L.b. Foster Company · NASDAQ:FSTR
L.b. Foster — Q3 2020 Earnings Presentation
28 slides from L.b. Foster's earnings presentation, Nov 4, 2020
Slide 1: Q3 2020 Earnings Presentation
Q3 2020 Earnings Presentation November 4, 2020 Bob Bauer – President and CEO Jim Kempton – Controller and Principal Accounting Officer
Slide 2: Safe Harbor Statement Non-GAAP Financial Measures
Safe Harbor Statement Non-GAAP Financial 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 This investor presentation discloses the following non-GAAP measures: 27A of the Securities A
Slide 3: Who we are
Who we are NASDAQ: FSTR 2019 Net Sales by Region ($ in millions) • Leading manufacturer and distributor of products and provider of services for the transportation and energy infrastructure markets 1902 54 1,330 $1.62 (1) $41.9 • Headquartered in Pittsburgh, Pennsylvania FOUNDED PLANTS PROFESSIONALS
Slide 4: Completed sale of IOS Test and Inspection Services business
• Completed sale of IOS Test and Inspection Services business during the third quarter of 2020, eliminating its dilutive effect on the Company’s performance. • Sold IOS Test and Inspection Services business on September 4, 2020 as a sale of equity, transferring legacy liabilities to the buyer, recei
Slide 5: Rail and Construction segments continue to exhibit resilience; challenges in energy
• Rail Products and Services and Construction Products segments continue to exhibit some resilience. • The Rail Products and Services and Construction Products segments saw increases in new orders as well as in backlog over the prior year quarter. • The significant year-over-year backlog increases i
Slide 6: Metrics Q3 2020 vs Q3 2019
• Third quarter 2020 results reflect Metrics Q3 2020 Q3 2019 Delta continued challenges faced due to ($ in millions, unless otherwise noted; except per share data) From continuing operations: the decreased demand for oil as result of the COVID-19 pandemic Sales $ 118.4 $ 144.8 $ (26.5) (18.3%) Gross
Slide 7: Tax Impact of IOS Sale
Tax Impact of IOS Sale • An incremental tax benefit of ($ in millions, unless otherwise noted) Continuing Discontinued $19.0 million was recorded as a Total result of the disposition of IOS Operations Operations • $15.9 million included in YTD September 30, 2020 continuing operations • $3.1 million
Slide 8: New Orders Entered
• Rail products and services saw a 6.6% increase in new order activity quarter-over-quarter, driven by New Orders Entered – Three Months Ended increases in the concrete ties division and rail distribution division ($ in millions) September 30, 2020 September 30, 2019 Delta Rail Products and Services
Slide 9: New Orders and Revenue Levels by Segment
Rail Products and Services Construction Products 100 75 • Positive order activity 75 in 2020 with 50 consolidated book-to- 50 bill ratio of 1.04 25 25 despite downturn in the Tubular and 0 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 0 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Energy segment. Rail New Orde
Slide 10: Backlog vs. Prior Year Quarter
• The Company continues to maintain Backlog vs. Prior Year Quarter trends of backlog increases quarter- ($ in millions) September 30, 2020 September 30, 2019 Delta over-quarter with a 21.7% increase in Q3 and a 7.9% increase in Q2 Rail Products and Services $ 109.1 $ 88.1 $ 21.0 23.9% versus the pri
Slide 11: Free Cash Flow Yield
• Robust cash flow from continuing operations continue to drive Free Cash Flow Yield double-digit free cash flow yield ($ in millions, unless otherwise noted; except per share price) LTM Q3 2020 2019 2018 • Cash flow from continuing operations YTD Q3 2020 increased Cash Provided by Continuing Operat
Slide 12: Liquidity and Debt
($ in millions, unless otherwise noted) September 30, 2020 December 31, 2019 • Through strategic review of the Company’s liquidity Cash & Cash Equivalents $ 9.3 $ 14.2 needs during Q2 2020, the Company entered into an Total Availability Under the Credit Facility $ 120.0 $ 140.0 amendment of its cred
Slide 13: Net Debt and Adjusted Net Leverage Ratio
CHANGE IN ADJUSTED NET LEVERAGE RATIO 1 4.5x • Strategic focus on deleveraging through 4.0x $92.3 $100.0 optimizing operating cash flows 3.5x $80.0 • Net debt1 levels continue 3.0x Net Debt (in millions) $64.7 to decline in comparison to past years, aligning 2.5x 2.4x $60.0 with the Company’s debt r
Slide 14: Business Review
LBFoster. BUSINESS REVIEW
Slide 15: Q3 2020 Net Sales by Segment: Rail Products and Services
Revenue Q3 2020 Net Sales by ($ in millions) Segment ($ in millions) • The COVID-19 pandemic continues to drive low rail traffic volumes in $50 ($3.8), (6%) North America which negatively $67.7 $64.0 $64 impacts demand for transit products and our friction $0 Q3 2019 Q3 2020 Rail Construction Tubula
Slide 16: Q3 2020 Net Sales by Segment: Construction Products
Revenue Q3 2020 Net Sales by • Reductions to the Construction ($ in millions) Segment Products segment revenue ($ in millions) quarter-over-quarter are due in $50 part to the completion of the Port ($9.3), (20%) Everglades project in 2019 $47.2 $37.7 $38 • Due to company cost controlling $0 Rail Con
Slide 17: Q3 2020 Net Sales by Segment: Tubular and Energy Services
Revenue Q3 2020 Net Sales by • Sales focused on the midstream ($ in millions) Segment ($ in millions) energy market continue to experience pandemic-related $40 challenges as demand for oil ($13.4), remains severely impacted by $20 $29.9 (45%) $16.5 $16 the COVID-19 pandemic; $0 however, the Company
Slide 18: Appendix
r APPENDIX LBFoste
Slide 19: Three Months Ended Income Statement
Three Months Ended Three Months Ended September 30, 2020 September 30, 2019 Delta ($ in millions except per share data) $ % of Sales $ % of Sales $ % Sales $ 118.4 - $ 144.8 - $ (26.5) (18.3%) Gross profit $ 22.1 18.6% $ 28.0 19.3% $ (5.9) (21.1%) SG&A $ 17.1 14.4% $ 21.0 14.5% $ (4.0) (18.9%) Amort
Slide 20: Nine Months Ended Income Statement
Nine Months Ended Nine Months Ended September 30, 2020 September 30, 2019 Delta ($ in millions except per share data) $ % of Sales $ % of Sales $ % Sales $ 381.8 - $ 475.1 - $ (93.3) (19.6%) Gross profit $ 73.3 19.2% $ 92.7 19.5% $ (19.4) (20.9%) SG&A $ 56.3 14.7% $ 62.9 13.2% $ (6.6) (10.5%) Amorti
Slide 21: Three Months Sales and Segment Profit
Three Months Ended Three Months Ended Sales September 30, 2020 September 30, 2019 Delta ($ in millions) $ % of Sales $ % of Sales $ % Rail Products and Services $ 64.0 54.1% $ 67.7 46.8% $ (3.8) (5.5%) Construction Products $ 37.9 32.0% $ 47.2 32.6% $ (9.3) (19.7%) Tubular and Energy Services $ 16.5
Slide 22: Nine Months Sales and Segment Profit
Nine Months Ended Nine Months Ended Sales September 30, 2020 September 30, 2019 Delta ($ in millions) $ % of Sales $ % of Sales $ % Rail Products and Services $ 209.1 54.8% $ 244.8 51.5% $ (35.7) (14.6%) Construction Products $ 108.9 28.5% $ 139.9 29.5% $ (31.0) (22.2%) Tubular and Energy Services $
Slide 23: Assets
Assets September 30, 2020 December 31, 2019 ($ in millions) (audited) Current assets: Cash and cash equivelants $ 9.3 $ 14.2 Accounts receivable - net $ 61.4 $ 73.6 Inventories - net $ 117.3 $ 118.5 Other current assets $ 15.2 $ 4.1 Current assets from discontinued operations $ - $ 6.3 Total current
Slide 24: Liabilities and Stockholders' Equity
Liabilities and Stockholders' Equity September 30, 2020 December 31, 2019 ($ in millions) (audited) Current liabilities: Accounts payable and accrued liabilities $ 98.5 $ 108.2 Current maturities of long-term debt $ 0.1 $ 2.9 Liabilities of discontinued operations $ 0.6 $ 5.6 Total current liabiliti
Slide 25: Cash Flow Summary
Nine months ended Nine months ended ($ in millions) September 30, 2020 September 30, 2019 Net income and other non-cash items from continuing operations $ 26.8 $ 32.6 Receivables $ 12.1 $ (3.0) Inventory $ 0.5 $ (5.0) Payables and deferred revenue $ (4.3) $ (1.9) Working Capital subtotal $ 8.3 $ (9.
Slide 26: EBITDA and Adjusted EBITDA Reconciliation
Three Months Ended Nine Months Ended Year Ended ($ in millions) September 30, September 30, September 30, September 30, September 30, 2020 2020 2020 2020 2020 Net income from continuing operations, as reported $ 16.6 $ 3.8 $ 23.5 $ 17.8 $ 53.7 Interest expense, net $ 0.9 $ 1.1 $ 2.8 $ 4.0 $ 3.7 Inco
Slide 27: Adjusted Net Income and EPS Reconciliation
Three Months Ended Nine Months Ended ($ in millions) September 30, September 30, September 30, September 30, 2020 2019 2020 2019 Net income from continuing operations, as reported $ 16.6 $ 3.8 $ 23.5 $ 17.8 Relocation and restructuring costs, net of tax benefit of $0.1, $ 0.2 $ - $ 1.7 $ - $0.0, $0.
Slide 28: Net Debt Reconciliation
September 30, 2020 December 31, 2019 December 31, 2018 December 31, 2017 ($ in millions) (audited) (audited) (audited) Total debt $ 49.1 $ 58.2 $ 75.0 $ 130.0 Less cash and cash equivalents $ (9.3) $ (14.2) $ (10.3) $ (37.7) Total net debt $ 39.8 $ 44.0 $ 64.7 $ 92.3 L.B. Foster Company (FSTR) Q3 20