Federal Signal Corporation · NYSE:FSS
Federal Signal — Q2 2022 Earnings Presentation
18 slides from Federal Signal's earnings presentation, Jul 27, 2022
Slide 1: Federal Signal Q2 2022 Earnings Call
Federal Signal Q2 2022 Earnings Call July 27, 2022 Jennifer Sherman, President & Chief Executive Officer Ian Hudson, SVP, Chief Financial Officer
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 * • Net sales of $367 M, up $32 M, or 10% • Operating income of $46.2 M, up $7.7 M, or 20% • Adjusted EBITDA of $58.2 M, up $6.3 M, or 12% • Adjusted EBITDA margin of 15.9%, compared to 15.5% • GAAP EPS of $0.55, up $0.07, or 15% • Adjusted EPS of $0.53, up $0.03, or 6% • Orders of $41
Slide 4: Group and Corporate Results
Group and Corporate Results $ millions, except % Q2 2022 Q2 2021 % Change ESG Orders 351.7 299.7 17% Sales 306.3 281.3 9% Operating income 39.1 38.5 2% Operating margin 12.8% 13.7% Adjusted EBITDA 51.6 50.6 2% Adjusted EBITDA margin 16.8% 18.0% SSG Orders 61.6 60.8 1% Sales 60.4 53.4 13% Operating i
Slide 5: Consolidated Statement of Operations
Consolidated Statement of Operations $ millions, except % and per share Q2 2022 Q2 2021 $ Change % Change Net sales $ 366.7 $ 334.7 $ 32.0 10% Gross profit 89.8 81.6 8.2 10% SEG&A expenses 42.1 40.0 2.1 5% Amortization expense 3.2 2.8 0.4 14% Acquisition and integration related (benefits) expenses (
Slide 6: Adjusted Earnings per Share
Adjusted Earnings per Share ($ in millions) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net income, as reported $ 33.5 $ 29.7 $ 54.0 $ 51.9 Add: Income tax expense 11.1 8.0 18.2 13.0 Income before income taxes 44.6 37.7 72.2 64.9 Add: Acquisition and integration-related
Slide 7: Financial Strength and Flexibility
Financial Strength and Flexibility * • Cash and cash equivalents of $31 M • Net debt of ~$296 M ** • In July 2019, we executed a five-year, $500 M revolving credit facility, Strong capital with flexibility to increase by additional $250 M for acquisitions structure • No debt maturities until July 20
Slide 8: CEO Remarks – Q2 Performance
CEO Remarks – Q2 Performance • Strong operational performance, despite ongoing supply-chain challenges • Double-digit increase in net sales and earnings during Q2, with improvement in gross margins • Q2 adjusted EBITDA margin at high end of target range; up 40 basis points year-over-year • ESG repor
Slide 9: CEO Remarks – Market Conditions
CEO Remarks – Market Conditions • Demand for our products and aftermarket offerings remains strong in both municipal and industrial markets, with YTD orders each up ~20% • Municipal dealer partners energized about market conditions moving into 2H 2022 and 2023; with impact of recent federal stimulus
Slide 10: CEO Remarks – Growth Initiatives
CEO Remarks – Growth Initiatives • Focused effort, aimed at providing solutions to solve customers’ problems, by incorporating state-of-the-art technological enhancements into developing new products • During Q2, introduced the Broom Badger, a compact, highly maneuverable street sweeper manufactured
Slide 11: 2022 Outlook
2022 Outlook Raising mid-point of full-year Adjusted EPS* Outlook by establishing a new range of $1.85 to $2.00, updated from previous range of $1.80 to $2.00 Key Assumptions Full-year net sales outlook of $1.38 B to $1.45 B Effective tax rate resets to a normalized Includes full-year contribu
Slide 12: Federal Signal Q2 2022 Earnings Call Q&A
Federal Signal Q2 2022 Earnings Call Q&A July 27, 2022 Jennifer Sherman, President & Chief Executive Officer Ian Hudson, SVP, Chief Financial Officer 12
Slide 13: Investor Information
Investor Information Stock Ticker - NYSE:FSS Company website: federalsignal.com/investors HEADQUARTERS 1415 West 22nd Street, Suite 1100 Oak Brook, IL 60523 INVESTOR RELATIONS 630-954-2000 Ian Hudson SVP, Chief Financial Officer IHudson@federalsignal.com 13
Slide 14: Appendix
Federal Signal Q2 2022 Earnings Call Appendix 14
Slide 15: Consolidated Adjusted EBITDA
Consolidated Adjusted EBITDA $ millions, except % Q2 2022 Q2 2021 Net income $ 33.5 $ 29.7 Add: Interest expense 1.9 1.1 Acquisition and integration-related (benefits) expenses (1.7) 0.3 Coronavirus-related expenses - 0.3 Purchase accounting effects - 0.2 Other income, net (0.3) (0.3) Income tax exp
Slide 16: Segment Adjusted EBITDA
Segment Adjusted EBITDA ESG $ millions, except % Q2 2022 Q2 2021 Operating Income $ 39.1 $ 38.5 Add: Acquisition and integration-related (benefits) expenses (0.1) 0.1 Coronavirus-related expenses - 0.2 Purchase accounting effects - 0.2 Depreciation and amortization 12.6 11.6 Adjusted EBITDA $ 51.6 $
Slide 17: Non-GAAP Measures
Non-GAAP Measures • Adjusted net income and earnings per share (“EPS”) - The Company believes that modifying its 2022 and 2021 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
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