L.b. Foster Company · NASDAQ:FSTR
L.b. Foster — Q2 2024 Earnings Presentation
38 slides from L.b. Foster's earnings presentation, Aug 6, 2024
Slide 1: L.B. Foster Company Earnings Presentation
L.B. Foster Company Earnings Presentation Nasdaq - FSTR August 6, 2024
Slide 2: Safe Harbor Disclaimer
Safe Harbor Disclaimer Safe Harbor Statement Non-GAAP Financial Measures This earnings presentation discloses the following non-GAAP measures: This presentation may contain “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section
Slide 3: L.B. Foster Overview
L.B. Foster Overview Innovating to solve global infrastructure challenges 2024 Guidance > Founded in 1902; headquartered in Pittsburgh, Pennsylvania (As of August 6, 2024) Low High Revenue $ 525 $ 550 > Locations throughout North America, South America, Europe, and Asia Adj. EBITDA1 $ 34 $ 37 2 > 18
Slide 4: Opening Remarks
Opening Remarks John Kasel President and CEO L.B. Foster Q2 2024 Earnings Presentation 4 August 6, 2024
Slide 5: Opening Remarks...3-Year Recap
Opening Remarks...3-Year Recap Our strategic transformation journey… 2024 expectations… Completed nine strategic 2024 Guidance Updated Improved Results vs. 2021 Refreshed enterprise portfolio moves in 3 years Net sales strategy in 2021 TTM Sales $545.3M, up $525M - $550M Five business / product 6.2%
Slide 6: Financial Review
Financial Review Bill Thalman Executive Vice President and CFO L.B. Foster Q2 2024 Earnings Presentation 6 August 6, 2024
Slide 7: Second Quarter Results
Second Quarter Results As of and for the quarter ended June 30, 2024: $ in millions, unless otherwise noted YoY Δ > Organic sales1 down 3.4%, and sales down 1.5% due to divestiture / exit activity SALES 140.8 (7.2) > Gross profit down 5.4% with margins declining GROSS PROFIT 30.5 (1.7) 10 bps due to
Slide 8: Year over Year Change in Sales and Adj. EBITDA
1 Year over Year Change in Sales and Adj. EBITDA Changes to Net Sales Changes to Adjusted EBITDA1 ($ in millions) ($ in millions) $12 $150 $148.0 $(5.0) $(2.2) $140.8 $125 $10 $10.6 $(3.8) $100 $8 $1.2 $8.1 $75 $6 $50 $4 $25 $2 $0 $0 Q2 2023 Legacy Business Divestitures & Q2 2024 Q2 2023 Adj. Legacy
Slide 9: Sales and Gross Profit Trend – Trailing 4 Quarters
Sales and Gross Profit Trend – Trailing 4 Quarters 1 1,2 1 Adjusted Sales and YoY Organic Growth Adjusted Gross Profit ($ in millions) $175 $40 22% 21.8% 21.7% 21.5% +13% 21.2% 21.1% $150 20.8% (3)% $35 20% $148 $147 +8% 20.2% $32 $141 19.5% $31 $137 $135 +17% $125 $134 $31 $124 $30 $29 18% Gross Pr
Slide 10: Rail, Technologies, and Services – Q2 Results
Rail, Technologies, and Services – Q2 Results Lower volumes and market pricing in the domestic rail business driving weaker results Rail, Technologies Technologies, Sales GP Margin and and Services Services (6.6)% (80) bps $100 25% 20% $75 15% $50 $92 $86 21.7% 20.9% 10% $25 5% $0 0% Q2 2023 Q2 2024
Slide 11: Infrastructure Solutions – Q2 Results
Infrastructure Solutions – Q2 Results Portfolio actions completed in the Steel Products business unit driving improved profitability Infrastructure Sales GP Margin Solutions (2.2)% +90 bps $75 30% 25% $50 20% 15% $25 $56 $55 10% 22.0% 22.9% 5% $0 0% Q2 2023 Q2 2024 Q2 2023 Q2 2024 > Net sales decrea
Slide 12: Year to Date Results
Year to Date Results As of and for the six months ended June 30, 2024: YoY Δ > Organic sales1 increased 5.5% partially offset $ in millions, unless otherwise stated by a 4.9% decline from divestitures and product SALES 265.1 1.6 line exit activity GROSS PROFIT 56.8 1.2 > Gross profit increased $1.2M
Slide 13: Net Debt, Leverage, and Capital Allocation
1 Net Debt , Leverage, and Capital Allocation Sequential increase in net debt and leverage in line with expectations; improvements expected in 2nd Half > Second quarter net debt1 and Gross Leverage Ratio1,2 Net Debt1 and Gross Leverage Ratio1,2 elevated due to seasonal working capital needs and Per
Slide 14: Capital Allocation Priorities
Capital Allocation Priorities Relentless pursuit of shareholder returns showing results in equity valuation Capital Allocation Investment for Growth Debt Reduction Growth Capital Expenditures 1 > Target maintaining Gross Leverage Ratio at ~2.0x; > Targeting 2.5% of sales to support organic growth im
Slide 15: New Orders, Revenue, and Book-to-Bill Ratios
1 1 New Orders , Revenue, and Book-to-Bill Ratios Consolidated New Orders and Revenue ($ in millions) $200 $184 $150 $171 $148 $145 $141 $135 $132 $100 $124 $100 $106 $50 $0 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Total New Orders Total Revenue TTM Q2 2024 Book-to-Bill Ratio: 0.93 : 1.00 Rail, Techn
Slide 16: Backlog Trends
1 Backlog Trends Consolidated Backlog ($ in millions) $300 $250 $290 $243 $250 $200 $222 $214 $150 $100 $50 $0 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Rail, Technologies, and Services Backlog Infrastructure Solutions Backlog ($ in millions) ($ in millions) $150 $175 $125 $150 $132 $158 $150 $115 $12
Slide 17: Closing Remarks
Closing Remarks John Kasel President and CEO L.B. Foster Q2 2024 Earnings Presentation 17 August 6, 2024
Slide 18: Market and Business Outlook
Market and Business Outlook Well-positioned to benefit from favorable demand driven by long-term infrastructure investment super cycle Government funding of large-scale Additional focus and funding for Record spending on parks and investments for freight rail, transit rail safety initiatives support
Slide 19: L.B. Foster Investment Thesis
L.B. Foster Investment Thesis Structural Improvement in Business portfolio transformation, organic growth and focused Profitability profitability initiatives manifesting in improved results Infrastructure pure play with a diverse set of avenues for Organic Growth Drivers in Place growth in multi-yea
Slide 20: Innovating to Solve Global Infrastructure Challenges
Innovating to Solve Global Infrastructure Challenges Near Term Goals (2025) REVENUE $580M - $620M GP % 22.0% - 23.0% ADJ. EBITDA1 $48M - $52M Relative Performance Chart: Russell 2000 vs FSTR Adj. EBITDA1 Margin ~8.0% Source: Google Performance range August 2023 - July 2024 L.B. Foster Q2 2024 Earnin
Slide 21: Thank you!
Thank you! L.B. Foster Q2 2024 Earnings Presentation We look forward to discussing our Q3 2024 results in early November 2024 L.B. Foster Q2 2024 Earnings Presentation 21 August 6, 2024
Slide 22: Appendix
Appendix L.B. Foster Q2 2024 Earnings Presentation 22 August 6, 2024
Slide 23: Condensed Balance Sheet - Assets
Condensed Balance Sheet - Assets Assets June 30, 2024 December 31, 2023 ($ in millions) Current assets: Cash and cash equivalents $ 4.0 $ 2.6 Accounts receivable - net 75.9 53.5 Contract assets 20.6 29.5 Inventories - net 80.1 73.5 Other current assets 10.9 9.0 Total current assets $ 191.5 $ 168.0 P
Slide 24: Condensed Balance Sheet – Liabilities and Equity
Condensed Balance Sheet – Liabilities and Equity Liabilities and Stockholders' Equity June 30, 2024 December 31, 2023 ($ in millions) Current liabilities: Accounts payable $ 45.9 $ 40.3 Deferred revenue 7.5 12.5 Other accrued liabilities 26.8 42.4 Current maturities of long-term debt 0.2 0.1 Total c
Slide 25: Condensed Income Statement – Q2
Condensed Income Statement – Q2 Three Months Ended Three Months Ended Delta June 30, 2024 June 30, 2023 ($ in millions except per share data) $ % of Sales $ % of Sales $ % Sales $ 140.8 $ 148.0 $ (7.2) (4.9)% Gross profit 30.5 21.7% 32.3 21.8% (1.7) (5.4) SG&A 24.9 17.7% 24.5 16.6% 0.4 1.5 Amortizat
Slide 26: Condensed Income Statement – YTD
Condensed Income Statement – YTD Six Months Ended Six Months Ended Delta June 30, 2024 June 30, 2023 ($ in millions except per share data) $ % of Sales $ % of Sales $ % Sales $ 265.1 $ 263.5 $ 1.6 0.6 % Gross profit 56.8 21.4% 55.5 21.1% 1.2 2.2 SG&A 47.6 18.0% 46.0 17.4% 1.7 3.7 Amortization expens
Slide 27: Condensed Cash Flows
Condensed Cash Flows Six months ended Six months ended June 30, 2024 June 30, 2023 ($ in millions) Net income and other non-cash items from operations $ 12.2 $ 11.9 Receivables (22.5) 6.6 Contract assets 8.5 (3.0) Inventory (6.6) (13.1) Payables and deferred revenue 0.3 1.1 Trade working capital sub
Slide 28: New Orders - QTD
New Orders - QTD New Orders Entered – Three Months Ended ($ in millions) June 30, 2024 June 30, 2023 March 31, 2024 YoY Delta Seq. Delta Rail, Technologies, and Services $ 117.0 $ 116.0 $ 83.7 $ 1.0 0.9 % $ 33.3 39.7 % Infrastructure Solutions 54.0 67.8 48.6 (13.8) (20.3) 5.4 11.0 Total $ 171.0 $ 18
Slide 29: New Orders and Backlog
New Orders and Backlog New Orders Entered – Six Months Ended ($ in millions) June 30, 2024 June 30, 2023 Delta Rail, Technologies, and Services $ 200.7 $ 189.7 $ 11.0 5.8 % Infrastructure Solutions 102.6 133.6 (30.9) (23.1) Total $ 303.4 $ 323.3 $ (19.9) (6.1)% Backlog – Six Months Ended ($ in milli
Slide 30: Segment Results – Q2
Segment Results – Q2 Three Months Ended Three Months Ended Segment Sales Delta June 30, 2024 June 30, 2023 ($ in millions) $ % Rail, Technologies, and Services $ 85.6 $ 91.6 $ (6.0) (6.6)% Infrastructure Solutions 55.2 56.4 (1.2) (2.2) Total $ 140.8 $ 148.0 $ (7.2) (4.9)% Three Months Ended Three Mo
Slide 31: Segment Results – YTD
Segment Results – YTD Six Months Ended Six Months Ended Segment Sales Delta June 30, 2024 June 30, 2023 ($ in millions) $ % Rail, Technologies, and Services $ 168.2 $ 156.0 $ 12.2 7.8 % Infrastructure Solutions 96.9 107.5 (10.6) (9.9) Total $ 265.1 $ 263.5 $ 1.6 0.6 % Six Months Ended Six Months End
Slide 32: Non-GAAP Measure: Adjusted EBITDA
Non-GAAP Measure: Adjusted EBITDA Trailing Twelve Twelve Months Three Months Ended Six Months Ended Months Ended Ended June 30, June 30, June 30, December 31, ($ in millions) 2024 2023 2024 2023 2024 2021 Net income, as reported $ 2.8 $ 3.5 $ 7.2 $ 1.3 $ 7.2 $ 3.5 Interest expense - net 1.5 1.6 2.6
Slide 33: Non-GAAP Measure: Funding Capacity
Non-GAAP Measure: Funding Capacity ($ in millions) June 30, 2024 Cash and cash equivalents $ 4.0 Total availability under the credit facility 130.0 Outstanding borrowings on revolving credit facility (86.6) Letters of credit outstanding (2.1) Net availability under the revolving credit facility1 $ 4
Slide 34: Non-GAAP Measure: Net Debt
1 Non-GAAP Measure: Net Debt June 30, March 31, December 31, September 30, June 30, March 31, December 31, September 30, 2024 2024 2023 2023 2023 2023 2022 2022 ($ in millions) Total debt $ 87.2 $ 78.1 $ 55.3 $ 71.7 $ 89.5 $ 80.1 $ 91.9 $ 98.9 Less: cash and cash equivalents (4.0) (3.1) (2.6) (3.0)
Slide 35: Non-GAAP Measure: Organic Sales
Non-GAAP Measure: Organic Sales Three Months Percent Change in Consolidated Organic Sales Ended Change ($ in millions) June 30, 2023 net sales, as reported $ 148.0 Decrease due to divestitures and exit (2.2) (1.5)% Change due to organic sales (5.0) (3.4)% 2024 net sales, as reported $ 140.8 (4.9)% T
Slide 36: Non-GAAP Measure: Organic Sales
Non-GAAP Measure: Organic Sales Six Months Percent Change in Consolidated Organic Sales Ended Change ($ in millions) June 30, 2023 net sales, as reported $ 263.5 Decrease due to divestitures and exit (12.9) (4.9)% Change due to organic sales 14.5 5.5 % 2024 net sales, as reported $ 265.1 0.6 % Three
Slide 37: Non-GAAP Measure: Organic Orders
Non-GAAP Measure: Organic Orders Three Months Percent Change in Rail, Technologies, and Services Organic Orders Ended Change ($ in millions) June 30, 2023 orders, as reported $ 116.0 Decrease due to divestiture (3.4) (2.9)% Change due to organic orders 4.4 3.8 % 2024 orders, as reported $ 117.0 0.9
Slide 38: Non-GAAP Measure: Adj. Results for Non-routine Items
Non-GAAP Measure: Adj. Results for Non-routine Items Three Months Ended Trailing Twelve Months Ended ($ in millions) September 30, September 30, June 30, 2024 2023 2022 Net sales, as reported $ 145.3 $ 130.0 $ 545.3 Bridge grid deck exit impact 2.0 — 2.0 Crossrail settlement adjustment — 4.0 — Net s