OAK BROOK, Ill., Aug. 8, 2017 /PRNewswire/ -- Federal Signal
Corporation (NYSE:FSS), a leader in environmental and safety
solutions, today reported results for the second quarter ended
June 30, 2017.
- Orders of $271 million, up
$84 million, or 45%, from last year,
including organic growth of $27
million, or 19%
- Net sales of $224 million, up 30%
compared to last year
- GAAP earnings per share of $0.19,
up from $0.15 last year
- Adjusted earnings per share of $0.23, up from $0.17 last year
- Operating cash flow up $22
million compared to last year
- Raising full-year outlook to a range of $0.77 to $0.80, from a range of $0.70 to $0.78
Consolidated net sales for the second quarter were $224.4 million, up $52.1
million, or 30% versus the same quarter a year ago. Second
quarter income from continuing operations was $11.5 million, equal to $0.19 per diluted share, compared to $9.4 million, equal to $0.15 per share, in the prior-year quarter.
The Company also reported adjusted net income from continuing
operations for the second quarter of $13.8
million, equal to $0.23 per
diluted share, compared to $10.1
million, or $0.17 per diluted
share, in the same quarter a year ago. 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.
Q2 Earnings Exceed Expectations; Significant Increase in
Orders and Backlog Driven by Organic Growth and M&A
"We are pleased to report an outstanding second quarter, with
results that exceeded both revenue and earnings expectations,"
commented Jennifer L. Sherman,
President and Chief Executive Officer. "As in the first quarter,
total reported orders were up significantly in comparison to the
prior year, driven by acquisitions and robust organic order growth,
where we saw benefits from customers replenishing rental fleets,
momentum on the industrial side and the results of our initiative
to expand into the utility market."
Consolidated orders were $271.1
million for the quarter, up $83.8
million, or 45%, compared to the prior-year quarter. The
Environmental Solutions Group reported orders of $214.7 million in the second quarter of 2017, an
increase of $79.4 million, or 59%,
compared to the prior-year quarter. The improvement was largely due
to the acquisition of TBEI and organic order growth of
approximately $22 million, or 24%,
primarily represented by improved orders for sewer cleaners and
vacuum trucks. Orders within our Safety and Security Systems Group
were up $4.4 million. Consolidated
backlog at June 30, 2017 was $223
million, up $73 million, or
49%, compared to last year, and up $49
million, or 28%, from the end of the first quarter of
2017.
In the Environmental Solutions Group, net sales were up
$54.9 million, or 46%, primarily due
to $31.4 million of incremental net
sales resulting from the JJE acquisition, which was completed in
June 2016, an increase in shipments
of sewer cleaners and vacuum trucks in the U.S., and the
contribution of $18.1 million of TBEI
sales for June, which has historically been a seasonally-strong
month. Sales in the Safety and Security Systems Group decreased by
$2.8 million, or 5%.
Consolidated second quarter operating income was $18.7 million, up $4.4
million, or 31%, compared to the prior-year quarter,
primarily driven by a $6.1 million
increase within the Environmental Solutions Group, partially offset
by a $1.0 million reduction within
the Safety and Security Systems Group and a $0.7 million increase in corporate expenses.
Consolidated operating margin was 8.3%, unchanged from the
prior-year quarter.
Consolidated adjusted earnings before interest, tax,
depreciation and amortization ("adjusted EBITDA") for the second
quarter of 2017 was $28.9 million, up
$9.5 million, or 49%, compared to the
prior-year quarter, and consolidated adjusted EBITDA margin was
12.9% compared to 11.3% last year.
Adjusted EBITDA in the Environmental Solutions Group was up
$10.8 million, or 58%, to
$29.3 million, and its adjusted
EBITDA margin was 16.8%, up from 15.5% last year. Within the Safety
and Security Systems Group, adjusted EBITDA was $6.7 million, compared to $7.7 million last year, and its adjusted EBITDA
margin was 13.4%, compared to 14.6% last year.
Completed TBEI Acquisition in June; Improved Cash Flow
Facilitates Post-Acquisition Reduction in Debt Leverage
Net cash of $32.1 million was
provided by continuing operating activities in the second quarter
of 2017, compared to $10.6 million in
the prior-year quarter. For the first half of 2017, net cash of
$45.8 million was provided by
continuing operating activities, compared to $3.9 million in the same period of 2016.
During the second quarter, the Company completed the acquisition
of TBEI, funding $243.0 million of
the purchase price through borrowings under its credit facility,
with the remainder being paid with existing cash on hand. At
June 30, 2017, consolidated debt was $289 million, total cash and cash equivalents
were $37 million and the Company had
$93 million of availability for
borrowings under its credit facility.
"The improvement in our cash flow generation in the second
quarter was particularly encouraging," said Sherman. "It enabled us
to pay down $20 million of
borrowings, and our debt leverage at the end of the quarter was
down to 2.4 times adjusted EBITDA, compared to 2.7 times at the
beginning of June, when we completed the TBEI acquisition. While
our short-term focus is on delevering, our long-term priorities for
the use of our capital remain unchanged."
The Company also funded dividends of $4.2
million during the second quarter, and the Board of
Directors recently declared a $0.07
per share dividend that will be payable in the third quarter.
Outlook
"Our second quarter performance provides us with increased
confidence in our full-year outlook," Sherman noted. "While our
municipal markets continue to be steady overall, we have seen some
recent deferrals of larger orders of street sweepers and public
safety products, which we believe to be temporary. With the growth
in organic orders experienced in the first half of the year
contributing to a strong backlog for vacuum trucks and sewer
cleaners, and up to $0.03 of
accretion currently expected from TBEI, we are raising our
full-year 2017 adjusted EPS outlook to a new range of $0.77 to $0.80, from a range of $0.70 to $0.78."
CONFERENCE CALL
Federal Signal will host its second quarter conference call on
Tuesday, August 8, 2017 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 http://www.federalsignal.com or by dialing phone number
1-888-806-6231 and entering the pin number 8899709. A replay will
be available on Federal Signal's website shortly after the
call.
About Federal Signal
Federal Signal Corporation (NYSE: FSS) provides products and
services to protect people and our planet. 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: http://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:
economic conditions in various regions; product and price
competition; supplier and raw material prices; 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.
FEDERAL SIGNAL
CORPORATION AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
(in millions,
except per share data)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net sales
|
$
|
224.4
|
|
|
$
|
172.3
|
|
|
$
|
402.2
|
|
|
$
|
345.1
|
|
Cost of
sales
|
169.7
|
|
|
127.3
|
|
|
303.9
|
|
|
252.7
|
|
Gross
profit
|
54.7
|
|
|
45.0
|
|
|
98.3
|
|
|
92.4
|
|
Selling, engineering,
general and administrative expenses
|
34.9
|
|
|
30.3
|
|
|
66.4
|
|
|
59.9
|
|
Acquisition and
integration-related expenses
|
1.0
|
|
|
0.4
|
|
|
1.5
|
|
|
0.9
|
|
Restructuring
|
0.1
|
|
|
—
|
|
|
0.4
|
|
|
1.2
|
|
Operating
income
|
18.7
|
|
|
14.3
|
|
|
30.0
|
|
|
30.4
|
|
Interest
expense
|
1.3
|
|
|
0.4
|
|
|
1.9
|
|
|
0.8
|
|
Debt settlement
charges
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
Other income,
net
|
(0.2)
|
|
|
(0.3)
|
|
|
(0.5)
|
|
|
(1.0)
|
|
Income before income
taxes
|
17.6
|
|
|
14.2
|
|
|
28.6
|
|
|
30.3
|
|
Income tax
expense
|
6.1
|
|
|
4.8
|
|
|
9.9
|
|
|
10.5
|
|
Income from
continuing operations
|
11.5
|
|
|
9.4
|
|
|
18.7
|
|
|
19.8
|
|
(Loss) gain from
discontinued operations and disposal, net of income tax (benefit)
expense of $(0.1), $(0.3), $0.0 and $4.1, respectively
|
(0.1)
|
|
|
(0.3)
|
|
|
—
|
|
|
2.9
|
|
Net income
|
$
|
11.4
|
|
|
$
|
9.1
|
|
|
$
|
18.7
|
|
|
$
|
22.7
|
|
Basic earnings per
share:
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$
|
0.19
|
|
|
$
|
0.16
|
|
|
$
|
0.31
|
|
|
$
|
0.32
|
|
(Loss) earnings from
discontinued operations and disposal, net of tax
|
—
|
|
|
(0.01)
|
|
|
—
|
|
|
0.05
|
|
Net earnings per
share
|
$
|
0.19
|
|
|
$
|
0.15
|
|
|
$
|
0.31
|
|
|
$
|
0.37
|
|
Diluted earnings per
share:
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$
|
0.19
|
|
|
$
|
0.15
|
|
|
$
|
0.31
|
|
|
$
|
0.32
|
|
(Loss) earnings from
discontinued operations and disposal, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
0.05
|
|
Net earnings per
share
|
$
|
0.19
|
|
|
$
|
0.15
|
|
|
$
|
0.31
|
|
|
$
|
0.37
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
59.7
|
|
|
60.1
|
|
|
59.7
|
|
|
61.1
|
|
Diluted
|
60.3
|
|
|
60.9
|
|
|
60.3
|
|
|
61.9
|
|
Cash dividends
declared per common share
|
$
|
0.07
|
|
|
$
|
0.07
|
|
|
$
|
0.14
|
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
|
Operating
data:
|
|
|
|
|
|
|
|
Operating
margin
|
8.3
|
%
|
|
8.3
|
%
|
|
7.5
|
%
|
|
8.8
|
%
|
Adjusted
EBITDA
|
$
|
28.9
|
|
|
$
|
19.4
|
|
|
$
|
47.8
|
|
|
$
|
40.2
|
|
Adjusted EBITDA
margin
|
12.9
|
%
|
|
11.3
|
%
|
|
11.9
|
%
|
|
11.6
|
%
|
Total
orders
|
$
|
271.1
|
|
|
$
|
187.3
|
|
|
$
|
485.7
|
|
|
$
|
323.0
|
|
Backlog
|
222.7
|
|
|
149.8
|
|
|
222.7
|
|
|
149.8
|
|
Depreciation and
amortization
|
6.6
|
|
|
4.2
|
|
|
12.3
|
|
|
7.2
|
|
FEDERAL SIGNAL
CORPORATION AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
June 30,
2017
|
|
December 31,
2016
|
(in millions,
except per share data)
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
37.0
|
|
|
$
|
50.7
|
|
Accounts receivable,
net of allowances for doubtful accounts of $1.0 and $0.8,
respectively
|
117.5
|
|
|
81.3
|
|
Inventories
|
139.7
|
|
|
120.1
|
|
Prepaid expenses and
other current assets
|
8.7
|
|
|
7.5
|
|
Total current
assets
|
302.9
|
|
|
259.6
|
|
Properties and
equipment, net of accumulated depreciation of $106.7 and $101.3,
respectively
|
63.9
|
|
|
42.9
|
|
Rental equipment, net
of accumulated depreciation of $15.2 and $9.7,
respectively
|
83.8
|
|
|
80.8
|
|
Goodwill
|
372.2
|
|
|
236.5
|
|
Intangible assets,
net of accumulated amortization of $1.3 and $0.5,
respectively
|
162.8
|
|
|
10.2
|
|
Deferred tax
assets
|
6.7
|
|
|
8.2
|
|
Deferred charges and
other assets
|
4.2
|
|
|
3.9
|
|
Long-term assets of
discontinued operations
|
1.1
|
|
|
1.1
|
|
Total
assets
|
$
|
997.6
|
|
|
$
|
643.2
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Current portion of
long-term borrowings and capital lease obligations
|
$
|
0.3
|
|
|
$
|
0.5
|
|
Accounts
payable
|
66.7
|
|
|
35.3
|
|
Customer
deposits
|
6.5
|
|
|
4.5
|
|
Accrued
liabilities:
|
|
|
|
Compensation and
withholding taxes
|
17.6
|
|
|
13.8
|
|
Other current
liabilities
|
40.8
|
|
|
28.7
|
|
Current liabilities
of discontinued operations
|
0.8
|
|
|
2.1
|
|
Total current
liabilities
|
132.7
|
|
|
84.9
|
|
Long-term borrowings
and capital lease obligations
|
288.9
|
|
|
63.5
|
|
Long-term pension and
other postretirement benefit liabilities
|
57.5
|
|
|
61.1
|
|
Deferred
gain
|
9.7
|
|
|
10.7
|
|
Deferred tax
liabilities
|
67.4
|
|
|
—
|
|
Other long-term
liabilities
|
27.0
|
|
|
26.9
|
|
Long-term liabilities
of discontinued operations
|
2.0
|
|
|
2.0
|
|
Total
liabilities
|
585.2
|
|
|
249.1
|
|
Stockholders'
equity:
|
|
|
|
Common stock, $1 par
value per share, 90.0 shares authorized, 65.9 and 65.4 shares
issued, respectively
|
65.9
|
|
|
65.4
|
|
Capital in excess of
par value
|
204.4
|
|
|
200.3
|
|
Retained
earnings
|
312.1
|
|
|
301.8
|
|
Treasury stock, at
cost, 6.0 and 5.8 shares, respectively
|
(84.5)
|
|
|
(81.4)
|
|
Accumulated other
comprehensive loss
|
(85.5)
|
|
|
(92.0)
|
|
Total stockholders'
equity
|
412.4
|
|
|
394.1
|
|
Total liabilities and
stockholders' equity
|
$
|
997.6
|
|
|
$
|
643.2
|
|
FEDERAL SIGNAL
CORPORATION AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
|
|
Six Months
Ended
June 30,
|
(in
millions)
|
2017
|
|
2016
|
Operating
activities:
|
|
|
|
Net income
|
$
|
18.7
|
|
|
$
|
22.7
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Loss (gain) from
discontinued operations and disposal
|
—
|
|
|
(2.9)
|
|
Depreciation and
amortization
|
12.3
|
|
|
7.2
|
|
Deferred financing
costs
|
0.2
|
|
|
0.5
|
|
Deferred
gain
|
(1.0)
|
|
|
(0.9)
|
|
Stock-based
compensation expense
|
2.7
|
|
|
2.2
|
|
Pension expense, net
of funding
|
(2.8)
|
|
|
(2.2)
|
|
Deferred income
taxes
|
2.8
|
|
|
7.0
|
|
Changes in operating
assets and liabilities, net of effects of acquisitions and
discontinued operations
|
12.9
|
|
|
(29.7)
|
|
Net cash provided by
continuing operating activities
|
45.8
|
|
|
3.9
|
|
Net cash (used for)
provided by discontinued operating activities
|
(0.3)
|
|
|
1.3
|
|
Net cash provided by
operating activities
|
45.5
|
|
|
5.2
|
|
Investing
activities:
|
|
|
|
Purchases of
properties and equipment
|
(2.7)
|
|
|
(3.6)
|
|
Payments for
acquisitions, net of cash acquired
|
(269.2)
|
|
|
(102.6)
|
|
Other, net
|
0.1
|
|
|
(0.5)
|
|
Net cash used for
continuing investing activities
|
(271.8)
|
|
|
(106.7)
|
|
Net cash (used for)
provided by discontinued investing activities
|
(1.1)
|
|
|
88.0
|
|
Net cash used for
investing activities
|
(272.9)
|
|
|
(18.7)
|
|
Financing
activities:
|
|
|
|
Increase in revolving
lines of credit, net
|
223.0
|
|
|
64.8
|
|
Payments on long-term
borrowings
|
—
|
|
|
(43.4)
|
|
Payments of debt
financing fees
|
(0.2)
|
|
|
(1.1)
|
|
Purchases of treasury
stock
|
—
|
|
|
(33.1)
|
|
Redemptions of common
stock to satisfy withholding taxes related to stock-based
compensation
|
(2.4)
|
|
|
(2.6)
|
|
Cash dividends paid
to stockholders
|
(8.4)
|
|
|
(8.6)
|
|
Proceeds from
stock-based compensation activity
|
1.2
|
|
|
0.2
|
|
Other, net
|
(0.2)
|
|
|
(0.4)
|
|
Net cash provided by
(used for) continuing financing activities
|
213.0
|
|
|
(24.2)
|
|
Net cash provided by
discontinued financing activities
|
—
|
|
|
0.7
|
|
Net cash provided by
(used for) financing activities
|
213.0
|
|
|
(23.5)
|
|
Effects of foreign
exchange rate changes on cash and cash equivalents
|
0.7
|
|
|
(0.3)
|
|
Decrease in cash and
cash equivalents
|
(13.7)
|
|
|
(37.3)
|
|
Cash and cash
equivalents at beginning of year
|
50.7
|
|
|
76.0
|
|
Cash and cash
equivalents at end of period
|
$
|
37.0
|
|
|
$
|
38.7
|
|
FEDERAL SIGNAL
CORPORATION AND SUBSIDIARIES
|
GROUP RESULTS
(Unaudited)
|
|
The following tables
summarize group operating results as of and for the three and six
months ended June 30, 2017 and 2016:
|
|
Environmental
Solutions Group
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
($ in
millions)
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
Net sales
|
$
|
174.3
|
|
|
$
|
119.4
|
|
|
$
|
54.9
|
|
|
$
|
302.1
|
|
|
$
|
234.8
|
|
|
$
|
67.3
|
|
Operating
income
|
21.0
|
|
|
14.9
|
|
|
6.1
|
|
|
31.3
|
|
|
31.4
|
|
|
(0.1)
|
|
Adjusted
EBITDA
|
29.3
|
|
|
18.5
|
|
|
10.8
|
|
|
44.8
|
|
|
36.8
|
|
|
8.0
|
|
Operating
data:
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
12.0
|
%
|
|
12.5
|
%
|
|
(0.5)
|
%
|
|
10.4
|
%
|
|
13.4
|
%
|
|
(3.0)
|
%
|
Adjusted EBITDA
margin
|
16.8
|
%
|
|
15.5
|
%
|
|
1.3
|
%
|
|
14.8
|
%
|
|
15.7
|
%
|
|
(0.9)
|
%
|
Total
orders
|
214.7
|
|
|
135.3
|
|
|
79.4
|
|
|
381.3
|
|
|
218.5
|
|
|
162.8
|
|
Backlog
|
197.8
|
|
|
117.0
|
|
|
80.8
|
|
|
197.8
|
|
|
117.0
|
|
|
80.8
|
|
Depreciation and
amortization
|
5.6
|
|
|
3.1
|
|
|
2.5
|
|
|
10.2
|
|
|
4.9
|
|
|
5.3
|
|
Safety and
Security Systems Group
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
($ in
millions)
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
Net sales
|
$
|
50.1
|
|
|
$
|
52.9
|
|
|
$
|
(2.8)
|
|
|
$
|
100.1
|
|
|
$
|
110.3
|
|
|
$
|
(10.2)
|
|
Operating
income
|
5.6
|
|
|
6.6
|
|
|
(1.0)
|
|
|
12.0
|
|
|
11.5
|
|
|
0.5
|
|
Adjusted
EBITDA
|
6.7
|
|
|
7.7
|
|
|
(1.0)
|
|
|
14.4
|
|
|
14.9
|
|
|
(0.5)
|
|
Operating
data:
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
11.2
|
%
|
|
12.5
|
%
|
|
(1.3)
|
%
|
|
12.0
|
%
|
|
10.4
|
%
|
|
1.6
|
%
|
Adjusted EBITDA
margin
|
13.4
|
%
|
|
14.6
|
%
|
|
(1.2)
|
%
|
|
14.4
|
%
|
|
13.5
|
%
|
|
0.9
|
%
|
Total
orders
|
56.4
|
|
|
52.0
|
|
|
4.4
|
|
|
104.4
|
|
|
104.5
|
|
|
(0.1)
|
|
Backlog
|
24.9
|
|
|
32.8
|
|
|
(7.9)
|
|
|
24.9
|
|
|
32.8
|
|
|
(7.9)
|
|
Depreciation and
amortization
|
1.0
|
|
|
1.1
|
|
|
(0.1)
|
|
|
2.0
|
|
|
2.2
|
|
|
(0.2)
|
|
Corporate Expenses
Corporate operating expenses were $7.9
million and $7.2 million for
the three months ended June 30, 2017
and 2016, respectively. For the six months ended June 30, 2017 and 2016, corporate operating
expenses were $13.3 million and
$12.5 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 from continuing
operations ("EPS"):
The Company believes that modifying its 2017 and 2016 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 six months ended June 30, 2017 and 2016 adjustments
were made to reported GAAP net income and diluted EPS to exclude
the impact of restructuring activity, executive severance costs,
acquisition and integration-related expenses, purchase accounting
effects and debt settlement charges, where applicable.
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
(in
millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Income from
continuing operations
|
$
|
11.5
|
|
|
$
|
9.4
|
|
|
$
|
18.7
|
|
|
$
|
19.8
|
|
Add:
|
|
|
|
|
|
|
|
Income tax
expense
|
6.1
|
|
|
4.8
|
|
|
9.9
|
|
|
10.5
|
|
Income before income
taxes
|
17.6
|
|
|
14.2
|
|
|
28.6
|
|
|
30.3
|
|
Add:
|
|
|
|
|
|
|
|
Restructuring
|
0.1
|
|
|
—
|
|
|
0.4
|
|
|
1.2
|
|
Executive severance
costs
|
—
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
Acquisition and
integration-related expenses
|
1.0
|
|
|
0.4
|
|
|
1.5
|
|
|
0.9
|
|
Purchase accounting
effects (a)
|
2.5
|
|
|
0.5
|
|
|
3.0
|
|
|
0.5
|
|
Debt settlement
charges
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
Adjusted income
before income taxes
|
21.2
|
|
|
15.1
|
|
|
34.2
|
|
|
33.2
|
|
Adjusted income tax
expense (b)
|
(7.4)
|
|
|
(5.0)
|
|
|
(11.9)
|
|
|
(11.5)
|
|
Adjusted net income
from continuing operations
|
$
|
13.8
|
|
|
$
|
10.1
|
|
|
$
|
22.3
|
|
|
$
|
21.7
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
(dollars per
diluted share)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
EPS, as
reported
|
$
|
0.19
|
|
|
$
|
0.15
|
|
|
$
|
0.31
|
|
|
$
|
0.32
|
|
Add:
|
|
|
|
|
|
|
|
Income tax
expense
|
0.10
|
|
|
0.08
|
|
|
0.16
|
|
|
0.17
|
|
Income before income
taxes
|
0.29
|
|
|
0.23
|
|
|
0.47
|
|
|
0.49
|
|
Add:
|
|
|
|
|
|
|
|
Restructuring
|
—
|
|
|
—
|
|
|
0.01
|
|
|
0.02
|
|
Executive severance
costs
|
—
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
Acquisition and
integration-related expenses
|
0.02
|
|
|
0.01
|
|
|
0.03
|
|
|
0.01
|
|
Purchase accounting
effects (a)
|
0.04
|
|
|
0.01
|
|
|
0.05
|
|
|
0.01
|
|
Debt settlement
charges
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
Adjusted income
before income taxes
|
0.35
|
|
|
0.25
|
|
|
0.57
|
|
|
0.54
|
|
Adjusted income tax
expense (b)
|
(0.12)
|
|
|
(0.08)
|
|
|
(0.20)
|
|
|
(0.19)
|
|
Adjusted
EPS
|
$
|
0.23
|
|
|
$
|
0.17
|
|
|
$
|
0.37
|
|
|
$
|
0.35
|
|
|
|
(a)
|
Purchase accounting
effects relate to adjustments to exclude the step-up in the
valuation of equipment acquired in connection with current and
prior-year acquisitions that was sold subsequent to the acquisition
dates in the three and six months ended June 30, 2017 and
2016, as well as to exclude the depreciation of the step-up in the
valuation of the rental fleet acquired in the JJE
transaction.
|
(b)
|
Adjusted income tax
expense for the three and six months ended June 30, 2017 and
2016 was recomputed after excluding the impact of restructuring
activity, executive severance costs, acquisition and
integration-related expenses, purchase accounting effects and debt
settlement charges, where applicable.
|
Adjusted EBITDA:
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 income from continuing operations, interest
expense, debt settlement charges, acquisition and
integration-related expenses, restructuring activity, executive
severance costs, 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 income from continuing operations, interest
expense, debt settlement charges, acquisition and
integration-related expenses, restructuring activity, executive
severance costs, 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, 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, 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 income
from continuing operations to consolidated adjusted EBITDA for the
three and six months ended June 30, 2017 and 2016:
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
($ in
millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Income from
continuing operations
|
$
|
11.5
|
|
|
$
|
9.4
|
|
|
$
|
18.7
|
|
|
$
|
19.8
|
|
Add:
|
|
|
|
|
|
|
|
Interest
expense
|
1.3
|
|
|
0.4
|
|
|
1.9
|
|
|
0.8
|
|
Debt settlement
charges
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
Acquisition and
integration-related expenses
|
1.0
|
|
|
0.4
|
|
|
1.5
|
|
|
0.9
|
|
Restructuring
|
0.1
|
|
|
—
|
|
|
0.4
|
|
|
1.2
|
|
Executive severance
costs
|
—
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
Purchase accounting
effects
|
2.5
|
|
|
0.5
|
|
|
3.0
|
|
|
0.5
|
|
Other income,
net
|
(0.2)
|
|
|
(0.3)
|
|
|
(0.5)
|
|
|
(1.0)
|
|
Income tax
expense
|
6.1
|
|
|
4.8
|
|
|
9.9
|
|
|
10.5
|
|
Depreciation and
amortization
|
6.6
|
|
|
4.2
|
|
|
12.2
|
|
|
7.2
|
|
Consolidated adjusted
EBITDA
|
$
|
28.9
|
|
|
$
|
19.4
|
|
|
$
|
47.8
|
|
|
$
|
40.2
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
224.4
|
|
|
$
|
172.3
|
|
|
$
|
402.2
|
|
|
$
|
345.1
|
|
|
|
|
|
|
|
|
|
Consolidated adjusted
EBITDA margin
|
12.9
|
%
|
|
11.3
|
%
|
|
11.9
|
%
|
|
11.6
|
%
|
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 six months
ended June 30, 2017 and 2016:
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
($ in
millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Operating
income
|
$
|
21.0
|
|
|
$
|
14.9
|
|
|
$
|
31.3
|
|
|
$
|
31.4
|
|
Add:
|
|
|
|
|
|
|
|
Acquisition and
integration-related expenses
|
0.2
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
Purchase accounting
effects
|
2.5
|
|
|
0.5
|
|
|
3.0
|
|
|
0.5
|
|
Depreciation and
amortization
|
5.6
|
|
|
3.1
|
|
|
10.1
|
|
|
4.9
|
|
Adjusted
EBITDA
|
$
|
29.3
|
|
|
$
|
18.5
|
|
|
$
|
44.8
|
|
|
$
|
36.8
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
174.3
|
|
|
$
|
119.4
|
|
|
$
|
302.1
|
|
|
$
|
234.8
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
16.8
|
%
|
|
15.5
|
%
|
|
14.8
|
%
|
|
15.7
|
%
|
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 six months
ended June 30, 2017 and 2016:
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
($ in
millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Operating
income
|
$
|
5.6
|
|
|
$
|
6.6
|
|
|
$
|
12.0
|
|
|
$
|
11.5
|
|
Add:
|
|
|
|
|
|
|
|
Restructuring
|
0.1
|
|
|
—
|
|
|
0.4
|
|
|
1.2
|
|
Depreciation and
amortization
|
1.0
|
|
|
1.1
|
|
|
2.0
|
|
|
2.2
|
|
Adjusted
EBITDA
|
$
|
6.7
|
|
|
$
|
7.7
|
|
|
$
|
14.4
|
|
|
$
|
14.9
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
50.1
|
|
|
$
|
52.9
|
|
|
$
|
100.1
|
|
|
$
|
110.3
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
13.4
|
%
|
|
14.6
|
%
|
|
14.4
|
%
|
|
13.5
|
%
|
View original
content:http://www.prnewswire.com/news-releases/federal-signal-corporation-reports-strong-second-quarter-and-raises-full-year-outlook-300500804.html
SOURCE Federal Signal Corporation