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8-K - FORM 8-K - MSA Safety Incd248582d8k.htm

Exhibit 99.1

LOGO

 

FROM:    MSA (Mine Safety Appliances Company)
   Ticker: MSA (NYSE)
   Contact: Mark Deasy – (724) 741- 8570

FOR IMMEDIATE RELEASE

MSA Announces Record Third Quarter Sales and Earnings

•    Quarterly Sales Increase 23% to $298 million

•    Net Income Doubles to $20 million

•    EPS Increases to $0.54 per basic share

PITTSBURGH, October 27, 2011 – MSA (NYSE: MSA) today announced that net sales for the third quarter of 2011 were a record $298 million compared with $242 million for the third quarter of 2010, an increase of $56 million, or 23 percent. Net income in the third quarter 2011 was a record $20 million, or 54 cents per basic share, an increase of $10 million, compared with $10 million, or 27 cents per basic share, for the same period last year. Excluding the impact of General Monitors, our recent acquisition, organic sales increased $34 million, or 14 percent, while income increased $5 million, or 50 percent.

“It is certainly gratifying to see the solid progress our team is making in executing our strategy,” said William M. Lambert, MSA President and CEO. “For the quarter we achieved good revenue growth across most of our core industrial product lines in both emerging and developed markets. In particular, our fall protection business performed very well, growing 21 percent when compared to the same quarter a year ago, and gas detection grew 13 percent. When we factor in the impact of General Monitors, our quarterly gas detection sales grew 51 percent. Additionally, I am encouraged by the 300 basis point improvement we achieved in gross profit margins across all of our products in both developed and emerging markets. While the economic environment remains volatile and an ever-present concern, our most recent results reflect the commitment of our team and the success they are having in generating growth in what continues to be a challenging marketplace,” he added.

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Third quarter sales in the company’s North American segment increased $32 million, or 28 percent, versus the same period of 2010. Organic sales increased $16 million, or 14 percent, while the company’s recent acquisition of General Monitors increased sales by $16 million in the quarter. Organic sales of gas detection products increased $4 million, while sales of head protection and fall protection products were both up $2 million on higher shipments to core industrial markets. Shipments of ballistic helmets to the military were $6 million higher in the quarter.

Sales in the company’s European segment increased $10 million, or 17 percent, when compared to the third quarter of 2010. Currency translation effects increased third quarter European segment sales, when stated in U.S. dollars, by $5 million, primarily related to a stronger euro. Local currency organic sales decreased $1 million, while the acquisition of General Monitors increased sales in our European segment by $6 million in the quarter. Local currency organic sales in core industrial markets increased $6 million, while sales in military markets increased $1 million. These increases were offset by an $8 million decrease in shipments to fire service markets.

Sales in MSA’s International segment increased $14 million, or 21 percent, in the third quarter of 2011. On a local currency basis, sales increased $9 million reflecting strong product demand in Latin America and Asia, primarily in industrial markets across a broad group of product lines. Currency translation effects increased second quarter International segment sales, when stated in U.S. dollars, by $5 million, primarily related to a strengthening of the Australian dollar, Brazilian real, and South African rand.

Net income in MSA’s North American segment increased $6 million in the third quarter of 2011 when compared to the same period of 2010. The North American segment income includes net

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income of $3 million related to General Monitors. Excluding the impact of General Monitors, North America net income increased by $3 million on higher organic sales and gross profits, partially offset by an increase in operating expenses associated with the previously discussed sales growth.

MSA’s European segment earned income of $2 million in the quarter, compared to income of $0.3 million for the same period of 2010. This improvement in net income is primarily related to the addition of General Monitors.

Net income in MSA’s International segment was $3 million higher in the third quarter of 2011. This increase was primarily related to higher sales in China and Latin America, and improved gross profits across the segment, which were partially offset by higher operating costs. Currency translation effects increased current quarter International segment net income, when stated in U.S. dollars, by approximately $1 million.

“Our focus now is to build upon the momentum we have had for much of the year, “Mr. Lambert said. “While we are committed to driving revenue growth and improvements in profitability through the remainder of 2011 and into 2012, we are keeping a watchful eye on the economic conditions that may impact demand for our products throughout the world. We continue to closely monitor the global economic situation and, if it changes, we are prepared to act quickly to minimize the impact of a downturn,” Mr. Lambert concluded.

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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. Sophisticated safety 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, homeland security, construction and other industries, as well as the military. Principal products include self-contained breathing apparatus, gas masks, portable gas detection instruments, fixed instruments for flame and gas detection, head protection products, respirators and thermal imaging cameras. Through a joint venture with MCR Safety of Memphis, Tenn., the company also provides a broad range of consumer and contractor safety products through retail channels. These products are marketed and sold under the Safety Works brand. MSA has annual sales of approximately $1 billion, manufacturing operations in four continents, and 42 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 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 web sites.

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Mine Safety Appliances Company

Condensed Consolidated Statement of Income (Unaudited)

(In thousands, except earnings per share)

 

     Three Months Ended
September 30
    Nine Months Ended
September 30
 
     2011     2010     2011     2010  

Net sales

   $ 298,241      $ 242,019      $ 869,473      $ 691,626   

Other income, net

     2,398        1,039        4,353        2,359   
  

 

 

   

 

 

   

 

 

   

 

 

 
     300,639        243,058        873,826        693,985   
  

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses

        

Cost of products sold

     177,353        151,340        519,179        428,268   

Selling, general and administrative

     78,621        61,185        227,382        184,005   

Research and development

     9,663        7,938        29,646        23,956   

Restructuring and other charges

     1,004        2,082        6,118        11,509   

Interest

     3,198        1,686        10,423        4,911   

Currency exchange losses (gains)

     431        3,545        986        (90
  

 

 

   

 

 

   

 

 

   

 

 

 
     270,270        227,776        793,734        652,559   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     30,369        15,282        80,092        41,426   

Provision for income taxes

     10,188        5,297        26,934        14,387   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     20,181        9,985        53,158        27,039   

Net income attributable to noncontrolling interests

     (209     (382     (285     (703
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Mine Safety Appliances Company

     19,972        9,603        52,873        26,336   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share attributable to Mine Safety Appliances Company common shareholders

        

Basic

   $ 0.54      $ 0.27      $ 1.44      $ 0.73   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.54      $ 0.26      $ 1.42      $ 0.72   
  

 

 

   

 

 

   

 

 

   

 

 

 

Dividends per common share

   $ 0.26      $ 0.25      $ 0.77      $ 0.74   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic shares outstanding

     36,236        35,917        36,206        35,819   

Diluted shares outstanding

     36,799        36,391        36,817        36,366   

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Mine Safety Appliances Company

Condensed Consolidated Balance Sheet (Unaudited)

(In thousands)

 

     September 30,
2011
     December 31,
2010
 

Current assets

     

Cash and cash equivalents

   $ 58,822       $ 59,760   

Trade receivables, net

     204,675         198,551   

Inventories

     157,299         150,581   

Other current assets

     60,316         68,497   
  

 

 

    

 

 

 

Total current assets

     481,112         477,389   
  

 

 

    

 

 

 

Property, net

     154,465         156,789   

Prepaid pension cost

     129,768         121,631   

Goodwill

     262,283         263,089   

Other non-current assets

     195,545         178,290   
  

 

 

    

 

 

 

Total

     1,223,173         1,197,188   
  

 

 

    

 

 

 

Current liabilities

     

Notes payable and current portion of long-term debt

   $ 8,523       $ 10,163   

Accounts payable

     53,511         58,460   

Other current liabilities

     115,340         113,118   
  

 

 

    

 

 

 

Total current liabilities

     177,374         181,741   
  

 

 

    

 

 

 

Long-term debt

     377,063         367,094   

Pensions and other employee benefits

     127,821         126,479   

Deferred tax liabilities

     48,574         49,177   

Other non-current liabilities

     17,320         16,647   

Equity

     475,021         456,050   
  

 

 

    

 

 

 

Total

     1,223,173         1,197,188   
  

 

 

    

 

 

 

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Mine Safety Appliances Company

Segment Information (Unaudited)

(In thousands)

 

     Three Months Ended
September 30
    Nine Months Ended
September 30
 
     2011     2010     2011     2010  

Net sales

        

North America

   $ 143,547      $ 111,915      $ 412,154      $ 327,803   

Europe

     71,696        61,539        211,403        174,569   

International

     82,998        68,565        245,916        189,254   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     298,241        242,019        869,473        691,626   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

        

North America

   $ 18,839      $ 12,621      $ 44,773      $ 31,133   

Europe

     1,859        280        5,540        (5,483

International

     6,666        3,800        20,509        11,727   

Reconciling

     (7,392     (7,098     (17,949     (11,041
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     19,972        9,603        52,873        26,336   
  

 

 

   

 

 

   

 

 

   

 

 

 

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