MSA reports higher sales on strength in industrial markets
Volume 25 Summer
PITTSBURGH, July 28, 2010 – MSA (NYSE) today announced that net sales for the second quarter of 2010 were $237.2 million, compared with $227.2 million for the second quarter of 2009, an increase of $10.0 million, or 4 percent. Net income for the second quarter of 2010 was $11.8 million, or 33 cents per basic share, a decrease of $0.7 million, or 5 percent, compared with $12.5 million, or 35 cents per basic share, for the same quarter last year.
MSA’s consolidated sales in the second quarter reflected continued strengthening in the company’s core industrial market, noted William Lambert, MSA President and CEO. “We continue to see signs of economic stabilization in the U.S. economy and in many parts of the world in which we operate,” Mr. Lambert said. “Our core industrial business, which comprises two thirds of our global sales and covers the energy, construction, mining and manufacturing markets, to name a few, showed continued strength in the second quarter with sales growth over the same period last year,” he said.
For the quarter, sales in the company’s North American segment increased $4.4 million, or 4 percent, compared to the same period in 2009. The increase reflects strengthening in end-user demand in industrial markets. Sales of head protection and instruments were up $4.3 million and $4.7 million, respectively, on improved demand in manufacturing and the oil, gas and petrochemical (OGP) markets. These increases were partially offset by lower ballistic helmet sales to the military, down $2.9 million, reflecting the transition to a new contract. Product shipments to the fire service market were down $2.1 million.
Sales in the company’s European segment decreased $4.9 million, or 8 percent, in the current quarter. Local currency sales were down $1.7 million during the second quarter of 2010, or 3 percent, reflecting decreased fire service sales as government spending there responds to the continuing effects of the recession. Core industrial sales in Europe were up slightly from a year ago. Currency translation effects decreased second quarter European segment sales, when stated in U.S. dollars, by $3.2 million, due to a weaker euro.
Sales in MSA’s International segment increased by $10.4 million, or 19 percent, in the current quarter. Local currency sales were up $6.0 million or 10 percent, on higher shipments to the mining and other industrial markets. This strength was partially offset by weakness in fire service and military market products. Currency translation effects increased International segment sales, when stated in U.S. dollars, by $4.4 million.
Net income in the company’s North American segment was flat on the 5 percent increase in sales in the second quarter of 2010.
MSA’s European segment reported a net loss for the second quarter of $3.1 million, compared to net income of $1.0 million during the second quarter of 2009. The current quarter loss includes a $1.0 million after-tax restructuring charge related to the company’s previously announced initiative to streamline European operations. Excluding this one-time charge, European segment net income was down $3.1 million in the current quarter. The decrease was primarily due to the previously discussed decrease in sales and lower gross profits.International segment net income for the second quarter was $3.0 million, an increase of $2.1 million, compared to $0.9 million in the same quarter last year. Higher net income was primarily related to improved gross profits, reflecting a more favorable product and geographic sales mix.
“Without question the upswing in our International and North American core industrial business over the past several months has been accelerated by the favorable effects of economic stimulus plans implemented by governments around the world. While defensive measures certainly helped us weather the economic recession, our most recent focus on offensive, strategic measures have clearly helped us achieve higher levels of sales and margins this quarter. As we look to the second half of 2010, we remain highly committed to our corporate strategy to grow our core product lines and core markets, and we plan to continue to invest in those targeted areas that will help us to accelerate growth, generate greater shareholder value, and build a foundation for MSA’s long-term success. ” Mr. Lambert concluded.