MSA Safety Incorporated

Good day, and welcome to the MSA Safety First Quarter 2026 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 touchtone phone. To withdraw your question, please press star, and then two. 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 first quarter 2026 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 Gustavo Lopez, Vice President, Product Strategy and Development. During today's call, we will discuss MSA's first quarter 2026 financial results and provide an update on our full year 2026 outlook. Before we begin, I'd like to remind everyone that the matters discussed today 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 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. These 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 first quarter 2026 financial performance and 2026 outlook. Steve will then provide closing remarks. He will 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. Again, we appreciate your continued interest in MSA safety. I'd like to start with a brief comment on the conflict in the Middle East, which I'll discuss in more detail in a few minutes. While the situation remains volatile, our top priority is the health and safety of our associates in the region. We have an outstanding team, and I'm pleased to report that our employees are safe and we remain close to our customers to ensure their safety needs. We'll continue to prioritize our team's safety while serving our customers and managing the inherent business risks. I'm on slide six. The team achieved a solid start to the year as we continue to execute and deliver on the commitments outlined in our Accelerate strategy. Our first quarter results included consolidated reported sales growth of 10%, with a 3% organic increase and adjusted earnings per share of $1.99, up 18% from last year. Organic sales performance in the quarter was driven by high single-digit performance in the Americas, which was partially offset by a decline in the international segment. Geographically, we saw strong growth in North and Latin America and weakness across our European and Middle Eastern markets. Our results reflect the resilience of our diversified business despite the lower growth environment in Europe and the potential impact due to the Middle East conflict. Looking at sales by product category, organic sales and detection were consistent with the prior year. as double-digit growth in portable gas detection was offset by double-digit declines in fixed monitoring solutions in international. This decline reflects the impact of softer European and Middle Eastern markets. The MNC Tech Group acquisition contributed $15 million to the quarter. Organic sales in fire service increased 3% year-over-year, driven by strength in the Americas. As we expected, SCBA sales partially benefited from AFG funding related to the U.S. government shutdown in late 2025. Organic sales of industrial PPE were up 7% on continued momentum in fall protection and growth in industrial head protection, reflecting healthy performance in our short-cycle businesses and nice momentum in our new H2 hardhats. In international, growth in protected ballistic helmets provided additional tailwinds. Organic orders were also healthy, and in line with normal seasonality and book-to-bill was above one. We're pleased to see the reopening of the Department of Homeland Security, which should further enable fire departments to access the AFG grants that were approved in 2025. Strength was notable in our industrial PPE business, supporting broad-based strength across our short-cycle businesses. Moving to slide seven, we continue to execute our accelerate strategy to drive value for our stakeholders and serve our mission. We're encouraged by the solid start to the year, especially given the challenging operating environment in certain areas of the world. The business demonstrated resilience through top-line growth and margin expansion, with America's strength outpacing international results. We also achieved positive price cost in the first quarter. I'd now like to provide some context on the impact of the conflict in the Middle East. While we've not seen any meaningful business cancellations, in the short term, it's been affecting customer order and delivery patterns in the regions. While the Middle East is a long-term growth market for the MSA, for reference, sales represent about mid-single-digit percentages for our overall business. Now let's pivot to discuss a few strategic highlights from the start of 2026. We continue to innovate and bring industry-leading products and solutions to market. We began shipping our newly launched Altair IO6 Portable Gas Detector which joins the IO4 for expanding our MSA Plus connected ecosystem. The IO6 is a long-term growth opportunity for the business. We continue to see strong demand for both traditional and connected portable offerings. We also announced the launch of the Baccarat X30 and X50 refrigerant monitoring solutions. These fixed gas detectors were designed to help customers comply with regulations around refrigerant gas monitoring and leak detection. The launch of these new solutions expand upon our end-to-end refrigerant management and monitoring offerings in the HVAC-R market. From a financial perspective, we announced a new $500 million share repurchase authorization in February, which we began to execute on in the first quarter. This authorization reflects our commitment to our disciplined and balanced capital allocation strategy. Finally, I recently attended the Fire Department Instructors Conference, FDIC, in Indianapolis, where it was my pleasure to interact with our customers, channel partners, and the MSA fire service team. It was inspiring to showcase MSA's extensive solutions for the fire service and our commitment to continued innovation through the connected firefighter platform of the future. Along with our globe apparel business and Karn's protective helmets, we once again demonstrated the strength of our market-leading head-to-toe fire service solutions. Industry feedback was excellent. Moving to slide eight. I'm pleased to share that we've signed a definitive agreement to acquire Etronica Fire and Security in a transaction valued at $555 million. We expect the deal to close in the third quarter. Optronica is a leader in fire and gas detection systems and is highly complementary to our existing fixed detection portfolio. The acquisition is well aligned with MSA's mission and accelerate strategy, including our financial and strategic M&A objectives. With a history of mid-single-digit plus sales growth, the company generated 2025 sales of approximately $160 million and adjusted EBITDA margins of about 20%. Through numerous synergy opportunities, we expect to increase adjusted EBITDA margin to meet or exceed the corporate average over the next several years. From a balance sheet perspective, the transaction implies pro forma net leverage of approximately two times a close, well within our target range. We expect to finance the acquisition through a combination of cash on hand and our revolving credit facility. and we remain well-positioned to invest in our business and deliver post-close while maintaining a healthy M&A pipeline. Strategically, this business is a great fit with our existing fixed detection platform. It is accretive to growth and enhances MSA's ability to participate earlier in project design to deliver more integrated fixed gas and flame detection solutions. It also expands our addressable market by $3 billion, and is similar to our existing detection business from a customer, technology, distribution, and regulatory perspective. Moving to slide nine, Atronica is a leader in mission-critical gas and flame detection technologies used across diverse end markets, including critical infrastructure, energy, and marine. Headquartered in Trondheim, Norway, the company was founded in 1957 and is known for its technology leadership and growth mindset. deep customer intimacy, and a large installed base, underpinned by a mission of safety. These attributes align closely with MSA's culture and our strategy. Atronica serves markets around the world with a strong footprint across the Nordic countries and the rest of Europe, with other businesses across the globe. And it complements and strengthens our global footprint with its world-class brands, And like MNC, we expect to enable growth in markets where MSA is stronger, most notably in the Americas, by leveraging distribution and relationships. I look forward to welcoming the Autronica team to the MSA family upon closing the deal sometime in the third quarter. With that, I'd like to turn the call over to Julie to walk us through the financial results for the first quarter in more detail and our 2026 outlook.