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Forum List » Business News and Headlines SEC Filings, Earing Reports, Press Releases  
L.B. Foster Company Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 10, 2011 01:22PM
L.B. Foster Company (FSTR) filed Quarterly Report for the period ended 2011-05-10. Highlight of Business Operations:We closed on our acquisition of Portec Rail on December 15, 2010 and our 2011 first quarter results include the results of operations of Portec Rail within our Rail Products segment. For the three months ended March 31, 2011, Portec Rail delivered net sales of $23.3 million, gross profit of $5.0 million, total expenses of $6.2 million and a net loss of ($0.9) million. In December 2010, the UPRR opted not to extend the supply agreement and lease renewal for the Grand Island, NE plant. Production for the remaining orders was completed during the first quarter of 2011. We believe the dismantling of the facility according to the terms of the supply agreement and the winding down of operations will be completed in the third quarter of 2011. Sales to the UPRR from this facility approximated $2.1 million and $4.7 million for the three months ended March 31, 2011 and 2010, respectively. We do not believe that the closure of this facility will have a significant, adverse impact on our results of operations or our liquidity. In April 2011, we entered into a third amendment to the L B Pipe & Coupling Products, LLC (JV) agreement which increased our required capital contributions by approximately $0.7 million. In connection with the agreement we are now required to contribute capital totaling approximately $2.9 million. In May 2011, we entered into a new $125.0 million revolving credit and security agreement with a group of four banks. The agreement provides for a five-year, unsecured revolving credit facility that permits borrowing up to $125.0 million for the US Borrowers, including a sublimit of the equivalent of $15.0 million US dollars that is available to the Canadian Borrowers. Providing no event of default exists, the agreement contains a provision that provides for an increase in the revolver facility of $50.0 million that can be allocated to existing or new Lenders if our borrowing requirements should grow. The agreement includes a sublimit of $20.0 million for the issuance of trade and standby letters of credit. Net income for the first quarter of 2011 was $0.07 per diluted share which compares to net income for the first quarter of 2010 of $0.17 per diluted share. The integration of Portec Rail resulted in the increase of selling and administrative expenses of approximately $5.6 million. Exclusive of the impact of Portec Rail, selling and administrative expenses in the 2011 period increased approximately $1.0 million due to increased compensation costs and consulting services. As a result of the acquisitions of Portec Rail and Interlocking Deck Systems International, LLC, amortization expense increased by approximately $0.7 million for the three months ended March 31, 2011.
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