MSA Reports Higher Third Quarter Sales on Growing Strength in Industrial Markets

Oct 28, 2010, 08:30 ET from MSA

PITTSBURGH, Oct. 28 /PRNewswire-FirstCall/ -- MSA (NYSE: MSA) today announced that net sales for the third quarter of 2010 were $242.0 million, compared with $228.5 million for the third quarter of 2009, an increase of $13.5 million, or 6 percent.  Net income for the third quarter of 2010 was $9.6 million, or 27 cents per basic share, a decrease of $1.4 million, or 12 percent, compared with $11.0 million, or 31 cents per basic share, for the same quarter last year.  Excluding after-tax costs of $1.6 million associated with the recent acquisition of General Monitors, $2.3 million of currency exchange losses, and $0.8 million of incremental restructuring charges, net income increased by $3.3 million or 30 percent compared to the same quarter last year.  

MSA's consolidated sales in the third quarter reflected continued strengthening in the company's core industrial market, noted William M. Lambert, MSA President and CEO.   "While the economic recovery continues to be very tedious, I am pleased to report that we are seeing some nice growth in mining and industrial markets," Mr. Lambert said.  "Our incoming order book remains strong and continues to provide us with cautious optimism that the core industrial markets we serve, which make up two-thirds of our sales, are slowly and steadily improving," he said.

For the quarter, sales in the company's North American segment increased $4.8 million, or 5 percent, compared to the same period in 2009.  During the third quarter, the company continued to see strong demand in its core industrial markets, which led to higher shipments of gas detection instruments and industrial head protection products, up $5.4 million and $4.5 million, respectively.  These increases were partially offset by lower sales of self-contained breathing apparatus (SCBA) in the fire service market, down $2.6 million, and gas masks, down $2.2 million.

Sales in the company's European segment decreased $3.4 million, or 5 percent, in the current quarter, reflecting the currency translation effects of a weaker euro.  Local currency sales increased $2.1 million during the third quarter of 2010, reflecting improved SCBA sales in Germany and stronger instrument sales in northern Europe. Currency translation effects decreased third quarter European segment sales, when stated in U.S. dollars, by $5.5 million, due to a weaker euro.

Sales in MSA's International segment increased by $12.1 million, or 21 percent, in the current quarter.  Local currency sales were up $9.1 million in the current quarter, reflecting strong sales in Africa and Latin America, primarily in mining markets.  Currency translation effects increased International segment sales, when stated in U.S. dollars, by $3.0 million, primarily related to a strengthening of the Australian dollar, South African rand, and Brazilian real.

Net income in the company's North American segment was flat on the 5 percent increase in sales in the third quarter of 2010.  

MSA's European segment reported a net loss for the third quarter of $0.3 million, compared to a net loss of $1.1 million during the third quarter of 2009.  The improvement was related to the modest increase in local currency sales.  Currency translation effects reduced the current period loss in the European segment, when stated in U.S. dollars, by $0.2 million.

International segment net income for the third quarter was $3.3 million, an increase of $1.6 million, compared to $1.7 million in the same quarter last year.  Higher net income was primarily related to higher sales, partially offset by higher selling, general and administrative expenses.  Currency translation effects were not significant.

"While we remain committed to investing in targeted growth areas, as demonstrated by our recent acquisition of General Monitors, we are mindful of the ongoing economic uncertainties and continue to exercise discipline in managing our operating costs," Mr. Lambert said.  "We are confident that our focus on managing these costs, while investing in core products in both developed and emerging markets, will help us weather the slow economic recovery and emerge in a way that will significantly increase shareholder value as the world economies gain further strength," 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 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, oil, gas and petrochemical industry, homeland security, construction, mining and other industries, as well as the military.  Principal products include self-contained breathing apparatus, gas masks, gas detection instruments, head protection, ballistic body armor, fall protection devices 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 in the United States, Europe, Asia and Latin America, and more than 40 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 spending patterns of government agencies, competitive pressures, product liability claims and our ability to collect related insurance receivables, 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

Nine Months Ended

September 30

September 30

2010

2009

2010

2009

Net sales

$242,019 

$228,486 

$691,626 

$673,893 

Other income

1,039 

150 

2,359 

1,681 

243,058 

228,636 

693,985 

675,574 

Cost of products sold

151,340 

145,354 

428,268 

422,469 

Selling, general and administrative

61,185 

57,313 

184,005 

170,174 

Research and development

7,938 

7,119 

23,956 

21,405 

Restructuring and other charges

2,082 

840 

11,509 

9,901 

Interest

1,686 

1,681 

4,911 

5,442 

Currency exchange losses (gains)

3,545 

42 

(90)

(305)

227,776 

212,349 

652,559 

629,086 

Income before income taxes

15,282 

16,287 

41,426 

46,488 

Provision for income taxes

5,297 

5,154 

14,387 

15,754 

Net income

9,985 

11,133 

27,039 

30,734 

Net income attributable to noncontrolling interests

(382)

(179) 

(703)

(101) 

Net income attributable to Mine Safety Appliances Company

9,603 

10,954 

26,336 

30,633 

Basic earnings per common share

$0.27 

$0.31 

$0.73 

$0.86 

Diluted earnings per common share

$0.26 

$0.30 

$0.72 

$0.85 

Dividends per common share

$0.25 

$0.24 

$0.74 

$0.72 

Basic shares outstanding

35,917 

35,680 

35,819 

35,662 

Diluted shares outstanding

36,391 

35,938 

36,366 

35,860 

Mine Safety Appliances Company

Consolidated Condensed Balance Sheet (Unaudited)

(In thousands)

September 30,

2010

December 31,

2009

Current assets

      Cash and cash equivalents

$  47,413  

$  61,983 

      Trade receivables, net

186,128

173,355 

      Inventories

142,600

123,944 

      Other current assets

62,455

74,743 

             Total current assets

438,596

434,025 

Property, net

141,114

144,575 

Prepaid pension cost

115,415

105,812 

Goodwill

84,874

84,727 

Other noncurrent assets

130,950

106,089 

             Total

910,949

875,228 

Current liabilities

      Notes payable and current portion of long-term debt

$  51,447  

$  16,326 

      Accounts payable

55,589

43,487 

      Other current liabilities

99,065

108,637 

             Total current liabilities

206,101

168,450 

Long-term debt

72,106

82,114 

Pensions and other employee benefits

126,973

125,387 

Deferred tax liabilities

45,075

44,800 

Other noncurrent liabilities

14,012

15,077 

Equity

446,682

439,400 

             Total

910,949

875,228 

Mine Safety Appliances Company

Segment Information (Unaudited)

(In thousands)

Three Months Ended

Nine Months Ended

September 30

September 30

2010

2009

2010

2009

Net sales

      North America

$111,915

$107,054 

$327,803

$330,133 

      Europe

61,539

64,937 

174,569

186,611 

      International

68,565

56,495 

189,254

157,149 

             Total

242,019

228,486 

691,626

673,893 

Net income (loss) attributable to Mine Safety Appliances Company

      North America

$10,463 

$10,767 

$24,732 

$25,403 

      Europe

(301)

(1,060)

(7,247)

2,155 

      International

3,317 

1,666 

10,266 

3,031 

      Reconciling

(3,876)

(419)

(1,415)

44 

             Total

9,603 

10,954 

26,336 

30,633 

SOURCE MSA



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