SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2025

SEGMENT INFORMATION

SEGMENT INFORMATION

NOTE 5 — SEGMENT INFORMATION

The Company’s primary business is the design, development and manufacture of arc welding products, automated joining, assembly and cutting systems, plasma and oxy-fuel cutting equipment. The Company also has a leading global position in brazing and soldering alloys.

The Company’s products include arc welding, brazing and soldering filler metals (consumables), arc welding equipment, plasma and oxyfuel cutting systems, wire feeding systems, fume control equipment, welding accessories, specialty gas regulators, and education solutions; as well as a comprehensive portfolio of automated solutions for joining, cutting, material handling, module assembly, and end of line testing.

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.

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. Segment 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 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.

The following table presents Adjusted EBIT by segment:

					The Harris
	Americas		International		Products		Corporate /
	Welding		Welding		Group		Eliminations		Consolidated
Three Months Ended March 31, 2025
Net sales	$	653,107	$	219,061	$	132,220	$	—	$	1,004,388
Inter-segment sales		30,372		6,832		3,984		(41,188)		—
Total		683,479		225,893		136,204		(41,188)		1,004,388
Cost of goods sold		417,700		163,442		97,974		(40,176)		638,940
Gross profit		265,779		62,451		38,230		(1,012)		365,448
Other segment expenses (3)		143,716		40,851		14,079		1,440		200,086
EBIT		122,063		21,600		24,151		(2,452)		165,362
Special items charge (1)		2,135		1,412		178		802		4,527
Adjusted EBIT	$	124,198	$	23,012	$	24,329	$	(1,650)	$	169,889
Special items charge (1)										(4,527)
Interest income										2,255
Interest expense										(14,382)
Income before income taxes									$	153,235
Total assets	$	2,445,066	$	1,093,775	$	388,804	$	(302,571)	$	3,625,074
Capital expenditures		21,766		3,608		1,575		—		26,949
Depreciation and amortization		16,114		5,378		2,663		(371)		23,784
Three Months Ended March 31, 2024
Net sales	$	624,099	$	235,761	$	121,337	$	—	$	981,197
Inter-segment sales		29,978		8,408		3,093		(41,479)		—
Total		654,077		244,169		124,430		(41,479)		981,197
Cost of goods sold		388,605		175,047		90,730		(41,584)		612,798
Gross profit		265,472		69,122		33,700		105		368,399
Other segment expenses (3)		129,372		44,415		15,358		11,945		201,090
EBIT	$	136,100	$	24,707	$	18,342	$	(11,840)	$	167,309
Special items charge (2)		—		3,069		1,536		1,762		6,367
Adjusted EBIT	$	136,100	$	27,776	$	19,878	$	(10,078)	$	173,676
Special items charge (2)										(6,367)
Interest income										3,221
Interest expense										(12,000)
Income before income taxes									$	158,530
Total assets	$	2,354,812	$	987,321	$	353,485	$	(315,901)	$	3,379,717
Capital expenditures		21,853		3,423		980		—		26,256
Depreciation and amortization		14,086		5,313		2,426		(239)		21,586

(1) In the three months ended March 31, 2025, special items primarily include Rationalization and asset impairment net charges of $2,135, $1,552 and $178 in Americas Welding, International Welding and The Harris Products Group, respectively, as discussed in Note 6 and Acquisition transaction costs of $802 in Corporate/Eliminations.

(2) In the three months ended March 31, 2024, special items include Rationalization and asset impairment net charges of $3,069 and $1,536 in International Welding and The Harris Products Group, respectively, as discussed in Note 6 and Acquisition transaction costs of $1,762 in Corporate/Eliminations.

(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.