MSA - Earnings call transcript Q3 2020 | MSA Safety Incorporated

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Operator

Good day, and welcome to the MSA Third Quarter 2020 Earnings Conference Call. [Operator Instructions] Please note event is being recorded. I would now like to turn the conference over to Elyse Lorenzato. Please go ahead.

Elyse Lorenzato

Thank you, Drew. welcome Third and Call Earnings everyone, XXXX. for morning, to Quarter MSA’s Conference Good

are Chairman, Treasurer. Nish and today me Joining Vartanian, Senior President, Ken President Vice CFO and Krause, CEO; and

everyone Before I’d XXXX. this excluding Securities meaning information, we historical Litigation the matters forward-looking within the like remind call, statements begin, are of discussed that to Reform on the Private of Act

levels are statements to, anticipated performance. limited but and not of include, Forward-looking projections all future

press our other statements uncertainties most Forward-looking made to reconciliations except with over call, actual duty non-GAAP are statements cause and measures With as We’ve to required uncertainties February this website that publicly discussed Vartanian. the at well of results CEO, risks, including and any President law. as recent our that, materially the Nish our These factors as are financial detailed filed no in involve to investors.msasafety.com. I’ll call update and and by of morning on those this from our filings turn discussion QX available XX-K the SEC, differ may the on year. risks, release this undertakes part Investor forward-looking Form non-GAAP factors in Relations Chairman, included here. our certain other MSA as our

Nish Vartanian

greatest position trends order across portfolio. incoming start our this COVID-XX in session. see to an third pandemic weakness good of and then disappointed overall give related texture coming and the with taking financial and The give business impact and we’ll September commercial near economy employment to term did This more seeing October. August, Elyse, in XX%. overview the into the for the provide Ken and ripple improvement revenue our morning, demand From in standpoint, oil steps everyone. and a with the various the long quarterly we’re the of creation morning, months that, order the in Q&A we’re gas will we executing environment both term. After on significant to review Thanks, of order contraction products more and I’ll continued and provide quarter how an the value and insight continue MSA pace were from on We in pace July and short-cycle markets. construction effects we’re

the In last versus incoming with X which of fact, business, were we was weeks pleased XXXX. up

While shutdowns experience we’re concerns COVID to hopeful of or worst definitively site rising say and the with future slowing difficult cases job a of it’s might customers our behind reports is reemployment. us, that that

a was it While challenging to making. quarter, benefits see a investments we’re of continue we number from

me the give during from also emerge pandemic that we’re even highlight this stronger will X deal a future. as of confidence to key We great this taking in our areas MSA environment. believe we want an I create steps

grow First, product the worker today. it continues is importance. services And evident to MSA’s and innovative importance through solutions and protecting safety of has of and than safety never health in more mission relevance been

as Second, technology leader. we the well remain safety positioned very

that to our the available of our to a brings falls technology most when construction market-leading new And point. to sites. not death secured a with development data many of customer launch example MSA’s We PPE ioXXX of ahead just remain of that of advanced to technology patent-pending the one with R&D challenges for upside with attention an detector development providing are competencies already, LUNAR play provide Today, growth applications our our personal PFL and at ALTAIR the as address use acreage forging we they’re is expand SCBAs solutions the excellence. hook fall to that product falls ioX To engineering product but to fall This protection drive provide our type protecting insights innovative global the smart this, for will in of We our ioX equipment at global by connected this worker core to in the safety system mind, point. the compliance our our being to heavily connector MX commitment Unfortunately, technology X&S Over potential. differentiators with across smart turned industries protection GX squarely core new to of harnesses an to With issue. More all to transmitters, and launched XXXX in continue fall RFID firefighter limiter U.S. to one we groundbreaking foresee of large not product of safer. organic and line is expect and our using wearers ioX across anchor evolving the From number continue invest and customers falls alerts those in helps that accountability, cause the of technology applications. stated one X address important significant smart markets. many to who self-retracting and V-TEC workers we today. involved gas the their And one recently used the growing invest use protecting individuals this with lanyards time, an solutions heights often and we’re megatrends, customers of safety wearing We’ve world. make VTECH VTEC of the in market over center are while employees. that tied of line safety Hook off innovative to the on Smart heights. workers’ portfolio redefining can we’ve reimagining now enhancing under specifically, umbrella, role V-Series their

remains remains growth on an Inorganic strategy. expanding in that align to our lines safety market strong. With a as leverage than well our net positioned we’re both to product important sheet addressable Xx balance as basis, well our our existing drive very less in Third, growth, our it of part inorganic with use mission. areas

the up. we XX%, market as MSA see And development So always, contraction it’s reflect pipeline leverage continues in the driving a well maintain recent see programs, opening on notably, back expansion, of very up healthy SG&A executing were basis nice margins revenue number Despite we’ll targets year-to-date in stay improved Strong active our to continue to our been with able attractive these revenue engage months continue the to we Fourth, and to line. very team and disciplined. margins. points challenges the productivity. segment of great markets. continue to to core XXX despite the with see and is We’ve M&A International

we’ve we road map of map road in Day, team have improvement. progress international cost been against segment made International reduction programs our COVID. last Investor accelerated European our optimization you as restructuring laid shared cost on As and know, and and our have the at includes result out Leenen that of largely entire a the focused segment, other manufacturing the great centers, footprint rationalization, which areas reduction that service leveraging Bob

MSA. least, now motivating our all investments our our we development are results. reporting execute deal downturn. structural quarter but effort great employee we to to reduction for We While International, at will in of of segments. global additional in we’re strong team drive improvements business to expected continue put not a taking we drive approach the and team the The in across have model certainly a last, have engagement, a that very drive this in long-term restructuring third to programs cost during And talent

benefits program Post many our Pittsburgh to Gazette seen program. workplace spot. time designation, MSA Post have but connection seventh to recently MSA number on on a leadership one and an top top Post The This the was risen we’ve values As Western Gazette by of Gazette. the among perceptions time marks and has the effectiveness, organization’s engagement, achieved you assesses Safety companies first mission website, Pennsylvania’s the named large employee workplace

results tribute particularly us, fact makes associate a always level It’s culture even based given it’s employees. on is meaningful taken significance the important from MSA. us of For feedback the all pandemic. greater the during This of this this an this we’ve what faced kind to is exclusively but are year engagement the at on challenges recognition to that

an developing happens continued of MSA worker R&D As through areas now over leaning we’re brightest our I’m today, discussed With recession. turn we important and talent. on position executing even none organic trend MSA for to attracting, safety, the and more that and to number organization, navigate the retaining of to being programs included strategic and safety as developing without we a results. and programs to take ever, growth our retaining programs programs and global experience talent. achieve And in customer profile. Ken enhance exceptional continue and investing you an stronger X provide that, as to emerge driving and those the growth, productivity invest position expand focused will To in positions, on With our Ken? an than we market confident margin leadership success, productivity call secular the I I’ll these our of from into the financial goals, economic company which

Ken Krause

before good saw bit especially detail. the quarterly A observations few where COVID-XX. challenge, everyone. in resurgence areas and in I presented the in more high-level in results discuss Nish, conditions we a Thanks, financial morning, Economic quarter a

presented margin XX%, Despite well. challenges revenue team of with maintained operating the XX%. a hurdles, us a about Although of of very decremental executed number macro-related decline we the

Revenues COVID down the the the saw and X% United very has the quarter points quarter significantly Despite quarter being constant in ago the downturn. felt in International than never This year down basis off is our meaningful are up segment, productivity our the in quarterly finished segment, XXX we especially on summer. were in biggest for down greater business nice focus a and up results, the segment. We States, versus currency points with challenging more in the our and and Our revenues profitability. focus this the I’m U.S., very third in the in pleased the after were a our X% model quarterly XXX notably most yielding U.S., profitable and from progress, where this margins year-to-date. Americas, but revenue Americas September impact in basis improving been during XX% in any improvements same

gas with summer on as and discussed COVID eye and webcast, resurgence the on last we the an the in earnings business September of As markets that commercial impact markets, the again to months. public resurgence impact on our and having our you on and certainly notably is need key construction the a oil our over keep call had in close we

that Nish the this are cost global goals had will stronger a structural review you today. we programs emerge from restructuring savings I’ll profile. associated implementing us and investments margin help with As with reduction mentioned, downturn

revenue saw in the in in Let’s Quarterly in the our across helmets. much weakness on take our declines XX% and portfolio. Americas respirators XX% quarter. look down by of at a and International segment X% financial ballistic was closer We growth of offset results revenue segment. Partially the

July uptick currency in While of of provided overall, a summer. impact growth industrial webcast presented we as number in U.S., This, August on was COVID challenging and our which was saw QX. and in feeling neutral orders area fall virus. of both tough in PPE variety We we are challenges brought industrial our both our the resurgence in encouraged International across in We products protection, and a business. and by of and sold consolidated in second Americas to especially of saw a X% very area every in businesses improvement September head which nearly the challenges headwind of gas by the tailwind the oil The the environment and revenue construction, quarter, in segment. of it public sales These a had a employment-based where a this it detection. of during had slower includes the to quarter, a XX%. a industries, portable including on with gas very I down our the summer the were PPE, mid-September, indicated the a are greatest into employment-based protection sequential commercial Similar X%

the relative over see some fire In to coming was to saw and demand business it difficult in the in mentioned was market, products service due summer. evaluations these the September measures. good on spring we the forecast delays is we the in distancing softer in QX weakness to reprieve our it social SCBA based to that quarters, the in had for While months

conversions across into As SCBA and had very in and August backlog September. inventories. AFG September, flow to some we funds competitive U.S. in We built large began the

and the Our be inventory quarter. built strong, in U.S. MX pipeline demand to and in the and both The the We backlog side. internationally the well Globe in competitive from very with advantage continues perform third with GX this business to continues SCBA. the area

portfolio. gear defensive constraints and social is piece turnout While a we’ve state, had some COVID of to the distancing, steady due production Globe at

Our in thermal noncore bit from a in press growth APR by line in other revenue This is the imaging XX% in growth and of increasing masked a shipments America. continued year the Latin U.S. to drive quarter, lower the declines ago. release cameras in

had As indicated respirators I throughout orders public quarter, the summer. saw for over the on we webcast moderate

the first from step the rate growth half to down So we expected the in half. second

we While this reducing lead area. past months, carry good and backlog inventories progress have times we the made still over in few elevated

declined gear a and year-end. We level, basis up ago approximated respirators. expect year on we levels. Backlog quarter ago improvements XXX the of remains do a as to a and same higher QX incurred purifying versus I measures backlog with From about profit healthy factories an with COVID business. a is year exited through lesser our backlog -- we with margin. to from in impact Americas backlog safety Gross overall see quarter air million continued higher price These the want our implementing turnout that considerably time lower inefficiencies the degree, note points associated across the SCBA on throughput much realization significant items predominantly segment and costs had the $X associated protocols. in associated to with that

We’re pricing time list capturing we set last we year. our when around the this expected price

of results, from million was up segment. continue $XX savings savings on are million very cross pricing down expense a previously We the our seeing especially million quarter. $XX and in some of ago. $X cost in XX% international our to to delivered restructuring our focus SG&A year from programs ramp nice a We and business discretionary executed

compensation variable our the quarter. the the reduced by saw in in about trends also on $X quarter We we accruals million third based

about adjustments million. favorable costs on like reduced $X quarterly saw that by we accruals Additionally, medical other SG&A

business the of been track indicated We’ve our million I you accrued of across just aggressive cost $XX and we long-term model expense had programs MSA goals As expansion earlier, our the quarterly keep in reduction under reporting $X of with side cost million restructuring past. shared and expect on restructuring X on across offset segments. to our months we We to thereafter. invested in million that we’ve compensation savings margin P&L have million accrue to savings improve through expect million for incurred help or all programs In impact to of savings the resets deliver of of These coming $XX income these the discretionary $XX total, the XXXX. partially first collectively of statement XXXX to and in variable $XX should XXXX. $XX the to costs million other back into annual toward

profitable from contraction Year-to-date, as ago. down operating XX.X%, a of will despite improving points decremental adjusted same revenue which points X% Our more goal the related at recession. is XX%. Year-to-date is quarter from aimed margins versus business this stronger, basis a about position XX front pandemic the the are year to up us basis on the the downturn, these adjusted margin and challenges in was margin company. emerge operating Quarterly XX

to same The up better to our profitability, quarter As ago of $X.XX, discussed adjusted same XX.X%, internationally. expected effective earlier the incremental versus the basis versus year, we increases that XXX our favorable margins in and being rate quarter mix see on reflected points year and the statutory tax our less we good be was a compensation rate ago. was a year in it’s than nondeductible a quarterly margins, XX% down EPS Quarterly results. decremental

free under additionally, tax paid healthy, we EPS. While higher were that on the higher the $XX weighed Act. taxes normally approximated have deferred Quarterly but would pressured QX revenue paid rate conversion in million levels, on and QX flow been cash adjusted inventory half, was that quarterly were lower operating margins the Cares first the in into

saw quarter me in an bit as for Let the Inventory detail in capital quarter. we cash order use and late dissect largest more the in a pace of in backlog working increase the you. was

hand While portion we customers of is business to inventory respond ensuring the improve. to are on have we conditions a also and sufficient the backlog higher increase, as driving preparing

the upon for we’ve As share of in cash the inventory to looking strike being always investing of a mindful gain to balance MSA past, rebound, while flow. we’re in indicated also position

flexibility us capital balance working we based our see strong on in Our improvements planning this sheet most going provides Nonetheless, with in recent inventory forecast, expect the to area. and forward. balance would

front. X paid quarter results and accrued expenses good Receivables We Stepping to dividend same this spoke free a days. back We our $XX very continue of and we year flow buyback the period continue best used free as use receivables AP practices first while leverage of the ratios. and $XX the flow provided I a few the million moments we generated on months source this improved apply the ago. a at about versus to we very maintaining in of cash, cash to million and looking the in healthy cash to shares saw and collection year, taxes ago. see cash fund

Looking than investing very on positioned our balance balanced. to The end strong, and or on X.Xx allocation sheet priorities business. a basis sheet. balance Xx With remain a in quarter remains at continue leverage of we our well at basis, net our gross less capital remain

what this October projects results normal industrial to up and at in our wrap performance we last our aligned and comparison with business. seasonal tell dynamic a fine In economic versus that trends. is addition There with softness very August. and in October fourth difficult that driven directionally you PPE M&A to on challenges business, and have XXXX difficult this can in improvement a compared of be in by put core the the sequential service -- and very to in we based will continues FGFD mostly point, year. the to be bright July weak QX to point. in QX seen point saw the a fire improvement overall What spots R&D, optimization improved I environment, pursue in the nice year-over-year it’s throughout quarter restructuring against very From in August. But we the order pace QX are September and from in the planning continue strong To At ongoing, we are QX, markets. July basis, from is to up, very and upon manufacturing business we opportunities which September for

not look As actively portfolio takeout executing a of acquisition our I’ve of long-term relying geographies, is projects product business often particular be we and years. ahead, of on any see are and line, to over with growth a all on coming continues program, to opportunities savings. drive the one to and restructuring we plenty across margin case, that structural focus success on said, MSA’s expansion XXXX cost drive improve we or model the our

we’re So, remains back and growth opportunities for call of some commentary. to while not the through and the the Nish our long-term timing challenging for in creation recession recovery all concluding a that, managing unclear economic value changed. With shape turn us, the near of environment term, to Nish? and and I’ll business has over

Nish Vartanian

challenging been tremendous of Ken. Well, you, confidence I Thank very team have our and we it��s a executing the it. amount have a strategy in certainly year.

was strong very economic by QX showing on key MSA’s to August. markets. and weak. noted, have started offset weaker that, is the in September, quarter, evidenced in profile model as challenges although and of and not margin we with through today signs webcast despite our the business we resilience, Even revenue enough the it both July improvement saw And As

lastly, structural improve acquisitions, Our as and that pushing and balance on us does front. this your we takeout for give strong to a that have. very we’re well forward And pandemic. be that, we’re very to time, you with said up not cost Ken margin At upon may support positions Having we’ll remember glad from questions call I emerge incremental guidance. this Please active in the to and sheet now profile questions. open any MSA will take invest

Operator

of first Stifel. [Operator Instructions] Stanley question The comes Elliott from

Stanley Elliott

products, from a talked more year help any see about the of a I’d there some little has the Is thinking love part but of trends way October improving. of of of about to bit as September year. You or mentioned could kind improved the about little the bit us cadence back we’re that? the how you back kind You half

Nish Vartanian

so Yes, that September, improvement we and products. the saw in Sure. led by very was service fire strong really

that So that business we and mentioned, we Globe products, Ken talked And It SCBA very the as strong came coming through with about AFG across the grants anticipated. being as was in through. both, board. released

how service in is back strength quickly fire surprising both how little products industrial snapped was the continued and September. very strong. into was So And strong us What the PPE a October areas. to in that

in we we during So about job it’s disappointed that in we July what that. on some We see that. were how Gulf the encouraging surprised surprised little and a to with our down along the quickly talked see August, contract PPE by had with -- while business Southeast back. sites things with a weren’t shutting with snap saw we We calls feeling were earlier Coast. down We and would that

what’s out business a the there. to is lot cases some I But back. next And popping your there’s COVID color add came that. up, if going very know of the Ken, know we just encouraging to so you sure to uncertainty question. how what want future. I’m happen With don’t going don’t into was it’s more

Ken Krause

is part since quite was was things. that we core Nish, of the the month only frankly, And couple a it business add, early growth thing of pandemic. I good for The would time, a this us. September saw first

Our about September. was core up business XX% in actually

nicely August XXXX the that has But you July year. can I And from in many the to in what October really because step XXXX It’s of the we rate is hard have changed. to of business to tell things up. saw us. earlier of run our improved so today compare So month and it nice business really the run in a good what was of for October rate see business

Stanley Elliott

is out step And on Jacksonville relates How going I that I mean And down, the demand? coming to APR update could find kind pandemic? you what I’m after to months the of we customer view you’re facility? kind then seeing in where to but if start that’s the cancellations, it’s your that market are, the sizing X the of as any changed us opportunity, if it curious along? understand given of X,

Nish Vartanian

schedule production Yes, we’re anticipate on the job be The point. done of Jacksonville with a up team CapEx where to in expense Stanley. capacity Sure, this our ramp-up at the ramping we right with nice facility. has there. And near we’re it

good there. So progress

As through for the that’s do past. expect you products mentioned, as we’ll a work the and but on we year balance to moderated the growth and have in we backlog APR through pipeline based fourth the see business, signaled -- of quarter. at the we the down And solid backlog the

rise, work be opportunities there We the as products for within could numbers opportunities, the opportunity continue more and that. -- to on health pandemic some first for care as APR responders

year. But remains So the that. we’re we’ll certainly through that balance mentioned, to prepared good. respond this And of shift we pretty pipeline the to as

Stanley Elliott

that here. Perfect. Just mentioned North And a more we a margin based? global restructuring to opportunity opportunity here. get Is flavor side think international? trying we it American about the then you Do more think as it’s

Nish Vartanian

Stanley. Sure,

margin. some margin nice year. International to proud done through on team’s especially the restructuring expansion upside Europe, so certainly, obviously, to talked go we’re shown execute our the programs the there’s of specifically operating opportunity So really what some that continuing the in in upside and XX% as parts we And there’s And to that. And -- about International, the We world. forward. think of we we’re other identifying that in more

we Ken executing a that here, years. and have, of the really benefit So cost mentioned in some we’ll on that taking in we’re and see approach. takeout we’re and that global future XXXX

some we we to well opportunity leverage margins the execution Year-to-date, controls. continue And have cost around opportunity some There’s where forward to to XX%. we pricing processes greater our to It’s to we future. do So systems and we see find margins I around some fully great as we’re up see good XX%. hold there’s and into can our our as the go upside. efficiencies. as business above nice expect nice go certainly, realize

Operator

question next CJS from Dan comes of The Securities. Moore

Brendan Popson

This ask think and there. Do at about other Dan. How you year next but with on XXXX beyond? looking quite volatility is baseline had maybe should we going XXXX lot expect? in what respirators? think think a more with Or with has just of I just for you’ve you’d not do quarter our wanted respirators noncore and levels obviously you increased, -- to your products. products Brendan was Obviously, the into that the this what

Nish Vartanian

in hard be finger That’s opportunity powered quarter, with APR products. Sure. growth with forward, fourth with as respirators, some growth, to go quarter products put some products. there opportunities a air there see the XXXX possibly could stockpile the But fourth products moving Obviously, are decent parts. adjacent year-over-year to some on for purifying because expect we elastomeric we APR or the

enough as we a opportunity, level XXXX. land So around we some to that going There’s number that’s and it’s finger that. hard put certainty have put where to certainly don’t out to us on really on a but get for into

Ken Krause

It’s from The time lumpy ballistic line, a time. helmet business, to can look be have about not also business, a in are Brendan. our that’s talking lumpy bit noncore at line but we When Europe. our business only that what’s we we respirator in

contracts so, large oftentimes, you’ll see And come and so go.

the folio fairly part -- for well so optimized and would of like portfolio value-creating time we our we be port that the And at are shareholders. is from time. customers the products -- feel in it’s to our generally, can point lumpy But that and this it are left

Brendan Popson

obviously, week just would in mostly point? the funding on there’s federal looking starting with next see be guys you Or how Or -- kind great. I election? this to you’re coming then dependent is talk updates go have updates And of is Obviously, everything it there that, things else? anything at great. Any more potentially any which said is on fire Great. into of safety. limbo some know at

Nish Vartanian

fire with pace the the we’re business service we with of for in at this outlook being our anticipated the the We business very service. year time -- Well, order positive. remains where fire

compete continue We marketplace. in the to well

backlog. business is standpoint. is we As get through out a and door the mentioned, consistent on and reduce to That work the product business. a a production -- hiccup Ken The never from business real cloud business in whatsoever onus that us didn’t that have booking

As we opportunities our overall the go into remains apparatus good. the pipeline for breathing and business future,

lot we the talk. If some fire funding Republican even administration, the service, there for more get service. we see good a funding for had could fire in the During and administration federal years the of different there’s respectable we And a was that here.

there could flowing there more into be potentially some administration under markets. be a service some other fire So the municipal could and funds Democratic upside where federal

So service as the go solid XXXX. for we us outlook remains into fairly for fire

If you bills, sides, both draft Republican, of in support and back what was out community. was look firefighter for regardless of support the the step coming the year, of tremendous in side Democrat earlier And Republican side. well Democratic amount had or the as the broad-based those at bills both there in as a

support for House, there regardless good of like So will feel be our who’s firefighters. we White in real the

Operator

W. from Baird. The Richard Robert next Eastman question comes of

Richard Eastman

you improvement, around you push-outs the maybe on year-end Nish, really visible look the backlog? around revenue terms, that driver you short at highlighted quarter, there? when cancellations any look and haven’t the that get I on around to business service the the you confidence shipping there remains and rest obviously, third but healthy fourth sequential quarter, the of from is or and -- some been growth you the flame gas confidence the industrial, fire sequential is the When is fourth that speak maybe fixed when obviously that of to there. to pretty impact backlog, beyond that which industrial mean side, of visibility was business,

Nish Vartanian

Yes, that’s Right. correct.

products, we look see. year, get fire rotational when we So our service into backlog, of that’s normal the this at and time what we exactly the shift

normal products a months, lot project PPE seasonality a November in construction and opening it’s really product there’s and from a lot -- industrial [indiscernible] that’s the short that also And the products, February. don’t it It’s ships up is activity. go. of products, you for On the through to Northeast, time in of The very the hard soft winter it’s cycle, sites not keep mind of comes right? those see out. where going to in That’s that year

workdays. fewer have You

traditionally, the months encouraging those weak us PPE those strong us. September really back came and But October. So, for is for really was what are in that fact products

forward. very remains the so we’re to as trends how And on we go a that thing watching one basis. be day-to-day That’s business closely the seen

Richard Eastman

like down revenue, speaking And backlog, XX%. of is tracked mean just think, I Globe’s I

quickly don’t have from ramp backlog how standpoint, pretty So they can manufacturing -- possible chain But supply what a that And the substantial to Is back the I mean of business know up? product. quickly how and turn product. can I time they standpoint, deliver it must manufacturing, a ship?

Nish Vartanian

Yes.

just that down in the the there, there X%. So -- about is backlog business Rick,

we so turnout combine Globe fire And correct, is quarter-over-quarter, gear, Americas what Ken, and for which on a report. look about helmets X% and that we we X%, the

year-over-year down. our That is not bookings. up it’s significant. So What is

Our up very are year-over-year, year-to-date, strong. business and the was very, bookings

is ever more have That onus very to Globe want you backlog color and had the to that? add to out Ken, get is really, the the have with us consistent. on We you some door. that largest we’ve business

Ken Krause

want Yes. clarify. to I just

of firefighter are in is first months that. So globally, year down segment. and the Globe for the much lower apparel the X% XX% about low numbers, the And than down helmets single It’s product Americas the X protective or digits. so

there. performance good Still good there. still And demand seeing so seeing we’re

Some social things feel business. We facility adjust certainly about that. around the the hampering things some in the prepared of of commentary virus production there, good our doing about our to that efficiencies distancing are and but we’re the we COVID aspect talked

Richard Eastman

Okay.

is kind Globe of So digits. high single down

in XX% and currency around this helmets So protective are constant fire helmets down much more. Fire apparel.

Nish Vartanian

more When significantly you International. low talked and what in to back high the helmets significantly, about, -- -- is down firefighter is down more so single those not digits, Globe look down The it’s are down. at Globe we are

there and about a XX% mean apparel business. helmets the I ended issue. release you’re large helmet protective doing Globe That a were months some the there. shipments But globally, lot look so last it’s came much And out better and X didn’t smaller you business press much that than down the at if by is driven recur, seeing firefighter and fire tables, the year. what

Richard Eastman

Okay.

the ‘XX. about -- of the pressures your think restructuring balance Ken, the Okay. in the inflationary comments some offset the you ‘XX. in And actions and into OpEx at around would savings you look then, When business. savings the that in maybe I might presume overhead what be

by a contribute? offset So the restructuring inflate OpEx in still percentage despite you will to few the expect ‘XX that points would

Ken Krause

had when contracts, working look grows, have exactly course, work. into Rick, it When the pays you costs. step itself. we’ve business should The -- in compensation X in year, compensation, the discretionary contracts, next for the performance-related at is if reset reduction, will it as we reduction months performance-related There and first it that year. we a But and had way back go of a of it the

doing that discretionary year. we next so be into everything the And costs business costs, will manage coming The we’re those certainly headwind. to a back can

see of so area in we And of on SG&A, because up only in the restructuring on operations all tick the well. you SG&A doing up as not but a but the resets, side, might a year next bit are a lot

a feel like the assuming we But there forward really resets. up probably tick our thinking and and of because might structure. SG&A of So you’re bit going in improve a opportunity there’s that cost a correct nice in be

Operator

comes Maria from next The Blair. William De question Instructions] [Operator of Larry

Larry De Maria

in guys you talked October. and September better markets Obviously, about

there of International Americas think from moving if kind between grow to it of did that September? flatten And could is split you Just clarify, how of up curious emphasize and well, you towards sequentially in would they’re Or that October now more? out? risk International, kind what you did kind

Nish Vartanian

little So on Larry, you’re question. your a softer

it. understood I think I

So you year to year-over-year October is to when than look ago standpoint, a slightly better at the business, September from date. a October October

better both at September at areas. in was what I’m correct some -- Ken, not this, in Not when in that’s I the looking quite standpoint. a I booking So from business, little we’re than the quite believe International nice because across of fire bounce segments. North segments. a you grants. business A back We the standpoint, little from XXXX stronger back, believe is American bit bounce strong September. both stronger October the a Americas saw And in look at level of segment was the obviously, release of service the an it market across and

add more you Ken, So some is there to color that?

Ken Krause

thing But really business quarter less the year-over-year is and finish to healthy of the run growth growth, it to comparable in pretty the only The that remains little in still clarify I in September. September, a year-over-year robust October. rate robust we want where to third wasn’t had

we’re of economies So that’s certainly we is, all nice resurgence and the it is and challenge -- is all European some of to COVID. What seeing see. a the

keeping we’re business pretty a so is generally, certainly good But on And the October. that. eye close in

Larry De Maria

Okay.

obviously, sustained go with and September, If So right? catch-up it’s it would some the you just catch-up tend caveat change of -- then turn in a business July more being, excess up, beyond in soft think COVID catch but business, just things? you have more to August, do of and a there’s it’s could it’s

Nish Vartanian

-- and to Absolutely. was have that’s business there been And good might that’s in so Larry. closely, September, catch-up we on pickup Yes, your thing part. There speak. some a one watch

part summer, about in early out other work. in quarter we evaluations the second and front of customers get type As was and talked for to the of tough it

up, is encouraging that products and in into through the So business was day-to-day there was What is, and how encouraging business September. what the October. probably October some catch-up on is especially has business PPE held

through fall is is that, gas months it quickly. little have sites. which surprisingly, the the hats and encouraging snap the detection people -- that That was the part protection. through. that back the lower signal to strong with been So of very back a that’s did. were And come for PPE product October and head business job a strongest fall really just work. that coming were sites think, to fall back good products, to are but and protection really fall on at protection, see they us the They reopened, way side, for pretty protection we and the recovered was pace, fact back workers equipping so those reflection people Hard job of I business protection September saw came portable a getting products back

Larry De Maria

they’re talked we about quite as think as XQ number. XX%, XQ. high, not tend increase year-over-year sequentially. But you a we about robust Now XQ, in incrementals how and Obviously, being into right? think if to -- a should XX%, about incrementals sales sequential Usually, we year-over-year to

think -- be Or think the they about might between? in which about are more Or somewhere sequential how historical we they relevant? patterns? should should are maybe So we incremental,

Nish Vartanian

about put point think hard Larry now, fine when right we a the It’s to on outlook. it

or I’m And little because fourth closely they’re for give so be around hesitant quarter. what guidance a expectations Whether so are to our related. volume it incrementals

especially in of just at light same we in Europe going resurgence markets with business, we and And where quarter, But so don’t certainly COVID. of not if look fourth would the know the you’re the through quarter, number I in back the of would hope the at third seeing would are things time, the we I that step some repeat. which challenges came had of a

Larry De Maria

bit Okay. else, maybe there a But discussion Is if the better anything you fourth mix have? high in a or getting A quarter? mix firefighter can big just issue?

Nish Vartanian

No. the of done that nice doesn’t The a improving an big service impact. fire at in products. the have mix We’ve job margins

doesn’t products, of in the of one the so this quarter mix the And slightly significant move certainly year. profitability fourth the a should a maybe impact, on slight or in way fire service, industrial but have significant it in impact a manner lower the other it some

Larry De Maria

of? talking capital a while any the for last Are comments there outlook. valuations Just that little overarching allocate M&A stress bid some advantage I to spreads closer the getting you know have guys a downturn. helpful. bit on be then little Okay. a would you there take Is out question guys in more the And environment been reasonable? can on

Nish Vartanian

of on time. back summer, period shut really And be down up. continue work, to opened continue something a number M&A we obviously, close and have to we active hopeful -type the but Larry, opportunities So, area. this in that now there’s of stay very And was for we work with. would I through it’s a the

those. here back our expansions bolt-ons staying the on product Globe. been of very key the appropriate disciplined. It’s very but just is We’ve We’ve we’re we’ll in -- it so have strategy, successful acquisitions at like near on report some been M&A future. from And key or some area. opportunities. and And bringing I we’re returns our areas we’ve very in those the to the this other into integrated part And with standpoint. way something a an on active with hopefully, successful

run going and our the sheet some after capital doesn’t we’re because just and shape, to so make sugar chase and to mean reward. is use appropriately going opportunities a And high get we’re in balance get out to great that we sure short-term

be We’re disciplined drive approach to and and this going continue our to in through mission organization value our add to acquisition.

Operator

turn question-and-answer This concludes any the over session. like conference I Elyse for to closing to would Lorenzato our back remarks.

Elyse Lorenzato

this behalf morning. On to thank I want us for joining of entire here, our team again you

replay available with We Thank Investor soon. you. audio a website our and the to talking again will missed be call, of you the you portion Relations If on forward conference an XX-days. look transcript next for

Operator

for presentation. you today’s attending has now conference The concluded. Thank

disconnect. may now You

MSA Safety (MSA) 1 Nov 202020 Q3 Earnings call transcript