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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, 2021
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: (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 23, 2021, 39,167,315 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)20212020
Net sales$308,428 $341,145 
Cost of products sold173,688 183,786 
Gross profit134,740 157,359 
Selling, general and administrative75,463 80,237 
Research and development13,234 14,112 
Restructuring charges (Note 3)1,308 2,007 
Currency exchange (gains) losses, net (Note 5)(2,099)270 
Product liability expense (Note 17)2,796 1,951 
Operating income44,038 58,782 
Interest expense1,911 3,144 
Other income, net(4,213)(1,259)
Total other (income) expense, net(2,302)1,885 
Income before income taxes46,340 56,897 
Provision for income taxes (Note 9)9,740 13,095 
Net income36,600 43,802 
Net income attributable to noncontrolling interests(186)(128)
Net income attributable to MSA Safety Incorporated$36,414 $43,674 
Earnings per share attributable to MSA Safety Incorporated common shareholders (Note 8):
       Basic$0.93 $1.12 
Diluted$0.92 $1.11 
Dividends per common share$0.43 $0.42 
The accompanying notes are an integral part of the condensed consolidated financial statements.
-2-


MSA SAFETY INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited
 Three Months Ended March 31,
(In thousands)20212020
Net income$36,600 $43,802 
Other comprehensive (loss) income, net of tax:
     Foreign currency translation adjustments (Note 5)(10,223)(22,947)
     Pension and post-retirement plan actuarial gains, net of tax (Note 5)3,712 3,102 
Unrealized loss on available-for-sale securities (Note 5)(5)(62)
Reclassification of currency translation from accumulated other comprehensive (loss) into net income (Note 5) 720 
Total other comprehensive (loss) income, net of tax(6,516)(19,187)
Comprehensive income 30,084 24,615 
Comprehensive income attributable to noncontrolling interests(221)(13)
Comprehensive income attributable to MSA Safety Incorporated$29,863 $24,602 
The accompanying notes are an integral part of the condensed consolidated financial statements.
-3-


MSA SAFETY INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited 
(In thousands)March 31, 2021December 31, 2020
Assets
Cash and cash equivalents$184,728 $160,672 
Trade receivables, less allowance for credit loss of $4,732 and $5,344
224,954 252,283 
Inventories (Note 2)220,021 197,819 
Investments, short-term (Note 16)54,976 74,982 
Prepaid income taxes30,396 26,185 
Notes receivable, insurance companies (Note 17)3,825 3,796 
Prepaid expenses and other current assets 45,678 38,541 
Total current assets
764,578 754,278 
Property, plant and equipment, net (Note 4)197,832 189,620 
Operating lease assets, net68,199 53,451 
Prepaid pension cost (Note 14)101,317 97,545 
Deferred tax assets (Note 9)34,301 35,665 
Goodwill (Note 12)447,059 443,272 
Intangible assets, net (Note 12)164,234 161,051 
Notes receivable, insurance companies, noncurrent (Note 17)48,837 48,540 
Net investment in sales-type leases, noncurrent (Note 13)28,509  
Insurance receivable (Note 17) and other noncurrent assets87,896 89,062 
Total assets
$1,942,762 $1,872,484 
Liabilities
Notes payable and current portion of long-term debt (Note 11)$20,000 $20,000 
Accounts payable90,706 86,854 
Employees’ compensation33,373 40,277 
Insurance and product liability (Note 17)40,056 43,706 
Income taxes payable (Note 9)15,490 3,580 
Other current liabilities107,102 116,128 
Total current liabilities
306,727 310,545 
Long-term debt, net (Note 11)340,428 287,157 
Pensions and other employee benefits201,040 208,068 
Noncurrent operating lease liabilities59,211 44,639 
Deferred tax liabilities (Note 9)12,065 10,916 
Product liability (Note 17) and other noncurrent liabilities200,401 201,268 
Total liabilities
$1,119,872 $1,062,593 
Equity
Preferred stock, 4.5% cumulative, $50 par value (Note 6)
$3,569 $3,569 
Common stock, no par value (Note 6)
245,887 242,693 
Treasury shares, at cost (Note 6)(331,215)(327,756)
Accumulated other comprehensive loss (Note 5)(188,948)(182,397)
Retained earnings1,085,383 1,065,789 
Total MSA Safety Incorporated shareholders' equity
814,676 801,898 
Noncontrolling interests8,214 7,993 
Total shareholders’ equity
822,890 809,891 
Total liabilities and shareholders’ equity
$1,942,762 $1,872,484 
The accompanying notes are an integral part of the condensed consolidated financial statements.
-4-


MSA SAFETY INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
 Three Months Ended March 31,
(In thousands)20212020
Operating Activities
Net income$36,600 $43,802 
Depreciation and amortization10,504 9,640 
Stock-based compensation (Note 10)3,293 3,522 
Pension (income) expense (Note 14)(480)2,216 
Deferred income tax benefit (Note 9)(595)(546)
Loss on asset dispositions, net19 122 
Pension contributions (Note 14)(1,923)(1,891)
Currency exchange (gains) losses, net(2,099)270 
Product liability expense (Note 17)2,796 1,951 
Collections on insurance receivables and notes receivable,
insurance companies (Note 17)
1,765 3,000 
Product liability payments (Note 17)(7,471)(2,328)
Changes in:
     Trade receivables27,784 (15,339)
     Inventories (Note 2)(10,781)(18,988)
Accounts payable532 1,657 
Other current assets and liabilities(13,966)(12,887)
     Other noncurrent assets and liabilities(362)(594)
Cash Flow From Operating Activities45,616 13,607 
Investing Activities
Capital expenditures(9,582)(6,562)
Acquisition, net of cash acquired (Note 18)(62,992) 
Purchase of short-term investments (Note 16)(44,970)(69,612)
Proceeds from maturities of short-term investments (Note 16)65,000 50,000 
Property disposals 35 92 
Cash Flow Used in Investing Activities(52,509)(26,082)
Financing Activities
Proceeds from long-term debt (Note 11)370,017 378,000 
Payments on long-term debt (Note 11)(318,000)(350,000)
Cash dividends paid(16,820)(16,331)
Company stock purchases (Note 6)(5,348)(27,730)
Exercise of stock options (Note 6)1,790 2,733 
Cash Flow From (Used in) Financing Activities31,639 (13,328)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(720)(3,756)
Increase (decrease) in cash, cash equivalents and restricted cash24,026 (29,559)
Beginning cash, cash equivalents and restricted cash161,034 152,543 
Ending cash, cash equivalents and restricted cash$185,060 $122,984 
Supplemental cash flow information:
Cash and cash equivalents$184,728 $122,629 
Restricted cash included in prepaid expenses and other current assets332 355 
Total cash, cash equivalents and restricted cash$185,060 $122,984 
The accompanying notes are an integral part of the 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, 2019$1,012,266 $(214,003)$6,773 
Net income43,802 — — 
Foreign currency translation adjustments— (22,947)— 
Pension and post-retirement plan adjustments, net of tax of $1,067
— 3,102 — 
Unrealized net losses on available-for-sale securities (Note 16)— (62)— 
Reclassification from accumulated other comprehensive (loss) into net income (Note 5)— 720 — 
Income attributable to noncontrolling interests(128)115 13 
Common dividends(16,321)— — 
Preferred dividends ($0.5625 per share)
(10)— — 
Balances March 31, 2020$1,039,609 $(233,075)$6,786 
Balances December 31, 2020$1,065,789 $(182,397)$7,993 
Net income36,600 — — 
Foreign currency translation adjustments— (10,223)— 
Pension and post-retirement plan adjustments, net of tax of $1,084
— 3,712 — 
Unrealized net losses on available-for-sale securities (Note 16)— (5)— 
Reclassification of currency translation from accumulated other comprehensive (loss) into net income (Note 5)— — — 
Income attributable to noncontrolling interests(186)(35)221 
Common dividends(16,810)— — 
Preferred dividends ($0.5625 per share)
(10)— — 
Balances March 31, 2021$1,085,383 $(188,948)$8,214 
The accompanying notes are an integral part of the 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 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 condensed consolidated financial statements are not necessarily indicative of the results that may be expected for the entire year. The December 31, 2020, Condensed Consolidated 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, 2020, which includes all disclosures required by U.S. GAAP.
Reclassifications - Certain reclassifications of prior years' data have been made to conform to the current year presentation. These reclassifications relate to additional captions disclosed within the operating section of the unaudited Condensed Consolidated Statement of Cash Flows but do not change the overall cash flow from operating activities for the prior years as previously reported.
Note 2—Inventories
The following table sets forth the components of inventory:
(In thousands)March 31, 2021December 31, 2020
Finished products$101,064 $81,048 
Work in process6,115 2,618 
Raw materials and supplies160,034 161,300 
Inventories at current cost267,213 244,966 
Less: LIFO valuation(47,192)(47,147)
Total inventories$220,021 $197,819 
Note 3—Restructuring Charges

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.
During the three months ended March 31, 2020, we recorded restructuring charges of $2.0 million. International segment restructuring charges of $1.9 million during the three months ended March 31, 2020, were primarily related to severance costs for staff reductions associated with our ongoing initiatives to drive profitable growth.
-7-


Activity and reserve balances for restructuring charges by segment were as follows:
(In millions)AmericasInternationalCorporateTotal
Reserve balances at December 31, 2019$0.3 $5.9 $ $6.2 
Restructuring charges4.7 21.9 0.8 27.4 
Currency translation and other adjustments(0.1)0.1   
Cash payments / utilization (2.1)(8.6)(0.4)(11.1)
Reserve balances at December 31, 2020$2.8 $19.3 $0.4 $22.5 
Restructuring charges0.2 1.0 0.1 1.3 
Currency translation and other adjustments (0.6) (0.6)
Cash payments(0.3)(3.1)(0.1)(3.5)
Reserve balances at March 31, 2021$2.7 $16.6 $0.4 $19.7 

Restructuring reserves are included in Other current liabilities in the accompanying unaudited Condensed Consolidated Balance Sheets.
Note 4—Property, Plant and Equipment
The following table sets forth the components of property, plant and equipment, net:
(In thousands)March 31, 2021December 31, 2020
Land$5,189 $4,275 
Buildings128,776 128,887 
Machinery and equipment426,336 422,333 
Construction in progress40,466 38,753 
Total600,767 594,249 
Less: accumulated depreciation(402,935)(404,629)
Property, plant and equipment, net$197,832 $189,620 

-8-


Note 5—Reclassifications Out of Accumulated Other Comprehensive Loss
Changes in accumulated other comprehensive loss were as follows:
MSA Safety IncorporatedNoncontrolling Interests
Three Months Ended  
March 31,
Three Months Ended  
March 31,
(In thousands)2021202020212020
Pension and other post-retirement benefits (a)
Balance at beginning of period$(115,552)$(124,848)$ $ 
Amounts reclassified from accumulated other comprehensive loss into net income:
Amortization of prior service credit (Note 14)(24)(52)  
Recognized net actuarial losses (Note 14)4,820 4,221   
Tax benefit(1,084)(1,067)  
Total amount reclassified from accumulated other comprehensive loss, net of tax, into net income3,712 3,102   
Balance at end of period$(111,840)$(121,746)$ $ 
Available-for-sale securities
Balance at beginning of period$(1)$6 $ $ 
Unrealized loss on available-for-sale securities (Note 16)(5)(62)  
Balance at end of period$(6)$(56)$ $ 
Foreign currency translation
Balance at beginning of period$(66,844)$(89,161)$582 $423 
Reclassification from accumulated other comprehensive loss into net income 720 
(b)
  
Foreign currency translation adjustments(10,258)(22,832)35 (115)
Balance at end of period$(77,102)$(111,273)$617 $308 
(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 14—Pensions and Other Post-retirement Benefits).
(b) Reclassifications into net income relate primarily to the closure of several subsidiaries in our Europe, Middle East & Africa ("EMEA") operating segment and are included in Currency exchange (gains) losses, net, within the unaudited Condensed Consolidated Statement of Income.
-9-


Note 6—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, 2021. The Treasury shares at cost line on the unaudited Condensed Consolidated Balance Sheet includes $1.8 million related to preferred stock. There were no treasury purchases of preferred stock shares during the three months ended March 31, 2021. There were treasury purchases of 120 preferred stock shares during the three months ended March 31, 2020. 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, 2021.
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, 2020. No new shares were issued during the three months ended March 31, 2021, or 2020. There were 39,167,207 and 39,067,902 shares outstanding at March 31, 2021, and December 31, 2020, 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, 2021, no shares were repurchased under this program. During the three months ended March 31, 2020, 175,000 shares were repurchased under the program. There were 22,914,184 and 23,013,489 Treasury Shares at March 31, 2021, and December 31, 2020, 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 32,650 and 58,840 Treasury Shares issued for these purposes during the three months ended March 31, 2021 and 2020, respectively.
Common stock activity is summarized as follows:
Three Months Ended March 31, 2021Three Months Ended March 31, 2020
(In thousands)Common
Stock
Treasury
Cost
Common
Stock
Treasury
Cost
Balance at beginning of period$242,693 $(326,156)$229,127 $(303,566)
Stock compensation expense3,293  3,522  
Restricted and performance stock awards(1,333)1,333 (2,239)2,239 
Stock options exercised1,234 556 1,757 976 
Treasury shares purchased (5,348) (7,617)
Share repurchase program   (20,113)
Balance at end of period$245,887 $(329,615)$232,167 $(328,081)


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Note 7—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 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 COVID-19 related costs, consisting of a one-time bonus for essential manufacturing employees 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 measure to operating income as presented on the Consolidated Statement 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 consolidated financial statement level. Sales and transfers between operating segments are accounted for at market-based transaction prices and are eliminated in consolidation.
-11-


Reportable segment information is presented in the following table:
(In thousands, except percentage amounts)AmericasInternationalCorporateConsolidated
Totals
Three Months Ended March 31, 2021
Sales to external customers$208,340 $100,088 $ $308,428 
Operating income44,038 
Restructuring charges (Note 3)1,308 
Currency exchange gains, net (Note 5)(2,099)
Product liability expense (Note 17)2,796 
Acquisition related costs (Note 18)1,373 
Adjusted operating income (loss)45,152 8,790 (6,526)47,416 
Adjusted operating margin %21.7 %8.8 %
Depreciation and amortization10,504 
Adjusted EBITDA52,186 12,163 (6,429)57,920 
Adjusted EBITDA margin %25.0 %12.2 %
(In thousands, except percentage amounts)AmericasInternationalCorporateConsolidated
Totals
Three Months Ended March 31, 2020
Sales to external customers$231,253 $109,892 $ $341,145 
Operating income58,782 
Restructuring charges (Note 3)2,007 
Currency exchange losses, net (Note 5)270 
Product liability expense (Note 17)1,951 
Acquisition related costs (Note 18)97 
COVID-19 related costs757 
Adjusted operating income (loss)59,807 12,671 (8,614)63,864 
Adjusted operating margin %25.9 %11.5 %
Depreciation and amortization9,640 
Adjusted EBITDA66,257 15,765 (8,518)73,504 
Adjusted EBITDA margin %28.7 %14.3 %
-12-


Total sales by product group was as follows:
Three Months Ended March 31, 2021ConsolidatedAmericasInternational
(In thousands, except percentages)DollarsPercentDollarsPercentDollarsPercent
Breathing Apparatus$69,644 23%$48,798 23%$20,846 21%
Fixed Gas & Flame Detection60,119 19%36,277 17%23,842 24%
Firefighter Helmets & Protective Apparel 46,010 15%34,988 17%11,022 11%
Portable Gas Detection37,429 12%25,702 12%11,727 12%
Industrial Head Protection32,696 11%25,111 12%7,585 8%
Fall Protection26,067 8%15,672 8%10,395 10%
Other (a)
36,463 12%21,792 11%14,671 14%
Total$308,428 100%$208,340 100%$100,088 100%
Three Months Ended March 31, 2020ConsolidatedAmericasInternational
(In thousands, except percentages)DollarsPercentDollarsPercentDollarsPercent
Breathing Apparatus$75,844 22%$52,693 23%$23,151 21%
Fixed Gas & Flame Detection69,911 21%41,247 18%28,664 26%
Firefighter Helmets & Protective Apparel 42,547 12%35,113 15%7,434 7%
Portable Gas Detection41,052 12%27,648 12%13,404 12%
Industrial Head Protection35,332 10%27,555 12%7,777 7%
Fall Protection27,428 8%17,697 8%9,731 9%
Other (a)
49,031 15%29,300 12%19,731 18%
Total$341,145 100%$231,253 100%$109,892 100%
(a)Other products include sales of Air Purifying Respirators ("APR").

-13-


Note 8—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)20212020
Net income$36,414 $43,674 
Preferred stock dividends(10)(10)
Net income available to common equity36,404 43,664 
Dividends and undistributed earnings allocated to participating securities(14)(33)
Net income available to common shareholders36,390 43,631 
Basic weighted-average shares outstanding39,094 38,824 
Stock-based compensation awards326 528 
Diluted weighted-average shares outstanding39,420 39,352 
Antidilutive stock options  
Earnings per share:
Basic$0.93 $1.12 
Diluted$0.92 $1.11 
Note 9—Income Taxes

The Company's effective tax rate for the first quarter of 2021 was 21.0% and is consistent with the U.S. federal statutory rate of 21% as state income taxes and a one time foreign expense associated with pension are offset by tax benefits on certain share-based payments. The Company's effective tax rate for the first quarter of 2020 was 23.0%, which differs from the U.S. statutory rate of 21% primarily due to state income taxes, higher foreign entity losses in jurisdictions where we cannot take tax benefits, partially offset by tax benefits on certain share-based payments.
At March 31, 2021, the Company had a gross liability for unrecognized tax benefits of $9.1 million. The Company has recognized tax benefits associated with these liabilities of $2.7 million at March 31, 2021. 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 $1.1 million at March 31, 2021.
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.
-14-



Note 10—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 6—Capital Stock for further information regarding stock compensation share issuance.
Stock compensation expense is as follows:
 Three Months Ended March 31,
(In thousands)20212020
Stock compensation expense$3,293 $3,522 
Income tax expense794 859 
Stock compensation expense, net of tax$2,499 $2,663 
A summary of stock option activity for the three months ended March 31, 2021, follows:
SharesWeighted Average
Exercise Price
Outstanding at January 1, 2021283,998 $46.23 
Exercised(38,806)46.09 
Forfeited(81)49.66 
Outstanding at March 31, 2021245,111 46.26 
Exercisable at March 31, 2021243,563 $46.25 
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, 2021, follows:
SharesWeighted Average
Grant Date Fair Value
Unvested at January 1, 2021146,191 $105.83 
Granted28,128 170.69 
Vested(29,981)85.89 
Forfeited(156)121.83 
Unvested at March 31, 2021144,182 $122.62 
Performance stock units have a market condition modifier and 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 2021 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 in the first quarter of 2021.
Fair value per unit$177.50
Risk-free interest rate0.2%
Expected dividend yield1.33%
Expected volatility35.6%
MSA stock beta0.932
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