Core Insights - Federal Signal Corporation reported a consolidated net sales of $555 million for Q3 2025, marking a 17% increase year-over-year, with net income rising to $68.1 million or $1.11 per diluted share, compared to $53.9 million or $0.87 per diluted share in the same quarter last year [3][4][9]. Financial Performance - The company achieved a consolidated operating income of $94.0 million, up 24% from the prior year, with an operating margin of 16.9%, an increase from 16.0% [6][9]. - Adjusted EBITDA for Q3 was $116.2 million, reflecting a 25% increase year-over-year, with an adjusted EBITDA margin of 20.9%, up from 19.6% [7][9]. - The Environmental Solutions Group reported net sales of $466 million, a 17% increase, while the Safety and Security Systems Group saw net sales of $90 million, an 18% increase [5][9]. Orders and Backlog - Consolidated orders for the third quarter were $467 million, a 10% increase compared to the prior year, with a backlog of $992 million as of September 30, 2025 [9][10]. Outlook and Guidance - The company raised its 2025 adjusted EPS outlook to a range of $4.09 to $4.17, up from the previous range of $3.92 to $4.10, and increased its net sales outlook to between $2.10 billion and $2.14 billion [9][15]. Acquisition and Financial Flexibility - Federal Signal announced the acquisition of Scranton Manufacturing Company for an initial consideration of $396 million, with additional payments for manufacturing facilities [12]. - The company secured a new five-year credit facility of $1.5 billion, enhancing its financial flexibility to fund growth opportunities [10][13][14].

Acquisition Details - Federal Signal Corporation will acquire Scranton Manufacturing Company Inc. (New Way Trucks) for $396 million, plus an additional $30 million for facilities in Iowa and Mississippi, and up to $54 million in performance-based earnouts [1][2][4] - The acquisition is expected to close in the fourth quarter of 2025, pending regulatory approval [2] Company Profile - New Way Trucks is a family-owned business recognized as one of the fastest-growing manufacturers of refuse collection vehicles in the U.S., offering a range of products including rear, front, and automated side loaders [2] Strategic Implications - The acquisition will create a new vertical within Federal Signal's specialty vehicle group, with expectations of capturing synergies and accelerating New Way's growth and margin trajectory [3] - Federal Signal plans to implement its chassis and inventory management practices to enhance New Way's operations [3] Financial Metrics - The acquisition price equates to approximately 11 times New Way's estimated 2026 EBITDA, decreasing to about seven times by 2028 as integration benefits are realized [4] - Federal Signal anticipates the deal to be neutral to earnings in 2026 due to integration costs and interest expenses, but accretive by 2028, with earnings per share projected to rise by $0.40 to $0.45 [5] Cost Synergies - Annual cost synergies are projected to reach between $15 million and $20 million by the end of 2028 [5]