MSA Safety Announces Third Quarter Results

Rhea-AI Summary

MSA Safety reported third-quarter 2020 results with revenue of $304 million, down 13% year-over-year. GAAP operating income stood at $41 million, or 13.5% of sales, down from $60 million a year ago. Adjusted earnings were $37 million or $0.94 per share, reflecting a 18% decrease. Despite a challenging July and August, September saw improved order and revenue growth. MSA plans a global restructuring to save $10-15 million in 2021 while continuing investment in new product development. Debt levels were manageable with a 1.2x debt to adjusted EBITDA ratio.

Positive

• September saw improved orders and revenue growth across most business segments.
• International segment margins showed a 240 basis point increase.
• Plans for global restructuring aimed to deliver $10-15 million in cost savings in 2021.
• Maintained a healthy margin profile despite a decline in revenue.

Negative

• Revenue declined 13% from last year, indicating weak demand in key markets.
• GAAP operating income decreased from $60 million to $41 million year-over-year.
• Adjusted earnings per diluted share fell from $1.15 to $0.94.

PITTSBURGH, Oct. 28, 2020 /PRNewswire/ -- Global safety equipment manufacturer MSA Safety Incorporated (NYSE: MSA) today reported results for the third quarter of 2020.

Quarterly Highlights

• Revenue was $304 million, decreasing 13 percent from a year ago on both a reported and constant currency basis.
   
• Following weak demand in key markets in July and August, business conditions improved in September with monthly incoming orders growing on a sequential and year over year basis.
   
• GAAP operating income was $41 million or 13.5 percent of sales, compared to $60 million or 17.0 percent of sales in the same period a year ago. Adjusted operating income was $54 million or 17.6 percent of sales, compared to $63 million or 18.0 percent of sales in the same period a year ago.
   
• GAAP earnings were $28 million or $0.71 per diluted share, compared to $42 million or $1.08 per diluted share in the same period a year ago.  Adjusted earnings were $37 million or $0.94 per diluted share, compared to $45 million or $1.15 per diluted share in the same period a year ago.
   
• MSA's debt balance was $342 million at quarter end, reflecting 1.2x adjusted EBITDA on a gross basis or 0.7x adjusted EBITDA on a net basis. With $133 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

"The global pandemic and its ripple effects on employment and the economy certainly had an impact on our third quarter results," said Nish Vartanian, MSA Chairman, President and CEO.  "Our team, however, executed well and our results reflect the benefits of previous restructuring programs as well as our actions to lower discretionary costs throughout the year," he said.

"It was a tough July and August from a demand perspective, particularly in the energy and commercial construction markets in the Americas segment," Mr. Vartanian said, adding that the COVID-19 resurgence in the summer across the Gulf Coast of the U.S. negatively impacted a number of the company's key markets. "In September, we saw significant improvement in orders and revenue across nearly every area of our business."

Mr. Vartanian noted that despite the quarterly revenue contraction of 13 percent, the company maintained a healthy margin profile. "Our restructuring investments are yielding results and the strong improvement in International segment margins is especially encouraging," he said. Adjusted operating margin in the company's International segment increased 240 basis points in the quarter and 230 basis points for the year to date.

MSA is taking further action to reduce its cost structure in response to the recession. Mr. Vartanian indicated that the company has started executing a global restructuring program that is expected to deliver $10-15 million of cost savings in 2021. "While we're taking steps to streamline our cost structure and improve our business model through this downturn, we remain very committed to investing in our new product development pipeline to drive long term growth and enhance our market leadership positions."

"Our organization remains very well positioned and dedicated to advancing MSA's mission, which has never been more important, or more relevant. Our team remains highly engaged and we are focused on leveraging our strong balance sheet to make investments that create long term value for all MSA stakeholders," Mr. Vartanian concluded.

MSA Safety Incorporated Condensed Consolidated Statement of Income (Unaudited) (In thousands, except per share amounts)
	Three Months Ended September 30,								Nine Months Ended September 30,
	2020				2019				2020				2019
Net sales	$	304,392			$	351,014			$	959,975			$	1,026,726
Cost of products sold	172,160				192,313				528,799				556,959
Gross profit	132,232				158,701				431,176				469,767
Selling, general and administrative	64,793				82,900				214,066				245,337
Research and development	13,851				13,520				41,723				41,482
Restructuring charges	7,603				1,850				18,475				11,203
Currency exchange losses (gains), net (a)	2,759				(913)				3,821				17,338
Product liability expense	2,077				1,730				4,878				8,155
Operating income	41,149				59,614				148,213				146,252
Interest expense	2,305				4,259				7,907				11,089
Other income, net	(1,117)				(2,929)				(4,376)				(8,850)
Total other expense, net	1,188				1,330				3,531				2,239
Income before income taxes	39,961				58,284				144,682				144,013
Provision for income taxes	11,727				15,673				36,251				37,913
Net income	28,234				42,611				108,431				106,100
Net income attributable to noncontrolling interests	(200)				(372)				(668)				(822)
Net income attributable to MSA Safety Incorporated	$	28,034			$	42,239			$	107,763			$	105,278
Earnings per share attributable to MSA Safety Incorporated common shareholders:
Basic	$	0.72			$	1.09			$	2.77			$	2.72
Diluted	$	0.71			$	1.08			$	2.74			$	2.69
Basic shares outstanding	38,906				38,649				38,853				38,617
Diluted shares outstanding	39,260				39,144				39,269				39,130

(a) Currency exchange losses for the nine months ended September 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)
	September 30, 2020				December 31, 2019
Assets
Cash and cash equivalents	$	132,830			$	152,195
Trade receivables, net	229,293				255,082
Inventories	252,856				185,027
Notes receivable, insurance companies	3,766				3,676
Other current assets	125,344				97,383
Total current assets	744,089				693,363
Property, net	178,064				167,038
Prepaid pension cost	83,447				75,066
Operating lease assets, net	52,331				51,675
Goodwill	436,273				436,679
Notes receivable, insurance companies, noncurrent	48,214				52,336
Insurance receivable, noncurrent	51,419				56,169
Other noncurrent assets	198,828				207,367
Total assets	$	1,792,665			$	1,739,693
Liabilities and shareholders' equity
Notes payable and current portion of long-term debt, net	$	20,000			$	20,000
Accounts payable	79,774				89,120
Other current liabilities	184,884				168,389
Total current liabilities	284,658				277,509
Long-term debt, net	321,694				328,394
Pensions and other employee benefits	190,073				186,697
Noncurrent operating lease liabilities	43,639				42,632
Deferred tax liabilities	11,425				9,787
Product liability and other noncurrent liabilities	161,073				162,101
Total shareholders' equity	780,103				732,573
Total liabilities and shareholders' equity	$	1,792,665			$	1,739,693

 

MSA Safety Incorporated Condensed Consolidated Statement of Cash Flows (Unaudited) (In thousands)
	Three Months Ended September 30,								Nine Months Ended September 30,
	2020				2019				2020				2019
Net income	$	28,234			$	42,611			$	108,431			$	106,100
Depreciation and amortization	9,856				9,547				29,284				28,339
Change in working capital and other operating	(10,954)				(1,453)				(27,560)				(46,189)
Cash flow from operating activities	27,136				50,705				110,155				88,250
Capital expenditures	(12,864)				(9,998)				(32,698)				(23,523)
Acquisition, net of cash acquired	—				—				—				(33,196)
Change in short-term investments	(9,935)				113				(19,337)				(17,189)
Property disposals	251				42				334				123
Cash flow used in investing activities	(22,548)				(9,843)				(51,701)				(73,785)
Change in debt	4,000				(24,127)				(5,000)				12,937
Cash dividends paid	(16,771)				(16,281)				(49,811)				(47,215)
Other financing	2,792				836				(21,332)				(6,555)
Cash flow used in financing activities	(9,979)				(39,572)				(76,143)				(40,833)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	1,986				(4,393)				(1,668)				(5,378)
Decrease in cash, cash equivalents and restricted cash	$	(3,405)			$	(3,103)			$	(19,357)			$	(31,746)

 

MSA Safety Incorporated Segment Information (Unaudited) (In thousands, except percentage amounts)
	Americas				International				Corporate				Consolidated
Three Months Ended September 30, 2020
Sales to external customers	$	194,303			$	110,089			$	—			$	304,392
Operating income													41,149
Operating margin %													13.5		%
Restructuring charges													7,603
Currency exchange losses, net													2,759
Product liability expense													2,077
Strategic transaction costs													41
Adjusted operating income (loss)	40,898				15,658				(2,927)				53,629
Adjusted operating margin %	21.0		%		14.2		%						17.6		%
Depreciation and amortization													9,856
Adjusted EBITDA	47,465				18,848				(2,828)				63,485
Adjusted EBITDA %	24.4		%		17.1		%						20.9		%
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		%

 

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 Segment Information (Unaudited) (In thousands, except percentage amounts)
	Americas				International				Corporate				Consolidated
Nine Months Ended September 30, 2020
Sales to external customers	$	629,787			$	330,188			$	—			$	959,975
Operating income													148,213
Operating margin %													15.4		%
Restructuring charges													18,475
Currency exchange losses, net													3,821
Product liability expense													4,878
Strategic transaction costs													202
COVID-19 related costs													757
Adjusted operating income (loss)	149,708				45,719				(19,081)				176,346
Adjusted operating margin %	23.8		%		13.8		%						18.4		%
Depreciation and amortization													29,284
Adjusted EBITDA	169,343				55,075				(18,788)				205,630
Adjusted EBITDA %	26.9		%		16.7		%						21.4		%
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		%

 

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 September 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	(12)	%	(9)	%	(22)	%	(26)	%	(8)	%	(29)	%	(16)	%		4	%		(13)	%
Plus: Currency translation effects	(1)	%	(1)	%	3	%	—	%	—	%	—	%	—	%		1	%		—	%
Constant currency sales change	(13)	%	(10)	%	(19)	%	(26)	%	(8)	%	(29)	%	(16)	%		5	%		(13)	%
	Nine Months Ended September 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	(3)	%	(10)	%	(15)	%	(20)	%	(1)	%	(24)	%	(10)	%		16	%		(7)	%
Plus: Currency translation effects	—	%	—	%	4	%	2	%	1	%	2	%	2	%		3	%		2	%
Constant currency sales change	(3)	%	(10)	%	(11)	%	(18)	%	—	%	(22)	%	(8)	%		19	%		(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)
Americas Segment
	Three Months Ended September 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	(16)	%	(6)	%	(26)	%	(31)	%	(8)	%	(43)	%	(19)	%		(2)	%		(17)	%
Plus: Currency translation effects	1	%	—	%	4	%	2	%	1	%	2	%	1	%		4	%		2	%
Constant currency sales change	(15)	%	(6)	%	(22)	%	(29)	%	(7)	%	(41)	%	(18)	%		2	%		(15)	%
	Nine Months Ended September 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	(4)	%	(7)	%	(20)	%	(23)	%	2	%	(29)	%	(11)	%		22	%		(7)	%
Plus: Currency translation effects	1	%	—	%	4	%	2	%	1	%	2	%	2	%		4	%		2	%
Constant currency sales change	(3)	%	(7)	%	(16)	%	(21)	%	3	%	(27)	%	(9)	%		26	%		(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)
International Segment
	Three Months Ended September 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	(6)	%	(26)	%	(8)	%	(16)	%	(7)	%	(1)	%	(9)	%		15	%		(5)	%
Plus: Currency translation effects	(3)	%	(2)	%	(2)	%	(2)	%	(3)	%	(4)	%	(3)	%		(4)	%		(4)	%
Constant currency sales change	(9)	%	(28)	%	(10)	%	(18)	%	(10)	%	(5)	%	(12)	%		11	%		(9)	%
	Nine Months Ended September 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	(2)	%	(24)	%	3	%	(13)	%	(4)	%	(14)	%	(7)	%		8	%		(5)	%
Plus: Currency translation effects	1	%	1	%	2	%	1	%	—	%	—	%	1	%		1	%		1	%
Constant currency sales change	(1)	%	(23)	%	5	%	(12)	%	(4)	%	(14)	%	(6)	%		9	%		(4)	%

 

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, 2020
	Consolidated			Americas			International
Fixed Gas and Flame Detection	(8)	%		(7)	%		(10)	%
Firefighter Helmets and Protective Apparel	(10)	%		(6)	%		(28)	%
Breathing Apparatus	(13)	%		(15)	%		(9)	%
Industrial Head Protection	(19)	%		(22)	%		(10)	%
Portable Gas Detection	(26)	%		(29)	%		(18)	%
Fall Protection	(29)	%		(41)	%		(5)	%
Core Sales	(16)	%		(18)	%		(12)	%
Non-Core Sales	5	%		2	%		11	%
Net Sales	(13)	%		(15)	%		(9)	%
	Nine Months Ended September 30, 2020
	Consolidated			Americas			International
Fixed Gas and Flame Detection	—	%		3	%		(4)	%
Firefighter Helmets and Protective Apparel	(10)	%		(7)	%		(23)	%
Breathing Apparatus	(3)	%		(3)	%		(1)	%
Industrial Head Protection	(11)	%		(16)	%		5	%
Portable Gas Detection	(18)	%		(21)	%		(12)	%
Fall Protection	(22)	%		(27)	%		(14)	%
Core Sales	(8)	%		(9)	%		(6)	%
Non-Core Sales	19	%		26	%		9	%
Net Sales	(5)	%		(5)	%		(4)	%

 

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,
	2020				2019				% Change		2020				2019				% Change
Net income attributable to MSA Safety Incorporated	$	28,034			$	42,239			(34)%		$	107,763			$	105,278			2%
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	(80)				(187)						(1,699)				(2,180)
Subtotal	27,954				42,052				(34)%		106,064				118,457				(10)%
Restructuring charges	7,603				1,850						18,475				11,203
Currency exchange losses (gains), net	2,759				(913)						3,821				1,979
Product liability expense	2,077				1,730						4,878				8,155
Asset related losses, net	62				38						189				271
Strategic transaction costs	41				952						202				2,937
COVID-19 related costs	—				—						757				—
Income tax expense on adjustments	(3,700)				(878)						(7,614)				(5,912)
Adjusted earnings	$	36,796			$	44,831			(18)%		$	126,772			$	137,090			(8)%
Adjusted earnings per diluted share	$	0.94			$	1.15			(18)%		$	3.23			$	3.50			(8)%

(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 September 30,
		2020
Operating income		$	188,191
Depreciation and amortization		38,963
Product liability expense		23,343
Restructuring charges		21,118
Currency exchange losses, net		6,298
Strategic transaction costs		1,665
COVID-19 related costs		757
Adjusted EBITDA		$	280,335
Total end-of-period debt		341,694
Debt to adjusted EBITDA		1.2
Total end-of-period debt		341,694
Total end-of-period cash and cash equivalents		132,830
Net debt		$	208,864
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 third-quarter 2020 revenue figures?

MSA Safety reported third-quarter 2020 revenue of $304 million, representing a 13% decrease year-over-year.

What is the adjusted earnings per share for MSA in Q3 2020?

The adjusted earnings per diluted share for MSA in the third quarter of 2020 were $0.94.

What cost savings is MSA planning for 2021?

MSA is planning a global restructuring that is expected to save between $10 million and $15 million in 2021.

How did MSA's operating income change in Q3 2020?

MSA's GAAP operating income decreased from $60 million or 17% of sales in Q3 2019 to $41 million or 13.5% of sales in Q3 2020.

What are MSA's current debt levels and EBITDA ratio?

MSA's debt balance was $342 million at the end of Q3 2020, with a debt to adjusted EBITDA ratio of 1.2x.