Corporate democracy was in full swing Tuesday as frustrated shareholders of money-losing Federal Signal Corp. sounded off to company executives and to a reporter covering the annual meeting at the Regency Conference Center in Oak Brook.
One investor complained that the company made no literature available. “I’m disappointed,” said the man, a retired employee of Federal Signal, who didn’t give his name. In agreement, shareholder Robert Handrock, an Air Force veteran, commented after the meeting, “it’s the little things.”
Federal Signal develops and manufactures technology solutions for municipal, government, industrial and institutional customers. The company has reported a net loss for the past three years, with a $27 million deficit in 2012.
CEO Dennis Martin said the company’s 2012 sales were strong, up 17 percent to $803 million from $688 million in 2011. He also told investors the company has offloaded a significant amount of debt in 2012 by selling an arm of the company, Federal Signal Technologies, and is ready to start focusing on profit.
Handrock commented later, “The meeting was flat. I guess I thought they would tell us something other than how great they are.” He added, “The value of the stock has gone up in the past few years but that doesn’t get me anything unless I sell. I go to the bank and at least I get something, but in Federal Signal, I get nothing.”
The stock closed Tuesday at $7.76, up 8 cents or 1.04 percent from the previous day’s $.7.68.
Handrock went on, “He (Martin) has got all the good buzz words but when am I going to get a return on my money?” He said he has about $10,000 invested the stock. “I look at the shareholder report and the management gets nice stock options, but what does the shareholder get?”
The company last paid a dividend, 34 cents, in 2010.
Shareholder George VanLueven said he started out with 50 shares of Federal Signal in 1955 and now has more than most of the board members, 100,000 shares.
“It’s going to the grave with me because I don’t want to pay the capital gains tax,” VanLueven jokingly stated.
The retired projectionist said he, too, was disappointed that the company stopped paying dividends, but he thinks the company is now on the right track and Martin has positioned it for growth.
“This guy (Martin) is great. The two CEOS before him belong in jail for what they did here,” said VanLueven.
When a shareholder asked CEO Martin for more information during the meeting, Martin told him to look online for videos to be posted shortly. (The videos have now been posted. View them).
