Global Safety Equipment Manufacturer Achieves Record Result from Continuing
Operations
PITTSBURGH, Nov. 3 /PRNewswire-FirstCall/ -- Continued demand for
respiratory protection products in U.S. military, homeland security, and fire
service markets led to record third quarter and year-to-date earnings from
continuing operations for Mine Safety Appliances Company (Amex: MSA).
Net sales for the third quarter of 2003 were $171,927,000, compared with
$143,398,000 for the third quarter of 2002, an increase of 20 percent. Net
income for the third quarter was $24,540,000, or $2.00 per share, compared
with $5,793,000, or 47 cents per share, for the same quarter last year.
Net sales for the nine months ended September 30, 2003 were $508,257,000,
compared with $413,318,000 in 2002, an increase of 23 percent. Net income for
the nine months ended September 30, 2003 was $50,018,000, or $4.09 per share,
compared with $23,261,000, or $1.91 per share, for the same period last year.
Net income from continuing operations for the third quarter of 2003 was
$10,984,000, or 89 cents per share, compared with $5,323,000, or 43 cents per
share, for the same quarter last year, an increase of 106 percent. Net income
from continuing operations for the nine months ended September 30, 2003 was
$33,675,000, or $2.75 per share, compared with $20,944,000, or $1.72 per
share, for the same period last year, an increase of 61 percent.
During September 2003, the company sold its Callery Chemical Division to
BASF. Net income for the three- and nine-month periods ended September 30,
2003 of $24,540,000 and $50,018,000, respectively, includes a $13,658,000
after-tax gain on the sale of the division.
Sales growth in the third quarter of 2003 occurred primarily in the United
States, reflecting continued strength in shipments of gas masks to military
and homeland security markets and breathing apparatus to the fire service
market. Current quarter local currency sales in Europe were somewhat lower
than in the third quarter of 2002 due to ongoing sluggishness in industrial
markets. When stated in U.S. dollars, however, European sales were flat
quarter-to-quarter on the favorable translation effect of a stronger Euro.
Local currency sales in other international markets improved when compared to
the third quarter of 2002, and also benefited from favorable currency
translation effects.
The improvement in third quarter net income from continuing operations
reflects the previously-discussed increase in safety products shipments in
North America. Net income from continuing operations in the current quarter
also included a net after-tax benefit of approximately $500,000 related to the
favorable effect of a change in the vacation vesting policy for U.S. employees
of $950,000 and the unfavorable effect of a change in standard shipping terms
on sales to U.S distributors of $450,000.
"I am very pleased to report strong quarterly results and record year-to-
date earnings by our core safety products business," said John T. Ryan III,
Chairman and CEO. "These results reflect continuing strength in the shipments
to the U.S. homeland security and fire service markets. Additionally, the
results of our international companies in markets outside of North America and
Europe have shown significant advancement this year," Mr. Ryan continued.
"Our overall success thus far in 2003 could be seen as an effective
combination of 'offense' and 'defense.' We have made fine progress in areas
and markets where there have been substantial opportunities this year, such as
those noted above. Most of those are markets on which the company has placed
emphasis in recent years. Additionally, in those areas where economic
conditions have not been favorable, we have been able to limit the shortfall
of results as compared to our plan. Manufacturing operations results,
particularly in safety products in North America, have been quite positive,"
Mr. Ryan said.
Mr. Ryan added that the outlook for the remainder of 2003 appears to be
good, but noted that maintaining the present rate of growth in sales and
earnings will be challenging. "Major factors that will impact our performance
going forward include the future funding levels in the fire service and
homeland security markets; a continuation and acceleration of economic
recovery in the U.S.; the global economic outlook, particularly in the very
sluggish western European industrial markets; and the progress on a number of
new products that are being or will be launched, including several that have
received or are awaiting approval under recent chemical and biological
protection standards," he concluded.
Certain statements contained in this release may constitute "forward-
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements involve a number of
risks, uncertainties and other factors that could cause actual results to
differ materially from expectations contained in such statements. Factors
that may materially affect financial condition and future results include:
global economic conditions; the impact of unforeseen economic and political
changes, including the threat of terrorism and its potential consequences; the
timely and successful introduction of new products; the availability of
funding in fire service and homeland security markets; the ability of third
party suppliers to provide key materials and components; liquidity; and
interest and currency exchange rates.
The results for the three-month and nine-month periods
ended September 30 are as follows.
(Note: Amounts in thousands, except earnings per share and shares
outstanding)
Three Months Ended Nine Months Ended
September 30 September 30
2003 2002 2003 2002
Net sales $171,927 $143,398 $508,257 $413,318
Other income (expense) 1,586 (232) 2,116 1,923
Cost of products sold 107,609 90,398 314,644 257,701
Selling and
administrative costs 41,761 35,621 123,076 102,874
Depreciation,
amortization
and other costs 6,434 7,642 17,975 19,862
Income from continuing
operations before
income taxes 17,709 9,505 54,678 34,804
Provision for
income taxes 6,725 4,182 21,003 13,860
Net income from
continuing operations 10,984 5,323 33,675 20,944
Net income (loss) from
discontinued operations (102) 470 2,685 2,317
Gain on sale of
discontinued operations
- after tax 13,658 -- 13,658 --
Net income 24,540 5,793 50,018 23,261
Basic earnings per share
Continuing operations .89 .43 2.75 1.72
Discontinued operations 1.11 .04 1.34 .19
Net income 2.00 .47 4.09 1.91
Diluted earnings
per share
Continuing operations .88 .43 2.72 1.70
Discontinued operations 1.09 .04 1.32 .19
Net income 1.97 .47 4.04 1.89
Average number of
common shares
outstanding (basic) 12,247,919 12,193,592 12,230,049 12,159,059
SOURCE Mine Safety Appliances Company
