UNITED STATES
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): July 24, 2013
MINE SAFETY APPLIANCES COMPANY
(Exact name of registrant as specified in its charter)
| Pennsylvania | 1-15579 | 25-0668780 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification Number) |
| 1000 Cranberry Woods Drive Cranberry Township, Pennsylvania |
16066-5207 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: 724-776-8600
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 July 24, 2013, the Company issued a press release announcing its financial results for the quarter ended June 30, 2013. A copy of the press release is furnished herewith as Exhibit 99.1 to this report.
| Item 9.01 | Financial Statements and Exhibits |
| (d) | Exhibits |
| 99.1 | Mine Safety Appliances Company Press Release dated July 24, 2013, announcing financial results for the quarter ended June 30, 2013. |
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SIGNATURE
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 hereunto duly authorized.
| MINE SAFETY APPLIANCES COMPANY | ||
| (Registrant) | ||
| By | /s/ Dennis L. Zeitler | |
| Dennis L. Zeitler | ||
| Senior Vice President - Finance | ||
Date: July 24, 2013
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EXHIBIT INDEX
| Exhibit |
Description | |
| 99.1 | Mine Safety Appliances Company Press Release dated July 24, 2013, announcing financial results for the quarter ended June 30, 2013. | |
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Exhibit 99.1
| FROM: | MSA (Mine Safety Appliances Company) | |
| Ticker: MSA (NYSE) | ||
| Contact: Mark Deasy – (724) 741-8570 | ||
| FOR IMMEDIATE RELEASE | ||
MSA Announces Record Continuing Sales and Operating Income
| • | Continuing Revenue Increases 4.5% |
| • | Operating Income Improves 16% |
PITTSBURGH, July 24, 2013 – MSA (NYSE: MSA) today announced that net sales for the second quarter of 2013 were $300 million compared with $295 million for the second quarter of 2012, an increase of $5 million, or 2 percent. Excluding the effect of weakening currencies and the company’s second quarter 2012 divestiture of its North American ballistic helmet business, net sales were a record, increasing $13 million, or 4.5 percent. Net income for the second quarter 2013 was $24 million, or $0.65 per basic share, a decrease of $4 million, or 14 percent, compared with $28 million, or $0.76 per basic share, for the same period last year. Excluding after-tax restructuring expenses and foreign currency charges totaling $2 million, net income was $26 million, or $0.71 per basic share. Furthermore, excluding $5 million of after-tax income from asset sales in the second quarter of 2012, the company’s pro-forma net income this quarter was a record.
“MSA’s consolidated second quarter results demonstrate continued success in executing our corporate strategy, a key element of which is driving global demand for the company’s core products,” said William M. Lambert, MSA President and CEO.
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“When you exclude the impact of weakening foreign currencies, our quarterly revenue from MSA’s global core product groups – which include Head Protection, Fall Protection, Portable Gas Detection, Fixed Gas and Flame Detection, and Self-Contained Breathing Apparatus (SCBA) – increased 11 percent.” Mr. Lambert added that the company continued to see favorable results from its efforts to manage manufacturing costs and improve product mix. For the current quarter, gross profit margins improved 250 basis points helping to drive operating income improvement of 16 percent when compared to the second quarter of 2012.
On a geographic basis, second quarter sales in the company’s North American segment increased $7 million, or 5 percent, versus the same period of 2012. Excluding the impact of the ballistic helmet divestiture in the second quarter of 2012, North American segment sales increased $12 million, or 8 percent, when compared to the same period of 2012. Sales of fixed gas and flame detection instruments, portable gas detection instruments and breathing apparatus increased $8 million, $4 million and $3 million, respectively, on higher shipments to the industrial and fire service markets. These increases were partially offset by a $2 million decrease in gas mask sales to the military.
Sales in the company’s European segment decreased $1 million, or 1 percent, when compared to the second quarter of 2012. Excluding a favorable currency translation impact of $1 million, local currency sales decreased $2 million. The decline was related to weakness in the fire service and military markets, notably in France and Italy, partially offset by strength in industrial markets throughout Europe.
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Sales in MSA’s International segment decreased $1 million, or 2 percent, versus the same period of 2012. Excluding an unfavorable currency translation impact of $4 million, International segment local currency sales increased $3 million, or 4 percent, from the second quarter of 2012. Local currency sales of portable gas detection instruments, fall protection products and fixed gas and flame detection instruments to industrial markets increased $2 million, $1 million and $1 million, respectively. These improvements were partially offset by declines across a range of other product groups.
Net income in MSA’s North American segment increased $1 million in the second quarter of 2013. This increase reflects improved product margins on a higher level of core product sales and a lower effective tax rate, partially offset by increased research and development costs and higher selling, general and administrative expenses.
Net income in MSA’s European segment decreased $0.4 million in the second quarter of 2013, reflecting increased restructuring charges, partially offset by decreased selling, general and administrative expenses.
International segment net income increased $2 million in the second quarter of 2013, primarily related to an increase in core product group sales, partially offset by higher restructuring charges.
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The net loss reported in segment information reconciling items for the second quarter of 2013 was $4 million, compared to net income of $2 million in the second quarter of 2012. The decrease in reconciling items net income in the second quarter of 2013 reflects last year’s one-time gain on the sale of assets and currency exchange losses.
“Our strategic focus on developing business from MSA’s core product lines continues to generate strong results,” Mr. Lambert said. “While business conditions do remain challenging, our strategy is succeeding,” he said. “As we head into the second half of the year, our focus remains on driving demand for our core products, reducing manufacturing and operating costs, and accelerating our development of innovative safety products and instruments. We have meaningful opportunities on each of these fronts, and we will continue to advance these initiatives in ways that equally benefit our customers and our shareholders,” Mr. Lambert concluded.
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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. Many MSA products typically integrate a 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 a broad range of industries, including the oil, gas and petrochemical industry, the fire service, construction, mining and utilities, and the military. Principal products include self-contained breathing apparatus, handheld gas detection instruments, fixed gas and flame detection systems, head protection products, and fall protection devices . The company also provides a broad range of consumer and contractor safety products through a joint venture with MCR Safety. These products are marketed and sold under the Safety Works® brand. MSA has annual sales of approximately $1.2 billion, manufacturing operations in the United States, Europe, Asia and Latin America, and 42 international locations. Additional information is available on the company’s Web site at www.MSAsafety.com. Information on Safety Works products can be found at www.SafetyWorks.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 Private Securities Litigation Reform Act of 1995. 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 websites.
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Mine Safety Appliances Company
Consolidated Condensed Statement of Income (Unaudited)
(In thousands, except earnings per share)
| Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Net sales |
$ | 299,695 | $ | 294,738 | $ | 582,934 | $ | 588,223 | ||||||||
| Other income, net |
548 | 8,259 | 428 | 8,264 | ||||||||||||
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| 300,243 | 302,997 | 583,362 | 596,487 | |||||||||||||
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| Costs and expenses |
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| Cost of products sold |
166,815 | 171,612 | 325,272 | 338,106 | ||||||||||||
| Selling, general and administrative |
81,021 | 77,922 | 164,608 | 154,985 | ||||||||||||
| Research and development |
11,398 | 10,342 | 21,982 | 19,634 | ||||||||||||
| Restructuring and other charges |
2,427 | — | 2,427 | — | ||||||||||||
| Interest expense |
2,750 | 2,914 | 5,410 | 6,063 | ||||||||||||
| Currency exchange losses (gains), net |
993 | (1,192 | ) | 2,112 | 1,228 | |||||||||||
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| 265,404 | 261,598 | 521,811 | 520,016 | |||||||||||||
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| Income before income taxes |
34,839 | 41,399 | 61,551 | 76,471 | ||||||||||||
| Provision for income taxes |
10,448 | 13,120 | 17,765 | 23,870 | ||||||||||||
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| Net income |
24,391 | 28,279 | 43,786 | 52,601 | ||||||||||||
| Net income attributable to noncontrolling interests |
(342 | ) | (284 | ) | (451 | ) | (684 | ) | ||||||||
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| Net income attributable to Mine Safety Appliances Company |
24,049 | 27,995 | 43,335 | 51,917 | ||||||||||||
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| Earnings per share attributable to Mine Safety Appliances Company common shareholders |
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| Basic |
$ | 0.65 | $ | 0.76 | $ | 1.17 | $ | 1.41 | ||||||||
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| Diluted |
$ | 0.64 | $ | 0.75 | $ | 1.15 | $ | 1.39 | ||||||||
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| Dividends per common share |
$ | 0.30 | $ | 0.28 | $ | 0.58 | $ | 0.54 | ||||||||
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| Basic shares outstanding |
36,880 | 36,590 | 36,807 | 36,486 | ||||||||||||
| Diluted shares outstanding |
37,431 | 37,081 | 37,400 | 36,986 | ||||||||||||
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Mine Safety Appliances Company
Consolidated Condensed Balance Sheet (Unaudited)
(In thousands)
| June 30, 2013 |
December 31, 2012 |
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| Current assets |
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| Cash and cash equivalents |
$ | 82,413 | $ | 82,718 | ||||
| Trade receivables, net |
212,874 | 191,289 | ||||||
| Inventories |
134,019 | 136,300 | ||||||
| Other current assets |
42,941 | 53,241 | ||||||
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| Total current assets |
472,247 | 463,548 | ||||||
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| Property, net |
146,980 | 147,465 | ||||||
| Prepaid pension cost |
46,133 | 42,818 | ||||||
| Goodwill |
257,169 | 258,400 | ||||||
| Other noncurrent assets |
218,714 | 199,515 | ||||||
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| Total |
1,141,243 | 1,111,746 | ||||||
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| Current liabilities |
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| Notes payable and current portion of long-term debt |
$ | 7,020 | $ | 6,823 | ||||
| Accounts payable |
63,745 | 59,519 | ||||||
| Other current liabilities |
106,706 | 122,458 | ||||||
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| Total current liabilities |
177,471 | 188,800 | ||||||
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| Long-term debt |
293,333 | 272,333 | ||||||
| Pensions and other employee benefits |
150,920 | 151,536 | ||||||
| Deferred tax liabilities |
18,064 | 17,249 | ||||||
| Other noncurrent liabilities |
11,189 | 11,124 | ||||||
| Equity |
490,266 | 470,704 | ||||||
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| Total |
1,141,243 | 1,111,746 | ||||||
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Mine Safety Appliances Company
Consolidated Condensed Statement of Cash Flows
(In thousands)
| Six Months Ended June 30, |
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| 2013 | 2012 | |||||||
| Net income |
$ | 43,786 | $ | 52,601 | ||||
| Depreciation and amortization |
15,777 | 15,911 | ||||||
| Change in working capital |
(28,503 | ) | 4,149 | |||||
| Other operating |
(9,283 | ) | (7,632 | ) | ||||
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| Cash from operations |
21,777 | 65,029 | ||||||
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| Capital expenditures |
(16,956 | ) | (17,814 | ) | ||||
| Property disposals and other investing |
86 | 16,721 | ||||||
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| Cash from investing |
(16,870 | ) | (1,093 | ) | ||||
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| Change in debt |
21,205 | (39,714 | ) | |||||
| Cash dividends paid |
(21,533 | ) | (19,900 | ) | ||||
| Other financing |
(1,670 | ) | 1,458 | |||||
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| Cash from financing |
(1,998 | ) | (58,156 | ) | ||||
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| Exchange rate changes |
(3,214 | ) | (656 | ) | ||||
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| Increase (decrease) in cash |
(305 | ) | 5,124 | |||||
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Mine Safety Appliances Company
Segment Information (Unaudited)
(In thousands)
| Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Net sales |
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| North America |
$ | 152,315 | $ | 145,300 | $ | 288,430 | $ | 282,784 | ||||||||
| Europe |
66,643 | 67,324 | 137,642 | 139,790 | ||||||||||||
| International |
80,737 | 82,114 | 156,862 | 165,649 | ||||||||||||
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| Total |
299,695 | 294,738 | 582,934 | 588,223 | ||||||||||||
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| Net income (loss) |
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| North America |
$ | 21,009 | $ | 20,279 | $ | 37,164 | $ | 36,536 | ||||||||
| Europe |
1,707 | 2,134 | 5,336 | 7,755 | ||||||||||||
| International |
5,188 | 3,619 | 11,857 | 11,884 | ||||||||||||
| Reconciling |
(3,855 | ) | 1,963 | (11,022 | ) | (4,258 | ) | |||||||||
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| Total |
24,049 | 27,995 | 43,335 | 51,917 | ||||||||||||
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