Greetings, and welcome to the Lincoln Electric 2014 Second Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode and this call is being recorded. It is now my pleasure to introduce your host, Vincent Petrella, Executive Vice President and Chief Financial Officer. Thank you, sir. You may begin.

Thank you, Karen, and good morning to everyone. Welcome to the Lincoln Electric 2014 second quarter conference call. We released our financial results for the quarter yesterday and you can find our release on the Lincoln Electric Web-site at lincolnelectric.com or by contacting our Investor Relations office at 216-383-2534. Joining me on the call today is Chris Mapes, Lincoln's Chairman, President and Chief Executive Officer. Chris will begin the discussion this morning with an overview of the quarter and then I will cover the numbers in more detail as well as our uses of cash. Following our prepared remarks, we will take your questions. As part of our webcast today, we are using a slide presentation, which can be accessed on our Web-site under the Company and Investor Relations tabs. Before we start our discussion, please be reminded that certain statements made during this call and in our discussions may be forward-looking and actual results may differ from our expectations. Actual results may differ materially from such statements due to a variety of factors that could adversely affect the Company's operating results. Risks and uncertainties that may affect our results are provided in our press release and in our SEC filings on Forms 10-K and 10-Q. Additionally, we also discuss financial measures that do not conform to U.S. GAAP and you may find important information on our use of these measures and their reconciliation to U.S. GAAP in the financial tables that we have included in our earnings release. With that, let me turn the call over to Chris Mapes. Chris?

Thank you, Vince, and good morning to everyone joining us on the call today. Moving to Slide 3, we are pleased to report that improving demand, favorable mix, benefits from productivity initiatives and disciplined cost management resulted in a considerable improvement in profit and earnings performance in the second quarter, both on a year-over-year and sequential basis. Second quarter sales were steady at $729 million. Excluding foreign exchange, second quarter sales increased 2%, a marked improvement from our first quarter sales performance which declined 3.5% if excluding foreign exchange. The improvement in sales performance is primarily due to the positive year-over-year organic growth we achieved in our domestic North American and European markets. In North America, we saw both improved consumable and equipment demand, and in Europe equipment demand rose at a double-digit percentage rate. Productivity improvement, operating leverage and improved mix from products and geographies drove a significant improvement in profitability with reported and adjusted operating income up 8%. Margins improved as well with our adjusted operating margin up 120 basis points to a second quarter record of 16%. On a reported basis, EPS increased 10% to $0.96 and increased 11% to $1.01 on an adjusted basis, reflecting not only operational gains but our accelerated share repurchasing activity in the quarter which contributed $0.03 to EPS. Returns on invested capital remain solid at 18.9% and we generated good cash flow from operations, returning $87 million through share repurchases and dividends. This is an 18% increase compared to the prior year from increases in both our dividend payout and share repurchases, and per my comments highlighted in the release, we now expect $250 million of share repurchases in 2014. At this level, 2014 share repurchases would be approximately 50% higher than 2013 levels, reinforcing our confidence in our model and…

Thank you, Chris. Walking through the income statement highlights on Slide 6, our consolidated sales were up slightly compared with the first quarter of 2013. Volume decreased our reported sales by 1.4% and pricing was up 2.3%. Foreign exchange had a negative 1.9% impact on sales, and acquisitions contributed an increase of 1.2%. Our second quarter gross profit margins increased 140 basis points to 34.4% compared with 33% in the comparable prior year period. The improved gross margins were primarily attributable to a better sales mix and operational improvements. Second quarter 2014 gross profit includes a $3.9 million gain from an insurance settlement. SG&A expense for the second quarter was relatively flat, increasing 20 basis points from the prior year or $1.9 million. The increased dollar amounts were primarily related to acquisitions. Operating income for the quarter increased 110 basis points. Adjusted operating income before rationalization charges and charges related to the Venezuelan foreign exchange losses was $116.6 million or 16% of sales, a 120 basis point improvement over the prior year. The effective tax rate for the quarter was 32.7% compared with 31.9% in the prior year. Factors driving the higher effective tax rate in 2014 include greater earnings and higher tax rate jurisdictions and additional provisions for valuation allowances. Diluted earnings per share increased 10.3% for the second quarter compared with the prior year. Excluding special items, our adjusted diluted earnings per share increased 11% in 2014 compared with 2013. Earnings per share include $0.03 per share from the insurance settlement in the second quarter of 2014. Our Venezuelan operations contributed $0.04 per share to EPS in the second quarter of 2014. On a reportable segment basis and excluding special items, North America Welding adjusted EBIT margins increased by 150 basis points in the second quarter on flat…

(Operator Instructions) Our first question for today comes from the line of Walt Liptak from Global Hunter.

Vince, you mentioned that the mix was favorable in North America. I wonder if you can talk about if it's coming from new products or if it's from welding equipment versus consumable.

It's a product mix improvement towards higher margin equipment for the most part in North America, as well as in Europe for that matter.

Okay. And Chris, you mentioned that North America improved during the second quarter and I think you were alluding to on a month-to-month basis, so I wonder if you can talk about the progression during the quarter and what you've seen in July.

I mean certainly excited about the trend-line in the quarter, Walt, especially coming off of what we viewed as a much softer Q1 than we had expected in the business. So we continue to see improvements in some of the various sectors in North America and globally. We certainly saw a continuing trend in the North American business. And as you would expect, second quarter for us is generally one of the stronger orders in the business for us. So, very favorable trends, and again I think favorable trends across a broader group of industry segments as we look at the business, not only in North America but globally.

Okay. Can we get any color on that, especially some of the bigger sectors, automotive, truck, non-res, how are some of the sectors trending?

I think that as I look at it, what I'm excited about is that at the end of the day we've seen a pretty strong movement in automotive and transport in the business for a period of time and that's continuing and that trend really has continued here in North America especially, but we're beginning to see some improvements in a couple of the other spaces. So, heavy fabrication, general fabrication we saw some improvements, we would hope that that would be resident maybe in a slightly improving GDP economy especially here in the U.S. So, I wouldn't say that we have all trending in the right direction, we still see real low weakness in the mining space globally as well as in the shipbuilding space, but we're seeing a couple of those segments that had been relatively flattish starting to trend in a more favorable direction.

Okay. And what about non-res? Some of your competitors and distributors have been talking about non-res getting better.

We see non-res getting a little bit better. Residential construction for us is not a big economic driver. The non-res business has been relatively flattish to a downward trend for a period of time. We're starting to see more work in structural. We also see investment in that space now. If you'll recall, the Burlington Automation business that we purchased last year has some technology that fits into that space and we're starting to see the demand for those products as some of those manufacturers are beginning to ramp up and look at productivity and investment in those particular businesses.

Okay, alright. And then the last one, kind of along the same lines, just if you could comment on July and how that's trended for you versus second quarter or year-over-year?

July has been stable with run rates in the second quarter. So what we see so far is a continuing improvement on a year-over-year basis, but not a significant inflection point by any means.

Okay, got it. Okay, thank you.

Our next question comes from the line of Kathryn Thompson from Thompson Research.

First, obviously you've put together a string of very good quarters in terms of increasing margins, but is there a ceiling to pushing up margins in light of sales improvement, and how should we think about where you think margin should go, and particularly as we progress through this recovery, if you think about not only volume improvement but also mix and how that should be factored into margin improvement?

Kathryn, I would start by saying that it's our view that there isn't any limit on the improvements that we continue to believe we can make in our business. We're working hard at every day stripping cost out, we've had some great success in my opinion rationalizing and repositioning our business in Europe and that's I think a primary reason for the improvements in margins there. We're working at the top line to develop and introduce newer and better products to help push value realization for our customers and Lincoln. So we're working on all fronts to continue to gain leverage in the business and add value and expand margins. So, we are pleased with the progress that we've made over the last year or so in a relatively soft macro environment where we do business, but we think there's still a lot of areas for improvement to continue driving expanding margins.

And just as a follow-up to that question, if you look on a go-forward basis, if you were to put in broad buckets, would it be more of that new product, new and better products adding to margins or more on in terms of additional cost-cutting and rationalization that would add to margin improvement, say over the next two years?

I think ultimately the greater leverage points are on the revenue line. We'll keep chipping away at cost and improving our manufacturing and our operational capabilities on the SG&A side. At the end of the day, I'd put a more disproportionate emphasis on ultimately growing that top line and gaining leverage there. From a longer-term perspective, we have targeting high-teens type of operating profit margin and we think that that's certainly a very realistic intermediate to longer-term target for the Company.

Our next question comes from the line of Schon Williams from BB&T Capital Markets. Schon Williams - BB&T Capital: Could we just talk a little bit about pricing? Obviously the new pricing went through in North America in the quarter. I just want to see, is this kind of the high watermark for the year I guess both for in North American and maybe Europe as well pricing more kind of flattish there? I'm just trying to get a sense of is there any incremental gains in pricing that could be coming in the back half of the year for those two markets?

Schon, I'll respond first. As Chris pointed out I think in the previous comments, our second quarter tends to be one of our high watermark margin quarters during the course of the year. It comes on the heels of our annual pricing adjustments within our industry. It's also a stronger volume quarter traditionally. So I would expect this second quarter to be one of our highest margin quarters during the course of the year. In regards to pricing, generally speaking pricing is largely completed across the board during the first half of the year. That's not always the case. If there are adjustments required because of more highly inflationary conditions in a particular geography or because raws or steel or key inputs are rising, we have in the past looked at pricing adjustments to recover those costs in the latter part of the year, but that's not a common circumstance over the past decade or so. So I would tell you that most of the pricing is in place, barring any kind of macro changes that would require us to act in the last half of the year. Schon Williams - BB&T Capital: Just as a follow-up, what are you seeing in terms of your raw materials, steel and some of the other elements, I mean is that stable, is that increasing?

It's relatively stable. We're seeing some slight increases in our most significant raw input costs during the first half of the year and our expectations are that the rest of the year will be moderate to modest inflationary environment across our portfolio. Schon Williams - BB&T Capital: Okay. And then separately, I'd like to maybe delve into Harris a little bit. The volumes there did weaker than what I expected. You noted I guess it was more kind of on equipment side. Anything unusual that you would, specifically you would highlight there?

Really two issues. I mean the equipment offering was softer for us in the quarter. At our Harris Products business, we actually had a quality issue that we were impacted with at the latter part of the quarter. We were very conservative in our approach to that and actually put some product on hold for a period of time. It did impact our supply position in the quarter. We also had a very challenging quarter on a year-over-year basis just because of metal costs in the consumable side of the business. So, I actually was very pleased with the way the Harris team actually managed the situation there as well as their ability to maintain the operating margins that we had in the business, and still in very favorable our performance to that business in the back half of the year as we move beyond this particular issue, and that issue should have no impact for us in Q3 or Q4 or moving on forward. Schon Williams - BB&T Capital: Alright, that's helpful, guys. Thanks.

Our next question comes from the line of Rob Wertheimer from Vertical Research Partners.

It's Joe O'Dea for Rob. Maybe first on Europe, just with the nice step-up in the margin activity there in 2Q, trying to understand a little bit better the contribution from mix, the stability of that mix going forward to continue to support those margins and if there was anything, any kind of transitions in the quarter that created that kind of demand to shift more towards the favorable mix.

Certainly we were very pleased with the performance of our European operations in the second quarter, and really a business that performed very well for us in the fourth quarter of 2013 as we began to see some of those businesses turn and some of the operational improvements take hold in the business. We were a little shallower in Q1 and then now we've had very strong performance in Q2. A portion of those improvements are really from productivity items that were executed on over the last two or three quarters. You may recall that we did some restructuring of our solid wire business in that particular marketplace with moving some capacity to another location, as well as the consolidation of some machine capabilities from Italy into our operations in Bester. Those were announced and we were executing on those in '13 and now we're seeing the full benefits of those productivity improvements. And certainly those are structural improvements that we would expect to remain within the business. We did launch a new equipment offering at the Essen Show in Europe in the third quarter of last year. That offering has been received very well. We're actually a little challenged today on our ability to keep up with demand for some of those products in the marketplace. So certainly that mix would be from those products coming into the marketplace which are favorable to the overall margins of the portfolio. And probably most importantly when I look at the business is, the breadth of some of the improvements that we saw in Europe. So, many of our business were up on a year-over-year basis. It's just too early for me to have confidence that there's an overall structural shift in that economy. We'd like to see a couple more quarters of improvement before we get much more confident in the broader European economy.

Great, thanks for the details here. And then second question just on China and maybe framing it both in terms of equipment export into China as well as what you're seeing on the consumable side, and then just any shift in kind of broad expectations across markets there from what you saw three months ago?

I wouldn't say we're seeing any broad shifts in the market in China. Our export business into that marketplace continues to be very solid. As we mentioned, our exports in general have been relatively choppy through the first six months of the year which that tends to be project based business, it's not surprising for us, it's not dissimilar from the way we've seen those markets participate here at Lincoln. We continue to work on our China business and our China strategy as we continue to try to evaluate how we can drive higher value-added solutions into those markets and it continues to be a focus area for us.

Okay, thanks a lot.

Our next question comes from the line of Mark Douglass from m Longbow Research.

Going back to Europe on your equipment sales, are these introduced new power supplies or is it a combination of new automation equipment you're pulling in, and the double-digit growth, was that organic, does that include Robolution, just a little more color I guess on European equipment?

Mark, this is organic growth. This is in the equipment portfolio where we've introduced broad new product lines into the marketplace. It's not on the automation side, it does not include the acquisition of Robolution. We think it's a deeper penetration of the market and at least in my view a clear improvement in our share position in Europe.

Yes, it certainly implies a better market share. Good. And then on Asia Pacific, in total how are China and Australia sized relative to the segment and are you seeing a bottoming in the Australia mining? I assume that's dragging you down in Asia Pacific.

Mark, as you can imagine, Australia and China are the largest components of our Asia Pacific business. We are beginning to see we would hope a bottoming in the mining piece in Australia. Although as you're probably well aware, there are a couple of other segments within Australia that are also suffering, the automotive business in Australia is suffering with a couple of large global OEMs recently announcing in the last couple of quarters closure of facilities. Very pleased with the way our management team in Australia has reacted. We're actually investing in Australia in the new technical center for that region to be able to assist our teams in driving solutions to that particular marketplace. Some strength in some energy spaces, especially LNG, in the Australian marketplace. So, I do think mining is kind of bottoming, but again there are a couple of other segments that are a little shallower also.

And then finally, some investors have complained about a suboptimal capital structure within that cash position. You choose the share repurchases here. What other plans do you have to reinvest or return even more to the shareholders? I mean your dividend payout still relatively modest, I think you get to 30% even faster though without breaking a sweat. Could you discuss your plans on your capital deployment?

First I'd say that we're using our balance sheet and our capital allocation in all respects to improve our performance and our return of cash to shareholders. We're investing in all opportunities from a capital investment standpoint to internally improve our returns on invested capital. We're seeking out and acquiring all businesses that we think can improve our product portfolio, our geographical presence. On the return of cash to shareholders issue, yes indeed, we are ramping up our share repurchase activity. You can see that in the last couple of years that we have stepped that up. As far as the dividend is concerned, we've had two sizable double-digit increases over the past two fiscal years. Our annual dividend review process occurs in the late fall of the year and I think our shareholders can count on another very robust healthy dividend increase here in the October to December timeframe. So, we are pulling all levers available to us to improve our returns for all shareholders.

Our next question comes from the line of Liam Burke from Janney Capital Markets.

Chris, how does the acquisition pipeline look for you now and are you seeing valuations get out of hand?

I would tell you I think the pipeline continues to have a multitude of assets for us to evaluate. It's probably not the valuation or the pipeline that I'm concerned about, it's actually continuing to identify those quality assets that are going to be accretive to the portfolio as we execute on the 2020 vision and strategy. So if we can find some more assets like we have in the past 12 to 18 months, like Tennessee Rand, like Burlington Automation, can assure you we'd be very quick to bring them into the portfolio. Valuations, those tend to move between regions and between products and businesses. So I'm probably less concerned about that as an inhibitor and more just really trying to find those valued assets that we can bring into the portfolio that have the people and the technology that are accretive to our overall strategy for the Company.

Okay. And during the prepared comments, Vince mentioned, highlighted some of the countries in Europe that have been doing okay for you. Is the southern part of your European market getting any better or is it stabilizing at all?

That was the one thing about the European business in the quarter that we were probably most happy with, was that when we evaluated the businesses across the portfolio, we saw nearly every entity showing at least a slight improvement over the prior year. So, even some of those portions of the region like the south that had been much more difficult, although coming off of very low baseline, did show improvement over prior year. We just need to see a couple more structural improvements in the demand model there, a couple more quarters before we have more confidence in Europe moving forward. But as we mentioned in the comments, the execution of the productivity improvements in solid wire, the consolidation of our plasma business into our Bester business, those things are completed and we're seeing those benefits in the portfolio today.

Our next question comes from the line of Stanley Elliott from Stifel.

Could you guys break out the mix between consumables and equipment in the quarter and then maybe how that tracked relative to last year?

The mix, Stanley, is roughly 62% to 63% consumables, 37% to 38% equipment. That mix is relatively stable. The equipment mix did tick up ever so slightly on a year-over-year basis but still relatively stable, ex acquisition effect.

Then for the export business that was still a little soft, could you give us an idea maybe what that was on a percentage basis and then is this, if I remember correctly, beginning the back half of the year the export volume should start to face less challenging comparison, is that a fair way to think about that part of the business?

The exports in the second quarter were down still mid-teens. You might recollect in the first quarter, our export business out of the U.S. in dollar terms was down about 32%. So we did narrow that shortfall in the second quarter but we're still down by a double-digit pace year-over-year. The last half of the year will be moderately challenging. That turnabout in export volumes really accelerated in the first quarter of this year. So the comps will be moderately difficult but not easy for sure.

Okay. And then kind of turning back to Asia Pacific with the plan of I guess 18 months ago, two years ago, you did a lot of kind of calling the revenues and making sure of the profitability, but volumes are still kind of flattish and so are margins. Does that mean that did some of the projects that you had hoped to find more profitable, projects got pushed to the right, or is that still kind of an ongoing evaluation?

I'd tell you that it's an ongoing evaluation. We recognize that success for us in that market is an important part of our overall strategy. We continue to evaluate those products and services that we're providing in that market. I'm actually excited about a couple of the things that we've seen there, actually improvements in our equipment market there in China in Asia Pacific, but still some challenging segments, and again we continue to execute on that strategy for that region.

I think the recent wins you're talking about on the emerging markets I think is encouraging when it speaks to the whole value proposition you will bring. Were those more around energy markets or is there any more color you can give specifically on end market, and I apologize if you did say that, I missed it?

Actually those particular wins that we're having are kind of broad-based. So we've had some nice wins in the pipe marketplace globally as well as some nice wins in the energy market. But it is really the benefits that we have of our global solutions and our dedication to industry segments around the world in providing focused technology solutions into the various industries that we're service and we've seen some nice wins there and certainly expect to have some more through the end of the year.

Perfect. Good luck. Congratulations on a nice quarter and best of luck.

Our next question comes from the line of Steve Barger from KeyBanc Capital Markets.

A question I get all the time from investors is, trying to get a little more color around the whole process of going to SICAD 2. Is there any discussion you can give us in terms of what the considerations are, and if that has to happen when that might happen?

I would tell you, Steve, there's still a lot of uncertainty going on in the Venezuelan market. The way that I would approach this question is, just to remind all of our institutions and investors of the historical earnings stream that has come out of Venezuela and where we are today, and so as a reminder we've disclosed in the second quarter that our EPS from Venezuela was $0.04 per share. The comparable earnings from Venezuela was about $0.06 in the prior year's second quarter. Additional reminder is that the first quarter of 2014 we had $0.14 per share come out of Venezuela. We've warned the disclosed I think pretty robustly that that $0.14 was going to come down pretty dramatically. It's my view that the $0.04 is now not material to the operations of the consolidated business. It's also my view that the second half of the year will not be material. That $0.04 per share is not a bad proxy for what we might be making on a quarter by quarter basis. And maybe the final reminder I would give you is that the third quarter of last year, that's third quarter 2013, we had $0.11 per share from Venezuela. And then the fourth quarter of 2013 we had $0.22 per share come out of Venezuela. So that's something to be mindful of when we think about the last half of the year as far as our consolidated results are concerned. We had that hyperinflationary impact in 2013 from Venezuela where the prior year had $0.06 in the second quarter, $0.11 in the third, $0.22 in the fourth and we rolled the calendar this year and had another $0.14, and now it's my view that you're going to see Venezuela be quite a bit less significant to the go forward view of Lincoln Electric's consolidated earnings.

That's good detail. Thank you, Vince.

And just one last comment. So if we go SICAD 2, the $0.04 per share will likely go down to of $0.00 to $0.01 per share, so there's not a big impact on our consolidated earnings going forward.

Would there be a balance sheet impact from a write-down of assets or anything?

Yes and that's disclosed in our 10-Q that will be filed later today, which is basically another charge to our net monetary asset position there.

Got it. And my follow-up on a happier subject, back to the capital allocation question, has LECO ever paid a special dividend and is that something the Board would consider just in terms of being able to work down the cash and then maybe give a little bonus to shareholders because you guys are clearly executing very well?

I can't recollect in the history of Lincoln that we have paid a special dividend. We do evaluate all opportunities to return cash to shareholders. It's more likely that you will see a more rapid ratcheting up of our regular dividend on our annual review process as well as our return of cash to shareholders through the share repurchase program, and that's what we continue to look at presently in the go-forward strategy.

Got it. Thanks very much.

Our next question comes from the line of Joe Mondillo from Sidoti & Company. Joseph Mondillo - Sidoti & Company : Quick question on the export part of the business in North America. Can you tell us what the sequential quarter to quarter growth look like, and also, remind us what the margins of export versus I guess the rest of the North America segment looks like?

Joe, the actual numbers for the second quarter were about 63 million of U.S. dollar exports out of our domestic operation here compared to about $73 million in the prior year. Joseph Mondillo - Sidoti & Company : So how about the first quarter of this year, was it sort of stable or…?

The year-to-date numbers were $143 million last year and $108 million this year. Joseph Mondillo - Sidoti & Company : Okay, perfect. Thank you. And then just wondering if you could just give us sort of an update on the automation part of the business, I know that's a big part of sort of the secular growth within the industry and how you guys are topping organic growth, any updates on sort of how that's been progressing and whether we saw – was there any lumpy large sales that hit in the quarter that helped that product mix out?

I think the nice thing is, that business just continues to grow within Lincoln, and as it continues to grow, some of the lumpiness associated with large projects or completion accounting will begin to continue to be minimized. I'll tell you, I'm very excited about the teams that we brought in, our Global Automation in Automation Solutions Group continues to work on really customer facing technologies so that we can be one face to the customer globally and ensuring that we're driving those solutions to the various markets around the world. We continue to work on integrating back-office solution so that we can ensure that seamless offering is brought there productively. And probably most importantly, it certainly is one of those key areas that we continue to seek out acquisitions for in the space. The Robolution acquisition has been integrated very well and we continue to try to evaluate opportunities for us to expand that offering globally, and I just believe that it's going to be a significant portion of our 2020 vision and strategy as we continue to identify other solutions and assets and people that we can bring into Lincoln Electric as we build out our Automation Solutions Group. Joseph Mondillo - Sidoti & Company : Just a follow-up lastly with that, how integrated is the automation part of the business geographically within all your sort of footprint?

It's integrated in that we have all of those individuals around the world working as one team. There's a group that manages that for us. So they understand the various technologies that we're developing and providing. We share those solutions across our global platform. We have not linked all of those systems together. However, we do have systems that allow them to be able to share the various technologies and solutions so that while we're servicing global OEMs, we want to be able to ensure that we can provide them that automation solution whether they are in Brazil or in Europe or in Asia Pacific. So it's important for us to be able to link those businesses together and provide those solutions on a global basis. Joseph Mondillo - Sidoti & Company : Alright, great, perfect. Thanks a lot.

(Operator Instructions) Our next question is a follow-up from the line of Walter Liptak from Global Hunter.

I want to ask about the double-digit equipment growth in Europe and want to find out about whether that's sustainable or not, was it related to a channel fill or is it good sell-through that we could see in the back half of the year as well?

I'll tell you, Walt, it wasn't any channel fill. So we did a broad update of our equipment offering for the European marketplace that we brought out in the Essen Show that I mentioned really in the third quarter of '13. That offering has been received very well. So I certainly have expectations that we will continue to see improvements in the demands for those products as we continue to move through the rest of '14. So, I didn't see anything unusual relative to the offering. Again, I just think this is quite frankly Lincoln Electric making improvements in that market, probably taking some share in that market as our improved equipment offering is being received very well by the marketplace.

Okay, sounds good. And with the 3% organic growth in the quarter and double-digit in equipment, would that imply a decline I guess in the consumable part of the business, I wonder if you can just give us some view on what's happening in Europe with consumables?

I don't really see the consumable market as declining when I look at that on a year-over-year basis. I expect that, although I don't have that data in front of me, Walt, I expect that some of that may have to do with our consolidation, so that solid wire strategy that I mentioned earlier. We still see our consumable business as performing very well in there, and as I mentioned, when we looked across the broad portfolio in Europe which would include our consumables offering, most of our businesses showed at least a slight increase on a year-over-year basis. So again, very confident and I think that our consumables business is performing well for us in Europe.

Thank you. And that concludes our question-and-answer session for today. I would like to turn the conference back to Vincent Petrella for closing comments.

Thanks, Karen. And just to provide additional update on Venezuela in response to Steve's question about our balance sheet position, at the end of June we have a net monetary asset position in Venezuela of about $24 million. That includes about $16 million of cash and cash equivalents. If we were to move from the SICAD 1 rate to the SICAD 2 rate, the bulk of the $24 million would have to be written down. We have further disclosures in our Q that will come out today that suggests that that charge could be around $19 million to SG&A with additional $6 million that would flow through cost of goods sold based on current inventory levels and use of the SICAD 1 exchange rate. So hopefully that provides you, Steve and our shoulders, with additional information on Venezuela. And with that, I would like to wrap-up the call for today, and thank you all for joining us and expressing your continued interest in Lincoln Electric. We very much look forward to reporting our progress on improving our business and returning cash to shareholders at our October call at the end of that month. Thank you very much.

Thank you. This concludes today's teleconference. You may disconnect your lines at the time and thank you for your participation.