Federal Signal Corporation · NYSE:FSS
Federal Signal — Q1 2023 Earnings Presentation
18 slides from Federal Signal's earnings presentation, May 2, 2023
Slide 1: Federal Signal Q1 2023 Earnings Call
Federal Signal Q1 2023 Earnings Call May 2, 2023 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: Q1 Highlights
Q1 Highlights * • Net sales of $386 M, up $55 M, or 17% • Organic growth of $44 M, or 13% • Operating income of $39.5 M, up $11.0 M, or 39% • Adjusted EBITDA of $54.5 M, up $12.3 M, or 29% • Adjusted EBITDA margin of 14.1%, vs. 12.8% • GAAP EPS of $0.45, up $0.12, or 36% • Adjusted EPS of $0.46, up
Slide 4: Group and Corporate Results
Group and Corporate Results $ millions, except % Q1 2023 Q1 2022 % Change ESG Orders 395.8 387.6 2% Sales 318.8 274.2 16% Operating income 37.6 26.8 40% Operating margin 11.8% 9.8% Adjusted EBITDA 51.2 39.3 30% Adjusted EBITDA margin 16.1% 14.3% SSG Orders 78.9 65.0 21% Sales 66.7 56.0 19% Operating
Slide 5: Consolidated Statement of Operations
Consolidated Statement of Operations $ millions, except % and per share Q1 2023 Q1 2022 $ Change % Change Net sales $ 385.5 $ 330.2 $ 55.3 17% Gross profit 95.8 75.7 20.1 27% SEG&A expenses 52.0 43.6 8.4 19% Amortization expense 3.6 3.3 0.3 9% Acquisition and integration related expenses 0.7 0.3 0.4
Slide 6: Adjusted Earnings per Share
Adjusted Earnings per Share ($ in millions) Three Months Ended March 31, 2023 2022 Net income, as reported $ 27.4 $ 20.5 Add: Income tax expense 7.3 7.1 Income before income taxes 34.7 27.6 Add: Acquisition and integration-related expenses 0.7 0.3 Adjusted income before income taxes 35.4 27.9 Adjust
Slide 7: Financial Strength and Flexibility
Financial Strength and Flexibility * • Cash and cash equivalents of $38 M • Net debt of ~$337 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 • Impressive execution by both groups led to a strong start to the year, with Q1 results including the highest net sales and EPS of any first quarter in Company history • Environmental Solutions Group highlights: YoY net sales growth of 16% and a 180-basis point improv
Slide 9: CEO Remarks – Market Conditions
CEO Remarks – Market Conditions Infrastructure Investments • American Rescue Plan Act $350 B for maintenance of essential infrastructure, such as sewer systems and streets • Infrastructure Investment and Jobs Act $550 B earmarked for new investments in roads, bridges, power, water, and broadband
Slide 10: CEO Remarks – Growth Initiatives
CEO Remarks – Growth Initiatives • Eighty-twenty improvement initiatives Ox Bodies product line simplification Dedicated resource onboarded to drive additional improvement projects, including at new acquisitions • Aftermarket expansion Opened new facility in Colorado Rental fleet investment
Slide 11: Raising 2023 Outlook
Raising 2023 Outlook Raising Full-Year Adjusted EPS* Outlook to a new range of $2.21 to $2.43, from the previous range of $2.15 to $2.40 Would represent highest EPS in Company’s history and YoY growth of 13%-24%, despite aggregate headwind of ~$0.23 from higher interest expense and normalization of
Slide 12: Federal Signal Q1 2023 Earnings Call Q&A
Federal Signal Q1 2023 Earnings Call Q&A May 2, 2023 Jennifer Sherman, President & Chief Executive Officer Ian Hudson, SVP, Chief Financial Officer 12
Slide 13: 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 SVP, Chief Financial Officer IHudson@federalsignal.com 13
Slide 14: Appendix
Federal Signal Q1 2023 Earnings Call Appendix 14
Slide 15: Consolidated Adjusted EBITDA
Consolidated Adjusted EBITDA $ millions, except % Q1 2023 Q1 2022 Net income $ 27.4 $ 20.5 Add: Interest expense 4.7 1.3 Acquisition and integration-related expenses 0.7 0.3 Other expense (income), net 0.1 (0.4) Income tax expense 7.3 7.1 Depreciation and amortization 14.3 13.4 Consolidated adjusted
Slide 16: Segment Adjusted EBITDA
Segment Adjusted EBITDA ESG $ millions, except % Q1 2023 Q1 2022 Operating Income $ 37.6 $ 26.8 Add: Acquisition and integration-related expenses 0.4 0.1 Depreciation and amortization 13.2 12.4 Adjusted EBITDA $ 51.2 $ 39.3 Net Sales $ 318.8 $ 274.2 Adjusted EBITDA margin 16.1% 14.3% SSG $ millions,
Slide 17: Non-GAAP Measures
Non-GAAP Measures • Adjusted net income and earnings per share (“EPS”) - The Company believes that modifying its 2023 and 2022 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 18: Federal Signal
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