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

Net sales. Net sales for the three months ended September 30, 2009 were $228.5
million, a decrease of $57.4 million, or 20%, compared with $285.9 million for
the three months ended September 30, 2008.



                              Three Months Ended
                                 September 30          Dollar        Percent
            (In millions)      2009         2008      Decrease       Decrease
            North America   $    107.1    $   140.8   ($   33.7 )         (24 %)
            Europe                59.4         72.8       (13.4 )         (18 )
            International         62.1         72.3       (10.2 )         (14 )

Net sales by the North American segment were $107.1 million for the third quarter of 2009, a decrease of $33.7 million, or 24%, compared to $140.8 million for the third 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 $11.8 million lower during the third quarter of 2009. Third quarter of 2008 SCBA sales included $13.2 million of our Firehawk ® M7 Responder to the U.S. Air Force. Excluding these shipments, SCBA sales were $1.4 million higher in the current quarter. Shipments of Advanced Combat Helmets to the U.S. military and CG634 helmets to the Canadian Forces were $8.5 million and $2.1 million lower, respectively, reflecting the completion of certain contracts. Shipments of head protection and fall protection were down $6.2 million and $2.8 million, respectively, as the effects of the economic recession reduced demand in construction and industrial markets.

Net sales for the European segment were $59.4 million for the third quarter of 2009, a decrease of $13.4 million, or 18%, compared to $72.8 million for the third quarter of 2008. Local currency sales in Europe decreased $7.5 million during the third quarter of 2009. In France, local currency sales were $2.5 million lower in the current quarter. Third quarter 2008 sales in France included a one-time shipment of $3.3 million ballistic vests to the military. In Germany, local currency sales were down $2.1 million in the current quarter, reflecting a $3.6 million decrease in sales of gas masks, primarily to the military, partially offset by a $2.7 million increase in shipments of SCBAs. Local currency sales in Eastern Europe were $1.6 million lower in the current 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 $5.9 million.

Net sales for the International segment were $62.1 million in the third quarter of 2009, a decrease of $10.2 million, or 14%, compared to $72.3 million for the third quarter of 2008. Local currency sales decreased in the International segment by $6.7 million. Lower local currency sales in Australia, Latin America, and Africa, primarily due to the effects of the economic recession, were partially offset by

Cost of products sold. Cost of products sold was $145.4 million in the third quarter of 2009, compared to $177.2 million in the third quarter of 2008. Cost of products sold, selling, general and administrative expenses, and research and development expenses include net periodic pension credits during the third quarters of 2009 and 2008 of $2.0 million and $2.3 million, respectively.

Gross profit. Gross profit for the third quarter of 2009 was $83.1 million, which was $25.6 million, or 24%, lower than gross profit of $108.7 million in the third quarter of 2008. The decrease reflects the previously discussed reduction in sales and a lower gross profit percentage. The unfavorable translation effects of weaker foreign currencies reduced gross profit, when stated in U.S. dollars by $3.7 million. The ratio of gross profit to net sales was 36.4% in the third quarter of 2009 compared to 38.0% in the same quarter last year. The lower gross profit ratio in the third quarter of 2009 occurred in the European and International segments and related to sales mix, lower production volumes, and recessionary pricing pressures.

Selling, general and administrative expenses. Selling, general and administrative expenses were $57.3 million during the third quarter of 2009, a decrease of $10.6 million, or 16%, compared to $67.9 million in the third quarter of 2008. Selling, general and administrative expenses were 25.1% of net sales in the third quarter of 2009 compared to 23.8% of net sales in the third quarter of 2008. Third quarter selling, general and administrative expenses in the North American segment were $21.0 million, a decrease of $4.2 million, or 17%, from $25.2 million in the third quarter of 2008. Local currency selling, general and administrative expenses in the European and International segments were $4.1 million lower in the third quarter 2009. Lower selling, general and administrative expenses in the current quarter were a direct result of cost-saving initiatives that we have taken in response to the effects of the economic recession. Currency exchange effects reduced third quarter 2009 administrative expenses in the European and International segments, when stated in U.S. dollars, by $2.3 million, primarily related to a weaker euro, Australian dollar, and Brazilian real.

Research and development expense. Research and development expense was $7.1 million during the third quarter of 2009, a decrease of $2.4 million, or 25%, compared to $9.5 million during the third 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 were not significant.

Restructuring and other charges. During the third quarter 2009, we recorded charges of $0.8 million. Charges of $0.4 million 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. The remainder of the charges related to staffing reductions in Europe.

During the third quarter 2008, we recorded charges of $1.0 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 $1.7 million during the third quarter of 2009, a decrease of $0.6 million, or 27%, 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.

Income taxes. The third quarter 2009 provision for income taxes includes a tax benefit of $1.0 million to recognize a deferred tax asset related to net operating losses in South Africa. This benefit was

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 2005. 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 third quarter of 2009 was $11.0 million, or $0.31 per basic share, compared to $17.9 million, or $0.50 per basic share, for the same quarter last year.

North American segment net income for the third quarter of 2009 was $10.8 million, a decrease of $0.2 million, or 2%, compared to $11.0 million in the third quarter of 2008. The small 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.

The European segment reported a net loss of $1.7 million for the third quarter of 2009, compared to net income of $2.4 million during the third quarter of 2008. The decrease in European segment income was primarily related to the previously-discussed decrease in sales and gross profits. Currency translation effects reduced European segment net income, when stated in U.S. dollars, by approximately $0.3 million.

International segment net income for the third quarter of 2009 was $2.3 million, a decrease of $1.1 million, or 32%, compared to $3.4 million in the same quarter last year. The decrease in International segment net income was primarily related to the decrease in sales, partially offset by the previously discussed one-time tax benefit recorded in South Africa. Currency translation effects decreased current quarter international segment net income, when stated in U.S. dollars by approximately $0.3 million.

Net income of $1.2 million reported in reconciling items for the third quarter of 2008 was primarily related to unrealized currency exchange gains.

Nine Months Ended September 30, 2009 Compared to Nine Months Ended September 30, 2008

Net sales. Net sales for the nine months ended September 30, 2009 were $673.9 million, a decrease of $171.5 million, or 20%, compared with $845.4 million for the nine months ended September 30, 2008.

                              Nine Months Ended
                                 September 30          Dollar        Percent
           (In millions)      2009          2008      Decrease       Decrease
           North America   $    330.1    $    436.1   ($  106.0 )         (24 %)
           Europe               172.1         210.1       (38.0 )         (18 )
           International        171.6         199.3       (27.7 )         (14 )

Net sales by the North American segment were $330.1 million for the nine months ended September 30, 2009, a decrease of $106.0 million, or 24%, compared to $436.1 million for the same period in 2008. The decrease reflects 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,

Net sales for the European segment were $172.1 million for the nine months ended September 30, 2009, a decrease of $38.0 million, or 18%, compared to $210.1 million for the same period in 2008. Local currency sales in Europe decreased $9.1 million for the nine months ended September 30, 2009. In France, local currency sales were $3.8 million lower in the current period, reflecting a $5.2 million decrease in shipments of ballistic vests and helmets to the military. This decrease was partially offset by a $1.6 million increase in sales of disposable respirators, primarily in response to the swine flu epidemic. In Germany, local currency sales were $6.2 million lower in the current period, reflecting a $5.3 million decrease in shipments of gas masks, primarily to the military. Local currency sales in Eastern Europe improved $2.0 million in the current period. 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 $28.9 million.

Net sales for the International segment were $171.6 million for the nine months ended September 30, 2009, a decrease of $27.7 million, or 14%, compared to $199.3 million in the same period in 2008. Local currency sales of the International segment decreased $4.2 million during the current period. In China, local currency sales increased $12.6 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 $9.4 million and $7.2 million, respectively, primarily due to the economic recession. Currency translation effects reduced International segment sales, when stated in U.S. dollars, by $23.5 million, primarily related to a weakening of the Australian dollar, South African rand, and Brazilian real.

Cost of products sold. Cost of products sold was $422.5 million for the nine months ended September 30, 2009, compared to $518.8 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 nine month periods ended September 30, 2009 and 2008 of $6.2 million and $6.8 million, respectively.

Gross profit. Gross profit for the nine months ended September 30, 2009 was $251.4 million, which was $75.3 million, or 23%, lower than gross profit of $326.7 million in the same period in 2008. The decrease reflects the previously discussed reduction in sales and a lower gross profit percentage. The unfavorable translation effects of weaker foreign currencies reduced gross profit, when stated in U.S. dollars, by $20.6 million. The ratio of gross profit to net sales was 37.3% in the current period compared to 38.6% 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, lower production volumes, and recessionary pricing pressures.

Research and development expense. Research and development expense was $21.4 million during the nine months ended September 30, 2009, a decrease of $4.6 million, or 18%, compared to $26.0 million during the same period last year. 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 reduced research and development expense, when stated in U.S. dollars, by $1.0 million.

Restructuring and other charges. During the nine months ended September 30, 2009, we recorded charges of $9.9 million. North American segment charges of $8.7 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 to result in annual pre-tax savings of approximately $5.0 million. The remaining $2.0 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. European and International segment charges of $0.4 and $0.8 million, respectively, were primarily for severance costs related to staff reductions in Germany, Brazil, Australia and South Africa.

During the nine months ended September 30, 2008, we recorded charges of $3.3 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 $5.4 million during the nine months ended September 30, 2009, a decrease of $1.7 million, or 23%, compared to $7.1 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 (gains) losses. Currency exchange gains were $0.3 million during the nine months ended September 30, 2009, compared to losses of $3.1 million during the same period last year. Currency exchange losses during the nine months ended September 30, 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 nine months ended September 30, 2009 was $1.7 million, a reduction of $2.4 million, compared to $4.1 million in the same period last year. The decrease was primarily due to lower interest income and gains on property sales. Other income for the first nine months 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 2005. 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 nine months ended September 30, 2009 was $30.6 million, or $0.86 per basic share, compared to $53.9 million, or $1.51 per basic share, for the same period last year.

North American segment net income for the nine months ended September 30, 2009 was $25.4 million, a decrease of $11.8 million, or 32%, compared to $37.2 million in the same period last year. North American segment net income for the nine months ended September 30, 2009 includes a $4.4 million after-tax non-cash charge related to the voluntary retirement incentive program that was completed in January. Excluding this one-time charge, North American segment net income was down $7.4 million in the current period. The decrease reflects the negative effect of a 24% decrease in sales, partially offset by the positive effect of our ongoing efforts to reduce operating expenses.

European segment net income for the nine months ended September 30, 2009 was $0.8 million, a decrease of $7.1 million, or 89%, compared to net income of $7.9 million during the same period last year. The decrease in European segment net income during the nine months ended September 30, 2009 was primarily due to the previously discussed decrease in sales and gross margins. Currency translation effects decreased current period European segment net income, when stated in U.S. dollars, by approximately $1.4 million, largely due to the weakening of the euro.

International segment net income for the nine months ended September 30, 2009 was $4.3 million, a decrease of $6.2 million, or 58%, compared to $10.5 million during the same period last year. The decrease in International segment net income during the nine months ended September 30, 2009 was primarily related to the decrease in sales, partially offset by the previously discussed one-time tax benefit recorded in South Africa. Currency translation effects decreased current period International segment net income, when stated in U.S. dollars by approximately $2.3 million, largely due to the weakening of the Australian dollar and Brazilian real.

The loss of $1.6 million reported in reconciling items for the nine months ended September 30, 2008 was primarily related to unrealized currency exchange losses.

. . .