Federal Signal Corporation · NYSE:FSS
Federal Signal — Q4 2021 Earnings Presentation
20 slides from Federal Signal's earnings presentation, Mar 1, 2022
Slide 1: Federal Signal Q4 2021 Earnings Call
Federal Signal Q4 2021 Earnings Call March 1, 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: 2021 in Review
2021 in Review • Delivered 2nd highest adjusted EPS in the Company’s history • Record orders and EBITDA margin performance towards high end of current target range • Made good progress against several long-term objectives in 2021: Investment in internal growth opportunities, including investments
Slide 4: Full-Year Financial Highlights
Full-Year Financial Highlights * • Net sales of $1.21 B, up $82 M, or 7% • Operating income of $130.7 M, vs. $131.4 M • Adjusted EBITDA of $180.5 M, vs. $182.2 M • Adjusted EBITDA margin of 14.9%, vs. 16.1% • GAAP EPS of $1.63, up $0.07, or 4% • Adjusted EPS of $1.75, up $0.08, or 5% * Comparisons v
Slide 5: Q4 Highlights
Q4 Highlights * • Net sales of $301 M, up $7 M, or 2% • Operating income of $30.1 M, vs. $33.8 M • Adjusted EBITDA of $40.0 M, vs. $47.0 M • Adjusted EBITDA margin of 13.3%, vs. 15.9% • GAAP EPS of $0.32, vs. $0.42 • GAAP earnings include $10.3 M pre-tax pension settlement charge, partially offset b
Slide 6: Group and Corporate Results
Group and Corporate Results $ millions, except % Q4 2021 Q4 2020 % Change ESG Orders $ 381.3 $ 224.8 70% Sales 245.5 237.6 3% Operating income 24.1 33.3 -28% Operating margin 9.8% 14.0% Adjusted EBITDA 36.2 44.2 -18% Adjusted EBITDA margin 14.7% 18.6% SSG Orders 62.5 51.3 22% Sales 55.9 57.2 -2% Ope
Slide 7: Income from Continuing Operations
Income from Continuing Operations $ millions, except % and per share Q4 2021 Q4 2020 $ Change % Change Net sales $ 301.4 $ 294.8 $ 6.6 2% Gross profit 67.4 75.9 (8.5) -11% SEG&A expenses 37.6 38.4 (0.8) -2% Amortization expense 2.7 2.4 0.3 13% Acquisition and integration-related (benefits) expenses
Slide 8: Adjusted Earnings per Share
Adjusted Earnings per Share ($ in millions, except per share data) Three Months Ended December 31, Twelve Months Ended December 31, 2021 2020 2021 2020 Income from continuing operations $ 19.5 $ 26.0 $ 100.6 $ 96.1 Add (less): Income tax (benefit) expense (0.3) 7.6 17.0 28.5 Income before income tax
Slide 9: Financial Strength and Flexibility
Financial Strength and Flexibility * • Cash and cash equivalents of $41 M • Net debt of ~$242 M ** • In July 2019, we executed a five-year, $500 M revolving credit facility, with flexibility to Strong capital increase by additional $250 M for acquisitions structure • No debt maturities until July 20
Slide 10: CEO Comments – Q4 Performance
CEO Comments – Q4 Performance • Record quarterly orders and backlog, with orders > $1.5 B for first time in Company’s history; municipal and industrial orders both up ~50% vs. last year • With lead times extended and chassis supply tightness, Q4 orders include some “pull forward”, which could cause
Slide 11: CEO Comments - Looking Ahead
CEO Comments - Looking Ahead • Remain focused on delivering strong results, while continuing to execute long-term strategy • Balance sheet provides opportunities to drive both organic growth and M&A • Aftermarket business has grown to represent ~30% of ESG revenues; additional projects underway to d
Slide 12: CEO Comments - Looking Ahead (cont.)
CEO Comments - Looking Ahead (cont.) • Seeing benefits from federal stimulus funding in our municipal orders • Expect that infrastructure bill could provide meaningful benefits for most of our product offerings • Continue to be bullish about safe-digging opportunity and expect to see an uptick in de
Slide 13: 2022 Outlook
2022 Outlook Adjusted EPS* ranging from $1.76 to $2.00 Key Assumptions Revenue of $1.35 B to $1.45 B, including full-year Although seasonal effects typically result in contribution from 2021 acquisitions; represents Q1 earnings being lower than subsequent YoY growth of 11% - 20% vs. $1.21 B in 2
Slide 14: Q&A
Federal Signal Q4 2021 Earnings Call Q&A March 1, 2022 Jennifer Sherman, President & Chief Executive Officer Ian Hudson, SVP, Chief Financial Officer 14
Slide 15: 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 SVP, Chief Financial Officer IHudson@federalsignal.com 15
Slide 16: Appendix
Federal Signal Q4 2021 Earnings Call Appendix 16
Slide 17: Consolidated Adjusted EBITDA
Consolidated Adjusted EBITDA Consolidated Three Months Ended December 31, Twelve Months Ended December 31, $ millions, except % 2021 2020 2021 2020 Income from continuing operations $ 19.5 $ 26.0 $ 100.6 $ 96.1 Add (less): Interest expense 1.2 1.2 4.5 5.7 Pension settlement charges 10.3 - 10.3 - Acq
Slide 18: Segment Adjusted EBITDA
Segment Adjusted EBITDA ESG $ millions, except % Q4 2021 Q4 2020 Operating Income $ 24.1 $ 33.3 Add: Acquisition and integration-related expenses 0.1 0.1 Purchase accounting effects * - 0.1 Depreciation and amortization 12.0 10.7 Adjusted EBITDA $ 36.2 $ 44.2 Net Sales $ 245.5 $ 237.6 Adjusted EBITD
Slide 19: Non-GAAP Measures
Non-GAAP Measures • Adjusted income from continuing operations and earnings per share (“EPS”) - The Company believes that modifying its 2021 and 2020 income from continuing operations and diluted EPS provides additional measures which are representative of the Company’s underlying performance and im
Slide 20: Federal Signal
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