Welcome to the MSA Fourth Quarter Earnings Conference Call. My name is Shannon, and I will be your operator for today’s call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Mr. Ken Krause. You may begin sir.

Thank you, Shannon. Good morning, everyone, and welcome to our fourth quarter and full year earnings conference call for 2013. I am Ken Krause, Executive Director of Global Finance and joining me on the call this morning are Bill Lambert, President and Chief Executive Officer; Stacy McMahan, Senior Vice President and Chief Financial Officer; Ron Herring, President of MSA Europe; Kerry Bove, President of MSA International; and Nish Vartanian, President of MSA North America. Our fourth quarter press release was issued this morning at 8:30 and is available on our website at www.msasafety.com. This morning, Bill Lambert will provide his commentary on our quarter. Stacy will then review our financials and then Bill will conclude with his closing comments. After that we will open up the call for your questions. Before we begin, I need to remind everyone that the matters discussed on this call, excluding historical information, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including without limitation, all projections and anticipated levels of future performance, involve risks, uncertainties, and other factors that may cause our actual results to differ materially from those discussed here. These risks, uncertainties, and other factors are detailed from time to time in our filings with the Securities and Exchange Commission, including our most recent Form 10-Q, which was filed on October 23, 2013. You're strongly urged to review all such filings for a more detailed discussion of such risks. Our SEC filings can be obtained at no charge at www.sec.gov, our own website, and many other commercial sites. In addition, we have included certain non-GAAP financial measures as part of our discussion today. These non-GAAP financial measures should not be considered replacements for GAAP results. Reconciliations to the most directly comparable GAAP measures are included in our press release and on the Investor Relations section of our website. And with that, let me introduce MSA’s President and Chief Executive Officer, Bill Lambert.

Thank you, Ken, and good morning, everyone. As always, I want to begin by saying thank you for joining us today on this conference call and for your continued interest in MSA. Presumably all of you have seen our fourth quarter press release and have our financial figures with all comparisons corresponding to the equivalent period in 2012, as well as a new statement reconciling GAAP to non-GAAP earnings. I’ll begin this morning by reviewing the highlights of our fourth quarter results, and I will provide a regulatory update regarding the U.S. fire service market. I also will share with you my views on the current business environment and how it’s likely to affect us as we move further into 2014. After that, I will turn the call over to Stacy for a review of our actual results, and then we’ll open it up for your questions. Let me first say that I’m pleased to report today’s record fourth quarter results. I’m also pleased by our full year adjusted results which demonstrate solid performance by the MSA team in executing our strategy. Despite headwinds caused by regulatory and product approval delays and uneven business conditions throughout much of the year, I’m encouraged by our strong finish to 2013. We continue to execute our corporate strategy that is helping drive higher levels of shareholder value as indicated by many of our key metrics for success. For example we continued to see solid performance in our 5 core product groups throughout emerging and developed markets of the world. We also continued to see strong results from our new product development efforts. And lastly, we continue to closely manage our manufacturing and SG&A costs. Stacy and I will provide you with specifics on each of these in our comments. Furthermore, our ongoing efforts…

Thank you, Bill, and good morning. I am pleased to share further insight into our fourth quarter financial performance. Additional information will be available to you when we file our Form 10-K with the Securities and Exchange Commission later this month. As Bill mentioned, and as we disclosed in our press release earlier today, we are taking active steps to sell our South African distribution business and its Zambian operations and expect to divest this business in 2014. Accordingly we have reclassified the related financial results to discontinued operations. Revenues from these businesses were $12 million dollars in the fourth quarter of 2013 and $53 million for the full year, of which over 94% of the revenue was in non-core product groups. Related earnings per share were $0.01 for the fourth quarter and $0.06 for the full year, as Bill mentioned. And as you might expect dealing primarily in non-core products produces a significantly lower level of gross profit margin. In 2013, reported gross margin from these discontinued operations was only 21.8%, which has been certainly dilutive as continuing operations' gross profit was 44.7%. Including the $12 million of sales associated with this non-core business unit, the quarterly sales comparable to many of your models were $304 million. Sales from continuing operations were $291 million in the quarter, growing 3% on an as-reported basis, but up 4% when you exclude the impact of weakening foreign currencies across our emerging markets. Including the $53 million of business associated with our discontinued operations for the year, full-year sales were $1.2 billion. Full year sales from continuing operations of $1.1 billion were flat compared to prior year on an as-reported basis, but increased 2% excluding the impact of weakening foreign currencies and the divestiture of our North American ballistic helmet business in the…

Thank you, Stacy. As Stacy said, we continued to push hard to execute our key initiatives and long-term goals in 2013, yielding promising results. Our ongoing commitment to driving a higher level of core product sales, controlling manufacturing and operating costs while continuing to invest in core oriented R&D activities helped us recognize solid improvements in earnings during the quarter. While SCBA-related testing and certification delays and ongoing economic uncertainty caused me to have guarded optimism heading into 2014, our results in 2013 continued to reinforce the sound success of our long-term strategy. We will continue to focus on the core competencies that guide us even in challenging times, fueling the company’s growth and enhancing long-term value for our shareholders. Thank you very much for your attention this morning. At this time, our 3 geographic presidents, Nish Vartanian, Ron Herring and Kerry Bove have joined Stacy McMahan and me and we’re happy to take any questions that you might have. Please remember that MSA does not give what is referred to as guidance and that precludes most discussion related to our expectation for future sales and earnings. Having said that we will now open the call to your questions.

[Operator Instructions] Our first question comes from Edward Marshall from Sidoti & Company.

So my first question was on the margin, and I wanted to kind of discuss that a bit. I’m looking at it from an adjusted basis. So less the restructuring, it looks like it was about 14.7% after that restructuring. I assume 90 basis points came from the divesture at least on the gross margin side. I’m assuming that just flows through. But aside from that, was it volume driven? Was there any price in there? Kind of -- can we talk to maybe that adjusted kind of margin in the quarter and what drove that performance?

Hi, Ed, it’s Stacy. Thank you for the question. Yes, certainly some of that flowed through -- the discontinued operations certainly flowed through to the margin. You also see an enhanced mix of the core products in the fourth quarter which is kind of the usual story as we improve our margins. And our best estimate at this time is somewhere between 1% and 2% is related to our pricing activities in the quarter and then we continue to have some product cost improvements.

When you mentioned pricing of say, 1% to 2%, is that on a year-over-year basis or sequential basis? Because when you look kind of Q3 to Q4, I mean there is a big difference, and I assume some of that’s volume difference in Q3 to Q4. But I’m trying to get a good look at 2014 and what you might be able to do from a margin perspective and there is an awful lot of discrepancies between Q3 and Q4.

The sequential movement between Q3 and Q4 is mostly driven by the large orders in the mix, which are typically at lower prices and lower margin.

Okay. And I’m curious now that you kind of look at this adjusted range, and I’m wondering if you'd give an update on the 15% by 2015 because you are pretty much already there?

You know we are very committed to that target. I think there is much uncertainty regarding the approvals of the next breathing apparatus for the fire service market. But we again are cautiously optimistic and we remain committed to that target given the externalities that we’re dealing with.

Okay. I’d like to take a second to discuss maybe from a strategic view on the divestiture. I understand kind of where you’re coming from the margin perspective. But Bill, I always thought it was a -- the strategy was we carry some of these large distributors with peripheral kind of inventories that ultimately will be a vehicle for us to push our core product into these regions. I am just kind of curious if there’s been a change in that strategy or have you kind of found different vehicles to market et cetera?

Yes, it’s a good question Ed. On a global basis when we look across the globe the strategy still holds. So, adjacent product lines support our sales of core product lines to most of our market verticals. South Africa in particular is a different story. In South Africa, years ago we acquired a distribution partner there called Select PPE. We acquired that company because it provided us with these opportunities to sell into the mining segment within South Africa. But our ability to actually move toward greater percent of sales from core products in those segments just never fully developed the way we thought it would. And so as we indicated in our press release and in our commentary, 94% of the sales in South Africa through Select PPE and in Zambian operations, 94% of those sales were in noncore areas, things like safety clothing and steel-toed shoes and boots and gloves. And these noncore areas are all fiercely competitive, price-driven type purchases that have inherently low gross margins. And so we just felt that that’s not what we do, and we can’t compete the way others who really do have a distribution model in their business plan, how they can compete more effectively than we. So we just thought that it would be better and that we realized the value from that business by divesting of it and investing our efforts more in the core areas. We are not in any way moving away from the South African market. In fact we’re just taking our South African business then and focusing it more on the core areas and maybe some of the adjacent product lines like fire helmets, where we in fact think we can compete very successfully.

Okay. And then finally if I look at the SCBA and you’ve given a good update in timing wise on that, I am curious has there been a decision to -- made yet by MSA as to whether or not you submit both the M7XT and the G1 for testing, or just one of those masks? Have you made a decision kind of which way you would go?

We’ve got them both in the approval process right now, Ed. Both are in the pipeline with NIOSH and with the certification agencies involved with the testing. They’re both in the pipeline.

And just to be clear, my understanding is NIOSH won’t release one mask -- all approvals will be given at the same time. Do you have any clarity as to whether that G1 is included or is it just the XT that will be included when those approvals are given?

Yes, that’s really tough for us to comment on, Ed, because we just don’t know how NIOSH is thinking in that regard changed. Last year, I think that was the thinking, that new product coming through, meeting the 2013 NFPA standard, that they would unlikely give just one manufacture approval and an edge in the marketplace that they would hold those approvals until they had at least a couple and release them at the same time. But to be honest, so much has changed over the last 3 months with NIOSH’s pronouncement in November that the CBRN testing that had been conducted by their outside contractor -- I think it just throws everything up in the air and we don’t have great clarity on what NIOSH’s plans might be in that regard, whether they would release approvals as they are made, which I tend to believe that would be the case, but they may end up holding some of those together. Our feeling here is that the M7XT would gain approval prior to the G1 gaining approval just based on the dates of our submittals for those approvals and our sense of the backlog of product approvals going through the government right now.

In years past, you’ve been the first product approved -- I think it was 2007. Do you have any kind of -- as the race for submittal, do you have any idea where you stand in line as opposed to where the other guys have submitted their products or?

I don’t Ed. I don’t have a good sense of that right now.

Our next question comes from Richard Eastman from Robert W. Baird.

Just a quick follow-up maybe before we leave the U.S. fire service marketplace. Stacy, could you just give the percentage of fourth quarter revenue in North America that came from fire service, just reported [ph]?

Percentage of North American revenue in the quarter -- like it came from fire service, from the U.S. fire service, North America fire service, sorry, was 20%.

And then industrial?

[indiscernible]

Was that like 79%?

That's exactly right.

You got it. Military was 1%. Yes.

When we talk about the fire service business, I think you said that SCBA sales were down $5 million year-over-year. My thought is that in a normalized market that business would have been up. So the -- kind of the delay caused by this regulatory delay, there is more than $5 million impact. Would that be fair on sales in North America, if you follow my train of thought?

Yes, if I understand you correctly, Rick, in that fourth quarter we definitely saw the impact as we indicated, a 22% decline in breathing apparatus sales to the U.S. fire service roughly about -- that equates to about $5 million down, if you look at the full year -- even with that low quarter -- if you look at the full year sales were up almost $6 million overall from 2012, a 7% increase. So, yes, we had a really tough fourth quarter because of the sequestration, government shutdown, then the whole CBRN issue and getting those approvals. Yes, we had a lousy fourth quarter, but we still feel very optimistic about where this market is headed, the opportunities there, when we look back at those really high growth years of 2003, 2004, 2005 and then you kind of overlap a product lifecycle here of about 10 years, then you know that this market is really entering a phase of growth. That’s what we firmly believe and that’s what we have positioned ourselves for.

Yes, now the first quarter of '14 is not going to look any better, I presume, given that we have a little stronger comparison year-over-year and we have the same trailing issues. So one would imagine the fire service in North America looks worse not better.

I don’t know if it looks worse, but it certainly doesn’t look better.

Okay, yes, that’s fair. What I just want to flip over for a minute, I got to kind of give you guys some [indiscernible] on Europe. I mean that net income number in Europe looks really good. Is that sustainable? And then can I also ask, if you look at Europe at the EBIT line, can you give us a sense of what margin sales contribute at the EBIT line and how that improved year-over-year? Just kind of take the tax rate stuff out of it?

What I can tell you is that there were certainly restructuring charges that affected that European net income line. And so, either you can back some of those out -- for the year that was close to $3 million gross.

Okay, that net income -- that’s net of tax or gross?

It’s gross.

Okay. Well, I am just trying to get at the EBIT -- has the EBIT contribution there improved meaningfully, like 100 basis points, 200, I mean how does it look relative to your corporate average?

We’ve seen modest improvement in Europe, that with large improvements coming after the full implementation of the strategy, we expect to see some partial year in 2015 and full year impacts of those in 2016. So the larger improvements are still to come but we’ve had modest improvement.

Okay, Rick, let me provide some texture there as well, and Stacy can provide the detailed numbers, I’m sure, after she has a chance to look at it. We are seeing some very good improvement, I believe, in our pre-tax operating margins coming out of Europe where we’ve commented before those were in the low single digits. Last year I’m looking at full year results and we are in the low double digits now, which is great to see. We had relatively flat sales, yet we saw about a 9% increase in EBIT margins -- excuses me, a 9% increase in pre-tax operating income. So, on that, on those flat sales increases. So the restructuring efforts that Ron Herring and his team have gone through over there, the implementations of our Europe 2.0 and 2.0x initiatives. They are all showing results, a more efficient, better aligned organization over there. And so I’m pleased by the performance that we're seeing coming out of MSA Europe.

Okay, and then just when we think about the gross profit margin we tend to look at that on a revenue basis without that lease income stuff in there. So I’m looking at the gross margin at about 44.7% for the full year on a restated basis, and that’s up like 60 basis points. So, when you look at that as the basis and then you look into 2014, we’ve got some puts and takes in terms of sales mix, I get that. But is there, I mean can we target -- or do you target, maybe a 50 to 100 basis or 100 basis point improvement in that gross margin from sales mix, growth in core products, new products. Is that fair to make that assumption that, our gross margin could end at 45.7% to make the math easy.

Rick, I’ll just -- I'm going to chime in here. Let me answer the question without answering the question, because that’s the kind of -- you’re looking for some guidance that we don’t typically give. But I know you know our strategy quite well. You know that our core areas of the business are now representing upwards of 71% of our total sales. I see that increasing. I see that improving, getting up into the 75% of our total sales range as we diminish our peripheral product sales. So just from a mix perspective of what we are, where we’re going. Our commitment to the gas detection market, both fixed gas and flame detection and portable instruments, those are some of our highest gross margin areas of the business. And then we know that SCBA is coming back and that’s also a very higher gross margin part of our business. So, I think there are good solid indications and reasons why our margins would continue to improve, but to give you an exact number of what that is and how far we can push that, especially this year. I am going to back away from that.

Okay, okay. Well, I’ll tell you what, I’ll do it for you. Just 2 more quick questions, one is we bumped into a press release on this detector tube business that you sold. Is that anything -- is that a rounding error or size wise?

Yes, I would characterize that as more of a rounding error.

Okay. And then just a last question, Stacy, could you just give the free cash flow number for the full year?

Yes, just a moment. It’s $74 million -- $74.3 million for the full year.

Okay. And you obviously exclude the dividend, correct? That’s before the dividend?

That is just cash from operations net of capital expenditures.

Our next question comes from Shivangi Tipnis from Global Hunter.

I am pretty sure you don’t have much time for my [indiscernible]. I just had one, couple of questions on Europe. So you had pretty strong margins for the quarter 4 [ph]. Do we expect to see at least similar going forward considering that 70% of the Europe is already under the 2.0 initiative? Or do you see some seasonal impacts and macro impacts [indiscernible].

Okay. I am going to repeat the question, just to be sure I heard it correctly, Shivangi. I think you’re asking if Europe’s margins -- that 70% will continue?

Yes, maybe I wasn’t too clear. So, the Europe’s [indiscernible] Q4 was quite strong with margins. So, do we expect similar kind of margins going forward considering that 70% of your entire Europe is already under this 2.0 initiative?

Yes, okay. I understand the question now. And I might invite Ron Herring to also comment. We have 70% of the revenues in Europe, are operating now under the shared SAP environment. And we actually -- the last 2 countries came in closer to the end of the year. And so you’re going to see a nice full-year impact of having consolidated distribution center and those Italy and Spain being now a part of the mix in 2014. Ron, would you add anything to that?

No, Stacy, I think you have it. I think you nailed it. The -- our expectation is we would -- well, I don't think there is anything in the overall plan here that would change the trajectory that we have going right now. So, if anything we have a pause as we implement some of the principal operating company but other than that, I think we’re pretty much steady state as far as where we are going on it.

Okay. Just one more question. I am curious to know, how do your contracts run with the international fire markets, like in terms of size, duration and pricing? Are they like short-term, annual or long-term contract?

Yes, I’ll provide a comment here, and then I’ll look to Kerry to add anything to that but each of these international cities, municipal fire departments or government -- the fire departments that we win. Those are competitively bid. In some parts of the world we have distributors that help represent our interests to those fire departments, and in other parts of the world we take that business direct ourselves. In just about all cases you would have what are multi-year contracts, over the life of the product cycle for the SCBA where we win those, not too dissimilar to what goes on here in North America or other developed markets of the world. Kerry, anything you want to add there with regard to how we compete or how we go to market in those international fire service segments?

I think you got it all, Bill.

Does that answer your question?

Yes, absolutely. Just a last question, so I know that industrial sales for Europe are a little weak, so can you comment still on what were your strongest markets and what were your weakest? I believe even Middle-East and Russia are also part of Europe?

I think as Stacy indicated in some of her commentary, what we have to consider on the quarter comparison for MSA Europe on the industrial side is that in the fourth quarter of 2012 we had a very large shipment of supplied air respirators to the Caspian Sea region in the oil and gas segment of the market. We had about a $3 million delta from one quarter to the next because we didn’t have a repeat of that large shipment to the Caspian Sea region. If you take that out, I mean if you take that comparison out of the mix, our industrial sales in Europe actually were up 2%, as Stacy had indicated. So I don’t feel like there is any kind of a problem there. In fact we sense some optimism on the industrial side in Europe. But it is important to look at it in an apples-to-apples basis and considering the fact that we had a very large order in the fourth quarter of 2012 that shipped and we only had about half of that as we look at the 2013 equivalent quarter.

The next question comes from Brian Rafn from Morgan Dempsey Capital.

Question for you on the breathing apparatus, as you guys have seen this delay, what is your sense on the order rollout once the certifications are released, is it an avalanche? And then the second part of the question is what are you doing from a manufacturer supply, are you guys building inventory on these new products or is there an issue where you might not [ph] want to build inventory because you're really not certified on it? So I’m looking for a little color there.

Yes, I think it’s somewhere in the middle of what you described, Brian. I don’t think that we expect it to be any kind of an avalanche per se of new orders. I mean, there is a lot of interest by fire departments right now as I indicated in my earlier commentary. And some of those fire departments are taking a wait and see, because they want to see what the new breathing apparatus is both from MSA and from our competitors. So we are anticipating it to be strong, but I don’t think describing it as an avalanche of orders would describe the way we expect it to go. We expect it to be strong. We expect it to be a ramp up, but not an avalanche per se. As far as what we’re doing internally from an inventory build standpoint, we are strategically building our inventory but at the end of the day we also have to be a little bit cautious to say, well, we don’t have quite an approved product just yet and approved configurations just yet. So we’re trying to be smart about what we put in the inventory in certain design configurations and do it in the right way. But let me put it in context and some of the analysts I think understand this quite well, and you might also, Brian, because you’ve been following us for a while. When you look at our SCBA sales overall for MSA, the U.S. fire service represents about 15% of total sales for North America, and it represents 7% of overall MSA sales. So just kind of put it in context, SCBA sales for the U.S. fire service are important to us. We are a market leader. But it’s not driving in this over-emphasized way the performance of MSA. We’ve got a lot of other levers that we’re pulling and we’ve got a lot of other product lines and markets that we are able to go after. And sure, I’m disappointed that we saw a decrease in SCBA sales to the U.S. fire service. But having said that, as we saw in the fourth quarter there are other parts of the business, there are other municipal fire departments in other parts of the world where we’re still able to sell product and we can keep our performance on the up and up.

Bill, is your sense that the first adopters of these new standards when they are certified are your class A1 urban not so much you volunteer fire departments, your rural?

Nish, I will turn that question over to you.

No, I really don’t see it that way. It’s across the board. So you will have volunteer departments just as you have the paid departments transitioning into the latest version SCBA. So it’s pretty well split across the...

Okay, you mentioned in one of your comments, I think, Bill, you talked about -- let's see the product here -- a PrimeX IR gas detector and a DF-8500 toxic gas for China, and I think you alluded to the fact that these were designed and built in China. Question that I have, 2 parts, is there -- with technology as a lot of manufacturers face it, there are piracy and technology transfer issues, you don’t open the paper, at any single day and China is trying to steal something else. One, how do you guys look at that piracy of technology if you’re building stuff over there? And two, if you do domestic content assembly in China, does that give you any preference in selling to Chinese fire departments or Chinese government entities?

Yes, let me answer that question in a couple of ways. Number one, there are a number of levels of security that we take to assure that our intellectual property is protected, from the processes and procedures we use in our Chinese R&D center, to things like our HR policies that allow us to have much, much lower turnover rates of our engineers than what are typical for many Chinese companies. We’re really pleased by our Chinese R&D development, how that organization has come up to speed, what they’ve done, how they live the MSA values. Having said that, we have some very specific and very tight security measures to make sure that our technology doesn’t walk down the street, so to speak. Additionally some of the most secret IP that we have, we control on a very tight way. So much of that for instance on a fixed gas and flame detection side of the business, which were the products that you’re talking about here, that IP, the heart of that IP, is held here in the U.S. And so a component or sub assembly that incorporates some that IP would then be shipped to our Chinese production facilities. And so we try to understand what’s at the heart of the intellectual property. How do we protect that the most? But then how do we also take advantage of, if you will, some of the things that we see by designing products in China for the China and Asian market. And we think that strategy that we’ve got going on over there is pretty successful, and I’m really pleased by these new products which our Chinese R&D center and manufacturing center are bringing to market for the Asian oil and gas market.

And then the second part of that is, for those products that you do develop there, does that give you any preference, sales advantage, any leverage selling into China with all of that content and assembly being sourced from China?

I’ll turn that over to Kerry. Kerry, how do you feel about that?

There is 2 parts of that question. One, it does give us a lot of advantage making the product in China. But on those products that we launched, one of those products, a version of it, a stainless steel version of it, was designed in China but it’s manufactured in the United States. Because the fact that you manufacture it outside of China also gives you a market advantage. So we can, because of our global footprint, we can take advantage of whatever way helps us in the market.

Okay, all right. You guys talked I think a little bit about mining, I think you mentioned some softness in Australia, across the world. When you've seen some of these mining disasters like Chile and that, how strong does the international mining safety, their OSHA counterbalance or offset kind of a business cycle decline maybe in mining activity? Or is really the safety issue tied really and levered to really the business sales?

Yes, I think that behind every mining disaster that you read about there are always -- there tends to be always increased regulation and safety standards that go into place. But I would say that the cyclical nature of the mining market far overshadows what we see happening when safety regs increase in some fashion. We really haven’t quite seen the impacts of safety regulations that would outweigh what you see just happening overall in the cyclicality of the mining market on a global basis.

Okay. When you talked about R&D, and it's probably an anecdotal observation -- how do you see, Bill, your pipeline for 2014 in new products versus say maybe over the last 3 to 5 years? Is it as broad, is it more niche segments, more products, less products, more high-end, more low-end -- how would you characterize 2014?

As I indicated in my commentary, I’m very excited about 2014's pipeline of new products, the SCBA we’ve talked about in each of the core areas, and I won’t be too specific here announcing our product launches. But, in each of our core areas we’ve got some really exciting products and technologies those tend to be the profitable -- more profitable areas of our business. So, and they tend to be to use your words, more of the high-end type products. I am very excited about what we have in the pipeline, what we plan to introduce here throughout the year. So, I am hoping that in this call next year, I can tell you about some of those great successes and how that’s impacted our business.

Let me ask, when you look at your global footprint you guys have been global long before global was sexy. When you look at your brick-and-mortar all over the world, where are you kind of putting capital expenditures for 2014, and how would you kind of describe maybe in broad terms, by a geographic segment kind of what your capacity utilization is. You don't have to go plant by plant. I'm just trying to get a sense as to where are bottlenecks, and where are areas where you do have some capacity?

Yes, a lot of our CapEx is not going into bricks-and-mortar. A lot of our CapEx quite honestly is going into IT systems throughout the world that coordinate -- better coordinate our financial systems, reporting systems around the world. Ron Herring in this call mentioned our principal operating model that we’re incorporating into MSA Europe. A move of our headquarters functions to Switzerland has a lot of benefits to us. That’s not a bricks-and-mortar type move that’s more along the lines of the SAP integration of all of our affiliates. We are making investments in Latin America for sure. We’ve added some capacity to parts of Latin America, because we’ve seen such strong growth down there, and we continue to forecast stronger growth even though it might be a little bit cyclical. We see a long-term trend that looks very favorable there. But it’s not about bricks-and-mortar, it’s much more about adding IT systems to MSA, so that we can more efficiently run our businesses, have greater transparency to what’s going on. We're adding tools, some CapEx to tools, some of the new products that get developed and produced around the world, but it’s not a bricks-and-mortar type build out.

Okay, and then just one final. You talked, certainly, your exit from the ballistic helmet market, what would be left in military from the 5 core areas, and kind of how do you see that playing out?

Well, as we talked about in years past, MSA is the largest producer of self-contained breathing apparatus to the U.S. Air Force. So we still support that business. We are the only, to my knowledge, provider of SCBA to the United States Air Force here and around the world. So, you have that ongoing business. We’ve got other opportunities for other product lines in niche areas, but the really big ones, gas masks going back years past, ballistic vests, ballistic helmets those days are gone.

Okay. Given the Air Force, is there any in that SCBA, is there any opportunity in mind with the Navy or the Marines?

Sure, there’s opportunity.

Sure, periodically, we have that and of course U.S. Coast Guard is also standardized on MSA SCBA.

At this time I would like to turn the call back to Mr. Ken Krause for final remarks.

Great, thank you, Shannon. Seeing that we have no more questions. That concludes this morning’s call. If you missed a portion of the conference an audio replay will be available on our website for the next 30 days as well as a transcript of the call. On behalf of our entire team here, I want to thank you again for joining us and we look forward to talking with you again soon. Have a great day.

Thank you, ladies and gentlemen. This concludes today’s conference. Thank you participating. You may now disconnect.