MSA Announces Fourth Quarter and Full Year 2018 Results

PITTSBURGH, Feb. 20, 2019 /PRNewswire/ -- Global safety equipment manufacturer MSA Safety Incorporated (NYSE: MSA) today reported results for the fourth quarter and full year of 2018.

Quarterly Highlights

• Revenue was $362 million, increasing 5 percent from a year ago on a reported basis and 7 percent on an organic constant currency basis.

• GAAP earnings were $25 million or $0.64 per diluted share, compared to a GAAP loss of $33 million or $0.87 per diluted share in the same period a year ago.  Adjusted earnings were $50 million or $1.27 per diluted share, compared to $51 million or $1.31 per diluted share in the same period a year ago.

• Operating cash flow was $81 million compared to $41 million a year ago. Free cash flow increased 114 percent from a year ago to $62 million. Free cash flow conversion exceeded 100 percent of net income, driven by strong management of working capital.

Annual Highlights

• Revenue was $1.36 billion, increasing 13 percent from a year ago on a reported basis and 8 percent on an organic constant currency basis.

• GAAP earnings were $124 million or $3.18 per diluted share, compared to $26 million or $0.67 per diluted share in the same period a year ago.  Adjusted earnings increased 24 percent to $175 million or $4.50 per diluted share, compared to $141 million or $3.65 per diluted share in the same period a year ago. Strong organic revenue growth, the acquisition of Globe, a streamlined cost structure, and a lower effective tax rate were the key drivers of earnings growth in 2018.

• Operating cash flow was $267 million compared to $230 million a year ago. Free cash flow increased 11 percent from a year ago to $230 million. Free cash flow conversion exceeded 100 percent of net income, driven by a 220 basis point improvement from a year ago in working capital as a percent of sales.

• In 2018, the company invested more than $50 million in research and development, reduced its debt balance by $108 million, and returned $57 million to shareholders through dividend payments.

Comments from Management

"In the fourth quarter MSA delivered record revenue and drove meaningful improvements in working capital, which resulted in free cash flow that more than doubled from a year ago," said Nish Vartanian, MSA President and CEO. He added that MSA's backlog remained elevated at the end of 2018, despite the notable uptick in quarterly invoicing.

The company realized strong growth across its core product portfolio, supported by investments in new product development. "It was certainly exciting to see continued growth in our fire service business, led by deliveries of our market-leading G1 SCBA to large fire departments in the U.S., Latin America, and Asia-Pacific," Mr. Vartanian continued.  "On the industrial side of our business, we realized double-digit growth in our personal protective equipment product lines, where we've invested heavily to develop what we believe are the most comfortable and customizable hard hat and fall protection solutions available today."

"Our global teams remain committed to executing the profitable growth strategy that has helped us drive outstanding financial performance over the past several years," he said.  Demonstrating these improvements, MSA posted full year revenue growth of 13 percent, adjusted earnings growth of 24 percent, and free cash flow conversion well in excess of 100 percent of net income in 2018. "As we enter 2019 - our 105th year in business - our strong balance sheet and healthy incremental margin profile position us well to build on this success and continue creating value for shareholders," Mr. Vartanian concluded.