MSA Safety Announces Second Quarter Results

Rhea-AI Summary

MSA Safety reported Q2 2020 revenue of $314 million, down 10% year-over-year, with GAAP operating income of $48 million. Adjusted earnings per share decreased to $1.11. Despite challenging conditions, adjusted operating margins improved. Revenue growth in air-purifying respirators surged 63% as investments were made to modernize manufacturing. MSA's debt stands at $335 million, with ample liquidity of over $136 million in cash. Management anticipates ongoing challenges in the second half of 2020 but remains focused on long-term growth strategies.

Positive

• 63% revenue growth in air-purifying respirators.
• Operating cash flow nearly doubled to $69 million, indicating strong working capital management.
• Adjusted operating margin expanded by 30 basis points despite lower sales volume.

Negative

• Revenue declined 10% compared to the previous year.
• GAAP earnings decreased to $0.92 per diluted share, down from $1.01 a year ago.
• Operating income fell by 11% year-over-year.

PITTSBURGH, July 29, 2020 /PRNewswire/ -- Global safety equipment manufacturer MSA Safety Incorporated (NYSE: MSA) today reported results for the second quarter of 2020.

Quarterly Highlights

• Revenue was $314 million, decreasing 10 percent from a year ago on a reported basis and 8 percent on a constant currency basis.
• GAAP operating income was $48 million or 15.4 percent of sales, compared to $54 million or 15.6 percent of sales in the same period a year ago. Adjusted operating income was $59 million or 18.7 percent of sales, compared to $64 million or 18.4 percent of sales in the same period a year ago.
• GAAP earnings were $36 million or $0.92 per diluted share, compared to $40 million or $1.01 per diluted share in the same period a year ago. Adjusted earnings were $44 million or $1.11 per diluted share, compared to $48 million or $1.22 per diluted share in the same period a year ago. Adjusted earnings include $0.03 per share of headwind from higher noncash pension expense, in line with the company's expectations.
• Operating cash flow was $69 million, nearly doubling from a year ago on strong working capital management and lower product liability payments. MSA paid down $37 million of debt, funded $17 million of dividends, and invested $13 million in capital expenditures in the quarter.
• MSA's debt balance was $335 million at quarter end, reflecting 1.2x adjusted EBITDA on a gross basis or 0.7x adjusted EBITDA on a net basis. With more than $136 million in cash and significant room available under its current debt covenants, the company has ample liquidity and flexibility to maintain its balanced capital allocation strategy.

Comments from Management

"Our second quarter results reflect strong execution and a resilient business model in a challenging environment," said Nish Vartanian, MSA Chairman, President and CEO.  "Our diversified portfolio and continued focus on productivity yielded adjusted operating margin expansion of 30 basis points. It's particularly noteworthy that we achieved this level of margin performance on lighter sales volume," he said. Mr. Vartanian added that in addition to lower discretionary costs, strategic growth and profitability improvement programs supported the strong performance. "The returns from our investments in our respirator manufacturing capabilities, combined with solid execution of our International segment margin improvement programs, were clear highlights of the quarter."

The company's quarterly results include 63 percent revenue growth in air-purifying respirators. "In response to the global shortage of personal protective equipment, we have started to make investments to ramp up and modernize our manufacturing operations associated with the air-purifying respirator side of our business," Mr. Vartanian explained.  "These investments will help us improve lead times for our existing industrial and first responder customers, while positioning MSA to respond to potential growth opportunities."  He added that the company's unwavering mission of protecting people at work, in an ongoing pandemic environment, is more relevant than ever before.

In MSA's International segment, profitability improvement programs helped drive adjusted operating margin expansion of 310 basis points in the quarter and 240 basis points for the year to date. "Our focus on price realization across MSA International is supporting gross profit improvements, and previously executed restructuring programs are enabling operating expense leverage," said Mr. Vartanian.

Mr. Vartanian noted that business conditions remain challenging and a number of external factors could impact how the second half of 2020 unfolds for the company.  "While we expect a tough environment in the near term, we continue to focus on leveraging our diversified portfolio, controlling discretionary costs, and investing in long-term growth and productivity programs that will position MSA to emerge from this downturn as an even stronger organization," he 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,
	2020				2019				2020				2019
Net sales	$	314,438			$	349,675			$	655,583			$	675,713
Cost of products sold	172,841				188,591				356,627				364,647
Gross profit	141,597				161,084				298,956				311,066
Selling, general and administrative	69,034				84,009				149,271				162,437
Research and development	13,760				14,256				27,872				27,962
Restructuring charges	8,865				3,522				10,872				9,353
Currency exchange losses, net (a)	793				1,290				1,063				18,251
Product liability expense	851				3,529				2,802				6,425
Operating income	48,294				54,478				107,076				86,638
Interest expense	2,459				4,470				5,602				6,830
Other income, net	(2,000)				(3,342)				(3,258)				(5,921)
Total other expense, net	459				1,128				2,344				909
Income before income taxes	47,835				53,350				104,732				85,729
Provision for income taxes	11,429				13,238				24,523				22,241
Net income	36,406				40,112				80,209				63,488
Net income attributable to noncontrolling interests	(340)				(306)				(468)				(450)
Net income attributable to MSA Safety Incorporated	$	36,066			$	39,806			$	79,741			$	63,038
Earnings per share attributable to MSA Safety Incorporated common shareholders:
Basic	$	0.93			$	1.03			$	2.05			$	1.63
Diluted	$	0.92			$	1.01			$	2.03			$	1.61
Basic shares outstanding	38,830				38,663				38,826				38,602
Diluted shares outstanding	39,195				39,160				39,273				39,124

(a) currency exchange losses for the six months ended June 30, 2019 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)
(In thousands)
	June 30, 2020				December 31, 2019
Assets
Cash and cash equivalents	$	136,238			$	152,195
Trade receivables, net	240,137				255,082
Inventories	225,410				185,027
Notes receivable, insurance companies	3,736				3,676
Other current assets	116,029				97,383
Total current assets	721,550				693,363
Property, net	170,184				167,038
Operating lease assets, net	47,106				51,675
Prepaid pension cost	80,775				75,066
Goodwill	430,671				436,679
Notes receivable, insurance companies, noncurrent	52,988				52,336
Insurance receivable, noncurrent	51,033				56,169
Other noncurrent assets	198,628				207,367
Total assets	$	1,752,935			$	1,739,693
Liabilities and shareholders' equity
Notes payable and current portion of long-term debt, net	$	20,000			$	20,000
Accounts payable	96,513				89,120
Other current liabilities	176,845				168,389
Total current liabilities	293,358				277,509
Long-term debt, net	314,500				328,394
Pensions and other employee benefits	185,464				186,697
Noncurrent operating lease liabilities	38,826				42,632
Deferred tax liabilities	10,533				9,787
Product liability and other noncurrent liabilities	161,600				162,101
Total shareholders' equity	748,654				732,573
Total liabilities and shareholders' equity	$	1,752,935			$	1,739,693

 

MSA Safety Incorporated
Condensed Consolidated Statement of Cash Flows (Unaudited)
(In thousands)
	Three Months Ended June 30,								Six Months Ended June 30,
	2020				2019				2020				2019
Net income	$	36,406			$	40,112			$	80,209			$	63,488
Depreciation and amortization	9,786				9,466				19,428				18,792
Change in working capital and other operating	23,232				(13,250)				(16,606)				(44,735)
Cash flow from operating activities	69,424				36,328				83,031				37,545
Capital expenditures	(13,272)				(8,628)				(19,834)				(13,525)
Acquisition, net of cash acquired	—				(33,196)				—				(33,196)
Change in short-term investments	10,210				1,639				(9,402)				(17,302)
Property disposals and other investing	(9)				69				83				81
Cash flow used in investing activities	(3,071)				(40,116)				(29,153)				(63,942)
Change in debt	(37,000)				22,973				(9,000)				37,064
Cash dividends paid	(16,721)				(16,282)				(33,052)				(30,934)
Other financing	873				(1,410)				(24,124)				(7,391)
Cash flow (used in) from financing activities	(52,848)				5,281				(66,176)				(1,261)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	102				2,236				(3,654)				(985)
Increase (decrease) in cash, cash equivalents and restricted cash	$	13,607			$	3,729			$	(15,952)			$	(28,643)

 

MSA Safety Incorporated
Segment Information (Unaudited)
(In thousands, except percentage amounts)
	Americas				International				Corporate				Consolidated
Three Months Ended June 30, 2020
Sales to external customers	$	204,231			$	110,207			$	—			$	314,438
Operating income													48,294
Operating margin %													15.4		%
Restructuring charges													8,865
Currency exchange losses, net													793
Product liability expense													851
Strategic transaction costs													64
Adjusted operating income (loss)	49,003				17,402				(7,538)				58,867
Adjusted operating margin %	24.0		%		15.8		%						18.7		%
Depreciation and amortization													9,786
Adjusted EBITDA	55,620				20,474				(7,441)				68,653
Adjusted EBITDA %	27.2		%		18.6		%						21.8		%
Three Months Ended June 30, 2019
Sales to external customers	$	231,389			$	118,286			$	—			$	349,675
Operating income													54,478
Operating margin %													15.6		%
Restructuring charges													3,522
Currency exchange losses, net													1,290
Product liability expense													3,529
Strategic transaction costs													1,529
Adjusted operating income (loss)	57,689				15,072				(8,413)				64,348
Adjusted operating margin %	24.9		%		12.7		%						18.4		%
Depreciation and amortization													9,466
Adjusted EBITDA	63,842				18,288				(8,316)				73,814
Adjusted EBITDA %	27.6		%		15.5		%						21.1		%

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
Segment Information (Unaudited)
(In thousands, except percentage amounts)
	Americas				International				Corporate				Consolidated
Six Months Ended June 30, 2020
Sales to external customers	$	435,484			$	220,099			$	—			$	655,583
Operating income													107,076
Operating margin %													16.3		%
Restructuring charges													10,872
Currency exchange losses, net													1,063
Product liability expense													2,802
Strategic transaction costs													161
COVID-19 related costs													757
Adjusted operating income (loss)	108,811				30,073				(16,153)				122,731
Adjusted operating margin %	25.0		%		13.7		%						18.7		%
Depreciation and amortization													19,428
Adjusted EBITDA	121,878				36,239				(15,958)				142,159
Adjusted EBITDA %	28.0		%		16.5		%						21.7		%
Six Months Ended June 30, 2019
Sales to external customers	$	445,076			$	230,637			$	—			$	675,713
Operating income													86,638
Operating margin %													12.8		%
Restructuring charges													9,353
Currency exchange losses, net													18,251
Product liability expense													6,425
Strategic transaction costs													1,985
Adjusted operating income (loss)	112,492				26,112				(15,952)				122,652
Adjusted operating margin %	25.3		%		11.3		%						18.2		%
Depreciation and amortization													18,792
Adjusted EBITDA	124,742				32,459				(15,757)				141,444
Adjusted EBITDA %	28.0		%		14.1		%						20.9		%

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, strategic transaction costs and COVID-19 related 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)
Consolidated
	Three Months Ended June 30, 2020
	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	%	(17)	%	(21)	%	(33)	%	(7)	%	(32)	%	(15)	%		22	%		(10)	%
Plus: Currency translation effects	2	%	—	%	5	%	2	%	1	%	3	%	2	%		5	%		2	%
Constant currency sales change	3	%	(17)	%	(16)	%	(31)	%	(6)	%	(29)	%	(13)	%		27	%		(8)	%
	Six Months Ended June 30, 2020
	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	%	(10)	%	(12)	%	(16)	%	4	%	(21)	%	(6)	%		22	%		(3)	%
Plus: Currency translation effects	1	%	—	%	5	%	2	%	1	%	3	%	1	%		5	%		2	%
Constant currency sales change	2	%	(10)	%	(7)	%	(14)	%	5	%	(18)	%	(5)	%		27	%		(1)	%

* Non-Core Sales include Air-Purifying Respirators.

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)
Americas Segment
	Three Months Ended June 30, 2020
	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)	%	(14)	%	(33)	%	(40)	%	(6)	%	(39)	%	(18)	%		37	%		(12)	%
Plus: Currency translation effects	1	%	—	%	6	%	3	%	1	%	3	%	2	%		6	%		2	%
Constant currency sales change	—	%	(14)	%	(27)	%	(37)	%	(5)	%	(36)	%	(16)	%		43	%		(10)	%
	Six Months Ended June 30, 2020
	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	%	(7)	%	(18)	%	(19)	%	8	%	(21)	%	(7)	%		35	%		(2)	%
Plus: Currency translation effects	1	%	—	%	5	%	2	%	1	%	3	%	2	%		5	%		2	%
Constant currency sales change	2	%	(7)	%	(13)	%	(17)	%	9	%	(18)	%	(5)	%		40	%		—	%

* Non-Core Sales include Air-Purifying Respirators.

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, 2020
	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	5	%	(32)	%	19	%	(19)	%	(8)	%	(20)	%	(8)	%		—	%		(7)	%
Plus: Currency translation effects	3	%	1	%	4	%	2	%	2	%	3	%	2	%		3	%		3	%
Constant currency sales change	8	%	(31)	%	23	%	(17)	%	(6)	%	(17)	%	(6)	%		3	%		(4)	%
	Six Months Ended June 30, 2020
	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	—	%	(23)	%	9	%	(11)	%	(2)	%	(20)	%	(6)	%		5	%		(5)	%
Plus: Currency translation effects	3	%	2	%	4	%	3	%	2	%	2	%	2	%		3	%		3	%
Constant currency sales change	3	%	(21)	%	13	%	(8)	%	—	%	(18)	%	(4)	%		8	%		(2)	%

* Non-Core Sales include Air-Purifying Respirators.

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, 2020
	Consolidated			Americas			International
Breathing Apparatus	3	%		—	%		8	%
Fixed Gas and Flame Detection	(6)	%		(5)	%		(6)	%
Industrial Head Protection	(16)	%		(27)	%		23	%
Firefighter Helmets and Protective Apparel	(17)	%		(14)	%		(31)	%
Fall Protection	(29)	%		(36)	%		(17)	%
Portable Gas Detection	(31)	%		(37)	%		(17)	%
Core Sales	(13)	%		(16)	%		(6)	%
Non-Core Sales *	27	%		43	%		3	%
Net Sales	(8)	%		(10)	%		(4)	%
	Six Months Ended June 30, 2020
	Consolidated			Americas			International
Breathing Apparatus	2	%		2	%		3	%
Fixed Gas and Flame Detection	5	%		9	%		—	%
Industrial Head Protection	(7)	%		(13)	%		13	%
Firefighter Helmets and Protective Apparel	(10)	%		(7)	%		(21)	%
Fall Protection	(18)	%		(18)	%		(18)	%
Portable Gas Detection	(14)	%		(17)	%		(8)	%
Core Sales	(5)	%		(5)	%		(4)	%
Non-Core Sales *	27	%		40	%		8	%
Net Sales	(1)	%		—	%		(2)	%

* Non-Core Sales include Air-Purifying Respirators.

 

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,
	2020				2019				% Change		2020				2019				% Change
Net income attributable to MSA Safety Incorporated	$	36,066			$	39,806			(9)%		$	79,741			$	63,038			26%
Non-deductible non-cash charge related to the recognition of currency translation adjustments (a)	—				—						—				15,359
Tax (benefit) / charge associated with ASU 2016-09: Improvements to employee share-based payment accounting	(348)				429						(1,619)				(1,993)
Subtotal	35,718				40,235				(11)%		78,122				76,404				2%
Restructuring charges	8,865				3,522						10,872				9,353
Product liability expense	851				3,529						2,802				6,425
Currency exchange losses, net	793				1,290						1,063				2,892
Strategic transaction costs	64				1,529						161				1,985
Asset related losses, net	5				208						127				233
COVID-19 related costs	—				—						757				—
Income tax expense on adjustments	(2,613)				(2,439)						(3,914)				(5,034)
Adjusted earnings	$	43,683			$	47,874			(9)%		$	89,990			$	92,258			(2)%
Adjusted earnings per diluted share	$	1.11			$	1.22			(9)%		$	2.29			$	2.36			(3)%

(a)  Included in Currency exchange losses, net on the Condensed Consolidated 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.

MSA Safety Incorporated
Reconciliation of As Reported Financial Measures to Non-GAAP Financial Measures
Debt to adjusted EBITDA / Net debt to adjusted EBITDA (Unaudited)
(In thousands)
		Twelve Months Ended June 30,
		2020
Operating income		$	206,668
Depreciation and amortization		38,654
Product liability expense		22,996
Restructuring charges		15,365
Currency exchange losses, net		2,626
Strategic transaction costs		2,576
COVID-19 related costs		757
Adjusted EBITDA		$	289,642
Total end-of-period debt		334,500
Debt to adjusted EBITDA		1.2
Total end-of-period debt		334,500
Total end-of-period cash and cash equivalents		136,238
Net debt		$	198,262
Net debt to adjusted EBITDA		0.7

Management believes that Debt to Adjusted EBITDA and Net Debt to Adjusted EBITDA are useful measures for investors, as management uses these measures to internally assess the company's liquidity and balance sheet strength. There can be no assurances that that MSA's definition of Debt to Adjusted EBITDA and Net Debt to Adjusted EBITDA is consistent with that of other companies.

About MSA:  
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 2019 revenues of $1.4 billion, MSA employs approximately 5,000 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 20, 2020. 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, debt to adjusted EBITDA ratio, net debt to adjusted EBITDA ratio, 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.

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SOURCE MSA Safety

FAQ

What were MSA's Q2 2020 revenue results?

MSA reported Q2 2020 revenue of $314 million, a decrease of 10% from Q2 2019.

How did MSA's earnings per share change in Q2 2020?

GAAP earnings per share for Q2 2020 were $0.92, down from $1.01 in Q2 2019.

What is the current debt level of MSA Safety?

MSA's debt stood at $335 million at the end of Q2 2020.

How much cash does MSA have available?

MSA has over $136 million in cash, providing ample liquidity.

What was the impact of air-purifying respirators on MSA's revenue?

Revenue from air-purifying respirators grew by 63% in Q2 2020.