MSA Announces Record Third Quarter Sales
- Net Sales Increase 15 Percent
- European and International Sales Increase 23 Percent
- Net Income Increases 7 Percent
PITTSBURGH, Oct. 27 /PRNewswire-FirstCall/ -- MSA (NYSE: MSA) today announced that net sales for the third quarter of 2008 were $285.9 million compared with $247.7 million for the third quarter of 2007, an increase of $38.2 million, or 15 percent. Net income for the third quarter of 2008 was $17.9 million, or 50 cents per basic share, an increase of $1.2 million, or 7 percent, compared with $16.7 million, or 47 cents per basic share, for the same quarter last year. Net income for the third quarter of 2007 included an after-tax gain of $6.5 million related to the sale of Cranberry Woods development property. Excluding this nonoperating gain in 2007, net income in the current quarter increased $7.7 million, or 75%.
"I am pleased to report the strongest third quarter sales in MSA history," said William M. Lambert, MSA President and CEO. "This performance is especially satisfying in the current economic environment and is the result of our continuing focus on our core business and our ongoing efforts to expand our geographic market reach, particularly in the European and International segments. I believe that by focusing on the strengths in our core products and markets, we will continue to make significant progress during the remainder of 2008 and in future years," he said.
Sales in the company's North American segment increased $11.1 million, or 9 percent, in the third quarter of 2008. Self-contained breathing apparatus (SCBA) sales were up $15.3 million in the current quarter. This increase was primarily due to $13.2 million in shipments of SCBAs to the U.S. Air Force during the third quarter of 2008. Sales of Advanced Combat Helmets to the U.S. military and CG634 helmets to Canadian Forces were up $2.3 million and $2.1 million, respectively. Shipments of gas masks and communication devices were down $4.1 million and $2.5 million, respectively, reflecting the completion of certain military orders.
Sales in the company's European segment increased $14.0 million, or 24 percent, in the current quarter. Local currency sales increased $8.2 million, reflecting strong sales of SCBAs to the government in Germany and ballistic vests to the military in France. Currency translation effects increased European segment sales, when stated in U.S. dollars, by $5.8 million, reflecting the stronger euro.
Sales in MSA's International segment improved by $13.2 million, or 22 percent, in the current quarter. The sales increase was primarily in South Africa and Latin America, where local currency sales were up $4.8 million and $4.1 million, respectively. The improvements were primarily due to strong growth in sales to the mining industry. Currency translation effects increased International segment sales, when stated in U.S. dollars, by $2.0 million.
Third quarter 2008 net income in the North American segment of $10.9 million was 21 percent lower than net income of $13.8 million in the same quarter last year. As mentioned previously, North American segment net income for the third quarter of 2007 included an after-tax gain of $6.5 million on the sale of Cranberry Woods development property. Excluding this gain, North American segment net income improved 50 percent in the current quarter, reflecting higher sales and lower operating costs.
European segment net income for the third quarter of 2008 was $1.7 million compared to a loss of $0.4 million for the same quarter last year. European segment net income in the third quarters of 2008 and 2007 included one time income tax charges of $0.5 million and $1.6 million, respectively. Excluding these charges, European segment income improved $1.0 million in the current quarter, reflecting the previously-discussed sales increase.
Third quarter 2008 net income in the International segment of $4.2 million was 8 percent higher than net income of $3.9 million in the same quarter last year. The improvement was due to the previously discussed increase in sales, partially offset by higher costs associated with business expansion activities in this segment.
"During the quarter, we saw meaningful sales growth in each of our three geographic segments," Mr. Lambert commented. "In North America, our sales growth was led by strong shipments of our latest generation Firehawk(R) M7 Responder SCBA to the U.S. Air Force for use by air base firefighting squads," Mr. Lambert added. "Our sales in the European segment grew nicely across a broad range of products and our backlog continues to be strong in those markets. International segment sales growth was led by Latin America and South Africa, where we see continued strength in the mining industry."
"Our third quarter performance reflects the broad balance of our business, both in terms of diverse product lines and markets. We continue to see strength in our core business, but this outlook is certainly subject to global economic conditions," 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. MSA's 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, gas detection instruments, head protection, respirators and thermal imaging cameras. The company also provides a broad range of consumer and contractor safety products through retail channels. These products are marketed and sold under the MSA Safety Works brand. MSA has annual sales of approximately $1 billion, manufacturing operations throughout the United States and Europe, 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 spending patterns of government agencies, competitive pressures, product liability claims and our ability to collect related insurance receivables, 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
Consolidated Condensed Statement of Income (Unaudited)
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30 September 30
2008 2007 2008 2007
Net sales $285,941 $247,675 $845,447 $722,713
Other income 1,426 11,249 3,834 12,713
287,367 258,924 849,281 735,426
Cost of products sold 177,203 157,407 518,768 449,480
Selling, general and
administrative 67,921 62,362 202,934 177,711
Research and development 9,485 7,560 26,039 20,274
Restructuring and other
charges 1,045 707 3,276 3,202
Interest 2,307 2,653 7,082 6,878
Currency exchange
(gains) losses (879) (23) 3,139 (1,259)
257,082 230,666 761,238 656,286
Income before income taxes 30,285 28,258 88,043 79,140
Provision for income taxes 12,342 11,523 34,119 29,009
Net income 17,943 16,735 53,924 50,131
Basic earnings per
common share $0.50 $0.47 $1.51 $1.40
Diluted earnings per
common share $0.50 $0.46 $1.50 $1.38
Dividends per common share $0.24 $0.22 $0.70 $0.62
Basic shares outstanding 35,617 35,559 35,584 35,713
Diluted shares outstanding 35,961 36,159 35,990 36,294
Mine Safety Appliances Company
Consolidated Condensed Balance Sheet (Unaudited)
(In thousands)
September 30, December 31,
2008 2007
Current assets
Cash and cash equivalents $49,877 $74,981
Trade receivables, net 206,088 205,737
Inventories 177,778 155,332
Other current assets 78,647 61,000
Total current assets 512,390 497,050
Property, net 137,907 130,445
Prepaid pension cost 224,419 212,304
Goodwill 84,327 87,011
Other noncurrent assets 103,187 89,496
Total 1,062,230 1,016,306
Current liabilities
Notes payable and current portion of
long-term debt $74,580 $54,676
Accounts payable 54,587 50,648
Other current liabilities 115,713 103,865
Total current liabilities 244,880 209,189
Long-term debt 93,448 103,726
Pensions and other employee benefits 126,234 126,790
Deferred tax liabilities 100,686 100,934
Other noncurrent liabilities 11,247 13,129
Minority interests 909 1,007
Shareholders' equity 484,826 461,531
Total 1,062,230 1,016,306
Mine Safety Appliances Company
Segment Information (Unaudited)
(In thousands)
Three Months Ended Nine Months Ended
September 30 September 30
2008 2007 2008 2007
Net sales
North America $140,819 $129,737 $436,143 $384,456
Europe 72,796 58,800 210,054 167,913
International 72,326 59,138 199,250 170,344
Total 285,941 247,675 845,447 722,713
Net income
North America $10,914 $13,797 $36,833 $34,930
Europe 1,672 (379) 6,041 4,065
International 4,170 3,878 12,696 11,512
Reconciling 1,187 (561) (1,646) (376)
Total 17,943 16,735 53,924 50,131
SOURCE MSA
10/27/2008
CONTACT:
Mark Deasy
+1-412-967-3357
