MSA Announces Third Quarter Results
Quarterly Highlights
- Reported revenue was
$278 million , increasing 2 percent from a year ago on a reported and constant currency basis. - Operating income was
$40 million or 14.4 percent of net sales, increasing 470 basis points from a year ago. Adjusted operating income, excluding foreign currency losses and restructuring, was$43 million or 15.3 percent of net sales, increasing 270 basis points from a year ago. - Net income from continuing operations was
$25 million or$0.67 per diluted share, compared to$16 million or$0.41 per diluted share in the third quarter a year ago, increasing 63 percent. Adjusted earnings were$0.72 per diluted share, compared to$0.59 per diluted share a year ago, increasing 22 percent. UK -based fall protection company Latchways, acquired by MSA in 2015, generated net income of$0.03 per diluted share in the third quarter.
Comments from Management
"While challenging macro conditions persist in certain areas of our business, our results continue to reflect the steps we've taken to drive improved profitability in a slow growth environment," said
"While many of the challenges that we've faced in 2016 will likely continue into 2017, that will not diminish our focus on making smart investments that drive earnings growth and market leadership positions in our core product areas. Through these targeted investments, I am confident we will position MSA strategically and financially to drive enhanced shareholder value for many years to come," Mr. Lambert concluded.
MSA Safety Incorporated |
|||||||||||||||
Condensed Consolidated Statement of Income (Unaudited) |
|||||||||||||||
(In thousands, except per share amounts) |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||||
Net sales |
$ |
278,233 |
$ |
273,746 |
$ |
853,499 |
$ |
817,465 |
|||||||
Cost of products sold |
149,471 |
153,965 |
468,177 |
450,372 |
|||||||||||
Gross profit |
128,762 |
119,781 |
385,322 |
367,093 |
|||||||||||
Selling, general and administrative |
72,945 |
72,727 |
227,856 |
231,683 |
|||||||||||
Research and development |
13,116 |
12,532 |
34,623 |
36,430 |
|||||||||||
Restructuring and other charges |
1,889 |
3,740 |
3,697 |
4,698 |
|||||||||||
Currency exchange losses, net |
790 |
4,327 |
2,498 |
3,336 |
|||||||||||
Operating income |
40,022 |
26,455 |
116,648 |
90,946 |
|||||||||||
Interest expense |
4,412 |
2,827 |
12,515 |
7,802 |
|||||||||||
Other (income), net
|
(2,041) |
(431) |
(3,704) |
(1,166) |
|||||||||||
Total other expense, net |
2,371 |
2,396 |
8,811 |
6,636 |
|||||||||||
Income from continuing operations before income taxes |
37,651 |
24,059 |
107,837 |
84,310 |
|||||||||||
Provision for income taxes |
11,329 |
8,935 |
38,866 |
36,669 |
|||||||||||
Income from continuing operations |
26,322 |
15,124 |
68,971 |
47,641 |
|||||||||||
(Loss) income from discontinued operations |
(1,300) |
462 |
55 |
1,240 |
|||||||||||
Net income |
25,022 |
15,586 |
69,026 |
48,881 |
|||||||||||
Net (income) loss attributable to noncontrolling interests |
(836) |
390 |
(2,006) |
1,075 |
|||||||||||
Net income attributable to MSA Safety Incorporated |
24,186 |
15,976 |
67,020 |
49,956 |
|||||||||||
Amounts attributable to MSA Safety Incorporated |
|||||||||||||||
Income from continuing operations |
25,486 |
15,712 |
67,475 |
48,750 |
|||||||||||
(Loss) income from discontinued operations |
(1,300) |
264 |
(455) |
1,206 |
|||||||||||
Net income |
24,186 |
15,976 |
67,020 |
49,956 |
|||||||||||
Earnings per share attributable to MSA Safety |
|||||||||||||||
Basic |
|||||||||||||||
Income from continuing operations |
$ |
0.68 |
$ |
0.42 |
$ |
1.80 |
$ |
1.30 |
|||||||
(Loss) income from discontinued operations |
$ |
(0.04) |
$ |
0.01 |
$ |
(0.01) |
$ |
0.03 |
|||||||
Net income |
$ |
0.64 |
$ |
0.43 |
$ |
1.79 |
$ |
1.33 |
|||||||
Diluted |
|||||||||||||||
Income from continuing operations |
$ |
0.67 |
$ |
0.41 |
$ |
1.77 |
$ |
1.29 |
|||||||
(Loss) income from discontinued operations |
$ |
(0.04) |
$ |
0.01 |
$ |
(0.01) |
$ |
0.03 |
|||||||
Net income |
$ |
0.63 |
$ |
0.42 |
$ |
1.76 |
$ |
1.32 |
|||||||
Basic shares outstanding |
37,487 |
37,252 |
37,407 |
37,301 |
|||||||||||
Diluted shares outstanding |
38,112 |
37,709 |
37,908 |
37,776 |
MSA Safety Incorporated |
|||||||
Condensed Consolidated Balance Sheet (Unaudited) |
|||||||
(In thousands) |
|||||||
September 30, 2016 |
December 31, 2015 |
||||||
Assets |
|||||||
Cash and cash equivalents |
$ |
106,033 |
$ |
105,925 |
|||
Trade receivables, net |
211,987 |
232,862 |
|||||
Inventories |
132,542 |
125,849 |
|||||
Notes receivable, insurance companies |
40,482 |
6,746 |
|||||
Other current assets |
39,870 |
33,230 |
|||||
Total current assets |
530,914 |
504,612 |
|||||
Property, net |
149,939 |
155,839 |
|||||
Prepaid pension cost |
69,300 |
62,072 |
|||||
Goodwill |
340,533 |
340,338 |
|||||
Notes receivable, insurance companies, noncurrent |
63,072 |
1,944 |
|||||
Insurance receivable, noncurrent |
152,542 |
227,483 |
|||||
Other noncurrent assets |
121,646 |
130,575 |
|||||
Total assets |
$ |
1,427,946 |
$ |
1,422,863 |
|||
Liabilities and shareholders' equity |
|||||||
Notes payable and current portion of long-term debt |
$ |
6,738 |
$ |
6,650 |
|||
Accounts payable |
56,367 |
68,206 |
|||||
Other current liabilities |
130,183 |
177,031 |
|||||
Total current liabilities |
193,288 |
251,887 |
|||||
Long-term debt, net |
464,600 |
458,022 |
|||||
Pensions and other employee benefits |
162,362 |
156,160 |
|||||
Deferred tax liabilities |
26,255 |
24,872 |
|||||
Other noncurrent liabilities |
14,508 |
14,794 |
|||||
Total shareholders' equity |
566,933 |
517,128 |
|||||
Total liabilities and shareholders' equity |
$ |
1,427,946 |
$ |
1,422,863 |
MSA Safety Incorporated |
|||||||||||||||
Condensed Consolidated Statement of Cash Flows (Unaudited) |
|||||||||||||||
(In thousands) |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||||
Net income |
$ |
25,022 |
$ |
15,586 |
$ |
69,026 |
$ |
48,881 |
|||||||
Depreciation and amortization |
8,919 |
6,982 |
26,651 |
22,646 |
|||||||||||
Change in working capital and other operating |
(15,026) |
(20,451) |
(64,240) |
(61,697) |
|||||||||||
Cash flow from operating activities |
18,915 |
2,117 |
31,437 |
9,830 |
|||||||||||
Capital expenditures |
(5,551) |
(9,133) |
(16,146) |
(25,148) |
|||||||||||
Acquisition, net of cash acquired |
(18,261) |
— |
(18,261) |
— |
|||||||||||
Property disposals and other investing |
967 |
— |
17,932 |
7,969 |
|||||||||||
Cash flow (used in) investing activities |
(22,845) |
(9,133) |
(16,475) |
(17,179) |
|||||||||||
Change in debt |
19,459 |
125,138 |
16,083 |
143,142 |
|||||||||||
Cash dividends paid |
(12,391) |
(11,926) |
(36,675) |
(35,448) |
|||||||||||
Other financing |
1,177 |
(136) |
4,338 |
(7,495) |
|||||||||||
Cash flow from (used in) financing activities |
8,245 |
113,076 |
(16,254) |
100,199 |
|||||||||||
Effect of exchange rate changes on cash and |
(1,431) |
(4,851) |
1,400 |
(9,505) |
|||||||||||
Increase in cash and cash equivalents |
2,884 |
101,209 |
108 |
83,345 |
MSA Safety Incorporated |
||||||||||||||||
Segment Information (Unaudited) |
||||||||||||||||
(In thousands) |
||||||||||||||||
Americas |
International |
Corporate |
Consolidated |
|||||||||||||
Three Months Ended September 30, 2016 |
||||||||||||||||
Net sales |
$ |
165,359 |
$ |
112,874 |
— |
$ |
278,233 |
|||||||||
Adjusted operating income (loss) |
41,458 |
10,511 |
(9,268) |
42,701 |
||||||||||||
Adjusted operating margin % |
25.1 |
% |
9.3 |
% |
15.3 |
% |
||||||||||
Restructuring and other charges |
(1,889) |
|||||||||||||||
Currency exchange (losses), net |
(790) |
|||||||||||||||
Operating income |
$ |
40,022 |
||||||||||||||
Operating margin % |
14.4 |
% |
||||||||||||||
Nine Months Ended September 30, 2016 |
||||||||||||||||
Net sales |
$ |
510,324 |
$ |
343,175 |
— |
$ |
853,499 |
|||||||||
Adjusted operating income (loss) |
117,475 |
31,659 |
(26,291) |
122,843 |
||||||||||||
Adjusted operating margin % |
23.0 |
% |
9.2 |
% |
14.4 |
% |
||||||||||
Restructuring and other charges |
(3,697) |
|||||||||||||||
Currency exchange (losses), net |
(2,498) |
|||||||||||||||
Operating income |
$ |
116,648 |
||||||||||||||
Operating margin % |
13.7 |
% |
||||||||||||||
Americas |
International |
Corporate |
Consolidated |
|||||||||||||
Three Months Ended September 30, 2015 |
||||||||||||||||
Net sales |
$ |
181,283 |
$ |
92,463 |
— |
$ |
273,746 |
|||||||||
Adjusted operating income (loss) |
40,470 |
1,408 |
(7,356) |
34,522 |
||||||||||||
Adjusted operating margin % |
22.3 |
% |
1.5 |
% |
12.6 |
% |
||||||||||
Restructuring and other charges |
(3,740) |
|||||||||||||||
Currency exchange (losses), net |
(4,327) |
|||||||||||||||
Operating income |
$ |
26,455 |
||||||||||||||
Operating margin % |
9.7 |
% |
||||||||||||||
Nine Months Ended September 30, 2015 |
||||||||||||||||
Net sales |
$ |
519,350 |
$ |
298,115 |
— |
$ |
817,465 |
|||||||||
Adjusted operating income (loss) |
101,833 |
19,869 |
(22,722) |
98,980 |
||||||||||||
Adjusted operating margin % |
19.6 |
% |
6.7 |
% |
12.1 |
% |
||||||||||
Restructuring and other charges |
(4,698) |
|||||||||||||||
Currency exchange (losses), net |
(3,336) |
|||||||||||||||
Operating income |
$ |
90,946 |
||||||||||||||
Operating margin % |
11.1 |
% |
The
Adjusted operating income (loss) and adjusted operating margin are the measures used by the chief operating decision maker to evaluate segment performance and allocate resources. As such, management believes that adjusted operating income (loss) and adjusted operating margin are useful metrics for investors. Adjusted operating income (loss) is defined as operating income excluding restructuring and currency exchange losses. Adjusted operating margin is defined as adjusted operating income (loss) divided by net sales. Adjusted operating income (loss) and adjusted operating margin are not recognized terms under GAAP, and the Company's definition of adjusted operating income (loss) and adjusted operating margin may not be comparable to similarly titled measures of other companies. As such, management believes that it is appropriate to consider operating income determined on a GAAP basis in addition to these non-GAAP measures.
MSA Safety Incorporated |
||||||||||||||||||||
Reconciliation of As Reported Financial Measures to Non-GAAP Financial Measures |
||||||||||||||||||||
Constant currency revenue growth (Unaudited) |
||||||||||||||||||||
Organic constant currency revenue growth (Unaudited) |
||||||||||||||||||||
Consolidated |
||||||||||||||||||||
Three Months Ended September 30, 2016 |
||||||||||||||||||||
Breathing |
Fire and |
Industrial |
Portable |
Fixed |
Fall |
Core |
Non- |
Net Sales |
||||||||||||
GAAP reported |
(21) |
% |
(10) |
% |
2 |
% |
8 |
% |
9 |
% |
114 |
% |
1 |
% |
5 |
% |
2 |
% |
||
Plus: Currency |
— |
% |
— |
% |
1 |
% |
2 |
% |
— |
% |
2 |
% |
1 |
% |
1 |
% |
— |
% |
||
Constant currency |
(21) |
% |
(10) |
% |
3 |
% |
10 |
% |
9 |
% |
116 |
% |
2 |
% |
6 |
% |
2 |
% |
||
Less: Acquisitions |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
124 |
% |
6 |
% |
— |
% |
5 |
% |
||
Organic constant |
(21) |
% |
(10) |
% |
3 |
% |
10 |
% |
9 |
% |
(8) |
% |
(4) |
% |
6 |
% |
(3) |
% |
||
Nine Months Ended September 30, 2016 |
||||||||||||||||||||
Breathing |
Fire and |
Industrial |
Portable |
Fixed |
Fall |
Core |
Non- |
Net Sales |
||||||||||||
GAAP reported |
8 |
% |
(1) |
% |
(7) |
% |
1 |
% |
(2) |
% |
116 |
% |
7 |
% |
(6) |
% |
4 |
% |
||
Plus: Currency |
1 |
% |
1 |
% |
4 |
% |
4 |
% |
1 |
% |
4 |
% |
2 |
% |
3 |
% |
3 |
% |
||
Constant |
9 |
% |
— |
% |
(3) |
% |
5 |
% |
(1) |
% |
120 |
% |
9 |
% |
(3) |
% |
7 |
% |
||
Less: Acquisitions |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
129 |
% |
7 |
% |
— |
% |
6 |
% |
||
Organic constant |
9 |
% |
— |
% |
(3) |
% |
5 |
% |
(1) |
% |
(9) |
% |
2 |
% |
(3) |
% |
1 |
% |
Management believes that constant currency revenue growth is a useful metric for investors, as foreign currency translation can have a material impact on revenue growth trends. Constant currency revenue growth highlights ongoing business performance excluding the impact of fluctuating foreign currencies, which is outside of management's control.
Organic constant currency revenue growth is defined as constant currency revenue growth excluding Latchways' revenue results. Management believes that organic constant currency revenue growth is a useful measure for investors to provide an understanding of MSA's standalone results excluding the acquisition.
There can be no assurances that MSA's definition of constant currency revenue growth or organic constant currency revenue growth is consistent with that of other companies. As such, management believes that it is appropriate to consider revenue growth determined on a GAAP basis in addition to these non-GAAP financial measures.
MSA Safety Incorporated |
||||||||||||||||||||
Reconciliation of As Reported Financial Measures to Non-GAAP Financial Measures |
||||||||||||||||||||
Constant currency revenue growth (Unaudited) |
||||||||||||||||||||
Organic constant currency revenue growth (Unaudited) |
||||||||||||||||||||
Americas Segment |
||||||||||||||||||||
Three Months Ended September 30, 2016 |
||||||||||||||||||||
Breathing |
Fire and |
Industrial |
Portable |
Fixed |
Fall |
Core |
Non- |
Net Sales |
||||||||||||
GAAP reported |
(33) |
% |
(2) |
% |
3 |
% |
11 |
% |
2 |
% |
11 |
% |
(10) |
% |
(2) |
% |
(9) |
% |
||
Plus: Currency |
— |
% |
— |
% |
1 |
% |
2 |
% |
— |
% |
2 |
% |
1 |
% |
1 |
% |
1 |
% |
||
Constant |
(33) |
% |
(2) |
% |
4 |
% |
13 |
% |
2 |
% |
13 |
% |
(9) |
% |
(1) |
% |
(8) |
% |
||
Less: Acquisitions |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
20 |
% |
1 |
% |
— |
% |
1 |
% |
||
Organic constant |
(33) |
% |
(2) |
% |
4 |
% |
13 |
% |
2 |
% |
(7) |
% |
(10) |
% |
(1) |
% |
(9) |
% |
||
Nine Months Ended September 30, 2016 |
||||||||||||||||||||
Breathing |
Fire and |
Industrial |
Portable |
Fixed |
Fall |
Core |
Non- |
Net Sales |
||||||||||||
GAAP reported |
5 |
% |
12 |
% |
(8) |
% |
— |
% |
(7) |
% |
7 |
% |
— |
% |
(8) |
% |
(2) |
% |
||
Plus: Currency |
1 |
% |
1 |
% |
4 |
% |
4 |
% |
2 |
% |
4 |
% |
2 |
% |
3 |
% |
3 |
% |
||
Constant |
6 |
% |
13 |
% |
(4) |
% |
4 |
% |
(5) |
% |
11 |
% |
2 |
% |
(5) |
% |
1 |
% |
||
Less: Acquisitions |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
20 |
% |
2 |
% |
— |
% |
1 |
% |
||
Organic constant |
6 |
% |
13 |
% |
(4) |
% |
4 |
% |
(5) |
% |
(9) |
% |
— |
% |
(5) |
% |
— |
% |
Management believes that constant currency revenue growth is a useful metric for investors, as foreign currency translation can have a material impact on revenue growth trends. Constant currency revenue growth highlights ongoing business performance excluding the impact of fluctuating foreign currencies, which is outside of management's control.
Organic constant currency revenue growth is defined as constant currency revenue growth excluding Latchways' revenue results. Management believes that organic constant currency revenue growth is a useful measure for investors to provide an understanding of MSA's standalone results excluding the acquisition.
There can be no assurances that MSA's definition of constant currency revenue growth or organic constant currency revenue growth is consistent with that of other companies. As such, management believes that it is appropriate to consider revenue growth determined on a GAAP basis in addition to these non-GAAP financial measures.
MSA Safety Incorporated |
||||||||||||||||||||
Reconciliation of As Reported Financial Measures to Non-GAAP Financial Measures |
||||||||||||||||||||
Constant currency revenue growth (Unaudited) |
||||||||||||||||||||
Organic constant currency revenue growth (Unaudited) |
||||||||||||||||||||
International Segment |
||||||||||||||||||||
Three Months Ended September 30, 2016 |
||||||||||||||||||||
Breathing |
Fire and |
Industrial |
Portable |
Fixed |
Fall |
Core |
Non- |
Net Sales |
||||||||||||
GAAP reported |
12 |
% |
(15) |
% |
(5) |
% |
3 |
% |
19 |
% |
810 |
% |
25 |
% |
13 |
% |
22 |
% |
||
Plus: Currency |
— |
% |
1 |
% |
3 |
% |
2 |
% |
1 |
% |
1 |
% |
1 |
% |
— |
% |
1 |
% |
||
Constant |
12 |
% |
(14) |
% |
(2) |
% |
5 |
% |
20 |
% |
811 |
% |
26 |
% |
13 |
% |
23 |
% |
||
Less: Acquisitions |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
822 |
% |
17 |
% |
— |
% |
13 |
% |
||
Organic constant |
12 |
% |
(14) |
% |
(2) |
% |
5 |
% |
20 |
% |
(11) |
% |
9 |
% |
13 |
% |
10 |
% |
||
Nine Months Ended September 30, 2016 |
||||||||||||||||||||
Breathing |
Fire and |
Industrial |
Portable |
Fixed |
Fall |
Core |
Non- |
Net Sales |
||||||||||||
GAAP reported |
15 |
% |
(9) |
% |
(6) |
% |
4 |
% |
3 |
% |
993 |
% |
21 |
% |
(3) |
% |
15 |
% |
||
Plus: Currency |
2 |
% |
2 |
% |
5 |
% |
2 |
% |
2 |
% |
4 |
% |
2 |
% |
2 |
% |
2 |
% |
||
Constant |
17 |
% |
(7) |
% |
(1) |
% |
6 |
% |
5 |
% |
997 |
% |
23 |
% |
(1) |
% |
17 |
% |
||
Less: Acquisitions |
— |
% |
— |
% |
— |
% |
— |
% |
— |
% |
998 |
% |
16 |
% |
— |
% |
12 |
% |
||
Organic constant |
17 |
% |
(7) |
% |
(1) |
% |
6 |
% |
5 |
% |
(1) |
% |
7 |
% |
(1) |
% |
5 |
% |
Management believes that constant currency revenue growth is a useful metric for investors, as foreign currency translation can have a material impact on revenue growth trends. Constant currency revenue growth highlights ongoing business performance excluding the impact of fluctuating foreign currencies, which is outside of management's control.
Organic constant currency revenue growth is defined as constant currency revenue growth excluding Latchways' revenue results. Management believes that organic constant currency revenue growth is a useful measure for investors to provide an understanding of MSA's standalone results excluding the acquisition.
There can be no assurances that MSA's definition of constant currency revenue growth or organic constant currency revenue growth is consistent with that of other companies. As such, management believes that it is appropriate to consider revenue growth determined on a GAAP basis in addition to these non-GAAP financial measures.
MSA Safety Incorporated |
||||||||
Supplemental Segment Information (Unaudited) |
||||||||
Summary of constant currency revenue growth by segment and product group |
||||||||
Three Months Ended September 30, 2016 |
||||||||
Consolidated |
Americas |
International |
||||||
Fall Protection* |
116 |
% |
13 |
% |
811 |
% |
||
Portable Gas Detection |
10 |
% |
13 |
% |
5 |
% |
||
Fixed Gas and Flame Detection |
9 |
% |
2 |
% |
20 |
% |
||
Industrial Head Protection |
3 |
% |
4 |
% |
(2) |
% |
||
Fire and Rescue Helmets |
(10) |
% |
(2) |
% |
(14) |
% |
||
Breathing Apparatus |
(21) |
% |
(33) |
% |
12 |
% |
||
Core Sales |
2 |
% |
(9) |
% |
26 |
% |
||
Core excluding Latchways |
(4) |
% |
(10) |
% |
9 |
% |
||
Non-Core Sales |
6 |
% |
(1) |
% |
13 |
% |
||
Net Sales |
2 |
% |
(8) |
% |
23 |
% |
||
Net Sales excluding Latchways |
(3) |
% |
(9) |
% |
10 |
% |
||
Nine Months Ended September 30, 2016 |
||||||||
Consolidated |
Americas |
International |
||||||
Fall Protection* |
120 |
% |
11 |
% |
997 |
% |
||
Portable Gas Detection |
5 |
% |
4 |
% |
6 |
% |
||
Fixed Gas and Flame Detection |
(1) |
% |
(5) |
% |
5 |
% |
||
Industrial Head Protection |
(3) |
% |
(4) |
% |
(1) |
% |
||
Fire and Rescue Helmets |
— |
% |
13 |
% |
(7) |
% |
||
Breathing Apparatus |
9 |
% |
6 |
% |
17 |
% |
||
Core Sales |
9 |
% |
2 |
% |
23 |
% |
||
Core excluding Latchways |
2 |
% |
— |
% |
7 |
% |
||
Non-Core Sales |
(3) |
% |
(5) |
% |
(1) |
% |
||
Net Sales |
7 |
% |
1 |
% |
17 |
% |
||
Net Sales excluding Latchways |
1 |
% |
— |
% |
5 |
% |
||
*Fall protection growth rates include the impact from Latchways sales. |
MSA Safety Incorporated |
|||||||||||||||||||||
Reconciliation of As Reported Financial Measures to Non-GAAP Financial Measures |
|||||||||||||||||||||
Constant currency selling, general and administrative (SG&A) expense (Unaudited) |
|||||||||||||||||||||
Organic constant currency SG&A expense (Unaudited) |
|||||||||||||||||||||
(In thousands) |
|||||||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||||||
2016 |
2015 |
% |
2016 |
2015 |
% |
||||||||||||||||
GAAP reported SG&A |
$ |
72,945 |
$ |
72,727 |
— |
% |
$ |
227,856 |
$ |
231,683 |
(2) |
% |
|||||||||
Plus: Currency translation |
— |
(1,049) |
— |
(5,522) |
|||||||||||||||||
Constant currency SG&A |
$ |
72,945 |
$ |
71,678 |
2 |
% |
$ |
227,856 |
$ |
226,161 |
1 |
% |
|||||||||
Less: Acquisitions |
3,089 |
707 |
11,218 |
707 |
|||||||||||||||||
Organic constant currency |
$ |
69,856 |
$ |
70,971 |
(2) |
% |
$ |
216,638 |
$ |
225,454 |
(4) |
% |
Management believes that constant currency SG&A expense and organic constant currency SG&A expense are useful metrics for investors to measure the effectiveness of the company's cost reduction program announced in 2015. Constant currency SG&A expense highlights spending patterns excluding fluctuating foreign currencies. Organic constant currency SG&A expense highlights the impact of the Latchways acquisition. These metrics provide investors with a greater level of clarity into spending levels on a year-over-year basis. MSA's definition of this metric may not be comparable to metrics used by other companies. As such, management believes that it is appropriate to consider SG&A expense determined on a GAAP basis in addition to these non-GAAP measures.
MSA Safety Incorporated |
|||||||||||||||||||||
Reconciliation of As Reported Financial Measures to Non-GAAP Financial Measures |
|||||||||||||||||||||
Adjusted earnings (Unaudited) |
|||||||||||||||||||||
Adjusted earnings per diluted share (Unaudited) |
|||||||||||||||||||||
(In thousands, except per share amounts) |
|||||||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||||||
2016 |
2015 |
% |
2016 |
2015 |
% |
||||||||||||||||
Income from continuing operations |
$ |
25,486 |
$ |
15,712 |
62% |
$ |
67,475 |
$ |
48,750 |
38% |
|||||||||||
Tax charges associated with |
— |
— |
3,600 |
7,605 |
|||||||||||||||||
Non-deductible transaction costs |
— |
707 |
— |
707 |
|||||||||||||||||
Subtotal |
25,486 |
16,419 |
55% |
71,075 |
57,062 |
25% |
|||||||||||||||
Restructuring and other charges |
1,889 |
3,740 |
3,697 |
4,698 |
|||||||||||||||||
Self-insured legal settlements and |
20 |
708 |
315 |
1,050 |
|||||||||||||||||
Transaction and integration costs |
310 |
— |
821 |
— |
|||||||||||||||||
Asset related (gains) losses, net |
(256) |
206 |
(815) |
538 |
|||||||||||||||||
Currency exchange losses, net |
790 |
4,327 |
2,498 |
3,336 |
|||||||||||||||||
Income tax expense on |
(829) |
(3,287) |
(2,123) |
(3,300) |
|||||||||||||||||
Adjusted earnings |
27,410 |
22,113 |
24% |
75,468 |
63,384 |
19% |
|||||||||||||||
Adjusted earnings per diluted |
$ |
0.72 |
$ |
0.59 |
22% |
$ |
1.99 |
$ |
1.68 |
18% |
|||||||||||
Management believes that adjusted earnings and adjusted earnings per diluted share are useful measures for investors, as management uses these measures to internally assess the company's performance and ongoing operating trends. There can be no assurances that additional special items will not occur in future periods, nor that MSA's definition of adjusted earnings is consistent with that of other companies. As such, management believes that it is appropriate to consider both net income determined on a GAAP basis as well as adjusted earnings.
About MSA:
Established in 1914,
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 the Private Securities Litigation Reform Act of 1995. Forward-looking statements include but are not limited to all projections and anticipated levels of future performance. Forward looking statements involve risks, uncertainties and other factors that may cause our actual results to differ materially from those discussed herein. Any number of factors could cause actual results to differ materially from projections or forward looking statements, including without limitation global economic conditions, spending patterns of government agencies, competitive pressures, the impact of acquisitions and related integration activities, product liability claims, the success of new product introductions, currency exchange rate fluctuations and the risks of doing business in foreign countries. A full listing of these risks, uncertainties and other factors are detailed from time-to-time in our filings with the
Non-GAAP Financial Measures:
This earnings release includes certain non-GAAP financial measures. These financial measures include constant currency revenue growth, organic constant currency revenue growth, constant currency selling, general and administrative expense, organic constant currency selling, general and administrative expense, adjusted operating income, adjusted operating margin and adjusted earnings per diluted share. The presentation of these financial measures does not comply with U.S. generally accepted accounting principles ("GAAP"). For an explanation of these measures, together with a reconciliation to the most directly comparable GAAP financial measure, see the Reconciliation of As Reported Financial Measures to Non-GAAP Financial Measures in the financial tables section above.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/msa-announces-third-quarter-results-300353068.html
SOURCE MSA
Media Relations Contact: Mark Deasy (724) 741 - 8570; Investor Relations Contact: Kenneth Krause (724) 741 - 8534