Federal Signal Reports Record Second Quarter Results Including 15% Net Sales Growth and 20% Operating Income Improvement; Raises Full-Year Outlook and EBITDA Margin Targets
Federal Signal (NYSE:FSS) reported exceptional Q2 2025 results, with net sales reaching $565 million, up 15% year-over-year, and operating income of $97.7 million, a 20% increase. The company achieved GAAP diluted EPS of $1.16 and adjusted EPS of $1.17, up 17% and 23% respectively.
The Environmental Solutions Group demonstrated strong performance with 18% sales growth and a 26% increase in adjusted EBITDA, while the Safety and Security Systems Group delivered 3% top-line growth with an impressive 27% EBITDA margin. In response to these results, Federal Signal has raised its 2025 outlook, projecting net sales of $2.07-2.13 billion and adjusted EPS of $3.92-4.10.
The company also increased its consolidated EBITDA margin target to 16-22% and Environmental Solutions Group's EBITDA margin target to 18-24%, reflecting strong operational performance and strategic execution.
Federal Signal (NYSE:FSS) ha riportato risultati eccezionali per il secondo trimestre del 2025, con vendite nette pari a 565 milioni di dollari, in crescita del 15% rispetto all'anno precedente, e un reddito operativo di 97,7 milioni di dollari, con un aumento del 20%. L'azienda ha realizzato un utile per azione diluito GAAP di 1,16 dollari e un utile per azione rettificato di 1,17 dollari, in crescita rispettivamente del 17% e del 23%.
Il gruppo Environmental Solutions ha mostrato una forte performance con una crescita delle vendite del 18% e un aumento del 26% dell'EBITDA rettificato, mentre il gruppo Safety and Security Systems ha registrato una crescita del fatturato del 3% con un impressionante margine EBITDA del 27%. In risposta a questi risultati, Federal Signal ha rivisto al rialzo le previsioni per il 2025, prevedendo vendite nette tra 2,07 e 2,13 miliardi di dollari e un utile per azione rettificato compreso tra 3,92 e 4,10 dollari.
L'azienda ha inoltre aumentato il target del margine EBITDA consolidato al 16-22% e il target del margine EBITDA del gruppo Environmental Solutions al 18-24%, riflettendo una forte performance operativa e un'esecuzione strategica efficace.
Federal Signal (NYSE:FSS) reportó resultados excepcionales en el segundo trimestre de 2025, con ventas netas que alcanzaron los 565 millones de dólares, un aumento del 15% interanual, y un ingreso operativo de 97,7 millones de dólares, un incremento del 20%. La compañía logró un EPS diluido GAAP de 1,16 dólares y un EPS ajustado de 1,17 dólares, creciendo un 17% y 23% respectivamente.
El grupo Environmental Solutions mostró un sólido desempeño con un crecimiento de ventas del 18% y un aumento del 26% en el EBITDA ajustado, mientras que el grupo Safety and Security Systems registró un crecimiento en ingresos del 3% con un impresionante margen EBITDA del 27%. En respuesta a estos resultados, Federal Signal ha elevado sus perspectivas para 2025, proyectando ventas netas de 2,07 a 2,13 mil millones de dólares y un EPS ajustado de 3,92 a 4,10 dólares.
La compañía también incrementó su objetivo de margen EBITDA consolidado a 16-22% y el objetivo de margen EBITDA del grupo Environmental Solutions a 18-24%, reflejando un fuerte desempeño operativo y una ejecución estratégica efectiva.
Federal Signal (NYSE:FSS)는 2025년 2분기 뛰어난 실적을 보고했으며, 순매출 5억 6,500만 달러로 전년 대비 15% 증가했고, 영업이익은 9,770만 달러로 20% 상승했습니다. 회사는 GAAP 희석 주당순이익(EPS) 1.16달러와 조정 EPS 1.17달러를 기록해 각각 17%, 23% 증가했습니다.
Environmental Solutions 그룹은 매출 18% 성장과 조정 EBITDA 26% 증가를 보였으며, Safety and Security Systems 그룹은 3% 매출 성장과 인상적인 EBITDA 마진 27%을 달성했습니다. 이러한 성과에 힘입어 Federal Signal은 2025년 전망을 상향 조정하여 순매출 20.7억~21.3억 달러, 조정 EPS 3.92~4.10달러를 예상하고 있습니다.
또한 회사는 통합 EBITDA 마진 목표를 16-22%로, Environmental Solutions 그룹의 EBITDA 마진 목표를 18-24%로 상향 조정하여 강력한 운영 성과와 전략적 실행을 반영했습니다.
Federal Signal (NYSE:FSS) a annoncé des résultats exceptionnels pour le deuxième trimestre 2025, avec des ventes nettes atteignant 565 millions de dollars, en hausse de 15 % d'une année sur l'autre, et un résultat opérationnel de 97,7 millions de dollars, soit une augmentation de 20 %. La société a réalisé un BPA dilué GAAP de 1,16 $ et un BPA ajusté de 1,17 $, en hausse de 17 % et 23 % respectivement.
Le groupe Environmental Solutions a affiché une solide performance avec une croissance des ventes de 18 % et une augmentation de 26 % de l'EBITDA ajusté, tandis que le groupe Safety and Security Systems a enregistré une croissance du chiffre d'affaires de 3 % avec une impressionnante marge EBITDA de 27 %. En réponse à ces résultats, Federal Signal a relevé ses prévisions pour 2025, prévoyant des ventes nettes comprises entre 2,07 et 2,13 milliards de dollars et un BPA ajusté entre 3,92 et 4,10 $.
La société a également augmenté son objectif de marge EBITDA consolidée à 16-22% et l'objectif de marge EBITDA du groupe Environmental Solutions à 18-24%, reflétant une forte performance opérationnelle et une exécution stratégique efficace.
Federal Signal (NYSE:FSS) meldete herausragende Ergebnisse für das zweite Quartal 2025, mit Nettoverkäufen von 565 Millionen US-Dollar, ein Anstieg von 15 % im Jahresvergleich, und einem Betriebsergebnis von 97,7 Millionen US-Dollar, was einer Steigerung von 20 % entspricht. Das Unternehmen erzielte ein GAAP verwässertes Ergebnis je Aktie (EPS) von 1,16 US-Dollar und ein bereinigtes EPS von 1,17 US-Dollar, was einem Anstieg von 17 % bzw. 23 % entspricht.
Die Environmental Solutions Group zeigte eine starke Leistung mit 18 % Umsatzwachstum und einer 26 % Steigerung des bereinigten EBITDA, während die Safety and Security Systems Group ein Umsatzwachstum von 3 % mit einer beeindruckenden EBITDA-Marge von 27 % erzielte. Als Reaktion auf diese Ergebnisse hat Federal Signal seine Prognose für 2025 nach oben korrigiert und erwartet nun einen Nettoumsatz von 2,07 bis 2,13 Milliarden US-Dollar sowie ein bereinigtes EPS von 3,92 bis 4,10 US-Dollar.
Das Unternehmen erhöhte außerdem sein Ziel für die konsolidierte EBITDA-Marge auf 16-22% und das Ziel für die EBITDA-Marge der Environmental Solutions Group auf 18-24%, was die starke operative Leistung und strategische Umsetzung widerspiegelt.
- Net sales increased 15% to $565 million with 9% organic growth
- Operating income grew 20% to $97.7 million
- Operating cash flow up 47% to $60 million
- Environmental Solutions Group achieved 18% sales growth and 26% EBITDA increase
- Adjusted EBITDA margin expanded to 20.9% from 19.9%
- Strong order intake with 14% growth to $540 million
- Raised full-year guidance for both revenue and EPS
- Increased EBITDA margin targets for both consolidated operations and Environmental Solutions Group
- Consolidated backlog showed minimal growth of $4 million year-over-year
- Consolidated debt stood at $269 million as of June 30, 2025
Insights
FSS reported exceptional Q2 results with strong growth across all metrics, indicating robust operational execution and positive market momentum.
Federal Signal delivered an impressive Q2 performance with
Profitability metrics showed even stronger improvement, with operating income reaching
Both business segments contributed positively. The Environmental Solutions Group (ESG) was the standout performer with
Cash flow generation was particularly strong at
Forward indicators remain promising, with orders increasing
Second Quarter Highlights
- Net sales of
$565 million $74 million 15% , from last year; organic growth of$42 million 9% - Operating income of
$97.7 million $16.6 million 20% , from last year - GAAP diluted EPS of
$1.16 $0.17 17% , from last year - Adjusted EPS of
$1.17 $0.22 23% , from last year - Orders of
$540 million $67 million 14% , from last year - Operating cash flow of
$60 million $19 million 47% , from last year - Raises 2025 net sales outlook to a new range of
$2.07 billion $2.13 billion $2.02 billion $2.10 billion - Raises 2025 adjusted EPS* outlook to a new range of
$3.92 $4.10 $3.63 $3.90 - Raises Consolidated EBITDA margin target to a new range of
16% to22% , from the prior range of14% to20% - Raises EBITDA margin target for the Environmental Solutions Group to a new range of
18% to24% , from the prior range of17% to22%
Consolidated net sales for the second quarter were
The Company also reported adjusted net income for the second quarter of
Double-Digit Year-over-Year Net Sales and Operating Income Growth and Strong Customer Demand in Record-Setting Quarter; Increasing EBITDA Margin Targets for the Environmental Solutions Group and the Company
"In what is typically a seasonally-strong period, our businesses 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 Provides Flexibility to Fund Organic Growth Opportunities, M&A, and Cash Returns to Stockholders
Net cash provided by operating activities during the second quarter was
At June 30, 2025, consolidated debt was
"Our operating cash flow generation in the first half of this year is up
The Company funded dividends of
The Company also repurchased
Outlook
"Demand for our products and aftermarket offerings remains strong, with our order intake this quarter up
CONFERENCE CALL
Federal Signal will host its second quarter conference call on Wednesday, July 30, 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 www.federalsignal.com or by dialing phone number 1-877-704-4453 and entering the pin number 13754916. 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. 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 including tariffs and other trade 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, 2025 and 2024, we made adjustments to exclude the impact of acquisition and integration-related expenses, net, purchase accounting effects, and certain special income tax items, where applicable. In prior years, we have also made adjustments to exclude the impact of environmental remediation costs of a discontinued operation, pension-related charges, and certain other unusual or non-recurring items. Should any similar items occur in the remainder of 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 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
| |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
(in millions, except per share data) | 2025 | 2024 | 2025 | 2024 | |||
Net sales | $ 564.6 | $ 490.4 | $ 915.3 | ||||
Cost of sales | 395.0 | 346.4 | 728.0 | 655.3 | |||
Gross profit | 169.6 | 144.0 | 300.4 | 260.0 | |||
Selling, engineering, general and administrative expenses | 66.9 | 58.3 | 127.1 | 115.5 | |||
Amortization expense | 4.5 | 3.8 | 8.8 | 7.4 | |||
Acquisition and integration-related expenses, net | 0.5 | 0.8 | 1.1 | 1.7 | |||
Operating income | 97.7 | 81.1 | 163.4 | 135.4 | |||
Interest expense, net | 3.5 | 3.2 | 6.5 | 6.4 | |||
Other expense, net | 0.8 | 0.4 | 1.5 | 0.6 | |||
Income before income taxes | 93.4 | 77.5 | 155.4 | 128.4 | |||
Income tax expense | 22.0 | 16.7 | 37.7 | 16.0 | |||
Net income | $ 71.4 | $ 60.8 | $ 117.7 | $ 112.4 | |||
Earnings per share: | |||||||
Basic | $ 1.18 | $ 1.00 | $ 1.93 | $ 1.84 | |||
Diluted | $ 1.16 | $ 0.99 | $ 1.91 | $ 1.82 | |||
Weighted average common shares outstanding: | |||||||
Basic | 60.6 | 61.0 | 60.9 | 61.0 | |||
Diluted | 61.3 | 61.7 | 61.6 | 61.7 | |||
Cash dividends declared per common share | $ 0.14 | $ 0.12 | $ 0.28 | $ 0.24 | |||
Operating data: | |||||||
Operating margin | 17.3 % | 16.5 % | 15.9 % | 14.8 % | |||
Adjusted EBITDA | $ 118.2 | $ 97.7 | $ 203.3 | $ 168.3 | |||
Adjusted EBITDA margin | 20.9 % | 19.9 % | 19.8 % | 18.4 % | |||
Total orders | $ 539.7 | $ 473.0 | $ 975.7 | ||||
Backlog | 1,083.5 | 1,079.9 | 1,083.5 | 1,079.9 | |||
Depreciation and amortization | 19.9 | 15.8 | 38.6 | 31.2 | |||
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 | $ 64.7 | $ 91.1 | |
Accounts receivable, net of allowances for doubtful accounts of | 238.3 | 196.4 | |
Inventories | 356.5 | 331.0 | |
Prepaid expenses and other current assets | 24.6 | 24.0 | |
Total current assets | 684.1 | 642.5 | |
Properties and equipment, net of accumulated depreciation of | 236.8 | 218.9 | |
Rental equipment, net of accumulated depreciation of | 201.0 | 173.2 | |
Operating lease right-of-use assets | 26.4 | 27.8 | |
Goodwill | 517.6 | 477.7 | |
Intangible assets, net of accumulated amortization of | 222.5 | 199.7 | |
Deferred tax assets | 10.7 | 9.4 | |
Other long-term assets | 16.9 | 16.0 | |
Total assets | $ 1,916.0 | $ 1,765.2 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities: | |||
Current portion of long-term borrowings and finance lease obligations | $ 10.7 | $ 19.4 | |
Accounts payable | 102.8 | 79.0 | |
Customer deposits | 39.7 | 35.0 | |
Accrued liabilities: | |||
Compensation and withholding taxes | 39.0 | 45.6 | |
Current operating lease liabilities | 6.9 | 6.8 | |
Other current liabilities | 63.9 | 56.0 | |
Total current liabilities | 263.0 | 241.8 | |
Long-term borrowings and finance lease obligations | 258.3 | 204.4 | |
Long-term operating lease liabilities | 20.3 | 21.8 | |
Long-term pension and other postretirement benefit liabilities | 41.7 | 41.7 | |
Deferred tax liabilities | 58.5 | 58.0 | |
Other long-term liabilities | 12.0 | 11.4 | |
Total liabilities | 653.8 | 579.1 | |
Stockholders' equity: | |||
Common stock, | 70.7 | 70.3 | |
Capital in excess of par value | 319.8 | 309.8 | |
Retained earnings | 1,203.4 | 1,102.8 | |
Treasury stock, at cost, 9.9 and 9.2 shares, respectively | (260.2) | (207.8) | |
Accumulated other comprehensive loss | (71.5) | (89.0) | |
Total stockholders' equity | 1,262.2 | 1,186.1 | |
Total liabilities and stockholders' equity | $ 1,916.0 | $ 1,765.2 | |
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
| |||
Six Months Ended June 30, | |||
(in millions) | 2025 | 2024 | |
Operating activities: | |||
Net income | $ 117.7 | $ 112.4 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 38.6 | 31.2 | |
Stock-based compensation expense | 8.1 | 8.8 | |
Changes in fair value of contingent consideration | — | 0.1 | |
Payments for acquisition-related activity | (0.1) | — | |
Amortization of interest rate swap settlement gain | — | (1.2) | |
Deferred income taxes | 0.2 | 2.3 | |
Changes in operating assets and liabilities | (68.1) | (81.7) | |
Net cash provided by operating activities | 96.4 | 71.9 | |
Investing activities: | |||
Purchases of properties and equipment | (12.9) | (24.2) | |
Payments for acquisition-related activity, net of cash acquired | (82.1) | — | |
Other, net | 0.7 | 1.2 | |
Net cash used for investing activities | (94.3) | (23.0) | |
Financing activities: | |||
Increase (decrease) in revolving lines of credit, net | 55.0 | (39.2) | |
Payments on long-term borrowings | (1.6) | (1.6) | |
Purchases of treasury stock | (39.7) | (0.1) | |
Redemptions of common stock to satisfy withholding taxes related to stock-based compensation | (11.4) | (5.9) | |
Payments for acquisition-related activity | (4.3) | — | |
Cash dividends paid to stockholders | (17.1) | (14.7) | |
Proceeds from stock-based compensation activity | 1.1 | 1.3 | |
Other, net | (11.8) | (0.3) | |
Net cash used for financing activities | (29.8) | (60.5) | |
Effects of foreign exchange rate changes on cash and cash equivalents | 1.3 | (0.8) | |
Decrease in cash and cash equivalents | (26.4) | (12.4) | |
Cash and cash equivalents at beginning of year | 91.1 | 61.0 | |
Cash and cash equivalents at end of period | $ 64.7 | $ 48.6 | |
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES | |||||||||||
The following tables summarize group operating results as of and for the three and six months ended June 30, 2025 and 2024:
| |||||||||||
Environmental Solutions Group | |||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
($ in millions) | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||
Net sales | $ 480.5 | $ 408.8 | $ 71.7 | $ 867.9 | $ 762.8 | $ 105.1 | |||||
Operating income | 91.9 | 72.9 | 19.0 | 151.6 | 124.6 | 27.0 | |||||
Adjusted EBITDA | 110.8 | 88.2 | 22.6 | 188.3 | 154.7 | 33.6 | |||||
Operating data: | |||||||||||
Operating margin | 19.1 % | 17.8 % | 1.3 % | 17.5 % | 16.3 % | 1.2 % | |||||
Adjusted EBITDA margin | 23.1 % | 21.6 % | 1.5 % | 21.7 % | 20.3 % | 1.4 % | |||||
Total orders | $ 441.1 | $ 396.2 | $ 44.9 | $ 921.2 | $ 823.9 | $ 97.3 | |||||
Backlog | 1,000.3 | 1,023.4 | (23.1) | 1,000.3 | 1,023.4 | (23.1) | |||||
Depreciation and amortization | 18.7 | 14.7 | 4.0 | 36.3 | 29.0 | 7.3 | |||||
Safety and Security Systems Group
| |||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
($ in millions) | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||
Net sales | $ 84.1 | $ 81.6 | $ 2.5 | $ 160.5 | $ 152.5 | $ 8.0 | |||||
Operating income | 21.5 | 18.3 | 3.2 | 37.3 | 32.1 | 5.2 | |||||
Adjusted EBITDA | 22.6 | 19.3 | 3.3 | 39.4 | 34.1 | 5.3 | |||||
Operating data: | |||||||||||
Operating margin | 25.6 % | 22.4 % | 3.2 % | 23.2 % | 21.0 % | 2.2 % | |||||
Adjusted EBITDA margin | 26.9 % | 23.7 % | 3.2 % | 24.5 % | 22.4 % | 2.1 % | |||||
Total orders | $ 98.6 | $ 76.8 | $ 21.8 | $ 186.4 | $ 151.8 | $ 34.6 | |||||
Backlog | 83.2 | 56.5 | 26.7 | 83.2 | 56.5 | 26.7 | |||||
Depreciation and amortization | 1.1 | 1.0 | 0.1 | 2.1 | 2.0 | 0.1 | |||||
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 2025 and 2024 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 six months ended June 30, 2025 and 2024 adjustments were made to reported GAAP net income and diluted EPS to exclude the impact of acquisition and integration-related expenses, net, purchase accounting effects, and certain special income tax items, where applicable.
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
(in millions) | 2025 | 2024 | 2025 | 2024 | |||
Net income, as reported | $ 71.4 | $ 60.8 | $ 117.7 | $ 112.4 | |||
Add: | |||||||
Income tax expense | 22.0 | 16.7 | 37.7 | 16.0 | |||
Income before income taxes | 93.4 | 77.5 | 155.4 | 128.4 | |||
Add: | |||||||
Acquisition and integration-related expenses, net | 0.5 | 0.8 | 1.1 | 1.7 | |||
Purchase accounting effects (a) | 0.4 | — | 0.7 | — | |||
Adjusted income before income taxes | 94.3 | 78.3 | 157.2 | 130.1 | |||
Adjusted income tax expense (b) (c) | (22.4) | (19.5) | (38.3) | (31.8) | |||
Adjusted net income | $ 71.9 | $ 58.8 | $ 118.9 | $ 98.3 | |||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
(dollars per diluted share) | 2025 | 2024 | 2025 | 2024 | |||
EPS, as reported | $ 1.16 | $ 0.99 | $ 1.91 | $ 1.82 | |||
Add: | |||||||
Income tax expense | 0.36 | 0.27 | 0.61 | 0.26 | |||
Income before income taxes | 1.52 | 1.26 | 2.52 | 2.08 | |||
Add: | |||||||
Acquisition and integration-related expenses, net | 0.01 | 0.01 | 0.02 | 0.03 | |||
Purchase accounting effects (a) | 0.01 | — | 0.01 | — | |||
Adjusted income before income taxes | 1.54 | 1.27 | 2.55 | 2.11 | |||
Adjusted income tax expense (b) (c) | (0.37) | (0.32) | (0.62) | (0.52) | |||
Adjusted EPS | $ 1.17 | $ 0.95 | $ 1.93 | $ 1.59 | |||
(a) | Purchase accounting effects in the three and six months ended June 30, 2025 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 Condensed Consolidated Statements of Operations. |
(b) | Adjusted income tax expense for the three and six months ended June 30, 2025 was recomputed after excluding the tax impacts of acquisition and integration-related expenses, net, and purchase accounting effects. Adjusted income tax expense for the three and six months ended June 30, 2025 also excludes a |
(c) | Adjusted income tax expense for the three and six months ended June 30, 2024 was recomputed after excluding the tax impacts of acquisition and integration-related expenses, net. Adjusted income tax expense for the three and six months ended June 30, 2024 also excludes discrete tax benefits of |
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, acquisition and integration-related expenses, 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, acquisition and integration-related expenses, 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 six months ended June 30, 2025 and 2024:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
($ in millions) | 2025 | 2024 | 2025 | 2024 | |||
Net income | $ 71.4 | $ 60.8 | $ 117.7 | $ 112.4 | |||
Add: | |||||||
Interest expense, net | 3.5 | 3.2 | 6.5 | 6.4 | |||
Acquisition and integration-related expenses, net | 0.5 | 0.8 | 1.1 | 1.7 | |||
Purchase accounting effects * | 0.1 | — | 0.2 | — | |||
Other expense, net | 0.8 | 0.4 | 1.5 | 0.6 | |||
Income tax expense | 22.0 | 16.7 | 37.7 | 16.0 | |||
Depreciation and amortization | 19.9 | 15.8 | 38.6 | 31.2 | |||
Consolidated adjusted EBITDA | $ 118.2 | $ 97.7 | $ 203.3 | $ 168.3 | |||
Net sales | $ 564.6 | $ 490.4 | $ 915.3 | ||||
Consolidated adjusted EBITDA margin | 20.9 % | 19.9 % | 19.8 % | 18.4 % | |||
* 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 six months ended June 30, 2025 and 2024:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
($ in millions) | 2025 | 2024 | 2025 | 2024 | |||
Operating income | $ 91.9 | $ 72.9 | $ 151.6 | $ 124.6 | |||
Add: | |||||||
Acquisition and integration-related expenses, net | 0.1 | 0.6 | 0.2 | 1.1 | |||
Purchase accounting effects * | 0.1 | — | 0.2 | — | |||
Depreciation and amortization | 18.7 | 14.7 | 36.3 | 29.0 | |||
Adjusted EBITDA | $ 110.8 | $ 88.2 | $ 188.3 | $ 154.7 | |||
Net sales | $ 480.5 | $ 408.8 | $ 867.9 | $ 762.8 | |||
Adjusted EBITDA margin | 23.1 % | 21.6 % | 21.7 % | 20.3 % | |||
* 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 six months ended June 30, 2025 and 2024:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
($ in millions) | 2025 | 2024 | 2025 | 2024 | |||
Operating income | $ 21.5 | $ 18.3 | $ 37.3 | $ 32.1 | |||
Add: | |||||||
Depreciation and amortization | 1.1 | 1.0 | 2.1 | 2.0 | |||
Adjusted EBITDA | $ 22.6 | $ 19.3 | $ 39.4 | $ 34.1 | |||
Net sales | $ 84.1 | $ 81.6 | $ 160.5 | $ 152.5 | |||
Adjusted EBITDA margin | 26.9 % | 23.7 % | 24.5 % | 22.4 % | |||
View original content:SOURCE Federal Signal Corporation
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