MSA Safety's (NYSE:MSA) focus in recent quarters has been to use its balance sheet to make acquisitions that create value while managing costs to improve profitability. Both of those efforts paid dividends last quarter as the company's recent acquisition of Globe Manufacturing Company provided a notable boost to the bottom line while cost-cutting efforts took things a step further. Meanwhile, with strengthening incoming orders, it appears poised to continue growing for the foreseeable future.

MSA Safety's results: The raw numbers


Q3 2017

Q3 2016

Year-Over-Year Change


$296.1 million

$278.2 million


Adjusted earnings

$35.4 million

$27.4 million


Adjusted EPS




Data source: MSA Safety.

Firefighter gear lined up and ready for use.

Image source: Getty Images.

What happened with MSA Safety this quarter?

M&A and restructuring led the way.

  • Sales rose 6.4% versus the year-ago quarter thanks primarily to recent acquisitions, which added 8% to the top line. Globe led the way, boosting revenue from firefighter helmets and protective apparel by 187% while another recent deal added 2% to the top line of its fixed gas and flame detection segment.
  • Not only was Globe a significant revenue contributor, but it added $0.07 per share to the bottom line after excluding transaction costs and purchase accounting amortization. In the meantime, the company's restructuring programs cut $6 million from selling, general, and administrative (SG&A) expenses during the quarter. Those two factors drove a nearly 30% surge in adjusted earnings, while $12 million in stock repurchases juiced per-share earnings by a few more points.
  • MSA Safety generated $43 million in cash flow from operating activities during the quarter, more than double the $19 million it pulled in during the year-ago quarter. That strong cash flow enabled the company to pay dividends, repurchase stock, and maintain a healthy cash position.

What management had to say

Elaborating more on the company's third-quarter results, CEO William Lambert said:

Our third quarter results reflect our investments in strategic acquisitions and transformational restructuring programs that have streamlined our cost structure and driven earnings growth. We were able to generate non-GAAP earnings of $0.07 per share from our recent acquisition of Globe, and we have already exceeded our full-year cost savings target from previously announced restructuring activities.

Lambert pointed out that this year's restructuring programs have already cut SG&A expenses by $6 million, though they're actually up to $11 million on a constant currency basis. Those savings are providing a noticeable boost to the bottom line, which is giving it the financial strength to make strategic acquisitions and investments that are accelerating its growth rate.

Looking forward

Those dual drivers set the company up for continued growth. Furthermore, Lambert also noted that "our incoming order book continues to show strength in industrial products, and we've recently seen an improvement in demand from the fire service." He also pointed out that MSA SAfety carried a "healthy backlog heading into the fourth quarter." These factors, according to Lambert, "positions us well to continue enhancing shareholder value in the final months of 2017 and beyond."