2008-07-24 07:08:00
L.B. Foster Reports Record Second Quarter Operating Results
PITTSBURGH, July 24 /EMWNews/ -- L.B. Foster Company (Nasdaq: FSTR), a leading manufacturer, fabricator, and distributor of products and services for rail, construction, energy and utility markets, today reported that its second quarter earnings per diluted share from continuing operations were $0.69 compared to $0.63 in last year's second quarter, a 9.5% increase. This represents record second quarter earnings for the Company and marks the fourteenth consecutive quarter the Company has recorded an earnings increase over the prior year quarter. 2008 Second Quarter Results In the second quarter of 2008, L.B. Foster had income from continuing operations of $7.7 million or $0.69 per diluted share compared to income from continuing operations of $6.8 million or $0.63 per diluted share in the second quarter of 2007. Net sales decreased 12.6% to $129.8 million compared to $148.5 million in the prior year quarter. Gross profit margin was 16.9%, up 255 basis points from the prior year quarter primarily as a result of increased billing margins and decreased unfavorable manufacturing variances partially offset by increased LIFO expense. Second quarter LIFO expense was approximately $2.5 million compared to $0.7 million in the prior year. Selling and administrative expenses increased $0.2 million or 1.7% over last year's quarter due primarily to increased employee related costs including salaries and benefits. Second quarter interest expense was $0.5 million, a 59% decrease from the prior year quarter due principally to decreased average borrowings as the Company generated strong positive cash flows in the second half of 2007. The Company also generated $0.6 million of investment income in the second quarter of 2008. The Company's income tax rate from continuing operations was 37.0% in the second quarter compared to 35.5% in the prior year quarter. "Despite sales declining by 12.6%, we are pleased with many facets of our second quarter results including more than a 250 basis point increase in gross profit margins; a very strong bookings quarter totaling $164.1 million; backlog has improved dramatically from the first quarter and is now at $192.2 million, up 7% over last year; improved plant and yard efficiencies and positive cash flow from operations even in the face of rapidly escalating commodity costs," commented Stan Hasselbusch, President and Chief Executive Officer. "We believe that the improved margin trend and our stronger backlog will have a favorable impact on our second half operating results." Mr. Hasselbusch also announced, "L.B. Foster purchased 413,362 shares of its stock in the open market during the second quarter for approximately $13.8 million pursuant to a recently announced share repurchase program authorized by our Board of Directors." 2008 Half Year Results For the six months ended June 30, 2008, L.B. Foster reported income from continuing operations of $14.0 million or $1.26 per diluted share. These results include a first quarter pretax gain related to additional proceeds from a favorable working capital adjustment pursuant to the prior year sale of the Company's investment in the DM&E Railroad of $2.0 million, as well as a pretax gain on the sale and lease-back of our threaded products facility in Houston, Texas. Excluding these gains, earnings per diluted share from continuing operations were $1.06 compared to $0.91 last year. Net sales for the first half of 2008 decreased 13.9% to $223.3 million compared to $259.2 million in 2007. Gross profit margin was 16.8%, up 310 basis points from 2007, primarily as a result of increased billing margins and decreased unfavorable manufacturing variances. Selling and administrative expenses increased $1.1 million or 6% over the prior year due primarily to employee related costs including salaries and benefits. Interest expense decreased $1.4 million from the prior year due principally to decreased average borrowings. The Company's income tax rate from continuing operations was 36.6% compared to 35.6% in the prior year. Cash provided from operations was approximately $6.3 million for the second quarter of 2008 compared to a $12.4 million in the second quarter of 2007. Capital expenditures were $1.0 million in 2008 compared to $1.3 million during the prior year quarter. Year-to-date capital expenditures were $3.1 million, $0.4 million higher than 2007. "We continue to expect to generate positive cash flows from operations in excess of our capital expenditures in 2008," noted Mr. Hasselbusch as he concluded, "We continue to undertake initiatives across the organization to improve our core businesses while we target synergistic and accretive acquisitions." L.B. Foster Company will conduct a conference call and webcast to discuss its second quarter 2008 operating results and general market activity and business conditions on Thursday, July 24, 2008 at 1:00pm ET. The call will be hosted by Mr. Stan Hasselbusch, President and Chief Executive Officer. Listen via audio on the L.B. Foster web site: http://www.lbfoster.com, by accessing the Investor Relations page. The Company wishes to caution readers that various factors could cause the actual results of the Company to differ materially from those indicated by forward-looking statements in news releases, and other communications, including oral statements, such as references to future profitability, made from time to time by representatives of the Company. Specific risks and uncertainties that could affect the Company's profitability include, but are not limited to, general economic conditions, sudden and/or sharp declines in steel prices, adequate funding for infrastructure projects, production delays or problems encountered at our manufacturing facilities, and the availability of existing and new piling and rail products. There are also no assurances that the Canadian Pacific Railway will proceed with the Powder River Basin project and trigger any contingent payments to L.B. Foster. Matters discussed in such communications are forward-looking statements that involve risks and uncertainties. Sentences containing words such as "anticipates," "expects," or "will," generally should be considered forward-looking statements. More detailed information on these and additional factors which could affect the Company's operating and financial results are described in the Company's Forms 10-K, 10-Q and other reports, filed or to be filed with the Securities and Exchange Commission. The Company urges all interested parties to read these reports to gain a better understanding of the many business and other risks that the Company faces. The forward-looking statements contained in this press release are made only as of the date hereof, and the Company undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
Contact: David J. Russo Phone: (412) 928-3417 FAX: (412) 928-7891 Email: [email protected] CONDENSED STATEMENTS OF CONSOLIDATED INCOME L.B. FOSTER COMPANY AND SUBSIDIARIES (In Thousands, Except Per Share Amounts) Three Months Ended Six Months Ended June 30, June 30, 2008 2007 2008 2007 (Unaudited) (Unaudited) NET SALES $129,833 $148,547 $223,274 $259,213 COSTS AND EXPENSES: Cost of goods sold 107,948 127,309 185,768 223,785 Selling and administrative expenses 9,959 9,790 19,325 18,191 Interest expense 488 1,183 1,043 2,405 Gain on sale of DM&E investment - - (2,022) - Gain on sale of property - - (1,486) - Interest income (586) (4) (1,401) (5) Other (income) / expense (135) (342) 16 (599) 117,674 137,936 201,243 243,777 INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 12,159 10,611 22,031 15,436 INCOME TAXES 4,502 3,762 8,068 5,495 INCOME FROM CONTINUING OPERATIONS, NET OF TAX 7,657 6,849 13,963 9,941 DISCONTINUED OPERATIONS: LOSS FROM DISCONTINUED OPERATIONS - (31) - (19) INCOME TAX BENEFIT - (12) - (8) LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX - (19) - (11) NET INCOME $7,657 $6,830 $13,963 $9,930 BASIC EARNINGS PER COMMON SHARE: FROM CONTINUING OPERATIONS $0.70 $0.65 $1.28 $0.94 FROM DISCONTINUED OPERATIONS 0.00 (0.00) 0.00 (0.00) BASIC EARNINGS PER COMMON SHARE $0.70 $0.64 $1.28 $0.94 DILUTED EARNINGS PER COMMON SHARE: FROM CONTINUING OPERATIONS $0.69 $0.63 $1.26 $0.91 FROM DISCONTINUED OPERATIONS 0.00 (0.00) 0.00 (0.00) DILUTED EARNINGS PER COMMON SHARE $0.69 $0.63 $1.26 $0.91 AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC 10,900 10,593 10,939 10,574 AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED 11,040 10,926 11,097 10,912 L.B. Foster Company and Subsidiaries Consolidated Balance Sheet (In thousands) June 30, December 31, 2008 2007 ASSETS (Unaudited) CURRENT ASSETS: Cash and cash items $107,648 $121,097 Accounts and notes receivable: Trade 73,402 52,856 Other 463 754 Inventories 105,449 102,447 Current deferred tax assets 3,575 3,615 Other current assets 1,509 1,131 Property held for resale - 2,497 Total Current Assets 292,046 284,397 OTHER ASSETS: Property, plant & equipment-net 42,874 44,136 Goodwill 350 350 Other intangibles - net 44 50 Deferred tax assets 1,426 1,411 Other non-current assets 398 428 Total Other Assets 45,092 46,375 $337,138 $330,772 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities on long-term debt $5,909 $6,191 Accounts payable-trade and other 65,793 53,489 Accrued payroll and employee benefits 5,584 11,490 Current deferred tax liabilities 3,541 3,541 Other accrued liabilities 7,819 8,841 Current liabilities of discontinued operations 200 200 Total Current Liabilities 88,846 83,752 LONG-TERM DEBT, TERM LOAN 14,762 16,190 OTHER LONG-TERM DEBT 10,241 11,866 DEFERRED TAX LIABILITIES 1,638 1,638 OTHER LONG-TERM LIABILITIES 5,283 3,500 STOCKHOLDERS' EQUITY: Class A Common stock 110 109 Paid-in capital 47,484 45,147 Retained earnings 183,277 169,314 Treasury stock (13,831) - Accumulated other comprehensive loss (672) (744) Total Stockholders' Equity 216,368 213,826 $337,138 $330,772
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