2014

MSA Announces Third Quarter Results

PITTSBURGH, Oct. 23, 2013 /PRNewswire/ -- MSA (NYSE: MSA), the global leader in safety products and systems that help protect facility infrastructures and people in the workplace, today announced that net sales for the third quarter of 2013 were $278 million compared with $287 million for the third quarter of 2012, a decrease of $9 million, or 3 percent. Excluding the effect of weakening currencies, sales decreased $3 million, or 1 percent. Net income for the third quarter 2013 was $20 million, or $0.52 per basic share. Excluding after-tax restructuring expense, foreign currency charges and a gain on an asset sale totaling $2 million, net income for the current quarter was $22 million or $0.57 per basic share.

"MSA's consolidated third quarter results reflect the combined impact of product certification delays resulting from the federal government's budget sequestration, a reduction in large order shipments and weaker than normal business conditions in mining markets around the world," said William M. Lambert, MSA President and CEO. "Although we continue to see good growth opportunities for MSA's global core product groups, we had a number of short-term items impact our quarterly results, including a temporary stoppage of SCBA shipments to the U.S. fire service caused by government sequestration delays in the certification process associated with new SCBA performance standards adopted by the National Fire Protection Association."

On a geographic basis, third quarter sales in the company's North American segment increased $1 million, or 1 percent, versus the same period of 2012. Sales of gas detection products increased $4 million on an increase in shipments to industrial markets. This increase was partially offset by a $3 million decline in shipments to military markets on a lower level of gas mask sales. Sequential quarter SCBA orders were down $9 million, due principally to sequestration related approval delays of new product.

Sales in the company's European segment decreased $1 million, or 1 percent, when compared to the third quarter of 2012. Excluding a favorable currency translation impact of $2 million, local currency sales decreased $3 million. The decline was related to weakness in industrial markets in Russia and a lower level of invoicing to military markets in the Middle East and India regions. These declines were partially offset by strength in the fire service markets throughout Western Europe.

Sales in MSA's International segment decreased $9 million, or 10 percent, versus the same period of 2012. Excluding an unfavorable currency translation impact of $8 million, International segment local currency sales decreased $1 million, or 1 percent, from the third quarter of 2012. Local currency industrial market sales were flat on weakness in mining markets, while fire service improvements were offset by a decline in sales to military markets. 

Net income in MSA's North American segment increased $3 million in the third quarter of 2013, primarily due to lower selling, general and administrative expenses.

Net income in MSA's European segment increased $1 million in the third quarter of 2013, primarily due to improved product margins.

International segment net income decreased $1 million in the third quarter, primarily related to the decrease in sales partially offset by a reduction of selling, general and administrative expenses in Australia and South Africa.

The net loss reported in reconciling items increased $2 million in the third quarter of 2013. The increase in reconciling items net loss in the third quarter of 2013 reflects higher currency exchange losses and the absence of a one-time tax benefit associated with the non-cash charitable contribution of land at MSA's corporate headquarters near Pittsburgh in the third quarter of 2012. 

"While the quarterly financial results demonstrate how challenging conditions are, we continue to experience growth in MSA's core product lines," Mr. Lambert said. "As we head into the final quarter of the year, we remain focused on controlling SG&A and reducing manufacturing costs while continuing our investment in R&D that drives profitable growth," he said. "I remain confident in our strategy and the soundness of our long-term goals. We will continue to drive our key initiatives across core products, throughout emerging markets and in operational excellence – initiatives that I'm confident will continue to deliver value for our shareholders, just as they have over the past three years," 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
September 30,

Nine Months Ended
September 30,


2013

2012

2013

2012

Net sales

$278,245

$ 286,567

$861,179

$ 874,790

Other income, net

609

169

1,037

8,433







278,854

286,736

862,216

883,223

Costs and expenses





Cost of products sold

160,029

164,313

485,301

502,419

Selling, general and administrative

73,311

81,606

237,919

236,591

Research and development

12,298

10,073

34,280

29,707

Restructuring and other charges

1,515

3,942

Interest expense

2,741

2,797

8,151

8,860

Currency exchange losses, net

1,733

617

3,845

1,845







251,627

259,406

773,438

779,422






Income before income taxes

27,227

27,330

88,778

103,801

Provision for income taxes

8,050

7,680

25,815

31,550

Net income

19,177

19,650

62,963

72,251

Net loss (income) attributable to noncontrolling interests

324

(417)

(127)

(1,101)

Net income attributable to Mine Safety Appliances
Company

19,501

19,233

62,836

71,150

Earnings per share attributable to Mine Safety
Appliances Company common shareholders





Basic

$       0.52

$       0.52

$       1.69

$       1.93

Diluted

$       0.52

$       0.51

$       1.66

$       1.90

Dividends per common share

$       0.30

$       0.28

$       0.88

$       0.82

Basic shares outstanding

36,915

36,633

36,845

36,535

Diluted shares outstanding

37,507

37,055

37,438

37,009

 

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






September 30,

2013


December 31,

2012

Current assets




Cash and cash equivalents

$        96,010


$        82,718

Trade receivables, net

194,886


191,289

Inventories

144,277


136,300

Other current assets

60,102


53,241

         Total current assets

495,275


463,548





Property, net

150,146


147,465

Prepaid pension cost

47,640


42,818

Goodwill

259,388


258,400

Other noncurrent assets

217,094


199,515

         Total

1,169,543


1,111,746





Current liabilities




Notes payable and current portion of long-term debt

$         7,114


$          6,823

Accounts payable

66,628


59,519

Other current liabilities

120,469


122,458

         Total current liabilities

194,211


188,800





Long-term debt

282,333


272,333

Pensions and other employee benefits

154,457


151,536

Deferred tax liabilities

19,184


17,249

Other noncurrent liabilities

11,101


11,124

Equity

508,257


470,704

         Total

1,169,543


1,111,746

 

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




Nine Months Ended

September 30,


2013


2012





Net income

$    62,963


$    72,251

Depreciation and amortization

23,392


24,057

Change in working capital

(18,291)


2,763

Other operating

(3,358)


(10,037)

         Cash from operations

64,706


89,034





Capital expenditures

(26,214)


(24,949)

Property disposals and other investing

1,333


16,801

         Cash from investing

(24,881)


(8,148)





Change in debt

10,284


(37,551)

Cash dividends paid

(32,694)


(30,261)

Other financing

(1,181)


1,373

         Cash from financing

(23,591)


(66,439)





Exchange rate changes

(2,942)


71





Increase (decrease) in cash and cash equivalents

13,292


14,518

 

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






Three Months Ended

September 30,


Nine Months Ended

September 30,


2013


2012


2013


2012









Net sales








North America

$    134,889


$    133,944


$    423,319


$    416,728

Europe

67,093


67,660


204,735


207,450

International

76,263


84,963


233,125


250,612

            Total

278,245


286,567


861,179


874,790









Net income (loss)








North America

$      18,053


$      15,100


$      55,217


$      51,636

Europe

2,667


2,039


8,003


9,794

International

4,636


6,016


16,493


17,900

Reconciling

(5,855)


(3,922)


(16,877)


(8,180)

         Total

19,501


19,233


62,836


71,150

 

SOURCE MSA



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