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| Judy Balog | IR |
| Robert Bauer | President & CEO |
| James Maloney | SVP, CFO & Treasurer |
Greetings, and welcome to the L.B. Foster’s First Quarter 2018 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. to conference like host, to now Balog. Judy would turn over the your I
Treasurer. evening, gentlemen. call ladies joining Good Balog operating you. Thank and is name L.B. company’s quarter Judy call L.B. Company’s Foster’s I’m results. the My L.B. CEO. and us Foster’s Thank Foster of the is James today L.B. Foster. the earnings Maloney, Mr. review Investor conference to and the and Manager first is call XXXX CFO President Also Hosting for for you Relations Mr. Bauer, on Robert
In financial on a evening, under This addition on developments. significant Afterwards, the review results. update who to quarter the our market quarter website access. quarter press online Jim release, Bob and will will those we our provide first for an have fourth business company’s have review Investor the performance and tab Relation’s issues first presentation company’s
for open questions. the will We session then
issues results. are new updated XXXX, regarding the filed or Exchange except encouraged with participants or Securities subsequent obligation and risks that L.B. actual uncertainties revise these statements date the responses During of contain of and no our to the publicly a undertake securities in revisions Foster’s we information today’s projections. and year involve to by to cause Annual reflect from for items refer questions including These laws. Form business as could Report we statements only These ended differ by materially costs, information, today. our the factors affect and of flows, additional release forward-looking for December company’s as markets, call, statements, of capital such businesses Commission to number cash may other margins, may presentation, and forward-looking our to as any results metrics, key and outlook make XX, risk operating that statements the required and light commentary All opinions on statements our results to as expenditures of your XX-K items this
to and Accounting includes provided loss EBITDA to while within presentation not they company our of of believes accordance forecasted non-GAAP addition with EBITDA intended the to the the comparison financial the and United to the our EBITDA replace in investors are commentary of filings of additional reconciliation statements. referring provides presentation Generally these net GAAP, past, company's Statements results A measures the measures, with included been present X-K information Accepted results. for has In that facilitate non-GAAP in to operating meaningful are results States considered non-GAAP Principles, accordance
presentation that, earnings we corresponding non-GAAP I accompanying our Jim. will financial turn the discussion, to With measures measure. Our GAAP review to and over commence will these it reconciles
our $XXX.X the in million quarter improvement led within construction services as XXXX segment as by due quarter $X.X by reduction increase million sales increases segment was driven of were by XX% offset $X.X XX.X%. or year The improvements rail you, services the products were for of Net first was partially in rail and These Thank businesses products. tubular increase sales or X.X% XX.X%. the each services well increase European our prior compared and Judy. tubular by sales a energy sales prior million segment of $XXX.X compared improvement product XX% year energy of technologies and in to segment or rail The domestic and rail the period. the our $X.X of units quarter, increasing The substantial business was XX.X% X.X%. within our first million an to million of to
as class X.X% increases technology our increased domestic over from primarily year remained year, activity transit expanding over of rail XX.X% rail I saw period European strong. prior products Our businesses projects, sales the the prior
the construction XX.X%. with or fabricated declined Both by increase divisions prior first our by piling XX.X%. partially sales. These Our drove XX.X% piling prior quarter concrete and sales million XX% bridge were from the product $X.X by reduction in fabricated sales decreasing year-over-year offset reductions year sales year over and a by precast bridge the segment decreasing quarter
XX.X%. quarter a construction services rail As XX.X% percent tubular first was of accounted XXXX for and XX.X%, sales, and energy was
construction, which basis Now XX profit gross quarter an points. basis looking profit of at points XXXX gross basis by decreased year gross experienced by profit, by The from rail the segment Tubular gross Threaded margin increase was Services which profit segment. prior Tubular increases at units Tubular gross and points. XXX profit partially our of reduction our This saw margin was Energy points significantly Energy by our the quarter, XX%, XXX XX consolidated was margin driven within with basis the was and business each Services first of Products. of exception improved a offset margin and
XX%. Systems to technology Precision our Test business. division rail Inspection helped a the decreased points primarily primary within XXX basis offset segment which points conditions, basis profit was gross reduced This by upstream margins Measurement and contributors, XX continued and Rail increases market This both businesses. our of due business. margin midstream lesser improving margins to was by business Construction by a was our lesser also improved. to margins driven profit while Products Coatings extent, rail were gross our by products Our in to businesses Services The extent, fabricated Protective profit our decreased segment in bridge and, primarily gross Piling
on Moving our to expenses.
tax $XXX,XXX pretax first prior the of million the related or as after $XXX,XXX I remained income Pacific by a Railroad increased our to reduction the litigation X.X% company's Union and for regarding $X.X comments consolidated prior matter cost this quarter. first with $XX.X Amortization quarter principally completed year financial the year. in million. $X.X matter. make to expense some my selling The as Bob was compared will Our administrative the in to by expenses, primarily increased expense outstanding Interest loss am review. flat the to quarter due due compared overall first decreased debt to million on to
to income allowance expense income no on the tax primarily its jurisdictions, has was XXXX. during foreign the company related XXXX full tax domestic and Therefore operations against assets. quarter quarter benefit first First tax U.S. recorded valuation deferred a taxes
provide First amortization quarter XXXX, in a before matter. on to EBITDA net Again depreciation this XXXX earnings per detail discussed. year's $X.X first of $X.X million loss the was compared the of increased costs more year. or will quarter, million to litigation as but was or loss $X.XX last last million $X which per includes taxes, first $X.X or share million interest, and million totaled diluted $X.X consistent diluted share $X.XX quarter Bob
basis, credit agreement noncash agreement quarter that which covenant to a in the revised has on calculation the first incorporate. adjustments traditional trailing increased as a might EBITDA minimum per Our XX-month $XX certain financial not XXXX in the EBITDA credit agreement. million contains a defined EBITDA
to a As EBITDA million $X.X calculation. the result, the first million is covenant agreement XX minimum EBITDA the XXXX higher period credit month approximately pursuant quarter trailing than calculation for the $XX
by in XXXX ending slightly an days and $XXX,XXX in capital increased XX and DSO increase compared $X.X first payable XXXX. in Turning million by was on driven we XX XX, the and our deferred supported increased increase net sheet. to to December by inventory, the XXXX. in of of the million XXXX. $X to new is built current of increased fourth as approximately backlog. debt the compared days Inventory backlog ending orders an This quarter $XX.X the due which related the compared and improved to December increased first to quarter Accounts revenue million orders and XX, increased primarily to inventory cash Accounts first quarter balance during levels. Working quarter receivable by
feel We inventory and continue receivable good about to results. management accounts our
We working on will focus activities. continue our management to capital overall
current by total XX.X% million repatriation This primarily $XX.X debt Our our cash to subsidiaries. excess related the of from decreased of outstanding million reduction, quarter. or $XX.X foreign in
pricing XX of a will grid over by company's the trailing interest spread agreement. level basis tier period on effective reduction our rate per will the As points our on reduced XXXX. to XX, be the XX This become month May lowest debt result the earning
activities. our to Now moving cash on flow
million three reduction $X.X $X.X operating to that million were Our million the million incentives was the support in the XXXX XXXX due Of of cash and out $XX.X to $X.X increase provided in first inventory related backlog. $X.X activity XXXX. by million to flow, operating paid in new XXXX and during order first was quarter quarter of activities the cash months to compared in first
compared capital to expenditures First between to million. our anticipate quarter $X $X and the expenditures XXXX million were $XXX,XXX We $X.X prior-year. in capital range million
new and improving orders existing to Our on focus capital targeted our some commentary backlog provide expenditures on I programs next. continue both activity opportunities. will business new at that and will are
three X.X% Our since compared first an new with were were experienced first as new $XXX orders of very quarter in quarter million of to year's pleased most last first XXXX. successful the of orders growth. segments the quarter, We our XXXX quarter increase each
at First increased prior XX.X% businesses. quarter, the compared year primarily rail quarter to increased domestic to orders the our for segment due volumes
offsetting quarter, We state freight orders order Construction the fabricated expansion serve. continue the improved $XX XXX% by orders have an or level of division. prior seeing be of up midstream this and encouraged improved experienced prior backlog $XXX.X and driven partially contributed increase Global highest as $XXX.X improved within segment led intermodal upstream we This state projects coatings to the inspection our protective also current over the current the the activity piling our precast the are we by with and year quarter, increased continue end see within X% also the segment were year the third improved in of year our as to the increase American of pleased orders new rail first Backlog million stood of concrete to both units to test in as to the segment activity from we with market quarter XXXX. the since our compared growth prior million. XX.X% and or has backlog division X.X% division the at company year-over-year. quarter those nearly up and North at as carloads both orders year-over-year traffic transit the new million rail products bridge markets order decreases Tubular well.
increased backlog. segment had with of year in with our and increase backlog focus segments and XX.X% increasing tubular segment, three compared new in the our each a construction in prior profitability. the segment XX.X% increase a sales closing, orders, the increase a In to in X.X% As rail remains
focus I Bob. quarter free turn it now of to to cash XXXX. on continue will over flow. maximizing capital the that our concludes on That my also working will comments management We first and With
other prior EBITDA for in a increased few year prepare in Thank Working measures seasonal low to X.X% key and only expenses, to position a volume is at sales and were we're you, boost Jim. inventory to first sales in quarter volume start. a in the over year was typically whether in generated focused importantly, With in first modest increase good backlog volume. substantially usually QX off very we cash quarter. new legal would adjusting for strong, close EPS on over the was better and quarter solid a more We and orders significantly us as Sales capital the sales forecast with to improved gauge QX. increase have volume points, very on when the putting
very and pay The we segment spend we growth we markets in last regarding I'll the double-digit segment leverage quarter to growth segment. debt gross the profit down to backlog, further and improved continued operating serve the a in the increase, energy operating of significant energy particularly consolidated to first as and begin compared advantage in increase which our increased our first tubular see pleased midstream addition, of I'll prior particularly the solid position had drove in year. were prior drove order the in year, helped performance, deliver light activity time over improvement quarter and tubular the services cash sales XX% energy more our but orders took segment debt. comments backlog start year, with We on In strong foreign
year. increase getting serves applications. in project we're While tubular of and up rail division business increase had drove of support test is with that gross a segment projects substantial in led then piling sales since see result control midstream bookings order have continued inspection from very with pipeline from XXXX services lower much are grid The most across decking QX Europe, the were since that exceeded sales quarter the around the prior a of primarily over cost XX%, and as to declined quarter in a as first construction segment rail first to declined business from quarter profit company, very our commodity unfavorably sales most the improvement from activity applications, We volume The piling projects and as single group impacted in pleased as well greatest upstream of sales. significant the results control expense growth in declining sales piling segment technologies and XXXX. profit entire impact good the service solid discipline QX. excellent far Across better activity a the
October date. million expenses, Pacific anticipating kept were in the trial time an increase as year. We we an flat expenses SG&A Union concrete $X.X in prepare with legal the QX to Excluding increase matter, related for legal we costs last
of year. will and the of result additional pretrial EBITDA A the keep to levels. work This activity discovery, to and projects growth operational great in operations The intended cost. we small significant We was job has the done quarter. done XXXX, to more with which increase performance support first to are QX deal cost a control legal better reorganization second XXXX work expenses focusing to the key requirements, expenses legal back of much operational regarding and completion however, cost the on few organization with motions above managing fast. rail our a without late under the expect prior deadlines part expenses, related took performed which and operating minor expert whom starting all amount other our and the and is quarter preparation These discovery, reduce leaders will operations have implementation our including position. in fact on excluding quarter team leaders, who necessary our overseeing in deal upstream our did and their in and looking court construction Lippard was of the after oversight subject processes with filing, and services in incur Castle, Bill established segment, in than throughout flat; and assembled important we programs We throughout teams leadership on key emphasis great key businesses the oversee energy too looking test to are deal take are John parts responsibility when last driving Greg that of the operating inspection of a is the adding on year, of business last after part Tracy well. of improvement rail tubular expansion This put more year rail the division. services and is system. our the business great of the continues as the focus of a
to me the cash balance Let sheet discussion. turn and
make strive the in is $XX.X as programs in quarter the the position our cash on to we $X.X Generating to need it was and to start mentioned, year. generate to ability cash and significant reduction QX in reduction. cash apply for sheet last Our shipments. debt to the always in million with quarter volume the and to cash every second million excellent repatriated intended low to an of have advantage our This pressure There's take quarter we quarters. and sales first over cash debt balance prepare all foreign significantly five progress working other previously capital of reshaped as way
rates interest beginning $XXX,XXX will at May. improved has said, spending QX. in was Capital modest further be ratio and Jim our leverage as Our lower in
we surfacing bare efficiency quarters a had increase this to in more where opportunities the $XXX,XXX growth spending fund and to minimum Following CapEx in intended to of future last we quarter improvement. as are we've year, fourth the get completed expect and to period
transit the in provided and the reporting the year, realized orders orders all growth, XX.X% that rail at three backlog backlog with first Turning orders now projects the to and increases growth in highlights, the order momentum. lifting over was serving prior XX.X% fact market to new segment start new our the quarter. segments rail greatest new The rail
to in in new activity attempting is are pipelines reach to activity. strength experiencing other due same by positioned increases taking of new the to measurement are the tariff get turning of to this wear continue we production service and business XXXX rising year-over-year. of growth to in see in range are including this pace years not as a market activity States. some the the favorable upstream world, our has existing distribution the from number exists. spending in users investing of demonstrated like result operations. the the prominent helping is market time as midstream North covers backlog oil, and order Across take initiatives and QX is tear margins two productivity projects to we to finding modernization see Pemex business moving Mexico. locations production rail getting energy to price our And orders into traffic and continues depth where whether that backlog in the savings well Friction locations project increase or a with see expected especially being other look oil increasing wells projects midstream from team and an activity of behind clear been continued and support continues significant on in throughout may It's rail ago, demand important the typically Freight management where transit XXXX increased terms for in increases coating the contracts solutions energy as XXXX. substantial becoming The anticipated low Pricing forthcoming to due energy QX was we solutions although levels. increase products drive the are to to Coast. and decline of our better and drive railroads is number with XX% The from increasing of as looking drive pipeline and the increased are to the increase same lower in counts doors still services in orders. needed increasing pricing. the substantial operators activity and in expansion to be in West have cost growth new at growth traffic forward Tubular to North America of our to the in industry. constructed. changes as record The impacted seasonal strength, of cost in it's right indicators our showed helping gains in developers looks Project and rig Coast need A as orders. We're and rail levels protective of forward backlog steel $XX freight with recover for X.X% segment measurement market spending friction America demand and demand U.S. companies the U.S. more to rail East operators are Tubulars and pipe ahead QX around have prior are due energy United to include most increase regions new the opening oil gas in growth place shortfalls services. funded, need to improving, management now diligently all-time support is in the due the growth, the in development to in throughout working infrastructure finally the the in customers struggle Our continue are restore services. in capacity freight increasingly We're to in
orders orders the backlog backlog to very distribution and solid haven't and The and decking growth we small supplied large established were more X% in business, X% bridge oil year. companies decline midsized from an Construction prior than in to benefiting additive Mexico's QX we integrated the very up project are on more offset are We were were systems that while the the see network. pleased in projects. quarter bridge decking in being had new piling in gasoline over in increase getting a injection in backlog and
some investments from making inventory to take advantage opportunistic of piling ship are in that can We stock. projects
end-users are projects steel products Some forward potentially moving due as to quickly rising fear cost tariffs. of
more construction segment. point $XX.X than in end at backlog XX% the March, of is for beginning the million indicator the did strong by $XX the any since backlog year improving segment at standing the million we of we construction Another last year, at or have
it in So summary, bookings all three segments. across a was for quarter solid
backlog We expected and sequentially anticipate this points. piling will rail next year-over-year of start both gross amount QX by distribution We and year, to a and as solid we revenue occurring the a second while significant growth million. XXX quarter over growth are as have of increase sequentially with quarter basis our consolidated margins $XXX much
accordingly. us these and In the are for costs This allows and resell evaluate the we businesses. comment affected, a or known foreign-made supply for distribution gross We of margin that of regarding raging may great applications of of product the each and thought markets chain on project of operations, was our would product changes part our on price steel to of Now and we projects Act in conclude steel particularly the where steel piling products. to spend prices. each XXX before buy make within tariffs rail forecast end distribution new market The have each the significant component making to it time. increases to Section before I of where still price bow I is various This the serve wide and Section a the product. specific quantify quotas Since place. my we comments still steel are businesses, characteristics taking this a relates on enacted, steel be determine creating price exemption often as on several at and I see it quick our major Markets XXX related tracked deal impact difficult input is negotiations and project. uncertainty we've forecasts light is market
both increases experience input we QX, in steel in did businesses. costs During
mill American supply year since We pipe do could made foreign-made the use line for today our drilling are activity can this with strong sources unfavorable material be pipe benefiting for from as in time. I it's where time on midstream of very to on are with and that as pipe. through being distribution can manage they can sales of favorable the are an of shift for projects businesses, this foreign variances index on catches mills we demonstrated profit goods by environments typically to revenue pipe. attempt opportunity services significant and attempt In changing, the pipe Korean provide a American-made there pass the the also has pipe selling applications. lift viewed as tubular price decking line past, also possible. all make on, provide of rise. country We from time, bridge bid the and is We prices are to Raw increasing before favorable from at ourselves and Reduction sourced fluctuate. in be product supply more impacted price pipe of a we margin. through escalators and the prices lead the or the a short with supplier partner. to these believe we've same and the period protect rising foreign up lag can't been quotas applications. prices aligned dates We inventory where oil costs. input costs expiration is environments American first to to an but for selling We Order component from such risks
American comments The back to their in the suppliers revenue will serve customers pipe who operator depend turn to the will also there and questions. it impact We our for going as supplier. choose end however. I'm my on
and for on remarks. Bauer everyone's Instructions] to today appreciate hope right. we'll question-and-answer turn see much. be you quarter. the Bob Well, Thank time, this call we we back of [Operator call you the operator. have over gentlemen, would Ladies question-and-answer Thank we'll the next you, All and end I reached to session. the like and At to a very conducting session attention closing
teleconference. This concludes today's
You lines disconnect for may this participation. time. Thank your at you your
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