Financial Analysis

ACQUISITIONS Acquisitions Completed in 2026 Acquisition of Mega On January 16, 2026, the Company completed the acquisition of all of the outstanding equity interests of Mega Equipment LLC (Mega). Mega is a leading manufacturer of specialty vehicles and equipment for use in global metal extraction and construction markets. The Company expects that the Mega acquisition will strengthen its specialty vehicle market position by expanding its metal extraction support equipment offerings. The assets and liabilities of Mega have been consolidated into the Companys Condensed Consolidated Balance Sheet as of June 30, 2026, and the post-acquisition results have been included in Condensed Consolidated Statement of Operations, within the Environmental Solutions Group. The initial cash consideration paid by the Company to acquire Mega was $45 million, inclusive of certain preliminary closing adjustments. Any additional closing adjustments are currently expected to be finalized in the third quarter of 2026. The acquisition is being accounted for in accordance with ASC 805, Business Combinations . Accordingly, the total purchase price has been allocated on a preliminary basis to assets acquired and liabilities assumed in connection with the acquisition based on their estimated fair values as of the completion of the acquisition. A single estimate of fair value results from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions. The …

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COMMITMENTS AND CONTINGENCIES Financial Commitments The Company provides indemnifications and other guarantees in the ordinary course of business, the terms of which range in duration and often are not explicitly defined. Specifically, the Company is occasionally required to provide letters of credit and bid and performance bonds to various customers, principally to act as security for retention levels related to casualty insurance policies and to guarantee the performance of subsidiaries that engage in export and domestic transactions. At June 30, 2026, the Company had outstanding performance and financial standby letters of credit, as well as outstanding bid and performance bonds, aggregating to $33.3 million. If any such letters of credit or bonds are called, the Company would be obligated to reimburse the issuer of the letter of credit or bond. The Company believes the likelihood of any currently outstanding letter of credit or bond being called is remote. The Company has transactions involving the sale of equipment to certain of its customers that include (i) guarantees to repurchase the equipment for a fixed price at a future date and (ii) guarantees to repurchase the equipment from the third-party lender in the event of default by the customer. As of June 30, 2026, both the single year and maximum potential cash payments the Company could be required to make to repurchase equipment under these agreements amounted to $11.8 million. The Companys risk under these repurcha …

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DEBT The following table summarizes the components of Long-term borrowings and finance lease obligations: (in millions) June 30, 2026 December 31, 2025 2025 Credit Agreement (a) $ 452.7 $ 564.0 Finance lease obligations 2.3 2.6 Total long-term borrowings and finance lease obligations, including current portion 455.0 566.6 Less: Current maturities 5.0 Less: Current finance lease obligations 0.4 0.5 Less: Unamortized debt issuance costs 1.4 1.5 Total long-term borrowings and finance lease obligations, net $ 448.2 $ 564.6 (a) Defined as the Fourth Amended and Restated Credit Agreement, dated October 29, 2025, as amended. As more fully described within Note 13 Fair Value Measurements, the Company uses a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The fair value of the Companys long-term borrowings and finance lease obligations is based on interest rates that we believe are currently available to us for issuance of debt with similar terms and remaining maturities (Level 2 input). The carrying amounts of the Companys long-term borrowings and finance lease obligations approximate their fair values as of June 30, 2026 and December 31, 2025. The 2025 Credit Agreement is a senior secured credit facility that provides the Company access to an aggregate principal amount of up to $1.5 billion, consisting of (i) a revolving credit facility in an amount up to $1.1 billion (the Revolver) and (ii) a delayed draw term loan facility in an amount up t …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following table presents the Companys Net sales disaggregated by geographic region, based on the location of the end customer, and by major product line: Three Months Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 2026 2025 Geographic Region: U.S. $ 555.1 $ 445.2 $ 1,056.6 $ 809.7 Canada 69.5 79.2 147.4 140.7 Europe/Other 45.6 40.2 91.8 78.0 Total net sales $ 670.2 $ 564.6 $ 1,295.8 $ 1,028.4 Major Product Line: Environmental Solutions Vehicles and equipment (a) $ 449.8 $ 374.5 $ 875.7 $ 676.1 Parts 88.6 68.2 166.5 128.3 Rental income (b) 23.7 20.4 40.6 35.4 Other (c) 15.6 17.4 27.6 28.1 Total 577.7 480.5 1,110.4 867.9 Safety and Security Systems Public safety and security equipment 60.6 52.9 125.8 103.5 Industrial signaling equipment 18.8 17.5 37.1 34.1 Warning systems 13.1 13.7 22.5 22.9 Total 92.5 84.1 185.4 160.5 Total net sales $ 670.2 $ 564.6 $ 1,295.8 $ 1,028.4 (a) Includes net sales from the sale of new and used vehicles and equipment, including sales of rental equipment. (b) Represents income from vehicle and equipment lease arrangements with customers. (c) Primarily includes revenues from services, such as maintenance and repair work, and the sale of extended warranty contracts. …

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FAIR VALUE MEASUREMENTS The Company uses a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are developed based on market data obtained from independent sources, while unobservable inputs reflect the Companys assumptions about valuation based on the best information available in the circumstances. The three levels of inputs are classified as follows: Level 1 quoted prices in active markets for identical assets or liabilities; Level 2 observable inputs, other than quoted prices included in Level 1, such as quoted prices for markets that are not active, or other inputs that are observable or can be corroborated by observable market data; and Level 3 unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. In determining fair value, the Company uses various valuation approaches within the fair value measurement framework. The valuation methodologies used for the Companys assets and liabilities measured at fair value and their classification in the valuation hierarchy are summarized below. Cash Equivalents Cash equivalents primarily consist of time-based deposits and interest-bearing instruments with maturi …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

GOODWILL AND OTHER INTANGIBLE ASSETS The following table summarizes the carrying amount of goodwill, and the changes in the carrying amount of goodwill in the six months ended June 30, 2026, by segment: (in millions) Environmental Solutions Safety & Security Systems Total Balance at January 1, 2026 $ 506.8 $ 113.0 $ 619.8 Acquisitions, including measurement period adjustments 18.6 18.6 Translation adjustments (0.5) (1.1) (1.6) Balance at June 30, 2026 $ 524.9 $ 111.9 $ 636.8 The following table summarizes the gross carrying amount and accumulated amortization of intangible assets for each major class of intangible assets: June 30, 2026 December 31, 2025 (in millions) Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value Definite-lived intangible assets: Customer relationships (a) $ 311.6 $ (110.7) $ 200.9 $ 300.9 $ (98.2) $ 202.7 Other (a) 9.9 (6.1) 3.8 10.3 (6.0) 4.3 Total definite-lived intangible assets 321.5 (116.8) 204.7 311.2 (104.2) 207.0 Indefinite-lived intangible assets: Trade names 177.9 177.9 171.6 171.6 Other 4.3 4.3 4.3 4.3 Total indefinite-lived intangible assets 182.2 182.2 175.9 175.9 Total intangible assets $ 503.7 $ (116.8) $ 386.9 $ 487.1 $ (104.2) $ 382.9 (a) Average useful life of customer relationships and other definite-lived intangible assets are estimated to be approximately 13 years and 9 years, respectively. The average useful life across all definite-lived intangible a …

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INCOME TAXES The Company recognized income tax expense of $25.3 million for the three months ended June 30, 2026, compared to $22.0 million in the three months ended June 30, 2025, with the increase primarily due to the effects of higher pre-tax income levels, partially offset by a $1.1 million increase in excess tax benefits associated with stock-based compensation activity. The Companys effective tax rate for the three months ended June 30, 2026 was 22.7%, compared to 23.6% in the prior-year quarter. The Company recognized income tax expense of $47.1 million for the six months ended June 30, 2026, compared to $37.7 million in the six months ended June 30, 2025, with the increase primarily due to the effects of higher pre-tax income levels, partially offset by a $2.2 million increase in excess tax benefits associated with stock-based compensation activity. The Companys effective tax rate for the six months ended June 30, 2026 was 23.1%, compared to 24.3% in the prior-year period. …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Recent Accounting Standard Adoptions In July 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Asset s, which provides a practical expedient for estimating expected credit losses relating to current accounts receivable and current contract assets that arise from transactions accounted for under Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers . ASU 2025-05 is effective for annual periods beginning after December 15, 2025, including interim periods within those annual reporting periods, with early adoption permitted. The Company adopted ASU 2025-05 on a prospective basis effective January 1, 2026. The adoption of this guidance did not have a material impact on the Companys financial statements. Recent Accounting Pronouncements In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) , which requires entities to disclose, on an annual and interim basis, disaggregated information about certain income statement expense line items. ASU 2024-03 is effective prospectively for annual periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption and retrospective adoption permitted. The Company is currently evalua …

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PENSIONS The following table summarizes the components of Net periodic pension expense: U.S. Benefit Plan Non-U.S. Benefit Plan Three Months Ended June 30, Six Months Ended June 30, Three Months Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 2026 2025 2026 2025 2026 2025 Service cost $ $ $ $ $ 0.1 $ 0.1 $ 0.2 $ 0.1 Interest cost 1.4 1.4 2.7 2.8 0.4 0.3 0.8 0.7 Amortization of actuarial loss 0.6 0.6 1.2 1.2 0.1 0.2 0.3 0.3 Amortization of prior service cost 0.1 0.1 Expected return on plan assets (1.4) (1.4) (2.7) (2.8) (0.5) (0.6) (1.0) (1.0) Net periodic pension expense $ 0.6 $ 0.6 $ 1.2 $ 1.2 $ 0.1 $ 0.1 $ 0.3 $ 0.2 The items that comprise Net periodic pension expense, other than Service cost, are included as a component of Other expense, net on the Condensed Consolidated Statements of Operations. …

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REVENUE RECOGNITION The following table presents the Companys Net sales disaggregated by geographic region, based on the location of the end customer, and by major product line: Three Months Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 2026 2025 Geographic Region: U.S. $ 555.1 $ 445.2 $ 1,056.6 $ 809.7 Canada 69.5 79.2 147.4 140.7 Europe/Other 45.6 40.2 91.8 78.0 Total net sales $ 670.2 $ 564.6 $ 1,295.8 $ 1,028.4 Major Product Line: Environmental Solutions Vehicles and equipment (a) $ 449.8 $ 374.5 $ 875.7 $ 676.1 Parts 88.6 68.2 166.5 128.3 Rental income (b) 23.7 20.4 40.6 35.4 Other (c) 15.6 17.4 27.6 28.1 Total 577.7 480.5 1,110.4 867.9 Safety and Security Systems Public safety and security equipment 60.6 52.9 125.8 103.5 Industrial signaling equipment 18.8 17.5 37.1 34.1 Warning systems 13.1 13.7 22.5 22.9 Total 92.5 84.1 185.4 160.5 Total net sales $ 670.2 $ 564.6 $ 1,295.8 $ 1,028.4 (a) Includes net sales from the sale of new and used vehicles and equipment, including sales of rental equipment. (b) Represents income from vehicle and equipment lease arrangements with customers. (c) Primarily includes revenues from services, such as maintenance and repair work, and the sale of extended warranty contracts. Contract Balances The Company recognizes contract liabilities when cash payments, such as customer deposits, are received in advance of the Companys satisfaction of the related performance obligations. Contract liabilities are recognized as Net sales …

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SEGMENT INFORMATION The Company has two reportable segments. Business units are organized under each reportable segment because they share certain characteristics, such as technology, marketing, distribution, and product application, which are expected to create long-term synergies. The following tables summarize the Companys financial performance by reportable segment and include reconciliations of segment operating income to consolidated Income before income taxes for the three months ended June 30, 2026 and 2025: Three Months ended June 30, 2026 (in millions of dollars) Environmental Solutions Safety and Security Systems Total Net sales (a) $ 577.7 $ 92.5 $ 670.2 Less: Cost of sales 413.8 52.6 466.4 Gross profit 163.9 39.9 203.8 Less: Selling, engineering, general, and administrative expenses 43.2 17.8 61.0 Other segment items (b) 6.8 6.8 Segment operating income 113.9 22.1 136.0 Reconciliation to income before income taxes: All other (income) loss (c) 17.8 Interest expense, net 6.0 Other expense, net 0.8 Income before income taxes $ 111.4 (a) Represents net sales from external customers. Intersegment net sales are insignificant. Total of segment net sales agrees to Net sales on the Condensed Consolidated Statement of Operations. (b) Other segment items includes amortization expense and acquisition and integration-related expenses, net, within the Environmental Solutions Group. (c) Represents general corporate expenses. Three Months Ended June 30, 2025 (in millions of doll …

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Description of the Business Federal Signal Corporation was founded in 1901 and was reincorporated as a Delaware corporation in 1969. References herein to the Company, we, our, or us refer collectively to Federal Signal Corporation and its subsidiaries. Products manufactured and services rendered by the Company are divided into two reportable segments: Environmental Solutions Group (Environmental Solutions) and Safety and Security Systems Group (Safety and Security Systems). The individual operating businesses are organized as such because they share certain characteristics, including technology, marketing, distribution, and product application, which create long-term synergies. These segments are discussed in Note 12 Segment Information. Basis of Presentation and Consolidation The accompanying unaudited condensed consolidated financial statements represent the consolidation of Federal Signal Corporation and its subsidiaries included herein and have been prepared by the Company pursuant to the rules and regulations of the United States (U.S.) Securities and Exchange Commission (the SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures presented herein are adequate to ensure the in …

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STOCKHOLDERS EQUITY Dividends On February 27, 2026, the Companys Board of Directors (the Board) declared a quarterly cash dividend of $0.15 per common share. The dividend totaled $9.2 million and was distributed on March 26, 2026 to stockholders of record at the close of business on March 13, 2026. On April 21, 2026, the Board declared a quarterly cash dividend of $0.15 per common share. The dividend totaled $9.1 million and was distributed on May 29, 2026 to stockholders of record at the close of business on May 15, 2026. On July 27, 2026, the Board declared a quarterly cash dividend of $0.15 per common share payable on August 27, 2026 to stockholders of record at the close of business on August 14, 2026. The Company paid dividends to stockholders of $8.5 million during the three months ended June 30, 2025 and $17.1 million during the six months ended June 30, 2025. Stock Repurchase Program In March 2020, the Board authorized a stock repurchase program (the March 2020 program) of up to $75 million of the Companys common stock. In April 2025, the Board authorized an additional stock repurchase program (the April 2025 program) of up to $150 million of the Companys common stock. The April 2025 program supplements the Boards prior authorization under the March 2020 program, which remains in effect. The stock repurchase programs are intended primarily to facilitate purchases of Company stock as a means to provide cash returns to stockholders, enhance stockholder returns, and mana …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

SUBSEQUENT EVENTS Acquisition of Western Technology On July 1, 2026, the Company completed the acquisition of certain assets and operations of Western Technology, Inc. (Western Technology) for an initial purchase price of $9.2 million. The initial purchase price, which is subject to certain post-closing adjustments, was funded through existing cash on hand. Western Technology is a manufacturer of proprietary, portable, explosion-protected lighting solutions for mission-critical applications, serving end-customers across industrial processing, petrochemical, and aerospace and defense industries. The preliminary purchase price allocation has not been completed at this time due to the proximity of the date of acquisition to the date of issuance of the condensed consolidated financial statements. The post-acquisition operating results of Western Technology are expected to be included within the Safety and Security Systems Group. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing