Full Press Release Details
FROM: MSA Safety Incorporated
Media Relations Contact: Mark Deasy (724) 741 - 8570
Investor Relations Contact: Elyse Lorenzato (724) 741 - 8525
MSA Safety Announces Third Quarter Results
Focus on innovation and productivity drives strong revenue growth, operating margin expansion and cash flow
PITTSBURGH, October 23, 2019 - Global safety equipment manufacturer MSA Safety Incorporated (NYSE: MSA) today reported results for the third quarter of 2019.
Quarterly Highlights
Comments from Management
"MSA delivered a strong quarter of revenue growth, margin expansion and cash flow," commented Nish Vartanian, MSA President and CEO. "The pace of our top-line growth accelerated in the quarter to 8 percent, largely on continued market-share gains in fall protection and gas detection."
MSA's latest innovations in these product areas include the company's V-Series line of fall protection harnesses and the 5000 series of next generation fixed gas monitors. For the quarter, more than 35 percent of MSA's total sales were from products introduced within the past five years. "This focus on innovation, combined with cost discipline and our continued efforts to enhance productivity, all contributed to our incremental margin profile of more than 30 percent," he said.
Mr. Vartanian noted that the benefits of MSA's broad end market exposure and diversified portfolio were evident in the company's quarterly results. "We were able to realize high-single digit revenue growth despite product certification delays that we - and all manufacturers of firefighting breathing equipment - had to deal with in the U.S. Fire Service market during the third quarter," he commented. In particular, he noted that the certification and launch of the company's next generation G1 self-contained breathing apparatus (SCBA) occurred on September 30, 2019, approximately six weeks later than expected. Mr. Vartanian added that the impact of lower SCBA volumes in the quarter was mostly offset by revenue growth in firefighter helmets and protective apparel.
"Incoming order pace gained momentum in the quarter with a book-to-bill ratio exceeding 100 percent. With this healthy backlog and a strong balance sheet, we remain well positioned to deliver on our growth expectations for 2019 and make investments that strengthen our positions across key markets," Mr. Vartanian concluded.
MSA Safety Incorporated
Condensed Consolidated Statement of Income (Unaudited)
(In thousands, except per share amounts)
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Net sales | $ | 351,014 | $ | 331,096 | $ | 1,026,726 | $ | 996,320 | |||||||
| Cost of products sold | 192,313 | 182,794 | 556,959 | 546,844 | |||||||||||
| Gross profit | 158,701 | 148,302 | 469,767 | 449,476 | |||||||||||
| Selling, general and administrative | 82,900 | 78,013 | 245,337 | 240,226 | |||||||||||
| Research and development | 13,520 | 13,296 | 41,482 | 39,752 | |||||||||||
| Restructuring charges | 1,850 | 2,615 | 11,203 | 10,223 | |||||||||||
| Currency exchange (gains) losses, net (a) | (913 | ) | (252 | ) | 17,338 | 2,571 | |||||||||
| Product liability expense | 1,730 | 14,627 | 8,155 | 25,469 | |||||||||||
| Operating income | 59,614 | 40,003 | 146,252 | 131,235 | |||||||||||
| Interest expense | 4,259 | 4,492 | 11,089 | 14,454 | |||||||||||
| Loss on extinguishment of debt | - | 1,494 | - | 1,494 | |||||||||||
| Other income, net | (2,929 | ) | (4,252 | ) | (8,850 | ) | (8,292 | ) | |||||||
| Total other expense, net | 1,330 | 1,734 | 2,239 | 7,656 | |||||||||||
| Income before income taxes | 58,284 | 38,269 | 144,013 | 123,579 | |||||||||||
| Provision for income taxes | 15,673 | 4,206 | 37,913 | 23,606 | |||||||||||
| Net income | 42,611 | 34,063 | 106,100 | 99,973 | |||||||||||
| Net income attributable to noncontrolling interests | (372 | ) | (346 | ) | (822 | ) | (706 | ) | |||||||
| Net income attributable to MSA Safety Incorporated | $ | 42,239 | $ | 33,717 | $ | 105,278 | $ | 99,267 | |||||||
| Earnings per share attributable to MSA Safety Incorporated common shareholders: | |||||||||||||||
| Basic | $ | 1.09 | $ | 0.88 | $ | 2.72 | $ | 2.59 | |||||||
| Diluted | $ | 1.08 | $ | 0.86 | $ | 2.69 | $ | 2.55 | |||||||
| Basic shares outstanding | 38,649 | 38,417 | 38,617 | 38,328 | |||||||||||
| Diluted shares outstanding | 39,144 | 39,036 | 39,130 | 38,914 |
(a) Year-to-date currency exchange losses includes a $15.4 million non-cash charge related to the recognition of currency translation adjustments associated with the closure of MSA's South Africa affiliates.
MSA Safety Incorporated
Condensed Consolidated Balance Sheet (Unaudited)
| September 30, 2019 | December 31, 2018 | ||||||
| Assets | |||||||
| Cash and cash equivalents | $ | 108,481 | $ | 140,095 | |||
| Trade receivables, net | 248,406 | 245,032 | |||||
| Inventories | 192,199 | 156,602 | |||||
| Notes receivable, insurance companies | 3,646 | 3,555 | |||||
| Other current assets | 133,696 | 111,339 | |||||
| Total current assets | 686,428 | 656,623 | |||||
| Property, net | 158,957 | 157,940 | |||||
| Operating lease assets, net | 50,470 | - | |||||
| Prepaid pension cost | 68,387 | 57,568 | |||||
| Goodwill | 428,629 | 413,640 | |||||
| Notes receivable, insurance companies, noncurrent | 51,980 | 56,012 | |||||
| Insurance receivable, noncurrent | 48,029 | 56,866 | |||||
| Other noncurrent assets | 206,263 | 209,363 | |||||
| Total assets | $ | 1,699,143 | $ | 1,608,012 | |||
| Liabilities and shareholders' equity | |||||||
| Notes payable and current portion of long-term debt, net | $ | 20,000 | $ | 20,063 | |||
| Accounts payable | 69,773 | 78,367 | |||||
| Other current liabilities | 172,435 | 183,630 | |||||
| Total current liabilities | 262,208 | 282,060 | |||||
| Long-term debt, net | 352,073 | 341,311 | |||||
| Pensions and other employee benefits | 163,342 | 166,101 | |||||
| Noncurrent operating lease liabilities | 40,836 | - | |||||
| Deferred tax liabilities | 11,251 | 7,164 | |||||
| Product liability and other noncurrent liabilities | 161,128 | 171,857 | |||||
| Total shareholders' equity | 708,305 | 639,519 | |||||
| Total liabilities and shareholders' equity | $ | 1,699,143 | $ | 1,608,012 |
MSA Safety Incorporated
Condensed Consolidated Statement of Cash Flows (Unaudited)
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Net income | $ | 42,611 | $ | 34,063 | $ | 106,100 | $ | 99,973 | |||||||
| Depreciation and amortization | 9,547 | 9,378 | 28,339 | 28,585 | |||||||||||
| Change in working capital and other operating | (1,453 | ) | 77,374 | (46,189 | ) | 57,639 | |||||||||
| Cash flow from operating activities | 50,705 | 120,815 | 88,250 | 186,197 | |||||||||||
| Capital expenditures | (9,998 | ) | (9,808 | ) | (23,523 | ) | (18,620 | ) | |||||||
| Acquisition, net of cash acquired | - | - | (33,196 | ) | - | ||||||||||
| Change in short-term investments | 113 | (57,090 | ) | (17,189 | ) | (57,090 | ) | ||||||||
| Property disposals | 42 | 942 | 123 | 4,001 | |||||||||||
| Cash flow used in investing activities | (9,843 | ) | (65,956 | ) | (73,785 | ) | (71,709 | ) | |||||||
| Change in debt | (24,127 | ) | (38,390 | ) | 12,937 | (80,675 | ) | ||||||||
| Cash dividends paid | (16,281 | ) | (14,624 | ) | (47,215 | ) | (42,605 | ) | |||||||
| Other financing | 836 | (1,313 | ) | (6,555 | ) | (575 | ) | ||||||||
| Cash flow used in financing activities | (39,572 | ) | (54,327 | ) | (40,833 | ) | (123,855 | ) | |||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (4,393 | ) | (1,822 | ) | (5,378 | ) | (9,952 | ) | |||||||
| Decrease in cash, cash equivalents and restricted cash | $ | (3,103 | ) | $ | (1,290 | ) | $ | (31,746 | ) | $ | (19,319 | ) |
MSA Safety Incorporated
Segment Information (Unaudited)
(In thousands, except percentage amounts)
| Americas | International | Corporate | Consolidated | ||||||||||||
| Three Months Ended September 30, 2019 | |||||||||||||||
| Sales to external customers | $ | 234,624 | $ | 116,390 | $ | - | $ | 351,014 | |||||||
| Operating income | 59,614 | ||||||||||||||
| Operating margin % | 17.0 | % | |||||||||||||
| Restructuring charges | 1,850 | ||||||||||||||
| Currency exchange (gains), net | (913 | ) | |||||||||||||
| Product liability expense | 1,730 | ||||||||||||||
| Strategic transaction costs | 952 | ||||||||||||||
| Adjusted operating income (loss) | 58,971 | 13,776 | (9,514 | ) | 63,233 | ||||||||||
| Adjusted operating margin % | 25.1 | % | 11.8 | % | 18.0 | % | |||||||||
| Depreciation and amortization | 9,547 | ||||||||||||||
| Adjusted EBITDA | 65,342 | 16,854 | (9,416 | ) | 72,780 | ||||||||||
| Adjusted EBITDA % | 27.8 | % | 14.5 | % | 20.7 | % | |||||||||
| Three Months Ended September 30, 2018 | |||||||||||||||
| Sales to external customers | $ | 209,343 | $ | 121,753 | $ | - | $ | 331,096 | |||||||
| Operating income | 40,003 | ||||||||||||||
| Operating margin % | 12.1 | % | |||||||||||||
| Restructuring charges | 2,615 | ||||||||||||||
| Currency exchange (gains), net | (252 | ) | |||||||||||||
| Product liability expense | 14,627 | ||||||||||||||
| Strategic transaction costs | 56 | ||||||||||||||
| Adjusted operating income (loss) | 51,532 | 13,329 | (7,812 | ) | 57,049 | ||||||||||
| Adjusted operating margin % | 24.6 | % | 10.9 | % | 17.2 | % | |||||||||
| Depreciation and amortization | 9,378 | ||||||||||||||
| Adjusted EBITDA | 57,573 | 16,559 | (7,705 | ) | 66,427 | ||||||||||
| Adjusted EBITDA % | 27.5 | % | 13.6 | % | 20.1 | % |
| Americas | International | Corporate | Consolidated | ||||||||||||
| Nine Months Ended September 30, 2019 | |||||||||||||||
| Sales to external customers | $ | 679,699 | $ | 347,027 | $ | - | $ | 1,026,726 | |||||||
| Operating income | 146,252 | ||||||||||||||
| Operating margin % | 14.2 | % | |||||||||||||
| Restructuring charges | 11,203 | ||||||||||||||
| Currency exchange losses, net | 17,338 | ||||||||||||||
| Product liability expense | 8,155 | ||||||||||||||
| Strategic transaction costs | 2,937 | ||||||||||||||
| Adjusted operating income (loss) | 171,463 | 39,888 | (25,466 | ) | 185,885 | ||||||||||
| Adjusted operating margin % | 25.2 | % | 11.5 | % | 18.1 | % | |||||||||
| Depreciation and amortization | 28,339 | ||||||||||||||
| Adjusted EBITDA | 190,084 | 49,313 | (25,173 | ) | 214,224 | ||||||||||
| Adjusted EBITDA % | 28.0 | % | 14.2 | % | 20.9 | % | |||||||||
| Nine Months Ended September 30, 2018 | |||||||||||||||
| Sales to external customers | $ | 633,812 | $ | 362,508 | $ | - | $ | 996,320 | |||||||
| Operating income | 131,235 | ||||||||||||||
| Operating margin % | 13.2 | % | |||||||||||||
| Restructuring charges | 10,223 | ||||||||||||||
| Currency exchange losses, net | 2,571 | ||||||||||||||
| Product liability expense | 25,469 | ||||||||||||||
| Strategic transaction costs | 208 | ||||||||||||||
| Adjusted operating income (loss) | 151,456 | 41,960 | (23,710 | ) | 169,706 | ||||||||||
| Adjusted operating margin % | 23.9 | % | 11.6 | % | 17.0 | % | |||||||||
| Depreciation and amortization | 28,585 | ||||||||||||||
| Adjusted EBITDA | 169,691 | 52,001 | (23,401 | ) | 198,291 | ||||||||||
| Adjusted EBITDA % | 26.8 | % | 14.3 | % | 19.9 | % |
The Americas segment is comprised of our operations in North America and Latin America geographies. The International segment is comprised of our operations in all geographies outside of the Americas. 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), adjusted operating margin, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) and adjusted EBITDA 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), adjusted operating margin, adjusted EBITDA and adjusted EBITDA margin are useful metrics for investors. Adjusted operating income (loss) is defined as operating income excluding restructuring charges, currency exchange gains / losses, product liability expense and strategic transaction costs and adjusted operating margin is defined as adjusted operating income (loss) divided by segment sales to external customers. Adjusted EBITDA is defined as adjusted operating income (loss) plus depreciation and amortization and adjusted EBITDA margin is defined as adjusted EBITDA divided by segment sales to external customers. Adjusted operating income (loss), adjusted operating margin, adjusted EBITDA and adjusted EBITDA 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), adjusted operating margin, adjusted EBITDA and adjusted EBITDA 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 September 30, 2019 | ||||||||||||||||||||
| Breathing Apparatus | Firefighter Helmets and Protective Apparel | Industrial Head Protection | Portable Gas Detection | Fixed Gas and Flame Detection | Fall Protection | Core Sales | Non-Core Sales | Net Sales | ||||||||||||
| GAAP reported sales change | (11 | )% | 19 | % | 2 | % | 12 | % | 17 | % | 24 | % | 7 | % | (3 | )% | 6 | % | ||
| Plus: Currency translation effects | 1 | % | 2 | % | 2 | % | 2 | % | 1 | % | 3 | % | 2 | % | 2 | % | 2 | % | ||
| Constant currency sales change | (10 | )% | 21 | % | 4 | % | 14 | % | 18 | % | 27 | % | 9 | % | (1 | )% | 8 | % |
| Nine Months Ended September 30, 2019 | ||||||||||||||||||||
| Breathing Apparatus | Firefighter Helmets and Protective Apparel | Industrial Head Protection | Portable Gas Detection | Fixed Gas and Flame Detection | Fall Protection | Core Sales | Non-Core Sales | Net Sales | ||||||||||||
| GAAP reported sales change | (4 | )% | 6 | % | 1 | % | 4 | % | 9 | % | 21 | % | 4 | % | (6 | )% | 3 | % | ||
| Plus: Currency translation effects | 2 | % | 2 | % | 2 | % | 2 | % | 3 | % | 4 | % | 3 | % | 3 | % | 2 | % | ||
| Constant currency sales change | (2 | )% | 8 | % | 3 | % | 6 | % | 12 | % | 25 | % | 7 | % | (3 | )% | 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
Reconciliation of As Reported Financial Measures to Non-GAAP Financial Measures
Constant currency revenue growth (Unaudited)
| Three Months Ended September 30, 2019 | ||||||||||||||||||||
| Breathing Apparatus | Firefighter Helmets and Protective Apparel | Industrial Head Protection | Portable Gas Detection | Fixed Gas and Flame Detection | Fall Protection | Core Sales | Non-Core Sales | Net Sales | ||||||||||||
| GAAP reported sales change | (8 | )% | 15 | % | 1 | % | 13 | % | 27 | % | 40 | % | 11 | % | 22 | % | 12 | % | ||
| Plus: Currency translation effects | - | % | 1 | % | 1 | % | 1 | % | - | % | 1 | % | - | % | 1 | % | 1 | % | ||
| Constant currency sales change | (8 | )% | 16 | % | 2 | % | 14 | % | 27 | % | 41 | % | 11 | % | 23 | % | 13 | % |
| Nine Months Ended September 30, 2019 | ||||||||||||||||||||
| Breathing Apparatus | Firefighter Helmets and Protective Apparel | Industrial Head Protection | Portable Gas Detection | Fixed Gas and Flame Detection | Fall Protection | Core Sales | Non-Core Sales | Net Sales | ||||||||||||
| GAAP reported sales change | 1 | % | 6 | % | - | % | 4 | % | 16 | % | 31 | % | 7 | % | 9 | % | 7 | % | ||
| Plus: Currency translation effects | - | % | - | % | 1 | % | 1 | % | - | % | 1 | % | 1 | % | 1 | % | 1 | % | ||
| Constant currency sales change | 1 | % | 6 | % | 1 | % | 5 | % | 16 | % | 32 | % | 8 | % | 10 | % | 8 | % |
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 September 30, 2019 | ||||||||||||||||||||
| Breathing Apparatus | Firefighter Helmets and Protective Apparel | Industrial Head Protection | Portable Gas Detection | Fixed Gas and Flame Detection | Fall Protection | Core Sales | Non-Core Sales | Net Sales | ||||||||||||
| GAAP reported sales change | (17 | )% | 43 | % | 6 | % | 10 | % | 6 | % | 2 | % | 1 | % | (28 | )% | (4 | )% | ||
| Plus: Currency translation effects | 3 | % | 6 | % | 3 | % | 3 | % | 3 | % | 5 | % | 3 | % | 3 | % | 3 | % | ||
| Constant currency sales change | (14 | )% | 49 | % | 9 | % | 13 | % | 9 | % | 7 | % | 4 | % | (25 | )% | (1 | )% |
| Nine Months Ended September 30, 2019 | ||||||||||||||||||||
| Breathing Apparatus | Firefighter Helmets and Protective Apparel | 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 | )% | 8 | % | 5 | % | 3 | % | 2 | % | 8 | % | - | % | (21 | )% | (4 | )% | ||
| Plus: Currency translation effects | 5 | % | 7 | % | 6 | % | 6 | % | 5 | % | 6 | % | 5 | % | 4 | % | 5 | % | ||
| Constant currency sales change | (7 | )% | 15 | % | 11 | % | 9 | % | 7 | % | 14 | % | 5 | % | (17 | )% | 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
Supplemental Segment Information (Unaudited)
Summary of constant currency revenue growth by segment and product group
| Three Months Ended September 30, 2019 | ||||||||
| Consolidated | Americas | International | ||||||
| Fall Protection | 27 | % | 41 | % | 7 | % | ||
| Firefighter Helmets and Protective Apparel | 21 | % | 16 | % | 49 | % | ||
| Fixed Gas and Flame Detection | 18 | % | 27 | % | 9 | % | ||
| Portable Gas Detection | 14 | % | 14 | % | 13 | % | ||
| Industrial Head Protection | 4 | % | 2 | % | 9 | % | ||
| Breathing Apparatus | (10 | )% | (8 | )% | (14 | )% | ||
| Core Sales | 9 | % | 11 | % | 4 | % | ||
| Non-Core Sales | (1 | )% | 23 | % | (25 | )% | ||
| Net Sales | 8 | % | 13 | % | (1 | )% |
| Nine Months Ended September 30, 2019 | ||||||||
| Consolidated | Americas | International | ||||||
| Fall Protection | 25 | % | 32 | % | 14 | % | ||
| Firefighter Helmets and Protective Apparel | 8 | % | 6 | % | 15 | % | ||
| Fixed Gas and Flame Detection | 12 | % | 16 | % | 7 | % | ||
| Portable Gas Detection | 6 | % | 5 | % | 9 | % | ||
| Industrial Head Protection | 3 | % | 1 | % | 11 | % | ||
| Breathing Apparatus | (2 | )% | 1 | % | (7 | )% | ||
| Core Sales | 7 | % | 8 | % | 5 | % | ||
| Non-Core Sales | (3 | )% | 10 | % | (17 | )% | ||
| Net Sales | 5 | % | 8 | % | 1 | % |
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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||
| 2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||||||
| Net income attributable to MSA Safety Incorporated | $ | 42,239 | $ | 33,717 | 25% | 105,278 | 99,267 | 6% | |||||||||||
| Tax (benefit) associated with U.S. Tax Reform | - | (1,956 | ) | - | (1,956 | ) | |||||||||||||
| Non-deductible non-cash charge related to the recognition of currency translation adjustments (a) | - | - | 15,359 | - | |||||||||||||||
| Tax benefit associated with ASU 2016-09: Improvements to employee share-based payment accounting | (187 | ) | (430 | ) | (2,180 | ) | (2,306 | ) | |||||||||||
| Subtotal | 42,052 | 31,331 | 34% | 118,457 | 95,005 | 25% | |||||||||||||
| Product liability expense | 1,730 | 14,627 | 8,155 | 25,469 | |||||||||||||||
| Restructuring charges | 1,850 | 2,615 | 11,203 | 10,223 | |||||||||||||||
| Strategic transaction costs | 952 | 56 | 2,937 | 208 | |||||||||||||||
| Currency exchange (gains) losses, net | (913 | ) | (252 | ) | 1,979 | 2,571 | |||||||||||||
| Loss on extinguishment of debt | - | 1,494 | - | 1,494 | |||||||||||||||
| Asset related losses (gains), net | 38 | (733 | ) | 271 | 415 | ||||||||||||||
| Income tax expense on adjustments | (878 | ) | (4,024 | ) | (5,912 | ) | (9,645 | ) | |||||||||||
| Adjusted earnings | $ | 44,831 | $ | 45,114 | (1)% | $ | 137,090 | $ | 125,740 | 9% | |||||||||
| Adjusted earnings per diluted share | $ | 1.15 | $ | 1.16 | (1)% | $ | 3.50 | $ | 3.23 | 8% |
(a) Included in Currency exchange (gains) losses, net on the Statement of Income.
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, firefighter helmets and protective apparel, and fall protection devices. With 2018 revenues of $1.4 billion, MSA employs approximately 4,800 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 22, 2019. 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 press release includes certain non-GAAP financial measures. These financial measures include constant currency revenue growth, adjusted operating income, adjusted operating margin, adjusted EBITDA, adjusted EBITDA 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.