L.b. Foster Company · NASDAQ:FSTR
L.b. Foster — Q3 2023 Earnings Presentation
37 slides from L.b. Foster's earnings presentation, Nov 7, 2023
Slide 1: L.B. Foster Company Q3 2023 Earnings Presentation
L.B. Foster Company Q3 2023 Earnings Presentation Nasdaq - FSTR November 7, 2023
Slide 2: Safe Harbor Disclaimer
Safe Harbor Disclaimer Safe Harbor Statement Non-GAAP Financial Measures This investor 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 2023 Full Year Guidance Low High > Founded in 1902, headquartered in Pittsburgh, Pennsylvania 2022 Sales by Region ($ in millions) Revenue $ 530 $ 540 $600 > Locations throughout North America, South America, $34 YoY Growth 7%
Slide 4: Opening Remarks
Opening Remarks John Kasel President and CEO L.B. Foster Q3 2023 Earnings Presentation 4 November 7, 2023
Slide 5: Executive Summary – Quarter Highlights
Executive Summary – Quarter Highlights What we’ve accomplished… Where we’re going… Net sales of $145.3M up Net income of $0.5M 2023 Guidance Midpoints 11.8% YoY (up 10.0% Orders and Backlog favorable $2.6M YoY Reaffirmed adjusted for non-routine Remain Healthy despite $4.1M in costs items1); 12.6% a
Slide 6: Financial Review
Financial Review Bill Thalman Executive Vice President and CFO L.B. Foster Q3 2023 Earnings Presentation 6 November 7, 2023
Slide 7: Third Quarter Results
Third Quarter Results As of and for the quarter ended September 30, 2023: $ in millions, unless otherwise noted YoY Δ > Adjusted net sales1 up 12.6% organically and 2.2% from acquisitions, partially offset by 4.8% SALES 145.3 15.3 decline from divestitures GROSS PROFIT 28.2 5.1 > Adjusted gross prof
Slide 8: Year over Year Increase in Adj. Sales and Adj. EBITDA
1 1 Year over Year Increase in Adj. Sales and Adj. EBITDA 1 Changes to Adjusted Sales Changes to Adjusted EBITDA1 ($ in millions) ($ in millions) $12 $175 $11 $150 $10 $1.5 $10.6 $16.9 $3.5 $147.3 $9 $9.3 $125 $134.0 $0.2 $8 7.2% of $7 adjusted $100 sales1 $6 6.9% of adjusted $75 $5 sales1 $4 $50 $3
Slide 9: Sales and Gross Profit Trend – Trailing 4 Quarters
Sales and Gross Profit Trend – Trailing 4 Quarters 1 1 Consolidated Adjusted Sales and Consolidated Adjusted Gross Profit YoY Growth Rates $40 22% ($ in millions) 21.8% $175 21.2% 20.8% +13% +10% $35 20% 20.2% $150 +21% $32 19.5% $31 $148 $147 $137 $30 18% $134 +17% Gross Profit ($ in millions) $125
Slide 10: Rail, Technologies, and Services – Q3 Results
Rail, Technologies, and Services – Q3 Results Focus on rail safety / infrastructure improving domestic demand; U.K. market remains challenging Rail, Technologies Technologies, Sales GP Margin and and Services Services +12.3% +250 bps $100 25% 20% $75 15% $50 $87 10% 19.8% $77 17.3% $25 5% $0 0% Q3 2
Slide 11: Precast Concrete Products – Q3 Results
Precast Concrete Products – Q3 Results Improved margin due legacy sales volume and profitability initiatives coupled with accretive VanHooseCo sales Precast Concrete Sales GP Margin Products +33.9% +440 bps $40 25% 20% $30 15% $20 $39 24.0% 10% 19.6% $29 $10 5% 0% $0 Q3 2022 Q3 2023 > Net sales incr
Slide 12: Steel Products and Measurement – Q3 Results
Steel Products and Measurement – Q3 Results Reported sales and margin impacted by announced exit of bridge grid deck product line Steel Products and Sales GP Margin Measurement (16.7)% (840) bps $30 25% 20% $20 15% $24 10% $10 $20 17.1% 5% 8.7% $0 0% > Net sales include adverse impact of Q3 2022 Q3
Slide 13: Year to Date Results
Year to Date Results As of and for the nine months ended September 30, 2023: $ in millions, unless otherwise stated YoY Δ > Adjusted net sales1 increased 12.6% organically and 5.4% from acquisitions, offset by a 5.2% SALES 408.9 48.5 decline from divestitures GROSS PROFIT 83.8 20.9 > Adjusted gross
Slide 14: Net Debt, Leverage, and Capital Allocation
1 Net Debt , Leverage, and Capital Allocation Strengthening free cash flow in line with improved profitability and capital-light business model 1 2 > Strongest quarterly operating cash flow in four years Net Debt and Gross Leverage Ratio drove substantial decline in net debt1 and improved Per Credit
Slide 15: Capital Allocation Priorities
Capital Allocation Priorities Relentless pursuit of shareholder returns Capital Allocation Investment for Growth Debt Reduction Growth Capital Expenditures 1 > Target maintaining Gross Leverage Ratio at ~2.0x; > Targeting 1.5% - 2.0% of sales to support organic growth improving free cash flow outloo
Slide 16: New Orders, Revenue and Book-to-Bill Ratios
1 1 New Orders , Revenue and Book-to-Bill Ratios Consolidated New Orders and Revenue Rail, Technologies, and Services ($ in millions) ($ in millions) $200 $125 $184 $100 $116 $150 $140 $148 $145 $75 $92 $137 $130 $138 $137 $87 $100 $77 $74 $78 $74 $115 $100 $50 $64 $57 $50 $50 $25 $0 $0 Q3 2022 Q4 2
Slide 17: Backlog Trends
1,2 Backlog Trends Consolidated Backlog Rail, Technologies, and Services Backlog $350 $150 $300 $125 $132 $250 $290 $273 $272 $260 $100 $114 $243 $109 $105 $200 $94 $75 $150 $50 $100 $50 $25 $0 $0 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Precast Concrete Produc
Slide 18: Closing Remarks
Closing Remarks John Kasel President and CEO L.B. Foster Q3 2023 Earnings Presentation 18 November 7, 2023
Slide 19: Market and Business Outlook
Market and Business Outlook Strong demand outlook across the portfolio stemming from domestic infrastructure spend > Continued focus on rail safety and U.S. infrastructure spend expected to support long-term growth for Rail, Technologies, and Services domestic end-markets > Cautious outlook in the U
Slide 20: Innovating to solve global infrastructure challenges
Innovating to solve global infrastructure challenges > A global technology solutions provider of engineered, Near Term Goals manufactured products and services that innovates to (2025) solve global INFRASTRUCTURE challenges REVENUE $580M - $620M GP % 22.0% - 23.0% ADJ. EBITDA1 $48M - $52M Adj. EBITD
Slide 21: Thank you!
Thank you! L.B. Foster Q3 2023 Earnings Presentation L.B. Foster Q3 2023 Earnings Presentation 21 November 7, 2023
Slide 22: Appendix
Appendix L.B. Foster Q3 2023 Earnings Presentation 22 November 7, 2023
Slide 23: Condensed Balance Sheet - Assets
Condensed Balance Sheet - Assets September 30, 2023 December 31, 2022 Assets ($ in millions) Current assets: Cash and cash equivalents $ 3.0 $ 2.9 Accounts receivable - net 64.6 82.5 Contract assets 30.5 33.6 Inventories - net 82.0 75.7 Other current assets 9.7 11.1 Total current assets $ 189.8 $ 20
Slide 24: Condensed Balance Sheet – Liabilities and Equity
Condensed Balance Sheet – Liabilities and Equity September 30, 2023 December 31, 2022 Liabilities and Stockholders' Equity ($ in millions) Current liabilities: Accounts payable $ 44.9 $ 48.8 Deferred revenue 16.0 19.5 Other accrued liabilities 35.0 34.8 Current maturities of long-term debt 0.1 0.1 T
Slide 25: Condensed Income Statement – Q3
Condensed Income Statement – Q3 Three Months Ended Three Months Ended Delta September 30, 2023 September 30, 2022 ($ in millions except per share data) $ % of Sales $ % of Sales $ % Sales $ 145.3 $ 130.0 $ 15.3 11.8 % Gross profit 28.2 19.4% 23.1 17.8% 5.1 22.2 % SG&A 24.2 16.6% 22.6 17.4% 1.5 6.8 %
Slide 26: Condensed Income Statement – YTD
Condensed Income Statement – YTD Nine Months Ended Nine Months Ended Delta September 30, 2023 September 30, 2022 ($ in millions except per share data) $ % of Sales $ % of Sales $ % Sales $ 408.9 $ 360.3 $ 48.5 13.5 % Gross profit 83.8 20.5% 62.8 17.4% 20.9 33.3 % SG&A 70.1 17.1% 59.3 16.5% 10.8 18.2
Slide 27: Condensed Cash Flows
Condensed Cash Flows Nine Months Ended Nine Months Ended ($ in millions) September 30, 2023 September 30, 2022 Net income and other non-cash items from operations $ 16.9 $ 9.1 Receivables 15.9 (23.8) Contract assets (0.3) (1.0) Inventory (16.0) (21.6) Payables and deferred revenue 2.0 19.8 Trade wor
Slide 28: New Orders and Backlog
New Orders and Backlog New Orders Entered – Three Months Ended ($ in millions) September 30, 2023 September 30, 2022 Delta Rail, Technologies, and Services $ 49.8 $ 56.5 $ (6.7) (11.9)% Precast Concrete Products 27.4 30.7 (3.3) (10.8)% Steel Products and Measurement 23.1 50.1 (27.0) (53.9)% Total $
Slide 29: Segment Results – Q3
Segment Results – Q3 Three Months Ended Three Months Ended Segment Sales Delta September 30, 2023 September 30, 2022 ($ in millions) $ $ $ % Rail, Technologies, and Services $ 86.9 $ 77.4 $ 9.5 12.3 % Precast Concrete Products 38.6 28.9 9.8 33.9 % Steel Products and Measurement 19.8 23.8 (4.0) (16.7
Slide 30: Segment Results – YTD
Segment Results – YTD Nine Months Ended Nine Months Ended Segment Sales Delta September 30, 2023 September 30, 2022 ($ in millions) $ $ $ % Rail, Technologies, and Services $ 242.9 $ 222.9 $ 20.0 9.0 % Precast Concrete Products 96.8 67.5 29.3 43.4 % Steel Products and Measurement 69.2 70.0 (0.8) (1.
Slide 31: Non-GAAP Measure: Adjusted EBITDA
Non-GAAP Measure: Adjusted EBITDA Three Months Ended Nine Months Ended Trailing Twelve Months September 30, September 30, September 30, September 30, September 30, September 30, ($ in millions) 2023 2022 2023 2022 2023 2022 Net income, as reported $ 0.4 $ (2.1) $ 1.8 $ (1.7) $ (42.2) $ (2.1) Interes
Slide 32: Non-GAAP Measure: Funding Capacity & Free Cash Flow
Non-GAAP Measure: Funding Capacity & Free Cash Flow ($ in millions) September 30, 2023 Cash and cash equivalents $ 3.0 Total availability under the credit facility 130.0 Outstanding borrowings on revolving credit facility (71.5) Letters of credit outstanding (2.5) Net availability under the revolvin
Slide 33: Non-GAAP Measure: Net Debt
1 Non-GAAP Measure: Net Debt September 30, June 30, March 31, December 31, September 30, June 30, March 31, December 31, 2023 2023 2023 2022 2022 2022 2022 2021 ($ in millions) Total debt $ 71.7 $ 89.5 $ 80.1 $ 91.9 $ 98.9 $ 49.3 $ 35.6 $ 31.3 Less: cash and cash equivalents (3.0) (3.9) (2.6) (2.9)
Slide 34: Non-GAAP Measure: Adjusted Results for Non-routine Items
Non-GAAP Measure: Adjusted Results for Non-routine Items Three Months Ended Nine Months Ended ($ in millions) September 30, September 30, September 30, September 30, 2023 2022 2023 2022 Net sales, as reported $ 145.3 $ 130.0 $ 408.9 $ 360.3 Bridge grid deck exit impact 2.0 — 2.0 — Crossrail settleme
Slide 35: Non-GAAP Measure: Adjusted Results for Non-routine Items
Non-GAAP Measure: Adjusted Results for Non-routine Items Three Months Ended Nine Months Ended ($ in millions) September 30, September 30, September 30, September 30, 2023 2022 2023 2022 Rail, Technologies, and Services net sales, as reported $ 86.9 $ 77.4 $ 242.9 $ 222.9 Crossrail settlement adjustm
Slide 36: Non-GAAP Measure: Adjusted Results for Non-routine Items
Non-GAAP Measure: Adjusted Results for Non-routine Items Three Months Ended Nine Months Ended ($ in millions) September 30, September 30, September 30, September 30, 2023 2022 2023 2022 Precast Concrete Products net sales, as reported $ 38.6 $ 28.9 $ 96.8 $ 67.5 Precast Concrete Products gross profi
Slide 37: Non-GAAP Measure: Adjusted Results for Non-routine Items
Non-GAAP Measure: Adjusted Results for Non-routine Items Three Months Ended Nine Months Ended ($ in millions) September 30, September 30, September 30, September 30, 2023 2022 2023 2022 Steel Products and Measurement net sales, as reported $ 19.8 $ 23.8 $ 69.2 $ 70.0 Bridge grid deck exit impact 2.0