Core Viewpoint - L.B. Foster Company has successfully amended its credit agreement, enhancing its financial flexibility and capacity to support growth initiatives in the rail and infrastructure markets [1][2]. Financial Agreement Details - The company entered into a Fifth Amended and Restated Credit Agreement on June 27, 2025, extending the facility maturity date to June 27, 2030 [1]. - Borrowing capacity increased from $130 million to $150 million, with an additional $60 million incremental loan feature available [5]. - The revised terms include improved pricing and a more accommodating covenant package, reducing restrictions on corporate finance transactions [1][5]. Strategic Implications - The favorable terms of the credit agreement are expected to lower overall financing costs and provide greater flexibility for investments in growth programs and corporate finance initiatives [2][5]. - The company remains optimistic about opportunities in its core growth platforms, specifically Rail Technologies and Precast Concrete [2]. Company Background - Founded in 1902, L.B. Foster Company is a global technology solutions provider for the rail and infrastructure markets, with a focus on innovative engineering and product development [3]. - The company operates in North America, South America, Europe, and Asia, addressing safety, reliability, and performance needs for its customers [3].

Financial Performance & Guidance - L B Foster's total 2024 sales were $531 million, with Rail Infrastructure contributing $327 million and Infrastructure Solutions $204 million[14] - The company projects 2025 revenue between $540 million and $580 million, and adjusted EBITDA between $42 million and $48 million[16] - Free cash flow for 2025 is guided between $20 million and $30 million, with capital expenditure around 2% of sales[16] - The company's gross profit margin increased from 168% in 2021 to 222% in 2024[20] Strategic Initiatives & Portfolio Management - Since 2021, L B Foster has completed nine portfolio actions, including four acquisitions and five divestitures/product line exits[30] - The company repurchased 300302 shares of common stock for $68 million, representing 27% of outstanding shares in 2024[104] - A new $40 million stock buyback program was authorized through February 2028, representing approximately 14% of the current market value[105] Segment Performance & Market Outlook - Rail Products accounted for $208 million of the $327 million in Rail sales in 2024[44] - Infrastructure project starts increased approximately 10% year-over-year over the last twelve months[177] - The company's backlog was $1859 million with an improved profitability mix[102]

Company Overview - L B Foster Company, founded in 1902, is headquartered in Pittsburgh, Pennsylvania, with locations across North America, South America, Europe, and Asia[17] - The company is a critical infrastructure solutions provider focused on growing its innovative, technology-based offerings[17] - The company's 2025 revenue guidance is between $540 million and $580 million, with adjusted EBITDA between $42 million and $48 million[15] Financial Performance and Metrics - TTM Q1 2025 sales by segment: Rail Infrastructure at $298 million and Infrastructure Solutions at $206 million[13] - The company's 2024 sales by region: United States at $455 million, United Kingdom at $44 million, and Canada at $22 million[14] - The company's TTM Q1 2025 adjusted EBITDA is $29 million[15] - The company's TTM Q1 2025 book-to-bill ratio is 104:100[82] Strategic Initiatives and Capital Allocation - The company is targeting a gross leverage ratio between approximately 10x and 20x and is implementing a new $40 million share repurchase program authorized through February 2028[96, 97] - The company is targeting approximately 20% of sales for maintenance and to support organic growth initiatives[96] - The company's backlog is up 67% year-over-year to $2372 million[71]

Summary of L.B. Foster Company (FSTR) FY Conference Call Company Overview - L.B. Foster Company is a technology-based solutions provider for the rail and infrastructure markets, primarily focused on North America with some presence in the UK [2][4] - The company has been in operation for over 120 years, starting as a recycled rail business [4] Business Segments - The company operates in two main segments: Rail Technologies and Services, and Infrastructure Solutions [8] - Rail Technologies revenue is approximately $300 million, while Infrastructure Solutions revenue is about $206 million, totaling over $500 million in revenue [8] Strategic Goals and Performance - Since 2021, the company has undergone a strategic reassessment to improve sales growth, margin expansion, and cash generation [6][7] - Goals set in 2021 aimed for a gross margin of 22% to 23% by 2025, which is currently being achieved [9] - The company has seen a 79% growth in its growth platform businesses over the last three years [17] Financial Performance - Sales increased from $514 million in 2021 to $531 million in 2024, with gross margins improving from 16.8% to 22% [18] - EBITDA has grown to 6.3% of sales, indicating a capital-light business model [20] - Free cash flow generated was $31 million in 2023 and 2024, with expectations for improvement [24] Market Opportunities - The friction management business has significant growth potential, currently only treating 5% of the North American rail network [12] - The precast concrete products segment is identified as a key growth area, with a market that is somewhat fragmented [13][14] - Government funding programs, such as the CRISI grant, are expected to support infrastructure investment, providing a long-term tailwind for the business [31][33] Challenges and Risks - The pipeline coating business has been softer due to a lack of investment in pipelines, but improvements are anticipated with current macro trends [15] - The company faces seasonality in its business, with revenues typically stronger in the second and third quarters [22] Capital Allocation and Shareholder Value - The company has a disciplined approach to capital allocation, focusing on managing debt leverage and investing in growth platforms [28][30] - A stock buyback program has repurchased 5.5% of outstanding shares since its initiation in 2023 [25] Conclusion - L.B. Foster has made significant strides in improving its profitability and positioning itself for future growth, particularly in infrastructure and technology-oriented offerings [36] - The company is viewed as an attractive investment opportunity for those interested in infrastructure spending in the U.S. [40]

Company Announcement - L.B. Foster Company will present at the Three-Part Advisors' East Coast IDEAS Investor Conference on June 12, 2025, at 2:45 PM ET in New York [1] - The presentation will be available via webcast on both the conference host's website and L.B. Foster's Investor Relations page, with a video replay accessible for 90 days [2] Company Overview - Founded in 1902, L.B. Foster Company is a global technology solutions provider for the rail and infrastructure markets [3] - The company focuses on innovative engineering and product development solutions to meet safety, reliability, and performance needs [3] - L.B. Foster maintains locations across North America, South America, Europe, and Asia [3]

PART I. Financial Information [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Q1 2025 net loss of **$2.1 million**, reversing Q1 2024's **$4.4 million** net income, driven by a **21.3%** sales decrease [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$342.8 million**, liabilities rose to **$171.2 million** driven by long-term debt, and equity decreased Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $164,316 | $161,605 | | **Total Assets** | **$342,826** | **$334,550** | | **Total Current Liabilities** | $63,865 | $88,296 | | **Long-Term Debt** | $82,347 | $46,773 | | **Total Liabilities** | $171,231 | $155,536 | | **Total Stockholders' Equity** | $171,595 | $179,014 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 net loss of **$2.1 million** (or **$0.20** per share) reversed Q1 2024's **$4.4 million** net income, due to **21.3%** sales decline Q1 2025 vs. Q1 2024 Performance (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Net Sales | $97,792 | $124,320 | | Gross Profit | $20,151 | $26,176 | | Operating (Loss) Income | $(1,923) | $5,566 | | Net (Loss) Income Attributable to L.B. Foster | $(2,110) | $4,436 | | Diluted (Loss) Earnings Per Share | $(0.20) | $0.40 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities increased to **$26.1 million** in Q1 2025, while financing activities provided **$28.8 million** Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(26,136) | $(21,444) | | Net cash (used in) provided by investing activities | $(2,575) | $789 | | Net cash provided by financing activities | $28,820 | $21,298 | | **Net increase in cash and cash equivalents** | **$158** | **$588** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail two segments, Rail and Infrastructure, with Rail sales declining; backlog at **$237.2 million**; contingent liability for Portland Harbor - The company operates under two reportable segments: Rail, Technologies, and Services ('Rail') and Infrastructure Solutions ('Infrastructure')[24](index=24&type=chunk)[26](index=26&type=chunk) - As of March 31, 2025, the company's remaining performance obligations (backlog) totaled approximately **$237.2 million**[39](index=39&type=chunk) - The company is a potentially responsible party (PRP) for the Portland Harbor Superfund Site cleanup, with environmental reserves of approximately **$1.8 million** as of March 31, 2025[68](index=68&type=chunk) - The Settlement Agreement with Union Pacific Railroad (UPRR) has been fully paid as of December 31, 2024, and all obligations have been satisfied[66](index=66&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q1 2025 net loss of **$2.1 million** due to **21.3%** sales decrease, mainly in Rail; **$47.2 million** available credit; backlog at **$237.2 million** [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q1 2025 net sales fell **21.3%** to **$97.8 million**, resulting in a **$1.9 million** operating loss and **$2.1 million** net loss Q1 2025 vs. Q1 2024 Summary (in thousands) | Metric | Q1 2025 | Q1 2024 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Net sales | $97,792 | $124,320 | $(26,528) | (21.3)% | | Gross profit | $20,151 | $26,176 | $(6,025) | (23.0)% | | Gross profit margin | 20.6% | 21.1% | - | (50) bps | | Operating (loss) income | $(1,923) | $5,566 | $(7,489) | - | | Net (loss) income | $(2,110) | $4,436 | $(6,546) | - | - Selling and administrative expenses decreased by **$1.9 million** (**8.4%**), primarily due to lower personnel and professional services costs[80](index=80&type=chunk) [Segment Analysis](index=25&type=section&id=Segment%20Analysis) Rail segment sales dropped **34.6%** to **$54.0 million**, while Infrastructure sales grew **5.0%** to **$43.8 million**, narrowing its operating loss Rail, Technologies, and Services Segment Performance (in thousands) | Metric | Q1 2025 | Q1 2024 | Change % | | :--- | :--- | :--- | :--- | | Net sales | $54,015 | $82,623 | (34.6)% | | Segment operating income | $144 | $6,778 | (97.9)% | - The Rail segment's sales decrease was primarily due to a **$23.7 million** (**44.7%**) decline in the Rail Products business unit, attributed to the timing of large orders and an exceptionally strong prior year[84](index=84&type=chunk) Infrastructure Solutions Segment Performance (in thousands) | Metric | Q1 2025 | Q1 2024 | Change % | | :--- | :--- | :--- | :--- | | Net sales | $43,777 | $41,697 | 5.0% | | Segment operating loss | $(444) | $(1,388) | (68.0)% | - The Infrastructure segment's sales increase was driven by the Precast Concrete Products business unit, which grew by **$7.1 million** (**33.7%**)[88](index=88&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity from cash, operations, and **$130 million** credit facility with **$47.2 million** available; total debt increased; **$40 million** share repurchase authorized Available Funding Capacity as of March 31, 2025 (in thousands) | Source | Amount | | :--- | :--- | | Cash and cash equivalents | $2,612 | | Net availability under the revolving credit facility | $47,178 | | **Total available funding capacity** | **$49,790** | - In Q1 2025, the company repurchased **168,911** shares for **$4.3 million** under its authorized programs[103](index=103&type=chunk) - On March 3, 2025, the Board approved a new share repurchase authorization of up to **$40 million** through February 29, 2028[102](index=102&type=chunk) [Backlog](index=29&type=section&id=Backlog) Total company backlog increased **6.7%** year-over-year to **$237.2 million**, with both Rail and Infrastructure segments showing growth Backlog by Segment (in thousands) | Segment | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Rail, Technologies, and Services | $91,724 | $86,038 | | Infrastructure Solutions | $145,491 | $136,223 | | **Total backlog** | **$237,215** | **$222,261** | [Quantitative and Qualitative Disclosures about Market Risk](index=30&type=section&id=Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This item is not applicable as the company is a smaller reporting company - This item is not applicable to a smaller reporting company[116](index=116&type=chunk) [Controls and Procedures](index=30&type=section&id=Controls%20and%20Procedures) Management concluded disclosure controls were effective; previously reported material weakness related to complex transactions has been remediated - Management concluded that the Company's disclosure controls and procedures were effective as of March 31, 2025[117](index=117&type=chunk) - The material weakness previously disclosed in 2023 and 2024 reports, related to accounting for non-recurring complex transactions, has been remediated as of March 31, 2025[118](index=118&type=chunk)[120](index=120&type=chunk) PART II. Other Information [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings is detailed in Note 13 of the Notes to Condensed Consolidated Financial Statements - For details on legal proceedings, the report refers to Note 13 of the Notes to Condensed Consolidated Financial Statements[123](index=123&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) This item is not applicable as the company is a smaller reporting company - This item is not applicable to a smaller reporting company[124](index=124&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Company repurchased **234,262** shares for **$25.32** average price; new **$40 million** repurchase program authorized through February 2028 - On March 3, 2025, the Board of Directors authorized a new stock repurchase program for up to **$40,000 thousand** of the company's common stock, effective through February 29, 2028[125](index=125&type=chunk) Share Repurchases for Q1 2025 | Period | Total Shares Purchased | Average Price Paid | Shares Purchased as Part of Program | Remaining Authorization (approx. $) | | :--- | :--- | :--- | :--- | :--- | | Jan 2025 | 59,480 | $27.36 | 57,853 | $4,299 | | Feb 2025 | 113,568 | $27.85 | 52,116 | $0 | | Mar 2025 | 61,214 | $21.08 | 58,942 | $38,846 | | **Total** | **234,262** | **$25.32** | **168,911** | **$38,846** | [Other Information](index=32&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements in Q1 2025 - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the fiscal quarter ended March 31, 2025[129](index=129&type=chunk) [Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section provides an index of all exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data

Financial Data and Key Metrics Changes - First quarter sales decreased by 21.3% compared to the previous year, primarily due to a decline in the rail segment, which saw a 34.6% drop in sales [7][11] - Adjusted EBITDA for the first quarter was $1.8 million, down $4.1 million from the previous year, reflecting lower margins from the rail sales decline [12] - Net debt increased to $79.9 million during the quarter, up $4.9 million from last year, with a gross leverage ratio of 2.5 times compared to 2.2 times last year [9][18] Business Line Data and Key Metrics Changes - Rail segment sales totaled $54 million, down 34.6%, with the rail products business unit declining by 44.7% due to lower rail distribution volume [15] - Infrastructure solutions saw a 5% increase in net sales, driven by a 33.7% increase in precast concrete sales, while steel product sales decreased by 24.4% [17] - Rail margins were down approximately 20 basis points to 22.3%, influenced by the sales volume decline and unfavorable business mix [16] Market Data and Key Metrics Changes - Order rates improved by 12.6% year-over-year, with infrastructure orders increasing by 35.3% [21] - The consolidated backlog grew by 6.7% year-over-year, with significant increases in rail products and friction management backlog [22] - The backlog for infrastructure solutions increased by $9.3 million year-over-year, including a 51.6% increase in protective coating demand [17][22] Company Strategy and Development Direction - The company is focusing on capital allocation priorities, including a $40 million stock buyback program authorized for three years [19] - There is an emphasis on organic growth initiatives and evaluating tuck-in acquisitions to enhance product line breadth and geographic coverage [20] - The company aims to maintain leverage between one and two times over the long term while managing working capital needs [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving demand levels for rail products and infrastructure solutions, anticipating a strong second quarter [24][27] - The company is closely monitoring government funding programs, expecting them to move forward due to increased infrastructure needs [27][30] - Management remains confident in achieving 2025 financial guidance despite a volatile macro environment, citing strong backlog and favorable demand drivers [29][30] Other Important Information - The company reported a typical seasonal pattern in cash flow, with expected improvements in sales volumes and profitability in the second quarter [14] - The first quarter results were characterized as softer than last year, but management expects a rebound in the following quarters [29] Q&A Session Summary Question: Impact of lower year-over-year volume on Rail Technology and Services segment - Management acknowledged the challenges but expressed confidence in a strong Q2 and Q3, with expectations for improved rail products volumes [34][35] Question: Backlog growth mix - Management highlighted a 22% growth in rail products backlog and a 71% increase in friction management backlog, indicating an improving mix [37][38] Question: Capital expenditures on rail projects - Management noted that increased capital expenditures are being observed, particularly for maintenance and additional capital work [48][49] Question: Orders and sales in pipe coating - Management indicated strong order intake and hiring efforts, expecting to reach full capacity in the second quarter [51][52] Question: New orders in infrastructure - Management reported a 35% increase in infrastructure orders, particularly in precast concrete, and expressed optimism for continued growth [56][57] Question: Potential acquisitions - Management stated that while they are not actively seeking acquisitions, they remain open to smaller tuck-in opportunities if they align with strategic goals [60][61] Question: Impact of higher steel prices - Management indicated that they are well-positioned to pass on higher steel prices to customers, similar to past experiences [70][71] Question: Sales and orders in April - Management expressed optimism about April's performance, indicating readiness to meet year-end guidance [74][75]

Core Insights - L.B. Foster reported a revenue of $97.79 million for the quarter ended March 2025, reflecting a decline of 21.3% year-over-year [1] - The company's EPS was -$0.20, a significant drop from $0.08 in the same quarter last year, indicating a substantial earnings miss [1] - The revenue fell short of the Zacks Consensus Estimate by 14.53%, which was projected at $114.41 million [1] - The EPS surprise was notably negative at -2100.00% compared to the consensus estimate of $0.01 [1] Financial Performance Metrics - Net Sales in Rail, Technologies, & Services amounted to $54.02 million, below the average estimate of $73.97 million from two analysts [4] - Net Sales in Infrastructure Solutions reached $43.78 million, slightly above the two-analyst average estimate of $40.43 million [4] - Segment Operating Income for Infrastructure Solutions was reported at -$0.44 million, better than the average estimate of -$0.63 million [4] - Segment Operating Income for Rail, Technologies, and Services was $0.14 million, significantly lower than the average estimate of $4.59 million [4] Stock Performance - L.B. Foster's shares have returned +10.1% over the past month, compared to a +11.5% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - First quarter sales decreased by 21.3% compared to the previous year, primarily due to a decline in the rail segment, which saw a 34.6% drop in sales [7][11] - Adjusted EBITDA for the first quarter was $1.8 million, down $4.1 million from the previous year, reflecting lower margins from the rail sales decline [12] - Net debt increased to $79.9 million, up $4.9 million from last year, with a gross leverage ratio of 2.5 times compared to 2.2 times last year [9][18] Business Line Data and Key Metrics Changes - Rail segment sales totaled $54 million, down 34.6%, with the rail products business unit declining by 44.7% due to weak rail distribution demand [15] - Infrastructure Solutions saw a 5% increase in net sales, driven by a 33.7% increase in precast concrete sales, while steel product sales decreased by 24.4% [17] - Rail backlog increased by 46.9% during the quarter, with a significant increase in rail products backlog by 63.4% [21][22] Market Data and Key Metrics Changes - Order rates improved by 12.6% year-over-year, with infrastructure orders increasing by 35.3% [21] - The consolidated backlog grew by 6.7% compared to last year, with gains in more profitable product lines [22] - The UK backlog within technology services and solutions declined by 52.7%, indicating challenges in that market [22] Company Strategy and Development Direction - The company is focusing on capital allocation priorities, including a $40 million stock buyback program authorized for three years [19] - There is an emphasis on organic growth initiatives and evaluating tuck-in acquisitions to enhance product line breadth and geographic coverage [20] - The company aims to maintain leverage between 1 times and 2 times over the long term while managing working capital needs [18][20] Management's Comments on Operating Environment and Future Outlook - Management noted that the first quarter's results were impacted by a slowdown in government funding, but there are signs of improvement in project funding and bidding levels [8][24] - The company expects a substantial improvement in second quarter results, driven by a strong backlog and favorable demand drivers in key end markets [28] - There is optimism regarding government funding programs for infrastructure investment, which are expected to remain intact [29] Other Important Information - The company reported a typical seasonal pattern in cash flow, with expected consumption in the first half of the year and a reversal in the second half [14] - The company is closely monitoring the status of government funding programs and the impact of tariffs on supply chains [26] Q&A Session Summary Question: Insights on Rail Technology and Services segment performance - Management indicated that they expect a strong second quarter despite tough year-over-year comparisons, with a focus on maintaining guidance for the year [34] Question: Backlog growth mix - The backlog growth was primarily in rail products and friction management, with a noted decline in the UK backlog [36][37] Question: Friction management growth and market share - Management reported strong performance in friction management, with new customer acquisitions and increased demand for lubricators [40] Question: Capital expenditures on rail projects - Management observed increased capital expenditures on maintenance and additional capital work, contributing to backlog and new orders [47] Question: Infrastructure orders improvement - The company noted a 35% increase in infrastructure orders, particularly in precast concrete, driven by strong demand and government funding [55] Question: Potential acquisitions - Management is currently focused on organic growth opportunities and is not actively seeking acquisitions, although smaller tuck-in opportunities may be considered [57]

Core Viewpoint - L.B. Foster reported a significant quarterly loss of $0.20 per share, missing the Zacks Consensus Estimate of $0.01, marking an earnings surprise of -2,100% compared to a profit of $0.08 per share a year ago [1] Financial Performance - The company posted revenues of $97.79 million for the quarter ended March 2025, which was 14.53% below the Zacks Consensus Estimate and down from $124.32 million year-over-year [2] - Over the last four quarters, L.B. Foster has only surpassed consensus EPS estimates once and has also topped consensus revenue estimates just once [2] Stock Performance - L.B. Foster shares have declined approximately 23.9% since the beginning of the year, contrasting with the S&P 500's decline of -3.9% [3] Future Outlook - The company's earnings outlook will be crucial for investors, particularly in light of current consensus earnings expectations for upcoming quarters [4] - The current consensus EPS estimate for the next quarter is $0.56 on revenues of $146.73 million, and for the current fiscal year, it is $1.71 on revenues of $543.73 million [7] Industry Context - The Steel - Producers industry, to which L.B. Foster belongs, is currently ranked in the top 12% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]