Federal Signal Corporation

Greetings and welcome to the Federal Signal Corporation's second quarter earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ian Hudson, Chief Financial Officer, Thank you.

You may begin. Good morning, and welcome to Federal Signals' second quarter of 2020 conference call. I'm 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'll 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, federalsignals.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 I turn the call over to Jennifer, 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 Signals 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 10Q later today. Jennifer is going to kick things off today with some introductory comments. I will then give some more details on our second quarter financial results before turning the call back to Jennifer to give a business update and provide thoughts on our outlook for the rest of the year. After that, we will open the line for any questions. With that, I would now like to turn the call over to Jennifer.

Thank you, Ian. I'd like to start by giving my profound thanks to each of our employees and our dealer partners for their commitment over the past several months. Since the outbreak of the pandemic, a critical area of focus has been on their health and safety, and we have implemented a host of new measures to ensure a safe work environment for our employees. These steps have included adjusting our production processes at our facilities to comply with safe distancing guidelines in order to protect the safety of our employees. We have also invested in temperature screening capabilities at many of our facilities, issued a face mask policy, and provided our employees with additional paid time off. These are clearly challenging times on many different levels. but I could not be prouder of our performance during the second quarter with our teams demonstrating impressive operational execution in exceptionally difficult circumstances while at the same time continuing to provide a safe working environment for our employees. Each of our businesses is considered essential in supporting critical infrastructure needs and public safety. That meant that all of our manufacturing facilities remained operational throughout the quarter albeit with certain of our operations temporarily affected by facility closures, either due to government-issued mandates or other coronavirus-related issues. At the beginning of the quarter, we acted quickly and decisively in response to a variety of operational challenges resulting from the pandemic by adjusting our operating costs and modifying our production schedule. As our teams develop strategies to operate in the new COVID environment, we experienced double-digit sequential improvement in average weekly sales in both May and June. The combination of these factors helps us to maintain a high level of performance and deliver an adjusted EBITDA margin of 16.8% in the quarter, exceeding the upper end of our target range. The strong results that we were able to deliver in exceptionally difficult circumstances during the quarter were a testament to the quality of our businesses, our experienced leadership team, the commitment of our employees, and the agility of our team. While managing through this difficult quarter, we also continue to focus on our long-term growth initiatives. For example, on the organic side, we introduced a new regenerative air sweeper that does not require the operator to have a commercial driver's license. We also made progress on our plant expansion at Baxter, Rugby, and MRL, which will initially provide additional space for social distancing and additional capacity to support our longer-term growth. On the M&A front, we completed the acquisition of PWE. In addition, I'm also pleased to report that the company will be issuing our inaugural long-form sustainability report later in the third quarter. I'll now turn the call back to Ian to go over the numbers.