MSA Announces First Quarter Results
Quarterly Highlights
- Reported revenue was
$257 million , down 3 percent from the first quarter of 2014. Income from continuing operations was$9 million , or$0.25 per diluted share. Adjusted earnings were$16 million , or$0.42 per diluted share. - While quarterly reported revenue was down 3 percent on weaker foreign currencies, local currency revenue increased 4 percent, driven by 7 percent growth in core products. Strong shipping activity of self-contained breathing apparatus (SCBA), fire helmets and fixed gas and flame detection was partially offset by weaker results in industrial head protection and portable gas detection instruments, primarily in energy markets.
- Local currency sales of SCBA increased 27 percent, driven by growth of 62 percent in
North America . Global backlog of SCBA is$82 million , more than doubling from the same period a year ago. - Products developed within the last five years drove 37 percent of quarterly core product revenue, compared to 22 percent a year ago.
Comments from Management
"Our first quarter reflected a strong uptick in SCBA shipments offset by expected weakness in products sold into energy markets," said
"While our first quarter results reflected anticipated weakness in foreign currencies and certain end markets, our robust SCBA backlog and continued success in
MSA Safety Incorporated Condensed Consolidated Statement of Income (Unaudited) (In thousands, except earnings per share) |
|||||||
Three Months Ended |
|||||||
2015 |
2014 |
||||||
Net sales |
$ |
256,708 |
$ |
265,045 |
|||
Other income, net |
641 |
356 |
|||||
257,349 |
265,401 |
||||||
Cost of products sold |
139,885 |
143,230 |
|||||
Selling, general and administrative |
81,368 |
85,241 |
|||||
Research and development |
10,914 |
11,241 |
|||||
Restructuring and other charges |
731 |
1,900 |
|||||
Interest expense |
2,473 |
2,530 |
|||||
Currency exchange (gains) losses, net |
(2,548) |
352 |
|||||
232,823 |
244,494 |
||||||
Income from continuing operations before income taxes |
24,526 |
20,907 |
|||||
Provision for income taxes |
15,384 |
7,604 |
|||||
Income from continuing operations |
9,142 |
13,303 |
|||||
Income from discontinued operations |
308 |
614 |
|||||
Net income |
9,450 |
13,917 |
|||||
Net loss attributable to noncontrolling interests |
232 |
109 |
|||||
Net income attributable to MSA Safety Incorporated |
9,682 |
14,026 |
|||||
Income from continuing operations |
9,316 |
13,522 |
|||||
Income from discontinued operations |
366 |
504 |
|||||
Net income attributable to MSA Safety Incorporated |
9,682 |
14,026 |
|||||
Earnings Per Share Attributable to MSA Safety Incorporated |
|||||||
Basic |
|||||||
Income from continuing operations |
$0.25 |
$0.37 |
|||||
Income from discontinued operations |
$0.01 |
$0.01 |
|||||
Net income |
$0.26 |
$0.38 |
|||||
Diluted |
|||||||
Income from continuing operations |
$0.25 |
$0.36 |
|||||
Income from discontinued operations |
$0.01 |
$0.01 |
|||||
Net income |
$0.26 |
$0.37 |
|||||
Basic shares outstanding |
37,356 |
37,015 |
|||||
Diluted shares outstanding |
37,849 |
37,617 |
MSA Safety Incorporated Condensed Consolidated Balance Sheet (Unaudited) (In thousands) |
|||||||
March 31, 2015 |
December 31, 2014 |
||||||
Assets |
|||||||
Cash and cash equivalents |
$ |
86,301 |
$ |
105,998 |
|||
Trade receivables, net |
205,914 |
211,440 |
|||||
Inventories |
137,681 |
122,954 |
|||||
Other current assets |
70,994 |
57,477 |
|||||
Total current assets |
500,890 |
497,869 |
|||||
Property, net |
147,723 |
151,352 |
|||||
Prepaid pension cost |
77,142 |
75,017 |
|||||
Goodwill |
246,653 |
252,520 |
|||||
Other noncurrent assets |
285,779 |
288,034 |
|||||
Total assets |
1,258,187 |
1,264,792 |
|||||
Liabilities and shareholders' equity |
|||||||
Notes payable and current portion of long-term debt |
$ |
7,205 |
$ |
6,700 |
|||
Accounts payable |
79,512 |
70,210 |
|||||
Other current liabilities |
163,052 |
157,147 |
|||||
Total current liabilities |
249,769 |
234,057 |
|||||
Long-term debt |
266,000 |
245,000 |
|||||
Pensions and other employee benefits |
162,289 |
174,598 |
|||||
Deferred tax liabilities |
27,094 |
26,306 |
|||||
Other noncurrent liabilities |
33,789 |
46,198 |
|||||
Total shareholders' equity |
519,246 |
538,633 |
|||||
Total liabilities and shareholders' equity |
1,258,187 |
1,264,792 |
MSA Safety Incorporated Condensed Consolidated Statement of Cash Flows (Unaudited) (In thousands) |
|||||||
Three Months Ended |
|||||||
2015 |
2014 |
||||||
Net income |
$ |
9,450 |
$ |
13,917 |
|||
Depreciation and amortization |
6,937 |
7,459 |
|||||
Change in working capital |
(11,514) |
4,588 |
|||||
Other operating |
(21,536) |
(16,567) |
|||||
Cash from operations |
(16,663) |
9,397 |
|||||
Capital expenditures |
(7,469) |
(7,204) |
|||||
Cash from investing |
(7,469) |
(7,204) |
|||||
Change in debt |
21,553 |
15,297 |
|||||
Cash dividends paid |
(11,553) |
(11,181) |
|||||
Other financing |
(735) |
454 |
|||||
Cash from financing |
9,265 |
4,570 |
|||||
Exchange rate changes |
(4,830) |
(816) |
|||||
(Decrease) Increase in cash |
(19,697) |
5,947 |
MSA Safety Incorporated Segment Information (Unaudited) (In thousands) |
|||||||
Three Months Ended |
|||||||
2015 |
2014 |
||||||
Net sales |
|||||||
North America |
$ |
133,564 |
$ |
129,521 |
|||
Europe |
66,013 |
74,938 |
|||||
International |
57,131 |
60,586 |
|||||
Total |
256,708 |
265,045 |
|||||
Net income (loss) |
|||||||
North America |
$ |
14,431 |
$ |
14,260 |
|||
Europe |
(4,437) |
3,452 |
|||||
International |
3,662 |
4,591 |
|||||
Corporate |
(4,837) |
(7,886) |
|||||
Reconciling Items |
497 |
(895) |
|||||
Income from continuing operations |
9,316 |
13,522 |
|||||
Income from discontinued operations |
366 |
504 |
|||||
Total |
9,682 |
14,026 |
The Corporate segment was established on
MSA Safety Incorporated Supplemental Segment Information (Unaudited) Local Currency Revenue Growth |
|||||||||||
Three Months Ended March 31, 2015 |
|||||||||||
Consolidated |
North America |
Europe |
International |
||||||||
Breathing Apparatus |
27 |
% |
62 |
% |
4 |
% |
(9) |
% |
|||
Fire and Rescue Helmets |
13 |
% |
5 |
% |
7 |
% |
48 |
% |
|||
Fixed Gas and Flame Detection |
7 |
% |
9 |
% |
(10) |
% |
53 |
% |
|||
Fall Protection |
7 |
% |
4 |
% |
33 |
% |
12 |
% |
|||
Portable Gas Detection |
(4) |
% |
(19) |
% |
25 |
% |
14 |
% |
|||
Industrial Head Protection |
(7) |
% |
(8) |
% |
19 |
% |
(11) |
% |
|||
Core Sales |
7 |
% |
9 |
% |
3 |
% |
9 |
% |
|||
Non-Core Sales |
(9) |
% |
(18) |
% |
10 |
% |
(14) |
% |
|||
Net Sales |
4 |
% |
4 |
% |
4 |
% |
2 |
% |
|||
MSA Safety Incorporated Reconciliation of As Reported Financial Measures to Non-GAAP Financial Measures Adjusted Earnings / Earnings per Share (Unaudited) (In thousands, except per share amounts) |
|||||||||
Three Months Ended March 31, |
|||||||||
2015 |
2014 |
% |
|||||||
Income from continuing operations attributable to MSA Safety Incorporated |
$ 9,316 |
$ 13,522 |
(31.1)% |
||||||
Nonrecurring tax charges associated with European reorganization |
7,605 |
— |
|||||||
Income from continuing operations excluding nonrecurring tax charges |
16,921 |
13,522 |
25.1% |
||||||
Foreign currency (gain) / loss |
(2,548) |
352 |
|||||||
Restructuring charges |
731 |
1,900 |
|||||||
Self insured legal settlements and defense costs |
86 |
2,117 |
|||||||
Income tax benefit / (expense) on adjustments |
521 |
(1,590) |
|||||||
Adjusted earnings |
15,711 |
16,301 |
(3.6)% |
||||||
Adjusted earnings per diluted share |
$ |
0.42 |
$ |
0.43 |
(2.3)% |
||||
Management believes that adjusted earnings and adjusted earnings per share are useful measures for investors when analyzing 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. Management does not use these non-GAAP financial measures for any purpose other than the reasons stated above.
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, 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 adjusted earnings 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.
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SOURCE MSA
Media Relations Contact: Mark Deasy (724) 741 - 8570; Investor Relations Contact: Ken Krause (724) 741 - 8534