L.B. Foster Company (Nasdaq: FSTR), a global technology solutions
provider of products and services for the rail and infrastructure
markets (the “Company”), today reported its 2023 second quarter
operating results.
CEO Comments
John Kasel, President and Chief Executive
Officer, commented, “Our second quarter results reflect the
continuing favorable impact of our strategic transformation. Net
sales growth was a robust 12.6% and we saw strong gains in Precast
Concrete (up 43.4%) and Rail, Technologies, and Services (up
12.0%). All segments generated organic sales growth in the quarter.
Momentum in our segments generated by our business portfolio
actions and profitability initiatives drove gross margins up 410
bps year over year to 21.8%, which translated into a 72.9% increase
in adjusted EBITDA, with the adjusted EBITDA margin of 7.2%
representing the highest quarterly result achieved since the second
quarter of 2020. We’re pleased to see the expected benefits of our
strategy execution coming through in the results.”
Mr. Kasel continued, “As previously announced,
we completed the sale of our Ties business at the end of the second
quarter. Cash proceeds received at closing were $2.4 million and
were used to pay down our revolving credit facility. Net debt at
quarter end was $85.6 million, in line with our expectations as we
funded working capital to support strong sales and order book
growth. We also initiated our first actions under the
Board-approved share buyback program, repurchasing approximately
0.5% of the outstanding shares during the quarter. We’re focused on
our objective of executing a balanced approach to capital
allocation while managing our leverage.”
Mr. Kasel concluded, “We can confidently report
that the expected tailwinds from the numerous government
infrastructure investment programs have begun to translate into
increasing orders and backlog in the majority of our businesses.
Despite some isolated weakness in the U.K. market, the consolidated
book-to-bill ratio for the quarter was 1.24:1.00, with all segments
expanding their order books in the quarter. With our record $290.1
million backlog and the prospects for a multi-year infrastructure
super cycle in front of us, we remain optimistic in our outlook for
2023 and beyond. Against this backdrop, we’re raising our
profitability outlook for 2023 and maintaining our sales guidance
despite the sale of the Ties business. We look forward to reporting
our continuing progress in the coming quarters.”
1 See “Non-GAAP Financial Measures” and
“Non-GAAP Disclosures” at the end of this press release for a
description of and information regarding adjusted EBITDA, Gross
Leverage Ratio per the Company’s credit agreement, net debt, new
orders, backlog, book-to-bill ratio, adjusted EBITDA leverage, and
related reconciliations to their most comparable GAAP financial
measure. June 30, 2023 backlog levels reflect a decline of $5.5
million from the Ties divestiture.
2023 Financial Guidance
As a result of the improved profitability
achieved in its year-to-date results, the Company is updating its
2023 financial guidance, with adjusted EBITDA now expected to range
between $28 million to $32 million (up from $27 million to $31
million previously). With the strong order rates realized year to
date and record backlog, net sales guidance for 2023 remains
unchanged at between $520 million to $550 million despite the
impact of divestitures.
Second Quarter Consolidated Highlights
The Company’s second quarter performance
highlights are reflected below:
|
|
Three Months EndedJune 30, |
|
Change |
|
PercentChange |
|
|
2023 |
|
2022 |
|
2023 vs. 2022 |
|
2023 vs. 2022 |
|
|
(Unaudited) |
|
|
|
|
Net sales |
|
$ |
148,034 |
|
$ |
131,515 |
|
$ |
16,519 |
|
12.6 |
% |
Gross profit |
|
|
32,252 |
|
|
23,293 |
|
|
8,959 |
|
38.5 |
|
Selling and administrative
expenses |
|
|
24,528 |
|
|
19,394 |
|
|
5,134 |
|
26.5 |
|
Operating profit |
|
|
6,349 |
|
|
2,480 |
|
|
3,869 |
|
156.0 |
|
Net income |
|
|
3,493 |
|
|
1,976 |
|
|
1,517 |
|
76.8 |
|
Adjusted EBITDA |
|
|
10,601 |
|
|
6,131 |
|
|
4,470 |
|
72.9 |
|
New orders |
|
|
183,742 |
|
|
141,439 |
|
|
42,303 |
|
29.9 |
|
Backlog |
|
|
290,076 |
|
|
250,845 |
|
|
39,231 |
|
15.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- On June 30, 2023, the Company sold substantially all the
operating assets of its prestressed concrete railroad tie business
for $2.4 million, subject to working capital adjustments,
generating a $1.0 million loss on the sale. The Ties business
contributed sales of $1.4 million and $8.8 million in the quarter
and trailing-twelve months ended June 30, 2023, respectively,
which is included in the Rail, Technologies, and Services
segment.
- Net sales for the 2023 second quarter were $148.0 million, up
$16.5 million, or 12.6%, over the second quarter of 2022. Net sales
increased 13.3% organically and 6.0% from acquisitions, offset by a
6.8% reduction for divestitures.
- Gross profit for the 2023 second quarter was $32.3 million, a
$9.0 million increase year over year, or 38.5%, and gross profit
margins expanded by 410 basis points to 21.8%. The strong
improvement in gross profit was due to the business portfolio
changes in line with the Company’s strategic transformation along
with an uplift from sales volume, product mix, and pricing.
- Selling and administrative expenses for the 2023 second quarter
were $24.5 million, a $5.1 million increase, or 26.5%, from the
prior year quarter. The increase was primarily attributed to
increased personnel costs as well as the net impact from business
portfolio actions. Selling and administrative expenses as a
percentage of net sales increased to 16.6% in the current quarter,
up from 14.7% last year.
- Operating profit for the 2023 second quarter was $6.3 million,
a $3.9 million increase over the prior year quarter. The
improvement in operating profit was due to increased sales volume
and gross profit expansion, partially offset by increased selling
and administrative expenses.
- Net income for the 2023 second quarter was $3.5 million, or
$0.32 per diluted share, and includes the $1.0 million loss on the
sale of Ties.
- Adjusted EBITDA for the 2023 second quarter, which adjusts for
the loss on divestitures and acquisition-related contingent
consideration adjustments, was $10.6 million, a $4.5 million
increase, or 72.9%, versus the prior year quarter, with adjusted
EBITDA leverage1 of 27.1%.
- New orders totaling $183.7 million for the 2023 second quarter
increased 29.9% from the prior year quarter. Backlog totaling
$290.1 million increased by $39.2 million, or 15.6%, compared to
the prior year quarter.
- Cash used by operating activities totaled $10.3 million in the
second quarter, an increased use of $4.5 million over the prior
year quarter. Second quarter average working capital percent of
sales1 of 20.7% was up 190 bps versus last year due in part to
business mix, project completion delays and increased early payment
discounts taken.
- Net debt of $85.6 million and Gross Leverage Ratio of 2.5x as
of June 30, 2023 improved from $94.0 million and 3.3x,
respectively, as of September 30, 2022, the period immediately
after the completion of the Company’s most recent acquisitions.
Both net debt and Gross Leverage Ratio increased slightly during
the quarter due to seasonal working capital requirements. All
credit agreement covenants were met.
Second Quarter Business Results by Segment
Rail, Technologies, and Services Segment
|
|
Three Months EndedJune 30, |
|
Change |
|
PercentChange |
|
|
2023 |
|
2022 |
|
2023 vs. 2022 |
|
2023 vs. 2022 |
Net sales |
|
$ |
91,616 |
|
|
$ |
81,797 |
|
|
$ |
9,819 |
|
|
12.0 |
% |
Gross profit |
|
$ |
19,847 |
|
|
$ |
15,661 |
|
|
$ |
4,186 |
|
|
26.7 |
% |
Gross profit percentage |
|
|
21.7 |
% |
|
|
19.1 |
% |
|
|
2.6 |
% |
|
13.1 |
% |
Segment operating profit |
|
$ |
6,627 |
|
|
$ |
3,998 |
|
|
$ |
2,629 |
|
|
65.8 |
% |
Segment operating profit percentage |
|
|
7.2 |
% |
|
|
4.9 |
% |
|
|
2.3 |
% |
|
46.9 |
% |
New orders |
|
$ |
115,985 |
|
|
$ |
92,937 |
|
|
$ |
23,048 |
|
|
24.8 |
% |
Backlog |
|
$ |
132,451 |
|
|
$ |
132,017 |
|
|
$ |
434 |
|
|
0.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Net sales for the 2023 second
quarter were $91.6 million, a $9.8 million increase, or 12.0%, over
the prior year quarter. Net sales increased 17.0% organically and
0.8% from acquisitions, offset by a 5.8% decrease from
divestitures. The increase in organic sales was driven by strength
in both Rail Products and Global Friction Management, partially
offset by declines in the Company’s U.K.-based Technology Services
and Solutions business.
- Gross profit for the 2023 second
quarter was $19.8 million, a $4.2 million increase, and gross
profit margins expanded by 260 basis points to 21.7%. The
improvement in gross profit was due primarily to the portfolio
changes in line with the Company’s strategic transformation,
partially offset by softness in profitability in the Technology
Services and Solutions business.
- Segment operating profit for the
2023 second quarter was $6.6 million, a $2.6 million increase over
the prior year quarter.
- Orders increased by $23.0 million,
driven primarily by Rail Products, as well as Global Friction
Management and Technology Services and Solutions. Backlog increased
$18.9 million during the quarter to $132.5 million, despite a $7.0
million decline from the Ties divestiture, remaining relatively
flat versus the prior year quarter.
Precast Concrete Products Segment
|
|
Three Months EndedJune 30, |
|
Change |
|
PercentChange |
|
|
2023 |
|
2022 |
|
2023 vs. 2022 |
|
2023 vs. 2022 |
Net sales |
|
$ |
33,865 |
|
|
$ |
23,611 |
|
|
$ |
10,254 |
|
|
43.4 |
% |
Gross profit |
|
$ |
7,676 |
|
|
$ |
3,347 |
|
|
$ |
4,329 |
|
|
129.3 |
% |
Gross profit percentage |
|
|
22.7 |
% |
|
|
14.2 |
% |
|
|
8.5 |
% |
|
59.9 |
% |
Segment operating profit (loss) |
|
$ |
1,296 |
|
|
$ |
(125 |
) |
|
$ |
1,421 |
|
|
** |
Segment operating profit (loss) percentage |
|
|
3.8 |
% |
|
(0.5)% |
|
|
4.3 |
% |
|
** |
New orders |
|
$ |
37,799 |
|
|
$ |
22,904 |
|
|
$ |
14,895 |
|
|
65.0 |
% |
Backlog |
|
$ |
91,669 |
|
|
$ |
71,507 |
|
|
$ |
20,162 |
|
|
28.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** Results of calculation not considered meaningful.
- Net sales for the 2023 second
quarter were $33.9 million, up $10.3 million, or 43.4% over the
second quarter of 2022. Net sales increased 12.8% organically and
30.6% from the acquisition of VanHooseCo Precast, LLC
(“VanHooseCo”).
- Gross profit for the 2023 second
quarter was $7.7 million, a $4.3 million increase, and gross profit
margins expanded by 850 basis points to 22.7%. The increase in
gross profit was driven by higher volumes from the VanHooseCo
acquisition and margin gains in the legacy Precast business driven
primarily by favorable mix, pricing, and input costs.
- Segment operating profit for the
2023 second quarter was $1.3 million, favorable $1.4 million over
the prior year quarter on improved gross margins, partially offset
by higher selling and administrative expenses from the VanHooseCo
acquisition.
- Second quarter new orders were
$37.8 million, up $14.9 million over the prior year quarter, with
VanHooseCo accounting for $15.8 million of the increase, while
orders in the legacy Precast declined slightly year over year.
Backlog of $91.7 million reflects a $20.2 million increase over the
prior year quarter, driven by VanHooseCo.
Steel Products and Measurement Segment
|
|
Three Months EndedJune 30, |
|
Change |
|
PercentChange |
|
|
2023 |
|
2022 |
|
2023 vs. 2022 |
|
2023 vs. 2022 |
Net sales |
|
$ |
22,553 |
|
|
$ |
26,107 |
|
|
$ |
(3,554 |
) |
|
(13.6)% |
Gross profit |
|
$ |
4,729 |
|
|
$ |
4,285 |
|
|
$ |
444 |
|
|
10.4 |
% |
Gross profit percentage |
|
|
21.0 |
% |
|
|
16.4 |
% |
|
|
4.6 |
% |
|
27.8 |
% |
Segment operating profit |
|
$ |
1,456 |
|
|
$ |
762 |
|
|
$ |
694 |
|
|
91.1 |
% |
Segment operating profit percentage |
|
|
6.5 |
% |
|
|
2.9 |
% |
|
|
3.6 |
% |
|
124.1 |
% |
New orders |
|
$ |
29,958 |
|
|
$ |
25,598 |
|
|
$ |
4,360 |
|
|
17.0 |
% |
Backlog |
|
$ |
65,956 |
|
|
$ |
47,321 |
|
|
$ |
18,635 |
|
|
39.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Net sales for the 2023 second
quarter were $22.6 million, a decrease of $3.6 million or 13.6%
compared to the prior year quarter. Sales increased 2.4%
organically, and declined 16.0% due to divestiture activity.
Organic sales were driven by Protective Coatings, partially offset
by Fabricated Steel Products.
- Steel Products and Measurement
gross profit increased by $0.4 million, an improvement of 460 basis
points, due primarily to the segment’s favorable portfolio shift as
well as margin increases in Protective Coatings driven by improved
volume.
- Segment operating profit for the
2023 second quarter was $1.5 million, an improvement of $0.7
million over the prior year quarter primarily due to improved
volume and margins in Protective Coatings.
- New orders and backlog in Steel
Products and Measurement increased by $4.4 million and $18.6
million, respectively, during the quarter. Increases in both
Protective Coatings and Fabricated Steel Products orders more than
offset a $6.0 million decline due to the divestiture of the
Company’s precision measurement products and systems business.
First Six Months Consolidated Highlights
The Company’s first six months performance highlights are
presented below.
|
|
Six Months EndedJune 30, |
|
Change |
|
PercentChange |
|
|
2023 |
|
2022 |
|
2023 vs. 2022 |
|
2023 vs. 2022 |
|
|
(Unaudited) |
|
|
|
|
Net sales |
|
$ |
263,522 |
|
$ |
230,309 |
|
$ |
33,213 |
|
14.4% |
Gross profit |
|
|
55,543 |
|
|
39,740 |
|
|
15,803 |
|
39.8 |
Selling and administrative expenses |
|
|
45,951 |
|
|
36,692 |
|
|
9,259 |
|
25.2 |
Operating profit |
|
|
6,852 |
|
|
193 |
|
|
6,659 |
|
** |
Net income |
|
|
1,322 |
|
|
390 |
|
|
932 |
|
239.0 |
Adjusted EBITDA |
|
|
15,083 |
|
|
7,386 |
|
|
7,697 |
|
104.2 |
New orders |
|
|
323,258 |
|
|
276,844 |
|
|
46,414 |
|
16.8 |
Backlog |
|
|
290,076 |
|
|
250,845 |
|
|
39,231 |
|
15.6 |
|
|
|
|
|
|
|
|
|
|
|
|
** Results of calculation not considered meaningful.
- Net sales for the first six months
of 2023 were $263.5 million, up $33.2 million, or 14.4%, over the
prior year period. Net sales increased 10.8% organically and 7.4%
from acquisitions, offset by a 3.7% reduction from
divestitures.
- Gross profit for the first six
months of 2023 was $55.5 million, a $15.8 million increase year
over year, or 39.8%, and gross profit margins expanded by 380 basis
points to 21.1%. The improvement in gross profit was due to the
business portfolio changes in line with the Company’s strategic
transformation along with an uplift from sales volume, product mix,
and pricing.
- Selling and administrative expenses
for the first six months of 2023 were $46.0 million, a $9.3 million
increase, or 25.2%, from the prior year period. The increase was
primarily attributed to increased personnel costs, as well as
higher selling and administrative expenses from the net impact of
business portfolio actions. Selling and administrative expenses as
a percentage of net sales increased to 17.4% in the current year
period, up from 15.9% last year.
- Operating profit for the first six
months of 2023 was $6.9 million, a $6.7 million increase over the
prior year period. The improvement in operating profit was due to
increased sales volume and gross profit expansion, partially offset
by increased selling and administrative expenses.
- Net income for the first six months
of 2023 was $1.3 million, or $0.12 per diluted share, and includes
$3.1 million in losses from divestitures.
- Adjusted EBITDA for the first six
months of 2023, which adjusts for the loss on divestitures and
acquisition-related contingent consideration adjustments, was
$15.1 million, a $7.7 million increase, or 104.2%, versus
the prior year period, with adjusted EBITDA leverage1 of
23.2%.
- New orders totaling
$323.3 million for the first six months of 2023 increased
16.8% from the prior year period. Backlog totaling $290.1 million
increased by $39.2 million, or 15.6%, compared to the prior
year.
- Cash used by operating activities
totaled $3.3 million in the six months ended June 30, 2023,
favorable $10.0 million compared to the use in the prior year
period.
Second Quarter Conference Call
L.B. Foster Company will conduct a conference
call and webcast to discuss its second quarter 2023 operating
results on Tuesday, August 8, 2023 at 11:00 AM ET. The call
will be hosted by Mr. John Kasel, President and Chief Executive
Officer. Listen via audio and access the slide presentation on the
L.B. Foster web site: www.lbfoster.com, under the Investor
Relations page. A conference call replay will be available through
August 15, 2023 via webcast through L.B. Foster’s Investor
Relations page of the company’s website.
Those interested in participating in the
question-and-answer session may register for the call at
https://register.vevent.com/register/BI7c68dd565b304553aa8d4acdc4b470b1
to receive the dial-in numbers and unique PIN to access the call.
The registration link will also be available on the Company’s
Investor Relations page of its website.
About L.B. Foster Company
Founded in 1902, L.B. Foster Company is a global
technology solutions provider of engineered, manufactured products
and services that builds and supports infrastructure. The Company’s
innovative engineering and product development solutions address
the safety, reliability, and performance needs of its customers’
most challenging requirements. The Company maintains locations in
North America, South America, Europe, and Asia. For more
information, please visit www.lbfoster.com.
Non-GAAP Financial Measures
This press release contains financial measures
that are not calculated and presented in accordance with generally
accepted accounting principles in the United States (“GAAP”). These
non-GAAP financial measures are provided as additional information
for investors. The presentation of this additional information is
not meant to be considered in isolation or as a substitute for GAAP
measures. For definitions of the non-GAAP financial measures used
in this press release and reconciliations to the most directly
comparable respective GAAP measures, see the “Non-GAAP Disclosures”
section below.
The Company has not reconciled the
forward-looking adjusted EBITDA to the most directly comparable
GAAP measure because this cannot be done without unreasonable
effort due to the variability and low visibility with respect to
certain costs, the most significant of which are acquisition and
divestiture-related costs and impairment expense. These underlying
expenses and others that may arise during the year are potential
adjustments to future earnings. The Company expects the variability
of these items to have a potentially unpredictable, and a
potentially significant, impact on our future GAAP financial
results.
The Company defines new orders as a contractual
agreement between the Company and a third-party in which the
Company will, or has the ability to, satisfy the performance
obligations of the promised products or services under the terms of
the agreement. The Company defines backlog as contractual
commitments to customers for which the Company’s performance
obligations have not been met, including with respect to new orders
and contracts for which the Company has not begun any performance.
Management utilizes new orders and backlog to evaluate the health
of the industries in which the Company operates, the Company’s
current and future results of operations and financial prospects,
and strategies for business development. The Company believes that
new orders and backlog are useful to investors as supplemental
metrics by which to measure the Company’s current performance and
prospective results of operations and financial performance. The
Company defines book-to-bill ratio as new orders divided by
revenue. The Company believes this is a useful metric to assess
supply and demand, including order strength versus order
fulfillment.
The Company views its Gross Leverage Ratio per
its credit agreement, as defined in the Second Amendment to its
Fourth Amended and Restated Credit Agreement dated August 12, 2022,
as an important indication of the Company’s financial health and
believes it is useful to investors as an indicator of the Company’s
ability to service its existing indebtedness and borrow additional
funds for its investing and operational needs.
The Company defines quarterly average working
capital as a percent of sales as the average working capital for
the trailing four months divided by four times net sales for the
quarter.
Forward-Looking Statements
This release may contain “forward-looking”
statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended, and Section 27A of the Securities
Act of 1933, as amended. Forward-looking statements provide
management’s current expectations of future events based on certain
assumptions and include any statement that does not directly relate
to any historical or current fact. Sentences containing words such
as “believe,” “intend,” “plan,” “may,” “expect,” “should,” “could,”
“anticipate,” “estimate,” “predict,” “project,” or their negatives,
or other similar expressions of a future or forward-looking nature
generally should be considered forward-looking statements.
Forward-looking statements in this earnings release are based on
management’s current expectations and assumptions about future
events that involve inherent risks and uncertainties and may
concern, among other things, the Company’s expectations relating to
our strategy, goals, projections, and plans regarding our financial
position, liquidity, capital resources, and results of operations
and decisions regarding our strategic growth initiatives, market
position, and product development. While the Company considers
these expectations and assumptions to be reasonable, they are
inherently subject to significant business, economic, competitive,
regulatory, and other risks and uncertainties, most of which are
difficult to predict and many of which are beyond the Company’s
control. The Company cautions readers that various factors could
cause the actual results of the Company to differ materially from
those indicated by forward-looking statements. Accordingly,
investors should not place undue reliance on forward-looking
statements as a prediction of actual results. Among the factors
that could cause the actual results to differ materially from those
indicated in the forward-looking statements are risks and
uncertainties related to: any future global health crises, and the
related social, regulatory, and economic impacts and the response
thereto by the Company, our employees, our customers, and national,
state, or local governments; a continuation or worsening of the
adverse economic conditions in the markets we serve, including
recession, the continued volatility in the prices for oil and gas,
governmental travel restrictions, project delays, and budget
shortfalls, or otherwise; volatility in the global capital markets,
including interest rate fluctuations, which could adversely affect
our ability to access the capital markets on terms that are
favorable to us; restrictions on our ability to draw on our credit
agreement, including as a result of any future inability to comply
with restrictive covenants contained therein; a decrease in freight
or transit rail traffic; environmental matters, including any costs
associated with any remediation and monitoring of such matters; the
risk of doing business in international markets, including
compliance with anti-corruption and bribery laws, foreign currency
fluctuations and inflation, and trade restrictions or embargoes;
our ability to effectuate our strategy, including cost reduction
initiatives, and our ability to effectively integrate acquired
businesses or to divest businesses, such as the recent dispositions
of the Track Components, Chemtec, and Ties businesses, and
acquisitions of the Skratch Enterprises Ltd., Intelligent Video
Ltd., and VanHooseCo Precast LLC businesses and to realize
anticipated benefits; costs of and impacts associated with
shareholder activism; the timeliness and availability of materials
from our major suppliers, as well as the impact on our access to
supplies of customer preferences as to the origin of such supplies,
such as customers’ concerns about conflict minerals; labor
disputes; cyber-security risks such as data security breaches,
malware, ransomware, “hacking,” and identity theft, which could
disrupt our business and may result in misuse or misappropriation
of confidential or proprietary information, and could result in the
disruption or damage to our systems, increased costs and losses, or
an adverse effect to our reputation; the continuing effectiveness
of our ongoing implementation of an enterprise resource planning
system; changes in current accounting estimates and their ultimate
outcomes; the adequacy of internal and external sources of funds to
meet financing needs, including our ability to negotiate any
additional necessary amendments to our credit agreement or the
terms of any new credit agreement, and reforms regarding the use of
SOFR as a benchmark for establishing applicable interest rates; the
Company’s ability to manage its working capital requirements and
indebtedness; domestic and international taxes, including estimates
that may impact taxes; domestic and foreign government regulations,
including tariffs; economic conditions and regulatory changes
caused by the United Kingdom’s exit from the European Union;
geopolitical conditions, including the conflict in Ukraine; a lack
of state or federal funding for new infrastructure projects; an
increase in manufacturing or material costs; the loss of future
revenues from current customers; and risks inherent in litigation
and the outcome of litigation and product warranty claims. Should
one or more of these risks or uncertainties materialize, or should
the assumptions underlying the forward-looking statements prove
incorrect, actual outcomes could vary materially from those
indicated. Significant risks and uncertainties that may affect the
operations, performance, and results of the Company’s business and
forward-looking statements include, but are not limited to, those
set forth under Item 1A, “Risk Factors,” and elsewhere in our
Annual Report on Form 10-K for the year ended December 31,
2022, or as updated and/or amended by our other current or periodic
filings with the Securities and Exchange Commission.
The forward-looking statements in this release
are made as of the date of this release and we assume no obligation
to update or revise any forward-looking statement, whether as a
result of new information, future developments, or otherwise,
except as required by the federal securities laws.
Investor Relations:Stephanie
Schmidt(412) 928-3417investors@lbfoster.com
L.B. Foster Company415 Holiday DriveSuite
100Pittsburgh, PA 15220
|
L.B. FOSTER COMPANY AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
(Unaudited) |
(In thousands, except per share data) |
|
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
Sales of
goods |
|
$ |
132,167 |
|
|
$ |
116,584 |
|
|
$ |
230,705 |
|
|
$ |
201,005 |
|
Sales of
services |
|
|
15,867 |
|
|
|
14,931 |
|
|
|
32,817 |
|
|
|
29,304 |
|
Total
net sales |
|
|
148,034 |
|
|
|
131,515 |
|
|
|
263,522 |
|
|
|
230,309 |
|
Cost of
goods sold |
|
|
101,069 |
|
|
|
95,331 |
|
|
|
179,134 |
|
|
|
165,176 |
|
Cost of
services sold |
|
|
14,713 |
|
|
|
12,891 |
|
|
|
28,845 |
|
|
|
25,393 |
|
Total
cost of sales |
|
|
115,782 |
|
|
|
108,222 |
|
|
|
207,979 |
|
|
|
190,569 |
|
Gross
profit |
|
|
32,252 |
|
|
|
23,293 |
|
|
|
55,543 |
|
|
|
39,740 |
|
Selling
and administrative expenses |
|
|
24,528 |
|
|
|
19,394 |
|
|
|
45,951 |
|
|
|
36,692 |
|
Amortization expense |
|
|
1,375 |
|
|
|
1,419 |
|
|
|
2,740 |
|
|
|
2,855 |
|
Operating profit |
|
|
6,349 |
|
|
|
2,480 |
|
|
|
6,852 |
|
|
|
193 |
|
Interest
expense - net |
|
|
1,574 |
|
|
|
384 |
|
|
|
2,962 |
|
|
|
754 |
|
Other
expense (income) - net |
|
|
719 |
|
|
|
(701 |
) |
|
|
2,546 |
|
|
|
(1,264 |
) |
Income
before income taxes |
|
|
4,056 |
|
|
|
2,797 |
|
|
|
1,344 |
|
|
|
703 |
|
Income
tax expense |
|
|
563 |
|
|
|
821 |
|
|
|
22 |
|
|
|
313 |
|
Net
income |
|
|
3,493 |
|
|
|
1,976 |
|
|
|
1,322 |
|
|
|
390 |
|
Net loss
attributable to noncontrolling interest |
|
|
(38 |
) |
|
|
(34 |
) |
|
|
(57 |
) |
|
|
(54 |
) |
Net
income attributable to L.B. Foster Company |
|
$ |
3,531 |
|
|
$ |
2,010 |
|
|
$ |
1,379 |
|
|
$ |
444 |
|
Basic
earnings per common share |
|
$ |
0.32 |
|
|
$ |
0.18 |
|
|
$ |
0.12 |
|
|
$ |
0.04 |
|
Diluted
earnings per common share |
|
$ |
0.32 |
|
|
$ |
0.18 |
|
|
$ |
0.12 |
|
|
$ |
0.04 |
|
Average number of common
shares outstanding - Basic |
|
|
10,807 |
|
|
|
10,715 |
|
|
|
10,800 |
|
|
|
10,700 |
|
Average number of common
shares outstanding - Diluted |
|
|
10,878 |
|
|
|
10,814 |
|
|
|
10,866 |
|
|
|
10,809 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
L.B. FOSTER COMPANY AND SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(In thousands) |
|
|
|
June 30,2023 |
|
December 31,2022 |
|
|
(Unaudited) |
|
|
ASSETS |
|
|
|
|
Current
assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
3,880 |
|
|
$ |
2,882 |
|
Accounts receivable - net |
|
|
74,249 |
|
|
|
82,455 |
|
Contract assets - net |
|
|
34,011 |
|
|
|
33,613 |
|
Inventories - net |
|
|
79,451 |
|
|
|
75,721 |
|
Other current assets |
|
|
12,182 |
|
|
|
11,061 |
|
Total current assets |
|
|
203,773 |
|
|
|
205,732 |
|
Property, plant, and equipment - net |
|
|
76,948 |
|
|
|
85,344 |
|
Operating lease right-of-use assets - net |
|
|
15,770 |
|
|
|
17,291 |
|
Other
assets: |
|
|
|
|
Goodwill |
|
|
31,404 |
|
|
|
30,733 |
|
Other intangibles - net |
|
|
21,256 |
|
|
|
23,831 |
|
Deferred tax assets |
|
|
— |
|
|
|
24 |
|
Other assets |
|
|
2,417 |
|
|
|
2,355 |
|
TOTAL
ASSETS |
|
$ |
351,568 |
|
|
$ |
365,310 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts payable |
|
$ |
43,933 |
|
|
$ |
48,782 |
|
Deferred revenue |
|
|
15,969 |
|
|
|
19,452 |
|
Accrued payroll and employee benefits |
|
|
8,709 |
|
|
|
10,558 |
|
Current portion of accrued settlement |
|
|
8,000 |
|
|
|
8,000 |
|
Current maturities of long-term debt |
|
|
102 |
|
|
|
127 |
|
Other accrued liabilities |
|
|
14,928 |
|
|
|
16,192 |
|
Total current liabilities |
|
|
91,641 |
|
|
|
103,111 |
|
Long-term debt |
|
|
89,403 |
|
|
|
91,752 |
|
Deferred tax liabilities |
|
|
1,718 |
|
|
|
3,109 |
|
Long-term portion of accrued settlement |
|
|
6,000 |
|
|
|
8,000 |
|
Long-term operating lease liabilities |
|
|
12,669 |
|
|
|
14,163 |
|
Other long-term liabilities |
|
|
7,545 |
|
|
|
7,577 |
|
Stockholders’ equity: |
|
|
|
|
Common stock |
|
|
111 |
|
|
|
111 |
|
Paid-in capital |
|
|
40,919 |
|
|
|
41,303 |
|
Retained earnings |
|
|
124,548 |
|
|
|
123,169 |
|
Treasury stock |
|
|
(4,846 |
) |
|
|
(6,240 |
) |
Accumulated other comprehensive loss |
|
|
(18,536 |
) |
|
|
(21,165 |
) |
Total L.B. Foster Company stockholders’ equity |
|
|
142,196 |
|
|
|
137,178 |
|
Noncontrolling interest |
|
|
396 |
|
|
|
420 |
|
Total stockholders’ equity |
|
|
142,592 |
|
|
|
137,598 |
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
351,568 |
|
|
$ |
365,310 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Disclosures(Unaudited)
This earnings release discloses earnings before
interest, taxes, depreciation, and amortization (“EBITDA”),
adjusted EBITDA, net debt, and adjusted EBITDA leverage, which are
non-GAAP financial measures. The Company believes that EBITDA
is useful to investors as a supplemental way to evaluate the
ongoing operations of the Company’s business since EBITDA may
enhance investors’ ability to compare historical periods as it
adjusts for the impact of financing methods, tax law and strategy
changes, and depreciation and amortization. In addition, EBITDA is
a financial measure that management and the Company’s Board of
Directors use in their financial and operational decision-making
and in the determination of certain compensation programs. Adjusted
EBITDA adjusts for certain charges to EBITDA from continuing
operations that the Company believes are unusual, non-recurring,
unpredictable, or non-cash. The Company believes adjusted EBITDA
leverage is a useful metric for investors as it enhances investors’
ability to understand the change adjusted EBITDA respective to the
change in sales.
In the three and six months ended June 30,
2023, the Company made adjustments to exclude the loss on
divestitures and VanHooseCo contingent consideration. In the three
and six months ended June 30, 2022, the Company made
adjustments to exclude acquisition costs, insurance proceeds, and
the gain on the sale of its steel Piling Products business. The
Company believes the results adjusted to exclude these items are
useful to investors as these items are nonroutine in nature.
The Company views net debt, which is total debt
less cash and cash equivalents, as an important metric of the
operational and financial health of the organization and believes
it is useful to investors as indicators of its ability to incur
additional debt and to service its existing debt.
Non-GAAP financial measures are not a
substitute for GAAP financial results and should only be considered
in conjunction with the Company’s financial information that is
presented in accordance with GAAP. Quantitative reconciliations of
EBITDA, adjusted EBITDA, and net debt (in thousands):
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
(Unaudited) |
|
(Unaudited) |
Adjusted EBITDA
Reconciliation |
|
|
|
|
|
|
|
|
Net income, as reported |
|
$ |
3,493 |
|
$ |
1,976 |
|
|
$ |
1,322 |
|
|
$ |
390 |
|
Interest
expense - net |
|
|
1,574 |
|
|
384 |
|
|
|
2,962 |
|
|
|
754 |
|
Income
tax expense |
|
|
563 |
|
|
821 |
|
|
|
22 |
|
|
|
313 |
|
Depreciation expense |
|
|
2,484 |
|
|
1,876 |
|
|
|
4,989 |
|
|
|
3,814 |
|
Amortization expense |
|
|
1,375 |
|
|
1,419 |
|
|
|
2,740 |
|
|
|
2,855 |
|
Total EBITDA |
|
$ |
9,489 |
|
$ |
6,476 |
|
|
$ |
12,035 |
|
|
$ |
8,126 |
|
Loss
(gain) on divestitures |
|
|
1,041 |
|
|
(489 |
) |
|
|
3,074 |
|
|
|
(489 |
) |
Acquisition costs |
|
|
— |
|
|
462 |
|
|
|
— |
|
|
|
539 |
|
Insurance proceeds |
|
|
— |
|
|
(318 |
) |
|
|
— |
|
|
|
(790 |
) |
VanHooseCo contingent consideration |
|
|
71 |
|
|
— |
|
|
|
(26 |
) |
|
|
— |
|
Adjusted EBITDA |
|
$ |
10,601 |
|
$ |
6,131 |
|
|
$ |
15,083 |
|
|
$ |
7,386 |
|
|
|
Three Months EndedJune 30, |
|
Change |
|
Six Months EndedJune 30, |
|
Change |
|
|
2023 |
|
2022 |
|
2023 vs. 2022 |
|
2023 |
|
2022 |
|
2023 vs. 2022 |
Adjusted EBITDA Leverage Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
10,601 |
|
$ |
6,131 |
|
$ |
4,470 |
|
|
$ |
15,083 |
|
$ |
7,386 |
|
$ |
7,697 |
|
Total
net sales |
|
|
148,034 |
|
|
131,515 |
|
|
16,519 |
|
|
|
263,522 |
|
|
230,309 |
|
|
33,213 |
|
Adjusted EBITDA leverage |
|
|
|
|
|
|
27.1 |
% |
|
|
|
|
|
|
23.2 |
% |
|
|
June 30,2023 |
|
March 31,2023 |
|
September 30,2022 |
Net Debt Reconciliation |
|
|
|
|
|
|
Total debt |
|
$ |
89,505 |
|
|
$ |
80,096 |
|
|
$ |
98,919 |
|
Less:
cash and cash equivalents |
|
|
(3,880 |
) |
|
|
(2,639 |
) |
|
|
(4,943 |
) |
Net debt |
|
$ |
85,625 |
|
|
$ |
77,457 |
|
|
$ |
93,976 |
|
L B Foster (NASDAQ:FSTR)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
L B Foster (NASDAQ:FSTR)
Gráfica de Acción Histórica
De May 2023 a May 2024