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): February 26, 2010

 

 

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))

 

 

 

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Item 2.02

Results of Operations and Financial Condition.

On February 26, 2010, the Company issued a press release announcing its financial results for the quarter and year ended December 31, 2009. 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 February 26, 2010, announcing financial results for the quarter and year ended December 31, 2009.

 

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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.

 

Date: February 26, 2010

 

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EXHIBIT INDEX

 

Exhibit Number		Description
99.1		Mine Safety Appliances Company Press Release dated February 26, 2010, announcing financial results for the quarter and year ended December 31, 2009.

 

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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 Fourth Quarter and Full Year Results

PITTSBURGH, February 26, 2010 – MSA (NYSE: MSA) today announced that net sales for the year ended December 31, 2009 were $910.0 million compared with $1,134.3 million in 2008, a decrease of $224.3 million, or 20 percent. Net income for the year ended December 31, 2009 was $43.3 million, or $1.21 per basic share, a decrease of $27.1 million, or 39 percent, compared with $70.4 million, or $1.98 per basic share, for 2008.

Net sales for the fourth quarter of 2009 were $236.1 million compared with $288.8 million for the fourth quarter of 2008, a decrease of $52.7 million, or 18 percent. Net income for the fourth quarter of 2009 was $12.7 million, or 35 cents per basic share, a decrease of $3.8 million, or 23 percent, compared with $16.5 million, or 46 cents per basic share, for the same quarter last year.

“The effects of the global recession clearly affected our sales and net income performance for the fourth quarter and for the full year,” said William M. Lambert, MSA President and CEO. “After record sales in 2008, lower demand in industrial construction markets, as well as from government agencies and the military, led to a 20 percent reduction in sales for the year.”

 

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Sales in the company’s North American segment decreased $55.7 million, or 35 percent, in the fourth quarter of 2009. Self-contained breathing apparatus (SCBA) sales were down $28.6 million in the current quarter. Fourth quarter of 2008 SCBA sales benefited from $28.0 million in shipments of the company’s FireHawk^® M7 Responder to the U.S. Air Force. Excluding shipments on this one-time contract, SCBA sales were flat quarter-to-quarter. Shipments of Advanced Combat helmets to the U.S. military and CG634 helmets to the Canadian Forces were $10.7 million and $3.5 million lower, respectively, reflecting the completion of certain contracts. Shipments of head protection and fall protection products were down $2.9 million and $1.8 million, respectively, as the effects of the economic recession reduced demand in construction and industrial markets. Instrument sales were $4.0 million lower in the current quarter, also due to reduced demand in industrial markets.

Sales in the company’s European segment decreased $4.1 million, or 6 percent, in the fourth quarter of 2009. Local currency sales were down $10.8 million, or 14 percent, primarily due to lower shipments to fire service and core industrial markets in France and Germany. This decrease was partially offset by a $1.8 million increase in sales of disposable respirators, primarily in France, in response to the H1N1 flu epidemic. Currency translation effects increased fourth quarter European segment sales, when stated in U.S. dollars, by $6.7 million, primarily due to a stronger euro.

Sales in MSA’s International segment were up $7.1 million, or 12 percent, in the fourth quarter of 2009. Local currency sales decreased $2.3 million, or 3 percent. Lower local currency sales in Australia, primarily due to the economic recession, were partially offset by higher sales in Latin American and Japan. Currency translation effects increased fourth quarter International segment sales, when stated in U.S. dollars, by $9.4 million.

 

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Net income in MSA’s North American segment decreased $5.6 million, or 37 percent, in the fourth quarter of 2009. Fourth quarter 2009 net income in the North American segment includes an after-tax gain of $2.1 million on the sale of 25 acres of property in the Cranberry Woods office park. Excluding this gain, net income decreased by $7.7 million, or 51 percent, in the quarter. The decrease reflects the negative effect of the previously-discussed decrease in sales, partially offset by the positive effect of reduced operating expenses.

The European segment reported a loss of $0.7 million in the fourth quarter of 2009, compared to income of $1.8 million in the fourth quarter of 2008. Lower European segment results reflect the previously-discussed decrease in sales and the resulting decrease in gross profits.

Net income in the International segment was $1.6 million higher in the fourth quarter of 2009. The increase was primarily related to higher sales in Latin America and Japan. Currency translation effects increased current quarter International segment net income, when stated in U.S. dollars, by approximately $0.2 million.

For full year 2009, sales decreased $224.3 million. Sales in North America decreased $161.7 million, or 27 percent. The sales decline reflected the completion of certain military contracts in late 2008, as well as reduced end-user demand for personal protective equipment, particularly in the construction, oil and gas, and other industrial markets. Sales of SCBA were down $58.0 million in the current year. In 2008, SCBA shipments included $54.1 million in

 

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sales of the company’s FireHawk M7 Responder to the U.S. Air Force. Excluding these shipments, SCBA sales were $3.9 million lower in the current year. Sales of Advanced Combat

Helmets to the U.S. military and CG634 helmets to Canadian Forces were down $34.9 million and $13.0 million, respectively, reflecting the completion of certain contracts. Shipments of head protection and fall protection were down $20.8 million and $8.5 million, respectively, as the effects of the economic recession reduced demand in construction and industrial markets. Shipments of instruments were $8.3 million lower in the current year, also due to reduced demand in industrial markets.

European segment sales decreased $42.1 million, or 15 percent, during 2009. Local currency sales were down $19.9 million, or 7 percent, primarily due to lower military shipments of ballistic helmets and vests in France and SCBAs in Germany. Unfavorable translation effects of weaker European currencies reduced European segment sales for the year, when stated in U.S. dollars, by $22.2 million.

Sales in MSA’s International segment were down $20.5 million, or 8 percent, for the year. Local currency sales were down $6.5 million, or 3 percent, primarily in Australia and Latin America due to the economic recession. Currency translation effects reduced International segment sales, when stated in U.S. dollars by $14.0 million, primarily related to the weakening of the Australian dollar, South African rand, and Brazilian real.

 

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Net income for the year decreased $27.1 million in 2009. Net income in the North American segment was down $17.4 million, or 33 percent, primarily related to the negative effect of a 27 percent decrease in sales, partially offset by the positive effect of reduced operating expenses. North American segment net income for the current year includes a $4.4 million after-tax non-cash charge related to a voluntary retirement incentive program and a $2.1 million after-tax gain on the sale of property in the Cranberry Woods office park. Excluding these one-time items, North American segment net income was down $15.1 million, or 29 percent, in the current year. European segment net income decreased $9.7 million, or 99 percent, primarily due to the previously-discussed decrease in sales and gross margins. International segment net income was down $4.5 million, or 38 percent, primarily related to the decrease in sales.

Mr. Lambert noted that while the company may have seen the worst of the recession, the uncertain strength of the recovery will continue to present challenges for MSA throughout 2010. “High unemployment levels in North America and elsewhere, as well as growing concerns in European markets, all point to a slow and prolonged recovery in the markets we serve. Our results for 2009 benefited from the cost reduction measures we took during the year and we will remain diligent in our efforts to manage costs and working capital throughout 2010,” he said.

“Looking forward, our challenges remain clear. We are committed to taking the actions necessary to strengthen gross margins and improve productivity. This need is particularly

 

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evident in Europe. Earlier this year we began a project to streamline our operating model in Europe. This multi-year project will reduce operating costs, centralize decision making and generally improve the effectiveness of our European organization. Overall, 2009 was a year in which we adopted a defensive posture and focused on cost management activities to offset the effects of the recession. With signs of an economic recovery now beginning to surface, we’re shifting that focus to one of investing in those areas that will help us restore growth, build market share and provide a foundation for our long-term success,” Mr. Lambert concluded.

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 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 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.

 

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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
		2009				2008			2009				2008
Net sales		$	236,098			$	288,835		$	909,991			$	1,134,282
Other income			4,179				1,035			5,860				5,165
			240,277				289,870			915,851				1,139,447
Cost of products sold			150,797				182,911			573,266				701,679
Selling, general and administrative			60,720				67,650			230,894				270,584
Research and development			7,376				8,981			28,781				35,020
Restructuring and other charges			1,477				660			11,378				3,936
Interest			1,638				1,841			7,080				8,923
Currency exchange (gains) losses			(583	)			3,804			(888	)			6,943
			221,425				265,847			850,511				1,027,085
Income before income taxes			18,852				24,023			65,340				112,362
Provision for income taxes			6,249				7,917			22,003				42,036
Net income			12,603				16,106			43,337				70,326
Net loss (income) attributable to noncontrolling interests			59				392			(42	)			96
Net income attributable to Mine Safety Appliances Company			12,662				16,498			43,295				70,422
Basic earnings per share		$	.35			$	.46		$	1.21			$	1.98
Diluted earnings per share		$	.35			$	.46		$	1.21			$	1.96
Dividends per common share		$	.24			$	.24		$	.96			$	.94
Basic shares outstanding			35,685				35,620			35,668				35,593
Diluted shares outstanding			35,932				35,825			35,879				35,949

 

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Mine Safety Appliances Company

Consolidated Condensed Balance Sheet (Unaudited)

(In thousands)

 

		December 31, 2009			December 31, 2008
Current assets
Cash and cash equivalents		$	61,983		$	50,894
Trade receivables, net			173,355			198,622
Inventories			123,944			159,428
Other current assets			74,743			68,831
Total current assets			434,025			477,775
Property, net			144,575			141,409
Prepaid pension cost			105,812			78,037
Goodwill			84,727			83,211
Other non-current assets			106,089			95,378
Total			875,228			875,810
Current liabilities
Notes payable and current portion of long-term debt		$	16,326		$	60,849
Accounts payable			43,487			50,126
Other current liabilities			108,637			108,712
Total current liabilities			168,450			219,687
Long-term debt			82,114			94,082
Pensions and other employee benefits			125,387			120,494
Deferred tax liabilities			44,800			36,491
Other non-current liabilities			15,077			9,931
Equity			439,400			395,125
Total			875,228			875,810

 

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Mine Safety Appliances Company

Segment Information (Unaudited)

(In thousands)

 

		Three Months Ended December 31								Twelve Months Ended December 31
		2009				2008				2009			2008
Net sales
North America		$	104,442			$	160,134			$	434,575		$	596,277
Europe			66,371				70,534				238,483			280,588
International			65,285				58,167				236,933			257,417
Total			236,098				288,835				909,991			1,134,282
Net income (loss)
North America		$	9,591			$	15,215			$	34,994		$	52,381
Europe			(716	)			1,834				121			9,762
International			2,959				1,319				7,308			11,795
Reconciling			828				(1,870	)			872			(3,516	)
Total			12,662				16,498				43,295			70,422

 

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