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 24, 2008 (April 24, 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 April 24, 2008, L.B. Foster Company (the "Company") issued a press
release announcing the Company's results of operations for the first quarter
ended March 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, April 24, 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 April 24, 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 April 24, 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 IMPROVED
INCOME FROM CONTINUING OPERATIONS
PITTSBURGH, PA, April 24, 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 its first quarter
earnings per diluted share from continuing operations were $0.57. These results
include a pretax gain related to additional proceeds from a favorable working
capital adjustment pursuant to the prior year sale of the Company's investment
in the DM&E Railroad of $2.0 million, as well as a pretax gain on the sale and
lease-back of our threaded products facility in Houston, Texas. Excluding these
gains, earnings per diluted share from continuing operations were $0.36 compared
to $0.28 in last year's first quarter, a 29% increase. This represents record
first quarter earnings for the Company and marks the thirteenth consecutive
quarter the Company has recorded an earnings increase over the prior year
quarter.
2008 First Quarter Results
In the first quarter of 2008, L.B. Foster had income from continuing operations
of $6.3 million or $0.57 per diluted share compared to income from continuing
operations of $3.1 million or $0.28 per diluted share in the first quarter of
2007.
Net sales decreased 15.6% to $93.4 million compared to $110.7 million in the
prior year quarter. Gross profit margin was 16.7%, up 390 basis points from the
prior year quarter primarily as a result of increased billing margins, decreased
unfavorable manufacturing variances and, to a lesser extent, decreased warranty
expense.
Selling and administrative expenses increased $1.0 million or 11.5% over last
year's quarter due primarily to increased employee related costs including
salaries and benefits. First quarter interest expense was $0.6 million, a 55%
decrease from the prior year quarter due principally to decreased average
borrowings as the Company generated strong positive cash flows in 2007. Interest
income was $0.8 million and $0.0 million in the first quarter of 2008 and 2007,
respectively. The Company's income tax rate from continuing operations was 36.1%
in the first quarter compared to 35.9% in the prior year quarter.
"Consolidated sales declined 15.6% and we anticipate that trend to continue;
however, margins were up substantially and we expect that trend to continue as
well," commented Stan Hasselbusch, President and Chief Executive Officer.
"Tubular product sales were strong, although tubular operating margins declined
in the first quarter. Construction Product sales were solid but below last year
due primarily to decreased Piling sales. Rail product sales were softer but
their operating margins improved due to improved billing margins, a favorable
product mix and enhanced operating efficiencies. CXT concrete tie sales
decreased from the prior year quarter due to lower sales at our Spokane and
Grand Island facilities. Allegheny Rail Products sales increased substantially
over last year and our facility in Pueblo, Colorado performed well," remarked
Mr. Hasselbusch.
Cash used by operations was approximately $9.2 million for the first quarter of
2008 compared to a $7.8 million use of cash in the first quarter of 2007.
Capital expenditures were $2.1 million in 2008 compared to $1.5 million during
the prior year quarter. "We continue to expect to generate positive cash flows
from operations in excess of our capital expenditures in 2008," commented Mr.
Hasselbusch, who continued by reporting, "Bookings for the first quarter were
$132.8 million, 23% lower than last year, although the gross profit margins
inherent in those orders were improved. Our backlog at March 31, 2008 was $173.7
million, 11% lower than last year while, again, the gross profit margin is
higher in the 2008 backlog. While we currently anticipate that the energy, rail
and construction markets we participate in will be favorable, we continue to
expect that 2008 sales and earnings will be challenged by: (i) expectations that
our Coated product volumes will be lower than 2007; (ii) reduced concrete tie
production and sales at our Grand Island and Tucson tie facilities due to
diminished demand by the Union Pacific Railroad and (iii) a reduction of Rail
Distribution sales to the DM&E Railroad." Mr. Hasselbusch concluded, "We
continue to undertake initiatives across the organization to improve our core
businesses while we pursue synergistic and accretive acquisitions."
L.B. Foster Company will conduct a conference call and webcast to discuss its
first quarter 2008 operating results and general market activity and business
conditions on Thursday, April 24, 2008 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. 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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2008 2007
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(Unaudited)
NET SALES $93,441 $110,666
COSTS AND EXPENSES:
Cost of goods sold 77,820 96,476
Selling and administrative
expenses 9,366 8,401
Interest expense 555 1,222
Gain on sale of DM&E investment (2,022) -
Gain on sale of property (1,486) -
Interest income (815) (2)
Other expense (income) 151 (256)
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83,569 105,841
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INCOME FROM CONTINUING OPERATIONS, BEFORE INCOME TAXES 9,872 4,825
INCOME TAXES 3,566 1,733
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INCOME FROM CONTINUING OPERATIONS 6,306 3,092
DISCONTINUED OPERATIONS:
INCOME FROM DISCONTINUED OPERATIONS, BEFORE INCOME TAXES - 12
INCOME TAXES - 4
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INCOME FROM DISCONTINUED OPERATIONS - 8
NET INCOME $6,306 $3,100
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BASIC EARNINGS PER COMMON SHARE:
FROM CONTINUING OPERATIONS $0.57 $0.29
FROM DISCONTINUED OPERATIONS 0.00 0.00
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BASIC EARNINGS PER COMMON SHARE $0.57 $0.29
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DILUTED EARNINGS PER COMMON SHARE:
FROM CONTINUING OPERATIONS $0.57 $0.28
FROM DISCONTINUED OPERATIONS 0.00 0.00
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DILUTED EARNINGS PER COMMON SHARE $0.57 $0.28
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AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - BASIC 10,977 10,555
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AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - DILUTED 11,141 10,898
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L. B. Foster Company and Subsidiaries
Consolidated Balance Sheet
(In thousands)
March 31, December 31,
2008 2007
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ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash items $117,199 $121,097
Accounts and notes receivable:
Trade 45,234 52,856
Other 453 754
Inventories 100,705 102,447
Current deferred tax assets 3,572 3,615
Other current assets 1,701 1,131
Property held for resale - 2,497
Prepaid income tax 329 -
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Total Current Assets 269,193 284,397
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OTHER ASSETS:
Property, plant & equipment-net 44,129 44,136
Goodwill 350 350
Other intangibles - net 47 50
Deferred tax assets 1,416 1,411
Other non-current assets 409 428
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Total Other Assets 46,351 46,375
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$315,544 $330,772
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities on long-term debt $6,184 $6,191
Accounts payable-trade and other 39,907 53,489
Accrued payroll and employee benefits 5,041 11,490
Current deferred tax liabilities 3,541 3,541
Other accrued liabilities 5,058 8,841
Current liabilities of discontinued operations 200 200
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Total Current Liabilities 59,931 83,752
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LONG-TERM DEBT, TERM LOAN 15,476 16,190
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OTHER LONG-TERM DEBT 11,038 11,866
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DEFERRED TAX LIABILITIES 1,638 1,638
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OTHER LONG-TERM LIABILITIES 5,405 3,500
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STOCKHOLDERS' EQUITY:
Class A Common stock 110 109
Paid-in capital 46,994 45,147
Retained earnings 175,620 169,314
Accumulated other comprehensive loss (668) (744)
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Total Stockholders' Equity 222,056 213,826
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$315,544 $330,772
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