Mine Safety Appliances Co (MSA)
Q4 2012 Earnings Call
February 13, 2013 10:00 am ET
Mark Deasy – Corporate Communications Director
Bill Lambert – President, Chief Executive Officer
Dennis Zeitler – SVP, Chief Financial Officer
Joe Bigler – President, MSA North America
Ron Herring – President, MSA International
Ed Marshall – Sidoti & Company
Richard Eastman – Robert W Baird
Brian Rafn – Morgan Dempsey Capital Management
John Cooper – BB&T Capital Markets
Previous Statements by MSA
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I will now turn the call over to Mark Deasy. Mr. Deasy, you may begin.
Thank you, Elen; and good morning, everybody. I too would like to welcome you to our Fourth Quarter and Year-End Earnings Conference Call for 2012. I’m Mark Deasy, Corporate Communications Director and with me this morning are Bill Lambert, President and Chief Executive Officer; Dennis Zeitler, Senior Vice President and Chief Financial Officer; Joe Bigler, our President of MSA North America; Ron Herring, President of MSA International, who is responsible for our business in Europe, Russia, the Middle East, India and Northern Africa; and Kerry Bove, President of MSA International, responsible for Latin America, Asia, Australia, Sub-Saharan Africa.
Our Fourth Quarter Press Release was issued this morning at 8:30, and we hope everybody has had an opportunity to review it. The release is available on the Homepage of MSA’s website at www.msasafety.com. This morning, Bill will provide his commentary on our quarter and year end result and then Dennis will review our financials in more detail. And after Dennis’s comments, we’ll open the call up for your questions.
Before we begin, I want to remind everybody that the matters discussed on this call, excluding historical information, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. Forward-looking statements, including without limitation all projections and anticipated levels of future performance, involve risks, uncertainties and other factors that may cause our actual results to differ materially from those discussed here.
These risks, uncertainties, and other factors are detailed from time to time in our filings with the SEC, including our most recent Form 10-Q, which was filed on October 24, 2012. You are strongly urged to review all such filings for a more detailed discussion of such risks. Our SEC filings can be obtained at no charge at www.sec.gov, our own website and of course many other commercial sites. That concludes our forward-looking statement.
So at this point, I’ll turn the call over to Bill Lambert for his comments. Bill.
Thank you, Mark, and good morning everyone. Let me begin by saying thank you for joining us today on this conference call and for your continued interest in MSA. Presumably, all of you have seen our fourth quarter press release and have our financial figures with all comparisons corresponding to the equivalent period in 2011.
To begin, I want to say at the onset that I’m pleased to report today’s quarterly and full-year results, which I believe demonstrate solid performance by the MSA team. While economic and business conditions were uneven throughout much of 2012, I’m encouraged by the fact that our corporate strategy continues to gain traction around the world as indicated by many of our key metrics for success. For example, we continue to see improving performance in our five core product groups throughout emerging and developing markets. And I’ll provide more texture on that in a moment.
Additionally, the results we continue to see from our new product development efforts, our ongoing focus and closer management of manufacturing and operating costs, and continued success from General Monitors in our overall fixed gas and flame detection business are likewise very encouraging to see. The focus and performance of the team across these key areas of our corporate strategy helped MSA recognize solid growth in revenues, record cash flow and record profitability in 2012, while building a strong foundation for 2013. While we continue to experience persistent uneven economic uncertainty in global markets year at the start of 2013, I’m starting to feel a growing sense of optimism and momentum building in the outlook for many of our markets. The growth MSA has seen in core product sales combined with improved margin levels further support my optimism for the business.
I want to assure you that we remain committed to executing our strategic plan. These strategies continue to provide shareholders and customers with value and our fourth quarter and full-year financial results reflect the results of this commitment. As you saw on our press release, our consolidated sales for the quarter were $294 million, on as reported basis sales were down $10 million from a year ago. However, when analyzing the sales results, it’s important to consider the divestiture of our North American ballistic products business and the impact of weakening foreign currencies on the year-over-year comparison.
The fourth quarter of 2011 included $16 million of ballistic protection product sales in our North American segment. These non-core North American ballistic vest and ballistic helmet businesses were divested late in 2011, and during the first half of 2012 respectively. Additionally, weakening foreign currencies decreased as reported fourth quarter 2012 sales by $4 million, therefore excluding the currency effects and the divested business impacts tax, our sales were up $10 million, representing an increase of 4% for the quarter.