Q2 2025 L B Foster Co Earnings Call Transcript
Key Points
- L.B. Foster Co (FSTR) returned to sales growth in the second quarter with a 2% increase year-over-year, driven by a 22.4% rise in the Infrastructure segment.
- The company achieved a 51.4% increase in adjusted EBITDA despite modest sales growth, highlighting strong strategic execution.
- Net debt decreased to $77.4 million, with gross leverage improving to 2.2 times from 2.7 times last year.
- The backlog for both segments increased significantly, with a 42.5% rise in the Rail segment, setting a solid foundation for future growth.
- Successful negotiation of an amendment to the revolving credit facility increased borrowing capacity and extended tenure, reflecting confidence from banking partners.
- Rail revenues declined by 11.2% due to delayed order development and reduced activities in the UK.
- The UK market remains challenging, necessitating rightsizing efforts and impacting profitability.
- The exit of an automation and material handling product line in the UK resulted in a $1.1 million charge.
- The effective tax rate was high at 55% due to not recognizing a tax benefit on UK pretax losses.
- The full-year guidance was slightly lowered due to the Rail segment's weaker performance in the first half of the year.
Good day and thank you for standing by. Welcome to the L B Foster second quarter 2025 earnings call.
(Operator Instructions) Please be advised today's conference is being recorded.
I would like to turn the call over to your speaker today, Lisa Durante, please go ahead.
Thank you, operator. Good morning, everyone, and welcome to L B Foster's second quarter Of 2025 earnings call. My name is Lisa Durante, the company's Director of Financial Reporting and Investor Relations. Our President and CEO, John Kasel; and our Chief Financial Officer, Bill Thalman, will be presenting our second quarter operating results market outlook and business development this morning.
We'll start the call with John providing his perspective on the company's second quarter performance. Bill will then review the company's second quarter financial results. Jon will provide perspective on market developments and company outlook in his closing comments. We will then open up the session for questions.
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