Federal Signal Corporation · NYSE:FSS
Federal Signal — Q3 2020 Earnings Presentation
18 slides from Federal Signal's earnings presentation, Oct 29, 2020
Slide 1: Federal Signal Q3 2020 Earnings Call
Federal Signal Q3 2020 Earnings Call October 29, 2020 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: Q3 Highlights
Q3 Highlights * • Net sales of $280 M vs. $309 M • Operating income of $34.0 M vs. $38.6 M • Adjusted EBITDA of $45.9 M vs. $49.8 M • Adjusted EBITDA margin of 16.4% vs. 16.1% • Above high end of target range • GAAP EPS of $0.41 vs. $0.46 • Adjusted EPS of $0.42 vs. $0.47 • Orders of $266 M, up $65
Slide 4: Group and Corporate Results
Group and Corporate Results $ millions, except % Q3 2020 Q3 2019 % Change ESG Sales 231.0 254.0 -9% Operating income 33.0 35.9 -8% Operating margin 14.3% 14.1% Adjusted EBITDA 43.9 46.0 -5% Adjusted EBITDA margin 19.0% 18.1% SSG Sales 48.8 54.8 -11% Operating income 7.4 8.6 -14% Operating margin 15.
Slide 5: Consolidated Statement of Operations
Consolidated Statement of Operations $ millions, except % and per share Q3 2020 Q3 2019 $ Change % Change Net sales $ 279.8 $ 308.8 $ (29.0) -9% Gross profit 72.6 82.0 (9.4) -11% SEG&A expenses 38.4 43.0 (4.6) -11% Acquisition and integration related expenses 0.2 0.4 (0.2) -50% Operating income 34.0
Slide 6: Adjusted Earnings per Share
Adjusted Earnings per Share ($ in millions) Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Net income $ 25.3 $ 28.4 $ 70.1 $ 78.7 Add: Income tax expense 7.6 7.9 20.9 25.4 Income before income taxes 32.9 36.3 91.0 104.1 Add: Acquisition and integration-related e
Slide 7: Financial Strength and Flexibility
Financial Strength and Flexibility * • Cash and cash equivalents of $66.2 M • Paid down ~$7 M of debt in Q3; $239 M of total debt outstanding • Net debt of ~$173 M ** Strong capital • In July 2019, we executed a five-year, $500 M revolving credit facility, with structure flexibility to increase by a
Slide 8: CEO Comments
CEO Comments • Profound thanks to employees for their commitment during these challenging times • Key area of ongoing focus has been on the safety and wellbeing of our employees • Strategic decisions made in prior years continue to have benefits and allow for high-level performance • Diversification
Slide 9: Investing for Future Growth
Investing for Future Growth • Significant investments in our plants to add capacity to support growth and gain efficiencies through use of new machinery and equipment • Major investments include Vactor, Rugby and MRL expansions • Acquisition of Lake Crystal facility expected to facilitate further ma
Slide 10: 2020 Outlook
2020 Outlook Raising adjusted EPS* outlook range to a new range of $1.58 to $1.66, from a range of $1.53 to $1.65 New range would represent the second highest adjusted EPS* in our history, surpassed only by the record set last year Key Assumptions No significant COVID-related disruptions for Int
Slide 11: Looking Ahead
Looking Ahead • Remain focused on delivering strong results, while continuing to execute our long-term strategy • We are positioning Federal Signal so that we will fully participate in the post-pandemic recovery and gain market share by: • Increasing capacity within our facilities • Reducing lead ti
Slide 12: Federal Signal Q3 2020 Earnings Call Q&A
Federal Signal Q3 2020 Earnings Call Q&A October 29, 2020 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 CONTACTS 630-954-2000 Ian Hudson Svetlana Vinokur SVP, Chief Financial Officer VP, Treasurer and Corporate Development IHuds
Slide 14: Appendix
Federal Signal Q3 2020 Earnings Call Appendix 14
Slide 15: Consolidated Adjusted EBITDA
Consolidated Adjusted EBITDA $ millions, except % Q3 2020 Q3 2019 Net income $ 25.3 $ 28.4 Add: Interest expense 1.2 2.1 Acquisition and integration-related expenses 0.2 0.4 Coronavirus-related expenses 0.4 - Purchase accounting effects * 0.1 0.0 Other (income) expense, net (0.1) 0.2 Income tax expe
Slide 16: Segment Adjusted EBITDA
Segment Adjusted EBITDA ESG $ millions, except % Q3 2020 Q3 2019 Operating Income $ 33.0 $ 35.9 Add: Acquisition and integration-related expenses 0.1 0.1 Coronavirus-related expenses 0.3 - Purchase accounting effects * 0.1 0.0 Depreciation and amortization 10.4 10.0 Adjusted EBITDA $ 43.9 $ 46.0 Net
Slide 17: Non-GAAP Measures
Non-GAAP Measures • Adjusted net income and earnings per share (“EPS”) - The Company believes that modifying its 2020 and 2019 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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