MSA 10-K & 10-Q changes, risk factors and insider trading

We are subject to various environmental lawslaws, regulations and ordinances, any violation of these lawswhich 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 and restrictions to same), 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 governancesustainability activities and disclosures.

EnvironmentalSustainability social and governance, often referred to as ESG, has continuedcontinues to be an evolving area of focus from investors, customers, employees, and lawmakers, who at times may have competing, inconsistent, or varying interests. ESG-related regulationsRegulations at both state and national levels are requiring heightened attention, including climate-related disclosures. As reporting and disclosure requirementsalso continue to evolve,evolve. theThe Company anticipates increasingcontinued investorstakeholder expectations and additionalchanging regulatory requirements, among other demands related to our ESG activities.demands. Failure to accurately and timely meet these expectations and requirements may result in reputational damage, regulatory penalties and litigation among other consequences.

The U.S. Congress, the OrganizationOrganisation 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 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, unavailability, 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 productivityproductivity, execute restructuring programs (such as to improve profitability), reduce complexity, and reducemeet complexityother operating objectives 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 activities 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 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,Asia Pacific, 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.

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 customerscustomers, prolonged or recurring government shutdowns or reductions in government staffing, 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 or staffing could result in declines in our consolidated results of operations and cash flow. Moreover, our operations rely on timely interactions with government agencies, including but not limited to those that govern our product and regulatory approvals, and prolonged or recurring government shutdowns or staffing reductions could negatively impact our consolidated results of operations and cash flow or regulatory approvals and compliance functions.

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.solutions among other lines of business. 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 on our business, consolidated results of operations and financial condition. In addition, e-commercedigital iscommerce acontinues rapidlyto developing area,evolve and the execution of a successful e-business strategy involves significant time, investment and resources. If we are unable to successfully expand e-businessdigital commerce capabilities in support of our customer needs, our brands may lose market share, which could negatively impact revenue and profitability.

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 asfrom well as programsyear to adjust our operations in response to current business conditions.year. 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.

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,frames, 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,terms and avoid transaction-related disputes, 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.

In the safety products and solutions market, there are frequent introductions of new products, product line extensions, and related technologies and 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.

The proper functioning and security of our information systems is critical to the operation and reputation of our business. This also includes the systems that support and operate our GRID, FireGRID, and similar connected products and 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 operationsoperations, impair our data and/or data access, and/or result in a violation of applicable data protectionprotection, data security and other laws,laws. Such a failure could also include 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.systems, even with mitigation protocols and available insurance. It is therefore possible that we may suffer a cyber attackcyber-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.

If we lose any of our key personnel or are unable to attract, train and/or retain qualified personnelemployees for our global workforce 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,personnel engineering,within salesour andglobal marketing and other key personnel,workforce, 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. IfWe wecompete arewith unableother tocompanies attract,both effectively integratewithin and retain management, engineering, sales and marketing or other key personnel, then the executionoutside of our companyindustry strategyin a highly competitive labor market to hire new personnel with a variety of capabilities in the many countries in which we design, manufacture and market our ability to adaptproducts and react to changing market requirements may be impeded, and our business could suffer as a result.solutions.

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, face challenges attracting or retaining qualified 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 andbase, erode our competitiveness.competitiveness and hinder our strategic planning and execution including the successful implementation and completion of our company initiatives. The loss of any key employee could result in significant disruptions to our operations, including increased costs and time of training, replacement and integration, adversely affecting the timeliness of product releases, the effectiveness of our disclosure controls and procedures, our internal control over financial reporting, and the results of our operations. We are also subject to the negative effects of labor shortages affecting our third-party partners and service providers.

WeAdditionally, 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. Failurefailure 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.

We have significant international operations andoperations, are subject to the risks of doing business in foreign countries and global supply chains.chains, and may be impacted by external factors including those we may be unable to control.

We have business operations in more than 40 international locations. In 2024,2025, approximately 40%50% of our net sales were made by operations located outside the United States. There is a high level of uncertainty surrounding future global economic conditions due to a number of factors, such as geopolitical uncertainty, including the international impacts of ongoing wars, civil conflict and terrorism, commodity market volatility, potential changes to international trade agreements, the imposition of tariffs and the threat of additional tariffs, natural disasters, pandemics and public health events. 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,disruption, which could have a material adverse effect on our business.business, Furtherconsolidated examplesresults of suchoperations and financial condition. As a result of our operations outside the United States, we are subject to certain additional inherent risks includeincluding the following:

•nationalization and expropriation of assets (or laws that effectively result in the same);

•costs and difficulties in managing culturally and geographically diverse international operations; and

If our goodwill, other intangible assets and long-lived assets become impaired, we may be required to record significant non-cash 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 impairmentnon-cash 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 reportingreportable segments and details on indefinite-lived intangible assets that we hold.

New and emerging technologies, including Generative AI, bring opportunities and risks, and the implications of using (or not using) these technologies are only startingcontinue to emerge.rapidly change. 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.

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,exchange rates, and our profitability, which in turn may have a material adverse effect on our liquidity and capital resources. As of December 31, 2024,2025, we had $206.3$285.3 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$1.9 million of additional interest expense.

MSA Safety Incorporated ("MSA") is organized into four geographical operating segments that are aggregated into threetwo reportable segments: Americas, InternationalAmericas and Corporate.International. 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.

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 threetwo reportable segments: Americas, InternationalAmericas and Corporate.International. In 2024,2025, 69%67% and 31%33% of our net sales were made by our Americas and International segments, respectively.

Corporate. The Corporate segmentexpenses primarilynot consistsallocated to the reportable segments consist of general and administrative expenses incurred in our corporate headquarters, costs associated with corporate development initiatives, legal expense, interest expense, foreign exchange gains or losses and other centrally-managed costs. Corporate generalGeneral and administrative costs and overhead comprise the majority of the expensecorporate inrelated the Corporate segment.expenses. During the years ended December 31, 2024,2025, and 2023,2024, corporate general and administrative costsexpenses were $56.3$43.4 million and $52.7$50.4 million, respectively. The increasedecrease is related to higherlower costsprofessional forservice centrally managed functions, including legalfees and variable compensation as well as other professionaldiscretionary servicesexpense associated with various strategic initiatives,management partially offset by lower variable compensation expense.inflation.

Net sales for the International segment were $613.0 million for the year ended December 31, 2025, an increase of $51.5 million, or 9.2%, compared to $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, 2023.2024. Organic sales in the International segment increased 1.5%1.4% compared to the prior year period. This growthincrease was driven by strengthgrowth acrossin firedetection serviceprimarily in China and Europe and to a lesser extent industrial PPE partially offset by a modest decline in industrialfire PPE.service due to budgetary shifts within key European markets. M&C added $27.9 million of sales to the International segment during the period.

Gross profit. Gross profit for the year ended December 31, 2024,2025, was $860.4$871.1 million, an increase of $8.3$10.7 million, or 1.0%,1.2%, compared to $852.1$860.4 million for the year ended December 31, 2023.2024. The ratio of gross profit to net sales was 47.6%46.5% in 20242025 compared to 47.7%47.6% in 2023.2024. PriceThe realizationdecrease in gross profit margin is primarily related to inflation, transactional foreign currency challenges, tariffs and productivityadditional effortsamortization mostlyrelated to the M&C acquisition partially offset inflationaryby pressures.price realization, product mix and improved productivity.

Selling, general and administrative expenses. Selling, general and administrative ("SG&A") expenses were $414.3 million for the year ended December 31, 2025, an increase of $19.6 million, or 5.0%, compared to $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, 2023.2024. Selling, general and administrative expenses were 22.1% of net sales in 2025 compared to 21.8% of net sales in 2024 compared to 22.2% of net sales in 2023.2024. Organic SG&A wasdecreased consistent$8.6 frommillion, 2023or to2.2%, 2024.driven Lowerprimarily variableby compensationthe andabsence discretionaryof cost management offset inflation,the net cost for product-relateda product related legal matter from the prior year, lower variable compensation, discretionary expense management and higherlower professional service expenses.costs Pleasepartially referoffset toby the Selling, generalinflation and administrativehigher expensessales table for a reconciliation of the year over yearcommission expense change.on double-digit detection growth.

Restructuring charges. During the year ended December 31, 2024,2025, the Company recorded restructuring charges of $3.9 million primarily related to initiatives to right-size the organization in response to macroeconomic conditions and ongoing initiatives to optimize our manufacturing footprint and improve productivity. This compared to restructuring charges of $6.4 million during the year ended December 31, 2024, 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 $15.8 million during the year ended December 31, 2025, compared to $3.6 million during the year ended December 31, 2024, compared to $17.1 million during the year ended December 31, 2023.2024. In 2025 and 2024, we recognized non-cash net cumulative translation gains of $0.8 million and $1.2 millionmillion, respectively, 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.

GAAP operating income. Consolidated operating income for the year ended December 31, 2024,2025, was $389.2$371.8 million compared to $231.3$389.2 million for the year ended December 31, 2023.2024. The increasedecrease in operating results was primarily driven by theincreased absenceSG&A ofexpenses lossand oncurrency divestitureexchange oflosses, MSApartially LLCoffset by higher sales and lower restructuring charges as recognizeddiscussed infurther 2023 in addition to higher sales.above.

Adjusted operating income. Americas adjusted operating income for the year ended December 31, 2024,2025, was $380.1$364.8 million, ana increasedecrease of $20.5$15.3 million, or 6%,4%, compared to $359.6$380.1 million for the year ended December 31, 2023.2024. The increasedecrease in adjusted operating income is primarily attributable to higherlower salesgross profit and effective price/cost management as well as controlledhigher SG&A expense.expenses.

International adjusted operating income for the year ended December 31, 2024,2025, was $84.6$93.3 million, aan decreaseincrease of $5.1$8.7 million, or 6%,10%, compared to adjusted operating income of $89.7$84.6 million for the year ended December 31, 2023.2024. The decreaseincrease in adjusted operating income is primarily attributable tohigher inflationarysales pressures,volumes, including the contribution from M&C, and discretionary cost management partially offset by pricinghigher andSG&A discretionaryexpense costdue management.to inflationary pressures.

Corporate segmentexpenses adjustedfor operatingthe lossyear ended December 31, 2025, were $43.4 million, a decrease of $7.0 million, or 14%, compared to $50.4 million 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 professional service fees and variable compensation as well as other discretionary expense management partially offset by inflation and increased professional service fees associated with various strategic initiatives.inflation.

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.

Total other expense, net. Total other expense, net, for the year ended December 31, 2024,2025, was $14.2$5.4 million, a decrease of $10.4$8.8 million compared to $24.6$14.2 million for the year ended December 31, 2023,2024, duedriven primarily toby decreased interest expense onrelated reducedto debtlower balancesinterest rates 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.return. We expect total interest expense for 20252026 to be in the range of $24$28 million to $27$31 million. This decrease for 2026 is primarily related to significant long-term debt payments made during 2024.2025. We expect non-cash pension and other post-retirement benefits income to increase by $4 million to $5 million compared to 2024.2025.

Income taxes. The reported effective tax rate for the year ended December 31, 2024,2025, was 24.0%23.9% compared to 71.6%24.0% for the year ended December 31, 2023.2024. ThisThe significantdecrease variance is primarily due tofrom the prior year divestiturewas ofprimarily MSAdriven LLCby anda the non-deductible loss recorded on the derecognition of the product liability reserves and related assets. Refer to Note 20— Contingencies to consolidated financial statementsdecrease in Partstate IIincome Itemtaxes, 8partially ofoffset thisby Formone-time 10-Kbenefits forin furtherforeign informationjurisdictions onin the MSA LLC divestiture.2024.

The Organization for Economic Co-operation and Development (OECD) has a framework to implementfor a global minimum corporate tax rate of 15% for companies with global revenues above €750.0 million (referred to as Pillar 2), with effective dates beginning in January 2024.2024, has been enacted by a number of foreign jurisdictions. We meet the overall revenue threshold and fall within the scope of Pillar 22. and asAs such, we have complied with the requirements of the legislation forand the year ended December 31, 2024. The application of Pillar 2 resulted in additional tax expense of $2.2 million and $1.1 million.million, for the years ended December 31, 2025 and 2024, respectively.

Non-GAAP Financial InformationMeasures

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) revenuesales growth,change, organic SG&A change, adjusted operating income (loss),income, adjusted operating margin %, adjusted EBITDA and adjusted EBITDA margin %.

Organic sales and SG&A change are non-GAAP financial measures provided by the Company to give a better understanding of the Company's underlying business performance. Organic sales and SG&A change are calculated by deducting the percentage impact from currency translation effects as well as the impact from acquisitions and divestitures completed in the preceding 12 months from the overall percentage change in net sales and SG&A. The Company believes that organic revenue growthsales 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 growthsales and SG&A change highlight ongoing business performance excluding the impact of fluctuating foreign currencies, whichacquisitions isand outside of the Company's control.divestitures.

Adjusted operating income (loss),income, adjusted operating margin %, adjusted EBITDA and adjusted EBITDA margin % are non-GAAP financial measures and operating ratios derived from non-GAAP measures. Total reportable segment adjusted operating income is reconciled above to the nearest GAAP financial measure, operating income, and excludes restructuring, currency exchange, 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. TheseManagement metricsuses arethese consistentmeasures withinternally howto management evaluates segment resultsassess and makesbetter understand our underlying business performance and trends related to core business activities as well as to make strategic decisions about the business.business and allocate resources. 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.

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, 2024,2025, approximately 60%51% 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 aan termunsecured loanrevolving credit facility due in 2026.2030. At December 31, 2024,2025, approximately 89%81% of our borrowings are denominated in US dollars, which limits our exposure to currency exchange rate fluctuations.

We believe MSA's healthy balance sheet and access to significant capital at the year ended December 31, 2024,2025, positions us well to navigate through a dynamic operating environment and other unexpected events. We maintain a balanced capital deployment strategy that focuses on investing for organic growth,growth and pursuing inorganic growth opportunities, returning cash to shareholders in the form of dividends and share buybacks, and pursuing inorganic growth opportunities.buybacks.

Investing activities. Investing activities used cash of $53.8$257.6 million for the year ended December 31, 2024,2025, compared to using $40.0$53.8 million in 2023.2024. The acquisition of M&C for $189 million and capital expenditures of $68.4 million, including a $19.6 million strategic footprint investment, drove the increase in cash usedoutflows infrom investing activities as compared toduring the sameyear periodended inDecember 202331, 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.2025. 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$105.5 million for the year ended December 31, 2024,2025, compared to using cash of $52.3$208.7 million in 2023.2024. During 2024,2025, we had net payments on long-term debt of $94.3 million compared to net proceeds from long-term debt of $23.9$67.3 million, used primarily to fund the M&C acquisition, compared to net payments of $94.3 million during the same period in 2023 to fund the MSA LLC divestiture.2024. We paid cash dividends of $82.3 million during 2025, compared to $78.8 million during 2024, compared to $73.5 million during 2023.2024. We used cash of $90.0 million during 2025 to repurchase shares, including $80.0 million related to our share repurchase program compared to using $37.3 million during 2024 to repurchase shares,2024, including $29.9 million related to our share repurchase program,program. and theThe remainder in both periods related to our employee stock compensation transactions compared to $4.0 million during 2023, all of which related to employee stock compensation transactions.

The position of the U.S. dollar relative to international currencies, primarily the euro,euro and British pound, at December 31, 2024,2025, resulted in a translation lossgain of $42.5$68.3 million being recorded to cumulative translation adjustments shareholders' equity account for the year ended December 31, 2024,2025, compared to a translation gainloss of $21.7$42.5 million being recorded to the cumulative translation adjustments account during 2023.2024.

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.

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 $731.6 million of goodwill on our Consolidated Balance Sheet as of December 31, 2025, is primarily comprised of $480.4 million at the Northern North America reporting unit and $247.8 million at the Europe reporting unit. The evaluation of impairment involves using either a qualitative or quantitative approach as outlined in Accounting Standards Codification ("ASC") Topic 350. In 2024,2025, we performed a quantitative test at October 1, 2024.2025. 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.

Three Months Ended MarchJune 31,30, 2026, Compared to Three Months Ended MarchJune 31,30, 2025

Net Sales. Net sales for the three months ended MarchJune 31,30, 2026, were $463.6$503.3 million, an increase of $42.3$29.2 million, or 10.0%,6.2%, compared to $421.3$474.1 million in the same period of 2025. Please refer to the Net Sales table below for a reconciliation of the periodquarter over periodquarter sales change.

Net sales for the Americas segment were $325.2$666.7 million in the threesix months ended MarchJune 31,30, 2026, an increase of $32.1$53.4 million, or 11.0%,8.7%, compared to $293.1$613.3 million in the same period of 2025. Organic sales in the Americas segment increased 7.2%5.8% during the period, driven by growth in all three product groups with high single digit expansion in both detection and fireindustrial service.PPE. M&C added $5.3$7.3 million of sales to the Americas segment during the period.period as compared to prior year.

Net sales for the International segment were $138.4$300.3 million in the threesix months ended MarchJune 31,30, 2026, an increase of $10.2$18.1 million, or 8.0%,6.4%, compared to $128.2$282.2 million in the same period of 2025. Organic sales in the International segment decreased 6.8%3.0% during the period, resulting from double-digit declinedeclines in detection and fire service and detection largely driven by order timing, economic conditions in Europe, and the conflict in the Middle EastEast, partially offset by growth in industrial PPE.PPE, primarily due to higher protective ballistic helmet sales in Europe. M&C added $9.6$13.3 million of sales to the International segment during the period.period as compared to prior year.

Gross profit. Gross profit for the threesix months ended MarchJune 31,30, 2026, was $219.6$468.9 million, an increase of $26.2$54.8 million or 13.5%,13.2%, compared to $193.4$414.1 million in the same period of 2025. The ratio of gross profit to net sales was 47.4%48.5% during the threesix months ended MarchJune 31,30, 2026, compared to 45.9%46.2% in the same period of 2025. The increase in gross profit margin is primarily related to price realization, productivity, product mix, and favorable transactional foreign currencycurrency, partially offset by inflation,higher net tariffs and inflation and additional amortization related to the M&C acquisition.

Selling, general and administrative expenses. Selling, general and administrative (“SG&A”) expenses were $107.7$221.8 million during the threesix months ended MarchJune 31,30, 2026, an increase of $13.7$15.8 million or 14.6%,7.6%, compared to $94.0$206.0 million in the same period of 2025. Overall, SG&A expenses were 23.2%22.9% of net sales during the threesix months ended MarchJune 31,30, 2026, compared to 22.3%23.0% of net sales in the same period of 2025. SG&A for 2026 includes $5.5$8.0 million of additional expenses associated with M&C operations as compared to the prior year. SG&A also includes $3.9 million and $2.2$8.1 million of strategic transaction costs.costs in the six months ended 2026 and 2025, respectively. Organic SG&A increased $4.3$7.7 million or 4.6%,3.9%, driven primarily by higher variable compensation largely due to the cancellation of unvested equity awards in the prior period in accordance with plan terms,compensation, higher professional service costscosts, and inflation.inflation, partially offset by discretionary expense management.

Research and development expense. Research and development expense was $16.4$35.5 million during the threesix months ended MarchJune 31,30, 2026, an increase of $0.7$2.8 million, compared to $15.7$32.7 million in the same period of 2025. Research and development expense was 3.5%3.7% of net sales in the threesix months ended MarchJune 31,30, 2026, and 3.7%3.6% of net sales in the same period of 2025.

During the threesix months ended MarchJune 31,30, 2026, and 2025, we capitalized $4.2$7.9 million and $3.3$6.7 million of software development costs, respectively. Amortization expense for capitalized software development costs of $3.3$6.6 million and $2.9$6.0 million during the threesix months ended MarchJune 31,30, 2026, and 2025, respectively, was recorded in costs of products sold on the unaudited Condensed Consolidated Statements of Income.

The Company's commitment to innovation is supported by a research and development pipeline focused on integrating advanced technology into core safety equipment. Approximately half of MSA’s R&D engineers are now focused on software development to support the expansion of its connected ecosystems and HeSaaS models. As we continue to invest a significant portion of our new product development into technology-based safety solutions, we anticipate that the historical relationship of research and development expense to net sales will continue to evolve; however, we do not anticipate reductions in the relative level of total spend on research and development activities on an annual basis. Total spend on both software development and research and development activities was $20.6$43.4 million and $19.0$39.4 million during the threesix months ended MarchJune 31,30, 2026, and 2025, respectively.

Restructuring charges. Restructuring charges of $2.3$4.5 million during the threesix months ended MarchJune 31,30, 2026, were primarily related to management restructuring, footprint optimizationoptimization, and other ongoing initiatives to right-size the organization in response to macroeconomic conditions. Restructuring charges of $1.9$2.4 million in the same period of 2025 were primarily related to initiatives to right-size the organization in response to macroeconomic conditions, optimize our manufacturing footprintfootprint, and improve productivity.

Currency exchange losses, net. Currency exchange losses were $0.2$2.1 million during the threesix months ended MarchJune 31,30, 2026, compared to $4.1$9.4 million in the same period of 2025. The currency exchange activity for both periods related primarily to foreign currency exposure on unsettled inter-company balances. Refer to Note 17—Derivative Financial Instruments to the unaudited condensed consolidated financial statements in Part I Item 1 of this Form 10-Q, for information regarding our currency exchange rate risk management strategy.

GAAP operating income. Consolidated operating income for the threesix months ended MarchJune 31,30, 2026, was $93.0$205.0 million compared to $77.8$163.6 million in the same period of 2025. The increase in operating results was primarily driven by higher gross profit and lower currency exchange losseslosses, partially offset by higher SG&A and restructuring charges as discussed further above.

Adjusted operating income. Americas adjusted operating income for the threesix months ended MarchJune 31,30, 2026, was $98.1$207.2 million, an increase of $19.4$35.2 million, or 24.7%,20.5%, compared to $78.7$172.0 million in the same period of 2025. The increase in adjusted operating income is attributable to increased sales and higher gross profit driven by price realization, productivity, and favorable transactional foreign currency, partially offset by higher SG&A expenses.

International adjusted operating income was $14.5$39.6 million, aan decreaseincrease of $4.2$0.7 million, or 22.3%,1.9%, compared to $18.7$38.9 million in the same period of 2025. LowerThe grossincrease profitwas driven by increased sales and higher SG&A expense were partially offset by the contribution from M&C.

Corporate expenses for the threesix months ended MarchJune 31,30, 2026, was $11.5$24.6 million, an increase of $1.6$2.7 million compared to $9.9$21.9 million in the same period of 2025, driven by increased variable compensation, increased professional service fees and inflation.inflation, partially offset by discretionary expense management.

Total other expense (income),expense, net. Total other expense for the threesix months ended MarchJune 31,30, 2026, was nominal,$0.6 million, compared to other income of $0.2$2.9 million in the same period of 2025. HigherThe interest expensedecrease was mostlyprimarily related to increased pension income, a result of higher expected return on plan assets, which was partially offset by increased pension income driven by a higher expectedinterest rate of return.expense.

Income taxes. The reported effective tax rate for the threesix months ended MarchJune 31,30, 2026, was 23.4%23.0% compared to 23.5%23.8% in the same period of 2025. The slight decrease from the prior year was primarily driven by additional benefitbenefits relatedassociated with the finalization of initial global minimum corporate tax return filings (referred to exportas sales.Pillar 2).

Net income. Net income was $71.3$157.5 million for the threesix months ended MarchJune 31,30, 2026, or $1.83$4.05 per diluted shareshare, an increase of approximately 30%, compared to net income of $59.6$122.4 million, or $1.51$3.10 per diluted share, in the same period of 2025.

This report includes certain non-GAAP financial measures and operating ratios derived from non-GAAP financial measures. These financial measures and ratios include organic (referred to in our historical filings as constant currency) sales change, organic SG&A change, adjusted operating income, adjusted operating margin %, adjusted EBITDAEBITDA, 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 as well as the impact from acquisitions and divestitures completed in the preceding 12 months from the overall percentage change in net sales and SG&A. The Company believes that organic sales 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 sales and SG&A change highlight ongoing business performanceperformance, excluding the impact of fluctuating foreign currencies, acquisitionsacquisitions, and divestitures.

Adjusted operating income, adjusted operating margin %, adjusted EBITDAEBITDA, and adjusted EBITDA margin % are non-GAAP financial measures and operating ratios derived from non-GAAP measures. Total reportable segment adjusted operating income is reconciled above to the nearest GAAP financial measure, operating income, and excludes restructuring, currency exchange, transaction costscosts, and acquisition-related amortization. Total reportable segment adjusted EBITDA is reconciled above to the nearest GAAP financial measure, net incomeincome, 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. 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 make strategic decisions about the business and allocate resources. 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.

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 MarchJune 31,30, 2026, approximately 47%48% of our long-term debt is at fixed interest rates with repayment schedules through 2036. The remainder of our long-term debt is at variable rates on an unsecured revolving credit facility due in 2030. At MarchJune 31,30, 2026, approximately 71%83% of our borrowings are denominated in U.S. dollars, which limits our exposure to currency exchange rate fluctuations.

We believe MSA's healthy balance sheet and access to significant capital at MarchJune 31,30, 2026, positions us well to navigate through a dynamic operating environment and other unexpected events. We maintain a balanced capital deployment strategy that focuses on investing for organic growth and pursuing inorganic growth opportunities, returning cash to shareholders in the form of dividends, and share buybacks.

At MarchJune 31,30, 2026, the Company had cash and cash equivalents totaling $180.2$200.1 million. Cash and cash equivalents increased $15.1$35.0 million during the threesix months ended MarchJune 31,30, 2026, compared to increasingdecreasing $6.1$17.6 million during the same period in 2025. At MarchJune 31,30, 2026, $972.3$986.0 million of the existing $1.3 billion revolving credit facility was unused, including letters of credit issued under the facility. The facility also provides an accordion feature that allows the Company to access an additional $500.0 million of capacity pending approval by MSA’s board of directors and from the bank group. The Company also has access under the Prudential Note Agreement and NYL Note Facility, subject to the issuers' acceptance, to $195.0 million and $50.0 million aggregate principal amount, respectively, of senior unsecured notes.

Operating activities. Operating activities provided cash of $75.7$171.1 million during the threesix months ended MarchJune 31,30, 2026, compared to $61.8$129.1 million during the same period in 2025. The increased cash flow from operating activities was primarily related to higher operating results and lower cash used for variable compensation and other accruals as compared to the prior year, partially offset by higher cash usage for working capital needs.year.

Investing activities. Investing activities used cash of $10.6$23.2 million during the threesix months ended MarchJune 31,30, 2026, compared to using $10.8$227.9 million during the same period in 2025. Capital expenditures drove the decrease in cash outflows from investing activities during the threesix months ended MarchJune 31,30, 2026. The acquisition of M&C for $187.7 million and capital expenditures, including a $19.6 million strategic footprint investment, drove the cash used in investing activities for the six months ended June 30, 2025. We remain committed to evaluating acquisition opportunities thatwhich willwould allowenable us to continue to grow in key end markets and geographies.geographies, and have a robust pipeline.

Financing activities. Financing activities used cash of $47.2$105.9 million during the threesix months ended MarchJune 31,30, 2026, compared to usingproviding cash of $45.6$74.0 million during the same period in 2025. During the threesix months ended MarchJune 31,30, 2026, we had net proceeds on long-term debt of $33.8$20.8 million as compared to net paymentsproceeds of $7.5$165.2 million during the same period in 2025.2025, used primarily to fund the M&C acquisition. We paid cash dividends of $20.6$41.4 million during the threesix months ended MarchJune 31,30, 2026, compared to $20.0$40.9 million in the same period in 2025. We used cash of $60.4$86.4 million during the threesix months ended MarchJune 31,30, 2026, to repurchase shares, including $50.4$76.1 million related to our share repurchase program, compared to $18.3$48.9 million in the same period in 2025, including $10.0$40.0 million related to our share repurchase program. The remainder in both periods related to our employee stock compensation programs.

The position of the U.S. dollar relative to international currencies, primarily the euro and British pound,euro, at MarchJune 31,30, 2026, resulted in a translation loss of $6.1$8.3 million being recorded to the cumulative translation adjustments shareholders' equity account during the threesix months ended MarchJune 31,30, 2026, compared to a $22.5$66.7 million translation gain being recorded to the cumulative translation adjustments shareholders' equity account during the same period in 2025.

We made contributions of $2.2$4.5 million to our pension plans during the threesix months ended MarchJune 31,30, 2026. We expect to make net contributions between $8.0 million and $10.0 million to our pension plans in 2026, which are primarily associated with statutorily required plans in the International reporting segment.

The Company had outstanding bank guarantees and standby letters of credit with banks as of MarchJune 31,30, 2026, totaling $7.7$10.0 million, of which $1.5 million relate to the senior revolving credit facility. These letters of credit serve to cover customer requirements in connection with certain sales orders and insurance companies. The Company is also required to provide cash collateral in connection with certain arrangements. At MarchJune 31,30, 2026, the Company has $1.2 million of restricted cash in support of these arrangements.