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Mine Safety Appliances : MSA Announces Record Third Quarter Sales and Earnings

10/27/2011 | 10:36am US/Eastern

- Quarterly Sales Increase 23% to $298 million
- Net Income Doubles to $20 million
- EPS Increases to $0.54 per basic share

PITTSBURGH, Oct. 27, 2011 /PRNewswire via COMTEX/ --

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.

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 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.

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.

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


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


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


SOURCE MSA

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