Lincoln Electric Holdings, Inc.

Greetings, and welcome to the Lincoln Electric 2025 Fourth 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, Colby, and good morning, everyone. Welcome to Lincoln Electric's fourth quarter 2025 conference call, where we'll be covering our fourth quarter and full year 2025 financial results, as well as our new 2030 targets. 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. And joining me on the call today is Steve Hedlund, Chairman and Chief Executive Officer, as well as Gabe Bruno, our Chief Financial Officer. And 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. And in addition, we discussed financial measures that do not conform to U.S. GAAP. 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 now I will turn the call over to Steve Hedlund. Steve?

Thank you, Amanda. Good morning, everyone. Turning to slide three, I am proud to report record 2025 performance. Despite challenged end markets, our sales increased 6% to a record $4.2 billion from acquisitions and price. We maintained last year's record adjusted operating income margin, increased adjusted EPS to a record $9.87, and generated strong cash flows from operations. This resulted in record cash returns to shareholders. Disciplined cost management and the agility of our supply chain team mitigated unprecedented levels of inflation, finishing the year at our neutral price-cost target. In addition, our savings programs generated an incremental $31 million of permanent savings. These achievements, combined with solid commercial and operational execution, culminated in top quartile ROIC and total shareholder return performance versus our peers. On behalf of the board and leadership team, I would like to thank our global team for delivering these superb results. Their commitment, focus, and agility continue to position the company to outperform in the years to come. Turning to slide four to cover demand trends in the fourth quarter. Organic sales grew 2.5% from price, which was largely offset by weaker volume performance. As discussed on earlier calls, we faced a challenging prior year comparison in our automation portfolio, which magnified volume declines. Excluding automation, organic sales would have increased approximately 8%. The growth reflects price contributions in consumable and equipment, as well as relatively steady volume performance in our welding consumables in Americas and international welding. 2025 was a challenging year for automation due to lower capital spending and project deferrals. Automation sales were $240 million in the quarter, an 11% decline versus a record prior year. And on a full year basis, we achieved $870 million, which is a mid-single digit percent decline. We are encouraged by strong order rates and a solid backlog in our automation business in the fourth quarter. This is expected to drive growth in 2026. Due to seasonality and the timing of revenue recognition, we expect first quarter sales to be steady with prior year levels and then pivot to growth starting in the second quarter. This follows the typical seasonality cadence of a 40-60% split between the first and second half of the year. Looking at end markets in the quarter, three of our five sectors grew with an acceleration in December, notably in America's welding. and excluding automation due to its challenging prior year comparison, all five end markets were flat to up. This momentum, combined with a return to more normalized customer production activity, OEM announcements of higher capital spending plans for 2026, and the manufacturing PMI pivoting to growth in January, are all encouraging signs that we may be in the early stages of an industrial recovery. A few highlights to note are the continued outperformance in energy, which is due to strong project activity in both Americas and Asia Pacific. General industries achieved double-digit growth in Americas, but was impacted by lower HVAC activity in the quarter. We are seeing HVAC demand start to normalize in January. And our non-resi structural steel sector was flat globally, but up mid-teens percent in Americas on strength in both North and South America from a range of projects. The two challenge sectors were automotive and heavy industries, and both were impacted by automation's prior year comparison. Transportation excluding automation grew at a mid to high single digit percent rate, largely from consumable demand for vehicle production. Heavy industries organic sales, excluding automation, was modestly higher year over year as construction and ag sector production activity continued to improve, resulting in solid consumable volume growth. So we are well positioned with strong backlog levels and broadening pockets of growth in Americas and Asia Pacific to drive growth in the year ahead. Now I'll pass the call to Gabe Bruno to cover fourth quarter financials in more detail.