SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1994 Commission File No. 0-2504
MINE SAFETY APPLIANCES COMPANY
(Exact name of registrant as specified in its charter)
Pennsylvania 25-0668780
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
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
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
As of April 30, 1994, there were outstanding 5,936,233 shares of common stock
without par value.
PART I FINANCIAL INFORMATION
MINE SAFETY APPLIANCES COMPANY
CONSOLIDATED CONDENSED BALANCE SHEET
(Thousands of dollars, except shares data)
March 31 December 31
1994 1993
ASSETS
Current assets
Cash $ 6,873 $ 10,953
Temporary investments, at cost plus accrued interest 40,089 35,481
Accounts receivable, less allowance (1994 - $2,602;
1993 - $2,516) 82,926 81,897
Inventories:
Finished products 29,474 30,409
Work in process 18,107 20,001
Raw materials and supplies 26,421 31,044
--------- ---------
Total inventories 74,002 81,454
--------- ---------
Other current assets 15,089 14,824
--------- ---------
Total current assets 218,979 224,609
--------- ---------
Property, plant and equipment 310,086 306,691
Accumulated depreciation (156,555) (153,162)
--------- ---------
Net property 153,531 153,529
--------- ---------
Assets of discontinued business 7,245 7,175
Other assets 24,896 22,571
--------- ---------
Total other noncurrent assets 32,141 29,746
--------- ---------
TOTALS $ 404,651 $ 407,884
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes and accounts payable $ 23,345 $ 27,219
Federal, foreign, state and local income taxes 555 (3,474)
Other current liabilities 33,066 36,665
--------- ---------
Total current liabilities 56,966 60,410
--------- ---------
Long-term debt 28,512 27,476
Noncurrent liabilities (principally employee/retiree
benefits) and deferred credits 60,466 60,254
Shareholders' equity
Preferred stock, 4-1/2% cumulative - authorized
100,000 shares of $50 par value; issued 71,373
shares, callable at $52.50 per share 3,569 3,569
Second cumulative preferred voting stock - authorized
1,000,000 shares of $10 par value; none issued
Common stock - authorized 20,000,000 shares of no par
value; issued 6,713,503 (outstanding 5,953,533
and 6,011,628) 8,048 8,048
Cumulative translation adjustments (5,462) (5,749)
Retained earnings 288,451 287,286
Less treasury shares, at cost:
Preferred - 47,675 and 47,268 shares (1,545) (1,532)
Common - 759,970 and 701,875 shares (34,354) (31,878)
--------- ---------
Total shareholders' equity 258,707 259,744
--------- ---------
TOTALS $ 404,651 $ 407,884
========= =========
MINE SAFETY APPLIANCES COMPANY
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(Thousands of dollars, except earnings per share and shares outstanding)
Three Months Ended
March 31
1994 1993
Net sales $ 109,522 $ 104,863
Other income 1,432 1,106
---------- ----------
110,954 105,969
---------- ----------
Costs and expenses
Cost of products sold 70,513 67,090
Selling, general and administrative 29,587 29,941
Depreciation 4,885 3,951
Interest 608 398
Currency exchange (gains)/losses 656 (76)
---------- ----------
106,249 101,304
---------- ----------
Income before income taxes 4,705 4,665
Income taxes 2,145 2,149
---------- ----------
Net income $ 2,560 $ 2,516
========== ==========
Earnings per common share (1) $ 0.43 $ 0.41
========== ==========
Weighted average number of common
shares outstanding 5,990,946 6,101,545
========== ==========
Dividends paid on preferred stock $ 14 $ 14
========== ==========
(1) Computed after dividends paid on preferred stock. Common shares
reserved for outstanding options under the stock option and incentive
plans would have a negligible dilutive effect on earnings per common
share.
MINE SAFETY APPLIANCES COMPANY
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(Thousands of dollars)
Three Months Ended
March 31
1994 1993
OPERATING ACTIVITIES
Net income $ 2,560 $ 2,516
Depreciation 4,885 3,951
Deferred taxes,pensions, and other non-cash
charges/(credits) 465 831
Changes in operating assets and liabilities (2,267) (6,781)
Other - principally currency exchange adjustments 1,147 (2,502)
--------- ---------
Cash flow from operating activities 6,790 (1,985)
--------- ---------
INVESTING ACTIVITIES
Property additions (4,218) (4,890)
Property disposals 140 36
Acquisitions and other investing (165) (31)
--------- ---------
Cash flow from investing activities (4,243) (4,885)
--------- ---------
FINANCING ACTIVITIES
Additions to long-term debt 1,581 413
Reductions of long-term debt (742) (545)
Cash dividends (1,396) (1,418)
Purchases of company's stock (2,489) (443)
Changes in notes payable and short term debt 943 262
--------- ---------
Cash flow from financing activities (2,103) (1,731)
--------- ---------
Effect of exchange rate changes on cash 84 (1,355)
--------- ---------
Increase/(decrease) in cash and cash equivalents 528 (9,956)
Beginning cash and cash equivalents 46,434 55,409
--------- ---------
Ending cash and cash equivalents $ 46,962 $ 45,453
========= =========
Note 1 - Basis of Presentation
The accompanying unaudited consolidated condensed financial statements
include all adjustments, which are, in the opinion of management of the
registrant, necessary for a fair statement of the operating results for the
three month periods ended March 31, 1994 and 1993. These financial statements
have been prepared in accordance with the instructions to Form 10-Q and
therefore do not include all information and footnotes necessary for a fair
presentation of financial position, results of operations, and changes in cash
flows in conformity with generally accepted accounting principles.
MINE SAFETY APPLIANCES COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
The sales increase was mainly due to the inclusion of HAZCO Services, Inc.,
Dayton, Ohio, which was acquired in the last half of 1993. This acquisition
added equipment rental services to the hazardous materials/environmental
market. Commercial safety equipment sales in the U.S. were hampered by the
adverse effects of severe weather and earthquakes on customers early in the
year (which also affected MSA's operations). Such sales strengthened
considerably by the end of the quarter. Sales of gas detection and monitoring
instruments and specialty chemicals continued robust growth. Shipments of gas
masks to the U.S. military were below prior years but are expected to increase
as the year continues. International sales declined somewhat, mainly due to
continued economic weakness in Germany.
The increase in net income was due to higher U.S. sales and continued cost
control. European operations, especially Germany, remain depressed by economic
conditions, although improvement is expected as the year goes on as a result of
restructuring. Earnings in Brazil were hurt by currency exchange effects from
the latest bout of political and economic instability. Earnings per share
benefitted from higher net income and reduced shares outstanding as a result of
the share repurchase program.
Comparative foreign currency exchange losses charged to income are as
follows:
Three Months Ended
March 31
1994 1993
(Thousands of dollars)
Transaction (gains)/losses 111 (426)
Translation (gains)/losses 545 350
---------- ----------
656 (76)
========== ==========
Currency exchange adjustments charged directly to the equity cumulative
translation adjustments account are shown below. Significant first quarter
1993 translation losses relate primarily to Germany, Italy and Britain.
Three Months Ended
March 31
1994 1993
(Thousands of dollars)
Translation (gains)/losses (287) 3,443
At their meeting on April 27, 1994, the Board of Directors renewed an
authorization for the company to repurchase up to 300,000 shares of its common
stock from time to time in private transactions and on the over-the-counter
market. The shares repurchased will be used for employee stock options and
awards and other general business purposes. The timing and amount of the
company's purchases will depend upon price and availability of shares.
Available credit facilities along with internal cash resources are
adequate to provide for ensuing capital requirements. The company's financial
position and liquidity continue to be adequate. The current ratio and term
debt in relation to capital as of March 31, 1994 were 3.8 and 11.0%,
respectively, as compared to 3.7 and 11.0% at December 31, 1993.
PART II OTHER INFORMATION
MINE SAFETY APPLIANCES COMPANY
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
March 31, 1994.
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.
MINE SAFETY APPLIANCES COMPANY
Date: May 10, 1994 By S/James E. Herald
James E. Herald
Vice President - Finance;
Principal Financial and
Accounting Officer
