PITTSBURGH, Feb. 26 /PRNewswire-FirstCall/ -- MSA (NYSE: MSA) today announced that net sales for the year ended December 31, 2009 were $910.0 million compared with $1,134.3 million in 2008, a decrease of $224.3 million, or 20 percent.  Net income for the year ended December 31, 2009 was $43.3 million, or $1.21 per basic share, a decrease of $27.1 million, or 39 percent, compared with $70.4 million, or $1.98 per basic share, for 2008.  

Net sales for the fourth quarter of 2009 were $236.1 million compared with $288.8 million for the fourth quarter of 2008, a decrease of $52.7 million, or 18 percent.  Net income for the fourth quarter of 2009 was $12.7 million, or 35 cents per basic share, a decrease of $3.8 million, or 23 percent, compared with $16.5 million, or 46 cents per basic share, for the same quarter last year.

"The effects of the global recession clearly affected our sales and net income performance for the fourth quarter and for the full year," said William M. Lambert, MSA President and CEO.  "After record sales in 2008, lower demand in industrial construction markets, as well as from government agencies and the military, led to a 20 percent reduction in sales for the year."  

Sales in the company's North American segment decreased $55.7 million, or 35 percent, in the fourth quarter of 2009.  Self-contained breathing apparatus (SCBA) sales were down $28.6 million in the current quarter.  Fourth quarter of 2008 SCBA sales benefited from $28.0 million in shipments of the company's FireHawk® M7 Responder to the U.S. Air Force.  Excluding shipments on this one-time contract, SCBA sales were flat quarter-to-quarter.  Shipments of Advanced Combat helmets to the U.S. military and CG634 helmets to the Canadian Forces were $10.7 million and $3.5 million lower, respectively, reflecting the completion of certain contracts.  Shipments of head protection and fall protection products were down $2.9 million and $1.8 million, respectively, as the effects of the economic recession reduced demand in construction and industrial markets.  Instrument sales were $4.0 million lower in the current quarter, also due to reduced demand in industrial markets.

Sales in the company's European segment decreased $4.1 million, or 6 percent, in the fourth quarter of 2009.  Local currency sales were down $10.8 million, or 14 percent, primarily due to lower shipments to fire service and core industrial markets in France and Germany.  This decrease was partially offset by a $1.8 million increase in sales of disposable respirators, primarily in France, in response to the H1N1 flu epidemic.  Currency translation effects increased fourth quarter European segment sales, when stated in U.S. dollars, by $6.7 million, primarily due to a stronger euro.

Sales in MSA's International segment were up $7.1 million, or 12 percent, in the fourth quarter of 2009.  Local currency sales decreased $2.3 million, or 3 percent.  Lower local currency sales in Australia, primarily due to the economic recession, were partially offset by higher sales in Latin American and Japan.  Currency translation effects increased fourth quarter International segment sales, when stated in U.S. dollars, by $9.4 million.

Net income in MSA's North American segment decreased $5.6 million, or 37 percent, in the fourth quarter of 2009.  Fourth quarter 2009 net income in the North American segment includes an after-tax gain of $2.1 million on the sale of 25 acres of property in the Cranberry Woods office park.  Excluding this gain, net income decreased by $7.7 million, or 51 percent, in the quarter.  The decrease reflects the negative effect of the previously-discussed decrease in sales, partially offset by the positive effect of reduced operating expenses.

The European segment reported a loss of $0.7 million in the fourth quarter of 2009, compared to income of $1.8 million in the fourth quarter of 2008.  Lower European segment results reflect the previously-discussed decrease in sales and the resulting decrease in gross profits.

Net income in the International segment was $1.6 million higher in the fourth quarter of 2009.  The increase was primarily related to higher sales in Latin America and Japan.  Currency translation effects increased current quarter International segment net income, when stated in U.S. dollars, by approximately $0.2 million.  

For full year 2009, sales decreased $224.3 million.  Sales in North America decreased $161.7 million, or 27 percent.  The sales decline reflected the completion of certain military contracts in late 2008, as well as reduced end-user demand for personal protective equipment, particularly in the construction, oil and gas, and other industrial markets.  Sales of SCBA were down $58.0 million in the current year.  In 2008, SCBA shipments included $54.1 million in sales of the company's FireHawk M7 Responder to the U.S. Air Force.  Excluding these shipments, SCBA sales were $3.9 million lower in the current year.  Sales of Advanced Combat

Helmets to the U.S. military and CG634 helmets to Canadian Forces were down $34.9 million and $13.0 million, respectively, reflecting the completion of certain contracts.  Shipments of head protection and fall protection were down $20.8 million and $8.5 million, respectively, as the effects of the economic recession reduced demand in construction and industrial markets.  Shipments of instruments were $8.3 million lower in the current year, also due to reduced demand in industrial markets.

European segment sales decreased $42.1 million, or 15 percent, during 2009.  Local currency sales were down $19.9 million, or 7 percent, primarily due to lower military shipments of ballistic helmets and vests in France and SCBAs in Germany.  Unfavorable translation effects of weaker European currencies reduced European segment sales for the year, when stated in U.S. dollars, by $22.2 million.

Sales in MSA's International segment were down $20.5 million, or 8 percent, for the year.  Local currency sales were down $6.5 million, or 3 percent, primarily in Australia and Latin America due to the economic recession. Currency translation effects reduced International segment sales, when stated in U.S. dollars by $14.0 million, primarily related to the weakening of the Australian dollar, South African rand, and Brazilian real.  

Net income for the year decreased $27.1 million in 2009.  Net income in the North American segment was down $17.4 million, or 33 percent, primarily related to the negative effect of a 27 percent decrease in sales, partially offset by the positive effect of reduced operating expenses.  North American segment net income for the current year includes a $4.4 million after-tax non-cash charge related to a voluntary retirement incentive program and a $2.1 million after-tax gain on the sale of property in the Cranberry Woods office park.  Excluding these one-time items, North American segment net income was down $15.1 million, or 29 percent, in the current year.  European segment net income decreased $9.7 million, or 99 percent, primarily due to the previously-discussed decrease in sales and gross margins.  International segment net income was down $4.5 million, or 38 percent, primarily related to the decrease in sales.

Mr. Lambert noted that while the company may have seen the worst of the recession, the uncertain strength of the recovery will continue to present challenges for MSA throughout 2010.  "High unemployment levels in North America and elsewhere, as well as growing concerns in European markets, all point to a slow and prolonged recovery in the markets we serve.  Our results for 2009 benefited from the cost reduction measures we took during the year and we will remain diligent in our efforts to manage costs and working capital throughout 2010," he said.

"Looking forward, our challenges remain clear.  We are committed to taking the actions necessary to strengthen gross margins and improve productivity.  This need is particularly evident in Europe.  Earlier this year we began a project to streamline our operating model in Europe.  This multi-year project will reduce operating costs, centralize decision making and generally improve the effectiveness of our European organization.  Overall, 2009 was a year in which we adopted a defensive posture and focused on cost management activities to offset the effects of the recession.   With signs of an economic recovery now beginning to surface, we're shifting that focus to one of investing in those areas that will help us restore growth, build market share and provide a foundation for our long-term success," Mr. Lambert concluded.

About MSA:

Established in 1914, MSA is a global leader in the development, manufacture and supply of sophisticated safety products that protect people's health and safety.  Sophisticated safety products typically integrate any 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 the fire service, homeland security, construction and other industries, as well as the military.  Principal products include self-contained breathing apparatus, gas masks, gas detection instruments, head protection, respirators and thermal imaging cameras. The company also provides a broad range of consumer and contractor safety products through retail channels.  These products are marketed and sold under the MSA Safety Works brand.  MSA has annual sales of approximately $1 billion, manufacturing operations throughout the United States and Europe, and 42 international locations.  Additional information is available on the company's Web site at www.msanet.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 Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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 web sites.

    
    
    
                        Mine Safety Appliances Company 
            Consolidated Condensed Statement of Income (Unaudited)
                   (In thousands, except earnings per share)
    
                                    Three Months Ended    Twelve Months Ended
                                        December 31           December 31
                                    ------------------    --------------------
                                       2009       2008       2009         2008
                                    -------    -------    -------    ---------
    
    Net sales                      $236,098   $288,835   $909,991   $1,134,282
    Other income                      4,179      1,035      5,860        5,165
                                    -------    -------    -------    ---------
                                    240,277    289,870    915,851    1,139,447
                                    -------    -------    -------    ---------
    
    Cost of products sold           150,797    182,911    573,266      701,679
    Selling, general and
     administrative                  60,720     67,650    230,894      270,584
    Research and development          7,376      8,981     28,781       35,020
    Restructuring and other charges   1,477        660     11,378        3,936
    Interest                          1,638      1,841      7,080        8,923
    Currency exchange (gains) losses   (583)     3,804       (888)       6,943
                                    -------    -------    -------    ---------
                                    221,425    265,847    850,511    1,027,085
                                    -------    -------    -------    ---------
    
    Income before income taxes       18,852     24,023     65,340      112,362
    Provision for income taxes        6,249      7,917     22,003       42,036
                                    -------    -------    -------    ---------
    Net income                       12,603     16,106     43,337       70,326
    Net loss (income) attributable
     to noncontrolling interests         59        392        (42)          96
                                    -------    -------    -------    ---------
    Net income attributable to Mine
     Safety Appliances Company       12,662     16,498     43,295       70,422
                                    =======    =======    =======    =========
    
    Basic earnings per share           $.35       $.46      $1.21        $1.98
                                    =======    =======    =======    =========
    Diluted earnings per share         $.35       $.46      $1.21        $1.96
                                    =======    =======    =======    =========
    Dividends per common share         $.24       $.24       $.96         $.94
                                    =======    =======    =======    =========
    
    Basic shares outstanding         35,685     35,620     35,668       35,593
    Diluted shares outstanding       35,932     35,825     35,879       35,949
    
    
    

    
    
                         Mine Safety Appliances Company
               Consolidated Condensed Balance Sheet (Unaudited)
                                (In thousands)
    
    
                                             December 31,    December 31,
                                                 2009            2008
                                             ------------    -----------
    Current assets
      Cash and cash equivalents                   $61,983        $50,894
      Trade receivables, net                      173,355        198,622
      Inventories                                 123,944        159,428
      Other current assets                         74,743         68,831
                                                  -------        -------
         Total current assets                     434,025        477,775
    
    Property, net                                 144,575        141,409
    Prepaid pension cost                          105,812         78,037
    Goodwill                                       84,727         83,211
    Other non-current assets                      106,089         95,378
                                                  -------        -------
         Total                                    875,228        875,810
                                                  =======        =======
    
    Current liabilities
      Notes payable and current portion
       of long-term debt                          $16,326        $60,849
      Accounts payable                             43,487         50,126
      Other current liabilities                   108,637        108,712
                                                  -------        -------
        Total current liabilities                 168,450        219,687
    
    Long-term debt                                 82,114         94,082
    Pensions and other employee benefits          125,387        120,494
    Deferred tax liabilities                       44,800         36,491
    Other non-current liabilities                  15,077          9,931
    Equity                                        439,400        395,125
                                                  -------        -------
        Total                                     875,228        875,810
                                                  =======        =======
    
    

    
    
                          Mine Safety Appliances Company
                          Segment Information (Unaudited)
                                   (In thousands)
    
    
                           Three Months Ended    Twelve Months Ended
                              December 31            December 31
                           -----------------      ------------------
                              2009      2008         2009       2008
                           -------   -------      -------    -------
    
    Net sales
         North America    $104,442  $160,134     $434,575   $596,277
         Europe             66,371    70,534      238,483    280,588
         International      65,285    58,167      236,933    257,417
                           -------   -------      -------    -------
          Total            236,098   288,835      909,991  1,134,282
                           =======   =======      =======    =======
    
    Net income (loss)
         North America      $9,591   $15,215      $34,994    $52,381
         Europe               (716)    1,834          121      9,762
         International       2,959     1,319        7,308     11,795
         Reconciling           828    (1,870)         872     (3,516)
                           -------   -------      -------    -------
          Total             12,662    16,498       43,295     70,422
                           =======   =======      =======    =======
    
    

SOURCE MSA

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