EDGAR 10-K Filing

Company CIK: 66570
Filing Year: 2025
Filename: 66570_10-K_2025_0000066570-25-000007.json

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ITEM 1. BUSINESS
Item 1. Business
Overview-MSA Safety Incorporated (the "Company" or "MSA") is the global leader in advanced safety products, technology and solutions. Driven by its singular mission of safety, the Company has been at the forefront of safety innovation since 1914, protecting workers and facility infrastructure around the world across a broad range of diverse end markets while creating sustainable value for shareholders. The Company's comprehensive product line, which is governed by rigorous safety standards across highly regulated industries, is used to protect workers and facility infrastructures around the world in a broad range of markets, including fire service, energy, utility, construction and industrial manufacturing applications as well as heating, ventilation, air conditioning and refrigeration ("HVAC-R"). The Company's principal product categories are fire service, detection and industrial personal protective equipment ("PPE"). Core products for fire service include self-contained breathing apparatus ("SCBA"), protective apparel and helmets; core products for detection include fixed gas and flame detection ("FGFD") systems and portable gas detection instruments; and core products for industrial PPE include industrial head protection and fall protection devices.
In addition to its principal product categories, MSA continues to deploy and grow its MSA+™ solution, a business approach that combines MSA hardware, software, and services to simplify safety operations for customers and deliver recurring revenue. Examples of MSA+ offerings include MSA Grid and MSA FireGrid - cloud-hosted software platforms that provide situational awareness to customers during hazardous industrial and fire service activities while also streamlining everyday safety compliance and equipment maintenance procedures.
The Company’s leading market positions across various products in our portfolio are supported and enabled by a strong commitment to investing in new product development that continually raises the bar for safety equipment performance, all while upholding an unwavering commitment to integrity. We dedicate significant resources to research and development, which allows us to produce innovative safety products and solutions that are often first to market and usually protected by intellectual property. Our global product development teams include cross-functional associates throughout the Company, including research and development, marketing, sales, operations and quality management. Our engineers and technical associates work closely with the safety industry’s leading standards-setting groups and trade associations to develop industry-specific product standards and to anticipate their impact on our product line.
We leverage the MSA Business System ("MBS") to develop and introduce innovative safety solutions, secure new business opportunities, and operate with greater efficiency. The MBS is our approach to working at our best - at our most efficient and most empowered. It is a combination of behaviors, processes and tools that provide a framework to run the business and continuously improve. We strive to serve our customers and help them solve their safety and compliance challenges while creating value for our shareholders. As part of our differentiated development process, we embed ourselves with our customers to deeply understand their processes, pain points and desired outcomes. Our commitment to MBS has enabled us to drive customer satisfaction and profitable growth while generating significant improvements in operating results.
Segments-We tailor our product and solution offerings and distribution strategy to satisfy distinct customer preferences that vary across geographic regions. To best serve these customer preferences, we have organized our business into four geographic operating segments that are aggregated into three reportable segments: Americas, International and Corporate. Segment information is presented in Note 9-Segment Information of the consolidated financial statements in Part II Item 8 of this Form 10-K.
Because our consolidated financial statements are stated in U.S. dollars and much of our business is conducted outside the U.S., currency fluctuations may affect our results of operations and financial position and may affect the comparability of our results between financial periods.
Products and solutions -We design, manufacture, and sell a comprehensive line of safety products and solutions to protect workers and facility infrastructures around the world. Our products and solutions protect people and critical infrastructure against a wide variety of hazardous or life-threatening situations.
The following is a brief description of each of our product categories:
Core products. MSA's corporate strategy includes a focus on providing customers a number of core products, where we have leading market positions and a distinct competitive advantage. Core products, as mentioned above, include breathing apparatus where SCBA is the principal product, firefighter helmets and protective apparel, FGFD, portable gas detection instruments, industrial head protection products and fall protection devices. Core products comprised approximately 92% and 91% of sales in 2024 and 2023, respectively.
The following is a brief description of our core product offerings within each of our Fire Service, Detection and Industrial PPE portfolios:
Fire Service
Breathing apparatus products. The Company's primary breathing apparatus solution is the SCBA. SCBA are used by first responders, manufacturing and process industry plant workers and others entering an environment deemed immediately dangerous to life and health. The SCBA functions together with various MSA cloud-based software modules and proprietary accessories to create a complete and customizable solution for our customers. Our primary breathing apparatus product in the Americas segment, the MSA G1 SCBA, is a platform that offers many differentiated features. With new hardware and software upgrades always under development, this platform continues to evolve to meet our customers’ needs. The MSA M1 SCBA, which is our primary breathing apparatus product in the International segment, represents the most advanced and ergonomic SCBA we have launched in the International markets. The “M” stands for modular, which is a critical design element that allows this platform to meet the needs of customers around the world. We sell breathing apparatus across both the Americas and International segments.
Firefighter helmets and protective apparel. We offer a complete line of fire helmets that includes our Cairns® and Gallet® helmet brands. Our Cairns helmets are primarily used by firefighters in North America while the Gallet helmets are primarily used by firefighters across our International segment. We recently introduced our Cairns® 1836 Fire Helmet, which includes embedded radio frequency identification (RFID) technology, providing the ability to quickly locate assets, through MSA’s FireGrid Inventory Management software. Globe Holding Company, LLC ("Globe") and B T Q Limited ("Bristol Uniforms"), two of our subsidiaries, are both leading innovators and providers of firefighter protective apparel.
Detection
FGFD systems. Our permanently installed FGFD solutions are used in energy and utility applications, HVAC-R, water and wastewater, food retail and general industrial production facilities to detect the presence or absence of various gases in the air. Typical applications of these systems include the detection of an oxygen deficiency in confined spaces or the presence of combustible or toxic gases as well as detecting leaks of refrigerants. The FGFD product and solution line generates a meaningful portion of overall revenue from recurring business including replacement components and related service. We sell these products and solutions in both our Americas and International segments. Key products and solutions include:
•Fixed gas detection monitoring systems. This product line is used to monitor for combustible and toxic gases and oxygen deficiency in virtually any application where continuous monitoring is required. Our systems are used for gas detection in energy, pulp and paper, wastewater, refrigerant monitoring, pharmaceutical production and general industrial applications. Some of our flagship products include the Ultima®X5000 and S5000 gas monitors, which enhance facility and worker safety while lowering overall cost of ownership for our customers through differentiated sensor technology. These systems utilize a wide array of sensor technologies including electrochemical, catalytic, infrared and ultrasonic.
•Flame detectors and open-path infrared gas detectors. These instruments are used for plant-wide monitoring of toxic gases and for detecting the presence of flames. These systems use infrared optics to detect potentially hazardous conditions across long distances, making them suitable for use in applications such as processing industries, storage vessels and HVAC ducts.
•Refrigerant detection and identification. Our refrigerant leak detection monitors, such as the MSA Bacharach® Multi-Zone Gas Monitor and the MSA Chillgard® 5000 Refrigerant Leak Monitor, help identify and mitigate refrigerant leaks. Users can enhance their leak detection and mitigation efforts by utilizing MSA+ solutions, like the MSA Parasense Refrigerant Tracking and Compliance software and the MSA Parasense Enterprise Leak Detection software. These solutions provide users with real-time monitoring and alerts.
Portable gas detection instruments. Our handheld portable gas detection instruments are used to detect the presence or absence of various gases in the air. The product line is used by energy, utility, general industrial workers as well as first responders or anyone working in a confined space environment. Typical applications of these instruments include the detection of an oxygen deficiency in confined spaces or the presence of combustible or toxic gases. Our single- and multi-gas detectors provide portable solutions for detecting the presence of oxygen, combustible gases and various toxic gases, including hydrogen sulfide, carbon monoxide, ammonia and chlorine, either singularly or up to six gases at once. Our ALTAIR® 2X, ALTAIR 4XR and ALTAIR 5X Multigas Detectors, with our internally developed XCell® sensor technology, provide faster response times and unsurpassed durability. Our newest multigas detector, the ALTAIR® io™ 4, is a portable gas detection wearable designed with fully integrated connectivity for real-time visibility across worksites. We sell portable gas detection instruments in both our Americas and International segments.
Industrial PPE and Other
Industrial head protection. We offer a complete line of industrial head protection and accessories that includes the iconic V-Gard® helmet brand, a bellwether product in MSA's portfolio for over 50 years. We offer customers a wide range of color choices for V-Gard helmets, and we are a leader in the application of customized logos. Our V-Gard H2™ safety helmet incorporates the latest technology to help protect against lateral impacts. The optional Mips® brain protection system for industrial safety helmets adds another layer of protection designed to help reduce the risk of brain trauma. Our industrial head protection products have a wide user base, including energy, utility, non-residential construction and industrial workers.
Fall protection. Our broad line of fall protection equipment includes harnesses, lanyards, self-retracting lifelines, engineered systems and confined space equipment. Fall protection equipment is used by workers in the construction, energy, utilities and aerospace industries as well as general industrial applications and anyone working from height in both our Americas and International segments. MSA’s V-Series® fall protection equipment has transformed the Company’s harness and self-retracting lanyard portfolio, with over 50 fall protection products launched over the past several years. Additionally, our V-TEC® io1 self-retracting lifeline has a patented smart hook connector that uses radio-frequency identification (RFID) technology to alert wearers when they are not secured to an anchorage point.
Non-core products. MSA maintains a portfolio of non-core products. Non-core products reinforce and extend the core offerings, drawing upon our customer relationships, distribution channels, geographical presence and technical experience. These products are complementary to the core offerings and sometimes reflect more episodic or contract-driven growth patterns. Key non-core products include air-purifying respirators, eye and face protection, ballistic helmets and gas masks.
Customers-Our customers generally fall into two categories: distributors and end-user customers. In our Americas segment, the majority of our sales are made through distribution. In our International segment, sales are made through both indirect and direct sales channels. For the year ended December 31, 2024, no individual customer represented more than 10% of our sales.
Sales and Distribution-Our sales and distribution team consists of marketing, field sales and customer service organizations. In most geographic areas, our field sales organizations work jointly with select distributors to call on end-users and educate them about hazards, exposure limits, safety requirements and product applications, as well as the specific performance attributes of our products. We believe that understanding end-user requirements is critical to increasing MSA's market share.
The in-depth customer training and education provided by our sales associates to our customers is critical to ensuring proper use of many of our products, such as SCBA and detection instruments. As a result of our sales and marketing associates working closely with end-users, they gain valuable insight into customer preferences and needs. To better serve our customers and to ensure that our sales and marketing associates are among the most knowledgeable and professional in the industry, we place significant emphasis on training our sales associates in product application, industry standards and regulations.
We believe our sales and distribution strategy allows us to deliver a customer value proposition that differentiates our products and solutions from those of our competitors, resulting in increased customer loyalty and demand.
In areas where we use indirect selling, we promote, distribute and service our products to general industry through authorized national, regional and local distributors. We distribute fire service products primarily through specially trained local and regional distributors who provide advanced training and service capabilities to volunteer and paid municipal fire departments. Because of our broad and diverse product line and our desire to reach as many markets and market segments as possible, we have over 2,100 authorized distributor locations worldwide.
Competition-The global safety products and solutions market is broad and highly fragmented with few participants offering a comprehensive line of safety products and solutions. The sophisticated safety products market in which we compete is comprised of both core and non-core offerings and is a subset of the larger safety market. We maintain leading positions across various products in our portfolio. Over the long-term, we believe global demand for safety products and solutions will continue to grow. Purchases of these products and solutions are non-discretionary, protecting workers' health and critical infrastructure in hazardous and life-threatening work environments. Their use is often mandated by government and industry regulations, which are increasingly enforced on a global basis.
The safety products and solutions market is highly competitive, with participants ranging in size from small companies focusing on a single type of PPE to several large multinational corporations that manufacture and supply many types of sophisticated safety products and solutions. Our main competitors vary by region and product. We believe that participants in this industry compete primarily on the basis of product characteristics (such as functional performance, technology, cost of ownership, comfort, design and style), brand name recognition and after-market service support.
We believe we compete favorably within each of our operating segments as a result of our high quality, innovative offerings and strong brand trust and recognition.
Research and Development-To achieve and maintain our market leading positions, we operate several sophisticated research and development facilities. We believe our dedication and commitment to innovation and research and development allows us to produce state-of-the-art safety products and solutions that are often first to market and exceed industry standards. Our primary engineering groups are located in the United States, Germany, France, China and South Africa. Our global product development teams include cross-geographic and cross-functional members from various areas throughout the Company, including research and development, marketing, sales, operations and quality management. These teams are responsible for setting product line strategies based on their understanding of customers' needs and available technology, as well as the opportunities and challenges they foresee in each product area. We believe our team-based, cross-geographical and cross-functional approach to new product development is a source of competitive advantage. Our approach to the new product development process allows us to tailor our product offerings and product line strategies to satisfy distinct customer preferences and industry regulations that vary across our operating segments.
We believe another important aspect of our approach to new product development is that our engineers and technical associates work closely with the safety industry’s leading standards-setting groups and trade associations. These organizations include the National Institute for Occupational Safety and Health ("NIOSH"), the National Fire Protection Association ("NFPA"), American National Standards Institute ("ANSI"), International Safety Equipment Association ("ISEA") and their overseas counterparts. Key members of our management team understand the impact that these standard-setting organizations have on our new product development pipeline. As such, management devotes significant time and attention to anticipating a new standard's impact on our sales and operating results. Because of our understanding of customer needs, membership on global standards-setting bodies, investment in research and development and our unique new product development process, we believe we are well positioned to anticipate and adapt to changing product standards. While the length of the approval process can be unpredictable, we believe that we are well positioned to gain the approvals and certifications necessary to meet new government and multinational product regulations.
Patents and Intellectual Property-We own significant intellectual property, including a number of domestic and foreign patents, patent applications and trademarks related to our products, processes and business. Although our intellectual property plays an important role in maintaining our competitive position in a number of markets that we serve, no single patent, or patent application, trademark or license is, in our opinion, of such value to us that our business would be materially affected by the expiration or termination thereof, other than the “MSA” trademark. Our patents expire at various times in the future not exceeding 20 years. Our general policy is to apply for patents on an ongoing basis in the United States and other countries, as appropriate, to perfect our patent development. In addition to our patents, we have also developed or acquired a substantial body of manufacturing know-how that we believe provides a significant competitive advantage over our competitors.
Raw Materials and Suppliers-Many of the components of our products are formulated, machined, tooled or molded in-house and by select tier one supplier partners. Material costs comprise approximately two-thirds of our cost of sales. For example, we rely on integrated manufacturing capabilities for breathing apparatus, gas masks, ballistic helmets, hard hats and circuit boards. The primary materials that we source from third parties include electronic components, high density polyethylene, chemical filter media, rubber and plastic components, eye and face protective lenses, air cylinders, certain metals and ballistic resistant, flame resistant and non-ballistic fabrics. We purchase these materials both domestically and internationally, and we work to ensure our supply sources are both well established and reliable. Demand for certain industrial-based electronic components is gradually aligning with supply. For key components, lead times are improving, and market conditions are showing signs of stabilization across the industry. We continue to effectively navigate these supply chain issues, as we have close supplier relationship programs with our key raw material distributors and strategic supplier partners. Although we do not have long-term supply contracts with all suppliers, we have engaged in formal supply agreements with select strategic supplier partners. We work to establish long term agreements with all key partners to ensure a robust supply pipeline and have not experienced any significant problems in obtaining adequate raw materials.
Please refer to MSA's Form SD filed on May 24, 2024, for further information on our conflict minerals analysis. Form SD may be obtained free of charge at www.sec.gov.
Human Capital-As of December 31, 2024, the Company employed approximately 5,200 people worldwide, of which approximately 2,300 were employed in the United States and 2,900 were employed outside of the United States. Approximately 20% of our global workforce is covered by collective bargaining agreements or works councils. Overall, we consider our employee relations to be good. Our culture is important to our success. To that end, we maintain seven core values that define our culture. They are Integrity, Customer Focus, Diversity and Inclusion, Innovation and Change, Engagement, Teamwork and Speed and Agility. Our core values are encircled by “A Culture of Safety.”
Workplace Health & Safety-As a company whose mission is dedicated to worker safety, MSA places great emphasis on the health and safety of our own associates. The Company maintains a global Environmental, Health and Safety Management System, deploys a variety of programs to reduce and eliminate injuries and promote safety and regularly measures the progress of those programs. These programs promote personal responsibility for workplace safety and encourage associates to set a meaningful example as safety ambassadors.
Employee Health and Well-Being-To support mental health and emotional well-being, all associates and their dependents worldwide have access to an Employee Assistance Program, at no cost to them. This includes access to visits with mental health care providers through the program.
Diversity and Inclusion-Diversity and Inclusion is a Core Value at MSA, and the Company seeks a wide variety of thoughts, perspectives, experiences and ideas. MSA strives to provide an inclusive work environment, paired with a culture of excellence in which associates feel comfortable openly sharing thoughts and ideas. Creating an inclusive environment helps to recruit and retain talent, promoting engagement, fostering innovation, and achieving MSA’s business objectives. MSA also partners with a number of non-profit and community-based organizations to help to build a pipeline of future talent with differing backgrounds, thoughts, experiences, and perspectives.
Approximately 55% of our U.S. workforce self-identifies as diverse. This includes women who comprise approximately 40% of our U.S. workforce. We determine race and gender diversity based on our employees’ self-identification or other information compiled to meet the requirements of the U.S. government, compiled as of December 31, 2024. We count a diverse woman as one individual for purposes of the calculating the aforementioned statistics.
Leadership and Development-MSA provides programs to enable continuous learning, growth and development opportunities.
First, our "MOVE" (Meaningful, Ongoing, Vital Exchanges) Performance Management philosophy is a core element of associate engagement. Exchanges between associates and supervisors provide a flexible, ongoing feedback loop to drive and enhance the engagement of associates, while facilitating the achievement of our strategic goals.
Second, the MSA Leader model sets the expectations of MSA people leaders. Grounded in core principles that define MSA’s high performance culture of excellence, the MSA Leader model guides the development of current and aspiring leaders. It outlines the traits, knowledge, competencies, and experiences that MSA requires for successful leadership while encouraging leaders to remain true to their personal styles. The model is the foundation of leadership development at MSA. By combining leadership development, culture, and business acumen, leaders are better prepared to drive a high-performance culture while maintaining an engaged workforce with opportunities for development and growth.
Beyond these core programs, MSA designs and delivers a variety of associate leadership and development programs to further enhance the associate experience and opportunities for growth. Associates are empowered to own their career development through business-aligned resources, tools and programs.
Compensation and Rewards-MSA’s global compensation philosophy strives to provide total compensation for all associates at the market median, utilizing base salary, cash incentives and, in some cases, equity grants to achieve this goal. We further strive to provide above-market compensation opportunities for associates who exceed goals and expectations. This approach to total rewards is designed to help MSA attract, retain and motivate high-performing individuals who foster an innovative culture and drive business results.
Environmental Matters-Our facilities and operations are subject to laws and regulations relating to environmental protection and human health and safety. In the opinion of management, compliance with current environmental protection laws will not have a material adverse effect on our financial condition. See Item 1A - Risk Factors, for further information regarding our environmental risks which could impact the Company.
Seasonality-Our operating results are not significantly affected by seasonal factors. During periods of economic expansion or contraction and following significant catastrophes, our sales by quarter have varied. Government-related sales tend to increase in the fourth quarter. Americas segment sales tend to be strong during the energy sector's turnaround seasons late in the first quarter, early in the second quarter and then again at the end of the third quarter and beginning of the fourth quarter. International segment sales are typically weaker for the Europe region in the summer holiday months of July and August and seasonality can be affected by the timing of delivery of larger orders. Invoicing and the delivery of larger orders can affect sales patterns variably across all reportable segments.
Available Information-Our Internet address is www.MSAsafety.com. We make the following filings available free of charge on the Investor Relations page on our website as soon as they have been electronically filed with or furnished to the Securities and Exchange Commission ("SEC"): our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as well as our proxy statement. Information contained on our website is not part of this annual report on Form 10-K or our other filings with the SEC. The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers like us who file electronically with the SEC.

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors
RISKS RELATED TO LEGAL AND REGULATORY CHALLENGES
Claims of injuries or potential safety issues or quality concerns could be made against our various subsidiaries.
Our products and solutions are often used in high-risk and unpredictable environments and our mission, reputation and business success rely on our ability to design and provide safe, high quality and reliable products that earn and maintain customer trust. In the event that those using our products and solutions are injured, or if any of our products or solutions are alleged to have contributed, we could be subject to claims or suffer reputational harm. In addition, we may be required to or may voluntarily recall, redesign, or update certain products, components, or solutions due to concern about product safety, quality, ease of use or customer confidence. We continue to review, update, and execute the Company's quality management processes appropriately to meet changing market demands, technology, and product standards. Any significant claims, recalls or field actions that result in significant expense or negative publicity against us could have a material adverse effect on our business, operating results, financial condition and liquidity, including any successful claim brought against us in excess or outside of available insurance coverage.
Our subsidiaries may experience losses from product liability claims, which could have a material adverse effect on our business, operating results, financial condition and liquidity.
Our subsidiaries face an inherent business risk of exposure to product liability or other legal claims or penalties related to the design, manufacture, marketing, or sale of any of our current or former products and solutions. Our subsidiaries are named periodically in single incident lawsuits, or, at times, in cumulative trauma product liability lawsuits which may be numerous, and the number of claims newly asserted in any given period is difficult to predict and may aggregate or escalate suddenly. Any type of product injury claim may result in losses in excess of limits or beyond the coverage afforded by available insurance and have a material adverse effect on our business, reputation, operating results, financial condition and liquidity.
On January 5, 2023, the Company divested Mine Safety Appliances Company, LLC ("MSA LLC"), a wholly owned subsidiary that holds legacy product liability claims relating to coal dust, asbestos, silica, and other exposures to a joint venture between R&Q Insurance Holdings Ltd. and Obra Capital, Inc. (the "Purchaser"). The transaction is subject to risks related to counterparty commercial risk as well as agreement enforcement and interpretation. Third parties also could seek to assert claims against us for which MSA LLC is the legally responsible party, and we may be required to incur fees and expenses to enforce that wrongly asserted claims are properly redirected to MSA LLC. The divested subsidiary MSA LLC and the Purchaser each have agreed to indemnify us with respect to MSA LLC’s cumulative trauma product liability losses and other defined exposures. The ability of MSA LLC and the Purchaser to honor their indemnity obligations is subject to commercial risk and, in addition, in the event of a dispute, the transaction, negotiated indemnities, and the extent of other legally available protections may be subject to future judicial interpretation. MSA and its remaining subsidiaries continue to be responsible for claims relating to any current or former products and solutions that were not transferred as part of the divestiture.
Our ability to market and sell our products and solutions is subject to existing government laws, regulations and standards. Changes in such laws, regulations and standards or our failure to comply with them could materially and adversely affect our results of operations.
Most of our products are required to meet performance and test standards designed to protect the safety of people and infrastructures around the world, and many of our products and solutions are required to comply with other various laws and regulations in the applicable markets where sold. Our inability to comply with these standards and regulations could result in declines in revenue, profitability and cash flow. Changes in laws, regulations, or the standards themselves, including changes resulting from the outcome of federal, national, state or provincial elections, could reduce the demand for our products or require us to re-engineer our products, thereby creating opportunities for our competitors. Regulatory approvals for our products may be delayed or denied for a variety of reasons that are outside of our control. Additionally, market anticipation of significant new standards can cause customers to accelerate or delay buying decisions.
We are subject to various federal, state and local laws and regulations across our global organization and any violation of these laws or regulations could adversely affect our results of operations.
We are subject to numerous, and sometimes conflicting, laws and regulations on matters as diverse as anti-corruption, import/export controls, product content requirements, trade restrictions, tariffs, taxation, sanctions, internal and disclosure control obligations, securities regulation, anti-competition, data privacy and security, and labor relations, among others. This includes laws and regulations in emerging markets where legal systems may be less developed or familiar to us. Compliance with diverse legal requirements is costly, time-consuming and requires significant resources, and in some cases may require us to obtain relevant information from our vendors and suppliers, which may be difficult to obtain in a timely manner or at all. In addition, if we are required to transition away from components made with regulated materials, we could incur substantial costs to identify and transition to alternative components or product designs, or where feasible alternatives are not readily available. Violations of one or more of these laws or regulations in the conduct of our business could result in significant fines, criminal prosecution or sanctions and/or civil penalties or civil litigation against us or our officers or other personnel, prohibitions on doing business and damage to our reputation. These actions could result in liability for significant monetary damages, unfavorable publicity and other reputational damage and have a material adverse effect on our business, consolidated results of operations and financial condition.
We are subject to various environmental laws and any violation of these laws could adversely affect our results of operations.
Included in the extensive laws, regulations and ordinances to which we are subject, are those relating to the protection of the environment. Examples include those governing discharges to water, discharges to air (including greenhouse gas emissions), handling and disposal practices for solid and hazardous wastes and the maintenance of a safe workplace. These laws impose penalties for noncompliance and liability for response costs and certain damages resulting from past and current spills, disposals, other releases of hazardous materials and other noncompliance with such laws. These environmental laws may continue to change in the future due to a variety of factors, such as government focus on climate change. We could incur substantial costs as a result of noncompliance with or liability for cleanup pursuant to these environmental laws which could have a material adverse effect on our business, consolidated results of operations and financial condition. Such laws continue to change, and we may be subject to more stringent environmental laws in the future. If more stringent environmental laws are enacted, these future laws could have a material adverse effect on our business, consolidated results of operations and financial condition.
We are subject to risks related to our environmental, social and governance activities and disclosures.
Environmental social and governance, often referred to as ESG, has continued to be an area of focus from investors, customers, employees, and lawmakers, who at times may have competing, inconsistent, or varying interests. ESG-related regulations at both state and national levels are requiring heightened attention, including climate-related disclosures. As reporting and disclosure requirements continue to evolve, the Company anticipates increasing investor expectations and additional regulatory requirements, among other demands related to our ESG activities. Failure to accurately and timely meet these expectations and requirements may result in reputational damage, regulatory penalties and litigation among other consequences.
We are subject to various U.S. and foreign tax laws and any changes in these laws related to the taxation of businesses and resolutions of tax disputes could adversely affect our results of operations.
The U.S. Congress, the Organization for Economic Co-operation and Development ("OECD") and other government agencies in jurisdictions in which we and our affiliates invest or do business have maintained a focus on issues related to the taxation of multinational companies. The OECD has changed numerous long-standing tax principles through its base erosion and profit shifting project which could adversely impact our effective tax rate.
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 consolidated financial statements, which could have a material adverse effect on our consolidated results of operations, financial condition and cash flows.
RISKS RELATED TO SUPPLY AND MANUFACTURING
Our future results are subject to the risk that purchased components and materials are unavailable or available at excessive cost due to material shortages, tariff changes, excessive demand, currency fluctuation, inflationary pressure and other factors.
We depend on various components, materials and services from supply chain partners to manufacture our products. It is possible that any of our supplier relationships could be terminated or otherwise disrupted, or that our suppliers may be unable to timely deliver quality components, materials or services to us. Any sustained interruption in our receipt of adequate supplies or services could have a material adverse effect on our business, results of operations and financial condition. Our inability to successfully manage price fluctuations or delays due to market demand, currency risks or material shortages, or future price fluctuations (whether due to inflationary pressures, tariffs or otherwise) could have a material adverse effect on our business and our consolidated results of operations and financial condition.
Our plans to continue to improve productivity and reduce complexity may not be successful, which could adversely affect our ability to compete.
MSA periodically evaluates the efficiency of our business, which may result in changes to the way that we operate. For example, MSA has integrated parts of its European operating segment that have historically been individually managed entities, into a centrally managed organization model. We plan to continue to leverage the benefits of scale created from this approach and are in the process of implementing a more efficient and cost-effective enterprise resource planning system in additional locations across the International Segment. MSA runs the risk that these and similar initiatives may not be completed substantially as planned, may be more costly to implement than expected, or may not result in the efficiencies or cost savings anticipated. In addition, if not properly managed, these initiatives could cause disruptions in our day-to-day operations and have a negative impact on MSA's financial results. It is also possible that other major productivity and streamlining programs may be required in the future.
We are subject to risks related to various U.S. and foreign climate regulations and any changes in these regulations related to climate disclosure and penalties for non-compliance could adversely affect our results of operations.
The issue of climate variability is receiving increasing attention nationally and worldwide. Some scientific experts are predicting a worsening of weather volatility in the future associated with climate variability. Climate changes that have significant physical effects, such as increased frequency and severity of storms, floods, wildfires, droughts and other climatic events, could have an adverse effect on our supply chain, our business and our consolidated results of operations and financial condition.
Moreover, our operations (and the operations of many of our key suppliers) emit greenhouse gases directly. Restrictions on emissions of methane or carbon dioxide that may be imposed could adversely impact the demand for, price of and value of our products and reserves. For example, current and future laws or regulations limiting such emissions could increase our own costs. As the legal and regulatory environment continues to evolve, it is not possible to accurately estimate how potential future laws or regulations addressing greenhouse gas emissions would impact our business.
RISKS RELATED TO ECONOMIC, MARKET AND COMPETITIVE CONDITIONS
Unfavorable economic and market conditions could materially and adversely affect our business, results of operations and financial condition.
We are subject to risks arising from adverse changes in global economic conditions. We have significant operations in a number of countries outside the U.S., including some in emerging markets. Long-term economic uncertainty in some of the regions of the world in which we operate, such as Asia, Latin America, the Middle East and Europe, could result in declines in revenue, profitability and cash flow due to reduced orders, payment delays, supply chain disruptions or other factors caused by the economic challenges faced by our customers, suppliers, and other business partners.
A portion of MSA's sales are made to customers in the energy market. It is possible that volatility in the energy market, whether related to economic, climate-related energy policy, geopolitical tensions or events, or other conditions, could negatively impact our business and could result in declines in our consolidated results of operations and cash flow.
Pandemics or disease outbreaks may cause unfavorable economic or market conditions which could impact demand patterns and/or disrupt global supply chains and manufacturing operations. Collectively, these outcomes could materially and adversely affect our business, results of operations and financial condition.
Pandemics or disease outbreaks could result in a widespread health crisis that could adversely affect the economies of developed and emerging markets, potentially resulting in an economic downturn that could affect customers’ demand for our products and solutions in certain industrial-based end markets. The spread of pandemics or disease outbreaks may also disrupt the Company’s manufacturing operations, supply chain, or logistics necessary to import, export and deliver products and solutions to our customers. During a pandemic or crisis, applicable laws and response directives such as vaccine mandates or occupational safety and health requirements, could, in some circumstances, result in skilled labor impacts including voluntary attrition or difficulty finding labor, or otherwise adversely affect our ability to operate our plants, obtain inputs from suppliers, or to deliver our products in a timely manner. Some laws and directives may also hinder our ability to move certain products across borders. Economic conditions can also influence order patterns. These factors could negatively impact our consolidated results of operations and cash flow.
A reduction in the spending patterns of government customers or delays in obtaining government approval for our products and solutions could materially and adversely affect our net sales, earnings and cash flow.
The demand for our products and solutions sold to the fire service market, the homeland security market and other government customers is, in large part, driven by available government funding. Government budgets are set annually, and we cannot assure that government funding will be sustained at similar levels in the future. A significant reduction in available government funding could result in declines in our consolidated results of operations and cash flow.
The markets in which we operate are highly competitive, and some of our competitors have greater financial and other resources than we do. The competitive pressures faced by us could materially and adversely affect our business, results of operations and financial condition.
The safety products and solutions market is highly competitive, with participants ranging in size from small companies focusing on single types of safety products, to large multinational corporations that manufacture and supply many types of safety products and solutions. Our main competitors vary by region and product. We believe that participants in this industry compete primarily on the basis of product characteristics (such as functional performance, technology, cost of ownership, comfort, design and style), price, service and delivery, integrated solutions, customer support, the ability to meet the special requirements of customers, brand name trust and recognition, purchasing options, and e-business capabilities. Some of our competitors have greater financial and other resources than we do, and our business could be adversely affected by competitors’ new product innovations, technological advances made to competing products and solutions and pricing changes made by us in response to competition from existing or new competitors. We may not be able to compete successfully against current and future competitors, and the competitive pressures faced by us could have a material adverse effect our business, consolidated results of operations and financial condition. In addition, e-commerce is a rapidly developing area, and the execution of a successful e-business strategy involves significant time, investment and resources. If we are unable to successfully expand e-business capabilities in support of our customer needs, our brands may lose market share, which could negatively impact revenue and profitability.
RISKS RELATED TO NEW AND ADJACENT INITIATIVES
Our plans to improve future profitability through restructuring programs may not be successful and could lead to unintended consequences.
We have incurred and may incur restructuring charges primarily related to severance costs for staff reductions associated with our ongoing initiatives to drive profitable growth and right size our operations as well as programs to adjust our operations in response to current business conditions. Our cost structure in future periods is somewhat dependent upon our ability to maintain increased productivity without backfilling certain positions. If our programs are not successful, there could be a material adverse effect on our business and consolidated results of operations.
Our inability to successfully identify, consummate and integrate current and future acquisitions or to realize anticipated cost savings and other benefits could adversely affect our business. Additionally, divestitures may expose us to alleged potential liabilities which could adversely affect our business.
One of our operating strategies is to selectively pursue acquisitions. Any future acquisitions will depend on our ability to identify suitable acquisition candidates and successfully consummate such acquisitions. Acquisitions involve a number of risks including:
•failure of the acquired businesses to achieve the results we expect;
•diversion of our management’s attention from operational matters;
•our inability to retain key personnel of the acquired businesses;
•risks associated with unanticipated or underestimated events or liabilities;
•negative impacts due to evolving legal or regulatory landscape;
•potential disruption of our existing business; and
•customer dissatisfaction or performance problems at the acquired businesses.
If we are unable to integrate or successfully manage businesses that we have recently acquired or may acquire in the future, we may not realize anticipated cost savings, improved manufacturing efficiencies and increased revenue, which may result in material adverse short and long-term effects on our consolidated operating results, financial condition and liquidity. Even if we are able to integrate the operations of our acquired businesses into our operations, we may not realize the full benefits of the cost savings, revenue enhancements or other benefits that we may have expected at the time of acquisition. In addition, even if we achieve the expected benefits, we may not be able to achieve them within the anticipated time frame, and such benefits may be offset by costs incurred in integrating the acquired companies and increases in other expenses.
We have also divested businesses and may consider divesting businesses in the future. Divestiture risks relate to our ability to find appropriate purchasers, execute transactions on favorable terms, separate divested business operations with minimal impact to our remaining operations, and effectively manage any transitional service arrangements. Any of these factors could materially and adversely affect our consolidated results of operations and financial condition.
If we fail to introduce successful new products or solutions or extend our existing portfolio, we could lose our market position and our financial performance could be materially and adversely affected.
In the safety products and solutions market, there are frequent introductions of new products, product line extensions, and related solutions. If we are unable to identify emerging customer and technological trends, maintain and improve the competitiveness of our products and solutions and introduce new ones, we may lose our market position, which could have a material adverse effect on our business, financial condition and results of operations. We continue to invest significant resources in research and development and market research, which includes the development of software platforms for our connected products and solutions. However, continued product and/or service development and marketing efforts are subject to the risks inherent in the development process. These risks include delays, the failure of new products, product line extensions, and related solutions to achieve anticipated levels of market acceptance, disruptive products, technologies and services introduced by competitors, and the risk of failed product introductions.
RISKS RELATED TO CYBERSECURITY OR MISAPPROPRIATION OF OUR CRITICAL INFORMATION
A failure of our information systems or a cybersecurity breach could materially and adversely affect our business, results of operations and financial condition.
The proper functioning and security of our information systems is critical to the operation and reputation of our business. This includes the systems that support and operate our GRID, FireGRID, and similar connected product platforms. Our information systems may be vulnerable to damage or disruption from natural or man-made disasters, computer viruses, power losses or other system or network failures. In addition, hackers, cyber-criminals and other persons could attempt to gain unauthorized access to our information systems with the intent of harming the Company, harming our information systems or obtaining sensitive information such as intellectual property, trade secrets, financial and business development information, and customer- and vendor-related information. To date, we have not experienced any known material breaches or material losses related to cyber-attacks. If our information systems or security fail, or if there is any compromise or breach of our security, it could disrupt our operations and/or result in a violation of applicable data protection and other laws, legal and financial exposure, remediation costs, negative impacts on our customers' willingness to transact business with us, or a loss of confidence in our security measures, which could have an adverse effect on our business, our reputation and our consolidated results of operations and financial condition.
From time to time, we have experienced attempts on our information systems by unauthorized outside parties. Because the techniques used by computer hackers and others to access or sabotage networks continually evolve and generally are not recognized until launched against a target, we may be unable to anticipate, prevent or detect these attacks. As a result, the impact of any future incident cannot be predicted, including the failure of our information systems or misappropriation of our technologies and/or processes. Any such system failure or loss of such information could harm our competitive position or cause us to incur significant costs to remedy the damages caused by the incident. We have taken steps and incurred costs to further strengthen the security of our information systems and continue to assess, maintain and enhance the ongoing effectiveness of our information security systems. While we attempt to mitigate the aforementioned risks by employing a number of measures, including employee training, monitoring of our networks and systems, and maintenance of backup and protective systems, our systems, networks, facilities, business partners, including third party providers, and associates remain potentially vulnerable to advanced persistent threats. We cannot assure that ongoing improvements to our infrastructure and cybersecurity programs will be sufficient to prevent or limit the damage from any future cyber-attack or disruption to our information systems. It is therefore possible that we may suffer a cyber attack with a material breach or material loss, unauthorized parties may gain access to personal information in our possession and we may not be able to identify any such incident in a timely manner.
Our continued success depends on our ability to protect our intellectual property. If we are unable to protect our intellectual property, our business could be materially and adversely affected.
Our success depends, in part, on our ability to obtain and enforce patents, maintain trade secret protection and know-how and operate without infringing on the proprietary rights of third parties. We have been issued patents and have registered trademarks with respect to many of our products, but our competitors could independently develop similar or superior products or technologies, duplicate any of our designs, trademarks, processes or other intellectual property or design around any processes or designs on which we have or may obtain patents or trademark protection. In addition, it is possible that third parties may have, or will acquire, licenses for patents or trademarks that we may use or desire to use, so that we may need to acquire licenses to, or to contest the validity of, such patents or trademarks of third parties. Such licenses may not be made available to us on acceptable terms, if at all, and we may not prevail in contesting the validity of third-party rights.
We also protect trade secrets, know-how and other confidential information against unauthorized use by others or disclosure by persons who have access to them, such as our employees, through contractual arrangements. These agreements may not provide meaningful protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use, misappropriation or disclosure of such trade secrets, know-how or other proprietary information. Our inability to maintain the proprietary nature of our technologies could have a material adverse effect on our consolidated results of operations and financial condition.
RISKS RELATED TO HUMAN CAPITAL MANAGEMENT
If we lose any of our key personnel or are unable to attract, train and/or retain qualified personnel or properly plan the succession of senior management, our ability to manage our business and continue our growth could be negatively impacted.
Our success depends in large part on the continued contributions of our key management, engineering, sales and marketing and other key personnel, many of whom are highly skilled and would be difficult to replace. Our success also depends on the abilities of personnel to function effectively, both individually and as a group. If we are unable to attract, effectively integrate and retain management, engineering, sales and marketing or other key personnel, then the execution of our company strategy and our ability to adapt and react to changing market requirements may be impeded, and our business could suffer as a result.
In addition, hiring, training, and successfully integrating replacement critical personnel could be time consuming, may cause additional disruptions to our operations, and may be unsuccessful, which could negatively impact future revenues. Competition for personnel is intense, and we cannot assure that we will be successful in attracting and retaining qualified personnel. The hiring of new personnel may also result in increased costs, and we do not currently maintain key person life insurance.
Our success also depends on effective succession planning. Failure to ensure effective transfer of knowledge and smooth transitions involving senior management could hinder our strategic planning and execution. From time to time, senior management or other key employees may leave the Company. While we strive to reduce the negative impact of such changes, the loss of any key employee could result in significant disruptions to our operations, including adversely affecting the timeliness of product releases, the successful implementation and completion of company initiatives, the effectiveness of our disclosure controls and procedures and our internal control over financial reporting, and the results of our operations.
We may be unable to hire, retain or develop a highly skilled and diverse global workforce or effectively manage changes in our workforce and respond to shifts in labor availability.
It is important to our business to hire, retain and develop a highly skilled and diverse global workforce. We compete to hire new personnel with a variety of capabilities in the many countries in which we design, manufacture and market our products and solutions. We also invest resources and time to develop and retain our employees' skills and competencies. We could experience unplanned or increased turnover of employees, fail to develop adequate succession plans for leadership positions, or fail to hire and retain a workforce with the skills and in the locations we need to operate and grow our business. We could also fail to attract and develop personnel with key emerging capabilities that we need to continue to respond to changing end user and customer needs and grow our business, including skills in the areas of manufacturing, engineering, sales, service, and various functional support areas. Occurrence of any of these conditions could deplete our institutional knowledge base and erode our competitiveness.
We continue to experience a tight and competitive labor market and could face unforeseen challenges in the availability of labor. A sustained labor shortage or increased turnover rates within our employee base have led and could lead to increased costs such as increased overtime to meet demand or increased wages to attract and retain employees. We have also been negatively affected and could continue to be negatively affected by labor shortages and other constraints experienced by our partners, including our external manufacturing partners and freight providers. Failure to achieve and maintain a diverse workforce, compensate our employees competitively and fairly, maintain a safe and inclusive environment or promote the well-being of our employees could affect our reputation and also result in lower performance and an inability to retain valuable employees.
RISKS RELATED TO DOING BUSINESS INTERNATIONALLY
We have significant international operations and are subject to the risks of doing business in foreign countries and global supply chains.
We have business operations in more than 40 international locations. In 2024, approximately 40% of our net sales were made by operations located outside the United States. We also rely on global supply chains or otherwise source critical components and raw materials from suppliers based in foreign countries, which at times are used in manufacturing operations across our global footprint. In certain cases, components could be sole sourced or otherwise not easily substituted due to the highly regulated or complex nature of our products. Therefore, our operations and sourcing strategies could face supply shortages, supplier or sourcing delays, transportation disruptions, changes in customer demand, or disruption due to various geopolitical events, economic conditions, and natural disasters, as well as other risks and uncertainties related to doing business across borders, which could have a material adverse effect on our business. Further examples of such risks include the following:
•Scarcity or unavailability of parts and components necessary to manufacture our products;
•unexpected changes in regulatory requirements;
•changes in trade policy or tariff regulations;
•changes in tax laws and regulations;
•unintended consequences due to changes to the Company's legal structure;
•additional valuation allowances on deferred tax assets due to an inability to generate sufficient profit in certain foreign jurisdictions;
•intellectual property protection difficulties or intellectual property theft;
•difficulty in collecting accounts receivable;
•complications in complying with a variety of foreign laws and regulations, some of which may conflict with U.S. laws;
•foreign privacy laws and regulations that impede our ability to effectively do business;
•negative impacts from trade protection measures and price controls;
•trade sanctions and embargoes;
•nationalization and expropriation of assets;
•increased international instability, potential instability of foreign governments or impacts from geopolitical conflicts, events, or wars;
•lack of effective compliance with MSA's anti-bribery policy, the U.S. Foreign Corrupt Practices Act, and similar anti-corruption and anti-bribery laws in the countries where the Company does business;
•difficulty in hiring, retaining and motivating qualified employees;
•difficulty in the ability to effectively negotiate with labor unions in foreign countries;
•the need to take extra security precautions for our international operations;
•costs and difficulties in managing culturally and geographically diverse international operations;
•pandemics, severe weather events, or other disasters; and
•risks associated with disruptive political events and related legal and economic uncertainty.
Any one or more of these risks could have a negative impact on the success of our global operations and, thereby, have a material adverse effect on our business, consolidated results of operations and financial condition.
Because we derive a significant portion of our sales from the operations of our foreign subsidiaries, future currency exchange rate fluctuations could adversely affect our results of operations and financial condition and could affect the comparability of our results between financial periods.
Our operations outside of the United States account for a significant portion of our net sales. The results of our foreign operations are generally reported in local currency and then translated into U.S. dollars at the applicable exchange rates for inclusion in our consolidated financial statements. The exchange rates between some of these currencies and the U.S. dollar have fluctuated significantly in recent years and may continue to do so in the future. A weakening of the currencies in which sales are generated relative to the currencies in which costs are denominated would decrease our results of operations and cash flow. Although the Company uses instruments to hedge certain foreign currency risks, these hedges only offset a portion of the Company’s exposure to foreign currency fluctuations.
In addition, because our consolidated financial statements are stated in U.S. dollars, such fluctuations may affect our consolidated results of operations and financial position, and they may affect the comparability of our results between financial periods. Our inability to effectively manage our exchange rate risks or any volatility in currency exchange rates could have a material adverse effect on our business, consolidated results of operations and financial condition.
We benefit from free trade laws and regulations, such as the United States-Mexico-Canada Agreement and any changes to these laws and regulations could adversely affect our results of operations.
Existing free trade laws and regulations, such as the United States-Mexico-Canada Agreement, provide certain beneficial duties and tariffs for qualifying imports and exports, subject to compliance with the applicable classification and other requirements. Changes in laws or policies governing the terms of foreign trade and, in particular, increased trade restrictions, tariffs or taxes on imports from countries where we manufacture products, such as China and Mexico, could have a material adverse effect on our business, consolidated results of operations and financial condition.
GENERAL RISK FACTORS
Damage to the reputation of MSA or to one or more of our Company brands could adversely affect our business.
Developing and maintaining our reputation, as well as the reputation of our brands, is a critical factor in our relationship with customers, distributors, end users, suppliers, associates, and others. Our inability to address negative publicity or other issues, including concerns about product safety or quality, real or perceived, could negatively impact our business which could have a material adverse effect on our business, consolidated results of operations and financial condition.
If our goodwill, other intangible assets and long-lived assets become impaired, we may be required to record significant charges to earnings.
We review our long-lived assets for impairment when events or changes in circumstances indicate the carrying amount may not be recoverable. Goodwill and indefinite-lived intangible assets are required to be assessed for impairment at least annually. Factors that may be considered a change in circumstances, indicating that the carrying amount of our goodwill, indefinite-lived intangible assets or long-lived assets may not be recoverable, include slower growth rates in our markets, reduced expected future cash flows, increased country risk premiums as a result of political uncertainty and a decline in stock price and market capitalization. We consider available current information when calculating our impairment charge. If there are indicators of impairment, our long-term cash flow forecasts for our operations deteriorate or discount rates increase, we may be required to recognize additional impairment charges in later periods. See Note 14-Goodwill and Intangible Assets of the consolidated financial statements in Part II Item 8 of this Form 10-K for the carrying amounts of goodwill in each of our reporting segments and details on indefinite-lived intangible assets that we hold.
Failure to effectively harness and/or protect Company data or to incorporate, or improperly incorporating, Artificial Intelligence (AI) could damage our business.
New and emerging technologies, including Generative AI, bring opportunities and risks, and the implications of using (or not using) these technologies are only starting to emerge. Our business is subject to and impacted by these rapid technological advances, and the failure to effectively and/or lawfully deploy these technologies may impact the Company’s business. To remain competitive, we review and enhance our products and solutions against new technologies, including exploring the use of Generative AI. If we fail to anticipate or respond to technological advancements appropriately, the demand for our products and solutions may be diminished. If the Company fails to build and implement an effective data strategy or to procure, adopt, or use new technologies in a way that is efficient and additive to our business, it may have an adverse effect on our business, consolidated results of operations or financial condition. Conversely, there are risks that using new technologies could result in inadvertent data loss or disclosure (including but not limited to confidential information), biased algorithms, heightened regulatory compliance obligations, over-dependence, inaccurate, misleading or incomplete outputs, data privacy and cybersecurity risks, ethical concerns, intellectual property risks, and other risks that could lead to reputational harm or have an adverse effect on our business, consolidated results of operations or financial condition.
Risks related to our defined benefit pension and other post-retirement plans could adversely affect our results of operations and cash flow.
Significant changes in actual investment return on pension assets, discount rates, and other factors could adversely affect our results of operations and pension contributions in future periods. U.S. generally accepted accounting principles require that we calculate income or expense for the plans using actuarial valuations. These valuations reflect assumptions about financial markets and interest rates, which may change based on economic conditions. Funding requirements for our pension plans may become more significant. However, the ultimate amounts to be contributed are dependent upon, among other things, interest rates, underlying asset returns and the impact of legislative or regulatory changes related to pension funding obligations. For further information regarding our pension plans, refer to Note 15-Pensions and Other Post-retirement Benefits of the consolidated financial statements in Part II Item 8 of this Form 10-K.
If we fail to meet our debt service requirements or the restrictive covenants in our debt agreements or if interest rates increase, our results of operations and financial condition could be materially and adversely affected.
We have a substantial amount of debt upon which we are required to make scheduled interest and principal payments and we may incur additional debt in the future. A significant portion of our debt bears interest at variable rates that may increase in the future.
Our debt agreements require us to comply with certain restrictive covenants. If we are unable to generate sufficient cash to service our debt or if interest rates increase, our consolidated results of operations and financial condition could be materially and adversely affected. Additionally, a failure to comply with the restrictive covenants contained in our debt agreements could result in a default, which if not waived by our lenders, could substantially increase borrowing costs and require accelerated repayment of our debt. Please refer to Note 13-Long-Term Debt of the consolidated financial statements in Part II Item 8 of this Form 10-K for commentary on our compliance with the restrictive covenants.
Any period of interest rate increases may adversely affect our ability to obtain new financing or to refinance existing debt on terms the Company deems attractive, the cost of such financing, exchange-rates, and our profitability, which in turn may have a material adverse effect on our liquidity and capital resources. As of December 31, 2024, we had $206.3 million of variable rate borrowings on a term loan under our revolving credit facility. A 50 basis point increase or decrease in interest rates could result in $1.0 million of additional interest expense.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments
None.

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ITEM 2. PROPERTIES
Item 2. Properties
Our principal executive offices are located at 1000 Cranberry Woods Drive, Cranberry Township, PA, United States. We own or lease our primary facilities. Our primary manufacturing locations in the Americas segment are located in Cranberry Township, PA; Jacksonville, NC; Murrysville, PA; New Kensington, PA; Pittsfield, NH,; and Querétaro, Mexico, and our primary distribution center is located in New Galilee, PA. The primary manufacturing locations in the International segment are located in Berlin, Germany; Bristol, United Kingdom; Châtillon-sur-Chalaronne, France; Galway, Ireland; Chelalate, Morocco; and Suzhou, China. Our primary research and development centers are located in Berlin, Germany; Cranberry Township, PA; Suzhou, China; Johannesburg/Cape Town, South Africa; and Châtillon-sur-Chalaronne, France.
We believe that all of our facilities, including the manufacturing facilities, are in good repair and in suitable condition for the purposes for which they are used.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Proceedings
Please refer to Note 20-Contingencies to the consolidated financial statements in Part II Item 8 of this Form 10-K.

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosures
Not applicable.
Information about our Executive Officers
The following sets forth the names and ages of our executive officers as of February 14, 2025:
Name Age Title
Steven C. Blanco(a)
58 President and Chief Executive Officer since May 2024.
David J. Howells(b)
68 Sr. Vice President and President, International since June 2024.
Lee B. McChesney(c)
53 Sr. Vice President and Chief Financial Officer since October 2022.
Richard W. Roda(d)
52 Vice President, Secretary and Chief Legal Officer since June 2023.
Stephanie L. Sciullo(e)
40 Sr. Vice President and President, Americas since June 2023.
(a)Prior to his present position, Mr. Blanco served as President and Chief Operating Officer since June 2023; Sr. Vice President and President, MSA Americas segment since June 2022 and Vice President and President, MSA Americas segment since August 2017.
(b)Prior to his present position, Mr. Howells served as Interim President, MSA International since February 2024; Vice President, International Sales and Customer Marketing since August 2021; Vice President Business Leader EMEA since January 2020; Interim Vice President and General Manager, MEAIRR since September 2019; and prior thereto served as Vice President, Global Distribution Channels since October 2017.
(c)Prior to his present position, Mr. McChesney served as Vice President, Corporate Finance and Chief Financial Officer, Global Tools and Storage for Stanley Black & Decker, Inc. (a manufacturer of industrial tools and household hardware) since January 2021; Chief Financial Officer, Global Tools and Storage and Corporate FP&A since November 2019; and prior thereto served as President, Hand Tools, Accessories and Storage since 2016.
(d)Prior to his present position, Mr. Roda served as Deputy General Counsel, Secretary and Chief Compliance Officer since January 2020; and prior thereto served as Associate General Counsel, Corporate Secretary and Chief Compliance Officer since December 2016.
(e)Prior to her present position, Ms. Sciullo served as Sr. Vice President and Chief Legal Officer, Corporate Social Responsibility & Public Affairs since June 2022; Vice President and Chief Legal Officer since January 2020; and prior thereto served as Deputy General Counsel since 2016.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our common stock is traded on the New York Stock Exchange under the symbol “MSA.” On February 7, 2025, there were 138 registered holders of our shares of common stock. A substantially greater number of holders of our common stock are “street name” or beneficial holders, whose shares are held by banks, brokers and other financial institutions.
Issuer Purchases of Equity Securities
Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced
Plans or Programs Maximum Number of Shares that May Yet Be Purchased
Under the Plans or Programs
October 1 - October 31, 2024 7,000 $ 167.06 7,000 1,077,458
November 1 - November 30, 2024 34,100 172.17 34,100 994,955
December 1 - December 31, 2024 16,319 176.04 16,275 1,025,927
The share repurchase program authorizes up to $200.0 million in repurchases of MSA common stock in the open market and in private transactions. The share repurchase program has no expiration date. The maximum number of shares that may be purchased is calculated based on the dollars remaining under the program and the respective month-end closing share price. We have purchased a total of 166,292 shares, or $29.9 million, since this program's inception. We do not have any other share repurchase programs.
The above shares purchased during the quarter, excluding those related to the share repurchase program, related to stock-based compensation transactions.
Comparison of Five-Year Cumulative Total Return
The following paragraph compares the most recent five-year performance of MSA stock with (1) the Standard & Poor’s 500 Composite Index, (2) S&P Midcap 400 Index and (3) S&P Midcap 400 Industrials. Because our competitors are principally privately held concerns or subsidiaries or divisions of corporations engaged in multiple lines of business, we do not believe it feasible to construct a peer group comparison on an industry or line-of-business basis. The S&P 500 Composite Index, S&P Midcap 400 Index and the S&P Midcap 400 Industrials, while including corporations both larger and smaller than MSA in terms of market capitalization, is composed of corporations with an average market capitalization similar to us.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
ASSUMES INITIAL INVESTMENT OF $100
Among MSA Safety Incorporated, the S&P 500 Index, S&P Midcap 400, and S&P Midcap 400 Industrials
Assumes $100 invested on December 31, 2019, in stock or index, including reinvestment of dividends. Fiscal year ending December 31.
Value at December 31,
2019 2020 2021 2022 2023 2024
MSA Safety Incorporated $ 100.00 $ 119.78 $ 122.35 $ 118.48 $ 140.39 $ 139.38
S&P 500 Index 100.00 118.40 152.39 124.79 157.59 197.02
S&P Midcap 400 100.00 113.66 141.80 123.28 143.54 163.54
S&P Midcap 400 Industrials 100.00 116.49 149.62 132.42 174.04 197.51
Prepared by Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980-2025.
Index Data: Copyright Standard and Poor’s, Inc. Used with permission. All rights reserved.

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. [Reserved]

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the historical financial statements and other financial information included elsewhere in this annual report on Form 10-K. This discussion may contain forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in the sections of this annual report entitled “Forward-Looking Statements” and “Risk Factors.”
This section generally discusses the results of our operations for the year ended December 31, 2024, compared to the year ended December 31, 2023. For a discussion on the year ended December 31, 2023, compared to the year ended December 31, 2022, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on February 16, 2024.
MSA Safety Incorporated ("MSA") is organized into four geographical operating segments that are aggregated into three reportable segments: Americas, International and Corporate. The Americas segment is comprised of our operations in North America and Latin America geographies. The International segment is comprised of our operations of all geographies outside of the Americas. Certain global expenses are allocated to each segment in a manner consistent with where the benefits from the expenses are derived. Please refer to Note 9-Segment Information of the consolidated financial statements in Part II Item 8 of this Form 10-K for further information.
On January 5, 2023, the Company divested Mine Safety Appliances Company, LLC ("MSA LLC") a wholly owned subsidiary that held legacy product liability claims relating to coal dust, asbestos, silica, and other exposures, to a joint venture between R&Q Insurance Holdings Ltd. and Obra Capital, Inc. In connection with the closing, MSA contributed $341.2 million in cash and cash equivalents, while R&Q and Obra contributed an additional $35.0 million. As a result of the transaction, MSA derecognized all legacy cumulative trauma product liability reserves, related insurance assets, and associated deferred tax assets of the divested subsidiary from its balance sheet in the first quarter of 2023. Following completion of the transaction, R&Q and Obra assumed management of the divested subsidiary, including the management of its claims. Refer to Note 20-Contingencies of the consolidated financial statements in Part II Item 8 of this Form 10-K for further information.
BUSINESS OVERVIEW
MSA is the global leader in advanced safety products, technology and solutions. Driven by its singular mission of safety, the Company has been at the forefront of safety innovation since 1914, protecting workers and facility infrastructure around the world across a broad range of diverse end markets while creating sustainable value for shareholders.
We tailor our product and solution offerings and distribution strategy to satisfy distinct customer preferences that vary across geographic regions. To best serve these customer preferences, we have organized our business into four geographical operating segments that are aggregated into three reportable segments: Americas, International and Corporate. In 2024, 69% and 31% of our net sales were made by our Americas and International segments, respectively.
Americas. Our largest manufacturing and research and development facilities are located in the United States. We serve our markets across the Americas with manufacturing facilities in the U.S., Mexico and Brazil. Operations in the other countries within the Americas segment focus primarily on sales and distribution in their respective home country markets.
International. Our International segment includes companies in Europe, the Middle East and Africa ("EMEA") and the Asia Pacific region. In our largest International subsidiaries (in Germany, France, U.K., Ireland and China), we develop, manufacture and sell a wide variety of products. In China, the products manufactured are sold primarily in China as well as in regional markets. Operations in other International segment countries focus primarily on sales and distribution in their respective home country markets. Although some of these companies may perform limited production, most of their sales are of products manufactured in our plants in Germany, France, the U.S., U.K., Ireland, Mexico, Morocco and China or are purchased from third-party vendors.
Corporate. The Corporate segment primarily consists of general and administrative expenses incurred in our corporate headquarters, costs associated with corporate development initiatives, legal expense, interest expense, foreign exchange gains or losses and other centrally-managed costs. Corporate general and administrative costs comprise the majority of the expense in the Corporate segment. During the years ended December 31, 2024, and 2023, corporate general and administrative costs were $56.3 million and $52.7 million, respectively. The increase is related to higher costs for centrally managed functions, including legal and other professional services associated with various strategic initiatives, partially offset by lower variable compensation expense.
We leverage the MSA Business System ("MBS") to develop and introduce innovative safety solutions, secure new business opportunities, and operate with greater efficiency. The MBS is our approach to working at our best - at our most efficient and most empowered. It is a combination of behaviors, processes and tools that provide a framework to run the business and continuously improve. Our commitment to MBS has enabled us to drive customer satisfaction and profitable growth while generating significant improvements in operating results.
Year Ended December 31, 2024, Compared to Year Ended December 31, 2023
Net Sales 2024 2023 Dollar
Increase Percent
Increase
(In millions)
Consolidated $1,808.1 $1,787.7 $20.4 1.1%
Americas 1,246.6 1,235.6 11.0 0.9%
International 561.5 552.1 9.4 1.7%
Net Sales. Net sales for the year ended December 31, 2024, were $1.81 billion, an increase of $20.4 million from $1.79 billion for the year ended December 31, 2023. Please refer to the Net Sales table below for a reconciliation of the year over year sales change.
Net Sales Year Ended December 31, 2024, versus December 31, 2023
(Percent Change) Americas International Consolidated
GAAP reported sales change 0.9% 1.7% 1.1%
Currency translation effects 0.7% (0.2)% 0.4%
Organic sales change 1.6% 1.5% 1.5%
Note: Organic sales change is a non-GAAP financial measure. See the "Non-GAAP Financial Measures" section below.
Net sales for the Americas segment were $1.25 billion for the year ended December 31, 2024, an increase of $11.0 million, or 0.9%, compared to $1.24 billion for the year ended December 31, 2023. Organic sales in the Americas segment increased 1.6% compared to the prior year. This growth was driven by strength across detection, fire service and industrial PPE.
Net sales for the International segment were $561.5 million for the year ended December 31, 2024, an increase of $9.4 million, or 1.7%, compared to $552.1 million for the year ended December 31, 2023. Organic sales in the International segment increased 1.5% compared to the prior year period. This growth was driven by strength across fire service partially offset by a decline in industrial PPE.
The operating environment continues to be dynamic with an uncertain macroeconomic and geopolitical climate. We remain cautiously optimistic in our outlook, which balances the opportunities and risks we see ahead of us given the resilient nature of our business. We expect to generate low-single digit organic sales growth in 2025 and expect the year to follow normal seasonal patterns.
Refer to Note 9-Segment Information to the consolidated financial statements in Part II Item 8 of this Form 10-K, for information regarding sales by product category.
Gross profit. Gross profit for the year ended December 31, 2024, was $860.4 million, an increase of $8.3 million, or 1.0%, compared to $852.1 million for the year ended December 31, 2023. The ratio of gross profit to net sales was 47.6% in 2024 compared to 47.7% in 2023. Price realization and productivity efforts mostly offset inflationary pressures.
Selling, general and administrative expenses. Selling, general and administrative ("SG&A") expenses were $394.7 million for the year ended December 31, 2024, a decrease of $1.9 million, or 0.5%, compared to $396.6 million for the year ended December 31, 2023. Selling, general and administrative expenses were 21.8% of net sales in 2024 compared to 22.2% of net sales in 2023. Organic SG&A was consistent from 2023 to 2024. Lower variable compensation and discretionary cost management offset inflation, net cost for product-related legal matter and higher professional service expenses. Please refer to the Selling, general and administrative expenses table for a reconciliation of the year over year expense change.
Selling, general, and administrative expenses Year Ended
December 31, 2024, versus December 31, 2023
(Percent Change) Consolidated
GAAP reported change (0.5)%
Currency translation effects 0.5%
Organic change -%
Note: 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 $66.5 million for the year ended December 31, 2024, a decrease of $1.5 million, or 2.2%, compared to $68.0 million for the year ended December 31, 2023. Research and development expense was 3.7% of net sales in 2024, compared to 3.8% of net sales in 2023.
We capitalized $13.0 million and $12.1 million of software development costs during the years ended December 31, 2024, and 2023, respectively. Amortization expense for capitalized software development cost of $11.3 million and $10.4 million during the years ended December 31, 2024, and 2023, was recorded in costs of products sold on the Consolidated Statements of Income. Refer to Note 1-Significant Accounting Policies of the consolidated financial statements in Part II Item 8 of this Form 10-K for further details regarding our software development costs.
MSA remains committed to dedicating significant resources to research and development activities, including the development of technology-based safety solutions. 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 $79.5 million and $80.1 million during the years ended December 31, 2024, and 2023.
Restructuring charges. During the year ended December 31, 2024, the Company recorded restructuring charges of $6.4 million primarily related to our ongoing initiatives to optimize our manufacturing footprint and improve productivity as well as management restructuring. This compared to restructuring charges of $9.9 million during the year ended December 31, 2023, primarily related to manufacturing footprint optimization activities and other initiatives to adjust our cost structure and improve productivity. We remain focused on executing programs to optimize our cost structure.
Currency exchange. Currency exchange losses were $3.6 million during the year ended December 31, 2024, compared to $17.1 million during the year ended December 31, 2023. In 2024, we recognized non-cash net cumulative translation gains of $1.2 million associated with certain foreign subsidiaries. The remaining currency exchange activity for both periods related primarily to foreign currency exposure on unsettled inter-company balances and recognized exchange loss for our Argentina affiliate operating in a hyper-inflationary environment.
Refer to Note 18-Derivative Financial Instruments of the consolidated financial statements in Part II Item 8 of this Form 10-K for information regarding our currency exchange rate risk management strategy.
Product liability expense. Product liability expense during the years ended December 31, 2024, and 2023, was minimal due to our divestiture of MSA LLC in January 2023, as discussed further in Note 20-Contingencies of the consolidated financial statements in Part II Item 8 of this Form 10-K.
Loss on divestiture of MSA LLC. The $129.2 million pre-tax loss on divestiture of MSA LLC for the year ended December 31, 2023, relates to the derecognition of all legacy cumulative trauma product liability reserves and related insurance assets of the divested subsidiary during the first quarter of 2023. The loss also includes a $341.2 million contribution of cash and cash equivalents, as well as transaction related costs of $5.6 million. Refer to Note 20-Contingencies to the consolidated financial statements in Part II Item 8 of this Form 10-K for further information.
GAAP operating income. Consolidated operating income for the year ended December 31, 2024, was $389.2 million compared to $231.3 million for the year ended December 31, 2023. The increase in operating results was primarily driven by the absence of loss on divestiture of MSA LLC as recognized in 2023 in addition to higher sales.
Adjusted operating income. Americas adjusted operating income for the year ended December 31, 2024, was $380.1 million, an increase of $20.5 million, or 6%, compared to $359.6 million for the year ended December 31, 2023. The increase in adjusted operating income is primarily attributable to higher sales and effective price/cost management as well as controlled SG&A expense.
International adjusted operating income for the year ended December 31, 2024, was $84.6 million, a decrease of $5.1 million, or 6%, compared to adjusted operating income of $89.7 million for the year ended December 31, 2023. The decrease in adjusted operating income is primarily attributable to inflationary pressures, partially offset by pricing and discretionary cost management.
Corporate segment adjusted operating loss for the year ended December 31, 2024, was $50.4 million, a decrease of $1.2 million, or 2%, compared to an adjusted operating loss of $51.6 million for the year ended December 31, 2023, driven by lower variable compensation partially offset by inflation and increased professional service fees associated with various strategic initiatives.
The following tables represent a summary of adjusted operating income (loss), adjusted operating margin %, adjusted EBITDA and adjusted EBITDA % by reportable segment. Adjusted operating margin % is calculated as adjusted operating income (loss) divided by net sales and adjusted EBITDA margin % is calculated as adjusted EBITDA divided by net sales.
(In thousands) Americas International Corporate Consolidated
Year ended December 31, 2024
Net sales $ 1,246,641 $ 561,499 $ - $ 1,808,140
GAAP operating income 389,177
Adjusted operating income (loss) 380,086 84,571 (50,385) 414,272
Adjusted operating margin % 30.5 % 15.1 %
Adjusted EBITDA 419,183 99,753 (49,505) 469,431
Adjusted EBITDA % 33.6 % 17.8 %
Year ended December 31, 2023
Net sales $ 1,235,594 $ 552,053 $ - $ 1,787,647
GAAP operating income 231,320
Adjusted operating income (loss) 359,617 89,699 (51,600) 397,716
Adjusted operating margin % 29.1 % 16.2 %
Adjusted EBITDA 396,596 103,404 (50,757) 449,243
Adjusted EBITDA % 32.1 % 18.7 %
Note: 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 consolidated financial statements in Part II Item 8 of this Form 10-K 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:
Year ended December 31,
(In thousands) 2024 2023
Adjusted EBITDA $ 469,431 $ 449,243
Less:
Depreciation and amortization 55,159 51,527
Adjusted operating income $ 414,272 $ 397,716
Less:
Currency exchange losses, net 3,638 17,079
Amortization of acquisition-related intangible assets 9,174 9,246
Restructuring charges (Note 4) 6,397 9,892
Net cost for product-related legal matter 5,000 -
Transaction costs(a)
886 965
Loss on divestiture of MSA LLC (Note 20) - 129,211
Product liability expense (Note 20) - 3
GAAP operating income $ 389,177 $ 231,320
Less:
Interest expense 36,889 46,733
Other income, net (Note 16) (22,718) (22,101)
Income before income taxes 375,006 206,688
Provision for income taxes (Note 11) 90,039 148,105
Net income $ 284,967 $ 58,583
(a)Transaction costs include advisory, legal, accounting, valuation, and other professional or consulting fees incurred during our evaluation of acquisitions and divestitures. These costs are included in Selling, general and administrative expense in the Consolidated Statements of Operations.
Total other expense, net. Total other expense, net, for the year ended December 31, 2024, was $14.2 million, a decrease of $10.4 million compared to $24.6 million for the year ended December 31, 2023, due primarily to decreased interest expense on reduced debt balances as well as increased pension income driven by a higher expected rate of return, partially offset by pension settlement expense recognized in the current year. We expect total interest expense for 2025 to be in the range of $24 million to $27 million. This decrease is primarily related to significant long-term debt payments made during 2024. We expect non-cash pension income to increase by $4 million to $5 million compared to 2024.
Income taxes. The reported effective tax rate for the year ended December 31, 2024, was 24.0% compared to 71.6% for the year ended December 31, 2023. This significant variance is primarily due to the prior year divestiture of MSA LLC and the non-deductible loss recorded on the derecognition of the product liability reserves and related assets. Refer to Note 20- Contingencies to consolidated financial statements in Part II Item 8 of this Form 10-K for further information on the MSA LLC divestiture.
The Organization for Economic Co-operation and Development (OECD) has a framework to implement a global minimum corporate tax of 15% for companies with global revenues above €750.0 million (referred to as Pillar 2), with effective dates beginning in January 2024. We meet the overall revenue threshold and fall within the scope of Pillar 2 and as such, have complied with the requirements of the legislation for the year ended December 31, 2024. The application of Pillar 2 resulted in additional tax expense of $1.1 million.
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 consolidated financial statements.
Net income. Net income was $285.0 million for the year ended December 31, 2024, or $7.21 per diluted share, compared to $58.6 million, or $1.48 per diluted share, for the year ended December 31, 2023.
Non-GAAP Financial Information
This report includes certain non-GAAP financial measures and operating ratios derived from non-GAAP financial measures. These financial measures and ratios include organic (referred to in our historical filings as constant currency) revenue growth, organic SG&A change, adjusted operating income (loss), adjusted operating margin %, adjusted EBITDA and adjusted EBITDA margin %.
Organic sales and SG&A change are non-GAAP financial measures provided by the Company to give a better understanding of the Company's underlying business performance. Organic sales and SG&A change are calculated by deducting the percentage impact from currency translation effects from the overall percentage change in net sales and SG&A. The Company believes that organic revenue growth and SG&A change are useful metrics for investors, as foreign currency translation can have a material impact on revenue and SG&A trends. Organic revenue growth and SG&A change highlight ongoing business performance excluding the impact of fluctuating foreign currencies, which is outside of the Company's control.
Adjusted operating income (loss), adjusted operating margin %, adjusted EBITDA and adjusted EBITDA margin % are non-GAAP financial measures and operating ratios derived from non-GAAP measures. Total reportable segment adjusted operating income is reconciled above to the nearest GAAP financial measure, operating income, and excludes restructuring, currency exchange, product liability expense, loss on divestiture of MSA LLC, net cost for product related legal matter, transaction costs and acquisition-related amortization. Total reportable segment adjusted EBITDA is reconciled above to the nearest GAAP financial measure, net income and, in addition to the items summarized above that are excluded from adjusted operating income (loss), excludes depreciation and amortization expense; interest expense; other income, net; and provision for income taxes. Adjusted operating margin % is defined as adjusted operating income (loss) divided by net sales to external customers and adjusted EBITDA margin % is defined as adjusted EBITDA divided by net sales to external customers. These metrics are consistent with how management evaluates segment results and makes strategic decisions about the business. Additionally, these non-GAAP financial measures provide information useful to investors in understanding our operating performance and trends, and to facilitate comparisons with the performance of our peers.
Management uses these measures internally to assess and better understand our underlying business performance and trends related to core business activities as well as to allocate resources. The non-GAAP financial measures and key performance indicators we use, and computational methods with respect thereto, may differ from the non-GAAP financial measures and key performance indicators, and computational methods, that our peers use to assess their performance and trends. The presentation of these non-GAAP financial measures does not comply with U.S. GAAP. These non-GAAP financial measures should be viewed as supplemental in nature, and not as a substitute for, or superior to, our reported results prepared in accordance with GAAP.
LIQUIDITY AND CAPITAL RESOURCES
Our main source of liquidity is operating cash flows, supplemented by borrowings. Our principal liquidity requirements are for working capital, capital expenditures, principal and interest payments on debt, dividend payments and share repurchases. At December 31, 2024, approximately 60% 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 a term loan due in 2026. At December 31, 2024, approximately 89% of our borrowings are denominated in US dollars, which limits our exposure to currency exchange rate fluctuations.
At December 31, 2024, the Company had cash and cash equivalents totaling $164.6 million and access to sufficient capital, providing ample liquidity and flexibility to continue to maintain our balanced capital allocation strategy that prioritizes growth investments, funding our dividends and servicing debt obligations. Cash, cash equivalents and restricted cash increased $16.7 million during the year ended December 31, 2024. This compared to cash decreasing $16.0 million during the same period in 2023.
At December 31, 2024, we had no borrowings outstanding under our $900.0 million senior revolving credit facility. The facility also provides an accordion feature that allows the Company to access an additional $400.0 million of capacity pending approval by MSA’s board of directors and from the bank group.
We believe MSA's healthy balance sheet and access to significant capital at the year ended December 31, 2024, 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, returning cash to shareholders in the form of dividends and share buybacks, and pursuing inorganic growth opportunities.
Operating activities. Operating activities provided cash of $296.4 million in 2024, compared to providing cash of $92.9 million in 2023. The improved cash flow from operating activities as compared to the same period in 2023 was primarily related to the prior year contribution of $341.2 million in the divestiture of MSA LLC. Refer to Note 20-Contingencies to the consolidated financial statements in Part II Item 8 of this Form 10-K for further information. Excluding the cash flow impact of the MSA LLC divestiture for 2023, cash flow provided by operating activities decreased by $142.9 million related to higher cash usage for tax payments and variable compensation payouts, both driven by prior year performance. Additionally, working capital cash usage increased related primarily to inventory purchases to support customer demand, which were partially offset by improved accounts payable and accounts receivable management.
Investing activities. Investing activities used cash of $53.8 million for the year ended December 31, 2024, compared to using $40.0 million in 2023. The increase in cash used in investing activities as compared to the same period in 2023 was primarily related to increased capital expenditures to support our manufacturing footprint optimization activities, IT systems implementation, capitalized software development associated with new products, and other strategic initiatives. We remain committed to evaluating acquisition opportunities that will allow us to continue to grow in key end markets and geographies.
Financing activities. Financing activities used cash of $208.7 million for the year ended December 31, 2024, compared to using cash of $52.3 million in 2023. During 2024, we had net payments on long-term debt of $94.3 million compared to net proceeds from long-term debt of $23.9 million during the same period in 2023 to fund the MSA LLC divestiture. We paid cash dividends of $78.8 million during 2024, compared to $73.5 million during 2023. We used cash of $37.3 million during 2024 to repurchase shares, including $29.9 million related to our share repurchase program, and the remainder related to our employee stock compensation transactions compared to $4.0 million during 2023, all of which related to employee stock compensation transactions.
CUMULATIVE TRANSLATION ADJUSTMENTS
The position of the U.S. dollar relative to international currencies, primarily the euro, at December 31, 2024, resulted in a translation loss of $42.5 million being recorded to cumulative translation adjustments shareholders' equity account for the year ended December 31, 2024, compared to a translation gain of $21.7 million being recorded to the cumulative translation adjustments account during 2023.
COMMITMENTS AND CONTINGENCIES
We are obligated to make future payments under various contracts, including debt and lease agreements. Our significant cash obligations as of December 31, 2024, are as follows:
(In millions) Total 2025 2026 2027 2028 2029 Thereafter
Long-term debt $ 509.6 $ 26.4 $ 195.1 $ 32.6 $ 32.6 $ 7.6 $ 215.3
Operating leases 67.7 13.3 11.2 8.5 6.5 5.1 23.1
Inventory costing method change tax 2.6 2.6 - - - - -
Totals $ 579.9 $ 42.3 $ 206.3 $ 41.1 $ 39.1 $ 12.7 $ 238.4
The significant obligations table does not include obligations to taxing authorities due to uncertainty surrounding the ultimate settlement of amounts and timing of these obligations.
We expect to meet our future debt service obligations through cash provided by operations. Interest payments on fixed rate debt over the next five years are excluded from the table above and are expected to be approximately $9.6 million in 2025, $9.4 million in 2026, $9.1 million in 2027, $7.5 million in 2028 and $6.0 million in 2029. We expect total interest expense for 2025 to be in the range of $24 million to $27 million.
The Company had outstanding bank guarantees and standby letters of credit with banks as of December 31, 2024 totaling $9.5 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 December 31, 2024, the Company has $0.5 million of restricted cash in support of these arrangements.
We expect to make net contributions between $6 million and $8 million to our pension plans in 2025, which are primarily associated with our International segment. We have not been required to make contributions to our U.S. based qualified defined benefit pension plan in many years.
We have purchase commitments for materials, supplies, services and property, plant and equipment as part of our ordinary conduct of business.
Please refer to Note 20-Contingencies to the consolidated financial statements in Part II Item 8 of this Form 10-K for further discussion on the Company's product liabilities.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
We prepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles (U.S. GAAP). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosures. We evaluate these estimates and judgments on an on-going basis based on historical experience and various assumptions that we believe to be reasonable under the circumstances. However, different amounts could be reported if we had used different assumptions and in light of different facts and circumstances. Actual amounts could differ from the estimates and judgments reflected in our consolidated financial statements. A summary of the Company's significant accounting policies is included in Note 1-Significant Accounting Policies to the consolidated financial statements in Part II, Item 8 of this Form 10-K.
The more critical judgments and estimates used in the preparation of our consolidated financial statements are discussed below.
Income taxes. We recognize deferred tax assets and liabilities using enacted tax rates to record the tax effect of temporary differences between the book and tax basis of recorded assets and liabilities. We record valuation allowances to reduce deferred tax assets to the amounts that we estimate are probable to be realized. When assessing the need for valuation allowances, we consider projected future taxable income and prudent and feasible tax planning strategies. Should a change in circumstances lead to a change in our judgments about the realizability of deferred tax assets in future years, we adjust the related valuation allowances in the period that the change in circumstances occurs.
We record an estimated income tax liability based on our best judgment of the amounts likely to be paid in the various tax jurisdictions in which we operate. We record tax benefits related to uncertain tax positions taken or expected to be taken on a tax return when such benefits meet a more likely than not threshold. We recognize interest related to unrecognized tax benefits in interest expense and penalties in operating expenses. The tax liabilities ultimately paid are dependent on a number of factors, including the resolution of tax audits, and may differ from the amounts recorded. Tax liabilities are adjusted through income when it becomes probable that the actual liability differs from the amount recorded.
Pensions and other post-retirement benefits. We sponsor certain pension and other post-retirement benefit plans. Accounting for the net periodic benefit costs and credits for these plans requires us to estimate the cost of benefits to be provided well into the future and to attribute these costs over the expected work life of the employees participating in these plans. These estimates require our judgment about discount rates used to determine these obligations, expected returns on plan assets, rates of future compensation increases, rates of increase in future health care costs, participant withdrawal and mortality rates and participant retirement ages. Differences between our estimates and actual results may significantly affect the cost of our obligations under these plans and could cause net periodic benefit costs and credits to change materially from year-to-year. Discount rates and plan asset valuations are point-in-time measures. The discount rate assumptions used in determining projected benefit obligations for our U.S. and foreign plans were based on the spot rate method at December 31, 2024. Expected returns on plan assets are based on capital market expectations by asset class.
The following table summarizes the impact of changes in significant actuarial assumptions on our December 31, 2024, actuarial valuations:
Impact of Changes in Actuarial Assumptions
Change in Discount
Rate Change in Expected
Return Change in Market Value of Assets
(In thousands) 1% (1)% 1% (1)% 5% (5)%
(Decrease) increase in net benefit cost $ (1,029) $ 2,135 $ (5,981) $ 5,980 $ (486) $ 466
(Decrease) increase in projected benefit obligation (51,948) 63,107 - - - -
Increase (decrease) in funded status 51,948 (63,107) - - 29,849 (29,849)
Goodwill and Indefinite-lived Intangible Assets. On October 1st of each year, or more frequently if indicators of impairment exist or if a decision is made to sell a business, we evaluate goodwill for impairment. Such indicators may include a decline in expected cash flows, a significant adverse change in the business climate, unanticipated competition, slower growth rates, or negative developments in equity and credit markets, among others.
All goodwill is assigned to and evaluated for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment. The evaluation of impairment involves using either a qualitative or quantitative approach as outlined in Accounting Standards Codification ("ASC") Topic 350. In 2024, we performed a quantitative test at October 1, 2024. Quantitative testing involves comparing the estimated fair value of each reporting unit to its carrying value. We estimate reporting unit fair value using a weighted average of fair values determined by discounted cash flow ("DCF") and market approach methodologies, as we believe both are important indicators of fair value. A number of assumptions and estimates are involved in the application of the DCF model, including sales volumes and prices, costs to produce, tax rates, capital spending, discount rates, and working capital changes. Cash flow forecasts are generally based on approved business unit operating plans for the early years and historical relationships in later years. The market approach methodology measures value through an analysis of peer companies. The analysis entails measuring the multiples of EBITDA at which peer companies are trading.
In the event the carrying value is in excess of the estimated fair value of a reporting unit per the weighted average of the DCF and market approach models, an impairment loss equal to such excess would be recognized, which could materially and adversely affect reported consolidated results of operations and shareholders’ equity. At October 1, 2024, based on our quantitative test, the fair values of each of our reporting units exceeded their respective carrying value by at least 70%.
The intangible asset with an indefinite life is also subject to impairment testing on October 1st of each year, or more frequently if indicators of impairment exist. The impairment test compares the fair value of the intangible asset with its carrying amount. We perform a quantitative assessment of the indefinite lived trade name intangible asset as outlined in ASC 350 by comparing the estimated fair value of the trade name intangible asset to its carrying value. We estimate the fair value using the relief from royalty income approach. A number of significant assumptions and estimates are involved in the application of the relief from royalty model, including sales volumes and prices, royalty rates and tax rates. Forecasts are based on sales generated by the underlying trade name assets and are generally based on approved business unit operating plans for the early years and historical relationships in later years. At October 1, 2024, based on our quantitative test, the fair value of the trade name asset exceeded its carrying value by 57%.
RECENTLY ISSUED ACCOUNTING STANDARDS AND DISCLOSURE RULES
In December 2023, the FASB issued ASU No. 2023-09 (“ASU 2023-09”), Improvements to Income Tax Disclosures. ASU 2023-09 requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. This standard also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for public business entities, for annual periods beginning after December 15, 2024. With the exception of expanding disclosures, we do not expect the adoption of ASU 2023-09 to have a material effect on our consolidated financial statements taken as a whole.
In March 2024, the U.S. Securities and Exchange Commission (the "SEC") adopted the final rule under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors. This rule would require registrants to disclose certain climate-related information in registration statements and annual reports. In April 2024, the SEC voluntarily stayed the final rule as a result of pending legal challenges. The disclosure requirements would apply to the Company's fiscal year ended December 31, 2025, pending resolution of the stay. The Company is currently evaluating the final rule to determine its impact on the Company's disclosures.
In November 2024, the FASB issued ASU No. 2024-03 (“ASU 2024-03”), Disaggregation of Income Statement Expenses (“DISE”). ASU 2024-03 requires disaggregated disclosure of income statement expenses for public business entities. ASU 2024-03 does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. As revised by ASU No. 2025-01, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures, the provisions of ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. With the exception of expanding disclosures to include more granular income statement expense categories, we do not expect the adoption of ASU 2024-03 to have a material effect on our consolidated financial statements taken as a whole.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market risk represents the risk of adverse changes in the value of a financial instrument caused by changes in currency exchange rates, interest rates and equity prices. We are exposed to market risks related to currency exchange rates and interest rates.
Currency exchange rates. We are subject to the effects of fluctuations in currency exchange rates on various transactions and on the translation of the reported financial position and operating results of our non-U.S. companies from local currencies to U.S. dollars. A hypothetical 10% strengthening or weakening of the U.S. dollar would increase or decrease our reported sales and net income for the year ended December 31, 2024, by approximately $71.6 million and $10.6 million, or 4.0% and 3.7%, respectively.
When appropriate, we may attempt to limit our transactional exposure to changes in currency exchange rates through forward contracts or other actions intended to reduce existing exposures by creating offsetting currency exposures. At December 31, 2024, we had open foreign currency forward contracts with a U.S. dollar notional value of $184.0 million. A hypothetical 10% increase in December 31, 2024, forward exchange rates would result in a $18.4 million increase in the fair value of these contracts.
Interest rates. We are exposed to changes in interest rates primarily as a result of borrowing and investing activities used to maintain liquidity and fund business operations. Because of the variable rate nature of our revolving credit facility, these financial instruments are reported at carrying values which approximate fair values.
At December 31, 2024, we had $303.5 million of fixed rate debt which matures at various dates through 2036. The incremental increase in the fair value of fixed rate long-term debt resulting from a hypothetical 10% decrease in interest rates would be approximately $6.7 million. However, our sensitivity to interest rate declines and the corresponding increase in the fair value of our debt portfolio would unfavorably affect earnings and cash flows only to the extent that we elected to repurchase or retire all or a portion of our fixed rate debt portfolio at prices above carrying values.
At December 31, 2024, we had $206.3 million of variable rate borrowings on a term loan under our revolving credit facility. A 50 basis point increase or decrease in interest rates could have a $1.0 million impact on future pre-tax earnings under our current capital structure.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data
Management’s Reports to Shareholders
Management’s Report on Responsibility for Financial Reporting
Management of MSA Safety Incorporated (the Company) is responsible for the preparation of the consolidated financial statements included in this annual report. The consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America and include amounts that are based on the best estimates and judgments of management. The other financial information contained in this annual report is consistent with the consolidated financial statements.
Management’s Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
The Company’s internal control over financial reporting includes policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on our financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on our assessment and those criteria, management has concluded that the Company maintained effective internal control over financial reporting as of December 31, 2024.
The Company's Independent registered public accounting firm that audited the consolidated financial statements included in this annual report issued an attestation report on the Company's internal control over financial reporting.
/s/ STEVEN C. BLANCO
Steven C. Blanco
President and Chief Executive Officer
/s/ LEE B. MCCHESNEY
Lee B. McChesney
Senior Vice President and Chief Financial Officer
February 14, 2025
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of MSA Safety Incorporated
Opinion on Internal Control over Financial Reporting
We have audited MSA Safety Incorporated’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, MSA Safety Incorporated (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, cash flows, and changes in retained earnings, accumulated other comprehensive loss for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a) 2 and our report dated February 14, 2025, expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Pittsburgh, Pennsylvania
February 14, 2025
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of MSA Safety Incorporated
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of MSA Safety Incorporated (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, cash flows, and changes in retained earnings, accumulated other comprehensive loss for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a) 2 (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 14, 2025, expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Valuation of Goodwill
Description of the Matter At December 31, 2024, the Company had goodwill of approximately $620.9 million. As discussed in Notes 1 and 14 to the consolidated financial statements, the Company evaluates goodwill for impairment at least annually or whenever events or changes in circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company performed a quantitative impairment assessment for each reporting unit as of October 1, 2024. The Company estimated the fair value of each reporting unit using a combination of valuation techniques including the discounted cash flow method, a form of the income approach, and the guideline public company method, a form of the market approach.
Auditing management’s annual goodwill impairment assessments was challenging and required additional audit effort due to the use of valuation methodologies in the determination of the estimated fair values of the reporting units. These fair value estimates are impacted by assumptions such as discount rates, revenue growth rates, and operating margins which are affected by expectations about future market or economic conditions.
How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment process whereby the Company develops assumptions that are used as inputs to the annual goodwill impairment tests. This included controls over management’s review of the valuation models and the assumptions, described above.
To test the fair value of the Company’s reporting units, we performed audit procedures that included, among others, assessing the valuation methodologies, testing the assumptions, and testing the completeness and accuracy of the underlying data. We involved our internal valuation specialists in assessing the fair value methodologies applied and evaluating the reasonableness of certain assumptions selected by management. We performed sensitivity analyses of assumptions to evaluate the changes in the fair value of the reporting units that would result from changes in the assumptions. We tested management’s reconciliation of the fair value of the reporting units to the market capitalization of the Company. We also assessed the appropriateness of the disclosures in the consolidated financial statements.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2014.
Pittsburgh, Pennsylvania
February 14, 2025
MSA SAFETY INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
Year ended December 31,
(In thousands, except per share amounts) 2024 2023 2022
Net sales $ 1,808,140 $ 1,787,647 $ 1,527,953
Cost of products sold 947,695 935,509 854,122
Gross profit 860,445 852,138 673,831
Selling, general and administrative 394,707 396,645 338,872
Research and development 66,526 67,988 57,012
Restructuring charges (Note 4) 6,397 9,892 7,965
Currency exchange losses, net 3,638 17,079 10,255
Loss on divestiture of MSA LLC (Note 20) - 129,211 -
Product liability expense (Note 20) - 3 20,590
Operating income 389,177 231,320 239,137
Interest expense 36,889 46,733 21,660
Other income, net (Note 16) (22,718) (22,101) (21,056)
Total other expense, net 14,171 24,632 604
Income before income taxes 375,006 206,688 238,533
Provision for income taxes (Note 11) 90,039 148,105 58,903
Net income $ 284,967 $ 58,583 $ 179,630
Earnings per share attributable to common shareholders (Note 10):
Basic $ 7.24 $ 1.49 $ 4.58
Diluted $ 7.21 $ 1.48 $ 4.56
Dividends per common share $ 2.00 $ 1.87 $ 1.82
The accompanying notes are an integral part of the consolidated financial statements.
MSA SAFETY INCORPORATED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year ended December 31,
(In thousands) 2024 2023 2022
Net income $ 284,967 $ 58,583 $ 179,630
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments (Note 7) (42,462) 21,682 (19,453)
Pension and post-retirement plan actuarial gains, net of tax (Note 7) 31,262 7,683 6,961
Unrealized gains on available-for-sale securities (Note 7) - 2 3
Reclassification of currency translation from accumulated other comprehensive loss into net income (Note 7) (1,200) 101 2,912
Total other comprehensive (loss) income, net of tax (12,400) 29,468 (9,577)
Comprehensive income 272,567 88,051 170,053
The accompanying notes are an integral part of the consolidated financial statements.
MSA SAFETY INCORPORATED
CONSOLIDATED BALANCE SHEETS
December 31,
(In thousands, except share amounts) 2024 2023
Assets
Cash and cash equivalents $ 164,560 $ 146,442
Trade receivables, less allowance for credit loss of $8,047 and $7,065
279,213 294,678
Inventories (Note 5) 296,796 292,604
Prepaid income taxes 18,631 12,912
Prepaid expenses and other current assets 43,830 39,634
Total current assets 803,030 786,270
Property, plant and equipment, net (Note 6) 211,865 211,877
Operating lease right-of-use assets, net (Note 17) 56,083 53,298
Prepaid pension cost (Note 15) 224,638 172,161
Deferred tax assets (Note 11) 26,180 33,065
Goodwill (Note 14) 620,895 627,534
Intangible assets, net (Note 14) 246,437 266,134
Other noncurrent assets 16,656 19,811
Total assets $ 2,205,784 $ 2,170,150
Liabilities
Notes payable and current portion of long-term debt (Note 13) $ 26,391 $ 26,522
Accounts payable 108,163 111,872
Employees’ compensation 54,826 73,386
Income taxes payable (Note 11) 14,966 19,972
Other current liabilities 83,747 101,066
Total current liabilities 288,093 332,818
Long-term debt, net (Note 13) 481,622 575,170
Pensions (Note 15) and other employee benefits 134,251 143,967
Noncurrent operating lease liabilities (Note 17) 45,984 44,495
Deferred tax liabilities (Note 11) 107,691 102,419
Other noncurrent liabilities 4,824 4,479
Total liabilities $ 1,062,465 $ 1,203,348
Shareholders' Equity
Preferred stock, 4.5% cumulative, $50 par value (Note 8)
$ 3,569 $ 3,569
Common stock, no par value (180,000,000 shares authorized; 62,081,391 shares issued; 39,260,080 and 39,317,212 shares outstanding at December 31, 2024 and 2023, respectively)
329,953 312,324
Treasury shares, at cost (Note 8) (398,204) (363,284)
Accumulated other comprehensive loss (Note 7) (141,649) (129,249)
Retained earnings 1,349,650 1,143,442
Total shareholders’ equity 1,143,319 966,802
Total liabilities and shareholders’ equity $ 2,205,784 $ 2,170,150
The accompanying notes are an integral part of the consolidated financial statements.
MSA SAFETY INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended December 31,
(In thousands) 2024 2023 2022
Operating Activities
Net income $ 284,967 $ 58,583 $ 179,630
Depreciation and amortization 64,333 60,773 56,317
Tax-effected loss on divestiture of MSA LLC (Note 20) - 199,578 -
Stock-based compensation (Note 12) 18,185 30,023 19,650
Pension income (Note 15) (8,147) (7,915) (11,499)
Deferred income tax (benefit) provision (Note 11) (98) (8,514) 5,171
Loss on asset write-down and dispositions, net 819 173 6,290
Pension contributions (Note 15) (7,877) (5,217) (5,032)
Currency exchange losses, net (Note 7) 3,638 17,079 10,255
Product liability expense (Note 20) - 3 20,590
Collections on insurance receivable and notes receivable,
insurance companies (Note 20) - - 9,516
Product liability payments (Note 20) - (5,250) (36,755)
Contribution on divestiture of MSA LLC (Note 20) - (341,186) -
Changes in:
Trade receivables
(1,383) (7,102) (38,587)
Inventories (Note 5) (14,673) 51,585 (67,366)
Accounts payable 3,057 (5,452) 7,585
Other current assets and liabilities (49,087) 53,509 (1,795)
Other noncurrent assets and liabilities
2,694 2,187 3,485
Cash Flow From Operating Activities 296,428 92,857 157,455
Investing Activities
Capital expenditures (54,223) (42,764) (42,553)
Purchase of short-term investments (Note 19) - - (79,542)
Proceeds from maturities of short-term investments (Note 19) - - 119,000
Property disposals and other investing 468 2,811 (1,389)
Cash Flow Used In Investing Activities (53,755) (39,953) (4,484)
Financing Activities
Payments on long-term debt (Note 13) (1,243,897) (1,871,102) (1,023,000)
Proceeds from long-term debt (Note 13) 1,149,643 1,895,000 1,010,000
Debt issuance costs (200) (1,138) -
Cash dividends paid (78,759) (73,488) (71,497)
Company stock purchases (Note 8) (37,340) (3,961) (34,394)
Exercise of stock options (Note 8) 501 1,473 4,650
Employee stock purchase plan (Note 8) 1,363 963 891
Cash Flow Used In Financing Activities (208,689) (52,253) (113,350)
Effect of exchange rate changes on cash, cash equivalents and restricted cash (17,295) (16,671) (16,631)
Change in cash, cash equivalents and restricted cash 16,689 (16,020) 22,990
Beginning cash, cash equivalents and restricted cash 148,408 164,428 141,438
Ending cash, cash equivalents and restricted cash $ 165,097 $ 148,408 $ 164,428
Supplemental cash flow information:
Cash and cash equivalents $ 164,560 $ 146,442 $ 162,902
Restricted cash included in prepaid expenses and other current assets 537 1,966 1,526
Total cash, cash equivalents and restricted cash $ 165,097 $ 148,408 $ 164,428
Interest paid in cash $ 35,703 $ 47,258 $ 20,740
Income tax paid in cash $ 102,673 $ 69,085 $ 60,491
The accompanying notes are an integral part of the consolidated financial statements.
MSA SAFETY INCORPORATED
CONSOLIDATED STATEMENTS OF CHANGES IN RETAINED EARNINGS
AND ACCUMULATED OTHER COMPREHENSIVE LOSS
(In thousands, except per share amounts) Retained
Earnings Accumulated
Other
Comprehensive
Loss
Balances at January 1, 2022 $ 1,050,214 $ (149,140)
Net income 179,630 -
Foreign currency translation adjustments - (19,453)
Pension and post-retirement plan adjustments, net of $2,570 tax benefit
- 6,961
Unrecognized net gains on available-for-sale securities (Note 19) - 3
Reclassification of currency translation from accumulated other comprehensive loss into net income (Note 7) - 2,912
Common dividends ($1.82 per share)
(71,456) -
Preferred dividends ($2.25 per share)
(41) -
Balances at December 31, 2022 1,158,347 (158,717)
Net income 58,583 -
Foreign currency translation adjustments - 21,682
Pension and post-retirement plan adjustments, net of $1,706 tax benefit
- 7,683
Unrecognized net gains on available-for-sale securities (Note 19) - 2
Reclassification of currency translation from accumulated other comprehensive loss into net income (Note 7) - 101
Common dividends ($1.87 per share)
(73,447) -
Preferred dividends ($2.25 per share)
(41) -
Balances at December 31, 2023 1,143,442 (129,249)
Net income 284,967 -
Foreign currency translation adjustments - (42,462)
Pension and post-retirement plan adjustments, net of $10,227 tax benefit
- 31,262
Reclassification of currency translation from accumulated other comprehensive loss into net income (Note 7) - (1,200)
Common dividends ($2.00 per share)
(78,718) -
Preferred dividends ($2.25 per share)
(41) -
Balances at December 31, 2024 $ 1,349,650 $ (141,649)
The accompanying notes are an integral part of the consolidated financial statements.
MSA SAFETY INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1-Significant Accounting Policies
General Information and Basis of Presentation-The consolidated financial statements of MSA Safety Incorporated ("MSA" or "the Company") are prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") and require management to make certain judgments, estimates, and assumptions. These may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements. They also may affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates upon subsequent resolution of identified matters.
Principles of Consolidation-The consolidated financial statements include the accounts of the Company and all subsidiaries. Intercompany accounts and transactions are eliminated.
Reclassifications-Certain reclassifications of prior years' results have been made to conform to the current year presentation. These reclassifications relate to aligning prior year deferred tax and accrued warranty reserve with current year presentation within our disclosures.
Currency Translation-The functional currency of all significant non-U.S. operating subsidiaries is the local country currency. Assets and liabilities of these operations are translated at year-end exchange rates. Income statement accounts are translated using the average exchange rates for the reporting period. Translation adjustments for these subsidiaries are reported as a component of shareholders’ equity and are not included in net income. Foreign currency transaction gains and losses are included in net income for the reporting period.
Cash Equivalents-Cash equivalents include temporary deposits with financial institutions and highly liquid investments with original maturities of 90 days or less.
Restricted Cash-Restricted cash, which is designated for use other than current operations, is included in prepaid expenses and other current assets in the Consolidated Balance Sheets. Restricted cash balances were $0.5 million and $2.0 million at December 31, 2024 and 2023, respectively. These balances were used to support letter of credit balances.
Inventories-Inventories are stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out ("FIFO") method. It is the Company's general policy to write-down any inventory balance in excess of the last 24 months of consumption and any inventory identified as obsolete.
Property and Depreciation-Property is recorded at cost. Depreciation is computed primarily using the straight-line method over the estimated useful lives of the assets, generally as follows: buildings 20 to 40 years, and machinery and equipment 3 to 10 years. Expenditures for significant renewals and improvements are capitalized. Ordinary repairs and maintenance are expensed as incurred. Gains or losses on property dispositions are included in other expense (income), net and the cost and related accumulated depreciation are removed from the accounts. Depreciation expense for the years ended December 31, 2024, 2023 and 2022 was $45.6 million, $41.8 million and $36.7 million, respectively. Properties, plant, and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets or asset groups may not be recoverable.
Software Development Costs-Software development costs are costs incurred to create, enhance and deploy the Company’s broad range of wireless technology and cloud-based computing safety services. Software development costs, other than software development costs qualifying for capitalization, are expensed as incurred. Costs of computer software developed or obtained for internal use that are incurred in the preliminary project and post implementation stages are expensed as incurred. Certain costs incurred during the application and development stage, which primarily include compensation and related expenses, are capitalized. Additionally, costs of upgrades and enhancements are capitalized when it is probable that the upgrades and enhancements will result in added functionality. During 2024, 2023 and 2022, respectively, there was $13.0 million, $12.1 million and $8.7 million of software development costs capitalized. The Company has unamortized computer software development costs of $19.9 million and $18.2 million as of December 31, 2024 and 2023, respectively, included in property, plant and equipment, net.
Capitalized costs are amortized through cost of products sold using the straight-line method over the estimated useful life, which is normally three years, beginning in the period in which the software is ready for its intended use or when the upgrade or enhancement is deployed. Software development amortization expense was $11.3 million, $10.4 million and $7.9 million during the years ended December 31, 2024, 2023 and 2022, respectively.
Lessee Arrangements-At the inception of our contracts, we determine if the contract is or contains a lease. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. We have elected to not separate the lease and non-lease components within our lease contracts. Right-of-use assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at commencement. We use our incremental borrowing rate ("IBR") at the recognition date in determining the present value of future payments for leases that do not have a readily determinable implicit rate. Our IBR reflects a fully secured rate based on our credit rating, taking into consideration the repayment timing of the lease and any impacts due to the economic environment in which the lease operates.
Our lease payments are largely fixed. Variable lease payments that depend on an index or a rate are included in the lease payments and are measured using the prevailing index or rate at the measurement date, with differences between the calculated lease payment and the actual lease payment being expensed in the period of the change. Other variable lease payments, including utilities, consumption and common area maintenance as well as repairs, maintenance and mileage overages on vehicles, are expensed during the period incurred. A majority of our real estate leases include options to extend the lease and options to early terminate the lease. Leases with an early termination option generally involve a termination payment. If we are reasonably certain to exercise an option to extend a lease, the extension period is included as part of the right-of-use asset and the lease liability. Some of our leases contain residual value guarantees. These are guarantees made to the lessor that the value of an underlying asset returned to the lessor at the end of a lease will be at least a specified amount. Our leases do not contain restrictions or covenants that restrict us from incurring other financial obligations. For our leases, we have elected to not apply the recognition requirements to leases of less than twelve months. These leases are expensed on a straight-line basis and are not included within the Company's operating lease asset or liability.
Lease right-of-use assets and liabilities are recognized based on the present value of the fixed future lease payments over the lease term. Operating leases are included in Operating lease right-of-use assets, net, Other current liabilities, and Noncurrent operating lease liabilities in our Consolidated Balance Sheets. Finance leases are included in Property, plant and equipment, net, Other current liabilities, and Product liability and other noncurrent liabilities in our Consolidated Balance Sheets. Lease expense for all operating leases is classified in Cost of products sold or Selling, general and administrative expense in the Consolidated Statements of Income. For finance leases, the amortization of the right-of-use asset is included in depreciation and amortization, and the interest is included in interest expense.
Lessor Arrangements-The Company derives a portion of its revenue from various leasing arrangements where the Company is the lessor, primarily managed fire service contracts. Such arrangements provide for payments covering equipment provided, maintenance and interest. These arrangements meet the criteria to be accounted for as sales-type leases under ASC 842 and contain both lease and non-lease components. For a component to be separate, the customer would be able to benefit from the right of use of the component separately or with other resources readily available to the customer and the right of the use is not highly dependent or highly interrelated with the other rights to use the other underlying assets or components.
Revenue from equipment provided is considered a lease component and recognized with point in time revenue recognition upon lease commencement. Upon the recognition of such revenue, an asset is established for the investment in sales-type leases. Maintenance revenue, which is considered a non-lease component, and interest is recognized over the lease term.
Goodwill and Other Intangible Assets-Intangible assets with a finite useful life are amortized on a straight-line basis over their useful lives. Indefinite lived intangible assets are assessed for possible impairment annually on October 1st or whenever circumstances change such that the recorded value of the asset may not be recoverable. We performed a quantitative assessment of the indefinite lived trade name intangible asset as outlined in ASC 350 by comparing the estimated fair value of the trade name intangible asset to its carrying value. We estimate the fair value using the relief from royalty income approach. A number of assumptions and estimates are involved in the application of the relief from royalty model, including sales volumes and prices, royalty rates and tax rates. Forecasts are based on sales generated by the underlying trade name assets and are generally based on approved business unit operating plans for the early years and historical relationships in later years. Based on these assessments, no impairments were identified during the years ended December 31, 2024, 2023 or 2022.
All goodwill is assigned to and evaluated for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment. Goodwill is not amortized, but evaluated for impairment at least annually or whenever events or changes in circumstance indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company may perform either a qualitative assessment of potential impairment or proceed directly to a quantitative assessment of potential impairment. If the Company chooses not to perform a qualitative assessment, or if it chooses to perform a qualitative assessment but is unable to qualitatively conclude that no impairment has occurred, then the Company will perform a quantitative assessment. A quantitative test for goodwill impairment is performed by determining the fair value of the related reporting units.
The Company estimates the fair value of the reporting unit with which the goodwill is associated and compares it to the carrying value. If the estimated fair value of a reporting unit is less than its carrying value, an impairment charge is recognized for the excess of the reporting unit's carrying value over its fair value. In 2024, we performed a quantitative test at October 1, 2024. We estimate fair value of each reporting unit using a combination of valuation techniques, including the discounted cash flow ("DCF") method, a form of the income approach, and the guideline public company method, a form of the market approach, as we believe each are important indicators of fair value. A number of assumptions and estimates are involved in the application of the DCF model, such as discount rates, revenue growth rates, and operating margins which are affected by expectations about future market or economic conditions. Cash flow forecasts are generally based on approved reporting unit operating plans for the early years and historical relationships in later years. The market approach methodology measures value through an analysis of peer companies. The analysis entails measuring the multiples of earnings before interest, taxes, depreciation and amortization ("EBITDA") at which peer companies are trading. Management performed its evaluation and determined the fair value of each reporting unit is greater than the carrying amount and, accordingly, the Company has not recorded any impairment charges related to goodwill.
There has been no impairment of our goodwill during the years ended December 31, 2024, 2023 or 2022.
Revenue Recognition-We account for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. Revenue from the sale of products and solutions is recognized when there is persuasive evidence of an arrangement and control passes to the customer. We establish our shipping terms according to local practice and market characteristics. We do not ship product unless we have an order or other documentation authorizing shipment to our customers. Our payment terms vary by the type and location of our customer and the products and solutions offered. The term between invoicing and when payment is due is not significant. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Amounts billed and due from our customers are classified as receivables on the Consolidated Balance Sheets. We make appropriate provisions for credit losses, which have historically been insignificant in relation to our net sales. Certain contracts with customers have an element of variable consideration that is estimated when revenue is recognized under the contract to the extent that it is material to the individual contract. Rebates are based on achieving a certain level of purchases and other performance criteria that are documented in established distributor programs. These rebates are estimated based on projected sales to the customer and accrued as a reduction of net sales as they are earned by the customer. Sales, value add and other taxes collected with revenue-producing activities and remitted to governmental authorities are excluded from revenue.
Refer to Note 2-Revenue Recognition for additional disclosures on revenue recognition matters.
Product Warranties-Estimated expenses related to product warranties and additional service actions are charged to Cost of products sold in the period in which the related revenue is recognized or when significant product quality issues are identified.
Research and Development-Research and development costs are expensed as incurred.
Income Taxes-Deferred income taxes are recognized for temporary differences between financial and tax reporting. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. We record tax benefits related to uncertain tax positions taken or expected to be taken on a tax return when such benefits meet a more likely than not threshold. We recognize interest related to unrecognized tax benefits in interest expense and penalties in operating expenses. Deferred taxes are booked for available cash in excess of working capital for non-U.S. subsidiaries as these earnings are not considered to be permanently reinvested. The Company treats any Global Intangible Low Taxed Income as a period cost.
Stock-Based Compensation-We recognize expense for employee and non-employee director stock-based compensation based on the grant date fair value of the awards. Except for retirement-eligible participants, for whom there is no requisite service period, this expense is recognized ratably over the requisite service periods following the date of grant.
Derivative Instruments-We may use derivative instruments from time to time to minimize the effects of changes in currency exchange rates. We do not enter into derivative transactions for speculative purposes and do not hold derivative instruments for trading purposes. Changes in the fair value of derivative instruments designated as fair value hedges are recorded in the balance sheet as adjustments to the underlying hedged asset or liability. Changes in the fair value of derivative instruments that do not qualify for hedge accounting treatment are recognized in the Consolidated Statements of Income and Consolidated Statements of Cash Flows as Currency exchange losses, net in the current period.
Commitments and Contingencies-For asserted claims and assessments, liabilities are recorded when a loss is deemed to be probable and the amount of the loss is reasonably estimable. Management assesses the probability of an unfavorable outcome with respect to asserted claims or assessments based on many factors such as the nature of the matter, available defenses and case strategy, progress of the matter, views and opinions of legal counsel and other advisors, applicability and success of appeals processes, and the outcome of similar historical matters, among others. Once an unfavorable outcome is assessed to be probable, management evaluates estimates of the potential loss, and the most reasonable loss estimate is recorded (or, if the estimate of the loss is a range, and no amount within the range is considered to be a better estimate than any other amount, the minimum amount in the range is recorded). If a material loss is deemed to be reasonably possible but not probable, the matter is disclosed and no liability is recorded.
With respect to unasserted claims or assessments, management first determines whether it is probable that a claim or assessment may be asserted and then, if so, the degree of probability of an unfavorable outcome. If an unfavorable outcome is probable, management assesses whether the amount of potential loss can be reasonably estimated and, if so, accrues the most reasonable estimate of the loss (or, if the estimate of the loss is a range, and no amount within the range is considered to be a better estimate than any other amount, the minimum amount in the range is recorded). If an unfavorable outcome is reasonably possible but less than probable, or the amount of loss cannot be reasonably estimated, then the matter is disclosed and no liability is recorded. Legal matters are reviewed on a continuous basis to determine if there has been a change in management’s judgment regarding the likelihood and/or estimate of a potential loss. Refer to Note 20-Contingencies for further details on product liability related matters.
Concentration of credit and business risks-We sell to customers in a broad mix of industries and are exposed to credit risk in the event of nonpayment. Changes in these industries or other developments may significantly affect our financial performance and management's estimates. We mitigate our exposure to credit risk by performing ongoing credit evaluations and, when deemed necessary, requiring letters of credit, credit insurance, prepayments, guarantees or other collateral. No individual customer represented more than 10% of our receivables as of December 31, 2024, or 2023, or sales for any of the three years ended December 31, 2024.
Recently Issued Accounting Standards and Disclosure Rules-In December 2023, the FASB issued ASU No. 2023-09 (“ASU 2023-09”), Improvements to Income Tax Disclosures. ASU 2023-09 requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. This standard also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for public business entities, for annual periods beginning after December 15, 2024. With the exception of expanding disclosures, we do not expect the adoption of ASU 2023-09 to have a material effect on our consolidated financial statements taken as a whole.
In March 2024, the U.S. Securities and Exchange Commission (the "SEC") adopted the final rule under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors. This rule would require registrants to disclose certain climate-related information in registration statements and annual reports. In April 2024, the SEC voluntarily stayed the final rule as a result of pending legal challenges. The disclosure requirements would apply to the Company's fiscal year ended December 31, 2025, pending resolution of the stay. The Company is currently evaluating the final rule to determine its impact on the Company's disclosures.
In November 2024, the FASB issued ASU No. 2024-03 (“ASU 2024-03”), Disaggregation of Income Statement Expenses (“DISE”). ASU 2024-03 requires disaggregated disclosure of income statement expenses for public business entities. ASU 2024-03 does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. As revised by ASU No. 2025-01, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures, the provisions of ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. With the exception of expanding disclosures to include more granular income statement expense categories, we do not expect the adoption of ASU 2024-03 to have a material effect on our consolidated financial statements taken as a whole.
Note 2-Revenue Recognition
We generate revenue primarily from manufacturing and selling a comprehensive line of safety products and solutions to protect the health and safety of workers and facility infrastructures around the world. Our customers generally fall into two categories: distributors and industrial or end-users. All customer categories have similar nature, timing and uncertainty related to cash flows. As a result, the underlying principles of revenue recognition are identical for both categories of customers.
We account for revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue from the sale of products and solutions is recognized when there is persuasive evidence of an arrangement and control passes to the customer, which generally occurs either when product is shipped to the customer or, in the case of certain customers, when product is delivered to the customer's site. We establish our shipping terms according to local practice and market characteristics. We do not ship product unless we have an order or other documentation authorizing shipment to our customers. Our payment terms vary by the type and location of our customer and the products and solutions offered; however, in most cases, the term between invoicing and when payment is due is not significant.
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Amounts billed and due from our customers are classified as receivables on the Consolidated Balance Sheets. We make appropriate provisions for credit losses, which have historically been insignificant in relation to our net sales. Certain contracts with customers may have an element of variable consideration that is estimated when revenue is recognized under the contract to the extent that it is material to the individual contract. Variable consideration could include volume incentive rebates and performance guarantees. Rebates are based on achieving a certain level of purchases and other performance criteria that are documented in established distributor programs. These rebates are estimated based on projected sales to the customer and accrued as a reduction of net sales as they are earned by the customer. Sales, value add and other taxes collected with revenue-producing activities and remitted to governmental authorities are excluded from revenue.
Depending on the terms of the arrangement, we may defer revenue for which we have a future obligation, which may include leases where the Company is the lessor, training, extended warranty, software subscriptions, maintenance and technical services, until such time that the obligation has been satisfied. We use an observable price, or a cost plus margin approach when one is not available, to determine the stand-alone selling price for separate performance obligations. We have elected to recognize the cost for shipping and handling as an expense when control of the product has passed to the customer. These costs are included within the Cost of products sold line on the Consolidated Statements of Income. Amounts billed to customers for shipping and handling are included in net sales.
Performance Obligations
The Company recognizes revenue when performance obligations identified under the terms of the contract with its customers are satisfied, which generally occurs upon the transfer of control in accordance with the contractual terms and conditions of sale. For most contracts with customers, this results in point-in-time revenue recognition once contractual shipping terms are fulfilled.
Disaggregation of Revenue
Refer to Note 9-Segment Information to the consolidated financial statements in Part II Item 8 of this Form 10-K for disaggregation of revenue by segment and product category, as we believe this best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.
Lessor Arrangements
The Company derives a portion of its revenue from various leasing contracts where the Company is the lessor, primarily managed fire service contracts entered by Bristol. Such arrangements provide for recurring payments throughout the contract term. These payments cover equipment provided in addition to several services which include maintenance and interest.
Managed fire service contracts meet the criteria to be accounted for as sales-type leases. Under ASC 842, these contracts contain both lease and non-lease components. For a component to be separate, the customer would be able to benefit from the right of use of the component separately or with other resources readily available to the customer and the right of the use is not highly dependent or highly interrelated with the other rights to use the other underlying assets or components.
For managed fire service contracts, revenue from equipment provided is considered a lease component and recognized with point in time revenue recognition upon lease commencement. Upon the recognition of such revenue, an asset is established for the investment in sales-type leases. Maintenance revenue, which is considered a non-lease component, and interest are recognized monthly over the lease term. As of December 31, 2024, remaining maintenance performance obligations for managed fire service contracts were $25.5 million, which are expected to be recognized to revenue over approximately 3 years.
Lease revenues and interest earned by the Company, included in the Consolidated Statements of Income, were not material to any of the years ended December 31, 2024, 2023 and 2022.
Net investment in sales-type leases of $5.6 million and $11.3 million were included in Prepaid expenses and other current assets and Other noncurrent assets, respectively, in the Consolidated Balance Sheets as of December 31, 2024. These amounts at December 31, 2024, are expected to be collected over the remaining life of each contract.
Practical Expedients and Exemptions
We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.
We do not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less.
We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses in our Consolidated Statements of Income.
Note 3-Cash and Cash Equivalents
Several of the Company's affiliates participate in a notional cash pooling arrangement to manage global liquidity requirements. As part of a master netting arrangement, the participants combine their cash balances in pooling accounts at the same financial institution with the ability to offset bank overdrafts of one participant against positive cash account balances held by another participant. Under the terms of the master netting arrangement, the financial institution has the right, ability and intent to offset a positive balance in one account against an overdrawn amount in another account. Amounts in each of the accounts are unencumbered and unrestricted with respect to use. As such, the net cash balance related to this pooling arrangement is included in Cash and cash equivalents in the Consolidated Balance Sheets.
The Company's net cash pool position consisted of the following:
(In thousands) December 31, 2024
Gross cash pool position $ 73,721
Less: cash pool borrowings (55,582)
Net cash pool position $ 18,139
Note 4-Restructuring Charges
During the years ended December 31, 2024, 2023 and 2022, we recorded restructuring charges of $6.4 million, $9.9 million and $8.0 million, respectively. These charges were primarily related to our ongoing initiatives to adjust our cost structure and improve productivity.
Americas segment restructuring charges of $1.6 million during the year ended December 31, 2024, were related to manufacturing footprint optimization activities. International segment restructuring charges of $3.5 million during the year ended December 31, 2024, were related to ongoing initiatives to optimize our manufacturing footprint and improve productivity as well as management restructuring. Corporate segment restructuring charges of $1.3 million during the year ended December 31, 2024, were related to management restructuring.
Americas segment restructuring charges of $3.1 million during the year ended December 31, 2023, were related to manufacturing footprint optimization activities. International segment restructuring charges of $4.7 million during the year ended December 31, 2023, were related to ongoing initiatives to drive profitable growth and improve productivity. Corporate segment restructuring charges of $2.1 million during the year ended December 31, 2023, were related to footprint optimization activities and management restructuring.
Americas segment restructuring charges of $2.3 million during the year ended December 31, 2022, were related to
various optimization activities. International segment restructuring charges of $5.1 million during the year ended December 31, 2022, were primarily related to the implementation of our new European Shared Service Center in Warsaw, Poland. Corporate segment restructuring charges of $0.6 million during the year ended December 31, 2022, were primarily related to programs to
realign the organization and adjust our operations in response to current business conditions.
Activity and reserve balances for restructuring charges by segment were as follows:
(in millions) Americas International Corporate Total
Reserve balances at January 1, 2022 $ 3.3 $ 17.4 $ 0.3 $ 21.0
Restructuring charges 2.3 5.1 0.6 8.0
Currency translation and other adjustments 0.1 (1.3) - (1.2)
Cash payments / utilization (4.0) (8.4) (0.4) (12.8)
Reserve balances at December 31, 2022 $ 1.7 $ 12.8 $ 0.5 $ 15.0
Restructuring charges 3.1 4.7 2.1 9.9
Currency translation and other adjustments (0.1) 0.1 - -
Cash payments / utilization (3.9) (8.6) (2.6) (15.1)
Reserve balances at December 31, 2023 $ 0.8 $ 9.0 $ - $ 9.8
Restructuring charges 1.6 3.5 1.3 6.4
Currency translation and other adjustments (0.1) (0.3) - (0.4)
Cash payments / utilization (2.1) (9.0) (1.3) (12.4)
Reserve balances at December 31, 2024 $ 0.2 $ 3.2 $ - $ 3.4
Restructuring reserves at December 31, 2024 and 2023 are included in Other current liabilities in our Consolidated Balance Sheets.
Note 5-Inventories
The following table sets forth the components of inventory:
December 31,
(In thousands) 2024 2023
Finished products $ 93,356 $ 88,687
Work in process 13,413 15,378
Raw materials and supplies 190,027 188,539
Total inventories $ 296,796 $ 292,604
Note 6-Property, Plant, and Equipment
The following table sets forth the components of property, plant and equipment:
December 31,
(In thousands) 2024 2023
Land $ 4,235 $ 4,332
Buildings 142,605 141,027
Machinery and equipment 512,894 498,148
Construction in progress 25,451 24,404
Total 685,185 667,911
Less accumulated depreciation (473,320) (456,034)
Property, plant and equipment, net $ 211,865 $ 211,877
Note 7-Reclassifications Out of Accumulated Other Comprehensive Loss
MSA Safety Incorporated
(In thousands) 2024 2023 2022
Pension and other post-retirement benefits(a)
Balance at beginning of period $ (42,652) $ (50,335) $ (57,296)
Unrecognized net actuarial gains (losses) 39,049 8,654 (2,862)
Tax (expense) benefit (9,579) (1,514) 703
Total other comprehensive gain (loss) before reclassifications, net of tax 29,470 7,140 (2,159)
Amounts reclassified from accumulated other comprehensive loss into net income:
Amortization of prior service credit (Note 15) (42) (84) (199)
Recognized net actuarial losses (Note 15) 2,482 812 12,592
Tax benefit (648) (185) (3,273)
Total amount reclassified from accumulated other comprehensive loss, net of tax, into net income 1,792 543 9,120
Total other comprehensive income $ 31,262 $ 7,683 $ 6,961
Balance at end of period $ (11,390) $ (42,652) $ (50,335)
Available-for-sale securities
Balance at beginning of period $ - $ (2) $ (5)
Unrealized gain on available-for-sale securities (Note 19) - 2 3
Balance at end of period $ - $ - $ (2)
Foreign currency translation
Balance at beginning of period $ (86,597) $ (108,380) $ (91,839)
Reclassification of currency translation from accumulated other comprehensive loss into net income(b)
(1,200) 101 2,912
Foreign currency translation adjustments (42,462) 21,682 (19,453)
Balance at end of period $ (130,259) $ (86,597) $ (108,380)
(a)Reclassifications out of accumulated other comprehensive loss and into net income are included in the computation of net periodic pension and other post-retirement benefit costs (refer to Note 15-Pensions and Other Post-retirement Benefits).
(b)Reclassifications out of accumulated other comprehensive loss and into net income relate primarily to the approval of our plan to close certain foreign subsidiaries. The reclassifications are included in Currency exchange losses, net, within the Consolidated Statements of Income.
Note 8-Capital Stock
Preferred Stock-The Company has authorized 100,000 shares of $50 par value 4.5% cumulative preferred nonvoting stock which is callable at $52.50. There were 71,340 shares issued and 52,998 shares held in treasury at both December 31, 2024 and 2023. The Treasury shares at cost line of the Consolidated Balance Sheets includes $1.8 million related to preferred stock. There were no shares of preferred stock purchased and subsequently held in treasury during the years ended December 31, 2024, or 2023. The Company has also authorized 1,000,000 shares of $10 par value second cumulative preferred voting stock. No shares have been issued as of December 31, 2024 or 2023.
Common Stock-The Company has authorized 180,000,000 shares of no par value common stock. There were 62,081,391 shares issued as of December 31, 2024 and December 31, 2023. There were 39,260,080 and 39,317,212 shares outstanding at December 31, 2024 and 2023, respectively.
Treasury Shares-The Company's 2024 stock repurchase program authorizes up to $200.0 million to repurchase MSA common stock in the open market and in private transactions. The share repurchase program has no expiration date. The maximum number of shares that may be purchased is calculated based on the dollars remaining under the program and the respective month-end closing share price. Under this and prior stock repurchase programs, there were 166,292 shares repurchased during 2024, no shares repurchased during 2023, and 251,408 shares repurchased during 2022. There were 22,821,311 and 22,764,179 Treasury shares at December 31, 2024 and 2023, respectively.
The Company issues Treasury shares for all stock based benefit plans. Shares are issued from Treasury at the average Treasury share cost on the date of the transaction. There were 149,179 and 132,797 Treasury shares issued for these purposes during the years ended December 31, 2024 and 2023, respectively.
Common stock activity is summarized as follows:
Shares Dollars
(Dollars in thousands) Issued Treasury Common
Stock Treasury
Cost(a)
Balance at January 1, 2022 62,081,391 (22,804,873) $ 260,121 $ (328,776)
Restricted stock awards - 52,810 (711) 711
Restricted stock expense - - 7,715 -
Restricted stock forfeitures - - (1,227) -
Stock options exercised - 103,545 3,021 1,629
Stock option expense - - 49 -
Performance stock issued - 55,447 (880) 880
Performance stock expense - - 15,843 -
Performance stock forfeitures - - (2,730) -
Employee stock purchase plan shares issued - 7,412 779 112
Treasury shares purchased - (31,260) - (4,021)
Share repurchase program - (251,408) - (30,373)
Balances December 31, 2022 62,081,391 (22,868,327) $ 281,980 $ (359,838)
Restricted stock awards - 40,856 (643) 643
Restricted stock expense - - 9,476 -
Restricted stock forfeitures - - (1,414) -
Stock options exercised - 31,394 970 503
Stock option expense - - 11 -
Stock option forfeitures - - (11) -
Performance stock issued - 53,407 (855) 855
Performance stock expense - - 23,546 -
Performance stock forfeitures - - (1,585) -
Employee stock purchase plan shares issued - 7,140 849 114
Treasury shares purchased - (28,649) - (3,961)
Balances December 31, 2023 62,081,391 (22,764,179) $ 312,324 $ (361,684)
Restricted stock awards - 52,098 (842) 842
Restricted stock expense - - 15,769 -
Restricted stock forfeitures - - (4,530) -
Stock options exercised - 10,666 327 174
Stock option expense - - 41 -
Stock option forfeitures - - (41) -
Performance stock issued - 77,544 (1,256) 1,256
Performance stock expense - - 8,394 -
Performance stock forfeitures - - (1,634) -
Employee stock purchase plan shares issued - 8,871 1,215 148
Employee stock purchase plan expense - - 186 -
Treasury shares purchased - (40,019) - (7,408)
Share repurchase program - (166,292) - (29,932)
Balances December 31, 2024 62,081,391 (22,821,311) $ 329,953 $ (396,604)
(a)Excludes treasury cost related to preferred stock.
Note 9-Segment Information
The Company is organized into four geographical operating segments that are based on management responsibilities: Northern North America; Latin America; Europe, Middle East & Africa; and Asia Pacific. The operating segments have been aggregated (based on economic similarities, the nature of their products and solutions, end-user markets and methods of distribution) into three reportable segments: Americas, International, and Corporate.
The Americas segment is comprised of our operations in Northern North America and Latin America geographies. The International segment is comprised of our operations in all geographies outside of the Americas. Certain global expenses are allocated to each segment in a manner consistent with where the benefits from the expenses are derived.
The Company's sales are allocated to each segment based primarily on the country destination of the end-customer.
The Company adopted ASU No. 2023-07 (“ASU 2023-07”), Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures for the year ended December 31, 2024 and applied it retrospectively for all prior periods presented.
Adjusted operating income (loss) is the measure used by the chief operating decision maker, identified as our President and Chief Executive Officer, to evaluate segment performance and identify opportunities when allocating resources. Adjusted operating income (loss) is defined as operating income excluding restructuring charges, currency exchange gains (losses), product liability expense, loss on divestiture of Mine Safety Appliances Company, LLC ("MSA LLC"), net cost for product-related legal matter, transaction costs and acquisition-related amortization.
The accounting principles applied at the operating segment level in determining the segment measure of profit or loss are the same as those applied at the consolidated financial statement level. Sales and transfers between operating segments are accounted for at market-based transaction prices and are eliminated in consolidation.
Reportable segment information is presented in the following table:
(In thousands) Americas International Corporate Reconciling
Items(a)
Consolidated
Totals
Net sales to external customers $ 1,246,641 $ 561,499 $ - $ - $ 1,808,140
Less:
Cost of products sold 618,019 320,502 - -
Selling, general and administrative 208,753 129,683 50,385 -
Research and development 39,783 26,743 - -
Adjusted operating income (loss) 380,086 84,571 (50,385) - 414,272
Noncash items:
Depreciation and amortization $ 46,289 $ 17,164 $ 880 $ - $ 64,333
Pension (income) expense (11,854) 3,707 - - (8,147)
Total Assets 1,480,124 682,816 44,261 (1,417) 2,205,784
Capital expenditures 31,546 19,091 3,586 - 54,223
Net sales to external customers $ 1,235,594 $ 552,053 $ - $ - $ 1,787,647
Less:
Cost of products sold 619,948 306,443 (128) -
Selling, general and administrative 215,236 128,720 51,724 -
Research and development 40,793 27,191 4 -
Adjusted operating income (loss) 359,617 89,699 (51,600) - 397,716
Noncash items:
Depreciation and amortization $ 44,170 $ 15,760 $ 843 $ - $ 60,773
Pension (income) expense (11,873) 3,958 - - (7,915)
Total Assets 1,433,244 734,856 320 1,730 2,170,150
Capital expenditures 28,011 13,341 1,412 - 42,764
Net sales to external customers $ 1,043,238 $ 484,715 $ - $ - $ 1,527,953
Less:
Cost of products sold 559,773 285,098 44 -
Selling, general and administrative 181,861 115,894 37,884 -
Research and development 34,212 22,800 - -
Adjusted operating income (loss) 267,392 60,923 (37,928) - 290,387
Noncash items:
Depreciation and amortization $ 41,525 $ 14,272 $ 520 $ - $ 56,317
Pension (income) expense (18,368) 6,869 - - (11,499)
Total Assets 1,660,776 703,444 11,673 1,083 2,376,976
Capital expenditures 33,324 9,229 - - 42,553
(a)Reconciling items consist primarily of intercompany eliminations and items not directly attributable to operating segments.
A reconciliation of total Adjusted operating income from reportable segments to Income before income taxes is presented in the following table:
(In thousands) 2024 2023 2022
Adjusted operating income $ 414,272 $ 397,716 $ 290,387
Less:
Restructuring charges (Note 4) 6,397 9,892 7,965
Currency exchange losses, net 3,638 17,079 10,255
Interest expense 36,889 46,733 21,660
Other income, net (Note 16) (22,718) (22,101) (21,056)
Amortization of acquisition-related intangible assets 9,174 9,246 9,207
Transaction costs(a)
886 965 3,233
Net cost for product-related legal matter 5,000 - -
Loss on divestiture of MSA LLC (Note 20) - 129,211 -
Product liability expense (Note 20) - 3 20,590
Income before income taxes $ 375,006 $ 206,688 $ 238,533
(a)Transaction costs include advisory, legal, accounting, valuation, and other professional or consulting fees incurred during our evaluation of acquisitions and divestitures. These costs are included in Selling, general and administrative expense in the Consolidated Statements of Operations.
Geographic information on Net sales to external customers, based on country of origin:
(In thousands) 2024 2023 2022
United States $ 1,047,451 $ 1,036,521 $ 876,945
Other 760,689 751,126 651,008
Total $ 1,808,140 $ 1,787,647 $ 1,527,953
Geographic information on tangible long-lived assets, net, based on country of origin:
(In thousands) 2024 2023 2022
United States $ 160,760 $ 156,937 $ 159,345
United Kingdom 30,274 24,740 25,302
Other 76,914 83,498 67,047
Total $ 267,948 $ 265,175 $ 251,694
Total Net sales by product category was as follows:
2024 Consolidated Americas International
(In thousands) Dollars Percent Dollars Percent Dollars Percent
Fire Service (a)
$ 712,684 39% $ 507,738 41% $ 204,946 36%
Detection (b)
642,792 36% 426,839 34% 215,953 38%
Industrial PPE and Other (c)
452,664 25% 312,064 25% 140,600 26%
Total $ 1,808,140 100% $ 1,246,641 100% $ 561,499 100%
2023 Consolidated Americas International
(In thousands) Dollars Percent Dollars Percent Dollars Percent
Fire Service (a)
$ 684,224 38% $ 501,676 41% $ 182,548 33%
Detection (b)
634,915 36% 419,312 34% 215,603 39%
Industrial PPE and Other (c)
468,508 26% 314,606 25% 153,902 28%
Total $ 1,787,647 100% $ 1,235,594 100% $ 552,053 100%
2022 Consolidated Americas International
(In thousands) Dollars Percent Dollars Percent Dollars Percent
Fire Service (a)
$ 578,935 38% $ 416,427 40% $ 162,508 34%
Detection (b)
529,735 35% 349,543 34% 180,192 37%
Industrial PPE and Other (c)
419,283 27% 277,268 26% 142,015 29%
Total $ 1,527,953 100% $ 1,043,238 100% $ 484,715 100%
(a) Fire Service includes Breathing Apparatus and Firefighter Helmets and Protective Apparel.
(b) Detection includes Fixed Gas and Flame Detection and Portable Gas detection.
(c) Industrial PPE and Other includes Industrial Head Protection, Fall Protection and Non-Core.
Note 10-Earnings per Share
Basic earnings per share attributable to MSA Safety Incorporated common shareholders is computed by dividing net income, after the deduction of preferred stock dividends and undistributed earnings allocated to participating securities, by the weighted average number of common shares outstanding during the period. Diluted earnings per share attributable to MSA Safety Incorporated common shareholders assumes the issuance of common stock for all potentially dilutive share equivalents outstanding not classified as participating securities. Participating securities are defined as unvested stock-based compensation awards that contain nonforfeitable rights to dividends.
Amounts attributable to MSA Safety Incorporated common shareholders:
(In thousands, except per share amounts) 2024 2023 2022
Net income $ 284,967 $ 58,583 $ 179,630
Preferred stock dividends (41) (41) (41)
Net income available to common equity 284,926 58,542 179,589
Dividends and undistributed earnings allocated to participating securities (24) (26) (30)
Net income available to common shareholders $ 284,902 $ 58,516 $ 179,559
Basic weighted-average shares outstanding 39,371 39,307 39,232
Stock options and other stock-based awards 164 166 175
Diluted weighted-average shares outstanding 39,535 39,473 39,407
Antidilutive stock-based awards - - -
Earnings per share:
Basic $ 7.24 $ 1.49 $ 4.58
Diluted $ 7.21 $ 1.48 $ 4.56
Note 11-Income Taxes
(In thousands) 2024 2023 2022
Components of income before income taxes
U.S. income $ 243,129 $ 80,229 $ 170,426
Non-U.S. income 131,877 126,459 68,107
Income before income taxes $ 375,006 $ 206,688 $ 238,533
Provision for income taxes
Current
Federal $ 47,060 $ 49,642 $ 26,022
State 12,868 9,510 7,708
Non-U.S. 30,209 27,101 20,002
Total current provision $ 90,137 $ 86,253 $ 53,732
Deferred
Federal $ (3,141) $ 54,272 $ 7,350
State 1,046 12,914 862
Non-U.S. 1,997 (5,334) (3,041)
Total deferred provision (benefit) (98) 61,852 5,171
Provision for income taxes $ 90,039 $ 148,105 $ 58,903
Reconciliation of the U.S. federal income tax rates to our effective tax rate:
2024 2023 2022
U.S. federal income tax rate 21.0 % 21.0 % 21.0 %
State income taxes-U.S. 2.9 % 3.7 % 2.9 %
Taxes on non-U.S. income 1.1 % (0.6) % 0.1 %
Nondeductible compensation 0.5 % 1.9 % 1.2 %
Divestiture (Note 20) - % 46.6 % - %
Valuation allowances (1.2) % (0.2) % 0.8 %
Research and development credit (0.7) % (0.8) % (0.4) %
Employee share-based payments (0.2) % (0.4) % (0.8) %
Taxes on non-U.S. income - U.S., Canadian & European reorganization (0.1) % (0.5) % - %
Foreign exchange on entity closures (0.1) % - % 0.3 %
Other 0.8 % 0.9 % (0.4) %
Effective income tax rate 24.0 % 71.6 % 24.7 %
Components of deferred tax assets and liabilities:
December 31,
(In thousands) 2024 2023
Deferred tax assets
Capitalized research and development $ 31,030 $ 28,822
Inventory 9,434 7,281
Net operating losses and tax credit carryforwards 6,715 10,964
Share-based compensation 6,149 5,528
Accrued expenses and other reserves 5,006 4,566
Reserve for doubtful accounts 1,071 1,562
Other 2,177 1,944
Total deferred tax assets 61,582 60,667
Valuation allowances (4,815) (9,671)
Net deferred tax assets 56,767 50,996
Deferred tax liabilities
Goodwill and intangibles (79,917) (77,171)
Employee benefits (41,399) (24,958)
Property, plant and equipment (15,461) (15,541)
Other (1,501) (2,680)
Total deferred tax liabilities (138,278) (120,350)
Net deferred taxes $ (81,511) $ (69,354)
At December 31, 2024, we had net operating loss carryforwards of approximately $26.9 million. All net operating loss carryforwards without a valuation allowance may be carried forward for a period of at least six years.
A reconciliation of the change in the tax liability for unrecognized tax benefits for the years ended December 31, 2024 and 2023 is as follows:
(In thousands) 2024 2023
Beginning balance $ 3,084 $ 5,192
Adjustments for tax positions related to the current year 51 -
Adjustments for tax positions related to prior years (607) (1,116)
Settlements (929) -
Statute expiration (329) (992)
Ending balance $ 1,270 $ 3,084
The total amount of unrecognized tax benefits, if recognized, would reduce our future effective tax rate. We have no recognized tax benefits associated with these liabilities in 2024 and recognized $0.6 million of tax liabilities associated with these liabilities in 2023.
We recognize interest related to unrecognized tax benefits in interest expense and penalties in operating expenses. Our liability for accrued interest and penalties related to uncertain tax positions was $0.2 million at both December 31, 2024 and 2023.
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 consolidated financial statements.
We file a U.S. federal income tax return along with various state and foreign income tax returns. Examinations of our U.S. federal returns have been completed through 2018. Various state and foreign income tax returns may be subject to tax audits for periods after 2016.
On August 16, 2022, President Biden signed the Inflation Reduction Act, which includes a new minimum tax on certain large corporations and an excise tax on stock buybacks. We do not anticipate this legislation will have a material impact for the company.
The Organization for Economic Co-operation and Development (OECD) has a framework to implement a global minimum corporate tax of 15% for companies with global revenues above €750.0 million (referred to as Pillar 2), with effective dates beginning in January 2024. We meet the overall revenue threshold and fall within the scope of Pillar 2 and as such, have complied with the requirements of the legislation for the year ended December 31, 2024. The application of Pillar 2 resulted in additional tax expense of $1.1 million.
Note 12-Stock Plans
The 2023 Management Equity Incentive Plan and its predecessor, the 2016 Management Equity Incentive Plan, provide for various forms of stock-based compensation for eligible employees through May 2033 including stock options, restricted stock awards, restricted stock units and performance stock units. The 2024 Non-Employee Directors' Equity Incentive Plan and its predecessor, the 2017 Non-Employee Directors’ Equity Incentive Plan provides for grants of stock options and restricted stock to non-employee directors through May 2034. Stock options are granted at market prices and expire after ten years. The 2014 MSA Employee Stock Purchase Plan (“ESPP”) permits eligible employees to purchase the Company's shares of common stock at a 15% discount from fair market value, semi-annually, from the stock market. The ESPP plan is considered a compensatory plan. The discount is recorded as a component of selling, general and administrative expense in the Company's Consolidated Statements of Operations. As of December 31, 2024, there were 1,772,153; 87,209; and 68,404 shares, respectively, reserved for future grants under the management and non-employee directors’ equity incentive and employee stock purchase plans.
Stock options are exercisable beginning three years after the grant date. Restricted stock and restricted stock units are granted without payment to the Company and generally vest three years after the grant date. Restricted stock and restricted stock units are valued at the market value of the stock on the grant date. Performance stock units with a market condition are valued at an estimated fair value using a Monte Carlo simulation model. The final number of shares to be issued for performance stock units may range from zero to 240% of the target award based on achieving the specified performance targets over the performance period and further range based upon the achieved market metric over the performance period. In general, unvested stock options, restricted stock and performance stock units are forfeited if the participant’s employment with the Company terminates for any reason other than retirement, death or disability. We issue Treasury shares for stock option exercises and grants of restricted stock and performance stock. Please refer to Note 8-Capital Stock for further information regarding stock compensation share issuance.
Stock-based compensation expense was as follows:
(In thousands) 2024 2023 2022
Restricted stock units $ 11,239 $ 8,062 $ 6,488
Stock options - - 49
Performance stock units 6,760 21,961 13,113
Employee stock purchase program 186 - -
Total stock-compensation expense before income taxes 18,185 30,023 19,650
Income tax benefit 4,492 7,356 4,814
Total stock-compensation expense, net of income tax benefit $ 13,693 $ 22,667 $ 14,836
We did not capitalize any stock-based compensation expense, and all expense is included in Selling, general and administrative expense in the Consolidated Statements of Income.
A summary of option activity follows:
Shares Weighted
Average
Exercise Price Exercisable at
Year-end
Outstanding January 1, 2022 161,701 $ 45.47
Exercised (103,545) 44.91
Outstanding December 31, 2022 58,156 46.48 58,156
Exercised (31,394) 46.90
Forfeited (226) 49.44
Outstanding December 31, 2023 26,536 45.95 26,536
Exercised (10,666) 46.93
Forfeited (852) 48.65
Outstanding December 31, 2024 15,018 $ 45.10 15,018
For various exercise price ranges, characteristics of outstanding and exercisable stock options at December 31, 2024 were as follows:
Stock Options Outstanding and Exercisable
Range of Exercise Prices Shares Weighted-Average
Exercise Price Remaining Life
$33.01 - $45.00
13,212 $ 44.50 0.48
$45.01 - $57.93
1,806 49.48 3.07
$33.01 - $57.93
15,018 $ 45.10 0.79
Cash received from the exercise of stock options was $0.5 million, $1.5 million and $4.7 million for the years ended December 31, 2024, 2023 and 2022, respectively. The tax benefit we realized from these exercises was $0.6 million, $0.9 million and $1.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Stock options become exercisable when they are vested. The aggregate intrinsic value of stock options exercisable and outstanding at December 31, 2024 was $1.8 million.
Restricted stock awards and restricted stock units are valued at the market value of the stock on the grant date. A summary of restricted stock unit activity follows:
Shares Weighted Average
Grant Date
Fair Value
Unvested January 1, 2022 118,343 $ 132.62
Granted 87,697 130.28
Vested (51,369) 113.96
Forfeited (8,785) 139.66
Unvested at December 31, 2022 145,886 137.36
Granted 81,150 142.92
Vested (43,107) 126.27
Forfeited (10,078) 140.28
Unvested at December 31, 2023 173,851 142.73
Granted 84,282 178.50
Vested (50,840) 163.66
Forfeited (27,709) 163.49
Unvested at December 31, 2024 179,584 $ 150.39
A summary of performance stock unit activity follows:
Shares Weighted Average
Grant Date
Fair Value
Unvested at January 1, 2022 193,335 $ 129.86
Granted 81,504 142.38
Vested (55,447) 101.38
Performance adjustments (22,147) 99.84
Forfeited (18,485) 147.66
Unvested at December 31, 2022 178,760 146.28
Granted 77,654 132.39
Vested (53,407) 127.36
Performance adjustments (3,009) 127.40
Forfeited (10,777) 147.06
Unvested at December 31, 2023 189,221 146.17
Granted 40,787 177.34
Vested (77,544) 174.13
Performance adjustments 20,488 194.10
Forfeited (10,956) 149.16
Unvested at December 31, 2024 161,996 $ 146.50
The 2024 performance adjustments above relate primarily to 2021 performance unit awards which vested in the first quarter of 2024 at 174% of the target award based on both cumulative performance against EBITDA margin and revenue growth targets and MSA's TSR during the three-year performance period.
During the years ended December 31, 2024, 2023 and 2022, the total intrinsic value of stock options exercised (the difference between the market price on the date of exercise and the option price paid to exercise the option) was $1.5 million, $3.7 million and $8.6 million, respectively. The fair values of restricted stock vested during the years ended December 31, 2024, 2023 and 2022 were $8.3 million, $5.4 million and $5.9 million, respectively. The fair value of performance stock units vested during the years ended December 31, 2024, 2023 and 2022 was $13.5 million, $6.8 million and $5.6 million, respectively.
On December 31, 2024, there was $20.0 million of unrecognized stock-based compensation expense. The weighted average period over which this expense is expected to be recognized was approximately 1.5 years.
Note 13-Long-Term Debt
Long-Term Debt
December 31,
(In thousands) 2024 2023
2016 Senior Notes payable through 2031, 3.40%, net of debt issuance costs
$ 53,400 $ 62,081
2021 Senior Notes payable through 2036, 2.69%, net of debt issuance costs
99,754 99,733
2021 Senior Notes payable through 2036, 2.69%, net of debt issuance costs
99,754 99,733
2023 Term Loan credit agreement maturing in 2026, net of debt issuance costs 205,152 230,604
2023 Senior Notes payable through 2028, 5.25%, net of debt issuance costs
49,953 49,939
Senior revolving credit facility maturing in 2026, net of debt issuance costs - 59,602
Total 508,013 601,692
Amounts due within one year 26,391 26,522
Long-term debt, net of debt issuance costs $ 481,622 $ 575,170
On May 24, 2021, the Company entered into a Fourth Amended and Restated Credit Agreement (the “Revolving Credit Facility" or "Facility”) that extended its term through May 24, 2026, and increased the capacity to $900.0 million. The agreement was amended in August 2021 and June 2023 to transition from Sterling LIBOR reference rates and U.S. LIBOR reference rates. Under the amended agreement, the Company may elect either a Base rate of interest (“BASE”) or an interest rate based on Secured Overnight Financing Rate (“SOFR”). The BASE is a daily fluctuating per annum rate equal to the highest of (i) 0.00%, (ii) the Overnight Bank Funding Rate, plus 0.5%, (iii) the Prime Rate (iv) the Daily Simple SOFR rate, plus 1.00%. The Company pays a credit spread of 0 to 175 basis points based on the Company’s net EBITDA leverage ratio and elected rate (BASE or SOFR). At December 31, 2024, we had no borrowings outstanding under our $900.0 million senior revolving credit facility. The facility also provides an accordion feature that allows the Company to access an additional $400.0 million of capacity pending approval by MSA’s board of directors and from the bank group.
On July 1, 2024, the Company entered into Amendment No. 3 to the Third Amended and Restated Multi-Currency Note Purchase and Private Shelf Agreement (the “Prudential Note Agreement”) with PGIM, Inc. (“Prudential”). The Prudential Note Agreement provided for (i) the issuance of $100.0 million of 2.69% Series C Senior Notes due July 1, 2036 and (ii) the establishment of an uncommitted note issuance facility whereby the Company may request, subject to Prudential’s acceptance in its sole discretion, the issuance of up to $335.0 million aggregate principal amount of senior unsecured notes. The Company has outstanding £42.7 million (approximately $53.5 million at December 31, 2024) of 3.4% Series B Senior Notes due January 22, 2031. Remaining maturities of this note are £6.1 million (approximately $7.6 million at December 31, 2024) due annually through January 2031.
On July 1, 2024, the Company entered into Amendment No. 3 to the Second Amended and Restated Master Note Facility (the “NYL Note Facility”) with NYL Investors. The NYL Note Facility provided for (i) the issuance of $100.0 million of 2.69% Series A Senior Notes due July 1, 2036 and (ii) the establishment of an uncommitted note issuance facility whereby the Company may request, subject to NYL Investors’ acceptance in its sole discretion, the issuance of up to $200.0 million aggregate principal amount of senior unsecured notes.
On June 29, 2023, the Company issued $50 million of 5.25% Series B Senior Notes due July 1, 2028, pursuant to the NYL Note Facility (the "Notes"). The Notes bear interest at 5.25% per annum, payable semi-annually, and mature on July 1, 2028. The Notes provide for a principal payment of $25 million on July 1, 2027, with the remaining $25 million due on July 1, 2028. The Notes may be redeemed at the Company’s option prior to their maturity at a make-whole redemption price calculated as provided in the NYL Note Facility. The proceeds of the Notes were used on June 29, 2023, to pay down an equivalent amount of borrowings under the Company’s Revolving Credit Facility with PNC Bank, National Association, as Administrative Agent.
On January 5, 2023, the Company entered into a new $250 million term loan facility to fund the divestiture of MSA LLC, a wholly owned subsidiary. Under the agreement, the Company may elect either BASE or an interest rate based on SOFR. The Company pays a credit spread of 0 to 200 basis points based on the Company's net EBITDA leverage ratio and elected rate. The Company had a Term Loan interest rate of 5.56% as of December 31, 2024.
The Revolving Credit Facility, Term Loan Facility, Prudential Note Agreement and NYL Note Facility require the Company to comply with specified financial covenants, including a requirement to maintain a minimum fixed charges coverage ratio of not less than 1.50 to 1.00 and a consolidated leverage ratio not to exceed 3.50 to 1.00; except during an acquisition period, defined as four consecutive fiscal quarters beginning with the quarter of acquisition, in which case the consolidated net leverage ratio shall not exceed 4.00 to 1.00; in each case calculated on the basis of the trailing four fiscal quarters. In addition, the agreements contain negative covenants limiting the ability of the Company and its subsidiaries to incur additional indebtedness or issue guarantees, create or incur liens, make loans and investments, make acquisitions, transfer or sell assets, enter into transactions with affiliated parties, make changes in its organizational documents that are materially adverse to lenders or modify the nature of the Company's or its subsidiaries' business. All credit facilities excluded MSA LLC prior to the divestiture of this subsidiary on January 5, 2023, as discussed further in Note 20.
As of December 31, 2024, MSA was in full compliance with the restrictive covenants under its various credit agreements.
Approximate maturities on our long-term debt over the next five years are $26.4 million in 2025, $195.1 million in 2026, $32.6 million in 2027, $32.6 million in 2028, $7.6 million in 2029 and $215.3 million thereafter.
The Company had outstanding bank guarantees and standby letters of credit with banks as of December 31, 2024, totaling $9.5 million, of which $1.5 million relate to the senior revolving credit facility. The letters of credit serve to cover customer requirements in connection with certain sales orders and insurance companies. The Company is also required to provide cash collateral in connection with certain arrangements. At December 31, 2024, the Company has $0.5 million of restricted cash in support of these arrangements.
Note 14-Goodwill and Intangible Assets
Changes in goodwill during the years ended December 31, 2024 and 2023, were as follows:
(In thousands) 2024 2023
Balance at January 1 $ 627,534 $ 620,622
Currency translation (6,639) 6,912
Balance at December 31 $ 620,895 $ 627,534
At December 31, 2024, goodwill of $447.6 million and $173.3 million related to the Americas and International reportable segments, respectively.
Changes in intangible assets, net of accumulated amortization, during the years ended December 31, 2024 and 2023, were as follows:
(In thousands) 2024 2023
Net balance at January 1 $ 266,134 $ 281,853
Amortization expense (17,826) (18,085)
Currency translation (1,871) 2,366
Net balance at December 31 $ 246,437 $ 266,134
(In millions) December 31, 2024 December 31, 2023
Intangible Assets: Weighted Average Useful Life (years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount
Customer relationships 19 $ 179.7 $ (55.7) $ 124.0 $ 181.8 $ (46.5) $ 135.3
Distribution agreements 20 65.7 (33.3) 32.4 66.0 (30.2) 35.8
Technology related assets 8 49.6 (35.5) 14.1 49.9 (32.7) 17.2
Patents, trademarks and copyrights 16 34.1 (18.2) 15.9 34.5 (16.8) 17.7
License agreements 5 5.4 (5.4) - 5.4 (5.4) -
Other 2 2.8 (2.8) - 3.4 (3.3) 0.1
Total 17 $ 337.3 $ (150.9) $ 186.4 $ 341.0 $ (134.9) $ 206.1
At December 31, 2024, the above intangible assets balance includes a trade name related to the Globe acquisition with an indefinite life totaling $60.0 million.
Intangible asset amortization expense over the next five years is expected to be approximately $17.5 million in 2025, $17.1 million in 2026, $17.0 million in 2027, $16.8 million in 2028, and $16.0 million in 2029.
Note 15-Pensions and Other Post-retirement Benefits
We maintain various defined benefit and defined contribution plans covering the majority of our employees. Our principal U.S. plan is funded in compliance with the Employee Retirement Income Security Act ("ERISA"). It is our general policy to fund current costs for the international plans according to local requirements and general market practice.
We provide health care benefits and limited life insurance for certain retired employees who are covered by our principal U.S. defined benefit pension plan until they become Medicare-eligible.
Defined benefit pension plan and other post-retirement benefits plan information is provided in the following tables:
Pension Benefits Other Benefits
(In thousands) 2024 2023 2024 2023
Change in Benefit Obligations
Benefit obligations at January 1 $ 521,474 $ 490,365 $ 21,386 $ 22,538
Service cost 9,214 7,587 176 214
Interest cost 23,307 23,775 994 1,090
Participant contributions 232 347 285 276
Plan amendments (20) (194) - -
Actuarial (losses) gains(a)
(27,259) 23,750 1,696 (326)
Benefits paid (28,159) (26,140) (2,491) (2,406)
Curtailments - (87) - -
Settlements (17,576) (1,574) - -
Currency translation (6,729) 3,645 - -
Benefit obligations at December 31 $ 474,484 $ 521,474 $ 22,046 $ 21,386
Change in Plan Assets
Fair value of plan assets at January 1 $ 563,449 $ 514,218 $ - $ -
Actual return on plan assets 55,610 70,640 - -
Employer contributions 7,877 5,217 2,206 2,130
Participant contributions 232 347 285 276
Settlements (17,576) (1,574) - -
Benefits paid (28,159) (26,140) (2,491) (2,406)
Administrative expenses paid (62) (57) - -
Currency translation (1,007) 798 - -
Fair value of plan assets at December 31 $ 580,364 $ 563,449 $ - $ -
Funded Status
Funded status at December 31 $ 105,880 $ 41,975 $ (22,046) $ (21,386)
Unrecognized prior service credit (cost) 728 1,021 - (184)
Unrecognized net actuarial losses 40,339 82,796 6,804 5,568
Net amount recognized $ 146,947 $ 125,792 $ (15,242) $ (16,002)
Amounts Recognized in the Balance Sheets
Noncurrent assets $ 224,638 $ 172,161 $ - $ -
Current liabilities (7,474) (8,427) (2,145) (2,167)
Noncurrent liabilities (111,284) (121,759) (19,901) (19,219)
Net amount recognized $ 105,880 $ 41,975 $ (22,046) $ (21,386)
Amounts Recognized in Accumulated Other Comprehensive Loss
Net actuarial losses $ 40,339 $ 82,796 $ 6,804 $ 5,568
Prior service cost (credit) 728 1,021 - (184)
Total (before tax effects) $ 41,067 $ 83,817 $ 6,804 $ 5,384
Accumulated Benefit Obligations for all Defined Benefit Plans $ 442,734 $ 487,167 $ - $ -
(a)Actuarial (losses) gains for both periods relate primarily to the increase/decrease in discount rates used in measuring plan obligations as of December 31, 2024, and 2023, respectively.
Pension Benefits Other Benefits
(In thousands) 2024 2023 2022 2024 2023 2022
Components of Net Periodic Benefit (Income) Cost
Service cost $ 9,214 $ 7,587 $ 12,281 $ 176 $ 214 $ 327
Interest cost 23,307 23,775 14,377 994 1,090 590
Expected return on plan assets (42,832) (39,639) (49,646) - - -
Amortization of prior service cost (credit) 142 161 139 (184) (245) (338)
Recognized net actuarial losses 1,103 186 11,704 460 550 1,242
Settlement/curtailment loss (gain) 919 15 (354) - - -
Net periodic benefit (income) cost(a)
$ (8,147) $ (7,915) $ (11,499) $ 1,446 $ 1,609 $ 1,821
(a) Components of net periodic benefit (income) cost other than service cost are included in the line item Other income, net, and service costs are included in the line items Cost of products sold and Selling, general and administrative in the Consolidated Statements of Income.
The Company utilizes a spot rate approach, which discounts the individual plan specific expected cash flows underlying the service and interest cost using the applicable spot rates derived from a yield curve used in the determination of the benefit obligation to the relevant projected cash flows. For plans where the discount rate is not derived from plan specific expected cash flows, the Company uses a single weighted-average discount rate derived from the yield curve used to measure the projected benefit obligation at the beginning of the period for measuring both the projected benefit obligations and the service and interest cost components of net periodic benefit cost for pension and other post-retirement benefits.
Information for pension plans with an accumulated benefit obligation in excess of plan assets:
Pension Benefits
(In thousands) 2024 2023
Aggregate accumulated benefit obligations (ABO) $ 117,299 $ 129,921
Aggregate fair value of plan assets 3,334 5,622
Information for pension plans with a projected benefit obligation in excess of plan assets:
Pension Benefits
(In thousands) 2024 2023
Aggregate projected benefit obligations (PBO) $ 122,092 $ 135,809
Aggregate fair value of plan assets 3,334 5,622
Pension Benefits Other Benefits
2024 2023 2024 2023
Assumptions used to determine benefit obligations
Average discount rate 5.35 % 4.75 % 5.49 % 4.88 %
Rate of compensation increase 2.96 % 3.78 % 3.00 % 3.00 %
Assumptions used to determine net periodic benefit cost
Average discount rate - Service cost 5.02 % 5.23 % 4.96 % 5.15 %
Average discount rate - Interest cost 4.64 % 4.91 % 4.85 % 5.09 %
Expected return on plan assets 7.23 % 6.86 % - -
Rate of compensation increase 3.78 % 4.61 % 3.00 % 3.00 %
Discount rates for all U.S. and foreign plans were determined using the aforementioned spot rate methodology for 2024 and 2023. Aside from sovereign bonds used in Mexico, the remaining plans' discount rates were determined using various corporate bonds and by matching our projected benefit obligation payment stream to current yields on high quality bonds.
The expected return on assets for the 2024 net periodic pension cost was determined by multiplying the expected returns of each asset class (based on capital market expectations) by the expected percentage of the total portfolio invested in that asset class. A total return was determined by summing the expected returns over all asset classes.
Pension Plan Assets at
December 31,
2024 2023
Equity securities 65 % 58 %
Fixed income securities 26 30
Pooled investment funds 7 9
Cash and cash equivalents 1 2
Insurance contracts 1 1
Total 100 % 100 %
The overall objective of our pension investment strategy is to earn a rate of return over time to satisfy the benefit obligations of the pension plans and to maintain sufficient liquidity to pay benefits and meet other cash requirements of our pension funds. Investment policies for our primary U.S. pension plan are determined by the plan’s Investment Committee and set forth in the plan’s investment policy. Asset managers are granted discretion for determining sector mix, selecting securities and timing transactions, subject to the guidelines of the investment policy. An aggressive, flexible management of the portfolio is permitted and encouraged, with shifts of emphasis among equities, fixed income securities and cash equivalents at the discretion of each manager. No target asset allocations are set forth in the investment policy. For our non-U.S. pension plans, our investment objective is generally met through the use of pooled investment funds and insurance contracts.
The fair values of the Company's pension plan assets are determined using NAV as a practical expedient, or by information categorized in the fair value hierarchy level based on the inputs used to determine fair value, as further discussed in Note 19-Fair Value Measurements.
The fair values of the Company's pension plan assets at December 31, 2024, were as follows:
Fair Value
(In thousands) Total NAV Quoted Prices
in Active
Markets for
Identical Assets
(Level 1) Significant
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
Equity securities $ 375,001 $ 56,803 $ 318,198 $ - $ -
Fixed income securities 152,258 - 97,013 55,245 -
Pooled investment funds 42,182 42,182 - - -
Cash and cash equivalents 7,589 5,908 1,681 - -
Insurance contracts 3,334 - - - 3,334
Total $ 580,364 $ 104,893 $ 416,892 $ 55,245 $ 3,334
The fair values of the Company's pension plan assets at December 31, 2023, were as follows:
Fair Value
(In thousands) Total NAV Quoted Prices
in Active
Markets for
Identical Assets
(Level 1) Significant
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
Equity securities $ 327,699 $ 45,441 $ 282,258 $ - $ -
Fixed income securities 169,321 - 94,706 74,615 -
Pooled investment funds 50,553 50,553 - - -
Cash and cash equivalents 10,254 8,645 1,609 - -
Insurance contracts 5,622 - - - 5,622
Total $ 563,449 $ 104,639 $ 378,573 $ 74,615 $ 5,622
Equity securities consist primarily of publicly traded U.S. and non-U.S. common stocks. Equities are valued at closing prices reported on the listing stock exchange.
Fixed income securities consist primarily of U.S. government and agency bonds and U.S. corporate bonds. Fixed income securities are valued at closing prices reported in active markets or based on yields currently available on comparable securities of issuers with similar credit ratings. When quoted prices are not available for identical or similar bonds, the bond is valued under a discounted cash flow approach that maximizes observable inputs, such as current yields of similar instruments, and may include adjustments, for certain risks that may not be observable, such as credit and liquidity risks.
A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Pooled investment funds consist of mutual and collective investment funds that invest primarily in publicly traded equity and fixed income securities. Pooled investment funds are valued using the NAV provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, divided by the number of shares outstanding. The underlying securities are generally valued at closing prices reported in active markets, quoted prices of similar securities, or discounted cash flows approach that maximizes observable inputs such as current value measurement at the reporting date. These investments are not classified in the fair value hierarchy in accordance with guidance in ASU 2015-07.
Insurance contracts are valued in accordance with the terms of the applicable collective pension contract. The fair value of the plan assets equals the discounted value of the expected cash flows of the accrued pensions which are guaranteed by the counterparty insurer.
Cash equivalents consist primarily of money market and similar temporary investment funds. Cash equivalents are valued at closing prices reported in active markets.
The preceding methods may produce fair value measurements that are not indicative of net realizable value or reflective of future fair values. Although we believe the valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
The following table presents a reconciliation of Level 3 assets:
(In thousands) Insurance
Contracts
Balance January 1, 2023 $ 4,454
Net realized and unrealized gains 208
Net purchases, issuances and settlements 960
Balance December 31, 2023 5,622
Net realized and unrealized gains (117)
Net purchases, issuances and settlements (2,171)
Balance December 31, 2024 $ 3,334
The following table presents amounts related to Level 3 assets recognized in accumulated other comprehensive loss:
(In thousands) Insurance
Contracts
Net actuarial losses $ (698)
Prior service cost 310
Total (before tax effects) $ (388)
We expect to make net contributions between $6 million and $8 million to our pension plans in 2025, which are primarily associated with statutorily required plans in the International reporting segment.
For the 2024 beginning of the year measurement purposes (net periodic benefit expense), a 6.7% increase in the costs of covered health care benefits was assumed, decreasing by 0.2% for each successive year to 4.4% in 2033 and thereafter. For the 2024 end of the year measurement purposes (benefit obligation), a 7.8% increase in the costs of covered health care benefits was assumed, decreasing by approximately 0.3% for each successive year to 4.5% in 2034 and thereafter.
Expense for defined contribution pension plans was $13.6 million in 2024, $13.4 million in 2023 and $12.6 million in 2022.
Estimated pension benefits to be paid under our defined benefit pension plans during the next five years are $30.5 million in 2025, $30.4 million in 2026, $30.7 million in 2027, $31.3 million in 2028 and $31.9 million in 2029, and an aggregated $167.7 million for the five years thereafter. Estimated other post-retirement benefits to be paid during the next five years are $2.1 million in 2025, $2.1 million in 2026, $2.3 million in 2027, $2.2 million in 2028, $2.2 million in 2029, and an aggregated $10.2 million for the five years thereafter.
Note 16-Other Income, Net
Year ended December 31,
(In thousands) 2024 2023 2022
Components of net periodic benefit income other than service cost (Note 15) $ 16,091 $ 14,107 $ 22,286
Interest income 7,019 8,184 4,155
Loss on asset write-down and dispositions, net (819) (173) (6,290)
Other, net 427 (17) 905
Total other income, net $ 22,718 $ 22,101 $ 21,056
During the years ended December 31, 2024, and 2023, we recognized $7.0 million and $8.2 million of other income, respectively, related to interest earned on cash balances. During the year ended December 31, 2022, we recognized $4.2 million of other income related to interest earned on cash balances, short-term investments and notes receivable from insurance companies. The short-term investments and notes receivables from insurance companies were divested as of January 5, 2023.
Note 17-Leases
As a lessee, we have various operating lease agreements primarily related to real estate, vehicles and office and plant equipment. The components of lease expense were as follows:
Year Ended December 31,
(In millions, except percentage and year amounts) 2024 2023
Lease cost:
Operating lease cost recognized as rent expense $ 13.7 $ 12.0
Total lease cost $ 13.7 $ 12.0
Other Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows related to operating leases $ 13.5 $ 11.8
Non-cash other information:
Right-of-use assets obtained in exchange for new operating lease liabilities $ 12.2 $ 19.3
December 31,
2024 2023
Weighted-average remaining lease term (in years):
Operating leases 11 13
Weighted-average discount rate:
Operating leases 3.81 % 3.37 %
Rent expense was $13.7 million, $12.0 million and $15.0 million in 2024, 2023 and 2022, respectively. We did not have any lease transactions with related parties. We did not have any significant leases not yet commenced.
At December 31, 2024, future lease payments under operating leases were as follows:
(In millions) Operating Leases
2025 $ 13.3
2026 11.2
2027 8.5
2028 6.5
2029 5.1
After 2029 23.1
$ 67.7
Less: Imputed interest 10.3
Present value of operating lease liabilities 57.4
Less: Current portion operating lease liabilities(a)
11.4
Noncurrent operating lease liabilities $ 46.0
(a) Included in Other current liabilities on the Consolidated Balance Sheets.
Note 18-Derivative Financial Instruments
As part of our currency exchange rate risk management strategy, we enter into certain derivative foreign currency forward contracts that do not meet the U.S. GAAP criteria for hedge accounting but have the impact of partially offsetting certain foreign currency exposures. We account for these forward contracts at fair value and report the related gains or losses in currency exchange losses, net, in the Consolidated Statements of Income. At December 31, 2024, the notional amount of open forward contracts was $184.0 million and there were no unrealized gains/losses on these contracts. All open forward contracts will mature during the first quarter of 2025.
The following table presents the Consolidated Balance Sheets location and fair value of assets and liabilities associated with derivative financial instruments:
December 31,
(In thousands) 2024 2023
Derivatives not designated as hedging instruments:
Foreign exchange contracts: prepaid expenses and other current assets $ 175 $ 2,210
Foreign exchange contracts: other current liabilities $ 1,111 $ 242
The following table presents the Consolidated Statements of Income and Consolidated Statements of Cash Flows location and impact of derivative financial instruments:
Year ended
December 31,
2024 2023
Derivatives not designated as hedging instruments:
Foreign exchange contracts: currency exchange losses, net $ (9,139) $ (398)
Note 19-Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are:
Level 1-Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets.
Level 2-Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3-Unobservable inputs for the asset or liability.
The valuation methodologies we used to measure financial assets and liabilities were limited to the pension plan assets and the derivative financial instruments described in Note 15-Pensions and Other Post-retirement Benefits and Note 18-Derivative Financial Instruments, respectively. Valuations of these financial assets and liabilities may reflect assumptions about financial markets which may change based on economic conditions. See Note 15 for the fair value hierarchy classification of pension plan assets. We estimate the fair value of the derivative financial instruments, consisting of foreign currency forward contracts, based upon valuation models with inputs that generally can be verified by observable market conditions and do not involve significant management judgment. Accordingly, the fair values of the derivative financial instruments are classified within Level 2 of the fair value hierarchy. With the exception of our fixed rate long-term debt, we believe that the reported carrying amounts of our remaining financial assets and liabilities approximate their fair values.
The reported carrying amount of fixed rate long-term debt, including the current portion of long-term debt, was $303.5 million and $312.2 million at December 31, 2024, and 2023, respectively. The fair value of this debt was $266.4 million and $278.7 million at December 31, 2024, and 2023, respectively. The fair value of this debt was determined using Level 2 inputs by evaluating similarly rated companies with publicly traded bonds where available or current borrowing rates available for financings with similar terms and maturities.
Note 20-Contingencies
Product liability
The Company and its subsidiaries face an inherent business risk of exposure to product liability claims arising from the alleged failure of our products to prevent the types of personal injury or death against which they are designed to protect.
Single incident product liability claims. Single incident product liability claims involve incidents of short duration that are typically known when they occur and involve observable injuries, which provide an objective basis for quantifying damages. Management has established reserves for the single incident product liability claims of the Company's various subsidiaries, including asserted single incident product liability claims and incurred but not reported ("IBNR") single incident claims. To determine the reserves, Management makes reasonable estimates of losses for single incident claims based on the number and characteristics of asserted claims, historical experience, sales volumes, expected settlement costs, and other relevant information.
Cumulative trauma product liability claims. Cumulative trauma product liability claims involve alleged exposures to harmful substances (e.g., silica, asbestos and coal dust) that occurred years ago and may have developed over long periods of time into diseases such as silicosis, asbestosis, mesothelioma, or coal worker’s pneumoconiosis. A former subsidiary of the Company, Mine Safety Appliances Company, LLC ("MSA LLC"), which was divested as described below, has been named as a defendant in various lawsuits related to such claims. These lawsuits mainly involve respiratory protection products allegedly manufactured and sold by MSA LLC or its predecessors.
On January 5, 2023, the Company entered into a membership interest purchase agreement (the “Purchase Agreement”) with a joint venture between R&Q Insurance Holdings Ltd. and Obra Capital, Inc. (the "Purchaser"). Under the Purchase Agreement, on January 5, 2023, the Company transferred to the Purchaser all of the issued and outstanding limited liability company interests of MSA LLC (the “Sale”). In connection with the closing, the Company contributed $341.2 million in cash and cash equivalents, while the Purchaser contributed an additional $35.0 million.
As MSA LLC was the obligor for the claims to which the Company's legacy cumulative trauma product liability reserves relate and the policyholder of the related insurance assets, the rights and obligations related to these items remained with MSA LLC when it transferred to the Purchaser's ownership pursuant to the Purchase Agreement. In addition, pursuant to the Purchase Agreement, the Purchaser and MSA LLC have agreed to indemnify the Company and its affiliates for legacy cumulative trauma product liabilities and other product liabilities, and a subsidiary of the Company has agreed to indemnify MSA LLC for all other historical liabilities of MSA LLC. This indemnification is not subject to any cap or time limitation. In connection with the Sale, the Company and its Board of Directors received a solvency opinion from an independent advisory firm that MSA LLC was solvent and adequately capitalized after giving effect to the transaction.
Following the completion of the transaction, the Company no longer has any obligation with respect to pending and future cumulative trauma product liability claims relating to these matters. As such, all legacy cumulative trauma product liability reserves, related insurance assets, and associated deferred tax assets of the divested subsidiary were derecognized from our balance sheet and the Company incurred a tax-effected loss on the divestiture of MSA LLC of $199.6 million, including transaction related costs of $5.6 million. The Purchaser assumed management of the divested subsidiary, including the management of its claims and associated assets.
Below is a summary of the impact of the divestiture of MSA LLC on our Consolidated Statements of Income for the year ended December 31, 2023:
(In millions) Year Ended December 31, 2023
Cash and cash equivalents $ (341.2)
Current insurance receivables (17.3)
Notes receivable, insurance companies (5.9)
Noncurrent insurance receivables (110.3)
Notes receivable, insurance companies, noncurrent (38.7)
Current product liability 65.1
Noncurrent product liability 324.7
Loss on divestiture of MSA LLC before transaction costs (123.6)
Transaction costs (5.6)
Loss on divestiture of MSA LLC (129.2)
Income tax expense (a)
(70.4)
Tax-effected loss on divestiture of MSA LLC $ (199.6)
(a) Related to the write-off of deferred tax asset related to product liability reserve
Other Litigation
Globe, a subsidiary of the Company, is defending claims in which plaintiffs assert that certain products allegedly containing per- and polyfluoroalkyl substances (“PFAS”) have caused harm, including injury or health issues. PFAS are a large class of substances that are widely used in everyday products. Specifically, Globe builds firefighter turnout gear from technical fabrics sourced from a small pool of specialty textile manufacturers. These protective fabrics have been tested and certified to meet current National Fire Protection Association safety standards, and some of them as supplied to Globe contain or historically have contained PFAS to achieve performance characteristics such as water, oil, or chemical resistance.
Globe believes it has valid defenses to these claims. These matters are at a very early stage with numerous factual and legal issues to be resolved. Defense costs relating to these lawsuits are recognized in the Consolidated Statements of Income as incurred. Globe is also pursuing insurance coverage and indemnification related to the lawsuits. As of February 4, 2025, Globe was named as a defendant in approximately 663 lawsuits comprised of about 8,801 claims, predominantly styled as individual personal injury claims and including two putative class actions. Certain of these lawsuits include MSA Safety Inc. or other Globe affiliates as defendants.
MSA LLC is also a defendant in a number of PFAS lawsuits predominantly relating to Aqueous Film-Forming Foam. The Purchaser assumed responsibility for these and any similar future claims specific to MSA LLC, including such claims that have been or may be brought against MSA Safety Inc. or its subsidiaries, under the terms of the Purchase Agreement governing the Company's January 5, 2023, divestiture of MSA LLC. Further information about the transaction can be found in the Company’s Current Report on Form 8-K filed on January 6, 2023.
Product Warranty
The Company provides warranties on certain product sales. Product warranty reserves are established in the same period that revenue from the sale of the related products is recognized, or in the period that a specific issue arises as to the functionality of the Company's product. The determination of such reserves requires the Company to make estimates of product return rates and expected costs to repair or to replace the products under warranty.
The amounts of the reserves are based on established terms and the Company's best estimate of the amounts necessary to settle future and existing claims on products sold as of the balance sheet date. If actual return rates and/or repair and replacement costs differ significantly from estimates, adjustments to recognize additional cost of sales may be required in future periods.
The following table reconciles the changes in the Company's accrued warranty reserve:
December 31,
(In thousands) 2024 2023 2022
Beginning warranty reserve $ 14,288 $ 15,230 $ 12,423
Warranty payments (11,802) (9,794) (10,631)
Warranty claims, current 10,684 9,128 14,274
Warranty claims, preexisting 765 (614) 504
Currency translation and other adjustments (211) 338 (1,340)
Ending warranty reserve $ 13,724 $ 14,288 $ 15,230
Warranty expense for the years ended December 31, 2024, 2023 and 2022 was $11.2 million, $8.9 million and $13.4 million, respectively, and is included in Costs of products sold on the Consolidated Statements of Income.
Note 21-Quarterly Financial Information (Unaudited)
Quarters
(In thousands, except per share amounts) 1st 2nd 3rd 4th Year
Net sales $ 413,302 $ 462,463 $ 432,679 $ 499,696 $ 1,808,140
Gross profit 195,531 223,029 207,456 234,429 860,445
Net income 58,139 72,234 66,648 87,946 284,967
Earnings per share(1)
Basic $ 1.48 $ 1.83 $ 1.69 $ 2.23 $ 7.24
Diluted 1.47 1.83 1.69 2.22 7.21
Quarters
(In thousands, except earnings per share) 1st 2nd 3rd 4th Year
Net sales $ 398,262 $ 447,299 $ 446,728 $ 495,358 $ 1,787,647
Gross profit 181,398 213,796 218,761 238,183 852,138
Net (loss) income (150,173) 67,090 65,256 76,410 58,583
Earnings per share(1)
Basic $ (3.83) $ 1.71 $ 1.66 $ 1.94 $ 1.49
Diluted (3.83) 1.70 1.65 1.93 1.48
(1) Per share amounts are calculated independently for each period presented; therefore, the sum of the quarterly per share amounts may not equal the per share amounts for the year.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. Controls and Procedures
(a) Evaluation of disclosure controls and procedures. Based on their evaluation as of the end of the period covered by this Form 10-K, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to our management, including the principal executive officer and principle financial officer, as appropriate to allow timely decisions regarding required disclosure.
(b) Changes in internal control. There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
See Item 8. Financial Statements and Supplementary Data-“Management’s Report on Internal Control Over Financial Reporting” and “Report of Independent Registered Public Accounting Firm.”

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ITEM 9B. OTHER INFORMATION
Item 9B. Other Information
During the three months ended December 31, 2024, no director or officer of the Company, nor the Company itself, adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. Directors, Executive Officers and Corporate Governance

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions, and Director Independence

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accountant Fees and Services
With respect to this Part III, incorporated by reference herein pursuant to Rule 12b-23 are (1) “Election of Directors,” (2) “Executive Compensation,” (3) “Corporate Governance Matters,” (4) “Stock Ownership,” and (5) “Selection of Independent Registered Public Accounting Firm,” appearing in the Proxy Statement filed pursuant to Regulation 14A in connection with the registrant’s Annual Meeting of Shareholders to be held on May 13, 2025. The information appearing in such Proxy Statement under the caption “Audit Committee Report” and the other information appearing in such Proxy Statement and not specifically incorporated by reference herein is not incorporated herein. As to Item 10 above, also see the information reported in Part I of this Form 10-K, under the caption “Information about our Executive Officers,” which is incorporated herein by reference. As to Item 10 above, the Company has adopted a Code of Ethics applicable to its principal executive officer, principal financial officer and principal accounting officer and other Company officials. The text of the Code of Ethics is available on the Company’s website at www.MSAsafety.com. Any amendment to, or waiver of, a required provision of the Code of Ethics that applies to the Company’s principal executive, financial or accounting officer will also be posted on the Company’s Internet site at that address.
As to Item 12 above, the following table sets forth information as of December 31, 2024, concerning common stock issuable under the Company’s equity compensation plans.
Plan Category Number of securities
to be issued upon
exercise of
outstanding
options,
warrants and rights
(a) Weighted average
exercise price of
outstanding options,
warrants and rights
(b) Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column (a))
(c)
Equity compensation plans approved by security holders 15,018 $ 45.10 1,927,766 *
Equity compensation plans not approved by security holders None - None
Total 15,018 45.10 1,927,766
*Includes 1,772,153 shares available for issuance under the 2023 Management Equity Incentive Plan, 87,209 shares available for issuance under the 2024 Non-Employee Directors’ Equity Incentive Plan, and 68,404 shares available for issuance under the 2014 MSA Employee Stock Purchase Plan.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits and Financial Statement Schedules
(a) 1. Financial Statements and Report of Independent Registered Public Accounting Firm (see Part II, Item 8 of this Form 10-K).
The following information is filed as part of this Form 10-K.
Page
Management's Report on Responsibility for Financial Reporting and Management's Report on Internal Control Over Financial Reporting
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)
Consolidated Statements of Income-three years ended December 31, 2024 40
Consolidated Statements of Comprehensive Income-three years ended December 31, 2024 41
Consolidated Balance Sheets-December 31, 2024 and 2023 42
Consolidated Statements of Cash Flows-three years ended December 31, 2024 43
Consolidated Statements of Changes in Retained Earnings and Accumulated Other Comprehensive Income-three years ended December 31, 2024 44
Notes to Consolidated Financial Statements
(a) 2. The following additional financial information for the three years ended December 31, 2024, is filed with the report and should be read in conjunction with the above financial statements:
Schedule II-Valuation and Qualifying Accounts
All other schedules are omitted because they are not applicable, not material or the required information is shown in the consolidated financial statements and consolidated notes to the financial statements listed above.
(a) 3. Exhibits
Several of the following exhibits are incorporated herein by reference under Rule 12b-32 of the Securities Exchange Act of 1934, as amended, as indicated next to the name of the exhibit. Several other instruments, which would otherwise be required to be listed below, have not been so listed because those instruments do not authorize securities in an amount that exceeds 10% of the total assets of the registrant and its subsidiaries on a consolidated basis. The registrant agrees to furnish a copy of any instrument that was so omitted on that basis to the Commission upon request.
3(i) Amended and restated Articles of Incorporation, filed as Exhibit 3.1 to Form 8-K on March 7, 2014, is incorporated herein by reference.
3(ii) Amended and restated By-laws of the registrant, filed as Exhibit 3.1 to Form 8-K on November 2, 2023, is incorporated herein by reference.
4(d) Description of MSA Safety Incorporated Securities Registered under Section 12 of the Securities Exchange Act of 1934, as amended, filed as Exhibit 4(d) to Form 10-K on February 20, 2020, is incorporated herein by reference.
10(a)* MSA Safety Incorporated Amended and Restated 2016 Management Equity Incentive Plan, filed as Appendix A to the registrant’s definitive proxy statement dated March 31, 2016, is incorporated herein by reference.
10(b)* Retirement Plan for Directors, as amended effective April 1, 2001, filed as Exhibit 10(a) to Form 10-Q on May 10, 2006, is incorporated herein by reference.
10(c)* Supplemental Pension Plan as of May 5, 1998, filed as Exhibit 10(d) to Form 10-Q on August 12, 2003, is incorporated herein by reference.
10(d)* Supplemental Pension Plan as amended and restated effective January 1, 2005, filed as Exhibit 10.3 to Form 10-Q on April 30, 2009, is incorporated herein by reference.
10(e)* 2024 Non-Employee Directors’ Equity Incentive Plan, filed as Exhibit A to the registrant's definitive proxy statement dated March 28, 2024, is incorporated herein by reference.
10(f)* MSA Safety, Inc. Executive Incentive Plan as of January 1, 2023, filed as Exhibit 10(g) to Form 10-K on February 16, 2024, is incorporated by reference.
10(g)* Supplemental Executive Retirement Plan, effective January 1, 2008, filed as Exhibit 10.2 to Form 10-Q on April 30, 2009, is incorporated herein by reference.
10(h)* Form of Change-in-Control Severance Agreement between the registrant and its executive officers, filed as Exhibit 10.1 to Form 10-Q on April 30, 2009, is incorporated herein by reference.
10(i)* 2003 Supplemental Savings Plan, effective January 1, 2003, filed as Exhibit 10(k) to Form 10-K on February 24, 2014, is incorporated herein by reference.
10(j)* 2005 Supplemental Savings Plan, as amended and restated, effective June 1, 2022, is incorporated herein by reference.
10(k)* MSA Safety Incorporated Amended and Restated 2023 Management Equity Incentive Plan, filed as Appendix A to the registrant’s definitive proxy statement dated March 30, 2023, is incorporated herein by reference.
10(l)* Form of MSA Safety Incorporated 2023 Management Equity Incentive Plan Performance Stock Unit agreement between the registrant and its executive officers is filed herewith.
10(m)* Form of MSA Safety Incorporated 2023 Management Equity Incentive Plan Restricted Stock Unit agreement between the registrant and its executive officers is filed herewith.
10(n)* Form of MSA Safety Incorporated 2024 Non-Employee Directors' Equity Incentive Plan Restricted Stock agreement between the registrant and Non-employee Directors' is filed herewith.
10(o)* 2019 MSA Safety Incorporated Deferred Compensation Program for Non-employee Directors' is filed herewith.
10(p) Fourth Amended and Restated Credit Agreement, dated as of May 24, 2021, by and among MSA Safety Incorporated, MSA UK Holdings Limited, MSA Great Britain Holdings Limited, MSA International Holdings B.V., as borrowers, various MSA subsidiaries, as guarantors, various financial institutions, as lenders, and PNC Bank National Association, as administrative agent, filed as Exhibit 10.1 to Form 8-K/A on May 26, 2021, is incorporated herein by reference.
10(q) Third Amended and Restated Multi-Currency Note Purchase and Private Shelf Agreement dated July 1, 2021 with PGIM, Inc. and the noteholders party thereto, filed as Exhibit 10.1 to Form 8-K/A on July 16, 2021, is incorporated herein by reference.
10(r) Second Amended and Restated Master Note Facility dated as of July 1, 2021 with NYL Investors LLC and the noteholders party thereto, filed as Exhibit 10.2 to Form 8-K/A on July 16, 2021, is incorporated herein by reference.
10(s) Credit Agreement, dated January 5, 2023, by and among the Company, as borrower, various Company subsidiaries, as guarantors, various financial institutions, as lenders, and PNC Bank, National Association, as administrative agent, filed as Exhibit 10.2 to Form 8-K on January 6, 2023, is incorporated herein by reference.
10(t) Amendments to Fourth Amended and Restated Credit Agreement, dated May 24, 2021, as amended, among the Company, the other Borrowers party thereto, the Guarantors party thereto, the Lenders party thereto and PNC Bank, National Association, as Administrative Agent, filed as Exhibit 10.3 to Form 8-K on January 6, 2023, is incorporated herein by reference.
10(u) Amendment No. 1 and Consent to Third Amended and Restated Multicurrency Note Purchase and Private Shelf Agreement, dated as of December 30, 2022, among MSA Safety Incorporated, each of the Guarantors signatory hereto, PGIM, INC. and each of the holders of Notes, filed as Exhibit 10.4 to Form 8-K on January 6, 2023, is incorporated herein by reference.
10(v) Amendment No. 1 and Consent to Second Amended and Restated Master Note Facility, dated as of December 30, 2022, among MSA Safety Incorporated, each of the Guarantors signatory hereto, NYL Investors LLC and each of the holders of Notes, filed as Exhibit 10.5 to Form 8-K on January 6, 2023, is incorporated herein by reference.
19 MSA Safety Incorporated Global Insider Trading Policy is filed herewith.
21 Affiliates of the registrant is filed herewith.
23 Consent of Ernst & Young LLP, independent registered public accounting firm is filed herewith.
31.1 Certification of Steven C. Blanco pursuant to Rule 13a-14(a) is filed herewith.
31.2 Certification of Lee B. McChesney pursuant to Rule 13a-14(a) is filed herewith.
32 Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.§1350 is filed herewith.
97 MSA Safety Incorporated Mandatory Recoupment Policy filed as Exhibit 97 to Form 10-K on February 16, 2023 is incorporated herein by reference.
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
*The exhibits marked by an asterisk are management contracts or compensatory plans or arrangements.