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Jun 30, 2022
Foster Q2 2022 Earnings Report
Reported a decrease in net sales due to a decline in the Rail, Technologies, and Services segment and the divestiture of the Piling Products division, partially offset by an increase in the Precast Concrete Products segment.
Key Takeaways
L.B. Foster reported a decrease in net sales for the second quarter of 2022, primarily due to the divestiture of its Piling Products division and a decline in the Rail, Technologies, and Services segment. However, new orders and backlog increased, and the company completed two acquisitions in the U.K.
New orders increased by 2.1% year-over-year, and 24.7% excluding the Piling Products division.
Net sales decreased by 14.9% compared to the prior year quarter.
Operating profit decreased by 49.6% compared to the prior year quarter.
The company completed the acquisitions of Skratch Enterprises Ltd. and Intelligent Video Ltd.
Foster
Foster
Forward Guidance
The Company is maintaining its optimistic outlook regarding the longer-term trends in its core end markets of freight and transit rail and general infrastructure.
Positive Outlook
- Government infrastructure spending programs will provide funding for key infrastructure projects.
- Orders totaled $276.8 million, up 21.2% over the same period last year when adjusted for the Piling divestiture
- Backlog finished at a robust $250.8 million at quarter end, up 14.3% versus last year when adjusted for the Piling divestiture
- Overall quotation activity and demand in these markets continues to improve
- Additional flexibility and capacity resulting from the amendment and extension of our credit agreement completed in August 2021
Challenges Ahead
- Recessionary conditions are expanding in many industrial markets
- Quotation activity and demand in these markets continues to improve, they are still below pre-pandemic levels, particularly in its rail markets
- The present inflationary environment in labor and raw materials continues to pressure margins across the business
- We have not yet seen significant business activity from the IIJA
- Raw materials, labor, supply chains, service partner resources, and lingering COVID-19 related effects to mitigate their adverse impact on its operations and results as much as possible