MSA Safety Announces Fourth Quarter Results

- Advertisement -

PITTSBURGH, Feb. 17, 2022 /PRNewswire/ — Global safety equipment manufacturer MSA Safety Incorporated (NYSE: MSA) today reported financial results for the fourth quarter and year ended December 31, 2021.

MSA Safety Incorporated

Quarterly Highlights

  • Quarterly revenues were a record at $410 million, increasing 6% from a year ago. Core product revenue increased 9% from a year ago.
  • GAAP operating loss was $89 million, compared to operating income of $22 million in the same period a year ago. Adjusted operating income was $80 million or 19.5% of sales, compared to $70 million or 18.0% of sales in the same period a year ago.
  • GAAP net loss was $61 million or $1.57 per diluted share, compared to net income of $15 million or $0.38 per diluted share in the same period a year ago. Adjusted earnings were $66 million or $1.67 per diluted share, compared to $52 million or $1.33 per diluted share in the same period a year ago.
  • GAAP operating and net loss includes a pre-tax charge of $160 million associated with an increase to MSA LLC’s cumulative trauma product liability reserve, compared to a pre-tax charge of $34 million in the same period a year ago. The increase in the reserve was driven by an increase in claims activity and reflects the estimated liability through 2074.
  • Operating cash flow was $69 million. MSA deployed $13 million for capital expenditures, $16 million for debt repayments and funded $17 million of dividends to shareholders.

Annual Highlights

  • Revenue finished at $1.40 billion, increasing 4% from a year ago. Core product revenue increased 9% from a year ago.
  • GAAP operating income was $23 million, compared to $172 million in the same period a year ago. Adjusted operating income was $241 million or 17.2% of sales, compared to $248 million or 18.4% of sales in the same period a year ago.
  • GAAP earnings were $21 million or $0.54 per diluted share, compared to $124 million or $3.15 per diluted share in the same period a year ago. Adjusted earnings were $185 million or $4.68 per diluted share, compared to $181 million or $4.60 per diluted share in the same period a year ago.
  • GAAP operating income and earnings includes a pre-tax charge of $185 million associated with an increase to MSA LLC’s cumulative trauma product liability reserve, compared to a pre-tax charge of $39 million in the same period a year ago. The increase in the reserve was driven by an increase in claims activity and reflects the estimated liability through 2074.
  • Operating cash flow was $199 million. MSA deployed $392 million for strategic acquisitions, $44 million for capital expenditures and funded $69 million of dividends to shareholders. Net leverage was 1.6x adjusted EBITDA at December 31, 2021.

Comments from Management

“Our team’s disciplined execution enabled MSA to finish out a challenging year with very strong performance,” commented Nish Vartanian, MSA Chairman, President and CEO. “While we reported record revenues, incoming order trends were also strong throughout the quarter, reflecting momentum across our end markets and driving our book-to-bill ratio above 1x. Robust demand and record backlog levels at year end positions us well going into 2022.”

Mr. Vartanian continued, “We achieved 150 basis points of adjusted operating margin expansion in the quarter, driven by improved gross margin from price realization and productivity programs. We remain focused on driving further improvements in profitability heading into 2022.”

MSA deployed more than $500 million of capital in the year on strategic acquisitions, capital expenditure projects and shareholder dividends. “I’m pleased with the progress we are making with our recent acquisitions. The integration of Bacharach and Bristol Uniforms are on track, and each transaction has successfully expanded our reach into attractive markets. Our balance sheet remains strong and we will continue to maintain a balanced capital allocation strategy focused on growing our business and returning value to shareholders.”

“Despite the ongoing supply chain challenges and economic uncertainties, I remain confident in our ability to drive value for our stakeholders. We continue to invest in and launch innovative safety solutions for our customers, and our employees remain highly engaged. We exited 2021 with record backlog levels, a strong balance sheet, and a focus on executing our long-term growth strategy that has driven significant value for our stakeholders” Mr. Vartanian concluded.   

MSA Safety Incorporated

Condensed Consolidated Statement of Income (Unaudited) 

(In thousands, except per share amounts)




Three Months Ended

 December 31,


Twelve Months Ended 

December 31,


2021


2020


2021


2020

Net sales

$ 410,268


$ 388,248


$1,400,182


$1,348,223

Cost of products sold

232,144


226,087


784,834


752,731

Gross profit

178,124


162,161


615,348


595,492

Selling, general and administrative

86,523


76,268


332,862


290,334

Research and development

15,643


16,545


57,793


58,268

Restructuring charges

4,194


8,906


16,433


27,381

Currency exchange losses, net

575


4,757


216


8,578

Product liability and other operating expense

160,029


34,158


185,264


39,036

Operating (loss) income

(88,840)


21,527


22,780


171,895

Interest expense

2,911


1,525


10,758


9,432

Other income, net

(2,810)


(1,308)


(11,582)


(5,684)

Total other expense (income), net

101


217


(824)


3,748

(Loss) income before income taxes

(88,941)


21,310


23,604


168,147

(Benefit) provision for income taxes

(27,465)


6,139


1,816


43,009

Net (loss) income

(61,476)


15,171


21,788


125,138

Net income attributable to noncontrolling interests


(393)


(448)


(1,061)

Net (loss) income attributable to MSA Safety Incorporated

 

$   (61,476)


 

$     14,778


 

$     21,340


 

$ 124,077

 

Earnings (loss) per share attributable to MSA Safety Incorporated common shareholders:








Basic

$        (1.57)


$         0.39


$         0.54


$         3.19

Diluted

$        (1.57)


$         0.38


$         0.54


$         3.15

Basic shares outstanding

39,236


38,981


39,173


38,885

Diluted shares outstanding

39,236


39,335


39,449


39,286

 

During the fourth quarter of 2021, the company voluntarily changed its method of accounting for certain domestic inventory previously valued by the LIFO method to the FIFO method. The effects of the change in accounting principle from LIFO to FIFO have been retrospectively applied to all periods presented in the financial tables of this press release.


 


MSA Safety Incorporated

Condensed Consolidated Balance Sheet (Unaudited)

(In thousands)




December 31,

2021


December 31,

2020

Assets





Cash and cash equivalents

$

140,895


$                     160,672

Trade receivables, net


254,187


252,283

Inventories


280,617


244,966

Notes receivable, insurance companies


3,914


3,796

Other current assets


113,191


139,708

Total current assets


792,804


801,425

Property, plant and equipment, net


207,793


189,620

Prepaid pension cost


163,283


97,545

Goodwill


636,858


443,272

Intangible assets, net


306,948


161,051

Notes receivable, insurance companies, noncurrent


44,626


48,540

Insurance receivable, noncurrent


121,609


85,077

Other noncurrent assets


122,475


93,101

Total assets

$

2,396,396


$                 1,919,631

 

Liabilities and shareholders’ equity





Notes payable and current portion of long-term debt, net

$


$                       20,000

Accounts payable


106,780


86,854

Other current liabilities


223,826


203,691

Total current liabilities


330,606


310,545

Long-term debt, net


597,651


287,157

Pensions and other employee benefits


189,973


208,068

Deferred tax liabilities


33,337


20,760

Product liability and other noncurrent liabilities


410,441


245,907

Total shareholders’ equity


834,388


847,194

Total liabilities and shareholders’ equity

$

2,396,396


$                 1,919,631

 

During the fourth quarter of 2021, the company voluntarily changed its method of accounting for certain domestic inventory previously valued by the LIFO method to the FIFO method. The effects of the change in accounting principle from LIFO to FIFO have been retrospectively applied to all periods presented in the financial tables of this press release.


 

MSA Safety Incorporated

Condensed Consolidated Statement of Cash Flows (Unaudited) (In thousands)



Three Months Ended 

December 31,


Twelve Months Ended 

December 31,


2021


2020


2021


2020

 

Net (loss) income

 

$   (61,476)


 

$     15,171


 

$     21,788


 

$ 125,138

Depreciation and amortization

14,047


10,390


50,317


39,674

Product liability expense

160,029


34,158


185,264


39,036

Change in working capital and other operating

(43,598)


36,681


(58,224)


2,707

Cash flow from operating activities

69,002


96,400


199,145


206,555

 

Capital expenditures

 

(12,874)


 

(16,207)


 

(43,837)


 

(48,905)

Acquisition, net of cash acquired



(392,437)


Change in short-term investments

25


(4,981)


26,087


(24,318)

Property disposals and other investing

(37)


120


(5,286)


454

Cash flow used in investing activities

(12,886)


(21,068)


(415,473)


(72,769)

 

Change in debt

 

(15,683)


 

(39,000)


 

293,176


 

(44,000)

Cash dividends paid

(17,264)


(16,767)


(68,586)


(66,578)

Other financing

3,441


5,381


(20,665)


(15,951)

Cash flow (used in) from financing activities

(29,506)


(50,386)


203,925


(126,529)

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

(3,016)


 

 

2,902


 

 

(7,193)


 

 

1,234

 

Increase (decrease) in cash, cash equivalents and restricted cash

 

 

$     23,594


 

 

$     27,848


 

 

$ (19,596)


 

 

$       8,491

   


During the fourth quarter of 2021, the company voluntarily changed its method of accounting for certain domestic inventory previously valued by the LIFO method to the FIFO method. The effects of the change in accounting principle from LIFO to FIFO have been retrospectively applied to all periods presented in the financial tables of this press release.


 

MSA Safety Incorporated Segment Information (Unaudited)

(In thousands, except percentage amounts)

 

 

 

Americas


 

 

 

International


 

 

 

Corporate


 

 

 

Consolidated

Three Months Ended December 31, 2021








Sales to external customers

$ 252,945


$ 157,323


$               —


$ 410,268

Operating loss







(88,840)

Operating margin %







(21.7)%

Restructuring charges







4,194

Currency exchange losses, net







575

Product liability expense







160,029

Acquisition related costs (a)







3,993

Adjusted operating income (loss)

60,334


31,297


(11,680)


79,951

Adjusted operating margin %

23.9 %


19.9 %




19.5 %

Depreciation and amortization (b)







11,702

Adjusted EBITDA

68,488


34,714


(11,549)


91,653

Adjusted EBITDA %

27.1 %


22.1 %




22.3 %

 

Three Months Ended December 31, 2020








Sales to external customers

$ 244,518


$ 143,730


$               —


$ 388,248

Operating income







21,527

Operating margin %







5.5 %

Restructuring charges







8,906

Currency exchange losses, net







4,757

Product liability expense







34,158

Acquisition related costs (a)







515

Adjusted operating income (loss)

53,558


25,304


(8,999)


$     69,863

Adjusted operating margin %

21.9 %


17.6 %




18.0 %

Depreciation and amortization (b)







10,390

Adjusted EBITDA

60,686


28,468


(8,901)


80,253

Adjusted EBITDA %

24.8 %


19.8 %




20.7 %


 

During the fourth quarter of 2021, the company voluntarily changed its method of accounting for certain domestic inventory previously valued by the LIFO method to the FIFO method. The effects of the change in accounting principle from LIFO to FIFO have been retrospectively applied to all periods presented in the financial tables of this press release.


(a) Acquisition related costs include advisory, legal, accounting, valuation, and other professional or consulting fees incurred during due diligence and integration. These costs are included in selling, general and administrative expense in the Consolidated Statements of Income. Acquisition related costs also include the acquisition related amortization, which is included in cost of products sold in the Consolidated Statements of Income.


(b) Excludes acquisition related amortization, which is included in acquisition related costs above.


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

Twelve Months Ended December 31, 2021








Sales to external customers

$ 908,068


$ 492,114


$               —


$1,400,182

Operating income







22,780

Operating margin %







1.6 %

Restructuring charges







16,433

Currency exchange losses, net







216

Product liability expense







185,264

Acquisition related costs (a)







15,884

Adjusted operating income (loss)

202,496


73,279


(35,198)


240,577

Adjusted operating margin %

22.3 %


14.9 %




17.2 %

Depreciation and amortization (b)







45,417

Adjusted EBITDA

233,732


86,997


(34,735)


285,994

Adjusted EBITDA %

25.7 %


17.7 %




20.4 %

 

Twelve Months Ended December 31, 2020








Sales to external customers

$ 874,305


$ 473,918


$               —


$1,348,223

Operating income







171,895

Operating margin %







12.7 %

Restructuring charges







27,381

Currency exchange losses, net







8,578

Product liability expense







39,036

Acquisition related costs (a)







717

COVID-19 related costs







757

Adjusted operating income (loss)

205,304


71,140


(28,080)


248,364

Adjusted operating margin %

23.5 %


15.0 %




18.4 %

Depreciation and amortization (b)







39,674

Adjusted EBITDA

232,066


83,661


(27,689)


288,038

Adjusted EBITDA %

26.5 %


17.7 %




21.4 %

 


During the fourth quarter of 2021, the company voluntarily changed its method of accounting for certain domestic inventory previously valued by the LIFO method to the FIFO method. The effects of the change in accounting principle from LIFO to FIFO have been retrospectively applied to all periods presented in the financial tables of this press release.


(a) Acquisition related costs include advisory, legal, accounting, valuation, and other professional or consulting fees incurred during due diligence and integration. These costs are included in selling, general and administrative expense in the Consolidated Statements of Income. Acquisition related costs also include the acquisition related amortization, which is included in cost of products sold in the Consolidated Statements of Income.


(b) Excludes acquisition related amortization, which is included in acquisition related costs above.

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 December 31, 2021




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

(8)%

37 %

17 %

10 %

15 %

11 %

9 %


(16)%


6 %

 

Plus: Currency translation effects

 

— %

(2)%

2 %

1 %

1 %

1 %

1 %


1 %


— %

Constant currency sales change

 

(8)%

 

35 %

 

19 %

 

11 %

 

16 %

 

12 %

 

10 %


 

(15)%


 

6 %

Less: Acquisitions

 

— %

 

32 %

 

— %

 

— %

 

20 %

 

— %

 

9 %


 

— %


 

7 %

Organic constant currency sales change

 

(8)%

 

3 %

19 %

 

11 %

 

(4)%

 

12 %

 

1 %


 

(15)%


 

(1)%



Twelve Months Ended December 31, 2021




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)%

26 %

14 %

14 %

4 %

14 %

9 %


(24)%


4 %

Plus: Currency translation effects

(1)%

(3)%

— %

(1)%

(1)%

(2)%

(2)%


(1)%


(1)%

Constant currency sales change

 

(3)%

 

23 %

 

14 %

 

13 %

 

3 %

 

12 %

 

7 %


 

(25)%


 

3 %

Less:

Acquisitions

 

— %

 

20 %

 

— %

 

— %

 

11 %

 

— %

 

5 %


 

— %


 

5 %

Organic constant currency sales change

 

(3)%

 

3 %

 

14 %

 

13 %

 

(8)%

 

12 %

 

2 %


 

(25)%


 

(2)%


*Firefighter Helmets and Protective Apparel and Fixed Gas and Flame Detection include the impact of the Bristol and Bacharach acquisitions completed on January 25, 2021 and July 1, 2021, respectively.

Organic constant currency sales change is a non-GAAP financial measure provided by the Company to give a better understanding of the Company’s underlying business performance. Organic constant currency sales change is calculated by deducting the percentage impact from acquisitions and currency translation effects from the overall percentage change in net sales.

 

MSA Safety Incorporated

Reconciliation of As Reported Financial Measures to Non-GAAP Financial Measures

Constant currency revenue growth (Unaudited)


Americas Segment



Three Months Ended December 31, 2021




 

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

(10)%

(1)%

15 %

18 %

34 %

13 %

8 %


(27)%


4 %

Plus: Currency translation effects

— %

— %

2 %

1 %

— %

2 %

— %


1 %


— %

Constant currency sales change

 

(10)%

 

(1)%

 

17 %

 

19 %

 

34 %

 

15 %

 

8 %


 

(26)%


 

4 %

Less: Acquisitions

 

— %

 

— %

 

— %

 

— %

 

33 %

 

— %

 

6 %


 

— %


 

6 %

Organic constant currency sales change

 

(10)%

 

(1)%

 

17 %

 

19 %

 

1 %

 

15 %

 

2 %


 

(26)%


 

(2)%




Twelve Months Ended December 31,2021




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)%

3 %

18 %

21 %

15 %

19 %

9 %


(31)%


4 %

Plus: Currency translation effects

1 %

— %

1 %

— %

— %

— %

— %


— %


— %

Constant currency sales change

 

(1)%

 

3 %

 

19 %

 

21 %

 

15 %

 

19 %

 

9 %


 

(31)%


 

4 %

Less:

Acquisitions

 

— %

 

— %

 

— %

 

— %

 

18 %

 

— %

 

3 %


 

— %


 

3 %

Organic constant currency sales change

 

(1)%

 

3 %

 

19 %

 

21 %

 

(3)%

 

19 %

 

6 %


 

(31)%


 

1 %


*Fixed Gas and Flame Detection includes the impact of the Bacharach acquisition completed on July 1, 2021.

Organic constant currency sales change is a non-GAAP financial measure provided by the Company to give a better understanding of the Company’s underlying business performance. Organic constant currency sales change is calculated by deducting the percentage impact from acquisitions and currency translation effects from the overall percentage change in net sales.  

 

MSA Safety Incorporated

Reconciliation of As Reported Financial Measures to Non-GAAP Financial Measures

Constant currency revenue growth (Unaudited)


International Segment



Three Months Ended December 31, 2021




Breathing 

Apparatus

Firefighter

Helmets

and

Protective

Apparel*

Industrial 

Head 

Protection

Portable 

Gas D

etection

Fixed

Gas 

and Flame

 Detection*

 

Fall

Protection

Core Sales


Non-Core

Sales  


Net Sales

GAAP reported sales change

(5)%

173 %

23 %

(2)%

(5)%

8 %

11 %


(2)%


9 %

Plus: Currency translation effects

1 %

(1)%

1 %

— %

3 %

1 %

2 %


3 %


2 %

Constant currency sales change

 

(4)%

 

172 %

 

24 %

 

(2)%

 

(2)%

 

9 %

 

13 %


 

1 %


 

11 %

Less: Acquisitions

 

— %

 

153 %

 

— %

 

— %

 

8 %

 

— %

 

14 %


 

— %


 

12 %

Organic constant currency sales change

 

(4)%

 

19 %

 

24 %

 

(2)%

 

(10)%

 

9 %

 

(1)%


 

1 %


 

(1)%




Twelve Months Ended December 31, 2021




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)%

134 %

3 %

2 %

(9)%

8 %

7 %


(13)%


4 %

Plus: Currency translation effects

(3)%

(13)%

(5)%

(4)%

(2)%

(5)%

(4)%


(4)%


(4)%

Constant currency sales change

 

(6)%

 

121 %

 

(2)%

 

(2)%

 

(11)%

 

3 %

 

3 %


 

(17)%


 

— %

Less:

Acquisitions

 

— %

 

114 %

 

— %

 

— %

 

4 %

 

— %

 

9 %


 

— %


 

8 %

Organic constant currency sales change

 

(6)%

 

7 %

 

(2)%

 

(2)%

 

(15)%

 

3 %

 

(6)%


 

(17)%


 

(8)%


*Firefighter Helmets and Protective Apparel and Fixed Gas and Flame Detection include the impact of the Bristol and Bacharach acquisitions completed on January 25, 2021 and July 1, 2021, respectively.

 

Organic constant currency sales change is a non-GAAP financial measure provided by the Company to give a better understanding of the Company’s underlying business performance. Organic constant currency sales change is calculated by deducting the percentage impact from acquisitions and currency translation effects from the overall percentage change in net sales.    

 

MSA Safety Incorporated

Supplemental Segment Information (Unaudited)

Summary of constant currency revenue growth by segment and product group



Three Months Ended December 31, 2021


Consolidated


Americas


International

Firefighter Helmets and Protective Apparel*

35 %


(1)%


172 %

Industrial Head Protection

19 %


17 %


24 %

Fixed Gas and Flame Detection*

16 %


34 %


(2)%

Fall Protection

12 %


15 %


9 %

Portable Gas Detection

11 %


19 %


(2)%

Breathing Apparatus

(8)%


(10)%


(4)%

Core Sales

10 %


8 %


13 %

Non-Core Sales

(15)%


(26)%


1 %

Net Sales

6 %


4 %


11 %

Net Sales excluding Acquisitions

(1)%


(2)%


(1)%




Twelve Months Ended December 31, 2021


Consolidated


Americas


International

Firefighter Helmets and Protective Apparel*

23 %


3 %


121 %

Industrial Head Protection

14 %


19 %


(2)%

Fixed Gas and Flame Detection*

3 %


15 %


(11)%

Fall Protection

12 %


19 %


3 %

Portable Gas Detection

13 %


21 %


(2)%

Breathing Apparatus

(3)%


(1)%


(6)%

Core Sales

7 %


9 %


3 %

Non-Core Sales

(25)%


(31)%


(17)%

Net Sales

3 %


4 %


— %

Net Sales excluding Acquisitions

(2)%


1 %


(8)%


*Firefighter Helmets and Protective Apparel and Fixed Gas and Flame Detection include the impact of the Bristol and Bacharach acquisitions completed on January 25, 2021 and July 1, 2021, respectively.


 

 

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 

December 31,




Twelve Months Ended 

December 31,




2021


2020


%

Change


2021


2020


%

Change

Net (loss) income attributable to 

MSA Safety Incorporated

$ (61,476)


$ 14,778




$ 21,340


$ 124,077



Product liability expense

160,029


34,158




185,264


39,036



Restructuring charges

4,194


8,906




16,433


27,381


Acquisition related costs (a)

3,993


515




15,884


717


Currency exchange losses, net

575


4,757




216


8,578


Asset related losses and other

365


47




788


993


Income tax expense on adjustments

(41,676)


(10,863)




(55,180)


(20,176)


Adjusted earnings

$ 66,004


$ 52,298


26%


$ 184,745


$ 180,606


2%

 

Adjusted earnings per diluted share

 

$       1.67


 

$       1.33


 

26%


 

$       4.68


 

$       4.60


 

2%


(a) Acquisition related costs include advisory, legal, accounting, valuation, and other professional or consulting fees incurred during due diligence and integration. These costs are included in selling, general and administrative expense in the Consolidated Statements of Income. Acquisition related costs also include the acquisition related amortization, which is included in cost of products sold in the Consolidated Statements 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 

December 31,


2021

Operating income

$

22,780

Depreciation and amortization (a)


45,417

Product liability expense


185,264

Restructuring charges


16,433

Currency exchange losses, net


216

Acquisition related costs (b)


15,884

Adjusted EBITDA

$

285,994

Total end-of-period debt


597,651

Debt to adjusted EBITDA


2.1

 

 

Total end-of-period debt


 

 

597,651

Total end-of-period cash and cash equivalents


140,895

Net debt

$

456,756

Net debt to adjusted EBITDA


1.6


(a) Excludes acquisition related amortization, which is included in acquisition related costs above.



(b) Acquisition related costs include advisory, legal, accounting, valuation, and other professional or consulting fees incurred during due diligence and integration. These costs are included in selling, general and administrative expense in the Consolidated Statements of Income. Acquisition related costs also include the acquisition related amortization, which is included in cost of products sold in the Consolidated Statements of Income.

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 2021 revenues of $1.4 billion, MSA employs approximately 4,800 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 19, 2021. 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, 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.

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/msa-safety-announces-fourth-quarter-results-301485414.html

SOURCE MSA Safety

Disclaimer: The above press release comes to you under an arrangement with PR Newswire. Agrigate Global takes no editorial responsibility for the same.