L.b. Foster Company · NASDAQ:FSTR
L.b. Foster — Q4 2023 Earnings Presentation
36 slides from L.b. Foster's earnings presentation, Mar 5, 2024
Slide 1: L.B. Foster Company Q4 2023 Earnings Presentation
L.B. Foster Company Q4 2023 Earnings Presentation Nasdaq - FSTR March 5, 2024
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 Guidance and Results Low High Results Revenue $ 530 $ 540 $ 544 > Founded in 1902, headquartered in Pittsburgh, Pennsylvania 2023 Sales by Region 1 ($ in millions) Adj. EBITDA $ 29 $ 31 $ 32 $750 > Locations throughout No
Slide 4: Opening Remarks
Opening Remarks John Kasel President and CEO L.B. Foster Q4 2023 Earnings Presentation 4 March 5, 2024
Slide 5: Executive Summary – Q4 2023 Highlights
Executive Summary – Q4 2023 Highlights What we’ve accomplished… Strong operating cash Net sales of $134.9M $6.1M in adjusted flow of $22.1M in Q4; Acquired operating assets down 1.7% YoY ( 7.7% EBITDA1 down 18.4% YoY $40.7M in 2H 2023 of Cougar Mountain organic increase1) Precast, LLC for $1.6M Net
Slide 6: Executive Summary – Full Year Highlights
Executive Summary – Full Year Highlights What we’ve accomplished… Where we’re going… 2024 Guidance 1 Net debt down $36.3M Net Sales Net sales of $543.7M up in 2023; strong operating Divested Chemtec and $525M - $560M 9.3% YoY cash flow of $37.4M for Ties businesses and the year acquired Cougar Adjus
Slide 7: Financial Review
Financial Review Bill Thalman Executive Vice President and CFO L.B. Foster Q4 2023 Earnings Presentation 7 March 5, 2024
Slide 8: Fourth Quarter Results
Fourth Quarter Results As of and for the quarter ended December 31, 2023: YoY Δ > Net sales declined 1.7% due to a 9.4% decline $ in millions, unless otherwise noted from divestitures partially offset by a 7.7% SALES 134.9 (2.3) organic increase1 GROSS PROFIT 29.0 2.3 > Gross profit margins expanded
Slide 9: Year over Year Change in Sales and Adj. EBITDA
1 Year over Year Change in Sales and Adj. EBITDA 1 Changes to Net Sales Changes to Adjusted EBITDA ($ in millions) ($ in millions) $150 $10 $137.2 $12.9 $10.6 $125 $134.9 $8 $1.1 $2.4 $7.5 $100 $6 $6.1 $75 $4 $50 $2 5.5% of 4.5% of sales sales $25 $0 $0 Q4 2022 Adj. Divestitures Legacy Business Q4 2
Slide 10: Sales and Gross Profit Trend – Trailing 4 Quarters
Sales and Gross Profit Trend – Trailing 4 Quarters 1 1,2 1 Adjusted Sales and YoY Organic Growth Adjusted Gross Profit ($ in millions) $175 $40 22% 21.8% 21.5% 21.2% +13% +13% 20.8% $150 $35 20% $148 $147 +8% 20.2% $32 $137 19.5% $31 $134 $135 $125 $132 +12% $30 $29 18% Gross Profit ($ in millions)
Slide 11: Rail, Technologies, and Services – Q4 Results
Rail, Technologies, and Services – Q4 Results Softer results in Rail due primarily to Rail Products order timing and UK commercial weakness Rail, Technologies Technologies, Sales GP Margin and and Services Services (10.9)% (390) bps $100 25% 20% $75 15% $50 23.1% $78 10% 19.2% $69 $25 5% $0 0% Q4 20
Slide 12: Infrastructure Solutions – Q4 Results
Infrastructure Solutions – Q4 Results Strong organic growth in both business units contributed to sales growth and expanded profitability Infrastructure Sales GP Margin Solutions +10.3% +910 bps $75 30% 25% $50 20% 15% $59 $66 24.0% $25 10% 14.9% 5% $0 0% Q4 2022 Q4 2023 Q4 2022 Q4 2023 > Net sales
Slide 13: Full Year 2023 Results
Full Year 2023 Results As of and for the year ended December 31, 2023: $ in millions, unless otherwise stated YoY Δ > Net sales increased 11.7% organically1 and 4.0% from acquisitions, offset by a 6.4% decline SALES 543.7 46.2 from divestitures GROSS PROFIT 112.8 23.2 > Gross margins expanded by 270
Slide 14: Cash Generation, Net Debt and Leverage
1 Cash Generation, Net Debt and Leverage Strong operating cash generated in 2023 2H funded deleveraging, growth cap ex and stock buybacks 1 2 > Strongest quarterly operating cash flow in four years Net Debt and Gross Leverage Ratio of $22.1M drove substantial decline in net debt1 and Per Credit Agre
Slide 15: Capital Allocation Priorities
Capital Allocation Priorities Relentless pursuit of shareholder returns Capital Allocation Investment for Growth Debt Reduction Growth Capital Expenditures 1 > Target maintaining Gross Leverage Ratio at ~2.0x; > Targeting 2.0% - 2.5% of sales to support organic growth improving free cash flow outloo
Slide 16: New Orders, Revenue and Book-to-Bill Ratios
1 1 New Orders , Revenue and Book-to-Bill Ratios Consolidated New Orders and Revenue ($ in millions) $200 $184 $150 $140 $148 $145 $138 $137 $135 $100 $115 $100 $106 $50 $0 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Total New Orders Total Revenue TTM Q4 2023 Book-to-Bill Ratio: 0.97:1.00 Rail, Technolo
Slide 17: Backlog Trends
1,2 Backlog Trends Consolidated Backlog $300 $250 $290 $272 $260 $243 $200 $214 $150 $100 $50 $0 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Rail, Technologies, and Services Backlog Infrastructure Solutions Backlog $150 $200 $125 $132 $150 $167 $158 $100 $114 $146 $150 $105 $94 $129 $75 $84 $100 $50 $50
Slide 18: Closing Remarks
Closing Remarks John Kasel President and CEO L.B. Foster Q4 2023 Earnings Presentation 18 March 5, 2024
Slide 19: Market and Business Outlook
Market and Business Outlook Organic growth outlook due to favorable end market conditions despite UK headwinds > Continued focus on rail safety and U.S. infrastructure spend expected to support long-term growth for Rail, Technologies, and Services domestic end-markets > Soft economic conditions in t
Slide 20: 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 21: 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 - $52M Relative Performance Chart: Russell 2000 vs FSTR Adj. EBITDA1 Margin ~8.0% Source: Google Performance range March 2023 - February 2024 L.B. Foster Q4 2023 Ear
Slide 22: Thank you!
Thank you! L.B. Foster Q4 2023 Earnings Presentation We look forward to discussing our Q1 2024 results in early May 2024. L.B. Foster Q4 2023 Earnings Presentation 22 March 5, 2024
Slide 23: Appendix
Appendix L.B. Foster Q4 2023 Earnings Presentation 23 March 5, 2024
Slide 24: Condensed Balance Sheet - Assets
Condensed Balance Sheet - Assets December 31, 2023 December 31, 2022 Assets ($ in millions) Current assets: Cash and cash equivalents $ 2.6 $ 2.9 Accounts receivable - net 53.5 82.5 Contract assets 29.5 33.6 Inventories - net 73.5 75.7 Other current assets 9.0 11.1 Total current assets $ 168.0 $ 205
Slide 25: Condensed Balance Sheet – Liabilities and Equity
Condensed Balance Sheet – Liabilities and Equity December 31, 2023 December 31, 2022 Liabilities and Stockholders' Equity ($ in millions) Current liabilities: Accounts payable $ 40.3 $ 48.8 Deferred revenue 12.5 19.5 Other accrued liabilities 42.4 34.8 Current maturities of long-term debt 0.1 0.1 To
Slide 26: Condensed Income Statement – Q4
Condensed Income Statement – Q4 Three Months Ended Three Months Ended Delta December 31, 2023 December 31, 2022 ($ in millions except per share data) $ % of Sales $ % of Sales $ % Sales $ 134.9 $ 137.2 $ (2.3) (1.7)% Gross profit 29.0 21.5% 26.8 19.5% 2.3 8.5 % SG&A 27.2 20.2% 23.3 17.0% 3.9 16.7 %
Slide 27: Condensed Income Statement – Full Year
Condensed Income Statement – Full Year Year Ended December 31, Year Ended December 31, Delta 2023 2022 ($ in millions except per share data) $ % of Sales $ % of Sales $ % Sales $ 543.7 $ 497.5 $ 46.2 9.3 % Gross profit 112.8 20.7% 89.6 18.0% 23.2 25.9 % SG&A 97.4 17.9% 82.7 16.6% 14.7 17.8 % Amortiz
Slide 28: Condensed Cash Flows
Condensed Cash Flows Year Ended Year Ended ($ in millions) December 31, 2023 December 31, 2022 Net income and other non-cash items from operations $ 21.5 $ 15.2 Receivables 27.4 (25.1) Contract assets 1.8 (0.5) Inventory (7.0) (11.8) Payables and deferred revenue (6.6) 14.7 Trade working capital sub
Slide 29: New Orders and Backlog
New Orders and Backlog New Orders Entered – Three Months Ended ($ in millions) December 31, 2023 December 31, 2022 Delta Rail, Technologies, and Services $ 60.1 $ 73.5 $ (13.5) (18.3)% Infrastructure Solutions 45.5 64.3 (18.8) (29.3)% Total $ 105.5 $ 137.8 $ (32.3) (23.4)% New Orders Entered – Year
Slide 30: Segment Results – Q4
Segment Results – Q4 Three Months Ended Three Months Ended Segment Sales Delta December 31, 2023 December 31, 2022 ($ in millions) $ $ $ % Rail, Technologies, and Services $ 69.3 $ 77.7 $ (8.4) (10.9)% Infrastructure Solutions 65.6 59.4 6.1 10.3 % Total $ 134.9 $ 137.2 $ (2.3) (1.7)% Three Months En
Slide 31: Segment Results – Full Year
Segment Results – Full Year Year Ended Year Ended Segment Sales Delta December 31, 2023 December 31, 2022 ($ in millions) $ $ $ % Rail, Technologies, and Services $ 312.2 $ 300.6 $ 11.6 3.8 % Infrastructure Solutions 231.6 196.9 34.7 17.6 % Total $ 543.7 $ 497.5 $ 46.2 9.3 % Year Ended Year Ended Se
Slide 32: Non-GAAP Measure: Adjusted EBITDA
Non-GAAP Measure: Adjusted EBITDA Three Months Ended Year Ended December 31, December 31, December 31, December 31, ($ in millions) 2023 2022 2023 2022 Net income, as reported $ (0.5) $ (44.0) $ 1.3 $ (45.7) Interest expense - net 1.1 1.6 5.5 3.3 Income tax expense (0.3) 36.5 (0.4) 36.7 Depreciation
Slide 33: Non-GAAP Measure: Funding Capacity & Free Cash Flow
Non-GAAP Measure: Funding Capacity & Free Cash Flow ($ in millions) December 31, 2023 Cash and cash equivalents $ 2.6 Total availability under the credit facility 130.0 Outstanding borrowings on revolving credit facility (55.1) Letters of credit outstanding (2.8) Net availability under the revolving
Slide 34: Non-GAAP Measure: Net Debt
1 Non-GAAP Measure: Net Debt December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, 2023 2023 2023 2023 2022 2022 2022 2022 ($ in millions) Total debt $ 55.3 $ 71.7 $ 89.5 $ 80.1 $ 91.9 $ 98.9 $ 49.3 $ 35.6 Less: cash and cash equivalents (2.6) (3.0) (3.9) (2.6)
Slide 35: Non-GAAP Measure: Adj. Results for Non-routine Items
Non-GAAP Measure: Adj. Results for Non-routine Items Three Months Ended ($ in millions) September 30, September 30, 2023 2022 Net sales, as reported $ 145.3 $ 130.0 Bridge grid deck exit impact 2.0 — Crossrail settlement adjustment — 4.0 Net sales, as adjusted $ 147.3 $ 134.0 Gross profit, as report
Slide 36: Non-GAAP Measure: Organic Sales
Non-GAAP Measure: Organic Sales Three Months Percent Percent Change in Consolidated Organic Sales Ended Change Year Ended Change ($ in millions) December 31, December 31, 2022 net sales, as reported $ 137.2 $ 497.5 Decrease due to divestitures (12.9) (9.4)% (32.0) (6.4)% Increase due to acquisitions