MSA Safety Incorporporated (NYSE:MSA) reported a stronger first quarter of fiscal 2026, with management citing resilient demand in the Americas, improved margins and continued execution of its Accelerate strategy, while also noting pressure in Europe and the Middle East.
On the company’s earnings call, President and CEO Steven Blanco said first-quarter consolidated reported sales rose 10%, including 3% organic growth, and adjusted earnings per share increased 18% year over year to $1.99. Blanco said the company’s diversified portfolio helped offset weaker conditions in some international markets.
“The team achieved a solid start to the year as we continued to execute and deliver on the commitments outlined in our Accelerate strategy,” Blanco said.
Americas Strength Offsets International Weakness
Chief Financial Officer Julie Beck said first-quarter sales totaled $464 million, up 10% on a reported basis from the prior year. Organic sales increased 3%, while currency translation contributed 4 percentage points and the M&C TechGroup acquisition added 3 percentage points to growth.
Blanco said organic sales performance was led by high single-digit growth in the Americas, partially offset by a decline in the International segment. The company saw strong growth in North America and Latin America, but weakness across European and Middle Eastern markets.
By product category, detection sales were flat organically. Blanco said double-digit growth in portable gas detection was offset by double-digit declines in fixed monitoring solutions in the International segment, reflecting softer markets in Europe and the Middle East. The M&C acquisition contributed $15 million in sales during the quarter.
Fire service organic sales rose 3% year over year, driven by strength in the Americas. Blanco said self-contained breathing apparatus, or SCBA, sales benefited in part from Assistance to Firefighters Grant funding related to the U.S. government shutdown in late 2025. Industrial personal protective equipment organic sales increased 7%, supported by fall protection, industrial head protection and momentum for the company’s H2 Hard Hat. International results also benefited from growth in protective ballistic helmets.
Beck said Americas sales increased 11% year over year on a reported basis, including 7% organic growth. The segment posted broad-based organic growth across fire service, detection and industrial PPE. Americas adjusted operating margin rose 340 basis points to 30.2%.
International sales increased 8% on a reported basis, supported by M&C and foreign exchange, but organic sales declined 7%. Beck said the decline reflected double-digit contractions in detection and fire service, partially offset by double-digit growth in industrial PPE. International adjusted operating margin fell 410 basis points to 10.5%, with inflation, tariffs and lower volumes partly offset by pricing and favorable transactional foreign exchange.
Margins Improve Despite Tariffs and Inflation
MSA reported GAAP gross margin of 47.4%, up 150 basis points from a year earlier and 50 basis points sequentially. Adjusted gross margin increased 170 basis points to 48.1%.
Beck attributed the improvement to strategic pricing, productivity, positive mix and favorable transactional foreign exchange, which offset tariff and inflation pressures. GAAP operating margin increased 160 basis points to 20.1%, while adjusted operating margin rose 100 basis points to 21.8%.
Quarterly GAAP net income rose 20% to $71 million, and diluted earnings per share increased 21% to $1.83. Beck said revenue growth, margin expansion, foreign exchange, M&C, share repurchases and a lower effective tax rate contributed to the earnings increase.
During the question-and-answer session, Beck said gross margin gains were driven primarily by operational factors and price-cost benefits, with foreign exchange representing a smaller portion of the improvement. She said the company remains on track for 30% incremental margins and gross margins in the 47% to 48% range for the year.
Company Reaffirms 2026 Organic Growth Outlook
MSA reaffirmed its expectation for mid-single-digit organic sales growth in 2026. Beck said the outlook does not include any impact from the pending Autronica acquisition.
The company expects continued strength in the Americas and improvement in International results from the first quarter. Beck said the outlook is supported by a mid-single-digit year-over-year increase in orders and a sequential double-digit increase in International backlog.
Management also discussed potential delays related to AFG grants after the reopening of the Department of Homeland Security. In response to a question from Baird analyst Quinn Fredrickson, Blanco said the company realized roughly one-third of AFG-related delayed orders in the first quarter, leaving a little more than two-thirds expected to flow through later, likely in the second and third quarters.
Blanco said the company expects both Americas momentum and an International recovery to contribute to achieving the full-year guidance. He said International fire service timing was planned around tenders, with major market activity expected in the second half of the year.
Autronica Acquisition Expands Detection Platform
Blanco highlighted MSA’s agreement to acquire Autronica Fire and Security in a transaction valued at $555 million. The deal is expected to close in the third quarter.
Autronica, headquartered in Trondheim, Norway, provides fire and gas detection systems across markets including critical infrastructure, energy and marine. Blanco said the business is complementary to MSA’s fixed detection portfolio and aligns with the company’s mission and Accelerate strategy.
MSA said Autronica generated 2025 sales of approximately $160 million and adjusted EBITDA margins of about 20%. The company expects the acquisition to add roughly one turn of net leverage, bringing pro forma net leverage to approximately 2x at closing. Beck said the transaction is expected to be accretive to adjusted earnings per share in the first year.
Blanco said the acquisition expands MSA’s addressable market by $3 billion and gives the company a stronger position earlier in project design for integrated fixed gas and flame detection solutions. He said MSA expects revenue opportunities from bringing Autronica’s solutions into markets where MSA is stronger, particularly the Americas and the Middle East. Beck said cost synergies are expected to begin in the second half of the first year of ownership and reach full run rate over about three years.
Cash Flow, Buybacks and Middle East Risks
MSA generated $65 million in free cash flow in the quarter, equal to 91% of earnings and up 28% from a year earlier. The company returned $71 million to shareholders, including $50 million in share repurchases and $21 million in dividends. Beck also noted the company announced its 56th consecutive annual dividend increase.
MSA ended the quarter with net leverage of 0.9x and liquidity of $1.2 billion. The company also announced a new $500 million share repurchase authorization in February, replacing a prior $200 million program.
Blanco opened the call by addressing the conflict in the Middle East, saying the company’s priority is the safety of its employees in the region. He said employees are safe, but the conflict has affected customer order and delivery patterns. Middle East sales represent a mid-single-digit percentage of MSA’s overall business.
In response to an analyst question, Blanco said damaged equipment and disrupted customer operations in the region could create potential upside later in the year, but he characterized that as an additional opportunity rather than something embedded in the current plan. He also said supply chains have not fully normalized since COVID and that MSA is monitoring logistics costs, electronics availability and resin costs.
“Although the macro and geopolitical environment backdrop remains fluid and continues to shape a dynamic operating environment, we executed well to begin the year,” Beck said.
About MSA Safety Incorporporated (NYSE:MSA)
MSA Safety Incorporated develops, manufactures and supplies a wide range of safety products designed to protect workers in hazardous environments. The company's offerings span personal protective equipment such as industrial helmets, face shields, protective clothing and fall protection devices, as well as fixed and portable gas detection and monitoring systems. MSA's products are used in industries including oil and gas, mining, construction, fire service, and chemical processing to guard against risks such as gas leaks, impacts, flame exposure and falls from height.
Key product lines include self-contained breathing apparatus (SCBA) and air-purifying respirators, gas detectors and sensors, head and face protection, and fall arrest systems.
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