10-Q 1 fstr-20240930.htm 10-Q fstr-20240930
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
☒Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the quarterly period ended September 30, 2024
Or
☐Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the transition period from                      to                     
Commission File Number: 000-10436
LBF-corporate-logo_linear-colour_crop.gif
L.B. Foster Company
(Exact name of registrant as specified in its charter)
Pennsylvania
25-1324733
(State of Incorporation)
(I. R. S. Employer Identification No.)
415 Holiday Drive, Suite 100, Pittsburgh, Pennsylvania
15220
(Address of principal executive offices)(Zip Code)
(412) 928-3400
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01FSTRNasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes ☒   No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes ☒    No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐
Accelerated filer ☒
Non-accelerated filer ☐
Smaller reporting company ☒
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of October 31, 2024, there were 10,830,095 shares of the registrant’s common stock, par value $0.01 per share, outstanding.



L.B. FOSTER COMPANY AND SUBSIDIARIES
INDEX
 
Page

2
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
L.B. FOSTER COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
September 30,
2024		December 31,
2023
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$3,135 $2,560 
Accounts receivable - net (Note 5)66,718 53,484 
Contract assets - net (Note 3)20,186 29,489 
Inventories - net (Note 6)73,877 73,111 
Other current assets9,538 8,711 
Total current assets173,454 167,355 
Property, plant, and equipment - net75,732 75,579 
Operating lease right-of-use assets - net12,604 14,905 
Other assets:
Goodwill (Note 4)32,880 32,587 
Other intangibles - net (Note 4)16,020 19,010 
Deferred tax assets (Note 9)30,045 — 
Other assets3,809 2,965 
TOTAL ASSETS$344,544 $312,401 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $40,008 $39,500 
Deferred revenue (Note 3)9,720 12,479 
Accrued payroll and employee benefits11,243 16,978 
Current portion of accrued settlement (Note 13)4,000 8,000 
Current maturities of long-term debt (Note 7)167 102 
Other accrued liabilities11,251 17,442 
Total current liabilities76,389 94,501 
Long-term debt (Note 7)68,377 55,171 
Deferred tax liabilities (Note 9)1,134 1,232 
Long-term operating lease liabilities9,923 11,865 
Other long-term liabilities6,285 6,797 
Stockholders’ equity:
Common stock, par value $0.01, authorized 20,000,000 shares; shares issued at September 30, 2024 and December 31, 2023, 11,115,779; shares outstanding at September 30, 2024 and December 31, 2023, 10,657,554 and 10,733,935, respectively
111 111 
Paid-in capital43,385 43,111 
Retained earnings167,821 124,633 
Treasury stock - at cost, 458,225 and 381,844 common stock shares at September 30, 2024 and December 31, 2023, respectively
(8,994)(6,494)
Accumulated other comprehensive loss(20,472)(19,250)
Total L.B. Foster Company stockholders’ equity181,851 142,111 
Noncontrolling interest585 724 
Total stockholders’ equity182,436 142,835 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$344,544 $312,401 

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
3
L.B. FOSTER COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Sales of goods$119,322 $131,065 $346,202 $361,770 
Sales of services18,144 14,280 56,380 47,097 
Total net sales137,466 145,345 402,582 408,867 
Cost of goods sold89,286 103,868 264,543 282,627 
Cost of services sold15,422 14,060 48,592 42,905 
Total cost of sales104,708 117,928 313,135 325,532 
Gross profit32,758 27,417 89,447 83,335 
Selling and administrative expenses24,289 24,421 71,977 70,360 
(Gain) on sale of former joint venture facility — — (3,477)— 
Amortization expense1,146 1,379 3,486 4,119 
Operating income7,323 1,617 17,461 8,856 
Interest expense - net1,358 1,442 3,976 4,404 
Other (income) expense - net(188)(151)(525)2,782 
Income before income taxes6,153 326 14,010 1,670 
Income tax benefit(29,745)(121)(29,110)(99)
Net income35,898 447 43,120 1,769 
Net loss attributable to noncontrolling interest(7)(68)(68)(125)
Net income attributable to L.B. Foster Company$35,905 $515 $43,188 $1,894 
Per share data attributable to L.B. Foster shareholders:
Basic earnings per common share$3.35 $0.05 $4.01 $0.18 
Diluted earnings per common share$3.27 $0.05 $3.91 $0.17 
Basic weighted average shares outstanding10,718 10,813 10,757 10,804 
Diluted weighted average shares outstanding10,992 10,973 11,059 10,895 


The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
4
L.B. FOSTER COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(In thousands)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Net income$35,898 $447 $43,120 $1,769 
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment1,376 (1,651)(590)852 
Unrealized (loss) gain on cash flow hedges, net of tax expense of $0
(698)1 (778)79 
Reclassification of pension liability adjustments to earnings, net of tax expense of $5, $1, $12, and $5, respectively*
24 42 75 123 
Total comprehensive income (loss)36,600 (1,161)41,827 2,823 
Less comprehensive (loss) income attributable to noncontrolling interest:
Net loss attributable to noncontrolling interest(7)(68)(68)(125)
Foreign currency translation adjustment18 (21)(71)12 
Amounts attributable to noncontrolling interest11 (89)(139)(113)
Comprehensive income (loss) attributable to L.B. Foster Company$36,589 $(1,072)$41,966 $2,936 

 
*
Reclassifications out of “Accumulated other comprehensive loss” for pension obligations are charged to “Selling and administrative expenses” within the Condensed Consolidated Statements of Operations.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
5
L.B. FOSTER COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Nine Months Ended
September 30,
20242023
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$43,120 $1,769 
Adjustments to reconcile net income to cash used in operating activities:
Deferred income taxes(30,122)(1,958)
Depreciation7,076 7,449 
Amortization3,486 4,119 
Equity in loss of nonconsolidated investments6 6 
Gain on sales and disposals of property, plant, and equipment(4,437)(366)
Stock-based compensation3,135 2,757 
Loss on asset divestitures— 3,074 
Change in operating assets and liabilities:
Accounts receivable(12,976)15,927 
Contract assets9,910 (261)
Inventories(465)(16,047)
Other current assets(2,020)1,108 
Other noncurrent assets2,517 (762)
Accounts payable603 1,201 
Deferred revenue(2,861)782 
Accrued payroll and employee benefits(5,747)1,809 
Accrued settlement(4,000)(4,000)
Other current liabilities(5,848)(1,044)
Other long-term liabilities(3,030)(253)
Net cash (used in) provided by operating activities(1,653)15,310 
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of property, plant, and equipment3,881 539 
Capital expenditures on property, plant, and equipment(7,834)(2,784)
Proceeds from business dispositions— 7,706 
Acquisitions, net of cash acquired— 337 
Net cash (used in) provided by investing activities(3,953)5,798 
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of debt(166,005)(150,115)
Proceeds from debt178,167 129,853 
Treasury stock acquisitions(5,742)(1,193)
Investment of noncontrolling interest— 334 
Net cash provided by (used in) financing activities6,420 (21,121)
Effect of exchange rate changes on cash and cash equivalents(239)100 
Net increase in cash and cash equivalents575 87 
Cash and cash equivalents at beginning of period2,560 2,882 
Cash and cash equivalents at end of period$3,135 $2,969 
Supplemental disclosure of cash flow information:
Interest paid$3,632 $4,351 
Income taxes paid (received)$1,596 $(271)
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
6
L.B. FOSTER COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
(Dollars in thousands)
Three Months Ended September 30, 2024
Common
Stock		Paid-in
Capital		Retained
Earnings		Treasury
Stock		Accumulated Other
Comprehensive Loss		Noncontrolling
Interest		Total Stockholders’
Equity
Balance, June 30, 2024$111 $42,612 $131,916 $(6,405)$(21,156)$574 $147,652 
Net income (loss)— — 35,905 — — (7)35,898 
Other comprehensive income (loss), net of tax:
Pension liability adjustment— — — — 24 — 24 
Foreign currency translation adjustment— — — — 1,358 18 1,376 
Unrealized derivative loss on cash flow hedges— — — — (698)— (698)
Purchase of 126,688 common shares for treasury
— — — (2,623)— — (2,623)
Issuance of 1,206 common shares, net of shares withheld for taxes
— (15)— 34 — — 19 
Stock-based compensation— 788 — — — — 788 
Balance, September 30, 2024$111 $43,385 $167,821 $(8,994)$(20,472)$585 $182,436 

Three Months Ended September 30, 2023
Common
Stock		Paid-in
Capital		Retained
Earnings		Treasury
Stock		Accumulated Other
Comprehensive Loss		Noncontrolling
Interest		Total Stockholders’
Equity
Balance, June 30, 2023$111 $40,919 $124,548 $(4,846)$(18,536)$396 $142,592 
Net income (loss)— — 515 — — (68)447 
Other comprehensive income, net of tax:
Pension liability adjustment— — — — 42 — 42 
Foreign currency translation adjustment— — — — (1,630)(21)(1,651)
Unrealized derivative loss on cash flow hedges— — — — 1 — 1 
Purchase of 12,102 common shares for treasury
— — — (216)— — (216)
Issuance of 0 common shares, net of shares withheld for taxes
— (15)— — — — (15)
Stock-based compensation— 928 — — — — 928 
Balance, September 30, 2023$111 $41,832 $125,063 $(5,062)$(20,123)$307 $142,128 

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
7
L.B. FOSTER COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
(Dollars in thousands)
Nine Months Ended September 30, 2024
Common
Stock		Paid-in
Capital		Retained
Earnings		Treasury
Stock		Accumulated Other
Comprehensive Loss		Noncontrolling
Interest		Total Stockholders’
Equity
Balance, December 31, 2023$111 $43,111 $124,633 $(6,494)$(19,250)$724 $142,835 
Net income (loss)— — 43,188 — — (68)43,120 
Other comprehensive loss, net of tax:
Pension liability adjustment— — — — 75 — 75 
Foreign currency translation adjustment— — — — (519)(71)(590)
Unrealized derivative loss on cash flow hedges— — — — (778)— (778)
Purchase of 196,768 common shares for treasury
— — — (4,330)— — (4,330)
Issuance of 120,387 common shares, net of shares withheld for taxes
— (3,235)— 1,830 — — (1,405)
Stock-based compensation— 3,135 — — — — 3,135 
Investment of noncontrolling interest— 374 — — — — 374 
Balance, September 30, 2024$111 $43,385 $167,821 $(8,994)$(20,472)$585 $182,436 

Nine Months Ended September 30, 2023
Common
Stock		Paid-in
Capital		Retained
Earnings		Treasury
Stock		Accumulated Other
Comprehensive Loss		Noncontrolling
Interest		Total Stockholders’
Equity
Balance, December 31, 2022$111 $41,303 $123,169 $(6,240)$(21,165)$420 $137,598 
Net income (loss)— — 1,894 — — (125)1,769 
Other comprehensive income, net of tax:
Pension liability adjustment— — — — 123 — 123 
Foreign currency translation adjustment— — — — 840 12 852 
Unrealized derivative gain on cash flow hedges— — — — 79 — 79 
Purchase of 63,343 common shares for treasury
— — — (878)— — (878)
Issuance of 91,316 common shares, net of shares withheld for taxes
— (2,228)— 2,056 — — (172)
Stock-based compensation— 2,757 — — — — 2,757 
Balance, September 30, 2023$111 $41,832 $125,063 $(5,062)$(20,123)$307 $142,128 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
8
L.B. FOSTER COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands, except share data)
Note 1. Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. In the opinion of management, all estimates and adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. This Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and footnotes thereto included in L.B. Foster Company’s Annual Report on Form 10-K/A for the year ended December 31, 2023. In this Quarterly Report on Form 10-Q, references to “we,” “us,” “our,” and the “Company” refer collectively to L.B. Foster Company and its consolidated subsidiaries.

Recently Issued Accounting Standards
In November 2023, the FASB issued Accounting Standards Update 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which requires enhanced disclosures regarding significant segment expenses that are regularly reviewed by the chief operating decision maker (“CODM”) and included in each reported measure of segment operating income or loss, including an amount for “other segment items” by reportable segment and a description of its composition. ASU 2023-07 also requires entities to disclose the title and position of the CODM and an explanation of how the CODM uses reported measures of segment operating income or loss to assess performance and allocate resources. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 with early adoption permitted. The Company expects ASU 2023-07 to only impact its disclosures with no impacts to its consolidated financial condition, results of operations, and cash flows.

In December 2023, the FASB issued Accounting Standards Update 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires entities to disclose additional information with respect to the effective tax rate reconciliation and disaggregation of income tax expense and income taxes paid by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of ASU 2023-09, but expects this ASU to only impact its disclosures with no impacts to its consolidated financial condition, results of operations, and cash flows.
Correction of Immaterial Errors in Previously Issued Condensed Consolidated Financial Statements
As previously announced in the Company’s Annual Report on Form 10-K/A filed with the SEC on November 1, 2024, the Company identified an immaterial error related to the classification of $1,068 of costs associated with exit of the bridge grid deck product line (the “Bridge Exit”) that were erroneously excluded from the Company’s “Operating income,” as reported in the Company’s Condensed Consolidated Statement of Operations. The Company has corrected this immaterial error and other immaterial errors for the three and nine months ended September 30, 2023. The impact of these adjustments are shown in the tables below. Note only line items that were impacted by the immaterial error corrections detailed above are included below.

Three Months Ended September 30, 2023
As Previously ReportedAdjustmentsAs Revised
Cost of goods sold$103,061 $807 $103,868 
Total cost of sales117,121 807 117,928 
Gross profit28,224 (807)27,417 
Selling and administrative expenses24,160 261 24,421 
Operating income2,685 (1,068)1,617 
Other expense (income) - net917 (1,068)(151)

9
Nine Months Ended September 30, 2023
As Previously ReportedAdjustmentsAs Revised
Cost of goods sold$282,195 $432 $282,627 
Total cost of sales325,100 432 325,532 
Gross profit83,767 (432)83,335 
Selling and administrative expenses70,111 249 70,360 
Operating income9,537 (681)8,856 
Other expense - net
3,463 (681)2,782 

The correction of immaterial errors to the Unaudited Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2023 did not change “Income before income taxes,” “Income tax benefit,” or “Net income.” Where appropriate, the financial disclosures in the footnotes to the Unaudited Condensed Consolidated Financial Statements impacted by the correction of these immaterial errors have been updated.
Note 2. Business Segments
The Company is a global technology solutions provider of engineered, manufactured products and services that builds and supports infrastructure. The Company’s segments represent components of the Company (a) that engage in activities from which revenue is generated and expenses are incurred, (b) whose operating results are regularly reviewed by the Chief Operating Decision Maker (“CODM”), who uses such information to make decisions about resources to be allocated to the segments, and (c) for which discrete financial information is available. Operating segments are evaluated on their segment profit contribution to the Company’s consolidated results. Other income and expenses, interest, income taxes, and certain other items are managed on a consolidated basis. The Company’s segment accounting policies are described in Note 2 Business Segments of the Notes to the Company’s Consolidated Financial Statements contained in its Annual Report on Form 10-K/A for the year ended December 31, 2023.

The Company is organized and operates in two reporting segments: Rail, Technologies, and Services (“Rail”), and Infrastructure Solutions (“Infrastructure”). Effective for the quarter and year ended December 31, 2023, the Company made certain organizational changes that led to the conclusion that it will operate under two reporting segments as opposed to the three reporting segments it has operated under historically. As such, the Company has restated segment information for the historical periods presented herein to conform to the current presentation. The Infrastructure business comprises both the historic Precast Concrete Products and Steel Products and Measurement (since renamed “Steel Products”) reporting segments.

The operating results of the Company’s reportable segments were as follows for the periods presented:
Three Months Ended
September 30, 2024		Three Months Ended
September 30, 2023
Net SalesSegment Operating IncomeNet SalesSegment Operating Income
Rail, Technologies, and Services$79,498 $4,933 $86,866 $3,866 
Infrastructure Solutions57,968 5,110 58,479 799 
Total$137,466 $10,043 $145,345 $4,665 

Nine Months Ended
September 30, 2024		Nine Months Ended
September 30, 2023
Net SalesSegment Operating IncomeNet SalesSegment Operating Income
Rail, Technologies, and Services$247,715 $17,212 $242,866 $13,231 
Infrastructure Solutions154,867 7,345 166,001 3,232 
Total$402,582 $24,557 $408,867 $16,463 

Segment income from operations, as shown above, includes allocated corporate operating expenses. Allocated corporate operating expenses include costs associated with central services such as quality, logistics, environmental health and safety, information technology, insurance, and human resources. Other corporate functional costs that are associated with the operating segments are also allocated to the segments such as finance, marketing, credit and collections, and treasury functions. Operating expenses related to corporate headquarter functions were allocated to each segment based on segment headcount, revenue contribution, or activity of the
10
business units within the segments, based on the corporate activity type provided to the segment. Management believes the allocation of corporate operating expenses provides an accurate presentation of how the segments utilize corporate support activities. This provides the CODM meaningful segment profitability information to support operating decisions and the allocation of resources. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies found in Note 1 Significant Accounting Policies of the Notes to the Company’s Consolidated Financial Statements contained in its Annual Report on Form 10-K/A for the year ended December 31, 2023.

During the nine months ended September 30, 2024, the Company sold an ancillary property within the Steel Products business unit for total proceeds of $1,300 generating an $815 gain on sale recorded in “Cost of goods sold” for the nine months ended September 30, 2024 which has been included in the Infrastructure segment’s operating income.

Certain corporate costs are separately managed on a consolidated basis and are not allocated to the operating segments. These corporate costs include public company costs such as listing fees, audit fees, compliance costs, and Board of Directors fees. Additionally, certain corporate executive management costs, including costs of the corporate executive leadership team, and corporate management stock-based compensation expenses are not allocated to the operating segments. Finally, interest expense, income taxes, and certain other items included in other income and expense which are managed on a consolidated basis are not allocated to the operating segments. During the nine months ended September 30, 2024, the Company sold a former joint venture facility located in Magnolia, Texas generating a $3,477 gain on sale recorded in “(Gain) on sale of former joint venture facility ” which is included as a component of corporate operating income.


11
The following table demonstrates a reconciliation of reportable segment net profit to the Company’s consolidated total for the periods presented:
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Income from operations:
Total segment operating income$10,043 $4,665 $24,557 $16,463 
Gain on sale of former joint venture facility — — 3,477 — 
Interest expense - net(1,358)(1,442)(3,976)(4,404)
Other income (expense) - net188 151 525 (2,782)
Public company costs (1,327)(1,371)(4,167)(3,244)
Corporate executive management costs(839)(760)(4,131)(2,281)
Corporate management stock-based compensation (339)(587)(1,818)(1,735)
Other(215)(330)(457)(347)
Income before income taxes$6,153 $326 $14,010 $1,670 
Depreciation/Amortization:
Total segment depreciation/amortization$3,019 $3,373 $9,172 $10,214 
Corporate depreciation/amortization467 466 1,390 1,354 
Depreciation/amortization$3,486 $3,839 $10,562 $11,568 
Expenditures for Long-Lived Assets:
Total segment expenditures for long-lived assets$2,816 $879 $6,865 $1,945 
Corporate expenditures for long-lived assets251 410 969 839 
Expenditures for long-lived assets$3,067 $1,289 $7,834 $2,784 

The following table illustrates assets of the Company by reportable segment for the periods presented:
September 30,
2024		December 31,
2023
Rail, Technologies, and Services$157,097 $156,638 
Infrastructure Solutions130,052 130,247 
Unallocated corporate assets57,395 25,516 
Total$344,544 $312,401 

On March 30, 2023, the Company sold substantially all the operating assets of its Chemtec Energy Services LLC (“Chemtec”) business for $5,344 in proceeds generating a $2,065 loss on sale, recorded in “Other (income) expense - net” for the nine months ended September 30, 2023. The Chemtec business was reported in the Steel Products business unit in the Infrastructure segment.

On June 30, 2023, the Company sold substantially all the operating assets of the prestressed concrete railroad tie business operated by its wholly-owned subsidiary, CXT Incorporated (“Ties”), located in Spokane, WA, for $2,362 in proceeds, generating a $1,009 loss on the sale, which was recorded in “Other (income) expense - net” for the nine months ended September 30, 2023. The Ties business was reported in the Rail Products business unit within the Rail segment.

On August 30, 2023, the Company announced the Bridge Exit which was reported in the Steel Products business unit within the Infrastructure segment. The decision to exit the bridge grid deck product line was a result of a weak bridge grid deck market condition and outlook due to customer adoption of newer technologies replacing the grid deck solution. The Company continues to operate its bridge forms product line which is a newer technology and not subject to the same challenging market conditions. The Bedford, PA based operations supporting the discontinued bridge grid deck product line expect to complete any remaining customer obligations during 2025. The discontinued product line had sales of $921 and $283 for the three months ended September 30, 2024 and 2023, respectively, and $2,888 and $3,749 for the nine months ended September 30, 2024 and 2023, respectively. During the three and nine months ended September 30, 2024, the Company incurred an immaterial amount of exit costs, all of which were personnel expenses. The Company does not expect to incur additional material exit costs in the remainder of 2024. Cumulatively, the Company has incurred a total of $1,476 in exit costs for the Bridge Exit, which included $474 in inventory write-downs and $740 in personnel expenses, both of which were recorded in “Cost of goods sold,” as well as $262 in other exit costs, which were recorded in “Selling and administrative expenses.” The majority of such expenses were incurred in the last six months of 2023 and paid in early 2024.

12
On November 17, 2023, the Company acquired the operating assets of Caldwell, Idaho based Cougar Mountain Precast, LLC (“Cougar”), a licensed manufacturer and seller of Redi-Rock® products for $1,644, subject to hold back amount equal to $160 to be paid twelve months following the closing or utilized to satisfy post-close working capital adjustments or indemnity claims. Cougar has been included in the Precast Concrete Products business unit within the Infrastructure segment.


Note 3. Revenue
The following table summarizes the Company’s sales by major product and service line for the periods presented:
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Rail Products$47,442 $60,137 $156,803 $164,612 
Global Friction Management19,548 16,125 51,008 49,624 
Technology Services and Solutions12,508 10,604 39,904 28,630 
Rail, Technologies, and Services79,498 86,866 247,715 242,866 
Precast Concrete Products42,688 38,642 97,730 96,795 
Steel Products15,280 19,837 57,137 69,206 
Infrastructure Solutions57,968 58,479 154,867 166,001 
Total net sales$137,466 $145,345 $402,582 $408,867 

The majority of the Company’s revenue is from products transferred and services rendered to customers at a point in time. The Company recognizes revenue at the point in time at which the customer obtains control of the product or service, which is generally when the product title passes to the customer upon shipment or the service has been rendered to the customer. In limited cases, title does not transfer and revenue is not recognized until the customer has received the products at a designated physical location.


13
Net sales by the timing of the transfer of goods and services was as follows for the periods presented:
Three Months Ended September 30, 2024
Rail, Technologies, and ServicesInfrastructure SolutionsTotal
Point in time$62,717 $33,462 $96,179 
Over time16,781 24,506 41,287 
Total net sales$79,498 $57,968 $137,466 
Three Months Ended September 30, 2023
Rail, Technologies, and ServicesInfrastructure SolutionsTotal
Point in time$72,246 $38,534 $110,780 
Over time14,620 19,945 34,565 
Total net sales$86,866 $58,479 $145,345 

Nine Months Ended September 30, 2024
Rail, Technologies, and ServicesInfrastructure SolutionsTotal
Point in time$198,179 $98,246 $296,425 
Over time49,536 56,621 106,157 
Total net sales$247,715 $154,867 $402,582 
Nine Months Ended September 30, 2023
Rail, Technologies, and ServicesInfrastructure SolutionsTotal
Point in time$202,003 $102,609 $304,612 
Over time40,863 63,392 104,255 
Total net sales$242,866 $166,001 $408,867 

The Company’s performance obligations under long-term agreements with its customers are generally satisfied over time. Over time revenue is primarily comprised of transit infrastructure and technology services and solutions projects within the Rail segment, precast concrete buildings within the Precast Concrete Products division in the Infrastructure segment, and long-term bridge projects and custom precision metering systems within the Steel Products division in the Infrastructure segment. Revenue under these long-term agreements is recognized over time either using an input measure based upon the proportion of actual costs incurred to estimated total project costs or an input measure based upon actual labor costs as a percentage of estimated total labor costs, depending upon which measure the Company believes best depicts the Company’s performance to date under the terms of the contract, or an output method, specifically units delivered, based upon certain customer acceptance and delivery requirements. The use of an input or an output measure to recognize revenue is determined based on what is most appropriate given the nature of the work performed and terms of the associated agreement.

Accounting for these long-term agreements involves the use of various techniques to estimate total revenues and costs. The Company estimates profit on these long-term agreements as the difference between total estimated revenues and expected costs to complete a contract and recognizes that profit over the life of the contract. As a result of management’s reviews of contract-related estimates the Company makes adjustments to contract estimates that impact our revenue and profit totals. Changes in estimates are primarily attributed to updated considerations, including economic conditions and historic contract patterns, resulting in changes to anticipated revenue from existing contracts. During the nine months ended September 30, 2024, reductions to net sales stemming from changes in actual and expected values of certain commercial contracts and settlements of such contracts were $1,477; there were no such changes in actual or expected values during the three months ended September 30, 2024. Such adjustments were $3,996 and $5,424 during the three and nine months ended September 30, 2023, respectively, including $1,977 related to the Bridge Exit in both the three and nine month periods last year. The Company’s estimates related to these long-term agreements are further described in Note 4 Revenue of the Notes to the Company’s Consolidated Financial Statements contained in its Annual Report on Form 10-K/A for the year ended December 31, 2023.


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Revenue recognized over time was as follows for the periods presented:
Three Months Ended
September 30,
Percentage of Total Net Sales
Three Months Ended September 30,
2024202320242023
Over time input method$15,020 $12,642 10.9 %8.7 %
Over time output method26,267 21,923 19.1 15.1 
Total over time sales$41,287 $34,565 30.0 %23.8 %

Nine Months Ended
September 30,
Percentage of Total Net Sales
Nine Months Ended September 30,
2024202320242023
Over time input method$42,259 $44,577 10.5 %10.9 %
Over time output method63,898 59,678 15.9 14.6 
Total over time sales$106,157 $104,255 26.4 %25.5 %

The timing of revenue recognition, billings, and cash collections results in billed receivables, costs in excess of billings (included in “Contract assets - net”), and billings in excess of costs (contract liabilities), included in “Deferred revenue” within the Condensed Consolidated Balance Sheets.

The following table sets forth the Company’s contract assets:
Contract Assets
Balance as of December 31, 2023$29,489 
Net additions to contract assets9,898 
Transfers from contract asset balance to accounts receivable (19,201)
Balance as of September 30, 2024
$20,186 

The following table sets forth the Company’s contract liabilities:
Contract Liabilities
Balance as of December 31, 2023$2,189 
Revenue recognized from contract liabilities(1,285)
Increase in billings in excess of cost, excluding revenue recognized 1,744 
Other adjustments(317)
Balance as of September 30, 2024
$2,331 

The Company has established policies regarding allowance for credit losses associated with contract assets, which includes standalone reserve assessments for its long term, complex contracts as needed as well as detailed regular review and updates to contract margins, progress, and value. A standard reserve threshold is applied to contract assets related to short term, less complex contracts. Management also regularly reviews collection patterns and future expected collections and makes necessary revisions to allowance for credit losses related to contract assets.

As of September 30, 2024, the Company had approximately $209,005 of remaining performance obligations, which are also referred to as backlog. Approximately 12.5% of the September 30, 2024 backlog was related to projects that are anticipated to extend beyond September 30, 2025.
Note 4. Goodwill and Other Intangible Assets
The following table presents the changes in goodwill balance by reportable segment for the period presented:
Rail, Technologies, and ServicesInfrastructure SolutionsTotal
Balance as of December 31, 2023$20,466 $12,121 $32,587 
Cougar purchase accounting adjustment— (445)(445)
Foreign currency translation impact738 — 738 
Balance as of September 30, 2024$21,204 $11,676 $32,880 

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On November 17, 2023, the Company acquired the operating assets of Cougar Mountain Precast, LLC, for which all purchase accounting adjustments were finalized as of March 31, 2024. Purchase accounting finalization during the first quarter of 2024 included adjustments to record $429 of gross intangible assets for customer relationships with a weighted average amortization period of 5 years.

The Company performs goodwill impairment tests annually during the fourth quarter, and also performs interim goodwill impairment tests if it is determined that it is more likely than not that the fair value of a reporting unit is less than the carrying amount. Qualitative factors are assessed to determine whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount, which included the impacts of current economic conditions, including but not limited to labor markets, supply chains, and other inflationary costs. However, these factors can be unpredictable and are subject to change. No interim goodwill impairment test was required as a result of the evaluation of qualitative factors as of September 30, 2024. However, future impairment charges could result if future projections diverge unfavorably from current expectations.

The following table sets forth the components of the Company’s intangible assets for the periods presented:
September 30, 2024
Weighted Average
Amortization
Period In Years		Gross
Carrying
Value		Accumulated
Amortization		Net
Carrying
Amount
Patents10$328 $(206)$122 
Customer relationships1528,672 (19,886)8,786 
Trademarks and trade names148,045 (5,117)2,928 
Technology932,786 (28,811)3,975 
Favorable lease6327 (118)209 
$70,158 $(54,138)$16,020 

December 31, 2023
Weighted Average
Amortization
Period In Years		Gross
Carrying
Value		Accumulated
Amortization		Net
Carrying
Amount
Patents10$335 $(199)$136 
Customer relationships1627,712 (17,236)10,476 
Trademarks and trade names167,989 (4,593)3,396 
Technology932,658 (27,906)4,752 
Favorable lease6327 (77)250 
$69,021 $(50,011)$19,010 

Note 5. Accounts Receivable
Changes in reserves for uncollectible accounts are recorded as part of “Selling and administrative expenses” in the Condensed Consolidated Statements of Operations, and were an expense of $0 and $732 for the three months ended September 30, 2024 and 2023, respectively, and an expense of $529 and $1,174 for the nine months ended September 30, 2024 and 2023, respectively. The changes in reserves for uncollectible accounts are net of recoveries of previous write-offs of $263 for the three and nine months ended September 30, 2024.

The Company established the allowance for credit losses by calculating the amount to reserve based on the age of a given trade receivable and considering historical collection patterns, bad debt expense experience, expected future trends of collections, current and expected market conditions, and any other relevant subjective adjustments as needed. Management maintains high-quality credit review practices and positive customer relationships that mitigate credit risks. The Company’s reserves are regularly reviewed and revised as necessary.

The following table sets forth the Company’s allowance for credit losses:
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Allowance for Credit Losses
Balance as of December 31, 2023$809 
Additions to the current period provision 792 
Write-off against allowance(36)
Recoveries of previous write-offs(263)
Balance as of September 30, 2024$1,302 
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Note 6. Inventory
Inventory is valued at average cost or net realizable value, whichever is lower. The Company’s components of inventory are summarized in the following table for the periods presented:
September 30,
2024		December 31,
2023
Finished goods$45,582 $44,518 
Work-in-process2,952 4,675 
Raw materials25,343 23,918 
Inventories - net$73,877 $73,111 
Note 7. Long-Term Debt and Related Matters
Long-term debt consisted of the following:
September 30,
2024		December 31,
2023
Revolving credit facility$68,029 $55,060 
Finance leases and financing agreements515 213 
Total68,544 55,273 
Less current maturities(167)(102)
Long-term portion$68,377 $55,171 

On August 13, 2021, the Company, its domestic subsidiaries, and certain of its Canadian and United Kingdom subsidiaries (collectively, the “Borrowers”), entered into the Fourth Amended and Restated Credit Agreement (the “Credit Agreement”) with PNC Bank, N.A., Citizens Bank, N.A., Wells Fargo Bank, National Association, Bank of America, N.A., and BMO Harris Bank, National Association. The Credit Agreement, as amended, modifies the prior amended revolving credit facility, on terms more favorable to the Company and extends the maturity from April 30, 2024 to August 13, 2026. The Credit Agreement provides for a five-year, revolving credit facility that permits aggregate borrowings of the Borrowers up to $130,000 with a sublimit of the equivalent of $25,000 U.S. dollars that is available to the Canadian and United Kingdom borrowers in the aggregate. The Credit Agreement’s incremental loan feature permits the Company to increase the available commitments under the facility by up to an additional $50,000 subject to the Company’s receipt of increased commitments from existing or new lenders and the satisfaction of certain conditions. On August 12, 2022, the Company entered into a second amendment to its Credit Agreement (the “Second Amendment”) which added an additional tier to the pricing grid and provided for the conversion from LIBOR-based to SOFR-based borrowings.

Borrowings under the Credit Agreement, as amended, will bear interest at rates based upon either the base rate or SOFR rate plus applicable margins. The Credit Agreement includes two financial covenants: (a) Maximum Gross Leverage Ratio, defined as the Company’s consolidated Indebtedness (as defined in the Credit Agreement) divided by the Company’s consolidated EBITDA, which must not exceed (i) 3.25 to 1.00 for all testing periods other than during an Acquisition Period (as defined in the Credit Agreement), and (ii) 3.50 to 1.00 for all testing periods occurring during an Acquisition Period, and (b) Minimum Consolidated Fixed Charge Coverage Ratio, defined as the Company’s consolidated EBITDA divided by the Company’s Fixed Charges (as defined in the Credit Agreement), which must be more than 1.05 to 1.00. As of September 30, 2024, the Company was in compliance with the covenants in the Credit Agreement, as amended, and had outstanding letters of credit of approximately $2,264.
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Note 8. Earnings Per Common Share
(Share amounts in thousands)

The following table sets forth the computation of basic and diluted earnings per common share for the periods indicated:
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Numerator for basic and diluted earnings per common share:
Net income attributable to L.B. Foster Company$35,905 $515 $43,188 $1,894 
Denominator:
Weighted average shares outstanding10,718 10,813 10,757 10,804 
Denominator for basic earnings per common share10,718 10,813 10,757 10,804 
Effect of dilutive securities:
Stock compensation plans274 160 302 91 
Dilutive potential common shares274 160 302 91 
Denominator for diluted earnings per common share - adjusted weighted average shares outstanding10,992 10,973 11,059 10,895 
Basic earnings per common share$3.35 $0.05 $4.01 $0.18 
Diluted earnings per common share$3.27 $0.05 $3.91 $0.17 
Note 9. Income Taxes
For the three months ended September 30, 2024 and 2023, the Company recorded an income tax benefit of $29,745 and $121, respectively, on pre-tax income of $6,153 and $326, respectively, for an effective income tax rate of (483.4%) and (37.1%), respectively. For the nine months ended September 30, 2024 and 2023, the Company recorded an income tax benefit of $29,110 and $99, respectively, on pre-tax income of $14,010 and $1,670, respectively, for an effective income tax rate of (207.8%) and (5.9%), respectively.

The Company’s effective income tax rate for the three and nine months ended September 30, 2024 differed from the federal statutory rate of 21% primarily due to the change in valuation allowance previously recorded against certain U.S. federal and state deferred tax assets. When a change in a valuation allowance is recognized in an interim period, the change in valuation allowance resulting from current year income is included in the annual effective tax rate, and the release of valuation allowance supported by projections of future taxable income is recorded as a discrete tax benefit in the interim period. Accordingly, during the quarter ended September 30, 2024, the Company recognized an income tax benefit of $30,045 comprised of both a discrete tax benefit and change in the Company’s estimated annual effective tax rate arising from the change in valuation allowance. The Company continued to maintain a valuation allowance against deferred tax assets related to operating loss carryforwards in certain U.S. state and foreign jurisdictions.

The Company regularly assesses the need for a valuation allowance against its deferred tax assets. A valuation allowance is required to be established or maintained, when based on currently available information and other factors, it is more likely than not that all or a portion of a deferred tax asset will not be realized. The Company has considered all evidence, both positive and negative, in assessing the need for a valuation allowance in each jurisdiction.

The positive evidence considered in evaluating U.S. federal and state deferred tax assets included the Company’s cumulative financial income position over the previous three years, as well as the composition and reversal patterns of existing taxable and deductible temporary differences between financial reporting and tax. Based on its evaluation, the Company believed it was appropriate to rely on forecasted future taxable income to support its U.S. federal and state deferred tax assets. The amount of deferred tax assets considered realizable; however, could be adjusted if negative evidence outweighs additional subjective evidence such as the Company’s projections for growth.