Mine Safety Incorporated Jefferies Global Industrials Conference 2026

All right. Yeah. Jump up here.

Yeah. Well, good morning. Thanks, James, and thanks, Jefferies, for hosting us, and we're delighted to be here and talk about MSA.

I would remind everybody, we are webcasting this, as James referenced, and just remind you of our safe harbors forward-looking statements and obviously non-GAAP financial statements. MSA is a company that is built on a purpose, and that purpose is singular around our safety mission. That mission helps guide us into the industrial safety technology space and has enabled us to create and produce safety products and solutions that meet the most challenging market conditions that we have across the globe. That's helped us protect over 40 million workers annually, which is what we do today. If you think about the business on a pro forma basis, we're about $2.1 billion.

As you can see from some of these metrics, with our investments in innovation, we're able to appreciate and achieve strong operating and gross margins, and we've got great cash flow. On a pro forma basis or post-acquisition, I should say, we're 1.8 times leverage, and I say post-acquisition because we finished an Autronica acquisition in July, which we're pleased with. We go to market, we have two different business segments, one called the Americas, just what you would expect it to be. The other is international, which is everything else across the globe, and they're broken down about 63% and 37% respectfully. We have three product categories inside of these businesses. One is detection, the second is fire service, and the third is industrial PPE.

Again, when you think of detection, as we've made these acquisitions, Autronica being the last one, it's now become the highest piece of our business, the largest part of MSA. Previously, a few years ago, you might remember that it was the fire service. We continue to execute on our accelerate strategy to drive the key pillars to our growth story into the future. We announced these at the 2024 Investor Day, and I would just reference a couple things. First, we are on target to achieve these. We will likely come out with new targets mid-next year to identify what the next step in the company's growth plan is. We're very pleased with how we've allocated capital throughout this cycle so far and the growth we've had, both organically, that's starting to pick up steam, and the inorganic growth we're starting to see.

Speaking of inorganic, Autronica came on board in July. We're delighted to have this organization join the MSA family. You think of Autronica, it added about $3 billion of addressable market to the company, and it's in a space that's very, very technically competent and fits perfectly with the portfolio we have within fixed monitoring. Helps us get earlier in the process, and we expect this to provide further tailwinds, not only as we grow this business, but also for the legacy MSA fixed monitoring business as well. As you think about the second quarter, if you did have a chance to see the earnings call or hear our earnings call, you note these metrics. We felt we had a strong growth quarter, where we finished the quarter with really nice cash flow and growth. That still includes some of the headwinds we've seen with the Middle East.

As I noted on the call, that's created about a point and a half or more of headwinds on revenue through the first half of the year because of the Middle East challenges we've had. Most of that is related to the detection business. We continue to maintain our outlook of low double-digit growth overall. That includes mid-single-digit organic growth and a contribution of mid-single digit from acquisitions as well, and also some tailwind from FX. The story, I think, continues to be positive for MSA. We think the market dynamics are positive in the markets we serve, and we're expecting to have a strong year. I'll just wrap it up, and we can get into the Q&A by just reminding everybody we are mission-driven. We've had the same mission statement for our entire existence. We're driving the accelerate strategy.

We're very pleased with the execution to date. We are in very resilient, diverse markets that enable us to participate in growth throughout whatever economic cycle we may have. With that, we'll go to Q&A.

If we look across the portfolio, I'll hit each of the three product categories because I think there's some really strong optimism across the board, and there are some challenges we're dealing with. But inside the industrial PPE markets, we've had really nice growth year to date. I think there's a couple of things that help that catalyst occur. One is the market conditions have been really solid, specifically in the industrial, with capital investments we've seen. We think the infrastructure spend has been positive for our specific business. Data centers are a part of that, certainly. But broadly speaking, the industrial markets in North America have been supportive of the growth we've seen. The second thing, I think you're seeing some trends in the safety industry, specifically with how we look at head protection and how the end customer is looking at the head protection space.

Traditionally, for many years, Type I head protection, which is our head protection, a hat that has a standard for vertical protection, has really dominated the marketplace. Most users, whether it be construction or any industrial space, uses a Type I. That started to transition to what's called a Type II, and a Type II has vertical but also lateral or horizontal head protection standard requirements. Many of our customers are now transitioning to Type II, which is a price point of 3 plus X a Type I. So you're seeing some of that show up in our performance, and we expect that to continue. At this stage, based on our customer feedback, we expect the economic situation to continue as well. So that market for the at least immediate term, looks very positive.