Federal Signal Corporation · NYSE:FSS
Federal Signal — Investor Presentation (May 2014)
22 slides from Federal Signal's investor presentation, May 2014
Slide 1: Disciplined Growth – Investor Presentation May 2014
Disciplined Growth Investor Presentation May 2014
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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 overview Investment case Performance trends Growth strategy Segments and products 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 Company Overview TTM Net Sales by Segment, $ Millions (As of 3/31/14) Fire Rescue Founded in 1901, joined NYSE in 1969 (“FSS”) Group 16% Safety, security and environmental products and $134 services that protect people and our planet Environmental Solutions Group (ESG)
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 • Growing higher-margin industrial ma
Slide 7: Performance Levers and Progress
Performance Levers and Progress 2010: Introduced “80/20” education and initiatives 2011-14: Driving continuous improvement in all businesses • Prioritizing customers and suppliers • Tackling proactive pricing improvements • Streamlining product offerings • Streamlining management structure • Cre
Slide 8: Margin Expansion and Debt Reduction
Margin Expansion and Debt Reduction Margins improving and targeted higher…. FY 2011 FY 2012 FY 2013 TTM Q1 2014 10.0% 8.4% 8.4% Total FSC Continuing Operations Business Operating Operating Operating Operating Margin Segment Margin Margin Margin Margin Targets 8.0% 6.6% Operating Margin ESG 6.8% 9.8%
Slide 9: Growth Strategy
Growth Strategy Geographic Expansion New Markets for Existing New Product Products Development and • Jetstream and Industrial Acquisitions Systems in the Asia Pacific • Waterblasting and Middle East • Innovation program • Hydro-excavation • Export markets from U.S. • Leverage use of • Security syste
Slide 10: Growth Markets and Opportunities
Growth Markets and Opportunities Developing growth product areas • Vactor (hydro-excavation and sewer cleaning) • Jetstream (waterblasting) • Global Systems (integrated communication safety systems) These predominantly industrial areas aggregate to ≈50% of total revenue* Growth opportunities • U
Slide 11: Federal Signal Segments
Federal Signal Segments Environmental Systems (ESG) Safety and Security (SSG) Fire Rescue (FRG) Elgin street sweepers Vehicle lights and sirens (U.S. and Vama) High-reach aerial lift access platforms for Products Vactor truck-mounted sewer cleaners, Indoor and outdoor mass warning and fire
Slide 12: Environmental Solutions Group
Environmental Solutions Group 12
Slide 13: Safety and Security Group
Safety and Security Group FEDERAL SIGNAL Protecting people and our planet fa@f FEDERAL SIGNAL Safety and Security Systems Public Safety Systems faa FEDERAL SIGNAL Safety and Security Systems Alerting & Notification FEDERAL SIGNAL Safety and Security Systems Industrial fi FEDERAL SIGNAL VAMA Safety a
Slide 14: Safety and Security Global Systems
Safety and Security Global Systems Control Modules/Nodes Control Modules/Nodes Sensors/Detectors Control Modules/Nodes Cameras SmartMsg Enabled Systems Enterprise Integrated Command Solution Networked PAGASYS Rack 14
Slide 15: Fire Rescue Group
Fire Rescue Group BRONTO* SKYLIFT fF FEDERAL SIGNAL Protecting people and our planet
Slide 16: Focus and Goals
Focus and Goals Create Disciplined Growth Organic and Acquisitions High single-digit % EPS growth Leverage Grow Diversify Invested Capital Shareholder Customer Base Value Sequential improvement Accelerate industrial in ROIC revenue growth Improve Manufacturing Efficiencies and Costs Operating margin
Slide 17: Specific Initiatives
Specific Initiatives Core “tuck-in” New Navigator acquisitions “Fire” light bar Up-fitting police cars Leverage core competencies Create Disciplined New innovation Jetstream Growth teams and focus expansion Organic and Acquisitions New line Organic and M&A at Vactor Streamlined Global Engineering gr
Slide 18: Consolidated Historical Financial Performance
Consolidated Historical Financial Performance ($ in millions) 2011 2012 2013 Q1 2014 Net sales $ 688.7 $ 803.2 $ 851.3 $ 200.2 % Growth 8.8% 16.6% 6.0% Cost of sales 533.3 613.4 646.2 153.4 Gross profit $ 155.4 $ 189.8 $ 205.1 $ 46.8 % Margin 22.6% 23.6% 24.1% 23.4% Operating expenses 122.2 138.3 13
Slide 19: EPS Trends
EPS Trends Adjusted Earnings Per Share * $ per share 0.90 0.79 or Full Year 0.80 more 0.70 0.60 0.50 0.40 0.67 0.30 0.20 0.35 0.10 0.19 0.12 Q1 0.00 YR 2011 YR 2012 YR 2013 YR 2014 * To facilitate comparisons to 2014, adjusted earnings for 2013 are $0.67 per share, which is computed by excluding spe
Slide 20: 2014 Outlook
2014 Outlook EPS target of at least $0.79 Improvement of 18% or more over 2013 normalized EPS Upside based on market conditions Quarterly Dividend Reinstated quarterly dividend in April 2014 (payable 6/3/2014) $0.03 per share Share Repurchase Program Recently announced authorization
Slide 21: Building Equity in Our Brands
Building Equity in Our Brands 21
Slide 22: Appendix 1: Adjusted Earnings per Share
Appendix 1: Adjusted Earnings per Share * ($ in millions) 2011 2012 2013 Q1 2014 Income (loss) from continuing operations $ 13.1 $ 22.0 $ 160.2 $ 7.6 Add (less): Income tax expense (benefit) 3.5 3.9 (107.2) 4.2 Income (loss) before income taxes 16.6 25.9 53.0 11.8 Add (less): Restructuring - 1.4 0.7