E-ONE, which once was the country’s largest fire apparatus manufacturer, has been put up for sale by its parent company, Federal Signal Corp. of Chicago.
E-ONE lost at least $11 million in 2007 and sales were down to somewhere around 650 units from a high of more than 1,100 in the mid-1990s. The loss was despite a 50 percent sales increase and high profitability of Federal Signal’s European-made Bronto Skylift aerial and a 5 percent order increase at E-ONE during the fourth quarter, said Federal CEO James E. Goodwin.
Goodwin told financial analysts in an Internet-broadcast conference call Feb. 27 that Bronto sales in the last three months of 2007 were double that of the same period in 2006 and that 65 percent of the Bronto units are sold in Europe. Bronto has now been separated from E-ONE and will not be sold, he said.
Federal Signal is traded on the New York Stock Exchange under the symbol FSS and the stock rose $1.50 to $11.50 upon the joint announcement of 2007 results and the planned sale of E-ONE, which is based in Ocala, Fla.
Peter Guile, who became E-ONE president last July, was credited with significantly improving orders and expanding the dealer network in the last eight months. When he took over, Federal said that E-ONE had lost dealers covering 35 percent of the U.S. fire apparatus market.
Goodwin said E-ONE now has 90 percent market coverage, and orders for January 2008 were up 51 percent over January 2007.
However, Goodwin added, “The board has been concerned about the performance of E-ONE for some time and has been trying to find a recovery plan that would work.”
He said, “Although we’ve been excited about what Peter Guile has been able to do, at the end of the day we decided that the best use of capital and the best opportunity to increase shareholder value” would be to sell E-ONE.
Combined 2007 sales at E-ONE and Bronto were $330.8 million, down $54 million from 2006, producing the $11 million loss.
Federal also said it is selling the remainder of its industrial Tool Group, a division with $119 million in net sales that made a modest $6.6 million profit.
Goodwin told analysts the Federal board has hired an investment banking firm to seek buyers for E-ONE, now the third largest fire truck maker, and that “we are currently in discussion with prospective buyers.”
Reportedly, employees and E-ONE dealers were disappointed as Federal representatives gave assurances as late as January that the parent company would continue to back Guile’s recovery plan.