OAK BROOK, Ill., Oct. 29,
2020 /PRNewswire/ -- Federal Signal Corporation (NYSE:FSS)
(the "Company"), a leader in environmental and safety solutions,
today reported results for the third quarter ended
September 30, 2020.
Third Quarter Highlights
- Net sales of $280 million
- Operating margin of 12.2%, compared to 12.5% last year
- Adjusted EBITDA margin of 16.4%, exceeding high end of target
range, and up from 16.1% last year
- GAAP EPS of $0.41
- Adjusted EPS of $0.42
- Orders of $266 million, up
$65 million, or 32%, compared to the
second quarter of 2020
- Year-to-date operating cash generation of $80 million, up $21
million, or 36%, from last year
- $66 million of cash and
$251 million of credit facility
availability at end of quarter
- Raising full-year adjusted EPS* outlook to a new range of
$1.58 to $1.66, from the previous range of $1.53 to $1.65
Consolidated net sales for the third quarter were $280 million, compared to $309 million in the same quarter a year ago. Net
income for the third quarter was $25.3
million, equal to $0.41 per
diluted share, compared to $28.4
million, equal to $0.46 per
share, in the prior-year quarter.
The Company also reported adjusted net income for the third
quarter of $25.9 million, equal to
$0.42 per diluted share, compared to
$28.9 million, or $0.47 per diluted share, in the third quarter of
last year. The Company is reporting adjusted results to facilitate
comparisons of underlying performance on a year-over-year basis. A
reconciliation of these and other non-GAAP measures is provided at
the conclusion of this news release.
Impressive Operational Performance Despite Ongoing
Disruptions; Margin Again Exceeds Target Range, and Order Trends
Improve Sequentially
"Our operating results were in line with the high expectations
we had for the quarter, with seasonally-strong performance at many
of our businesses. Our teams continue to demonstrate excellent
operational execution in challenging circumstances, while
prioritizing the safety of our employees," commented Jennifer L. Sherman, President and Chief
Executive Officer. "Once again, we delivered margin performance
above the upper end of our target range, achieving an adjusted
EBITDA margin of 16.4%. In addition, our third quarter order intake
was up $65 million, or 32%, compared
to the second quarter, further evidencing our strong business
fundamentals, broad range of product offerings, and diversity in
our end markets."
In the Environmental Solutions Group, net sales for the third
quarter were $231 million, compared
to $254 million in the prior-year
quarter. In the Safety and Security Systems Group, net sales were
$49 million, compared to $55 million last year.
Consolidated operating income for the third quarter was
$34.0 million, compared to
$38.6 million in the prior-year
quarter. Consolidated operating margin was 12.2%, compared to 12.5%
in the prior-year quarter.
Consolidated adjusted earnings before interest, tax,
depreciation and amortization ("adjusted EBITDA") for the third
quarter was $45.9 million, compared
to $49.8 million in the prior-year
quarter, and consolidated adjusted EBITDA margin improved to 16.4%,
compared to 16.1% last year.
Adjusted EBITDA in the Environmental Solutions Group was
$43.9 million, compared to
$46.0 million in the prior-year
quarter, and its adjusted EBITDA margin was 19.0%, up from 18.1%
last year. In the Safety and Security Systems Group, adjusted
EBITDA was $8.2 million, compared to
$9.4 million in the prior-year
quarter, and its adjusted EBITDA margin was 16.8%, compared to
17.2% last year.
Consolidated backlog at September 30, 2020 was $320 million, compared to $367 million in the prior-year quarter.
Financial Position Remains Strong, Providing Flexibility to
Fund Growth Opportunities and Cash Returns to Stockholders
Net cash of $15 million was
provided by operating activities during the third quarter, bringing
the total cash generated from operations so far this year to
$80 million, an improvement of
$21 million, or 36%, compared to the
prior-year period.
At September 30, 2020, consolidated debt was $239 million, total cash and cash equivalents
were $66 million and the Company had
$251 million of availability for
borrowings under its five-year revolving credit facility, which was
executed in July 2019.
"Our financial position continues to be very strong," said
Sherman. "It provides us with flexibility to pursue strategic
acquisitions, invest in organic growth initiatives, and fund cash
returns to stockholders."
The Company funded dividends of $4.8
million during the third quarter, reflecting a dividend of
$0.08 per share, and the Board of
Directors recently declared a similar dividend that will be payable
in the fourth quarter. In addition, the Company repurchased
$0.2 million of stock in the third
quarter under its existing share repurchase program.
Outlook
"Our track record of solid execution during these challenging
times and the continued strength of our backlog provide us with
confidence in the year," noted Sherman. "As a result, we are
raising our 2020 adjusted EPS* outlook to a new range of
$1.58 to $1.66, from a range of $1.53 to $1.65. The
new range would represent the second highest adjusted EPS* in our
history, surpassed only by the record set last year."
CONFERENCE CALL
Federal Signal will host its third quarter conference call on
Thursday, October 29, 2020 at 10:00
a.m. Eastern Time. The call will last approximately one
hour. The call may be accessed over the internet through Federal
Signal's website at www.federalsignal.com or by dialing phone
number 1-877-705-6003 and entering the pin number 13712051. A
replay will be available on Federal Signal's website shortly after
the call.
About Federal Signal
Federal Signal Corporation (NYSE: FSS) builds and delivers
equipment of unmatched quality that moves material, cleans
infrastructure, and protects the communities where we work and
live. Founded in 1901, Federal Signal is a leading global designer,
manufacturer and supplier of products and total solutions that
serve municipal, governmental, industrial and commercial customers.
Headquartered in Oak Brook, Ill.,
with manufacturing facilities worldwide, the Company operates two
groups: Environmental Solutions and Safety and Security Systems.
For more information on Federal Signal, visit:
www.federalsignal.com.
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995
This release 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
release that are not historical are forward-looking statements.
Such statements are subject to various risks and uncertainties that
could cause actual results to vary materially from those stated.
Such risks and uncertainties include but are not limited to: direct
and indirect impacts of the coronavirus pandemic and the associated
government response, economic conditions in various regions,
product and price competition, supply chain disruptions, work
stoppages, availability and pricing of raw materials, risks
associated with acquisitions such as integration of operations and
achieving anticipated revenue and cost benefits, foreign currency
exchange rate changes, interest rate changes, increased legal
expenses and litigation results, legal and regulatory developments
and other risks and uncertainties described in filings with the
Securities and Exchange Commission.
* Adjusted earnings per share ("EPS") is a non-GAAP measure,
which includes certain adjustments to reported GAAP net income and
diluted EPS. When reporting adjusted EPS in 2020, we have made, and
would expect to continue to make, certain adjustments to exclude
the impact of acquisition and integration-related expenses,
pension-related charges, restructuring activity,
coronavirus-related expenses and purchase accounting effects, where
applicable. In prior years, we have also made adjustments to GAAP
net income and diluted EPS for hearing loss settlement charges and
special tax items. Should any similar items occur in 2020, we would
also expect to exclude them from the determination of adjusted EPS.
However, because of the underlying uncertainty in quantifying
amounts which may not yet be known, a reconciliation of our
Adjusted EPS outlook to the most applicable GAAP measure is
excluded based on the unreasonable efforts exception in Item
10(e)(1)(i)(B).
FEDERAL SIGNAL
CORPORATION AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
(in millions,
except per share data)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net sales
|
$
|
279.8
|
|
|
$
|
308.8
|
|
|
$
|
836.0
|
|
|
$
|
906.9
|
|
Cost of
sales
|
207.2
|
|
|
226.8
|
|
|
618.3
|
|
|
665.6
|
|
Gross
profit
|
72.6
|
|
|
82.0
|
|
|
217.7
|
|
|
241.3
|
|
Selling, engineering,
general and administrative expenses
|
38.4
|
|
|
43.0
|
|
|
118.0
|
|
|
128.7
|
|
Acquisition and
integration-related expenses
|
0.2
|
|
|
0.4
|
|
|
0.8
|
|
|
1.9
|
|
Restructuring
|
—
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
Operating
income
|
34.0
|
|
|
38.6
|
|
|
97.6
|
|
|
110.7
|
|
Interest
expense
|
1.2
|
|
|
2.1
|
|
|
4.5
|
|
|
6.1
|
|
Other (income)
expense, net
|
(0.1)
|
|
|
0.2
|
|
|
2.1
|
|
|
0.5
|
|
Income before income
taxes
|
32.9
|
|
|
36.3
|
|
|
91.0
|
|
|
104.1
|
|
Income tax
expense
|
7.6
|
|
|
7.9
|
|
|
20.9
|
|
|
25.4
|
|
Net income
|
$
|
25.3
|
|
|
$
|
28.4
|
|
|
$
|
70.1
|
|
|
$
|
78.7
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.42
|
|
|
$
|
0.47
|
|
|
$
|
1.16
|
|
|
$
|
1.31
|
|
Diluted
|
$
|
0.41
|
|
|
$
|
0.46
|
|
|
$
|
1.14
|
|
|
$
|
1.28
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
60.3
|
|
|
60.2
|
|
|
60.3
|
|
|
60.1
|
|
Diluted
|
61.3
|
|
|
61.4
|
|
|
61.5
|
|
|
61.3
|
|
Cash dividends
declared per common share
|
$
|
0.08
|
|
|
$
|
0.08
|
|
|
$
|
0.24
|
|
|
$
|
0.24
|
|
|
|
|
|
|
|
|
|
Operating
data:
|
|
|
|
|
|
|
|
Operating
margin
|
12.2
|
%
|
|
12.5
|
%
|
|
11.7
|
%
|
|
12.2
|
%
|
Adjusted
EBITDA
|
$
|
45.9
|
|
|
$
|
49.8
|
|
|
$
|
135.2
|
|
|
$
|
142.8
|
|
Adjusted EBITDA
margin
|
16.4
|
%
|
|
16.1
|
%
|
|
16.2
|
%
|
|
15.7
|
%
|
Total
orders
|
$
|
265.8
|
|
|
$
|
328.8
|
|
|
$
|
771.0
|
|
|
$
|
935.8
|
|
Backlog
|
319.7
|
|
|
366.9
|
|
|
319.7
|
|
|
366.9
|
|
Depreciation and
amortization
|
11.2
|
|
|
10.8
|
|
|
33.1
|
|
|
30.1
|
|
FEDERAL SIGNAL
CORPORATION AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
September
30,
2020
|
|
December
31,
2019
|
(in millions,
except per share data)
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
66.2
|
|
|
$
|
31.6
|
|
Accounts receivable,
net of allowances for doubtful accounts of $3.0 and $2.4,
respectively
|
145.0
|
|
|
134.2
|
|
Inventories
|
196.6
|
|
|
182.9
|
|
Prepaid expenses and
other current assets
|
9.9
|
|
|
12.0
|
|
Total current
assets
|
417.7
|
|
|
360.7
|
|
Properties and
equipment, net of accumulated depreciation of $133.0 and $125.5,
respectively
|
105.6
|
|
|
91.9
|
|
Rental equipment, net
of accumulated depreciation of $40.9 and $33.6,
respectively
|
115.4
|
|
|
115.4
|
|
Operating lease
right-of-use assets
|
22.4
|
|
|
27.6
|
|
Goodwill
|
392.0
|
|
|
388.8
|
|
Intangible assets,
net of accumulated amortization of $29.4 and $22.1,
respectively
|
155.4
|
|
|
162.9
|
|
Deferred tax
assets
|
7.7
|
|
|
10.0
|
|
Deferred charges and
other long-term assets
|
8.2
|
|
|
7.9
|
|
Long-term assets of
discontinued operations
|
0.3
|
|
|
0.3
|
|
Total
assets
|
$
|
1,224.7
|
|
|
$
|
1,165.5
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Current portion of
long-term borrowings and finance lease obligations
|
$
|
0.2
|
|
|
$
|
0.2
|
|
Accounts
payable
|
71.1
|
|
|
65.0
|
|
Customer
deposits
|
11.5
|
|
|
11.5
|
|
Accrued
liabilities:
|
|
|
|
Compensation and
withholding taxes
|
27.8
|
|
|
31.1
|
|
Current operating
lease liabilities
|
8.1
|
|
|
8.2
|
|
Other current
liabilities
|
39.7
|
|
|
44.0
|
|
Current liabilities of
discontinued operations
|
0.2
|
|
|
0.2
|
|
Total current
liabilities
|
158.6
|
|
|
160.2
|
|
Long-term borrowings
and finance lease obligations
|
238.7
|
|
|
220.3
|
|
Long-term operating
lease liabilities
|
16.2
|
|
|
21.6
|
|
Long-term pension and
other postretirement benefit liabilities
|
44.6
|
|
|
50.9
|
|
Deferred tax
liabilities
|
58.1
|
|
|
52.7
|
|
Other long-term
liabilities
|
27.8
|
|
|
17.3
|
|
Long-term liabilities
of discontinued operations
|
0.9
|
|
|
0.9
|
|
Total
liabilities
|
544.9
|
|
|
523.9
|
|
Stockholders'
equity:
|
|
|
|
Common stock, $1 par
value per share, 90.0 shares authorized, 67.8 and 66.9 shares
issued, respectively
|
67.8
|
|
|
66.9
|
|
Capital in excess of
par value
|
237.4
|
|
|
228.6
|
|
Retained
earnings
|
583.8
|
|
|
528.2
|
|
Treasury stock, at
cost, 7.3 and 6.4 shares, respectively
|
(119.3)
|
|
|
(93.0)
|
|
Accumulated other
comprehensive loss
|
(89.9)
|
|
|
(89.1)
|
|
Total stockholders'
equity
|
679.8
|
|
|
641.6
|
|
Total liabilities and
stockholders' equity
|
$
|
1,224.7
|
|
|
$
|
1,165.5
|
|
FEDERAL SIGNAL
CORPORATION AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
|
|
Nine Months
Ended
September 30,
|
(in
millions)
|
2020
|
|
2019
|
Operating
activities:
|
|
|
|
Net income
|
$
|
70.1
|
|
|
$
|
78.7
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
33.1
|
|
|
30.1
|
|
Stock-based
compensation expense
|
5.4
|
|
|
5.9
|
|
Payments for
acquisition-related activity
|
—
|
|
|
(3.1)
|
|
Deferred income
taxes
|
8.4
|
|
|
8.6
|
|
Changes in operating
assets and liabilities
|
(37.4)
|
|
|
(61.6)
|
|
Net cash provided by
operating activities
|
79.6
|
|
|
58.6
|
|
Investing
activities:
|
|
|
|
Purchases of
properties and equipment
|
(24.3)
|
|
|
(21.2)
|
|
Proceeds from sales of
properties and equipment
|
0.5
|
|
|
0.3
|
|
Payments for
acquisition-related activity
|
(6.2)
|
|
|
(49.6)
|
|
Proceeds from
acquisition-related activity
|
0.8
|
|
|
—
|
|
Other, net
|
—
|
|
|
0.2
|
|
Net cash used for
investing activities
|
(29.2)
|
|
|
(70.3)
|
|
Financing
activities:
|
|
|
|
Increase in revolving
lines of credit, net
|
20.5
|
|
|
37.5
|
|
Payments of debt
financing fees
|
—
|
|
|
(1.0)
|
|
Purchases of treasury
stock
|
(13.7)
|
|
|
(1.0)
|
|
Redemptions of common
stock to satisfy withholding taxes related to stock-based
compensation
|
(9.0)
|
|
|
(1.9)
|
|
Payments for
acquisition-related activity
|
—
|
|
|
(10.3)
|
|
Cash dividends paid to
stockholders
|
(14.5)
|
|
|
(14.5)
|
|
Proceeds from
stock-based compensation activity
|
0.6
|
|
|
1.7
|
|
Other, net
|
0.1
|
|
|
—
|
|
Net cash (used for)
provided by financing activities
|
(16.0)
|
|
|
10.5
|
|
Effects of foreign
exchange rate changes on cash and cash equivalents
|
0.2
|
|
|
(0.3)
|
|
Increase (decrease)
in cash and cash equivalents
|
34.6
|
|
|
(1.5)
|
|
Cash and cash
equivalents at beginning of year
|
31.6
|
|
|
37.4
|
|
Cash and cash
equivalents at end of period
|
$
|
66.2
|
|
|
$
|
35.9
|
|
FEDERAL SIGNAL
CORPORATION AND SUBSIDIARIES
GROUP RESULTS
(Unaudited)
|
|
The following tables
summarize group operating results as of and for the three and nine
months ended September 30, 2020 and 2019:
|
|
Environmental
Solutions Group
|
|
|
Three Months Ended
September 30,
|
|
Nine months ended
September 30, 2020
|
($ in
millions)
|
2020
|
|
2019
|
|
Change
|
|
2020
|
|
2019
|
|
Change
|
Net sales
|
$
|
231.0
|
|
|
$
|
254.0
|
|
|
$
|
(23.0)
|
|
|
$
|
678.2
|
|
|
$
|
740.7
|
|
|
$
|
(62.5)
|
|
Operating
income
|
33.0
|
|
|
35.9
|
|
|
(2.9)
|
|
|
91.0
|
|
|
106.4
|
|
|
(15.4)
|
|
Adjusted
EBITDA
|
43.9
|
|
|
46.0
|
|
|
(2.1)
|
|
|
124.8
|
|
|
135.1
|
|
|
(10.3)
|
|
Operating
data:
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
14.3
|
%
|
|
14.1
|
%
|
|
0.2
|
%
|
|
13.4
|
%
|
|
14.4
|
%
|
|
(1.0)
|
%
|
Adjusted EBITDA
margin
|
19.0
|
%
|
|
18.1
|
%
|
|
0.9
|
%
|
|
18.4
|
%
|
|
18.2
|
%
|
|
0.2
|
%
|
Total
orders
|
$
|
220.0
|
|
|
$
|
270.2
|
|
|
$
|
(50.2)
|
|
|
$
|
615.2
|
|
|
$
|
767.1
|
|
|
$
|
(151.9)
|
|
Backlog
|
292.6
|
|
|
337.8
|
|
|
(45.2)
|
|
|
292.6
|
|
|
337.8
|
|
|
(45.2)
|
|
Depreciation and
amortization
|
10.4
|
|
|
10.0
|
|
|
0.4
|
|
|
30.6
|
|
|
27.5
|
|
|
3.1
|
|
|
|
Safety and
Security Systems Group
|
|
|
Three Months Ended
September 30,
|
|
Nine months ended
September 30, 2020
|
($ in
millions)
|
2020
|
|
2019
|
|
Change
|
|
2020
|
|
2019
|
|
Change
|
Net sales
|
$
|
48.8
|
|
|
$
|
54.8
|
|
|
$
|
(6.0)
|
|
|
$
|
157.8
|
|
|
$
|
166.2
|
|
|
$
|
(8.4)
|
|
Operating
income
|
7.4
|
|
|
8.6
|
|
|
(1.2)
|
|
|
25.2
|
|
|
26.8
|
|
|
(1.6)
|
|
Adjusted
EBITDA
|
8.2
|
|
|
9.4
|
|
|
(1.2)
|
|
|
28.1
|
|
|
29.3
|
|
|
(1.2)
|
|
Operating
data:
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
15.2
|
%
|
|
15.7
|
%
|
|
(0.5)
|
%
|
|
16.0
|
%
|
|
16.1
|
%
|
|
(0.1)
|
%
|
Adjusted EBITDA
margin
|
16.8
|
%
|
|
17.2
|
%
|
|
(0.4)
|
%
|
|
17.8
|
%
|
|
17.6
|
%
|
|
0.2
|
%
|
Total
orders
|
$
|
45.8
|
|
|
$
|
58.6
|
|
|
$
|
(12.8)
|
|
|
$
|
155.8
|
|
|
$
|
168.7
|
|
|
$
|
(12.9)
|
|
Backlog
|
27.1
|
|
|
29.1
|
|
|
(2.0)
|
|
|
27.1
|
|
|
29.1
|
|
|
(2.0)
|
|
Depreciation and
amortization
|
0.8
|
|
|
0.8
|
|
|
—
|
|
|
2.5
|
|
|
2.5
|
|
|
—
|
|
Corporate Expenses
Corporate operating expenses were $6.4
million and $5.9 million for
the three months ended September 30,
2020 and 2019, respectively. For the nine months ended
September 30, 2020 and 2019,
corporate operating expenses were $18.6
million and $22.5 million,
respectively.
SEC REGULATION G NON-GAAP RECONCILIATION
The financial measures presented below are unaudited and are not
in accordance with U.S. generally accepted accounting principles
("GAAP"). The non-GAAP financial information presented herein
should be considered supplemental to, and not a substitute for, or
superior to, financial measures calculated in accordance with GAAP.
The Company has provided this supplemental information to
investors, analysts, and other interested parties to enable them to
perform additional analyses of operating results, to illustrate the
results of operations giving effect to the non-GAAP adjustments
shown in the reconciliations below, and to provide an additional
measure of performance which management considers in operating the
business.
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 across reporting periods. During the
three and nine months ended September 30, 2020 and 2019
adjustments were made to reported GAAP net income and diluted EPS
to exclude the impact of acquisition and integration-related
expenses, pension-related charges, restructuring activity,
coronavirus-related expenses and purchase accounting effects, where
applicable.
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
(in
millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net income
|
$
|
25.3
|
|
|
$
|
28.4
|
|
|
$
|
70.1
|
|
|
$
|
78.7
|
|
Add:
|
|
|
|
|
|
|
|
Income tax
expense
|
7.6
|
|
|
7.9
|
|
|
20.9
|
|
|
25.4
|
|
Income before income
taxes
|
32.9
|
|
|
36.3
|
|
|
91.0
|
|
|
104.1
|
|
Add:
|
|
|
|
|
|
|
|
Acquisition and
integration-related expenses
|
0.2
|
|
|
0.4
|
|
|
0.8
|
|
|
1.9
|
|
Pension-related
charges (a)
|
—
|
|
|
—
|
|
|
2.5
|
|
|
—
|
|
Restructuring
|
—
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
Coronavirus-related
expenses (b)
|
0.4
|
|
|
—
|
|
|
2.2
|
|
|
—
|
|
Purchase accounting
effects (c)
|
0.2
|
|
|
0.2
|
|
|
0.5
|
|
|
0.5
|
|
Adjusted income
before income taxes
|
33.7
|
|
|
36.9
|
|
|
98.3
|
|
|
106.5
|
|
Adjusted income tax
expense (d)
|
(7.8)
|
|
|
(8.0)
|
|
|
(22.5)
|
|
|
(25.9)
|
|
Adjusted net
income
|
$
|
25.9
|
|
|
$
|
28.9
|
|
|
$
|
75.8
|
|
|
$
|
80.6
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
(dollars per
diluted share)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
EPS
|
$
|
0.41
|
|
|
$
|
0.46
|
|
|
$
|
1.14
|
|
|
$
|
1.28
|
|
Add:
|
|
|
|
|
|
|
|
Income tax
expense
|
0.13
|
|
|
0.13
|
|
|
0.34
|
|
|
0.41
|
|
Income before income
taxes
|
0.54
|
|
|
0.59
|
|
|
1.48
|
|
|
1.69
|
|
Add:
|
|
|
|
|
|
|
|
Acquisition and
integration-related expenses
|
0.00
|
|
|
0.01
|
|
|
0.01
|
|
|
0.03
|
|
Pension-related
charges (a)
|
—
|
|
|
—
|
|
|
0.04
|
|
|
—
|
|
Restructuring
|
—
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
Coronavirus-related
expenses (b)
|
0.01
|
|
|
—
|
|
|
0.04
|
|
|
—
|
|
Purchase accounting
effects (c)
|
0.00
|
|
|
0.00
|
|
|
0.01
|
|
|
0.01
|
|
Adjusted income
before income taxes
|
0.55
|
|
|
0.60
|
|
|
1.60
|
|
|
1.73
|
|
Adjusted income tax
expense (d)
|
(0.13)
|
|
|
(0.13)
|
|
|
(0.37)
|
|
|
(0.42)
|
|
Adjusted
EPS
|
$
|
0.42
|
|
|
$
|
0.47
|
|
|
$
|
1.23
|
|
|
$
|
1.31
|
|
|
|
(a)
|
Pension-related
charges in the nine months ended September 30, 2020 relate to
charges incurred in connection with the withdrawal from a
multi-employer pension plan. Such charges are included as a
component of Other (income) expense, net on the Condensed
Consolidated Statement of Operations.
|
(b)
|
Coronavirus-related
expenses in the three and nine months ended September 30, 2020
include direct expenses incurred as a result of the coronavirus
pandemic, that are incremental to, and separable from, normal
operations. Such expenses primarily relate to incremental paid time
off provided to employees and costs incurred to implement enhanced
workplace safety protocols.
|
(c)
|
Purchase accounting
effects relate to adjustments to exclude the step-up in the
valuation of acquired JJE equipment that was sold subsequent to the
acquisition in the three and nine months ended September 30,
2020 and 2019, as well as to exclude the depreciation of the
step-up in the valuation of the rental fleet acquired.
|
(d)
|
Adjusted income tax
expense for the three and nine months ended September 30, 2020
and 2019 was recomputed after excluding the impact of acquisition
and integration-related expenses, pension-related charges,
restructuring activity, coronavirus-related expenses and purchase
accounting effects, where applicable.
|
Adjusted EBITDA and Adjusted EBITDA Margin:
The Company uses adjusted EBITDA and the ratio of adjusted
EBITDA to net sales ("adjusted EBITDA margin"), at both the
consolidated and segment level, as additional measures which are
representative of its underlying performance and to improve the
comparability of results across reporting periods. We believe that
investors use versions of these metrics in a similar manner. For
these reasons, the Company believes that adjusted EBITDA and
adjusted EBITDA margin, at both the consolidated and segment level,
are meaningful metrics to investors in evaluating the Company's
underlying financial performance.
Consolidated adjusted EBITDA is a non-GAAP measure that
represents the total of net income, interest expense, acquisition
and integration-related expenses, restructuring activity,
coronavirus-related expenses, purchase accounting effects, other
income/expense, income tax expense, and depreciation and
amortization expense. Consolidated adjusted EBITDA margin is a
non-GAAP measure that represents the total of net income, interest
expense, acquisition and integration-related expenses,
restructuring activity, coronavirus-related expenses, purchase
accounting effects, other income/expense, income tax expense, and
depreciation and amortization expense divided by net sales for the
applicable period(s).
Segment adjusted EBITDA is a non-GAAP measure that represents
the total of segment operating income, acquisition and
integration-related expenses, restructuring activity,
coronavirus-related expenses, purchase accounting effects and
depreciation and amortization expense, as applicable. Segment
adjusted EBITDA margin is a non-GAAP measure that represents the
total of segment operating income, acquisition and
integration-related expenses, restructuring activity,
coronavirus-related expenses, purchase accounting effects and
depreciation and amortization expense, as applicable, divided by
net sales for the applicable period(s). Segment operating income
includes all revenues, costs and expenses directly related to the
segment involved. In determining segment income, neither corporate
nor interest expenses are included. Segment depreciation and
amortization expense relates to those assets, both tangible and
intangible, that are utilized by the respective segment.
Other companies may use different methods to calculate adjusted
EBITDA and adjusted EBITDA margin.
Consolidated
The following table summarizes the Company's consolidated
adjusted EBITDA and adjusted EBITDA margin and reconciles net
income to consolidated adjusted EBITDA for the three and nine
months ended September 30, 2020 and 2019:
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
($ in
millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net income
|
$
|
25.3
|
|
|
$
|
28.4
|
|
|
$
|
70.1
|
|
|
$
|
78.7
|
|
Add:
|
|
|
|
|
|
|
|
Interest
expense
|
1.2
|
|
|
2.1
|
|
|
4.5
|
|
|
6.1
|
|
Acquisition and
integration-related expenses
|
0.2
|
|
|
0.4
|
|
|
0.8
|
|
|
1.9
|
|
Restructuring
|
—
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
Coronavirus-related
expenses
|
0.4
|
|
|
—
|
|
|
2.2
|
|
|
—
|
|
Purchase accounting
effects*
|
0.1
|
|
|
0.0
|
|
|
0.2
|
|
|
0.1
|
|
Other (income)
expense, net
|
(0.1)
|
|
|
0.2
|
|
|
2.1
|
|
|
0.5
|
|
Income tax
expense
|
7.6
|
|
|
7.9
|
|
|
20.9
|
|
|
25.4
|
|
Depreciation and
amortization
|
11.2
|
|
|
10.8
|
|
|
33.1
|
|
|
30.1
|
|
Consolidated adjusted
EBITDA
|
$
|
45.9
|
|
|
$
|
49.8
|
|
|
$
|
135.2
|
|
|
$
|
142.8
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
279.8
|
|
|
$
|
308.8
|
|
|
$
|
836.0
|
|
|
$
|
906.9
|
|
|
|
|
|
|
|
|
|
Consolidated adjusted
EBITDA margin
|
16.4
|
%
|
|
16.1
|
%
|
|
16.2
|
%
|
|
15.7
|
%
|
|
* Excludes
purchase accounting expenses reflected in depreciation and
amortization of $0.1 million and $0.2 million for the three months
ended September 30, 2020 and 2019, respectively, and $0.3 million
and $0.4 million for the nine months ended September 30, 2020 and
2019, respectively.
|
Environmental Solutions Group
The following table summarizes the Environmental Solutions
Group's adjusted EBITDA and adjusted EBITDA margin and reconciles
operating income to adjusted EBITDA for the three and nine months
ended September 30, 2020 and 2019:
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
($ in
millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Operating
income
|
$
|
33.0
|
|
|
$
|
35.9
|
|
|
$
|
91.0
|
|
|
$
|
106.4
|
|
Add:
|
|
|
|
|
|
|
|
Acquisition and
integration-related expenses
|
0.1
|
|
|
0.1
|
|
|
0.3
|
|
|
1.1
|
|
Restructuring
|
—
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
Coronavirus-related
expenses
|
0.3
|
|
|
—
|
|
|
2.0
|
|
|
—
|
|
Purchase accounting
effects*
|
0.1
|
|
|
0.0
|
|
|
0.2
|
|
|
0.1
|
|
Depreciation and
amortization
|
10.4
|
|
|
10.0
|
|
|
30.6
|
|
|
27.5
|
|
Adjusted
EBITDA
|
$
|
43.9
|
|
|
$
|
46.0
|
|
|
$
|
124.8
|
|
|
$
|
135.1
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
231.0
|
|
|
$
|
254.0
|
|
|
$
|
678.2
|
|
|
$
|
740.7
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
19.0
|
%
|
|
18.1
|
%
|
|
18.4
|
%
|
|
18.2
|
%
|
|
* Excludes
purchase accounting expenses reflected in depreciation and
amortization of $0.1 million and $0.2 million for the three months
ended September 30, 2020 and 2019, respectively, and $0.3 million
and $0.4 million for the nine months ended September 30, 2020 and
2019, respectively.
|
Safety and Security Systems Group
The following table summarizes the Safety and Security Systems
Group's adjusted EBITDA and adjusted EBITDA margin and reconciles
operating income to adjusted EBITDA for the three and nine months
ended September 30, 2020 and 2019:
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
($ in
millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Operating
income
|
$
|
7.4
|
|
|
$
|
8.6
|
|
|
$
|
25.2
|
|
|
$
|
26.8
|
|
Add:
|
|
|
|
|
|
|
|
Restructuring
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
Coronavirus-related
expenses
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
Depreciation and
amortization
|
0.8
|
|
|
0.8
|
|
|
2.5
|
|
|
2.5
|
|
Adjusted
EBITDA
|
$
|
8.2
|
|
|
$
|
9.4
|
|
|
$
|
28.1
|
|
|
$
|
29.3
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
48.8
|
|
|
$
|
54.8
|
|
|
$
|
157.8
|
|
|
$
|
166.2
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
16.8
|
%
|
|
17.2
|
%
|
|
17.8
|
%
|
|
17.6
|
%
|
View original
content:http://www.prnewswire.com/news-releases/federal-signal-raises-full-year-outlook-after-reporting-strong-third-quarter-results-301162450.html
SOURCE Federal Signal Corporation