Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 23, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | MSA | |
Entity Registrant Name | MSA Safety Incorporated | |
Entity Central Index Key | 66,570 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 38,435,229 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Net sales | $ 339,331 | $ 288,775 | $ 665,225 | $ 554,540 |
Cost of products sold | 185,495 | 155,812 | 364,050 | 301,855 |
Gross profit | 153,836 | 132,963 | 301,175 | 252,685 |
Selling, general and administrative | 81,962 | 74,104 | 162,213 | 150,890 |
Research and development | 13,909 | 11,933 | 26,456 | 22,931 |
Restructuring charges (Note 5) | 2,335 | 967 | 7,609 | 13,706 |
Currency exchange losses, net | 815 | 2,851 | 2,823 | 3,431 |
Other operating expense (Note 19) | 8,018 | 29,610 | 10,842 | 29,610 |
Operating income | 46,797 | 13,498 | 91,232 | 32,117 |
Interest expense | 5,181 | 3,014 | 9,962 | 6,605 |
Other income, net | (1,701) | (1,228) | (4,041) | (2,686) |
Total other expense, net | 3,480 | 1,786 | 5,921 | 3,919 |
Income before income taxes | 43,317 | 11,712 | 85,311 | 28,198 |
Provision (benefit) for income taxes (Note 11) | 9,896 | (902) | 19,401 | 894 |
Net income | 33,421 | 12,614 | 65,910 | 27,304 |
Net income attributable to noncontrolling interests | (242) | (82) | (360) | (359) |
Net income attributable to MSA Safety Incorporated | $ 33,179 | $ 12,532 | $ 65,550 | $ 26,945 |
Earnings per share attributable to MSA Safety Incorporated common shareholders: | ||||
Basic | $ 0.86 | $ 0.33 | $ 1.71 | $ 0.71 |
Diluted | 0.85 | 0.32 | 1.69 | 0.70 |
Dividends per common share | $ 0.38 | $ 0.35 | $ 0.73 | $ 0.68 |
Condensed Consolidated Stateme3
Condensed Consolidated Statement of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 33,421 | $ 12,614 | $ 65,910 | $ 27,304 |
Other comprehensive (loss) income, net of tax: | ||||
Foreign currency translation adjustments (Note 7) | (27,880) | 14,123 | (14,480) | 24,867 |
Pension and post-retirement plan actuarial gains, net of tax (Note 7) | 3,059 | 2,157 | 5,388 | 4,141 |
Total amount reclassified from Accumulated other comprehensive loss, net of tax | (774) | 0 | (774) | 0 |
Total other comprehensive (loss) income, net of tax | (25,595) | 16,280 | (9,866) | 29,008 |
Comprehensive income | 7,826 | 28,894 | 56,044 | 56,312 |
Comprehensive loss (income) attributable to noncontrolling interests | 31 | 755 | (257) | 1,104 |
Comprehensive income attributable to MSA Safety Incorporated | $ 7,857 | $ 29,649 | $ 55,787 | $ 57,416 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheet - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 116,650 | $ 134,244 |
Trade receivables, less allowance for doubtful accounts of $5,786 and $5,540 | 239,406 | 244,198 |
Inventories (Note 4) | 177,256 | 153,739 |
Prepaid income taxes | 34,023 | 31,448 |
Notes receivable, insurance companies (Note 19) | 3,494 | 17,333 |
Prepaid expenses and other current assets | 38,682 | 41,335 |
Total current assets | 609,511 | 622,297 |
Property, plant and equipment, net (Note 6) | 148,780 | 157,014 |
Prepaid pension cost | 88,237 | 83,060 |
Deferred tax assets (Note 11) | 25,806 | 25,825 |
Goodwill (Note 14) | 418,384 | 422,185 |
Intangible assets (Note 14) | 176,600 | 183,088 |
Notes receivable, insurance companies, noncurrent (Note 19) | 60,340 | 59,567 |
Insurance receivable (Note 19) and other noncurrent assets | 122,901 | 131,790 |
Total assets | 1,650,559 | 1,684,826 |
Current liabilities | ||
Notes payable and current portion of long-term debt, net (Note 13) | 26,895 | 26,680 |
Accounts payable | 76,331 | 87,061 |
Employees’ compensation | 34,760 | 39,377 |
Insurance and product liability (Note 19) | 57,495 | 59,116 |
Income taxes payable (Note 11) | 12,177 | 0 |
Warranty reserve (Note 19) and other current liabilities | 75,614 | 77,045 |
Total current liabilities | 283,272 | 289,279 |
Long-term debt, net (Note 13) | 403,712 | 447,832 |
Pensions and other employee benefits | 167,906 | 170,773 |
Deferred tax liabilities (Note 11) | 8,589 | 9,341 |
Product liability (Note 19) and other noncurrent liabilities | 148,010 | 165,023 |
Total liabilities | 1,011,489 | 1,082,248 |
Commitments and contingencies (Note 19) | ||
Equity | ||
Preferred stock, 4 1/2% cumulative, $50 par value (Note 8) | 3,569 | 3,569 |
Common stock, no par value (Note 8) | 204,171 | 194,953 |
Treasury shares, at cost (Note 8) | (298,623) | (297,834) |
Accumulated other comprehensive loss (Note 7) | (181,525) | (171,762) |
Retained earnings | 906,244 | 868,675 |
Total MSA Safety Incorporated shareholders' equity | 633,836 | 597,601 |
Noncontrolling interests | 5,234 | 4,977 |
Total shareholders’ equity | 639,070 | 602,578 |
Total liabilities and shareholders’ equity | $ 1,650,559 | $ 1,684,826 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Statement of Financial Position [Abstract] | ||
Trade receivables, allowance for doubtful accounts | $ 5,786 | $ 5,540 |
Common stock, par value (dollars per share) | $ 0 | $ 0 |
Preferred Stock, 4 1/2% Cumulative | ||
Preferred stock, dividend rate (percentage) | 4.50% | 4.50% |
Preferred stock, par value (dollars per share) | $ 50 | $ 50 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Operating Activities | ||
Net income | $ 65,910 | $ 27,304 |
Depreciation and amortization | 19,207 | 17,736 |
Restructuring charges (Note 5) | 0 | 11,384 |
Stock-based compensation (Note 12) | 7,692 | 8,233 |
Pension expense (Note 16) | 2,976 | 3,538 |
Deferred income tax benefit (Note 11) | (2,626) | (10,725) |
Loss on asset dispositions, net | 1,148 | 48 |
Pension contributions (Note 16) | (2,486) | (2,950) |
Currency exchange losses, net | 2,823 | 3,431 |
Other operating expense (Note 19) | 10,842 | 29,610 |
Trade receivables | (1,897) | (3,710) |
Inventories (Note 4) | (29,257) | (22,280) |
Prepaid expenses and other current assets | 12,234 | 22,473 |
Accounts payable and accrued liabilities | (26,099) | (7,591) |
Other noncurrent assets and liabilities | 4,915 | 69,781 |
Cash Flow From Operating Activities | 65,382 | 146,282 |
Investing Activities | ||
Capital expenditures | (8,812) | (6,127) |
Property disposals | 3,059 | 677 |
Cash Flow Used in Investing Activities | (5,753) | (5,450) |
Financing Activities | ||
Proceeds from short-term debt, net | 215 | 160 |
Proceeds from long-term debt (Note 13) | 248,500 | 182,500 |
Payments on long-term debt (Note 13) | (291,000) | (307,300) |
Cash dividends paid | (27,981) | (25,824) |
Company stock purchases (Note 8) | (3,835) | (4,784) |
Exercise of stock options (Note 8) | 4,293 | 12,057 |
Employee stock purchase plan (Note 8) | 280 | 282 |
Cash Flow Used in Financing Activities | (69,528) | (142,909) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (8,130) | 3,327 |
(Decrease) increase in cash, cash equivalents and restricted cash | (18,029) | 1,250 |
Beginning cash, cash equivalents and restricted cash | 137,889 | 114,962 |
Ending cash, cash equivalents and restricted cash | 119,860 | 116,212 |
Cash and cash equivalents | 116,650 | 115,361 |
Restricted cash included in prepaid expenses and other current assets | $ 3,210 | $ 851 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Retained Earnings and Accumulated Other Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | $ 597,601 | |||
Net income | $ 33,421 | $ 12,614 | 65,910 | $ 27,304 |
Pension and post-retirement plan actuarial gains, net of tax (Note 7) | 3,059 | 2,157 | 5,388 | 4,141 |
(Income) loss attributable to noncontrolling interests | (242) | (82) | (360) | (359) |
(Income) loss attributable to noncontrolling interests | 31 | 755 | (257) | 1,104 |
Preferred dividends | (10) | (10) | (20) | (20) |
Ending Balance | 633,836 | 633,836 | ||
Retained Earnings | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 887,656 | 897,458 | 868,675 | 901,415 |
Net income | 33,421 | 12,614 | 65,910 | 27,304 |
(Income) loss attributable to noncontrolling interests | (242) | (82) | (360) | (359) |
Common dividends | (14,581) | (13,359) | (27,961) | (25,804) |
Preferred dividends | (10) | (10) | (20) | (20) |
Ending Balance | 906,244 | 896,621 | 906,244 | 896,621 |
Accumulated Other Comprehensive (Loss) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | (156,203) | (216,892) | (171,762) | (230,246) |
Foreign currency translation adjustments | (27,880) | 14,123 | (14,480) | 24,867 |
Pension and post-retirement plan actuarial gains, net of tax (Note 7) | 3,059 | 2,157 | 5,388 | 4,141 |
Reclassification from accumulated other comprehensive (loss) into earnings | (774) | (774) | ||
(Income) loss attributable to noncontrolling interests | 273 | 837 | 103 | 1,463 |
Ending Balance | $ (181,525) | (199,775) | $ (181,525) | (199,775) |
Accounting Standards Update 2016-16 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Cumulative effect of the adoption of ASU 2016-16 (Note 2) | $ (5,915) | $ (5,915) |
Consolidated Statement of Chan8
Consolidated Statement of Changes in Retained Earnings and Accumulated Other Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Accumulated Other Comprehensive (Loss) | ||||
Tax on pension and post-retirement plan adjustments | $ 614 | $ 935 | $ 1,682 | $ 2,043 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements of MSA Safety Incorporated and its subsidiaries ("MSA" or the "Company") are unaudited. These condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary by management to fairly state the Company's results. Intercompany accounts and transactions have been eliminated. The results reported in these condensed consolidated financial statements are not necessarily indicative of the results that may be expected for the entire year. The December 31, 2017 condensed consolidated balance sheet data was derived from the audited consolidated balance sheet, but does not include all disclosures required by accounting principles generally accepted in the United States of America (U.S. GAAP). This Form 10-Q report should be read in conjunction with MSA's Form 10-K for the year ended December 31, 2017 , which includes all disclosures required by U.S. GAAP. |
Recently Adopted and Recently I
Recently Adopted and Recently Issued Accounting Standards | 6 Months Ended |
Jun. 30, 2018 | |
Recently Adopted and Recently Issued Accounting Standards [Abstract] | |
New Accounting Pronouncements and Changes in Accounting Principles | Recently Adopted and Recently Issued Accounting Standards In May 2014, the FASB issued ASU 2014-09, Revenue with Contracts from Customers . This ASU establishes a single revenue recognition model for all contracts with customers based on recognizing revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, eliminates industry specific requirements and expands disclosure requirements. We adopted ASU 2014-09 using the modified retrospective method as of January 1, 2018. The majority of our revenue transactions consist of a single performance obligation to transfer promised goods or services. The adoption of this new standard did not impact the Company's consolidated statement of income or balance sheet and there was no cumulative effect of initially applying the standard to the opening balance of retained earnings. See Note 3—Significant Accounting Policies Update for further information on our updated revenue recognition policy. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. This ASU was adopted on January 1, 2017. This ASU applies only to inventory measured using the first-in, first-out (FIFO) or average cost methods and requires inventory to be measured at the lower of cost and net realizable value (NRV). This ASU replaces market with NRV, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This eliminates the need to determine and consider replacement cost or NRV less an approximately normal profit margin when measuring inventory. The adoption of this ASU did not have a material effect on our condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases . This ASU requires lessees to record a right of use asset and a liability for virtually all leases. This ASU will be effective beginning January 1, 2019. The Company has developed a transition plan and continues to evaluate the impact that the adoption of this ASU will have on the consolidated financial statements. During 2017, we conducted a survey to identify all leases across the organization and are currently working to obtain all lease contracts to accumulate the necessary information for adoption. We have identified that a majority of our leases fall into one of three categories: office equipment, real estate and vehicles. We identified that most office equipment and vehicle leases utilize standard master leasing contracts that have similar terms. During the first six months of 2018, we selected a service provider to help us inventory and account for our leases and began gathering data necessary to prepare the transition accounting. Total assets and total liabilities will increase significantly in the period the ASU is adopted. At June 30, 2018 , the Company's undiscounted future minimum rent commitments under noncancellable operating leases were approximately $39.4 million . We are still evaluating whether we will elect the practical expedients allowed in the standard. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting . This ASU simplifies the accounting for many aspects associated with share-based payment accounting, including income taxes and the use of forfeiture rates. This ASU was adopted on January 1, 2017. The provisions of this ASU which impacted us included a requirement that all excess tax benefits and deficiencies that pertain to share-based payment arrangements be recognized as a component of income tax expense rather than as a component of shareholders’ equity. The Company expects this to create volatility in its effective tax rate on a go-forward basis as the impact is treated as a discrete item within our quarterly tax provision. The extent of excess tax benefits/deficiencies is subject to variation in our stock price and timing/extent of stock-based compensation share vestings and employee stock option exercises. This ASU also removes the impact of the excess tax benefits and deficiencies from the calculation of diluted earnings per share and no longer requires a presentation of excess tax benefits and deficiencies related to the vesting and exercise of share-based compensation as both an operating outflow and financing inflow on the statement of cash flows. We have applied all of these changes on a prospective basis and therefore, prior years were not adjusted. Additionally, this ASU allows for an accounting policy election to estimate the number of awards that are expected to vest or account for forfeitures when they occur. We elected to maintain our current forfeitures policy and will continue to include an estimate of those forfeitures when recognizing stock-based compensation expense. This ASU also requires cash payments to tax authorities when an employer uses a net-settlement feature to withhold shares to meet statutory tax withholding provisions to be presented as a financing activity (eliminating previous diversity in practice). Application of this ASU resulted in an additional discrete tax benefit of approximately $1.9 million and $6.8 million during the six months ended June 30, 2018 and 2017 , respectively. In June 2016, the FASB issued ASU 2016-13, Allowance for Loan and Lease Losses. This ASU introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments, including loans, held-to-maturity debt securities, loan commitments, financial guarantees and net investments in leases, as well as reinsurance and trade receivables. This ASU will be effective beginning in 2020. Based on a review of its portfolio of financial instruments, the Company does not believe the adoption of this ASU will have a material impact on the condensed consolidated financial statements, but does expect the adoption to result in additional disclosures. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Payments and Cash Receipts. This ASU clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The Company's adoption of this ASU on January 1, 2018 did not have a material impact on our presentation of the condensed consolidated statement of cash flows. In October 2016, the FASB issued ASU 2016-16, Intra-entity Transfers of Assets Other than Inventory . This ASU states that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This ASU was early adopted on January 1, 2017 using the modified retrospective approach which resulted in a $5.9 million cumulative-effect adjustment directly to retained earnings for any previously deferred income tax effects. In November 2016, the FASB issued ASU 2016-18, Restricted Cash . This ASU requires that amounts generally described as restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. We adopted this ASU on January 1, 2018 using the retrospective method. The adoption of ASU 2016-18 had an impact on our financial statement presentation within the condensed consolidated statement of cash flows, as amounts generally described as restricted cash and restricted cash equivalents are now included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows and transfers of these amounts between balance sheet line items are no longer presented as an operating, investing or financing cash flow. For the six months ended June 30, 2017 , cash flow used in financing activities increased by $0.4 million as a result of the adoption of this ASU. Furthermore, adoption of ASU 2016-18 resulted in additional disclosures. In January 2017, the FASB issued ASU 2017-01, Business Combinations - Clarifying the Definition of a Business . This ASU provides further guidance for identifying whether a set of assets and activities is a business by providing a screen outlining that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This ASU was adopted beginning in 2018 and was applied prospectively. The adoption of this ASU may have a material effect on our condensed consolidated financial statements in the event that we have an acquisition or disposal that falls within this screen. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment . This ASU simplifies the accounting for goodwill impairments under Step 2 by eliminating the requirement to perform procedures to determine the fair value of the assets and liabilities of the reporting unit, including previously unrecognized assets and liabilities, in order to determine the fair value of the goodwill and any impairment charge to be recognized. Under this ASU, the impairment charge to be recognized should be the amount by which the reporting unit's carrying value exceeds the reporting unit's fair value as calculated under Step 1 provided that the loss recognized should not exceed the total amount of goodwill allocated to the reporting unit. This ASU is effective beginning in 2019 and early adoption is permitted for interim or annual goodwill impairment tests performed after January 1, 2017. The adoption of this ASU may have a material effect on our condensed consolidated financial statements in the event that we determine that goodwill for any of our reporting units is impaired. In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost , to improve the presentation of net periodic pension and net periodic post-retirement benefit cost. This ASU requires companies to present the service cost component of net periodic benefit cost in the same income statement line item as other compensation costs arising from services rendered during the period. Only the service cost component will be eligible for capitalization in assets. Additionally, this ASU requires that companies present the other components of the net periodic benefit cost separately from the line item that includes the service cost and outside of any subtotal of income from operations, if one is presented. This ASU is effective for annual periods beginning after December 15, 2017, and early adoption is permitted. The amendments in this ASU are to be applied retrospectively for presentation in the condensed consolidated statement of income and prospectively for the capitalization of the service cost component of net periodic pension cost and net periodic post-retirement benefit in assets. A practical expedient allows the Company to use the amount disclosed in its pension and other post-retirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements. The Company adopted ASU 2017-07 on January 1, 2018, using the retrospective method and elected to use the practical expedient. The adoption of this ASU resulted in a $2.2 million and $1.6 million decrease in operating income for the six months ended June 30, 2018 and 2017 , respectively. The Company does not capitalize costs in assets so there is no impact from that provision of ASU 2017-07. In May 2017, the FASB issued ASU 2017-09, Stock Compensation - Scope of Modification Accounting , which amends the scope of modification accounting for share-based payment arrangements. This ASU provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. This ASU is effective for periods beginning after December 31, 2017. The Company's adoption of ASU on January 1, 2018, did not have a material effect on our condensed consolidated financial statements. In January 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which gives entities the option to reclassify to retained earnings the tax effects resulting from the new tax reform legislation commonly known as the Tax Cuts and Jobs Act ("the Act") related to items in AOCI that the FASB refers to as having been stranded in AOCI. The new guidance may be applied retrospectively to each period in which the effect of the Act is recognized in the period of adoption. The Company must adopt this guidance for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted for periods for which financial statements have not yet been issued or made available for issuance, including the period the Act was enacted. The guidance, when adopted, will require new disclosures regarding a company’s accounting policy for releasing the tax effects in AOCI and permit a company the option to reclassify to retained earnings the tax effects resulting from the Act that are stranded in AOCI. The Company has elected not to early adopt this ASU. Further, the Company is currently evaluating how to apply the new guidance and has not determined whether or not it will elect to reclassify stranded amounts, if any. As such, the Company is still evaluating the impact that the adoption of ASU 2018-02 will have on the condensed consolidated financial statements. |
Significant Accounting Policies
Significant Accounting Policies Update | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Update Revenue Recognition — We generate revenue primarily from manufacturing and selling a comprehensive line of safety products to protect the health and safety of workers and facility infrastructures around the world in the oil, gas and petrochemical, fire service, construction, utilities and mining industries. Our core safety products include fixed gas and flame detection instruments, breathing apparatus where SCBA is the principal product, portable gas detection instruments, industrial head protection products, firefighter helmets & protective apparel and fall protection devices. Our customers generally fall into two categories: distributors and industrial or military end-users. In our Americas segment, approximately 75% to 85% of our sales are made through distributors. In our International segment, approximately 55% to 65% of our sales are made through distributors. The underlying principles of revenue recognition are identical for both categories of customers and revenue is generally recognized at a point in time as described below. We account for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers , which we adopted on January 1, 2018, using the modified retrospective method. Revenue from the sale of products is recognized when there is persuasive evidence of an arrangement and control passes to the customer, which generally occurs either when product is shipped to the customer or, in the case of most U.S. distributor customers, when product is delivered to the distributor's delivery site. We establish our shipping terms according to local practice and market characteristics. We do not ship product unless we have an order or other documentation authorizing shipment to our customers. Our payment terms vary by the type and location of our customer and the products offered. The term between invoicing and when payment is due is not significant. Refer to Note 9—Segment Information for disaggregation of revenue by segment and product group, as we believe this best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Amounts billed and due from our customers are classified as receivables on the consolidated balance sheet. We make appropriate provisions for uncollectible accounts receivable which have historically been insignificant in relation to our net sales. Certain contracts with customers, primarily distributor customers, have an element of variable consideration that is estimated when revenue is recognized under the contract to the extent that it is material to the individual contract. Variable consideration includes volume incentive rebates, performance guarantees, price concessions and returns. Rebates are based on achieving a certain level of purchases and other performance criteria that are documented in established distributor programs. These rebates are estimated based on projected sales to the customer and accrued as a reduction of net sales as they are earned by the customer. The rebate accrual is reviewed monthly and adjustments are made as the estimate of projected sales changes. Product returns, including an adjustment for restocking fees if it is material, are estimated based on historical return experience and revenue is adjusted. Sales, value add and other taxes collected with revenue-producing activities and remitted to governmental authorities are excluded from revenue. Depending on the terms of the arrangement, we may defer revenue for which we have a future obligation, including training and extended warranty and technical services, until such time that the obligation has been satisfied. We use an observable price, or a cost plus margin approach when one is not available, to determine the stand-alone selling price for separate performance obligations. We have elected to recognize the cost for freight and shipping as an expense when control of the product has passed to the customer. These costs are included within the Cost of Products Sold line on the Condensed Consolidated Statement of Income. We typically receive interim milestone payments under certain contracts, including our fixed gas and flame detection projects, as work progresses. For some of these contracts, we may be entitled to receive an advance payment. Revenue for these contracts is generally recognized as control passes to the customer, which is a point in time upon shipment of the product, and if applicable, acceptance by the customer. We recognize a liability for these advance payments in excess of revenue recognized and present it as contract liabilities on the condensed consolidated balance sheet. The advance payment is typically not considered a significant financing component because it is used to meet working capital demands that can be higher in the early stages of a contract and to protect us from the other party failing to adequately complete some or all of its obligations under the contract. In some cases, the customer retains a small portion of the contract price, typically 10% , until completion of the contract, which we present as contract assets on the condensed consolidated balance sheet. Accordingly, during the period of contract performance, billings and costs are accumulated on the condensed consolidated balance sheet as contract assets or contract liabilities, but no income is recognized until completion of the project and control has passed to the customer. As of June 30, 2018 , there were no material contract assets or contract liabilities recorded on the Condensed Consolidated Balance Sheet. Practical Expedients and Exemptions We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. We do not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses in our Condensed Consolidated Statement of Income. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The following table sets forth the components of inventory: (In thousands) June 30, 2018 December 31, 2017 Finished products $ 79,059 $ 66,064 Work in process 7,542 10,141 Raw materials and supplies 130,509 117,388 Inventories at current cost 217,110 193,593 Less: LIFO valuation (39,854 ) (39,854 ) Total inventories $ 177,256 $ 153,739 |
Restructuring Charges
Restructuring Charges | 6 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Restructuring Charges During the three and six months ended June 30, 2018 , we recorded restructuring charges, net of adjustments, of $2.3 million and $7.6 million , respectively. Americas segment restructuring charges of $0.6 million during the six months ended June 30, 2018 , were related to severance costs for staff reductions in our Latin America Region. International segment restructuring charges of $3.5 million during the six months ended June 30, 2018 , were primarily related to severance costs for staff reductions associated with our ongoing initiatives to drive profitable growth in Europe. Corporate segment restructuring charges of $3.5 million during the six months ended June 30, 2018 , related primarily to our ongoing review of the Company's legal structure to evaluate potential realignments to better facilitate the execution of our corporate strategy. During the three and six months ended June 30, 2017 , we recorded restructuring charges, net of adjustments, of $1.0 million and $13.7 million , respectively. Americas segment restructuring charges of $12.4 million during the six months ended June 30, 2017 , related primarily to a non-cash special termination benefit expense of $11.4 million for a voluntary retirement incentive package ("VRIP") as well as severance from staff reductions in Brazil. All benefits for the VRIP were paid from our over funded North America pension plan. International segment restructuring charges of $1.6 million during the six months ended June 30, 2017 , were related to severance costs for staff reductions in Europe, Australia and Africa. Activity and reserve balances for restructuring charges by segment were as follows: (In millions) Americas International Corporate Total Reserve balances at December 31, 2016 $ 0.9 $ 2.8 $ 0.3 $ 4.0 Restructuring charges 13.0 4.9 — 17.9 Currency translation and other adjustments (0.2 ) (0.1 ) — (0.3 ) Cash payments / utilization (13.2 ) (4.0 ) (0.3 ) (17.5 ) Reserve balances at December 31, 2017 $ 0.5 $ 3.6 $ — $ 4.1 Restructuring charges 0.6 3.5 3.5 7.6 Currency translation and other adjustments (0.2 ) (0.3 ) — (0.5 ) Cash payments (0.6 ) (2.0 ) (3.5 ) (6.1 ) Reserve balances at June 30, 2018 $ 0.3 $ 4.8 $ — $ 5.1 |
Property, Plant and Equipment
Property, Plant and Equipment | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment The following table sets forth the components of property, plant and equipment: (In thousands) June 30, 2018 December 31, 2017 Land $ 3,244 $ 3,312 Buildings 119,238 119,970 Machinery and equipment 379,740 379,747 Construction in progress 11,675 12,036 Total 513,897 515,065 Less: accumulated depreciation (365,117 ) (358,051 ) Net property, plant and equipment $ 148,780 $ 157,014 |
Reclassifications Out of Accumu
Reclassifications Out of Accumulated Other Comprehensive Loss | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Reclassifications Out of Accumulated Other Comprehensive Loss | Reclassifications Out of Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss were as follows: MSA Safety Incorporated Noncontrolling Interests Three Months Ended June 30, Three Months Ended June 30, (In thousands) 2018 2017 2018 2017 Pension and other post-retirement benefits (a) Balance at beginning of period $ (95,619 ) $ (116,084 ) $ — $ — Amounts reclassified from Accumulated other comprehensive loss: Amortization of prior service cost (131 ) (109 ) — — Recognized net actuarial losses 3,804 3,201 — — Tax benefit (614 ) (935 ) — — Total amount reclassified from Accumulated other comprehensive loss, net of tax 3,059 2,157 — — Balance at end of period $ (92,560 ) $ (113,927 ) $ — $ — Foreign Currency Translation Balance at beginning of period $ (60,584 ) $ (100,808 ) $ 971 $ (2,590 ) Reclassification from accumulated other comprehensive loss into net income (774 ) — — — Foreign currency translation adjustments (27,607 ) 14,960 (273 ) (837 ) Balance at end of period $ (88,965 ) $ (85,848 ) $ 698 $ (3,427 ) (a) Reclassifications out of accumulated other comprehensive loss and into net income are included in the computation of net periodic pension and other post-retirement benefit costs (refer to Note 16—Pensions and Other Post-Retirement Benefits). MSA Safety Incorporated Noncontrolling Interests Six Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Pension and other post-retirement benefits (a) Balance at beginning of period $ (97,948 ) $ (118,068 ) $ — $ — Amounts reclassified from Accumulated other comprehensive loss: Amortization of prior service cost (213 ) (218 ) — — Recognized net actuarial losses 7,283 6,402 — — Tax benefit (1,682 ) (2,043 ) — — Total amount reclassified from Accumulated other comprehensive loss, net of tax 5,388 4,141 — — Balance at end of period $ (92,560 ) $ (113,927 ) $ — $ — Foreign Currency Translation Balance at beginning of period $ (73,814 ) $ (112,178 ) $ 801 $ (1,964 ) Reclassification from accumulated other comprehensive loss into net income (774 ) — — — Foreign currency translation adjustments (14,377 ) 26,330 (103 ) (1,463 ) Balance at end of period $ (88,965 ) $ (85,848 ) $ 698 $ (3,427 ) (a) Reclassifications out of accumulated other comprehensive loss and into net income are included in the computation of net periodic pension and other post-retirement benefit costs (refer to Note 16—Pensions and Other Post-Retirement Benefits). |
Capital Stock
Capital Stock | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Capital Stock | Capital Stock Preferred Stock - The Company has authorized 100,000 shares of $50 par value 4.5% cumulative preferred nonvoting stock which is callable at $52.50 . There are 71,340 shares issued and 52,878 shares held in treasury at June 30, 2018 . There were no treasury purchases of preferred stock during the six months ended June 30, 2018 or 2017 . The Company has also authorized 1,000,000 shares of $10 par value second cumulative preferred voting stock. No shares have been issued as of June 30, 2018 . Common Stock - The Company has authorized 180,000,000 shares of no par value common stock. There were 62,081,391 shares issued as of December 31, 2017 . No new shares have been issued in 2018. There were 38,420,340 and 38,222,928 shares outstanding at June 30, 2018 , and December 31, 2017 , respectively. Treasury Shares - On May 12, 2015, the Board of Directors adopted a stock repurchase program replacing the existing program. The program authorizes up to $100.0 million to repurchase MSA common stock in the open market and in private transactions. The share purchase program has no expiration date. The maximum number of shares that may be purchased is calculated based on the dollars remaining under the program and the respective month-end closing share price. No shares were repurchased during the six months ended June 30, 2018 or 2017 . We do not have any other share repurchase programs. There were 23,661,051 and 23,858,463 Treasury Shares at June 30, 2018 , and December 31, 2017 , respectively. The Company issues Treasury Shares for all share based benefit plans. Shares are issued from Treasury at the average Treasury Share cost on the date of the transaction. There were 241,732 and 514,704 Treasury Shares issued for these purposes during the six months ended June 30, 2018 and 2017 , respectively. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We are organized into seven geographic operating segments based on management responsibilities. The operating segments have been aggregated (based on economic similarities, the nature of their products, end-user markets and methods of distribution) into three reportable segments: Americas, International, and Corporate. The Americas segment is comprised of our operations in North America and Latin America geographies. The International segment is comprised of our operations of all geographies outside of the Americas. Certain global expenses are allocated to each segment in a manner consistent with where the benefits from the expenses are derived. The Company's sales are allocated to each country based primarily on the destination of the end-customer. Adjusted operating income (loss) and adjusted operating margin are the measures used by the chief operating decision maker to evaluate segment performance and allocate resources. Adjusted operating income (loss) is defined as operating income excluding restructuring charges, currency exchange gains/losses, other operating expense and strategic transaction costs. Adjusted operating margin is defined as adjusted operating income (loss) divided by segment sales to external customers. Adjusted operating income (loss) and adjusted operating margin are not recognized terms under U.S. GAAP and therefore do not purport to be alternatives to operating income or operating margin as a measure of operating performance. Further, the Company's measure of adjusted operating income (loss) and adjusted operating margin may not be comparable to similarly titled measures of other companies. Adjusted operating income (loss) on a consolidated basis is presented in the following table to reconcile the segment operating performance measure to operating income as presented on the Condensed Consolidated Statement of Income. The accounting principles applied at the operating segment level in determining operating income (loss) are generally the same as those applied at the consolidated financial statement level. Sales and transfers between operating segments are accounted for at market-based transaction prices and are eliminated in consolidation. Reportable segment information is presented in the following table: (In thousands) Americas International Corporate Reconciling 1 Consolidated Three Months Ended June 30, 2018 Sales to external customers $ 215,339 $ 123,992 $ — $ — $ 339,331 Intercompany sales 36,445 84,514 — (120,959 ) — Operating income 46,797 Restructuring charges (Note 5) 2,335 Currency exchange losses, net 815 Other operating expense (Note 19) 8,018 Strategic transaction costs (Note 15) 58 Adjusted operating income (loss) 49,838 15,853 (7,668 ) — 58,023 Adjusted operating margin % 23.1 % 12.8 % Six Months Ended June 30, 2018 Sales to external customers $ 424,468 $ 240,757 $ — $ — $ 665,225 Intercompany sales 70,643 166,893 (237,536 ) — Operating income 91,232 Restructuring charges (Note 5) 7,609 Currency exchange losses, net 2,823 Other operating expense (Note 19) 10,842 Strategic transaction costs (Note 15) 152 Adjusted operating income (loss) 99,924 28,631 (15,897 ) — 112,658 Adjusted operating margin % 23.5 % 11.9 % (In thousands) Americas International Corporate Reconciling 1 Consolidated Three Months Ended June 30, 2017 Sales to external customers $ 174,960 $ 113,815 $ — $ — $ 288,775 Intercompany sales 32,264 75,575 — (107,839 ) — Operating income 13,498 Restructuring charges (Note 5) 967 Currency exchange losses, net 2,851 Other operating expense (Note 19) 29,610 Strategic transaction costs (Note 15) 1,642 Adjusted operating income (loss) 43,573 12,122 (7,127 ) — 48,568 Adjusted operating margin % 24.9 % 10.7 % Six Months Ended June 30, 2017 Sales to external customers $ 341,528 $ 213,012 $ — $ — $ 554,540 Intercompany sales 62,453 145,771 — (208,224 ) — Operating income 32,117 Restructuring charges (Note 5) 13,706 Currency exchange losses, net 3,431 Other operating expense (Note 19) 29,610 Strategic transaction costs (Note 15) 2,979 Adjusted operating income (loss) 79,724 19,918 (17,799 ) — 81,843 Adjusted operating margin % 23.3 % 9.4 % 1 Reconciling items consist primarily of intercompany eliminations and items not directly attributable to reporting segments. Total sales by product group was as follows: Three Months Ended June 30, 2018 Americas International Consolidated (In thousands) Dollars Percent Dollars Percent Dollars Percent Breathing Apparatus $ 46,678 22% $ 28,605 23% $ 75,283 22% Fixed Gas & Flame Detection 33,128 15% 30,471 25% 63,599 19% Firefighter Helmets & Protective Apparel 37,779 18% 8,897 7% 46,676 14% Portable Gas Detection 27,137 13% 14,170 11% 41,307 12% Industrial Head Protection 31,151 14% 8,488 7% 39,639 12% Fall Protection 15,094 7% 10,958 9% 26,052 8% Other 24,372 11% 22,403 18% 46,775 13% Total $ 215,339 100% $ 123,992 100% $ 339,331 100% Six Months Ended June 30, 2018 Americas International Consolidated (In thousands) Dollars Percent Dollars Percent Dollars Percent Breathing Apparatus $ 96,012 23% $ 53,889 22% $ 149,901 23% Fixed Gas & Flame Detection 65,654 15% 58,876 24% 124,530 19% Firefighter Helmets & Protective Apparel 72,533 17% 18,626 8% 91,159 14% Portable Gas Detection 55,899 13% 27,635 11% 83,534 13% Industrial Head Protection 58,992 14% 15,602 6% 74,594 11% Fall Protection 29,203 7% 22,554 9% 51,757 8% Other 46,175 11% 43,575 20% 89,750 12% Total $ 424,468 100% $ 240,757 100% $ 665,225 100% Three Months Ended June 30, 2017 Americas International Consolidated (In thousands) Dollars Percent Dollars Percent Dollars Percent Breathing Apparatus $ 45,269 26% $ 25,124 22% $ 70,393 24% Fixed Gas & Flame Detection 30,660 18% 29,515 26% 60,175 21% Firefighter Helmets & Protective Apparel 5,676 3% 8,385 7% 14,061 5% Portable Gas Detection 24,669 14% 12,346 11% 37,015 13% Industrial Head Protection 28,205 16% 7,792 7% 35,997 12% Fall Protection 14,262 8% 11,250 10% 25,512 9% Other 26,219 15% 19,403 17% 45,622 16% Total $ 174,960 100% $ 113,815 100% $ 288,775 100% Six Months Ended June 30, 2017 Americas International Consolidated (In thousands) Dollars Percent Dollars Percent Dollars Percent Breathing Apparatus $ 93,959 28% $ 44,679 21% $ 138,638 25% Fixed Gas & Flame Detection 58,639 17% 52,317 25% 110,956 20% Firefighter Helmets & Protective Apparel 11,778 3% 16,688 8% 28,466 5% Portable Gas Detection 49,683 15% 23,838 11% 73,521 13% Industrial Head Protection 52,964 16% 13,909 7% 66,873 12% Fall Protection 25,490 7% 21,965 10% 47,455 9% Other 49,015 14% 39,616 18% 88,631 16% Total $ 341,528 100% $ 213,012 100% $ 554,540 100% |
Earnings per Share
Earnings per Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share Basic earnings per share attributable to MSA Safety Incorporated common shareholders is computed by dividing net income, after the deduction of preferred stock dividends and undistributed earnings allocated to participating securities, by the weighted average number of common shares outstanding during the period. Diluted earnings per share attributable to MSA Safety Incorporated common shareholders assumes the issuance of common stock for all potentially dilutive share equivalents outstanding not classified as participating securities. Participating securities are defined as unvested stock-based payment awards that contain nonforfeitable rights to dividends. Amounts attributable to MSA Safety Incorporated common shareholders: Three Months Ended June 30, Six Months Ended June 30, (In thousands, except per share amounts) 2018 2017 2018 2017 Net income $ 33,179 $ 12,532 $ 65,550 $ 26,945 Preferred stock dividends (10 ) (10 ) (20 ) (20 ) Net income available to common equity 33,169 12,522 65,530 26,925 Dividends and undistributed earnings allocated to participating securities (31 ) (10 ) (63 ) (26 ) Net income available to common shareholders 33,138 12,512 65,467 26,899 Basic weighted-average shares outstanding 38,327 38,065 38,272 37,914 Stock options and other stock compensation 576 715 569 771 Diluted weighted-average shares outstanding 38,903 38,780 38,841 38,685 Antidilutive stock options — — — — Earnings per share: Basic $ 0.86 $ 0.33 $ 1.71 $ 0.71 Diluted $ 0.85 $ 0.32 $ 1.69 $ 0.70 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Tax Cuts and Jobs Act of 2017 ("the Act"), which was signed into law on December 22, 2017, has resulted in significant changes to the U.S. corporate income tax system including reducing the U.S. corporate rate to 21% starting in 2018. The Act also creates a territorial tax system with a one-time mandatory tax on previously deferred foreign earnings of U.S. subsidiaries. On December 22, 2017, SAB 118 was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Act. In accordance with SAB 118, the Company calculated its best estimate of the impact of the Act and recorded income tax expense of $19.8 million during the fourth quarter of 2017, the period in which the legislation was enacted. Of this amount, $18.0 million related to the one-time transition tax and the remaining $1.8 million was related to the revaluation of U.S. deferred tax assets and liabilities. In addition, deferred taxes have been recorded on the outside basis differences of non-U.S. subsidiaries in the amount of $7.8 million , fully offset by foreign tax credits. We have made no adjustments to those amounts during the six months ended June 30, 2018 . Changes to applicable tax law, regulations or interpretations of the Act may require further adjustments and changes in our estimates. The final determination of the transition tax and the revaluation of U.S. deferred assets and liabilities will be completed as additional information becomes available, but no later than one year from the enactment of the Act. The Company's effective tax rate for the second quarter of 2018 was 22.8% and differs from the U.S. federal statutory rate of 21% primarily due to increased profitability in less favorable tax jurisdictions and higher foreign entity losses in jurisdictions where we cannot take tax benefits, partially offset by a tax benefit of approximately 2.2% related to certain share-based payments related to the application of ASU 2016-09. The Company's effective tax rate for the second quarter of 2017 was a benefit of 7.7% , which differs from the U.S. federal statutory rate of 35% primarily due to a significant tax benefit of approximately 34.4% related to certain share-based payments related to the application of ASU 2016-09 as well as increased profitability in more favorable tax jurisdictions and benefits associated with U.S. tax credits for research and development and the manufacturing deduction. The Company's effective tax rate for the six months ended June 30, 2018 , was 22.7% and differs from the U.S. federal statutory rate of 21% primarily due to increased profitability in less favorable tax jurisdictions and higher foreign entity losses in jurisdictions where we cannot take tax benefits, partially offset by a tax benefit of approximately 2.2% related to certain share-based payments related to the application of ASU 2016-09. The Company's effective tax rate for the six months ended June 30, 2017 , was 3.2% which differs from the U.S. federal statutory rate of 35% primarily due to a significant tax benefit of approximately 24.2% related to certain share-based payments related to the application of ASU 2016-09 as well as increased profitability in more favorable tax jurisdictions, reduced foreign entity losses in jurisdictions where we cannot take tax benefits and benefits associated with U.S. tax credits for research and development and the manufacturing deduction. At June 30, 2018 , the Company had a gross liability for unrecognized tax benefits of $14.6 million . The Company has recognized tax benefits associated with these liabilities of $5.2 million at June 30, 2018 . The gross liability includes amounts associated with prior period foreign tax exposure. The Company recognizes interest related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company's liability for accrued interest related to uncertain tax positions was $2.8 million at June 30, 2018 . |
Stock Plans
Stock Plans | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Plans | Stock Plans The 2016 Management Equity Incentive Plan provides for various forms of stock-based compensation for eligible key employees through May 2026. Management stock-based compensation includes stock options, restricted stock, restricted stock units and performance stock units. The 2017 Non-Employee Directors’ Equity Incentive Plan provides for grants of stock options and restricted stock to non-employee directors through May 2027. We issue treasury shares for stock option exercises, and grants of restricted stock and performance stock. Please refer to Note 8—Capital Stock for further information regarding stock compensation share issuance. Stock compensation expense is as follows: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Stock compensation expense $ 2,085 $ 1,908 $ 7,692 $ 8,233 Income tax benefit 507 721 1,869 3,107 Stock compensation expense, net of income tax benefit $ 1,578 $ 1,187 $ 5,823 $ 5,126 A summary of stock option activity for the six months ended June 30, 2018 , follows: Shares Weighted Average Exercise Price Outstanding at January 1, 2018 955,446 $ 42.75 Exercised (118,957 ) 36.09 Forfeited (3,358 ) 44.50 Outstanding at June 30, 2018 833,131 43.72 Exercisable at June 30, 2018 719,299 $ 43.59 Restricted stock and restricted stock units are valued at the market value of the stock on the grant date. A summary of restricted stock and unit activity for the six months ended June 30, 2018 , follows: Shares Weighted Average Grant Date Fair Value Unvested at January 1, 2018 227,161 $ 57.50 Granted 65,133 85.57 Vested (81,031 ) 58.32 Forfeited (3,555 ) 57.76 Unvested at June 30, 2018 207,708 $ 66.89 Performance stock units have a market condition modifier and are valued at an estimated fair value using the Monte Carlo model. The final number of shares to be issued for performance stock units granted in the first quarter of 2018 may range from 0% to 200% of the target award based on achieving the specified performance targets over the performance period. The following weighted average assumptions were used in the Monte Carlo model for units granted in the first quarter of 2018 with a market condition modifier. Fair value per unit $83.58 Risk-free interest rate 2.36% Expected dividend yield 1.82% Expected volatility 28.3% MSA stock beta 1.240 The risk-free interest rate is based on the U.S. Treasury Constant Maturity rates as of the grant date converted into an implied spot rate yield curve. Expected dividend yield is based on the most recent annualized dividend divided by the one year average closing share price. Expected volatility is based on the ten year historical volatility using daily stock prices. Expected life is based on historical stock option exercise data. A summary of performance stock unit activity for the six months ended June 30, 2018 , follows: Shares Weighted Average Grant Date Fair Value Unvested at January 1, 2018 242,186 $ 55.06 Granted 62,775 84.79 Performance adjustments (3,356 ) 44.61 Vested (41,660 ) 40.23 Forfeited (8,659 ) 44.53 Unvested at June 30, 2018 251,286 $ 65.45 The performance adjustments above relate to the final number of shares issued for the 2015 Management Performance Units, which were 93.6% of the target award based on Total Shareholder Return during the three year performance period, and vested in the first quarter of 2018 . |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt (In thousands) June 30, 2018 December 31, 2017 2006 Senior Notes payable through 2021, 5.41%, net of debt issuance costs $ 26,667 $ 26,667 2010 Senior Notes payable through 2021, 4.00%, net of debt issuance costs 80,000 80,000 2016 Senior Notes payable through 2031, 3.40%, net of debt issuance costs 72,464 74,139 Senior revolving credit facility maturing in 2020, net of debt issuance costs 251,248 293,693 Total 430,379 474,499 Amounts due within one year, net of debt issuance costs 26,667 26,667 Long-term debt, net of debt issuance costs $ 403,712 $ 447,832 Under the 2015 Amended and Restated Credit Agreement associated with our senior revolving credit facility, the Company may elect either a Base rate of interest (“BASE”) or an interest rate based on the London Interbank Offered Rate (“LIBOR”). The BASE is a daily fluctuating per annum rate equal to the highest of (i) the Prime Rate, (ii) the Federal Funds Open Rate plus one half of one percent ( 0.5% ) or (iii) the Daily Libor Rate plus one percent ( 1.00% ). The Company pays a credit spread of 0 to 175 basis points based on the Company’s net EBITDA leverage ratio and elected rate (BASE or LIBOR). The Company has a weighted average revolver interest rate of 3.31% as of June 30, 2018 . At June 30, 2018 , $316.7 million of the existing $575.0 million senior revolving credit facility was unused, including letters of credit. On January 22, 2016, the Company entered into a multi-currency note purchase and private shelf agreement, pursuant to which MSA issued notes in an aggregate original principal amount of £54.9 million (approximately $72.5 million at June 30, 2018 ). The notes are repayable in annual installments of £6.1 million (approximately $8.1 million at June 30, 2018 ), commencing January 22, 2023, with a final payment of any remaining amount outstanding on January 22, 2031. The interest rate on these notes is fixed at 3.4% . The note purchase agreement requires MSA to comply with specified financial covenants, including a requirement to maintain a minimum fixed charges coverage ratio of not less than 1.50 to 1.00 and a consolidated leverage ratio not to exceed 3.25 to 1.00 ; in each case calculated on the basis of the trailing four fiscal quarters. In addition, the note purchase agreement contains negative covenants limiting the ability of MSA and its subsidiaries to incur additional indebtedness or issue guarantees, create or incur liens, make loans and investments, make acquisitions, transfer or sell assets, enter into transactions with affiliated parties, make changes in its organizational documents that are materially adverse to lenders or modify the nature of MSA's or its subsidiaries' business. In July 2018, we provided notice of repayment to the holders of our 5.41% 2006 Senior Notes. We expect to repay the balance due by the end of August 2018 using borrowings on our senior revolving credit facility with an average interest rate of 3.31% . The revolving credit facilities and note purchase agreements require the Company to comply with specified financial covenants. In addition, the credit facilities and the note purchase agreements contain negative covenants limiting the ability of the Company and its subsidiaries to enter into specified transactions. The Company was in compliance with all covenants at June 30, 2018 . The Company had outstanding bank guarantees and standby letters of credit with banks as of June 30, 2018 , totaling $15.1 million , of which $6.2 million relate to the senior revolving credit facility. The letters of credit serve to cover customer requirements in connection with certain sales orders and insurance companies. The full amount of the letters of credit remains unused and available at of June 30, 2018 . The Company is also required to provide cash collateral in connection with certain arrangements. At June 30, 2018 , the Company has $3.2 million of restricted cash in support of these arrangements. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Changes in goodwill during the six months ended June 30, 2018 are as follows: (In thousands) Goodwill Balance at January 1, 2018 $ 422,185 Disposals (525 ) Currency translation (3,276 ) Balance at June 30, 2018 $ 418,384 At June 30, 2018 , the Company had goodwill of $273.3 million and $145.1 million related to the Americas and International reportable segments, respectively. Changes in intangible assets, net of accumulated amortization during the six months ended June 30, 2018 , are as follows: (In thousands) Intangible Assets Net balance at January 1, 2018 $ 183,088 Amortization expense (5,307 ) Currency translation (1,181 ) Net balance at June 30, 2018 $ 176,600 At June 30, 2018 , the Company had a trade name with an indefinite life totaling $60.0 million related to the acquisition of Globe Holding Company, LLC. Refer to Note 15—Acquisitions for additional information. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Acquisition of Globe Holding Company, LLC On July 31, 2017, we acquired 100% of the common stock in Globe Holding Company, LLC ("Globe") in an all-cash transaction valued at $215 million plus a working capital adjustment of $1.4 million . There is no contingent consideration. Based in Pittsfield, NH, Globe is a leading innovator and provider of firefighter protective clothing and boots. This acquisition aligns with our corporate strategy in that it strengthens our leading position in the North American fire service market. The transaction was funded through borrowings on our unsecured senior revolving credit facility. Globe operating results are included in our consolidated financial statements from the acquisition date as part of the Americas reportable segment. The acquisition qualifies as a business combination and will be accounted for using the acquisition method of accounting. We finalized the purchase price allocation as of June 30, 2018. The following table summarizes the fair values of the Globe assets acquired and liabilities assumed at the date of acquisition: (In millions) July 31, 2017 Current assets (including cash of $58 thousand) $ 28.6 Property, plant and equipment and other noncurrent assets 8.3 Trade name 60.0 Distributor relationships 40.2 Acquired technology and other intangible assets 10.5 Goodwill 74.5 Total assets acquired 222.1 Total liabilities assumed 5.7 Net assets acquired $ 216.4 Assets acquired and liabilities assumed in connection with the acquisition have been recorded at their fair values. Fair values were determined by management, based, in part on an independent valuation performed by a third party valuation specialist. The valuation methods used to determine the fair value of intangible assets included the relief from royalty method for trade name and technology related intangible assets; the excess earnings approach for distributor relationships using distributor inputs and contributory charges; and the cost method for assembled workforce which is included in goodwill. A number of significant assumptions and estimates were involved in the application of these valuation methods, including sales volumes and prices, royalty rates, costs to produce, tax rates, capital spending, discount rates, and working capital changes. Cash flow forecasts were generally based on Globe pre-acquisition forecasts coupled with estimated MSA sales synergies. Identifiable intangible assets with finite lives are subject to amortization over their estimated useful lives. The distributor relationships acquired in the Globe transaction will be amortized over a period of 20 years and the remaining identifiable assets will be amortized over 5 years . The trade name was determined to have an indefinite useful life. We will perform an impairment assessment annually on the trade name, or sooner if there is a triggering event. Additionally, as part of each impairment assessment, we will reassess whether the asset continues to have an indefinite life or whether it should be reassessed with a finite life. Estimated future amortization expense related to the identifiable intangible assets is approximately $2.1 million for the remainder of 2018, $4.1 million in each of the next three years 2019 through 2021 and $3.2 million in 2022. Estimated future depreciation expense related to Globe property, plant and equipment is approximately $0.5 million for the remainder of 2018 and $1.0 million in each of the next four years. Goodwill is calculated as the excess of the purchase price over the fair value of net assets acquired and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Among the factors that contributed to a purchase price in excess of the fair value of the net tangible and intangible assets acquired were the acquisition of an assembled workforce, the expected synergies and other benefits that we believe will result from combining the operations of Globe with our operations. Goodwill of $74.5 million related to the Globe acquisition has been recorded in the Americas reportable segment and is deductible for tax purposes. Our results for the six months ended June 30, 2018 , include strategic transaction costs of $0.2 million , including an insignificant amount of transaction and integration costs related to the acquisition of Globe Holding Company LLC. Our results for the six months ended June 30, 2017 , include strategic transaction costs of $3.0 million . These costs are reported in selling, general and administrative expenses. The operating results of the Globe acquisition have been included in our consolidated financial statements from the acquisition date through June 30, 2018 . Our results for the six months ended June 30, 2018 , include Globe sales and net income of $60.9 million and $7.4 million , respectively. The following unaudited pro forma information presents our combined results as if the Globe acquisition had occurred at the beginning of 2017. The unaudited pro forma financial information was prepared to give effect to events that are (1) directly attributable to the acquisition; (2) factually supportable; and (3) expected to have a continuing impact on the combined company’s results. There were no material transactions between MSA and Globe during the periods presented that are required to be eliminated. Intercompany transactions between Globe companies during the periods presented have been eliminated in the unaudited pro forma condensed combined financial information. The unaudited pro forma condensed combined financial information does not reflect any cost savings, operating synergies or revenue enhancements that the combined companies may achieve as a result of the acquisitions or the costs to integrate the operations or the costs necessary to achieve cost savings, operating synergies or revenue enhancements. Pro forma condensed combined financial information (Unaudited) (In millions, except per share amounts) Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 Net sales $ 317 $ 610 Net income $ 19 $ 39 Basic earnings per share $ 0.49 $ 1.03 Diluted earnings per share $ 0.48 $ 1.00 The unaudited pro forma condensed combined financial information is presented for information purposes only and is not intended to represent or be indicative of the combined results of operations or financial position that we would have reported had the acquisitions been completed as of the date and for the period presented, and should not be taken as representative of our consolidated results of operations or financial condition following the acquisitions. In addition, the unaudited proforma condensed combined financial information is not intended to project the future financial position or results of operations of the combined company. The unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting under existing U.S. GAAP. MSA has been treated as the acquirer. |
Pensions and Other Post-retirem
Pensions and Other Post-retirement Benefits | 6 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
Pensions and Other Post-retirement Benefits | Pensions and Other Post-retirement Benefits Components of net periodic benefit cost consisted of the following: Pension Benefits Other Benefits (In thousands) 2018 2017 2018 2017 Three Months Ended June 30, Service cost $ 2,891 $ 2,721 $ 83 $ 106 Interest cost 4,219 4,572 175 237 Expected return on plan assets (9,096 ) (8,738 ) — — Amortization of prior service cost (6 ) (4 ) (125 ) (105 ) Recognized net actuarial losses 3,453 3,184 351 17 Settlements 27 34 141 — Net periodic benefit cost (a) 1,488 1,769 625 255 Six Months Ended June 30, Service cost $ 5,782 $ 5,442 $ 184 $ 212 Interest cost 8,438 9,144 396 474 Expected return on plan assets (18,193 ) (17,476 ) — — Amortization of prior service cost (11 ) (8 ) (202 ) (210 ) Recognized net actuarial losses 6,907 6,368 376 34 Settlement/curtailment loss (credit) 53 68 — — Net periodic benefit cost, excluding below 2,976 3,538 754 510 Special termination charge — 11,384 (b) — — Net periodic benefit cost (a) 2,976 14,922 754 510 (a) Components of net periodic benefit cost other than service cost are included in the line item "Other income, net" in the income statement. (b) Represents the charge for special termination benefits related to the VRIP which were paid from our over funded North America pension plan and recorded as restructuring charges on the Condensed Consolidated Statement of Income. See further details in Note 5—Restructuring Charges. Effective December 31, 2017, the Company changed the method it uses to estimate the service and interest cost components of net periodic benefit cost for pension and other post-retirement benefits for a majority of its U.S. and foreign plans. Historically, the service and interest cost components for these plans were estimated using a single weighted-average discount rate derived from the yield curve used to measure the projected benefit obligation at the beginning of the period. The Company has elected to utilize a spot rate approach, which discounts the individual plan specific expected cash flows underlying the service and interest cost using the applicable spot rates derived from a yield curve used in the determination of the benefit obligation to the relevant projected cash flows. The Company made this change to improve the correlation between projected benefit cash flows and the corresponding yield curve spot rates and to provide a more precise measurement of service and interest costs. This change does not affect the measurement of total benefit obligations. We estimate that service and interest cost for the pension and OPEB plans will be reduced by approximately $1.8 million in 2018 as a result of this change. The Company has accounted for this change to the spot rate approach as a change in accounting estimate that is inseparable from a change in accounting principle, pursuant to Accounting Standards Codification (ASC) 250, Accounting Changes and Error Corrections , and accordingly has accounted for it prospectively. For plans where the discount rate is not derived from plan specific expected cash flows, the Company will continue to employ the current approaches for measuring both the projected benefit obligations and the service and interest cost components of net periodic benefit cost for pension and other post-retirement benefits. We made contributions of $2.5 million and $3.0 million to our pension plans during the six months ended June 30, 2018 and 2017 , respectively. We expect to make total contributions of approximately $5.0 million to our pension plans in 2018 which are primarily associated with our International segment. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments As part of our currency exchange rate risk management strategy, we may enter into certain derivative foreign currency forward contracts that do not meet the U.S. GAAP criteria for hedge accounting, but which have the impact of partially offsetting certain foreign currency exposures. We account for these forward contracts at fair value and report the related gains or losses in currency exchange losses (gains) in the Condensed Consolidated Statement of Income. The notional amount of open forward contracts was $71.0 million and $124.7 million at June 30, 2018 , and December 31, 2017 , respectively. The following table presents the Condensed Consolidated Balance Sheet location and fair value of assets and liabilities associated with derivative financial instruments: (In thousands) June 30, 2018 December 31, 2017 Derivatives not designated as hedging instruments: Foreign exchange contracts: other current liabilities $ 25 $ 314 Foreign exchange contracts: other current assets 106 840 The following table presents the Condensed Consolidated Statement of Income location and impact of derivative financial instruments: Loss (Gain) Recognized in Income Six Months Ended June 30, (In thousands) Statement of Income Location 2018 2017 Derivatives not designated as hedging instruments: Foreign exchange contracts Currency exchange losses (gains), net $ 587 $ (5,014 ) |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are: • Level 1—Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets. • Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. • Level 3—Unobservable inputs for the asset or liability. The valuation methodologies we used to measure financial assets and liabilities were limited to the derivative financial instruments described in Note 17—Derivative Financial Instruments. We estimate the fair value of the derivative financial instruments, consisting of foreign currency forward contracts, based upon valuation models with inputs that generally can be verified by observable market conditions and do not involve significant management judgment. Accordingly, the fair values of the derivative financial instruments are classified within Level 2 of the fair value hierarchy. With the exception of fixed rate long-term debt, we believe that the reported carrying amounts of our financial assets and liabilities approximate their fair values. The reported carrying amount of our fixed rate long-term debt (including the current portion) was $180.8 million at both June 30, 2018 , and December 31, 2017 . The fair value of this debt was $191.0 million and $200.0 million at June 30, 2018 , and December 31, 2017 , respectively. The fair value of this debt was determined using Level 2 inputs by evaluating similarly rated companies with publicly traded bonds where available or current borrowing rates available for financings with similar terms and maturities. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Product liability We face an inherent business risk of exposure to product liability claims arising from the alleged failure of our products to prevent the types of personal injury or death against which they are designed to protect. Product liability claims are categorized as either single incident or cumulative trauma. Single incident product liability claims. Single incident product liability claims involve incidents of short duration that are typically known when they occur and involve observable injuries, which provide an objective basis for quantifying damages. MSA LLC estimates its liability for single incident product liability claims based on expected settlement costs for asserted single incident product liability claims, and an estimate of costs for single incident product liability claims incurred but not reported ("IBNR"). The estimate for IBNR claims is based on experience, sales volumes, and other relevant information. The reserve for single incident product liability claims, which includes asserted single incident product liability claims and IBNR single incident product liability claims, was $4.7 million at June 30, 2018 , and $5.4 million at December 31, 2017 . Single incident product liability expense was $0.9 million during the six months ended June 30, 2018 and $0.2 million during the six months ended June 30, 2017 . Single incident product liability exposures are evaluated on an annual basis, or more frequently if changing circumstances warrant. Adjustments are made to the reserve as appropriate. Cumulative trauma product liability claims. Cumulative trauma product liability claims involve exposures to harmful substances (e.g., silica, asbestos and coal dust) that occurred years ago and may have developed over long periods of time into diseases such as silicosis, asbestosis, mesothelioma, or coal worker’s pneumoconiosis. MSA LLC was named as a defendant in 1,470 lawsuits comprised of 2,345 claims as of June 30, 2018 . These lawsuits mainly involve respiratory protection products allegedly manufactured and sold by MSA LLC or its predecessors. The products at issue were manufactured many years ago and are not currently offered by MSA LLC. A summary of cumulative trauma product liability lawsuits and asserted cumulative trauma product liability claims activity follows: Six Months Ended June 30, 2018 Year Ended December 31, 2017 Open lawsuits, beginning of period 1,420 1,794 New lawsuits 189 398 Settled and dismissed lawsuits (139 ) (772 ) Open lawsuits, end of period 1,470 1,420 Six Months Ended June 30, 2018 Year Ended December 31, 2017 Asserted claims, beginning of period 2,242 3,023 New claims 258 455 Settled and dismissed claims (155 ) (1,236 ) Asserted claims, end of period 2,345 2,242 More than half of the open lawsuits at June 30, 2018 , have had a de minimis level of activity over the last 5 years. It is possible that these cases could become active again at any time due to changes in circumstances. Cumulative trauma product liability litigation is inherently unpredictable and MSA LLC's expense with respect to cumulative trauma product liability claims could vary significantly in future periods. Factors that have historically limited MSA LLC's ability to estimate potential liability for cumulative trauma product liability claims include low volumes in the number of claims asserted and resolved (both in general and with respect to particular plaintiffs’ counsel as claims experience can vary significantly among different counsel), inconsistency of claims composition, uncertainty as to if and over what time periods claims might be asserted in the future, or other factors. With respect to the risk associated with any particular case that is filed against MSA LLC, it has typically not been until very late in the legal process that it can be reasonably determined whether it is probable that such a case will ultimately result in a liability. This uncertainty is caused by many factors, including consideration of the applicable statute of limitations, the sufficiency of product identification and other defenses. The complaints initially filed generally have not provided information sufficient to determine if a lawsuit will develop into an actively litigated case. Even when a case is actively litigated, it is often difficult to determine if the lawsuit will be dismissed or otherwise resolved until late in the lawsuit. Moreover, even if it is probable that such a lawsuit will result in a loss, it is often difficult to estimate the amount of actual loss that will be incurred. These actual loss amounts are highly variable and turn on a case-by-case analysis of the relevant facts, including the nature of the injury, the jurisdiction in which the claim is filed, the counsel for the plaintiff and the number of parties in the lawsuit. In addition, there are uncertainties concerning the impact of bankruptcies of other companies that are co-defendants with respect to particular claims and uncertainties surrounding the litigation process in different jurisdictions and from case to case within a particular jurisdiction. Management works with outside legal counsel quarterly to review and assess MSA LLC's exposure to asserted cumulative trauma product liability claims not yet resolved. In addition management works with an outside valuation consultant and outside legal counsel to review MSA LLC's exposure to IBNR cumulative trauma product liability claims. The review process for asserted cumulative trauma product liability claims not yet resolved takes into account available facts for those claims, including their number and composition, outcomes of matters resolved during current and prior periods, and variances associated with different groups of claims, plaintiffs' counsel, claims filing trends, and venues, as well as any other relevant information. In August 2017, MSA LLC obtained additional detailed information about a significant number of claims that were then pending against it, including the nature and extent of the alleged injuries, product identification and other factors. MSA LLC subsequently agreed to resolve a substantial number of these claims for $75.2 million , a portion of which was insured. Amounts in excess of estimated insurance recoveries were reflected within Other operating expense in the Consolidated Statement of Income. MSA LLC paid a total of $25.2 million during 2017 and $14.3 million during the six months ended June 30, 2018 , related to these settlements. MSA LLC expects to pay $7.1 million ratably over the next five quarters ending in the third quarter of 2019. As a result of these developments, the cumulative trauma product liability reserve covers all cumulative trauma product liability claims that have been asserted against MSA LLC, both those that have been settled but not yet paid and an estimated amount for asserted cumulated trauma product liability claims not yet resolved. In the fourth quarter of 2017 , MSA LLC, in consultation with an outside valuation consultant and outside legal counsel, performed a review for IBNR cumulative trauma product liability claims. Based on that review process, which concluded in early 2018, it was determined that a reasonable estimate for the liability of MSA LLC's IBNR claims was $111.1 million . Accordingly, the cumulative trauma product liability reserve was increased by $111.1 million at December 31, 2017, for estimated IBNR cumulative trauma product liability claims and the balance is $107.8 million at June 30, 2018 . This estimated amount is not discounted to present value. This amount represents estimated liability relating to asbestos, silica and coal dust claims projected to be asserted through 2060. The ability to make a reasonable estimate of the potential liability for IBNR cumulative trauma product liability claims reflects recent developments affecting asbestos claims, recent developments affecting silica claims, and recent developments affecting coal dust claims. Significant changes in MSA LLC’s claims experience over the last few years have resulted in stabilization of a number of factors important to the estimation process and enabled greater predictability of IBNR claims. These developments occurred as a result of changes in defense strategy implemented in recent years, increased experience in defending, negotiating, and resolving key groups of claims, and resolutions of a substantial number of cumulative trauma product liability claims in the last few years. These changes have collectively resulted in MSA LLC having a more stable recent claims history that could be extrapolated into the future and greater certainty as to the number of claims that might be asserted against MSA LLC in the future, the percentage of those claims that might be resolved without payment, and the potential settlement value of those claims that are not resolved without payment. All of these factors were considered by MSA LLC’s valuation consultant in estimating the IBNR cumulative trauma product liability claims. MSA LLC, taking into account the analysis and estimates developed by its consultant, concluded in the fourth quarter of 2017 that reasonable estimates for its IBNR asbestos, silica and coal dust claims could be made and that the liability described above should be accrued. Notwithstanding these developments, there remains considerable uncertainty in numerous aspects of MSA LLC's potential future claims experience, such as with respect to the number of claims that might be asserted, the alleged severity of those claims and the average settlement values of those claims, and that uncertainty may cause actual claims experience in the future to vary from the current estimate. Numerous uncertainties also exist with respect to factors not specific to MSA LLC’s claims experience, including potential legislative or judicial changes at the federal level or in key states concerning claims adjudication, future bankruptcy proceedings involving key co-defendants, payments from trusts established to compensate claimants, and/or changes in medical science relating to the diagnosis and treatment of cumulative trauma product liability claims. If future estimates of asserted cumulative trauma product liability claims not yet resolved and/or IBNR cumulative trauma product liability claims are materially higher (lower) than the accrued liability, we will record an appropriate charge (credit) to the Consolidated Statement of Income to increase (decrease) the accrued liability. Certain significant assumptions underlying the material components of the accrual for IBNR cumulative trauma product liability claims include MSA LLC's experience related to the following: • The types of illnesses alleged by claimants to give rise to their claims; • The number of claims asserted against MSA LLC; • The propensity of claimants and their counsel asserting cumulative trauma claims to name MSA LLC as a defendant; • The percentage of cumulative trauma product liability claims asserted against MSA LLC that are dismissed without payment; and • The average value of settlements paid to claimants. Additional assumptions include the following: • MSA LLC will continue to evaluate and handle cumulative trauma claims in accordance with its existing defense strategy; • The number and effect of co-defendant bankruptcies will not materially change in the future; • No material changes in medical science occur with respect to cumulative trauma product liability claims; and • No material changes in law occur with respect to cumulative trauma product liability claims including, in particular, no material state or federal tort reform actions affecting such claims. The total cumulative trauma product liability reserve was $162.3 million at June 30, 2018 , of which $54.5 million related to asserted cumulative trauma product liability claims ( $39.0 million for claims settled and related defense costs not yet paid and $15.5 million for the estimated value of claims asserted but not yet resolved) and $107.8 million related to estimated IBNR cumulative trauma product liability claims. The total cumulative trauma product liability reserve was $181.1 million at December 31, 2017 , of which $70.0 million related to asserted cumulative trauma product liability claims ( $54.5 million for claims settled but not yet paid and $15.5 million for the estimated value of claims asserted but not yet resolved) and $111.1 million related to estimated IBNR cumulative trauma product liability claims. The majority of the reserve relating to claims settled but not yet paid for both periods relates to the August 2017 settlement of certain coal dust claims described above. The amount included in the reserve for IBNR cumulative trauma product liability claims represents the estimated value of such claims if the most likely potential outcome with respect to each of the assumptions described above is applied. The reserve does not include amounts which will be spent to defend the claims covered by the reserve. Defense costs are recognized in the Condensed Consolidated Statement of Income as incurred. At June 30, 2018 , $47.4 million of the cumulative trauma product liability reserve for asserted cumulative trauma product liability claims is recorded in the Insurance and product liability line within other current liabilities in the Condensed Consolidated Balance Sheet and the remainder, $7.1 million , is recorded in the Other noncurrent liabilities line. At December 31, 2017 , $48.6 million of the reserve for asserted cumulative trauma product liability claims is recorded in the Insurance and product liability line within other current liabilities in the Condensed Consolidated Balance Sheet and the remainder, $21.4 million , is recorded in the Other noncurrent liabilities line. All of the reserve for IBNR claims as of both June 30, 2018 , and December 31, 2017 , is recorded in the Other noncurrent liabilities line. Because litigation is subject to inherent uncertainties, and unfavorable rulings or developments could occur, there can be no certainty that MSA LLC may not ultimately incur charges in excess of presently recorded liabilities. The reserve for liabilities relating to cumulative trauma product liability claims may be adjusted from time to time based on whether the actual number, types, and settlement value of claims differs from current projections and estimates and other developing facts and circumstances. These adjustments may reflect changes in estimates for asserted cumulative trauma product liability claims not yet resolved and/or IBNR cumulative trauma product liability claims. These adjustments may be material and could materially impact our consolidated financial statements in future periods. Insurance Receivable and Notes Receivable, Insurance Companies MSA LLC purchased insurance policies for the policy years from 1952-1986 from over 20 different insurance carriers that, subject to some common contract exclusions, provide coverage for cumulative trauma product liability losses and, in many instances, related defense costs (the "Occurrence-Based Policies"). MSA LLC’s insurance policies have significant per claim retentions and applicable exclusions for claims after April 1986. In the normal course of business, MSA LLC makes payments to settle product liability claims and for related defense costs and records receivables for the estimated amounts that are covered by insurance. Since MSA LLC is now largely self-insured for cumulative trauma claims, additional amounts recorded as insurance receivables will be limited and based on calculating the amounts to be reimbursed pursuant to negotiated Coverage-in-Place Agreements (as defined below). Various factors could affect the timing and amount of recovery of the insurance receivable, including assumptions regarding claims composition (which are relevant to calculating reimbursement under the terms of certain Coverage-In-Place Arrangements) and the extent to which the issuing insurers may become insolvent in the future. Insurance receivables at June 30, 2018 , totaled $125.7 million , of which, $10.6 million is reported in Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheet and $115.1 million is reported in Insurance receivable and other noncurrent assets. Insurance receivables at December 31, 2017 , totaled $134.7 million , of which $11.6 million was reported in Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheet and $123.1 million was reported in Insurance receivable and other noncurrent assets. A summary of Insurance receivable balances and activity related to cumulative trauma product liability losses follows: (In millions) Six Months Ended June 30, 2018 Year Ended December 31, 2017 Balance beginning of period $ 134.7 $ 159.9 Additions 1.0 94.6 Collections, settlements converted to notes receivable and other adjustments (10.0 ) (119.8 ) Balance end of period $ 125.7 $ 134.7 Additions to insurance receivables in the above table represent insured cumulative trauma product liability losses and related defense costs which we believe are covered by the Occurrence-Based Policies or applicable Coverage-in-Place Agreements. Collections of the receivable primarily occur upon settlement of the coverage litigation, per the terms of the negotiated agreements with the insurance companies, either in a lump sum, in installments over time, or to reimburse a portion of future expense once incurred (i.e. pursuant to a Coverage-in-Place Agreement). Collections and settlements primarily represent agreements with insurance companies to pay amounts due that are applicable to cumulative trauma claims. When there are contingencies embedded in these agreements, we apply payments to the undiscounted receivable in the period when the contingency is met. In some cases, payment streams due pursuant to negotiated settlement agreements are converted to formal notes receivable from insurance companies. The notes receivable are recorded as a transfer from the Insurance receivable balance to the Notes receivable, insurance companies (current and noncurrent) in the Condensed Consolidated Balance Sheet. In cases where the payment stream covers multiple years and there are no contingencies, the present value of the payments is recorded as a transfer from the insurance receivable balance to the Notes receivable, insurance companies (current and long-term) in the Condensed Consolidated Balance Sheet. Provided the remaining insurance receivable is recoverable through the insurance carriers, no gain or loss is recognized at the time of transfer from Insurance receivable to Notes receivable, insurance companies. Notes receivable from insurance companies at June 30, 2018 , totaled $63.8 million , of which $3.5 million is reported in Notes receivable, insurance companies, current on the Condensed Consolidated Balance Sheet and $60.3 million is reported in Notes receivable, insurance companies, noncurrent. Notes receivable from insurance companies at December 31, 2017 , totaled $76.9 million , of which $17.3 million was reported in Notes receivable, insurance companies, current on the Condensed Consolidated Balance Sheet and $59.6 million was reported in Notes receivable, insurance companies, noncurrent. A summary of Notes receivable, insurance companies balances is as follows: (In millions) Six Months Ended June 30, 2018 Year Ended December 31, 2017 Balance beginning of period $ 76.9 $ 67.3 Additions 0.8 35.1 Collections (13.9 ) (25.5 ) Balance end of period $ 63.8 $ 76.9 The collectibility of MSA LLC's insurance receivables and notes receivable is regularly evaluated and we believe that the amounts recorded are probable of collection. The determination that the recorded insurance receivables are probable of collection is based on analysis of the terms of the underlying insurance policies, experience in successfully recovering cumulative trauma product liability claims from MSA LLC's insurers under other policies during coverage litigation, the financial ability of the insurance carriers to pay the claims, understanding and interpretation of the relevant facts and applicable law and the advice of MSA LLC's outside legal counsel. We believe that successful resolution of insurance litigation with substantially all of our insurance carriers over the years, most recently in July 2018 with North River, as well as the October 2016 trial verdict, which resulted in a favorable outcome, demonstrate that MSA LLC has strong legal positions concerning its rights to coverage. The trial verdict is described below. Approximately $51.0 million of the $125.7 million insurance receivable balance at June 30, 2018 , is attributable to coverage in place agreements or negotiated installment payments. Total cumulative trauma liability losses were $11.8 million for the six months ended June 30, 2018 , primarily related to the defense of cumulative trauma product liability claims. Total cumulative trauma liability losses were $97.6 million for the six months ended June 30, 2017 , primarily related to the defense and settlement of cumulative trauma product liability claims. Uninsured cumulative trauma product liability losses, which were included in Other operating expense on the Condensed Consolidated Statement of Income, were $10.8 million for the six months ended June 30, 2018 and $29.6 million for the six months ended June 30, 2017 . Insurance Litigation For more than a decade, MSA LLC has been involved in coverage litigation with many of its insurance carriers that issued Occurrence-Based Policies. MSA LLC has reached resolution with the majority of its insurance carriers through negotiated settlements regarding these policies. North River In 2009, MSA LLC (as Mine Safety Appliances Company) sued North River in the United States District Court for the Western District of Pennsylvania, alleging that North River breached one of its insurance policies by failing to pay amounts owed to MSA LLC and that it engaged in bad-faith claims handling. In 2010, North River sued MSA LLC (as Mine Safety Appliances Company) in the Court of Common Pleas of Allegheny County, Pennsylvania seeking a declaratory judgment concerning their responsibilities under three additional policies. MSA LLC asserted claims against North River for breaches of contract for failures to pay amounts owed to MSA LLC. MSA LLC also alleged that North River engaged in bad-faith claims handling. In the fourth quarter of 2016, a Pennsylvania state court jury found that North River breached the three insurance policies at issue in the case. As a result of the jury's findings, the court entered a verdict in favor of MSA LLC and against North River for $10.9 million , the full amount of the contractual damages at issue in the case. In December 2016 and January 2017, the Pennsylvania state court heard evidence regarding the statutory bad faith claim. In the first and second quarters of 2017, the Court of Common Pleas of Allegheny County awarded MSA LLC an additional $48.9 million in damages related to this statutory bad faith claim. In the first quarter of 2017, MSA LLC received payments of approximately $80.9 million (the "Payment") pursuant to insurance policies issued by North River. The Payment reflects amounts previously invoiced to North River for reimbursement on cumulative trauma product liability claims and therefore was recorded as a reduction to the insurance receivable. In July 2018, MSA LLC resolved through a negotiated settlement its remaining coverage litigation with North River. As part of this settlement, MSA LLC dismissed all claims and appeals against North River in each of the pending coverage actions. This represents a settlement with MSA LLC’s last major Occurrence-Based insurance carrier. We anticipate payment under the settlement to be received in the third quarter of 2018. The payment is expected to be accounted for as a reduction of the insurance receivable balance and will satisfy the portion of the insurance receivable balance that has been subject to litigation. The settlement is not expected to have an impact on our operating results. Delaware Matter In July 2010, MSA LLC (as Mine Safety Appliances Company) filed a lawsuit in the Superior Court of the State of Delaware seeking declaratory and other relief concerning the future rights and obligations of MSA LLC and its excess insurance carriers under various insurance policies. Since 2010, from time to time, MSA LLC has resolved its disputes with the vast majority of the carriers once named in this action, including the recent July 2018 settlement with North River mentioned above. The case is on appeal with two remaining defendant insurance carriers. In February 2017, MSA LLC resolved through a negotiated settlement its coverage litigation with The Hartford ("Hartford"). Additionally, in April 2017, MSA LLC resolved through negotiated settlements its coverage litigation with Travelers Insurance Company ("Travelers") and Wausau Indemnity Company ("Wausau"). Each of the settling carriers agreed to cash payments which were made in 2017 or January 2018. In addition, Travelers has agreed to pay a percentage of future cumulative trauma product liability settlements paid as incurred on a claim-by-claim basis. As part of these settlements, MSA LLC dismissed all claims against Hartford, Travelers and Wausau in the coverage litigation in the Superior Court of the State of Delaware. Product Warranty The Company provides warranties on certain product sales. Product warranty reserves are established in the same period that revenue from the sale of the related products is recognized, or in the period that a specific issue arises as to the functionality of a Company's product. The determination of such reserves requires the Company to make estimates of product return rates and expected costs to repair or to replace the products under warranty. The amounts of the reserves are based on established terms and the Company's best estimate of the amounts necessary to settle future and existing claims on products sold as of the balance sheet date. If actual return rates and/or repair and replacement costs differ significantly from estimates, adjustments to recognize additional cost of sales may be required in future periods. The following table reconciles the changes in the Company's accrued warranty reserve: (In thousands) Six Months Ended June 30, 2018 Year Ended December 31, 2017 Beginning warranty reserve $ 14,753 $ 11,821 Warranty payments (315 ) (550 ) Warranty claims 1,217 2,116 Provision for product warranties (392 ) 1,366 Ending warranty reserve $ 15,263 $ 14,753 Warranty expense for the six months ended June 30, 2018 and 2017 , was $5.5 million and $3.6 million , respectively. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | The following table sets forth the components of inventory: (In thousands) June 30, 2018 December 31, 2017 Finished products $ 79,059 $ 66,064 Work in process 7,542 10,141 Raw materials and supplies 130,509 117,388 Inventories at current cost 217,110 193,593 Less: LIFO valuation (39,854 ) (39,854 ) Total inventories $ 177,256 $ 153,739 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Activity and Reserve Balance for Restructuring Charges by Segment | tivity and reserve balances for restructuring charges by segment were as follows: (In millions) Americas International Corporate Total Reserve balances at December 31, 2016 $ 0.9 $ 2.8 $ 0.3 $ 4.0 Restructuring charges 13.0 4.9 — 17.9 Currency translation and other adjustments (0.2 ) (0.1 ) — (0.3 ) Cash payments / utilization (13.2 ) (4.0 ) (0.3 ) (17.5 ) Reserve balances at December 31, 2017 $ 0.5 $ 3.6 $ — $ 4.1 Restructuring charges 0.6 3.5 3.5 7.6 Currency translation and other adjustments (0.2 ) (0.3 ) — (0.5 ) Cash payments (0.6 ) (2.0 ) (3.5 ) (6.1 ) Reserve balances at June 30, 2018 $ 0.3 $ 4.8 $ — $ 5.1 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Components of Property, Plant and Equipment | The following table sets forth the components of property, plant and equipment: (In thousands) June 30, 2018 December 31, 2017 Land $ 3,244 $ 3,312 Buildings 119,238 119,970 Machinery and equipment 379,740 379,747 Construction in progress 11,675 12,036 Total 513,897 515,065 Less: accumulated depreciation (365,117 ) (358,051 ) Net property, plant and equipment $ 148,780 $ 157,014 |
Reclassifications Out of Accu31
Reclassifications Out of Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Reclassification Out of Accumulated Other Comprehensive Loss | hanges in accumulated other comprehensive loss were as follows: MSA Safety Incorporated Noncontrolling Interests Three Months Ended June 30, Three Months Ended June 30, (In thousands) 2018 2017 2018 2017 Pension and other post-retirement benefits (a) Balance at beginning of period $ (95,619 ) $ (116,084 ) $ — $ — Amounts reclassified from Accumulated other comprehensive loss: Amortization of prior service cost (131 ) (109 ) — — Recognized net actuarial losses 3,804 3,201 — — Tax benefit (614 ) (935 ) — — Total amount reclassified from Accumulated other comprehensive loss, net of tax 3,059 2,157 — — Balance at end of period $ (92,560 ) $ (113,927 ) $ — $ — Foreign Currency Translation Balance at beginning of period $ (60,584 ) $ (100,808 ) $ 971 $ (2,590 ) Reclassification from accumulated other comprehensive loss into net income (774 ) — — — Foreign currency translation adjustments (27,607 ) 14,960 (273 ) (837 ) Balance at end of period $ (88,965 ) $ (85,848 ) $ 698 $ (3,427 ) |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Segment Information | Reportable segment information is presented in the following table: (In thousands) Americas International Corporate Reconciling 1 Consolidated Three Months Ended June 30, 2018 Sales to external customers $ 215,339 $ 123,992 $ — $ — $ 339,331 Intercompany sales 36,445 84,514 — (120,959 ) — Operating income 46,797 Restructuring charges (Note 5) 2,335 Currency exchange losses, net 815 Other operating expense (Note 19) 8,018 Strategic transaction costs (Note 15) 58 Adjusted operating income (loss) 49,838 15,853 (7,668 ) — 58,023 Adjusted operating margin % 23.1 % 12.8 % Six Months Ended June 30, 2018 Sales to external customers $ 424,468 $ 240,757 $ — $ — $ 665,225 Intercompany sales 70,643 166,893 (237,536 ) — Operating income 91,232 Restructuring charges (Note 5) 7,609 Currency exchange losses, net 2,823 Other operating expense (Note 19) 10,842 Strategic transaction costs (Note 15) 152 Adjusted operating income (loss) 99,924 28,631 (15,897 ) — 112,658 Adjusted operating margin % 23.5 % 11.9 % (In thousands) Americas International Corporate Reconciling 1 Consolidated Three Months Ended June 30, 2017 Sales to external customers $ 174,960 $ 113,815 $ — $ — $ 288,775 Intercompany sales 32,264 75,575 — (107,839 ) — Operating income 13,498 Restructuring charges (Note 5) 967 Currency exchange losses, net 2,851 Other operating expense (Note 19) 29,610 Strategic transaction costs (Note 15) 1,642 Adjusted operating income (loss) 43,573 12,122 (7,127 ) — 48,568 Adjusted operating margin % 24.9 % 10.7 % Six Months Ended June 30, 2017 Sales to external customers $ 341,528 $ 213,012 $ — $ — $ 554,540 Intercompany sales 62,453 145,771 — (208,224 ) — Operating income 32,117 Restructuring charges (Note 5) 13,706 Currency exchange losses, net 3,431 Other operating expense (Note 19) 29,610 Strategic transaction costs (Note 15) 2,979 Adjusted operating income (loss) 79,724 19,918 (17,799 ) — 81,843 Adjusted operating margin % 23.3 % 9.4 % 1 Reconciling items consist primarily of intercompany eliminations and items not directly attributable to reporting segments |
Percentage of Total Sales by Product Group | tal sales by product group was as follows: Three Months Ended June 30, 2018 Americas International Consolidated (In thousands) Dollars Percent Dollars Percent Dollars Percent Breathing Apparatus $ 46,678 22% $ 28,605 23% $ 75,283 22% Fixed Gas & Flame Detection 33,128 15% 30,471 25% 63,599 19% Firefighter Helmets & Protective Apparel 37,779 18% 8,897 7% 46,676 14% Portable Gas Detection 27,137 13% 14,170 11% 41,307 12% Industrial Head Protection 31,151 14% 8,488 7% 39,639 12% Fall Protection 15,094 7% 10,958 9% 26,052 8% Other 24,372 11% 22,403 18% 46,775 13% Total $ 215,339 100% $ 123,992 100% $ 339,331 100% Six Months Ended June 30, 2018 Americas International Consolidated (In thousands) Dollars Percent Dollars Percent Dollars Percent Breathing Apparatus $ 96,012 23% $ 53,889 22% $ 149,901 23% Fixed Gas & Flame Detection 65,654 15% 58,876 24% 124,530 19% Firefighter Helmets & Protective Apparel 72,533 17% 18,626 8% 91,159 14% Portable Gas Detection 55,899 13% 27,635 11% 83,534 13% Industrial Head Protection 58,992 14% 15,602 6% 74,594 11% Fall Protection 29,203 7% 22,554 9% 51,757 8% Other 46,175 11% 43,575 20% 89,750 12% Total $ 424,468 100% $ 240,757 100% $ 665,225 100% Three Months Ended June 30, 2017 Americas International Consolidated (In thousands) Dollars Percent Dollars Percent Dollars Percent Breathing Apparatus $ 45,269 26% $ 25,124 22% $ 70,393 24% Fixed Gas & Flame Detection 30,660 18% 29,515 26% 60,175 21% Firefighter Helmets & Protective Apparel 5,676 3% 8,385 7% 14,061 5% Portable Gas Detection 24,669 14% 12,346 11% 37,015 13% Industrial Head Protection 28,205 16% 7,792 7% 35,997 12% Fall Protection 14,262 8% 11,250 10% 25,512 9% Other 26,219 15% 19,403 17% 45,622 16% Total $ 174,960 100% $ 113,815 100% $ 288,775 100% Six Months Ended June 30, 2017 Americas International Consolidated (In thousands) Dollars Percent Dollars Percent Dollars Percent Breathing Apparatus $ 93,959 28% $ 44,679 21% $ 138,638 25% Fixed Gas & Flame Detection 58,639 17% 52,317 25% 110,956 20% Firefighter Helmets & Protective Apparel 11,778 3% 16,688 8% 28,466 5% Portable Gas Detection 49,683 15% 23,838 11% 73,521 13% Industrial Head Protection 52,964 16% 13,909 7% 66,873 12% Fall Protection 25,490 7% 21,965 10% 47,455 9% Other 49,015 14% 39,616 18% 88,631 16% Total $ 341,528 100% $ 213,012 100% $ 554,540 100% |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | Amounts attributable to MSA Safety Incorporated common shareholders: Three Months Ended June 30, Six Months Ended June 30, (In thousands, except per share amounts) 2018 2017 2018 2017 Net income $ 33,179 $ 12,532 $ 65,550 $ 26,945 Preferred stock dividends (10 ) (10 ) (20 ) (20 ) Net income available to common equity 33,169 12,522 65,530 26,925 Dividends and undistributed earnings allocated to participating securities (31 ) (10 ) (63 ) (26 ) Net income available to common shareholders 33,138 12,512 65,467 26,899 Basic weighted-average shares outstanding 38,327 38,065 38,272 37,914 Stock options and other stock compensation 576 715 569 771 Diluted weighted-average shares outstanding 38,903 38,780 38,841 38,685 Antidilutive stock options — — — — Earnings per share: Basic $ 0.86 $ 0.33 $ 1.71 $ 0.71 Diluted $ 0.85 $ 0.32 $ 1.69 $ 0.70 |
Stock Plans (Tables)
Stock Plans (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Compensation Expense | Stock compensation expense is as follows: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2018 2017 2018 2017 Stock compensation expense $ 2,085 $ 1,908 $ 7,692 $ 8,233 Income tax benefit 507 721 1,869 3,107 Stock compensation expense, net of income tax benefit $ 1,578 $ 1,187 $ 5,823 $ 5,126 |
Summary of Stock Option Activity | A summary of stock option activity for the six months ended June 30, 2018 , follows: Shares Weighted Average Exercise Price Outstanding at January 1, 2018 955,446 $ 42.75 Exercised (118,957 ) 36.09 Forfeited (3,358 ) 44.50 Outstanding at June 30, 2018 833,131 43.72 Exercisable at June 30, 2018 719,299 $ 43.59 |
Summary of Restricted Stock and Unit Activity | A summary of restricted stock and unit activity for the six months ended June 30, 2018 , follows: Shares Weighted Average Grant Date Fair Value Unvested at January 1, 2018 227,161 $ 57.50 Granted 65,133 85.57 Vested (81,031 ) 58.32 Forfeited (3,555 ) 57.76 Unvested at June 30, 2018 207,708 $ 66.89 |
Schedule of Fair Value Assumptions for Units | The following weighted average assumptions were used in the Monte Carlo model for units granted in the first quarter of 2018 with a market condition modifier. Fair value per unit $83.58 Risk-free interest rate 2.36% Expected dividend yield 1.82% Expected volatility 28.3% MSA stock beta 1.240 |
Summary of Performance Stock Unit Activity | A summary of performance stock unit activity for the six months ended June 30, 2018 , follows: Shares Weighted Average Grant Date Fair Value Unvested at January 1, 2018 242,186 $ 55.06 Granted 62,775 84.79 Performance adjustments (3,356 ) 44.61 Vested (41,660 ) 40.23 Forfeited (8,659 ) 44.53 Unvested at June 30, 2018 251,286 $ 65.45 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | (In thousands) June 30, 2018 December 31, 2017 2006 Senior Notes payable through 2021, 5.41%, net of debt issuance costs $ 26,667 $ 26,667 2010 Senior Notes payable through 2021, 4.00%, net of debt issuance costs 80,000 80,000 2016 Senior Notes payable through 2031, 3.40%, net of debt issuance costs 72,464 74,139 Senior revolving credit facility maturing in 2020, net of debt issuance costs 251,248 293,693 Total 430,379 474,499 Amounts due within one year, net of debt issuance costs 26,667 26,667 Long-term debt, net of debt issuance costs $ 403,712 $ 447,832 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Goodwill | Changes in goodwill during the six months ended June 30, 2018 are as follows: (In thousands) Goodwill Balance at January 1, 2018 $ 422,185 Disposals (525 ) Currency translation (3,276 ) Balance at June 30, 2018 $ 418,384 |
Changes in Intangible Assets, Net of Accumulated Amortization | Changes in intangible assets, net of accumulated amortization during the six months ended June 30, 2018 , are as follows: (In thousands) Intangible Assets Net balance at January 1, 2018 $ 183,088 Amortization expense (5,307 ) Currency translation (1,181 ) Net balance at June 30, 2018 $ 176,600 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Business Acquisition [Line Items] | |
Schedule of Pro Forma Financial Information | (In millions, except per share amounts) Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 Net sales $ 317 $ 610 Net income $ 19 $ 39 Basic earnings per share $ 0.49 $ 1.03 Diluted earnings per share $ 0.48 $ 1.00 |
Globe Holding Company LLC | |
Business Acquisition [Line Items] | |
Schedule of Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the fair values of the Globe assets acquired and liabilities assumed at the date of acquisition: (In millions) July 31, 2017 Current assets (including cash of $58 thousand) $ 28.6 Property, plant and equipment and other noncurrent assets 8.3 Trade name 60.0 Distributor relationships 40.2 Acquired technology and other intangible assets 10.5 Goodwill 74.5 Total assets acquired 222.1 Total liabilities assumed 5.7 Net assets acquired $ 216.4 |
Pensions and Other Post-retir38
Pensions and Other Post-retirement Benefits (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost | Components of net periodic benefit cost consisted of the following: Pension Benefits Other Benefits (In thousands) 2018 2017 2018 2017 Three Months Ended June 30, Service cost $ 2,891 $ 2,721 $ 83 $ 106 Interest cost 4,219 4,572 175 237 Expected return on plan assets (9,096 ) (8,738 ) — — Amortization of prior service cost (6 ) (4 ) (125 ) (105 ) Recognized net actuarial losses 3,453 3,184 351 17 Settlements 27 34 141 — Net periodic benefit cost (a) 1,488 1,769 625 255 Six Months Ended June 30, Service cost $ 5,782 $ 5,442 $ 184 $ 212 Interest cost 8,438 9,144 396 474 Expected return on plan assets (18,193 ) (17,476 ) — — Amortization of prior service cost (11 ) (8 ) (202 ) (210 ) Recognized net actuarial losses 6,907 6,368 376 34 Settlement/curtailment loss (credit) 53 68 — — Net periodic benefit cost, excluding below 2,976 3,538 754 510 Special termination charge — 11,384 (b) — — Net periodic benefit cost (a) 2,976 14,922 754 510 (a) Components of net periodic benefit cost other than service cost are included in the line item "Other income, net" in the income statement. (b) Represents the charge for special termination benefits related to the VRIP which were paid from our over funded North America pension plan and recorded as restructuring charges on the Condensed Consolidated Statement of Income. See further details in Note 5—Restructuring Charges. |
Derivative Financial Instrume39
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Balance Sheet Location and Fair Value of Assets Associated with Derivative Financial Instruments | The following table presents the Condensed Consolidated Balance Sheet location and fair value of assets and liabilities associated with derivative financial instruments: (In thousands) June 30, 2018 December 31, 2017 Derivatives not designated as hedging instruments: Foreign exchange contracts: other current liabilities $ 25 $ 314 Foreign exchange contracts: other current assets 106 840 |
Income Statement Location and Impact of Derivative Financial Instruments | The following table presents the Condensed Consolidated Statement of Income location and impact of derivative financial instruments: Loss (Gain) Recognized in Income Six Months Ended June 30, (In thousands) Statement of Income Location 2018 2017 Derivatives not designated as hedging instruments: Foreign exchange contracts Currency exchange losses (gains), net $ 587 $ (5,014 ) |
Contingencies (Tables)
Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Cumulative Trauma Product Liability Claims Activity | A summary of cumulative trauma product liability lawsuits and asserted cumulative trauma product liability claims activity follows: Six Months Ended June 30, 2018 Year Ended December 31, 2017 Open lawsuits, beginning of period 1,420 1,794 New lawsuits 189 398 Settled and dismissed lawsuits (139 ) (772 ) Open lawsuits, end of period 1,470 1,420 Six Months Ended June 30, 2018 Year Ended December 31, 2017 Asserted claims, beginning of period 2,242 3,023 New claims 258 455 Settled and dismissed claims (155 ) (1,236 ) Asserted claims, end of period 2,345 2,242 |
Summary of Insurance Receivable Balances and Activity Related to Cumulative Trauma Product Liability Losses | A summary of Insurance receivable balances and activity related to cumulative trauma product liability losses follows: (In millions) Six Months Ended June 30, 2018 Year Ended December 31, 2017 Balance beginning of period $ 134.7 $ 159.9 Additions 1.0 94.6 Collections, settlements converted to notes receivable and other adjustments (10.0 ) (119.8 ) Balance end of period $ 125.7 $ 134.7 |
Schedule of Notes Receivable Balances from Insurance Companies | A summary of Notes receivable, insurance companies balances is as follows: (In millions) Six Months Ended June 30, 2018 Year Ended December 31, 2017 Balance beginning of period $ 76.9 $ 67.3 Additions 0.8 35.1 Collections (13.9 ) (25.5 ) Balance end of period $ 63.8 $ 76.9 |
Schedule of Product Warranty Liability | he following table reconciles the changes in the Company's accrued warranty reserve: (In thousands) Six Months Ended June 30, 2018 Year Ended December 31, 2017 Beginning warranty reserve $ 14,753 $ 11,821 Warranty payments (315 ) (550 ) Warranty claims 1,217 2,116 Provision for product warranties (392 ) 1,366 Ending warranty reserve $ 15,263 $ 14,753 |
Recently Adopted and Recently41
Recently Adopted and Recently Issued Accounting Standards - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Undiscounted future minimum rent commitments under noncancellable leases | $ 39,400 | $ 39,400 | ||
Additional discrete tax benefit | 507 | $ 721 | 1,869 | $ 3,107 |
Net Cash Provided by (Used in) Financing Activities | (69,528) | (142,909) | ||
Accounting Standards Update 2016-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Additional discrete tax benefit | 1,900 | 6,800 | ||
Accounting Standards Update 2016-16 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative-effect adjustment to retained earnings | 5,915 | 5,915 | ||
Accounting Standards Update 2016-18 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net Cash Provided by (Used in) Financing Activities | 400 | |||
Accounting Standards Update 2017-07 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Decrease in operating income | $ 2,200 | $ 1,600 | $ 2,200 | $ 1,600 |
Significant Accounting Polici42
Significant Accounting Policies Update (Details) | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Revenue, Major Customer [Line Items] | |
Contract with customer, percentage retained until completion | 0.00% |
Contract with customer, asset | $ 0 |
Contract with customer, liability | $ 0 |
Americas | Minimum | |
Revenue, Major Customer [Line Items] | |
Sales through distributors | 75.00% |
Americas | Maximum | |
Revenue, Major Customer [Line Items] | |
Sales through distributors | 85.00% |
International | Minimum | |
Revenue, Major Customer [Line Items] | |
Sales through distributors | 55.00% |
International | Maximum | |
Revenue, Major Customer [Line Items] | |
Sales through distributors | 65.00% |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Finished products | $ 79,059 | $ 66,064 |
Work in process | 7,542 | 10,141 |
Raw materials and supplies | 130,509 | 117,388 |
Inventories at current cost | 217,110 | 193,593 |
Less: LIFO valuation | (39,854) | (39,854) |
Total inventories | $ 177,256 | $ 153,739 |
Restructuring Charges - Additio
Restructuring Charges - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges (Note 5) | $ (2,335) | $ (967) | $ (7,609) | $ (13,706) | ||
Currency translation and other adjustments | (500) | $ (300) | ||||
Corporate | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges (Note 5) | (3,500) | |||||
Currency translation and other adjustments | 0 | 0 | ||||
Americas | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges (Note 5) | (600) | (12,400) | ||||
Currency translation and other adjustments | (200) | (200) | ||||
International | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges (Note 5) | (3,500) | $ (1,600) | ||||
Currency translation and other adjustments | $ (300) | $ (100) | ||||
Voluntary Retirement Incentive Package | Special Termination Benefits | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Severance costs | $ 11,400 |
Restructuring Charges - Activit
Restructuring Charges - Activity and Reserve Balance for Restructuring Charges by Segment (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | $ 4.1 | $ 4 |
Restructuring charges | 7.6 | 17.9 |
Currency translation and other adjustments | (0.5) | (0.3) |
Cash payments / utilization | (6.1) | (17.5) |
Restructuring reserve, ending balance | 5.1 | 4.1 |
Americas | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | 0.5 | 0.9 |
Restructuring charges | 0.6 | 13 |
Currency translation and other adjustments | (0.2) | (0.2) |
Cash payments / utilization | (0.6) | (13.2) |
Restructuring reserve, ending balance | 0.3 | 0.5 |
International | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | 3.6 | 2.8 |
Restructuring charges | 3.5 | 4.9 |
Currency translation and other adjustments | (0.3) | (0.1) |
Cash payments / utilization | (2) | (4) |
Restructuring reserve, ending balance | 4.8 | 3.6 |
Corporate | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | 0 | 0.3 |
Restructuring charges | 3.5 | 0 |
Currency translation and other adjustments | 0 | 0 |
Cash payments / utilization | (3.5) | (0.3) |
Restructuring reserve, ending balance | $ 0 | $ 0 |
Property, Plant and Equipment46
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 513,897 | $ 515,065 |
Less: accumulated depreciation | (365,117) | (358,051) |
Net property, plant and equipment | 148,780 | 157,014 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 3,244 | 3,312 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 119,238 | 119,970 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 379,740 | 379,747 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 11,675 | $ 12,036 |
Reclassifications Out of Accu47
Reclassifications Out of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | $ 602,578 | |||
Total amount reclassified from Accumulated other comprehensive loss, net of tax | $ (774) | $ 0 | (774) | $ 0 |
Other comprehensive income (loss) | (25,595) | 16,280 | (9,866) | 29,008 |
Balance at end of period | 639,070 | 639,070 | ||
Accumulated Defined Benefit Plans Adjustment Attributable to Parent | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (95,619) | (116,084) | (97,948) | (118,068) |
Tax benefit | (614) | (935) | (1,682) | (2,043) |
Total amount reclassified from Accumulated other comprehensive loss, net of tax | 3,059 | 2,157 | 5,388 | 4,141 |
Balance at end of period | (92,560) | (113,927) | (92,560) | (113,927) |
Accumulated Defined Benefit Plans Adjustment Attributable to Noncontrolling Interest | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 0 | 0 | 0 | 0 |
Tax benefit | 0 | 0 | 0 | 0 |
Total amount reclassified from Accumulated other comprehensive loss, net of tax | 0 | 0 | 0 | 0 |
Balance at end of period | 0 | 0 | 0 | 0 |
Accumulated Defined Benefit Plans Adjustment, Net Prior Service Attributable to Parent | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Amounts reclassified from Accumulated other comprehensive loss | (131) | (109) | (213) | (218) |
Accumulated Defined Benefit Plans Adjustment, Net Prior Service Attributable to Noncontrolling Interest | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Amounts reclassified from Accumulated other comprehensive loss | 0 | 0 | 0 | 0 |
Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Amounts reclassified from Accumulated other comprehensive loss | 3,804 | 3,201 | 7,283 | 6,402 |
Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Noncontrolling Interest | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Amounts reclassified from Accumulated other comprehensive loss | 0 | 0 | 0 | 0 |
Accumulated Foreign Currency Adjustment Attributable to Parent | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (60,584) | (100,808) | (73,814) | (112,178) |
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent | 774 | 0 | (774) | 0 |
Other comprehensive income (loss) | (27,607) | 14,960 | (14,377) | 26,330 |
Balance at end of period | (88,965) | (85,848) | (88,965) | (85,848) |
Accumulated Foreign Currency Adjustment Attributable to Noncontrolling Interest | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 971 | (2,590) | 801 | (1,964) |
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent | 0 | 0 | 0 | 0 |
Other comprehensive income (loss) | (273) | (837) | (103) | (1,463) |
Balance at end of period | $ 698 | $ (3,427) | $ 698 | $ (3,427) |
Capital Stock (Details)
Capital Stock (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Capital Unit [Line Items] | |||
Treasury stock, shares (shares) | 23,661,051 | 23,858,463 | |
Common stock, shares authorized (shares) | 180,000,000 | ||
Common stock, par value (dollars per share) | $ 0 | $ 0 | |
Common stock, shares, outstanding (shares) | 38,420,340 | 38,222,928 | |
4 1/2% Cumulative Preferred Nonvoting Stock | |||
Capital Unit [Line Items] | |||
Preferred stock, shares authorized (shares) | 100,000 | ||
Preferred stock, par value (dollars per share) | $ 50 | ||
Percentage of cumulative preferred stock (percent) | 4.50% | ||
Preferred stock, callable price per share (dollars per share) | $ 52.50 | ||
Preferred stock, shares issued (shares) | 71,340 | ||
Treasury stock, shares (shares) | 52,878 | ||
Purchase of treasury shares (shares) | 0 | 0 | |
Second Cumulative Preferred Voting Stock | |||
Capital Unit [Line Items] | |||
Preferred stock, shares authorized (shares) | 1,000,000 | ||
Preferred stock, par value (dollars per share) | $ 10 | ||
Preferred stock, shares issued (shares) | 0 | ||
Common Stock | |||
Capital Unit [Line Items] | |||
Purchase of treasury shares (shares) | 0 | 0 | |
Common stock, shares issued (shares) | 62,081,391 | ||
Stock issued during period, new issues (shares) | 0 | ||
Common stock, value, issued | $ 100,000,000 | ||
Treasury Stock | |||
Capital Unit [Line Items] | |||
Reissued shares (shares) | 241,732 | 514,704 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2018Segment | |
Segment Reporting [Abstract] | |
Number of geographic operating segments | 7 |
Number of reportable segments | 3 |
Segment Information - Schedule
Segment Information - Schedule of Reportable Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Sales to external customers | $ 339,331 | $ 288,775 | $ 665,225 | $ 554,540 |
Intercompany sales | 0 | 0 | 0 | 0 |
Operating income | 46,797 | 13,498 | 91,232 | 32,117 |
Restructuring charges (Note 5) | (2,335) | (967) | (7,609) | (13,706) |
Currency exchange losses, net | 815 | 2,851 | 2,823 | 3,431 |
Other operating expense (Note 19) | 8,018 | 29,610 | 10,842 | 29,610 |
Strategic Transaction Costs | 58 | 1,642 | 152 | 2,979 |
Adjusted operating income (loss) | 58,023 | 48,568 | 112,658 | 81,843 |
Americas | ||||
Segment Reporting Information [Line Items] | ||||
Sales to external customers | 215,339 | 174,960 | 424,468 | 341,528 |
Restructuring charges (Note 5) | (600) | (12,400) | ||
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Restructuring charges (Note 5) | (3,500) | |||
Reportable Segments | Americas | ||||
Segment Reporting Information [Line Items] | ||||
Sales to external customers | 215,339 | 174,960 | 424,468 | 341,528 |
Intercompany sales | 36,445 | 32,264 | 70,643 | 62,453 |
Adjusted operating income (loss) | $ 49,838 | $ 43,573 | $ 99,924 | $ 79,724 |
Adjusted operating margin % | 23.10% | 24.90% | 23.50% | 23.30% |
Reportable Segments | International | ||||
Segment Reporting Information [Line Items] | ||||
Sales to external customers | $ 123,992 | $ 113,815 | $ 240,757 | $ 213,012 |
Intercompany sales | 84,514 | 75,575 | 166,893 | 145,771 |
Adjusted operating income (loss) | $ 15,853 | $ 12,122 | $ 28,631 | $ 19,918 |
Adjusted operating margin % | 12.80% | 10.70% | 11.90% | 9.40% |
Reportable Segments | Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Sales to external customers | $ 0 | $ 0 | $ 0 | $ 0 |
Intercompany sales | 0 | 0 | 0 | |
Adjusted operating income (loss) | (7,668) | (7,127) | (15,897) | (17,799) |
Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Sales to external customers | 0 | 0 | 0 | 0 |
Intercompany sales | (120,959) | (107,839) | (237,536) | (208,224) |
Adjusted operating income (loss) | $ 0 | $ 0 | $ 0 | $ 0 |
Segment Information - Percentag
Segment Information - Percentage of Total Sales by Product Group (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue from External Customer [Line Items] | ||||
Net sales | $ 339,331 | $ 288,775 | $ 665,225 | $ 554,540 |
Breathing Apparatus | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 75,283 | 70,393 | 149,901 | 138,638 |
Fixed Gas & Flame Detection | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 63,599 | 60,175 | 124,530 | 110,956 |
Portable Gas Detection | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 41,307 | 37,015 | 83,534 | 73,521 |
Industrial Head Protection | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 39,639 | 35,997 | 74,594 | 66,873 |
Fall Protection [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 26,052 | 25,512 | 51,757 | 47,455 |
Firefighter Helmets and Protective Apparel | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 46,676 | 14,061 | 91,159 | 28,466 |
Other | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | $ 46,775 | $ 45,622 | $ 89,750 | $ 88,631 |
Sales | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Sales | Breathing Apparatus | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 22.00% | 24.00% | 23.00% | 25.00% |
Sales | Fixed Gas & Flame Detection | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 19.00% | 21.00% | 19.00% | 20.00% |
Sales | Portable Gas Detection | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 12.00% | 13.00% | 13.00% | 13.00% |
Sales | Industrial Head Protection | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 12.00% | 12.00% | 11.00% | 12.00% |
Sales | Fall Protection [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 8.00% | 9.00% | 8.00% | 9.00% |
Sales | Firefighter Helmets and Protective Apparel | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 14.00% | 5.00% | 14.00% | 5.00% |
Sales | Other | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 13.00% | 16.00% | 12.00% | 16.00% |
Americas | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | $ 215,339 | $ 174,960 | $ 424,468 | $ 341,528 |
Americas | Breathing Apparatus | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 46,678 | 45,269 | 96,012 | 93,959 |
Americas | Fixed Gas & Flame Detection | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 33,128 | 30,660 | 65,654 | 58,639 |
Americas | Portable Gas Detection | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 27,137 | 24,669 | 55,899 | 49,683 |
Americas | Industrial Head Protection | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 31,151 | 28,205 | 58,992 | 52,964 |
Americas | Fall Protection [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 15,094 | 14,262 | 29,203 | 25,490 |
Americas | Firefighter Helmets and Protective Apparel | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 37,779 | 5,676 | 72,533 | 11,778 |
Americas | Other | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | $ 24,372 | $ 26,219 | $ 46,175 | $ 49,015 |
Americas | Sales | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Americas | Sales | Breathing Apparatus | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 22.00% | 26.00% | 23.00% | 28.00% |
Americas | Sales | Fixed Gas & Flame Detection | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 15.00% | 18.00% | 15.00% | 17.00% |
Americas | Sales | Portable Gas Detection | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 13.00% | 14.00% | 13.00% | 15.00% |
Americas | Sales | Industrial Head Protection | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 14.00% | 16.00% | 14.00% | 16.00% |
Americas | Sales | Fall Protection [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 7.00% | 8.00% | 7.00% | 7.00% |
Americas | Sales | Firefighter Helmets and Protective Apparel | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 18.00% | 3.00% | 17.00% | 3.00% |
Americas | Sales | Other | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 11.00% | 15.00% | 11.00% | 14.00% |
International | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | $ 123,992 | $ 113,815 | $ 240,757 | $ 213,012 |
International | Breathing Apparatus | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 28,605 | 25,124 | 53,889 | 44,679 |
International | Fixed Gas & Flame Detection | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 30,471 | 29,515 | 58,876 | 52,317 |
International | Portable Gas Detection | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 14,170 | 12,346 | 27,635 | 23,838 |
International | Industrial Head Protection | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 8,488 | 7,792 | 15,602 | 13,909 |
International | Fall Protection [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 10,958 | 11,250 | 22,554 | 21,965 |
International | Firefighter Helmets and Protective Apparel | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 8,897 | 8,385 | 18,626 | 16,688 |
International | Other | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | $ 22,403 | $ 19,403 | $ 43,575 | $ 39,616 |
International | Sales | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 100.00% | 100.00% | 100.00% | 100.00% |
International | Sales | Breathing Apparatus | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 23.00% | 22.00% | 22.00% | 21.00% |
International | Sales | Fixed Gas & Flame Detection | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 25.00% | 26.00% | 24.00% | 25.00% |
International | Sales | Portable Gas Detection | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 11.00% | 11.00% | 11.00% | 11.00% |
International | Sales | Industrial Head Protection | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 7.00% | 7.00% | 6.00% | 7.00% |
International | Sales | Fall Protection [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 9.00% | 10.00% | 9.00% | 10.00% |
International | Sales | Firefighter Helmets and Protective Apparel | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 7.00% | 7.00% | 8.00% | 8.00% |
International | Sales | Other | ||||
Revenue from External Customer [Line Items] | ||||
Concentration risk percentage | 18.00% | 17.00% | 20.00% | 18.00% |
Earnings per Share - Schedule o
Earnings per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Net income | $ 33,179 | $ 12,532 | $ 65,550 | $ 26,945 |
Preferred stock dividends | 10 | 10 | 20 | 20 |
Net income available to common equity | 33,169 | 12,522 | 65,530 | 26,925 |
Dividends and undistributed earnings allocated to participating securities | 31 | 10 | 63 | 26 |
Net income available to common shareholders | $ 33,138 | $ 12,512 | $ 65,467 | $ 26,899 |
Basic weighted-average shares outstanding | 38,327 | 38,065 | 38,272 | 37,914 |
Stock options and other stock compensation | 576 | 715 | 569 | 771 |
Diluted weighted-average shares outstanding | 38,903 | 38,780 | 38,841 | 38,685 |
Antidilutive stock options | 0 | 0 | 0 | 0 |
Earnings per share: | ||||
Basic | $ 0.86 | $ 0.33 | $ 1.71 | $ 0.71 |
Diluted | $ 0.85 | $ 0.32 | $ 1.69 | $ 0.70 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | Dec. 22, 2017 | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Income Tax Contingency [Line Items] | ||||||
U.S. federal income tax rate | 21.00% | 35.00% | 21.00% | |||
Tax Cuts And Jobs Act Of 2017, Incomplete Accounting, Provisional Income Tax Expense (Benefit) | $ 19,800,000 | |||||
Tax Cuts And Jobs Act Of 2017, Incomplete Accounting, Transition Tax For Accumulated Foreign Earnings, Provisional Income Tax Expense (Benefit) | 18,000,000 | |||||
Tax Cuts And Jobs Act Of 2017, Incomplete Accounting, Change In Tax Rate, Provisional Income Tax Expense (Benefit) | 1,800,000 | |||||
Tax Cuts And Jobs Act Of 2017, Incomplete Accounting, Change In Tax Rate, Differences of Non-U.S. Subsidiaries Offset By Foreign Tax Credits | $ 7,800,000 | |||||
Tax Cuts And Jobs Act Of 2017, Incomplete Accounting, Provisional Income Tax Expense (Benefit) Adjustment During the Period | $ 0 | |||||
Effective income tax rate | (22.80%) | 7.70% | (22.70%) | 3.20% | ||
Significant tax benefit related to certain share-based payments | 2.20% | 34.40% | 2.20% | 24.20% | ||
Insurance receivable (Note 19) and other noncurrent assets | $ 122,901,000 | $ 131,790,000 | $ 122,901,000 | |||
Accrued interest and penalties related to uncertain tax positions | 2,800,000 | 2,800,000 | ||||
Other Noncurrent Liabilities | ||||||
Income Tax Contingency [Line Items] | ||||||
Unrecognized tax benefits | 14,600,000 | 14,600,000 | ||||
Deferred Tax Asset | ||||||
Income Tax Contingency [Line Items] | ||||||
Insurance receivable (Note 19) and other noncurrent assets | $ 5,200,000 | $ 5,200,000 |
Stock Plans - Additional Inform
Stock Plans - Additional Information (Details) | 3 Months Ended | 6 Months Ended |
Mar. 31, 2018 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of target award based on achieving specified performance targets | 93.60% | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of target award based on achieving targeted performance conditions | 0.00% | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of target award based on achieving targeted performance conditions | 200.00% | |
Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value assumptions, average closing price used to calculate expected dividend rate, period (years) | 1 year | |
Stock beta, daily price data period (years) | 10 years | |
Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period (in years) | 3 years |
Stock Plans - Schedule of Stock
Stock Plans - Schedule of Stock Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Stock compensation expense | $ 2,085 | $ 1,908 | $ 7,692 | $ 8,233 |
Income tax benefit | 507 | 721 | 1,869 | 3,107 |
Stock compensation expense, net of income tax benefit | $ 1,578 | $ 1,187 | $ 5,823 | $ 5,126 |
Stock Plans - Weighted Average
Stock Plans - Weighted Average Risk Assumptions (Details) - Performance Stock Unit | 3 Months Ended | 6 Months Ended |
Mar. 31, 2018$ / shares | Jun. 30, 2018$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value per unit (dollars per share) | $ 84.79 | |
Monte Carlo Approach | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value per unit (dollars per share) | $ 83.58 | |
Risk-free interest rate | 2.36% | |
Expected dividend yield | 1.82% | |
Expected volatility | 28.30% | |
MSA stock beta | 1.240 |
Stock Plans - Summary of Stock
Stock Plans - Summary of Stock Option Activity (Details) | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Shares | |
Outstanding, beginning balance (in shares) | shares | 955,446 |
Exercised (in shares) | shares | (118,957) |
Forfeited (in shares) | shares | 3,358 |
Outstanding, ending balance (in shares) | shares | 833,131 |
Exercisable (in shares) | shares | 719,299 |
Weighted Average Exercise Price (dollars per share) | |
Outstanding, beginning balance (dollars per share) | $ / shares | $ 42.75 |
Exercised (dollars per share) | $ / shares | 36.09 |
Forfeited (dollars per share) | $ / shares | 44.50 |
Outstanding, ending balance (dollars per share) | $ / shares | 43.72 |
Exercisable (dollars per share) | $ / shares | $ 43.59 |
Stock Plans - Summary of Restri
Stock Plans - Summary of Restricted Stock and Unit Activity (Details) - Restricted Stock Activity | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Shares | |
Unvested, beginning balance (in shares) | shares | 227,161 |
Granted (in shares) | shares | 65,133 |
Vested (in shares) | shares | (81,031) |
Forfeited (in shares) | shares | (3,555) |
Unvested, ending balance (in shares) | shares | 207,708 |
Weighted Average Exercise Price (dollars per share) | |
Unvested, beginning balance (dollars per share) | $ / shares | $ 57.50 |
Granted (dollars per share) | $ / shares | 85.57 |
Vested (dollars per share) | $ / shares | 58.32 |
Forfeited (dollars per share) | $ / shares | 57.76 |
Unvested, ending Balance (dollars per share) | $ / shares | $ 66.89 |
Stock Plans - Summary of Perfor
Stock Plans - Summary of Performance Stock Unit Activity (Details) - Performance Stock Unit | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Shares | |
Unvested, beginning balance (in shares) | shares | 242,186 |
Granted (in shares) | shares | 62,775 |
Performance adjustments (in shares) | shares | (3,356) |
Vested (in shares) | shares | (41,660) |
Unvested, ending balance (in shares) | shares | 251,286 |
Weighted Average Exercise Price (dollars per share) | |
Unvested, beginning balance (dollars per share) | $ / shares | $ 55.06 |
Granted (dollars per share) | $ / shares | 84.79 |
Performance adjustments (dollars per share) | $ / shares | 44.61 |
Vested (dollars per share) | $ / shares | 40.23 |
Unvested, ending Balance (dollars per share) | $ / shares | $ 65.45 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | shares | 8,659 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ / shares | $ 44.53 |
Long-Term Debt - Schedule of De
Long-Term Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Senior revolving credit facility maturing in 2020, net of debt issuance costs | $ 251,248 | $ 293,693 |
Total | 430,379 | 474,499 |
Amounts due within one year, net of debt issuance costs | 26,667 | 26,667 |
Long-term debt, net of debt issuance costs | 403,712 | 447,832 |
2006 Senior Notes Payable Through 2021, 5.41% | ||
Debt Instrument [Line Items] | ||
Senior notes payable | $ 26,667 | $ 26,667 |
Debt instrument, stated interest rate percentage | 5.41% | 5.41% |
2010 Senior Notes Payable Through 2021, 4.00% | ||
Debt Instrument [Line Items] | ||
Senior notes payable | $ 80,000 | $ 80,000 |
Debt instrument, stated interest rate percentage | 4.00% | 4.00% |
2016 Senior Notes Payable Through 2031, 3.40% | ||
Debt Instrument [Line Items] | ||
Senior notes payable | $ 72,464 | $ 74,139 |
Debt instrument, stated interest rate percentage | 3.40% | 3.40% |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) | Jan. 22, 2023GBP (£) | Jan. 22, 2016GBP (£) | Jun. 30, 2018USD ($) | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||||
Line of credit facility, remaining borrowing capacity | $ 316,700,000 | |||
Line of credit facility, maximum borrowing capacity | 575,000,000 | |||
Debt instrument, collateral amount | 3,200,000 | |||
Standby Letters of Credit | ||||
Debt Instrument [Line Items] | ||||
Proceeds from lines of credit | $ 15,100,000 | |||
2006 Senior Notes Payable Through 2021, 5.41% | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, stated interest rate percentage | 5.41% | 5.41% | ||
Senior Revolving Credit Facility Maturing in 2020 | Standby Letters of Credit | ||||
Debt Instrument [Line Items] | ||||
Proceeds from lines of credit | $ 6,200,000 | |||
Line of Credit | Senior Revolving Credit Facility Maturing in 2020 | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Weighted average revolving interest rate, percentage | 3.31% | |||
Notes Payable | Multi-currency Notes Due in 2031 | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | £ 54,900,000 | $ 72,500,000 | ||
Debt instrument, stated interest rate percentage | 3.40% | |||
Minimum fixed charges coverage ratio (not less than) | 1.50 | |||
Maximum consolidated leverage ratio (not to exceed) | 3.25 | |||
Notes Payable | 2006 Senior Notes Payable Through 2021, 5.41% | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, stated interest rate percentage | 5.41% | |||
Federal Funds Open Rate | Line of Credit | Senior Revolving Credit Facility Maturing in 2020 | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Interest rate margin, percentage | 0.50% | |||
London Interbank Offered Rate (LIBOR) | Line of Credit | Senior Revolving Credit Facility Maturing in 2020 | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Interest rate margin, percentage | 1.00% | |||
Minimum | Line of Credit | Senior Revolving Credit Facility Maturing in 2020 | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Interest rate margin, percentage | 0.00% | |||
Maximum | Line of Credit | Senior Revolving Credit Facility Maturing in 2020 | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Interest rate margin, percentage | 175.00% | |||
Scenario, Forecast | Notes Payable | Multi-currency Notes Due in 2031 | ||||
Debt Instrument [Line Items] | ||||
Annual installment debt payments | £ 6,100,000 | $ 8,100,000 |
Goodwill and Intangible Asset62
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | $ 418,384 | $ 422,185 |
Americas | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | 273,300 | |
International | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | 145,100 | |
Trade name | Globe Holding Company LLC | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-Lived Intangible Assets | $ 60,000 |
Goodwill and Intangible Asset63
Goodwill and Intangible Assets - Changes in Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, Impairment Loss | $ (525) |
Goodwill [Roll Forward] | |
January 1, 2018 | 422,185 |
Currency translation | (3,276) |
June 30, 2018 | $ 418,384 |
Goodwill and Intangible Asset64
Goodwill and Intangible Assets - Changes in Intangible Assets, Net of Accumulated Amortization (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Finite-lived Intangible Assets [Roll Forward] | |
January 1, 2018 | $ 183,088 |
Amortization expense | (5,307) |
Currency translation | (1,181) |
June 30, 2018 | $ 176,600 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) $ in Thousands | Jul. 31, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Business Acquisition [Line Items] | |||||
Strategic Transaction Costs | $ 58 | $ 1,642 | $ 152 | $ 2,979 | |
Globe Holding Company LLC | |||||
Business Acquisition [Line Items] | |||||
Voting interest acquired (percentage) | 100.00% | ||||
All-cash transaction value | $ 215,000 | ||||
Working capital adjustment | 1,400 | ||||
Estimated future amortization expense, remainder of fiscal year | 2,100 | 2,100 | |||
Estimated future amortization expense, year 1 | 4,100 | 4,100 | |||
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 3,200 | 3,200 | |||
Estimated future amortization expense, year 2 | 4,100 | 4,100 | |||
Estimated future amortization expense, year 3 | 4,100 | 4,100 | |||
Estimated future depreciation expense, remainder of fiscal year | 500 | 500 | |||
Estimated future depreciation expense, year 1 | 1,000 | 1,000 | |||
Estimated future depreciation expense, year 2 | 1,000 | 1,000 | |||
Estimated future depreciation expense, year 3 | 1,000 | 1,000 | |||
Estimated future depreciation expense, year 4 | $ 1,000 | 1,000 | |||
Goodwill | $ 74,500 | ||||
Sales | 60,900 | ||||
Net income | $ 7,400 | ||||
Distributor relationships | Globe Holding Company LLC | |||||
Business Acquisition [Line Items] | |||||
Acquired intangible assets, amortization period | 20 years | ||||
Acquired technology and other intangible assets | Globe Holding Company LLC | |||||
Business Acquisition [Line Items] | |||||
Acquired intangible assets, amortization period | 5 years |
Acquisitions - Fair Value of As
Acquisitions - Fair Value of Assets Acquired and Liabilities Assumed (Details) - Globe Holding Company LLC $ in Thousands | Jul. 31, 2017USD ($) |
Business Acquisition [Line Items] | |
Current assets (including cash) | $ 28,600 |
Cash included in current assets | 58 |
Property, plant and equipment and other noncurrent assets | 8,300 |
Goodwill | 74,500 |
Total assets acquired | 222,100 |
Total liabilities assumed | 5,700 |
Net assets acquired | 216,400 |
Trade name | |
Business Acquisition [Line Items] | |
Intangible assets | 60,000 |
Distributor relationships | |
Business Acquisition [Line Items] | |
Intangible assets | 40,200 |
Acquired technology and other intangible assets | |
Business Acquisition [Line Items] | |
Intangible assets | $ 10,500 |
Acquisitions - Pro Forma Financ
Acquisitions - Pro Forma Financial Information (Details) - Globe Holding Company LLC - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2017 | Jun. 30, 2017 | |
Business Acquisition [Line Items] | ||
Net sales | $ 317 | $ 610 |
Net income | $ 19 | $ 39 |
Basic earnings per share | $ 0.49 | $ 1.03 |
Diluted earnings per share | $ 0.48 | $ 1 |
Pensions and Other Post-retir68
Pensions and Other Post-retirement Benefits - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Pension Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 2,891 | $ 2,721 | $ 5,782 | $ 5,442 |
Interest cost | 4,219 | 4,572 | 8,438 | 9,144 |
Expected return on plan assets | (9,096) | (8,738) | (18,193) | (17,476) |
Amortization of prior service cost | (6) | (4) | (11) | (8) |
Recognized net actuarial losses | 3,453 | 3,184 | 6,907 | 6,368 |
Settlement/curtailment loss (credit) | 27 | 34 | 53 | 68 |
Net periodic benefit cost, excluding below | 2,976 | 3,538 | ||
Special termination charge | 0 | 11,384 | ||
Net periodic benefit cost (a) | 1,488 | 1,769 | 2,976 | 14,922 |
Other Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 83 | 106 | 184 | 212 |
Interest cost | 175 | 237 | 396 | 474 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of prior service cost | (125) | (105) | (202) | (210) |
Recognized net actuarial losses | 351 | 17 | 376 | 34 |
Settlement/curtailment loss (credit) | 141 | 0 | 0 | 0 |
Net periodic benefit cost, excluding below | 754 | 510 | ||
Special termination charge | 0 | 0 | ||
Net periodic benefit cost (a) | $ 625 | $ 255 | $ 754 | $ 510 |
Pensions and Other Post-retir69
Pensions and Other Post-retirement Benefits - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2018 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Pension plans contributions | $ 2.5 | $ 3 | |
Total estimated pension plans contributions for the fiscal year | $ 5 | ||
Change in Assumptions for Defined Benefit Plans | Scenario, Forecast | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | $ 1.8 |
Derivative Financial Instrume70
Derivative Financial Instruments - Additional Information (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Foreign Exchange Forward | ||
Derivative [Line Items] | ||
Notional amount of open forward contracts | $ 71 | $ 124.7 |
Derivative Financial Instrume71
Derivative Financial Instruments - Balance Sheet Location and Fair Value of Assets Associated with Derivative Financial Instruments (Details) - Not Designated as Hedging Instrument - Foreign exchange contract - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Foreign exchange contracts: other current liabilities | $ 25 | $ 314 |
Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Foreign exchange contracts: other current assets | $ 106 | $ 840 |
Derivative Financial Instrume72
Derivative Financial Instruments - Income Statement Location and Impact of Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Not Designated as Hedging Instrument | Foreign exchange contract | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Currency exchange losses (gains), net | $ 587 | $ (5,014) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Reported Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, Fair value disclosure | $ 180.8 | $ 180.8 |
Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, Fair value disclosure | $ 191 | $ 200 |
Contingencies - Additional Info
Contingencies - Additional Information (Details) | Mar. 08, 2017USD ($) | Feb. 09, 2017USD ($) | Oct. 06, 2016USD ($)policy | Aug. 31, 2017USD ($) | Jun. 30, 2018USD ($)LegalMatter | Jun. 30, 2018USD ($)LegalMatterVendor | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($)LegalMatter | Dec. 31, 2010policy | Dec. 31, 2009policy | Dec. 31, 2016USD ($)LegalMatter |
Loss Contingencies [Line Items] | |||||||||||
Loss contingency, years of activity | 5 years | ||||||||||
Number of insurance carriers | Vendor | 20 | ||||||||||
Insurance receivables | $ 125,700,000 | $ 125,700,000 | $ 134,700,000 | $ 159,900,000 | |||||||
Insurance receivables, current | 10,600,000 | 10,600,000 | 11,600,000 | ||||||||
Insurance receivables, noncurrent | 115,100,000 | 115,100,000 | 123,100,000 | ||||||||
Notes receivable from insurance companies | 63,800,000 | 63,800,000 | 76,900,000 | $ 67,300,000 | |||||||
Notes receivable from insurance companies, current | 3,494,000 | 3,494,000 | 17,333,000 | ||||||||
Notes Receivables from Insurance Companies, Noncurrent | 60,300,000 | 60,300,000 | 59,600,000 | ||||||||
Payment received pursuant to insurance policies | $ 80,900,000 | ||||||||||
Product Warranty Expense | 5,500,000 | $ 3,600,000 | |||||||||
Single Incident | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Product liability accrual | $ 4,700,000 | 4,700,000 | $ 5,400,000 | ||||||||
Product liability expense | $ 900,000 | 200,000 | |||||||||
Lawsuit | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Number of lawsuits | LegalMatter | 1,470 | 1,470 | 1,420 | 1,794 | |||||||
Damages from Product Defects | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Number of lawsuits | LegalMatter | 2,345 | 2,345 | 2,242 | 3,023 | |||||||
Unasserted Claim | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Product liability accrual | $ 107,800,000 | $ 107,800,000 | $ 111,100,000 | ||||||||
Cumulative Trauma | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Product liability accrual | 162,300,000 | 162,300,000 | 181,100,000 | ||||||||
Product liability expense | 11,800,000 | 97,600,000 | |||||||||
Cumulative Trauma, Reported Claims | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Product liability accrual | 54,500,000 | 54,500,000 | 70,000,000 | ||||||||
Claims Settled, But Not Yet Paid | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Product liability accrual | 39,000,000 | 39,000,000 | 54,500,000 | ||||||||
Claims Asserted But Not Yet Resolved | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Product liability accrual | 15,500,000 | 15,500,000 | 15,500,000 | ||||||||
Uninsured Cumulative Trauma | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Product liability expense | 10,800,000 | $ 29,600,000 | |||||||||
Other Current Liabilities | Cumulative Trauma | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Product liability accrual | 47,400,000 | 47,400,000 | 48,600,000 | ||||||||
Other Noncurrent Liabilities | Cumulative Trauma | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Product liability accrual | 7,100,000 | 7,100,000 | 21,400,000 | ||||||||
North River Insurance Company | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Gain contingency, number of policies allegedly breached | policy | 3 | 3 | 1 | ||||||||
Litigation Settlement, Amount Awarded from Other Party | $ 10,900,000 | ||||||||||
Damages awarded | $ 48,900,000 | ||||||||||
Settled Litigation | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Payments to resolve cumulative trauma claims | 14,300,000 | $ 25,200,000 | |||||||||
Insurance receivables | $ 51,000,000 | 51,000,000 | |||||||||
Damages awarded | $ 75,200,000 | ||||||||||
Subsequent Event | Settled Litigation | Scenario, Forecast | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss Contingency Accrual, Payments | $ 7,100,000 | ||||||||||
Loss Contingency Accrual, Number of Periodic Payments | 5 |
Contingencies - Summary of Cumu
Contingencies - Summary of Cumulative Trauma Product Liability Claims Activity (Details) - LegalMatter | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Lawsuit | ||
Loss Contingency, Quantities [Roll Forward] | ||
Open lawsuits, beginning of period | 1,420 | 1,794 |
New lawsuits | 189 | 398 |
Settled and dismissed lawsuits | (139) | (772) |
Open lawsuits, end of period | 1,470 | |
Damages from Product Defects | ||
Loss Contingency, Quantities [Roll Forward] | ||
Open lawsuits, beginning of period | 2,242 | 3,023 |
New lawsuits | 258 | 455 |
Settled and dismissed lawsuits | (155) | (1,236) |
Open lawsuits, end of period | 2,345 |
Contingencies - Summary of Insu
Contingencies - Summary of Insurance Receivable Balances and Activity Related to Cumulative Trauma Product Liability Losses (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward] | ||
Balance beginning of period | $ 134.7 | $ 159.9 |
Additions | 1 | 94.6 |
Collections, settlements converted to notes receivable and other adjustments | (10) | $ (119.8) |
Balance end of period | $ 125.7 |
Contingencies - Schedule of Not
Contingencies - Schedule of Notes Receivable Balances from Insurance Companies (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Movement in Loss Contingency Receivable, Increase (Decrease) [Roll Forward] | ||
Balance beginning of period | $ 76.9 | $ 67.3 |
Additions | 0.8 | 35.1 |
Collections | (13.9) | $ (25.5) |
Balance end of period | $ 63.8 |
Contingencies - Schedule of Pr
Contingencies - Schedule of Product Warranty Liability (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | ||
Beginning warranty reserve | $ 14,753 | $ 11,821 |
Warranty payments | (315) | (550) |
Warranty claims | 1,217 | 2,116 |
Provision for product warranties | (392) | (1,366) |
Ending warranty reserve | $ 15,263 | $ 14,753 |