fstr-20230331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the quarterly period ended March 31, 2023


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the transition period from to

Commission File Number: 000-10436

L.B. Foster Company

(Exact name of registrant as specified in its charter)


Pennsylvania						25-1324733
(State of Incorporation)						(I. R. S. Employer Identification No.)


415 Holiday Drive, Suite 100, Pittsburgh, Pennsylvania						15220
(Address of principal executive offices)						(Zip Code)

(412) 928-3400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01

FSTR

NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐

Accelerated filer ☒

Non-accelerated filer ☐

Smaller reporting company ☒

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 2, 2023, there were 11,085,149 shares of the registrant’s common stock, par value $0.01 per share, outstanding.

L.B. FOSTER COMPANY AND SUBSIDIARIES

INDEX


			Page
PART I. Financial Information

Item 1. Financial Statements:

Condensed Consolidated Balance Sheets			3

Condensed Consolidated Statements of Operations			4

Condensed Consolidated Statements of Comprehensive Loss			5

Condensed Consolidated Statements of Cash Flows			6

Condensed Consolidated Statements of Stockholders’ Equity			7

Notes to Condensed Consolidated Financial Statements			8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			17

Item 3. Quantitative and Qualitative Disclosures about Market Risk			23

Item 4. Controls and Procedures			23

PART II. Other Information			23

Item 1. Legal Proceedings			24

Item 1A. Risk Factors			24

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			24

Item 3. Defaults Upon Senior Securities			24

Item 4. Mine Safety Disclosures			24

Item 5. Other Information			24

Item 6. Exhibits			25

Signature			26

Table of Contents

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

L.B. FOSTER COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)


	March 31, 2023		December 31, 2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	2,639	$	2,882
Accounts receivable - net (Note 5)	54,904		82,455
Contract assets - net (Note 3)	31,207		33,613
Inventories - net (Note 6)	84,594		75,721


Other current assets	11,844		11,061

Total current assets	185,188		205,732
Property, plant, and equipment - net	78,960		85,344
Operating lease right-of-use assets - net	16,513		17,291
Other assets:
Goodwill (Note 4)	30,863		30,733
Other intangibles - net (Note 4)	22,549		23,831

Deferred tax assets (Note 9)	—		24
Other assets	2,305		2,355

TOTAL ASSETS	$	336,378	$	365,310
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	48,553	$	48,782
Deferred revenue	14,556		19,452
Accrued payroll and employee benefits	4,176		10,558

Current portion of accrued settlement (Note 13)	8,000		8,000
Current maturities of long-term debt (Note 7)	117		127
Other accrued liabilities	13,100		16,192

Total current liabilities	88,502		103,111
Long-term debt (Note 7)	79,979		91,752
Deferred tax liabilities (Note 9)	1,753		3,109
Long-term portion of accrued settlement (Note 13)	8,000		8,000
Long-term operating lease liabilities	13,416		14,163
Other long-term liabilities	7,714		7,577

Stockholders’ equity:
Common stock, par value $0.01, authorized 20,000,000 shares; shares issued at March 31, 2023 and December 31, 2022, 11,115,779; shares outstanding at March 31, 2023 and December 31, 2022, 10,809,711 and 10,776,827, respectively	111		111
Paid-in capital	40,951		41,303
Retained earnings	121,017		123,169
Treasury stock - at cost, 306,068 and 338,952 common stock shares at March 31, 2023 and December 31, 2022, respectively	(5,174)		(6,240)
Accumulated other comprehensive loss	(20,296)		(21,165)
Total L.B. Foster Company stockholders’ equity	136,609		137,178
Noncontrolling interest	405		420
Total stockholders’ equity	137,014		137,598
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	336,378	$	365,310

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

L.B. FOSTER COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)


	Three Months Ended March 31,
		2023		2022


Sales of goods		$	98,538	$	84,421
Sales of services		16,950		14,373
Total net sales		115,488		98,794
Cost of goods sold		78,065		69,845
Cost of services sold		14,132		12,502
Total cost of sales		92,197		82,347
Gross profit		23,291		16,447
Selling and administrative expenses		21,423		17,298
Amortization expense		1,365		1,436
Operating profit (loss)		503		(2,287)

Interest expense - net		1,388		370


Other expense (income) - net		1,827		(563)

Loss before income taxes		(2,712)		(2,094)
Income tax benefit		(541)		(508)
Net loss		(2,171)		(1,586)
Net loss attributable to noncontrolling interest		(19)		(20)





Net loss attributable to L.B. Foster Company		$	(2,152)	$	(1,566)



Basic loss per common share		$	(0.20)	$	(0.15)



Diluted loss per common share		$	(0.20)	$	(0.15)

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

L.B. FOSTER COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

(In thousands)


	Three Months Ended March 31,
		2023		2022


Net loss		$	(2,171)	$	(1,586)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment		1,247		(880)
Unrealized (loss) gain on cash flow hedges, net of tax benefit of $0 and $188, respectively		(418)		551
Cash flow hedges reclassified to earnings, net of tax expense of $0 and $66, respectively		—		93
Reclassification of pension liability adjustments to earnings, net of tax expense of $2 and $

SEC Form 10-Q filed by L.B. Foster Company