Federal Signal Corporation · NYSE:FSS
Federal Signal — Q3 2022 Earnings Presentation
20 slides from Federal Signal's earnings presentation, Nov 3, 2022
Slide 1: Federal Signal Q3 2022 Earnings Call
Federal Signal Q3 2022 Earnings Call November 3, 2022 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: Q3 Highlights
Q3 Highlights * • Net sales of $346 M, up $48 M, or 16% • Organic growth of $27 M, or 9% • Operating income of $39.5 M, up $5.2 M, or 15% • Adjusted EBITDA of $53.5 M, up $6.1 M, or 13% • Adjusted EBITDA margin of 15.4%, compared to 15.9% • GAAP EPS of $0.52, up $0.05, or 11% • Adjusted EPS of $0.53
Slide 4: Group and Corporate Results
Group and Corporate Results $ millions, except % Q3 2022 Q3 2021 % Change ESG Orders 321.4 292.1 10% Sales 284.8 249.1 14% Operating income 33.9 30.8 10% Operating margin 11.9% 12.4% Adjusted EBITDA 46.5 42.7 9% Adjusted EBITDA margin 16.3% 17.1% SSG Orders 60.7 58.3 4% Sales 61.6 49.2 25% Operating
Slide 5: Consolidated Statement of Operations
Consolidated Statement of Operations $ millions, except % and per share Q3 2022 Q3 2021 $ Change % Change Net sales $ 346.4 $ 298.3 $ 48.1 16% Gross profit 82.8 70.9 11.9 17% SEG&A expenses 39.8 33.4 6.4 19% Amortization expense 3.1 2.8 0.3 11% Acquisition and integration related expenses 0.4 0.4 -
Slide 6: Adjusted Earnings per Share
Adjusted Earnings per Share ($ in millions) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net income, as reported $ 31.8 $ 29.2 $ 85.8 $ 81.1 Add: Income tax expense 4.9 4.3 23.1 17.3 Income before income taxes 36.7 33.5 108.9 98.4 Add: Acquisition and integrat
Slide 7: Financial Strength and Flexibility
Financial Strength and Flexibility * • Cash and cash equivalents of ~$36 M • Net debt of ~$296 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 structure TTM consolidated E
Slide 8: CEO Remarks – Q3 Performance
CEO Remarks – Q3 Performance • Double‐digit improvement in net sales and earnings, with adjusted EBITDA margin towards the high end of target range • Record Q3 aftermarket revenues up 10% YoY; representing ~30% of ESG’s revenues • Sporadic supply chain disruptions impacted production and shipments a
Slide 9: CEO Remarks – Market Conditions
CEO Remarks – Market Conditions • Outstanding Q3 orders of $382 M, up $32 M, or 9% vs. last year; contributing to another record backlog • U.S. municipal orders up 20% in both Q3 and YTD 2022; positively impacted by American Rescue Act stimulus funds YTD street sweeper orders up $40 M, or 40% vs.
Slide 10: Acquisition of TowHaul Corporation
Acquisition of TowHaul Corporation Product portfolio includes a comprehensive range of specialty trailers and vehicles that support the extraction of metals, with robust aftermarket business Lowboy Trailer Multi-Purpose Gooseneck Water Tank Carrier Dragline Bucket Road Conditioning Truck Parts Trans
Slide 11: Raising Mid‐Point of 2022 Outlook
Raising Mid‐Point of 2022 Outlook Raising mid-point of Adjusted EPS* and Sales Outlook • New adjusted EPS* outlook range of $1.91 to $2.00, updated from $1.85 to $2.00 • New sales outlook range of $1.41 B to $1.44 B, updated from $1.38 B to $1.45 B Key Assumptions Double‐digit improvement in pre‐t
Slide 12: Looking Ahead
Looking Ahead • Economic stimulus and infrastructure legislation expected to be catalysts for multi‐year growth, benefiting most of our product offerings; well‐positioned to respond with recent capacity expansions • Continued order strength and record backlog provide good visibility into 2023; prici
Slide 13: Looking Ahead (cont.)
Looking Ahead (cont.) • Ongoing commitment to Environmental, Social and Governance initiatives provides differentiation in hiring and retaining skilled employees at most locations Less than 20 hourly job openings (4%) at our largest facility in Streator, IL, where we continue to benefit from deep
Slide 14: Federal Signal Q3 2022 Earnings Call Q&A
Federal Signal Q3 2022 Earnings Call Q&A November 3, 2022 Jennifer Sherman, President & Chief Executive Officer Ian Hudson, SVP, Chief Financial Officer 14
Slide 15: 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 15
Slide 16: Appendix
Federal Signal Q3 2022 Earnings Call Appendix 16
Slide 17: Consolidated Adjusted EBITDA
Consolidated Adjusted EBITDA $ millions, except % Q3 2022 Q3 2021 Net income $ 31.8 $ 29.2 Add: Interest expense 2.7 1.1 Acquisition and integration-related expenses 0.4 0.4 Other expense (income), net 0.1 (0.3) Income tax expense 4.9 4.3 Depreciation and amortization 13.6 12.7 Consolidated adjusted
Slide 18: Segment Adjusted EBITDA
Segment Adjusted EBITDA ESG $ millions, except % Q3 2022 Q3 2021 Operating Income $ 33.9 $ 30.8 Add: Acquisition and integration-related expenses 0.1 0.1 Depreciation and amortization 12.5 11.8 Adjusted EBITDA $ 46.5 $ 42.7 Net Sales $ 284.8 $ 249.1 Adjusted EBITDA margin 16.3% 17.1% SSG $ millions,
Slide 19: Non‐GAAP Measures
Non‐GAAP Measures • Adjusted net income and earnings per share (“EPS”) ‐ The Company believes that modifying its 2022 and 2021 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 20: Federal Signal: Moves. Cleans. Protects.
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