The following discussion and analysis should be read in conjunction with the historical financial statements and other financial information included elsewhere in this report on Form 10-Q. This discussion may contain forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business, and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors. These factors include, but are not limited to, spending patterns of government agencies, competitive pressures, product liability claims and our ability to collect related insurance receivables, the success of new product introductions, currency exchange rate fluctuations, the identification and successful integration of acquisitions, and the risks of doing business in foreign countries. For discussion of risk factors affecting our business, see Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2008.

BUSINESS OVERVIEW

We are a global leader in the development, manufacture and supply of products that protect people's health and safety. Our safety products typically integrate any combination of electronics, mechanical systems, and advanced materials to protect users against hazardous or life threatening situations. Our comprehensive lines of safety products are used by workers around the world in the fire service, homeland security, construction, and other industries, as well as the military.

We are committed to providing our customers with service unmatched in the safety industry and, in the process, enhancing our ability to provide a growing line of safety solutions for customers in key global markets. Four strategic imperatives drive us toward our goal of building customer loyalty by delivering exceptional levels of protection, quality, and value:

• Achieve sustainable growth through product leadership;

• Expand market penetration through exceptional customer focus;

• Control costs and increase efficiency in asset utilization; and

• Build the depth, breadth, and diversity of our global team.

We tailor our product offerings and distribution strategy to satisfy distinct customer preferences that vary across geographic regions. We believe that we best serve these customer preferences by organizing our business into three geographic segments: North America, Europe, and International. Each segment includes a number of operating companies. In 2008, approximately 52%, 25%, and 23% of our net sales were made by our North American, European, and International segments, respectively.

North America. Our largest manufacturing and research and development facilities are located in the United States. We serve our North American markets with sales and distribution functions in the U.S., Canada, and Mexico.

Europe. Our European segment includes well-established companies in most Western European countries and more recently established operations in a number of Eastern European locations. Our largest European companies, based in Germany and France, develop, manufacture, and sell a wide variety of products. Operations in other European countries focus primarily on sales and distribution in their respective home country markets. While some of these companies may perform limited production, most of their sales are of products that are manufactured in our plants in Germany, France, and the U.S., or are purchased from third party vendors.

RESULTS OF OPERATIONS

Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008

Net sales. Net sales for the three months ended June 30, 2009 were $227.2
million, a decrease of $66.0 million, or 22%, compared with $293.2 million for
the three months ended June 30, 2008.



                              Three Months Ended
                                    June 30            Dollar        Percent
            (In millions)      2009         2008      Decrease       Decrease
            North America   $    112.4    $   148.7   ($   36.3 )         (24 %)
            Europe                55.8         76.9       (21.1 )         (27 )
            International         59.0         67.6        (8.6 )         (13 )

Net sales by the North American segment were $112.4 million for the second quarter of 2009, a decrease of $36.3 million, or 24%, compared to $148.7 million for the second quarter of 2008. The decrease continues to reflect the effects of the economic recession, which has led to reduced end-user demand, especially in construction, oil and gas, and other industrial markets. Sales of self-contained breathing apparatus (SCBA) were $12.2 million lower during the second quarter of 2009. Second quarter of 2008 SCBA shipments included $12.6 million of our Firehawk ® M7 Responder to the U.S. Air Force. Excluding these shipments, SCBA sales were flat quarter-to-quarter. Shipments of Advanced Combat Helmets to the U.S. military and CG634 helmets to the Canadian Forces were $8.8 million and $3.9 million lower, respectively, as certain contracts wound down or were completed. Shipments of head protection and fall protection were down $6.6 million and $2.4 million, respectively, as the effects of the economic recession reduced demand in construction and industrial markets.

Net sales for the European segment were $55.8 million for the second quarter of 2009, a decrease of $21.1 million, or 27%, compared to $76.9 million for the second quarter of 2008. Local currency sales in Europe decreased $8.8 million during the second quarter of 2009. In France, local currency sales of fire helmets and ballistic helmets were down $2.8 million and $1.4 million, respectively, on lower shipments to military and law enforcement customers. In Germany, local currency sales of gas masks were down $3.1 million, on lower shipments to the military. Local currency sales in Eastern Europe were flat quarter-to-quarter. Unfavorable translation effects of weaker European currencies, particularly the euro, in the current quarter decreased European segment sales, when stated in U.S. dollars, by approximately $12.3 million.

Net sales for the International segment were $59.0 million in the second quarter of 2009, a decrease of $8.6 million, or 13%, compared to $67.6 million for the second quarter of 2008. Local currency sales of the International segment were flat for the current quarter. Lower local currency sales in Latin America, Australia, and Africa, primarily due to the effects of the economic recession on the mining industry, were substantially offset by higher sales in China and the Middle East, reflecting our increased presence in those areas. Currency translation effects reduced International segment sales, when stated in U.S. dollars, by $8.3 million, primarily due to a weakening of the Australian dollar, South African rand, and Brazilian real.

Gross profit. Gross profit for the second quarter of 2009 was $85.3 million, which was $26.3 million, or 24%, lower than gross profit of $111.6 million in the second quarter of 2008. The ratio of gross profit to net sales was 37.5% in the second quarter of 2009 compared to 38.1% in the same quarter last year. The lower gross profit ratio in the second quarter of 2009 occurred primarily in the European and International segments and related to sales mix and recessionary pricing pressures.

Selling, general and administrative expenses. Selling, general and administrative expenses were $56.0 million during the second quarter of 2009, a decrease of $12.9 million, or 19%, compared to $68.9 million in the second quarter of 2008. Selling, general and administrative expenses were 24.7% of net sales in the second quarter of 2009 compared to 23.5% of net sales in the second quarter of 2008. Second quarter selling, general and administrative expenses in the North American segment were $21.1 million, a decrease of $7.1 million, or 25%, from $28.2 million in the second quarter of 2008. The decrease was a direct result of cost-savings initiatives that we have taken in response to the effects of the economic recession. Local currency selling, general and administrative expenses in the European and International segments were $0.7 million lower, with expense reductions in the International segment being partially offset by a modest increase in the European segment. Currency exchange effects reduced second quarter 2009 administrative expenses for the European and International segments, when stated in U.S. dollars, by $4.9 million, primarily related to a weaker euro, Australian dollar, and Brazilian real.

Research and development expense. Research and development expense was $7.3 million during the second quarter of 2009, a decrease of $1.9 million, or 21%, compared to $9.2 million during the second quarter of 2008. The decrease reflects cost savings realized by shifting a portion of our research and development efforts to our new China technology center, as well as various other cost reduction initiatives in North America and Europe. Currency exchange effects decreased research and development expense, when stated in U.S. dollars, by $0.5 million.

Restructuring and other charges. During the second quarter 2009, we recorded charges of $1.0 million. Substantially all of these charges were incurred in North America and related to costs associated with layoffs and stay bonuses and other costs associated with our ongoing initiative to transfer certain production activities.

During the second quarter 2008, we recorded charges of $1.1 million. These charges were primarily related to stay bonuses and other costs associated with our initiative to outsource or transfer certain production activities from our Evans City, Pennsylvania plant.

Interest expense. Interest expense was $1.9 million during the second quarter of 2009, a decrease of $0.4 million, or 16%, compared to $2.3 million in the same quarter last year. The decrease in interest expense was due to reductions in both short and long-term debt and lower short-term interest rates.

Currency exchange losses (gains). We reported currency exchange losses of $0.6 million in the second quarter of 2009, compared to gains of $0.1 million in the second quarter of 2008. Currency exchange losses during the second quarter of 2009 were primarily related to the euro and the Mexican peso.

Other income. Other income for the second quarter of 2009 was $0.7 million, a reduction of $0.8 million, compared to $1.5 million in the second quarter of 2008. Other income for the second quarter of 2008 included a gain of $0.7 million on the sale of property in France.

We file a U.S. federal income tax return along with various state and foreign income tax returns. Examinations of our federal returns have been completed through 2004. We also file in various state and foreign jurisdictions that may be subject to tax audits after 2003.

Net income attributable to Mine Safety Appliances Company. Net income attributable to Mine Safety Appliances Company for the second quarter of 2009 was $12.5 million, or $0.35 per basic share, compared to $20.0 million, or $0.56 per basic share, for the same quarter last year.

North American segment net income for the second quarter of 2009 was $10.9 million, a decrease of $0.7 million, or 6%, compared to $11.6 million in the second quarter of 2008. The decrease reflects the negative effect of a 24% decrease in sales, which was substantially offset by the positive effect of our ongoing efforts to reduce operating expenses.

European segment net income for the second quarter of 2009 was $0.4 million, a decrease of $4.4 million, or 91%, compared to net income of $4.8 million during the second quarter of 2008. The decrease in European segment net income was primarily related to the previously-discussed decrease in sales. Currency translation effects reduced European segment net income, when stated in U.S. dollars, by approximately $1.1 million.

International segment net income for the second quarter of 2009 was $1.5 million, a decrease of $2.1 million, or 59%, compared to $3.6 million in the same quarter last year. The decrease in International segment net income was primarily related to the previously-discussed decrease in sales. Currency translation effects decreased current quarter international segment net income, when stated in U.S. dollars by approximately $0.9 million.

Six Months Ended June 30, 2009 Compared to Six Months Ended June 30, 2008

Net sales. Net sales for the six months ended June 30, 2009 were $445.4 million,
a decrease of $114.1 million, or 20%, compared with $559.5 million for the six
months ended June 30, 2008.



                               Six Months Ended
                                    June 30            Dollar        Percent
            (In millions)      2009         2008      Decrease       Decrease
            North America   $    223.1   $    295.3   ($   72.2 )         (24 %)
            Europe               112.8        137.3       (24.5 )         (18 )
            International        109.6        126.9       (17.3 )         (14 )

Net sales by the North American segment were $223.1 million for the six months ended June 30, 2009, a decrease of $72.2 million, or 24%, compared to $295.3 million for the same period in 2008. The decrease continues to reflect the effects of the economic recession, which has led to reduced end-user demand, especially in construction, oil and gas, and other industrial markets. In addition, many of our distributors worked-off inventory early in the year, which further reduced the level of orders. Sales of self-contained breathing apparatus (SCBA) were $17.6 million lower during the first half of 2009. SCBA sales during the first half of 2008 included $12.6 million in shipments of our Firehawk® M7 Responder to the U.S. Air Force. Excluding these shipments, SCBA sales were $5.0 million lower in the current period. Shipments of SCBAs to the fire service market were unusually high during the first half of 2008 due to an increase in orders that had been delayed in late 2007 as manufacturers and the fire service market made the transition to a new National Fire Protection Association (NFPA) standard for SCBAs. Fire service market sales of thermal imaging cameras and

Net sales for the European segment were $112.8 million for the six months ended June 30, 2009, a decrease of $24.5 million, or 18%, compared to $137.3 million for the same period in 2008. Local currency sales in Europe decreased $1.6 million for the six months ended June 30, 2009. The decrease in local currency sales reflects higher sales in Eastern Europe, substantially offset by lower sales in France and Germany, where shipments of helmets and gas masks to fire service and law enforcement markets were down $2.7 million and $1.8 million, respectively. Unfavorable translation effects of weaker European currencies, particularly the euro, in the current period decreased European segment sales, when stated in U.S. dollars, by approximately $22.9 million.

Net sales for the International segment were $109.6 million for the six months ended June 30, 2009, a decrease of $17.3 million, or 14%, compared to $126.9 million in the same period in 2008. Local currency sales of the International segment improved $2.7 million during the current period. In China, local currency sales increased $10.2 million, reflecting strong shipments of SCBAs to the Hong Kong Fire Service, as well as a continued focus on growing our business in the region. Local currency sales in Australia and Latin America were down $5.9 million and $4.8 million, respectively, primarily due to the economic recession. Currency translation effects reduced International segment sales, when stated in U.S. dollars, by $20.0 million, primarily related to a weakening of the Australian dollar and the Brazilian real.

Cost of products sold. Cost of products sold was $277.1 million for the six months ended June 30, 2009, compared to $341.6 million in the same period in 2008. Cost of products sold, selling, general and administrative expenses, and research and development expenses include net periodic pension credits during the six month periods ended June 30 2009 and 2008 of $4.2 million and $4.5 million, respectively.

Gross profit. Gross profit for the six months ended June 30, 2009 was $168.3 million, which was $49.6 million, or 23%, lower than gross profit of $217.9 million in the same period in 2008. The ratio of gross profit to net sales was 37.8% in the second quarter of 2009 compared to 39.0% in the same period last year. The lower gross profit ratio in the current period occurred primarily in the European and International segments and related to sales mix and recessionary pricing pressures.

Selling, general and administrative expenses. Selling, general and administrative expenses were $112.9 million during the six months ended June 30, 2009, a decrease of $22.1 million, or 16%, compared to $135.0 million in the same period in 2008. Selling, general and administrative expenses were 25.3% of net sales in the first half of 2009 compared to 24.1% of net sales in the same period last year. First half selling, general and administrative expenses in the North American segment were $45.4 million, a decrease of $11.2 million, or 20%, from $56.6 million in the same period last year. The decrease was a direct result of cost-savings initiatives that we have taken in response to the effects of the economic recession. Local currency selling, general and administrative expenses in the European and International segments were $0.8 million lower in the current period. Currency exchange effects reduced European and International segment administrative expenses for the six months ended June 30, 2009, when stated in U.S. dollars, by $10.5 million, primarily related to a weaker euro, Australian dollar, and Brazilian real.

Restructuring and other charges. During the six months ended June 30, 2009, we recorded charges of $9.1 million. North American segment charges of $8.3 million related primarily to a voluntary retirement incentive program (VRIP). During January 2009, 61 North American segment employees made irrevocable elections to retire under the terms of the VRIP. These employees retired on January 31, 2009. We recorded VRIP non-cash special termination benefits expense of $6.7 million. We expect that staff reductions associated with the VRIP will result in annual pre-tax savings of approximately $5.0 million. The remaining $1.6 million of North American segment charges related primarily to costs associated with layoffs and stay bonuses and other costs associated with our ongoing initiative to transfer certain production activities. International segment charges of $0.8 million were primarily for severance costs related to staff reductions in Brazil, Australia and South Africa.

During the six months ended June 30, 2008, we recorded charges of $2.2 million. These charges were primarily related to stay bonuses and other costs associated with our initiative to outsource or transfer certain production activities from our Evans City, Pennsylvania plant.

Interest expense. Interest expense was $3.8 million during the six months ended June 30, 2009, a decrease of $1.0 million, or 21%, compared to $4.8 million in the same period last year. The decrease in interest expense was due to reductions in both short and long-term debt and lower short-term interest rates.

Currency exchange losses (gains). Currency exchange gains were $0.3 million during the six months ended June 30, 2009, compared to losses of $4.0 million during the same period last year. Currency exchange losses during the first half of 2008 were mostly unrealized, and related to the effects of a stronger euro and a weaker South African rand on inter-company balances and losses on Canadian dollar trade receivables.

Other income. Other income for the six months ended June 30, 2009 was $1.5 million, a reduction of $1.0 million, compared to $2.5 million in the same period last year. Other income for the first six months of 2008 included a gain of $0.7 million on the sale of property in France.

Income taxes. The effective tax rate for the six months ended June 30, 2009 was 35.1% compared to 37.6% for the same period last year. The lower effective tax rate in the current quarter reflects a more favorable non-U.S. tax rate and a lower U.S. rate due to the reinstatement of the research and development tax credit. The income tax provision for the six months ended June 30, 2008 also included a one-time charge of $0.4 million in Germany, related to a tax law change that imposed a 3% flat tax on previously untaxed subsidies.

We file a U.S. federal income tax return along with various state and foreign income tax returns. Examinations of our federal returns have been completed through 2004. We also file in various state and foreign jurisdictions that may be subject to tax audits after 2003.

Net income attributable to Mine Safety Appliances Company. Net income attributable to Mine Safety Appliances Company for the six months ended June 30, 2009 was $19.7 million, or $0.55 per basic share, compared to $36.0 million, or $1.01 per basic share, for the same period last year.

European segment net income for the six months ended June 30, 2009 was $2.5 million, a decrease of $3.0 million, or 55%, compared to net income of $5.5 million during the same period last year. The decrease in European segment net income during the first half of 2009 was primarily due to the previously-discussed decrease in sales. Currency translation effects decreased current period European segment net income, when stated in U.S. dollars, by approximately $1.2 million, largely due to the weakening of the euro.

International segment net income for the six months ended June 30, 2009 was $2.1 million, a decrease of $5.0 million, or 71%, compared to $7.1 million during the same period last year. The decrease in International segment net income was primarily related to the previously-discussed decrease in sales. Currency translation effects decreased current period International segment net income, when stated in U.S. dollars by approximately $2.0 million, largely due to the weakening of the Australian dollar and Brazilian real.

The loss of $2.8 million for the six months ended June 30, 2008 reported in reconciling items was primarily related to unrealized currency exchange losses.

LIQUIDITY AND CAPITAL RESOURCES

Our main source of liquidity is operating cash flows, supplemented by borrowings to fund significant transactions. Our principal liquidity requirements are for working capital, capital expenditures, acquisitions, and principal and interest payments on debt. We believe that our financial strength has been evident during the current recession and the continuing crisis in the financial markets. Our long-term debt is primarily at fixed interest rates with manageable repayment schedules through 2022. We recently increased our available credit and currently have over $70.0 million in unused short-term bank lines of credit at competitive interest rates. All of our long-term borrowings and substantially all of our short-term borrowings originate in the U.S., which has limited our exposure to non-U.S. credit markets and to currency exchange rate fluctuations. In addition, we are pursuing actions to improve our cash flow during this period of economic uncertainty. During the first half of 2009, these actions have included a focus on reducing our working capital investment, selective staffing reductions, a salary and hiring freeze in the U.S. and Canada, lower salary increases than in prior years for international employees, and numerous other cost reduction measures. In June 2009, we suspended company matching contributions to the 401K plan and implemented temporary pay reductions for executive and senior level managers. We have significantly reduced our capital expenditure plans, but continue to invest in critical capital projects, such as our new Chinese and Mexican factories.

Cash and cash equivalents increased $11.8 million during the six months ended June 30, 2009, compared to decrease of $8.0 million during the six months ended June 30, 2008.

Operating activities provided cash of $54.8 million during the six months ended June 30, 2009, compared to providing cash of $8.5 million during the six months . . .