Federal Signal Corporation · NYSE:FSS
Federal Signal — Q1 2020 Earnings Presentation
21 slides from Federal Signal's earnings presentation, Apr 29, 2020
Slide 1: Federal Signal Q1 2020 Earnings Call
Federal Signal Q1 2020 Earnings Call April 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: Executive Summary
Executive Summary • Portfolio of businesses includes many market-leading brands with solid fundamentals • Strong financial position with ample liquidity • History of robust cash flow generation • High-performing culture • Clearly-defined strategy • Experienced team with a proven track record of anti
Slide 4: Introductory CEO Remarks
Introductory CEO Remarks • Profound thanks to employees for their commitment during this uncertain period • Consolidated Q1 results represent strong start to the year, with impressive year-over-year improvement across the board • Key area of focus has been on the safety and wellbeing of our employee
Slide 5: How Federal Signal is Helping
How Federal Signal is Helping Supporting Local Food Banks Where We Live And Operate Ways in which our equipment can be used to clean and sanitize Protective Face Shield Production at our University Park Facility 5
Slide 6: Q1 Highlights
Q1 Highlights * • Net sales of $286 M, up $12 M, or 4% • Operating income of $32.3 M, up $6.5 M, or 25% • Adjusted EBITDA of $43.9 M, up $8.0 M, or 22% • Adjusted EBITDA margin of 15.3%, compared to 13.1% • GAAP EPS of $0.38, up $0.09, or 31% • Adjusted EPS of $0.39, up $0.09, or 30% • Orders of $30
Slide 7: Group and Corporate Results
Group and Corporate Results $ millions, except % Q1 2020 Q1 2019 % Change ESG Orders 237.5 243.7 -3% Sales 233.0 219.5 6% Operating income 29.4 25.7 14% Operating margin 12.6% 11.7% Adjusted EBITDA 40.0 34.7 15% Adjusted EBITDA margin 17.2% 15.8% SSG Orders 66.4 55.3 20% Sales 53.1 54.3 -2% Operatin
Slide 8: Consolidated Statement of Operations
Consolidated Statement of Operations $ millions, except % and per share Q1 2020 Q1 2019 $ Change % Change Net sales $ 286.1 $ 273.8 $ 12.3 4% Gross profit 74.8 70.3 4.5 6% SEG&A expenses 42.2 43.9 (1.7) -4% Acquisition and integration related expenses 0.3 0.6 (0.3) -50% Operating income 32.3 25.8 6.
Slide 9: Adjusted Earnings per Share
Adjusted Earnings per Share ($ in millions) Three Months Ended March 31, 2020 2019 Net income $ 23.4 $ 17.5 Add: Income tax expense 7.2 5.9 Income before income taxes 30.6 23.4 Add: Acquisition and integration-related expenses 0.3 0.6 Coronavirus-related expenses (1) 0.4 - Purchase accounting effect
Slide 10: Financial Strength and Flexibility
Financial Strength and Flexibility * • Cash and cash equivalents of $69.4 M • $279 M of total debt outstanding • Net debt of ~$210 M ** Strong capital • In July 2019, we executed a five-year, $500 M revolving credit facility, with flexibility to structure increase by additional $250 M for acquisitio
Slide 11: CEO Remarks – Current Environment
CEO Remarks – Current Environment • Q1 orders were strong, contributing to record backlog Order intake at certain businesses so far in April has been slow • TBEI’s Q1 orders were the highest quarterly orders reported under our ownership, and were up ~$13 M, or 25%, from last year However, orders
Slide 12: CEO Remarks - Remainder of 2020
CEO Remarks - Remainder of 2020 • With the combination of M&A and organic growth initiatives, our end market exposures and revenues streams are now more diversified compared to prior economic downturns Aftermarket revenues now represent ~24% of ESG’s revenues NPD has facilitated addition of util
Slide 13: Reclaiming Tomorrow, Together
Reclaiming Tomorrow, Together • Recently launched Reclaiming Tomorrow, Together initiative, representing four primary areas: Improving digital customer experience Focusing NPD efforts on ways to make our products and the way we conduct business safer for employees, customers and end users Iden
Slide 14: CEO Remarks - Closing Thoughts
CEO Remarks - Closing Thoughts ▲ A limited number of diagnosed cases in our employee population ▲ Strong financial position – low net debt leverage and ample liquidity ▲ Healthy “essential” businesses that have to date remained largely operational and provide needed equipment ▲ Cash flow to date in
Slide 15: Federal Signal Q1 2020 Earnings Call Q&A
Federal Signal Q1 2020 Earnings Call Q&A April 29, 2020 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 Q1 2020 Earnings Call Appendix 17
Slide 18: Consolidated Adjusted EBITDA
Consolidated Adjusted EBITDA $ millions, except % Q1 2020 Q1 2019 Net income $ 23.4 $ 17.5 Add: Interest expense 1.5 2.0 Acquisition and integration-related expenses 0.3 0.6 Coronavirus-related expenses 0.4 - Purchase accounting effects * 0.1 - Other expense, net 0.2 0.4 Income tax expense 7.2 5.9 D
Slide 19: Segment Adjusted EBITDA
Segment Adjusted EBITDA ESG $ millions, except % Q1 2020 Q1 2019 Operating Income $ 29.4 $ 25.7 Add: Acquisition and integration-related expenses 0.1 0.4 Coronavirus-related expenses 0.4 - Purchase accounting effects * 0.1 - Depreciation and amortization 10.0 8.6 Adjusted EBITDA $ 40.0 $ 34.7 Net Sa
Slide 20: 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 21: Federal Signal: Moves. Cleans. Protects.
ff: FEDERAL SIGNAL Moves. Cleans. Protects.