Mine Safety Appliances (MSA)
Q2 2013 Earnings Conference Call
July 24, 2013 10:00 a.m. ET
Mark C. Deasy – Corporate Communications Director
William M. Lambert – President & CEO
Dennis L. Zeitler – SVP & CFO
Stacy McMahan – SVP of Finance
Joseph A. Bigler – VP & President, MSA North America
Ronald N. Herring, Jr. – President, MSA International (WEZ and MEZ Zones)
Kerry M. Bove – President, MSA International (APZ and ALZ Zones)
Edward Marshall – Sidoti & Company
Richard Eastman – Robert W. Baird
Walt Liptak – Global Hunter Securities
Dick Ryan – Dougherty & Company
Previous Statements by MSA
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I will now turn the call over to Mr. Mark Deasy, Director of Corporate Communications, Mr. Deasy, you may begin.
Mark C. Deasy
Thank you Allen, and good morning everybody, I too want to welcome you to our second quarter earnings conference call for 2013. With me this morning are Bill Lambert, President and Chief Executive Officer; Dennis Zeitler, Senior Vice President and Chief Financial Officer; Stacy McMahan, our Senior Vice President of Finance and our three Geographic Segment Presidents, Joe Bigler, Ron Herring and Kerry Bove.
Our second quarter press release was issued this morning at 8:30 and it is available on the home page of MSA’s website at www.msasafety.com. This morning Bill will provide his commentary on our quarter. Dennis will then review our financials and then Bill will conclude his formal remarks with some closing comments. After that we will open up the call 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 the Private Securities Litigation Reform Act of 1995. 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 April 24 of this year.
You are strongly urged to review all such filings for a more detailed discussion of such risks. Our SEC filings can be easily obtained at no charge at www.sec.gov, our own website, and many other commercial websites. That concludes our forward-looking statements.
At this point, I will now turn the call over to Bill Lambert for his comments. Bill?
William M. Lambert
Thank you, Mark and good morning everyone. As always, I want to 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 second quarter press release and have our financial figures with all comparisons corresponding to the equivalent period in 2012. I’m going to start by running through some of the highlights of our second quarter earnings and talk about the progress we’re making on some of our strategic priorities.
I will also share some views on the current business environment and how it’s likely to affect us through the remainder of the year before I turn it over to Dennis to run through the actual results. Then we’ll open it up for your questions.
In the second quarter better than anticipated core revenue growth coupled with solid performance in developed markets and continued gains in emerging markets led to record financial performance for MSA. Throughout the first half of the quarter, we saw some very choppy conditions and a somewhat uneven order pace. But, by late May, things had settled down and we saw some strengthening to finish out the quarter.
As I look at where we are, and what we’ve accomplished against our strategic priorities so far this year, I am encouraged by our second quarter financial results. Our ongoing focus and efforts and the gaining share and driving demand of core products in both developed and emerging markets, developing innovative new products and controlling manufacturing and operating costs, all helped us recognize record second quarter continuing sales, operating income and pro-forma net income.
As you saw in our press release, our consolidated sales for the quarter were $300 million. On an as reported basis, sales were up $5 million from a year ago or 2%. However, the second quarter of 2012 included $5 million of ballistic helmet sales in our North American segment. For those of you who are regular participants on our calls, you know, we divested this non-core business in the second quarter of 2012. Additionally, weakening foreign currencies decreased as reported second quarter 2013 sales by $3 million. Excluding this currency effect and the divested business impact, our sales were up 4.5% when compared to the second quarter of 2012.
As we look at where we are in relation to our longer term priorities, we’re seeing tangible benefits of our long term growth strategy and the shift of our revenue mix towards our more profitable core product lines. Dennis will provide more details of our financial performance with a breakdown by end market, by product group and by geographic reporting segment in his comments.