Oak Brook-based Federal Signal Corp reported a 13 percent increase in net sales for the third quarter of 2013 as demand in all company sectors remained strong.
Consolidated net sales were $209.3 million for the quarter. Income from continuing operations was $16.8 million for the quarter, equal to 26 cents per diluted share. The company's Environmental Solutions Group sales were up 11 percent on higher vacuum truck and municipal sewer cleaner shipments as a result of expanded production capacity. Fire Rescue Group sales were up 51 percent, driven by improved sales of fire-lift products, while Safety and Security Systems Group sales were flat compared to the same period of the prior year.
Adjusted net income from continuing operations for the quarter was $16.6 million, equal to 26 cents per diluted share, which the company reported was up 163 percent compared to $6.3 million, or 10 cents per diluted share, in the same quarter a year ago.
"This was another quarter in which we successfully executed our business strategy, with both our Environmental Solutions Group and our Fire Rescue Group continuing to deliver strong results," said Federal Signal President and CEO Dennis J. Martin. "Our Safety and Security Systems Group recovered from problems experienced during its ERP launch in the second quarter of this year, and corporate expenses were low. "On a consolidated basis, we experienced double-digit sales growth versus last year, and our operating margin expanded to 9.0%. In addition, interest expense was down 71," Martin added. "These positive factors all contributed to our 163% increase in adjusted net income versus last year."
The company reported orders of $197.1 million, up 5 percent compared to the year-ago quarter. Backlog was $286.5 million, down 12 percent versus an extended backlog in the prior-year quarter.
"We are comfortable with orders and backlog during the quarter," Martin continued. "Strong orders matched strong sales in the Environmental Systems Group, and its backlog is at a healthy level. We had worked on deliberate reductions in backlog during the second quarter. On the other hand, the Fire Rescue Group experienced some softness in orders during the quarter. The Safety and Security Systems Group experiences less advance ordering, and its orders and backlog were steady. It continues to work a large funnel of long-range systems opportunities."