Increasing full year sales growth outlook to mid-teens,
supported by robust double-digit sales and earnings growth in the
third quarter
PITTSBURGH, Oct. 24,
2023 /PRNewswire/ -- Global safety equipment and
solutions provider MSA Safety Incorporated (NYSE: MSA) today
reported financial results for the third quarter of 2023.
Quarterly Highlights
- Achieved quarterly net sales of $447
million, a 17% increase year-over-year, reflecting
broad-based strength across MSA's product portfolio and
regions.
- Generated GAAP operating income of $94
million, or 21.1% of sales, and adjusted operating income of
$101 million, or 22.7% of sales.
- Recorded GAAP net income of $65
million, or $1.65 per diluted
share, and adjusted earnings of $70
million, or $1.78 per diluted
share.
- Invested $13 million in capital
expenditures, repaid $68 million of
debt and deployed $18 million for
dividends to shareholders.
"During the third quarter, the MSA team continued to deliver
strong results," said Nish
Vartanian, MSA Safety Chairman and Chief Executive Officer.
"Growth was broad-based across our key product platforms and
regions, a testament to the resiliency of our business, our
differentiated safety products and solutions, and strategic
exposure to attractive end markets and long-term secular trends.
Our ability to create sustainable growth is also supported by
significant competitive advantages such as our purpose-driven
culture, best-in-class innovation and relentless focus on solving
our customers' safety challenges."
Mr. Vartanian added, "We remain encouraged by our progress and
are excited about the opportunities ahead. With our singular
mission of safety, I believe we are well-positioned to continue our
strong performance and deliver value to our shareholders in the
fourth quarter and beyond."
Financial Highlights and Balance Sheet
Financial Highlights
|
|
Three Months Ended
September 30,
|
|
|
($ millions, except per share
data)
|
|
2023
|
|
2022
|
|
% Change(a)
|
Net Sales
|
|
$
447
|
|
$
382
|
|
17 %
|
Operating
Income
|
|
94
|
|
64
|
|
46 %
|
Adjusted Operating
Income
|
|
101
|
|
75
|
|
35 %
|
Net Income
|
|
65
|
|
45
|
|
45 %
|
Diluted EPS
|
|
1.65
|
|
1.14
|
|
45 %
|
Adjusted
Earnings
|
|
70
|
|
57
|
|
23 %
|
Adjusted Diluted
EPS
|
|
1.78
|
|
1.45
|
|
23 %
|
(a) Percentage change may not calculate
exactly due to rounding.
|
Lee McChesney, MSA Safety Senior
Vice President and Chief Financial Officer, commented, "Our team's
disciplined execution and commitment to continuous improvement,
enabled by the MSA Business System, resulted in healthy margin
expansion and robust cash generation, as well as double-digit sales
growth during the third quarter. We continued to strengthen our
financial position, ending the quarter at 1.3x net leverage, an
improvement from 1.7x in the prior quarter. We enter the balance of
the year with confidence in our capacity to deliver on our
financial commitments, and based on our robust year-to-date
performance, we are increasing our sales growth outlook to the
mid-teens for the full year 2023."
Conference Call
MSA Safety will host a conference call on Wednesday, October 25, 2023 at 10:00 a.m. Eastern Time to discuss its third
quarter 2023 results and outlook. The call and an accompanying
slide presentation will be webcast at
http://investors.msasafety.com/ under the "News and Events" tab,
subheading "Events & Presentations." Investors and interested
parties can also dial into the call at 1-844-854-4415 (Toll Free) or 1-412-902-6599 (International).
When prompted, please instruct the operator to be joined into the
MSA Safety Incorporated conference call. A replay of the conference
call will be available at http://investors.msasafety.com/ shortly
after the conclusion of the presentation and will be available for
the next 90 days.
MSA Safety
Incorporated
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except per share amounts)
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
Net sales
|
$
446,728
|
|
$
381,694
|
|
$ 1,292,290
|
|
$ 1,084,699
|
Cost of products
sold
|
227,967
|
|
212,299
|
|
678,335
|
|
608,120
|
Gross profit
|
218,761
|
|
169,395
|
|
613,955
|
|
476,579
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
102,175
|
|
82,753
|
|
289,602
|
|
247,378
|
Research and
development
|
17,682
|
|
14,416
|
|
48,906
|
|
43,017
|
Restructuring
charges
|
3,285
|
|
899
|
|
8,382
|
|
3,146
|
Currency exchange
losses, net
|
1,496
|
|
2,979
|
|
8,781
|
|
4,788
|
Loss on divestiture of
MSA LLC
|
—
|
|
—
|
|
129,211
|
|
—
|
Product liability
expense
|
—
|
|
4,035
|
|
3
|
|
9,733
|
Operating
income
|
94,123
|
|
64,313
|
|
129,070
|
|
168,517
|
|
|
|
|
|
|
|
|
Interest
expense
|
12,498
|
|
5,962
|
|
37,149
|
|
14,158
|
Other income,
net
|
(6,037)
|
|
(2,359)
|
|
(15,487)
|
|
(15,121)
|
Total other expense
(income), net
|
6,461
|
|
3,603
|
|
21,662
|
|
(963)
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
87,662
|
|
60,710
|
|
107,408
|
|
169,480
|
Provision for income
taxes
|
22,406
|
|
15,804
|
|
125,235
|
|
41,339
|
Net income
(loss)
|
$ 65,256
|
|
$ 44,906
|
|
$
(17,827)
|
|
$
128,141
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share attributable to common
shareholders:
|
|
|
|
|
|
|
|
Basic
|
$
1.66
|
|
$
1.15
|
|
$
(0.46)
|
|
$
3.26
|
Diluted
|
$
1.65
|
|
$
1.14
|
|
$
(0.46)
|
|
$
3.25
|
|
|
|
|
|
|
|
|
Basic shares
outstanding
|
39,303
|
|
39,172
|
|
39,267
|
|
39,243
|
Diluted shares
outstanding
|
39,450
|
|
39,299
|
|
39,267
|
|
39,414
|
MSA Safety
Incorporated
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)
|
|
|
September 30,
2023
|
|
December 31,
2022
|
|
|
|
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
164,499
|
|
$
162,902
|
Trade receivables,
net
|
294,907
|
|
297,028
|
Inventories
|
324,077
|
|
338,316
|
Notes receivable,
insurance companies
|
—
|
|
5,931
|
Other current
assets
|
68,336
|
|
75,949
|
Total current assets
|
851,819
|
|
880,126
|
|
|
|
|
Property, plant and
equipment, net
|
205,650
|
|
207,552
|
Prepaid pension
cost
|
151,400
|
|
141,643
|
Goodwill
|
620,343
|
|
620,622
|
Intangible assets,
net
|
268,321
|
|
281,853
|
Notes receivable,
insurance companies, noncurrent
|
—
|
|
38,695
|
Insurance receivable,
noncurrent
|
—
|
|
110,300
|
Other noncurrent
assets
|
96,802
|
|
96,185
|
Total
assets
|
$
2,194,335
|
|
$
2,376,976
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
Notes payable and
current portion of long-term debt, net
|
$
26,198
|
|
$
7,387
|
Accounts
payable
|
108,554
|
|
112,532
|
Other current
liabilities
|
190,649
|
|
225,946
|
Total
current liabilities
|
325,401
|
|
345,865
|
|
|
|
|
Long-term debt,
net
|
715,814
|
|
565,445
|
Pensions and other
employee benefits
|
137,563
|
|
137,810
|
Deferred tax
liabilities
|
102,155
|
|
31,881
|
Product liability and
other noncurrent liabilities
|
44,676
|
|
372,234
|
Total shareholders'
equity
|
868,726
|
|
923,741
|
Total
liabilities and shareholders' equity
|
$
2,194,335
|
|
$
2,376,976
|
MSA Safety
Incorporated
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$ 65,256
|
|
$ 44,906
|
|
$
(17,827)
|
|
$
128,141
|
Depreciation and
amortization
|
15,504
|
|
13,797
|
|
44,965
|
|
41,883
|
Tax-effected loss on
divestiture of MSA LLC
|
—
|
|
—
|
|
199,578
|
|
—
|
Contribution on
divestiture of MSA LLC
|
—
|
|
—
|
|
(341,186)
|
|
—
|
Change in working
capital and other operating
|
44,024
|
|
5,224
|
|
48,413
|
|
(66,121)
|
Cash flow from (used
in) operating activities
|
124,784
|
|
63,927
|
|
(66,057)
|
|
103,903
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
(12,657)
|
|
(8,948)
|
|
(30,979)
|
|
(28,753)
|
Change in short-term
investments
|
—
|
|
10,113
|
|
—
|
|
24,320
|
Property disposals and
other investing
|
16
|
|
38
|
|
2,690
|
|
38
|
Cash flow (used in)
from investing activities
|
(12,641)
|
|
1,203
|
|
(28,289)
|
|
(4,395)
|
|
|
|
|
|
|
|
|
Change in
debt
|
(68,250)
|
|
(10,000)
|
|
168,648
|
|
27,000
|
Cash dividends
paid
|
(18,485)
|
|
(18,046)
|
|
(54,999)
|
|
(53,447)
|
Other
financing
|
653
|
|
1,656
|
|
(3,142)
|
|
(29,716)
|
Cash flow (used in)
from financing activities
|
(86,082)
|
|
(26,390)
|
|
110,507
|
|
(56,163)
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash, cash
equivalents and
restricted cash
|
(8,501)
|
|
(13,024)
|
|
(14,152)
|
|
(23,498)
|
|
|
|
|
|
|
|
|
Increase in cash, cash
equivalents and restricted cash
|
$ 17,560
|
|
$ 25,716
|
|
$
2,009
|
|
$ 19,847
|
MSA Safety
Incorporated
Segment Information (Unaudited)
(In thousands, except percentage amounts)
|
|
|
Americas
|
|
International
|
|
Corporate
|
|
Consolidated
|
Three Months Ended
September 30, 2023
|
|
|
|
|
|
|
|
Net sales to external
customers
|
$ 314,273
|
|
$ 132,455
|
|
$
—
|
|
$
446,728
|
Operating
income
|
|
|
|
|
|
|
94,123
|
Operating margin
%
|
|
|
|
|
|
|
21.1 %
|
Restructuring
charges
|
|
|
|
|
|
|
3,285
|
Currency exchange
losses, net
|
|
|
|
|
|
|
1,496
|
Amortization of
acquisition-related intangible
assets
|
|
|
|
|
|
|
2,315
|
Transaction costs
(a)
|
|
|
|
|
|
|
78
|
Adjusted operating
income (loss)
|
93,918
|
|
22,577
|
|
(15,198)
|
|
101,297
|
Adjusted operating
margin %
|
29.9 %
|
|
17.0 %
|
|
|
|
22.7 %
|
Depreciation and
amortization
|
|
|
|
|
|
|
13,189
|
Adjusted
EBITDA
|
103,157
|
|
26,289
|
|
(14,960)
|
|
114,486
|
Adjusted EBITDA margin
%
|
32.8 %
|
|
19.8 %
|
|
|
|
25.6 %
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2022
|
|
|
|
|
|
|
|
Net sales to external
customers
|
$ 276,082
|
|
$ 105,612
|
|
$
—
|
|
$
381,694
|
Operating
income
|
|
|
|
|
|
|
64,313
|
Operating margin
%
|
|
|
|
|
|
|
16.8 %
|
Restructuring
charges
|
|
|
|
|
|
|
899
|
Currency exchange
losses, net
|
|
|
|
|
|
|
2,979
|
Product liability
expense
|
|
|
|
|
|
|
4,035
|
Amortization of
acquisition-related intangible
assets
|
|
|
|
|
|
|
2,279
|
Transaction costs
(a)
|
|
|
|
|
|
|
620
|
Adjusted operating
income (loss)
|
75,088
|
|
8,448
|
|
(8,411)
|
|
75,125
|
Adjusted operating
margin %
|
27.2 %
|
|
8.0 %
|
|
|
|
19.7 %
|
Depreciation and
amortization
|
|
|
|
|
|
|
11,518
|
Adjusted
EBITDA
|
83,945
|
|
10,980
|
|
(8,282)
|
|
86,643
|
Adjusted EBITDA margin
%
|
30.4 %
|
|
10.4 %
|
|
|
|
22.7 %
|
|
|
|
|
|
|
|
|
(a) Transaction costs include advisory,
legal, accounting, valuation, and other professional or consulting
fees incurred
during acquisitions and divestitures. These costs are included in
Selling, general and administrative expense in the
unaudited Condensed Consolidated Statements of
Operations.
|
MSA Safety
Incorporated
Segment Information (Unaudited)
(In thousands, except percentage amounts)
|
|
|
Americas
|
|
International
|
|
Corporate
|
|
Consolidated
|
Nine Months Ended
September 30, 2023
|
|
|
|
|
|
|
|
Net sales to external
customers
|
$ 902,918
|
|
$ 389,372
|
|
$
—
|
|
$ 1,292,290
|
Operating
income
|
|
|
|
|
|
|
129,070
|
Operating margin
%
|
|
|
|
|
|
|
10.0 %
|
Restructuring
charges
|
|
|
|
|
|
|
8,382
|
Currency exchange
losses, net
|
|
|
|
|
|
|
8,781
|
Loss on divestiture of
MSA LLC
|
|
|
|
|
|
|
129,211
|
Product liability
expense
|
|
|
|
|
|
|
3
|
Amortization of
acquisition-related intangible
assets
|
|
|
|
|
|
|
6,936
|
Transaction costs
(a)
|
|
|
|
|
|
|
78
|
Adjusted operating
income (loss)
|
260,428
|
|
60,099
|
|
(38,066)
|
|
282,461
|
Adjusted operating
margin %
|
28.8 %
|
|
15.4 %
|
|
|
|
21.9 %
|
Depreciation and
amortization
|
|
|
|
|
|
|
38,029
|
Adjusted
EBITDA
|
287,628
|
|
70,296
|
|
(37,434)
|
|
320,490
|
Adjusted EBITDA margin
%
|
31.9 %
|
|
18.1 %
|
|
|
|
24.8 %
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2022
|
|
|
|
|
|
|
|
Net sales to external
customers
|
$ 754,116
|
|
$ 330,583
|
|
$
—
|
|
$ 1,084,699
|
Operating
income
|
|
|
|
|
|
|
168,517
|
Operating margin
%
|
|
|
|
|
|
|
15.5 %
|
Restructuring
charges
|
|
|
|
|
|
|
3,146
|
Currency exchange
losses, net
|
|
|
|
|
|
|
4,788
|
Product liability
expense
|
|
|
|
|
|
|
9,733
|
Amortization of
acquisition-related intangible
assets
|
|
|
|
|
|
|
6,922
|
Transaction costs
(a)
|
|
|
|
|
|
|
1,476
|
Adjusted operating
income (loss)
|
184,664
|
|
34,674
|
|
(24,756)
|
|
194,582
|
Adjusted operating
margin %
|
24.5 %
|
|
10.5 %
|
|
|
|
17.9 %
|
Depreciation and
amortization
|
|
|
|
|
|
|
34,961
|
Adjusted
EBITDA
|
210,201
|
|
43,708
|
|
(24,366)
|
|
229,543
|
Adjusted EBITDA margin
%
|
27.9 %
|
|
13.2 %
|
|
|
|
21.2 %
|
|
|
|
|
|
|
|
|
(a) Transaction costs include advisory,
legal, accounting, valuation, and other professional or consulting
fees incurred
during acquisitions and divestitures. These costs are included in
Selling, general and administrative expense in the
unaudited Condensed Consolidated Statements of
Operations.
|
The Americas segment is comprised of our operations in Northern
North American and Latin American geographies. The International
segment is comprised of our operations in all geographies outside
of the Americas. Certain global expenses are allocated to each
segment in a manner consistent with where the benefits from the
expenses are derived.
Adjusted operating income (loss), adjusted operating margin,
adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA) and adjusted EBITDA margin are the measures
used by the chief operating decision maker to evaluate segment
performance and allocate resources. As such, management believes
that adjusted operating income (loss), adjusted operating margin,
adjusted EBITDA and adjusted EBITDA margin are useful metrics for
investors. Adjusted operating income (loss) is defined as operating
income excluding restructuring charges, currency exchange gains /
losses, loss on divestiture of MSA LLC, product liability expense,
amortization of acquisition-related intangible assets, and
transaction costs. Adjusted operating margin is defined as adjusted
operating income (loss) divided by segment net sales to external
customers. Adjusted EBITDA is defined as adjusted operating income
(loss) plus depreciation and amortization, and adjusted EBITDA
margin is defined as adjusted EBITDA divided by segment net sales
to external customers. Adjusted operating income (loss), adjusted
operating margin, adjusted EBITDA and adjusted EBITDA margin are
not recognized terms under GAAP, and therefore do not purport to be
alternatives to operating income or operating margin as a measure
of operating performance. The company's definition of adjusted
operating income (loss), adjusted operating margin, adjusted EBITDA
and adjusted EBITDA margin may not be comparable to similarly
titled measures of other companies. As such, management believes
that it is appropriate to consider operating income determined on a
GAAP basis in addition to these non-GAAP measures.
MSA Safety
Incorporated
Reconciliation of As Reported Financial Measures to Non-GAAP
Financial Measures
Constant currency revenue growth (Unaudited)
|
|
Consolidated
|
|
Three Months Ended
September 30, 2023
|
|
Breathing
Apparatus
|
Firefighter
Helmets
and
Protective
Apparel
|
Fixed Gas
and Flame
|Detection
|
Portable
Gas
Detection
|
Industrial
Head
Protection
|
Fall
Protection
|
Core Sales
|
|
Non-Core
Sales
|
|
Net Sales
|
GAAP reported sales
change
|
21 %
|
18 %
|
28 %
|
11 %
|
5 %
|
15 %
|
18 %
|
|
3 %
|
|
17 %
|
Plus: Currency
translation effects
|
(2) %
|
(2) %
|
(2) %
|
(2) %
|
(3) %
|
(4) %
|
(2) %
|
|
(3) %
|
|
(2) %
|
Constant currency
sales
change
|
19 %
|
16 %
|
26 %
|
9 %
|
2 %
|
11 %
|
16 %
|
|
— %
|
|
15 %
|
|
Nine Months Ended
September 30, 2023
|
|
Breathing
Apparatus
|
Firefighter
Helmets
and
Protective
Apparel
|
Fixed Gas
and Flame
Detection
|
Portable
Gas
Detection
|
Industrial
Head
Protection
|
Fall
Protection
|
Core Sales
|
|
Non-Core
Sales
|
|
Net Sales
|
GAAP reported sales
change
|
13 %
|
27 %
|
24 %
|
23 %
|
10 %
|
23 %
|
20 %
|
|
13 %
|
|
19 %
|
Plus: Currency
translation effects
|
— %
|
1 %
|
(1) %
|
— %
|
(1) %
|
(1) %
|
(1) %
|
|
(1) %
|
|
— %
|
Constant currency
sales
change
|
13 %
|
28 %
|
23 %
|
23 %
|
9 %
|
22 %
|
19 %
|
|
12 %
|
|
19 %
|
Management believes that constant currency revenue growth is a
useful metric for investors, as foreign currency translation can
have a material impact on revenue growth trends. Constant currency
revenue growth highlights ongoing business performance excluding
the impact of fluctuating foreign currencies, which is outside of
management's control. There can be no assurances that MSA's
definition of constant currency revenue growth is consistent with
that of other companies. As such, management believes that it is
appropriate to consider revenue growth determined on a GAAP basis
in addition to this non-GAAP financial measure.
MSA Safety
Incorporated
Reconciliation of As Reported Financial Measures to Non-GAAP
Financial Measures
Constant currency revenue growth (Unaudited)
|
|
Americas
Segment
|
|
|
Three Months Ended
September 30, 2023
|
|
Breathing
Apparatus
|
Firefighter
Helmets
and
Protective
Apparel
|
Fixed Gas
and Flame
Detection
|
Portable
Gas
Detection
|
Industrial
Head
Protection
|
Fall
Protection
|
Core Sales
|
|
Non-Core
Sales
|
|
Net Sales
|
GAAP reported sales
change
|
13 %
|
23 %
|
18 %
|
13 %
|
5 %
|
15 %
|
15 %
|
|
1 %
|
|
14 %
|
Plus: Currency
translation effects
|
— %
|
— %
|
(2) %
|
(3) %
|
(3) %
|
(4) %
|
(2) %
|
|
(3) %
|
|
(2) %
|
Constant currency
sales
change
|
13 %
|
23 %
|
16 %
|
10 %
|
2 %
|
11 %
|
13 %
|
|
(2) %
|
|
12 %
|
|
Nine Months Ended
September 30, 2023
|
|
Breathing
Apparatus
|
Firefighter
Helmets
and
Protective
Apparel
|
Fixed Gas
and Flame
Detection
|
Portable
Gas
Detection
|
Industrial
Head
Protection
|
Fall
Protection
|
Core Sales
|
|
Non-Core
Sales
|
|
Net Sales
|
GAAP reported sales
change
|
9 %
|
38 %
|
20 %
|
26 %
|
10 %
|
24 %
|
20 %
|
|
22 %
|
|
20 %
|
Plus: Currency
translation effects
|
— %
|
— %
|
(1) %
|
(1) %
|
(2) %
|
(2) %
|
(1) %
|
|
(2) %
|
|
(1) %
|
Constant currency
sales
change
|
9 %
|
38 %
|
19 %
|
25 %
|
8 %
|
22 %
|
19 %
|
|
20 %
|
|
19 %
|
Management believes that constant currency revenue growth is a
useful metric for investors, as foreign currency translation can
have a material impact on revenue growth trends. Constant currency
revenue growth highlights ongoing business performance excluding
the impact of fluctuating foreign currencies, which is outside of
management's control. There can be no assurances that MSA's
definition of constant currency revenue growth is consistent with
that of other companies. As such, management believes that it is
appropriate to consider revenue growth determined on a GAAP basis
in addition to this non-GAAP financial measure.
MSA Safety
Incorporated
Reconciliation of As Reported Financial Measures to Non-GAAP
Financial Measures
Constant currency revenue growth (Unaudited)
|
|
International
Segment
|
|
|
Three Months Ended
September 30, 2023
|
|
Breathing
Apparatus
|
Firefighter
Helmets
and
Protective
Apparel
|
Fixed Gas
and Flame
Detection
|
Portable
Gas
Detection
|
Industrial
Head
Protection
|
Fall
Protection
|
Core Sales
|
|
Non-Core
Sales
|
|
Net Sales
|
GAAP reported sales
change
|
45 %
|
3 %
|
52 %
|
6 %
|
4 %
|
15 %
|
29 %
|
|
6 %
|
|
25 %
|
Plus: Currency
translation effects
|
(6) %
|
(7) %
|
(5) %
|
(2) %
|
(1) %
|
(6) %
|
(5) %
|
|
(4) %
|
|
(4) %
|
Constant currency
sales
change
|
39 %
|
(4) %
|
47 %
|
4 %
|
3 %
|
9 %
|
24 %
|
|
2 %
|
|
21 %
|
|
Nine Months Ended
September 30, 2023
|
|
Breathing
Apparatus
|
Firefighter
Helmets
and
Protective
Apparel
|
Fixed Gas
and Flame
Detection
|
Portable
Gas
Detection
|
Industrial
Head
Protection
|
Fall
Protection
|
Core Sales
|
|
Non-Core
Sales
|
|
Net Sales
|
GAAP reported sales
change
|
25 %
|
(2) %
|
32 %
|
16 %
|
11 %
|
20 %
|
20 %
|
|
2 %
|
|
18 %
|
Plus: Currency
translation effects
|
1 %
|
— %
|
— %
|
2 %
|
3 %
|
1 %
|
1 %
|
|
— %
|
|
— %
|
Constant currency
sales
change
|
26 %
|
(2) %
|
32 %
|
18 %
|
14 %
|
21 %
|
21 %
|
|
2 %
|
|
18 %
|
Management believes that constant currency revenue growth is a
useful metric for investors, as foreign currency translation can
have a material impact on revenue growth trends. Constant currency
revenue growth highlights ongoing business performance excluding
the impact of fluctuating foreign currencies, which is outside of
management's control. There can be no assurances that MSA's
definition of constant currency revenue growth is consistent with
that of other companies. As such, management believes that it is
appropriate to consider revenue growth determined on a GAAP basis
in addition to this non-GAAP financial measure.
MSA Safety
Incorporated
Supplemental Segment Information (Unaudited)
Summary of constant currency revenue growth by segment and product
group
|
|
|
Three Months Ended
September 30, 2023
|
|
Consolidated
|
|
Americas
|
|
International
|
|
|
|
|
|
|
Fixed Gas and Flame
Detection
|
26 %
|
|
16 %
|
|
47 %
|
Breathing
Apparatus
|
19 %
|
|
13 %
|
|
39 %
|
Firefighter Helmets
& Protective Apparel
|
16 %
|
|
23 %
|
|
(4) %
|
Fall
Protection
|
11 %
|
|
11 %
|
|
9 %
|
Portable Gas
Detection
|
9 %
|
|
10 %
|
|
4 %
|
Industrial Head
Protection
|
2 %
|
|
2 %
|
|
3 %
|
Core Sales
|
16 %
|
|
13 %
|
|
24 %
|
|
|
|
|
|
|
Non-Core
Sales
|
— %
|
|
(2) %
|
|
2 %
|
|
|
|
|
|
|
Net Sales
|
15 %
|
|
12 %
|
|
21 %
|
|
Nine Months Ended
September 30, 2023
|
|
Consolidated
|
|
Americas
|
|
International
|
|
|
|
|
|
|
Fixed Gas and Flame
Detection
|
23 %
|
|
19 %
|
|
32 %
|
Breathing
Apparatus
|
13 %
|
|
9 %
|
|
26 %
|
Firefighter Helmets
& Protective Apparel
|
28 %
|
|
38 %
|
|
(2) %
|
Fall
Protection
|
22 %
|
|
22 %
|
|
21 %
|
Portable Gas
Detection
|
23 %
|
|
25 %
|
|
18 %
|
Industrial Head
Protection
|
9 %
|
|
8 %
|
|
14 %
|
Core Sales
|
19 %
|
|
19 %
|
|
21 %
|
|
|
|
|
|
|
Non-Core
Sales
|
12 %
|
|
20 %
|
|
2 %
|
|
|
|
|
|
|
Net Sales
|
19 %
|
|
19 %
|
|
18 %
|
MSA Safety
Incorporated
Reconciliation of As Reported Financial Measures to Non-GAAP
Financial Measures
Adjusted earnings (Unaudited)
Adjusted earnings per diluted share (Unaudited)
(In thousands, except per share and percentage amounts)
|
|
|
Three Months
Ended
September 30,
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2023
|
|
2022
|
|
%
Change
|
|
2023
|
|
2022
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$ 65,256
|
|
$ 44,906
|
|
45 %
|
|
$
(17,827)
|
|
$
128,141
|
|
(114) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on divestiture of
MSA LLC
|
—
|
|
—
|
|
|
|
129,211
|
|
—
|
|
|
Deferred tax asset
write-off related
to divestiture of MSA LLC
|
—
|
|
—
|
|
|
|
70,366
|
|
—
|
|
|
Product liability
expense
|
—
|
|
4,035
|
|
|
|
3
|
|
9,733
|
|
|
Amortization of
acquisition-related
intangible assets
|
2,315
|
|
2,279
|
|
|
|
6,936
|
|
6,922
|
|
|
Transaction costs
(a)
|
78
|
|
620
|
|
|
|
78
|
|
1,476
|
|
|
Restructuring
charges
|
3,285
|
|
899
|
|
|
|
8,382
|
|
3,146
|
|
|
Asset related losses
(gains) and
other
|
42
|
|
4,652
|
|
|
|
(671)
|
|
4,776
|
|
|
Currency exchange
losses, net
|
1,496
|
|
2,979
|
|
|
|
8,781
|
|
4,788
|
|
|
Income tax expense
on
adjustments
|
(2,327)
|
|
(3,331)
|
|
|
|
(9,248)
|
|
(7,400)
|
|
|
Adjusted
earnings
|
$ 70,145
|
|
$ 57,039
|
|
23 %
|
|
$
196,011
|
|
$
151,582
|
|
29 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per
diluted
share
|
$
1.78
|
|
$
1.45
|
|
23 %
|
|
$
4.97
|
|
$
3.85
|
|
29 %
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)Transaction costs include advisory,
legal, accounting, valuation, and other professional or consulting
fees incurred
during acquisitions and divestitures. These costs are included in
Selling, general and administrative expense in the
unaudited Condensed Consolidated Statements of
Operations.
|
Management believes that adjusted earnings and adjusted earnings
per diluted share are useful measures for investors, as management
uses these measures to internally assess the company's performance
and ongoing operating trends. There can be no assurances that
additional special items will not occur in future periods, nor that
MSA's definition of adjusted earnings is consistent with that of
other companies. As such, management believes that it is
appropriate to consider both net income (loss) determined on a GAAP
basis as well as adjusted earnings.
MSA Safety
Incorporated
Reconciliation of As Reported Financial Measures to Non-GAAP
Financial Measures
Debt to adjusted EBITDA / Net debt to adjusted EBITDA
(Unaudited)
(In thousands)
|
|
|
|
Twelve Months
Ended
September 30, 2023
|
Operating
income
|
|
$
199,690
|
Loss on divestiture of
MSA LLC
|
|
129,211
|
Depreciation and
amortization
|
|
50,178
|
Product liability
expense
|
|
10,860
|
Restructuring
charges
|
|
13,201
|
Currency exchange
losses, net
|
|
14,248
|
Amortization of
acquisition-related intangible assets
|
|
9,221
|
Transaction costs
(a)
|
|
1,835
|
Adjusted
EBITDA
|
|
$
428,444
|
|
|
|
Total end-of-period
debt
|
|
742,012
|
|
|
|
Debt to adjusted
EBITDA
|
|
1.7
|
|
|
|
Total end-of-period
debt
|
|
$
742,012
|
Total end-of-period
cash and cash equivalents
|
|
164,499
|
Net debt
|
|
$
577,513
|
|
|
|
Net debt to adjusted
EBITDA
|
|
1.3
|
(a) Transaction costs include advisory,
legal, accounting, valuation, and other professional or consulting
fees incurred
during acquisitions and divestitures. These costs are included in
Selling, general and administrative expense in the
unaudited Condensed Consolidated Statements of
Operations.
|
Management believes that Debt to adjusted EBITDA and Net debt to
adjusted EBITDA are useful measures for investors, as management
uses these measures to internally assess the company's liquidity
and balance sheet strength. There can be no assurances that that
MSA's definition of Debt to Adjusted EBITDA and Net Debt to
Adjusted EBITDA is consistent with that of other
companies.
About MSA Safety:
Established in 1914, MSA Safety Incorporated is the global
leader in the development, manufacture and supply of safety
products and solutions that protect people and facility
infrastructures. Many MSA products integrate a combination of
electronics, software, mechanical systems and advanced materials to
protect users against hazardous or life-threatening situations. The
company's comprehensive product line is used by workers around the
world in a broad range of markets, including fire service, the oil,
gas and petrochemical industry, construction, industrial
manufacturing applications, heating, ventilation, air conditioning
and refrigeration, utilities, mining and the military. MSA's core
products include self-contained breathing apparatus, fixed gas and
flame detection systems, portable gas detection instruments,
industrial head protection products, firefighter helmets and
protective apparel, and fall protection devices. With 2022 revenues
of $1.5 billion, MSA employs
approximately 5,000 people worldwide. The company is headquartered
north of Pittsburgh in
Cranberry Township, Pa., and has
manufacturing operations in the United
States, Europe,
Asia and Latin America. With more
than 40 international locations, MSA realizes approximately half of
its revenue from outside North America. For more information visit
MSA's web site at www.MSAsafety.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 the Private Securities Litigation Reform Act of
1995. These statements relate to future events or our future
financial performance and involve various assumptions, known and
unknown risks, uncertainties and other factors that may cause our
actual results, levels of activity, performance or achievements to
be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements. In some cases, you can identify
forward-looking statements by words such as "may," "will,"
"should," "expects," "intends," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential" or other comparable words.
Actual results, performance or outcomes may differ materially from
those expressed or implied by these forward-looking statements and
may not align with historical performance and events due to a
number of factors, including those discussed in the sections of our
annual report on Form 10-K entitled "Cautionary Statement Regarding
Forward-Looking Statements" and "Risk Factors," and those discussed
in our Form 10-Q quarterly reports filed after such annual report.
MSA's SEC filings are readily obtainable at no charge at
www.sec.gov, as well as on its own investor relations website at
http://investors.MSAsafety.com. Although we believe that the
expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity,
performance or achievements, and caution should be exercised
against placing undue reliance upon such statements, which are
based only on information currently available to us and speak only
as of the date hereof. We are under no duty to update publicly any
of the forward-looking statements after the date of this earnings
press release, whether as a result of new information, future
events or otherwise, except as required by law.
Non-GAAP Financial Measures:
This press release includes certain non-GAAP financial measures.
These financial measures include constant currency revenue growth,
adjusted operating income, adjusted operating margin, adjusted
EBITDA, adjusted EBITDA margin, adjusted earnings, adjusted
earnings per diluted share, debt to adjusted EBITDA, and net debt
to adjusted EBITDA. These non-GAAP financial measures provide
information useful to investors in understanding our operating
performance and trends, and to facilitate comparisons with the
performance of our peers. Management also uses these measures
internally to assess and better understand our underlying business
performance and trends related to core business activities. The
non-GAAP financial measures and key performance indicators we use,
and computational methods with respect thereto, may differ from the
non-GAAP financial measures and key performance indicators, and
computational methods, that our peers use to assess their
performance and trends.
The presentation of these non-GAAP financial measures does
not comply with U.S. GAAP. These non-GAAP financial measures should
be viewed as supplemental in nature, and not as a substitute for,
or superior to, our reported results prepared in accordance with
GAAP. When non-GAAP financial measures are disclosed, the
Securities and Exchange Commission's Regulation G requires: (i) the
presentation of the most directly comparable financial measure
calculated and presented in accordance with GAAP and (ii) a
reconciliation of the differences between the non-GAAP financial
measure presented and the most directly comparable financial
measure calculated and presented in accordance with GAAP. The
presentation of these financial measures does not comply with U.S.
generally accepted accounting principles ("GAAP"). For an
explanation of these measures, with a reconciliation to the most
directly comparable GAAP financial measure, see the Reconciliation
of As Reported Financial Measures to Non-GAAP Financial Measures in
the financial tables section above.
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SOURCE MSA Safety