L.B. Foster Announces Strong Second Quarter Results with Organic Growth and Profitability Expansion Expected to Continue Through Balance of 2025
Second quarter net income of $2.8 million up 1.3% over last year; Adjusted EBITDA1 of $12.2 million up 51.4% on 2.0% organic sales growth led by Precast Concrete business unit up 36.0%
Robust order rates increased backlog1 to $269.9 million, up 8.1% over prior year; Rail backlog up 13.9% with recovery of Rail Products, up 28.4%, and growing demand for Global Friction Management, up 22.1%
Revised 2025 guidance mid-points assume a 25.1% increase in Adjusted EBITDA versus last year on 2.7% organic sales growth; 2025 second half Adjusted EBITDA anticipated up 42.8% on 14.3% sales growth
PITTSBURGH, Aug. 11, 2025 (GLOBE NEWSWIRE) -- L.B. Foster Company (NASDAQ:FSTR), a global technology solutions provider of products and services for the rail and infrastructure markets (the "Company"), today reported its 2025 second quarter operating results.
Second Quarter 2025 Highlights
Three Months EndedJune 30,
Change
2025
2024
2025 vs. 2024
(Unaudited)
Net sales
$
143,558
$
140,796
2.0
%
Net income attributable to L.B. Foster Company
2,885
2,847
1.3
%
Adjusted EBITDA1
12,231
8,077
51.4
%
Net cash provided by (used in) operating activities
10,402
(4,954
)
310.0
%
Free cash flow1
7,729
(7,008
)
210.3
%
Total debt
81,628
87,173
(6.4)%
Gross Leverage Ratio1
2.2x
2.7x
(0.5)x
New orders1
$
175,756
$
170,993
2.8
%
Backlog1
$
269,929
$
249,805
8.1
%
Financial Guidance Update
2025 Full Year Financial Guidance
Low
High
Net sales
$
535,000
$
555,000
Adjusted EBITDA1
$
40,000
$
44,000
Capital spending as a percent of sales
~2.0%
~2.0%
Free cash flow1
$
15,000
$
25,000
CEO Comments
John Kasel, President and Chief Executive Officer, commented, "In line with our expectations, we achieved a strong, broad recovery in our business in the second quarter, with 2.0% organic sales growth delivering 51.4% higher Adjusted EBITDA. The improved results in the quarter were realized primarily in our Infrastructure segment with organic sales up 22.4%, led by 36.0% higher Precast Concrete sales. Rail sales remained soft in the quarter, down 11.2% versus last year. However, Rail backlog increased 42.5% during the quarter and was up 13.9% over last year, which sets a solid foundation for expected robust sales growth in the 2025 second half. We also realized significant operating expense leverage in the quarter, with the SG&A percentage of sales of 15.6% improving 200 bps versus last year. We're very pleased with our team's accomplishments in the quarter and the improving track we're on."
Mr. Kasel concluded, "We expect strong organic sales growth and profitability improvement to continue in the back half of 2025, led by North American demand recovery for our Rail segment. The increased Rail backlog over last year was driven by improvements in Rail Products, up 28.4%, and Global Friction Management, up 22.1%. These improvements more than offset a 37.9% decline in Technology Services and Solutions backlog driven primarily by our continued right-sizing of the United Kingdom portion of this business, as indicated by the $1.4 million restructuring charge taken in the quarter. The Infrastructure backlog also increased 3.1% over last year, with Precast Concrete up 1.2% and Steel Products up 7.4%, including a 36.8% increase for Protective Coatings. Margin profiles within the backlog continue to improve in line with our strategy, which along with continuing SG&A constraints should translate into expanding profitability through year end. Gross leverage per our recently-amended and extended revolving credit facility improved to 2.2x at quarter end, down from 2.5x in the first quarter and 2.7x last year. We anticipate $41 million in free cash flow in the second half of 2025 based on the mid-point of our guidance and expect to continue our share buy backs and further reduce leverage to a target range of 1.0x - 1.5x by year end. With increased borrowing capacity and flexibility now available, coupled with strong cash generation expected through year end, we're well positioned to continue our strategic playbook execution to drive shareholder returns through the balance of 2025 and beyond."
1 See "Non-GAAP Disclosures" at the end of this press release for a description of and information regarding Adjusted EBITDA, gross leverage ratio per the Company's credit agreement, new orders, backlog, book-to-bill ratio, net debt, free cash flow, and related reconciliations to the comparable United States Generally Accepted Accounting Principles financial measures.
Second Quarter 2025 Consolidated Results
The Company's second quarter performance highlights are reflected below:
Three Months EndedJune 30,
Change
PercentChange
2025
2024
2025 vs. 2024
2025 vs. 2024
(Unaudited)
Net sales
$
143,558
$
140,796
$
2,762
2.0
%
Gross profit
30,900
30,513
387
1.3
Gross profit margin
21.5
%
21.7
%
(20) bps
(0.9
)
Selling and administrative expenses
$
22,382
$
24,818
$
(2,436
)
(9.8
)
Selling and administrative expenses as a percent of sales
15.6
%
17.6
%
(200) bps
(11.3
)
Amortization expense
840
1,123
(283
)
(25.2
)
Operating income
$
7,678
$
4,572
$
3,106
67.9
Net income attributable to L.B. Foster Company
2,885
2,847
38
1.3
Adjusted EBITDA1
12,231
8,077
4,154
51.4
New orders1
$
175,756
$
170,993
$
4,763
2.8
Backlog1
$
269,929
$
249,805
$
20,124
8.1
Net sales for the 2025 second quarter increased $2.8 million, or 2.0%, over the prior year quarter. The increase was driven by strong sales growth in the Infrastructure Solutions ("Infrastructure") segment, improving $12.4 million, or 22.4%, over the prior year quarter. Partially offsetting these improvements were sales volume declines in the Rail, Technologies, and Services ("Rail") segment which declined $9.6 million, or 11.2%, from the prior year quarter.
Gross profit for the 2025 second quarter increased $0.4 million, or 1.3%, over the prior year quarter. The improvement in gross profit was due to higher sales and improved business mix within Infrastructure, partially offset by $1.1 million of costs related to the Company's decision to exit the United Kingdom ("UK")-based Automation and Materials Handling product line ("AMH Exit"). Gross profit margins declined 20 basis points to 21.5% due to last year's results including a $0.8 million gain realized on the sale of an ancillary property coupled with the $1.1 million AMH Exit costs incurred in the current year.
Selling and administrative expenses for the 2025 second quarter decreased $2.4 million, or 9.8%, from the prior year quarter. The decrease was primarily attributed to lower personnel costs and professional services expenditures which decreased $0.9 million and $0.5 million, respectively. Selling and administrative expenses for the 2025 second quarter include $0.3 million in AMH Exit costs and the prior year quarter includes $0.8 million in legal costs associated with a resolved legal matter. Selling and administrative expenses as a percentage of net sales decreased 200 bps to 15.6% in the current quarter.
Operating income for the 2025 second quarter improved $3.1 million, or 67.9%, compared to the prior year quarter. The improvement was due to higher gross profit, lower selling and administrative expenses and lower amortization expense.
Net income attributable to the Company for the 2025 second quarter was essentially flat compared to the prior year quarter. The Company recorded income tax expense of $3.4 million on pre-tax income of $6.3 million, for an effective income tax rate of 54.8%, compared to an effective rate of 10.9% in the prior year quarter. The Company's effective income tax rate for the 2025 second quarter differed from the federal statutory rate of 21% primarily due to the impact of pre-tax losses in the United Kingdom with a full valuation allowance for which no income tax benefit was recognized.
Adjusted EBITDA for the second quarter of 2025 was adjusted for $1.4 million of costs associated with the AMH Exit, while the second quarter of 2024 was adjusted for the $0.8 million gain on the sale of fixed assets and $0.8 million for certain legal expenses. Adjusted EBITDA for the 2025 second quarter increased by $4.2 million, or 51.4%, over the prior year quarter.
Cash provided by operating activities totaled $10.4 million in the second quarter of 2025, an increase of $15.4 million over cash used by operating activities of $5.0 million in the prior year quarter.
Total debt as of June 30, 2025 was $81.6 million, a $0.9 million decrease during the quarter and a $5.5 million decrease from the prior year quarter. The Company's Gross Leverage Ratio per its credit facility was 2.2x as of June 30, 2025, down from 2.7x last year.
New orders for the 2025 second quarter increased $4.8 million, or 2.8%, over the prior year quarter, with the increase realized in the Infrastructure segment. The trailing twelve month book-to-bill ratio1 was 1.04 : 1.00. Backlog increased $20.1 million, or 8.1%, compared to the prior year quarter, with increases in both the Rail and Infrastructure segments.
Second Quarter 2025 Business Results by Segment
Rail, Technologies, and Services Segment
Three Months EndedJune 30,
Change
PercentChange
2025
2024
2025 vs. 2024
2025 vs. 2024
Net sales
$
75,973
$
85,594
$
(9,621
)
(11.2)%
Gross profit
$
15,132
$
17,875
$
(2,743
)
(15.3
)
Gross profit margin
19.9
%
20.9
%
(100) bps
(4.6
)
Segment operating income
$
3,747
$
5,501
$
(1,754
)
(31.9
)
Segment operating income margin
4.9
%
6.4
%
(150) bps
(23.3
)
New orders1
$
114,345
$
116,996
$
(2,651
)
(2.3
)
Backlog1
$
130,709
$
114,794
$
15,915
13.9
Net sales for the 2025 second quarter decreased $9.6 million, or 11.2%, from the prior year quarter. The decline was primarily driven by an $8.7 million decline from lower volumes in the Rail Products business, coupled with lower volumes in our Technology Services and Solutions business with sales declining $3.9 million due to right-sizing initiatives in our UK business and overall commercial softness in the UK market. Partially offsetting these declines was an increase of $3.0 million in Global Friction Management sales.
Gross profit for the 2025 second quarter decreased $2.7 million from the prior year quarter, and gross profit margins declined 100 basis points to 19.9%. The gross profit decline was driven primarily by lower sales volumes and $1.1 million of costs associated with the AMH Exit.
Segment operating income for the 2025 second quarter decreased $1.8 million from the prior year quarter due primarily to lower gross profit partially offset by a decline in selling and administrative expenses. During the 2025 second quarter AMH Exit costs reduced operating income by $1.4 million.
New orders decreased $2.7 million, driven largely by Technology Services and Solutions primarily due to our scaling back the UK business and timing of Global Friction Management orders. Partially offsetting these declines was a 3.1% increase in Rail Products orders. The trailing twelve month book-to-bill ratio was 1.06 : 1.00. Backlog increased $15.9 million over the prior year quarter driven by Rail Products and Global Friction Management, partially offset by a decrease in backlog for Technology Services and Solutions.
Infrastructure Solutions Segment
Three Months EndedJune 30,
Change
PercentChange
2025
2024
2025 vs. 2024
2025 vs. 2024
Net sales
$
67,585
$
55,202
$
12,383
22.4
%
Gross profit
$
15,768
$
12,638
$
3,130
24.8
Gross profit margin
23.3
%
22.9
%
40 bps
1.9
Segment operating income
$
6,766
$
3,623
$
3,143
86.8
