Federal Signal Corporation · NYSE:FSS
Federal Signal — Q4 2008 Earnings Presentation
23 slides from Federal Signal's earnings presentation, Feb 26, 2009
Slide 1: Federal Signal Earnings Release - Q4 & FY 2008 Financial Review - Strategy Discussion
Federal Signal Earnings Release - Q4 & FY 2008 Financial Review - Strategy Discussion Bill Barker & Bill Osborne February 26, 2009
Slide 2: 2008 Q4 P&L
2008 Q4 P&L (Sin mitons, except per share data) @TR Dec 31 Dec 3t 2008 2007 Net Sales s 2538 $ 255.1 Cost of sales (184.6) (187.9) Operating expenses (622) (45.9) Restructuring charges 27) Operating income 143 213 Interest expense (26) (61) Loss on investment in joint venture (14.1) (1.5) (Other (ex
Slide 3: Segment P&Ls
Segment P&Ls cry FY Group results: Dec 34 Dec 34 Dec 31 Dec 34 (inmilions) 2008 2007 2008 2007 SSG: Orders S$ 861 $s 879 $3674 $ 3675 Net Sales 95.9 98.2 3718 367.2 Operating Income 128 134 40.3 496 Operating Margin 13.3% 13.3% 10.8% 13.5% Backlog $ 510 S$ 612 FRG: Orders $267 $422 $ 1623 $1744 Net
Slide 4: 2008 Full Year P&L
2008 Full Year P&L (Sin milions, except per share data) FY Dec 31 Dec 34 2008 2007 Net Sales s 588 $ 934.3 Cost of sales (706.9) (685.9) Operating expenses (193.7) (1732) Restructuring charges 27) Operating income 555 75.2 Interest expense (15.3) (18.5) Loss on investment in joint venture (13.0) 63)
Slide 5: Full Year Balance Sheet - 2008 vs. 2007
Full Year Balance Sheet - 2008 vs. 2007
Slide 6: Strategic Update: The Path to Consistent Profitable Growth
6 Supplement to 4th Quarter 2008 Earnings Call Strategic Update: The Path to Consistent Profitable Growth
Slide 7: Established A Foundation for Growth
7 Established A Foundation for Growth Divested non-core businesses: E-ONE; Tool; Finance - Leasing; Refuse Invested in high growth opportunities: Public Safety Systems platform Divestiture proceeds funded PIPS, Riverchase & Codespear acquisitions Improved financial flexibility and balance sheet heal
Slide 8: Strategy to Achieve Consistent Profitable Growth
8 Strategy to Achieve Consistent Profitable Growth
Slide 9: I. Increase Margins on Legacy Businesses
9 I. Increase Margins on Legacy Businesses Environmental Solutions Group (ESG): Streamline product offering Reduce product design costs Consolidate excess capacity Safety and Security Systems Group (SSG) Outsource non-core manufacturing Consolidate excess capacity Simplify business structure Bronto:
Slide 10: II. Drive Growth through Public Safety Systems Platform
10 II. Drive Growth through Public Safety Systems Platform PIPS technologies provide unmatched value proposition Strategic evolution leveraging status as recognized leader in the Public Safety and Intelligent Transportation Systems industry Brand strength Attractive growth profile Capitalize on grow
Slide 11: Environmental Solutions Group: Market-Leading Brands and Products
11 Street Sweepers Sewer Cleaners Combination Cleaners Catch Basin Cleaners Jetting Units Hydroexcavators Industrial Vacuum Loaders Waterblasters Market Share #2 Globally & #1 North America -Street Sweepers #2 Europe; #1 Benelux - Compact Sweepers #1 Globally & #1 North America - Truck Mounted Sewer
Slide 12: ESG Initiatives To Accelerate Growth & Increase Margins
12 ESG Initiatives To Accelerate Growth & Increase Margins Continue Jetstream expansion and development of international distributor base International distributors adding assembly options around Jetstream product - ESG focusing on core competency of machining of pumps and valves Waterblasting super
Slide 13: Bronto Initiatives to Accelerate Growth & Increase Margins
13 Bronto Initiatives to Accelerate Growth & Increase Margins Bronto has already seen margin improvement from capacity expansion Will continue margin improvement efforts Increase sourcing in low cost countries for fabricated parts Will drive further margin improvement Pursue opportunities in North A
Slide 14: Public Safety Networks Defined
14 A network of devices providing monitoring services across the entire geography of a jurisdiction Alerting and notification capability Data storage and management Data mining and reporting Networked into existing infrastructure Public Safety Networks Defined
Slide 15: PIPS: Propelling Public Safety Systems Growth
15 PIPS: Propelling Public Safety Systems Growth Key to the Federal Signal's Market Leadership High growth business H2 2008 growth for PIPS + 46% Law enforcement is fast becoming an IT based business Interoperability in communications still driving federal and state spending FSS is uniquely position
Slide 16: PIPS Applications: Current & Future Potential
16 PIPS Applications: Current & Future Potential Applications Current PIPS Applications Parking scofflaw enforcement Enforcement of outstanding registrations, vehicle taxes and insurance Tollway enforcement Congestion charging Green lane enforcement Stolen vehicle recovery Major event management Amb
Slide 17: PIPS Case Studies: Unmatched Technology & Credibility
17 PIPS Case Studies: Unmatched Technology & Credibility Increasing Customer Acceptance City of Cincinnati Full network to be deployed in 2009 DHS approved multi-year contract: -- Template for services contract in future -- Funding process-expertise will allow PSS to help customers more readily obta
Slide 18: Market Opportunity: Significant Global Funding
18 Market Opportunity: Significant Global Funding Case Study: State and Local Grant Programs In the U.S., for instance, Federal Signal's Public Safety product suite is eligible for significant funding at the State & Local Level (excluding Federal Level expenditures and impact of 2009 US stimulus pla
Slide 19: Customer Value Proposition Enhanced with Services Model
19 Customer Value Proposition Significantly Enhanced with "Services" Model Historically, Public Safety's sales model revolved around discrete sales of hardware products A service delivery model will be based on offering customers the full suite of product capabilities in exchange for recurring futur
Slide 20: Public Safety Systems Services Model
20 Public Safety Systems Services Model Federal Signal Benefits: Increased Revenue Growth & Visibility Recurring revenue vs. one-time discrete product sale Revenue growth over-time through: Expanding application & service offerings Revenue sharing opportunities (e.g., speed enforcement, etc.) Highly
Slide 21: Summary: The Path to Consistent Profitable Growth
21 Summary: The Path to Consistent Profitable Growth I. Increase Margins on Legacy Businesses Through Reducing Complexity & Streamlining Operations II. Drive Growth Through Public Safety Platform
Slide 22: Conclusion and Q&A
Conclusion and Q&A fs FEDERAL SIGNAL | Advancing security and wellbeing.
Slide 23: Vision
Vision Federal Signal ... the leader in advancing security and well-being for communities and workplaces around the world.