Federal Signal Corporation · NYSE:FSS
Federal Signal — Investor Presentation (May 2015)
26 slides from Federal Signal's investor presentation, May 11, 2015
Slide 1: Disciplined Growth Investor Presentation
Disciplined Growth Investor Presentation May 2015
Slide 2: Safe Harbor Statement
Safe Harbor Statement 2 This presentation contains unaudited financial information and forward-looking statements. Statements that are not historical are forward-looking statements and may contain words such as “may”, “will”, “believe”, “expect”, “anticipate”, “intend”, “plan”, “project”, “estimate”
Slide 3: Agenda
Agenda • Management • Company at a glance • Investment case • Performance trends • Segments and products • Growth strategy • Corporate focus, goals and initiatives • Financial results and outlook 3
Slide 4: Experienced Management Team
Experienced Management Team Dennis Martin, President and Chief Executive Officer President and Chief Executive Officer since October 2010 Previously served as Chairman, President and CEO of General Binding Corporation 35+ years operational and leadership experience, primarily at Illinois Tool
Slide 5: Federal Signal Overview
Federal Signal Overview • Founded in 1901, joined NYSE in 1969 (“FSS”) • Safety, security and environmental products and services that protect people and our planet Environmental Solutions Group (ESG) Safety & Security Systems Group (SSG) Fire Rescue Group (FRG) • Restructured for growth and p
Slide 6: Investment Case
Investment Case • Leading positions in niche governmental and industrial markets • Valuable brands, high quality products, well-established distribution • Flexible manufacturing capacity to leverage profits • Favorable market dynamics Improving municipal spend and top North American dealer network
Slide 7: Performance Levers and Progress
Performance Levers and Progress • 2010: Introduced 80/20 and continuous improvement focus Prioritized customers and suppliers Tackled proactive pricing improvements Streamlined product offerings Streamlined management structure Drove lean manufacturing efficiencies • 2012: Major reposition
Slide 8: Key Financial Trends
Key Financial Trends 8 Improving Operating Margins Solid Growth Targeting 12% Company Margin Declining Debt and Leverage 4.8% 6.6% 8.4% 10.1% 11.2% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 2011 2012 2013 2014 Q1 TTM 2015 O pe ra ti ng M ar gi n To ta l F SC C on ti nu in g O pe ra tio ns 689 803 851 919
Slide 9: Federal Signal Segments
9 Federal Signal Segments Environmental Solutions (ESG) Products Geographic Mix Q1 TTM 2015 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 r
Slide 10: Environmental Solutions Group
Environmental Solutions Group 10
Slide 11: Safety and Security Systems Group
Safety and Security Systems Group 11
Slide 12: Safety and Security Global Systems
Safety and Security Global Systems 12 SmartMsg Enabled Systems Enterprise Integrated Command Solution Sensors/Detectors Cameras Networked PAGASYS Rack Control Modules/Nodes Control Modules/Nodes Control Modules/Nodes
Slide 13: Fire Rescue Group
Fire Rescue Group 13
Slide 14: Growth Strategy
Growth Strategy 14 Geographic Expansion • Jetstream and Industrial Systems in the Asia Pacific and Middle East • Export markets from U.S. • Bronto in North America New Markets for Existing Products • Waterblasting • Hydro-excavation • Security systems New Product Development and Acquisitions • Innov
Slide 15: Growth Markets and Opportunities
Growth Markets and Opportunities • Developing growth product areas Vactor (hydro-excavation, vacuum loading and sewer cleaning) Jetstream (waterblasting) Integrated Systems (communication safety and warning systems) These predominantly industrial areas aggregate to ≈50% of total revenue* • Gro
Slide 16: Focus and Long-Term Goals
Focus and Long-Term Goals 16 Create Disciplined Growth Organic and Acquisitions Diversify Customer Base Leverage Invested Capital Improve Manufacturing Efficiencies and Costs Operating margin targets Grow revenue faster than GDP, Grow EPS at an average % rate in low to mid teens Consolidated ‒ 12% E
Slide 17: Specific Initiatives
Organic and M&A growth in industrial markets New products for utilities markets Optimize ERP System Freight cost savings Jetstream expansion Bronto U.S. industrial opportunities Flexible ESG manufacturing Up-fitting police cars New Navigator “Fire” light bar Specific Initiatives 17 New innovation te
Slide 18: Consolidated Historical Financial Performance
Consolidated Historical Financial Performance* 18 ($ in millions) 2012 2013 2014 Q1 2015 Net sales $ 803.2 $ 851.3 $ 918.5 $ 221.6 % Growth 16.6% 6.0% 7.9% Cost of sales 613.4 646.2 685.2 162.4 Gross profit $ 189.8 $ 205.1 $ 233.3 $ 59.2 % Margin 23.6% 24.1% 25.4% 26.7% Operating expenses 138.3 134.
Slide 19: EPS Trends and Outlook
EPS Trends and Outlook 19 Adjusted Earnings Per Share * * To facilitate comparisons to 2015, adjusted earnings for 2014 are $0.93 per share, which is computed after excluding the benefit from a release of valuation allowance against foreign deferred tax assets and a tax benefit associated with chang
Slide 20: Capital Allocation Priorities
Capital Allocation Priorities • Strong cash flow and flexibility TTM Q1 2015 cash flow from operating activities of $82.6 M At 0.4 times adjusted EBITDA, debt is already low • Funding of internal growth opportunities Projects leverage existing businesses and generally require limited cash inve
Slide 21: Building Equity in Our Brands
Building Equity in Our Brands 21
Slide 22: Appendix 1: Adjusted Earnings per Share
Appendix 1: Adjusted Earnings per Share * 22 * The adjusted financial measures presented above are unaudited and are not in accordance with U.S. generally accepted accounting principles (“GAAP”). The non-GAAP financial information presented herein should be considered supplemental to, and not a subs
Slide 23: Appendix 2: Total Debt to Adjusted EBITDA
Appendix 2: Total Debt to Adjusted EBITDA 23 The Company uses the ratio of total debt to adjusted EBITDA as one measure of its long-term financial stability. The ratio of debt to adjusted EBITDA is a non-GAAP measure that represents total debt divided by the trailing 12-month total of income from co
Slide 24: Appendix 3: Estimated Global Sales
63%17% 19% 1% Sales of domestic subsidiaries within U.S (in US $) Sales of domestic subsidiaries outside of U.S (in US $)* Sales of non-U.S. subsidiaries outside of U.S (in local currency) ** Sales of non-U.S. subsidiaries to U.S (in US $) Estimated annual sales allocations as of December 31,2014 *
Slide 25: Federal Signal
|p FEDERAL SIGNAL Protecting people and our planet
Slide 26: Protecting people and our planet
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