Exhibit 99.1
L. B. Foster Company Reports Third Quarter Results
PITTSBURGH, Oct. 26 /PRNewswire-FirstCall/ -- L. B. Foster Company
(Nasdaq: FSTR), a manufacturer, fabricator, and distributor of rail,
construction, and tubular products, today reported net income from continuing
operations of $1.3 million ($0.13 per share) in the third quarter of 2004
versus $1.4 million ($0.14 per share) in the third quarter of 2003. Pre-tax
earnings were $2.1 million compared to $2.3 million in the prior year quarter,
a 6.6% decline. Included in the current quarter results was a $1.0 million
LIFO charge, due primarily to higher steel prices.
Net income for the third quarter of 2004 was $1.3 million ($0.13 per
share) versus net income of $2.9 million ($0.30 per share) for the third
quarter of 2003. Net income for the third quarter of 2003 included
$1.5 million or $0.16 per share from discontinued operations related to the
tax benefits from the dissolution of the Company's Foster Technologies
subsidiary.
Net sales for the third quarter of 2004 were $85.9 million compared to
$75.8 million in 2003, an increase of 13% while gross margins declined by 1.7
percentage points to 10.9%. The increase in net sales was due primarily to a
43% increase in new rail distribution sales and a 31% increase in piling
sales. The decline in gross profit margin percentage was principally due to
the effects of escalating steel prices, which include a $1.0 million noncash
LIFO charge and to the fact that our third quarter sales increases came from
our lower margin distribution businesses. Selling and administrative expenses
declined slightly by $0.1 million or 1% from the same prior year period. Third
quarter interest expense declined 22% from the prior year due principally to
the retirement of a $10.0 million LIBOR based interest rate collar agreement
in April 2004 that had a minimum annual interest rate. Other income declined
by $0.2 million primarily as a result of a decrease in the mark-to-market
adjustment recorded by the Company related to its interest rate collar
agreement in the third quarter of 2004.
For the nine months ended September 30, 2004, the Company reported net
income from continuing operations of $2.5 million ($0.25 per share) versus net
income from continuing operations of $2.6 million ($0.27 per share) for the
same period a year ago.
Net income for the first nine months of 2004 was $2.5 million ($0.25 per
share) versus net income of $3.8 million ($0.40 per share) for the first nine
months of 2003. The 2003 results included $1.3 million of income ($0.13 per
share) from discontinued operations primarily related to the previously
mentioned tax benefits from the dissolution of the Company's Foster
Technologies subsidiary.
Net sales for the nine months ended September 30, 2004 were $228.1 million
compared to $211.1 million in 2003, an increase of 8% while gross margins
declined by 1.4 percentage points to 10.8%. The increase in net sales came
primarily from our new rail and piling distribution businesses. The decline in
gross profit margin percentage was attributable to the effects of escalating
steel prices, which include a $1.1 million noncash LIFO charge and to the fact
that our sales increases came from our lower margin distribution businesses.
Selling and administrative expenses remained stable as compared to the same
prior year period. Interest expense declined 20% as a result of the previously
mentioned collar retirement and a reduction in average borrowing levels during
the current year. Other income increased $0.5 million primarily as a result of
the first quarter sale of the Company's former Newport, KY pipe coating
machinery and equipment which had been classified as "held for resale" and the
mark-to-market adjustment recorded by the Company related to its remaining
interest rate collar.
Cash flow from operations was negative for the first nine 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 nine months
ended September 30, 2004 were $2.1 million as compared to $2.0 million in the
same period of 2003.
President and CEO, Stan Hasselbusch commented, "Although we continue to
capitalize on market improvements in Rail Distribution and Piling, we are
negatively impacted by escalating steel costs in the fixed price contract
areas of Fabricated and Transit Products. Third quarter Rail Distribution and
Piling sales were up 43% and 31%, respectively. However, the increased income
generated from these businesses was essentially offset by declines from our
Fabricated and Transit Products businesses."
Hasselbusch continued, "Additionally, a non-cash LIFO provision reduced
pretax earnings by $990,000 for the third quarter. We expect an additional
LIFO provision will be necessary in the fourth quarter."
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. 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,
2004 2003 2004 2003
(Unaudited) (Unaudited)
NET SALES $85,858 $75,802 $228,137 $211,117
COSTS AND EXPENSES:
Cost of goods sold 76,534 66,261 203,498 185,447
Selling and administrative
expenses 6,993 7,096 20,448 20,493
Interest expense 452 576 1,384 1,733
Other income (222) (381) (1,266) (755)
83,757 73,552 224,064 206,918
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 2,101 2,250 4,073 4,199
INCOME TAXES 759 871 1,549 1,633
INCOME FROM CONTINUING OPERATIONS 1,342 1,379 2,524 2,566
DISCONTINUED OPERATIONS:
LOSS FROM OPERATIONS OF FOSTER
TECHNOLOGIES 0 (70) 0 (510)
INCOME TAX BENEFIT 0 (1,616) 0 (1,789)
INCOME FROM DISCONTINUED OPERATIONS 0 1,546 0 1,279
NET INCOME $1,342 $2,925 $2,524 $3,845
BASIC AND DILUTED EARNINGS PER
SHARE:
FROM CONTINUING OPERATIONS $0.13 $0.14 $0.25 $0.27
FROM DISCONTINUED OPERATIONS 0.00 0.16 0.00 0.13
BASIC AND DILUTED EARNINGS PER SHARE $0.13 $0.30 $0.25 $0.40
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - BASIC 10,018 9,593 9,924 9,562
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - DILUTED 10,306 9,774 10,237 9,682
L. B. Foster Company and Subsidiaries
Consolidated Balance Sheet
($ 000's)
September 30, December 31,
2004 2003
ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash items $183 $4,134
Accounts and notes receivable:
Trade 49,495 34,668
Other 39 105
Inventories 46,034 36,894
Current deferred tax assets 1,413 1,413
Other current assets 916 877
Property held for resale 0 446
Total Current Assets 98,080 78,537
OTHER ASSETS:
Property, plant & equipment-net 31,237 33,135
Goodwill 350 350
Other intangibles - net 470 585
Investments 14,450 13,707
Deferred tax assets 4,107 4,095
Other non-current assets 72 750
Total Other Assets 50,686 52,622
$148,766 $131,159
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES:
Current maturities on long-term
debt $459 $611
Short-term borrowings 775 0
Accounts payable-trade and other 32,160 23,874
Accrued payroll and employee
benefits 3,448 2,909
Current deferred tax liabilities 1,749 1,749
Other accrued liabilities 3,603 2,550
Total Current Liabilities 42,194 31,693
LONG-TERM BORROWINGS 22,000 17,000
OTHER LONG-TERM DEBT 3,505 3,858
DEFERRED TAX LIABILITIES 3,653 3,653
OTHER LONG-TERM LIABILITIES 2,707 4,411
STOCKHOLDERS' EQUITY:
Class A Common stock 102 102
Paid-in Capital 35,100 35,018
Retained Earnings 40,923 38,399
Treasury Stock (724) (2,304)
Accumulated Other Comprehensive
Loss (694) (671)
Total Stockholders' Equity 74,707 70,544
$148,766 $131,159
SOURCE L. B. Foster Company
-0- 10/26/2004
/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