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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): July 21, 2004
L. B. FOSTER COMPANY (Exact name
of registrant as specified in charter)
Pennsylvania 000-10436 25-1324733
(State of (Commission File (I. R. S. Employer
Incorporation) Number) 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 July 21, 2004, L. B. Foster Company (the "Company") issued a press release
announcing the Company's results of operations for the second quarter ended June
30, 2004. 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 July 21, 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: July 21, 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 Improved Second Quarter Results
PITTSBURGH, July 21 /PRNewswire-FirstCall/ -- L. B. Foster Company
(Nasdaq: FSTR), a manufacturer, fabricator, and distributor of rail,
construction, and tubular products, today reported net income of $1.3 million
($0.13 per diluted share) in the second quarter of 2004 versus net income of
$1.1 million ($0.11 per diluted share) in the second quarter of 2003.
Net sales for the second quarter of 2004 were $76.8 million compared to
$75.8 million in 2003, with gross margins remaining at 12.1%. Selling and
administrative expenses increased $0.2 million or 3% over the same prior year
period. Second quarter interest expense declined 19% from the prior year due
principally to the retirement of a $10.0 million notional amount LIBOR based
interest rate collar agreement in April 2004 that had a minimum interest rate
that was higher than the current LIBOR rate. Other income increased
$0.3 million primarily as a result of the mark-to-market adjustment recorded
by the Company related to its remaining interest rate collar.
For the six months ended June 30, 2004, the Company reported net income of
$1.2 million ($0.12 per diluted share) versus net income of $0.9 million
($0.10 per diluted share) for the same period a year ago. The prior year
results include a net loss from discontinued operations of $0.3 million
($0.03 per diluted share).
Net sales for the six months ended June 30, 2004 were $142.3 million
compared to $135.3 million in 2003, an increase of 5% while gross margins
declined by 1.1 percentage points to 10.8%. The increase in net sales was due
primarily to a 30% increase in new rail distribution sales, and, to a lesser
extent, a 15% increase in piling sales. The decline in gross profit margin
percentage was due to the fact that our first quarter sales increases came
primarily from our lower margin distribution businesses while many of our
higher margin manufacturing/fabrication units experienced lower sales volumes.
Selling and administrative expenses remained stable as compared to the same
prior year period. Interest expense declined 19% as a result of the previously
mentioned collar retirement and a reduction in average borrowing levels during
the current year. Other income increased $0.7 million primarily as a result of
the previously mentioned second quarter mark-to-market adjustment recorded by
the Company related to its remaining interest rate collar and the first
quarter sale of the Company's former Newport, KY pipe coating machinery and
equipment which had been classified as "held for resale."
Cash flow from operations was negative for the first six months of 2004 as
the Company's working capital has increased with the increased sales volume.
The cash requirements were funded primarily from existing cash and revolving
credit facility borrowings. Capital expenditures for the six months ended
June 30, 2004 were $1.5 million as compared to $1.3 million in the same period
of 2003.
President and CEO, Stan Hasselbusch commented, "We are pleased with the
second quarter performance of our Rail and Piling distribution units, as well
as our Concrete Tie businesses; however, continued weakness in our Fabricated
Products, Coated Pipe and Concrete Buildings businesses negatively impacted
profitability in the second quarter."
Hasselbusch continued, "The Building unit's weakness was in large part due
to delayed Federal spending due to wildfire concerns that hampered plant
volumes in the second quarter. Order levels strengthened significantly in
June, however, which we expect will have a positive impact on Building's
results in the third quarter compared to the second quarter. Fabricated
Products, meanwhile continues to be hurt by the lack of a new Federal highway
and transit bill. While we expect the amount of funding under this
legislation will be larger than its predecessor TEA-21, passage will not
result in increased activity in our Rail and Construction businesses until the
second quarter of 2005."
Mr. Hasselbusch concluded by saying, "After a slower than expected first
quarter, our Concrete Tie business performed very well on the strength of
turnout tie sales as well as strong standard tie volumes. We are also pleased
that our supplier of sheet piling completed a successful rolling of PZ-27
during June, which gives us more confidence that our supply will be more
reliable in the coming months."
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 (including the passage of an adequate highway and
transit bill), 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 INCOME
L. B. FOSTER COMPANY AND SUBSIDIARIES
(In Thousands, Except Per Share Amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
(Unaudited) (Unaudited)
NET SALES $76,827 $75,796 $142,279 $135,315
COSTS AND EXPENSES:
Cost of goods sold 67,494 66,600 126,964 119,186
Selling and administrative
expenses 7,054 6,830 13,455 13,397
Interest expense 469 578 932 1,157
Other income (350) (54) (1,044) (374)
74,667 73,954 140,307 133,366
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 2,160 1,842 1,972 1,949
INCOME TAXES 865 719 790 762
INCOME FROM CONTINUING OPERATIONS 1,295 1,123 1,182 1,187
DISCONTINUED OPERATIONS:
LOSS FROM OPERATIONS OF FOSTER
TECHNOLOGIES 0 (60) 0 (440)
INCOME TAX BENEFIT 0 (23) 0 (173)
LOSS ON DISCONTINUED OPERATIONS 0 (37) 0 (267)
NET INCOME $1,295 $1,086 $1,182 $920
BASIC AND DILUTED EARNINGS / (LOSS)
PER SHARE:
FROM CONTINUING OPERATIONS $0.13 $0.12 $0.12 $0.12
FROM DISCONTINUED OPERATIONS 0.00 (0.00) 0.00 (0.03)
BASIC AND DILUTED EARNINGS / (LOSS)
PER SHARE $0.13 $0.11 $0.12 $0.10
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - BASIC 9,945 9,568 9,876 9,546
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - DILUTED 10,254 9,671 10,202 9,633
L. B. Foster Company and Subsidiaries
Consolidated Balance Sheet
($ 000's)
June 30, December 31,
2004 2003
ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash items $2,723 $4,134
Accounts and notes receivable:
Trade 46,043 34,668
Other 345 105
Inventories 37,330 36,894
Current deferred tax assets 1,413 1,413
Other current assets 1,142 877
Property held for resale 0 446
Total Current Assets 88,996 78,537
OTHER ASSETS:
Property, plant & equipment-net 31,930 33,135
Goodwill 350 350
Other intangibles - net 508 585
Investments 14,202 13,707
Deferred tax assets 4,073 4,095
Other non-current assets 418 750
Total Other Assets 51,481 52,622
$140,477 $131,159
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES:
Current maturities on long-term
debt $481 $611
Accounts payable-trade and other 27,783 23,874
Accrued payroll and employee
benefits 3,271 2,909
Current deferred tax liabilities 1,749 1,749
Other accrued liabilities 2,756 2,550
Total Current Liabilities 36,040 31,693
LONG-TERM BORROWINGS 21,000 17,000
OTHER LONG-TERM DEBT 3,623 3,858
DEFERRED TAX LIABILITIES 3,653 3,653
OTHER LONG-TERM LIABILITIES 3,070 4,411
STOCKHOLDERS' EQUITY:
Class A Common stock 102 102
Paid-in Capital 35,030 35,018
Retained Earnings 39,581 38,399
Treasury Stock (985) (2,304)
Accumulated Other Comprehensive
Loss (637) (671)
Total Stockholders' Equity 73,091 70,544
$140,477 $131,159
SOURCE L. B. Foster Company
-0- 07/21/2004
/CONTACT: Stan L. Hasselbusch of L. B. Foster Company, +1-412-928-3417,
or Fax, +1-412-928-7891, or Email, investors@LBFosterCo.com /
(FSTR)
CO: L. B. Foster Company
ST: Pennsylvania
IN: CST TRN
SU: ERN