MSA Safety Incorporated

Good day, and welcome to the MSA Safety Third Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist 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 touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Larry DiMaria, Executive Director of Investor Relations. Please go ahead.

Thank you. Good morning and welcome to MSA Safety Third Quarter 2024 earnings conference call. This is Larry DiMaria, Executive Director of Investor Relations. I'm joined by Steve Blanco, President and CEO, Liam Chesney, Senior Vice President and CFO, and Stephanie Shulo, President of our America segment. During today's call, we'll discuss MSA's Third Quarter financial results and provide an update on our full year 2024 outlook. On slide two, 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 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 correlate their actual results to differ materially from those discussed today. These risks, uncertainties, and other factors are detailed in our SEC filings. MSA Safety undertakes no duty to publicly update any forward-looking statements made on this call, except as required by law. Turning to slide three, we've included certain non-GAAP financial measures as part of our discussion this morning. The non-GAAP reconciliations are available in the appendix of today's presentation. Presentation and press release are available on our investor relations website at investors.msasafety.com. I'd now like to turn the call over to Steve Blanco. Steve?

Thanks, Larry, and good morning, everyone. I'm on slide four. Thanks to our team's dedication and hard work, our ability to serve our customers and advance our mission has never been stronger. We continue to be guided by the strategy we outlined earlier this year at our Investor Day to drive profitable growth while judiciously deploying our capital as we work towards our 2028 financial goals. We remain focused on bringing industry-leading safety solutions to our customers around the world. I'll touch on some of our mission-driven innovation accomplishments in a few minutes, but let's first look at some of the third quarter highlights. Overall, we once again demonstrated operational resilience with our quarterly results. For the third quarter, net sales decreased 3% year-over-year on both a reported and organic constant currency basis, and adjusted earnings increased 3%. As we noted in our press release, the decline in sales was largely due to the previously mentioned delivery timing with fire service and some specific customer delays. With that said, we continue to see positive order momentum, and our backlog grew sequentially during the quarter. Orders increased year over year by high single digits, excluding the impact of the U.S. Air Force order in each period. During our earnings call in July, we discussed some aspects of order and delivery timing that could impact the cadence of the second half, including the assistance for firefighter grants or AFG funding. This was released later this year than in 2023 and specifically around the U.S. Air Force SCBA order delivery timing. In final form, the U.S. Air Force schedule has shifted towards the end of the year, but we still expect to deliver most of that order in 2024. While our top line sales number came in below what we planned, the team performed exceptionally well from an operational standpoint, as evidenced by our overall earnings growth and margin performance. The overall demand environment remains healthy, albeit with some choppiness, and we continue to see a strong business pipeline. Moving to our product categories, sales and fire service were down high single digits in the quarter, primarily due to the US Air Force shipping delay and also decline in breathing apparatus sales versus a strong prior year comp that included several large departments, such as LA County. As you know, fire service SCBA order timing can be lumpy. While orders were up year over year, some customer orders have been delayed. At the same time, we retain a solid pipeline in North America, and we continue to have excellent international momentum with our M1 SCBA. In the third quarter, experience continued momentum in fire helmets, with growth of our new Carnes 1836 and our F1XF, as well as turnout gear. Sales and detection were up mid-single digits. Fixed gas and flame detection had a solid quarter, moderately declining compared to last year's robust third quarter growth, with good contribution from our FL5000 flame detector. Portable detection sales continued to perform strongly in both traditional and connected devices, we also continue to see solid margin improvement in our detection business. Industrial PPE sales were down mid-single digits year-over-year as international markets slowed. Head protection was up modestly, while fall protection declined mid-single digits, and we saw continued customer delays in ballistic helmets. Turning to slide five, I'd like to share some innovation highlights from the third quarter. First, I'm proud to note that the Product Development and Management Association named MSA a 2024 Outstanding Corporate Innovator, making us one of only two companies to achieve this distinction twice in the 37-year history of the award. It recognizes companies consistently generating long-term value through exceptional product and service innovation. We were honored in part for our transformation from a safety equipment manufacturer to the global leader in developing and manufacturing advanced safety technologies and solutions. Second, I'd like to briefly highlight our portable detection business. We continue to grow across our diverse detection product category through innovation. Portable sales have grown by nearly 40% over the last two years. While we continue to see strong growth in traditional portable devices, our fastest growing category is connected portables, now including a complete solution set sold through MSA Plus subscriptions. We're signing up new customers and are converting our existing installed base of customers to connected solutions, with most customers selecting durable multi-year contracts. In addition, there are opportunities for service contract add-ons and back-end contract renewals. We expect to see strong profitability from this business that will scale even more over time. Most of these contracts are incremental, with many new customers. We'll discuss connected portables more in the future, but we wanted to highlight the success and strength we've had so far. We're in the early innings of this journey led by our IO4 device, which is the heart of our industrial technology strategy. Finally, MSA is proud of our products and solutions protecting more than 40 million workers annually, demonstrating our team's impact in safety. In the third quarter, We were made aware of two specific cases where MSA's end users were saved from significant injury or death. One case was related to our IO4 gas detector and the other was related to our lunar device and inspire service. These remind us each and every day of our purpose and the importance of our mission that the entire team in MSA is committed to. I want to thank our team for working hard with these customers and our more than 5,000 associates around the world for their dedication to delivering innovative products and solutions that enable us to continue advancing the MSA mission of helping men and women work in safety throughout the world. With that, I'll turn the call over to Lee, who will discuss our financial results for the third quarter. Lee?