold and Selling, general and administrative expenses in the Company’s Consolidated Statements of Income, was $5,198 and $5,051 in the three months ended March 31, 2022 and 2021, respectively. Cash paid for amounts included in the measurement of lease liabilities at March 31, 2022 and 2021, respectively, were $3,187 and $3,389 and are included in Net cash provided by operating activities in the Company’s Consolidated Statements of Cash Flows. Right-of-use assets obtained in exchange for operating lease liabilities during the three months ended March 31, 2022 and 2021 were $2,737 and $0, respectively.
13
The total future minimum lease payments for noncancelable operating leases were as follows:
8,861
2023
10,633
2024
9,140
2025
6,115
2026
4,846
After 2026
17,743
Total lease payments
57,338
Less: Imputed interest
6,523
Operating lease liabilities
As of March 31, 2022, the weighted average remaining lease term is 8.3 years and the weighted average discount rate used to determine the operating lease liability is 3.03%.
NOTE 11 — PRODUCT WARRANTY COSTS
The changes in the carrying amount of product warranty accruals are as follows:
Balance at beginning of year
20,466
21,760
Accruals for warranties
3,049
3,136
Settlements
(3,570)
(3,253)
Foreign currency translation and other adjustments
(78)
(156)
Balance at end of year
19,867
21,487
NOTE 12 — DEBT
Revolving Credit Agreements
On April 23, 2021, the Company amended and restated the agreement governing its line of credit by entering into the Second Amended and Restated Credit Agreement (“Credit Agreement”). The Credit Agreement has a line of credit totaling $500,000, has a term of 5 years with a maturity date of April 23, 2026 and may be increased, subject to certain conditions including the consent of its lenders, by an additional amount up to $150,000. The interest rate on borrowings is based on LIBOR plus a spread based on the Company’s net leverage ratio. The Credit Agreement 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 March 31, 2022, the Company was in compliance with all of its covenants and had $110,000 of outstanding borrowings under the Credit Agreement.
The Company has other lines of credit totaling $108,048. As of March 31, 2022, the Company was in compliance with all of its covenants and had $40,022 outstanding at March 31, 2022.
Senior Unsecured Notes
On April 1, 2015 and October 20, 2016, the Company entered into separate Note Purchase Agreements pursuant to which it issued senior unsecured notes (the "Notes") through a private placement. The 2015 Notes and 2016 Notes each
14
have an aggregate principal amount of $350,000, comprised of four different series ranging from $50,000 to $100,000, with maturity dates ranging from August 20, 2025 through April 1, 2045, and interest rates ranging from 2.75% to 4.02%. Interest on the Notes is paid semi-annually. The Company’s total weighted average effective interest rate and remaining weighted average tenure of the Notes is 3.3% and 12.1 years, respectively. The proceeds of the Notes were used for general corporate purposes. The Notes contain certain affirmative and negative covenants. As of March 31, 2022, the Company was in compliance with all of its debt covenants relating to the Notes.
Shelf Agreements
On November 27, 2018, the Company entered into seven uncommitted master note facilities (the "Shelf Agreements") that allow borrowings up to $700,000 in the aggregate. The Shelf Agreements have a term of 5 years and the average life of borrowings cannot exceed 15 years. The Company is required to comply with covenants similar to those contained in the Notes. As of March 31, 2022, the Company was in compliance with all of its covenants and had no outstanding borrowings under the Shelf Agreements.
Fair Value of Debt
At March 31, 2022 and December 31, 2021, the fair value of long-term debt, including the current portion, was approximately $693,298 and $776,655, respectively, which was determined using available market information and methodologies requiring judgment. The carrying value of this debt at such dates was $715,570 and $717,855, 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 13 — RETIREMENT AND POSTRETIREMENT BENEFIT PLANS
The components of total pension cost were as follows:
U.S. pension
Non-U.S.
plans
pension plans
Service cost
50
305
49
471
Interest cost
66
704
2,981
616
Expected return on plan assets
(1,004)
(4,509)
(972)
Amortization of prior service cost
(1)
Amortization of net loss
44
78
581
435
Settlement charges (gains) (1)
446
Defined benefit plans
(3,575)
82
3,542
1,008
Multi-employer plans
110
244
Defined contribution plans
6,035
625
5,162
845
Total pension cost
2,460
817
8,704
2,097
The defined benefit plan components of Total pension cost, other than service cost, are included in Other income (expense) in the Company’s Consolidated Statements of Income.
15
NOTE 14 — OTHER INCOME (EXPENSE)
The components of Other income (expense) were as follows:
Equity earnings in affiliates
113
176
Other components of net periodic pension (cost) income (1)
3,848
(4,030)
Other income (expense)
673
2,438
Total Other income (expense)
NOTE 15 — INCOME TAXES
The Company recognized $33,611 of tax expense on pretax income of $159,642, resulting in an effective income tax rate of 21.1% for the three months ended March 31, 2022. The effective income tax rate was 23.7% for the three months ended March 31, 2021.
The effective tax rate was lower for the three months ended March 31, 2022, as compared with the same period in 2021, primarily due to favorable discrete tax adjustments in 2022 and geographic mix of earnings.
As of March 31, 2022, the Company had $19,590 of unrecognized tax benefits. If recognized, approximately $16,254 would be reflected as a component of income tax expense.
The Company files income tax returns in the U.S. and various state, local and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local or non-U.S. income tax examinations by tax authorities for years before 2017. The Company is currently subject to U.S., various state and non-U.S. income tax audits.
Unrecognized tax benefits are reviewed on an ongoing basis and are adjusted for changing facts and circumstances, including progress of tax audits and closing of statutes of limitations. Based on information currently available, management believes that additional audit activity could be completed and/or statutes of limitations may close relating to existing unrecognized tax benefits. It is reasonably possible there could be a reduction of $3,873 in previously unrecognized tax benefits by the end of the first quarter 2023.
NOTE 16 — 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 months ended March 31, 2022 and 2021.
The Company is subject to the credit risk of the counterparties to derivative instruments. Counterparties include a number of major banks and financial institutions. None of the concentrations of risk with any individual counterparty was considered significant at March 31, 2022. The Company does not expect any counterparties to fail to meet their obligations.
16
Cash Flow Hedges
The Company has certain foreign currency forward contracts that are qualified and designated as cash flow hedges. The dollar equivalent gross notional amount of these short-term contracts was $58,707 at March 31, 2022 and $72,630 at December 31, 2021.
The Company has interest rate forward starting swap agreements that are qualified and designated as cash flow hedges. The dollar equivalent gross notional amount of the long-term contracts was $100,000 at March 31, 2022 and December 31, 2021 and have a termination date of August 2025.
The Company has commodity contracts with a notional amount of 900,000 pounds and 975,000 pounds at March 31, 2022 and December 31, 2021, respectively, that are qualified and designated as cash flow hedges.
Net Investment Hedges
The Company has cross currency swap agreements that are qualified and designated as net investment hedges. The dollar equivalent gross notional amount of these contracts is $25,000 as of March 31, 2022 and December 31, 2021, respectively.
The Company has foreign currency forward contracts that qualify and are designated as net investment hedges. The dollar equivalent gross notional amount of these short-term contracts was $91,881 at March 31, 2022 and $94,479 at December 31, 2021.
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 $257,585 and $301,685 at March 31, 2022 and December 31, 2021, respectively.
Fair values of derivative instruments in the Company’s Condensed Consolidated Balance Sheets follow:
Current
Derivatives by hedge designation
Assets
Liabilities
Designated as hedging instruments:
Foreign exchange contracts
1,174
387
772
535
Forward starting swap agreements
10,537
6,990
Net investment contracts
2,103
103
2,095
608
Commodity contracts
496
311
Not designated as hedging instruments:
2,830
2,077
4,656
3,445
Total derivatives
6,603
2,464
7,834
3,980
17
The effects of undesignated derivative instruments on the Company’s Consolidated Statements of Income consisted of the following:
Classification of gain (loss)
Not designated as hedges:
1,897
(1,286)
The effects of designated hedges on AOCI and the Company’s Consolidated Statements of Income consisted of the following:
Total gain (loss) recognized in AOCI, net of tax
676
284
7,882
5,232
4,642
2,339
Commodity Contracts
249
239
The Company expects a loss of $925 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.
Gain (loss) recognized in the
Derivative type
Consolidated Statements of Income:
Sales
180
144
(455)
(458)
NOTE 17 - FAIR VALUE
The following table provides a summary of assets and liabilities as of March 31, 2022, measured at fair value on a recurring basis:
Quoted Prices in
Active Markets for
Identical Assets or
Significant Other
Significant
Balance as of
Observable Inputs
Unobservable
Description
(Level 1)
(Level 2)
Inputs (Level 3)
Assets:
4,004
Total assets
17,140
Liabilities:
Deferred compensation
39,862
Total liabilities
42,429
18
The following table provides a summary of assets and liabilities as of December 31, 2021, measured at fair value on a recurring basis:
5,428
14,824
41,612
46,200
The Company’s derivative contracts are valued at fair value using the market approach. The Company measures the fair value of foreign exchange contracts, swap agreements 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, pension surplus assets, 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 March 31, 2022 and December 31, 2021.
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.
19
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 the world’s largest designer and manufacturer of arc welding and cutting products, manufacturing a broad line of arc welding equipment, consumable welding products and other welding and cutting products. Welding products include arc welding power sources, computer numerical control and plasma cutters, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, consumable electrodes, fluxes, welding accessories and specialty welding consumables and fabrication. The Company’s product offering also includes oxy-fuel cutting systems and regulators and torches used in oxy-fuel welding, cutting and brazing. In addition, the Company has a leading global position in the brazing and soldering alloys market.
The Company’s products are sold in both domestic and international markets. In the Americas, products are sold principally through industrial distributors, retailers and directly to users of welding products. Outside of the Americas, the Company has an international sales organization comprised of Company employees and agents who sell products from the Company’s various manufacturing sites to distributors and product users.
Results of Operations
The following table shows the Company’s results of operations:
Favorable (Unfavorable)
2022 vs. 2021
Amount
% of Sales
%
168,427
22.2
(92,417)
(18.4)
35.6
33.5
76,010
30.0
18.0
19.2
(21,010)
(14.4)
Rationalization and asset impairment charges
0.2
0.5
2,278
54.7
17.4
13.7
57,278
55.1
(839)
(15.7)
6,050
427.3
17.3
12.8
62,489
64.3
Income taxes
(10,591)
(46.0)
Effective tax rate
21.1
23.7
2.6
51,898
70.0
Non-controlling interests in subsidiaries' loss
45
102.3
13.6
9.8
51,853
69.9
0.90
73.2
Net Sales:
The following table summarizes the impact of volume, acquisitions, price and foreign currency exchange rates on Net sales on a consolidated basis:
Change in Net Sales due to:
Net Sales
Foreign
Volume
Acquisitions
Price
Exchange
Lincoln Electric Holdings, Inc.
24,122
34,829
143,131
(33,655)
% Change
3.2
4.6
18.9
(4.4)
Net sales increased in the three months ended March 31, 2022 driven by higher demand levels, increased product pricing as a result of higher input costs and the impact of acquisitions, partially offset by unfavorable foreign exchange
Gross Profit:
Gross profit for the three months ended March 31, 2022 increased 30.0% driven by higher volumes, the impact of cost reduction initiatives and pricing actions taken to offset higher input costs. Last-in, first-out (“LIFO”) charges were $6,888 in the three months ended March 31, 2022, as compared with charges of $3,854 in 2021.
Selling, General & Administrative ("SG&A") Expenses:
SG&A expenses increased for the three months ended March 31, 2022 as compared to the same 2021 period, primarily due to higher employee costs.
21
Rationalization and Asset Impairment Charges:
The Company recorded charges of $1,885 ($1,836 after-tax) and $4,163 ($3,831 after-tax) in the three months ended March 31, 2022 and 2021, respectively, primarily related to severance charges and gains or losses on the disposal of assets.
Other Income (Expense):
The increase in Other income (expense) for the three months ended March 31, 2022 as compared to March 31, 2021 was primarily due to the final settlement associated with the termination of a pension plan in the current year and non-cash pension settlement charges resulting from lump sum pension payments in 2021. Refer to Note 13 to the consolidated financial statements for details.
Income Taxes:
The effective tax rate was lower for the three months ended March 31, 2022 as compared to the same period in 2021, primarily due to favorable discrete tax adjustments in 2022 and geographic mix of earnings.
Segment Results
Acquisitions (1)
Price (2)
Exchange (3)
Operating Segments
Americas Welding
22,004
1,745
84,218
846
International Welding
(1,024)
17,632
52,190
(33,836)
The Harris Products Group
3,142
15,452
6,723
(665)
5.2
0.4
19.8
25.6
(0.5)
7.9
23.4
(15.2)
15.7
2.9
14.2
6.2
(0.6)
22.7
22
Adjusted Earnings Before Interest and Income Taxes:
Segment performance is measured and resources are allocated based on a number of factors, the primary measure being the Adjusted EBIT profit measure. EBIT is defined as Operating income plus Other income (expense). EBIT is 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.
Americas Welding:
108,813
(4,592)
(14.0)
Total Sales
104,221
22.8
Adjusted EBIT (4)
34,951
45.6
As a percent of total sales (1)
16.7
3.1
International Welding:
34,962
1,943
45.3
36,905
16.2
Adjusted EBIT (5)
18,271
97.1
As a percent of total sales (2)
14.0
8.3
5.7
The Harris Products Group:
24,652
915
42.6
25,567
23.1
901
4.8
As a percent of total sales (3)
14.4
16.9
(2.5)
Corporate / Eliminations:
1,734
4.4
(3,345)
(229.7)
Consolidated:
As a percent of total sales
3.8
Adjusted EBIT (6)
50,778
45.1
As a percent of sales
17.7
14.9
2.8
23
Non-GAAP Financial Measures
The Company reviews Adjusted operating income, Adjusted net income, Adjusted EBIT, Adjusted effective tax rate, Adjusted diluted earnings per share, Return on invested capital, 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:
Operating income as reported
Special items (pre-tax):
Rationalization and asset impairment charges (1)
Acquisition transaction costs (2)
Adjusted operating income
163,091
109,204
Net income as reported
Special items:
Pension charges and other net gains (3)
(4,273)
4,886
Tax effect of Special items (4)
1,041
(1,561)
Adjusted net income
124,683
82,778
Income taxes as reported
(1,041)
1,561
Effective tax rate as reported
Net special item tax impact
(0.4)
(0.8)
Adjusted effective tax rate
20.7
22.9
Diluted earnings per share as reported
Special items per share
(0.03)
0.14
Adjusted diluted earnings per share
2.10
1.37
24
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
The Company’s cash flow from operations can be cyclical. Operational cash flow is a key driver of liquidity, providing cash and access to capital markets. 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 looks at transactions 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 that requires funding. If additional acquisitions providing appropriate financial benefits become available, additional expenditures may be made.
The following table reflects changes in key cash flow measures:
$ Change
Cash provided by operating activities (1)
(2,172)
Cash used by investing activities (2)
(37,264)
(8,736)
Cash used by financing activities (3)
14,774
95,001
(76,120)
(2,362)
Decrease in Cash and cash equivalents (4)
(23,432)
25
In April 2022, the Company paid a cash dividend of $0.56 per share, or $32,535, to shareholders of record as of March 31, 2022.
Working Capital Ratios
March 31, 2021
Average operating working capital to Net sales (1) (2)
18.6
16.3
Days sales in Inventories (2)
126.6
121.0
104.6
Days sales in Accounts receivable
53.6
50.3
55.6
Average days in Trade accounts payable
63.6
59.8
60.0
Return on Invested Capital
The Company reviews return on invested capital ("ROIC") in assessing and evaluating the Company’s underlying operating performance. ROIC is a non-GAAP financial measure that the Company believes is a meaningful metric to investors in evaluating the Company’s financial performance and may be different than the method used by other companies to calculate ROIC. 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.
26
The following table presents ROIC:
Twelve Months Ended March 31,
328,319
224,730
7,549
43,110
Acquisition transaction costs
810
Pension settlement charges
117,343
13,005
Amortization of step up in value of acquired inventories
5,804
Tax effect of Special items (1)
(44,586)
(10,179)
415,239
271,779
Plus: Interest expense, net of tax of $6,178 and $5,904 in 2022 and 2021, respectively
18,364
17,550
Less: Interest income, net of tax of $376 and $396 in 2022 and 2021, respectively
1,184
Adjusted net income before tax effected interest
432,490
288,145
Invested Capital
Short-term debt
3,607
Long-term debt, less current portion
715,328
Total debt
865,592
718,935
Total equity
Invested capital
1,728,652
1,522,343
Return on invested capital
25.0
New Accounting Pronouncements
Refer to Note 1 to the consolidated financial statements for a discussion of new accounting pronouncements.
Refer to Note 4 to the consolidated financial statements for a discussion of the Company’s recent acquisitions.
27
Debt
Revolving Credit Agreement
On April 1, 2015 and October 20, 2016, the Company entered into separate Note Purchase Agreements pursuant to which it issued senior unsecured notes (the "Notes") through a private placement. The 2015 Notes and 2016 Notes each have an aggregate principal amount of $350,000, comprised of four different series ranging from $50,000 to $100,000, with maturity dates ranging from August 20, 2025 through April 1, 2045, and interest rates ranging from 2.75% and 4.02%. Interest on the Notes is paid semi-annually. The Company’s total weighted average effective interest rate and remaining weighted average tenure of the Notes is 3.3% and 12.1 years, respectively. The proceeds of the Notes were used for general corporate purposes. The Notes contain certain affirmative and negative covenants. As of March 31, 2022, the Company was in compliance with all of its debt covenants relating to the Notes.
Forward-looking Statements
The Company’s expectations and beliefs concerning the future contained in this report are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect management’s current expectations and involve a number of risks and uncertainties. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “guidance” or words of similar meaning. Actual results may differ materially from such statements due to a variety of factors that could adversely affect the Company’s operating results. The factors include, but are not limited to: general economic, financial and market conditions; the effectiveness of operating initiatives; completion of planned divestitures;
28
interest rates; disruptions, uncertainty or volatility in the credit markets that may limit our access to capital; currency exchange rates and devaluations; adverse outcome of pending or potential litigation; actual costs of the Company’s rationalization plans; possible acquisitions, including the Company’s ability to successfully integrate acquisitions; market risks and price fluctuations related to the purchase of commodities and energy; global regulatory complexity; the effects of changes in tax law; tariff rates in the countries where the Company conducts business; and the possible effects of events beyond our control, such as the impact of the Russia-Ukraine conflict, political unrest, acts of terror, natural disasters and pandemics, including the COVID-19 pandemic, on the Company or its customers, suppliers and the economy in general. For additional discussion, see “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
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, 2021. 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, 2021.
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 March 31, 2022.
Changes in Internal Control Over Financial Reporting
There have been no changes in the Company’s internal control over financial reporting during the quarter ended March 31, 2022 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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 March 31, 2022, the Company was a co-defendant in cases alleging asbestos induced illness involving claims by approximately 1,524 plaintiffs, which is a net decrease of 1,185 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 other similar cases that have been resolved as follows: 56,817 of those claims were dismissed, 23 were tried to defense verdicts, 7 were tried to plaintiff verdicts (which were reversed or resolved after appeal), 1 was resolved by agreement for an immaterial amount and 1,010 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, 2021 and the risk factor described below, which could materially affect the Company’s business, financial condition or future results. The disclosure below modifies the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021. The reader should not interpret the disclosure of any risk factor to imply that the risk has not already materialized.
Risks Related to Manufacturing and Operations
Economic and supply disruptions associated with events beyond our control, such as war, acts of terror, political unrest, pandemic, labor disputes, natural disasters could adversely affect our supply chain and distribution channels or result in loss of sales and customers.
Our facilities and operations, and the facilities and operations of our suppliers and customers, could be disrupted by events beyond our control, such as war, political unrest, pandemic, labor disputes, natural disasters, including events caused by climate change. Any such disruption could cause delays in the production and distribution of our products and the loss of sales and customers. Insurance proceeds may not adequately compensate the Company for the losses.
We are currently experiencing supply shortages and inflationary pressures for certain components and raw materials due to the COVID-19 pandemic. We expect these supply chain challenges and cost impacts to continue for the foreseeable future as markets recover. Although we have secured additional supply from existing and alternate suppliers and have taken other mitigating actions to mitigate supply disruptions, we cannot guarantee that we can continue to do so in the future. In this event, our business, results and financial condition could be adversely affected. Maintaining higher inventory levels to service customers may result in excess or obsolete inventory and related charges if demand for these products is lower than our expectations. This may adversely affect financial results.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer purchases of its common shares during the first quarter of 2022 were as follows:
Total Number of
Maximum Number
Repurchased
of Shares that May
as Part of Publicly
Yet be Purchased
Average Price
Announced Plans or
Under the Plans or
Period
Paid Per Share
Programs
Programs (2)
January 1 - 31, 2022
59,295
(1)
135.40
59,087
10,180,761
February 1 - 28, 2022
172,730
127.06
151,177
10,029,584
March 1 - 31, 2022
573,177
130.16
559,172
9,470,412
805,202
129.88
769,436
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 6. EXHIBITS
10.1
10.2
10.3
31.1
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.
32.1
Certification of the Chairman, President 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.
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)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
/s/ Gabriel Bruno
Gabriel Bruno
Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)
April 28, 2022