Business
L.B. Foster Announces Sale of IOS Test & Inspection Services Business
PITTSBURGH, Sept. 09, 2020 (GLOBE NEWSWIRE) -- L.B. Foster Company (NASDAQ: FSTR), a leading manufacturer and distributor of products and provider of services
About this update from L.b. Foster Company
[{"type":"text","content":"PITTSBURGH, Sept. 09, 2020 (GLOBE NEWSWIRE) -- L.B. Foster Company (NASDAQ: FSTR), a leading manufacturer and distributor of products and provider of services for transportation and energy infrastructure, announced today that it completed the sale of the issued and outstanding membership interests of its upstream oil and gas IOS Test and Inspection Services business to an unrelated third party buyer. The Company received $4.0 million in cash from the buyer and anticipates a cash tax refund of approximately $9.0 million to be received in 2021 resulting from the sale. L.B. Foster Company believes that the disposition should generate significant additional tax benefits and result in reduction of tax liabilities in future periods. The Company is currently working with its tax advisors to quantify those estimated tax benefits.\n The Test and Inspection Services business produced revenues of approximately $11.1 million, gross profit (loss) of approximately $(2.6) million, and adjusted EBITDA1 of $(2.7) million for the six-month period ended June 30, 2020. For the year ended December 31, 2019, the Test and Inspection Services business generated revenues of $38.6 million, gross profit of $0.4 million, and adjusted EBITDA1 of $(1.8) million. Beginning with the quarter ending September 30, 2020, L.B. Foster Company will present the Test and Inspection Services business as discontinued operations within its financial statements. The sale represents a strategic shift away from providing services to the upstream oil and gas market. This divestiture also changes the risk profile of the Company by (a) eliminating dependence on the upstream energy market and the liability associated with serving upstream applications; (b) reducing exposure to a volatile industry that can turn-off demand quickly under poor conditions; and (c) avoiding frequent cycles from a global oil market that has market share wars using price. On a prospective basis, the Company’s tubular and energy businesses will continue to be focused on core competencies around corrosion protection and measurement systems in midstream pipeline applications, where the market has been much less volatile and tends to have longer term investments and associated backlog compared to upstream activities. Bob Bauer, President and Chief Executive Officer, commented on the divestiture; “Our decisi...