10-Q 1 fss-20230930.htm 10-Q fss-20230930
000027750912/312023Q3FALSEP5YP1Y00002775092023-01-012023-09-3000002775092023-10-31xbrli:shares00002775092023-07-012023-09-30iso4217:USD00002775092022-07-012022-09-3000002775092022-01-012022-09-30iso4217:USDxbrli:shares0000277509us-gaap:RetainedEarningsMember2023-01-012023-09-3000002775092023-09-3000002775092022-12-3100002775092021-12-3100002775092022-09-300000277509us-gaap:CommonStockMember2023-06-300000277509us-gaap:AdditionalPaidInCapitalMember2023-06-300000277509us-gaap:RetainedEarningsMember2023-06-300000277509us-gaap:TreasuryStockCommonMember2023-06-300000277509us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-3000002775092023-06-300000277509us-gaap:RetainedEarningsMember2023-07-012023-09-300000277509us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300000277509us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300000277509us-gaap:CommonStockMember2023-07-012023-09-300000277509us-gaap:TreasuryStockCommonMember2023-07-012023-09-300000277509us-gaap:CommonStockMember2023-09-300000277509us-gaap:AdditionalPaidInCapitalMember2023-09-300000277509us-gaap:RetainedEarningsMember2023-09-300000277509us-gaap:TreasuryStockCommonMember2023-09-300000277509us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-300000277509us-gaap:CommonStockMember2022-06-300000277509us-gaap:AdditionalPaidInCapitalMember2022-06-300000277509us-gaap:RetainedEarningsMember2022-06-300000277509us-gaap:TreasuryStockCommonMember2022-06-300000277509us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-3000002775092022-06-300000277509us-gaap:RetainedEarningsMember2022-07-012022-09-300000277509us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300000277509us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300000277509us-gaap:CommonStockMember2022-07-012022-09-300000277509us-gaap:TreasuryStockCommonMember2022-07-012022-09-300000277509us-gaap:CommonStockMember2022-09-300000277509us-gaap:AdditionalPaidInCapitalMember2022-09-300000277509us-gaap:RetainedEarningsMember2022-09-300000277509us-gaap:TreasuryStockCommonMember2022-09-300000277509us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300000277509us-gaap:CommonStockMember2022-12-310000277509us-gaap:AdditionalPaidInCapitalMember2022-12-310000277509us-gaap:RetainedEarningsMember2022-12-310000277509us-gaap:TreasuryStockCommonMember2022-12-310000277509us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310000277509us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-09-300000277509us-gaap:AdditionalPaidInCapitalMember2023-01-012023-09-300000277509us-gaap:CommonStockMember2023-01-012023-09-300000277509us-gaap:TreasuryStockCommonMember2023-01-012023-09-300000277509us-gaap:CommonStockMember2021-12-310000277509us-gaap:AdditionalPaidInCapitalMember2021-12-310000277509us-gaap:RetainedEarningsMember2021-12-310000277509us-gaap:TreasuryStockCommonMember2021-12-310000277509us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310000277509us-gaap:RetainedEarningsMember2022-01-012022-09-300000277509us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-300000277509us-gaap:AdditionalPaidInCapitalMember2022-01-012022-09-300000277509us-gaap:CommonStockMember2022-01-012022-09-300000277509us-gaap:TreasuryStockCommonMember2022-01-012022-09-30fss:Segment0000277509fss:TracklessMember2023-04-032023-04-03iso4217:CAD0000277509fss:TracklessMember2023-08-250000277509fss:TracklessMember2023-04-030000277509fss:TracklessMember2023-01-012023-09-300000277509us-gaap:CustomerRelationshipsMemberfss:TracklessMember2023-04-030000277509fss:TracklessMember2023-07-012023-09-300000277509fss:BlastersMember2023-01-032023-01-030000277509fss:BlastersMemberus-gaap:SubsequentEventMember2023-10-100000277509fss:BlastersMember2023-01-030000277509fss:BlastersMember2023-01-012023-09-300000277509us-gaap:CustomerRelationshipsMemberfss:BlastersMember2023-01-030000277509fss:BlastersMember2023-07-012023-09-300000277509fss:TowHaulCorporationMember2022-10-032022-10-030000277509fss:TowHaulCorporationMember2023-07-012023-09-300000277509fss:TowHaulCorporationMember2022-12-310000277509fss:TowHaulCorporationMember2023-01-012023-09-300000277509fss:TowHaulCorporationMember2022-10-030000277509us-gaap:CustomerRelationshipsMemberfss:TowHaulCorporationMember2022-10-030000277509country:US2023-07-012023-09-300000277509country:US2022-07-012022-09-300000277509country:US2023-01-012023-09-300000277509country:US2022-01-012022-09-300000277509country:CA2023-07-012023-09-300000277509country:CA2022-07-012022-09-300000277509country:CA2023-01-012023-09-300000277509country:CA2022-01-012022-09-300000277509fss:EuropeOtherMember2023-07-012023-09-300000277509fss:EuropeOtherMember2022-07-012022-09-300000277509fss:EuropeOtherMember2023-01-012023-09-300000277509fss:EuropeOtherMember2022-01-012022-09-300000277509fss:EnvironmentalSolutionsMemberfss:VehiclesandequipmentMember2023-07-012023-09-300000277509fss:EnvironmentalSolutionsMemberfss:VehiclesandequipmentMember2022-07-012022-09-300000277509fss:EnvironmentalSolutionsMemberfss:VehiclesandequipmentMember2023-01-012023-09-300000277509fss:EnvironmentalSolutionsMemberfss:VehiclesandequipmentMember2022-01-012022-09-300000277509fss:EnvironmentalSolutionsMemberfss:PartsMember2023-07-012023-09-300000277509fss:EnvironmentalSolutionsMemberfss:PartsMember2022-07-012022-09-300000277509fss:EnvironmentalSolutionsMemberfss:PartsMember2023-01-012023-09-300000277509fss:EnvironmentalSolutionsMemberfss:PartsMember2022-01-012022-09-300000277509fss:RentalincomeMemberfss:EnvironmentalSolutionsMember2023-07-012023-09-300000277509fss:RentalincomeMemberfss:EnvironmentalSolutionsMember2022-07-012022-09-300000277509fss:RentalincomeMemberfss:EnvironmentalSolutionsMember2023-01-012023-09-300000277509fss:RentalincomeMemberfss:EnvironmentalSolutionsMember2022-01-012022-09-300000277509fss:OtherMemberfss:EnvironmentalSolutionsMember2023-07-012023-09-300000277509fss:OtherMemberfss:EnvironmentalSolutionsMember2022-07-012022-09-300000277509fss:OtherMemberfss:EnvironmentalSolutionsMember2023-01-012023-09-300000277509fss:OtherMemberfss:EnvironmentalSolutionsMember2022-01-012022-09-300000277509fss:EnvironmentalSolutionsMember2023-07-012023-09-300000277509fss:EnvironmentalSolutionsMember2022-07-012022-09-300000277509fss:EnvironmentalSolutionsMember2023-01-012023-09-300000277509fss:EnvironmentalSolutionsMember2022-01-012022-09-300000277509fss:SafetyAndSecuritySystemsMemberfss:PublicsafetyandsecurityequipmentMember2023-07-012023-09-300000277509fss:SafetyAndSecuritySystemsMemberfss:PublicsafetyandsecurityequipmentMember2022-07-012022-09-300000277509fss:SafetyAndSecuritySystemsMemberfss:PublicsafetyandsecurityequipmentMember2023-01-012023-09-300000277509fss:SafetyAndSecuritySystemsMemberfss:PublicsafetyandsecurityequipmentMember2022-01-012022-09-300000277509fss:SafetyAndSecuritySystemsMemberfss:IndustrialsignalingequipmentMember2023-07-012023-09-300000277509fss:SafetyAndSecuritySystemsMemberfss:IndustrialsignalingequipmentMember2022-07-012022-09-300000277509fss:SafetyAndSecuritySystemsMemberfss:IndustrialsignalingequipmentMember2023-01-012023-09-300000277509fss:SafetyAndSecuritySystemsMemberfss:IndustrialsignalingequipmentMember2022-01-012022-09-300000277509fss:SafetyAndSecuritySystemsMemberfss:WarningsystemsMember2023-07-012023-09-300000277509fss:SafetyAndSecuritySystemsMemberfss:WarningsystemsMember2022-07-012022-09-300000277509fss:SafetyAndSecuritySystemsMemberfss:WarningsystemsMember2023-01-012023-09-300000277509fss:SafetyAndSecuritySystemsMemberfss:WarningsystemsMember2022-01-012022-09-300000277509fss:SafetyAndSecuritySystemsMember2023-07-012023-09-300000277509fss:SafetyAndSecuritySystemsMember2022-07-012022-09-300000277509fss:SafetyAndSecuritySystemsMember2023-01-012023-09-300000277509fss:SafetyAndSecuritySystemsMember2022-01-012022-09-300000277509us-gaap:LineOfCreditMemberfss:A2022CreditAgreementMember2022-10-210000277509us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMemberfss:A2022CreditAgreementMember2022-10-210000277509us-gaap:LineOfCreditMemberus-gaap:SecuredDebtMemberfss:A2022CreditAgreementMember2022-10-210000277509us-gaap:LineOfCreditMembersrt:MinimumMemberfss:A2022CreditAgreementMemberus-gaap:BaseRateMember2022-10-212022-10-21xbrli:pure0000277509us-gaap:LineOfCreditMembersrt:MaximumMemberfss:A2022CreditAgreementMemberus-gaap:BaseRateMember2022-10-212022-10-210000277509us-gaap:LineOfCreditMembersrt:MinimumMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberfss:A2022CreditAgreementMember2022-10-212022-10-210000277509us-gaap:LineOfCreditMembersrt:MaximumMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberfss:A2022CreditAgreementMember2022-10-212022-10-210000277509us-gaap:LineOfCreditMembersrt:MinimumMemberfss:A2022CreditAgreementMember2022-10-212022-10-210000277509us-gaap:LineOfCreditMembersrt:MaximumMemberfss:A2022CreditAgreementMember2022-10-212022-10-210000277509us-gaap:RevolvingCreditFacilityMemberfss:A2022CreditAgreementMember2023-09-300000277509us-gaap:LetterOfCreditMemberfss:A2022CreditAgreementMember2023-09-300000277509us-gaap:RevolvingCreditFacilityMemberfss:A2022CreditAgreementMember2022-12-310000277509us-gaap:LetterOfCreditMemberfss:A2022CreditAgreementMember2022-12-310000277509fss:InterestRateSwap2022Member2023-09-300000277509fss:InterestRateSwap2023Member2023-07-110000277509us-gaap:InterestRateSwapMember2023-07-012023-09-300000277509us-gaap:InterestRateSwapMember2023-01-012023-09-300000277509us-gaap:InterestRateSwapMember2022-07-012022-09-300000277509us-gaap:InterestRateSwapMember2022-01-012022-09-300000277509us-gaap:InterestRateSwapMember2022-10-022022-10-020000277509us-gaap:InterestRateSwapMember2023-09-302023-09-300000277509us-gaap:InterestRateSwapMember2022-12-312022-12-310000277509fss:EnvironmentalSolutionsMember2022-12-310000277509fss:SafetyAndSecuritySystemsMember2022-12-310000277509fss:EnvironmentalSolutionsMember2023-09-300000277509fss:SafetyAndSecuritySystemsMember2023-09-300000277509us-gaap:CustomerRelationshipsMember2023-09-300000277509us-gaap:CustomerRelationshipsMember2022-12-310000277509us-gaap:OtherIntangibleAssetsMember2023-09-300000277509us-gaap:OtherIntangibleAssetsMember2022-12-310000277509us-gaap:TradeNamesMember2023-09-300000277509us-gaap:TradeNamesMember2022-12-310000277509us-gaap:DistributionRightsMember2023-09-300000277509us-gaap:DistributionRightsMember2022-12-310000277509country:US2023-07-012023-09-300000277509country:US2022-07-012022-09-300000277509country:US2023-01-012023-09-300000277509country:US2022-01-012022-09-300000277509us-gaap:ForeignPlanMember2023-07-012023-09-300000277509us-gaap:ForeignPlanMember2022-07-012022-09-300000277509us-gaap:ForeignPlanMember2023-01-012023-09-300000277509us-gaap:ForeignPlanMember2022-01-012022-09-300000277509us-gaap:PropertyLeaseGuaranteeMember2023-09-300000277509us-gaap:PropertyLeaseGuaranteeMembersrt:AffiliatedEntityMember2023-09-300000277509srt:MinimumMember2023-01-012023-09-300000277509srt:MaximumMember2023-01-012023-09-300000277509fss:CircuitCourtOfCookCountyMember1999-01-012013-12-31fss:casefss:plaintiff0000277509fss:CircuitCourtOfCookCountyMember2008-01-012008-12-31fss:Plaintiff0000277509fss:ChicagoFirefighterPlaintiffsMemberfss:CircuitCourtOfCookCountyMember2009-01-012009-12-310000277509fss:ChicagoFirefighterPlaintiffsMember2011-11-012011-11-300000277509fss:ChicagoFirefighterPlaintiffsMember2012-12-012012-12-3100002775092012-11-302012-11-300000277509fss:SettlementCandidatesDomain2021-12-202021-12-200000277509fss:OutsideChicagoFirefighterPlaintiffsMemberfss:CookCountyandDupageCountyMember2021-12-202021-12-200000277509fss:ChicagoFirefighterPlaintiffsMember2017-02-242017-02-240000277509fss:SettlementCandidatesDomain2017-01-012017-12-310000277509fss:ChicagoFirefighterPlaintiffsMemberfss:CircuitCourtOfCookCountyMember2017-01-012017-12-310000277509fss:ResponsiveSettlementCandidatesDomain2017-01-012017-12-310000277509fss:CourtOfCommonPleasPhiladelphiaCountyMemberfss:PhiladelphiaFirefighterPlaintiffsMember2007-01-012009-12-310000277509fss:CourtOfCommonPleasPhiladelphiaCountyMember2007-01-012009-12-310000277509fss:CourtOfCommonPleasPhiladelphiaCountyMember2010-01-012010-12-310000277509fss:CourtOfCommonPleasPhiladelphiaCountyMemberfss:PhiladelphiaFirefighterPlaintiffsMember2010-01-012010-12-310000277509fss:CourtOfCommonPleasPhiladelphiaCountyMember2011-01-040000277509fss:SettlementAgreementMember2011-04-292011-04-290000277509fss:SettlementAgreementMember2011-04-222011-04-220000277509fss:CourtOfCommonPleasPhiladelphiaCountyMemberfss:PhiladelphiaFirefighterPlaintiffsMember2012-04-012012-10-31fss:Case0000277509fss:CourtOfCommonPleasPhiladelphiaCountyMemberfss:PhiladelphiaFirefighterPlaintiffsMember2014-12-012014-12-310000277509fss:CourtOfCommonPleasPhiladelphiaCountyMemberfss:PhiladelphiaFirefighterPlaintiffsMember2015-01-012015-01-310000277509fss:DistrictofColumbiaFirefighterPlaintiffsMemberfss:FederalCourtEasternDistrictofPennsylvaniaMember2015-01-012015-01-3100002775092017-04-252017-04-250000277509fss:CourtOfCommonPleasPhiladelphiaCountyMemberfss:PhiladelphiaFirefighterPlaintiffsMember2015-08-012015-12-310000277509fss:DistrictofColumbiaFirefighterPlaintiffsMemberfss:FederalCourtEasternDistrictofPennsylvaniaMember2015-08-012015-12-310000277509fss:CourtOfCommonPleasPhiladelphiaCountyMemberfss:PhiladelphiaFirefighterPlaintiffsMember2017-01-012017-12-310000277509fss:CourtOfCommonPleasPhiladelphiaCountyMemberfss:PhiladelphiaFirefighterPlaintiffsMember2017-11-012017-11-300000277509fss:CourtOfCommonPleasPhiladelphiaCountyMemberfss:ErieCountyFirefighterPlaintiffsMember2014-03-012014-03-310000277509fss:BuffaloFirefighterPlaintiffsMemberfss:SupremeCourtofStateofNewYorkErieCountyMember2014-09-172014-09-170000277509fss:SuperiorCourtofNewJerseyUnionCountyMemberfss:NewJerseyFirefighterPlaintiffsMemberDomain2015-11-012015-11-300000277509fss:MassachusettsFirefighterPlaintiffsMember2016-05-012016-10-310000277509fss:FloridaFirefightersPlaintiffsMember2016-05-012016-10-310000277509fss:PittsburghFirefighterPlaintiffsMemberfss:AlleghenyCountyPennsylvaniaMember2013-04-012013-07-310000277509fss:PittsburghFirefighterPlaintiffsMemberfss:AlleghenyCountyPennsylvaniaMember2016-05-012016-05-310000277509fss:LackawannaCountyPennsylvaniaMemberfss:LackawannaFirefighterPlaintiffsMember2017-08-012017-08-310000277509fss:NewYorkCityFirefighterPlaintiffsMemberfss:LackawannaCountyPennsylvaniaMember2017-08-012017-08-3100002775092018-03-012018-03-310000277509us-gaap:EmployeeStockOptionMember2023-07-012023-09-300000277509us-gaap:EmployeeStockOptionMember2023-01-012023-09-300000277509us-gaap:EmployeeStockOptionMember2022-01-012022-09-300000277509us-gaap:EmployeeStockOptionMember2022-07-012022-09-3000002775092023-01-012023-03-3100002775092023-04-012023-06-300000277509us-gaap:SubsequentEventMember2023-10-012023-12-310000277509fss:March2020RepurchaseProgramMember2020-03-130000277509us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-06-300000277509us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2023-06-300000277509us-gaap:AccumulatedTranslationAdjustmentMember2023-06-300000277509us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2023-06-300000277509us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-07-012023-09-300000277509us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2023-07-012023-09-300000277509us-gaap:AccumulatedTranslationAdjustmentMember2023-07-012023-09-300000277509us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2023-07-012023-09-300000277509us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-09-300000277509us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2023-09-300000277509us-gaap:AccumulatedTranslationAdjustmentMember2023-09-300000277509us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2023-09-300000277509us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-06-300000277509us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2022-06-300000277509us-gaap:AccumulatedTranslationAdjustmentMember2022-06-300000277509us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2022-06-300000277509us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-07-012022-09-300000277509us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2022-07-012022-09-300000277509us-gaap:AccumulatedTranslationAdjustmentMember2022-07-012022-09-300000277509us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2022-07-012022-09-300000277509us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-09-300000277509us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2022-09-300000277509us-gaap:AccumulatedTranslationAdjustmentMember2022-09-300000277509us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2022-09-300000277509us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-12-310000277509us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2022-12-310000277509us-gaap:AccumulatedTranslationAdjustmentMember2022-12-310000277509us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2022-12-310000277509us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-01-012023-09-300000277509us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2023-01-012023-09-300000277509us-gaap:AccumulatedTranslationAdjustmentMember2023-01-012023-09-300000277509us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2023-01-012023-09-300000277509us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-12-310000277509us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2021-12-310000277509us-gaap:AccumulatedTranslationAdjustmentMember2021-12-310000277509us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2021-12-310000277509us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-01-012022-09-300000277509us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2022-01-012022-09-300000277509us-gaap:AccumulatedTranslationAdjustmentMember2022-01-012022-09-300000277509us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember2022-01-012022-09-300000277509us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300000277509us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300000277509us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2023-01-012023-09-300000277509us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-300000277509fss:CorporateAndEliminationsMember2023-07-012023-09-300000277509fss:CorporateAndEliminationsMember2022-07-012022-09-300000277509fss:CorporateAndEliminationsMember2023-01-012023-09-300000277509fss:CorporateAndEliminationsMember2022-01-012022-09-300000277509fss:EnvironmentalSolutionsMemberus-gaap:SegmentContinuingOperationsMember2023-09-300000277509fss:EnvironmentalSolutionsMemberus-gaap:SegmentContinuingOperationsMember2022-12-310000277509fss:SafetyAndSecuritySystemsMemberus-gaap:SegmentContinuingOperationsMember2023-09-300000277509fss:SafetyAndSecuritySystemsMemberus-gaap:SegmentContinuingOperationsMember2022-12-310000277509us-gaap:SegmentContinuingOperationsMemberfss:CorporateAndEliminationsMember2023-09-300000277509us-gaap:SegmentContinuingOperationsMemberfss:CorporateAndEliminationsMember2022-12-310000277509fss:DeistMembersrt:MaximumMember2023-09-300000277509us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300000277509us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2023-09-300000277509us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300000277509us-gaap:FairValueMeasurementsRecurringMember2023-09-30
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________ 
FORM 10-Q
(Mark One)
☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number: 1-6003
  _____________________________________________
 fsslogocoverq22015a07.jpg
FEDERAL SIGNAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware36-1063330
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
1415 West 22nd Street, Oak Brook, Illinois
(Address of principal executive offices)
60523
(Zip code)
(630) 954-2000
(Registrant’s telephone number, including area code)
  _____________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $1.00 per shareFSSNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☑    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☑    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☑Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☑
As of October 31, 2023, the number of shares outstanding of the registrant’s common stock was 60,928,813.

FEDERAL SIGNAL CORPORATION
TABLE OF CONTENTS
Page
PART I.
Item 1.
Item 2.
Item 3.
Item 4.
PART II.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.







FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (“Form 10-Q”) is being filed by Federal Signal Corporation and its subsidiaries (referred to collectively as the “Company,” “we,” “our” or “us” herein, unless the context otherwise indicates) with the United States (“U.S.”) Securities and Exchange Commission (the “SEC”), and includes comments made by management that may contain words such as “may,” “will,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “project,” “estimate” and “objective” or similar terminology, or the negative thereof, concerning the Company’s future financial performance, business strategy, plans, goals and objectives. These expressions are intended to identify forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information concerning the Company’s possible or assumed future performance or results of operations and are not guarantees. While these statements are based on assumptions and judgments that management has made in light of industry experience as well as perceptions of historical trends, current conditions, expected future developments and other factors believed to be appropriate under the circumstances, they are subject to risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different.
These risks and uncertainties, some of which are beyond the Company’s control, include the risk factors described under Part I, Item 1A, Risk Factors, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on March 1, 2023. These factors may not constitute all factors that could cause actual results to differ materially from those discussed in any forward-looking statement. The Company operates in a continually changing business environment and new factors emerge from time to time, including, for example, the ongoing coronavirus pandemic and the government response to the pandemic. The Company cannot predict such factors, nor can it assess the impact, if any, of such factors on its results of operations, financial condition or cash flow. Accordingly, forward-looking statements should not be relied upon as a predictor of actual results. The Company disclaims any responsibility to update any forward-looking statement provided in this Form 10-Q.
ADDITIONAL INFORMATION
The Company is subject to the reporting and information requirements of the Exchange Act and, as a result, is obligated to file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports and information with the SEC, as well as amendments to those reports. The Company makes these filings available free of charge through our website at www.federalsignal.com as soon as reasonably practicable after such materials are filed with, or furnished to, the SEC. Information on our website does not constitute part of this Form 10-Q. In addition, the SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically.
1
PART I. FINANCIAL INFORMATION
Item 1.     Financial Statements (Unaudited).
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
 Three Months Ended
September 30,		Nine Months Ended
September 30,
(in millions, except per share data)2023202220232022
Net sales$446.4 $346.4 $1,274.3 $1,043.3 
Cost of sales328.7 263.6 943.5 795.0 
Gross profit117.7 82.8 330.8 248.3 
Selling, engineering, general and administrative expenses50.6 39.8 156.0 125.5 
Amortization expense3.9 3.1 11.4 9.6 
Acquisition and integration-related expenses (benefits)0.7 0.4 2.0 (1.0)
Operating income62.5 39.5 161.4 114.2 
Interest expense, net5.1 2.7 15.4 5.9 
Other expense (income), net0.3 0.1 1.5 (0.6)
Income before income taxes57.1 36.7 144.5 108.9 
Income tax expense13.8 4.9 33.5 23.1 
Net income$43.3 $31.8 $111.0 $85.8 
Earnings per share:
Basic$0.71 $0.53 $1.83 $1.42 
Diluted0.71 0.52 1.81 1.40 
Weighted average common shares outstanding:
Basic60.8 60.4 60.7 60.5 
Diluted61.4 61.0 61.4 61.1 
See notes to condensed consolidated financial statements.
2
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
 Three Months Ended
September 30,		Nine Months Ended
September 30,
(in millions)2023202220232022
Net income $43.3 $31.8 $111.0 $85.8 
Other comprehensive income (loss):
Change in foreign currency translation adjustment(5.1)(11.9)(0.4)(22.1)
Change in unrecognized net actuarial loss and prior service cost related to pension benefit plans, net of income tax expense of $0.3, $0.3, $0.3 and $0.8, respectively
0.9 1.8 0.8 4.9 
Change in unrealized gain or loss on interest rate swaps, net of income tax expense (benefit) of $0.0, $0.4, $(0.1) and $1.2, respectively
0.1 1.1 (0.2)3.4 
Total other comprehensive (loss) income(4.1)(9.0)0.2 (13.8)
Comprehensive income$39.2 $22.8 $111.2 $72.0 
See notes to condensed consolidated financial statements.
3
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30,
2023		December 31,
2022
(in millions, except per share data)(Unaudited) 
ASSETS
Current assets:
Cash and cash equivalents$41.0 $47.5 
Accounts receivable, net of allowances for doubtful accounts of $2.4 and $2.5, respectively
213.3 173.8 
Inventories330.1 292.7 
Prepaid expenses and other current assets19.3 17.4 
Total current assets603.7 531.4 
Properties and equipment, net of accumulated depreciation of $169.9 and $156.4, respectively
188.3 179.3 
Rental equipment, net of accumulated depreciation of $51.1 and $45.4, respectively
130.3 109.1 
Operating lease right-of-use assets23.7 24.7 
Goodwill473.6 453.4 
Intangible assets, net of accumulated amortization of $66.8 and $55.4, respectively
212.2 208.2 
Deferred tax assets12.1 8.8 
Other long-term assets10.7 9.4 
Total assets$1,654.6 $1,524.3 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term borrowings and finance lease obligations$3.9 $1.5 
Accounts payable82.4 72.4 
Customer deposits27.6 25.4 
Accrued liabilities:
Compensation and withholding taxes34.5 31.1 
Current operating lease liabilities7.4 6.9 
Other current liabilities46.8 43.2 
Total current liabilities202.6 180.5 
Long-term borrowings and finance lease obligations362.0 361.5 
Long-term operating lease liabilities17.0 18.5 
Long-term pension and other postretirement benefit liabilities38.8 38.9 
Deferred tax liabilities56.7 51.0 
Other long-term liabilities21.6 13.0 
Total liabilities698.7 663.4 
Stockholders’ equity:
Common stock, $1 par value per share, 90.0 shares authorized, 69.9 and 69.5 shares issued, respectively
69.9 69.5 
Capital in excess of par value284.7 271.8 
Retained earnings875.5 782.2 
Treasury stock, at cost, 9.0 and 8.8 shares, respectively
(190.4)(178.6)
Accumulated other comprehensive loss(83.8)(84.0)
Total stockholders’ equity955.9 860.9 
Total liabilities and stockholders’ equity$1,654.6 $1,524.3 
See notes to condensed consolidated financial statements.
4
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
 Nine Months Ended
September 30,
(in millions)20232022
Operating activities:
Net income$111.0 $85.8 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization45.1 40.7 
Stock-based compensation expense8.9 7.5 
Changes in fair value of contingent consideration(0.2)— 
Amortization of interest rate swap settlement gain(1.8)— 
Deferred income taxes2.0 0.3 
Changes in operating assets and liabilities(74.0)(101.9)
Net cash provided by operating activities91.0 32.4 
Investing activities:
Purchases of properties and equipment(21.4)(45.6)
Payments for acquisition-related activity, net of cash acquired(55.1)(6.6)
Other, net0.8 2.1 
Net cash used for investing activities(75.7)(50.1)
Financing activities:
Increase in revolving lines of credit, net4.6 49.9 
Purchases of treasury stock(4.3)(16.1)
Redemptions of common stock to satisfy withholding taxes related to stock-based compensation(5.6)(3.0)
Payments for acquisition-related activity(0.5)— 
Cash dividends paid to stockholders(17.7)(16.4)
Proceeds from stock-based compensation activity2.3 0.1 
Other, net— (0.1)
Net cash (used for) provided by financing activities(21.2)14.4 
Effects of foreign exchange rate changes on cash and cash equivalents(0.6)(1.7)
Decrease in cash and cash equivalents(6.5)(5.0)
Cash and cash equivalents at beginning of year47.5 40.5 
Cash and cash equivalents at end of period$41.0 $35.5 
See notes to condensed consolidated financial statements.
5
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)
Three Months Ended September 30, 2023
(in millions)Common
Stock		Capital in
Excess of
Par
Value		Retained
Earnings		Treasury
Stock		Accumulated
Other
Comprehensive
Loss		Total
Balance at July 1, 2023$69.9 $280.9 $838.3 $(185.5)$(79.7)$923.9 
Net income43.3 43.3 
Total other comprehensive loss(4.1)(4.1)
Cash dividends declared ($0.10 per share)
(6.1)(6.1)
Stock-based payments:
Stock-based compensation3.1 3.1 
Stock option exercises and other— 0.7 (0.6)0.1 
Stock repurchase program(4.3)(4.3)
Balance at September 30, 2023$69.9 $284.7 $875.5 $(190.4)$(83.8)$955.9 
Three Months Ended September 30, 2022
(in millions)Common
Stock		Capital in
Excess of
Par
Value		Retained
Earnings		Treasury
Stock		Accumulated
Other
Comprehensive
Loss		Total
Balance at July 1, 2022$69.2 $262.4 $726.7 $(170.2)$(79.0)$809.1 
Net income31.8 31.8 
Total other comprehensive loss(9.0)(9.0)
Cash dividends declared ($0.09 per share)
(5.5)(5.5)
Stock-based payments:
Stock-based compensation2.1 2.1 
Stock option exercises and other— 0.6 (1.1)(0.5)
Balance at September 30, 2022$69.2 $265.1 $753.0 $(171.3)$(88.0)$828.0 
Nine Months Ended September 30, 2023
(in millions)Common
Stock		Capital in
Excess of
Par
Value		Retained
Earnings		Treasury
Stock		Accumulated
Other
Comprehensive
Loss		Total
Balance at January 1, 2023$69.5 $271.8 $782.2 $(178.6)$(84.0)$860.9 
Net income111.0 111.0 
Total other comprehensive income0.2 0.2 
Cash dividends declared ($0.29 per share)
(17.7)(17.7)
Stock-based payments:
Stock-based compensation8.2 8.2 
Stock option exercises and other0.3 4.8 (4.2)0.9 
Performance share unit transactions0.1 (0.1)(3.3)(3.3)
Stock repurchase program(4.3)(4.3)
Balance at September 30, 2023$69.9 $284.7 $875.5 $(190.4)$(83.8)$955.9 
6
Nine Months Ended September 30, 2022
(in millions)Common
Stock		Capital in
Excess of
Par
Value		Retained
Earnings		Treasury
Stock		Accumulated
Other
Comprehensive
Loss		Total
Balance at January 1, 2022$68.9 $256.7 $683.6 $(151.0)$(74.2)$784.0 
Net income85.8 85.8 
Total other comprehensive loss(13.8)(13.8)
Cash dividends declared ($0.27 per share)
(16.4)(16.4)
Stock-based payments:
Stock-based compensation6.8 6.8 
Stock option exercises and other0.2 1.7 (2.9)(1.0)
Performance share unit transactions0.1 (0.1)(1.3)(1.3)
Stock repurchase program(16.1)(16.1)
Balance at September 30, 2022$69.2 $265.1 $753.0 $(171.3)$(88.0)$828.0 

7
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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 and Safety and Security Systems Group. 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. These segments are discussed in Note 12 – Segment Information.
Basis of Presentation and Consolidation
The accompanying unaudited condensed consolidated financial statements represent the consolidation of Federal Signal Corporation and its subsidiaries included herein and have been prepared by the Company pursuant to the rules and regulations of the United States (“U.S.”) Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures presented herein are adequate to ensure the information presented is not misleading. Except as otherwise noted, these condensed consolidated financial statements have been prepared in accordance with the Company’s accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, and should be read in conjunction with those consolidated financial statements and the notes thereto.
These condensed consolidated financial statements include all normal and recurring adjustments that we considered necessary to present a fair statement of our results of operations, financial condition and cash flow. Intercompany balances and transactions have been eliminated in consolidation.
The results reported in these condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year, which may differ materially due to, among other things, the risk factors described under Part I, Item 1A, Risk Factors, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on March 1, 2023. While we label our quarterly information using a calendar convention whereby our first, second and third quarters are labeled as ending on March 31, June 30 and September 30, respectively, it is our longstanding practice to establish interim quarterly closing dates based on a 13-week period ending on a Saturday, with our fiscal year ending on December 31. The effects of this practice are not material and exist only within a reporting year.
Recent Accounting Pronouncements and Accounting Changes
There are no new accounting pronouncements issued, but not yet adopted, that are expected to have a material impact on the Company’s results of operations, financial position or cash flow.
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.
Significant Accounting Policies
There have been no changes to the Company’s significant accounting policies as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
8
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)
(Unaudited)
NOTE 2 – ACQUISITIONS
Acquisitions Completed in 2023
Acquisition of Trackless
On April 3, 2023, the Company completed the acquisition of substantially all the assets and operations of Trackless Vehicles Limited and Trackless Vehicles Asset Corp, including the wholly-owned subsidiary Work Equipment Ltd. (collectively, “Trackless”), a leading Canadian manufacturer of off-road, multi-purpose tractors and attachments. The Company expects that the Trackless acquisition will further bolster its position as an industry leading diversified industrial manufacturer of specialized vehicles for maintenance and infrastructure markets with leading brands of premium, value-adding products, and a strong supporting aftermarket platform.
The assets and liabilities of Trackless have been consolidated into the Company’s Condensed Consolidated Balance Sheet as of September 30, 2023, and the post-acquisition results of operations have been included in the Condensed Consolidated Statements of Operations, within the Environmental Solutions Group.
The initial cash consideration paid by the Company to acquire Trackless was C$56.3 million (approximately $41.9 million), inclusive of certain closing adjustments, of which C$1.0 million (approximately $0.7 million) was received in the three months ended September 30, 2023. In addition, there is a contingent earn-out payment of up to C$6.0 million (approximately $4.5 million), based upon the achievement of certain financial targets over a specified performance period. The purchase price was funded through existing cash and borrowings under the Company’s credit agreement.
The acquisition is being accounted for in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations. Accordingly, the total purchase price has been allocated on a preliminary basis to assets acquired and liabilities assumed in connection with the acquisition based on their estimated fair values as of the completion of the acquisition. 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. The Company’s purchase price allocation as of September 30, 2023 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-Q. 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 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.
9
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)
(Unaudited)
The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:
(in millions)
Purchase price, inclusive of closing adjustments$41.9 
Estimated fair value of additional consideration (a)
4.5 
Total consideration46.4 
Accounts receivable4.7 
Inventories14.3 
Prepaid expenses and other current assets0.1 
Rental equipment1.6 
Properties and equipment4.4 
Customer relationships (b)
10.5 
Trade names (c)
2.8 
Other intangible assets1.3 
Accounts payable(1.5)
Accrued liabilities(0.5)
Net assets acquired37.7
Goodwill (d)
$8.7 
(a)    Represents the preliminary estimated fair value of the contingent earn-out payment as of the acquisition date, which is included in Other long-term liabilities on the Condensed Consolidated Balance Sheets. See Note 13 – Fair Value Measurements for discussion of the methodology used to determine the fair value of the contingent earn-out payment.
(b)    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.
(c)    Represents the preliminary fair value assigned to trade names, which are considered to be indefinite-lived intangible assets.
(d)    Goodwill, which is primarily tax-deductible, has been allocated to the Environmental Solutions Group on the basis that the synergies identified will primarily benefit this segment.
In the period between the April 3, 2023 closing date and September 30, 2023, Trackless generated $19.6 million of net sales and $4.3 million of operating income, before elimination of intercompany transactions.
Acquisition of Blasters
On January 3, 2023, the Company completed the acquisition of substantially all the assets and operations of Blasters, Inc. and Blasters Technologies, LLC (collectively, “Blasters”), a leading U.S. manufacturer of truck-mounted waterblasting equipment. The Company expects that the Blasters acquisition will further bolster its position as an industry leading diversified industrial manufacturer of specialized vehicles for maintenance and infrastructure markets with leading brands of premium, value-adding products, and a strong supporting aftermarket platform.
The assets and liabilities of Blasters have been consolidated into the Company’s Condensed Consolidated Balance Sheet as of September 30, 2023, and the post-acquisition results of operations have been included in the Condensed Consolidated Statements of Operations, within the Environmental Solutions Group.
The initial cash consideration paid by the Company to acquire Blasters was $13.0 million, inclusive of certain closing adjustments, of which $0.2 million was received in October 2023. In addition, there is a contingent earn-out payment of up to $8.0 million, based upon the achievement of certain financial targets over a specified performance period. The purchase price was funded through existing cash and borrowings under the Company’s credit agreement.
The acquisition is being accounted for in accordance with ASC 805, Business Combinations. The Company’s purchase price allocation as of September 30, 2023 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-Q. 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 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.
10
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)
(Unaudited)
The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date:
(in millions)
Purchase price, inclusive of closing adjustments$13.0 
Estimated fair value of additional consideration (a)
4.0 
Total consideration17.0 
Accounts receivable0.7 
Inventories4.6 
Prepaid expenses and other current assets0.1 
Properties and equipment1.1 
Operating lease right-of-use assets (b)
1.1 
Customer relationships (c)
5.3 
Trade names (d)
2.6 
Other intangible assets0.3 
Operating lease liabilities (b)
(1.1)
Accounts payable(0.9)
Accrued liabilities(0.5)
Customer deposits(0.5)
Finance lease obligations(0.1)
Net assets acquired12.7
Goodwill (e)
$4.3 
(a)    Represents the preliminary estimated fair value of the contingent earn-out payment as of the acquisition date, of which $1.0 million is included in Other current liabilities and $3.0 million is included in Other long-term liabilities on the Condensed Consolidated Balance Sheets. See Note 13 – Fair Value Measurements for discussion of the methodology used to determine the fair value of the contingent earn-out payment.
(b)    In connection with the acquisition, the Company entered into a lease agreement for the Blasters facility, which is owned by affiliates of the sellers. The related-party lease contains a market-based annual rent of $0.2 million, an initial lease term of five years, and options to renew.
(c)    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.
(d)    Represents the preliminary fair value assigned to trade names, which are considered to be indefinite-lived intangible assets.
(e)    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.
In the period between the January 3, 2023 closing date and September 30, 2023, Blasters generated $14.4 million of net sales and $1.0 million of operating income.
The 2023 acquisitions of Trackless and Blasters would not have been material to the Company’s net sales or results of operations for the three and nine months ended September 30, 2022, either individually or in the aggregate. Accordingly, the Company’s consolidated results do not differ materially from historical performance as a result of the acquisitions, and therefore, unaudited pro-forma results are not presented.
Acquisitions Completed in 2022
On October 3, 2022, the Company completed the acquisition of substantially all the assets and operations of TowHaul
Corporation (“TowHaul”). TowHaul is a leading manufacturer of off-road towing and hauling equipment. The TowHaul acquisition bolstered the Company’s position as an industry leading diversified industrial manufacturer of specialized vehicles for maintenance and infrastructure markets with leading brands of premium, value-adding products, and a strong supporting aftermarket platform.

The cash consideration paid by the Company to acquire TowHaul was $43.3 million, which was funded through existing cash and borrowings under the Company’s credit facility.
During the nine months ended September 30, 2023, the Company recognized measurement period adjustments, which primarily resulted from obtaining a third-party valuation of acquired intangible assets, that resulted in a $7.5 million increase to the
11
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)
(Unaudited)
carrying value of Goodwill from the $12.9 million previously recorded as of December 31, 2022, with a corresponding reduction in the carrying value of acquired intangible assets. The measurement period adjustments did not have a material impact on the Company’s Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2023. As of September 30, 2023, the Company’s purchase price allocation for the TowHaul acquisition is considered to be final.
The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:
(in millions)
Purchase price, inclusive of closing adjustments$43.3 
Total consideration43.3 
Accounts receivable1.5 
Inventories4.7 
Properties and equipment6.1 
Customer relationships (a)
6.9 
Trade names (b)
5.7 
Other intangible assets1.0 
Accounts payable(0.1)
Accrued liabilities(0.5)
Customer deposits(2.4)
Net assets acquired22.9 
Goodwill (c)
$20.4 
(a)    Represents the fair value assigned to customer relationships, which are considered to be definite-lived intangible assets, with an estimated useful life of 6 years.
(b)    Represents the fair value assigned to trade names, which are considered to be indefinite-lived intangible assets.
(c)    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.
12
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)
(Unaudited)
NOTE 3 – REVENUE RECOGNITION
The following table presents the Company’s Net sales disaggregated by geographic region, based on the location of the end customer, and by major product line:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in millions)2023202220232022
Geographic Region:
U.S.$340.0 $275.9 $988.0 $840.1 
Canada67.1 44.9 180.4 131.2 
Europe/Other39.3 25.6 105.9 72.0 
Total net sales$446.4 $346.4 $1,274.3 $1,043.3 
Major Product Line:
Environmental Solutions
Vehicles and equipment (a)
$290.5 $214.8 $820.8 $668.0 
Parts53.8 44.1 168.2 130.0 
Rental income (b)
13.8 14.4 41.7 40.2 
Other (c)
14.9 11.5 34.1 27.1 
Total373.0 284.8 1,064.8 865.3 
Safety and Security Systems
Public safety and security equipment44.2 36.3 126.8 109.9 
Industrial signaling equipment17.8 16.7 55.1 46.0 
Warning systems11.4 8.6 27.6 22.1 
Total73.4 61.6 209.5 178.0 
Total net sales$446.4 $346.4 $1,274.3 $1,043.3 
(a)    Includes net sales from the sale of new and used vehicles and equipment, including sales of rental equipment.
(b)    Represents income from vehicle and equipment lease arrangements with customers.
(c)    Primarily includes revenues from services, such as maintenance and repair work, and the sale of extended warranty contracts.
Contract Balances
The Company recognizes contract liabilities when cash payments, such as customer deposits, are received in advance of the Company’s satisfaction of the related performance obligations. Contract liabilities are recognized as Net sales when the related performance obligations are satisfied, which generally occurs within three to six months of the cash receipt. Contract liability balances are not materially impacted by any other factors. The Company’s contract liabilities were $30.9 million and $28.9 million as of September 30, 2023 and December 31, 2022, respectively. Contract assets, such as unbilled receivables, were not material as of any of the periods presented herein.
NOTE 4 – INVENTORIES
The following table summarizes the components of Inventories:
(in millions)September 30,
2023		December 31,
2022
Finished goods$121.4 $97.5 
Raw materials172.3 164.3 
Work in process36.4 30.9 
Total inventories (a)
$330.1 $292.7 
(a) Amounts at September 30, 2023 include inventories acquired in the acquisitions of Blasters and Trackless - See Note 2 - Acquisitions.
13
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)
(Unaudited)
NOTE 5 – DEBT
The following table summarizes the components of Long-term borrowings and finance lease obligations:
(in millions)September 30,
2023		December 31, 2022
2022 Credit Agreement (a)
$364.2 $361.0 
Finance lease obligations1.7 2.0 
Total borrowings and finance lease obligations, including current portion365.9 363.0 
Less: Current borrowings3.1 0.8 
Less: Current finance lease obligations0.8 0.7 
Total long-term borrowings and finance lease obligations$362.0 $361.5 
(a)     Defined as the Third Amended and Restated Credit Agreement, dated October 21, 2022, as amended.
As more fully described within Note 13 – Fair Value Measurements, the Company uses a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The fair value of the Company’s borrowings and finance lease obligations is based on interest rates that we believe are currently available to us for issuance of debt with similar terms and remaining maturities (Level 2 input). The carrying amounts of the Company’s borrowings and finance lease obligations approximate their fair values as of September 30, 2023 and December 31, 2022.
The 2022 Credit Agreement is a senior secured credit facility which provides the Company and certain of its foreign subsidiaries access to an aggregate principal amount of $800 million, consisting of (i) a revolving credit facility in an amount up to $675 million (the “Revolver”) and (ii) a term loan facility in an amount up to $125 million. The 2022 Credit Agreement matures on October 21, 2027.
Borrowings under the 2022 Credit Agreement bear interest, at the Company’s option, at a base rate or an Adjusted Term Secured Overnight Financing Rate (“SOFR”), Adjusted Eurocurrency Rate or Adjusted Daily Simple SONIA Rate (as each is defined in the 2022 Credit Agreement), plus, in each case, an applicable margin. The applicable margin ranges from zero to 0.75% for base rate borrowings and 1.00% to 1.75% for Adjusted Term SOFR, Adjusted Eurocurrency Rate or Adjusted Daily Simple SONIA Rate 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.
The Company is subject to certain net leverage ratio and interest coverage ratio financial covenants under the 2022 Credit Agreement that are measured at each fiscal quarter-end. The Company was in compliance with all such covenants as of September 30, 2023.
As of September 30, 2023, there was $364.2 million of cash drawn and $11.2 million of undrawn letters of credit under the 2022 Credit Agreement, with $424.6 million of net availability for borrowings. As of December 31, 2022, there was $361.0 million cash drawn and $11.2 million of undrawn letters of credit under the 2022 Credit Agreement, with $427.8 million of net availability for borrowings.
The following table summarizes the gross borrowings and gross payments under the Company’s credit facilities:
Nine Months Ended
September 30,
(in millions)20232022
Gross borrowings$134.3 $85.7 
Gross payments 129.7 35.8 
Interest Rate Swaps
On October 21, 2022, the Company entered into an interest rate swap (the “2022 Swap”) with a notional amount of $75.0 million, as a means of fixing the floating interest rate component on $75.0 million of its variable-rate debt. The 2022 Swap is designated as a cash flow hedge, with an original maturity date of October 31, 2025.
On July 11, 2023, the Company entered into an additional interest rate swap (the “2023 Swap”) with a notional amount of $75.0 million, as a means of fixing the floating interest rate component on $75.0 million of its variable-rate debt. The 2023 Swap is designated as a cash flow hedge, with an original maturity date of August 1, 2025.
14
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)
(Unaudited)
As a result of the application of hedge accounting treatment, all unrealized gains and losses related to the derivative instruments are recorded in Accumulated other comprehensive loss and are reclassified into operations in the same period in which the hedged transaction affects earnings. Hedge effectiveness is assessed quarterly. The Company does not use derivative instruments for trading or speculative purposes.
The fair value of the Company’s interest rate swaps is derived from a discounted cash flow analysis based on the terms of the contract and the interest rate curve (Level 2 inputs) and measured on a recurring basis in our Condensed Consolidated Balance Sheets.
At September 30, 2023 and December 31, 2022, the fair value of the Company’s interest rate swaps was an asset of $1.2 million and a liability of $0.3 million, which were included in Other long-term assets and Other long-term liabilities on the Condensed Consolidated Balance Sheets, respectively. During the three and nine months ended September 30, 2023, unrealized pre-tax gains of $0.6 million and $1.5 million, respectively, were recorded in Accumulated other comprehensive loss. During the three and nine months ended September 30, 2022, unrealized pre-tax gains $1.6 million and $4.7 million, respectively, were recorded in Accumulated other comprehensive loss. No ineffectiveness was recorded in either period.
In connection with entering into the 2022 Credit Agreement in October 2022, the Company terminated an interest rate swap initially entered into in 2019, receiving proceeds of $4.3 million upon settlement. The settlement gain was recorded in Accumulated other comprehensive loss and is being amortized into earnings ratably through the original maturity date of July 30, 2024. During the three and nine months ended September 30, 2023, the Company recognized non-cash settlement gains of $0.6 million and $1.8 million, respectively, as a component of Interest expense, net on the Condensed Consolidated Statements of Operations. At September 30, 2023 and December 31, 2022, an unrealized settlement gain of $2.0 million and $3.8 million, respectively, was included in Accumulated other comprehensive loss on the Condensed Consolidated Balance Sheets.
NOTE 6 – GOODWILL AND OTHER INTANGIBLE ASSETS
The following table summarizes the carrying amount of goodwill, and the changes in the carrying amount of goodwill in the nine months ended September 30, 2023, by segment:
(in millions)Environmental
Solutions		Safety & Security
Systems		Total
Balance at January 1, 2023$343.8 $109.6 $453.4 
Acquisitions, including measurement period adjustments20.5 — 20.5 
Translation adjustments— (0.3)(0.3)
Balance at September 30, 2023$364.3 $109.3 $473.6 
The following table summarizes the gross carrying amount and accumulated amortization of intangible assets for each major class of intangible assets:
 September 30, 2023December 31, 2022
(in millions)Gross Carrying ValueAccumulated AmortizationNet Carrying ValueGross Carrying ValueAccumulated AmortizationNet Carrying Value
Definite-lived intangible assets:
Customer relationships (a)
$162.3 $(62.7)$99.6 $153.7 $(52.0)$101.7 
Other (a)
8.2 (4.1)4.1 5.7 (3.4)2.3 
Total definite-lived intangible assets170.5 (66.8)103.7 159.4 (55.4)104.0 
Indefinite-lived intangible assets:
Trade names 104.2 — 104.2 99.9 — 99.9 
Other4.3 — 4.3 4.3 — 4.3 
Total indefinite-lived intangible assets108.5 — 108.5 104.2 — 104.2 
Total intangible assets$279.0 $(66.8)$212.2 $263.6 $(55.4)$208.2 
(a)    Average useful life of customer relationships and other definite-lived intangible assets are estimated to be approximately 12 years and 6 years, respectively. The average useful life across all definite-lived intangible assets is estimated to be approximately 11 years.
The table above includes preliminary estimates of the fair value and useful lives of certain definite and indefinite-lived
15
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)
(Unaudited)
intangible assets related to the acquisitions of Trackless and Blasters, which were completed during the second quarter of 2023, and the first quarter of 2023, respectively. As further described in Note 2 – Acquisitions, the preliminary measurements of fair value included in the table above are subject to change during the measurement period as the applicable third-party valuations are finalized.
Amortization expense for the three months ended September 30, 2023 and 2022 was $3.9 million and $3.1 million, respectively. Amortization expense for the nine months ended September 30, 2023 and 2022 was $11.4 million and $9.6 million, respectively.
The Company currently estimates that aggregate amortization expense will be approximately $3.9 million for the remainder of 2023, $15.5 million in 2024, $15.5 million in 2025, $15.3 million in 2026, $14.4 million in 2027, and $39.1 million thereafter. Actual amounts of amortization may differ from estimated amounts due to changes in foreign currency rates, measurement period adjustments for the Trackless and Blasters acquisitions, impairment of intangible assets and other events.
NOTE 7 – INCOME TAXES
The Company recognized income tax expense of $13.8 million and $4.9 million for the three months ended September 30, 2023 and 2022, respectively. The increase in tax expense in the current-year quarter was largely due to higher pre-tax income levels and the non-recurrence of certain discrete tax benefits recognized in the prior-year quarter. During the three months ended September 30, 2022, the Company recognized a $2.7 million tax benefit from the release of a valuation allowance that had previously been recorded against deferred tax assets associated with foreign tax credits in the U.S., and a $1.1 million tax benefit associated with the release of a valuation allowance in the U.K. Including these items, the Company’s effective tax rate for the three months ended September 30, 2023 was 24.2%, compared to 13.4% in the prior-year quarter.
For the nine months ended September 30, 2023 and 2022, the Company recognized income tax expense of $33.5 million and $23.1 million, respectively. The increase in tax expense in the current-year period was largely due to higher pre-tax income levels and the non-recurrence of the discrete tax benefits recognized in the prior-year quarter, partially offset by a $1.7 million increase in excess tax benefits associated with stock-based compensation activity and a $0.6 million benefit associated with changes in tax reserves. Including these items, the Company’s effective tax rate for the nine months ended September 30, 2023 was 23.2%, compared to 21.2% in the prior-year period.
During the nine months ended September 30, 2023, the Company filed amended U.S. federal income tax returns for the 2015 through 2018 tax years to claim a worthless stock deduction. As of September 30, 2023, the aggregate refund claim associated with the worthless stock deduction was $13.4 million, including interest of $1.6 million, and the Company recognized an offsetting increase to its liability for unrecognized tax benefits.
NOTE 8 – PENSIONS
The following table summarizes the components of Net periodic pension expense (benefit): 
 U.S. Benefit PlanNon-U.S. Benefit Plan
 Three Months Ended
September 30,		Nine Months Ended
September 30,		Three Months Ended
September 30,		Nine Months Ended
September 30,
(in millions)20232022202320222023202220232022
Service cost$— $— $— $— $0.1 $0.1 $0.1 $0.1 
Interest cost1.6 1.2 4.6 3.3 0.3 0.2 1.1 0.6 
Amortization of actuarial loss0.4 0.6 1.0 1.7 0.2 0.2 0.7 0.5 
Amortization of prior service cost— — — — 0.1 — 0.1 0.1 
Expected return on plan assets(1.9)(1.7)(5.7)(5.2)(0.6)(0.5)(1.6)(1.5)
Net periodic pension expense (benefit)$0.1 $0.1 $(0.1)$(0.2)$0.1 $— $0.4 $(0.2)
The items that comprise Net periodic pension expense (benefit), other than service cost, are included as a component of Other expense (income), net on the Condensed Consolidated Statements of Operations.
16
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)
(Unaudited)
NOTE 9 – COMMITMENTS AND CONTINGENCIES
Financial Commitments
The Company provides indemnifications and other guarantees in the ordinary course of business, the terms of which range in duration and often are not explicitly defined. Specifically, the Company is occasionally required to provide letters of credit and bid and performance bonds to various customers, principally to act as security for retention levels related to casualty insurance policies and to guarantee the performance of subsidiaries that engage in export and domestic transactions. At September 30, 2023, the Company had outstanding performance and financial standby letters of credit, as well as outstanding bid and performance bonds, aggregating to $25.6 million. If any such letters of credit or bonds are called, the Company would be obligated to reimburse the issuer of the letter of credit or bond. The Company believes the likelihood of any currently outstanding letter of credit or bond being called is remote.
The Company has transactions involving the sale of equipment to certain of its customers which include (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. As of September 30, 2023, both the single year and maximum potential cash payments the Company could be required to make to repurchase equipment under these agreements amounted to $1.4 million. The Company’s risk under these repurchase arrangements would be partially mitigated by the value of the products repurchased as part of the transaction. Historical cash requirements and losses associated with these obligations have not been significant but could increase if customer defaults exceed current expectations.
The Company has certain lease agreements for facilities owned by affiliates which include provisions requiring the Company to guarantee any remaining lease payments in the event of default. As of September 30, 2023, the total amount of future payments guaranteed under these agreements was approximately $0.9 million. The Company believes the likelihood of defaulting on these leases is remote.
Product Warranties
The Company issues product performance warranties to customers with the sale of its products. The specific terms and conditions of these warranties vary depending upon the product sold and country in which the Company does business, with warranty periods generally ranging from one to five years. The Company estimates the costs that may be incurred under its basic limited warranty and records a liability in the amount of such costs at the time the sale of the related product is recognized. Factors that affect the Company’s warranty liability include (i) the number of units under warranty, (ii) historical and anticipated rates of warranty claims and (iii) costs per claim. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary.
The following table summarizes the changes in the Company’s warranty liabilities during the nine months ended September 30, 2023 and 2022:
(in millions)20232022
Balance at January 1$9.3 $9.7 
Provisions to expense5.7 5.3 
Acquisitions0.1 — 
Payments(5.8)(5.9)
Balance at September 30$9.3 $9.1 
Legal Proceedings
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. On a quarterly basis, the Company reviews uninsured material legal claims against the Company and accrues for the costs of such claims as appropriate in the exercise of management’s best judgment and experience. However, due to a lack of factual information available to the Company about a claim, or the procedural stage of a claim, it may not be possible for the Company to reasonably assess either the probability of a favorable or unfavorable outcome of the claim or to reasonably estimate the amount of loss should there be an unfavorable outcome. Therefore, for many claims, the Company cannot reasonably estimate a range of loss.
17
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)
(Unaudited)
The Company believes, based on current knowledge and after consultation with counsel, that the outcome of such claims and actions will not have a material adverse effect on the Company’s results of operations or financial condition. 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, financial condition or cash flow.
Hearing Loss Litigation
The Company has been sued for monetary damages by firefighters claiming that exposure to the Company’s sirens impaired their hearing and the sirens are therefore defective. Between 1999 and 2013, 40 cases were filed on behalf of a total of 2,816 plaintiffs in the Circuit Court of Cook County, Illinois. The trial of the first 27 of these plaintiffs’ claims occurred in 2008, whereby a Cook County jury returned a unanimous verdict in favor of the Company. In 2009, a trial was held on behalf of nine Chicago firefighter plaintiffs and concluded with a verdict for the plaintiffs in varying amounts totaling $0.4 million. Following appeals, the Company satisfied the judgments, resulting in the final dismissal of the cases. A third consolidated trial involving eight Chicago firefighter plaintiffs occurred in November 2011. The jury returned a unanimous verdict in favor of the Company. Thereafter, the trial court scheduled a fourth consolidated trial involving three firefighter plaintiffs. Prior to trial, the claims of two of the firefighter plaintiffs were dismissed, and on December 17, 2012, the jury entered a complete defense verdict for the Company. On December 20, 2021, the parties executed a settlement agreement to resolve claims of approximately 462 firefighters still involved in the litigation, agreeing to pay a lump sum of $0.2 million based upon an assessment of firefighters who met minimal bilateral hearing loss standards. The estimated settlement amount was accrued by the Company. The settlement agreement did not require the payment of any attorney fees by the Company and provided that plaintiffs’ attorney would withdraw from representing firefighters who did not agree to the settlement. In July 2022, the Company issued the settlement payment for eligible plaintiffs who submitted a release. The claims of all other eligible plaintiffs were dismissed for want of prosecution on August 5, 2022.
The Company also filed motions to dismiss cases involving firefighters who worked for fire departments located outside of Illinois based on improper venue. On February 24, 2017, the Circuit Court of Cook County dismissed the cases of 1,770 such firefighter plaintiffs. In 2017, the Company entered into a global settlement agreement (the “2017 Settlement Agreement”) with two attorneys who represented approximately 1,090 of these plaintiffs offering to pay $700 per plaintiff to settle these cases, and 717 plaintiffs accepted this offer as a final settlement. The 2017 Settlement Agreement did not require the payment of any attorney fees by the Company. The attorneys representing these plaintiffs agreed to withdraw from representing plaintiffs who did not respond to the settlement offer. It is the Company’s position that the non-settling plaintiffs who failed to timely refile their cases are barred from doing so by the statute of limitations.
The Company was also sued on this issue outside of the Cook County, Illinois venue. Between 2007 and 2009, lawsuits involving 71 plaintiffs were filed in the Court of Common Pleas, Philadelphia County, Pennsylvania. Three of these cases were dismissed pursuant to pretrial motions, one case was voluntarily dismissed, and others were settled for nominal sums. Three trials were held in these cases. In the first trial, a jury returned a verdict for the plaintiff, finding that the Company’s siren was not defectively designed but that the Company negligently constructed the siren. The jury awarded damages in an amount less than $0.1 million. In 2010, a jury returned a defense verdict for the Company as to the claims of nine plaintiffs. In a third trial, the jury returned a defense verdict for the Company as to the claims of nine plaintiffs. Following the defense verdicts in the last two Philadelphia trials, in order to avoid the inconvenience, uncertainty and distraction of the lawsuits, the Company entered into a global settlement agreement (the “2010 Settlement Agreement”) on behalf of 1,125 claimants (the “Claimants”). The 2010 Settlement Agreement provided that the Company pay a total amount of $3.8 million to settle the claims (including the costs, fees and other expenses of the law firm in connection with its representation of the Claimants), subject to certain terms, conditions and procedures set forth in the 2010 Settlement Agreement. On April 22, 2011, the Company confirmed that the terms and conditions of the 2010 Settlement Agreement had been met and made an adjusted payment of $3.6 million to conclude the settlement. The amount was based upon the Company’s receipt of 1,069 signed releases provided by Claimants. The Company generally denies the allegations made in the lawsuits and denies that its products caused any injuries to the Claimants.
From 2007 through 2009, firefighters also brought hearing loss claims against the Company in New Jersey, Missouri, Maryland and Kings County, New York, all of which were dismissed prior to trial.
In 2012, 20 new cases were filed in Philadelphia on behalf of 20 Philadelphia firefighters against various defendants in addition to the Company. Five of these cases were dismissed. The first trial involving these cases occurred in December 2014 and involved three firefighter plaintiffs. The jury returned a verdict in favor of the Company. Following the trial, the parties agreed to settle cases involving seven firefighter plaintiffs for nominal amounts.
18
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)
(Unaudited)
In January 2015, plaintiffs’ attorneys filed two new complaints in Philadelphia on behalf of approximately 70 additional firefighter plaintiffs. One of the complaints, which involved 11 firefighter plaintiffs from the District of Columbia, was removed to federal court in the Eastern District of Pennsylvania. Plaintiffs voluntarily dismissed all claims in that case on May 31, 2016. The Company thereafter moved to recover fees and costs in this case, asserting that plaintiffs’ counsel failed to properly investigate the claims prior to filing suit. The Court granted the motion, awarding $0.1 million to the Company, and the United States Court of Appeals for the Third Circuit affirmed the decision awarding fees and costs to the Company. The Court granted the Company’s motion to dismiss the remaining out-of-state firefighters. In 2015, another nine new cases involving a total of 193 firefighters were filed in Philadelphia. The court dismissed all claims filed by out-of-state firefighters, a decision affirmed by the appellate court.
In 2016 and 2017, plaintiffs filed new cases involving a total of 155 Philadelphia firefighters in Philadelphia state court, and the cases were transferred to the mass tort program in Philadelphia for pretrial purposes. In November 2017, a trial involving one Philadelphia firefighter occurred, and the jury returned a verdict in favor of the Company.
In 2014, an action was brought in the Court of Common Pleas of Erie County, Pennsylvania on behalf of 61 firefighters against various defendants in addition to the Company. Also in 2014, 20 lawsuits involving a total of 193 Buffalo Fire Department firefighters were filed in the Supreme Court of the State of New York, Erie County. In 2015, the Company was served with a complaint filed in Union County, New Jersey state court, involving 34 New Jersey firefighters. In 2016, nine cases were filed in Suffolk County, Massachusetts state court, naming the Company as a defendant. These cases involved 194 firefighters who lived and worked in the Boston area. In 2017, plaintiffs’ attorneys filed additional hearing loss cases in Florida. Prior to a dismissal of these cases pursuant to the Tolling Agreement discussed below, there was a total of 1084 firefighters involved in these cases.
In 2013, cases were filed in Allegheny County, Pennsylvania on behalf of 247 plaintiff firefighters from Pittsburgh and against various defendants including the Company. In 2016, cases were filed against an additional 19 Pittsburgh firefighters. After the Company filed pretrial motions, the Court dismissed claims of 55 Pittsburgh firefighter plaintiffs. Prior to the first scheduled trial, the Court granted the Company’s motion for summary judgment and dismissed all claims asserted by plaintiff firefighters involved in this trial. Following an appeal by the plaintiff firefighters, the appellate court affirmed this dismissal. A jury rendered a verdict in favor of the Company in 2017.
In 2017, five cases involving 70 firefighter plaintiffs were filed in Lackawanna County, Pennsylvania.
A second trial involving Pittsburgh firefighters began in 2018. At the outset of this trial, plaintiffs’ attorneys, who represent all firefighters who filed cases in Allegheny County, Philadelphia, Buffalo, New Jersey, Massachusetts, and Florida requested that the Company consider settlement of various cases. In March 2018, the parties agreed in principle on a framework (the “Settlement Framework”) to resolve hearing loss claims and cases in all jurisdictions involved in the hearing loss litigation except Cook County, Illinois and Lackawanna County, Pennsylvania and a case involving one firefighter in New York City, cases being handled by different attorneys. The Company later settled the cases in Lackawanna County and settled the case involving one firefighter in New York City for nominal amounts.
In order to minimize the parties’ respective legal costs and expenses during this settlement process, on July 5, 2018, the parties entered into a tolling agreement (the “Tolling Agreement”). Pursuant to the Tolling Agreement, counsel for the settling firefighters agreed to dismiss the pending lawsuits in all jurisdictions except for the Allegheny County (Pittsburgh), Pennsylvania cases, and the Company agreed to a tolling of any statute of limitations applicable to the dismissed cases. The Tolling Agreement continued in place until the parties executed a global settlement agreement (the “2019 Settlement Agreement”) on November 4, 2019. After execution of the 2019 Settlement Agreement, the Allegheny County (Pittsburgh) cases were dismissed.
Pursuant to the Settlement Framework, the Company would pay $700 to each firefighter who filed a lawsuit and is eligible to be part of the settlement and $300 to each firefighter who has not yet filed a case and is eligible to be part of the settlement. To be eligible for settlement, among other things, firefighters must provide proof that they have high frequency noise-induced hearing loss. There are approximately 2,160 firefighters whose claims may be considered as part of this settlement, including approximately 921 firefighters who have ongoing filed lawsuits. The Settlement Framework was finalized in the 2019 Settlement Agreement. The 2019 Settlement Agreement requires plaintiffs’ attorneys to withdraw from representing firefighters who elect not to participate in the settlement and does not include the payment of any attorney fees by the Company. Pursuant to the 2019 Settlement Agreement, the parties are now in the process of determining how many of the approximately 2,160 firefighters will be eligible to participate in the settlement.
19
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)
(Unaudited)
As of September 30, 2023, the Company has recognized an estimated liability for the potential settlement amount under the Settlement Framework. While it is reasonably possible that the ultimate resolution of this matter may result in a loss in excess of the amount accrued, the incremental loss is not expected to be material.
NOTE 10 – EARNINGS PER SHARE
The Company computes earnings per share (“EPS”) in accordance with ASC 260, Earnings per Share, which requires that non-vested restricted stock containing non-forfeitable dividend rights should be treated as participating securities pursuant to the two-class method. Under the two-class method, net income is reduced by the amount of dividends declared in the period for common stock and participating securities. The remaining undistributed earnings are then allocated to common stock and participating securities as if all of the net income for the period had been distributed. The amounts of distributed and undistributed earnings allocated to participating securities for the three and nine months ended September 30, 2023 and 2022 were insignificant and did not materially impact the calculation of basic or diluted EPS.
Basic EPS is computed by dividing income available to common stockholders by the weighted average number of shares of common stock and non-vested restricted stock awards outstanding for the period.
Diluted EPS is computed using the weighted average number of shares of common stock and non-vested restricted stock awards outstanding for the year, plus the effect of dilutive potential common shares outstanding during the period. The dilutive effect of common stock equivalents is determined using the more dilutive of the two-class method or alternative methods. The Company uses the treasury stock method to determine the potentially dilutive impact of our employee stock options and restricted stock units, and the contingently issuable method for our performance-based restricted stock unit awards.
For both the three and nine months ended September 30, 2023, options to purchase 0.1 million shares of the Company’s common stock had an anti-dilutive effect on EPS, and accordingly, were excluded from the calculation of diluted EPS. For both the three and nine months ended September 30, 2022, options to purchase 0.3 million shares of the Company’s common stock had an anti-dilutive effect on EPS, and accordingly, were excluded from the calculation of diluted EPS.
The following table reconciles Net income to basic and diluted EPS:
 Three Months Ended
September 30,		Nine Months Ended
September 30,
(in millions, except per share data)2023202220232022
Net income$43.3 $31.8 $111.0 $85.8 
Weighted average shares outstanding – Basic60.8 60.4 60.7 60.5 
Dilutive effect of common stock equivalents0.6 0.6 0.7 0.6 
Weighted average shares outstanding – Diluted61.4 61.0 61.4 61.1 
Earnings per share:
Basic$0.71 $0.53 $1.83 $1.42 
Diluted0.71 0.52 1.81 1.40 
NOTE 11 – STOCKHOLDERS’ EQUITY
Dividends
On February 14, 2023, the Company’s Board of Directors (the “Board”) declared a quarterly cash dividend of $0.09 per common share. The dividend totaled $5.5 million and was distributed on March 31, 2023 to stockholders of record at the close of business on March 17, 2023.
On April 25, 2023, the Board declared a quarterly cash dividend of $0.10 per common share. The dividend totaled $6.1 million and was distributed on June 2, 2023 to stockholders of record at the close of business on May 19, 2023.
On July 24, 2023, the Board declared a quarterly cash dividend of $0.10 per common share. The dividend totaled $6.1 million and was distributed on September 1, 2023 to stockholders of record at the close of business on August 18, 2023.
During the three and nine months ended September 30, 2022, dividends of $5.5 million and $16.4 million, respectively, were paid to stockholders.
On October 24, 2023, the Board declared a quarterly cash dividend of $0.10 per common share payable on December 1, 2023 to
20
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)
(Unaudited)
stockholders of record at the close of business on November 17, 2023.
Stock Repurchase Program
In March 2020, the Board authorized a stock repurchase program of up to $75.0 million of the Company’s common stock, with the remaining authorization under our previously described repurchase program adopted in 2014 being subject to the March 2020 program. The stock repurchase program is intended primarily to facilitate purchases of Company stock as a means to provide cash returns to stockholders, enhance stockholder returns and manage the Company’s capital structure. Under its stock repurchase program, the Company is authorized to repurchase, from time to time, shares of its outstanding common stock. Stock repurchases by the Company are subject to market conditions and other factors and may be commenced, suspended or discontinued at any time.
During the three and nine months ended September 30, 2023, the Company repurchased 72,468 shares for a total of $4.3 million under its stock repurchase programs.
No shares were repurchased during the three months ended September 30, 2022. During the nine months ended September 30, 2022, the Company repurchased 472,381 shares for a total of $16.1 million.
Accumulated Other Comprehensive Loss
The following tables summarize the changes in each component of Accumulated other comprehensive loss, net of tax in the three months ended September 30, 2023 and 2022:
(in millions) (a)
Actuarial LossesPrior Service CostsForeign
Currency Translation		Interest Rate SwapsTotal
Balance at July 1, 2023$(68.7)$(2.0)$(11.3)$2.3 $(79.7)
Other comprehensive income (loss) before reclassifications0.3 — (5.1)0.8 (4.0)
Amounts reclassified from accumulated other comprehensive loss0.5 0.1 — (0.7)(0.1)
Net current-period other comprehensive income (loss)0.8 0.1 (5.1)0.1 (4.1)
Balance at September 30, 2023$(67.9)$(1.9)$(16.4)$2.4 $(83.8)
(in millions) (a)
Actuarial LossesPrior Service CostsForeign
Currency Translation		Interest Rate SwapsTotal
Balance at July 1, 2022$(65.1)$(2.1)$(13.6)$1.8 $(79.0)
Other comprehensive income (loss) before reclassifications1.0 0.2 (11.9)1.0 (9.7)
Amounts reclassified from accumulated other comprehensive loss0.6 — — 0.1 0.7 
Net current-period other comprehensive income (loss)1.6 0.2 (11.9)1.1 (9.0)
Balance at September 30, 2022$(63.5)$(1.9)$(25.5)$2.9 $(88.0)
(a)    Amounts in parentheses indicate losses.
The following tables summarize the changes in each component of Accumulated other comprehensive loss, net of tax in the nine months ended September 30, 2023 and 2022:
(in millions) (a)
Actuarial LossesPrior Service CostsForeign
Currency Translation		Interest Rate SwapsTotal
Balance at January 1, 2023$(68.6)$(2.0)$(16.0)$2.6 $(84.0)
Other comprehensive (loss) income before reclassifications(0.6)— (0.4)1.5 0.5 
Amounts reclassified from accumulated other comprehensive loss1.3 0.1 — (1.7)(0.3)
Net current-period other comprehensive income (loss)0.7 0.1 (0.4)(0.2)0.2 
Balance at September 30, 2023$(67.9)$(1.9)$(16.4)$2.4 $(83.8)
21
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)
(Unaudited)
(in millions) (a)
Actuarial LossesPrior Service CostsForeign
Currency Translation		Interest Rate SwapsTotal
Balance at January 1, 2022$(67.9)$(2.4)$(3.4)$(0.5)$(74.2)
Other comprehensive income (loss) before reclassifications2.8 0.4 (22.1)3.0 (15.9)
Amounts reclassified from accumulated other comprehensive loss1.6 0.1 — 0.4 2.1 
Net current-period other comprehensive income (loss)4.4 0.5 (22.1)3.4 (13.8)
Balance at September 30, 2022$(63.5)$(1.9)$(25.5)$2.9 $(88.0)
(a)    Amounts in parentheses indicate losses.
The following table summarizes the amounts reclassified from Accumulated other comprehensive loss, net of tax, in the three months ended September 30, 2023 and 2022 and the affected line item in the Condensed Consolidated Statements of Operations:
Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive LossAffected Line Item in Condensed Consolidated Statements of Operations
20232022
(in millions) (a)
Amortization of actuarial losses of defined benefit pension plans$(0.6)$(0.8)Other expense (income), net
Amortization of prior service costs of defined benefit pension plans(0.1)— Other expense (income), net
Interest rate swaps0.9 (0.2)Interest expense, net
Total before tax0.2 (1.0)
Income tax (expense) benefit(0.1)0.3 Income tax expense
Total reclassifications for the period, net of tax$0.1 $(0.7)
(a)    Amounts in parentheses indicate losses.
The following table summarizes the amounts reclassified from Accumulated other comprehensive loss, net of tax, in the nine months ended September 30, 2023 and 2022 and the affected line item in the Condensed Consolidated Statements of Operations:
Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive LossAffected Line Item in Condensed Consolidated Statements of Operations
20232022
(in millions) (a)
Amortization of actuarial losses of defined benefit pension plans$(1.7)$(2.2)Other expense (income), net
Amortization of prior service costs of defined benefit pension plans(0.1)(0.1)Other expense (income), net
Interest rate swaps2.3 (0.5)Interest expense, net
Total before tax0.5 (2.8)
Income tax (expense) benefit(0.2)0.7 Income tax expense
Total reclassifications for the period, net of tax$0.3 $(2.1)
(a)    Amounts in parentheses indicate losses.
22
FEDERAL SIGNAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (CONTINUED)
(Unaudited)
NOTE 12 – SEGMENT INFORMATION
The Company has two reportable segments: the Environmental Solutions Group and the Safety and Security Systems Group. Business units are organized under each reportable segment because they share certain characteristics, such as technology, marketing, distribution and product application, which create long-term synergies.
The following tables summarize the Company’s operations by segment, including Net sales, Operating income (loss), and Total assets:
 Three Months Ended
September 30,		Nine Months Ended
September 30,
(in millions)2023202220232022
Net sales:
Environmental Solutions$373.0 $284.8 $1,064.8 $865.3 
Safety and Security Systems73.4 61.6 209.5 178.0 
Total net sales$446.4 $346.4 $1,274.3 $1,043.3 
Operating income (loss):
Environmental Solutions$57.2 $33.9 $151.0 $99.8 
Safety and Security Systems13.7 10.5 39.9 28.7 
Corporate and eliminations(8.4)(4.9)(29.5)(14.3)
Total operating income62.5 39.5 161.4 114.2 
Interest expense, net5.1 2.7 15.4 5.9