Exhibit 99.1
L. B. Foster Company Reports First Quarter Results
PITTSBURGH, April 23 /PRNewswire-FirstCall/ --
L. B. Foster Company (Nasdaq: FSTR), a manufacturer, fabricator, and distributor
of rail, construction, and tubular products, today reported improved first
quarter results from continuing operations of $64 thousand ($0.01 per share) in
2003 versus net income from continuing operations of $28 thousand ($0.00 per
share) in the first quarter of 2002.
Including a net loss from discontinued operations (related to the
Company's Foster Technologies subsidiary), the Company reported a net loss of
$0.2 million ($0.02 per share) for the first quarter of 2003. This compares to
the first quarter of 2002 net loss of $4.7 million ($0.50 per share) which
included a loss from discontinued operations of $0.3 million ($0.03 per share)
and a non-cash charge of $4.4 million ($0.46 per 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."
Net sales for the first quarter of 2003 were $59.5 million compared to
$63.2 million in 2002, a decrease of 6% due principally to a decline in
Construction Product sales. Gross margins improved 0.8 percentage points to
11.6%, while selling and administrative expenses increased $0.2 million or 3%
over the same prior year period. The gross profit margin improvement was due
primarily to improved Rail Segment margins, while the selling and administrative
cost increase was due primarily to risk management costs. Corporate borrowings
declined by $8.2 million resulting in a 14% reduction in interest expense when
compared to the prior year first quarter.
During the first quarter, the Company finalized the sale of certain assets
and liabilities of its Foster Technologies subsidiary engaged in the rail
signaling and communication device business. The first quarter 2003 loss from
this business, which has been classified as discontinued operations, was
principally due to operating losses incurred up to the sale date as well as
certain charges taken primarily related to severance and a lease termination.
Future expenses related to this business as it winds down are expected to be
immaterial.
On the continued strength of working capital management, cash flow from
operations was positive and, combined with the sale of the rail signaling
business, was adequate to fund a $2.2 million reduction in debt for the quarter.
Capital expenditures were less than $0.5 million for the first quarter of 2003,
compared to $1.7 million for capital improvements and $2.2 million for the
Greulich acquisition in the same period of 2002.
President and CEO, Stan Hasselbusch commented, "We are pleased that our
first quarter results from continuing operations were positive and showed
improvement over the last several years. Our Rail Segment performed better than
expected and better than last year. Although Construction Segment net sales
decreased in the first quarter of 2003 as compared to the prior year, we are
encouraged by a 45% increase in new piling orders as compared to the prior year
due to the availability of sheet pile. First quarter Piling sales were lower
than last year due to lower volumes and lower prices for H-bearing pile. We
continue to expect an increase in Piling sales and profitability in 2003 as we
enter the higher activity season of the year. Since the first quarter is
traditionally our weakest quarter due to the seasonality of certain of our
operations, we expect to see improved profitability as the year progresses."
Hasselbusch went on to say, "Despite the continued economic challenges we
face in a difficult marketplace, we expect improved operating results in fiscal
2003 over last year, due in large part to several operations initiatives we have
implemented and, as a result, anticipate that the Company will be profitable in
2003. We continue to review and improve processes and efficiency levels in our
manufacturing operations. This is a key objective for the Company in 2003. We
also continue to review asset utilization to determine whether our assets are
performing as needed. This type of review prompted the sale of the rail
signaling business in the first quarter of this year."
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
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
March 31,
2003 2002
(Unaudited)
NET SALES $ 59,519 $ 63,173
COSTS AND EXPENSES:
Cost of goods sold 52,586 56,378
Selling and administrative
expenses 6,567 6,373
Interest expense 579 674
Other (income) expense (320) (280)
59,412 63,145
INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE 107 28
INCOME TAXES 43 0
INCOME FROM CONTINUING
OPERATIONS BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE 64 28
DISCONTINUED OPERATIONS:
LOSS FROM OPERATIONS OF FOSTER
TECHNOLOGIES (380) (317)
INCOME TAX BENEFIT (150) 0
LOSS ON DISCONTINUED OPERATIONS (230) (317)
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE, NET OF TAX 0 (4,390)
NET LOSS ($166) ($4,679)
BASIC & DILUTED (LOSS) EARNINGS
PER SHARE:
FROM CONTINUING OPERATIONS
BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE $ 0.01 $ 0.00
FROM DISCONTINUED
OPERATIONS, NET OF TAX (0.02) (0.03)
CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE, NET OF TAX 0.00 (0.46)
BASIC AND DILUTED LOSS PER SHARE ($0.02) ($0.50)
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING - BASIC 9,524 9,441
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING - DILUTED 9,599 9,661
L. B. Foster Company and Subsidiaries
Consolidated Balance Sheet
($ 000's)
March 31, December 31,
2003 2002
ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash items $ 3,927 $ 3,653
Accounts and notes receivable:
Trade 39,790 39,125
Other 154 238
Inventories 34,677 32,925
Current deferred tax assets 1,494 1,494
Other current assets 1,482 696
Current assets of discontinued
operations 13 138
Total Current Assets 81,537 78,269
OTHER ASSETS:
Property, plant & equipment-net 35,271 36,083
Assets of discontinued operations 1 196
Goodwill 350 350
Other intangibles - net 702 739
Investments 12,965 12,718
Deferred tax assets 4,443 4,454
Other non-current assets 1,068 1,175
Total Other Assets 54,800 55,715
$ 136,337 $ 133,984
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities on long-term debt $ 781 $ 825
Accounts payable-trade and other 28,394 24,094
Accrued payroll and employee benefits 2,587 2,413
Current deferred tax liabilities 1,474 1,474
Other accrued liabilities 2,721 2,695
Liabilities of discontinued operations 156 74
Total Current Liabilities 36,113 31,575
LONG-TERM BORROWINGS 21,000 23,000
OTHER LONG-TERM DEBT 3,829 3,991
DEFERRED TAX LIABILITIES 4,195 4,195
OTHER LONG-TERM LIABILITIES 5,274 5,210
STOCKHOLDERS' EQUITY:
Class A Common stock 102 102
Paid-in Capital 35,143 35,143
Retained Earnings 35,042 35,208
Treasury Stock (3,616) (3,629)
Accumulated Other Comprehensive Income (745) (811)
Total Stockholders' Equity 65,926 66,013
$ 136,337 $ 133,984