Full Press Release Details
FROM: MSA Safety Incorporated
Media Relations Contact: Mark Deasy (724) 741 - 8570
Investor Relations Contact: Kenneth Krause (724) 741 - 8534
MSA Announces Second Quarter Results
Quarterly GAAP earnings include a charge related to recent product liability settlements and estimated indemnity on all asserted cumulative trauma product liability claims, which did not have a cash impact in the quarter; Adjusted earnings were $33 million, growing 10 percent on continued product margin expansion and a streamlined cost structure
PITTSBURGH, August 3, 2017 - 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)
| 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 | 27,304 | 42,649 | |||||||||||
| Income from discontinued operations | - | 2,484 | - | 1,355 | |||||||||||
| Net income | 12,614 | 31,931 | 27,304 | 44,004 | |||||||||||
| Net income attributable to noncontrolling interests | (82 | ) | (848 | ) | (359 | ) | (1,170 | ) | |||||||
| Net income attributable to MSA Safety Incorporated | 12,532 | 31,083 | 26,945 | 42,834 | |||||||||||
| Amounts attributable to MSA Safety Incorporated common shareholders: | |||||||||||||||
| Income from continuing operations | 12,532 | 29,306 | 26,945 | 41,989 | |||||||||||
| Income from discontinued operations | - | 1,777 | - | 845 | |||||||||||
| Net income | 12,532 | 31,083 | 26,945 | 42,834 | |||||||||||
| Earnings per share attributable to MSA Safety Incorporated common shareholders: | |||||||||||||||
| Basic | |||||||||||||||
| Income from continuing operations | $ | 0.33 | $ | 0.78 | $ | 0.71 | $ | 1.12 | |||||||
| Income from discontinued operations | $ | - | $ | 0.05 | $ | - | $ | 0.02 | |||||||
| Net income | $ | 0.33 | $ | 0.83 | $ | 0.71 | $ | 1.14 | |||||||
| Diluted | |||||||||||||||
| Income from continuing operations | $ | 0.32 | $ | 0.77 | $ | 0.70 | $ | 1.11 | |||||||
| Income from discontinued operations | $ | - | $ | 0.05 | $ | - | $ | 0.02 | |||||||
| Net income | $ | 0.32 | $ | 0.82 | $ | 0.70 | $ | 1.13 | |||||||
| Basic shares outstanding | 38,065 | 37,411 | 37,914 | 37,368 | |||||||||||
| Diluted shares outstanding | 38,780 | 37,860 | 38,685 | 37,807 |
(a) Represents a charge related to product liability settlements reached in August 2017 and estimated indemnity for all other asserted cumulative trauma product liability claims. See further description under Cumulative Trauma Product Liability Charge section of Press Release narrative.
MSA Safety Incorporated
Condensed Consolidated Balance Sheet (Unaudited)
| June 30, 2017 | December 31, 2016 | ||||||
| Assets | |||||||
| Cash and cash equivalents | $ | 115,361 | $ | 113,759 | |||
| Trade receivables, net | 219,491 | 209,514 | |||||
| Inventories | 130,613 | 103,066 | |||||
| Notes receivable, insurance companies | 14,161 | 4,180 | |||||
| Other current assets | 72,531 | 42,287 | |||||
| Total current assets | 552,157 | 472,806 | |||||
| Property, net | 143,884 | 148,678 | |||||
| Prepaid pension cost | 56,519 | 62,916 | |||||
| Goodwill | 341,925 | 333,276 | |||||
| Notes receivable, insurance companies, noncurrent | 63,833 | 63,147 | |||||
| Insurance receivable, noncurrent | 81,111 | 157,929 | |||||
| Other noncurrent assets | 122,607 | 115,168 | |||||
| Total assets | $ | 1,362,036 | $ | 1,353,920 | |||
| Liabilities and shareholders' equity | |||||||
| Notes payable and current portion of long-term debt, net | $ | 26,827 | $ | 26,666 | |||
| Accounts payable | 65,392 | 62,734 | |||||
| Other current liabilities | 163,123 | 132,010 | |||||
| Total current liabilities | 255,342 | 221,410 | |||||
| Long-term debt, net | 242,679 | 363,836 | |||||
| Pensions and other employee benefits | 166,672 | 157,927 | |||||
| Deferred tax liabilities | 36,176 | 34,044 | |||||
| Other noncurrent liabilities | 59,571 | 15,491 | |||||
| Total shareholders' equity | 601,596 | 561,212 | |||||
| Total liabilities and shareholders' equity | $ | 1,362,036 | $ | 1,353,920 |
MSA Safety Incorporated
Condensed Consolidated Statement of Cash Flows (Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||
| Net income | $ | 12,614 | $ | 31,931 | $ | 27,304 | $ | 44,004 | |||||||
| Depreciation and amortization | 8,984 | 8,576 | 17,736 | 17,732 | |||||||||||
| Change in working capital and other operating | 28,294 | (16,979 | ) | 101,242 | (49,214 | ) | |||||||||
| Cash flow from operating activities | 49,892 | 23,528 | 146,282 | 12,522 | |||||||||||
| Capital expenditures | (4,685 | ) | (4,776 | ) | (6,127 | ) | (10,595 | ) | |||||||
| Property disposals and other investing | 512 | 1,257 | 677 | 16,965 | |||||||||||
| Cash flow (used in) from investing activities | (4,173 | ) | (3,519 | ) | (5,450 | ) | 6,370 | ||||||||
| Change in debt | (28,203 | ) | (17,009 | ) | (124,640 | ) | (3,376 | ) | |||||||
| Cash dividends paid | (13,369 | ) | (12,348 | ) | (25,824 | ) | (24,284 | ) | |||||||
| Other financing | 5,098 | 1,605 | 7,944 | 3,161 | |||||||||||
| Cash flow (used in) financing activities | (36,474 | ) | (27,752 | ) | (142,520 | ) | (24,499 | ) | |||||||
| Effect of exchange rate changes on cash and cash equivalents | 1,689 | (1,009 | ) | 3,290 | 2,831 | ||||||||||
| Increase (decrease) in cash and cash equivalents | 10,934 | (8,752 | ) | 1,602 | (2,776 | ) |
MSA Safety Incorporated
Segment Information (Unaudited)
| Americas | International | Corporate | Consolidated | |||||||||||
| Three months ended June 30, 2017 | ||||||||||||||
| Sales to external customers | $ | 174,960 | $ | 113,815 | - | $ | 288,775 | |||||||
| Operating income | 14,301 | |||||||||||||
| Operating margin % | 5.0 | % | ||||||||||||
| Restructuring charges | 967 | |||||||||||||
| Currency exchange losses, net | 2,851 | |||||||||||||
| Other operating expense | 29,610 | |||||||||||||
| Adjusted operating income (loss) | 45,528 | 10,970 | (8,769 | ) | $ | 47,729 | ||||||||
| Adjusted operating margin % | 26.0 | % | 9.6 | % | 16.5 | % | ||||||||
| Six Months Ended June 30, 2017 | ||||||||||||||
| Sales to external customers | $ | 341,528 | $ | 213,012 | - | $ | 554,540 | |||||||
| Operating income | 33,723 | |||||||||||||
| Operating margin % | 6.1 | % | ||||||||||||
| Restructuring charges | 13,706 | |||||||||||||
| Currency exchange losses, net | 3,431 | |||||||||||||
| Other operating expense | 29,610 | |||||||||||||
| Adjusted operating income (loss) | 83,634 | 17,614 | (20,778 | ) | $ | 80,470 | ||||||||
| Adjusted operating margin % | 24.5 | % | 8.3 | % | 14.5 | % |
| Americas | International | Corporate | Consolidated | |||||||||||
| Three months ended June 30, 2016 | ||||||||||||||
| Sales to external customers | $ | 177,623 | $ | 118,375 | - | $ | 295,998 | |||||||
| Operating income | 47,899 | |||||||||||||
| Operating margin % | 16.2 | % | ||||||||||||
| Restructuring charges | 1,338 | |||||||||||||
| Currency exchange (gains), net | (242 | ) | ||||||||||||
| Other operating expense | - | |||||||||||||
| Adjusted operating income (loss) | 44,671 | 12,741 | (8,417 | ) | $ | 48,995 | ||||||||
| Adjusted operating margin % | 25.1 | % | 10.8 | % | 16.6 | % | ||||||||
| Six Months Ended June 30, 2016 | ||||||||||||||
| Sales to external customers | $ | 344,965 | $ | 230,301 | - | $ | 575,266 | |||||||
| Operating income | 76,626 | |||||||||||||
| Operating margin % | 13.3 | % | ||||||||||||
| Restructuring charges | 1,808 | |||||||||||||
| Currency exchange losses, net | 1,708 | |||||||||||||
| Other operating expense | - | |||||||||||||
| Adjusted operating income (loss) | 76,016 | 21,148 | (17,022 | ) | $ | 80,142 | ||||||||
| Adjusted operating margin % | 22.0 | % | 9.2 | % | 13.9 | % |
The Americas and International segments were established on January 1, 2016. The Americas segment is comprised of our operations in the U.S., Canada and Latin America. The International segment is comprised of our operations in all other parts of the world including Europe, Africa, the Middle East, India, China, South East Asia and Australia. 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) and adjusted operating 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) and adjusted operating margin are useful metrics for investors. Adjusted operating income (loss) is defined as operating income excluding restructuring, currency exchange gains (losses) and other operating expense. Adjusted operating margin is defined as adjusted operating income (loss) divided by segment sales to external customers. Adjusted operating income (loss) and adjusted operating 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) and adjusted operating 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)
| Three Months Ended June 30, 2017 | ||||||||||||||||||||
| Breathing Apparatus | Fire and Rescue Helmets | Industrial Head Protection | Portable Gas Detection | Fixed Gas and Flame Detection | Fall Protection | Core Sales | Non-Core Sales | Net Sales | ||||||||||||
| GAAP reported sales change | (12 | )% | (4 | )% | 15 | % | (8 | )% | 10 | % | 11 | % | - | % | (12 | )% | (2 | )% | ||
| Plus: Currency translation effects | - | % | 1 | % | - | % | - | % | 1 | % | 5 | % | - | % | - | % | - | % | ||
| Constant currency sales change | (12 | )% | (3 | )% | 15 | % | (8 | )% | 11 | % | 16 | % | - | % | (12 | )% | (2 | )% |
| Six Months Ended June 30, 2017 | ||||||||||||||||||||
| Breathing Apparatus | Fire and Rescue Helmets | Industrial Head Protection | Portable Gas Detection | Fixed Gas and Flame Detection | Fall Protection | Core Sales | Non-Core Sales | Net Sales | ||||||||||||
| GAAP reported sales change | (12 | )% | (1 | )% | 17 | % | 1 | % | - | % | (1 | )% | (2 | )% | (11 | )% | (4 | )% | ||
| Plus: Currency translation effects | - | % | 2 | % | (1 | )% | - | % | 1 | % | 5 | % | 1 | % | (1 | )% | 1 | % | ||
| Constant currency sales change | (12 | )% | 1 | % | 16 | % | 1 | % | 1 | % | 4 | % | (1 | )% | (12 | )% | (3 | )% |
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)
| Three Months Ended June 30, 2017 | ||||||||||||||||||||
| Breathing Apparatus | Fire and Rescue Helmets | Industrial Head Protection | Portable Gas Detection | Fixed Gas and Flame Detection | Fall Protection | Core Sales | Non-Core Sales | Net Sales | ||||||||||||
| GAAP reported sales change | (16 | )% | (5 | )% | 15 | % | 4 | % | 2 | % | 31 | % | - | % | (9 | )% | (1 | )% | ||
| Plus: Currency translation effects | - | % | - | % | (1 | )% | (1 | )% | - | % | 1 | % | - | % | - | % | (1 | )% | ||
| Constant currency sales change | (16 | )% | (5 | )% | 14 | % | 3 | % | 2 | % | 32 | % | - | % | (9 | )% | (2 | )% |
| Six Months Ended June 30, 2017 | ||||||||||||||||||||
| Breathing Apparatus | Fire and Rescue Helmets | Industrial Head Protection | Portable Gas Detection | Fixed Gas and Flame Detection | Fall Protection | Core Sales | Non-Core Sales | Net Sales | ||||||||||||
| GAAP reported sales change | (12 | )% | (5 | )% | 16 | % | 11 | % | (5 | )% | 22 | % | - | % | (6 | )% | (1 | )% | ||
| Plus: Currency translation effects | - | % | - | % | (2 | )% | (1 | )% | 1 | % | 1 | % | - | % | (1 | )% | - | % | ||
| Constant currency sales change | (12 | )% | (5 | )% | 14 | % | 10 | % | (4 | )% | 23 | % | - | % | (7 | )% | (1 | )% |
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 June 30, 2017 | ||||||||||||||||||||
| Breathing Apparatus | Fire and Rescue Helmets | Industrial Head Protection | Portable Gas Detection | Fixed Gas and Flame Detection | Fall Protection | Core Sales | Non-Core Sales | Net Sales | ||||||||||||
| GAAP reported sales change | (5 | )% | (4 | )% | 16 | % | (25 | )% | 20 | % | (8 | )% | (1 | )% | (16 | )% | (4 | )% | ||
| Plus: Currency translation effects | 1 | % | 2 | % | 1 | % | 1 | % | 1 | % | 9 | % | 2 | % | - | % | 2 | % | ||
| Constant currency sales change | (4 | )% | (2 | )% | 17 | % | (24 | )% | 21 | % | 1 | % | 1 | % | (16 | )% | (2 | )% |
| Six Months Ended June 30, 2017 | ||||||||||||||||||||
| Breathing Apparatus | Fire and Rescue Helmets | Industrial Head Protection | Portable Gas Detection | Fixed Gas and Flame Detection | Fall Protection | Core Sales | Non-Core Sales | Net Sales | ||||||||||||
| GAAP reported sales change | (12 | )% | 3 | % | 20 | % | (14 | )% | 6 | % | (19 | )% | (5 | )% | (17 | )% | (8 | )% | ||
| Plus: Currency translation effects | 1 | % | 2 | % | 1 | % | 1 | % | 2 | % | 8 | % | 3 | % | 1 | % | 3 | % | ||
| Constant currency sales change | (11 | )% | 5 | % | 21 | % | (13 | )% | 8 | % | (11 | )% | (2 | )% | (16 | )% | (5 | )% |
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 June 30, 2017 | ||||||||
| Consolidated | Americas | International | ||||||
| Fall Protection | 16 | % | 32 | % | 1 | % | ||
| Industrial Head Protection | 15 | % | 14 | % | 17 | % | ||
| Fixed Gas and Flame Detection | 11 | % | 2 | % | 21 | % | ||
| Fire and Rescue Helmets | (3 | )% | (5 | )% | (2 | )% | ||
| Portable Gas Detection | (8 | )% | 3 | % | (24 | )% | ||
| Breathing Apparatus | (12 | )% | (16 | )% | (4 | )% | ||
| Core Sales | - | % | - | % | 1 | % | ||
| Non-Core Sales | (12 | )% | (9 | )% | (16 | )% | ||
| Net Sales | (2 | )% | (2 | )% | (2 | )% |
| Six Months Ended June 30, 2017 | ||||||||
| Consolidated | Americas | International | ||||||
| Fall Protection | 4 | % | 23 | % | (11 | )% | ||
| Industrial Head Protection | 16 | % | 14 | % | 21 | % | ||
| Fixed Gas and Flame Detection | 1 | % | (4 | )% | 8 | % | ||
| Fire and Rescue Helmets | 1 | % | (5 | )% | 5 | % | ||
| Portable Gas Detection | 1 | % | 10 | % | (13 | )% | ||
| Breathing Apparatus | (12 | )% | (12 | )% | (11 | )% | ||
| Core Sales | (1 | )% | - | % | (2 | )% | ||
| Non-Core Sales | (12 | )% | (7 | )% | (16 | )% | ||
| Net Sales | (3 | )% | (1 | )% | (5 | )% |
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 amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
| 2017 | 2016 | % Change | 2017 | 2016 | % Change | ||||||||||||||
| Income from continuing operations attributable to MSA Safety Inc. | $ | 12,532 | $ | 29,306 | (57)% | $ | 26,945 | $ | 41,989 | (36)% | |||||||||
| Tax (benefit) associated with ASU 2016-09: Improvements to employee share-based payment accounting | (4,030 | ) | - | (6,812 | ) | - | |||||||||||||
| Tax charges associated with European reorganization | - | - | - | 3,600 | |||||||||||||||
| Subtotal | 8,502 | 29,306 | (71)% | 20,133 | 45,589 | (56)% | |||||||||||||
| Self-insured legal settlements and defense costs (a) | 29,653 | 275 | 29,685 | 295 | |||||||||||||||
| Currency exchange losses (gains), net | 2,851 | (242 | ) | 3,431 | 1,708 | ||||||||||||||
| Strategic transaction costs | 1,642 | - | 2,979 | 511 | |||||||||||||||
| Restructuring charges | 967 | 1,338 | 13,706 | 1,808 | |||||||||||||||
| Asset related losses (gains), net | 137 | (216 | ) | 169 | (559 | ) | |||||||||||||
| Income tax expense on adjustments | (10,681 | ) | (390 | ) | (14,769 | ) | (1,295 | ) | |||||||||||
| Adjusted earnings | 33,071 | 30,071 | 10% | 55,334 | 48,057 | 15% | |||||||||||||
| Adjusted earnings per diluted share | $ | 0.85 | $ | 0.79 | 8% | $ | 1.43 | $ | 1.27 | 13% |
(a) Represents a charge related to product liability settlements reached in August 2017 and estimated indemnity for all other asserted cumulative trauma product liability claims. See further description under Cumulative Trauma Product Liability Charge section of Press Release narrative.
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 determined on a GAAP basis as well as adjusted earnings.
Established in 1914, MSA Safety Incorporated is the global leader in the development, manufacture and supply of safety products that protect people and facility infrastructures. Many MSA products integrate a combination of electronics, 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 the oil, gas and petrochemical industry, the fire service, the construction industry, 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, fire and rescue helmets, and fall protection devices. With 2016 revenues of $1.15 billion, MSA employs approximately 4,300 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. Forward-looking statements include but are not limited to all projections and anticipated levels of future performance. Forward looking statements involve risks, uncertainties and other factors that may cause our actual results to differ materially from those discussed herein. Any number of factors could cause actual results to differ materially from projections or forward looking statements, including without limitation global economic conditions, spending patterns of government agencies, competitive pressures, the impact of acquisitions and related integration activities, product liability claims, the success of new product introductions, currency exchange rate fluctuations and the risks of doing business in foreign countries. A full listing of these risks, uncertainties and other factors are detailed from time-to-time in our filings with the United States Securities and Exchange Commission ("SEC"), including our most recent Form 10-K filed on February 28, 2017. You are strongly urged to review all such filings for a more detailed discussion of such risks and uncertainties. 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. MSA undertakes no duty to publicly update any forward looking statements contained herein, except as required by law.
Non-GAAP Financial Measures:
This earnings release includes certain non-GAAP financial measures. These financial measures include constant currency revenue growth, adjusted operating income, adjusted operating margin, adjusted earnings and adjusted earnings per diluted share. The presentation of these financial measures does not comply with U.S. generally accepted accounting principles ("GAAP"). For an explanation of these measures, together 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.