Financial Performance - Net sales for the three months ended March 31, 2023, were $115,488, an increase of $16,694 or 16.9% compared to the prior year quarter[68]. - Gross profit for the same period was $23,291, up $6,844 or 41.6%, with gross profit margins expanding by 360 basis points to 20.2%[75]. - Selling and administrative expenses increased by $4,125 or 23.8%, representing 18.5% of net sales compared to 17.5% in the prior year quarter[76]. - The net loss attributable to L.B. Foster Company for the three months ended March 31, 2023, was $2,152, or $0.20 per diluted share, a decline of 37.4% from the prior year[79]. Segment Performance - The Rail, Technologies, and Services segment reported net sales of $64,384, a 1.1% increase from the prior year, with a gross profit margin of 22.2%[81]. - The Precast Concrete Products segment's net sales increased by $9,278, or 61.8%, to $24,288, with gross profit rising by $3,076, or 125.8%, to $5,521[84]. - The Steel Products and Measurement segment's net sales increased by $6,742, or 33.6%, to $26,816, with gross profit rising by $2,012, or 136.5%, to $3,486[87]. - The Rail, Technologies, and Services segment experienced a decrease in new orders of $17,664, or 19.3%, compared to the prior year period, with a backlog of $113,593, down $9,325, or 7.6%[83]. - The Steel Products and Measurement segment had an increase in new orders and backlog of $4,697, or 18.9%, and $9,220, or 18.7%, respectively[89]. - The VanHooseCo acquisition contributed $8,299, or 55.3%, of the increase in sales for the Precast Concrete Products segment, while organic sales increased by $979, or 6.5%[84]. Strategic Actions - The company executed strategic acquisitions, including Skratch for $7,402 and VanHooseCo for $52,146, enhancing its portfolio in technology and precast concrete products[70][71]. - The divestiture of the Track Components business generated cash proceeds of $7,795, while the sale of Chemtec resulted in a loss of $2,033 recorded in "Other expense (income) - net"[72][73]. - Organic growth contributed 11.5% to sales, while acquisitions added 9.3%, offset by a 3.9% decline from divestitures[74]. - The company plans to focus on organic growth initiatives and debt reduction following the sale of Chemtec, which will support its strategic transformation[80]. Financial Position - As of March 31, 2023, the Company had total debt of $80,096, down from $91,879 as of December 31, 2022, reflecting a decrease of $12,047[90]. - The Company reported net cash provided by operating activities of $6,932 for the three months ended March 31, 2023, compared to cash used in operating activities of $7,636 in the prior year[93]. - Capital expenditures for the three months ended March 31, 2023, were $699, down from $1,764 in the prior year, primarily for general plant and operational improvements[94]. - The Company had $2,639 in cash and cash equivalents as of March 31, 2023, with approximately $2,136 held in non-domestic bank accounts[99]. - The total backlog as of March 31, 2023, was $259,881, a decrease from $272,251 as of December 31, 2022[103]. Accounting and Estimates - The Condensed Consolidated Financial Statements are prepared in accordance with generally accepted accounting principles in the United States[105]. - Management's estimates regarding future uncertainties may lead to actual results differing from these estimates[105]. - A summary of critical accounting policies and estimates is included in the Annual Report on Form 10-K for the year ended December 31, 2022[105].

Financial Performance - Total net sales for the year ended December 31, 2022, were $497.5 million, a decrease of 3.8% from $513.6 million in 2021[206]. - Gross profit for 2022 was $89.6 million, representing a gross margin of 18.0%, compared to $86.3 million and a margin of 16.8% in 2021[206]. - The company recorded a net loss of $45.7 million for 2022, compared to a net income of $3.5 million in 2021, resulting in a basic loss per share of $4.25[206]. - Total comprehensive loss from continuing operations attributable to L.B. Foster Company was $47,899 thousand in 2022, a significant decline from a comprehensive income of $4,977 thousand in 2021[208]. - Cash used in continuing operating activities amounted to $10,576 thousand in 2022, compared to $810 thousand in 2021, indicating a deterioration in cash flow[213]. - The company reported a net loss attributable to L.B. Foster Company of $(44,564) for the year ended December 31, 2022, compared to a net income of $2,223 in 2021[266]. Segment Performance - In 2022, the Rail, Technologies, and Services segment accounted for 60% of total net sales, up from 58% in 2021[14]. - The Precast Concrete Products segment increased its contribution to 21% of total net sales in 2022, compared to 14% in 2021[14]. - The Steel Products and Measurement segment's share of total net sales decreased to 19% in 2022 from 28% in 2021[14]. - Segment operating profit for the Steel Products and Measurement segment was $(10,824) in 2022, compared to $(2,402) in 2021, indicating a decline in profitability[255]. Acquisitions and Divestitures - The Company acquired Skratch Enterprises Ltd. in June 2022, enhancing its capabilities in intelligent digital signage solutions[21]. - In August 2022, the Company acquired VanHooseCo Precast, expanding its market reach to commercial and residential developers in Tennessee[22]. - The Company completed the sale of its Track Components division in August 2022, focusing on strategic growth initiatives[19]. - The Company divested its Track Components business on August 1, 2022, resulting in a pre-tax loss of $467 million[250]. - The acquisition of VanHooseCo for $52,146 on August 12, 2022, contributed net sales of $17,788 and operating profit of $1,555 from August 12, 2022, to December 31, 2022[260][264]. Assets and Liabilities - Total current assets rose to $205.7 million in 2022, up from $179.5 million in 2021, driven by an increase in accounts receivable[203]. - Total liabilities increased significantly to $227.7 million in 2022 from $164.0 million in 2021, primarily due to a rise in long-term debt[203]. - The total long-term debt as of December 31, 2022, was $91,879 million, significantly up from $31,251 million in 2021, reflecting a 194.5% increase[295]. - The total stockholders' equity decreased to $137.6 million in 2022 from $183.6 million in 2021, reflecting the net loss and changes in retained earnings[203]. Cash Flow and Expenditures - The company reported capital expenditures on property, plant, and equipment of $7,633 thousand in 2022, up from $4,620 thousand in 2021[213]. - The company recognized total segment expenditures for long-lived assets of $4,318 in 2022, compared to $3,600 in 2021, showing increased capital investment[256]. - The company reported a depreciation expense of $8,635 million for the year ended December 31, 2022, compared to $8,051 million in 2021, representing a 7.2% increase[287]. Employee and Workforce - The Company had a total of 1,131 employees as of December 31, 2022, with 867 located in the U.S., 43 in Canada, 215 in Europe, and 6 in other locations[49]. - The Company has implemented initiatives to advance diversity and inclusion, including changes to recruitment and employee training[40]. - The Company has a workforce that includes approximately 44 union-represented hourly production workers[49]. Environmental, Health, and Safety (EHS) - The Company aims to create a culture of environmental, health, safety, and sustainability excellence, striving to exceed EHS regulations[42]. - The Company emphasizes continual improvement in its EHSS performance, particularly in pollution prevention and reducing environmental impact[42]. - The Company has 10 locations/businesses throughout North America and Europe that are compliant with ISO 14001:2015 and ISO 45001:2018 standards[42]. Tax and Deferred Assets - The total income tax expense for 2022 was $36,681,000, with an effective tax rate of (407.7)% due to significant deferred tax adjustments[311]. - Deferred tax assets totaled $51,016,000 as of December 31, 2022, with a valuation allowance of $40,601,000, indicating a significant portion is not expected to be realized[312]. - The company has a federal Net Operating Loss (NOL) carryforward of $96,034,000, which may be carried forward indefinitely but is limited to 80% of taxable income annually[314]. Stock and Compensation - The Company has not granted any stock options under the Omnibus Plan or Equity and Incentive Plan in 2022 and 2021, resulting in no stock-based compensation expense for those years[324]. - The total compensation expense related to non-employee directors' restricted stock awards was approximately $697,000 in 2022, up from $650,000 in 2021[327]. - The Company granted 125,582 restricted stock awards in 2022, with 86,613 shares vesting during the same period[330].

Financial Data and Key Metrics Changes - In Q4 2022, revenues increased by 21.4% year-over-year, reaching $137.2 million, driven by strong organic growth and strategic transformation actions [13][23] - Adjusted EBITDA for Q4 was $7.5 million, representing a 132.6% increase year-over-year, with an adjusted EBITDA margin of 5.5% [14][26] - The reported net loss for the quarter was $43.9 million, primarily due to noncash items including $8 million in intangible asset impairment charges [16][24] Business Line Data and Key Metrics Changes - Precast Concrete revenue increased by 81.3% year-over-year, with organic sales up 24.8% and the VanHooseCo acquisition contributing significantly [27] - Steel Products and Measurement segment revenues increased by 3.6% year-over-year, with organic sales up 11% [28] - The Rail segment saw a revenue increase of 10.2% year-over-year, with gross margins expanding by 350 basis points [39] Market Data and Key Metrics Changes - Fourth quarter orders totaled $137.8 million, up 44.8% year-over-year, with a 32.1% organic increase and 15.4% from acquisitions [25] - The backlog increased by approximately 29.5% year-over-year, remaining near record levels at $272 million [56] Company Strategy and Development Direction - The company is focused on a strategic transformation initiated in late 2021, with a goal of becoming a technology-focused, high-growth infrastructure solutions provider [19][49] - A three-year $15 million stock buyback program was authorized, reflecting confidence in future cash flows and profitability improvements [20][36] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the impact of government infrastructure programs on demand, despite recessionary risks in industrial markets [47][76] - The company expects 2023 sales to range between $540 million and $570 million, indicating year-over-year growth of 8.5% to 14.6% [48] Other Important Information - The company completed three acquisitions and two divestitures in 2022 as part of its strategic transformation plan [10] - Free cash flow generated in the quarter reduced net debt by $5 million, highlighting effective capital redeployment [30] Q&A Session Summary Question: What do you think a good intermediate term target is for organic growth of the business right now? - Management indicated a focus on Rail Technologies and Precast for organic growth, with high single-digit growth expected [50][51] Question: Can you talk about the recent announcement of the FUCHS partnership? - The partnership aims to enhance R&D and expand product reach in Western Europe, with ongoing collaboration expected to yield innovative solutions [68] Question: Are you seeing an uptick in new orders in rail after the Ohio train derailment? - Management noted robust bidding activity in the rail space, independent of specific incidents, indicating strong market demand [74] Question: How much of the increase in guidance for 2023 is related to the Infrastructure Bill? - Management expects some benefits from the Infrastructure Bill to materialize, particularly in the latter half of 2023, but emphasized the strength of the current backlog [75][76]

Financial Performance - Q3 2022 net sales were $130 million, consistent with the previous year[17] - Adjusted EBITDA for Q3 2022 increased by 111% year-over-year to $93 million[5] - The company's backlog as of September 30, 2022, was $2728 million, a 177% increase compared to the previous year[4, 42] - Net debt totaled $94 million, up $679 million year-over-year due to acquisition-related activity[35] Segment Results - Rail, Technologies, and Services segment sales increased by 46% to $774 million in Q3 2022[23, 64] - Precast Concrete Products segment sales increased by 606% to $289 million in Q3 2022[25, 64] - Steel Products and Measurement segment sales decreased by 376% to $238 million in Q3 2022, primarily due to the sale of the Piling business[28, 64] Strategic Initiatives - The company completed the acquisition of VanHooseCo Precast LLC for $522 million[16] - The company completed the sale of the Track Components business for $78 million[16] - The company completed the acquisition of Intelligent Video Ltd and Skratch for $88 million[15]

Financial Performance - Net sales for Q3 2022 were $130,015, unchanged from the prior year, with an 8.7% organic increase and a 5.5% increase from acquisitions, offset by a 14.3% decrease from divestitures[113]. - Gross profit for Q3 2022 was $23,096, a 3.7% increase from the prior year, primarily driven by a 107.8% increase in the Precast Concrete Product segment due to the VanHooseCo acquisition[114]. - Selling and administrative expenses increased by $2,562, or 12.8%, from the prior year, with expenses as a percentage of net sales rising to 17.4% from 15.4%[115]. - The net loss for Q3 2022 was $2,077, or $0.20 per diluted share, a decrease of $4,419 from the prior year, primarily due to a $3,956 expense related to the Crossrail project settlement[120]. - Total net sales for the quarter ended September 30, 2022, were $130,015, a slight decrease of 0.0% compared to $130,053 in the prior year[124]. - Total net sales for the nine months ended September 30, 2022, decreased by 10.1% to $360,324 million compared to $400,655 million in 2021[1]. - The Rail, Technologies, and Services segment reported a 2.7% decrease in net sales to $222,857 million, with a gross profit decline of 4.2% to $41,564 million[2]. - Steel Products and Measurement segment sales fell by 42.1% to $69,990 million, with gross profit decreasing by 33.3% to $9,834 million, primarily due to the divestiture of the Piling Products business[4]. Backlog and Orders - The consolidated backlog as of September 30, 2022, was $272,777, an increase of $41,051, or 17.7%, from the prior year[121]. - New orders for Q3 2022 decreased by $1,592, or 1.1%, with a 5.0% organic increase and a 5.6% increase from acquisitions, offset by an 11.7% decrease from divestitures[121]. - New orders in the Rail, Technologies, and Services segment decreased by $27,447, or 32.7%, compared to the prior year, with a backlog of $108,864[129]. - New orders in the Precast Concrete Products segment increased by 31.3% compared to the prior year, with a backlog of $86,612, reflecting strong demand[134]. - The total backlog as of September 30, 2022, increased to $272,777 million from $210,189 million in 2021, reflecting growth across all segments[5]. Tax and Expenses - The effective income tax rate for Q3 2022 was 7.7%, down from 23.2% in the prior year, influenced by a discrete income tax expense of $330 related to the divestiture of the Track Components business[119]. - Selling and administrative expenses increased by 2.5% to $59,310 million, contributing to the operating loss of $927 million[7]. Acquisitions and Divestitures - The Company completed the acquisition of VanHooseCo for $52,203 and the acquisition of Skratch Enterprises Ltd. for $7,402, while divesting the Track Components business for $7,795[110][111][112]. - The Company aims to transform into a technology-focused, high-growth infrastructure solutions provider, as evidenced by recent acquisitions and divestitures[121]. - The company acquired Skratch for $7,402 and VanHooseCo for $52,203, resulting in a cash outflow of $58,561 during the nine months ended September 30, 2022[164][165]. - The company had an increase in outstanding debt of $69,155 for the nine months ended September 30, 2022, largely due to acquisitions[165]. Cash Flow and Debt - The company's total debt was $98,919 million as of September 30, 2022, primarily comprised of borrowings under its revolving credit facility[10]. - As of September 30, 2022, the company had $4,943 in cash and cash equivalents, with total available funding capacity of $35,616[166][167]. - For the nine months ended September 30, 2022, net cash used in continuing operating activities was $18,836, compared to $6,810 in the prior year[161][162]. - Days sales outstanding as of September 30, 2022, was 47 days, indicating a high-quality receivables portfolio[163]. - The company had $30,673 of net availability under its revolving credit facility as of September 30, 2022[167]. - The company amended its Credit Agreement on August 12, 2022, to accommodate the acquisition of VanHooseCo and modify certain financial covenants[168].

Financial Performance - Q2 2022 sales were $131.5 million, a decrease of $23 million or 14.9% year-over-year[19, 51] - Adjusted EBITDA for Q2 2022 was $6.1 million, down $2.2 million or 26.5% year-over-year[19, 51] - Gross profit margin improved by 80 bps to 17.7% in Q2 2022[19] - Net debt totaled $42.4 million as of June 30, 2022, up $9.3 million year-over-year[31] - The adjusted net leverage ratio was 2.8x as of June 30, 2022[31, 71] Orders and Backlog - New orders for Q2 2022 were $141.4 million, an increase of $2.9 million or 2.1% year-over-year[19, 56] - Excluding the Piling Products business, Q2 orders increased by $28 million or 24.7% year-over-year[19] - Backlog as of June 30, 2022, was $250.8 million, a decrease of $2.4 million or 0.9% year-over-year[19, 36] - Excluding the Piling Products business, backlog increased by $31.3 million or 14.3% year-over-year[19] Strategic Initiatives - Completed the acquisition of Skratch Enterprises Ltd and Intelligent Video Ltd, with combined annual revenue of approximately $8 million and EBITDA of approximately $1.8 million[15] - Completed the sale of the Canadian-based track components business, with annual revenue of approximately $14 million and EBITDA of approximately $1.5 million[16]

Financial Data and Key Metrics Changes - The company's second quarter sales were $131.5 million, down $23 million or 14.9% from Q2 last year, but adjusted for the Piling divestiture, sales declined only 0.7% year-over-year [21][22] - Gross profit margins improved by 80 basis points on a reported basis due to the favorable mix from the Piling divestiture, despite higher raw material and labor costs [22] - Adjusted EBITDA in Q2 declined $2.2 million to $6.1 million, with $1.1 million attributed to the Piling divestiture [25] Business Line Data and Key Metrics Changes - Rail segment revenue decreased $7 million year-over-year, primarily due to lower volumes and timing of orders, but gross margins increased 30 basis points due to higher volume in the Friction Management business unit [27] - Precast Concrete Products segment revenue increased $3.5 million or 17.6% year-over-year, but gross margins were down 530 basis points due to higher raw material and labor costs [28] - Steel Products and Measurement revenues increased $2.5 million or 10.7% year-over-year, with gross profit margins improving 140 basis points due to improved volumes and pricing [30] Market Data and Key Metrics Changes - The company's backlog stood at $251 million at quarter end, a five-year high, with order intake levels up 25% compared to last year [12][26] - Orders in the Precast Concrete products segment totaled $22.9 million, up over 39% versus last year [39] - The consolidated backlog reflects a 14% increase compared to the same time last year, excluding the Piling divestiture [40] Company Strategy and Development Direction - The company is focused on transforming its portfolio from slower growth, commodity-like offerings to higher-growth, technology-focused solutions, as evidenced by recent acquisitions [15][17] - The acquisition of Skratch and Intelligent Video is aimed at expanding into technology-based solutions and adjacent markets in the UK and Western Europe [16][17] - The divestiture of the Rail Products' track components business is part of a strategy to enhance shareholder value and focus on higher-margin businesses [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving demand over time, despite current operating conditions causing delays in project identification and commissioning [42][43] - The company does not expect significant revenue from the Infrastructure Investment and Jobs Act in 2022, with expectations for revenue to materialize in 2023 and beyond [44] - Management acknowledged challenges in improving operating margins but remains focused on executing the strategy and managing through headwinds [46][47] Other Important Information - The company generated approximately $11.9 million in cash after the end of the second quarter from the track components divestiture and a federal income tax refund, improving its leverage ratio [37] - The company is maintaining a conservative approach to debt levels and capital allocation as it transitions to funding growth initiatives [37] Q&A Session Summary Question: Long-term targets for gross margins by segment - Management acknowledged that margins are not where they want to be but emphasized efforts to improve pricing and manage costs, particularly in the Rail and Precast segments [52][54] Question: Project delivery timing and market conditions - Management noted that while project delivery has improved, delays are primarily due to site availability rather than production issues, with expectations for continued improvement [56][57] Question: Impact of acquisitions on gross margin - Management indicated that the acquisitions will allow for better control over the supply chain and pricing, potentially leading to margin expansion over time [66][69] Question: New orders and market activity in Q3 - Management reported a record backlog and high bidding activity, indicating a positive outlook for continued order intake despite recessionary concerns [70] Question: Use of coatings and measurement in other industries - Management highlighted ongoing efforts to explore adjacent markets for coatings and measurement applications, with some positive signs of activity in carbon sequestration and related fields [74]

PART I. Financial Information [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited Condensed Consolidated Financial Statements for the quarterly period ended June 30, 2022, encompassing balance sheets, income statements, cash flows, and equity, with detailed explanatory notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $202,878 | $179,479 | | **Total Assets** | **$365,422** | **$342,595** | | **Total Current Liabilities** | $96,604 | $86,194 | | **Long-term Debt** | $49,222 | $31,153 | | **Total Liabilities** | $184,383 | $158,985 | | **Total Stockholders' Equity** | $181,039 | $183,610 | | **Total Liabilities and Stockholders' Equity** | **$365,422** | **$342,595** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | **Total net sales** | $131,515 | $154,522 | $230,309 | $270,602 | | **Gross profit** | $23,293 | $26,161 | $39,740 | $44,991 | | **Operating profit** | $2,480 | $4,924 | $193 | $4,263 | | **Net income attributable to L.B. Foster** | $2,010 | $2,876 | $444 | $1,618 | | **Diluted earnings per common share** | $0.18 | $0.27 | $0.04 | $0.15 | [Condensed Consolidated Statements of Comprehensive (Loss) Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income) - For the three months ended June 30, 2022, the company reported a total comprehensive loss of **($1,515) thousand**, a significant shift from a comprehensive income of **$3,620 thousand** in the same period of 2021. This change was primarily driven by a negative foreign currency translation adjustment of **($3,688) thousand**[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(13,382) | $6,842 | | Net cash used in investing activities | $(7,328) | $(2,248) | | Net cash provided by (used in) financing activities | $18,476 | $(7,918) | | **Net decrease in cash and cash equivalents** | **$(2,711)** | **$(3,424)** | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) - Total stockholders' equity decreased from **$183,610 thousand** at December 31, 2021, to **$181,039 thousand** at June 30, 2022. The decrease was primarily due to a comprehensive loss, which included a significant negative foreign currency translation adjustment, partially offset by net income[20](index=20&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - Effective **Q4 2021**, the company reclassified its reporting segments into three new categories: **Rail, Technologies, and Services; Precast Concrete Products; and Steel Products and Measurement**. Prior period information has been revised to reflect this change[23](index=23&type=chunk) - On **June 21, 2022**, the Company acquired **Skratch Enterprises Ltd.** for **$7,402 thousand**, resulting in an increase of **$5,343 thousand** in goodwill. Skratch is included in the **Rail, Technologies, and Services** segment[38](index=38&type=chunk)[39](index=39&type=chunk) - As of **June 30, 2022**, the company had approximately **$250,845 thousand** in backlog (remaining performance obligations)[37](index=37&type=chunk) - On **August 1, 2022**, the Company divested its rail spikes and anchors track components business in Canada for expected cash proceeds of **$7,795 thousand**[94](index=94&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting a decrease in net sales and net income, improved gross profit margin, and strategic portfolio adjustments, alongside changes in liquidity and cash flow [General Overview and Business Update](index=28&type=section&id=General%20Overview%20and%20Business%20Update) - On **June 21, 2022**, the Company acquired **Skratch Enterprises Ltd.**, a digital system integration leader, for **$7,402 thousand**. Skratch is reported within the **Rail, Technologies, and Services** segment[99](index=99&type=chunk) - **Q2 2022** net sales decreased by **14.9%** to **$131.5 million** compared to the prior year, with the divested Piling Products division accounting for a **$22.1 million** decline[101](index=101&type=chunk) - Consolidated gross profit margin increased by **80 basis points** to **17.7%** in **Q2 2022**, reflecting progress on pricing initiatives and favorable product mix, despite inflationary pressures[102](index=102&type=chunk) - The company's consolidated backlog was **$250.8 million** as of **June 30, 2022**, a slight decrease of **0.9%** from the prior year, but this includes a **$33.7 million** decline from the divested Piling Products division[107](index=107&type=chunk) [Results of the Quarter](index=31&type=section&id=Results%20of%20the%20Quarter) Q2 2022 vs Q2 2021 Performance (in thousands) | Metric | Q2 2022 | Q2 2021 | % Change | | :--- | :--- | :--- | :--- | | **Total net sales** | $131,515 | $154,522 | (14.9%) | | **Total gross profit** | $23,293 | $26,161 | (11.0%) | | **Operating profit** | $2,480 | $4,924 | (49.6%) | | **Net income attributable to L.B. Foster** | $2,010 | $2,876 | (30.1%) | Q2 2022 Segment Net Sales (in thousands) | Segment | Q2 2022 | Q2 2021 | % Change | | :--- | :--- | :--- | :--- | | Rail, Technologies, and Services | $81,797 | $88,782 | (7.9%) | | Precast Concrete Products | $23,611 | $20,073 | 17.6% | | Steel Products and Measurement | $26,107 | $45,667 | (42.8%) | [Six Month Results](index=34&type=section&id=Six%20Month%20Results) H1 2022 vs H1 2021 Performance (in thousands) | Metric | H1 2022 | H1 2021 | % Change | | :--- | :--- | :--- | :--- | | **Total net sales** | $230,309 | $270,602 | (14.9%) | | **Total gross profit** | $39,740 | $44,991 | (11.7%) | | **Operating profit** | $193 | $4,263 | (95.5%) | | **Net income attributable to L.B. Foster** | $444 | $1,618 | (72.6%) | [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) - The company's principal sources of liquidity are cash on hand, cash from operations, and its **$130 million** revolving credit facility[147](index=147&type=chunk) Available Funding Capacity as of June 30, 2022 (in thousands) | Source | Amount | | :--- | :--- | | Cash and cash equivalents | $7,661 | | Net availability under revolving credit facility | $80,123 | | **Total available funding capacity** | **$87,784** | - For the six months ended **June 30, 2022**, cash used in operating activities was **$13,382 thousand**, a significant decrease from the **$6,842 thousand** provided by operating activities in the same period of **2021**, primarily due to changes in working capital[149](index=149&type=chunk)[150](index=150&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, L.B. Foster Company is not required to provide the information requested under this item - This item is not applicable to a smaller reporting company[159](index=159&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, conducted an evaluation of the company's disclosure controls and procedures as of June 30, 2022, and concluded that they were effective. There were no material changes to the company's internal control over financial reporting during the quarter - Based on an evaluation as of **June 30, 2022**, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective[160](index=160&type=chunk) - No changes occurred in the company's internal control over financial reporting during the six months ended **June 30, 2022**, that have materially affected, or are reasonably likely to materially affect, these controls[161](index=161&type=chunk) PART II. Other Information [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company refers to Note 15 for details on legal proceedings, including the UPRR concrete tie settlement and environmental liabilities, with management expecting no material adverse financial impact - For information on legal proceedings, the report refers to **Note 15** of the Notes to Condensed Consolidated Financial Statements[164](index=164&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, L.B. Foster Company is not required to provide the information requested under this item - This item is not applicable to a smaller reporting company[165](index=165&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the three months ended June 30, 2022, the company withheld a total of 274 shares at an average price of $13.00 per share to satisfy tax obligations upon the vesting of employee restricted stock. These transactions were not part of a publicly announced repurchase plan Equity Security Purchases (Q2 2022) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2022 | — | $— | | May 2022 | 274 | $13.00 | | June 2022 | — | $— | | **Total** | **274** | **$13.00** | - The shares purchased reflect shares withheld by the Company to pay taxes upon the vesting of restricted stock[166](index=166&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section provides an index of the exhibits filed with the Form 10-Q. Key exhibits include the 2022 Equity and Incentive Compensation Plan, descriptions of other incentive plans, and certifications by the CEO and CFO as required by the Sarbanes-Oxley Act - The Exhibit Index lists several documents filed with the report, including: - **2022 Equity and Incentive Compensation Plan (10.1)** - **Strategy Transformation Plan Description (10.2)** - **CEO and CFO Certifications under Sarbanes-Oxley Sections 302 and 906 (31.1, 31.2, 32.0)** - **XBRL Interactive Data Files (101 series)**[173](index=173&type=chunk)

Financial Performance - Q1 2022 sales were $98.8 million, a decrease of $17.3 million or 14.9% year-over-year[45] - Gross profit was $16.4 million with a gross profit margin of 16.6%, a 40 bps increase year-over-year[45] - Net loss was $1.6 million, compared to a net loss of $1.3 million in the prior year quarter[45] - EBITDA was $1.7 million, down $1.1 million or 39.7% from $2.7 million in Q1 2021[45] Segment Results - Rail, Technologies, and Services sales decreased by $2.5 million or 3.8% to $63.7 million[51] - Precast Concrete Products sales increased by $2.3 million or 18.4% to $15.0 million[51] - Steel Products and Measurement sales increased by $3.7 million or 22.7% to $20.1 million, excluding the impact of the Piling Products business[51] Orders and Backlog - New orders totaled $135.4 million, a decrease of $0.2 million or 0.2% year-over-year[48] - Excluding Piling Products, new orders increased by $20.4 million or 17.7%[48] - Consolidated backlog was $244.6 million, a decrease of $27.3 million or 10.0% year-over-year[49] - Excluding Piling Products, backlog increased by $4.7 million or 1.9%[49] Liquidity - Net debt totaled $29.4 million, down $2.4 million year-over-year[22] - Adjusted net leverage ratio was 1.7x[22] - Total available funding capacity was $100.1 million[22]

Financial Data and Key Metrics Changes - First-quarter sales were $98.8 million, down $17.3 million or 14.9% from Q1 last year, but adjusted for the Piling divestiture, sales were up 3.7% year-over-year [7][8] - Gross profit was down in Q1 due to the piling divestiture, raw material and labor inflation, and supply chain disruptions [7][8] - EBITDA in Q1 declined $1.1 million to $1.7 million, with $300,000 attributed to the Piling divestiture [8] - Total net debt was $29.4 million at quarter-end, down $2.4 million from last year [12] Business Line Data and Key Metrics Changes - Rail segment revenue decreased $2.5 million year-over-year, but gross margins increased 30 basis points due to higher volume in more profitable business units [9] - Precast Concrete Products segment revenues increased $2 million or 18.4% year-over-year, but gross margins were down 330 basis points due to higher input costs [10] - Steel Products and Measurement revenues increased by $4 million or 22.7% year-over-year, but gross profit margins declined 690 basis points due to higher costs [11] Market Data and Key Metrics Changes - Order intake levels, excluding the Piling business, increased 17.7% over the prior-year quarter and 42.2% sequentially, resulting in a backlog of $245 million, an increase of 3.7% compared to the prior-year quarter [5][6] - The precast segment's backlog ended at $72 million, an uptick from the previous year [22] Company Strategy and Development Direction - The company remains focused on leveraging key growth platforms, particularly in Precast Concrete and Rail Technology services [6] - The company anticipates a sequential revenue increase of at least 25% in Q2, driven by improving order intake and backlog [5][15] - Addressing margin erosion is a top priority, with aggressive pricing actions and inventory management to mitigate supply chain disruptions [16] Management's Comments on Operating Environment and Future Outlook - The operating environment remains challenging due to inflationary pressures and supply chain disruptions, but margins are stabilizing [6] - The company is optimistic about improving demand due to significant government funding for infrastructure projects, although meaningful revenue from the Infrastructure Investment and Jobs Act is not expected until 2023 [15][16] Other Important Information - The company has a comfortable leverage ratio around two times, with expectations of $8.5 million in federal income tax refunds and $90 million in federal net operating loss carryforwards [12] Q&A Session Summary Question: Comments on new orders in the precast segment - The company noted a slight decline in new orders compared to a large order in Q1 2021, but remains optimistic about the precast business with a backlog of $72 million [22] Question: Backlog for coatings and measurement - The backlog for coatings and measurement stands at $49 million, flat year-over-year, with increased bidding activity noted [23]