MSA Safety rporated(MSA) - 2025 Q1 - Quarterly Report

Financial Performance - Net sales for Q1 2025 were $421,340,000, a 1.3% increase from $413,302,000 in Q1 2024[7] - Gross profit for Q1 2025 was $193,395,000, down 0.6% from $195,531,000 in Q1 2024[7] - Operating income decreased to $77,761,000 in Q1 2025 from $80,112,000 in Q1 2024, reflecting a decline of 2.9%[7] - Net income for Q1 2025 was $59,605,000, compared to $58,139,000 in Q1 2024, representing a 2.5% increase[7] - Earnings per share attributable to common shareholders increased to $1.51 in Q1 2025 from $1.48 in Q1 2024[7] - Comprehensive income for Q1 2025 was $82,343,000, significantly higher than $47,840,000 in Q1 2024, indicating a substantial increase[11] - Adjusted operating income for Q1 2025 was $87,502 thousand, slightly down from $88,009 thousand in Q1 2024, reflecting a decrease of 0.6%[53] - Basic earnings per share for Q1 2025 were $1.51, an increase from $1.48 in Q1 2024[55] - The Fire Service product group generated $150,616 thousand in sales, accounting for 36% of total consolidated sales in Q1 2025[53] - The Americas segment generated net sales of $293.16 million, while the International segment contributed $128.18 million for Q1 2025[52] Assets and Liabilities - Total assets as of March 31, 2025, were $2,235,885,000, up from $2,205,784,000 at the end of 2024[13] - Total liabilities decreased to $1,045,740,000 as of March 31, 2025, from $1,062,465,000 at the end of 2024[13] - Total assets as of March 31, 2025, amounted to $2,235,885 thousand, compared to $2,174,330 thousand at the end of Q1 2024, indicating a growth of 2.8%[52] - The company’s total liabilities decreased to $1.05 billion as of March 31, 2025, from $1.06 billion at the end of 2024, a reduction of 1.2%[14] - As of March 31, 2025, the company's total long-term debt was $502.1 million, a decrease from $508.0 million as of December 31, 2024[66] Cash Flow and Dividends - Cash flow from operating activities for Q1 2025 was $61,833,000, compared to $50,886,000 in Q1 2024, showing a 21.5% increase[16] - The company paid dividends of $0.51 per common share in Q1 2025, up from $0.47 per share in Q1 2024[7] - Common dividends declared were $20,023,000 for the quarter ended March 31, 2025, compared to $18,480,000 for the same period in 2024, representing an increase of 8.4%[19] Inventory and Capital Expenditures - Total inventories increased to $306.675 million as of March 31, 2025, up from $296.796 million at December 31, 2024, reflecting a growth in finished products and raw materials[41] - Capital expenditures for Q1 2025 totaled $10,784 thousand, compared to $11,219 thousand in Q1 2024, representing a decrease of 3.9%[52] Restructuring and Charges - The company recorded restructuring charges of $1.9 million for the three months ended March 31, 2025, compared to $3.0 million for the same period in 2024, indicating a reduction in restructuring efforts[38][39] - The company’s total restructuring reserves decreased to $4.4 million as of March 31, 2025, from $9.8 million at December 31, 2023[40] Tax and Compliance - The effective tax rate for Q1 2025 was 23.5%, up from 23.1% in Q1 2024, primarily due to state income taxes[56] - As of March 31, 2025, the Company was in full compliance with the restrictive covenants under its various credit agreements[74] Foreign Currency and Derivatives - The notional amount of open foreign currency forward contracts was $150.7 million as of March 31, 2025, down from $184.0 million at December 31, 2024[79] - The company reported currency exchange losses of $2.6 million for the three months ended March 31, 2025, compared to gains of $1.8 million in the same period of 2024[81] Product Liability and Legal Matters - The company faces ongoing product liability claims related to PFAS substances, with 731 lawsuits involving 9,274 claims as of April 22, 2025[90] - The company established reserves for single incident product liability claims based on historical experience and expected settlement costs[85] - The company expects to continue pursuing insurance coverage and indemnification related to ongoing litigation[90]