Financial Data and Key Metrics Changes - First quarter sales were $421 million, an increase of 2% on a reported basis and 4% organically compared to the prior year [15][16] - Gross margin in the first quarter was 45.9%, down 140 basis points year over year, impacted by foreign exchange headwinds and inflation [16] - GAAP net income totaled $60 million or $1.51 per share, with adjusted diluted earnings per share at $1.68, up 4% from last year [17] Business Line Data and Key Metrics Changes - Sales in the Fire Service category were down high single digits year over year, primarily due to challenging comparisons in the Americas segment [7] - Detection sales experienced mid-teens growth, supported by expansion in fixed and portable gas detection categories [9] - Industrial PPE sales were up 3% organically, with growth in head and fall protection offset by contraction in other PPE [9][18] Market Data and Key Metrics Changes - The Americas segment saw a 1% decrease in sales year over year on a reported basis, but a 1% increase on an organic basis [18] - The International segment reported a 9% increase in sales year over year on a reported basis or 11% organically, with double-digit organic growth in Detection [18][19] - Currency translation posed a 2% headwind to overall growth, primarily affecting the Brazilian real, Mexican peso, and euro [15][16] Company Strategy and Development Direction - The company remains focused on advancing its Accelerate strategy and delivering long-term profitable growth aligned with its 2028 financial targets [10][21] - MSA Safety is committed to innovation in product categories, particularly in detection and fire service, to maintain market leadership [10][11] - The company is evaluating its supply chain and pricing strategies in response to evolving tariff situations, with about 15% of its cost of sales now subject to tariffs [13][14] Management's Comments on Operating Environment and Future Outlook - Management noted that while macroeconomic conditions have become more uncertain, the business remains healthy with stable order trends [21][22] - The company anticipates continued FX pressure on gross margins, particularly from Latin American currencies, into the second quarter [16] - Despite challenges, management expressed confidence in achieving long-term growth targets and maintaining a strong commercial pipeline [72] Other Important Information - Free cash flow for the quarter was $51 million, representing a conversion rate of 86% [19] - The company returned value to shareholders through $20 million in dividends and $10 million in share repurchases [20] - MSA Safety amended and increased its revolving credit facility to $1.3 billion, ensuring ample liquidity for future growth initiatives [14][20] Q&A Session Summary Question: Changes in project decision-making due to tariffs - Management indicated that there was strong project work in the first quarter, particularly in energy and petrochemical sectors, with some customers accelerating shipments [28][29] Question: Local currency gross margin impact - Management confirmed that the biggest impact on gross margins was from foreign exchange, primarily from Latin American currencies, and this pressure is expected to continue [32][34] Question: Fixed versus portable growth in detection - Management reported double-digit incoming orders for both fixed and portable detection, with strong performance across the energy segments globally [41][42] Question: Impact of backlog and tariffs on second quarter - Management noted a $40 million backlog headwind in the second quarter and indicated that tariff impacts would be more pronounced in the second half of the year [45][47] Question: Long-term margin gains from cost reduction actions - Management stated that cost reduction actions are viewed as long-term strategic initiatives, and they expect to retain gains even if tariffs are resolved favorably [68][70] Question: Ability to reach 2028 targets amid current environment - Management expressed confidence in achieving 2028 targets, citing strong macro trends and a diverse portfolio, despite potential short-term challenges [72]