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Item 2. Management’s Discussion and Analysis

2026-05-05 compared with 2025-10-29 · 98 added, 230 removed, 127 unchanged (72% of the section changed)

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BUSINESS OVERVIEW

MSA Safety Incorporated is the global leader in advanced safety products, technology and solutions.

MSA Safety Incorporated is the global leader in advanced industrial safety technology products and solutions.

Driven by its singular mission of safety, the Company has been at the forefront of safety innovation since 1914, protecting workers and facility infrastructure around the world across a broad range of diverse end markets while creating sustainable value for shareholders.

The Company's comprehensive product line, which is governed by rigorous safety standards across highly regulated industries, is used to protect workers and facility infrastructures around the world in a broad range of markets, including fire service, energy, utility, construction and industrial manufacturing applications as well as heating, ventilation, air conditioning and refrigeration ("HVAC-R").

The Company's principal product categories are fire service, detection and industrial personal protective equipment ("PPE").

Core products for fire service include self-contained breathing apparatus ("SCBA"), protective apparel and helmets;

core products for detection include fixed gas and flame detection ("FGFD") systems and portable gas detection instruments;

and core products for industrial PPE include industrial head protection and fall protection devices.

In addition to its principal product categories, MSA continues to deploy and grow its MSA+™ solution, a business approach that combines MSA hardware, software, and services to simplify safety operations for customers and deliver recurring revenue.

MSA Safety operates through its Accelerate strategy, leveraging the MSA Business System (MBS) to drive continuous improvement, profitable above-market growth, and balanced capital allocation within a high-performance culture.

The Company's comprehensive products and solutions, governed by rigorous safety standards across highly regulated industries, are used across a broad range of markets, including fire service, energy, utilities, construction, and industrial manufacturing, as well as heating, ventilation, air conditioning, and refrigeration (“HVAC-R”).

The Company's principal product categories are detection, fire service, and industrial personal protective equipment (“PPE”).

Detection includes fixed gas and flame detection (“FGFD”) systems and portable gas detection instruments;

fire service includes self-contained breathing apparatus (“SCBA”), protective apparel and helmets;

and industrial PPE includes industrial head protection and fall protection devices.

In addition to its principal product categories, MSA continues to deploy and expand its MSA+™ ecosystem, a sophisticated Hardware-enabled Software-as-a-Service ("HeSaaS") model that provides a turnkey approach by integrating MSA’s hardware with cloud-based software and support services, while delivering recurring revenue.

A detailed listing of our significant product offerings in the aforementioned product groups above is included in MSA's Annual Report on Form 10-K for the year ended December 31, 2025.

We tailor our product and solution offerings and distribution strategy to satisfy distinct customer preferences that vary across geographic regions.

To best serve these customer preferences, we have organized our business into four geographical operating segments that are aggregated into three reportable segments:

Americas, International and Corporate.

To best serve these customer preferences, we have organized our business into four geographical operating segments that are aggregated into two reportable segments:

Americas and International.

Our largest manufacturing and research and development facilities are located in the United States.

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Our International segment includes companies in Europe, the Middle East and Africa (“EMEA”) and the Asia Pacific region.

In our largest International subsidiaries (Germany, France, U.K., Ireland and China), we develop, manufacture and sell a wide variety of products.

In our largest International subsidiaries (in Germany, France, U.K., Ireland and China), we develop, manufacture and sell a wide variety of products.

In China, the products manufactured are sold primarily in China as well as in regional markets.

Operations in other International segment countries focus primarily on sales and distribution in their respective home country markets.

Although some of these companies may perform limited production, most of their sales are of products manufactured in our plants in Germany, France, the U.S., U.K., Ireland, Morocco and China or are purchased from third-party vendors.

The Corporate segment primarily consists of general and administrative expenses incurred in our corporate headquarters, costs associated with corporate development initiatives, legal expense, interest expense, foreign exchange gains or losses and other centrally-managed costs.

Corporate general and administrative costs comprise the majority of the expense in the Corporate segment.

On May 6, 2025, we acquired M&C TechGroup and its affiliated companies ("M&C") in a transaction valued at approximately $189 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.

M&C’s product portfolio includes systems and solutions for gas sampling, gas conditioning, as well as advanced process control.

Refer to Note 15—Acquisitions to the unaudited condensed consolidated financial statements in Part I Item 1 of this Form 10-Q for further information.

RESULTS OF OPERATIONS

Three Months Ended September 30, 2025, Compared to Three Months Ended September 30, 2024

Net Sales Three Months Ended September 30, Dollar

Increase Percent

(In millions, except percentage change) 2025 2024

Consolidated $468.4 $432.7 $35.7 8.3%

Americas 313.3 299.5 13.8 4.6%

International 155.1 133.2 21.9 16.4%

Net sales for the three months ended September 30, 2025, were $468.4 million, an increase of $35.7 million, or 8.3%, compared to $432.7 million in the same period of 2024.

Please refer to the Net Sales table below for a reconciliation of the quarter over quarter sales change.

Net Sales Three Months Ended

September 30, 2025 versus September 30, 2024

(Percent Change) Americas International Consolidated

GAAP reported sales change 4.6% 16.4% 8.3%

Currency translation effects (0.4)% (4.0)% (1.5)%

Acquisitions (1.7)% (7.5)% (3.6)%

Organic sales change 2.5% 4.9% 3.2%

Organic sales change is a non-GAAP financial measure.

See the "Non-GAAP Financial Measures" section below.

Net sales for the Americas segment were $313.3 million in the third quarter of 2025, an increase of $13.8 million, or 4.6%, compared to $299.5 million in the same period of 2024.

Organic sales in the Americas segment increased 2.5% during the period, driven by growth in detection and industrial PPE partially offset by a decrease in fire service.

M&C added $5.3 million of sales to the Americas segment during the period.

Net sales for the International segment were $155.1 million in the third quarter of 2025, an increase of $21.9 million, or 16.4%, compared to $133.2 million in the same period of 2024.

Organic sales in the International segment increased 4.9% during the period, driven by double-digit growth in industrial PPE and to a lesser extent detection partially offset by a decline in fire service.

M&C added $10.0 million of sales to the International segment during the period.

We maintain our low single-digit full-year organic sales growth outlook.

While our business remains healthy, the fourth quarter will be impacted by timing in the Fire Service market and the U.S.

government shutdown.

The timing of Assistance to Firefighter Grants (AFG) being released and approval of the next National Fire Protection Association standard remain key variables for the balance of the year that are beyond our control.

We are monitoring the status of the U.S.

government shutdown and analyzing how a prolonged shutdown could impact our business.

We believe a portion of our fourth quarter sales will be impacted by the AFG timing delay and the ongoing U.S.

government shutdown, with most of that impact in Fire Service.

We also continue to monitor evolving macroeconomic factors including tariffs and analyze how they could impact our business.

However, we expect continued momentum in Fall Protection and Detection as key performance tailwinds.

Refer to Note 9—Segment Information to the unaudited condensed consolidated financial statements in Part I Item 1 of this Form 10-Q, for information regarding sales by product group.

Gross profit .

Gross profit for the third quarter of 2025 was $217.6 million, an increase of $10.1 million or 4.9%, compared to $207.5 million in the same period of 2024.

The ratio of gross profit to net sales was 46.5% in the third quarter of 2025 compared to 47.9% in the same quarter last year.

The decrease in gross profit margin is primarily related to inflation and tariff impacts as well as to a lesser extent transactional foreign currency challenges and the additional amortization related to the M&C acquisition, partially offset by price realization.

Selling, general and administrative expenses.

Selling, general and administrative ("SG&A") expenses were $102.9 million during the third quarter of 2025, an increase of $7.8 million or 8.1%, compared to $95.1 million in the same period of 2024.

SG&A expenses were 22.0% of net sales during both the third quarter of 2025 and 2024.

SG&A includes $5.4 million of expenses associated with M&C operations and $1.9 million of strategic transaction costs.

Organic SG&A decreased by approximately $0.9 million or 1.0% driven primarily by lower variable compensation and discretionary expense management partially offset by inflation and higher sales commission expense on detection growth.

Please refer to the SG&A expenses table below for a reconciliation of the quarter over quarter expense change.

Selling, general, and administrative expenses Three Months Ended

September 30, 2025 versus September 30, 2024

(Percent Change) Consolidated

GAAP reported change 8.1%

Currency translation effects (1.7)%

Acquisitions and related strategic transaction costs (7.4)%

Organic change (1.0)%

Organic SG&A change is a non-GAAP financial measure.

See the "Non-GAAP Financial Measures" section below.

Research and development expense .

Research and development expense was $16.5 million during the third quarter of 2025, a decrease of $0.2 million, compared to $16.7 million in the same period of 2024.

Research and development expense was 3.5% of net sales in the third quarter of 2025 and 3.9% in the third quarter of 2024.

During the third quarter of 2025 and 2024, we capitalized $3.7 million and $3.2 million of software development costs, respectively.

Depreciation expense for capitalized software development costs of $2.8 million and $2.7 million for the third quarter of 2025 and 2024, respectively, was recorded in Costs of products sold on the unaudited Condensed Consolidated Statements of Income.

MSA remains committed to dedicating significant resources to research and development activities, including the recently introduced ALTAIR io ™ 6 portable gas detector and V-Gard H2 ® full brim safety helmet.

As we continue to invest a significant portion of our new product development into technology-based safety solutions, we anticipate that the historical relationship of research and development expense and capitalized software development costs to net sales will continue to evolve;

however, we do not anticipate reductions in the relative level of total spend on research and development activities on an annual basis.

Total spend on both software development and research and development activities was $20.2 million and $19.9 million during the third quarter of September 30, 2025, and 2024, respectively.

Restructuring charges .

Restructuring charges of $0.1 million during the third quarter of 2025 were primarily related to initiatives to right-size the organization in response to macroeconomic conditions.

Restructuring charges of $1.2 million in the same period of 2024 were primarily related to initiatives to optimize our manufacturing footprint and improve productivity.

Currency exchange .

Currency exchange losses were $3.9 million in the third quarter of 2025 compared to $3.0 million in the same period of 2024.

The currency exchange activity for both periods related primarily to foreign currency exposure on unsettled inter-company balances.

Refer to Note 17—Derivative Financial Instruments to the unaudited condensed consolidated financial statements in Part I Item 1 of this Form 10-Q, for information regarding our currency exchange rate risk management strategy.

GAAP operating income.

Consolidated operating income for the third quarter of 2025 was $94.3 million compared to $91.5 million in same period of 2024.

The increase in operating income was primarily related to the contribution from M&C.

Adjusted operating income.

Americas adjusted operating income for the third quarter of 2025 was $88.7 million, a decrease of $3.1 million or 3.4% compared to $91.8 million in the same period of 2024.

The decrease in adjusted operating income is primarily attributable to higher SG&A expense.

International adjusted operating income for the third quarter of 2025 was $24.8 million, an increase of $6.6 million, or 36.6%, compared to $18.2 million in the same period of 2024.

The increase in adjusted operating income is attributable to higher sales volumes and the contribution from M&C.

Corporate segment adjusted operating loss for the third quarter of 2025 was $9.8 million, a decrease of $2.3 million, compared to an adjusted operating loss of $12.1 million in the same period of 2024, driven by decreased professional service fees and other discretionary expense management as well as decreased variable compensation partially offset by inflation.

The following tables present a summary of adjusted operating income (loss), adjusted operating margin %, adjusted EBITDA and adjusted EBITDA % by reportable segment.

Adjusted operating margin % is calculated as adjusted operating income (loss) divided by net sales and adjusted EBITDA margin % is calculated as adjusted EBITDA divided by net sales.

(In thousands) Americas International Corporate Consolidated

Three months ended September 30, 2025

Net sales $ 313,350 $ 155,095 $ — $ 468,445

GAAP operating income 94,310

Adjusted operating income (loss) 88,680 24,834 (9,773) 103,741

Adjusted operating margin % 28.3 % 16.0 %

Adjusted EBITDA 98,656 29,831 (9,553) 118,934

Adjusted EBITDA % 31.5 % 19.2 %

Three months ended September 30, 2024

Net sales $ 299,497 $ 133,182 $ — $ 432,679

GAAP operating income 91,477

Adjusted operating income (loss) 91,822 18,174 (12,081) 97,915

Adjusted operating margin % 30.7 % 13.6 %

Adjusted EBITDA 101,339 22,119 (11,853) 111,605

Adjusted EBITDA % 33.8 % 16.6 %

Adjusted operating income (loss), adjusted operating margin %, adjusted EBITDA and Adjusted EBITDA margin % are non-GAAP financial measures and operating ratios derived from non-GAAP financial measures.

Refer to Note 9—Segment Information to the unaudited condensed consolidated financial statements in Part I Item 1 of this Form 10-Q for reconciliation of total adjusted operating income from reportable segments to income before income taxes and table below for reconciliation of adjusted EBITDA to net income.

See also the "Non-GAAP Financial Information" section below.

A reconciliation of total adjusted EBITDA and total adjusted operating income from reportable segments to net income is presented in the following table:

Three Months Ended September 30,

(In thousands) 2025 2024

Adjusted EBITDA $ 118,934 $ 111,605

Depreciation and amortization 15,193 13,690

Adjusted operating income $ 103,741 $ 97,915

Currency exchange losses, net 3,875 2,985

Restructuring charges (Note 4) 58 1,184

Acquisition-related amortization 3,595 2,269

Transaction costs (a)

GAAP operating income $ 94,310 $ 91,477

Interest expense 8,416 9,153

Other income, net (6,562) (5,833)

Income before income taxes 92,456 88,157

Provision for income taxes 22,843 21,509

Net income $ 69,613 $ 66,648

(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.

Total other expense, net.

Total other expense, net, for the third quarter of 2025 was $1.9 million, compared to $3.3 million for the same period of 2024, driven primarily by decreased interest expense related to lower interest rates as well as increased pension income driven by a higher expected rate of return.

Income taxes.

The reported effective tax rate for the third quarter of 2025 was 24.7% compared to 24.4% in the same period of 2024.

The increase from the prior year was primarily driven by discrete expense booked in the third quarter of 2025 related to the filing of prior period tax returns, partially offset by a discrete benefit booked in the third quarter of 2025 related to the statutory rate decrease in Germany.

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.

On July 4, 2025, the United States enacted into law the One, Big, Beautiful Bill Act ("the Act").

The Act makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation.

The Act has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

The Company is currently assessing the impact of these provisions on our consolidated financial statements and currently do not expect a material impact.

Net income was $69.6 million for the third quarter of 2025, or $1.77 per diluted share, compared to $66.6 million, or $1.69 per diluted share, in the same period of 2024.

Nine Months Ended September 30, 2025, Compared to Nine Months Ended September 30, 2024

Net sales for the nine months ended September 30, 2025, were $1,363.9 million, an increase of $55.5 million, or 4.2%, compared to $1,308.4 million in the same period of 2024.

Although some of these companies may perform limited production, most of their sales are of products manufactured in our plants in Germany, France, the U.S., U.K., Ireland, Mexico, Morocco and China or are purchased from third-party vendors.

Corporate expenses not allocated to the reportable segments consist of general and administrative expenses incurred in our corporate headquarters, costs associated with corporate development initiatives, legal expense, interest expense, foreign exchange gains or losses and other centrally-managed costs.

General and administrative costs and overhead comprise the majority of the corporate related expenses.

Three Months Ended March 31, 2026, Compared to Three Months Ended March 31, 2025

Net sales for the three months ended March 31, 2026, were $463.6 million, an increase of $42.3 million, or 10.0%, compared to $421.3 million in the same period of 2025.

Please refer to the Net Sales table for a reconciliation of the period over period sales change.

Net Sales Nine Months Ended September 30, Dollar

Net Sales Three Months Ended March 31, Dollar

Increase Percent

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International 138.4 128.2 10.2 8.0%

Net Sales Nine Months Ended

September 30, 2025 versus September 30, 2024

Net Sales Three Months Ended

March 31, 2026, versus March 31, 2025

(Percent Change) Americas International Consolidated

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See the “Non-GAAP Financial Measures” section below.

Net sales for the Americas segment were $926.6 million in the nine months ended September 30, 2025, an increase of $16.9 million, or 1.9%, compared to $909.7 million in the same period of 2024.

Organic sales in the Americas segment increased 1.7% during the period, driven by growth in detection and industrial PPE partially offset by a decrease in fire service.

Net sales for the Americas segment were $325.2 million in the three months ended March 31, 2026, an increase of $32.1 million, or 11.0%, compared to $293.1 million in the same period of 2025.

Organic sales in the Americas segment increased 7.2% during the period, driven by growth in all three product groups with high single digit expansion in both detection and fire service.

M&C added $5.3 million of sales to the Americas segment during the period.

Net sales for the International segment were $437.3 million in the nine months ended September 30, 2025, an increase of $38.6 million, or 9.7%, compared to $398.7 million in the same period of 2024.

Organic sales in the International segment increased 3.3% during the period, driven by growth in detection and industrial PPE.

Net sales for the International segment were $138.4 million in the three months ended March 31, 2026, an increase of $10.2 million, or 8.0%, compared to $128.2 million in the same period of 2025.

Organic sales in the International segment decreased 6.8% during the period, resulting from double-digit decline in fire service and detection largely driven by order timing, economic conditions in Europe, and the conflict in the Middle East partially offset by growth in industrial PPE.

M&C added $9.6 million of sales to the International segment during the period.

The operating environment continues to be dynamic with continued macroeconomic, tariff and geopolitical uncertainty, particularly surrounding the conflict in the Middle East.

We expect to generate full-year mid-single digit organic sales growth in 2026.

We anticipate ongoing momentum in portable gas detection and fall protection as key growth drivers, as well as SCBA, which should benefit, in part, from the timing delays in 2025 that shifted some business to 2026.

Furthermore, pricing actions in 2025 and 2026, along with moderate volume growth, should also support our outlook.

Overall backlog remains healthy, and we have a solid commercial pipeline.

MSA has applied for International Emergency Economic Powers Act ("IEEPA") tariff refunds through US Customs and Border Protection’s (“CBP”) newly developed Consolidated Administration and Processing of Entries (“CAPE”) functionality within its Automated Commercial Environment (“ACE”) Portal.

CBP has indicated refunds would be issued within 60-90 days of IEEPA tariff claim acceptance, but it is possible that our submission may not be accepted or that delays could occur for a variety of reasons.

As of March 31, 2026, the Company has not recorded any amount related to potential tariff refunds in our unaudited condensed consolidated financial statements.

Refer to Note 9—Segment Information to the unaudited condensed consolidated financial statements in Part I Item 1 of this Form 10-Q, for information regarding sales by product group.

Gross profit .

Gross profit for the nine months ended September 30, 2025, was $631.7 million, an increase of $5.7 million or 0.9%, compared to $626.0 million in the same period of 2024.

The ratio of gross profit to net sales was 46.3% during the nine months ended September 30, 2025 compared to 47.8% in the same period of 2024.

The decrease in gross profit margin is primarily related to inflation and transactional foreign currency challenges as well as to a lesser extent the impacts of tariffs and additional amortization related to the M&C acquisition partially offset by price realization and improved productivity.

Gross profit for the three months ended March 31, 2026, was $219.6 million, an increase of $26.2 million or 13.5%, compared to $193.4 million in the same period of 2025.

The ratio of gross profit to net sales was 47.4% during the three months ended March 31, 2026, compared to 45.9% in the same period of 2025.

The increase in gross profit margin is primarily related to price realization, productivity, product mix, and favorable transactional foreign currency partially offset by inflation, tariffs and additional amortization related to the M&C acquisition.

Selling, general and administrative expenses.

SG&A expenses were $308.9 million during the nine months ended September 30, 2025, an increase of $14.6 million or 4.9%, compared to $294.3 million in the same period of 2024.

Overall, SG&A expenses were 22.6% of net sales during the nine months ended September 30, 2025, compared to 22.5% of net sales in the same period of 2024.

Selling, general and administrative (“SG&A”) expenses were $107.7 million during the three months ended March 31, 2026, an increase of $13.7 million or 14.6%, compared to $94.0 million in the same period of 2025.

Overall, SG&A expenses were 23.2% of net sales during the three months ended March 31, 2026, compared to 22.3% of net sales in the same period of 2025.

SG&A includes $5.5 million of expenses associated with M&C operations and $2.2 million of strategic transaction costs.

Organic SG&A decreased $5.6 million or 1.9%.

driven primarily by the absence of the net cost for product related legal matter from the prior year, lower variable compensation, discretionary expense management and lower professional service costs mostly offset by inflation and higher sales commission expense on double-digit detection growth.

Organic SG&A increased $4.3 million or 4.6%, driven primarily by higher variable compensation largely due to the cancellation of unvested equity awards in the prior period in accordance with plan terms, higher professional service costs and inflation.

Please refer to the selling, general, and administrative expenses table for a reconciliation of the period over period expense change.

Selling, general, and administrative expenses Nine Months Ended

September 30, 2025 versus September 30, 2024

Selling, general, and administrative expenses Three Months Ended

March 31, 2026, versus March 31, 2025

(Percent Change) Consolidated

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Research and development expense .

Research and development expense was $49.2 million during the nine months ended September 30, 2025, a decrease of $0.5 million, compared to $49.7 million in the same period of 2024.

Research and development expense was 3.6% of net sales in the nine months ended September 30, 2025 and 3.8% of net sales in the same period of 2024.

During the nine months ended September 30, 2025 and 2024, we capitalized $10.4 million and $10.0 million of software development costs, respectively.

Depreciation expense for capitalized software development costs of $8.8 million and $8.2 million during the nine months ended September 30, 2025 and 2024, respectively, was recorded in costs of products sold on the unaudited Condensed Consolidated Statements of Income.

Research and development expense was $16.4 million during the three months ended March 31, 2026, an increase of $0.7 million, compared to $15.7 million in the same period of 2025.

Research and development expense was 3.5% of net sales in the three months ended March 31, 2026, and 3.7% of net sales in the same period of 2025.

During the three months ended March 31, 2026, and 2025, we capitalized $4.2 million and $3.3 million of software development costs, respectively.

Amortization expense for capitalized software development costs of $3.3 million and $2.9 million during the three months ended March 31, 2026, and 2025, respectively, was recorded in costs of products sold on the unaudited Condensed Consolidated Statements of Income.

The Company's commitment to innovation is supported by a research and development pipeline focused on integrating advanced technology into core safety equipment.

Approximately half of MSA’s R&D engineers are now focused on software development to support the expansion of its connected ecosystems and HeSaaS models.

however, we do not anticipate reductions in the relative level of total spend on research and development activities on an annual basis.

Total spend on both software development and research and development activities was $59.6 million and $59.7 million during the nine months ended September 30, 2025, and 2024, respectively.

Total spend on both software development and research and development activities was $20.6 million and $19.0 million during the three months ended March 31, 2026, and 2025, respectively.

Restructuring charges .

Restructuring charges of $2.5 million during the nine months ended September 30, 2025 were primarily related to initiatives to right-size the organization in response to macroeconomic conditions and ongoing initiatives to optimize our manufacturing footprint and improve productivity.

Restructuring charges of $5.7 million in the same period of 2024 related to our ongoing initiatives to optimize our manufacturing footprint and improve productivity as well as management restructuring.

Currency exchange .

Currency exchange losses were $13.2 million during the nine months ended September 30, 2025, compared to $4.7 million in the same period of 2024.

Restructuring charges of $2.3 million during the three months ended March 31, 2026, were primarily related to management restructuring, footprint optimization and other ongoing initiatives to right-size the organization in response to macroeconomic conditions.

Restructuring charges of $1.9 million in the same period of 2025 were primarily related to initiatives to right-size the organization in response to macroeconomic conditions, optimize our manufacturing footprint and improve productivity.

Currency exchange losses, net .

Currency exchange losses were $0.2 million during the three months ended March 31, 2026, compared to $4.1 million in the same period of 2025.

The currency exchange activity for both periods related primarily to foreign currency exposure on unsettled inter-company balances.

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GAAP operating income.

Consolidated operating income for the nine months ended September 30, 2025, was $257.9 million compared to $271.5 million in the same period of 2024.

The decrease in operating results was primarily driven by increased SG&A expenses and currency exchange losses, partially offset by higher sales and lower restructuring charges as discussed further above.

Consolidated operating income for the three months ended March 31, 2026, was $93.0 million compared to $77.8 million in the same period of 2025.

The increase in operating results was primarily driven by higher gross profit and lower currency exchange losses partially offset by higher SG&A and restructuring charges as discussed further above.

Adjusted operating income.

Americas adjusted operating income for the nine months ended September 30, 2025 was $260.7 million, a decrease of $15.8 million, or 5.7%, compared to $276.5 million in the same period of 2024.

The decrease in adjusted operating income is attributable to lower gross profit and slightly higher SG&A expenses.

International adjusted operating income was $63.7 million, an increase of $7.8 million, or 13.9%, compared to $55.9 million in the same period of 2024.

Higher sales volumes and the contribution from M&C were partially offset by higher SG&A expense.

Corporate segment adjusted operating loss for the nine months ended September 30, 2025, was $31.7 million, a decrease of $6.7 million compared to an adjusted operating loss of $38.4 million in the same period of 2024 driven by decreased professional service fees and decreased variable compensation as well as other discretionary expense management partially offset by inflation.

The following tables present a summary of adjusted operating income (loss), adjusted operating margin %, adjusted EBITDA and adjusted EBITDA % by reportable segment.

Americas adjusted operating income for the three months ended March 31, 2026, was $98.1 million, an increase of $19.4 million, or 24.7%, compared to $78.7 million in the same period of 2025.

The increase in adjusted operating income is attributable to higher gross profit partially offset by higher SG&A expenses.

International adjusted operating income was $14.5 million, a decrease of $4.2 million, or 22.3%, compared to $18.7 million in the same period of 2025.

Lower gross profit and higher SG&A expense were partially offset by the contribution from M&C.

Corporate expenses for the three months ended March 31, 2026, was $11.5 million, an increase of $1.6 million compared to $9.9 million in the same period of 2025, driven by increased variable compensation, increased professional service fees and inflation.

The following tables present a summary of adjusted operating income (loss), adjusted operating margin %, adjusted EBITDA and adjusted EBITDA %.

Adjusted operating margin % is calculated as adjusted operating income (loss) divided by net sales and adjusted EBITDA margin % is calculated as adjusted EBITDA divided by net sales.

(In thousands) Americas International Corporate Consolidated

Nine months ended September 30, 2025

(In thousands) Americas International Total Reportable Segments Corporate Consolidated

Three Months Ended March 31, 2026

Net sales $ 325,238 $ 138,394 $ 463,632 $ 463,632

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Adjusted EBITDA % 33.3 % 13.8 % 27.5 %

Nine months ended September 30, 2024

Three Months Ended March 31, 2025

Net sales $ 293,160 $ 128,180 $ 421,340 $ 421,340

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A reconciliation of total adjusted EBITDA and total adjusted operating income from reportable segments to net income is presented in the following table:

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands) 2026 2025

Adjusted EBITDA $ 336,912 $ 334,789

Adjusted EBITDA from reportable segments $ 127,399 $ 111,137

Depreciation and amortization 14,742 13,736

Adjusted operating income $ 292,675 $ 294,114

Adjusted operating income from reportable segments $ 112,657 $ 97,401

Corporate expenses 11,536 9,899

Currency exchange losses, net 199 4,076

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Transaction costs (a)

Net cost for product-related legal matter — 5,000

GAAP operating income $ 93,014 $ 77,761

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Net income $ 71,269 $ 59,605

(a) Transaction costs include advisory, legal, accounting, valuation, and other professional or consulting fees incurred in connection with acquisitions and divestitures.

(a) Transaction costs include advisory, legal, accounting, valuation, and other professional or consulting fees incurred during our evaluation of or in connection with acquisitions and divestitures.

These costs are included in Selling, general and administrative expense in the unaudited Condensed Consolidated Statements of Income.

Total other expense, net.

Total other expense, net, for the nine months ended September 30, 2025 was $4.8 million, compared to $13.3 million in the same period of 2024, driven primarily by decreased interest expense related to lower interest rates as well as increased pension income driven by a higher expected rate of return.

Total other expense (income), net.

Total other expense for the three months ended March 31, 2026, was nominal, compared to other income of $0.2 million in the same period of 2025.

Higher interest expense was mostly offset by increased pension income driven by a higher expected rate of return.

Income taxes.

The reported effective tax rate for the nine months ended September 30, 2025 was 24.2% compared to 23.7% in the same period of 2024.

The increase from the prior year was primarily driven by an increase in state income taxes.

The reported effective tax rate for the three months ended March 31, 2026, was 23.4% compared to 23.5% in the same period of 2025.

The slight decrease from the prior year was primarily driven by additional benefit related to export sales.

We are subject to regular review and audit by both foreign and domestic tax authorities.

Net income was $192.0 million for the nine months ended September 30, 2025, or $4.87 per diluted share compared to net income of $197.0 million, or $4.98 per diluted share, in the same period of 2024.

Net income was $71.3 million for the three months ended March 31, 2026, or $1.83 per diluted share compared to net income of $59.6 million, or $1.51 per diluted share, in the same period of 2025.

Non-GAAP Financial Measures

This report includes certain non-GAAP financial measures and operating ratios derived from non-GAAP financial measures.

These financial measures and ratios include organic (referred to in our historical filings as constant currency) sales change, organic SG&A change, adjusted operating income (loss), adjusted operating margin %, adjusted EBITDA and adjusted EBITDA margin %.

These financial measures and ratios include organic (referred to in our historical filings as constant currency) sales change, organic SG&A change, adjusted operating income, adjusted operating margin %, adjusted EBITDA and adjusted EBITDA margin %.

Organic sales and SG&A change are non-GAAP financial measures provided by the Company to give a better understanding of the Company's underlying business performance.

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Organic sales and SG&A change highlight ongoing business performance excluding the impact of fluctuating foreign currencies, acquisitions and divestitures.

Adjusted operating income (loss), adjusted operating margin %, adjusted EBITDA and adjusted EBITDA margin % are non-GAAP financial measures and operating ratios derived from non-GAAP measures.

Total reportable segment adjusted operating income is reconciled above to the nearest GAAP financial measure, operating income, and excludes restructuring, currency exchange, net cost for product related legal matter, transaction costs and acquisition-related amortization.

Adjusted operating income, adjusted operating margin %, adjusted EBITDA and adjusted EBITDA margin % are non-GAAP financial measures and operating ratios derived from non-GAAP measures.

Total reportable segment adjusted operating income is reconciled above to the nearest GAAP financial measure, operating income, and excludes restructuring, currency exchange, transaction costs and acquisition-related amortization.

Total reportable segment adjusted EBITDA is reconciled above to the nearest GAAP financial measure, net income and, in addition to the items summarized above that are excluded from adjusted operating income (loss), excludes depreciation and amortization expense;

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Our main source of liquidity is operating cash flows, supplemented by borrowings.

At September 30, 2025, approximately 47% of our long-term debt is at fixed interest rates with repayment schedules through 2036.

Our principal liquidity requirements are for working capital, capital expenditures, principal and interest payments on debt, dividend payments and share repurchases.

At March 31, 2026, approximately 47% of our long-term debt is at fixed interest rates with repayment schedules through 2036.

The remainder of our long-term debt is at variable rates on an unsecured revolving credit facility due in 2030.

At September 30, 2025, approximately 82% of our borrowings are denominated in U.S.

At March 31, 2026, approximately 71% of our borrowings are denominated in U.S.

dollars, which limits our exposure to currency exchange rate fluctuations.

We believe MSA's healthy balance sheet and access to significant capital at September 30, 2025 positions us well to navigate through a dynamic operating environment and other unexpected events.

We maintain a balanced capital deployment strategy that focuses on investing for organic growth and pursuing inorganic growth opportunities, as well as returning cash to shareholders in the form of dividends and share buybacks.

At September 30, 2025, the Company had cash and cash equivalents totaling $170.0 million.

Cash, cash equivalents and restricted cash increased $5.8 million during the nine months ended September 30, 2025, compared to increasing $6.6 million during the same period in 2024.

At September 30, 2025, $965.3 million of the existing $1.3 billion revolving credit facility was unused, including letters of credit issued under the facility.

We believe MSA's healthy balance sheet and access to significant capital at March 31, 2026, positions us well to navigate through a dynamic operating environment and other unexpected events.

We maintain a balanced capital deployment strategy that focuses on investing for organic growth and pursuing inorganic growth opportunities, returning cash to shareholders in the form of dividends, and share buybacks.

At March 31, 2026, the Company had cash and cash equivalents totaling $180.2 million.

Cash and cash equivalents increased $15.1 million during the three months ended March 31, 2026, compared to increasing $6.1 million during the same period in 2025.

At March 31, 2026, $972.3 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.

The Company also has access under the Prudential Note Agreement and NYL Note Facility, subject to the issuers' acceptance, to $195.0 million and $50.0 million aggregate principal amount, respectively, of senior unsecured notes.

Operating activities.

Operating activities provided cash of $241.5 million during the nine months ended September 30, 2025, compared to $188.5 million during the same period in 2024.

The increased cash flow from operating activities was primarily related to lower cash used for variable compensation as compared to the prior year and lower cash usage for working capital needs.

The working capital cash usage decrease related primarily to inventory, partially offset by higher cash use for accounts payable and accounts receivable.

Operating activities provided cash of $75.7 million during the three months ended March 31, 2026, compared to $61.8 million during the same period in 2025.

The increased cash flow from operating activities was primarily related to higher operating results and lower cash used for variable compensation and other accruals as compared to the prior year, partially offset by higher cash usage for working capital needs.

Investing activities.

Investing activities used cash of $239.9 million during the nine months ended September 30, 2025, compared to using $39.7 million during the same period in 2024.

The acquisition of M&C and capital expenditures, including a $19.6 million strategic footprint investment, drove the increase in cash outflows from investing activities during the nine months ended September 30, 2025.

Investing activities used cash of $10.6 million during the three months ended March 31, 2026, compared to using $10.8 million during the same period in 2025.

Capital expenditures drove the decrease in cash outflows from investing activities during the three months ended March 31, 2026.

We remain committed to evaluating acquisition opportunities that will allow us to continue to grow in key end markets and geographies.

Financing activities.

Financing activities provided cash of $2.2 million during the nine months ended September 30, 2025, compared to using cash of $136.2 million during the same period in 2024.

During the nine months ended September 30, 2025, we had net proceeds on long-term debt of $115.3 million, used primarily to fund the M&C acquisition, as compared to net payments of $51.0 million during the same period in 2024.

We paid cash dividends of $61.6 million during the nine months ended September 30, 2025, compared to $58.7 million in the same period in 2024.

We used cash of $50.0 million during the nine months ended September 30, 2025, to repurchase shares, including $40.0 million related to our share repurchase program, compared to $27.4 million in the same period in 2024, including $20.0 million related to our share repurchase program.

Financing activities used cash of $47.2 million during the three months ended March 31, 2026, compared to using cash of $45.6 million during the same period in 2025.

During the three months ended March 31, 2026, we had net proceeds on long-term debt of $33.8 million as compared to net payments of $7.5 million during the same period in 2025.

We paid cash dividends of $20.6 million during the three months ended March 31, 2026, compared to $20.0 million in the same period in 2025.

We used cash of $60.4 million during the three months ended March 31, 2026, to repurchase shares, including $50.4 million related to our share repurchase program, compared to $18.3 million in the same period in 2025, including $10.0 million related to our share repurchase program.

The remainder in both periods related to our employee stock compensation programs.

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The position of the U.S.

dollar relative to international currencies, primarily the euro and British pound, at September 30, 2025, resulted in a translation gain of $65.0 million being recorded to the cumulative translation adjustments shareholders' equity account during the nine months ended September 30, 2025, compared to a $1.8 million translation gain being recorded to the cumulative translation adjustments shareholders' equity account during the same period in 2024.

dollar relative to international currencies, primarily the euro and British pound, at March 31, 2026, resulted in a translation loss of $6.1 million being recorded to the cumulative translation adjustments shareholders' equity account during the three months ended March 31, 2026, compared to a $22.5 million translation gain being recorded to the cumulative translation adjustments shareholders' equity account during the same period in 2025.

COMMITMENTS AND CONTINGENCIES

We made contributions of $5.7 million to our pension plans during the nine months ended September 30, 2025.

We made contributions of $2.2 million to our pension plans during the three months ended March 31, 2026.

We expect to make net contributions between $8.0 million and $10.0 million to our pension plans in 2026, which are primarily associated with statutorily required plans in the International reporting segment.

The Company had outstanding bank guarantees and standby letters of credit with banks as of September 30, 2025, totaling $10.4 million, of which $1.5 million relate to the senior revolving credit facility.

The Company had outstanding bank guarantees and standby letters of credit with banks as of March 31, 2026, totaling $7.7 million, of which $1.5 million relate to the senior revolving credit facility.

These 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.

At September 30, 2025, the Company has $0.9 million of restricted cash in support of these arrangements.

At March 31, 2026, the Company has $1.2 million of restricted cash in support of these arrangements.

We have purchase commitments for materials, supplies, services, and property, plant and equipment as part of our ordinary conduct of business.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2025.

During the nine months ended September 30, 2025, we made an acquisition that raised business combinations to a critical accounting policy and estimate used in the preparation of our consolidated financial statements.

Business Combinations

In accordance with the accounting guidance for business combinations, the Company uses the acquisition method of accounting to allocate costs of acquired businesses to the assets acquired and liabilities assumed based on their estimated fair values at the dates of acquisition.

The excess costs of acquired businesses over the fair values of the assets acquired and liabilities assumed will be recognized as goodwill.

The valuations of the acquired assets and liabilities will impact the determination of future operating results.

In addition to using management estimates and negotiated amounts, the Company uses a variety of information sources to determine the estimated fair values of acquired assets and liabilities including:

third-party appraisals for the estimated value and lives of identifiable intangible assets and property, plant and equipment;

third-party actuaries for the estimated obligations of defined benefit pension plans and similar benefit obligations;

and legal counsel or other experts to assess the obligations associated with legal, environmental and other contingent liabilities.

The business and technical judgment of management was used in determining which intangible assets have indefinite lives and in determining the useful lives of finite-lived intangible assets in accordance with the accounting guidance for goodwill and other intangible assets.

RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING STANDARDS

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis