Mine Safety Appliances: Msa Announces Third Quarter Results

The following excerpt is from the company's SEC filing.

PITTSBURGH, October 23, 2013 – MSA (NYSE: MSA), the global leader in safety products and systems that help protect facility infrastructures and people in the workplace, today announced that net sales for the third quarter of 2013 were $278 million compared with $287 million for the third quarter of 2012, a decrease of $9 million, or 3 percent. Excluding the effect of weakening currencies, sales decreased $3 million, or 1 percent. Net income for the third quarter 2013 was $20 million, or 52 cents per basic share. Excluding after-tax restructuring expense, foreign currency charges and a gain on an asset sale totaling $2 million, net income for the current quarter was $22 million or $0.57 per basic share.

“MSA’s consolidated third quarter results reflect the combined impact of product certification delays resulting from the federal government’s budget sequestration, a reduction in large order shipments and weaker than normal business conditions in mining markets around the world,” said William M. Lambert, MSA President and CEO. “Although we continue to see good growth opportunities for MSA’s global core product groups, we had a number of short-term items impact our quarterly results, including a temporary stoppage of SCBA shipments to the U.S. fire service caused by government sequestration delays in the certification process associated with new SCBA performance standards adopted by the National Fire Protection Association.”

On a geographic basis, third quarter sales in the company’s North American segment increased $1 million, or 1 percent, versus the same period of 2012. Sales of gas detection products increased $4 million on an increase in shipments to industrial markets. This increase was partially offset by a $3 million decline in shipments to military markets on a lower level of gas mask sales. Sequential quarter SCBA orders were down $9 million, due principally to sequestration related approval delays of new product.

Sales in the company’s European segment decreased $1 million, or 1 percent, when compared to the third quarter of 2012. Excluding a favorable currency translation impact of $2 million, local currency sales decreased $3 million. The decline was related to weakness in industrial markets in Russia and a lower level of invoicing to military markets in the Middle East and India regions. These declines were partially offset by strength in the fire service markets throughout Western Europe.

Sales in MSA’s International segment decreased $9 million, or 10 percent, versus the same period of 2012. Excluding an unfavorable currency translation impact of $8 million, International segment local currency sales decreased $1 million, or 1 percent, from the third quarter of 2012. Local currency industrial market sales were flat on weakness in mining markets, while fire service improvements were offset by a decline in sales to military markets.

Net income in MSA’s North American segment increased $3 million in the third quarter of 2013, primarily due to lower selling, general and administrative expenses.

Net income in MSA’s European segment increased $1 million in the third quarter of 2013, primarily due to improved product margins.

International segment net income decreased $1 million in the third quarter, primarily related to the decrease in sales partially offset by a reduction of selling, general and administrative expenses in Australia and South Africa.

The net loss reported in reconciling items increased $2 million in the third quarter of 2013. The increase in reconciling items net loss in the third quarter of 2013 reflects higher currency exchange losses and the absence of a one-time tax benefit associated with the non-cash charitable contribution of land at MSA’s corporate headquarters near Pittsburgh in the third quarter of 2012.

“While the quarterly financial results demonstrate how challenging conditions are, we continue to experience growth in MSA’s core product lines,” Mr. Lambert said. “As we head into the final quarter of the year, we remain focused on controlling SG&A and reducing manufacturing costs while continuing our investment in R&D that drives profitable growth,” he said. “I remain confident in our strategy and the soundness of our long-term goals. We will continue to drive our key initiatives across core products, throughout emerging markets and in operational excellence – initiatives that I’m confident will continue to deliver value for our shareholders, just as they have over the past three years,” Mr. Lambert concluded.

Established in 1914, MSA is the global leader in the development, manufacture and supply of safety products that protect people and facility infrastructures. Many MSA products 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 fire service, the oil, gas and petrochemical industry, construction, mining and utilities, as well as the military. Principal products include self-contained breathing apparatus, fixed gas and flame detection systems, handheld gas detection instruments, head protection products, fall protection devices and thermal imaging cameras. 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, based north of Pittsburgh in Cranberry Township, Pa., 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.

The above information was disclosed in a filing to the SEC. To see this filing in its entirety, click here. Mine Safety Appliances Company next reports earnings on October 23, 2013.

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