MSA Safety Announces Third Quarter 2024 Results
Strong execution drives resilient margins and EPS growth; Expecting mid-single-digit fourth quarter sales growth, resulting in low-single-digit full-year growth.
PITTSBURGH, Oct. 23, 2024 /PRNewswire/ -- Global safety equipment and solutions provider MSA Safety Incorporated (NYSE:MSA) today reported financial results for the third quarter of 2024.
Quarterly Highlights
Achieved quarterly net sales of $433 million, a 3% year-over-year decrease on a reported and organic constant currency basis.
Generated GAAP operating income of $91 million, or 21.1% of sales, and adjusted operating income of $98 million, or 22.6% of sales.
Recorded GAAP net income of $67 million, or $1.69 per diluted share, and adjusted earnings of $72 million, or $1.83 per diluted share.
Repaid $38 million of debt, returned $20 million to shareholders through dividends, invested $14 million for capital expenditures, and repurchased $10 million of common stock.
"Our team continued to execute well in the third quarter, delivering earnings growth despite a modest sales contraction," said Steve Blanco, MSA Safety President and Chief Executive Officer. "Revenue was impacted by the timing of self-contained breathing apparatus (SCBA) shipments as well as specific customer order delays. That said, we still grew orders by high-single digits in the quarter, and our backlog increased sequentially. We continued to see excellent performance in our detection business, including double-digit sales growth in portables. We remain confident that the overall resilience of our business, the strength of our long-term fundamentals, and our team's embrace of the MSA Business System will enable us to continue advancing our mission and creating value for our shareholders."
Financial Highlights
Financial Highlights
Three Months EndedSeptember 30,
($ millions, except percentages and per share amounts)
2024
2023
% Change(a)
Net Sales
$ 433
$ 447
(3) %
Operating Income
91
94
(3) %
Adjusted Operating Income
98
101
(3) %
Net Income
67
65
2 %
Diluted EPS
1.69
1.65
2 %
Adjusted Earnings
72
70
3 %
Adjusted Diluted EPS
1.83
1.78
3 %
(a) Percentage change may not calculate exactly due to rounding.
Lee McChesney, MSA Safety Senior Vice President and Chief Financial Officer, commented, "We delivered resilient margin performance and strong cash conversion in the quarter. Our balance sheet remains healthy, with net leverage of 0.9 times. We returned cash to shareholders as part of our disciplined and balanced capital allocation strategy, and we remain well-positioned to invest organically in the business and evaluate M&A opportunities. As we look ahead to the balance of the year, we expect to finish 2024 strong with mid-single-digit sales growth in the fourth quarter, resulting in low-single-digit top-line growth for the full year."
Conference Call
MSA Safety will host a conference call on Thursday, October 24, 2024, at 10:00 a.m. Eastern time to discuss its third quarter 2024 results and outlook. The call and an accompanying slide presentation will be webcast at http://investors.msasafety.com/ under the "News and Events" tab, subheading "Events & Presentations." Investors and interested parties can also dial into the call at 1-844-854-4415 (toll-free) or 1-412-902-6599 (international). When prompted, please instruct the operator to be joined into the MSA Safety Incorporated conference call. A replay of the conference call will be available at http://investors.msasafety.com/ shortly after the conclusion of the presentation and will be available for the next 90 days.
MSA Safety IncorporatedCondensed Consolidated Statements of Operations (Unaudited)(In thousands, except per share amounts)
Three Months EndedSeptember 30,
Nine Months Ended September 30,
2024
2023
2024
2023
Net sales
$ 432,679
$ 446,728
$ 1,308,443
$ 1,292,290
Cost of products sold
225,223
227,967
682,427
678,335
Gross profit
207,456
218,761
626,016
613,955
Selling, general and administrative
95,103
102,175
294,329
289,602
Research and development
16,707
17,682
49,695
48,906
Restructuring charges
1,184
3,285
5,744
8,382
Currency exchange losses, net
2,985
1,496
4,715
8,781
Loss on divestiture of MSA LLC
—
—
—
129,211
Product liability expense
—
—
—
3
Operating income
91,477
94,123
271,533
129,070
Interest expense
9,153
12,498
29,556
37,149
Other income, net
(5,833)
(6,037)
(16,215)
(15,487)
Total other expense, net
3,320
6,461
13,341
21,662
Income before income taxes
88,157
87,662
258,192
107,408
Provision for income taxes
21,509
22,406
61,171
125,235
Net income (loss)
$ 66,648
$ 65,256
$ 197,021
$ (17,827)
Earnings (loss) per share attributable to commonshareholders:
Basic
$ 1.69
$ 1.66
$ 5.00
$ (0.46)
Diluted
$ 1.69
$ 1.65
$ 4.98
$ (0.46)
Basic shares outstanding
39,362
39,303
39,370
39,267
Diluted shares outstanding
39,495
39,450
39,530
39,267
MSA Safety IncorporatedCondensed Consolidated Balance Sheets (Unaudited)(In thousands)
September 30, 2024
December 31, 2023
Assets
Cash and cash equivalents
$ 154,371
$ 146,442
Trade receivables, net
277,346
294,678
Inventories
351,805
292,604
Other current assets
59,147
52,546
Total current assets
842,669
786,270
Property, plant and equipment, net
216,646
211,877
Prepaid pension cost
183,915
172,161
Goodwill
632,837
627,534
Intangible assets, net
254,364
266,134
Other noncurrent assets
111,496
106,174
Total assets
$ 2,241,927
$ 2,170,150
Liabilities and shareholders' equity
Notes payable and current portion of long-term debt, net
$ 26,915
$ 26,522
Accounts payable
128,031
111,872
Other current liabilities
159,532
194,424
Total current liabilities
314,478
332,818
Long-term debt, net
527,807
575,170
Pensions and other employee benefits
144,105
143,967
Deferred tax liabilities
103,175
102,419
Other noncurrent liabilities
57,017
48,974
Total shareholders' equity
1,095,345
966,802
Total liabilities and shareholders' equity
$ 2,241,927
$ 2,170,150
MSA Safety IncorporatedCondensed Consolidated Statements of Cash Flows (Unaudited)(In thousands)
Three Months EndedSeptember 30,
Nine Months Ended September 30,
2024
2023
2024
2023
Net income (loss)
$ 66,648
$ 65,256
$ 197,021
$ (17,827)
Depreciation and amortization
15,959
15,504
47,563
44,965
Tax-effected loss on divestiture of MSA LLC
—
—
—
199,578
Contribution on divestiture of MSA LLC
—
—
—
(341,186)
Change in working capital and other operating
1,725
44,024
(56,064)
48,413
Cash flow from (used in) operating activities
84,332
124,784
188,520
