L.B. Foster pany(US:FSTR)2020-11-05 16:01Financial Performance - Net sales for the three months ended September 30, 2020, were $118,365, a decrease of $26,483 or 18.3% compared to the prior year quarter, with declines across all segments due to COVID-19 disruptions[110]. - Gross profit decreased by $5,890 to $22,061, with a gross profit margin of 18.6%, down 70 basis points from the prior year, primarily due to a 55.6% decrease in the Tubular and Energy Services segment[111]. - Selling and administrative expenses decreased by $3,969, or 18.9%, driven by personnel-related cost reductions, with expenses as a percentage of sales decreasing by 10 basis points[112]. - Net income from continuing operations was $16,578, or $1.56 per diluted share, compared to $3,754, or $0.35 per diluted share, in the prior year quarter[115]. - Net sales for the nine months ended September 30, 2020, were $381,835, a decrease of $93,262 or 19.6% compared to the prior year, with declines across all segments due to COVID-19 disruptions[131]. - Gross profit for the same period decreased by $19,419 to $73,321, with a gross profit margin of 19.2%, down 30 basis points from the prior year, primarily due to reduced sales in the Tubular and Energy Services segment[132]. - Selling and administrative expenses decreased by $6,598, or 10.5%, driven by personnel-related cost reductions and third-party service expenses, although as a percentage of sales, these expenses increased by 150 basis points[133]. - Net income from continuing operations was $23,543, or $2.21 per diluted share, compared to $17,773, or $1.67 per diluted share, in the prior year[135]. Segment Performance - The Company reported a year-over-year increase in new orders of 8.3% in Construction Products and 6.6% in Rail Products and Services for the three months ended September 30, 2020, leading to backlog increases of 36.6% and 23.9%, respectively[102]. - Sales in the Tubular and Energy Services segment declined by 29.4% year-to-date for 2020, with orders down by 50.8%, resulting in a substantial decrease in backlog compared to September 30, 2019[107]. - The Construction Products segment backlog increase was driven by strong order activity in the Piling and Fabricated Bridge division, with production rates expected to remain near capacity levels[104]. - The Rail Products and Services segment anticipates further recovery in Rail Technologies, particularly in the UK, with strong transit-based bookings reported in the third quarter of 2020[103]. - Rail Products and Services segment sales decreased by $3,753, or 5.5%, primarily due to reduced sales in the Rail Technologies business unit[117]. - Construction Products segment sales decreased by $9,292, or 19.7%, attributed to volume decreases in both the Piling and Fabricated Bridge division and the Precast Concrete Products division[121]. - Tubular and Energy Services segment sales decreased by $13,438, or 44.9%, due to deteriorated conditions in the U.S. oil and gas market, with a significant drop in demand[127]. - New orders in the Rail Products and Services segment decreased by 9.7%, while the Construction Products segment saw a 2.4% increase in new orders, indicating mixed market conditions[139][144]. - The Tubular and Energy Services segment experienced a 50.8% decrease in new orders, reflecting reduced capital spending and project delays in the domestic oil and gas market[148]. Operational Challenges - The Company expects continued disruptions in operations due to COVID-19, with minimal disruption to its on-premise workforce and ongoing pandemic protocols[101]. - The Tubular and Energy Services segment is projected to experience material declines in sales for the remainder of 2020 and into 2021 due to the significant drop in oil demand[107]. - The Company continues to monitor budget shortfalls incurred by transit operators, with long-term planning projects moving forward despite current challenges[103]. Tax and Financial Position - The Company anticipates receiving approximately $9.008 million in tax refunds within the next year due to extended carryback provisions in the CARES Act[106]. - The effective income tax rate for the quarter was (484.6)%, with an income tax benefit of $13,742 compared to an expense of $836 in the prior year quarter[113][114]. - The effective income tax rate for the nine months ended September 30, 2020, was (98.8)%, with an income tax benefit of $11,698 compared to an expense of $3,883 in the prior year, influenced by a discrete tax benefit related to a business disposition[134]. - The company anticipates receiving approximately $9,008 million in tax refunds due to the sale of its Test and Inspection Services business[162]. Cash and Debt Management - Cash and cash equivalents as of September 30, 2020, were $9,311 million, with total available funding capacity of $79,416 million[151]. - Net cash provided by continuing operating activities for the nine months ended September 30, 2020, was $16,201 million, compared to $10,311 million in the prior year[152]. - Capital expenditures for the nine months ended September 30, 2020, were $7,650 million, up from $2,510 million in the same period of 2019[155]. - The company reduced outstanding debt by $9,033 million during the nine months ended September 30, 2020[157]. - Total debt as of September 30, 2020, was $49,104 million, down from $58,152 million as of December 31, 2019[150]. - The company's current ratio as of September 30, 2020, was 2.05, indicating strong liquidity[159]. - A 1% change in interest rates for variable rate debt would increase or decrease interest expense by approximately $753 million[167]. - The company recorded a current liability of $1,332 million related to its LIBOR-based interest rate swap agreements as of September 30, 2020[169].