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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) if the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): January 28, 2004
L. B. FOSTER COMPANY
(Exact name of registrant as specified in charter)
Pennsylvania 000-10436 25-1324733
(State of Incorporation) (Commission File Number) (I. R. S. Employer
Identification No.)
415 Holiday Drive, Pittsburgh, Pennsylvania 15220
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (412) 928-3417
Item 12. Results of Operations and Financial Condition
On January 28, 2004, L. B. Foster Company (the "Company") issued a press release
announcing the Company's results of operations for the fourth quarter ended
December 31, 2003. A copy of that press release is furnished with this report as
Exhibit 99.1 and is incorporated herein by reference.
The information furnished in this item 12 shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934, 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 Exchange
Act of 1933, as amended, except as shall be expressly set forth by specific
reference in such filing.
INDEX TO EXHIBITS
99.1 Press release dated January 28, 2004.
SIGNATURES
Pursuant to the requirements of the Securities and 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
(Registrant)
Date: January 28, 2004 By: /s/ David J. Russo
----------------------
David J. Russo
Senior Vice President,
Chief Financial Officer and
Treasurer
Exhibit 99.1
L. B. Foster Company Reports Fourth Quarter/Year End Results
PITTSBURGH, Jan. 28 /PRNewswire-FirstCall/ -- L.B. Foster Company
(Nasdaq: FSTR), a manufacturer, fabricator, and distributor of rail,
construction, and tubular products, today reported a net loss from continuing
operations of $0.4 million ($0.04 per share) for the fourth quarter of 2003
versus a net loss from continuing operations of $3.7 million ($0.39 per share)
in the fourth quarter of 2002. The fourth quarter of 2002 results included one
time charges of $5.9 million, or $3.5 million net of tax.
The total net loss for the fourth quarter of 2003 was $0.4 million ($0.04
per share) versus a net loss of $4.7 million ($0.50 per share) for the fourth
quarter of 2002. The fourth quarter of 2002 net loss results include a
$1.1 million net loss from discontinued operations (related to the Company's
Foster Technologies subsidiary) while the fourth quarter of 2003 results
related to this entity were negligible.
Net sales for the fourth quarter of 2003 were $53.1 million compared to
$57.0 million in 2002, a decrease of 7%. Excluding the prior year charge for
additional depreciation of $0.8 million related to the Company's Newport, KY
Pipe Coating assets, gross margins improved slightly by 0.2 percentage points
to 11.4%. Selling and administrative expenses declined $0.4 million or 6% over
the same prior year period, primarily due to lower insurance costs realized in
the current quarter. Other (income) expense improved by $5.3 million compared
to the prior year fourth quarter due primarily to last year's one time charge
of $5.1 million for the write-down of advances made to a specialty trackwork
supplier. Fourth quarter interest expense declined 16% from the prior year due
to a $6.3 million reduction in debt as compared to prior year end levels.
For the year ended December 31, 2003, the Company reported net income from
continuing operations of $2.2 million ($0.22 per diluted share) versus a net
loss from continuing operations of $5.0 million ($0.53 per diluted share) for
the same period a year ago. In addition to the previously mentioned one time
charges recorded in the fourth quarter of 2002, the prior year twelve month
results included a non-cash charge of $2.2 million ($1.3 million, net of tax)
related to mark-to-market accounting for derivative instruments and a non-cash
charge of $1.8 million related to an "other than temporary" impairment of the
Company's equity investment in a specialty trackwork supplier.
Including net income from discontinued operations of $1.3 million ($0.13
per diluted share), the Company reported net income of $3.4 million ($0.35 per
diluted share) for the year ended December 31, 2003. This compares to the 2002
net loss of $11.4 million ($1.20 per diluted share) which included a loss from
discontinued operations of $2.0 million ($0.21 per diluted share) and a
non-cash charge of $4.4 million ($0.46 per diluted share) from the cumulative
effect of a change in accounting principle as a result of the adoption of
Financial Accounting Standards No. 142 "Goodwill and Other Intangible Assets".
The income from discontinued operations from 2003 comes primarily from the
release of a $1.6 million valuation allowance against foreign net operating
losses that are expected to be utilized as a result of the dissolution of this
subsidiary.
Net sales from continuing operations for the twelve months ended
December 31, 2003 were $264.3 million compared to $258.0 million in 2002, an
increase of 2%. Excluding the prior year non-recurring charge of $0.8 million,
gross margins improved by 0.3 percentage points to 12.0% while selling and
administrative expenses increased $0.5 million or 2% over the same prior year
period. Other (income) expense improved by $9.4 million over the same prior
year period primarily as a result of the previously mentioned prior year
charge of $5.1 million for the write-down of advances made to a specialty
trackwork supplier, the $2.2 million charge related to mark-to-market
accounting for derivative instruments, and the $1.8 million charge related to
the impairment of the Company's equity investment in a specialty trackwork
supplier. Interest expense declined 13% as a result of the previously
mentioned reduction in corporate borrowings.
Cash flow from operations remained strong for the year ended December 31,
2003 and was sufficient to fund over $2.5 million in capital expenditures and
the reduction in over $6.0 million of debt.
President and CEO, Stan Hasselbusch commented, "While we are pleased with
our progress made to date, we have just scratched the surface on our recent
productivity enhancements that we intend to implement throughout the company.
Our plans for 2004 include continued operational and financial improvement.
However, the outlook for the first six months of this year for the part of our
construction segment that relies on transportation infrastructure spending is
weak. This weakness is due primarily to continuing state budget deficits as
well as the delay in passing Federal legislation that would reauthorize more
than $200 billion of Federal funding for such programs. Although we are
prepared to capitalize on any improvement in the economy that may benefit our
markets, our plans do not anticipate any significant improvements from the
economy in 2004. Additionally, our sheet piling supplier continues to
struggle to maintain adequate and reliable production levels necessary for us
to grow this business profitably."
Mr. Hasselbusch continued to remark, "We are in the process of bidding on
a substantial, long-term concrete tie contract and should know the status by
the end of the first quarter. Additionally, we remain enthusiastic about our
concrete building business as we continue to expand our product offerings and
geographic reach."
Mr. Hasselbusch went on to say, "Our balance sheet is strong; debt was
reduced by over $6 million in 2003 or 23%. Over the past three years, debt
has declined over $29 million or 58%. We are also very pleased with the
progress made and value being created by the DM&E railroad. We continue to
believe in the strategic direction of the railroad and are excited about its
prospects."
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, adequate funding for
infrastructure projects, the potential value or viability of the DM&E, the
ability to secure significant sales contracts, the Company's ability to obtain
special trackwork products and continued availability of existing and new
piling products. 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.
CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
L. B. FOSTER COMPANY AND SUBSIDIARIES
(In Thousands, Except Per Share Amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2003 2002 2003 2002
(Unaudited) (Unaudited)
NET SALES $53,149 $57,006 $264,266 $257,950
COSTS AND EXPENSES:
Cost of goods sold 47,087 51,378 232,534 228,483
Selling and administrative
expenses 6,443 6,852 26,936 26,475
Interest expense 517 616 2,250 2,592
Other (income) expense (560) 4,716 (1,315) 8,040
53,487 63,562 260,405 265,590
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES
AND CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE (338) (6,556) 3,861 (7,640)
INCOME TAXES 65 (2,881) 1,698 (2,611)
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE (403) (3,675) 2,163 (5,029)
DISCONTINUED OPERATIONS:
LOSS FROM OPERATIONS OF FOSTER
TECHNOLOGIES (3) (1,054) (513) (2,005)
INCOME TAX BENEFIT (1) 0 (1,790) 0
INCOME (LOSS) ON DISCONTINUED
OPERATIONS (2) (1,054) 1,277 (2,005)
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE, NET OF TAX 0 0 0 (4,390)
NET INCOME (LOSS) ($405) ($4,729) $3,440 ($11,424)
BASIC EARNINGS (LOSS) PER SHARE:
FROM CONTINUING OPERATIONS BEFORE
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE ($0.04) ($0.39) $0.23 ($0.53)
FROM DISCONTINUED OPERATIONS, NET
OF TAX 0.00 (0.11) 0.13 (0.21)
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE, NET OF TAX 0.00 0.00 0.00 (0.46)
BASIC EARNINGS (LOSS) PER SHARE ($0.04) ($0.50) $0.36 ($1.20)
DILUTED EARNINGS (LOSS) PER SHARE:
FROM CONTINUING OPERATIONS BEFORE
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE ($0.04) ($0.39) $0.22 ($0.53)
FROM DISCONTINUED OPERATIONS, NET
OF TAX 0.00 (0.11) 0.13 (0.21)
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE, NET OF TAX 0.00 0.00 0.00 (0.46)
DILUTED EARNINGS (LOSS) PER SHARE ($0.04) ($0.50) $0.35 ($1.20)
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - BASIC 9,664 9,521 9,588 9,494
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - DILUTED 9,933 9,589 9,748 9,647
* Since the Company incurred losses applicable to common stockholders
in the fourth quarter of 2003 as well as all 2002 periods presented, the
inclusion of dilutive securities in the calculation of weighted average
common shares is anti-dilutive and therefore, there is no difference
between basic and diluted earnings per share.
SOURCE L. B. Foster Company
-0- 01/28/2004
/CONTACT: Stan L. Hasselbusch of L. B. Foster Company, +1-412-928-3417,
or fax, +1-412-928-7891, or investors@LBFosterCo.com/
(FSTR)
CO: L. B. Foster Company
ST: Pennsylvania
IN: CST TRN
SU: ERN