Exhibit 99.1
FROM: | MSA (Mine Safety Appliances Company) Ticker: MSA (NYSE) Contact: Mark Deasy – (412) 967-3357 |
FOR IMMEDIATE RELEASE
MSA Announces Record Sales and Earnings
Global Safety Equipment Manufacturer Continues Strong Performance
• | Net Sales Increase 28% | |||
• | Net Income from Continuing Operations Up 74% | |||
• | Strong Performance Continues to be Led by Military, Homeland Security and Fire Service Sales in North America |
PITTSBURGH, November 3, 2004 – MSA (NYSE: MSA) today announced that net sales for the third quarter of 2004 were $219,962,000, compared with $171,927,000 for the third quarter of 2003, an increase of $48.0 million, or 28 percent. Net income from continuing operations for the third quarter of 2004 improved 74 percent to $19,111,000, or $.51 per basic share, compared with $10,984,000, or $.30 per basic share, for the same quarter last year.
Net sales for the nine months ended September 30, 2004 were $627,566,000, compared with $508,257,000 in 2003, an increase of $119.3 million, or 23 percent. Net income from continuing operations for the nine months ended September 30, 2004 improved 58 percent to $53,367,000, or $1.44 per basic share, compared with $33,675,000, or $.91 per basic share, for the same period last year.
Including the sale of a discontinued business in September 2003, noted below, net income for the third quarter of 2004 was $19,111,000, or $.51 per basic share, compared with $24,540,000, or $.67 per basic share, for the same quarter last year. Net income for the nine months ended September 30, 2004 was $53,367,000, or $1.44 per basic share, compared with $50,018,000, or $1.36 per basic share, for the same period last year. Third quarter 2003 and year-to-date 2003 net income included income of $13,556,000, or $.37 per basic share, and $16,343,000, or $.45 per basic share, respectively, related to the Callery Chemical Division which was sold to BASF Corporation in September 2003 for a gain of $13,658,000.
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Third quarter sales growth occurred primarily in the company’s North American segment, led by strong shipments of self-contained breathing apparatus (SCBA) and thermal imaging cameras (TICs) to the fire service market, and Advanced Combat Helmets and gas masks to homeland security and military markets. The company’s broad range of sophisticated new products are selling well, assisted by higher government funding to support the fire service, homeland security and the war on terrorism.
The company continues to see strong demand for its latest generation of SCBAs and Millennium® Gas Masks, which were among the first such devices to meet new performance standards adopted by the National Fire Protection Association (NFPA) and the National Institute for Occupational Safety and Health (NIOSH) for protection against chemical, biological, radiological and nuclear (CBRN) agents. These standards are helping to provide first responders with higher levels of protection against possible terrorist attacks. Shipments of the Advanced Combat Helmet, which was recognized as one of the Greatest Inventions of 2002 by the U.S. Army, were also significantly higher during the current quarter.
MSA’s Evolution® 5000 TIC, which combines the functionality and durability required by the fire service with features and performance not found on other small format cameras, continues to be the camera of choice in the fire service market. Sales of instrument products also grew significantly on improved industrial market demand for the company’s latest generation portable instruments, such as the Solaris® Multigas Detector, which is one of the smallest and lightest four-gas monitors available today. Industrial helmet sales in North America have also been good.
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Local currency sales in the company’s European segment grew modestly during the quarter and were assisted by the acquisition of Sordin AB, a leading manufacturer of passive and electronic hearing protection devices for the industrial, law enforcement and military markets. In MSA’s International segment, local currency sales during the third quarter were somewhat higher due to improved performance in Latin America and the Asia Pacific region. When stated in U.S. dollars, reported sales in these segments also increased modestly as a result of favorable currency translation effects associated with a stronger Euro, Australian Dollar, and South African Rand.
Third quarter income growth occurred primarily in the company’s North American segment and is a result of the previously discussed sales growth. Income also improved in MSA’s European segment, primarily as a result of the Sordin acquisition. International segment income also improved on higher sales.
“Our strong performance, which continues a trend that began several years ago, is the direct result of our focus on key markets and customers, including the fire service, homeland security and the military,” said John T. Ryan III, MSA Chairman and CEO. “We have been particularly diligent in identifying promising markets and developing innovative products that meet new performance standards and anticipate end-user needs. I am particularly pleased by the diversity of our sales performance in North America where we have shown sales gains in almost every active commercial product area, including those driven by special government funding and those that are not. I believe that a heightened commitment to worker safety and a focus on homeland security throughout the world will continue to provide MSA with attractive opportunities to respond to and meet customers’ safety equipment needs across a wide range of end-user markets and applications,” Mr. Ryan said.
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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. MSA products include self-contained breathing apparatus, gas masks, gas detection instruments, head protection, respirators and thermal imaging cameras. The company also provides a broad offering of consumer and contractor safety products through retail channels. These products are marketed and sold under the MSA Safety Works brand name. MSA has manufacturing operations throughout the United States and Europe and 28 international affiliates. More information about MSA is available on the company’s Web site at www.msanet.com.
Cautionary Statement Regarding Forward-Looking Statements:
Except for historical information, the matters discussed in this press release are forward-looking statements within the meaning of the 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. 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 without limitation our most recent filing on Form 10-K, filed on March 15, 2004 and our Form S-3/A, filed on June 23, 2004. You are strongly urged to review all such filings for a more detailed discussion of such risks and uncertainties. Our 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 and shares outstanding)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30 | September 30 | |||||||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||||||
Net sales | $ | 219,962 | $ | 171,927 | $ | 627,566 | $ | 508,257 | ||||||||
Other income | 2,018 | 1,586 | 3,482 | 2,116 | ||||||||||||
Cost of products sold | 128,227 | 102,010 | 362,166 | 299,149 | ||||||||||||
Selling, general and administrative | 50,352 | 41,761 | 145,229 | 123,076 | ||||||||||||
Research and development | 5,588 | 5,599 | 15,890 | 15,495 | ||||||||||||
Depreciation and amortization | 6,647 | 5,522 | 18,228 | 16,572 | ||||||||||||
Interest | 996 | 1,033 | 2,725 | 3,325 | ||||||||||||
Currency exchange loss (gain) | (951 | ) | (121 | ) | 969 | (1,922 | ) | |||||||||
Income from continuing operations before income taxes | 31,121 | 17,709 | 85,841 | 54,678 | ||||||||||||
Provision for income taxes | 12,010 | 6,725 | 32,474 | 21,003 | ||||||||||||
Net income from continuing operations | 19,111 | 10,984 | 53,367 | 33,675 | ||||||||||||
Net income from discontinued operations | (102 | ) | 2,685 | |||||||||||||
Gain on sale of discontinued operations – after tax | 13,658 | 13,658 | ||||||||||||||
Net income | 19,111 | 24,540 | 53,367 | 50,018 | ||||||||||||
Basic earnings per share | ||||||||||||||||
Continuing operations | .51 | .30 | 1.44 | .91 | ||||||||||||
Discontinued operations | .37 | .45 | ||||||||||||||
Net income | .51 | .67 | 1.44 | 1.36 | ||||||||||||
Diluted earnings per share | ||||||||||||||||
Continuing operations | .50 | .29 | 1.40 | .91 | ||||||||||||
Discontinued operations | .36 | .44 | ||||||||||||||
Net income | .50 | .65 | 1.40 | 1.35 | ||||||||||||
Average number of common shares outstanding (basic) | 37,126,586 | 36,743,757 | 37,048,383 | 36,690,147 |
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Mine Safety Appliances Company
Consolidated Condensed Balance Sheet (Unaudited)
(In thousands) | September 30, 2004 | December 31, 2003 | ||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 62,210 | $ | 73,244 | ||||
Trade receivables, net | 160,565 | 129,900 | ||||||
Inventories | 112,396 | 90,103 | ||||||
Other current assets | 33,961 | 30,995 | ||||||
Total current assets | 369,132 | 324,242 | ||||||
Property, plant and equipment, net | 120,936 | 120,560 | ||||||
Prepaid pension cost | 130,243 | 121,290 | ||||||
Goodwill | 48,142 | 44,810 | ||||||
Other non-current assets | 31,408 | 32,983 | ||||||
Total | 699,861 | 643,885 | ||||||
Current liabilities | ||||||||
Notes payable and current portion of long-term debt | $ | 5,365 | $ | 5,666 | ||||
Accounts payable | 37,973 | 40,029 | ||||||
Other current liabilities | 82,242 | 69,020 | ||||||
Total current liabilities | 125,580 | 114,715 | ||||||
Long-term debt | 59,911 | 59,915 | ||||||
Pension and other employee benefits | 76,189 | 74,808 | ||||||
Deferred tax liabilities | 75,639 | 70,845 | ||||||
Other non-current liabilities | 13,157 | 15,744 | ||||||
Shareholders’ equity | 349,385 | 307,858 | ||||||
699,861 | 643,885 | |||||||
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Mine Safety Appliances Company
Segment Information (Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
(In thousands) | September 30 | September 30 | ||||||||||||||
| 2004 | 2003 | 2004 | 2003 | ||||||||||||
Net Sales | ||||||||||||||||
North America | $ | 151,197 | $ | 112,889 | $ | 424,846 | $ | 331,054 | ||||||||
Europe | 40,739 | 34,890 | 121,795 | 106,164 | ||||||||||||
International | 28,026 | 24,148 | 80,925 | 71,039 | ||||||||||||
Total | 219,962 | 171,927 | 627,566 | 508,257 | ||||||||||||
Net income from continuing operations | ||||||||||||||||
North America | $ | 16,022 | $ | 9,636 | $ | 44,492 | $ | 26,681 | ||||||||
Europe | 1,304 | 686 | 4,447 | 2,750 | ||||||||||||
International | 2,230 | 919 | 5,522 | 3,792 | ||||||||||||
Reconciling | (445 | ) | (257 | ) | (1,094 | ) | 452 | |||||||||
19,111 | 10,984 | 53,367 | 33,675 | |||||||||||||
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