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 January 30, 2009 (January 30, 2009)
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 January 30, 2009, L.B. Foster Company (the "Company") issued a press
release announcing the Company's results of operations for the fourth quarter
ended December 31, 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, January 30, 2009.
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: January 30, 2009
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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 January 30, 2009, 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 FOURTH QUARTER
OPERATING RESULTS
PITTSBURGH, PA, January 30, 2009 - 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 26.1% to $143.8 million compared to $114.0 million in the prior year
quarter. Gross profit margin was 13.9%, down 360 basis points from the prior
year quarter primarily as a result of increased LIFO expense and decreased
billing margins partially offset by improved manufacturing variances. Fourth
quarter LIFO expense was approximately $4.9 million compared to a $0.2 million
credit in the prior year.
2008 Fourth Quarter Results
In the fourth quarter of 2008, L.B. Foster had income from continuing operations
of $5.7 million or $0.55 per diluted share compared to income from continuing
operations of $86.2 million or $7.79 per diluted share in the fourth quarter of
2007. The prior year fourth quarter results included a $122.9 million gain on
the sale of the Company's investment in the DM&E Railroad. Excluding this gain,
income from continuing operations was $8.1 million or $0.73 per diluted share in
the fourth quarter of 2007. Accordingly, the fourth quarter of 2008 was $0.18
per share or 24.7% less than the 2007 fourth quarter adjusted earnings per
diluted share.
Selling and administrative expenses increased $2.2 million or 23.9% over last
year's quarter due primarily to increased bad debt expense as well as increased
salaries. Fourth quarter interest expense was $0.5 million, a 35.4% decrease
from the prior year quarter due principally to decreased borrowings as well as
decreased interest rates. The Company's income tax rate from continuing
operations was 33.9% in the fourth quarter compared to 35.8% in the prior year
quarter. The lower tax rate in the current year quarter was due primarily to an
increase in the domestic production activities deduction.
"While we are pleased to report that increases across all product segments
contributed to a 26.1% sales increase for the quarter and another record
performance for the year, LIFO expense and bad debt expense had a significant
negative impact on our fourth quarter results. The 2008 LIFO expense was the
largest in the Company's history. Additionally, we recorded a $1.5 million bad
debt expense related to a single customer. Bookings for the quarter were strong,
up 13.3% to $99.5 million compared to $87.8 million last year and backlog was
$132.6 million, down 4.1% from last year," commented Stan Hasselbusch, President
and Chief Executive Officer. Mr. Hasselbusch also announced, "L.B. Foster
purchased 71,223 shares of its stock in November for approximately $1.7 million
in addition to the previously announced 224,400 shares purchased in October
pursuant to share repurchase programs authorized by our Board of Directors in
May and October 2008. Our 2008 L.B. Foster share purchases now total 865,532
shares totaling $26.5 million of the $40.0 million authorized."
2008 Total Year Results
For the twelve months ended December 31, 2008, L.B. Foster reported income from
continuing operations of $27.7 million or $2.57 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 gain on the sale of our DM&E investment as
well as $8.5 million of incremental dividend income recorded in the third
quarter of 2007 related to the DM&E sale, earnings per diluted share from
continuing operations were $2.36 compared to $2.28 in 2007, an increase of 3.5%.
Net sales for the twelve months of 2008 increased 0.7% to $512.6 million
compared to $509.0 million in 2007. Gross profit margin was 15.6%, up 60 basis
points from 2007, primarily as a result of increased billing margins and
improved manufacturing variances, substantially offset by increased LIFO
expense.
Selling and administrative expenses increased $3.6 million or 9.5% over the
prior year due primarily to salaries and bad debt expense. Interest expense
decreased 50.5% from the prior year to $2.0 million due principally to decreased
borrowings and, to a lesser extent, decreased interest rates. The Company's
income tax rate from continuing operations was 35.9% compared to 34.3% in the
prior year.
Cash provided from operations was approximately $14.7 million for the fourth
quarter of 2008 and $24.1 million for the full year compared to $41.4 million
(as adjusted for the DM&E transactions) in 2007. Capital expenditures for 2008
were $4.8 million compared to $5.3 million in the prior year. "As we enter 2009,
we expect to be challenged by a difficult business environment. During the
fourth quarter, we have diligently prepared for the impending downturn by
implementing certain measures to control costs, focus on ways to maximize free
cash flow, improve our operational excellence and continue to look for
opportunities to leverage our strong balance sheet, all with the goal of
maintaining sales and minimizing profit erosion," noted Mr. Hasselbusch as he
concluded, "We have strong liquidity, access to credit and we continue to look
for value as we target synergistic and accretive acquisitions."
The Company also announced that its 2009 Annual Meeting of Shareholders is
scheduled for May 21, 2009 at the Company's headquarters at 415 Holiday Drive,
Pittsburgh, PA 15220. The record date for shareholders entitled to vote at the
meeting will be on the close of business on March 20, 2009.
L.B. Foster Company will conduct a conference call and webcast to discuss its
fourth quarter 2008 operating results and general market activity and business
conditions on Friday, January 30, 2009 at 11:00am 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 Twelve Months Ended
December 31, December 31,
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2008 2007 2008 2007
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(unaudited) (unaudited)
NET SALES $143,768 $114,015 $512,592 $508,981
COSTS AND EXPENSES:
Cost of goods sold 123,763 94,054 432,374 432,598
Selling and administrative
expenses 11,552 9,322 40,969 37,403
Interest expense 452 700 1,995 4,031
Dividend income - - - (9,214)
Gain on sale of DM&E investment - (122,885) (2,022) (122,885)
Gain on sale of property - - (1,486) -
Interest income (657) (1,175) (2,675) (1,196)
Other expense (income) 94 (226) 158 (267)
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135,204 (20,210) 469,313 340,470
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INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 8,564 134,225 43,279 168,511
INCOME TAX EXPENSE 2,907 47,991 15,533 57,787
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INCOME FROM CONTINUING OPERATIONS 5,657 86,234 27,746 110,724
DISCONTINUED OPERATIONS:
LOSS FROM DISCONTINUED OPERATIONS - (2) - (47)
INCOME TAX BENEFIT - - - (16)
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LOSS FROM DISCONTINUED OPERATIONS - - - (31)
NET INCOME $ 5,657 $ 86,232 $ 27,746 $110,693
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BASIC EARNINGS PER COMMON SHARE:
FROM CONTINUING OPERATIONS $0.55 $7.98 $2.60 $10.39
FROM DISCONTINUED OPERATIONS 0.00 (0.00) 0.00 (0.00)
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BASIC EARNINGS PER COMMON SHARE $0.55 $7.98 $2.60 $10.39
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DILUTED EARNINGS PER COMMON SHARE:
FROM CONTINUING OPERATIONS $0.55 $7.79 $2.57 $10.09
FROM DISCONTINUED OPERATIONS 0.00 (0.00) 0.00 (0.00)
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DILUTED EARNINGS PER COMMON SHARE $0.55 $7.79 $2.57 $10.09
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AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - BASIC 10,248 10,806 10,670 10,653
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AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - DILUTED 10,365 11,068 10,811 10,970
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L.B. Foster Company and Subsidiaries
Consolidated Balance Sheet
(In thousands)
December 31,
2008 2007
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ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash items $115,074 $121,097
Accounts and notes receivable:
Trade 63,271 52,856
Other 1,042 754
Inventories 102,916 102,447
Current deferred tax assets 2,870 3,615
Other current assets 1,221 1,131
Property held for resale - 2,497
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Total Current Assets 286,394 284,397
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OTHER ASSETS:
Property, plant & equipment-net 39,989 44,136
Goodwill 350 350
Other intangibles - net 37 50
Deferred tax assets 1,258 1,411
Investments 2,856 -
Other non-current assets 407 428
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Total Other Assets 44,897 46,375
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$331,291 $330,772
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities on long-term debt $ 5,777 $ 6,191
Accounts payable-trade and other 62,612 53,689
Accrued payroll and employee benefits 8,000 11,490
Current deferred tax liabilities 61 3,541
Other accrued liabilities 7,680 8,841
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Total Current Liabilities 84,130 83,752
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LONG-TERM DEBT, TERM LOAN 13,333 16,190
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OTHER LONG-TERM DEBT 8,401 11,866
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DEFERRED TAX LIABILITIES 1,278 1,638
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OTHER LONG-TERM LIABILITIES 6,587 3,500
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STOCKHOLDERS' EQUITY:
Class A Common stock 111 109
Paid-in capital 47,585 45,147
Retained earnings 197,060 169,314
Treasury stock (26,482) -
Accumulated other comprehensive loss (712) (744)
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Total Stockholders' Equity 217,562 213,826
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$331,291 $330,772
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