MSA Safety Incorporated

Good day, and welcome to the MSA Safety Third Quarter 2025 Earnings Conference Call. All participants will be in 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 1 on your touchtone phone. To withdraw your question, please press star, then 2. Please note, this event is being recorded. I would now like to turn the conference over to Larry DeMaria. Please go ahead.

Thank you. Good morning and welcome to MSA Safety's third quarter 2025 earnings conference call. This is Larry DiMaria, Executive Director of Best Relations. I'm joined by Steve Blanco, President and CEO, Julie Beck, Senior Vice President and CFO, and Stephanie Shulow, 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 2025 outlook. 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. MSC Safety undertakes no duty to publicly update any forward-looking statements made on this call except as required by law. 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. The presentation and press release are available on our Investor Relations website at investors.msasafety.com. Moving on to today's agenda, Steve will first provide an update on the business. Julie will then review our third quarter plans performance and 2025 outlook. Steve will then provide closing remarks and open the call for your questions. With that, I'll turn the call over to Steve Blanco. Steve?

Thanks, Larry, and good morning, everyone. Thank you for your continued interest in MSA safety. Before we start, first, I'd like to welcome Julie back to MSA. Julie brings extensive experience across all aspects of finance from her previous public and private company experiences. Her leadership and financial acumen will be a tremendous asset to our team. and I'm excited to partner with her in the next chapter of serving our mission of safety for our customers. I also want to extend my heartfelt thanks to Elise Brody for her outstanding leadership and dedication while serving as interim CFO. Elise stepped into the role with grace and professionalism, and her contributions during this transition have been invaluable. So on behalf of the board and the executive team, we're deeply grateful for her continued commitment and support. Please join me in welcoming Julie and thanking Elise for her exceptional work. Now let's move on to our review of the third quarter. I'm on slide four. In the third quarter, consolidated reported sales growth was 8% with 3% organic and adjusted earnings per share were $1.94. Our team continued to perform well, delivering a solid quarter despite encountering stronger than expected near-term headwinds in the fire service. This was based on sustained strength and detection, along with healthy expansion of industrial PPE driven by fall protection. A decline in the fire service partially offset growth. The MNC Tech Group acquisition contributed $15 million for the quarter. We're pleased with MNC's performance thus far and its integration into the MSA business. Looking at sales by product categories, detection's 6% organic growth was driven by strength in both fixed and portable instruments. More than half of absolute growth in portables came from connected devices. Organic sales in fire service declined 3 percent year over year. In the U.S., the market dynamics surrounding AFG funding and the NFPA standard change had a moderate impact on the quarter, while international markets were mixed. Organic sales of industrial PPE increased 7 percent, with growth across all main categories. Fall protection continued its recent strength with double-digit organic growth. Moving to orders, order pace across our product categories was encouraging, albeit mixed. Detection orders were up double digits, and industrial PPE orders increased mid-single digits. A double-digit decline in fire service orders was principally due to the near-term market dynamics in the Americas, as well as the U.S. Air Force comp. I'll address these in more detail in a few minutes. Sequentially, the backlog declined in the third quarter due entirely to timing in the fire service. Overall backlog remains within normalized levels. Moving forward, we expect to see a near-term negative impact from the fire service order pace in the Americas following the U.S. government shutdown. Our overall book to bill was slightly below one. Turning to slide five. I want to provide some notable progress we've made across the pillars of the accelerate strategy in the third quarter before providing an update on the current dynamics surrounding the fire service. First, we continue to strengthen our leadership in industrial safety technology through customer-driven new product development and continued momentum in these key growth accelerators. I'm pleased to note that we've recently introduced the Altair IO6 Multigas Connected Portable Device and a new H2 V-Guard safety helmet at this year's National Safety Congress. The IO6 is the latest example and addition to the MSA Plus platform and is designed for confined space monitoring and sampling solutions. While we do not expect it to provide a significant near-term lift in revenue, we see it as a valuable product that will contribute to the long-term build-out of our connected ecosystem and portable gas detection. The H2 helmet is a full brand type 2 helmet that joins our extensive market leading lineup of industrial safety helmets. And from a growth perspective, we continue to experience the benefits for our investments in our needed now inventory within fall protection, leading to excellent performance in this strategic growth accelerator for the second straight quarter. Centered on customer experience, the organization has been able to decrease lead times and secure new business with better availability. Year-to-date, sales and fall protection are up double digits organically. Second, on the operational and commercial side, we continued to execute our tariff mitigation programs in the third quarter. As a reminder, we are targeting price-cost neutrality in the first half of 2026. We also had another strong quarter for MSA+. I'm pleased to note that not only did we win a sizable competitive tender, but another large customer served as a reference, further emphasizing our solutions benefits and why we remain optimistic about this new customer adoption. Finally, our M&A pipeline remains active, and our strong balance sheet positions us well for growth-oriented deployment and cash returns to shareholders as part of our disciplined capital allocation strategy. Turning to slide six, I'd like to take a moment to provide some insights into the current conditions affecting the fire service market in the Americas, including the timing of AFG funding here in the U.S., our largest market for this product category. As we approach year-end, there are two dynamics for consideration in this market, the NFPA certification process, which usually occurs every five or so years, and the annual release of Federal Assistant to Firefighter Grants, or AFG, which is typically released in the summer months through September. As we've mentioned, NFPA standard years often see increased short-term volatility as customers decide when to renew their fleets. Nothing has changed here, and we still expect to see approval sometime by early 2026, if not sooner. What is different this year is the timing of the funds release for the AFG program. This program, as always, has been fully funded, but award notifications were issued historically late this year, coming at the very end of September. Then, the U.S. government shutdown has slowed funding for the awarded departments. creating additional layers of complexity. This had a moderate effect on our revenue in the third quarter. The larger impact is on order timing in the fire service. The delays in receiving the orders will shift some revenue into 2026. Again, our pipeline remains strong. It's a matter of timing. We've successfully navigated the approval process as before and seen similar market conditions. and we're fully prepared to serve our customers in the fire service and to deliver the products and solutions they need to keep themselves and our community safe. With that, it's now my pleasure to turn the call over to Julie to discuss our financial performance in the third quarter. Julie?