Core Viewpoint - Federal Signal is positioned for continued growth and multibagger returns due to its leadership in niche markets and strategic acquisitions [1][3]. Company Overview - Federal Signal manufactures vehicles and equipment for maintenance, infrastructure, and public safety, holding a leading market share in its segments [2][4]. - The company operates through two main segments: Environmental Solutions Group (83% of sales) and Safety and Security Systems Group (17% of sales) [4]. Revenue Sources - 41% of sales come from the cyclical industrial sector, while 51% are generated from publicly funded sources, providing revenue stability [5]. - The aftermarket segment, accounting for 27% of revenue, contributes recurring maintenance revenue and equipment-as-a-service [6]. Growth Drivers - The vacuum trucks segment, which represents 22% of sales, benefits from the adoption of safe digging practices across North America [7]. - Federal Signal has made 11 acquisitions since 2016, expanding into new verticals and enhancing growth potential [8][9]. Acquisition Strategy - The company targets reasonably priced niche-market leaders for acquisitions, exemplified by the purchases of Ground Force Worldwide and TowHaul, which positioned it as a leader in metal-extraction support [9][10]. - The acquisition of Trackless Vehicles for $54 million further diversified its offerings into snow and ice management and vegetation care [10]. Financial Performance - Federal Signal has a return on invested capital (ROIC) of 15%, exceeding its weighted-average cost of capital (WACC) of 10%, indicating effective capital utilization [11]. - The company has achieved a 10% annual sales growth over the past decade, with management targeting low double-digit growth moving forward [12]. Dividend Policy - The company has quadrupled its dividend payments since 2014, currently offering a 0.5% yield with a low payout ratio of 15%, allowing room for further increases and M&A activities [13]. Valuation - Federal Signal's price-to-earnings (P/E) ratio is currently at 26, comparable to the S&P 500 average of 27, suggesting a fair valuation following a recent 14% price dip [14].

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents unaudited condensed consolidated financial statements for Q2 2024 and 2023, with detailed notes on accounting policies and financial performance [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations Highlights | Metric | Period | 2024 (M$) | 2023 (M$) | Change (M$) | Change (%) | | :---------------------------------- | :----- | :-------- | :-------- | :---------- | :--------- | | Net sales | 3 months | 490.4 | 442.4 | 48.0 | 11% | | Net sales | 6 months | 915.3 | 827.9 | 87.4 | 11% | | Gross profit | 3 months | 144.0 | 117.3 | 26.7 | 23% | | Gross profit | 6 months | 260.0 | 213.1 | 46.9 | 22% | | Operating income | 3 months | 81.1 | 59.4 | 21.7 | 37% | | Operating income | 6 months | 135.4 | 98.9 | 36.5 | 37% | | Net income | 3 months | 60.8 | 40.3 | 20.5 | 51% | | Net income | 6 months | 112.4 | 67.7 | 44.7 | 66% | | Diluted EPS | 3 months | 0.99 | 0.66 | 0.33 | 50% | | Diluted EPS | 6 months | 1.82 | 1.10 | 0.72 | 65% | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Condensed Consolidated Statements of Comprehensive Income Highlights | Metric | Period | 2024 (M$) | 2023 (M$) | | :---------------------------------- | :----- | :-------- | :-------- | | Net income | 3 months | 60.8 | 40.3 | | Net income | 6 months | 112.4 | 67.7 | | Total other comprehensive (loss) income | 3 months | (1.3) | 3.7 | | Total other comprehensive (loss) income | 6 months | (4.1) | 4.3 | | Comprehensive income | 3 months | 59.5 | 44.0 | | Comprehensive income | 6 months | 108.3 | 72.0 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets Highlights | Metric | June 30, 2024 (M$) | December 31, 2023 (M$) | | :---------------------------------- | :----------------- | :--------------------- | | Cash and cash equivalents | 48.6 | 61.0 | | Accounts receivable, net | 213.6 | 186.2 | | Inventories | 326.9 | 303.4 | | Total current assets | 611.8 | 570.2 | | Total assets | 1,691.5 | 1,620.5 | | Current portion of long-term borrowings and finance lease obligations | 6.5 | 4.7 | | Accounts payable | 87.0 | 66.7 | | Total current liabilities | 211.7 | 195.8 | | Long-term borrowings and finance lease obligations | 248.8 | 294.3 | | Total liabilities | 591.9 | 618.6 | | Total stockholders' equity | 1,099.6 | 1,001.9 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows Highlights | Metric | Six Months Ended June 30, 2024 (M$) | Six Months Ended June 30, 2023 (M$) | Change (M$) | Change (%) | | :---------------------------------- | :---------------------------------- | :---------------------------------- | :---------- | :--------- | | Net cash provided by operating activities | 71.9 | 43.0 | 28.9 | 67.2% | | Net cash used for investing activities | (23.0) | (71.4) | 48.4 | -67.8% | | Net cash (used for) provided by financing activities | (60.5) | 29.2 | (89.7) | -307.9% | | (Decrease) increase in cash and cash equivalents | (12.4) | 1.3 | (13.7) | -1053.8% | | Cash and cash equivalents at end of period | 48.6 | 48.8 | (0.2) | -0.4% | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Condensed Consolidated Statements of Stockholders' Equity Highlights (Six Months Ended June 30, 2024) | Metric | January 1, 2024 (M$) | June 30, 2024 (M$) | | :---------------------------------- | :------------------- | :----------------- | | Common Stock | 70.0 | 70.3 | | Capital in Excess of Par Value | 291.1 | 302.0 | | Retained Earnings | 915.8 | 1,013.5 | | Treasury Stock | (193.7) | (200.8) | | Accumulated Other Comprehensive Loss | (81.3) | (85.4) | | Total Stockholders' Equity | 1,001.9 | 1,099.6 | - Net income for the six months ended June 30, 2024, contributed **$112.4 million** to retained earnings. Cash dividends declared totaled **$14.7 million**, and stock repurchase program activity resulted in a **$0.1 million** decrease in treasury stock[45](index=45&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1 – Summary of Significant Accounting Policies](index=10&type=section&id=Note%201%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) - The Company's products and services are organized into two reportable segments: Environmental Solutions Group and Safety and Security Systems Group, due to shared characteristics and long-term synergies[26](index=26&type=chunk) - No changes to the Company's significant accounting policies were made as disclosed in the Annual Report on Form 10-K for the year ended December 31, 2023[30](index=30&type=chunk) - The Company is currently evaluating the impact of adopting new accounting guidance, ASU 2023-07 (Segment Reporting) and ASU 2023-09 (Income Tax Disclosures), on its financial statement disclosures[28](index=28&type=chunk)[73](index=73&type=chunk) [Note 2 – Acquisitions](index=11&type=section&id=Note%202%20%E2%80%93%20Acquisitions) - On April 3, 2023, the Company acquired Trackless Vehicles Limited for an initial cash consideration of **C$56.3 million** (approximately **$41.9 million**), plus a contingent earn-out payment of up to **C$6.0 million** (approximately **$4.4 million**)[50](index=50&type=chunk) - During the first quarter of 2024, measurement period adjustments for the Trackless acquisition reduced the estimated fair value of contingent consideration by **$0.2 million** and increased acquired intangible assets by **$1.1 million**, resulting in a **$1.3 million** decrease to Goodwill[75](index=75&type=chunk) - Goodwill from the Trackless acquisition, primarily tax-deductible, has been allocated to the Environmental Solutions Group[76](index=76&type=chunk) [Note 3 – Revenue Recognition](index=12&type=section&id=Note%203%20%E2%80%93%20Revenue%20Recognition) Net Sales Disaggregated by Geographic Region | Geographic Region | Three Months Ended June 30, 2024 (M$) | Three Months Ended June 30, 2023 (M$) | Six Months Ended June 30, 2024 (M$) | Six Months Ended June 30, 2023 (M$) | | :------------------ | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | U.S. | 384.4 | 338.9 | 718.7 | 648.0 | | Canada | 69.4 | 69.4 | 128.7 | 113.3 | | Europe/Other | 36.6 | 34.1 | 67.9 | 66.6 | | **Total net sales** | **490.4** | **442.4** | **915.3** | **827.9** | Net Sales Disaggregated by Major Product Line | Major Product Line | Three Months Ended June 30, 2024 (M$) | Three Months Ended June 30, 2023 (M$) | Six Months Ended June 30, 2024 (M$) | Six Months Ended June 30, 2023 (M$) | | :---------------------------------- | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | **Environmental Solutions** | | | | | | Vehicles and equipment | 318.6 | 285.0 | 590.9 | 530.3 | | Parts | 60.1 | 59.6 | 121.1 | 114.4 | | Rental income | 17.4 | 16.9 | 29.4 | 27.9 | | Other | 12.7 | 11.5 | 21.4 | 19.2 | | **Total Environmental Solutions** | **408.8** | **373.0** | **762.8** | **691.8** | | **Safety and Security Systems** | | | | | | Public safety and security equipment | 53.1 | 42.4 | 98.0 | 82.6 | | Industrial signaling equipment | 17.6 | 18.7 | 34.5 | 37.3 | | Warning systems | 10.9 | 8.3 | 20.0 | 16.2 | | **Total Safety and Security Systems** | **81.6** | **69.4** | **152.5** | **136.1** | | **Total net sales** | **490.4** | **442.4** | **915.3** | **827.9** | - Contract liabilities (customer deposits) were **$28.0 million** as of June 30, 2024, down from **$30.9 million** as of December 31, 2023, and are generally recognized as net sales within three to six months[53](index=53&type=chunk) [Note 4 – Inventories](index=12&type=section&id=Note%204%20%E2%80%93%20Inventories) Components of Inventories | (in millions) | June 30, 2024 | December 31, 2023 | | :------------------ | :------------ | :---------------- | | Finished goods | $122.6 | $116.1 | | Raw materials | 173.9 | 154.6 | | Work in process | 30.4 | 32.7 | | **Total inventories** | **$326.9** | **$303.4** | [Note 5 – Debt](index=13&type=section&id=Note%205%20%E2%80%93%20Debt) Long-term Borrowings and Finance Lease Obligations | (in millions) | June 30, 2024 | December 31, 2023 | | :-------------------------------------------------- | :------------ | :---------------- | | Long-term borrowings and finance lease obligations, including current portion | $255.3 | $299.0 | | Less: Current portion of long-term borrowings and finance lease obligations | (6.5) | (4.7) | | **Long-term borrowings and finance lease obligations** | **$248.8** | **$294.3** | - The Company's 2022 Credit Agreement is a senior secured credit facility providing up to **$800 million**, consisting of a **$675 million** revolving credit facility and a **$125 million** term loan, maturing on October 21, 2027[81](index=81&type=chunk) - As of June 30, 2024, the Company had **$131.0 million** drawn on the Revolver, **$122.7 million** outstanding under the term loan, and **$532.9 million** of net availability for borrowings, and was in compliance with all financial covenants[83](index=83&type=chunk)[57](index=57&type=chunk) - The Company uses interest rate swaps (2022 Swap and 2023 Swap, each with a notional amount of **$75.0 million**) as cash flow hedges to fix floating interest rates on variable-rate debt, with fair values of **$0.7 million** asset at June 30, 2024, and **$0.7 million** liability at December 31, 2023[59](index=59&type=chunk)[85](index=85&type=chunk)[61](index=61&type=chunk) [Note 6 – Income Taxes](index=14&type=section&id=Note%206%20%E2%80%93%20Income%20Taxes) Income Tax Expense and Effective Tax Rates | Period | Income Tax Expense (M$) | Effective Tax Rate | | :---------------------------------- | :---------------------- | :----------------- | | Three Months Ended June 30, 2024 | 16.7 | 21.5% | | Three Months Ended June 30, 2023 | 12.4 | 23.5% | | Six Months Ended June 30, 2024 | 16.0 | 12.5% | | Six Months Ended June 30, 2023 | 19.7 | 22.5% | - The six months ended June 30, 2024, included a **$13.0 million** discrete tax benefit from a U.S. federal worthless stock deduction refund and a **$2.6 million** discrete state tax benefit, significantly lowering the effective tax rate for the period[119](index=119&type=chunk)[89](index=89&type=chunk) [Note 7 – Pensions](index=15&type=section&id=Note%207%20%E2%80%93%20Pensions) Net Periodic Pension Expense (Benefit) | (in millions) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :---------------------------------- | :--------------------------------- | :--------------------------------- | :----------------------------- | :----------------------------- | | U.S. Benefit Plan | 0.2 | (0.1) | 0.3 | (0.2) | | Non-U.S. Benefit Plan | 0.1 | 0.2 | 0.2 | 0.3 | | **Total Net Periodic Pension Expense (Benefit)** | **0.3** | **0.1** | **0.5** | **0.1** | [Note 8 – Commitments and Contingencies](index=15&type=section&id=Note%208%20%E2%80%93%20Commitments%20and%20Contingencies) Changes in Warranty Liabilities | (in millions) | 2024 | 2023 | | :---------------------------------- | :--- | :--- | | Balance at January 1 | $9.6 | $9.3 | | Provisions to expense | 4.7 | 3.8 | | Acquisitions | — | 0.1 | | Payments | (4.4) | (3.8) | | **Balance at June 30** | **$9.9** | **$9.4** | - As of June 30, 2024, the Company had **$25.7 million** in outstanding performance and financial standby letters of credit, as well as bid and performance bonds[91](index=91&type=chunk) - The Company is involved in ongoing hearing loss litigation from firefighters, with various cases settled or dismissed over the years. An estimated liability for potential settlement under a 2019 Settlement Agreement has been recognized, with incremental loss not expected to be material[95](index=95&type=chunk)[103](index=103&type=chunk)[134](index=134&type=chunk) [Note 9 – Earnings Per Share](index=18&type=section&id=Note%209%20%E2%80%93%20Earnings%20Per%20Share) Earnings Per Share Reconciliation | (in millions, except per share data) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :---------------------------------- | :--------------------------------- | :--------------------------------- | :----------------------------- | :----------------------------- | | Net income | $60.8 | $40.3 | $112.4 | $67.7 | | Weighted average shares outstanding – Basic | 61.0 | 60.7 | 61.0 | 60.7 | | Dilutive effect of common stock equivalents | 0.7 | 0.7 | 0.7 | 0.7 | | Weighted average shares outstanding – Diluted | 61.7 | 61.4 | 61.7 | 61.4 | | **Earnings per share: Basic** | **$1.00** | **$0.66** | **$1.84** | **$1.12** | | **Earnings per share: Diluted** | **$0.99** | **$0.66** | **$1.82** | **$1.10** | - The Company computes EPS using the two-class method for participating securities and the treasury stock method for potentially dilutive employee stock options and restricted stock units[104](index=104&type=chunk)[105](index=105&type=chunk) [Note 10 – Stockholders' Equity](index=19&type=section&id=Note%2010%20%E2%80%93%20Stockholders'%20Equity) - The Board declared quarterly cash dividends of **$0.12** per common share for Q1 and Q2 2024, totaling **$7.3 million** and **$7.4 million** respectively. A dividend of **$0.12** per share was also declared for Q3 2024[139](index=139&type=chunk) - Under its stock repurchase program, the Company repurchased **1,600 shares** for **$0.1 million** during the six months ended June 30, 2024. No shares were repurchased in the three months ended June 30, 2024, or in the prior-year periods[140](index=140&type=chunk) Changes in Accumulated Other Comprehensive Loss (Six Months Ended June 30, 2024) | (in millions) | Actuarial Losses | Prior Service Costs | Foreign Currency Translation | Interest Rate Swaps | Total | | :-------------------------------------------------- | :--------------- | :------------------ | :--------------------------- | :------------------ | :------ | | Balance at January 1, 2024 | $(69.7) | $(2.0) | $(10.1) | $0.5 | $(81.3) | | Net current-period other comprehensive income (loss) | 0.9 | 0.1 | (5.3) | 0.2 | (4.1) | | **Balance at June 30, 2024** | **$(68.8)** | **$(1.9)** | **$(15.4)** | **$0.7** | **$(85.4)** | [Note 11 – Segment Information](index=21&type=section&id=Note%2011%20%E2%80%93%20Segment%20Information) Segment Performance Highlights | Metric | Period | Environmental Solutions (M$) | Safety and Security Systems (M$) | Corporate and Eliminations (M$) | Total (M$) | | :---------------------------------- | :----- | :--------------------------- | :------------------------------- | :------------------------------ | :--------- | | Net sales | 3 months | 408.8 | 81.6 | — | 490.4 | | Net sales | 6 months | 762.8 | 152.5 | — | 915.3 | | Operating income (loss) | 3 months | 72.9 | 18.3 | (10.1) | 81.1 | | Operating income (loss) | 6 months | 124.6 | 32.1 | (21.3) | 135.4 | | Total assets (June 30, 2024) | | 1,361.1 | 288.5 | 41.9 | 1,691.5 | [Note 12 – Fair Value Measurements](index=22&type=section&id=Note%2012%20%E2%80%93%20Fair%20Value%20Measurements) - The Company uses a three-level fair value hierarchy: Level 1 for quoted prices in active markets, Level 2 for observable inputs other than Level 1, and Level 3 for unobservable inputs[175](index=175&type=chunk) - Cash equivalents are classified as Level 1, interest rate swaps as Level 2 (valued using discounted cash flow), and contingent consideration liabilities as Level 3 (valued using an income approach due to unobservable inputs)[117](index=117&type=chunk)[176](index=176&type=chunk)[149](index=149&type=chunk) Roll-forward of Level 3 Fair Value Measurements (Contingent Consideration Liability) | (in millions) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :-------------------------------------------------- | :----------------------------- | :----------------------------- | | Contingent consideration liability, at January 1 | $4.9 | $2.7 | | Acquisitions, including measurement period adjustments | (0.2) | 8.5 | | Settlements of contingent consideration liabilities | — | (0.5) | | Foreign currency translation | (0.1) | — | | Total expense (benefit) included in earnings | 0.1 | (0.2) | | **Contingent consideration liability, at June 30** | **$4.7** | **$10.5** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Provides management's analysis of Q2 2024 financial condition and operational results, discussing key drivers of revenue, profitability, and liquidity [Executive Summary](index=24&type=section&id=Executive%20Summary) - Net sales for the three months ended June 30, 2024, increased by **$48.0 million** (**11%**) compared to the prior-year quarter, driven by higher sales volumes and pricing actions[184](index=184&type=chunk) - Operating income for the three months ended June 30, 2024, increased by **$21.7 million** (**37%**), with consolidated operating margin improving to **16.5%** from **13.4%** in the prior-year quarter[184](index=184&type=chunk) - Net income for the three months ended June 30, 2024, increased by **$20.5 million**, while for the six months, it increased by **$44.7 million**, largely due to higher income before taxes and a reduction in income tax expense[186](index=186&type=chunk)[159](index=159&type=chunk) - Total orders for the three months ended June 30, 2024, decreased by **$7 million** (**1%**) to **$473 million**, but for the six months, increased by **$21 million** (**2%**) to **$976 million**[7](index=7&type=chunk)[187](index=187&type=chunk) - Consolidated backlog at June 30, 2024, was **$1.08 billion**, an increase of **$73 million** (**7%**) compared to the prior-year quarter[160](index=160&type=chunk) [Operating Results](index=26&type=section&id=Operating%20Results) [Net sales](index=26&type=section&id=Net%20sales%20(Operating%20Results)) - Consolidated net sales increased by **$48.0 million** (**11%**) for the three months and **$87.4 million** (**11%**) for the six months ended June 30, 2024, driven by higher sales volumes and pricing actions[163](index=163&type=chunk) - Environmental Solutions Group net sales increased by **10%** for both periods, primarily from dump truck bodies, sewer cleaners, and street sweepers. Safety and Security Systems Group net sales increased by **18%** (3 months) and **12%** (6 months), mainly from public safety equipment and warning systems[163](index=163&type=chunk) [Cost of sales](index=26&type=section&id=Cost%20of%20sales%20(Operating%20Results)) - Cost of sales increased by **$21.3 million** (**7%**) for the three months and **$40.5 million** (**7%**) for the six months ended June 30, 2024, primarily due to higher sales volumes[161](index=161&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) - The Environmental Solutions Group saw a **5%** increase in cost of sales for the three months and a **6%** increase for the six months, also impacted by increased material costs for the six-month period[191](index=191&type=chunk)[192](index=192&type=chunk) [Gross profit](index=27&type=section&id=Gross%20profit%20(Operating%20Results)) - Gross profit increased by **$26.7 million** (**23%**) for the three months and **$46.9 million** (**22%**) for the six months ended June 30, 2024[161](index=161&type=chunk)[221](index=221&type=chunk) - Gross profit margin improved to **29.4%** (from **26.5%**) for the three months and **28.4%** (from **25.7%**) for the six months, driven by improved operating leverage from higher sales volumes and pricing actions across both segments[221](index=221&type=chunk) [SEG&A expenses](index=27&type=section&id=SEG%26A%20expenses%20(Operating%20Results)) - Selling, Engineering, General and Administrative (SEG&A) expenses increased by **$4.9 million** (**9%**) for the three months and **$10.1 million** (**10%**) for the six months ended June 30, 2024[161](index=161&type=chunk)[166](index=166&type=chunk) - As a percentage of net sales, SEG&A expenses decreased to **11.9%** (from **12.1%**) for the three months and to **12.6%** (from **12.7%**) for the six months, despite increases primarily due to higher sales commissions and incentive-based compensation[166](index=166&type=chunk) [Operating income](index=27&type=section&id=Operating%20income%20(Operating%20Results)) - Operating income increased by **$21.7 million** (**37%**) for the three months and **$36.5 million** (**37%**) for the six months ended June 30, 2024[161](index=161&type=chunk)[194](index=194&type=chunk) - Consolidated operating margin improved to **16.5%** (from **13.4%**) for the three months and **14.8%** (from **11.9%**) for the six months, driven by gross profit improvements, partially offset by increased SEG&A and acquisition-related expenses[194](index=194&type=chunk) [Interest expense, net](index=27&type=section&id=Interest%20expense%2C%20net%20(Operating%20Results)) - Interest expense, net, decreased by **$2.4 million** for the three months and **$3.9 million** for the six months ended June 30, 2024, primarily due to reductions in average debt levels[161](index=161&type=chunk)[223](index=223&type=chunk) [Other expense, net](index=27&type=section&id=Other%20expense%2C%20net%20(Operating%20Results)) - Other expense, net, decreased by **$0.7 million** for the three months and **$0.6 million** for the six months ended June 30, 2024, mainly due to the non-recurrence of an **$0.8 million** environmental remediation charge from the prior year[161](index=161&type=chunk)[167](index=167&type=chunk) [Income tax expense](index=28&type=section&id=Income%20tax%20expense%20(Operating%20Results)) - Income tax expense increased by **$4.3 million** for the three months ended June 30, 2024, but decreased by **$3.7 million** for the six months[161](index=161&type=chunk) - The effective tax rate for the three months was **21.5%** (down from **23.5%**), and for the six months was **12.5%** (down from **22.5%**), significantly impacted by **$15.6 million** in discrete tax benefits from a worthless stock deduction refund in 2024[169](index=169&type=chunk)[226](index=226&type=chunk) [Net income](index=28&type=section&id=Net%20income%20(Operating%20Results)) - Net income increased by **$20.5 million** for the three months and **$44.7 million** for the six months ended June 30, 2024[161](index=161&type=chunk)[227](index=227&type=chunk)[198](index=198&type=chunk) - This growth was primarily driven by improved operating income, lower interest expense, and lower other expense, with the six-month period also benefiting from reduced income tax expense[198](index=198&type=chunk)[227](index=227&type=chunk) [Environmental Solutions](index=28&type=section&id=Environmental%20Solutions%20(MD%26A)) [Three months ended June 30, 2024 vs. three months ended June 30, 2023](index=28&type=section&id=Three%20months%20ended%20June%2030%2C%202024%20vs.%20three%20months%20ended%20June%2030%2C%202023%20(Environmental%20Solutions)) Environmental Solutions Group Performance (Three Months) | Metric | 2024 (M$) | 2023 (M$) | Change (M$) | Change (%) | | :---------------------------------- | :-------- | :-------- | :---------- | :--------- | | Net sales | 408.8 | 373.0 | 35.8 | 10% | | Operating income | 72.9 | 56.2 | 16.7 | 30% | | Operating margin | 17.8% | 15.1% | 2.7% | | | Total orders | 396.2 | 408.6 | (12.4) | (3%) | - Net sales increased by **10%**, driven by higher sales volumes and pricing actions, particularly in U.S. sales of sewer cleaners, street sweepers, and dump truck bodies[231](index=231&type=chunk) - Total orders decreased by **3%**, primarily due to reductions in U.S. orders for safe-digging trucks and street sweepers, partially offset by increases in non-U.S. orders[229](index=229&type=chunk)[200](index=200&type=chunk) [Six months ended June 30, 2024 vs. six months ended June 30, 2023](index=29&type=section&id=Six%20months%20ended%20June%2030%2C%202024%20vs.%20six%20months%20ended%20June%2030%2C%202023%20(Environmental%20Solutions)) Environmental Solutions Group Performance (Six Months) | Metric | 2024 (M$) | 2023 (M$) | Change (M$) | Change (%) | | :---------------------------------- | :-------- | :-------- | :---------- | :--------- | | Net sales | 762.8 | 691.8 | 71.0 | 10% | | Operating income | 124.6 | 93.8 | 30.8 | 33% | | Operating margin | 16.3% | 13.6% | 2.7% | | | Total orders | 823.9 | 804.4 | 19.5 | 2% | | Backlog (June 30) | 1,023.4 | 939.7 | 83.7 | 9% | - Net sales increased by **10%**, driven by U.S. sales of street sweepers, dump truck bodies, and safe-digging trucks, and non-U.S. sales of multi-purpose maintenance vehicles and metal extraction support equipment[203](index=203&type=chunk) - Total orders increased by **2%**, with significant non-U.S. order growth in refuse trucks and multi-purpose maintenance vehicles offsetting reductions in U.S. orders for street sweepers and safe-digging trucks[278](index=278&type=chunk) [Safety and Security Systems](index=30&type=section&id=Safety%20and%20Security%20Systems%20(MD%26A)) [Three months ended June 30, 2024 vs. three months ended June 30, 2023](index=30&type=section&id=Three%20months%20ended%20June%2030%2C%202024%20vs.%20three%20months%20ended%20June%2030%2C%202023%20(Safety%20and%20Security%20Systems)) Safety and Security Systems Group Performance (Three Months) | Metric | 2024 (M$) | 2023 (M$) | Change (M$) | Change (%) | | :---------------------------------- | :-------- | :-------- | :---------- | :--------- | | Net sales | 81.6 | 69.4 | 12.2 | 18% | | Operating income | 18.3 | 14.1 | 4.2 | 30% | | Operating margin | 22.4% | 20.3% | 2.1% | | | Total orders | 76.8 | 71.6 | 5.2 | 7% | - Net sales increased by **18%**, driven by strong U.S. sales of public safety equipment and warning systems[208](index=208&type=chunk) - Total orders increased by **7%**, primarily due to a **$9.7 million** improvement in U.S. public safety equipment orders, partially offset by a **$4.6 million** reduction in non-U.S. orders[236](index=236&type=chunk) [Six months ended June 30, 2024 vs. six months ended June 30, 2023](index=31&type=section&id=Six%20months%20ended%20June%2030%2C%202024%20vs.%20six%20months%20ended%20June%2030%2C%202023%20(Safety%20and%20Security%20Systems)) Safety and Security Systems Group Performance (Six Months) | Metric | 2024 (M$) | 2023 (M$) | Change (M$) | Change (%) | | :---------------------------------- | :-------- | :-------- | :---------- | :--------- | | Net sales | 152.5 | 136.1 | 16.4 | 12% | | Operating income | 32.1 | 26.2 | 5.9 | 23% | | Operating margin | 21.0% | 19.3% | 1.7% | | | Total orders | 151.8 | 150.5 | 1.3 | 1% | | Backlog (June 30) | 56.5 | 66.8 | (10.3) | (15%) | - Net sales increased by **12%**, driven by U.S. sales of public safety equipment and warning systems[211](index=211&type=chunk) - Total orders increased by **1%**, with U.S. orders up **$13.9 million** due to public safety equipment, largely offset by a **$12.6 million** reduction in non-U.S. orders[239](index=239&type=chunk) [Corporate Expenses](index=31&type=section&id=Corporate%20Expenses) - Corporate operating expenses for the three months ended June 30, 2024, decreased to **$10.1 million** (from **$10.9 million**), primarily due to lower medical expenses[145](index=145&type=chunk)[258](index=258&type=chunk) - For the six months ended June 30, 2024, corporate operating expenses were **$21.3 million** (compared to **$21.1 million**), with increases in stock and incentive-based compensation offset by a **$1.8 million** insurance recovery and lower medical expenses[145](index=145&type=chunk)[242](index=242&type=chunk) [Seasonality of Company's Business](index=31&type=section&id=Seasonality%20of%20Company's%20Business) - The Company typically experiences lower equipment sales in the first calendar quarter due to seasonal factors like buying patterns, delivery schedules, and holiday/weather impacts[259](index=259&type=chunk) - Rental income and parts sales are generally higher in the second and third quarters, aligning with increased maintenance activities in North America during milder weather conditions[259](index=259&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=32&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) - Cash and cash equivalents totaled **$48.6 million** at June 30, 2024, with **$23.1 million** held by foreign subsidiaries, generally considered permanently reinvested[215](index=215&type=chunk) - Net cash provided by operating activities increased to **$71.9 million** for the six months ended June 30, 2024 (from **$43.0 million** in 2023), driven by higher net income and cash benefits from a U.S. federal worthless stock deduction refund[261](index=261&type=chunk) - Net cash used for investing activities decreased to **$23.0 million** for the six months ended June 30, 2024 (from **$71.4 million** in 2023), primarily due to fewer acquisition-related payments[245](index=245&type=chunk) - Net cash used for financing activities was **$60.5 million** for the six months ended June 30, 2024 (compared to **$29.2 million** provided in 2023), reflecting debt paydowns (**$39.2 million** Revolver, **$1.6 million** term loan), cash dividends (**$14.7 million**), and share repurchases (**$0.1 million**)[216](index=216&type=chunk) - As of June 30, 2024, the Company had **$532.9 million** of net availability for borrowings under its 2022 Credit Agreement and was in compliance with all financial covenants[244](index=244&type=chunk)[262](index=262&type=chunk) - Capital expenditures for 2024 are anticipated to be in the range of **$35 million** to **$40 million**[246](index=246&type=chunk) [Contractual Obligations and Off-Balance Sheet Arrangements](index=32&type=section&id=Contractual%20Obligations%20and%20Off-Balance%20Sheet%20Arrangements) - There have been no material changes in the Company's contractual obligations and off-balance sheet arrangements during the six months ended June 30, 2024, compared to those described in the 2023 Annual Report on Form 10-K[247](index=247&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Reports no significant changes in market risk exposure during H1 2024, referencing detailed disclosures in the 2023 Annual Report on Form 10-K - No significant changes in the Company's exposure to market risk occurred during the six months ended June 30, 2024[264](index=264&type=chunk) - For detailed information on market risk, refer to Item 7A of the Company's Annual Report on Form 10-K for the year ended December 31, 2023[264](index=264&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2024, with no material changes to internal control over financial reporting identified - The Company's disclosure controls and procedures were evaluated by management, including the CEO and CFO, and concluded to be effective as of June 30, 2024[265](index=265&type=chunk) - There were no changes in the Company's internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting during the three months ended June 30, 2024[248](index=248&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) Incorporates legal proceedings information by reference from Note 8, primarily discussing ongoing hearing loss litigation - Information regarding legal proceedings is incorporated by reference from Note 8 – Commitments and Contingencies in Part I of this Form 10-Q[268](index=268&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) Reports no material changes to the company's risk factors as described in the 2023 Annual Report on Form 10-K - There have been no material changes in the Company's risk factors as described in Item 1A, Risk Factors, of the Company's Annual Report on Form 10-K for the year ended December 31, 2023[269](index=269&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports no share repurchase activity during Q2 2024 under publicly announced stock repurchase programs Common Stock Repurchase Activity (Three Months Ended June 30, 2024) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | | :---------------------------------- | :------------------------------- | :--------------------------- | :------------------------------------------------------------------------------- | :------------------------------------------------------------------------------- | | April 2024 (3/31/24 - 5/4/24) | — | — | — | $53,418,519 | | May 2024 (5/5/24 - 6/1/24) | — | — | — | $53,418,519 | | June 2024 (6/2/24 - 6/29/24) | — | — | — | $53,418,519 | [Item 3. Defaults Upon Senior Securities](index=34&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Reports no defaults upon senior securities during the period - No defaults upon senior securities were reported[249](index=249&type=chunk) [Item 4. Mine Safety Disclosures](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) States that this item is not applicable to the company's operations - This item is not applicable to the Company[250](index=250&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) Reports VP, Corporate Controller and CAO resignation, Ian A. Hudson's new role, and Q2 2024 earnings press release and presentation - Lauren B. Elting resigned from her position as Vice President, Corporate Controller and Chief Accounting Officer, effective July 25, 2024[251](index=251&type=chunk) - Ian A. Hudson, the Company's Senior Vice President and Chief Financial Officer, will also serve as the principal accounting officer following Ms. Elting's resignation[251](index=251&type=chunk) - The Company issued a press release announcing its financial results for the three and six months ended June 30, 2024, and posted the Q2 2024 earnings call presentation slides on its website on July 25, 2024[252](index=252&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with Form 10-Q, including corporate documents, credit agreement amendments, CEO/CFO certifications, and Q2 financial results materials - Key exhibits include the Restated Certificate of Incorporation, Second Amended and Restated By-laws, and the First Amendment to the Third Amended and Restated Credit Agreement[273](index=273&type=chunk) - Certifications under Sections 302 and 906 of the Sarbanes-Oxley Act from both the CEO and CFO are included[254](index=254&type=chunk)[273](index=273&type=chunk) - The Second Quarter Financial Results Press Release and Earnings Call Presentation Slides are attached as Exhibits 99.1 and 99.2, respectively[254](index=254&type=chunk)[273](index=273&type=chunk) SIGNATURE The report was signed by Ian A. Hudson, Senior Vice President and Chief Financial Officer, on July 25, 2024 - The report was duly signed on behalf of Federal Signal Corporation by Ian A. Hudson, Senior Vice President and Chief Financial Officer (Principal Financial Officer)[276](index=276&type=chunk) - The signing date of the report was July 25, 2024[276](index=276&type=chunk)

OAK BROOK, Ill., June 13, 2024 /PRNewswire/ -- Ernst & Young LLP (EY US) today announced that Jennifer Sherman, President and Chief Executive Officer of Federal Signal Corporation, was named an Entrepreneur Of The Year® 2024 Midwest Award winner. Entrepreneur Of The Year is the preeminent competitive awards program for entrepreneurs and leaders of high-growth companies. "I am honored to be included in this prestigious group of business leaders. This award is a testament to the hard work and dedication of ou ...

Core Viewpoint - Investors are increasingly seeking growth stocks that demonstrate above-average growth potential, with Federal Signal (FSS) identified as a strong candidate due to its favorable growth metrics and Zacks Rank [1][2]. Group 1: Earnings Growth - Federal Signal's historical EPS growth rate is 8.7%, but projected EPS growth for this year is significantly higher at 19.5%, outperforming the industry average of 5.7% [5]. Group 2: Cash Flow Growth - The company exhibits a year-over-year cash flow growth of 24%, which is substantially above the industry average of -7.7% [6]. - Over the past 3-5 years, Federal Signal's annualized cash flow growth rate has been 11.8%, compared to the industry average of 9.7% [7]. Group 3: Earnings Estimate Revisions - There have been upward revisions in current-year earnings estimates for Federal Signal, with the Zacks Consensus Estimate increasing by 0.4% over the past month [9]. - The positive trend in earnings estimate revisions supports the stock's potential for near-term price movements [8]. Group 4: Overall Assessment - Federal Signal has achieved a Growth Score of B and holds a Zacks Rank 2, indicating it is a solid choice for growth investors [10][11].

-- Approval provides U.S. veterans and other U.S. government agency employees who suffer gait and balance impairment due to multiple sclerosis (MS) access to the only portable neurostimulation therapy with the potential to generate neuroplasticity -- NEWTOWN, Pa., May 20, 2024 (GLOBE NEWSWIRE) -- Helius Medical Technologies, Inc. (Nasdaq:HSDT) ("Helius" or the "Company"), a neurotech company focused on delivering a novel therapeutic neuromodulation approach for balance and gait deficits, today announced the ...

OAK BROOK, Ill., May 16, 2024 /PRNewswire/ -- Federal Signal Corporation (NYSE: FSS) (the "Company"), a leader in environmental and safety solutions, announced today that Jennifer L. Sherman, president and chief executive officer, Ian A. Hudson, senior vice president and chief financial officer, and Felix M. Boeschen, vice president, corporate strategy and investor relations, will participate in the KeyBanc Capital Markets 2024 Industrials and Basic Materials Conference in Boston, Massachusetts, on Thursday ...

Growth stocks are attractive to many investors, as above-average financial growth helps these stocks easily grab the market's attention and produce exceptional returns. But finding a great growth stock is not easy at all.In addition to volatility, these stocks carry above-average risk by their very nature. Also, one could end up losing from a stock whose growth story is actually over or nearing its end.However, the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the trad ...

Federal Signal Q1 2024 Earnings Call April 30, 2024 Safe Harbor This presentation also contains references to certain non-GAAP financial information. Such items are reconciled herein, in our earnings news release provided as of the date of this presentation or in other investor materials filed with the SEC. | --- | --- | |-------|-------------------------------------------------| | | | | • | Net sales of $425 M, up $39 M, or 10% | | | • Organic growth of $28 M, or 7% | | • | Operating income of $54.3 M, up ...

Table of Contents 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 OR ☐ 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 i ...

Federal Signal (FSS) came out with quarterly earnings of $0.64 per share, beating the Zacks Consensus Estimate of $0.55 per share. This compares to earnings of $0.46 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 16.36%. A quarter ago, it was expected that this company that makes products ranging from street sweepers to toll booth technology for government, industrial and commercial customers would post earnings of $0.67 per ...