Financial Data and Key Metrics Changes - Consolidated net sales for Q2 were $565 million, a 15% increase year over year, with organic sales growth of 9% [5][6] - Operating income rose to $97.7 million, up 20% compared to last year [6] - Adjusted EBITDA for the quarter was $118.2 million, reflecting a 21% increase year over year, with an adjusted EBITDA margin of 20.9%, up 100 basis points [6][7] - GAAP diluted EPS was $1.16, a 17% increase, while adjusted EPS was $1.17, up 23% [7][12] - Cash generated from operations was $60 million, a 47% increase from the previous year [12][13] Business Line Data and Key Metrics Changes - Environmental Solutions Group (ESG) net sales were $481 million, an 18% increase, with operating income up 26% [8][17] - ESG's adjusted EBITDA margin improved to 23.1%, up 150 basis points [9] - Safety and Security Systems Group (SSG) net sales were $84 million, a 3% increase, with operating income up 17% [9][10] - SSG's adjusted EBITDA margin was 26.9%, an increase of 320 basis points [10] Market Data and Key Metrics Changes - Total orders for the quarter were $540 million, a 14% increase year over year, with a backlog of $1.08 billion [8][22] - Orders for publicly funded offerings were up double digits year over year, with strong demand across product categories [24][25] - Industrial orders also saw double-digit growth, despite a decline in third-party refuse truck orders [24] Company Strategy and Development Direction - The company is focused on organic growth initiatives and strategic acquisitions to drive long-term growth [26][28] - The good, better, best product strategy aims to penetrate underserved market segments and expand customer bases [26][62] - The company is actively pursuing M&A opportunities, with a strong pipeline and a reputation as a preferred buyer in the market [28][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong demand for products and services, with a focus on reducing lead times and maintaining healthy order intake [25][30] - The company raised its full-year adjusted EPS outlook to a range of $3.92 to $4.10, and net sales outlook to $2.07 billion to $2.13 billion [30] - Management noted that the recent tax reform could benefit industrial customers and potentially increase equipment purchases [38][39] Other Important Information - The company paid dividends of $8.5 million during the quarter and repurchased approximately $20 million of shares [13] - The company is committed to sustainability, as highlighted in its sixth annual Sustainable Builder Report [104] Q&A Session Summary Question: What were the key drivers of improved margins in ESG? - Management highlighted increased production at major facilities, growth in the aftermarket business, and favorable price-cost dynamics as key drivers [34][35] Question: How might recent tax reforms impact demand? - Management believes bonus depreciation provisions could incentivize industrial customers to purchase new equipment, but does not expect a significant impact on the effective tax rate [38][39] Question: What factors led to the increase in through-cycle margin targets? - Management cited increased production, growing aftermarket business, and realization of synergies from acquisitions as factors [43][44] Question: How is the company managing customer retention in reassigned territories? - Management reported that order intake in reassigned territories was in line with expectations, and they are optimistic about long-term market share growth [45][46] Question: What is the status of the insourcing initiatives? - Management confirmed that the fourth printed circuit board manufacturing line is on track to be operational by year-end, providing flexibility and supporting higher growth volumes [52][53] Question: How is the good, better, best strategy impacting growth? - Management indicated that this strategy is crucial for achieving low double-digit growth and expanding market share [62][63] Question: What is the current M&A landscape? - Management noted a very active M&A environment and a solid pipeline of opportunities, particularly for the SSG business [70][100]

Financial Data and Key Metrics Changes - Consolidated net sales for Q2 were $565 million, a 15% increase year over year, with organic sales growth of 9% [5][6] - Operating income rose to $97.7 million, up 20% compared to last year, while adjusted EBITDA increased by 21% to $118.2 million [6][12] - GAAP diluted EPS was $1.16, a 17% increase, and adjusted EPS was $1.17, up 23% year over year [6][11] - Cash generated from operations was $60 million, a 47% increase from Q2 last year [11][20] Business Line Data and Key Metrics Changes - Environmental Solutions Group (ESG) net sales were $481 million, an 18% increase, with operating income up 26% to $91.9 million [7][15] - Safety and Security Systems Group (SSG) net sales were $84 million, a 3% increase, with operating income rising 17% to $21.5 million [8][19] - ESG's adjusted EBITDA margin improved by 150 basis points to 23.1%, while SSG's adjusted EBITDA margin increased by 320 basis points to 26.9% [8][19] Market Data and Key Metrics Changes - Total orders for the quarter were $540 million, a 14% increase year over year, with a backlog of $1.08 billion [7][21] - Orders for publicly funded offerings were up double digits year over year, indicating broad-based strength across product categories [21][22] - Industrial orders also saw double-digit growth, despite a decline in third-party refuse truck orders [22] Company Strategy and Development Direction - The company is focused on organic growth initiatives and strategic acquisitions to drive long-term growth [24][26] - The good, better, best product strategy aims to penetrate underserved market segments and expand customer bases [24][62] - Increased EBITDA margin targets for both ESG and SSG reflect confidence in operational efficiencies and market opportunities [27][28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about strong customer demand and order levels, with expectations for continued growth [20][21] - The company anticipates benefits from recent tax reforms, particularly in terms of equipment purchases for industrial customers [36][37] - The outlook for 2025 has been raised, with adjusted EPS guidance increased to a range of $3.92 to $4.10 [28] Other Important Information - The company paid dividends of $8.5 million during the quarter and repurchased approximately $20 million of shares [12] - The company is committed to maintaining a strong cash conversion rate and has a target of 100% cash conversion on a net income basis [20] Q&A Session Summary Question: What were the key drivers of improved margins in ESG? - Management highlighted increased production efficiency at major facilities and growth in the aftermarket business as key drivers [33][34] Question: How might recent tax reforms impact demand? - Management believes bonus depreciation provisions could incentivize industrial customers to purchase new equipment [36] Question: Can you provide an update on the reassigned territories? - Order intake in reassigned territories has met expectations, with long-term opportunities for increased market share [44] Question: What is the status of the insourcing initiatives? - The company is on track to add a fourth printed circuit board manufacturing line, which is expected to enhance flexibility and support growth [52] Question: How does the good, better, best strategy impact growth? - This strategy is expected to help the company achieve low double-digit growth by opening new customer bases and increasing market share [62][63]

Federal Signal Q2 2025 Earnings Call July 30, 2025 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 historica ...