Quantcast
Last updated on April 24, 2014 at 17:35 EDT

MSA Reports Record Full Year Earnings

February 13, 2013

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           Year Ended
                                              December 31,             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,           December 31,
                                                                 2012                   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            Year Ended
                                       December 31,              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


Source: PR Newswire