L.B. Foster Company · NASDAQ:FSTR
L.B. Foster — Investor Presentation (August 2023)
35 slides from L.B. Foster's investor presentation, August 2023
Slide 1: L.B. Foster Company Investor Presentation
L.B. Foster Company Investor Presentation NASDAQ - FSTR August 2023 Innovating to solve global infrastructure challenges
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: Company Overview
Company Overview "L.B. Foster Company has a rich history of innovation and customer service, and we are reinvigorated by the momentum building inside our business and the opportunity to grow shareholder value as a result of our strategic transformation." John Kasel President and CEO L.B. Foster 2023
Slide 4: 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 5: 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 pureplay with a diverse set of avenues for Organic Growth Drivers in Place growth in multi-year
Slide 6: Proud Legacy, Well-Positioned for Growth
Proud Legacy, Well-Positioned for Growth 1902 Founded by Lee B. Foster as used rail resale company. 1967 Opened bridge component fabrication facility in Bedford, PA. 1973 Entered into an agreement with Nippon Steel to thread and finish oilfield pipe. 1981 L.B. Foster goes public, trading on
Slide 7: Case for Action
Case for Action Deteriorating Profitability / Stock Price Performance 8-Year Share Price and Energy and related freight rail market downturn Adjusted EBITDA Margin1 Union Pacific lawsuit overhang $30 12% Covid pandemic Extended Energy market infrastructure depression $25 10% Removal from R
Slide 8: Strategic Transformation in Action
Strategic Transformation in Action Divestitures Acquisitions Lower Margin Profiles – Energy-Focused / Commoditized Businesses Higher Margin Profiles – Rail Technologies and Precast Concrete 2022 – Skratch and Intelligent Video (IV) 2021 – Piling Products - Commoditized, working-capital intensive bus
Slide 9: Business Segments
Business Segments "Our business portfolio represents a steady, long-term infrastructure pureplay with significant headroom for growth and an improving margin and profitability profile." John Kasel President and CEO L.B. Foster 2023 Investor Presentation Deck 9 August 2023
Slide 10: Business Segment Profile
Business Segment Profile Rail, Technologies, and Precast Concrete Steel Products and TTM Q2 2023 Sales by Segment Services Products Measurement ($ in millions) $600 $96 $531 $400 $124 Offering: Offering: Offering: - Rail products / technology-based - Proprietary precast products to support - Bridge,
Slide 11: Rail, Technologies, and Services - Overview
Rail, Technologies, and Services - Overview Offering supports the safety, reliability, and efficiencies of global Rail markets TTM Q2 2023 Rail Segment Sales Business Gross Margin Profiles ($ in millions) 40% Rail Products $300 Products for rail track infrastructure $34 $311 Legacy L.B. Foster b
Slide 12: Rail, Technologies, and Services - Advantages
Rail, Technologies, and Services - Advantages Continuing focus on technology innovation driving improved margins Transportation Spend Forecast Pending 2023 Railway Safety Act Why Now? FMI Corp North American Engineering and Construction Outlook Q2 2023 Market-leading positions in technology-orient
Slide 13: Rail Segment – Rail Products
Rail Segment – Rail Products Well-established business with strong cash generation and capital-light business model Transit Products Rail Distribution Largest component of segment today (~68% of sales) Capital light business model drives strong economic returns Scale generates significant cash
Slide 14: Rail Segment – Global Friction Management
Rail Segment – Global Friction Management Global platform well-positioned for growth with application innovation Trackside Consumables Equipment Technology-focused business...higher margin profile Razor / razor-blade business model with services Significant global growth opportunity for years
Slide 15: Rail Segment – Technology Services and Solutions
Rail Segment – Technology Services and Solutions Technology solutions and services to enhance safety, operational efficiency, and customer experience Control and Condition Contract Services WILD Display Monitoring Fixed and mobile displays for customer Building and technology management for Wayside
Slide 16: Precast Concrete Products Overview
Precast Concrete Products Overview Supports general infrastructure with expanding geographic reach and well-recognized brands CXT Buildings Precast Products VanHooseCo Concrete restroom, concession, Box culverts, irrigation canals, bridge Proprietary licensed technology multi-functional buildings be
Slide 17: Precast Concrete Products - Advantages
Precast Concrete Products - Advantages Recognizable offering with compelling value propositions Proprietary Licensed Technology from VanHooseCo Acquisition: Infrastructure investment super cycle Significant opportunity to integrate across segment Envirocast Leading position in niche markets
Slide 18: VanHooseCo Acquisition – Precast Growth Driver
VanHooseCo Acquisition – Precast Growth Driver VanHooseCo Key Financial Data ($ in millions) TTM Q2 2023 revenue before new plant volume ~$40M and imminent geographic growth initiatives Acquisition price $ 51 Above average gross margins TTM Q2 2023 Revenue ~40 Growth Initiative: Lebanon Plant (Nas
Slide 19: Steel Products and Measurement Overview
Steel Products and Measurement Overview Organic growth and improving margins driving cash generation to fund growth platforms Steel Products and Measurement Sales and Margin Impact ($ in millions) $150 $142.9 $60.8 $125 $100 Bridge Products Protective Coatings Threading $10.6 $92.7 $95.9 $0.0 $3.2 S
Slide 20: Financial Review
Financial Review "The favorable impact of our strategic transformation is evident from the positive momentum in our results." Bill Thalman Executive Vice President and CFO L.B. Foster 2023 Investor Presentation Deck 20 August 2023
Slide 21: Strong Indicators of Growth – New Orders and Revenue
Strong Indicators of Growth – New Orders1 and Revenue 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
Slide 22: Key Metrics: 2020 – TTM 2023
Key Metrics: 2020 – TTM 2023 Sales Gross Profit Adjusted EBITDA1 $550 22% $35 10% $115 19.9% $525 $531 20% $32 $30 8% $514 $29 $511 $500 18% $105 Gross Profit ($ in millions) Gross Profit ($ in millions) 18.0% Gross Profit Margin Gross Profit Margin $497 17.6% $25 $105 16.8% 5.7% $24 $475 16% 6% $95
Slide 23: 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 24: 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 25: Free Cash Flow Inflection Imminent
Free Cash Flow Inflection Imminent Building blocks for free cash flow inflection 2025 Goals Low High in place beginning 2024...expanding in Adjusted EBITDA $ 48.0 $ 52.0 2025 Maintenance Capex 8.0 6.0 Improved business portfolio, revenue Cash Interest 5.0 3.0 growth and margin expansion expected
Slide 26: 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 27: Closing Remarks
Closing Remarks John Kasel President and CEO L.B. Foster 2023 Investor Presentation Deck 27 August 2023
Slide 28: Significant progress achieved in 2 years
Significant progress achieved in 2 years Re-established enterprise strategy and execution playbook Refreshed Board expertise aligned with refreshed strategy Realigned management team and operating structure to execute Divested four commoditized, non-core businesses Acquired three technolog
Slide 29: Well positioned for growth
Well positioned for growth Strategic transformation taking hold in 2023 Growth drivers are in place Government initiatives and funding Construction growth in Southern U.S. Focus on rail safety and maintenance High-speed rail project in U.K. Bridge / pipeline project investments Great
Slide 30: Innovating to solve global infrastructure challenges
Innovating to solve global infrastructure challenges Structural Improvement in Profitability Near Term Goals (2025) Organic Growth Drives in Place REVENUE $580M - $620M Favorable Free Cash Flow Inflection Point Imminent GP % 22.0% - 23.0% Disciplined Capital Allocation ADJ. EBITDA1 $48M - $52M Adj.
Slide 31: L.B. Foster Company
L.B. Foster Company NASDAQ - FSTR August 2023 Innovating to solve global infrastructure challenges
Slide 32: Appendix
Appendix L.B. Foster 2023 Investor Presentation Deck 32 August 2023
Slide 33: Non-GAAP Measure: Adjusted EBITDA and Leverage
Non-GAAP Measure: Adjusted EBITDA and Leverage December 31, December 31, December 31, December 31, December 31, December 31, December 31, June 30, Twelve months ended: 2016 2017 2018 2019 2020 2021 2022 2023 ($ in millions) Net (loss) income $ (141.7) $ 4.1 $ (31.2) $ 42.6 $ 7.6 $ 3.5 $ (45.7) $ (44
Slide 34: 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 35: Non-GAAP Measure: Funding Capacity and Free Cash Flow
Non-GAAP Measure: Funding Capacity and Free Cash Flow ( $ 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
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