L.B. Foster Announces Continuing Sales Growth and Robust Cash Generation in Fiscal Third Quarter with Expected Strong Finish to 2025

Core Insights - L.B. Foster Company reported a modest sales growth of 0.6% in Q3 2025, with net sales reaching $138.3 million compared to $137.5 million in Q3 2024 [2][8] - Operating income increased by 13.3% to $8.3 million, while net income attributable to the company saw a significant decline of 87.9% to $4.4 million due to a favorable tax valuation adjustment in the prior year [2][10] - The company anticipates a strong fourth quarter driven by improved customer demand and a higher backlog, particularly in the Rail segment, which saw a backlog increase of 58.2% [4][5] Financial Performance - Net sales for Q3 2025 were $138.3 million, a slight increase from $137.5 million in Q3 2024, driven by a 4.4% increase in the Infrastructure segment, while Rail sales decreased by 2.2% [2][8] - Adjusted EBITDA for Q3 2025 was $11.4 million, down 7.9% from $12.3 million in Q3 2024, primarily due to lower margins in the Precast Concrete business [2][10] - Free cash flow improved by 21.7% to $26.4 million, contributing to a reduction in total debt by 14.3% to $58.7 million [2][10] Segment Performance - The Rail segment reported net sales of $77.8 million, a decrease of 2.2% from the previous year, with significant increases in Global Friction Management and Total Track Monitoring [9][11] - The Infrastructure Solutions segment saw net sales increase by 4.4% to $60.5 million, although gross profit margins declined by 260 basis points to 22.0% [11][14] - New orders in the Rail segment increased by 63.9% to $86.4 million, while the Infrastructure segment experienced a decline of 34.4% in new orders [9][11] Guidance and Outlook - The company revised its full-year 2025 guidance, projecting net sales between $535 million and $545 million, with adjusted EBITDA expected to be between $40 million and $42 million [3][4] - The fourth quarter is anticipated to show a 25% increase in sales and a 115% increase in adjusted EBITDA compared to the same period last year [5][6] - The company aims to reduce its gross leverage ratio to a target range of 1.0x - 1.5x by year-end, supported by strong cash generation [6][10]