SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2023

SEGMENT INFORMATION

SEGMENT INFORMATION

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.

The following table presents Adjusted EBIT by segment:

					The Harris
	Americas		International		Products		Corporate /
	Welding		Welding		Group		Eliminations		Consolidated
Three Months Ended September 30, 2023
Net sales	$	665,228	$	242,010	$	125,976	$	—	$	1,033,214
Inter-segment sales		28,875		4,896		2,299		(36,070)		—
Total	$	694,103	$	246,906	$	128,275	$	(36,070)	$	1,033,214
Adjusted EBIT	$	136,476	$	30,239	$	20,405	$	(2,952)	$	184,168
Special items charge (1)		4,056		7,870		—		—		11,926
EBIT	$	132,420	$	22,369	$	20,405	$	(2,952)	$	172,242
Interest income										1,852
Interest expense										(12,661)
Income before income taxes									$	161,433
Three Months Ended September 30, 2022
Net sales	$	585,628	$	216,497	$	133,115	$	—	$	935,240
Inter-segment sales		35,353		9,994		2,642		(47,989)		—
Total	$	620,981	$	226,491	$	135,757	$	(47,989)	$	935,240
Adjusted EBIT	$	118,804	$	25,225	$	14,432	$	(1,685)	$	156,776
Special items charge (gain) (2)		(353)		8,364		—		3,068		11,079
EBIT	$	119,157	$	16,861	$	14,432	$	(4,753)	$	145,697
Interest income										376
Interest expense										(8,586)
Income before income taxes									$	137,487
Nine Months Ended September 30, 2023
Net sales	$	2,000,839	$	747,829	$	384,454	$	—	$	3,133,122
Inter-segment sales		92,043		19,941		8,063		(120,047)		—
Total	$	2,092,882	$	767,770	$	392,517	$	(120,047)	$	3,133,122
Adjusted EBIT	$	408,800	$	93,609	$	58,898	$	(14,538)	$	546,769
Special items charge (1)		9,798		11,426		—		—		21,224
EBIT	$	399,002	$	82,183	$	58,898	$	(14,538)	$	525,545
Interest income										3,520
Interest expense										(39,228)
Income before income taxes									$	489,837
Nine Months Ended September 30, 2022
Net sales	$	1,715,342	$	711,167	$	403,768	$	—	$	2,830,277
Inter-segment sales		92,540		25,749		8,570		(126,859)		—
Total	$	1,807,882	$	736,916	$	412,338	$	(126,859)	$	2,830,277
Adjusted EBIT	$	348,439	$	97,321	$	51,952	$	(10,470)	$	487,242
Special items charge (gain) (3)		(3,627)		9,865		—		3,068		9,306
EBIT	$	352,066	$	87,456	$	51,952	$	(13,538)	$	477,936
Interest income										980
Interest expense										(21,847)
Income before income taxes									$	457,069

(1) In the three and nine months ended September 30, 2023, special items exclude amortization of step up in value of acquired inventories of $3,648 and $9,390 in Americas Welding and $1,204 and $2,862 in International Welding, respectively, and Rationalization and asset impairment net charges of $408 in Americas Welding and $6,666 and $10,210 in International Welding as discussed in Note 6. In the nine months ended September 30, 2023, special items reflect a gain on asset disposal of $1,646 in International Welding.

(2) In the three months ended September 30, 2022, special items exclude an adjustment to the amortization of the step up in value of acquired inventories of $353 in Americas Welding, Rationalization and asset impairment charges of $8,364 in International Welding as discussed in Note 6 and acquisition transaction costs of $3,068 in Corporate/Eliminations related to an acquisition.

(3) In the nine months ended September 30, 2022, special items exclude a favorable adjustment related to the termination of a pension plan of $3,735, the amortization of the step up in value of acquired inventories of $1,106 and Rationalization and asset impairment net gains of $998 in Americas Welding, Rationalization and asset impairment charges of $10,403 in International Welding as discussed in Note 6 and acquisition transaction costs of $3,086 in Corporate/Eliminations related to an acquisition.