MSA Safety (MSA) Reports Strong Sales and Profit Growth

MSA Safety Incorporated (NYSE: MSA) has released its financial results for the fourth quarter and full year 2023, reporting a strong performance and resilient demand. The company achieved a 12% increase in net sales year-over-year for the fourth quarter, reaching $495 million, while full-year net sales stood at $1.8 billion, marking a 17% increase from the previous year.

Nish Vartanian, MSA Safety Chairman and Chief Executive Officer, expressed satisfaction with the company's performance, stating, "Our team delivered excellent full year results with double-digit sales growth and robust margin expansion. Investments we have made in the development of innovative new products and solutions, our commercial strategy, and across our functional support areas are enabling us to better serve our customers and advance our mission."

The company's GAAP operating income for the fourth quarter was $102 million, or 20.6% of sales, and adjusted operating income was $115 million, or 23.3% of sales. For the full year, GAAP operating income stood at $231 million, or 12.9% of sales, and adjusted operating income was $398 million, or 22.2% of sales. Additionally, MSA recorded GAAP net income of $76 million, or $1.93 per diluted share, for the fourth quarter, and adjusted net income of $82 million, or $2.06 per diluted share.

Lee McChesney, MSA Safety Senior Vice President and Chief Financial Officer, emphasized the company's progress in strengthening its financial position, with net leverage standing at 1.0x at year-end. Looking ahead, he stated, "As we move forward, we expect to build on our progress and leverage the MSA business system to drive further sales growth and margin expansion."

On the market, MSA's shares have moved 1.1%, reaching a price of $176.48.

The company's full 8-K submission is available here.

2018 2019 2020 2021 2022 2023
Revenue (MM) $1,358 $1,402 $1,348 $1,400 $1,528 $1,736
Revenue Growth n/a 3.23% -3.83% 3.85% 9.13% 13.59%
Gross Margins 45% 46% 44% 44% 44% 47%
Operating Margins 13% 13% 13% 2% 16% 12%
Net Margins 9% 10% 9% 2% 12% 2%
Net Income (MM) $124 $138 $124 $21 $180 $34
Net Interest Expense (MM) $19 $14 $9 $11 $22 $45
Earnings Per Share $3.18 $3.52 $3.15 $0.54 $4.56 $0.83
EPS Growth n/a 10.69% -10.51% -82.86% 744.44% -81.8%
Diluted Shares (MM) 39 39 39 39 39 39
Free Cash Flow (MM) $230 $128 $158 $155 $115 -$57
Capital Expenditures (MM) $34 $37 $49 $44 $43 $45
Current Ratio 2.33 2.5 2.58 2.4 2.54 2.62
Total Debt (MM) $381 $368 $327 $598 $580 $768

MSA Safety has rapidly growing revenues and increasing reinvestment in the business, an excellent current ratio of 2.62, and wider gross margins than its peer group. However, the firm suffers from declining EPS growth and positive cash flows. Finally, we note that MSA Safety has decent operating margins with a stable trend.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.