MINE SAFETY APPLIANCES CO, 10-K, 1995-03-27

MINE SAFETY APPLIANCES CO
10-K, 1995-03-27
ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES

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<PAGE>

Securities and Exchange Commission
Washington, D.C. 20549

FORM 10-K
ANNUAL REPORT

Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the fiscal year ended
December 31, 1994

Commission file number 0-2504

MINE SAFETY APPLIANCES COMPANY
A Pennsylvania Corporation
IRS Employer Identification No. 25-0668780
121 Gamma Drive
RIDC Industrial Park
O'Hara Township
Pittsburgh, Pennsylvania 15238
Telephone 412/967-3000

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, no par value
<PAGE>

(COVER PAGE)

SECURITIES AND EXCHANGE COMMISSION
----------------------------------
Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1994 Commission File No. 0-2504

MINE SAFETY APPLIANCES COMPANY
-------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

Pennsylvania 25-0668780
------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)

121 Gamma Drive
RIDC Industrial Park
O'Hara Township
Pittsburgh, Pennsylvania 15238
----------------------------------------- --------------------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: 412/967-3000
----------------------------------------------------------------

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, no par value
--------------------------------------------------------------------------------
(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.

Yes X No
----- -----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in the definitive proxy statement incorporated
by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
[ ]

As of February 17, 1995, there were outstanding 5,816,016 shares of common
stock, no par value.

The aggregate market value of voting stock held by non-affiliates as of
February 17, 1995 was $158,185,000. .

1
<PAGE>

(COVER PAGE)

DOCUMENTS INCORPORATED BY REFERENCE

The following documents have been incorporated by reference:

FORM 10-K
DOCUMENT PART NUMBER
-------- -----------

(1) Annual Report to Shareholders
for the year ended
December 31, 1994 I, II, IV

(2) Proxy Statement filed
pursuant to Regulation 14A
in connection with the registrant's
Annual Meeting of Shareholders to
be held on April 26, 1995 III

2
<PAGE>

PART I

Item 1. Business
-----------------

Products and Markets:
--------------------

The primary business of the registrant and its affiliated companies is the
manufacture and sale of products designed to protect the safety and health of
workers throughout the world.

Principal products include respiratory protective equipment that is air-
purifying, air-supplied and self-contained in design. The registrant also
produces instruments that monitor and analyze workplace environments and control
industrial processes. Personal protective products include head, eye and face,
body and hearing protectors. For the mining industry, the registrant provides
mine lighting, rockdusting equipment, fire-fighting foam and foam application
equipment. Health-related products include emergency care items and hospital
instruments.

Many of these products are sold under the registered trademark "MSA", and
have wide application for workers in industries that include manufacturing, fire
service, public utilities, mining, chemicals, petroleum, construction, pulp and
paper processing, transportation, government, automotive, aerospace, asbestos
abatement, and hazardous materials clean-up.

Other products manufactured and sold, which do not fall within the category
of safety and health equipment, include boron-based and other specialty
chemicals.

The registrant and its affiliated companies are in competition with many
large and small enterprises. In the opinion of management, the registrant is a
leader in the manufacture of safety and health equipment.

3
<PAGE>

Orders, except under contracts with the Department of Defense and with
international governments, are generally filled promptly after receipt and the
production period for special items is usually less than one year. The backlog
of orders under contracts with the Department of Defense and certain
international governments is summarized as follows:

December 31
-------------------------
1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
(In thousands)
-------------------------
Department of Defense $36,200 $54,900 $65,600
International Governments 8,800 12,500 12,500

</TABLE>

Approximately $8,900,000 under contracts with the Department of Defense and
$3,800,000 with international governments are expected to be shipped after
December 31, 1995.

Further information with respect to the registrant's products, operations
in different geographic areas, equity in earnings and assets of international
affiliated companies, and significant customers is reported at Note 6 of Notes
to Consolidated Financial Statements contained in the registrant's Annual Report
to Shareholders for the year ended December 31, 1994, incorporated herein by
reference.

4
<PAGE>

Research:
--------

The registrant and its affiliated companies engage in applied research with
a view to developing new products and new applications for existing products.
Most of its products are designed and manufactured to meet currently applicable
performance and test standards published by groups such as ANSI (American
National Standards Institute), MSHA (Mine Safety & Health Administration), NIOSH
(National Institute for Occupational Safety and Health), UL (Underwriters'
Laboratories), SEI (Safety Equipment Institute) and FM (Factory Mutual). The
registrant also from time to time engages in research projects for others such
as the Bureau of Mines and the Department of Defense or its prime contractors.
Registrant-sponsored research and development costs were $20,575,000 in 1994,
$21,000,000 in 1993, and $20,938,000 in 1992.

In the aggregate, patents have represented an important element in building
up the business of the registrant and its affiliates, but in the opinion of
management no one patent or group of patents is of material significance to the
business as presently conducted.

General:
-------

The company was founded in 1914 and is headquartered in Pittsburgh,
Pennsylvania. As of December 31, 1994, the registrant and its affiliated
companies had approximately 4,500 employees, of which 2,000 were employed by
international affiliates. None of the U.S. employees are subject to the
provisions of a collective bargaining agreement.

In the United States and in those countries in which the registrant has
affiliates, its products are sold primarily by its own salespersons,
supplemented in the case of certain markets by independent distributors and/or
manufacturers' representatives. In international countries where the registrant
has no affiliate, products are sold primarily through independent distributors
located in those countries.

5
<PAGE>

The registrant is cognizant of environmental responsibilities and has taken
affirmative action regarding this responsibility. There are no current or
expected legal proceedings or expenditures with respect to environmental matters
which would materially affect the operations of the registrant and its
affiliates. Generally speaking, the operations of the registrant and its
affiliates are such that it is possible to maintain sufficient inventories of
raw materials and component parts on the manufacturing premises. Equipment and
machinery for processing chemicals and rubber, plastic injection molding
equipment, molds, metal cutting, stamping and working equipment, assembly
fixtures and similar items are regularly acquired, repaired or replaced in the
ordinary course of business at prevailing market prices as necessary.

As of the end of 1992, the registrant decided to discontinue the operation
of Transfer-Metallisierte Produkte GmbH (TMP), a joint venture in Germany to
produce metallized paper. This venture, unrelated to the registrant's safety
products, had been a financial drain on the registrant. Operating activities
ceased during 1993; the registrant continues to dispose of its assets and settle
its liabilities, and continues to believe that this action will not have a
significant effect on the registrant's financial condition. In the third
quarter of 1993, the registrant acquired HAZCO Services, a U.S. based
distribution and rental supplier serving the hazardous materials/environmental
market. No material changes in the registrant's commercial operations are
expected to occur during 1995. Sales of defense products, which continue to be
an important market segment, increased in 1994. Incoming orders were
significantly less than shipments in 1994, and lower than 1993 incoming orders.
In January 1995 the registrant was awarded an additional contract for gas masks
totalling $15,200,000, for which deliveries are scheduled over a one year period
from October 1995. Further information about the registrant's business is
included in Discussion and Analysis of Financial Condition and Results of
Operations at pages 10 to 12 of the Annual Report to Shareholders, incorporated
herein by reference.

(Item 1 continued at page 7)

6
<PAGE>

Executive Officers and Significant Employees:
--------------------------------------------

<TABLE>
<CAPTION>
All Positions and Offices
Name Age Presently Held
---- --- -------------------------
<S> <C> <C>
J. T. Ryan III 51 President, Chairman and
Chief Executive Officer

T. B. Hotopp 53 Senior Vice President

J. E. Herald 54 Vice President - Finance
(Chief Financial Officer)

W. E. Christen 50 Vice President

J. W. Joy 62 Vice President

W. B. Miller, Jr. 61 Vice President

G. W. Steggles 60 Vice President

F. Tepper 60 Vice President

D. H. Cuozzo 61 Secretary

D. L. Zeitler 46 Treasurer

B. V. DeMaria 47 Director of Human Resources

J. R. Heggestad 58 Director of Operations, Safety Products
</TABLE>

All the executive officers and significant employees have been employed by
the registrant since prior to January 1, 1990 and have held their present
positions since prior to that date except as follows:

(a) Mr. Ryan III was elected Chief Executive Officer and Chairman of the
Board on August 28, 1991, effective from October 1, 1991. On April 25,
1990 he was elected President. He previously was the Executive Vice
President.

(b) Mr. Hotopp was employed by the registrant on July 29, 1991 and elected
Senior Vice President and General Manager, Safety Products. From prior
to January 1, 1990 until he joined the registrant, Mr. Hotopp was
Senior Vice President, Sales and Marketing and later President of
Kingston Warren Corporation, a manufacturer of rubber-metal composites
for automotive, computer and material handling industries.

7
<PAGE>

(c) Mr. Christen was elected a corporate Vice President on October 31,
1991. He was previously General Director, Auergesellschaft, an
affiliate of the registrant, and Vice President and Managing Director
of MSA Europe, a division of the registrant.

(d) Mr. Joy was elected Vice President on October 31, 1991. He was
previously Director, Sales and Market Development.

(e) Mr. Steggles was employed by the registrant on May 4, 1992 and elected
Vice President. From prior to January 1, 1990 until he joined the
registrant, Mr. Steggles was Vice President of International Marketing
and Sales with the BMY Division of Harsco Corp., a manufacturer of
tracked and wheeled vehicles.

(f) Mr. DeMaria was appointed Director, Human Resources on September 1,
1994. He previously was Manager, Employee Benefits.

8
<PAGE>

The primary responsibilities of these officers and significant employees
follows:

Individual Responsibilities
---------- ----------------
Mr. Hotopp Product planning and engineering,
manufacturing development and sales of safety
products in the U.S.

Mr. Christen European operations

Mr. Joy Sales and marketing of safety products in the
U.S.

Mr. Miller Product planning and engineering for safety
products in the U.S.

Mr. Steggles International operations outside the U.S. and
Europe.

Mr. Tepper Product planning and engineering,
manufacturing development and sales of instrument
and battery products in the U.S.

Mr. Cuozzo General Counsel and corporate taxes

Mr. Zeitler Cash and risk insurance management

Mr. DeMaria Personnel, benefits, training

Mr. Heggestad Manufacturing operations, safety products in
the U.S.

Item 2. Properties
------------------
World Headquarters:
------------------

The registrant's executive offices are located at 121 Gamma Drive, RIDC
Industrial Park, O'Hara Township, Pittsburgh, Pennsylvania 15238. This facility
contains approximately 138,000 sq. ft.

Production and Research Facilities:
----------------------------------

The registrant's principal U.S. manufacturing and research facilities are
located in the Greater Pittsburgh area in buildings containing approximately
1,104,000 square feet. Other U.S. manufacturing and research facilities of the
registrant are located in Esmond, Rhode Island (186,000 sq. ft.), Jacksonville,
North Carolina (107,000 sq. ft.), Lyons, Colorado (10,000 sq. ft.), Sparks,
Maryland (37,000 sq. ft.), and Dayton, Ohio (23,000 sq. ft.).

9
<PAGE>

Manufacturing facilities of international affiliates of the registrant are
located in major cities in Australia, Brazil, Canada, France, Germany, Italy,
Japan, Mexico, Peru, Scotland, Spain, and Sweden. The most significant are
located in Germany (approximately 430,000 sq. ft., excluding 127,000 sq. ft.
leased to others), and in Glasgow, Scotland (approximately 141,000 sq. ft.);
research activities are also conducted at these facilities.

Virtually all of these buildings are owned by the registrant and its
affiliates and are constructed of granite, brick, concrete block, steel or other
fire-resistant materials. The German facility is owned subject to encumbrances
securing indebtedness in the aggregate amount of $5,587,000 as of December 31,
1994.

Sales Offices and Warehouses:
----------------------------

The registrant and its U.S. affiliates own seven warehouses and lease 13
other distribution warehouses with aggregate floor space of approximately
279,000 sq. ft. in or near principal cities in 13 states in the United States.
Leases expire at various dates through 1998. Sales offices and distribution
warehouses are owned or leased in or near principal cities in 22 other countries
in which the registrant's affiliates are located.

Item 3. Legal Proceedings
--------------------------
Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders
------------------------------------------------------------
No matters were submitted to a vote of security holders during fourth
quarter 1994.

10
<PAGE>

PART II

Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters

Item 6. Selected Financial Data

Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations

Item 8. Financial Statements and Supplementary Data
--------------------------------------------------------------------------------

Incorporated by reference herein pursuant to Rule 12b - 23 are

Item 5 - "Common Stock" appearing at page 12

Item 6 - "Five-Year Summary of Selected Financial Data" appearing at page
23

Item 7 - "Discussion and Analysis of Financial Condition and Results of
Operations" appearing at pages 10 to 12

Item 8 - "Financial Statements and Notes to Consolidated Financial
Statements" appearing at pages 13 to 22

of the Annual Report to Shareholders for the year ended December 31, 1994. Said
pages of the Annual Report are submitted with this report and pursuant to Item
601(b)(13) of Regulation S-K shall be deemed filed with the Commission only to
the extent that material contained therein is expressly incorporated by
reference in Items 1, 5, 6, 7, 8 and 14 (a) hereof.

Item 9. Changes in and Disagreements with Accountants on Accounting and
------------------------------------------------------------------------
Financial Disclosure
--------------------
Not applicable.

11
<PAGE>

PART III

Item 10. Directors and Executive Officers of the Registrant

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and Management

Item 13. Certain Relationships and Related Transactions
-------------------------------------------------------------------------------

Incorporated by reference herein pursuant to Rule 12b - 23 are
(1) "Election of Directors" appearing at pages 1 to 3, (2) "Other Information
Concerning Directors and Officers" appearing at pages 4 to 9 (except as excluded
below), and (3) "Security Ownership" appearing at pages 10 to 12 (except as
excluded below) of the Proxy Statement filed pursuant to Regulation 14A in
connection with the registrant's Annual Meeting of Shareholders to be held on
April 26, 1995. The information appearing in such Proxy Statement under the
captions "Compensation Committee Report on Executive Compensation" and
"Comparison of Five-Year Cumulative Total Return" is not incorporated herein.

12
<PAGE>

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
--------------------------------------------------------------------------

(a) 1 and 2. Financial Statements

The following information appearing on pages 13 to 22
inclusive in the Annual Report to Shareholders of the registrant for the year
ended December 31, 1994, is incorporated herein by reference pursuant to Rule
12b-23.

Report of Independent Accountants

Consolidated Balance Sheet - December 31, 1994 and 1993

Consolidated Statement of Income - three years ended December 31, 1994

Consolidated Statement of Earnings Retained in the Business - three years
ended December 31, 1994

Consolidated Statement of Cash Flows - three years ended December 31, 1994

Notes to Consolidated Financial Statements

Said pages of the Annual Report are submitted with this report and, pursuant to
Item 601(b)(13) of Regulation S-K shall be deemed to be filed with the
Commission only to the extent that material contained therein is expressly
incorporated by reference in Items 1, 5, 6, 7, 8 and 14 (a)(1) and (2) hereof.

The following additional financial information for the three years ended
December 31, 1994 is filed with the report and should be read in conjunction
with the above financial statements:

Report of Independent Accountants on Financial Statement Schedule

Schedule II - Valuation and Qualifying Accounts

All other schedules are omitted because they are not applicable, not material or
the required information is shown in the financial statements listed above.

13
<PAGE>

(a) 3. Exhibits
(3)(i) Restated Articles of Incorporation as amended to April 27,
1989, filed in Form 10-Q on August 5, 1994, are incorporated
herein by reference.

(3)(ii) By-laws of the registrant, as amended to August 29, 1990,
filed in Form 10-Q on November 9, 1990, are incorporated
herein by reference.

(10)(a) * 1987 Management Share Incentive Plan, filed in Form 10-K on
March 25, 1994, is incorporated herein by reference.

(10)(b) * 1990 Non-Employee Directors' Stock Option Plan, as amended
to April 27, 1994, filed in Form 10-Q on August 5, 1994, is
incorporated herein by reference.

(10)(c) * Executive Insurance Program, filed in Form 10-Q on August 5,
1994, is incorporated herein by reference.

(10)(d) * Extension of Consulting Agreement for the period January 1,
1992 through December 31, 1996, and June 30, 1977 Consulting
Agreement with John T. Ryan, Jr. filed in Form 10-K on March
27, 1992, is incorporated herein by reference.

(10)(e) * December 29, 1993 Consulting agreement with Leo N. Short,
Jr., filed in Form 10-K on March 25, 1994, is incorporated
herein by reference.

(10)(f) * Board of Directors April 24, 1984 Resolution providing for
payment by the Company to officers the difference between
amounts payable under terms of the Company's
Non-Contributory Pension Plan and the benefit limitations of
Section 415 of the Internal Revenue Code, filed in Form 10-K
on March 28, 1990 is incorporated herein by reference.

* The exhibits marked by an asterisk are management contracts or compensatory
plans or arrangements.

14
<PAGE>

(a) 3. Exhibits (continued)

(13) Annual Report to Shareholders for year ended December 31, 1994

(21) Affiliates of the registrant

(23) Consent of Price Waterhouse LLP, independent accountants

(27) Financial Data Schedule (filed in electronic format only)

The registrant agrees to furnish to the Commission upon request copies
of all instruments with respect to long-term debt referred to in Note
12 of the Notes to Consolidated Financial Statements filed as part of
Exhibit 13 to this annual report which have not been previously filed
or are not filed herewith.

(b) Reports on Form 8-K

No reports on Form 8-K were filed during the last quarter of the
year ended December 31, 1994.

15
<PAGE>

SIGNATURES
----------

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

MINE SAFETY APPLIANCES COMPANY

March 27, 1995 By /s/ John T. Ryan III
-------------------- --------------------------------
(Date) John T. Ryan III
President, Chairman of the Board
and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

Signature Title Date
----------------- --------- --------

/s/ John T. Ryan III Director; President, March 27, 1995
--------------------------- Chairman of the Board
John T. Ryan III and Chief Executive Officer

/s/ James E. Herald Vice President--Finance; March 27, 1995
--------------------------- Principal Financial and
James E. Herald Accounting Officer

/s/ Joseph L. Calihan Director March 27, 1995
---------------------------
Joseph L. Calihan

/s/ Calvin A. Campbell, Jr. Director March 27, 1995
---------------------------
Calvin A. Campbell, Jr.

/s/ G. Donald Gerlach Director March 27, 1995
---------------------------
G. Donald Gerlach

/s/ Helen Lee Henderson Director March 27, 1995
---------------------------
Helen Lee Henderson

/s/ John T. Ryan, Jr. Director March 27, 1995
---------------------------
John T. Ryan, Jr.

/s/ Leo N. Short, Jr. Director March 27, 1995
---------------------------
Leo N. Short, Jr.

<PAGE>

Report of Independent Accountants
on Financial Statement Schedule

To the Board of Directors of
Mine Safety Appliances Company

Our audits of the consolidated financial statements referred to in our report
dated February 17, 1995, appearing on page 13 of the 1994 Annual Report to
Shareholders of Mine Safety Appliances Company (which report and consolidated
financial statements are incorporated by reference in this Annual Report
on Form 10-K), also included an audit of the Financial Statement Schedule
listed in Item 14(a) of this Form 10-K. In our opinion, this Financial Statement
Schedule presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statements.

Price Waterhouse LLP

Pittsburgh, Pennsylvania
February 17, 1995

F-1
<PAGE>

SCHEDULE II

MINE SAFETY APPLIANCES COMPANY AND AFFILIATES
VALUATION AND QUALIFYING ACCOUNTS
THREE YEARS ENDED DECEMBER 31, 1994
(IN THOUSANDS)

<TABLE>
<CAPTION>
1994 1993 1992
------ ------ ------
<S> <C> <C> <C>
Allowance for doubtful accounts:

Balance at beginning of year $2,516 $2,453 $1,601
Additions-
Charged to costs and expenses 741 644 1,383
Deductions from reserves (1) 1,155 581 531
------ ------ ------
Balance at end of year $2,102 $2,516 $2,453
====== ====== ======
</TABLE>

(1) Bad debts written off, net of recoveries.

F-2

<PAGE>

EXHIBIT 13

Discussion and Analysis of
Financial Condition and Results of Operations
--------------------------------------------------------------------------------

Sales and Earnings

Sales were $459,607,000 in 1994, a 7% increase over the prior year's
$429,220,000. Sales in 1992 were $502,366,000. Income from continuing
operations increased 45% in 1994 to $15,329,000 from $10,555,000 in 1993, which
was 37% lower than 1992's income of $16,703,000. Income from continuing
operations, per share of common stock, was $2.58 in 1994, $1.73 in 1993, and
$2.67 in 1992.

The increased sales in 1994 has occurred primarily in domestic commercial
product sales, with the main factor being the inclusion of HAZCO Services, Inc.,
acquired in the last half of 1993. Equipment rentals to the hazardous
materials/environmental market by HAZCO have grown significantly since the
acquisition. Domestic commercial sales of instruments and specialty chemicals
have continued to grow, while the U.S. market for safety products continued to
be flat in 1994. U.S. commercial sales in 1994 were about 9% higher than in
1993, which was minimally higher than 1992.

Sales by international operations, stated in U.S. dollars, increased 4 1/2% in
1994, after having decreased 10 1/2% in 1993 and 3 1/2% in 1992. Notable
market growth occurred in Australia, Brazil, Chile and Japan, and economic
conditions stabilized in Europe. The prior years' decreases were due primarily
to currency exchange rate changes and the widespread economic recession,
particularly in Europe.

Shipments of defense products to U.S. government agencies in 1994 were
$46,478,000, a 7 1/2% increase over 1993 shipments of $43,234,000. Shipments in
1993 were 57% lower than 1992 shipments of $99,991,000. Defense product sales
of gas masks and parts were especially high in early 1992 and late 1991 due to
orders relating to the Middle East conflict. These sales represent 10% of
consolidated sales in 1994 and 1993, as compared to 20% in 1992. New contracts
received in 1994 were $27,832,000 as compared to $32,558,000 in 1993. The 1994
year-end backlog was $36,243,000, a 34% decrease from the 1993 year-end backlog
of $54,889,000. In January 1995 the company was awarded a new contract for
masks totalling $15,200,000. Deliveries are scheduled over a one year period
from October 1995.

The 1994 gross profit rate was 37.6%, as compared to 36.3% in 1993 and 34.8%
in 1992. Historically and currently, commercial sales carry much greater
margins than military sales; thus the change of sales mix has contributed to
higher profit margins. Furthermore, military sales profit rates dropped
significantly in 1992, reflecting the impacts of development and start-up costs
for new model designs and the results of competitive bidding pressures. The
1994 gross profit has also been favorably affected by a LIFO credit of
$6,923,000 arising from liquidations of LIFO inventory values calculated at
lower costs incurred in prior years, and adversely affected by charges of
$1,940,000 arising from inventory costing adjustments. The completion of some
government contracts and ongoing process reengineering has resulted in
significant reductions in U.S. manufacturing inventories.

Depreciation, selling and administrative expenses were 31% of sales in 1994,
as compared to 32% in 1993 and 29% in 1992. Charges in 1994 included $1,650,000

10
<PAGE>

--------------------------------------------------------------------------------
applicable to the implementation of new cost and manufacturing control systems
and the creation of a customer service center. Additionally, 1994 operations
has absorbed charges of $3,086,000 for facilities consolidations and
restructuring, as compared to credits of $223,000 in 1993 and charges of
$5,500,000 in 1992. The 1994 charges relate primarily to completing the
disposition of assets of the former Catalyst Research Division, which was closed
in 1992. The company also consolidated certain other U.S. manufacturing
operations in 1992.

Net income in 1994 was $15,329,000 or $2.58 per share of common stock,
compared to 1993 net income of $10,555,000 or $1.73 per share and $2,672,000 or
$.42 per share in 1992 (includes special charges for accounting changes and
discontinued operations). The above-mentioned LIFO credit, inventory cost
adjustments, systems and restructuring costs in aggregate have had minimal
effect on net income and earnings per share in 1994 and 1993. Restructuring
costs in 1992 were an after-tax charge of $3,163,000 or $.51 per share. The
accounting changes in 1992 resulted in an after-tax cumulative effect charge, as
of January 1, 1992, of $8,964,000 or $1.44 per share of common stock. SFAS No.
106-"Employers' Accounting for Postretirement Benefits Other Than Pensions" was
implemented on an immediate recognition basis rather than spreading the
accumulated obligation over 20 years. This one-time transition effect decreased
net income $8,672,000 ($1.39 per share). SFAS No. 112-"Employers' Accounting
for Postemployment Benefits," pertaining to benefits such as workers'
compensation and other disability expenses, reduced earnings $2,440,000 ($.39
per share). SFAS No. 109-"Accounting for Income Taxes" increased earnings
$2,148,000 ($.34 per share). This Standard requires that deferred tax balances
be stated at tax rates expected to be in effect when taxes are actually paid or
recovered, and may have a more volatile effect on future earnings than the
previous method which provided deferred taxes at tax rates prevailing during the
periods that timing differences occurred. Although these three new Standards
significantly reduced 1992 net income, they did not have any cash flow impact.

The company decided, as of the end of 1992, to discontinue the operation of
Transfer-Metallisierte Produkte GmbH (TMP), a joint venture in Germany to
produce metallized paper. This venture, unrelated to the company's safety
products, had been a financial drain on the company. Operating activities
ceased during 1993; the company continues to dispose of its assets and settle
its liabilities. TMP's cumulative losses since inception in the company's
consolidated results, adjusted for the after-tax effects of intercompany
transactions, aggregate approximately $10.9 million. The company continues to
believe that any losses that may be incurred from the disposition of TMP will
not affect net income or cash flows after deducting the aforementioned
accumulated losses already recognized and the tax benefits associated with any
write-off.

The after-tax effects of foreign currency exchange losses charged to income in
1994 reduced net income $3,840,000 or $.65 per share, as compared to $3,204,000
or $.53 per share in 1993 and $5,022,000 or $.81 per

11
<PAGE>

Discussion and Analysis of
Financial Condition and Results of Operations continued
--------------------------------------------------------------------------------
share in 1992. The more significant losses resulted from the currency
valuation changes that occurred in Brazil in each of the three years, and the
devaluation of the Mexican peso in 1994. The effective income tax rates, for
which further information is included at note 8, were 40.6% in 1994, 42.1% in
1993, and 39.9% in 1992.

Financial Condition and Funds Flow

Cash and cash equivalents increased $7,986,000 during 1994. Accounts
receivable of $88,698,000 at December 31, 1994 includes $8,158,000 from the
sale of fixed assets. Trade receivables expressed in number of days' sales
outstanding were 64 days, as compared to 61 days in 1993. Inventories
decreased $4,488,000 to $76,966,000 at December 31, 1994. Inventory measured
against sales turned 6.0 times in 1994 and 5.3 times in 1993. Inventories
decreased in the domestic companies but increased in the international
companies, primarily because of currency exchange rate changes. The working
capital ratio was 3.4 and 3.7 to 1 at years-end 1994 and 1993, respectively.

Short-term debts of international affiliates are payable in local currencies,
which is in keeping with the company's policy of minimizing foreign currency
exposures by offsetting foreign currency assets with foreign currency debt. The
average interest rate on these loans, which includes the effects of borrowing in
certain countries where local inflation has resulted in high interest rates, was
approximately 19%.

Long-term debt and the current portion thereof decreased $9,399,000 to
$21,583,000, a conservative 8% of total capital. Total capital is defined as
long-term debt plus current portion of long-term debt and shareholders' equity.

Capital expenditures of $22,614,000 in 1994 represent an increase of $972,000
from 1993 expenditures of $21,642,000. The company has continued its program of
plant and equipment modernization to increase efficiency of existing
manufacturing and distribution facilities. For the most part, capital
expenditures were financed internally through retained earnings. In the past
five years, approximately $111 million has been spent on new plants, equipment
and distribution facilities.

Dividends paid on the common stock during 1994 (the 77th consecutive year of a
dividend payment) were $.94 per share, up from the $.92 per share paid during
1993 and $.89 per share paid in 1992. The current quarterly cash dividend is
$.25 per share on common stock. Cash dividends have been paid at a conservative
percentage of income which has permitted the company to finance its growth
almost exclusively through retained earnings. Common shares are repurchased
from time-to-time in keeping with the company's policy of buying back a limited
number of its shares. As of December 31, 1994, an additional 180,071 shares may
be repurchased under current authorizations.

Credit available at year-end with banks was the U.S. dollar equivalent of
$10,686,000. The company's financial position remains strong and should provide
adequate capital resources for growth.

Cumulative Currency Translation Adjustment

The year-end position of the U.S. dollar relative to foreign currencies resulted
in a translation gain of $5,050,000 being credited to the cumulative translation
adjustments shareholders equity account in 1994, as compared to losses of
$5,400,000 in 1993 and $4,736,000 in 1992. Significant translation gains
occurred in Australia, Britain, and Germany in 1994, while significant losses
occurred in Germany and Italy in 1993, and in Australia, Britain, Canada, and
Italy in 1992.

Common Stock

At December 31, 1994, there were 5,815,672 shares of common stock outstanding.
There were approximately 450 identifiable common stockholders as of November 18,
1994, a recent date for dividends. The common stock last-sale price and up-to-
the-minute volume information (Symbol: MNES) is included in the National
Association of Security Dealers, Inc., (NASDAQ) National Market System. The
quarterly high and low price quotations for common shares follow:

1994 1993
----------------- --------------
Quarter High Low High Low
------- ------ ------ ----- -----
<S> <C> <C> <C> <C>
First $44 1/2 $41 1/2 $46 $39 3/4
Second 42 1/2 39 1/2 49 44
Third 46 1/2 40 3/4 45 3/4 41 1/4
Fourth 45 3/4 42 3/4 45 41 3/4

</TABLE>

Common stock quarterly cash dividend information is as follows:

<TABLE>
<CAPTION>
Amount Record Payment
Quarter Per Share Date Date
------- ---------- -------- ---------
<S> <C> <C> <C>
1994
-----
First $ .23 Feb. 18, 1994 March 10, 1994
Second .23 May 13, 1994 June 10, 1994
Third .23 Aug. 12, 1994 Sept. 10, 1994
Fourth .25 Nov. 18, 1994 Dec. 10, 1994
-----
Total .94
-----
1993
-----

First $ .23 Feb. 19, 1993 March 10, 1993
Second .23 May 14, 1993 June 10, 1993
Third .23 Aug. 13, 1993 Sept. 10, 1993
Fourth .23 Nov. 19, 1993 Dec. 10, 1993
-----
Total .92
-----
</TABLE>

The company's stock transfer agent is Norwest Bank Minnesota, N.A., 161 North
Concord Exchange, P.O. Box 738, South St. Paul, MN 55075-0738.

12
<PAGE>

Report of Management

Mine Safety Appliances Company's consolidated financial statements and related
notes that appear in this Annual Report to Shareholders were prepared by the
company in accordance with generally accepted accounting principles. In
fulfilling its responsibilities for the integrity and objectivity of the
consolidated financial statements, management maintains accounting procedures
designed to provide accurate books, records and accounts which reasonably and
fairly reflect the transactions of the company in a consistent manner on the
accrual basis of accounting.

Company personnel are trained and given responsibilities to ensure adequate
internal accounting controls at a cost commensurate with the risks involved.
Internal accounting controls, monitored by an internal audit staff, provide
reasonable assurances that transactions are executed in accordance with proper
authorization and that adequate accountability for the company's assets is
maintained.

The Board of Directors, through its Audit Committee, is responsible for
assuring that management fulfills its responsibilities in the preparation of the
financial statements. The Audit Committee meets at least twice a year with the
company's independent accountants to discuss the scope of their examination and
any significant findings resulting therefrom.

/s/ James E. Herald

James E. Herald
Vice President-Finance
Chief Financial Officer

Report of Independent Accountants

To the Shareholders and Board of Directors
of Mine Safety Appliances Company:

In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of income, of earnings retained in the business, and of
cash flows present fairly, in all material respects, the financial position of
Mine Safety Appliances Company and its subsidiaries at December 31, 1994 and
1993, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 1994, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

As discussed in Note 18 to these consolidated financial statements, the
Company adopted Statement of Financial Accounting Standards (SFAS) No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions," SFAS
No. 109, "Accounting for Income Taxes," and SFAS No. 112, "Employers' Accounting
for Postemployment Benefits" in 1992.

/s/ Price Waterhouse LLP

Price Waterhouse LLP
Pittsburgh, Pennsylvania
February 17, 1995

13
<PAGE>

Consolidated Statement of Income
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

(In thousands, except per share amounts) Year Ended December 31 1994 1993 1992
<S> <C> <C> <C>
Net sales....................................................... $459,607 $429,220 $502,366
Other income.................................................... 5,463 5,885 9,755
-------- -------- ---------
465,070 435,105 512,121
-------- -------- ---------
Costs and expenses
Cost of products sold........................................ 286,725 273,350 327,555
Selling, general and administrative.......................... 124,714 121,529 130,182
Depreciation................................................. 18,527 17,294 16,831
Interest..................................................... 2,224 1,713 1,536
Foreign currency losses...................................... 3,968 3,201 5,507
Facilities consolidation and restructuring charges........... 3,086 (223) 5,500
Contract costs recovery...................................... (2,800)
-------- -------- ---------
439,244 416,864 484,311
-------- -------- ---------
Income from continuing operations before income taxes........... 25,826 18,241 27,810
Provision for income taxes...................................... 10,497 7,686 11,107
-------- -------- ---------
Income from continuing operations............................... 15,329 10,555 16,703
Losses from discontinued operations (Note 7).................... (5,067)
Cumulative effect to January 1, 1992
of changes in accounting principles (Note 18)................. (8,964)
-------- -------- ---------
Net income...................................................... $ 15,329 $ 10,555 $ 2,672
======== ======== =========
Earnings per common share
Continuing operations........................................ $2.58 $1.73 $2.67
Discontinued operations...................................... (.81)
Cumulative effect to January 1, 1992 of changes in
accounting principles....................................... (1.44)
-------- -------- ---------
Net income................................................... $2.58 $1.73 $.42
======== ======== =========

</TABLE>

Consolidated Statement of
Earnings Retained in the Business
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

(In thousands, except per share amounts) Year Ended December 31 1994 1993 1992
<S> <C> <C> <C>

At beginning of year............................................ $287,286 $282,371 $285,307
Net income...................................................... 15,329 10,555 2,672
Dividends
Common-$.94, $.92 and $.89 per share......................... (5,569) (5,584) (5,550)
Preferred-$2.25 per share.................................... (53) (56) (58)
-------- -------- ---------
At end of year.................................................. $296,993 $287,286 $282,371
======== ======== =========
</TABLE>

See notes to consolidated financial statements

14
<PAGE>

Consolidated Balance Sheet
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
(In thousands, except per share amounts) December 31 1994 1993
<S> <C> <C> <C>
Assets
Current Assets Cash.................................................................. $ 10,108 $ 10,953
Temporary investments, at cost which approximates market.............. 44,312 35,481
Receivables, less allowance for doubtful accounts $2,102 and $2,516... 88,698 81,897
Inventories........................................................... 76,966 81,454
Prepaid expenses and other current assets............................. 17,232 14,824
--------- ---------
Total current assets.................................................. 237,316 224,609
--------- ---------
Property Land.................................................................. 6,502 6,766
Buildings............................................................. 104,487 104,942
Machinery and equipment............................................... 206,001 183,776
Construction in progress.............................................. 5,119 11,207
--------- ---------
Total................................................................. 322,109 306,691
Less accumulated depreciation......................................... (170,153) (153,162)
--------- ---------
Net property.......................................................... 151,956 153,529
--------- ---------
Other Assets Assets of discontinued business....................................... 1,208 7,175
Other assets.......................................................... 26,571 22,571
--------- ---------
Total other assets.................................................... 27,779 29,746
--------- ---------
Total................................................................. $ 417,051 $ 407,884
========= =========
Liabilities
Current
Liabilities Notes payable and current portion of long-term debt................... $ 9,743 $ 6,294
Accounts payable...................................................... 25,864 20,925
Employees' compensation............................................... 12,180 11,460
Insurance............................................................. 8,675 7,509
Taxes on income....................................................... (1,090) (3,474)
Other current liabilities............................................. 15,450 17,696
--------- ---------
Total current liabilities............................................. 70,822 60,410
--------- ---------
Long-term Debt ...................................................................... 16,564 27,476
--------- ---------
Other
Liabilities Deferred income taxes................................................. 14,424 12,142
Pensions and other employee benefits.................................. 48,191 46,856
Other noncurrent liabilities.......................................... 1,075 1,256
--------- ---------
Total other liabilities............................................... 63,690 60,254
--------- ---------
Shareholders' Equity
Preferred stock, 4 1/2% cumulative, $50 par value (callable at $52.50) 3,569 3,569
Common stock, no par value (shares outstanding:
1994-5,815,672; 1993-6,011,628)................................... 8,048 8,048
Cumulative translation adjustments.................................... (699) (5,749)
Earnings retained in the business..................................... 296,993 287,286
Treasury shares, at cost.............................................. (41,936) (33,410)
--------- ---------
Total shareholders' equity............................................ 265,975 259,744
--------- ---------
Total................................................................. $ 417,051 $ 407,884
========= =========
</TABLE>
See notes to consolidated financial statements.

15
<PAGE>

Consolidated Statement of Cash Flows
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
(In thousands) Year Ended December 31 1994 1993 1992
<S> <C> <C> <C>
Operating Activities
Income from continuing operations............... $ 15,329 $ 10,555 $ 16,703
Depreciation.................................... 18,527 17,294 16,831
Pensions........................................ (1,305) 151 2,600
Deferred income taxes........................... 61 (82) 99
Receivables..................................... (6,801) (6,118) 7,281
Inventories..................................... 4,488 6,330 11,937
Accounts payable and accrued liabilities........ 6,963 5,442 (12,406)
Other assets and liabilities.................... (754) (3,797) (2,470)
Other-including currency exchange adjustments... 4,163 (3,956) (3,682)
-------- -------- --------
Cash Flow From Operating Activities............. 40,671 25,819 36,893
-------- -------- --------
Investing Activities
Property additions.............................. (22,614) (21,642) (22,762)
Property disposals.............................. 4,983 3,420 1,189
Acquisitions and other investing................ 6,130 (4,180) 443
-------- -------- --------
Cash Flow From Investing Activities............. (11,501) (22,402) (21,130)
-------- -------- --------
Financing Activities
Additions to long-term debt..................... 2,167 1,472 6,883
Reductions of long-term debt.................... (13,949) (1,850) (1,227)
Financing funds in escrow....................... (2,922)
Cash dividends.................................. (5,622) (5,640) (5,608)
Stock options and purchases of company's stock.. (8,526) (4,141) (8,310)
Changes in notes payable and short-term debt.... 2,978 399 (218)
-------- -------- --------
Cash Flow From Financing Activities............. (22,952) (9,760) (11,402)
-------- -------- --------
Effect of exchange rate changes on cash............ 1,768 (2,632) (3,311)
-------- -------- --------
Increase (decrease) in cash and cash equivalents... 7,986 (8,975) 1,050
Beginning cash and cash equivalents................ 46,434 55,409 54,359
-------- -------- --------
Ending cash and cash equivalents................... $ 54,420 $ 46,434 $ 55,409
======== ======== ========
Supplemental cash flow information:
Interest payments............................... $ 1,983 $ 1,467 $ 1,504
Income tax payments............................. 13,947 9,013 25,610
</TABLE>
See notes to consolidated financial statements.

16
<PAGE>

Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------

Note 1-Basis of Presentation

Significant accounting policies are stated in italics at the applicable notes
to consolidated financial statements.

ALL SIGNIFICANT MAJORITY-OWNED COMPANIES ARE INCLUDED IN THE CONSOLIDATED
FINANCIAL STATEMENTS. INVESTMENTS IN WHICH THE COMPANY HAS AN EQUITY INTEREST OF
20% TO 50% ARE CARRIED AT EQUITY IN NET ASSETS. INTERCOMPANY TRANSACTIONS ARE
ELIMINATED IN CONSOLIDATION.

SALES UNDER CONTRACTS ARE RECORDED AT FIXED OR ESTIMATED CONTRACT SALES PRICES
AS DELIVERIES ARE MADE. CONTRACTS REQUIRING PERFORMANCE OVER SEVERAL PERIODS ARE
ACCOUNTED FOR BY THE PERCENTAGE-OF-COMPLETION METHOD OF ACCOUNTING. PROFITS
EXPECTED TO BE REALIZED ARE BASED ON ESTIMATES OF TOTAL SALES AND COSTS AT
COMPLETION. THESE ESTIMATES ARE PERIODICALLY REVIEWED AND REVISED DURING THE
CONTRACT PERFORMANCE PERIOD. ADJUSTMENTS TO PROFITS ARE RECORDED IN THE PERIOD
IN WHICH ESTIMATES ARE REVISED; LOSSES ARE RECOGNIZED IN FULL AS THEY ARE
IDENTIFIED.

PROPERTY IS STATED AT COST. DEPRECIATION IS BASED ON ESTIMATED USEFUL LIVES
USING ACCELERATED AND STRAIGHT-LINE METHODS. MAINTENANCE AND REPAIRS ARE CHARGED
TO EXPENSE. RENEWALS AND BETTERMENTS WHICH SUBSTANTIALLY EXTEND THE USEFUL LIFE
OF PROPERTY ARE CAPITALIZED. ACCUMULATED ALLOWANCES FOR DEPRECIATION OF
BUILDINGS, MACHINERY AND EQUIPMENT RETIRED OR OTHERWISE DISPOSED OF ARE
ELIMINATED FROM THE ACCOUNTS UPON DISPOSITION. PROFITS OR LOSSES RESULTING FROM
SUCH DISPOSITIONS ARE INCLUDED IN INCOME.

CASH AND CASH EQUIVALENTS IN THE CONSOLIDATED STATEMENT OF CASH FLOWS INCLUDES
TEMPORARY INVESTMENTS THAT ARE READILY MARKETABLE AND HAVE MINIMAL RISK AS TO
CHANGE IN VALUE. CERTAIN SECURITIES HAVE MATURITIES IN EXCESS OF NINETY DAYS;
BUT, AS PART OF THE COMPANY'S CASH MANAGEMENT PROGRAM, MATURITIES ARE SCHEDULED
BASED ON EXPECTED CASH NEEDS FOR THE ENSUING TWELVE MONTHS.

EARNINGS PER SHARE ARE COMPUTED BASED UPON THE WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING DURING EACH YEAR. THE COMPUTATION RECOGNIZES DIVIDENDS
PAID ON PREFERRED STOCK BUT DOES NOT INCLUDE A NEGLIGIBLE DILUTIVE EFFECT OF
STOCK OPTIONS.

Note 2-Leases

The company leases warehouses, sales offices, manufacturing facilities and
equipment under agreements expiring at various dates through 2004, with renewal
options existing for varying periods. Rental expense for these leases charged to
income was $6,452,000 in 1994, $6,438,000 in 1993, and $6,500,000 in 1992.
Future minimum rental commitments under noncancelable leases are not
significant.

Note 3-Research and Development Expense

RESEARCH AND DEVELOPMENT COSTS, CHARGED AGAINST INCOME AS INCURRED, were
$20,575,000 in 1994, $21,000,000 in 1993, and $20,938,000 in 1992.

Note 4-Other Income

Other income is summarized as follows:

<TABLE>
<CAPTION>
(In thousands)
----------------------
1994 1993 1992
------ ------ ------
<S> <C> <C> <C>
Interest................. $3,043 $3,732 $6,857
Commissions, royalties
and product services.. 1,940 1,335 897
Dispositions of assets... 103 127 435
Other.................... 377 691 1,566
------ ------ ------
Total.................... 5,463 5,885 9,755
------ ------ ------
</TABLE>

Note 5-Stock Plans

The company's Management Share Incentive Plan permits the granting of
restricted stock awards and stock options to eligible key employees through
December 1997. The 1990 Non-Employee Directors' Stock Option Plan provides for
annual grants of stock options to eligible directors. Pursuant to these Plans,
340,225 shares were reserved for future grants as of December 31, 1994.

Shares of common stock, in the form of restricted stock bonus, have been given
to employees without payment to the company in consideration of services to be
performed in ensuing five-year periods. So long as certain restrictions apply,
these shares may not be sold and may be subject to forfeiture under certain
circumstances. THE EXPENSE TO THE COMPANY IS MEASURED BY THE MARKET VALUE OF THE
SHARES WHEN AWARDED AND IS AMORTIZED BY CHARGES TO OPERATIONS OVER THE PERIOD
THAT THE EMPLOYEE PROVIDES THE SERVICE. The expense charged to operations was
$413,000 in 1994, $371,000 in 1993, and $318,000 in 1992. A summary of the
restricted stock bonus awards is as follows:

<TABLE>
<CAPTION>
Shares of
common stock
------------
<S> <C>
As of December 31, 1994:
Awards................. 112,471
Restrictions lapsed.... 84,865
Restrictions lapsing in:
1995................... 3,475
1996, 1997 and 1998.... 24,131
</TABLE>

Stock options of 42,160 shares for key employees and 7,100 shares for non-
employee directors were outstanding at December 31, 1994. These options may be
exercised in whole or in part at various dates through December 18, 2001 at
option prices equivalent to or higher than the market values at date of grant.
Changes in stock options outstanding follow:

<TABLE>
<CAPTION>
Shares Price Per Share
------ ---------------
<S> <C> <C>
December 31, 1991.. 41,720 $27.00 to 61.33
Granted......... 1,400 44.00
Exercised....... (4,000) 29.70
Forfeited....... (400) 44.00 to 55.00
------
December 31, 1992.. 38,720 27.00 to 61.33
Granted......... 1,400 47.13
Forfeited....... (7,600) 55.75
------
December 31, 1993.. 32,520 27.00 to 61.33
Granted......... 20,140 40.43 to 48.40
Forfeited....... (3,400) 61.33
------
December 31, 1994.. 49,260 27.00 to 55.75
------
</TABLE>

17
<PAGE>

Notes to Consolidated Financial Statements
------------------------------------------------------------------------------
Note 6-Business Segments and International Operations

The company is primarily engaged in the manufacture and sale of safety and
health equipment. Principal products include respiratory protective equipment,
head protection, eye and face protection, hearing protectors, safety clothing,
industrial emergency care products, mining safety equipment and monitoring
instruments. These safety and health products account for more than 90% of
revenues, operating profits and assets. Other products which do not fall within
the safety and health equipment segment of the company's business include boron-
based and other specialty chemicals.

Information about the company's continuing operations in different geographic
areas is summarized as follows:

<TABLE>
<CAPTION>
(In thousands)
------------------------------
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Net Sales and Revenues
U.S. operations................................................................................. $277,591 $254,823 $307,535
European operations............................................................................. 114,030 114,169 138,006
Other non-U.S. operations....................................................................... 70,091 61,969 59,612
-------- -------- --------
Net Sales and Revenues.......................................................................... 461,712 430,961 505,153
-------- -------- --------
Intercompany Transfers
U.S. operations................................................................................. 19,067 17,937 18,982
European operations............................................................................. 13,601 12,886 16,556
Other non-U.S. operations....................................................................... 625 550 330
-------- -------- --------
Intercompany Transfers.......................................................................... 33,293 31,373 35,868
-------- -------- --------
Operating Profit and Income Before Income Taxes
U.S. operations................................................................................. 20,332 13,183 21,203
European operations............................................................................. 3,716 (1,345) 3,965
Other non-U.S. operations....................................................................... 8,671 6,036 6,697
Eliminations.................................................................................... (971) 922 (1,280)
-------- -------- --------
Operating Profit................................................................................ 31,748 18,796 30,585
Interest expense................................................................................ (2,224) (1,713) (1,536)
Foreign currency losses......................................................................... (3,968) (3,201) (5,507)
Corporate income/(expense)--net................................................................. 270 4,359 4,268
-------- -------- --------
Income Before Income Taxes...................................................................... 25,826 18,241 27,810
-------- -------- --------
Identifiable Assets and Total Assets
U.S. operations................................................................................. 236,286 234,650 220,441
European operations............................................................................. 96,963 96,064 102,160
Other non-U.S. operations....................................................................... 38,615 33,705 36,254
Eliminations.................................................................................... (14,476) (12,657) (15,199)
-------- -------- --------
Identifiable Assets............................................................................. 357,388 351,762 343,656
Corporate assets................................................................................ 58,455 48,947 58,024
Discontinued operations......................................................................... 1,208 7,175 6,092
-------- -------- --------
Total Assets.................................................................................... 417,051 407,884 407,772
-------- -------- --------
Net Assets of Non-U.S. Operations/(1)/............................................................ 92,285 82,273 89,383
-------- -------- --------
Net Income of Non-U.S. Operations................................................................. 4,675 2,666 4,046
-------- -------- --------
</TABLE>

(1) See Note 17 to consolidated financial statements for effects of currency
translation adjustments.

Transfers between geographic areas are stated at established intercompany
selling prices. Operating profit is total revenues less operating expenses.
Interest income and expense, equity in unconsolidated affiliates, foreign
currency gains and losses, facilities consolidation and restructuring charges,
and income taxes have not been included in computing operating profit. Corporate
assets not included in identifiable assets are principally cash and investments.

Sales by U.S. operations to U.S. government agencies were $46,478,000 in 1994,
$43,234,000 in 1993, and $99,991,000 in 1992.

Note 7-Discontinued Operations

In 1992 the company decided to discontinue the operations of Transfer-
Metallisierte Produkte GmbH (TMP), a joint venture in Germany to produce
metallized paper. Accordingly, the operating losses of TMP, adjusted for the
after-tax effects of intercompany transactions, have been reported separately in
the consolidated statement of income. Operating activities ceased during 1993.
The company is in the process of disposing of the assets and settling its
liabilities. After recognizing the accumulated operating losses of TMP included
in consolidation, the company estimates a loss on disposal, including provision
for operating losses during the phase-out period, of $11,550,000 which will be
fully offset by tax benefits.

18
<PAGE>

--------------------------------------------------------------------------------
Note 8-Income Taxes

EFFECTIVE AS OF JANUARY 1, 1992, THE COMPANY ADOPTED STATEMENT OF FINANCIAL
ACCOUNTING STANDARDS NO. 109-ACCOUNTING FOR INCOME TAXES. AS A RESULT OF THIS
ACCOUNTING CHANGE, DEFERRED TAX BALANCES ARE STATED AT TAX RATES EXPECTED TO BE
IN EFFECT WHEN TAXES ARE ACTUALLY PAID OR RECOVERED. THE CUMULATIVE EFFECT OF
THIS CHANGE WAS A CREDIT TO INCOME OF $2,148,000 IN 1992. NO PROVISION IS MADE
FOR UNDISTRIBUTED EARNINGS OF INTERNATIONAL COMPANIES SINCE LITTLE OR NO TAX
WOULD RESULT UNDER APPLICABLE EXISTING STATUTES OR BECAUSE MANAGEMENT INTENDS
THAT THESE EARNINGS BE PERMANENTLY REINVESTED FOR WORKING CAPITAL AND CAPITAL
EXPENDITURE REQUIREMENTS.

The U.S. and non-U.S. components of income from continuing operations before
income taxes, and provisions for income taxes are summarized as follows:

<TABLE>
<CAPTION>
(In thousands)
------------------------------
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Income Before Income Taxes
U.S. income.......................................................... $ 19,933 $ 16,304 $ 32,256
Non-U.S. income....................................................... 11,177 6,055 12,592
Currency translations (losses)........................................ (3,024) (3,080) (4,478)
Eliminations.......................................................... (2,260) (1,038) (12,560)
-------- -------- --------
Income Before Income Taxes............................................ 25,826 18,241 27,810
-------- -------- --------
Provisions For Income Taxes
Current
Federal............................................................. 6,220 4,427 6,422
State............................................................... 1,537 1,122 1,237
Non-U.S............................................................. 2,679 2,219 3,349
-------- -------- --------
Total current provision............................................. 10,436 7,768 11,008
-------- -------- --------
Deferred
Federal............................................................. (801) 351 1,187
State............................................................... (43) (2) 378
Non-U.S............................................................. 905 (431) (1,466)
-------- -------- --------
Total deferred provision............................................ 61 (82) 99
-------- -------- --------
Provisions for Income Taxes 10,497 7,686 11,107
-------- -------- --------

The components of the net deferred tax liability are as follows:
1994 1993 1992
-------- -------- --------
Deferred tax assets:
Postretirement benefits............................................. 5,903 5,792 5,540
Inventory reserves and unrealized profits........................... 5,344 5,027 4,441
Vacation allowances................................................. 2,054 2,059 1,925
Postemployment benefits............................................. 1,580 1,630 1,560
Liability insurance................................................. 2,319 1,749 1,524
Loss carryforwards.................................................. 2,502 5,360 8,437
Other............................................................... 3,583 2,258 985
-------- -------- --------
Total deferred tax assets........................................... 23,285 23,875 24,412
-------- -------- --------
Deferred tax (liability)-depreciation................................. (24,588) (25,065) (25,662)
-------- -------- --------
Net deferred tax (liability).......................................... (1,303) (1,190) (1,250)
-------- -------- --------
</TABLE>

The following is a reconciliation of income taxes calculated at the U.S.
Federal income tax rate (35% in 1994 and 1993, and 34% in 1992) to the provision
for income taxes for continuing operations:

1994 1993 1992
------ ----- ------
<S> <C> <C> <C>
Provision for income taxes at statutory rate.. 9,039 6,384 9,455
State income taxes............................ 971 728 1,066
Currency translation.......................... 1,058 1,078 1,523
Research tax credits.......................... (150) (50) (50)
Non-U.S. taxes................................ (293) (817) (1,321)
Other-net..................................... (128) 363 434
------ ----- ------
Provision for income taxes.................... 10,497 7,686 11,107
------ ----- ------
</TABLE>

Undistributed earnings of international companies for which U.S. income taxes
have not been provided were $57,756,000 at December 31, 1994.

19
<PAGE>

Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------

Note 9-Capital Stock

The authorized capital of the company consists of:

. Common stock, no par value-20,000,000 shares
. Second cumulative preferred voting stock, $10 par value-1,000,000 shares
. 4 1/2% cumulative preferred stock, $50 par value-100,000 shares

Common stock activity is summarized as follows:

<TABLE>
<CAPTION>
(In thousands)
--------------------
Shares Shares In Common Treasury
Issued Treasury Stock Cost
--------- --------- ------ --------
<S> <C> <C> <C> <C>
Balances January 1, 1992.... 6,682,317 406,344 $6,754 $(19,376)
Stock options exercised..... 4,000 118
Purchased for treasury...... 201,187 (8,403)
--------- ------- ------ --------
Balances December 31, 1992.. 6,686,317 607,531 6,872 (27,779)
Management Share Incentive
Plan issues................ 27,186 1,176
Purchased for treasury...... 94,344 (4,099)
--------- ------- ------ --------
Balances December 31, 1993.. 6,713,503 701,875 8,048 (31,878)
Management Share Incentive
Plan forfeitures........... 632 (27)
Purchased for treasury...... 195,324 (8,483)
--------- ------- ------ --------
Balances December 31, 1994.. 6,713,503 897,831 8,048 (40,388)
--------- ------- ------ --------
</TABLE>

Second cumulative preferred voting stock-none has been issued.

As to the 4 1/2% cumulative preferred stock, 71,373 shares have been issued
(none during the three years ended December 31, 1994), while the amounts held in
treasury are as follows:

<TABLE>
<CAPTION>
December 31 Shares Cost (in thousands)
----------- ------ -------------------
<S> <C> <C>
1992 46,030 $(1,490)
1993 47,268 (1,532)
1994 47,775 (1,548)
</TABLE>

Note 10-Quarterly Financial Information (Unaudited)
(In thousands, except earnings per share)

<TABLE>
<CAPTION>
1994 1993
------------------------------------------------- ------------------------------------------------
Quarters Quarters
----------------------------------------- ---------------------------------------
1st 2nd 3rd 4th Year 1st 2nd 3rd 4th Year
----------------------------------------- -------- ------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales.................. $109,522 $115,133 $114,889 $120,063 $459,607 $104,863 $107,840 $103,899 $112,618 $429,220
Gross profit............... 39,009 43,854 42,749 47,270 172,882 37,773 40,269 35,823 42,005 155,870
Net income................. 2,560 3,468 4,593 4,708 15,329 2,516 2,963 1,411 3,665 10,555
-------- -------- -------- -------- -------- -------- ------- -------- -------- --------
Earnings per share......... .43 .57 .78 .80 2.58 .41 .48 .24 .60 1.73
-------- -------- -------- -------- -------- -------- ------- -------- -------- --------
</TABLE>

Note 11-Inventories

THE U.S. INVENTORIES ARE VALUED ON THE LAST-IN, FIRST-OUT (LIFO) COST METHOD.
OTHER INVENTORIES ARE VALUED AT THE LOWER OF COST, USING AVERAGE OR CURRENT
STANDARD COSTS WHICH APPROXIMATE ACTUAL COSTS ON A FIRST-IN, FIRST-OUT (FIFO)
BASIS, OR MARKET, DETERMINED BY REPLACEMENT COST OR NET REALIZABLE VALUE.

Significant reductions of domestic inventories during 1994 caused liquidations
of LIFO inventory values calculated at lower costs incurred in prior years. The
effect of these liquidations has been to reduce cost of sales by $6,923,000 and
to increase net income by $4,189,000, or $.71 per share of common stock.

Inventories are summarized as follows:
<TABLE>
<CAPTION>
(In thousands)
-------------------------------
1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
Finished products........... $33,576 $30,409 $33,643
Work in process............. 14,013 20,001 20,952
Raw materials and supplies.. 29,377 31,044 33,189
------- ------- -------
Total inventories........... 76,966 81,454 87,784
------- ------- -------
Excess of FIFO costs
over LIFO costs........ 59,178 63,033 62,564
------- ------- -------
</TABLE>

Inventories stated on the LIFO basis represent 43%, 58%, and 52% of the total
inventories at December 31, 1994, 1993, and 1992, respectively.

Note 12-Long-Term Debt

<TABLE>
<CAPTION>
(In thousands)
----------------
1994 1993
------- -------
<S> <C> <C>
U.S.
Industrial development debt issues
payable through 2022, 5.9%........... $13,650 $13,650
Other, 4.2% to 16.9%.................... 952 950
International companies
Various notes payable through 1998,
5.25% to 9.6% ($5,587 secured
by pledge of assets located abroad).. 6,981 16,382
------- -------
Total..................................... 21,583 30,982
Amounts due within one year............... 5,019 3,506
------- -------
Long-term debt............................ 16,564 27,476
------- -------
</TABLE>

Approximate maturities of these obligations over the next five years are
$5,019,000 in 1995, $1,582,000 in 1996, $1,360,000 in 1997, $970,000 in 1998,
and $384,000 in 1999. Some U.S. loan agreements contain covenants to maintain
specified levels of shareholders' equity.

Note 13-Contingencies

A portion of the company's business is with departments and agencies of the
United States government. Contracts related to this business are subject to
profit limitations and terminations. The company also has certain contingent
liabilities with respect to commitments and litigation. In the opinion of
management, these contingencies will not result in any significant losses to the
company.

20
<PAGE>

------------------------------------------------------------------------------
Note 14-Retirement Plans

Substantially all employees are covered by non-contributory pension plans.
Various U.S. employees also participate in a contributory retirement savings
plan wherein employees may contribute from 1% to 8% of their compensation to a
trust fund, to which the company contributes an amount equal to 50% of the
employees' contributions. The company's expense for these plans was $4,647,000
in 1994, $4,408,000 in 1993, and $7,572,000 in 1992.

THE NON-CONTRIBUTORY PENSION PLANS ARE ACCOUNTED FOR IN ACCORDANCE WITH
STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 87 WHICH REQUIRES USE OF THE
PROJECTED UNIT CREDIT COST METHOD TO DETERMINE THE PROJECTED BENEFIT OBLIGATION
AND PLAN COST. THE PRINCIPAL U.S. PLAN IS FUNDED IN COMPLIANCE WITH THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT (ERISA). IT IS THE GENERAL POLICY TO FUND CURRENT
COSTS FOR THE INTERNATIONAL PLANS EXCEPT IN GERMANY, WHERE IT IS COMMON PRACTICE
AND PERMISSIBLE UNDER TAX LAWS TO ACCRUE BOOK RESERVES. Non-contributory plan
benefits are generally based on years of service and employees' compensation
during the last years of employment. Benefits are paid from funds previously
provided to trustees or are paid by the company and charged to the book
reserves.

Information pertaining to the non-contributory defined benefit plans is
provided in the following tables.

Cost for Defined Benefits Plans
<TABLE>
<CAPTION>
(In thousands) U.S. Plans International Plans
-------------- -------------------------------------- --------------------------------------
1994 1993 1992 1994 1993 1992
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Service cost-benefits
earned during the period.. $ 3,458 $ 2,894 $ 2,646 $ 1,686 $ 1,361 $ 1,707
Interest cost on projected
benefit obligation........ 9,834 9,558 9,903 3,170 2,910 2,927
Actual (return)/loss on
plan assets............... (971) (22,879) (15,509) (704) (2,219) (898)
Net amortization and
deferral.................. (13,137) 9,937 3,087 (267) 1,320 (55)
Special pension benefit
adjustments associated
with early retirement
programs and
restructuring............ (728) (643) (1,655)
-------- -------- -------- -------- -------- --------
Pension expense (income)... (816) (1,218) (516) 3,885 1,717 3,681
-------- -------- -------- -------- -------- --------

Funding Status and Projected Benefit Obligation Reconciliation

December 31 (In thousands) U.S. Plans International Plans
-------------------------- -------------------------------------- --------------------------------------
1994 1993 1992 1994 1993 1992
-------- -------- -------- -------- -------- --------
Actuarial present value of
benefit obligations:
Accumulated benefit
obligation
Vested................... 108,697 108,439 97,767 41,058 22,157 21,993
Nonvested................ 2,043 1,917 300 2,422 980 762
-------- -------- -------- -------- -------- --------
Total.................... 110,740 110,356 98,067 43,480 23,137 22,755
-------- -------- -------- -------- -------- --------
Plan assets at fair value,
primarily listed stocks
and bonds................. 173,171 179,832 164,832 16,922 16,071 13,591
Projected benefit
obligation................ 128,389 136,034 118,084 48,112 35,621 35,881
-------- -------- -------- -------- -------- --------
Plan assets in excess of
(less than) projected
benefit obligation........ 44,782 43,798 46,748 (31,190) (19,550) (22,290)
-------- -------- -------- -------- -------- --------
The excess (less than)
consists of:
Unamortized portion of
transition gain (loss),
being recognized over
future years............. 7,931 9,231 10,173 (1,325) (886) (1,361)
Unrecognized net gain
(loss) from past
experience
different from that
assumed................. 38,144 37,331 41,066 (1,719) 1,836 136
Unrecognized prior
service cost............. (3,074) (3,380) (3,925) (544) (579) (656)
Minimum liability for
unfunded plans........... 1,042 1,097 1,369
Accrued pension cost
included in the
consolidated balance
sheet................... 739 (481) (1,935) (27,602) (19,921) (20,409)
-------- -------- -------- -------- -------- --------
Total..................... 44,782 43,798 46,748 (31,190) (19,550) (22,290)
-------- -------- -------- -------- -------- --------
Assumed long-term rates of
return on assets.......... 9% 9% 9% 8-9% 7-9% 8-9 1/2%
Assumed discount rates for
future benefits........... 8 1/4 7 1/2 8 1/2 7-8.9 5 3/4-9 7 3/4-9 1/2
Assumed long-term rates
for compensation increases 5 5 5 4-6 3-6 6-6 1/2
</TABLE>

Note 15-Short-Term Debt

Short-term bank lines of credit amounted to $15,365,000 of which $10,686,000
was unused at December 31, 1994. Generally, these short-term lines of credit are
renewable annually and there are no significant commitment fees or compensating
balance requirements. Short-term borrowings with banks, which exclude the
current portion of long-term debt, were $4,679,000 and $2,722,000 at December
31, 1994 and 1993, respectively. The average month-end balance of total short-
term borrowings during 1994 was $4,220,000 while the maximum month-end balance
of $5,499,000 occurred at August 31, 1994. The average interest rate during 1994
was approximately 19% based upon total short-term interest expense divided by
the average month-end balance outstanding, and 10% at year-end. This average
interest rate is affected by borrowings in certain countries where local
inflation has resulted in relatively high interest rates.

21
<PAGE>

Notes to Consolidated Financial Statements
------------------------------------------------------------------------------
Note 16-Postretirement Benefits

The company provides certain health care benefits and limited life insurance
for retired employees and their eligible dependents. STATEMENT OF FINANCIAL
ACCOUNTING STANDARDS (SFAS) NO. 106-"EMPLOYERS' ACCOUNTING FOR POSTRETIREMENT
BENEFITS OTHER THAN PENSIONS" WAS IMPLEMENTED AS OF JANUARY 1, 1992, USING THE
IMMEDIATE RECOGNITION TRANSITION OPTION. SFAS NO. 106 REQUIRES RECOGNITION OF
RETIREE HEALTH AND LIFE INSURANCE BENEFITS DURING THE EMPLOYEES' SERVICE WITH
THE COMPANY.

The accumulated postretirement benefit of $14,212,000 as of January 1, 1992
was charged to 1992 earnings. Further information about these benefits is
provided in the following tables:

Cost for Benefits
(In thousands) 1994 1993 1992
----------------- ------- ------- -------
<S> <C> <C> <C>
Service cost-benefits earned during the period.................................. $ 471 $ 447 $ 385
Interest cost on projected benefit obligation................................... 1,198 1,192 1,201
Amortization of (gain)/loss..................................................... 40
------- ------- -------
Retirement benefits expense..................................................... 1,709 1,639 1,586
------- ------- -------
Funded Status and Accumulated Postretirement Benefit Obligation Reconciliation
December 31 (In thousands) 1994 1993 1992
-------------------------- ------- ------- -------
Accumulated postretirement benefit obligation:
Active employees........................................................... 3,188 3,582 2,913
Other active participants.................................................. 6,098 7,647 5,779
------- ------- -------
9,286 11,229 8,692
Retirees................................................................... 5,389 5,615 5,895
------- ------- -------
Total...................................................................... 14,675 16,844 14,587
Unamortized (loss).............................................................. (222) (2,565) (275)
------- ------- -------
Accrued postretirement benefit cost included
in consolidated balance sheet................................................ 14,453 14,279 14,312
------- ------- -------
Assumed discount rates for future benefits...................................... 8 1/4% 7 1/2% 8 1/2%
</TABLE>

Annual rates of increase in the costs of covered health care benefits assumed
for 1994 were 10%, decreasing gradually to 5% for the year 1998 and thereafter.
The health care cost trend rate assumption has a significant effect on the
amounts reported; a one-percentage-point increase in each year would increase
the accumulated postretirement benefit obligation by $918,000 and increase the
current service and interest costs for the year by $127,000.

Note 17-Foreign Currency

AN APPROPRIATE FUNCTIONAL CURRENCY IS DETERMINED FOR EACH ENTITY. THE FINANCIAL
STATEMENTS OF COMPANIES FOR WHICH THE UNITED STATES DOLLAR IS DETERMINED TO BE
THE FUNCTIONAL CURRENCY ARE TRANSLATED USING APPROPRIATE CURRENT AND HISTORIC
EXCHANGE RATES; ADJUSTMENTS RELATED THERETO ARE INCLUDED IN INCOME FOR THE
CURRENT PERIOD. THE FINANCIAL STATEMENTS OF ALL OTHER COMPANIES ARE TRANSLATED
FROM THEIR FUNCTIONAL CURRENCY INTO UNITED STATES DOLLARS USING CURRENT EXCHANGE
RATES; THE RESULTANT TRANSLATION ADJUSTMENTS ARE NOT INCLUDED IN INCOME BUT ARE
ACCUMULATED IN A SEPARATE EQUITY ACCOUNT. TRANSACTION GAINS AND LOSSES ARE
RECOGNIZED IN INCOME FOR THE CURRENT PERIOD.

Foreign currency effects are summarized as follows:

<TABLE>
<CAPTION>
(In thousands)
------------------------
1994 1993 1992
------- ------ ------
<S> <C> <C> <C>
Currency (gains)/losses charged
to income arising from:
Translation-Latin American
companies................. $ 3,024 $3,080 $4,478
Transactions................. 944 121 1,029
------- ------ ------
Total........................ 3,968 3,201 5,507
------- ------ ------
Currency translation (gains)/losses
charged directly to equity
adjustment account.............. (5,050) 5,400 4,736
------- ------ ------
</TABLE>

Note 18-Accounting Changes

Effective January 1, 1992, the company adopted three new Statements of
Financial Accounting Standards (SFAS). The after tax effect of these changes was
a charge of $8,964,000 against 1992 net income. Aside from this cumulative
effect as of January 1, 1992, adoption of these Standards did not materially
affect 1992 financial results. SFAS No. 106-"Employers' Accounting for
Postretirement Benefits Other Than Pensions" was implemented using the immediate
recognition transition option, resulting in a charge of $8,672,000, after
recognizing related deferred taxes. SFAS No. 112-"Employers' Accounting for
Postemployment Benefits" pertains to benefits, such as workers' compensation and
other disability expenses, for inactive employees before retirement. The after
tax costs recognized for implementing this Standard were $2,440,000 (pretax
$4,000,000). SFAS No. 109-"Accounting for Income Taxes" requires that deferred
tax balances are stated at tax rates expected to be in effect when taxes are
actually paid or recovered, whereas deferred taxes were previously provided at
tax rates prevailing during the periods when timing differences between
financial income and taxable income occurred. Adjustment of the previously
provided deferred taxes resulted in a net credit to income of $2,148,000.

22
<PAGE>

Five-Year Summary of Selected Financial Data
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SUMMARY OF OPERATIONS 1994 1993 1992 1991 1990
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
(In thousands, except as noted)
Net sales $459,607 $429,220 $502,366 $499,240 $473,933
-----------------------------------------------------------------------------------------------------------
Other income 5,463 5,885 9,755 8,886 8,807
-----------------------------------------------------------------------------------------------------------
Cost of products sold 286,725 273,350 327,555 324,448 287,345
-----------------------------------------------------------------------------------------------------------
Selling, general and administrative 124,714 121,529 130,182 124,983 121,137
-----------------------------------------------------------------------------------------------------------
Depreciation 18,527 17,294 16,831 16,230 14,904
-----------------------------------------------------------------------------------------------------------
Interest expense 2,224 1,713 1,536 1,739 1,926
-----------------------------------------------------------------------------------------------------------
Foreign currency losses 3,968 3,201 5,507 2,456 4,238
-----------------------------------------------------------------------------------------------------------
Unusual items 3,086 (223) 2,700 700
-----------------------------------------------------------------------------------------------------------
Taxes on income 10,497 7,686 11,107 15,846 21,583
-----------------------------------------------------------------------------------------------------------
Income from continuing operations 15,329 10,555 16,703 22,424 30,907
-----------------------------------------------------------------------------------------------------------
Per common share (in dollars)/(1)/ 2.58 1.73 2.67 3.52 4.77
-----------------------------------------------------------------------------------------------------------
Discontinued operations (5,067) (3,773) (1,703)
-----------------------------------------------------------------------------------------------------------
Cumulative effect to January 1, 1992 of
changes in accounting principles (8,964)
-----------------------------------------------------------------------------------------------------------
Net income 15,329 10,555 2,672 18,651 29,204
-----------------------------------------------------------------------------------------------------------
Per common share (in dollars)/(1)/ 2.58 1.73 .42 2.92 4.50
-----------------------------------------------------------------------------------------------------------
Cash dividends 5,622 5,640 5,608 5,659 5,372
-----------------------------------------------------------------------------------------------------------
Per common share (in dollars) .94 .92 .89 .88 .82
-----------------------------------------------------------------------------------------------------------
Weighted average number of common shares outstanding 5,921 6,069 6,225 6,353 6,471
-----------------------------------------------------------------------------------------------------------

YEAR-END POSITION
-----------------------------------------------------------------------------------------------------------
Working capital $166,494 $164,199 $177,287 $184,378 $185,371
-----------------------------------------------------------------------------------------------------------
Working capital ratio 3.4 3.7 4.2 3.7 3.7
-----------------------------------------------------------------------------------------------------------
Property, at cost 322,109 306,691 305,908 292,338 285,961
-----------------------------------------------------------------------------------------------------------
Total assets 417,051 407,884 407,772 430,869 436,118
-----------------------------------------------------------------------------------------------------------
Long-term debt 16,564 27,476 28,868 23,009 24,606
-----------------------------------------------------------------------------------------------------------
Common shareholders' equity 264,795 258,539 261,927 277,866 278,199
-----------------------------------------------------------------------------------------------------------
Equity per common share (in dollars) 45.53 43.00 43.09 44.27 43.49
-----------------------------------------------------------------------------------------------------------
</TABLE>

(1) Earnings per common share are calculated after deducting dividends on
preferred stock and are based on the weighted average number of shares
outstanding during each year.

<PAGE>

EXHIBIT 21
----------

MINE SAFETY APPLIANCES COMPANY
------------------------------

The registrant's present affiliates include the following:

<TABLE>
<CAPTION>
State or Other
Jurisdiction of
Name Incorporation
-------------------------------------- --------------------------------------
<S> <C>

MSA (Aust.) Pty. Limited Australia

MSA Export Limited Barbados

MSA do Brasil Ltda. Brazil

MSA Canada Canada

MSA de Chile Ltda. Chile

Baseline Industries, Inc. Colorado

MSA International, Inc. Delaware

MSA de France France

Auergesellschaft GmbH Germany

MSA/Auer Safety Technology Hungary

MSA Italiana S.p.A. Italy

MSA Japan Ltd. Japan

MSA de Mexico, S.A. de C.V. Mexico

MSA Nederland, B.V. Netherlands

HAZCO Services, Inc. Ohio

MSA del Peru S.A. Peru

MSA (Britain) Limited Scotland

MSA S.E. Asia Pte. Ltd. Singapore

MSA Espanola S.A. Spain

AB Tegma Sweden

MSA (Switzerland) Ltd. Switzerland

MSA Zimbabwe (Pvt.) Limited Zimbabwe

------------------------------------------------------------------------------
</TABLE>

The above-mentioned affiliated companies are included in the consolidated
financial statements of the registrant filed as part of this annual report. The
names of certain other affiliates, which considered in the aggregate as a single
affiliate would not constitute a significant affiliate, have been omitted.

<PAGE>

EXHIBIT 23

Consent of Independent Accountants

We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-22284) of the 1987 Management Share Incentive Plan
(the 1987 Plan) and the Registration Statement on Form S-8 (No. 33-43696) of the
1990 Non-Employee Directors' Stock Option Plan of Mine Safety Appliances Company
of our report dated February 17, 1995, appearing on page 13 of the 1994 Annual
Report to Shareholders of Mine Safety Appliances Company, which is incorporated
by reference in this Annual Report on Form 10-K. The 1987 Plan also relates to
the Registration Statement on Form S-8 (No. 2-72044) of the 1980 Management
Share Incentive Plan of Mine Safety Appliances Company. We also consent to the
incorporation by reference of our report on the Financial Statement Schedule,
which appears on page F-1 of this Form 10-K. We also consent to the reference to
us under the heading "Experts" in such Statements.

Price Waterhouse LLP

Pittsburgh, Pennsylvania
March 24, 1995

<PAGE>

<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM DECEMBER 1994
FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 54,420
<SECURITIES> 0
<RECEIVABLES> 90,800
<ALLOWANCES> 2,102
<INVENTORY> 76,966
<CURRENT-ASSETS> 237,316
<PP&E> 322,109
<DEPRECIATION> 170,153
<TOTAL-ASSETS> 417,051
<CURRENT-LIABILITIES> 70,822
<BONDS> 16,564
<COMMON> 8,048
0
3,569
<OTHER-SE> 254,358
<TOTAL-LIABILITY-AND-EQUITY> 417,051
<SALES> 459,607
<TOTAL-REVENUES> 465,070
<CGS> 286,725
<TOTAL-COSTS> 305,252
<OTHER-EXPENSES> 3,968
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,224
<INCOME-PRETAX> 25,826
<INCOME-TAX> 10,497
<INCOME-CONTINUING> 15,329
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,329
<EPS-PRIMARY> 2.58
<EPS-DILUTED> 2.58

</TABLE>