L.B. Foster Reports First Quarter Operating Results

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PITTSBURGH, May 2, 2011 /CNW/ -- L.B. Foster Company (NASDAQ: FSTR), a leading manufacturer, fabricator, and distributor of products and services for rail, construction, energy and utility markets, today reported its 2011 first quarter operating results, including the following items:

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    (Logo:  http://photos.prnewswire.com/prnh/20101222/MM21387LOGO )

    --  First quarter sales increased by $35.1 million or 42.8% due to a
strong
        sales quarter by Portec Rail Products Inc., as well as a 14.4% sales
        increase in the legacy L.B. Foster business.

    --  Gross Profit margin was 14.9%, 20 basis points better than the prior
        year.
        --  The Portec Rail Products business contributed a gross margin of
            21.7% which, as expected, included charges from purchase
accounting
            related asset step-ups.
        --  The legacy Foster margins were lower than the prior year due to a
            weak first quarter in our precast buildings division, as well as
            unabsorbed plant costs at our Grand Island, NE concrete tie
            facility as a limited amount of production was concluded in the
            first quarter and we began dismantling the equipment.

    --  Selling and administrative expense increased $6.5 million, principally
        due to the inclusion of the Portec Rail Products results.

    --  First quarter net income was $0.7 million or $0.07 per diluted share
        compared to $1.8 million or $0.17 per diluted share last year. 
Factors
        negatively impacting net income for this quarter were:
        --  The recognition of expense related to the sale of Portec inventory
            that was written up to fair market value as of the acquisition
date
            resulting in increased cost of goods sold of $2.5 million ($0.17
            per diluted share).
        --  Acquisition related amortization and depreciation of
            definitive-lived intangible and tangible assets stepped up to
            market value of $0.8 million ($0.06 per diluted share).
        --  LIFO adjustments were $0.4 million ($0.03 per diluted share)
            unfavorable compared to the prior year.

    --  Adjusted EBITDA was $6.5 million compared to $5.0 million in the prior
        year quarter.

    --  First quarter bookings were $163.8 million compared to $106.1 million
        last year, an increase of 54.4%.  Excluding Portec, bookings were
27.3%
        higher than last year.  At quarter end, our backlog was $237.1
million,
        15.8% higher than the prior year (4.9% without Portec).

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Stan L. Hasselbusch, L. B. Foster's president and chief executive officer, said, "Our performance in the first quarter, which is traditionally our weakest quarter due to seasonality, was negatively impacted by expenses related to the acquisition of Portec Rail Products, Inc. and to our Grand Island facility. The most significant of these costs, a $2.5 million charge to gross profit, is a non-recurring expense that relates to the requirement to write-up inventory purchased in an acquisition to net realizable value, which takes most of the margin away when it is sold. This negative adjustment has been completely flushed through our results in the first quarter and will not impact us the rest of the year." Mr. Hasselbusch went on to say, "Our margins were not where we wanted them as they were negatively impacted by the Grand Island shut down, a weak precast buildings performance and a disadvantageous sales mix as distribution sales increased by 25% while distribution margins declined by 120 basis points. With regard to the Portec acquisition, we have moved past an intense 120 day integration period and are planning to continue these efforts for the remainder of the year. We continue to see many promising opportunities in the friction management and Salient product lines and are excited about the long term prospects for these businesses." Mr. Hasselbusch concluded by adding, "As we move through 2011, we expect to continue to experience a highly competitive market environment and we also anticipate significantly extended delays before a new transportation bill is passed, but we are optimistic that the overall economy is improving. Our bookings and backlog are very strong and we expect this strength to be reflected in our results for the remainder of this year."

L.B. Foster Company will conduct a conference call and webcast to discuss its first quarter 2011 operating results and general market activity and business conditions on Monday, May 2, 2011 at 11:00am ET. The call will be hosted by Mr. Stan Hasselbusch, President and Chief Executive Officer. Listen via audio on the L.B. Foster web site: www.lbfoster.com, by accessing the Investor Relations page. The replay can also be heard via telephone at (888) 286-8010 by entering pass code 17288494.

This release may contain forward-looking statements that involve risks and uncertainties. Actual results could differ materially from the results anticipated in any forward-looking statement. Factors that could cause or contribute to these material differences include, but are not limited to, an economic slowdown in the markets we serve; a decrease in freight or passenger rail traffic; a lack of state or federal funding for new infrastructure projects; an increase in manufacturing or material costs; and other factors contained in the Company's filings with the Securities and Exchange Commission. The Company urges all interested parties to read these reports to gain a better understanding of the many business and other risks that the Company faces. The forward-looking statements contained in this press release are made only as of the date hereof, and the Company assumes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise.

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         L. B. FOSTER COMPANY AND SUBSIDIARIES
    CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
       (In Thousands, Except Per Share Amounts)
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                                         Three Months
                                            Ended
                                          March 31,
                                          ---------
                                       2011          2010
                                       ----          ----
                                         (Unaudited)
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NET SALES $117,104 $82,002

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    COSTS AND EXPENSES:
    Cost of goods sold               99,638        69,929
    Selling and administrative
      expenses                       15,696         9,190
    Amortization expense                704             3
    Interest expense                    138           245
    (Gain) loss on joint venture        (87)          147
    Interest income                     (56)          (74)
    Other expense (income)               87          (102)
                                    116,120        79,338
                                    -------        ------
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INCOME BEFORE INCOME TAXES 984 2,664

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    INCOME TAX EXPENSE                  305           911
                                        ---           ---
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    NET INCOME                         $679        $1,753
                                       ====        ======
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    BASIC EARNINGS PER COMMON
     SHARE                            $0.07         $0.17
                                      =====         =====
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    DILUTED EARNINGS PER COMMON
     SHARE                            $0.07         $0.17
                                      =====         =====
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    AVERAGE NUMBER OF COMMON
     SHARES
    OUTSTANDING - BASIC              10,285        10,172
                                     ======        ======
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    AVERAGE NUMBER OF COMMON
     SHARES
    OUTSTANDING - DILUTED            10,401        10,315
                                     ======        ======






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                L.B. Foster Company and Subsidiaries
                Condensed Consolidated Balance Sheets
                           (In thousands)
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                                              March         December
                                               31,             31,
                                                  2011           2010
                                                  ----           ----
    ASSETS                                 (Unaudited)
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    CURRENT ASSETS:
    ---------------
       Cash and cash items                     $58,884        $74,800
       Accounts and notes receivable:
          Trade                                 60,890         66,908
          Other                                    956          2,789
       Inventories                             101,779         90,367
       Current deferred tax assets               1,660            911
       Prepaid income tax                        1,203            972
       Other current assets                      2,525          2,535
             Total Current Assets              227,897        239,282
                                               -------        -------
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    OTHER ASSETS:
    -------------
       Property, plant & equipment-net          47,130         46,336
       Goodwill                                 44,369         44,369
       Other intangibles - net                  44,413         45,079
       Investments                               2,074          1,987
       Other non-current assets                  1,445          1,663
                                                 -----          -----
              Total Other Assets               139,431        139,434
                                               -------        -------
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                                              $367,328       $378,716
                                              ========       ========
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    LIABILITIES AND STOCKHOLDERS'
     EQUITY
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    CURRENT LIABILITIES:
    --------------------
       Current maturities on other long-
        term debt                               $2,358         $2,402
       Accounts payable-trade and other         51,814         45,533
       Deferred revenue                         11,460         16,868
       Accrued payroll and employee
        benefits                                 5,735          9,054
       Other accrued liabilities                14,242         22,962
             Total Current Liabilities          85,609         96,819
                                                ------         ------
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    OTHER LONG-TERM DEBT                         1,103          2,399
                                                 -----          -----
    DEFERRED TAX LIABILITIES                    12,065         11,863
                                                ------         ------
    OTHER LONG-TERM LIABILITIES                 11,274         11,888
                                                ------         ------
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    STOCKHOLDERS' EQUITY:
    ---------------------
       Class A Common stock                        111            111
       Paid-in capital                          46,849         47,286
       Retained earnings                       233,701        233,279
       Treasury stock                          (23,090)       (23,861)
       Accumulated other comprehensive
        loss                                      (294)        (1,068)
                                                  ----         ------
            Total Stockholders' Equity         257,277        255,747
                                               -------        -------
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                                              $367,328       $378,716
                                              ========       ========




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L.B. Foster Company

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                 Reconciliation of GAAP to Non-GAAP Financial Measures




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L.B. Foster (Foster) reports its financial results in accordance with generally accepted accounting principles (GAAP). However, Foster believes that certain non-GAAP financial measures are useful in managing our performance. One such non-GAAP measure is Adjusted EBITDA.

Adjusted EBITDA, which Foster defines as net income before interest, taxes, depreciation, amortization and other non-cash charges (principally related to purchase accounting adjustments, such as the $2.5 million charge taken in the first quarter of 2011 related to the write-up of inventory owned by Portec to fair value less cost to sell on the date of acquisition) is used due to its wide acceptance as a measure of operating profitability before non-operating expenses (interest and taxes) and noncash charges (depreciation and amortization and other noncash charges). Additionally, Adjusted EBITDA is one of the performance measures used in Foster's debt covenant calculations and incentive compensation plan.

This non-GAAP financial measure is not a substitute for GAAP financial results and should only be considered in conjunction with Foster's financial information that is presented in accordance with GAAP. A quantitative reconciliation of GAAP net income to Adjusted EBITDA is provided in the table below.

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    Reconciliation of GAAP Net Income to Adjusted EBITDA
                         (Unaudited)
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                                           Three Months Ended
                                               March 31,
                                         2011              2010
                                         ----              ----
                                            ($ in thousands)
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Net income $679 $1,753

Income tax expense 305 911

Interest, net 82 171

Depreciation and amortization 2,939 2,163

EBITDA, Non-GAAP 4,005 4,998

Adjustments or charges

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    Difference between net
     realizable value and cost basis
     of                                 2,493                 0
    inventory sold due to purchase
     accounting step-up
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    Adjusted EBITDA                    $6,498            $4,998
                                       ======            ======



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    Contact:
    David Russo           Phone: 412.928.3417         L.B. Foster
                           Email:
                           Investors@Lbfosterco.com   415 Holiday Drive
                          Website:  www.lbfoster.com  Pittsburgh, PA  15220



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SOURCE L.B. Foster Company

For further information: Web Site: http://www.lbfoster.com

Profil de l'entreprise

L.B. Foster Company

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