SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 1, 2006
MINE SAFETY APPLIANCES COMPANY
(Exact name of registrant as specified in its charter)
| Pennsylvania | 1-15579 | 25-0668780 | ||
| (State or other jurisdiction of incorporation or organization) |
(Commission File Number) | (IRS Employer Identification No.) |
| 121 Gamma Drive RIDC Industrial Park O’Hara Township Pittsburgh, Pennsylvania |
15238 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: 412-967-3000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On March 1, 2006, the Company issued a press release announcing its financial results for the quarter ended December 31, 2005. A copy of the press release is furnished herewith as Exhibit 99.1 to this report.
Item 9.01. Exhibits
| Exhibit Number |
Description | |
| 99.1 | Mine Safety Appliances Company Press Release dated March 1, 2006, announcing financial results for the quarter ended December 31, 2005. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| MINE SAFETY APPLIANCES COMPANY | ||
| (Registrant) | ||
| By | /s/ Dennis L. Zeitler | |
| Dennis L. Zeitler | ||
| Vice President - Finance | ||
Date: March 1, 2006
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EXHIBIT INDEX
| Exhibit Number |
Description | |
| 99.1 | Mine Safety Appliances Company Press Release dated March 1, 2006, announcing financial results for the quarter ended December 31, 2005. |
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Exhibit 99.1
| FROM: | MSA (Mine Safety Appliances Company) | |
| Ticker: MSA (NYSE) | ||
| Contact: Mark Deasy – (412) 967-3357 |
FOR IMMEDIATE RELEASE
MSA Announces Record Sales and Earnings for 2005
Release of Government Funding for Fire Departments
Drives Strong Quarterly Results in North America
PITTSBURGH, March 1, 2006 - MSA (NYSE: MSA) today announced that net sales for the year ended December 31, 2005 were $907.9 million compared with $852.5 million in 2004, an increase of $55.4 million, or 6 percent. Net income for the year ended December 31, 2005 improved 15 percent to $81.8 million, or $2.24 per basic share, compared with $71.0 million, or $1.91 per basic share, for 2004.
Net sales for the fourth quarter of 2005 were $241.9 million, compared with $224.9 million for the fourth quarter of 2004, an increase of $17.0 million, or 8 percent. Net income for the fourth quarter of 2005 improved 37 percent to $24.2 million, or $0.66 per basic share, compared with $17.7 million, or $.47 per basic share, for the same quarter last year.
The fourth quarter sales improvement reflects growth in the company’s North American segment, where sales increased $17.8 million, or 13 percent, led by strong shipments of self-contained breathing apparatus (SCBA). For much of the year, SCBA sales were seriously impacted by delays in government funding made available to U.S. fire departments through the Assistance to Firefighters Grant (AFG) Program. The release of the AFG funding in mid-August led to strong fourth quarter demand for SCBAs. Sales of the latest generation Evolution® 5200 Thermal Imaging Camera (TIC) to the North American fire service market also improved in the current quarter.
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In addition to improved performance in the fire service market, sales to North American industrial markets, particularly the construction and energy sectors, continued to be strong during the fourth quarter, with across-the-board growth in shipments of head protection, instrument and fall protection products. For the current quarter, combined shipments of Advanced Combat Helmets (ACH) and related communication systems were also steady, with an increase of approximately $5.7 million in communication system shipments being largely offset by a similar decline in ACH sales. Military gas mask sales in the U.S. were lower than in previous periods due to the expiration of government contracts, as previously reported.
Local currency sales generated by MSA Europe improved modestly during the current quarter, primarily in Eastern Europe, but were lower when stated in U.S. dollars reflecting the translation effects of a weaker euro. Local currency sales for MSA’s International segment were steady quarter to quarter.
Fourth quarter net income for MSA North America increased $7.2 million, or 60 percent, reflecting the previously-discussed sales growth and a continued emphasis on operating cost control. A $1.1 million improvement in fourth quarter net income achieved by MSA Europe was offset by a similar reduction in net income by the company’s International segment.
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“I am very pleased to report record sales and earnings for the fifth consecutive year,” said John T. Ryan III, MSA Chairman and CEO. “These results are particularly satisfying because all three of our geographic segments contributed with solid gains in both sales and income and also because we finished the year with a strong fourth quarter. We have long recognized that the global markets targeted by MSA International represent our greatest opportunity for growth, and our performance in that segment throughout 2005 was outstanding. Our European segment also made steady progress in sales and strong advancement in earnings, as we took advantage of sales opportunities, particularly those in Eastern Europe and Northern Europe, and of strong performance by MSA-Sordin.”
“In North America, our sales rebounded nicely in the fourth quarter, particularly in self-contained breathing apparatus shipments, as the Assistance to Firefighters Grant Program funding that was delayed for much of the year began to flow to local fire departments,” Mr. Ryan continued.
“I believe 2006 will be a transitional year. With the product, sales and organizational developments that we have put in place over the past several years, I am confident that we are well positioned to continue the momentum that we have generated in our global commercial business, which is about 85 percent of our total sales. In our military business, mostly in the U.S., we seek to fulfill the maximum opportunities that are available in a volatile market. New and early-stage projects like the U.S. Air Force breathing apparatus, the German Mask 2000 project and the MICH communications systems give us good future prospects. However, in 2006 with the U.S.
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Government decision to split evenly among three producers for one year the Advanced Combat Helmet production, and with the completion of quantity reductions in certain other contracts, we expect a significant drop in our North American military sales in the order of $60 million. Nevertheless, our goal in 2006 is to work through this one-year transition by making improvements in sales and costs in our commercial business towards an objective of still increasing global sales and operating profits over the record results of 2005. Our previously reported “Project Outlook” strategic restructuring of our North American operations, which will be mostly completed in the first quarter, and many other initiatives will be of assistance in improving our productivity toward meeting our objectives,” said Mr. Ryan. “I am proud of our team’s performance in 2005, and I believe we can come through again for MSA and its shareholders in this new year,” Mr. Ryan concluded.
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About MSA:
Established in 1914, MSA is a global leader in the development, manufacture and supply of sophisticated 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, 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 more than 30 international locations. Additional information is available on the company’s Web site at http://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 the 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 timing and market acceptance of new products, the company’s ability to fulfill order backlogs, the timing and ability to obtain military contracts, delays in obtaining raw materials, the economic environment and interest and currency exchange rates. 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. Our SEC filings are readily obtainable at no charge at www.sec.gov, as well as on a number of other commercial web sites.
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Mine Safety Appliances Company
Consolidated Condensed Statement of Income (Unaudited)
(In thousands, except earnings per share)
| Three Months Ended December 31 |
Twelve Months Ended December 31 | |||||||||||||
| 2005 | 2004 | 2005 | 2004 | |||||||||||
| Net sales |
$ | 241,861 | $ | 224,943 | $ | 907,912 | $ | 852,509 | ||||||
| Other income |
967 | 1,522 | 4,058 | 5,004 | ||||||||||
| 242,828 | 226,465 | 911,970 | 857,513 | |||||||||||
| Cost of products sold |
148,411 | 139,631 | 552,472 | 512,089 | ||||||||||
| Selling, general and administrative |
51,145 | 51,634 | 207,816 | 204,799 | ||||||||||
| Research and development |
5,072 | 6,758 | 21,928 | 22,648 | ||||||||||
| Interest |
1,542 | 1,120 | 5,484 | 3,845 | ||||||||||
| Currency exchange (gains) losses |
(222 | ) | (705 | ) | 474 | 264 | ||||||||
| 205,948 | 198,438 | 788,174 | 743,645 | |||||||||||
| Income before income taxes |
36,880 | 28,027 | 123,796 | 113,868 | ||||||||||
| Provision for income taxes |
12,703 | 10,347 | 42,013 | 42,821 | ||||||||||
| Net income |
24,177 | 17,680 | 81,783 | 71,047 | ||||||||||
| Basic earnings per share |
$ | 0.66 | $ | 0.47 | $ | 2.24 | $ | 1.91 | ||||||
| Diluted earnings per share |
$ | 0.65 | $ | 0.46 | $ | 2.19 | $ | 1.86 | ||||||
| Dividends per common share |
$ | 0.14 | $ | 0.10 | $ | 0.52 | $ | 0.37 | ||||||
| Average number of common shares outstanding (basic) |
36,620 | 37,299 | 36,560 | 37,111 | ||||||||||
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Mine Safety Appliances Company
Consolidated Condensed Balance Sheet (Unaudited)
| (In thousands) | December 31, 2005 | December 31, 2004 | ||||
| Current assets |
||||||
| Cash and cash equivalents |
$ | 44,797 | $ | 76,545 | ||
| Trade receivables, net |
169,436 | 157,824 | ||||
| Inventories |
119,731 | 124,846 | ||||
| Other current assets |
43,262 | 38,445 | ||||
| Total current assets |
377,226 | 397,660 | ||||
| Property, plant and equipment, net |
116,209 | 123,716 | ||||
| Prepaid pension cost |
140,575 | 131,496 | ||||
| Goodwill |
55,654 | 49,495 | ||||
| Other non-current assets |
35,693 | 31,743 | ||||
| Total |
725,357 | 734,110 | ||||
| Current liabilities |
||||||
| Notes payable and current portion of long-term debt |
$ | 8,808 | $ | 6,378 | ||
| Accounts payable |
40,935 | 40,705 | ||||
| Other current liabilities |
81,116 | 79,984 | ||||
| Total current liabilities |
130,859 | 127,067 | ||||
| Long-term debt |
45,834 | 54,463 | ||||
| Pension and other employee benefits |
80,656 | 83,628 | ||||
| Deferred tax liabilities |
75,511 | 76,704 | ||||
| Other non-current liabilities |
10,100 | 14,637 | ||||
| Shareholders’ equity |
382,397 | 377,611 | ||||
| 725,357 | 734,110 | |||||
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Mine Safety Appliances Company
Segment Information (Unaudited)
| (In thousands) | Three Months Ended December 31 |
Twelve Months Ended December 31 | |||||||||||
| 2005 | 2004 | 2005 | 2004 | ||||||||||
| Net Sales |
|||||||||||||
| North America |
$ | 157,557 | $ | 139,722 | $ | 575,854 | $ | 564,568 | |||||
| Europe |
49,727 | 51,217 | 187,237 | 173,012 | |||||||||
| International |
34,577 | 34,004 | 144,821 | 114,929 | |||||||||
| Total |
241,861 | 224,943 | 907,912 | 852,509 | |||||||||
| Net income from continuing operations |
|||||||||||||
| North America |
$ | 19,253 | $ | 12,054 | $ | 62,050 | $ | 55,616 | |||||
| Europe |
3,367 | 2,300 | 11,132 | 6,747 | |||||||||
| International |
1,288 | 2,963 | 9,211 | 8,485 | |||||||||
| Reconciling |
269 | 363 | (610 | ) | 199 | ||||||||
| Total |
24,177 | 17,680 | 81,783 | 71,047 | |||||||||
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