Federal Signal Corporation

Thank you for standing by. This is the conference operator. Welcome to the Federal Signal Corporation fourth quarter earnings conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Ian Hudson, Chief Financial Officer. Please go ahead.

Good morning, and welcome to Federal Signal's fourth quarter 2021 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 will refer to some presentation slides today, as well as to the earnings 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 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 10-K later today. Jennifer is going to start today with a recap of the year, and then I will provide some more detail on our fourth quarter and full year financial results. Jennifer will then provide her perspective on our performance and go over our outlook for 2022 before we 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 business partners for their ongoing commitment. I am immensely proud of how our teams have managed through another turbulent year, finding creative solutions when faced with widespread supply chain disruption and demonstrating tremendous resilience given the prolonged nature of the pandemic including the impact of the resurgence of cases linked to the Omicron variant. Our strong performance is a testament to the efforts of our teams and the successful diversification of our revenue streams and end market exposures that has taken place over the last several years through our combination of organic growth initiatives and disciplined M&A. Despite the ongoing challenges in the marketplace, our teams remained relentlessly focused on serving our customers, helping us to deliver the second highest adjusted EPS in the company's history, report record orders, and maintain an EBITDA margin of approximately 15% towards the high end of our target range. In addition to our strong financial performance, we also made good progress against several of our long-term objectives in 2021. We continue to invest in internal growth initiatives by making strategic investments for the future by purchasing new machinery and equipment aimed at gaining operating efficiencies and expanding capacity at several of our production facilities. We also recently completed the acquisition of two of our largest manufacturing plants, our Elgin Sweeper facility in Illinois, as well as our facility in University Park, Illinois, which is home to our domestic SSG operations. Both of these facilities were previously leased, and with the leases expiring towards the middle of next year, we are pleased to have secured the future of these operations, allowing us to better optimize the facility over the long run and leverage our 80-20 principles. We continue to invest in new product development with a particular emphasis on electrification projects and are encouraged that these efforts will provide additional opportunities to further diversify our customer base, penetrate new end markets or gain access to new geographic regions. We completed three acquisitions in 2021 with the additions of OSW, Ground Force and DICE, providing us with opportunities to expand our geographic footprint and augment our specialty vehicle product offerings. The integration of these businesses is going well and we see meaningful opportunities for synergies and potential for additional investments to further strengthen and broaden our position in these attractive niche markets. We demonstrated our commitment to returning value to our stockholders, funding a combined $37 million of cash dividends and share purchases. Our 80-20 improvement initiatives remain a critical part of our culture, and we continue to focus on reducing product costs and improving manufacturing efficiencies across all of our businesses. To highlight our ongoing focus on operating as a socially responsible and sustainable manner, we also published our second annual sustainability report in the fourth quarter. I'm incredibly proud of the progress that we've made on our environmental, social, and governance initiatives and thrilled to share our many accomplishments highlighted in this report. I'll now turn the call back to Ian to go over the numbers.