MSA Safety Incorporated

Good day and welcome to the MSA Safety fourth quarter and full year 2025 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 1 on your touch-tone 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 fourth quarter and full year 2025 earnings conference call. This is Larry DeMaria, Executive Director of Investor Relations. I'm joined by Steve Blanco, President and CEO, Julie Beck, Senior Vice President and CFO, and Stephanie Shulo, President of our America segment. During today's call, we'll discuss MSA's fourth quarter and full year 2025 financial results and provide our full year 2026 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. MSA 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 Arrested 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 the fourth quarter and full year 2025 financial performance and 2026 outlook. Steve will then provide his strategic priorities for 2026 for giving closing remarks. You'll then 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. I'm on slide six. We executed well within a challenging environment for 2025. We had a solid finish to the year, guided by our accelerate strategy, centered on serving MSA's mission for our customers and protecting over 40 million workers worldwide who trust the MSA brand. Just within the last month, I've learned about two separate customer save stories where our solutions helped save lives. First, a worker at a water treatment facility was alerted to a flammable gas alarm by his Altair 5X portable gas detector, enabling evacuation before the fire occurred. It's why customers count on the MSA brand, fast response, reliability, and durability in the real world. We also heard directly from a firefighter wearing our globe turnout gear when he was engulfed by a flashover as he entered a structure. As he told us afterwards, quote, in a moment where everything went wrong, your gear did exactly what it was designed to do and did it when it mattered most, unquote. Dave's stories like these remind us all at MSA the importance of fulfilling our mission. Now for our business update on the fourth quarter and full year. Our fourth quarter results reflected strong free cash flow, low single-digit reported sales growth, mid single-digit adjusted earnings growth, and sequential improvement in operating margins. Quarterly consolidated reported sales growth was 2%, with a 3% organic decline, a 3% contribution from M&A, and 2% favorable FX. Adjusted earnings per share were $2.38. Organic sales performance in the quarter was driven by continued strength in detection, which was offset by a decline in the fire service, while industrial PPE was up modestly. The MNC Tech Group acquisition contributed $15 million to the quarter. Looking at sales by product categories, detection's 17% organic growth was driven especially by strength in fixed, while portable instruments also continued their growth. This growth was primarily driven by excellent performance in the Americas as we completed delivery of several large orders. Organic sales in fire service declined 21% year-over-year. The U.S. market dynamics surrounding AFG funding and the U.S. government shutdown impacted the timing of SCBA sales in the quarter as expected. We also faced the final tough year-over-year comparisons with U.S. Air Force deliveries. Organic sales of industrial PPE were up 1%. Fall protection moderated from the strong pace we saw in the previous quarters, though it retains a positive outlook. From a full-year perspective, we effectively executed our strategy against a volatile operating environment. Net sales growth for the year was 4% on a reported basis, with 1% on an organic basis and a 2% contribution from M&A. We remain very pleased with MNC's performance and its integration into the MSA family. Order pace across our product categories was healthy, albeit mixed, in the low single digits year over year and reflected the timing dynamics in the fire service. Detection orders were about flat versus the strong FGFD comparison last year, and industrial PPE orders decreased by low single digits, while with fire service orders increasing by low single digits. Order flow improved from the third quarter following the NFPA approval of our newest G1 SCBA, the release of AFG grants, and the reopening of the U.S. government in mid-November. Overall backlog remains healthy and consistent with historical levels, and we have a solid commercial pipeline. Our overall book-to-bill was slightly below one and above the year-ago period. Turning to slide seven. You know how dedicated we are to serving our mission for our customers and delivering innovative products and solutions. As you can imagine, we also have our own MSA culture of safety that we live every day. I'd like to share a couple highlights. In 2025, we delivered world-class safety levels across our organization, finishing the year with zero lost time incidents. In addition, our total recordable incident rate was 0.25. the best rate we've achieved ever. These metrics demonstrate that we live our mission every day at MSA at every facility around the world and further emphasize how doing so enables us to strengthen our culture of safety. I'm extremely proud of the MSA team. A sincere thank you to the team for their dedication and commitment in our endless journey of improvement. Moving to slide eight. We expected 2025 to be a dynamic year when we outlined our accelerate strategy and long-term targets in 2024, and it proved to be just that and more. However, we maintained our diligent focus on strategic execution. I'd like to share a few of our 2025 achievements. First, as we committed to, we delivered above-market growth in our key strategic growth accelerators, with detection up organically low double digits and fall protection up high single digits. Detection is now our largest product category, representing 41% of sales. In addition to the exceptional fixed detection performance, we continue to see growth in both MSA Plus connected and traditional portable solutions. Second, we continue to innovate and bring industry-leading products and solutions to market. This included launch announcements for the Altair IO6 portable gas detector, which advances our MSA Plus ecosystem. the new H2 Fulbrim Type 2 hard hat, our newest globe turnout gear, the G Extreme Pro Jacket, and our latest generation 2025 G1 SCBA, which received NFPA approval in November. Finally, from a financial perspective, we utilized our consistent free cash flow to deploy nearly a half billion dollars into growth investments and returns to our shareholders. We welcomed in and see into the MSA family, increased our share of REIS purchases, raised our dividend for the 55th consecutive year. Going to slide nine. Moving into 2026, we remain confident in our expectations for a number of key markets. That includes fire service for both our domestic and international segments. In North America, we're optimistic about the pipeline of opportunities and continued use of AFG grants in the U.S., which we expect customers to access throughout the first half of the year. Internationally, we continue to see opportunities to gain market share across our regions as our pipeline for our fire service solutions remains strong. In the energy sector, we anticipate strong underlying global demand in 2026 and beyond. We expect to leverage the various investments in this area as well as in the industrial markets. We are well positioned for opportunities across the entire detection portfolio as well as in fall and head protection. With that, I'd now like to turn the call over to Julie to walk through our fourth quarter and full year 2025 results in more detail and our 26th outlook. Julie?