Foster Q2 2024 Earnings Report
Key Takeaways
L.B. Foster Company reported a 4.9% year-over-year decrease in second-quarter net sales, with organic sales down 3.4%. Net income decreased by 19.4% to $2.8 million, and adjusted EBITDA fell by 23.8% to $8.1 million. The company is implementing restructuring efforts to reduce costs and enable growth, while adjusting its full-year financial guidance to reflect uncertain market conditions.
Net sales decreased by 4.9% year over year, with organic sales down 3.4%, primarily in the Rail segment.
Net income decreased by 19.4% to $2.8 million, and adjusted EBITDA decreased by 23.8% to $8.1 million.
New orders decreased by 6.9% year over year to $171.0 million, while backlog decreased by 13.9% to $249.8 million.
Full-year 2024 financial guidance was adjusted, with net sales expected to range from $525.0 million to $550.0 million and adjusted EBITDA expected to range from $34.0 million to $37.0 million.
Foster
Foster
Forward Guidance
The Company is updating its 2024 financial guidance. Net sales are now expected to range from $525.0 million to $550.0 million and adjusted EBITDA is expected to range from $34.0 million to $37.0 million. Free cash flow is expected to be breakeven with capital spending at 2.5% of sales
Positive Outlook
- Restructuring program expected to improve profitability.
- Focus on strategic playbook to drive growth and shareholder returns.
- Flexibility to repurchase more shares through February 2025.
- Expectation of improved cash flow generation as Union Pacific settlement obligation wraps up.
- Positive benefits seen from restructuring actions in the UK business.
Challenges Ahead
- Uncertain market conditions impacting financial guidance.
- Softer business conditions and expected timing of larger orders affecting cash generation.
- Overall backlog down $40.3 million versus last year.
- Lower order rates due to softer business activity in the Steel Products business unit.
- Net debt rose $8.2 million during the quarter to fund working capital needs, capital spending, and stock buyback program.