Q2 2023 LB Foster Company Earnings Call

Okay.

Speaker 2: Good day and thank you for standing by. Welcome to the second quarter, 2023 LB Foster's earning conference call. At this time, all participants are in a listen only mode. After the speakers presentation, there will be a question and answer session. To ask a question during the session, you will need a press star one on your telephone. You will then hear an automated message advising you that your hand is raised. To withdraw your question, please press star one.

Good day and thank you for standing by welcome to the second quarter 2023, L. B Foster's, earning 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'll need to press star one on your telephone you will then hear an automated message advising you that your hand is raised.

Your question. Please press Star one again, please be advised that today's conference is being recorded.

Speaker 2: Please be advised to today's conference is being recorded. I would now like to hand the conference over to your speaker, Dave, definition, companies, investor relations manager. Please go ahead.

I'd now like to hand, the conference over to your Speaker today, Stephanie Smith Company's Investor Relations manager. Please go ahead.

Okay.

Speaker 3: Thank you, operator. Good morning, everyone, and welcome to LB Foster's second quarter of 2023 earnings call. My name is Stephanie Schmidt, the company's investor relations.

Thank you operator, good morning, everyone and welcome to L. B Foster's second quarter of 2023 earnings call. My name is Stephanie Smith, the Companys Investor Relations manager, our President and CEO , John Castle, and our Chief Financial Officer Bill Tallman.

Speaker 3: Our President and CEO John Castle at our Chief Financial Officer, Bill Talman, will be presenting our second-quarter operating results, market outlook, and business development.

<unk> will be presenting our second quarter operating results market outlook.

Speaker 3: We'll start the call with John providing his perspective on the company's second quarter performance. Bill will then review the company's second quarter financial results.

Shipments this morning.

We will start the call with John providing his perspective on the company's second quarter performance Bill will then review the company's second quarter financial results, John will provide perspective on market developments and company outlook in his closing comments.

Speaker 3: John will provide perspective on market developments and company outlook in his closing common. We will then open the session.

Then open the session up for questions.

Speaker 3: Today's slide 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.

Today's slide 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 L. B Foster dotcom.

Speaker 3: Our comments this morning will follow the slides in the earnings pre-

Our comments this morning will follow the slides and the earnings presentation.

Speaker 3: Some statements we are making are forward looking and represent our current view of our markets and business today.

Some statements, we're making are forward looking and represent our current view of our markets and business today.

Speaker 3: Before 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 revisions to these statements in light of new information, except as required by Securities Law.

These forward 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 revisions to these statements in light of new information, except as required by securities laws.

Speaker 3: For more detailed risks, uncertainties, and assumptions relating to our forward-looking statements, please see the disclosures in our earnings release.

For more detailed risks uncertainties and assumptions relating to our forward looking statements. 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 presentations carefully as you consider these metrics. So, with that...

We will also discuss non-GAAP financial metrics and encourage you to read our disclosures and reconciliation tables provided in today's earnings release.

Our accompanying earnings presentation as carefully as you consider these metrics.

So with that let me turn the call over to John .

Speaker 4: Thanks, Stephanie, and hello, everyone. Thanks for joining us today on our second quarter, Ernie's call.

Thank you Stephanie and Hello, everyone. Thanks for joining us today on our second quarter earnings call.

Speaker 4: It's been two years since I was appointed president, CEO , and we've got our strategic transformation here at LBFOSS.

It's been two years since I was appointed President and CEO and we began a strategic transformation here at L. B Foster.

Speaker 4: I'm very proud of the progress our team has made in such a short period of time. In summary, we completed seven strategic portfolio transactions, price of three acquisitions and four investors, in a very challenging operating environment.

And I'm very proud of the progress our team has made such a short period of time.

Summary, we completed seven strategic portfolio transaction.

The three acquisitions or divestitures.

Very challenging operating environment.

We have also implemented profitability improve initiatives across the portfolio to overcome a persistent deflationary environment.

Speaker 4: Capital allocation levers were also managed to secure a dry powder required. To capture the growing demand and robust infrastructure markets we serve.

Capital allocation levers. We're also managed to secure a dry powder required to capture the growing demand and a robust infrastructure markets we serve.

Speaker 4: As you can see on slide five, the impacts of our efforts really came through and second quarter results.

As you can see on slide five impacts of our efforts really came through in the second quarter results.

Speaker 4: We have a 12.6% year-over year with organic growth coming in at 13.3%.

Q2 sales of $148 million were up 12, 6% year over year with organic growth coming in at 13, 3%.

Speaker 4: The impact of our portfolio work and profitability initiatives resulted in a 410 basis point improvement in gross margins, finishing at 21.8% for the quarter.

The impact of our portfolio work and profitability initiatives resulted in a 410 basis point improvement in gross margins, finishing at 21, 8% for the quarter.

Speaker 4: The just evadal was 10.6 million or 7.2% of sales, up nearly 73% over last year.

Adjusted EBITDA was $10 6 million or seven 2% of sales.

73% over last year.

Speaker 4: In fact, this quarter's a jester that measured both on dollars and percent of the sales was the highest level achieved since the second quarter in 2020.

In fact, this quarter suggest EBITDA measured bolt on dollars or percent of sales was the highest level achieved since the second quarter of 2020.

Speaker 4: We continue to our portfolio work with the Investiture of the CXT Concrete Ties.

We continued our portfolio work with the divestiture of the CSD concrete ties business, which provided $2 4 million of proceeds which were used to pay down debt.

Speaker 4: which provided 2.4 million proceeds, which were used to pay down debt.

Speaker 4: expected that debt did increase 8.2 million to fund working capital needs into this.

As expected net debt did increase $8 2 million to fund working capital needs of the business.

Speaker 4: And we finish the quarter with the gross leverage ratio at 2.5 times, representing a modest increase during the quarter.

And we finished the quarter with a gross leverage ratio of two five times, representing a modest increase during the quarter.

Speaker 4: Order rates total nearly 184 million for the quarter with their booked bill ratio standing at 1.24 to 1.

Order rates totaled nearly $184 million for the quarter with a book to bill ratio standing at 1.24 to one.

Speaker 4: Despite the concrete ties to Vester, our order book stood at a new record of 290 million at quarter-and.

Despite the concrete ties divestiture, our order book stood at a new record of $290 million at quarter end.

Speaker 4: He's a result of the strength of our performance in our NMarcus and the impact government infrastructure fund.

These results speak to the strength of our performance and our end markets and the impact of government infrastructure funding.

Speaker 4: Based on strength of our performance and our favorite wall look as we reflect in the order book, we have increased our full year of ebba dog guys by one million of both ends of the range, while maintaining our sales guys despite the divest through it made in the quarter.

Based on the strength of our performance and our favorable outlook is reflected in our order book, we have increased our full year EBITDA guidance by $1 billion at both ends of the range.

Turning our sales guidance, despite the divestiture would be in the quarter.

As a seasonal working capital cycle.

Speaker 4: We expect to see improvements in free cash flow and further reduction of our leverage, which will provide the financial flexibility to fund our organic growth.

Half of the year.

You can see improvements in free cash flow and further reduction of our leverage which will provide the financial flexibility to fund our organic growth programs.

Speaker 4: And so when we are pleased with the continuing progress in executing our 3D GLA book and the results we have achieved to date and our prospects for the

In summary, we are pleased with the continuing progress in executing our strategic playbook.

The results, we achieved to date and our prospects for the future.

Speaker 4: Next bill will cover the detailed financials for Q2 and I'll come back at the end with some closing remarks on our oath.

Next Bill will cover the detailed financials for Q2 and I'll come back at the end with some closing remarks on our own.

Speaker 5: Thanks, John , and good morning, everyone. I'll begin my comments covering the consolidated highlights of our second quarter on slide seven.

Over to you Bill.

Thanks, John and good morning, everyone.

I'll begin my comments covering this consolidated highlights of our second quarter on slide seven.

Speaker 5: As always, the schedules and the appendix provide more detailed information on our financial results, including the non- GAAP measures Stephanie Mezbreff.

As always the schedules in the appendix provide more detailed information on our financial results, including the non-GAAP measures Stephanie referenced.

Speaker 5: As John mentioned in his opening remarks, the ties by vestiture was completed at the end of the second quarter. So their operating results are included in our Q2 number.

As John mentioned in his opening remarks, the ties divestiture was completed at the end of the second quarter. So their operating results are included in our Q2 numbers.

Speaker 5: Q2 results also include 2022 additions to the portfolio, Van Huesco and Scratch, but exclude the track components and chem-tech businesses that were divested over the last 12 months.

Q2 results also include 2022 additions to the portfolio Vanhoose go and scratch, but exclude the track components and Chem Tech businesses that were divested over the last 12 months.

Speaker 5: Second quarter sales were $148 million, up $16.5 million or 12.6% over last year.

Second quarter sales were $148 million up $16 5 million or 12, 6% over last year.

Speaker 5: Overall, the sales increase was driven by our legacy business. Worth organic growth coming in at 13.3%.

Overall, the sales increase was driven by our legacy business with organic growth coming in at 13, 3%.

Speaker 4: The impact of portfolio activity largely offset year over year.

The impact of portfolio activity, largely offset year over year.

Speaker 4: Pire sales volumes coupled with improvements in business mix and price realization increased gross profit by 38.5%.

Higher sales volumes, coupled with improvements in business mix and price realization increased gross profit by 38, 5%.

Speaker 4: As a result of the organic revenue growth, together with the accretive benefits of portfolio initiatives and portfolio profitability actions.

As a result of the organic revenue growth together with the accretive benefits of portfolio initiatives and portfolio profitability actions.

Speaker 4: Gross profit margins expanded 410 basis points to 21.8%.

Most profit margins expanded 410 basis points to 21, 8%.

Speaker 4: During our first quarter call back in May, we highlighted that we expected the favorable trend in margin performance realized in Q1 to continue as volumes improved in our seasonally strong second and third quarter.

During our first quarter call back in May we highlighted that we expected the favorable trend in margin performance realized in Q1 to continue as volumes improved in our seasonally strong second and third quarters.

Speaker 4: We're happy to see the results come through in the second quarter and we remain optimistic for continuing favorable trends in Q3.

We're happy to see the results come through in the second quarter, and we remain optimistic for continuing favorable trends in Q3.

Speaker 4: The $1 million transaction loss on the ties by vestiture reduced net income to $3.5 million in Q2.

The $1 million transaction loss on the ties divestiture reduced net income to $3 $5 million in Q2.

Speaker 4: However, adjusted EBITDA improved $4.5 million year over year to $10.6 million. With the EBITDA margin improving 250 basis points to 7.2 percent,

However, adjusted EBITDA improved $4 $5 million year over year to $10 $6 million with the EBITDA margin, improving 250 basis points to seven 2%.

Speaker 4: with EVA-DA operating leverage at 27.1%.

With EBITDA operating leverage at 27, 1%.

Speaker 4: It's been three years since we've seen this level of profitability from the business, which is attributable to our portfolio transformation, profitability and improvement initiatives, and robust infrastructure and mark.

It's been three years since we've seen this level of profitability from the business, which is attributable to our portfolio transformation profitability improvement initiatives and robust infrastructure end markets.

Speaker 4: John covered consolidated orders, backlog, and net debt performance in his opening remarks. And I'll provide some more additional color on these items later in the presentation.

John covered consolidated orders backlog and net debt performance in his opening remarks, and I will provide some more additional color on these items later in the presentation.

Speaker 4: We've been showing the sales and adjusted EBDA bridges on slide 8 over the last several quarters to highlight the performance within our legacy business and the benefits of our portfolio transformation.

We have been showing the sales and adjusted and adjusted EBITDA bridges on slide eight over the last several quarters to highlight the performance within our legacy business and the benefits of our portfolio transformation.

Speaker 4: The chart on the left highlights the strong organic growth realized in Q2. With the $17.6 million sales increase representing 13.3% organic sales growth.

The chart on the left highlights the strong organic growth realized in Q2 with the $17 $6 million sales increase representing 13, 3% organic sales growth.

Speaker 4: The net impact of M&A decreased revenue by $1 million, or approximately 0.8%.

The net impact of M&A decreased revenue by $1 million or approximately 0.8%.

Speaker 4: As John highlighted in his opening remarks, we have a record backlog and we expect organic growth rates to remain favorable, moving through 2023.

As John highlighted in his opening remarks, we have a record backlog and we expect organic growth rates to remain favorable moving through 2023.

Speaker 4: The net impact of M&A will present a tougher comparison in the second half due to the chemtech and ties by vestitures.

The net impact of M&A will present, a tougher comparison in the second half due to the Chem tech and ties divestitures coupled.

Speaker 4: Coupled with lapping the scratch and vanhous go acquisitions that were completed last year.

Coupled with lapping the scratch and van <unk> acquisitions that were completed last year.

Speaker 4: With our business portfolio work largely complete, we are now focused on executing the organic growth opportunities we see across the business, particularly those within our growth platforms and acquisitions.

With our business portfolio work largely complete we are now focused on executing the organic growth opportunities, we see across the business, particularly those within our growth platforms and acquisitions.

Speaker 4: The chart on the right highlights the continuing progress we've achieved in improving profitability in our legacy business with adjusted EBITDA improving $3.7 million a year over year, representing 21% operating leverage in the quarter.

The chart on the right highlights the continuing progress we've achieved in improving profitability in our legacy business with adjusted EBITDA, improving $3 $7 million year over year, representing 21% operating leverage in the quarter.

Speaker 4: M&A activities also contributed favorably to EVDA growth year over year display than that sales decline.

M&A activities also contributed favorably to EBITDA growth year over year, despite the net sales decline.

Speaker 4: The impact from M&A was somewhat tempered due to soft volumes in Van Huzco and scratching Q2. And we expect this improvement, this impact to improve in the coming quarter.

The impact from M&A was somewhat tempered due to soft volumes in van <unk> and scratch in Q2, and we expect this improvement this impact to improve in the coming quarters.

Speaker 4: Slide 9 provides an important perspective on the progress we've made in our sales growth and profitability over the last two years.

Slide nine provides an important perspective on the progress we've made in our sales growth and profitability over the last two years.

Speaker 4: The net impact of our strategy execution resulted in 12% sales growth for the trailing four quarters and the June 30th, 2023. With double-digit sales growth achieved over the last three quarters.

The net impact of our strategy execution resulted in 12% sales growth for the trailing four quarters ended June 32023, with double digit sales growth achieved over the last three quarters.

Speaker 4: Over the same time period, gross profit increased 30%, resulting in a 270 basis point improvement in gross profit margin to 19.9%.

Over the same time period gross profit increased 30%, resulting in a 270 basis point improvement in gross profit margin to 19, 9%.

Speaker 4: This achievement was despite the cross-real contract settlement charge taken last year, as well as the Van Hussko purchase accounting impact that reduced gross margin by 100 basis points during the most recently completed trailing 4-quarter period.

This achievement was despite the crossrail contract settlement charge taken last year as well as the van <unk> purchase accounting impacts that reduced gross margin by 100 basis points. During the most recently completed trailing four quarter period.

Speaker 4: In summary, we believe our business portfolio transformation, organic growth and focused profitability initiatives have resulted in a structural improvement in the gross margin profile of the business that should be sustainable with the long term, the man prospects from our infrastructure and market.

In summary, we believe our business portfolio transformation organic growth and focused profitability initiatives have resulted in a structural improvement in the gross margin profile of the business that should be sustainable with the long term demand prospects from our infrastructure end markets.

Speaker 4: Over the next three slides I'll cover our segment performance starting with the rail segment on slide 10.

Over the next three slides I'll cover our segment performance starting with the rail segment on slide 10.

Speaker 4: Second quarter, rail segment revenues were up 12 percent year over year at 91.6 million with 17 percent organic growth partially offset by the net impact of M&A.

Second quarter rail segment revenues were up 12% year over year at $91 6 million was 17% organic growth, partially offset by the net impact of M&A.

Speaker 4: Strong Organic Sales Growth, realized in both rail products and global friction management, was partially offset by continuing softness in the technology services and solutions business in the UK and the impact of the track components by best.

Strong organic sales growth realized in both rail products and global friction management was partially offset by continuing softness in the technology services and solutions business in the UK and the impact of the track components divestiture.

Speaker 4: Rail margins expanded 260 basis points to 21.7% on improved pricing and business mix across the portfolio Coupled with the favorable impact from the track components by Vest

Rail margins expanded 260 basis points to 21, 7% on improved pricing and business mix across the portfolio, coupled with a favorable impact from the track components divestiture.

Speaker 4: Partially offsetting improvements in real margins were headwinds from weakness in the U.

Partially offsetting improvements in rail margins were headwinds from weakness in the UK.

Speaker 4: Rail orders and backlog were up year over year, with new orders increasing at robust 24.8%, and backlog increasing over 6%, excluding the impact of the track components and pies by best.

Rail orders and backlog were up year over year with new orders, increasing a robust 24, 8% and backlog increasing over 6%, excluding the impact of the track components and <unk> divestitures.

Speaker 4: As reflected on slide 11, precast concrete segment revenue increased $10.3 million or 43.4% year over year.

As reflected on slide 11, pre cast concrete segment revenue increased $10 3 million or 43, 4% year over year.

Speaker 4: Revenues were up 12.8% organically, and the Van Huesco acquisition contributed $7.2 million representing growth of 30.6%.

Revenues were up 12, 8% organically and the van <unk> acquisition contributed $7 2 million representing growth of 36%.

Speaker 4: Gross margins were up 850 basis points to 22.7%. Due to improved volumes, price realization, and strong operating performance in the legacy business, as well as the accretive impact of the Van Hussko acquisition.

Gross margins were up 850 basis points to 22, 7% due to improved volumes price realization and strong operating performance in the legacy business as well as the accretive impact of the van whose scope acquisition.

Speaker 4: Orders and backlog remain robust in our pre-cast segment with Van Huesco contributing 15.8 million and 20.2 million respect.

Yes.

Orders and backlog remain robust and our free cash segment with van whose scope contributing $15 8 million and $22 million respectively.

Speaker 4: The steel products and measurement segments results on slide 12 reflect a 13.6% decrease in revenues as a result of the chemtech by best.

The steel products and measurement segments results on slide 12 reflect a 13, 6% decrease in revenues as a result of the <unk> divestiture organic growth of two 4% was realized as a result of a 93, 5% increase in protective coatings.

Speaker 4: Organic growth of 2.4% was realized as a result of a 93.5% increase in protective coating sales, partially offset by weaker volumes in fabricated steel products.

Sales, partially offset by weaker volumes and fabricated steel products.

Speaker 4: Improved gross margins, which were up 460 basis points to 21%, were driven by higher volumes in protective coatings, as well as the favorable impact of the KEMFEC by best.

Improved gross margins, which were up 460 basis points to 21% were driven by higher volumes in protective coatings coatings as well as the favorable impact of the <unk> divestiture.

Speaker 4: Orders and backlog were up 17% and 39.4% respectively, with protective coatings business recovery more than offsetting the impact of the sale of chem.

Orders and backlog were up 17% and 39, 4%, respectively with protective coatings business recovery more than offsetting the impact of the sale of Comtech.

Speaker 4: The year-to-date results on slide 13 highlight the structural and profitability improvements we've established in our business in the first half of 2020.

The year to date results on slide 13 highlight the structural profitability improvements we've established in our business in the first half of 2023.

Speaker 4: Sales are up 14.4% year over year and margins have expanded 380 basis points to 21.1% thus far in 2023.

Sales are up 14, 4% year over year and margins have expanded 380 basis points to 21, 1% thus far in 2023.

Speaker 4: Adjusted EBITDA is up over 104% with the EBITDA margin of 5.7% of 250 basis points versus last year.

Adjusted EBITDA is up over 104% with the EBITDA margin of five 7% up 250 basis points versus last year.

Speaker 4: While your-to-date operating cash flow is a use of $3.3 million due to primarily to working capital needs in the second quarter, it's favorable to last year by $10 million.

While year to date operating cash flow was a use of $3 $3 million due to due primarily to working capital needs in the second quarter.

It's favorable to last year by $10 million.

Speaker 4: And orders are up nearly 17% year-to-date due to RMNA work, the strength of our offering and

And orders are up nearly 17% year to date due to our M&A work the strength of our offering and strong end markets.

Speaker 4: Turning to liquidity and leverage metrics on slide number 14. As expected, net debt increased $8.2 million during the quarter, as we funded working capital needed to support the robust growth in sales and backlog.

Turning to liquidity and leverage metrics on slide number 14 as expected net debt increased $8 $2 million during the quarter as we funded working capital needed to support the robust growth in sales and backlog.

Speaker 4: As a result, our gross leverage ratio for our credit agreement increased slightly from 2.4 times to 2.5 times during the quarter.

As a result, our gross leverage ratio per our credit agreement increased slightly from two four times to two five times during the quarter.

Speaker 4: While free cash flow has been a use of $4.8 million a year to date, we've actually reduced our net debt by $3.4 million so far this year, as a result of our Divided Troop Pro's

While free cash flow has been a use of $4 $8 million year to date, we've actually reduced our net debt by $3 4 million. So far this year as a result of our divestiture proceeds.

Speaker 4: In fact, the divestitures improves our gross leverage ratio as they were essentially break even businesses at an EBITDA level that were dilutive to the ratio.

In fact, the divestitures improves our gross leverage ratio as they were essentially breakeven businesses at an EBITDA level that were dilutive to the ratio.

Speaker 4: We expect to generate positive free cash flow in the second half of 2023, which should allow us to further reduce our net debt.

Sure.

We expect to generate positive free cash flow in the second half of 2023, which should allow us to further reduce our net debt.

Speaker 4: As a reminder, our Union Pacific warranty settlement obligation will be fully satisfied in 2024. And we have a $100 million in federal NOLs that should minimize our cash taxes for the foreseeable future.

As a reminder, our union Pacific warranty settlement obligation will be fully satisfied in 2024, and we have a $100 million in federal Nols that should minimize our cash taxes for the foreseeable future.

Speaker 4: both of which should contribute to improving free cash flow in the near

Both of which should contribute to improving free cash flow in the near future.

Speaker 4: And with our capital-wide business model, improving profitability, and beneficial free cash flow drivers in place, we believe a favorable free cash flow inflection point is in place.

And with our capital light business model, improving profitability and beneficial free cash flow drivers in place, we believe a favorable free cash flow inflection point is eminent.

Speaker 4: In summary, we're pleased with the progress we've made reducing our net debt and leverage following the acquisitions completed last year. And further improvement remains a top priority.

In summary, we're pleased with the progress we've made reducing our net debt and leverage following the acquisitions completed last year and further improvement remains a top priority.

Speaker 4: Our capital allocation priorities are outlined on slide number 15. As I just mentioned, we continue to focus on deleverging while cautiously investing in organic growth opportunities we see in rail technologies and precast concrete.

Our capital allocation priorities are outlined on slide number 15 as I just mentioned, we continue to focus on deleveraging.

While cautiously investing in organic growth opportunities, we see in rail technologies and pre cast concrete.

Speaker 4: Capital spending is expected to run at approximately 1.5% to 2% of sales, which is slightly higher than our typically level due to the organic growth investments we see with high returns and quick payback.

Capital spending is expected to run at approximately one 5% to 2% of sales, which is slightly higher than our typically level due to the organic growth investments, we see with high returns and quick paybacks.

Speaker 4: We also continue to evaluate opportunities to return cash to share holders through our stock repurchase program, which was initiated in Q2 with a half percent reduction in the shares outstand.

We also continue to evaluate opportunities to return cash to shareholders through our stock repurchase program, which was initiated in Q2 with a 5% reduction in the shares outstanding.

Speaker 4: We continue to evaluate small tuck-in acquisitions that would extend our product portfolio within our growth platforms of precast concrete and rail technology.

We continue to evaluate small tuck in acquisitions that would extend our product portfolio within our growth platforms of precast concrete and rail technologies.

Speaker 4: And while distributing value to shareholders through a divinant is not a current priority, we're keeping it on our radar as the prospects for stronger, stable, free cash flow improves in the coming years.

And while distributing value to shareholders through a dividend is not a current priority we're keeping it on our radar as the prospects for stronger stable free cash flow improves in the coming years.

Speaker 4: My closing comments will refer to slide 16 and 17 covering orders, revenues and backlog by this.

My closing comments will refer to slides 16, and 17 covering orders revenues and backlog by business.

Speaker 4: The book to bill ratios on slide 16 reflect the continuing strength we've seen across the business with the step change increase realized in the second quarter.

The book to Bill ratios on Slide 16 reflects the continuing strength, we've seen across the business with a step change increase realized in the second quarter.

Speaker 4: The book to bill ratio over the trailing 12 months was 1.13 to 1.

The book to Bill ratio over the trailing 12 months was 113 to one.

Speaker 4: with orders outpacing sales by $70 million.

With orders outpacing sales by $78 million.

Speaker 4: The consolidated book to Bill Ratio in the second quarter was particularly strong at 1.24 to 1, which was up from 1.21 to 1 in the first quarter, with all segments increasing their order books in the quarter.

The consolidated book to Bill ratio in the second quarter was particularly strong at 124 to one which was up from one to one to one in the first quarter with all segments, increasing their order books in the quarter.

Speaker 4: And lastly, our consolidated backlog on slide 17 reflects the robustness of the commercial activity across the majority of the business and net benefits of the M&A actions completed over the last 12 months.

And lastly, our consolidated backlog on slide 17 reflects the robustness of the commercial activity across the majority of the business and net benefits of the M&A actions completed over the last 12 months.

Speaker 4: The precast concrete business backlog increase, which was up 28% over last year, is attributed to the Van Huesco acquisition, while order rates remain robust across the legacy precast business.

The precast concrete business backlog increase which was up 28% over last year is attributed to the van <unk> acquisition, while order rates remain robust across the legacy precast business.

Speaker 4: Backlaw and steel products and measurement was up nearly 40% versus last year, despite the impact of the chemtech by best.

Backlog and steel products and measurement was up nearly 40% versus last year. Despite the impact of the <unk> divestiture, highlighting the continuing improved demand in our protective coatings product line with a $30 million increase in their backlog.

Speaker 4: highlighting the continuing improved demand in our protective coatings product line with a $30 million increase in their backlog.

Speaker 4: Finally, our rail segment backlog was flat year over year at $132 million despite the divestiture of the track components and ties businesses, which reduced the order booked by approximately $8 million.

Finally, our rail segment backlog was flat year over year at $132 million. Despite the divestiture of the track components and ties businesses, which reduce the order book by approximately $8 million.

Speaker 4: The order book reduction from divestitures was offset by an increase in friction management and technology services and solutions, signaling some level of recovery in the...

The order book reduction from divestitures was offset by an increase in friction management and technology services and solutions signaling some level of recovery in the UK.

Speaker 4: In summary, our second quarter and year-to-date results highlight the momentum we're seeing in the business and reinforce our confidence in our strategic playbook.

In summary, our second quarter and year to date results highlight the momentum we're seeing in the business and reinforce our confidence in our strategic playbook.

Speaker 4: We look forward to reporting continuing progress through the balance of 2023 and beyond.

We look forward to reporting continuing progress through the balance of 2023 and beyond.

Speaker 4: And thank you for your time this morning. I'll now hand it back to John for his closing remarks. John .

And thank you for your time this morning, I'll now hand, it back to John for his closing remarks John .

Speaker 6: Thanks Bill. Please refer to slide 19 for an over your key business and market drivers underpinning our

Thanks, Bill please refer to slide 19 for an overview of key business and market drivers underpinning our outlook.

Speaker 6: We mentioned in the past week that we expected an officer government infrastructure funding programs to provide care once for our business.

We mentioned in the past week that we expect to announce the government infrastructure funding programs to provide a tailwind for our business and.

Speaker 5: And we're pleased to say that we are finally seeing some of the expected benefits coming through in our order book. Okay.

And we are pleased to say that we are finally seeing some of the expected benefits coming through in our order book I'll cover some of those details in a moment.

Speaker 5: We also remain optimistic and longer-term prospects for growth in rail technologies, particularly given emphasis on rail safety, fuel savings, and operating efficiency.

We also remain optimistic longer term prospects for growth in rail technologies, particularly given emphasis on rail safety fuel savings and operating efficiency.

Speaker 5: the UK business is going through a soft badge because a recent economic turmoil.

It's important to highlight the UK business is going through a soft patch because of the recent economic turmoil driven by high inflation in that area.

Speaker 5: Having said that, we're pleased to see the inflation rates in the UK are beginning to soften. Their order book is up 81% year over year, and with the significant pipeline opportunities, we're cautiously optimistic that it recovers...

Having said that we're pleased to see that inflation rates in the U K are beginning to soften their order book is up 81% year over year and with a significant pipeline opportunities, we're cautiously optimistic recoveries on horizon.

Speaker 5: our pre-Cathed concrete business remain strong. And this strategic acquisition of Antwhosco made just over one year ago. As bolstered at the order book, expanded the technology offering, and increased our geographic reach in pre-Cathed.

Our precast concrete business remained strong and the strategic acquisition of Ann whose scope.

Just over one year ago as bolster the order book expanded the technology offering and increase our geographic reach and precast.

Speaker 5: We also seen a partial recovery in protective coatings business with a renewed investment pipe

We also seen a partial recovery in protective coatings business with a renewed investment pipeline projects.

Speaker 5: The fame could be said to increase the emphasis on verse repairs in U.S.

The same can be said to increase emphasis on bridge repairs and U S.

Speaker 5: We believe this is a part of our broader infrastructure spending plan that puts well for a bridge forms product line now and into the

We believe this is a part of our broader infrastructure spending plan that bodes well for our bridge farm's product line now and into the future.

Speaker 5: Slide 20 reflects some of the more significant customers received. That we can broadly attribute to infrastructure spending.

Slide 20 reflects some of the more significant customers received that we can broadly attribute to infrastructure spending.

Speaker 5: Of course, not all these orders are directly associated with the US government infrastructure funding and currently in place. However significant portion can be attributed to those federal programs.

Of course, not all of these orders are directly associated with the U S government infrastructure funding in currently in place. However, significant portion can be attributed to those federal programs.

Speaker 5: Being that our business portfolios be coming more and more in infrastructure peer play. But the broad exposure to me.

Being that our business portfolio is becoming more and more in infrastructure pure play.

With our broad exposure to major infrastructure markets, we remain optimistic in the longer term prospects for continuing growth.

Speaker 5: We remain optimistic in a longer term process for continuing growth.

Speaker 5: And summary, we believe that we are in the early stages of infrastructure investment supercycle. Thanks.

In summary, we believe that we are in the early stages of infrastructure investment Super cycle.

That could provide a strong tailwind for years to come.

Speaker 5: I'll close up, prepare your comments with a perspective on your term goals to pick to that slide number 21. A slide title is innovating to solve...

I'll close our prepared comments with a perspective on our near term goals depicted on slide number 21.

Slide titled Innovating to solve global infrastructure challenges.

Speaker 5: In December of 21, we established aspirational goals of approximately 600 million.

In December of 'twenty, one, we established aspirational goals of approximately $600 million in sales and approximately $50 million of EBITDA by 2025.

Speaker 5: and approximately $50 million of you but by 2025.

Speaker 5: We're beginning to refine our outlook as the majority of our business portfolio works is behind us. And we have a clear line of sight to the organic growth and profitability drivers that we are designed, that are designed to achieve our goal.

We are beginning to refine our outlook as the majority of our business portfolio work is behind us and we have a clear line of sight to the organic growth and profitability drivers that we have designed that are designed to achieve our goals.

Speaker 5: As previously mentioned, we increased the profit of building guys for 2020.

As previously mentioned, we increased our profitability guidance for 2023, while holding the sales guidance unchanged. Despite the divestiture of the concrete tie business.

Speaker 5: While holding the sales guy to some change, despite the vesture of the concrete type.

Speaker 5: For the midpoint of our 23 guidance, our 2025 goals imply an annual sales growth rate of approximately 6%. With either the operating leverage around 30% on the sales growth over the two year period.

For the mid point of our 23 guidance, our 2025 goals imply an annual sales growth rate of approximately 6% with EBITDA operating leverage around 30% of our sales growth over the two year period.

Speaker 5: We believe these underlying roads and profitability assumptions are reasonable. Based upon three keys.

We believe these underlying growth and profitability assumptions are reasonable based upon three key factors.

Speaker 5: First, our organic growth platforms, the real technology and pre-cast, are technology-based and realize a higher margin profile within our portfolio.

First our organic growth platform is a real technology and precast are technology based and realize a higher margin profile within our portfolio.

Speaker 5: second, we expect benefit from the ongoing profit-villian proven initiatives across the portfolio to maintain and expand the margins we achieved thus far.

Second we expect benefit from the ongoing profitability improve initiatives across our portfolio to maintain an expanded margins we achieved thus far.

Speaker 5: And lastly, we expect to realize fixed cost leverage, particularly in back office, yes, GNA, with the projected volume increases over the coming years. In summary, as I mentioned, it might open it come.

And lastly, we expect to realize fixed cost leverage, particularly in back office SG&A with the projected volume increases over the coming years.

In summary, as I mentioned in my opening comments I'm very proud of what we've accomplished thus far.

But we remain very focused and.

Speaker 5: And in fact, laser focused on the growth and profitability expanded to enhance your holder value for the years to come.

In fact laser focused on the growth and profitability expansion to enhance shareholder value for years to come.

Speaker 5: Thank you for your time and continuing interest in the OB Foster. I'll turn it back to the operating.

Thank you for your time excuse me interest L. B Foster and I'll turn it back to the operator for the Q&A session.

Speaker 2: Thank you, Athera Minder. If you would like to ask a question at this time, please press star 11 on your telephone and wait for your name to be announced.

Thank you as a reminder, if you would like to ask a question at this time. Please press star one one on your telephone and wait for your name to be announced.

Speaker 2: To withdraw your question, please press star 1-1 again. Please stand by where we compile our Q&A roster.

So withdraw your question. Please press star one again, please standby, while we compile our Q&A roster.

Speaker 2: Our first question is going to come from a line of Alex Regale with Be Riley Securities Your Line of Open, please go ahead.

Our first question is going to come from the line of Alex Rygiel with B.

B Riley Securities. Your line is open. Please go ahead.

Speaker 7: Thank you very nice talk or good morning, gentlemen. Very nice quarter, congratulations.

Thank you very nice quarter, good morning, gentlemen, very nice quarter congratulations.

Speaker 7: Couple of questions here. Can you comment on the mix within backlog and the potential for price realization?

Thanks.

Couple of quick questions here.

You comment on the mix within backlog and the potential for price realizations.

Speaker 5: Well, first of all, thanks for the question, and thanks for participating today, Alex. You know, our backlog, we stands at that record, I shared with you, $290 million. We have a very nice balance between both rail and our pre-cast side right now. And then a really growing SPM, the steel products and measurement sites, specifically what we're seeing on the coding side. So it's...

Well first of all thanks for the question and thanks for participating today Alex.

Our backlog stands at a record as I shared with you at $290 million, we have a very nice balance between.

Between both rail and our free cash side right now and then a really growing SPM the steel products and measurement side, specifically, what we're seeing on the coating side.

So it's something we're.

Speaker 5: You know, we don't really have a leg or a dog in the game anymore. We feel really good about the contribution margin that's coming all the way through our backlog and something that even in the UK side, when I mentioned 81% a year over your basis, even that is growing in a nice, rate, respective to what we're going to see in future margins.

We don't really have a lag or a dog in the game anymore, but we feel really good about the contribution margins is coming all the way through our backlog in it.

And something that even in the U K side, when I mentioned, the 81% a year over year basis, even though it is.

<unk>.

Growing at a nice rate respective to what we're going to see in future margins.

Speaker 7: It as it relates to the near-term goals in 2025, gross profit of 22 to 23 percent, that's definitely kind of a step up from what you reported in this quarter of 21.8. But to me, it looks maybe a little bit conservative, so if you could comment on that. Yeah. Well, originally our aspirational goals, if you recall, were, you know, 21 percent. So for 2025.

And as it relates to the near term goals in 2025.

Gross profit of 22% to 23%.

That's definitely kind of a step up from what you reported in this quarter of 21, eight but to me it looks maybe a little bit conservative. So if you could comment on that.

Originally our aspirational goals, if you recall were 21% so for 2025.

Speaker 5: So we punched through that target already. Yeah, I guess.

We punch through that target already.

Yes, I guess.

Speaker 5: You know, we are conservative in what we do and how we do things at the company. We got a lot of shareholder value that we need there. We're in the process of restoring. So, in our process and our thinking is...

We are conservative.

What we do and how we do things at the company, we've got a lot of shareholder value than there were in the process of restoring.

So in our process and our thinking is.

Speaker 5: We hopeful that it will get there. We're sure we have confidence we can get there, but we also want to be not overshoot the target. It really give people an expectation of what we're going to deliver on it. And then if anything, hopefully go exceed those targets that we're putting out.

We hopeful that it will get there we're sure we have confidence we can get there, but we also want to be.

Not overshoot to target and really give people an expectation of where we're going to deliver on it and then if anything hopefully exceed those.

Targets that we're putting out there.

Speaker 7: And lastly, you talked about a little bit of a rebound and pipeline projects. Can you expand upon that a little bit? And is that just short-term visibility or is that intermediate and long-term visibility? Yeah, they're gonna have a really good year. Much better year than anything we've seen going back to pre-COBE, specifically in the, we're basically just a midstream company now, right? Anything we've done outside of that, we divested upstream and markets specifically. Big.

And lastly, you talked about a little bit of a rebound in pipeline projects.

Can you expand upon that a little bit and is that just short term visibility or is that intermediate and long term visibility.

They're going to have a really good year much better year than anything we've seen going back to pre COVID-19 specifically.

Basically just a midstream company an outright anything we've done outside of that we divested upstream and.

Speaker 5: The summit order, which has been our books now, for going on almost a year, which was a $19 million order, is we're excited about that opportunity coming into 2024 and beyond. So that's been short up. We're just thinking a lot of smaller projects that are being let and are happening in the mystery market right now, is keeping two mills up and running at the SIPCO, which we haven't seen in a very long period of time. So.

Market specifically.

The summit order, which has been on our books now for going on almost a year, which was a $19 million order is we're excited about that opportunity coming into 2024 and beyond so that's been shored up and we're just seeing a lot of smaller projects that are being let and.

There are happening in the midstream market right now is keeping.

Two mills.

Up and running out of SIFCO, which we haven't seen a very long period of time so.

Speaker 5: And the bidding activity is very, very strong as well. So, you know, we said partial recovery is definitely that. And hopefully that will improve in the coming months and years as well.

And the bidding activity is very very strong as well so yes.

We said partial recovery is definitely that in and hopefully that will improve in the coming months and years as well.

Excellent. Thank you very much congratulations thanks.

Thanks, Alex.

Speaker 2: Thank you and one moment for our next question.

Thank you and one moment for our next question.

Speaker 2: Our next question is going to come from the line of Brett Carney with Kabili Funds. Your line is open. Please go ahead

Our next question will come from the line of Brett Kearney with Gabelli funds. Your line is open. Please go ahead.

Speaker 8: Hi guys, good morning and congrats on the continue momentum. Thanks Brett. Thanks Brett.

Hi, guys. Good morning, Congrats on the continued momentum.

Speaker 8: Also, thank you for the slide deck accompanying earnings. Really comprehensive and helpful from an investor standpoint.

Thanks, Brett.

Yes.

Also thank you for the slide deck accompanying earnings really comprehensive and helpful from an investor standpoint.

Speaker 8: want to pick up uh... John you touched on you know the portfolio of rail technologies you have uh... you know addressing increasing focus on safety uh... fuel efficiency cost efficiency as well just kind of general sentiment you're hearing from your customers i guess on the fray and past your side uh... and your latest uh... i guess estimation anything that could still come out of congress

Yep.

I wanted to pick up John you touched on the portfolio of rail technologies you have.

Addressing increasing focus on safety fuel efficiency cost efficiency as well just kind of general sentiment youre hearing from your customers I guess on the freight and passenger side.

Your latest.

Estimation on anything that could still come out of Congress in terms of rail safety, Alright, I guess, just general even outside of that.

Speaker 8: in terms of rail safety, or I guess just general, even outside of that, trend you're seeing from customers on that piece of the portfolio.

Trends youre seeing from customers.

On that piece of the portfolio.

Speaker 5: Okay, first of all, a shout out to Stephanie here. Stephanie Schmitt, formerly Stephanie Listwalk, that has put together these materials with the ink here. She's done a fantastic job. So thanks Stephanie for all the work you do. You make our job.

Okay first of all.

Stephanie here, Stephanie Schmidt Formulates definitely list walk.

Ed has put together these materials with the team here she has done a fantastic job.

Thanks, Stephanie for all the work you do you make our jobs.

Speaker 5: much easier. As far as Congress, I can hit that first. You know, they're in recess. The bill itself has been kicked around between the House and Senate. Right now it's under rewrite related to safety measures that's going on there. I'm not going to predict what's happening there, but well, I'll tell you, there's been quite a bit of renewed interest related to our products and our technology. Unrelated to what's actually going on in Congress, specifically with our launch of our impact low detector, the Mark IV.

Much easier as far as Congress you can hit that first their recess. The bill itself has been kicked around between the house and Senate right now it's under rewrite related to safety measures is going on there I'm not going to predict what's happening there, but what I will tell you there's been a quite a bit of renewed interest related to our products and our technology.

Unrelated to what's actually going on in Congress, specifically with our launch of our will impact low detector the mark for <unk>.

Speaker 5: And so that work in the second and a half year looks very good to us and our betting activity going to next year looks very very strong.

So that work in the second of half year looks very good to us in our bidding activity going into next year looks very very strong.

Speaker 5: As far as the focus on rail, and if you look at the last quarter, the commodity car loads, especially when you look year over year, is about down 8% on the freight side.

Yeah.

As far as the focus on rail and if you look at the last quarter, the commodity carloads, especially when you look year over year is about down 8% on the freight side.

Speaker 5: So there's quite a few headwinds going on freight markets today. The flip side of the transit side, it has improved. Ridership has improved, but it's still way off the march. It's still about 25% off of pre-pandemic levels. But there's definitely a focus and interest about.

So theres quite a few headwinds going on freight markets today, the flip side of the transit side It has improved.

Ridership has improved but.

But it's still way off the Mark is still about 25% off of pre pandemic levels, but there is definitely a focus and interest about.

Speaker 5: fuel efficiency as well as having their assets live last longer as well as just the ride and comfort on the transit side. That gives us a real nice competitive niche today and visibility going forth. You're real focused on ESG that the railroads have, specifically as their fuel savings and their carbon footprint.

Fuel fish patiency as well as having their asset level last longer as well as just the right comfort on the transit side that gives us real nice competitive niche today and visibility going forth. The real focus on ESG that the railroads have specifically as their fuel savings.

With our carbon footprint, our friction management is just a perfect application for them to get their arms around something that they can do and be able to manage for years to come so.

Speaker 5: We have a lot of activity right now here in the states as well as abroad that product line and

We have a lot of activity right now here in the states as well as abroad that product lines and.

Speaker 5: This year is going to be the best year since we bought the Portek operation as far as the friction management business. So we feel very, very good as well as the customers are really sticking out the value and the importance of it, I guess, and really driving their operation ratios as well as what they can do and manage with our products and service.

This year this year is going to be the best year since we bought the <unk> operation as far as the friction management business. So we feel very very good as well as the customers are really really figuring out the value and importance of it I guess and really driving their operation ratios as well as what they can do and manage with our products and services.

Speaker 8: excellent very helpful and then on the precast side you noted I guess continued strong momentum on the legacy business I know that Businesses coming off all the demand from the American Outdoors Act Just curious kind of the end markets and continued strength you're seeing there

Yes.

Excellent very helpful and then.

On the precast side, you noted I guess continued strong momentum in the legacy business I know that.

Business is coming off.

All of the demand from the American Outdoors Act, just curious kind of the end markets and continued strength youre seeing there.

Speaker 5: Well, Legacy, first of all, I had a really bad, if you will, go back last couple of years because we had quite a bit of orders on the books that were constrained, right? So we didn't have the ability to get that price in line with cost. Our team has done a fantastic job of working the supply chain, bringing in products as well as going back and getting a market price that gives us a much better margin profile going forward.

Well the legacy first of all you had a really bad if you will go back last couple of years, because we had quite a bit of orders on the books that we're constrained right. So we didn't have the ability just to get that price in line with cost our team has done a fantastic job of.

Work in the supply chain, bringing in products as well as going back and getting a market price that gives us a competitive a much much better margin profile going forward.

Speaker 5: And then if you look at our bank, who's go operation, which I mentioned is coming out a year. In fact, this...

And then if you look at our bank <unk> operation, which I mentioned is coming out of the year in fact this.

Speaker 5: On Friday, we'll mark the one year anniversary, and a lot has changed, but one thing hasn't changed with Van Hussko, is the markets in the South and Southeast, how strong they are. They're above pre-pandemic levels, as far as housing starts, and what's going on related to the civil infrastructure work there. So we're very excited about what we have accomplished in a very short period of time and continuing to grow this pre-cast piece now into the future. Thanks, Mon. Thanks so much, John .

On Friday.

Mark the one year anniversary and a lot has changed but one thing hasn't changed with Vanhoose goes the markets in the south and southeast how strong. They are they are above pre pandemic levels as far as housing starts and what's going on related to the civil infrastructure work. There. So we're very excited about what we have accomplished in a very short period of time it continues to grow.

Pre cast base now into the future.

Excellent. Thanks, so much John .

Speaker 2: Thank you and again if you would like to ask a question please press star one one on your telephone.

Thanks, Brett.

Thank you and again, if you would like to ask a question. Please press star one on your telephone.

Speaker 2: Our next question is going to come from the line of Krista Kai with singular research. Your line is open, please go ahead.

Our next question is going to come from line of Christopher <unk> with singular research. Your line is open. Please go ahead.

Speaker 9: Yes, hi, good morning and nice quarter. Just was thanks for interested in the coding section. I wanted to see what's driving the rebound there and do you see for see that continuing?

Yes, hi, good morning, and nice quarter.

Just interested.

Interested in the coatings section I wanted to see.

What's driving the rebound there and do you foresee that continuing.

Speaker 5: Yeah, thanks, Chris. I appreciate the joining us today. And I know you guys are all busy out there. A lot of people reporting today. A lot of things going on in the marketplace. Yeah, coding is one of the things we were not really counting on, rebounding. Now, you know, specifically this year and to next year, but we're pleasantly surprised. And with the rebound that we're seeing in the midstream market.

Yes, Thanks, Chris I appreciate the <unk>.

Joining us today and I know you guys are all busy out there a lot of people reporting today and a lot of things going on in the marketplace. Yes coatings one of those things we were not really counting on rebounding.

Now.

Specifically this year into next year, but we're pleasantly surprised.

With the rebound that we're seeing in the midstream markets.

Speaker 5: We do anticipate just based on the bidding activity that will continue until next year. And of course we're hopeful that we will be producing that summit order, which I mentioned just earlier was a 19 million dollar order. Hopefully we'll get that started in the first or second quarter of next year, which we'll get with a great start to next year.

We do anticipate just based on the bidding activity that will continue into next year and of course, we're hopeful that we will be producing that summit order, which I mentioned just earlier was a $19 million order will hopefully we will get that started in the first or second quarter of next year, which will give us a great start to next year as well.

Speaker 9: Okay, sounds good. And then on slide eight, you have the changes to adjust the Bidda for M&A at 0.8. What's wondering?

Yes.

Okay sounds good and then on slide eight.

You have the changes to adjusted EBITDA for M&A.

At 0.8 was wondering.

Speaker 9: in the future, where would you guys see that as far as?

In the future where would you guys see that.

Speaker 9: that number and if you could shed some light there, that'd be great. Yeah, sure. I'll start it off with it over the bill, but you know what, I'm most excited about is that number to the left of it, that legacy number, the business, 3.7 million. So, you know, when we established our playbook, we talked a lot about where future growth is gonna come from on the M and A side and then taking that organic.

Far as that number and if you could shed some light there that'd be great.

Capture.

Started I'll flip it over to bill but.

I'm most excited about is that number to left of it that legacy number of the business $3 7 million.

We established our playbook, we talked a lot about where our future growth is going to come from on the M&A side, and then taking that organically.

Speaker 5: But I really got our legacy group really charged up where they want to be able to contribute and also be part of the future related to the growth of the company. So they've done a tremendous job of really getting engaged and really taking value and profitability. So my hat's off to the legacy group.

But that really got our legacy group really charged up where they want to be able to contribute and also be part of the future.

Related to the growth of the company so they've done a tremendous job, but really get engaged in really taken value and profitability. So my hats off to the legacy group and the M&A side of course, we've done a couple of divestitures two over in the UK and then one here in the states.

Speaker 5: And the M&A side, of course, you know, we've done a couple of investors, two over in the UK and then one here in the state.

Speaker 5: with any M&A type thing, there's that growing pains as well as getting the two, you know, the businesses, our cultures coming together into one.

With any M&A type thing there is that growing pains as well as getting the two businesses our cultures coming together into one.

Speaker 5: We made a number of really, really solid changes. The order books and all those businesses looked very, very strong. And of course, that's going to be a big part of what we do into the future.

We made a number of really really solid changes the order books and all of those businesses. We look for a very very strong and of course, that's going to be a big part of what we do into the future.

Speaker 5: including the organic programs that we have set. A lot much of that comes from our M&A work that we just done over the last two years. Bill, would you want to add anything to that? Yeah, the only thing I'd add to it, Chris, is that number itself.

<unk> the organic programs that we have set a lot much of that comes from our M&A work that we just done over the last two years Bill would you add anything to that yes, the only thing I'd add to what Chris is.

That number itself.

Speaker 4: Obviously we start to lapse the band-hoo score and the scratch acquisitions on a year-over-year basis.

Obviously, we start to lapse the man, who is go and the scratch acquisitions on a year over year basis, I think that will become of the legacy part of the legacy at that point in time, and we'll call out specific items that are specific to them in terms of growth performance.

Speaker 4: and that will become the part of the legacy at that point in time and we'll call out specific items that are specific to them in terms of growth performance

Speaker 4: but it wouldn't be part of the M&A bridge going forward. And then the other thing is that we have our track components and our chemtech divestitures and the ties to our vestiture. This remain in that column and as we mentioned in the past, those businesses were pretty close to break even level on E but DA basis.

It wouldn't be part of the M&A grids going forward and then the other thing is is that we have our.

Track components, and our Chem Tech divestitures in the ties divestiture that will remain in that column and as we mentioned in the past those businesses were pretty close to breakeven level on EBITDA basis. So we wouldn't see a significant impact there. So as we've said all along we're now turn.

Speaker 4: So, you know, we wouldn't see a significant impact there.

Speaker 4: So as we've said all along, we're now turning our attention to organic growth programs across the portfolio, particularly in precast concrete and rail technologies. And as we move forward in the future, we expect to see organic growth expansion become the primary driver for profitability going forward.

Our attention to organic growth programs across the portfolio, particularly in precast concrete and rail technologies and we expect to see organic growth expansion become the primary driver for profitability going forward.

Speaker 9: Okay, great. Yeah. So to get back on to that organic growth you're talking about

Okay, great, yes, so to get back onto that organic growth you're talking about.

Speaker 9: So should we not be expecting any more new acquisitions? And then can you talk about any more future divestitures, would that, are there more planned?

So should we not be expecting any more new acquisitions.

And then can you talk about any more future divestitures would that are there more planned.

Yes, well.

Speaker 5: As you continue to ask me these questions, I really do appreciate it. Our playbook evolves over time and our focus on our businesses changes well. You know, we have 13.3% organic growth in the core. We feel very, very good coming off with an overall growth of 12.6%.

As you continue to ask me these questions I really do appreciate it our playbook is evolves over time and our focus on our businesses change as well.

We have 13, 3% organic growth in the quarter, we feel very very good coming off what the overall growth of 12, 6% so that as well.

Speaker 5: So, you know, that is, we really got some nice programs going on right now. We're trying to save as much ripotter as we can to be able to...

We really got some nice programs going on right now and we're trying to save as much dry powder as we can to be able to.

Speaker 5: De-risk the company of not doing any large acquisitions, but being able to take something that's very, very core to us and our core markets and be able to expand it into new geographic space with new product lines.

Derisk the company of not doing any large acquisitions, but being able to take something thats very very core to us and our core competency in our core markets and be able to expand it into new geographic space with new product lines. So.

Speaker 5: Having said that is Bill and I both said much of the portfolio work that we Done over the last two years a good part of it is done except you know for what we actually anticipated to do

Having said that as bill and I, both said much of the portfolio work that we do.

Done over the last two years a good part of it is done.

For what we actually anticipated to do.

Speaker 5: But that doesn't mean that we're not keeping the shot sharp and being able to look at product lines and some other things.

But that doesn't mean that we're not keeping the sharp sharp and being able to look at product lines and some other things.

Speaker 5: to make sure that we're being competitive as possible and really looking at our economic profit and to us that's really what's gonna be driving the shareholder value now into the future. As far as acquisitions, I would think the company, we're all in the market looking at things, but as I said they'd be small and they'd be really tough in to be able to expand our product lines or move us into other geographies.

To make sure that we're being competitive as possible and really looking at our economic profit.

To us that's really what's going to be driving the shareholder value now into the future.

As far as acquisitions, Yes, I would think the company we're always.

In the market looking at things, but as I said there'll be small and they would be really tuck ins to be able to expand our product lines are moving in the other geographies.

Speaker 5: So, but think about, you know, the five that we've done.

So.

But think about the.

The five that we've done.

Speaker 5: over such a short period of time. We're also digesting what we were doing. We're keeping the culture in mind with the legacy Elby Foster company and bringing these other companies up to speed of how we do things and make sure that value is going to be there for a long period of time. With that said, thanks for attending our questions and see you again soon.

Over such a short period of time, we're also.

Digesting, what we were doing.

Keeping the culture in mind with the legacy L. B Foster company and bringing these other companies up to up to speed of how we do things.

And make sure that value is going to be there for a long period of time.

Okay, great. Thanks for your answers.

Thank you really appreciate it.

Speaker 2: Thank you and I'm showing no further questions and I'd like to hand the conference back to John Kaplan for any further remarks.

Thank you and I'm showing no further questions and I'd like to hand, the conference back to John Kessler for any further remarks.

Speaker 5: Thanks, Michelle, really appreciate it and thanks for joining us today. So I do want to mention Bill and I will be presenting at several investor conferences in the coming weeks, actually the coming months. So look for those out there, but I didn't conjection with that. We completed an update to our investor relations deck, which we will be publishing on our website by the end of this week.

Michelle really appreciate it and thanks for joining us today, so I do want to message Bill and I will be presenting at several investor conferences in the coming weeks actually the coming months.

So look for those out there, but any congestion in connection with that.

We completed an update to our Investor relations deck.

We will be publishing on our website by the end of this week.

Speaker 5: So go out and take a look at that. But in there you'll find revised documents. It will share with you our compelling investment thesis.

So go out and take a look at that but in there youll find revised documents.

I will share with you our compelling investment thesis.

Speaker 5: Our growth drivers for the business that are in place today, and it has importantly, what our capital allocation priorities will be. So you can see where we're going to spend our money and our focused increased shareholder return now into 2025 and beyond.

Our growth drivers for the business that are in place today and as importantly, what our capital allocation priorities will be so you can see where we're going to spend our money and our focused.

Increase shareholder return now.

Into 2025 and beyond.

Speaker 5: So again, thank you for your time today and your interest in Elbefaw's company. Take care.

So.

Again, thank you for your time today and your.

Your interests to L. B Foster company take care.

Speaker 2: This concludes today's conference call. Thank you for participating. You may now disconnect.

This concludes today's conference call. Thank you for participating you may now disconnect.

Okay.

[music].

Okay.

Yes.

[music].

Thank you.

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