FEDERAL SIGNAL CORP DE

Previous wording

Operating income for the three months ended June 30, 2024 increased by $21.7 million, or 37%, compared to the prior-year quarter, primarily driven by a $26.7 million improvement in gross profit and a $0.1 million reduction in amortization expense, partially offset by a $4.9 million increase in Selling, Engineering, General and Administrative (“SEG&A”) expenses and a $0.2 million increase in acquisition and integration-related expenses. Consolidated operating margin for the three months ended June 30, 2024 was 16.5%, compared to 13.4% in the prior-year quarter.

Current wording

Operating income for the three months ended September 30, 2024 increased by $13.4 million, or 21%, compared to the prior-year quarter, primarily driven by a $22.7 million improvement in gross profit, a $0.1 million decrease in acquisition and integration-related expenses, and a $0.1 million reduction in amortization expense, partially offset by a $9.5 million increase in Selling, Engineering, General and Administrative (“SEG&A”) expenses. Consolidated operating margin for the three months ended September 30, 2024 was 16.0%, compared to 14.0% in the prior-year quarter.

Previous wording

Income before income taxes for the three months ended June 30, 2024 increased by $24.8 million, or 47%, compared to the prior-year quarter. The increase resulted from the higher operating income, a $2.4 million reduction in interest expense, and a $0.7 million decrease in other expense.

Current wording

Income before income taxes for the three months ended September 30, 2024 increased by $15.5 million, or 27%, compared to the prior-year quarter. The increase resulted from the higher operating income and a $2.1 million reduction in interest expense.

Previous wording

Income before income taxes for the six months ended June 30, 2024 increased by $41.0 million, or 47%, compared to the prior-year period. The increase resulted from the higher operating income, a $3.9 million reduction in interest expense, and a $0.6 million decrease in other expense.

Current wording

Income before income taxes for the nine months ended September 30, 2024 increased by $56.5 million, or 39%, compared to the prior-year period. The increase resulted from the higher operating income, a $6.0 million reduction in interest expense, and a $0.6 million decrease in other expense.

Previous wording

Net income for the three months ended June 30, 2024 increased by $20.5 million compared to the prior-year quarter, largely due to the aforementioned increase in income before taxes, partially offset by a $4.3 million increase in income tax expense. The effective tax rate for the three months ended June 30, 2024 was 21.5%, compared to 23.5% in the prior-year quarter.

Current wording

Net income for the three months ended September 30, 2024 increased by $10.6 million compared to the prior-year quarter, largely due to the aforementioned increase in income before taxes, partially offset by a $4.9 million increase in income tax expense. The effective tax rate for the three months ended September 30, 2024 was 25.8%, compared to 24.2% in the prior-year quarter.

Previous wording

Net income for the six months ended June 30, 2024 increased by $44.7 million compared to the prior-year period, largely due to the aforementioned increase in income before taxes and a $3.7 million reduction in income tax expense. The effective tax rate for the six months ended June 30, 2024 was 12.5%, compared to 22.5% in the prior-year period. We currently expect our full-year effective tax rate to be approximately 19%, excluding additional discrete items.

Current wording

Net income for the nine months ended September 30, 2024 increased by $55.3 million compared to the prior-year period, largely due to the aforementioned increase in income before taxes, partially offset by a $1.2 million increase in income tax expense. The effective tax rate for the nine months ended September 30, 2024 was 17.3%, compared to 23.2% in the prior-year period.

Previous wording

Total orders for the three months ended June 30, 2024 were $473 million, a decrease of $7 million, or 1%, as compared to the prior-year quarter. Our Environmental Solutions Group reported total orders of $396 million in the three months ended June 30, 2024, a reduction of $12 million, or 3%, in comparison to the prior-year quarter. Orders in the three months ended June 30, 2024 within our Safety and Security Systems Group were $77 million, an increase of $5 million, or 7%, compared to the prior-year quarter.

Current wording

Total orders for the three months ended September 30, 2024 were $426 million, a reduction of $24 million, or 5%, as compared to the prior-year quarter. Our Environmental Solutions Group reported total orders of $353 million in the three months ended September 30, 2024, a reduction of $22 million, or 6%, in comparison to the prior-year quarter. Orders in the three months ended September 30, 2024 within our Safety and Security Systems Group were $73 million, a decrease of $2 million, or 3%, compared to the prior-year quarter.

Previous wording

Total orders for the six months ended June 30, 2024 were $976 million, an increase of $21 million, or 2%, as compared to the prior-year period. Our Environmental Solutions Group reported total orders of $824 million in the six months ended June 30, 2024, an increase of $20 million, or 2% in comparison to the prior-year period. Orders in the six months ended June 30, 2024 within our Safety and Security Systems Group were $152 million, an increase of $1 million, or 1%, compared to the prior-year period.

Current wording

Total orders for the nine months ended September 30, 2024 were $1.40 billion, a $4 million reduction compared to the prior-year period. Our Environmental Solutions Group reported total orders of $1.18 billion in the nine months ended September 30, 2024, a reduction of $3 million compared to the prior-year period. Orders in the nine months ended September 30, 2024 within our Safety and Security Systems Group were $225 million, a decrease of $1 million compared to the prior-year period.

Previous wording

Our consolidated backlog at June 30, 2024 was $1.08 billion, an increase of $73 million, or 7%, compared to the prior-year quarter.

Current wording

Our consolidated backlog at September 30, 2024 was $1.03 billion, an increase of $27 million, or 3%, compared to the prior-year quarter.

Previous wording

The following table summarizes our Condensed Consolidated Statements of Operations and illustrates the key financial indicators used to assess our consolidated financial results:

Current wording

The following table summarizes our Condensed Consolidated Statements of Operations and illustrates key financial indicators used to assess our consolidated financial results:

Previous wording

Cost of sales increased by $21.3 million, or 7%, for the three months ended June 30, 2024 compared to the prior-year quarter, largely due to an increase of $15.4 million, or 5%, within the Environmental Solutions Group, primarily related to higher sales volumes. Within the Safety and Security Systems Group, cost of sales increased by $5.9 million, or 14%, primarily related to higher sales volumes.

Current wording

Cost of sales increased by $5.1 million, or 2%, for the three months ended September 30, 2024 compared to the prior-year quarter, largely due to an increase of $7.5 million, or 3%, within the Environmental Solutions Group, primarily related to higher sales volumes and increased material costs. Within the Safety and Security Systems Group, cost of sales decreased by $2.4 million, or 5%, primarily related to favorable product mix and lower material costs, partially offset by higher sales volumes.

Previous wording

Cost of sales increased by $40.5 million, or 7%, for the six months ended June 30, 2024 compared to the prior-year period, largely due to an increase of $34.1 million, or 6%, within the Environmental Solutions Group, primarily related to higher sales volumes, inclusive of the effects of acquisitions, and increased material costs. Within the Safety and Security Systems Group, cost of sales increased by $6.4 million, or 8%, primarily related to higher sales volumes.

Current wording

Cost of sales increased by $45.6 million, or 5%, for the nine months ended September 30, 2024 compared to the prior-year period, largely due to an increase of $41.6 million, or 5%, within the Environmental Solutions Group, primarily related to higher sales volumes, inclusive of the effects of acquisitions, and increased material costs. Within the Safety and Security Systems Group, cost of sales increased by $4.0 million, or 3%, primarily related to higher sales volumes, partially offset by favorable product mix and lower material costs.

Previous wording

Gross profit increased by $26.7 million, or 23%, for the three months ended June 30, 2024 compared to the prior-year quarter, primarily due to a $20.4 million improvement within the Environmental Solutions Group and a $6.3 million increase within the Safety and Security Systems Group. Gross profit as a percentage of revenues (“gross profit margin”) for the three months ended June 30, 2024 was 29.4%, compared to 26.5% in the prior-year quarter, primarily due to improvements within the Environmental Solutions Group and the Safety and Security Systems Group of 290 basis points and 170 basis points, respectively.

Current wording

Gross profit increased by $22.7 million, or 19%, for the three months ended September 30, 2024 compared to the prior-year quarter, primarily due to a $17.7 million improvement within the Environmental Solutions Group and a $5.0 million increase within the Safety and Security Systems Group. Gross profit as a percentage of revenues (“gross profit margin”) for the three months ended September 30, 2024 was 29.6%, compared to 26.4% in the prior-year quarter, primarily due to improvements within the Environmental Solutions Group and the Safety and Security Systems Group of 290 basis points and 530 basis points, respectively.

Previous wording

Gross profit increased by $46.9 million, or 22%, for the six months ended June 30, 2024 compared to the prior-year period, primarily due to a $36.9 million improvement within the Environmental Solutions Group and a $10.0 million increase within the Safety and Security Systems Group. Gross profit margin for the six months ended June 30, 2024 was 28.4%, compared to 25.7% in the prior-year period, primarily due to improvements within the Environmental Solutions Group and the Safety and Security Systems Group of 270 basis points and 230 basis points, respectively.

Current wording

Gross profit increased by $69.6 million, or 21%, for the nine months ended September 30, 2024 compared to the prior-year period, primarily due to a $54.6 million improvement within the Environmental Solutions Group and a $15.0 million increase within the Safety and Security Systems Group. Gross profit margin for the nine months ended September 30, 2024 was 28.8%, compared to 26.0% in the prior-year period, primarily due to improvements within the Environmental Solutions Group and the Safety and Security Systems Group of 280 basis points and 330 basis points, respectively.

Previous wording

SEG&A expenses for the three months ended June 30, 2024 increased by $4.9 million, or 9%, compared to the prior-year quarter, primarily due to increases of $3.4 million and $2.1 million within the Environmental Solutions Group and the Safety and Security Systems Group, respectively, partially offset by a $0.6 million reduction in Corporate SEG&A expenses. As a percentage of net sales, SEG&A expenses were 11.9% in the current-year quarter, down from 12.1% in the prior-year quarter.

Current wording

SEG&A expenses for the three months ended September 30, 2024 increased by $9.5 million, or 19%, compared to the prior-year quarter, primarily due to increases of $3.7 million and $1.9 million within the Environmental Solutions Group and the Safety and Security Systems Group, respectively, in addition to a $3.9 million increase in Corporate SEG&A expenses. As a percentage of net sales, SEG&A expenses were 12.7% in the current-year quarter, compared to 11.3% in the prior-year quarter.

Previous wording

SEG&A expenses for the six months ended June 30, 2024 increased by $10.1 million, or 10%, compared to the prior-year period, primarily due to increases of $5.7 million and $4.1 million within the Environmental Solutions Group and the Safety and Security Systems Group, respectively, in addition to a $0.3 million increase in Corporate SEG&A expenses. As a percentage of net sales, SEG&A expenses were 12.6% in the current-year period, down from 12.7% in the prior-year period.

Current wording

SEG&A expenses for the nine months ended September 30, 2024 increased by $19.6 million, or 13%, compared to the prior-year period, primarily due to increases of $9.4 million and $6.0 million within the Environmental Solutions Group and the Safety and Security Systems Group, respectively, in addition to a $4.2 million increase in Corporate SEG&A expenses. As a percentage of net sales, SEG&A expenses were 12.6% in the current-year period, compared to 12.2% in the prior-year period.

Previous wording

Interest expense, net, for the three and six months ended June 30, 2024 decreased by $2.4 million and $3.9 million, respectively, compared to the corresponding periods of the prior year, largely due to reductions in average debt levels.

Current wording

Interest expense, net, for the three and nine months ended September 30, 2024 decreased by $2.1 million and $6.0 million, respectively, compared to the corresponding periods of the prior year, largely due to reductions in average debt levels.

Previous wording

Other expense, net, for the six months ended June 30, 2024 decreased by $0.6 million, compared to the prior-year period, primarily due to the non-recurrence of an $0.8 million environmental remediation charge recorded in the prior-year period associated with a business discontinued in 2009, partially offset by higher net periodic pension expense.

Current wording

Other expense, net, for the nine months ended September 30, 2024 decreased by $0.6 million, compared to the prior-year period, primarily due to the non-recurrence of an $0.8 million environmental remediation charge recorded in the prior-year period associated with a business discontinued in 2009 and lower foreign currency transaction losses, partially offset by a $0.5 million increase in net periodic pension expense.

Previous wording

During the first quarter of 2024, the tax authorities notified the Company that the amended tax returns had been approved, at which point receipt of the refund claim was considered more-likely-than-not. As a result, the Company released the associated liability for unrecognized tax benefits and recognized a $13.0 million discrete tax benefit for the U.S. federal refund claim, net of taxes on the associated interest. During the second quarter of 2024, the Company received the U.S. federal income tax refund and began amending applicable state tax returns to reflect the worthless stock deduction, resulting in the recognition of a $2.6 million discrete state tax benefit during the three months ended June 30, 2024.

Current wording

During the first quarter of 2024, the tax authorities notified the Company that the amended tax returns had been approved, at which point receipt of the refund claim was considered more-likely-than-not. As a result, the Company released the associated liability for unrecognized tax benefits and recognized a $13.0 million discrete tax benefit for the U.S. federal refund claim, net of taxes on the associated interest. During the second quarter of 2024, the Company received the U.S. federal income tax refund and began amending applicable state tax returns to reflect the worthless stock deduction, resulting in the recognition of a $2.6 million discrete state tax benefit.

Previous wording

Including the discrete tax benefits associated with the worthless stock deduction, which aggregated to $15.6 million, and the recognition of $1.5 million in excess tax benefits associated with stock-based compensation activity, the Company recognized income tax expense of $16.0 million for the six months ended June 30, 2024, resulting in an effective tax rate of 12.5%. For the six months ended June 30, 2023, the Company recognized income tax expense of $19.7 million, resulting in an effective tax rate of 22.5%. The Company’s income tax expense and effective tax rate for the six months ended June 30, 2023 also included the effects of the recognition of $1.6 million in excess tax benefits associated with stock-based compensation activity.

Current wording

Including the discrete tax benefits associated with the worthless stock deduction, which aggregated to $15.6 million, and the recognition of $1.7 million in excess tax benefits associated with stock-based compensation activity, the Company recognized income tax expense of $34.7 million for the nine months ended September 30, 2024, resulting in an effective tax rate of 17.3%. For the nine months ended September 30, 2023, the Company recognized income tax expense of $33.5 million, resulting in an effective tax rate of 23.2%. The Company’s income tax expense and effective tax rate for the nine months ended September 30, 2023 also included the effects of the recognition of $1.9 million in excess tax benefits associated with stock-based compensation activity and a $0.6 million benefit associated with changes in tax reserves.

Previous wording

The following table summarizes the Environmental Solutions Group’s operating results as of and for the three and six months ended June 30, 2024 and 2023:

Current wording

The following table summarizes the Environmental Solutions Group’s operating results as of and for the three and nine months ended September 30, 2024 and 2023:

Previous wording

Total orders for the six months ended June 30, 2024 increased by $19.5 million, or 2%, compared to the prior-year period. U.S. orders decreased by $33.2 million, primarily due to reductions in orders for street sweepers, safe-digging trucks, trailers and multi-purpose maintenance vehicles of $44.7 million, $28.1 million, $10.5 million and $4.4 million, respectively. Partially offsetting these reductions were improvements in orders for dump truck bodies, refuse trucks, aftermarket offerings, sewer cleaners, hoists and waterblasting equipment of $36.3 million, $6.5 million, $4.3 million,$3.1 million, $2.9 million and $2.2 million, respectively. Non-U.S. orders increased by $52.7 million, largely due to a $33.2 million improvement in orders for refuse trucks, inclusive of certain large fleet orders, as well as increases in orders for multi-purpose maintenance vehicles, street sweepers, dump truck bodies, aftermarket offerings and metal extraction support equipment of $7.9 million, $7.3 million, $4.5 million, $4.5 million and $4.4 million, respectively. Partially offsetting these improvements were reductions in orders for sewer cleaners and industrial vacuum loaders of $6.8 million and $2.4 million, respectively, as well as a $1.5 million unfavorable foreign currency translation impact.

Current wording

Total orders for the nine months ended September 30, 2024 decreased by $2.6 million compared to the prior-year period. U.S. orders decreased by $40.2 million, primarily due to reductions in orders for street sweepers, safe-digging trucks, trailers, multi-purpose maintenance vehicles, industrial vacuum loaders, road-marking and line-removal equipment, and metal extraction support equipment $48.7 million, $46.3 million, $9.4 million, $4.9 million, $2.0 million, $1.9 million, and $1.1 million, respectively. Partially offsetting these reductions were improvements in orders of dump truck bodies, aftermarket offerings, sewer cleaners, refuse trucks, waterblasting equipment, and hoists of $43.3 million, $12.2 million, $9.8 million, $3.1 million, $2.5 million, and $1.5 million, respectively. Non-U.S. orders increased by $37.6 million, largely due to a $31.8 million improvement in orders for refuse trucks, inclusive of certain large fleet orders, as well as increases in orders for street sweepers, multi-purpose maintenance vehicles, aftermarket offerings, dump truck bodies, and metal extraction support equipment of $6.1 million, $5.8 million, $4.3 million, $3.9 million, and $1.9 million, respectively. Partially offsetting these improvements were reductions in orders for sewer cleaners, industrial vacuum loaders, safe-digging trucks, and snow removal equipment of $9.7 million, $2.2 million, $2.2 million, and $1.1 million, respectively, as well as a $1.9 million unfavorable foreign currency translation impact.

Previous wording

Net sales for the six months ended June 30, 2024 increased by $71.0 million, or 10%, compared to the prior-year period, primarily due to higher sales volumes, inclusive of the effects of acquisitions and pricing actions. For the six months ended June 30, 2024, U.S. sales increased by $54.1 million, largely due to increases in sales of street sweepers, dump truck bodies, safe-digging trucks, road-marking and line-removal equipment, industrial vacuum loaders, sewer cleaners, hoists and waterblasting equipment of $9.5 million, $9.4 million, $8.1 million, $6.4 million. $5.9 million, $5.7 million, $2.6 million and $1.8 million, respectively. Additionally, aftermarket revenues increased by $4.3 million. Partially offsetting these improvements was a $4.3 million reduction in sales of trailers. Non-U.S. sales increased by $16.9 million, largely due to increases in sales of multi-purpose maintenance vehicles, metal extraction support equipment, dump truck bodies, refuse trucks and sewer cleaners of $5.8 million, $4.5 million, $4.5 million, $3.4 million and $1.6 million, respectively. In addition, aftermarket revenues increased by $1.9 million. Partially offsetting these improvements were reductions in sales of safe-digging trucks, waterblasting equipment and street sweepers of $1.8 million, $1.3 million and $1.2 million, respectively, as well as a $0.9 million unfavorable foreign currency translation impact.

Current wording

Net sales for the nine months ended September 30, 2024 increased by $96.2 million, or 9%, compared to the prior-year period, primarily due to higher sales volumes, inclusive of the effects of acquisitions, and pricing actions. For the nine months ended September 30, 2024, U.S. sales increased by $84.8 million, largely due to increases in sales of metal extraction support equipment, dump truck bodies, street sweepers, sewer cleaners, road-marking and line-removal equipment, safe-digging trucks, industrial vacuum loaders, metal extraction support equipment, refuse trucks and hoists of $19.1 million, $13.5 million, $10.1 million, $8.0 million, $7.9 million, $6.9 million, $3.6 million, $2.6 million and $2.6 million, respectively. Additionally, aftermarket revenues increased by $12.7 million. Partially offsetting these improvements was a $7.6 million reduction in sales of trailers. Non-U.S. sales increased by $11.4 million, largely due to increases in sales of multi-purpose maintenance vehicles, dump truck bodies, metal extraction support equipment, sewer cleaners and refuse trucks of $5.3 million, $4.0 million, $3.0 million, $2.0 million and $2.0 million, respectively. In addition, aftermarket revenues increased by $3.3 million. Partially offsetting these improvements were reductions in sales of safe-digging trucks and street sweepers of $4.1 million and $1.9 million, respectively, as well as a $1.6 million unfavorable foreign currency translation impact.

Previous wording

Cost of sales for the six months ended June 30, 2024 increased by $34.1 million, or 6%, compared to the prior-year period, primarily related to higher sales volumes, inclusive of the effects of acquisitions, and increased material costs. Gross profit margin for the six months ended June 30, 2024 was 25.7%, compared to 23.0% in the prior-year period, with the improvement primarily attributable to improved operating leverage from higher sales volumes and benefits from pricing actions.

Current wording

Cost of sales for the nine months ended September 30, 2024 increased by $41.6 million, or 5%, compared to the prior-year period, primarily related to higher sales volumes, inclusive of the effects of acquisitions, and increased material costs. Gross profit margin for the nine months ended September 30, 2024 was 26.2%, compared to 23.4% in the prior-year period, with the improvement primarily attributable to improved operating leverage from higher sales volumes, benefits from pricing actions, and favorable sales mix.

Previous wording

SEG&A expenses for the six months ended June 30, 2024 increased by $5.7 million, or 10%, compared to the prior-year period, primarily due to additional costs from acquired businesses, as well as increases in sales commissions and incentive-based compensation expense. As a percentage of net sales, SEG&A expenses were 8.3% in the current-year period, in line with the prior-year period.

Current wording

SEG&A expenses for the nine months ended September 30, 2024 increased by $9.4 million, or 11%, compared to the prior-year period, primarily due to additional costs from acquired businesses, as well as increases in marketing costs, sales commissions and incentive-based compensation expense. As a percentage of net sales, SEG&A expenses were 8.2% in the current-year period, compared to 8.1% in the prior-year period.

Previous wording

Operating income for the three months ended June 30, 2024 increased by $16.7 million, or 30%, compared to the prior-year quarter, largely due to a $20.4 million improvement in gross profit and a $0.1 million decrease in amortization expense, partially offset by the $3.4 million increase in SEG&A expenses and a $0.4 million increase in acquisition and integration-related costs.

Current wording

Operating income for the nine months ended September 30, 2024 increased by $45.1 million, or 30%, compared to the prior-year period, largely due to a $54.6 million improvement in gross profit and a $0.2 million decrease in amortization expense, partially offset by the $9.4 million increase in SEG&A expenses and a $0.3 million increase in acquisition and integration-related expenses.

Previous wording

Backlog was $1.02 billion at June 30, 2024, compared to $940 million at June 30, 2023.

Current wording

Backlog was $980 million at September 30, 2024, compared to $939 million at September 30, 2023.

Previous wording

The following table summarizes the Safety and Security Systems Group’s operating results as of and for the three and six months ended June 30, 2024 and 2023:

Current wording

The following table summarizes the Safety and Security Systems Group’s operating results as of and for the three and nine months ended September 30, 2024 and 2023:

Previous wording

Total orders for the three months ended June 30, 2024 increased by $5.2 million, or 7%, compared to the prior-year quarter. U.S. orders increased by $9.8 million, primarily due to a $9.7 million improvement in orders for public safety equipment, inclusive of a large fleet order, as well as a $1.1 million increase in orders for industrial signaling equipment, partially offset by a $1.0 million reduction in orders for warning systems. Non-U.S. orders decreased by $4.6 million, primarily due to reductions in orders for public safety equipment and industrial signaling equipment of $3.4 million and $1.2 million, respectively.

Current wording

Total orders for the three months ended September 30, 2024 decreased by $2.2 million, or 3%, compared to the prior-year quarter. U.S. orders increased by $6.7 million, primarily due to improvements in orders for public safety equipment, warning systems and industrial signaling equipment of $2.6 million, $2.3 million and $1.8 million, respectively. Non-U.S. orders decreased by $8.9 million, primarily due to a $7.7 million reduction in orders for public safety equipment in comparison to the prior-year quarter, which included a large fleet order from a customer in Europe, as well as a $1.7 million reduction in orders for industrial signaling equipment.

Previous wording

Net sales for the three months ended June 30, 2024 increased by $12.2 million, or 18%, compared to the prior-year quarter, inclusive of the effects of higher sales volumes and pricing actions. U.S. sales increased by $11.3 million, driven by increases in sales of public safety equipment, warning systems and industrial signaling equipment of $9.6 million, $1.1 million and $0.6 million, respectively. Non-U.S. sales increased by $0.9 million, largely due to increases in sales of warning systems and public safety equipment of $1.5 million and $1.2 million, respectively, partially offset by a $1.7 million reduction in sales of industrial signaling equipment.

Current wording

Net sales for the three months ended September 30, 2024 increased by $2.6 million, or 4%, compared to the prior-year quarter, inclusive of the effects of higher sales volumes and pricing actions. U.S. sales increased by $9.2 million, driven by increases in sales of public safety equipment and industrial signaling equipment of $7.7 million and $1.5 million, respectively. Non-U.S. sales decreased by $6.6 million, largely due to reductions in sales of public safety equipment, industrial signaling equipment and warning systems of $3.7 million, $1.6 million and $1.5 million, respectively.

Previous wording

Cost of sales for the three months ended June 30, 2024 increased by $15.4 million, or 5%, compared to the prior-year quarter, primarily related to higher sales volumes. Gross profit margin for the three months ended June 30, 2024 was 26.8%, compared to 23.9% in the prior-year quarter, with the improvement primarily attributable to improved operating leverage from higher sales volumes and benefits from pricing actions.

Current wording

Cost of sales for the three months ended September 30, 2024 decreased by $2.4 million, or 5%, compared to the prior-year quarter, primarily related to favorable product mix and lower material costs, partially offset by higher sales volumes. Gross profit margin for the three months ended September 30, 2024 was 42.9%, compared to 37.6% in the prior-year quarter, with the improvement primarily attributable to favorable sales mix, lower material costs, and benefits from pricing actions.

Previous wording

Operating income for the three months ended June 30, 2024 increased by $4.2 million, or 30%, compared to the prior-year quarter, primarily due to a $6.3 million improvement in gross profit, partially offset by the $2.1 million increase in SEG&A expenses.

Current wording

Operating income for the three months ended September 30, 2024 increased by $3.1 million, or 23%, compared to the prior-year quarter, primarily due to a $5.0 million improvement in gross profit, partially offset by the $1.9 million increase in SEG&A expenses.

Previous wording

Total orders for the six months ended June 30, 2024 increased by $1.3 million, or 1%, compared to the prior-year period. U.S. orders increased by $13.9 million, primarily due to a $14.4 million improvement in orders for public safety equipment, inclusive of a large fleet order, as well as a $2.2 million increase in orders for industrial signaling equipment, partially offset by a $2.7 million reduction in orders for warning systems. Non-U.S. orders decreased by $12.6 million, primarily due to a $10.3 million reduction in orders for public safety equipment in comparison to the prior-year period, which included a large fleet order from a customer in Mexico, as well as a $1.6 million reduction in orders of industrial signaling equipment.

Current wording

Total orders for the nine months ended September 30, 2024 decreased by $0.9 million compared to the prior-year period. U.S. orders increased by $20.6 million, primarily due to improvements in orders for public safety equipment and industrial signaling equipment of $17.0 million and $4.0 million, respectively. Non-U.S. orders decreased by $21.5 million, primarily due to a $18.0 million reduction in orders for public safety equipment in comparison to the prior-year period, which included large fleet orders from customers in Mexico and Europe, as well as a $3.3 million reduction in orders for industrial signaling equipment.

Previous wording

Net sales for the six months ended June 30, 2024 increased by $16.4 million, or 12%, compared to the prior-year period, inclusive of the effects of higher sales volumes and pricing actions. U.S. sales increased by $16.6 million, driven by improvements in sales of public safety equipment and warning systems of $14.5 million and $2.2 million, respectively. Non-U.S. sales decreased by $0.2 million, largely due to a reduction in sales of industrial signaling equipment of $2.6 million, partially offset by improvements in sales of warning systems and public safety equipment of $1.5 million and $1.0 million, respectively.

Current wording

Net sales for the nine months ended September 30, 2024 increased by $19.0 million, or 9%, compared to the prior-year period, inclusive of the effects of higher sales volumes and pricing actions. U.S. sales increased by $25.8 million, driven by improvements in sales of public safety equipment, warning systems and industrial signaling equipment of $22.2 million, $2.2 million and $1.4 million, respectively. Non-U.S. sales decreased by $6.8 million, largely due to reductions in sales of industrial signaling equipment and public safety equipment of $4.2 million and $2.7 million, respectively.

Previous wording

SEG&A expenses for the six months ended June 30, 2024 increased by $4.1 million, or 15%, compared to the prior-year period, primarily due to higher sales commissions and incentive-based compensation expense. As a percentage of net sales, SEG&A expenses were 20.8% in the current-year period, compared to 20.3% in the prior-year period.

Current wording

SEG&A expenses for the nine months ended September 30, 2024 increased by $6.0 million, or 14%, compared to the prior-year period, primarily due to higher sales commissions and incentive-based compensation expense. As a percentage of net sales, SEG&A expenses were 20.8% in the current-year period, compared to 19.8% in the prior-year period.

Previous wording

Operating income for the six months ended June 30, 2024 increased by $5.9 million, or 23%, compared to the prior-year period, primarily due to a $10.0 million improvement in gross profit, partially offset by the $4.1 million increase in SEG&A expenses.

Current wording

Operating income for the nine months ended September 30, 2024 increased by $9.0 million, or 23%, compared to the prior-year period, primarily due to a $15.0 million improvement in gross profit, partially offset by the $6.0 million increase in SEG&A expenses.

Previous wording

Backlog was $57 million at June 30, 2024, compared to $67 million at June 30, 2023.

Current wording

Backlog was $53 million at September 30, 2024, compared to $67 million at September 30, 2023.

Previous wording

Corporate operating expenses for the three months ended June 30, 2024 were $10.1 million, compared to $10.9 million in the prior-year quarter, with the decrease primarily due to lower medical expenses.

Current wording

Corporate operating expenses for the three months ended September 30, 2024 were $12.4 million, compared to $8.4 million in the prior-year quarter, with the increase primarily due to higher post-retirement expenses, as well as increases in medical expense, information technology costs, and stock compensation expense.

Previous wording

Corporate operating expenses for the six months ended June 30, 2024 were $21.3 million, compared to $21.1 million in the prior-year period, with the increase primarily due to higher stock compensation and incentive-based compensation expense, partially offset by a $1.8 million gain associated with an insurance recovery and lower medical expenses.

Current wording

Corporate operating expenses for the nine months ended September 30, 2024 were $33.7 million, compared to $29.5 million in the prior-year period, with the increase primarily due to higher stock and incentive-based compensation expense, post-retirement expenses, and information technology costs, partially offset by a $1.8 million gain associated with an insurance recovery and lower medical expenses.

Previous wording

The Company uses its cash flow from operations to fund growth and to make capital investments that sustain its operations, reduce costs, or both. Beyond these uses, remaining cash is used to pay down debt, repurchase shares, fund dividend payments and make pension contributions. The Company may also choose to invest in the acquisition of businesses. In the absence of significant unanticipated cash demands, we believe that the Company’s existing cash balances, cash flow from operations and borrowings available under the Company’s credit facility will provide funds sufficient for these purposes. As of June 30, 2024, there was $131.0 million of cash drawn on the Revolver, $122.7 million outstanding under the term loan facility and $11.1 million of undrawn letters of credit under the 2022 Credit Agreement, with $532.9 million of availability for borrowings. The net cash flows associated with the Company’s rental equipment transactions are included in cash flow from operating activities.

Current wording

The Company uses its cash flow from operations to fund growth and to make capital investments that sustain its operations, reduce costs, or both. Beyond these uses, remaining cash is used to pay down debt, repurchase shares, fund dividend payments and make pension contributions. The Company may also choose to invest in the acquisition of businesses, like the acquisition of substantially all the assets and operations of Standard Equipment Company that was completed on October 4, 2024. In the absence of significant unanticipated cash demands, we believe that the Company’s existing cash balances, cash flow from operations, and borrowings available under the Company’s credit facility will provide funds sufficient for these purposes.

Previous wording

The Company’s cash and cash equivalents totaled $48.6 million and $61.0 million as of June 30, 2024 and December 31, 2023, respectively. As of June 30, 2024, $23.1 million of cash and cash equivalents was held by foreign subsidiaries. Cash and cash equivalents held by subsidiaries outside the U.S. typically are held in the currency of the country in which it is located. The Company uses this cash to fund the operating activities of its foreign subsidiaries and for further investment in foreign operations. Generally, the Company has considered such cash to be permanently reinvested in its foreign operations and the Company’s current plans do not demonstrate a need to repatriate such cash to fund U.S. operations. However, in the event that these funds are needed to fund U.S. operations or to satisfy U.S. obligations, they generally could be repatriated. The repatriation of these funds may cause the Company to incur additional U.S. income tax expense, dependent on income tax laws and other circumstances at the time any such amounts are repatriated.

Current wording

The Company’s cash and cash equivalents totaled $73.7 million and $61.0 million as of September 30, 2024 and December 31, 2023, respectively. As of September 30, 2024, $21.1 million of cash and cash equivalents was held by foreign subsidiaries. Cash and cash equivalents held by subsidiaries outside the U.S. typically are held in the currency of the country in which it is located. The Company uses this cash to fund the operating activities of its foreign subsidiaries and for further investment in foreign operations. Generally, the Company has considered such cash to be permanently reinvested in its foreign operations and the Company’s current plans do not demonstrate a need to repatriate such cash to fund U.S. operations. However, in the event that these funds are needed to fund U.S. operations or to satisfy U.S. obligations, they generally could be repatriated. The repatriation of these funds may cause the Company to incur additional U.S. income tax expense, dependent on income tax laws and other circumstances at the time any such amounts are repatriated.