Exhibit 99.1
PRESS RELEASE
L. B. Foster Company
415 Holiday Drive, Pittsburgh, PA 15220
Contact: Stan L. Hasselbusch
Phone: (412) 928-3417
FAX: (412) 928-7891
Email: investors@LBFosterCo.com
FOR IMMEDIATE RELEASE
L. B. FOSTER COMPANY
REPORTS THIRD QUARTER EARNINGS UP 75%
PITTSBURGH, PA, October 26, 2005 - L.B. Foster Company (NASDAQ: FSTR), a
manufacturer, fabricator, and distributor of rail, construction, and tubular
products, today reported net income of $2.3 million ($0.22 per diluted share) in
the third quarter of 2005 versus net income of $1.3 million ($0.13 per diluted
share) in the third quarter of 2004.
Net sales for the third quarter of 2005 were $97.5 million compared to $85.9
million in 2004, an increase of 14%, primarily due to increased sales of Piling.
Gross margins increased one percentage point to 11.9% as a result of reduced
LIFO expense compared to the same period a year ago. Selling and administrative
expenses increased $0.9 million or 13% over the same prior year period due to
employee compensation and benefits. Third quarter interest expense increased
$0.3 million from the prior year due to increased interest rates and increased
borrowings. The increase in borrowings was due primarily to working capital
requirements related to increased volumes as well as the Company stocking more
sheet piling inventory as it becomes available to accommodate higher margin
stock sales. Higher than typical capital investments also contributed to our
increased borrowing. Other income increased $0.3 million due to rental income
and increased income from a mark-to-market adjustment recorded by the Company
related to its interest rate collar. The third quarter income tax rate was 31.5%
compared to 36.1% in last year's quarter. The prior year rate reflects an
increase in the valuation allowance provided against certain deferred assets.
For the nine months ended September 30, 2005, the Company reported net income of
$4.6 million ($0.44 per diluted share) versus net income of $2.5 million ($0.25
per diluted share) for the same period a year ago.
Net sales for the nine months ended September 30, 2005 were $270.7 million
compared to $228.1 million in 2004, an increase of 19% while gross margins
improved slightly to 11.2%. Selling and administrative expenses rose $2.6
million or 13% for the same reasons previously mentioned. Interest expense rose
$0.4 million as a result of increased borrowings and increased interest rates.
Cash flow from operations was break-even for the third quarter and a negative
$14.2 million for the first nine months of 2005 as the Company's working capital
has increased, as previously mentioned. The cash requirements were funded
primarily from revolving credit facility borrowings and interim fixed rate lease
financing, as well as the proceeds of $2.9 million from the sale of an unused
facility in Doraville, GA. Capital expenditures for the nine months ended
September 30, 2005 were $12.7 million due to the construction of a new concrete
tie manufacturing facility and upgrade of another, to meet the needs of a
long-term contract with the Union Pacific Railroad for the supply of prestressed
concrete railroad ties.
"We had strong performances in both our Tubular and Construction reporting
segments in the third quarter. Piling and Coated Pipe, in particular, had
exceptional quarters with sales increases of 57% and 168%, respectively,"
remarked Stan Hasselbusch, President and CEO.
"As anticipated, profitability was hampered in the third quarter due to the lack
of production at our Grand Island concrete tie facility. This plant was closed
in July as we began installing new tie-manufacturing equipment. This equipment
is currently being commissioned and will be in full production in December, on
schedule. Our new Tucson tie manufacturing facility, however, is behind schedule
due to permitting issues. We anticipate start up of this facility in the second
quarter of 2006."
Mr. Hasselbusch concluded by saying, "Overall, business activity remains strong
and is reflected in new order bookings. Bookings for the quarter were $100.2
million, 38% ahead of the same period last year."
L.B. Foster Company will conduct a conference call and webcast to discuss its
third quarter operating results on Wednesday, October 26, 2005 at 11:00am EDT.
The call will be hosted by Mr. Stan Hasselbusch, President and Chief Executive
Officer and Mr. David Russo, Senior Vice President and Chief Financial 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, adequate funding for infrastructure projects, the
potential value of the Dakota Minnesota & Eastern Railroad, delays or problems
encountered during construction or implementation at our concrete tie
facilities, and the 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. 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 INCOME
L. B. FOSTER COMPANY AND SUBSIDIARIES
(In Thousands, Except Per Share Amounts)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
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2005 2004 2005 2004
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(Unaudited) (Unaudited)
NET SALES $97,533 $85,858 $270,655 $228,137
COSTS AND EXPENSES:
Cost of goods sold 85,911 76,534 240,273 203,498
Selling and administrative
expenses 7,896 6,993 23,036 20,448
Interest expense 778 452 1,775 1,384
Other income (478) (222) (1,205) (1,266)
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94,107 83,757 263,879 224,064
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INCOME BEFORE INCOME TAXES 3,426 2,101 6,776 4,073
INCOME TAXES 1,078 759 2,202 1,549
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NET INCOME $2,348 $1,342 $4,574 $2,524
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BASIC EARNINGS PER COMMON SHARE $0.23 $0.13 $0.45 $0.25
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DILUTED EARNINGS PER COMMON SHARE $0.22 $0.13 $0.44 $0.25
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AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - BASIC 10,150 10,018 10,101 9,924
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AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - DILUTED 10,534 10,306 10,453 10,237
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L. B. Foster Company and Subsidiaries
Consolidated Balance Sheet
($ 000's)
September 30, December 31,
2005 2004
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ASSETS (Unaudited)
CURRENT ASSETS:
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Cash and cash items $3,405 $280
Accounts and notes receivable:
Trade 60,978 39,759
Other 1,408 170
Inventories 66,273 42,014
Current deferred tax assets 1,289 1,289
Other current assets 837 786
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Total Current Assets 134,190 84,298
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OTHER ASSETS:
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Property, plant & equipment - net 40,030 30,378
Goodwill 350 350
Other intangibles - net 315 430
Investments 15,439 14,697
Deferred tax assets 3,877 3,877
Other non-current assets 198 65
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Total Other Assets 60,209 49,797
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$194,399 $134,095
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
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Current maturities on long-term debt $777 $477
Short-term borrowings 10,542 112
Accounts payable-trade and other 48,659 27,736
Accrued payroll and employee benefits 4,956 3,308
Current deferred tax liabilities 3,942 3,942
Other accrued liabilities 5,489 1,892
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Total Current Liabilities 74,365 37,467
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LONG-TERM BORROWINGS 32,062 14,000
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OTHER LONG-TERM DEBT 3,804 3,395
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DEFERRED TAX LIABILITIES 2,898 2,898
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OTHER LONG-TERM LIABILITIES 2,068 2,592
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STOCKHOLDERS' EQUITY:
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Class A Common stock 102 102
Paid-in Capital 35,510 35,131
Retained Earnings 44,453 39,879
Treasury Stock (148) (654)
Accumulated Other Comprehensive Loss (715) (715)
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Total Stockholders' Equity 79,202 73,743
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$194,399 $134,095
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