Good day, ladies and gentlemen, and welcome to the third quarter 2008 Federal Signal earnings conference call. My name is Natasha and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of this conference. (Operator instructions) I would now like to turn the call over to Ms. Stephanie Kushner, Senior Vice President and Chief Financial Officer. Please proceed.

Thank you, Natasha. Good morning everyone and welcome to Federal Signal’s third quarter 2008 conference call. Joining me on the call today are Jim Goodwin, one of our Board members and Bill Osborne, our recently appointed President and Chief Executive Officer. Before we begin, I will remind you that some of our comments may contain forward looking statements that are subject to the safe harbor language found in today’s news release and in Federal Signal’s filings with the Securities and Exchange Commission. These documents are available on our Web site federalsignal.com and we will be filing our 10-Q shortly. Now I will turn it over to Jim to begin.

Thank you, Stephanie, and good morning to everyone. Welcome to Federal Signal’s third quarter 2008 conference call. During the call today, I will take a few moments to provide a brief update on our strategic initiatives and the current environment. Next Bill Osborne, our newly appointed Chief Executive Officer, will provide a detailed business update as well as his initial observations since joining Federal Signal six weeks ago, and then Stephanie will provide a more detailed discussion of our quarterly results, and finally we will wrap up with questions from our listeners. First, I want to take a moment to say that it has been a privilege to serve as Interim CEO over the past three quarters. With the support of a seasoned hands-on-board and a strong management team, I am happy to have been leading Federal Signal during this important time. While we still have much to do to leverage our new position in the market, we now hold a solid collection of stable businesses that provide a solid foundation for long-term shareholder value creation. I look forward to actively contributing to the company’s future success as a board member and I know I speak for the rest of the board in saying that we are delighted to have Bill Osborne take over the leadership role of the company. I will properly introduce Bill in just a moment but first let me provide a brief update on our progress during the third quarter. During my tenure, we made a number of changes in order to reshape and strengthen the company. As announced, we closed the E-ONE transaction in August of this quarter. The timing and the circumstances of the E-ONE sale look increasing fortuitous with the benefit of hindsight. We were able to extract $36 million of working capital…

Thank you, Jim, for your kind introduction. Before I get underway I just want to thank you Jim for all your hard work and outstanding contribution serving as Interim CEO during a critical time for the company. I certainly appreciate your support and look forward to continuing the work closely with you and the rest of the board. I would like to start out today by reminding everyone why I joined Federal Signal in the first place. I joined the company because I saw tremendous opportunity to create value. Federal Signal is a great company with a rich history, strong positions in a number of diverse markets, durable customer relationships, and a high degree of product innovation. I would like to give you all some perspective on what I have been doing over the past few weeks since I joined Federal Signal. It certainly has been an exciting time stock market dynamics aside. I have been out on the road meeting with our customers both domestically and around the globe. Without exception our customers have confirmed that Federal Signal is a leader in the markets in which we operate. We are viewed as product innovators and as a reliable trusted partner by our customers. I have also travelled around meeting with our employees, assessing our facilities, our working practices, and our products. Our employees around the world continue to work diligently to ensure we are able to deliver on current and future commitments and I have been impressed with many of the team members that I have met. We have a strong team that does an excellent job for Federal Signal and our customers each and every day. Over the past few weeks I have asked a lot of questions and done a lot of listening. I see a lot…

Thank you, Bill. We reported EPS of $0.31 in the quarter, up from $0.21 a year ago. I would like to comment on some of the unusual items in both this year and last so that you can see that absent these items, we did in fact outperform the prior year although less significantly than the numbers would suggest. First and largest, we recorded an $8.2 million tax benefit associated with the sale leaseback transaction that was closed during the quarter. We did the transaction in part to delever and diversify our financing but also because we had capital loss tax carry-forward which might otherwise expire and which we were able to apply against the $29 million gain on the sale of two plants. Since we were able to shelter those gains, there was essentially no tax due on the transaction. We received net proceeds of $35.8 million. At the time of the last call, we had received preliminary advice that this tax benefit would be amortized for accounting purposes over the 15-year life of the lease and therefore we did not adjust our tax rate forecast for the year. Instead a subsequent advice indicated that the full effect needed to be recorded within the quarter giving rise to a very beneficial in fact negative income tax rate. With the known tax impact, we are now lowering our effective tax rate projection for the full year to 5% to 7%. This figure also takes into consideration congress’ recent extension of the R&D tax credit which was enacted in the fourth quarter and will therefore benefit us in that quarter for about $400,000. Also impacting the quarter was the adverse $3.4 million after-tax charge to close out the parking and revenue control systems contract with DFW. As Jim described, this has…

(Operator instructions) Your first question comes from the line of Ned Borland with Next Generation Equity Research. Please proceed. Ned Borland – Next Generation Equity Research: Good morning. First a housekeeping question on litigation expense, can you break that out for us in the quarter?

In this quarter? Ned Borland – Next Generation Equity Research: Yes.

For this quarter, it was I think $1.8 million. Ned Borland – Next Generation Equity Research: Okay, and are you still expecting – you were at about $7 million for year-to-date through the second quarter, so is it fair to assume that you are going to trend higher than the $8 million to $10 million range that you projected last quarter?

No, we are still looking at about $10 million for the full year net of the insurance recovery. Ned Borland – Next Generation Equity Research: Okay. Then on the police lightbar sales, I remember there was a strike last quarter that got resolved, did you see any benefit from that resolution in your lightbar business?

We did see an increase in the power deliveries in the third quarter but frankly it was not enough to move the needle in terms of our orders, which was a disappointment. Ned Borland – Next Generation Equity Research: Then on raw materials, we have seen a slide in quite a few commodities here, can you give us a sense of when we are going to start to see the benefit from some of these softer raw material prices?

We are renegotiating contracts with key suppliers and expect to see some improvement in raw material cost over the next couple of quarters.

One of the mitigating factors is that as the prices were going up, we were being protected with some of our contracts. So, as a result of that, we experienced a little bit of lag in recording the benefit. Having said that, in the third quarter, the raw material impact for us was only $900,000 which was a pretty good number and certainly a less meaningful impact than – it does not come anywhere near the type of impacts we had during the last commodity escalation cycle. Ned Borland – Next Generation Equity Research: You were able to raise prices in the quarter, right?

Yes, that’s right. We raised prices between 2% and 6% really on all of our product lines and those price increases went in anywhere between June and I think July, August of this year.

We should be very forthright about this though. As we tried to pass on some of those material surcharges to our customers, we expect that our customers are also looking at the commodity markets and realizing prices are coming down, will be coming back to us to renegotiate some of those surcharges. Ned Borland – Next Generation Equity Research: Is there a significant part of your customer base that has surcharges embedded in contracts?

Most of the price increases that we were able to pass through were on steel and so our highest exposure would probably be in the Bronto business and the ESG business. Ned Borland – Next Generation Equity Research: Okay thanks.

Your next question comes from the line of Ajay Kejriwal with Goldman Sachs. Please proceed. Ajay Kejriwal – Goldman Sachs: Good morning. Just a quick question on orders, you alluded to orders down this quarter but wondering if you could maybe quantify or provide some insight into what you saw in October versus September.

Hi Ajay. Yes, in terms of October what we have seen is SSG being stable with last year, Bronto and ESG both being down materially, so again we have not finished our reporting period that goes through tomorrow but at this point, they look like they are both down meaningfully. Ajay Kejriwal – Goldman Sachs: And they are down year over year but sequentially versus September, has trends gotten any – it sounds like things have gotten worse but any numbers you have for September what orders were and October?

September versus October, I don’t have those in front of me – Yes, I have got it, part of the problem is that we do have seasonality factors that impact our numbers so I am not sure if September to October number is a very relevant number. Ajay Kejriwal – Goldman Sachs: Just the year-on-year change?

Sorry, September was actually flat with last year in total which was a little bit of a surprise. Ajay Kejriwal – Goldman Sachs: It sounds like October has started off in a positive way.

I am going to correct myself, September was actually down 4% from year ago, it was the municipal orders that were flat year over year.

We are seeing further weakening in October sequentially. Ajay Kejriwal – Goldman Sachs: Okay, got it. Bill you talked about several cost reduction initiatives including folks reducing product complexity, I know it is early days yet but based on your initial assessment, could you talk about what is the potential size of the opportunity and maybe the timeline to realize some of those cost benefits?

I can talk to you about a timeline, I am certainly not in a position to give you numbers at this point. The process that we are going through is trying to evaluate our entire product portfolio in terms of profit contribution and where we have marginal products our plan is to analyze whether those products can be grown or can be priced or in those two instances if we are not able to put together a plan to drive additional profit, we will be eliminating certain products. And through eliminating those marginal products our plan is to take out the overhead associated with those products. We imagine that that will take us at least the next several months to go through that analysis. Ajay Kejriwal – Goldman Sachs: And it would be some time in the second half of ’09 when you will realize those costs or –

I am not prepared to tell you when we will realize those costs, I can tell you that we plan to have a complete analysis early in the year on marginal products and once we decide which products we will trim from our portfolio, we will be in a better position to define the cost savings and overheads associated with those. Ajay Kejriwal – Goldman Sachs: Okay. And maybe just a question on Bronto, you talked about weakness in demand in the release from rental companies if you could elaborate a little bit on that and also should we expect revenues to bounce back in the fourth quarter, third quarter came in lighter than what we are looking for, obviously you talked about some of those reasons but how should we think about fourth quarter from here?

The fourth quarter revenues should be above last year by 10% or more, there definitely will be a rebound. You have to remember that Bronto, their production facility is basically closed for the entire month of July. In terms of the demand on the industrial side, we talked about this a little bit last quarter and we saw more of it this quarter and that is the demand from our industrial customers has been pretty weak. Fortunately the demand on the fire side and the growth of the fire demand in the emerging countries has been offsetting that in large part. Normally, the industrial demand for this business is about 30% of their total orders and for example in this quarter it was closer to 10%. Ajay Kejriwal – Goldman Sachs: Good, got it. Thank you.

Your next question comes from the line of Charlie Brady with BMO Capital Markets. Please proceed. Charlie Brady – BMO Capital Markets: Hi, thanks. Good morning. With regard to Bronto and the sales, how much of that is FX related?

Sorry, this quarter or next quarter? Charlie Brady – BMO Capital Markets: You would have 13%, correct.

Yes. Charlie Brady – BMO Capital Markets: How much of that was foreign exchange?

It was predominantly foreign exchange. We actually sold the same number of units this year as we did last year. Charlie Brady – BMO Capital Markets: Okay. Is the backlog figure for Bronto currency adjusted?

No, we report our backlogs on an absolute basis. Charlie Brady – BMO Capital Markets: Okay. I guess I have just got a question with regard to the Vactor plant buildout, given the commentary and the sort of global environment we are in, I am assuming you are still planning on going forward with that but what does that do to your capacity utilization once that plant comes online into – what is obviously a down market here?

We still have a significant backlog (inaudible) we expect to continue through 2009 even with the planned expansion however we believe even with a weakening demand that the opportunity to compete with on shorter customer lead times is extremely valuable in that business. Contractors tend to buy these products when they get an order and when they get an order they want the product right away. So we believe that shorter lead times will be a competitive advantage in that business.

I think there is one other thing that helps us feel confident about that investment and that is that we have outsourced a lot of the sub-component bills which we can bring back inside if we have the extra capacity. Charlie Brady – BMO Capital Markets: Stephanie we will look at other – the tax rate implied for Q4 looks around 20%, 21%, is that a figure we ought to use for a full-year run rate in ’09?

No, we have to use a higher rate in ’09. You should be using closer to a 30% number, 30% to 32% in ’09. Charlie Brady – BMO Capital Markets: Okay, so no real – okay, so to about what it was prior then.

Yes. Charlie Brady – BMO Capital Markets: Thanks very much.

Your next question comes from the line of Steve Barger with KeyBanc Capital Markets. Please proceed. Steve Barger – KeyBanc Capital Markets: Good morning.

Good morning Steve. Steve Barger – KeyBanc Capital Markets: Bill I hear what you are saying about needing some time to go through the process and really identify the timeline and the quantity of cost takeouts, but thinking about your business analysis that you mentioned from a higher level, when you talk about things like reducing complexity, and increasing manufacturing velocity in international opportunities, due you have the bench strength right now to do that concurrently or do you have to prioritize that into a multi-year process.

I think we have to do both. We are going to be going after cost reduction and streamlining the operation at the same time that we invest in our growth products. I don’t think it is an either or process, we will have to do both in the very near term Steve Barger – KeyBanc Capital Markets: So, municipal budgets and the troubles that those are undertaking notwithstanding, you think you can make meaningful changes in 2009 that will benefit the EPS line?

I don’t think we have a choice. I think that in this very tough economic environment, we have to provide adequate returns to shareholders and maintain our liquidity, but at the same time some of the growth opportunities that we have, we have a short window to capitalize on. So, we will undoubtedly have to do both. Steve Barger – KeyBanc Capital Markets: Okay, to that point, the press release made a lot of references to the strength of ALP, our product line, I think you said that October bookings there were $7.3 million and that implies almost a $90 million annual run rate, so that is becoming a significant part of safety and security revenues, can you tell us what the sequential changes are on a month-to-month basis, how fast is that growing and give us some idea what the margins in that product line might look like?

I can’t tell you what the month-to-month growth rate is but compared to the same period last year, it is about 38% growth. Steve Barger – KeyBanc Capital Markets: Up 38% quarter over quarter, is that what you said or month to month?

No, quarter over quarter. Steve Barger – KeyBanc Capital Markets: Okay, thanks. Any look at the margins?

I don’t have that information in front of me.

We don’t disclose the margins on a specific product line although we have said that the margins on that product line are higher. Steve Barger – KeyBanc Capital Markets: That’s on an operating basis not just gross?

It was on a gross basis and it is now on an operating basis. Steve Barger – KeyBanc Capital Markets: Okay thanks. The new products that don’t necessarily have a direct revenue relationship, things like Codespear and Riverchase, are you seeing buying activity or customer enquiries slow down for those commensurate for some of your legacy products or are you still having fall through from those newer things.

We are just rolling out the new products on those. It is too early to say in fact Steve because we are just rolling out the new products and those elements in the fourth quarter. We are just now launching Speedspike [ph] our time over distance solution. We are just launching the BOSS software and we are just also launching a new low profile PIPS camera all in the fourth quarter. So, it is a little early to tell. Steve Barger – KeyBanc Capital Markets: That’s a good line up though and understandably when you launch a new product you are going to have less SG&A absorption but is it your sense that those products are going to be higher than corporate margin or higher than SSG average margin on the operating line?

I think additionally they are going to be dilutive only because we have had to ramp up sales efforts as well but we expect those margins to grow over time as we gain traction on an operating basis. Steve Barger – KeyBanc Capital Markets: Okay. Switching back to one last question on the legacy products, given some of your employees that have been here long time through prior downturns, are you seeing a big variance than you expected relative to your internal budgets and historically have you seen the backlog get cancelled as you go deeper into a downturn from municipalities?

So far we have not seen any cancelled orders which we are watching out on a daily basis. When you refer to the tenure of our employees, are you referring just to our costs, our fixed costs or salary costs? Steve Barger – KeyBanc Capital Markets: No, I am just saying people that have been there through the 2001, 2002 downturn and presumably they are putting budgets together and updating that as they see this situation unfold, and I am curious as to if the variance of downturn is exceeding internally what you have been expecting relative to weakening municipal budgets.

Let me address that Steve, we have gone back and looked at a lot of the historical data and what is happening right now seems very in line with the last downturn on the municipal side but what is different is that the municipal downturn is happening before the industrial and the last two times it happened in the other sequence. Having said all that, we are concerned now with the weakness of the US consumer that the municipal downturn could be exacerbated this time. But where we are standing today, it is in line with what we have seen before. Steve Barger – KeyBanc Capital Markets: Alright. Thanks very much. I will get back in line.

(Operator instructions) Your next question comes from the line of Jack Hain with Barrington Research. Please proceed. Jack Hain – Barrington Research: Hi, I am sitting in for Walt Liptak this morning. Just a couple of quick questions, I was wondering if you can provide me with an updated revenue mix in terms of your exposure to municipal markets versus otherwise just in percentage terms?

Sure. How about if I give you the absolute numbers, I don’t actually have the percentages and this will be in our Q. Jack Hain – Barrington Research: Okay.

In the quarter, our municipal and governmental new business was $64 million, our industrial $57 million, and then our international export about $28 million and $67 million for our internationally domicile businesses. Jack Hain – Barrington Research: Okay and obviously you are seeing a slowdown in the US municipal spending, I was wondering what your expectations are for Western Europe in that regard?

We are equally concerned about Western Europe. Everything we are reading gives us indication that there will be some slowing there. So, our businesses in Western Europe, our businesses in Europe are focused on making sure they are aggressively pursuing opportunities in economies like Eastern Europe, Russia and so on that are still growing but certainly we would expect some softness in Western Europe. Jack Hain – Barrington Research: Finally, you saw a little bit of margin pressure in fire rescue this quarter and obviously some of that is related to the ramp-up of capacity but just going forward can you provide us with some sort of run rate as to your expectations for that segments growth and operating profit margins?

You said growth and operating profit margins? Jack Hain – Barrington Research: Yes.

This is a business where there is strong franchise, they are increasing their capacity, they have got a very strong backlog so our expectation is that they would be moving into double-digit margins in the relatively new future. I don’t know if that has helped you or not. Jack Hain – Barrington Research: Thank you very much.

Your next question comes from the line of Charlie Brady with BMO Capital Markets. Please proceed. Charlie Brady – BMO Capital Markets: Thanks. When I look to environmental solutions into the last downturn on our margins, has that business changed structurally such that if we go into or we are in another downturn, you would see a margin level that would not go as low as that or would you expect a similar type of margin degradation into an economic downturn?

There are a couple of things that are working in our favor this time. One is that we combined our Vactor and Guzzler plants, one was an industrial product line and one was a municipal product line into a single facility so that we get some improved flexibility with respect to covering our fixed costs. The second factor is our Jetstream business which has grown significantly and has quite a bit higher product margins. So those two things are working in our favor. Probably the thing that is working against us is the fact that the municipal downturn seems to be leading this time and ESG in total, very significant amount of their business is municipal. Charlie Brady – BMO Capital Markets: Thanks Stephanie.

As there are no further questions in queue, I would now like to turn the call over for any closing remarks.

Thank you Natasha. Let me first say that Federal Signal has performed well in the third quarter. It was a very difficult environment but we have produced results that I think are a testament to the quality of the team here. I would like to also thank you for your participation and your support going forward. I look forward to working with all of you over the next couple of years as we work to create a bright future for all of our investors. Thank you very much.

This concludes the presentation. Thank you for your participation and you may all now disconnect. Good day.