Mine Safety Appliances Company (MSA, Financial) filed Quarterly Report for the period ended 2010-03-31.
Mine Safety Appliances Company has a market cap of $1.08 billion; its shares were traded at around $29.97 with a P/E ratio of 24 and P/S ratio of 1.2. The dividend yield of Mine Safety Appliances Company stocks is 3.2%. GuruFocus rated Mine Safety Appliances Company the business predictability rank of 3.5-star.MSA is in the portfolios of Private Capital of Private Capital Management, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Restructuring and other charges. During the first quarter of 2010, we recorded charges of $6.8 million ($4.7 million after tax). European segment charges of $5.3 million related primarily to a focused voluntary retirement incentive program in Germany (German VRIP). During the first quarter of 2010, 27 employees made irrevocable elections to retire under the terms of the German VRIP. All of these employees had retired by March 31, 2010. German VRIP termination benefit expense of $5.0 million was recorded in March 2010. North American segment charges of $1.0 million included stay bonuses and other costs associated with our ongoing initiative to transfer certain production activities. European and International segment charges of $0.3 million and $0.5 million, respectively, were primarily for severance costs associated with staff reductions in Germany and South Africa.
During the first quarter of 2009, we recorded charges of $8.1 million ($5.1 million after tax). North American segment charges of $7.6 million related primarily to a focused voluntary retirement incentive program (North American VRIP). During January 2009, 61 employees made irrevocable elections to retire under the terms of the North American VRIP. These employees retired on January 31, 2009. North American VRIP non-cash special termination benefits expense of $6.6 million was recorded in January 2009. The remaining $1.0 million of North American segment charges related to costs associated with layoffs and stay bonuses and other costs related to the transfer of certain production activities. International segment charges of $0.5 million were primarily for severance costs related to staff reductions in Brazil.
North American segment net income for the first quarter of 2010 was $3.4 million, a decrease of $0.3 million, or 8%, compared to $3.7 million in the first quarter of 2009. North American segment net income for the first quarter of 2009 included a $4.4 million after-tax charge related to voluntary retirement incentive program in the U.S. Excluding this one-time charge, North American segment net income was down $4.7 million in the current quarter. The decrease reflects the negative effect of the previously-discussed decrease in sales.
Operating activities used cash of $6.4 million during the three months ended March 31, 2010, compared to providing cash of $22.5 million during the three months ended March 31, 2009. Significantly lower operating cash flow in the first quarter of 2010 reflects a $14.3 million unfavorable change associated with working capital and a $14.6 million decrease in operating cash flow before changes in working capital. Lower operating cash flow before changes in working capital was primarily due to lower net income and less favorable adjustments for non-cash items. Trade receivables were $170.2 million at March 31, 2010, compared to $173.4 million at December 31, 2009. LIFO inventories were $128.7 million at March 31, 2010, compared to $123.9 million at December 31, 2009. The $3.2 million decrease in trade receivables reflects a $1.3 million decrease in local currency balances, primarily in North America, and a $1.9 million reduction due to currency translation effects. The $4.8 million increase in inventories reflects a $6.9 million increase in local currency inventories, partially offset by a $2.1 million reduction due to currency translation effects. Increased inventory levels are primarily in anticipation of higher customer demand.
Financing activities provided cash of $9.4 million during the three months ended March 31, 2010, compared to using $13.6 million during the first quarter of 2009. The change was primarily related to borrowing on our short-term line of credit. During the first quarter of 2010, we borrowed $18.4 million, compared to making payments of $4.5 million in the first quarter of 2009. We paid cash dividends of $8.6 million in the first quarters of both 2010 and 2009.
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Mine Safety Appliances Company has a market cap of $1.08 billion; its shares were traded at around $29.97 with a P/E ratio of 24 and P/S ratio of 1.2. The dividend yield of Mine Safety Appliances Company stocks is 3.2%. GuruFocus rated Mine Safety Appliances Company the business predictability rank of 3.5-star.MSA is in the portfolios of Private Capital of Private Capital Management, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Net sales for the European segment were $56.6 million for the first quarter of 2010, a decrease of $3.8 million, or 6%, compared to $60.4 million for the first quarter of 2009. Local currency sales in Europe decreased $8.4 million during the first quarter of 2010. In France, local currency sales were $2.6 million lower in the current quarter, reflecting lower shipments of ballistic helmets and fire helmets. In Germany, local currency sales were $1.5 million lower for the quarter ended March 31, 2010, reflecting a $1.6 million decrease in shipments of gas masks and a $1.1 million decrease in ballistic helmet shipments, primarily to the military, partially offset by a $0.8 increase in SCBA shipments. Local currency sales in other Western European companies and in Eastern Europe were down $2.0 million and $2.5 million, respectively, for the current quarter, reflecting the continuing effects of the recession. Favorable translation effects of a stronger euro in the current quarter increased European segment sales, when stated in U.S. dollars, by approximately $4.6 million.Restructuring and other charges. During the first quarter of 2010, we recorded charges of $6.8 million ($4.7 million after tax). European segment charges of $5.3 million related primarily to a focused voluntary retirement incentive program in Germany (German VRIP). During the first quarter of 2010, 27 employees made irrevocable elections to retire under the terms of the German VRIP. All of these employees had retired by March 31, 2010. German VRIP termination benefit expense of $5.0 million was recorded in March 2010. North American segment charges of $1.0 million included stay bonuses and other costs associated with our ongoing initiative to transfer certain production activities. European and International segment charges of $0.3 million and $0.5 million, respectively, were primarily for severance costs associated with staff reductions in Germany and South Africa.
During the first quarter of 2009, we recorded charges of $8.1 million ($5.1 million after tax). North American segment charges of $7.6 million related primarily to a focused voluntary retirement incentive program (North American VRIP). During January 2009, 61 employees made irrevocable elections to retire under the terms of the North American VRIP. These employees retired on January 31, 2009. North American VRIP non-cash special termination benefits expense of $6.6 million was recorded in January 2009. The remaining $1.0 million of North American segment charges related to costs associated with layoffs and stay bonuses and other costs related to the transfer of certain production activities. International segment charges of $0.5 million were primarily for severance costs related to staff reductions in Brazil.
North American segment net income for the first quarter of 2010 was $3.4 million, a decrease of $0.3 million, or 8%, compared to $3.7 million in the first quarter of 2009. North American segment net income for the first quarter of 2009 included a $4.4 million after-tax charge related to voluntary retirement incentive program in the U.S. Excluding this one-time charge, North American segment net income was down $4.7 million in the current quarter. The decrease reflects the negative effect of the previously-discussed decrease in sales.
Operating activities used cash of $6.4 million during the three months ended March 31, 2010, compared to providing cash of $22.5 million during the three months ended March 31, 2009. Significantly lower operating cash flow in the first quarter of 2010 reflects a $14.3 million unfavorable change associated with working capital and a $14.6 million decrease in operating cash flow before changes in working capital. Lower operating cash flow before changes in working capital was primarily due to lower net income and less favorable adjustments for non-cash items. Trade receivables were $170.2 million at March 31, 2010, compared to $173.4 million at December 31, 2009. LIFO inventories were $128.7 million at March 31, 2010, compared to $123.9 million at December 31, 2009. The $3.2 million decrease in trade receivables reflects a $1.3 million decrease in local currency balances, primarily in North America, and a $1.9 million reduction due to currency translation effects. The $4.8 million increase in inventories reflects a $6.9 million increase in local currency inventories, partially offset by a $2.1 million reduction due to currency translation effects. Increased inventory levels are primarily in anticipation of higher customer demand.
Financing activities provided cash of $9.4 million during the three months ended March 31, 2010, compared to using $13.6 million during the first quarter of 2009. The change was primarily related to borrowing on our short-term line of credit. During the first quarter of 2010, we borrowed $18.4 million, compared to making payments of $4.5 million in the first quarter of 2009. We paid cash dividends of $8.6 million in the first quarters of both 2010 and 2009.
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