MSA Safety Incorporated ((MSA)) has held its Q2 earnings call. Read on for the main highlights of the call.
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MSA Safety Incorporated’s recent earnings call presented a mixed sentiment, highlighting both areas of growth and challenges. The company showcased strong performance in its Detection and Industrial PPE segments, fueled by strategic acquisitions and effective capital deployment. However, concerns were raised due to challenges in the Fire Service segment, pressures on gross margins, and a lower book-to-bill ratio. Despite these hurdles, MSA Safety’s resilience and operational strength, driven by strategic actions and innovation, offer a balanced perspective.
Strong Performance in Detection and Fall Protection
The Detection segment of MSA Safety achieved mid-single-digit organic growth, primarily driven by advancements in fixed and portable gas detection technologies. Additionally, the Fall Protection category experienced double-digit growth, significantly contributing to the overall robustness of the Industrial PPE segment.
Successful Integration of M&C TechGroup
The acquisition of M&C TechGroup has proven beneficial, contributing $11 million to the reported sales for the quarter. This acquisition is anticipated to add approximately $0.10 to the adjusted EPS for the year, highlighting its strategic value.
Strategic Capital Deployment
MSA Safety demonstrated its commitment to strategic capital deployment by increasing its annual dividend for the 55th consecutive year and repurchasing $30 million of stock this quarter. Furthermore, the company made a strategic investment in Cranberry Township, Pennsylvania, to support future R&D and manufacturing expansion.
Resilience and Operational Strength
Despite facing gross margin pressures, MSA Safety maintained an adjusted operating margin of 21.4%. This resilience reflects the operational capabilities developed through the MSA business system deployment and customer-led innovation.
Decline in Fire Service Sales
The Fire Service segment experienced a mid-single-digit decline in organic sales year-over-year. This downturn was influenced by market dynamics related to the NFPA standard change and delayed AFG funding.
Gross Margin Pressures
Gross margins declined by 170 basis points compared to the previous year, primarily due to transactional foreign currency headwinds, inflation, and the early impacts of tariffs.
Challenges in Industrial PPE
The Industrial PPE segment faced challenges, with organic sales down low single digits. Contractions in head protection and ballistic helmets offset the strength seen in fall protection.
Book-to-Bill Ratio Below 1
The book-to-bill ratio was slightly below 1, as the backlog declined more than expected in the second quarter. This indicates potential future order challenges for MSA Safety.
Forward-Looking Guidance
Looking ahead, MSA Safety reported a consolidated sales growth of 3% in the second quarter of 2025, with adjusted earnings per share reaching $1.93. The company anticipates maintaining a low single-digit full-year organic growth outlook, with the M&C TechGroup acquisition expected to add 2% to revenue growth and be $0.10 accretive to adjusted EPS. Although operating margins were down 200 basis points from the previous year, MSA Safety continues to offset challenges through pricing and improved productivity.
In summary, MSA Safety’s earnings call revealed a balanced sentiment, with notable growth in certain segments and challenges in others. The company’s strategic acquisitions and capital deployment have bolstered its performance, while operational resilience remains a key strength. However, pressures on gross margins and a declining book-to-bill ratio present areas of concern moving forward.