O.S.,
I will let Karl Adam, from his classic work “The Spirit of Catholicism”, explain this to you.
"If we would interpret correctly the Catholic doctrine that there is no salvation outside the Church, that is to say if we would understand it as the Church would have it understood, we should grasp its history and its connection with the rest of her teaching. For no Catholic doctrine is an isolated mass of thought, but has on the contrary its proper place and meaning in the whole unitary system and cannot be fully appreciated except through the whole system.
To begin with, it is certain that the declaration that there is no salvation outside the Church is not aimed at individual non-Catholics, at any persons as persons, but at non-Catholic churches and communions, in so far as they are non-Catholic communions. Its purpose is to formulate positively the truth that there is but one Body of Christ and therefore but one Church which possesses and imparts the grace of Christ in its fullness. Stated otherwise the declaration would run: Every separated church which sets itself up against the original Church of Christ stands outside the communion of Christ’s grace. It cannot be a mediator of salvation. So far as it is a separate and antagonistic church, it is essentially unfruitful as regards the supernatural life. So that the spiritual unfruitfulness which is predicated in the doctrine is not to be affirmed of the individual non-Catholic, but primarily of non-Catholic communions as such. By that which constitutes their separateness and differentiates them in faith and worship from the Catholic Church, they are able to awaken no supernatural life. Therefore, in so far as they are un-Catholic and anti-Catholic, that is to say in regard to their distinct character, they are not able to claim the honorable title of a “mother” church.
In saying so much we have already indicated the second dogmatic qualification which the proposition receives within the system of Catholic doctrine. For non-Catholic communions are not merely non-Catholic and anti-Catholic. When they set themselves up against the original Church of Christ, they took over and maintained a considerable amount of the Catholic inheritance, and also a certain Catholic means of grace, in particular the sacrament of Baptism. They are therefore, if we regard them as a whole, not mere antithesis and negation, but also to a large extent thesis and affirmation of the ancient treasure of truth and grace that has come down to us from Christ and the apostles. Their churches are built not only of their own un-Catholic materials, but also of Catholic stuff fro the original store of salvation. And insofar as they are genuinely Catholic in their faith and worship, it can and will and must happen that there should be, even outside the VISIBLE [emph. mine] Church, a real growth and progress in union with Christ. So is the promise of Jesus fullfilled: “And other sheep I have that are not of this fold” (John 10:16). Wherever the gospel of Jesus is faithfully preached, and wherever Baptism is conferred with faith in His Holy Name, there His grace can operate .