Federal Signal Corporation, operating through its various subsidiaries, specializes in the development, production, and distribution of an extensive range of products and ...
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Operator: Greetings. Welcome to the Federal Signal Corporation's second quarter earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Felix Boeschen, Vice President, Corporate Strategies and Investor Relations. Thank you, Felix. You may begin. Felix Boeschen: Good morning. Welcome to Federal Signal's second quarter 2026 conference call. I'm Felix Boeschen, the company's Vice President of Corporate Strategy and Investor Relations. Also with me on the call today is Jennifer Sherman, our President and Chief Executive Officer, and Ian Hudson, our Chief Financial Officer. We will refer to some presentation slides today, as well as to the earnings release, which we issued this morning. The slides can be followed online by going to our website, federalsignal.com, clicking on the Investor Call icon, and signing in to the webcast. We've also posted the slide presentation and the earnings release under the investor tab on our website. Before I turn the call over to Ian, I'd like to remind you that some of our comments made today may contain forward-looking statements that are subject to the safe harbor language found in today's news release and in Federal Signal's filings with the Securities and Exchange Commission. These documents are available on our website. Our presentation also contains some measures that are not in accordance with the U.S. generally accepted accounting principles. In our earnings release and filings, we reconcile these non-GAAP measures to GAAP measures. In addition, we will file our Form 10-Q later today. Ian will start today with more detail on our second quarter financial results. Jennifer will then provide her perspective on our performance, current market conditions, and go over our increased guidance for 2026 before we open the line for any questions. With that, I would now like to turn the call over to Ian. Ian Hudson: Thank you, Felix. Our consolidated second quarter financial results are provided in today's earnings release. In summary, in what is typically a seasonably strong period, our businesses were able to deliver 19% year-over-year net sales growth, 21% operating income improvement, an 18% increase in orders, gross margin expansion, and a 60-basis-point improvement in Adjusted EBITDA margin during the record-setting second quarter. Consolidated net sales for the quarter were $670 million, an increase of $106 million or 19% compared to last year. Organic sales growth for the quarter was $31 million or 6%. Consolidated operating income for the quarter was $118.2 million, up $20.5 million, or 21% compared to last year. Consolidated Adjusted EBITDA for the quarter was $144.4 million, up $26.2 million or 22% compared to last year. That …
Est. EPS $1.32 · Revenue $661.61M · 7 analysts
Est. EPS $1.31 · Revenue $680.20M · 7 analysts
| Metric | Latest | YoYYoY means Year-over-Year. It compares the latest annual value with the previous annual value to show long-term trend strength. | QoQQoQ means Quarter-over-Quarter. It compares the latest quarter with the immediately previous quarter to show short-term momentum changes. |
|---|---|---|---|
| The total money that came through the front door from selling things, before paying a single bill. Think of it as the grand total of every credit card swipe from customers. (YoY compares this year to last year's performance, while QoQ compares the current three months to the previous three). |
| Name | Title | Compensation | Gender | Year Born | Status |
|---|---|---|---|---|---|
Jennifer L. Sherman | President, Chief Executive Officer & Director | USD 3,543,044 | Female | 1965 | Active |
Mark D. Weber | Senior Vice President & Chief Operating Officer |
| USD 1,719,084 |
| Male |
| 1958 |
| Active |
Ian A. Hudson | Senior Vice President & Chief Financial Officer | USD 1,410,598 | Male | 1976 | Active |
Diane Bonina | Vice President, General Counsel & Corporate Secretary | USD 1,068,906 | Female | 1964 | Active |
Felix Boeschen | Vice President of Corporate Strategy & Investor Relations | USD 750,595 | Male | 1995 | Active |
Est. EPS $5.23 · Revenue $2.64B · 7 analysts
Est. EPS $1.25 · Revenue $656.98M · 2 analysts
$0.58 per share
$0.58 per share
| $2.2B |
| +17.1% |
| +7.1% |
| Net IncomeThe absolute bottom line. If the company paid every single supplier, employee, banker, and tax collector, this is the actual money left in their pocket at the end of the day. | $246.6M | +14.0% | +22.3% |
| Gross MarginThe basic markup. If they sell a $100 pair of sneakers, this percentage tells you how much of that price tag is profit right after paying for the rubber and shoelaces, but before paying for things like store rent or TV commercials. | +28.9% | +1.1% | +6.0% |
| Operating MarginThe 'day job' efficiency score. Out of every dollar a customer spends, this shows how many cents the company keeps after making the product AND paying for all the everyday corporate overhead (like salaries, marketing, and keeping the lights on). | +16.4% | +8.3% | +10.0% |
| Net MarginThe final take-home percentage. When you strip away every conceivable cost, tax, and interest payment, this is the exact number of cents the company truly gets to keep from every dollar in sales. | +11.3% | -2.7% | +14.2% |
| Free Cash FlowThe holy grail of corporate cash. It's the spendable, physical money left over after the business pays for its daily operations AND buys the big, expensive upgrades (like new factories or servers) it needs to survive. This is the 'free' money they can use to pay dividends or buy back stock. | $227.1M | +19.1% | +6.8% |
| FCF MarginThe ultimate cash conversion rate. It shows how good the company is at turning regular sales directly into cold, hard, spendable cash. A high percentage means the business is an absolute cash-printing machine. | +10.4% | +1.7% | -0.3% |
| Debt / EquityThe financial risk gauge. It compares how much of the company's empire was built using borrowed money (loans) versus the owners' own money (shareholders). A high number means they are heavily leveraged and playing a riskier game; a low number means they are playing it safe. | 43.0% | +102.2% | -20.7% |
| Current RatioThe 12-month survival check. It simply compares the cash they have right now (plus things they can quickly turn into cash) against the immediate bills they absolutely must pay this year. A score above 1 means they have enough in the wallet to cover the upcoming bills without panicking. | 3.02x | +13.8% | -3.7% |
| Total AssetsThe absolute size of the company's empire. It bundles together absolutely everything of value they own—from the cash in the register and the inventory in the warehouse, to the software patents in the vault and the factories on the ground. | $2.4B | +35.5% | -0.6% |
| Metric | Annual (A vs E) | Annual Surprise | Quarter (A vs E) | Quarter Surprise |
|---|---|---|---|---|
| EPS Surprise | 4.01 vs 4.14 | -3.1% | 1.40 vs 1.32 | +6.4% |
| Revenue Surprise | $2.2B vs $2.1B | +2.4% | $670.2M vs $661.6M | +1.3% |
| Date | Executive | Title | Security | Side | Shares | Price |
|---|---|---|---|---|---|---|
| Aug 4, 2026 | REICHELDERFER BRENDA | director | Common Stock | D | 7,650 | — |
| Aug 4, 2026 | REICHELDERFER BRENDA | director | Common Stock | D | 6,070 | $131.02 |
| Aug 4, 2026 | Bonina Diane | officer: VP, Gen'l Counsel & Secretary | Common Stock | A | 8,406 | $35.80 |
| Aug 4, 2026 | Bonina Diane | officer: VP, Gen'l Counsel & Secretary | Common Stock | A | 6,450 | $51.81 |
| Aug 4, 2026 | Bonina Diane | officer: VP, Gen'l Counsel & Secretary | Common Stock | D | 6,350 | $130.41 |
