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 April 23, 2009 (April 23, 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 April 23, 2009, L.B. Foster Company (the "Company") issued a press
release announcing the Company's results of operations for the first quarter
ended March 31, 2009. 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, April 23, 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: April 23, 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 April 23, 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 FIRST QUARTER
OPERATING RESULTS
PITTSBURGH, PA, April 23, 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 4.6% to $97.7 million compared to $93.4 million in the prior year
quarter. Gross profit margin was 14.0%, down 270 basis points from the prior
year quarter primarily as a result of a $1.6 million ($0.10 per diluted share)
warranty charge taken related to certain concrete ties that failed in track as
well as decreased billing margins and increased manufacturing variances.
2009 First Quarter Results
In the first quarter of 2009, L.B. Foster had net income of $3.0 million or
$0.29 per diluted share compared to net income of $6.3 million or $0.57 per
diluted share in the first quarter of 2008. The prior year results included a
pretax gain related to additional proceeds from the October 2007 sale of the
Company's investment in the DM&E Railroad of $2.0 million, 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, earnings per diluted share were $0.36
in the first quarter of 2008.
Selling and administrative expenses decreased $0.3 million or 3.6% from last
year's quarter due primarily to lower travel and entertainment expense as well
as decreased outside services, partially offset by higher salaries. First
quarter interest expense was $0.3 million, a 40.9% decrease from the prior year
quarter due principally to decreased borrowings and, to a lesser extent, lower
interest rates. The Company's income tax rate was 36.6% in the first quarter
compared to 36.1% in the prior year quarter.
"While we are pleased with our sales in this difficult business environment, we
are disappointed in our net income due to several factors; most notably the $1.6
million warranty charge. The ties in question were produced in 2004 before we
installed our new manufacturing equipment and we believe that the problem is
isolated to a specific line that is no longer in use at a specific facility. We
live and breathe certain key values at L.B. Foster, such as integrity and
safety, but none are more core to this Company than quality. We are
investigating the root cause, which we believe relates to older manufacturing
equipment that was decommissioned when we retrofitted our facilities with new
equipment in 2005 - 2006," stated Stan Hasselbusch, President and Chief
Executive Officer. Mr. Hasselbusch also commented, "Our Rail segment experienced
mixed results as New Rail and Allegheny Rail Products led the way, but could not
overcome declines in Relay Rail, Transit Products and CXT Ties. Our Construction
segment net sales were down 9.8% due to a reduction in Piling sales, which was
partially offset by sales increases in Precast Buildings and Fabricated
Products. Bookings for the quarter were $97.2 million compared to $132.8 million
last year, a 26.8% decline. Backlog was $130.9 million, down 24.6% from last
year, which indicates continued short-term weakness."
Mr. Hasselbusch added, "On the positive side, we are beginning to see areas of
opportunity generated from the recent stimulus legislation in our Transit,
Piling and Precast Buildings businesses. Some of that work has already started
to bid and we expect to begin to benefit from it in the second half of this
year. I would also like to announce that L.B. Foster purchased 86,141 shares of
its stock in the first quarter for approximately $1.9 million pursuant to the
2008 share repurchase program authorized by our Board. Our 2008 and 2009 L.B.
Foster share purchases now total 951,673 shares totaling $28.3 million of the
$40.0 million authorized."
Cash used by operations was approximately $12.1 million for the first quarter of
2009 due primarily to an increase in working capital caused by a significant
reduction in accounts payable. Capital expenditures were $0.6 million compared
to $2.1 million in the prior year. "We continue to anticipate that in 2009, we
will generate positive cash flow in excess of our capital expenditures, debt
service and share repurchases. As we navigate through 2009, we expect to
continue to be challenged by a difficult business environment and will continue
to implement certain measures to control costs, focus on ways to maximize free
cash flow, improve our operational processes 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 continue to have strong liquidity and access to credit and we
continue to look for value through synergistic and accretive acquisitions."
L.B. Foster Company will conduct a conference call and webcast to discuss its
first quarter 2009 operating results and general market activity and business
conditions on Thursday, April 23, 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, additional concrete tie defects 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 OPERATIONS
L. B. FOSTER COMPANY AND SUBSIDIARIES
(In Thousands, Except Per Share Amounts)
Three Months Ended
March 31,
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2009 2008
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(Unaudited)
NET SALES $97,744 $93,441
COSTS AND EXPENSES:
Cost of goods sold 84,062 77,820
Selling and administrative
expenses 9,027 9,366
Interest expense 328 555
Gain on sale of DM&E investment - (2,022)
Gain on sale of Houston, TX property - (1,486)
Interest income (295) (815)
Other (income) expense (143) 151
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92,979 83,569
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INCOME BEFORE INCOME TAXES 4,765 9,872
INCOME TAX EXPENSE 1,746 3,566
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NET INCOME $3,019 $6,306
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BASIC EARNINGS PER COMMON SHARE $0.30 $0.57
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DILUTED EARNINGS PER COMMON SHARE $0.29 $0.57
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AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - BASIC 10,203 10,977
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AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - DILUTED 10,339 11,141
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L.B. Foster Company and Subsidiaries
Consolidated Balance Sheet
(In thousands)
March 31, December 31,
2009 2008
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ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash items $98,965 $115,074
Accounts and notes receivable:
Trade 58,347 63,271
Other 363 1,042
Inventories 98,058 102,916
Current deferred tax assets 2,925 2,931
Other current assets 1,974 1,221
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Total Current Assets 260,632 286,455
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OTHER ASSETS:
Property, plant & equipment-net 38,439 39,989
Goodwill 350 350
Other intangibles - net 34 37
Deferred tax assets 2,032 2,026
Investments 2,524 2,856
Other non-current assets 460 407
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Total Other Assets 43,839 45,665
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$304,471 $332,120
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities on long-term debt $5,780 $5,777
Accounts payable-trade and other 40,715 62,612
Accrued payroll and employee benefits 3,633 8,000
Other accrued liabilities 7,042 7,802
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Total Current Liabilities 57,170 84,191
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LONG-TERM DEBT, TERM LOAN 12,619 13,333
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OTHER LONG-TERM DEBT 7,577 8,401
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DEFERRED TAX LIABILITIES 1,926 2,046
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OTHER LONG-TERM LIABILITIES 6,541 6,587
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STOCKHOLDERS' EQUITY:
Class A Common stock 111 111
Paid-in capital 47,708 47,585
Retained earnings 200,079 197,060
Treasury stock (28,345) (26,482)
Accumulated other comprehensive loss (915) (712)
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Total Stockholders' Equity 218,638 217,562
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$304,471 $332,120
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