L.b. Foster Company · NASDAQ:FSTR
L.b. Foster — Q3 2024 Earnings Presentation
39 slides from L.b. Foster's earnings presentation, Nov 7, 2024
Slide 1: L.B. Foster Company Earnings Presentation
L.B. Foster Company Earnings Presentation Nasdaq - FSTR November 7, 2024
Slide 2: Safe Harbor Disclaimer
Safe Harbor Disclaimer 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 earnings presentation discloses the following non-GAAP measures:
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 November 7, 2024) Low High Revenue $ 530 $ 540 > Locations throughout North America, South America, Europe, and Asia Adj. EBITDA1 $ 34.5 $ 36.5
Slide 4: Opening Remarks
Opening Remarks John Kasel President and CEO L.B. Foster Q3 2024 Earnings Presentation 4 November 7, 2024
Slide 5: Opening Remarks - Quarter Highlights
Opening Remarks - Quarter Highlights What we've accomplished... 2024 expectations… 2024 Guidance Updated Gross profit of $32.8M up Net income of $35.9M includes $30.0M Gross Leverage Ratio1,2 Net sales 19.5% YoY favorable tax valuation improved by 0.8x during $530M - $540M Gross margin of 23.8% up a
Slide 6: Financial Review
Financial Review Bill Thalman Executive Vice President and CFO L.B. Foster Q3 2024 Earnings Presentation 6 November 7, 2024
Slide 7: Third Quarter Results
Third Quarter Results As of and for the quarter ended September 30, 2024: YoY Δ $ in millions, unless otherwise noted > Net sales were down 5.4% due primarily to SALES 137.5 (7.9) organic sales decrease in the Rail segment GROSS PROFIT 32.8 5.3 > Gross profit up 19.5% with margins increasing 490 bps
Slide 8: Year over Year Change in Sales and Adj. EBITDA
1 Year over Year Change in Sales and Adj. EBITDA Changes to Net Sales1 Changes to Adjusted EBITDA1 ($ in millions) ($ in millions) $14 $175 $0.3 $150 $12 $12.3 $1.4 $147.3 $125 $(8.5) $(1.3) $137.5 $10 $10.6 $100 $8 $75 $6 $50 $4 $25 $2 $0 $0 Q3 2023 Legacy Business Product Line Exit Q3 2024 Q3 2023
Slide 9: Sales and Gross Profit Trend – Trailing 4 Quarters
Sales and Gross Profit Trend – Trailing 4 Quarters 1 1,2 1 Sales and YoY Organic Growth Gross Profit ($ in millions) 23.8% $175 $40 24% 22.0% $150 21.7% 22% (3)% $35 21.2% 21.3% $148 $147 (6)% 21.1% $33 +8% $33 $141 20.2% $137 $135 $137 +17% $31 $125 19.5% 20% $124 $30 $29 Gross Profit ($ in million
Slide 10: Rail, Technologies, and Services – Q3 Results
Rail, Technologies, and Services – Q3 Results Margin expansion driven by growth in Rail Technologies coupled with recovery of UK business Rail, Technologies Technologies, Sales GP Margin and and Services Services (8.5)% +340 bps $100 25% 20% $75 15% $50 23.2% $86.9 $79.5 10% 19.8% $25 5% $0 0% Q3 20
Slide 11: Infrastructure Solutions – Q3 Results
Infrastructure Solutions – Q3 Results Improved profitability due to impact of bridge grid deck exit last year and solid growth in Precast Concrete Infrastructure Sales GP Margin Solutions (0.9)% +720 bps $75 30% 25% $50 20% 15% $58.5 $58.0 24.6% $25 10% 17.4% 5% $0 0% Q3 2023 Q3 2024 Q3 2023 Q3 2024
Slide 12: Year to Date Results
Year to Date Results As of and for the nine months ended September 30, 2024: YoY Δ > Organic sales1 increased 1.5% partially offset $ in millions, unless otherwise stated by 3.0% decline from divestiture and product SALES 402.6 (6.3) line exit activity GROSS PROFIT 89.4 6.1 > Gross profit increased
Slide 13: Net Debt, Leverage, and Capital Allocation
1 Net Debt , Leverage, and Capital Allocation Exceptional free cash flow generation lowered net debt1 and Gross Leverage Ratio1,2 Net Debt1 and Gross Leverage Ratio1,2 > Net debt and Gross Leverage Ratio improvement of Per Credit Agreement ($ in millions) $17.7M and 0.8x in Q3 due to strong free cas
Slide 14: Capital Allocation Priorities
Capital Allocation Priorities Relentless pursuit of shareholder returns with prudent capital allocation Capital Allocation Investment for Growth Debt Reduction Growth Capital Expenditures 1 > Target maintaining Gross Leverage Ratio at ~2.0x; > Targeting 2.0% - 2.5% of sales to support organic growth
Slide 15: New Orders, Revenue, and Book-to-Bill Ratios
1 1 New Orders , Revenue, and Book-to-Bill Ratios Consolidated New Orders and Revenue ($ in millions) $150 $171 $145 $141 $135 $132 $137 $100 $124 $100 $106 $96 $50 $0 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Total New Orders Total Revenue TTM Q3 2024 Book-to-Bill Ratio: 0.94 : 1.00 Rail, Technologie
Slide 16: Backlog Trends
1 Backlog Trends Consolidated Backlog ($ in millions) $300 $250 $243 $250 $200 $222 $214 $209 $150 $100 $50 $0 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Rail, Technologies, and Services Backlog Infrastructure Solutions Backlog ($ in millions) ($ in millions) $150 $175 $125 $150 $150 $115 $125 $136 $13
Slide 17: Closing Remarks
Closing Remarks John Kasel President and CEO L.B. Foster Q3 2024 Earnings Presentation 17 November 7, 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 Commissioning facility in central investments for freight rail, transit rail safety initiatives su
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 - $52M Adj. EBITDA1 Margin ~8.0% L.B. Foster Q3 2024 Earnings Presentation 1) Refer to safe harbor disclaimer slide and related reconciliations within the appendix r
Slide 21: Thank you!
Thank you! L.B. Foster Q3 2024 Earnings Presentation We look forward to discussing our Q4 and full year 2024 results in early March 2025 L.B. Foster Q3 2024 Earnings Presentation 21 November 7, 2024
Slide 22: Appendix
Appendix L.B. Foster Q3 2024 Earnings Presentation 22 November 7, 2024
Slide 23: Condensed Balance Sheet - Assets
Condensed Balance Sheet - Assets Assets September 30, 2024 December 31, 2023 ($ in millions) Current assets: Cash and cash equivalents $ 3.1 $ 2.6 Accounts receivable - net 66.7 53.5 Contract assets - net 20.2 29.5 Inventories - net 73.9 73.1 Other current assets 9.5 8.7 Total current assets $ 173.5
Slide 24: Condensed Balance Sheet – Liabilities and Equity
Condensed Balance Sheet – Liabilities and Equity Liabilities and Stockholders' Equity September 30, 2024 December 31, 2023 ($ in millions) Current liabilities: Accounts payable $ 40.0 $ 39.5 Deferred revenue 9.7 12.5 Other accrued liabilities 26.5 42.4 Current maturities of long-term debt 0.2 0.1 To
Slide 25: Condensed Income Statement – Q3
Condensed Income Statement – Q3 Three Months Ended Three Months Ended Delta September 30, 2024 September 30, 2023 ($ in millions except per share data) $ % of Sales $ % of Sales $ % Sales $ 137.5 $ 145.3 $ (7.9) (5.4)% Gross profit 32.8 23.8% 27.4 18.9% 5.3 19.5 SG&A 24.3 17.7% 24.4 16.8% (0.1) (0.5
Slide 26: Condensed Income Statement – YTD
Condensed Income Statement – YTD Nine Months Ended Nine Months Ended Delta September 30, 2024 September 30, 2023 ($ in millions except per share data) $ % of Sales $ % of Sales $ % Sales $ 402.6 $ 408.9 $ (6.3) (1.5)% Gross profit 89.4 22.2% 83.3 20.4% 6.1 7.3 SG&A 72.0 17.9% 70.4 17.2% 1.6 2.3 (Gai
Slide 27: Condensed Cash Flows
Condensed Cash Flows Nine months ended Nine months ended September 30, 2024 September 30, 2023 ($ in millions) Net income and other non-cash items from operations $ 22.3 $ 16.9 Receivables (13.0) 15.9 Contract assets 9.9 (0.3) Inventory (0.5) (16.0) Payables and deferred revenue (2.3) 2.0 Trade work
Slide 28: New Orders - QTD
New Orders - QTD New Orders Entered – Three Months Ended September 30, September 30, ($ in millions) YoY Delta 2024 2023 Rail, Technologies, and Services $ 52.7 $ 49.8 $ 2.9 5.7 % Infrastructure Solutions 43.3 50.4 (7.1) (14.2) Total $ 96.0 $ 100.3 $ (4.3) (4.3)% L.B. Foster Q3 2024 Earnings Present
Slide 29: New Orders and Backlog
New Orders and Backlog New Orders Entered – Nine Months Ended September 30, September 30, ($ in millions) Delta 2024 2023 Rail, Technologies, and Services $ 253.4 $ 239.5 $ 13.9 5.8 % Infrastructure Solutions 145.9 184.0 (38.1) (20.7) Total $ 399.4 $ 423.5 $ (24.2) (5.7)% Backlog – Nine Months Ended
Slide 30: Segment Results – Q3
Segment Results – Q3 Three Months Ended Three Months Ended Segment Sales Delta September 30, 2024 September 30, 2023 ($ in millions) $ % Rail, Technologies, and Services $ 79.5 $ 86.9 $ (7.4) (8.5)% Infrastructure Solutions 58.0 58.5 (0.5) (0.9) Total $ 137.5 $ 145.3 $ (7.9) (5.4)% Three Months Ende
Slide 31: Segment Results – YTD
Segment Results – YTD Nine Months Ended Nine Months Ended Segment Sales Delta September 30, 2024 September 30, 2023 ($ in millions) $ % Rail, Technologies, and Services $ 247.7 $ 242.9 $ 4.8 2.0 % Infrastructure Solutions 154.9 166.0 (11.1) (6.7) Total $ 402.6 $ 408.9 $ (6.3) (1.5)% Nine Months Ende
Slide 32: Non-GAAP Measure: Adjusted EBITDA
Non-GAAP Measure: Adjusted EBITDA Trailing Twelve Three Months Ended Nine Months Ended Months Ended September 30, September 30, September 30, ($ in millions) 2024 2023 2024 2023 2024 Net income, as reported $ 35.9 $ 0.4 $ 43.1 $ 1.8 $ 42.7 Interest expense - net 1.4 1.4 4.0 4.4 5.1 Income tax benefi
Slide 33: Non-GAAP Measure: Funding Capacity
Non-GAAP Measure: Funding Capacity ($ in millions) September 30, 2024 Cash and cash equivalents $ 3.1 Total availability under the credit facility 130.0 Outstanding borrowings on revolving credit facility (68.0) Letters of credit outstanding (2.3) Net availability under the revolving credit facility
Slide 34: Non-GAAP Measure: Net Debt
Non-GAAP Measure: Net Debt September 30, June 30, March 31, December 31, September 30, June 30, March 31, December 31, 2024 2024 2024 2023 2023 2023 2023 2022 ($ in millions) Total debt $ 68.5 $ 87.2 $ 78.1 $ 55.3 $ 71.7 $ 89.5 $ 80.1 $ 91.9 Less: cash and cash equivalents (3.1) (4.0) (3.1) (2.6) (3
Slide 35: Non-GAAP Measure: Organic Sales
Non-GAAP Measure: Organic Sales Three Months Percent Nine Months Percent Change in Consolidated Sales Ended Change Ended Change ($ in millions) September 30, September 30, 2023 net sales, as reported $ 145.3 $ 408.9 Increase (decrease) from divestitures and exit 0.6 0.4 % (12.2) (3.0)% Change due to
Slide 36: Non-GAAP Measure: Adjusted Sales
Non-GAAP Measure: Adjusted Sales Three Months Percent Nine Months Percent Change in Consolidated Adjusted Sales Ended Change Ended Change ($ in millions) September 30, September 30, 2023 net sales, as reported $ 145.3 $ 408.9 2023 bridge grid deck impact 2.0 2.0 2023 net sales, as adjusted $ 147.3 $
Slide 37: Non-GAAP Measure: Adjusted Gross Profit
Non-GAAP Measure: Adjusted Gross Profit Three Months Nine Months Change in Adjusted Gross Profit Ended Ended ($ in millions) September 30, September 30, 2023 net sales, as adjusted $ 147.3 $ 410.8 2023 gross profit, as reported $ 27.4 $ 83.3 2023 bridge grid deck exit impact $ 3.9 $ 3.9 2023 gross p
Slide 38: 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 39: Attractive Valuation and FCF Yield
1 Attractive Valuation and FCF Yield Attractive Valuation and Free Cash Flow Yield Based on Near Term Outlook > Improved trading volumes with addition to Russell 2000 2024 Guidance (As of November 7, 2024) Company Valuation 2023 Low Mid High > Attractive EBITDA valuation today and projected at Reven