Federal Signal Q1 2016 Earnings Call May 3, 2016

Dennis Martin, Executive Chairman

Jennifer Sherman, President & Chief Executive Officer

Brian Cooper, SVP, Chief Financial Officer

Safe Harbor

This presentation contains unaudited financial information and various forward-looking statements as of the date hereof and we undertake no obligation to update these forward-looking statements regardless of new developments or otherwise. Statements in this presentation that are not historical are forward-looking statements. Such statements are subject to various risks and uncertainties that could cause actual results to vary materially from those stated. Such risks and uncertainties include but are not limited to: economic conditions in various regions, product and price competition, supplier and raw material prices, foreign currency exchange rate changes, interest rate changes, increased legal expenses and litigation results, legal and regulatory developments and other risks and uncertainties described in filings with the Securities and Exchange Commission. This presentation also contains references to certain non-GAAP financial information. Such items are reconciled herein and in our earnings news release provided as of the date of this presentation.

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Q1 Highlights *

• Net sales of $173 M, down 12%

• Operating income of $16.1 M, compared to $24.5 M Q1 2016 includes $1.2 M of restructuring charges and $0.5 M of acquisition related

costs

• Operating margin of 9.3%, down from 12.5% 10.3% operating margin without restructuring and acquisition related costs

• GAAP EPS of $0.17, compared to $0.22

• Adjusted EPS of $0.19, compared to $0.22

• Orders of $136 M, down 17%

• Backlog of $136 M, down 21% from Q4 of 2015

• $77 M of cash on hand at the end of Q1; essentially debt-free

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* Comparisons versus Q1 of 2015, unless otherwise noted

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Group and Corporate Results

$ millions, except % Q1 2016 Q1 2015 % Change

ESG Orders 83.2 106.3 -22%

Sales 115.4 140.2 -18%

Operating income 16.5 23.9 -31%Operating margin 14.3% 17.0%

SSG Orders 52.5 57.7 -9%

Sales 57.4 56.3 2%

Operating income 4.9 6.6 -26%Operating margin 8.5% 11.7%

Corporate expenses 5.3 6.0 -12%

Consolidated Orders 135.7 164.0 -17%

Sales 172.8 196.5 -12%

Operating income 16.1 24.5 -34%Operating margin 9.3% 12.5%

Income from Continuing Operations

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$ millions, except % and per share Q1 2016 Q1 2015 $ Change % Change

Net sales 172.8 196.5 (23.7) -12%

Gross profit 47.4 54.9 (7.5) -14%

SEG&A expenses 29.6 30.4 (0.8) -3%

Acquisition and integration related expenses 0.5 - 0.5 NM

Restructuring 1.2 - 1.2 NM

Operating income 16.1 24.5 (8.4) -34%

Interest expense 0.4 0.6 (0.2) -33%

Debt settlement charges 0.3 - 0.3 NM

Other (income) expense, net (0.7) 1.2 (1.9) NM

Income tax expense 5.7 8.3 (2.6) -31%

Income from continuing operations 10.4 14.4 (4.0) -28%

Diluted earnings per share from

continuing operations $0.17 $0.22 ($0.05) -23%

Diluted adjusted earnings per share from

continuing operations $0.19 $0.22 ($0.03) -14%

Gross Margin 27.4% 27.9%

Effective tax rate 35.4% 36.6%

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Adjusted Earnings per Share

($ in millions)

2016 2015

Income from continuing operations 10.4$ 14.4$

Add:

Income tax expense 5.7 8.3

Income before income taxes 16.1 22.7

Add:

Restructuring 1.2 -

Acquisition and integration related expenses 0.5 -

Debt settlement charges 0.3 -

Adjusted income before income taxes 18.1 22.7

Adjusted income tax expense (1) (6.4) (8.3)

Adjusted net income from continuing operations 11.7$ 14.4$

Diluted EPS from continuing operations 0.17$ 0.22$

Adjusted diluted EPS from continuing operations 0.19$ 0.22$

(1) Adjusted income tax expense for the three months ended March 31, 2016 w as recomputed after

excluding the impact of restructuring activity, acquisition and integration related expenses, and debt

settlement charges.

Three Months Ended March 31,

• Used $6.7 M of cash for continuing operations, compared to $0.8 M of cash generation in prior-year quarter

• Completed sale of Bronto in Q1 2016, receiving initial proceeds of $82.3 M Expect to receive additional proceeds of ~$6 M before end of Q2

Some of proceeds used to fully paid down $43.4 M of term loan debt outstanding under prior credit facility

• $77 M of cash on hand at the end of Q1; less than $1 M of debt

• Executed new five-year $325 million revolving credit facility in Q1 2016

• Paid $4.3 M for dividends; recently declared $0.07 per share dividend for Q2

• Funded share repurchases of $16.3 M in Q1 2016, compared to $10.6 M for full-year 2015

Aggregate remaining authorization $53M (~ 6% of market capitalization)

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Financial Strength and Flexibility *

* Dollar amounts as of or for the period ending 3/31/2016

• Municipal markets remain solid, particularly within SSG Benefiting from new products introduced in recent years

• Industrial markets continue to be impacted by oil and gas softness

• Aggressively undertaking cost saving actions in response Cost savings not intended to jeopardize future long-term

growth plans

• Strong balance sheet helps us to navigate headwinds and pursue growth opportunities Returned $20.6 M to shareholders in quarter

• JJE acquisition anticipated to close in Q2

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CEO Remarks

Joe Johnson Equipment

Significantly expands our industrial footprint from 13 to 25 service centers throughout Canada and US

Expands our share of after-market activity

Allows capture of additional customer base

Attractive margin profile

Product offering to capture more market and respond to competition

Solid rental platform that we can leverage across North America, complementing existing Jetstream rentals

Strong municipal equipment distributor Leverage existing channel to increase industrial

coverage for our Jetstream, Guzzler and Westech products

JJE should benefit from new Canadian focus on infrastructure spend

9 * Estimated % of JJE revenues based on unaudited financial statements prepared in accordance with ASPE.

+ Municipal markets healthy (~60% of revenue)

+ New product introductions: ParaDIGm, Water Recycler, G-Series, trailer-mounted jetter

+ Modest contribution from JJE acquisition

+ Strong balance sheet

Adjustments to include items related to acquisitions

$10-15 M in capital expenditures

Maintaining 2016 Outlook

Adjusted EPS ranging from $0.70 to $0.80 Revenue flat or better, including acquisitions

– $12-14 M reduction of operating income from lower sales and pricing related to oil and gas

– Reduced backlog with less favorable mix

– $3 M tier IV engine cost increase

– $3 M Jetstream distribution changes

– $2 M non-recurring 2015 order cancellation recovery

– ~$4 M higher hearing loss trial costs in 2H

Major Assumptions

Positive Factors Headwinds

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Income tax rate of ~36%

No further deterioration in industrial markets

Federal Signal Q1 2016 Earnings Call

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Q&A

May 3, 2016

Dennis Martin, Executive Chairman Jennifer Sherman, President & Chief Executive Officer

Brian Cooper, SVP, Chief Financial Officer

Investor Information

Stock Ticker - NYSE:FSS

Company website: federalsignal.com/investors

HEADQUARTERS

1415 West 22nd Street, Suite 1100 Oak Brook, IL 60523

INVESTOR RELATIONS CONTACTS

630-954-2000

Brian Cooper

SVP, Chief Financial Officer

BCooper@federalsignal.com

Svetlana Vinokur

VP, Treasurer and Corporate Development

SVinokur@federalsignal.com

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