MSA Safety (MSA) 2026年第3四半期決算説明会：売上高15%増、業績見通しを維持

主要ポイント

• MSA Safetyが発表した2026年第3四半期の売上高は5億3,600万ドルで、前年同期比15%増となりました。これには6%のオーガニック成長、Autronicaによる8%の寄与、および1%の為替追い風効果が含まれます。
• 調整後希薄化EPSは8%増の2.09ドルに増加しました。調整後営業利益率は70ベーシスポイント低下の21.4%となり、主にAutronicaによる50ベーシスポイントの希薄化効果を反映しています。
• 消防サービス部門のオーガニック売上高は9%増加し、産業用PPEは7%増加しました。検知器部門の売上高は報告ベースで22%増、オーガニックベースで2%増となりました。
• Autronicaは四半期売上高に3,900万ドル寄与しました。この買収により、検知器部門はMSA全事業の約45%を占めるまでに拡大し、当四半期の調整後EPSに対しては中立的でした。
• オーガニック受注は2桁成長を記録し、BBレシオは1を上回りました。コネクテッド製品は現在、ポータブルガス検知器売上高の15%を占めています。
• 経営陣は2026年の見通しとして、2桁台前半の売上高成長および調整後売上総利益率47.5%〜48.5%を維持しました。

主要財務データ

年初来の報告ベース売上高は10%増加し、うちオーガニック成長は4%となりました。調整後営業利益率は90ベーシスポイント拡大し、調整後限界営業利益率は32%となりました。調整後EPSは年初来で17%増加しました。

価格改定および生産性向上措置がインフレと不利益な製品ミックスの影響を完全に相殺し、買収による希薄化前で50ベーシスポイントの粗利益率拡大に寄与しました。GAAP業績は、買収関連の償却費および取引費用の影響を受けました。

事業および営業業績

ディテクション

ディテクション部門の報告ベース売上高は22%増加し、オーガニック売上高は2%増加にとどまりました。携帯型ガス検知機器は堅調だったものの、定置型ガスおよび火炎検知機器は中東の地政学的情勢による圧迫を受け続けました。経営陣は、この紛争によって年初来の全社成長率が約1.5パーセントポイント押し下げられたと試算しています。

コネクテッドデバイスは携帯型ガス検知機器の成長の約半分を牽引し、携帯型製品の売上全体の15%に達しました（前年同期の10%から上昇）。また、MSAは米北東部の大手公益企業からALTAIR io 6コネクテッド携帯型ガス検知器の過去最大規模の受注を獲得しました。

Autronicaの買収により、MSAの対応可能市場（TAM）は30億ドルを超えて拡大しました。経営陣は統合が計画通り進展していると述べており、買収完了後最初の満1年で調整後EPSの増加に寄与すると見込んでいます。

消防部門および産業用PPE

消防部門のオーガニック売上高は9%増加しました。これは米州におけるSCBA（自給式呼吸器）需要とGlobeの防火服が牽引したものです。海外の消防部門の売上高は、M1 SCBAおよび主要な防火服の受注に支えられ、オーガニックベースで2桁成長を記録しました。

9月に発売されたG1 City Edition SCBAは、LUNAR Beacon技術を統合し、FIREGRIDと連携して位置、アラーム状態、空気圧データを提供します。経営陣は初期の顧客フィードバックが好調であるとし、今後の消防関連商談において同製品がMSAの優位性を支えると期待しています。

産業用PPEのオーガニック売上高は7%増加しました。米州での成長には、V-Gard H2 Type 2安全ヘルメットの採用および北米における継続的な産業設備投資が寄与しました。また、防弾用ヘルメットの国際需要も引き続き堅調でした。

地域別業績

米州の売上高は報告ベースで8%増、オーガニックベースで7%増となりました。調整後営業利益率は、主に売上総利益率の拡大により30ベーシスポイント上昇し28.6%となりました。

国際部門の売上高は28%増加しました。これには2%のオーガニック成長とAutronicaによる26パーセンテージポイントの寄与が含まれます。調整後営業利益率は16.1%となり、前年同期比で10ベーシスポイント上昇、前四半期比で60ベーシスポイント上昇しました。

経営陣のガイダンス

MSA Safetyは、2026年通期の2桁台前半の売上高成長見通しを以下の前提に基づき維持しました：

• 1桁台半ばのオーガニック成長
• 買収による1桁台半ばの成長寄与
• 9月時点のレートに基づく1〜2パーセンテージポイントのプラスの為替影響

経営陣は第4四半期のオーガニック成長を消防部門および産業用PPEが牽引すると予想しています。一方、検出器（Detection）部門は、中東紛争の影響および前年同期の大型固定式監視機器出荷による高い前年比較ハードルの圧力に直面しています。

同社は買収関連償却費を除く通期の調整後粗利益率について47.5%〜48.5%との予想を維持しています。また経営陣は、少なくとも年間30〜50ベーシスポイントの営業利益率拡大および30%〜40%の限界利益率という目標を改めて表明しました。。

リスクおよび注視すべき分野

• 中東の地政学情勢が、固定式ガス・火災検知器の売上に引き続き重荷となっています。
• 検知器部門は、前年に複数の大型固定式モニタリングの受注があったことから、第4四半期は前年同期比で厳しい比較に直面しています。
• オートロニカは第3四半期の売上総利益率および営業利益率の希薄化要因となりましたが、経営陣はシナジー効果が2027年から寄与し始めると予想しています。
• 米国の消防士支援助成金（AFG）の資金提供が9月下旬に開始されました。経営陣は、政府の助成金交付期間が12月中旬まで開かれている間に、消防署が注文を完了させる必要があると指摘しました。
• 消防向けおよび産業向け個人用保護具（PPE）が利益率の高い検知器製品よりも売上比率が高くなったため、当四半期の製品ミックスは悪化しました。
• 経営陣は消防市場を競争的であると説明したものの、受注率、価格設定、または競合状況に大きな変化は見られないと述べました。

アナリストQ&Aの主なポイント

経営陣は、約300万ドル相当の2025年助成金による消防向け受注残が当四半期中に米州で完了したと述べました。現在の受注ペースは通常の季節的パターン近くに戻っており、案件パイプラインと受注残高は第4四半期の好調な業績に対する経営陣の予想を裏付けています。

利益率について、経営陣は戦略的価格設定、バリューエンジニアリング、輸送コスト管理、オペレーティングシステムの取り組みを主な回復要因として挙げました。オートロニカのシナジー効果は今後寄与する見込みであり、買収完了後最初の通年で利益増大（アクレティブ）をもたらすと予想されています。

MSAはポートフォリオ全体で買収機会の評価を継続しており、現在は検知器分野に活動がより集中しています。経営陣は、一部の買収候補の価格が同社の許容水準を超えたままであると述べました。

同社は5月に投資家向け説明会を開催し、戦略と中期的財務目標の最新情報を公表する予定です。

決算説明会トランスクリプト全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Good day, and welcome to the MSA Safety Third Quarter 2026 Earnings Conference Call. [Operator Instructions]

Please note this event is being recorded. I'd now like to turn the conference over to Tyler Herzing. .

Tyler Herzing

Thank you. Good morning, and welcome to MSA Safety's Third Quarter 2026 Earnings Conference Call. This is Tyler Herzing, Senior Manager of Investor Relations. I'm joined by Steve Blanco, President and CEO; Julie Beck, Senior Vice President and CFO; and Stephanie Sciullo, President of our Americas segment.

During today's call, we will discuss MSA's Third quarter 2026 financial results and provide an update on our full year 2026 outlook. Before we begin, I'd like to remind everyone that the matters discussed during this call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, all projections and anticipated levels of future performance. Forward-looking statements involve a number of risks, uncertainties and other factors that may cause our actual results to differ materially from those discussed today. These risks, uncertainties and other factors are detailed in our SEC filings. MSA Safety undertakes no duty to publicly update any forward-looking statements made on this call, except as required by law. We have included certain non-GAAP financial measures as part of our discussion this morning. The non-GAAP reconciliations are available in the appendix of today's presentation.

The presentation and press release are available on our Investor Relations website at investors.msasafety.com. Moving on to today's agenda. Steve will first provide an update on the business. Julie will then review our third quarter 2026 financial performance and 2026 outlook. Steve will then provide closing remarks. We will then open the call for your questions. With that, I'll turn the call over to Steve Blanco. Steve?

Steven Blanco

Thanks, Tyler, and good morning, everyone. Again, we appreciate your continued interest in MSA Safety. Before we dive into the results for the third quarter, I'd like to share a recent customer save story that serves as a powerful reminder of why MSA's mission matters. Just last month, a firefighter responding to a residential structure fire in New Hampshire was caught in a flashover event. One of the most dangerous situations at firefighter can face. Despite being exposed to extreme heat and flames, he was able to escape the structure and make it out safely. .

Following the incident, department officials pointed to the performance of their recently issued Globe turnout gear during what they described as a significant thermal event. Stories like this bring MSA's mission of safety to life and there is no better measure of success than helping the firefighter return home safely.

Now moving to Slide 6. Our team delivered strong results, achieving 15% reported sales growth with 6% organic and adjusted earnings per share of $2.09, up 8% from last year. At the same time, we continue to execute on key strategic priorities, including the completion of the Altronic acquisition, which grows our detection sales to approximately 45% of total business as well as the introduction of the G1 City Edition SCBA, which further strengthens our leadership position in the Americas fire service market.

Now looking at sales by product category, Including sales from Altronica, reported sales growth in detection was 22%. Organic deduction sales increased 2% year-over-year with strength in portable gas detection offset by fixed gas and flame detection. Fixed detection growth was impacted by the ongoing geopolitical conditions in the Middle East. Year-to-date, the direct sales impact of the conflict represents about a 1.5 percentage point headwind to overall company growth. In fire service, organic sales increased 9% year-over-year, primarily due to the strength in Americas SCBA and Globe turnout gear. 2026 AFG funding was released in late September -- and as expected, we've seen a more normalized operating environment thus far in the fourth quarter.

In International, EMEA and APAC contributed double-digit organic growth from strong sales of the M1 SCBA and key turnout gear orders. For industrial PPE, our organic growth was 7%. In the Americas, strength was driven by demand tied to the ongoing market adoption of our type 2 safety helmet, the H2 and was supported by continued industrial capital investment across North America. In international, growth in protective ballistic helmets remained robust.

Overall, the third quarter was an excellent example of our ability to deliver strong growth through a diversified product, market and geographic portfolio. Year-over-year, organic orders were up double digits with a book-to-bill above 1 in line with seasonal patterns. Order growth was broad-based across our product categories and included the largest MSAs order to date. Across our portfolio, we continue to benefit from market adoption of higher-value solutions that improve both worker safety and productivity.

Moving to Slide 7. Our third quarter performance reflects continued execution of our Accelerate strategy while strengthening our position for sustained long-term growth. The third quarter marked an important step forward in the evolution of our business with the completion of the Altronica acquisition. Again, Atronica broadens our detection platform expands our addressable market by more than $3 billion and strengthens and enhances our ability to engage customers earlier in the new project life cycle with a more comprehensive solution-led offering. The early stages of integration are progressing well, and the business contributed $39 million of sales in the quarter.

In addition to our investment in inorganic growth, our prioritized investment in voice and customer-driven research and development continues to translate into differentiated innovation. As I mentioned earlier, we recently received our largest MSAs order from a major utility customer in the Northeast United States for our Altair IO6 connected portable gas detector highlighting continued momentum in Connected Safety. Connected devices again represented about half of total portable gas detection sales growth in the quarter and now account for 15% of total portable sales.

Also in September, we launched the new G1 City Edition SCBA. Moving to Slide 8. The city addition is the latest update to our market-leading G1 platform and reflects our continued focus on meeting evolving customer needs. Developed through direct collaboration with fire departments, it translates customer insights into differentiated technology and ergonomics to help protect firefighters. Importantly, the City addition strengthens our leading position in the Americas SCBA market and positions MSA well for future opportunities across North America. At the center of the product is integration of our Lunar Beacon technology directly into the SCBA.

If a firefighter encounters an alarm condition or search and rescue situation, crews using a LUNA device receive information directly from the CBA to help them locate that firefighter more quickly, while FIREGRID provides real-time visibility into critical information such as location, alarm status and air pressure. Together, these advancements create a differentiated connected solution focused on improving situational awareness, safety and accountability.

With that, I'd now like to turn the call over to Julie to walk through the financial results for the third quarter in more detail and our '26 outlook. Julie?

Julie Beck

Thank you, Steve, and good day, everyone. We appreciate you joining the call. As we completed the Atranica acquisition, our third quarter GAAP financial performance was impacted by acquisition and transaction costs. Gross profit was negatively impacted by amortization and SG&A was negatively impacted by transaction costs. These adjustments also impacted operating income, net income and earnings per share. Please refer to the appendix of our earnings presentation for detailed reconciliations.

Starting on Slide 10 with the quarterly financial highlights. Third quarter sales were $536 million, an increase of 15% over the prior year. Sales were up 6% on an organic basis while Altronica added 8% and currency translation was a 1% tailwind. Positive price and volume contributed to organic growth. Year-to-date reported sales growth is 10%, including 4% organic. Adjusted gross margin was 47%, down 20 basis points from the prior year including 70 basis points of dilution from Altronica.

Price and productivity actions fully offset inflationary pressures and unfavorable mix and contributed 50 basis points of margin expansion from the prior year. On a year-to-date basis, adjusted gross margin has increased 140 basis points from the prior year, including Altronica. In the third quarter, we continued to invest in our innovative safety products and solutions with quarterly R&D investment of $20 million, a 20 basis point increase as a percentage of sales, including Altronica. Excluding transaction costs, SG&A increased from the prior year, driven by the inclusion of Autronica, higher variable compensation, commercial investments and inflation. Adjusted operating margin was 21.4%, down 70 basis points from last year, primarily reflecting Autronica dilution of 50 basis points.

Year-to-date, adjusted operating margin is up 90 basis points with an adjusted incremental operating margin of 32%. Adjusted diluted earnings per share were $2.09 and up 8% from last year. Increased organic sales and margin expansion were the primary drivers of earnings per share growth with an additional benefit from share repurchases. Year-to-date, adjusted earnings per share are up 17%. The acquisition was neutral to adjusted EPS in the third quarter, we expect it to be accretive to adjusted EPS in the first full year of ownership. Now I'd like to review our segment performance.

In our Americas segment, sales increased 8% year-over-year on a reported basis, 7% organic. Currency translation added a 1% tailwind to reported growth. We delivered high single-digit organic growth in fire service and industrial PPE, along with mid-single-digit growth in detection. The adjusted operating margin was 28.6%, a 30 basis point increase compared to the previous year. The margin improvement was primarily due to gross profit expansion.

In international, sales increased 28% year-over-year. The organic increase was 2%, while Autronica add 26%. The organic increase reflects double-digit growth in fire service and low single-digit growth in industrial PPE, partially offset by a mid-single-digit organic contraction in detection associated with the ongoing Middle East conflict. Adjusted operating margin was 16.1%, 10 basis points above last year and 60 basis points higher than the second quarter. Margin expansion from a year ago was driven by Atronica. Improvements in the second quarter reflect operating expense leverage.

Now turning to Slide 11. We generated free cash flow of $68 million with strong conversion. lower year-over-year free cash flow primarily reflects costs associated with the Atronica acquisition. Year-to-date, free cash flow is up 14% over last year with conversion of 100% or Free cash flow generation, along with the strong balance sheet position us to continue advancing our Accelerate strategy. We continue to deploy capital in line with our capital allocation priorities, in addition to the Altronica acquisition, we returned $34 million to shareholders through $21 million of dividends and $13 million of share repurchases.

Liquidity was approximately $655 million, and our weighted average interest rate was 4.4% at quarter end. With the acquisition, net debt increased by $534 million sequentially, which includes $50 million of debt repayment in the third quarter post acquisition. Our net leverage at quarter end was 1.7x, below the pro forma estimate of 1.8x we provided at our second quarter earnings call. With net leverage comfortably within our target range we maintain significant balance sheet optionality, providing ample flexibility to pursue our strategic priorities that create long-term shareholder value.

In conjunction with our strong balance sheet, our disciplined capital allocation framework allows us to invest in organic growth initiatives, execute a robust M&A pipeline and consistently return capital to shareholders through share repurchases and dividends.

Let's turn to our 2026 outlook on Slide 12. We are maintaining our outlook of low double-digit revenue growth in 2026, supported by our expectations of mid-single-digit organic growth, a mid-single-digit contribution from acquisitions and 1 to 2 points of favorable translation foreign exchange based on September rates. Our outlook assumes fire service and PPE are drivers of organic growth in the fourth quarter.

In Detection, ongoing dynamics related to the Middle East conflict and an exceptionally strong prior year comparison provide a headwind. If you recall, we had shipped numerous large fixed monitoring orders in the fourth quarter a year ago. We continue to expect full year adjusted gross margin to be in the 47.5% to 48.5% range, which excludes acquisition-related amortization. Our full year below-the-line assumptions remain unchanged.

As we look at the balance of the year, we are positioned to deliver on our full year outlook and finish 2026 with strong fourth quarter performance.

With that, I'd like to pass it back to Steve for closing remarks.

Steven Blanco

Thank you, Julie. I'm on Slide 14. In conclusion, the third quarter was another strong example of our team's disciplined strategic execution. Our continued focus on the priorities that underpin Accelerate is driving growth, strengthening our market positions and positioning MSA to deliver meaningful long-term value to our stakeholders. Our results would not be possible without the dedication of the entire MSA team, and I want to personally thank them for another strong quarter and for their unwavering commitment to serving our singular mission of safety. .

With that, I'll turn the call back over to the operator for Q&A.

Operator

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And our first question comes from Quinn Fredrickson from Baird.

質疑応答

Quinn Fredrickson

Steve, could you unpack the improvement in fire service this quarter? How much reflected conversion of last year's delayed grant funded orders versus stronger underlying department purchasing? And does book-to-bill support a typical seasonal uplift in fourth quarter?

Steven Blanco

Yes, sure. Thanks for the question, Quinn. If you look at fire service, we kind of wrapped up the last of the '25 by and large, I would say total for Americas, roughly $3 million. So overall, just under 2 points, maybe 1.7-ish I'm thinking. And for Americas, about 3% of that growth -- if you look at the overall order pace, AFG grants were issued late again this year, late September. The difference is the government didn't shut down immediately thereafter. So we've got activity that we've already seen processing through. The pipeline remains very strong.

And actually, the order pace to your to your last piece of this question was nice was what we hope to see a more normalized with previous years other than last year. So we're going into the fourth quarter with a nice pipeline, backlog that's supporting what we expect to see, and we expect this to be a good quarter.

Quinn Fredrickson

Great. Second, just any early feedback from customers on the G1 City Edition and do you feel like these added features position you better competitively for some of these larger tenders that are upcoming? Steve, you seem to allude to that in your prepared remarks, but if you could just expand on that a little further, that would be helpful. .

Steven Blanco

Certainly. And the answer is resounding, yes, the feedback in the market has been terrific. We've gotten great -- which we expected because this is, by and large, driven by the feedback we received from firefighters. As you know, that's 1 of our key tenets of our R&D process and how we innovate is understanding challenges that the firefighters and all of our customers share -- and this, we believe, hit the mark of things that they've identified as needs they have.

So the feedback has been strong. We think it positions us nicely in a competitive market to be a leader as we expect to be, and we think we'll compete very well going forward. We're optimistic.

Operator

Our next question comes from Tom Ossano from JPMorgan.

Unknown Analyst

Maybe just on fire service. Given fire service organic growth of 9% plus in Americas, how confident are you in the government funding time line through mid-December. And the SCB replacement cycle accelerate ahead of the 2027 to 2029.

Steven Blanco

Thanks for the question, Tomo. I think if I broke this up into 2 parts and you think of AFG funding, it was late to have it released, but the government is open until mid-December. We do expect many departments, and we've seen that and are really trying to process what they have as opportunities for these grants before any risk comes into play in mid-December. That said, they have to come through and finish the order. And we certainly -- though we have a pipeline, we're cognizant of that and expect that to be 1 of the things we'll work with them on.

But typically, you'll see them try to do that. And we've seen that same kind of activity this year that we have seen in most years when the grant comes through. Again, grant late, but I think we're in a strong position to action that and feel really good about what this looks like going forward, assuming we get the orders as we planned. But fourth quarter should be good. Frankly, it's a softer comp because last year wasn't strong because of the challenges we mentioned. But we feel really good about where we're at with the quarter and how we go forward. And if you go past the quarter, the pipeline continues to fill up with more orders that we think start to represent a little bit of an increase in the market dynamic from the first customers in that period of 2014, 2015. So we'll watch that closely, but line of sight so far tells us that, that should continue to play out that way.

Tomohiko Sano

And just 1 follow-up. As you approach your medium-term financial targets in 2028, especially on the revenue side. Should investors expect an opportunity to get an updated view of the targets and the strategy behind them? And then on the margin side, given electronic integration cost and fire service demand volatility, does your target of the 30 to 50 basis points annual margin expansion still hold? Or how's the time line shifted? .

Steven Blanco

I will -- well, the answer to the second 1 is we definitely will continue to commit to at least 30 to 50 basis points. We've said Atronica will be accretive within the first full year of ownership. On the first point, yes, we absolutely plan to and thanks for that question as well. I would say penciling in May, our expectation to do another investor update -- we believe it's time, and we feel really good about some of the things we'd like to share. .

Operator

[Operator Instructions] And our next question comes from Jeff Van Sinderen from B. Riley.

Jeff Van Sinderen

And just I guess a follow-up on the last question. Can you maybe walk us through how you see the margin recovery materializing what needs to happen to get there?

Steven Blanco

I'll let Julie take the first part of this question on maybe parsing out the margin as it is today, and I'll add any commentary there after.

Julie Beck

So Jeff, I think it's important to remember that so far on a year-to-date basis, we've improved our margins by 140 basis points -- when we talked in Q2, we talked about a step down in from Q2 margin because remember, we had some tariff refund that didn't repeat in Q3. And in this quarter, we actually, from an organic basis improved our operating margins another 50 basis points. So we've been really able to manage with strategic pricing with value-added engineering efforts with chain doing a great job managing transportation costs, our MBS systems working. So we were able to improve those margins by 50 basis points in the organic tariff side.

But we did get impacted by 70 basis points of negative margin impact from Altronica. And Altronica will be accretive as we implement those synergies. So no synergies will come into play, particularly going forward into 2027. And so we also had some unfavorable mix in the third quarter as we had higher fire protection and higher industrial PPE and a little bit lower of our high-technology detection margins. And so some favorable mix and continued efforts and value-added engineering and managing our costs and strategic pricing. We definitely, as Steve said, are confident in our 30 to 50 basis point margin -- operating margin increases as well as our 30% to 40% incremental margin targets.

Steven Blanco

Yes. I think we're in a good place relative to expected continued contribution going forward on the margins. Obviously, we knew Atronica would be when we bought it, we knew it would be a challenge initially, but we've got a really good plan in place. I was just over there in September with some of the other leaders, by the way. And that team is outstanding and are well aligned on what needs to happen going forward and on expectations. So I think we're in a good place. we're right on time relative to that acquisition integration.

Operator

Our next question comes from Brian Brophy from Stifel. .

Unknown Analyst

This is Quinton on for Brian. Just a quick question on the M&A pipeline. Can you kind of give an update there and what priorities you have within that? Any color there would be appreciated.

Steven Blanco

So we continue to have a nice pipeline of activity. I would say that there's a few we've looked at and we'll continue to look at. They're probably priced a little higher than we're interested in today. I think we'll see how that changes over time. As Julie said in her prepared remarks, we've got ample liquidity to continue to take actions. -- and we are looking at things across the portfolio. I would say there's more in the portfolio as we've referenced before in detection. But again, we're looking across the portfolio to make sure it adds value for the long term of the business. and can be accretive to our growth profile. So I think we're in a good place there. We're still active.

Unknown Analyst

Perfect. And 1 more, if I can add 1 more. What are kind of your latest thoughts on just the lineup of connected products and kind of what you're expecting there? That would be very helpful.

Steven Blanco

I think our IO 6 has really hit the mark. We're very pleased with the customer acceptance and energy around that. We referenced and we had a nice release related to our largest order ever that we've had on MSAs. And I would expect that's going to continue. What we've seen is this IO6 coupled with the IO4 has really energized that piece of the market. We're up to about 15% of total portable sales. So it's growing. I think it was 10% a year ago and 14% sequentially. So we expect that momentum to continue, and the pipeline continues to be really, really robust there.

So the prospects inside portables are very strong and inside of that connected work to your reference.

Operator

The next question comes from Steve Volkmann from Devis.

Unknown Analyst

I'm sorry, I joined a little bit late, so if this has been covered -- Is this being covered, just let me know. But I'm curious on the fire service side, have you seen any shifts in sort of win rates or pricing or anything with the Scott Safety spinout or the Drager. I think they have some new distribution agreements. Just anything good or bad happening there that we should know about?

Steven Blanco

It's a competitive market, Steve. We expect it to remain competitive. We haven't seen anything that lessens that competitive environment to date. But 1 of the things that we had planned for, and obviously, we just announced with the City Edition. And that timing was obviously very strategic on our part as we get rolling into here, and we think that you're going to start seeing the uptick in the fire service market. But I think the environment is pretty consistent.

I wouldn't say anything's changed dynamically or significantly that worries us or, frankly, concerns where we're at in this market. And with now, I think, the optionality that we've afforded the market with the addition of the City Dish, and I think we're in a really good place to compete.

Unknown Analyst

Okay. Good. Good to hear. And then just on the Atronica dilution, -- sorry if I missed this, but is there a time frame sort of when you think you recapture that?

Steven Blanco

First full year. You'll start seeing that will be accretive.

Operator

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

Tyler Herzing

Thank you. Good morning -- we appreciate you joining the call this morning and for your continued interest in MSA Safety. If you missed the portion of today's call, an audio replay will be made available later today on our Investor Relations website and will be available for the next 90 days. We look forward to updating you on our continued progress again next quarter.

Operator

Conference has now concluded. Thank you for attending today's presentation. You may now disconnect.