Slide 1: Q1 2023 Earnings Presentation
Q1 2023 Earnings Presentation May 2, 2023
Slide 2: Cautionary Statements Regarding Forward-looking Statements
Cautionary Statements Regarding Forward-looking Statements This presentation may contain (and verbal statements made by MSA® Safety Incorporated (“MSA Safety”) may contain) “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relat
Slide 3: Non-GAAP Financials
Non-GAAP Financials To supplement our Consolidated Financial Statements presented in accordance with generally accepted accounting principles (“GAAP”), we use, and this presentation includes, certain non-GAAP financial measures. These financial measures include constant currency revenue growth, adju
Slide 4: MSA Safety (NYSE: MSA) Snapshot
MSA Safety (NYSE: MSA) Snapshot Leading Global Safety Technology Company with Proven Track Record of Value Creation Driven by Our Mission, Vision, & Values Key Statistics(1) Forefront of Safety Innovation Our Mission Steady end market demand + • That men and women may work in safety and that they, t
Slide 5: First Quarter Highlights
First Quarter Highlights Record Performance While Navigating Challenging Macro Environment Highlights New Product Spotlight • Strong start to 2023 with record first quarter • V-SHOCK® Fall Protection Series results and a healthy demand environment – Designed for rigorous environments – Book-to-bill
Slide 6: Purpose-led Company Driven by Our Mission of Safety
Purpose-led Company Driven by Our Mission of Safety Committed to Advancing Our ESG Strategy Progress For Our Planet Sustainability Pillars • Set 1.5° Celsius carbon reduction target ‒ Reduce scope one and two emissions by 42% by 2030, compared to 2021 baseline ‒ Continue to build internal infrastruc
Slide 7: Q1 2023 Financial Highlights
Q1 2023 Financial Highlights Record Sales and Healthy Growth Across Segments and Product Lines Adjusted Operating Income & Net Sales Adjusted Diluted EPS Adjusted Operating Margin $77MM $398MM $1.36 19.4% $54MM $331MM $1.10 16.3% Q1 2022 Q1 2023 Q1 2022 Q1 2023 Q1 2022 Q1 2023 Net sales growth of 20
Slide 8: Q1 2023 Free Cash Flow and Leverage
Q1 2023 Free Cash Flow and Leverage Continued Leverage Progress During the First Quarter Adjusted Free Cash Flow Net Leverage 2.2x $52MM 2.0x $17MM Q1 2022 Q1 2023 12/31/2022 Pro Forma* 3/31/2023 • Q1 2023 excludes payments made in conjunction with the legacy • Strong financial position liability di
Slide 9: Raising 2023 Outlook
Raising 2023 Outlook Increasing Sales Growth Outlook to High Single to Low Double Digits for 2023 Product Category % Net Sales(1) Key End Markets Operating Environment Update Firefighter Safety Positives • SCBA • Strength in short cycle product demand 38% • Helmets • Fire service and first responder
Slide 10: Key Takeaways
Key Takeaways Well Positioned to Deliver Profitable Growth in 2023 Outstanding performance in Q1 and strong momentum going into balance of 2023 Mission-driven culture and unwavering commitment to the safety of our customers and our employees Reliable, diversified base business drives organic growth
Slide 11: Q&A
Q&A Q1 2023 Earnings Results | 11
Slide 12: Appendix
Appendix MSA The Safety Company One Mission. One Passion. One Purpose.
Slide 13: Sale of Legacy Liability Subsidiary
Sale of Legacy Liability Subsidiary Significantly Reduces Business Risk Transaction Overview Highlights • Divested 100% of the subsidiary’s equity interests to joint venture of R&Q Insurance Holdings and Obra Capital – Subsidiary holds legacy product liability claims Reduces business risk relating t
Slide 14: Reconciliation of Non-GAAP Financial Measures: Constant Currency Sales Growth, Consolidated
Reconciliation of Non-GAAP Financial Measures Constant Currency Sales Growth (Unaudited) – Consolidated Three Months Ended March 31, 2023 Firefighter Fixed Gas Industrial Breathing Helm ets and Portable Gas Fall Non-Core and Flam e Head Core Sales Net Sales Apparatus Protective Detection Protection
Slide 15: Reconciliation of Non-GAAP Financial Measures: Constant Currency Sales Growth, Americas
Reconciliation of Non-GAAP Financial Measures Constant Currency Sales Growth (Unaudited) – Americas Segment Three Months Ended March 31, 2023 Firefighter Fixed Gas Industrial Breathing Helm ets and Portable Gas Fall Non-Core and Flam e Head Core Sales Net Sales Apparatus Protective Detection Protect
Slide 16: Reconciliation of Non-GAAP Financial Measures: Constant Currency Sales Growth, International
Reconciliation of Non-GAAP Financial Measures Constant Currency Sales Growth (Unaudited) – International Segment Three Months Ended March 31, 2023 Firefighter Fixed Gas Industrial Breathing Helm ets and Portable Gas Fall Non-Core and Flam e Head Core Sales Net Sales Apparatus Protective Detection Pr
Slide 17: Reconciliation of Non-GAAP Financial Measures: Segment Information
Reconciliation of Non-GAAP Financial Measures Segment Information (Unaudited) (In thousands, except percentage amounts) Am ericas International Corporate Consolidated Three Months Ended March 31, 2023 Net sales to external customers $ 280,267 $ 117,995 $ - $ 398,262 Operating loss (60,061) Operating
Slide 18: Reconciliation of Non-GAAP Financial Measures: Adjusted Earnings and EPS
Reconciliation of Non-GAAP Financial Measures Adjusted Earnings and Adjusted Earnings per Diluted Share (Unaudited) (In thousands, except per share amounts) Three Months Ended March 31, 2023 2022 % Change Net (loss) income $ (150,173) $ 35,542 (523)% Loss on divestiture of MSA LLC 129,211 — Deferred
Slide 19: Reconciliation of Non-GAAP Financial Measures: Free Cash Flow
Reconciliation of Non-GAAP Financial Measures Free Cash Flow (Unaudited) Three Months Ended (In thousands, except percentage amounts) March 31, 2023 2022 Cash flow (used in) from operating activities $ (285,909) $ 24,523 Contribution for divestiture of MSA LLC 341,186 - Product liability payments re
Slide 20: Reconciliation of Non-GAAP Financial Measures: Adjusted Payments on Debt
Reconciliation of Non-GAAP Financial Measures Adjusted Payments on Debt (Unaudited) (In thousands) Three Months Ended March 31, 2023 2022 Change in debt $ 295,412 $ 5,000 Borrowings related to divestiture of MSA LLC (a) (312,943) - (Payments on) proceeds from debt (17,531) 5,000 (a) Net of foreign e
Slide 21: Reconciliation of Non-GAAP Financial Measures: Debt to Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measures Debt to Adjusted EBITDA and Net Debt to Adjusted EBITDA (Unaudited) Twelve Months Ended (In thousands) March 31, 2023 Operating income $ 136,408 Loss on divestiture of MSA LLC 129,211 Depreciation and amortization 47,548 Product liability expense 17,821
Slide 22: Reconciliation of Non-GAAP Financial Measures: R&D Investment
Reconciliation of Non-GAAP Financial Measures R&D Investment (Unaudited) Trailing Twelve Months Twelve Months Ended (In thousands) Three Months Ended March 31, Ended March 31, December 31, 2023 2022 2023 2022 Research and development expense $ 15,232 $ 13,333 $ 58,911 $ 57,012 Capitalized software d