MSA Safety Incorporporated (NYSE:MSA) executives told investors the company “executed well within a challenging environment” in 2025, finishing the year with solid free cash flow and continued strength in its detection business, even as fire service demand weighed on results during the fourth quarter.
Fourth-quarter results: modest sales growth, margin improvement, strong cash flow
For the fourth quarter, MSA reported sales of $511 million, up 2% year over year on a reported basis. Management said results included a 3% organic sales decline, a 3% contribution from the M&C TechGroup acquisition, and a 2% tailwind from foreign currency translation.
Gross margin was 46.9%, up 40 basis points sequentially and flat year over year. Beck said year-over-year gross margin reflected the effects of MSA’s pricing actions to mitigate tariffs and inflation, as well as positive mix and favorable transactional FX. GAAP operating margin was 22.3% and adjusted operating margin was 23.9%, flat year over year and up 180 basis points sequentially.
Free cash flow was a highlight. Beck said the company generated $106 million of free cash flow in the quarter, equal to 122% of earnings and up 13% from the prior year. MSA returned $61 million to shareholders in the quarter via $21 million in dividends and $40 million in share repurchases.
Product category trends: detection strength offset by fire service decline
Management said organic sales trends in the quarter were driven by continued strength in detection, partially offset by a decline in fire service, while industrial PPE was modestly higher.
- Detection: Organic sales grew 17% in the quarter, led by fixed detection strength and continued growth in portable instruments. Blanco said performance was driven primarily by the Americas, where the company completed delivery of several large orders.
- Fire service: Organic sales declined 21% year over year. Blanco cited U.S. market dynamics related to AFG funding and a U.S. government shutdown, which impacted the timing of M&C sales, along with the “final tough” comparisons tied to U.S. Air Force deliveries.
- Industrial PPE: Organic sales rose 1%. Blanco said fall protection moderated from the pace seen in prior quarters but retains a positive outlook.
Full-year 2025: 4% reported sales growth, detection becomes largest category
For the full year, MSA reported net sales of $1.9 billion, up 4% on a reported basis and up 1% organically. M&C contributed 2 points to growth, and FX was a 1% tailwind. Beck said the company posted double-digit growth in detection and low single-digit growth in industrial PPE, while fire service contracted due to market conditions discussed throughout the year.
Detection became the company’s largest product category, representing 41% of sales, according to Blanco. He said MSA delivered above-market growth in its “key strategic growth accelerators,” with detection up organically in the low double digits and fall protection up high single digits.
Adjusted operating margin for the year was 22.1%, down 80 basis points, which Beck attributed to tariff, inflation, and transactional FX pressures, partially offset by pricing actions, positive mix, and productivity improvements. Adjusted diluted EPS was $7.93, up 3% year over year, including a $0.09 contribution from M&C.
The company also reported full-year free cash flow of $295 million, up $53 million from the prior year, with a 106% conversion rate that exceeded MSA’s target range of 90% to 100%.
Capital deployment, balance sheet, and 2025 operational highlights
Beck said capital deployment (excluding R&D) totaled about $420 million in 2025, including $189 million for the M&C acquisition, $162 million returned through dividends and buybacks, and $68 million in capital expenditures, including an expansion in Cranberry meant to support growth priorities and footprint optimization. R&D spending was 4.3% of sales.
Net debt ended the year at $416 million, down $43 million sequentially. The company repaid about $100 million of the $140 million borrowed for the M&C deal and finished the year with net leverage of 0.9x and a weighted average interest rate of 3.9%. Beck said MSA had $1.2 billion of liquidity at year-end and remains active in its M&A pipeline entering 2026.
Blanco also highlighted internal safety performance, saying MSA finished 2025 with zero lost-time incidents and a total recordable incident rate of 0.25, the best rate the company has achieved.
2026 outlook: mid-single-digit organic growth, pricing carryover, and margin focus
Management guided to mid-single-digit organic growth in 2026 and said it expects M&C to add about 1 percentage point to full-year revenue growth. Beck said approximately 1% of annual business was delayed due to fourth-quarter timing issues in fire service and the government shutdown and is expected to carry over favorably into 2026.
Blanco said the company remains confident in key markets, including fire service domestically and internationally, as well as strong underlying global demand in the energy sector. He also pointed to opportunities across the detection portfolio and in fall and head protection.
On cadence, Beck said the company expects normal seasonality, with the first quarter typically the lowest and an expected high-40s to low-50s sales split between the first and second half of the year. For below-the-line items, she guided to interest expense of $28 million to $31 million and a tax rate in the mid-20% range.
During Q&A, Blanco said full-year detection growth in 2025 benefited from several large orders, including one pulled forward from what otherwise would have been a 2026 order. For 2026, he said it was early, but he would frame detection as a “mid-single digit revenue growth year” given tougher comparisons. He also said the company sees continued traction in connected solutions, noting that MSA+ (the connected portion) represented just over 10% of portable detection revenue in 2025, while unit penetration was closer to twice that level, which he said supports subscription potential over time.
On fire service, Blanco said delayed funding dynamics should push some orders into the first half of 2026, while the remainder of the year could follow a more typical cadence that “leans toward the second half.”
On margins, management reiterated a focus on tariff mitigation, pricing, and productivity. Beck said the company is aiming for price-cost neutrality in the first half of 2026, and both Beck and Blanco indicated they expect sequential margin improvement through the year as those actions take hold.
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.
