Q2 2025 MSA Safety Inc Earnings Call

Conference Operator: Good day, and welcome to the MSA Safety Second Quarter 2025 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Larry DiMaria. Please go ahead.

Good day and welcome to the MSA safety. Second quarter 2025 earnings conference call.

All participants will be in listen-only mode.

Should you need assistance please signal a conference specialist by pressing the star key followed by zero.

After today's presentation, there will be an opportunity to ask questions.

to ask a question, you may press star then 1 on your telephone keypad,

To withdraw your question, please press star, then 2.

Please note this event is being recorded.

Larry DiMaria: Thank you. Good morning and welcome to MSA Safety's Second Quarter 2025 Earnings Conference Call. This is Larry DiMaria, Executive Director of Investor Relations. I'm joined by Steve Blanco, President and CEO, Elise Brody, Interim CFO, and Stephanie Shulo, President of our America segment. During today's call, we will discuss MSA's second quarter financial results and provide an update on our full year 2025 outlook. Before we begin, I'd like to remind everyone that the matters discussed during this call may include forward-looking statements within the meaning of the Private Securities Obligation Reform Act of 1995. Forward-looking statements include, but are not limited to, all projections and anticipated levels of future performance. Forward-looking statements involve a number of risks, uncertainties, and other factors that may cause their actual results to differ materially from those discussed today. These risks, uncertainties, and other factors are detailed in our SEC filings.

I would now like to turn the conference over to Larry de Maria. Please go ahead. Thank you. Good morning and welcome to. MSA safeties, second quarter, 2025 earnings conference call. This is Larry de Maria executive director of investor relations. I'm joined by Steve Blanco president CEO, Elise Brody, interim, CFO, and Stephanie, schullo president of America. Segment. During today's call, we will discuss msa's second quarter Financial results and provide an update on our full year 2025 Outlook.

Before we begin, I'd like to remind everyone that the matters to discuss during this call may include forward-looking statements within the meeting of the private security litigation Reform, Act of 1995.

Forward-looking statements include but are not limited to all projections and anticipated levels of future performance.

Larry DiMaria: MSA Safety undertakes no duty to publicly update any forward-looking statements made on this call except as required by law. We've included certain non-GAAP financial measures as part of our discussion this morning. The non-GAAP reconciliations are available in the appendix of today's presentation. The presentation and press release are available at our Investor Relations website at investors.msasafety.com. Moving on to today's agenda, Steve will provide an update on the business. Elise will then review our second quarter financial performance and 2025 outlook. Steve will then provide closing remarks and open the call for your questions. With that, I'll turn the call over to Steve Blanco. Steve.

Forward-looking statements involve a number of risks, uncertainties and other factors that may cause their actual results to differ material from those discussed. Today, these risks are uncertainties and other factors are detailed and are SEC filings.

MSA safety undertakes. No duty to publicly update. Any forward-looking statements made on this call. Except as required by law.

We've included certain non-gaap Financial measures as part of our discussion. This morning, the non-gaap reconciliations are available in the appendix of today's presentation.

The presentation and press release are available at our inventory relations website at investors. MSA safety.com.

moving on to today's agenda see you, we'll provide an update on the business at least we'll then review our second quarter financial performance and 2025 Outlook

Steve Blanco: Thanks, Larry, and good morning, everyone. Thank you for your continued interest in MSA Safety. I'm on slide four. In the second quarter, consolidated reported sales growth was 3%, or flat organic, and adjusted earnings per share were $1.93. Our team continued to execute well in a dynamic environment. Financial results for the second quarter exceeded our original expectations. This was primarily due to the better-than-expected backlog conversion in fire service and detection. The MNC Tech Group acquisition contributed $11 million to reported sales for the quarter. Operating margins declined compared to last year due to gross margin pressures, primarily from transactional foreign currency headwinds and inflation. We also saw the impacts of lower organic volume, as well as the early impacts of tariffs on input costs. These pressures were partially offset by pricing and improved productivity. Overall demand was stable and varied across our product categories.

Steve will then provide closing remarks and open the call for your questions with that. I'll turn the call over to Steve Blanco. Steve.

Thanks Larry and good morning everyone. Thank you for your continued interest in. MSA safety, I'm on slide 4 in the second quarter Consolidated. Reported sales growth was 3% or flat organic and adjusted earnings per share were 1.93.

Our team continued to execute, well in a dynamic environment.

Financial results for the second quarter, exceeded our original expectations. This was primarily due then better than expected backlog conversion in fire service and detection. The MNC Tech group acquisition contributed 11 million to reported sales for the quarter.

Operating margins declined compared to last year due to gross margin pressures primarily from transactional foreign currency, headwinds and inflation.

We also saw the impacts of lower organic volume, as well as the early impacts of tariffs on input costs. These pressures were partially offset by pricing and improved productivity.

Steve Blanco: A decline in fire service was offset by growth in detection and industrial PPE. Sequentially, the backlog declined more than expected in the second quarter, though it remains within normalized levels. Consistent with seasonal patterns, our book-to-bill was slightly below one. Moving to our product categories, detection's mid-single-digit organic growth was driven by expansion in both fixed and portable gas detection. Despite a challenging year-over-year comparison, detection grew 6% organically on top of high single-digit growth in 2024. Organic sales in fire service declined mid-single digits year over year. We were pleased to ship several large orders from our backlog and get product into the hands of our customers, notably the Orange County Fire Department order. Domestically, market dynamics surrounding the NFPA standard change began to impact order pace towards the end of the quarter.

Overall demand was stable and varied across our product categories. A decline in fire service was offset by growth and detection and Industrial. PPE sequentially, the backlog of declined, more than expected in the second quarter though, it remains within normalized levels.

Consistent with seasonal patterns, our book, the bill, was slightly below 1.

Moving to our product categories, detections mid single digit. Organic growth was driven by expansion in both fixed and portable gas detection.

Despite a challenging year-over-year comparison detection grew 6%. Organically on top of high single-digit growth in 2024

Organic sales and fire service declined. Mid single digits year-over-year.

Steve Blanco: As we discussed in the past, NFPA standard years often carry short-term volatility as customers evaluate when to renew their fleets. The pipeline of business opportunities remains intact. It's a matter of customer timing. As a reminder, we continue to expect the NFPA standard to promulgate sometime later this year or early next. We've managed through approval cycles before and successfully navigated similar market dynamics. I am confident we will continue to be well prepared to serve our customers in the fire service. Industrial PPE organic sales were down low single digits as contractions in head protection and ballistic helmets offset strength in fall protection. We've invested in fall protection as part of our accelerated strategy to capitalize on the strong market growth, and it's encouraging to see double-digit growth in this area in the second quarter, which remains one of the fastest growing areas of the safety market.

We were pleased to ship several large orders from our backlog and get product into the hands of our customers notably. The Orange County Fire Department order domestically market dynamics surrounding the NFPA standard change began to impact order Pace towards the end of the quarter.

As we've discussed in the past NFPA, standard years, often carry short-term volatility as customers evaluate, when to renew their fleets.

It's a matter of customer timing.

As a reminder, we continue to expect the NFPA standard to promulgate sometime later this year or early next,

We managed through approval Cycles before and successfully navigated similar market dynamics. I am confident, we will continue to be well, prepared to serve our customers in the fire service.

Industrial PPE organic sales were down low. Single digits as contractions and had protection and Ballistic helmets offset strength in fall protection.

Steve Blanco: Turning to slide five, as we move through the year, we continue to utilize the principles of the MSA business system and lean into our accelerated strategy actions to drive long-term value creation. Let me highlight a few strategic actions and commercial successes in the quarter before I delve deeper into our capital allocation progress and strategy on the next slide. First, we continue to expand our leadership in industrial safety technology while making a positive impact. I'm proud to share that we recently published our annual impact report for 2024. You can see some report highlights in the appendix on slide 15. I want to draw your attention to the call out of 40 million workers protected, which we reaffirmed with this report. This demonstrates our scale and commitment to our mission.

We've invested in fall protection as part of our accelerate strategy to capitalize on a strong market growth and it's encouraging to see double-digit growth in this area in the second quarter, which remains 1 of the fastest growing areas of the safety Market.

Turning the slide 5.

As we move through the year, we continue to utilize the principles of the MSA business system and lean into our accelerate strategy actions to drive long-term value creation. Let me highlight a few strategic actions and Commercial successes in the quarter. Before I delve deeper into our Capital, allocation progress and strategy on the next slide.

First, we continue to expand our leadership in industrial safety technology. While making a positive impact.

I'm proud to share that. We recently published our annual impact report for 2024

You can see some report highlights in the appendix on slide 15.

I want to draw your attention to the callout of 40 million workers protected.

Which we reaffirmed with this report, this demonstrates our scale and commitment to our mission.

Steve Blanco: Second, on the operational side, we implemented targeted price increases in the second quarter and continued to build our pipeline of tariff mitigation and productivity actions. We plan to take further actions in the second half based on the tariff developments. Third, strong commercial and operating performance enabled us to fulfill some customer needs ahead of schedule, leading to similar levels of backlog conversion as last year. I'm also pleased to see our strategies in detection and fall protection yielding results. Turning to slide six, now that we are more than a year removed from our 2024 Investor Day, I'd like to update you on our recent actions regarding capital deployment and the investments we're making for our future. As you know, we have a disciplined, growth-oriented approach to capital allocation that focuses on organic growth, M&A, and cash returns to shareholders through dividends and share repurchases.

Second, on the operational side, we implemented targeted price increases in the second quarter and continued to build our pipeline of tariff mitigation and productivity actions.

We plan to take further actions in the second half based on the Tariff developments.

Third strong commercial, and operating performance enable us to fulfill some customer needs ahead of schedule leading to similar. Similar levels of backlog conversion as last year.

I'm also pleased to see our strategies and detection and fall protection. Yielding results.

Turning to slide 6 now that we are more than a year removed from our 2024 investor day. I'd like to update you on our recent actions regarding Capital deployment and the investment Investments, we're making for our future.

As you know, we have a disciplined growth-oriented approach to Capital allocation that focuses on organic growth.

Steve Blanco: Fundamentally, we continue investing in our business and people to achieve profitable organic growth. Our R&D investments support new product development and contribute to our mid-30s product vitality index. This proven R&D engine focuses on delivering market-leading innovation to our customers in the industrial safety technology markets we serve. Here are two examples of this engine yielding results. First, we've seen exponential growth in our connected portables business, and for the past couple of quarters, over half of our absolute growth in portables has come from our MSA Plus solutions driven by the Altair IO4. Second, we've been very intentional with our lean into fall protection. Our recent launches of the VTEC and VSHOC platforms are performing well in the market and have been major catalysts for our double-digit growth in the area.

M&A and cash returns to shareholders through dividends and share repurchases, fundamentally. We continue investing in our business and people to achieve profitable organic growth.

Our R&D Investments support new product development and contribute to our mid-30s product Vitality index.

This proven R&D engine focuses on delivering market-leading Innovation through our customers in the industrial safety technology markets, we serve

here are 2 examples of this engine yielding results.

First we've seen exponential growth in our connected Portables business and for the past couple of quarters over half of our absolute growth in Portables has come from our MSA plus Solutions driven by The Altar io4.

Second. We've been very intentional with our lean into fall protection. Our recent launches of the VTech and vaak platforms are performing. Well in the market, and have been major Catalyst for our double digit growth in the area.

Steve Blanco: During the second quarter, we also strategically invested in our future at Cranberry Township, Pennsylvania, which is home to our Detection Manufacturing Center of Excellence and our largest R&D center. This footprint investment supports our accelerated strategy by enabling us to scale our R&D efforts effectively and provide flexibility on additional manufacturing expansion over time. It also aligns with our plan to foster a more collaborative, in-person workforce and keeps us well positioned to attract and retain top talent. On the inorganic front, I'm excited to welcome MNC Tech Group to the MSA family. MNC is a German-based manufacturer of gas analysis solutions and technologies that enhance our fixed gas offerings. Their technology complements our fixed gas detection business and expands our TAM by 500 million. The team's doing a great job engaging for our collective success, and we're on track with our integration plans.

During the second quarter, we also strategically invested in our future at Cranberry Township Pennsylvania which is home to our detection manufacturing center of excellence and our largest R&D Center.

This footprint investment supports, our accelerate strategy by enabling us to scale our R&D efforts effectively and provide flexibility on additional manufacturing expansion over time.

It also aligns with our plan to foster a more collaborative, in-person Workforce and keeps us well positioned to attract and retain top talent.

On the inorganic front, I'm excited to welcome. MNC Tech group to the MSA family, MNC is a german-based manufacturer of gas analysis, Solutions and technologies that enhance our fixed gas offerings.

Steve Blanco: Slide 14 in the appendix provides more details on the transaction. We maintain an active pipeline of potential strategic targets focused on high growth and differentiated product categories. We continue to build out our capabilities to enable a more consistent M&A flywheel. Finally, we also return cash to shareholders. For the 55th consecutive year, we increased our annual dividend. We also repurchased 30 million of stock this quarter and 40 million year to date. Increased share repurchases were enabled by our strong balance sheet, expected cash flow generation, and having our net leverage remain below our target range following the acquisition of MNC. I'll reiterate what I said at last year's Investor Day. You can count on us to be responsible stewards of capital, focused on allocating effectively to create value for our stakeholders, all focused on advancing our mission of safety.

Their technology, complements our fixed gas detection business and expands our Tam by 500 million. The teams doing a great job, engaging for our Collective success and we're on track with our integration plans.

Slide 14 in the appendix provides more details on the transaction.

We maintain an active pipeline of potential. Strategic targets focused on high growth and differentiated products product categories.

Finally, we also returned cash to shareholders for the 55th consecutive year, we increased our annual dividend. We also repurchased 30 million of stock, this quarter and 40 million year to date.

Increased share repurchases were enabled by our strong balance sheet, expected cash flow generation, and having our net leverage remain below our target range following the acquisition of MNC.

Steve Blanco: I'd like to now turn the call over to Elise to discuss our financial performance in the second quarter. Elise.

A reiterate what I said at last year's investor day, you can count on us to be responsible, stewards of capital focused on allocating, effectively to create value for our stakeholders all focused on advancing our mission of safety.

I would now like to turn the call over to Elise to discuss our financial performance in the second quarter.

Elise Brody: Thank you, Steve, and good morning, everyone. We appreciate you joining the call. Let's start on slide seven with the quarterly financial highlights. Second quarter sales were 474 million, an increase of 3% on a reported basis, or flat organic over the prior year. Revenue was supported by stronger backlog conversion. MNC added 2% to overall growth, and currency translation was less than a 1% tailwind based on the strengthening euro. As expected, gross margins continued to be pressured in the quarter at 46.6%, down 170 basis points from last year. Gross margins primarily reflect transactional FX and inflation headwinds, and to a lesser degree, volume and the early impacts of tariffs, which were partially offset by price and improved productivity. We will start to see the tariff impact become more pronounced in the second half, coinciding with our mitigating pricing actions.

Thank you, Steve, and good morning everyone. We appreciate you joining the call. Let's start on slide 7 with the quarterly financial highlights.

Second quarter sales or 474 million. An increase of 3% on a reported basis or flat organic over the prior year Revenue was supported by stronger backlog conversion, MNC added 2% to overall, growth and currency translation was less than a 1% Tailwind based on the strengthening Euro.

As expected gross margins continue to be pressured in the quarter at 46.6% down 170 basis points from last year.

Gross margins, primarily reflect transactional, FX and inflation headwinds and to a lesser degree volume and the early impacts of tariffs which were partially offset by price and improved productivity.

Elise Brody: We expect FX pressure on gross margins to continue in the second half due to Latin American currencies. GAAP operating margin was 18.1%, with an adjusted operating margin of 21.4%, down 200 basis points from a year ago due to the contraction in gross margins. We are diligently focused on controlling the controllables through SG&A productivity, pricing, and tariff mitigation plans to counter the pressure on raw material costs. While operating margins were pressured compared to 2024, the longer-term trend is indicative of the operational and commercial capabilities that we've built through the MSA business system deployment and customer-led innovation. Compared to 2019, first half operating margins are up 300 basis points. Quarterly GAAP net income totaled 63 million, or $1.59 per diluted share. On an adjusted basis, diluted earnings per share were $1.93, down 4% from last year, and includes 3 cents of accretion from MNC.

We will start to see the Tariff impact, become more pronounced in the second half, coinciding with our mitigation actions.

We expect FX pressure on Gross margins, to continue in the second half due to Latin American currencies.

Gap. Operating margin was 18.1% with adjusted operating margin of 21.4% down 200 basis points from a year ago, due to the contraction in Gross margins.

We are diligently focused on controlling the controllables through sgna productivity pricing, and tariff. Mitigation plans to counter the pressure on raw material costs.

While operating margins were pressured compared to 2024. The longer term trend is indicative of the operational and Commercial capabilities that we've built through the MSA business system, deployment and customer-led Innovation. Compared to 2019 first half operating margins are up 300 basis points.

Quarterly, gaap, net income totaled, 63 million.

Or 1.59 cents per diluted share.

Elise Brody: Now I'd like to review our segment performance. In our America segment, sales increased 2% year over year on a reported and organic basis, as double-digit growth in detection was offset by a mid-single-digit contraction in fire service and a low single-digit contraction in industrial PPE. Currency translation was a 1% headwind in the quarter. Adjusted operating margin was 29.1%, down 220 basis points year over year. Margin contraction was mainly due to inflation, transactional FX headwinds in Latin America, and tariffs, partially offset by price and improved productivity. In our international segment, sales increased 4% year over year on a reported basis with a contribution of MNC and tailwind from FX, and decreased 4% on an organic basis, on a mid-single-digit decline in fire service and low single-digit declines in detection and industrial PPE.

On an adjusted basis, diluted earnings per share or a193 down 4% from last year and includes 3 cents of accretion from M and C.

Now, I'd like to review our segment performance.

In our America, segment sales increased 2% year-over-year on a reported and organic basis. As double digit growth in detection was offset by a mid single digit contraction in fire service and a low single digit contraction in industrial PPE.

Currency translation was a 1% headwind in the quarter.

Adjusted. Operating margin was 29.1% down, 220 basis, points year-over-year.

In contraction was mainly due to inflation transactional FX, headwinds, and Latin, America, and tariffs.

Partially offset by price and improved productivity.

Elise Brody: Adjusted operating margin was 13.1%, 330 basis points below last year due to lower organic volume and inflation, partially offset by price and improved productivity. Now turning to slide eight, free cash flow was 38 million, or 60% of earnings. Quarterly operating cash flow increased more than 25% from a year ago, which provided support to fund the footprint investment that Steve highlighted. As far as CapEx, we'd expect the second half to return to a more normalized range following the strategic investment that we made in the second quarter. Year to date, free cash flow is 89 million, up 10 million from last year. As Steve highlighted earlier, we took additional steps to deploy capital in the second quarter in line with our accelerated strategy. These growth investments demonstrate our confidence in the future, as well as our dedication to a disciplined M&A approach and returning cash to shareholders.

In our International segment sales increased 4% year-over-year on a reported basis with the contribution of MNC and Tailwind from FX and decreased 4% on an organic basis. On a mid single digit decline in fire service and low single digit declines in detection and Industrial PPE.

Adjusted operating margin was 13.1% 330 basis. Points below last year, due to lower organic, volume and inflation. Partially offset by price and improved productivity.

Now, turning to slide 8.

Free cash flow was 38 million or 60% of earnings.

Quarterly operating cash flow increased more than 25% from a year ago, which provided support to fund the footprint investment that Steve highlighted.

As far as capex, we'd expect the second half to return to a more normalized range, following the Strategic investment that we made in the second quarter.

Year to date. Free cash flow is 89 million.

Of 10 million from last year.

Elise Brody: Specifically, we paid 188 million net of cash acquired for MNC, invested 29 million in CapEx, and returned more than 50 million to shareholders through stock repurchases and dividends. Net debt at the end of the quarter was 532 million compared to 331 million in the first quarter. The increase is primarily due to the acquisition. We were able to utilize cash on hand and a mix of euro and USD denominated borrowings from our newly upsized revolver to fund the transaction. We ended the quarter with net leverage of 1.1 times. Our balance sheet continues to position us well to invest in our business, and we maintain an active M&A pipeline. Let's turn to our 2025 outlook on slide nine. We maintain our low single-digit full-year organic growth outlook and have had a solid start in 2025 with first half organic sales up 2%.

These growth Investments, demonstrate our confidence in the future, as well as our dedication to a disciplined m&a approach and returning cash to shareholders.

specifically, we paid 188 million, net of cash acquired for MNC invested, 29 million in capex, and returned, more than 50 million to shareholders through stock repurchases, and dividends

Net debt. At the end of the quarter was 532 million compared to 331 million in the first quarter. The increase is primarily due to the acquisition.

We were able to utilize cash on hand and a mix of Euro and USD denominated borrowings from our newly upsized revolver to fund the transaction.

We ended the quarter with net leverage of 1.1 times.

Our balance sheet continues to position us. Well to invest in our business and we maintain an active m&a pipeline.

Let's turn to our 2025 outlook on slide 9.

Elise Brody: While the business remains healthy, there are some dynamics to watch. We're encouraged by the continued robust performance in detection and momentum in fall protection. In contrast, fire service execution in the second half will be predicated on the timing of the NFPA approval and AFG funding release. Additionally, industrial head protection demand has generally been soft due to weaker market conditions. In addition to our low single-digit organic growth outlook, we'd expect MNC to add approximately two points to full-year revenue growth and be approximately 10 cents accretive to adjusted EPS. We retain our confidence in the resilience of our business and ability to navigate macro uncertainty. For modeling purposes, our revenue expectations for the full year are unchanged outside of the MNC contribution and more favorable FX translation impact of 0 to 1% tailwind.

We maintain our low single digit full year. Organic growth Outlook and have had a solid start in 2025 with first half organic sales up 2%.

While the business remains healthy, there are some Dynamics to watch.

We're encouraged by the continued robust, performance and detection, and momentum, in fall protection, in contrast, fire service execution. In the second half will be predicated on the timing of the NFPA approval and afg funding release.

Additionally industrial head protection. Demand has generally been soft due to weaker market conditions.

In addition to our low single digit organic growth Outlook, we'd expect MNC to add a proximately 2 points to full year Revenue growth and be approximately 10 cents a creative to adjusted eps.

We retain our confidence in the resilience of our business and ability to navigate macro uncertainty.

Elise Brody: Though we realized a bit more sales in the first half based on first quarter order acceleration and second quarter backlog execution, we expect interest expense to be approximately 29 to 32 million, which includes the acquisition. With that, I'll now turn the call back to Steve.

For modeling purposes, our Revenue expectations for the full year are unchanged outside of the MNC contribution and more favorable FX translation impact of 0 to 1% Tailwind.

Though we realize a bit more sales in the first half. Based on first quarter order acceleration and second quarter, backlog execution.

We expect interest expense to be approximately 29 to 32 million, which includes the acquisition.

With that on now, turn the call back to Steve.

Steve Blanco: Thanks, Elise. I'm on slide 10. To close, I'm proud of our team's execution and thank all of our associates for their continued commitment to serving our mission and advancing our accelerated strategy in the second quarter. With that, I'll turn the call back to the operator for Q&A.

Thanks Elise. I'm on slide. 10 to close. I'm proud of our teams, execution and thank all of our Associates for their continued commitment, to serving our mission and advancing our accelerate strategy in the second quarter with that. I'll turn the call back to the operator for Q&A.

Conference Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. Our first question is from Ross Sperembleck with William Blair. Please go ahead.

We will now begin the question and answer session.

to ask a question, you may press star then 1 on your telephone keypad,

If you are using a speaker-phone, please pick up your handset before pressing the keys.

To withdraw your question. Please. Press star. Then 2

At this time, we will pause momentarily to assemble our roster.

Our first question is from Ross, sparm with William Blair. Please go ahead.

Jeff Van Sinderen: Hey, good morning. This is Sam Parlovan from Ross. Thanks for taking my questions.

Steve Blanco: Morning, Sam.

Hey, good morning. This is Sam Carla vanter, Ross. Thanks for taking my questions morning Sam.

Jeff Van Sinderen: I want to start with detection. Can you break out and quantify the growth between fixed gas, non-connected portables, and connected portables in the quarter, and then maybe provide some color on the adoption of the MSA Plus software platform between new and existing customers?

Uh, I want to start with detection. Can you break out and quantify the growth between fixed gas, non-connected, Portables and connected Portables in the quarter and then maybe provide some color on the adoption of the MSA plus software platform between new and existing customers.

Steve Blanco: Sure, I'll be glad to. Thanks for the question. So if you look at detection overall, it was another strong quarter for us. You know, we talked about a little bit in the first quarter we expected this to continue in throughout the year, and it really leans into our accelerated strategy. And Q2 really was led by fixed and the MSA Plus connected portables activity. So the fixed strength just continues in most regions. I would say the energy has been strong from a fixed side. Our diversity in the portfolio was really good. You think of the traditional fixed we've had and the renewables, the clean energy continues to play well in fixed. And then our backrack business with the HVACR. So that diversity has helped that fixed business continue to perform really well. And now we've added to it, as you know, with MNC.

Sure, I'll be glad to thanks for the question. So so if you look at detection overall it was another strong quarter for us. You know we talked about a little bit in the first quarter. We expected this to continue in throughout the year and it really leans into our accelerate strategy.

And Q2 really was led by fixed and the MSA plus connected portable of activity. So the fixed strength

Steve Blanco: So we're really excited and optimistic about fixed continuing to play well going forward. The MSA Plus connected story, gosh, we really appreciate what the customers have come back with on this and how they've embraced this technology. We had great growth here, another strong quarter. And when we parse out total portables to your question, most of the growth in the second quarter, absolute growth in a dollar, you know, absolute dollar category was on MSA Plus. So it really played well. And the customer base continues to lean in on this. So we expect that to continue in the second half, certainly. Portables, the traditional portables was up, but very mildly. So most of the growth we saw in that portable space was MSA Plus to your question.

Just continues in most regions. I would say the energy has been strong from a. From a fixed side are diversity in the portfolio, is really good. You think of uh, the traditional fix we've had and Renewables the clean energy continues to play well and fixed, and then our, uh, back Rack business with the HVAC R. So that diversity, has helped that fixed business continue to, uh, perform really well. And now we've added to it as, you know, with m, m, m and C. So we're really excited and optimistic about fixed continuing to to play well going forward. The MSA plus connected story. Um,

The growth in the second quarter, absolute growth in a dollar, uh, you know, absolute dollar category was on MSA plus, so it really played well. Uh and the customer base continues to lean in on this. So we expect that to continue in the second half, certainly Portables, the traditional Portables was up but very mildly. So most of the growth we saw in that, uh, portable space was MSA plus to your question,

Jeff Van Sinderen: Got it. That's super helpful. And then keeping on the topic of portable gas detection, is there anything you can share on the timing of the launch of IO6 and any color on what this could mean for the portable gas detection business?

Got it, that's super helpful. Uh, and then keeping on the topic of portable gas detection, is there anything you can share on the timing of the launch of io6 and any color on what this could mean for the portable gas detection business?

Steve Blanco: Well, you know, we've got a number of R&D activities ongoing and some upcoming launches. And certainly, the MSA Plus, the connected work is one that we hope to talk to in the not-too-distant future. I would add that even as we've had this IO4, we've had a number of iterations even inside that technology. So while you don't hear of a different IO4 recently, that technology has refined itself over the last 12 months significantly. So it's a different product today than it was 12 months ago. But going forward, I would say you'll see some announcements probably in the next few months.

Well, you know, we've got, uh, we've got a number of R&D, uh, activities on ongoing and some upcoming launches and certainly, the MSA plus the, the connected work is 1, that that we hope to talk to in the, not too distant future. I would add that even as we've had this io4. We've had a number of, uh, iterations even inside that technology. So while you don't hear of a different io4 recently that technology has refined itself over the last 12 months significantly. So it's a different product today than it was 12 months ago. Uh, but going forward, I would say you'll see some some announcements probably in the next few months.

Jeff Van Sinderen: Got it. I'll look out for those. I will leave it there. Thanks, guys.

Steve Blanco: Thank you.

Got it. I'll look out for those. Uh I will leave it there. Thanks guys.

Thank you.

Conference Operator: The next question is from Sari Boroditsky with Jeffries. Please go ahead.

The next question is from SI Boyz with Jeffrey's. Please go ahead.

Sari Boroditsky: Good morning. This is James from Forseri. Thanks for taking questions.

Jeff Van Sinderen: Morning, James.

Uh, good morning. Uh, this is James on, for Siri, thanks for taking questions.

Sari Boroditsky: So, yeah, I wanted to start with the pricing actions that you guys talked about. So how have customers responded to those increases and what was the magnitude of the pricing actions? And like, could you kind of elaborate on how the price-cost dynamic kind of played out and your expectation for the second half?

Morning James. So yeah. I I wanted to start with the pricing actions that you, you guys talked about. So how have like customers responded to those increases and what was the magnitude of the pricing actions? And like, could you kind of elaborate on how the price cost Dynamic kind of played out in your expectation for a second half?

Steve Blanco: Yeah, I'll talk about the customer a little bit, and then I'll ask Elise to talk about the numbers and quantify this a bit, James. But you know, one of the things we said, and I said this in the first quarter, is when we think about this, we're really trying to look at how we minimize the impact for our customers and for MSA. So this is a combination of efficiencies as well as price. So we did take action, though, in, you know, earlier in the year in the first half for some targeted price increases, which we can parse out here in a bit. But we're also going to take further action in the second half. You know, we've got a little more clarity on the tariffs. They are impacting certainly the cost inputs we have.

Yeah, I'll talk about the customer, uh, a little bit. And then I'll ask at least to talk about the numbers and quantify this a bit, uh, James. But, you know, 1 of the things we we said, and I said this in the first quarter is, when we think about this. We're really trying to look at how we minimize the impact for our customers. And for MSA, so this is a combination of efficiencies, as well as price. Uh, so we did take action though, in, in, you know, earlier in the year, in the first half,

Steve Blanco: And so we need to go back and get more pricing in place to ensure that we're well prepared for the future. And as I said before, I would just add all of this will probably shake out where we will be in a good position sometime in early '26 from a cost-price balance for tariffs. But it's got to shake out through the rest of the year. The customer, you know, how they've accepted it. Remember, we had a few years ago, we had a lot of inflation. So the customers, you know, absorbed that. And then this certainly is playing to that. My concern isn't that the customer accepts it or not. It's really what it does to demand over the longer period of time.

For some targeted price increases, which we can parse out here in a bit. But we're also going to take further action in the second half. You know, we've got a little more clarity on the tariffs. They are impacting uh certainly the cost inputs we have. And so we need to go back and and get more pricing in uh in place to ensure that we're well prepared for the future. And as I said before, I would just add all of this will probably shake out.

Where we will be in a good position sometime in early 26 from a cost price balance for tariffs, uh, but it's got to shake out through the rest of the year. The customer, um, you know how they've accepted it.

Steve Blanco: And right now, our expectations are we're going to raise price effectively to manage the cost inputs as we're, you know, we would expect our competitors to do the same. But maybe Elise, you can parse out the numbers.

Elise Brody: Thanks, Steve. Good morning, James. Gross margins came in right about where we expected in the second quarter. Price added a couple of points to revenue growth in the second quarter. Though we saw the impacts of inflation and transactional FX headwinds continue from the first quarter, and we were able to partially offset with price and improved productivity. We also saw some early impacts from tariffs and the impact of lower organic volume. So as we move into the second half, we'd expect that tariff impact to ramp up as it works through the backlog. And that's why we took the mitigating pricing actions that we did in the second quarter. We've talked before about a gross margin range for our business currently in the 47 to 48% range, and we are still on track for that this year.

The remember we had a few years ago, we had a lot of inflation, so the customers, you know, absorb that and then this certainly is is playing to that. My concern isn't that the customer accepts it or not. It's really what it does to demand over the longer period of time. Uh and right now our expectations are we're going to raise price effectively to manage the cost in inputs as we're we're you know, we would expect our competitors to do the same but maybe a lease you can parse out the numbers.

Um, to, to revenue growth in the second quarter. So we saw the impacts of inflation and transactional FX headwinds continue from the first quarter and we were able to partially offset with with price and improved productivity. We also saw some early impacts from tariffs and the impact of lower organic volume. So as we move into the second half, we'd expect that tariff impact to ramp up as it works through the backlog. And that's why we took the mitigating pricing actions that we did in the second quarter, we've talked before about a growth margin range for our business currently in the 47 to 4.

Elise Brody: And as Steve mentioned, we're looking at additional actions both on the pricing and productivity front for the second half that we think will put us in a good position early 2026.

48 % range and we are still on track for that this year. And as Steve mentioned, we're looking at additional actions both on the pricing and productivity front for the second half that we think will put us in a good position early 2027.

Sari Boroditsky: Got it. Great. Thanks for the caller. And I guess now I kind of want to touch on the fire services. So I just want to get a better understanding, like what percentage of your current pipeline consists of customers committed to purchasing before the new standard versus those kind of waiting? I think you guys mentioned that G1 SCBA XR edition kind of led customer buy before the standard. So I just want to understand that dynamic better. Thank you.

Got it. Great. Thanks for the caller. And I I guess now I I I kind of want to touch on the fire services so I just want to get a better understanding like what percentage of your like

Steve Blanco: Yeah, thanks for the question. Again, we don't disclose actual percentages of what the customers say for a couple of reasons, but one of the most critical is competitive reasons and how competitors respond to that in the market. I would say that we do have line of sight to what the customers have told us. Now, they have the prerogative to change their mind and select one or the other. But that's the reason we went and did the redesign on the XR prior to the new standard coming out and make sure we're prepared for that. So we have that available today. And we do expect many fire departments to take advantage of it. And we also, for those that do wait, we have the next-gen XR ready once it's approved.

Standard versus like those kind of waiting that I think you guys mentioned that G1 SCBA xer Edition kind of let customer buy before the standard. So I just want to understand the dynamic better. Thank you.

Steve Blanco: So I think in both cases, we're well prepared based on what the dynamics play out for the fire departments and how they want to look at this. You know, I would say either way, we feel like we're well positioned here in the fire service. Those that have followed us for a while, you know the quarter to quarter can be a little lumpy. And that's something that just comes with this market. But pipeline is solid. You know, we expect our strategy to continue to pay off. And by the way, the Orange County order, I think, is a great example of that, as that was a follow-on to some really nice orders we had with LA County and LA City. So the strategy that we have in place, we feel good about.

Yeah, thanks for the question again. We we don't, uh, disclose actual percentages of of what the customers say for a couple reasons, but 1 of the most critical is competitive reasons uh, and how competitors respond to that in the market. I would say that we do have line of sight to what the customers have told us. Um, now they have the prerogative to change their mind and and Select 1 of the other. But that's the reason we went and, uh, did the redesign on the XR prior to the new standard coming out and make sure we're prepared for that. So we have that available today. Uh and we do expect many fire departments to take advantage of it and we also for those to do wait we have the NextGen XR ready once it's approved. So I think in both cases, we're well prepared based on what the Dynamics uh, play out for the fire departments and how they want to how they want to look at this. You know, I I would say either way, we feel like we're well positioned here in the fire service. Those that have fought

followed us for a while, you know, the quarter to quarter can be a little lumpy and uh that's something that just comes with this Market but

Steve Blanco: I think you'll see a little variability perhaps in the second half, depending on what some of the timing categories are with NFPA and AFG. But pipeline's good. So once that funding's available, once the standard clarity is there, we should be in great shape.

Pipeline is solid. You know, we expect our strategy to continue to pay off by the way, the Orange County order. I think is a great example of that as that was a follow on to some really nice orders. We had with LA county and LA City. So the strategy that we have in place, we feel good about uh I think you'll see some a little variability perhaps in the second half depending on what some of the timing um you know categories are with NFPA and afg but uh pipeline's good. So once that funding is available, once the standard Clarity is there, we should be in great shape.

Sari Boroditsky: Great. Thanks for taking questions. I will leave it there.

Great. Thanks for taking questions. I will leave it there.

Conference Operator: The next question is from Shabansur of Asava with RW Baird. Please go ahead.

The next question is from Shaban sirva with RW beard. Please go ahead.

Jeff Van Sinderen: Hey, good morning, guys. Thanks for the question. Just curious as to how you're thinking about timing and disbursement of AFG funding. You mentioned it before with fire service. Just looking, it doesn't look like those awards have started rolling out yet. So just kind of wondering, you know, any ideas to how the funding environment has changed?

Steve Blanco: Yeah, thanks for the question. The funding's approved. So that's the important first point I would add to the color here. We expect the AFG funding releases to begin here in August. They haven't yet, but the expectation we have is that they'll come through sometime in August. They have to have those done by the end of September. So typically, the sooner they can get started on that, get some of those tranches out to the customer base, I think that helps. But the funding's approved. Fire departments are just waiting for its release.

Hey, good morning guys, thanks for the. Thanks for the question. Uh, just curious as to how you're thinking about uh, like timing and dispersement of afg funding, you mentioned it before the fire service. Um, just looking. It doesn't look like those Awards have started rolling out yet. So just kind of wondering, you know, any ideas to how the fun funding environment has changed.

Yeah, thanks for the question. The funding's approved. Uh, so that's the important. First point I would add, uh, to the color. Here, we expect the afg funding releases to begin here in August. They haven't yet. But the expectation we have is that, they'll they'll come through sometime in August. They have to have those done by the end of September.

So typically uh the sooner they're going to get started on that, get some of those tranches out to the customer base. I think that helps but the funding's approved fire departments are just waiting for its release.

Jeff Van Sinderen: Got it. Got it. And then one more. Just how do you guys feel about the fourth quarter seasonality? Is it being influenced by lack of SCBA shipments or detection backlog conversion? You know.

Got it, got it. And then uh 1 more. Uh, just how do you guys feel about this fourth quarter seasonality? Um, is it the influenced by lack of SCBA shipments or detection? Backlog conversion.

Steve Blanco: Typically, our fourth quarter is a strong quarter for us. I don't think that's going to be any different in 2025. So we would expect that to be the case. It typically is a strong quarter in the fire service. It's typically strong in detection. And I would say that you could expect that for 2025 as well.

You know, typically our fourth quarter is a strong quarter for us. Um I don't think that's going to be any different in 2025.

So, we, we would expect that to be the case. It typically is a strong quarter in the fire service. It's typically strong in detection. Uh, and I would say that you could expect that for 2025, as well.

Jeff Van Sinderen: Perfect. Great. I'll hand it back.

Perfect, great. I'll hand it back.

Conference Operator: Again, if you have a question, please press star, then one. The next question is from Brian Brophy with Stifel. Please go ahead.

again, if you have a question, please press star then 1

The next question is from Brian Brophy with stifel, please go ahead.

Brian Brophy: Yeah, thanks. Good morning, everybody. Appreciate you taking the question. Hey, good morning. I think in the opening comments, you mentioned book-to-bill was slightly below one in the quarter. Can you touch on some of the areas where you're seeing relative strength versus some softness in the order book? Thanks.

Steve Blanco: Yeah, thanks for the question, Brian. I would, you know, I would look at from an order pace. Industrial and our detection business orders were up in the quarter. Fire service was down, and that really matched our expectations. And it kind of matches the market. You heard in our prepared remarks some commentary around some of the different product categories. Industrial markets right now are challenged. There's some that are, you know, bright spots. Utilities is a good example. I think some of the early in North American infrastructure investment is good. And there's others like manufacturing and, to some degree, non-resi construction that are softer. So it's choppy, but we see our diversity in the portfolio really playing out here and helping us do really well.

Yeah, thanks. Good morning, everybody. Appreciate you taking the question. Um, hey, good morning. Uh, I think in the opening comments, you mentioned booked a bill was slightly below 1 in the quarter. Can you can you touch on some of the areas where you're seeing relative strength versus some softness in the order book? Thanks?

Steve Blanco: So that, you know, the product categories, markets, and geographies help us perform throughout the cycle, and that's playing out in 2025 for sure. I would also say that, you know, we talked about the accelerated strategy, the two key categories that we expected to grow more significantly this year, especially with the comps in fire service, our detection and fall protection, and that's playing out exactly as we had planned and hoped. So a big part of that is share change as well. So we're gaining some nice share in detection. We're gaining nice share in fall protection. And I think that helps us out in this dynamic we're playing in right now.

You know, the product categories markets and geographies help us perform throughout the cycle and that's playing out in 2025, for sure. I would also say that

You know, we talked about the accelerate strategy, the 2 key key categories that we expected to grow more significant significantly this year, especially with the comps and fire service, our detection and fall protection. And that's playing out exactly as we had planned and hoped.

Uh, so a big part of that.

Is share, uh, change as well. So we're gaining some nice share, and detection, we're gaining nice. Sharon fall protection and I think that helps us out in this uh Dynamic we're playing in right now.

Brian Brophy: Yeah, that's helpful. I guess just following up on that, you just mentioned, you know, relative strength in fall protection. You mentioned that in some of your comments as well. Just any more color on what's driving this? Is this some of the new product introductions and how you're thinking about growth there in the back half?

Yeah, that's helpful. I guess you're just following up on that. Um you you just mentioned, you know, relative strength and fall protection. You mentioned that um in some of your comments as well. Just any more color on what's driving. This is this some of the new product introductions and how you're thinking about growth there in the back half.

Steve Blanco: Yeah, it is. I think, you know, when we think fall protection, we went through a period where we had some nice growth specific to North America with some strategy we had a few years ago. We stumbled, frankly, coming out of COVID with some supply chain issues. And then we've done a lot of innovation in this space, which I referenced in the prepared remarks. Now we've got a really nice inventory position with our channel, with the customers. We're leaning into markets that the customers really have a high level of interest for our solutions. And this is a segment we think we can really compete in very effectively. We're resourcing it appropriately. And it is a combination of what we've done commercially, as well as the innovation we put in place. And we do expect this to continue in the second half and beyond.

Uh yeah, it is I I think, you know, when we think fall protection, we went through a period where we had some nice growth specific to North America with some strategy. We had a few years ago, we stumbled frankly uh coming out of Co with some supply chain issues. Uh and then we've done a lot of innovation in this space which which I referenced in the prepared remarks. Now, we've got a really nice inventory position with our Channel with the customers. We're leaning into markets that the customers really have

Have a high level of interest for our Solutions. And this this is a segment we think we can really compete in very effectively. Uh we're we're resourcing it appropriately and it is a combination of of what we've done commercially as well as the Innovation we put in place and we do expect this to continue in the second half and Beyond.

Brian Brophy: Thanks. I'll pass it on.

Thanks, I'll pass it on.

Steve Blanco: Thanks, Brian.

Conference Operator: The next question is from Jeff VanSynderen with B-Rally Securities. Please go ahead.

Thanks Brian.

The next question is from Jeff. Vans with B rally Securities. Please go ahead.

Jeff Van Sinderen: Good morning, everyone. Just wanted to circle back to fire for a minute if we could. What are the overall elements of timing that you're watching around the new standard? Just wondering, are there milestones that you say, "Gee, okay, this has happened now. You know, we think it's going to be three months from now that it really ramps"? Or just wondering about that, how you think about that.

Uh, good morning everyone. Um, just wanted to Circle back to the fire to fire for a minute. If we could

What are the overall elements of timing that you're watching? Around the new standard just wondering, are there Milestones that you? You say, gee? Okay, this is happened. Now, you know, we think it's going to be 3 months from now that really ramps or just wondering on about that. How you think about that?

Steve Blanco: Well, it's a thanks for the question. The NFPA standard change, it's a government approval process. So there's a couple of key milestones we look at. First of all, when is testing completed? Right? And once testing is completed, that certainly is a milestone that we can validate, okay, they've got the next key stage that you will walk through the process. But to be fair, we know when our testing's completed, we don't necessarily get complete visibility on some of the other categories for competitive situations or any of the discussions they may have. You know, there's some discussions that they would be privy to them and NFPA. But by and large, when you see the testing completed and you recognize that you've got what you need, this body, the NFPA, will go through a process where they'll need to validate the approvals.

Well it's a uh thanks for the question. It the NFPA standard change, its a, you know, a government approval process.

So, we we there's a couple of key milestones. We look at first of all, when it's testing completed, right? And, and once testing is completed, uh, that certainly is a milestone that we can validate, okay? They've got the next

Steve Blanco: Then they'll have to get all the documentation done. And that takes some time with the government. So that's why we don't have a specific line of sight, but based on historical context, it tells us that we would expect that approval. It could be anytime between now and the, you know, early 2026, which we kind of talked about. I think I did a call in May as well. And we continue to believe that. I don't have much better clarity than that. We tried to put a finer point before, and we've missed it because it is the NFPA, and they've got some processes they have to work through, quite frankly.

Key Stage that, uh, you will walk through the process. But to be fair, we know when our testing is completed, we don't necessarily get complete visibility on some of the other categories for competitive situations or any of the discussions. They may have uh, in, you know, there there's some discussions that they they would be, that would be privy to them and NFPA. But by and large, when you see the, the testing completed and you recognize that you've got what you need this body, the NFPA will go through a process where they'll need to validate the approvals. Then they'll have to get all the documentation done um and that takes some time with the government. Uh, so that's why we don't have specific line of sight. But based on historical context, it tells us that we would expect that approval. It could be any time between now and the you know, early 2026.

Which we kind of talked about, I think, uh, I did a a call in uh, in may as well.

And and we continue to believe that I don't have much better Clarity than that. We try to put a finer point before and we've missed it because it is the NFPA and they've got the processes. They have to work through quite frankly.

Jeff Van Sinderen: Okay. And just as a follow-up to that, there's nothing that makes you think that with DOGE or anything else that it would be different this time versus other times as far as the timing?

Steve Blanco: Not now. I think, you know, I think they've been put back to work, and they're fully engaged.

Okay. And just as a follow-up to that, there's nothing that makes you think that with Doge or anything else that it would be different this time versus other times as far as the timing

not now I think uh, you know, I think they've they've

Been put back to work, uh, in their fully engaged.

Jeff Van Sinderen: Okay. Good to know. And then possible maybe to touch a little bit more, delve a little bit more into the margin benefit from MSA Plus since that seems to be working really well for you.

Okay, good to know. Um and then

impossible maybe to touch a little bit more. Delve a little bit more into the margin benefits from MSA plus since that seems to be working really well for you.

Elise Brody: Sure. Thanks for the question, Jeff. We did see a positive impact from from MIX in the quarter from MSA Plus and the other detection growth. It wasn't overly meaningful, but it certainly does help a bit.

Jeff Van Sinderen: Okay. And then anything else? I know these are tough questions, but anything else to add on kind of the quarterly progression we should expect for gross margin, given kind of tariffs and, you know, some of the pricing actions you're taking? You know, and then anything around SG&A for the second half? I guess what I'm trying to get at is, is it feasible here based on everything you're seeing for EBITDA to inflect year over year in Q3?

Okay and then anything else? I know this is these are tough questions, but anything else to add on kind of the the quarterly progression. We should expect for gross, margin giving kind of tariffs and um you know, some of the pricing actions you're taking um,

You know, and then anything around sgna per second half?

Um I I guess what I'm trying to get at is, Is it feasible here, based on everything you're seeing for ebita to inflict your overview in Q3?

Elise Brody: Sure, Jeff. So thinking about the quarterly growth margin first, we do expect the tariff impact to be more pronounced in the second half, and that's why we took the pricing actions that we did in the second quarter. So we'll see those both start to come through in the second half. You may see stronger performance as the volume continues to grow. We typically see that when volume is higher, the margin is better leveraged. On SG&A, we don't expect anything out of the ordinary. What you saw in the second quarter on an organic basis is probably a good run rate to think about for the second half. And then, of course, you'll have MNC come in on top of that.

Sure Jeff. So thinking about the quarterly growth margin first. We do expect the Tariff impact to be more pronounced in the second half. And that's why we took the pricing actions that we did in the second quarter. So we'll see those both start to come through in the second half. You may see, um, stronger performance as the volume continues to, to grow. We typically see that when volume is higher, the, the margin, um, is, is better leveraged on sgna? We don't expect anything. Um, out of the ordinary, what you saw in the second quarter on an organic basis, is probably a good run rate to think about for for the second half and then of course you'll have M and C um come in on top of that.

Jeff Van Sinderen: Okay. Great.

Elise Brody: And then we expect something like 5 to 6 million per quarter. So 107 to 109 per quarter is probably a good range to think about.

And that's something like 5 to to 6 million per quarter. So 107 to to 109 per quarter is probably a good range to think about

Jeff Van Sinderen: 5 to 6 million for MNC. And then is there, I don't know if you've talked about this or not, but what is sort of the organic growth rate of MNC?

5 to 6 million for MNC. And then is there, I don't know if you've talked about this or not but what is sort of the organic growth rate Amendment C?

Elise Brody: MNC is a mid-single-digit type of grower.

MNC is is a mid single digit um type of of grower.

Jeff Van Sinderen: Okay. Fair enough. Thanks. I'll take the rest offline.

Elise Brody: Thanks, Jeff.

Okay, fair enough. Um thanks I'll take the rust offline.

Thanks chef.

Conference Operator: The next question is from Mike Schlisky with DA Davidson. Please go ahead.

The next question is from Mike schleske with da Davidson. Please go ahead

Jeff Van Sinderen: Yes. Hello. Thank you. I hopped on a little bit late. Hey there. I hopped on a little bit late, so if I'm asking anything that's been already said, feel free to have me go to the transcript. I guess, I guess first off, MNC Tech Group, I see it's going to be accretive to EPS. I just wanted to see, make sure the business has a stance today. Is it also accretive to margins?

Uh, yes. Hello, thank you. Um, I have a little bit later, hey there. Um, I hopped on a little bit late. So if I'm asking anything that's already said, feel free to

help me go to the transcript. Um,

I guess, I guess. Um,

first of all, MNC Tech group, I see it's going to be a creative Epps. I just wanted to see make sure the business has a status say, is it also a creative to margins?

Elise Brody: Sure, Mike. Thanks for the question. The margins of MNC are relatively similar to overall MSA, so it didn't have an impact on margins in the second quarter, and that's what we'd expect for the remainder of the year. It's really relatively neutral on margins, but we do expect about 10 cents of accretion for the year in EPS.

Thanks for thanks.

The question, the margins of MNC are relatively similar to overall. MSA. So didn't have a an impact on margins in in the second quarter? And that's what we'd expect for the remainder of the year. Really relatively neutral in margins but we do expect about 10 cents of accretion for the year in eps.

Jeff Van Sinderen: Great. And then just following up there, and again, I apologize if you've already said this, but the geographic mix from MNC, do you have that handy? Like, are they mostly Europe? And is there any opportunity to globalize their sales mix and get some synergies that way over the next couple of years?

Great. And then just following up there and again, I apologize if you already said this but um, the geographic mix from MNC. Do you have that handy? Like are they mostly Europe?

Steve Blanco: Yeah, it is Europe. I mean, they're a German-based company with about a third of their sales there. And what we anticipate is over time, we're going to leverage our scale and the channels we have, and the team's very excited by doing that. We think this is a great business in providing premium solutions. So we absolutely expect this to scale over time in some of our other key markets.

Uh, and is there any opportunity to to, to, uh, to globalize their sales mix and get some synergies? That way over the next couple it is Europe? I mean, they're, they're German based company, uh, with about a third of their sales there.

In in our, you know what, we anticipate is over time, we're going to leverage our, our scale and the channels we have and the teams very excited by doing that. We think this is a great business in uh providing premium Solutions. So we absolutely expect this to uh scale over time in some of our, our other key markets.

Jeff Van Sinderen: Okay. Great. I'll leave it there. Thank you so much.

Steve Blanco: Thanks, Mike.

Okay, great. Um, I'll leave it there. Thank you so much.

Elise Brody: Thanks, Mike.

Thanks Mike. Thanks Mike.

Conference Operator: This concludes our question and answer session. I would like to turn the conference back over to Larry DeMaria for any closing remarks.

This concludes our question and answer session, I would like to turn the conference back over to Larry de Maria for any closing remarks.

Larry DiMaria: Thank you. We appreciate you joining the call this morning and for your continued interest in MSA Safety. If you missed a portion of today's call, an audio replay will be made available later today on our Investor Relations website and will be available for the next 90 days. We look forward to updating you on our continued progress again next quarter.

Thank you, we appreciate you joining the call this morning and for your continued interest in. MSA safety, if you missed a portion of today's call and audio replay will be made available later today on an arrest relations website and will be available for the next 90 days. We look forward to updating you on our continued progress, again, next quarter.

Conference Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect