Federal Signal Corp (FSS), a leader in environmental and safety solutions, has recorded an 85.45 percent plunge in profit for the quarter ended Jun. 30, 2014. The company earned $17.10 million or $0.27 a share in the second-quarter compared with $117.50 million or $1.87 a share a year ago. Analysts on average had predicted net income of $0.23 a share.
Revenue during the second-quarter grew 5.39 percent to $234.60 million from $222.60 million in the last year period.
Gross margin expanded by 184 basis points over the previous year period to 25.11 percent. Total expenses as a percentage of revenues decreased to 89.81 percent from 91.82 percent in the same period last year. That has resulted in improvement of 201 basis points in operating margins to 10.19 percent.
The company disclosed operating income of $23.90 million, compared with $18.20 million in the last year period.
''Consolidated second quarter results show significant improvement,'' said Dennis J. Martin, president and chief executive officer. ''We delivered a 31% increase in operating income, a 59% improvement in adjusted earnings per share and a 21% increase in orders and backlog.''
Cash Flow
Federal Signal Corp has generated cash of $23.40 million from operating activities during the first half, up 296.61 percent or $17.50 million when compared with the last year period. The company has generated 5.38 cents of operating cash flow in every sales dollar for the first half, up from 1.40 cents in the same period last year.
The company has spent $2.30 million cash to meet investing activities during the first half, as against cash outgo of $7 million in the last year period. It has made net capital expenditure of $9.30 million during the first half, which was higher by 16.25 percent or $1.30 million, from a year ago.
The company has spent $20.90 million cash to meet financing activities during the first half, as against cash outgo of $14.80 million in the last year period. It has made net repayment of $16.40 million debt during the first half. It has spent net of $2.20 million on repurchase of common stocks.
As on Jun. 30, 2014, the company's cash balance stood at $24.20 million, up 84.73 percent or $11.10 million from Jun. 30, 2013.
Working Capital
Federal Signal Corp has witnessed a decline in the working capital over the last one year. The company's working capital stood at $132.20 million as at Jun. 30, 2014, down $0.10 million or 0.08 percent from $132.30 million on Jun. 30, 2013. It registered a decrease in current ratio to 1.88 as at Jun. 30, 2014 from 2.05 on Jun. 30, 2013.
Debt Position
Federal Signal Corp has witnessed a decline in the total debt over the last one year. As on Jun. 30, 2014, total debt stood at $75.50 million, down 47.64 percent or $68.70 million, from Jun. 30, 2013. The company's total debt was 11.47 percent of total assets as on Jun. 30, 2014, compared with 22.18 percent on Jun. 30, 2013.
Interest coverage ratio, which determines how easily a company can pay interest expenses on outstanding debt, has improved to 26.56 from 10.71 in the same period last year.
Shares of the company gained $0.89 or 6.48 percent to settle at $14.62 on Tuesday.
