Core Insights - L.B. Foster Company has published its first Sustainability Report, emphasizing its commitment to sustainable practices across various areas including manufacturing and social relationships [1][2] - The report aims to align the company's operations with stakeholder sustainability needs and enhance transparency [2][4] Sustainability Report Highlights - The report serves as a baseline for the company's sustainability efforts and reflects its SPIRIT culture and values, addressing employee practices and environmental impact [3] - External consulting was utilized to conduct a materiality assessment, identifying relevant sustainability topics for key stakeholders such as investors and customers [2] - The report is aligned with frameworks such as the Global Reporting Initiative (GRI) and the Sustainable Accounting Standards Board (SASB) [2] Company Background - Founded in 1902, L.B. Foster Company is a global provider of engineered products and services for infrastructure, with operations in North America, South America, Europe, and Asia [5]

Core Viewpoint - L.B. Foster Company has published its first Sustainability Report, demonstrating its commitment to sustainable practices and transparency in operations [5][2]. Group 1: Sustainability Commitment - The Sustainability Report reflects the company's alignment with stakeholder sustainability needs and aims to communicate its current state of sustainability [1][5]. - The report serves as a baseline for the company's commitment to its SPIRIT culture and values, addressing employee practices and environmental impact [6][9]. - The company engaged external consultants to conduct a materiality assessment, identifying sustainability topics relevant to key stakeholders, including investors and customers [9]. Group 2: Future Actions and Goals - The company is focused on building a structured sustainability program through data and active engagement, with plans for future actions as part of its sustainability journey [2][9]. - The report is intended to drive the company's strategy by integrating sustainability with operations, referencing frameworks like the Global Reporting Initiative (GRI) and the Sustainable Accounting Standards Board (SASB) [9]. Group 3: Company Overview - Founded in 1902, L.B. Foster Company provides engineered products and services for infrastructure, maintaining a global presence across North America, South America, Europe, and Asia [7]. - The company aims to address safety, reliability, and performance needs in its engineering and product development solutions [7].

Core Insights - L.B. Foster exceeded earnings expectations in Q1 2024, reporting adjusted earnings per share of 8 cents, surpassing the Zacks Consensus Estimate of a loss of 16 cents [2] - The company achieved net sales of $124.3 million, reflecting an 8% year-over-year increase, with organic growth at 16.9% [4] - The Rail business showed significant recovery with a 29.4% organic sales growth in Q1 2024 [8] Financial Performance - L.B. Foster's shares appreciated by 25.3% over the past six months, outperforming the industry's decline of 9.1% and the S&P 500's rise of nearly 16% [7] - The strategic transformation led to a $3 million increase in gross profit compared to the previous year, alongside a reduction in net debt by $2.5 million [12] Future Outlook - For the remainder of 2024, L.B. Foster anticipates adjusted EBITDA between $34 million and $39 million, with net sales projected in the range of $525-$560 million [13] - The company expects to generate healthy free cash flow of $12-$18 million for the full year while maintaining disciplined capital spending at 2-2.5% of sales [13]

Core Insights - L.B. Foster Company (FSTR) has seen a 14.3% increase in stock value over the past three months, driven by strong first-quarter earnings that exceeded expectations [1] Earnings Outperformance - In the first quarter, FSTR reported adjusted earnings of 8 cents per share, surpassing the Zacks Consensus Estimate of a loss of 16 cents, achieving an average trailing four-quarter earnings surprise of approximately 12.6% [2] Robust Growth Prospects - The Zacks Consensus Estimate for FSTR's 2024 earnings is $1.72, indicating a year-over-year growth of 1,233%. The current year's consensus estimate was revised upward by 13.5% in the last 60 days, highlighting strong growth potential. Additionally, earnings are projected to grow by 31.3% in the second quarter of 2024 [3] Performance Comparison - FSTR's shares have increased by 89.3% over the past year, significantly outperforming the industry average rise of 5.8% during the same period [4] Strong Q1 Results and Upbeat Prospects - In Q1 2024, FSTR achieved net sales of $124.3 million, an increase of nearly 8% year-over-year. The company recorded 16.9% organic growth despite challenges from divestitures and product line exits. Gross profit increased by $3 million year-over-year, aided by strategic transformations and a reduction in net debt by $2.5 million. The Rail business rebounded with organic sales growth of 29.4% [5] Financial Projections - FSTR anticipates adjusted EBITDA between $34 million and $39 million, with net sales projected in the range of $525 million to $560 million for 2024. The company expects free cash flow of $12 million to $18 million for the full year, with capital spending targeted at 2-2.5% of sales, ensuring continued investment in key areas while maintaining financial discipline [6][7]

Core Points - L.B. Foster Company will present at the Three Part Advisors' East Coast IDEAS Investor Conference on June 12, 2024, at 9:15 AM EDT [1] - Presentation materials will be available on the Company's Investor Relations website on the morning of the conference [1] - A video webcast and replay will be accessible online, with the replay available for 90 days [2] Company Overview - L.B. Foster Company, founded in 1902, is a global technology solutions provider specializing in engineered and manufactured products and services for infrastructure [3] - The Company focuses on innovative engineering and product development solutions to meet safety, reliability, and performance needs [3] - L.B. Foster has a presence in North America, South America, Europe, and Asia [3]

Company Announcement - L.B. Foster Company will present at the Three Part Advisors' East Coast IDEAS Investor Conference on June 12, 2024, starting at 9:15 AM EDT [1] - Presentation materials will be available on the Company's Investor Relations website on the morning of the conference [1] Webcast Information - A video webcast and replay will be available online, with a registration link provided on the L.B. Foster website on the day of the event [2] - The video replay will remain accessible for 90 days [2] Company Overview - L.B. Foster Company, founded in 1902, is a global technology solutions provider specializing in engineered, manufactured products and services for infrastructure [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]

Core Viewpoint - L.B. Foster (FSTR) is positioned as a strong investment opportunity due to significant upward revisions in earnings estimates, indicating a positive earnings outlook that may continue to drive stock price growth [1][2]. Earnings Estimates - Analysts are increasingly optimistic about L.B. Foster's earnings prospects, leading to higher estimates that are expected to positively influence the stock price [2]. - The current quarter's earnings estimate is projected at $0.42 per share, reflecting a year-over-year increase of +31.25% [4]. - For the full year, the earnings estimate is expected to be $1.72 per share, representing a substantial change of +1223.08% compared to the previous year [5]. Zacks Rank and Performance - The Zacks Rank system has assigned L.B. Foster a Zacks Rank 1 (Strong Buy), indicating strong agreement among analysts in revising earnings estimates upward [3][5]. - Stocks with a Zacks Rank 1 and 2 have historically outperformed the S&P 500, suggesting a favorable investment environment for L.B. Foster [6]. Recent Stock Performance - L.B. Foster shares have increased by 8.6% over the past four weeks, indicating investor confidence in the company's earnings growth potential [7].

PITTSBURGH, May 10, 2024 (GLOBE NEWSWIRE) -- L.B. Foster Company (NASDAQ:FSTR), a global technology solutions provider of products and services for the rail and infrastructure markets, today announced its Board of Directors has been recognized as the "Public Company Board of the Year" by the National Association of Corporate Directors (NACD) Three Rivers Chapter. The annual Director of the Year Awards for the Three Rivers Chapter, which covers the Pittsburgh, PA, Buffalo, NY, and Cleveland and Cincinnati, O ...

Financial Data and Key Metrics - Organic growth averaged approximately 13% per quarter, with Q1 2024 reaching 16.9%, the highest point [4] - Adjusted gross profit increased 17.3% over the trailing four quarters, with adjusted gross margin improving by 190 basis points to 21.4% [4] - Net debt increased to $74.9 million during Q1, but was down $2.5 million year-over-year, with a gross leverage ratio of 2.2x, improved from 2.0x last year [20] - Adjusted EBITDA for Q1 was $5.9 million, up 32.4% year-over-year [24] - Capital spending is expected to be around 2% to 2.5% of sales, slightly higher than historical levels due to growth platform investments [5] Business Segment Performance - Rail segment sales increased 29.4% organically, with total Rail segment revenues up 28.3% to $82.6 million [19][26] - Infrastructure Solutions segment revenue decreased by $9.4 million (18.4%), with 19.5% of the decline due to divestitures and product line exits [27] - Rail Products saw a 33% increase in revenue year-over-year, contributing $13 million, while Technology Services and Solutions (TS&S) grew by 100% [78][109] - Precast Concrete business within Infrastructure was down 13% year-over-year, largely due to adverse weather conditions [76] Market Performance - The UK construction market has stabilized and is showing modest signs of improvement after challenges in 2023 [6] - Demand for total track monitoring technology products has increased, with expectations for continued growth [6] - Government funding for road and bridge rehabilitation projects, along with recreational park spending, is driving demand in the Infrastructure segment [32] Strategic Direction and Industry Competition - The company has completed nine transactions over the past two and a half years, simplifying its business structure and improving profitability [59] - Focus remains on Rail Technologies and Precast Concrete for organic growth opportunities, with a disciplined capital allocation process [55][56] - The company is optimistic about long-term demand in infrastructure markets, supported by federal investment programs [82] Management Commentary on Operating Environment and Future Outlook - Management is cautiously optimistic about market conditions, with strong order activity and improved lead times [62][63] - The company reaffirmed its 2024 financial guidance and remains on track to achieve its 2025 goals [21][38] - Free cash flow guidance for 2024 is $12 million to $18 million, with expectations for stronger cash flow in 2025 [28][45] Other Important Information - The company repurchased 151,000 shares (1.4% of outstanding shares) at an average price of $17.89 per share under its stock repurchase program [5] - The sale of a property in Magnolia, Texas, generated $3.5 million in net proceeds, excluded from adjusted EBITDA [9] - The company is monitoring its potential inclusion in the Russell 2000 Index, with a market cap of $255 million as of the measurement date [31] Q&A Session Summary Question: Any changes to full-year guidance given the strong Q1 performance? - No changes to full-year guidance were made, as the company remains cautious about market conditions despite a strong start [86][62] Question: Impact of weather on Infrastructure segment sales and EBITDA? - Precast Concrete revenue was down 13% year-over-year, with the majority of the decline attributed to adverse weather conditions [76] Question: Drivers of Rail segment revenue growth? - Rail Products and TS&S were the main drivers, with TS&S benefiting from domestic rail safety business and recovery in the UK [97][109] Question: Capital allocation and M&A strategy? - The company is focusing on organic growth and small tuck-in acquisitions, with a potential dividend considered as free cash flow improves [45][56] Question: Backlog trends and expectations? - Backlog is expected to improve throughout the year, with shorter lead times and improved order fulfillment impacting current levels [57][63]

[PART I. Financial Information](index=4&type=section&id=PART%20I.%20Financial%20Information) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company's Q1 2024 financial statements show a shift from net loss to net income, driven by sales growth and an asset sale gain, with increased assets and equity but negative operating cash flow [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2024, total assets increased to **$326.4 million** from **$313.2 million** at year-end 2023, driven by higher inventories and accounts receivable, while total liabilities rose to **$181.1 million** and stockholders' equity grew to **$145.3 million** | Balance Sheet Items (In thousands) | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $182,984 | $167,990 | | **Total Assets** | $326,401 | $313,206 | | **Total Current Liabilities** | $84,181 | $95,306 | | **Long-Term Debt** | $77,926 | $55,171 | | **Total Liabilities** | $181,124 | $170,371 | | **Total Stockholders' Equity** | $145,277 | $142,835 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 2024, the company reported a net income of **$4.4 million** (**$0.40** per diluted share), a significant improvement from a **$2.2 million** net loss in Q1 2023, driven by a **7.6%** increase in net sales and a **$3.5 million** gain from other income | Income Statement Items (In thousands) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Total Net Sales** | $124,320 | $115,488 | | **Gross Profit** | $26,249 | $23,291 | | **Operating Profit** | $2,283 | $503 | | **Income (loss) before income taxes** | $4,694 | $(2,712) | | **Net Income (loss) attributable to L.B. Foster** | $4,436 | $(2,152) | | **Diluted EPS** | $0.40 | $(0.20) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2024, net cash used in operating activities was **$21.9 million**, a sharp contrast to the **$6.9 million** provided in Q1 2023, primarily due to working capital changes, while investing activities provided **$1.2 million** and financing activities provided **$21.3 million** | Cash Flow Items (In thousands) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Net cash (used in) provided by operating activities** | $(21,864) | $6,932 | | **Net cash provided by investing activities** | $1,209 | $4,661 | | **Net cash provided by (used in) financing activities** | $21,298 | $(12,022) | | **Net increase (decrease) in cash** | $588 | $(243) | | **Cash and cash equivalents at end of period** | $3,148 | $2,639 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail key accounting policies, including a segment reorganization, revenue breakdowns, goodwill, debt covenants, and contingent liabilities such as the UPRR settlement and environmental proceedings - Effective Q4 2023, the company reorganized from three reporting segments to two: **Rail, Technologies, and Services** ("Rail") and **Infrastructure Solutions** ("Infrastructure"), with historical data restated to conform to this new structure[20](index=20&type=chunk) - As of March 31, 2024, the company had approximately **$222.3 million** in remaining performance obligations (backlog), with about **10.5%** expected to extend beyond one year[33](index=33&type=chunk) - The company has an outstanding settlement obligation with Union Pacific Railroad (UPRR), with a final payment of **$8.0 million** expected in 2024[66](index=66&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **7.6%** increase in Q1 2024 net sales to strong organic growth, partially offset by divestitures, leading to improved gross profit margin and a significant swing to net income, with solid liquidity | Key Performance Indicators | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $124.3M | $115.5M | +7.6% | | **Gross Profit Margin** | 21.1% | 20.2% | +90 bps | | **Operating Profit** | $2.3M | $0.5M | +$1.8M | | **Net Income (Loss)** | $4.4M | $(2.2)M | +$6.6M | | **Diluted EPS** | $0.40 | $(0.20) | +$0.60 | - The increase in net sales was driven by organic sales growth of **$19.5 million** (**16.9%**), partially offset by a **$10.6 million** (**9.2%**) reduction from the divestiture of the Ties and Chemtec businesses and the exit of the Bridge product line[81](index=81&type=chunk) - Other income of **$3.5 million** in Q1 2024 was primarily due to a gain on the sale of the company's former joint venture facility in Magnolia, Texas[85](index=85&type=chunk) [Results of Operations - Segment Analysis](index=22&type=section&id=Results%20of%20Operations%20-%20Segment%20Analysis) The Rail segment saw a significant **28.3%** increase in sales to **$82.6 million**, driving its operating profit up by **183.8%** to **$6.8 million**, while the Infrastructure Solutions segment's sales decreased by **18.4%** to **$41.7 million**, resulting in an increased operating loss of **$1.4 million** | Segment Performance (Q1 2024 vs Q1 2023) | Net Sales | % Change | Segment Operating Profit (Loss) | % Change | | :--- | :--- | :--- | :--- | :--- | | **Rail, Technologies, and Services** | $82.6M | +28.3% | $6.8M | +183.8% | | **Infrastructure Solutions** | $41.7M | -18.4% | $(1.4)M | -291.3% | - The Rail segment's sales growth was driven by higher organic sales of **$18.9 million** (**29.4%**), particularly in Rail Products and Technology Services and Solutions[89](index=89&type=chunk) - The Infrastructure segment's sales decline was primarily attributable to the divestiture of Chemtec and the Bridge product line exit, which together decreased sales by **$9.9 million**[93](index=93&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2024, the company had total available funding capacity of **$53.2 million**, consisting of **$3.1 million** in cash and **$50.1 million** available under its revolving credit facility, with net cash used in operating activities shifting to **$21.9 million** due to working capital needs | Available Funding Capacity (March 31, 2024) | Amount (In thousands) | | :--- | :--- | | Cash and cash equivalents | $3,148 | | Net availability under revolving credit facility | $50,071 | | **Total available funding capacity** | **$53,219** | - The change in operating cash flow was largely driven by accounts receivable, which was a use of cash of **$4.0 million** in Q1 2024 compared to a source of cash of **$26.2 million** in Q1 2023[102](index=102&type=chunk) [Backlog](index=25&type=section&id=Backlog) Total company backlog was **$222.3 million** as of March 31, 2024, a decrease from **$259.9 million** a year prior, attributed to **$12.1 million** from divested businesses and a discontinued product line, with the remainder related to the timing of large orders | Backlog by Segment (In thousands) | Mar 31, 2024 | Mar 31, 2023 | | :--- | :--- | :--- | | Rail, Technologies, and Services | $86,038 | $113,593 | | Infrastructure Solutions | $136,223 | $146,288 | | **Total backlog** | **$222,261** | **$259,881** | [Quantitative and Qualitative Disclosures about Market Risk](index=27&type=section&id=Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This item is not applicable as the company qualifies as a smaller reporting company - The company states that this item is not applicable to a smaller reporting company[119](index=119&type=chunk) [Controls and Procedures](index=27&type=section&id=Controls%20and%20Procedures) As of March 31, 2024, the CEO and CFO concluded that the company's disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during Q1 2024 - Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of March 31, 2024[120](index=120&type=chunk) - No changes occurred during the quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[121](index=121&type=chunk) [PART II. Other Information](index=28&type=section&id=PART%20II.%20Other%20Information) [Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings, notably its potential responsibility in the Portland Harbor Superfund Site cleanup, though management does not currently believe these matters will have a material adverse effect on financial condition - The company is identified as a potentially responsible party (PRP) for the Portland Harbor Superfund Site cleanup, with estimated total remedy costs of **$1.1 billion to $1.7 billion**, though the company's ultimate liability cannot be predicted at this time[68](index=68&type=chunk) - Management believes that the ultimate resolution of pending legal actions will not have a material adverse effect on the company's financial position or liquidity as of March 31, 2024[69](index=69&type=chunk) [Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) This item is not applicable as the company qualifies as a smaller reporting company - The company states that 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=28&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2024, the company repurchased **51,217** shares at an average price of **$23.80** per share, with **16,555** shares purchased under the publicly announced program, leaving approximately **$12.3 million** available for future repurchases | Share Repurchases (Q1 2024) | Value | | :--- | :--- | | **Total shares purchased** | 51,217 | | **Average price paid per share** | $23.80 | | **Shares purchased under public plan** | 16,555 | | **Approx. value remaining under plan** | $12,303 thousand | - On March 3, 2023, the Board of Directors authorized a share repurchase program of up to **$15.0 million** of the Company's common shares, effective until February 2026[128](index=128&type=chunk) [Other Information](index=28&type=section&id=Item%205.%20Other%20Information) During the fiscal quarter ended March 31, 2024, none of the company's directors or officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement - No directors or officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the first quarter of 2024[128](index=128&type=chunk) [Exhibits](index=29&type=section&id=Item%206.%20Exhibits) This section provides an index of the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files