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, 2022

or

☐ 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	x	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 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,
(In thousands, except per share amounts)	2022		2021
Net sales	$	330,692	$	308,428
Cost of products sold	187,908		173,643
Gross profit	142,784		134,785
Selling, general and administrative	78,551		75,463
Research and development	13,333		13,234
Restructuring charges (Note 3)	2,189		1,308
Currency exchange losses (gains), net	3,271		(2,099)
Product liability expense (Note 18)	2,772		2,796
Operating income	42,668		44,083
Interest expense	3,618		1,911
Other income, net	(6,344)		(4,213)
Total other income, net	(2,726)		(2,302)
Income before income taxes	45,394		46,385
Provision for income taxes (Note 10)	9,852		9,749
Net income	35,542		36,636
Net income attributable to noncontrolling interests	—		(186)
Net income attributable to MSA Safety Incorporated	$	35,542	$	36,450
Earnings per share attributable to MSA Safety Incorporated common shareholders (Note 9):
Basic	$	0.90	$	0.93
Diluted	$	0.90	$	0.92
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.

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)	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, 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,
(In thousands)	2022		2021
Operating Activities
Net income	$	35,542	$	36,636
Depreciation and amortization	14,165		10,504
Stock-based compensation (Note 11)	3,730		3,293
Pension expense (Note 15)	(2,652)		(480)
Deferred income tax benefit (Note 10)	(572)		(586)
Loss on asset dispositions, net	4		19
Pension contributions (Note 15)	(1,914)		(1,923)
Currency exchange losses (gains), net	3,271		(2,099)
Product liability expense (Note 18)	2,772		2,796
Collections on insurance receivables and notes receivable, insurance companies (Note 18)	3,865		1,765
Product liability payments (Note 18)	(1,758)		(7,471)
Changes in:
Trade receivables	13,365		27,784
Inventories (Note 4)	(40,816)		(10,826)
Accounts payable	1,408		532
Other current assets and liabilities	(6,858)		(13,966)
Other noncurrent assets and liabilities	971		(362)
Cash Flow From Operating Activities	24,523		45,616
Investing Activities
Capital expenditures	(7,976)		(9,582)
Acquisition, net of cash acquired (Note 14)	—		(62,992)
Purchase of short-term investments (Note 17)	(19,973)		(44,970)
Proceeds from maturities of short-term investments (Note 17)	29,000		65,000
Property disposals and other investing	—		35
Cash Flow From (Used in) Investing Activities	1,051		(52,509)
Financing Activities
Proceeds from long-term debt (Note 12)	263,000		370,017
Payments on long-term debt (Note 12)	(258,000)		(318,000)
Cash dividends paid	(17,292)		(16,820)
Company stock purchases (Note 7)	(3,659)		(5,348)
Exercise of stock options (Note 7)	51		1,790
Cash Flow (Used In) From Financing Activities	(15,900)		31,639
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(3,361)		(720)
Increase in cash, cash equivalents and restricted cash	6,313		24,026
Beginning cash, cash equivalents and restricted cash	141,438		161,034
Ending cash, cash equivalents and restricted cash	$	147,751	$	185,060
Supplemental cash flow information:
Cash and cash equivalents	$	147,300	$	184,728
Restricted cash included in prepaid expenses and other current assets	451		332
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.

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)	Retained Earnings		Accumulated Other Comprehensive (Loss)		Noncontrolling Interests
Balances December 31, 2020	$	1,103,092	$	(182,397)	$	7,993
Net income	36,636		—		—
Foreign currency translation adjustments	—		(10,223)		—
Pension and post-retirement plan adjustments, net of tax of $1,084	—		3,712		—
Unrecognized net losses on available-for-sale securities (Note 17)	—		(5)		—
Income attributable to noncontrolling interests	(186)		(35)		221
Common dividends	(16,810)		—		—
Preferred dividends ($0.5625 per share)	(10)		—		—
Balances March 31, 2021	$	1,122,722	$	(188,948)	$	8,214
Balances December 31, 2021	$	1,050,214	$	(149,140)	$	—
Net income	35,542		—		—
Foreign currency translation adjustments	—		5,892		—
Pension and post-retirement plan adjustments, net of tax of $1,016	—		2,264		—
Unrecognized net losses on available-for-sale securities (Note 17)	—		(9)		—
Common dividends	(17,282)		—		—
Preferred dividends ($0.5625 per share)	(10)		—		—
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.

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") 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, 2021, Balance Sheets data was derived from the audited Consolidated Balance Sheets, but does not include all disclosures required by accounting principles generally accepted in the United States of America ("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, 2021, which includes all disclosures required by U.S. GAAP.

During the fourth quarter of 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 retrospectively applied to 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 change in accounting principle.

Note 2—Cash and Cash Equivalents

Several of the Company's affiliates participate in a notional cash pooling arrangement to manage global liquidity requirements. As part of a master netting arrangement, the 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 Balance Sheets.

The Company's net cash pool position consisted of the following:

(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 the three months ended March 31, 2021, were primarily related to our ongoing initiatives to drive profitable growth and right size our operations. Americas segment restructuring charges of $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.

-7-

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

(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 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)	March 31, 2022		December 31, 2021
Land	$	5,070	$	5,131
Buildings	138,610		136,272
Machinery and equipment	445,746		435,652
Construction in progress	29,025		36,552
Total	618,451		613,607
Less: accumulated depreciation	(412,456)		(405,814)
Property, plant and equipment, net	$	205,995	$	207,793

-8-

Note 6—Reclassifications Out of Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss were as follows:

	MSA Safety Incorporated				Noncontrolling Interests
	Three Months Ended   March 31,				Three Months Ended   March 31,
(In thousands)	2022		2021		2022		2021
Pension and other post-retirement benefits (a)
Balance at beginning of period	$	(57,296)	$	(115,552)	$	—	$	—
Amounts reclassified from accumulated other comprehensive loss into net income:
Amortization of prior service credit (Note 15)	(48)		(24)		—		—
Recognized net actuarial losses (Note 15)	3,328		4,820		—		—
Tax benefit	(1,016)		(1,084)		—		—
Total amount reclassified from accumulated other comprehensive loss, net of tax, into net income	2,264		3,712		—		—
Balance at end of period	$	(55,032)	$	(111,840)	$	—	$	—
Available-for-sale securities
Balance at beginning of period	$	(5)	$	(1)	$	—	$	—
Unrealized loss on available-for-sale securities (Note 17)	(9)		(5)		—		—
Balance at end of period	$	(14)	$	(6)	$	—	$	—
Foreign currency translation
Balance at beginning of period	$	(91,839)	$	(66,844)	$	—	$	582
Foreign currency translation adjustments	5,892		(10,258)		—		35
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 15—Pensions and Other Post-retirement Benefits).

Note 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, 2022. The Treasury shares at cost line in the unaudited Condensed Consolidated Balance Sheets includes $1.8 million related to preferred stock. There were no treasury purchases of preferred stock shares during both the three months ended March 31, 2022 and 2021. The Company has also authorized 1,000,000 shares of $10 par value second cumulative preferred voting stock. No shares have been issued as of March 31, 2022.

Common Stock - The Company has authorized 180,000,000 shares of no par value common stock. There were 62,081,391 shares issued as of December 31, 2021. No new shares were issued during the three months ended March 31, 2022, or 2021. There were 39,335,816 and 39,276,518 shares outstanding at March 31, 2022 and December 31, 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, no shares were repurchased under this program. There were 22,745,575 and 22,804,873 Treasury Shares at March 31, 2022 and December 31, 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 28,366 and 32,650 Treasury Shares issued for these purposes during the three months ended March 31, 2022 and 2021, respectively.

-9-

Common stock activity is summarized as follows:

	Three Months Ended March 31, 2022				Three Months Ended March 31, 2021
(In thousands)	Common Stock		Treasury Cost		Common Stock		Treasury Cost
Balance at beginning of period	$	260,121	$	(328,776)	$	242,693	$	(326,156)
Stock compensation expense	3,730		—		3,293		—
Restricted and performance stock awards	(1,260)		1,260		(1,333)		1,333
Stock options exercised	36		15		1,234		556
Treasury shares purchased	—		(3,659)		—		(5,348)
Balance at end of period	$	262,627	$	(331,160)	$	245,887	$	(329,615)

Note 8—Segment Information

We are organized into four 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 three 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 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, operating income, as presented on the unaudited Condensed Consolidated 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 statements level. Sales and transfers between operating segments are accounted for at market-based transaction prices and are eliminated in consolidation.

-10-

Reportable segment information is presented in the following table:

(In thousands, except percentage amounts)	Americas			International			Corporate		Consolidated Totals
Three Months Ended March 31, 2022
Sales to external customers	$	225,648		$	105,044		$	—	$	330,692
Operating income									42,668
Restructuring charges (Note 3)									2,189
Currency exchange losses, net									3,271
Product liability expense (Note 18)									2,772
Acquisition related costs(a) (Note 14)									2,943
Adjusted operating income (loss)	52,435			9,024			(7,616)		53,843
Adjusted operating margin %	23.2		%	8.6		%
Depreciation and amortization									11,829
Adjusted EBITDA	60,796			12,362			(7,486)		65,672
Adjusted EBITDA margin %	26.9		%	11.8		%

(In thousands, except percentage amounts)	Americas			International			Corporate		Consolidated Totals
Three Months Ended March 31, 2021
Sales to external customers	$	208,340		$	100,088		$	—	$	308,428
Operating income									44,083
Restructuring charges (Note 3)									1,308
Currency exchange gains, net									(2,099)
Product liability expense (Note 18)									2,796
Acquisition related costs(a)									1,373
Adjusted operating income (loss)	45,195			8,792			(6,526)		47,461
Adjusted operating margin %	21.7		%	8.8		%
Depreciation and amortization									10,504
Adjusted EBITDA	52,229			12,165			(6,429)		57,965
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.

(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.

-11-

Total sales by product group was as follows:

Three Months Ended March 31, 2022	Consolidated			Americas			International
(In thousands, except percentages)	Dollars		Percent	Dollars		Percent	Dollars		Percent
Fixed Gas & Flame Detection (a)	$	83,077	25%	$	54,621	24%	$	28,456	27%
Breathing Apparatus	70,951		22%	50,398		22%	20,553		20%
Firefighter Helmets & Protective Apparel	48,461		15%	33,476		15%	14,985		14%
Portable Gas Detection	36,744		11%	25,791		11%	10,953		10%
Industrial Head Protection	36,157		11%	28,165		13%	7,992		8%
Fall Protection	24,662		7%	16,277		7%	8,385		8%
Other (b)	30,640		9%	16,920		8%	13,720		13%
Total	$	330,692	100%	$	225,648	100%	$	105,044	100%

Three Months Ended March 31, 2021	Consolidated			Americas			International
(In thousands, except percentages)	Dollars		Percent	Dollars		Percent	Dollars		Percent
Breathing Apparatus	$	69,644	23%	$	48,798	23%	$	20,846	21%
Fixed Gas & Flame Detection	60,119		19%	36,277		17%	23,842		24%
Firefighter Helmets & Protective Apparel	46,010		15%	34,988		17%	11,022		11%
Portable Gas Detection	37,429		12%	25,702		12%	11,727		12%
Industrial Head Protection	32,696		11%	25,111		12%	7,585		8%
Fall Protection	26,067		8%	15,672		8%	10,395		10%
Other (b)	36,463		12%	21,792		11%	14,671		14%
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.

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Note 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:	Three Months Ended March 31,
(In thousands, except per share amounts)	2022		2021
Net income	$	35,542	$	36,450
Preferred stock dividends	(10)		(10)
Net income available to common equity	35,532		36,440
Dividends and undistributed earnings allocated to participating securities	(4)		(14)
Net income available to common shareholders	35,528		36,426
Basic weighted-average shares outstanding	39,291		39,094
Stock-based compensation awards	232		326
Diluted weighted-average shares outstanding	39,523		39,420
Antidilutive stock options	—		—
Earnings per share:
Basic	$	0.90	$	0.93
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.

Note 10—Income Taxes

The Company's effective tax rate for the first quarter of 2022 was 21.7% which differs from the United States of America ("U.S.") federal statutory rate of 21% primarily due to state income taxes, partially offset by tax benefits on certain share-based payments. The Company's effective tax rate for the first quarter of 2021 was 21.0%, which is consistent with the U.S. statutory rate of 21% as state income taxes and a one time foreign 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, 2022, the Company had a gross liability for unrecognized tax benefits of $5.0 million. The Company has recognized tax benefits associated with these liabilities of $2.5 million at March 31, 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 $0.9 million at March 31, 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.

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Note 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 7—Capital Stock for further information regarding stock compensation share issuance.

Stock compensation expense is as follows:

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

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

	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, 2022, follows:

	Shares	Weighted Average Grant Date Fair Value
Unvested at January 1, 2022	118,343	$	132.62
Granted	44,153	138.21
Vested	(31,111)	104.75
Forfeited	(2,341)	133.70
Unvested at March 31, 2022	129,044	$	141.23

Performance stock units that have a market condition modifier 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 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") over the performance period. The following weighted average assumptions were used in estimating the fair value of the performance stock units granted for the three months ended March 31, 2022.