Federal Signal Corporation (NYSE:FSS) Q3 2023 Earnings Call Transcript

Jennifer Sherman: Yes, it’s a number of things. One is, I think the number of use cases continues to increase, and that’s encouraging. We continue to focus on product demos. Our dealers have done a really nice job of educating the market about that. And again, we look at — it’s not a coincidence that our largest install base is in Ontario, Canada, where it’s mandated in some applications. And in the U.S., 19 states plus OSHA have recognized it as the best practice, but we believe that we are still in very early adoption phase in the U.S. and we think a combination of regulation, increased use cases, insurance and some of the government funding that’s going to be available over the next several years that this will be continue to see some really nice growth for our hydro excavation product line.

Greg Burns: All right. Great. Thank you.

Operator: The next question comes from Dave Storms with Stonegate Capital Markets. Please go ahead.

Jennifer Sherman: Good morning, Dave.

Unidentified Analyst: Good morning. This is John James [ph] stepping in for Dave.

Jennifer Sherman: Good morning.

Unidentified Analyst: So you touched on the 80/20 initiatives early in the call. It is good to hear about the cost savings. Can you talk about which those are structural, which ones are more temporary, discretionary?

Jennifer Sherman: Yes. I think one of the critical initiatives we have in 2023 at Federal Signal Corporation is we’ve hired a dedicated resource. We have a cross-functional team, and we are codifying the Federal Signal operating model, which includes our 80/20 initiative, our series of constraints and our lean initiative. So we are really excited about kind of this next phase in our continuous improvement journey. And it is one of the factors as we looked at raising those margin targets that we are going to look at an annual basis through the cycle, it was an important catalyst, we think, for kind of future efficiency going forward.

Unidentified Analyst: Got it. All right. Thank you. Very helpful. I will step out.

Ian Hudson: Thanks, John.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Jennifer Sherman for any closing remarks.

Jennifer Sherman: Thank you. In closing, as we enter this Thanksgiving season, I want to spend a moment to thank our dedicated employees, loyal customers and dealers and distributors. Collectively, we remain committed to continuing to improve shareholder value. Thank you for joining us today, and we’ll talk to you soon.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.