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What changed in FEDERAL SIGNAL CORP /DE/'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of FEDERAL SIGNAL CORP /DE/'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+240 added−223 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-27)

Top changes in FEDERAL SIGNAL CORP /DE/'s 2024 10-K

240 paragraphs added · 223 removed · 197 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

37 edited+4 added−9 removed34 unchanged
Biggest changeProducts are also sold to municipal and governmental customers through active independent distributors, as well as through original equipment manufacturers and the direct sales force. The Company sells comprehensive integrated warning and interoperable communications through a combination of the direct sales force and independent distributors. International sales are made through independent foreign distributors or on a direct basis.
Biggest changeThe Safety and Security Systems Group sells to industrial customers through wholesalers and distributors who are supported by Company sales personnel or independent manufacturer representatives. Products are also sold to municipal and governmental customers through active independent distributors as well as through original equipment manufacturers and the direct sales force.
The Company’s portfolio of products that it manufactures includes (i) vehicles and equipment for maintenance and infrastructure end-markets, including sewer cleaners, industrial vacuum loaders, vacuum- and hydro-excavation trucks (collectively, “safe-digging trucks”), street sweepers, waterblasting equipment, road-marking and line-removal equipment, dump truck bodies, trailers, metal extraction support equipment and multi-purpose tractors, and (ii) public safety equipment, such as vehicle lightbars and sirens, industrial signaling equipment, public warning systems and general alarm/public address systems.
The Company’s portfolio of products that it manufactures includes (i) vehicles and equipment for maintenance and infrastructure end-markets, including sewer cleaners, industrial vacuum loaders, vacuum- and hydro-excavation trucks (collectively, “safe-digging trucks”), street sweepers, waterblasting equipment, road-marking and line-removal equipment, dump truck bodies, trailers, metal extraction support equipment, and multi-purpose maintenance vehicles, and (ii) public safety equipment, such as vehicle lightbars and sirens, industrial signaling equipment, public warning systems, and general alarm/public address systems.
Prior to joining Supreme, Mr. Weber worked for 17 years as an executive within the Company’s Environmental Solutions Group, including a decade as Group President. These officers hold office until the next annual meeting of the Board of Directors following their election and until their successors have been elected and qualified.
Prior to joining Supreme, Mr. Weber worked for 17 years as an executive within the Company’s Environmental Solutions Group, including a decade as Group President. These officers hold office until the next annual meeting of the Board following their election and until their successors have been elected and qualified.
The Group manufactures vehicles and equipment in the U.S. and Canada that are sold under the Elgin ® , Vactor ® , Guzzler ® , TRUVAC ® , Westech TM , Jetstream ® , Blasters, Mark Rite Lines, Trackless, Ox Bodies ® , Crysteel ® , J-Craft ® , Duraclass ® , Rugby ® , Travis ® , OSW, NTE, WTB, Ground Force, TowHaul ® , Bucks ® and Switch-N-Go ® brand names.
The Environmental Solutions Group manufactures vehicles and equipment in the U.S. and Canada that are sold under the Elgin ® , Vactor ® , Guzzler ® , TRUVAC ® , Westech TM , Jetstream ® , Blasters, Mark Rite Lines, Trackless, Ox Bodies ® , Crysteel ® , J-Craft ® , Duraclass ® , Rugby ® , Travis ® , OSW, NTE, WTB, Ground Force, TowHaul ® , Bucks ® , and Switch-N-Go ® brand names.
Weber, age 66, was appointed Senior Vice President and Chief Operating Officer in January 2018, upon rejoining the Company after four years at Supreme Industries, Inc. (“Supreme”). Mr. Weber joined Supreme in May 2013 as President and Chief Executive Officer, serving in that capacity up to the sale of Supreme to Wabash National Corporation, which was completed in September 2017.
Weber, age 67, was appointed Senior Vice President and Chief Operating Officer in January 2018, upon rejoining the Company after four years at Supreme Industries, Inc. (“Supreme”). Mr. Weber joined Supreme in May 2013 as President and Chief Executive Officer, serving in that capacity up to the sale of Supreme to Wabash National Corporation, which was completed in September 2017.
Boeschen, age 29, was appointed Vice President, Corporate Strategy and Investor Relations in September 2023. Prior to joining the Company, Mr. Boeschen served as a Vice President, Equity Research at Raymond James, where he covered companies in the machinery space, with a primary focus on the truck equipment and specialty vehicle industries. Diane I.
Boeschen, age 30, was appointed Vice President, Corporate Strategy and Investor Relations in September 2023. Prior to joining the Company, Mr. Boeschen served as a Vice President, Equity Research at Raymond James, where he covered companies in the machinery space, with a primary focus on the truck equipment and specialty vehicle industries. Diane I.
The Group’s product offerings also include certain products manufactured by other companies, such as refuse and recycling collection vehicles. Products are sold to both municipal and industrial customers either through a dealer network or direct sales to service customers generally depending on the type and geographic location of the customer.
The Environmental Solutions Group’s product offerings also include certain products manufactured by other companies, such as refuse and recycling collection vehicles. Products are sold to both municipal and industrial customers either through a dealer network or direct sales to service customers generally depending on the type and geographic location of the customer.
In addition, the Company’s annual talent and succession management processes are designed to identify and develop next-level successors through a variety of assignments and experiential learning. The Company actively seeks opportunities for regular engagement and communication with its CEO and other senior executive leaders with its broader employee population.
In addition, the Company’s annual talent and succession management processes are designed to identify and develop next-level successors through a variety of assignments and experiential learning. The Company actively seeks opportunities for regular engagement and communication between its CEO and other senior executive leaders and its broader employee population.
With the application of these policies, the Company believes it complies with federal, state and local provisions that have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment. Capital expenditures in 2023 attributable to compliance with such laws were not material.
With the application of these policies, the Company believes it complies with federal, state, and local provisions that have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment. Capital expenditures in 2024 attributable to compliance with such laws were not material.
Bonina, age 60, was appointed Vice President, General Counsel and Secretary in April 2022. Prior to joining the Company in March 2022, Ms. Bonina worked at AT&T Inc. (“AT&T”), where she served as Assistant Vice President – Senior Legal Counsel. At AT&T, Ms.
Bonina, age 61, was appointed Vice President, General Counsel and Secretary in April 2022. Prior to joining the Company in March 2022, Ms. Bonina worked at AT&T Inc. (“AT&T”), where she served as Assistant Vice President – Senior Legal Counsel. At AT&T, Ms.
The Company also believes that the overall impact of compliance with environmental regulations will not have a material adverse effect on our financial position, results of operations or cash flow. Seasonality Certain of the Company’s businesses are susceptible to the influences of seasonal factors, including buying patterns, delivery patterns and productivity influences from holiday periods and weather.
The Company also believes that the overall impact of compliance with environmental regulations will not have a material adverse effect on our financial position, results of operations or cash flow. 5 Table of Contents Seasonality Certain of the Company’s businesses are susceptible to the influences of seasonal factors, including buying patterns, delivery patterns, and productivity influences from holiday periods and weather.
The Group operates manufacturing facilities in the U.S., Spain, the United Kingdom (“U.K.”), and South Africa. Marketing and Distribution Depending primarily on the type and geographic location of the end-customer, the Environmental Solutions Group uses either a dealer network or direct sales to serve customers. The dealer network serves both municipal and industrial end-markets.
The Safety and Security Systems Group operates manufacturing facilities in the U.S., Spain, the United Kingdom (“U.K.”), and South Africa. Marketing and Distribution Depending primarily on the type and geographic location of the end-customer, the Environmental Solutions Group uses either a dealer network or direct sales to serve customers. The dealer network serves both municipal and industrial end-markets.
Environmental Solutions Group The Company’s Environmental Solutions Group is a leading manufacturer and supplier of a full range of street sweepers, sewer cleaners, industrial vacuum loaders, safe-digging trucks, high-performance waterblasting equipment, road-marking and line-removal equipment, dump truck bodies, trailers, metal extraction support equipment and multi-purpose tractors.
Environmental Solutions Group The Company’s Environmental Solutions Group is a leading manufacturer and supplier of a full range of street sweepers, sewer cleaners, industrial vacuum loaders, safe-digging trucks, high-performance waterblasting equipment, road-marking and line-removal equipment, dump truck bodies, trailers, metal extraction support equipment, and multi-purpose maintenance vehicles.
Trackless is a leading Canadian manufacturer of off-road, multi-purpose tractors and attachments. Ground Force and TowHaul are leading manufacturers of specialty vehicles that support the extraction of metals.
Trackless is a leading Canadian manufacturer of off-road, multi-purpose maintenance vehicles and attachments. Ground Force and TowHaul are leading manufacturers of specialty vehicles that support the extraction of metals.
Many of the Company’s businesses support their local high schools with cooperative learning extension programs at their manufacturing plants, hosting in-person or virtual tours of our facilities, and providing scholarships and “signing-day” offers to high school seniors. The Company’s employees raise funds and donate time to a variety of community engagement initiatives and support expanded outreach to diverse communities.
Many of the Company’s businesses support their local high schools with cooperative learning extension programs at their manufacturing plants, hosting in-person or virtual tours of our facilities, and providing scholarships and “signing-day” offers to high school seniors. The Company’s employees raise funds and donate time to a variety of community engagement initiatives.
Under the Elgin brand name, the Company sells a leading U.S. brand of street sweepers primarily designed for large-scale cleaning of curbed streets, parking lots and other paved surfaces utilizing mechanical sweeping, vacuum and recirculating air technology. Vactor is a leading manufacturer of equipment solutions for cleaning and maintaining sewers and catch basins.
Under the Elgin brand name, the Company sells a leading U.S. brand of street sweepers that are primarily designed for large-scale cleaning of curbed streets, parking lots, and other paved surfaces and that utilize mechanical sweeping, vacuum, and recirculating air technology. Vactor is a leading manufacturer of equipment solutions for cleaning and maintaining sewers and catch basins.
In addition to vehicle and equipment sales, the Group also engages in the sale of parts, service and repair, equipment rentals and training as part of a comprehensive aftermarket offering to its current and potential customers through its service centers located across North America.
In addition to vehicle and equipment sales, the Environmental Solutions Group also engages in the sale of parts, service and repair, equipment rentals, and training as part of a comprehensive aftermarket offering to its current and potential customers through its service centers, which are located across North America.
Executive Officers of the Registrant The following is a list of the Company’s executive officers, including their ages, business experience and positions as of February 1, 2024: Jennifer L. Sherman, age 59, was appointed President and CEO effective January 1, 2016. Ms. Sherman was also appointed to the Board of Directors effective January 1, 2016.
Executive Officers of the Registrant The following is a list of the Company’s executive officers, including their ages, business experience and positions as of February 1, 2025: Jennifer L. Sherman, age 60, was appointed President and CEO effective January 1, 2016. Ms. Sherman was also appointed to the Board of Directors (the “Board”) effective January 1, 2016.
The Company provides extensive training to employees within its facilities, ranging from topics such as workplace safety, anti-fraud, anti-discrimination and anti-harassment training, to advanced instruction in lean manufacturing principles and inside sales training programs.
The Company provides extensive training to employees within its facilities on topics such as workplace safety, anti-fraud, and advanced instruction in lean manufacturing principles and inside sales training programs.
Corporate contains those items that are not included in the Company’s reportable segments. Financial information concerning the Company’s two reportable segments for each of the three years in the period ended December 31, 2023, is included in Note 17 – Segment Information to the accompanying consolidated financial statements and is incorporated herein by reference.
Corporate contains those items that are not included in the Company’s reportable segments. Financial information concerning the Company’s two reportable segments for each of the three years in the period ended December 31, 2024, is included in Note 17 – Segment Information in Item 8, Financial Statements and Supplementary Data , and is incorporated herein by reference.
In those situations, the Company’s production processes rely upon the customer providing the chassis on a timely basis. Certain of the Company’s businesses also rely on the availability of inventory supplied by others to meet customer demand. The Company actively manages material supply sourcing and employs various methods to limit risk associated with commodity cost fluctuations and availability.
Certain of the Company’s businesses also rely on the availability of inventory supplied by others to meet customer demand. 3 Table of Contents The Company actively manages material supply sourcing and employs various methods to limit risk associated with commodity cost fluctuations and availability.
Human Capital Management As of December 31, 2023, the Company employed approximately 4,500 people in its businesses located in five countries, with the Company’s U.S. hourly employees accounting for approximately 54% of its total workforce. As of December 31, 2023, approximately 9% of the Company’s U.S. hourly workers were represented by unions.
As of December 31, 2024, the Company employed approximately 4,700 people in its businesses, which are located in five countries, with the Company’s U.S. hourly employees accounting for approximately 55% of its total workforce. As of December 31, 2024, approximately 10% of the Company’s U.S. hourly workers were represented by unions.
Generally, competition is intense within all of this Group’s product lines and purchase decisions are made based on price, features, reputation, performance and service, often within competitive bidding situations.
This Group’s international market position varies from leader to ancillary participant depending on the geographic region and product line. Generally, competition is intense within all of this Group’s product lines and purchase decisions are made based on price, features, reputation, performance, and service, often within competitive bidding situations.
Backlogs vary by group due to the nature of the Company’s products and the buying patterns of its customers. The Environmental Solutions Group typically experiences an average backlog of approximately three to six months of shipments. The Safety and Security Systems Group typically experiences an average backlog of approximately two months of shipments.
The Company’s backlog totaled $997.1 million at December 31, 2024, compared to $1.03 billion at December 31, 2023. Backlogs vary by group due to the nature of the Company’s products and the buying patterns of its customers. The Environmental Solutions Group typically experiences an average backlog of approximately three to six months of shipments.
Through its Tuition Assistance Program, the Company also aims to assist and encourage employees to expand their knowledge, skills, and job effectiveness by continuing their education at local accredited institutions of higher learning.
Through its Tuition Assistance Program, the Company aims to assist and encourage employees to expand their knowledge, skills, and job effectiveness by continuing their education at local accredited institutions of higher learning. Certain of the Company’s businesses also partner with nearby universities, from time to time, to offer courses and programs directly related to employees’ growth in the business.
Ground Force and TowHaul are leading manufacturers of specialty vehicles that support the extraction of metals. TBEI includes a portfolio of regional dump truck body and trailer brands with market leadership positions in distinct geographies and product categories, differentiating itself with its broad regional distribution network, focus on customer responsiveness and operational expertise.
TBEI includes a portfolio of regional dump truck body and trailer brands with market leadership positions in distinct geographies and product categories, differentiating itself with its broad regional distribution network, focus on customer responsiveness, and operational expertise. Within specific product categories and domestic markets, the businesses within the Safety and Security Systems Group are among the market leaders.
The Company has published a human rights policy, setting forth its commitment to equality and nondiscrimination, elimination of all forms of forced or compulsory labor, the effective abolition of childhood labor, workers’ rights to freedom of association and unionization, and protecting employees’ ability to confidentially report policy violations.
The Company has published a human rights policy, setting forth its commitment to nondiscrimination, the elimination of all forms of forced or compulsory labor, the effective abolition of childhood labor, workers’ rights to freedom of association and unionization, and the protection of employees’ ability to confidentially report policy violations. 4 Table of Contents Cultural Philosophy The Company is committed to attracting and retaining highly-qualified employees through its ongoing focus on meritocracy, autonomy, and accountability.
To support current and potential customers in these market segments, the Group also engages in the sale of parts, service and repair, equipment rentals and training through its service centers located across North America. The Safety and Security Systems Group sells to industrial customers through wholesalers and distributors who are supported by Company sales personnel or independent manufacturer representatives.
To support current and potential customers in these market segments, the Environmental Solutions Group also engages in the sale of parts, service and repair, equipment rentals, and training through its service centers located across North America.
Joe Johnson Equipment, Inc. with Joe Johnson Equipment (USA), Inc., (collectively, “JJE”), is a leading Canadian-based distributor of maintenance equipment for municipal and industrial markets. Blasters is a leading U.S. manufacturer of truck-mounted waterblasting equipment. MRL is a U.S. manufacturer of truck-mounted and ride-on road-marking and line-removal equipment. Trackless is a leading Canadian manufacturer of off-road, multi-purpose tractors and attachments.
Joe Johnson Equipment, Inc., along with Joe Johnson Equipment (USA), Inc., (collectively, “JJE”), is a leading Canadian-based distributor of maintenance equipment for municipal and industrial markets. Standard is a leading distributor of specialty maintenance and infrastructure equipment for municipal and industrial markets in parts of Illinois and Indiana. Blasters is a leading U.S. manufacturer of truck-mounted waterblasting equipment.
Elting worked at Ernst & Young, LLP from 2004 to 2016, most recently as Senior Audit Manager. Ian A. Hudson, age 47, was appointed Senior Vice President and Chief Financial Officer in October 2017. Mr. Hudson joined the Company in August 2013 as Vice President and Corporate Controller. Prior to joining the Company, Mr.
Court of Appeals for the Sixth Circuit in Detroit, Michigan. Ian A. Hudson, age 48, was appointed Senior Vice President and Chief Financial Officer in October 2017. Mr. Hudson joined the Company in August 2013 as Vice President and Corporate Controller. Prior to joining the Company, Mr.
While supply chain disruption and customer demand have contributed to longer lead times for certain businesses, production of the Company’s December 31, 2023 backlog is expected to be substantially completed during 2024.
The Safety and Security Systems Group typically experiences an average backlog of approximately two months of shipments. While customer demand has contributed to longer lead times for certain products, production of the Company’s December 31, 2024 backlog is expected to be substantially completed during 2025.
The Safety Council meets regularly to collaborate and implement safety improvement measures, including workplace hazard reduction programs and awards focusing on continuous improvement initiatives and the reduction of incident frequency. 5 Table of Contents Governmental Regulation of the Environment The Company endeavors to establish environmentally-friendly policies and objectives, and believes that these actions are also consistent with cost-effective operating practices.
Governmental Regulation of the Environment The Company endeavors to establish environmentally-friendly policies and objectives, and believes that these actions are also consistent with cost-effective operating practices.
Certain of the Company’s businesses also partner with nearby universities, from time to time, to offer courses and programs directly related to the employee’s growth in the business. The Company maintains a robust annual performance management process across the organization. Employees start the process by working with their supervisors to set individual performance goals.
The Company maintains a robust annual performance management process across the organization. Employees start the process by working with their supervisors to set individual performance goals.
Throughout 2023, supply chain conditions continued to gradually improve. However, the 3 Table of Contents Company continues to experience sporadic supply shortages and extended lead times for some components and raw materials, including certain classes of chassis and electronic components that are important to its manufacturing processes.
Although supply chain conditions improved in 2023 and 2024 as compared to prior years, certain of our businesses continue to experience sporadic supply challenges and extended lead times for some components and raw materials, including certain classes of chassis that are important to its manufacturing processes.
The Company has established an enterprise-wide Safety Council, which includes representatives from several of our manufacturing facilities.
The Company has established an enterprise-wide Safety Council, which includes representatives from several of our manufacturing facilities. The Safety Council meets regularly to collaborate and implement safety improvement measures, including workplace hazard reduction programs and awards focusing on continuous improvement initiatives and the reduction of incident frequency.
Although global supply chain conditions have improved in 2023, component shortages may persist into 2024, which could limit the Company’s ability to maximize production. Competition Within the Environmental Solutions Group, Elgin is recognized as a market leader among domestic sweeper competitors and differentiates itself primarily on product performance.
For more information on the Company’s supply-related risks, see Item 1A, Risk Factors , in this Form 10-K. Competition Within the Environmental Solutions Group, Elgin is recognized as a market leader among domestic sweeper competitors and differentiates itself primarily on product performance.
Customers and Backlog No single customer accounted for 10% or more of the Company’s net sales in any year within the three-year period ended December 31, 2023. The Company’s backlog totaled $1.03 billion at December 31, 2023, compared to $879 million at December 31, 2022.
The Company sells comprehensive integrated warning and interoperable communications through a combination of the direct sales force and independent distributors. International sales are made through independent foreign distributors or on a direct basis. Customers and Backlog No single customer accounted for 10% or more of the Company’s net sales in any year within the three-year period ended December 31, 2024.
Removed
During the year ended December 31, 2023, the Company completed the acquisitions of substantially all of the assets and operations of Trackless Vehicles Limited and Trackless Vehicles Asset Corp, and the wholly-owned subsidiary Work Equipment Ltd. (collectively, “Trackless”) and substantially all of the assets and operations of Blasters, Inc. and Blasters Technologies, LLC (collectively, “Blasters”).
Added
In 2024, the Company completed the acquisition of substantially all the assets and operations of Standard Equipment Company (“Standard”), which is included in the Environmental Solutions reportable segment. See Note 2 - Acquisitions in Item 8, Financial Statements and Supplementary Data , for additional information.
Removed
Within specific product categories and domestic markets, the businesses within the Safety and Security Systems Group are among the market leaders. This Group’s international market position varies from leader to ancillary participant depending on the geographic region and product line.
Added
In those situations, the Company’s production processes rely upon the customer providing the chassis on a timely basis.
Removed
Cultural Philosophy The Company is committed to promoting and supporting an inclusive culture throughout the organization, and believes that hearing different voices, and seeking different perspectives and ideas, leads to better results. The Company is proud of the diversity on its Board of Directors, senior management and in leadership roles throughout the Company.
Added
MRL is a U.S. manufacturer of truck-mounted and ride-on road-marking and line-removal equipment. Trackless is a leading Canadian manufacturer of off-road, multi-purpose maintenance vehicles and attachments. Ground Force and TowHaul are leading manufacturers of specialty vehicles that support the extraction of metals.
Removed
Currently, two of the 4 Table of Contents Company’s eight directors self-identify as members of a minority group. In addition, three of the Company’s directors are female, placing the Company ahead of the 29% average for companies in the Russell 3000 Index.
Added
Human Capital Management The Company believes its employees are a vital asset, and it strives to provide a safe and high-performing culture where its employees can thrive.
Removed
Of the companies in the Russell 3000 Index, approximately 7% have a female Chief Executive Officer (“CEO”), and the Company is proud to be among that group. In addition, 50% of the Company’s current executive officers are female, including the Company’s President and CEO, Vice President and General Counsel, and Vice President, Chief Accounting Officer and Controller.
Removed
In recent years, the Company’s Executive Leadership Team, comprised of business leaders from across the organization, completed a comprehensive educational awareness training led by an industry expert and completed supplemental training on the importance of building inclusive workplaces.
Removed
Additionally, the Company piloted training at a key manufacturing location in 2022 and provided facilitated training at another key manufacturing location in 2023.
Removed
On average, the Company’s employees each receive more than 10 hours of job training per year, with some employees of certain business units each averaging nearly 80 hours of training per year.
Removed
Court of Appeals for the Sixth Circuit in Detroit, Michigan. Lauren B. Elting, age 42, was appointed Vice President and Chief Accounting Officer in April 2022. Ms. Elting also serves as the Company’s Corporate Controller, a position she has held since May 2018. Prior to joining the Company in January 2017, Ms.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

46 edited+17 added−3 removed61 unchanged
Biggest changeData Security and Intellectual Property Risks Increased IT security threats, including more sophisticated cybersecurity attacks, pose a risk to our systems, networks, products and operations. We rely upon IT systems and networks, some of which are managed by third parties, to support a variety of business processes and activities, and to comply with regulatory, legal and tax requirements.
Biggest changeWe rely upon IT systems and networks, some of which are managed by third parties, to support a variety of business processes and activities, and to comply with regulatory, legal, and tax requirements. Additionally, in the ordinary course of business, we collect and store sensitive information relating to our businesses, customers, suppliers, and employees.
Operating in the international marketplace exposes us to a number of risks, including the need to comply with U.S. and foreign laws and regulations applicable to our foreign operations, such as the Foreign Corrupt Practices Act, the United Kingdom (“U.K.”) Bribery Act and their counterparts in other foreign jurisdictions in which we operate, restrictive domestic and international trade regulations, and changes in these laws, regulations and policies by the U.S. and foreign governments.
Operating in the international marketplace exposes us to a number of risks, including the need to comply with U.S. and foreign laws and regulations applicable to our foreign operations, such as the Foreign Corrupt Practices Act, the United Kingdom (“U.K.”) Bribery Act, and their counterparts in the other foreign jurisdictions in which we operate, restrictive domestic and international trade regulations, and changes in these laws, regulations, and policies by the U.S. and foreign governments.
The introduction of products or processes utilizing new technologies, including those resulting from any new environmental, safety and other regulations, artificial intelligence and machine learning, could require us and our suppliers to make significant changes to existing products or processes in order for them to remain marketable and competitive.
The introduction of products or processes utilizing new technologies, including those resulting from any new environmental, safety, or other regulations, artificial intelligence, and machine learning, could require us and our suppliers to make significant changes to existing products or processes in order for them to remain marketable and competitive.
Our success will depend upon our ability to source, develop and introduce on a timely and cost-effective basis new products, applications and processes that keep pace with technological developments, applicable regulations and address increasingly sophisticated customer requirements. We may not be successful in identifying, sourcing, developing and marketing new products, applications and processes and product or process enhancements.
Our success will depend upon our ability to source, develop, and introduce, on a timely and cost-effective basis, new products, applications, and processes that keep pace with technological developments and applicable regulations and address increasingly sophisticated customer requirements. We may not be successful in identifying, sourcing, developing, and marketing new products, applications, and processes and product or process enhancements.
Legal and Financial Risks We may incur material losses and costs as a result of lawsuits or claims that may be brought against us which are related to product liability, warranty, product recalls, intellectual property, client service interruptions or other matters.
Legal and Financial Risks We may incur material losses and costs as a result of lawsuits or claims that may be brought against us that are related to product liability, warranty, product recalls, intellectual property, client service interruptions, or other matters.
Further, certain government agencies, including the U.S. Treasury, have previously implemented and may continue to implement policies that have resulted and may continue to result in significantly increased interest rates and borrowing costs.
Further, certain government agencies, including the U.S. Treasury, have previously implemented policies that have resulted and may continue to result in significantly increased interest rates and borrowing costs.
Strategic and Operational Risks The inability to obtain raw materials, component parts and/or finished goods in a timely and cost-effective manner would adversely affect our ability to manufacture and market our products. We purchase from suppliers raw materials, component parts and finished goods to be used in the manufacturing and sale of our products.
Strategic and Operational Risks The inability to obtain raw materials, component parts, and/or finished goods in a timely and cost-effective manner could adversely affect our ability to manufacture and market our products. We purchase raw materials, component parts, and finished goods from suppliers to be used in the manufacturing and sale of our products.
Failure to comply with one or more of these restrictive covenants may result in an event of default which, if not cured by us or waived by our lenders, allows our lenders to declare all amounts outstanding as due and payable.
Failure to comply with one or more of these restrictive covenants may result in an event of default that, if not cured by us or waived by our lenders, allows our lenders to declare all amounts outstanding as due and payable.
If we are unable to recover a substantial portion of the increase in material and transportation costs from our customers through price adjustments and/or 8 Table of Contents surcharges, our business or results of operations could be adversely affected. We may also experience an increase in order cancellations if any such pricing actions are not accepted by our customers.
If we are unable to recover a substantial portion of the increase in material and transportation costs from our customers through price adjustments and/or surcharges, our business or results of operations could be adversely affected. We may also experience an increase in order cancellations if any such pricing actions are not accepted by our customers.
In addition, we cannot be certain that any new or enhanced product or service will generate sufficient revenue to justify the expense and resources devoted to the related product diversification effort. Disruptions within our dealer network or the inability of our dealers to secure adequate access to capital could adversely affect our business.
In addition, we cannot be certain that any new or enhanced product or service will generate sufficient revenue to justify the expense and resources devoted to the related product diversification effort. 9 Table of Contents Disruptions within our dealer network or the inability of our dealers to secure adequate access to capital could adversely affect our business.
In addition, our profit margins would decrease if prices of purchased raw materials, component parts or finished goods increase and we are unable to pass on those increases to our customers.
In addition, our profit margins could decrease if prices of purchased raw materials, component parts, and/or finished goods increase and we are unable to pass on those increases to our customers.
In addition, we may be exposed to risks and adverse economic effects associated with changes in tax laws, geopolitical conflicts, actual or threatened imposition of tariffs or trade barriers on our products or materials incorporated into our products, actual or threatened trade disputes, including so-called “trade wars,” political and economic instability in the jurisdictions in which we operate, foreign receivables collection risk and local labor market conditions.
In addition, we may be exposed to risks and adverse economic effects associated with changes in tax laws, escalation of geopolitical conflicts, actual or threatened imposition of tariffs or trade barriers on our products or materials incorporated into our products, actual or threatened trade disputes, including so-called “trade wars,” political and economic instability in the jurisdictions in which we operate, foreign accounts receivable collection risk, and local labor market conditions.
The costs of compliance with the various laws, regulations and policies applicable to us could be significant and penalties for non-compliance could significantly impact our business. We have international operations that are subject to compliance with domestic and foreign laws and regulations, economic and political uncertainties and conflicts and foreign currency rate fluctuations.
The costs of compliance with the various laws, regulations, and policies applicable to us could be significant and penalties for non-compliance could significantly impact our business. We have international operations that are subject to compliance with domestic and foreign laws and regulations and can be impacted by economic and political uncertainties and conflicts and foreign currency rate fluctuations.
If the supply of skilled labor is constrained or our costs of attracting and maintaining a workforce increase, our profit margins could decrease as well as our ability to maximize production and meet customer demand. Our business may be adversely impacted by work stoppages and other labor relations matters.
If the supply of skilled labor is constrained or our costs of attracting and maintaining a workforce increase, our profit margins could decrease and our ability to maximize production and meet customer demand could be negatively impacted. Our business may be adversely impacted by work stoppages and other labor relations matters.
In addition, our 9 Table of Contents acquisition activities could be disrupted by overtures from competitors for the targeted companies, governmental regulation and rapid developments in our industry that decrease the value of a potential target’s products or services.
In addition, our acquisition activities could be disrupted by overtures from competitors for the targeted companies, governmental regulation, and rapid developments in our industry that decrease the value of a potential target’s products or services.
We continue to evaluate opportunities to restructure our business and rationalize our manufacturing operations in an effort to optimize our cost structure. These actions could result in significant charges that could adversely affect our financial condition and results of operations.
We continue to evaluate opportunities to restructure our business and rationalize our manufacturing operations in an effort to optimize our cost structure. These actions could result in significant charges that could adversely affect our financial condition 10 Table of Contents and results of operations.
A future claim could involve the imposition of punitive damages, the award of which, pursuant to state laws, may not be covered by insurance. In addition, warranty and certain other claims are not typically covered by insurance.
A future claim could involve the imposition of punitive damages, the award of which, pursuant to state laws, may not be covered by insurance. In addition, warranty and certain other claims are not 12 Table of Contents typically covered by insurance.
In 2023, we generated approximately 78% of our net sales in the U.S. Our ability to be profitable depends heavily on varying conditions in the U.S. governmental and municipal markets, as well as the overall U.S. economy. The industrial markets in which we compete are subject to considerable cyclicality, and move in response to cycles in the overall business environment.
In 2024, we generated approximately 79% of our net sales in the U.S. Our ability to be profitable depends heavily on varying conditions in the U.S. governmental and municipal markets, as well as the overall U.S. economy. The industrial markets in which we compete are subject to considerable cyclicality and move in response to cycles in the overall business environment.
Government administrations and agencies, political figures, the investment community, employees and other stakeholders have had an increased focus on sustainability issues and initiatives. Regulatory and other legal changes in laws in response to such matters could require material efforts and costs by us, and our suppliers, to comply with such changes.
Government administrations and agencies, political figures, the investment community, employees, and other stakeholders have previously had an increased focus on sustainability issues and initiatives. Changes in laws and regulations in response to such matters could require material efforts and costs by us, and our suppliers, to comply with such changes.
As a portion of our workforce is unionized, we are subject to risk of work stoppages and other labor relations matters. As of December 31, 2023, approximately 9% of our U.S. hourly workers were represented by labor unions and were covered by collective bargaining agreements with various unions.
As a portion of our workforce is unionized, we are subject to risk of work stoppages and other labor relations matters. As of December 31, 2024, approximately 10% of our U.S. hourly workers were represented by labor unions and were covered by collective bargaining agreements with various unions.
To mitigate the risk of foreign receivables collection, we may obtain letters of credit from international customers to satisfy concerns regarding the collectability of amounts billed to customers. Some of our contracts are denominated in foreign currencies, which may expose us to risks of fluctuating currency values and exchange rates, hard currency shortages and controls on currency exchange.
To mitigate the risk of foreign accounts receivable collections, we may obtain letters of credit from international customers to satisfy concerns regarding the collectability of amounts billed to customers. Some of our contracts are denominated in foreign currencies, which may expose us to risks of fluctuating currency values and exchange rates, hard currency shortages, and controls on currency exchange.
Many of our customers are municipal government agencies, and as a result, we are dependent on municipal government spending. Spending by our municipal customers can be affected by federal, state and local political circumstances, budgetary constraints, changing priorities, actual or potential government shutdowns and other factors.
Many of our customers are municipal government agencies; therefore, we are dependent on municipal government spending. Spending by our municipal customers can be affected by federal, state, and local political circumstances, budgetary constraints, changing priorities, actual or potential government shutdowns, and other factors.
The level of the funding of our defined benefit pension plan liabilities was approximately 88% as of December 31, 2023. Funding of the Company’s U.S. defined benefit pension plan is determined in accordance with guidelines set forth in the Employee Retirement Income Security Act.
The level of the funding of our defined benefit pension plan liabilities was approximately 93% as of December 31, 2024. Funding of the Company’s U.S. defined benefit pension plan is determined in accordance with guidelines set forth in the Employee Retirement Income Security Act.
Recent significant increases in interest rates and any future deterioration in the liquidity or credit worthiness of our dealers could have a significant adverse effect on our business. From time to time, we may provide financing assistance to dealers or consider taking ownership positions.
Significant or sustained increases in interest rates, including those experienced in 2023, and any future deterioration in the liquidity or credit worthiness of our dealers could have a significant adverse effect on our business. From time to time, we may provide financing assistance to dealers or consider taking ownership positions.
Our business is subject to fluctuations in demand and changing international economic, legal and political conditions that are beyond our control. In 2023, approximately 22% of our net sales were to customers outside the U.S. and we expect a significant portion of our revenues to come from international sales in the foreseeable future.
Our business is subject to fluctuations in demand and changes in international economic, legal, and political conditions that are beyond our control. In 2024, approximately 21% of our net sales were to customers outside the U.S., and we expect a significant portion of our net sales to come from international sales in the foreseeable future.
As of December 31, 2023, goodwill and intangible assets represented 29% and 13% of total consolidated assets, respectively. Rental equipment and properties and equipment are long-lived assets, which also collectively represented 20% of our total consolidated assets as of December 31, 2023. Goodwill and indefinite-lived intangible assets are tested for impairment annually, or more frequently if indicators of impairment exist.
Rental equipment and properties and equipment are long-lived assets, which also collectively represented 22% of our total consolidated assets as of December 31, 2024. Goodwill and indefinite-lived intangible assets are tested for impairment annually, or more frequently if indicators of impairment exist.
Challenges within global logistics networks, including trucking and chassis shortages and shortages in labor availability, have also contributed to delays in receiving key manufacturing components, increased order backlogs and higher transportation costs.
Challenges within global logistics networks, including shortages in trucking and chassis and in labor availability, have contributed to, and could continue to contribute to, delays in receiving key manufacturing components, increases in order backlogs, and higher transportation costs.
Further, climate change regulations at the federal, state or local level or in international jurisdictions could require us to limit emissions, change our manufacturing processes or product offerings, or undertake other activities which may require us to incur additional expense. These requirements may increase the cost of our products, which may diminish demand for those products.
Further, climate change regulations at the federal, state, or local level or in international jurisdictions could require us to limit emissions, change our manufacturing processes or product offerings, or undertake other activities which may require us to incur additional expense.
The United States and other jurisdictions have experienced high levels of inflation in recent years. If the inflation rate increases, it will likely affect our expenses, including, but not limited to, employee compensation and labor expenses and increased costs for supplies, and we may not be successful in offsetting such cost increases through pricing actions.
If the inflation rate increases, it will likely affect our expenses, including, but not limited to, employee compensation and labor expenses and increased costs for supplies, and we may not be successful in offsetting such cost increases through pricing actions.
To the extent that our international operations are affected by adverse foreign economic or political conditions, we may experience disruptions and losses that could have a material impact on our financial position, results of operations or cash flow.
The imposition of such tariffs may strain international trade relations or impact costs of raw materials. 7 Table of Contents To the extent that our international operations are affected by adverse foreign economic or political conditions, we may experience disruptions and losses that could have a material impact on our financial position, results of operations, or cash flow.
While various procedures and controls have been and are being utilized to mitigate IT risks, there can be no guarantee that the actions and controls that we and our third-party providers have implemented will be sufficient to protect our systems, information or other property. 11 Table of Contents Infringement of, or an inability to protect, our intellectual property rights could adversely affect our business.
While various procedures and controls have been and are being utilized to mitigate IT risks, there can be no guarantee that the actions and controls that we and our third-party providers have implemented will be sufficient to protect our systems, information, or other property.
Further, if we implement emerging technologies such as artificial intelligence and machine learning into our products and services, we may not be able to anticipate vulnerabilities, flaws or security threats resulting from the use of such technology and develop adequate protection measures.
These technologies present unique business opportunities along with rapidly changing legal and regulatory risks, and if we implement emerging technologies such as generative artificial intelligence and machine learning into our products and services, we may not be able to anticipate vulnerabilities, flaws, or security threats resulting from the use of such technology and develop adequate protection measures.
Global markets for various products and goods have suffered, and are continuing to suffer, material disruptions to certain supply chains, in part due to the coronavirus pandemic and geopolitical conflicts, including the war between Russia and Ukraine and the war between Israel and Hamas.
Global markets for various products and goods have suffered, and could continue to suffer, material disruptions to certain supply chains, in part due to geopolitical conflicts, including the war between Russia and Ukraine and the ongoing conflicts in the Middle East.
While we do not believe our business is dependent on any single dealer, a disruption in our dealer network, or with a significant dealer, or within a specific market, could have an adverse impact on our business within the affected market. In addition, our dealers require adequate liquidity to finance their operations, including purchases of our products.
While we do not believe our business is dependent on any single dealer, a disruption in our dealer network, or with a significant dealer, or within a specific market, could have an adverse impact on our business within the affected market.
We currently do not expect these rules to materially increase our global tax costs because we do not have material operations in jurisdictions with tax rates lower than the Pillar Two minimum. We continue to monitor U.S. and global legislative action related to Pillar Two for potential impacts.
Pillar Two does apply to our worldwide operations; however, we do not have material operations in jurisdictions with tax rates lower than the Pillar Two minimum and therefore have not experienced material increases in our global tax costs. We continue to monitor U.S. and global legislative action related to Pillar Two for potential impacts.
A significant increase in wages paid by competitors for employees similar to our work force could result in insufficient availability of workers and/or increase our labor costs.
Additionally, availability of labor in the markets in which we operate has declined in recent years and competition for such labor has increased. A significant increase in wages paid by competitors for employees similar to our work force could result in insufficient availability of workers and/or increase our labor costs.
Our future pension expenses and funding requirements could increase significantly due to the effect of adverse changes in the discount rate, asset values or the estimated expected return on plan assets. In addition, we could become legally required to make increased cash contributions to the pension plans, and these contributions could be material and negatively affect our cash flow.
Our future pension expenses and funding requirements could increase significantly due to the effect of adverse changes in the discount rate, asset values, or the estimated expected return on plan assets.
Changes in the value of foreign currencies over the long term could increase our U.S. dollar costs for, or reduce our U.S. dollar revenues from, our foreign operations.
Changes in the value of foreign currencies over the long term could increase our U.S. dollar costs for, or reduce our U.S. dollar revenues from, our foreign operations. Any increased costs or reduced revenues as a result of foreign currency fluctuations could adversely affect our results of operations. Inflation in the U.S. and elsewhere could adversely affect our business.
For example, the Organization for Economic Co-operation and Development has issued Pillar Two model rules introducing a new global minimum corporate tax of 15% intended to be effective on January 1, 2024. While the U.S. has not yet adopted the Pillar Two rules, various non-U.S. governments are enacting legislation. As currently designed, Pillar Two would apply to our worldwide operations.
For example, the Organization for Economic Co-operation and Development issued Pillar Two model rules introducing a new global minimum corporate tax of 15%, which became effective in certain countries in 2024. While the U.S. has not yet adopted the Pillar Two rules, various non-U.S. governments have enacted or may in the future enact legislation.
However, we continue to experience supply shortages and extended lead times for some components and raw materials, including certain classes of chassis and electronic components that are important to our manufacturing processes. When facing supply-related challenges, we may increase our inventory levels and purchase commitments to shorten lead times and to help maintain adequate inventory levels to meet customer expectations.
When facing supply-related challenges, we may increase our inventory levels and purchase commitments to shorten lead times and to help maintain adequate inventory levels to meet customer expectations.
In addition, our future success will depend on, among other factors, our ability to attract and retain qualified personnel.
In addition, our future success will depend on, among other factors, our ability to attract and retain qualified personnel. The loss of the services of any key employee or the failure to attract or retain other qualified personnel could have a material adverse effect on our business or business prospects.
Such analyses further require us to make certain assumptions about our sales, operating margins, growth rates and discount rates. There are inherent uncertainties related to these factors.
Such analyses further require us to make certain assumptions about our net sales, operating margins, growth rates, and discount rates. There are inherent uncertainties related to these factors. An impairment charge may result from, among other things, a significant decline in operating results, adverse market conditions, unfavorable changes in applicable laws or regulations, or a variety of other factors.
Additionally, uneven application of environmental, safety and other regulations could place our products at a cost or features disadvantage, which could reduce our revenues and profitability. An impairment in the carrying value of goodwill, intangible assets or long-lived assets could negatively affect our financial position and results of operations.
If implemented, these requirements may increase the cost of our products, which may diminish demand for those products. Additionally, uneven application of environmental, safety, and other regulations could place our products at a cost or features disadvantage, which could reduce our revenues and profitability.
We, like other manufacturers, continue to face heavy governmental regulation of our products, especially in the areas of the environment and employee health and safety.
We, like other manufacturers, continue to face significant governmental regulation of our products, especially in the areas of the environment and employee health and safety. Several significant administrative law cases decided by the U.S. Supreme Court in 2024 may result in additional legal challenges to regulations and guidance issued by federal regulatory agencies.
An impairment charge may result from, among other things, a 12 Table of Contents significant decline in operating results, adverse market conditions, unfavorable changes in applicable laws or regulations, or a variety of other factors. Our total consolidated assets and results of operations for the applicable period could be materially adversely affected if any such charge is recorded. Item 1B.
Our total consolidated assets and results of operations for the applicable period could be materially adversely affected if any such charge is recorded. Item 1B. Unresolved Staff Comments. None.
Any increased costs or reduced revenues as a result of foreign currency fluctuations could adversely affect our results of operations. 7 Table of Contents Inflation in the United States and elsewhere could adversely affect our business. We are exposed to inflation effects, which could negatively affect our business, financial condition and results of operation.
We are exposed to inflation effects, which could negatively affect our business, financial condition, and results of operation. The U.S. and other jurisdictions have experienced high levels of inflation in recent years.
Removed
As economies around the world recovered following the most significant effects of the pandemic, sharp increases in demand created significant disruption to the global supply chain, which adversely affected our ability to receive goods on a timely basis and increased our material costs. Throughout 2023, supply chain conditions have continued to gradually improve.
Added
In January 2025, President Trump established an advisory commission, the “Department of Government Efficiency,” to reform federal government processes and reduce expenditures, and enacted certain spending freezes, which may adversely affect our municipal customers. There is uncertainty regarding federal agency structure and future budget decisions and priorities of the U.S. presidential administration.
Removed
The loss of the services of any key employee or the failure to attract or retain other qualified personnel could have a material adverse effect on our business or business prospects. 10 Table of Contents Additionally, availability of labor in the markets in which we operate has declined in recent years and competition for such labor has increased.
Added
Further, President Trump has indicated that his administration is likely to impose significant tariffs on imported goods.
Removed
Additionally, in the ordinary course of business, we collect and store sensitive information relating to our businesses, customers, suppliers and employees. Sensitive information may also be stored by our vendors and on the platforms and networks of third-party providers.
Added
Although the Federal Reserve Board of Governors (“FRB”) cut certain benchmark interest rates twice in the second half of 2024, it is uncertain if the FRB will raise or lower interest rates in the future and, if so, to what level and for how long.
Added
Significant consolidation of our larger customers or suppliers could further increase competition in our markets and result in pricing and market pressures. Concentration of our customers may enable our customers to have increased buying influence, which could negatively impact our pricing strategy and make us more vulnerable to changes in demand.
Added
Additionally, concentrations of our suppliers could lead to reduced or limited resources of material or increased costs. This consolidation could have an adverse impact on our margins and results of operations.
Added
Additionally, the war in Ukraine has led to economic sanctions imposed against Russia by the U.S. and certain European nations, including a prohibition on doing business with certain Russian companies which may lead to retaliatory trade restrictions from Russia. Such sanctions may impact companies in many sectors and lead to disruption and volatility in the U.S. and global markets.
Added
For example, the U.S. indicated it intends to impose additional tariffs on imports from Canada, Mexico, and 8 Table of Contents China.
Added
The imposition of these tariffs and any response from other countries is still evolving, and there is a possibility that such sanctions, tariffs, or trade restrictions may be expanded, or new sanctions, tariffs, or trade restrictions may be imposed by the U.S., Russia, Canada, Mexico, China, or other countries, which could further disrupt supply chains and increase volatility of pricing.
Added
Although supply chain conditions improved in 2023 and 2024 as compared to prior years, certain of our businesses continue to experience supply challenges and extended lead times for some components and raw materials, including certain classes of chassis that are important to our manufacturing processes, especially in light of geopolitical conflicts discussed elsewhere.
Added
For example, any significant consolidation within our dealer network could increase competition for access to distributors or increase the influence of dealers over our pricing strategy. In addition, our dealers require adequate liquidity to finance their operations, including purchases of our products.
Added
In addition, we could become legally required to make increased cash contributions to the pension plans, and these contributions could be material and negatively affect our cash flow. 11 Table of Contents Data Security and Intellectual Property Risks Increased IT security threats, including more sophisticated cybersecurity attacks, pose a risk to our systems, networks, products, and operations, and related changes in laws, regulations, policies, and contractual obligations could adversely affect our business.
Added
Sensitive information may also be stored by our vendors and on the platforms and networks of third-party providers. Further, third-party providers may incorporate generative artificial intelligence or other emerging technologies into their operations, and these tools may not meet existing or rapidly evolving regulatory or industry standards with respect to privacy and data protection.
Added
Additionally, the legal and regulatory environment surrounding information security and privacy in the U.S. and international jurisdictions is constantly evolving. Violation or non-compliance with any of these laws or regulations could have a material adverse effect on our business, reputation, and financial condition, as well as subject us to significant fines, third party damages, and other liability.
Added
See Item 1C, Cybersecurity , of this Form 10-K for more information on our cybersecurity risk management and governance. Infringement of, or an inability to protect, our intellectual property rights could adversely affect our business.
Added
Successful challenges of certain regulations, any increased regulatory uncertainty, or delay or other impacts to the federal agency rulemaking process could adversely impact our business and operations.
Added
For example, on March 6, 2024, the SEC adopted final rules that would require new climate-related disclosure in SEC filings, including certain climate-related metrics, greenhouse gas emissions, and information about climate-related targets and goals. The SEC stayed the final rules pending outcome of legal challenges in the Eighth Circuit Court of Appeals.
Added
An impairment in the carrying value of goodwill, intangible assets, or long-lived assets could negatively affect our financial position and results of operations. As of December 31, 2024, goodwill and intangible assets represented 27% and 11% of total consolidated assets, respectively.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+0 added−0 removed7 unchanged
Biggest changeThe Company’s CIO and CISO regularly report to the Audit Committee on cybersecurity risks, updates on key initiatives and progress toward the Company’s objectives. In addition, the CIO provides updates to the Board of Directors, at least annually, on the Company’s broader IT strategy and key initiatives.
Biggest changeThe Company’s CIO and CISO regularly report to the Audit Committee on cybersecurity risks, updates on key initiatives, and progress toward the Company’s objectives. In addition, the CIO provides updates to the Board, at least annually, on the Company’s broader IT strategy and key initiatives. The CIO and CISO have primary responsibility over the Company’s cybersecurity risk management program.
Additionally, the Company engages third-party specialists to conduct periodic tests, incident simulations and assessments to verify and continuously enhance its cybersecurity risk management program. Governance The Board of Directors has overall responsibility for the oversight of risk management, and has delegated oversight of cybersecurity risk management to the Audit Committee.
Additionally, the Company engages third-party specialists to conduct periodic tests, incident simulations, and assessments to verify and continuously enhance its cybersecurity risk management program. Governance The Board has overall responsibility for the oversight of risk management and has delegated oversight of cybersecurity risk management to the Audit Committee.
Cybersecurity incidents across the Company, and relevant third-party service providers, are tracked and significant incidents, as applicable, are promptly escalated to a cross-functional cybersecurity task force so that decisions regarding public disclosure can be made in a timely manner by management and the Board of Directors.
Cybersecurity incidents across the Company, and relevant third-party service providers, are tracked and significant incidents, as applicable, are promptly escalated to a cross-functional cybersecurity task force so that decisions regarding public disclosure can be made in a timely manner by management and the Board.
The Company maintains a comprehensive cybersecurity risk management program, overseen by the Chief Information Officer (“CIO”) and Chief Information Security Officer (“CISO”), to support the security, confidentiality, integrity and availability of its critical information technology (“IT”) systems and information.
The Company maintains a comprehensive cybersecurity risk management program, 13 Table of Contents overseen by the Chief Information Officer (“CIO”) and Chief Information Security Officer (“CISO”), to support the security, confidentiality, integrity, and availability of its critical IT systems and information.
The CIO and CISO have primary responsibility over the Company’s cybersecurity risk management program. Quarterly updates are provided to the Company’s IT Council, comprised of executive, business unit and IT leaders from across the organization, regarding IT initiatives and risk management processes.
Quarterly updates are provided to the Company’s IT Council, which is comprised of executive, business unit, and IT leaders from across the organization, regarding IT initiatives and risk management processes.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−1 removed1 unchanged
Biggest changeOwned facilities are subject to liens under the Company’s Third Amended and Restated Credit Agreement dated October 21, 2022 (the “2022 Credit Agreement”). 13 Table of Contents The Company believes its properties, and related machinery and equipment, are well-maintained, suitable and adequate for their intended purposes.
Biggest changeApproximately 67% of the total square footage is owned by the Company with the remaining 33% being leased. Owned facilities are subject to liens under the Company’s Third Amended and Restated Credit Agreement dated October 21, 2022 (the “2022 Credit Agreement”). The Company believes its properties, and related machinery and equipment, are well-maintained, suitable, and adequate for their intended purposes.
Item 2. Properties. As of December 31, 2023, the Company utilized 17 principal manufacturing plants located throughout the U.S., as well as two in Europe, three in Canada and one in South Africa. The Company also leases facilities within the U.S., Europe and Canada from which we provide sales, service and/or equipment rentals.
Item 2. Properties. As of December 31, 2024, the Company utilized 17 principal manufacturing plants located throughout the U.S., as well as two in Europe, three in Canada, and one in South Africa. The Company also leases facilities within the U.S., Europe, and Canada from which we provide sales, service, and/or equipment rentals.
As of December 31, 2023, the Company devoted approximately 2.5 million square feet to manufacturing and 1.2 million square feet to sales, service, warehousing and office space. Of the total square footage, approximately 84% is devoted to the Environmental Solutions Group and 16% to the Safety and Security Systems Group.
As of December 31, 2024, the Company devoted approximately 2.4 million square feet to manufacturing and 1.2 million square feet to sales, service, warehousing, and office space. Of the total square footage, approximately 83% is devoted to the Environmental Solutions Group and 17% to the Safety and Security Systems Group.
Removed
Approximately 63% of the total square footage is owned by the Company with the remaining 37% being leased.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+1 added−0 removed1 unchanged
Biggest changeSecurities Authorized for Issuance under Equity Compensation Information concerning the Company’s equity compensation plans is included under Item 12 of Part III of this Form 10-K. Recent Sales of Unregistered Securities There were no sales of unregistered securities by the Company during the year ended December 31, 2023.
Biggest changeSecurities Authorized for Issuance under Equity Compensation Information concerning the Company’s equity compensation plans is included in Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters , of Part III of this Form 10-K.
The graph assumes that the value of the investment in the Company’s common stock, and in each index, was $100 on December 31, 2018 and assumes reinvestment of all dividends through December 31, 2023. Copyright© 2024 Russell Investment Group. All rights reserved. Copyright© 2024 Standard & Poor’s, a division of S&P Global. All rights reserved.
The graph assumes that the value of the investment in the Company’s common stock, and in each index, was $100 on December 31, 2019 and assumes reinvestment of all dividends through December 31, 2024. Copyright© 2025 Russell Investment Group. All rights reserved. Copyright© 2025 Standard & Poor’s, a division of S&P Global. All rights reserved.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities . Market Information The Company’s common stock is listed and traded on the New York Stock Exchange under the symbol “FSS”. Holders As of January 31, 2024, there were 1,463 holders of record of the Company’s common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities . Market Information The Company’s common stock is listed and traded on the New York Stock Exchange under the symbol “FSS.” Holders As of January 31, 2025, there were 1,387 holders of record of the Company’s common stock.
Purchases of Equity Securities The following table provides a summary of the Company’s repurchase activity for its common stock during the three months ended December 31, 2023: 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 (a) October 2023 (10/1/23 - 11/4/23) 21,083 $ 59.5008 21,083 $ 53,544,951 November 2023 (11/5/23 - 12/2/23) — — — 53,544,951 December 2023 (12/3/23 - 12/31/23) — — — 53,544,951 (a) In March 2020, the Board authorized a stock repurchase program of up to $75.0 million of the Company’s common stock, with the remaining authorization under our previously described repurchase program adopted in 2014 being subject to the March 2020 program. 14 Table of Contents Performance Graph The following graph compares the cumulative five-year total return to stockholders of the Company’s common stock relative to the cumulative total returns of the Russell 2000 index, the S&P Midcap 400 index, the S&P Industrials index, and the S&P 600 Capital Goods index.
Purchases of Equity Securities The following table provides a summary of the Company’s repurchase activity for its common stock during the three months ended December 31, 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 (a) October 2024 (9/29/24 - 11/2/24) 13,500 $ 83.8526 13,500 $ 47,879,121 November 2024 (11/3/24 - 11/30/24) 12,500 82.2113 12,500 46,851,480 December 2024 (12/1/24 - 12/31/24) — — — 46,851,480 (a) In March 2020, the Board authorized a stock repurchase program of up to $75.0 million of the Company’s common stock, with the remaining authorization under our previously described repurchase program adopted in 2014 being subject to the March 2020 program. 15 Table of Contents Performance Graph The following graph compares the cumulative five-year total return to stockholders of the Company’s common stock relative to the cumulative total returns of the Russell 2000 index, the S&P Midcap 400 index, the S&P 500 Industrials index, and the S&P 600 Capital Goods index.
As of December 31, 2018 2019 2020 2021 2022 2023 Federal Signal Corporation $ 100.00 $ 163.90 $ 170.42 $ 224.64 $ 243.10 $ 404.16 Russell 2000 100.00 125.52 150.58 172.90 137.56 160.85 S&P Midcap 400 100.00 126.20 143.44 178.95 155.58 181.15 S&P Industrials 100.00 129.37 143.68 174.02 164.49 194.31 S&P 600 Capital Goods 100.00 129.62 149.95 187.99 179.86 248.67 The stock price performance included in this graph is not necessarily indicative of future stock price performance.
As of December 31, 2019 2020 2021 2022 2023 2024 Federal Signal Corporation $ 100.00 $ 103.98 $ 137.06 $ 148.32 $ 246.58 $ 298.52 Russell 2000 100.00 119.96 137.74 109.59 128.14 142.93 S&P Midcap 400 100.00 113.66 141.80 123.28 143.54 163.54 S&P 500 Industrials 100.00 111.06 134.52 127.15 150.20 176.44 S&P 600 Capital Goods 100.00 115.68 145.03 138.76 191.84 225.84 The stock price performance included in this graph is not necessarily indicative of future stock price performance.
Added
Recent Sales of Unregistered Securities There were no sales of unregistered securities by the Company during the year ended December 31, 2024. Dividends See Financial Condition, Liquidity and Capital Resources in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , for a discussion of cash dividends declared on our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

93 edited+20 added−13 removed36 unchanged
Biggest changeIncluded among the Company’s highlights in 2023 were the following: • Orders for the year were at a record level of $1.87 billion, an increase of $178 million, or 11%, from last year. • Backlog at December 31, 2023 was $1.03 billion, another Company record, and an increase of $146 million, or 17%, compared to the end of last year. • Net sales for the year ended December 31, 2023 were $1.72 billion, the highest level in our history, and an increase of $288 million, or 20% from last year. • For the year ended December 31, 2023, we reported operating income of $224.5 million, an increase of $63.7 million, or 40%, from last year. • Consolidated operating margin for the year ended December 31, 2023 was 13.0%, compared to 11.2% in the prior year. • For the year ended December 31, 2023, we reported net income of $157.4 million, an increase of $37.0 million, or 31%, from last year. • On a consolidated basis, we reported adjusted EBITDA* of $286.0 million for the year ended December 31, 2023, an increase of $71.0 million, or 33%, from last year. • Adjusted EBITDA margin* for the year ended December 31, 2023 was 16.6%, up from 15.0% last year. • Cash flow from continuing operating activities for the year ended December 31, 2023 was $194 million, an increase of $123 million, or 171%, from last year. • With our strong balance sheet, positive operating cash flow, and increased capacity under our credit facility, we are well positioned to continue to invest in internal growth initiatives, pursue strategic acquisitions and consider ways to return value to stockholders, as we did during 2023: 16 Table of Contents ◦ Our capital expenditures in 2023 were approximately $30 million, and included a number of strategic investments in new machinery and equipment aimed at gaining operating efficiencies and expanding capacity at certain production facilities. ◦ We continue to invest in new product development and are encouraged that these efforts will provide additional opportunities to further diversify our customer base, penetrate new end-markets and/or gain access to new geographic regions. ◦ We continued to execute on our disciplined M&A strategy with the acquisitions of Blasters and Trackless.
Biggest changeIncluded among the Company’s highlights in 2024 were the following: • Net sales for the year ended December 31, 2024 were $1.86 billion, the highest level in our history, and an increase of $139 million, or 8% from last year. • Operating income for the year ended December 31, 2024 was $281.4 million, an increase of $56.9 million, or 25%, from last year. • Operating margin for the year ended December 31, 2024 was 15.1%, compared to 13.0% in the prior year. • Net income for the year ended December 31, 2024 was $216.3 million, an increase of $58.9 million, or 37%, from last year. • Adjusted EBITDA* for the year ended December 31, 2024 was $350.6 million, an increase of $64.6 million, or 23%, from last year. • Adjusted EBITDA margin* for the year ended December 31, 2024 was 18.8%, up from 16.6% last year. • Orders for the year were $1.85 billion, the second highest annual orders reported in the Company’s history, contributing to a backlog of $997 million at December 31, 2024. 17 Table of Contents • Net cash provided by operating activities for the year ended December 31, 2024 was $231 million, an increase of $37 million, or 19%, from last year. • With our strong balance sheet, positive operating cash flow, and capacity under our credit facility, we are well positioned to continue to invest in internal growth initiatives, pursue strategic acquisitions, and consider ways to return value to stockholders, as we did during 2024: ◦ Our capital expenditures in 2024 were approximately $41 million and included a number of strategic investments in new machinery and equipment aimed at gaining operating efficiencies and expanding capacity at certain production facilities. ◦ We continue to invest in new product development and anticipate that these efforts will provide additional opportunities to further diversify our customer base, penetrate new end-markets, and/or gain access to new geographic regions. ◦ We continued to execute on our disciplined M&A strategy with the acquisition of Standard.
Executive Summary The Company is a leading global manufacturer and supplier of (i) vehicles and equipment for maintenance and infrastructure end-markets, including sewer cleaners, industrial vacuum loaders, safe-digging trucks, street sweepers, waterblasting equipment, road-marking and line-removal equipment, dump truck bodies, trailers, metal extraction support equipment and multi-purpose tractors, and (ii) public safety equipment, such as vehicle lightbars and sirens, industrial signaling equipment, public warning systems and general alarm/public address systems.
Executive Summary The Company is a leading global manufacturer and supplier of (i) vehicles and equipment for maintenance and infrastructure end-markets, including sewer cleaners, industrial vacuum loaders, safe-digging trucks, street sweepers, waterblasting equipment, road-marking and line-removal equipment, dump truck bodies, trailers, metal extraction support equipment, and multi-purpose maintenance vehicles, and (ii) public safety equipment, such as vehicle lightbars and sirens, industrial signaling equipment, public warning systems, and general alarm/public address systems.
A qualitative approach may be applied when the Company concludes that it is not “more likely than not” that the fair value of the indefinite-lived intangible assets are less than their carrying value. A quantitative impairment test consists of comparing the fair value of the indefinite-lived intangible asset with its carrying amount.
A qualitative approach may be applied when the Company concludes that it is not “more likely than not” that the fair value of the indefinite-lived intangible assets is less than their carrying value. A quantitative impairment test consists of comparing the fair value of the indefinite-lived intangible asset with its carrying amount.
The 2022 Credit Agreement is a senior secured credit facility which provides the Borrowers access to an aggregate principal amount of $800 million, consisting of (i) a revolving credit facility in an amount up to $675 million (the “Revolver”) and (ii) a term loan facility in an amount up to $125 million.
The 2022 Credit Agreement is a senior secured credit facility which provides the Borrowers access to an aggregate original principal amount of up to $800 million, consisting of (i) a revolving credit facility in an amount up to $675 million (the “Revolver”) and (ii) a term loan facility in an original amount of up to $125 million.
In 2023, the Company paid down $64.1 million of borrowings under its revolving credit facility and $0.8 million under its term loan facility, funded cash dividends and share repurchases of $23.8 million and $5.5 million, respectively, and redeemed $7.0 million of stock in order to remit funds to tax authorities to satisfy employees’ tax withholdings following the vesting of stock-based compensation and the exercise of stock options.
In 2023, the Company paid down $64.1 million of borrowings under its revolving credit facility and $0.8 million under its term loan facility, funded cash dividends of $23.8 million and share repurchases of $5.5 million, and redeemed $7.0 million of common stock in order to remit funds to tax authorities to satisfy employees’ tax withholdings following the vesting of stock-based compensation and the exercise of stock options.
For all reporting units, a 10% decrease in the estimated fair value would have had no effect on the carrying value of goodwill at the annual measurement date in 2023. However, adverse changes to the Company’s business environment and future cash flow could cause us to record impairment charges in future periods, which could be material.
For all reporting units, a 10% decrease in the estimated fair value would have had no effect on the carrying value of goodwill at the annual measurement date in 2024. However, adverse changes to the Company’s business environment and future cash flow could cause us to record impairment charges in future periods, which could be material.
Goodwill Goodwill represents the excess of the cost of an acquired business over the amounts assigned to its net assets. Goodwill is not amortized but is tested for impairment at a reporting unit level on an annual basis or more frequently if indicators of impairment exist. The Company performed its annual goodwill impairment test as of October 31, 2023.
Goodwill Goodwill represents the excess of the cost of an acquired business over the amounts assigned to its net assets. Goodwill is not amortized but is tested for impairment at a reporting unit level on an annual basis or more frequently if indicators of impairment exist. The Company performed its annual goodwill impairment test as of October 31, 2024.
Further, the Company concluded that it was not “more likely than not” that the fair value of indefinite-lived intangible assets that were qualitatively tested for impairment were less than the carrying amounts. Accordingly, further quantitative testing was not required to be performed. The Company had no indefinite-lived intangible asset impairments in 2023, 2022 or 2021.
Further, the Company concluded that it was not “more likely than not” that the fair value of indefinite-lived intangible assets that were qualitatively tested for impairment were less than the carrying amounts. Accordingly, further quantitative testing was not required to be performed. The Company had no indefinite-lived intangible asset impairments in 2024, 2023, or 2022.
Adjusted EBITDA margin is a non-GAAP measure that represents the total of net income, interest expense, pension settlement charges, acquisition and integration-related expenses (benefits), coronavirus-related expenses, purchase accounting effects, other income/expense, income tax expense, and depreciation and amortization expense, where applicable, divided by net sales for the applicable period(s).
Adjusted EBITDA margin is a non-GAAP measure that represents the total of net income, interest expense, net, pension settlement charges, acquisition and integration-related expenses, net, purchase accounting effects, other expense, net, income tax expense, and depreciation and amortization expense, where applicable, divided by net sales for the applicable period(s).
Future declines in the overall market value of the Company may also result in a conclusion that the fair value of one or more reporting units has declined below its carrying value. In 2023, the Company performed a combination of qualitative and quantitative impairment tests to assess the goodwill of its reporting units for potential impairment.
Future declines in the overall market value of the Company may also result in a conclusion that the fair value of one or more reporting units has declined below its carrying value. In 2024, the Company performed a combination of qualitative and quantitative impairment tests to assess the goodwill of its reporting units for potential impairment.
The relief from royalty model requires management to make a number of business and valuation assumptions including future revenue growth and royalty rates. In 2023, the Company performed a combination of qualitative and quantitative impairment tests over its indefinite-lived intangible assets.
The relief from royalty model requires management to make a number of business and valuation assumptions including future revenue growth and royalty rates. In 2024, the Company performed a combination of qualitative and quantitative impairment tests over its indefinite-lived intangible assets.
In addition, the Company may expand its borrowing capacity under the 2022 Credit Agreement by up to the greater of (i) $400 million and (ii) 100% of Consolidated EBITDA for the applicable four-quarter period preceding such expansion notice, subject to the approval of the applicable lenders providing such additional borrowings in the form of increases to their revolving facility commitment, or funding of incremental term loans.
In addition, the Company may expand its borrowing capacity under the 2022 Credit Agreement by up to the greater of (i) $400 million and (ii) 100% of Consolidated EBITDA for the applicable four-quarter period preceding such expansion notice, subject to the approval of the applicable lenders providing 24 Table of Contents such additional borrowings in the form of increases to their revolving facility commitment, or funding of incremental term loans.
Adjusted EBITDA is a non-GAAP measure that represents the total of net income, interest expense, pension settlement charges, acquisition and integration-related expenses (benefits), coronavirus-related expenses, purchase accounting effects, other income/expense, income tax expense, and depreciation and amortization expense, where applicable.
Adjusted EBITDA is a non-GAAP measure that represents the total of net income, interest expense, net, pension settlement charges, acquisition and integration-related expenses, net, purchase accounting effects, other expense, net, income tax expense, and depreciation and amortization expense, where applicable.
For one reporting unit, a quantitative impairment test was performed, using a combination of the income and market approaches to determine the fair value of its reporting unit. The valuation was prepared 26 Table of Contents by a third-party valuation specialist.
For one reporting unit, a quantitative impairment test was performed, using a combination of the income and market approaches to determine the fair value of its reporting unit. The valuation was prepared 27 Table of Contents by a third-party valuation specialist.
The fair value of the indefinite-lived intangible asset that was quantitatively tested for impairment exceeded its carrying value by approximately 40%, and, therefore, no impairment was recognized. This valuation was prepared by a third-party valuation specialist.
The fair value of the indefinite-lived intangible asset that was quantitatively tested for impairment exceeded its carrying value by approximately 45%, and, therefore, no impairment was recognized. This valuation was prepared by a third-party valuation specialist.
One measure of the sensitivity of assumptions used in the impairment analysis is the amount by which the reporting unit “passed” (fair value exceeds the carrying value). The fair value of the reporting unit exceeded its carrying value by more than 20%. Therefore, no impairment was recognized.
One measure of the sensitivity of assumptions used in the impairment analysis is the amount by which the reporting unit “passed” (fair value exceeds the carrying value). The fair value of the reporting unit exceeded its carrying value by more than 30%. Therefore, no impairment was recognized.
For its other reporting units, the Company applied the qualitative approach and concluded that it was not “more likely than not” that the fair value of the reporting units were less than their carrying values. Accordingly, further quantitative testing was not required to be performed. The Company had no goodwill impairments in 2023, 2022 or 2021.
For its other reporting units, the Company applied the qualitative approach and concluded that it was not “more likely than not” that the fair value of the reporting units was less than their carrying values. Accordingly, further quantitative testing was not required to be performed. The Company had no goodwill impairments in 2024, 2023, or 2022.
We believe that investors use versions of these metrics in a similar manner. For these reasons, the Company believes that adjusted EBITDA and adjusted EBITDA margin are meaningful metrics to investors in evaluating the Company’s underlying financial performance.
The Company believes that investors use versions of these metrics in a similar manner. For these reasons, the Company believes that adjusted EBITDA and adjusted EBITDA margin are meaningful metrics to investors in evaluating the Company’s underlying financial performance.
In accordance with Accounting Standards Codification (“ASC”) 280, Segment Reporting , which provides that segment reporting should follow the management of the item and that certain expenses may be corporate expenses, these legal expenses (which are not part of the normal operating activities of any of our reportable segments) are reported and managed as corporate expenses.
In accordance with Accounting Standards Codification (“ASC”) 280, Segment Reporting , which provides that segment reporting should follow the management of the item and that certain expenses may be 23 Table of Contents corporate expenses, these legal expenses (which are not part of the normal operating activities of any of our reportable segments) are reported and managed as corporate expenses.
Indefinite-lived intangible assets are tested for impairment on an annual basis at year-end, or more frequently if an event occurs or circumstances change that indicate the fair value of an indefinite-lived intangible asset could be below its carrying amount. The Company’s indefinite-lived intangible assets include trade names associated with acquisitions.
Indefinite-lived intangible assets are tested for impairment on an annual basis at October 31, or more frequently if an event occurs or circumstances change that indicate the fair value of an indefinite-lived intangible asset could be below its carrying amount. The Company’s indefinite-lived intangible assets include trade names associated with acquisitions.
Due to the high degree of uncertainty regarding the potential future cash outflows associated with these plans, the Company is unable to provide a reasonably reliable estimate of the amounts and periods in which any additional liabilities might be paid. (e) Represents the fair value of the contingent earn-out payments associated with the Deist, Blasters and Trackless acquisitions.
Due to the high degree of uncertainty regarding the potential future cash outflows associated with these plans, the Company is unable to provide a reasonably reliable estimate of the amounts and periods in which any additional liabilities might be paid beyond 2025. (e) Represents the fair value of the contingent earn-out payments associated with acquisitions.
For further discussion, see Note 12 – Commitments and Contingencies to the accompanying consolidated financial statements. 25 Table of Contents Critical Accounting Policies and Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) disclosure of contingent assets and liabilities at the date of the consolidated financial statements and (iii) the reported amounts of revenues and expenses during the reporting period.
For further discussion, see Note 12 – Commitments and Contingencies in Item 8, Financial Statements and Supplementary Data . 26 Table of Contents Critical Accounting Policies and Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and (iii) the reported amounts of revenues and expenses during the reporting period.
SEG&A expenses increased by $6.3 million for the year ended December 31, 2023, primarily due to higher sales commissions and incentive-based compensation expense. As a percentage of net sales, SEG&A expenses were 19.7% in the current year, compared with 20.4% in the prior year.
SEG&A expenses increased by $7.4 million for the year ended December 31, 2024, primarily due to higher sales commissions and incentive-based compensation expense. As a percentage of net sales, SEG&A expenses were 20.9% in the current year, compared with 19.7% in the prior year.
SEG&A expenses increased by $16.8 million, or 17%, for the year ended December 31, 2023, primarily due to additional costs from acquired businesses, as well as increases in sales commissions and incentive-based compensation expense. As a percentage of net sales, SEG&A expenses were 7.9% in the current year, compared to 8.1% in the prior year.
SEG&A expenses increased by $13.9 million, or 12%, for the year ended December 31, 2024, primarily due to additional costs from acquired businesses, as well as increases in sales commissions and incentive-based compensation expense. As a percentage of net sales, SEG&A expenses were 8.2% in the current year, compared to 7.9% in the prior year.
The repatriation of these funds may cause the Company to incur additional U.S. income tax expense and withholding taxes, as applicable, dependent on income tax laws and other circumstances at the time any such amounts were repatriated. Net cash provided by operating activities totaled $194.4 million, $71.8 million and $101.8 million in 2023, 2022 and 2021, respectively.
The repatriation of these funds may cause the Company to incur additional U.S. income tax expense and withholding taxes, as applicable, dependent on income tax laws and other circumstances at the time any such amounts were repatriated. Net cash provided by operating activities totaled $231.3 million in 2024 and $194.4 million in 2023.
The following table summarizes the Company’s off-balance sheet arrangements and the notional amount by expiration period as of December 31, 2023: Notional Amount by Expiration Period (in millions of dollars) Total Less than 1 Year 2-3 Years 4-5 Years Financial standby letters of credit (a) $ 9.1 $ 9.1 $ — $ — Performance and bid bonds (b) 12.1 11.9 0.2 — Repurchase obligations (c) 1.5 0.7 0.6 0.2 Total off-balance sheet arrangements $ 22.7 $ 21.7 $ 0.8 $ 0.2 (a) Financial standby letters of credit largely relate to casualty insurance policies for the Company’s workers’ compensation, automobile, general liability and product liability policies.
The following table summarizes the Company’s off-balance sheet arrangements and the notional amount by expiration period as of December 31, 2024: Notional Amount by Expiration Period (in millions of dollars) Total Less than 1 Year 2-3 Years 4-5 Years Financial standby letters of credit (a) $ 10.1 $ 10.1 $ — $ — Performance and bid bonds (b) 15.5 15.4 0.1 — Repurchase obligations (c) 2.2 0.6 0.2 1.4 Total off-balance sheet arrangements $ 27.8 $ 26.1 $ 0.3 $ 1.4 (a) Financial standby letters of credit largely relate to casualty insurance policies for the Company’s workers’ compensation, automobile, general liability and product liability policies.
See Note 8 – Goodwill and Other Intangible Assets to the accompanying consolidated financial statements for a summary of the Company’s goodwill by segment. Indefinite-lived Intangible Assets An intangible asset determined to have an indefinite useful life is not amortized.
See Note 8 – Goodwill and Other Intangible Assets in Item 8, Financial Statements and Supplementary Data , for a summary of the Company’s goodwill by segment. Indefinite-lived Intangible Assets An intangible asset determined to have an indefinite useful life is not amortized.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide information that is supplemental to, and shall be read together with, the consolidated financial statements and the accompanying notes contained in this Form 10-K.
Objective Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide information that is supplemental to, and shall be read together with, the consolidated financial statements and the accompanying notes included in Item 8, Financial Statements and Supplementary Data , in this Form 10-K.
As the year progressed, we saw improvement in supply chain conditions, which facilitated increased production levels at several of our facilities and, despite some lingering supply chain-related operational inefficiencies, we were able to deliver record financial results for our stockholders, with double-digit year-over-year top line and earnings growth, margin expansion and significant improvement in cash flow generation.
As the year progressed, we saw improvement in supply chain conditions, which facilitated increased production levels at several of our facilities, and despite some supply chain-related operational inefficiencies early in the year, we were able to deliver record financial results for our stockholders, with 8% net sales growth, double-digit earnings improvement, expansion of margins, and significant improvement in cash flow generation.
The weighted average interest rate on long-term borrowings was 5.9% at December 31, 2023. The Company paid interest of $22.8 million in 2023, $9.4 million in 2022 and $3.9 million in 2021. The Company paid income taxes of $46.2 million in 2023, $26.9 million in 2022 and $35.5 million in 2021.
The weighted average interest rate on long-term borrowings was 5.3% at December 31, 2024. The Company paid interest of $15.3 million in 2024, $22.8 million in 2023, and $9.4 million in 2022. 25 Table of Contents The Company paid income taxes of $62.4 million in 2024, $46.2 million in 2023, and $26.9 million in 2022.
Income tax expense The Company recognized income tax expense of $45.6 million for the year ended December 31, 2023, compared to $30.5 million for the year ended December 31, 2022.
The Company recognized income tax expense of $47.6 million for the year ended December 31, 2024, compared to $45.6 million for the year ended December 31, 2023.
Cost of sales increased by $162.3 million, or 17%, for the year ended December 31, 2023, primarily related to increased sales volumes, inclusive of the effects of acquisitions, increased chassis costs and a $3.2 million increase in depreciation expense, partially offset by a $6.2 million favorable foreign currency translation impact.
Cost of sales increased by $53.4 million, or 5%, for the year ended December 31, 2024, primarily related to increased sales volumes, inclusive of the effects of acquisitions, and a $4.6 million increase in depreciation expense, partially offset by a $3.6 million favorable foreign currency translation impact and reduced chassis costs of $10.7 million.
The increase in cash generated by operating activities in 2023 compared to the prior year was primarily due to 22 Table of Contents working capital improvements and higher net income, partially offset by increased rental fleet investments to support strong demand for rentals and used equipment and higher income tax payments.
The increase in cash generated by operating activities in 2024 compared to the prior year was primarily due to working capital improvements and higher net income, partially offset by increased rental fleet investments to support demand for rentals and used equipment and higher income tax payments, incentive-based compensation payments, and pension contributions.
Applicable margin, issuance fees and other customary expenses are payable on outstanding letters of credit. 23 Table of Contents The Company is subject to certain net leverage ratio and interest coverage ratio financial covenants under the 2022 Credit Agreement that are to be measured at each fiscal quarter-end.
Applicable margin, issuance fees, and other customary expenses are payable on outstanding letters of credit. The Company is subject to certain net leverage ratio and interest coverage ratio financial covenants under the 2022 Credit Agreement that are to be measured at each fiscal quarter-end. The Company was in compliance with all such covenants as of December 31, 2024.
The following table summarizes the gross borrowings and gross payments under the Company’s revolving credit facilities: For the Years Ended December 31, (in millions of dollars) 2023 2022 2021 Gross borrowings $ 134.3 $ 137.0 $ 214.0 Gross payments 198.4 55.8 143.5 Aggregate maturities of long-term borrowings and finance lease obligations are $4.7 million in 2024, $7.8 million in 2025, $10.2 million in 2026 and $276.3 million in 2027.
The following table summarizes the gross borrowings and gross payments under the Company’s revolving credit facilities: For the Years Ended December 31, (in millions of dollars) 2024 2023 Gross borrowings $ 18.0 $ 134.3 Gross payments 94.5 198.4 Aggregate maturities of long-term borrowings and finance lease obligations are $19.4 million in 2025, $10.5 million in 2026, and $193.8 million in 2027, and $0.1 million in 2028.
Actual results may differ from the Company’s estimates. See Note 8 – Goodwill and Other Intangible Assets to the accompanying consolidated financial statements for a summary of the Company’s indefinite-lived intangible assets. 27 Table of Contents
Actual results may differ from the Company’s estimates. See Note 8 – Goodwill and Other Intangible Assets in Item 8, Financial Statements and Supplementary Data , for a summary of the Company’s indefinite-lived intangible assets. 28 Table of Contents
Including these factors, gross profit margin for the year ended December 31, 2023 was 23.6%, compared to 21.4% in the prior year, with the improvement primarily attributable to improved operating leverage from higher sales volumes and benefits from pricing actions, partially offset by an increase in lower margin chassis sales.
Including these factors, gross profit margin for the year ended December 31, 2024 was 26.0%, compared to 23.6% in the prior year, with the improvement primarily attributable to improved operating leverage from higher sales volumes, benefits from pricing actions, and a reduction in lower margin chassis sales.
Adjusted EBITDA Adjusted EBITDA for the year ended December 31, 2023 was $286.0 million, compared to $215.0 million in the prior year. Adjusted EBITDA margin for the year ended December 31, 2023 was 16.6%, compared to 15.0% in the prior year.
Adjusted EBITDA Adjusted EBITDA for the year ended December 31, 2024 was $350.6 million, compared to $286.0 million in the prior year. Adjusted EBITDA margin for the year ended December 31, 2024 was 18.8%, compared to 16.6% in the prior year.
As a percentage of net sales, SEG&A expenses increased from 12.0% in the prior year, to 12.2% in the current year.
As a percentage of net sales, SEG&A expenses were 12.6% in the current year, compared to 12.2% in the prior year.
Gross profit margin for the year ended December 31, 2023 was 38.9%, compared to 37.1% in the prior year, with the improvement primarily attributable to improved operating leverage from higher sales volumes, benefits from pricing actions and lower freight costs.
Gross profit margin for the year ended December 31, 2024 was 42.0%, compared to 38.9% in the prior year, with the increase primarily attributable to improved operating leverage from higher sales volumes, favorable sales mix, lower material costs, and benefits from pricing actions.
Gross profit For the year ended December 31, 2023, gross profit increased by $105.3 million, or 31%, compared to the prior year, primarily due to a $85.0 million improvement within the Environmental Solutions Group and a $20.3 million increase within the Safety and Security Systems Group.
Gross profit For the year ended December 31, 2024, gross profit increased by $82.8 million, or 18%, compared to the prior year, primarily due to a $65.8 million improvement within the Environmental Solutions Group and a $17.0 million increase within the Safety and Security Systems Group.
Operating income increased by $14.0 million, or 34%, for the year ended December 31, 2023, primarily due to a $20.3 million increase in gross profit, partially offset by the $6.3 million increase in SEG&A expenses. Backlog was $59 million at December 31, 2023, compared to $55 million at December 31, 2022.
Operating income increased by $9.6 million, or 18%, for the year ended December 31, 2024, primarily due to a $17.0 million increase in gross profit, partially offset by the $7.4 million increase in SEG&A expenses. Backlog was $57 million at December 31, 2024, compared to $59 million at December 31, 2023.
Operating income increased by $64.7 million, or 45%, for the year ended December 31, 2023, largely due to a $85.0 million increase in gross profit, partially offset by the $16.8 million increase in SEG&A expenses, a $2.3 million increase in amortization expense and a $1.2 million increase in acquisition-related costs.
Operating income increased by $52.0 million, or 25%, for the year ended December 31, 2024, largely due to a $65.8 million increase in gross profit and a $0.2 million reduction in amortization expense, partially offset by the $13.9 million increase in SEG&A expenses and a $0.1 million increase in acquisition-related costs.
Due to the uncertainties related to these tax matters, the Company generally cannot make a reasonably reliable estimate of the period of cash settlement for this liability. As such, the potential future cash outflows are not included in the table above.
For further discussion, see Note 10 – Income Taxes in Item 8, Financial Statements and Supplementary Data . Due to the uncertainties related to these tax matters, the Company generally cannot make a reasonably reliable estimate of the period of cash settlement for this liability. As such, the potential future cash outflows are not included in the table above.
Gross profit as a percentage of net sales (“gross profit margin”) for the year ended December 31, 2023 was 26.1%, compared to 24.0% in the prior year, primarily driven by improvements within the Environmental Solutions Group and Safety and Security Systems Group of 220 basis points and 180 basis points, respectively.
Gross profit as a percentage of net sales (“gross profit margin”) for the year ended December 31, 2024 was 28.6%, compared to 26.1% in the prior year, primarily driven by a 240 basis point improvement within the Environmental Solutions Group and a 310 basis point improvement within the Safety and Security Systems Group.
The net cash flows associated with the Company’s rental equipment transactions are included in cash flow from operating activities. The Company’s cash and cash equivalents totaled $61.0 million, $47.5 million and $40.5 million as of December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, $27.8 million of cash and cash equivalents was held by foreign subsidiaries.
The net cash flows associated with the Company’s rental equipment transactions are included in cash flows from operating activities. The Company’s cash and cash equivalents totaled $91.1 million as of December 31, 2024 and $61.0 million as of December 31, 2023. As of December 31, 2024, $22.6 million of cash and cash equivalents was held by foreign subsidiaries.
Operating income Operating income for the year ended December 31, 2023 increased by $63.7 million, or 40%, compared to the prior year, largely due to the $105.3 million improvement in gross profit, partially offset by the $38.4 million increase in SEG&A expenses, a $2.3 million increase in amortization expense and a $0.9 million increase in acquisition-related costs.
Operating income Operating income for the year ended December 31, 2024 increased by $56.9 million, or 25%, compared to the prior year, largely due to the $82.8 million improvement in gross profit and a $0.2 million reduction in amortization expense, partially offset by the $23.9 million increase in SEG&A expenses and a $2.2 million increase in acquisition and integration-related costs.
(b) Amounts include contractual obligations associated with lease arrangements with an initial term of twelve months or less, which are not recorded on the Consolidated Balance Sheets. For further discussion, see Note 4 – Leases to the accompanying consolidated financial statements. (c) Purchase obligations primarily relate to commercial chassis and other contracts in the ordinary course of business.
(b) Amounts include contractual obligations associated with lease arrangements with an initial term of twelve months or less, which are not recorded on the Consolidated Balance Sheets. For further discussion, see Note 4 – Leases in Item 8, Financial Statements and Supplementary Data .
Selling, engineering, general and administrative (“SEG&A”) expenses For the year ended December 31, 2023, SEG&A expenses increased by $38.4 million, or 22%, compared to the prior year, primarily due to increases of $16.8 million, $6.3 million and $15.3 million within the Environmental Solutions Group, the Safety and Security Systems Group and Corporate, respectively.
Selling, engineering, general and administrative (“SEG&A”) expenses For the year ended December 31, 2024, SEG&A expenses increased by $23.9 million, or 11%, compared to the prior year, primarily due to increases of $13.9 million in the Environmental Solutions Group, $7.4 million in the Safety and Security Systems Group, and $2.6 million in Corporate.
As of December 31, 2023, there was $173.2 million of cash drawn on the Revolver, $124.2 million outstanding under the term loan facility and $9.1 million of undrawn letters of credit under the 2022 Credit Agreement, with $492.7 million of net availability for borrowings.
As of December 31, 2024, there was $90.6 million of cash drawn on the Revolver, $120.3 million outstanding under the term loan facility, and $10.1 million of undrawn letters of credit under the 2022 Credit Agreement, with $574.3 million of net availability for borrowings.
Net sales increased by $247.3 million, or 21%, for the year ended December 31, 2023, primarily due to higher sales volumes, inclusive of the effects of acquisitions, pricing actions and increased chassis sales.
Net sales increased by $119.2 million, or 8%, for the year ended December 31, 2024, primarily due to higher sales volumes, inclusive of the effects of acquisitions and pricing actions, partially offset by lower chassis sales of $11.6 million.
Safety and Security Systems The following table summarizes the Safety and Security Systems Group’s operating results as of, and for the years ended, December 31, 2023, 2022 and 2021: For the Years Ended December 31, Change (in millions of dollars) 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Net sales $ 284.8 $ 244.2 $ 209.2 $ 40.6 $ 35.0 Operating income 54.8 40.8 32.7 14.0 8.1 Other data: Operating margin 19.2 % 16.7 % 15.6 % 2.5 % 1.1 % Total orders $ 292.1 $ 248.0 $ 241.5 $ 44.1 $ 6.5 Backlog 58.6 54.8 52.5 3.8 2.3 Depreciation and amortization 4.2 4.2 3.6 — 0.6 Year ended December 31, 2023 vs. year ended December 31, 2022 Total orders increased by $44.1 million, or 18%, for the year ended December 31, 2023.
Backlog was $940 million at December 31, 2024, compared to $967 million at December 31, 2023. 22 Table of Contents Safety and Security Systems The following table summarizes the Safety and Security Systems Group’s operating results as of, and for the years ended, December 31, 2024 and December 31, 2023: For the Years Ended December 31, Change (in millions of dollars) 2024 2023 2024 vs. 2023 Net sales $ 304.4 $ 284.8 $ 19.6 Operating income 64.4 54.8 9.6 Other data: Operating margin 21.2 % 19.2 % 2.0 % Total orders $ 306.2 $ 292.1 $ 14.1 Backlog 57.4 58.6 (1.2) Depreciation and amortization 3.9 4.2 (0.3) Year ended December 31, 2024 vs. year ended December 31, 2023 Total orders increased by $14.1 million, or 5%, for the year ended December 31, 2024.
Cost of sales For the year ended December 31, 2023, cost of sales increased by $182.6 million, or 17%, compared to the prior year, largely due to an increase of $162.3 million, or 17%, within the Environmental Solutions Group, primarily related to increased sales volumes, inclusive of the effects of acquisitions, increased chassis costs and a $3.2 million increase in depreciation expense, partially offset by a $6.2 million favorable foreign currency translation impact.
Within the Safety and Security Systems Group, net sales increased by $19.6 million, or 7%, primarily due to improvements in sales of public safety equipment of $19.5 million and warning systems of $2.6 million, partially offset by a $2.6 million reduction in sales of industrial signaling equipment. 19 Table of Contents Cost of sales For the year ended December 31, 2024, cost of sales increased by $56.0 million, or 4%, compared to the prior year, largely due to an increase of $53.4 million, or 5%, within the Environmental Solutions Group, primarily related to increased sales volumes, inclusive of the effects of acquisitions, and a $4.6 million increase in depreciation expense, partially offset by a $3.6 million favorable foreign currency translation impact and reduced chassis costs of $10.7 million.
For further discussion, see Note 2 – Acquisitions to the accompanying consolidated financial statements. (f) As of December 31, 2023, the Company had a liability of approximately $1.1 million for unrecognized tax benefits, including penalties and interest. For further discussion, see Note 10 – Income Taxes to the accompanying consolidated financial statements.
For further discussion, see Note 2 – Acquisitions and Note 18 - Fair Value Measurements in Item 8, Financial Statements and Supplementary Data . (f) As of December 31, 2024, the Company had a liability of approximately $1.2 million for unrecognized tax benefits, including penalties and interest.
U.S. orders increased by $16.9 million, or 11%, compared to the prior year, driven by improvements in orders for public safety equipment, warning systems and industrial signaling equipment of $10.8 million, $4.9 million and $1.2 million, respectively.
U.S. orders increased by $28.3 million, or 16%, compared to the prior year, driven by improvements in orders for public safety equipment of $22.9 million and industrial signaling equipment of $5.9 million, partially offset by a $0.5 million reduction in orders of warning systems.
Partially offsetting these improvements was a $5.9 million reduction in sales of safe-digging trucks and a $6.4 million unfavorable foreign currency translation impact.
Partially offsetting these improvements were reductions in sales of trailers of $13.4 million and safe-digging trucks of $9.1 million, as well as a $3.3 million unfavorable foreign currency translation impact.
The Environmental Solutions Group reported a net sales increase of $247.3 million, or 21%, primarily due to a $66.2 million improvement in aftermarket revenues and increases in sales of street sweepers, sewer cleaners, refuse trucks, multi-purpose tractors, metal extraction support equipment, industrial vacuum loaders, safe-digging trucks, trailers and road-marking and line-removal equipment of $38.6 million, $35.0 million, $31.1 million, $21.4 million, $17.2 million, $16.3 million, $15.5 million, $10.5 million and $7.4 million, respectively.
The Environmental Solutions Group reported a net sales increase of $119.2 million, or 8%, primarily due to a $18.9 million improvement in aftermarket revenues and increases in sales of dump truck bodies of $36.5 million, sewer cleaners of $23.1 million, road-marking and line-removal equipment of $14.1 million, street sweepers of $13.1 million, industrial vacuum loaders of $10.5 million, refuse trucks of $7.2 million, multi-purpose maintenance vehicles of $6.8 million, metal extraction support equipment of $4.3 million, and hoists of $2.7 million.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 1, 2023.
See Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 27, 2024, for a detailed discussion of our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Information in MD&A is intended to assist the reader in obtaining an understanding of (i) the consolidated financial statements, (ii) the Company’s business segments and how the results of those segments impact the Company’s results of operations and financial condition as a whole and (iii) how certain accounting principles affect the Company’s consolidated financial statements.
Information in MD&A is intended to provide an analysis of our financial condition and results of operations from management’s perspective and assist the reader in obtaining an understanding of (i) the consolidated financial statements, (ii) the Company’s business segments and how the results of those segments impact the Company’s results of operations and financial condition as a whole, and (iii) how certain accounting principles affect the Company’s consolidated financial statements, and to provide discussion of material events and uncertainties known to management that are reasonably likely to cause reported financial information not to be indicative of future operating results or future financial condition.
The Company must also pay a commitment fee to the lenders ranging between 0.10% to 0.25% per annum on the unused portion of the $675 million Revolver along with other standard fees.
The applicable margin ranges from zero to 0.75% for base rate borrowings and 1.00% to 1.75% for Adjusted Eurocurrency Rate and RFR borrowings. The Company must also pay a commitment fee to the lenders ranging between 0.10% to 0.25% per annum on the unused portion of the Revolver along with other standard fees.
Refer to the Results of Operations section for further discussion regarding these non-GAAP metrics and a reconciliation of each to the most comparable GAAP measure for each of the periods presented. 17 Table of Contents Results of Operations The following table summarizes our Consolidated Statements of Operations as of, and for the years ended, December 31, 2023, 2022 and 2021, and illustrates the key financial indicators used to assess our consolidated financial results: For the Years Ended December 31, Change (in millions of dollars, except per share data) 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Net sales $ 1,722.7 $ 1,434.8 $ 1,213.2 $ 287.9 $ 221.6 Cost of sales 1,272.5 1,089.9 924.5 182.6 165.4 Gross profit 450.2 344.9 288.7 105.3 56.2 Selling, engineering, general and administrative expenses 210.1 171.7 149.2 38.4 22.5 Amortization expense 15.2 12.9 10.9 2.3 2.0 Acquisition and integration-related expenses (benefits), net 0.4 (0.5) (2.1) 0.9 1.6 Operating income 224.5 160.8 130.7 63.7 30.1 Interest expense, net 19.7 10.3 4.5 9.4 5.8 Pension settlement charges — — 10.3 — (10.3) Other expense (income), net 1.8 (0.4) (1.7) 2.2 1.3 Income before income taxes 203.0 150.9 117.6 52.1 33.3 Income tax expense 45.6 30.5 17.0 15.1 13.5 Net income $ 157.4 $ 120.4 $ 100.6 $ 37.0 $ 19.8 Other data: Operating margin 13.0 % 11.2 % 10.8 % 1.8 % 0.4 % Adjusted EBITDA (a) $ 286.0 $ 215.0 $ 180.5 $ 71.0 $ 34.5 Adjusted EBITDA margin (a) 16.6 % 15.0 % 14.9 % 1.6 % 0.1 % Diluted earnings per share $ 2.56 $ 1.97 $ 1.63 $ 0.59 $ 0.34 Total orders 1,870.1 1,692.2 1,538.8 177.9 153.4 Backlog 1,025.1 879.2 628.9 145.9 250.3 Depreciation and amortization 60.4 54.7 50.4 5.7 4.3 (a) The Company uses adjusted EBITDA and adjusted EBITDA margin as additional measures which are representative of its underlying performance and to improve the comparability of results across reporting periods.
Refer to the Results of Operations section for further discussion regarding these non-GAAP metrics and a reconciliation of each to the most comparable GAAP measure for each of the periods presented. 18 Table of Contents Results of Operations The following table summarizes our Consolidated Statements of Operations as of, and for the years ended December 31, 2024 and December 31, 2023, and illustrates the key financial indicators used to assess our consolidated financial results: For the Years Ended December 31, Change (in millions of dollars, except per share data) 2024 2023 2024 vs. 2023 Net sales $ 1,861.5 $ 1,722.7 $ 138.8 Cost of sales 1,328.5 1,272.5 56.0 Gross profit 533.0 450.2 82.8 Selling, engineering, general and administrative expenses 234.0 210.1 23.9 Amortization expense 15.0 15.2 (0.2) Acquisition and integration-related expenses, net 2.6 0.4 2.2 Operating income 281.4 224.5 56.9 Interest expense, net 12.5 19.7 (7.2) Pension settlement charges 3.8 — 3.8 Other expense, net 1.2 1.8 (0.6) Income before income taxes 263.9 203.0 60.9 Income tax expense 47.6 45.6 2.0 Net income $ 216.3 $ 157.4 $ 58.9 Other data: Operating margin 15.1 % 13.0 % 2.1 % Adjusted EBITDA (a) $ 350.6 $ 286.0 $ 64.6 Adjusted EBITDA margin (a) 18.8 % 16.6 % 2.2 % Diluted earnings per share $ 3.50 $ 2.56 $ 0.94 Total orders 1,847.8 1,870.1 (22.3) Backlog 997.1 1,025.1 (28.0) Depreciation and amortization 65.3 60.4 4.9 (a) The Company uses adjusted EBITDA and adjusted EBITDA margin as additional measures to assist it in comparing its performance on a consistent basis for purposes of business decision making by removing the impact of certain items that management believes are not representative of its underlying performance and to improve the comparability of results across reporting periods.
U.S. sales increased by $165.8 million, or 17%, largely due to a $45.1 million increase in aftermarket revenues and increases in sales of street sweepers, sewer cleaners, safe-digging trucks, industrial vacuum loaders, trailers, multi-purpose tractors, road-marking and line-removal equipment and refuse trucks of $35.5 million, $28.1 million, $21.4 million, $16.3 million, $10.5 million, $7.8 million, $7.5 million and $6.3 million, respectively.
U.S. sales increased by $102.7 million, or 9%, largely due to a $12.9 million increase in aftermarket revenues and increases in sales of dump truck bodies of $31.9 million, sewer cleaners of $21.3 million, street sweepers of $12.0 million, industrial vacuum loaders of $10.5 million, road-marking and line-removal equipment of $10.1 million, refuse trucks of $8.0 million, metal extraction support equipment of $3.1 million, and hoists of $2.8 million.
Non-U.S. sales increased by $81.5 million, or 42%, largely due to a $21.1 million improvement in aftermarket revenues and increases in sales of refuse trucks, metal extraction support equipment, multi-purpose tractors and sewer cleaners of $24.8 million, $17.9 million, $13.6 million and $6.9 million, respectively.
Non-U.S. sales increased by $16.5 million, or 6%, largely due to a $6.0 million improvement in aftermarket revenues and increases in sales of multi-purpose maintenance vehicles of $4.9 million, dump truck bodies of $4.6 million, road-marking and line removal equipment of $4.0 million, sewer cleaners of $1.8 million, and metal extraction support equipment of $1.2 million.
Year ended December 31, 2023 vs. year ended December 31, 2022 Net sales Net sales for the year ended December 31, 2023 increased by $287.9 million, or 20%, compared to the prior year, inclusive of the effects of acquisitions, pricing actions and increased chassis sales.
Year ended December 31, 2024 vs. year ended December 31, 2023 Net sales Net sales for the year ended December 31, 2024 increased by $138.8 million, or 8%, compared to the prior year, primarily due to higher sales volumes, inclusive of the effects of acquisitions, and pricing actions, partially offset by a $11.6 million reduction in chassis sales.
We have now completed 11 acquisitions since 2016. ◦ We demonstrated our commitment to returning value to our stockholders by paying cash dividends of $23.8 million, and spending $5.5 million to repurchase shares under our authorized repurchase program. • To highlight our ongoing focus on operating in a socially responsible and sustainable manner, we published our fourth annual Sustainability Report in June 2023. * The Company uses adjusted earnings before interest, tax, depreciation and amortization (“adjusted EBITDA”) and the ratio of adjusted EBITDA to net sales (“adjusted EBITDA margin”) as additional measures which are representative of its underlying performance and to improve the comparability of results across reporting periods.
We have now completed 12 acquisitions since 2016. ◦ We demonstrated our commitment to returning value to our stockholders by paying cash dividends of $29.3 million and spending $6.7 million to repurchase shares of our common stock under our authorized repurchase program. * The Company uses adjusted earnings before interest, tax, depreciation, and amortization (“adjusted EBITDA”) and the ratio of adjusted EBITDA to net sales (“adjusted EBITDA margin”) as additional measures to assist it in comparing its performance on a consistent basis for purposes of business decision making by removing the impact of certain items that management believes are not representative of its underlying performance and to improve the comparability of results across reporting periods.
Consolidated operating margin for the year ended December 31, 2023 was 13.0%, compared to 11.2% in the prior year. Interest expense, net Interest expense for the year ended December 31, 2023 increased by $9.4 million, or 91%, compared to the prior year, largely due to an increase in interest rates.
Consolidated operating margin for the year ended December 31, 2024 was 15.1%, compared to 13.0% in the prior year. Interest expense, net Interest expense, net for the year ended December 31, 2024 decreased by $7.2 million, or 37%, compared to the prior year, largely due to reductions in average debt levels.
Borrowings under the 2022 Credit Agreement bear interest, at the Company’s option, at a base rate or an Adjusted Term Secured Overnight Financing Rate (“SOFR”), Adjusted Eurocurrency Rate or Adjusted Daily Simple SONIA Rate (as each is defined in the 2022 Credit Agreement), plus, in each case, an applicable margin.
Borrowings under the 2022 Credit Agreement bear interest, at the Company’s option, at a base rate or an Adjusted Eurocurrency Rate (as defined in the 2022 Credit Agreement) in the case of borrowings in euros or an adjusted RFR (as defined in the 2022 Credit Agreement) in the case of borrowings in U.S. dollars, Canadian dollars, and British pound sterling, plus, in each case, an applicable margin.
The increase in income tax expense in the current year was primarily due to higher earnings and the non-recurrence of certain discrete tax benefits recognized in the prior year associated with the release of valuation allowances, partially offset by a $1.5 million increase in the amount of excess tax benefits from stock compensation activity compared to the prior year.
The increase in income tax expense in 2024 was primarily due to higher earnings, partially offset by the aforementioned discrete tax benefits, which aggregated to $15.9 million, and the recognition of $5.1 million in excess tax benefits associated with stock-based compensation activity.
U.S. sales increased by $21.8 million, or 14%, driven by improvements in sales of public safety 21 Table of Contents equipment, industrial signaling equipment and warning systems of $12.6 million, $4.7 million and $4.5 million, respectively.
U.S. sales increased by $28.9 million, or 16%, driven by improvements in sales of public safety equipment of $24.4 million, industrial signaling equipment of $2.4 million, and warning systems of $2.1 million.
The Company also funded cash dividends and share repurchases of $21.8 million and $16.1 million, respectively, and redeemed $6.2 million of stock in order to remit funds to tax authorities to satisfy employees’ tax withholdings following the vesting of stock-based compensation and the exercise of stock options.
In 2024, the Company paid down $76.5 million of borrowings under its revolving credit facility and $3.9 million under its term loan facility, funded cash dividends of $29.3 million and share repurchases of $6.7 million, and redeemed $6.1 million of common stock in order to remit funds to tax authorities to satisfy employees’ tax withholdings following the vesting of stock-based compensation and the exercise of stock options.
Within the Safety and Security Systems Group, cost of sales increased by $20.3 million, or 13%, primarily related to higher sales volumes, benefits from pricing actions and lower freight costs.
Within the Safety and Security Systems Group, cost of sales increased by $2.6 million, or 1%, primarily related to higher sales volumes, partially offset by favorable product mix and lower material costs.
The Company believes that its financial resources and major sources of liquidity, including cash flow from operations and borrowing capacity, will be adequate to meet its operating needs, capital needs and financial commitments. 24 Table of Contents Contractual Obligations and Off-Balance Sheet Arrangements The following table summarizes the Company’s contractual obligations and payments due by period as of December 31, 2023: Payments Due by Period (in millions of dollars) Total Less than 1 Year 2-3 Years 4-5 Years More than 5 Years Long-term debt $ 297.4 $ 3.9 $ 17.2 $ 276.3 $ — Interest payments on long-term debt (a) 64.4 17.4 33.7 13.3 — Operating lease obligations (b) 23.3 7.7 9.5 3.6 2.5 Finance lease obligations 1.6 0.8 0.8 — — Purchase obligations (c) 277.6 254.1 23.4 0.1 — Pension contributions (d) 5.2 5.2 — — — Contingent earn-out payments (e) 4.9 — 4.9 — — Total contractual obligations (f) $ 674.4 $ 289.1 $ 89.5 $ 293.3 $ 2.5 (a) Amounts represent estimated contractual interest payments on outstanding long-term debt.
Contractual Obligations and Off-Balance Sheet Arrangements The following table summarizes the Company’s contractual obligations and payments due by period as of December 31, 2024: Payments Due by Period (in millions of dollars) Total Less than 1 Year 2-3 Years 4-5 Years More than 5 Years Long-term debt $ 210.9 $ 7.0 $ 203.9 $ — $ — Interest payments on long-term debt (a) 29.9 11.0 18.9 — — Operating lease obligations (b) 31.9 8.2 12.2 7.8 3.7 Finance lease obligations 12.9 12.4 0.4 0.1 — Purchase obligations (c) 353.2 336.5 14.5 2.2 — Pension contributions (d) 3.6 3.6 — — — Contingent earn-out payments (e) 4.8 4.2 0.6 — — Total contractual obligations (f) $ 647.2 $ 382.9 $ 250.5 $ 10.1 $ 3.7 (a) Amounts represent estimated contractual interest payments on outstanding long-term debt.
Partially offsetting these improvements was a reduction in sales of hoists and waterblasting equipment of $7.9 million and $5.1 million, respectively, as well as a $6.4 million unfavorable foreign currency translation impact.
Partially offsetting these improvements were reductions in shipments of waterblasting equipment of $2.0 million and safe-digging trucks of $1.4 million, as well as a $3.3 million unfavorable foreign currency translation impact.
Net sales increased by $40.6 million, or 17%, for the year ended December 31, 2023, inclusive of the effects of higher sales volumes and pricing actions.
Partially offsetting these reductions was a $4.9 million improvement in orders for warning systems. Net sales increased by $19.6 million, or 7%, for the year ended December 31, 2024, inclusive of the effects of higher sales volumes and pricing actions.
Environmental Solutions The following table summarizes the Environmental Solutions Group’s operating results as of, and for the years ended, December 31, 2023, 2022 and 2021: For the Years Ended December 31, Change (in millions of dollars) 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Net sales $ 1,437.9 $ 1,190.6 $ 1,004.0 $ 247.3 $ 186.6 Operating income 209.2 144.5 120.5 64.7 24.0 Other data: Operating margin 14.5 % 12.1 % 12.0 % 2.4 % 0.1 % Total orders $ 1,578.0 $ 1,444.2 $ 1,297.3 $ 133.8 $ 146.9 Backlog 966.5 824.4 576.4 142.1 248.0 Depreciation and amortization 56.0 50.3 46.7 5.7 3.6 Year ended December 31, 2023 vs. year ended December 31, 2022 Total orders increased by $133.8 million, or 9%, for the year ended December 31, 2023, inclusive of the effects of acquisitions and pricing actions.
Excludes purchase accounting expense effects included within depreciation and amortization of $0.2 million for the year ended December 31, 2024. 21 Table of Contents Environmental Solutions The following table summarizes the Environmental Solutions Group’s operating results as of, and for the years ended, December 31, 2024 and December 31, 2023: For the Years Ended December 31, Change (in millions of dollars) 2024 2023 2024 vs. 2023 Net sales $ 1,557.1 $ 1,437.9 $ 119.2 Operating income 261.2 209.2 52.0 Other data: Operating margin 16.8 % 14.5 % 2.3 % Total orders $ 1,541.6 $ 1,578.0 $ (36.4) Backlog 939.7 966.5 (26.8) Depreciation and amortization 60.9 56.0 4.9 Year ended December 31, 2024 vs. year ended December 31, 2023 Total orders decreased by $36.4 million, or 2%, for the year ended December 31, 2024, including the effects of lower chassis orders of $23.5 million.
Net cash used for investing activities totaled $83.7 million, $99.7 million and $168.7 million in 2023, 2022 and 2021, respectively. In each of the years presented, cash was used to fund the purchase of properties and equipment, with $30.3 million, $53.0 million and $37.4 million of capital expenditures in 2023, 2022 and 2021, respectively.
Net cash used for investing activities totaled $78.9 million in 2024 and $83.7 million in 2023. In both years, cash was used to fund the purchase of properties and equipment, with capital expenditures of $40.6 million in 2024 and $30.3 million in 2023. During 2024, the Company completed the acquisition of Standard for initial consideration of $39.7 million.
Other expense (income), net For the year ended December 31, 2023, Other expense (income), net, increased by $2.2 million compared to the prior year, primarily due to a $1.0 million increase in net periodic pension expense, a $0.8 million increase in estimated environmental remediation costs associated with a business discontinued in 2009, and a $0.4 million increase in foreign currency transaction losses.
Other expense, net For the year ended December 31, 2024, Other expense, net, decreased by $0.6 million compared to the prior year, primarily due to the non-recurrence of an $0.8 million environmental remediation charge recorded in the prior-year period associated with a business discontinued in 2009, partially offset by higher net periodic pension expense.
U.S. orders increased by $73.1 million, or 6%, primarily due to improvements in orders for street sweepers, road-marking and line-removal equipment, dump truck bodies, multi-purpose tractors, industrial vacuum loaders and refuse trucks of $26.9 million, $22.9 million, $19.5 million, $12.0 million, $9.5 million and $6.4 million, respectively. Additionally, aftermarket demand increased by $43.2 million.
Non-U.S. orders increased by $23.8 million, or 8%, primarily due to improvements in orders for refuse trucks of $17.0 million, street sweepers of $5.5 million, multi-purpose maintenance vehicles of $5.0 million, dump truck bodies of $2.8 million, and metal extraction support equipment of $2.7 million. Additionally, non-U.S. aftermarket orders increased by $7.6 million.
The following table summarizes the Company’s adjusted EBITDA and adjusted EBITDA margin and reconciles net income to adjusted EBITDA for each of the three years in the period ended December 31, 2023: For the Years Ended December 31, (in millions of dollars) 2023 2022 2021 Net income $ 157.4 $ 120.4 $ 100.6 Add (less): Interest expense, net 19.7 10.3 4.5 Pension settlement charges — — 10.3 Acquisition and integration-related expenses (benefits), net 0.4 (0.5) (2.1) Coronavirus-related expenses (a) — — 1.2 Purchase accounting effects (b) 0.7 — 0.3 Other expense (income), net 1.8 (0.4) (1.7) Income tax expense 45.6 30.5 17.0 Depreciation and amortization 60.4 54.7 50.4 Adjusted EBITDA $ 286.0 $ 215.0 $ 180.5 Net sales $ 1,722.7 $ 1,434.8 $ 1,213.2 Adjusted EBITDA margin 16.6 % 15.0 % 14.9 % (a) Coronavirus-related expenses relate to direct expenses incurred in connection with the Company's response to the coronavirus pandemic, that are incremental to, and separable from, normal operations.
The following table summarizes the Company’s adjusted EBITDA and adjusted EBITDA margin and reconciles net income to adjusted EBITDA for the years ended December 31, 2024 and December 31, 2023: For the Years Ended December 31, (in millions of dollars) 2024 2023 Net income $ 216.3 $ 157.4 Add: Interest expense, net 12.5 19.7 Pension settlement charges 3.8 — Acquisition and integration-related expenses, net 2.8 0.4 Purchase accounting effects (a) 1.1 0.7 Other expense, net 1.2 1.8 Income tax expense 47.6 45.6 Depreciation and amortization 65.3 60.4 Adjusted EBITDA $ 350.6 $ 286.0 Net sales $ 1,861.5 $ 1,722.7 Adjusted EBITDA margin 18.8 % 16.6 % (a) Purchase accounting effects represent the step-up in the valuation of equipment acquired in recent business combinations that was sold during the periods presented.
For further discussion, see Note 10 – Income Taxes to the accompanying consolidated financial statements. 19 Table of Contents Net income Net income for the year ended December 31, 2023 increased by $37.0 million, or 31%, compared to the prior year, largely due to the increased operating income, partially offset by increases in income tax expense, interest expense and other expense of $15.1 million, $9.4 million and $2.2 million, respectively.
Net income Net income for the year ended December 31, 2024 increased by $58.9 million, or 37%, compared to the prior year, largely due to the increased operating income and the reductions in interest expense, net, and other expense, net, partially offset by the $3.8 million pension settlement charge and a $2.0 million increase in income tax expense.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+1 added−0 removed1 unchanged
Biggest changeDollars, the Company has exposure to changes in foreign exchange rates, primarily the Canadian Dollar, Euro and British Pound. The impact of currency movements on the Company’s financial results is largely mitigated by natural hedges in its operations. The Canadian operations of JJE and Trackless primarily conduct business in Canadian dollars.
Biggest changeForeign Exchange Rate Risk Although the majority of the Company’s sales, expenses, and cash flow are transacted in U.S. dollars, the Company has exposure to changes in foreign currency exchange rates, primarily the Canadian dollar, euro, and British pound. The impact of currency movements on the Company’s financial results is largely mitigated by natural hedges in its operations.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk. The Company is subject to market risk associated with changes in interest rates and foreign exchange rates. To mitigate this risk, the Company may utilize derivative financial instruments, including interest rate swaps and foreign currency forward contracts.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk. The Company is subject to market risk associated with changes in interest rates and foreign currency exchange rates. To mitigate this risk, the Company may utilize derivative financial instruments, including interest rate swaps and foreign currency forward contracts.
If such transactional or balance sheet exposures are material, the Company may enter into matching foreign currency forward contracts from time to time to protect against variability in exchange rates. 28 Table of Contents
If such transactional or balance sheet exposures are material, the Company may enter into matching foreign currency forward contracts from time to time to protect against variability in exchange rates. 29 Table of Contents
The fair value of the Company’s total debt obligations held at December 31, 2023 was $299.0 million. From time to time, the Company may enter into interest rate swaps as a means of fixing the floating interest rate component on its variable-rate debt. At December 31, 2023, the Company had two interest rate swaps outstanding.
The fair value of the Company’s total debt obligations held at December 31, 2024 was $223.8 million. From time to time, the Company may enter into interest rate swaps as a means of fixing the floating interest rate component on its variable-rate debt. At December 31, 2024, the Company had two interest rate swaps outstanding.
The swaps had an aggregate notional amount of $150.0 million, and fixed the floating interest rate component on $150.0 million of the Company’s variable-rate debt. See Note 9 – Debt to the accompanying consolidated financial statements for a description of the Company’s debt agreements and interest rate swaps that were in place during 2023.
The swaps had an aggregate notional amount of $150.0 million and fixed the floating interest rate component on $150.0 million of the Company’s variable-rate debt. See Note 9 – Debt in Item 8, Financial Statements and Supplementary Data , for a description of the Company’s debt agreements and interest rate swaps that were in place during 2024.
Almost all other sales of product from the U.S. to other parts of the world are denominated in U.S. dollars. Sales from and within other currency zones are predominantly transacted in the currency of the country sourcing the product or service. Approximately 78% of the Company’s net sales are conducted within the U.S. and are transacted in U.S. dollars.
The Canadian operations of JJE and Trackless primarily conduct business in Canadian dollars. Almost all other sales of product from the U.S. to other parts of the world are denominated in U.S. dollars. Sales from and within other currency zones are predominantly transacted in the currency of the country sourcing the product or service.
A hypothetical 1% increase or decrease in variable interest rates on the Company’s total debt obligations as of December 31, 2023 would increase or decrease annual interest expense by approximately $1.5 million. Foreign Exchange Rate Risk Although the majority of the Company’s sales, expenses and cash flow are transacted in U.S.
A hypothetical 1% increase or decrease in variable interest rates on the Company’s total debt obligations as of December 31, 2024 would increase or decrease annual interest expense by approximately $0.7 million.
The Company estimates that a 10% appreciation of the U.S. dollar against other currencies would reduce full-year net sales by approximately 2% and operating income by approximately 1%. The Company may also have foreign currency exposures related to buying and selling in currencies other than the local currency in which it operates and to certain balance sheet positions.
The Company may also have foreign currency exposures related to buying and selling in currencies other than the local currency in which it operates and to certain balance sheet positions.
Added
Approximately 79% of the Company’s net sales are conducted within the U.S. and are transacted in U.S. dollars. The Company estimates that a 10% appreciation of the U.S. dollar against other currencies would reduce full-year net sales by approximately 2% and operating income by approximately 1%.

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