L.B. Foster Company, a 124-year-old infrastructure materials and technology provider, outlined its post-restructuring progress at the 17th Annual Midwest IDEAS Conference on Thursday. The Pittsburgh-based firm, trading under the ticker FSTR, reported a trailing twelve-month gross margin of 21.4%, a 460-basis-point improvement from 16.8% in 2021, following a portfolio overhaul that included more than seven divestitures and product line exits since 2021.
Chief Executive Officer John Kasel emphasized the completion of the company’s most intensive restructuring phase during the event. "The heavy lifting is behind us," Kasel stated. The company’s net debt has since declined to $42 million, down from $77 million in Q2 2023, with gross leverage at 1.0x—within its target range of 1.0x to 1.5x. Total available funding stands at $107.5 million, including $28.7 million remaining under its share repurchase authorization, which has seen 9.3% of outstanding shares bought back since February 2023.
Financial performance showed continued recovery in Q2, with operating cash flow reaching $17.9 million—the highest level since 2017. Adjusted EBITDA for the trailing twelve months improved to 7.5% of sales, up from 3.6% in 2021, while year-to-date adjusted EBITDA grew by $3.8 million, or 19.6%, despite a sequential decline of $575,000 in Q2. The company’s 2024 adjusted EBITDA guidance ranges from $41 million to $46 million, compared with $19 million in 2021.
Sales guidance for 2024 is set between $540 million and $580 million, implying flat to 7.4% year-over-year growth. The company’s Rail Products division, which holds roughly 42% market share in its niche, faces a sequentially softer quarter due to timing, with Q2 sales down 3.5%. Year-to-date sales, however, rose 7.6% to $18.3 million year-over-year. The Rail Technology segment, encompassing Global Friction Management and Total Track Monitoring, targets a $570 million total addressable market with approximately 18% share and continues to see double-digit organic growth in North America and Western Europe.
L.B. Foster’s UK operations, centered on TEW Engineering, have reduced SG&A costs following exits from long-cycle projects such as Crossrail. The company also highlighted $71 million in federal net operating losses, targeting annual cash tax payments of around $2 million. Capital expenditures for growth are expected to reach 2.7% of sales in 2024, above the historical range of 2% to 2.5%.
