L.B. Foster pany(US:FSTR)2022-05-10 17:01Financial Data and Key Metrics Changes - First-quarter sales were $98.8 million, down $17.3 million or 14.9% from Q1 last year, but adjusted for the Piling divestiture, sales were up 3.7% year-over-year [7][8] - Gross profit was down in Q1 due to the piling divestiture, raw material and labor inflation, and supply chain disruptions [7][8] - EBITDA in Q1 declined $1.1 million to $1.7 million, with $300,000 attributed to the Piling divestiture [8] - Total net debt was $29.4 million at quarter-end, down $2.4 million from last year [12] Business Line Data and Key Metrics Changes - Rail segment revenue decreased $2.5 million year-over-year, but gross margins increased 30 basis points due to higher volume in more profitable business units [9] - Precast Concrete Products segment revenues increased $2 million or 18.4% year-over-year, but gross margins were down 330 basis points due to higher input costs [10] - Steel Products and Measurement revenues increased by $4 million or 22.7% year-over-year, but gross profit margins declined 690 basis points due to higher costs [11] Market Data and Key Metrics Changes - Order intake levels, excluding the Piling business, increased 17.7% over the prior-year quarter and 42.2% sequentially, resulting in a backlog of $245 million, an increase of 3.7% compared to the prior-year quarter [5][6] - The precast segment's backlog ended at $72 million, an uptick from the previous year [22] Company Strategy and Development Direction - The company remains focused on leveraging key growth platforms, particularly in Precast Concrete and Rail Technology services [6] - The company anticipates a sequential revenue increase of at least 25% in Q2, driven by improving order intake and backlog [5][15] - Addressing margin erosion is a top priority, with aggressive pricing actions and inventory management to mitigate supply chain disruptions [16] Management's Comments on Operating Environment and Future Outlook - The operating environment remains challenging due to inflationary pressures and supply chain disruptions, but margins are stabilizing [6] - The company is optimistic about improving demand due to significant government funding for infrastructure projects, although meaningful revenue from the Infrastructure Investment and Jobs Act is not expected until 2023 [15][16] Other Important Information - The company has a comfortable leverage ratio around two times, with expectations of $8.5 million in federal income tax refunds and $90 million in federal net operating loss carryforwards [12] Q&A Session Summary Question: Comments on new orders in the precast segment - The company noted a slight decline in new orders compared to a large order in Q1 2021, but remains optimistic about the precast business with a backlog of $72 million [22] Question: Backlog for coatings and measurement - The backlog for coatings and measurement stands at $49 million, flat year-over-year, with increased bidding activity noted [23]