Federal Signal Corporation · NYSE:FSS
Federal Signal — Q1 2022 Earnings Presentation
18 slides from Federal Signal's earnings presentation, May 2, 2022
Slide 1: Federal Signal Q1 2022 Earnings Call
Federal Signal Q1 2022 Earnings Call May 2, 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: Q1 Highlights
Q1 Highlights * • Net sales of $330 M, up $51 M, or 18% • Operating income of $28.5 M, up $0.7 M, or 3% • Adjusted EBITDA of $42.2 M, up $1.0 M, or 2% • Adjusted EBITDA margin of 12.8%, compared to 14.8% • GAAP EPS of $0.33, vs. $0.36 • Adjusted EPS of $0.34, vs. $0.38 • Record orders of $453 M, up
Slide 4: Group and Corporate Results
Group and Corporate Results $ millions, except % Q1 2022 Q1 2021 % Change ESG Orders 387.6 324.2 20% Sales 274.2 228.1 20% Operating income 26.8 27.1 -1% Operating margin 9.8% 11.9% Adjusted EBITDA 39.3 39.3 0% Adjusted EBITDA margin 14.3% 17.2% SSG Orders 65.0 59.9 9% Sales 56.0 50.7 10% Operating
Slide 5: Consolidated Statement of Operations
Consolidated Statement of Operations $ millions, except % and per share Q1 2022 Q1 2021 $ Change % Change Net sales $ 330.2 $ 278.8 $ 51.4 18% Gross profit 75.7 68.8 6.9 10% SEG&A expenses 43.6 38.2 5.4 14% Amortization expense 3.3 2.6 0.7 27% Acquisition and integration related expenses 0.3 0.2 0.1
Slide 6: Adjusted Earnings per Share
Adjusted Earnings per Share ($ in millions) Three Months Ended March 31, 2022 2021 Net income, as reported $ 20.5 $ 22.2 Add: Income tax expense 7.1 5.0 Income before income taxes 27.6 27.2 Add: Acquisition and integration-related expenses 0.3 0.2 Coronavirus-related expenses (1) - 0.9 Purchase acco
Slide 7: Financial Strength and Flexibility
Financial Strength and Flexibility * • Cash and cash equivalents of $39 M • Net debt of ~$291 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 – Q1 Performance
CEO Remarks – Q1 Performance • Challenging start to the year, with conditions improving as the quarter progressed Spike in coronavirus-related absences in January, with dramatic reduction in cases in February and March After slow start, noted improvement in chassis deliveries within our dump tru
Slide 9: CEO Remarks – Market Conditions
CEO Remarks – Market Conditions • Demand remains at unprecedented levels, with orders from both municipal and industrial customers up ~25% vs. last year • Municipal demand includes benefits from federal stimulus, with orders for sewer cleaners and street sweepers both up by 40%+ vs. last year • Stro
Slide 10: CEO Remarks – Growth Initiatives
CEO Remarks – Growth Initiatives • Safe-digging Introduction of TRUVAC TRXX trailer further expands our suite of safe-digging product offerings • Broadband infrastructure Broad range of products to meet demand expected from infrastructure legislation • Electrification Recent launch of hybrid s
Slide 11: 2022 Outlook
2022 Outlook Raising low end of full-year Adjusted EPS* Outlook by $0.04, establishing a new range of $1.80 to $2.00 Key Assumptions Raising low end of full-year net sales outlook Interest expense of ~$7.5 M - $9 M by $30 million, establishing a new range of Effective tax rate resets to a norm
Slide 12: Federal Signal Q1 2022 Earnings Call Q&A
Federal Signal Q1 2022 Earnings Call Q&A May 2, 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 Q1 2022 Earnings Call Appendix 14
Slide 15: Consolidated Adjusted EBITDA
Consolidated Adjusted EBITDA $ millions, except % Q1 2022 Q1 2021 Net income $ 20.5 $ 22.2 Add: Interest expense 1.3 1.1 Acquisition and integration-related expenses 0.3 0.2 Coronavirus-related expenses - 0.9 Purchase accounting effects - 0.1 Other (income) expense, net (0.4) (0.5) Income tax expens
Slide 16: Segment Adjusted EBITDA
Segment Adjusted EBITDA $ millions, except % Q1 2022 Q1 2021 Operating Income $ 26.8 $ 27.1 Add: Acquisition and integration-related expenses 0.1 0.0 Coronavirus-related expenses - 0.8 Purchase accounting effects - 0.1 Depreciation and amortization 12.4 11.3 Adjusted EBITDA $ 39.3 $ 39.3 Net Sales $
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
a FEDERAL SIGNAL Moves. Cleans. Protects. a Ld a -_ * 4 ant , > ie u Se — ~ ae | wh + ett Phil bs erty it wa,