Company News

MSA announces fourth quarter and full year results

Published on 17 March 2010

Recession clearly affected the net income performance of MSA
MSA has announced that net sales for the year ended December 31, 2009 decreased by 20 percent
While the company may have seen the worst of the recession, the uncertain strength of the recovery will continue to present challenges for MSA throughout 2010.

MSA  has announced that net sales for the year ended December 31, 2009 were $910.0 million compared with $1,134.3 million in 2008, a decrease of $224.3 million, or 20 percent. Net income for the year ended December 31, 2009 was $43.3 million, or $1.21 per basic share, a decrease of $27.1 million, or 39 percent, compared with $70.4 million, or $1.98 per basic share, for 2008.

Net sales for the fourth quarter of 2009 were $236.1 million compared with $288.8 million for the fourth quarter of 2008, a decrease of $52.7 million, or 18 percent. Net income for the fourth quarter of 2009 was $12.7 million, or 35 cents per basic share, a decrease of $3.8 million, or 23 percent, compared with $16.5 million, or 46 cents per basic share, for the same quarter last year.

"The effects of the global recession clearly affected our sales and net income performance for the fourth quarter and for the full year," said William M. Lambert, MSA President and CEO. "After record sales in 2008, lower demand in industrial construction markets, as well as from government agencies and the military, led to a 20 percent reduction in sales for the year."

Sales in the company's North American segment decreased $55.7 million, or 35 percent, in the fourth quarter of 2009. Self-contained breathing apparatus (SCBA) sales were down $28.6 million in the current quarter. Fourth quarter of 2008 SCBA sales benefited from $28.0 million in shipments of the company's FireHawk® M7 Responder to the U.S. Air Force. Excluding shipments on this one-time contract, SCBA sales were flat quarter-to-quarter. Shipments of Advanced Combat helmets to the U.S. military and CG634 helmets to the Canadian Forces were $10.7 million and $3.5 million lower, respectively, reflecting the completion of certain contracts. Shipments of head protection and fall protection products were down $2.9 million and $1.8 million, respectively, as the effects of the economic recession reduced demand in construction and industrial markets. Instrument sales were $4.0 million lower in the current quarter, also due to reduced demand in industrial markets.

Sales in the company's European segment decreased $4.1 million, or 6 percent, in the fourth quarter of 2009. Local currency sales were down $10.8 million, or 14 percent, primarily due to lower shipments to fire service and core industrial markets in France and Germany. This decrease was partially offset by a $1.8 million increase in sales of disposable respirators, primarily in France, in response to the H1N1 flu epidemic. Currency translation effects increased fourth quarter European segment sales, when stated in U.S. dollars, by $6.7 million, primarily due to a stronger euro.

MSA's net sales for the fourth quarter of 2009 were $236.1 million compared with $288.8 million for the fourth quarter of 2008

Sales in MSA's International segment were up $7.1 million, or 12 percent, in the fourth quarter of 2009. Local currency sales decreased $2.3 million, or 3 percent. Lower local currency sales in Australia, primarily due to the economic recession, were partially offset by higher sales in Latin American and Japan. Currency translation effects increased fourth quarter International segment sales, when stated in U.S. dollars, by $9.4 million.

Net income in MSA's North American segment decreased $5.6 million, or 37 percent, in the fourth quarter of 2009. Fourth quarter 2009 net income in the North American segment includes an after-tax gain of $2.1 million on the sale of 25 acres of property in the Cranberry Woods office park. Excluding this gain, net income decreased by $7.7 million, or 51 percent, in the quarter. The decrease reflects the negative effect of the previously-discussed decrease in sales, partially offset by the positive effect of reduced operating expenses.

The European segment reported a loss of $0.7 million in the fourth quarter of 2009, compared to income of $1.8 million in the fourth quarter of 2008. Lower European segment results reflect the previously-discussed decrease in sales and the resulting decrease in gross profits.

Net income in the International segment was $1.6 million higher in the fourth quarter of 2009. The increase was primarily related to higher sales in Latin America and Japan. Currency translation effects increased current quarter International segment net income, when stated in U.S. dollars, by approximately $0.2 million.

For full year 2009, sales decreased $224.3 million. Sales in North America decreased $161.7 million, or 27 percent. The sales decline reflected the completion of certain military contracts in late 2008, as well as reduced end-user demand for personal protective equipment, particularly in the construction, oil and gas, and other industrial markets. Sales of SCBA were down $58.0 million in the current year. In 2008, SCBA shipments included $54.1 million in sales of the company's FireHawk M7 Responder to the U.S. Air Force. Excluding these shipments, SCBA sales were $3.9 million lower in the current year. Sales of Advanced Combat

Helmets to the U.S. military and CG634 helmets to Canadian Forces were down $34.9 million and $13.0 million, respectively, reflecting the completion of certain contracts. Shipments of head protection and fall protection were down $20.8 million and $8.5 million, respectively, as the effects of the economic recession reduced demand in construction and industrial markets. Shipments of instruments were $8.3 million lower in the current year, also due to reduced demand in industrial markets.

MSA's European segment sales decreased $42.1 million, or 15 percent, during 2009

European segment sales decreased $42.1 million, or 15 percent, during 2009. Local currency sales were down $19.9 million, or 7 percent, primarily due to lower military shipments of ballistic helmets and vests in France and SCBAs in Germany. Unfavorable translation effects of weaker European currencies reduced European segment sales for the year, when stated in U.S. dollars, by $22.2 million.

Sales in MSA's International segment were down $20.5 million, or 8 percent, for the year. Local currency sales were down $6.5 million, or 3 percent, primarily in Australia and Latin America due to the economic recession. Currency translation effects reduced International segment sales, when stated in U.S. dollars by $14.0 million, primarily related to the weakening of the Australian dollar, South African rand, and Brazilian real.

Net income for the year decreased $27.1 million in 2009. Net income in the North American segment was down $17.4 million, or 33 percent, primarily related to the negative effect of a 27 percent decrease in sales, partially offset by the positive effect of reduced operating expenses. North American segment net income for the current year includes a $4.4 million after-tax non-cash charge related to a voluntary retirement incentive program and a $2.1 million after-tax gain on the sale of property in the Cranberry Woods office park. Excluding these one-time items, North American segment net income was down $15.1 million, or 29 percent, in the current year. European segment net income decreased $9.7 million, or 99 percent, primarily due to the previously-discussed decrease in sales and gross margins. International segment net income was down $4.5 million, or 38 percent, primarily related to the decrease in sales.

Mr. Lambert noted that while the company may have seen the worst of the recession, the uncertain strength of the recovery will continue to present challenges for MSA throughout 2010. "High unemployment levels in North America and elsewhere, as well as growing concerns in European markets, all point to a slow and prolonged recovery in the markets we serve. Our results for 2009 benefited from the cost reduction measures we took during the year and we will remain diligent in our efforts to manage costs and working capital throughout 2010," he said.

"Looking forward, our challenges remain clear. We are committed to taking the actions necessary to strengthen gross margins and improve productivity. This need is particularly evident in Europe. Earlier this year we began a project to streamline our operating model in Europe. This multi-year project will reduce operating costs, centralize decision making and generally improve the effectiveness of our European organization. Overall, 2009 was a year in which we adopted a defensive posture and focused on cost management activities to offset the effects of the recession. With signs of an economic recovery now beginning to surface, we're shifting that focus to one of investing in those areas that will help us restore growth, build market share and provide a foundation for our long-term success," Mr. Lambert concluded.

Download PDF Version

Other news
Related links
Related news
View all news from

Browse News by

Product CategoryMonthCompany
 
CountryEvents