PRESS RELEASE
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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 STRONG FIRST QUARTER
RESULTING IN 96% INCREASE IN INCOME FROM
CONTINUING OPERATIONS
PITTSBURGH, PA, April 27, 2006 - L.B. Foster Company (NASDAQ: FSTR), a leading
manufacturer, fabricator, and distributor of rail, construction, and tubular
products, today reported that its first quarter earnings per diluted share from
continuing operations nearly doubled compared to the prior year quarter, the
fifth consecutive quarter the Company has recorded an earnings increase over the
prior year.
2006 First Quarter Results
In the first quarter of 2006, L. B. Foster had earnings per diluted share of 36
cents and net income of $3.9 million compared to 6 cents per diluted share and
net income of $0.6 million in the first quarter of 2005. The results of
discontinued operations reflect the sale of our Geotechnical Division in the
first quarter of 2006. Income from discontinued operations of $2.8 million
includes the gain on this sale of $3.0 million, reduced by a $0.2 million loss
from operations during the period we owned the business. Income taxes were
favorably affected by the release of a valuation allowance recorded in 2003
related to a capital loss carryforward. Diluted earnings per share from
continuing operations was 11 cents on earnings of $1.2 million compared to 6
cents on earnings of $0.6 million in 2005.
Net sales increased 24% to $84.2 million compared to $67.6 million in the prior
year quarter.
Gross profit margin was 11.6%, up 80 basis points from the prior year quarter as
a result of increased plant efficiencies and favorable variances in product
purchases.
"Piling and Rail Products continued to deliver strong sales. Our concrete tie
business results improved substantially due to strong activity at our Spokane
facility. Although our Fabricated Products Division continued to lose money, it
performed substantially better than the prior year quarter," remarked Stan
Hasselbusch, President and Chief Executive Officer. "We are pleased to report
that tie production in our recently refurbished Grand Island facility continued
to increase to levels where its first quarter production increased 10% over last
year. We are also pleased to announce that our Tucson facility construction is
well underway and on schedule," added Mr. Hasselbusch.
Mr. Hasselbusch concluded, "Overall business activity remains strong and is
reflected in our first quarter order bookings. Bookings for the first quarter
were $121 million, 14% higher than the same period last year. Backlog at March
31, 2006 was $141 million, which was 25% higher than last year."
Selling and administrative expenses increased $1.2 million or 18% over the same
prior year period due primarily to employee related costs and benefit expenses.
Fourth quarter interest expense increased $0.2 million over the prior year due
to increased interest rates and increased borrowings. The increase in borrowings
was due primarily to an increase in working capital requirements as well as
higher than typical capital investments made during the past three quarters. The
Company's income tax rate was 34.4% in the first quarter compared to 30.4% in
the prior year quarter. The lower tax rate in 2005 is the result of releasing a
portion of the valuation allowance provided for state deferred assets.
Cash flow from operations was a negative $5.9 million for the first quarter, due
to an expected ramp up in activity in anticipation of a seasonally strong
spring/summer period. Capital expenditures for the quarter were $5.2 million as
we are working to complete the Tucson concrete tie facility later this summer.
L. B. Foster Company will conduct a conference call and webcast to discuss its
first quarter operating results on Thursday, April 27, 2006 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, 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 and rail
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 OPERATIONS
L. B. FOSTER COMPANY AND SUBSIDIARIES
(In Thousands, Except Per Share Amounts)
Three Months Ended
March 31,
--------------------------
2006 2005
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(Unaudited)
NET SALES $84,155 $67,633
COSTS AND EXPENSES:
Cost of goods sold 74,351 60,296
Selling and administrative
expenses 7,731 6,530
Interest expense 665 424
Other income (431) (500)
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82,316 66,750
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INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 1,839 883
INCOME TAXES 633 268
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INCOME FROM CONTINUING OPERATIONS, NET OF TAX 1,206 615
DISCONTINUED OPERATIONS:
INCOME FROM DISCONTINUED OPERATIONS 2,819 24
INCOME TAXES 141 11
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INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX 2,678 13
NET INCOME $3,884 $628
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BASIC EARNINGS PER COMMON SHARE:
FROM CONTINUING OPERATIONS $0.12 $0.06
FROM DISCONTINUED OPERATIONS 0.26 0.00
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BASIC EARNINGS PER COMMON SHARE $0.38 $0.06
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DILUTED EARNINGS PER COMMON SHARE:
FROM CONTINUING OPERATIONS $0.11 $0.06
FROM DISCONTINUED OPERATIONS 0.25 0.00
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DILUTED EARNINGS PER COMMON SHARE $0.36 $0.06
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AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - BASIC 10,195 10,066
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AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - DILUTED 10,654 10,395
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L. B. Foster Company and Subsidiaries
Consolidated Balance Sheet
($ 000's)
March 31, December 31,
2006 2005
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ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash items $1,404 $1,596
Accounts and notes receivable:
Trade 52,712 44,087
Other 151 1,354
Inventories 71,290 67,044
Current deferred tax assets 1,779 1,779
Other current assets 1,821 703
Current assets of discontinued operations 1,258 3,867
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Total Current Assets 130,415 120,430
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OTHER ASSETS:
Property, plant & equipment-net 42,632 38,761
Goodwill 350 350
Other intangibles - net 124 144
Investments 15,934 15,687
Deferred tax assets 1,161 1,183
Other non-current assets 281 177
Assets of discontinued operations 0 1,554
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Total Other Assets 60,482 57,856
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$190,897 $178,286
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities on long-term debt $1,780 $1,759
Short-term borrowings 7,013 5,881
Accounts payable-trade and other 46,256 41,087
Accrued payroll and employee benefits 4,007 5,875
Current deferred tax liabilities 4,845 4,845
Other accrued liabilities 4,102 3,128
Current liabilities of discontinued
operations 675 1,760
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Total Current Liabilities 68,678 64,335
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LONG-TERM BORROWINGS 24,509 20,848
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OTHER LONG-TERM DEBT 8,663 8,428
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DEFERRED TAX LIABILITIES 1,615 1,615
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OTHER LONG-TERM LIABILITIES 3,283 3,071
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STOCKHOLDERS' EQUITY:
Class A Common stock 102 102
Paid-in Capital 35,755 35,598
Retained Earnings 49,197 45,313
Treasury Stock (82) (126)
Accumulated Other Comprehensive Loss (823) (898)
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Total Stockholders' Equity 84,149 79,989
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$190,897 $178,286
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