MSA Safety Incorporated (NYSE:MSA) Q4 2022 Earnings Call Transcript

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Larry De Maria: Okay. Thanks, Nish. And then within a mid single-digit growth outlook for 2023, but you’ve mentioned a couple of times obviously some concern on the second half macro, but obviously also some resiliency there. How do we think about first half or second half and apply that to the mid single-digit growth? Should we have close to maybe double-digit growth in the first half and flatter growth in the second half and see what happens, or how are we kind of breaking that down first half second half?

Nish Vartanian: So I’ll let Lee take that for us.

Lee McChesney: All right. So Larry, it’s a good question. Certainly, we have more visibility to the first half than we do the second half. So I’d guide you to — we’re probably going to be in the more positive side of that mid single-digit in the first half of the year. And then, if you just take the math with the less outlook visibility for the second half, it could be lower. But to Nish’s points earlier, we’re going to have to see how that plays out. There is an element of price that’s out there, but there’s also an element of volume. So based on the mid single-digit guide, again, I’d guide a little bit higher in the first half than the second half. And we’ll just have to see how the first half plays out here, but we’re optimistic.

Larry De Maria: Yeah. That’s fair enough and that’s exactly what I was wondering. Thank you for that. The second part of the question and the last one would be around incremental margins in 2023. Are we in the 30% to 40% normal range or are there some weird things in there?

Nish Vartanian: No, I think that 30% to 40% which is what we’ve committed to, we still see that opportunity in 2023. Certainly, we’ve covered below OM you’ve got some of those temporary headwinds mix like the interest and stuff like that. But no we — as you saw really strong incrementals and a lot of those dynamics whether it’s the price/cost dynamic, whether it’s this mix we have into North America I mean these are all positive things that should continue certainly in the first half of 2023 as well.

Larry De Maria: Okay. Thank you and good luck everybody.

Nish Vartanian: Thank you.

Operator: Ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to Chris Hepler for any closing remarks.

Chris Hepler: Thank you. 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 appreciate you joining us this morning and we look forward to speaking with you again soon. Thanks.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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