L.B. Foster pany(US:FSTR)2022-03-01 18:22Financial Data and Key Metrics Changes - Fourth quarter sales were $113 million, down $2.6 million or 2.3% from Q4 of last year, but adjusted for the piling divestiture, sales were up 8.8% year-over-year [24] - Fourth quarter adjusted EBITDA declined $3.7 million to $3.2 million, with $1.3 million of the decline due to the piling divestiture [25] - The company finished 2021 with $6 million of operating cash flow, translating into a $5.2 million reduction in net debt, which stood at $21 million as of year-end [26] Business Line Data and Key Metrics Changes - Rail Technologies and Services segment revenue increased $3.5 million year-over-year, driven by increased volumes within global friction management and technology services [28] - Precast Concrete Products segment revenue was essentially unchanged year-over-year at $20 million, but gross margins were down 390 basis points due to higher input costs [30] - Steel Products and Measurement segment revenues and gross margins were up in Q4, primarily due to improved volumes in bridge products and fluid measurement systems [31] Market Data and Key Metrics Changes - Fourth quarter orders totaled approximately $95 million, softer than recent quarterly run rates, but the company finished the year with a healthy backlog of approximately $210 million [27] - The order book for Precast Concrete Products increased over 50% during 2021, driven by new operations and government funding programs [65] Company Strategy and Development Direction - The company is focusing on transforming into a technology-focused infrastructure solutions provider, with a refreshed corporate strategy emphasizing growth platforms in core markets [17][18] - The passage of the $1.2 trillion Infrastructure Jobs Act is expected to provide resources for U.S. transportation infrastructure projects, which should lead to improving shareholder value [16] Management's Comments on Operating Environment and Future Outlook - Management noted that the company faced significant operational and inflationary challenges in 2021, particularly in labor and raw material costs [48] - Despite challenges, management is optimistic about improving demand due to significant government funding for infrastructure projects [46] Other Important Information - The company has reduced its net debt by $17 million during 2021 and has nearly $109 million in available funding to execute its strategic plan [40] - The company is leveraging a capital-light business model, with capital spending and working capital needs around 1% and 20% of sales respectively [41] Q&A Session Summary Question: Why were new orders in rail weak? - Management indicated that significant projects are coming through the pipeline, leading to some timing issues, but there is nothing to be alarmed about [57] Question: Is the large project bid opportunity growing in 2022? - Management confirmed that quoting activity has been robust, indicating a fair assumption that opportunities are growing [58] Question: Any guidance for first quarter or full year 2022? - Management does not provide guidance but noted strong order book momentum heading into 2022 [60] Question: What are the main growth drivers for the Precast Concrete business? - Growth is driven by new operations and government funding programs, particularly the Great American Outdoors Act [65] Question: Will rising oil prices lead to more orders in coatings and measurement? - Management has not seen a correlation between rising oil prices and increased orders in coatings and measurement [67]