Federal Signal Corporation · NYSE:FSS
Federal Signal — Q3 2024 Earnings Presentation
19 slides from Federal Signal's earnings presentation, Oct 31, 2024
Slide 1: Federal Signal Q3 2024 Earnings Call
Federal Signal Q3 2024 Earnings Call October 31, 2024 Jennifer Sherman, President & Chief Executive Officer Ian Hudson, SVP, Chief Financial Officer Felix Boeschen, VP, Corporate Strategy & Investor Relations
Slide 2: Safe Harbor
Safe Harbor This presentation contains unaudited financial information and various forward-looking statements as of the date hereof and we undertake no obligation to update these forward- looking statements regardless of new developments or otherwise. Statements in this presentation that are not his
Slide 3: Q3 Highlights
Q3 Highlights ** • Net sales of $474 M, up $28 M, or 6% (all organic) • Operating income of $75.9 M, up $13.4 M, or 21% • Net income of $53.9 M, up $10.6 M, or 24% • Adjusted EBITDA* of $93.0 M, up $14.5 M, or 18% • Adjusted EBITDA margin* of 19.6%, compared to 17.6% • GAAP Diluted EPS of $0.87, up
Slide 4: Group and Corporate Results
Group and Corporate Results $ millions, except % Q3 2024 Q3 2023 % Change ESG Orders $ 352.7 $ 374.8 -6% Net sales 398.2 373.0 7% Operating income 71.5 57.2 25% Operating margin 18.0% 15.3% Adjusted EBITDA* 87.2 72.0 21% Adjusted EBITDA margin* 21.9% 19.3% SSG Orders 73.2 75.4 -3% Net sales 76.0 73.
Slide 5: Consolidated Statement of Operations
Consolidated Statement of Operations $ millions, except % and per share Q3 2024 Q3 2023 $ Change % Change Net sales $ 474.2 $ 446.4 $ 27.8 6% Cost of sales 333.8 328.7 5.1 2% Gross profit 140.4 117.7 22.7 19% SEG&A expenses 60.1 50.6 9.5 19% Amortization expense 3.8 3.9 (0.1) -3% Acquisition and int
Slide 6: Adjusted Earnings per Share
Adjusted Earnings per Share * ($ in millions) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Net income, as reported $ 53.9 $ 43.3 $ 166.3 $ 111.0 Add: Income tax expense 18.7 13.8 34.7 33.5 Income before income taxes 72.6 57.1 201.0 144.5 Add: Acquisition and i
Slide 7: Financial Strength and Flexibility
Financial Strength and Flexibility * • Cash and cash equivalents of $74 M • Net debt of ~$158 M ** • In October 2022, executed a five-year, $800 M revolving credit facility, with Strong capital opportunity to increase further by the greater of (i) $400 M or (ii) 100% of TTM structure consolidated EB
Slide 8: CEO Remarks – Q3 Performance
CEO Remarks – Q3 Performance • Outstanding execution by both groups contributed to a record- setting Q3 across consolidated net sales, adjusted EPS* and adjusted EBITDA margin* • Environmental Solutions Group highlights: YoY net sales growth of 7%; 21% increase in adjusted EBITDA* 260-basis poin
Slide 9: CEO Remarks: Market Conditions
CEO Remarks: Market Conditions • End-market demand for our products remains healthy, as evidenced by orders of $426 M in Q3 (down 5% YoY) and $1.4 B YTD (flat YoY) Includes YoY chassis pass-through order headwind of ~$17 M YTD • Domestic publicly-funded orders +8% YoY, with strength in demand for
Slide 10: CEO Remarks: Internal Initiatives
CEO Remarks: Internal Initiatives • Continued execution on M&A growth strategy Completed acquisition of Standard Equipment on October 4, 2024 for initial purchase price of $38.8 M Expect acquisition to be accretive to 2025 EPS and cash flow Marks 12th acquisition since 2016; surgically evaluat
Slide 11: Raising 2024 Outlook
Raising 2024 Outlook • Raising Full-Year Adjusted EPS1 Outlook to a new range of $3.30 to $3.40 • Increased from the prior range of $3.20 to $3.35 • New range would represent YoY growth of 28% - 32%, and the highest EPS level in our history • Narrowing Full-Year Net Sales outlook to a new range of $
Slide 12: Q&A
Federal Signal Q3 2024 Earnings Call Q&A October 31, 2024 Jennifer Sherman, President & Chief Executive Officer Ian Hudson, SVP, Chief Financial Officer Felix Boeschen, VP, Corporate Strategy & Investor Relations 12
Slide 13: Investor Information
Investor Information Stock Ticker - NYSE:FSS Company website: federalsignal.com/investors HEADQUARTERS 1333 Butterfield Road, Suite 500 Downers Grove, IL 60515 INVESTOR RELATIONS 630-954-2000 Felix Boeschen VP, Corporate Strategy and Investor Relations fboeschen@federalsignal.com 13
Slide 14: Appendix
Federal Signal Q3 2024 Earnings Call Appendix 14
Slide 15: Non-GAAP Measures
Non-GAAP Measures • Adjusted net income and earnings per share (“EPS”) - The Company believes that modifying its 2024 and 2023 net income and diluted EPS provides additional measures which are representative of the Company’s underlying performance and improves the comparability of results between re
Slide 16: Consolidated Adjusted EBITDA
Consolidated Adjusted EBITDA $ millions, except % Q3 2024 Q3 2023 Net income $ 53.9 $ 43.3 Add: Interest expense, net 3.0 5.1 Acquisition and integration-related expenses, net 0.6 0.7 Other expense, net 0.3 0.3 Income tax expense 18.7 13.8 Depreciation and amortization 16.5 15.3 Consolidated adjuste
Slide 17: Segment Adjusted EBITDA
Segment Adjusted EBITDA ESG $ millions, except % Q3 2024 Q3 2023 Operating Income $ 71.5 $ 57.2 Add: Acquisition and integration-related expenses, net 0.3 0.5 Depreciation and amortization 15.4 14.3 Adjusted EBITDA $ 87.2 $ 72.0 Net Sales $ 398.2 $ 373.0 Adjusted EBITDA margin 21.9% 19.3% SSG $ mill
Slide 18: Cash Conversion
Cash Conversion $ in millions, except % Net Cash Provided by Operating Activities - Nine Months Ended September 30, 2024 $ 140.7 Less: Net Cash Provided by Operating Activities - Six Months Ended June 30, 2024 $ 71.9 Net Cash Provided by Operating Activities - Three Months Ended September 30, 2024 (
Slide 19: Federal Signal – Moves. Cleans. Protects.
fp FEDERAL SIGNAL *" . "= Moves. Cleans. Protects.