MSA Safety Incorporated

Second quarter sales were $503 million, up 6% reported versus the prior year; organic sales were up 3%, with currency a 2% tailwind and M&C adding 1%. GAAP gross margin was 49.5%, up 290 basis points year over year and 210 basis points sequentially; GAAP operating margin was 22.2%, and adjusted operating margin was 24.1%, up 270 basis points from last year. GAAP net income rose 37% to $86 million, diluted EPS rose 40% to $2.23, and adjusted EPS was $2.40, up 24%. Free cash flow was $83 million, or 96% of earnings, and cash returned to shareholders totaled $47 million in the quarter. For 2026, MSA reiterated low-double-digit total revenue growth, supported by mid-single-digit organic growth, a mid-single-digit acquisition contribution, and 1 to 2 points of favorable FX. Full-year adjusted gross margin is expected to be 47.5% to 48.5% excluding any new tariffs, and interest expense is expected to be $40 million to $43 million.

Steve Blanco emphasized execution across MSA’s Accelerate strategy, citing strong organic orders, broad-based growth in industrial PPE, and continued adoption of the H2 safety helmet and MSA+ connected solutions. He said the company is seeing early success from the newly launched ALTAIR io 6, with MSA+ now at 14% of total portable sales versus 10% last year. His tone on fire service was cautious but improving: AFG orders were slower than expected, yet June and July order momentum gave him confidence that demand should strengthen in the second half and into 2026.

Julie Beck highlighted the quarter’s financial leverage, with sales of $503 million, GAAP gross margin of 49.5%, adjusted operating margin of 24.1%, and adjusted EPS of $2.40. She noted the margin benefit from the business system, pricing, productivity, FX, and about $4 million of tariff refunds, which lifted gross margin by roughly 100 basis points. On cash and capital allocation, she said free cash flow was $83 million, liquidity was $1.2 billion, pro forma liquidity after Autronica was $600 million, and net debt leverage was 0.8x before the acquisition and 1.8x pro forma after it. She added that buybacks will continue in the second half, but at a lower rate as debt repayment becomes the priority.

Analysts focused on the timing of AFG-related fire orders, with management saying orders came slower than expected but accelerated in June and July, and that FEMA is signaling a desire to speed up 2026 deliveries. Questions also centered on ALTAIR io 6 and MSA+ adoption; management said customer feedback has been “super positive,” order pace has been better than expected, and the platform should keep growing. Other topics included the Middle East impact on fixed detection, which management said reduced first-half revenue by north of 1.5 points, electronics supply/cost inflation, and M&A capacity, where management reiterated a 1.5x to 2.5x leverage sweet spot but said it would go above that for the right deal.