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Sep 30, 2024
Foster Q1 2025 Earnings Report
L.B. Foster reported a decrease in sales and profitability for the first quarter of 2025, primarily due to lower demand in Rail Distribution, while Infrastructure sales saw growth.
Key Takeaways
L.B. Foster's first quarter 2025 results showed a significant decline in net sales and profitability compared to the exceptionally strong prior year, mainly driven by reduced demand in the Rail Distribution segment. However, the Infrastructure segment experienced growth, and the company saw strong order rates across its portfolio, leading to increased backlog.
Net sales decreased by 21.3% to $97.792 million, primarily due to lower volumes in the Rail, Technologies, and Services segment.
Net loss attributable to L.B. Foster Company was $2.110 million, a significant decline from a net income of $4.436 million in the prior year quarter.
Adjusted EBITDA decreased by 69.3% to $1.822 million, reflecting lower gross profit and the absence of a gain on asset sale reported in the prior year.
Total backlog increased by 6.7% to $237.215 million, driven by strong order rates in both Rail and Infrastructure segments, with improved profitability mix.
Foster
Foster
Foster Revenue by Segment
Revenue by Segment
Rail, Technologies, and Services Revenue
CapyFin.comInfrastructure Solutions Revenue
CapyFin.com Forward Guidance
L.B. Foster is maintaining its full year 2025 financial guidance, expecting improving sales and profitability in the second quarter, despite a volatile and uncertain macro-environment.
Positive Outlook
- Maintaining full year financial guidance, indicating confidence in future performance.
- Improving sales and profitability expected in the second quarter.
- Strong uptick in orders in both Rail and Infrastructure segments, leading to growing backlog.
- Higher Rail backlog, including a significant increase in Rail Products, driven by improved demand.
- Overall backlog improvement concentrated in more profitable product lines, expected to translate into near-term sales growth and profitability expansion.
Challenges Ahead
- Macro-environment remains volatile and uncertain.
- Currently in the heavy working capital investment period of the fiscal year.
- Leverage levels are expected to plateau around 2.5x before dropping.
- Guidance assumes federal infrastructure funding remains largely intact, but will be revisited if market demand drivers and operating conditions change.
- Potential for market demand drivers and broader operating conditions to become less clear for the balance of the year.
Revenue & Expenses
Visualization of income flow from segment revenue to net income