Senior Management. Years Name Position with MSA

Transcription

1 November 1,

2 Safe Harbor Except for historical information, certain matters discussed in this press release may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements, including without limitation all projections and anticipated levels of future performance, involve risks, uncertainties and other factors that may cause our actual results to differ materially from those discussed herein. Actual results can be affected by any number of factors, many of which are outside of management s control. Among the factors that could cause such differences are spending patterns of government agencies, competitive pressures, product liability claims, the success of new product introductions, currency exchange rate fluctuations, the identification and successful integration of acquisitions and the risks of doing business in foreign countries. These risks, uncertainties and other factors are detailed from time to time in our filings with the United States Securities and Exchange Commission ("SEC"). 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 as well as on a number of other commercial web sites. 2

3 Senior Management Years Name Position with MSA John T. Ryan III Chairman and Chief Executive Officer 37 William M. Lambert President and Chief Operating Officer 25 Dennis L. Zeitler Chief Financial Officer 30 Roberto Cañizares President MSA International 4 Joseph A. Bigler President MSA North America 35 3

4 That men and women may work in safety and that they, their families and their communities may live in health throughout the world. Overview Founded ninety-two years ago as a supplier of safety equipment for miners Expanded early into industrial, fire service and other markets Early global presence established in the 1940s/1950s Edison Electric Cap Lamp 4

5 Only Publicly Traded U.S. Safety Company Market leader with trusted brand in sophisticated safety products Long-term global presence Excellent balance and diversification products/markets/customers/geographies Strong relationships with distributors and customers Positioned to leverage industry growth trends We re a proven product innovator We re an integrator of electronics with safety equipment We re on the leading edge of advancing safety standards Homeland security products (from military + first responder + gas detection) We re established in international growth markets We re a successful acquirer/integrator Strong Dividend Growth (+300% in 5 years) Multi-year Stock Repurchase Program 5

6 Industry Overview Respiratory Protection 14% Gas Detection 10% Hearing Protection 4% Head Protection 5.5% Fall Protection 5.5% Ballistics Protection 8% Eye Protection 6% Footwear 14% Total Market: $15 billion Company estimates Gloves 15% Clothing 17% $15 billion market expected to grow at 4 6% per year Largest markets include general industry, first responders, military, and Do-It-Yourself retail Higher growth products include gas detection, respiratory protection, head protection and fall protection 6

7 Reasons MSA Can Grow Faster Than the Safety Market Our product mix is more favorable Our market mix is more favorable International Eastern Europe Retail Global Capabilities Accounts, Manufacturing, R&D, Others MSA Focus and Strong Reinvestment in our Business Deep interest in Key Technologies and Standards Strong relationships with Major Growing Distributors Selective Acquisitions 7

8 Our Global Goals 2007: Record sales and record earnings Seek 10% growth from commercial safety markets Grow non-military revenue to be approximately 85% of total sales Increase Operating Margin to 18% (12% in 2006) 8

9 MSA Peer Group ($ Millions) NOTE: Company Name Operating Income (*) 9 Pension Expense Total Sales Operating Income % of Sales Roper Industrial Inc. $ 338 $ - $1, % IDEX Corporation , % Mettler - Toledo International , % Matthews International Corp % Ametek Inc , % Brady Co , % Clarcor Inc % Moog Inc , % STERIS Corporation , % Crane Co , % DRS Technolgies Inc , % Mine Safety Appliances % Perkin Elmer Inc , % Albany International Corporation , % Varian Inc % Checkpoint Systems % Federal Signal Corporation , % Robbins & Myers Inc % Katy Industries Inc % Milacron Inc. (6) % Invacare Corporation (260) - 1, % * Operating Income is after adjustments for pension income/expense. Average (less 4 lows) 1, % Average top 5 1, %

10 Our Global Strategy Be a leading global supplier in all products/markets in which we compete Be a technological leader Have the best market coverage Be cost competitive Engage global best practices Adhere to the highest ethical standards and treat associates fairly 10

11 Sales by End Markets $1,000,000 $950,000 $200,000 $900,000 $850,000 $800,000 $150,000 $750,000 $700,000 $650,000 $100,000 $600,000 $550,000 $50,000 $500,000 $450,000 $400, Actual 2004 Actual 2006 Actual $ Actual 2004 Actual 2006 Actual Global Core Industrial Sales Total Global Sales US Military Sales US Fire Service Sales 11

12 Balance and Diversification Corporate Sales by Product and Market 2007 Sales by Product Group 2007 Sales by End-Markets 14% 12% 29% 27% 6% 2% 21% 24% 65% Head Protection Air Supplied Resp Fall Protection Instruments Air Purifying Resp. Core Industrial First Responder Military Consumer Source: Company Results 12

13 Core Industrial Market Market Segments Oil, Gas, Petrochemical Construction Utilities Automobile HVAC Mining Iron & Steel Market Drivers Safety regulations (OSHA-Occupational Safety & Health Administration, EN-European Norms, NIOSH-National Institute for Occupational Safety & Health) Employment levels Economic development 13

14 First Responders Market Fire Service Products SCBA Fire Helmets Portable Instruments Thermal Imaging Cameras Law Enforcement Products Chem-Bio Gas Masks CBRN Escape Hoods CBRN Instrumentation Ballistic Helmets Response PAPRs Body Armor Market Drivers Threat Levels Federal Funding Standards (NFPA) 14 Time, 2001

15 U.S. Military Army (Ballistic Helmets & COMMs) Air Force (Gas Masks, SCBA) Navy (Breathing Apparatus) Marines (Gas Masks) Coast Guard Military Market Global Military Presence Germany Canada France Australia Japan Growth Drivers War on Terror Operation Enduring Freedom Operation Iraqi Freedom Future Force Warrior Program 15 New Product Development

16 Positioned to Leverage Industry Growth Trends We are a proven product innovator Galaxy Gas Analyzer Automated calibration system Evolution 5600 TIC Affordable, big city performance, Defender Integrated Visor Only retractable visor in Traditional Helmet AirElite Closed-Circuit SCBA Provides oxygen for up to 4 hours FireHawk M7 SCBA Designed to meet or exceed 2007 NFPA Standards for SCBA & PASS Altair Single-Gas Detectors 16 Low-cost, rugged, easy to use Supreme Pro Hearing Protection High-Noise Communications Sirius Multigas & PID Detector Wireless connectivity to wide-area monitoring SAFESITE Multi-Threat Wireless Detection System

17 Positioned to Leverage Industry Growth Trends We provide interoperable safety systems Integrated Electronics Cross-Platform Sharing Increased Reliability Increased Safety & Effectiveness Evolution TIC Video Capture Wirelessly transmits fire scene to Incident Command FireHawk M7 Responder Combines SCBA with PAPR as specified, and ordered by US Air Force FireHawk Rescue Belt Emergency egress for firefighters Paraclete Body Armor Provides platform for radio & other storage pouches SmoothDome Helmet Defender Visor Combines eye, face, head protection 17

18 Positioned to Leverage Industry Growth Trends Six Markets Targeted for Growth Fire Service: Growth driven by 2007 Edition of NFPA Standard, Assistance to Firefighter Grants and New Products Oil, Gas, Energy: Well positioned for downstream Refinery Turnaround, MRO markets and exploration Construction: V-Gard helmet (largest selling hard hat) & new Workman fall protection line well positioned to capture growing commercial construction market 18

19 Positioned to Leverage Industry Growth Trends Six Markets Targeted for Growth Military: Continue to meet growing demand for ACH, Gas Masks, SCBA and Body Armor worldwide Law Enforcement: First approved CBRN PAPR compatible with 800,000+ installed Millennium facepieces; Approved supplier to Dept of Homeland Security Border Patrol Retail/Small Contractor: Increased store share at The Home Depot and Lowe s Canada; New packaging designs across entire line 19

20 Industry Leading R&D Primary Design Centers Cranberry, PA, USA Berlin, Germany Chatillon, France Varnamo, Sweden China (developing) New Product Development portfolio created by cross-functional Global Steering Teams using one common NPD process 20

21 MSA s Global R&D Resources 200+ engineers, scientists and technicians world-wide Expertise to the PhD level Mechanical Software Electrical Manufacturing Chemical Other Specialties CAD designers, drafters, support specialists in each center Nearly 10% of R&D budget is in Advanced Technology Programs Focus on Global Standards participation 21

22 New Products Released in Last Three Years CBRN Canister CBRN Millennium Respirator CBRN Ultra Elite Respirator CBRN Escape Hood Chin Canisters 1 st Stage Regulator FireHawk Rescue Belt ICM Tx Module ClearCommand Comm System NightFighter HUD Battery ICM TxR Module Evolution 5200 TIC Evolution 5200 HD 2 TIC Evolution 5600 TIC Evolution TIC Video Capture ANSI Z-87 Update Visor One-Touch Suspension MSA Hearing Protection Cairns 664 Invader Helmet Cairns 1044 Helmet Cairns Defender Visor SmoothDome I Helmet Concealable Ballistic Vests ForceField Echo Carrier ForceField Tango Carrier Commercial ACH Aptura LT-30 SRL Workman Harnesses Workman Lanyards X 3 Technology SafeSite Monitoring System Z-Gard Detector SafeCONNECT VaporLab 700 Monitor 9010/9020 Controllers Galaxy Tester, Accessories Solaris Fire Detector Solaris LX Detector HazmatCAD CWA Detector HazmatCAD Pro Detector Sirius PID Detector Altair Family Single-Gas AltairPlus Family Orion Plus Detector 22

23 Continuing to Invest in New Product Development Upward Trend in sales from products introduced in past 3-years, as a % of total annual sales. Our Goal: Strong pipeline of new products = 30%-40% of annual sales from products introduced in last 3 years. R&D spend is highest among peer competitors % of Annual Sales from New Products 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Target Range for New Product Sales as % of Total Sales 20% Results of NPD 26% 30% 39% 41% 31% % of Total Gross R&D $ $40 $38 $36 $34 $32 $30 $28 $26 $24 $22 $20 Gross R&D Spend $x10 6 Source: Company estimates, data represents North American segment only Note: New products defined as those introduced within past 3 years, 23

24 Leverage Customer & Distributor Relationships Largest sales force in the industry Well positioned multi-national industrial & retail distributors Outstanding Supplier Award *Hagemeyer *Airgas ACCE Awards Best Customer Call Center *Grainger *Home Depot *Fisher Safety Vendor of the Year Anvil Award Best Marketing Communication Recent Awards: Customer Service Center of the Year : Fisher Award of Excellence NA Customer Service Mgt 2006: Airgas Best Field Sales Support Top Growth Award

25 Achieve Operational Excellence in the sophisticated safety market. Improve operating margins while helping to grow our business and serve our customers. Globally coordinated operational strategy, structure and plan. Identify and implement global best practices within MSA s operations. Build breadth and depth of the OPEX management team and develop best-in-class competencies and skills. Global Component Sourcing saved $ 1.6 million and Global Tool Sourcing saved $ 1.3 million by expanding efforts in China, Mexico and other lower cost countries in

26 Optimize Global Manufacturing Capacity and Capabilities 3 Primary European Operations Berlin, Germany Chatillon, France Varnamo, Sweden 6 Primary Int l Operations Johannnesburg, South Africa Mohammedia, Morocco Sao Paulo, Brazil Sydney, Australia Suzhou, China Wuxi, China 11 Primary North American Operations Bowling Green, Kentucky Clifton, New Jersey Cranberry Twp, Pennsylvania Englewood, Colorado Evans City, Pennsylvania Jacksonville, North Carolina Mexico City, Mexico Murrysville, Pennsylvania Newport, Vermont Querėtaro, Mexico St. Pauls, North Carolina used Lean to free up 14% of our manufacturing space in North America enabling increased capacity and consolidation of one factory 26

27 Well Positioned for Growth in International Markets 27 Growth Markets China Southeast Asia/India Eastern Europe Africa Middle East Latin America International Growth Drivers Long-term MSA investment Heightened awareness of worker safety needs Increased manufacturing in low-cost regions Increased enforcement of safety regulations

28 Selective Acquisitions Core Products #1 or #2 in our core products New Channels of Distribution Expand our market coverage Geographic Expansion Have a meaningful presence in significant economies Advanced Technologies Be the technology leader 28

29 Acquisitions Since 2000 Cairns - Firefighter Helmets Gallet - Firefighter & Military Helmets 2002 Sordin - Hearing Protection Microsensor Systems - CWA Detection Select PPE - South Africa Paraclete - Body Armor 2006 Acceleron Firefighter Location

30 Financial Overview 30

31 Summary Income Statement ($Millions) Sales (CAGR 12%) $ EBITDA* $ % 13% 14% 16% 17% 14% Pension Income $ EBITP* $ % 7% 9% 12% 13% 11% EBIT* $ % 9% 11% 13% 14% 12% Net Income* $ % 6% 7% 8% 9% 8% EPS - Basic $ *Excludes option costs and restructuring charges 31

32 Strong Balance Sheet Assets ($000s) 9/30/2007 Cash and Equivalents 83,875 Other Current Assets 398,143 Total Current Assets 482,018 PP&E, net 125,993 Prepaid Pension Cost 219,601 Goodwill 86,667 Other Noncurrent Assets 89,129 TOTAL ASSETS 1,003,408 Liabilities and Equity ($000s) 9/30/2007 Notes Payable/Current Portion 49,079 Other Current Liabillities 154,157 Total Current Liabilities 203,236 Long-term Debt 111,234 Pensions and Other Benefits 118,674 Other Noncurrent Liabilities 117,418 Total Noncurrent Liabilities 347,326 Total Shareholders' Equity 452,846 TOTAL LIABILITIES AND EQUITY 1,003,408 32

33 Solid Cash Flow ($000S) Net Income 25,851 31,213 48,924 71,047 81,783 69,406 Pension Income (9,725) (8,531) (5,749) (4,672) (3,968) (2,696) Depreciation and Amortization 22,590 21,525 23,208 25,496 24,345 22,147 Working Capital & Other (10,931) 5,249 (25,843) (42,975) (21,517) (26,014) Cash Flow 27,785 49,456 40,540 48,896 80,643 62,843 Capital Expenditures (19,987) (20,072) (19,628) (27,330) (21,664) (22,734) FREE CASH FLOW 7,798 29,384 20,912 21,566 58,979 40,109 33

34 MSA Dividend History $45 $ Total Dividends Paid (Millions) $40 $35 $30 $25 $20 $15 $10 $0.18 $0.22 $0.26 $0.37 $0.52 $ Basic Shares Outstanding (Millions) $ (Est.) Dividends per Share 30 Dividend/Share Total Dividends Paid Basic Shares Outstanding 34

35 Priorities for Free Cash Flow Pay a dividend consistent with MSA s business profile Make acquisitions to expand markets, products and technologies Repurchase MSA common shares 35

36 Conclusion Market leader with trusted brand in sophisticated safety products Long-term global presence Excellent balance and diversification products/markets/customers/geographies Strong relationships with distributors and customers Positioned to leverage industry growth trends We re a proven product innovator We re an integrator of electronics with safety equipment We re on the leading edge of advancing safety standards Homeland security products (from military + first responder + gas detection) We re established in international growth markets We re a successful acquirer/integrator Strong Dividend Growth (+300% in 5 years) Multi-year Stock Repurchase Program Only Publicly Traded U.S. Safety Company 36