Federal Signal Slashes FY21 Adj. EPS Outlook – Quick Facts

While reporting financial results for the third quarter on Thursday, Federal Signal Corp. (FSS) slashed its adjusted earnings guidance for the full year 2021, based on the volatile supply chain environment for the rest of the year.

For fiscal 2021, the company now projects adjusted earnings in a range of $1.68 to $1.78 per share, down from the prior forecast range of $1.78 to $1.90 per share.

On average, seven analysts polled by Thomson Reuters expect the company to report earnings of $1.85 per share for the year. Analysts’ estimates typically exclude special items.

For the third quarter, the company reported net income of $29.2 million or $0.47 per share, up from $25.3 million or $0.41 per share in the prior-year quarter. Excluding items, adjusted earnings were $0.48 per share, compared to $0.42 per share last year.

Net sales for the quarter grew 7 percent to $298.3 million from $279.8 million in the same quarter last year.

The Street was looking for earnings of $0.46 per share on net sales of $325.50 million for the quarter.

The Company also agreed to acquire substantially all the assets and operations of each of Deist Industries, Inc., Bucks Fabricating, LLC, Roll-Off Parts, LLC and Switch-N-Go, LLC (collectively Deist), all of which are located in Pennsylvania

The transaction includes an initial purchase price of $32.5 million, subject to post-closing adjustments. In addition, there is a contingent earn-out payment of up to $7.5 million, based upon the achievement of certain financial targets over a specified performance period.

The Company expects to complete the transaction before the end of the year, subject to customary closing conditions, and expects the acquisition to be accretive in the first year.

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