Attached files
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| 8-K - 8-K - FEDERAL SIGNAL CORP /DE/ | d538068d8k.htm |
 Disciplined
Growth Investor Presentation
May, 2013
Exhibit 99.1 |
 Advancing
security and well-being. 2
Safe Harbor Statement
This presentation contains forward looking statements made by management and may contain words
such as “may,” “will,” “believe,” “expect,”
“anticipate,” “intend,” “plan,” “project,”
“estimate” and “objective” or the negative thereof or similar terminology concerning the Company’s
future financial performance, business strategy, plans, goals and objectives. These
expressions are intended to identify forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information
concerning the Company’s possible or assumed future performance or results of operations
and are not guarantees. While these statements are based on assumptions and judgments
that management has made in light of industry experience as well as perceptions of historical trends,
current conditions, expected future developments and other factors believed to be appropriate
under the circumstances, they are subject to risks, uncertainties and other factors
that may cause the Company’s actual results, performance or achievements to be materially different.
These risks and uncertainties, some of which are beyond the Company’s control, include
the cyclical nature of the Company’s industrial, municipal, governmental and
commercial markets; domestic and foreign governmental policy changes; restrictive debt covenants; availability of
credit and third-party financing for customers; our ability to anticipate and meet
customer demands for new products and product enhancements and the resulting new and
enhanced products generating sufficient revenues to justify research and development expenses; our
incurrence of restructuring and impairment charges as we continue to evaluate opportunities to
restructure our business; highly competitive markets; increased product liability,
warranty, recall claims, client service interruptions and other lawsuits and claims; technological advances by
competitors; disruptions in the supply of parts and components from suppliers and
subcontractors; attraction and retention of key employees; disruptions within our
dealer network; work stoppages and other labor relations matters; increased pension funding requirements and expenses
beyond our control; costs of compliance with environmental and safety regulations; our ability
to use net operating loss (“NOL”) carryovers to reduce future tax payments;
charges related to goodwill and other long-lived intangible assets; our ability to expand our business through
successful future acquisitions; unknown or unexpected contingencies in our existing business
or in businesses acquired by us. These risks and uncertainties include, but are not
limited to, the risk factors described under Item 1A, Risk Factors, in the Company’s Annual Report on
Form 10-K, Quarterly Reports on Form 10-Q and other filings with the SEC. These
factors may not constitute all factors that could cause actual results to differ
materially from those discussed in any forward-looking statement. The Company operates in a continually changing business
environment and new factors emerge from time to time. The Company cannot predict such factors,
nor can it assess the impact, if any, of such factors on its financial position or
results of operations. Accordingly, forward-looking statements should not be relied upon as a predictor of
actual results. |
 Advancing
security and well-being. Agenda
I.
Investment Case
II.
Overview of Company
III.
Financial Results
IV.
Growth
3 |
 Advancing
security and well-being. Investment Case
Dominant Market Position in Critical Infrastructure Markets
Unparalleled Brand Equity and Distribution Franchise in Served Markets
Strengthened Balance Sheet with Increasing Ability to Generate Free Cash Flow
Flexible Manufacturing Capacity that is “In-Place”
and Capable of Delivering Higher
Revenues and Profits
Long-Term Favorable Market Dynamics
Aging Infrastructure
Growing Investments in Energy
Demand for Products to Address Man-Made and Natural Disasters
Improving Industrial Markets
Management Execution
Management Depth in Sales, Marketing, Engineering and Operations
4 |
 Advancing
security and well-being. 5 |
 Advancing
security and well-being. Experienced Management Team
President and CEO since October 2010
Previously served as Chairman, President and CEO of General Binding Corporation
35+ years operational & leadership experience primarily at Illinois Tool Works and
Ingersoll-Rand Appointed Chief Financial Officer May 28, 2013
Formerly Chief Financial Officer of Westell Corporation since 2009
Previously Chief Financial Officer of Fellowes, Inc.
Strong Treasury and Investor Relations background
Chief Administrative Officer since November 2010 and Secretary and General Counsel since
March 2004 Operating executive for Safety and Security Systems Group
Joined Federal Signal in 1994 as Corporate Counsel
18 years with Federal Signal
6
Dennis Martin, President and Chief Executive Officer
Jennifer Sherman, SVP, Chief Administrative Officer,
General Counsel and Secretary
Brian Cooper, Chief Financial Officer |
 Advancing
security and well-being. Experienced Management Team
Safety & Security Systems Group
Bryan Boettger, President, Public Safety Systems Division
Joseph Wilson, President, Industrial Systems Division
Dan DesRochers, Vice President of Operations, Safety and Security Systems Group
Fire Rescue Group
Esa Peltola, President, Fire Rescue Group
7
Responsible for Federal Signal’s Public Safety Systems Division
Joined Federal Signal as Manager of Manufacturing Engineering and has continued through the
organization in 25 years with Federal Signal
Responsible for Federal Signal’s Industrial Systems Division
Joined Federal Signal in 1987 as the Western Regional Sales Manager for Electrical Products
and has 25 years with Federal Signal
Vice President of Operations, Safety and Security Systems Group since 2011
Former VP and General Manager of Elgin
22 years of operations and management experience in manufacturing
6 years with Federal Signal
President of Fire Rescue Group since 2007
Managing Director of Bronto Skylift OY AB since 1998
Joined Bronto in 1969 as an electrician’s assistant and has held a variety of positions
of increasing 44 years with Bronto
positions of increasing responsibility
continually progressed through the organization into positions of increasing responsibility
responsibility in design, maintenance, product management and sales and marketing
|
 Advancing
security and well-being. Experienced Management Team
Vice President and General Manager of Elgin, Vice President of Sales, Elgin/Vactor North
American Dealer Channel since 2012
Former Vice President of Sales and Marketing
Joined Federal Signal as a Manufacturing Engineer and held several positions in operations,
production, service and sales prior to 2004
25 years with Federal Signal
Vice President of Vactor since 2010
Transferred to Vactor in February 2003 as Plant Manager
9 years at Elgin in various manufacturing positions
18.5 years with Federal Signal
Vice President, Direct Channel Sales since 2012
Vice President and General Manager of Jetstream since 2006
Direct Channel Sales ESG
13 years with Federal Signal
Vice President of Sales and Parts Operations since 2013
Former Vice President and General Manager of Vactor 2003-2010
28 years of executive experience in manufacturing
7 years with Federal Signal
8
Environmental Solutions Group
Mike Higgins, Vice President Sales and Marketing
Sam Miceli, Vice President, General Manager of Vactor
Bill Krupowicz, Vice President and General Manager of Jetstream of Houston
Dan Schueller, Vice President, Sales and Parts Operations |
 Advancing
security and well-being. Federal Signal Overview
Products and Services Enhance the Safety, Security and
Well-Being of Communities and Workplaces Around the
World
11 Manufacturing Facilities in 6 Countries
Operates 3 Segments:
Environmental Solutions Group (ESG)
Fire Rescue Group (Bronto)
Safety & Security Systems Group (SSG)
Increasing Global Presence and Installed Base of Customers
–
Over 3,000 Customers in more than 100 Countries
Employees: ~2,600 Worldwide
Company Overview
2012 Net Sales by Segment
Fire Rescue Group
17%
Environmental
Solutions Group
53%
Safety & Security
Systems Group
30%
9 |
 Advancing
security and well-being. Federal Signal Segments
ESG
Products
Geographic
Mix
2012
Revenue
Elgin street sweepers
Vactor truck-mounted sewer cleaners,
hydro-excavators, and industrial vacuum
trucks
Jetstream waterblasters
FS
Depot
and
FS
Solutions
–
parts
and
service deliveries and rental center
$428MM (53% of sales)
$240MM (30% of sales)
$135MM (17% of sales)
Fire Rescue
Aerial lift access platforms for fire rescue
and wind turbine maintenance, utilities
and other industrial applications
SSG
Vehicle lights and sirens (U.S. and VAMA)
Indoor and outdoor mass warning and
notification systems (Industrial Systems
and Alerting & Notification Systems)
Victor mining and electrical safety
equipment
U.S.
6%
Non-U.S.
94%
Non-U.S.
20%
U.S.
80%
10
U.S.
58%
Non-U.S.
42% |
  Advancing
security and well-being. Diversified Product Mix
11 |
 Advancing
security and well-being. Industrial Systems
Integrated Communications
SmartMsg
Enabled Systems
ICS Integrated
Command
Solution
Indoor Warning
System
Public
Address/General
Alarm
Public Safety
Software Systems
Outdoor
Warning Systems
Interoperable
Communications
Citizen Alerting
Systems
12 |
 Advancing
security and well-being. Hydro-Excavation
Hydro-excavating through ice
13
with hot water |
 Advancing
security and well-being. Waterblasting
Hydro-demolition,
hydro-cleaning and
high pressure cleaning
14 |
 Advancing
security and well-being. Consolidated Historical Financial Performance*
($ in millions)
2010
2011
2012
Revenue
$633.1
688.7
$803.2
% Growth
--
8.8%
16.6%
COGS
482.2
533.3
613.4
Gross Profit
$150.9
$155.4
$189.8
% Margin
23.8%
22.6%
23.6%
Operating Expenses
138.5
122.2
138.3
Operating Income
$12.4
$33.2
$51.5
% Margin
2.0%
4.8%
6.4%
Interest Expense
10.2
16.4
21.4
Other Expense
1.2
0.2
4.2
Pretax Income
$1.0
$16.6
$25.9
* Consolidated financial results reflect only continuing operations of the Company
15 |
 Advancing
security and well-being. 2012 Headlines: Margin Expansion and Debt Reduction
Continued Progress on Operating Margin Targets
Complemented by Declining Leverage
Business
Segment
FY 2011
Operating
Margin
FY 2012
Operating
Margin
Margin
Targets
ESG
6.8%
9.8%
10% -
12%
Bronto
6.0%
6.6%
10% -
12%
SSG
9.7%
12.0%
14% -
16%
16
Operating Margin excludes the impact of restructuring charges in both 2011 and 2012 |
 Advancing
security and well-being. 2013 and Beyond Overview
Adjusted EPS* and Guidance
*Adjusted EPS excludes the effect of debt settlement charges
and reflects only the continuing operations of the Company.
17
Areas of Focus
Progress Toward Margin Targets
at Bronto and SSG
Accelerate Growth in Industrial
Markets
Deliver Increased Value to
Shareholders |
 Advancing
security and well-being. Industrial Business Growth Opportunities
Business Unit
Industrial
Order Mix*
Success Factors in Increasing Industrial
Mix
U.S. Industrial Systems
63%
•
Extending Leadership in Public Warning
Systems in Commercial Markets
•
Building Global Distribution Capabilities
Global Jetstream
100%
•
Global Channel Development
•
New Product-Application Development
Bronto
23%
•
North American Distribution
•
Further Exploit Utility Markets
U.S. Vactor
50%
•
Continued Investment in Efficient Capacity
•
Leverage New Application Successes (e.g.
Hydro-excavation)
* Industrial Order Mix Includes Fiscal Years 2010 through 2012
Success Factors
Complemented
by Targeted
Product Line
Acquisitions
18 |
 Advancing
security and well-being. 2010
2011
2012
Percentage of Orders from Industrial Customers*
Execution on Building Industrial Customer Mix at Bronto
*Excluding service revenue; lifts only. Data reflect revenue mix
in Euros.
19 |
 Advancing
security and well-being. Growth Strategy
Geographic Expansion
New Markets for Existing
Products
New Product
Development and
Acquisitions
20
Innovation Program
Effective use of
established platforms
Waterblasting
Hydro-excavation
Security Systems
Bronto in North America
Export markets from U.S.
Jetstream and Industrial
Systems in the Asia Pacific
and Middle East |
 Advancing
security and well-being. Building Equity in our Brands
21 |