Federal Signal Corporation · NYSE:FSS
Federal Signal — Q2 2024 Earnings Presentation
18 slides from Federal Signal's earnings presentation, Jul 25, 2024
Slide 1: Federal Signal Q2 2024 Earnings Call
Federal Signal Q2 2024 Earnings Call July 25, 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: Q2 Highlights
Q2 Highlights * • Record net sales of $490 M, up $48 M, or 11% (all organic) • Operating income of $81.1 M, up $21.7 M, or 37% • Adjusted EBITDA of $97.7 M, up $22.2 M, or 29% • Adjusted EBITDA margin of 19.9%, compared to 17.1% • GAAP EPS of $0.99, up $0.33, or 50% • Record adjusted EPS of $0.95, u
Slide 4: Group and Corporate Results
Group and Corporate Results $ millions, except % Q2 2024 Q2 2023 % Change ESG Orders 396.2 408.6 -3% Sales 408.8 373.0 10% Operating income 72.9 56.2 30% Operating margin 17.8% 15.1% Adjusted EBITDA 88.2 70.7 25% Adjusted EBITDA margin 21.6% 19.0% SSG Orders 76.8 71.6 7% Sales 81.6 69.4 18% Operatin
Slide 5: Consolidated Statement of Operations
Consolidated Statement of Operations $ milli ons, except % and per share Q2 2024 Q2 2023 $ Change % Change Net sales $ 490.4 $ 442.4 $ 48.0 11% Gross profit 144.0 117.3 26.7 23% SEG&A expenses 58.3 53.4 4.9 9% Amortization expense 3.8 3.9 (0.1) -3% Acquisition and integration related expenses, net 0
Slide 6: Adjusted Earnings per Share
Adjusted Earnings per Share ($ in millions) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net income, as reported $ 60.8 $ 40.3 $ 112.4 $ 67.7 Add: Income tax expense 16.7 12.4 16.0 19.7 Income before income taxes 77.5 52.7 128.4 87.4 Add: Acquisition and integration-rela
Slide 7: Financial Strength and Flexibility
Financial Strength and Flexibility * • Cash and cash equivalents of $49 M • Net debt of ~$207 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: Q2 Performance
CEO Remarks: Q2 Performance • Outstanding execution by both groups contributed to a record- setting Q2 across net sales and adjusted EPS • Environmental Solutions Group highlights: YoY net sales growth of 10%; 25% increase in adjusted EBITDA 260-basis point YoY increase in adjusted EBITDA margin
Slide 9: CEO Remarks: Market Conditions
CEO Remarks: Market Conditions • Demand for our products remains strong, as evidenced by orders of $473 M in Q2 this year vs. record $480 M in Q2 last year • Q2 backlog at ~$1.08 B, up 7% YoY; provides excellent visibility for 2H24 and into 2025 • End-market diversification efforts and healthy fundi
Slide 10: CEO Remarks: Multi-Year Growth Targets
CEO Remarks: Multi-Year Growth Targets Targeting Low Double-Digit Annual Revenue Growth Through The Cycle (Organic + M&A) Net Sales CAGR (’16A – ’23A) Total: ~14% Organic: ~7% 2016 2017 2018 2019 2020 2021 2022 2023 2024 Source: Management and Company Filings 10
Slide 11: Raising 2024 Outlook
Raising 2024 Outlook • Raising Full-Year Adjusted EPS1 Outlook to a new range of $3.20 to $3.35 • Increased from the prior range of $2.95 to $3.15 • New range would represent YoY growth of 24% - 30%, and the highest EPS level in our history • Full-year net sales of $1.85 B to $1.90 B • Would represe
Slide 12: Federal Signal Q2 2024 Earnings Call Q&A
Federal Signal Q2 2024 Earnings Call Q&A July 25, 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 CONTACTS 630-954-2000 Felix Boeschen VP, Corporate Strategy and Investor Relations fboeschen@federalsignal.com 13
Slide 14: Appendix
Federal Signal Q2 2024 Earnings Call Appendix 14
Slide 15: Consolidated Adjusted EBITDA
Consolidated Adjusted EBITDA $ millions, except % Q2 2024 Q2 2023 Net income $ 60.8 $ 40.3 Add: Interest expense, net 3.2 5.6 Acquisition and integration-related expenses, net 0.8 0.6 Other expense, net 0.4 1.1 Income tax expense 16.7 12.4 Depreciation and amortization 15.8 15.5 Consolidated adjuste
Slide 16: Segment Adjusted EBITDA
Segment Adjusted EBITDA ESG $ millions, except % Q2 2024 Q2 2023 Operating Income $ 72.9 $ 56.2 Add: Acquisition and integration-related expenses, net 0.6 0.2 Depreciation and amortization 14.7 14.3 Adjusted EBITDA $ 88.2 $ 70.7 Net Sales $ 408.8 $ 373.0 Adjusted EBITDA margin 21.6% 19.0% SSG $ mill
Slide 17: 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 18: Federal Signal: Moves. Cleans. Protects.
fp FEDERAL SIGNAL *" . "= Moves. Cleans. Protects.