MSA Safety Incorporated

Good day and welcome to the MSA fourth quarter 2021 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal conference specialists by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I'd now like to turn the conference over to Chris Hepler. Please go ahead.

Thank you, Jason. Good morning and welcome to MSA's fourth quarter and full year 2021 earnings conference call. This is Chris Hepler, Executive Director of Corporate Development and Investor Relations. I'm here with Nish Vartanian, Chairman, President, and CEO, Ken Krause, Senior Vice President, CFO and Treasurer, Steve Blanco, President of Americas, and Bob Lenin, President of International. Before we begin, I'd like to remind everyone that the matters discussed during this call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include but are not limited to all projections and anticipated levels of future performance. Forward-looking statements involve a number of risks, uncertainties, and other factors that may cause our actual results to differ materially from those discussed today. These risks, uncertainties, and other factors are detailed in our SEC filings. MSA undertakes no duty to publicly update any forward-looking statements made on this call, except as required by law. We have included certain non-GAAP financial measures as part of our discussion this morning, and the non-GAAP reconciliations, as well as our 2021 fourth quarter and full-year press release, are available on our investor relations website at investors.msasafety.com. Moving to today's agenda, Nish will discuss key highlights of the fourth quarter and full year. He will then turn the call over to Ken to discuss our financial performance. Nish will conclude with closing remarks. And then we will open up the call to questions. With that, I'll turn the call over to Nish.

Thanks, Chris, and good morning, everyone. On today's call, I'll start with an overview of the fourth quarter and also talk about the trends we're seeing in the market. Ken will then provide a more detailed financial review After that, both Steve Blanco, President of the Americas, and Bob Lienen, President of International, will join us for a Q&A session. And it's nice to have Bob back in the U.S. for a couple weeks. We delivered a very strong fourth quarter, despite ongoing supply chain constraints, a challenging backdrop of rising inflation, and the evolving impacts of COVID-19. I'm very pleased with our team's disciplined execution in navigating these headwinds, In the fourth quarter, we achieved all-time records across many of our key financial metrics. Our quarterly revenue of $410 million was a record, up 6% from a year ago, driven by acquisitions and strong growth in industrial personal protective equipment. And we achieved a record 19.5% adjusted operating margin in the quarter, up 150 basis points over the prior year. This is evidence of the progress we're making toward our aspirational goal of 20% plus operating margins. Demand for our life-protecting products and technologies remains strong, and our backlog continues to trend at record levels as a result of a solid order pace and supply chain challenges. Backlog ended the year up more than $70 million from a year ago. impacting gap numbers in a quarter was MSA LLC's non-cash charge, which Ken will discuss in more detail. As we continue to manage through the ongoing impacts of the pandemic, I want to again recognize and thank our entire global workforce for their tremendous commitment to delivering safety solutions to our customers around the world. At MSA, our greatest asset is our people. Their commitment and dedication to the MSA mission were evident and our strong year-end performance. I also want to recognize the significant progress we're making on margins in international. In the fourth quarter, adjusted operating margin was very strong at 19.9%. To provide context on our progress with international, back in 2017, we set a goal to improve our operating margin performance. Since then, we've transformed the business to be more efficient, agile, and customer-focused. Our international team has done an excellent job of managing costs, driving productivity improvements, and focusing sales efforts on the geographies and markets where we can deliver the greatest level of value. That has resulted in nearly 400 basis points of margin expansion over the past four years. But they're not done. Our international team continues to execute programs to drive further growth and profitability as we bring leading solutions to our customers' greatest challenges. Shifting focus now to our full year, our total revenue for 2021 increased 4% to $1.4 billion. Core product revenue was up 2% on an organic constant currency basis, and the acquisitions of Bacarac and Bristol Uniforms added 5% growth. This was offset by lower sales of respiratory products, which returned to normalized pre-pandemic levels. Our adjusted operating margin for the year was 17.2%. I noted on our third quarter call that our order book was strengthening and that continued to be the case as we closed out the year and throughout January. As we saw in the first three quarters of the year, our incoming orders exceeded revenue again in the fourth quarter. Incoming orders were up mid-single digits when compared against both 2020 and pre-pandemic 2019 levels. We saw solid demand across our portfolio, but the largest drivers were industrial personal protective equipment, SCBA, fixed gas and flame detection, and turnout gear. Supply chain disruptions and labor constraints did impact our ability to ship some product in the quarter. As we look forward in 2022, we expect challenges related to supply chain inflation and COVID-19 to continue. Specifically related to the supply chain, the availability of electronic components is worsening. which could impact our ability to deliver certain products in the near term. Yet, even with these challenges, I'm enthusiastic that our company is well positioned to navigate through this environment and continue creating value long term. And here's why. First, the exciting work our team is doing on the product development front and the new technologies we're bringing to the safety market. Second, our relentless focus on continuous improvement as evidence by what we were able to accomplish in a quarter, including the very meaningful improvements in international segments profitability. And third, our team's unwavering commitment to the MSA mission of protecting lives. We've all been tested throughout this pandemic, but the resilience of our team and their overall respect for the health and wellbeing of each other and understanding that what we do every day does make an impact in people's lives are important qualities of the MSA culture. and all played a part in our success in 2021. Before I turn the call over to Ken, I want to mention one other achievement in the fourth quarter that made us particularly proud. For the first time, MSA was named one of America's most responsible companies 2022 by Newsweek. The Newsweek list highlights organizations spanning 14 industries that strive to be excellent corporate citizens. They were selected from a list of candidates that include the top 2,000 public companies headquartered in the United States based on revenue. As a company that's focused exclusively on helping to protect workers, corporate responsibility has been at the heart of the MSA mission since our founding in 1914. We're dedicated to that mission of protecting lives around the world and are also proud of our progress in the area of talent development, diversity and inclusion, environmental sustainability, governance and risk, We work to evolve and improve these programs each year to build greater resiliency and adaptability into our overall business model. So again, gaining this kind of recognition was a proud moment for all of our associates, and I hope for our shareholders as well. With that, I'll now turn the call over to Ken to take you through our quarterly financial results. Ken?