Federal Signal Corporation · NYSE:FSS
Federal Signal — Q1 2024 Earnings Presentation
19 slides from Federal Signal's earnings presentation, Apr 30, 2024
Slide 1: Federal Signal Q1 2024 Earnings Call
Federal Signal Q1 2024 Earnings Call April 30, 2024 Jennifer Sherman, President & Chief Executive Officer Ian Hudson, SVP, Chief Financial Officer Felix Boeschen, VP, Corporate Strategy & Investor Relations
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 $425 M, up $39 M, or 10% • Organic growth of $28 M, or 7% • Operating income of $54.3 M, up $14.8 M, or 37% • Adjusted EBITDA of $70.6 M, up $16.1 M, or 30% • Adjusted EBITDA margin of 16.6%, vs. 14.1% • GAAP EPS of $0.84, up $0.39, or 87% • Adjusted EPS of $0.64, up $
Slide 4: Group and Corporate Results
Group and Corporate Results $ millions, except % Q1 2024 Q1 2023 % Change ESG Orders 427.7 395.8 8% Sales 354.0 318.8 11% Operating income 51.7 37.6 38% Operating margin 14.6% 11.8% Adjusted EBITDA 66.5 51.2 30% Adjusted EBITDA margin 18.8% 16.1% SSG Orders 75.0 78.9 -5% Sales 70.9 66.7 6% Operating
Slide 5: Consolidated Statement of Operations
Consolidated Statement of Operations $ millions, except % and per share Q1 2024 Q1 2023 $ Change % Change Net sales $ 424.9 $ 385.5 $ 39.4 10% Gross profit 116.0 95.8 20.2 21% SEG&A expenses 57.2 52.0 5.2 10% Amortization expense 3.6 3.6 - 0% Acquisition and integration related expenses, net 0.9 0.7
Slide 6: Adjusted Earnings per Share
Adjusted Earnings per Share ($ in millions) Three Months Ended March 31, 2024 2023 Net income, as reported $ 51.6 $ 27.4 Add: Income tax (benefit) expense (0.7) 7.3 Income before income taxes 50.9 34.7 Add: Acquisition and integration-related expenses, net 0.9 0.7 Adjusted income before income taxes
Slide 7: Financial Strength and Flexibility
Financial Strength and Flexibility * • Cash and cash equivalents of $49 M • Net debt of ~$223 M ** • In October 2022, executed a five-year, $800 M revolving credit facility, with Strong capital opportunity to increase further by the greater of (i) $400 M or (ii) 100% of TTM structure consolidated EB
Slide 8: CEO Remarks – Q1 Performance
CEO Remarks – Q1 Performance • Outstanding execution by both groups contributed to a record- setting Q1 across net sales, adjusted EPS, orders and backlog • Environmental Solutions Group highlights: YoY net sales growth of 11%; 30% increase in adjusted EBITDA Aftermarket revenues up 6% YoY, equa
Slide 9: CEO Remarks – Market Conditions
CEO Remarks – Market Conditions • Demand for our products remains strong, as evidenced by Q1 orders of $503 M, up 6% YoY • Q1 backlog at ~$1.10 B, up 14% YoY, and up ~7% vs. Q4; provides excellent visibility for 2024 • End-market diversification efforts yielding order strength across publicly-funded
Slide 10: CEO Remarks – Internal Growth Initiatives
CEO Remarks – Internal Growth Initiatives • Aftermarket growth strategy is working Denver Open House Jetstream: Parts, service and rental revenues have grown at high single digit CAGR since 2016; 400bps increase in aftermarket mix over this timeframe TowHaul: Parts represented ~60% of total sale
Slide 11: Raising 2024 Financial Outlook
Raising 2024 Financial Outlook • Raising Full-Year Adjusted EPS1 Outlook to a new range of $2.95 to $3.15 • Increased from the prior range of $2.85 to $3.05 • New range would represent YoY growth of 14% - 22%, and the highest EPS level in our history • Does not include discrete tax benefit of ~$13 M
Slide 12: CEO Remarks – Guidance Considerations
CEO Remarks – Guidance Considerations* Raising 2024 Adjusted EPS1 Outlook to a new range of $2.95 to $3.15 from $2.85 to $3.05 1Q 2Q‐4Q Full Year 2024 (+) Core operating performance (+) Core operating performance (+) Core operating performance (+) Insurance recovery (~$2M (+) Recovery of delayed (+)
Slide 13: Federal Signal Q1 2024 Earnings Call Q&A
Federal Signal Q1 2024 Earnings Call Q&A April 30, 2024 Jennifer Sherman, President & Chief Executive Officer Ian Hudson, SVP, Chief Financial Officer Felix Boeschen, VP, Corporate Strategy & Investor Relations 13
Slide 14: 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 Felix Boeschen VP, Corporate Strategy and Investor Relations fboeschen@federalsignal.com 14
Slide 15: Appendix
Federal Signal Q1 2024 Earnings Call Appendix 15
Slide 16: Consolidated Adjusted EBITDA
Consolidated Adjusted EBITDA $ millions, except % Q1 2024 Q1 2023 Net income $ 51.6 $ 27.4 Add: Interest expense, net 3.2 4.7 Acquisition and integration-related expenses, net 0.9 0.7 Other expense, net 0.2 0.1 Income tax (benefit) expense (0.7) 7.3 Depreciation and amortization 15.4 14.3 Consolidat
Slide 17: Segment Adjusted EBITDA
Segment Adjusted EBITDA ESG $ millions, except % Q1 2024 Q1 2023 Operating Income $ 51.7 $ 37.6 Add: Acquisition and integration-related expenses 0.5 0.4 Depreciation and amortization 14.3 13.2 Adjusted EBITDA $ 66.5 $ 51.2 Net Sales $ 354.0 $ 318.8 Adjusted EBITDA margin 18.8% 16.1% SSG $ millions,
Slide 18: Non-GAAP Measures
Non‐GAAP Measures • Adjusted net income and earnings per share (“EPS”) - The Company believes that modifying its 2024 and 2023 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 19: Federal Signal is a leader...
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