L.B. Foster Company · NASDAQ:FSTR

L.B. Foster — Q4 2015 Earnings Presentation

39 slides from L.B. Foster's earnings presentation, Mar 1, 2016

  1. Slide 1: 4Q15 Earnings Presentation

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 www.lbfoster.com 4Q15 Earnings Presentation March 1, 2016 1

  2. Slide 2: Safe Harbor Statement

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Safe Harbor Statement This presentation and oral statements regarding the subject matter may contain “forward- looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 19

  3. Slide 3: Introduction – Business Highlights

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Introduction – Business Highlights Full Year Results  Record sales in 2015 of $625 Million  Solid gross margin performance of 21.4%  Faced weak markets and declining steel prices  Adjusted EBITDA¹ of $59 Million f

  4. Slide 4: Introduction – Business Climate

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Introduction – Business Climate  N. American freight rail industry weakened throughout 2015  Loss of Union Pacific Railroad sales  Energy related businesses face market volatility and further weakness  Weak result

  5. Slide 5: 2015 Sales - Consolidated

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 2015 Sales - Consolidated Year over Year Sales Comparison 2015 2014 Delta % Full Year 2015 Sales 624,523 607,192 17,331 2.9% Acquired Companies 93,411 16,670 76,741 n/m Base Business 531,112 590,522 59,410 (10.1%)  C

  6. Slide 6: Acquisitions: 2014 through 2015

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Acquisitions: 2014 through 2015 Year Company Location Markets Served / Expertise Segment Acquired 2014 FWO Germany Friction management systems and technology Rail Lost $100K Ideal transit design with established custo

  7. Slide 7: Percentage of Net Sales

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Percentage of Net Sales 2015 2014 Rail Products & Services 53% 62% Construction Products 28% 29% Tubular & Energy Services 19% 9% 100% 100%  Percent of total net sales by business segment including acquisitions  Tub

  8. Slide 8: 4th Quarter Results – Rail Segment ($000)

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 4th Quarter Results – Rail Segment ($000) Y-O-Y Q4 2015 Q4 2014 Delta % Rail Segment Sales 76,452 91,530 (15,078) (16.5%) Gross Profit (excluding warranty- 23.4% 25.9% related charges) ¹ Sales Bridge UPRR 595 10,340 (

  9. Slide 9: Performance Summary – Rail Segment ($000)

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Performance Summary – Rail Segment ($000) 2015 2014 Delta % Rail Segment 328,982 374,615 (45,633) 12.2% Gross Profit (excluding warranty- 23.2% 23.1% 10 bps related charges) Sales Bridge UPRR 15,217 41,521 (26,304) (6

  10. Slide 10: Performance Summary – Construction Segment ($000)

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Performance Summary – Construction Segment ($000) 2015 2014 Delta Sales – Q4 38,494 59,747 (35.6%) Gross Profit 19.4% 17.7% Sales – 2015 176,394 178,847 (1.4%) Gross Profit 19.4% 18.1%  Very weak year for commodity p

  11. Slide 11: Performance Summary – Tubular & Energy Services Segment

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Performance Summary – Tubular & Energy Services Segment ($000) 2015 2014 Delta Sales – Q4 24,192 9,872 145% Gross Profit 11.8% 20.1% Sales – 2015 119,147 53,730 122% Gross Profit 18.9% 21.8% Acquisitions - 2015 71,954

  12. Slide 12: Restructuring Actions – Test & Inspections Services (IOS)

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Restructuring Actions – Test & Inspections Services (IOS) • Action taken to adjust costs  Service center consolidations  Consolidation into fewer regions  Reduction in field service technicians according to volume

  13. Slide 13: Adjusted EPS Summary – Impact from Test & Inspection Services

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Adjusted EPS Summary – Impact from Test & Inspection Services Adjusted EPS Impact to Consolidated Results Test & Inspection Consolidated Services All Other Adj. Results Q4 – 2015 Adjusted Non-GAAP ¹ $(0.25) $0.44 $0.1

  14. Slide 14: Consolidated Financial Metrics 4th Quarter 2015 vs. 4th Quarter 2014

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Consolidated Financial Metrics Webcast on March 1, 2016 4th Quarter 2015 vs. 4th Quarter 2014 ($000’s) Q4 2015 Q4 2014 Actual Actual Delta $ % $ % $ % Sales $139,138 $161,149 $(22,011) (13.7%) Diluted EPS - REPORTED $0.32 $0.58 $(0.26) (44.8%

  15. Slide 15: Adjusted EPS Bridge 4th Quarter Year over Year

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Adjusted EPS Bridge 4th Quarter Year over Year $0.85 4th Quarter 2015 Oper. Cash Flow $42,484 $(0.45) Adj. EBITDA $11,153 Adjusted Lost revenue  UPRR $(0.25) EPS  Weak markets  Steel pricing $0.04 $0.19 $/share Acq

  16. Slide 16: Consolidated Financial Metrics 2015 Actual vs. 2014

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Consolidated Financial Metrics Webcast on March 1, 2016 2015 Actual vs. 2014 ($000’s) 2015 2014 Actual Actual Delta $ % $ % $ % Sales (1) $624,523 $607,192 $17,331 2.9% Diluted EPS - REPORTED $(4.33) $2.48 $(6.81) (274.1%) EBITDA - REPORTED $

  17. Slide 17: Adjusted EPS & EBITDA Bridge 2014 - 2015

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Adjusted EPS & EBITDA Bridge 2014 - 2015 2014 Lost revenue Acquisitions 2015 EBITDA $60,291 $(11,959) $10,678 $59,010 $3.02 FY 2015 Oper. Cash Flow $56,172 $(0.94) Adj. EBITDA $59,010 EPS Lost revenue $/share  UPRR $

  18. Slide 18: Adjusted EPS Bridge 2014 - 2015

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Adjusted EPS Bridge 2014 - 2015 Growth Programs to replace lost sales Acquisition platforms New products Transit Rail (Automation Solution) $3.02 Europe Margin Recovery Test & Inspection Services Restructuring $(0.94)

  19. Slide 19: Operating Cash Flow ($000)

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Operating Cash Flow ($000) Q4-2015 Q4-2014 Operating Cash Flow 4th Quarter 42,484 16,992 2015 2014 Operating Cash Flow 56,172 66,739 2015 2014 Capex 14,913 17,056 Very strong cash flow performance in the quarter and f

  20. Slide 20: Full Year 2016 Financial Outlook

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Full Year 2016 Financial Outlook Financial Metric Outlook Consolidated Sales $610.0 million - $640.0 million EBITDA $48.0 million - $52.0 million Diluted EPS $1.00 to $1.40 Rail Products and Services Sales Flat to -5.

  21. Slide 21: Q1 2016 Financial Outlook

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Q1 2016 Financial Outlook Financial Metric Outlook Revenue Approximately $130.0 million EBITDA Approximately $7.0 million Loss of $0.05 to $0.10 EPS 21

  22. Slide 22: 4Q15 Financial Review

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 www.lbfoster.com 4Q15 Financial Review March 1, 2016 22

  23. Slide 23: Consolidated Income Statement Q4 2015 vs. Q4 2014 – As Reported

    LB Foster Company (FSTR) Consolidated Income Statement 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Q4 2015 vs. Q4 2014 – As Reported ($000) Q4 2015 Q4 2014 Actual Actual Delta $ % $ % $ % Sales $139,138 $161,149 $(22,011) (13.7%) Gross Profit 29,872 21.5% 31,605 19.6% (1,733) (5.5%) SG

  24. Slide 24: Consolidated Income Statement Q4 2015 vs. Q4 2014 – As Adjusted

    LB Foster Company (FSTR) Consolidated Income Statement 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Q4 2015 vs. Q4 2014 – As Adjusted¹ ($000) Q4 2015 Q4 2014 Actual Actual Delta $ % $ % $ % Sales $139,138 $161,149 $(22,011) (13.7%) Gross Profit 29,872 21.5% 36,371 22.6% (6,499) (17.9%)

  25. Slide 25: Sales by Business Segment Q4 2015 vs. Q4 2014

    LB Foster Company (FSTR) Sales by Business Segment 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Q4 2015 vs. Q4 2014 ($000) Q4 2015 Q4 2014 Delta Actual % Actual % $ % Rail $71,369 51.3% $91,530 56.8% $(20,161) (22.0%) Construction 38,494 27.7% 59,747 37.1% (21,253) (35.6%) Tubular/Energ

  26. Slide 26: Selling & Administrative Expenses Q4 2015 vs Q4 2014

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Selling & Administrative Expenses Q4 2015 vs Q4 2014 ($000) Delta 2015 2014 $ % Consolidated S&A $24,515 $21,546 $2,969 13.8% Less: Acquisition S&A 3,539 - 3,498 n/a Base Company S&A $20,976 $21,546 $(570) (2.6%) Perc

  27. Slide 27: Consolidated Income Statement 2015 Actual vs. 2014 – As Reported

    LB Foster Company (FSTR) Consolidated Income Statement 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 2015 Actual vs. 2014 – As Reported ($000) 2015 2014 Actual Actual Delta $ % $ % $ % Sales $624,523 $607,192 $17,331 2.9% Gross Profit 133,653 21.4% 121,591 20.0% 12,062 9.9% SG&A 92,648 1

  28. Slide 28: Consolidated Income Statement 2015 Actual vs. 2014 – As Adjusted

    LB Foster Company (FSTR) Consolidated Income Statement 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 2015 Actual vs. 2014 – As Adjusted¹ ($000) 2015 2014 Actual Actual Delta $ % $ % $ % Sales $624,523 $607,192 $17,331 2.9% Gross Profit 134,745 21.6% 130,965 21.6% 3,780 2.9% SG&A 92,648 1

  29. Slide 29: Sales by Business Segment 2015 vs. 2014

    LB Foster Company (FSTR) Sales by Business Segment 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 2015 vs. 2014 ($000) Delta 2015 2014 Base Company Actual % Actual % $ % Rail $312,268 50.0% $373,959 61.6% $(61,691) (16.5%) Construction 171,651 27.5% 173,948 28.6% (2,297) (1.3%) Tubular/En

  30. Slide 30: Selling and Administrative Expenses 2015 vs 2014

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Selling and Administrative Expenses 2015 vs 2014 ($000) Delta 2015 2014 $ % Consolidated S&A $92,648 $79,814 $12,834 16.1% Less: Acquisition S&A 14,351 688 13,663 n/a Base Company S&A $78,297 $79,126 $(829) (1.0%) Per

  31. Slide 31: Balance Sheets December 31, 2015 vs. 2014

    LB Foster Company (FSTR) Balance Sheets 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 December 31, 2015 vs. 2014 ($000) Dec 31, 2015 Dec 31, 2014 ASSETS Current assets: Cash and cash equivalents $33,312 $52,024 Accounts receivable-net 78,487 90,178 Inventories – net 96,396 95,089 Other c

  32. Slide 32: Cash Flow – Q4 2015 vs 2014

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Cash Flow – Q4 2015 vs 2014 ($000) Q4 Q4 2015 2014 Net Income adjusted for non-cash items $10,459 $9,359 Receivables 32,708 7,377 Inventory 5,614 1,967 Payables (1,146) 2,558 Working Capital Subtotal 37,176 11,902 All

  33. Slide 33: Annual Cash Flow – 2015 vs 2014

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Annual Cash Flow – 2015 vs 2014 ($000) 2015 2014 Net Income adjusted for non cash items $46,116 $38,233 Receivables 31,223 15,311 Inventory 4,331 (9,872) Payables (17,204) 16,285 Working Capital Subtotal 18,350 21,724

  34. Slide 34: New Orders Summary – 2015 vs. 2014 ($M)

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 New Orders Summary – 2015 vs. 2014 ($M) Delta New Orders Entered 2015 2014 $ % Tubular and Energy Services $55.7 $51.6 $4.1 7.9% Rail Products (1) $280.2 $355.1 $(74.9) (21.1%) Construction Products $143.6 $184.3 $(40

  35. Slide 35: 2015 vs 2014 Backlog Summary ($M)

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 2015 vs 2014 Backlog Summary ($M) Delta Backlog – Dec 31 2015 2014 $ % Rail – Base $71.3 $104.7 $(33.4) (31.9%) Construction – Base 40.7 62.9 (22.2) (35.3%) Tubular - Base 14.0 5.5 8.5 154.5% Subtotal - Base 126.0 173

  36. Slide 36: Appendix

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Appendix

  37. Slide 37: Non-GAAP Measures

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Non-GAAP Measures  This earnings report contains certain non-GAAP financial measures. These financial measures include gross profit margins and earnings per share excluding certain non- recurring charges as well as e

  38. Slide 38: Non-GAAP Measures (continued)

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Non-GAAP Measures (continued) Three Months Ended Twelve Months Ended December 31, December 31, 2015 2014 2015 2014 (in thousands except per share information) (Unaudited) (Unaudited) Net sales, as reported $ 139,138 $

  39. Slide 39: Non-GAAP Measures (continued)

    LB Foster Company (FSTR) 4th Quarter 2015 Earnings Report Webcast on March 1, 2016 Non-GAAP Measures (continued) Three Months Ended Twelve Months Ended December 31, December 31, 2015 2014 2015 2014 (in thousands except per share information) Adjusted EBITDA Reconciliation (Unaudited) (Unaudited) Net

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