Federal Signal Corp. Q3 2009 Earnings Call Transcript

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2009-11-03 13:09:22.0

Tags: Revenue, Federal Signal Corp., Call Transcript, Order, Earnings, Bronto, Operational Accounting, Currency & Foreign Exchange, Finance, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions). Your first question comes from Charles D. Brady – BMO Capital Markets.

Charles D. Brady – BMO Capital Markets

Could you just give me more granularity on the foreign exchange impact not only to Bronto, but to the other two businesses as well?

William Barker

The impact at Bronto on the revenue line was about $1 million. ESG was about flat not a lot of impact there, and SSG was around $1 million as well.

Charles D. Brady – BMO Capital Markets

And tax rate in Q4 that we should be looking at?

William Barker

Probably something in the low 20s. I'm sorry, that's a full year number. It's probably more in the mid-20s for Q4. Full year would be more about 22%.

Charles D. Brady – BMO Capital Markets

Then just looking at the order trends, in your prepared remarks your comments with it, you expect sequentially to see orders up in most of your businesses. Can you give me any more granularity on that as far as I guess importantly which businesses you still think are having the most trouble? And I guess given that some of your businesses are pretty short cycle, where are you picking up that sort of, is it inquiry levels, or where are you getting that comfort level that you'll see sequential order increases?

William Osborne

Well, a couple of questions embedded there. The business obviously with the shortest order to delivery cycle is safety and security group, and we have seen an uptick in orders in October so far this year for safety and security. So we expect to see a bit of improvement there.

In the ESG group, that's obviously a much longer lead time business and very heavily exposed to U.S. municipal spending. We haven't seen as strong an increase at ESG. And I might point out that we expect ESG will lag slightly in the recovery of our other businesses given its exposure to U.S. municipal spending.

We've seen continued strength in Bronto orders. We saw a 24% increase quarter-to-quarter sequentially. And we're seeing early indications in the fourth quarter of strong orders for Bronto as well.

Operator

Your next question comes from Walt Liptak – Barrington Research.

Walt Liptak – Barrington Research

You may have addressed this already, but I wanted to know about the fire rescue group, the Bronto group, the $27 million in revenue. Was there a push out in orders or in shipments, I mean?

 

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