L.B. Foster pany(FSTR) - 2025 Q1 - Quarterly Report

PART I. Financial Information Item 1. Financial Statements 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 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 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 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 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][26] - As of March 31, 2025, the company's remaining performance obligations (backlog) totaled approximately $237.2 million[39] - 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] - The Settlement Agreement with Union Pacific Railroad (UPRR) has been fully paid as of December 31, 2024, and all obligations have been satisfied[66] Management's Discussion and Analysis of Financial Condition and Results of Operations 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 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] Segment Analysis 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] 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] Liquidity and Capital Resources 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] - On March 3, 2025, the Board approved a new share repurchase authorization of up to $40 million through February 29, 2028[102] 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 This item is not applicable as the company is a smaller reporting company - This item is not applicable to a smaller reporting company[116] Controls and Procedures 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] - 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][120] PART II. Other Information Legal Proceedings 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] Risk Factors This item is not applicable as the company is a smaller reporting company - This item is not applicable to a smaller reporting company[124] Unregistered Sales of Equity Securities and Use of Proceeds 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] 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 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] Exhibits This section provides an index of all exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data