2014

MSA Announces First Quarter Revenue and Earnings

PITTSBURGH, April 24, 2013 /PRNewswire/ -- MSA (NYSE: MSA) today announced that net sales for the first quarter of 2013 were $283 million compared with $293 million for the first quarter of 2012, a decrease of $10 million, or 3 percent.  Excluding the effect of weakening currencies and the company's second quarter 2012 divestiture of its North American ballistic helmet business, sales increased slightly.  Net income for the first quarter of 2013 was $19 million, or $0.52 per basic share, compared to $24 million, or $0.65 per basic share, during the same period last year. 

"Compared to our record first quarter of 2012, which included a number of large non-recurring fixed gas and flame detection orders, sales were relatively flat with core product sales growing 3 percent," said William M. Lambert, MSA President and CEO.  MSA's five core product groups include industrial head protection, fall protection devices, portable gas detection instruments, fixed gas and flame detection systems, and self-contained breathing apparatus (SCBA).  The combined sales of these core product groups increased to 69 percent of MSA's global business in the first quarter. 

"Although we continue to see economic uncertainty in many regions of the world, this has not diminished our commitment to – or our focus on – executing our corporate strategy," Mr. Lambert said.   "Our results over the past several years clearly demonstrate our strategy to drive demand for core products in emerging and developed markets is working and on target, and I believe it continues to position MSA for greater long-term success." 

First quarter sales in the company's North American segment decreased $1 million, or 1 percent, when compared to the same period of 2012.  Excluding the impact of the ballistic helmet divestiture in the second quarter of 2012, North American segment sales increased $4 million, or 3 percent, when compared to the same period of 2012.  Sales of breathing apparatus and portable gas detection instruments increased $4 million and $1 million, respectively, on higher shipments to the fire service and industrial markets.  These increases were partially offset by declines in gas mask and fixed gas and flame detection product sales.

Sales in MSA's European segment decreased $1 million, or 2 percent, when compared to the first quarter of 2012.  Local currency sales of breathing apparatus and portable gas detection instruments both increased $1 million and were offset by a $3 million decrease in fixed gas and flame detection systems, on lower large order activity to industrial markets. 

Sales in MSA's International segment decreased $7 million, or 9 percent, when compared to the first quarter of 2012.  Excluding an unfavorable currency translation impact of $5 million, International segment local currency sales decreased $2 million from the first quarter of 2012.  Local currency sales of breathing apparatus and portable gas detection instruments both increased $1 million.  These improvements were offset by declines across a broad range of product groups, primarily in regions with significant mining markets. 

North American segment net income for the first quarter of 2013 was $16 million, unchanged from the first quarter of 2012 on an increase in research and development costs, higher selling, general and administrative expenses, offset by improved product margins on a higher level of core sales and a lower effective tax rate.

First quarter net income for MSA's European segment was $4 million, a decrease of $2 million compared to the first quarter of 2012. This decrease was primarily due to a lower level of sales, increased research and development costs, and higher selling, general and administrative expenses. 

International segment net income for the first quarter of 2013 was $7 million, a decrease of $2 million compared to the same quarter last year. The decrease was primarily due to a decrease in sales, higher research and development costs, partially offset by a decline in selling, general and administrative expenses. 

"While the realities of the global economy somewhat temper my optimism, I am encouraged by the fact that we did see improvement in order activity as the first quarter progressed," Mr. Lambert said.  "After a fairly slow January and February, we saw a pick-up in order activity in March.  As we move into the second quarter, our three key areas of focus are the continued development of innovative safety products and instruments, driving demand for our core products and maintaining our efforts to reduce operating costs.  I believe we have meaningful opportunities on each of these fronts, and we will continue to invest in and advance these initiatives in ways that enhance our customers' safety and reward shareholder confidence in MSA," Mr. Lambert concluded.

About MSA

Established in 1914, MSA is the global leader in the development, manufacture and supply of safety products that protect people and facility infrastructures.  Many MSA products integrate a combination of electronics, mechanical systems and advanced materials to protect users against hazardous or life-threatening situations. The company's comprehensive line of products is used by workers around the world in a broad range of industries, including the fire service, the oil, gas and petrochemical industry, construction, mining and utilities, as well as the military.  Principal products include self-contained breathing apparatus, fixed gas and flame detection systems, handheld gas detection instruments, head protection products, fall protection devices and thermal imaging cameras. The company also provides a broad range of consumer and contractor safety products through a joint venture with MCR Safety.  These products are marketed and sold under the Safety Works® brand.  MSA, based north of Pittsburgh in Cranberry Township, Pa., has annual sales of approximately $1.2 billion, manufacturing operations in the United States, Europe, Asia and Latin America, and 42 international locations.  Additional information is available on the company's Web site at www.MSAsafety.com.  Information on Safety Works products can be found at www.SafetyWorks.com.

Cautionary Statement Regarding Forward-Looking Statements:
Except for historical information, certain matters discussed in this press release may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements, including without limitation all projections and anticipated levels of future performance, involve risks, uncertainties and other factors that may cause our actual results to differ materially from those discussed herein. Actual results can be affected by any number of factors, many of which are outside of management's control.  Among the factors that could cause such differences are global economic conditions, spending patterns of government agencies, competitive pressures, product liability claims, the success of new product introductions, currency exchange rate fluctuations, the identification and successful integration of acquisitions and the risks of doing business in foreign countries. These risks, uncertainties and other factors are detailed from time-to-time in our filings with the United States Securities and Exchange Commission ("SEC"). You are strongly urged to review all such filings for a more detailed discussion of such risks and uncertainties.  MSA's SEC filings are readily obtainable at no charge at www.sec.gov, as well as on a number of other commercial websites.

 

Mine Safety Appliances Company
Consolidated Condensed Statement of Income (Unaudited)
(In thousands, except earnings per share)



Three Months Ended

March 31,


2013


2012





Net sales

$   283,239


$   293,485

Other (expense) income, net

(120)


5


283,119


293,490





Cost of products sold

158,457


166,494

Selling, general and administrative

83,587


77,063

Research and development

10,584


9,292

Interest expense

2,660


3,149

Currency exchange losses, net

1,119


2,420


256,407


258,418





Income before income taxes

26,712


35,072

Provision for income taxes

7,317


10,750

Net income

19,395


24,322

Net income attributable to noncontrolling interests

(109)


(400)

Net income attributable to Mine Safety Appliances Company

19,286


23,922





Basic earnings per share

$           .52


$           .65

Diluted earnings per share

$           .51


$           .64

Dividends per common share

$           .28


$           .26





Basic shares outstanding

36,734


36,369

Diluted shares outstanding

37,369


36,878

 

Mine Safety Appliances Company
Consolidated Condensed Balance Sheet (Unaudited)
(In thousands)



March 31,

2013


December 31,
2012

Current assets




Cash and cash equivalents

$         76,793


$         82,718

Trade receivables, net

206,954


191,289

Inventories

135,614


136,300

Other current assets

49,770


53,241

         Total current assets

469,131


463,548





Property, net

146,296


147,465

Prepaid pension cost

44,495


42,818

Goodwill

256,726


258,400

Other noncurrent assets

217,014


199,515

         Total assets

1,133,662


1,111,746





Current liabilities




Notes payable and current portion of long-term debt

$           7,986


$           6,823

Accounts payable

66,311


59,519

Other current liabilities

122,893


122,458

         Total current liabilities

197,190


188,800





Long-term debt

278,333


272,333

Pensions and other employee benefits

149,307


151,536

Deferred tax liabilities

17,094


17,249

Other noncurrent liabilities

11,018


11,124

Shareholders' equity

480,720


470,704

         Total liabilities and shareholders' equity

1,133,662


1,111,746

 

Mine Safety Appliances Company
Consolidated Condensed Statement of Cash Flows (Unaudited)
(In thousands)



Three Months Ended

March  31,


2013


2012





Net income

$        19,395


$      24,322

Depreciation and amortization

7,845


7,986

Change in working capital

(7,853)


(870)

Other operating

(13,331)


1,994

         Cash from operations

6,056


33,432





Capital expenditures

(7,452)


(8,044)

Other investing

47


95

         Cash from investing

(7,405)


(7,949)





Change in debt

7,182


(21,016)

Cash dividends paid

(10,372)


(9,550)

Other financing

(742)


217

         Cash from financing

(3,932)


(30,349)





Exchange rate changes

(644)


1,576





Decrease in cash

(5,925)


(3,290)

 

Mine Safety Appliances Company
Segment Information (Unaudited)
(In thousands)



Three Months Ended

March 31,


2013


2012





         Net sales




         North America

$   136,115


$   137,484

         Europe

70,999


72,466

         International

76,125


83,535

            Total

283,239


293,485





         Net income (loss)




         North America

$     16,155


$     16,257

         Europe

3,629


5,621

         International

6,669


8,265

         Reconciling

(7,167)


(6,221)

            Total

19,286


23,922

 

SOURCE MSA



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