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): April 30, 2009

 

 

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 April 30, 2009, the Company issued a press release announcing its financial results for the quarter ended March 31, 2009. 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 April 30, 2009, announcing financial results for the quarter ended March 31, 2009.

 

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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: April 30, 2009

 

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EXHIBIT INDEX

 

Exhibit Number		Description
99.1		Mine Safety Appliances Company Press Release dated April 30, 2009, announcing financial
		results for the quarter ended March 31, 2009.

 

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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 First Quarter Results

PITTSBURGH, April 30, 2009 – MSA (NYSE: MSA) today announced that net sales for the first quarter of 2009 were $218.2 million compared with $266.3 million for the first quarter of 2008, a decrease of $48.1 million, or 18 percent. Net income for the first quarter of 2009 was $7.2 million, or 20 cents per basic share, a decrease of $8.8 million, or 55 percent, compared with $16.0 million, or 45 cents per basic share, for the same quarter last year.

“MSA’s consolidated sales in the first quarter were clearly impacted by the effects of the ongoing global recession. Compared to the first quarter of 2008, sales are down 18% with decreases in each of our three geographic segments. However, when you adjust our sales for the relative strength of the U.S. dollar compared to the first quarter of last year, our global sales are down 10% with a decline of 24% in North America and improvements of 15% in Europe and 6% in International,” said William M. Lambert, MSA President and CEO. “I was encouraged to see year-over-year growth in local currency sales among many of our International affiliates and a 14% reduction in selling, general and administrative expenses as we maintain our focus on managing operating costs throughout the company.”

Sales in the company’s North American segment decreased $35.9 million, or 24 percent, in the first quarter of 2009. The decrease generally reflects the recession’s impact on end-user demand, especially in construction, oil and gas, and other industrial markets. Sales of self-contained breathing

 

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apparatus (SCBA) were $5.4 million lower in the current quarter. However, shipments of breathing apparatus were unusually high during the first quarter of 2008 due to an increase in orders that had been delayed during the second half of 2007, as manufacturers and fire service customers made the transition to a new SCBA standards adopted by the National Fire Protection Association (NFPA). Fire service market sales of thermal imaging cameras and fire helmets were also down $5.1 million in the current quarter. First quarter 2009 sales of ballistic helmets to the U.S. military and Canadian Forces were down $6.5 million and $3.6 million, respectively, as current contracts wound down or were completed. Head protection shipments declined $5.2 million in the quarter as the effects of the economic recession reduced demand from construction and industrial distributors.

Sales in the company’s European segment were down $3.5 million, or 6 percent, in the first quarter of 2009. Local currency sales, however, increased $7.1 million. Local currency sales of ballistic helmets and gas masks improved $2.3 million and $1.1 million, respectively, on strong shipments to military and law enforcement customers in Germany and France. Local currency sales of fire helmets improved $1.7 million, primarily in France. The remainder of the local currency sales increase occurred primarily in Eastern European markets. Currency translation effects reduced European segment sales, when stated in U.S. dollars, by $10.6 million during the current quarter, reflecting a weaker euro.

Sales in MSA’s International segment were down $8.8 million, or 15 percent, in the first quarter of 2009. However, local currency sales in the International segment improved $2.9 million during the current quarter. In China, local currency sales increased $5.1 million, reflecting strong shipments of SCBAs to the Hong Kong Fire Services. In South Africa, local currency sales were up $ 2.5 million, primarily to the mining industry. These improvements were partially offset by lower local currency sales

 

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in Australia and Latin America, down $3.0 million and $1.9 million, primarily due to the economic recession. Currency translation effects reduced International segment sales for the current quarter, when stated in U.S. dollars, by $11.7 million, largely due to the weakening of the Australian dollar, South African rand, and Brazilian real.

Net income in MSA’s North American segment was down $10.9 million, or 75 percent, in the first quarter of 2009. First quarter 2009 net income in North America includes a $4.4 million after-tax non-cash charge related to a voluntary retirement incentive program that was completed in January. Excluding this one-time charge, North American segment net income declined $6.5 million in the current quarter. This decrease was primarily related to the previously-discussed decrease in sales, partially offset by reductions in operating expenses.

Net income in the European segment was $1.4 million higher in the first quarter of 2009. The increase was primarily due to a reduction in operating expenses and a lower effective tax rate. Currency translation effects decreased current quarter European segment net income, when stated in U.S. dollars, by approximately $0.2 million, due to the weakening of the euro and most other European currencies.

Net income in MSA’s International segment was down $3.0 million, or 83 percent, in the first quarter of 2009. The decrease was primarily related to the previously-discussed decrease in sales. Currency translation effects decreased current quarter International segment net income, when stated in U.S. dollars, by approximately $1.1 million, largely due to the weakening of the Australian dollar, South African rand and Brazilian real.

 

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“Following a 2008 in which we saw meaningful sales growth in each of our three geographic segments and achieved record annual sales, we knew 2009 would present a number of new challenges for MSA,” Mr. Lambert commented. “In these uncertain economic times, our global teams are closely monitoring the markets we serve and adjusting our responses to meet market realities. Late last year and throughout the first quarter, we intensified our efforts to reduce costs across MSA. During the quarter, we reduced costs in all areas of the company, while we continue to implement our long-term strategy to enhance efficiency and operating margins on a global basis.”

Mr. Lambert referenced several cost-cutting measures the company has implemented, including:

 

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A voluntary retirement incentive program in North America, implemented in the first quarter, which resulted in an 8.6% decrease in the U.S. salaried workforce. This became effective February 1. The cost of this program was $6.6 million, all of which is non-cash in nature, but is expected to provide an estimated $5 million annual savings.

 

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A pay freeze for all salaried U.S. and Canadian-based employees, saving an estimated $1.9 million this year. Additionally, the company has implemented salary restrictions globally.

 

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The elimination of overtime in factories. The company also has responded quickly to demand changes by adjusting its hourly workforce through temporary layoffs.

 

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A reduction of staffing levels in some areas of the world, such as Australia and Latin America, through restructuring activities and the implementation of short-workweek programs to further reduce costs;

 

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Restrictions on capital expenditures and discretionary spending, which went into effect late last year and remain in place on a global basis;

 

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The implementation of tighter cash-management processes and a very focused working capital improvement program, of which there are early indications of success; and

 

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The suspension of the company match portion of its retirement savings plans (401(k)), and a management salary reduction plan that cuts pay in a graduated way from 5% at the manager level up to 20% for the CEO. These combined cost reduction programs will save an estimated $2.6 million in expense this year.

“While I am pleased with the results of these actions to-date, we must continue to be diligent in our efforts to reduce costs and manage our business in ways that allow us to not only weather the current downturn, but be responsive in seizing opportunity when recovery occurs,” Mr. Lambert concluded.

About MSA:

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 global economic conditions, spending patterns of government agencies, competitive pressures, product liability claims, 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 earnings per share)

 

		Three Months Ended March 31
		2009				2008
Net sales		$	218,175			$	266,344
Other income			859				1,059
			219,034				267,403
Cost of products sold			135,198				159,992
Selling, general and administrative			56,820				66,094
Research and development			7,013				7,352
Restructuring and other charges			8,095				1,106
Interest			1,847				2,494
Currency exchange (gains) losses			(926	)			4,094
			208,047				241,132
Income before income taxes			10,987				26,271
Provision for income taxes			3,614				10,101
Net income			7,373				16,170
Less: Net income attributable to the noncontrolling interests			152				143
Net income attributable to Mine Safety Appliances Company			7,221				16,027
Basic earnings per share		$	0.20			$	0.45
Diluted earnings per share		$	0.20			$	0.44
Dividends per common share		$	0.24			$	0.22
Basic shares outstanding			35,633				35,540
Diluted shares outstanding			35,824				36,021

 

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Mine Safety Appliances Company

Consolidated Condensed Balance Sheet (Unaudited)

(In thousands)

 

		March 31 2009			December 31 2008
Current assets
Cash and cash equivalents		$	49,660		$	50,894
Trade receivables, net			175,231			198,622
Inventories			152,439			159,428
Other current assets			60,744			68,831
Total current assets			438,074			477,775
Property, net			141,128			141,409
Prepaid pension cost			75,010			78,037
Goodwill			82,305			83,211
Other non-current assets			103,124			95,378
Total			839,641			875,810
Current liabilities
Notes payable and current portion of long-term debt		$	56,325		$	60,849
Accounts payable			44,671			50,126
Other current liabilities			94,071			108,712
Total current liabilities			195,067			219,687
Long-term debt			94,111			94,082
Pensions and other employee benefits			117,618			120,494
Deferred tax liabilities			36,297			36,491
Other non-current liabilities			9,008			9,931
Shareholders’ equity			387,540			395,125
Total			839,641			875,810

 

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Mine Safety Appliances Company

Segment Information (Unaudited)

(In thousands)

 

		Three Months Ended March 31
		2009			2008
Net sales
North America		$	110,721		$	146,642
Europe			56,917			60,405
International			50,537			59,297
Total			218,175			266,344
Net income attributable to Mine Safety Appliances Company
North America		$	3,724		$	14,582
Europe			2,069			688
International			615			3,566
Reconciling			813			(2,809	)
Total			7,221			16,027

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