MSA Safety Powers Through Q1 2025 with Resilient Demand and Strategic Gains
MSA Safety, a leading manufacturer of safety equipment and solutions, has reported strong financial results for its first quarter (Q1) 2025, defying macroeconomic uncertainty and delivering solid free cash flow generation. The company's Q1 earnings call, hosted by Executive Director of Investor Relations Larry De Maria on May 2nd, provided valuable insights into MSA Safety's performance during the period.
"Our team executed well against a dynamic operating environment to begin 2025," said Steve Blanco, President and CEO, in a presentation on Slide 4. "Financial results for the first quarter exceeded our original expectations while delivering solid free cash flow generation." The company attributed higher sales primarily to strong demand across detection and partnering with customers to accelerate certain shipments in consideration of tariffs.
Despite a decline in operating margins due to gross margin pressure from transactional foreign currency headwinds, MSA Safety's results were bolstered by lower SG&A, pricing, and favorable mix. The company saw stable order trends in April and an increase in backlog within normalized levels. A notable highlight was the award of a $10 million breathing apparatus contract from the Orange County Fire Authority in Southern California, expected to be delivered this year.
"This marks a key competitive conversion and builds on the previously announced wins in Southern California," Blanco noted. The company's Fire Service segment saw sales decline by high single digits year-over-year due to challenging comparable in the Americas segment, although international growth was up double digits organically in the first quarter on SCBA deliveries in Asia Pacific.
The Detection segment delivered mid-teens growth supported by expansion in fixed and portable gas detection categories across both segments. Industrial PPE sales were up 3% organically, with head and fall protection experiencing growth offsetting contraction in other PPE categories. MSA Safety reported a 2% increase in reported sales or 4% organic growth, alongside adjusted earnings per share growth of 4%.
Despite macroeconomic uncertainty and tariffs affecting operating margins, MSA Safety remains encouraged by positive long-term trends in industrial safety technology, innovation pipeline, and business diversification. The company is focused on advancing its ACCELERATE strategy to deliver long-term profitable growth aligned with its 2028 financial targets.
