Federal Signal Corporation · NYSE:FSS
Federal Signal — Q2 2020 Earnings Presentation
17 slides from Federal Signal's earnings presentation, Jul 29, 2020
Slide 1: Federal Signal Q2 2020 Earnings Call
Federal Signal Q2 2020 Earnings Call July 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: Introductory CEO Remarks
Introductory CEO Remarks • Profound thanks to employees for their commitment during this uncertain period • Key area of focus has been on the safety and wellbeing of our employees; with that in mind, we were proactive in taking a number of important measures • Our businesses are essential to support
Slide 4: Q2 Highlights
Q2 Highlights * • Net sales of $270 M vs. $324 M • Operating income of $31.3 M vs. $46.3 M • Adjusted EBITDA of $45.4 M vs. $57.1 M • Adjusted EBITDA margin of 16.8% vs. 17.6% • Above high end of target range • GAAP EPS of $0.35 vs. $0.54 • Adjusted EPS of $0.42 vs. $0.55 • Orders of $201 M vs. $308
Slide 5: Group and Corporate Results
Group and Corporate Results $ millions, except % Q2 2020 Q2 2019 % Change ESG Orders 157.7 253.2 -38% Sales 214.2 267.2 -20% Operating income 28.6 44.8 -36% Operating margin 13.4% 16.8% Adjusted EBITDA 40.9 54.4 -25% Adjusted EBITDA margin 19.1% 20.4% SSG Orders 43.6 54.8 -20% Sales 55.9 57.1 -2% Op
Slide 6: Consolidated Statement of Operations
Consolidated Statement of Operations $ millions, except % and per share Q2 2020 Q2 2019 $ Change % Change Net sales $ 270.1 $ 324.3 $ (54.2) -17% Gross profit 70.3 89.0 (18.7) -21% SEG&A expenses 37.4 41.8 (4.4) -11% Acquisition and integration related expenses 0.3 0.9 (0.6) -67% Restructuring 1.3 -
Slide 7: Adjusted Earnings per Share
Adjusted Earnings per Share ($ in millions) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net income $ 21.4 $ 32.8 $ 44.8 $ 50.3 Add: Income tax expense 6.1 11.6 13.3 17.5 Income before income taxes 27.5 44.4 58.1 67.8 Add: Acquisition and integration-related expenses 0.3
Slide 8: Financial Strength and Flexibility
Financial Strength and Flexibility * • Cash and cash equivalents of $73.6 M • Paid down ~$36 M of debt in Q2; $245 M of total debt outstanding • Net debt of ~$171 M ** Strong capital • In July 2019, we executed a five-year, $500 M revolving credit facility, with structure flexibility to increase by
Slide 9: CEO Remarks
CEO Remarks Factors which provide confidence to reinstate 2020 outlook and support long-term growth: • Aim to consistently operate within target EBITDA margin ranges • Demonstrated ability to manage costs, invoke contingency plans and optimize production • Healthy backlog and improving order intake
Slide 10: Reinstating 2020 Guidance
Reinstating 2020 Guidance Adjusted EPS* for 2020 expected to be in a range of $1.53 to $1.65 Key Assumptions No significant COVID-related disruptions for Interest rate of ~3% the duration of the year Full-year effective income tax rate of ~25% Depreciation and amortization expense to ~62 M
Slide 11: Federal Signal Q2 2020 Earnings Call Q&A
Federal Signal Q2 2020 Earnings Call Q&A July 29, 2020 Jennifer Sherman, President & Chief Executive Officer Ian Hudson, SVP, Chief Financial Officer 11
Slide 12: 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 13: Appendix
Federal Signal Q2 2020 Earnings Call Appendix 13
Slide 14: Consolidated Adjusted EBITDA
Consolidated Adjusted EBITDA $ millions, except % Q2 2020 Q2 2019 Net income $ 21.4 $ 32.8 Add: Interest expense 1.8 2.0 Acquisition and integration-related expenses 0.3 0.9 Restructuring 1.3 - Coronavirus-related expenses 1.4 - Purchase accounting effects * 0.0 0.1 Other expense (income), net 2.0 (
Slide 15: Segment Adjusted EBITDA
Segment Adjusted EBITDA ESG $ millions, except % Q2 2020 Q2 2019 Operating Income $ 28.6 $ 44.8 Add: Acquisition and integration-related expenses 0.1 0.6 Restructuring 0.7 - Coronavirus-related expenses 1.3 - Purchase accounting effects * 0.0 0.1 Depreciation and amortization 10.2 8.9 Adjusted EBITD
Slide 16: 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 17: Federal Signal: Moves. Cleans. Protects.
ff: FEDERAL SIGNAL Moves. Cleans. Protects.