SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 2003
Commission File No. 1-15579
MINE SAFETY APPLIANCES COMPANY
(Exact name of registrant as specified in its charter)
| Pennsylvania (State or other jurisdiction of incorporation or organization) |
25-0668780 (IRS Employer Identification No.) |
| 121 Gamma Drive RIDC Industrial Park O’Hara Township Pittsburgh, Pennsylvania (Address of principal executive offices) |
15238 (Zip Code) |
Registrant’s telephone number, including area code: 412/967-3000
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule12b-2 of the Exchange Act).
Yes X No
As of April 30, 2003, there were outstanding 12,230,224 shares of common stock without par value, not including 1,344,775 shares held by the Mine Safety Appliances Company Stock Compensation Trust.
PART I FINANCIAL INFORMATION
MINE SAFETY APPLIANCES COMPANY
CONSOLIDATED
CONDENSED BALANCE SHEET
(Thousands of dollars, except share data)
|
|
|
March 31 |
|
December 31 |
| ||
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|
|
|
|
|
| ||
|
|
|
Unaudited |
|
|
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|
|
|
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| ASSETS |
|
|
|
|
|
|
|
| Current assets |
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
27,891 |
|
$ |
36,477 |
|
| Trade receivables, less allowance for doubtful accounts of $4,496 and $4,134 |
|
|
82,911 |
|
|
58,648 |
|
| Other receivables |
|
|
36,189 |
|
|
35,456 |
|
| Inventories: |
|
|
|
|
|
|
|
| Finished products |
|
|
30,017 |
|
|
28,964 |
|
| Work in process |
|
|
15,442 |
|
|
14,936 |
|
| Raw materials and supplies |
|
|
33,186 |
|
|
32,848 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total inventories |
|
|
78,645 |
|
|
76,748 |
|
|
|
|
|
|
|
|
|
|
| Deferred tax assets |
|
|
20,975 |
|
|
20,396 |
|
| Prepaid expenses and other current assets |
|
|
9,667 |
|
|
10,157 |
|
| Assets held for sale |
|
|
42,379 |
|
|
45,062 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total current assets |
|
|
298,657 |
|
|
282,944 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property, plant and equipment |
|
|
354,297 |
|
|
348,510 |
|
| Less accumulated depreciation |
|
|
(229,418 |
) |
|
(222,905 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net property |
|
|
124,879 |
|
|
125,605 |
|
|
|
|
|
|
|
|
|
|
| Prepaid pension cost |
|
|
110,404 |
|
|
107,338 |
|
| Deferred tax assets |
|
|
7,486 |
|
|
7,800 |
|
| Goodwill |
|
|
43,496 |
|
|
42,963 |
|
| Other noncurrent assets |
|
|
13,971 |
|
|
13,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| TOTAL |
|
$ |
598,893 |
|
$ |
579,765 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
|
| Notes payable and current portion of long-term debt |
|
$ |
10,906 |
|
$ |
14,060 |
|
| Accounts payable |
|
|
32,728 |
|
|
30,979 |
|
| Employees’ compensation |
|
|
16,675 |
|
|
16,216 |
|
| Insurance |
|
|
8,033 |
|
|
8,899 |
|
| Taxes on income |
|
|
9,203 |
|
|
3,748 |
|
| Other current liabilities |
|
|
27,957 |
|
|
25,798 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total current liabilities |
|
|
105,502 |
|
|
99,700 |
|
|
|
|
|
|
|
|
|
|
| Long-term debt |
|
|
64,041 |
|
|
64,350 |
|
| Pensions and other employee benefits |
|
|
63,089 |
|
|
61,198 |
|
| Deferred tax liabilities |
|
|
61,325 |
|
|
61,402 |
|
| Other noncurrent liabilities |
|
|
3,981 |
|
|
4,053 |
|
|
|
|
|
|
|
|
|
|
| Shareholders’ equity |
|
|
|
|
|
|
|
| Preferred stock, 4-1/2% cumulative - authorized 100,000 shares of $50 par value; issued 71,373 and 71,373 shares, callable at $52.50 per share |
|
|
3,569 |
|
|
3,569 |
|
| Second cumulative preferred voting stock - authorized 1,000,000 shares of $10 par value; none issued |
|
|
|
|
|
|
|
| Common stock - authorized 60,000,000 shares of no par value; issued 20,580,109 and 20,580,109 (outstanding 12,225,398 and 12,207,029) |
|
|
29,117 |
|
|
28,626 |
|
| Stock compensation trust - 1,358,479 and 1,384,629 shares |
|
|
(21,287 |
) |
|
(21,697 |
) |
| Less treasury shares, at cost: |
|
|
|
|
|
|
|
| Preferred - 50,313 and 50,313 shares |
|
|
(1,629 |
) |
|
(1,629 |
) |
| Common - 6,996,232 and 6,988,451 shares |
|
|
(133,462 |
) |
|
(133,198 |
) |
| Deferred stock compensation |
|
|
(1,584 |
) |
|
(801 |
) |
| Accumulated other comprehensive (loss) |
|
|
(18,388 |
) |
|
(20,501 |
) |
| Earnings retained in the business |
|
|
444,619 |
|
|
434,693 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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| Total shareholders’ equity |
|
|
300,955 |
|
|
289,062 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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| TOTAL |
|
$ |
598,893 |
|
$ |
579,765 |
|
|
|
|
|
|
|
|
|
|
See notes to consolidated condensed financial statements.
MINE SAFETY APPLIANCES COMPANY
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(Thousands of dollars, except per share amounts)
|
|
|
Three Months Ended |
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|
2003 |
|
2002 |
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| Net sales |
|
$ |
160,391 |
|
$ |
128,058 |
|
| Other income (expense) |
|
|
96 |
|
|
(157 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
160,487 |
|
|
127,901 |
|
|
|
|
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|
|
|
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|
|
|
|
|
|
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| Costs and expenses |
|
|
|
|
|
|
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| Cost of products sold |
|
|
98,895 |
|
|
77,337 |
|
| Selling, general and administrative |
|
|
39,096 |
|
|
30,672 |
|
| Depreciation and amortization |
|
|
5,393 |
|
|
5,042 |
|
| Interest |
|
|
1,119 |
|
|
1,171 |
|
| Currency exchange (gains) losses |
|
|
(1,150 |
) |
|
523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
143,353 |
|
|
114,745 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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| Income from continuing operations before income taxes |
|
|
17,134 |
|
|
13,156 |
|
| Provision for income taxes |
|
|
6,635 |
|
|
5,432 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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| Net income from continuing operations |
|
|
10,499 |
|
|
7,724 |
|
| Net income from discontinued operations |
|
|
1,514 |
|
|
260 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
|
$ |
12,013 |
|
$ |
7,984 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic earnings per common share: |
|
|
|
|
|
|
|
| Continuing operations |
|
$ |
0.86 |
|
$ |
0.64 |
|
| Discontinued operations |
|
|
0.12 |
|
|
0.02 |
|
|
|
|
|
|
|
|
|
|
| Net income |
|
$ |
0.98 |
|
$ |
0.66 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted earnings per common share: |
|
|
|
|
|
|
|
| Continuing operations |
|
$ |
0.86 |
|
$ |
0.63 |
|
| Discontinued operations |
|
|
0.12 |
|
|
0.02 |
|
|
|
|
|
|
|
|
|
|
| Net income |
|
$ |
0.98 |
|
$ |
0.65 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Dividends per common share |
|
$ |
0.17 |
|
$ |
0.14 |
|
|
|
|
|
|
|
|
|
|
See notes to consolidated condensed financial statements.
MINE SAFETY APPLIANCES COMPANY
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(Thousands of dollars)
|
|
|
Three Months Ended |
| ||||
|
|
|
|
| ||||
|
|
|
2003 |
|
2002 |
| ||
|
|
|
|
|
|
| ||
| OPERATING ACTIVITIES |
|
|
|
|
|
|
|
| Net income |
|
$ |
12,013 |
|
$ |
7,984 |
|
| Depreciation and amortization |
|
|
5,393 |
|
|
5,042 |
|
| Pensions |
|
|
(2,367 |
) |
|
(3,748 |
) |
| Net (gain) loss on sale of investments and assets |
|
|
(21 |
) |
|
30 |
|
| Deferred income taxes |
|
|
(160 |
) |
|
2,073 |
|
| Net income from discontinued operations |
|
|
(1,514 |
) |
|
(260 |
) |
| Changes in operating assets and liabilities |
|
|
(16,236 |
) |
|
(12,412 |
) |
| Other - including currency exchange adjustments |
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