Q4 2024 L.B. Foster Co Earnings Call

Question. During this session you will need to press star one on your telephone.

Your question has been answered and you'd like to remove yourself from the queue simply press Star One again as a reminder, today's program is being recorded and now I'd like to introduce your host for today's program Lisa Taranto Investor Relations manager. Please go ahead. Thank you operator, good morning, everyone and welcome to L. B Foster's fourth quarter.

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2024 earnings call. My name is Lisa <unk>, the Companys Investor Relations manager.

Our president and CEO, John Campbell, and our Chief Financial Officer, Bill permit will be presenting our fourth quarter operating results market outlook and business development. This morning.

Operator: As a reminder, today's program is being recorded.

Lisa Duranti: And now I'd like to introduce your host for today's program, Lisa Duranti, Investor Relations Manager. Please go ahead. Thank you, Operator.

<unk> the call with John providing his perspective on the Companys fourth quarter and full year 2020 for performance.

Lisa Duranti: Good morning, everyone, and welcome to L.B. Foster's fourth quarter of 2024 Earnings My name is Lisa Duranti, the company's investor relations Our President and CEO John Kasel and our Chief Financial Officer Bill Thalman will be presenting our fourth quarter operating results market outlook and business development. We'll start the call with John providing his perspective on the company's fourth quarter and full year 2024 performance.

Bill permit: I will then review the company's fourth quarter financial results.

Bill permit: John will discuss perspectives on market developments and company outlook in his closing comments. We will then open up the session for questions.

Bill permit: 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 Dot com.

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

William Thalman: Phil will then review the company's fourth quarter financial report.

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

John Kasel: John will discuss perspectives on market development and company outlook in his closing comments. We will then open up the session for questions.

These forward looking statements reflect our opinions only as of the date of this presentation.

Lisa Duranti: 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. Our comments this morning will follow the slides in the earnings presentation. Some statements we are making are forward-looking and represent our current view of our markets and business today.

Bill permit: Undertakes 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.

Bill permit: More detailed risks uncertainties and assumptions relating to our forward looking statements. Please see disclosures in our earnings release and presentation.

Bill permit: We will also discuss non-GAAP financial metrics and encourage you to carefully read our disclosures and reconciliation tables provided within todays earnings release and presentation as you consider these metrics.

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

John Campbell: With that let me turn the call over to John.

John Campbell: Thanks, Lisa Hello, everyone and thank you for joining us today for our fourth quarter earnings call.

Speaker Change: I'll begin my remarks on slide five covering the highlights of the quarter first of all let me say, we're very pleased with how we finished 2024 with solid profitability strong cash generation in the second half of 2024. These results are a clear indication of our strategic playbook and execution over the last three years are translating to improving.

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

John Kasel: So with that, let me turn the call over to John. Thanks, Lisa. And hello, everyone.

John Campbell: On the profit generation.

John Campbell: In the fourth quarter gross margins of 22, 3% were up 100 basis points over last year on 5% lower sales outlining the improved profitability of the portfolio adjust.

John Kasel: Thank you for joining us today for our fourth quarter earnings call. I'll begin my remarks on slide five, covering the highlights of the quarter. First of all, let me say we're very pleased with how we finished 2024 with solid profitability and strong cash generation in the second half of 2024. These results are a clear indication our strategic playbook and execution over the last three years are translating to improving economic profit generation. In the fourth quarter, gross margins of 22.3% were up 100 basis points over last year on 5% lower sales. Highlighting the improved profitability of the portfolio.

John Campbell: Adjusted EBITDA was $7 2 million was up $1 1 million or 18, 7% with lower SG&A expenses, delivering the improvement versus last year.

John Campbell: In line with our normal working capital cycle. We also delivered a strong quarter of cash generation with operating cash totaling $24 3 million.

John Campbell: Joining that $49 million was generated in the second half of 2024.

John Campbell: Cash from Q4 was deployed primarily to reduce our net debt in the quarter by $20 9 million to $44 5 million at quarter end.

John Kasel: adjusted EBITDA of $7.2 million was up $1.1 million, or 18.7%, with lower SG&A expenses delivering the improvement versus last year. In line with our normal working capital cycle, we also delivered a strong quarter of cash operating cash totaling $24.3 million, noting that $49 million was generated in the second half of 2024. Cash from Q4 was deployed primarily to reduce our net debt in the quarter by $20.9 million to $44.5 million at quarter end. As a result of lower debt levels and improving profitability, our gross leverage ratio came in at an impressive 1.2 times. This is an improvement from 1.9 times at the start of the quarter and 1.7 times from last year.

John Campbell: As a result of the lower debt levels and improving profitability.

John Campbell: <unk> leverage ratio came in at an impressive one two times.

John Campbell: This is an improvement from one nine times at the start of the quarter and one seven times from last year.

John Campbell: Highlights from the full year results are on slide six.

John Campbell: Reported sales of $538 million were down two 4% as a result of divestiture activity, while organic sales were up modestly.

John Campbell: In line with our strategy gross margins expanded 160 basis points to 22, 2% despite the lower sales.

John Campbell: <unk> gross margins increased adjusted EBITDA $1 8 million.

John Kasel: Highlights from the four-year results are on slide. Reported sales of $530.8 million were down 2.4% as a result of divestiture activity, while organic sales were up modestly. In line with our strategy, gross margins expanded 160 basis 22.2% despite the lower sales. The Approved Gross Margins Increased Adjusted EBITDA $1.8 million. to $33.6 million for the full year.

John Campbell: To $33 6 million for the full year.

John Campbell: Solid operating cash flow in the quarter allowed us to reduce debt improve leverage and make progress on our stock buyback program with two 7% of outstanding shares repurchased in 2024.

John Campbell: We also finalized the Union Pacific settlement funding in 2020 for improving cash generation by $8 million per year going forward.

Bills: All in all I'm very pleased with our team's accomplishments and the progress we have made executing our strategy in 2024, our disciplined execution of our strategic playbook has positioned us well and we're optimistic about the prospects for continued growth in 'twenty five and beyond bills will now cover the financial details for the quarter and year as well as in up.

John Kasel: Solid operating cash flow in the quarter allowed us to reduce debt, improve leverage, and make progress on our stock buyback program with 2.7% of outstanding shares repurchased in 2024. We also finalized the Union Pacific settlement funding in 2024, improving cash generation by $8 million per year going forward.

Bills: Data and our capital allocation priorities, which includes a new $40 million stock buyback program.

Speaker Change: I'll come back at the end with some closing remarks on our markets and outlook for 2025 over to you Bill.

John Kasel: All in all, I'm very pleased with our team's accomplishments and the progress we have made executing a strategy in 2024. Our discipline execution of our strategic playbook has positioned us well, and we're optimistic about the prospects for continuing growth in 2025 and beyond.

Bill: Thanks, John Good morning, everyone I'll.

Bill: I'll begin my comments covering our fourth quarter highlights on slide eight.

Bill: As always the schedules in the appendix provide more information on our financial results, including the non-GAAP reconciliations.

William Thalman: Bill will now cover the financial details for the quarter and year, as well as an update in our capital allocation priorities, which includes a new $40 million stock buyback.

Bill: Net sales of $128 $2 million declined 5% in the fourth quarter due to an organic sales decline of three 8% driven by the infrastructure segment.

William Thalman: I'll come back at the end with some closing remarks on our markets and outlook for 2021. Over to you, Bill.

William Thalman: Thanks, John.

William Thalman: Morning, everyone. I'll begin my comments covering the fourth quarter highlights on slide eight. As always, the schedules in the appendix provide more information on our financial results, including the non-GAAP reconciliation. Net sales of $128.2 million declined 5% in the fourth quarter due to an organic sales decline of 3.8% driven by the infrastructure segment. Rare organic sales were up 14.2%. Despite the lower sales, gross margins expanded 100 basis points to 22.3% due to improved profitability in the rail segment. SG&A costs in Q4 were $24.4 million, down $2.8 million from last year due to lower personnel costs and lower bad debt expense in the UK, resulting from a $1 million charge taken last year.

Bill: Rail organic sales were up 14, 2%.

Bill: Despite the lower sales gross margins expanded 100 basis points to 22, 3% due to improved profitability in the rail segment.

Bill: SG&A costs in Q4 were $24 4 million down $2 8 million from last year due to lower personnel costs and lower bad debt expense in the UK, resulting from a $1 million charge taken last year.

Bill: Restructuring cost of <unk> $5 million, and a $1 $7 million charge related to the settlement of our U S defined benefit pension plan are both excluded from Q4 adjusted EBITDA.

Bill: Adjusted EBITDA for the quarter was $7 2 million up 18, 7% versus last year due primarily to the lower SG&A expenses.

Bill: Operating cash was strong at $24 3 million up $2 6 million over last year's fourth quarter.

William Thalman: Restructuring costs of $0.5 million and a $1.7 million charge related to the settlement of our U.S. defined benefit pension plan were both excluded from Q4 adjusted EBITDA. Adjusted EBITDA for the quarter was $7.2 million, up 18.7% versus last year, due primarily to the lower SG&A expenditure. Operating cash was strong at $24.3 million, up $2.6 million over last year's fourth quarter. This year's result included a $0.8 million in restructuring cost funding and $1.8 million to terminate the U.S. defined benefit pension. I'll cover the deployment of operating cash along with some additional color on performance by segment later in the presentation.

Bill: This year's results included a <unk> 8 million in restructuring cost funding and $1 8 million to terminate the U S defined benefit pension plan.

Bill: I'll cover the deployment of operating cash along with some additional color on performance by segment later in the presentation.

Bill: Slide nine reflects the organic portfolio driven impacts on sales and adjusted EBITDA for the quarter versus last year.

Bill: We continue to realize improved profitability year over year from our portfolio work as well as improvements in our legacy businesses.

Bill: Despite the lower organic sales in the quarter, our legacy businesses contributed a strong increase in EBITDA due primarily to lower operating costs.

William Thalman: Slide 9 reflects the organic and portfolio-driven impacts on sales and adjusted EBDA for the quarter versus last year. We continue to realize improved profitability year over year from our portfolio work, as well as improvements in our legacy business.

Bill: The bridge grid deck business continues to wind down which is also contributing to improved profitability year over year.

Bill: Slide 10 highlights the favorable impact on margins over a longer time period.

Reflected here, our quarterly sales and gross profit over the last two years.

William Thalman: Despite the lower organic sales in the quarter, our legacy businesses contributed a strong increase in EBITDA due primarily to the lower operating costs. The bridge grid deck business continues to wind down, which is also contributing to improved profitability year over year.

Bill: We continue to realize improved margins year over year, driven by an improved sales mix or.

Bill: Our focus on driving organic growth within rail technologies and free cash concrete is translating into higher margins and greater economic profit generation on slightly lower sales in recent quarters.

William Thalman: Slide 10 highlights the favorable impact on margins over a longer time period. Reflected here are quarterly sales and gross profit over the last two years. We continue to realize improved margins year over year driven by an improved sales mix.

Bill: We expect this trend to continue in line with our strategic playbook with a focus on driving organic sales growth in 2025.

Bill: On the next couple of slides I'll cover the key drivers of segment results for the quarter.

William Thalman: Our focus on driving organic growth within rail technologies and precast concrete is translating into higher margins and greater economic profit generation on slightly lower sales in recent quarters. We expect this trend to continue in line with our strategic playbook with a focus on driving organic sales growth in 2025.

Bill: Starting with rail on slide 11 fourth quarter revenues totaling $79 $2 million were up 14, 2% over last year.

Bill: The entire increase was organic and driven by higher volumes and rail products friction management and total track monitoring product lines.

Bill: In addition to the higher sales rail margins of 22, 2% were up 300 basis points versus last year.

William Thalman: On the next couple of slides, I'll cover the key drivers of segment results for the court. Starting with rail on slide 11, fourth quarter revenues totaling $79.2 million were up 14.2% over last year. The entire increase was organic and driven by higher volumes in rail products, friction management, and total track monitoring products. In addition to the higher sales, rail margins of 22.2% were up 300 basis points versus last year. The improved margins were driven by the strong segment volumes, coupled with improvements in our higher margin growth platforms, as well as the ongoing recovery of our business in the UK.

The improved margins were driven by the strong segment volumes, coupled with improvements in our higher margin growth platforms as well as the ongoing recovery of our business in the UK.

Bill: Fourth quarter rail orders decreased by eight 5% driven by softer orders in rail products.

Bill: Rail backlog was down 26% year over year and large part due to our strategy.

Bill: The decline was realized entirely in rail products and our UK business, we continue to limit investment in the UK, Despite some improvement year over year.

Bill: Partially offsetting this decline was at 53, 4% increase in backlog for global friction management.

William Thalman: Fourth quarter rail orders decreased by 8.5% driven by softer orders and rail products. Rail backlog was down 26% year-over-year, in large part due to our strategy. The decline was realized entirely in rail products and our U.K. business. We continue to limit investment in the U.K. despite some improvement year over year.

Bill: Turning to infrastructure solutions on Slide 12 segment revenue decreased $16 6 million or 25, 2% due to soft market conditions in the steel products business, most notably our pipeline coating product line.

John Campbell: Respects for improvement for this product line will be covered in John's market outlook section later on.

William Thalman: Partially offsetting the decline was a 53.4% increase in backlog for global friction management.

John Campbell: Free cash concrete revenues were down three 4% versus last year with Q4 last year being an exceptionally strong for our CSP buildings product line.

William Thalman: Turning to infrastructure solutions on slide 12, segment revenue decreased $16.6 million or 25.2% due to soft market conditions in the steel products business, most notably our pipeline coating products. Prospects for improvement for this product line will be covered in John's market outlook section later on. Precast concrete revenues were down 3.4% versus last year, with Q4 last year being an exceptionally strong for our CXT buildings product. Gross margins were down 90 basis points to 22.6% due to lower sales volumes and unfavorable business mix within steel products for the core. Precast concrete margins of 25.7% were up 20 basis points versus last year.

John Campbell: Gross margins were down 90 basis points to 22, 6% due to lower sales volumes and unfavorable business mix within steel products for the quarter.

John Campbell: Free cash concrete margins of 25, 7% were up 20 basis points versus last year.

John Campbell: Infrastructure orders were $52 2 million up $6 8 million over last year with the increased realized entirely within the protective coatings product line.

John Campbell: Highlighting the improving outlook.

John Campbell: Backlog totaling $123 5 million was down $5 9 million, primarily due to a $6 $8 million decline in the bridge product lines.

John Campbell: Free cash concrete backlog increased $3 6 million versus last year.

William Thalman: Infrastructure orders were $52.2 million, up $6.8 million over last year, with the increase realized entirely within the Protective Coatings product line, highlighting the improving outlook. Backlog totaling $123.5 million was down $5.9 million, primarily due to a $6.8 million decline in the bridge product line. Precast concrete backlog increased $3.6 million versus last year.

John Campbell: I'll briefly cover the highlights for the full year on slide 13.

John Campbell: Organic sales were essentially flat for the year with the two 4% reported sales declined due to divestitures.

John Campbell: <unk> organic sales growth was a solid five 4%, but offset primarily by lower organic sales and steel products within infrastructure.

John Campbell: Gross profit improved $6 million, while gross profit margins of 22, 2% improved 160 basis points.

William Thalman: I'll briefly cover the highlights for the full year on slide 13. Organic sales were essentially flat for the year, with the 2.4% reported sales decline due to divestment. Real organic sales growth was a solid 5.4%, but offset primarily by lower organic sales in steel products within infrastructure. Gross profit improved $6 million, while gross profit margins of 22.2% improved 160 basis. As a reminder, the 2023 gross profit was adversely impacted by $4.2 million from the bridge grid deck exit. While 2024 gross profit includes a $0.8 million gain on a property sale completed in the second quarter.

John Campbell: As a reminder, the 2023 gross profit was adversely impacted by $4 2 million from the bridge grid that exit.

John Campbell: While 2024 gross profit includes a zero point $8 million gain on a property sale completed in the second quarter.

John Campbell: The balance of the margin improvement is due to business portfolio changes in line with our strategy, coupled with overall favorable business mix and pricing initiatives.

John Campbell: SG&A expenses decreased $1 2 million from the prior year.

John Campbell: The decrease is due to lower employment and bad debt expenses, partially offset by higher restructuring legal and professional service costs.

William Thalman: The balance of the margin improvement is due to business portfolio changes in line with our strategy, coupled with overall favorable business mix and pricing initiatives. SG&A expenses decreased $1.2 million from the prior year. The decrease is due to lower employment and bad debt expenses, partially offset by higher restructuring, legal, and professional services. 2024 adjusted EBITDA was $33.6 million, up $1.8 million compared to last year, driven by both improved margins and lower SG&A.

John Campbell: 2024, adjusted EBITDA was $33 6 million up $1 $8 million compared to last year, driven by both improved margins and lower SG&A expenses.

John Campbell: I'll now cover our liquidity and leverage on slide 14.

John Campbell: Net debt declined $29 million during the quarter to $44 5 million driven by the operating cash flow of $24 3 million in the fourth quarter.

John Campbell: We've consistently managed our leverage and debt levels in line with our business profitability and other capital needs.

John Campbell: We believe this is a strength of the business given our capital light business model.

William Thalman: I'll now cover our liquidity and leverage on slide 14. Net debt declined $20.9 million during the quarter to $44.5 million, driven by the operating cash flow of $24.3 million in the fourth quarter. We've consistently managed our leverage and debt levels in line with our business profitability and other capital needs. We believe this is a strength of the business given our capital light business model.

Speaker Change: As John mentioned in his opening remarks, the Union Pacific settlement was fully funded in December.

Speaker Change: The $50 million obligation paid over six years with $8 million paid in 2024 is now behind us.

Speaker Change: This resolution provides a significant boost to our financial flexibility going forward.

Speaker Change: It's worth noting that the 2020 for free cash flow adjusted for the <unk> payments and other nonrecurring items was approximately $25 million representing.

William Thalman: As John mentioned in his opening remarks, the Union Pacific Settlement was fully funded in December. The $50 million obligation paid over six years, with $8 million paid in 2024, is now behind us. It's resolution provides a significant boost to our financial flexibility going forward. It's worth noting that the 2024 free cash flow adjusted for the UP payments and other non-recurring items was approximately $25 million, representing an 8% yield at today's stock price. Our strong cash generation also allowed us to step up the pace of our stock repurchase program in 2024.

Speaker Change: Representing an 8% yield at today's spot price.

Speaker Change: Our strong cash generation also allowed us to step up the pace of our stock repurchase program in 2024.

Speaker Change: I'll cover the new stock repurchase authorization, along with other capital allocation priorities on slide 15.

Speaker Change: Our previous $15 million authorization expired at the close of last week.

Speaker Change: Since the program inception, we repurchased 435000 shares or approximately three 8% of common stock outstanding utilizing total proceeds of $9 $1 million through December of 2024.

William Thalman: I'll cover the new stock repurchase authorization along with other capital allocation priorities on slide 15. Our previous $15 million authorization expired at the close of last week. Since the program's inception, we repurchased 435,000 shares, or approximately 3.8% of common stock outstanding, utilizing total proceeds of $9.1 million through December of 2024. I should note that we also repurchased approximately 111,000 shares in 2025, bringing total repurchases under the expired authorization up to 545,000 shares, or approximately 4.8% of shares outstanding.

Speaker Change: I should note that we also repurchased approximately 111000 shares in 2025.

Speaker Change: <unk> total repurchases under the expired authorization up to 545000 shares or approximately four 8% of shares outstanding.

Speaker Change: On March three 2025, the board authorized a new three year $40 million share repurchase program that will expire at the end of February of 2028.

Speaker Change: Share repurchases are an important capital allocation priority for us, especially with the improving prospects for cash generation and current attractive valuation.

Speaker Change: We plan on continuing to invest capex in our facilities at a rate of approximately 2% of sales with a focus on organic growth initiatives within our growth platforms.

William Thalman: On March 3, 2025, the board authorized a new three-year, $40 million share repurchase program that will expire at the end of February of 2028. Share repurchases are an important capital allocation priority for us, especially with the improving prospects for cash generation and current attractive valuation. We plan on continuing to invest CapEx in our facilities at a rate of approximately 2% of sales with a focus on organic growth initiatives within our growth platform. We also continue to evaluate tuck-in acquisitions to add breadth to our overall growth platform.

Speaker Change: We also continue to evaluate tuck in acquisitions to add breadth to our overall growth platforms.

Speaker Change: And finally, we will remain prudent with our leverage and net debt levels with the goal of maintaining leverage between approximately one times and two times over the longer term.

Speaker Change: We finished 2024 with gross leverage at one two times, which was a low point in recent years.

Speaker Change: Our working capital needs are greatest in the first half of the year and our debt levels and leverage will be elevated during this period.

William Thalman: And finally, we will remain prudent with our leverage and net debt levels with a goal of maintaining leverage between approximately one times and two times over the longer term. We finished 2024 with gross leverage at 1.2 times, which was a low point in recent years. Our working capital needs are greatest in the first half of the year, and our debt levels and leverage will be elevated during this period. However, we've consistently demonstrated that we can manage through these normal seasonal cycles and maintain our financial flexibility while funding other capital allocation priorities.

Speaker Change: However, we've consistently demonstrated that we can manage through these normal seasonal cycles and maintain our financial flexibility while funding other capital allocation priorities.

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

Speaker Change: The book to Bill ratio at the end of Q4 was <unk> 95 to one up slightly from last quarter.

Speaker Change: Rail order rates have begun to recover with the trailing 12 month book to Bill ratio at <unk> 94 to one including a three 2% increase in friction management orders in Q4.

William Thalman: My closing comments will refer to slides 16 and 17, covering orders, revenues, and backlogs by business. The book-to-bill ratio at the end of Q4 was 0.95 to 1, up slightly from last quarter. Rail order rates have begun to recover with the trailing 12-month book-to-bill ratio at 0.94 to 1, including a 3.2% increase in friction management orders in Q4. Higher orders across the steel products and precast concrete businesses drove the improved infrastructure ratio at 0.97 to 1. Steel product orders were up 65.8% with strong intake levels in protective coating. Precast concrete orders were also up 1.6% in the fourth quarter.

Speaker Change: Higher orders across the steel products and free cash concrete businesses drove the improved infrastructure ratio at <unk> 97 to one.

Speaker Change: Steel product orders were up 65, 8% with strong intake levels in protective coatings.

Speaker Change: Free cash concrete orders were also up one 6% in the fourth quarter.

Speaker Change: And lastly, the consolidated backlog, reflecting on slide 17 was down $28 million or approximately 13% from the record high levels seen last year with both segments experiencing declines.

Speaker Change: It should be highlighted that the lower backlog and related book to bill ratio below one are in part due to our strategic playbook.

Speaker Change: The rail segment backlog is down $22 million.

William Thalman: And lastly, the consolidated backlog reflected on slide 17 was down $28 million, or approximately 13% from the record high levels as seen last year, with both segments experiencing decline. It should be highlighted that the lower backlog and related book-to-bill ratio below 1 are in part due to our strategic playbook. The rail segment backlog is down $22 million. Over half of the decline is in our U.K. business as we continue to scale back initiatives in the U.K. market in line with our strategy. The balance of the decline is in our rail products business, in part due to the lower market steel prices.

Speaker Change: Over half of the decline is in our UK business as we continue to scale back initiatives in the U K market in line with our strategy.

Speaker Change: The balance of the decline is in our rail products business in part due to the lower market steel prices.

Speaker Change: Backlog for the friction management product line was up $3 8 million or 53, 4%.

Speaker Change: Infrastructure backlog is down $5 9 million or four 6% with the entire decline due to steel products precast concrete backlog improved $3 6 million or four 6%.

Speaker Change: The $9 $5 million decline in steel products backlog is due to lower demand levels across the business unit as well as $2 7 million from the product line exit activities.

William Thalman: Backlog for the friction management product line was up $3.8 million or 53.4%. Infrastructure backlog is down $5.9 million, or 4.6%, with the entire decline due to steel products. Pretty Cast Concrete backlog improved $3.6 million or 4.6%. The $9.5 million decline in steel products backlog is due to lower demand levels across the business unit, as well as $2.7 million from the product line exit.

Speaker Change: In summary, despite the lower backlog levels, we remain optimistic in the outlook for profitable growth with our focus on driving demand generation and our growth platforms, coupled with an expected recovery in our protective coatings business, which will John will cover in his closing remarks.

Speaker Change: Thanks for the time this morning, I'll now hand, it back to John.

Speaker Change: Thanks, Bill I'll begin my closing remarks by covering the near term outlook for our key end markets on slide 19.

William Thalman: In summary, despite the lower backlog levels, we remain optimistic in the outlook for profitable growth with our focus on driving demand generation in our growth platform.

Speaker Change: Phil mentioned, our overall backlog is down 13% versus last year.

Speaker Change: So let me unpack that a bit more to begin with over half of the backlog decline is due to our continued strategic playbook actions as we focus on expanding our more profitable growth programs eliminated or scale back parts of the business that consumes working capital that are not generating economic profit that we had.

John Kasel: Coupled with an expected recovery in our protective coatings business, which will John will cover in his closing remarks.

John Kasel: Thanks for the time this morning.

John Kasel: I'll now hand it back to John. Thanks, Bill.

John Kasel: I'll begin my closing remarks by covering the near-term outlook for key end markets on slide 19. Bill mentioned that our overall backlog is down 13% versus less. So let me unpack that a bit more.

Speaker Change: I'd like to see.

Speaker Change: In our core growth areas backlog is up year over year in friction management precast concrete 53, 4% and four 6% respectively.

Speaker Change: Total track monitoring backlog is down versus last year, we're seeing increase in quoting activity that should translate into order book improvement in this product line.

John Kasel: To begin with, over half of the backlog decline is due to our continued strategic playbook actions as we focus on expanding our more profitable growth programs and eliminating or scale back parts of the business that consume working that are not generating economic profit. In our core growth areas, backlog is up year over year and friction management precast concrete 53.4% and 4.6% respectively. And while total track monitoring backlog is down versus last year, we're seeing an increase in courting activity that should translate into order book improvement in this product. These trends should translate into improved sales efficiency continuing to 2025.

Speaker Change: These trends should translate into improved sales efficiency continuing into 2025.

Speaker Change: As a reminder, we had an exceptionally strong first quarter last year, particularly in our rail segment, which is normally softer at the start of the year due to adverse weather conditions.

Speaker Change: With the 13% lower backlog this year and the volatile macro environment.

Speaker Change: We expect to start to 2025 to be softer versus last year.

Speaker Change: However, we believe demand from our core end markets should continue to support growth over the medium and long term cycles.

With the increasing focus in Brazil on safety operating efficiency and reliability.

John Kasel: As a reminder, we had an exceptionally strong first quarter last year, particularly in our rail segment, which is normally softer at the start of the year due to adverse weather. But the 13% lower backlog this year and the volatile macro environment, we expect to start to 2025 to be softer versus last year. However, we believe demand from our core end markets should continue to support growth over the medium and long term cycle. With the increasing focus in rail on safety, operating efficiency, and reliability, we expect steady demand in our rail segment to continue, especially for rail technologies-oriented elements of the portfolio.

Speaker Change: We expect steady demand and a real segment to continue especially for rail technologies when each of the elements of the portfolio.

Speaker Change: With the current activities in Washington D. C. We are monitoring the status of the government funding programs previously approved supporting investment in rail infrastructure.

Speaker Change: Our markets are also absorbing the threat of tariffs, particularly related to steel and we are taking steps to align supply chain to build in flexibility where possible to navigate the choppy conditions that may be ahead.

Speaker Change: For our infrastructure business, we see a couple of favorable trends worth highlighting.

Speaker Change: As mentioned before precast concrete backlog is up and we continue the ramp fulfillment capacity in Tennessee, and Florida operations.

John Kasel: With the current activities in Washington, D.C., we are monitoring the status of the government's funding programs previously approved supporting investment in rail Our markets are also absorbing the threat of tariffs, particularly related to steel, and we are taking steps to align supply chain to build in flexibility where possible to navigate the choppy conditions that may be ahead.

Speaker Change: Construction demand in these markets continues to be robust and we believe the growth drivers will remain largely intact. The commissioning of our central Florida facility remains on track and we're seeing interest continue to grow and our <unk> system solution.

Speaker Change: We expect production to begin in this facility by the end of the first quarter with initial orders already in hand.

John Kasel: For infrastructure business, we see a couple favorable trends worth highlighting. As mentioned before, precast concrete backlog is up, and we continue to ramp fulfillment capacity in Tennessee and Florida operations. Construction demand in these markets continues to be robust, and we believe the growth drivers remain largely intact. The commissioning of our Central Florida facility remains on track, and we're seeing interest continue to grow in our viral cast wall system solution. We expect production to begin in this facility by the end of the first quarter with initial orders already in place. Also within infrastructure, the renewed interest in U.S.

Speaker Change: Also within infrastructure the renewed interest in U S oil and gas production is translating to increasing demand and favorable outlook for our pipeline coating product lines. During the protective coating orders were $8 6 million in Q4 up from $1 4 million last year.

Speaker Change: As you recall this product line has been depressed over the last four years and we're optimistic that the favorable demand development will continue throughout 2025.

Speaker Change: In summary, as I mentioned earlier.

Speaker Change: While we expect the start to 2025 to be a bit softer than last year. We believe we are well positioned to benefit from infrastructure based investment plans for years to come.

John Kasel: oil and gas production is translating to increasing demand and favorable outlook for our pipeline coating products. noting that protective coding orders were $8.6 million Q4, up from $1.4 million last year. As you recall, this product line has been depressed over the last four years, and we're optimistic that the favorable demand development will continue throughout 2025.

Speaker Change: On slide 20, you'll note in our investment thesis remains unchanged as we move into 2025 the.

Speaker Change: The strategic steps, we've taken to reposition our portfolio continuing to manifest improved sales efficiency and economic profit generation.

John Kasel: In summary, as I mentioned earlier, while we expect the starts of 2025 to be a bit softer than last year, we believe we are well positioned to benefit from infrastructure-based investment plans for years to On slide 20, you'll note our investment thesis remains unchanged as we move into 2025. The strategic steps we've taken to reposition our portfolio continue to manifest and improve sales efficiency and economic profit generation. As a result of our strategic choices, we've been able to simplify the business portfolio and narrow our investment and grow platforms of rail technology. The multiple year infrastructure investment super cycle we expect in the coming years should translate to steady to robust growth in our plant.

Speaker Change: As a result of our strategic choices, we have been able to simplify the business portfolio and narrow and investment in growth platforms, our rail technologies and pre cast concrete.

Speaker Change: The multiple year infrastructure investment Super cycle, we expect in the coming years should translate to steady to robust growth in our platforms.

Speaker Change: Our strategy execution, along with our capital light business model continues to drive strong cash generation, which should expand further in 2025 with the completion of Union Pacific settlement payments behind Us and of course improved profitability outlook.

Speaker Change: And finally, we continue to allocate capital in a disciplined conservative manner to maintain financial flexibility, while also driving growth and shareholder returns.

Speaker Change: In summary, we are confident that our strategy is sound and our investment thesis anchored by these four pillars is compelling.

John Kasel: Our strategy execution, along with our capital light business model, continues to drive strong cash generation, which should expand further in 2025 with the completion of the Union Pacific settlement payments being and of course Improved Profitabil And finally, we continue to allocate capital in a disciplined, conservative manner to maintain financial flexibility, also driving growth and shareholder In summary, we're confident that our strategy is sound and our investment thesis anchored by these four pillars is compelling.

Speaker Change: And as a result of that we have authorized a new three year $40 million of company stock repurchase program.

Speaker Change: I'd like to close today's call by covering our 2025 financial guidance found on slide 21.

Speaker Change: As you May recall, we announced a refresh strategy in December of 2021 established aspiration goal as you see here for 2025.

Speaker Change: We made significant progress through 2024, and our guidance for 2025 us within striking distance of the goals, we established over three years ago.

John Kasel: And as a result of that, we have authorized a new three-year, $40 million company stock repurchase.

Importantly, when these goals were established in 2021, the contemplated significantly more risky portfolio changes and we completed.

John Kasel: I'd like to close today's call by covering our 2025 financial guidance, following down slide 21. As you may recall, we announced our refresh strategy in December of 2021 and established aspirational goals you see here for 2025. We made significant progress through 2024 and our guidance for 2025 is within striking distance of the goals we established over three years ago. And importantly, when these goals were established in 2021, it contemplated significantly more risky portfolio changes than we completed. What we realized along the way is our portfolio as it exists today, after nine transactions completed over the last three years, can deliver the goals we established without the higher risks, namely capital-intensive acquisitions.

Speaker Change: What we realized along the way as our portfolios exist today after nine transactions completed over the last three years can deliver the goals, we established without the higher risk, namely capital intensive acquisitions, the mid points of our sales and EBITDA guidance for 2025 represent a reasonable five 5% organic sales growth.

Speaker Change: But the more robust, 34% adjusted EBITDA growth driven by sales mix and leverage SG&A.

Speaker Change: Of course, M&A as an important capital allocation priority for us and we continue to evaluate the portfolio and opportunities for tuck in acquisitions aligned with our growth platforms. The luxury remind you that our current focuses is driving organic growth programs, which should continue to accelerate our profitability expansion in 2025 and beyond.

John Kasel: The midpoints of our sales and EBITDA guidance for 2025 represent a reasonable 5.5% organic sales growth, with a more robust 34% adjusted EBITDA growth driven by sales mix and leveraged SG&A. Of course, M&A is an important capital allocation priority for us, and we continue to evaluate the portfolio and opportunities for tuck-in acquisitions aligned with our growth. I'd love to remind you that our current focus is driving organic growth. which should continue to accelerate our profitability.

Speaker Change: And lastly, while the current environment is a bit choppy. We believe these conditions will stabilize in the much needed infrastructure investment will drive demand and growth in our markets.

Speaker Change: In closing I'd like to highlight that 2024 represent the best safety year the company has ever seen.

Speaker Change: We are devoted to nurturing our culture of care by taking proactive measures to emphasize the safety and wellbeing of our employees and communities our employees understand the responsibility of making choices that will safely and positively impact themselves and others by making safety a priority.

John Kasel: And lastly, while the current environment is a bit choppy, we believe these conditions will stabilize, and the much-needed infrastructure investment will drive demand and growth in our market.

Speaker Change: In this environment together, we achieve more and drive positive change.

Speaker Change: So with that important closing known statement on safety I'm very pleased with our team's accomplishments over the last three years and look forward to continuing the journey in 2025.

John Kasel: In closing, I'd like to highlight that 2024 represents the best safety year the company has ever had. We are devoted to nurturing our culture of care by taking proactive measures that emphasize the safety and well-being of our employees and communities. Our employees understand the responsibility of making choices that will safely and positively impact themselves and others by making safety a priority. In this environment together we achieve more and drive positive change.

Speaker Change: Thank you for your time and continuing interest in L. B Foster company I'll turn it back the operator for the Q&A session.

Speaker Change: Certainly and Thats a reminder, ladies and gentlemen, if you do have a question at this time. Please press star one on your telephone.

Speaker Change: First question comes from the line of.

John Kasel: So with that important closing note and statement on safety, I'm very pleased with our team's accomplishments over the last three years, and look forward to continuing the journey in 2025.

Speaker Change: Julio Romero from Sidoti and company your question. Please.

Julio Romero: Great. Thanks, Hey, good morning, John and Bill Thanks for taking my questions.

John Kasel: Thank you for your time and continuing interest in L.B. Foster Company.

Speaker Change: Thanks for joining us.

Operator: I'll turn it back to the operator for the Q&A. Certainly, and as a reminder, ladies and gentlemen, if you do have a question at this time, please press star 1-1 on your telephone.

Julio Romero: Absolutely good to be here.

Speaker Change: My first question is on the 2025 guidance ranges for sales and EBITDA.

Speaker Change: That implies sales growth of about six about five 5% the sales midpoint and 34% the EBITDA midpoint.

Julio Romero: Our first question comes from the line of... Julio Romero from Sid Doty and Company. Your question, please. Great, thanks. Hey, good morning, John and Bill. Thanks for taking questions. Thanks for joining us. Absolutely. Good to be here.

Speaker Change: Just speak to the puts and takes that could get you to the high and low end of your ranges.

Speaker Change: Yeah, well, obviously, what's going on in the markets today is obviously, a little choppy. So we've got to kind of fight our way through that but we feel very very strong as where we've really been pivoting. The company in the last couple of years as with technology innovation.

John Kasel: My first question is on the 2025 guidance ranges for sales and EBITDA that implies sales growth of about 5.5% at the sales midpoint and 34% at the EBITDA midpoint. If you could just speak to the puts and takes that could get you to the high and low end of your range. Yeah, well, obviously, what's going on the markets today is obviously a little choppy. So we got to kind of find our way through that. But where we feel very, very strong is where we've really been pivoting company in the last couple years is with technology innovation.

Speaker Change: Specifically in our rail side.

Speaker Change: So our condition monitoring business that we have which is with the wild.

Speaker Change: Applications that we have in the.

Speaker Change: And the Rockville applications and soon hopefully be announced other products. It's really gives you the opportunity to uplift or not.

Speaker Change: Not just our sales activities Julio but it's also the margins that come with us. So we're really feeling good about.

Speaker Change: As the year progresses, and all the work that we did last year with their managing our SG&A cost as you recall, we did a 7% reduction and really for US. It was the back office support so we're going to see some nice leverage with sales and profitability for the balance of the year. So we're going to land probably somewhere in between there.

John Kasel: specifically on our rails. or condition monitoring business that we have, which is with the wild applications that we have. and the Rockfall applications, and soon to hopefully be announced other products, it really gives the opportunity to uplift not just our sales activities, but it's also the margins that come with that. So that's what we're really feeling good about. as the year progresses and all the work that we did last year with managing our SG&A program. As you recall, we did a 7% reduction and really most of it was the back office support. So, we're going to see some nice leverage with sales and profitability for the balance of the year.

Speaker Change: But where we feel the best about is is that revenue that we're seeing.

Speaker Change: In the coming months. This was going to continue maintain those nice profitability margins were over 22% of oil just a few years ago, we're struggling trying to get to 20%.

Speaker Change: So we've done a lot of hard work and Thats a lot of it related to the technology innovation that we brought we're bringing to the marketplace today.

John Kasel: So, we're going to land probably somewhere in between there, but what we feel the best about is the revenue we're seeing in the coming months is going to continue to maintain those nice profitability margins. You know, we're over 22% of what we own. Just a few years ago, we were struggling trying to get to 20%. So we've done a lot of hard work, and a lot of it's related to technology innovation that we brought to the market.

Speaker Change: Excellent great context, there and then.

Speaker Change: And the <unk>.

Speaker Change: The wheel impact low detection systems can you maybe just talk about what can drive increased market adoption.

Speaker Change: Some of those offerings within the rail segment, there little techie here.

Speaker Change: Strike monitoring et cetera, and does the recent transportation incidents that are kind of in the headlines call attention.

Speaker Change: Yes, great customers for the need to prioritize safety.

Speaker Change: In my remarks, I talked about the rail space is operating safer and more reliable.

John Kasel: Excellent. Great context there.

John Kasel: And then, you know, you mentioned the wheel impact load detection systems. Can you maybe just talk about what can drive increased market adoption of some of those offerings within the rail segment? They're a little techier, you know, strike monitoring, et cetera. And does the recent transportation incidents that are kind of in the headlines call attention? Yeah, so in my remarks here, I've talked about the rail space is, you know, operating safer and more reliable. And that's what this stuff does. It gives them the opportunity to really understand their relationship, what's happening with the rail cars and what's going on with the track conditions themselves.

Speaker Change: What the stuff does it gives them the opportunity really understands their relationships, what's happening with the railcars.

Speaker Change: And what's going on the track conditions themselves. So if there's an issue gives them that early warning indication of.

Speaker Change: Being able to do something so they can really focus on the velocity.

Speaker Change: And their distance between the trains themselves to dwell time.

Speaker Change: So much of the devices are in the marketplace today really are something that.

Speaker Change: Signals something of that.

Speaker Change: Effect or something has already occurred or.

Speaker Change: Our product sales with early detection warnings. So the railroads have really picked up on the <unk>. We have the largest installed base here in North America of this product line and we're really excited about the opportunities that we see a continued to increase the installed base.

John Kasel: So if there is an issue, it gives them that early warning indication of being able to do something. So they can really focus on their velocity and their distance between the rail cars. Between the trains themselves. So much of the devices that are in the marketplace today really are something that. The Railroads have really picked up on this. You know, we have the largest install base here in North America of this product line, and we're really excited about the opportunities that we see of continuing to increase that install base. with the introduction of our new Mark IV product that we brought to the marketplace last year.

Speaker Change: With the.

Speaker Change: With the introduction of our new Mark for product that we brought to the marketplace last year. So things are looking.

Speaker Change: Very well there.

Speaker Change: Our customers really understand the value, we bring to them today of helping them run more effectively and efficiently so going back to my earlier comments. When you see these uplift to margins. This is a good example of product lines that we're bringing in that will give us an opportunity to really change our portfolio as we move forward and more.

Speaker Change: Profitability comes with that.

John Kasel: Things are looking very well there because our customers really understand the value we bring to them today of helping them run more effectively and efficiently. So, going back to my earlier comments, when you see these uplifts and margins, this is a good example of product lines that we're bringing that will give an opportunity to really change our portfolio as we move forward and more profitability comes with it.

Speaker Change: Very helpful. One more for me and then ill hop hop into queue.

Speaker Change: Just on the free cash flow just now that the Union settlement is in the rearview just whats the biggest swing factor to your cash flow going forward. Yes. So we got 20 to 30 and we ended up with 22. This year right and I think at one time, Bill and I were talking about zero defy if at all and we really really had great.

Speaker Change: Working capital performance and just managing cash in the second half specifically in the fourth quarter. This company does excellent job operating people have done a really really good job for many many years.

Julio Romero: Very helpful. One more for me and then I'll hop in the queue.

John Kasel: Just on the free cash flow, now that the union settlement is in the rear view. What's the biggest swing factor to your cash flow going forward? Yeah, so we got 20 to 30 and we ended up with 22 this year, right? And I think at one time Bill and I were talking about zero to five, you know, and we really, really had great working capital performance and just managing cash in the second half, specifically in the fourth quarter. This company does an excellent job. Operating people have done a really, really good job for many, many years of really getting after cash, cash generation.

Speaker Change: Really getting after cash cash generation and I know thats, one of the things that excites investor buy but there are some choppiness that comes with it too.

Speaker Change: We see an uplift and we're going to have that in Q2 and Q3 related to some working capital buys that we need to do right. So we've got quite a bit of work coming in and what I didn't mention before is all the infrastructure work that we have.

Speaker Change: So if you just look at what's going on in precast today, and our continued expansion of our legacy work as well as what's going on in Tennessee, and now with our new operation in Florida, We're going to have to fund those organic programs with working capital. So we're going to have to manage that cash.

John Kasel: And I know that's one of the things that excites the investor by. But there's there's some choppiness that comes with it, too, as we see an uplift and we're going to have that in Q2 and Q3 related to some working capital buys that we need to do. Right. So we've got quite a bit of work coming. And what I didn't mention before is all the infrastructure work. So, if you just look at what's going on in precast today and our continued expansion of our legacy work as well as what's going on in Tennessee, and now with our new operation in Florida, we're going to have to fund those organic programs with working capital, so we're going to have to manage that cash.

Speaker Change: The cycle will look similar to what we saw last year with significant improvement towards the end of the year as we manage the.

Speaker Change: Closer to the year.

But with a union Pacific behind Us and that was six years in the making of a <unk>.

Speaker Change: Staying close to them managing the settlement payments, but I will tell you. What we came out of that a much better company L. B Foster and I think Union Pacific has also recognized the value we brought to them in the business today is just better it's ever been so we're looking for not just what we've done in the past with him but how.

John Kasel: And I think the cycle will look similar to what we saw last year with significant improvement towards the end of the year as we manage the close of the year. But with the Union Pacific behind us, that was six years in the making of staying close to them, managing the settlement payments, but I'll tell you what, we came out of that a much better company, LB Foster, and I think Union Pacific has also recognized the value that we brought to them, and the business today is as better as it's ever been, so we're looking for not just what we've done in the past with them, but how do we continue to grow that business, and really two different companies than what we were six years ago.

Speaker Change: We continue to grow that business.

Speaker Change: Really two different companies and where we were six years ago.

Speaker Change: So yes.

Speaker Change: We're mindful of what's going on with cash flow.

Speaker Change: We like the fact that we hit a one two times at the end of the year up from one seven times, where we started.

Speaker Change: Our year over year and $1 nine to start of the quarter. So that's something that is really a strong lever for us in the company of keeping in front of us and continue to.

Speaker Change: Manish and the cash we something that.

John Kasel: So, you know, we're mindful of what's going on with cash flow. We like the fact that we hit it 1.2 times at the end of the year, from 1.7 times where we started, or a year over year, and 1.9 at the start of the quarter. So that's something that is really a strong lever for us in the company of keeping that in front of us and continue to manage and have the cash be something that's For more information visit www.FEMA.gov is something that's very, very important to us, as well as continuing with the stock buyback, right?

Speaker Change: Its something thats very very important to us as well as continuing with the stock buyback right. So that's the thing that we always have to manage our way through there. We're very excited about this three year $40 million.

Program continuing to invest in the company and purchase back the shares so thats, how strong we feel about where we're at today and more importantly, where we're adding and the cash will be reflective of that as well.

Speaker Change: Excellent thanks, very much I'll pass it on.

Julio Romero: Thank you Julio.

Speaker Change: Thank you and our next question comes from the line of.

John Kasel: So, that's the thing that we always have to manage our way through there. We're very excited about this three-year $40M. program of continuing to invest in the company and purchase back these shares. That's how strong we feel about where we're at today and more importantly, where we're heading, and the cash will be reflective of that as well.

Chris Sakai: Chris Sakai from.

Chris Sakai: Singular research your question please.

Speaker Change: Yes, Hi, good morning, John and Bill Hi, Chris Hey, Chris.

Chris Sakai: So can.

Chris Sakai: Can you help me understand I mean, with these new steel tariffs coming on.

Julio Romero: Excellent. Thanks very much. I'll pass it on. Thank you, Julio.

Chris Sakai: How will this affect your backlog going for how should we look at that.

Chris Sakai: Thank you, and our next question comes from the line of... Chris Sakai from Singular Research. Your question please. Good morning, John and Bill. Hi, Chris. So, can you help me understand, I mean, with these new steel tariffs coming on, how will this affect your backlog going forward? How should we look at that? Well, the backlog's intact. We feel good about that, right?

Speaker Change: Well, the backlogs and Jack we feel good about that right and the nice thing is we've seen these tariffs before Chris I really appreciate the question back.

Chris Sakai: Back in 2017 with the $2 32 tariffs.

Chris Sakai: So we've been down this road before and our relationships with our domestic steel mills is excellent.

Chris Sakai: So.

Chris Sakai: The good news for L. B Foster and divestitures at all we foster as we pretty much out.

Chris Sakai: But what we need to get we have those quantities tons pretty much allocated and.

John Kasel: And the nice thing is, you know, we've seen these tariffs before, Chris, and I really appreciate the question, you know, back in 2017 with the 232 tariffs. So, we've been down this road before and, you know, our relationships with our domestic steel mills is excellent. So, the good news for L.B. Foster and the investors at L.B. Foster is, you know, we pretty much have what we need to get. We have those quantities and tons pretty much allocated and going to be sitting there for us this year. The question is, where does the price flow through and what does the demand look like on these mills, really, to other product lines?

Chris Sakai: Couldnt be sitting there for us this year the questions, whereas the price flow through.

Chris Sakai: And what does the demand look like on these mills really to other product lines.

Chris Sakai: As far as backlog, we're going to execute that backlog in.

Chris Sakai: A lot of times or in the past these tariffs related to steel itself.

Chris Sakai: It was a good thing for L. B Foster company and I'm looking for the same thing to happen second half of this year as well.

Chris Sakai: Okay, Great and then for <unk>.

Chris Sakai: Protective coatings.

Chris Sakai: How high do you think that number could go.

Chris Sakai: I don't know all I know is what I shared with you for the $1 8 million to all of those additional.

John Kasel: But we're, as far as backlog, we're going to execute that backlog and, you know, a lot of times in the past these tariffs, it really, to steal itself, was a good thing for LB Foster Co and I'm looking for the same thing to happen second half of this year. Okay, great.

Chris Sakai: Over $8 million that we've seen just in the fourth quarter year over year basis.

Chris Sakai: We're in constant contact with the mill itself, namely of SIFCO reserve were inline quarter for.

John Kasel: And then for protective codex, how high do you think that that number could go? I don't know. All I know is what I shared with you for the $1.8 million to all those additional over $8 million that we've seen just in the fourth quarter on a year-over-year basis. We're in constant contact with the mill itself, namely ASIPCO, who we're in line coder for. They are quoting a lot of work and they are booking a lot of work in their two steel mills right now. We are wrapping up our operation. We have hired about 55 people in the last 60 days.

Chris Sakai: And they are quoting a lot of work in their bookings.

Chris Sakai: And there are two steel mills right now so we are ramping up our operation we've hired.

Chris Sakai: 55 people in the last 60 days.

Chris Sakai: So we are looking to be running at.

Chris Sakai: Full capacity here starting in April how that translates to what the revenue is going to look like.

Chris Sakai: Between known and years, yet to be seen but we're feeling very very good about.

Chris Sakai: Getting out of that trough that we've been in the last four years in that business and really do.

Chris Sakai: Driving some nice profitability out of that facility as well as now where we have in our Willis.

Chris Sakai: <unk> coating business as well.

John Kasel: We are looking to be running almost at full capacity here starting in April. How that translates to what the revenue is going to look like between now and the end We are feeling very good about getting out of that trough that we have been in the last four years in that business. driving some nice profitability out of that facility as well as what we have in our Willis specialty coating business as well. So both are looking very good here.

Chris Sakai: So both both are looking very good here.

Chris Sakai: Okay. Thanks, and then.

Chris Sakai: For the 40 million share buyback.

Chris Sakai: What made you decide on $40 million.

Chris Sakai: As well, we had to pick a number to start with right in.

Speaker Change: It came off a $15 million, so bill and I kind of talk back and forth. We work with our board of directors, we look to the Union Pacific that cash coming back and out how can we take a good portion of that cash that we're not going to be spending related to settlement fees and bring that into the repurchase program. So that just seem a good fit right balance.

John Kasel: Okay, okay, thanks, and then... For the 40 million share buyback, what made you decide on 40 million? Yeah, well, we had to pick a number to start with, right? And we came off of $15 million. So Bill and I kind of talked back and forth. We worked with our board of directors. We looked at the Union Pacific, that cash coming back, and how can we take a good portion of that cash that we're not going to be spending related to settlement fees and bring that into the repurchase program. So that just seemed a good fit, the right balance with the monies that we see that we're going to as well as the additional cash.

Speaker Change: With the monies that we see that we're going to generate an operating cash as well as the additional cash that's coming in.

Speaker Change: Okay and last one for me.

Speaker Change: When you come out with a new four year plan.

Speaker Change: We will come out with a three year plan related to aspirational goals.

Speaker Change: Three years.

Speaker Change: Okay sounds good.

Speaker Change: Hey, Chris.

Speaker Change: Thank you.

Speaker Change: Thank you and our next question comes from the line of Justin Bergner from Gabelli funds. Your question. Please.

Chris Sakai: Okay, and last one for me. Will you come out with a new four-year plan? We will come out with a three-year plan related to aspirational goals. We'll stick to three years. Okay, sounds good. All right, Chris. Thank you.

Justin Bergner: Hi, Good morning, good morning, Josh.

Justin Bergner: Good work on the business.

Justin Bergner: And.

Justin Bergner: I guess my question Sean.

Justin Bergner: Would be around.

Justin Bergner: The pre cast concrete use in national parks.

Justin Bergner: And our next question comes from the line of Justin Bergner from Good Belly Funds. Your question, please. Hi. Good morning. Good morning, Justin.

Justin Bergner: State parks.

Justin Bergner: Seeing some potential disruptions there shall we say alright, how are.

Justin Bergner: Or are you factoring that into your guidance and outlook.

John Kasel: work on the business and I guess my questions, John, Precast concrete use in national parks, state parks. There are potential disruptions there, shall we say. How are you factoring that into your guidance and outcomes? Well, I guess with the earlier questions, when you start looking at the 540 to 580, that may have some impact of moving towards the lower end of the guidance related to that activity. But I'll tell you, Justin, we did $80 million alone in that business last year, which was the best year we ever had. The Great American Outdoors Act, which is running for another year or so related to the funding, we're still in very, very good shape related to the work in our backlog and the shipments that we're looking at making here in the next few months.

For 25.

Justin Bergner: Well it might be I guess with the earlier question is when you start looking at the $5 40 to $5 80.

Justin Bergner: That may have some impact of moving towards the lower end of the guidance related to that activity, but I will tell you adjusted we did $80 million alone and that that business last year, which was the best year, we ever had the greatest American outdoors Act, which is running for another year or so related to the funding we're still in very very good shape.

Justin Bergner: Related to the work we have to work in our backlog and the shipments that were looking at making here in the next few months so.

Justin Bergner: I am not were actually not as concerned about as perhaps we could or maybe on other things that are happening today that one looks still pretty good.

Justin Bergner: Got you Alright, and then.

Justin Bergner: In terms of the recovery in the second half versus the first half like what parts of the business are you banking on announcing.

Justin Bergner: Bouncing back yeah. Good question, so in our business and we didn't see as much as this last year and that was in our remarks, Bill and Isis <unk>.

John Kasel: I'm not we're actually not as concerned about that as perhaps we could or maybe on other things that are happening today. That one looks still pretty good. Gotcha. All right.

Justin Bergner: Our business is seasonal and a lot of that's related to just getting funding budgets approved as well as weather conditions.

Justin Bergner: So typically where we've really really strive.

John Kasel: And then... In terms of the recovery in the second half versus the first half, what parts of the business are you seeing? Yeah. Yeah, good question. So, you know, our business, we didn't see as much as this last year, and it was in our remarks, Bill and I, and our business is seasonal, and a lot of that's related to just getting budgets approved as well as weather conditions. So typically, where we really, really strive. is in the second and third quarters, and then in greater extent, fourth quarter, too, more in the first quarter. So, we're seeing this to be a much more typical year, if you will.

Justin Bergner: Is in the second and third quarters, and then in greater extent fourth quarter two more in the first quarter. So we're seeing just to be a much more typical year. If you will I think once six when we get to the tariffs and all this other government actions to settle down here I expect that to slow down in the coming up.

Justin Bergner: Months hopefully.

Justin Bergner: But I do think the second half of the year are related to the backlog we have all the quoting activities. They have all the predictive coatings work, that's coming our way that we haven't seen it for years.

Justin Bergner: All the work that's coming out of Florida with their new operational that work is coming at Tennessee related to <unk>.

John Kasel: I think once these, when we get through the tariffs and all those other government actions, too, they'll settle down here. I expect that to settle down in the coming, you know, months, hopefully. But I do think the second half of the year, related to the backlog, we have all the quoting activities, we have all the protective coatings work that's coming our way, that we haven't seen in four years. All the work that's coming out of Florida with their new operation, all the work that's coming in Tennessee, related to CXT, it's really, really shaping up to something that we're feeling very good about, because the country needs infrastructure.

Justin Bergner: It's really really shaping up to something that we're feeling very good about because.

Justin Bergner: The country needs infrastructure, they need infrastructure materials.

Justin Bergner: And right now I think we're very well positioned to be able to deliver on those things being that much of what we do is first of all it's here in America and second of all much of the materials, we get come from America as well so.

Justin Bergner: I think we are.

Justin Bergner: No.

Justin Bergner: Its not keeping me up at night, let's put it that way just and I think we have opportunities to really pull together a good year and hits us financial guidance, we have out there as long as we we can't control everything but right now what we see is we're managing what we can manage we're doing well.

John Kasel: They need infrastructure materials. And right now, I think we're very well positioned to be able to deliver on those things, being that much of what we do is, first of all, is here in America, and second of all, much of the materials we get come from America as well. So, I think we're, you know, It's not keeping me up at night, let's put it that way, Justin. I think we have opportunities to really pull together a good year and hit this financial guidance we have out there. As long as we, you know, we can't control everything, but right now what we see is we're managing what we can manage, we're doing well.

Justin Bergner: Got you and then lastly.

Justin Bergner: On the tariff side with respect to tariffs against Canada, and Mexico could that create any of chill for your rail business sure.

Justin Bergner: As always Kevin we do work to Canada, we work Mexico, where.

Justin Bergner: We have customers in Canada and in Mexico.

Justin Bergner: But if these tariffs and these other things have been talked about for a while and are our business.

Justin Bergner: Business people have done a good job working with the Dan.

John Kasel: Gotcha.

John Kasel: And then lastly, on the tariff side, with respect to the tariffs against Canada and Mexico, could that create... Sure, it always can. We do work in Canada, we work in Mexico, we have customers in Canada and in Mexico, but these tariffs and these other things have been talked about for a while and our business people have done a good job working with the end-users, end-markets there and we've had quite a bit of work that's been flowing between the countries leading up to what happened last night or early this morning related to tariffs. So, I think everybody's mindful of what's going on.

Justin Bergner: The end users and market share and we've had quite a bit of work that's been flowing between the countries.

Justin Bergner: Leading up to what happened last night or early this morning related to tariffs so I <unk>.

Justin Bergner: Everybody's mindful, what's going on at then data customers, both Mexico, and Canada is one of our product need a product we will continue to find a way to get them product.

Justin Bergner: And we're going to continue to make product.

Justin Bergner: In line with.

Justin Bergner: Everything.

Justin Bergner: Having a backlog in and be able to we should be able to pass pricing as well as if there is increased pricing because our contracts are allowing to do for us to do that.

Justin Bergner: And we are.

John Kasel: At the end of the day, the customers both in Mexico and Canada want our product, need our product. We will continue to find a way to get them product and we're going to continue to make product in line with everything we have in our backlog and we should be able to pass pricing on as well if there is increased pricing because our contracts are allowing for us to do that. and we have quite a bit of flexibility that we haven't seen before. Coming out of COVID, really, this organization really pivoted. We really got after a contract.

Justin Bergner: We have.

Justin Bergner: Quite a bit of flexibility that we have seen before.

Justin Bergner: Coming out of Covid really this organization really pivoted, we really got after our contracts.

Justin Bergner: Understood, what was really driving and material costs and other things.

Justin Bergner: So we have an opportunity now to go get price when cost increase and we feel pretty good about that.

Justin Bergner: Alright, thank you.

Justin Bergner: Thank you.

Speaker Change: Thank you and as a reminder, if you do have a question at this time. Please press star one one and our next question is a follow up from the line of Julio Romero from Sidoti Your question. Please.

John Kasel: I really understood what was really driving it, material costs and other things. So, we have the opportunity now to go get price when costs increase, and we feel pretty good about that. All right. Thank you.

Julio Romero: Hey, Thanks, guys for taking a few follow ups from me sure.

Julio Romero: On the restructuring are all the costs related to that taken already in 2024, how much savings were realized in 'twenty four and how much incremental savings in 2005, you expect relative to what you got in 'twenty. Four we appreciate the question. We spent a lot of time really mapping that out in fact, we took.

Operator: And as a reminder, if you do have a question at this time, please press star one one.

Julio Romero: And our next question is a follow up from the line of Julio Romero from Sudoti.

Julio Romero: Your question, please. Hey, thanks guys for taking a few follow-ups from me. On the restructuring, are all the costs related to that taken already in 2024? How much savings were realized in 2024 and how much incremental savings in 2025 do you expect relative to what you got in 2024? We appreciate that question. We spent a lot of time really mapping that out. In fact, we took six months and really peeled back the onion to what we needed to do there. And then we also took money and we pivoted towards our technology innovation engineering side of the company and as well as the technical sales side.

Julio Romero: Six months, it really peel back the onion, what we need to do there.

Julio Romero: And then we also took monies and we pivoted towards our technology innovation engineering side of the company and as well as the technical sales side.

Julio Romero: And I'll flip that over to Bill and he can give you some details on actually how those numbers are translating what they mean this year, but I wanted to just from a strategy point of view that was a key point that really getting ourselves positioned for this profitability expansion that we had in 2025.

Julio Romero: Hey, Julio.

Julio Romero: Yes in 2020 for the total charge that we took was right around $1 5 million.

I think it was.

Julio Romero: About $5 million that we realized in Q4 as well.

John Kasel: And I'll flip that over to Bill, and he can give you some details on actually how those numbers are translating, what they mean this year. But I want to just, from a strategy point of view, that was a key point of really getting ourselves positioned for this profitability expansion that we have in 2020.

Julio Romero: In terms of the split between Q3 and Q4 funding wise, we spent about $8 $800000. In 2024, there is a little bit of cash that will come out in 2025, but in terms of P&L charges nothing more that we would expect.

William Thalman: Hey, Julio. So yeah, in 2024, the total charge that we took was right around $1.5 million. I think it was about a half a million dollars that we realized in Q4 as well, in terms of the split between Q3 and Q4. Funding-wise, we spent about $800,000 in 2024.

Julio Romero: 2025.

Julio Romero: And then in terms of realized savings based on the timing of when employees left the organization, we realized about $2 million worth of savings in 2024, and we expect our run rate savings from the program to be about $4 $5 million. So you would expect an incremental $2 $5 million in 2020.

William Thalman: There's a little bit of cash that will come out in 2025, but in terms of P&L charges, nothing more that we would expect. And then, in terms of realized savings, based on the timing of when employees left the organization, we realized about $2 million worth of savings in 2024, and we expect our run rate savings from the program to be about $4.5 million. So, you would expect an incremental $2.5 million in 2024 – sorry, 2025 over 2024. Great, thanks so much for the color there.

Julio Romero: Four sorry, 2025% over 2024.

Julio Romero: Great. Thanks, so much for the color there and then one more for me is just can you maybe level set for us what percentage of each segment. Currently is related to growth maybe what percentage of the consolidated L. B Foster as a whole falls under the growth bucket and then and then if you could to the best.

Julio Romero: You can speak to some of the organic growth rates embedded in those three buckets, but it should be getting in 'twenty five I. Appreciate the question. So I'll start and just give you a little color on the strategy I mean, we have growth coming out of both segments first and foremost so we feel good about that.

John Kasel: And then one more for me is just, can you maybe level set for us what percentage of each segment currently is related to growth? Maybe what percentage of the consolidated LB Foster as a whole falls under the growth bucket? And then, and then if you could, to the best that you can speak to some of the organic growth rates embedded in those buckets that that each should be getting in 2025?

Julio Romero: We've got quite a bit in the infrastructure as we thought it was going on in Florida expansion was going on in Tennessee in both locations right now.

Julio Romero: As well as we got some nice programs going in Texas.

Julio Romero: On the infrastructure side really building out our precast abilities that we have there.

Julio Romero: On the rail side, it's all about TTM in the condition monitoring that we mentioned we've been talking about specifically products like the mark for.

John Kasel: Appreciate the question. So I'll start and just give you a little color and strategy. I mean, we have growth coming out of both segments, first and foremost, so we feel good about We've got quite a bit in the infrastructure as we talk about what's going on in Florida, the expansion that's going on in Tennessee and both locations right now, as well as we've got some nice programs going in Texas. on the infrastructure side, really building on our precast abilities that we have there. On the rail side, it's all about TTM and the condition monitoring that we mentioned we've been talking about, specifically products like the Mark IV, the Rockfall applications that we have.

Julio Romero: The Rockville applications that we have.

Julio Romero: And then.

Julio Romero: Theres really a renewed interest in some of the other products, we have especially with Union Pacific settlements behind Us, where we're adding more.

Julio Romero: Rail products type components to the marketplace today that we haven't seen in quite a while now.

Julio Romero: Of course, the big thing that basically went from zero to 100 is predictive coatings right now with in line oil and gas pipe.

Julio Romero: That were doing 12 months to 24 inch pipe distribution pipe.

John Kasel: And then there's really a renewed interest in some of the other products we have, especially with the Union Pacific settlements behind us, where we're adding more rail products type components to the marketplace today that we haven't seen in quite a while. And of course, the big thing that basically went from 0 to 100 is predictive coatings. with the in-line oil and gas pipe. that we're doing 12 to 24-inch pipe distribution pipe that we're going to be coding and putting in the marketplace for the balance of this year, and we honestly see that activity continue for multiple years.

Julio Romero: We're going to be coding and putting in the marketplace for the balance of this year and we we honestly see that activity continue for multiple years.

Speaker Change: Bill you want to add a little color as far as the actual numbers what that represents I think Julio you know we've talked about the businesses segments. But then we also break down this path.

Julio Romero: It forms.

Speaker Change: Some details in our materials so.

Speaker Change: I would characterize our growth platforms at about $230 million in 2024.

Speaker Change: And the balance of the business about $300 million would be our returns platforms.

Speaker Change: I think you're probably familiar with what those groups are when we're thinking about growth rates for 2025.

William Thalman: Bill, you want to add a little color as far as the actual numbers, what that represents? Yeah, I think, Julio, you know, we talk about the business as segments, but then we also break down those platforms in some details in our materials. So I would characterize our growth platforms at about $230 million in 2024, and the balance of the business, about $300 million would be our returns platform. And I think you're probably familiar with what those groups are. When we're thinking about growth rates for 2025, the return platforms are going to be kind of low single-digit numbers, lower single-digit growth rates.

Speaker Change: The return platforms are going to be kind of low single digit.

Speaker Change: Numbers.

Speaker Change: Lower single digit.

Speaker Change: Growth rates, what I would tease out of that is the.

Speaker Change: The coatings business, which is part of the REIT.

Speaker Change: <unk> platform, we would expect that to be maybe a little healthier growth rate than low single digits, just because of the emphasis on the energy.

Speaker Change: Investment here in the United States that's.

Speaker Change: Come back into play here somewhat in recent months.

Speaker Change: Then on the return on the growth platforms, we look at high single digits low double digits in terms of growth rates with the expectations of primarily within friction management seeing greater growth. There you mentioned the Wow programs that we've got deployed in TTM.

William Thalman: What I would tease out of that is the codings business, which is part of the returns platform. We would expect that to be maybe a little healthier growth rate than low single-digits just because of the emphasis on the energy investment here in the United States that's come back into play here somewhat in recent years. And then on the return or on the growth platforms, you know, we look at, you know, high single digits, low double digits in terms of growth rates with the expectations of primarily within friction management, seeing greater growth there. You mentioned the wild programs that we've got deployed in TTM, that will be a higher growth rate as well.

Speaker Change: That will be a higher growth rate as well and then very importantly, the precast concrete business with the investments we've made in our Tennessee operations market growth opportunity there as well as the investments we've made in Florida, we expect to see sales growth to be a little healthier there as well hopefully that helps.

Speaker Change: It does definitely appreciate the granularity thanks very much.

Speaker Change: Thank you.

Speaker Change: Thank you and as a reminder, if you do have a question at this time. Please press star one on your telephone.

Julio Romero: And then very importantly, the precast concrete business with the investments we've made in our Tennessee operations, market growth opportunity there, as well as the investments we made in Florida, we expect to see sales growth to be a little healthier there. I'll play that. It does. Definitely appreciate the granularity. Thanks very much. Thank you. And as a reminder, if you do have a question at this time, please press star one one on your telephone.

Speaker Change: And this does conclude the question and answer session of today's program I'd like to hand, the program back to John Castle for any further remarks.

Speaker Change: Thank you Jonathan and thank you for joining us today I'd just like to close once again with just a.

Speaker Change: Shout out to all the L. B Foster team members that may.

Speaker Change: Right.

Speaker Change: We challenged the company back in 2024.

Speaker Change: To be not just good at safety World class as it relates to safety.

Operator: And this does conclude the question and answer session of today's program.

Speaker Change: How we look at it is if you take care of your people.

John Kasel: I'd like to hand the program back to John Kasel for any further remarks. Thank you, Jonathan, and thank you for joining us today. I'd just like to close, once again, with just a shout out to all the LB Foster team members. that made, um, we challenged the company back in 2024. to be not just good at safety, but world-class as it relates to safety. See how we look at it is if you take care of your people. They take care of the process, the profits. and when safety is good, the business is good. and we were outstanding in 2024.

Speaker Change: They take care of the process the process come.

Speaker Change: And when safety is good the business is good.

Speaker Change: And we were.

Speaker Change: We were outstanding in 2024.

Speaker Change: Went for a long period of time months quarters on them, but not even one injury in the company.

Speaker Change: And.

Speaker Change: For our company has been around since 19 O two.

Speaker Change: Theres really says something.

Speaker Change: We've been able to do what we've been able to accomplish.

Speaker Change: It really to the investors out there are they are investing company today or future investor.

Speaker Change: One L. B Foster puts our mind is something and we go out and say, we're going to do something we deliver.

John Kasel: We went for a long period of time, months, quarters on end, but not even one injury in the And for a company that's been around since 1902, that really says something, what we've been able to do, what we've been able to accomplish. And I think it really, to the investors out there, either investing in a company today or a future investor, when LB Foster puts their mind to something, and we go out and say we're going to do something, we deliver. Last year when Bill and I, after the second quarter, we talked about the profitability that we're going to come in the second half of the year.

Speaker Change: Last year when bill after.

Speaker Change: After the second quarter, we talked about the profitability that we're going to come in the second half of the year, we talked about the cash we're going to generate in second half year and we delivered we delivered on what we said after a tough second quarter.

We're here to say that we're going to deliver on what we have in 2025 and beyond too.

Speaker Change: Good company good people.

Speaker Change: Strong operations.

Speaker Change: And what we're seeing too is our safety program is extremely exciting and again it just represents who we are more importantly.

Speaker Change: What we are and how we do things so thank you.

John Kasel: We talked about the cash we're going to generate in the second half of the year. And we delivered. We delivered on what we said after a tough second quarter.

Speaker Change: Joining us today and look forward to catching up with you after the second quarter take care.

John Kasel: And we're here to say that we're going to deliver on what we have in 2025 and beyond. Good company, good people, strong operations, and what we're seeing through their safety program is extremely exciting. And again, it just represents who we are, more importantly, what we are and how we do things.

Speaker Change: Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.

John Kasel: So thank you for joining us today, and look forward to catching up with you after the second quarter. Take care.

Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect.

Operator: Good day.