Aug 10, 2026, 7:33 AM ETIndustrials

L.B. Foster — Second Quarter 2026 Earnings Summary

FSTRFOSTER L B CO

Financial Performance

Net sales for the second quarter of 2026 were $138.6 million, a 3.5% decrease from $143.6 million in the prior year period.
Gross profit margin expanded 80 basis points to 22.3% in the second quarter, compared to 21.5% in the prior year; year-to-date gross margin expanded 60 basis points to 21.8%.
Net income attributable to L.B. Foster Company increased 7.9% to $3.1 million in the second quarter and increased $3.8 million to $4.6 million for the first six months.
Adjusted EBITDA decreased 4.7% to $11.7 million in the second quarter but increased 19.6% to $16.8 million for the first six months.
Operating cash flow for the quarter was $17.9 million, the highest second-quarter operating cash flow since 2017, compared to $10.4 million in the prior year.
Free cash flow for the second quarter was $14.3 million, an 85.0% increase from $7.7 million in the prior year.
Total debt decreased 41.2% to $48.0 million from $81.6 million in the prior year quarter; debt was reduced by $11.7 million during the quarter.
Gross Leverage Ratio improved to 1.0x from 2.2x in the prior year quarter.
Selling and administrative expenses increased 7.7% to $24.1 million in the second quarter, driven by higher employment and variable incentive costs.

The Company reaffirmed its full-year 2026 financial guidance.
Full-year 2026 net sales guidance remains between $540.0 million and $580.0 million.
Full-year 2026 Adjusted EBITDA guidance remains between $41.0 million and $46.0 million.
Full-year 2026 Free Cash Flow guidance remains between $15.0 million and $25.0 million.
Full-year 2026 capital spending is expected to be approximately 2.7% of sales.
Management expects midpoints for sales and Adjusted EBITDA to represent year-over-year growth of 3.7% and 11.3%, respectively.
Guidance assumes the current geopolitical landscape will not significantly impact the domestic economy.

Rail, Technologies, and Services (Rail): Net sales decreased 5.2% to $72.0 million; gross profit margin improved 70 basis points to 20.6%.
- Rail Products net sales declined 27.3% due to timing of large orders.
- Global Friction Management sales increased 18.1% driven by strong domestic demand.
- Technology Services and Solutions (TS&S) sales increased 66.9% driven by short-term project work in the UK.
- Backlog increased 8.2% to $141.4 million.
Infrastructure Solutions: Net sales decreased 1.5% to $66.5 million; gross profit margin expanded 80 basis points to 24.1%.
- Steel Products sales declined 9.3% due to lower volumes.
- Precast Concrete Products sales increased 2.1%.
- Backlog decreased 24.8% to $104.7 million, driven by an order cancellation in Steel Products and a decline in Precast.
The Company announced the exit of certain product lines within its Tew Engineering business (the "Tew Exit"), incurring approximately $2.6 million of exit-related costs.
The UK business was refocused to prioritize shorter-term projects with higher profitability and lower working capital requirements.

Backlog increased 17.4% during the quarter to $246.1 million, driven by robust bidding activity, particularly within the Rail segment.
New orders, net increased 0.2% to $176.1 million in the second quarter.
The trailing twelve-month book-to-bill ratio was 0.96:1.00.
Rail segment trailing twelve-month book-to-bill ratio was 1.03:1.00.
Infrastructure segment trailing twelve-month book-to-bill ratio was 0.85:1.00.
Management noted encouraging levels of project opportunities in the pipeline.

Adjusted EBITDA for the second quarter was negatively impacted by higher personnel costs and variable incentive-based compensation costs.
Exit costs associated with the Tew Exit ($2.6 million) impacted gross profit and operating income.
Rail Products sales were impacted by the timing of large orders.
Infrastructure backlog was impacted by a large order cancellation in the prior year and lower backlog in Precast Concrete Products.
Forward-looking statements note risks including adverse economic conditions, inflation, rising labor costs, project delays, budget shortfalls, government funding disruptions, interest rate fluctuations, and geopolitical conflicts.

John Kasel, President and CEO, described the quarter as "solid" with record operating cash flow.
Management expressed confidence in the outlook for growth in the second half of the year due to the $36.5 million sequential increase in backlog.
Kasel noted that despite the second-quarter decline in Adjusted EBITDA, year-to-date performance showed significant improvement.
Management remains focused on executing its strategy and is confident in its ability to manage the business in a volatile environment.

The Company generated quarterly operating cash flow of $17.9 million, enabling a reduction in the Gross Leverage Ratio to 1.0x.
The Company has not reconciled forward-looking Adjusted EBITDA and Free Cash Flow to GAAP measures due to the variability and low visibility of certain costs, including acquisition/divestiture costs and impairment expenses.
The Company's annual incentive plans for management utilize Free Cash Flow as a metric for measuring cash-generation performance.
The Company maintains locations in North America, South America, Europe, and Asia.