Federal Signal Reports Second Quarter Results Including Double-Digit Sales and Earnings Growth; Raises Full-Year Outlook
Federal Signal (NYSE:FSS) reported strong Q2 2024 results, with double-digit sales and earnings growth. Key highlights include:
- Net sales of $490 million, up 11% year-over-year
- Operating income of $81.1 million, up 37%
- GAAP EPS of $0.99, up 50%
- Adjusted EPS of $0.95, up 42%
- Backlog of $1.08 billion, up 7%
The company raised its 2024 adjusted EPS outlook to $3.20-$3.35 from $2.95-$3.15. Both Environmental Solutions and Safety and Security Systems segments showed impressive growth. Operating cash flow increased by 13% to $41 million, strengthening the company's financial position.
Federal Signal (NYSE:FSS) ha riportato risultati solidi per il secondo trimestre 2024, con una crescita a due cifre delle vendite e degli utili. Le principali evidenze includono:
- Vendite nette di 490 milioni di dollari, in aumento dell'11% rispetto all'anno precedente
- Utile operativo di 81,1 milioni di dollari, in aumento del 37%
- GAAP EPS di 0,99 dollari, in aumento del 50%
- EPS aggiustato di 0,95 dollari, in aumento del 42%
- Fatturato da evadere di 1,08 miliardi di dollari, in aumento del 7%
L'azienda ha rivisto al rialzo le sue previsioni per l'EPS aggiustato 2024 a 3,20-3,35 dollari da 2,95-3,15 dollari. Entrambi i segmenti Soluzioni Ambientali e Sistemi di Sicurezza e Protezione hanno mostrato una crescita impressionante. I flussi di cassa operativi sono aumentati del 13%, arrivando a 41 milioni di dollari, rafforzando la posizione finanziaria dell'azienda.
Federal Signal (NYSE:FSS) reportó resultados sólidos para el segundo trimestre de 2024, con un crecimiento de ventas y ganancias de dos dígitos. Los aspectos más destacados incluyen:
- Ventas netas de 490 millones de dólares, un aumento del 11% en comparación con el año anterior
- Ingresos operativos de 81,1 millones de dólares, un aumento del 37%
- GAAP EPS de 0.99 dólares, un aumento del 50%
- EPS ajustado de 0.95 dólares, un aumento del 42%
- Cartera de pedidos de 1.08 mil millones de dólares, un aumento del 7%
La empresa elevó su perspectiva de EPS ajustado para 2024 a 3.20-3.35 dólares desde 2.95-3.15 dólares. Tanto el segmento de Soluciones Ambientales como el de Sistemas de Seguridad y Protección mostraron un crecimiento impresionante. El flujo de caja operativo aumentó un 13% a 41 millones de dólares, fortaleciendo la posición financiera de la empresa.
Federal Signal (NYSE:FSS)는 2024년 2분기에 매출 및 수익이 두 자릿수로 성장했다고 보고했습니다. 주요 하이라이트는 다음과 같습니다:
- 순매출 4억 9천만 달러, 전년 대비 11% 증가
- 운영 수익 8천1백만 달러, 전년 대비 37% 증가
- GAAP EPS 0.99달러, 50% 증가
- 조정 EPS 0.95달러, 42% 증가
- 수주 잔고 10억 8천만 달러, 7% 증가
회사는 2024년 조정 EPS 전망을 2.95-3.15달러에서 3.20-3.35달러로 상향 조정했습니다. 환경 솔루션 및 안전 및 보안 시스템 부문 모두 인상적인 성장을 보였습니다. 운영 현금 흐름은 13% 증가하여 4천1백만 달러에 이르렀고 회사의 재무 상태를 강화했습니다.
Federal Signal (NYSE:FSS) a annoncé de bons résultats pour le deuxième trimestre 2024, avec une croissance à deux chiffres des ventes et des bénéfices. Les points clés incluent :
- Chiffre d'affaires net de 490 millions de dollars, en hausse de 11% par rapport à l'année précédente
- Résultat d'exploitation de 81,1 millions de dollars, en hausse de 37%
- BPA GAAP de 0,99 dollar, en hausse de 50%
- BPA ajusté de 0,95 dollar, en hausse de 42%
- Carnet de commandes de 1,08 milliard de dollars, en hausse de 7%
L'entreprise a relevé ses perspectives pour l'EPS ajusté 2024 à 3,20-3,35 dollars contre 2,95-3,15 dollars. Les segments Solutions Environnementales et Systèmes de Sécurité et de Protection ont montré une croissance impressionnante. Le flux de trésorerie opérationnel a augmenté de 13% pour atteindre 41 millions de dollars, renforçant la position financière de l'entreprise.
Federal Signal (NYSE:FSS) berichtete von starken Ergebnissen im 2. Quartal 2024, mit doppelstelligen Wachstumsraten bei Umsatz und Gewinn. Wichtige Highlights sind:
- Nettoumsatz von 490 Millionen USD, ein Anstieg um 11% im Vergleich zum Vorjahr
- Betriebsergebnis von 81,1 Millionen USD, ein Anstieg um 37%
- GAAP EPS von 0,99 USD, ein Anstieg um 50%
- Bereinigtes EPS von 0,95 USD, ein Anstieg um 42%
- Auftragsbestand von 1,08 Milliarden USD, ein Anstieg um 7%
Das Unternehmen hat seine Prognose für das bereinigte EPS 2024 auf 3,20-3,35 USD von zuvor 2,95-3,15 USD erhöht. Sowohl die Segmente Umweltlösungen als auch Sicherheits- und Schutzsysteme zeigten ein beeindruckendes Wachstum. Der operative Cashflow stieg um 13% auf 41 Millionen USD und stärkte die finanzielle Position des Unternehmens.
- Net sales increased by 11% to $490 million
- Operating income grew by 37% to $81.1 million
- GAAP EPS rose by 50% to $0.99
- Adjusted EPS increased by 42% to $0.95
- Backlog grew by 7% to $1.08 billion
- Raised full-year adjusted EPS outlook
- Operating cash flow improved by 13% to $41 million
- Environmental Solutions Group delivered 10% net sales growth and 25% adjusted EBITDA increase
- Safety and Security Systems Group achieved 18% top line growth and 23.7% adjusted EBITDA margin
- None.
Insights
Federal Signal 's Q2 2024 results demonstrate robust financial performance and positive momentum. The company reported impressive growth across key metrics, with net sales increasing by
Particularly noteworthy is the substantial improvement in profitability. The consolidated operating margin expanded from
The company's financial position remains strong, with operating cash flow up
The raised full-year adjusted EPS guidance to
Federal Signal's Q2 results underscore the company's strong market position in environmental and safety solutions. The Environmental Solutions Group, contributing
The Safety and Security Systems Group demonstrated even stronger growth, with an
The company's backlog of
Federal Signal's ability to maintain and grow its backlog in the face of increased production rates speaks to the ongoing strength of its end markets. The company's focus on environmental and safety solutions positions it well to benefit from increasing emphasis on sustainability and public safety across various industries.
Investors should keep an eye on potential headwinds such as supply chain disruptions or economic slowdowns that could impact Federal Signal's end markets. However, the company's diverse product portfolio and strong market position should provide some resilience against market fluctuations.
Second Quarter Highlights
- Net sales of
$490 million $48 million 11% , from last year - Operating income of
$81.1 million $21.7 million 37% , from last year - GAAP EPS of
$0.99 $0.33 50% , from last year - Adjusted EPS of
$0.95 $0.28 42% , from last year - Backlog of
$1.08 billion $73 million 7% , from last year - Raises 2024 adjusted EPS* outlook to a new range of
$3.20 $3.35 $2.95 $3.15
Consolidated net sales for the second quarter were
The Company also reported adjusted net income for the second quarter of
Double-Digit Organic Improvement in Net Sales and Earnings; Customer Demand Remains High
"Our businesses were able to deliver double-digit year-over-year organic net sales and earnings growth, gross margin expansion, and a 280-basis point improvement in adjusted EBITDA margin during the second quarter," commented Jennifer L. Sherman, President and Chief Executive Officer. "Within our Environmental Solutions Group, we were able to deliver
In the Environmental Solutions Group, net sales for the second quarter were
Consolidated operating income for the second quarter was
Consolidated adjusted earnings before interest, tax, depreciation and amortization ("adjusted EBITDA") for the second quarter was
In the Environmental Solutions Group, adjusted EBITDA for the second quarter was
Consolidated orders for the second quarter were
Increased Operating Cash Flow Further Strengthens Financial Position, Providing Flexibility to Fund Growth Opportunities and Cash Returns to Stockholders
Operating cash flow during the second quarter was
At June 30, 2024, consolidated debt was
"The improved cash flow facilitated additional debt repayment of approximately
The Company funded dividends of
Outlook
"Demand for our products and aftermarket offerings remains high, with our strong order intake this quarter contributing to a backlog of
CONFERENCE CALL
Federal Signal will host its second quarter conference call on Thursday, July 25, 2024 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 1-877-704-4453 and entering the pin number 13747736. 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
"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 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 the three and six months ended June 30, 2024, we made adjustments to exclude the impact of acquisition and integration-related expenses, net, 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, purchase accounting effects and certain other unusual or non-recurring items. Should any similar items occur in the remainder of 2024, 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 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
| |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
(in millions, except per share data) | 2024 | 2023 | 2024 | 2023 | |||
Net sales | $ 490.4 | $ 442.4 | $ 915.3 | $ 827.9 | |||
Cost of sales | 346.4 | 325.1 | 655.3 | 614.8 | |||
Gross profit | 144.0 | 117.3 | 260.0 | 213.1 | |||
Selling, engineering, general and administrative expenses | 58.3 | 53.4 | 115.5 | 105.4 | |||
Amortization expense | 3.8 | 3.9 | 7.4 | 7.5 | |||
Acquisition and integration-related expenses, net | 0.8 | 0.6 | 1.7 | 1.3 | |||
Operating income | 81.1 | 59.4 | 135.4 | 98.9 | |||
Interest expense, net | 3.2 | 5.6 | 6.4 | 10.3 | |||
Other expense, net | 0.4 | 1.1 | 0.6 | 1.2 | |||
Income before income taxes | 77.5 | 52.7 | 128.4 | 87.4 | |||
Income tax expense | 16.7 | 12.4 | 16.0 | 19.7 | |||
Net income | $ 60.8 | $ 40.3 | $ 112.4 | $ 67.7 | |||
Earnings per share: | |||||||
Basic | $ 1.00 | $ 0.66 | $ 1.84 | $ 1.12 | |||
Diluted | $ 0.99 | $ 0.66 | $ 1.82 | $ 1.10 | |||
Weighted average common shares outstanding: | |||||||
Basic | 61.0 | 60.7 | 61.0 | 60.7 | |||
Diluted | 61.7 | 61.4 | 61.7 | 61.4 | |||
Cash dividends declared per common share | $ 0.12 | $ 0.10 | $ 0.24 | $ 0.19 | |||
Operating data: | |||||||
Operating margin | 16.5 % | 13.4 % | 14.8 % | 11.9 % | |||
Adjusted EBITDA | $ 97.7 | $ 75.5 | $ 168.3 | $ 130.0 | |||
Adjusted EBITDA margin | 19.9 % | 17.1 % | 18.4 % | 15.7 % | |||
Total orders | $ 473.0 | $ 480.2 | $ 975.7 | $ 954.9 | |||
Backlog | 1,079.9 | 1,006.5 | 1,079.9 | 1,006.5 | |||
Depreciation and amortization | 15.8 | 15.5 | 31.2 | 29.8 | |||
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS | |||
June 30, | December 31, | ||
(in millions, except per share data) | (Unaudited) | ||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 48.6 | $ 61.0 | |
Accounts receivable, net of allowances for doubtful accounts of | 213.6 | 186.2 | |
Inventories | 326.9 | 303.4 | |
Prepaid expenses and other current assets | 22.7 | 19.6 | |
Total current assets | 611.8 | 570.2 | |
Properties and equipment, net of accumulated depreciation of | 203.4 | 190.8 | |
Rental equipment, net of accumulated depreciation of | 154.2 | 134.8 | |
Operating lease right-of-use assets | 27.8 | 21.0 | |
Goodwill | 469.9 | 472.7 | |
Intangible assets, net of accumulated amortization of | 200.6 | 207.5 | |
Deferred tax assets | 11.7 | 12.0 | |
Other long-term assets | 12.1 | 11.5 | |
Total assets | $ 1,691.5 | $ 1,620.5 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities: | |||
Current portion of long-term borrowings and finance lease obligations | $ 6.5 | $ 4.7 | |
Accounts payable | 87.0 | 66.7 | |
Customer deposits | 24.6 | 27.1 | |
Accrued liabilities: | |||
Compensation and withholding taxes | 32.9 | 42.3 | |
Current operating lease liabilities | 7.3 | 6.8 | |
Other current liabilities | 53.4 | 48.2 | |
Total current liabilities | 211.7 | 195.8 | |
Long-term borrowings and finance lease obligations | 248.8 | 294.3 | |
Long-term operating lease liabilities | 21.3 | 14.9 | |
Long-term pension and other postretirement benefit liabilities | 42.9 | 44.2 | |
Deferred tax liabilities | 55.5 | 53.2 | |
Other long-term liabilities | 11.7 | 16.2 | |
Total liabilities | 591.9 | 618.6 | |
Stockholders' equity: | |||
Common stock, | 70.3 | 70.0 | |
Capital in excess of par value | 302.0 | 291.1 | |
Retained earnings | 1,013.5 | 915.8 | |
Treasury stock, at cost, 9.1 and 9.0 shares, respectively | (200.8) | (193.7) | |
Accumulated other comprehensive loss | (85.4) | (81.3) | |
Total stockholders' equity | 1,099.6 | 1,001.9 | |
Total liabilities and stockholders' equity | $ 1,691.5 | $ 1,620.5 | |
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||
Six Months Ended June 30, | |||
(in millions) | 2024 | 2023 | |
Operating activities: | |||
Net income | $ 112.4 | $ 67.7 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 31.2 | 29.8 | |
Stock-based compensation expense | 8.8 | 5.8 | |
Changes in fair value of contingent consideration | 0.1 | (0.2) | |
Amortization of interest rate swap settlement gain | (1.2) | (1.2) | |
Deferred income taxes | 2.3 | 2.2 | |
Changes in operating assets and liabilities | (81.7) | (61.1) | |
Net cash provided by operating activities | 71.9 | 43.0 | |
Investing activities: | |||
Purchases of properties and equipment | (24.2) | (15.7) | |
Payments for acquisition-related activity, net of cash acquired | — | (56.0) | |
Other, net | 1.2 | 0.3 | |
Net cash used for investing activities | (23.0) | (71.4) | |
Financing activities: | |||
(Decrease) increase in revolving lines of credit, net | (39.2) | 44.7 | |
Payments on long-term borrowings | (1.6) | — | |
Purchases of treasury stock | (0.1) | — | |
Redemptions of common stock to satisfy withholding taxes related to stock-based compensation | (5.9) | (5.4) | |
Payments for acquisition-related activity | — | (0.5) | |
Cash dividends paid to stockholders | (14.7) | (11.6) | |
Proceeds from stock-based compensation activity | 1.3 | 2.0 | |
Other, net | (0.3) | — | |
Net cash (used for) provided by financing activities | (60.5) | 29.2 | |
Effects of foreign exchange rate changes on cash and cash equivalents | (0.8) | 0.5 | |
(Decrease) increase in cash and cash equivalents | (12.4) | 1.3 | |
Cash and cash equivalents at beginning of year | 61.0 | 47.5 | |
Cash and cash equivalents at end of period | $ 48.6 | $ 48.8 | |
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, 2024 and 2023:
| |||||||||||
Environmental Solutions Group | |||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
($ in millions) | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||
Net sales | $ 408.8 | $ 373.0 | $ 35.8 | $ 762.8 | $ 691.8 | $ 71.0 | |||||
Operating income | 72.9 | 56.2 | 16.7 | 124.6 | 93.8 | 30.8 | |||||
Adjusted EBITDA | 88.2 | 70.7 | 17.5 | 154.7 | 121.9 | 32.8 | |||||
Operating data: | |||||||||||
Operating margin | 17.8 % | 15.1 % | 2.7 % | 16.3 % | 13.6 % | 2.7 % | |||||
Adjusted EBITDA margin | 21.6 % | 19.0 % | 2.6 % | 20.3 % | 17.6 % | 2.7 % | |||||
Total orders | $ 396.2 | $ 408.6 | $ (12.4) | $ 823.9 | $ 804.4 | $ 19.5 | |||||
Backlog | 1,023.4 | 939.7 | 83.7 | 1,023.4 | 939.7 | 83.7 | |||||
Depreciation and amortization | 14.7 | 14.3 | 0.4 | 29.0 | 27.5 | 1.5 | |||||
Safety and Security Systems Group | |||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
($ in millions) | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||
Net sales | $ 81.6 | $ 69.4 | $ 12.2 | $ 152.5 | $ 136.1 | $ 16.4 | |||||
Operating income | 18.3 | 14.1 | 4.2 | 32.1 | 26.2 | 5.9 | |||||
Adjusted EBITDA | 19.3 | 15.2 | 4.1 | 34.1 | 28.4 | 5.7 | |||||
Operating data: | |||||||||||
Operating margin | 22.4 % | 20.3 % | 2.1 % | 21.0 % | 19.3 % | 1.7 % | |||||
Adjusted EBITDA margin | 23.7 % | 21.9 % | 1.8 % | 22.4 % | 20.9 % | 1.5 % | |||||
Total orders | $ 76.8 | $ 71.6 | $ 5.2 | $ 151.8 | $ 150.5 | $ 1.3 | |||||
Backlog | 56.5 | 66.8 | (10.3) | 56.5 | 66.8 | (10.3) | |||||
Depreciation and amortization | 1.0 | 1.1 | (0.1) | 2.0 | 2.2 | (0.2) | |||||
Corporate Expenses
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 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, 2024 and 2023 adjustments were made to reported GAAP net income and diluted EPS to exclude the impact of acquisition and integration-related expenses, net, environmental remediation costs of a discontinued operation and certain special tax items, where applicable.
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
(in millions) | 2024 | 2023 | 2024 | 2023 | |||
Net income, as reported | $ 60.8 | $ 40.3 | $ 112.4 | $ 67.7 | |||
Add: | |||||||
Income tax expense | 16.7 | 12.4 | 16.0 | 19.7 | |||
Income before income taxes | 77.5 | 52.7 | 128.4 | 87.4 | |||
Add: | |||||||
Acquisition and integration-related expenses, net | 0.8 | 0.6 | 1.7 | 1.3 | |||
Environmental remediation costs of a discontinued operation (a) | — | 0.8 | — | 0.8 | |||
Adjusted income before income taxes | 78.3 | 54.1 | 130.1 | 89.5 | |||
Adjusted income tax expense (b) (c) | (19.5) | (12.7) | (31.8) | (20.2) | |||
Adjusted net income | $ 58.8 | $ 41.4 | $ 98.3 | $ 69.3 | |||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
(dollars per diluted share) | 2024 | 2023 | 2024 | 2023 | |||
EPS, as reported | $ 0.99 | $ 0.66 | $ 1.82 | $ 1.10 | |||
Add: | |||||||
Income tax expense | 0.27 | 0.20 | 0.26 | 0.33 | |||
Income before income taxes | 1.26 | 0.86 | 2.08 | 1.43 | |||
Add: | |||||||
Acquisition and integration-related expenses, net | 0.01 | 0.01 | 0.03 | 0.02 | |||
Environmental remediation costs of a discontinued operation (a) | — | 0.01 | — | 0.01 | |||
Adjusted income before income taxes | 1.27 | 0.88 | 2.11 | 1.46 | |||
Adjusted income tax expense (b) (c) | (0.32) | (0.21) | (0.52) | (0.33) | |||
Adjusted EPS | $ 0.95 | $ 0.67 | $ 1.59 | $ 1.13 | |||
(a) | Environmental remediation costs of a discontinued operation in the three and six months ended June 30, 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 Condensed Consolidated Statements of Operations. |
(b) | Adjusted income tax expense for the three and six months ended June 30, 2024 was recomputed after excluding discrete tax benefits of |
(c) | Adjusted income tax expense for the three and six months ended June 30, 2023 was recomputed after excluding the impact of acquisition and integration-related expenses, net, and environmental remediation costs of a discontinued operation. |
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, other income/expense, income tax expense/benefit, 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, acquisition and integration-related expenses, other income/expense, income tax expense/benefit, 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 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 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 six months ended June 30, 2024 and 2023:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
($ in millions) | 2024 | 2023 | 2024 | 2023 | |||
Net income | $ 60.8 | $ 40.3 | $ 112.4 | $ 67.7 | |||
Add: | |||||||
Interest expense, net | 3.2 | 5.6 | 6.4 | 10.3 | |||
Acquisition and integration-related expenses, net | 0.8 | 0.6 | 1.7 | 1.3 | |||
Other expense, net | 0.4 | 1.1 | 0.6 | 1.2 | |||
Income tax expense | 16.7 | 12.4 | 16.0 | 19.7 | |||
Depreciation and amortization | 15.8 | 15.5 | 31.2 | 29.8 | |||
Consolidated adjusted EBITDA | $ 97.7 | $ 75.5 | $ 168.3 | $ 130.0 | |||
Net sales | $ 490.4 | $ 442.4 | $ 915.3 | $ 827.9 | |||
Consolidated adjusted EBITDA margin | 19.9 % | 17.1 % | 18.4 % | 15.7 % | |||
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, 2024 and 2023:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
($ in millions) | 2024 | 2023 | 2024 | 2023 | |||
Operating income | $ 72.9 | $ 56.2 | $ 124.6 | $ 93.8 | |||
Add: | |||||||
Acquisition and integration-related expenses | 0.6 | 0.2 | 1.1 | 0.6 | |||
Depreciation and amortization | 14.7 | 14.3 | 29.0 | 27.5 | |||
Adjusted EBITDA | $ 88.2 | $ 70.7 | $ 154.7 | $ 121.9 | |||
Net sales | $ 408.8 | $ 373.0 | $ 762.8 | $ 691.8 | |||
Adjusted EBITDA margin | 21.6 % | 19.0 % | 20.3 % | 17.6 % | |||
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, 2024 and 2023:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
($ in millions) | 2024 | 2023 | 2024 | 2023 | |||
Operating income | $ 18.3 | $ 14.1 | $ 32.1 | $ 26.2 | |||
Add: | |||||||
Depreciation and amortization | 1.0 | 1.1 | 2.0 | 2.2 | |||
Adjusted EBITDA | $ 19.3 | $ 15.2 | $ 34.1 | $ 28.4 | |||
Net sales | $ 81.6 | $ 69.4 | $ 152.5 | $ 136.1 | |||
Adjusted EBITDA margin | 23.7 % | 21.9 % | 22.4 % | 20.9 % | |||
View original content:https://www.prnewswire.com/news-releases/federal-signal-reports-second-quarter-results-including-double-digit-sales-and-earnings-growth-raises-full-year-outlook-302206091.html
SOURCE Federal Signal Corporation
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