fss-20260331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________

FORM 10-Q

(Mark One)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 1-6003

_____________________________________________

FEDERAL SIGNAL CORPORATION

(Exact name of registrant as specified in its charter)


Delaware						36-1063330
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1333 Butterfield Road, Downers Grove, Illinois

(Address of principal executive offices)

60515

(Zip code)

(630) 954-2000

(Registrant’s telephone number, including area code)

_____________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $1.00 per share	FSS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of March 31, 2026, the number of shares outstanding of the registrant’s common stock was 61,002,256.

Table of Contents

FEDERAL SIGNAL CORPORATION

TABLE OF CONTENTS


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	2
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2026 and 2025	2
	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2026 and 2025	3
	Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025	4
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025	5
	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2026 and 2025	6
	Notes to Condensed Consolidated Financial Statements	7
	Note 1 – Summary of Significant Accounting Policies	7

	Note 2 – Acquisitions	8
	Note 3 – Revenue Recognition	12
	Note 4 – Inventories	12
	Note 5 – Debt	13
	Note 6 – Goodwill and Other Intangible Assets	14
	Note 7 – Income Taxes	15
	Note 8 – Pensions	15
	Note 9 – Commitments and Contingencies	16
	Note 10 – Earnings Per Share	17
	Note 11 – Stockholders’ Equity	18
	Note 12 – Segment Information	20
	Note 13 – Fair Value Measurements	22



Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	33

SIGNATURE		34

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FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Form 10-Q”) is being filed by Federal Signal Corporation and its subsidiaries (referred to collectively as the “Company,” “we,” “our,” or “us” herein, unless the context otherwise indicates) with the United States (“U.S.”) Securities and Exchange Commission (the “SEC”), and includes comments made by management that may contain words such as “may,” “will,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “project,” “estimate,” and “objective” or similar terminology, or the negative thereof, concerning the Company’s future financial performance, business strategy, plans, goals, and objectives. These expressions are intended to identify forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information concerning the Company’s possible or assumed future performance or results of operations and are not guarantees. While these statements are based on assumptions and judgments that management has made in light of industry experience as well as perceptions of historical trends, current conditions, expected future developments, and other factors believed to be appropriate under the circumstances, they are subject to risks, uncertainties, and other factors that may cause the Company’s actual results, performance, or achievements to be materially different.

These risks and uncertainties, some of which are beyond the Company’s control, include the risk factors described under Part I, Item 1A, Risk Factors, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on February 25, 2026. These factors may not constitute all factors that could cause actual results to differ materially from those discussed in any forward-looking statement. The Company operates in a continually changing business environment and new factors emerge from time to time. The Company cannot predict such factors, nor can it assess the impact, if any, of such factors on its results of operations, financial condition, or cash flow. Accordingly, forward-looking statements should not be relied upon as a predictor of actual results. The Company disclaims any responsibility to update any forward-looking statement provided in this Form 10-Q.

ADDITIONAL INFORMATION

The Company is subject to the reporting and information requirements of the Exchange Act and, as a result, is obligated to file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other reports and information with the SEC, as well as amendments to those reports. The Company makes these filings available free of charge through our website at www.federalsignal.com as soon as reasonably practicable after such materials are filed with, or furnished to, the SEC. The Company also uses its website as a means of disclosing material non-public information and to comply with our disclosure requirements under Regulation FD. Information on our website does not constitute part of this Form 10-Q. In addition, the SEC maintains a website at www.sec.gov that contains reports, proxy, and information statements, and other information regarding issuers that file electronically.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)


	Three Months Ended March 31,
(in millions, except per share data)	2026		2025
Net sales	$	625.6	$	463.8
Cost of sales	446.2		333.0
Gross profit	179.4		130.8
Selling, engineering, general and administrative expenses	72.0		60.2
Amortization expense	6.5		4.3
Acquisition and integration-related expenses, net	1.2		0.6

Operating income	99.7		65.7
Interest expense, net	6.9		3.0


Other expense, net	0.6		0.7
Income before income taxes	92.2		62.0
Income tax expense	21.8		15.7


Net income	$	70.4	$	46.3
Earnings per share:


Basic	$	1.16	$	0.76



Diluted	1.14		0.75
Weighted average common shares outstanding:
Basic	60.9		61.1
Diluted	61.5		61.8

See notes to condensed consolidated financial statements.

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FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)


	Three Months Ended March 31,
(in millions)	2026		2025
Net income	$	70.4	$	46.3
Other comprehensive income (loss):
Change in foreign currency translation adjustment	(4.0)		4.0
Change in unrecognized net actuarial loss and prior service cost related to pension benefit plans, net of income tax	0.6		0.2
Change in unrealized gain or loss on interest rate swaps, net of income tax	—		0.1
Total other comprehensive (loss) income	(3.4)		4.3
Comprehensive income	$	67.0	$	50.6

See notes to condensed consolidated financial statements.

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FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS


	March 31, 2026		December 31, 2025
(in millions, except per share data)	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	71.4	$	63.7
Accounts receivable, net of allowances for doubtful accounts of $2.9 and $2.8, respectively	310.1		292.2
Inventories	477.8		471.6
Prepaid expenses and other current assets	17.5		26.3



Total current assets	876.8		853.8
Properties and equipment, net of accumulated depreciation of $215.1 and $208.0, respectively	287.2		274.6
Rental equipment, net of accumulated depreciation of $71.4 and $69.2, respectively	210.0		202.7
Operating lease right-of-use assets	29.9		28.4
Goodwill	626.8		619.8
Intangible assets, net of accumulated amortization of $110.3 and $104.2, respectively	393.9		382.9
Deferred tax assets	9.9		10.1
Deferred charges and other long-term assets	19.9		20.3

Total assets	$	2,454.4	$	2,392.6
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:

Current portion of long-term borrowings and finance lease obligations	$	3.0	$	0.5
Accounts payable	115.8		98.0
Customer deposits	66.3		47.7


Accrued liabilities:
Compensation and withholding taxes	38.4		52.3

Current operating lease liabilities	8.1		7.9
Contingent consideration	4.1		15.0
Other current liabilities	72.5		61.0

Total current liabilities	308.2		282.4
Long-term borrowings and finance lease obligations	548.6		564.6
Long-term operating lease liabilities	23.1		21.6
Long-term pension and other post-retirement benefit liabilities	41.9		43.1

Deferred tax liabilities	74.2		71.9
Other long-term liabilities	23.9		27.0

Total liabilities	1,019.9		1,010.6
Stockholders’ equity:
Common stock, $1 par value per share, 90.0 shares authorized, 71.0 and 70.8 shares issued, respectively	71.0		70.8
Capital in excess of par value	333.9		330.4
Retained earnings	1,376.5		1,315.3
Treasury stock, at cost, 10.0 and 9.9 shares, respectively	(272.5)		(263.5)
Accumulated other comprehensive loss	(74.4)		(71.0)
Total stockholders’ equity	1,434.5		1,382.0
Total liabilities and stockholders’ equity	$	2,454.4	$	2,392.6

See notes to condensed consolidated financial statements.

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FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	Three Months Ended March 31,
(in millions)	2026		2025
Operating activities:
Net income	$	70.4	$	46.3
Adjustments to reconcile net income to net cash provided by operating activities:


Depreciation and amortization	23.8		18.7


Stock-based compensation expense	2.7		2.4



Changes in fair value of contingent consideration	0.2		—
Payments for acquisition-related activity	(3.5)		—

Deferred income taxes	2.3		0.7
Changes in operating assets and liabilities	5.4		(31.4)


Net cash provided by operating activities	101.3		36.7
Investing activities:
Purchases of properties and equipment	(6.7)		(5.6)

Payments for acquisition-related activity, net of cash acquired	(44.9)		(82.1)





Net cash used for investing activities	(51.6)		(87.7)
Financing activities:
(Decrease) increase in revolving lines of credit, net	(12.8)		64.2




Purchases of treasury stock	—		(18.5)
Redemptions of common stock to satisfy withholding taxes related to stock-based compensation	(8.2)		(8.6)
Payments for acquisition-related activity	(11.5)		—
Cash dividends paid to stockholders	(9.2)		(8.6)
Proceeds from stock-based compensation activity	0.1		—

Other, net	(0.1)		(11.6)


Net cash (used for) provided by financing activities	(41.7)		16.9
Effects of foreign exchange rate changes on cash and cash equivalents	(0.3)		0.5
Increase (decrease) in cash and cash equivalents	7.7		(33.6)
Cash and cash equivalents at beginning of year	63.7		91.1
Cash and cash equivalents at end of period	$	71.4	$	57.5

See notes to condensed consolidated financial statements.

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FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)


	Three Months ended March 31, 2026
(in millions)	Common Stock		Capital in Excess of Par Value		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Total
Balance at January 1, 2026	$	70.8	$	330.4	$	1,315.3	$	(263.5)	$	(71.0)	$	1,382.0
Net income					70.4						70.4
Total other comprehensive loss									(3.4)		(3.4)
Cash dividends declared ($0.15 per share)					(9.2)						(9.2)
Stock-based payments:
Stock-based compensation			2.7								2.7
Stock option exercises and other	0.1		0.9				(1.9)				(0.9)
Performance share unit transactions	0.1		(0.1)				(7.1)				(7.1)

Balance at March 31, 2026	$	71.0	$	333.9	$	1,376.5	$	(272.5)	$	(74.4)	$	1,434.5


	Three Months Ended March 31, 2025
(in millions)	Common Stock		Capital in Excess of Par Value		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Total
Balance at January 1, 2025	$	70.3	$	309.8	$	1,102.8	$	(207.8)	$	(89.0)	$	1,186.1
Net income					46.3						46.3
Total other comprehensive income									4.3		4.3
Cash dividends declared ($0.14 per share)					(8.6)						(8.6)
Stock-based payments:
Stock-based compensation			2.4								2.4
Stock option exercises and other	0.1		0.2				(0.5)				(0.2)
Performance share unit transactions	0.2		(0.2)				(8.2)				(8.2)
Stock repurchase program							(19.7)				(19.7)
Balance at March 31, 2025	$	70.6	$	312.2	$	1,140.5	$	(236.2)	$	(84.7)	$	1,202.4

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FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – 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 information presented is not misleading. Except as otherwise noted, these condensed consolidated financial statements have been prepared in accordance with the Company’s accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, and should be read in conjunction with those consolidated financial statements and the notes thereto.

These condensed consolidated financial statements include all normal and recurring adjustments that we considered necessary to present a fair statement of our results of operations, financial condition, and cash flow. Intercompany balances and transactions have been eliminated in consolidation.

The results reported in these condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year, which may differ materially due to, among other things, the risk factors described under Part I, Item 1A, Risk Factors, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on February 25, 2026. While we label our quarterly information using a calendar convention whereby our first, second, and third quarters are labeled as ending on March 31, June 30, and September 30, respectively, it is our longstanding practice to establish interim quarterly closing dates based on a 13-week period ending on a Saturday, with our fiscal year ending on December 31. The effects of this practice are not material and exist only within a reporting year.

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 Assets, 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 Company’s 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 evaluating the impact of adopting this guidance on its financial statement disclosures.

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FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

(Unaudited)

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies interim disclosure requirements and applicability of Topic 270. ASU 2025-11 is effective prospectively for interim reporting periods in fiscal years beginning after December 15, 2027, with early adoption and retrospective application permitted. The Company is currently evaluating the impact of adopting this guidance on its financial statement disclosures.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and (iii) the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant Accounting Policies

There have been no changes to the Company’s significant accounting policies as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

NOTE 2 – 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 Company’s Condensed Consolidated Balance Sheet as of March 31, 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 second 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 Company’s judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact the Company’s results of operations. Due to the proximity of the date of acquisition to the date of issuance of the condensed consolidated financial statements, the Company’s purchase price allocation as of March 31, 2026 reflects various provisional estimates that were based on the information that was available as of the acquisition date and the filing date of this Form 10-Q. The Company believes that information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed; however, the determination of those fair values is not yet finalized. Thus, the preliminary measurements of fair value set forth in the table below are subject to change during the measurement period as valuations are finalized. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable, but not more than one year from the acquisition date.

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FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

(Unaudited)

The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the acquisition date:


(in millions)
Purchase price, inclusive of preliminary closing adjustments (a)	$	45.0

Total consideration	45.0

Cash	0.1
Accounts receivable	2.7
Inventories	11.8
Prepaid expenses and other current assets	0.3

Properties and equipment	11.8




Customer relationships (b)	9.0
Trade names (c)	6.8

Accounts payable	(1.0)
Accrued liabilities	(0.7)
Customer deposits	(3.0)


Net assets acquired	37.8

Goodwill (d)	$	7.2

(a) The initial purchase price, which is subject to certain post-closing adjustments, including working capital, was funded through existing cash on hand and borrowings under the Company’s credit agreement.

(b) Represents the preliminary fair value assigned to customer relationships, which are considered to be definite-lived intangible assets, with a preliminary estimated useful life of approximately 10 years.

(c) Represents the preliminary fair value assigned to trade names, which are considered to be indefinite-lived intangible assets.

(d) Goodwill, which is tax-deductible, has been allocated to the Environmental Solutions Group on the basis that the synergies identified will primarily benefit this segment.

In the period between the January 16, 2026 closing date and March 31, 2026, Mega generated approximately $11.8 million of net sales and $2.4 million of operating income.

The acquisition was not, and would not have been, material to the Company’s net sales, results of operations, or total assets during any period presented. Accordingly, the Company’s consolidated results from operations do not differ materially from historical performance as a result of the acquisition, and therefore, unaudited pro-forma results are not presented.

Acquisitions Completed in 2025

Acquisition of New Way

On November 25, 2025, the Company completed the acquisition of all of the outstanding equity interests of Scranton Manufacturing Company LLC d/b/a New Way Trucks (“New Way”). New Way is a leading U.S.-based designer and manufacturer of refuse collection vehicles.

The initial cash consideration paid by the Company to acquire New Way was approximately $413 million, inclusive of certain preliminary closing adjustments. Any additional closing adjustments are expected to be finalized before the end of the second quarter of 2026. In addition, there is a contingent earn-out opportunity of up to $54.0 million, based on the achievement of certain specified financial targets over a two-year period.

As of March 31, 2026, the Company’s purchase price allocation reflects various provisional estimates that were based on the information that was available as of the acquisition date and the filing date of this Form 10-Q. The Company believes that information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed; however, the determination of those fair values, including the third-party valuation of acquired intangible assets, is not yet finalized. Thus, the preliminary measurements of fair value set forth in the table below are subject to change during the measurement period as valuations are finalized. During the three months ended March 31, 2026, the Company recognized certain measurement period adjustments that did not materially affect either the carrying value of goodwill previously recognized as of December 31, 2025 or the Company’s Condensed Consolidated Statement of Operations for the three months ended March 31, 2026. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable, but not more than one year from the acquisition date.

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FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

(Unaudited)

The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the acquisition date:


(in millions)
Purchase price, inclusive of preliminary closing adjustments (a)	$	413.5
Estimated fair value of additional consideration (b)	10.7
Total consideration	424.2

Cash	9.4
Accounts receivable	60.0
Inventories	85.5
Prepaid expenses and other current assets	0.7

Properties and equipment	31.1

Finance lease right-of-use assets (c)	7.4
Operating lease right-of-use assets	0.1

Customer relationships (d)	113.0
Trade names (e)	50.5

Accounts payable	(10.6)
Accrued liabilities	(9.8)
Customer deposits	(15.7)
Operating lease liabilities	(0.1)
Finance lease liabilities (c)	(1.8)
Net assets acquired	319.7

Goodwill (f)	$	104.5

(b) Represents the preliminary estimate of fair value assigned to the contingent earn-out payment as of the acquisition date, which is included in Other long-term liabilities on the Condensed Consolidated Balance Sheet as of March 31, 2026. See Note 13 – Fair Value Measurements for discussion of the methodology used to determine the fair value of the contingent earn-out payment.

(c) Represents the preliminary fair value assigned to acquired finance lease right-of-use assets and finance lease liabilities.

(d) Represents the preliminary fair value assigned to customer relationships, which are considered to be definite-lived intangible assets, with a preliminary estimated useful life of approximately 15 years.

(e) Represents the preliminary fair value assigned to trade names, which are considered to be indefinite-lived intangible assets.

(f) Goodwill, which is tax-deductible, has been allocated to the Environmental Solutions Group on the basis that the synergies identified will primarily benefit this segment.

Acquisition of Waterblasting LLC

On February 12, 2025, the Company completed the acquisition of substantially all the assets and operations of Waterblasting, LLC, owner of Hog Technologies, and Waterblasting Eurasia, s.r.o. (collectively, “Hog”). Hog is a leading U.S. manufacturer of truck-mounted road-marking, line-removal, and waterblasting equipment, serving infrastructure, municipal, and airport markets.

The cash consideration paid by the Company to acquire Hog was $82.5 million, inclusive of certain closing adjustments. In addition, there was a contingent earn-out payment of up to $15.0 million that was based on the achievement of certain financial targets during 2025. During the three months ended March 31, 2026, the Company paid additional consideration of $15.0 million to settle the contingent consideration liability associated with the acquisition. Of the $15.0 million of additional consideration paid, $3.5 million has been included as a component of Net cash provided by operating activities within the Condensed Consolidated Statement of Cash Flows with the remaining $11.5 million representing the fair value of the contingent consideration established in the Company’s purchase price allocation, being included as a component of Net cash (used for) provided by financing activities.

During the three months ended March 31, 2026, the Company finalized the Hog purchase price allocation and recognized certain measurement period adjustments, which did not have a material impact on the carrying value of goodwill previously

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FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

(Unaudited)

recognized as of December 31, 2025. The measurement period adjustments did not have a material impact on the Company’s Condensed Consolidated Statement of Operations for the three months ended March 31, 2026.

The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:


(in millions)
Purchase price, inclusive of closing adjustments (a)	$	82.5
Estimated fair value of additional consideration (b)	11.5
Settlement of pre-existing contractual relationship (c)	0.9
Total consideration	94.9


Accounts receivable	6.7
Inventories	9.7
Prepaid expenses and other current assets	1.0

Properties and equipment	18.1



Customer relationships (d)	23.7
Trade names (e)	12.4
Other intangible assets	3.0
Accounts payable	(3.8)
Accrued liabilities	(1.3)
Customer deposits	(5.4)


Net assets acquired	64.1

Goodwill (f)	$	30.8

(a) The purchase price was funded through existing cash on hand and borrowings under the Company’s credit agreement. The purchase price included an amount of $10.0 million, which was paid by the Company at closing and placed into an escrow account. Based on Hog’s financial results for the year ended December 31, 2025, the amount placed in escrow was released to the former owner of Hog during the three months ended March 31, 2026. The Company assigned a fair value to this contingent consideration of $10.0 million as of the acquisition date.

(b) Represents the fair value assigned to the contingent earn-out payment as of the acquisition date. See Note 13 – Fair Value Measurements for discussion of the methodology used to determine the fair value of the contingent earn-out payment.

(c) Represents the non-cash settlement of accounts receivable due from Hog to the Company as of the acquisition date. Corresponding amount payable by Hog to the Company is not included in accounts payable assumed in the table above, and the amount was settled at fair value with no impact on the Condensed Consolidated Statement of Operations in 2025.

(d) Represents the fair value assigned to customer relationships, which are considered to be definite-lived intangible assets, with an estimated useful life of approximately 12 years.

(e) Represents the fair value assigned to trade names, which are considered to be indefinite-lived intangible assets.

(f) Goodwill, which is tax-deductible, has been allocated to the Environmental Solutions Group on the basis that the synergies identified will primarily benefit this segment.

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FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

(Unaudited)

NOTE 3 – REVENUE RECOGNITION

The following table presents the Company’s Net sales disaggregated by geographic region, based on the location of the end customer, and by major product line:


	Three Months Ended March 31,
(in millions)	2026		2025
Geographic Region:
U.S.	$	501.5	$	364.5
Canada	77.9		61.5
Europe/Other	46.2		37.8
Total net sales	$	625.6	$	463.8
Major Product Line:
Environmental Solutions
Vehicles and equipment (a)	$	425.9	$	301.6
Parts	77.9		60.1
Rental income (b)	16.9		15.0
Other (c)	12.0		10.7
Total	532.7		387.4
Safety and Security Systems
Public safety and security equipment	65.2		50.6
Industrial signaling equipment	18.3		16.6
Warning systems	9.4		9.2

Total	92.9		76.4
Total net sales	$	625.6	$	463.8

(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 Company’s satisfaction of the related performance obligations. Contract liabilities are recognized as Net sales when the related performance obligations are satisfied, which generally occurs within three to six months of the cash receipt. Contract liability balances are not materially impacted by any other factors. The Company’s contract liabilities were $72.0 million as of March 31, 2026 and $53.1 million as of December 31, 2025. Contract assets, such as unbilled receivables, were not material as of any of the periods presented herein.

NOTE 4 – INVENTORIES

The following table summarizes the components of Inventories:


(in millions)	March 31, 2026		December 31, 2025
Finished goods	$	207.7	$	190.2
Raw materials	221.1		237.7
Work in process	49.0		43.7
Total inventories	$	477.8	$	471.6

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FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)

(Unaudited)

NOTE 5 – DEBT

The following table summarizes the components of Long-term borrowings and finance lease obligations:


(in millions)			March 31, 2026

SEC Form 10-Q filed by Federal Signal Corporation