Federal Signal Corporation · NYSE:FSS
Federal Signal — Q2 2021 Earnings Presentation
19 slides from Federal Signal's earnings presentation, Jul 29, 2021
Slide 1: Federal Signal Q2 2021 Earnings Call
Federal Signal Q2 2021 Earnings Call July 29, 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: Q2 Highlights
Q2 Highlights * • Net sales of $335 M, up $65 M, or 24% • Operating income of $38.5 M, up $7.2 M, or 23% • Adjusted EBITDA of $51.9 M, up $6.5 M, or 14% • Adjusted EBITDA margin of 15.5%, compared to 16.8% • GAAP EPS of $0.48, up $0.13, or 37% • Adjusted EPS of $0.50, up $0.08, or 19% • Orders of $3
Slide 4: Group and Corporate Results
Group and Corporate Results $ millions, except % Q2 2021 Q2 2020 % Change ESG Orders 299.7 157.7 90% Sales 281.3 214.2 31% Operating income 38.5 28.6 35% Operating margin 13.7% 13.4% Adjusted EBITDA 50.6 40.9 24% Adjusted EBITDA margin 18.0% 19.1% SSG Orders 60.8 43.6 39% Sales 53.4 55.9 -4% Operati
Slide 5: Consolidated Statement of Operations
Consolidated Statement of Operations $ millions, except % and per share Q2 2021 Q2 2020 $ Change % Change Net sales $ 334.7 $ 270.1 $ 64.6 24% Gross profit 81.6 70.3 11.3 16% SEG&A expenses 42.8 37.4 5.4 14% Acquisition and integration related expenses 0.3 0.3 - 0% Restructuring - 1.3 (1.3) NM Opera
Slide 6: Adjusted Earnings per Share
Adjusted Earnings per Share ($ in millions) Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Net income, as reported $ 29.7 $ 21.4 $ 51.9 $ 44.8 Add: Income tax expense 8.0 6.1 13.0 13.3 Income before income taxes 37.7 27.5 64.9 58.1 Add: Acquisition and integration-related
Slide 7: Financial Strength and Flexibility
Financial Strength and Flexibility * • Cash and cash equivalents of ~$55 M • Net debt of ~$169 M ** • In July 2019, we executed a five‐year, $500 M revolving credit facility, Strong capital with flexibility to increase by additional $250 M for acquisitions structure • No debt maturities until July 2
Slide 8: CEO Introductory Comments
CEO Introductory Comments • Reports late yesterday of a bipartisan infrastructure deal being reached • Components reported to be part of the deal, which includes a total $550 B in new federal investment in U.S. infrastructure, include: $110 billion for roads $73 billion for power infrastructure
Slide 9: CEO Remarks – Q2 Performance
CEO Remarks – Q2 Performance • Meaningful improvement in net sales and earnings during Q2 • Q2 adjusted EBITDA margin towards high end of target range, despite widespread supply‐chain disruption and unprecedented commodity cost environment • Continuing to realize benefits from diversification of rev
Slide 10: CEO Remarks – Market Conditions
CEO Remarks – Market Conditions • Demand for our products remains strong, with Q2 orders of $361 M • $1.9 T of recently‐passed economic stimulus with $350 B earmarked to go to state, local and territorial governments. Among other things, stimulus package targets the maintenance of essential infrastr
Slide 11: CEO Remarks – Growth Initiatives
CEO Remarks – Growth Initiatives • We remain bullish about the long‐term prospects for “safe‐digging”; monitoring further developments on the regulatory front Safe‐digging trends improving with uptick in industrial markets New applications for use of our equipment Significant environmental ben
Slide 12: Raising 2021 Outlook
Raising 2021 Outlook Raising Adjusted EPS* outlook to a new range of $1.78 to $1.90, from the prior range of $1.73 to $1.85 New range represents increase of 7% to 14% over 2020* Key Full‐Year Assumptions Revenue growth Effective income tax rate of ~23%, Double‐digit improvement in pre‐tax incl
Slide 13: Federal Signal Q2 2021 Earnings Call Q&A
Federal Signal Q2 2021 Earnings Call Q&A July 29, 2021 Jennifer Sherman, President & Chief Executive Officer Ian Hudson, SVP, Chief Financial Officer 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 630‐954‐2000 Ian Hudson SVP, Chief Financial Officer IHudson@federalsignal.com 14
Slide 15: Appendix
Federal Signal Q2 2021 Earnings Call Appendix 15
Slide 16: Consolidated Adjusted EBITDA
Consolidated Adjusted EBITDA $ millions, except % Q2 2021 Q2 2020 Net income $ 29.7 $ 21.4 Add: Interest expense 1.1 1.8 Acquisition and integration-related expenses 0.3 0.3 Restructuring - 1.3 Coronavirus-related expenses 0.3 1.4 Purchase accounting effects * 0.2 - Other (income) expense, net (0.3)
Slide 17: Segment Adjusted EBITDA
Segment Adjusted EBITDA ESG $ millions, except % Q2 2021 Q2 2020 Operating Income $ 38.5 $ 28.6 Add: Acquisition and integration-related expenses 0.1 0.1 Restructuring - 0.7 Coronavirus-related expenses 0.2 1.3 Purchase accounting effects * 0.2 - Depreciation and amortization 11.6 10.2 Adjusted EBIT
Slide 18: Non‐GAAP Measures
Non‐GAAP Measures • Adjusted net income and earnings per share (“EPS”) ‐ The Company believes that modifying its 2021 and 2020 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
FF FEDERAL SIGNAL Moves. Cleans. Protects.