L.B. Foster pany(US:FSTR)2021-05-09 12:59Financial Data and Key Metrics Changes - The first quarter revenue was $116.1 million, a decrease of $5.8 million or 4.8% compared to $121.9 million in the same quarter last year [22][8] - Consolidated gross profit decreased by $4.3 million, resulting in a gross profit margin of 16.2%, down 280 basis points year-over-year [22][12] - The net loss from continuing operations was $1.3 million, or $0.12 per diluted share, compared to a negligible loss in the prior year [24] - Adjusted EBITDA totaled $2.7 million, a decrease of $2.1 million year-over-year [25] Business Line Data and Key Metrics Changes - Rail segment revenue decreased by $4 million year-over-year, primarily due to timing of deliveries and customer delays [26] - Infrastructure Solutions revenue was down $1.9 million, driven by the coatings and measurement business unit, while fabricated steel and precast concrete revenues increased significantly [28] - Despite revenue decline, rail segment gross profit increased by $300,000, resulting in a 150 basis point improvement in gross profit margin [27] Market Data and Key Metrics Changes - Consolidated orders in Q1 were $135.6 million, an increase from $130.8 million last year, driven by the infrastructure solutions segment [31] - The backlog stood at $271.9 million at the end of Q1, an increase of $34.7 million or 14.6% compared to the previous year [42] Company Strategy and Development Direction - The company is focusing on capitalizing on post-pandemic trends and the need for infrastructure investment [45] - There is an emphasis on expanding into markets beyond energy, including water infrastructure and petrochemical applications [96][97] - The company anticipates further debt reduction in 2021, supported by tax refunds and strong cash flow generation [39][40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second quarter, expecting a significant increase in volume due to a strong backlog and improving market conditions [18][57] - The rail industry is showing signs of recovery, with increasing passenger and freight traffic [15][48] - The coatings and measurement business is expected to remain weak, but there are signs of potential recovery in the energy pipeline sector [54][55] Other Important Information - The company generated strong operating cash flow of $7.6 million, a $12.5 million increase year-over-year [33] - Total available funding capacity was $82.6 million at quarter-end, with net debt reduced to $31.8 million [37] Q&A Session Summary Question: What variables will impact SG&A as revenues rebound? - Management indicated that SG&A will likely increase with a return to normalcy and business travel, but they have control over expenses [62][63] Question: Will improved confidence in backlog carry over into order activity? - Management confirmed that strong backlog and increased spending from freight rail companies suggest positive order activity in the upcoming quarters [65][66] Question: What is the sequence of the tax refund process? - The tax refund is expected to be received in portions, with half anticipated in Q2 and the remainder by early Q4, depending on IRS processing [75][76] Question: How are rising raw material costs affecting the company? - Management noted that while steel prices are rising, they do not expect significant margin compression due to effective management of input costs [81][82]