Lincoln Electric Holdings, Inc. (NASDAQ:LECO) Q3 2023 Earnings Call Transcript

Gabe Bruno: Yes. So, Walt, just think about the level of activity we are seeing to be broadly in both the standard equipment and consumable business. We have already commented on automation. Just think about the good pacing into the fourth quarter.

Walter Liptak: Okay. Fair enough. And then international, maybe thinking about that, some of the macro numbers are showing slowing, you had a good quarter this quarter and especially with the profits. But what are you seeing in October from your international sales?

Chris Mapes: Our teams are doing a great job in the international markets managing through certainly a more challenging demand profile than what we have in the Americas and certainly what we have here in the U.S. I wouldn’t say we have seen any significant change relative to the trending in the international side of the business, Walt. Probably another comment to your first question, look, you have followed Lincoln Electric for a really long time. And when you start thinking about those demand profiles that you understand our business pretty well. And when you start seeing three of our large five industrial segments that are moving favorably, especially when you are talking about energy and then seeing general industries turn in the quarter, those are very positive demand catalysts that we see and give us just another reason to give us confidence when we are talking about what we think will drive in the fourth quarter.

Steve Hedlund: Hey Walt, this is Steve. I would say for the international, in particular, we expect to see more of what we saw in the third quarter, some weakness and choppiness in Europe and the other parts of international performing given their exposure to the end markets that Chris talked about growing.

Walter Liptak: Okay. Great. Thanks. And then maybe if I could sneak in the last one. You mentioned that there is still more inflation. I wonder if we can get an idea of what you are thinking about for pricing for next year? Are you still in a situation where you can raise prices for a net inflation, or do you take a break for a while?

Chris Mapes: Well, look, we haven’t made any determinations on that because we will have to look and see really what the inflationary cost pressures are as we are moving into 2024. But we have been able to manage price costs effectively throughout a multitude of cycles here at Lincoln Electric. I can assure you if we have input costs that are material that require us to go to the marketplace and provide pricing in the market, we will do that. I am not concerned about there being some sort of headwind to our ability to effectively do that. we are just probably a little early in being able to understand what some of those larger input costs would be. But let me assure you, we are expecting there to be inflation. And we are driving the organization to talk about identifying productivity programs and Lincoln business systems and initiatives that we can drive across the portfolio to mitigate that inflation.

And this morning, when Steve and I were talking to the organization and sharing with them our results in Q3, that was a focus point and will continue to be as we are trying to determine what our business expectations will be in 2024.

Walter Liptak: Okay. It sounds great. Congratulations again.

Chris Mapes: Thank you.

Operator: [Operator Instructions] Our next question will come from the line of Steve Barger with KeyBanc Capital Markets. Steve, your line is now open.

Chris Mapes: Good morning Steve.

Amanda Butler: You may still be on mute, Steve. Liz, we may have to talk to him after the call. Sorry about that technical challenge that we are having.

Operator: Our next question will come from the line of Robert Jameson with UBS.

Robert Jameson: Hey. Thanks for taking my questions. Just one to start on Fori, is there any seasonality in that business that we should be aware of just with kind of like the increase in acquisition the quarter, is that partially due to Power MIG as well, just kind of wanted to unpack that a little bit.