MSA Safety Inc 10-Q

Item 1. Financial Statements MSA SAFETY INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME Unaudited Three Months Ended June 30, Six Months Ended June 30, (In thousands, except per share values) 2025 2024 2025 2024 Net sales $ 474,116 $ 462,463 $ 895,456 $ 875,765 Cost of products sold 253,406 239,434 481,351 457,205 Gross profit 220,710 223,029 414,105 418,560 Selling, general and administrative 112,078 105,075 206,042 199,226 Research and development 16,996 17,070 32,665 32,988 Restructuring charges (Note 4) 488 1,543 2,412 4,560 Currency exchange losses (gains), net 5,286 ( 603 ) 9,363 1,730 Operating income 85,862 99,944 163,623 180,056 Interest expense 8,116 9,664 14,951 20,403 Other income, net ( 5,000 ) ( 4,148 ) ( 12,022 ) ( 10,382 ) Total other expense, net 3,116 5,516 2,929 10,021 Income before income taxes 82,746 94,428 160,694 170,035 Provision for income taxes (Note 11) 19,973 22,194 38,316 39,662 Net income $ 62,773 $ 72,234 $ 122,378 $ 130,373 Earnings per share attributable to common shareholders (Note 10): Basic $ 1.60 $ 1.83 $ 3.11 $ 3.31 Diluted $ 1.59 $ 1.83 $ 3.10 $ 3.30 Dividends per common share $ 0.53 $ 0.51 $ 1.04 $ 0.98 The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. -3- Table of Contents MSA SAFETY INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Unaudited Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2025 2024 2025 2024 Net income $ 62,773 $ 72,234 $ 122,378 $ 130,373 Other comprehensive gain (loss), net of tax: Foreign currency translation adjustments (Note 7) 44,143 ( 8,822 ) 66,680 ( 19,495 ) Pension and post-retirement plan adjustments, net of tax (Note 7) 242 2,022 443 2,396 Reclassification of currency translation from accumulated other comprehensive loss into net income (Note 7) — ( 1,200 ) — ( 1,200 ) Total other comprehensive gain (loss), net of tax 44,385 ( 8,000 ) 67,123 ( 18,299 ) Comprehensive income $ 107,158 $ 64,234 $ 189,501 $ 112,074 The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. -4- Table of Contents MSA SAFETY INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS Unaudited (In thousands) June 30, 2025 December 31, 2024 Assets Cash and cash equivalents $ 146,988 $ 164,560 Trade receivables, less allowance for credit loss of $ 9,688 and $ 8,047 333,754 279,213 Inventories (Note 5) 343,883 296,796 Prepaid expenses and other current assets 62,836 62,461 Total current assets 887,461 803,030 Property, plant and equipment, net (Note 6) 279,419 211,865 Operating lease right-of-use assets, net 57,938 56,083 Prepaid pension cost (Note 16) 234,355 224,638 Deferred tax assets (Note 11) 30,581 26,180 Goodwill (Note 14) 733,245 620,895 Intangible assets, net (Note 14) 310,934 246,437 Other noncurrent assets 16,278 16,656 Total assets $ 2,550,211 $ 2,205,784 Liabilities Notes payable and current portion of long-term debt (Note 13) $ 8,383 $ 26,391 Accounts payable 126,421 108,163 Employees’ compensation 48,125 54,826 Other current liabilities 102,535 98,713 Total current liabilities 285,464 288,093 Long-term debt, net (Note 13) 670,965 481,622 Pensions and other employee benefits (Note 16) 152,344 134,251 Noncurrent operating lease liabilities 46,585 45,984 Deferred tax liabilities (Note 11) 132,696 107,691 Other noncurrent liabilities 9,515 4,824 Total liabilities $ 1,297,569 $ 1,062,465 Equity Preferred stock, 4.5 % cumulative, $ 50 par value (Note 8) $ 3,569 $ 3,569 Common stock, no par value (Note 8) 336,175 329,953 Treasury shares, at cost (Note 8) ( 443,723 ) ( 398,204 ) Accumulated other comprehensive loss (Note 7) ( 74,526 ) ( 141,649 ) Retained earnings 1,431,147 1,349,650 Total shareholders’ equity 1,252,642 1,143,319 Total liabilities and shareholders’ equity $ 2,550,211 $ 2,205,784 The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. -5- Table of Contents MSA SAFETY INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited Six Months Ended June 30, (In thousands) 2025 2024 Operating Activities Net income $ 122,378 $ 130,373 Depreciation and amortization 34,350 31,605 Stock-based compensation (Note 12) 7,999 9,229 Pension income (Note 16) ( 6,917 ) ( 3,108 ) Deferred income tax benefit (Note 11) ( 307 ) ( 2,226 ) Loss on asset dispositions, net 892 752 Pension contributions (Note 16) ( 3,729 ) ( 2,632 ) Currency exchange losses, net 9,363 1,730 Changes in: Trade receivables ( 37,070 ) ( 15,798 ) Inventories (Note 5) ( 11,147 ) ( 32,798 ) Accounts payable 12,916 20,980 Other current assets and liabilities ( 831 ) ( 35,109 ) Other noncurrent assets and liabilities 1,154 1,190 Cash Flow From Operating Activities 129,051 104,188 Investing Activities Acquisitions, net of cash acquired (Note 15) ( 187,774 ) — Capital expenditures ( 40,118 ) ( 25,560 ) Property disposals and other investing 19 74 Cash Flow Used in Investing Activities ( 227,873 ) ( 25,486 ) Financing Activities Proceeds from long-term debt (Note 13) 600,686 598,000 Payments on long-term debt (Note 13) ( 435,466 ) ( 611,260 ) Debt issuance costs ( 3,064 ) — Cash dividends paid ( 40,881 ) ( 38,589 ) Company stock purchases (Note 8) ( 48,875 ) ( 16,829 ) Exercise of stock options (Note 8) 497 326 Employee stock purchase plan (Note 8) 1,082 634 Cash Flow From (Used in) Financing Activities 73,979 ( 67,718 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 7,692 ( 10,557 ) Change in cash, cash equivalents and restricted cash ( 17,151 ) 427 Beginning cash, cash equivalents and restricted cash 165,097 148,408 Ending cash, cash equivalents and restricted cash $ 147,946 $ 148,835 Supplemental cash flow information: Cash and cash equivalents $ 146,988 $ 146,830 Restricted cash included in prepaid expenses and other current assets 958 2,005 Total cash, cash equivalents and restricted cash $ 147,946 $ 148,835 The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. -6- Table of Contents MSA SAFETY INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN RETAINED EARNINGS AND ACCUMULATED OTHER COMPREHENSIVE LOSS Unaudited (In thousands, except per share values) Retained Earnings Accumulated Other Comprehensive (Loss) Balances March 31, 2024 $ 1,183,091 $ ( 139,548 ) Net income 72,234 — Foreign currency translation adjustments — ( 8,822 ) Pension and post-retirement plan adjustments, net of tax benefit of $ 240 — 2,022 Reclassification from accumulated other comprehensive loss into net income (Note 7) — ( 1,200 ) Common dividends ($ 0.51 per share) ( 20,089 ) — Preferred dividends ($ 0.5625 per share) ( 10 ) — Balances June 30, 2024 $ 1,235,226 $ ( 147,548 ) Balances March 31, 2025 $ 1,389,222 $ ( 118,911 ) Net income 62,773 — Foreign currency translation adjustments — 44,143 Pension and post-retirement plan adjustments, net of tax benefit of $ 150 — 242 Common dividends ($ 0.53 per share) ( 20,838 ) — Preferred dividends ($ 0.5625 per share) ( 10 ) — Balances June 30, 2025 $ 1,431,147 $ ( 74,526 ) Balances December 31, 2023 $ 1,143,442 $ ( 129,249 ) Net income 130,373 — Foreign currency translation adjustments — ( 19,495 ) Pension and post-retirement plan adjustments, net of tax benefit of $ 254 — 2,396 Reclassification from accumulated other comprehensive loss into net income (Note 7) — ( 1,200 ) Common dividends ($ 0.98 per share) ( 38,569 ) — Preferred dividends ($ 1.125 per share) ( 20 ) — Balances June 30, 2024 $ 1,235,226 $ ( 147,548 ) Balances December 31, 2024 $ 1,349,650 $ ( 141,649 ) Net income 122,378 — Foreign currency translation adjustments — 66,680 Pension and post-retirement plan adjustments, net of tax expense of $ 341 — 443 Common dividends ($ 1.04 per share) ( 40,861 ) — Preferred dividends ($ 1.125 per share) ( 20 ) — Balances June 30, 2025 $ 1,431,147 $ ( 74,526 ) The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. -7- Table of Contents MSA SAFETY INCORPORATED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Unaudited Note 1— Basis of Presentation The condensed consolidated financial statements of MSA Safety Incorporated and its subsidiaries ("MSA" or "the Company") are unaudited. These unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary by management to fairly state the Company's results. Intercompany accounts and transactions have been eliminated. The results reported in these unaudited condensed consolidated financial statements are not necessarily indicative of the results that may be expected for the entire year. The December 31, 2024, Balance Sheet data was derived from the audited Consolidated Balance Sheets, but does not include all disclosures required by accounting principles generally accepted in the United States of America ("U.S. GAAP"). This Form 10-Q report should be read in conjunction with MSA's Form 10-K for the year ended December 31, 2024, which includes all disclosures required by U.S. GAAP. In December 2023, the Financial Accounting Standards Board (the "FASB") issued ASU No. 2023-09 (“ASU 2023-09”), Improvements to Income Tax Disclosures . ASU 2023-09 requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. This standard also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for public business entities, for annual periods beginning after December 15, 2024. With the exception of expanding disclosures, we do not expect the adoption of ASU 2023-09 to have a material effect on our consolidated financial statements taken as a whole. In November 2024, the FASB issued ASU No. 2024-03 (“ASU 2024-03”), Disaggregation of Income Statement Expenses (“DISE”) . ASU 2024-03 requires disaggregated disclosure of income statement expenses for public business entities. ASU 2024-03 does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. As revised by ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures , the provisions of ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. With the exception of expanding disclosures to include more granular income statement expense categories, we do not expect the adoption of ASU 2024-03 to have a material effect on our consolidated financial statements taken as a whole. Note 2— Revenue Recognition We generate revenue primarily from manufacturing and selling a comprehensive line of safety products and solutions to protect the health and safety of workers and facility infrastructures around the world. Our customers generally fall into two categories: distributors or end-users. All customer categories have similar nature, timing and uncertainty related to cash flows. As a result, the underlying principles of revenue recognition are identical for both categories of customers. We account for revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue from the sale of products and solutions is recognized when there is persuasive evidence of an arrangement and control passes to the customer, which generally occurs either when product is shipped to the customer or, in the case of certain customers, when product is delivered to the customer's site. We establish our shipping terms according to local practice and market characteristics. We do not ship product unless we have an order or other documentation authorizing shipment to our customers. Our payment terms vary by the type and location of our customer and the products and solutions offered; however, in most cases, the term between invoicing and when payment is due is not significant. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Amounts billed and due from our customers are classified as receivables on the unaudited Condensed Consolidated Balance Sheets. We make appropriate provisions for credit losses, which have historically been insignificant in relation to our net sales. Certain contracts with customers may have an element of variable consideration that is estimated when revenue is recognized. Variable consideration could include volume incentive rebates and performance guarantees. Rebates are based on achieving a certain level of purchases and other performance criteria that are documented in established distributor programs. These rebates are estimated based on projected sales to the customer and accrued as a reduction of net sales as they are earned by the customer. Sales, value-added and other taxes collected with revenue-producing activities and remitted to governmental authorities are excluded from revenue. -8- Table of Contents Depending on the terms of the arrangement, we may defer revenue for which we have a future obligation, which may include leases where the Company is the lessor, training, extended warranty, software subscriptions, maintenance and technical services, until such time that the obligation has been satisfied. We use an observable price, or a cost plus margin approach when one is not available, to determine the stand-alone selling price for separate performance obligations. We have elected to recognize the cost for shipping and handling as an expense when control of the product has passed to the customer. These costs are included within the Cost of products sold line on the unaudited Condensed Consolidated Statements of Income. Amounts billed to customers for shipping and handling are included within the Net sales line on the unaudited Condensed Consolidated Statements of Income. Performance Obligations The Company recognizes revenue when performance obligations identified under the terms of the contract with its customers are satisfied, which generally occurs upon the transfer of control in accordance with the contractual terms and conditions of sale. For most contracts with customers, this results in point-in-time revenue recognition once contractual shipping terms are fulfilled. Disaggregation of Revenue Refer to Note 9—Segment Information for disaggregation of revenue by segment and product category, as we believe this best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Lessor Arrangements The Company derives a portion of its revenue from various leasing contracts where the Company is the lessor, primarily managed fire service contracts. Such arrangements provide for recurring payments throughout the contract term. These payments cover equipment provided in addition to several services which include maintenance and interest. Managed fire service contracts meet the criteria to be accounted for as sales-type leases. Under ASC 842, Leases , these contracts contain both lease and non-lease components. For a component to be separate, the customer would be able to benefit from the right of use of the component separately or with other resources readily available to the customer and the right of the use is not highly dependent or highly interrelated with the other rights to use the other underlying assets or components. For managed fire service contracts, revenue from equipment provided is considered a lease component and recognized with point in time revenue recognition upon lease commencement. Upon the recognition of such revenue, an asset is established for the investment in sales-type leases. Maintenance revenue, which is considered a non-lease component, and interest are recognized monthly over the lease term. As of June 30, 2025, remaining maintenance performance obligations for managed fire service contracts were $ 34.4 million, which are expected to be recognized to revenue over approximately 3 years. Lease revenues and interest earned by the Company, included in the unaudited Condensed Consolidated Statements of Income, were not material to either the period ended June 30, 2025, or 2024. Practical Expedients and Exemptions We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. We do not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses in our Consolidated Statements of Income. -9- Table of Contents Note 3— Cash and Cash Equivalents Several of the Company's subsidiaries participate in a notional cash pooling arrangement to manage global liquidity requirements. As part of a master netting arrangement, the participants combine their cash balances in pooling accounts at the same financial institution with the ability to offset bank overdrafts of one participant against positive cash account balances held by another participant. Under the terms of the master netting arrangement, the financial institution has the right, ability and intent to offset a positive balance in one account against an overdrawn amount in another account. Amounts in each of the accounts are unencumbered and unrestricted with respect to use. As such, the net cash balance related to this pooling arrangement is included in Cash and cash equivalents in the unaudited Condensed Consolidated Balance Sheets. The Company's net cash pool position consisted of the following: (In thousands) June 30, 2025 Gross cash pool position $ 52,967 Less: cash pool borrowings ( 51,964 ) Net cash pool position $ 1,003 Note 4— Restructuring Charges During the three and six months ended June 30, 2025, we recorded restructuring charges of $ 0.5 million and $ 2.4 million. Americas segment restructuring charges of $ 0.5 million during the six months ended June 30, 2025, were related to initiatives to right-size the organization in response to macroeconomic conditions. International segment restructuring charges of $ 1.0 million during the six months ended June 30, 2025, were primarily related to ongoing initiatives to optimize our manufacturing footprint and initiatives to right-size the organization in response to macroeconomic conditions. Corporate segment restructuring charges of $ 0.9 million during the six months ended June 30, 2025, were related to initiatives to right-size the organization in response to macroeconomic conditions. During the three and six months ended June 30, 2024, we recorded restructuring charges of $ 1.5 million and $ 4.6 million. Americas segment restructuring charges of $ 0.8 million during the six months ended June 30, 2024, were related to manufacturing footprint optimization activities. International segment restructuring charges of $ 2.9 million during the six months ended June 30, 2024, were related to ongoing initiatives to optimize our manufacturing footprint and improve productivity as well as management restructuring. Corporate segment restructuring charges of $ 0.9 million during the six months ended June 30, 2024, were related to management restructuring. Restructuring reserves are included in Other current liabilities in the accompanying unaudited Condensed Consolidated Balance Sheets. Activity and reserve balances for restructuring by segment were as follows: (In millions) Americas International Corporate Total Reserve balances at December 31, 2023 $ 0.8 $ 9.0 $ — $ 9.8 Restructuring charges 1.6 3.5 1.3 6.4 Currency translation ( 0.1 ) ( 0.3 ) — ( 0.4 ) Cash payments / utilization ( 2.1 ) ( 9.0 ) ( 1.3 ) ( 12.4 ) Reserve balances at December 31, 2024 $ 0.2 $ 3.2 $ — $ 3.4 Restructuring charges 0.5 1.0 0.9 2.4 Currency translation — 0.4 — 0.4 Cash payments ( 0.1 ) ( 1.6 ) ( 0.9 ) ( 2.6 ) Reserve balances at June 30, 2025 $ 0.6 $ 3.0 $ — $ 3.6 -10- Table of Contents Note 5— Inventories The following table sets forth the components of inventory: (In thousands) June 30, 2025 December 31, 2024 Finished products $ 105,940 $ 93,356 Work in process 19,511 13,413 Raw materials and supplies 218,432 190,027 Total inventories $ 343,883 $ 296,796 Note 6— Property, Plant and Equipment The following table sets forth the components of property, plant and equipment, net: (In thousands) June 30, 2025 December 31, 2024 Land $ 9,579 $ 4,235 Buildings 198,730 142,605 Machinery and equipment 544,266 512,894 Construction in progress 31,913 25,451 Total 784,488 685,185 Less: accumulated depreciation ( 505,069 ) ( 473,320 ) Property, plant and equipment, net $ 279,419 $ 211,865 Note 7— Reclassifications Out of Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss were as follows: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2025 2024 2025 2024 Pension and other post-retirement benefits (a) Balance at beginning of period $ ( 11,189 ) $ ( 42,278 ) $ ( 11,390 ) $ ( 42,652 ) Amounts reclassified from accumulated other comprehensive loss into net income: Amortization of prior service cost (credit) (Note 16) 32 ( 9 ) 64 ( 18 ) Recognized net actuarial losses (Note 16) 360 2,271 720 2,668 Tax benefit ( 150 ) ( 240 ) ( 341 ) ( 254 ) Total amount reclassified from accumulated other comprehensive loss, net of tax, into net income 242 2,022 443 2,396 Balance at end of period $ ( 10,947 ) $ ( 40,256 ) $ ( 10,947 ) $ ( 40,256 ) Foreign currency translation Balance at beginning of period $ ( 107,722 ) $ ( 97,270 ) $ ( 130,259 ) $ ( 86,597 ) Reclassification from accumulated other comprehensive loss into net income (b) — ( 1,200 ) — ( 1,200 ) Foreign currency translation adjustments 44,143 ( 8,822 ) 66,680 ( 19,495 ) Balance at end of period $ ( 63,579 ) $ ( 107,292 ) $ ( 63,579 ) $ ( 107,292 ) (a) Amounts reclassified from accumulated other comprehensive loss into net income are included in the computation of net periodic pension and other post-retirement benefit costs (refer to Note 16—Pensions and Other Post-retirement Benefits). (b) Reclassification from accumulated other comprehensive loss into net income relates primarily to the recognition of non-cash net cumulative translation gains associated with certain foreign subsidiaries. The reclassifications are included in Currency exchange losses (gains), net, within the unaudited Condensed Consolidated Statements of Income. -11- Table of Contents Note 8— Capital Stock Preferred Stock - The Company has authorized 100,000 shares of $ 50 par value 4.5 % cumulative preferred nonvoting stock which is callable at $ 52.50 . There were 71,340 shares issued and 52,998 shares held in treasury at both June 30, 2025, and December 31, 2024. The Treasury shares at cost line in the unaudited Condensed Consolidated Balance Sheets includes $ 1.8 million related to preferred stock. There were no shares of preferred stock purchased and subsequently held in treasury during the six months ended June 30, 2025, or 2024. The Company has also authorized 1,000,000 shares of $ 10 par value second cumulative preferred voting stock. No shares have been issued as of June 30, 2025, or December 31, 2024. Common Stock - The Company has authorized 180,000,000 shares of no par value common stock. There were 62,081,391 shares issued as of June 30, 2025, and December 31, 2024. No new shares were issued during the six months ended June 30, 2025, or 2024. There were 39,142,630 and 39,260,080 shares outstanding at June 30, 2025, and December 31, 2024, respectively. Treasury Shares - The Company's 2024 stock repurchase program authorizes up to $ 200.0 million to repurchase MSA common stock in the open market and in private transactions. The stock repurchase program has no expiration date. The maximum number of shares that may be repurchased is calculated based on the dollars remaining under the program and the respective month-end closing share price. During the six months ended June 30, 2025, and 2024, the Company repurchased 248,768 and 52,561 shares, respectively, under this and the prior stock repurchase program. There were 22,938,761 and 22,821,311 treasury shares at June 30, 2025, and December 31, 2024, respectively. The Company issues treasury shares for all stock-based benefit plans. Shares are issued from treasury at the average treasury share cost on the date of the transaction. There were 187,455 and 121,790 Treasury shares issued for these purposes during the six months ended June 30, 2025, and 2024, respectively. Common stock activity is summarized as follows: Three Months Ended June 30, 2025 Three Months Ended June 30, 2024 (In thousands) Common Stock Treasury Cost (a) Common Stock Treasury Cost (a) Balance at beginning of period $ 330,077 $ ( 412,212 ) $ 315,241 $ ( 365,999 ) Stock compensation expense 5,370 — 5,042 — Restricted and performance stock awards ( 365 ) 365 ( 348 ) 348 Stock options exercised 158 109 47 27 Treasury shares purchased for stock compensation programs — ( 534 ) — ( 992 ) Employee stock purchase program 935 147 574 60 Share repurchase program — ( 29,998 ) — ( 10,000 ) Balance at end of period $ 336,175 $ ( 442,123 ) $ 320,556 $ ( 376,556 ) (a) Excludes treasury cost related to preferred stock. Six Months Ended June 30, 2025 Six Months Ended June 30, 2024 (In thousands) Common Stock Treasury Cost (a) Common Stock Treasury Cost (a) Balance at beginning of period $ 329,953 $ ( 396,604 ) $ 312,324 $ ( 361,684 ) Stock compensation expense 7,999 9,229 — Restricted and performance stock awards ( 3,007 ) 3,007 ( 1,783 ) 1,783 Stock options exercised 295 202 212 114 Treasury shares purchased for stock compensation programs — ( 8,880 ) — ( 6,829 ) Employee stock purchase program 935 147 574 60 Share repurchase program — ( 39,995 ) — ( 10,000 ) Balance at end of period $ 336,175 $ ( 442,123 ) $ 320,556 $ ( 376,556 ) (a) Excludes treasury cost related to preferred stock. -12- Table of Contents Note 9— Segment Information The Company is organized into four geographical operating segments that are based on management responsibilities: Northern North America; Latin America; Europe, Middle East & Africa; and Asia Pacific. The operating segments have been aggregated (based on economic similarities, the nature of their products and solutions, end-user markets and methods of distribution) into three reportable segments: Americas, International, and Corporate. The Americas segment is comprised of our operations in Northern North America and Latin America geographies. The International segment is comprised of our operations in all geographies outside of the Americas. Certain global expenses are allocated to each segment in a manner consistent with where the benefits from the expenses are derived. The Company's sales are allocated to each segment based primarily on the country destination of the end-customer. The Company adopted ASU No. 2023-07 (“ASU 2023-07”), Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures for the year ended December 31, 2024, and applied it retrospectively for all prior periods presented. Adjusted operating income (loss) is the measure used by the chief operating decision maker, identified as our President and Chief Executive Officer, to evaluate segment performance and identify opportunities when allocating resources. Adjusted operating income (loss) is defined as operating income excluding restructuring charges, currency exchange gains (losses), transaction costs and acquisition-related amortization. The accounting principles applied at the operating segment level in determining the segment measure of profit or loss are the same as those applied at the unaudited condensed consolidated financial statement level. Sales and transfers between operating segments are accounted for at market-based transaction prices and are eliminated in consolidation. Reportable segment information is presented in the following table: -13- Table of Contents (In thousands) Americas International Corporate Reconciling Items (a) Consolidated Totals Three Months Ended June 30, 2025 Net sales to external customers $ 320,139 $ 153,977 $ — $ 474,116 Less: Cost of products sold 161,505 88,748 — — Selling, general and administrative 55,244 38,145 12,044 — Research and development 10,070 6,926 — — Adjusted operating income (loss) 93,320 20,158 ( 12,044 ) — 101,434 Noncash items: Depreciation and amortization 11,956 5,613 530 — 18,099 Pension (income) expense ( 3,974 ) 905 — — ( 3,069 ) Total Assets 1,569,407 956,490 26,607 ( 2,293 ) 2,550,211 Capital expenditures 7,527 2,115 19,692 — 29,334 Three Months Ended June 30, 2024 Net sales to external customers $ 314,711 $ 147,752 $ — $ 462,463 Less: Cost of products sold 153,295 83,887 ( 54 ) — Selling, general and administrative 52,741 32,717 14,617 — Research and development 10,207 6,863 — — Adjusted operating income (loss) 98,468 24,285 ( 14,563 ) — 108,190 Noncash items: Depreciation and amortization 11,559 4,276 212 — 16,047 Pension (income) expense ( 1,950 ) 1,050 — — ( 900 ) Total Assets 1,471,290 748,693 24,813 ( 1,225 ) 2,243,571 Capital expenditures 6,946 5,775 1,620 — 14,341 (a) Reconciling items consist primarily of intercompany eliminations and items not directly attributable to operating segments. -14- Table of Contents (In thousands) Americas International Corporate Reconciling Items (a) Consolidated Totals Six Months Ended June 30, 2025 Net sales to external customers $ 613,299 $ 282,157 $ — $ 895,456 Less: Cost of products sold 315,684 160,228 — — Selling, general and administrative 106,162 69,837 21,944 — Research and development 19,439 13,226 — — Adjusted operating income (loss) 172,014 38,866 ( 21,944 ) — 188,936 Noncash items: Depreciation and amortization 23,473 10,118 759 — 34,350 Pension (income) expense ( 8,669 ) 1,752 — — ( 6,917 ) Total Assets 1,569,407 956,490 26,607 ( 2,293 ) 2,550,211 Capital expenditures 16,285 4,049 19,784 — 40,118 Six Months Ended June 30, 2024 Net sales to external customers $ 610,249 $ 265,516 $ — $ 875,765 Less: Cost of products sold 301,172 151,444 ( 31 ) — Selling, general and administrative 104,663 63,040 26,289 — Research and development 19,726 13,262 — — Adjusted operating income (loss) 184,688 37,770 ( 26,258 ) — 196,200 Noncash items: Depreciation and amortization 22,832 8,350 423 — 31,605 Pension (income) expense ( 5,208 ) 2,100 — — ( 3,108 ) Total Assets 1,471,290 748,693 24,813 ( 1,225 ) 2,243,571 Capital expenditures 13,500 9,841 2,219 — 25,560 (a) Reconciling items consist primarily of intercompany eliminations and items not directly attributable to operating segments. -15- Table of Contents A reconciliation of total Adjusted operating income from reportable segments to Income before income taxes is presented in the following table: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2025 2024 2025 2024 Adjusted operating income $ 101,434 $ 108,190 $ 188,936 $ 196,200 Less: Restructuring charges (Note 4) 488 1,543 2,412 4,560 Currency exchange losses (gains), net 5,286 ( 603 ) 9,363 1,730 Interest expense 8,116 9,664 14,951 20,403 Other income, net ( 5,000 ) ( 4,148 ) ( 12,022 ) ( 10,382 ) Acquisition-related amortization 3,153 2,306 5,439 4,620 Transaction costs (a) 6,645 — 8,099 234 Net cost for product-related legal matter — 5,000 — 5,000 Income before income taxes $ 82,746 $ 94,428 $ 160,694 $ 170,035 (a) Transaction costs include advisory, legal, accounting, valuation, and other professional or consulting fees incurred in connection with acquisitions and divestitures. These costs are included in Selling, general and administrative expense in the unaudited Condensed Consolidated Statements of Income. -16- Table of Contents Total sales by product group was as follows: Three Months Ended June 30, 2025 Consolidated Americas International (In thousands, except percentages) Dollars Percent Dollars Percent Dollars Percent Detection (a) $ 193,835 41 % $ 127,174 40 % $ 66,661 43 % Fire Service (b) 163,306 34 % 110,815 35 % 52,491 34 % Industrial PPE and Other (c) 116,975 25 % 82,150 25 % 34,825 23 % Total $ 474,116 100 % $ 320,139 100 % $ 153,977 100 % Three Months Ended June 30, 2024 Consolidated Americas International (In thousands, except percentages) Dollars Percent Dollars Percent Dollars Percent Detection (a) $ 170,848 37 % $ 111,405 35 % $ 59,443 40 % Fire Service (b) 172,269 37 % 118,487 38 % 53,782 37 % Industrial PPE and Other (c) 119,346 26 % 84,819 27 % 34,527 23 % Total $ 462,463 100 % $ 314,711 100 % $ 147,752 100 % Six Months Ended June 30, 2025 Consolidated Americas International (In thousands, except percentages) Dollars Percent Dollars Percent Dollars Percent Detection (a) $ 354,906 40 % $ 237,065 39 % $ 117,841 42 % Fire Service (b) 313,922 35 % 216,722 35 % 97,200 34 % Industrial PPE and Other (c) 226,628 25 % 159,512 26 % 67,116 24 % Total $ 895,456 100 % $ 613,299 100 % $ 282,157 100 % Six Months Ended June 30, 2024 Consolidated Americas International (In thousands, except percentages) Dollars Percent Dollars Percent Dollars Percent Detection (a) $ 310,064 35 % $ 207,700 34 % $ 102,364 38 % Fire Service (b) 335,962 39 % 240,738 39 % 95,224 36 % Industrial PPE and Other (c) 229,739 26 % 161,811 27 % 67,928 26 % Total $ 875,765 100 % $ 610,249 100 % $ 265,516 100 % (a) Detection includes Fixed Gas and Flame Detection and Portable Gas detection. Detection includes sales from M&C TechGroup Germany GmbH and its affiliated companies ("M&C"), acquired by the Company, from May 6th, 2025, onward (Americas and International). Refer to Note 15—Acquisitions for further information. (b) Fire Service includes Breathing Apparatus and Firefighter Helmets and Protective Apparel. (c) Industrial PPE and Other includes Industrial Head Protection, Fall Protection and Non-Core. -17- Table of Contents Note 10— Earnings per Share Basic earnings per share is computed by dividing net income, after the deduction of preferred stock dividends and undistributed earnings allocated to participating securities, by the weighted average number of common shares outstanding during the period. Diluted earnings per share assumes the issuance of common stock for all potentially dilutive share equivalents outstanding not classified as participating securities. Participating securities are defined as unvested stock-based compensation awards that contain nonforfeitable rights to dividends. Three Months Ended June 30, Six Months Ended June 30, (In thousands, except per share values) 2025 2024 2025 2024 Net income $ 62,773 $ 72,234 $ 122,378 $ 130,373 Preferred stock dividends ( 10 ) ( 10 ) ( 20 ) ( 20 ) Net income attributable to common equity 62,763 72,224 122,358 130,353 Dividends and undistributed earnings allocated to participating securities ( 6 ) ( 6 ) ( 10 ) ( 13 ) Net income attributable to common shareholders 62,757 72,218 122,348 130,340 Basic weighted-average shares outstanding 39,258 39,389 39,296 39,375 Stock-based compensation awards 101 152 134 174 Diluted weighted-average shares outstanding 39,359 39,541 39,430 39,549 Antidilutive shares — — — — Earnings per share: Basic $ 1.60 $ 1.83 $ 3.11 $ 3.31 Diluted $ 1.59 $ 1.83 $ 3.10 $ 3.30 Note 11— Income Taxes The Company's effective tax rate for the three months ended June 30, 2025, was 24.1 %, which differs from the United States of America ("U.S.") federal statutory rate of 21% primarily due to state income taxes and nondeductible executive compensation. The Company's effective tax rate for the three months ended June 30, 2024, was 23.5 %, which differs from the U.S. federal statutory rate of 21% primarily due to state income taxes. The Company's effective tax rate for the six months ended June 30, 2025, was 23.8 %, which differs from the U.S. federal statutory rate of 21% primarily due to state income taxes and nondeductible executive compensation. The Company's effective tax rate for the six months ended June 30, 2024, was 23.3 %, which differs from the U.S. federal statutory rate of 21% primarily due to state income taxes and nondeductible executive compensation. At June 30, 2025, the Company had a gross liability for unrecognized tax benefits of $ 4.7 million. The Company has recognized tax benefits associated with these liabilities of $ 1.5 million at June 30, 2025. The gross liability includes amounts associated with domestic and foreign tax exposure in prior periods. The Company recognizes interest and penalties related to unrecognized tax benefits in interest expense and operating expenses, respectively. The Company's liability for accrued interest related to uncertain tax positions was $ 0.2 million at June 30, 2025. We are subject to regular review and audit by both foreign and domestic tax authorities. While we believe our tax positions will be sustained, the final outcome of tax audits and related litigation may differ materially from the tax amounts recorded in our unaudited condensed consolidated financial statements. -18- Table of Contents Note 12— Stock Plans The 2023 Management Equity Incentive Plan and its predecessor, the 2016 Management Equity Incentive Plan, provide for various forms of stock-based compensation for eligible employees through, in the case of the 2023 Management Equity Incentive Plan, May 2033, including stock options, restricted stock awards, restricted stock units and performance stock units. The 2024 Non-Employee Directors’ Equity Incentive Plan and its predecessor, the 2017 Non-Employee Directors’ Equity Incentive Plan, provide for grants of stock options and restricted stock to non-employee directors through, in the case of the 2024 Non-Employee Directors’ Equity Incentive Plan, May 2034. The 2014 MSA Employee Stock Purchase Plan (“ESPP”) permits eligible employees to purchase the Company's shares of common stock at a 15 % discount from the fair market value stock price, semi-annually. The ESPP is considered a compensatory plan. The discount is recorded as a component of selling, general and administrative expense in the Company's Consolidated Statements of Income. Stock compensation expense, included in Selling, general and administrative expense in the unaudited Condensed Consolidated Statements of Income, is as follows: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2025 2024 2025 2024 Stock compensation expense $ 5,370 $ 5,042 $ 7,999 $ 9,229 Income tax benefit 1,327 1,235 1,976 2,261 Stock compensation expense, net of tax $ 4,043 $ 3,807 $ 6,023 $ 6,968 We have not capitalized any stock-based compensation expense. A summary of stock option activity for the six months ended June 30, 2025, is as follows: Shares Weighted Average Exercise Price Outstanding at January 1, 2025 15,018 $ 45.10 Exercised ( 11,173 ) 44.50 Outstanding and exercisable at June 30, 2025 3,845 $ 46.84 Restricted stock awards and restricted stock units are valued at the market value of the stock on the grant date. A summary of restricted stock activity for the six months ended June 30, 2025, is as follows: Shares Weighted Average Grant Date Fair Value Unvested at January 1, 2025 179,584 $ 150.39 Granted 70,166 160.04 Vested ( 49,730 ) 145.11 Forfeited ( 11,379 ) 154.82 Unvested at June 30, 2025 188,641 $ 155.11 Performance stock units that have a market condition modifier are valued at an estimated fair value using a Monte Carlo model. The final number of shares to be issued for performance stock units granted in the first quarter of 2025 may range from 0 % to 200 % of the target award based on achieving the specified performance targets over the performance period and further range based upon the achieved market metric over the performance period. The following weighted average assumptions were used in estimating the fair value of the performance stock units granted in the first quarter of 2025: Fair value per unit $ 160.54 Risk-free interest rate 4.28 % Expected dividend yield 1.14 % Expected volatility 25.3 % MSA stock beta 0.744 -19- Table of Contents The risk-free interest rate is based on the U.S. Treasury Constant Maturity rates as of the grant date converted into an implied spot rate yield curve. Expected dividend yield is based on the most recent annualized dividend divided by the one-year average closing share price. Expected volatility is based on the three-year historical volatility preceding the grant date using daily stock prices. Expected life is based on historical stock option exercise data. A summary of performance stock unit activity for the six months ended June 30, 2025, is as follows: Shares Weighted Average Grant Date Fair Value Unvested at January 1, 2025 161,996 $ 146.50 Granted 56,344 160.53 Performance adjustments (a) 64,457 143.49 Vested ( 118,605 ) 143.47 Forfeited ( 19,655 ) 156.61 Unvested at June 30, 2025 144,537 $ 151.73 (a) Performance adjustments relate primarily to the final number of shares issued for the 2022 performance unit awards which vested in the first quarter of 2025 at 220 % of the target award based on both cumulative performance against EBITDA margin and revenue growth targets and MSA's total shareholder return during the three-year performance period. Note 13— Long-Term Debt (In thousands) June 30, 2025 December 31, 2024 2016 Senior Notes payable through 2031, 3.40 %, net of debt issuance costs $ 50,220 $ 53,400 2021 Senior Notes payable through 2036, 2.69 %, net of debt issuance costs 99,765 99,754 2021 Senior Notes payable through 2036, 2.69 %, net of debt issuance costs 99,765 99,754 Senior revolving credit facility maturing in 2030, net of debt issuance costs 379,638 — 2023 Term Loan credit agreement maturing in 2026, net of debt issuance costs — 205,152 2023 Senior Notes payable through 2028, 5.25 %, net of debt issuance costs 49,960 49,953 Total 679,348 508,013 Amounts due within one year 8,383 26,391 Long-term debt, net of debt issuance costs $ 670,965 $ 481,622 On April 1, 2025, the Company entered into a Fifth Amended and Restated Credit Agreement (the “Revolving Credit Facility" or "Facility”) with a capacity of $ 1.3 billion. Under the amended agreement, the Company may elect either a Base rate of interest (“BASE”) or an interest rate based on Secured Overnight Financing Rate (“SOFR”). The BASE is a daily fluctuating per annum rate equal to the highest of (i) the Overnight Bank Funding Rate, plus 0.5 %, (ii) the Prime Rate (iii) the Daily Simple SOFR rate, plus 1.00 %. The Company pays a credit spread of 0 to 175 basis points based on the Company’s net leverage ratio and elected rate (BASE or SOFR). The company has a weighted average revolver interest rate of 4.83 % as of June 30, 2025. At June 30, 2025, $ 915.4 million of the existing $ 1.3 billion revolving credit facility was unused, including letters of credit issued under the facility. The facility also provides an accordion feature that allows the Company to access an additional $ 500.0 million of capacity pending approval by MSA’s board of directors and from the bank group. On January 5, 2023, the Company entered into a new $ 250 million term loan facility to fund the divestiture of Mine Safety Appliances Company, LLC ("MSA LLC"), a wholly owned subsidiary. In conjunction with the updated Revolving Credit Facility signed on April 1, 2025 MSA converted the balance of the Term Loan Facility to the Revolving Credit Facility, closing the Term Loan Facility. Under the agreement, the Company elected either BASE or an interest rate based on SOFR. The Company paid a credit spread of 0 to 200 basis points based on the Company's net leverage ratio and elected rate. -20- Table of Contents On July 1, 2024, the Company entered into Amendment No. 3 to the Third Amended and Restated Multi-Currency Note Purchase and Private Shelf Agreement (the “Prudential Note Agreement”) with PGIM, Inc. (“Prudential”). The Prudential Note Agreement provided for (i) the issuance of $ 100.0 million of 2.69 % Series C Senior Notes due July 1, 2036 and (ii) the establishment of an uncommitted note issuance facility whereby the Company may request, subject to Prudential’s acceptance in its sole discretion, the issuance of up to $ 335.0 million aggregate principal amount of senior unsecured notes. As of June 30, 2025, the Company has outstanding £ 36.6 million (approximately $ 50.3 million at June 30, 2025) of 3.4 % Series B Senior Notes due January 22, 2031. Remaining maturities of this note are £ 6.1 million (approximately $ 8.4 million at June 30, 2025) due annually through January 2031. On July 1, 2024, the Company entered into Amendment No. 3 to the Second Amended and Restated Master Note Facility (the “NYL Note Facility”) with NYL Investors. The NYL Note Facility provided for (i) the issuance of $ 100.0 million of 2.69 % Series A Senior Notes due July 1, 2036, and (ii) the establishment of an uncommitted note issuance facility whereby the Company may request, subject to NYL Investors’ acceptance in its sole discretion, the issuance of up to $ 200.0 million aggregate principal amount of senior unsecured notes. Coincident with the amendment to the Revolving Credit Facility on April 1, 2025, the Company entered into Amendment No. 4 to the Prudential Note Agreement and Amendment No. 4 to the NYL Note Facility, in each case to conform to the changes made in the Amended Revolving Credit Facility. On June 29, 2023, the Company issued $ 50 million of 5.25 % Series B Senior Notes due July 1, 2028, pursuant to the NYL Note Facility (the "Notes"). The Notes bear interest at 5.25 % per annum, payable semi-annually, and mature on July 1, 2028. The Notes provide for a principal payment of $ 25 million on July 1, 2027, with the remaining $ 25 million due on July 1, 2028. The Notes may be redeemed at the Company’s option prior to their maturity at a make-whole redemption price calculated as provided in the NYL Note Facility. The proceeds of the Notes were used on June 29, 2023, to pay down an equivalent amount of borrowings under the Company’s Revolving Credit Facility with PNC Bank, National Association, as Administrative Agent. The Revolving Credit Facility, Prudential Note Agreement and NYL Note Facility require the Company to comply with specified financial covenants, including a requirement to maintain a minimum fixed charges coverage ratio of not less than 1.50 to 1.00 and a consolidated leverage ratio not to exceed 3.50 to 1.00; except during an acquisition period, defined as four consecutive fiscal quarters beginning with the quarter of acquisition, in which case the consolidated net leverage ratio shall not exceed 4.00 to 1.00; in each case calculated on the basis of the trailing four fiscal quarters. In addition, the agreements contain negative covenants limiting the ability of the Company and its subsidiaries to incur additional indebtedness or issue guarantees, create or incur liens, make loans and investments, make acquisitions, transfer or sell assets, enter into transactions with affiliated parties, make changes in its organizational documents that are materially adverse to lenders or modify the nature of the Company's or its subsidiaries' business. As of June 30, 2025, the Company was in full compliance with the restrictive covenants under its various credit agreements. The Company had outstanding bank guarantees and standby letters of credit with banks as of June 30, 2025, totaling $ 10.3 million, of which $ 1.5 million relate to the Revolving Credit Facility. The letters of credit serve to cover customer requirements in connection with certain sales orders and insurance companies. The Company is also required to provide cash collateral in connection with certain arrangements. As of June 30, 2025, the Company has $ 1.0 million of restricted cash in support of these arrangements. On May 6, 2025 the company acquired M&C TechGroup Germany GmbH and its affiliated companies ("M&C") in a transaction valued at approximately $ 188 million, net of cash acquired. The acquisition was financed by $ 137.3 million under the Revolving Credit Facility and cash on hand. Note 14— Goodwill and Intangible Assets, Net Changes in goodwill during the six months ended June 30, 2025, were as follows: (In thousands) Goodwill Balance at January 1, 2025 $ 620,895 Additions (Note 15) 91,005 Currency translation 21,345 Balance at June 30, 2025 $ 733,245 -21- Table of Contents At June 30, 2025, goodwill of $ 475.6 million and $ 257.6 million related to the Americas and International reportable segments, respectively. Changes in intangible assets, net, during the six months ended June 30, 2025, were as follows: (In thousands) Intangible Assets Net balance at January 1, 2025 $ 246,437 Additions 66,568 Amortization expense ( 9,606 ) Currency translation 7,535 Net balance at June 30, 2025 $ 310,934 At June 30, 2025, intangible assets, net, includes a trade name related to Globe Manufacturing Company, LLC ("Globe") with an indefinite life totaling $ 60.0 million . Note 15— Acquisitions Acquisition of M&C On May 6, 2025, the Company acquired 100 % of the common stock of M&C in an all-cash transaction valued at approximately $ 188 million, net of cash acquired. Headquartered in Ratingen, Germany, M&C provides a comprehensive range of gas analysis systems that detect, measure and monitor gases in critical environments. The company's product portfolio includes systems and solutions for gas sampling, gas conditioning, as well as advanced process control. M&C products and systems are used in a wide range of industries and applications, including energy, chemicals, utilities, manufacturing, food and beverage, and other industrial applications. M&C’s operating results are included in our unaudited condensed consolidated financial statements from the acquisition date within the Americas and International reportable segments. The acquisition qualified as a business combination and was accounted for using the acquisition method of accounting. The following table summarizes the preliminary fair values of the M&C’s assets acquired and liabilities assumed at the date of the acquisition: (In millions) May 6, 2025 Current assets (including cash of $ 10.0 ) $ 39.3 Property, plant and equipment and other noncurrent assets 46.8 Customer relationships and other intangible assets $ 66.6 Goodwill 91.0 Total assets acquired $ 243.7 Deferred tax liability $ ( 24.0 ) Other liabilities ( 21.9 ) Total liabilities assumed $ ( 45.9 ) Net assets acquired $ 197.8 As of June 30, 2025, the purchase accounting for M&C is subject to change upon completion of the valuation of the assets acquired and liabilities assumed, primarily for tax balances, valuation of intangible assets as well as final working capital adjustment and allocation of goodwill. -22- Table of Contents Assets acquired and liabilities assumed in connection with the acquisition were recorded at their preliminary fair values. Fair values were determined by management, based in part on an independent valuation performed by a third-party valuation specialist. The valuation methods used to determine the fair value of intangible assets included the excess earnings approach for customer relationships using customer inputs and contributory charges; the relief from royalty method for trade name and developed technologies and the cost approach for assembled workforce, which is included in goodwill. Several significant assumptions and estimates were involved in the application of these valuation methods, including forecasted sales volumes and prices, royalty rates, costs to produce, tax rates and amortization tax benefits, capital spending, discount rates, customer attrition rates, technology obsolescence assumptions and working capital changes. Cash flow forecasts were generally based on M&C pre-acquisition forecasts, coupled with estimated MSA financial synergies. Identifiable intangible assets with finite lives are subject to amortization over their estimated useful lives. The customer relationships, developed technology, and trade name acquired in the M&C transaction are being amortized over periods of 20 years, 8 years, and 20 years, respectively. Estimated future amortization expense related to the identifiable intangible assets is approximately $ 2 million for the remainder of 2025, approximately $ 4 million annually for 2026 through 2029, and $ 47.8 million thereafter. Goodwill was calculated as the excess of the purchase price over the fair value of net assets acquired and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Among the factors that contributed to a purchase price in excess of the fair value of the net tangible and intangible assets acquired were the acquisition of an assembled workforce, the expected synergies and other benefits that we believe will result from combining the operations of M&C with our operations. Goodwill of $ 91.0 million related to the M&C acquisition was recorded, with $ 63.7 million and $ 27.3 million allocated to the International and Americas reportable segments, respectively. This Goodwill is nondeductible for tax purposes. Our results for the three and six months ended June 30, 2025, include strategic acquisition costs of $ 6.6 million and $ 8.1 million, respectively, including costs related to the M&C acquisition. Our results for the three and six months ended June 30, 2024, include none and $ 0.2 million, respectively, of acquisition related costs. These costs are reported in selling, general, and administrative expenses. The operating results of this acquisition have been included in our unaudited condensed consolidated financial statements from the acquisition date through June 30, 2025. Our results for the three and six months ended June 30, 2025, include sales and net loss of $ 10.8 million and $ 4.8 million, respectively, attributable to this acquisition. The following unaudited pro forma information presents our combined results as if the M&C acquisition had occurred on January 1, 2024. The unaudited pro forma financial information was prepared to give effect to events that are (1) directly attributable to the acquisition; (2) factually supportable; and (3) expected to have a continuing impact on the combined company's results. There were no material transactions between MSA and M&C during the periods presented that are required to be eliminated in the unaudited pro forma condensed combined financial information. The unaudited pro forma condensed combined financial information does not reflect any cost savings, operating synergies, or revenue enhancements that the combined companies may achieve as a result of the acquisition or the costs to integrate the operations or the costs necessary to achieve cost savings, operating synergies, or revenue enhancements. Three Months Ended June 30, Six Months Ended June 30, (In millions, except per share amounts) 2025 2024 2025 2024 Net sales $ 478.7 $ 476.5 $ 914.0 $ 903.5 Net income 63.4 74.1 124.8 134.0 Basic earnings per share 1.61 1.88 3.18 3.40 Diluted earnings per share 1.61 1.87 3.17 3.39 The unaudited pro forma condensed combined financial information is presented for informational purposes only and is not intended to represent or be indicative of the combined results of operations or financial position that we would have reported had the acquisition been completed as of the date and for the periods presented, and should not be taken as representative of our unaudited condensed consolidated results of operations or financial condition following the acquisition. In addition, the unaudited pro forma condensed combined financial information is not intended to project the future financial position or result of operations of the combined company. The unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting under existing U.S. GAAP. MSA has been treated as the acquirer. -23- Table of Contents Note 16— Pensions and Other Post-retirement Benefits Components of Net periodic benefit (income) cost consisted of the following: Pension Benefits Other Benefits (In thousands) 2025 2024 2025 2024 Three Months Ended June 30, Service cost $ 2,007 $ 2,315 $ 31 $ 44 Interest cost 5,979 5,970 276 248 Expected return on plan assets ( 12,005 ) ( 10,812 ) — — Amortization of prior service cost (credit) 32 37 — ( 46 ) Recognized net actuarial losses 197 282 163 115 Settlements 721 1,308 — — Net periodic benefit (income) cost (a) $ ( 3,069 ) $ ( 900 ) $ 470 $ 361 Six Months Ended June 30, Service cost $ 4,001 $ 4,630 $ 62 $ 88 Interest cost 11,913 11,940 552 496 Expected return on plan assets ( 24,010 ) ( 21,624 ) — — Amortization of prior service cost (credit) 64 74 — ( 92 ) Recognized net actuarial losses 394 564 326 230 Settlements 721 1,308 — — Net periodic benefit (income) cost (a) $ ( 6,917 ) $ ( 3,108 ) $ 940 $ 722 (a) Components of Net periodic benefit (income) cost other than service cost are included in the line item Other income, net, and service costs are included in the line items Cost of products sold and Selling, general and administrative in the unaudited Condensed Consolidated Statements of Income. We made contributions of $ 3.7 million and $ 2.6 million to our pension plans during the six months ended June 30, 2025, and 2024, respectively. We expect to make net contributions between $ 6 million and $ 8 million to our pension plans in 2025, which are primarily associated with statutorily required plans in the International reporting segment. Note 17— Derivative Financial Instruments As part of our currency exchange rate risk management strategy, we enter into certain derivative foreign currency forward contracts that do not meet the U.S. GAAP criteria for hedge accounting but have the impact of partially offsetting certain of our foreign currency exposures. We account for these forward contracts at fair value and report the related gains or losses in currency exchange losses (gains), net, in the unaudited Condensed Consolidated Statements of Income. The notional amount of open forward contracts was $ 107.8 million and $ 184.0 million at June 30, 2025, and December 31, 2024, respectively. The following table presents the unaudited Condensed Consolidated Balance Sheets location and fair value of assets and liabilities associated with derivative financial instruments: (In thousands) June 30, 2025 December 31, 2024 Derivatives not designated as hedging instruments: Foreign exchange contracts: prepaid expenses and other current assets $ 951 $ 175 Foreign exchange contracts: other current liabilities 930 1,111 -24- Table of Contents The following table presents the amount and classification of the (gain) loss associated with derivative financial instruments within the unaudited Condensed Consolidated Statements of Income and unaudited Condensed Consolidated Statements of Cash Flows: Six Months Ended June 30, (In thousands) 2025 2024 Derivatives not designated as hedging instruments: Foreign exchange contracts: currency exchange (gains) losses, net $ ( 4,432 ) $ 3,659 Note 18— Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are: • Level 1—Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets. • Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. • Level 3—Unobservable inputs for the asset or liability. The valuation methodologies we used to measure financial assets and liabilities are also used to value the derivative financial instruments described in Note 17—Derivative Financial Instruments. We estimate the fair value of the derivative financial instruments, consisting of foreign currency forward contracts, based upon valuation models with inputs that generally can be verified by observable market conditions and do not involve significant management judgment. Accordingly, the fair values of the derivative financial instruments are classified within Level 2 of the fair value hierarchy. With the exception of our fixed rate long-term debt, we believe that the reported carrying amounts of our financial assets and liabilities approximate their fair values. The reported carrying amount of our fixed rate long-term debt was $ 300.3 million and $ 303.5 million at June 30, 2025, and December 31, 2024, respectively. The fair value of this debt was $ 269.8 million and $ 266.4 million at June 30, 2025, and December 31, 2024, respectively. The fair value of this debt was determined using Level 2 inputs by evaluating similarly rated companies with publicly traded bonds where available or current borrowing rates available for financings with similar terms and maturities. Note 19— Commitments and Contingencies Product liability The Company and its subsidiaries face an inherent business risk of exposure to product liability claims arising from the alleged failure of our products to prevent the types of personal injury or death against which they are designed to protect. Single incident product liability claims. Single incident product liability claims involve incidents of short duration that are typically known when they occur and involve observable injuries, which provide an objective basis for quantifying damages. Management has established reserves for the single incident product liability claims of the Company's various subsidiaries, including asserted single incident product liability claims and incurred but not reported ("IBNR") single incident claims. To determine the reserves, Management makes reasonable estimates of losses for single incident claims based on the number and characteristics of asserted claims, historical experience, sales volumes, expected settlement costs, and other relevant information. Cumulative trauma product liability claims. Cumulative trauma product liability claims involve alleged exposures to harmful substances (e.g., silica, asbestos and coal dust) that occurred years ago and may have developed over long periods of time into diseases such as silicosis, asbestosis, mesothelioma, or coal worker’s pneumoconiosis. A former subsidiary of the Company, MSA LLC, which was divested on January 5, 2023, under a membership interest purchase agreement (the "Purchase Agreement") with Sag Main Holdings LLC (the "Purchaser"), as further described in the Company’s Current Report on Form 8-K filed on January 6, 2023, has been named as a defendant in various lawsuits related to such claims. These lawsuits mainly involve respiratory protection products allegedly manufactured and sold by MSA LLC or its predecessors. -25- Table of Contents As MSA LLC was the obligor for the claims to which the Company's legacy cumulative trauma product liability reserves relate and policyholder of the related insurance assets, the rights and obligations related to these items remained with MSA LLC when it transferred to the Purchaser's ownership pursuant to the Purchase Agreement. In addition, pursuant to the Purchase Agreement, the Purchaser and MSA LLC have agreed to indemnify the Company and its affiliates for legacy cumulative trauma product liabilities and other product liabilities, and a subsidiary of the Company has agreed to indemnify MSA LLC for all other historical liabilities of MSA LLC. This indemnification is not subject to any cap or time limitation. In connection with the sale, the Company and its Board of Directors received a solvency opinion from an independent advisory firm that MSA LLC was solvent and adequately capitalized after giving effect to the transaction. Other Litigation Globe, a subsidiary of the Company, is defending claims in which plaintiffs assert that certain products allegedly containing per- and polyfluoroalkyl substances (“PFAS”) have caused harm, including injury or health issues. PFAS are a large class of substances that are widely used in everyday products. Specifically, Globe builds firefighter turnout gear from technical fabrics sourced from a small pool of specialty textile manufacturers. These protective fabrics have been tested and certified to meet current National Fire Protection Association safety standards, and some of them as supplied to Globe contain or historically have contained PFAS to achieve performance characteristics such as water, oil, or chemical resistance. Globe believes it has valid defenses to these claims. These matters are at a very early stage with numerous factual and legal issues to be resolved. Defense costs relating to these lawsuits are recognized in the unaudited Condensed Consolidated Statements of Income as incurred. Globe is also pursuing insurance coverage and indemnification related to the lawsuits. As of July 23, 2025, Globe was named as a defendant in 835 lawsuits comprised of 10,808 claims, predominantly styled as individual personal injury claims and including several putative class actions. Certain of these lawsuits include MSA Safety Incorporated or other Globe affiliates as defendants. MSA LLC is also a defendant in a number of PFAS lawsuits predominantly relating to Aqueous Film-Forming Foam. The purchaser assumed responsibility for these and any similar future claims specific to MSA LLC, including such claims that have been or may be brought against MSA Safety Incorporated or its subsidiaries, under the terms of the purchase agreement governing the Company's January 5, 2023, divestiture of MSA LLC. Further information about the transaction and the purchase agreement can be found in the Company’s Current Report on Form 8-K filed on January 6, 2023. Product Warranty The Company provides warranties on certain product sales. Product warranty reserves are established in the same period that revenue from the sale of the related products is recognized, or in the period that a specific issue arises as to the functionality of the Company's product. The determination of such reserves requires the Company to make estimates of product return rates and expected costs to repair or to replace the products under warranty. The amounts of the reserves are based on established terms and the Company's best estimate of the amounts necessary to settle future and existing claims on products sold as of the balance sheet date. If actual return rates and/or repair and replacement costs differ significantly from estimates, adjustments to recognize additional cost of sales may be required in future periods. The following table reconciles changes in the Company's accrued warranty reserve: (In thousands) Six Months Ended June 30, 2025 Year Ended December 31, 2024 Beginning warranty reserve $ 13,724 $ 14,288 Warranty payments ( 7,389 ) ( 11,802 ) Warranty claims, current 6,086 10,684 Warranty claims, preexisting 260 765 Currency translation and other adjustments 110 ( 211 ) Ending warranty reserve $ 12,791 $ 13,724 Warranty expense was $ 6.5 million and $ 5.0 million for the six months ended June 30, 2025, and 2024, respectively, and is included in Costs of products sold on the unaudited Condensed Consolidated Statements of Income. -26- Table of Contents