Mine Safety Appliances Company (MSA) filed Quarterly Report for the period ended 2009-09-30.
MINE SAFETY APPLIANCES manufactures and sells products designed to protect the safety and health of workers throughout the world. Principal products include respiratory protective equipment that is air-purifying air-supplied and self-contained in design. Mine Safety Appliances Company has a market cap of $944 million; its shares were traded at around $26.25 with a P/E ratio of 17.1 and P/S ratio of 0.8. The dividend yield of Mine Safety Appliances Company stocks is 3.7%. Mine Safety Appliances Company had an annual average earning growth of 11.6% over the past 10 years. GuruFocus rated Mine Safety Appliances Company the business predictability rank of 4-star.
Highlight of Business Operations:
Net sales for the European segment were $59.4 million for the third quarter of 2009, a decrease of $13.4 million, or 18%, compared to $72.8 million for the third quarter of 2008. Local currency sales in Europe decreased $7.5 million during the third quarter of 2009. In France, local currency sales were $2.5 million lower in the current quarter. Third quarter 2008 sales in France included a one-time shipment of $3.3 million ballistic vests to the military. In Germany, local currency sales were down $2.1 million in the current quarter, reflecting a $3.6 million decrease in sales of gas masks, primarily to the military, partially offset by a $2.7 million increase in shipments of SCBAs. Local currency sales in Eastern Europe were $1.6 million lower in the current quarter. Unfavorable translation effects of weaker European currencies, particularly the euro, in the current quarter decreased European segment sales, when stated in U.S. dollars, by $5.9 million.
many of our distributors worked-off inventory early in the year, which further reduced the level of orders. Sales of self-contained breathing apparatus (SCBA) were $29.4 million lower during the current period. SCBA sales during the nine months ended 2008 included $25.8 million in shipments of our Firehawk® M7 Responder to the U.S. Air Force. Excluding these shipments, SCBA sales were $3.6 million lower in the current period. Shipments of SCBAs to the fire service market were unusually high during the first half of 2008 due to an increase in orders that had been delayed in late 2007 as manufacturers and the fire service market made the transition to a new National Fire Protection Association (NFPA) standard for SCBAs. Fire service market sales of thermal imaging cameras and fire helmets were down $4.5 million in the current period. Shipments of Advanced Combat Helmets to the U.S. military and CG634 helmets to the Canadian Forces were $23.9 million and $9.6 million lower, respectively, reflecting the completion of certain contracts. Shipments of head protection and fall protection were down $17.9 million and $6.7 million, respectively, as the effects of the economic recession reduced demand in construction and industrial markets. Shipments of instruments were $4.2 million lower in the current period, also due to reduced demand in industrial markets.
Net sales for the European segment were $172.1 million for the nine months ended September 30, 2009, a decrease of $38.0 million, or 18%, compared to $210.1 million for the same period in 2008. Local currency sales in Europe decreased $9.1 million for the nine months ended September 30, 2009. In France, local currency sales were $3.8 million lower in the current period, reflecting a $5.2 million decrease in shipments of ballistic vests and helmets to the military. This decrease was partially offset by a $1.6 million increase in sales of disposable respirators, primarily in response to the swine flu epidemic. In Germany, local currency sales were $6.2 million lower in the current period, reflecting a $5.3 million decrease in shipments of gas masks, primarily to the military. Local currency sales in Eastern Europe improved $2.0 million in the current period. Unfavorable translation effects of weaker European currencies, particularly the euro, in the current period decreased European segment sales, when stated in U.S. dollars, by approximately $28.9 million.
Net sales for the International segment were $171.6 million for the nine months ended September 30, 2009, a decrease of $27.7 million, or 14%, compared to $199.3 million in the same period in 2008. Local currency sales of the International segment decreased $4.2 million during the current period. In China, local currency sales increased $12.6 million, reflecting strong shipments of SCBAs to the Hong Kong Fire Service, as well as a continued focus on growing our business in the region. Local currency sales in Australia and Latin America were down $9.4 million and $7.2 million, respectively, primarily due to the economic recession. Currency translation effects reduced International segment sales, when stated in U.S. dollars, by $23.5 million, primarily related to a weakening of the Australian dollar, South African rand, and Brazilian real.
Selling, general and administrative expenses. Selling, general and administrative expenses were $170.2 million during the nine months ended September 30, 2009, a decrease of $32.7 million, or 16%, compared to $202.9 million in the same period in 2008. Selling, general and administrative expenses were 25.3% of net sales in the current period compared to 24.0% of net sales in the same period last year. Current period selling, general and administrative expenses in the North American segment were $66.6 million, a decrease of $15.1 million, or 18%, from $81.7 million in the same period last year. Local currency selling, general and administrative expenses in the European and International segments were $5.2 million lower in the current period. Lower selling, general and administrative expenses in the current period were the direct result of cost-savings initiatives that we have taken in response to the effects of the economic recession. Currency exchange effects reduced European and International segment administrative expenses for the nine months ended September 30, 2009, when stated in U.S. dollars, by $12.8 million, primarily related to a weaker euro, Australian dollar, and Brazilian real.
Operating activities provided cash of $87.1 million during the nine months ended September 30, 2009, compared to providing cash of $21.3 million during the nine months ended September 30, 2008. Significantly improved operating cash flow in the nine months ended September 30, 2009 was primarily related to a $90.4 million favorable change associated with working capital. This change was partially offset by a $24.5 million decrease in operating cash flow before changes in working capital, primarily due to the previously discussed decrease in net income. Trade receivables were $182.6 million at September 30, 2009 and $198.6 million at December 31, 2008. LIFO inventories were $140.7 million at September 30, 2009 compared to $159.4 million at December 31, 2008. The $16.0 million decrease in trade receivables reflects a $23.9 million decrease in local currency balances, primarily due to lower sales, partially offset by a $7.9 million increase due to currency translation effects. The $18.7 million decrease in inventories reflects a $30.7 million decrease in local currency inventories, partially offset by a $12.0 million increase due to currency translation effects. The $18.1 million decrease in income taxes receivable, prepaids and other current assets was primarily related to a local currency reduction of $16.2 million in income taxes receivable. The increase in other non-current assets of $20.0 million was due primarily to an increase in receivables due from insurance carriers.
MSA is in the portfolios of Private Capital of Private Capital Management.
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