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 PITTSBURGH, Oct. 29 /PRNewswire/ -- John T. Ryan III, president, chairman and chief executive officer of Mine Safety Appliances Company (NASDAQ-NMS: MNES), announced today that consolidated sales for the third quarter of 1993 were $103,899,000 compared to $125,663,000 for the third quarter of 1992. Sales for the nine months ended Sept. 30, 1993, were $316,602,000 compared to $382,010,000 for the same period in 1992.
 Net income from continuing operations for the 1993 third quarter was $1,411,000 or 24 cents per share compared to 1992 third quarter of $3,595,000 or 58 cents per share. Consolidated net income in the third quarter of 1992, including losses on discontinued operations, was $2,317,000 or 37 cents per share.
 Net income from continuing operations for the nine months ended Sept. 30, 1993, was $6,890,000 or $1.13 per share compared to $14,218,000 or $2.27 per share in 1992. Consolidated net income for the nine months ended Sept. 30, 1992, including losses on discontinued operations and restated for the cumulative effect of changes in accounting principles, was $2,019,000 or 31 cents per share.
 The most significant factor in the sales decline is decreased shipments of gas masks to the U.S. military which peaked in 1992 due to the Middle East conflict. While most of this reduction was anticipated following fulfillment of temporary requirements, 1993 military sales have also been negatively affected by delays in production on one large contract due to a technical difficulty on a subcontractor-provided component. Considerable progress has been made to resolve this issue with the objective of beginning production in early 1994. Higher margins on current contracts, due to better cost performance, are providing a partial offset to the decline in sales. U.S. military sales in 1994 are expected to be at near-normal levels, below the peaks of 1992 but above current sales.
 Overall sales to U.S. commercial markets remained essentially flat in a continuingly stagnant industrial economy. Sales of portable instruments have continued to grow while sales of breathing apparatus have been temporarily reduced due to timing changes in distributor buying patterns caused by the discontinuance of a seasonal discount program.
 The company's sales in Europe remain depressed under severe recessionary conditions. Currency exchange rates have also been unfavorable. In addition, 1992 first half sales included a large non-recurring contract. Further economic stagnation is forecast for Europe, particularly in Germany where the company has its largest international operations. International sales in the rest of the world have grown modestly.
 Profits from continuing operations have declined due to the lower sales in the U.S. and Europe as described above. Third quarter 1993 results were also substantially impacted by a non-cash charge to adjust LIFO basis inventories. LIFO provisions made by the company in past quarters had assumed progress on inventory reduction in the U.S. by year- end that do not now seem likely, partially due to the above-mentioned military production problem. (Current estimates are that U.S. year-end 1993 inventory will be essentially unchanged from year-end 1992.) Programs are well under way in reengineering manufacturing processes which give us confidence that meaningful inventory reductions will eventually be attained, but not during the current year.
 Cost-control efforts have reduced selling, general and administrative expense levels and have assisted the company's performance on direct product costs. Third quarter results benefitted from the inclusion of the recently acquired HAZCO Services, a U.S.-based distribution and rental supplier serving the hazardous materials/environmental market.
 German results continue to be affected by the phasing out of government incentives to companies located in Berlin. Restructuring of international operations, particularly in Germany where a factory and a major warehouse are being closed, was initiated late in 1992, and more actions are in progress, including work-week reductions. However, local legal and industrial relations conditions prolong the time required to accomplish these changes, and most of the benefits are not expected until after year-end.
 Historically, under more normal economic conditions, seasonal factors have resulted in fourth quarter performance which was above average in Europe and below average in the U.S. In 1993, overall business conditions in Europe are very poor. In the U.S., earnings in the fourth quarter will be affected by temporary transition costs of a reengineered manufacturing process in a major product and by the lack of production on the large previously mentioned military contract. Therefore, the company said it cannot be optimistic about this quarter's prospects.
 Recent incoming orders for key elements of the company's business have shown some improvement. Customer response to a number of innovative new products has been encouraging. During 1994, the major transitions in Europe will be completed as well as less dramatic ones in elements of U.S. operations. Military business is expected to be higher. As many of MSA's key customer groups lag general economic recovery, there is some basis for hope that the market for safety products will gradually trend upward in the U.S. and stabilize in Europe. With stronger product competitiveness and lower operating cost levels, the company said it feels encouraged for the outlook in 1994.
 The company previously announced the discontinuance of the metallized paper venture in Germany and the adoption of changes in accounting principles relating to post-retirement medical and other post- employment benefits and income taxes. The financial effect of these changes is set out in the restated 1992 results.
 The results from operations for the three-month and nine-month periods ended Sept. 30 follow.
 (Note: Amounts in thousands, except earnings per share
 and shares outstanding)
 Three Months Ended Nine Months Ended
 Sept. 30 Sept. 30
 1993 1992 1993 1992
 Continuing operations
 Net sales $103,899 $ 125,663 $316,602 $ 382,010
 Cost of products
 sold 68,076 83,763 202,737 251,709
 Selling and administrative
 costs 30,257 32,175 90,453 96,405
 Facilities consolidation
 and restructuring
 charges -- -- -- 2,600
 Contract costs recovery -- -- -- (2,800)
 Income before income
 taxes 2,154 6,157 11,917 24,111
 Taxes on income 743 2,562 5,027 9,893
 Income from continuing
 operations 1,411 3,595 6,890 14,218
 Losses from discontinued
 operations -- (1,278) -- (3,235)
 Cumulative effect to Jan. 1, 1992,
 of changes in accounting
 principles -- -- -- (8,964)
 Net income 1,411 2,317 6,890 2,019
 Earnings per share
 Continuing operations $.24 $.58 $1.13 $2.27
 Discontinued operations -- $(.21) -- $(.52)
 Cumulative effect to Jan. 1,
 1992, of changes in
 accounting principles -- -- -- $(1.44)
 Net income $.24 $.37 $1.13 $.31
 Average number of common
 shares outstanding -- -- 6,082,039 6,257,446
 The Board of Directors has declared a fourth quarter dividend of 23 cents per share on common stock, payable Dec. 10, 1993, to shareholders of record on Nov. 19, 1993.
 The board also declared a dividend of 56-1/4 cents per share on preferred stock, payable Dec. 1, 1993, to shareholders of record on Nov. 12, 1993.
 -0- 10/29/93
 /CONTACT: Robert J. Aiello of Ketchum Public Relations, 412-456-3853, for Mine Safety Appliances Company/

CO: Mine Safety Appliances Company ST: Pennsylvania IN: MNG SU: ERN DIV

DM -- PG004 -- 8552 10/29/93 13:22 EDT
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Publication:PR Newswire
Date:Oct 29, 1993

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