FSTR - Earnings call transcript Q2 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for standing by. This is the Conference Operator. Welcome to the L.B. Foster's Second Quarter 2018 Results Conference Call.

As a reminder, all participants are in listen-only mode, and that conference is being recorded. will opportunity there ask presentation, the be to an questions. After to I Relations conference would Instructions] turn Manager. now Investor [Operator Balog, like the Judy over to Please go ahead.

Judy Balog

us gentlemen. Bauer, Thank to is call is company's operating you ladies Judy Good XXXX Also Manager the the Foster Foster's Treasurer. and quarter My you. for call James earnings morning, review Mr. joining results. Robert for second conference I'm on Balog, L.B. Hosting L.B. today Company's Thank name CEO. and call Foster. the L.B. of Investor CFO President L.B. Mr. Relations Maloney, the Foster's is and and

In site an market online morning, review Jim addition performance second Web under a the second have will review Investor and quarter access. provide This the for significant developments. press issues financial will to on have Bob release, company's results. Relation's Afterwards, we who the our quarter and presentation quarter second business on tab update company's our those

then We open questions. will session for the

All by are these statements to information, of the only to encouraged or L.B. release to uncertainties today's statements to responses of of undertake other participants except number involve securities results opinions refer any statements, issues differ commentary new we and capital obligation revisions our margins, projections. and the questions costs, light and presentation, laws. the revise Securities These XXXX, affect no Form as factors Exchange cause of that required risks year and Foster's metrics, in date as may and that this actual from risk filed we XX-K business as markets, Commission as a our statements the make your with our and for XX, results. the Annual forward-looking by additional reflect and or statements outlook businesses company's operating to could our items regarding subsequent such forward-looking of materially cash Report information items including expenditures updated contain December flows, may key to During call, ended publicly results today. for These on

and the EBITDA States Principles, provided EBITDA non-GAAP reconciliation to income are the our financial referring they net company's while considered accordance been comparison to our with and investors non-GAAP EBITDA measures, the not filings. that the results. the additional within for information addition present, of included facilitate results presentation of results provides company GAAP, intended operating replace Statements statements. accordance In Accepted of these presentation to has are Generally forecasted to A with commentary the measures Accounting believes X-K meaningful past, in includes of to in non-GAAP United

presentation measure financial accompanying our the Jim. this With turn review that, corresponding it will will over Our to non-GAAP to we discussion, earnings commence I measure. and GAAP reconciles

Jim Maloney

increases were our both These offset X.X%. XX.X% in our million Tubular was of Product Services Construction partially as improvement or segment $XX.X million by the for due to of million in sales Net The $XXX.X Services quarter was were Judy. improvements or increase you, increasing Products and $XXX.X well sales XX.X%. rail products segment rail an increase increasing prior a and Energy our technologies million segment the by Thank compared XX.X% $XX second Rail XX.X% quarter by of within by XXXX sales as businesses. second led year and decrease The to XX.X%. quarter, rail

the of year, projects. prior rail transit from business sales expanding saw XX.X% Our over primarily technologies increases

compared of Services within Tubular our and period prior Our remained segment Energy business strong. the the rail in products sales transit to year prior $X.X American increased North by year XX.X% million units or The improvements was of increase and freight XX.X% over the period. driven activity as each

division decreasing product increase quarter. sales X.X% Precast Fabricated over The XX.X%. sales Construction prior quarter decrease the were a as offset million Bridge in X.X%. by year reduction year This Concrete to to quarter by or year the partially piling year-over-year the prior sales. segment prior $X.X led demand sales due from declined second was by flat Our primarily was reduction compared to

construction XXXX As services quarter a and sales, percent rail of accounted second and for XX.X%, was XX.X%, XX.X%. was tubular energy

gross gross looking our the at Now year profit; was $XX.X a quarter. over quarter prior XX.X% second million, profit improvement

Services business Precast bridge and in pressures business the experienced points. the to reduction offset our Pricing margin which basis declines XX The decrease Second prior was points. the profit Concrete quarter which segment, quarter, gross driven basis The this exception business. which was saw business. the points division was basis Construction the partially with margin, by measurement segment of products basis gross of basis significantly due primarily segment units These XXXX, impacted segment bridge gross the units in by improved our our within within XXX unfavorably reductions margins primarily activity offset margin and by line. our increases by each XXX points points were lesser profit XXX rail, extent partially and year of reduction profit This Products from our decrease which precision non-domestic a at the our of margin mega driven quarter. to Tubular a gross XXX profit a Energy decreased basis profit of fabricated points segment. XXX was rail by gross systems business Tubular by XX.X%, of construction, decreased our XX.X%, during to was piling

services. demand and significantly were contributors, Inspection for Our market Protective both primary our Testing and of the by helped Service which were conditions Coatings improving businesses increasing continued

expenses million to related Moving costs $XX.X primarily in increases administrative second the by to onto to in XX.X% expenses selling our Railroad or quarter matter. and $X.X our as well Pacific personnel due the million litigation our Union increased as expenses; consolidated related

associated lowest The agreement. million. overall credit principally facility rate tax As the income in company's sales, administrative the basis the $XXX,XXX achieving our expense reduced pretax with reduction as the was $XXX,XXX income quarter Interest the a percent outstanding by and well second compared as of selling tier to to for debt quarter. spread of prior were decreased interest XX points expenses our our year expense within $X.X due on

Second expense to quarter income tax primarily foreign in jurisdictions. related income XXXX taxes

XXXX or to before income increase of was quarter or an per last taxes to per depreciation year's diluted share compared amortization second interest $X.XX $X.X earnings $XX million $X.X quarter $X million year. income or second share $X.XX million Second quarter. totaled the diluted net of last XXXX, and million in EBITDA

in the minimum certain credit Our non-cash the not adjustments per incorporate. as covenant XX-month defined trailing quarter second contains on $XX EBITDA calculation credit a is agreement agreement financial that in EBITDA XXXX basis, a to increased a million the of traditional EBITDA which might agreement.

the for XX-month result, $XX.X period than quarter a the approximately the to calculation. million minimum $XX is second As million EBITDA the credit calculation higher pursuant EBITDA XXXX trailing agreement covenant

compared XX, during days XXXX. compared March increased March related quarter in XX and $X.X revenue second in Now, $XX.X capital and as the deferred balance increased volume. net million quarter in of receivable March cash compared second quarter turning in increase accounts Accounts Accounts XXXX. XXXX primarily by $XX.X the payable current first XX, $XXX,XXX by DSO Inventory debt by an receivable approximately to was increased sheet. Working XX, to an to of our days million while XXXX. This by driven decreased increase sales compared the increased XXXX. XX the of to driven million to by to

We accounts continue and to receivable feel inventory good management about our results.

to our We working continue management capital focus will on overall activities.

Our million outstanding or current quarter. total decreased by debt $X.X the X.X% in

the month trailing company's result by facility our levels of the XX second tier the lowest pricing As earnings credit period, points the over the spread to grid reduced agreement was basis during XXXX. on of a interest rate our quarter per XX

cash operating in capital was second was our the $X.X primarily our support trade $XX.X second cash moving our related provided The outstanding compared period $XX.X million and in XXXX to cash million flow flow in million Now million income was $XX quarter XXXX activities working impacted to in by order XXXX refund. from activity tax new reduction backlog. increases XXXX. favorably The quarter to our to activities, of operating

activities to $X our our million the of between range $X of year to prior from quarter, capital XXXX XXXX anticipate second the We year. proceeds the million million. $X.X included expenditures $X.X and million During for expenditures were in investing compared million while capital land sale $X.X

new expenditures capital will focus opportunities and I our Our developing new existing activity continue business to improving will operations that and efficiencies. at orders backlog are next. on commentary targeted programs on and some provide

compared We orders were Our An of for to very last rail in our were $XXX.X second continued the strength increase driven segment. pleased was quarter XX% by with year's second primarily the which new new quarter XXXX, year. orders million.

American North to compared quarter the up. both segment year Second our was and in quarter XXX.X% for as rail European orders the volume prior markets increased

to increased of compared traffic. Tubular We year projects offset backlog the And over were supported prior also markets X.X% in Concrete North prior the In both loads segment or of state as million. freight to as compared year. $XX.X be orders quarter. by Global Bridge of our current current was segment the both at decrease contributed year-over-year. our to in order and million was quarter. the year. the saw to Precast Construction our this year which segment by flat those and remains the in expansion segment Both testing prior see prior Partially focus coatings division on of divisions. XX.X% we segment prior end the flat Construction activity services and improved Increases from the rail closing, we quarter, to within declined car were intermodal within growth Fabricated Rail continue while continue are the the year units the orders Tubular million new protective reduction serve. we increasing Backlog state and orders segment to transit in rail inspection profitability. stood a the the increases the prior $XXX $XXX.X year up have were sales encouraged precision as orders market at XX.X% new growth to second of the systems offsetting in and our down Piling the with products X.X% pleased American the measurement

on also Bob. it management quarter We continue to of With maximizing comments I concludes on now will focus flow. the second my will turn That working capital free to over and our that, XXXX. cash

Robert Bauer

everyone. and Thank hello you, Jim,

particularly report new very quarter second several coupled is with in of improvement our in outlined, orders and highlights positive areas backlog Jim with surrounding As strength profitability.

strong several coming XX% increases. million business the been rail drove than lines The have generally more and markets wins significant increase to half of several increased the see remaining increase continued $XX with digit new served from double areas order for which of some increase demand. having Our had

impact noticeable solid a quarter. a very Europe. in new order This from and rate off rail a capped was projects with transit America XX% it of half So bookings North first growth and

a projects. automation As a of systems, fastening substantial related and rail, for rail backlog has the portion transit result, new increase been to in services

We seeing capacity. transit amount spending for in largely rail networks substantial directed a increased toward and of capital expansion are programs

for receive Rapid ship as for Bay that Transit networks which is continue of automation, work form systems, We transit levels a in months. will Crossrail XX the for Area backlog of information interface. the on-track to very a of Much and ridership see large booked American We integration passenger a North basis system to on California in the second expansion driver have security to macro capacity access quarter substantial for next program. control, It's order Europe promising in services increase. over funding the

Our rail on-track North improving unique to on rail positive American offering minimizing services rail replacement. grow operators, the currently delivering market pioneered, indicators. we friction rail continues has another and that's related reduced where United for and by in management wear tear The freight disruption through States to benefits freight services several

lower with of quarter encouraging. other million described performance systems, which are as is recorded good the rail is XX% big the year-over-year in been And X% which has as orders. increases class by above in as through year similar segment year-to-date Overall project X.X% this project second the to pipe the to to as including backlog freight Orders in segment the category, be capital second backlog first this comparison. about Tubular our have are and on products products, the amount precast the the backlog Without a adjusted half growth have in ending a good $XXX market. rail all timing Precast I half We need grew public double rose grew imagined. a as space prior is quarter We mixed in next prior for One pipeline services for of The Piling approximately have report in book several driven segment operators. first year. up while divisions which this the period. large both concrete in that and XXXX. a both above from pretty services, the about rail volume substantial of reported of year. flat impact, orders we the this were year coated That's the prior average in coated areas Public in basis, our construction had new measurement X.X% European spending Concrete due $X.X companies and million of orders a cancellation on very the and line very by for the in other year-to-date. both piling pipe Overall, rail but Energy second in the sometime half quarter orders quarter Orders were quarter quarter construction Bridge accordingly. products could segment high is a digit transit is up and to and

XX% quarter year. improvement. growth Sales since The Turning another flow solid to of to cash was and half for increase in was deliver Bookings XX% debt thought the quarter particularly XXXX. product growth, second net provided line $X this reasonable growth cash of services equally the we further receivables operating highlights, million and and operating by for Tubular of still reflect Energy that the Tubular over applications. we income of Sales In profitability the capital first used highlights operating in were had the EBITDA fund for in services and improved year working prior services the for year protective sales helped Energy driven strong I our coatings rail quarter. strong. reduction sales last and pipe segment backlog in these support

And Energy the and in of had products outstanding as quarter an for the the Europe also other and which segment services projects each by America transit Tubular divisions the services QX. very had strong friction with on-track in in driven and addition quarter digit In XX% well. increase increases and double segment sales other sales in North in management and rail were sales

once again, expenses efforts for So point can controlling looking to profitability, at we improved highlights among as our the around profitability.

Results pretax on Tubular outpacing were income prior both sales, last lower of in profitable As This and now sales more Energy Services had basis a contributor SG&A The very year. interest we've improvement expenses profit. and percent a on Rail dollars favorable the improve net and QX over margin taken it actions was gross the segment not year-over-year grew helped improve overall over in company The this were sales booker products which headwinds that prior of lower-margin the responsible a margin number year's that profit last cost sold, bit this increase in despite for this lower largely disappointed addition to year. controls the some cost goods were of Construction good the deliver year. a is in our piling improvement. We results were for very the company's were and percent quarter. lower both of year, was costs this profitability year, impact segment earlier great greatest profit XX%, expansion And contributed volume include to to the that to piling than much and is commodity in single performance. quarter. highlights segment did projects

year. in absence in our to the projects more bridge balance large sheet. compared to addition, moment tend to business be gross of in a margin more on that In small lower the leading super competitive, resulted Comment a somewhat for cash project prior has

lowering which was $XX That We're receivables the debt million, improved QX, million helped over actions. operating how to a on $X we the last in has capital the year-to-date to the offset deliver us working The several significant, pleased Our flow $X.X and while first cash debt to six quarters. in QX. in to million. been And of has reduction other further million after really half reduce down increase the we've able leverage company's basis, increase company ratio $XX minimal. first-half through with allowed results total the debt months brining was of operating nearly been total growth

evaluating. spending months We million which to spending new six we do, the and that spending several as have factors. it I'd a projects, low making thought well some of growth the first-half, rate. hottest at representative although was comments. initiatives was $X.X to pleased of a programs second-half, capital largely in we're work energy summary, other solid with is we expand I kept were opportunities of In end And the productivity timing some markets as few by in quarter. while due very begin In not in have to fund a we'll services aimed to

start business of we believe as with to we and that look forward, marketplace, the first serve $XXX XXXX. and energy the we throughout and invest quarter backlog at will the continue segments Looking market third will a the transportation million,

as in opening seasonality the into affect make upstream in Permian American hottest include the to Most season we operators facility service a location outlook growth, services. confidence operators include which forecast above We patterns our expect price second appears continue the remained sales continuing There since the is the markets to Bakken expand should half. which remain many now, we rising a barrel lift winter Basin $XX right to projects significant supports have that we're spending approach centers should has healthy. of will production per optimistic macroeconomic typical adjustments above had for which to weeks. an to We're new from freight forecasts be rail on $XX oil expect Transit for activity translate growing some funding price as operations. favorable. and North as And Basin. Energy many for reports in be remain a environment available markets the system that

place energy We priority of will continue upstream on strength market. to with continuing the a these

activity much systems seeing proposal measurement more in are We of pipelines.

anticipate or year. additional that, are in anyone it expect the balance free We year-end. need for I'm questions stay the hearing in in my debt backlog generating our so the the key to take finish increase I'll And the about elevated and return comments continue that cash basins. the additional regularly we we to about can coming ability back capacity the might operator to through this have. by With And pipeline flow any of we reduction backdrop, optimistic quarter. Under

Operator

the have like turn the currently We no any Judy conference questioners in Balog for would remarks. I queue. over to back closing to

Judy Balog

Thank you, Okay. Oreo, thanks for and joining everybody today. us

site quarter Web morning's second look and earnings were Our you call. We to quarter. next on talking our before released posted this again forward

Operator

This concludes call. conference today's

disconnect lines. a your You have and for day. may pleasant participating, Thank you

L.B. Foster (FSTR) 31 Jul 182018 Q2 Earnings call transcript