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FOSTER L B CO

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Business Summary

L.B. Foster Company is a global technology solutions provider of engineered, manufactured products and services that builds and supports infrastructure, operating in the rail and infrastructure markets. The Company maintains locations in North America, South America, Europe, and Asia. The major markets for the Company's products are highly competitive, with product availability, quality, service, and price being the principal factors of competition. No other company provides the same product mix to the various markets the Company serves, but there are one or more companies that compete with the Company in each product line, so the Company faces significant competition from different groups of companies.

The Company's Rail segment faces competition from companies in each of its product lines, and the Infrastructure segment competes in highly competitive markets for precast concrete, steel bridge products, and protective pipe coatings. The Company's competitive advantages include its innovative engineering and product development solutions that address safety, reliability, and performance needs, as well as its proprietary license agreements for technologies like ENVIROCAST and ENVIROKEEPER. The Company is a leading, high-end supplier of precast buildings in terms of volume, product options, and capabilities. For the year ended December 31, 2024, net sales to one customer of the Rail segment represented approximately $71,800 of the Company's consolidated net sales.

The Company generates revenue through the sale of goods and services across two reporting segments: Rail, Technologies, and Services (Rail) and Infrastructure Solutions (Infrastructure). Revenue is recognized when performance obligations are satisfied, either at a point in time or over time for long-term agreements. The Company's revenue mix includes both transactional product sales and recurring service revenue, with point-in-time revenue accounting for 76.2% and 72.6% of revenue for the years ended December 31, 2025 and 2024, respectively. The Company serves customers including freight and passenger railroads, industrial companies, contractors, and government entities for public infrastructure projects.

The Rail segment, which accounted for 57% of net sales in 2025, is comprised of the Rail Products, Global Friction Management, and Technology Services and Solutions business units. Rail Products includes Rail Distribution, which sells new rail and accessories; Allegheny Rail Products, which engineers and manufactures insulated rail joints; and Transit Products, which supplies direct fixation fasteners, coverboards, and power rail. Global Friction Management engineers and manufactures friction management products and application systems to optimize rail-wheel interface performance. Technology Services and Solutions engineers and manufactures Total Track Monitoring railroad condition monitoring systems, including wheel impact load detection systems, and provides controls, displays, digital signage, and telecommunication contract management solutions. For the year ended December 31, 2025, Rail Products net sales were $188,255 , Global Friction Management net sales were $78,513 , and Technology Services and Solutions net sales were $38,958 .

The Infrastructure segment, which accounted for 43% of net sales in 2025, is composed of the Precast Concrete Products and Steel Products business units. Precast Concrete Products manufactures precast concrete buildings under the CXT brand, including restrooms, concession stands, and protective storage buildings, as well as sound walls, bridge beams, and water management products. Steel Products provides custom engineered solutions including fabricated steel and aluminum bridge products, protective pipe coatings for oil and gas transmission pipelines, and threaded pipe for water well applications. For the year ended December 31, 2025, Precast Concrete Products net sales were $163,123 and Steel Products net sales were $71,160 .

During 2025, the Company announced the discontinuation of the Automation and Materials Handling product line (AMH Exit) within the Rail segment, completing all remaining customer obligations in 2025, and incurred a total of $1,351 in exit costs. The Company also completed a restructuring program in the UK-based Technology Services and Solutions businesses within the Rail segment, incurring a total of $2,184 in restructuring and other costs. On June 27, 2025, the Company entered into the Fifth Amended and Restated Credit Agreement, increasing the revolving credit facility from $130,000 to $150,000 and extending the maturity date to June 27, 2030. During the year ended December 31, 2025, the Company repurchased a total of 582,389 shares for $14,436 under its stock repurchase programs. On March 3, 2025, the Board authorized a new repurchase program of up to $40,000 through February 29, 2028.

For the fiscal year ended December 31, 2025, total net sales were $540,009 , an increase of $9,244 or 1.7% from $530,765 in 2024. Net income attributable to L.B. Foster Company was $7,545 , compared to $42,946 in the prior year, with diluted EPS of $0.69 versus $3.89 . The decline in net income was primarily due to a $31,937 favorable tax valuation allowance adjustment in 2024 and a higher effective tax rate in 2025. Gross profit margin declined 110 basis points to 21.1% , while operating income margin improved 20 basis points to 4.1% . Net cash provided by operating activities was $35,619 .

Business Outlook

The Company's growth strategy includes expanding its Precast Concrete Products business, as evidenced by the commencement of operations in 2025 at a new leased facility in Lake County, Florida, which produces precast concrete wall systems. The Company also possesses proprietary license agreements for ENVIROCAST, a pre-insulated concrete wall system, and ENVIROKEEPER, a modular in-ground water retention and management system, which can be applied at all of its manufacturing facilities. In the Rail segment, the Technology Services and Solutions business unit focuses on innovation in digital communication technology solutions for rail, infrastructure, and the built environment, including Total Track Monitoring systems, which create a smart interface between conventional rail products and intelligent digital technologies to monitor safety and enable the digital railway.

The Company's growth in the Infrastructure segment is supported by increased demand in markets served, with Precast Concrete Products net sales increasing $27,080 or 19.9% over the prior year, and Steel Products net sales increasing $3,307 or 4.9% . In the Rail segment, Global Friction Management net sales improved $12,529 or 19.0% over the prior year due to improved demand. The Company's Rail segment backlog increased $34,531 or 55.3% to $96,980 as of December 31, 2025, driven by a 114.0% improvement in Technology Services and Solutions, a 68.8% improvement in Global Friction Management, and a 29.5% improvement in Rail Products.

Gross profit margin declined 110 basis points to 21.1% in 2025, driven by a decline in Rail gross profit of $10,139 due to lower sales volumes and weakness in the UK Rail business, partially offset by an improvement in Infrastructure gross profit of $5,829 . Selling and administrative expenses as a percentage of net sales declined 180 basis points to 16.4% in 2025, primarily due to decreases in personnel costs, travel and entertainment, insurance, professional services, and legal costs. The Company incurred $2,184 in restructuring costs in 2025 related to the UK-based Technology Services and Solutions businesses and $1,351 in AMH Exit costs, which impacted gross profit.

The Company's operational outlook includes the completion of the AMH Exit and the UK restructuring program, both of which were completed as of December 31, 2025, with no additional material costs expected. The Company commenced operations at a new leased precast concrete facility in Lake County, Florida in 2025, which produced precast concrete wall systems. The Company also completed the migration to a new ERP system in 2024, with the most recent migration completed in 2024, and acquired entities are regularly assessed for transition onto the central ERP system. As of December 31, 2025, the Company had 1,191 employees, of which 974 were located within the US, 44 within Canada, 166 in Europe, and 7 within other locations.

Capital expenditures for the year ended December 31, 2025 were $10,424 , a $633 increase over 2024, primarily relating to general plant and operational improvements and organic growth initiatives, including investments in the new Precast Concrete facility in Lake County, Florida. The Company's Board of Directors authorized a new stock repurchase program on March 3, 2025, for up to $40,000 of the Company's common stock through February 29, 2028. As of December 31, 2025, the Company had repurchased 469,220 shares for $11,313 under this program. The Company did not declare any quarterly dividends during 2025 and 2024, but there is potential for ordinary or special dividends in future years.

The Company faces headwinds from adverse economic conditions in the markets it serves, including recession, volatility in oil and gas prices, tariffs, duties or trade wars, inflation, rising labor costs, project delays, and budget shortfalls. The Company's UK operations represented approximately 6% and 8% of total revenue for the years ended December 31, 2025 and 2024, respectively, and are subject to risks from geopolitical conditions, including the ongoing conflicts between Russia and Ukraine, conflicts in the Middle East, and increasing tensions between China and Taiwan. The Company also faces risks from the imposition of widespread tariffs on steel imports, which could significantly increase raw material costs and disrupt supply chains.

The Company's growth plan is constrained by its dependence on governmental funding for infrastructure projects, as a substantial portion of its operations is heavily dependent on such funding. A lack of, freezing of, or delay in state or federal funding for infrastructure projects could adversely impact the Company's results. Additionally, the Company's ability to execute its strategic plan, including cost reduction initiatives and integration of acquired businesses, is subject to risks that it may not realize anticipated synergies and benefits. The Company also faces risks from the cyclical nature of the steel industry, which is subject to price and availability fluctuations due to domestic and international fiscal policy, including tariffs.

Risk Factors

The Company's business is heavily dependent on governmental funding of infrastructure projects, and a lack of, freezing of, or delay in state or federal funding could materially adversely affect results. The Company faces significant exposure to fluctuations in steel prices and availability, as steel is a significant product component, and the imposition of widespread tariffs on steel imports could significantly increase raw material costs and disrupt supply chains. The Company's UK operations, which represented approximately 6% of total revenue in 2025, are subject to risks from geopolitical conditions, including conflicts in the Middle East and tensions between China and Taiwan, as well as the impact of the UK's parliamentary elections and US presidential and congressional elections. The Company is a potentially responsible party regarding the Portland Harbor Superfund Site, with the EPA estimating the net present value of the selected remedy at approximately $1.1 billion and undiscounted costs at approximately $1.7 billion , and while management does not currently believe this will have a material adverse effect, an unfavorable resolution could have a material adverse effect. The Company's ability to use its net operating loss carryforwards, which include a federal NOL carryforward of $76,546 , may be limited under Sections 382 and 383 of the Internal Revenue Code if an ownership change occurs, which could result in increased future tax liability.

Management Priorities

Management's message emphasizes the Company's focus on executing its strategic plan, including cost reduction initiatives and scaling back businesses in the UK, as evidenced by the AMH Exit and the UK restructuring program. Management highlights the improvement in Infrastructure segment operating income, which increased $6,412 or 68.4% over the prior year, driven by volume increases in both business units. The strategic priorities emphasized for the period ahead include reducing costs within the UK-based Technology Services and Solutions businesses, enabling investment in growth platforms, and continuing to focus on organic growth initiatives such as the new Precast Concrete facility in Florida. Management also notes the successful completion of the Fifth Amended and Restated Credit Agreement, which provides increased borrowing capacity and extends the maturity date to June 27, 2030.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 8, Note 3 — Revenue
  2. [2] Item 8, Note 3 — Revenue
  3. [3] Item 1, Business — Business Segments
  4. [4] Item 8, Note 2 — Business Segments
  5. [5] Item 8, Note 2 — Business Segments
  6. [6] Item 8, Note 2 — Business Segments
  7. [7] Item 1, Business — Business Segments
  8. [8] Item 8, Note 2 — Business Segments
  9. [9] Item 8, Note 2 — Business Segments
  10. [10] Item 8, Note 2 — Business Segments
  11. [11] Item 8, Note 18 — Restructuring Costs
  12. [12] Item 7, MD&A — Liquidity and Capital Resources
  13. [13] Item 8, Note 9 — Long-Term Debt and Related Matters
  14. [14] Item 8, Note 10 — Stockholders' Equity
  15. [15] Item 8, Note 10 — Stockholders' Equity
  16. [16] Item 5, Market for Registrant's Common Equity
  17. [17] Item 8, Consolidated Statements of Operations
  18. [18] Item 7, MD&A — Full Year Results Comparison
  19. [19] Item 7, MD&A — Full Year Results Comparison
  20. [20] Item 8, Consolidated Statements of Operations
  21. [21] Item 8, Consolidated Statements of Operations
  22. [22] Item 8, Consolidated Statements of Operations
  23. [23] Item 8, Consolidated Statements of Operations
  24. [24] Item 8, Consolidated Statements of Operations
  25. [25] Item 7, MD&A — Full Year Results Comparison
  26. [26] Item 7, MD&A — Full Year Results Comparison
  27. [27] Item 7, MD&A — Full Year Results Comparison
  28. [28] Item 8, Consolidated Statements of Cash Flows
  29. [29] Item 7, MD&A — Results of Operations — Segment Analysis
  30. [30] Item 7, MD&A — Results of Operations — Segment Analysis
  31. [31] Item 7, MD&A — Results of Operations — Segment Analysis
  32. [32] Item 7, MD&A — Results of Operations — Segment Analysis
  33. [33] Item 7, MD&A — Results of Operations — Segment Analysis
  34. [34] Item 7, MD&A — Results of Operations — Segment Analysis
  35. [35] Item 7, MD&A — Results of Operations — Segment Analysis
  36. [36] Item 7, MD&A — Results of Operations — Segment Analysis
  37. [37] Item 7, MD&A — Backlog
  38. [38] Item 7, MD&A — Results of Operations — Segment Analysis
  39. [39] Item 7, MD&A — Results of Operations — Segment Analysis
  40. [40] Item 7, MD&A — Results of Operations — Segment Analysis
  41. [41] Item 7, MD&A — Full Year Results Comparison
  42. [42] Item 7, MD&A — Full Year Results Comparison
  43. [43] Item 7, MD&A — Full Year Results Comparison
  44. [44] Item 7, MD&A — Full Year Results Comparison
  45. [45] Item 8, Note 18 — Restructuring Costs
  46. [46] Item 8, Note 2 — Business Segments
  47. [47] Item 1, Business — Human Capital Management
  48. [48] Item 1, Business — Human Capital Management
  49. [49] Item 1, Business — Human Capital Management
  50. [50] Item 1, Business — Human Capital Management
  51. [51] Item 1, Business — Human Capital Management
  52. [52] Item 8, Consolidated Statements of Cash Flows
  53. [53] Item 7, MD&A — Cash Flows from Investing Activities
  54. [54] Item 5, Market for Registrant's Common Equity
  55. [55] Item 7, MD&A — Cash Flows from Financing Activities
  56. [56] Item 7, MD&A — Cash Flows from Financing Activities
  57. [57] Item 1A, Risk Factors — International Risks
  58. [58] Item 1A, Risk Factors — International Risks
  59. [59] Item 1A, Risk Factors — International Risks
  60. [60] Item 8, Note 16 — Commitments and Contingent Liabilities
  61. [61] Item 8, Note 16 — Commitments and Contingent Liabilities
  62. [62] Item 8, Note 13 — Income Taxes
  63. [63] Item 7, MD&A — Results of Operations — Segment Analysis
  64. [64] Item 7, MD&A — Results of Operations — Segment Analysis
  65. [65] Item 8, Consolidated Statements of Operations
  66. [66] Item 8, Consolidated Statements of Operations
  67. [67] Item 8, Consolidated Statements of Operations
  68. [68] Item 8, Consolidated Statements of Operations
  69. [69] Item 8, Consolidated Statements of Operations
  70. [70] Item 8, Consolidated Statements of Operations
  71. [71] Item 8, Consolidated Statements of Operations
  72. [72] Item 8, Consolidated Statements of Operations
  73. [73] Item 7, MD&A — Full Year Results Comparison
  74. [74] Item 7, MD&A — Full Year Results Comparison
  75. [75] Item 8, Consolidated Statements of Operations
  76. [76] Item 8, Consolidated Statements of Operations
  77. [77] Item 7, MD&A — Full Year Results Comparison
  78. [78] Item 7, MD&A — Full Year Results Comparison
  79. [79] Item 8, Consolidated Statements of Cash Flows
  80. [80] Item 8, Consolidated Statements of Cash Flows
  81. [81] Item 8, Note 9 — Long-Term Debt and Related Matters
  82. [82] Item 8, Note 9 — Long-Term Debt and Related Matters
  83. [83] Item 8, Consolidated Balance Sheets
  84. [84] Item 8, Consolidated Balance Sheets
  85. [85] Item 7, MD&A — Full Year Results Comparison
  86. [86] Item 7, MD&A — Full Year Results Comparison
  87. [87] Item 7, MD&A — Full Year Results Comparison
  88. [88] Item 8, Note 2 — Business Segments
  89. [89] Item 8, Note 2 — Business Segments
  90. [90] Item 8, Note 2 — Business Segments
  91. [91] Item 8, Note 2 — Business Segments

Analysis on 6/21/2026