L.B. Foster Company (NASDAQ: FSTR), a global technology solutions
provider of products and services for the rail and infrastructure
markets (the "Company"), today announced it would discontinue its
fabricated bridge grid deck manufacturing and commercial operations
located in Bedford, PA. The decision to exit the product line,
which includes the separation of certain union and non-union
employees both in Bedford and Greentree, PA, is a result of a weak
bridge grid deck market condition and outlook due to customer
adoption of newer technologies replacing the grid deck solution. It
also allows the Company to focus on its growing bridge forms
product line which will continue to be produced at its Bedford
manufacturing site.
The Company expects to cease grid deck
operations during the fourth quarter of 2023. In connection with
its exit of the product line, which represents approximately $9
million in sales over the last twelve months, the Company expects
to incur certain cash and non-cash exit costs in 2023 ranging
between approximately $2.6 million and $2.9 million.
John Kasel, President and Chief Executive
Officer, commented, “In line with our strategic playbook and
portfolio transformation objectives, this action is being taken to
improve the overall health and prospects of our bridge business
located in Bedford. Our bridge operation has been part of the
Bedford community for over 50 years and the grid decking solution
has a proud legacy and recognition in the market. Our focus today
remains on expanding the bridge forms product line in Bedford and
on supporting our customers and employees to ensure a smooth
transition for everyone affected by this necessary decision.”
Impact to 2023 Financial
GuidanceThe exit of the bridge grid decking product line
is not expected to have a material impact on the Company’s
financial guidance for its fiscal year ending December 31, 2023,
with net sales expected to range between $520 million and $550
million and adjusted EBITDA expected to range between $28 million
to $32 million.
About L.B. Foster
CompanyFounded in 1902, L.B. Foster Company is a global
technology solutions provider of engineered, manufactured products
and services that builds and supports infrastructure. The Company’s
innovative engineering and product development solutions address
the safety, reliability, and performance needs of its customer's
most challenging requirements. The Company maintains locations in
North America, South America, Europe, and Asia. For more
information, please visit www.lbfoster.com.
Forward-Looking StatementsThis
release may contain “forward-looking” statements within the meaning
of Section 21E of the Securities Exchange Act of 1934, as amended,
and Section 27A of the Securities Act of 1933, as amended.
Forward-looking statements provide management's current
expectations of future events based on certain assumptions and
include any statement that does not directly relate to any
historical or current fact. Sentences containing words such as
“believe,” “intend,” “plan,” “may,” “expect,” “should,” “could,”
“anticipate,” “estimate,” “predict,” “project,” or their negatives,
or other similar expressions of a future or forward-looking nature
generally should be considered forward-looking statements.
Forward-looking statements in this earnings release are based on
management's current expectations and assumptions about future
events that involve inherent risks and uncertainties and may
concern, among other things, the Company’s expectations relating to
our strategy, goals, projections, and plans regarding our financial
position, liquidity, capital resources, and results of operations
and decisions regarding our strategic growth initiatives, market
position, and product development. While the Company considers
these expectations and assumptions to be reasonable, they are
inherently subject to significant business, economic, competitive,
regulatory, and other risks and uncertainties, most of which are
difficult to predict and many of which are beyond the Company’s
control. The Company cautions readers that various factors could
cause the actual results of the Company to differ materially from
those indicated by forward-looking statements. Accordingly,
investors should not place undue reliance on forward-looking
statements as a prediction of actual results. Among the factors
that could cause the actual results to differ materially from those
indicated in the forward-looking statements are risks and
uncertainties related to: any future global health crises, and the
related social, regulatory, and economic impacts and the response
thereto by the Company, our employees, our customers, and national,
state, or local governments; a continuation or worsening of the
adverse economic conditions in the markets we serve, including
recession, the continued volatility in the prices for oil and gas,
governmental travel restrictions, project delays, and budget
shortfalls, or otherwise; volatility in the global capital markets,
including interest rate fluctuations, which could adversely affect
our ability to access the capital markets on terms that are
favorable to us; restrictions on our ability to draw on our credit
agreement, including as a result of any future inability to comply
with restrictive covenants contained therein; a decrease in freight
or transit rail traffic; environmental matters, including any costs
associated with any remediation and monitoring of such matters; the
risk of doing business in international markets, including
compliance with anti-corruption and bribery laws, foreign currency
fluctuations and inflation, and trade restrictions or embargoes;
our ability to effectuate our strategy, including cost reduction
initiatives, and our ability to effectively integrate acquired
businesses or to divest businesses, such as the recent dispositions
of the Track Components, Chemtec, and Ties businesses, and
acquisitions of the Skratch Enterprises Ltd., Intelligent Video
Ltd., and VanHooseCo Precast LLC businesses and to realize
anticipated benefits; costs of and impacts associated with
shareholder activism; the timeliness and availability of materials
from our major suppliers, as well as the impact on our access to
supplies of customer preferences as to the origin of such supplies,
such as customers’ concerns about conflict minerals; labor
disputes; cyber-security risks such as data security breaches,
malware, ransomware, “hacking,” and identity theft, which could
disrupt our business and may result in misuse or misappropriation
of confidential or proprietary information, and could result in the
disruption or damage to our systems, increased costs and losses, or
an adverse effect to our reputation; the continuing effectiveness
of our ongoing implementation of an enterprise resource planning
system; changes in current accounting estimates and their ultimate
outcomes; the adequacy of internal and external sources of funds to
meet financing needs, including our ability to negotiate any
additional necessary amendments to our credit agreement or the
terms of any new credit agreement, and reforms regarding the use of
SOFR as a benchmark for establishing applicable interest rates; the
Company’s ability to manage its working capital requirements and
indebtedness; domestic and international taxes, including estimates
that may impact taxes; domestic and foreign government regulations,
including tariffs; economic conditions and regulatory changes
caused by the United Kingdom’s exit from the European Union;
geopolitical conditions, including the conflict in Ukraine; a lack
of state or federal funding for new infrastructure projects; an
increase in manufacturing or material costs; the loss of future
revenues from current customers; and risks inherent in litigation
and the outcome of litigation and product warranty claims. Should
one or more of these risks or uncertainties materialize, or should
the assumptions underlying the forward-looking statements prove
incorrect, actual outcomes could vary materially from those
indicated. Significant risks and uncertainties that may affect the
operations, performance, and results of the Company’s business and
forward-looking statements include, but are not limited to, those
set forth under Item 1A, “Risk Factors,” and elsewhere in our
Annual Report on Form 10-K for the year ended December 31,
2022, or as updated and/or amended by our other current or periodic
filings with the Securities and Exchange Commission.
The forward-looking statements in this release
are made as of the date of this release and we assume no obligation
to update or revise any forward-looking statement, whether as a
result of new information, future developments, or otherwise,
except as required by the federal securities laws.
Investor Relations:Stephanie
Schmidt(412) 928-3417investors@lbfoster.com
L.B. Foster Company415 Holiday DriveSuite
100Pittsburgh, PA 15220
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