PITTSBURGH, July 24 PA-LBFoster-Q2-ern-cl
PITTSBURGH, July 24 /PRNewswire-FirstCall/ -- L.B. Foster Company
(Nasdaq: FSTR), a leading manufacturer, fabricator, and distributor of
products and services for rail, construction, energy and utility markets,
today reported that its second quarter earnings per diluted share from
continuing operations were $0.69 compared to $0.63 in last year's second
quarter, a 9.5% increase. This represents record second quarter earnings for
the Company and marks the fourteenth consecutive quarter the Company has
recorded an earnings increase over the prior year quarter.
2008 Second Quarter Results
In the second quarter of 2008, L.B. Foster had income from continuing
operations of $7.7 million or $0.69 per diluted share compared to income from
continuing operations of $6.8 million or $0.63 per diluted share in the second
quarter of 2007.
Net sales decreased 12.6% to $129.8 million compared to $148.5 million in
the prior year quarter. Gross profit margin was 16.9%, up 255 basis points
from the prior year quarter primarily as a result of increased billing margins
and decreased unfavorable manufacturing variances partially offset by
increased LIFO expense. Second quarter LIFO expense was approximately
$2.5 million compared to $0.7 million in the prior year.
Selling and administrative expenses increased $0.2 million or 1.7% over
last year's quarter due primarily to increased employee related costs
including salaries and benefits. Second quarter interest expense was
$0.5 million, a 59% decrease from the prior year quarter due principally to
decreased average borrowings as the Company generated strong positive cash
flows in the second half of 2007. The Company also generated $0.6 million of
investment income in the second quarter of 2008. The Company's income tax rate
from continuing operations was 37.0% in the second quarter compared to 35.5%
in the prior year quarter.
"Despite sales declining by 12.6%, we are pleased with many facets of our
second quarter results including more than a 250 basis point increase in gross
profit margins; a very strong bookings quarter totaling $164.1 million;
backlog has improved dramatically from the first quarter and is now at
$192.2 million, up 7% over last year; improved plant and yard efficiencies and
positive cash flow from operations even in the face of rapidly escalating
commodity costs," commented Stan Hasselbusch, President and Chief Executive
Officer. "We believe that the improved margin trend and our stronger backlog
will have a favorable impact on our second half operating results." Mr.
Hasselbusch also announced, "L.B. Foster purchased 413,362 shares of its stock
in the open market during the second quarter for approximately $13.8 million
pursuant to a recently announced share repurchase program authorized by our
Board of Directors."
2008 Half Year Results
For the six months ended June 30, 2008, L.B. Foster reported income from
continuing operations of $14.0 million or $1.26 per diluted share. These
results include a first quarter pretax gain related to additional proceeds
from a favorable working capital adjustment pursuant to the prior year sale of
the Company's investment in the DM&E Railroad of $2.0 million, as well as a
pretax gain on the sale and lease-back of our threaded products facility in
Houston, Texas. Excluding these gains, earnings per diluted share from
continuing operations were $1.06 compared to $0.91 last year.
Net sales for the first half of 2008 decreased 13.9% to $223.3 million
compared to $259.2 million in 2007. Gross profit margin was 16.8%, up 310
basis points from 2007, primarily as a result of increased billing margins and
decreased unfavorable manufacturing variances.
Selling and administrative expenses increased $1.1 million or 6% over the
prior year due primarily to employee related costs including salaries and
benefits. Interest expense decreased $1.4 million from the prior year due
principally to decreased average borrowings. The Company's income tax rate
from continuing operations was 36.6% compared to 35.6% in the prior year.
Cash provided from operations was approximately $6.3 million for the
second quarter of 2008 compared to a $12.4 million in the second quarter of
2007. Capital expenditures were $1.0 million in 2008 compared to $1.3 million
during the prior year quarter. Year-to-date capital expenditures were
$3.1 million, $0.4 million higher than 2007. "We continue to expect to
generate positive cash flows from operations in excess of our capital
expenditures in 2008," noted Mr. Hasselbusch as he concluded, "We continue to
undertake initiatives across the organization to improve our core businesses
while we target synergistic and accretive acquisitions."
L.B. Foster Company will conduct a conference call and webcast to discuss
its second quarter 2008 operating results and general market activity and
business conditions on Thursday, July 24, 2008 at 1:00pm ET. The call will be
hosted by Mr. Stan Hasselbusch, President and Chief Executive Officer. Listen
via audio on the L.B. Foster web site: http://www.lbfoster.com, by accessing
the Investor Relations page.
The Company wishes to caution readers that various factors could cause the
actual results of the Company to differ materially from those indicated by
forward-looking statements in news releases, and other communications,
including oral statements, such as references to future profitability, made
from time to time by representatives of the Company. Specific risks and
uncertainties that could affect the Company's profitability include, but are
not limited to, general economic conditions, sudden and/or sharp declines in
steel prices, adequate funding for infrastructure projects, production delays
or problems encountered at our manufacturing facilities, and the availability
of existing and new piling and rail products. There are also no assurances
that the Canadian Pacific Railway will proceed with the Powder River Basin
project and trigger any contingent payments to L.B. Foster. Matters discussed
in such communications are forward-looking statements that involve risks and
uncertainties. Sentences containing words such as "anticipates," "expects," or
"will," generally should be considered forward-looking statements. More
detailed information on these and additional factors which could affect the
Company's operating and financial results are described in the Company's Forms
10-K, 10-Q and other reports, filed or to be filed with the Securities and
Exchange Commission. The Company urges all interested parties to read these
reports to gain a better understanding of the many business and other risks
that the Company faces. The forward-looking statements contained in this press
release are made only as of the date hereof, and the Company undertakes no
obligation to update or revise these forward-looking statements, whether as a
result of new information, future events or otherwise.
Contact: David J. Russo
Phone: (412) 928-3417
FAX: (412) 928-7891
Email: investors@LBFosterCo.com
CONDENSED STATEMENTS OF CONSOLIDATED INCOME
L.B. FOSTER COMPANY AND SUBSIDIARIES
(In Thousands, Except Per Share Amounts)
Three Months Ended Six Months Ended
June 30,June 30,
2008 2007 2008 2007
(Unaudited) (Unaudited)
NET SALES $129,833 $148,547 $223,274 $259,213
COSTS AND EXPENSES:
Cost of goods sold 107,948 127,309 185,768 223,785
Selling and administrative expenses 9,959 9,79019,32518,191
Interest expense488 1,183 1,043 2,405
Gain on sale of DM&E investment - - (2,022) -
Gain on sale of property- - (1,486) -
Interest income(586) (4) (1,401) (5)
Other (income) / expense (135) (342) 16 (599)
117,674 137,936 201,243 243,777
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 12,15910,61122,03115,436
INCOME TAXES 4,502 3,762 8,068 5,495
INCOME FROM CONTINUING OPERATIONS,
NET OF TAX 7,657 6,84913,963 9,941
DISCONTINUED OPERATIONS:
LOSS FROM DISCONTINUED OPERATIONS - (31) - (19)
INCOME TAX BENEFIT - (12) - (8)
LOSS FROM DISCONTINUED OPERATIONS,
NET OF TAX - (19) - (11)
NET INCOME $7,657$6,830 $13,963$9,930
BASIC EARNINGS PER COMMON SHARE:
FROM CONTINUING OPERATIONS $0.70 $0.65 $1.28 $0.94
FROM DISCONTINUED OPERATIONS 0.00 (0.00) 0.00 (0.00)
BASIC EARNINGS PER COMMON SHARE $0.70 $0.64 $1.28 $0.94
DILUTED EARNINGS PER COMMON SHARE:
FROM CONTINUING OPERATIONS $0.69 $0.63 $1.26 $0.91
FROM DISCONTINUED OPERATIONS 0.00 (0.00) 0.00 (0.00)
DILUTED EARNINGS PER COMMON SHARE $0.69 $0.63 $1.26 $0.91
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - BASIC 10,90010,59310,93910,574
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - DILUTED11,04010,92611,09710,912
L.B. Foster Company and Subsidiaries
Consolidated Balance Sheet
(In thousands)
June 30,December 31,
2008 2007
ASSETS(Unaudited)
CURRENT ASSETS:
Cash and cash items $107,648 $121,097
Accounts and notes receivable:
Trade73,40252,856
Other 463 754
Inventories 105,449 102,447
Current deferred tax assets 3,575 3,615
Other current assets1,509 1,131
Property held for resale - 2,497
Total Current Assets 292,046 284,397
OTHER ASSETS:
Property, plant & equipment-net42,87444,136
Goodwill 350 350
Other intangibles - net4450
Deferred tax assets 1,426 1,411
Other non-current assets 398 428
Total Other Assets 45,09246,375
$337,138 $330,772
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities on long-term debt $5,909$6,191
Accounts payable-trade and other 65,79353,489
Accrued payroll and employee benefits 5,58411,490
Current deferred tax liabilities3,541 3,541
Other accrued liabilities 7,819 8,841
Current liabilities of discontinued
operations 200 200
Total Current Liabilities 88,84683,752
LONG-TERM DEBT, TERM LOAN 14,76216,190
OTHER LONG-TERM DEBT 10,24111,866
DEFERRED TAX LIABILITIES 1,638 1,638
OTHER LONG-TERM LIABILITIES5,283 3,500
STOCKHOLDERS' EQUITY:
Class A Common stock 110 109
Paid-in capital47,48445,147
Retained earnings 183,277 169,314
Treasury stock(13,831) -
Accumulated other comprehensive loss (672) (744)
Total Stockholders' Equity216,368 213,826
$337,138 $330,772
SOURCE L.B. Foster Company
