Federal Signal Completes Record Year with Fourth Quarter Results including 5% Net Sales Growth, 11% Operating Income Increase, and Strong Cash Generation; Issues 2025 Outlook
Federal Signal (NYSE:FSS) reported strong Q4 2024 results with net sales of $472 million, up 5% year-over-year, and operating income of $70.1 million, an 11% increase. The company achieved record full-year 2024 results with net sales of $1.86 billion (up 8%) and net income of $216.3 million.
Q4 highlights include GAAP EPS of $0.81 (up 8%) and adjusted EPS of $0.87 (up 18%). Operating cash flow was robust at $91 million. The Environmental Solutions Group saw a 6% sales increase, while Safety and Security Systems Group grew 1%.
For 2025, Federal Signal projects net sales between $2.02-2.10 billion and adjusted EPS of $3.60-3.90. The company recently acquired Hog Technologies and increased its quarterly dividend by 17% to $0.14 per share.
Federal Signal (NYSE:FSS) ha riportato risultati solidi per il quarto trimestre del 2024, con vendite nette di $472 milioni, in aumento del 5% rispetto all'anno precedente, e un reddito operativo di $70,1 milioni, con un incremento dell'11%. L'azienda ha raggiunto risultati record per l'intero anno 2024, con vendite nette di $1,86 miliardi (in aumento dell'8%) e un reddito netto di $216,3 milioni.
I punti salienti del quarto trimestre includono un utile per azione GAAP di $0,81 (in aumento dell'8%) e un utile per azione rettificato di $0,87 (in aumento del 18%). Il flusso di cassa operativo è stato robusto, pari a $91 milioni. Il Gruppo Soluzioni Ambientali ha registrato un aumento delle vendite del 6%, mentre il Gruppo Sistemi di Sicurezza e Protezione è cresciuto dell'1%.
Per il 2025, Federal Signal prevede vendite nette tra $2,02-2,10 miliardi e un utile per azione rettificato di $3,60-3,90. L'azienda ha recentemente acquisito Hog Technologies e ha aumentato il suo dividendo trimestrale del 17% a $0,14 per azione.
Federal Signal (NYSE:FSS) reportó resultados sólidos para el cuarto trimestre de 2024, con ventas netas de $472 millones, un aumento del 5% en comparación con el año anterior, y un ingreso operativo de $70,1 millones, un incremento del 11%. La compañía logró resultados récord para el año completo 2024, con ventas netas de $1,86 mil millones (un aumento del 8%) y un ingreso neto de $216,3 millones.
Los aspectos destacados del cuarto trimestre incluyen un EPS GAAP de $0,81 (un aumento del 8%) y un EPS ajustado de $0,87 (un aumento del 18%). El flujo de caja operativo fue robusto, alcanzando los $91 millones. El Grupo de Soluciones Ambientales vio un aumento del 6% en ventas, mientras que el Grupo de Sistemas de Seguridad y Protección creció un 1%.
Para 2025, Federal Signal proyecta ventas netas entre $2,02-2,10 mil millones y un EPS ajustado de $3,60-3,90. La compañía adquirió recientemente Hog Technologies y aumentó su dividendo trimestral en un 17% a $0,14 por acción.
Federal Signal (NYSE:FSS)는 2024년 4분기 실적을 발표하며, 순매출 $472 백만 달러로 전년 대비 5% 증가했으며, 운영 소득은 $70.1 백만 달러로 11% 증가했다고 보고했습니다. 이 회사는 2024년 전체 연도에 대해 순매출 $1.86 억 달러 (8% 증가) 및 순이익 $216.3 백만 달러의 기록적인 실적을 달성했습니다.
4분기 하이라이트로는 GAAP 기준 주당순이익(EPS) $0.81 (8% 증가) 및 조정 주당순이익(EPS) $0.87 (18% 증가)가 있습니다. 운영 현금 흐름은 $91 백만 달러로 견고했습니다. 환경 솔루션 그룹은 6%의 매출 증가를 보였고, 안전 및 보안 시스템 그룹은 1% 성장했습니다.
2025년을 위해 Federal Signal은 순매출을 $2.02-2.10 억 달러로 예상하며, 조정 주당순이익은 $3.60-3.90으로 예상하고 있습니다. 이 회사는 최근 Hog Technologies를 인수하고 분기 배당금을 17% 증가시켜 주당 $0.14로 올렸습니다.
Federal Signal (NYSE:FSS) a annoncé de solides résultats pour le quatrième trimestre 2024, avec un chiffre d'affaires net de $472 millions, en hausse de 5% par rapport à l'année précédente, et un bénéfice d'exploitation de $70,1 millions, soit une augmentation de 11%. L'entreprise a atteint des résultats records pour l'année 2024 avec un chiffre d'affaires net de $1,86 milliard (augmentation de 8%) et un bénéfice net de $216,3 millions.
Les points forts du quatrième trimestre incluent un BPA GAAP de $0,81 (augmentation de 8%) et un BPA ajusté de $0,87 (augmentation de 18%). Le flux de trésorerie d'exploitation était solide, atteignant $91 millions. Le Groupe Solutions Environnementales a connu une augmentation des ventes de 6%, tandis que le Groupe Systèmes de Sécurité et de Protection a progressé de 1%.
Pour 2025, Federal Signal prévoit des ventes nettes entre $2,02-2,10 milliards et un BPA ajusté de $3,60-3,90. L'entreprise a récemment acquis Hog Technologies et a augmenté son dividende trimestriel de 17% à $0,14 par action.
Federal Signal (NYSE:FSS) berichtete über starke Ergebnisse im 4. Quartal 2024 mit einem Nettoumsatz von $472 Millionen, was einem Anstieg von 5% im Vergleich zum Vorjahr entspricht, und einem Betriebsergebnis von $70,1 Millionen, was einem Anstieg von 11% entspricht. Das Unternehmen erzielte für das Gesamtjahr 2024 Rekordwerte mit einem Nettoumsatz von $1,86 Milliarden (ein Anstieg von 8%) und einem Nettogewinn von $216,3 Millionen.
Die Highlights des 4. Quartals umfassen einen GAAP-EPS von $0,81 (ein Anstieg von 8%) und einen bereinigten EPS von $0,87 (ein Anstieg von 18%). Der operative Cashflow war mit $91 Millionen stark. Die Umweltlösungsgruppe verzeichnete einen Anstieg des Umsatzes um 6%, während die Gruppe für Sicherheits- und Schutzsysteme um 1% wuchs.
Für 2025 prognostiziert Federal Signal Nettoumsätze zwischen $2,02-2,10 Milliarden und einen bereinigten EPS von $3,60-3,90. Das Unternehmen hat kürzlich Hog Technologies übernommen und die vierteljährliche Dividende um 17% auf $0,14 pro Aktie erhöht.
- Record Q4 net sales of $472M (+5% YoY)
- Operating income up 11% to $70.1M in Q4
- Full-year net sales grew 8% to $1.86B
- Operating cash flow increased 19% to $231M
- Adjusted EPS up 18% to $0.87 in Q4
- 17% dividend increase to $0.14/share
- Strong liquidity with $574M available credit facility
- Consolidated orders declined to $446M from $465M YoY
- Backlog decreased to $1.00B from $1.03B YoY
- Recent decline in orders for sewer cleaners and street sweepers
Insights
Federal Signal (FSS) delivered exceptional Q4 and full-year 2024 results, demonstrating strong operational execution and margin expansion across both business segments. The company's Q4 operating income grew 11% to $70.1 million on a 5% revenue increase to $472 million, highlighting significant operational leverage and efficiency improvements. This performance drove an 18% increase in adjusted EPS to $0.87, substantially outpacing top-line growth.
The Environmental Solutions Group, representing 84% of total revenue, was the primary growth driver with 6% sales growth and 130 basis point margin expansion to 20.9%. This impressive margin improvement likely stems from favorable product mix, pricing actions, and manufacturing efficiencies. Meanwhile, the Safety and Security Systems Group contributed modestly with 1% revenue growth while improving margins by 40 basis points.
FSS's cash flow generation remains exceptional at $231 million for the year (up 19%), providing substantial financial flexibility with $91 million cash on hand and $574 million in available credit. This robust cash position supports the company's balanced capital allocation strategy, which includes:
- Strategic M&A, evidenced by the recent Hog Technologies acquisition, which strengthens FSS's position in infrastructure maintenance equipment
- A 17% dividend increase to $0.14 per share, signaling management's confidence in sustainable cash generation
- Continued share repurchases ($2.2 million in Q4)
- Organic growth investments, particularly in new product development
Looking ahead, management's 2025 guidance of $3.60-3.90 adjusted EPS on sales of $2.02-2.10 billion implies continued growth, albeit potentially at a more moderate pace than 2024's exceptional performance. While the company noted some softening in orders for specific product categories like sewer cleaners and street sweepers, the substantial $1 billion backlog provides visibility well into 2026, mitigating near-term demand concerns.
The infrastructure maintenance and public safety equipment markets FSS serves continue showing resilience, supported by aging infrastructure replacement cycles and municipal spending stability. With its strong market position, operational excellence, and financial flexibility, FSS appears well-positioned to deliver on its growth objectives despite potential macroeconomic uncertainties.
Fourth Quarter Highlights
- Net sales of
$472 million $24 million 5% , from last year - Operating income of
$70.1 million $7.0 million 11% , from last year - Operating cash flow of
$91 million - GAAP Diluted EPS of
$0.81 $0.06 8% , from last year - Adjusted EPS of
$0.87 $0.13 18% , from last year
Full-Year Highlights
- Net sales of
$1.86 billion $139 million 8% , from last year - Operating income of
$281.4 million $56.9 million 25% , from last year - Operating cash flow of
$231 million $37 million 19% , from last year - GAAP Diluted EPS of
$3.50 $0.94 37% , from last year - Adjusted EPS of
$3.34 $0.76 29% , from last year
2025 Outlook
- Adjusted EPS* of
$3.60 $3.90 - Net sales of
$2.02 billion $2.10 billion - Capital expenditures of
$40 million $50 million
Consolidated net sales for the fourth quarter were
Consolidated net sales for the year ended December 31, 2024 were
Strong Fourth Quarter Performance Wraps up Record Year
"Our record-setting fourth quarter performance represented a strong finish to a year in which we delivered the highest net sales and adjusted EPS in our history," commented Jennifer L. Sherman, President and Chief Executive Officer. "Our results included fourth quarter records across consolidated net sales, adjusted EPS, and adjusted EBITDA margin, thanks to outstanding contributions from both of our groups. Within our Environmental Solutions Group, increased sales volumes, contributions from recent acquisitions, and strong price realization contributed to a
In the Environmental Solutions Group, net sales for the fourth quarter were
Consolidated operating income for the fourth quarter was
Consolidated adjusted earnings before interest, tax, depreciation and amortization ("adjusted EBITDA") for the fourth quarter was
In the Environmental Solutions Group, adjusted EBITDA for the fourth quarter was
Consolidated orders for the fourth quarter were
Operating Cash Flow Further Strengthens Financial Position, Providing Flexibility to Fund Additional M&A, Organic Growth Opportunities, and Cash Returns to Stockholders
Net cash provided by operating activities during the fourth quarter was
At December 31, 2024, total debt was
In February 2025, the Company acquired substantially all the assets and operations of Hog Technologies, a leading
"Our operating cash flow generation this quarter was outstanding, bringing the total amount of cash generated from operations in 2024 to
The Company funded dividends of
The Company also funded stock repurchases of
Outlook
"Conditions in our end markets remain strong overall, with notable demand for dump truck bodies, road-marking and line-removal products, public safety equipment, and our aftermarket offerings. Although we have seen some recent declines in the year-over-year comparisons of orders for new sewer cleaners and street sweepers, driven in part by extended lead times, our current backlogs for these product lines provide excellent visibility well into the first half of 2026. With the ongoing execution against our strategic initiatives, we are confident that we will have another record year in 2025," noted Sherman. "We are anticipating full-year net sales of between
CONFERENCE CALL
Federal Signal will host its fourth quarter earnings conference call on Wednesday, February 26, 2025 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 https://www.federalsignal.com or by dialing phone number 1-877-704-4453 and entering the pin number 13751729. An archived 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
"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. Forward looking statements should not be relied upon as a predictor of actual results. 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 and political uncertainty, risks and adverse economic effects associated with geopolitical conflicts, legal and regulatory developments, foreign currency exchange rate changes, inflationary pressures, product and price competition, supply chain disruptions, availability and pricing of raw materials, interest rate changes, risks associated with acquisitions such as integration of operations and achieving anticipated revenue and cost benefits, work stoppages, increases in pension funding requirements, cybersecurity risks, increased legal expenses and litigation results 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. In 2024, we made adjustments to exclude the impact of acquisition and integration-related expenses (benefits), net, pension-related charges, purchase accounting effects, and certain special tax items. In prior years, we have also made adjustments to exclude the impact of environmental remediation costs of a discontinued operation and certain other unusual or non-recurring items. Should any similar items occur in 2025, we would 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 CONSOLIDATED STATEMENTS OF OPERATIONS
| |||||||
Three Months Ended | Twelve Months Ended | ||||||
(in millions of dollars, except per share data and percentages) | 2024 | 2023 | 2024 | 2023 | |||
Net sales | $ 472.0 | $ 448.4 | $ 1,861.5 | $ 1,722.7 | |||
Cost of sales | 339.4 | 329.0 | 1,328.5 | 1,272.5 | |||
Gross profit | 132.6 | 119.4 | 533.0 | 450.2 | |||
Selling, engineering, general and administrative expenses | 58.4 | 54.1 | 234.0 | 210.1 | |||
Amortization expense | 3.8 | 3.8 | 15.0 | 15.2 | |||
Acquisition and integration related expenses (benefits), net | 0.3 | (1.6) | 2.6 | 0.4 | |||
Operating income | 70.1 | 63.1 | 281.4 | 224.5 | |||
Interest expense, net | 3.1 | 4.3 | 12.5 | 19.7 | |||
Pension settlement charges | 3.8 | — | 3.8 | — | |||
Other expense, net | 0.3 | 0.3 | 1.2 | 1.8 | |||
Income before income taxes | 62.9 | 58.5 | 263.9 | 203.0 | |||
Income tax expense | 12.9 | 12.1 | 47.6 | 45.6 | |||
Net income | $ 50.0 | $ 46.4 | $ 216.3 | $ 157.4 | |||
Earnings per share: | |||||||
Basic | $ 0.82 | $ 0.76 | $ 3.55 | $ 2.59 | |||
Diluted | $ 0.81 | $ 0.75 | $ 3.50 | $ 2.56 | |||
Weighted average common shares outstanding: | |||||||
Basic | 61.0 | 60.8 | 60.9 | 60.7 | |||
Diluted | 61.9 | 61.6 | 61.7 | 61.5 | |||
Cash dividends declared per common share | $ 0.12 | $ 0.10 | $ 0.48 | $ 0.39 | |||
Operating data: | |||||||
Operating margin | 14.9 % | 14.1 % | 15.1 % | 13.0 % | |||
Adjusted EBITDA | $ 89.3 | $ 77.5 | $ 350.6 | $ 286.0 | |||
Adjusted EBITDA margin | 18.9 % | 17.3 % | 18.8 % | 16.6 % | |||
Total orders | $ 446.2 | $ 465.0 | $ 1,847.8 | $ 1,870.1 | |||
Backlog | 997.1 | 1,025.1 | 997.1 | 1,025.1 | |||
Depreciation and amortization | 17.6 | 15.3 | 65.3 | 60.4 | |||
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
| |||
As of December 31, | |||
(in millions of dollars, except per share data) | 2024 | 2023 | |
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 91.1 | $ 61.0 | |
Accounts receivable, net of allowances for doubtful accounts of | 196.4 | 186.2 | |
Inventories | 331.0 | 303.4 | |
Prepaid expenses and other current assets | 24.0 | 19.6 | |
Total current assets | 642.5 | 570.2 | |
Properties and equipment, net of accumulated depreciation of | 218.9 | 190.8 | |
Rental equipment, net of accumulated depreciation of | 173.2 | 134.8 | |
Operating lease right-of-use assets | 27.8 | 21.0 | |
Goodwill | 477.7 | 472.7 | |
Intangible assets, net of accumulated amortization of | 199.7 | 207.5 | |
Deferred tax assets | 9.4 | 12.0 | |
Deferred charges and other long-term assets | 16.0 | 11.5 | |
Total assets | $ 1,765.2 | $ 1,620.5 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities: | |||
Current portion of long-term borrowings and finance lease obligations | $ 19.4 | $ 4.7 | |
Accounts payable | 79.0 | 66.7 | |
Customer deposits | 35.0 | 27.1 | |
Accrued liabilities: | |||
Compensation and withholding taxes | 45.6 | 42.3 | |
Current operating lease liabilities | 6.8 | 6.8 | |
Other current liabilities | 56.0 | 48.2 | |
Total current liabilities | 241.8 | 195.8 | |
Long-term borrowings and finance lease obligations | 204.4 | 294.3 | |
Long-term operating lease liabilities | 21.8 | 14.9 | |
Long-term pension and other post-retirement benefit liabilities | 41.7 | 44.2 | |
Deferred tax liabilities | 58.0 | 53.2 | |
Other long-term liabilities | 11.4 | 16.2 | |
Total liabilities | 579.1 | 618.6 | |
Stockholders' equity: | |||
Common stock, | 70.3 | 70.0 | |
Capital in excess of par value | 309.8 | 291.1 | |
Retained earnings | 1,102.8 | 915.8 | |
Treasury stock, at cost, 9.2 and 9.0 shares, respectively | (207.8) | (193.7) | |
Accumulated other comprehensive loss | (89.0) | (81.3) | |
Total stockholders' equity | 1,186.1 | 1,001.9 | |
Total liabilities and stockholders' equity | $ 1,765.2 | $ 1,620.5 | |
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
| |||
For the Years Ended | |||
(in millions of dollars) | 2024 | 2023 | |
Operating activities: | |||
Net income | $ 216.3 | $ 157.4 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 65.3 | 60.4 | |
Deferred financing costs | 0.5 | 0.5 | |
Stock-based compensation expense | 15.6 | 13.1 | |
Pension settlement charges | 3.8 | — | |
Pension-related expense, net of funding | (3.8) | (1.8) | |
Changes in fair value of contingent consideration | (0.2) | (2.1) | |
Amortization of interest rate swap settlement gain | (1.4) | (2.4) | |
Deferred income taxes, including change in valuation allowance | 4.9 | (0.3) | |
Changes in operating assets and liabilities: | |||
Accounts receivable | (9.0) | (6.1) | |
Inventories | (24.1) | 9.8 | |
Prepaid expenses and other current assets | (1.2) | (1.7) | |
Rental equipment | (60.3) | (44.8) | |
Accounts payable | 12.6 | (8.5) | |
Customer deposits | 7.2 | 1.1 | |
Accrued liabilities | 6.8 | 15.8 | |
Income taxes | (5.4) | (0.5) | |
Other | 3.7 | 4.5 | |
Net cash provided by operating activities | 231.3 | 194.4 | |
Investing activities: | |||
Purchases of properties and equipment | (40.6) | (30.3) | |
Payments for acquisition-related activity, net of cash acquired | (39.7) | (55.0) | |
Other, net | 1.4 | 1.6 | |
Net cash used for investing activities | (78.9) | (83.7) | |
Financing activities: | |||
Decrease in revolving lines of credit, net | (76.5) | (64.1) | |
Payments on long-term borrowings | (3.9) | (0.8) | |
Purchases of treasury stock | (6.7) | (5.5) | |
Redemptions of common stock to satisfy withholding taxes related to stock-based compensation | (6.1) | (7.0) | |
Payments for acquisition-related activity | — | (0.5) | |
Cash dividends paid to stockholders | (29.3) | (23.8) | |
Proceeds from stock compensation activity | 2.0 | 3.9 | |
Other, net | (0.5) | (0.1) | |
Net cash used for financing activities | (121.0) | (97.9) | |
Effects of foreign exchange rate changes on cash and cash equivalents | (1.3) | 0.7 | |
Increase in cash and cash equivalents | 30.1 | 13.5 | |
Cash and cash equivalents at beginning of year | 61.0 | 47.5 | |
Cash and cash equivalents at end of year | $ 91.1 | $ 61.0 | |
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES GROUP RESULTS
| |||||||||||
The following tables summarize group operating results as of and for the three and twelve months ended December 31, 2024 and 2023:
Environmental Solutions Group
| |||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||
(in millions of dollars, except percentages) | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||
Net sales | $ 396.1 | $ 373.1 | $ 23.0 | $ 1,557.1 | $ 1,437.9 | $ 119.2 | |||||
Operating income | 65.1 | 58.2 | 6.9 | 261.2 | 209.2 | 52.0 | |||||
Adjusted EBITDA | 82.9 | 73.3 | 9.6 | 324.8 | 267.2 | 57.6 | |||||
Operating data: | |||||||||||
Operating margin | 16.4 % | 15.6 % | 0.8 % | 16.8 % | 14.5 % | 2.3 % | |||||
Adjusted EBITDA margin | 20.9 % | 19.6 % | 1.3 % | 20.9 % | 18.6 % | 2.3 % | |||||
Total orders | $ 365.0 | $ 398.8 | $ (33.8) | $ 1,541.6 | $ 1,578.0 | $ (36.4) | |||||
Backlog | 939.7 | 966.5 | (26.8) | 939.7 | 966.5 | (26.8) | |||||
Depreciation and amortization | 16.5 | 14.2 | 2.3 | 60.9 | 56.0 | 4.9 | |||||
Safety and Security Systems Group | |||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||
(in millions of dollars, except percentages) | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||
Net sales | $ 75.9 | $ 75.3 | $ 0.6 | $ 304.4 | $ 284.8 | $ 19.6 | |||||
Operating income | 15.5 | 14.9 | 0.6 | 64.4 | 54.8 | 9.6 | |||||
Adjusted EBITDA | 16.4 | 16.0 | 0.4 | 68.3 | 59.0 | 9.3 | |||||
Operating data: | |||||||||||
Operating margin | 20.4 % | 19.8 % | 0.6 % | 21.2 % | 19.2 % | 2.0 % | |||||
Adjusted EBITDA margin | 21.6 % | 21.2 % | 0.4 % | 22.4 % | 20.7 % | 1.7 % | |||||
Total orders | $ 81.2 | $ 66.2 | $ 15.0 | $ 306.2 | $ 292.1 | $ 14.1 | |||||
Backlog | 57.4 | 58.6 | (1.2) | 57.4 | 58.6 | (1.2) | |||||
Depreciation and amortization | 0.9 | 1.1 | (0.2) | 3.9 | 4.2 | (0.3) | |||||
Corporate Expenses
Corporate operating expenses were
Corporate operating expenses were
SEC REGULATION G NON-GAAP RECONCILIATION
The financial measures presented below are unaudited and are not in accordance with
Adjusted Net Income and Earnings Per Share ("EPS"):
The Company believes that modifying its 2024 and 2023 net income and diluted EPS provides additional measures to assist it in comparing its performance on a consistent basis for purposes of business decision making by removing the impact of certain items that management believes are not representative of its underlying performance and to improve the comparability of results across reporting periods. Adjusted net income and Adjusted EPS are both non-GAAP measures. During the three and twelve months ended December 31, 2024 and 2023, adjustments were made to reported GAAP net income and diluted EPS to exclude the impact of acquisition and integration-related expenses (benefits), net, pension-related charges, environmental remediation costs of a discontinued operation, purchase accounting effects, and certain special tax items, where applicable.
Three Months Ended | Twelve Months Ended | ||||||
(in millions of dollars) | 2024 | 2023 | 2024 | 2023 | |||
Net income | $ 50.0 | $ 46.4 | $ 216.3 | $ 157.4 | |||
Add: | |||||||
Income tax expense | 12.9 | 12.1 | 47.6 | 45.6 | |||
Income before income taxes | 62.9 | 58.5 | 263.9 | 203.0 | |||
Add (less): | |||||||
Acquisition and integration-related expenses (benefits), net | 0.5 | (1.6) | 2.8 | 0.4 | |||
Pension-related charges (a) | 3.8 | — | 3.8 | — | |||
Environmental remediation costs of a discontinued operation (b) | — | — | — | 0.8 | |||
Purchase accounting effects (c) | 1.3 | 0.7 | 1.3 | 0.7 | |||
Adjusted income before income taxes | $ 68.5 | $ 57.6 | $ 271.8 | $ 204.9 | |||
Adjusted income tax expense (d) (e) | (14.7) | (11.9) | (65.5) | (46.1) | |||
Adjusted net income | $ 53.8 | $ 45.7 | $ 206.3 | $ 158.8 | |||
Three Months Ended | Twelve Months Ended | ||||||
(in dollars per diluted share) | 2024 | 2023 | 2024 | 2023 | |||
EPS, as reported | $ 0.81 | $ 0.75 | $ 3.50 | $ 2.56 | |||
Add: | |||||||
Income tax expense | 0.21 | 0.20 | 0.77 | 0.74 | |||
Income before income taxes | 1.02 | 0.95 | 4.27 | 3.30 | |||
Add (less): | |||||||
Acquisition and integration-related expenses (benefits), net | 0.01 | (0.03) | 0.05 | 0.01 | |||
Pension-related charges (a) | 0.06 | — | 0.06 | — | |||
Environmental remediation costs of a discontinued operation (b) | — | — | — | 0.01 | |||
Purchase accounting effects (c) | 0.02 | 0.01 | 0.02 | 0.01 | |||
Adjusted income before income taxes | $ 1.11 | $ 0.93 | $ 4.40 | $ 3.33 | |||
Adjusted income tax expense (d) (e) | (0.24) | (0.19) | (1.06) | (0.75) | |||
Adjusted EPS | $ 0.87 | $ 0.74 | $ 3.34 | $ 2.58 | |||
(a) | Pension-related charges in the three and twelve months ended December 31, 2024 include |
(b) | Environmental remediation costs of a discontinued operation in the twelve months ended December 31, 2023 relate to estimated environmental clean up costs at a facility associated with a business that was discontinued in 2009. Such charges are included as a component of Other expense, net on the Consolidated Statements of Operations. |
(c) | Purchase accounting effects in the three and twelve months ended December 31, 2024 and 2023 relate to adjustments to exclude the step-up in the valuation of inventory acquired in connection with acquisitions that was sold subsequent to the acquisition date and the depreciation of the step-up in the valuation of rental equipment acquired in the Standard Equipment Company transaction, where applicable. Such costs are included as a component of Cost of sales on the Consolidated Statements of Operations. |
(d) | Adjusted income tax expense for the three and twelve months ended December 31, 2024 was recomputed after excluding the tax effects of acquisition and integration-related expenses (benefits), net, pension-related charges, and purchase accounting effects, where applicable. Adjusted income tax expense for the three and twelve months ended December 31, 2024 also excludes discrete tax benefits of |
(e) | Adjusted income tax expense for the three and twelve months ended December 31, 2023 was recomputed after excluding the impact of acquisition and integration-related expenses (benefits), net, environmental remediation costs of a discontinued operation, 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 to assist in comparing its performance on a consistent basis for purposes of business decision making by removing the impact of certain items that management believes are not 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, net, pension settlement charges, acquisition and integration-related expenses (benefits), net, purchase accounting effects, other expense, net, income tax expense, and depreciation and amortization expense, as applicable. Consolidated adjusted EBITDA margin is a non-GAAP measure that represents the total of net income, interest expense, net, pension settlement charges, acquisition and integration-related expenses (benefits), net, purchase accounting effects, other expense, net, income tax expense, and depreciation and amortization expense, as applicable, 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, net, 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, net, purchase accounting effects, and depreciation and amortization expense, as applicable, divided by segment 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 operating 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 twelve months ended December 31, 2024 and 2023:
Three Months Ended | Twelve Months Ended | ||||||
(in millions of dollars, except percentages) | 2024 | 2023 | 2024 | 2023 | |||
Net income | $ 50.0 | $ 46.4 | $ 216.3 | $ 157.4 | |||
Add (less): | |||||||
Interest expense, net | 3.1 | 4.3 | 12.5 | 19.7 | |||
Pension settlement charges | 3.8 | — | 3.8 | — | |||
Acquisition and integration-related expenses (benefits), net | 0.5 | (1.6) | 2.8 | 0.4 | |||
Purchase accounting effects * | 1.1 | 0.7 | 1.1 | 0.7 | |||
Other expense, net | 0.3 | 0.3 | 1.2 | 1.8 | |||
Income tax expense | 12.9 | 12.1 | 47.6 | 45.6 | |||
Depreciation and amortization | 17.6 | 15.3 | 65.3 | 60.4 | |||
Consolidated adjusted EBITDA | $ 89.3 | $ 77.5 | $ 350.6 | $ 286.0 | |||
Net sales | $ 472.0 | $ 448.4 | $ 1,861.5 | $ 1,722.7 | |||
Consolidated adjusted EBITDA margin | 18.9 % | 17.3 % | 18.8 % | 16.6 % | |||
* Excludes purchase accounting expense effects included within depreciation and amortization of |
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 twelve months ended December 31, 2024 and 2023:
Three Months Ended | Twelve Months Ended | ||||||
(in millions of dollars, except percentages) | 2024 | 2023 | 2024 | 2023 | |||
Operating income | $ 65.1 | $ 58.2 | $ 261.2 | $ 209.2 | |||
Add: | |||||||
Acquisition and integration-related expenses | 0.2 | 0.2 | 1.6 | 1.3 | |||
Purchase accounting effects * | 1.1 | 0.7 | 1.1 | 0.7 | |||
Depreciation and amortization | 16.5 | 14.2 | 60.9 | 56.0 | |||
Adjusted EBITDA | $ 82.9 | $ 73.3 | $ 324.8 | $ 267.2 | |||
Net sales | $ 396.1 | $ 373.1 | $ 1,557.1 | $ 1,437.9 | |||
Adjusted EBITDA margin | 20.9 % | 19.6 % | 20.9 % | 18.6 % | |||
* Excludes purchase accounting expense effects included within depreciation and amortization of |
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 twelve months ended December 31, 2024 and 2023:
Three Months Ended | Twelve Months Ended | ||||||
(in millions of dollars, except percentages) | 2024 | 2023 | 2024 | 2023 | |||
Operating income | $ 15.5 | $ 14.9 | $ 64.4 | $ 54.8 | |||
Add: | |||||||
Depreciation and amortization | 0.9 | 1.1 | 3.9 | 4.2 | |||
Adjusted EBITDA | $ 16.4 | $ 16.0 | $ 68.3 | $ 59.0 | |||
Net sales | $ 75.9 | $ 75.3 | $ 304.4 | $ 284.8 | |||
Adjusted EBITDA margin | 21.6 % | 21.2 % | 22.4 % | 20.7 % | |||
View original content:SOURCE Federal Signal Corporation
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