Federal Signal Corporation · NYSE:FSS
Federal Signal — Investor Presentation (September 2005)
23 slides from Federal Signal's investor presentation, Sep 28, 2005
Slide 1: Federal Signal Corporation September 2005
Federal Signal Corporation September 2005
Slide 2: Safe Harbor
This presentation may contain material non-public information about the company. This presentation therefore may not be distributed, reproduced or used without the express written consent of the company. Use or disclosure of material non-public information by the recipient of this presentation or an
Slide 3: Investment Appeals
Investment Appeals Strong market positions, brands and distribution channels Diverse, strong markets: municipal, industrial, international Restructuring efforts are progressing Disciplined, focused management team Strengthening balance sheet Continued strong and steady cash flows New vision, mission
Slide 4: Company Overview
Company Overview Key Statistics 6,000 employees; operates manufacturing facilities in 42 plants around the world in 12 countries $1.1B in revenue last year Stock trades on NYSE under ticker symbol FSS Key Competitive Advantages Rich 100+ year history Majority of products hold #1 and #2 positions in
Slide 5: Diversity of Revenue
Diversity of Revenue Fire Rescue Safety Environmental Tool 2004 0.32 0.22 0.32 0.14 Based on December 31, 2004 year-end figures U.S. Municipal U.S. Commercial / Industrial Non-U.S. 2004 0.38 0.31 0.31
Slide 6: FSS Orders by Market Segment
FSS Orders by Market Segment FEDERAL SIGNAL
Slide 7: Operating Groups
Operating Groups Fire Rescue Environmental Products Safety Products Tool
Slide 8: Fire Rescue Group Sales vs. Operating Margin
Fire Rescue Group Sales vs. Operating Margin Sales ($M) Operating Margin (%) 1st Qtr 2002 334 3.4 2003 416 3.5 2004 361 -4.9 Operating margin excludes adverse impact of restructuring cost Sales OM% 2004 Q1 68 -4.6 2004 Q2 96 0.6 2004 Q3 81 -5.6 2004 Q4 117 -9.2 2005 Q1 71 -4.5 2005 Q2 101 0.7 Full Y
Slide 9: Strong Backlog
Strong Backlog Q1 '00 Q2 '00 Q3 '00 Q4 '00 Q1 '01 Q2 '01 Q3 '01 Q4 '01 Q1 '02 Q2 '02 Q3 '02 Q4 '02 Q1 '03 Q2 '03 Q3 '03 Q4 '03 Q1 '04 Q2 '04 Q3 '04 Q4 '04 Q1 '05 Q2 '05 FRG 226 220 210 234 225 209 215 241 245 278 298 282 267 251 229 246 261 271.6 257.2 250.9 263.7 245.9 Total Backlog 112 113 103 106
Slide 10: Fire Rescue Progress Update
New order bookings are strong and we have added three key new dealers. Revenues have surpassed comparable prior year periods for the past three quarters. Gross margins have improved. Material cost escalation has been addressed through increased prices. Implementation of a product configurator is on
Slide 11: Environmental Products Group
Environmental Products Group Eighty percent of EPG sales is from strong performing businesses: street sweepers, sewer cleaners, vacuum trucks and waterblasters. Twenty percent is from the underperforming Refuse division. Sales ($M) Operating Margin (%) Operating margin excludes adverse impact of res
Slide 12: Refuse Turnaround Update
Refuse Turnaround Update Improvements Consolidated production locations Implemented factory floor improvements at Medicine Hat facility Rationalizing product line Implemented price increases to address higher material costs Developing low cost outsourcing opportunities Entered into joint venture agr
Slide 13: Safety Products Group
Safety Products Group Sales ($M) Operating Margin (%) Sales vs. Operating Margin 1st Qtr 2002 270 15.3 2003 278 11.4 2004 249 13.2 2005 Q1 70 12.1 2005 Q2 69 12.1 Update Strong revenue and income Positioned well for additional airport parking business Police lights and sirens continuing to gain shar
Slide 14: Tool Group Update
Tool Group Update Continues to provide strong and consistent cash flow and earnings Approximately 40% of sales related to automotive industry Weakness in Japanese and Canadian markets Surcharges implemented to offset escalating tool steel costs Shifting manufacturing footprint to reduce fixed costs
Slide 15: Strategic Overview
Strategic Overview Phase 1 Shrink to grow - exited non-strategic businesses through a combination of divestitures, plant consolidations and product rationalizations Fix underperforming businesses - improve operational results in problem businesses (e.g., FRG, Refuse, parking systems) Phase 2 Positio
Slide 16: Financial Performance
Financial Performance $ millions (except per share data and ratios) 2002 2003 2004 Q2 2004 Q2 2005 Sales 1,002 1,151 1,139 291 316 EPS - continuing ops .95 .73 (.26) (.07) .23 EPS - excl. restructuring .95 .76 (.01) (.07) .23 PWC % 22.4% 23.3% 24.6% 24.4% 20.6% Operating Cash Flow 102.1 70.3 52.5 6.
Slide 17: Gross Margins 2003-2005
Gross Margins 2003-2005 First quarter was an important inflection point for our troubled businesses.
Slide 18: Primary Working Capital
Primary Working Capital PWC% increase in 2004 largely due to Ocala production problems 2005 improvement primarily driven by lower receivables; inventory reduction expected in the second half. PWC (%) PWC ($M)
Slide 19: 2005 Outlook
2005 Outlook 2004 2004 2005 2005 Environmental Products Group 1H 2H 1H 2H est. Revenue 186 181 203 205-215 Operating Margin 3% -1% 2% 0-2% Fire Rescue Group Revenue 163 198 172 205-220 Operating Margin -2% -8% -2% 3-5% Safety Products Group Revenue 117 132 139 135-145 Operating Margin 11% 15% 12% 14
Slide 20: Hurricane Impacts
Hurricane Impacts Long term, hurricane related activities should add business. Federal Signal is uniquely positioned to assist with recovery efforts: street sweepers vacuum trucks sewer cleaners refuse truck bodies waterblasting equipment police lights and sirens damaged vehicle fleets parking contr
Slide 21: Longer Term Outlook
Longer Term Outlook Longer Term Environmental Products Group Operating Margin 7-8% Fire Rescue Group Operating Margin 9-10% Safety Products Group Operating Margin ~15% Tool Group Operating Margin 13-15%
Slide 22: Investment Appeals
Investment Appeals Strong market positions, brands and distribution channels Diverse, strong markets: municipal, industrial, international Restructuring efforts are progressing Disciplined, focused management team Strengthening balance sheet Continued strong and steady cash flows New vision, mission
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