Federal Signal Corporation designs and manufactures a suite of products and integrated solutions for municipal, governmental, industrial, and commercial customers primarily in the United States, Europe, and Canada. It operates in two segments, Environmental Solutions Group and Safety and Security Systems Group. The Environmental Solutions Group segment manufactures and supplies a range of street sweeper vehicles, sewer cleaner and vacuum loader trucks, hydro-excavation trucks, and water blasting equipment under the Elgin, Vactor, Guzzler, and Jetstream brand names. This segment also engages in the sale of parts, service and repair, equipment rentals, and training under the FS Solutions brand. The Safety and Security Systems Group segment provides systems and products for campus and community alerting, emergency vehicles, first responder interoperable communications, and industrial communications, as well as command and municipal networked security. This segment sells its products primarily under the Federal Signal, Federal Signal VAMA, and Victor brand names. The company sells its products through dealers, direct sales, and wholesalers and distributors, as well as independent foreign distributors. Federal Signal Corporation was founded in 1901 and is headquartered in Oak Brook, Illinois.
(Summary) (Company) (Chart)
11 July 2016
1yr Target $14.00
Payout Ratio 28.86%
1yr Cap Gain 3.55%
1yr Tot Return 5.62%
EPS (ttm) $0.97
EPS next yr $0.85
Forward P/E 15.85
EPS next 5yr 15.00%
1yr Price Support $12.75
Market Cap $839.59 Mil
Revenues $719.20 Mil
Earnings $61.30 Mil
Profit Margin 8.52%
Quick Ratio 2.00
Current Ratio 3.10
1yr RevGR -1.43%
3yr RevGR -1.47%
5yr RevGR 3.93%
1yr EarnGR 0.00%
3yr EarnGR ---
5yr EarnGR ---
1yr DivGR 188.88%
3yr DivGR ---
5yr DivGR 1.61%
Federal Signal Corporation, founded in 1901, was reincorporated as a Delaware corporation in 1969. The Company designs and manufactures a suite of products and integrated solutions for municipal, governmental, industrial and commercial customers. The Company’s portfolio of products includes sewer cleaners, vacuum trucks, street sweepers, waterblasters, safety and security systems, including technology-based products and solutions for the public safety market. In addition, they sell parts and provide service, repair, equipment rentals and training as part of a comprehensive offering to our customers. Federal Signal Corporation and its subsidiaries operate nine principal manufacturing facilities in four countries around the world and provide products and integrated solutions to customers in all regions of the world.
Products manufactured and services rendered by the Company are divided into two major operating segments: the Environmental Solutions Group and the Safety and Security Systems Group. The individual operating businesses are organized as such because they share certain characteristics, including technology, marketing, distribution and product application, which create long-term synergies. Corporate contains those items that are not included in our operating segments.
Environmental Solutions Group
The company's Environmental Solutions Group is a leading manufacturer and supplier of a full range of street sweeper vehicles, sewer cleaner and vacuum loader trucks, hydro-excavation trucks and high-performance waterblasting equipment. Products are sold to both municipal and industrial customers under the Elgin, Vactor, Guzzler and Jetstream brand names. The Group manufactures vehicles and equipment in the United States.
Under the Elgin brand name, the Company sells a leading U.S. brand of street sweepers primarily designed for large-scale cleaning of curbed streets, parking lots and other paved surfaces utilizing mechanical sweeping, vacuum and recirculating air technology. Vactor is a leading manufacturer of vacuum trucks used to maintain sewer lines, catch basins and storm sewers, as well as hydro-excavation trucks to meet the need for safe and non-destructive excavation. Guzzler is a leader in industrial vacuum loaders used to manage industrial waste or recover and recycle valuable raw materials. Jetstream manufactures high pressure waterblast equipment and accessories for commercial and industrial cleaning and maintenance operations.
In addition to equipment sales, the Group engages in the sale of parts, service and repair, equipment rentals and training as part of a complete offering to its customers under the FS SolutionsSM brand.
Safety and Security Systems Group
The company's Safety and Security Systems Group is a leading manufacturer and supplier of comprehensive systems and products that law enforcement, fire rescue, emergency medical services, campuses, military facilities and industrial sites use to protect people and property. Offerings include systems for campus and community alerting, emergency vehicles, first responder interoperable communications and industrial communications, as well as command and municipal networked security. Specific products include vehicle lightbars and sirens, public warning sirens, general alarm systems, public address systems and public safety software. Products are sold under the Federal SignalTM, Federal Signal VAMATM and VictorTM brand names. The Group operates manufacturing facilities in the U.S., Europe and South Africa.
Customers and Backlog
Total orders in 2015 were $686.1 million, of which approximately 47% were to U.S. municipal and governmental customers, 26% were to U.S. commercial and industrial customers and 27% were to non-U.S. customers. No single customer accounted for 10% or more of the Company’s business.
During 2015, the Company’s U.S. municipal and governmental orders decreased by 11% compared to 2014 levels, primarily attributable to fewer large fleet orders for street sweepers and sewer cleaners. During 2014, the Company’s U.S. municipal and governmental orders increased by 21% compared to 2013, primarily driven by improved orders of our street sweeper and sewer cleaner products and generally solid municipal demand.
During 2015, the Company’s U.S. commercial and industrial orders decreased by 30% from 2014, in large part due to lower vacuum truck orders, which were adversely impacted, directly and indirectly, by softness in oil and gas markets and, to a lesser extent, other industrial markets. During 2014, the Company’s U.S. commercial and industrial orders increased by 14% when compared to 2013 levels, largely attributable to higher orders of vacuum trucks, including hydro-excavation products.
During 2015, the Company’s non-U.S. orders decreased by 3% from 2014. This compared to an increase of 5% in non-U.S orders in 2014 versus 2013. Non-U.S. municipal and governmental markets are similar to the U.S. municipal and governmental markets in that they are largely dependent on tax revenues to support spending and orders may be subject to public-entity bid procedures. Of the Company’s non-U.S. orders received in 2015, there were approximately 41% from Canada, 26% from Europe, 17% from the Middle East and Africa and less than 10% from any other particular region.
The Company’s backlog totaled $171.3 million at December 31, 2015 compared to $254.7 million at December 31, 2014. Backlogs vary by Group due to the nature of the Company’s products and the buying patterns of its customers. The Environmental Solutions Group has experienced an average backlog that can range from four to five months of shipments and the Safety and Security Systems Group typically experiences an average backlog of approximately two months of shipments. Production of the Company’s December 31, 2015 backlog is expected to be substantially completed during 2016.
Elgin. Recognizing the health hazards of inadequate street sanitation, Elgin, IL resident and inventor John Murphy designed the first motorized street sweeper in 1914. Since then, Elgin’s product line has grown to offer the latest sweeping technologies with Murphy’s original commitment to sustainability and the environment as the foundation of Elgin Sweeper’s mission.
FS Global Solutions. Federal Signal Global Solutions division is a leading supplier of communication and security equipment systems for offshore, marine, industrial and municipal facilities. Our intuitive systems include interoperable alerting and notification solutions with a modular design methodology that allows systems to be deployed separately or collectively.
FS Industrial. Federal Signal’s industrial product line is universally recognized as both the broadest and the most comprehensive with greater product selection and more design options. Federal Signal offers audible and visual signaling, outdoor warning, intercoms, public address, telephony, initiating systems, and more. In terms of complete and extensive product coverage, no one even comes close to beating Federal Signal.
FS Public Safety Systems. It is Federal Signal’s commitment to engineer the most reliable and high-performing products possible for emergency and work truck vehicles. Federal Signal specializes in emergency and warning lights, sirens, in-car video, back-up cameras and alarms, directional lighting, and tire deflation devices.
FS Solutions. Staffed with skilled, factory-trained technicians, FS Solutions centers provide parts, service, and rebuilds for most makes and models of industrial vacuum loaders, vacuum excavators, and water blasters. We also offer a large selection of used and refurbished vacuum trucks, water blast rentals, OEM parts, automation tools, and a full line of job skills and safety training.
FS Vama. Federal Signal Vama is the European unit of Federal Signal Corporation with more than 30 years’ experience in providing solutions for emergency services, rapid response, and risk reduction. Federal Signal Vama is based in Spain and has regional sales offices in Great Britain, Italy, and Poland as well as a distributor network that services almost every country in Europe.
Guzzler. Guzzler Manufacturing has been building and improving vacuum loaders for over 40 years. Guzzler products are designed to vacuum and off-load a full spectrum of materials often in hard to reach areas – from solids and dry bulk powders to liquids, slurries, and thick sludge– in industrial areas such as cement plants, steel mills, railroads, oil refineries, chemical plants, foundries, and power-generating stations.
Jetstream. Jetstream, founded in 1976, has pioneered the development of many products that are now considered industry standards, such as the UNx® water blast pumps, replaceable cartridge for guns and control valves, the Orbi-Jet™ self-rotating surface cleaning nozzle, and the Guardian water tank and filter system with an integrated design for extended system life and on-site operating time.
Vactor. For more than 100 years, Vactor Manufacturing has provided customers around the world with a wide range of material handling equipment. Originally founded in Chicago in 1911 as the Myers-Sherman Company, a manufacturer of pneumatic farm equipment, Vactor Manufacturing has evolved to become the industry leader in sewer and catch basin cleaners, industrial vacuum loaders and vacuum excavators.
Victor. Victor Products Ltd is the world’s leading manufacturer of electrical connectors and LED lighting for the global coal mining industry. The solutions provided by Victor Products enable miners to advance safety measures and increase productivity.
This company has two things going for it and that's just not enough incentive for me to get overly excited at this point. Those two things are its low P/E ratio and it's incredible asset ratios and zero debt levels. If those two things had been backed up by additional fundamentals this company may have ended up on my buy list. But with very little estimated one year total return based upon only one analyst, I just can't get behind this company at this point in time.
Obviously it'll end up on my watch list but that's where it'll probably stay for now. At this point in time there's just too many other places to invest what little funds I have. Hopefully at some point in time this company will start to pull in a single direction higher and become a little more appealing to me.