L.b. Foster Company · NASDAQ:FSTR
L.b. Foster — Q2 2023 Earnings Presentation
34 slides from L.b. Foster's earnings presentation, Aug 8, 2023
Slide 1: L.B. Foster Company Q2 2023 Earnings Presentation
L.B. Foster Company Q2 2023 Earnings Presentation Nasdaq - FSTR August 8, 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 Low High Founded in 1902, headquartered in Pittsburgh, Pennsylvania 2022 Sales by Region Guidance ($ in millions) $600 Revenue $ 520 $ 550 Locations throughout North America, South America, Europe, and Asia
Slide 4: Opening Remarks
Opening Remarks John Kasel President and CEO L.B. Foster Q2 2023 Earnings Presentation 4 August 8, 2023
Slide 5: Executive Summary – Quarter Highlights
Executive Summary – Quarter Highlights What we’ve accomplished… Where we’re going… Divested concrete Ties Tailwinds from 2023 Guidance Update business for $2.4M in Net sales of $148.0M up proceeds Government Infrastructure Net sales 12.6% YoY, 13.3% organic Investment $520M - $550M growth Net income
Slide 6: Financial Review
Financial Review Bill Thalman Executive Vice President and CFO L.B. Foster Q2 2023 Earnings Presentation 6 August 8, 2023
Slide 7: Second Quarter Results
Second Quarter Results As of and for the quarter ended June 30, 2023: YoY Δ > Net sales increased 13.3% organically and 6.0% $ in millions, unless otherwise noted from acquisitions, less 6.8% from divestitures SALES 148.0 16.5 > Gross profit margin up 410 bps due to portfolio GROSS PROFIT 32.3 9.0 t
Slide 8: Year over Year Increase in Sales and Adj. EBITDA
Year over Year Increase in Sales and Adj. EBITDA 1 Changes to Sales Changes to Adjusted EBITDA1 ($ in millions) ($ in millions) $175 $12 $7.9 $8.9 $150 $0.8 $10 $10.6 $17.6 $148.0 7.2% of sales $125 $131.5 $8 $3.7 $100 $6 $6.1 $75 4.7% of sales $4 $50 $2 $25 $0 $0 Q2 2022 Sales Legacy Business Acqui
Slide 9: Sales and Gross Profit Trend – Trailing Quarters
Sales and Gross Profit Trend – Trailing 4 Quarters Consolidated Sales and Consolidated Gross Profit $175 YoY Growth Rates 22% $40 ($ in millions) 21.8% $150 +11% 20% $35 +18% $148 20.2% 0% 19.5% Gross Profit ($ in millions) $137 $125 $130 $132 $130 +14% 18% $30 Gross Profit Margin $32 $113 $115 17.8
Slide 10: Rail, Technologies, and Services – Q2 Results
Rail, Technologies, and Services – Q2 Results Robust sales growth and margin expansion despite U.K. headwinds Rail, Technologies Technologies, Sales GP Margin and and Services Services +12.0% +260 bps $100 25% $75 20% 15% $50 $92 $82 10% 19.1% 21.7% $25 5% $0 0% Q2 2022 Q2 2023 Q2 2022 Q2 2023 > Net
Slide 11: Precast Concrete Products – Q2 Results
Precast Concrete Products – Q2 Results Strong performance in legacy business coupled with growth from VanHooseCo Precast Concrete Sales GP Margin Products +43.4% +850 bps $40 25% $30 20% 15% $20 22.7% $34 10% $10 $24 14.2% 5% $0 0% Q2 2022 Q2 2023 Q2 2022 Q2 2023 > Net sales increased 12.8% organica
Slide 12: Steel Products and Measurement – Q2 Results
Steel Products and Measurement – Q2 Results Protective Coatings driving organic sales growth and strong new orders1 and backlog1 Steel Products and Sales GP Margin Measurement (13.6%) +460 bps $30 25% 20% $20 15% $26 $23 10% 21.0% $10 16.4% 5% $0 0% Q2 2022 Q2 2023 Q2 2022 Q2 2023 > Net sales declin
Slide 13: Year to Date Results
Year to Date Results As of and for the six months ended June 30, 2023: YoY Δ $ in millions, unless otherwise stated > Net sales increased 10.8% organically and 7.4% from acquisitions, offset by a 3.7% decline from SALES 263.5 33.2 divestitures GROSS PROFIT 55.5 15.8 > Improved gross profit margin du
Slide 14: Net Debt, Leverage, and Capital Allocation
Net Debt1, Leverage, and Capital Allocation Acquisition activity drove leverage ratio up in 2022...making progress to lower in 2023 Net Debt1 and Gross Leverage Ratio2 Demonstrated history of diligent debt and leverage Per Credit Agreement management over time $100 ($ in millions) 4.0x $90 Modes
Slide 15: Capital Allocation Priorities
Capital Allocation Priorities Relentless pursuit of shareholder returns Capital Allocation Investment for Growth Debt Reduction Growth Capital Expenditures Free cash flow1 in 2023 2nd half expected to lower Gross Targeting 1.5% - 2.0% of sales to support organic Leverage Ratio1 toward longer-ter
Slide 16: New Orders, Revenue and Book-to-Bill Ratios
New Orders1, Revenue and Book-to-Bill Ratios1 TTM Q2 2023 Ratio: Rail, Technologies, and Services TTM Q2 2023 Ratio: Consolidated New Orders1 and Revenue 1.13:1.00 1.03:1.00 $200 ($ in millions) $125 ($ in millions) $175 $184 $116 $100 $150 $125 $141 $148 $93 $92 $137 $138 $137 $140 $75 $132 $130 $8
Slide 17: Backlog Trends
Backlog1 Trends Consolidated Backlog1,2 Rail, Technologies, and Services Backlog1,2 ($ in millions) ($ in millions) $350 $150 $300 $125 $250 $100 $200 $75 $150 $290 $132 $132 $251 $273 $272 $260 $109 $105 $114 $50 $100 $50 $25 $0 $0 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q2 2022 Q3 2022 Q4 2022 Q1
Slide 18: Closing Remarks
Closing Remarks John Kasel President and CEO L.B. Foster Q2 2023 Earnings Presentation 18 August 8, 2023
Slide 19: Market and Business Outlook
Market and Business Outlook Government infrastructure funding expected to provide tailwind across the majority of our portfolio > Optimistic long-term outlook for Rail Technologies despite short-term economic softness in U.K. market > Increasing demand for Rail Technologies solutions with focus on s
Slide 20: Infrastructure-Related Bookings
Infrastructure-Related Bookings Strong order activity driven in part by key infrastructure projects Over $80M in Large Project Orders Rail, Technologies, and Services MTA Metro North Railroad – Rail Distribution Genesee & Wyoming – Rail Distribution Miami – Dade Transit – Transit Products
Slide 21: 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 - $52M Adj. EBITD
Slide 22: Thank you!
Thank you! L.B. Foster Q2 2023 Earnings Presentation L.B. Foster Q2 2023 Earnings Presentation 22 August 8, 2023
Slide 23: Appendix
Appendix L.B. Foster Q2 2023 Earnings Presentation 23 August 8, 2023
Slide 24: Condensed Balance Sheet - Assets
Condensed Balance Sheet - Assets June 30, 2023 December 31, 2022 Assets ($ in millions) Current assets: Cash and cash equivalents $ 3.9 $ 2.9 Accounts receivable - net 74.2 82.5 Contract assets 34.0 33.6 Inventories - net 79.5 75.7 Other current assets 12.2 11.1 Total current assets 203.8 205.7 Prop
Slide 25: Condensed Balance Sheet – Liabilities and Equity
Condensed Balance Sheet – Liabilities and Equity June 30, 2023 December 31, 2022 Liabilities and Stockholders' Equity ($ in millions) Current liabilities: Accounts payable $ 43.9 $ 48.8 Deferred revenue 16.0 19.5 Other accrued liabilities 31.6 34.8 Current maturities of long-term debt 0.1 0.1 Total
Slide 26: Condensed Income Statement – Q2
Condensed Income Statement – Q2 Three Months Ended Three Months Ended Delta June 30, 2023 June 30, 2022 ($ in millions except per share data) $ % of Sales $ % of Sales $ % Sales $ 148.0 $ 131.5 $ 16.5 12.6% Gross profit 32.3 21.8% 23.3 17.7% 9.0 38.5% SG&A 24.5 16.6% 19.4 14.7% 5.1 26.5% Amortizatio
Slide 27: Condensed Income Statement – YTD
Condensed Income Statement – YTD Six Months Ended Six Months Ended Delta June 30, 2023 June 30, 2022 ($ in millions except per share data) $ % of Sales $ % of Sales $ % Sales $ 263.5 $ 230.3 $ 33.2 14.4% Gross profit 55.5 21.1% 39.7 17.3% 15.8 39.8% SG&A 46.0 17.4% 36.7 15.9% 9.3 25.2% Amortization
Slide 28: Condensed Cash Flows
Condensed Cash Flows Six Months Ended Six Months Ended ($ in millions) June 30, 2023 June 30, 2022 Net income and other non-cash items from operations $ 11.9 $ 7.3 Receivables 6.6 (17.3) Contract assets (3.0) 2.2 Inventory (13.1) (10.7) Payables and deferred revenue 1.1 14.6 Trade working capital su
Slide 29: New Orders and Backlog
New Orders and Backlog New Orders Entered – Three Months Ended ($ in millions) June 30, 2023 June 30, 2022 Delta Rail, Technologies, and Services $ 116.0 $ 92.9 $ 23.0 24.8% Precast Concrete Products 37.8 22.9 14.9 65.0 Steel Products and Measurement 30.0 25.6 4.4 17.0 Total $ 183.7 $ 141.4 $ 42.3 2
Slide 30: Segment Results – Q2
Segment Results – Q2 Three Months Ended Three Months Ended Delta Segment Sales June 30, 2023 June 30, 2022 ($ in millions) $ $ $ % Rail, Technologies, and Services $ 91.6 $ 81.8 $ 9.8 12.0% Precast Concrete Products 33.9 23.6 10.3 43.4 Steel Products and Measurement 22.6 26.1 (3.6) (13.6) Total $ 14
Slide 31: Segment Results – YTD
Segment Results – YTD Six Months Ended Six Months Ended Delta Segment Sales June 30, 2023 June 30, 2022 ($ in millions) $ $ $ % Rail, Technologies, and Services $ 156.0 $ 145.5 $ 10.5 7.2% Precast Concrete Products 58.2 38.6 19.5 50.6 Steel Products and Measurement 49.4 46.2 3.2 6.9 Total $ 263.5 $
Slide 32: Non-GAAP Measure: Funding Capacity
Non-GAAP Measure: Funding Capacity ( $ in millions) June 30, 2023 Cash and cash equivalents $ 3.9 Total availability under the credit facility 130.0 Outstanding borrowings on revolving credit facility (89.3) Letters of credit outstanding (1.2) Net availability under the revolving credit facility 1 $
Slide 33: Non-GAAP Measure: Net Debt
Non-GAAP Measure: Net Debt June 30, March 31, December 31, September 30, June 30, March 31, December 31, September 30, 2023 2023 2022 2022 2022 2022 2021 2021 ($ in millions) Total debt $ 89.5 $ 80.1 $ 91.9 $ 98.9 $ 49.3 $ 35.6 $ 31.3 $ 32.5 Less cash and cash equivalents (3.9) (2.6) (2.9) (4.9) (7.
Slide 34: Non-GAAP Measure: Adjusted EBITDA and Leverage
Non-GAAP Measure: Adjusted EBITDA and Leverage Three Months Ended Six Months Ended ($ in millions) June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Net income, as reported $ 3.5 $ 2.0 $ 1.3 $ 0.4 Interest expense - net 1.6 0.4 3.0 0.8 Income tax expense 0.6 0.8 - 0.3 Depreciation expense 2.5