ITEM 1. BUSINESS
Not Applicable.
ITEM 2.

ITEM 2. PROPERTIES
Residential Mortgage Pass-Through Certificates:
The series of residential mortgage pass-through certificates (as hereinafter defined in Item 5(b)), do not own any physical property. Title to real estate will only be acquired upon default of the mortgagors under the mortgage loans.
Commercial Mortgage Pass-Through Certificates:
For Mortgage Pass-Through Certificates, Series 1994- M1, information regarding the mortgaged properties securing the mortgage loans is set forth in the Prospectus Supplement. Title to real estate will only be acquired upon default of the mortgagors under the mortgage loans.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings that involve any Series of Certificates, the Trustee, the Master Servicer or the Registrant with respect to any Series of Certificates nor is the Registrant aware of any proceedings known to be contemplated by governmental authorities.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There have been no matters submitted to a vote of certificate holders.
PART II
ITEM 5.

ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(a) There is no established public trading market for the Certificates representing interests in conventional mortgage loan or manufactured housing contract pools established by the Registrant.
(b) At December 29, 1995, the number of holders of record of each outstanding series of certificates ("Series of certificates"), for which a Form 15 has not been filed, were as follows:
(c) Not Applicable.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA
Not Applicable.
ITEM 7.

ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Not Applicable
ITEM 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Not Applicable
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III
ITEM 10.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Not Applicable
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION
Not Applicable
ITEM 12

ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT (for each Series for which a form 15 has not been filed)
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) Not Applicable
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Commercial Pass-Through Certificates - Annual Statements of Compliance: Reports of each Series of Certificates, for which a Form 15 has not been filed, prepared by the Master Servicers' independent public accountants, will be filed with the Current Reports on Form 8-K in the earliest month possible.
(b) Reports on Form 8-K related to the Series of Certificates were filed on November 21, 1995, November 29, 1995, December 1, 1995, December 14, 1995, and January 25, 1996.
(c) Not Applicable
(d) Not Applicable
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
MERRILL LYNCH MORTGAGE INVESTORS, INC.
By: /s/ Richard M. Fuscone Name: Richard M. Fuscone Title: President and Chairman of the Board Dated: March 27, 1996
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
By: /s/ John C. Qua Name John C. Qua Title: Treasurer and Director Dated: March 27, 1996
By: /s/ Michael M. McGovern Name: Michael M. McGovern Title: Secretary and Director Dated: March 27, 1996
EXHIBIT INDEX
EXHIBIT 27 FINANCIAL DATA SCHEDULE EXHIBIT 99.1 SERVICER'S CERTIFICATION EXHIBIT 99.2 SERVICER'S CERTIFICATION EXHIBIT 99.3 SERVICER'S CERTIFICATION EXHIBIT 99.3 SERVICER'S CERTIFICATION EXHIBIT 99.4 SERVICER'S CERTIFICATION EXHIBIT 99.5 SERVICER'S CERTIFICATION


ITEM 1 - BUSINESS 	 SUN BANCORP, INC. (SUN) is a holding company incorporated under the laws of Pennsylvania and registered under the Bank Holding Company Act of 1956, as amended, on November 26, 1982. SUN acquired the Snyder County Trust Company in June 1983 and The Watsontown National Bank in November 1987. On December 1, 1993, the two banks merged into one bank under the legal title of Sun Bank (Bank). The banks continue to do business as Snyder County Trust Company, Incorporated as Sun Bank and Watsontown Bank, Incorporated as Sun Bank. SUN also owns the Pennsylvania SUN Life Insurance Company, a credit life and disability insurance company formed in 1993. In 1995, SUN entered into a limited partnership with the Susquehanna Valley Development Group, Inc. for the purpose of building, owning and operating an affordable elderly apartment complex in Mifflinburg, PA. As part of the agreement, SUN is able to recognize tax credits from this economic development project. 		 	Sun Bank, a state-chartered bank regulated by Pennsylvania Banking Law, provides full service commercial and retail banking services primarily in central Pennsylvania. Sun Bank operates six banking offices and one trust services office serving Snyder, Union, Northumberland and Lycoming Counties. At December 31, 1995, Sun Bank had total assets of $318,659,000 and total stock- holders' equity of $35,190,000. Net income for 1995 was $5,629,000. 	 	The Bank offers a wide range of services including demand deposit accounts, savings accounts, Christmas and all-purpose clubs, time certificates of deposit, and individual retirement accounts, as well as commercial loans, consumer loans, mortgage loans, and safe deposit services. The Bank also operates a trust department that provides full fiduciary services. Also, eight Automated Teller Machines (ATMs) throughout the service area provide 24-hour banking service. Sun Bank's activities are such that the loss of one single customer or a few customers would not have a material adverse effect on its operations. Additionally, the Bank's business is not seasonal in nature nor does it engage in foreign transactions. The majority of the loan portfolio is comprised of residential real estate loans and consumer loans which generally are low-risk. The Bank's deposits are insured by the Federal Deposit In- surance Corporation (FDIC) in the amount allowed by law.
	The Pennsylvania SUN Life Insurance Company provides credit life and dis- ability insurance to Sun Bank's credit customers. Pennsylvania SUN Life is subject to supervision and regulation by the Arizona Department of Insurance, the Insurance Department of the Commonwealth of Pennsylvania, and the Board of Governors of the Federal Reserve Bank. At December 31, 1995, Pennsylvania SUN Life had total assets of $446,000 and total stockholders' equity of $213,000. Net income for 1995 was $23,000.
	Competition continues to heighten in the financial services industry not only among banks but with savings and loan associations, credit unions, discount brokerage firms, insurance companies, and other nonbank financial service providers. Changing regulatory and economic conditions affect SUN's ability to compete effectively in its market area. Most of the competition is centered around the setting of interest rates to be charged on loans and rates paid on deposits, fees on deposit accounts and customer service. SUN's management feels it competes effectively in its market area.
	SUN is subject to regulation and supervision by the Board of Governors of the Federal Reserve Bank and the Pennsylvania Department of Banking. SUN files quarterly and annual reports with the Federal Reserve Bank (FRB) of Phila- delphia and periodic on-site exams of SUN are done by the FRB. Regular exam- inations of the Bank are conducted by the FDIC and the Pennsylvania Department of Banking. 	 SUN and the Pennsylvania SUN Life Insurance Company do not have any employees. At December 31, 1995, the Bank employed 113 persons. The Bank offers a variety of benefit programs and feels its relationship with its employees is good.
ITEM 2

ITEM 2 - PROPERTIES
	SUN's corporate office is located in Sun Bank's main banking office. SUN owns all of its properties with the exception of an off-site ATM, Item 8 listed below, which is rented from Weis Markets, Inc., Sunbury, Pennsylvania. In 1995, SUN purchased parcels of land in Northumberland and Liverpool for the purpose of building branches on these sites in the future. The branch in Northumberland is scheduled to be in operation in the fall of 1996. SUN also purchased an existing branch location in Shamokin Dam formerly owned by Swineford National Bank. This site will be replacing our current branch office in Shamokin Dam in April 1997. All properties are in good condition and adequate for the bank's purposes. The following is a list of the banking offices, the addresses, and a brief description of each office.
	Office				 Address				 Description 1. Main		 	2-16 South Market Street Brick structure 	 			Selinsgrove, Pennsylvania 17870
2. Shamokin Dam	 	Routes 11 & 15				 	Brick structure 	 			Shamokin Dam, Pennsylvania 17876
3. New Berlin	 	Market & Plum Streets			 	Brick structure 		 		New Berlin, Pennsylvania 17855
4. Sunbury			 11 South Second Street		 		Brick structure 			 	Sunbury, Pennsylvania 17801
5. Middleburg		 Route 522 & Dock Hill Road			 	Brick structure 			 	Middleburg, Pennsylvania 17842
6. Trust Division	 100 West Pine Street				 	Brick structure 				Selinsgrove, Pennsylvania 17870
7. Automated Teller	 	108 West Pine Street					 Brick structure Machine			 Selinsgrove, Pennsylvania 17870
8. Automated Teller		 700 North Broad Street		 		Brick structure Machine		 	Selinsgrove, Pennsylvania 17870
9. Watsontown	 	300 Main Street			 		Brick structure 				 Watsontown, Pennsylvania 17777
10. Northumberland	 	96 Duke Street				 	Land 			 	Northumberland, Pennsylvania 17857
11. Liverpool	 		Rts. 11 & 15 South Land 				 Liverpool, Pennsylvania 17045
12. Shamokin Dam		 200 S. Susquehanna Trail				 Brick structure 				 Shamokin Dam, Pennsylvania 17876
ITEM 3

ITEM 3 - LEGAL PROCEEDINGS
	Various legal actions arise against the Corporation in the normal course of business. In the opinion of management and counsel, when such actions currently pending or threatened have been resolved, they should not have a material adverse effect on the business or financial condition of the Corporation.
ITEM 4

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 	Not applicable
PART II
ITEM 5

ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED 	 	 	 SECURITY HOLDER MATTERS
	On April 1993, the common stock of SUN BANCORP, INC. began trading publicly on the NASDAQ national market system under the symbol SUBI. Prior to this date, the stock was not traded on an established stock exchange; however, it was traded on the over-the-counter market. As of March 7, 1996, SUN had approx- imately 1,348 holders of its common stock.
	The payment of dividends by SUN is at the discretion of the Board of Directors and to the extent funds are legally available for that purpose. SUN may not pay dividends in any year in excess of the total of the current year's net income and the retained net income of the prior two years without the approval of the Federal Reserve Bank. Additionally, bank regulations limit the amount of dividends that may be paid to SUN by the subsidiary bank without prior approval from the regulatory agencies.
	Additional stock information is incorporated by reference to Stockholder Information found on page 36 of the 1995 Annual Report to Stockholders.
ITEM 6

ITEM 6 - SELECTED FINANCIAL DATA
	This item is incorporated by reference to information under the heading Five Year Financial Highlights on page 23 of the 1995 Annual Report to Stockholders.
ITEM 7

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 	 AND RESULTS OF OPERATIONS
	This item is incorporated by reference to Management's Discussion and Analysis on pages 24 through 35 of the 1995 Annual Report to Stockholders.
ITEM 8

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
	This item is incorporated by reference to the Consolidated Financial State- ments, Notes to Consolidated Financial Statements and Report of Independent Certified Public Accountants set forth on pages 4 through 22 of the 1995 Annual Report to Stockholders.
ITEM 9

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON 		 	 ACCOUNTING AND FINANCIAL DISCLOSURE
	None
PART III
ITEM 10

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
	Information concerning directors and executive officers of the Registrant is incorporated herein by reference to Board of Directors on page 6 of the Cor- poration's 1996 Proxy Statement.
	Information regarding disclosure of delinquent filers pursuant to Item 405 of Regulation 5-K is incorporated herein by reference to Compliance with Securities and Exchange Act on page 20 of the Corporation's 1996 Proxy Statement.
ITEM 11

ITEM 11 - EXECUTIVE COMPENSATION
	Information relating to management remuneration and compensation is incor- porated herein by reference to Executive Compensation and Other Information on page 13 of the 1996 Proxy Statement.
ITEM 12

ITEM 12 - SECURITY OWNERSHIP OR CERTAIN BENEFICIAL OWNERS AND 		 	 MANAGEMENT
	This information is incorporated by reference to Security Ownership of Directors and Executive Officers of the Corporation on page 11 of the 1996 Proxy Statement.
ITEM 13

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
	This information is incorporated by reference to footnote 12 on page 17 of the 1995 Annual Report to Stockholders and under the heading of Transactions with Management on page 20 of the 1996 Proxy Statement.
PART IV
ITEM 14

ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON 		 	 FORM 8-K
(a) (1) The following consolidated financial statements and report of in- dependent certified public accounts of SUN BANCORP, INC. and subsidiaries included in the Annual Report to Stockholders for the year ended December 31, 1995 are incorporated by 		 	 reference in Part II, Item 8:
	 Consolidated Balance Sheets - December 31, 1995 and 1994
	 Consolidated Statements of Income - Years Ended December 31, 1995, 1994 and 1993
	 Consolidated Statements of Stockholders' Equity - Years Ended December 31, 1995, 1994 and 1993
	 Consolidated Statements of Cash Flows - Years Ended December 31, 1995, 1994 and 1993
	 Notes to Consolidated Financial Statements
	 Report of Independent Certified Public Accountants
(2) All schedules applicable to the Registrant are shown in the re- spective financial statements or the notes thereto. Financial statement schedules not included are omitted because the information is not required under the related instructions or it is inappli- cable.
(3) Exhibits 		 3(i) The Articles of Incorporation of the Corporation are in- corporated herein by reference to Exhibit 3 to the Corporation's Annual Report on Form 10-K for the year ended December 31, 1993 (Commission File Number 0-14745).
	 3(ii) The By-Laws, as amended and restated, are incorporated herein by reference to Exhibit 3 to the Corporation's Annual Report on Form 10-K for the year ended December 31, 1993 (Commission File Number 0-14745).
	 13 Annual Report to Stockholders of SUN BANCORP, INC. for the year ended December 31, 1995 is filed herewith. Such report, except for those portions thereof which are expressly incorporated by reference herein, is furnished 	 		 for information of the Securities and Exchange Commission only and it is not considered "filed" as part of the Form 10-K filing.
22 Subsidiaries of the Registrant are filed herewith.
23 Published Report Regarding Matters Submitted To Vote Of Security Holders is filed herewith, the 1996 Proxy Statement of SUN BANCORP, INC.
(b) 	No reports on Form 8-K were required to be filed during the fourth quarter of 1995.
(c) 	Exhibits - the required exhibits are included under Item 14(a) (3) of the Form 10-K.
(d) 	Financial statement schedules are omitted because the required informa- tion is not applicable or is included elsewhere herein.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, SUN BANCORP, INC. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
							 SUN BANCORP, INC.	 							 (Registrant)
						By: 	/s/ Fred W. Kelly, Jr. 							 President & Chief Executive Officer
						Date:	 3/25/96
Name Date
/s/ Fred W. Kelly, Jr. 3/25/96 President, Chief Executive Officer and Director
/s/ Jeffrey E. Hoyt 3/25/96 Vice President, Principal Financial Officer and Chief Acccounting Officer
/s/ Max E. Bingaman 3/25/96 Director
/s/ Raymond C. Bowen 3/25/96 Director
/s/ David R. Dieck 3/25/96 Director
/s/ Louis A. Eaton 3/25/96 Director
/s/ Dr. Robert E. Funk 3/25/96 Director
/s/ Robert A. Hormell 3/25/96 Director
/s/ George F. Keller 3/25/96 Director
/s/ Lehman B. Mengel 3/25/96 Director
/s/ Marlin T. Sierer 3/25/96 Director
/s/ Jerry A. Soper 3/25/96 Director
/s/ Dennis J. Van 3/25/96 Director


Item 1. Business.
Federal Signal Corporation, founded in 1901, was reincorporated as a Delaware Corporation in 1969. The company is a manufacturer and worldwide supplier of safety, signaling and communications equipment, fire trucks, rescues, aerial access platforms, street sweeping and vacuum loader vehicles, parking control equipment, custom on-premise signage, carbide cutting tools, precision punches and related die components.
Products produced and services rendered by Registrant and its subsidiaries (referred to collectively as "Registrant" herein, unless context otherwise indicates) are divided into groups (business segments) as follows: Safety Products, Sign, Tool and Vehicle. This classification of products and services is based upon Registrant's historical divisional structure established by management for the purposes of internal control, marketing and accounting.
Developments, including acquisitions of businesses, considered significant to the company or individual segments are described under the following discussions of the applicable groups.
The Financial Review sections, "Consolidated Results of Operations," "Group Operations" and "Financial Position and Cash Flow," and Note M - Segment Information contained in the Proxy Statement for the Annual Meeting of Shareholders to be held on April 17, 1996 are incorporated herein by reference.
Safety Products Group
The Safety Products Group includes the Signal Products Division, Aplicaciones Tecnologicas VAMA S.L., acquired in May, 1992, Justrite Manufacturing, acquired in May, 1994, and Federal APD. The Signal Products Division consists of Emergency Products, Electrical Products, Federal Warning Systems and Commercial Products.
Safety Products Group products manufactured by Registrant consist of: (1) a variety of visual and audible warning and signaling devices used by private industry, federal, state and local governments, building contractors, police, fire and medical fleets, utilities and civil defense; (2) safety containment products for handling and storing hazardous materials used by a wide variety of industrial and laboratory customers as well as military agencies and municipal, state and federal governments; and (3) parking, revenue control, and access control equipment and systems for parking facilities, commercial businesses, bridge and pier installation and residential developments.
The visual and audible warning and signaling devices include emergency vehicle warning lights, electromechanical and electronic vehicle sirens and industrial signal lights, sirens, horns, bells and solid state audible signals, audio/visual emergency warning and evacuation systems, including weather and nuclear power plant warning notification systems and fire alarm system panels and devices.
In May 1994, the Registrant acquired the principal operating assets and assumed the principal operating liabilities of Justrite Manufacturing Company for cash. Justrite is an Illinois-based manufacturer of safety equipment for the storage, transfer, use and disposal of flammable and hazardous materials.
The safety containment products offered by Justrite include safety cabinets for flammables and corrosives; safety and dispenser cans; waste receptacles and disposal cans; spill control pallets and overpacks; and hazardous material storage buildings, lockers, pallets and platforms. These products are designed in accordance with various regulatory codes and standards, and meet agency approvals such as FM and UL.
Parking, revenue control, and access control equipment and systems include parking and security gates, card access readers, ticket issuing devices, coin and token units, fee computers, various forms of electronic control units and personal computer-based revenue and access control systems.
Warning and signaling products, which account for the principal portion of the group's business, are marketed to both industrial and governmental users. Products are sold to industrial customers through manufacturers' representatives who sell to approximately 1,400 wholesalers. Products are also sold to governmental customers through more than 900 active independent distributors as well as through original equipment manufacturers and direct sales. International sales are made through the Registrant's independent foreign distributors or on a direct basis.
Because of the large number of Registrant's products, Registrant competes with a variety of manufacturers and suppliers and encounters varying competitive conditions among its different products and encounters different classes of customers. Because of the variety of such products and customers, no meaningful estimate of either the total number of competitors or Registrant's overall competitive position can be made. Generally, competition is intense as to all of Registrant's products and, as to most such products, is based on price, including competitive bidding, on product reputation and performance, and on product servicing. Although some competitors in certain product lines are larger than Registrant, the Registrant believes it is the leading supplier of particular products.
In May 1992, the Registrant acquired all of the outstanding shares of Aplicaciones Tecnologicas VAMA S.L. for cash and an earnout to be based upon future profitability of the company for a five-year period. VAMA is a leading European manufacturer of emergency vehicular signaling products located in Barcelona, Spain.
In December 1995, the Registrant acquired the principal operating assets of the Target Tech brand of warning lights for cash. Target Tech, located in Washington, is the domestic market leader in amber signaling products for construction and work vehicles.
The backlogs of orders of Safety Products Group products believed to be firm at December 31, 1995 and 1994 were $15.7 million and $14.0 million, respectively. Almost all of the backlogs of orders at December 31, 1995 are reasonably expected to be filled within the current fiscal year.
Sign Group
The Sign Group, operating principally under the name "Federal Sign" designs, engineers, manufactures, installs and maintains illuminated and non-illuminated sign displays, for both sale and lease. Registrant additionally provides sign repair services and also enters into maintenance service contracts, usually over three to five-year periods, for signs it manufactures as well as for signs produced by other manufacturers. Its operations are oriented to custom designing
and engineering of commercial and industrial signs or groups of signs for its customers.
The sale and lease of signs and the sale of maintenance contracts are conducted primarily through Registrant's direct sale organization which operates from its twenty-three principal sales and manufacturing facilities located strategically throughout the continental U.S. Customers for sign products and services consist of local commercial businesses, as well as major national and multi-national companies.
The Sign Group's markets improved during 1995 with growth coming from many of its national and multi-national customers, as well as growth in the casino gaming industry. This growth, combined with the results of the aggressive restructuring programs implemented over the last few years, resulted in an improvement in operating income of 54% in 1995 versus 1994.
A large number of Registrant's displays are leased to customers for terms of typically three to five years with both the lease and the maintenance portions of many such contracts then renewed for successive periods.
Registrant is nationally a principal producer of high-end custom and custom- quantity signs. The registrant has modified its marketing strategies to focus on a narrower market segment to which it can provide a more unique set of services. As a result of this change, the Registrant estimates that it now has approximately 100 regional and national competitors. Competition for sign products and services is intense and competitive factors consist largely of quality, prices, project and program management capabilities, aesthetic and design considerations, and maintenance services.
Total backlog at December 31, 1995, applicable to sign products and services was approximately $61.4 million compared to approximately $57.0 million at December 31, 1994. A significant part of Registrant's sign products and services backlog relates to sign maintenance contracts since such contracts are usually performed over long periods of time. At December 31, 1995, the Sign Group had a backlog of approximately $41.4 million compared to approximately $39.8 million at December 31, 1994, represented by in-service sign maintenance contracts. With the exception of the sign maintenance contracts, most of the backlog orders at December 31, 1995 are reasonably expected to be filled within the current fiscal year.
Tool Group
Tool Group products are produced by the Registrant's wholly-owned subsidiaries including: Dayton Progress Corporation, Schneider Stanznormalien GmbH, acquired in 1992, Jamestown Punch and Tooling, Inc., Manchester Tool Company, Dico Corporation, acquired in 1992, and Bassett Rotary Tool Company.
Dayton Progress Corporation manufactures and purchases for resale an extensive variety of consumable die components for the metal stamping industry. These components consist of piercing punches, matched die matrixes, punch holders or retainers and many other products related to a metal stamper's needs. Registrant also produces a large variety of consumable precision metal products for customers' nonstamping needs, including special heat exchanger tools, beverage container tools, powder compacting units and molding components.
In March 1992, Dayton Progress Corporation acquired for cash the assets of Schneider Stanznormalien GmbH, a German manufacturer of precision punch and die
components. This acquisition gives Dayton Progress manufacturing capabilities on the European continent and provides greater access to European markets.
In October 1991, Dayton Progress Corporation acquired for cash and stock all of the outstanding shares of Container Tooling Corporation. Container Tool manufactures and distributes body punch tooling used in the production of aluminum and steel beverage cans. The product complements Dayton Progress' tab- top tooling product line. In October 1994 the Container Tool operations were relocated to Dayton Progress' facilities in Dayton, Ohio.
Jamestown Punch and Tooling, Inc. manufactures an extensive line of consumable special die components for the metal stamping and plastic molding industries in addition to a variety of precision ground high alloy parts. Sales are made on both a direct basis and through a limited distributor organization.
Manchester Tool Company manufactures consumable carbide insert tooling for cutoff and deep grooving metal cutting applications.
In November 1992, Manchester Tool Company acquired for cash all of the outstanding shares of Dico Corporation, a manufacturer of polycrystalline diamond and cubic boron nitride cutting tools. This product line complements Manchester Tool's carbide insert products and allows for entry into new market niches within general business areas already served.
Bassett Rotary Tool Company is a manufacturer of round consumable carbide cutting tools. Its products are medium to high precision in their manufacture and at times are quite complex in their configuration. The products represent a narrow band of the much broader cutting tool industry and require a high level of manufacturing skill.
Because of the nature of and market for the Registrant's products, competition is great at both domestic and international levels. Many customers have some ability to produce the product themselves, but at a cost disadvantage. Major market emphasis is placed on quality of product and level of service.
Tool Group products are labor intensive with the only significant outside cost being the purchase of the tool steel, carbide and diamond raw material, as well as items necessary for manufacturing. Inventories are maintained to assure prompt service to the customer with the average order for standard tools filled in less than one week for domestic shipments and within two weeks for interna tional shipments.
Tool Group customers include metal and plastic fabricators and tool and die shops throughout the world. Because of the nature of the products, volume depends mainly on repeat orders from customers numbering in the thousands. These products are used in the manufacturing process of a broad range of items such as automobiles, appliances, construction products, electrical motors, switches and components and a wide variety of other household and industrial goods. Almost all business is done with private industry.
Registrant's products are marketed in the United States, and many international markets, principally through industrial distributors. Foreign manufacturing facilities, as well as sales and distribution offices, are located in Weston, Ontario; Tokyo, Japan; Warwickshire, England; and Frankfurt, Germany.
Order backlogs of the Tool Group as of December 31, 1995 and December 31, 1994 were $7.7 million and $9.5 million, respectively. All of the backlogs of
orders at December 31, 1995 are expected to be filled within the current fiscal year.
Vehicle Group
The Vehicle Group is composed of Emergency One, Inc., Bronto Skylift Oy Ab acquired in August, 1995, Superior Emergency Vehicles, Ltd., acquired in 1991, Elgin Sweeper Company, Vactor Manufacturing, Inc., acquired in 1994, Guzzler Manufacturing, Inc., acquired in 1993, and Ravo International.
Emergency One, Inc. is a leading manufacturer of fire trucks and rescue vehicles including four and six-wheel drive rescue trucks, tankers, pumpers, aerial ladder trucks, and airport rescue and fire fighting vehicles (each of aluminum construction for rust-free operation and energy efficiency).
In December 1991, Emergency One acquired for cash all of the outstanding shares of Frontline Corporation, a manufacturer and distributor of ambulances and rescue trucks. The acquisition of Frontline Corporation complemented Emergency One's product line and enabled Emergency One to provide a complete product line of fire trucks, fire apparatus, emergency support and ambulance vehicles for distribution through Emergency One's domestic and international dealer network. The company was merged into Emergency One in January 1994.
In August 1995, The Registrant acquired for cash, Bronto Skylift Oy Ab, located in Tampere, Finland. Bronto is a manufacturer of vehicle-mounted aerial access platforms for fire rescue and heavy duty industrial markets. The acquisition offers an excellent fit with Emergency One as both companies expand their worldwide product offering.
In December 1991, Emergency One acquired for cash, Superior Emergency Vehicles, Ltd., a manufacturer and distributor of a full range of fire truck bodies primarily for the Canadian market. In addition to increased manufacturing capacity, the acquisition of Superior Emergency Vehicles, Ltd. provides greater access to the Canadian market.
Elgin Sweeper Company is the leading manufacturer in the United States of self-propelled street cleaning vehicles. Utilizing three basic cleaning methods (mechanical sweeping, vacuuming and recirculating air), Elgin's products are primarily designed for large-scale cleaning of curbed streets and other paved surfaces.
In June 1994, the Registrant acquired the principal operating assets and assumed the principal operating liabilities of Peabody Myers Corporation ("Vactor") for cash. Vactor Manufacturing, Inc. is an Illinois-based manufacturer of municipal combination catch basin/sewer cleaning vacuum trucks. This acquisition provides a significant expansion of the Registrant's offering of municipal equipment and enhances the domestic and international dealer networks of both Elgin Sweeper and Vactor.
In March 1993, Elgin Sweeper Company acquired, principally for cash, all of the outstanding shares of Guzzler Manufacturing, Inc. Guzzler is an Alabama- based manufacturer and marketer of waste removal vehicles, using vacuum technology, for worldwide industrial and environmental markets. The acquisition of Guzzler Manufacturing, Inc. complemented Elgin Sweeper Company's product distribution and provided for increased exposure to the industrial marketplace for both Elgin and Guzzler.
Ravo International, a Netherlands-based street sweeper manufacturer, is a leading European manufacturer and marketer of self-propelled street and sewer cleaning vehicles. Utilizing the vacuuming cleaning method, Ravo's products are primarily designed for cleaning of curbed streets and other paved surfaces.
All of the Vehicle Group companies also sell accessories and replacement parts for their products. Ravo International also provides after-market service and support for its products in the Netherlands.
Some products and components thereof are not manufactured by Registrant but are purchased for incorporation with products of Registrant's manufacture.
A majority of Vehicle Group sales are made to domestic and overseas municipalities and other governmental units. Vacuum loader vehicles produced by Guzzler are principally sold to industrial customers. Worldwide sales are principally conducted by domestic and international dealers, in most areas, with some sales being made on a direct-to-user basis.
Registrant competes with several domestic and foreign manufacturers and due to the diversity of products offered, no meaningful estimate of either the number of competitors or Registrant's relative position within the market can be made, although Registrant does believe it is a major supplier within these product lines. Registrant competes with numerous foreign manufacturers principally in international markets.
At December 31, 1995, the Vehicle Group backlogs were $166.7 million compared to $180.5 million at December 31, 1994. The backlogs at December 31, 1995, included approximately $16.9 million of backlog attributable to Bronto Skylift, which was acquired in August 1995. A substantial majority of the orders in the backlogs at December 31, 1995 are reasonably expected to be filled within the current fiscal year. Approximately $6.4 million of the backlogs at December 31, 1995 and $24.0 million of the backlogs at December 31, 1994 represent the remaining funded portion of a subcontract to build P-23 airport rescue and fire fighting vehicles for the U.S. Air Force. Production of vehicles under this subcontract is expected to be completed in 1996.
Additional Information
Registrant's sources and availability of materials and components are not materially dependent upon either a single vendor or very few vendors.
Registrant owns a number of patents and possesses rights under others to which it attaches importance, but does not believe that its business as a whole is materially dependent upon any such patents or rights. Registrant also owns a number of trademarks which it believes are important in connection with the identification of its products and associated goodwill with customers, but no material part of Registrant's business is dependent on such trademarks.
Registrant's business is not materially dependent upon research activities relating to the development of new products or services or the improvement of existing products and services, but such activities are of importance as to some of Registrant's products. Expenditures for research and development by the Registrant were approximately $7.0 million in 1995, $7.0 million in 1994 and $5.6 million in 1993.
Note M - Segment Information, presented in the Registrant's Proxy Statement for the Annual Meeting of Shareholders to be held on April 17, 1996, contains
information concerning the Registrant's foreign sales, export sales and operations by geographic area, and is incorporated herein by reference.
Certain of the Registrant's businesses are susceptible to the influences of seasonal buying or delivery patterns. The Registrant's businesses which tend to have lower sales in the first calendar quarter compared to other quarters as a result of these influences are signage, street sweeping, outdoor warning, other municipal emergency signal products, parking systems and aerial access platform manufacturing operations.
No material part of the business of Registrant is dependent either upon a single customer or very few customers. The Registrant is in substantial compliance with federal, state and local provisions which have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment. These provisions have had no material adverse impact upon capital expenditures, earnings or competitive position of the Registrant and its subsidiaries. The Registrant employed 6,015 people in ongoing businesses at the close of 1995. The Registrant believes relations with its employees have been satisfactory.
Item 2.

Item 2. Properties.
As of March 1, 1996, the Registrant utilized twenty-nine principal manufacturing plants located primarily throughout North America, as well as ten in Europe and one in the Far East. In addition, there were thirty-six sales and service/warehouse sites, with thirty-three being domestically based and three located overseas. About half of the manufacturing plants are owned, whereas all the sales and service/warehouse sites are leased.
In total, the Registrant devoted approximately 1,585,000 square feet to manufacturing and 955,000 square feet to service, warehousing and office space, as of March 1, 1996. Of the total square footage, approximately 30% is devoted to the Safety Products Group, 14% to the Sign Group, 11% to the Tool Group and 45% to the Vehicle Group. Approximately 61% of the total square footage is owned by the Registrant, with the remaining 39% being leased.
All of the Registrant's properties, as well as the related machinery and equipment, are considered to be well-maintained, suitable and adequate for their intended purposes. In the aggregate, these facilities are of sufficient capacity for the Registrant's current business needs.
Capital expenditures for the years ended December 31, 1995, 1994, and 1993 were $15.7 million, $11.1 million, and $10.1 million, respectively. Registrant anticipates total capital expenditures in 1996 will be approximately 30% to 50% greater than 1995 amounts.
Item 3.

Item 3. Legal Proceedings.
The Registrant is subject to various claims, other pending and possible legal actions for product liability and other damages and other matters arising out of the conduct of the Registrant's business. The Registrant believes, based on current knowledge and after consultation with counsel, that the outcome of such claims and actions will not have a material adverse effect on the Registrant's consolidated financial position or the results of operations.
On December 29, 1995, the company settled a lawsuit with Duravision, Inc. and Manufacturers Product Research Group of North America, Inc. for $6.7 million.
As a result of the settlement, the company recorded a net after-tax charge to income of $4.2 million, or $.09 per share. The charge, included in other income and expense, was recorded in the fourth quarter of 1995. The resolution of this case will have no effect on the company's future operating performance as it involved a discontinued product line. The company is actively seeking recoveries from its original trial counsel.
Item 4.

Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of security holders through the solicitation of proxies or otherwise during the three months ended December 31, 1995.
PART II
Item 5.

Item 5. Market for the Registrant's Common Stock and Related Security Holder Matters.
Federal Signal Corporation's Common Stock is listed and traded on the New York Stock Exchange under the symbol FSS. Market price range and dividend per share data listed in Note N - Selected Quarterly Data (Unaudited) contained in the Registrant's Proxy Statement for the Annual Meeting of Shareholders to be held on April 17, 1996 is incorporated herein by reference. As of March 1, 1996, there were 5,450 holders of record of the Registrant's common stock.
Certain long-term debt agreements impose restrictions on Registrant's ability to pay cash dividends on its common stock. All of the retained earnings at December 31, 1995, were free of any restrictions.
Item 6.

Item 6. Selected Financial Data.
Selected Financial Data contained in the Registrant's Proxy Statement for the Annual Meeting of Shareholders to be held on April 17, 1996 is incorporated herein by reference.
Item 7.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
The Financial Review sections "Consolidated Results of Operations," "Group Operations," "Financial Services Activities," and "Financial Position and Cash Flow" contained in the Registrant's Proxy Statement for the Annual Meeting of Shareholders to be held on April 17, 1996 are incorporated herein by reference.
Item 8.

Item 8. Financial Statements and Supplementary Data.
The consolidated financial statements and accompanying footnotes of the Registrant and the report of the independent auditors set forth in the Registrant's Proxy Statement for the Annual Meeting of Shareholders to be held on April 17, 1996 are incorporated herein by reference.
Item 9.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
PART III
Item 10.

Item 10. Directors and Executive Officers of the Registrant.
The information under the caption "Election of Directors" contained in the Registrant's Proxy Statement for the Annual Meeting of Shareholders to be held on April 17, 1996 is incorporated herein by reference.
The following is a list of the Registrant's executive officers, their ages, their business experience and their positions and offices as of March 1, 1996:
Joseph J. Ross, age 50, was elected Chairman, President and Chief Executive Officer in February, 1990. Previously he served as President and Chief Executive Officer since December 1987 and as Chief Operating Officer since July 1986.
John A. DeLeonardis, age 48, was elected Vice President-Taxes in January 1992. He first joined the company as Director of Tax in November 1986.
Henry L. Dykema, age 56, joined the Registrant as Vice President and Chief Financial Officer in January 1995. Mr. Dykema was self-employed from September 1993 to December 1994 and served as Vice President-Finance and Chief Financial Officer of Kennametal, Inc. from October 1989 to August 1993.
Robert W. Racic, age 47, was elected Vice President and Treasurer in April 1984.
Richard L. Ritz, age 42, was elected Vice President and Controller in January 1991. He was appointed Controller effective November 1985.
Kim A. Wehrenberg, age 44, was elected Vice President, General Counsel and Secretary effective October 1986.
These officers hold office until the next annual meeting of the Board of Directors following their election and until their successors shall have been elected and qualified.
There are no family relationships among any of the foregoing executive officers.
Item 11.

Item 11. Executive Compensation.
The information contained under the caption "Executive Compensation" of Registrant's Proxy Statement for the Annual Meeting of Shareholders to be held April 17, 1996 is incorporated herein by reference.
Item 12.

Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information contained under the caption "Security Ownership of Certain Beneficial Owners" of Registrant's Proxy Statement for the Annual Meeting of Shareholders to be held April 17, 1996 is incorporated herein by reference.
Item 13.

Item 13. Certain Relationships and Related Transactions.
The information contained under the caption "Executive Compensation" of Registrant's Proxy Statement for the Annual Meeting of Shareholders to be held April 17, 1996 is incorporated herein by reference.
PART IV
Item 14.

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a)1. Financial Statements
The following consolidated financial statements of Federal Signal Corporation and Subsidiaries included in the Registrant's Proxy Statement for the Annual Meeting of Shareholders to be held on April 17, 1996 are filed as a part of this report and are incorporated by reference in Item 8:
Consolidated Balance Sheets -- December 31, 1995 and 1994
Consolidated Statements of Income -- Years ended December 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows -- Years ended December 31, 1995, 1994 and 1993
Notes to Consolidated Financial Statements
2. Financial Statement Schedules
The following consolidated financial statement schedule of Federal Signal Corporation and Subsidiaries, for the three years ended December 31, 1995, is filed as a part of this report in response to Item 14(d):
Schedule II -- Valuation and qualifying accounts
All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore, have been omitted.
3. Exhibits
3. a. Restated Certificate of Incorporation of Registrant and Certificate of Amendment, filed as Exhibit (3)(a) to Registrant's Form 10-K for the year ended December 31, 1991, is incorporated herein by reference.
b. By-laws of Registrant, filed as Exhibit (3)(b) to Registrant's Form 10-K for the year ended December 31, 1991, is incorporated herein by reference.
4. a. Rights Agreement, filed as Exhibit (4)(a) to Registrant's Form 10-K for the year ended December 31, 1993, is incorporated herein by reference.
b. The Registrant has no long-term debt agreements for which the related outstanding debt exceeds 10% of consolidated total assets as of December 31, 1995. Copies of debt instruments for which the related debt is less than 10% of consolidated total assets will be furnished to the Commission upon request.
10. a. 1988 Stock Benefit Plan, filed as Exhibit (10)(a) to Registrant's Form 10-K for the year ended December 31, 1991, is incorporated herein by reference.
b. Corporate Management Incentive Bonus Plan, filed as Exhibit (10)(b) to Registrant's Form 10-K for the year ended December 31, 1994, is incorporated herein by reference.
c. Supplemental Pension Plan.
d. Executive Disability, Survivor and Retirement Plan.
e. Supplemental Savings and Investment Plan, filed as Exhibit (10)(f) to Registrant's Form 10-K for the year ended December 31, 1993, is incorporated herein by reference.
f. Employment Agreement with Joseph J. Ross, filed as Exhibit (10)(g) to Registrant's Form 10-K for the year ended December 31, 1994, is incorporated herein by reference.
g. Change of Control Agreement with Kim A. Wehrenberg, filed as Exhibit (10)(h) to Registrant's Form 10-K for the year ended December 31, 1994, is incorporated herein by reference.
h. Director Deferred Compensation Plan, filed as Exhibit (10)(j) to Registrant's Form 10-K for the year ended December 31, 1992, is incorporated herein by reference.
i. Director Retirement Plan, filed as Exhibit (10)(k) to Registrant's Form 10-K for the year ended December 31, 1992, is incorporated herein by reference.
11. Computation of net income per common share
13. 1995 Proxy Statement for the Annual Meeting of Shareholders to be held April 17, 1996. Such report, except for those portions thereof which are expressly incorporated by reference in this Form 10-K, is furnished for the information of the Commission only and is not to be deemed "filed" as part of this filing.
21. Subsidiaries of the Registrant
23. Consent of Independent Auditors
27. Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed for the three months ended December 31, 1995.
(c) and (d)
The response to this portion of Item 14 is being submitted as a separate section of this report.
Other Matters
For the purposes of complying with the amendments to the rules governing Form S-8 (effective July 13, 1990) under the Securities Act of 1933, the undersigned Registrant hereby undertakes as follows, which undertaking shall be incorporated by reference into Registrant's Registration Statements on Form S-8 Nos. 33-12876, 33-22311, 33-38494, 33-41721 and 33-49476, dated April 14, 1987, June 26, 1988, December 28, 1990, July 15, 1991 and June 9, 1992, respectively:
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
Signatures
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FEDERAL SIGNAL CORPORATION
By: Joseph J. Ross March 27, 1996 Chairman, President, Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below, on March 27, 1996, by the following persons on behalf of the Registrant and in the capacities indicated.
Henry L. Dykema Walter R. Peirson Vice President and Chief Director Financial Officer
Richard L. Ritz J. Patrick Lannan, Jr. Vice President and Controller Director
James A. Lovell, Jr. Director
Thomas N. McGowen, Jr. Director
Richard R. Thomas Director