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MSA Safety (NYSE:MSA)
Q3 2019 Earnings Call
Oct 24, 2019, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Good day and welcome to the MSA third-quarter 2019 earnings conference call. [Operator instructions] After today's presentation there will be an opportunity to ask questions. [Operator instructions] Please note, this event is being recorded. I would now like to turn the conference over to Elyse Lorenzato, director, investor relations.

Please go ahead.

Elyse Lorenzato -- Director of Investor Relations

Thank you, Drew. Good morning, everyone, and welcome to MSA's third-quarter 2019 earnings conference call. With me here today are Nish Vartanian, president and CEO; and Ken Krause, senior vice president, CFO, and treasurer. Before we begin, I'd like to remind everyone that the matters discussed on this call, excluding historical information, are 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 risks, uncertainties and other factors that may cause our actual results to differ materially from those discussed here. These risks, uncertainties and other factors are detailed in our filings with the SEC, including our most recent Form 10-K filed in February of 2019. MSA undertakes no duty to publicly update any forward-looking statements made on this call except as required by law.

We've included certain non-GAAP financial measures as part of our discussion this morning, and the non-GAAP reconciliations as well as our Q3 press release are available on our Investor Relations website at investors.msasafety.com. With that, I would like to turn the call over to our president and CEO, Nish Vartanian.

Nish Vartanian -- President and Chief Executive Officer

Thanks, Elyse, and good morning, everyone. I want to thank and recognize the MSA team for their excellent performance this quarter reflected on our 8% of revenue growth. Our third-quarter performance is really the continuation of a growth story, driven by listening closely to customer needs, developing innovative products, and driving operational excellence through the MSA operating system. Collectively, these focus areas support our leadership position in business critical applications like worker safety and asset infrastructure protection.

As more and more companies around the world place greater focus on social responsibility, reducing liability, and enhancing ESG reporting, safety has never been more important. The results generated by our industrial and gas detection products this quarter were especially encouraging. I say that because we were able to achieve 8% constant currency revenue growth in a quarter despite a delay in the approval of SCBA in the U.S. for all manufacturers and about a six week delay in the release of assistance to firefighter grant funding, both of which impacted our SCBA sales volumes in the quarter.

These limiting situations have since been resolved. AFG funds have been released, and we began shipping our next-generation G1 units upon receipt of certification at the end of September. Not lost business, just a shift in timing of orders out into the next few months and into 2020. Internationally, we had a tough SCBA comp due to a large order we shipped the year ago.

Still we're seeing good order traction on the M1 SCBA. And while SCBA results were soft in the quarter, our fire helmet and turnout gear business provided a nice tailwind in the fire service, growing more than 20% on strength and turnout gear in the Americas and growth in fire helmets in emerging markets like China. When I think about what it takes to succeed in a sophisticated safety products market, I see product innovation and brand equity as two core competencies that enable market leadership. With that in mind, I want to make just a few comments this morning about our R&D investments that are fueling revenue growth by uniquely solving our customers' needs in driving safety first behaviors.

Those investments are complemented by MSA's brand strength as the safety company, which provides inroads with strategic end users and channel partners. Our sales vitality, the percentage of sales from products developed over the last five years was more than 35% this quarter. In the area we're seeing the most notable improvement is in fall protection, with sales increasing 27% from a year ago. In 2018, we discussed the sizable NPD pipeline in fall protection and this included our V series brand of fall protection products.

We also invested in this area to expand our sales coverage and increase manufacturing capacity. Those investments helped us convert competitive accounts and by doing so, we are truly earning the right to win in fall protection. We launched the V Gard -- we also launched the V Gard H1 safety helmet in the quarter, leveraging the iconic V Gard brand. The H1 helmet is the latest in MSA's full line of high performance head protection.

As a working high styles helmet, it provides unique value to the market at a premium price point. The helmet has exceptional comfort, range in motion, and adjustability in a stylish low profile design. While the H1 works across all industrial applications, this is a helmet that's really suited for the rigorous conditions such as power climbing, confined space application, and rescue activities. But just like our V Gard hard hat, which is the market leader in industrial head protection, we will also offer best-in-class customization capabilities with the H1.

From the H1 helmets to the 5000 series detectors, we're launching critical products across all of our core product lines. And from my perspective, the key takeaways from this are: one, our NPD pipeline from R&D investments continues to grow; and two, the MSA team is executing at a very high level. With that, I'll turn the call over to Ken for our financial review. Ken?

Ken Krause -- Senior Vice President, Chief Financial Officer, and Treasurer

Thanks, Nish, and good morning, everyone. Before I begin the P&L review and discuss the quarter in more detail, I'd like to start with a few highlights of our quarterly performance. Revenue growth was 6% on a reported basis or 8% in constant currency. It is encouraging to see that level of growth in any quarter, but considering we could not ship NFPA compliant SCBA in the Americas for the entire month of September, it's really a solid resolve.

We leveraged that revenue growth into 11% adjusted operating income growth with an incremental operating margin of more than 30%. Adjusted operating margin of 18% increased 80 basis points from this time a year ago. And it's important to note that comparison includes 50 basis points of dilution related to the Sierra Monitor acquisition, primarily related to non-cash stock compensation charges and amortization associated with the purchase price allocation related to the inventory step up on the transaction. The area was dilutive to adjusted EPS by $0.02.

However, it was accretive to earnings on a cash basis by $0.02 and we are on track with our integration plans there. In fact, we completed a major milestone of the integration plan when we went live on SAP at Sierra at the beginning of October. That positions us well to drive improvements in the business. Adjusted earnings were flat in the quarter at $1.15 per share, but it's important to note that our higher tax rate impact the earnings per share by $0.07.

This step up in the tax rate was largely driven by cash repatriation in the quarter associated with the repatriation of more than $35 million from Europe and other non-recurring adjustments. Free cash flow conversion was about 95% of net income in the quarter, showing nice improvement from the first half of this year. We deployed $16 million for dividends and reduced our debt balances by $24 million, while investing $10 million in capex. Now, I'd like to walk you through our third-quarter financial results.

Total revenue increased 8% in the quarter in constant currency. We had a 2% FX headwind on revenue in the quarter. We continue to see solid results across our short and long cycle businesses. Gas detection growth was strong across the board in both portable gas detection and the fix side in both of our reporting segments as our new products continue to be well accepted by the market.

As Nish had mentioned, new products drove our business in industrial personal protective, which was evidenced by our growth of 27% in fall protection. And not only did we see strong revenue growth, but margins in Americas fall protection product sales, which was the main source of overall revenue growth in that product category were up strongly in the quarter as well. Emerging markets growth was a very healthy 8% in the quarter, and we are seeing good results across these markets and continue to drive growth in important areas like China, which has had -- which has grown at a double digit rate year to date, and built backlog in the quarter despite healthy shipping activity. The SCBA area of our business was challenging in the quarter as a result of the delays in the Americas and a tough comparison in international from a large order that we shipped in the second half of 2018.

The comparable period analysis in international SCBA will continue to be pressured in the fourth quarter related to that specific order. Gross profit was up 40 basis points from last year on a reported basis. Gross profit includes, however, the purchase accounting oriented costs associated with our recent acquisition. And excluding these, gross profit was up a very healthy 70 basis points in the quarter.

The new products and pricing actions that we're executing continue to provide good leverage. SG&A expense was $83 million in the quarter or 23.6% of sales, which includes about $1 million of transaction-related costs and $2 million of cost for Sierra's base business. Excluding Sierra and all the related costs, we gained 40 basis points of leverage from SG&A efficiencies compared to a year ago. We also continue to focus on executing restructuring activities to streamline our business.

We are on track with our international restructuring activities that we have been executing throughout the year. And it's good to see the expense control in the quarter in that segment, particularly in Europe, where SG&A is down 3% on revenue that is up 3%. GAAP operating income was $60 million or 17% of sales in the quarter. Excluding foreign exchange, restructuring, strategic transaction costs and product liability expense, adjusted operating margin was 18% up 80 basis points from a year ago on incremental margins that are exceeding 30% in the quarter and 40% year to date.

Excluding the dilution from the Sierra acquisition, which is included in the Americas segment and was driven by purchase accounting and non-stock -- non-cash stock compensation-related items, operating margin expanded by 130 basis points in the quarter. It is also good to see the margin gains balance between our reporting segments. With the Americas improving 50 basis points and international improving 90 basis points in the quarter. Americas posted strong gross profit expansion while the international segment is gaining leverage from the cost reduction programs I mentioned a few moments ago.

It is important to recognize that our prior-year GAAP operating income results included a charge of almost $15 million related to accruals associated with product liability versus $2 million this year. The impact of this change in the year-over-year comparison is neutralized in adjusted operating income and adjusted earnings. Our GAAP effective tax rate was elevated at 27% as a result of the $35 million of foreign cash that we repatriated from our European affiliates. We had certain quarterly specific unfavorable impacts this year that attracted about $0.07 from EPS.

Year to date, our adjusted effective tax rate, which neutralizes for the impact of certain non-cash items is trending at 25%. We are planning for our full-year adjusted effective rate to be 24% to 25% for 2019. GAAP net income was $42 million. Quarterly adjusted earnings were $45 million, or $1.15 per share, which is relatively flat from a year ago.

As I mentioned, the higher tax rate and non-cash costs related to Sierra Monitor were detractors from EPS in the quarter. The incremental operating margins were north of 30%, which indicates that their profitability profile continues to be healthy. Our 2019 and long-term expectations of growing earnings on a multiple of sales is still very much intact. Free cash flow was $41 million in the quarter, which includes about $2 million of net outflows for product liability.

If you recall, we had $58 million of insurance receivables inflows in the third quarter a year ago. During the current quarter, we used cash for inventory to support our revenue growth and prepared for the fourth quarter deliveries, but receivables provided a source of cash and drove stronger cash flow conversion. Free cash flow conversion was more than 95% in the quarter despite the strong revenue growth and order pace. The stronger cash flow enabled us to fund a $16 million dividend and pay down $24 million of debt in the quarter, which puts debt-to-EBITDA at 1.3 times on a gross level.

Our balance sheet is strong and provides us with the flexibility to continue investing in our business and pursuing acquisitions. The quarter reflects another solid performance from our teams as we continue to focus on growth, productivity and cash flow. In summary, it was great to see 8% growth, 130 basis points of margin expansion in our organic business and improvements in free cash flow conversions despite the strong growth. The incremental margin profile is intact at more than 30% in the quarter and the order pace was healthy as well in the quarter.

We had a book to bill in excess of 1.0 times, which positions as well for the fourth quarter. We continue to expect mid-single digit constant currency revenue growth for the full year of 2019. With that, I'll turn the call back over to Nish for some concluding commentary. Nish?

Nish Vartanian -- President and Chief Executive Officer

Thanks, Ken. Looking at conditions across our end markets, headlines would certainly points to caution. But our leading indicators are tracking well and benefiting from share capture, strategic pricing and the secular trend for safety product demand. Industrial and detection related revenue was healthy this quarter.

But we also saw significant growth in short cycle businesses like portable gas detection at 14% and as mentioned fall protection at 27%. In long cycle business like fixed gas flame detection revenue grew 18% and our backlog in that area continues to be elevated from a year ago. While we're seeing some choppiness in the business throughout the year, our backlog is healthy and order pace indicates that we should deliver on our mid-single digit revenue growth goal for 2019. Thank you for your attention this morning.

At this time, Ken and I would be glad to take any questions you may have. Please remember that MSA does not give guidance. Having said that, we'll now open up the call for your questions.

Questions & Answers:


Operator

[Operator instructions] The first question comes from Stanley Elliott of Stifel. Please go ahead.

Stanley Elliott -- Stifel Financial Corp. -- Analyst

Good morning, guys. Congratulations on the nice quarter.

Nish Vartanian -- President and Chief Executive Officer

Thank you, Stanley.

Stanley Elliott -- Stifel Financial Corp. -- Analyst

Can you speak to some of the outgrowth in a little more detail, especially on the fall protection gas detection side? Is this more distribution, obviously, you have a lot of new products coming out. Just trying to get a sense for how sustainable this trajectory is going to end up being, given the large numbers that you guys are putting up right now.

Nish Vartanian -- President and Chief Executive Officer

Sure, Stanley. Fall protection story has been a really good one for us. A year ago, we had 13% -- I believe, it was 13% revenue growth for the year in fall protection. And as you know, we've been investing in that area and really coming out with some strong products in the portfolio.

We've made some significant investments around sales and marketing and also operations to enhance our manufacturing capabilities and deal with the higher demands, and that's really paid off for us. We've penetrated the market really well. We're winning accounts. We've worked hard to earn the right to win with fall protection.

Just kind of a casual observation, I get to meet with a lot of customers who come through Pittsburgh and visit MSA, and kind of see what's behind those letters of MSA. And when they come through, I spend a little bit of time with them. We get a steady stream of customers from fire departments throughout North America and even the Americas. What's changed significantly from my perspective is the number of construction companies coming through Pittsburgh and visiting MSA to really get an understanding of what we're doing around fall protection.

And I think we're turning some heads and doing quite well. So, the 27% growth on a global basis, that's a steep number. But before the third quarter, we were running around 20% up from 13%. So, we think we can continue at a nice growth cliff going forward and continue to gain some market share.

We're in a nice positioned there. With affordable gas detection, we've done a real nice job in that area also with some unique solutions, with what we've done with our sensor capabilities and adding on safety IO. While the safety IO isn't a big part of the revenue story, our customers like to buy their products that are capable of having those capabilities for future sign up for that type of subscription. So we're doing real well there.

And that end market tends to -- is fairly healthy for us right now. So, that tends to be a little longer cycle business for us. And of course, fixed gas and flame detection has been a real nice story for us but that backlog continues to build with the introduction of the X5000.

Stanley Elliott -- Stifel Financial Corp. -- Analyst

No doubt. And in the past, you guys have done a nice job of strategically using M&A to kind of build out parts of the portfolio. Now you basically have number one, number two market share position, pretty much in everything would be my guess. Does that change your view on how you want to use M&A to kind of grow the business, particularly with such a robust kind of MPD pipeline or how are you all thinking about the inorganic opportunities?

Nish Vartanian -- President and Chief Executive Officer

Sure, the inorganic pipeline for us is very active at this point. We have a lot of focus around that area. And there's opportunities within the core product areas. There's some nice opportunities within the core product lines to enhance our product position.

But as we did with global, we'll look outside of those core areas within core markets, where we have a good understanding of the business to broaden our core portfolio, and we continue to evaluate those opportunities as we go forward. As Ken mentioned, the balance sheet is in great shape. We love investing in the business from an organic standpoint. And where it makes sense, we'll add those inorganic opportunities but they have to make sense to us, Stanley.

We're pretty discipline in that areas, as you know, and have a real good track record. But there are some opportunities out there and we continue to investigate.

Stanley Elliott -- Stifel Financial Corp. -- Analyst

Perfect. And the lastly for me, it sounds like the Senscient acquisition is tracking very well. I mean, could you tell us what you've learned maybe thus far, how that technology is going to be transferable to some of your core products? And then kind of how should we think about the ramp in profitability as those -- as all those businesses come together?

Nish Vartanian -- President and Chief Executive Officer

I think you meant Sierra Monitor and Sierra Monitor --

Stanley Elliott -- Stifel Financial Corp. -- Analyst

[Inaudible]

Nish Vartanian -- President and Chief Executive Officer

Yes, it's tracking exactly where we expected it to be. What's really interesting with that business, and we bought that in part for some of the gateways that they provide for the Internet of Things. And what we're finding is it's1 really helping us in progress with what we're doing even outside of gas detection, with what we're doing with Lunar. And that will help us with what we're trying to do around Lunar and the protection of firefighters and developing our model around that connected firefighter.

So it's certainly helping us in areas beyond gas detection, which is a nice benefit for us.

Stanley Elliott -- Stifel Financial Corp. -- Analyst

Perfect. Thanks for the time. I'll hop back in queue.

Nish Vartanian -- President and Chief Executive Officer

Thank you, Stanley.

Operator

The next question comes from Richard Eastman of Baird. Please go ahead.

Richard Eastman -- Robert W. Baird and Company -- Analyst

Yes. Thank you. Good morning, Nish, Ken.

Nish Vartanian -- President and Chief Executive Officer

Good morning.

Ken Krause -- Senior Vice President, Chief Financial Officer, and Treasurer

Good morning.

Richard Eastman -- Robert W. Baird and Company -- Analyst

Hey. Just a quick question, just a follow up on Sierra there, can you just give us the revenue contribution here for Q3?

Ken Krause -- Senior Vice President, Chief Financial Officer, and Treasurer

Yes. It added -- Rick, it's Ken here. It added about 2% growth to the quarter. And so when we look at the overall 8% constant currency growth about 2% of that is associated -- just under 2% is associated with the Sierra Monitor acquisition.

Richard Eastman -- Robert W. Baird and Company -- Analyst

OK. OK. And then, Ken, also maybe you could just tell us or give us a sense of price capture in Q3, particularly by North America and Europe. Are you able to get any price in I could just say rest of world maybe.

And then maybe what that looks like in North America, price capture year over year.

Ken Krause -- Senior Vice President, Chief Financial Officer, and Treasurer

Sure, when we look at the business, Rick, we were really -- it was good to see the gross margin improvement of about 70 basis points in our underlying business. When we look at the Americas segment, we did see a nice amount of capture in price. Part of that was because we were quick in moving in those markets with our price increases last year. So as you recall, we had a mid-year price increase.

We follow that on earlier this year in those markets where we're much more mature and we have leverage in the channels, and strong relationships. And so we've seen some nice price capture, they're driving that margin higher. In the International segment, we've seen price capture across the International segment. However, Europe has been challenging at times.

And so that, as you know and as the investors that follow us, Europe is an area where we don't have that stronger position. But we are placing a lot of effort on channels development and improvement of our channels, both in Europe as well as in Middle East and with the plans to continue to improve that pricing position and the net capture we have there. What was good to see for us was the amount of reduction in SG&A that we were seeing in Europe. A lot of our effort thus far has been improving our business model, and to see the results come through on the cost reduction were really good to see.

Richard Eastman -- Robert W. Baird and Company -- Analyst

Excellent. And then just a question around, obviously, the NFPA delay on the approval of next gen SCBA. Again, just trying to kind of sift through the numbers here a little bit. Was perhaps $8 million to $10 million of revenue delayed shipped in Q3 and pushed into Q4? I mean, is that order of magnitude maybe where what we saw delayed? And then, can I also ask in the past when we've introduced some modifications to meet a standard upgrade with the SCBA, we've taken a little bit of early hits on our gross margin just around kind of until we build volume.

And I'm just kind of curious, so maybe a number that maybe was pushed into the fourth quarter from revenue. And then is there any impact on the gross margin as that stuff starts to ship -- as the next gen starts to ship?

Nish Vartanian -- President and Chief Executive Officer

Sure. Yes, so this is Nish. Well first of all your $8 million to $10 million numbers are a little bit heavy. It was probably more in that $6 million range, I would guess.

And we probably won't see all of that in the fourth quarter. My guess is we'll see some in the fourth, maybe some get pushed into next year because of the new standard. Some fire departments just want to take a look at the unit, maybe put it through a bit of a trial and also the AFG funding will also delay things slightly. So that's $6 million, $7 million, whatever it may be, I think that'll be pushed into the next couple of quarters is more realistic.

And then as far as margins are concerned, no, I don't see any impact whatsoever on margins. And in fact, I expect the margins to be as high or higher this standard was not a significant change for MSA because the G1 was a fairly new unit it was a couple tweaks to the unit. And actually the upgrade, people who are in the G1 today have a fairly simple upgrade to the standard, which is a real benefit to those customers who purchase the unit earlier than the '18 standard.

Richard Eastman -- Robert W. Baird and Company -- Analyst

OK. And just last one, I promise. Just, Nish, could you just maybe put on kind of next level depth of color around your backlog and book-to-bill commentary? I'm curious when you speak to that backlog number building I presume that's fixed gas and flame also what are the product lines, did you see kind of that book-to-bill exceed one?

Nish Vartanian -- President and Chief Executive Officer

Sure. So you're exactly right. Fixed gasoline detection was a big area that we had some build there, which is really nice to see. And we talked about that being a late business cycle type product line.

And we had some built around fall protection, a bit of build with our globe business and that turnout gear business, and it was small in a number of other areas. The business was pretty healthy across the board, which is really encouraging.

Ken Krause -- Senior Vice President, Chief Financial Officer, and Treasurer

The only thing I would add, Nish, there is, as you know, the fixed gas and flame detection is a bit of a long cycle business. And so even though we might build backlog in a specific quarter, it may take one or two quarters to work that backlog out. And so just be aware that backlog doesn't always come in and ship the next quarter, it may take a quarter or two to get out of the backlog.

Richard Eastman -- Robert W. Baird and Company -- Analyst

Got you. OK. Great. Thank you, again.

Nice work on a challenging quarter.

Ken Krause -- Senior Vice President, Chief Financial Officer, and Treasurer

Thank you, Rick.

Nish Vartanian -- President and Chief Executive Officer

We appreciate that.

Operator

The next question comes from Edward Marshall of Sidoti & Company. Please go ahead.

Edward Marshall -- Sidoti and Company LLC -- Analyst

Hey, guys. Good morning. Good morning. Nish, I wanted to follow-up on your last comment within your prepared remarks or your last topic.

I always thought of MSA as employment sensitive forefront of industrial sensitivity. And the description was positive, given the market -- given the industrial backdrop I just wanted to get a sense from you is, how much is that really driven by what MSA is doing about new product introduction and so forth. And then maybe what your customers might be telling you about where we are in an economic cycle?

Nish Vartanian -- President and Chief Executive Officer

I think a big part of that is really what we're doing around our product pipeline. If you look across our core product pipeline, we've introduced significant products in every single one of those core product areas. So whether it's the X and S5000 or we have the ALTAIR io360 coming down the pipeline, what we've done with Safety IO, enhancing our position with portable gas detection. The H1 helmets coming out of the door.

We launched the Fast-Trac III Suspension a couple years ago still doing well in the marketplace. The athletics line of turnout gear for globe, the X, S1 fire helmets in North America and I could go on and on and on a product pipeline, and the investment we've made, we think we're gaining some markets here we're performing well. The longer cycle products such as fixed gas and flame detection, we're doing well there, we're really well positioned with that X and S5000 as that market is strengthening, and we're gaining market share clearly with fall protection. It's very clear that we've gained some market share there we've had some customer shift their business over to us.

And so really it's a combination and plus, we're doing a pretty effective job around pricing. And our marketing team has done a nice job in getting out and educating our sales force and being a little smarter in how we price our products in the marketplace. And you're starting to see that through margin improvement. So it's just really good execution across the organization, and really driven a lot through the MSA operating plan.

Ken Krause -- Senior Vice President, Chief Financial Officer, and Treasurer

And one thing just to add on to what Nish said there had some really good comments around the product portfolio, the one thing to think about and I think you'll see it at our Investor Day on November 11th is the amount of technology that we're putting into our products today. And what the technology is doing is offering unparalleled levels of safety for our customers, but it's also providing an unparalleled cost of ownership advantage for them. That's giving us an opportunity to go in and take share when a market might be more challenging, when a cycle may be against us. And so, I think you're going to see a new on November 11th a lot of products that maybe you haven't seen in the past and the amount of technology that's in them, I think, will be quite impressive.

Edward Marshall -- Sidoti and Company LLC -- Analyst

That's interesting. Thanks for the color. We look at the incrementals, I mean, you talked about the quarter itself. I mean for the year, I think you're close to 60%, year to date.

Pretty impressive and obviously, that's probably not sustainable or maybe it is. I don't know. You tell me. But any sense of the normalized kind of incrementals, and maybe one that starts to kind of leap back into the model?

Ken Krause -- Senior Vice President, Chief Financial Officer, and Treasurer

Yes. It's -- when we look at the incrementals in the quarter, around 39% on a constant currency basis. Year to date, they're about 45%. In our last Investor Day in March of 2018, I believe it was, we gave a guide around 30% to 40% incrementals.

And so we still feel very much like that guide is intact. We've continued to execute at those levels for the past couple of years. So 30% to 40% incrementals are probably not out of the question as we think about the business going forward.

Edward Marshall -- Sidoti and Company LLC -- Analyst

Got it. I appreciate your help, guys. Thanks very much.

Ken Krause -- Senior Vice President, Chief Financial Officer, and Treasurer

Thank you.

Nish Vartanian -- President and Chief Executive Officer

Thank you, Ed.

Operator

[Operator instructions] The next question comes from Larry De Maria of William Blair. Please go ahead.

Larry De Maria -- William Blair and Company -- Analyst

Thanks. Good morning, everybody.

Nish Vartanian -- President and Chief Executive Officer

Good morning.

Larry De Maria -- William Blair and Company -- Analyst

First question -- hey guys. You mentioned obviously talked about orders and book-to-bill -- book-to-bill being above one. Can you just give us the exact numbers on what the orders were up and what the book-to-bill actually is?

Ken Krause -- Senior Vice President, Chief Financial Officer, and Treasurer

Yes, the book-to-bills is approaching 1.05. It's in that 1.03, 1.05 range and it's healthy. When you look at it, it's not specific to one area. It's positive in Europe.

It's very positive in Asia and in China specifically, when we look at China, I commented in my script around double-digit year-to-date growth while we're seeing very strong order growth, good flow in the business coming out of that area of the world. So, it's really good to see that level of demand across the business, not only here in the U.S., but outside of the U.S.

Larry De Maria -- William Blair and Company -- Analyst

OK. Thank you. Looking at Asia and China strength, I guess, obviously, haven't really been impacted by what a lot of other companies have been impacted by in terms of trade stuff. Just maybe digging in a little bit, what's driving the strength there, why are you guys immune to it? And do you have your full set of MSA strengths over there now to participate in that market?

Nish Vartanian -- President and Chief Executive Officer

We do, we compete across all our product lines in China. We manufacture some products in China for China. And, one of the things to keep in mind with our business is fire service represents a good part of our business on a global basis. And in China, we've built a very nice brand with our fire service market.

And as I mentioned in my comments, fire helmets were fairly strong in China this past quarter along with breathing apparatus. So we continue to do a nice job in penetrating the fire service market business in China. And that the fire service market on a global basis doesn't run on the same economic cycles as the general industrial business. And so when you look at our profile in that area, we've grown that nicely, whether it's breathing apparatus, fire helmets, thermal imaging cameras, and even gas detection -- portable gas detection into the fire service, and specifically to the Americas, the globe turnout gear business.

And so the way we built this portfolio is we're not tied to any one specific market or area. So as the industrial market might soften a bit for some of those short-term products, such as head protection, head protection has not been robust. We have products in other categories that'll do well for us, and that's what we're experiencing in some of those areas.

Larry De Maria -- William Blair and Company -- Analyst

Great. Thank you. Maybe and this might be something you guys talk at the Analyst Day, but I think LUNAR is having a bigger launch or an actual launch next year. And then you just went through this G1 certification.

Just curious where it all ties in if there are any hurdles to launching LUNAR next year, how material or important of a product that's going to be, and where you stand versus the competition in terms of launches or everybody's got to go through a certification process, etc. So any more color on that would be great.

Nish Vartanian -- President and Chief Executive Officer

Sure. We're really excited about LUNAR. I've said through some customer feedback sessions on LUNAR with fire departments, just so I can get a firsthand view of what they're saying and the reaction to LUNAR has exceeded my expectations. I can tell you that the fire departments are excited to get it.

Couple of them wanted to place orders for it before we've even started shipping or launching. We're really excited about that we're progressing. It's a new product. We're pulling together a lot of new technology to develop LUNAR and that new tool for the fire service.

We expect to ship that sometime hopefully in the second quarter next year. But it's certainly generating a lot of excitement and we're tracking to have a finished product that we can show at FDIC. We have some working prototypes that we've been using with departments and getting some real good customer feedback on it, really excited about that. And so that product really doesn't tie into today to G1, but it will.

So we'll have some opportunity to leverage our position with the G1 breathing apparatus with LUNAR. But what's really excited about LUNAR is we can go into competitive departments around the world and sell that product and we've got some really good leverage with customers throughout the world with our broad product portfolio, and we think we've got a pretty exciting product there. We don't have pricing nailed down yet. We're not at that phase to put a fine point on, the size of the market or the size of the price, so to speak.

But we're pretty excited about the technology and very excited about how that may enhance and protect firefighters lives going forward.

Larry De Maria -- William Blair and Company -- Analyst

OK. Thanks, Nish. That's really helpful and it sounds really exciting. Last thing, I'll jump off, anything in particular, or specific high level numbers, we should be thinking about to expect now what the numbers are, obviously, but what numbers we should expect to get from you guys, et cetera, in November or any kind of preparation before that we should have?

Nish Vartanian -- President and Chief Executive Officer

So we're working through and I think you're leaning toward 2020. I guess, you're -- is that what you're asking about?

Larry De Maria -- William Blair and Company -- Analyst

Yes. 2020 and longer term, yes.

Nish Vartanian -- President and Chief Executive Officer

We're working through our plans. We continue to work through our plans for 2020. And putting a finer point on that. But as we've said in the past, and I think I was pretty clear that, we expect mid-single digit revenue growth for this business through 2019 and into 2020 and into the future.

We do a pretty nice job in how we position ourselves from a product standpoint. We continue to improve ourselves from a competitive position within the marketplace. Doing a great job with our talent pipeline. We've got some fantastic people in this organization that just rally around and are focused on the mission of this company of protecting people's lives.

And we think we can continue to do a nice job in our top line at efficiencies and profitability of the company going forward. So we'll talk more about that in November.

Larry De Maria -- William Blair and Company -- Analyst

All right. Thank you. Good luck.

Nish Vartanian -- President and Chief Executive Officer

Thanks.

Ken Krause -- Senior Vice President, Chief Financial Officer, and Treasurer

Thank you, Larry.

Operator

Seeing that we have no more questions. At this time. I would like to turn the conference back over to Elyse Lorenzato for any closing remarks.

Elyse Lorenzato -- Director of Investor Relations

Thanks, Drew. On behalf of our entire team here, we want to thank you again for joining us this morning. If you missed a portion of the conference call, an audio replay and transcript will be available on our IR website for the next 90 days. We look forward to talking with you again soon and seeing many of you at our Investor Day on November 11th.

Thanks, again.

Operator

[Operator signoff]

Duration: 40 minutes

Call participants:

Elyse Lorenzato -- Director of Investor Relations

Nish Vartanian -- President and Chief Executive Officer

Ken Krause -- Senior Vice President, Chief Financial Officer, and Treasurer

Stanley Elliott -- Stifel Financial Corp. -- Analyst

Richard Eastman -- Robert W. Baird and Company -- Analyst

Edward Marshall -- Sidoti and Company LLC -- Analyst

Larry De Maria -- William Blair and Company -- Analyst

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