Q4 2022 L B Foster Co Earnings Call

Speaker 2: Good day and thank you for standing by. Welcome to the Q4 2022 LB Foster Ernieg's conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone.

Speaker 2: You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Stephanie Listwalk. You may now begin. Thank you, operator. Thank you, operator.

Speaker 3: Good morning everyone and welcome to LB Foster's fourth quarter of 2022 earnings call. My name is Stephanie Listwalk, the company's investor relations manager.

Speaker 3: Our President and CEO , John Castle, and our Chief Financial Officer, Bill Tolman, will be presenting our fourth quarter operating results, market outlook, and business developments this morning.

Speaker 3: We'll start the call with John providing his perspective on the company's recent portfolio changes and fourth quarter performance including market development.

Speaker 3: Bill will then review the company's fourth quarter financial results. John will provide perspective on the company outlook and his closing comment.

Speaker 3: We will then open the session of for question.

Speaker 3: Today's live presentation, along with our earnings release and financial disclosures, were posted on our website this morning and can be accessed on our Investor Relations page at lbfoster.com.

Speaker 3: Our comments this morning will follow the slides in the earnings presentation.

Speaker 3: Some statements we are making are forward-looking and represent our current view of our markets and business today. These four looking statements reflect our opinions only as of the date of this presentation, and we undertake no obligation to revise or publicly release the results of any revision to these statements in light of new information.

Speaker 3: except as required by security's laws.

Speaker 3: Please see the disclosures in our earnings release and presentation.

Speaker 3: We will also discuss non- GAAP financial metrics and encourage you to read our disclosures and reconciliation tables provided within today's earnings release and within our accompanying earnings presentation carefully as you consider these metrics.

Speaker 3: Additionally, during the years ended December 31, 2022 and 2021, the company completed three acquisition and two divestiture transactions in line with its Strategic Transformation Plan. Where meaningful, some of today's comments adjust for the impact of these strategic portfolio changes to highlight performance from ongoing operations.

Speaker 3: So with that, let me turn the call over to John .

Speaker 4: Thanks Stephanie and hello everyone thanks for joining us today for a fourth quarter earnings call. If you're following the presentation materials, please turn to slide number 5.

Speaker 4: As you know, we began a strategic transformation, I'll be fostering in late 2021, and I'm pleased to say that the work in the fourth quarter was another positive step into transformation of the company.

Speaker 4: As a summary, since the refresh schedule was rolled out, we completed five transactions, which were comprised of three companies we acquired from our growth platforms.

Speaker 4: and two legacy non-core companies we divested.

Speaker 4: These transactions were completed during time we faced unprecedented operating challenges, particularly around raw material inflation, supply chain disruptions, and labor availability.

Speaker 4: What you're hearing today calls that we're able to overcome these challenges and deliver strong results in Q4 and the second half of 2022.

Speaker 4: continue to build on the momentum moving in 2020-23. Specifically in the fourth quarter, we continue to trend a strong year over year improvements and results established in the third quarter.

Speaker 4: with Q4 revenues up 21.4% versus last year.

Speaker 4: Our portfolio transformation and margin improvement initiatives delivered a strong 260 basis point improvement in gross margins and a 7.5 million in just the EBITDA, which was 5.5% of the net sales and up nearly 133% over last year.

Speaker 4: Order rates were very robust at 137.8 million, of nearly 45% over last year, and our backlog remained at near record levels of 272 million.

Speaker 4: With the outlook for our key end markets remaining promising and our strategic transformation on track and taking hold, we issued financial guidance for 2023, which reflects a continuation of strong year-over-year growth.

Speaker 4: And with the prospects for improving financial outlook, our Board of Directors authorized a three-year $15 million stock buyback program.

Speaker 4: I'll cover these points in detail towards the end of the presentation.

Speaker 4: For now, it's your turn to go over to Bill to cover the financial height and the highlights of the quarter and full year. Over to you, Bill.

Speaker 5: Thanks, John , and good morning, everyone.

Speaker 5: I'll begin my comments by covering the fourth quarter highlights on slide 7.

Speaker 5: Note that the schedules in the appendix provide more detailed information on our financial results, including the non- GAAP measures Stephanie referenced.

Speaker 5: As a reminder, we divested the piling business in 2021 and track components in 2022.

Speaker 5: These transactions were not treated as discontinued operations.

Speaker 5: Accordingly, the amounts presented today include the piling business within the steel products and measurement segments.

Speaker 5: with track components reflected in rail technologies and services.

Speaker 5: Fourth quarter sales were 137.2 million, an increase of 24.2 million over Q4 last year, driven by strong organic growth and the accretive strategic transformation actions taken in 2022.

Speaker 5: The improved business portfolio can be seen in our gross margin expansion, which was up 260 basis points largely due to our acquisition and divestiture activity.

Speaker 5: margins in the legacy business also contributed 70 basis points to the improvement.

Speaker 5: SG&A expense was up $5.2 million due to the additional expenses from acquired businesses, coupled with M&A transaction costs and increased personnel expenses during the quarter.

Speaker 5: The reported net loss for the quarter was $43.9 million and was due to two specific non-cash items.

Speaker 5: $8 million was attributed to intangible asset impairment charges required in two of our returns businesses.

Speaker 5: $5 million in our precision measurement business and $3 million in fabricated bridge products.

Speaker 5: Both of these businesses have been experiencing increasingly difficult market conditions.

Speaker 5: As a result of our reassessment of their longer-term outlooks,

Speaker 5: These charges were required in the quarter.

Speaker 5: In addition, we recorded a $37.9 million tax valuation allowance in the quarter, fully reserving our net deferred tax asset position at year end.

Speaker 5: This valuation allowance was necessary based on an evaluation of cumulative historical evidence as required by the accounting standards.

Speaker 5: These standards preclude us from putting much weight on expected future taxable income in our assessment of the net tax asset position, thus resulting in the full valuation allowance.

Speaker 5: As our strategic transformation continues to drive growth and profitability improvements in the coming years, these tax assets, most of which have an indefinite carry forward period, are expected to provide a valuable tax shield reducing our cash tax obligations for years to come.

Speaker 5: Adjust at EBITDA and Q4 increase $4.3 million to $7.5 million, a 132.6% increase year-over-year.

Speaker 5: I'll cover the drivers of this improvement on the next slide.

Speaker 5: Fourth quarter orders totaled 137.8 million up 44.8% over the prior year.

Speaker 5: Orders improved 32.1% organically and 15.4% from acquisitions and only slightly offset by a 2.7% decline from divestitures.

Speaker 5: Fourth quarter backlog increased 62.1 million year over year due to a 22.9% organic increase and 7.4% increase from acquisitions partially offset by a nominal decline from bi-vestitures.

Speaker 5: I'll spend a minute on slide 8, which provides an overview of the drivers of our year-over-year improvement in the fourth quarter.

Speaker 5: The chart on the left it shows the improvement in sales, which reflects the notable $14.6 million organic growth in the legacy business during the quarter, representing a 12.9% increase year-over-year.

Speaker 5: The impact driven by portfolio activity added $13.6 million in sales from acquisitions.

Speaker 5: with a $4 million decline attributable to divestitures.

Speaker 5: The adjusted Ebit D.H.R. is a powerful depiction of the profitability lift we achieved in both our legacy business as well as from our portfolio moves.

Speaker 5: Adjusted EBITDA for the current year fourth quarter removes the impact of acquisition and divestiture related costs.

Speaker 5: The Van Huesco Inventory Purchase Counting and Contingent Consideration Expenses.

Speaker 5: and the fourth quarter in tangible impairment charges. Our legacy business delivered a $1.1 million increase in adjusted EBITDA

Speaker 5: representing 7.5% leverage on the incremental sales achieved in the quarter.

Speaker 5: The impact of the portfolio transformation is even more significant with a $3.2 million increase in adjusted EBITDA achieved on the net $9.6 million sales growth from M&A-related activities.

Speaker 5: Representing approximately 33% leverage on the net M&A-related sales growth.

Speaker 5: The combined result is a meaningful increase to our overall profitability.

Speaker 5: With $7.5 million in adjusted EBITDA representing a 5.5% of net sales, and nearly double the EBITDA margin reported in Q4 last year, and up 233% on an absolute dollar basis. So I naan half a y to the three and United States also the

Speaker 5: chain challenges in addition to underperforming businesses within our portfolio.

Speaker 5: The chart reflects the adjusted EBITDA margins in the first and second half of 2021 and first half of 2022 and highlights the deterioration we were seeing in our results.

Speaker 5: This situation became the burning platform for change as outlined in our refreshed enterprise strategy.

Speaker 5: We began to see the benefits from our margin recovery actions and portfolio transformation in the 2022-3rd quarter results, and this trend continued into the fourth quarter.

Speaker 5: The combined result is a 6.2% adjusted EBITDA margin for the six months ended December 31st, 2022.

Speaker 5: a step change improvement over the previous three six-month periods.

Speaker 5: These results give us confidence that our strategic transformation is on track and taking hold.

Speaker 5: Over the next three slides, I'll cover the performance of each segment starting with our rail segment on slide 10.

Speaker 5: Fourth quarter rail segment revenue increased $6.9 million a year over a year, driven by a 10.2% organic growth, partially offset by a nominal reduction associated with acquisition and by best age of your activity.

Speaker 5: Gross margins expanded by 350 basis points due to an improved margin profile with the acquisition of scratch and the divestiture of track components, coupled with volume leverage in rail products.

Speaker 5: New orders in Q4 were up nearly 26% year over year, and backlog was up 9% versus last year, with broad strength in demand across the portfolio. Turning to precast concrete on slide 11, revenue increased $16.5 million, representing an 81.3% improvement year over year.

Speaker 5: margins included a $300,000 unfavorable inventory purchase accounting adjustment which diluted segment margins by 80 basis points.

Speaker 5: Orders and backlog levels are up year over year, both from the VanHoosko acquisition and strong demand environment for products in our legacy business.

Speaker 5: And we expect this favorable trend to continue with the announced government infrastructure funding programs.

Speaker 5: For the Steel Products and Measurements Segment on Slide 12, revenues increased $800,000 or 3.6% year over year.

Speaker 5: The organic sales increase was 11 percent, offset by a 7.4 percent decrease from the sale of the piling business.

Speaker 5: Gross profit margins improved by 30 basis points, with the increase attributable to the sale of the piling business, and margin improvements in coatings and measurement, partially offset by weaker margins realized in our fabricated bridge business.

Speaker 5: Order rates in Q4 increased 95.2% while backlog increased 92.3% driven by the Codings and Measurement business unit with approximately half of the backlog increase attributable to the Summit Pipeline coding order booked in the third quarter of 2022.

Speaker 5: I'll now cover our 2022 full-year results that were selected on slide 13.

Speaker 5: 2022 sales decreased 16.1 million or 3.1 percent.

Speaker 5: The impact of divestitures drove 12.8% of the decline, partially offset by a 5.7% increase from organic sales and 4% from acquisitions.

Speaker 5: Despite the sales decline, Gross Profit for 2022 finished at $89.6 million, up $3.3 million, or $3.8% versus last year.

Speaker 5: The increase in reported gross profit was driven by the accretive impact of the portfolio changes executed as well as improvement in our legacy business as pricing and cost mitigation actions began to take hold in the second half of the year. The increase in gross margins for the full year was re-

Speaker 5: alluded 2022 reported margins by 100 basis points.

Speaker 5: Selling an administrative expenses for 2022 increased 6.7 million or 8.8 percent, representing 16.6 percent of sales for the full year up from 14.8 percent in 2021.

Speaker 5: The increase relative to sales was largely due to the expected impact of portfolio transformation activities, including $2 million in acquisition costs and a half a million dollars in Van Hussko contingent consideration, in addition to increases in personnel, travel, and professional services costs.

Speaker 5: Backlog remains near record level with a full year book the bill ratio of 1.11.

Speaker 5: A discussion of our liquidity and priority uses of cash is reflected on slide 14.

Speaker 5: I'll start by highlighting that our gross leverage ratio per our credit agreement covenant declined a half a turn in Q4 to 2.8 times, well below the 4.0 times requirement.

Speaker 5: We chose to highlight the gross leverage credit agreement covenant as we believe it's representative of our true credit leverage given the portfolio moves we've made.

Speaker 5: Recast flow generated in the quarter reduced our net debt by $5 million to $89 million at your end.

Speaker 5: Highlighting the meaningful portfolio moves we've accomplished, we've redeployed nearly $32 million in unproductive capital to three investments within our growth platforms.

Speaker 5: Scratch and IV within Rail Technologies and Vanhusko in Precast Concrete.

Speaker 5: Our attention now turns to further investing in organic growth initiatives within these platforms.

Speaker 5: You'll note that CapEx is projected to be approximately 2% of sales, which is slightly higher than our historical range of 1 to 1.5% of sales.

Speaker 5: The incremental investment is specifically tied to growth opportunities clearly in sight, and we expect the payback on these investments to be approximately two years.

Speaker 5: We will modestly allocate more capital to blend organic growth opportunities and pre-cast concrete and rail technologies.

Speaker 5: But our top priority use of cash is to continue to deliver.

Speaker 5: We've made further progress reducing our net debt in early 2023 with the February month end balance at approximately $80 million, down $9 million from the start of the quarter.

Speaker 5: We're pleased to report that we've collected an additional $3 million federal income tax refund in February , and we have additional de-leveraging projects underway.

Speaker 5: I'll remind everyone that we have approximately $96 million in federal net operating loss carry forwards available to minimize U.S. cash taxes in the future.

Speaker 5: I'll highlight that the deferred tax valuation allowance recorded in Q4 does not impact the availability of these tax credits.

Speaker 5: And lastly, our settlement obligation with Union Pacific stands at $16 million.

Speaker 5: and will be fulfilled in December of 2024, resolving in an $8 million per year boost in operating cash flow beginning in 2025.

Speaker 5: The expected improved cash flow and leverage outlook was a critical driver of the decision to authorize the $15 million stock buyback program, which John will cover in his closing remarks.

Speaker 5: In summary, we will continue to maintain a prudent, cautious, capital allocation philosophy as we execute our strategic transformation.

Speaker 5: In summary, we will continue to maintain a prudent, cautious capital allocation philosophy as we execute our strategic transformation.

Speaker 5: My closing comments refer to slides 15 and 16 covering orders, revenue, and backlog by segment.

Speaker 5: The Booktable Ratios on Slide 15 reflect the increasing strength we've seen in our business through the fourth quarter.

Speaker 5: Rail orders were up 25.9% year over year and up approximately 30% sequentially driving the robust sales performance and the rail segment in Q4.

Speaker 5: The favorable 1.05 book to bill ratio for the full year translated to a 9% increase in the rail backlog.

Speaker 5: The pre-cash concrete backlog also increased during 2022, with the favorable book to Bill Ratio at 1.04 and the addition of Van Hussko translating to increasing orders and sales each quarter throughout 2022.

Speaker 5: And the steel products and measurement order rates for the years substantially outpaced revenues largely due to the summit order booked in Q3.

Speaker 5: Their performance was a major contributor to the consolidated Book to Bill ratio of 1.11 for the full year.

Speaker 5: And lastly, our consolidated backlog on slide 16 reflects robustness across the portfolio with year-over-year growth generated in all segments.

Speaker 5: Our year end backlog remains near record levels achieved in the third quarter and is up approximately 29.5% versus this time last year.

Speaker 5: The backlog was impacted by a 22.9% organic increase.

Speaker 5: with the remaining 6.6 percent net increase due to portfolio moves.

Speaker 5: The strong order intake and backlog levels demonstrate the ongoing strength in the business and commercial markets we serve.

Speaker 5: While recessionary market conditions remain a broader macro risk, we remain optimistic in both the near and longer-term prospects for growth in our served markets and to support the announced government funding programs are expected to provide.

Speaker 5: Thank you for your time. I'll now hand it back over to John for his closing remarks.

Speaker 4: John ? Thanks Bill. Please turn the slide 18 and I'll start my closing remarks and I'll give you any more.

Speaker 6: The portfolio moves we have made.

Speaker 4: Demonstrator could move to executing the strategy investing on our growth platforms.

Speaker 4: If Bill mentioned, our backlog is near record high levels and we remain optimistic in the longer term outlook for our core and markets.

Speaker 4: namely in the rail and general infrastructure space. We continue to focus on ensuring its seamless integration of the businesses we required this past year while assessing the new market opportunity to see factquisitions open up.

Speaker 4: Now, please to say that the 2022 acquisitions have met our expectations and are accreted to the operating margins of the company.

Speaker 4: Building on these new acquisitions and moving into 2023, our attention will be turned to driving organic programs in both current and adjacent markets.

Speaker 4: made available to our strategic execution. We continue to have portfolio challenges to address, particularly in the steel products and measurement segment. As Bill mentioned, non-cash asset and pyramid charges were taken in a fabricated bridge and precision measurement businesses.

Speaker 4: both of which face weaker market demand in inflationary headwinds. As a note, we are focusing on stabilizing establishing recovery programs for these return businesses in short term.

Speaker 4: On the favorable side, we continue to see an improving outlook for our coatings business.

Speaker 4: with Q4 to rates of 30% year over year. And if some of the order booked in Q3 or last year is expected to begin delivery in 2023. session.

Speaker 4: And while recessionary risk persists in many of our industrial markets, we remain cautiously optimistic that the previously announced government infrastructure programs will provide some level support for demand of our parks and services.

Speaker 4: We continue to have line of sight to significant infrastructure projects across the Portfolio that are well aligned to our growth strategy and quotation activity remains robust.

Speaker 4: So, where the main focus on our order book execution is driving profit of building improvement programs.

Speaker 4: While ensuring their supply chains are stable and secure.

Speaker 4: Turning to slide 19, and as I mentioned in my opening comments, we established the sales and EBITDA guidance for 2023. This is the first time we've provided full year guidance since 2016, highlighting our belief that our CD transformation is on track and business prospects are improving.

Speaker 4: Respect to 2023 sales to range between $540 and $570 million with the range representing year-over-year growth of 8.5 and 14.6% respectively.

Speaker 4: There's our look assumes no portfolio action, so I will note.

Speaker 4: Adjustity but done 2023 is expected to range between 27 and 31 million with corresponding percent of sales range between 4.7 and 5.7 percent.

Speaker 4: They expected that just to be without margin range is lower than we then we see of 6.2 and a second half of 2022. But this is due to normal seasonality in the business.

Speaker 4: As a note, we will provide peer rack updates to our guidance and to your progressives. And lastly, a Board of Directors has approved a $50 million company stock buyback program.

Speaker 4: representing approximately 11% of our market cap.

Speaker 4: The three year program expires in February of 2026 and limits purchases to no more than $5 million during any trailer to a month period.

Speaker 4: The program provides an important additional lever to allocate capital strategically as cash flows and liquidity improve in the future. In closing, 2022 was a significant transition year for us during which we created strong momentum and results. As demonstrating our actions and our results, we are transforming O.B. Foster into

Speaker 4: roadmap and aspirational goals of $600 million revenue and $50 million EBITDA, as you can see on slide 20. But I'm very proud of what our employees have accomplished in such a short period of time, but also recognize these are still the early days in our transformation journey. We plan on continuing to leverage and expand the growth platforms we established in real technologies and precast concrete.

Speaker 4: and expected delivery continuing growth as we transition into 2023. At the same time, we intend to continue to drive our returns portfolios to provide cash needed to prudently invest and manage our overall capital structure.

Speaker 4: I look forward to reporting on our continued progress in 23 and thank all of our state course for their ongoing support. I'd like to end the call with a comment on safety.

Speaker 4: Safety is at the forefront of the rail industry we serve today. And our thoughts are with the people of East Palestine, Ohio, a community that's only 50 miles from where I'm speaking to you today. Safety is also a core value of the L.B. Foster Company, and I'd like to recognize Brian Freeman, who leads our Steel Products and Measurements segment. After many years with substandard performance, Brian and his team went the entire year of 2020.

Speaker 4: and your team.

Speaker 2: Operator, I'll now turn it back to you for the Q&A session. Certainly. As a reminder, to ask a question, please press star, 1, 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star, 1, 1 again. Please stand by while we compile the Q&A roster. One moment.

Speaker 2: And our first question will come from Alex, Rodiel of B. Riley Securities, your line is open.

Speaker 7: Thank you. Good morning, gentlemen. Nice quarter.

Speaker 7: Nice quarter. Thanks Alex.

Speaker 7: Couple quick questions here. What do you think a good intermediate term target is for organic growth to the business right now?

Speaker 4: Yeah, you're talking about sales, but probably yes.

Speaker 7: Yeah, I'd say total company sales, organic growth target and, you know, kind of intermediate term meaning kind of next one to two years.

Speaker 4: Yeah, I'd say, well, first of all, we're going to be focusing on the real technology precast of where the organic, the capital's going to be spent for the organic program. So we're going to be real clear line of sight where we expect to invest as well as get those returns. So, yeah, I'd say, yeah, I'd say, well, first of all, we're going to be focusing on the

Speaker 5: I think, Bill, you think we could add a little color? Yeah, yeah, I would say, you know, the the guidance that we provided for 2023 has a range of 9%, 8.5% up to 14.6.

Speaker 5: Obviously, there's a little bit of carryover effect of the acquisitions that we've done in 2022 that will manifest itself in those growth rates into 2023. And then, I think organically, we're looking at high single digits.

Speaker 5: Would be where we're where we're focused. I will highlight we mentioned in the in the.

Speaker 5: in the script that we've got some organic growth programs identified within the rail technology space and the pre-cast space, both related to the acquisitions that we've done. So the CAPEX will be a little heavier than what we've seen in the past.

Speaker 5: But we like what we see in terms of organic growth programs and we feel like we have a good opportunity to leverage those platforms given the work we've done.

Speaker 4: And then from a high level over that sort of one to two year time period, it's sort of list the largest contributors to EBITDA margin improvement. Well, again, we should go back to our aspirational goals, which I finished the presentation with, or at least in my closing comments. So we still aspirational be 600 million.

Speaker 4: by 2025. So, you know, take that number, 50 million of e but, uh, these trend this year was a big year for us, 2022, Alex. So, uh, some of the portfolio moves we made, the two size vestiges, as well as the three acquisitions, is really put us in a position where we can have a clear line of the site to hit the last operational goals.

Speaker 4: So, a good part of what we're going to be seeing here in the next few years as far as growth from top and bottom line, as well as leveraging our SGA, will come from the rail specific technology side, on the digital side, the information side, as well as in the precast side. So, we feel very good about our ability to make that happen. With or without the infrastructure spending that we're seeing today, we feel pretty good about that.

Speaker 2: of singular research, your line is open.

Speaker 7: All right. Yes. Good morning. Hi, John and Bill. Just a question on

Speaker 5: Are you seeing an uptick in new orders in rail after the Ohio train derailment and all that going on?

Speaker 4: We don't comment on anything related to that ongoing investigation, but I do want to make sure everybody understands that we have complete confidence in the MTSB as well as a higher level of respect for the NS as a customer.

Speaker 4: Having said that our activity, and I mentioned in my remarks are the bidding activity right now. In the rail space as well as across the company is very robust right now. So we don't necessarily point to anything related to what specific incident activity itself.

Speaker 4: it in general is very, very, very strong right now.

Speaker 5: Okay, thanks for that. And then your increasing guide and for 2023.

Speaker 7: How much of that would you say is related to the infrastructure bill? We've no, you know.

Speaker 4: Between Bill and I, we've been saying now for, well, since it came out, and, you know, what, 14 months ago, we said that we weren't expecting much in 2022, but we were expecting buildings to start flowing through in 2023.

Speaker 4: We've seen only a small piece of that actually hitting our order book and coming through and building. We expect some of that still yet to come. But you know a lot of us paid the where we're at right now with our near record backlog of 272 million.

Speaker 4: Chris, that's really put us in a strong position right now. So anything that's going to be coming from the infrastructure bill, I think will be, you know, gives the opportunity to maybe even, hopefully, be towards the top end of that range. But we'll see how things come together here.

Speaker 4: That's really put us in a strong position right now. So anything that's going to be coming from the infrastructure bill, I think will be, you know, give us the opportunity to maybe even. May hopefully be towards the top end of that range, but we'll see how things come together here. Batu

Speaker 5: Anything you'd like to add there? Yeah, no, I would say that the infrastructure bill activity has been increasing in terms of quotations. And we would expect to start to see some higher volumes coming through, maybe towards the back half of the year, and a continued run rate increase. I get the only other thing.

Speaker 5: I would highlight is that there are some recessionary risks out there that create disruption. Obviously, there's interest rate headwinds and what have you. So, we think these projects are going to be a little complicated. It might be a bit more delayed than what we would have otherwise seen in past periods of time.

Speaker 5: But we feel confident that we'll start to realize some more of those benefits towards the end of the year.

Speaker 5: Okay, and last one for me, the backlog and new orders increase in codeings and measurement. Can you shed some light there? How do you see that playing out in 2023? Thanks for the question. We brought up and last.

Speaker 4: quarter is that we booked this up in the Summit order, right? Which was 19 million. It was a big, big order for us to finish the year. As far as Summit itself, we are...

Speaker 4: Ourselves as well as our partner, our inline partner, CIPCO, have scaled up to produce that work. They're running both of their steel mills today. We doubled our workforce in the recent...

Speaker 4: two to three months giving us opportunities to produce that as well as we've seen a number of other pipeline coding jobs that have come through that really make us feel that we're going to have a nice year in that business in 2023 and beyond including starting to ship up to the summit order.

Speaker 8: Okay, great. Thanks to the answers. You're welcome, Chris. Thank you. And one moment for our next question.

Speaker 2: And our next question comes from Brett Kernie of Gabelli. Your line is open.

Speaker 9: Hi Brad. Hi good morning John Bill. Thanks for taking my question. Congrats on the continued operation.

Speaker 9: Excellent. I'm probably just two quick ones. The recent announcement of the FUX partnership. Can you just talk about the evolution of that? I guess what it unlocks for both of your organizations?

Speaker 4: Yeah, we've, you know, we're, you know, we're kind of the brand leader, if you will, in the Fritcha Management business. And it's about staying that cutting edge. So we've been looking for a channel partner to help us on the R&D side, the chemistry side, as well as take some of our products across the globe, specifically in Western Europe . And the FUX is a perfect partner, channel partner, as well as R&D partner to make that happen.

Speaker 4: So those lot of collaboration that's going on for the last, I'd say, year 18 months. We signed a deal with them. Not that long ago, I'm going to be heading over there shortly to meet with the seal of folks.

Speaker 4: and we're very excited about the opportunity that it's going to do. You know, make our, I guess, our footprint, if you will, and our opportunity to bring...

Speaker 4: more of the innovation technology to the real space, specifically in Western Europe . I'm very excited about that. So that's all I care to say about that today, but look for more things coming out of that collaboration partnership over the years to come. Terrific. And then maybe on the precast platform, you know, seeing solid growth.

Speaker 4: Yeah, so yeah, thanks for the question. The Legacy side has, you know, been very strong related to the Great Outdoors American Act and we expected that and we're still seeing some activity coming through that. So a lot of that's still going into state, federal, national parks. That's been good business for us. Very, very, very steady, very solid business.

Speaker 4: But we're getting excited though, we're seeing with the acquisition of Anhusco gives us the opportunity to hit adjacent spaces that we're not serving with our legacy business.

Speaker 4: That getting into the moving or securing of water, if you will. Some of the other industrial type products that go under building cities or building communities, building residential areas. We now have that opportunity to bring that into our existing facilities as well as taking that geographic expansion that we're now seeing going down the southeast.

Speaker 4: specifically in the Tennessee region between our two locations. I said earlier that the acquisition has met our expectations and I sure mean that, and many fronts, not just from the P&L point of view, but from the cultural side of the two businesses coming together and really coming together as one company. We've done a great job and our team, respectively our teams.

Speaker 4: in the facilities have done a great job of really driving the strategies as well as driving the synergies of bringing that product to the marketplace. We're looking for a lot of the good aspirational stuff that we've been talking about relative to our growth. A good part of it is going to be coming out of the precast for years to come. We're very pleased with that acquisition.

Speaker 2: Excellent. Thanks so much, John . Thanks, Brett. Have a great day. Again, ladies and gentlemen, if you would like to ask a question, please press star 1-1 on your telephone. Again, for any questions, please press star 1-1.

Speaker 4: And I'm showing no further questions. I would like to turn the call back to John for closing remarks. Thank you, Tonya. Thanks everybody for joining us today. We're glad to put a book into 2022. There's been a lot of heavy lifting. Let's talk about the folks here. Thank you.

Speaker 4: and they'll be foster a company and appreciate your support in us and patients if you will, but you know this is just beginning of what we see to be a transition year heading into some real growth and prosperity for our shareholders out there. So thanks for your support and thanks to all the employees that will be foster making this happen.

Speaker 8: Take care and have a great day. This concludes today's conference call. Thank you for participating. You may now disconnect. The conference.

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Speaker 1: The conference will begin shortly. To raise and lower your hand during Q&A, you can dial star 11.

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