MSA Announces Record Quarterly Sales and Income

25 Jul, 2012, 08:30 ET from MSA

PITTSBURGH, July 25, 2012 /PRNewswire/ -- MSA (NYSE: MSA) today announced that net sales for the second quarter of 2012 were $295 million, up slightly when compared to the second quarter of 2011, and a record for the quarter.  Excluding the effect of weakening currencies, sales increased $16 million, or 6 percent.  Net income for the second quarter 2012 was a record $28 million, or 76 cents per basic share, an increase of $8 million, or 43 percent, compared with $20 million, or 53 cents per basic share, for the same period last year. 

"MSA's consolidated second quarter results reflect further advancement in executing our corporate strategy," said William M. Lambert, MSA President and CEO.  "When you exclude the impact of weakening foreign currencies, our quarterly revenue from our global core product groups – which include Head Protection, Fall Protection, Portable Gas Detection, Fixed Gas and Flame Detection, and Self-Contained Breathing Apparatus (SCBA) – increased 10 percent, with core product group sales to emerging markets up 18 percent.  In addition, the results we are seeing in managing our manufacturing costs, product mix and pricing strategies are encouraging," he said.  Mr. Lambert noted that for the quarter, gross profit margins improved 140 basis points when compared to the second quarter of 2011. 

Second quarter sales in the company's North American segment increased $8 million, or 6 percent, versus the same period of 2011.  Sales increased $11 million in gas detection products, $2 million in head protection products and $1 million in fall protection products on higher shipments to industrial markets.  Partially offsetting these increases was a decline of $5 million in sales of Advanced Combat Helmets (ACH) and ballistic vests to Military Markets.  This decrease reflects the divestitures of the North American ballistic helmet and ballistic vest businesses.  As announced in June, MSA completed the sale of its North American ballistic helmet business to Revision Military of Essex Junction, Vermont.  The sale of the ballistic vest business closed in the fourth quarter of 2011.

Sales in the company's European segment decreased $8 million, or 10 percent, when compared to the second quarter of 2011, on a weakening euro.  Local currency sales were up 1 percent year-to-year.  Currency translation effects decreased second quarter European segment sales, when stated in U.S. dollars, by $8 million.

Sales in MSA's International segment were flat when compared to the second quarter of 2011.  On a local currency basis, sales increased $7 million, or 10 percent, reflecting stronger product demand in emerging markets across Latin America and Africa, primarily in industrial markets across a broad group of product lines.  Currency translation effects decreased International segment sales, when stated in U.S. dollars, by $7 million, primarily related to a weakening of the Australian dollar, Brazilian real and the South African rand.

Net income in MSA's North American segment increased $4 million in the second quarter of 2012.  The current quarter income includes $1 million of after-tax income related to the divestiture of the North American ballistic helmet business.  Excluding this gain, net income increased $3 million.  This increase reflects the previously discussed increase in sales and improved gross profits.  These improvements were partially offset by higher operating costs on the higher level of sales. 

Net income in MSA's European segment income was up 2 percent in the quarter.  Local currency net income increased $0.2 million in the current quarter in Europe, reflecting lower restructuring charges partially offset by increased research and development and selling, general, and administrative costs.  The improvement in local currency net income was offset, when stated in U.S. dollars, by the currency translation effects of a weaker euro.

Net income in the International segment decreased $3 million in the second quarter of 2012.  The decrease in income is primarily related to positive production variances in 2011 that did not repeat this quarter and weaker currencies in 2012.  Currency translation effects decreased second quarter International segment net income, when stated in U.S. dollars, by $1 million, primarily related to a weaker Australian dollar, Brazilian real, and South African rand.  

Net income in reconciling items for the second quarter of 2012 was $2 million, compared to a net loss of $5 million in the second quarter of 2011.  This increase is primarily related to the gain on the sale of land in the company's Cranberry Woods office park near Pittsburgh, an increase in currency exchange gains, and lower interest expense. 

"Our strategic focus on developing business from MSA's core product lines continues to produce favorable results," Mr. Lambert said.  "On the strength of some large orders and nice gains in North America, Latin America and from General Monitors, our core product sales now represent nearly two-thirds of total sales, and our focus is on increasing that percentage in the quarters ahead.  While the European economic situation remains a concern, and as we deal with slowing economic conditions in Asia and elsewhere, we remain committed to executing this strategy," he concluded. 

About MSA:

Established in 1914, MSA is a global leader in the development, manufacture and supply of safety products that protect people's health and safety.  Many MSA products typically 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, handheld gas detection instruments, fixed gas and flame detection systems, 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 has annual sales of approximately $1 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 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 Websites.

 

 

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

 

Three Months Ended June 30,

Six Months Ended June 30,

2012

2011

2012

2011

Net sales

$ 294,738

$ 294,733

$ 588,223

$ 571,232

Other income, net

8,259

1,159

8,264

1,955

302,997

295,892

596,487

573,187

Costs and expenses

Cost of products sold

171,612

175,724

338,106

341,826

Selling, general and administrative

77,922

75,716

154,985

148,761

Research and development

10,342

9,440

19,634

19,983

Restructuring and other charges

2,027

5,114

Interest

2,914

3,788

6,063

7,225

Currency exchange (gains) losses

(1,192)

(111)

1,228

555

261,598

266,584

520,016

523,464

Income before income taxes

41,399

29,308

76,471

49,723

Provision for income taxes

13,120

9,827

23,870

16,746

Net income

28,279

19,481

52,601

32,977

Net (income) loss attributable to noncontrolling interests

(284)

111

(684)

(76)

Net income attributable to Mine Safety Appliances Company

27,995

19,592

51,917

32,901

Earnings per share attributable to Mine Safety Appliances Company common shareholders

Basic

$       0.76

$       0.53

$       1.41

$       0.90

Diluted

$       0.75

$       0.53

$       1.39

$       0.88

Dividends per common share

$       0.28

$       0.26

$       0.54

$       0.51

Basic shares outstanding

36,590

36,217

36,486

36,191

Diluted shares outstanding

37,081

36,854

36,986

36,825

 

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

June 30,

2012

December 31,

2011

Current assets

Cash and cash equivalents

$        65,062

$        59,938

Trade receivables, net

217,291

192,627

Inventories

143,668

141,475

Other current assets

57,421

64,809

         Total current assets

483,442

458,849

Property, net

146,660

145,763

Prepaid pension cost

59,581

58,075

Goodwill

256,069

259,084

Other noncurrent assets

192,462

193,281

         Total

1,138,214

1,115,052

Current liabilities

Notes payable and current portion of long-term debt

$          8,548

$          8,263

Accounts payable

67,665

50,208

Other current liabilities

123,601

113,299

         Total current liabilities

199,814

171,770

Long-term debt

294,011

334,046

Pensions and other employee benefits

124,163

124,310

Deferred tax liabilities

30,333

30,458

Other noncurrent liabilities

14,526

15,057

Equity

475,367

439,411

         Total

1,138,214

1,115,052

 

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

Six Months Ended

June 30,

2012

2011

Net income

$    52,601

$    32,977

Depreciation and amortization

15,911

16,728

Change in working capital

4,149

(17,006)

Other operating

(7,632)

(14,019)

         Cash from operations

65,029

18,680

Capital expenditures

(17,814)

(14,027)

Other investing

16,721

1,222

         Cash from investing

(1,093)

(12,805)

Change in debt

(39,714)

15,024

Cash dividends paid

(19,900)

(18,675)

Other financing

1,458

(609)

         Cash from financing

(58,156)

(4,260)

Exchange rate changes

(656)

2,401

Increase (decrease) in cash

5,124

4,016

 

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

Three Months Ended

June 30,

Six Months Ended

June 30,

2012

2011

2012

2011

Net sales

North America

$    145,300

$    137,691

$    282,784

$    268,607

Europe

67,324

74,868

139,790

139,707

International

82,114

82,174

165,649

162,918

            Total

294,738

294,733

588,223

571,232

Net income (loss)

North America

$      20,279

$      16,111

$      36,536

$      25,934

Europe

2,134

2,094

7,755

3,681

International

3,619

6,466

11,884

13,843

Reconciling

1,963

(5,079 )

(4,258)

(10,557)

         Total

27,995

19,592

51,917

32,901

SOURCE MSA



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