Lincoln Electric Holdings, Inc.

And welcome to the Lincoln Electric 2024 First Quarter Financial Results Conference Call. All lines have been placed on mute, and this call is being recorded. It is my pleasure to introduce your host, Amanda Butler, Vice President of Investor Relations and Communications. Thank you. You may begin.

Thank you, Sarah, and good morning, everyone. Welcome to Lincoln Electric's First Quarter 2024 Conference Call. We released our financial results earlier today, and you can find our release and this call slide presentation at lincolnelectric.com in the investor relations section. Joining me on the call today is Steve Hedlund, President and Chief Executive Officer, and Gabe Bruno, our Chief Financial Officer. Following our prepared remarks, we're happy to take your questions. But before we start our discussion, please note that certain statements made during this call may be forward-looking, and actual results may differ materially from our expectations due to a number of risk factors and uncertainties, which are provided in our press release and in our SEC filings on forms 10-K and 10-Q. In addition, we discuss financial measures that do not conform to U.S. GAAP, and a reconciliation of non-GAAP measures to the most comparable GAAP measure is found in the financial tables in our earnings release, which, again, is available in the investor relations section of our website at lincolnelectric.com. And with that, I'll turn the call over to Steve Hedlund. Steve?

Thank you, Amanda. Good morning, everyone. Turning to slide three, I am pleased to report that we continue to demonstrate solid execution in the quarter. We achieved record gross profit margin performance, a 120 basis point increase in our adjusted operating income margin, and record earnings and cash flows. ROIC remained top quartile, and we doubled returns to shareholders, led by $110 million in share repurchases, all while navigating a challenging portion of the cycle with slower than expected sales start to the year. In this environment, we are staying focused on serving our customers and investing for long-term growth. We are diligently managing costs and working to accelerate productivity gains from our higher standard 2025 strategies operational initiatives. This positions us well to continue to drive profit and earning expansion in 2024, despite softer and market conditions. Turning to slide four, organic sales declined approximately 6% in the quarter. Challenging prior year comparisons in equipment, project timing and automation, along with slow industrial activity in automotive, heavy industries and HVAC, all contributed to choppy organic sales performance through the quarter. Areas of strength continued to be in the Middle East and Turkey on strong project activity. By end sector, energy remained resilient against challenging prior year comparisons, with notable strength in up and midstream oil and gas projects. We are also pleased to see America's welding consumables organic sales steady versus prior year in the general industry sector. This suggests early stages of an underlying recovery in regional industrial production activity and aligns with macroeconomic data, which tends to lead orders by a few months. On the capital equipment side, we are maintaining a strong automation backlog from solid order activity through the quarter and current quoting activity remains elevated as customers continue to seek solutions that deliver higher productivity, consistent quality, and help address the acute shortage of skilled welders. Moving to slide five, as part of our long-term investment for sales and earnings growth, I would like to highlight a few of our recent developments. First, we announced our acquisition of Red Viking, an automation system integrator based in Michigan, specializing in automated material handling solutions such as AGVs. They also add new capabilities to our portfolio, including dynamic testing and a proprietary MES software solution that offers enhanced connectivity between customers' automated production solutions and their ERP systems. The addition of Red Viking brings our global automation sales run rate to over $1 billion, marking a key higher standard strategy milestone a year ahead of schedule. Their addition, along with our extensive range of non-welding automation capabilities, brings our global automation sales mix to approximately 55% welding-related and 45% non-welding. The non-welding portion includes automated cutting, material handling, assembly systems, testing, additive manufacturing, and high-precision machining. I am also proud to announce that we celebrated the sale of our 1,000th Cobot during the first quarter. This is a key milestone since the launch of this solution in mid-2021, and we believe this reaffirms our position as the leading welding cobot provider in the industry. Many of you may have seen our recent announcement outlining the creation of a new Chief Transformation Officer role at the company, which will be led by Michelle Curt. We felt the time was appropriate to dedicate a senior executive to accelerate the impact of a range of enterprise-wide productivity initiatives currently underway that bolster long-term margin and earnings growth. In addition, I am pleased to welcome Susan Edwards to the company, who succeeds Michelle as our new Chief Human Resources Officer and brings extensive HR leadership and expertise to the company. To conclude before passing the call to Gabe, I'm confident in the progress we have made to date. We have a strong team that continues to execute on our strategic initiatives to strengthen our market position, improve margins, and accelerate growth via industry-leading innovations and a full and active M&A pipeline, all of which contribute to attractive long-term value creation for our stakeholders. And now I will pass the call to Gabe Bruno to cover first quarter financials in more detail.