FSTR - Earnings call transcript Q1 2019

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Operator

Greetings. Welcome to the L.B. Foster Company First Quarter 2019 Results Conference Call. [Operator Instructions]. Please note this conference is being recorded. the Manager. to turn Balog, host, now Relations Investor will conference your over Judy I you. Thank

may You begin.

Judith Balog

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

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

the will session for open questions. We then

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

In addition reconciliation non-GAAP tax, been loss earnings the States United XK net or generally EBITDA A filing. to statements. income our company's in interest, provided with non-GAAP depreciation results or included within to accepted and EBITDA commentary to of principles, are accounting amortization, includes referring before of accordance Statements intended to the the to meaningful presentation EBITDA this they additional results. in past, not our comparison that with of investors provides presentation And of and believes financial measures. the considered non-GAAP forecasted present the GAAP, measure are facilitate while accordance company operating results the for information replace has

Our measure. company's With to presentation and commence Jim. I'll our turn measures review to GAAP these corresponding reconciles the financial discussion, we'll over non-GAAP that, it earnings

James Maloney

today. joining you, everyone, Thank us Thank you, for Judy.

with sales division Technologies by XX.X%; The Rail of by to for with XX.X%; quarter increase of supported to the by Products, Rail and was the the Bridge, or sales increase net sales from improvements compared Rail was Our segments. an million Construction were or or by XX.X%. year three Starting quarter million XXXX backlog $XX within led strong in increased million the both of segment. Sales million in XX.X%. $XXX year $XXX driven segments units. entering XX.X% improvement increase the prior XX.X%. each million The of due Concrete Piling reporting within first the driven an $XX accumulated by XXXX. and was was The increase with the the business The Products increase with segment Precast $X Fabricated our Products, of each prior increase increase an an quarter, of

rail a Products saw products demand new due mainly projects. in of XX.X%, Rail to transit increase sales business and Our expanding

or XX.X% increase European America increased $X and quarter, remained sales Services remained Technologies The with and was and strong. services million and sales by in Coatings sales XX.X% market Tubular business Systems our Our segment, Protective North the Energy during driven threaded XX.X% Test of transit increasing activity Measurement Inspection and and growth of friction increasing Rail strong units within in management X.X%. each the as

percentage XXXX of Services As Construction a for consolidated first XX.X% sales, XX.X%. and accounted Rail Tubular and was Energy quarter XX.X%, was

XXX There the profit Now in profit performance. profits. segments of looking gross a profit reporting points margin results margin XX.X%, quarter. Energy increase over quarter divisions basis gross contributing of increased $XX of improvement. increased segments' the $X year the million, prior The of to the an contributing Tubular Consolidated the each increase, basis with and to points, XXX prior resulting profit number at from in gross gross encouraging year the of gross were each million Services to with

our Bridge Products and Inspection division. partially both increased Our market XX gross increases services. within Rail to offerings. margin Concrete increased gross contributors, The a a our segment offset These segment extent, lower-margin primary were our Rail the Products This profit was by of decreased by Protective higher-volume margin by from due lesser increase basis divisions reduction Division. were and, basis Coatings our for points contributions mainly conditions Fabricated that XX were to Test Piling our and Construction points. Service helped driven profit demand which Precast

our expenses. to Moving on

or consolidated to expenses. by $X Our personnel-related million our mainly increases X.X% expenses to first administrative in million and increased in quarter, selling due $XX the

to to percentage quarter. compared year of a decline a points this of sales, basis As XXX the prior led

decreased prior year. year. We see debts sales $XXX,XXX Interest cost the compared due to the to as to our continue are pleased reduction the containment outstanding our efforts in increase overall expense over prior

for have was tax pleased which a we I later entered credit into discuss expense further first amended to tax income The an the agreement, quarter announce rate detail or of new week, As were XXXX last $XXX,XXX we will effective company's in XX.X%. on.

valuation deferred our offset was tax a of tax rate we realized previously effective U.S. assets Our portion by XX% as reduced by a allowance.

compared in the million or share, of first million diluted was EBITDA First year. per a loss $X last quarter, million net $XX an diluted year. $X.XX to of last per of $X compared increase $X or share totaled loss a $X.XX million quarter to XXXX income

inventory. sales Accounts receivable quarter Turning cash to million and XX, -- compared to increased XXXX. This December $XX compared primarily billed to of by capital when increased XXXX in accounts XX, timing our in million of XX% balance by of was debt and increases as approximately current the $XX approximately sheet first due driven March. the December net to working was billings, receivable

DSO Our XX flat remained days. at

by growth. about from $XX this provide further quarter our and during details payable revenue as outstanding we emphasizing XX, good further increased million later collections So backlog. receivables all XXXX Inventory of on increase to compared December as $XX for first deferred compared December the increased efforts, million increased Accounts I sales the is XX, prepare XXXX, to Bob feel driven our by will XXXX. matter.

Our we total trade outstanding backlog million increased well of I XX.X% capital quarter just million debt spoke about in end needs as Cash $XXX current at debt utilized the quarter. or to during by the the fund support current had by working March. the strong $XX was provided to as

provide recently term loan for As an $XX April maximum facility capacity a $XXX to up an million. credit announced of borrowing I earlier, amendment borrowing to XXXX, in we additional to maturing X a with years, million mentioned term of our and

terms interest the grid a with pleased are agreement. our than rate the former of amendment, lower including We

we of As with all March XX, our compliant remain XXXX, covenants.

our activities. to moving cash Now flow

the $XX discussed XXXX. Our in of The to prepare as cash need to I cash $X used activities was earlier. $XX in trade to provided we XXXX operating in backlog, was increased sales million operating due strong quarter flow in working for of million increased first the cash million to related support compared primarily as capital decrease

to And our integration current-year on $X of plan will and our developing within commentary million, targeted XXXX, quarter provide capital orders continue to and anticipate $X XXXX investing first Services activity and that quarter. a We included increase mainly backlog new to of some year over opportunities improving million. range expansion the operational on and million programs between capital automation expenditures segment. we'll Tubular The expenditures focus I the are efficiencies. next. $XX activities programs Energy business During million new prior at expenditures and $X relate

orders quarter last an million, which compared driven Our primarily year's by was XXXX were $XXX to first our increase Rail segments. of X.X% quarter, new first and Tubular

XX, We ended Test Both our the compared trailing by new quarter. Protective the Tubular new were year in strength Systems order and prior Inspection increased prior Measurement million, XX.X% was March a XX offset orders. the increase activity, divisions over to very Coating were Services over which XXXX, segment in period. a months the saw and reduction orders with XX.X% XX-month For $XXX prior trailing continued pleased the year. increased orders

increases Tubular the segment prior the expansion North segment management Backlog profitability. the as we growth has to Global $XXX of Rail compared Rail over projects segment year X% $XX the compared American declined to segment Increases we in million order quarter, prior segment within saw year decreased Precast quarter. on Construction In and increase growth transit for were as Piling $XXX the markets in within XX.X% our contributed of those first First have demand prior quarter from stood the supported Partially the million orders the also offsetting in XX.X% prior and backlog closing, the see X.X% Fabricated to prior products. Bridge the of Concrete X.X% and focus in activity. to supported serve. our orders the end to orders at while sales XX.X% the quarter. increased new the a or Construction decrease increasing friction XX.X% remains year. division year, year continue in the decrease up million. segment at

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

Robert Bauer

background finished on have And growth. comment going on any specific quarter was Thank stronger start in begin volume on helping Then been today the on operational I'll the than with performance the year-over-year that comments and to market everyone. more for our fuel was you, to year. our quarter expectations Jim. actions The great improvement provide a on hello, first profit and that record. what QX above I'm

gross our we operating than on finished backlog. better was expectations margin which to close sales, given starting million performance expenses of and projected Our $XXX

operational sales of we the from contribution volume, number in benefitting to areas as from saw programs well. addition a efficiency In a

segment to all company. three execution segments drive profit for operational particularly was excellent. was total improvement Tubular And see as help profit segment the improvement year-over-year Our The pipeline increase by margin as capacity measurement We're segment profit territories. and it encouraging increasing and those Energy for the that continues in well in pipelines profit margins reporting driven to for gas coatings the benefitting needed for protective that shale into pipelines. continued as midstream investment demand from market include U.S. growth for strength be production energy for going projects and oil systems significant

Test our excellent, being market. products. by energy pressure services serving exists profit remained the addition, The the profit strong strong. Inspection segment the growth improved for segment XX% despite for projects has was has transit tubulars margins, on In in and Rail Rail in upstream that sales growth suppliers threading still driven very backlog The

in some prices New these the still Bridge steel two But construction was from challenge quarter, costs steady projects shipped improvement at margin time, pressure are smaller Precast in XXX increase same percent it's And XX% gross increase Rail sales sales is the We and segment's significant. for sales this helped as to a much of by low profit is expense from year. to Concrete in SG&A our quarter's on noting year. addition sales divisions are contribution drive Products, expansion. The last in levels in than interest made which big that, a basis volume. to due offset quarter. typically and worth the point which was sales net helped Overall, which income together really was well profit prior consolidated Gross Piling a this at Products, first feel also year. better segment seasonal company prior above growth, performance helped points down, increase suffered price XX% above The from profit, a total XXX-basis driven year. a drive increases prior results. And the dilution Decking the remain strong

backlog at in and operations keep the XXXX into year-end year, this significant really the However, helped productive levels. rise for

rising a cash was uncommon. the sales quarters there we encouraged and expected The the did volume first by, not to use the quarter deal lot ahead. with While of be for to cash use in is volume

to being for pointed minimize cash QX at But capital focused levels growth used greatly keeping by as March, an receivables in working affected are However, our debt. collections reduce of we have managed. $XX.X grew, and well intensely sales recognized Jim cash receivables while been million very and was on in in effort efficient out. The

routine in portions by But are the of of work. and Rail with demand in strong. by time delays are downtime use scheduled sheet fact, project as was Florida ship would, transit project Piling other quarter, the expected is integration coming our the is the of frame. underground to the this I'm complete large conditions timing last the ship cruise balance these running that Services resume growth scheduled partner only in from XX%, of that stayed In in beginning look in well mill services work docking held our increase the Inventory up. Both our cruise projects operations a and DSOs our as our are result Inventory in steel themselves have maintenance. levels to where for for and But behind the contractor for elevated the has encouraged versus expansion QX is to U.K., due are course, new increase was driven the general are as being platforms in planned our forecasted June. Piling from that declined Europe of the of Rail entirely inventory up to partner services at mill to our ship of Services complications. beyond we being continues the Increases resolving in very in almost period year. largely like Despite of cash Europe. undergoing from year

quarter ratio X.X, year-end EBITDA Our describing increase risen trailing spending we in of $X.X as million, has that was expecting above from Capital have a calls. X.X. to on slight the level as said, XX-month and prior debt levels, Jim prior was QX a net been been spending have ratio

backlog I'm performance. So sales going to the to bookings some of and turn

Jim it As may growth to an new indication of million pushed at the million. strength. The quarter, $XXX of measure orders by appear commented But our in continued year-over-year further orders backlog on, $XXX first. strong were And million. $XXX low at of is X.X% up

both orders million XX%; this XX% recently. New Rail the up orders backlog significant The has $XXX better both our market and the other that lines increases trailing the last of than provided and couple a Rail year. and outlook balance with product has conclude prior outlook backlog positive which February all since in Piling year, minds significant above while of higher has be segments, $XXX in the And were Construction on had XX-month on in growth combined are I'll period. of stayed appear XXXX; with to topics our confidence conditions. above investors of market million

in expect other Yet upstream the And WTI good energy services that accompanied market have This approach the the $XX The been increased QX Test pricing renew revisions slowing weak major some provide More higher more prior economy from along likely project XXXX. applications. support, that to capital barrel. forecasts X% is price advantage during a and the spending flow oil whether almost in recently, I for Inspection the serve reflecting QX market had markets of QX, with for was CapEx cautious over of cash per off, possibly gas over our where First down. revised more concerns we tubulars to drilling above affect sales upstream oil to strength, and developers prices. downward in better by take has plans year. this developers and

And in market. region, existing the We're underserved, expanding as service South the programs In center growth our previously service Ford Bakken our been addition, Texas opened. to that we rising. such expand our our center we expanding. just Capabilities service in where center Eagle Permian served new locations has have in in Central volume are

more for that oil quotas import as and quarters, optimistic strength to in demand headwinds in service solid due pipe even affecting foreign we'll rising services the are a on I'm from we centers. to manage our coming tariffs volume have the With the prices, demand that reduced

a Services, our segment sales. QX XX% Inspection And sales growth of XX.X% were came more As and divisions and the market markets. of is increase the from midstream Tubular Tubular divisions and threading focused, largely Energy of our reminder, the Test are that dependent. Of midstream in for upstream Energy XX% segment, sales the serve that

the traffic with American economy was North freight the operators was up, railroads reported the the concerns with same public increases which about commodity some overall decreases. the car X.X%, spending rail down for X X.X% is topic were freight time, intermodal revenues outlook second in That up, was The loads the and made in traffic capital than spending traffic of lower reported was rail Class down industry. X.X%. down the for volume expected of up is QX, and in with X.X%. and U.S., and by spending income operating At up raising some companies

heard not related time to the X correlate that market projects related to capital have operating Keep efficiency. although in does do for barometer that reductions it We time. improving of or are direction rail planned from provide comments necessarily maintenance the our Class in a sales to not spending, mind surrounding

tear occur services, for which Our is priorities products to in reducing are traffic heavy for offsetting by management weakness rail operators any and our savings continue providing friction freight areas. could that promoting and wear

seeing operators grow services globally, the have our sales And first in helped transit programs are quarter. these growing. we been Rail which on-track XX% Technologies greater Our also from services interest in

from notice those there. to So remains I'll our upbeat. wrap comments you'll I'm outlook hope going up

will has. address questions be And in good the open expect happy have a any line We with anyone QX. and we to that, quarter to

Operator

Instructions]. [Operator

B. Van with from Horn first question is Our Riley. Chris

Christopher Van Horn

Congrats the quarter. on

You growth some three outlook of your out impressive there? see continue give all you the to years segments. see XXXX And this wondering, maybe see and what's I'm perspective Do of really on across kind just some topline you you out? us how growth can continuing? playing

Robert Bauer

on by like I Well, look business indicator on market usually our think commenting the like. activity will we as to that take outlook what an for

just markets But out example. I'm much comments exactly we've of where of strong. as I and might in headwinds of year, wrap comments, the we're think be. one give or As be few up like where the for saying orders in of on But there. to going on one well. will things next, the provided Because come growth some -- I to going reasons strong how remain foreign mentioned a XX-month areas our There will this rate to that growth, you lines wrong drive a sales from the they'll got strong. and couple by a along The my sales we are was quarter order there I'd number continued markets strong this. the how are stop quarter speaking, our think in that's look shape. impression they'll But that of pipe, to we largely Exactly how what good out short of quoting trailing my

$XXX really million QX. at great got orders still good Our We've backlog. reflect a

to this turn be every is to going we So good have a out year. reason believe to

Christopher Van Horn

you're to Any the right if I in color of seeing then, expansion that around qualitatively growth, sort try an that? are you taking in? think just share? Are products about your you And

Robert Bauer

Yes.

our winning we're I fair think share. of market than that more there the are pockets where

would automation of business, relate us. in absolutely that growing programs think than I faster some that started over international areas. I'll Rail Transit established I that's Services maybe the that we The our we our there growth the solutions programs Europe in market. these of start are new have to you some -- tell in helping

to it that fueled So has markets we or of picking that been before, growth. of the we we are want kind -- hadn't in some hand that if absolutely in mean, up share, our hand. that fact call goes But entering we're I

to in the our like doing everyone I than there, we're a more anybody Products, as just Rail us. we more of business. couple And as Products. single-digit sustainable well I Services a well midstream on out a years don't number. our this I America, up I competitors else of helping been gaining high we And doing last North Concrete think our because think, a like as ago. kind seems now, believe think of faster in I -- finally, what a on picking area, our Coating put market than we stabilized business that. business, fair tubulars, that's model are on data year in don't where serve markets for there, we're systems Precast are put hard kind that much share good, Protective than don't doing other that we see in which pipelines we maybe sure our maybe than business feels both figure But buildings measurement has get growing it's feel like actual I right the share on-track better others. it's little as Precast

market growth. what, there's, better say five than So have I areas that or would four

Christopher Van Horn

side? Just on impressive there's product of about moving a efficiency -- in the what's -- Any it volume, kind other that of cost there Is is helping? things fixed things? there it leveraging expansion? some Is way color line? further terms expansion to on margins here. driving mix think Are Maybe a very to the

Robert Bauer

good of that's get definitely corporate headwind mix growth a deliver thing. have was in few bit on really in constantly Products. But in that cost-reduction Jim strong to margin lower both a in growth we that programs overhead helped other other programs helped such commenting working fact, of better others actually Well, margins help margin areas We're one just And segment, expenses, And that expenses, Technologies. say that our continuous There's Rail where where XX%, would facility quarter. we're that has to that see of we our mix, been quarter. going this some that, on, just got on of Rail as was some this sales the as customer the costs, we've some able areas on overhead than XX%, Rail of that general But in I SG&A are when products a there are sort thing. margin. better leverage I'd some have us we our say, we order improvement some business. And well than as customers going

execution think this clean really, really was quarter. our I

You last were look behind things operationally. were up year, there we few those us. got We a with wrestling

And this efficient to that to allows we're very at really efficiently. we so with backlog able have, we operate schedule. us what be It

those So sorts of things help us as well.

Christopher Van Horn

update conversations And and becoming Union on with Any them again? then, any there? Pacific customer the a you're about having update

Robert Bauer

us we number that talked things happen, we testing go processes have work Well, agreement and time that an which we other last again, we put a year. to were to that through. make of the to doing to time, There's of at matter. include starting that of the course on some as need we Pacific we with supplier this together through kind approval with about same business phone begin call, And Union resolved

specification. are of two meeting to restoring their number other be assured the be need done underway are that supplier they're sort various of companies. to testing approval that in doing regard our with a things restore progress So the needs still and between stages to the of they things and But the business to products activity

a some that hope you report half order we give started. year very has that of report by get the can of the really as and of very, second coming it early time stages. little this we bit would yet. nothing I is activity to from. activity where There's that about talk certainly significance So more a of Think But to

Christopher Van Horn

the quarter. Congrats again on

Operator

[Operator Instructions].

with is Carney question Camco Brett next Investments. from Our

Brett Carney

if that you're it part bit cross-rail the see little for Europe you business, then services are more in the of know and that London solution in transit that the to America? North providing in if remarks Products on market talk -- I of driving Rail project, the a other parts also that could your you the opportunities mentioned the about in of new wanted ask, in Just prepared you growth some

Robert Bauer

largest one Yes. start maybe cross-rail the Well, the of on is latter projects there. going I'll with the That area. in anywhere that European project

work of simultaneously are kinds are PA multiple-platform systems; doing of regard on things. control integration to security, as those access stations working of audio, with on They're lot with We in where is that things video, signaling all in a as such the solutions busy we're now We're that. course area. We're that the largely London as passengers help focused area the greater program, right which and of well into systems such. really that interfaces

and of that a one of number in think focused going now goes, into the on So point In things we do U.K., U.K. got a market, continue we're for for those that solutions Transit into Europe help people have at time. for the U.K. other can I services. outside least things products not that are there time, are strength although where stepped automation service feel of market. the moving the talking this is in we markets And area. area. markets we At European have on we've U.K. about with. be quarters at it's opportunity the sell just in that we area, of think number But the just more the is We've initiative going to to as We the of focus that been this far other I about the offices in like enough as products booked new term, large that the to parts parallel we of rail near kinds in even projects to are

the fastening space. products and fastening in things Our Transit some doing core that our that systems systems with we're of those of is one

of at is forward, level this to one, crossing in the area in manage are the that really the excited to products, interface with that continue obstacle products crossings. things innovate insulated we're areas. detection and we're started of signaling And going getting our joint We about one just really which systems the

areas, We're line. systems really where those on-track early also We got asked there detection the going about, where working solutions. we've about of being some you management on one, of out then, on fall well. all that's track tested bringing a find in that are you a things. rock But services can some in that's managing are that detection, those stages. debris accurate have friction freight systems And rail with in the of they're sorts a now working services on avalanche to more And where have lot detection a you

of all So for systems we're with electronics mechanical and repair those. dealing the maintenance and of

dealing using large hundreds those. these of management with And consumables to friction mostly track to We deal services those managing us freight we're of refilling miles uptime our with for are the the keep product. rail are days from going now who for of kinds operators

Operator

the end remarks. call Bauer turn to of now Bob session. question-and-answer the reached have And back closing the I We will for

Robert Bauer

thank right, We're we'll us. as for look forward Thank pleased really can out, and the you. you by quarter. catching Thank operator. Appreciate the with things up probably turned tell to you you, with the All everyone, enthusiasm how next in comments. joining questions, you,

Operator

concludes This today's conference.

You at for may lines participation. disconnect you And your this your time. thank

L.B. Foster (FSTR) 10 May 192019 Q1 Earnings call transcript