PR Newswire
PITTSBURGH, Aug. 3, 2017
PITTSBURGH, Aug. 3, 2017 /PRNewswire/ -- Global safety equipment manufacturer MSA Safety Incorporated (NYSE: MSA) today reported results for the second quarter of 2017.
Quarterly Highlights
Cumulative Trauma Product Liability Charge
The company increased its cumulative trauma product liability reserve by $84 million in the second quarter related to recent product liability settlements and estimated indemnity for all asserted cumulative trauma claims, bringing the total reserve to $93 million. The company's quarterly GAAP results include a $30 million, or $21 million after tax ($0.53 per diluted share) charge, which reflects the increase to the reserve, net of expected insurance collections.
Comments from Management
"The charge to our GAAP earnings, which did not have a cash impact in the quarter, relates to product liability settlements and estimated indemnity on all asserted cumulative trauma product liability claims. For more than a decade, we have funded product liability settlements from operating cash flow, without the benefit of inflows from insurance proceeds. In the past year, we have made great progress collecting insurance proceeds and establishing cash flow streams for the future, which will allow us to fund this liability without a material impact on our current capital allocation priorities," said William M. Lambert, MSA Chairman and CEO.
"Our second quarter operating results reflect our ongoing focus on streamlining MSA's cost structure, expanding product margins, and generating higher levels of cash flow," Mr. Lambert continued. "Most notably, we were able to improve gross profit by 40 basis points and drive 10 percent adjusted earnings growth in the quarter."
Mr. Lambert noted that revenue driven by short-cycle industrial products, including hard hats and fall protection equipment, continued to gain momentum in the quarter. "In particular, our previous investments in R&D and acquisitions have enabled us to capitalize on stronger market conditions to drive double-digit revenue growth in each of these areas." Mr. Lambert added that sales of hard hats, which increased 15 percent in the quarter, were supported by the company's market leading Fas-Trac® III Suspension and its ability to offer customers best-in-class customization options. He also commented that the company's 16 percent quarterly growth in fall protection was driven largely by Latchways, the UK-based fall protection manufacturer MSA acquired in 2015.
"We have a strong history of using our balance sheet to complete acquisitions, like Latchways and General Monitors, that drive shareholder value," Mr. Lambert said. "Similarly, our recently completed acquisition of Globe is an excellent strategic and financial fit, helping us continue to enhance our market leadership position in the U.S. fire service. Going forward, we remain focused on managing our cost structure while strategically deploying capital for investments that will continue to drive profitable growth and market share gains," Mr. Lambert concluded.
MSA Safety Incorporated | ||||||||||||||||||
Condensed Consolidated Statement of Income (Unaudited) | ||||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||
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| Three Months Ended June 30, | | Six Months Ended June 30, | |||||||||||||||
| 2017 | | 2016 | | 2017 | | 2016 | | ||||||||||
| | | | | | | | | ||||||||||
Net sales | $ | 288,775 | | | $ | 295,998 | | | $ | 554,540 | | | $ | 575,266 | | |||
Cost of products sold | 155,170 | | | 160,143 | | | 301,213 | | | 318,706 | | |||||||
Gross profit | 133,605 | | | 135,855 | | | 253,327 | | | 256,560 | | |||||||
| | | | | | | | | | |||||||||
Selling, general and administrative | 73,943 | | | 75,716 | | | 149,926 | | | 154,911 | | |||||||
Research and development | 11,933 | | | 11,144 | | | 22,931 | | | 21,507 | | |||||||
Restructuring charges | 967 | | | 1,338 | | | 13,706 | | | 1,808 | | |||||||
Currency exchange losses (gains), net | 2,851 | | | (242) | | | 3,431 | | | 1,708 | | |||||||
Other operating expense(a) | 29,610 | | | — | | | 29,610 | | | — | | |||||||
Operating income | 14,301 | | | 47,899 | | | 33,723 | | | 76,626 | | |||||||
| | | | | | | | | | |||||||||
Interest expense | 3,014 | | | 4,201 | | | 6,605 | | | 8,103 | | |||||||
Other income, net | (425) | | | (775) | | | (1,080) | | | (1,663) | | |||||||
Total other expense, net | 2,589 | | | 3,426 | | | 5,525 | | | 6,440 | | |||||||
| | | | | | | | |||||||||||
Income from continuing operations before income taxes | 11,712 | | | 44,473 | | | 28,198 | | | 70,186 | | |||||||
(Benefit) provision for income taxes | (902) | | | 15,026 | | | 894 | | | 27,537 | | |||||||
Income from continuing operations | 12,614 | | | 29,447 Werbung Mehr Nachrichten zur Mine Safety Aktie kostenlos abonnieren
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