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): October 27, 2008

 

 

MINE SAFETY APPLIANCES COMPANY

(Exact name of registrant as specified in its charter)

 

 

 

Pennsylvania		1-15579		25-0668780
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(IRS Employer Identification No.)

 

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

 

 

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))

 

 

 

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Item 2.02

Results of Operations and Financial Condition.

On October 27, 2008, the Company issued a press release announcing its financial results for the quarter ended September 30, 2008. A copy of the press release is furnished herewith as Exhibit 99.1 to this report.

 

Item 9.01.

Exhibits

 

Exhibit Number		Description
99.1		Mine Safety Appliances Company Press Release dated October 27, 2008, announcing financial results for the quarter ended September 30, 2008.

 

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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.

 

Date: October 27, 2008

 

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EXHIBIT INDEX

 

Exhibit Number		Description
99.1		Mine Safety Appliances Company Press Release dated October 27, 2008, announcing financial results for the quarter ended September 30, 2008.

 

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Exhibit 99.1

 

FROM:		MSA (Mine Safety Appliances Company)
		Ticker: MSA (NYSE)
		Contact: Mark Deasy – (412) 967-3357

FOR IMMEDIATE RELEASE

MSA Announces Record Third Quarter Sales

 

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Net Sales Increase 15 Percent

 

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European and International Sales Increase 23 Percent

 

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Net Income Increases 7 Percent

PITTSBURGH, October 27, 2008 – MSA (NYSE: MSA) today announced that net sales for the third quarter of 2008 were $285.9 million compared with $247.7 million for the third quarter of 2007, an increase of $38.2 million, or 15 percent. Net income for the third quarter of 2008 was $17.9 million, or 50 cents per basic share, an increase of $1.2 million, or 7 percent, compared with $16.7 million, or 47 cents per basic share, for the same quarter last year. Net income for the third quarter of 2007 included an after-tax gain of $6.5 million related to the sale of Cranberry Woods development property. Excluding this nonoperating gain in 2007, net income in the current quarter increased $7.7 million, or 75%.

“I am pleased to report the strongest third quarter sales in MSA history,” said William M. Lambert, MSA President and CEO. “This performance is especially satisfying in the current economic environment and is the result of our continuing focus on our core business and our ongoing efforts to expand our geographic market reach, particularly in the European and International segments. I believe that by focusing on the strengths in our core products and markets, we will continue to make significant progress during the remainder of 2008 and in future years,” he said.

 

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Sales in the company’s North American segment increased $11.1 million, or 9 percent, in the third quarter of 2008. Self-contained breathing apparatus (SCBA) sales were up $15.3 million in the current quarter. This increase was primarily due to $13.2 million in shipments of SCBAs to the U.S. Air Force during the third quarter of 2008. Sales of Advanced Combat Helmets to the U.S. military and CG634 helmets to Canadian Forces were up $2.3 million and $2.1 million, respectively. Shipments of gas masks and communication devices were down $4.1 million and $2.5 million, respectively, reflecting the completion of certain military orders.

Sales in the company’s European segment increased $14.0 million, or 24 percent, in the current quarter. Local currency sales increased $8.2 million, reflecting strong sales of SCBAs to the government in Germany and ballistic vests to the military in France. Currency translation effects increased European segment sales, when stated in U.S. dollars, by $5.8 million, reflecting the stronger euro.

Sales in MSA’s International segment improved by $13.2 million, or 22 percent, in the current quarter. The sales increase was primarily in South Africa and Latin America, where local currency sales were up $4.8 million and $4.1 million, respectively. The improvements were primarily due to strong growth in sales to the mining industry. Currency translation effects increased International segment sales, when stated in U.S. dollars, by $2.0 million.

 

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Third quarter 2008 net income in the North American segment of $10.9 million was 21 percent lower than net income of $13.8 million in the same quarter last year. As mentioned previously, North American segment net income for the third quarter of 2007 included an after-tax gain of $6.5 million on the sale of Cranberry Woods development property. Excluding this gain, North American segment net income improved 50 percent in the current quarter, reflecting higher sales and lower operating costs.

European segment net income for the third quarter of 2008 was $1.7 million compared to a loss of $0.4 million for the same quarter last year. European segment net income in the third quarters of 2008 and 2007 included one time income tax charges of $0.5 million and $1.6 million, respectively. Excluding these charges, European segment income improved $1.0 million in the current quarter, reflecting the previously-discussed sales increase.

Third quarter 2008 net income in the International segment of $4.2 million was 8 percent higher than net income of $3.9 million in the same quarter last year. The improvement was due to the previously discussed increase in sales, partially offset by higher costs associated with business expansion activities in this segment.

“During the quarter, we saw meaningful sales growth in each of our three geographic segments,” Mr. Lambert commented. “In North America, our sales growth was led by strong shipments of our latest generation Firehawk® M7 Responder SCBA to the U.S. Air Force for use by air base firefighting squads,” Mr. Lambert added. “Our sales in the European segment

 

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grew nicely across a broad range of products and our backlog continues to be strong in those markets. International segment sales growth was led by Latin America and South Africa, where we see continued strength in the mining industry.”

“Our third quarter performance reflects the broad balance of our business, both in terms of diverse product lines and markets. We continue to see strength in our core business, but this outlook is certainly subject to global economic conditions,” Mr. Lambert concluded.

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. MSA’s 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.

 

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Mine Safety Appliances Company

Consolidated Condensed Statement of Income (Unaudited)

(In thousands, except per share amounts)

 

		Three Months Ended September 30								Nine Months Ended September 30
		2008				2007				2008			2007
Net sales		$	285,941			$	247,675			$	845,447		$	722,713
Other income			1,426				11,249				3,834			12,713
			287,367				258,924				849,281			735,426
Cost of products sold			177,203				157,407				518,768			449,480
Selling, general and administrative			67,921				62,362				202,934			177,711
Research and development			9,485				7,560				26,039			20,274
Restructuring and other charges			1,045				707				3,276			3,202
Interest			2,307				2,653				7,082			6,878
Currency exchange (gains) losses			(879	)			(23	)			3,139			(1,259	)
			257,082				230,666				761,238			656,286
Income before income taxes			30,285				28,258				88,043			79,140
Provision for income taxes			12,342				11,523				34,119			29,009
Net income			17,943				16,735				53,924			50,131
Basic earnings per common share		$	0.50			$	0.47			$	1.51		$	1.40
Diluted earnings per common share		$	0.50			$	0.46			$	1.50		$	1.38
Dividends per common share		$	0.24			$	0.22			$	0.70		$	0.62
Basic shares outstanding			35,617				35,559				35,584			35,713
Diluted shares outstanding			35,961				36,159				35,990			36,294

 

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Mine Safety Appliances Company

Consolidated Condensed Balance Sheet (Unaudited)

(In thousands)

 

		September 30, 2008			December 31, 2007
Current assets
Cash and cash equivalents		$	49,877		$	74,981
Trade receivables, net			206,088			205,737
Inventories			177,778			155,332
Other current assets			78,647			61,000
Total current assets			512,390			497,050
Property, net			137,907			130,445
Prepaid pension cost			224,419			212,304
Goodwill			84,327			87,011
Other noncurrent assets			103,187			89,496
Total			1,062,230			1,016,306
Current liabilities
Notes payable and current portion of long-term debt		$	74,580		$	54,676
Accounts payable			54,587			50,648
Other current liabilities			115,713			103,865
Total current liabilities			244,880			209,189
Long-term debt			93,448			103,726
Pensions and other employee benefits			126,234			126,790
Deferred tax liabilities			100,686			100,934
Other noncurrent liabilities			11,247			13,129
Minority interests			909			1,007
Shareholders’ equity			484,826			461,531
Total			1,062,230			1,016,306

 

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Mine Safety Appliances Company

Segment Information (Unaudited)

(In thousands)

 

		Three Months Ended September 30							Nine Months Ended September 30
		2008			2007				2008				2007
Net sales
North America		$	140,819		$	129,737			$	436,143			$	384,456
Europe			72,796			58,800				210,054				167,913
International			72,326			59,138				199,250				170,344
Total			285,941			247,675				845,447				722,713
Net income
North America		$	10,914		$	13,797			$	36,833			$	34,930
Europe			1,672			(379	)			6,041				4,065
International			4,170			3,878				12,696				11,512
Reconciling			1,187			(561	)			(1,646	)			(376	)
Total			17,943			16,735				53,924				50,131

 

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