Core Insights - The all-new HEMI®-powered Dodge Charger Hustle Stuff Drag Pak is set to debut at the NHRA Gatornationals, driven by two-time FSS champion Mark Pawuk, marking a significant event for Dodge in drag racing [1] - The Charger Hustle Stuff Drag Pak is a limited-production vehicle, with only 50 units being built, specifically engineered for grassroots NHRA Sportsman drag racers [1] - The Dodge Charger lineup includes various high-performance models, such as the 670-horsepower all-electric Charger Daytona Scat Pack and the 550-horsepower Charger Scat Pack, showcasing Dodge's commitment to performance and innovation [2] Group 1: Product Launch and Features - The Dodge Charger Hustle Stuff Drag Pak features a high-powered 354-cubic-inch HEMI V-8 engine and is designed for Factory Stock Showdown competition [1] - The Charger Scat Pack, powered by the 3.0L Twin Turbo SIXPACK engine, delivers 550 horsepower and is part of the next-generation Dodge Charger lineup [2] - The Charger lineup offers configurations in both two-door coupe and four-door sedan, emphasizing performance and consumer choice [2] Group 2: Event Highlights and Competitors - The NHRA Gatornationals will feature exhibition races with drag-racing legends driving production versions of the Charger Scat Pack to celebrate NHRA's 75th anniversary [1] - Leah Pruett and Matt Hagan, both drivers for Tony Stewart Racing, will compete in the NHRA nitro classes, with Hagan aiming for a fifth Funny Car championship [2] - Dodge Thrill Rides will be introduced at the Gatornationals, allowing fans to experience the performance of the Charger Scat Pack firsthand [1]

Core Insights - Federal Signal reported record results for Q4 and full year 2025, driven by strong performance across its operating groups and contributions from recent acquisitions [4][7] - The company expects another record year in 2026, with guidance for net sales between $2.55 billion and $2.65 billion and adjusted EPS between $4.50 and $4.80 [5][17] Financial Performance - For Q4 2025, consolidated net sales reached $597 million, a 27% increase year-over-year, with 18% organic growth [2] - Adjusted EBITDA for Q4 grew 25% to $438.9 million, with a margin expansion of 130 basis points to 20.1% [2] - Full year 2025 net sales were $2.18 billion, up 17% year-over-year, with operating income rising 21% to $340.9 million [3][7] Segment Performance - In the Environmental Solutions Group (ESG), Q4 sales increased 27% to $504 million, and adjusted EBITDA rose 31% to $109 million, with a margin of 21.6% [8][9] - The Safety and Security Systems Group (SSG) saw Q4 sales increase 23% to $93 million, with adjusted EBITDA rising 43% to $23.4 million and a margin of 25.2% [11] Acquisitions and Growth Strategy - Federal Signal completed the acquisition of New Way for approximately $413 million and Mega for about $45 million, contributing to a backlog of $132 million [6][13] - The company targets $15 million to $20 million in annual synergies from New Way by 2028, focusing on operational optimization [15] 2026 Outlook - Management anticipates 2026 revenue growth of approximately 17% to 22%, with 5% to 9% expected to be organic growth [18] - The company expects a tax rate of around 25% for 2026, compared to a 24% GAAP effective rate in 2025 [17] Financial Flexibility - Federal Signal ended the quarter with $501 million in net debt and $925 million in credit facility availability, providing flexibility for growth and acquisitions [21]

Dividend Announcement - Federal Signal Corporation's Board of Directors declared a quarterly cash dividend of $0.15 per share on its common stock, marking an increase of $0.01 per share, or 7%, compared to the previous quarter [1] - The dividend is scheduled to be payable on March 26, 2026, to stockholders of record as of March 13, 2026 [1] Company Overview - Federal Signal Corporation, founded in 1901, is a leading global designer, manufacturer, and supplier of equipment that serves municipal, governmental, industrial, and commercial customers [2] - The company operates two main groups: Environmental Solutions and Safety and Security Systems, and is headquartered in Downers Grove, Illinois, with manufacturing facilities worldwide [2]

Financial Performance - Net sales for the year ended December 31, 2025 were $2.18 billion, an increase of $319 million, or 17%, from the previous year[127]. - Operating income for the year ended December 31, 2025 was $340.9 million, an increase of $59.5 million, or 21%, from the previous year[127]. - Adjusted EBITDA for the year ended December 31, 2025 was $438.9 million, an increase of $88.3 million, or 25%, from the previous year[127]. - The company achieved a 17% net sales growth in 2025, driven by strong demand for its products and services[126]. - Environmental Solutions Group net sales increased by $280.4 million, or 18%, to $1,837.5 million for the year ended December 31, 2025, compared to $1,557.1 million in 2024[145]. - Safety and Security Systems Group net sales increased by $38.6 million, or 13%, to $343.0 million for the year ended December 31, 2025[152]. - Net income for the year ended December 31, 2025 was $246.6 million, an increase of $30.3 million, or 14%, from the previous year[129]. - Adjusted EBITDA margin for the year ended December 31, 2025 was 20.1%, up from 18.8% in the previous year[140]. Acquisitions and Growth Strategy - In 2025, the Company completed several acquisitions, including Waterblasting, LLC and Scranton Manufacturing Company LLC, enhancing its Environmental Solutions segment[20]. - The company completed 15 acquisitions since 2016, including Hog, New Way, and Kinloch[128]. - Future acquisitions are part of the company's long-term strategy, but there are risks associated with identifying suitable targets and obtaining financing[75]. - Acquisitions may not achieve anticipated revenue and cost benefits, potentially negatively impacting earnings and operational results[76]. - The company may assume unknown liabilities during acquisitions, which could lead to unexpected costs and regulatory exposure[77]. Operational Insights - The Company operates 26 principal manufacturing facilities across five countries, providing products and integrated solutions globally[17]. - The Environmental Solutions Group manufactures a wide range of products, including street sweepers and sewer cleaners, with significant brand recognition in the U.S. market[21]. - Approximately 60% of the Company's workforce of 5,800 employees are U.S. hourly workers, with 8% represented by unions as of December 31, 2025[36]. - The company operates 26 manufacturing facilities across five countries, with approximately 3.0 million square feet dedicated to manufacturing[107]. - The company has established strategic supplier arrangements to mitigate risks related to the availability and pricing of raw materials[29]. Market and Economic Conditions - In 2025, approximately 79% of the company's net sales were generated in the U.S., indicating a heavy reliance on the U.S. economy and municipal government spending[58]. - The company expects a significant portion of its net sales to come from international sales, with 21% of net sales in 2025 attributed to customers outside the U.S.[60]. - Economic downturns may lead to tighter credit markets, adversely affecting customers' ability to secure financing for purchases, potentially resulting in decreased demand for the company's products[64]. - The company operates in highly competitive markets, with competitors having greater financial resources, which may lead to price discounting and margin pressures[65]. - Supply chain disruptions, including shortages in trucking and labor availability, have contributed to delays in receiving manufacturing components and increased transportation costs[69]. Financial Management and Debt - The Company has access to a total principal amount of up to $1.5 billion under the 2025 Credit Agreement, which includes a revolving credit facility of up to $1.1 billion and a term loan facility of up to $400 million[166]. - As of December 31, 2025, the Company had $164.0 million drawn on the Revolver and $400.0 million outstanding under the Term Loan, with $925.3 million of net availability for borrowings[174]. - The Company is subject to financial covenants under the 2025 Credit Agreement, including a net leverage ratio not to exceed 2.75 to 1.00, which it was in compliance with as of December 31, 2025[169]. - The weighted average interest rate on long-term borrowings was 4.8% as of December 31, 2025, which may impact future financing costs[174]. - The Company incurred $4.4 million in new debt issuance costs related to the 2025 Credit Agreement, indicating ongoing investment in financing strategies[173]. Risk Management - The company has experienced high levels of inflation, which could negatively impact expenses such as employee compensation and supply costs[63]. - The company faces risks related to cybersecurity threats, which could compromise sensitive information and adversely affect financial condition and operations[87][89]. - The company is monitoring the impact of the OECD's Pillar Two model rules, which introduce a global minimum corporate tax of 15% effective in certain countries in 2024[58]. - Compliance with environmental regulations is not expected to have a material adverse effect on the company's financial position or cash flow[49]. - The company may increase inventory levels and purchase commitments to mitigate supply chain risks, although there is no assurance that these plans will prevent disruptions[70]. Employee and Workplace Safety - The company emphasizes a holistic total rewards strategy to attract and retain talent, including competitive compensation and benefits[37]. - The company has established a Safety Council to focus on workplace safety, aiming for zero workplace injuries[48]. - The ability to attract and retain key personnel is critical for operational effectiveness, and competition for skilled labor has increased, potentially impacting profit margins[82][83]. Future Outlook and Commitments - The Company anticipates capital expenditures for 2026 to be between $45 million and $55 million, indicating a focus on maintaining operational and financial commitments[177]. - The Company expects to contribute up to $4.6 million to its U.S. defined benefit pension plan in 2026, reflecting ongoing commitments to employee benefits[180]. - Total contractual obligations as of December 31, 2025, amounted to $1,041.9 million, indicating significant future financial commitments[178].

Core Insights - The record performance in 2025 was driven by higher production throughput, continued price realization, and contributions from recent acquisitions [1] - The company achieved a 110 basis point expansion in consolidated adjusted EBITDA margins due to proactive price-cost management and improved manufacturing efficiencies [1] Production and Revenue Strategies - The company is implementing a 'build-more-parts' initiative to vertically integrate certain parts production, aiming to increase recurring parts revenue streams and expand margins over a multiyear timeline [1] - The strategic positioning has shifted the portfolio to be less backlog-intensive, with backlog-heavy products now representing 45% of sales compared to over 50% a decade ago [1] Group Performance - The Safety and Security Systems Group experienced significant margin expansion through volume increases in public safety equipment and realization of targeted cost savings [1] - Operational improvements in the Environmental Solutions Group were supported by better access to labor and utilization of large-scale capacity expansions completed in prior years [1]

Financial Performance - GAAP diluted EPS for Q4 was $0.99 per share, a 22% increase from last year, while adjusted EPS was $1.10, up 36% [1][10] - Consolidated net sales for Q4 reached $597 million, a 27% increase year-over-year, with organic net sales growth of 18% [2] - Adjusted EBITDA for Q4 was $119.4 million, reflecting a 34% increase compared to last year, translating to a margin of 20% [2] - For the full year, adjusted EBITDA was $438.9 million, up 25%, with a margin of 20.1% [3] - Full year net sales were $2.18 billion, a record high, representing a 17% increase from the previous year [4] Orders and Backlog - Total orders for Q4 were $566 million, a 55% increase year-over-year, including $132 million of acquired backlog [6] - Orders for the full year amounted to $2.22 billion, a 20% increase from last year, with a backlog of $1.04 billion at year-end, up 5% [3][4] Operational Highlights - Corporate operating expenses in Q4 increased to $26.5 million, primarily due to acquisition-related expenses [7] - The company generated $97 million in cash from operations during Q4, a 7% increase from the previous year [11] - The company ended Q4 with $501 million in net debt and $925 million available under its credit facility, indicating strong financial flexibility [12] Strategic Initiatives - The company is focused on three multiyear growth initiatives: integration of acquired businesses, new product development, and strengthening its platform [24] - The acquisition of New Way is expected to yield annual synergies of $15 million to $20 million by 2028, with a focus on both cost and revenue synergies [25] - The company is also investing in internal centers of excellence to enhance competitive advantages in niche markets [28] Market Conditions and Outlook - The company anticipates net sales for 2026 to be between $2.55 billion and $2.65 billion, with adjusted EPS between $4.50 and $4.80 [30] - The outlook reflects a continuation of double-digit growth, supported by strong demand across various product lines, particularly in infrastructure and water projects [21][30] - The company expects to maintain a book-to-bill ratio around 1.0, indicating stable order trends moving forward [36]

Financial Data and Key Metrics Changes - For the full year 2025, net sales reached $2.18 billion, an increase of $319 million or 17% compared to the previous year, with organic net sales growth of $205 million or 11% [6] - Operating income for the year was $340.9 million, up $59.5 million or 21% from last year, while net income increased to $246.6 million, a rise of $30.3 million or 14% [6] - Adjusted EBITDA for the year was $438.9 million, up $88.3 million or 25%, translating to a margin of 20.1%, an increase of 130 basis points [7] - For Q4 2025, consolidated net sales were $597 million, an increase of $100 million or 27% year-over-year, with organic net sales growth of $85 million or 18% [9] - Consolidated adjusted EBITDA for Q4 was $119.4 million, up $30.1 million or 34%, with a margin of 20%, an increase of 110 basis points [10] Business Line Data and Key Metrics Changes - Environmental Solutions Group (ESG) reported net sales of $504 million in Q4, an increase of $108 million or 27%, with adjusted EBITDA of $109 million, up $26.1 million or 31% [11] - Safety and Security Systems Group (SSG) had Q4 sales of $93 million, up $17 million or 23%, with adjusted EBITDA of $23.4 million, an increase of $7 million or 43% [12] Market Data and Key Metrics Changes - Orders for the year totaled $2.22 billion, an increase of $374 million or 20% from last year, while Q4 orders were $647 million, up $201 million or 45% [8][10] - Backlog at the end of the year was $1.04 billion, an increase of $45 million or 5% year-over-year [9][26] Company Strategy and Development Direction - The company aims to build a best-in-class specialty vehicle and industrial equipment growth company while decreasing earnings cyclicality, targeting annual low double-digit top-line growth split evenly between inorganic and organic growth [27][28] - Key growth initiatives for 2026 include the integration of recently acquired businesses, new product development, and strengthening the company's platform [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving another record year in 2026, anticipating net sales between $2.55 billion and $2.65 billion, and adjusted EPS between $4.50 and $4.80 per share [32] - The company expects to continue benefiting from strong demand in infrastructure and water projects in North America, particularly for sewer cleaners and safe digging trucks [26][32] Other Important Information - The company executed a new five-year credit facility, replacing an $800 million facility, and completed the acquisition of Neway for approximately $413 million [16][18] - The company paid dividends of $5 million during the quarter, reflecting a dividend of $0.14 per share [18] Q&A Session Summary Question: Can you parse out the expected revenue contributions from Neway and Mega? - Management indicated that the revenue guidance includes about 5%-9% organic growth, with the remainder from contributions from Neway and Mega [36] Question: Are there signs of customers wanting to pre-buy? - Management noted that they have not baked any meaningful pre-buy into their guidance, as publicly funded customers do not typically engage in pre-buy [38] Question: Is organic growth expected to differ between ESG and SSG? - ESG is expected to grow at a faster rate than SSG, which is anticipated to grow at a GDP-plus rate [44] Question: How much of the adjusted order number is organic? - The vast majority of the adjusted order growth is organic, with minimal contributions from acquisitions [109][111] Question: What is the outlook for the municipal publicly funded markets? - Management expects ongoing contributions from pandemic infrastructure projects, with a diversified revenue stream supporting growth in sewer cleaners and street sweepers [113]

Financial Data and Key Metrics Changes - Net sales for 2025 reached $2.18 billion, an increase of $319 million, or 17% compared to last year [6] - Operating income for the year was $340.9 million, up $59.5 million, or 21% from last year [6] - Net income for the year was $246.6 million, an increase of $30.3 million, or 14% from last year [6] - Adjusted EBITDA for the year was $438.9 million, up $88.3 million, or 25% compared to last year, with a margin of 20.1% [7] - Consolidated net sales for Q4 were $597 million, an increase of $100 million, or 27% compared to last year [9] - GAAP diluted EPS for the quarter was $0.99 per share, up $0.18 per share, or 22% from last year [10] Business Line Data and Key Metrics Changes - Environmental Solutions Group (ESG) net sales were $504 million, an increase of $108 million, or 27% compared to last year [11] - ESG's Adjusted EBITDA for the quarter was $109 million, up $26.1 million, or 31% compared to last year [11] - Safety and Security Systems Group (SSG) fourth quarter sales were $93 million, up $17 million or 23% compared to last year [12] - SSG's Adjusted EBITDA for the quarter was $23.4 million, up $7 million or 43% from last year [12] Market Data and Key Metrics Changes - Orders for the year were $2.22 billion, an increase of $374 million, or 20% from last year [8] - Backlog at the end of the year was $1.04 billion, an increase of $45 million or 5% from last year [9] - Q4 orders were $647 million, up $201 million, or 45% from last year [10] Company Strategy and Development Direction - The company aims to build a best-in-class specialty vehicle and industrial equipment growth company while decreasing the cyclicality of earnings streams [27] - Focus on three critical multi-year growth initiatives: integration of acquired businesses, new product development, and strengthening the platform [28] - The company expects to deliver $15 million-$20 million in annual synergies from the New Way acquisition by the end of 2028 [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving another record year in 2026, anticipating net sales between $2.55 billion and $2.65 billion [33] - The company expects a tax rate of approximately 25% for 2026, excluding any discrete tax benefits [14] - Management noted strong demand for infrastructure and water projects in North America, contributing to order growth [26] Other Important Information - The company executed a new five-year credit facility, replacing the previous $800 million facility [16] - The company generated $97 million of cash from operations during Q4, an increase of $7 million or 7% from Q4 last year [15] - The company paid dividends of $5 million during the quarter, reflecting a dividend of $0.14 per share [18] Q&A Session Summary Question: Can you parse out the expected revenue contributions from New Way and Mega? - Management indicated that the revenue guidance includes about 5%-9% organic growth, with the rest from contributions from New Way and Mega [37] Question: What feedback is being received from dealers regarding order trends? - Management noted that publicly funded customers do not engage in pre-buy, and traction is expected from non-publicly funded customers [40] Question: Is organic growth expected to differ between ESG and SSG? - ESG is expected to grow at a faster rate than SSG, which is anticipated to grow at a GDP-plus rate [45] Question: How much of the adjusted pro forma order number is organic? - The vast majority of the adjusted pro forma order growth is organic, with minimal contributions from acquisitions [109] Question: What is the outlook for the municipal publicly funded markets? - Management expects ongoing contributions from pandemic infrastructure projects, with strong orders for sewer cleaners and street sweepers [113]

Financial Data and Key Metrics Changes - For the full year 2025, net sales reached $2.18 billion, an increase of $319 million, or 17% compared to last year. Organic net sales growth was $205 million, or 11% [5] - Operating income for the year was $340.9 million, up $59.5 million, or 21% from last year. Net income increased to $246.6 million, up $30.3 million, or 14% from last year [5] - Adjusted EBITDA for the year was $438.9 million, up $88.3 million, or 25% compared to last year, with a margin of 20.1%, an increase of 130 basis points [6] - For Q4 2025, consolidated net sales were $597 million, an increase of $100 million, or 27% compared to Q4 2024. Organic net sales growth for the quarter was $85 million, or 18% [7] - Consolidated adjusted EBITDA for Q4 was $119.4 million, up $30.1 million, or 34% compared to last year, with a margin of 20%, an increase of 110 basis points [8] Business Line Data and Key Metrics Changes - Environmental Solutions Group (ESG) reported net sales of $504 million in Q4, an increase of $108 million, or 27% compared to last year. Adjusted EBITDA for ESG was $109 million, up 31% [9] - Safety and Security Systems Group (SSG) achieved Q4 sales of $93 million, up $17 million, or 23% compared to last year, with adjusted EBITDA of $23.4 million, up 43% [10] Market Data and Key Metrics Changes - Orders for Q4 were $647 million, up $201 million, or 45% from last year, including $132 million of acquired backlog [8] - Backlog at the end of the year was $1.04 billion, an increase of $45 million, or 5% from last year [7] Company Strategy and Development Direction - The company aims to build a best-in-class specialty vehicle and industrial equipment growth company while decreasing the cyclicality of earnings streams [24] - Focus on three critical multi-year growth initiatives: successful integration of acquired businesses, new product development, and strengthening the platform [26] - The company expects to deliver $15 million-$20 million in annual synergies from the New Way acquisition by the end of 2028, with half tied to cost savings and the other half to sales synergies [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving another record year in 2026, anticipating net sales between $2.55 billion and $2.65 billion, and adjusted EPS between $4.50 and $4.80 per share [30] - The company expects continued strong demand across both publicly funded and industrial product lines, particularly in sewer cleaners and safe digging trucks [23] Other Important Information - The company executed a new five-year credit facility, replacing the previous $800 million facility, and completed the acquisition of Neway for approximately $413 million [14] - The company generated $97 million of cash from operations during Q4, an increase of $7 million, or 7% from Q4 last year [13] Q&A Session Summary Question: Can you parse out the expected revenue contributions from Neway and Mega? - Management indicated that the revenue guidance includes about 5%-9% organic growth, with the remainder from contributions from Neway and Mega [35] Question: What feedback are you receiving from dealers regarding order trends? - Management noted that they have not baked any meaningful pre-buy into their guidance, as publicly funded customers do not typically engage in pre-buy [37] Question: Is organic growth expected to be similar for both ESG and SSG? - ESG is expected to grow at a faster rate than SSG, which is anticipated to grow at a GDP-plus rate [42] Question: How much of the $64 million adjusted order number is organic? - The vast majority of the adjusted order growth is organic, with minimal contributions from acquisitions [107] Question: What is the outlook for the municipal publicly funded markets? - Management expects ongoing contributions from pandemic infrastructure projects, with strong orders for sewer cleaners and street sweepers [110]

Federal Signal Q4 2025 Earnings Call February 25, 2026 Jennifer Sherman, President & Chief Executive Officer Ian Hudson, SVP, Chief Financial Officer Felix Boeschen, VP, Corporate Strategy & Investor Relations Safe Harbor This presentation contains unaudited financial information and various forward-looking statements as of the date hereof and we undertake no obligation to update these forward- looking statements regardless of new developments or otherwise. Statements in this presentation that are not histo ...