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MSA Announces Record First Quarter Sales
May 01, 2008 (08:05 AM EDT)
PITTSBURGH, May 1 /PRNewswire-FirstCall/ -- MSA (NYSE) today announced that net sales for the first quarter of 2008 were $266.3 million compared with $225.9 million for the first quarter of 2007, an increase of $40.4 million, or 18 percent. Net income for the first quarter of 2008 was $16.0 million, or 45 cents per basic share, compared with $16.1 million, or 45 cents per basic share, for the same quarter last year.
Sales in the company's North American segment increased $23.7 million, or 19%, in the current quarter, primarily in the fire service market. This increase reflects improved availability of fire department funding under the U.S. Federal Government Assistance to Firefighters Grant (AFG) program and the resumption of self-contained breathing apparatus (SCBA) orders that fire departments had delayed during the second half of 2007 as manufacturers and the market made the transition to new National Fire Protection Association (NFPA) SCBA performance standards. First quarter 2008 SCBA sales were up $14.8 million. Sales of thermal imaging cameras and fire helmets increased $3.9 million in the first quarter of 2008. MSA's shipments of Advanced Combat Helmets to the U.S. military and of the CG634 helmet to the Canadian Forces were $4.1 million and $4.2 million higher, respectively, in the current quarter. Continued strength in North American construction and industrial markets was reflected in sales of head protection products, which improved $1.6 million in the current quarter. These sales increases were partially offset by lower shipments of gas masks and closed-circuit breathing apparatus.
Sales in the International segment improved by $9.3 million, or 19%, in the current quarter. The sales increase was primarily in South Africa, Latin America, and Australia, where local currency sales were up $2.9 million, $2.2 million, and $1.0 million, respectively. The improvement in South Africa was due to strong growth in sales to the mining industry. Currency translation effects increased International segment sales, when stated in U.S. dollars, by approximately $4.2 million.
Sales in the European segment increased $7.3 million, or 14%, in the current quarter, reflecting the favorable currency translation effects of a stronger euro. Local currency sales in Europe were slightly lower than in the same quarter last year.
Operating income (income before taxes, currency exchange losses, interest, and restructuring and other charges) was $33.8 for the first quarter of 2008, an increase of $6.7 million, or 25%, from operating income of $27.1 million in the same quarter last year.
First quarter 2008 net income in the North American segment was $3.8 million higher than in the same quarter last year, primarily due to the previously-mentioned sales increase. Net income in the International segment was up $1.0 million, on higher sales, partially offset by higher selling expenses. European segment net income was $2.4 million lower reflecting higher selling and research and development expenses. In addition, current quarter net income in Europe includes a one-time income tax charge of $0.4 million related to a recent tax law change.
The first quarter 2008 loss of $2.8 million in reconciling items relates primarily to unrealized currency exchange losses on intercompany items that are reported at the corporate level.
"I am very pleased with our first quarter growth in sales and incoming orders for the North American fire service market," said William M. Lambert, MSA President and COO. "As we have previously reported, our sales to the North American fire service market were depressed during the latter part of 2007 as a result of delays in the availability of federal government funding to fire departments and the transition to new SCBA standards. The new standards became effective in August 2007 and many fire departments delayed their SCBA buying decisions until breathing apparatus approved under the new standard were available for evaluation. I believe that the increase in our first quarter SCBA orders indicates that we have worked through this transition period and confirms that there is strong customer interest in our new SCBA technology."
"I am also pleased with the progress that we continue to make in expanding our market reach and growing sales in our International segment and with the recent strength in our incoming orders in Europe," Mr. Lambert continued. "During the first quarter, we continued to make good progress on our Project Magellan initiative to improve the efficiency of our North American manufacturing operations and with our transformation to a more fully global company. I believe we will continue to see significant progress on these initiatives throughout the remainder of the year," Mr. Lambert concluded.
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 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 earnings per share) Three Months Ended March 31 2008 2007 Net sales $266,344 $225,939 Other income 916 401 267,260 226,340 Cost of products sold 159,992 136,770 Selling, general and administrative 66,094 56,572 Research and development 7,352 5,927 Restructuring and other charges 1,106 234 Interest 2,494 1,993 Currency exchange losses 4,094 233 241,132 201,729 Income before income taxes 26,128 24,611 Provision for income taxes 10,101 8,543 Net income 16,027 16,068 Basic earnings per share $.45 $.45 Diluted earnings per share $.44 $.44 Dividends per common share $.22 $.18 Average number of common shares outstanding (basic) 35,540 36,013 Mine Safety Appliances Company Consolidated Condensed Balance Sheet (Unaudited) (In thousands) March 31, December 31, 2008 2007 Current assets Cash and cash equivalents $67,218 $74,981 Trade receivables, net 217,899 205,737 Inventories 178,320 155,332 Other current assets 60,754 61,000 Total current assets 524,191 497,050 Property, net 136,833 130,445 Prepaid pension cost 216,325 212,304 Goodwill 86,865 87,011 Other non-current assets 98,637 89,496 Total 1,062,851 1,016,306 Current liabilities Notes payable and current portion of long-term debt $69,187 $54,676 Accounts payable 55,953 50,648 Other current liabilities 103,339 103,865 Total current liabilities 228,479 209,189 Long-term debt 103,611 103,726 Pensions and other employee benefits 133,084 126,790 Deferred tax liabilities 101,058 100,934 Other non-current liabilities 12,843 13,129 Minority interests 758 1,007 Shareholders' equity 483,018 461,531 Total 1,062,851 1,016,306 Mine Safety Appliances Company Segment Information (Unaudited) (In thousands) Three Months Ended March 31 2008 2007 Net sales North America $146,642 $122,901 Europe 60,405 53,087 International 59,297 49,951 Total 266,344 225,939 Net income North America $14,405 $10,601 Europe 251 2,614 International 4,180 3,229 Reconciling (2,809) (376) Total 16,027 16,068
Web site: http://www.msanet.com/