FSS US Equity☆

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Objective

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide information that is supplemental to, and shall be read together with, the consolidated financial statements and the accompanying notes included in Item 8, Financial Statements and Supplementary Data, in this Form 10-K. Information in MD&A is intended to provide an analysis of our financial condition and results of operations from management’s perspective and assist the reader in obtaining an understanding of (i) the consolidated financial statements, (ii) the Company’s business segments and how the results of those segments impact the Company’s results of operations and financial condition as a whole, and (iii) how certain accounting principles affect the Company’s consolidated financial statements, and to provide discussion of material events and uncertainties known to management that are reasonably likely to cause reported financial information not to be indicative of future operating results or future financial condition.

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, 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.

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. Product offerings also include certain products manufactured by other companies, such as third-party refuse and recycling collection vehicles. 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 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.

As described in Note 17 – Segment Information in Item 8, Financial Statements and Supplementary Data, in this Form 10-K the Company’s business units are organized in two reportable segments: the Environmental Solutions Group and the Safety and Security Systems Group.

Operating and Financial Performance in 2025

Conditions in our end markets remained strong throughout 2025, with robust demand for our products and services. 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. 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.

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.

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•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. 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. 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.

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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

Selling, engineering, general and administrative expenses 255.9 234.0 21.9

Acquisition and integration-related expenses, net 16.0 2.6 13.4

Pension settlement charges — 3.8 (3.8)

Other data:

Adjusted EBITDA margin (a) 20.1 % 18.8 % 1.3 %

Diluted earnings per share $ 4.01 $ 3.50 $ 0.51

(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. The Company believes that investors use versions of these metrics in a similar manner. For these reasons, the Company believes that adjusted EBITDA and adjusted EBITDA margin are meaningful metrics to investors in evaluating the Company’s underlying financial performance. Adjusted EBITDA is a non-GAAP measure that represents the total of net income, interest expense, net, pension settlement charges, acquisition and integration-related expenses, net, purchase accounting effects, other expense, net, income tax expense, and depreciation and amortization expense, where applicable. Adjusted EBITDA margin is a non-GAAP measure that represents the total of net income, interest expense, net, pension settlement charges, acquisition and integration-related expenses, net, purchase accounting effects, other expense, net, income tax expense, and depreciation and amortization expense, where applicable, divided by net sales for the applicable period(s). Other companies may use different methods to calculate adjusted EBITDA and adjusted EBITDA margin.

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. 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. Partially offsetting these improvements was an $8.8 million reduction in sales of trailers and a $4.0 million unfavorable foreign currency translation impact. 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.

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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. 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, and a $2.2 million unfavorable foreign currency translation impact.

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. 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.

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. As a percentage of net sales, SEG&A expenses were 11.7% in the current year, compared to 12.6% in the prior year.

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. 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.

Pension settlement charges

During the year ended December 31, 2024, the Company announced a limited-time voluntary lump-sum pension offering to eligible participants of its U.S. defined benefit plan. In 2024, the Company paid a total of $6.8 million in lump-sum benefit payments, using assets of the plan. As total settlement payments during the year ended December 31, 2024 exceeded the sum of the service and interest cost, the Company was required to remeasure the liabilities of the benefit plans and recognized a pension settlement charge of $3.8 million. For further discussion, see Note 11 – Pension and Other Post-Employment Plans in Item 8, Financial Statements and Supplementary Data.

Other expense, net

For the year ended December 31, 2025, Other expense, net, increased by $1.1 million compared to the prior year, primarily due to higher net periodic pension expense.

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. The increase in income tax expense in 2025 was primarily due to higher pre-tax income levels and the non-recurrence of a $15.9 million discrete tax benefit, which was recognized in the prior-year period in connection with the amendment of certain U.S. federal and state tax returns to claim a worthless stock deduction. Including these items, the Company’s effective tax rate for the year ended December 31, 2025 was 24.0%, compared to 18.0% in 2024. For further discussion, see Note 10 – Income Taxes in Item 8, Financial Statements and Supplementary Data.

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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.

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.

The following table summarizes the Company’s adjusted EBITDA and adjusted EBITDA margin and reconciles net income to adjusted EBITDA for the years ended December 31, 2025 and December 31, 2024:

For the Years Ended December 31,

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

Depreciation and amortization 80.5 65.3

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.

(b)Purchase accounting effects represent the step-up in the valuation of equipment acquired in recent business combinations that was sold during the periods presented. Excludes purchase accounting expense effects included within depreciation and amortization of $0.9 million and $0.2 million for the years ended December 31, 2025 and 2024, respectively.

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

Other data:

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. U.S. orders increased by $329.8 million, or 27%, primarily due to improvements in orders for refuse trucks of $147.4 million, inclusive of the acquisition of a $142.9 million U.S. order backlog attributable to the New Way transaction, aftermarket offerings of $51.6 million, safe-digging trucks of $46.8 million, road-marking and line-removal equipment of $43.8 million,

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inclusive of the acquisition of a $16.1 million U.S. order backlog attributable to the Hog transaction, industrial vacuum loaders of $17.8 million, street sweepers of $14.7 million, and dump truck bodies of $9.6 million. Partially offsetting these improvements were reductions in orders for multi-purpose maintenance vehicles of $1.5 million, sewer cleaners of $1.1 million, and trailers of $0.9 million. Non-U.S. orders decreased by $13.6 million, or 4%, primarily due to reductions in orders for third-party refuse trucks of $73.0 million and dump truck bodies of $9.3 million, as well as a $4.3 million unfavorable foreign currency translation impact. Partially offsetting these reductions were improvements in orders for sewer cleaners of $24.5 million, metal extraction support equipment of $13.5 million, road-marking and line-removal equipment of $12.2 million, inclusive of the acquisition of a $3.4 million non-U.S. order backlog attributable to the Hog transaction, aftermarket offerings of $7.0 million, safe-digging trucks of $4.6 million, the acquisition of a $3.4 million non-U.S. order backlog attributable to the New Way transaction, waterblasting equipment of $2.2 million, industrial vacuum loaders of $1.7 million, and street sweepers of $1.6 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. 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. Partially offsetting these improvements were reductions in shipments of trailers of $8.8 million and multi-purpose maintenance vehicles of $3.4 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. Partially offsetting these improvements was a $7.8 million reduction in dump truck body shipments and a $4.0 million unfavorable foreign currency translation impact.

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. 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.

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.

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.

Backlog was $966 million at December 31, 2025, compared to $940 million at 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

Other data:

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. 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

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systems of $7.0 million, and industrial signaling equipment of $1.2 million. 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.

Net sales increased by $38.6 million, or 13%, for the year ended December 31, 2025, inclusive of the effects of higher sales volumes and pricing actions. U.S. net sales increased by $23.5 million, or 12%, driven by improvements in sales of public safety equipment of $17.3 million, warning systems of $3.7 million, and industrial signaling equipment of $2.5 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.

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, and a $2.2 million unfavorable foreign currency translation impact. 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.

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.

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.

Corporate Expense

Corporate operating expenses were $65.2 million in 2025 and $44.2 million in 2024.

For the year ended December 31, 2025, corporate operating expenses increased by $21.0 million compared to the prior year, primarily due to a $14.4 million increase in acquisition-related expenses, which included an aggregate expense of $6.8 million to increase the estimated fair value of contingent consideration for the acquisitions of Hog and Standard, as well as acquisition-related expenses incurred in connection with the acquisitions of New Way and Hog. In addition, corporate operating expenses for the year ended December 31, 2025 include year-over-year increases in post-retirement expense, information technology costs, stock compensation expense, and incentive-based compensation, as well as the non-recurrence of a $1.8 million gain associated with an insurance recovery in the prior year.

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. 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.

Financial Condition, Liquidity and Capital Resources

The Company uses its cash flow from operations to fund growth and to make capital investments that sustain its operations, reduce costs, or both. Beyond these uses, remaining cash is used to pay down debt, repurchase shares, fund dividend payments, and make pension contributions. 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 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. Cash and cash equivalents held by subsidiaries outside the U.S. typically are held in the currency of the country in which it is located. The Company uses this cash to fund the operating activities of its foreign subsidiaries and for further investment in foreign operations. Generally, the Company has considered such cash to be indefinitely reinvested in its foreign operations and the Company’s current plans do not demonstrate a need to repatriate such cash to fund U.S. operations. However, in the event that these funds were needed to fund U.S. operations or to satisfy U.S. obligations, they generally could be repatriated. The

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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 increase in cash generated by operating activities in 2025 compared to the prior year was primarily due to higher net income partially offset by the non-recurrence of a U.S. federal worthless stock deduction refund of approximately $14.0 million received in the prior year.

Net cash used for investing activities totaled $527.9 million in 2025 and $78.9 million in 2024. 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. During 2025, the Company completed the acquisitions of Hog for initial consideration of $82.5 million, New Way for an initial payment of $403.6 million, net of cash acquired, and certain assets and operations of Kinloch for $14.9 million. During 2024, the Company completed the acquisition of Standard for initial consideration of $39.7 million.

Net cash of $244.5 million was provided by financing activities in 2025, whereas in 2024, net cash of $121.0 million was used for financing activities. In 2025, the Company increased net borrowings under its credit facilities by an aggregate $349.7 million, primarily to fund current-year acquisitions. Additionally, the Company funded payments of $4.3 million relating to the 2023 acquisition of substantially all of the assets and operations of Trackless Vehicles Limited and Trackless Vehicles Asset Corp., including the wholly owned subsidiary Work Equipment Ltd (collectively, “Trackless”). 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. The Company also received $3.7 million from stock option exercises in 2025. In 2024, the Company paid down $76.5 million of borrowings under its revolving credit facility and $3.9 million under its term loan facility, funded cash dividends of $29.3 million and share repurchases of $6.7 million, and redeemed $6.1 million of common stock in order to remit funds to tax authorities to satisfy employees’ tax withholdings following the vesting of stock-based compensation and the exercise of stock options. The Company also received $2.0 million from stock option exercises in 2024.

On October 29, 2025, the Company entered into the 2025 Credit Agreement, by and among the Company, Wells Fargo Bank, National Association, as administrative agent, swingline lender, and an issuing lender, BofA Securities, Inc., PNC Capital Markets LLC, Truist Bank, and U.S. Bank National Association as syndication agents, and the other lenders and parties signatory thereto.

The 2025 Credit Agreement is a senior secured credit facility that provides the Company access to an aggregate principal amount of up to $1.5 billion, consisting of (i) a revolving credit facility in an amount up to $1.1 billion (the “Revolver”) and (ii) a delayed draw term loan facility in an amount up to $400 million (the “Term Loan”), which was drawn down on November 25, 2025 in connection with the acquisition of New Way. 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). In addition, the Company may expand its borrowing capacity under the 2025 Credit Agreement by an aggregate amount of up to the sum of (x) the greater of (i) $500 million and (ii) 100% of Consolidated EBITDA for the applicable four-quarter period preceding such expansion, and (y) the amount of additional indebtedness (if any) that could be incurred without causing the Consolidated Total Net Leverage Ratio for the applicable four-quarter period preceding such expansion, on a pro forma basis, to exceed 2.75 to 1.00, subject to the approval of the applicable lenders providing such additional borrowings. 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.

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.

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 applicable margin ranges from zero to 0.75% for base rate borrowings and 1.00% to 1.75% for Adjusted Eurocurrency Rate and RFR borrowings. The Company must also pay a commitment fee to the lenders ranging between 0.10% to 0.25% per annum on the unused portion of the Revolver, along with other standard fees. Applicable margin, issuance fees, and other customary expenses are payable on outstanding letters of credit.

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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. The Company was in compliance with all such covenants as of December 31, 2025. 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. 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.

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. 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.

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.

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 connection with entering into the 2025 Credit Agreement during the year ended December 31, 2025, the Company wrote off $0.1 million of unamortized deferred financing fees associated with the 2022 Credit Agreement as a component of Interest expense, net on the Consolidated Statements of Operations, and incurred $4.4 million of new debt issuance costs. The remaining unamortized deferred financing costs are being amortized over the five-year term as a component of Interest expense, net on the Consolidated Statements of Operations.

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.

The following table summarizes the gross borrowings and gross payments under the Company’s revolving credit facilities:

For the Years Ended December 31,

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. 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. In 2024, the Company paid income taxes of $62.4 million and received the aforementioned $14.0 million U.S. federal income tax refund.

The Company paid cash dividends to stockholders of $34.1 million in 2025 and $29.3 million in 2024. 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. 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.

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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

Pension contributions (d) 4.6 4.6 — — —

Contingent earn-out payments (e) 29.6 15.0 14.6 — —

(a) Amounts represent estimated contractual interest payments on outstanding long-term debt.

(b) Amounts include contractual obligations associated with lease arrangements with an initial term of twelve months or less, which are not recorded on the Consolidated Balance Sheets. For further discussion, see Note 4 – Leases in Item 8, Financial Statements and Supplementary Data.

(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. Future contributions to the plans will be based on such factors as (i) annual service cost, (ii) the financial return on plan assets, (iii) interest rate movements that affect discount rates applied to plan liabilities, and (iv) the value of benefit payments made. 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. 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. For further discussion, see Note 10 – Income Taxes in Item 8, Financial Statements and Supplementary Data. Due to the uncertainties related to these tax matters, the Company generally cannot make a reasonably reliable estimate of the period of cash settlement for this liability. As such, the potential future cash outflows are not included in the table above.

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 than1 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 —

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.

(b) Performance and bid bonds primarily relate to guarantees of performance of certain subsidiaries that engage in transactions with domestic and foreign customers.

(c) Relates to certain transactions that the Company has entered into involving the sale of equipment to certain of its customers which included (i) guarantees to repurchase the equipment for a fixed price at a future date and (ii) guarantees to repurchase the equipment from the third-party lender in the event of default by the customer. For further discussion, see Note 12 – Commitments and Contingencies in Item 8, Financial Statements and Supplementary Data.

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Critical Accounting Policies and Estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and (iii) the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company considers the following policies to be the most critical in understanding the judgments that are involved in the preparation of the Company’s consolidated financial statements and the uncertainties that could impact the Company’s financial condition, results of operations, or cash flow.

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.

In testing the goodwill of its reporting units for potential impairment, the Company applies either a qualitative or quantitative test, in accordance with ASC 350, Intangibles – Goodwill and Other.

A qualitative approach may be applied when the Company concludes that it is not “more likely than not” that the fair value of a reporting unit is less than its carrying value. In conducting a qualitative assessment, the Company analyzes a variety of events or factors that may influence the fair value of the reporting unit, including, but not limited to: the results of prior quantitative assessments performed; changes in the carrying amount; actual and projected financial performance; relevant market data for both the Company and its guideline comparable companies; industry outlook; and macroeconomic conditions. Significant judgment is used to evaluate the totality of these events and factors to make the determination of whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. In this situation, the Company would not be required to perform the quantitative impairment test described below.

A quantitative approach is performed by comparing the fair value of a reporting unit with its carrying amount. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired, and no impairment charge is required. If the carrying amount of a reporting unit exceeds its fair value, this difference is recorded as an impairment charge not to exceed the carrying amount of goodwill. The Company generally determines the fair value of its reporting units using both the income and market approaches.

Under the income approach, the key assumptions include projected sales and earnings before interest, income taxes, depreciation, and amortization (“EBITDA”). These assumptions are determined by management utilizing our internal operating plan, including growth rates for revenues and margin assumptions. An additional key assumption under this approach is the discount rate, which is determined by reviewing current risk-free rates of capital and current market interest rates and by evaluating the risk premium relevant to the reporting unit. If the Company’s assumptions relative to growth rates were to change, the fair value calculation may change, which could result in impairment.

Under the market approach, the Company estimates fair value using marketplace fair value data from within a comparable industry grouping of publicly traded companies and from pricing multiples implied from sales of companies similar to the Company’s reporting units. The Company’s selection of comparable guideline companies is a key assumption underlying the market approach. Similar to the income approach discussed above, sales, cost of sales, operating expenses, EBITDA and their respective growth rates are also key assumptions utilized. The market prices of the Company’s common stock and other guideline companies are additional key inputs. If these market prices increase, the estimated market value would increase. Conversely, if market prices decrease, the estimated market value would decrease.

The results of these two methods are weighted based upon management’s evaluation of the relevance of the two approaches.

Although the Company believes its estimates of fair value are reasonable, actual financial results could differ from estimated financial results due to the inherent uncertainty involved in making such estimates. Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on either the fair value of the reporting units, the amount of any goodwill impairment charge, or both. The Company also compares the sum of the estimated fair values of its reporting units to the overall fair value of the Company implied by its market capitalization. This comparison provides an indication that, in total, assumptions and estimates are reasonable. 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 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. One measure of the sensitivity of assumptions used in the impairment

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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 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. 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.

See Note 8 – Goodwill and Other Intangible Assets in Item 8, Financial Statements and Supplementary Data, for a summary of the Company’s goodwill by segment.

Indefinite-lived Intangible Assets

An intangible asset determined to have an indefinite useful life is not amortized. 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.

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. A qualitative approach may be applied when the Company concludes that it is not “more likely than not” that the fair value of the indefinite-lived intangible assets is less than their carrying value. A quantitative impairment test consists of comparing the fair value of the indefinite-lived intangible asset with its carrying amount. An impairment loss would be recognized for the carrying amount in excess of its fair value.

Significant judgment is applied when evaluating whether an intangible asset has an indefinite useful life and in testing for impairment. The Company primarily uses the relief from royalty model to estimate the fair value of the 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. The fair value of the indefinite-lived intangible asset that was quantitatively tested for impairment exceeded its carrying value by approximately 45%, and, therefore, no impairment was recognized. This valuation was prepared by a third-party valuation specialist. 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. Although the Company believes its estimates of fair value are reasonable, actual financial results could differ from estimated financial results due to the inherent uncertainty involved in making such estimates. The use of alternative estimates and assumptions could increase or decrease the estimated fair value of the assets and potentially result in different impacts to the Company’s results of operations. Actual results may differ from the Company’s estimates.

See Note 8 – Goodwill and Other Intangible Assets in Item 8, Financial Statements and Supplementary Data, for a summary of the Company’s indefinite-lived intangible assets.

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Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

The Company is subject to market risk associated with changes in interest rates and foreign currency exchange rates. To mitigate this risk, the Company may utilize derivative financial instruments, including interest rate swaps and foreign currency forward contracts. The Company does not hold or issue derivative financial instruments for trading or speculative purposes and is not party to leveraged derivatives contracts.

Interest Rate Risk

The Company has certain debt instruments which subject it to market risk associated with movements in interest rates. 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. 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 2025. 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.

Foreign Exchange Rate Risk

Although the majority of the Company’s sales, expenses, and cash flow are transacted in U.S. dollars, the Company has exposure to changes in foreign currency exchange rates, primarily the Canadian dollar, euro, and British pound. The impact of currency movements on the Company’s financial results is largely mitigated by natural hedges in its operations. The Canadian operations of JJE and Trackless primarily conduct business in Canadian dollars. Almost all other sales of product from the U.S. to other parts of the world are denominated in U.S. dollars. Sales from and within other currency zones are predominantly transacted in the currency of the country sourcing the product or service. 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%.

The Company may also have foreign currency exposures related to buying and selling in currencies other than the local currency in which it operates and to certain balance sheet positions. If such transactional or balance sheet exposures are material, the Company may enter into matching foreign currency forward contracts from time to time to protect against variability in exchange rates.

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Item 8. Financial Statements and Supplementary Data.

FEDERAL SIGNAL CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page

Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 34) 31

Consolidated Balance Sheets as of December 31, 2025 and 2024 36

Notes to Consolidated Financial Statements 39

Note 1 – Summary of Significant Accounting Policies 39

Note 2 – Acquisitions 44

Note 3 – Revenue Recognition 50

Note 4 – Leases 51

Note 5 – Inventories 53

Note 6 – Properties and Equipment, Net 53

Note 7 – Rental Equipment, Net 53

Note 8 – Goodwill and Other Intangible Assets 54

Note 9 – Debt 55

Note 10 – Income Taxes 57

Note 11 – Pension and Other Post-Employment Plans 61

Note 12 – Commitments and Contingencies 66

Note 13 – Legal Proceedings 66

Note 14 – Earnings Per Share 67

Note 15 – Stock-based Compensation 68

Note 16 – Stockholders’ Equity 72

Note 17 – Segment Information 74

Note 18 – Fair Value Measurements 77

Note 19 – Subsequent Events 79

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Federal Signal Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Federal Signal Corporation and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill - Refer to Notes 1 and 8 to the financial statements

Critical Audit Matter Description

In testing the goodwill of its reporting units for potential impairment, the Company applies either a qualitative or quantitative test, in accordance with ASC 350, Intangibles – Goodwill and Other. A qualitative approach may be applied when the Company concludes that it is not “more likely than not” that the fair value of a reporting unit is less than its carrying value.

A quantitative approach is performed by comparing the fair value of a reporting unit with its carrying amount (“quantitative assessment”).

For reporting units tested for impairment using the quantitative assessment, the Company determines the fair value of each reporting unit using both the income and market approaches. The income approach requires management to make a number of business and valuation assumptions for each reporting unit including annual assumptions of projected sales, cost of sales, operating expenses, earnings before interest, income taxes, depreciation, and amortization (“EBITDA”), and discount rates. The market approach requires management to estimate fair value using marketplace fair value data derived from a comparable industry grouping of publicly traded companies and from pricing multiples implied from sales of companies similar to the Company’s reporting units (“market multiples”). No impairment was recognized in 2025.

We identified the valuation of goodwill for one of the Company’s reporting units as a critical audit matter due to the reporting unit’s historical performance as compared to projections and because the determination of reporting unit fair value was based

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on significant assumptions that are sensitive to changes and are affected by expected future market and economic conditions. Auditing management’s judgments used in the quantitative assessment regarding significant assumptions related to projected forecasts as well as the selection of market multiples applied to management’s projected sales and EBITDA estimates for this reporting unit required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company’s forecasts and the selection of market multiples for this reporting unit included the following, among others:

•We tested the design and operating effectiveness of controls over the annual goodwill impairment assessment, including those over the forecasts and the calculation of market multiples.

•We evaluated management’s ability to accurately forecast projected sales and EBITDA by comparing actual results to management’s historical forecasts.

•We evaluated the reasonableness of management’s forecasts by comparing the forecasts to:

◦Internal communications to management and the Board of Directors.

◦Historical results, third-party economic research, industry performance, and peer company performance.

•We performed sensitivity analyses to evaluate the risk of impairment if key assumptions are changed.

•With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology and (2) market multiples by performing certain procedures, that included:

◦Evaluating whether the fair value models being used are appropriate considering the Company’s circumstances and valuation premise identified.

◦Evaluating the market multiples by considering (1) the selected comparable industry grouping of publicly traded companies, (2) the selected sales of companies similar to the Company’s reporting unit, and (3) the adjustments made for differences in growth prospects and risk profiles between the reporting unit and the comparable industry grouping of publicly traded companies.

◦Testing the underlying source information and mathematical accuracy of the calculations.

/s/ Deloitte & Touche LLP

Chicago, Illinois

February 25, 2026

We have served as the Company’s auditor since 2013.

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Federal Signal Corporation

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Federal Signal Corporation and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated February 25, 2026, expressed an unqualified opinion on those financial statements.

As described in Management's Annual Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting related to the Company’s acquired assets and operations of Waterblasting, LLC and Waterblasting Eurasia, s.r.o. (collectively, “Hog”), Scranton Manufacturing Company LLC d/b/a New Way Trucks (“New Way”), and Kinloch Equipment & Supply, Inc. (“Kinloch”), which were acquired on February 12, 2025, November 25, 2025, and December 4, 2025, respectively, and whose financial statements constitute approximately 10% of total assets and 4% of net sales of the consolidated financial statement amounts (excluding goodwill, intangible assets, and operating and finance lease right-of-use assets, which were integrated into the Company’s control environment) for the year ended December 31, 2025. Accordingly, our assessment did not include the internal control over financial reporting at Hog, New Way, and Kinloch.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Chicago, Illinois

February 25, 2026

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FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Years Ended December 31,

(in millions of dollars, except per share data) 2025 2024 2023

Selling, engineering, general and administrative expenses 255.9 234.0 210.1

Acquisition and integration-related expenses, net 16.0 2.6 0.4

Pension settlement charges — 3.8 —

Earnings per share:

Weighted average shares outstanding:

See notes to consolidated financial statements.

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FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Years Ended December 31,

Other comprehensive income (loss):

Change in foreign currency translation adjustment 16.7 (14.4) 5.9

Total other comprehensive income (loss) 18.0 (7.7) 2.7

See notes to consolidated financial statements.

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FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

As of December 31,

(in millions of dollars, except per share data) 2025 2024

ASSETS

Current assets:

Cash and cash equivalents $ 63.7 $ 91.1

Prepaid expenses and other current assets 26.3 24.0

Properties and equipment, net 274.6 218.9

Operating lease right-of-use assets 28.4 27.8

Deferred tax assets 10.1 9.4

Deferred charges and other long-term assets 20.3 16.0

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accrued liabilities:

Compensation and withholding taxes 52.3 45.6

Current operating lease liabilities 7.9 6.8

Contingent consideration 15.0 4.2

Other current liabilities 61.0 51.8

Long-term borrowings and finance lease obligations 564.6 204.4

Long-term operating lease liabilities 21.6 21.8

Long-term pension and other post-retirement benefit liabilities 43.1 41.7

Deferred tax liabilities 71.9 58.0

Other long-term liabilities 27.0 11.4

Stockholders’ equity:

Capital in excess of par value 330.4 309.8

Treasury stock, at cost, 9.9 and 9.2 shares, respectively (263.5) (207.8)

Accumulated other comprehensive loss (71.0) (89.0)

Total liabilities and stockholders’ equity $ 2,392.6 $ 1,765.2

See notes to consolidated financial statements.

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FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31,

Operating activities:

Deferred financing costs 0.7 0.5 0.5

Stock-based compensation expense 15.0 15.6 13.1

Pension settlement charges — 3.8 —

Pension-related expense, net of funding (0.5) (3.8) (1.8)

Changes in fair value of contingent consideration 6.8 (0.2) (2.1)

Amortization of interest rate swap settlement gain — (1.4) (2.4)

Payments for acquisition-related activity (0.1) — —

Deferred income taxes 13.9 4.9 (0.3)

Changes in operating assets and liabilities:

Accounts receivable (26.6) (9.0) (6.1)

Prepaid expenses and other current assets 0.4 (1.2) (1.7)

Customer deposits (8.7) 7.2 1.1

Investing activities:

Purchases of properties and equipment (27.6) (40.6) (30.3)

Net cash used for investing activities (527.9) (78.9) (83.7)

Financing activities:

Increase (decrease) in revolving lines of credit, net 70.0 (76.5) (64.1)

Proceeds from issuance of long-term borrowings 400.0 — —

Payments on long-term borrowings (120.3) (3.9) (0.8)

Payments of debt financing fees (4.4) — —

Purchases of treasury stock (39.7) (6.7) (5.5)

Payments for acquisition-related activity (4.3) — (0.5)

Cash dividends paid to stockholders (34.1) (29.3) (23.8)

Proceeds from stock compensation activity 3.7 2.0 3.9

Net cash provided by (used for) financing activities 244.5 (121.0) (97.9)

(Decrease) increase in cash and cash equivalents (27.4) 30.1 13.5

Cash and cash equivalents at beginning of year 91.1 61.0 47.5

Cash and cash equivalents at end of year $ 63.7 $ 91.1 $ 61.0

See notes to consolidated financial statements.

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FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Total other comprehensive income 2.7 2.7

Cash dividends declared ($0.39 per share) (23.8) (23.8)

Stock-based payments:

Stock-based compensation 12.4 12.4

Stock option exercises and other 0.4 7.0 (6.3) 1.1

Performance share unit transactions 0.1 (0.1) (3.3) (3.3)

Stock repurchase program (5.5) (5.5)

Total other comprehensive loss (7.7) (7.7)

Cash dividends declared ($0.48 per share) (29.3) (29.3)

Stock-based payments:

Stock-based compensation 14.7 14.7

Stock option exercises and other 0.2 4.1 (3.8) 0.5

Performance share unit transactions 0.1 (0.1) (3.6) (3.6)

Stock repurchase program (6.7) (6.7)

Total other comprehensive income 18.0 18.0

Cash dividends declared ($0.56 per share) (34.1) (34.1)

Stock-based payments:

Stock-based compensation 14.1 14.1

Stock option exercises and other 0.2 6.8 (6.7) 0.3

Performance share unit transactions 0.3 (0.3) (9.2) (9.2)

Stock repurchase program (39.8) (39.8)

See notes to consolidated financial statements.

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FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Description of the Business

Federal Signal Corporation was founded in 1901 and was reincorporated as a Delaware corporation in 1969. References herein to the “Company,” “we,” “our,” or “us” refer collectively to Federal Signal Corporation and its subsidiaries.

Products manufactured and services rendered by the Company are divided into two reportable segments: Environmental Solutions Group (“Environmental Solutions”) and Safety and Security Systems Group (“Safety and Security Systems”). The individual operating businesses are organized as such because they share certain characteristics, including technology, marketing, distribution, and product application, which create long-term synergies.

The Company’s fiscal year ends on December 31. All references to 2025, 2024, and 2023 relate to the fiscal year unless otherwise indicated.

Basis of Presentation and Consolidation

The accompanying consolidated financial statements represent the consolidation of Federal Signal Corporation and its subsidiaries and have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”).

Intercompany balances and transactions have been eliminated in consolidation. In addition, certain prior-year amounts have been reclassified to conform to current-year presentation.

New Accounting Standards Adopted in 2025

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topics 740): Improvements to Income Tax Disclosures, which expands the disclosure requirements for income taxes. ASU 2023-09 is effective prospectively for annual periods beginning after December 15, 2024, with early adoption and retrospective application permitted. The Company adopted this ASU prospectively effective for the year ended December 31, 2025, and has included the required disclosures in Note 10 – Income Taxes.

New Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), which requires entities to disclose, on an annual and interim basis, disaggregated information about certain income statement expense line items. ASU 2024-03 is effective prospectively for annual periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption and retrospective adoption permitted. The Company is currently evaluating the impact of adopting this guidance on its financial statement disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient for estimating expected credit losses relating to current accounts receivable and current contract assets that arise from transactions accounted for under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. ASU 2025-05 is effective prospectively for annual periods beginning after December 15, 2025, and for interim periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods. The Company is currently evaluating the impact of adopting ASU 2025-05 on its financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies interim disclosure requirements and applicability of Topic 270. ASU 2025-11 is effective prospectively for interim reporting periods in fiscal years beginning after December 15, 2027, with early adoption and retrospective application permitted. The Company is currently evaluating the impact of adopting this guidance on its financial statement disclosures.

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Non-U.S. Operations

Assets and liabilities of non-U.S. subsidiaries, other than those whose functional currency is the U.S. dollar, are translated at current foreign currency exchange rates with the related translation adjustments reported in stockholders’ equity as a component of Accumulated other comprehensive loss. Accounts within the Consolidated Statements of Operations are translated at the average exchange rate during the period. Non-monetary assets and liabilities are translated at historical exchange rates.

The Company incurs foreign currency transaction gains or losses related to transactions that are denominated in a currency other than the functional currency, which are recognized in the Consolidated Statements of Operations as a component of Other expense, net. The Company realized foreign currency transaction gains of $0.3 million for the year ended December 31, 2025, foreign currency transaction losses of $0.9 million for the year ended December 31, 2024, and foreign currency transaction losses of $0.6 million for the year ended December 31, 2023.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and (iii) the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less, when purchased, to be cash equivalents. The carrying amount of cash and cash equivalents approximates fair value because of the short-term maturity and highly liquid nature of these instruments.

Accounts Receivable

The Company carries accounts receivable at the face amount less an allowance for doubtful accounts for estimated losses as a result of a customer’s inability to make required payments. Management evaluates the aging of the accounts receivable balances, the financial condition of its customers, historical trends, and the time outstanding of specific balances to estimate the amount of accounts receivables that may not be collected in the future and records the appropriate provision.

Inventories

The Company’s inventories are valued at the lower of cost and net realizable value. Cost is determined using the first-in, first-out method. Included in the cost of inventories are raw materials, direct wages, and associated production costs.

Properties and Equipment

Properties and equipment are stated at cost, net of accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets. Useful lives generally range from eight to 40 years for buildings and three to 15 years for machinery and equipment. Leasehold improvements are depreciated over the shorter of the remaining life of the lease or the useful life of the improvement. Depreciation expense is primarily included as a component of Cost of sales on the Consolidated Statements of Operations, with depreciation expense associated with certain assets used for administrative purposes being presented within Selling, engineering, general and administrative (“SEG&A”) expenses. Depreciation expense, which includes depreciation on rental equipment, was $62.1 million in 2025, $50.3 million in 2024, and $45.2 million in 2023.

Properties and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Rental Equipment

The Company enters into lease agreements with customers related to the rental of certain equipment. All of these leasing agreements are classified as operating leases and are for periods generally not to exceed five years. In accounting for these leases, the cost of the equipment purchased or manufactured by the Company is recorded as an asset and is depreciated over its estimated useful life. Rental income is recognized ratably over the term of the underlying leases.

Rental equipment is depreciated to an estimated residual value on a straight-line basis over the estimated useful lives of the assets and is reviewed for potential impairment whenever an event occurs or circumstances change that indicate the carrying

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amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares non-discounted cash flows expected to be generated by that asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on a non-discounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary.

Rental equipment includes certain equipment that is manufactured by the Company and subsequently transferred to the rental fleet, as well as equipment purchased from third-party manufacturers, for the purpose of renting to end-customers. The related cash flow activity associated with these transactions is reflected within operating activities on the Consolidated Statements of Cash Flows.

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.

In testing the goodwill of its reporting units for potential impairment, the Company applies either a qualitative or quantitative test, in accordance with ASC 350, Intangibles – Goodwill and Other.

A qualitative approach may be applied when the Company concludes that it is not “more likely than not” that the fair value of a reporting unit is less than its carrying value. In this situation, the Company would not be required to perform the quantitative impairment test described below.

A quantitative approach is performed by comparing the fair value of a reporting unit with its carrying amount. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired, and no impairment charge is required. If the carrying amount of a reporting unit exceeds its fair value, this difference is recorded as an impairment charge not to exceed the carrying amount of goodwill. The Company generally determines the fair value of its reporting units using both the income and market approaches.

Under the income approach, the key assumptions include projected sales, earnings before interest, income taxes, depreciation, and amortization (“EBITDA”), and the discount rate. Under the market approach, the Company estimates fair value using marketplace fair value data from within a comparable industry grouping. The results of these two methods are weighted based upon management’s evaluation of the relevance of the two approaches.

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. One measure of the sensitivity of assumptions used in the impairment 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% and, therefore, no impairment was recognized.

The Company had no goodwill impairments in 2025, 2024, or 2023. See Note 8 – Goodwill and Other Intangible Assets for a summary of the Company’s goodwill by segment.

Intangible Assets

Definite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives and are tested for impairment if indicators exist in a manner similar to that described above for Rental Equipment.

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. 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. A qualitative approach may be applied when the Company concludes that it is not “more likely than not” that the fair value of the indefinite-lived intangible assets is less than their carrying value. A quantitative impairment test consists of comparing the fair value of the indefinite-lived intangible asset with its carrying amount. An impairment loss would be recognized for the carrying amount in excess of its fair value.

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In 2025, the Company performed a combination of qualitative and quantitative impairment tests over its indefinite-lived intangible assets. The fair value of the indefinite-lived intangible asset that was quantitatively tested for impairment exceeded its carrying value by approximately 45%, and, therefore, no impairment was recognized. 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. See Note 8 – Goodwill and Other Intangible Assets for a summary of the Company’s intangible assets.

Warranties

Warranties are classified as either assurance-type or service-type warranties. A warranty is considered an assurance-type warranty if it provides the customer with assurance that the product will function as intended. A warranty that goes above and beyond ensuring basic functionality is considered a service-type warranty. The Company offers certain limited warranties that are assurance-type warranties and extended service arrangements that are service-type warranties. Assurance-type warranties are not accounted for as separate performance obligations under the revenue model. If a service-type warranty is sold with a product or separately, revenue is recognized over the life of the warranty.

Sales of many of the Company’s products include assurance-type warranties based on terms that are generally accepted in the Company’s marketplaces. The Company records provisions for estimated warranty costs, which are included within Cost of sales, at the time of sale based on historical experience. The Company periodically adjusts these provisions to reflect actual experience. Infrequently, a material warranty issue can arise that is beyond the scope of the Company’s historical experience. The Company records costs related to these issues as they become probable and estimable.

The Company also sells optional service-type warranty contracts that extend coverage beyond the initial term of the express warranty period. At the time of sale, revenue related to the service-type warranty contract is deferred and typically recognized as revenue on a straight-line basis over the life of the contract. Deferred revenue associated with service-type warranty contracts was $5.0 million as of December 31, 2025, and $4.8 million as of December 31, 2024, and was included within Other current liabilities and Other long-term liabilities on the Consolidated Balance Sheets. Costs under service-type warranty contracts are expensed as incurred.

Workers’ Compensation and Product Liability Reserves

Due to the nature of the Company’s manufacturing and products, the Company is subject to claims for workers’ compensation and product liability in the normal course of business. The Company is self-funded for a portion of these claims. The Company establishes a reserve using a third-party actuary for any known outstanding matters, including a reserve for claims incurred but not yet reported. The amount and timing of cash payments relating to these claims are considered to be reliably determinable given the nature of the claims and historical claim volumes to support the actuarial assumptions and judgments used to derive the expected loss payment patterns. As such, the reserves recorded are discounted using a risk-free rate that matches the average duration of the claims.

The Company has not established a reserve for potential losses resulting from the firefighter hearing loss litigation, with the exception of certain estimated losses that have been recognized related to settlement discussions (see Note 13 – Legal Proceedings). If the Company is not successful in its defense after exhausting all appellate options, it would record a charge for such claims, to the extent they exceed insurance recoveries, when the related losses become probable and estimable.

Pensions

The Company sponsors domestic and foreign defined benefit pension plans. Key assumptions used in the accounting for these employee benefit plans include the discount rate, expected long-term rate of return on plan assets, and estimates of future mortality of plan participants.

The weighted-average discount rate used to measure pension liabilities and costs is selected using a hypothetical portfolio of high-quality bonds that would provide the necessary cash flow to match the projected benefit payments of the plans. The discount rate represents the rate at which our benefit obligations could effectively be settled as of the year-end measurement date. The weighted-average discount rate used to measure pension liabilities decreased from 2024 to 2025. See Note 11 – Pension and Other Post-Employment Plans for further discussion.

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The expected long-term rate of return on plan assets is based on historical and expected returns for the asset classes in which the plans are invested. The Company references published mortality tables and scales in determining its estimate of future mortality.

Revenue Recognition

See Note 3 – Revenue Recognition for discussion regarding the Company’s revenue recognition accounting policies.

Product Shipping Costs

Product shipping costs are expensed as incurred and are included within Cost of sales in the Consolidated Statements of Operations.

Research and Development

The Company invests in research to support development of new products and the enhancement of existing products and services. Expenditures for research and development by the Company were $13.4 million in 2025, $12.4 million in 2024, and $12.4 million in 2023, and are included within SEG&A expenses in the Consolidated Statements of Operations.

Stock-Based Compensation Plans

The Company has various stock-based compensation plans, described more fully in Note 15 – Stock-Based Compensation. Stock-based compensation expense is recorded net of estimated forfeitures in the Company’s Consolidated Statements of Operations. The Company estimates the forfeiture rate based on historical forfeitures of equity awards and adjusts the rate to reflect changes in facts and circumstances, if any. The Company revises its estimated forfeiture rate if actual forfeitures differ from its initial estimates.

Income Taxes

The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax benefit carryforwards. Deferred tax assets and liabilities at the end of each period are determined using enacted tax rates expected to apply to taxable income in the period in which the deferred tax liability or asset is expected to be settled or realized. A valuation allowance is established or maintained when, based on currently available information and other factors, it is more likely than not that all or a portion of a deferred tax asset will not be realized.

The Company files a consolidated U.S. federal income tax return for Federal Signal Corporation and its eligible domestic subsidiaries. The Company’s non-U.S. subsidiaries file income tax returns in their respective local jurisdictions. The Company accounts for taxes on Global Intangible Low-Taxed Income (“GILTI”) as a period expense in the year in which it is incurred.

Accounting standards on accounting for uncertainty in income taxes address the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. Under the guidance on accounting for uncertainty in income taxes, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company presents interest and penalties related to income tax matters as a component of Income tax expense on the Consolidated Statements of Operations.

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Litigation Contingencies

The Company is subject to various claims, including pending and possible legal actions for product liability and other damages, and other matters arising in the ordinary course of the Company’s business. The Company believes, based on current knowledge and after consultation with counsel, that the outcome of such claims and actions in the aggregate will not have an adverse effect on the Company’s financial position, results of operations, or cash flows. However, in the event of unexpected future developments, it is possible that the ultimate resolution of such matters, if unfavorable, could have a material adverse effect on the Company’s results of operations. Professional legal fees are expensed when incurred. The Company accrues for contingent losses when such losses are probable and reasonably estimable. In the event that estimates or assumptions of contingent losses are different from actual results, adjustments are made in subsequent periods to reflect more current information.

NOTE 2 – ACQUISITIONS

The Company’s acquisitions are accounted for in accordance with ASC 805, Business Combinations. The acquisitions completed in the periods presented, as described in further detail within, were accounted for as business combinations in accordance with ASC 805. In accordance with this guidance, the fair value of consideration transferred is allocated to assets acquired and liabilities assumed based on their estimated fair values as of the completion of the acquisition, with the remaining amount recognized as goodwill. A single estimate of fair value results from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions. The Company’s judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact the Company’s results of operations.

Under ASC 805-10, acquisition-related costs (e.g., advisory, legal, valuation and other professional fees) are not included as a component of consideration transferred, but are accounted for as expenses in the periods in which the costs are incurred. Acquisition-related costs are included as a component of Acquisition and integration-related expenses, net on the Consolidated Statements of Operations.

Acquisitions Completed in 2025

Acquisition of New Way

On November 25, 2025, the Company completed the acquisition of all of the outstanding equity interests of Scranton Manufacturing Company LLC d/b/a New Way Trucks (“New Way”). New Way is a leading U.S.-based designer and manufacturer of refuse collection vehicles. The Company expects the acquisition of New Way will strengthen its position as an industry-leading, diversified industrial manufacturer of specialty vehicles by expanding its product offerings, market presence, and aftermarket platform.

As the acquisition closed on November 25, 2025, the assets and liabilities of New Way have been consolidated into the Company’s Consolidated Balance Sheet as of December 31, 2025, while the post-acquisition results of operations have been included in the Consolidated Statement of Operations, within the Environmental Solutions Group. During the year ended December 31, 2025, the acquisition generated net sales of $21.2 million and operating income of $1.4 million, inclusive of purchase accounting effects.

The initial cash consideration paid by the Company to acquire New Way was approximately $413 million, inclusive of certain preliminary closing adjustments. Any additional closing adjustments are expected to be finalized before the end of the second quarter of 2026. In addition, there is a contingent earn-out opportunity of up to $54.0 million, based on the achievement of certain specified financial targets over a two-year period.

As of December 31, 2025, the Company’s purchase price allocation reflects various provisional estimates that were based on the information that was available as of the acquisition date and the filing date of this Form 10-K. The Company believes that information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed; however, the determination of those fair values, including the third-party valuation of acquired intangible assets, is not yet finalized. Thus, the preliminary measurements of fair value set forth in the table below are subject to change during the measurement period as valuations are finalized. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable, but not more than one year from the acquisition date.

The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the acquisition date:

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(in millions)

Purchase price, inclusive of preliminary closing adjustments (a) $ 413.5

Estimated fair value of additional consideration (b) 10.7

Total consideration 424.2

Accounts receivable 60.2

Inventories 89.3

Prepaid expenses and other current assets 0.6

Properties and equipment 31.9

Finance lease right-of-use assets (c) 3.9

Operating lease right-of-use assets 0.1

Customer relationships (d) 111.0

Trade names (e) 50.5

Accounts payable (10.6)

Accrued liabilities (9.0)

Customer deposits (15.7)

Operating lease liabilities (0.1)

Finance lease liabilities (c) (1.8)

Net assets acquired 319.7

(a) The initial purchase price, which is subject to certain post-closing adjustments, including working capital, was funded through existing cash on hand and borrowings under the Company’s credit agreement.

(b) Represents the preliminary estimate of fair value assigned to the contingent earn-out payment as of the acquisition date, which is included in Other long-term liabilities on the Consolidated Balance Sheet as of December 31, 2025. See Note 18 – Fair Value Measurements for discussion of the methodology used to determine the fair value of the contingent earn-out payment.

(c) Represents the preliminary fair value assigned to acquired finance lease right-of-use assets and finance lease liabilities. The preliminary weighted-average discount rate was considered to be 4.8% and the preliminary weighted-average remaining lease term was considered to be 9.3 years.

(d) Represents the preliminary fair value assigned to customer relationships, which are considered to be definite-lived intangible assets, with a preliminary estimated useful life of approximately 15 years.

(e) Represents the preliminary fair value assigned to trade names, which are considered to be indefinite-lived intangible assets.

(f) Goodwill, which is tax-deductible, has been allocated to the Environmental Solutions Group on the basis that the synergies identified will primarily benefit this segment.

The acquisition was not, and would not have been, material to the Company’s net sales, results of operations, or total assets during any period presented. Accordingly, the Company’s consolidated results from operations do not differ materially from historical performance as a result of the acquisition, and therefore, unaudited pro-forma results are not presented.

Acquisition of Waterblasting LLC

On February 12, 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. (collectively, “Hog”). Hog is a leading U.S. manufacturer of truck-mounted road-marking, line-removal, and waterblasting equipment, serving infrastructure, municipal, and airport markets. The Company expects the acquisition of Hog will strengthen its position as an industry-leading, diversified industrial manufacturer of specialty vehicles by expanding its product offerings, market presence, and aftermarket platform.

As the acquisition closed on February 12, 2025, the assets and liabilities of Hog have been consolidated into the Company’s Consolidated Balance Sheet as of December 31, 2025, while the post-acquisition results of operations have been included in the Consolidated Statement of Operations, within the Environmental Solutions Group. The acquisition generated net sales of $65.6 million and operating income of $9.5 million during the year ended December 31, 2025.

The cash consideration paid by the Company to acquire Hog was approximately $82.5 million, inclusive of certain closing adjustments. In addition, there is a contingent earn-out payment of up to $15.0 million, which is expected to be earned in full

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based on the achievement of certain financial targets during 2025. The contingent earn-out payment is expected to be made during the first half of 2026.

As of December 31, 2025, the Company’s purchase price allocation reflects various provisional estimates that were based on the information that was available as of the acquisition date and the filing date of this Form 10-K. The Company believes that information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed; however, the determination of those fair values, including the third-party valuation of acquired intangible assets, is not yet finalized. Thus, the preliminary measurements of fair value set forth in the table below are subject to change during the measurement period as valuations are finalized. The Company expects to finalize the valuation and complete the purchase price allocation during the first quarter of 2026.

The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the acquisition date:

(in millions)

Purchase price, inclusive of closing adjustments (a) $ 82.5

Estimated fair value of additional consideration (b) 11.5

Settlement of pre-existing contractual relationship (c) 0.9

Total consideration 94.9

Accounts receivable 7.0

Inventories 9.9

Prepaid expenses and other current assets 1.0

Properties and equipment 18.3

Customer relationships (d) 23.7

Trade names (e) 12.4

Other intangible assets 3.0

Accounts payable (3.8)

Accrued liabilities (1.2)

Customer deposits (5.4)

Net assets acquired 64.9

Goodwill (f) $ 30.0

(a) The purchase price was funded through existing cash on hand and borrowings under the Company’s credit agreement. The purchase price includes an amount of $10.0 million, which was paid by the Company at closing and placed into an escrow account. Based on Hog’s financial results for the year ended December 31, 2025, the amount placed in escrow is expected to be released to the former owner of Hog during the first half of 2026. The Company assigned a fair value to this contingent consideration of $10.0 million as of the acquisition date.

(b) Represents the estimate of fair value assigned to the contingent earn-out payment as of the acquisition date. During the year ended December 31, 2025, the Company increased the Hog contingent earn-out liability to $15.0 million, which is included as a current liability in Contingent consideration on the Consolidated Balance Sheet as of December 31, 2025. See Note 18 – Fair Value Measurements for discussion of the methodology used to determine the fair value of the contingent earn-out payment.

(c) Represents the non-cash settlement of accounts receivable due from Hog to the Company as of the acquisition date. Corresponding amount payable by Hog to the Company is not included in accounts payable assumed in the table above, and the amount was settled at fair value with no impact on the Consolidated Statement of Operations.

(d) Represents the preliminary fair value assigned to customer relationships, which are considered to be definite-lived intangible assets, with a preliminary estimated useful life of approximately 12 years.

(e) Represents the preliminary fair value assigned to trade names, which are considered to be indefinite-lived intangible assets.

(f) Goodwill, which is tax-deductible, has been allocated to the Environmental Solutions Group on the basis that the synergies identified will primarily benefit this segment.

The acquisition was not, and would not have been, material to the Company’s net sales, results of operations, or total assets during any period presented. Accordingly, the Company’s consolidated results from operations do not differ materially from historical performance as a result of the acquisition, and therefore, unaudited pro-forma results are not presented.

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Acquisition of Kinloch Equipment & Supply, Inc.

On December 4, 2025, the Company acquired certain assets and operations of Kinloch Equipment & Supply, Inc. (“Kinloch”), a distributor of maintenance and infrastructure equipment in Texas, for cash consideration of $14.9 million. As the acquisition closed on December 4, 2025, the assets and liabilities of Kinloch have been consolidated into the Company’s Consolidated Balance Sheet as of December 31, 2025, and the post-acquisition results of operations have been included in the Consolidated Statements of Operations, within the Environmental Solutions Group.

The assets acquired and liabilities assumed in the Kinloch acquisition have been measured at their estimated fair values as of the acquisition date, resulting in approximately $2.5 million of goodwill, which is deductible for tax purposes. Due to the timing of the acquisition, these amounts are preliminary and are subject to change within the measurement period as the Company finalizes its fair value estimates. The acquisition was not, and would not have been, material to the Company’s net sales, results of operations or total assets during any period presented. Accordingly, the Company’s consolidated results from operations do not differ materially from historical performance as a result of the acquisition, and therefore, pro-forma results are not presented.

Acquisitions Completed in 2024

Acquisition of Standard Equipment

On October 4, 2024, the Company completed the acquisition of substantially all the assets and operations of Standard Equipment Company (“Standard”). Standard is a leading distributor of specialty maintenance and infrastructure equipment for municipal and industrial markets in parts of Illinois and Indiana.

The initial cash consideration paid by the Company to acquire Standard was approximately $39.6 million, inclusive of certain closing adjustments. In addition, there is a contingent earn-out payment of up to $4.8 million that is based on the achievement of certain financial targets over a specified performance period.

During the year ended December 31, 2025, the Company finalized the Standard purchase price allocation and recognized certain measurement period adjustments, which did not have material impact on the carrying value of Goodwill previously recognized as of December 31, 2024 or on the Company’s Consolidated Statements of Operations for the year ended December 31, 2025.

The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:

(in millions of dollars)

Purchase price, inclusive of closing adjustments (a) $ 39.6

Estimated fair value of additional consideration (b) 0.6

Total consideration 40.2

Accounts receivable 4.0

Inventories 9.0

Prepaid expenses and other current assets 0.1

Rental equipment 11.3

Properties and equipment 0.6

Operating lease right-of-use assets 2.7

Customer relationships (c) 4.4

Trade names (d) 3.1

Other intangible assets 0.3

Accounts payable (0.7)

Accrued liabilities (0.6)

Customer deposits (0.9)

Operating lease liabilities (2.7)

Net assets acquired 30.6

Goodwill (e) $ 9.6

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(a) The purchase price was funded through existing cash on hand.

(b) Represents the estimate of the fair value of the contingent earn-out payment as of the acquisition date. During the year ended December 31, 2025, the Company increased the Standard contingent earn-out liability to $3.9 million, which is included in Other long-term liabilities on the Consolidated Balance Sheets. See Note 18 – Fair Value Measurements for discussion of the methodology used to determine the fair value of the contingent earn-out payment.

(c) Represents the fair value assigned to customer relationships, which are considered to be definite-lived intangible assets, with an estimated useful life of approximately 9 years.