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Mar 31, 2023
Foster Q1 2023 Earnings Report
L.B. Foster's first quarter operating results improved, driven by strategic transformation initiatives.
Key Takeaways
L.B. Foster reported a 16.9% increase in net sales and a 41.6% increase in gross profit for the first quarter of 2023. The company sold its Chemtec business and reduced net debt by $11.5 million. Order rates and backlog remained strong, with a focus on organic growth and margin expansion.
Net sales increased by 16.9% year over year, with organic growth of 11.5%.
Gross profit increased by 41.6% year over year, and gross margins improved by 360 bps to 20.2%.
The sale of Chemtec Precision Measurement Products and Systems business was completed, reducing energy market exposure.
Net debt was reduced by $11.5 million, and the Gross Leverage Ratio decreased to 2.4x.
Forward Guidance
The company reaffirms its financial guidance for the fiscal year ending December 31, 2023, with net sales expected to range between $520 million to $550 million and adjusted EBITDA remaining unchanged between $27 million and $31 million.
Positive Outlook
- Quotation and order rates remain robust across the majority of the business.
- Rail Technologies and Precast Concrete growth platforms continue to benefit from infrastructure investment programs.
- Confident in organic growth and margin expansion potential.
- Aspirational goals of ~$600 million in revenue and ~$50 million in EBITDA by 2025.
- Focus on reducing indebtedness and improving leverage metrics.
Challenges Ahead
- Broader recessionary conditions prevalent in certain industrial markets.
- Net sales guidance lowered due to Chemtec divestiture.
- Elevated net debt levels due to increased funding needs for acquisitions.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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