CEO: Lower municipal spending is Federal Signal's biggest concern

Federal Signal Corp. (NYSE:FSS) interim president and CEO James Goodwin said the company is closer to finding a new CEO and is in advanced discussions to sell E-One, a maker of fire trucks and mission-critical vehicles. Federal Signal makes a variety of products including street cleaning equipment and security systems for municipal, government and other customers. Goodwin made the comments during a midday conference call.

The interim chief executive recognized difficult conditions in the wider economy.

“While we made significant progress on a number of fronts, I would be remiss if I didn’t acknowledge the macroeconomic headwinds and softening domestic economy, which began to adversely impact several of the markets we serve in the first quarter,” he said. “Our biggest concern today is the decline in municipal spending in North America.”

Municipal spending lags recovery in the general economy because of the delay in tax receipts and the mechanics of municipal budgeting processes, he said. Some municipal customers have begun to delay orders “until visibility improves,” Goodwin said.
 
Former CEO Robert Welding resigned on Dec. 12 in order to retire from the company. Welding joined Federal Signal in 2003. Since Welding took the helm, Federal Signal’s stock price has been down about 35%.

“We are making progress identifying a world-class candidate to lead the company in the coming years,” Goodwin said. “Given the interest level of some highly qualified candidates to whom we have been speaking, I would expect we will be . . .

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