Federal Signal Corporation · NYSE:FSS
Federal Signal — Q4 2020 Earnings Presentation
21 slides from Federal Signal's earnings presentation, Feb 25, 2021
Slide 1: Federal Signal Q4 2020 Earnings Call
Federal Signal Q4 2020 Earnings Call February 25, 2021 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: Introductory CEO Comments
Introductory CEO Comments • Profound thanks to employees for their commitment in these challenging times • COVID-19 response remains a top priority: • Safety and wellbeing of our employees • Implemented a host of measures to establish a safe workplace • Launched company-wide initiative to raise awar
Slide 4: 2020 in Review
2020 in Review • Delivered 2nd highest adjusted EPS in our history • 40 bp year-over-year improvement in adjusted EBITDA margins, with both groups exceeding high end of target ranges • Despite pandemic, aggressive in taking actions to position the Company for future growth in three key areas: 1) Inv
Slide 5: OSW Acquisition
OSW Acquisition Highly strategic acquisition which delivers on our objective of geographic expansion of our dump truck body and trailer platform; adds three premier brands that serve attractive markets on the West Coast, in Arizona and in parts of Canada Current TBEI markets 3rd party install site W
Slide 6: OSW Acquisition
OSW Acquisition • OSW’s results in 2020 were impacted by pandemic, but it has strong brands, several long-term contracts and a reputation for making a quality product • Acquisition extends our current product offerings, and fills several gaps in TBEI’s existing trailer portfolio • Expect acquisition
Slide 7: Full-Year Financial Highlights
Full-Year Financial Highlights * • Net sales of $1.13 B, vs. $1.22 B • Operating income of $131.4 M, vs. $147.1 M • Adjusted EBITDA of $182.2 M, vs. $191.3 M • Adjusted EBITDA margin of 16.1%, vs. 15.7% • Above high end of target range • ESG and SSG both reported adjusted EBITDA margin above target
Slide 8: Q4 Highlights
Q4 Highlights * • Net sales of $295 M, vs. $314 M • Operating income of $33.8 M, vs. $36.4 M • Adjusted operating margin of 12.0%, vs. 11.9% • Adjusted EBITDA of $47.0 M, vs. $48.5 M • Adjusted EBITDA margin of 15.9%, vs. 15.4% • GAAP EPS of $0.42, vs. $0.48 • Adjusted EPS of $0.44, vs. $0.48 • Orde
Slide 9: Group and Corporate Results
Group and Corporate Results $ millions, except % Q4 2020 Q4 2019 % Change ESG Orders $ 224.8 $ 270.9 -17% Sales 237.6 252.2 -6% Operating income 33.3 33.0 1% Operating margin 14.0% 13.1% Adjusted EBITDA 44.2 43.8 1% Adjusted EBITDA margin 18.6% 17.4% SSG Orders 51.3 62.3 -18% Sales 57.2 62.2 -8% Ope
Slide 10: Income from Continuing Operations
Income from Continuing Operations $ millions, except % and per share Q4 2020 Q4 2019 $ Change % Change Net sales $ 294.8 $ 314.4 $ (19.6) -6% Gross profit 75.9 81.5 (5.6) -7% SEG&A expenses 40.8 44.5 (3.7) -8% Acquisition and integration related expenses 1.3 0.6 0.7 NM Operating income 33.8 36.4 (2.
Slide 11: Adjusted Earnings per Share
Adjusted Earnings per Share ($ in millions) Three Months December 31, Twelve Months Ended December 31, 2020 2019 2020 2019 Income from continuing operations $ 26.0 $ 29.7 $ 96.1 $ 108.4 Add: Income tax expense 7.6 4.8 28.5 30.2 Income before income taxes 33.6 34.5 124.6 138.6 Add: Acquisition and in
Slide 12: Financial Strength and Flexibility
Financial Strength and Flexibility * • Cash and cash equivalents of $81.7 M • Paid down ~$32 M of debt in Q4; $210 M of total debt outstanding • Net debt of ~$128 M ** Strong capital • In July 2019, we executed a five-year, $500 M revolving credit facility, with structure flexibility to increase by
Slide 13: Looking Ahead
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 ~25% of ESG revenues; additional projects underway to drive further gr
Slide 14: 2021 Outlook
2021 Outlook Adjusted EPS* ranging from $1.73 to $1.85 Represents increase of 4% to 11% over 2020* Key Assumptions Revenue growth Interest rate of 2-3% Double-digit improvement in pre-tax Effective income tax rate of ~24%, earnings including estimated discrete tax benefits Depreciation and
Slide 15: Q&A
Federal Signal Q4 2020 Earnings Call Q&A February 25, 2021 Jennifer Sherman, President & Chief Executive Officer Ian Hudson, SVP, Chief Financial Officer 15
Slide 16: 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 17: Appendix
Federal Signal Q4 2020 Earnings Call Appendix 17
Slide 18: Consolidated Adjusted EBITDA
Consolidated Adjusted EBITDA $ millions, except % Q4 2020 Q4 2019 Income from continuing operations $ 26.0 $ 29.7 Add: Interest expense 1.2 1.8 Acquisition and integration-related expenses 1.3 0.6 Coronavirus-related expenses 0.1 - Purchase accounting effects * 0.1 0.1 Other (income) expense, net (1
Slide 19: Segment Adjusted EBITDA
Segment Adjusted EBITDA ESG $ millions, except % Q4 2020 Q4 2019 Operating Income $ 33.3 $ 33.0 Add: Acquisition and integration-related expenses 0.1 0.1 Purchase accounting effects * 0.1 0.1 Depreciation and amortization 10.7 10.6 Adjusted EBITDA $ 44.2 $ 43.8 Net Sales $ 237.6 $ 252.2 Adjusted EBI
Slide 20: Non-GAAP Measures
Non-GAAP Measures • Adjusted income from continuing operations and earnings per share (“EPS”) - The Company believes that modifying its 2020 and 2019 income from continuing operations and diluted EPS provides additional measures which are representative of the Company’s underlying performance and im
Slide 21: Federal Signal
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