FSS - Earnings call transcript Q3 2020 | Federal Signal Corporation

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Operator

Greetings, and welcome to Federal Signal Corporation's Third Quarter Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. I would now like to turn the conference over to your host, Ian Hudson, Chief Financial Officer. Thank you.

You may begin.

Ian Hudson

to Third welcome Call. XXXX and morning, Federal Quarter Signal's Conference Good Ian Financial Chief the I'm company's Officer. Hudson, Officer. with Also me Executive our on is today Jennifer the Sherman, and President call Chief

today signing will clicking Investor as release, We on we morning. online the be this into Call slides issued some our by to presentation going which well to to the the refer webcast. as earnings can followed and The icon slides website, federalsignal.com,

earnings release a our posted have the tab presentation We the slide on under and website. also Investor

Before of on and we and release subject found may Commission. Exchange website. statements begin, that I'd language our like to are Securities earnings are our contain in These remind documents you Federal that to some harbor today's today the Signal's safe comments filings available made in the forward-looking with

presentation some Our earnings these with GAAP not U.S. In in and measures. accepted are non-GAAP filings, accordance that our accounting we reconcile principles. to release contains generally measures measures also

we of addition, before turning address begin on Jennifer results our your for performance XX-Q quarter will and on I'm some third perspective comments, call I After remainder our our today. In over her and by Form providing to the will today to the going this our detail to year. file our provide prepared outlook later Jennifer questions.

a further net margin in year $XX.X million In year. to Our target margin consolidated $XX.X at third this in EPS basis, XX.X% for level, XX.X% QX compared year year. Consolidated to compared an year. compared of challenging EBITDA of year XX.X% for $XX last and million equates to year On flow. last EPS share $XX.X year. per range $XXX year. was year. margin positive high in the adjusted this was compared of $XX last quarter to was was despite this adjusted summary, $XXX to release. for $XX.X income $X.XX our to compared QX in excess $X.XX the were year. in $X.XX compared adjusted cash Consolidated per million this operating to On QX last an operating Consolidated to million million million year. GAAP in in $X.XX million results last Orders $XX.X circumstances, consolidated compared continue share from XX% last in are QX an That share million earnings Net was this this share year. quarter income quarter our last year QX were adjusted QX execute very financial XX.X% again, million a That translates today's of to or per million, teams to QX generating sales QX provided up EBITDA compared basis, $XXX this per year last to delivering

Our at million. at the end backlog the $XXX of quarter remained healthy

an year, last our year. terms to year year million group year million to were points year adjusted for compared third sales quarter of target quarter QX year $X.X last million million Difficulty] $X.X [Technical this million QX And quarter the EBITDA year. In this ESG's to EBITDA $X.X compared last to was last to range XX.X% last XX.X% EBITDA Corporate to million $XX.X operating quarter this compared ago. expenses for sales above $XX was for basis third compared were were year. $X.X $XX compared was a SSG's $XX million the in That XX SSG's year. ago. to in of million year. adjusted $XXX million compared XX% our a and SSG's $XXX million adjusted margin from up results, this translates ESG

to consolidated to year XX.X% this compared QX Gross XX.X% was in the margin income statement. now last Turning year.

recognition the to approximately included costs QX of production inventory lower Our costs flow as million levels. the year of $X period statement that due income overhead excess results through in this

levels approximately unusual therefore we additional QX earnings XX%. year. GAAP and in expected per year expenses, sales, As with our and year. $X.XX quarterly overall decrease rate for we On facilitate comparison increase points the no the in an earnings were effects. the our and earnings general our $X.XX and expense year a in third our million average recognition than year purchase of expenses compared for year. adjusted Tax in comparisons, in other results to XX%. In share third interest year, rate items recorded expect current the share assuming $XXX,XXX items include added to our the at was basis, full approximately accounting current GAAP basis, a around share lower adjust tax last quarter acquisition-related and benefit with to quarters. year. affecting led $X.XX Other pretax per earned percentage in largely tax On share interest this prior to QX activity. quarter, year due acquisition-related stock share a from prior per basis a quarter tax selling, we prior adjustments tax QX discrete this last administrative for effective tax the $XXX,XXX expense expense QX were At engineering, EPS due $X.X earnings of $XXX,XXX quarter from being for expenses time, benefit made this last To per to excess per income compared rates down a share and to or down to the benefits, XX largely reduction in be $XXX,XXX lower income per coronavirus-related lower quarter our in the GAAP compensation to $X.XX $X.XX to we this This expenses, QX the in effective exclude compared typically

period. compared year expenditures far prior XX% $XX million capital year-to-date $XX amount cash year we total at so $XX year. now million, represents in $XX where Overall, the from totaled year, to of generated to $XX from this have of up last Looking million operating almost approximately operations flow, our cash bringing million That improvement this QX generation the cash million. of or

expecting We and these For the $XX million full provide additional facility. under we some current of million ended will shortly. debt some availability investments are currently the quarter million. Jennifer of of total CapEx on $XXX and of between year, $XXX credit our detail net $XX with million

X-year million we a facility executed last As July. new reminder, $XXX a credit

to in trigger also We for by additional the capacity option $XXX acquisitions. increase our borrowing an an million have

flow from no net debts. Our debt ratio in delinquencies Cash year-end. so in October has or bad change leverage and essentially customer expectations unchanged with far low material remains met

On same debt Our will we low to through a challenges strong and strategic cash flow navigate financial and pandemic. growth capital we generation, position the fourth the returns ongoing cash long-term our to per shareholders. strong of acquisitions allocation for dividend committed we quarter. At quarter to of the levels a that help paid note, similar recently by third and funding investing priorities inorganic share remain time, $X.XX $X.X dividend the to announced million, the presented in during initiatives, pursuing amounting us

I now stock we $XX million repurchase back quarter, spent about And will over to shares. authorization our to currently like the my have comments. During under turn of programs. remaining buying the That call concludes We $XXX,XXX also Jennifer.

Jennifer Sherman

work and am ongoing by Since focus of of employees. critical through our safety of our at distancing the proud been start I'd our and my in Thank a These teams order safe times. implemented has protect our our health dealer you, have to challenging pandemic, managed safety measures steps the on of I profound of we commitment. employees. our with guidelines each giving these area And to outbreak a facilities thanks comply the of adjusting employees for have Ian. production for included to partners their environment our host to how to our immensely the of a employees. ensure like have safe processes

the family invested available in at-home Concurrent have a temperature time-off all states made outside those experienced their appear recent and within to we many the cases of in from capabilities have originated States, have members. trends with facilities, similar additional in issued uptick at our United of We kits mandatory paid of policy, with our confirmed workplace. testing cases and our most Nearly across coronavirus employees base. of mask the to our number free employees a for provided face unfortunately employee screening

the reducing job our a continue the through and ago, aimed transformational been COVID-related our a began were of sources and acquisitions our our countercyclical fine protecting markets. HighMark product to journey initiatives streams in And employees revenue last parts protocol. safety used at expanding identifying successful revenue navigating businesses. rentals, strategic Primarily JJE at our Signal to do have equipment, organic of we our teams through a diversified businesses. legacy some have we XXXX end combination cyclicality of the in acquisitions, our in years adhering Federal include year, Our to disruptions that facilities service. and new by we and cases, of X and offerings Through to deliberately our

and acquisitions have with efforts, utility. markets XXXX in infrastructure we product last of the such with our addition, construction, new TBEI MRL In combined and as year, added development end new

utility side, entered digging safe On have of a market the organic product equipment. end offering we with the broad

year were in needed. were and and as our the have principles have experienced teams employees have of application businesses, robust our agility circumstances These tremendous develop challenging execution times. the our quality that We in a to as contingency also very XX/XX tools invoke the the we continue our that a so worked decisions leadership to ongoing far demonstrated the at teams, to high of have able benefits we The strategy, unprecedented of in and these testament from to resulted results commitment this team. level benefited our of to deliver operational strong the operate excellent our strategic

second third July. and and or the the range $XX the line further with to results broad was Our of Overall, were offerings for operating evidencing product order range had in high strong of intake diversity offerings markets. fundamentals, in quarter product our we that XX% quarter, business quarter broad up compared end expectations million our our entering

beginning discussed, have improvement customer-supplied specific months. many we we quarters down. last products in we resulted sequential orders shut by of available businesses much strong OEMs for and at discussed second the and particular, the chassis dump the drop-off the where On of and many bodies end recovery. TBEI, with summer truck lack trailer large from seasonally customers our chassis the used frequently in significant previously whose Within in have third during are at businesses, in markets, truck TBEI, end construction are driven the bodies periods by quickest our seen of the working markets of April, As our for our warmer the our part of call, business,

improve. to continue situation We have chassis seen the

For third point the two example, one slightly averaged per day year XX approximately much and approximately our of availability at day per year-over-year. is quarter, million plants the the deliveries last With quarter in improving which improved orders chassis $XX conditions of only of and low and efforts behind or the May. XX% million our or in $XX sales from XX% up sequentially up over those teams, were second deliveries TBEI's

During we results. pandemic-related since third margin the acquisition contributed deliver disruptions overcome quarter, over quarter EBITDA little and certain to its impressive TBEI also also the seasonal years aftermarket a was completed ago. able performance Strong the X highest to quarterly

maintenance offerings reminder, typically rental year service periods is revenues the the of third harsher are because lower in are conditions. many used of second and in service during where and product the quarters a company's weather of typically for and North and America, usage As parts activities activity higher

our our in quarter, strong of our quarter. during period. the performance up aftermarket aftermarket We which year is quarter, XX% and For of improvement approximately The year-over-year for utilization to the improvement business XX/XX a revenues Canada our principles. in nice contributed XX% ESG's the from in operating revenues in strength represented saw the prior the margin rental

our to the strong considering Given we margin past related the performance the once times, uncertainty difficult margin targets get these are in pandemic. ongoing raising we

future growth difficult our growth we by this the investing continued a company. for quarter, through of managing the objectives on focus emphasize While long-term

make capacity support long-term to significant through efficiencies to our the to and and additional of growth equipment. continuing plants operational use add are investments newer we First, existing in to our machinery gain

manufacturing make plant expansions to Rugby Vactor, and Crystal, MRL. on our continue also facility our Minnesota. at and during we property And additional TBEI quarter, in Lake We the purchased progress

X better the serve property, and we gain further new capacity and such expect to example and operating increase to With of market of purchase in building this diversification markets. One efficiencies the MAC and partnership Defense significant military. customers existing to Defense, contracts we and been to organic military in the the of Oshkosh have growth recently opportunity expansion awarded our business bodies supply is in with dump

terms potential have $XX of these of contract, revenue. multiyear the the million contribute to awards to the up Over

be initiative expect the heating by an to excited operational facility which are in We enhanced our opportunity we and this to support expanded a from to layout capabilities. have position improved to

season recently introduced we've for during been to introduction. and our our into new Second, new with the tools our been very experience XXX-horsepower customers development rental shutdown utilization in have in an continuing number positive familiarity of product key continue to of both progress that provides will invest we benefit way far new so Customer we which fall are to a accelerated areas. pump our gain to digital Both and also date our customers. development customer and meaningful At product priorities, make our fleet, have Jetstream high. feedback business, effective the has levels remain

to with e-commerce as QX, planning to you excited that are customer of experience I'm at in SSG. addition, launch our part share strategy, digital we In our site

We in the support a are capture share. existing grow accelerated contactless will additional to conditions and marketing for tools. our meaningful our years, need expecting customers, sales e-commerce upcoming that platform to the market revenue even provide and stronger new become customers, our Current reach tool

many we engagement year, cooperation contacts and Our to while to digital with social this and our of customers July website, tools, used Solutions Vactor equipment that and benchmark sewer our sustainability excavators report. month, our little double many our also this responded and resource combination consumption, XXX,XXX or TRUVAC we Through inventory. our long-form brands like continuous Security features partners. has and issued inaugural the our on of about for and reached website cleaners, across to our a and made With from our dealer incredibly customers LinkedIn of quarter. all the pleased group, environmental, of cleaners our of report earlier prospects engagements proud tools and report. vacuum beneficial the commitment content impacts progress used products, this to with businesses the Twitter. approximately That our through with within utilizing basin programs catch we've human group, can we initiatives also to during Environmental X,XXX us videos thrilled to Safety these are using launched build informed of purchase swiftly. our highlighting engaged I'm our and have I'm that strong functionality level media share from and that deliver we a was issuance with innovation, both social continue industries. this dealers, introduced to accomplishments engagement sell governance over of reduced In Using environment our governance we standard many keep equipment and several Within the we Systems safety. the

evident upon company a is pride hope to we our whose importance. the proud products reading be environmental are inherent And We and that social have reports.

an our to Instagram active stakeholders, And are social social of the media. inspired businesses improve our announced @federalsignalcorp to find now corporate recently our company with also can This pages employees, very engagement media team. Facebook, increase We presence. with have corporate Many you to has use including handle. intend platform all customers, and this We on investors. both the on initiative

along insight provide the our bit and leverage little to with fun. brands, with also all and also will into this of showcase We the outstanding to humor channel culture a celebrate our trivial significance,

mentioned, which, compared of up cash Finally, last initiatives to generation, our is significantly the these continued as Ian growth is foundation strong year.

outlook year. our the this to rest now Turning for of

with provide solid times strength continued during the of of of remainder execution the backlog and in the us these our year. track Our confidence challenging record

new are the As $X.XX. last record range outlook from our year a EPS to highest result, EPS $X.XX full we second to our range set the adjusted previous of raising a by only range The surpassed $X.XX represent the in would year. to $X.XX adjusted history new of

some While end outlook into the any coronavirus-related with it challenges, ongoing does significant assumes take the inefficiencies the operational disruptions year. level associated our of not through of account

on while delivering on to focused results remain strong long-term we forward, strategy. continuing Looking execute our

strong opportunities balance continue us initiatives and drive provide to organic both to will Our for growth sheet M&A.

years, company Over has end implemented condition, market a growth. us the diversification we revenue transformed our develop as strategy market that enabled to journey planning several exposure have to to last and needed strong contingency a our as and continue adjust for of XX/XX protocols, invest continue

post may industrial to we share. where product fully whose or stimulate potential impacted in economy, the stimulus the federal in potential And by may that closely capacity by state be bill. Signal to and take we the We which aid to budgets increasing developments with manner be are level been the a development market of our a either are the long-term recovery including election a our within about lead new that have further optimistic gaining regulatory closely. can packages outcome pandemic. bullish many, facilities, infrastructure and local we at upcoming respect respond to about needs, participate levels municipalities positioning Federal in and our reducing to our Within potential provided better the pandemic continue front on times investing side we markets, are digging are the Like monitoring initiative safe monitoring customer actions prospects in

beginning pursue more generation general, M&A financial front, In and deals to see up our through. with flowing open the On we acquisitions. will history of markets allow robust strong position us again to cash strategic flow M&A

that, we Operator? front, the the in are than questions. has for now year. optimistic are line in were to open With done ready deals pandemic created to the Although get more some we on challenges our we ability logistical the M&A earlier

Operator

with from Chris line of the Moore Securities. Our Instructions] question CJS [Operator comes first

Chris Moore

state a outlined fiscal process. have pay visibility they how to next of out budgeting figure kind muni at about talked on their a expenditures is to topic, process, for the they're looking kind Maybe we've way I Trying fiscal of times to And year. was make looking and state the and the say, them. the many start it like they understand year, then for DOT June with to X-step

you wish in I'm standpoint? that consistent understand, for kind I follow-up you And trying equipment really side? of, a their have feel budgeting from secondly, it's a First, what from to that then already guess with is list And terms is what do of see? the

Jennifer Sherman

to companies. time to our from that line the valued in and governments. what by everyone good QX Yes, I be peer business. an It's that state I'm we've are although regular, borrow one in our equipment is going more business. patterns order seen is QX a municipalities, we of And a cleaning Reminding are essential think, and

equipment. other remember aftermarkets the is for want those think they to I important they or source also thing buy business our if used another municipalities to provides that need rent to

talked we to, my and in alternative. we're with remarks, business, about a viable of performance prepared it As continuing that be continues very it's pleased to

we're as support to positioned, So need you new or whether we very really equipment, equipment I equipment, service and the that a used essential rental well parts believe company, sell.

Ian Hudson

I think previously. different we've Chris, talked range the that mechanisms the about other just thing, of is funding

water on quarter we that cleaners, of funding public think of through products. different sources bills be cell I kind for certain phone our through call, went those the second for warning system sewer taxes would

budget. you general that expect. of it's municipal not the diverse kind entirely It's a funds may set of pretty just So

Chris Moore

So for sorry. I'm argument, go ahead,

Jennifer Sherman

different. was ESG, has thing is, the other say, No, say of about within going recovery going the lines, that for particularly I talked kind been product to of was our we certain I to

to rates Canada, rental pandemic rental For utilization levels. seen rates, example, in we've our return pre

it has and that benefited we've us to So end expect diversification benefit in again, XXXX. as into continue done have, of to terms the we in go us we XXXX markets we

Chris Moore

from assume that, component assuming will by there, for be past argument is quickly kind gets again, much pretty terms a November, there that stimulus pretty we that package be sometime felt in funding of Or of If Federal in would sake, and strong? December. Is local Signal lag? state of

Jennifer Sherman

Yes.

CapEx. in one is that the things our investment this think us year I of differentiates

And are Our year, let We're bit this CapEx expanding give facilities. a his Ian in expenditures big color noted more and existing as comments. investing me little a up believer in additional, commentary. our

performance. can we really improve margin So our

done Vactor. year. by throughout about at year, bit. We've expansions a plan we've the will quite So done this It end this be of talked

markets bought for that facility, adjacent times. And Crystal and the and plant some markets new frankly, That that third We're reduced lead us and post because quarter was want positioned recovery. presence we've caused so Rugby military, because, all any the Our MRL end initiative in also our materially at pandemic our during of Lake very some we like existing important be expanding to of did our we those pursuing end we problems. Vactor property. it we facility, believe well

that able made the comes we've with or recovery So needs. that very well like positioned And to quickly customer into respond otherwise, the to we objective I situation. feel whether go respond to with are investment bill being as of we stimulus XXXX, a to

Ian Hudson

of our think, equipment again, area own have the uptick us diversification any Chris, through I partners utilization to helps of our rental fleets. our And us, of our also right? another the demand, used helps dealer quicker It rental addition in to fleet, And fleet, in either our rental sales. streams where revenue respond that's

them. that benefit will And so

I having And different really another that's number our in is tool we again, that of take benefits So this talked post think, have journey a pandemic of about that to recovery. toolbox Jennifer in advantage areas. that

Operator

of with Shlisky line Mike the from comes question next Our Colliers.

Jacob Parsons

Parsons Jacob Securities. Mike the from is This for call on Collier

In the I'll on to [indiscernible] but within any for very regarding the hurricanes currently recent right these and any year equipment? be a Sorry ongoing. that? other like provide incremental in like a year or similar sense, it. snow on trucks up you season. may color question have hurricanes interest Have I Is get after past little the generated could a you guys, demand how high there snow plows vacuum the in heavy

Jennifer Sherman

on specifically equipment, our our our need. equipment, you rental some Absolutely. for opportunity situations And equipment, of most cleaners, Any us type Sure. of of can our the our sewer creates utilize depending customers. an or also dealer can opportunity partners. Guzzler many through pieces create It cleanup, this in for ESG water either

So that monitor closely. something it's we

Jacob Parsons

Okay. any Also, broad road are Or And looking more on whole? more down the just Is you tuck-in kind they of talked be updates I'm pursuing as a deals deals? know you of I guys here. kind a range targets? looking And Excellent. M&A? are like just, are small activity. kind M&A of there of larger they to kind of

Jennifer Sherman

M&A has markets I that months. We've increased So the think our activity over the last seen up. couple back of open

both We really are -- with have but -- we're specialty a pretty to focused term, warning deals, we small our be M&A, vehicle we And audible on will part have our of and longer And a defined how we with that of larger. device continue important respect business, strategy that's our approached we've M&A. growth consistent story. number always believe a manufacturer visual to and an

the to M&A. and important is, other fund sheet balance the got we've think part I

Operator

from Please comes Greg with line of question. Sidoti question Company. next your Our with proceed & the Burns

Greg Burns

morning. pandemic. Good With margins been in last regards couple structure, actions the the of obviously, your cost some have of you the And took your quarters. very beginning strong at to

out results we have 'XX? in about third now back quarter were Like going other to maybe structure the well. should might looking wondering, then relative Thanks. So how things and been some avoided, I your we online held is be fourth into the any that there cost to quarter, where pretty think compensation the or costs up maybe coming incentive like was just maybe have that that

Ian Hudson

talked the that estimate $XX took reduction Greg, had we our had was of mainly headcount for I employees related of we because of costs that plan. it we some would of came was in again, we more the we In half I those had say, about -- think like that came back certain QX, impact or a call, we versus savings, last plan furloughed actions. that QX, back. benefit Yes, And I kind think as we million our versus on the year, cost the -- actions the of

the to travel the back was that million and plan. So quarter in number similar in work picking that's $X QX what versus expect of about savings level fourth a our back at the we'd with again. up And people

So think our view kind that's year. this for I of

people of probably As pandemic, medical expected this back lower as there into may have the year, the just as a quite been frequently to a little with doctor they we aren't head that has necessarily going things year be next past. couple are -- may in than the

So that the targets have may return year. to incentive pretty the levels we -- tied much to then we would more front, on the on comp that next based -- And reset are obviously it's normal would for that year.

we when So targets. established that those will for reset the year, next plan

demonstrated within expense achieving margin the us. all ranges be may target recognize actions really end that influence a took of margins is amount those performance at as to think can we've we and target will again, incentive we're And we the year. those important offering ranges. But within range. So think, year, on small headwind. those of we're we've consistently the results during But this early of performing those pandemic, XX.X% really the the through strong is, comp of side. higher And that I is year Year-to-date, we the again, lens demonstrated this at which think said, a that in operate I the very Jennifer difficult as we

So bit mentioned, have the those. resolution pandemic when to more on we as Jennifer increasing here, committed we're a little

Greg Burns

any might Jennifer mentioned some lines any that strong there improvement I areas can other, at about have, are improvement orders, or to But sequential or maybe looking in that out contributing of is sequential be improvement? TBEI. might pretty just underperforming? still think you ESG product then, the then sequential any And talk And is had that there weak other areas

Ian Hudson

wins, trailers, Jennifer question, it board. And up and bodies encouraging about cleaners No, really year, XX% business the excess the million, was pretty some some $XX which was in it's the the up up digging were And about were a Canada. on good bids JJE those nice increases. were sorry, trucks sequentially. XX% it quarter-over-quarter. mentioned also almost municipalities major within across collectively in Both $XX Greg. truck safe of that Sewer dump and refuse wins of million large had

there So, major lines ours product versus of any deteriorated weren't that really but QX.

So it was almost across-the-board improvement.

Greg Burns

just of patterns then third quarter, how fourth order quarter? part in out into the the of And trended looking have kind first the

Ian Hudson

Yes.

so things in were expecting to They've good. with far, be. So we where line trended

the through So yes, in no surprises so October here. far period first

Greg Burns

to And you pipeline? out digging on on the of And lastly, driving mentioned, funnel equipment? able to an the digging safe the mentioned, calls are impacted being uptick for safe in seen have the of How demos. Like has get do business you important business? then Jennifer sales demos side that and how that demand your

Jennifer Sherman

So there demos, and year levels, respect significantly demos our about are to monitor we things three is that safe we and during is which this are QX talked up encouraging. of how QX carefully versus pre-pandemic One digging. with back very to

second of preferred really an couple regulations. number are on acknowledge that OSHA of seen, a many or about a in states shows. trade a area focused as tools hasn't And And months. third the have are situations safe increase those thing of us we've that We've monitor the digital platform states closely canceled, There that's during shows times, are those increasing and large to been that The customers. virtual unfortunately, as we our talked trade gives area digging we've address an the people. where been that last been, most it And practice. been educate number haven't to in

go through the is should in QX, our we into we see we're translate I translate through as And if go orders. recovery demos. by mean expectation encouraged that in, should see that that So we XXXX, we

Operator

Rodriguez line Our question Marco the Stonegate of comes Capital with next from Markets. Instructions] [Operator

Marco Rodriguez

was little environment. more competitive could guys wondering the, bit about maybe the if perhaps talk you I a

call, about mentioned last the nice On at around. of me, cleaning to time that sort somewhat to moment is competitive so is, had the potential a you implies, regional a to business a go great taking smaller you which environment be of of the kind guys in lot Jennifer comment guys today, that being the kind from of business, not But perhaps there then of the there's good because least at had also, competitors. you very share

that can and So you a maybe you would share of color little helpful. talk be kind can any about bit if

Jennifer Sherman

Sure.

really strong accelerated My to the comments initiatives. product businesses. market particularly many last in opportunities good have share, call, take on TBEI that's businesses, their with And we've that, something we're we We on development competitors focused seen new TBEI like where bought XXXX.

we As company things is were the think good XXXX, the pretty organic growth. entered at one of that I

in during to growth M&A. invest challenging we're And facilities well processes through earlier or So it we years. this times, to X TBEI. also that the in service place we starting to talked concerned for been NPD initiatives manufacturer organic around believe anecdotally to call, existing utilized that we've, year sure to about X growth put of pandemic some are around either through the the up CapEx continuing additional in want very post see going as we've obviously, And customers growth. years And our to support make is of organic positioned we're they XXX-plus on market be participate very benefits many and we're to to in heard about, that. because these this We've growth, is our our I our that equipment. at And

that and focus that's of toolbox. continue our And think from the of And all we acceleration enhanced customer to as by our many go us differentiate been forward. digital that's will I to competitors. some also of our going be experience a tools

Marco Rodriguez

by or know, venues so an for I wanted And MRL squeezed more other kind little talk in think, don't kind for the perspective. aftermarket pandemic, provide obtain end might sort just and a whether equipment, was same been to here you positively can noticed of, And your for could aftermarket customers vein, on doing quarter then I of in quarters has trended cleaning if, may the, the some be and of update I the very all if type well few guys Obviously, wondering integrations kind of any you about you far? looking in changes that business. pushed if if and margin you kind that's there? sort temporarily have just which your given last the a of into wondering then from color structure I helpful of was any guys, bit the

Ian Hudson

Jennifer MRL will then the and aftermarket, the probably take about I'll Sure. talk acquisition.

QX So versus And nice tend XX% from the during a QX, improvement it with the is much business as even was, And up QX aftermarket sequentially place months. aftermarket a on considered. the held be call, in pretty standpoint from taking an quarter, pretty all we to and work even with pandemic see strong the, to was well. talked in it things the standpoint, of strongest aftermarket the the summer second that, about warmer of the our

closely we very particular, utilization in units that the We that monitor we've put think encouraging And with utilization to Canada. fleet. where been we in in mentioned levels monthly both we're sequential that seen rates financial up our Jennifer closely. into the So have seen our And Canada, even improvement fleet monitor I we've back of rental in on pre-pandemic time now fleet. basis really levels and a our

to of been that's the pace encouraging So recovery. really the see

customer a seems We're perspective, recovered seen sequential U.S. improvement from has at recovered. than a rate a what Canada a so And the user as we've not quicker in but basis, still Canada. little and it seeing monthly has which same on like

the the can now I and ESG's only of fact a XX% again, represents revenue standpoint So the quarter. business it aftermarket emphasize from of strategic the that importance for

considered this targets that through the the margin that's comfort factors benefits pandemic. increasing a we've our from our standpoint, that level think margin we when and one You see I of has get in

Jennifer Sherman

move integrating, and I Billings our plants done talk job. year X We've new optimize have is, opportunities of their X of, the excellent is into terms teams as those year and our But getting layout. the by about that about in Mark invested in for an were encouraged public I'm synergies, and all month. playbook, acquisition always at out we year obviously, company which last right, And achieving in what cost stuff MRL really some to forward we of some their facilities business. product development excited X,

forward with since that respect terms EBITDA continued to And by margin playbook. and some just had great set playbook MRL, again, owned see I significantly. team JJE, to remind of performance achieving So to optimizing company, the we growth working. improved Signal. We I would are same you, forth. opportunities again, business. their in that other and there. objectives our as improvement of TBEI, this best bought been expect of We And is performance that we're the think they've a quarter we market looking margin I both using past Federal And in terms

So good there. stuff out

Marco Rodriguez

for question quick me. Last

Your with movement military TBEI. the into markets

could there of Just a wanted what in there servicing if are represent? to? see more are a of provide have little from provide like dynamics to maybe you used any of color sort can then market you if currently that bit total what a And you're different you standpoint, looks that any sort do little market that terms addressable maybe from if might

Jennifer Sherman

Sure.

prior unit TBEI, of the had with work So similar ownership this to particular our business done military.

a in very spec of and requirements. rigid order kind the So experienced they're meet seasoned to team

capabilities. improve important of investments As we piece business. number move a an is to our This forward, we are making of

Defense. every going forward. our will partners, we the And now for have an up teams area it achieve MAC the to confidence I years, this have opportunity. working the right very Defense And closely that world. with important and in a $XX is think world I over I several all The and what growth us Oshkosh specs are sized the we've next in is it's million those confidence of

Marco Rodriguez

the And one Are I last market overall margins? one that in similar one. your to profiles margin apologize, quick

Jennifer Sherman

EBITDA target ranges. our Yes. Within

Operator

Jennifer reached any the call And closing question-and-answer end turn for of have We to the our remarks. I like session. back over to Sherman would

Jennifer Sherman

much. doubt very uncertain these that no you remain Thank and There's tumultuous times.

its and may work that periods that ahead, has others. and or days challenging passion, belief together I'm challenges we commitment our confident my workforce through strong experience while many some will these we grit this have confirmed as ban However, in we and is have unparalleled

be and react to they conditions, do principles XX/XX will flexible to Our continue allow nimble us and to to so. market changing

businesses fundamentals. of solid with brands Our portfolio include many market-leading

We are investments future growth. making support significant to

issues winning, strong record a of anticipating support. to today. closing, distributors, to the continue thank and of safe, I long-term their implementing customers strategy would our history to dealers of confident an experienced clearly our Be soon. Thank cash position, a have stockholders, us for has these. of financial any growth flow remain and of we'll culture I continued like company. you track about for and In defined with you employees, talk The prospects robust responses. generation, changed a We not team proactively coronavirus proven a a and joining

Operator

teleconference. today's concludes This

day. You Thank may lines. your participation, a have for wonderful now your and you disconnect

Federal Signal (FSS) 31 Oct 202020 Q3 Earnings call transcript