Federal Signal Reports 4Q Operating Income Up 65 Percent

Federal Signal Corporation reported results for the fourth quarter and year ended Dec. 31, 2013. Consolidated net sales for the fourth quarter were $219.6 million, up 1% versus the same quarter a year ago. Fourth quarter income from continuing operations was $26.7 million, equal to $0.42 per diluted share, compared to $4.9 million, or $0.08 per share, in the prior year quarter.

Consolidated net sales for the year ended December 31, 2013 were $851.3 million, up 6% compared to the prior year. Income from continuing operations for the year was $160.2 million, equal to $2.53 per diluted share, compared to $22.0 million, or $0.35 per share, in the prior year.

The company also reported adjusted net income from continuing operations for the fourth quarter of $21.9 million, equal to $0.34 per diluted share, up 298% compared to $5.5 million, or $0.09 per diluted share, in the same quarter a year ago. For the full year, adjusted net income from continuing operations was $60.7 million, equal to $0.96 per diluted share, an increase of 126% compared to $26.9 million, or $0.43 per diluted share, in the prior year. The Company is reporting adjusted results to facilitate comparisons of earnings on a year-over-year basis.

“With this strong quarter, we continue to build on our improving results,” said Dennis J. Martin, president and CEO. “Our Environmental Solutions Group drove our top-line growth and more than doubled its operating income from the fourth quarter a year ago. Our Safety and Security Systems Group boosted its operating margin to more than 15% for the first time since the fourth quarter of 2008, in spite of relatively flat sales for the quarter. The Fire Rescue Group had a soft quarter, primarily resulting from delayed deliveries of some units, but it still managed to turn in modest full-year improvement over the prior year. Corporate expenses remained low, as well. All told, our adjusted EPS was a healthy $0.34 and our operating cash flow reached $43.0 million for the quarter.”

Net sales were $219.6 million for the quarter, up 1% compared to the fourth quarter of 2012. Environmental Solutions Group sales were up $14.7 million, or 14%, on improved sales of sewer cleaners, waterblasters and street sweepers. Safety and Security Systems Group sales were down $1.1 million, or 2%, while Fire Rescue Group sales were down $11.7 million, or 26%, compared to the prior year fourth quarter, which included strong sales to the Asian market.

Consolidated fourth quarter operating income was $21.5 million, up 65% compared to the fourth quarter of 2012. Consolidated fourth quarter operating margin improved to 9.8%, compared to 6.0% last year. Operating margin was up for both the Environmental Solutions Group, at 14.6%, and the Safety and Security Systems Group, at 15.1%. The Fire Rescue Group’s operating margin of 4.9% was low, primarily as a result of a higher mix of lower-margin sales. Corporate expenses were $7.7 million for the quarter, compared to $8.9 million a year

The company reported orders of $237.8 million, up 14% compared to the year-ago quarter. For the year ended Dec. 31, 2013, total orders of $836.8 million increased by 1% compared to the prior year.