MSA Announces Third Quarter Results PR Newswire PITTSBURGH, Oct. 24, 2012 PITTSBURGH, Oct. 24, 2012 /PRNewswire/ --MSA (NYSE: MSA) today announced that net sales for the third quarter of 2012 were $287 million, down $12 million when compared to the third quarter of 2011. Excluding the effect of weakening currencies and the divestiture ofthe company'sballistic vest and North American ballistic helmet businesses, sales increased $14 million, or 5 percent. Net income for the third quarter 2012 was $19million, or 52 cents per basic share, a decrease of less than $1 million when compared with the same quarter last year. "Despite the slow-down we are seeing in certain geographic markets, the quarterly results we achieved from our primary areas of strategic focus in core product groups and emerging markets are providing a degree of encouragement," said William M. Lambert, MSA President and CEO. "Excluding the impact of weakening foreign currencies, our quarterly revenue from our global core product groups increased 7 percent, with core product group sales to emerging markets up 18 percent," Mr. Lambert added. 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). These products now represent 64 percent of MSA's global business. "Driving demand for these products through innovation and exceptional customer support remains a critical element of our ongoing strategy," Mr. Lambert said. "In addition to our emphasis on core products, our focus on reducing manufacturing costs, strengthening product mix and implementing more effective pricing strategies is providing solid returns." Mr. Lambert noted that for the quarter, gross profit margins improved 220 basis points when compared to the third quarter of 2011. Sales in the North American segment decreased $10 million, or 7 percent, in the current quarter. The decrease reflects the divestiture of the company's ballistic vest and North American Advanced Combat Helmet (ACH) businesses during the fourth quarter of 2011 and the second quarter of 2012, respectively. Sales of ballistic vests and ACHs totaled $11 million in the third quarter of 2011. Excluding this change, North America segment sales were flat, with a $4 million improvement in shipments of SCBAs to the fire service being partially offset by small decreases in other product groups. Sales in the company's European segment decreased $4 million, or 6 percent, when compared to the third quarter of 2011, on a weakening euro. Local currency sales were up$4 million on improved sales of gas detection products to industrial markets. Currency translation effects decreased third quarter European segment sales, when stated in U.S. dollars, by $8 million. Sales in MSA's International segment increased $2 million, or 2 percent, when compared to the third quarter of 2011. On a local currency basis, sales increased $9 million 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 was $15 million, a decrease of $4 million when compared to the third quarter of 2011. The decrease in income reflects increased product liability related expenses and reduced pension income, partially offset by improved gross profit margins. Net income in MSA's European segment was $2 million. Local currency net income increased $0.5 million in the current quarter due primarily to lower restructuring charges. The remainder of the improvement reflects lower selling, general and administrative expenses in Western Europe, offset by lower gross profit margins. Currency translation effects decreased current quarter European segment net income, when stated in U.S. dollars, by $0.4 million, primarily reflecting a weaker euro. Net income in the International segment was $6 million, a decrease of $0.7 million due primarily to currency translation effects, which reduced current quarter International segment net income by $0.6 million reflecting a weaker Australian dollar, Brazilian real and South African rand. The net loss reported in reconciling items for the third quarter of 2012 was $4 million compared to a net loss of $7 million in the third quarter of 2011. The lower net loss in the third quarter of 2012 was primarily related to lower currency exchange losses and a tax benefit associated with a non-cash charitable contribution of land at MSA's Cranberry Woods office park near Pittsburgh. "Our strategic focus on developing business from MSA's core product lines continues to produce favorable results," Mr. Lambert said. "While we saw an increase in selling, general and administrative expenses during the quarter, we continued to see solid improvement in gross profits and other operating costs. Although economic uncertainty is tempering some of our optimism going into the fourth quarter and beyond, it does not affect our determination. I believe MSA's business strength and position in the marketplace afford us many opportunities for continued profitable growth," he concluded. About MSA: Established in 1914, MSA is a 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 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: This press release may contain forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business, and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors. These factors include, but are not limited to, global economic conditions, 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 Websites. Mine Safety Appliances Company Condensed Consolidated Statement of Income (Unaudited) (In thousands, except earnings per share) Three Months Ended Nine Months Ended September 30, September30, 2012 2011 2012 2011 Net sales $286,567 $ 298,241 $874,790 $ 869,473 Other income, net 169 2,398 8,433 4,353 286,736 300,639 883,223 873,826 Costs and expenses Cost of products sold 164,313 177,353 502,419 519,179 Selling, general and 81,606 78,621 236,591 227,382 administrative Research and development 10,073 9,663 29,707 29,646 Restructuring and other — 1,004 — 6,118 charges Interest 2,797 3,198 8,860 10,423 Currency exchange losses 617 431 1,845 986 259,406 270,270 779,422 793,734 Income before income taxes 27,330 30,369 103,801 80,092 Provision for income taxes 7,680 10,188 31,550 26,934 Net income 19,650 20,181 72,251 53,158 Net income attributable to (417) (209) (1,101) (285) noncontrolling interests Net income attributable to Mine Safety Appliances 19,233 19,972 71,150 52,873 Company Earnings per share attributable to Mine Safety Appliances Company common shareholders Basic $ 0.52 $ 0.54 $ 1.93 $ 1.44 Diluted $ 0.51 $ 0.54 $ 1.90 $ 1.42 Dividends per common share $ 0.28 $ 0.26 $ 0.82 $ 0.77 Basic shares outstanding 36,633 36,236 36,535 36,206 Diluted shares outstanding 37,055 36,799 37,009 36,817 Mine Safety Appliances Company Condensed Consolidated Balance Sheet (Unaudited) (In thousands) September 30, December 31, 2012 2011 Current assets Cash and cash equivalents $ 74,456 $ 59,938 Trade receivables, net 214,930 192,627 Inventories 142,825 141,475 Other current assets 52,783 64,809 Total current assets 484,994 458,849 Property, net 146,835 145,763 Prepaid pension cost 60,398 58,075 Goodwill 257,087 259,084 Other noncurrent assets 198,274 193,281 Total 1,147,588 1,115,052 Current liabilities Notes payable and current portion of $ 726 $ 8,263 long-term debt Accounts payable 61,233 50,208 Other current liabilities 120,246 113,299 Total current liabilities 182,205 171,770 Long-term debt 304,000 334,046 Pensions and other employee benefits 125,899 124,310 Deferred tax liabilities 30,398 30,458 Other noncurrent liabilities 14,465 15,057 Equity 490,621 439,411 Total 1,147,588 1,115,052 Mine Safety Appliances Company Consolidated Condensed Statement of Cash Flows (Unaudited) (In thousands) Nine Months Ended September 30, 2012 2011 Net income $ 72,251 $ 53,158 Depreciation and amortization 24,057 24,886 Change in working capital 2,763 (15,448) Other operating (10,037) (24,190) Cash from operations 89,034 38,406 Capital expenditures (24,949) (21,330) Property disposals and other investing 16,801 3,478 Cash from investing (8,148) (17,852) Change in debt (37,551) 8,385 Cash dividends paid (30,261) (28,210) Other financing 1,373 (125) Cash from financing (66,439) (19,950) Exchange rate changes 71 (1,542) Increase (decrease) in cash 14,518 (938) Mine Safety Appliances Company Segment Information (Unaudited) (In thousands) Three Months Ended Nine Months Ended September 30, September 30, 2012 2011 2012 2011 Net sales North $ 133,944 $ 143,547 $ 416,728 $ 412,154 America Europe 67,660 71,696 207,450 211,403 84,963 82,998 250,612 245,916 International Total 286,567 298,241 874,790 869,473 Net income (loss) North $ 15,100 $ 18,839 $ $ America 51,636 44,773 Europe 2,039 1,859 9,794 5,540 6,016 6,666 17,900 20,509 International Reconciling (3,922) (7,392) (8,180) (17,949) Total 19,233 19,972 71,150 52,873 SOURCE MSA Website: http://www.msanet.com Contact: Mark Deasy, +1-724-741-8570
MSA Announces Third Quarter Results
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