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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, 2023
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 1-15579
 https://cdn.kscope.io/b566c831215bd813f9bcf9f9c9bb3e15-image0a02a16.jpg
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: (724776-8600
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 FilerxAccelerated 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 classTrading Symbol(s)Name of each exchange on which is registered
Common Stock, no par valueMSANew York Stock Exchange
As of April 21, 2023, 39,267,074 shares of common stock, of the registrant were outstanding.


Table of Contents
Item No.Page
Part I
1.
2.
3.
4.
Part II
2.
6.


Table of Contents
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
MSA SAFETY INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
 Three Months Ended March 31,
(In thousands, except per share values)20232022
Net sales$398,262 $330,692 
Cost of products sold216,864 187,908 
Gross profit181,398 142,784 
Selling, general and administrative91,091 78,551 
Research and development15,232 13,333 
Restructuring charges (Note 3)1,747 2,189 
Currency exchange losses, net4,175 3,271 
Loss on divestiture of MSA LLC (Note 17)129,211  
Product liability expense (Note 17)3 2,772 
Operating (loss) income(60,061)42,668 
Interest expense11,476 3,618 
Other income, net(3,800)(6,344)
Total other expense (income), net7,676 (2,726)
(Loss) income before income taxes(67,737)45,394 
Provision for income taxes (Note 10)82,436 9,852 
Net (loss) income$(150,173)$35,542 
(Loss) earnings per share attributable to common shareholders (Note 9):
       Basic$(3.83)$0.90 
Diluted$(3.83)$0.90 
Dividends per common share$0.46 $0.44 

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
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MSA SAFETY INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
Unaudited
 Three Months Ended March 31,
(In thousands)20232022
Net (loss) income$(150,173)$35,542 
Other comprehensive gains, net of tax:
Foreign currency translation adjustments (Note 6)11,194 5,892 
Pension and post-retirement plan actuarial gains, net of tax (Note 6)439 2,264 
Unrealized gains (losses) on available-for-sale securities (Note 6)2 (9)
Total other comprehensive gains, net of tax11,635 8,147 
Comprehensive (loss) income $(138,538)$43,689 

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
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MSA SAFETY INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited 
(In thousands)March 31, 2023December 31, 2022
Assets
Cash and cash equivalents$138,906 $162,902 
Trade receivables, less allowance for credit loss of $6,901 and $6,769
279,707 297,028 
Inventories (Note 4)349,436 338,316 
Investments, short-term (Note 16) 9,905 
Prepaid income taxes24,881 21,700 
Notes receivable, insurance companies (Note 17) 5,931 
Prepaid expenses and other current assets 38,367 44,344 
Total current assets
831,297 880,126 
Property, plant and equipment, net (Note 5)207,115 207,552 
Operating lease right-of-use assets, net43,541 44,142 
Prepaid pension cost (Note 14)144,876 141,643 
Deferred tax assets (Note 10)26,383 25,490 
Goodwill (Note 13)623,443 620,622 
Intangible assets, net (Note 13)278,359 281,853 
Notes receivable, insurance companies (Note 17) 38,695 
Insurance receivables (Note 17) and other noncurrent assets24,656 136,853 
Total assets
$2,179,670 $2,376,976 
Liabilities
Notes payable and current portion of long-term debt (Note 12)$32,534 $7,387 
Accounts payable106,225 112,532 
Employees’ compensation33,104 45,077 
Insurance and product liability (Note 17)9,911 73,898 
Income taxes payable (Note 10)17,692 6,149 
Accrued restructuring (Note 3) and other current liabilities93,065 100,822 
Total current liabilities
292,531 345,865 
Long-term debt, net (Note 12)837,114 565,445 
Pensions and other employee benefits (Note 14) 139,065 137,810 
Noncurrent operating lease liabilities34,583 35,345 
Deferred tax liabilities (Note 10)102,532 31,881 
Product liability (Note 17) and other noncurrent liabilities4,099 336,889 
Total liabilities
$1,409,924 $1,453,235 
Equity
Preferred stock, 4.5% cumulative, $50 par value (Note 7)
$3,569 $3,569 
Common stock, no par value (Note 7)
287,009 281,980 
Treasury shares, at cost (Note 7)(363,879)(361,438)
Accumulated other comprehensive loss (Note 6)(147,082)(158,717)
Retained earnings990,129 1,158,347 
Total shareholders’ equity
769,746 923,741 
Total liabilities and shareholders’ equity
$2,179,670 $2,376,976 
    

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
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MSA SAFETY INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
 Three Months Ended March 31,
(In thousands)20232022
Operating Activities
Net (loss) income$(150,173)$35,542 
Depreciation and amortization14,572 14,165 
Tax-effected loss on divestiture of MSA LLC (Note 17)199,578  
Stock-based compensation (Note 11)6,270 3,730 
Pension income (Note 14)(2,020)(2,652)
Deferred income tax benefit (Note 10)(237)(572)
Loss on asset dispositions, net739 4 
Pension contributions (Note 14)(2,046)(1,914)
Currency exchange losses, net4,175 3,271 
Product liability expense (Note 17)3 2,772 
Collections on insurance receivables and notes receivable,
insurance companies (Note 17)
 3,865 
Product liability payments (Note 17)(5,250)(1,758)
Contribution on divestiture of MSA LLC (Note 17)(341,186) 
Changes in:
     Trade receivables21,662 13,365 
     Inventories (Note 4)(7,404)(40,816)
Accounts payable(7,320)1,408 
Other current assets and liabilities(18,041)(6,858)
     Other noncurrent assets and liabilities769 971 
Cash Flow (Used in) From Operating Activities(285,909)24,523 
Investing Activities
Capital expenditures(8,402)(7,976)
Proceeds from maturities of short-term investments (Note 16) 29,000 
Purchase of short-term investments (Note 16) (19,973)
Property disposals and other investing35  
Cash Flow (Used in) From Investing Activities(8,367)1,051 
Financing Activities
Proceeds from long-term debt (Note 12)801,000 263,000 
Payments on long-term debt (Note 12)(505,588)(258,000)
Debt issuance costs(913) 
Cash dividends paid(18,045)(17,292)
Company stock purchases (Note 7)(3,687)(3,659)
Exercise of stock options (Note 7)4 51 
Cash Flow From (Used in) Financing Activities272,771 (15,900)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(2,287)(3,361)
(Decrease) increase in cash, cash equivalents and restricted cash(23,792)6,313 
Beginning cash, cash equivalents and restricted cash164,428 141,438 
Ending cash, cash equivalents and restricted cash$140,636 $147,751 
Supplemental cash flow information:
Cash and cash equivalents$138,906 $147,300 
Restricted cash included in prepaid expenses and other current assets1,730 451 
Total cash, cash equivalents and restricted cash$140,636 $147,751 

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
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MSA SAFETY INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN RETAINED EARNINGS
AND ACCUMULATED OTHER COMPREHENSIVE LOSS
Unaudited
(In thousands, except per share values)Retained
Earnings
Accumulated
Other
Comprehensive
(Loss)
Balances December 31, 2021$1,050,214 $(149,140)
Net income35,542 — 
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 16)— (9)
Common dividends ($0.44 per share)
(17,282)— 
Preferred dividends ($0.5625 per share)
(10)— 
Balances March 31, 2022$1,068,464 $(140,993)
Balances December 31, 2022$1,158,347 $(158,717)
Net loss(150,173)— 
Foreign currency translation adjustments— 11,194 
Pension and post-retirement plan adjustments, net of tax of $278
— 439 
Unrecognized net gains on available-for-sale securities (Note 16)— 2 
Common dividends ($0.46 per share)
(18,035)— 
Preferred dividends ($0.5625 per share)
(10)— 
Balances March 31, 2023$990,129 $(147,082)

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
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Table of Contents
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, 2022, Balance Sheet data was derived from the audited Consolidated Balance Sheet, 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, 2022, which includes all disclosures required by U.S. GAAP.
Note 2—Cash and Cash Equivalents
Several of the Company's subsidiaries 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, 2023
Gross cash pool position$71,897 
Less: cash pool borrowings(68,198)
Net cash pool position$3,699 
Note 3—Restructuring Charges
During the three months ended March 31, 2023, we recorded restructuring charges of $1.7 million. Americas segment restructuring charges of $1.4 million during the three months ended March 31, 2023, were related to manufacturing footprint optimization activities. Corporate segment restructuring charges of $0.6 million during the three months ended March 31, 2023 were primarily related to various optimization activities.
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.
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Restructuring reserves are included in Accrued restructuring and other current liabilities in the accompanying unaudited Condensed Consolidated Balance Sheets. Activity and reserve balances for restructuring by segment were as follows:
(In millions)AmericasInternationalCorporateTotal
Reserve balances at December 31, 2021$3.3 $17.4 $0.3 $21.0 
Restructuring charges2.3 5.1 0.6 8.0 
Currency translation0.1 (1.3) (1.2)
Cash payments / utilization (4.0)(8.4)(0.4)(12.8)
Reserve balances at December 31, 2022$1.7 $12.8 $0.5 $15.0 
Restructuring charges (adjustments)1.4 (0.3)0.6 1.7 
Currency translation 0.2  0.2 
Cash payments(2.0)(2.7)(0.7)(5.4)
Reserve balances at March 31, 2023$1.1 $10.0 $0.4 $11.5 
Note 4—Inventories
The following table sets forth the components of inventory:
(In thousands)March 31, 2023December 31, 2022
Finished products$97,360 $97,142 
Work in process22,141 16,360 
Raw materials and supplies229,935 224,814 
Total inventories$349,436 $338,316 
Note 5—Property, Plant and Equipment
The following table sets forth the components of property, plant and equipment, net:
(In thousands)March 31, 2023December 31, 2022
Land$4,932 $4,884 
Buildings140,155 138,618 
Machinery and equipment475,707 466,394 
Construction in progress21,107 22,097 
Total641,901 631,993 
Less: accumulated depreciation(434,786)(424,441)
Property, plant and equipment, net$207,115 $207,552 

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Note 6—Reclassifications Out of Accumulated Other Comprehensive Loss
Changes in accumulated other comprehensive loss were as follows:
Three Months Ended  
March 31,
(In thousands)20232022
Pension and other post-retirement benefits (a)
Balance at beginning of period$(50,335)$(57,296)
Amounts reclassified from accumulated other comprehensive loss into net (loss) income:
Amortization of prior service credit (Note 14)(24)(48)
Recognized net actuarial losses (Note 14)185 3,328 
Tax expense (benefit)278 (1,016)
Total amount reclassified from accumulated other comprehensive loss, net of tax, into net (loss) income439 2,264 
Balance at end of period$(49,896)$(55,032)
Available-for-sale securities
Balance at beginning of period$(2)$(5)
Unrealized net gains (losses) on available-for-sale securities (Note 16)2 (9)
Balance at end of period$ $(14)
Foreign currency translation
Balance at beginning of period$(108,380)$(91,839)
Foreign currency translation adjustments11,194 5,892 
Balance at end of period$(97,186)$(85,947)
(a) Reclassifications out of accumulated other comprehensive loss and into net (loss) income are included in the computation of net periodic pension and other post-retirement benefit costs (refer to Note 14—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 both March 31, 2023 and December 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 shares of preferred stock purchased and subsequently held in treasury during the three months ended March 31, 2023, or 2022. 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, 2023, or December 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 March 31, 2023, and December 31, 2022. No new shares were issued during the three months ended March 31, 2023, or 2022. There were 39,264,779 and 39,213,064 shares outstanding at March 31, 2023, and December 31, 2022, respectively.
Treasury Shares - The Company's stock repurchase program authorizes up to $100.0 million to repurchase MSA common stock in the open market and in private transactions. The stock 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, 2023, and 2022, no shares were repurchased under this program. There were 22,816,612 and 22,868,327 Treasury shares at March 31, 2023, and December 31, 2022, respectively.
The Company issues Treasury shares for all stock-based benefit plans. Shares are issued from Treasury at the average Treasury share cost on the date of the transaction. There were 26,774 and 28,366 Treasury shares issued for these purposes during the three months ended March 31, 2023, and 2022, respectively.
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Common stock activity is summarized as follows:
Three Months Ended March 31, 2023Three Months Ended March 31, 2022
(In thousands)Common
Stock
Treasury
Cost
Common
Stock
Treasury
Cost
Balance at beginning of period$281,980 $(359,838)$260,121 $(328,776)
Stock compensation expense6,270  3,730  
Restricted and performance stock awards(1,244)1,244 (1,260)1,260 
Stock options exercised3 1 36 15 
Treasury shares purchased for stock compensation programs (3,687) (3,659)
Balance at end of period$287,009 $(362,280)$262,627 $(331,160)
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, and Asia Pacific. 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 in 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 segment based primarily on the country 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 (loss) excluding restructuring charges, currency exchange (gains) losses, product liability expense, loss on divestiture of MSA LLC, transaction costs and acquisition-related amortization. Adjusted operating margin is defined as adjusted operating income (loss) divided by segment net sales to external customers. Adjusted EBITDA is defined as adjusted operating income (loss) plus depreciation and amortization. Adjusted EBITDA margin is defined as adjusted EBITDA divided by segment net sales to external customers.
The accounting principles applied at the operating segment level in determining operating income (loss) are generally the same as those applied at the unaudited condensed consolidated financial statement level. Sales and transfers between operating segments are accounted for at market-based transaction prices and are eliminated in consolidation.
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Reportable segment information is presented in the following table:
(In thousands, except percentages)AmericasInternationalCorporateConsolidated
Totals
Three Months Ended March 31, 2023
Net sales to external customers$280,267 $117,995 $ $398,262 
Operating loss(60,061)
Restructuring charges (Note 3)1,747 
Currency exchange losses, net4,175 
Loss on divestiture of MSA LLC (Note 17)129,211 
Product liability expense (Note 17)3 
Amortization of acquisition-related intangible assets2,305 
Adjusted operating income (loss)71,694 15,779 (10,093)77,380 
Adjusted operating margin %25.6 %13.4 %
Depreciation and amortization12,267 
Adjusted EBITDA80,494 19,058 (9,905)89,647 
Adjusted EBITDA margin %28.7 %16.2 %
Three Months Ended March 31, 2022
Net sales to external customers$225,648 $105,044 $ $330,692 
Operating income42,668 
Restructuring charges (Note 3)2,189 
Currency exchange losses, net3,271 
Product liability expense (Note 17)2,772 
Amortization of acquisition-related intangible assets2,336 
Transaction costs(a)
607 
Adjusted operating income (loss)52,435 9,024 (7,616)53,843 
Adjusted operating margin %23.2 %8.6 %
Depreciation and amortization11,829 
Adjusted EBITDA60,796 12,362 (7,486)65,672 
Adjusted EBITDA margin %26.9 %11.8 %
(a) Transaction costs include advisory, legal, accounting, valuation, and other professional or consulting fees incurred during acquisitions and divestitures. These costs are included in Selling, general and administrative expense in the unaudited Condensed Consolidated Statements of Operations.
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Total sales by product group was as follows:
Three Months Ended March 31, 2023ConsolidatedAmericasInternational
(In thousands, except percentages)DollarsPercentDollarsPercentDollarsPercent
Fixed Gas & Flame Detection$93,635 24%$61,143 22%$32,492 28%
Breathing Apparatus76,721 19%52,769 19%23,952 20%
Firefighter Helmets & Protective Apparel62,667 16%49,287 18%13,380 11%
Portable Gas Detection52,966 13%38,168 14%14,798 13%
Industrial Head Protection42,907 11%33,625 12%9,282 8%
Fall Protection31,157 8%20,458 7%10,699 9%
Other38,209 9%24,817 8%13,392 11%
Total$398,262 100%$280,267 100%$117,995 100%
Three Months Ended March 31, 2022ConsolidatedAmericasInternational
(In thousands, except percentages)DollarsPercentDollarsPercentDollarsPercent
Fixed Gas & Flame Detection$83,077 25%$54,621 24%$28,456 27%
Breathing Apparatus70,951 22%50,398 22%20,553 20%
Firefighter Helmets & Protective Apparel48,461 15%33,476 15%14,985 14%
Portable Gas Detection36,744 11%25,791 11%10,953 10%
Industrial Head Protection36,157 11%28,165 13%7,992 8%
Fall Protection24,662 7%16,277 7%8,385 8%
Other30,640 9%16,920 8%13,720 13%
Total$330,692 100%$225,648 100%$105,044 100%
Note 9—(Loss) Earnings per Share
Basic (loss) earnings per share is computed by dividing net income, after the deduction of preferred stock dividends and undistributed earnings allocated to participating securities, by the weighted average number of common shares outstanding during the period. Diluted (loss) earnings per share assumes the issuance of common stock for all potentially dilutive share equivalents outstanding not classified as participating securities. Participating securities are defined as unvested stock-based compensation awards that contain nonforfeitable rights to dividends.
Three Months Ended March 31,
(In thousands, except per share values)20232022
Net (loss) income$(150,173)$35,542 
Preferred stock dividends(10)(10)
Net (loss) income available to common equity(150,183)35,532 
Dividends and undistributed earnings allocated to participating securities (4)
Net (loss) income available to common shareholders(150,183)35,528 
Basic weighted-average shares outstanding39,224 39,291 
Stock-based compensation awards (a)
 232 
Diluted weighted-average shares outstanding39,224 39,523 
Antidilutive shares180  
(Loss) earnings per share:
Basic$(3.83)$0.90 
Diluted$(3.83)$0.90 
(a) During periods in which the Company incurs a net loss, stock-based compensation awards are excluded from the computation of diluted earnings per share because their effect would be anti-dilutive. As such, during periods in which the Company incurs a net loss, diluted weighted average shares outstanding are equivalent to basic weighted average shares outstanding.
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Note 10—Income Taxes
The Company's effective tax rate for the three months ended March 31, 2023, was (121.7)%, which differs from the United States of America ("U.S.") federal statutory rate of 21% primarily due to the divestiture of MSA LLC and the non-deductible loss recorded on the derecognition of the product liability reserves and related assets. Refer to Note 17—Contingencies to the unaudited condensed consolidated financial statements in Part I Item 1 of this Form 10-Q for further information on this transaction. The Company's effective tax rate for the three months ended March 31, 2022, was 21.7%, which differs from the U.S. federal statutory rate of 21% primarily due to state income taxes partially offset by tax benefits on certain share-based payments.
At March 31, 2023, the Company had a gross liability for unrecognized tax benefits of $3.4 million. The Company has recognized tax benefits associated with these liabilities of $1.8 million at March 31, 2023. The gross liability includes amounts associated with foreign tax exposure in prior periods.

The Company recognizes interest and penalties related to unrecognized tax benefits in interest expense and operating expenses, respectively. The Company's liability for accrued interest related to uncertain tax positions was $0.3 million at March 31, 2023.
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.
Note 11—Stock Plans
The 2016 Management Equity Incentive Plan provides for various forms of stock-based compensation for eligible employees through May 2026 including 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.
Stock compensation expense, included in Selling, general and administrative expense in the unaudited Condensed Consolidated Statements of Operations, is as follows:
 Three Months Ended March 31,
(In thousands)20232022
Stock compensation expense$6,270 $3,730 
Income tax benefit1,536 914 
Stock compensation expense, net of tax$4,734 $2,816 
We have not capitalized any stock-based compensation expense.
A summary of stock option activity for the three months ended March 31, 2023, is as follows:
SharesWeighted Average
Exercise Price
Outstanding at January 1, 202358,156 $46.48 
Exercised(76)48.41 
Outstanding and exercisable at March 31, 202358,080 $46.47 

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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, 2023, is as follows:
SharesWeighted Average
Grant Date Fair Value
Unvested at January 1, 2023145,886 $137.36 
Granted52,883 133.72 
Vested(26,763)126.16 
Forfeited(1,744)136.41 
Unvested at March 31, 2023170,262 $138.20 
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 2023 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, 2023.
Fair value per unit$131.46
Risk-free interest rate4.4%
Expected dividend yield1.43%
Expected volatility36.7%
MSA stock beta0.739
The risk-free interest rate is based on the U.S. Treasury Constant Maturity rates as of the grant date converted into an implied spot rate yield curve. Expected dividend yield is based on the most recent annualized dividend divided by the one year average closing share price. Expected volatility is based on the three year historical volatility preceding the grant date using daily stock prices. Expected life is based on historical stock option exercise data.
A summary of performance stock unit activity for the three months ended March 31, 2023, is as follows:
SharesWeighted Average
Grant Date Fair Value
Unvested at January 1, 2023178,760 $146.28 
Granted75,425 131.46 
Performance adjustments(a)
(3,009)127.40 
Vested(53,407)127.36 
Forfeited(796)139.27 
Unvested at March 31, 2023196,973 $146.05 
(a)Performance adjustments relate primarily to the final number of shares issued for the 2020 performance unit awards which vested in the first quarter of 2023 at 94.9% of the target award based on both cumulative performance against EBITDA margin and revenue growth targets and MSA's TSR during the three-year performance period.
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Note 12—Long-Term Debt
(In thousands)March 31, 2023December 31, 2022
2016 Senior Notes payable through 2031, 3.40%, net of debt issuance costs
$60,167 $66,379 
2021 Senior Notes payable through 2036, 2.69%, net of debt issuance costs
99,717 99,711 
2021 Senior Notes payable through 2036, 2.69%, net of debt issuance costs
99,717 99,711 
2023 Term Loan credit agreement maturing in 2026, net of debt issuance costs249,145  
Senior revolving credit facility maturing in 2026, net of debt issuance costs360,902 307,031 
Total869,648 572,832 
Amounts due within one year32,534 7,387 
Long-term debt, net of debt issuance costs$837,114 $565,445 
On May 24, 2021, the Company entered into a Fourth Amended and Restated Credit Agreement (the “Revolving Credit Facility" or "Facility”) that extended its term through May 24, 2026 and increased the capacity to $900.0 million. Under the amended agreement, the Company may elect either a Base rate of interest (“BASE”) or an interest rate based on the London Interbank Offered Rate (“LIBOR”). The BASE is a daily fluctuating per annum rate equal to the highest of (i) 0.00%, (ii) the Prime Rate, (iii) the Federal Funds Open Rate plus one half of one percent (0.5%), (iv) the Overnight Bank Funding Rate, plus one half of one percent (0.5%), or (v) the Daily LIBOR Rate plus one percent (1.00%). The Company pays a credit spread of 0 to 175 basis points based on the Company’s net EBITDA leverage ratio and elected rate (BASE or LIBOR). The Company has a weighted average revolver interest rate of 5.74% as of March 31, 2023. At March 31, 2023, $536.1 million of the existing $900.0 million Revolving Credit Facility was unused, including letters of credit issued under the Facility. The Facility also provides an accordion feature that allows the Company to access an additional $400.0 million of capacity pending approval by MSA’s board of directors and from the bank group.
On July 1, 2021, the Company entered into a Third Amended and Restated Multi-Currency Note Purchase and Private Shelf Agreement (the “Prudential Note Agreement”) with PGIM, Inc. (“Prudential”). The Prudential Note Agreement provided for (i) the issuance of $100.0 million of 2.69% Series C Senior Notes due July 1, 2036 and (ii) the establishment of an uncommitted note issuance facility whereby the Company may request, subject to Prudential’s acceptance in its sole discretion, the issuance of up to $335.0 million aggregate principal amount of senior unsecured notes. As of March 31, 2023, the Company has outstanding £48.8 million (approximately $60.3 million at March 31, 2023) of 3.4% Series B Senior Notes due January 22, 2031. Remaining maturities of this note are £6.1 million (approximately $7.5 million at March 31, 2023) due January 22, 2024, with annual maturities of £6.1 million through January 2031.
On July 1, 2021, the Company entered into a Second Amended and Restated Master Note Facility (the “NYL Note Facility”) with NYL Investors. The NYL Note Facility provided for (i) the issuance of $100.0 million of 2.69% Series A Senior Notes due July 1, 2036, and (ii) the establishment of an uncommitted note issuance facility whereby the Company may request, subject to NYL Investors’ acceptance in its sole discretion, the issuance of up to $200.0 million aggregate principal amount of senior unsecured notes.
The Revolving Credit Facility, Prudential Note Agreement and NYL Note Facility require the Company to comply with specified financial covenants, including a requirement to maintain a minimum fixed charges coverage ratio of not less than 1.50 to 1.00 and a consolidated leverage ratio not to exceed 3.50 to 1.00; except during an acquisition period, defined as four consecutive fiscal quarters beginning with the quarter of acquisition, in which case the consolidated net leverage ratio shall not exceed 4.00 to 1.00; in each case calculated on the basis of the trailing four fiscal quarters. In addition, the agreements contain negative covenants limiting the ability of the Company and its subsidiaries to incur additional indebtedness or issue guarantees, create or incur liens, make loans and investments, make acquisitions, transfer or sell assets, enter into transactions with affiliated parties, make changes in its organizational documents that are materially adverse to lenders or modify the nature of the Company's or its subsidiaries' business. All credit facilities exclude Mine Safety Appliances Company, LLC prior to the divestiture of this subsidiary on January 5, 2023, as discussed further in Note 17.
During August 2021, the Company amended its Revolving Credit Facility to transition from Sterling LIBOR reference rates to Sterling Overnight Interbank Average Rate ("SONIA") reference rates. The Company will apply the optional expedients in ASC 848, Reference Rate Reform, to this modification and potential future modifications driven by reference rate reform, accounting for the modifications as a continuation of the existing contracts. Therefore, these modifications will not require remeasurement at the modification date or a reassessment of previous accounting determinations. As such, the Company does not anticipate the change in reference rates will have an impact on the Company’s unaudited condensed consolidated financial statements. Management continues to evaluate the Company’s other outstanding U.S. LIBOR based contracts to determine whether reference rate modifications are necessary.
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On January 5, 2023, the Company entered into a new $250 million term loan facility to fund the divestiture of MSA LLC, a wholly owned subsidiary. Under the agreement, the Company may elect either BASE or an interest rate based on the Secured Overnight Financing Rate. The Company pays a credit spread of 0 to 200 basis points based on the Company's net EBITDA leverage ratio and elected rate. The Company had a Term Loan interest rate of