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L.B. Foster Reports Second Quarter Operating Results
PITTSBURGH, Aug. 09, 2016 (GLOBE NEWSWIRE) -- L.B. Foster Company (NASDAQ:FSTR), a leading manufacturer, fabricator, and distributor of products and services for rail, construction, energy and utility markets, today reported its second quarter 2016 operating results which include:
Second Quarter Results
Impairment Charge
As a result of weaker than anticipated performance and downward revisions to projected results of the Tubular and Rail segments, as well as a significant reduction in the Company's market value in the second quarter, the Company determined that an impairment analysis was required. The Company's second quarter impairment analyses indicated that four different reporting units within these segments had carrying values in excess of fair value and required the following impairment charges:
CEO Comments
Robert P. Bauer, L.B. Foster Company's President and Chief Executive Officer, commented, "In response to weak energy and rail markets, we have been working diligently to reduce costs through the first half of this year, continuously examining ways to maximize cash flow and restore profitability. Our gross profit margins have held up very well as several actions we've taken improved operational efficiency. Certain investments we made over the last two years have improved productivity in several factories that have enabled gross profit margins to remain strong despite lower volume. During the first half of 2016, we have taken actions to reduce our salaried workforce costs that will produce $6 million of annualized savings. In addition, discretionary spending cuts will result in $1 million of annual savings. We have already identified additional actions to reduce expenses further in 2017.
"During the quarter, we also divested our rail car repair fixtures division, eliminating a business that was not strategic and was not accretive to results. We are continuing to evaluate other operating units that are not earning acceptable returns on capital."
Mr. Bauer concluded by saying, "60% of our business activity has been adversely impacted by freight rail and energy market weakness. When business conditions improve in those sectors, the cost actions we have taken will leave us better positioned to capitalize on the recovery. Our businesses which comprise the other 40% of sales continue to perform well and are positioned to win more business."
First Half 2016 Results
L.B. Foster Company will conduct a conference call and webcast to discuss its second quarter 2016 operating results on Tuesday, August 9, 2016 at 8:00 am ET. The call will be hosted by Mr. Robert Bauer, President and Chief Executive Officer. Listen via audio and access the slide presentation on the L.B. Foster web site: www.lbfoster.com , under the Investor Relations page. The conference call can be accessed by dialing 877-407-0784 and providing access code 13641064.
About L.B. Foster Company
L.B. Foster is a leading manufacturer, fabricator, and distributor of products and services for the rail, construction, energy and utility markets with locations in North America and Europe. For more information, please visit www.lbfoster.com .
This release may contain forward-looking statements that involve risks and uncertainties. Statements that do not relate strictly to historical or current facts are forward-looking. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. Actual results could differ materially from the results anticipated in any forward-looking statement. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The Company has based these forward-looking statements on current expectations and assumptions about future events. While the Company considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, most of which are difficult to predict and many of which are beyond the Company's control. The risks and uncertainties that may affect the operations, performance and results of the Company's business and forward-looking statements include, but are not limited to, an economic slowdown or a continuation of the current economic slowdown in the markets we serve; the risk of doing business in international markets; our ability to effectuate our strategy including evaluating potential opportunities such as strategic acquisitions, joint ventures, and other initiatives, and our ability to effectively integrate new businesses and realize anticipated benefits; costs of and impacts associated with shareholder activism; a decrease in freight or passenger rail traffic; the timeliness and availability of material from our major suppliers; labor disputes; the effective implementation of an enterprise resource planning system; changes in current accounting estimates and their ultimate outcomes; the adequacy of internal and external sources of funds to meet financing needs; the Company's ability to manage its working capital requirements and indebtedness; domestic and international taxes; foreign currency fluctuations; inflation; domestic and foreign government regulations; economic conditions and regulatory changes caused by the United Kingdom's likely exit from the European Union; continued and sustained declines in energy prices; a lack of state or federal funding for new infrastructure projects; increased regulation including conflict minerals; an increase in manufacturing or material costs; the ultimate number of concrete ties that will have to be replaced pursuant to the previously disclosed product warranty claim of the Union Pacific Railroad ("UPRR") and an overall resolution of the related contract claims as well as the possible costs associated with the outcome of the lawsuit filed by the UPRR; risks inherent in litigation and those matters set forth in Item 8, Footnote 19, "Commitments and Contingent Liabilities" and in Item 1A, "Risk Factors" of the Company's Form 10-K for the year ended December 31, 2015 as updated by any subsequent Form 10-Qs. The Company urges all interested parties to read these reports to gain a better understanding of the many business and other risks that the Company faces. The forward-looking statements contained in this press release are made only as of the date hereof, and the Company assumes no obligation and does not intend to update or revise these statements, whether as a result of new information, future events or otherwise, except as required by securities laws.
1 See non-GAAP reconciliation tables at the end of this press release for information regarding the non-GAAP measures (including reconciliation of Net loss to Adjusted EBITDA and measures excluding the impairment charge) used in this release.
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