UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended March 31, ~~2021~~2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 1-15579

MSA SAFETY INCORPORATED

(Exact name of registrant as specified in its charter)


Pennsylvania		46-4914539
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

1000 Cranberry Woods Drive
Cranberry Township,	Pennsylvania	16066-5207
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (724) 776-8600

Former name or former address, if changed since last report: N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which is registered
Common Stock, no par value	MSA	New York Stock Exchange

As of April ~~23, 2021, 39,167,315~~22, 2022, 39,335,866 shares of common stock, of the registrant were outstanding.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MSA SAFETY INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Unaudited


		Three Months Ended March 31,				Three Months Ended March 31,
(In thousands, except per share amounts)	(In thousands, except per share amounts)	2021		2020			(In thousands, except per share amounts)	2022		2021
Net sales	Net sales	$	308,428	$	341,145		Net sales	$	330,692	$	308,428
Cost of products sold	Cost of products sold	173,688		183,786			Cost of products sold	187,908		173,643
Gross profit	Gross profit	134,740		157,359			Gross profit	142,784		134,785

Selling, general and administrative	Selling, general and administrative	75,463		80,237			Selling, general and administrative	78,551		75,463
Research and development	Research and development	13,234		14,112			Research and development	13,333		13,234
Restructuring charges (Note 3)	Restructuring charges (Note 3)	1,308		2,007			Restructuring charges (Note 3)	2,189		1,308
Currency exchange (gains) losses, net (Note 5)		(2,099)		270
Product liability expense (Note 17)		2,796		1,951
Currency exchange losses (gains), net							Currency exchange losses (gains), net	3,271		(2,099)
Product liability expense (Note 18)							Product liability expense (Note 18)	2,772		2,796
Operating income	Operating income	44,038		58,782			Operating income	42,668		44,083

Interest expense	Interest expense	1,911		3,144			Interest expense	3,618		1,911

Other income, net	Other income, net	(4,213)		(1,259)			Other income, net	(6,344)		(4,213)
Total other (income) expense, net		(2,302)		1,885
Total other income, net							Total other income, net	(2,726)		(2,302)

Income before income taxes	Income before income taxes	46,340		56,897			Income before income taxes	45,394		46,385
Provision for income taxes (Note 9)		9,740		13,095
Provision for income taxes (Note 10)							Provision for income taxes (Note 10)	9,852		9,749
Net income	Net income	36,600		43,802			Net income	35,542		36,636

Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	(186)		(128)			Net income attributable to noncontrolling interests	—		(186)

Net income attributable to MSA Safety Incorporated	Net income attributable to MSA Safety Incorporated	$	36,414	$	43,674		Net income attributable to MSA Safety Incorporated	$	35,542	$	36,450

Earnings per share attributable to MSA Safety Incorporated common shareholders (Note 8):
Earnings per share attributable to MSA Safety Incorporated common shareholders (Note 9):							Earnings per share attributable to MSA Safety Incorporated common shareholders (Note 9):
Basic	Basic	$	0.93	$	1.12		Basic	$	0.90	$	0.93
Diluted	Diluted	$	0.92	$	1.11		Diluted	$	0.90	$	0.92
Dividends per common share	Dividends per common share	$	0.43	$	0.42		Dividends per common share	$	0.44	$	0.43

*Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K.							*Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K.

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

-2-

MSA SAFETY INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Unaudited

Three Months Ended March 31,
(In thousands) 2021 2020
Net income $ 36,600 $ 43,802
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments (Note 5) (10,223) (22,947)
Pension and post-retirement plan actuarial gains, net of tax (Note 5) 3,712 3,102
Unrealized loss on available-for-sale securities (Note 5) (5) (62)
Reclassification of currency translation from accumulated other comprehensive (loss) into net income (Note 5) 0 720
Total other comprehensive (loss) income, net of tax (6,516) (19,187)
Comprehensive income 30,084 24,615
Comprehensive income attributable to noncontrolling interests (221) (13)
Comprehensive income attributable to MSA Safety Incorporated $ 29,863 $ 24,602


	Three Months Ended March 31,
(In thousands)	2022		2021
Net income	$	35,542	$	36,636
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments (Note 6)	5,892		(10,223)
Pension and post-retirement plan actuarial gains, net of tax (Note 6)	2,264		3,712
Unrealized losses on available-for-sale securities (Note 6)	(9)		(5)

Total other comprehensive income (loss), net of tax	8,147		(6,516)
Comprehensive income	43,689		30,120
Less: Comprehensive income attributable to noncontrolling interests	—		(221)
Comprehensive income attributable to MSA Safety Incorporated	$	43,689	$	29,899

*Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K.

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

-3-

MSA SAFETY INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

(In thousands) March 31, 2021 December 31, 2020
Assets
Cash and cash equivalents $ 184,728 $ 160,672
Trade receivables, less allowance for credit loss of $4,732 and $5,344 224,954 252,283
Inventories (Note 2) 220,021 197,819
Investments, short-term (Note 16) 54,976 74,982
Prepaid income taxes 30,396 26,185
Notes receivable, insurance companies (Note 17) 3,825 3,796
Prepaid expenses and other current assets 45,678 38,541
Total current assets 764,578 754,278
Property, plant and equipment, net (Note 4) 197,832 189,620
Operating lease assets, net 68,199 53,451
Prepaid pension cost (Note 14) 101,317 97,545
Deferred tax assets (Note 9) 34,301 35,665
Goodwill (Note 12) 447,059 443,272
Intangible assets, net (Note 12) 164,234 161,051
Notes receivable, insurance companies, noncurrent (Note 17) 48,837 48,540
Net investment in sales-type leases, noncurrent (Note 13) 28,509 0
Insurance receivable (Note 17) and other noncurrent assets 87,896 89,062
Total assets $ 1,942,762 $ 1,872,484
Liabilities
Notes payable and current portion of long-term debt (Note 11) $ 20,000 $ 20,000
Accounts payable 90,706 86,854
Employees’ compensation 33,373 40,277
Insurance and product liability (Note 17) 40,056 43,706
Income taxes payable (Note 9) 15,490 3,580
Other current liabilities 107,102 116,128
Total current liabilities 306,727 310,545
Long-term debt, net (Note 11) 340,428 287,157
Pensions and other employee benefits 201,040 208,068
Noncurrent operating lease liabilities 59,211 44,639
Deferred tax liabilities (Note 9) 12,065 10,916
Product liability (Note 17) and other noncurrent liabilities 200,401 201,268
Total liabilities $ 1,119,872 $ 1,062,593
Equity
Preferred stock, 4.5% cumulative, $50 par value (Note 6) $ 3,569 $ 3,569
Common stock, 0 par value (Note 6) 245,887 242,693
Treasury shares, at cost (Note 6) (331,215) (327,756)
Accumulated other comprehensive loss (Note 5) (188,948) (182,397)
Retained earnings 1,085,383 1,065,789
Total MSA Safety Incorporated shareholders' equity 814,676 801,898
Noncontrolling interests 8,214 7,993
Total shareholders’ equity 822,890 809,891
Total liabilities and shareholders’ equity $ 1,942,762 $ 1,872,484


(In thousands)	March 31, 2022		December 31, 2021
Assets
Cash and cash equivalents	$	147,300	$	140,895
Trade receivables, less allowance for credit loss of $6,171 and $5,789	244,005		254,187
Inventories (Note 4)	321,602		280,617
Investments, short-term (Note 17)	39,971		48,974
Prepaid income taxes	24,485		21,235
Notes receivable, insurance companies (Note 18)	3,943		3,914
Prepaid expenses and other current assets	44,848		42,982
Total current assets	826,154		792,804

Property, plant and equipment, net (Note 5)	205,995		207,793
Operating lease right-of-use assets, net	49,887		50,178
Prepaid pension cost (Note 15)	169,842		163,283
Deferred tax assets (Note 10)	34,796		35,257
Goodwill (Note 13)	631,821		636,858
Intangible assets, net (Note 13)	299,725		306,948
Notes receivable, insurance companies, noncurrent (Note 18)	44,893		44,626

Insurance receivables (Note 18) and other noncurrent assets	152,664		158,649
Total assets	$	2,415,777	$	2,396,396

Liabilities
Notes payable and current portion of long-term debt (Note 12)	$	8,021	$	—
Accounts payable	108,407		106,780
Employees’ compensation	34,080		49,884
Insurance and product liability (Note 18)	57,037		55,125
Income taxes payable (Note 10)	14,361		5,366
Accrued restructuring and other current liabilities	112,031		113,451
Total current liabilities	333,937		330,606

Long-term debt, net (Note 12)	591,393		597,651
Pensions (Note 15) and other employee benefits	187,818		189,973
Noncurrent operating lease liabilities	40,219		40,706
Deferred tax liabilities (Note 10)	33,049		33,337
Product liability (Note 18) and other noncurrent liabilities	368,454		369,735
Total liabilities	$	1,554,870	$	1,562,008

Equity
Preferred stock, 4.5% cumulative, $50 par value (Note 7)	$	3,569	$	3,569
Common stock, no par value (Note 7)	262,627		260,121
Treasury shares, at cost (Note 7)	(332,760)		(330,376)
Accumulated other comprehensive loss (Note 6)	(140,993)		(149,140)
Retained earnings	1,068,464		1,050,214


Total shareholders’ equity	860,907		834,388
Total liabilities and shareholders’ equity	$	2,415,777	$	2,396,396

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

-4-

MSA SAFETY INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited


		Three Months Ended March 31,					Three Months Ended March 31,
(In thousands)	(In thousands)	2021		2020		(In thousands)	2022		2021
Operating Activities	Operating Activities					Operating Activities
Net income	Net income	$	36,600	$	43,802	Net income	$	35,542	$	36,636
Depreciation and amortization	Depreciation and amortization	10,504		9,640		Depreciation and amortization	14,165		10,504

Stock-based compensation (Note 10)		3,293		3,522
Pension (income) expense (Note 14)		(480)		2,216
Deferred income tax benefit (Note 9)		(595)		(546)
Stock-based compensation (Note 11)						Stock-based compensation (Note 11)	3,730		3,293
Pension expense (Note 15)						Pension expense (Note 15)	(2,652)		(480)
Deferred income tax benefit (Note 10)						Deferred income tax benefit (Note 10)	(572)		(586)
Loss on asset dispositions, net	Loss on asset dispositions, net	19		122		Loss on asset dispositions, net	4		19
Pension contributions (Note 14)		(1,923)		(1,891)
Currency exchange (gains) losses, net		(2,099)		270
Product liability expense (Note 17)		2,796		1,951
Collections on insurance receivables and notes receivable, insurance companies (Note 17)		1,765		3,000
Product liability payments (Note 17)		(7,471)		(2,328)
Pension contributions (Note 15)						Pension contributions (Note 15)	(1,914)		(1,923)
Currency exchange losses (gains), net						Currency exchange losses (gains), net	3,271		(2,099)
Product liability expense (Note 18)						Product liability expense (Note 18)	2,772		2,796
Collections on insurance receivables and notes receivable, insurance companies (Note 18)						Collections on insurance receivables and notes receivable, insurance companies (Note 18)	3,865		1,765
Product liability payments (Note 18)						Product liability payments (Note 18)	(1,758)		(7,471)

Changes in:	Changes in:					Changes in:
Trade receivables	Trade receivables	27,784		(15,339)		Trade receivables	13,365		27,784
Inventories (Note 2)		(10,781)		(18,988)
Inventories (Note 4)						Inventories (Note 4)	(40,816)		(10,826)
Accounts payable	Accounts payable	532		1,657		Accounts payable	1,408		532
Other current assets and liabilities	Other current assets and liabilities	(13,966)		(12,887)		Other current assets and liabilities	(6,858)		(13,966)
Other noncurrent assets and liabilities	Other noncurrent assets and liabilities	(362)		(594)		Other noncurrent assets and liabilities	971		(362)
Cash Flow From Operating Activities	Cash Flow From Operating Activities	45,616		13,607		Cash Flow From Operating Activities	24,523		45,616
Investing Activities	Investing Activities					Investing Activities
Capital expenditures	Capital expenditures	(9,582)		(6,562)		Capital expenditures	(7,976)		(9,582)
Acquisition, net of cash acquired (Note 18)		(62,992)		0
Purchase of short-term investments (Note 16)		(44,970)		(69,612)
Proceeds from maturities of short-term investments (Note 16)		65,000		50,000
Property disposals		35		92
Cash Flow Used in Investing Activities		(52,509)		(26,082)
Acquisition, net of cash acquired (Note 14)						Acquisition, net of cash acquired (Note 14)	—		(62,992)
Purchase of short-term investments (Note 17)						Purchase of short-term investments (Note 17)	(19,973)		(44,970)
Proceeds from maturities of short-term investments (Note 17)						Proceeds from maturities of short-term investments (Note 17)	29,000		65,000
Property disposals and other investing						Property disposals and other investing	—		35
Cash Flow From (Used in) Investing Activities						Cash Flow From (Used in) Investing Activities	1,051		(52,509)
Financing Activities	Financing Activities					Financing Activities

Proceeds from long-term debt (Note 11)		370,017		378,000
Payments on long-term debt (Note 11)		(318,000)		(350,000)
Proceeds from long-term debt (Note 12)						Proceeds from long-term debt (Note 12)	263,000		370,017
Payments on long-term debt (Note 12)						Payments on long-term debt (Note 12)	(258,000)		(318,000)

Cash dividends paid	Cash dividends paid	(16,820)		(16,331)		Cash dividends paid	(17,292)		(16,820)
Company stock purchases (Note 6)		(5,348)		(27,730)
Exercise of stock options (Note 6)		1,790		2,733

Cash Flow From (Used in) Financing Activities		31,639		(13,328)
Company stock purchases (Note 7)						Company stock purchases (Note 7)	(3,659)		(5,348)
Exercise of stock options (Note 7)						Exercise of stock options (Note 7)	51		1,790

Cash Flow (Used In) From Financing Activities						Cash Flow (Used In) From Financing Activities	(15,900)		31,639
Effect of exchange rate changes on cash, cash equivalents and restricted cash	Effect of exchange rate changes on cash, cash equivalents and restricted cash	(720)		(3,756)		Effect of exchange rate changes on cash, cash equivalents and restricted cash	(3,361)		(720)
Increase (decrease) in cash, cash equivalents and restricted cash		24,026		(29,559)
Increase in cash, cash equivalents and restricted cash						Increase in cash, cash equivalents and restricted cash	6,313		24,026
Beginning cash, cash equivalents and restricted cash	Beginning cash, cash equivalents and restricted cash	161,034		152,543		Beginning cash, cash equivalents and restricted cash	141,438		161,034
Ending cash, cash equivalents and restricted cash	Ending cash, cash equivalents and restricted cash	$	185,060	$	122,984	Ending cash, cash equivalents and restricted cash	$	147,751	$	185,060

Supplemental cash flow information:	Supplemental cash flow information:					Supplemental cash flow information:
Cash and cash equivalents	Cash and cash equivalents	$	184,728	$	122,629	Cash and cash equivalents	$	147,300	$	184,728
Restricted cash included in prepaid expenses and other current assets	Restricted cash included in prepaid expenses and other current assets	332		355		Restricted cash included in prepaid expenses and other current assets	451		332
Total cash, cash equivalents and restricted cash	Total cash, cash equivalents and restricted cash	$	185,060	$	122,984	Total cash, cash equivalents and restricted cash	$	147,751	$	185,060

*Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K.						*Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K.

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

-5-

MSA SAFETY INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN RETAINED EARNINGS,

ACCUMULATED OTHER COMPREHENSIVE LOSS AND NONCONTROLLING INTERESTS

Unaudited


(In thousands)	(In thousands)	Retained Earnings		Accumulated Other Comprehensive (Loss)		Noncontrolling Interests		(In thousands)	Retained Earnings		Accumulated Other Comprehensive (Loss)		Noncontrolling Interests

Balances December 31, 2019		$	1,012,266	$	(214,003)	$	6,773
Net income		43,802		—		—
Foreign currency translation adjustments		—		(22,947)		—
Pension and post-retirement plan adjustments, net of tax of $1,067		—		3,102		—
Unrealized net losses on available-for-sale securities (Note 16)		—		(62)		—
Reclassification from accumulated other comprehensive (loss) into net income (Note 5)		—		720		—
Income attributable to noncontrolling interests		(128)		115		13
Common dividends		(16,321)		—		—
Preferred dividends ($0.5625 per share)		(10)		—		—

Balances March 31, 2020		$	1,039,609	$	(233,075)	$	6,786

Balances December 31, 2020	Balances December 31, 2020	$	1,065,789	$	(182,397)	$	7,993	Balances December 31, 2020	$	1,103,092	$	(182,397)	$	7,993
Net income	Net income	36,600		—		—		Net income	36,636		—		—
Foreign currency translation adjustments	Foreign currency translation adjustments	—		(10,223)		—		Foreign currency translation adjustments	—		(10,223)		—
Pension and post-retirement plan adjustments, net of tax of $1,084	Pension and post-retirement plan adjustments, net of tax of $1,084	—		3,712		—		Pension and post-retirement plan adjustments, net of tax of $1,084	—		3,712		—
Unrealized net losses on available-for-sale securities (Note 16)		—		(5)		—
Reclassification of currency translation from accumulated other comprehensive (loss) into net income (Note 5)		—		—		—
Unrecognized net losses on available-for-sale securities (Note 17)								Unrecognized net losses on available-for-sale securities (Note 17)	—		(5)		—

Income attributable to noncontrolling interests	Income attributable to noncontrolling interests	(186)		(35)		221		Income attributable to noncontrolling interests	(186)		(35)		221
Common dividends	Common dividends	(16,810)		—		—		Common dividends	(16,810)		—		—
Preferred dividends ($0.5625 per share)	Preferred dividends ($0.5625 per share)	(10)		—		—		Preferred dividends ($0.5625 per share)	(10)		—		—

Balances March 31, 2021	Balances March 31, 2021	$	1,085,383	$	(188,948)	$	8,214	Balances March 31, 2021	$	1,122,722	$	(188,948)	$	8,214

Balances December 31, 2021								Balances December 31, 2021	$	1,050,214	$	(149,140)	$	—
Net income								Net income	35,542		—		—
Foreign currency translation adjustments								Foreign currency translation adjustments	—		5,892		—
Pension and post-retirement plan adjustments, net of tax of $1,016								Pension and post-retirement plan adjustments, net of tax of $1,016	—		2,264		—
Unrecognized net losses on available-for-sale securities (Note 17)								Unrecognized net losses on available-for-sale securities (Note 17)	—		(9)		—

Common dividends								Common dividends	(17,282)		—		—
Preferred dividends ($0.5625 per share)								Preferred dividends ($0.5625 per share)	(10)		—		—

Balances March 31, 2022								Balances March 31, 2022	$	1,068,464	$	(140,993)	$	—

*Prior periods have been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K.								*Prior periods have been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K.

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

-6-

MSA SAFETY INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

Note 1—Basis of Presentation

The condensed consolidated financial statements of MSA Safety Incorporated and its subsidiaries ("MSA" or ~~the "Company"~~"the Company") are unaudited. These unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary by management to fairly state the Company's results. Intercompany accounts and transactions have been eliminated. The results reported in these unaudited condensed consolidated financial statements are not necessarily indicative of the results that may be expected for the entire year. The December 31, ~~2020, Condensed Consolidated~~2021, Balance ~~Sheet~~Sheets data was derived from the audited Consolidated Balance ~~Sheet,~~Sheets, but does not include all disclosures required by accounting principles generally accepted in the United States of America ~~(U.S. GAAP)~~("U.S. GAAP"). This Form 10-Q report should be read in conjunction with MSA's Form 10-K for the year ended December 31, ~~2020,~~2021, which includes all disclosures required by U.S. GAAP.

~~Reclassifications~~ ~~- Certain reclassifications~~During the fourth quarter of ~~prior years' data~~2021, the Company changed its method of accounting for certain inventory in the United States from the last-in, first-out ("LIFO") method to the first-in, first-out ("FIFO") method. The FIFO method of accounting for inventory is preferable because it conforms the Company's entire inventory to a single method of accounting and improves comparability with the Company's peers. The effects of the change in accounting method from LIFO to FIFO have been ~~made~~retrospectively applied to ~~conform~~all periods presented in all sections of this Quarterly Report. Refer to Note 4—Inventory of the consolidated financial statements in Part II Item 8 of our 2021 Form 10-K for further information related to the ~~current year presentation. These reclassifications relate~~change in accounting principle.

Note 2—Cash and Cash Equivalents

Several of the Company's affiliates participate in a notional cash pooling arrangement to ~~additional captions disclosed within~~manage global liquidity requirements. As part of a master netting arrangement, the ~~operating section~~participants combine their cash balances in pooling accounts at the same financial institution with the ability to offset bank overdrafts of one participant against positive cash account balances held by another participant. Under the terms of the master netting arrangement, the financial institution has the right, ability and intent to offset a positive balance in one account against an overdrawn amount in another account. Amounts in each of the accounts are unencumbered and unrestricted with respect to use. As such, the net cash balance related to this pooling arrangement is included in Cash and cash equivalents in the unaudited Condensed Consolidated ~~Statement of Cash Flows but do not change the overall cash flow from operating activities for the prior years as previously reported.~~

~~Note 2—Inventories~~Balance Sheets.

The ~~following table sets forth~~Company's net cash pool position consisted of the ~~components of inventory:~~following:

(In thousands) March 31, 2021 December 31, 2020
Finished products $ 101,064 $ 81,048
Work in process 6,115 2,618
Raw materials and supplies 160,034 161,300
Inventories at current cost 267,213 244,966
Less: LIFO valuation (47,192) (47,147)
Total inventories $ 220,021 $ 197,819


(In thousands)	March 31, 2022
Gross cash pool position	$	64,304
Less: cash pool borrowings	(62,039)
Net cash pool position	2,265

Note 3—Restructuring Charges

During the three months ended March 31, 2022, we recorded restructuring charges of $2.2 million. International segment restructuring charges of $2.0 million during the three months ended March 31, 2022, were primarily related to the expansion of our European Shared Service Center in Warsaw, Poland. Americas segment restructuring charges of $0.4 million during the three months ended March 31, 2022, were primarily related to programs to adjust our operations in response to current business conditions.

During the three months ended March 31, 2021, we recorded restructuring charges of $1.3 million. International segment restructuring charges of $1.0 million during thethe three months ended March 31, 2021, were primarily related to our ongoing initiatives to drive profitable growth and right size our operations. A~~mericas~~Americas segment restructuring charges of ~~$0.2~~$0.2 million during the three months ended March 31, 2021, were primarily related to costs associated with our global Fixed Gas & Flame Detection manufacturing footprint optimization as well as programs to adjust our operations in response to current business conditions.

During the three months ended March 31, 2020, we recorded restructuring charges of $2.0 million. International segment restructuring charges of $1.9 million during the three months ended March 31, 2020, were primarily related to severance costs for staff reductions associated with our ongoing initiatives to drive profitable growth.

-7-

Activity and reserve balances for restructuring charges by segment were as follows:

(In millions) Americas International Corporate Total
Reserve balances at December 31, 2019 $ 0.3 $ 5.9 $ 0 $ 6.2
Restructuring charges 4.7 21.9 0.8 27.4
Currency translation and other adjustments (0.1) 0.1 0 0
Cash payments / utilization (2.1) (8.6) (0.4) (11.1)
Reserve balances at December 31, 2020 $ 2.8 $ 19.3 $ 0.4 $ 22.5
Restructuring charges 0.2 1.0 0.1 1.3
Currency translation and other adjustments 0 (0.6) 0 (0.6)
Cash payments (0.3) (3.1) (0.1) (3.5)
Reserve balances at March 31, 2021 $ 2.7 $ 16.6 $ 0.4 $ 19.7


(In millions)	Americas		International		Corporate		Total
Reserve balances at December 31, 2020	$	2.8	$	19.3	$	0.4	$	22.5
Restructuring charges	4.6		11.2		0.6		16.4
Currency translation	(0.1)		(0.2)		—		(0.3)
Cash payments / utilization	(4.0)		(12.9)		(0.7)		(17.6)
Reserve balances at December 31, 2021	$	3.3	$	17.4	$	0.3	$	21.0
Restructuring charges (releases)	0.4		2.0		(0.2)		2.2
Currency translation	—		(0.2)		—		(0.2)
Cash payments	(1.1)		(2.1)		—		(3.2)
Reserve balances at March 31, 2022	$	2.6	$	17.1	$	0.1	$	19.8

Restructuring reserves are included in ~~Other~~Accrued restructuring and other current liabilities in the accompanying unaudited Condensed Consolidated Balance Sheets.

Note 4—Inventories

The following table sets forth the components of inventory:


(In thousands)	March 31, 2022		December 31, 2021
Finished products	$	97,004	$	87,657
Work in process	15,562		6,534
Raw materials and supplies	209,036		186,426
Total inventories	$	321,602	$	280,617

Note 5—Property, Plant and Equipment

The following table sets forth the components of property, plant and equipment, net:


(In thousands)	(In thousands)	March 31, 2021		December 31, 2020		(In thousands)	March 31, 2022		December 31, 2021
Land	Land	$	5,189	$	4,275	Land	$	5,070	$	5,131

Buildings	Buildings	128,776		128,887		Buildings	138,610		136,272
Machinery and equipment	Machinery and equipment	426,336		422,333		Machinery and equipment	445,746		435,652
Construction in progress	Construction in progress	40,466		38,753		Construction in progress	29,025		36,552
Total	Total	600,767		594,249		Total	618,451		613,607
Less: accumulated depreciation	Less: accumulated depreciation	(402,935)		(404,629)		Less: accumulated depreciation	(412,456)		(405,814)
Property, plant and equipment, net	Property, plant and equipment, net	$	197,832	$	189,620	Property, plant and equipment, net	$	205,995	$	207,793

-8-

Note 5—6—Reclassifications Out of Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss were as follows:


		MSA Safety Incorporated					Noncontrolling Interests					MSA Safety Incorporated				Noncontrolling Interests
		Three Months Ended March 31,					Three Months Ended March 31,					Three Months Ended March 31,				Three Months Ended March 31,
(In thousands)	(In thousands)	2021		2020			2021		2020		(In thousands)	2022		2021		2022		2021
Pension and other post-retirement benefits (a)	Pension and other post-retirement benefits (a)										Pension and other post-retirement benefits (a)
Balance at beginning of period	Balance at beginning of period	$	(115,552)	$	(124,848)		$	0	$	0	Balance at beginning of period	$	(57,296)	$	(115,552)	$	—	$	—
Amounts reclassified from accumulated other comprehensive loss into net income:	Amounts reclassified from accumulated other comprehensive loss into net income:										Amounts reclassified from accumulated other comprehensive loss into net income:
Amortization of prior service credit (Note 14)		(24)		(52)			0		0
Recognized net actuarial losses (Note 14)		4,820		4,221			0		0
Amortization of prior service credit (Note 15)											Amortization of prior service credit (Note 15)	(48)		(24)		—		—
Recognized net actuarial losses (Note 15)											Recognized net actuarial losses (Note 15)	3,328		4,820		—		—
Tax benefit	Tax benefit	(1,084)		(1,067)			0		0		Tax benefit	(1,016)		(1,084)		—		—
Total amount reclassified from accumulated other comprehensive loss, net of tax, into net income	Total amount reclassified from accumulated other comprehensive loss, net of tax, into net income	3,712		3,102			0		0		Total amount reclassified from accumulated other comprehensive loss, net of tax, into net income	2,264		3,712		—		—

Balance at end of period	Balance at end of period	$	(111,840)	$	(121,746)		$	0	$	0	Balance at end of period	$	(55,032)	$	(111,840)	$	—	$	—
Available-for-sale securities	Available-for-sale securities										Available-for-sale securities
Balance at beginning of period	Balance at beginning of period	$	(1)	$	6		$	0	$	0	Balance at beginning of period	$	(5)	$	(1)	$	—	$	—
Unrealized loss on available-for-sale securities (Note 16)		(5)		(62)			0		0
Unrealized loss on available-for-sale securities (Note 17)											Unrealized loss on available-for-sale securities (Note 17)	(9)		(5)		—		—
Balance at end of period	Balance at end of period	$	(6)	$	(56)		$	0	$	0	Balance at end of period	$	(14)	$	(6)	$	—	$	—
Foreign currency translation	Foreign currency translation										Foreign currency translation
Balance at beginning of period	Balance at beginning of period	$	(66,844)	$	(89,161)		$	582	$	423	Balance at beginning of period	$	(91,839)	$	(66,844)	$	—	$	582
Reclassification from accumulated other comprehensive loss into net income		0		720		(b)	0		0

Foreign currency translation adjustments	Foreign currency translation adjustments	(10,258)		(22,832)			35		(115)		Foreign currency translation adjustments	5,892		(10,258)		—		35
Balance at end of period	Balance at end of period	$	(77,102)	$	(111,273)		$	617	$	308	Balance at end of period	$	(85,947)	$	(77,102)	$	—	$	617

(a) Reclassifications out of accumulated other comprehensive loss and into net income are included in the computation of net periodic pension and other post-retirement benefit costs (refer to Note ~~14—~~15—Pensions and Other Post-retirement Benefits).

~~(b)~~ Reclassifications into net income relate primarily to the closure of several subsidiaries in our Europe, Middle East & Africa ("EMEA") operating segment and are included in Currency exchange (gains) losses, net, within the unaudited Condensed Consolidated Statement of Income.

~~-9-~~

Note 6—7—Capital Stock

Preferred Stock - The Company has authorized 100,000 shares of $50 par value 4.5% cumulative preferred nonvoting stock which is callable at $52.50. There are 71,340 shares issued and 52,998 shares held in treasury at March 31, ~~2021.~~2022. The Treasury shares at cost line onin the unaudited Condensed Consolidated Balance ~~Sheet~~Sheets includes $1.8 million related to preferred stock. There were 0no treasury purchases of preferred stock shares during both the three months ended March 31, 2022 and 2021. ~~There were treasury purchases of 120 preferred stock shares during the three months ended March 31, 2020.~~ The Company has also authorized 1,000,000 shares of $10 par value second cumulative preferred voting stock. ~~NaN~~No shares have been issued as of March 31, ~~2021.~~2022.

Common Stock - The Company has authorized 180,000,000 shares of 0no par value common stock. There were 62,081,391 shares issued as of December 31, ~~2020. NaN~~2021. No new shares were issued during the three months ended March 31, ~~2021,~~2022, or ~~2020.~~2021. There were ~~39,167,207~~39,335,816 and ~~39,067,902~~39,276,518 shares outstanding at March 31, ~~2021,~~2022 and December 31, ~~2020,~~2021, respectively.

Treasury Shares - The Company's share repurchase program authorizes up to $100.0 million to repurchase MSA common stock in the open market and in private transactions. The share repurchase program has no expiration date. The maximum number of shares that may be repurchased is calculated based on the dollars remaining under the program and the respective month-end closing share price. During the three months ended March 31, 2022 and 2021, 0no shares were repurchased under this program. ~~During the three months ended March 31, 2020, 175,000 shares were repurchased under the program.~~ There were ~~22,914,184~~22,745,575 and ~~23,013,489~~22,804,873 Treasury Shares at March 31, ~~2021,~~2022 and December 31, ~~2020,~~2021, respectively.

The Company issues Treasury Shares for all stock-based compensation plans. Shares are issued from Treasury at the average Treasury Share cost on the date of the transaction. There were ~~32,650~~28,366 and ~~58,840~~32,650 Treasury Shares issued for these purposes during the three months ended March 31, 2022 and 2021, ~~and 2020,~~ respectively.

-9-

Common stock activity is summarized as follows:


		Three Months Ended March 31, 2021				Three Months Ended March 31, 2020					Three Months Ended March 31, 2022				Three Months Ended March 31, 2021
(In thousands)	(In thousands)	Common Stock		Treasury Cost		Common Stock		Treasury Cost		(In thousands)	Common Stock		Treasury Cost		Common Stock		Treasury Cost
Balance at beginning of period	Balance at beginning of period	$	242,693	$	(326,156)	$	229,127	$	(303,566)	Balance at beginning of period	$	260,121	$	(328,776)	$	242,693	$	(326,156)
Stock compensation expense	Stock compensation expense	3,293		0		3,522		0		Stock compensation expense	3,730		—		3,293		—
Restricted and performance stock awards	Restricted and performance stock awards	(1,333)		1,333		(2,239)		2,239		Restricted and performance stock awards	(1,260)		1,260		(1,333)		1,333
Stock options exercised	Stock options exercised	1,234		556		1,757		976		Stock options exercised	36		15		1,234		556
Treasury shares purchased	Treasury shares purchased	0		(5,348)		0		(7,617)		Treasury shares purchased	—		(3,659)		—		(5,348)

Share repurchase program		0		0		0		(20,113)

Balance at end of period	Balance at end of period	$	245,887	$	(329,615)	$	232,167	$	(328,081)	Balance at end of period	$	262,627	$	(331,160)	$	245,887	$	(329,615)

~~-10-~~

Note 7—8—Segment Information

We are organized into 4 geographical operating segments that are based on management responsibilities: Northern North America, Latin America, Europe, Middle East & Africa ("EMEA"), and Asia Pacific ("APAC"). The operating segments have been aggregated (based on economic similarities, the nature of their products, end-user markets and methods of distribution) into 3 reportable segments: Americas, International, and Corporate.

The Americas segment is comprised of our operations in Northern North American and Latin American geographies. The International segment is comprised of our operations of all geographies outside of the Americas. Certain global expenses are allocated to each segment in a manner consistent with where the benefits from the expenses are derived.

The Company's sales are allocated to each country based primarily on the destination of the end-customer.

Adjusted operating income (loss), adjusted operating margin, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) and adjusted EBITDA margin are the measures used by the chief operating decision maker to evaluate segment performance and allocate resources. Adjusted operating income (loss) is defined as operating income excluding restructuring charges, currency exchange gains (losses), product liability expense, acquisition related costs, including acquisition related amortization ~~and COVID-19 related costs, consisting of a one-time bonus for essential manufacturing employees~~ and adjusted operating margin is defined as adjusted operating income (loss) divided by segment sales to external customers. Adjusted EBITDA is defined as adjusted operating income (loss) plus depreciation and amortization and adjusted EBITDA margin is defined as adjusted EBITDA divided by segment sales to external customers. Adjusted operating income (loss), adjusted operating margin, adjusted EBITDA and adjusted EBITDA margin are not recognized terms under U.S. GAAP, and therefore, do not purport to be alternatives to operating income or operating margin as a measure of operating performance. Further, the Company's measure of adjusted operating income (loss), adjusted operating margin, adjusted EBITDA and adjusted EBITDA margin may not be comparable to similarly titled measures of other companies. Adjusted operating income (loss) and adjusted EBITDA on a consolidated basis is presented in the following table to reconcile the segment operating performance measures to the most directly comparable GAAP measure, to operating income, as presented on the unaudited Condensed Consolidated ~~Statement~~Statements of Income.

The accounting principles applied at the operating segment level in determining operating income (loss) are generally the same as those applied at the unaudited condensed consolidated financial ~~statement~~statements level. Sales and transfers between operating segments are accounted for at market-based transaction prices and are eliminated in consolidation.

~~-11-~~-10-

Reportable segment information is presented in the following table:


(In thousands, except percentage amounts)	(In thousands, except percentage amounts)	Americas			International			Corporate		Consolidated Totals		(In thousands, except percentage amounts)	Americas			International			Corporate		Consolidated Totals
Three Months Ended March 31, 2021
Three Months Ended March 31, 2022												Three Months Ended March 31, 2022
Sales to external customers	Sales to external customers	$	208,340		$	100,088		$	0	$	308,428	Sales to external customers	$	225,648		$	105,044		$	—	$	330,692

Operating income	Operating income									44,038		Operating income									42,668
Restructuring charges (Note 3)	Restructuring charges (Note 3)									1,308		Restructuring charges (Note 3)									2,189
Currency exchange gains, net (Note 5)										(2,099)
Product liability expense (Note 17)										2,796
Acquisition related costs (Note 18)										1,373
Currency exchange losses, net												Currency exchange losses, net									3,271
Product liability expense (Note 18)												Product liability expense (Note 18)									2,772
Acquisition related costs(a) (Note 14)												Acquisition related costs(a) (Note 14)									2,943

Adjusted operating income (loss)	Adjusted operating income (loss)	45,152			8,790			(6,526)		47,416		Adjusted operating income (loss)	52,435			9,024			(7,616)		53,843
Adjusted operating margin %	Adjusted operating margin %	21.7		%	8.8		%					Adjusted operating margin %	23.2		%	8.6		%
Depreciation and amortization	Depreciation and amortization									10,504		Depreciation and amortization									11,829
Adjusted EBITDA	Adjusted EBITDA	52,186			12,163			(6,429)		57,920		Adjusted EBITDA	60,796			12,362			(7,486)		65,672
Adjusted EBITDA margin %	Adjusted EBITDA margin %	25.0		%	12.2		%					Adjusted EBITDA margin %	26.9		%	11.8		%


(In thousands, except percentage amounts)	(In thousands, except percentage amounts)	Americas			International			Corporate		Consolidated Totals		(In thousands, except percentage amounts)	Americas			International			Corporate		Consolidated Totals
Three Months Ended March 31, 2020
Three Months Ended March 31, 2021												Three Months Ended March 31, 2021
Sales to external customers	Sales to external customers	$	231,253		$	109,892		$	0	$	341,145	Sales to external customers	$	208,340		$	100,088		$	—	$	308,428

Operating income	Operating income									58,782		Operating income									44,083
Restructuring charges (Note 3)	Restructuring charges (Note 3)									2,007		Restructuring charges (Note 3)									1,308
Currency exchange losses, net (Note 5)										270
Product liability expense (Note 17)										1,951
Acquisition related costs (Note 18)										97
COVID-19 related costs										757
Currency exchange gains, net												Currency exchange gains, net									(2,099)
Product liability expense (Note 18)												Product liability expense (Note 18)									2,796
Acquisition related costs(a)												Acquisition related costs(a)									1,373

Adjusted operating income (loss)	Adjusted operating income (loss)	59,807			12,671			(8,614)		63,864		Adjusted operating income (loss)	45,195			8,792			(6,526)		47,461
Adjusted operating margin %	Adjusted operating margin %	25.9		%	11.5		%					Adjusted operating margin %	21.7		%	8.8		%
Depreciation and amortization	Depreciation and amortization									9,640		Depreciation and amortization									10,504
Adjusted EBITDA	Adjusted EBITDA	66,257			15,765			(8,518)		73,504		Adjusted EBITDA	52,229			12,165			(6,429)		57,965
Adjusted EBITDA margin %	Adjusted EBITDA margin %	28.7		%	14.3		%					Adjusted EBITDA margin %	25.1		%	12.2		%

*Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. Adjustments were made to Americas and International.												*Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. Adjustments were made to Americas and International.

(a)Acquisition related costs include advisory, legal, accounting, valuation, and other professional or consulting fees incurred during due diligence and integration. These costs are included in Selling, general and administrative expense in the unaudited Condensed Consolidated Statements of Income. Acquisition related costs also include the acquisition related amortization, which is included in Cost of products sold in the unaudited Condensed Consolidated Statements of Income.

~~-12-~~-11-

Total sales by product group was as follows:


Three Months Ended March 31, 2021		Consolidated			Americas			International
Three Months Ended March 31, 2022											Three Months Ended March 31, 2022	Consolidated			Americas			International
(In thousands, except percentages)	(In thousands, except percentages)	Dollars		Percent	Dollars		Percent	Dollars		Percent	(In thousands, except percentages)	Dollars		Percent	Dollars		Percent	Dollars		Percent
Fixed Gas & Flame Detection (a)											Fixed Gas & Flame Detection (a)	$	83,077	25%	$	54,621	24%	$	28,456	27%
Breathing Apparatus	Breathing Apparatus	$	69,644	23%	$	48,798	23%	$	20,846	21%	Breathing Apparatus	70,951		22%	50,398		22%	20,553		20%
Fixed Gas & Flame Detection		60,119		19%	36,277		17%	23,842		24%
Firefighter Helmets & Protective Apparel	Firefighter Helmets & Protective Apparel	46,010		15%	34,988		17%	11,022		11%	Firefighter Helmets & Protective Apparel	48,461		15%	33,476		15%	14,985		14%
Portable Gas Detection	Portable Gas Detection	37,429		12%	25,702		12%	11,727		12%	Portable Gas Detection	36,744		11%	25,791		11%	10,953		10%
Industrial Head Protection	Industrial Head Protection	32,696		11%	25,111		12%	7,585		8%	Industrial Head Protection	36,157		11%	28,165		13%	7,992		8%
Fall Protection	Fall Protection	26,067		8%	15,672		8%	10,395		10%	Fall Protection	24,662		7%	16,277		7%	8,385		8%
Other ~~(a)~~(b)	Other ~~(a)~~(b)	36,463		12%	21,792		11%	14,671		14%	Other ~~(a)~~(b)	30,640		9%	16,920		8%	13,720		13%
Total	Total	$	308,428	100%	$	208,340	100%	$	100,088	100%	Total	$	330,692	100%	$	225,648	100%	$	105,044	100%


Three Months Ended March 31, 2020		Consolidated			Americas			International
Three Months Ended March 31, 2021											Three Months Ended March 31, 2021	Consolidated			Americas			International
(In thousands, except percentages)	(In thousands, except percentages)	Dollars		Percent	Dollars		Percent	Dollars		Percent	(In thousands, except percentages)	Dollars		Percent	Dollars		Percent	Dollars		Percent
Breathing Apparatus	Breathing Apparatus	$	75,844	22%	$	52,693	23%	$	23,151	21%	Breathing Apparatus	$	69,644	23%	$	48,798	23%	$	20,846	21%
Fixed Gas & Flame Detection	Fixed Gas & Flame Detection	69,911		21%	41,247		18%	28,664		26%	Fixed Gas & Flame Detection	60,119		19%	36,277		17%	23,842		24%
Firefighter Helmets & Protective Apparel	Firefighter Helmets & Protective Apparel	42,547		12%	35,113		15%	7,434		7%	Firefighter Helmets & Protective Apparel	46,010		15%	34,988		17%	11,022		11%
Portable Gas Detection	Portable Gas Detection	41,052		12%	27,648		12%	13,404		12%	Portable Gas Detection	37,429		12%	25,702		12%	11,727		12%
Industrial Head Protection	Industrial Head Protection	35,332		10%	27,555		12%	7,777		7%	Industrial Head Protection	32,696		11%	25,111		12%	7,585		8%
Fall Protection	Fall Protection	27,428		8%	17,697		8%	9,731		9%	Fall Protection	26,067		8%	15,672		8%	10,395		10%
Other ~~(a)~~(b)	Other ~~(a)~~(b)	49,031		15%	29,300		12%	19,731		18%	Other ~~(a)~~(b)	36,463		12%	21,792		11%	14,671		14%
Total	Total	$	341,145	100%	$	231,253	100%	$	109,892	100%	Total	$	308,428	100%	$	208,340	100%	$	100,088	100%

(a)Fixed Gas & Flame Detection includes sales from the Bacharach, Inc. and its affiliated companies ("Bacharach") acquisition for periods following July 1, 2021 (Americas and International). Please refer to Note 14 - Acquisitions.

(b)Other products include sales of Air Purifying ~~Respirators ("APR").~~

Respirators.

~~-13-~~-12-

Note 8—9—Earnings per Share

Basic earnings per share attributable to MSA Safety Incorporated common shareholders is computed by dividing net income, after the deduction of preferred stock dividends and undistributed earnings allocated to participating securities, by the weighted average number of common shares outstanding during the period. Diluted earnings per share attributable to MSA Safety Incorporated common shareholders assumes the issuance of common stock for all potentially dilutive share equivalents outstanding not classified as participating securities. Participating securities are defined as unvested stock-based compensation awards that contain nonforfeitable rights to dividends.


Amounts attributable to MSA Safety Incorporated common shareholders:	Amounts attributable to MSA Safety Incorporated common shareholders:	Three Months Ended March 31,				Amounts attributable to MSA Safety Incorporated common shareholders:	Three Months Ended March 31,
(In thousands, except per share amounts)	(In thousands, except per share amounts)	2021		2020				(In thousands, except per share amounts)	2022		2021
Net income	Net income	$	36,414	$	43,674			Net income	$	35,542	$	36,450
Preferred stock dividends	Preferred stock dividends	(10)		(10)				Preferred stock dividends	(10)		(10)
Net income available to common equity	Net income available to common equity	36,404		43,664				Net income available to common equity	35,532		36,440
Dividends and undistributed earnings allocated to participating securities	Dividends and undistributed earnings allocated to participating securities	(14)		(33)				Dividends and undistributed earnings allocated to participating securities	(4)		(14)
Net income available to common shareholders	Net income available to common shareholders	36,390		43,631				Net income available to common shareholders	35,528		36,426

Basic weighted-average shares outstanding	Basic weighted-average shares outstanding	39,094		38,824				Basic weighted-average shares outstanding	39,291		39,094
Stock-based compensation awards	Stock-based compensation awards	326		528				Stock-based compensation awards	232		326
Diluted weighted-average shares outstanding	Diluted weighted-average shares outstanding	39,420		39,352				Diluted weighted-average shares outstanding	39,523		39,420
Antidilutive stock options	Antidilutive stock options	0		0				Antidilutive stock options	—		—

Earnings per share:	Earnings per share:							Earnings per share:
Basic	Basic	$	0.93	$	1.12			Basic	$	0.90	$	0.93
Diluted	Diluted	$	0.92	$	1.11			Diluted	$	0.90	$	0.92

*Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K.								*Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K.

Note 9—10—Income Taxes

The Company's effective tax rate for the first quarter of ~~2021~~2022 was ~~21.0% and is consistent with~~21.7% which differs from the United States of America ("U.S.") federal statutory rate of 21% asprimarily due to state income taxes, ~~and a one time foreign expense associated with pension are~~partially offset by tax benefits on certain share-based payments. The Company's effective tax rate for the first quarter of ~~2020~~2021 was ~~23.0%~~21.0%, which ~~differs from~~is consistent with the U.S. statutory rate of 21% ~~primarily due to~~as state income taxes ~~higher~~and a one time foreign ~~entity losses in jurisdictions where we cannot take tax benefits, partially~~expense associated with pension was offset by tax benefits on certain share-based payments.

On June 10, 2021 the United Kingdom ("U.K.") Parliament announced royal assent for Bill No. 12, on the Finance Act of 2021. This bill will increase the statutory rate from 19% to 25% in April 2023. The Company recorded this impact on its deferred tax balances in the second quarter of 2021.

At March 31, ~~2021,~~2022, the Company had a gross liability for unrecognized tax benefits of ~~$9.1~~$5.0 million. The Company has recognized tax benefits associated with these liabilities of ~~$2.7~~$2.5 million at March 31, ~~2021.~~2022. The gross liability includes amounts associated with foreign tax exposure in prior periods.

The Company recognizes interest related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company's liability for accrued interest related to uncertain tax positions was ~~$1.1~~$0.9 million at March 31, ~~2021.~~2022.

We are subject to regular review and audit by both foreign and domestic tax authorities. While we believe our tax positions will be sustained, the final outcome of tax audits and related litigation may differ materially from the tax amounts recorded in our unaudited condensed consolidated financial statements.

~~-14-~~

-13-

Note ~~10—~~11—Stock Plans

The 2016 Management Equity Incentive Plan provides for various forms of stock-based compensation for eligible key employees through May 2026. Management stock-based compensation includes stock options, restricted stock awards, restricted stock units and performance stock units. The 2017 Non-Employee Directors’ Equity Incentive Plan provides for grants of stock options and restricted stock to non-employee directors through May 2027. We issue treasury shares for stock option exercises and grants of restricted stock and performance stock. Please refer to Note 6—7—Capital Stock for further information regarding stock compensation share issuance.

Stock compensation expense is as follows:


		Three Months Ended March 31,				Three Months Ended March 31,
(In thousands)	(In thousands)	2021		2020			(In thousands)	2022		2021
Stock compensation expense	Stock compensation expense	$	3,293	$	3,522		Stock compensation expense	$	3,730	$	3,293
Income tax expense	Income tax expense	794		859			Income tax expense	914		794
Stock compensation expense, net of tax	Stock compensation expense, net of tax	$	2,499	$	2,663		Stock compensation expense, net of tax	$	2,816	$	2,499

A summary of stock option activity for the three months ended March 31, ~~2021,~~2022, follows:

Shares Weighted Average
Exercise Price
Outstanding at January 1, 2021 283,998 $ 46.23
Exercised (38,806) 46.09
Forfeited (81) 49.66
Outstanding at March 31, 2021 245,111 46.26
Exercisable at March 31, 2021 243,563 $ 46.25


	Shares	Weighted Average Exercise Price
Outstanding at January 1, 2022	161,701	$	45.47

Exercised	(1,056)	48.95


Outstanding at March 31, 2022	160,645	45.45
Exercisable at March 31, 2022	160,461	$	45.44

Restricted stock awards and restricted stock units are valued at the market value of the stock on the grant date. A summary of restricted stock activity for the three months ended March 31, ~~2021,~~2022, follows:


		Shares	Weighted Average Grant Date Fair Value			Shares	Weighted Average Grant Date Fair Value
Unvested at January 1, 2021		146,191	$	105.83
Unvested at January 1, 2022					Unvested at January 1, 2022	118,343	$	132.62
Granted	Granted	28,128	170.69		Granted	44,153	138.21
Vested	Vested	(29,981)	85.89		Vested	(31,111)	104.75
Forfeited	Forfeited	(156)	121.83		Forfeited	(2,341)	133.70
Unvested at March 31, 2021		144,182	$	122.62
Unvested at March 31, 2022					Unvested at March 31, 2022	129,044	$	141.23

Performance stock units that have a market condition modifier ~~and~~ are valued at an estimated fair value using a Monte Carlo model. The final number of shares to be issued for performance stock units granted in the first quarter of ~~2021~~2022 may range from 0% to 200% of the target award based on achieving the specified performance targets over the performance period plus an additional modifier based on total shareholder return ~~(TSR)~~("TSR") over the performance period. The following weighted average assumptions were used in estimating the fair value of the performance stock units granted infor the ~~first quarter of 2021.~~three months ended March 31, 2022.

Fair value per unit

$~~177.50~~143.60

Risk-free interest rate

~~0.2%~~1.72%

Expected dividend yield

~~1.33%~~1.14%

Expected volatility

~~35.6%~~34.4%

MSA stock beta

~~0.932~~0.890

The risk-free interest rate is based on the U.S. Treasury Constant Maturity rates as of the grant date converted into an implied spot rate yield curve. Expected dividend yield is based on the most recent annualized dividend divided by the one year average closing share price. Expected volatility is based on the ~~ten~~three year historical volatility preceding the grant date using daily stock prices. Expected life is based on historical stock option exercise data.

~~-15-~~

-14-

A summary of performance stock unit activity for the three months ended March 31, ~~2021,~~2022, follows:


		Shares	Weighted Average Grant Date Fair Value			Shares	Weighted Average Grant Date Fair Value
Unvested at January 1, 2021		200,212	$	104.69
Unvested at January 1, 2022					Unvested at January 1, 2022	193,335	$	129.86
Granted	Granted	46,070	177.32		Granted	81,162	142.44
Performance adjustments	Performance adjustments	4,941	88.86		Performance adjustments	(22,147)	99.84
Vested	Vested	(63,286)	84.97		Vested	(55,447)	101.38

Unvested at March 31, 2021		187,937	$	128.72
Forfeited					Forfeited	(1,233)	71.72
Unvested at March 31, 2022					Unvested at March 31, 2022	195,670	$	146.50

The performance adjustments above relate primarily to the final number of shares issued for the ~~2018~~2019 performance unit awards which vested in the first quarter of ~~2021~~2022 at ~~105.4%~~64.2% of the target award based on both cumulative performance against the ~~operating~~EBITDA margin and revenue growth targets and MSA's TSR during the three-year performance period.

Note ~~11—~~12—Long-Term Debt


(In thousands)	(In thousands)	March 31, 2021		December 31, 2020		(In thousands)	March 31, 2022		December 31, 2021
2010 Senior Notes payable through 2021, 4.00%, net of debt issuance costs		$	20,000	$	20,000
2016 Senior Notes payable through 2031, 3.40%, net of debt issuance costs	2016 Senior Notes payable through 2031, 3.40%, net of debt issuance costs	75,595		74,926		2016 Senior Notes payable through 2031, 3.40%, net of debt issuance costs	72,073		74,203
Senior revolving credit facility maturing in 2023, net of debt issuance costs		264,833		212,231
2021 Senior Notes payable through 2036, 2.69%, net of debt issuance costs						2021 Senior Notes payable through 2036, 2.69%, net of debt issuance costs	99,695		99,694
2021 Senior Notes payable through 2036, 2.69%, net of debt issuance costs						2021 Senior Notes payable through 2036, 2.69%, net of debt issuance costs	99,695		99,694
Senior revolving credit facility maturing in 2026, net of debt issuance costs						Senior revolving credit facility maturing in 2026, net of debt issuance costs	327,951		324,060
Total	Total	360,428		307,157		Total	599,414		597,651
Amounts due within one year, net of debt issuance costs		20,000		20,000
Amounts due within one year						Amounts due within one year	8,021		—
Long-term debt, net of debt issuance costs	Long-term debt, net of debt issuance costs	$	340,428	$	287,157	Long-term debt, net of debt issuance costs	$	591,393	$	597,651

On ~~September 7, 2018,~~May 24, 2021, the Company entered into ~~an amended agreement covering its senior revolving credit facility~~a Fourth Amended and Restated Credit Agreement (the “Revolving Credit Facility" or "Facility”) that extended its term through ~~September 2023~~May 24, 2026 and increased the capacity to ~~$600.0~~$900.0 million. Under the amended agreement, the Company may elect either a Base rate of interest (“BASE”) or an interest rate based on the London Interbank Offered Rate (“LIBOR”). The BASE is a daily fluctuating per annum rate equal to the highest of (i) 0.00%, (ii) the Prime Rate, ~~(ii)~~(iii) the Federal Funds Open Rate plus one half of one percent (0.5%), ~~(iii)~~(iv) the Overnight Bank Funding Rate, plus one half of one percent ~~(0.50%~~(0.5%), or ~~(iv)~~(v) the Daily ~~Libor~~LIBOR Rate plus one percent (1.00%). The Company pays a credit spread of 0 to 175 basis points based on the Company’s net EBITDA leverage ratio and elected rate (BASE or LIBOR). The Company has a weighted average revolver interest rate of ~~1.09%~~1.40% as of March 31, ~~2021.~~2022. At March 31, ~~2021, $333.1~~2022, $568.6 million of the existing ~~$600.0~~$900.0 million senior revolving credit facility was unused, including letters of credit issued under the facility. The facility also provides an accordion feature that allows the Company to access an additional $400.0 million of capacity pending approval by MSA’s board of directors and from the bank group.

On ~~January 22, 2016,~~July 1, 2021 the Company entered into a Third Amended and Restated Multi-Currency Note Purchase and Private Shelf Agreement (the “Prudential Note Agreement”) with PGIM, Inc. (“Prudential”). The Prudential Note Agreement provided for (i) the issuance of $100.0 million of 2.69% Series C Senior Notes due July 1, 2036 and (ii) the establishment of an ~~amended multi-currency~~uncommitted note ~~purchase and private shelf agreement, pursuant to which~~issuance facility whereby the Company ~~issued notes~~may request, subject to Prudential’s acceptance in an aggregate original principal amount of £54.9 million (approximately $75.7 million at March 31, 2021). The Notes are repayable in annual installments of £6.1 million (approximately $8.4 million at March 31, 2021), commencing January 22, 2023, with a final payment of any remaining amount outstanding on January 22, 2031. The interest rate on these Notes is fixed at 3.4%. On September 7, 2018, the Company further amended the multi-currency note purchase and private shelf agreement to, among other things, allow the Company to request from time to time during a three-year period ending September 7, 2021,its sole discretion, the issuance of up to ~~$150~~$335.0 million aggregate principal amount of ~~additional~~ senior unsecured notes. ~~No additional notes have been issued under the amended agreement as~~As of March 31, ~~2021.~~

2022, the Company had issued £54.9 million (approximately $72.2 million at March 31, 2022) of 3.4% Series B Senior Notes due January 22, 2031. Maturities of this note are £6.1 million (approximately $8.0 million) due January 22, 2023 with annual maturities of £6.1 million through January 2031.

On ~~January 4, 2019,~~July 1, 2021, the Company entered into a Second Amended and Restated Master Note Facility (the “NYL Note Facility”) with NYL Investors. The NYL Note Facility provided for (i) the issuance of $100.0 million of 2.69% Series A Senior Notes due July 1, 2036 and (ii) the establishment of an ~~amended and restated master~~uncommitted note issuance facility ~~with New York Life. Under the amended facility,~~whereby the Company may request, ~~from time~~subject to ~~time during a three-year period ending January 4, 2022,~~NYL Investors’ acceptance in its sole discretion, the issuance of up to ~~$150~~$200.0 million aggregate principal amount of ~~additional~~ senior ~~promissory~~unsecured notes. ~~As of March 31, 2021, 0 notes have been issued under the amended facility.~~

~~-16-~~-15-

The ~~senior revolving credit facility~~Revolving Credit Facility, Prudential Note Agreement and ~~the multi-currency note purchase and private shelf agreement~~NYL Note Facility require the Company to comply with specified financial covenants, including a requirement to maintain a minimum fixed charges coverage ratio of not less than 1.50 to 1.00 and a consolidated leverage ratio not to exceed 3.50 to 1.00; except during an acquisition period, defined as four consecutive fiscal quarters beginning with the quarter of acquisition, in which case the consolidated net leverage ratio shall not exceed 4.00 to 1.00; in each case calculated on the basis of the trailing four fiscal quarters. In addition, ~~both~~the agreements contain negative covenants limiting the ability of the Company and its subsidiaries to incur additional indebtedness or issue guarantees, create or incur liens, make loans and investments, make acquisitions, transfer or sell assets, enter into transactions with affiliated parties, make changes in its organizational documents that are materially adverse to lenders or modify the nature of the Company's or its subsidiaries' business. ~~However,~~All credit facilities exclude the ~~covenants contained~~subsidiary, Mine Safety Appliances Company,

LLC.

On July 1, 2021, the Company acquired Bacharach in a transaction valued at $329.4 million, net of cash acquired. The acquisition was partially financed by $200.0 million of 2.69% Senior Notes from the ~~New York Life~~Prudential Note Agreement and NYL Note Facility. The remaining purchase price was financed under the Revolving Credit Facility.

During August 2021, the Company amended ~~facility do~~its Revolving Credit Facility to transition from Sterling LIBOR reference rates to Sterling Overnight Interbank Average Rate ("SONIA") reference rates. The Company will apply the optional expedients in ASC 848, Reference Rate Reform, to this modification and potential future modifications driven by reference rate reform, accounting for the modifications as a continuation of the existing contracts. Therefore, these modifications will not ~~apply until promissory notes~~require remeasurement at the modification date or a reassessment of previous accounting determinations. As such, the Company does not anticipate the change in reference rates will have an impact on the Company’s unaudited condensed consolidated financial statements. Management continues to evaluate the Company’s other outstanding U.S. LIBOR based contracts to determine whether reference rate modifications are ~~issued.~~necessary.

~~The~~As of March 31, 2022, the Company was in full compliance with ~~all debt~~the restrictive covenants ~~at March 31, 2021.~~under its various credit agreements.

The Company had outstanding bank guarantees and standby letters of credit with banks as of March 31, ~~2021,~~2022, totaling ~~$11.4~~$8.9 million, of which ~~$1.3~~$1.5 million ~~relat~~erelate to the senior revolving credit facility. The letters of credit serve to cover customer requirements in connection with certain sales orders and ~~insurance.~~insurance companies. The Company is also required to provide cash collateral in connection with certain arrangements. At March 31, ~~2021,~~2022, the Company has ~~$0.3~~$0.5 million of restricted cash in support of these arrangements.

Note ~~12—~~13—Goodwill and Intangible Assets

Changes in goodwill during the three months ended March 31, ~~2021 are~~2022 were as follows:



(In thousands)	Goodwill
Balance at January 1, ~~2021~~2022	$	~~443,272~~636,858
~~Additions (Note 18)~~	~~4,708~~
Currency translation	~~(921)~~(5,037)
Balance at March 31, ~~2021~~2022	$	~~447,059~~631,821

At March 31, ~~2021, the Company had~~2022, goodwill of ~~$293.2~~$448.6 million and ~~$153.9~~$183.2 million related to the Americas and International reportable segments, respectively.

Changes in intangible assets, net of accumulated amortization, during the three months ended March 31, ~~2021, are~~2022, were as follows:



(In thousands)	Intangible Assets
Net balance at January 1, ~~2021~~2022	$	~~161,051~~306,948
~~Additions (Note 18)~~	~~5,940~~
Amortization expense	~~(3,055)~~(5,288)
Currency translation	~~298~~ (1,935)
Net balance at March 31, ~~2021~~2022	$	~~164,234~~299,725

At March 31, ~~2021,~~2022, the above intangible assets balance includes a trade name related to the Globe acquisition with an indefinite life totaling $60.0 million.

~~Note 13—Leases~~

~~Lessor Arrangements~~

The Company derives a portion of its revenue from various leasing arrangements. Such arrangements provide for monthly payments covering the equipment provided and interest. These arrangements meet the criteria to be accounted for as sales-type leases under ASC Topic 842, ~~Leases~~. Accordingly, revenue from the provision of the equipment is recognized upon lease commencement. Upon the recognition of such revenue, an asset is established for the investment in sales-type leases. Interest income is recognized monthly over the lease term. Revenue from sales-type leases recognized by the Company, included in Net sales in the unaudited Condensed Consolidated Statements of Income, was $1.0 million during the three months ended March 31, 2021. Gross profit recognized at commencement from our various leasing arrangements was $0.6 million during the three months ended March 31, 2021. There were no new sales-type lease transactions commencing and no lease revenue recognized during the three months ended March 31, 2020.

~~-17-~~-16-

Note 14—Acquisitions

Acquisition of Bacharach

On July 1, 2021, we acquired 100% of the common stock of Bacharach in an all cash transaction valued at $329.4 million, net of cash acquired.

Headquartered near Pittsburgh in New Kensington, PA, Bacharach is a leader in gas detection technologies used in the heating, ventilation, air conditioning, and refrigeration ("HVAC-R") markets. This acquisition expanded MSA’s gas detection portfolio and leverages MSA’s product and manufacturing expertise into new markets.

Bacharach's operating results are included in our unaudited condensed consolidated financial statements from the acquisition date within the Americas, International and Corporate reportable segments. The acquisition qualified as a business combination and was accounted for using the acquisition method of accounting.

The following table summarizes the preliminary fair values of the Bacharach assets acquired and liabilities assumed at the date of the acquisition:


(In millions)	July 1, 2021
Current assets (including cash of $11.7 million)	$	32.1
Property, plant and equipment and other noncurrent assets	4.7
Customer relationships	123.0
Developed technology	20.5
Trade name	15.0
Goodwill	194.5
Total assets acquired	389.8
Total liabilities assumed	(48.7)
Net assets acquired	$	341.1

The amounts in the table above are subject to change upon completion of the valuation of the assets acquired and liabilities assumed. This valuation is expected to be completed by the second quarter of 2022.

Assets acquired and liabilities assumed in connection with the acquisition were recorded at their preliminary fair values. Fair values were determined by management, based in part on an independent valuation performed by a third party valuation specialist. The valuation methods used to determine the fair value of intangible assets included the excess earnings approach for customer relationships using customer inputs and contributory charges; the relief from royalty method for trade name and developed technologies; and the cost method for assembled workforce which is included in goodwill. A number of significant assumptions and estimates were involved in the application of these valuation methods, including forecasted sales volumes and prices, royalty rates, costs to produce, tax rates, capital spending, discount rates, attrition rates and working capital changes. Cash flow forecasts were generally based on Bacharach pre-acquisition forecasts, coupled with estimated MSA sales synergies. Identifiable intangible assets with finite lives are subject to amortization over their estimated useful lives. The customer relationships, developed technology and trade name acquired in the Bacharach transaction are being amortized over periods of 21 years, 7 to 9 years and 20 years, respectively. Estimated future amortization expense related to the identifiable intangible assets is approximately $6.7 million for the remainder of 2022, $9.0 million annually for 2023 through 2026, and $109.0 million thereafter.

Goodwill was calculated as the excess of the purchase price over the fair value of net assets acquired and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Among the factors that contributed to a purchase price in excess of the fair value of the net tangible and intangible assets acquired were the acquisition of an assembled workforce, the expected synergies and other benefits that we believe will result from combining the operations of Bacharach with our operations. Goodwill of $194.5 million related to the Bacharach acquisition was recorded, with $155.6 million and $38.9 million allocated to the Americas and International reportable segments, respectively. This Goodwill is non-deductible for tax purposes.

-17-

Acquisition of Bristol Uniforms and Bell Apparel ("Bristol")

On January 25, 2021, we acquired 100% of the common stock of B T Q Limited, including Bristol. Bristol, which is headquartered in the U.K., is a leading innovator and provider of protective apparel to the fire, rescue services, and utility sectors.

The Company finalized the purchase price allocation during the first quarter of 2022. The following table summarizes the fair values of the Bristol assets acquired and liabilities assumed at the date of the acquisition:


(In millions)	January 25, 2021
Current assets (including cash of $13.3 million)	$	37.1
Net investment in sales-type leases, noncurrent	29.0
Property, plant and equipment and other noncurrent assets	12.0
Customer relationships	4.5
Trade name and other intangible assets	1.4
Goodwill	4.9
Total assets acquired	88.9
Total liabilities assumed	(12.6)
Net assets acquired	$	76.3

Note 15—Pensions and Other Post-retirement Benefits

Components of net periodic benefit cost consisted of the following:


		Pension Benefits				Other Benefits					Pension Benefits				Other Benefits
(In thousands)	(In thousands)	2021		2020		2021		2020		(In thousands)	2022		2021		2022		2021
Three Months Ended March 31,	Three Months Ended March 31,									Three Months Ended March 31,
Service cost	Service cost	$	3,242	$	3,012	$	99	$	99	Service cost	$	3,099	$	3,242	$	82	$	99
Interest cost	Interest cost	2,817		3,726		116		179		Interest cost	3,613		2,817		148		116
Expected return on plan assets	Expected return on plan assets	(9,147)		(8,503)		0		0		Expected return on plan assets	(12,418)		(9,147)		—		—
Amortization of prior service cost (credit)	Amortization of prior service cost (credit)	66		46		(90)		(98)		Amortization of prior service cost (credit)	36		66		(84)		(90)
Recognized net actuarial losses	Recognized net actuarial losses	4,421		3,935		399		286		Recognized net actuarial losses	3,018		4,421		310		399
Settlements	Settlements	(1,879)		0		0		0		Settlements	—		(1,879)		—		—
Net periodic benefit (income) cost (a)		$	(480)	$	2,216	$	524	$	466
Net periodic benefit cost (a)										Net periodic benefit cost (a)	$	(2,652)	$	(480)	$	456	$	524

(a) Components of net periodic benefit ~~(income)~~ cost other than service cost are included in the line item ~~"Other~~Other income, ~~net"~~net, and service costs are included in the line items Cost of products sold and Selling, general and administrative in the unaudited Condensed Consolidated Statements of Income.

We made contributions of $1.9 million to our pension plans during both the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. We expect to make ~~total~~net contributions of ~~approximately~~ $7.7 million to our pension plans in ~~2021~~2022, which are primarily associated with statutorily required plans in the International reporting segment.

-18-

Note ~~15—~~16—Derivative Financial Instruments

As part of our currency exchange rate risk management strategy, we ~~may~~ enter into certain derivative foreign currency forward contracts that do not meet the U.S. GAAP criteria for hedge accounting but ~~which~~ have the impact of partially offsetting certain foreign currency exposures. We account for these forward contracts at fair value and report the related gains or losses in currency exchange losses (gains) ~~losses,~~, net, in the unaudited Condensed Consolidated ~~Statement~~Statements of Income. The notional amount of open forward contracts was ~~$94.3~~$99.9 million and ~~$96.0~~$99.0 million at March 31, ~~2021,~~2022, and December 31, ~~2020,~~2021, respectively.

The following table presents the unaudited Condensed Consolidated Balance ~~Sheet~~Sheets location and fair value of assets and liabilities associated with derivative financial instruments:


(In thousands)	(In thousands)	March 31, 2021		December 31, 2020		(In thousands)	March 31, 2022		December 31, 2021
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:					Derivatives not designated as hedging instruments:
Foreign exchange contracts: Warranty reserve and other current liabilities		$	1,039	$	157
Foreign exchange contracts: Prepaid expenses and other current assets		52		160
Foreign exchange contracts: other current liabilities						Foreign exchange contracts: other current liabilities	$	242	$	128
Foreign exchange contracts: prepaid expenses and other current assets						Foreign exchange contracts: prepaid expenses and other current assets	419		619

The following table presents the unaudited Condensed Consolidated ~~Statement~~Statements of Income location and impact of derivative financial instruments:


			Loss Recognized in Income					Loss Recognized in Income
			Three Months Ended March 31,					Three Months Ended March 31,
(In thousands)	(In thousands)	Statement of Income Location	2021		2020		(In thousands)	2022		2021
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:						Derivatives not designated as hedging instruments:
Foreign exchange contracts	Foreign exchange contracts	Currency exchange (gains) losses, net	$	3,388	$	376	Foreign exchange contracts	$	2,765	$	3,388

~~-18-~~

Note ~~16—~~17—Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are:

•Level 1—Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets.

•Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

•Level 3—Unobservable inputs for the asset or liability.

The valuation methodologies we used to measure financial assets and liabilities include the derivative financial instruments described in Note ~~15—~~16—Derivative Financial Instruments. We estimate the fair value of the derivative financial instruments, consisting of foreign currency forward contracts, based upon valuation models with inputs that generally can be verified by observable market conditions and do not involve significant management judgment. Accordingly, the fair values of the derivative financial instruments are classified within Level 2 of the fair value hierarchy. With the exception of our investments in marketable securities and fixed rate long-term debt, we believe that the reported carrying amounts of our financial assets and liabilities approximate their fair values.

We value our investments in available-for-sale marketable securities, primarily fixed income, at fair value using quoted market prices for similar securities or pricing models. Accordingly, the fair values of the investments are classified within Level 2 of the fair value hierarchy. The amortized cost basis of our investments was ~~$55~~$40.0 million and ~~$75~~$49.0 million as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. The fair value was ~~$55~~$40.0 million and ~~$75~~$49.0 million as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, which was reported in ~~"Investments, short-term"~~Investments, short-term in the accompanying unaudited Condensed Consolidated Balance ~~Sheet.~~Sheets. The change in fair value is recorded in ~~other~~Other comprehensive income, net of tax. The Company does not intend to sell, nor is it more likely than not that we will be required to sell, these securities prior to recovery of their cost, as such, management believes that any unrealized gains or losses are temporary; therefore, no impairment gains or losses relating to these securities have been recognized. All investments in marketable securities have maturities of one year or less and are currently in an unrealized ~~loss~~gain position as of March 31, ~~2021.~~2022.

-19-

The reported carrying amount of our fixed rate long-term debt ~~(including the current portion)~~ was ~~$96~~$272 million and ~~$95~~$274 million at March 31, ~~2021,~~2022, and December 31, ~~2020,~~2021, respectively. The fair value of this debt was ~~$112~~$256 million and ~~$113~~$280 million at March 31, ~~2021,~~2022, and December 31, ~~2020,~~2021, respectively. The fair value of this debt was determined using Level 2 inputs by evaluating similarly rated companies with publicly traded bonds where available or current borrowing rates available for financings with similar terms and maturities.

~~Acquisitions are measured at fair value, refer to Note 18— Acquisitions for a description of the mehodologies and fair vlue measurements utilized in the business combination.~~

Note ~~17—~~18—Contingencies

Product liability

WeThe Company and its subsidiaries face an inherent business risk of exposure to product liability claims arising from the alleged failure of our products to prevent the types of personal injury or death against which they are designed to protect. Product liability claims are categorized as either single incident or cumulative trauma.

Single incident product liability claims. Single incident product liability claims involve incidents of short duration that are typically known when they occur and involve observable injuries, which provide an objective basis for quantifying damages. ~~The Company estimates its liability~~Management has established reserves for the single incident product liability claims ~~based on expected settlement costs for~~of its various subsidiaries, including, asserted single incident product liability claims and ~~an estimate of costs for single incident product liability claims~~ incurred but not reported ("IBNR")~~. The estimate~~ single incident claims. To determine the reserves, Management makes reasonable estimates of losses for ~~IBNR~~single incident claims is based on the number and characteristics of asserted claims, historical experience, sales volumes, expected settlement costs, and other relevant information. The reserve for ~~single incident product liability claims, which includes asserted single incident product liability claims and IBNR~~ single incident product liability claims was $1.5 million and $1.4 million at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. Single incident product liability expense was $0.1 million during both the three months ended March 31, ~~2021~~2022 and ~~$0.2 million during the three months ended March 31, 2020.~~2021. Single incident product liability exposures are evaluated on an annual basis, or more frequently if changing circumstances warrant. Adjustments are made to the reserve as appropriate. The reserve has not been discounted to present value and does not include future amounts which will be spent to defend the claims.

~~-19-~~

Cumulative trauma product liability claims. Cumulative trauma product liability claims involve alleged exposures to harmful substances (e.g., silica, asbestos and coal dust) that occurred years ago and may have developed over long periods of time into diseases such as silicosis, asbestosis, mesothelioma, or coal worker’s pneumoconiosis. One of the Company's affiliates, Mine Safety Appliances Company, LLC ("MSA LLC"), was named as a defendant in ~~1,632~~1,691 lawsuits comprised of ~~3,043~~4,595 claims as of March 31, ~~2021.~~2022. These lawsuits mainly involve respiratory protection products allegedly manufactured and sold by MSA LLC or its predecessors. The ~~products at issue~~product models alleged were manufactured many years ago by MSA LLC and are no longer sold.

A summary of cumulative trauma product liability lawsuits and asserted cumulative trauma product liability claims activity is as follows:


		Three Months Ended March 31, 2021	Year Ended December 31, 2020		Three Months Ended March 31, 2022	Year Ended December 31, 2021
Open lawsuits, beginning of period	Open lawsuits, beginning of period	1,622	1,605	Open lawsuits, beginning of period	1,675	1,622
New lawsuits	New lawsuits	80	402	New lawsuits	72	432
Settled and dismissed lawsuits	Settled and dismissed lawsuits	(70)	(385)	Settled and dismissed lawsuits	(56)	(379)
Open lawsuits, end of period	Open lawsuits, end of period	1,632	1,622	Open lawsuits, end of period	1,691	1,675


		Three Months Ended March 31, 2021	Year Ended December 31, 2020		Three Months Ended March 31, 2022	Year Ended December 31, 2021
Asserted claims, beginning of period	Asserted claims, beginning of period	2,878	2,456	Asserted claims, beginning of period	4,554	2,878
New claims	New claims	241	917	New claims	122	2,134
Settled and dismissed claims	Settled and dismissed claims	(76)	(495)	Settled and dismissed claims	(81)	(458)
Asserted claims, end of period	Asserted claims, end of period	3,043	2,878	Asserted claims, end of period	4,595	4,554

The increases in the number of claims in ~~2020 and in the first quarter of~~ 2021 ~~are~~were largely ~~attributable to~~driven by an increase in claims alleging injuries from exposure to coal ~~mine~~ dust, ~~involving products that were manufactured many years ago~~including claims brought by plaintiffs' counsel with which MSA LLC does not have substantial prior experience.

Subsequent to March 31, 2022, MSA LLC agreed to enter into a process to negotiate, resolve, and ~~are no longer sold.~~

~~More than half~~dismiss several hundreds of claims over the next several months. Amounts to resolve these claims have already been accrued as par of the ~~total open lawsuits at March 31, 2021, have had a de minimis level~~product liability reserve. If resolutions are reached, expected cash outlays of ~~activity~~up to $26.3 million associated with these claims are expected to be paid over the ~~last 5 years. It is possible that these cases could become active again at any time due~~next four quarters.

-20-

Management has established a reserve for MSA LLC's potential exposure to ~~changes in circumstances.~~

~~Total~~cumulative trauma product liability claims. MSA LLC's total cumulative trauma product liability reserve was ~~$216.8~~$410.8 million, ~~at March 31, 2021,~~ including ~~$3.6~~$3.5 million for claims settled but not yet paid and related defense costs, as of March 31, 2022 and ~~$221.5~~$409.8 million, ~~at December 31, 2020,~~ including ~~$7.8~~$2.5 million for claims settled but not yet paid and related defense ~~costs. This~~costs, December 31, 2021. The reserve includes estimated amounts ~~for~~related to asserted ~~claims~~ and IBNR ~~claims. Those estimated amounts reflect~~ asbestos, silica, and coal dust claims expected to be resolved through the year ~~2069 and are~~2074. The reserve has not been discounted to present value. The Company revised its estimates of MSA LLC's potential liability for cumulative trauma product liability claims for the year ended December 31, 2020 as a result of its annual review process described below. The reservevalue and does not include future amounts which will be spent to defend the ~~claims covered by the reserve.~~claims. Defense costs are recognized in the unaudited Condensed Consolidated ~~Statement~~Statements of Income as incurred. ~~There was no change in trends or other activity during the quarter that required an interim remeasurement of the cumulative trauma product liability reserve as of March 31, 2021.~~

At March 31, ~~2021, $30.9~~2022, $47.9 million of the total reserve for cumulative trauma product liability claims is recorded in the Insurance and product liability line within other current liabilities in the unaudited Condensed Consolidated Balance ~~Sheet~~Sheets and the remainder, ~~$185.9~~$362.9 million, is recorded in the Product liability and other noncurrent liabilities line. At December 31, ~~2020, $35.3~~2021, $46.7 million of the total reserve for cumulative trauma product liability claims is recorded in the Insurance and product liability line within other current liabilities in the unaudited Condensed Consolidated Balance ~~Sheet~~Sheets and the remainder, ~~$186.2~~$363.1 million, is recorded in the Product liability and other noncurrent liabilities line.

Total cumulative trauma liability losses were $2.8 million and $3.0 million for the three months ended March 31, 2022 and 2021, ~~and $2.1 million for the three months ended March 31, 2020, both~~respectively, primarily related to the defense of cumulative trauma product liability claims. Uninsured cumulative trauma product liability losses, which were included in Product liability ~~and other operating~~ expense on the unaudited Condensed Consolidated Statements of Income, were $2.8 million and ~~$1.8~~$2.8 million for the three months ended March 31, ~~2021~~2022 and ~~March 31, 2020,~~2021, respectively, and represent the total cumulative trauma liability losses net of any estimated insurance receivables as discussed below.

~~-20-~~

MSA LLC's cumulative trauma product liability reserve is based upon a reasonable estimate of MSA LLC’s current and potential future liability for cumulative trauma product liability claims, in accordance with applicable accounting principles. To develop a reasonable estimate of MSA LLC’s potential exposure to cumulative trauma product liability claims, ~~Management~~management performs an annual comprehensive review of MSA LLC’s cumulative trauma product liability claims in consultation with an outside valuation consultant and outside legal counsel. The review process takes into account MSA LLC’s historical claims experience, developments in MSA LLC’s claims experience over the past year, developments in the tort system generally, and any other relevant information. Quarterly, management and outside legal counsel review whether significant new developments have occurred which could materially impact recorded ~~amounts.~~amounts, and if warranted, management reviews changes with an outside valuation consultant. These adjustments were largely a result of newly filed claims experienced during the year and in particular, the number of newly filed coal claims, which were well in excess of historical experience. Numerous additional factors, data points, and developments were analyzed during the annual review process.

~~Certain significant assumptions underlying the material components~~The estimate of ~~the reserve~~MSA LLC’s potential liability for cumulative trauma product liability claims, ~~have been made~~and the corresponding reserve, are based onupon numerous assumptions derived from MSA ~~LLC's experience related to~~LLC’s historical experience. Those assumptions include the ~~following:~~

•~~The~~incidence of applicable diseases in the general population, the number of claims that may be asserted against MSA LLC in the future, the years in which such claims may be asserted, the counsel asserting those claims, the percentage of claims resolved through settlement, the types and severity of illnesses alleged by claimants to give rise to their ~~claims;~~

•~~The~~claims, the venues in which the claims are ~~asserted;~~

•~~The number of~~asserted, and numerous other factors, which influence how many claims ~~that~~ may be ~~asserted in the future~~brought against MSA LLC, whether those claims ultimately are resolved for payment, and ~~the counsel asserting those claims; and~~

•~~The percentage of claims resolved through settlement and the values of settlements paid to claimants.~~

~~Additional assumptions include the following:~~

•~~MSA LLC will continue to evaluate and handle cumulative trauma product liability claims in accordance with its existing defense strategy;~~

•~~The number and effect of co-defendant bankruptcies will not materially change in the future;~~

•~~No material changes in medical science occur with respect to cumulative trauma product liability claims; and~~

•~~No material changes in law occur with respect to cumulative trauma product liability claims including no material state or federal tort reform actions.~~at what values.

Cumulative trauma product liability litigation is inherently unpredictable and MSA LLC's expense with respect to cumulative trauma product liability claims could vary significantly in future periods. ~~With respect~~It is difficult to reasonably estimate how many claims will be newly asserted against MSA LLC in any given period or over the lifetime of MSA LLC's claims ~~this~~experience. Case solicitation and filing activity, in our experience, is ~~because~~unique to each plaintiffs’ counsel and also influenced by external factors. Once asserted it is unclear at the time of filing whether a claim will be actively ~~litigated.~~litigated, or the extent of ultimate loss, if any, in the absence of discovery at initial case stages. Even when a case is actively litigated, it is often difficult to determine if the lawsuit will be dismissed without payment or settled, because of sufficiency of product identification, statute of limitations challenges, or other defenses. This difficulty is increased when claims are asserted by plaintiffs’ counsel with which MSA LLC does not have substantial prior experience, as claims experience can vary significantly among different plaintiffs' counsel. As a result of all of these factors, it is typically unclear until late into ~~a lawsuit whether~~litigation the extent of loss that will be experienced on account of any particular claim, ~~will result in a loss and, if so, to what extent.~~or inventories of claims. Actual loss amounts for settled claims are highly variable and turn on a case-by-case analysis of the relevant facts. As more information is learned about asserted claims and potential future trends, adjustments may be made to the cumulative trauma product liability reserve as appropriate.

~~With respect to asserted or IBNR claims, MSA LLC’s expense in future periods may vary from the reserve currently established for several reasons. In particular,~~

-21-

As a result of such uncertainties, MSA LLC’s actual claims experience may differ in one or more respects from the ~~significant~~ assumptions ~~listed above that were~~ used by in establishing the ~~reserve. Factors that make MSA LLC's asserted~~reserve, and IBNR claims difficult to reasonably estimate include uncertainty as to the number of claims that may be asserted in the future (and over what time periods), the wide variability in the alleged severity of claims asserted, and the number of claims that ultimately will be resolved with payment. This difficulty is increased when claims are asserted by plaintiff's counsel, with which MSA LLC does not have substantial prior experience (as claims experience can vary significantly among different counsel), the absence of discovery into many pending claims, the historically low volume of claims asserted and resolved, and numerous other factors. Numerous uncertainties also exist with respect to factors not specific to MSA LLC, including potential legislative or judicial changes at the federal level or in key states concerning claims adjudication, future bankruptcy proceedings involving key co-defendants, payments from trusts established to compensate claimants, and/or changes in medical science relating to the diagnosis and treatment of claims.

Because cumulative trauma product liability litigation is subject to the significant modeling assumptions and inherent uncertainties described above, and unfavorable developments or rulings could occur, there can be no ~~certainty~~assurance that the actuarial models employed will accurately predict future experience. MSA LLC’s experience in future periods may vary from the reserve currently established, and MSA LLC may ~~not~~ ultimately incur ~~charges~~losses in excess of presently recorded liabilities. ~~The reserve for cumulative trauma product liability claims may be adjusted from time to time based on changes to the factors and assumptions described above. If future estimates~~Any adjustments as a result of cumulative trauma product liability claims are materially different than the accrued liability, we will record an appropriate adjustment to the unaudited Condensed Consolidated Statement of Income. These adjustmentsthis experience could materially impact our consolidated financial statements in future periods.

~~-21-~~

Insurance Receivable and Notes Receivable, Insurance Companies

Many years ago, MSA LLC purchased insurance policies from various insurance carriers that, subject to common contract exclusions, provided coverage for cumulative trauma product liability losses (the "Occurrence-Based Policies"). While we continue to pursue reimbursement under certain remaining Occurrence-Based Policies, the vast majority of these policies have been exhausted, settled or converted into either (1) negotiated settlement agreements with scheduled payment streams (recorded as notes receivables), or (2) negotiated Coverage-in-Place Agreements (recorded as insurance receivables). As a result, MSA LLC is largely self-insured for cumulative trauma product liability claims, and additional amounts recorded as insurance receivables or notes receivables will be limited.

When adjustments are made to amounts recorded in the cumulative trauma product liability reserve, we calculate amounts due to be reimbursed pursuant to the terms of the negotiated Coverage-In-Place Agreements, including cumulative trauma product liability losses and related defense costs, and we record the amounts probable of reimbursement as insurance receivables. These amounts are not subject to current coverage litigation.

Insurance receivables at March 31, ~~2021,~~2022 totaled ~~$95.6~~$126.4 million of which, ~~$12.0~~$8.6 million is reported in Prepaid expenses and other current assets in the unaudited Condensed Consolidated Balance ~~Sheet~~Sheets and ~~$83.6~~$117.8 million is reported in Insurance receivable and other noncurrent assets. Insurance receivables at December 31, ~~2020,~~2021 totaled ~~$97.0~~$130.2 million, of which ~~$12.0~~$8.6 million was reported in Prepaid expenses and other current assets in the unaudited Condensed Consolidated Balance ~~Sheet~~Sheets and ~~$85.0~~$121.6 million was reported in Insurance receivable and other noncurrent assets. The vast majority of the ~~$95.6~~$126.4 million insurance receivables balance at March 31, ~~2021~~2022 is attributable to reimbursement believed to be due under the terms of signed Coverage-In-Place Agreements and a portion of this amount represents the estimated recovery of IBNR amounts not yet incurred.

A summary of insurance receivables balance and activity related to cumulative trauma product liability losses is as follows:


(In millions)	(In millions)	Three Months Ended March 31, 2021		Year Ended December 31, 2020		(In millions)	Three Months Ended March 31, 2022		Year Ended December 31, 2021
Balance beginning of period	Balance beginning of period	$	97.0	$	63.8	Balance beginning of period	$	130.2	$	97.0
Additions	Additions	0.4		39.0		Additions	0.1		43.5
Collections and other adjustments	Collections and other adjustments	(1.8)		(5.8)		Collections and other adjustments	(3.9)		(10.3)
Balance end of period	Balance end of period	$	95.6	$	97.0	Balance end of period	$	126.4	$	130.2

We record formal notes receivable due from scheduled payment streams according to negotiated settlement agreements with insurers. These amounts are not subject to current coverage litigation.

Notes receivable from insurance companies at March 31, ~~2021,~~2022, totaled ~~$52.7~~$48.8 million, of which $3.9 million is reported in Notes receivable, insurance companies, current onin the unaudited Condensed Consolidated Balance ~~Sheet~~Sheets and ~~$48.8~~$44.9 million is reported in Notes receivable, insurance companies, noncurrent. Notes receivable from insurance companies at December 31, ~~2020,~~2021 totaled ~~$52.3~~$48.5 million of which ~~$3.8~~$3.9 million was reported in Notes receivable, insurance companies, current onin the unaudited Condensed Consolidated Balance ~~Sheet~~Sheets and ~~$48.5~~$44.6 million was reported in Notes receivable, insurance companies, noncurrent.

-22-

A summary of notes receivables from insurance companies balance is as follows:

(In millions) Three Months Ended March 31, 2021 Year Ended December 31, 2020
Balance beginning of period $ 52.3 $ 56.0
Additions 0.4 1.4
Collections 0 (5.1)
Balance end of period $ 52.7 $ 52.3

~~-22-~~


(In millions)	Three Months Ended March 31, 2022		Year Ended December 31, 2021
Balance beginning of period	$	48.5	$	52.3
Additions	0.3		1.3
Collections	—		(5.1)
Balance end of period	$	48.8	$	48.5

The vast majority of the insurance receivables balance at March 31, ~~2021,~~2022, is attributable to reimbursement under the terms of signed agreements with insurers and ~~are~~is not currently subject to litigation. The collectibility of MSA LLC's insurance receivables and notes receivables is regularly evaluated and we believe that the amounts recorded are probable of collection. The determination that the recorded insurance receivables are probable of collection is based on the terms of the settlement agreements reached with the insurers, our history of collection, and the advice of MSA LLC's outside legal counsel and consultants. Various factors could affect the timing and amount of recovery of the insurance and notes receivables, including assumptions regarding various aspects of the composition and characteristics of future claims (which are relevant to calculating reimbursement under the terms of certain Coverage-In-Place Agreements) and the extent to which the issuing insurers may become insolvent in the future.

Other Litigation

Two subsidiaries of the Company, Globe Manufacturing Company, LLC ("Globe") and MSA LLC, are defending a small number of lawsuits in which plaintiffs assert that certain of those entities’ products allegedly containing per- and polyfluoroalkyl substances (“PFAS”) have caused injury, health issues, or environmental issues. PFAS are a large class of substances that are widely used in everyday products. Specifically, Globe builds turnout gear from technical fabrics sourced from a small pool of specialty textile manufacturers. These protective fabrics have been tested and certified to meet industry standards, and some of them contain PFAS to achieve water, oil, or chemical resistance. At this time, no manufacturer of firefighter protective clothing is able to meet current National Fire Protection Association safety standards while offering coats or pants that are completely PFAS free.

Globe and MSA LLC believe they have valid defenses to these lawsuits. These matters are at a very early stage with numerous factual and legal issues to be resolved. Defense costs relating to these lawsuits are recognized in the unaudited Condensed Consolidated Statements of Income as incurred. Globe and MSA LLC are also pursuing insurance coverage and indemnification related to the lawsuits.

Product Warranty

The Company provides warranties on certain product sales. Product warranty reserves are established in the same period that revenue from the sale of the related products is recognized, or in the period that a specific issue arises as to the functionality of the Company's product. The determination of such reserves requires the Company to make estimates of product return rates and expected costs to repair or to replace the products under warranty.

The amounts of the reserves are based on established terms and the Company's best estimate of the amounts necessary to settle future and existing claims on products sold as of the balance sheet date. If actual return rates and/or repair and replacement costs differ significantly from estimates, adjustments to recognize additional cost of sales may be required in future periods.

-23-

The following table reconciles the changes in the Company's accrued warranty reserve:


(In thousands)	(In thousands)	Three Months Ended March 31, 2021		Year Ended December 31, 2020		(In thousands)	Three Months Ended March 31, 2022		Year Ended December 31, 2021
Beginning warranty reserve	Beginning warranty reserve	$	11,428	$	12,715	Beginning warranty reserve	$	12,423	$	11,428
Warranty payments	Warranty payments	(2,277)		(10,861)		Warranty payments	(2,051)		(8,987)
Warranty claims	Warranty claims	2,221		10,233		Warranty claims	2,160		10,225
Provision for product warranties and other adjustments	Provision for product warranties and other adjustments	56		(659)		Provision for product warranties and other adjustments	(292)		(243)
Ending warranty reserve	Ending warranty reserve	$	11,428	$	11,428	Ending warranty reserve	$	12,240	$	12,423

Warranty expense was ~~$2.3~~$1.9 million and ~~$2.9~~$2.3 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, and is included in ~~"Costs~~Costs of products ~~sold"~~sold on the unaudited Condensed Consolidated Statements of Income.

~~Note 18—Acquisitions~~

~~Acquisition of Bristol Uniforms and Bell Apparel~~

Bristol, which is headquartered in the United Kingdom (U.K.), is a leading innovator and provider of protective apparel to the fire, rescue services, and utility sectors. The acquisition strengthens MSA's position as a global market leader in fire service personal protective equipment (PPE) products, which include breathing apparatus, firefighter helmets, thermal imaging cameras, and firefighter protective apparel, while providing an avenue to expand its business in the U.K. and key European markets. The fire service equipment brands of MSA, which include Gallet Firefighter Helmets, the M1 and G1 Self-Contained Breathing Apparatus range, Cairns Helmets, Globe Manufacturing, and now Bristol Uniforms, represent more than 460 combined years of innovation in the fire service industry, with a common mission: protecting the health and safety of firefighters. Bristol is also a leading manufacturer of flame-retardant, waterproof, and other protective work wear for the utility industry. Marketed under the Bell Apparel brand, this line complements MSA's existing and broad range of offerings for the global utilities market.

Bristol's operating results are included in our unaudited condensed consolidated financial statements from the acquisition date as part of the International reportable segment. The acquisition qualifies as a business combination and will be accounted for using the acquisition method of accounting.

~~-23-~~

~~The following table summarizes the fair values of the Bristol assets acquired and liabilities assumed at the date of the acquisition:~~


~~(In millions)~~	~~January 25, 2021~~
~~Current assets (including cash of $13.3 million)~~	$	~~37.1~~
~~Net investment in sales-type leases, noncurrent~~	~~29.0~~
~~Property, plant and equipment and other noncurrent assets~~	~~11.9~~
~~Customer relationships~~	~~4.5~~
~~Trade name and other intangible assets~~	~~1.4~~
~~Goodwill~~	~~4.7~~
~~Total assets acquired~~	~~88.6~~
~~Total liabilities assumed~~	~~(12.3)~~
~~Net assets acquired~~	$	~~76.3~~

Assets acquired and liabilities assumed in connection with the acquisition have been recorded at their fair values. Fair values were determined by management, based in part on an independent valuation performed by a third party valuation specialist. The valuation methods used to determine the fair value of intangible assets included the excess earnings approach for customer relationships using customer inputs and contributory charges; the relief from royalty method for trade name; and the cost method for assembled workforce which is included in goodwill. A number of significant assumptions and estimates were involved in the application of these valuation methods, including sales volume and prices, royalty rates, costs to produce, tax rates, capital spending, discount rates, attrition rates and working capital changes. Cash flow forecasts were generally based on Bristol pre-acquisition forecasts, coupled with estimated MSA sales synergies. Identifiable intangible assets with finite lives are subject to amortization over their estimated useful lives. The customer relationships and trade name acquired in the Bristol transaction will be amortized over a period of 15 years. Estimated future amortization expense related to the identifiable intangible assets is approximately $0.3 million for the remainder of 2021, $0.5 million in 2022 and 2023, $0.4 million in 2024 and 2025, and $3.8 million thereafter. The step up to fair value of acquired inventory as part of the purchase price allocation totaled $1.5 million which will be amortized over four months, which is included in Cost of products sold in the unaudited condensed consolidated statement of income.

Goodwill is calculated as the excess of the purchase price over the fair value of net assets acquired and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Among the factors that contributed to a purchase price in excess of the fair value of the net tangible and intangible assets acquired were the acquisition of an assembled workforce, the expected synergies and other benefits that we believe will result from combining the operations of Bristol with our operations. Goodwill of $4.7 million related to the Bristol acquisition has been recorded in the International reportable segment and is non-deductible for tax purposes.

Our results for the three months ended March 31, 2021, include acquisition related costs of approximately $1.4 million, including costs related to the acquisition of Bristol. Our results for the three months ended March 31, 2020, include an immaterial amount of acquisition related costs. These costs are reported in selling, general, and administrative expenses and costs of products sold.

The operating results of the Bristol acquisition have been included in our unaudited condensed consolidated financial statements from the acquisition date through March 31, 2021. Our results for the three months ended March 31, 2021, include Bristol sales and net loss of $4.2 million and $1.4 million, respectively.

-24-

The following unaudited pro forma information presents our combined results as if the Bristol acquisition had occurred on January 1, 2020. The unaudited pro forma financial information was prepared to give effect to events that are (1) directly attributable to the acquisition; (2) factually supportable; and (3) expected to have a continuing impact on the combined company's results. There were no material transactions between MSA and Bristol during the periods presented that are required to be eliminated in the unaudited pro forma condensed combined financial information. The unaudited pro forma condensed combined financial information does not reflect any cost savings, operating synergies, or revenue enhancements that the combined companies may achieve as a result of the acquisition or the costs to integrate the operations or the costs necessary to achieve cost savings, operating synergies, or revenue enhancements.

~~Pro forma condensed combined financial information (Unaudited)~~

Three months ended March 31,
(In millions, except per share amounts) 2021 2020
Net sales $ 310.4 $ 364.3
Net income 36.6 46.7
Basic earnings per share 0.94 1.20
Diluted earnings per share 0.93 1.19

The unaudited pro forma condensed combined financial information is presented for information purposes only and is not intended to represent or be indicative of the combined results of operations or financial position that we would have reported had the acquisition been completed as of the date and for the periods presented, and should not be taken as representative of our condensed consolidated results of operations or financial condition following the acquisition. In addition, the unaudited pro forma condensed combined financial information is not intended to project the future financial position or result of operations of the combined company.

~~The unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting under existing U.S. GAAP. MSA has been treated as the acquirer.~~

~~-25-~~


Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the historical financial statements and other financial information included elsewhere in this quarterly report on Form 10-Q. This discussion may contain forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in the sections of our annual report entitled “Forward-Looking Statements” and “Risk Factors,” and those discussed in our Form 10-Q quarterly reports filed after such annual report (such as in Part II, Item 1A, “Risk Factors.”)

BUSINESS OVERVIEW

MSA is a global leader in the development, manufacture and supply of safety products that protect people and facility infrastructures. Recognized for their market leading innovation, many MSA products integrate a combination of electronics, mechanical systems and advanced materials to protect users against hazardous or life-threatening situations. The Company's comprehensive product line, which is governed by rigorous safety standards across highly regulated industries, is used by workers around the world in a broad range of markets, including fire service, oil, gas and petrochemical industry, construction, industrial manufacturing applications, utilities, mining and the military. MSA's core products include breathing apparatus, fixed gas and flame detection systems, portable gas detection instruments, industrial head protection products, firefighter helmets and protective apparel, and fall protection devices. We are committed to providing our customers with service unmatched in the safety industry and, in the process, enhancing our ability to provide a growing line of safety solutions for customers in key global markets.

On January 25, 2021, we acquired 100% of the common stock of B T Q Limited, including Bristol Uniforms and Bell Apparel ("Bristol") in an all-cash transaction valued at $63.0 million, net of cash acquired. Bristol, which is headquartered in the United Kingdom (U.K.), is a leading innovator and provider of protective apparel to the fire, rescue services, and utility sectors. The acquisition strengthens MSA's position as a global market leader in fire service personal protective equipment (PPE) products, which include breathing apparatus, firefighter helmets, thermal imaging cameras, and firefighter protective apparel, while providing an avenue to expand its business in the U.K. and key European markets. The fire service equipment brands of MSA, which include Gallet Firefighter Helmets, the M1 and G1 Self-Contained Breathing Apparatus range, Cairns Helmets, Globe Manufacturing, and now Bristol Uniforms, represent more than 460 combined years of innovation in the fire service industry, with a common mission: protecting the health and safety of firefighters. Bristol is also a leading manufacturer of flame-retardant, waterproof, and other protective work wear for the utility industry. Marketed under the Bell Apparel brand, this line complements MSA's existing and broad range of offerings for the global utilities market. Refer to Note - 18 Acquisitions to the unaudited condensed consolidated financial statements in Part I Item 1 of this Form 10-Q for further information.

~~MSA provides safety equipment to a broad range of customers who must continue to work in times of global pandemic as is now the case with COVID-19.~~ Our customers include first responders, who are tasked with keeping citizens safe, and include industrial and utility workers tasked with maintaining critical infrastructure. For this reason, in order to successfully fulfill our mission as The Safety Company, MSA is an essential business and has continued operating its manufacturing facilities during these times, to the extent practicable, while protecting the health and safety of our workforce, and complying with all applicable ~~laws. In January 2020, the Company~~laws, all pursuant to an established ~~a special advisory committee to evaluate ongoing concerns, risks and challenges with respect to COVID-19 across its operations and corporate headquarters. The Company‘s~~ pandemic response plan includes four key priorities: protecting the health and safety of MSA associates, enabling business continuity, expanding manufacturing capacity of MSA’s existing air-purifying respirator portfolio, and managing its operating expenses and capital structure.

plan. The Company has developed a thoughtful, phased approach to begin reconnecting segments of our workforce that had converted to remote working conditions due to COVID-19. This process includes returning elements of our salesforce to in-person customer interactions on a limited basis, with additional employees scheduled to begin returning to the office, once deemed appropriate under the circumstances for each business location. A phased approach to reconnect employees while adjusting the characteristics of their physical working environments, providing training and executing enhanced safety and cleaning protocols, will promote workspace safety in a manner consistent with the mission and values of MSA. The process and timing to reconnect our workforce willCompany’s return-to-work plans continue to evolve ~~due to~~as needed, such as when the ~~changing nature of COVID-19. The Company expects to modify plans as necessary to respond to such changes.~~

~~-26-~~

Omicron variant emerged.

We tailor our product offerings and distribution strategy to satisfy distinct customer preferences that vary across geographic regions. To best serve these customer preferences, we have organized our business into four geographical operating segments that are aggregated into three reportable geographic segments: Americas, International and Corporate.

~~Americas~~Americas.. Our largest manufacturing and research and development facilities are located in the ~~United States (U.S.).~~U.S. We serve our markets across the Americas with manufacturing facilities in the U.S., Mexico and Brazil. Operations in the other countries within the Americas segment focus primarily on sales and distribution in their respective home country markets.

~~International~~International.. Our International segment includes companies in Europe, the Middle East and Africa ("EMEA") and the Asia Pacific region. In our largest International subsidiaries (in Germany, France, ~~United Kingdom (U.K.)~~U.K., Ireland and China), we develop, manufacture and sell a wide variety of products. In China, the products manufactured are sold primarily in China as well as in regional markets. Operations in other International segment countries focus primarily on sales and distribution in their respective home country markets. Although some of these companies may perform limited production, most of their sales are of products manufactured in our plants in Germany, France, the U.S., U.K., Ireland and China or are purchased from third-party vendors.

~~Corporate~~Corporate.. The Corporate segment primarily consists of general and administrative expenses incurred in our corporate headquarters, costs associated with corporate development initiatives, legal expense, interest expense, foreign exchange gains or losses and other centrally-managed costs. Corporate general and administrative costs comprise the majority of the expense in the Corporate segment.

Within the International segment, during the first quarter, due to military conflict in Ukraine, we suspended product shipments into Russia and Belarus.The suspension is indefinite.Customers in Russia, Belarus and Ukraine generated approximately $6 million of sales during the year endedDecember 31, 2021.

During the fourth quarter of 2021, the Company changed its method of accounting for certain inventory in the U.S. from the LIFO method to the FIFO method. The FIFO method of accounting for inventory is preferable because it conforms the Company's entire inventory to a single method of accounting and improves comparability with the Company's peers. The effects of the change in accounting method from LIFO to FIFO have been retrospectively applied to all periods presented in all sections of this Quarterly Report, including Management's Discussion and Analysis. Refer to Note 4—Inventory of the

-25-

consolidated financial statements in Part II Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2021, for further information related to the change in accounting principle.

PRINCIPAL PRODUCTS

The following is a brief description of each of our principal product categories:

MSA's corporate strategy includes a focus on driving sales of core products where we have leading market positions and a distinct competitive advantage. Core products, as mentioned above, include breathing apparatus in which SCBA is the principal product, fixed gas and flame detection systems, portable gas detection instruments, industrial head protection products, firefighter helmets and protective apparel, and fall protection devices. Core products comprised approximately ~~88%~~91% and ~~85%~~88% of sales for the three months ended March 31, 2022 and 2021, ~~and 2020.~~respectively. MSA also maintains a portfolio of non-core products. Non-core products reinforce and extend the core offerings, drawing upon our customer relationships, distribution channels, geographical presence and technical experience. These products are complementary to the core offerings and often reflect more episodic or contract-driven growth patterns.Key non-core products include air-purifying respirators ("APR"), eye and face protection, ballistic helmets and gas masks.

MSA does not produce disposable respirators of any type; however, Mine Safety Appliances Company, LLC ("MSA LLC"), one of the Company's subsidiaries, does produce advanced elastomeric APR, including half-mask respirators, full-facepiece respirators and powered air purifying respirators, each with replaceable filters providing a minimum of N-95 filtration capability. These products have historically been used in many industrial and first responder applications. APR products represented 6% and 8% of our consolidated sales for the three months ended March 31, 2021 and 2020, with over 74% and 70% of this business being in our Americas segment for the three months ended March 31, 2021 and 2020. During 2020, Emergency Use Authorizations ("EUA") were issued by the FDA to expand the types of respiratory protection available to the medical community in response to COVID-19. Those include an EUA that continues to temporarily permit the use of NIOSH-approved respirators in healthcare settings, including elastomeric APR that are part of MSA's existing portfolio.

MSA maintains a diversified portfolio of safety products that protect workers and facility infrastructure across a broad array of end markets. While the company sells its products through distribution, which can limit end-user visibility, the Company provides estimated ranges of end market exposure to facilitate understanding of its growth drivers. The Company estimates that approximately 35%-40% of its overall revenue is derived from the fire service market and 25%-30% of its revenue is derived from the energy market. The remaining 30%-40% is split ~~between~~among construction, utilities, general industrial applications, military and mining.

A detailed listing of our significant product offerings in the aforementioned product groups above is included in MSA's Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

~~-27-~~-26-

RESULTS OF OPERATIONS

Three Months Ended March 31, ~~2021,~~2022, Compared to Three Months Ended March 31, ~~2020~~2021

Net Sales. Net sales for the three months ended March 31, ~~2021,~~2022, were ~~$308.4~~$330.7 million, ~~a decrease~~an increase of ~~$32.7~~$22.3 million, or ~~9.6%~~7.2%, driven by ~~lower sales across most of the core product groups~~acquisitions and growth in organic activity compared to ~~$341.1~~$308.4 million for the three months ended March 31, ~~2020.~~2021. We saw healthy growth across our core products and across both reporting segments. Please refer to the Net Sales table for a reconciliation of the quarter over quarter sales change.


Net Sales	Net Sales	Three Months Ended March 31,		Dollar Decrease	Percent Decrease	Net Sales	Three Months Ended March 31,		Dollar Increase	Percent Increase
(In millions)	(In millions)	2021	2020			(In millions)	2022	2021
Consolidated	Consolidated	$308.4	$341.1	$(32.7)	(9.6)%	Consolidated	$330.7	$308.4	$22.3	7.2%
Americas	Americas	208.3	231.2	(22.9)	(9.9)%	Americas	225.7	208.3	17.4	8.4%
International	International	100.1	109.9	(9.8)	(8.9)%	International	105.0	100.1	4.9	4.9%


Net Sales	Net Sales	Three Months Ended March 31, 2021 versus March 31, 2020			Net Sales	Three Months Ended March 31, 2022 versus March 31, 2021
(Percent Change)	(Percent Change)	Americas	International	Consolidated	(Percent Change)	Americas	International	Consolidated
GAAP reported sales change	GAAP reported sales change	(9.9)%	(8.9)%	(9.6)%	GAAP reported sales change	8.4%	4.9%	7.2%
Currency translation effects	Currency translation effects	0.6%	(6.7)%	(1.7)%	Currency translation effects	0.6%	5.0%	2.1%
Constant currency sales change	Constant currency sales change	(9.3)%	(15.6)%	(11.3)%	Constant currency sales change	9.0%	9.9%	9.3%

Less: Acquisitions(a)					Less: Acquisitions(a)	(5.9)%	(4.5)%	(5.5)%
Organic constant currency change					Organic constant currency change	3.1%	5.4%	3.8%

(a) - Includes Bacharach, Inc. and its affiliated companies ("Bacharach"), which was acquired on July 1, 2021.

Note: ~~Constant~~Organic constant currency sales change is a non-GAAP financial measure provided by the Company to give a better understanding of the Company's underlying business performance. ~~Constant~~Organic constant currency sales change is calculated by deducting the percentage impact from acquisitions and currency translation effects from the overall percentage change in net sales.

Net sales for the Americas segment were $225.7 million in the first quarter of 2022, an increase of $17.4 million, or 8.4%, compared to $208.3 million in the first quarter of ~~2021, a decrease of $22.9 million, or 9.9%, compared to $231.2 million in the first quarter of 2020. During the quarter, constant~~2021. Constant currency sales in the Americas segment ~~decreased 9.3%~~increased 9.0% compared to the prior year ~~period. After a weak January and February, order pace and invoicing strengthened in March.~~period with organic constant currency growth of 3.1%. The ~~quarterly revenue decline~~inclusion of Bacharach drove the acquisition related sales. Organic growth was was driven by ~~economic challenges as well as a difficult comparison from a year ago, which reflected a pre-pandemic environment~~growth across core products, partially offset by lower demand for ~~MSA. Areas that were particularly impacted include industrial PPE~~APR products. Supply chain and ~~FGFD. Additionally, demand levels~~labor constraints weighed most heavily on revenue growth in ~~the APR business moderated~~gas detection and ~~returned to pre-pandemic levels. Americas segment business conditions~~firefighter helmets and ~~order activity improved in March and into April and that provides a sense of optimism to start the second quarter.~~protective apparel.

Net sales for the International segment were ~~$100.1~~$105.0 million in the first quarter of ~~2021, a decrease~~2022, an increase of ~~$9.8~~$4.9 million, or ~~8.9%~~4.9%, compared to ~~$109.9~~$100.1 million for the first quarter of ~~2020.~~2021. Constant currency sales in the International segment ~~decreased 15.6%~~increased 9.9% during the quarter ~~on weaker revenues across~~with organic constant currency growth of 5.4%. The inclusion of Bacharach drove the ~~segment, with more significant declines in the EMEA operating segment due to COVID-19 lockdowns in Europe and lower~~acquisition related sales. Organic growth was driven by large project business in ~~the Middle East~~ FGFD, ~~market. This weakness was~~ partially offset by ~~improving conditions~~weakness in ~~China~~portable gas detection and fall protection. Supply chain and labor constraints weighed most heavily on revenue growth in gas detection and SCBA.

Order activity continued to show year-over-year improvements and increased 22% compared to the ~~acquisition~~first quarter of ~~Bristol.~~

~~Our~~2021. Organic growth in orders was 16% while acquisitions drove 6% growth. We continued to see strong order ~~book improved~~growth in ~~March and into April across a number of areas in our business.~~April. Our backlog ~~is healthy~~increased to ~~start the second quarter.~~ record levels as a result of an uptick in order pace and ongoing supply chain constraints, most notably in electronic components and labor at select locations.

Looking ahead, we continue to operate in a very dynamic environment. There are a number of other evolving factors that will continue to influence our revenue and earnings outlook. These factors include, among other things, supply chain constraints, raw material availability, the ~~effectiveness of the vaccine rollout,~~ risk of additional COVID lockdowns, industrial employment rates, military conflict and geopolitical risk and the pace of economic ~~recovery~~recovery. While we expect sequential improvement in revenue and ~~the supply chain challenges as economies open up. While the outcome is hard to predict, our recent order pace provides a sense of optimism to start~~earnings in the second ~~quarter.~~

quarter of 2022, these conditions could impact our future results and growth expectations.

Refer to Note 7—8—Segment Information to the unaudited condensed consolidated financial statements in Part I Item 1 of this Form 10-Q, for information regarding sales by product group.

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Gross profit. Gross profit for the first quarter of ~~2021~~2022 was ~~$134.7~~$142.8 million, ~~a decrease~~an increase of ~~$22.7~~$8.0 million or ~~14.4%~~5.9%, compared to ~~$157.4~~$134.8 million for the first quarter of ~~2020.~~2021. The ratio of gross profit to net sales was ~~43.7%~~43.2% in the first quarter of ~~2021~~2022 compared to ~~46.1%~~43.7% in the same quarter last year. ~~The lower~~Intangible asset amortization related to acquisitions reduced gross profit ~~ratio during~~by $2.3 million or 70 basis points in 2022. Strategic pricing and lower inventory charges associated with APR products helped to mitigate the ~~current quarter is primarily attributable to a couple of primary drivers. Lower throughput in our factories drove inefficiencies~~higher material costs and ~~inventory charges. Inventory charges were primarily due to lower levels of demand for respiratory protection. The remaining items that impacted gross profit were~~ a less favorable product ~~mix and higher input costs.~~ mix.

We have ~~made adjustments~~implemented price increases in response to ~~certain pricing actions~~the inflation we are seeing in electronic components, resins and other inputs. While there could be a number of scenarios on the length of time that these challenges may persist, we could see these impact our business for the foreseeable future with more meaningful impact over the coming quarters. We will continue to evaluate additional pricing opportunities as we continue to navigate ~~the supply chain~~ inflationary pressures. The Bristol acquisition also negatively impacted mix because gross margins for turnout gear are lower than the corporate average. We expect to improve Bristol margins as we execute our integration plans.

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Selling, general and administrative ~~expenses~~.expenses. Selling, general and administrative ("SG&A") expenses were ~~$75.5~~$78.6 million during the first quarter of ~~2021, a decrease~~2022, an increase of ~~$4.7~~$3.1 million or ~~5.9%, compared to $80.2 million in the first quarter of 2020. SG&A costs declined despite $1.8 million of additional SG&A expenses related to the Bristol acquisition.~~4.1% from a year ago. Overall, selling, general and administrative expenses were ~~24.5%~~23.8% of net sales during the first quarter of ~~2021,~~2022, compared to ~~23.5%~~24.5% of net sales during the same period in ~~2020. We delivered $7.0~~2021. Organic constant currency SG&A increased $1 million or 1.4% demonstrating strong leverage on revenue growth.

Please refer to ~~$8.0 million of savings from restructuring programs~~the Selling, general and discretionary cost savings associated with reduced travel, controlled hiring, professional services and other costs. Approximately half of these savings are temporary and will return to some extent slowly as the business improves and travel resumes, while half are structural in nature. We expect the year over year SG&A comparison to become more difficult as the second quarter of 2020 reflected the initial cost reduction activities that occurred at the onsetadministrative expenses table for a reconciliation of the ~~pandemic.~~quarter over quarter expense change.


Selling, general, and administrative expenses			Three Months Ended March 31, 2022 versus March 31, 2021
(Percent Change)			Consolidated
GAAP reported change			4.1%
Currency translation effects			1.6%
Constant currency change			5.7%
Less: Acquisitions and related strategic transaction costs			(4.3)%
Organic constant currency change			1.4%

Research and development expense. Research and development expense was $13.3 million during the first quarter of 2022, an increase of $0.1 million, compared to $13.2 million during the first quarter of ~~2021, a decrease of $0.9 million, compared to $14.1 million during the first quarter of 2020.~~2021. Research and development expense was ~~4.3%~~4.0% of net sales in the first quarter of ~~2021~~2022 compared to ~~4.1%~~4.3% in the same period of ~~2020.~~2021. We continue to develop new products for global safety markets, including the ~~recently launched connected firefighter ecosystem powered by LUNAR.~~Altair io 4 and V-Gard C1. During the first quarter of ~~2021,~~2022, we capitalized ~~$2.0~~$2.2 million of software development costs.

Restructuring charges. Restructuring charges during the first quarter of ~~2021,~~2022, were $2.2 million primarily related to activities to improve the efficiency of our business model. This compared to restructuring charges of $1.3 million during the first quarter of 2021, primarily related to our ongoing initiatives to drive profitable growth and right size our operations. Together with cost reduction programs executed throughout 2020, we expect these programs to collectively deliver $15 million of savings throughout the income statement in 2021, and annual savings of $20 million thereafter. This compared to restructuring charges of $2.0 million during the first quarter of 2020, primarily related to footprint rationalization and other restructuring programs associated with our ongoing initiatives to drive profitable growth in our International segment. We remain focused on executing programs ~~that will~~to optimize our cost structure.

Currency exchange. Currency exchange losses were $3.3 million in the first quarter of 2022 compared to gains ~~were~~of $2.1 million in the first quarter of ~~2021 compared to losses of $0.3 million in the first quarter of 2020.~~2021. Currency exchange in both periods were related to foreign currency exposure on unsettled inter-company ~~balances.~~balances, relating to the euro and British pound.

Refer to Note ~~15—~~16—Derivative Financial Instruments to the unaudited condensed consolidated financial statements in Part I Item 1 of this Form 10-Q, for information regarding our currency exchange rate risk management strategy.

Product liability expense. Product liability expense for both the three months ended March 31, 2022 and 2021 was $2.8 ~~million compared to $2.0 million in the same period last year.~~million. Product liability expense for both periods related primarily to defense costs incurred for cumulative trauma product liability claims.

GAAP operating income. Consolidated operating income for the first quarter of ~~2021~~2022 was ~~$44.0~~$42.7 million compared to ~~$58.8~~$44.1 million in the same period last year. The decrease in operating ~~results~~income was primarily driven by ~~lower sales volumes~~higher currency exchange losses relating to the euro and ~~lower gross profit for the reasons noted above~~British pound, partially offset by ~~lower SG&A expenses.~~an increase in sales associated with acquisitions and organic business activity.

Adjusted operating income. Americas adjusted operating income for the first quarter of ~~2021~~2022 was $52.4 million, an increase of $7.2 million or 16% compared to $45.2 million ~~a decrease of $14.6 million, or 25%, compared to $59.8 million in~~from the prior year quarter. The ~~decrease was related~~increase in adjusted operating income is primarily attributable to ~~the lower level of~~higher sales volumes driven by both acquisitions and ~~lower gross profit for reasons noted above,~~organic business activity, partially offset by ~~lower~~higher SG~~&A expenses.~~&A.

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International adjusted operating income for the first quarter of ~~2021~~2022 was ~~$8.8~~$9.0 million, ~~a decrease~~an increase of ~~$3.9~~$0.2 million, or ~~31%~~3%, compared to ~~$12.7~~$8.8 million in the prior year quarter. The ~~decrease~~increase in adjusted operating income is primarily attributable to ~~lower sales volumes.~~higher revenue driven by both acquisitions and organic business activity as well as various initiatives to deliver cost savings, partially offset by less favorable product mix.

Corporate segment adjusted operating loss for the first quarter of ~~2021~~2022 was ~~$6.5~~$7.6 million, an ~~improvement~~increase of ~~$2.1~~$1.1 million compared to an adjusted operating loss of ~~$8.6~~$6.5 million in the first quarter of ~~2020~~2021 due to ~~lower professional services fees and discretionary cost control initiatives.~~

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higher SG&A expense.

The following tables represent a reconciliation from GAAP operating income to adjusted operating income (loss) and adjusted EBITDA. Adjusted operating margin % is calculated as adjusted operating income (loss) divided by net sales and adjusted EBITDA margin % is calculated as adjusted EBITDA divided by net sales.


Adjusted operating income	Adjusted operating income	Three Months Ended March 31, 2021										Adjusted operating income	Three Months Ended March 31, 2022
(In thousands)	(In thousands)	Americas			International			Corporate		Consolidated		(In thousands)	Americas			International			Corporate		Consolidated
Net sales	Net sales	$	208,340		$	100,088		$	—	$	308,428	Net sales	$	225,648		$	105,044		$	—	$	330,692
GAAP operating income	GAAP operating income									44,038		GAAP operating income									42,668
Restructuring charges (Note 3)	Restructuring charges (Note 3)									1,308		Restructuring charges (Note 3)									2,189
Currency exchange gains, net (Note 5)										(2,099)
Product liability expense (Note 17)										2,796
Acquisition related costs (Note 18)(a)										1,373
Currency exchange losses, net (Note 6)												Currency exchange losses, net (Note 6)									3,271
Product liability expense (Note 18)												Product liability expense (Note 18)									2,772
Acquisition related costs (Note 14)(a)												Acquisition related costs (Note 14)(a)									2,943

Adjusted operating income (loss)	Adjusted operating income (loss)	45,152			8,790			(6,526)		47,416		Adjusted operating income (loss)	52,435			9,024			(7,616)		53,843
Adjusted operating margin %	Adjusted operating margin %	21.7		%	8.8		%					Adjusted operating margin %	23.2		%	8.6		%
Depreciation and amortization(a)	Depreciation and amortization(a)									10,504		Depreciation and amortization(a)									11,829
Adjusted EBITDA	Adjusted EBITDA	52,186			12,163			(6,429)		57,920		Adjusted EBITDA	60,796			12,362			(7,486)		65,672
Adjusted EBITDA %	Adjusted EBITDA %	25.0		%	12.2		%					Adjusted EBITDA %	26.9		%	11.8		%


Adjusted operating income	Adjusted operating income	Three Months Ended March 31, 2020										Adjusted operating income	Three Months Ended March 31, 2021
(In thousands)	(In thousands)	Americas			International			Corporate		Consolidated		(In thousands)	Americas			International			Corporate		Consolidated
Net sales	Net sales	$	231,253		$	109,892		$	—	$	341,145	Net sales	$	208,340		$	100,088		$	—	$	308,428
GAAP operating income	GAAP operating income									58,782		GAAP operating income									44,083
Restructuring charges (Note 3)	Restructuring charges (Note 3)									2,007		Restructuring charges (Note 3)									1,308
Currency exchange losses, net (Note 5)										270
Product liability expense (Note 17)										1,951
Acquisition related costs (Note 18)(a)										97
COVID-19 related costs										757
Currency exchange gains, net (Note 6)												Currency exchange gains, net (Note 6)									(2,099)
Product liability expense (Note 18)												Product liability expense (Note 18)									2,796
Acquisition related costs (Note 14)(a)												Acquisition related costs (Note 14)(a)									1,373

Adjusted operating income (loss)	Adjusted operating income (loss)	59,807			12,671			(8,614)		63,864		Adjusted operating income (loss)	45,195			8,792			(6,526)		47,461
Adjusted operating margin %	Adjusted operating margin %	25.9		%	11.5		%					Adjusted operating margin %	21.7		%	8.8		%
Depreciation and amortization(a)	Depreciation and amortization(a)									9,640		Depreciation and amortization(a)									10,504
Adjusted EBITDA	Adjusted EBITDA	66,257			15,765			(8,518)		73,504		Adjusted EBITDA	52,229			12,165			(6,429)		57,965
Adjusted EBITDA %	Adjusted EBITDA %	28.7		%	14.3		%					Adjusted EBITDA %	25.1		%	12.2		%

(a) Acquisition related costs include advisory, legal, accounting, valuation, and other professional or consulting fees ~~incurred.~~incurred during due diligence and integration. These costs are included in Selling, general and administrative expense in the unaudited ~~condensed consolidated statement~~Condensed Consolidated Statements of ~~income.~~Income. Acquisition-related costs also include the acquisition related amortization, which is included in Cost of products sold in the unaudited Condensed Consolidated Statements of Income.

Note: Adjusted operating income (loss) and adjusted EBITDA are a non-GAAP financial measures used by the chief operating decision maker to evaluate segment performance and allocate resources. Adjusted operating income (loss) is reconciled above to the nearest GAAP financial measure, Operating income (loss), and excludes restructuring, currency exchange, product liability expense and acquisition related costs. Adjusted EBITDA is reconciled above to the nearest GAAP financial measure, Operating income (loss) and excludes depreciation and amortization expense.

Total other ~~(income) expense,~~income, net. Total other income, net, for the first quarter of ~~2021~~2022 was ~~$2.3~~$2.7 million, compared to ~~other expense, net, of $1.9~~$2.3 million for the same period in ~~2020~~2021 driven primarily by ~~lower interest expense and~~ higher pension income driven by a ~~one-time pension settlement and a~~ higher expected rate of ~~return.~~return, partially offset by higher interest expense related to the Bacharach acquisition.

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Income taxes. The reported effective tax rate for the first quarter of ~~2021~~2022 was ~~21.0%~~21.7% compared to ~~23.0%~~21.0% for the first quarter of ~~2020.~~2021. This ~~decrease~~increase from the prior year is attributable to ~~higher profits~~a decrease in ~~foreign jurisdictions with favorable statutory tax rates.~~benefits related to certain share based payments.

~~-30-~~

Net income attributable to MSA Safety Incorporated. Net income was ~~$36.4~~$35.5 million for the first quarter of ~~2021,~~2022, or ~~$0.92~~$0.90 per diluted share compared to net income of ~~$43.7~~$36.5 million, or ~~$1.11~~$0.92 per diluted share, for the same period last year.

Non-GAAP Financial Information

We may provide information regarding financial measures such as organic constant currency changes, financial measures excluding the impact of acquisitions and related acquisition related costs ~~including~~(including acquisition related ~~amortization and COVID-19 related costs, consisting of a one-time bonus for essential manufacturing employees and~~amortization), adjusted operating income, adjusted operating margin percentage, adjusted EBITDA and adjusted EBITDA margin percentage, which are not recognized terms under U.S. GAAP and do not purport to be alternatives to net sales, selling, general and administrative expense, operating income or net income as a measure of operating performance. We believe that the use of these non-GAAP financial measures provide investors with additional useful information and provide a more complete understanding of the underlying results. Because not all companies use identical calculations, these presentations may not be comparable to similarly titled measures from other companies. For more information about these non-GAAP measures and a reconciliation to the nearest U.S. GAAP measure, please refer to the reconciliations referenced above in Management's Discussion & Analysis section and in Note 7—8—Segment Information to the unaudited condensed consolidated financial statements in Part I Item 1 of this Form 10-Q.

We may also provide financial information on a constant currency basis, which is a non-GAAP financial measure. These references to a constant currency basis do not include operational impacts that could result from fluctuations in foreign currency rates, which are outside of management's control. To provide information on a constant currency basis, the applicable financial results are adjusted by translating current and prior period results in local currency to a fixed foreign exchange rate. This approach is used for countries where the functional currency is the local country currency. This information is provided so that certain financial results can be viewed without the impact of fluctuations in foreign currency rates, thereby facilitating period-to-period comparisons of business performance. Constant currency information is not recognized under U.S. GAAP and it is not intended as an alternative to U.S. GAAP measures.

~~-31-~~-30-

LIQUIDITY AND CAPITAL RESOURCES

Our main source of liquidity is operating cash flows, supplemented by borrowings. Our principal liquidity requirements are for working capital, capital expenditures, principal and interest payments on debt, declared dividend payments and acquisitions. At March 31, ~~2021,~~2022, approximately ~~26%~~45% of our long-term debt is at fixed interest rates with repayment schedules through ~~2031.~~2036. The remainder of our long-term debt is at variable rates on an unsecured revolving credit facility that is due in ~~2023.~~2026. At March 31, ~~2021,~~2022, approximately ~~56%~~81% of our borrowings are denominated in U.S. dollars, which limits our exposure to currency exchange rate fluctuations.

At March 31, ~~2021,~~2022, the Company had cash and cash equivalents ~~and restricted cash~~ totaling ~~$185.1~~$147.3 million ~~including $160.1 million held by our foreign subsidiaries,~~ and access to sufficient capital, providing ample liquidity and flexibility to continue to maintain our balanced capital allocation ~~strategy.~~strategy that prioritizes growth investments, funding our dividends and servicing debt obligations. Cash, cash equivalents and restricted cash increased $6.3 million during the three months ended March 31, 2022, compared to increasing $24.0 million during the same period in 2021. We believe MSA's healthy balance sheet and access to significant capital at March 31, ~~2021,~~2022, positions us well to navigate through challenging business conditions.

~~Cash,~~Operating activities. Operating activities provided cash ~~equivalents and restricted cash increased $24.0~~of $24.5 million during the three months ended March 31, ~~2021,~~2022, compared to ~~decreasing $29.6~~providing $45.6 million during the same period in ~~2020. We continue to employ a balanced capital allocation strategy that prioritizes growth investments, funding our dividend and servicing debt obligations.~~

~~Operating activities.~~ ~~Operating activities provided cash of $45.6 million during the three months ended March 31, 2021, compared to providing $13.6 million during the same period in 2020.~~2021. The ~~improved~~decreased operating cash flow as compared to the same period in ~~2020~~2021 was primarily related to working capital ~~improvements.~~requirements, notably increased inventory related to increased backlog.

~~Payments~~Collections from insurance companies exceeded payments for subsidiary MSA LLC's product liability claims ~~exceeded collections from insurance companies~~ by ~~$5.7~~$2.1 million in the three months ended March 31, ~~2021,~~2022, compared to product liability claim payments of $5.7 million, net of collections from insurance companies, ~~of $0.7 million, net of product liability claim payments,~~ in the same period of ~~2020.~~2021. MSA LLC funds its operating expenses and legal liabilities from its own operating cash flow and other investments, as well as limited amounts of insurance reimbursements and ~~not from borrowings under the Company’s credit facility, to which it~~intercompany notes. MSA LLC is not ~~a party.~~party to the Company's credit facility. Now that MSA LLC is largely self-insured for its historical cumulative trauma product liability claims, associated insurance reimbursements received in any given period are limited, and generally do not fully offset cash outlay in that same ~~period in full.~~period. In recent years, MSA LLC’s contingent liabilities have been funded without a material impact on the Company’s consolidated capital allocation priorities.

Investing activities. Investing activities ~~used~~provided cash of ~~$52.5~~$1.1 million during the three months ended March 31, ~~2021,~~2022, compared to using ~~$26.1~~$52.5 million during the same period in ~~2020. The~~2021. Maturities of short-term investments, net of purchases, partially offset by capital expenditures, drove cash inflows from investing activities during the three months ended March 31, 2022, while the acquisition of Bristol and capital expenditures, partially offset by maturities of short-term investments, net of purchases, drove cash outflows from investing activities during the same period in 2021. During the three months ended March 31, ~~2021, while~~2022, we incurred capital expenditures ~~and the purchase~~ of ~~short-term investments, net of proceeds from maturities drove cash outflows from investing activities during the same period in 2020. During the first quarter of 2021, we incurred~~$8.0 million, including $2.2 million associated with software development, compared to capital expenditures of $9.6 million, including $2.0 million associated with software development and other growth programs, ~~compared to capital expenditures of $6.6 million, including $1.8 million associated with software development and other growth programs,~~ in the same period in ~~2020.~~2021. We also remain active in evaluating additional acquisition opportunities that will allow us to continue to grow in key end markets and geographies.

Financing activities. Financing activities ~~provided~~used cash of ~~$31.6~~$15.9 million during the three months ended March 31, ~~2021,~~2022, compared to ~~using $13.3~~providing cash of $31.6 million during the same period in ~~2020.~~2021. During the three months ended March 31, ~~2021,~~2022, we had net proceeds onfrom long-term debt of $5.0 million as compared to net proceeds from long-term debt of $52.0 million to fund the acquisition of Bristol ~~as compared to net proceeds of $28.0 million~~ during the same period in ~~2020.~~2021. We paid cash dividends of ~~$16.8~~$17.3 million during the three months ended March 31, ~~2021,~~2022, compared to ~~$16.3~~$16.8 million in the same period in ~~2020.~~2021. We also used cash of ~~$5.3~~$3.7 million during the three months ended March 31, ~~2021~~2022 to repurchase shares, compared to using ~~$27.7~~$5.3 million during the same period in ~~2020. In 2020, $20.1 million of our repurchase activity was related to purchases under our 2015 stock repurchase program.~~2021.

CUMULATIVE TRANSLATION ADJUSTMENTS

The position of the U.S. dollar relative to international currencies at March 31, ~~2021,~~2022, resulted in a translation ~~loss~~gain of ~~$10.3~~$5.9 million being recorded to the cumulative translation adjustments shareholders' equity account during the three months ended March 31, ~~2021,~~2022, compared to ~~$22.8~~a $10.3 million translation loss being recorded to the cumulative translation adjustments account during the same period in ~~2020.~~2021.

COMMITMENTS AND CONTINGENCIES

We made contributions of $1.9 million to our pension plans during the three months ended March 31, ~~2021.~~2022. We expect to make total contributions of approximately $7.7 million to our pension plans in ~~2021~~2022 primarily associated with statutorily required plans in the International segment.

~~-32-~~-31-

The Company had outstanding bank guarantees and standby letters of credit with banks as of March 31, ~~2021,~~2022, totaling ~~$11.4~~$8.9 million, of which ~~$1.3~~$1.5 million related to the senior revolving credit facility. These letters of credit serve to cover customer requirements in connection with certain sales orders and insurance companies. The Company is also required to provide cash collateral in connection with certain arrangements. At March 31, ~~2021,~~2022, the Company has ~~$0.3~~$0.5 million of restricted cash in support of these arrangements.

We have purchase commitments for materials, supplies, services, and property, plant and equipment as part of our ordinary conduct of business.

Please refer to Note ~~17—~~18—Contingencies to the unaudited condensed consolidated financial statements in Part I Item 1 of this Form 10-Q for further discussion on the Company's single incident and cumulative trauma product liabilities.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

We prepare our unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosures. We evaluate these estimates and judgments on an on-going basis based on historical experience and various assumptions that we believe to be reasonable under the circumstances. However, different amounts could be reported if we had used different assumptions and in light of different facts and circumstances. Actual amounts could differ from the estimates and judgments reflected in our unaudited condensed consolidated financial statements.

The more critical judgments and estimates used in the preparation of our unaudited condensed consolidated financial statements are discussed in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, ~~2020. During the first quarter of 2021 we made an acquisition that raised business combinations to a critical accounting policy and estimate.~~

~~Business Combinations~~

In accordance with the accounting guidance for business combinations, the Company uses the acquisition method of accounting to allocate costs of acquired businesses to the assets acquired and liabilities assumed based on their estimated fair values at the dates of acquisition. The excess costs of acquired businesses over the fair values of the assets acquired and liabilities assumed will be recognized as goodwill. The valuations of the acquired assets and liabilities will impact the determination of future operating results. In addition to using management estimates and negotiated amounts, the Company uses a variety of information sources to determine the estimated fair values of acquired assets and liabilities including: third-party appraisals for the estimated value and lives of identifiable intangible assets and property, plant and equipment; third-party actuaries for the estimated obligations of defined benefit pension plans and similar benefit obligations; and legal counsel or other experts to assess the obligations associated with legal, environmental and other contingent liabilities.

The business and technical judgment of management was used in determining which intangible assets have indefinite lives and in determining the useful lives of finite-lived intangible assets in accordance with the accounting guidance for goodwill and other intangible assets.2021.

RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING STANDARDS

None

~~-33-~~-32-


Item 3.			Quantitative and Qualitative Disclosures About Market Risk

Market risk represents the risk of adverse changes in the value of a financial instrument caused by changes in currency exchange rates, interest rates and equity prices. We are exposed to market risks related to currency exchange rates and interest rates.

Currency exchange rate sensitivity. We are subject to the effects of fluctuations in currency exchange rates on various transactions and on the translation of the reported financial position and operating results of our non-U.S. companies from local currencies to U.S. dollars. A hypothetical 10% strengthening or weakening of the U.S. dollar would decrease or increase our reported sales and net income by approximately ~~$12.8~~$14.3 million or ~~4.1%~~4.3% and ~~$0.8~~$1.1 million or ~~2.2%~~3.0%, respectively, for the three months ended March 31, ~~2021.~~2022.

When appropriate, we may attempt to limit our transactional exposure to changes in currency exchange rates through forward contracts or other actions intended to reduce existing exposures by creating offsetting currency exposures. At March 31, ~~2021,~~2022, we had open foreign currency forward contracts with a U.S. dollar notional value of ~~$94.3~~$99.9 million. A hypothetical 10% strengthening or weakening of the U.S. dollar would result in a ~~$9.4~~$10.0 million increase or decrease in the fair value of these contracts at March 31, ~~2021.~~2022.

Interest rates. We are exposed to changes in interest rates primarily as a result of borrowing and investing activities used to maintain liquidity and fund business operations.

At March 31, ~~2021,~~2022, we had ~~$95.7~~$272.2 million of fixed rate debt which matures at various dates through ~~2031.~~2036. The incremental increase in the fair value of fixed rate long-term debt resulting from a hypothetical 10% decrease in interest rates would be approximately ~~$7.8~~$9.8 million. However, our sensitivity to interest rate declines and the corresponding increase in the fair value of our debt portfolio would unfavorably affect earnings and cash flows only to the extent that we elected to repurchase or retire all or a portion of our fixed rate debt portfolio at prices above carrying values.

At March 31, ~~2021,~~2022, we had ~~$265.7~~$329.9 million of variable rate borrowings under our revolving credit facility. A 100 basis point increase or decrease in interest rates ~~could~~would have a $3.6 million impact ~~our~~on future annual earnings under our current capital structure.


Item 4.			Controls and Procedures

(a)Evaluation of disclosure controls and procedures. Based on their evaluation as of the end of the period covered by this Form 10-Q, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to our management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

(b)Changes in internal control. There were no changes in the Company’s internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

~~-34-~~-33-

PART II. OTHER INFORMATION


Item 1A.			Risk Factors

Claims of injuries ~~from our products,~~or potential safety issues related to alleged product defects, or ~~recalls of~~quality concerns against our ~~products~~various subsidiaries could have a material adverse effect on our business, operating results, financial condition and liquidity.

Our mission, reputation and business success rely on our ability to design and provide safe, high quality and reliable products that earn and maintain customer trust. Our products are often used in high-risk and unpredictable environments, and MSA and its subsidiaries face an inherent business risk of exposure to product liability ~~claims arising from the alleged failure of our products to prevent the types of personal injury or death against which they are designed to protect.~~claims. In the event the parties using our products are injured or any of our products prove to be defective, we could be subject to ~~claims with respect to such injuries.~~claims. In addition, we may be required to or may voluntarily recall or redesign certain products or components due to concern about product safety, quality, or reliability. Any significant claims, recalls or field actions that ~~could potentially be harmful to end users. Any claim or product recall that results~~result in significant expense or negative publicity against us could have a material adverse effect on our business, operating results, financial condition and liquidity, including any successful claim brought against us in excess or outside of available insurance coverage.

Our ~~subsidiary,~~subsidiaries, including Mine Safety Appliances Company, LLC, may experience losses from ~~cumulative trauma~~ product liability claims. ~~The inability to collect insurance receivables and the transition to becoming largely self-insured for cumulative trauma~~Losses from product liability claims could have a material adverse effect on our business, operating results, financial condition and ~~liquidity.~~liquidity, which could introduce volatility from period-to-period in our financial results.

From time to time, product liability claims are made against our various subsidiaries. In most instances the products at issue were manufactured many years ago and are not currently offered for sale, but in some instances, product liability claims may relate to current products.

Our subsidiary, Mine Safety Appliances Company, LLC (“MSA LLC”) was named as a defendant in ~~1,632~~1,691 cumulative trauma lawsuits comprised of ~~3,043~~4,595 claims at March 31, ~~2021.~~2022. Cumulative trauma product liability claims involve exposures to harmful substances (e.g., silica, asbestos and coal dust) that occurred years ago and may have developed over long periods of time into diseases such as silicosis, asbestosis, mesothelioma or coal worker’s pneumoconiosis. ~~The products at issue were manufactured many years ago and are not currently offered by MSA LLC.~~ A reserve has been established with respect to estimated amounts for cumulative trauma product liability claims currently asserted, ~~but not yet resolved and~~as well as, incurred but not reported (“IBNR”) cumulative trauma product liability claims. Because our cumulative trauma product liability risk is subject to inherent uncertainties, ~~including unfavorable trial rulings or developments, an increase in newly filed claims, or more aggressive settlement demands,~~ and since MSA LLC is largely self-insured, there can be no certainty that MSA LLC may not ultimately incur losses in excess of presently recorded liabilities. ~~These~~Many factors affecting cumulative trauma product liability claims may change over time or as a result of sudden unfavorable events within a single reporting period. Associated losses could have a material adverse effect on our business, operating results, financial condition and ~~liquidity.~~liquidity, or could result in volatility from period to period.

We will adjust the reserve from time to time based on ~~whether~~developments in MSA LLC's actual claims experience, the ~~actual numbers, types and settlement values of~~ claims ~~asserted differ from current projections and estimates~~environment or ~~there are~~other significant changes in the ~~facts~~factors underlying the assumptions used in establishing the reserve. Each of these factors may increase or decrease significantly within an individual period depending on, among other things, the timing of claims filings, or settlements, or litigation outcomes during a particular period that are especially favorable or unfavorable to MSA LLC. We accordingly consider MSA LLC’s claims experience over multiple periods ~~and/~~or whether there are changes in MSA LLC’s claims experience and trends that are likely to continue for a significant time into the future in determining whether to make an adjustment to the reserve, rather than evaluating such factors solely in the short term. Any future adjustments to the reserve may be material and could materially impact future periods in which the reserve is adjusted.

In the normal course of business, MSA LLC makes payments to settle these types of cumulative trauma product liability claims and for related defense costs, and records receivables for the amounts believed to be recoverable under insurance. MSA LLC has recorded insurance receivables totaling ~~$95.6~~$126.4 million and notes receivables of ~~$52.7~~$48.8 million at March 31, ~~2021.~~2022. Since MSA LLC is now largely self-insured for cumulative trauma claims, additional amounts recorded as insurance receivables will be ~~limited and~~limited. Amounts recorded as insurance receivables are based on ~~calculating~~ the ~~amounts~~amount of future losses presently recorded in the cumulative trauma product liability reserve. These projected future losses are used to ~~be reimbursed pursuant to~~calculate contingent reimbursements deemed probably of collection under negotiated Coverage-in-Place Agreements. ~~Various factors could affect the timing and amount of recovery of the insurance receivables,~~Reimbursements are calculated based on modeled assumptions, including ~~assumptions regarding~~ claims composition, ~~(which~~claims characteristics, and timing (each of which are relevant to calculating reimbursement under the terms of ~~certain~~ Coverage-In-Place Agreements). These factors, and the ~~extent to which~~potential for future insurer insolvencies, could affect the ~~issuing insurers may become insolvent~~timing and amount of receivables actually collected in ~~the future.~~any given period or in total.

~~-35-~~-34-


Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds

(c)Issuer Purchases of Equity Securities

Period Total Number of
Shares
Purchased Average Price Paid
Per Share Total Number of
Shares Purchased
As Part of Publicly
Announced Plans or
Programs Maximum Number
of Shares
That May Yet Be
Purchased Under
the Plans or
Programs
January 2021 234 $ 156.12 — 370,230
February 2021 900 166.10 — 358,126
March 2021 31,516 163.80 — 384,314


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs	Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs
January 2022	165	$	150.96	—	431,639
February 2022	665	137.92		—	417,758
March 2022	27,536	128.64		—	423,310

The share repurchase program authorizes up to $100.0 million in repurchases of MSA common stock in the open market and in private transactions. The share ~~purchase~~repurchase program has no expiration date. The maximum number of shares that may be purchased is calculated based on the dollars remaining under the program and the respective month-end closing share price.

~~Shares~~The above shares purchased during the quarter relate to ~~stock~~stock-based compensation transactions.

We do not have any other share repurchase programs.


Item 6.			Exhibits

(a) Exhibits

31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14(a)

31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14(a)

32 Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. (S)1350

101.INS XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF XBRL Taxonomy Extension Definition Linkbase Document

101.LAB XBRL Taxonomy Extension Label Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

~~-36-~~-35-

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



						MSA SAFETY INCORPORATED

April 29, ~~2021~~2022						/s/ Kenneth D. Krause
						Kenneth D. Krause
						Sr. Vice President, Chief Financial Officer and Treasurer

						/s/ Jonathan D. Buck
						Jonathan D. Buck
						Chief Accounting Officer and Controller (Principal Accounting Officer)

~~-37-~~-36-


	Shares	Weighted Average Exercise Price
Outstanding at January 1, 2021	283,998	$	46.23

Exercised	(38,806)	46.09
Forfeited	(81)	49.66

Outstanding at March 31, 2021	245,111	46.26
Exercisable at March 31, 2021	243,563	$	46.25


	Three months ended March 31,
(In millions, except per share amounts)	2021		2020
Net sales	$	310.4	$	364.3
Net income	36.6		46.7
Basic earnings per share	0.94		1.20
Diluted earnings per share	0.93		1.19