Summary of MSA Safety Q4 2025 Earnings Call

1Key Financial Results and Metrics

Q4 2025 Results::

Reported sales: $511 million, up 2% year-over-year.

Organic sales: Declined 3%.

Adjusted earnings per share (EPS): $2.38, a 6% increase from the previous year.

GAAP net income: $87 million, or $2.21 per diluted share.

Gross margin: 46.9%, consistent with the previous year.

Free cash flow: $106 million in Q4, totaling $295 million for the year, with a conversion rate of 106%.

Full Year 2025 Results::

Total net sales: $1.9 billion, up 4% (1% organic growth).

Adjusted operating margin: 22.1%, down 80 basis points from last year.

Adjusted diluted EPS: $7.93, up 3% year-over-year.

Net debt: $416 million, down $43 million sequentially.

2Strategic Updates and Business Highlights

MSA's Accelerate strategy focused on customer safety and innovation, leading to significant product launches, including the ALTAIR io 6 portable gas detector and new Globe turnout gear.

Detection products experienced strong growth, with a 17% organic increase, driven by large orders and a strong performance in the Americas.

The M&C TechGroup acquisition contributed $15 million to Q4 sales and was well integrated into MSA's operations.

The company achieved a record safety performance with 0 lost time incidents and a total recordable incident rate of 0.25.

3Forward Guidance and Outlook

For 2026, MSA anticipates mid-single-digit organic growth, with M&C expected to contribute approximately 1 percentage point to revenue growth.

The company expects ongoing momentum in detection and fall protection, with pricing actions taken in 2025 to support margins.

The first quarter is typically the lowest for sales, with expectations for stronger performance in the second half of the year.

4Bad News, Challenges, or Points of Concern

Organic sales in the fire service segment declined 21% in Q4 due to U.S. government shutdown impacts and timing issues related to AFG funding.

The overall book-to-bill ratio was slightly below 1, indicating potential future sales challenges.

Adjusted operating margins decreased due to inflation, tariffs, and lower volumes, with a focus on achieving price/cost neutrality in 2026.

5Notable Q&A Insights

Detection Growth:: The strong performance in detection was attributed to large orders, with expectations for mid-single-digit revenue growth in 2026 despite tougher comparisons.

Fire Service Dynamics:: Delays in fire service orders from 2025 are expected to positively impact the first half of 2026, with a return to more typical demand patterns anticipated.

Margin Outlook:: MSA aims for sequential margin improvements in 2026, with a focus on recovering price/cost neutrality and returning to long-term margin targets.

Market Conditions:: There is cautious optimism regarding short-cycle businesses, with improving demand signals and a positive outlook for industrial markets in 2026. Overall, MSA Safety demonstrated resilience in a challenging environment, with strategic initiatives supporting growth while navigating headwinds in specific segments. The outlook for 2026 remains cautiously optimistic, with a focus on operational efficiency and market opportunities.