MSA Reports Record Full Year Earnings

Net Income Increases 30% on Strong "Core" Performance

Feb 13, 2013, 08:30 ET from MSA

PITTSBURGH, Feb. 13, 2013 /PRNewswire/ -- MSA (NYSE: MSA) today announced that net sales for the year ended December 31, 2012 were $1.169 billion compared with $1.173 billion in 2011, a decrease of $4 million.  Excluding the effect of weakening currencies and the company's divestiture of its ballistic vest and North American ballistic helmet businesses, sales increased $73 million or 7 percent.  Net income for the year ended December 31, 2012 was a record $91 million, or $2.45 per basic share, an increase of $21 million, or 30 percent, compared with $70 million, or $1.91 per basic share, in 2011. 

Net sales for the fourth quarter of 2012 were $294 million compared with $304 million for the same quarter in 2011, a decrease of $10 million or 3 percent.  Excluding the effect of weakening currencies and the divested ballistic vest and North American ballistic helmet businesses, sales increased $10 million or 4 percent.

Net income for the fourth quarter of 2012 was $19 million, or 53 cents per basic share, an increase of $2 million or 15 percent, compared with $17 million or 46 cents per basic share, for the same quarter last year. 

"As these results demonstrate, we continue to gain solid traction from our long-term strategy, a key focus of which is generating growth from core product sales in established and emerging markets," 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).  Revenues in these product groups increased 10 percent for the quarter and represented 68 percent of MSA's global business in the fourth quarter.

"Our continued emphasis on strengthening our overall mix with core products, combined with our focus on reducing manufacturing costs and implementing strategic pricing initiatives, clearly drove our success in 2012," Mr. Lambert said.  He added that for the quarter, gross profit margins improved 480 basis points when compared to the fourth quarter of 2011.

For the quarter, sales in the company's North American segment decreased $14 million, or 9 percent, when compared to the same period of 2011.  Excluding the impact of the ballistic vest and ballistic helmet divestitures in the fourth quarter of 2011 and the second quarter of 2012, respectively, North American segment sales increased $2 million or 1 percent when compared to the same period of 2011.  Sales of gas detection products increased $5 million on higher shipments to industrial markets.  These increases were partially offset by a $2 million decline in SCBA sales to fire service markets.

Fourth quarter sales in MSA's European segment increased $7 million or 9 percent over the prior year.  Excluding the unfavorable impact of a $1 million currency translation effect, European segment local currency sales increased $8 million or 11 percent from the prior year.  Local currency sales of SCBAs and gas detection products each increased $4 million on strength in industrial markets. 

Sales in MSA's International segment decreased $3 million or 3 percent, when compared to the fourth quarter of 2011.  The decline was fully due to unfavorable currency translation effects, primarily related to a weakening of the South African rand and Brazilian real.  Local currency sales were flat, despite a $2 million increase in head, eye and face protection products and a $1 million increase in gas detection products to industrial markets in Latin America.  These improvements were offset by weakness in Australia and Africa. 

Net income in the North American segment was $19 million in the fourth quarter, an increase of $6 million.  The increase in income reflects strong improvements in gross profits driven by sales mix and lower manufacturing costs.

Fourth quarter net income in MSA's European segment was $3 million.  Local currency net income increased $1 million in the quarter due to higher sales, increased gross profits and lower restructuring costs partially offset by higher operating expenses.

Net income in MSA's International segment was $4 million.  Local currency net income decreased $2 million in the quarter due to a lower level of sales throughout Sub Saharan Africa and Australia. 

The net loss reported in reconciling items in the fourth quarter of 2012 was $7 million, up $2 million when compared to the same period in 2011.

"In looking back at 2012, I would categorize the year as a challenging period, but one in which we met those challenges," Mr. Lambert said.  "Our focus on core products helped us navigate the ongoing economic uncertainty, grow local currency sales 7 percent, and increase net income by 30 percent.  Both our local currency sales and our net income are records for us.  Just as impressively, we had a record $150 million of cash flow from Operations that allowed us to repay $63 million of debt, return $51 million to shareholders as dividends and increase cash by $23 million."

"While the global economy and business conditions remain tepid, our focus and commitment to executing the corporate strategy remains unchanged," Mr. Lambert said.  "MSA's position in the marketplace, the continued focus on developing and driving demand of core products, and our ongoing efforts to reduce manufacturing and operating costs provide us many opportunities to improve profitability and increase shareholder value in 2013 and beyond," he 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 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 Website.

 

 

Mine Safety Appliances Company

Consolidated Condensed Statement of Income (Unaudited)

(In thousands, except earnings per share)

 

Three Months Ended

December 31,

Year Ended

December 31,

2012

2011

2012

2011

Net sales

$   294,114

$   303,754

$ 1,168,904

$ 1,173,227

Other income, net

2,558

1,028

10,991

5,381

296,672

304,782

1,179,895

1,178,608

Cost of products sold

163,753

183,812

666,172

702,991

Selling, general and administrative

84,643

78,985

321,234

306,367

Research and development

11,193

9,599

40,900

39,245

Restructuring and other charges

2,787

2,441

2,787

8,559

Interest expense

2,501

3,694

11,361

14,117

Currency exchange losses, net

1,306

1,525

3,151

2,511

266,183

280,056

1,045,605

1,073,790

Income before income taxes

30,489

24,726

134,290

104,818

Provision for income taxes

10,979

7,839

42,529

34,773

Net income

19,510

16,887

91,761

70,045

Net (income) loss attributable to noncontrolling interests

(23)

92

(1,124)

(193)

Net income attributable to Mine Safety Appliances Company

19,487

16,979

90,637

69,852

Basic earnings per share

$           .53

$           .46

$         2.45

$         1.91

Diluted earnings per share

$           .52

$           .46

$         2.42

$         1.87

Dividends per common share

$           .56

$           .26

$         1.38

$         1.03

Basic shares outstanding

36,650

36,265

36,564

36,221

Diluted shares outstanding

37,137

36,874

37,042

36,831

 

 

Mine Safety Appliances Company

Consolidated Condensed Balance Sheet (Unaudited)

(In thousands)

 

December 31,

2012

December 31,

2011

Current assets

         Cash and cash equivalents

$         82,718

$         59,938

         Trade receivables, net

191,289

192,627

         Inventories

136,300

141,475

         Other current assets

56,243

64,809

            Total current assets

466,550

458,849

Property, net

147,465

145,763

Prepaid pension cost

42,816

58,075

Goodwill

258,400

259,084

Other noncurrent assets

196,515

193,281

            Total

1,111,746

1,115,052

Current liabilities

         Notes payable and current portion of long-term debt

$           6,823

$           8,263

         Accounts payable

59,519

50,208

         Other current liabilities

122,458

113,299

            Total current liabilities

188,800

171,770

Long-term debt

272,333

334,046

Pensions and other employee benefits

151,536

124,310

Deferred tax liabilities

17,249

30,458

Other noncurrent liabilities

11,124

15,057

Equity

470,704

439,411

            Total

1,111,746

1,115,052

 

 

Mine Safety Appliances Company

Consolidated Condensed Statement of Cash Flows (Unaudited)

(In thousands)

 

Twelve Months Ended

December 31,

2012

2011

Net income

$        91,761

$      70,045

Depreciation and amortization

31,702

32,866

Change in working capital

38,159

(2,304)

Other operating

(11,146)

(15,349)

         Cash from operations

150,476

85,258

Capital expenditures

(32,209)

(30,390)

Property disposals

20,193

18,687

Other investing

(5,269)

         Cash from investing

(17,285)

(11,703)

Change in debt

(63,128)

(34,863)

Cash dividends paid

(50,990)

(37,741)

Other financing

3,598

1,324

         Cash from financing

(110,520)

(71,280)

Exchange rate changes

109

(2,097)

Increase in cash

22,780

178

 

Mine Safety Appliances Company

Segment Information (Unaudited)

(In thousands)

Three Months Ended

December 31,

Year Ended

December 31,

2012

2011

2012

2011

Net sales

North America

$ 135,199

$ 148,986

$ 551,927

$ 561,140

Europe

82,099

75,350

289,549

286,753

International

76,816

79,418

327,428

325,334

    Total

294,114

303,754

1,168,904

1,173,227

Net income (loss)

North America

$ 19,294

$ 13,141

$ 70,930

$ 57,914

Europe

3,119

1,791

12,913

7,331

International

4,418

6,643

22,318

27,152

Reconciling

(7,344)

(4,596)

(15,524)

(22,545)

    Total

19,487

16,979

90,637

69,852

 

SOURCE MSA



RELATED LINKS

http://www.msasafety.com