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What changed in FEDERAL SIGNAL CORP /DE/'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of FEDERAL SIGNAL CORP /DE/'s 2024 and 2025 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 2025 report.

+188 added−186 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-26)

Top changes in FEDERAL SIGNAL CORP /DE/'s 2025 10-K

188 paragraphs added · 186 removed · 164 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

29 edited+4 added−1 removed45 unchanged
Biggest changeTrackless 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.
Biggest changeStandard 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. MRL and Hog are U.S. manufacturers 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.
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.
The Environmental Solutions Group’s product offerings also include certain products manufactured by other companies, such as refuse 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 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.
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, refuse collection vehicles, 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.
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.
Weber, age 68, 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.
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.
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, 2025.
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.
Boeschen, age 31, 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.
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.
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, refuse collection vehicles, dump truck bodies, trailers, metal extraction support equipment, and multi-purpose maintenance vehicles.
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.
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, 2025, is included in Note 17 – Segment Information in Item 8, Financial Statements and Supplementary Data , and is incorporated herein by reference.
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.
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 2025 attributable to compliance with such laws were not material.
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 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, 2025 backlog is expected to be substantially completed during 2026.
In addition, the Company engages in the sale of parts, service and repair, equipment rentals, and training as part of a comprehensive aftermarket offering to its customers. The Company operates 23 principal manufacturing facilities in five countries and provides products and integrated solutions to customers in all regions of the world.
In addition, the Company engages in the sale of parts, service and repair, equipment rentals, and training as part of a comprehensive aftermarket offering to its customers. The Company operates 26 principal manufacturing facilities in five countries and provides products and integrated solutions to customers in all regions of the world.
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.
Court of Appeals for the Sixth Circuit in Detroit, Michigan. Ian A. Hudson, age 49, 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.
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.
Bonina, age 62, 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 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.
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, Hog, New Way ® , Trackless, Ox Bodies ® , Crysteel ® , J-Craft ® , Duraclass ® , Rugby ® , Travis ® , OSW, NTE, WTB, Ground Force, TowHaul ® , Bucks ® , and Switch-N-Go ® brand names.
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.
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, 2026: Jennifer L. Sherman, age 61, 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.
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.
(“MRL”) and Hog are U.S. manufacturers 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 2 Table of Contents vehicles that support the extraction of metals.
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.
The Company’s backlog totaled $1.04 billion at December 31, 2025, compared to $997 million at December 31, 2024. 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 two to eight months of shipments.
Offerings include systems for community alerting, emergency vehicles, first responder interoperable communications, and industrial communications. Specific products include public safety equipment, such as vehicle lightbars and sirens, industrial signaling equipment, public warning systems, and general alarm/public address systems. Products are sold under the Federal Signal TM , Federal Signal VAMA ® , and Victor ® brand names.
Specific products include public safety equipment, such as vehicle lightbars and sirens, industrial signaling equipment, public warning systems, and general alarm/public address systems. Products are sold under the Federal Signal TM , Federal Signal VAMA ® , and Victor ® brand names.
The Company believes that its employees are key to its ability to deliver exceptional products and services to its customers. The Company applies a holistic total rewards strategy, designed to recruit, motivate, and retain talented employees at all levels of the organization and offer competitive, market-based compensation programs and attractive benefit packages.
The Company applies a holistic total rewards strategy, designed to recruit, motivate, and retain talented employees at all levels of the organization and offer competitive, market-based compensation programs and attractive benefit packages.
Westech is a manufacturer of high-quality, rugged vacuum-excavation trucks. Jetstream manufactures high-pressure waterblasting equipment and accessories for commercial and industrial cleaning and maintenance operations. Blasters is a leading U.S. manufacturer of truck-mounted waterblasting equipment. Mark Rite Lines Equipment Company, Inc. (“MRL”), is a U.S. manufacturer of truck-mounted and ride-on road-marking and line-removal equipment.
Westech is a manufacturer of high-quality, rugged vacuum-excavation trucks. Jetstream manufactures high-pressure waterblasting equipment and accessories for commercial and industrial cleaning and maintenance operations. New Way is a leading U.S.-based designer and manufacturer of refuse collection vehicles. Blasters is a leading U.S. manufacturer of truck-mounted waterblasting equipment. Mark Rite Lines Equipment Company, Inc.
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.
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.
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.
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.
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.
New Way is a leading U.S.-based designer and manufacturer of refuse collection vehicles. Joe Johnson Equipment, Inc., along with Joe Johnson Equipment (USA), Inc., (collectively, “JJE”), is a leading distributor of maintenance equipment for municipal and industrial markets in Canada and the U.S.
Truck Bodies & Equipment International (“TBEI”) manufactures and sells dump truck bodies and trailers under the Ox Bodies, Crysteel, J-Craft, Duraclass, Rugby, Travis, OSW, NTE, and WTB brand names, as well as a range of interchangeable truck body systems and waste-hauling products under the Bucks and Switch-N-Go brand names . 2 Table of Contents Safety and Security Systems Group The Company’s Safety and Security Systems Group is a leading manufacturer and supplier of comprehensive systems and products that law enforcement, fire rescue, emergency medical services, campuses, military facilities, and industrial sites use to protect people and property.
Truck Bodies & Equipment International (“TBEI”) manufactures and sells dump truck bodies and trailers under the Ox Bodies, Crysteel, J-Craft, Duraclass, Rugby, Travis, OSW, NTE, and WTB brand names, as well as a range of interchangeable truck body systems and waste-hauling products under the Bucks and Switch-N-Go brand names .
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.
The Company actively manages material supply sourcing and employs various methods to limit risk associated with commodity cost fluctuations and availability.
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.
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. As of December 31, 2025, the Company employed approximately 5,800 people in its businesses, with the Company’s U.S. hourly employees accounting for approximately 60% of its total workforce.
In those situations, the Company’s production processes rely upon the customer providing the chassis on a timely basis.
In those situations, the 3 Table of Contents 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.
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.
See Note 2 - Acquisitions in Item 8, Financial Statements and Supplementary Data , for additional information.
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.
As of December 31, 2025, approximately 8% of the Company’s U.S. hourly workers were represented by unions. The Company believes that its employees are key to its ability to deliver exceptional products and services to its customers.
Removed
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.
Added
In 2025, the Company completed the acquisition of substantially all the assets and operations of Waterblasting, LLC, owner of Hog Technologies, and Waterblasting Eurasia, s.r.o.
Added
(collectively, “Hog”), the acquisition of all of the outstanding equity interests of Scranton Manufacturing Company LLC d/b/a New Way Trucks (“New Way”), and the acquisition of certain assets and operations of Kinloch Equipment & Supply, Inc. (“Kinloch”). Each of these acquisitions is included in the Environmental Solutions reportable segment.
Added
Safety and Security Systems Group The Company’s Safety and Security Systems Group is a leading manufacturer and supplier of comprehensive systems and products that law enforcement, fire rescue, emergency medical services, campuses, military facilities, and industrial sites use to protect people and property. Offerings include systems for community alerting, emergency vehicles, first responder interoperable communications, and industrial communications.
Added
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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf 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.
Biggest changeAdditionally, 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.
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.
The continued 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.
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.
In 2025, 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.
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.
Our business is subject to fluctuations in demand and changes in international economic, legal, and political conditions that are beyond our control. In 2025, 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.
Increased public awareness and concern regarding climate change and other related matters at numerous levels of government in various jurisdictions may lead to additional international, national, regional, and local legislative and regulatory responses, and compliance with any new rules could be difficult and costly.
Increased public awareness, concern, and responsive backlash regarding climate change and other related matters at numerous levels of government in various jurisdictions may lead to additional international, national, regional, and local legislative and regulatory responses, and compliance with any new rules could be difficult and costly.
Any such liabilities, individually or in the aggregate, could have a material adverse effect on our financial condition, results of operations, or cash flow. We could incur restructuring and impairment charges as we continue to evaluate opportunities to restructure our business and rationalize our manufacturing operations in an effort to optimize our cost structure.
Any such liabilities, individually or in the aggregate, could have a material adverse effect on our financial condition, results of operations, or cash flow. 10 Table of Contents We could incur restructuring and impairment charges as we continue to evaluate opportunities to restructure our business and rationalize our manufacturing operations in an effort to optimize our cost structure.
While we carry insurance and maintain reserves for product liability claims, our insurance coverage may be inadequate if such claims do arise, and any defense costs and liability not covered by insurance could have a material adverse impact on our financial condition, results of operations, or cash flow.
While we carry insurance and maintain reserves for product liability claims, our insurance coverage may be inadequate if such claims do arise, and any defense costs and liability not covered by insurance could have a material 12 Table of Contents adverse impact on our financial condition, results of operations, or cash flow.
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.
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.
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.
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.
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.
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. or other countries, which could further disrupt supply chains and increase volatility of pricing.
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.
Our future pension expenses and funding requirements could increase significantly due to the effect of adverse changes in the discount rate, asset 11 Table of Contents values, or the estimated expected return on plan assets.
Acquisitions involve risks, including those associated with the following: • integrating the operations, financial reporting, disparate systems and processes, and personnel of acquired companies; • managing geographically dispersed operations; • diverting management’s attention from other business concerns; • changing the competitive landscape, including disrupting existing sales channels or markets; • entering markets or lines of business in which we have either limited or no direct experience; and • losing key employees, customers, and strategic partners of acquired companies.
Acquisitions involve risks, including those associated with the following: • integrating the operations, financial reporting, disparate systems and processes, and personnel of acquired companies; • managing geographically dispersed operations; • diverting management’s attention from other business concerns; • changing the competitive landscape, including disrupting existing sales channels or markets; • entering markets or lines of business in which we have either limited or no direct experience and thereby becoming more exposed to the risks attendant to the acquired business; and • losing key employees, customers, and strategic partners of acquired companies.
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.
Significant or sustained 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.
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.
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, 2025, approximately 8% of our U.S. hourly workers were represented by labor unions and were covered by collective bargaining agreements with various unions.
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.
The level of the funding of our defined benefit pension plan liabilities was approximately 96% as of December 31, 2025. 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.
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.
While Pillar Two applies to our worldwide operations, 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.
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.
Government administrations and agencies, political figures, the investment community, employees, and other stakeholders have had an increased focus on sustainability issues and initiatives, including negative reactions to implementation of such 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.
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.
In addition, our future success will depend on, among other factors, our ability to attract and retain qualified personnel, including those personnel hired in connection with our acquisitions. 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.
We are exposed to product liability and warranty claims in the normal course of business in the event that our products actually or allegedly fail to perform as expected, or the use of our products results, or is alleged to result, in bodily injury and/or property damage.
We are exposed to product liability and warranty claims in the normal course of business in the event that our products actually or allegedly fail to perform as expected, or the use of our products results, or is alleged to result, in bodily injury and/or property damage, and we may be exposed to additional claims in connection with our acquisitions.
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.
As of December 31, 2025, goodwill and intangible assets represented 26% and 16% 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, 2025. Goodwill and indefinite-lived intangible assets are tested for impairment annually, or more frequently if indicators of impairment exist.
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.
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.
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.
Although supply chain conditions have improved in recent years, certain of our businesses may periodically 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.
In addition, future acquisitions could result in dilutive issuances of equity securities. Businesses acquired by us may have liabilities that are not known to us. We may assume liabilities in connection with the acquisition of businesses.
In addition, future acquisitions could result in dilutive issuances of equity securities. Businesses acquired by us may have liabilities that are not known to us. We may assume liabilities in connection with the acquisition of businesses, including environmental liabilities which could result in remediation costs and regulatory actions.
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.
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.
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.
Although the Federal Reserve Board of Governors (“FRB”) cut certain benchmark interest rates in 2024 and 2025, it is uncertain if the FRB will raise or lower interest rates in the future in response to, among other things, continuing inflationary pressures, and, if so, to what level and for how long.
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.
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, the ongoing conflicts in the Middle East, continued political unrest in various countries such as Venezuela and ongoing disputes in respect of Greenland.
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.
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.
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.
For example, the Organization for Economic Co-operation and Development (“OECD”) issued Pillar Two model rules introducing a new global minimum corporate tax of 15%, which became effective in certain countries in 2024.
We could experience material product liability or warranty costs in the future and incur significant costs to defend ourselves against these claims.
We are subject to other claims and litigation from time to time, as further described in the accompanying notes to our consolidated financial statements. We could experience material product liability or warranty costs in the future and incur significant costs to defend ourselves against these claims.
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.
The U.S. presidential administration has enacted certain spending freezes and other changes to federal government processes, and there is continuing uncertainty regarding federal agency structure and future budget decisions and priorities.
For example, the U.S. indicated it intends to impose additional tariffs on imports from Canada, Mexico, and 8 Table of Contents China.
Such 8 Table of Contents sanctions may impact companies in many sectors and lead to disruption and volatility in the U.S. and global markets. The U.S. has imposed, or indicated it intends to impose, tariffs on imports from various countries as part of ongoing trade and political disputes and conflicts.
Removed
Further, President Trump has indicated that his administration is likely to impose significant tariffs on imported goods.
Added
Because the U.S. has not adopted Pillar Two, on January 5, 2026, the OECD issued a non-retroactive “Side-by-Side” safe harbor package for U.S. companies with multinational operations to better align the regime with the U.S. tax system.
Removed
For example, we have been sued by firefighters seeking damages claiming that exposure to our sirens has impaired their hearing and that the sirens are, therefore, defective. In addition, we are subject to other claims and litigation from time to time, as further described in the accompanying notes to our consolidated financial statements.
Added
Further, the U.S. presidential administration has implemented, and may continue to implement, significant tariffs on imported goods. In February 2026, the U.S. Supreme Court struck down certain of these tariffs, but it is possible the administration may seek to reinstate all or some of such tariffs under alternative legal theories or support.
Removed
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
The resulting uncertainty regarding the struck-down tariffs and potential re-implementation may result in additional political and economic instability.
Removed
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.
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.

Item 2. Properties

Properties — owned and leased real estate

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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.
Biggest changeApproximately 68% of the total square footage is owned by the Company with the remaining 32% being leased. Owned facilities are subject to liens under the Company’s Fourth Amended and Restated Credit Agreement dated October 29, 2025 (the “2025 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, 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.
Item 2. Properties. As of December 31, 2025, the Company utilized 20 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, 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.
As of December 31, 2025, the Company devoted approximately 3.0 million square feet to manufacturing and 1.2 million square feet to sales, service, warehousing, and office space. Of the total square footage, approximately 86% is devoted to the Environmental Solutions Group and 14% to the Safety and Security Systems Group.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases 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.
Biggest changePurchases 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, 2025: 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 2025 (9/28/25 - 11/1/25) — $ — — $ 157,191,259 November 2025 (11/2/25 - 11/29/25) — — — 157,191,259 December 2025 (11/30/25 - 12/31/25) — — — 157,191,259 (a) In April 2025, the Board authorized a stock repurchase program of up to $150 million of the Company’s common stock.
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.
Recent Sales of Unregistered Securities There were no sales of unregistered securities by the Company during the year ended December 31, 2025. 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 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.
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, 2026, there were 1,354 holders of record of the Company’s common stock.
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.
The graph assumes that the value of the investment in the Company’s common stock, and in each index, was $100 on December 31, 2020 and assumes reinvestment of all dividends through December 31, 2025. Copyright© 2026 Russell Investment Group. All rights reserved. Copyright© 2026 Standard & Poor’s, a division of S&P Global. All rights reserved.
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.
As of December 31, 2020 2021 2022 2023 2024 2025 Federal Signal Corporation $ 100.00 $ 131.81 $ 142.65 $ 237.15 $ 287.10 $ 339.36 Russell 2000 100.00 114.82 91.35 106.82 119.14 134.40 S&P Midcap 400 100.00 124.76 108.47 126.29 143.88 154.68 S&P 500 Industrials 100.00 121.12 114.48 135.24 158.87 189.72 S&P 600 Capital Goods 100.00 125.37 119.95 165.84 195.22 242.93 The stock price performance included in this graph is not necessarily indicative of future stock price performance.
Added
The April 2025 program supplements the Board’s prior authorization under the stock repurchase program adopted in March 2020, which provides for the repurchase of up to $75.0 million of the Company’s common stock and which remains in effect. 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.

Item 7. Management's Discussion & Analysis

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

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Biggest changeThe 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.
Biggest changeThe 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, 2025 and December 31, 2024: For the Years Ended December 31, (in millions of dollars) 2025 2024 Net income $ 246.6 $ 216.3 Add: Interest expense, net 14.1 12.5 Pension settlement charges — 3.8 Acquisition and integration-related expenses, net (a) 16.0 2.8 Purchase accounting effects (b) 1.5 1.1 Other expense, net 2.3 1.2 Income tax expense 77.9 47.6 Depreciation and amortization 80.5 65.3 Adjusted EBITDA $ 438.9 $ 350.6 Net sales $ 2,180.5 $ 1,861.5 Adjusted EBITDA margin 20.1 % 18.8 % (a) Acquisition and integration-related expenses, net for the year ended December 31, 2025 include an aggregate expense of $6.8 million to increase the estimated fair value of contingent consideration for the acquisitions of Hog and substantially all of the assets and operations of Standard Equipment Company (“Standard”), as well as acquisition-related expenses incurred in connection with the acquisitions of New Way and Hog.
In addition, the 2022 Credit Agreement includes customary negative covenants, subject to certain exceptions, restricting or limiting the Company’s and its subsidiaries’ ability to, among other things: (i) make non-ordinary course dispositions of assets; (ii) make certain fundamental business changes, such as mergers, consolidations, or any similar combination; (iii) make restricted payments, including dividends and stock repurchases; (iv) incur indebtedness; (v) make certain loans and investments; (vi) create liens; (vii) transact with affiliates; (viii) enter into certain sale/leaseback transactions; (ix) make negative pledges; and (x) modify subordinated debt documents.
In addition, the 2025 Credit Agreement includes customary negative covenants, subject to certain exceptions, restricting or limiting the Company’s and its subsidiaries’ ability to, among other things: (i) make non-ordinary course dispositions of assets; (ii) make certain fundamental business changes, such as mergers, consolidations or any similar combination; (iii) make restricted payments, including dividends and stock repurchases; (iv) incur indebtedness; (v) make certain loans and investments; (vi) create liens; (vii) transact with affiliates; (viii) enter into certain sale/leaseback transactions; (ix) make negative pledges; and (x) modify subordinated debt documents.
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.
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, refuse collection vehicles, 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.
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.
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 2026. (e) Represents the fair value of the contingent earn-out payments associated with acquisitions.
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.
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, 2025.
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.
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 2025, 2024, or 2023.
The Revolver provides for borrowings in the form of loans or letters of credit up to the aggregate availability under the facility, with a sub-limit of $100 million for letters of credit. Borrowings can be made in denominations of U.S. dollars, Canadian dollars, euros, or British pounds (with borrowings in non-U.S. currencies subject to a sublimit of $300 million).
The Revolver provides for borrowings in the form of loans or letters of credit up to the aggregate availability under the facility, with a sub-limit of $100 million for letters of credit. Borrowings can be made in denominations of U.S. dollars, Canadian dollars, euros, or British pounds (with borrowings in non-U.S. currencies subject to a sublimit of $550 million).
The Company may also choose to invest in the acquisition of businesses. In the absence of significant unanticipated cash demands, we believe that the Company’s existing cash balances, cash flow from operations, and borrowings available under the 2022 Credit Agreement will provide funds sufficient for these purposes.
The Company may also choose to invest in the acquisition of businesses. In the absence of significant unanticipated cash demands, we believe that the Company’s existing cash balances, cash flow from operations, and borrowings available under the 2025 Credit Agreement will provide funds sufficient for these purposes.
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.
The relief from royalty model requires management to make a number of business and valuation assumptions including future revenue growth and royalty rates. In 2025, the Company performed a combination of qualitative and quantitative impairment tests over its indefinite-lived intangible assets.
We continued to execute against our organic growth initiatives, and with contributions from our recent value-added acquisitions and additional efficiency gains resulting from the application of our eighty-twenty initiatives, we were able to sustain a high level of financial performance.
We continued to execute against our organic growth initiatives, and with contributions from recent acquisitions and additional efficiency gains resulting from the application of our eighty-twenty initiatives, we were able to sustain a high level of 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 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.
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.
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.
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, 2025, the Company had a liability of approximately $1.5 million for unrecognized tax benefits, including penalties and interest.
See below for discussion and analysis of our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.
See below for discussion and analysis of our financial condition and results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024.
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.
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, 2024, filed with the SEC on February 26, 2025, for a detailed discussion of our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Operating and Financial Performance in 2024 Conditions in our end markets remained strong throughout 2024, with robust demand for our products and services.
Operating and Financial Performance in 2025 Conditions in our end markets remained strong throughout 2025, with robust demand for our products and services.
The 2022 Credit Agreement also includes certain “covenant holiday” periods, which allow for the temporary increase of the minimum net leverage ratio following the completion of a permitted acquisition, or a series of acquisitions, when the aggregate consideration over a period of twelve months exceeds $75 million.
The 2025 Credit Agreement also includes certain “covenant holiday” periods, which allow for the temporary increase of the maximum net leverage ratio following the completion of a permitted acquisition, or a series of acquisitions, when the aggregate consideration over a period of twelve months exceeds $75 million.
The 2022 Credit Agreement contains customary events of default. If an event of default occurs and is continuing, the Borrowers may be required immediately to repay all amounts outstanding under the 2022 Credit Agreement and the commitments from the lenders may be terminated.
The 2025 Credit Agreement contains customary events of default. If an event of default occurs and is continuing, the Company may be required immediately to repay all amounts outstanding under the 2025 Credit Agreement and the commitments from the lenders may be terminated.
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.
As of December 31, 2025, we have completed 15 acquisitions since 2016. ◦ We demonstrated our commitment to returning value to our stockholders by paying cash dividends of $34.1 million and spending $39.7 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.
As a percentage of net sales, SEG&A expenses were 12.6% in the current year, compared to 12.2% in the prior year.
As a percentage of net sales, SEG&A expenses were 11.7% in the current year, compared to 12.6% in the prior year.
The declaration of dividends is subject to the discretion of the Board and depends on various factors that our Board deems relevant to its analysis and decision making, including our net income, financial condition, and cash requirements. The Company anticipates that capital expenditures for 2025 will be in the range of $40 million to $50 million.
The declaration of future dividends is subject to the discretion of the Board and depends on various factors that our Board deems relevant to its analysis and decision making, including our net income, financial condition, and cash requirements. The Company anticipates that capital expenditures for 2026 will be in the range of $45 million to $55 million.
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.
Borrowings under the 2025 Credit Agreement bear interest, at the Company’s option, at a base rate or an Adjusted Eurocurrency Rate (as defined in the 2025 Credit Agreement) in the case of borrowings in euros or an adjusted RFR (as defined in the 2025 Credit Agreement) in the case of borrowings in U.S. dollars, Canadian dollars, or British pounds, plus, in each case, an applicable margin.
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.
The following table summarizes the Company’s off-balance sheet arrangements and the notional amount by expiration period as of December 31, 2025: 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) $ 10.7 $ 10.7 $ — $ — Performance and bid bonds (b) 14.1 13.2 0.9 — Repurchase obligations (c) 11.4 1.6 4.7 5.1 Total off-balance sheet arrangements $ 36.2 $ 25.5 $ 5.6 $ 5.1 (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.
If its leverage ratio is more than 3.25x, the Company is still permitted to fund (1) up to $35 million of dividend payments and stock repurchases annually; and (2) additional incremental other cash payments up to the greater of $65 million or 5% of consolidated total assets for the term of the 2022 Credit Agreement.
If its leverage ratio is more than 3.25x, the Company is still permitted to fund (1) up to $50 million of dividend payments and stock repurchases, in total, annually; and (2) additional incremental other cash payments up to the greater of $100 million or 5% of consolidated total assets (as defined in the 2025 Credit Agreement) for the term of the 2025 Credit Agreement.
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.
Gross profit as a percentage of net sales (“gross profit margin”) for the year ended December 31, 2025 was 28.9%, compared to 28.6% in the prior year, primarily driven by a 40 basis point improvement within the Environmental Solutions Group and a 80 basis point improvement within the Safety and Security Systems Group.
The Company’s material domestic subsidiaries provide guarantees for all obligations of the Borrowers under the 2022 Credit Agreement, which is secured by a first priority security interest in (i) all existing or hereafter acquired domestic property and assets of the Company and material domestic subsidiaries, (ii) the stock or other equity interests in each of the material domestic subsidiaries, and (iii) 65% of outstanding voting capital stock of certain first-tier foreign subsidiaries, subject to certain exclusions.
The obligations of the Company under the 2025 Credit Agreement are guaranteed by the Company’s material domestic subsidiaries and secured by a first priority security interest in (i) substantially all existing and hereafter acquired domestic property and assets of the Company and material domestic subsidiaries, (ii) the stock or other equity interests in each of the material domestic subsidiaries, and (iii) 65% of outstanding voting capital stock of certain first-tier foreign subsidiaries, subject to certain exclusions.
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 23 Table of Contents repatriation of these funds may cause the Company to incur additional 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 $254.7 million in 2025 and $231.3 million in 2024.
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.
Income tax expense The Company recognized income tax expense of $77.9 million for the year ended December 31, 2025, compared to $47.6 million for the year ended December 31, 2024.
In testing the indefinite-lived intangibles assets for potential impairment, the Company applies either a qualitative test, or a quantitative test, in accordance with ASC 350, Intangibles — Goodwill and Other .
The Company’s indefinite-lived intangible assets include trade names associated with acquisitions. In testing the indefinite-lived intangibles assets for potential impairment, the Company applies either a qualitative test, or a quantitative test, in accordance with ASC 350, Intangibles — Goodwill and Other .
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.
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 $63.7 million as of December 31, 2025 and $91.1 million as of December 31, 2024. As of December 31, 2025, $20.1 million of cash and cash equivalents was held by foreign subsidiaries.
Under the 2022 Credit Agreement, restricted payments, including dividends and stock repurchases, shall be permitted if (i) the Company’s leverage ratio is less than or equal to 3.25x; (ii) the Company is in compliance with all other financial covenants; and (iii) there are no existing defaults under the 2022 Credit Agreement.
The 2025 Credit Agreement permits restricted payments, including dividends and stock repurchases, under certain circumstances, including, but not limited to if: (i) the Company’s leverage ratio is less than or equal to 3.25x; (ii) the Company is in compliance with all other financial covenants; and (iii) there are no existing defaults under the 2025 Credit Agreement.
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.
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, 2025 and December 31, 2024, 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) 2025 2024 2025 vs. 2024 Net sales $ 2,180.5 $ 1,861.5 $ 319.0 Cost of sales 1,549.3 1,328.5 220.8 Gross profit 631.2 533.0 98.2 Selling, engineering, general and administrative expenses 255.9 234.0 21.9 Amortization expense 18.4 15.0 3.4 Acquisition and integration-related expenses, net 16.0 2.6 13.4 Operating income 340.9 281.4 59.5 Interest expense, net 14.1 12.5 1.6 Pension settlement charges — 3.8 (3.8) Other expense, net 2.3 1.2 1.1 Income before income taxes 324.5 263.9 60.6 Income tax expense 77.9 47.6 30.3 Net income $ 246.6 $ 216.3 $ 30.3 Other data: Operating margin 15.6 % 15.1 % 0.5 % Adjusted EBITDA (a) $ 438.9 $ 350.6 $ 88.3 Adjusted EBITDA margin (a) 20.1 % 18.8 % 1.3 % Diluted earnings per share $ 4.01 $ 3.50 $ 0.51 Total orders 2,221.5 1,847.8 373.7 Backlog 1,042.4 997.1 45.3 Depreciation and amortization 80.5 65.3 15.2 (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.
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.
SEG&A expenses increased by $13.5 million, or 11%, for the year ended December 31, 2025, primarily due to additional costs from acquired businesses, as well as increases in sales commissions and higher employee-related expenses. As a percentage of net sales, SEG&A expenses were 7.7% in the current year, compared to 8.2% in the prior year.
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 margin for the year ended December 31, 2025 was 42.8%, compared to 42.0% in the prior year, with the increase primarily attributable to improved operating leverage from higher sales volumes and benefits from pricing actions, partially offset by higher material costs.
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 $17.1 million, or 27%, for the year ended December 31, 2025, primarily due to a $18.9 million increase in gross profit, partially offset by the $1.8 million increase in SEG&A expenses. Backlog was $77 million at December 31, 2025, compared to $57 million at December 31, 2024.
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.
One measure of the sensitivity of assumptions used in the impairment 27 Table of Contents analysis is the amount by which each reporting unit “passed” (fair value exceeds the carrying value). The fair values of the reporting units exceeded their carrying values by more than 60%. Therefore, no impairment was recognized.
The Company also received $3.9 million from stock option exercises in 2023.
The Company also received $3.7 million from stock option exercises in 2025.
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.
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) 2025 2024 Gross borrowings $ 264.3 $ 18.0 Gross payments 194.3 94.5 Aggregate maturities of long-term borrowings and finance lease obligations are $0.5 million in 2026, $10.4 million in 2027, $20.3 million in 2028, $20.3 million in 2029, $514.2 million in 2030, and $0.9 million thereafter.
Included 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.
Included among the Company’s highlights in 2025 were the following: • Net sales for the year ended December 31, 2025 were $2.18 billion, the highest level in our history, and an increase of $319 million, or 17% from last year. • Operating income for the year ended December 31, 2025 was $340.9 million, an increase of $59.5 million, or 21%, from last year. • Operating margin for the year ended December 31, 2025 was 15.6%, compared to 15.1% in the prior year. • Net income for the year ended December 31, 2025 was $246.6 million, an increase of $30.3 million, or 14%, from last year. • Adjusted EBITDA* for the year ended December 31, 2025 was $438.9 million, an increase of $88.3 million, or 25%, from last year. • Adjusted EBITDA margin* for the year ended December 31, 2025 was 20.1%, up from 18.8% last year. • Orders for the year were $2.22 billion, the highest annual orders reported in the Company’s history, contributing to a backlog of $1.04 billion at December 31, 2025. 17 Table of Contents • Net cash provided by operating activities for the year ended December 31, 2025 was $255 million, an increase of $23 million, or 10%, from last year. • In October 2025, we refinanced our credit agreement, increasing our revolving credit facility from up to $675 million to up to $1.1 billion, and increasing the term loan facility from up to $125 million to up to $400 million. • With our strong balance sheet, positive operating cash flow, and increased capacity under our new 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 2025: ◦ Our capital expenditures in 2025 were approximately $28 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 acquisitions of Hog, New Way, and Kinloch.
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.
Operating income increased by $63.4 million, or 24%, for the year ended December 31, 2025, largely due to a $79.3 million increase in gross profit and a $1.0 million reduction in acquisition-related costs, partially offset by the $13.5 million increase in SEG&A expenses and a $3.4 million increase in amortization expense.
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.
Gross profit For the year ended December 31, 2025, gross profit increased by $98.2 million, or 18%, compared to the prior year, primarily due to a $79.3 million improvement within the Environmental Solutions Group and a $18.9 million increase within the Safety and Security Systems Group.
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.
Selling, engineering, general and administrative (“SEG&A”) expenses For the year ended December 31, 2025, SEG&A expenses increased by $21.9 million, or 9%, compared to the prior year, primarily due to a $13.5 million increase within the Environmental Solutions Group, a $6.6 million increase in Corporate SEG&A expenses, and a $1.8 million increase within the Safety and Security Systems Group.
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.
Indefinite-lived Intangible Assets An intangible asset determined to have an indefinite useful life is not amortized. 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.
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.
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, 2025 and December 31, 2024: For the Years Ended December 31, Change (in millions of dollars) 2025 2024 2025 vs. 2024 Net sales $ 343.0 $ 304.4 $ 38.6 Operating income 81.5 64.4 17.1 Other data: Operating margin 23.8 % 21.2 % 2.6 % Total orders $ 363.7 $ 306.2 $ 57.5 Backlog 76.6 57.4 19.2 Depreciation and amortization 4.2 3.9 0.3 Year ended December 31, 2025 vs. year ended December 31, 2024 Total orders increased by $57.5 million, or 19%, for the year ended December 31, 2025.
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.
Within the Safety and Security Systems Group, net sales increased by $38.6 million, or 13%, primarily due to improvements in sales of public safety equipment of $27.7 million, warning systems of $7.4 million, and a $2.8 million favorable foreign currency translation impact. 19 Table of Contents Cost of sales For the year ended December 31, 2025, cost of sales increased by $220.8 million, or 17%, compared to the prior year, largely due to an increase of $201.1 million, or 17%, within the Environmental Solutions Group, primarily related to increased sales volumes, inclusive of the effects of acquisitions, higher material costs, and a $10.2 million increase in depreciation expense.
(c) Purchase obligations primarily relate to commercial chassis and other contracts in the ordinary course of business. (d) The Company expects to contribute up to $3.6 million to the U.S. defined benefit pension plan in 2025. Contributions to the non-U.S. defined benefit pension plan in 2025 are expected to be insignificant.
(c) Purchase obligations primarily relate to commercial chassis and other contracts in the ordinary course of business. (d) The Company expects to contribute up to $4.6 million to the U.S. defined benefit pension plan in 2026. The Company does not currently expect to make any contributions to the non-U.S. defined benefit pension plan in 2026.
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.
The Environmental Solutions Group reported a net sales increase of $280.4 million, or 18%, primarily due to a $61.2 million improvement in aftermarket revenues and increases in sales of road-marking and line-removal equipment of $52.4 million, sewer cleaners of $36.3 million, refuse trucks of $33.6 million, safe-digging trucks of $25.2 million, dump truck bodies of $24.6 million, street sweepers of $23.0 million, industrial vacuum loaders of $12.4 million, and metal extraction support equipment of $10.1 million.
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.
U.S. net sales increased by $219.7 million, or 17%, primarily due to a $55.5 million increase in aftermarket revenues and increases in sales of road-marking and line-removal equipment of $46.3 million, dump truck bodies of $32.4 million, sewer cleaners of $31.2 million, safe-digging trucks of $21.0 million, street sweepers of $17.7 million, industrial vacuum loaders of $12.4 million, and refuse trucks of $7.9 million.
Corporate Expense Corporate operating expenses were $44.2 million in 2024 and $39.5 million in 2023.
Corporate Expense Corporate operating expenses were $65.2 million in 2025 and $44.2 million in 2024.
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.
Operating income Operating income for the year ended December 31, 2025 increased by $59.5 million, or 21%, compared to the prior year, largely due to the $98.2 million improvement in gross profit, partially offset by the $21.9 million increase in SEG&A expenses, a $13.4 million increase in acquisition and integration-related costs, net, and a $3.4 million increase in amortization expense.
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.
Adjusted EBITDA Adjusted EBITDA for the year ended December 31, 2025 was $438.9 million, compared to $350.6 million in the prior year. Adjusted EBITDA margin for the year ended December 31, 2025 was 20.1%, compared to 18.8% in the prior year.
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.
As of December 31, 2025, there was $164.0 million of cash drawn on the Revolver, $400.0 million outstanding under the Term Loan, and $10.7 million of undrawn letters of credit under the 2025 Credit Agreement, with $925.3 million of net availability for borrowings.
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.
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.
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 $1.8 million for the year ended December 31, 2025, primarily due to higher employee-related costs. As a percentage of net sales, SEG&A expenses were 19.0% in the current year, compared with 20.9% in the prior year.
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.
Year ended December 31, 2025 vs. year ended December 31, 2024 Net sales Net sales for the year ended December 31, 2025 increased by $319.0 million, or 17%, compared to the prior year, primarily due to higher sales volumes, inclusive of the effects of acquisitions, and pricing actions.
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.
Applicable margin, issuance fees, and other customary expenses are payable on outstanding letters of credit. 24 Table of Contents The Company is subject to certain net leverage ratio and interest coverage ratio financial covenants under the 2025 Credit Agreement that are to be measured at each fiscal quarter-end for the most recently ended four-quarter period.
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.
Consolidated operating margin for the year ended December 31, 2025 was 15.6%, compared to 15.1% in the prior year. Interest expense, net Interest expense, net for the year ended December 31, 2025 increased by $1.6 million, or 13%, compared to the prior year, largely due to higher average debt levels associated with the funding of acquisitions in 2025.
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.
The weighted average interest rate on long-term borrowings was 4.8% at December 31, 2025. The Company paid interest of $14.3 million in 2025 and $15.3 million in 2024. The Company paid income taxes (net of refunds) of $64.9 million in 2025.
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.
Gross profit margin for the year ended December 31, 2025 was 26.4%, compared to 26.0% 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 higher material costs and higher depreciation expense.
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.
U.S. orders increased by $41.2 million, or 20%, compared to the prior year, driven by improvements in orders for public safety equipment of $33.0 million, warning 22 Table of Contents systems of $7.0 million, and industrial signaling equipment of $1.2 million.
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.
Environmental Solutions The following table summarizes the Environmental Solutions Group’s operating results as of, and for the years ended, December 31, 2025 and December 31, 2024: For the Years Ended December 31, Change (in millions of dollars) 2025 2024 2025 vs. 2024 Net sales $ 1,837.5 $ 1,557.1 $ 280.4 Operating income 324.6 261.2 63.4 Other data: Operating margin 17.7 % 16.8 % 0.9 % Total orders $ 1,857.8 $ 1,541.6 $ 316.2 Backlog 965.8 939.7 26.1 Depreciation and amortization 75.7 60.9 14.8 Year ended December 31, 2025 vs. year ended December 31, 2024 Total orders for the year ended December 31, 2025 increased by $316.2 million, or 21%, compared to the prior year.
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.
Net sales increased for the year ended December 31, 2025 by $280.4 million, or 18%, compared to the prior year, primarily due to higher sales volumes, inclusive of the effects of acquisitions, and pricing actions.
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.
The 2025 Credit Agreement amended and restated the Third Amended and Restated Credit Agreement (as amended, the “2022 Credit Agreement”), which provided the Company with an aggregate original principal amount of up to $800 million, consisting of (i) a revolving credit facility in an amount up to $675 million 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 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.
The Company also paid $11.5 million to acquire a previously-leased manufacturing facility, funded cash dividends of $34.1 million and share repurchases of $39.7 million, and redeemed $13.6 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.
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.
During the year, we increased production levels at several of our facilities, helping us to deliver record financial results for our stockholders, with 17% net sales growth, double-digit earnings improvement, expansion of margins, and improved cash flow generation.
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.
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. 25 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, 2025: 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 $ 564.0 $ — $ 30.0 $ 534.0 $ — Interest payments on long-term debt (a) 126.5 27.2 53.5 45.8 — Operating lease obligations (b) 32.7 9.4 13.6 7.6 2.1 Finance lease obligations 3.0 0.6 0.9 0.5 1.0 Purchase obligations (c) 281.5 268.5 12.4 0.6 — Pension contributions (d) 4.6 4.6 — — — Contingent earn-out payments (e) 29.6 15.0 14.6 — — Total contractual obligations (f) $ 1,041.9 $ 325.3 $ 125.0 $ 588.5 $ 3.1 (a) Amounts represent estimated contractual interest payments on outstanding long-term debt.
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.
Cost of sales increased by $201.1 million, or 17%, for the year ended December 31, 2025, primarily related to increased sales volumes, inclusive of the effects of acquisitions, higher material costs, and a $10.2 million increase in depreciation expense.
Partially offsetting these improvements were reductions in shipments of trailers of $13.4 million and safe-digging trucks of $7.7 million.
Partially offsetting these improvements were reductions in shipments of trailers of $8.8 million and multi-purpose maintenance vehicles of $3.4 million.
In addition, we engage in the sale of parts, service and repair, equipment rentals, and training as part of a comprehensive aftermarket offering to our customer base. We operate 23 manufacturing facilities in five countries and provide products and integrated solutions to municipal, governmental, industrial, and commercial customers in all regions of the world.
We operate 26 manufacturing facilities in five countries and provide products and integrated solutions to municipal, governmental, industrial, and commercial customers in all regions of the world.
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.
Within the Safety and Security Systems Group, cost of sales increased by $19.7 million, or 11%, primarily related to increased sales volumes, higher material costs, an d a $2.2 million u nfavorable foreign currency translation impact.
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.
In 2025, the Company applied the quantitative approach to assess the goodwill of its reporting units for potential impairment, and used a combination of the income and market approaches to determine the fair value of its reporting units. The valuations were prepared by a third-party valuation specialist.
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.
Partially offsetting these improvements was an $8.8 million reduction in sales of trailers and a $4.0 million unfavorable foreign currency translation impact.
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.
For further discussion, see Note 10 – Income Taxes in Item 8, Financial Statements and Supplementary Data . 20 Table of Contents Net income Net income for the year ended December 31, 2025 increased by $30.3 million, or 14%, compared to the prior year, largely due to the increased operating income and the non-recurrence of pension settlement charges recognized in the prior year, partially offset by a $30.3 million increase in income tax expense and the increases in interest expense, net, and other expense, net.
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.
The Company had no goodwill impairments in 2025, 2024, or 2023. 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 2025.
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.
Non-U.S. net sales increased by $60.7 million, or 21%, primarily due to increases in sales of third-party refuse trucks of $25.7 million, metal extraction support equipment of $11.3 million, road-marking and line-removal equipment of $6.1 million, aftermarket offerings of $5.7 million, street sweepers of $5.3 million , sewer cleaners of $5.1 million, safe-digging trucks of $4.2 million, and waterblasting equipment of $3.9 million .
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.
Non-U.S. net sales increased by $15.1 million, or 15%, driven by improvements in sales of public safety equipment of $10.4 million, warning systems of $3.7 million, and a $2.8 million favorable foreign currency translation impact. Partially offsetting these improvements was a $1.8 million reduction in shipments of industrial signaling equipment.
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.
In both years, cash was used to fund the purchase of properties and equipment, with capital expenditures of $27.6 million in 2025 and $40.6 million in 2024.
Borrowings under the 2022 Credit Agreement may be used for working capital and general corporate purposes, including acquisitions. The 2022 Credit Agreement matures on October 21, 2027.
Such expansion may be in the form of increases to the revolving facility commitments, or funding of incremental term loans. Borrowings under the 2025 Credit Agreement may be used for working capital and general corporate purposes, including acquisitions. The 2025 Credit Agreement matures on October 29, 2030.
Cost of sales increased by $2.6 million, or 1%, for the year ended December 31, 2024, primarily related to higher sales volumes, partially offset by favorable product mix and lower material costs.
Cost of sales increased by $19.7 million, or 11%, for the year ended December 31, 2025, primarily related to increased sales volumes, higher material costs, an d a $2.2 million u nfavorable foreign currency translation impact.
Partially offsetting these increases were lower post-retirement expenses and the recognition of a $1.8 million gain associated with an insurance recovery in 2024. The Company’s hearing loss litigation has historically been managed by the Company’s legal staff resident at the corporate office and not by management at either segment.
The Company’s hearing loss litigation has historically been managed by the Company’s legal staff resident at the corporate office and not by management at either segment.
Non-U.S. sales decreased by $9.3 million, or 8%, largely due to reductions in industrial signaling equipment of $5.0 million and public safety equipment of $4.9 million, partially offset by a $0.5 million improvement in sales of warning systems.
Non-U.S. orders increased by $16.3 million, or 16%, primarily due to improvements in orders for public safety equipment of $21.5 million and a $2.6 million favorable foreign currency translation impact. Partially offsetting these improvements were reductions in orders for warnings systems of $6.8 million and industrial signaling equipment of $1.0 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe 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.
Biggest changeSee 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 2025.
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%.
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 1% and operating income by approximately 1%.
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.
A hypothetical 1% increase or decrease in variable interest rates on the Company’s total debt obligations as of December 31, 2025 would increase or decrease annual interest expense by approximately $5.7 million.
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 fair value of the Company’s total debt obligations held at December 31, 2025 was $566.6 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, 2025, the Company did not have any interest rate swaps outstanding.

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