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01.11.2016 13:05
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Federal Signal Corporation Reports Increased Third Quarter Sales and Orders
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PR Newswire
OAK BROOK, Ill., Nov. 1, 2016
OAK BROOK, Ill., Nov. 1, 2016 /PRNewswire/ -- Federal Signal Corporation (NYSE:FSS), a leader in environmental and safety solutions, today reported results for the third quarter ended September 30, 2016.
Consolidated net sales for the third quarter were $186.7 million, up $7.0 million, or 4% versus the same quarter a year ago. Third quarter income from continuing operations was $7.5 million, equal to $0.12 per diluted share, compared to $15.8 million, equal to $0.25 per share, in the prior-year quarter.
The Company also reported adjusted net income from continuing operations for the third quarter of $10.5 million, equal to $0.17 per diluted share, compared to $15.8 million, or $0.25 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. All results discussed herein are for continuing operations, and previously reported results have been recast to reflect the Fire Rescue Group as a discontinued operation following the sale of the Bronto Skylift business in January 2016.
Q3 Earnings Exceed Expectations; Sales and Orders Improve with Joe Johnson Equipment ("JJE") Acquisition
"Our third quarter earnings were slightly better than we had been anticipating, benefiting from some earlier than expected deliveries to end customers," commented Jennifer L. Sherman, President and Chief Executive Officer. "Total sales and orders increased in comparison to last year, mostly as a result of the JJE acquisition, which we completed in June of this year. We are pleased with our progress integrating JJE, and the JJE operating results have been running ahead of our expectations."
In the Environmental Solutions Group, sales were up $11.3 million, or 9%, primarily due to $31.0 million of incremental net sales resulting from the JJE acquisition, largely offset by lower shipments of vacuum trucks and street sweepers in the U.S. and reduced international sales of street sweepers and sewer cleaners. Sales in the Safety and Security Systems Group decreased by $4.3 million, or 8%, on reduced sales into global industrial markets, partially offset by improved sales into U.S. public safety markets. Ongoing effects related to oil and gas end markets continue to adversely impact industrial sales in both groups.
Consolidated third quarter operating income was $13.5 million, down from $25.2 million in the prior-year quarter. Operating income in the current-year quarter includes $2.5 million of expense associated with purchase accounting effects resulting from the JJE acquisition, $0.3 million of acquisition-related expenses and $0.4 million of restructuring charges. Operating income in the prior-year period also benefited from the receipt of an order cancellation fee of approximately $1.8 million. Consolidated operating margin, including the aforementioned items, was 7.2%, compared to 14.0% last year. Excluding these items, consolidated operating margin for the quarter was 8.9%, compared to 13.2% last year. The margin decrease was primarily due to changes in mix within the Environmental Solutions Group, with fewer sales into industrial markets and a higher percentage of sales of products manufactured by other companies, which tend to carry a lower margin, as well as purchase accounting effects and negative operating leverage. Corporate expenses for the quarter of $5.5 million were about the same as a year ago.
The effective income tax rate for the quarter was higher than usual, at 43.2%, largely due to recording additional valuation allowance against deferred tax assets in Canada, where the Company experienced historical losses. The current-quarter losses in Canada primarily relate to transitory purchase accounting impacts related to the acquisition of JJE. The Company is continuing to evaluate the impact of current-year acquisitions on the need to maintain the valuation allowance. The cash tax rate for the year is expected to be approximately 15-20%.
Consolidated orders were $186.1 million for the quarter, up 11% compared to last year and at about the same level as the second quarter of 2016. Consolidated backlog of $148.7 million was relatively unchanged from the end of the second quarter of 2016.
Healthy Financial Position Supports Growth Initiatives and Strong Cash Returns to Shareholders
The Company funded dividends of $4.2 million and share repurchases of $0.7 million during the third quarter, bringing the totals for the year to $12.8 million and $33.8 million, respectively. At September 30, 2016, there was approximately $35 million remaining under our authorized share repurchase programs. The Board of Directors also recently declared a $0.07 per share dividend that will be payable in the fourth quarter.
"Our financial position continues to be very strong, providing us with a platform to pursue additional strategic acquisitions and maintain appropriate levels of investment in our sales efforts and new products to build momentum for future growth," said Sherman. "It has also allowed us to return over $46 million of value to our shareholders so far this year, in the form of dividends and share repurchases."
Net cash of $13.2 million was provided by continuing operating activities in the third quarter of 2016, compared to $29.6 million in the prior-year quarter. At September 30, 2016, consolidated debt was $66 million, compared to $47 million a year ago, with $241 million of availability for borrowings. Cash and cash equivalents at September 30, 2016 were $51 million, compared to $58 million a year ago.
Outlook
"Our municipal markets remain stable, but like many other companies, we are experiencing challenging conditions in our industrial markets," Sherman noted. "We are well-positioned to work through these headwinds and to benefit when our markets strengthen. We have a strong balance sheet and continue to make targeted investments in organic growth, while managing costs to maintain our profitability.
"While our sales and orders have improved, our backlog carries a lower gross margin than in the prior-year, partly due to lower industrial demand and effects of the JJE acquisition. We expect that these unfavorable mix effects and negative operating leverage will linger into the fourth quarter, and the first quarter of next year. With solid performance from our municipal-based businesses, we are narrowing the range for our full-year 2016 adjusted EPS outlook to between $0.65 and $0.70."
CONFERENCE CALL
Federal Signal will host its third quarter conference call on Tuesday, November 1, 2016 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 1-888-600-4864 and entering the pin number 9379086. 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; 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 | | Nine Months Ended | ||||||||||||
| (in millions, except per share data) | 2016 | | 2015 | | 2016 | | 2015 | ||||||||
| Net sales | $ | 186.7 | | | $ | 179.7 | | | $ | 531.8 | | | $ | 581.6 | |
| Cost of sales | 141.4 | | | 125.0 | | | 394.1 | | | 411.3 | | ||||
| Gross profit | 45.3 | | | 54.7 | | | 137.7 | | | 170.3 | | ||||
| Selling, engineering, general and administrative expenses | 31.1 | | | 29.5 | | | 91.0 | | | 91.0 | | ||||
| Acquisition and integration related expenses | 0.3 | | | — | | | 1.2 | | | — | | ||||
| Restructuring | 0.4 | | | — | | | 1.6 | | | 0.4 | | ||||
| Operating income | 13.5 | | | 25.2 | | | 43.9 | | | 78.9 | | ||||
| Interest expense | 0.6 | | | 0.6 | | | 1.4 | | | 1.8 | | ||||
| Debt settlement charges | — | | | — | | | 0.3 | | | — | | ||||
| Other (income) expense, net | (0.3) | | | 0.3 | | | (1.3) | | | 1.5 | | ||||
| Income from continuing operations before income taxes | 13.2 | | | 24.3 | | | 43.5 | | | 75.6 | | ||||
| Income tax expense | (5.7) | | | (8.5) | | | (16.2) | | | (27.2) | | ||||
| Income from continuing operations | 7.5 Werbung Mehr Nachrichten zur Federal Signal Corp Aktie kostenlos abonnieren
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