UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event October 23, 2008 (October 23, 2008)
reported) ------------------------------------
L. B. Foster Company
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(Exact name of registrant as specified in its charter)
Pennsylvania 000-10436 25-1324733
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
415 Holiday Drive, Pittsburgh, Pennsylvania 15220
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (412) 928-3417
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On October 23, 2008, L.B. Foster Company (the "Company") issued a press
release announcing the Company's results of operations for the third quarter
ended September 30, 2008. A copy of that press release is furnished with this
report as Exhibit 99.1.
The information contained in this Current Report shall not be deemed to be
"filed" for the purposes of Section 18 of the Securities and Exchange Act of
1934 (the "Exchange Act"), as amended, or otherwise subject to the liabilities
of that section, nor shall such information be deemed incorporated by reference
in any filing under the Securities and Exchange Act of 1933, as amended, except
as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
99.1 Press Release issued by L.B. Foster Company, October 23, 2008.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
L.B. Foster Company
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(Registrant)
Date: October 23, 2008
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/s/ David J. Russo
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David J. Russo
Senior Vice President,
Chief Financial Officer and Treasurer
EXHIBIT INDEX
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Exhibit Number Description
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99.1 Press Release dated October 23, 2008, of L. B. Foster Company.
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PRESS RELEASE
L.B. Foster Company
415 Holiday Drive, Pittsburgh, PA 15220
Contact: David J. Russo
Phone: (412) 928-3417
FAX: (412) 928-7891
Email: investors@LBFosterCo.com
FOR IMMEDIATE RELEASE
L.B. FOSTER REPORTS INCREASED SALES
AND INCREASED ADJUSTED OPERATING RESULTS
PITTSBURGH, PA, October 23, 2008 - L.B. Foster Company (NASDAQ: FSTR), a leading
manufacturer, fabricator, and distributor of products and services for rail,
construction, energy and utility markets, today reported that net sales
increased 7.2% to $145.6 million compared to $135.8 million in the prior year
quarter. Gross profit margin was 15.6%, up 14 basis points from the prior year
quarter primarily as a result of increased billing margins and decreased
unfavorable manufacturing variances partially offset by increased LIFO expense.
Third quarter LIFO expense was approximately $5.1 million compared to $0.6
million in the prior year.
2008 Third Quarter Results
In the third quarter of 2008, L.B. Foster had income from continuing operations
of $8.1 million or $0.76 per diluted share compared to income from continuing
operations of $14.5 million or $1.32 per diluted share in the third quarter of
2007. The prior year third quarter results included $8.5 million of incremental
dividend income related to the sale of the Company's investment in the DM&E
Railroad. Excluding this incremental dividend income, income from continuing
operations was $7.0 million or $0.64 per diluted share in the third quarter of
2007. Accordingly, the third quarter of 2008 was $0.12 per share or 19% higher
than the 2007 third quarter adjusted earnings per diluted share.
Selling and administrative expenses increased $0.2 million or 2.0% over last
year's quarter due primarily to increased salaries and advertising expenses.
Third quarter interest expense was $0.5 million, a 46% decrease from the prior
year quarter due principally to decreased average borrowings as the Company
generated strong positive cash flows in the second half of 2007. The Company
also generated $0.6 million of investment income in the third quarter of 2008.
The Company's income tax rate from continuing operations was 35.9% in the third
quarter compared to 22.8% in the prior year quarter. The low tax rate in the
prior year third quarter was due to the fact that only 30% of the incremental
$8.5 million of dividend income was taxable.
"We are pleased to report that sales increased 7.2% in the third quarter as
compared to the prior year. This increase was driven by Construction Products
and Rail Products. While our Tubular segment was off of last year's brisk sales
pace, it continues to have a very strong year. Gross profit margins increased
slightly over the prior year quarter, but fell short of first half margins due
primarily to increased LIFO expense. Bookings for the quarter totaled $115.8
million compared to $119.3 million last year and backlog is $178.9 million, up
7.9% from last year. Due to efficiencies, our plants and yards continued to
perform extremely well even in certain areas where activity levels have
declined," commented Stan Hasselbusch, President and Chief Executive Officer.
Mr. Hasselbusch also announced, "L.B. Foster purchased 156,547 shares of its
stock during the third quarter for approximately $6.0 million and an additional
224,400 shares in early October for approximately $4.9 million pursuant to a
share repurchase program authorized by our Board of Directors in May 2008. Our
2008 Foster share purchases now total $24.8 million of the $25.0 million
authorized."
2008 Nine Month Results
For the nine months ended September 30, 2008, L.B. Foster reported income from
continuing operations of $22.1 million or $2.01 per diluted share. These results
include a $2.0 million first quarter pretax gain related to a favorable working
capital adjustment pursuant to the prior year sale of the Company's investment
in the DM&E Railroad, as well as a $1.5 million pretax gain on the sale and
lease-back of our threaded products facility in Houston, Texas. Excluding these
gains and the aforementioned 2007 incremental dividend income, earnings per
diluted share from continuing operations were $1.82 compared to $1.55 in 2007,
an increase of 17%.
Net sales for the nine months of 2008 decreased 6.6% to $368.8 million compared
to $395.0 million in 2007. Gross profit margin was 16.3%, up 200 basis points
from 2007, primarily as a result of increased billing margins and improved
manufacturing variances, partially offset by increased LIFO expense.
Selling and administrative expenses increased $1.3 million or 4.8% over the
prior year due primarily to salaries, benefits and advertising. Interest expense
decreased $1.8 million from the prior year due principally to decreased average
borrowings. The Company's income tax rate from continuing operations was 36.4%
compared to 28.6% in the prior year.
Cash provided from operations was approximately $12.3 million for the third
quarter of 2008 compared to a $24.4 million in the third quarter of 2007. Third
quarter capital expenditures were $0.9 million compared to $1.1 million during
the prior year quarter. Year-to-date capital expenditures were $4.0 million,
$0.2 million higher than 2007. "We continue to expect to generate positive cash
flows from operations well in excess of our capital expenditures in 2008," noted
Mr. Hasselbusch as he concluded, "We have strong liquidity, access to credit and
we continue to exercise prudence and look for value as we target synergistic and
accretive acquisitions."
L.B. Foster Company will conduct a conference call and webcast to discuss its
third quarter 2008 operating results and general market activity and business
conditions on Thursday, October 23, 2008 at 1:00pm ET. The call will be hosted
by Mr. Stan Hasselbusch, President and Chief Executive Officer. Listen via audio
on the L.B. Foster web site: www.lbfoster.com, by accessing the Investor
Relations page.
The Company wishes to caution readers that various factors could cause the
actual results of the Company to differ materially from those indicated by
forward-looking statements in news releases, and other communications, including
oral statements, such as references to future profitability, made from time to
time by representatives of the Company. Specific risks and uncertainties that
could affect the Company's profitability include, but are not limited to,
general economic conditions, sudden and/or sharp declines in steel prices,
adequate funding for infrastructure projects, production delays or problems
encountered at our manufacturing facilities, and the availability of existing
and new piling and rail products. There are also no assurances that the Canadian
Pacific Railway will proceed with the Powder River Basin project and trigger any
contingent payments to L.B. Foster related to the Company's sale of its
investment in the DM&E. Matters discussed in such communications are
forward-looking statements that involve risks and uncertainties. Sentences
containing words such as "anticipates," "expects," or "will," generally should
be considered forward-looking statements. More detailed information on these and
additional factors which could affect the Company's operating and financial
results are described in the Company's Forms 10-K, 10-Q and other reports, filed
or to be filed with the Securities and Exchange Commission. The Company urges
all interested parties to read these reports to gain a better understanding of
the many business and other risks that the Company faces. The forward-looking
statements contained in this press release are made only as of the date hereof,
and the Company undertakes no obligation to update or revise these
forward-looking statements, whether as a result of new information, future
events or otherwise.
CONDENSED STATEMENTS OF CONSOLIDATED INCOME
L.B. FOSTER COMPANY AND SUBSIDIARIES
(In Thousands, Except Per Share Amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
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2008 2007 2008 2007
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(Unaudited) (Unaudited)
NET SALES $145,550 $135,753 $368,824 $394,966
COSTS AND EXPENSES:
Cost of goods sold 122,843 114,759 308,611 338,544
Selling and administrative
expenses 10,092 9,890 29,417 28,081
Interest expense 500 926 1,543 3,331
Dividend income - (8,719) - (9,214)
Gain on sale of DM&E investment - - (2,022) -
Gain on sale of property - - (1,486) -
Interest income (617) (15) (2,018) (21)
Other expense (income) 48 62 64 (41)
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132,866 116,903 334,109 360,680
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INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 12,684 18,850 34,715 34,286
INCOME TAXES 4,558 4,301 12,626 9,796
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INCOME FROM CONTINUING OPERATIONS, NET OF TAX 8,126 14,549 22,089 24,490
DISCONTINUED OPERATIONS:
LOSS FROM DISCONTINUED OPERATIONS - (26) - (45)
INCOME TAX BENEFIT - (8) - (16)
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LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX - (18) - (29)
NET INCOME $8,126 $14,531 $22,089 $24,461
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BASIC EARNINGS PER COMMON SHARE:
FROM CONTINUING OPERATIONS $0.77 $1.37 $2.04 $2.31
FROM DISCONTINUED OPERATIONS 0.00 (0.00) 0.00 (0.00)
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BASIC EARNINGS PER COMMON SHARE $0.77 $1.36 $2.04 $2.31
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DILUTED EARNINGS PER COMMON SHARE:
FROM CONTINUING OPERATIONS $0.76 $1.32 $2.01 $2.24
FROM DISCONTINUED OPERATIONS 0.00 (0.00) 0.00 (0.00)
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DILUTED EARNINGS PER COMMON SHARE $0.76 $1.32 $2.01 $2.24
========== ========== ========== ==========
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - BASIC 10,561 10,654 10,812 10,601
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AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - DILUTED 10,695 10,990 10,963 10,941
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L.B. Foster Company and Subsidiaries
Consolidated Balance Sheet
(In thousands)
September 30, December 31,
2008 2007
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ASSETS (Unaudited)
CURRENT ASSETS:
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Cash and cash items $111,755 $121,097
Accounts and notes receivable:
Trade 68,865 52,856
Other 567 754
Inventories 120,336 102,447
Current deferred tax assets 3,553 3,615
Other current assets 1,304 1,131
Property held for resale - 2,497
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Total Current Assets 306,380 284,397
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OTHER ASSETS:
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Property, plant & equipment-net 41,361 44,136
Goodwill 350 350
Other intangibles - net 41 50
Deferred tax assets 1,434 1,411
Other non-current assets 392 428
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Total Other Assets 43,578 46,375
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$349,958 $330,772
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
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Current maturities on long-term debt $5,833 $6,191
Short-term borrowings 238 -
Accounts payable-trade and other 76,664 53,489
Accrued payroll and employee benefits 7,269 11,490
Current deferred tax liabilities 3,541 3,541
Other accrued liabilities 7,321 8,841
Current liabilities of discontinued operations 200 200
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Total Current Liabilities 101,066 83,752
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LONG-TERM DEBT, TERM LOAN 14,048 16,190
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OTHER LONG-TERM DEBT 9,169 11,866
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DEFERRED TAX LIABILITIES 1,638 1,638
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OTHER LONG-TERM LIABILITIES 5,190 3,500
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STOCKHOLDERS' EQUITY:
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Class A Common stock 110 109
Paid-in capital 47,798 45,147
Retained earnings 191,403 169,314
Treasury stock (19,830) -
Accumulated other comprehensive loss (634) (744)
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Total Stockholders' Equity 218,847 213,826
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$349,958 $330,772
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