What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-07-31 compared with 2026-05-05 · 190 added, 69 removed, 156 unchanged (62% of the section changed)

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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 Three Months Ended March 31, Dollar

RESULTS OF OPERATIONS

Three Months Ended June 30, 2026, Compared to Three Months Ended June 30, 2025

Net Sales Three Months Ended June 30, Dollar

Increase Percent

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International 161.9 154.0 7.9 5.1%

Net sales for the three months ended June 30, 2026, were $503.3 million, an increase of $29.2 million, or 6.2%, compared to $474.1 million in the same period of 2025.

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

Net Sales Three Months Ended

March 31, 2026, versus March 31, 2025

June 30, 2026 versus June 30, 2025

(Percent Change) Americas International Consolidated

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Acquisitions (0.7)% (2.4)% (1.2)%

Organic sales change 4.5% 0.3% 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 $341.4 million in the second quarter of 2026, an increase of $21.3 million, or 6.7%, compared to $320.1 million in the same period of 2025.

Organic sales in the Americas segment increased 4.5% during the period, driven by double-digit growth in industrial PPE and high-single digit growth in detection partially offset by a decrease in fire service due to delayed Assistance to Firefighters Grant (AFG) funding.

M&C added $1.9 million of sales to the Americas segment during the period as compared to prior year.

Net sales for the International segment were $161.9 million in the second quarter of 2026, an increase of $7.9 million, or 5.1%, compared to $154.0 million in the same period of 2025.

Organic sales in the International segment increased 0.3% during the period as double-digit growth in industrial PPE, primarily due to higher protective ballistic helmet sales in Europe, was mostly offset by a decline in detection largely driven by the conflict in the Middle East.

Sales in fire service were consistent with prior year.

M&C added $3.7 million of sales to the International segment during the period as compared to prior year.

The operating environment continues to be dynamic with continued macroeconomic, tariff and geopolitical uncertainty, particularly surrounding the conflict in the Middle East, and continued delays in 2025 AFG related fire service orders.

We are maintaining our mid-single-digit organic sales growth outlook for full-year 2026.

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

Overall backlog remains healthy, supported by a double-digit year-over-year order increase in the quarter, and we have strong order momentum and second half demand pipeline, particularly in U.S.

fire service.

We are also projecting a mid-single-digit contribution from acquisitions.

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 second quarter of 2026 was $249.3 million, an increase of $28.6 million or 12.9%, compared to $220.7 million in the same period of 2025.

The ratio of gross profit to net sales was 49.5% in the second quarter of 2026 compared to 46.6% in the same quarter last year.

The increase in gross profit margin reflects the strength of our MSA business system including price realization, productivity, and value added engineering efforts as well as favorable transactional foreign currency, and tariff refunds partially offset by inflation.

Selling, general and administrative expenses.

Selling, general and administrative (“SG&A”) expenses were $114.1 million during the second quarter of 2026, an increase of $2.0 million or 1.8%, compared to $112.1 million in the same period of 2025.

SG&A expenses were 22.7% of net sales during the second quarter of 2026 compared to 23.6% in the same quarter last year.

SG&A for 2026 includes $2.0 million of additional expenses associated with M&C operations as compared to the prior year.

SG&A also includes $1.7 million and $6.6 million of strategic transaction costs for the second quarter of 2026 and 2025, respectively.

Organic SG&A increased by approximately $3.4 million or 3.2%, driven primarily by higher variable compensation and inflation, partially offset by discretionary expense management.

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

June 30, 2026, versus June 30, 2025

(Percent Change) Consolidated

GAAP reported change 1.8%

Currency translation effects (1.5)%

Acquisitions and related strategic transaction costs 2.9%

Organic change 3.2%

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 $19.2 million during the second quarter of 2026, an increase of $2.2 million, compared to $17.0 million in the same period of 2025.

Research and development expense was 3.8% of net sales in the second quarter of 2026 and 3.6% in the second quarter of 2025.

During the second quarter of 2026 and 2025, we capitalized $3.7 million and $3.4 million of software development costs, respectively.

Depreciation expense for capitalized software development costs of $3.3 million and $3.1 million for the second quarter of 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.

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 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 $22.9 million and $20.4 million during the second quarter of June 30, 2026, and 2025, respectively.

Restructuring charges .

Restructuring charges were $2.2 million and $0.5 million during the second quarter of 2026 and 2025, respectively.

Charges in both periods were primarily related to initiatives to right-size the organization in response to macroeconomic conditions and footprint optimization.

Currency exchange .

Currency exchange losses were $1.9 million in the second quarter of 2026 compared to $5.3 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.

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 second quarter of 2026 was $112.0 million compared to $85.9 million in same period of 2025.

The increase in operating income 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 second quarter of 2026 was $109.1 million, an increase of $15.8 million or 16.9% compared to $93.3 million in the same period of 2025.

The increase in adjusted operating income is primarily attributable to attributable to increased sales and higher gross profit driven by price realization, productivity, favorable transactional foreign currency, and tariff refunds, partially offset by higher SG&A expenses.

International adjusted operating income for the second quarter of 2026 was $25.1 million, an increase of $4.9 million, or 24.3%, compared to $20.2 million in the same period of 2025.

The increase in adjusted operating income is attributable to higher gross profit driven by increased sales, productivity and favorable transactional foreign currency partially offset by higher SG&A expenses.

Corporate expenses for the second quarter of 2026 was $13.0 million, an increase of $1.0 million, compared to $12.0 million in the same period of 2025, driven by higher variable compensation and professional service fees, partially offset by discretionary expense management.

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 Total Reportable Segments Corporate Consolidated

Three months ended June 30, 2026

Net sales $ 341,451 $ 161,876 $ 503,327 $ — $ 503,327

GAAP operating income 111,959

Adjusted operating income (loss) 109,095 25,061 134,156 (13,038) 121,118

Adjusted operating margin % 32.0 % 15.5 % 26.7 %

Adjusted EBITDA 119,294 30,147 149,441 (13,038) 136,403

Adjusted EBITDA % 34.9 % 18.6 % 29.7 %

Three months ended June 30, 2025

Net sales $ 320,139 $ 153,977 $ 474,116 $ — $ 474,116

GAAP operating income 85,862

Adjusted operating income (loss) 93,320 20,158 113,478 (12,044) 101,434

Adjusted operating margin % 29.1 % 13.1 % 23.9 %

Adjusted EBITDA 103,366 24,661 128,027 (11,514) 116,513

Adjusted EBITDA % 32.3 % 16.0 % 27.0 %

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 June 30,

(In thousands) 2026 2025

Adjusted EBITDA from reportable segments $ 149,441 $ 128,027

Depreciation and amortization 15,285 14,549

Adjusted operating income from reportable segments $ 134,156 $ 113,478

Corporate Expenses 13,038 12,044

Currency exchange losses, net 1,896 5,286

Restructuring charges (Note 4) 2,209 488

Acquisition-related amortization 3,377 3,153

Transaction costs (a)

GAAP operating income $ 111,959 $ 85,862

Interest expense 7,951 8,116

Other income, net (7,379) (5,000)

Income before income taxes 111,387 82,746

Provision for income taxes 25,193 19,973

Net income $ 86,194 $ 62,773

(a) Transaction costs include advisory, legal, accounting, valuation, and other professional or consulting fees incurred during our evaluation 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 for the second quarter of 2026 was $0.6 million, compared to $3.1 million for the same period of 2025.

The decrease was primarily related to increased pension income, a result of higher expected return on plan assets, and to a lesser extent slightly lower interest expense.

Income taxes.

The reported effective tax rate for the second quarter of 2026 was 22.6% compared to 24.1% in the same period of 2025.

The decrease from the prior year was primarily driven by benefits associated with the finalization of initial global minimum corporate tax return filings (referred to as Pillar 2).

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.

Net income was $86.2 million for the second quarter of 2026, or $2.23 per diluted share, an increase of approximately 40%, compared to $62.8 million, or $1.59 per diluted share, in the same period of 2025.

Six Months Ended June 30, 2026, Compared to Six Months Ended June 30, 2025

Net Sales Six Months Ended June 30, Dollar

Increase Percent

(In millions, except percentage change) 2026 2025

Consolidated $967.0 $895.5 $71.5 8.0%

Americas 666.7 613.3 53.4 8.7%

International 300.3 282.2 18.1 6.4%

Net sales for the six months ended June 30, 2026, were $967.0 million, an increase of $71.5 million, or 8.0%, compared to $895.5 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 Six Months Ended

June 30, 2026, versus June 30, 2025

(Percent Change) Americas International Consolidated

GAAP reported sales change 8.7% 6.4% 8.0%

Currency translation effects (1.7)% (4.7)% (2.7)%

Acquisitions (1.2)% (4.7)% (2.3)%

Organic change 5.8% (3.0)% 3.0%

Organic sales change is a non-GAAP financial measure.

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

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 $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.

Net sales for the Americas segment were $666.7 million in the six months ended June 30, 2026, an increase of $53.4 million, or 8.7%, compared to $613.3 million in the same period of 2025.

Organic sales in the Americas segment increased 5.8% during the period, driven by growth in all three product groups with high single digit expansion in both detection and industrial PPE.

M&C added $7.3 million of sales to the Americas segment during the period as compared to prior year.

Net sales for the International segment were $300.3 million in the six months ended June 30, 2026, an increase of $18.1 million, or 6.4%, compared to $282.2 million in the same period of 2025.

Organic sales in the International segment decreased 3.0% during the period, resulting from declines in detection and fire service largely driven by order timing, economic conditions in Europe, and the conflict in the Middle East, partially offset by growth in industrial PPE, primarily due to higher protective ballistic helmet sales in Europe.

M&C added $13.3 million of sales to the International segment during the period as compared to prior year.

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 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.

Gross profit for the six months ended June 30, 2026, was $468.9 million, an increase of $54.8 million or 13.2%, compared to $414.1 million in the same period of 2025.

The ratio of gross profit to net sales was 48.5% during the six months ended June 30, 2026, compared to 46.2% 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 higher net tariffs and inflation and additional amortization related to the M&C acquisition.

Selling, general and administrative expenses.

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 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.

Selling, general and administrative (“SG&A”) expenses were $221.8 million during the six months ended June 30, 2026, an increase of $15.8 million or 7.6%, compared to $206.0 million in the same period of 2025.

Overall, SG&A expenses were 22.9% of net sales during the six months ended June 30, 2026, compared to 23.0% of net sales in the same period of 2025.

SG&A for 2026 includes $8.0 million of additional expenses associated with M&C operations as compared to the prior year.

SG&A also includes $3.9 million and $8.1 million of strategic transaction costs in the six months ended 2026 and 2025, respectively.

Organic SG&A increased $7.7 million or 3.9%, driven primarily by higher variable compensation, higher professional service costs, and inflation, partially offset by discretionary expense management.

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 Three Months Ended

March 31, 2026, versus March 31, 2025

Selling, general, and administrative expenses Six Months Ended

June 30, 2026, versus June 30, 2025

(Percent Change) Consolidated

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Research and development expense .

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.

Research and development expense was $35.5 million during the six months ended June 30, 2026, an increase of $2.8 million, compared to $32.7 million in the same period of 2025.

Research and development expense was 3.7% of net sales in the six months ended June 30, 2026, and 3.6% of net sales in the same period of 2025.

During the six months ended June 30, 2026, and 2025, we capitalized $7.9 million and $6.7 million of software development costs, respectively.

Amortization expense for capitalized software development costs of $6.6 million and $6.0 million during the six months ended June 30, 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.

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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 $20.6 million and $19.0 million during the three months ended March 31, 2026, and 2025, respectively.

Total spend on both software development and research and development activities was $43.4 million and $39.4 million during the six months ended June 30, 2026, and 2025, respectively.

Restructuring charges .

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 $4.5 million during the six months ended June 30, 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 $2.4 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.

Currency exchange losses were $2.1 million during the six months ended June 30, 2026, compared to $9.4 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 three months ended March 31, 2026, was $93.0 million compared to $77.8 million in the same period of 2025.

Consolidated operating income for the six months ended June 30, 2026, was $205.0 million compared to $163.6 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 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.

Americas adjusted operating income for the six months ended June 30, 2026, was $207.2 million, an increase of $35.2 million, or 20.5%, compared to $172.0 million in the same period of 2025.

The increase in adjusted operating income is attributable to increased sales and higher gross profit driven by price realization, productivity, and favorable transactional foreign currency, partially offset by higher SG&A expenses.

International adjusted operating income was $39.6 million, an increase of $0.7 million, or 1.9%, compared to $38.9 million in the same period of 2025.

The increase was driven by increased sales and the contribution from M&C.

Corporate expenses for the six months ended June 30, 2026, was $24.6 million, an increase of $2.7 million compared to $21.9 million in the same period of 2025, driven by increased variable compensation, increased professional service fees and inflation, partially offset by discretionary expense management.

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

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(In thousands) Americas International Total Reportable Segments Corporate Consolidated

Three Months Ended March 31, 2026

Six months ended June 30, 2026

Net sales $ 666,689 $ 300,270 $ 966,959 $ 966,959

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Adjusted EBITDA % 34.1 % 16.5 % 28.7 %

Three Months Ended March 31, 2025

Six months ended June 30, 2025

Net sales $ 613,299 $ 282,157 $ 895,456 $ 895,456

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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:

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands) 2026 2025

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

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.

Total other expense, net.

Total other expense for the six months ended June 30, 2026, was $0.6 million, compared to $2.9 million in the same period of 2025.

The decrease was primarily related to increased pension income, a result of higher expected return on plan assets, which was partially offset by higher interest expense.

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.

The reported effective tax rate for the six months ended June 30, 2026, was 23.0% compared to 23.8% in the same period of 2025.

The decrease from the prior year was primarily driven by additional benefits associated with the finalization of initial global minimum corporate tax return filings (referred to as Pillar 2).

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

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.

Net income was $157.5 million for the six months ended June 30, 2026, or $4.05 per diluted share, an increase of approximately 30%, compared to net income of $122.4 million, or $3.10 per diluted share, in the same period of 2025.

Non-GAAP Financial Measures

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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.

At June 30, 2026, approximately 48% 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 March 31, 2026, approximately 71% of our borrowings are denominated in U.S.

At June 30, 2026, approximately 83% 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 March 31, 2026, positions us well to navigate through a dynamic operating environment and other unexpected events.

We believe MSA's healthy balance sheet and access to significant capital at June 30, 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.

At June 30, 2026, the Company had cash and cash equivalents totaling $200.1 million.

Cash and cash equivalents increased $35.0 million during the six months ended June 30, 2026, compared to decreasing $17.6 million during the same period in 2025.

At June 30, 2026, $986.0 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.

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Operating activities.

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.

Operating activities provided cash of $171.1 million during the six months ended June 30, 2026, compared to $129.1 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.

Investing activities.

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.

Investing activities used cash of $23.2 million during the six months ended June 30, 2026, compared to using $227.9 million during the same period in 2025.

Capital expenditures drove cash outflows from investing activities during the six months ended June 30, 2026.

The acquisition of M&C for $187.7 million and capital expenditures, including a $19.6 million strategic footprint investment, drove the cash used in investing activities for the six months ended June 30, 2025 .

W e remain committed to evaluating acquisition opportunities which would enable us to continue to grow in key end markets and geographies, and have a robust pipeline.

Financing activities.

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.

Financing activities used cash of $105.9 million during the six months ended June 30, 2026, compared to providing cash of $74.0 million during the same period in 2025.

During the six months ended June 30, 2026, we had net proceeds on long-term debt of $20.8 million as compared to net proceeds of $165.2 million during the same period in 2025, used primarily to fund the M&C acquisition.

We paid cash dividends of $41.4 million during the six months ended June 30, 2026, compared to $40.9 million in the same period in 2025.

We used cash of $86.4 million during the six months ended June 30, 2026, to repurchase shares, including $76.1 million related to our share repurchase program, compared to $48.9 million in the same period in 2025, including $40.0 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 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.

dollar relative to international currencies, primarily the euro, at June 30, 2026, resulted in a translation loss of $8.3 million being recorded to the cumulative translation adjustments shareholders' equity account during the six months ended June 30, 2026, compared to a $66.7 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 $2.2 million to our pension plans during the three months ended March 31, 2026.

We made contributions of $4.5 million to our pension plans during the six months ended June 30, 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 March 31, 2026, totaling $7.7 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 June 30, 2026, totaling $10.0 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 March 31, 2026, the Company has $1.2 million of restricted cash in support of these arrangements.

At June 30, 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.

11 unchanged sentences

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