Federal Signal Corp. (NYSE:FSS) Q1 2018 Earnings Conference Call - Preliminary Transcript

May 08, 2018 • 10:00 am ET

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Federal Signal Corp. (NYSE:FSS) Q1 2018 Earnings Conference Call - Preliminary Transcript

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Presentation
Operator
Operator

Good day, everyone, and welcome to the Federal Signal Corporation First Quarter Earnings Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Ian Hudson, Chief Financial Officer. Please go ahead, sir.

Executive
Ian A. Hudson

Good morning, and welcome to Federal Signal's First Quarter 2018 Conference Call. I am Ian Hudson, the company's Chief Financial Officer. Also with me on the call today, is Jennifer Sherman, our President and Chief Executive Officer.

We will refer to some presentation slides today as well as to the earnings news release, which we issued this morning. The slides can be followed online by going to our website, federalsignal.com, clicking on the Investor Call icon and signing into the webcast. We have also posted the slide presentation and the earnings release under the Investor tab on our website.

Before we begin, I'd like to remind you that some of our comments made today may contain forward-looking statements that are subject to the safe harbor language found in today's news release and in Federal Signal's filings with the Securities and Exchange Commission. These documents are available on our website. Our presentation also contains some measures that are not in accordance with U.S. Generally Accepted Accounting Principles. In our earnings release and filings, we reconcile these non-GAAP measures to GAAP measures. In addition, we will file our Form 10-Q later today. I'm going to begin by providing some detail on our first quarter results before turning the call over to Jennifer to provide her perspective on our performance, market conditions and our outlook for the remainder of 2018. After our prepared comments, Jennifer and I will address your questions.

Our consolidated first quarter financial results are provided in today's earnings release. As a reminder, the first quarter this year includes the operating results of Truck Bodies and Equipment International or TBEI, which we acquired last year. The results of TBEI have been included within our Environmental Solutions Group for the quarter. Our first quarter results reflect impressive increases in sales and orders, driven by both organic growth and contributions from TBEI. We delivered significant margin expansion with our adjusted EBITDA margin up 110 basis points year-over-year, strong cash flow generation and robust earnings per share growth.

Consolidated net sales for the quarter were $249.7 million, up $72 million or 40% compared to last year with approximately $21 million or 12% coming from organic growth. Consolidated operating income for the quarter was $19.6 million, up $8.2 million or 72%. On an adjusted basis, consolidated operating margin for the quarter was 8.5%, up from 7.5% in Q1 last year. Consolidated adjusted EBITDA for the quarter was $29.5 million, up $10.5 million or 55%, which translates to a margin of 11.8% for the quarter, up from 10.7% last year.

Income from continued operations was a $12.9 million in Q1 this year, compared to $7.2 million last year. That equates the GAAP EPS of $0.21 per share, up from $0.12 per share last year. On an