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PITTSBURGH, April 27, 2015 /PRNewswire/ -- Global safety equipment manufacturer MSA Safety Incorporated (NYSE: MSA) today reported results for the first quarter of 2015.
Quarterly Highlights
- Reported revenue was $257 million, down 3 percent from the first quarter of 2014. Income from continuing operations was $9 million, or $0.25 per diluted share. Adjusted earnings were $16 million, or $0.42 per diluted share.
- While quarterly reported revenue was down 3 percent on weaker foreign currencies, local currency revenue increased 4 percent, driven by 7 percent growth in core products. Strong shipping activity of self-contained breathing apparatus (SCBA), fire helmets and fixed gas and flame detection was partially offset by weaker results in industrial head protection and portable gas detection instruments, primarily in energy markets.
- Local currency sales of SCBA increased 27 percent, driven by growth of 62 percent in North America. Global backlog of SCBA is $82 million, more than doubling from the same period a year ago.
- Products developed within the last five years drove 37 percent of quarterly core product revenue, compared to 22 percent a year ago.
Comments from Management
"Our first quarter reflected a strong uptick in SCBA shipments offset by expected weakness in products sold into energy markets," said William M. Lambert, MSA President and CEO. He noted that the company continues to see meaningful levels of order activity in its new and revolutionary G1 SCBA, which helped to offset weakness in industrial head protection and portable gas detection, driven by decreased demand in the North American energy market. "Despite the challenges we're seeing in the energy market, the 62 percent growth in SCBA in North America provides a sense of optimism as we enter the second quarter and further ramp up shipping activity against our growing backlog of business in this area," Mr. Lambert continued.
"While our first quarter results reflected anticipated weakness in foreign currencies and certain end markets, our robust SCBA backlog and continued success in Europe provides some momentum going forward. As it has in the past, our diversified geographic footprint and product portfolio continue to help us weather challenging conditions," Mr. Lambert concluded.
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MSA Safety Incorporated Condensed Consolidated Statement of Income (Unaudited) (In thousands, except earnings per share) |
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Three Months Ended |
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2015 |
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2014 |
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Net sales |
$ |
256,708 |
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$ |
265,045 |
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Other income, net |
641 |
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|
356 |
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257,349 |
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265,401 |
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Cost of products sold |
139,885 |
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|
143,230 |
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Selling, general and administrative |
81,368 |
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85,241 |
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Research and development |
10,914 |
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11,241 |
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Restructuring and other charges |
731 |
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1,900 |
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Interest expense |
2,473 |
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2,530 |
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Currency exchange (gains) losses, net |
(2,548) |
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|
352 |
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232,823 |
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244,494 |
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Income from continuing operations before income taxes |
24,526 |
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20,907 |
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Provision for income taxes |
15,384 |
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7,604 |
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Income from continuing operations |
9,142 |
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13,303 |
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Income from discontinued operations |
308 |
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|
614 |
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Net income |
9,450 |
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13,917 |
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Net loss attributable to noncontrolling interests |
232 |
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109 |
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Net income attributable to MSA Safety Incorporated |
9,682 |
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14,026 |
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Income from continuing operations |
9,316 |
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13,522 |
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Income from discontinued operations |
366 |
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|
504 |
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Net income attributable to MSA Safety Incorporated |
9,682 |
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14,026 |
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Earnings Per Share Attributable to MSA Safety Incorporated |
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Basic |
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Income from continuing operations |
$0.25 |
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$0.37 |
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Income from discontinued operations |
$0.01 |
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$0.01 |
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Net income |
$0.26 |
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$0.38 |
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Diluted |
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Income from continuing operations |
$0.25 |
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$0.36 |
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Income from discontinued operations |
$0.01 |
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$0.01 |
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Net income |
$0.26 |
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$0.37 |
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Basic shares outstanding |
37,356 |
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37,015 |
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Diluted shares outstanding |
37,849 |
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37,617 |
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MSA Safety Incorporated Condensed Consolidated Balance Sheet (Unaudited) (In thousands) |
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March 31, 2015 |
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December 31, 2014 |
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Assets |
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Cash and cash equivalents |
$ |
86,301 |
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$ |
105,998 |
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Trade receivables, net |
205,914 |
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211,440 |
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Inventories |
137,681 |
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122,954 |
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Other current assets |
70,994 |
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57,477 |
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Total current assets |
500,890 |
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497,869 |
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Property, net |
147,723 |
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151,352 |
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Prepaid pension cost |
77,142 |
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75,017 |
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Goodwill |
246,653 |
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252,520 |
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Other noncurrent assets |
285,779 |
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288,034 |
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Total assets |
1,258,187 |
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1,264,792 |
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Liabilities and shareholders' equity |
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Notes payable and current portion of long-term debt |
$ |
7,205 |
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$ |
6,700 |
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Accounts payable |
79,512 |
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70,210 |
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Other current liabilities |
163,052 |
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157,147 |
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Total current liabilities |
249,769 |
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234,057 |
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Long-term debt |
266,000 |
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245,000 |
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Pensions and other employee benefits |
162,289 |
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174,598 |
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Deferred tax liabilities |
27,094 |
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26,306 |
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Other noncurrent liabilities |
33,789 |
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46,198 |
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Total shareholders' equity |
519,246 |
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538,633 |
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Total liabilities and shareholders' equity |
1,258,187 |
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1,264,792 |
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MSA Safety Incorporated Condensed Consolidated Statement of Cash Flows (Unaudited) (In thousands) |
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Three Months Ended |
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2015 |
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2014 |
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Net income |
$ |
9,450 |
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$ |
13,917 |
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Depreciation and amortization |
6,937 |
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7,459 |
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Change in working capital |
(11,514) |
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4,588 |
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Other operating |
(21,536) |
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(16,567) |
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Cash from operations |
(16,663) |
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9,397 |
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Capital expenditures |
(7,469) |
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(7,204) |
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Cash from investing |
(7,469) |
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(7,204) |
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Change in debt |
21,553 |
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15,297 |
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Cash dividends paid |
(11,553) |
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(11,181) |
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Other financing |
(735) |
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454 |
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Cash from financing |
9,265 |
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4,570 |
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Exchange rate changes |
(4,830) |
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(816) |
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(Decrease) Increase in cash |
(19,697) |
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5,947 |
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MSA Safety Incorporated Segment Information (Unaudited) (In thousands) |
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Three Months Ended |
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2015 |
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2014 |
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Net sales |
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North America |
$ |
133,564 |
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$ |
129,521 |
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Europe |
66,013 |
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74,938 |
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International |
57,131 |
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60,586 |
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Total |
256,708 |
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265,045 |
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Net income (loss) |
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North America |
$ |
14,431 |
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$ |
14,260 |
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Europe |
(4,437) |
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3,452 |
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International |
3,662 |
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4,591 |
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Corporate |
(4,837) |
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(7,886) |
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Reconciling Items |
497 |
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(895) |
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Income from continuing operations |
9,316 |
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13,522 |
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Income from discontinued operations |
366 |
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|
504 |
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Total |
9,682 |
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14,026 |
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The Corporate segment was established on January 1, 2015 to reflect the activities of centralized functions in our corporate headquarters and to capture results in a manner that the chief operating decision maker reviews. The corporate segment primarily consists of administrative expenses and centrally-managed costs such as interest expense and foreign exchange gains or losses. Additionally, effective January 1, 2015, we changed the allocation methodology applied to Research and Development expense. The 2014 segment results have been recast to conform with current period presentation.
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MSA Safety Incorporated Supplemental Segment Information (Unaudited) Local Currency Revenue Growth |
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Three Months Ended March 31, 2015 |
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Consolidated |
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North America |
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Europe |
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International |
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Breathing Apparatus |
27 |
% |
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62 |
% |
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4 |
% |
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(9) |
% |
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Fire and Rescue Helmets |
13 |
% |
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5 |
% |
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7 |
% |
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48 |
% |
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Fixed Gas and Flame Detection |
7 |
% |
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9 |
% |
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(10) |
% |
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53 |
% |
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Fall Protection |
7 |
% |
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4 |
% |
|
33 |
% |
|
12 |
% |
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Portable Gas Detection |
(4) |
% |
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(19) |
% |
|
25 |
% |
|
14 |
% |
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Industrial Head Protection |
(7) |
% |
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(8) |
% |
|
19 |
% |
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(11) |
% |
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Core Sales |
7 |
% |
|
9 |
% |
|
3 |
% |
|
9 |
% |
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Non-Core Sales |
(9) |
% |
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(18) |
% |
|
10 |
% |
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(14) |
% |
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Net Sales |
4 |
% |
|
4 |
% |
|
4 |
% |
|
2 |
% |
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MSA Safety Incorporated Reconciliation of As Reported Financial Measures to Non-GAAP Financial Measures Adjusted Earnings / Earnings per Share (Unaudited) (In thousands, except per share amounts) |
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Three Months Ended March 31, |
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2015 |
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2014 |
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% |
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Income from continuing operations attributable to MSA Safety Incorporated |
$ 9,316 |
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$ 13,522 |
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(31.1)% |
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Nonrecurring tax charges associated with European reorganization |
7,605 |
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— |
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Income from continuing operations excluding nonrecurring tax charges |
16,921 |
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13,522 |
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25.1% |
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Foreign currency (gain) / loss |
(2,548) |
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|
352 |
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Restructuring charges |
731 |
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|
1,900 |
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Self insured legal settlements and defense costs |
86 |
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2,117 |
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Income tax benefit / (expense) on adjustments |
521 |
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(1,590) |
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Adjusted earnings |
15,711 |
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16,301 |
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(3.6)% |
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Adjusted earnings per diluted share |
$ |
0.42 |
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$ |
0.43 |
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(2.3)% |
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Management believes that adjusted earnings and adjusted earnings per share are useful measures for investors when analyzing ongoing operating trends. There can be no assurances that additional special items will not occur in future periods, nor that MSA's definition of adjusted earnings is consistent with that of other companies. As such, management believes that it is appropriate to consider both net income determined on a GAAP basis as well as adjusted earnings. Management does not use these non-GAAP financial measures for any purpose other than the reasons stated above.
About MSA:
Established in 1914, MSA Safety Incorporated 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 markets, including the oil, gas and petrochemical industry, the fire service, the construction industry, mining, and the military. The company's core products include self
contained breathing apparatus, fixed gas and flame detection systems, portable gas detection instruments, industrial head protection, fire and rescue helmets and fall protection devices. With 2014 revenues of $1.1 billion, MSA employs approximately 5,000 people worldwide. The company is headquartered north of Pittsburgh in Cranberry Township, Pa., and has manufacturing operations in the United States, Europe, Asia and Latin America. With more than 40 international locations, MSA realizes approximately half of its revenue from outside North America. For more information, visit MSA's website at www.MSAsafety.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 include but are not limited to all projections and anticipated levels of future performance. Forward looking statements involve risks, uncertainties and other factors that may cause our actual results to differ materially from those discussed herein. Any number of factors could cause actual results to differ materially from projections or forward looking statements, including without limitation global economic conditions, spending patterns of government agencies, competitive pressures, product liability claims, the success of new product introductions, currency exchange rate fluctuations and the risks of doing business in foreign countries. A full listing of these risks, uncertainties and other factors are detailed from time-to-time in our filings with the United States Securities and Exchange Commission ("SEC"), including our most recent Form 10-K filed on February 25, 2015. 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 its own investor relations website at
http://investors.MSAsafety.com
. MSA undertakes no duty to publicly update any forward looking statements contained herein, except as required by law.
Non-GAAP Financial Measures
This earnings release includes certain non-GAAP financial measures. These financial measures include adjusted earnings and adjusted earnings per diluted share. The presentation of these financial measures does not comply with U.S. generally accepted accounting principles ("GAAP"). For an explanation of these measures, together with a reconciliation to the most directly comparable GAAP financial measure, see the Reconciliation of As Reported Financial Measures to Non-GAAP Financial Measures in the financial tables section above.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/msa-announces-first-quarter-results-300072868.html
SOURCE MSA