Slides
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December 2024 L.B. Foster Company Investor Presentation Nasdaq - FSTR
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Safe Harbor Disclaimer 2 Safe Harbor Statement This presentation may contain “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Forward-looking statements provide management's current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Sentences containing words such as “believe,” “intend,” “plan,” “may,” “expect,” “should,” “could,” “anticipate,” “estimate,” “predict,” “project,” or their negatives, or other similar expressions of a future or forward-looking nature generally should be considered forward-looking statements. Forward-looking statements in this presentation are based on management's current expectations and assumptions about future events that involve inherent risks and uncertainties and may concern, among other things, the Company’s expectations relating to our strategy, goals, projections, and plans regarding our financial position, liquidity, capital resources, and results of operations and decisions regarding our strategic growth initiatives, market position, and product development. While the Company considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory, and other risks and uncertainties, most of which are difficult to predict and many of which are beyond the Company’s control. The Company cautions readers that various factors could cause the actual results of the Company to differ materially from those indicated by forward-looking statements. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Among the factors that could cause the actual results to differ materially from those indicated in the forward-looking statements are risks and uncertainties related to: a continuation or worsening of the adverse economic conditions in the markets we serve, including recession, the continued volatility in the prices for oil and gas, project delays, and budget shortfalls, or otherwise; volatility in the global capital markets, including interest rate fluctuations, which could adversely affect our ability to access the capital markets on terms that are favorable to us; restrictions on our ability to draw on our credit agreement, including as a result of any future inability to comply with restrictive covenants contained therein; a decrease in freight or transit rail traffic; environmental matters and the impact of recently-finalized environmental regulations, including any costs associated with any remediation and monitoring of such matters; the risk of doing business in international markets, including compliance with anti-corruption and bribery laws, foreign currency fluctuations and inflation, global shipping disruptions, and trade restrictions or embargoes; our ability to effectuate our strategy, including cost reduction initiatives, and our ability to effectively integrate acquired businesses or to divest businesses, such as the recent dispositions of the Track Components, Chemtec, and Ties businesses, and acquisitions of the Skratch Enterprises Ltd., Intelligent Video Ltd., VanHooseCo Precast LLC, and Cougar Mountain Precast, LLC businesses and to realize anticipated benefits; costs of and impacts associated with shareholder activism; the timeliness and availability of materials from our major suppliers, as well as the impact on our access to supplies of customer preferences as to the origin of such supplies, such as customers’ concerns about conflict minerals; labor disputes; cybersecurity risks such as data security breaches, malware, ransomware, “hacking,” and identity theft, which could disrupt our business and may result in misuse or misappropriation of confidential or proprietary information, and could result in the disruption or damage to our systems, increased costs and losses, or an adverse effect to our reputation, business or financial condition; the continuing effectiveness of our ongoing implementation of an enterprise resource planning system; changes in current accounting estimates and their ultimate outcomes; the adequacy of internal and external sources of funds to meet financing needs, including our ability to negotiate any additional necessary amendments to our credit agreement or the terms of any new credit agreement, the Company’s ability to manage its working capital requirements and indebtedness; domestic and international taxes, including estimates that may impact taxes; domestic and foreign government regulations, including tariffs; our ability to maintain effective internal controls over financial reporting (“ICFR”) and disclosure controls and procedures, including our ability to remediate any existing material weakness in our ICFR and the timing of any such remediation, as well as our ability to reestablish effective disclosure controls and procedures; the results of the UK’s 2024 parliamentary election, uncertainties related to the U.S. 2024 Presidential election and any corresponding changes to policy or other changes that could affect UK or U.S. business conditions; other geopolitical conditions, including the ongoing conflicts between Russia and Ukraine, conflicts in the Middle East, and increasing tensions between China and Taiwan; a lack of state or federal funding for new infrastructure projects; an increase in manufacturing or material costs; the loss of future revenues from current customers; any future global health crises, and the related social, regulatory, and economic impacts and the response thereto by the Company, our employees, our customers, and national, state, or local governments, including any governmental travel restrictions; and risks inherent in litigation and the outcome of litigation and product warranty claims. Should one or more of these risks or uncertainties materialize, or should the assumptions underlying the forward-looking statements prove incorrect, actual outcomes could vary materially from those indicated. Significant risks and uncertainties that may affect the operations, performance, and results of the Company’s business and forward-looking statements include, but are not limited to, those set forth under Item 1A, “Risk Factors,” and elsewhere in our Annual Report on Form 10-K/A for the year ended December 31, 2023, as amended on November 1, 2024, or as updated and/or amended by our other current or periodic filings with the Securities and Exchange Commission. All information in this presentation speaks only as of December 2024, and any distribution of the presentation after that date is not intended and will not be construed as updating or confirming such information. L.B. Foster Company assumes no obligation to update or revise any forward-looking information, whether as a result of new information, future events, or otherwise, except as required by securities laws. The information in this presentation is unaudited, except where noted otherwise. Non-GAAP Financial Measures This investor presentation discloses the following non-GAAP measures: • Earnings before interest, taxes, depreciation, and amortization (“EBITDA”) • Earnings before interest, taxes, depreciation, amortization, and certain charges (“Adjusted EBITDA”) • Adjusted EBITDA margin • Net debt • Gross Leverage Ratio per the Company’s credit agreement • Funding capacity • Free cash flow • Free cash flow yield • New orders • Book-to-bill ratio • Backlog • Organic sales growth (decline) • Enterprise value • Other certain metrics, as indicated, adjusted for non-routine items The Company believes that EBITDA is useful to investors as a supplemental way to evaluate the ongoing operations of the Company’s business since EBITDA may enhance investors’ ability to compare historical periods as it adjusts for the impact of financing methods, tax law and strategy changes, and depreciation and amortization. In addition, EBITDA is a financial measure that management and the Company’s Board of Directors use in their financial and operational decision-making and in the determination of certain compensation programs. Adjusted EBITDA adjusts for certain charges to EBITDA that the Company believes are unusual, non-recurring, unpredictable, or non-cash. In 2024, the Company made adjustments to exclude the gains on asset sales, restructuring costs and certain corporate legal costs. In 2023, the Company made adjustments to exclude the loss on divestitures, expenses from the bridge grid deck product line, bad debt provision for customer bankruptcy, and contingent consideration adjustments associated with the VanHooseCo acquisition.The Company also discloses adjusted EBITDA margin, which is adjusted EBITDA as a percent of net sales, which is useful to demonstrate adjusted EBITDA levels and growth relative to sales. Organic sales growth (decline) is a non-GAAP financial measure of sales growth (decline) excluding the effects of divestitures and product exits. Management believes this measure provides investors with a supplemental understanding of underlying trends by providing sales growth on a consistent basis. Management provides organic sales growth (decline) at the consolidated and segment levels. Portfolio changes are considered based on their comparative impact over the last twelve months, to determine the differences in year over year results due to these transactions. The Company also excluded the impact of non-routine items from certain metrics as indicated, in order to provide insight to Company performance on a base level without these non-routine items, which is useful to investors to better understand performance. The Company views net debt, which is total debt less cash and cash equivalents, and the Gross Leverage Ratio, as defined in the Second Amendment to its Fourth Amended and Restated Credit Agreement dated August 12, 2022, and the Fourth Amended and Restated Credit Agreement dated August 13, 2021, as important metrics of the operational and financial health of the organization and believe they are useful to investors as indicators of its ability to incur additional debt and to service its existing debt. The Company discloses funding capacity which is the net availability under the revolving credit facility plus cash and cash equivalents which the Company believes is useful to investors as it demonstrates the borrowing capacity of the Company. The Company discloses free cash flow as it is a non-GAAP measure used by both analysts and management, as it provides insight on cash generated by operations, excluding capital expenditures, in order to better assess the Company’s long-term ability to pursue growth and investment opportunities. The Company discloses free cash flow yield which is free cash flow per share over the market share price and is useful to investors as a measurement of shareholder returns.The Company defines new orders as a contractual agreement between the Company and a third-party in which the Company will, or has the ability to, satisfy the performance obligations of the promised products or services under the terms of the agreement. The Company defines book-to-bill ratio as new orders divided by sales. The Company believes this is a useful metric to assess supply and demand, including order strength versus order fulfillment. The Company defines backlog as contractual commitments to customers for which the Company’s performance obligations have not been met, including with respect to new orders and contracts for which the Company has not begun any performance. Management utilizes new orders, book-to-bill ratio, and backlog to evaluate the health of the industries in which the Company operates, the Company’s current and future results of operations and financial prospects, and strategies for business development. The Company believes that new orders and backlog are useful to investors as supplemental metrics by which to measure the Company’s current performance and prospective results of operations and financial performance. The Company discloses enterprise value which is calculated as the current share price by the total outstanding shares plus the Company's net debt. The Company believes is useful to investors as it reflects the current valuation of the Company. The Company has not reconciled the forward-looking adjusted EBITDA, adjusted EBITDA margin, free cash flow, free cash flow yield, or organic revenue growth to the most directly comparable GAAP measure because this cannot be done without unreasonable effort due to the variability and low visibility with respect to certain costs, the most significant of which are acquisition and divestiture-related costs and impairment expense. These underlying expenses and others that may arise during the year are potential adjustments to future earnings. The Company expects the variability of these items to have a potentially unpredictable, and a potentially significant, impact on our future GAAP financial results. Non-GAAP financial measures are not a substitute for GAAP financial results and should only be considered in conjunction with the Company's financial information that is presented in accordance with GAAP. Quantitative reconciliations of EBITDA, adjusted EBITDA, adjusted EBITDA margin, net debt, funding capacity, free cash flow, free cash flow yield, enterprise value, and adjustments to segment results to exclude portfolio actions and one-time adjustments made are included in this presentation. L.B. Foster Investor Deck December 2024
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John Kasel President and CEO 3 "L.B. Foster Company has a rich history of innovation and customer service, and we are reinvigorated by the momentum building inside our business and the opportunity to grow shareholder value as a result of our strategic transformation." Company Overview L.B. Foster Investor Deck December 2024
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2023 Sales by Region $464 $41 $25 $13 $544 United States United Kingdom Canada Other Total 2023 Sales $0 $200 $400 $600 TTM Q3 2024 Sales by Segment $317 $220 $537 Rail InfrastructureTotal TTM Q3 2024 Sales $0 $200 $400 $600 L.B. Foster Overview Innovating to solve global infrastructure challenges > Founded in 1902; headquartered in Pittsburgh, Pennsylvania > Locations throughout North America, South America, Europe, and Asia > 18 principal plants and offices; ~1,100 employees worldwide2 > Critical infrastructure solutions provider focused on growing innovative, technology-based offerings to address our customers’ most challenging operating and safety requirements Business Segments Note: The Company corrected certain errors in previously reported 2024 quarterly financials, and certain immaterial errors in 2023 previously reported financials. All comparisons are based on the corrected historical results. 1) Refer to safe harbor disclaimer slide and related reconciliations within the appendix regarding non-GAAP measures. 2) Location and employee data as of December 31, 2023. 3) Stock price as of November 25, 2024. Note figures may not foot due to rounding. 4 Infrastructure Solutions* Rail, Technologies, and Services Data shown above in millions, except stock price and ratios. ($ in millions)($ in millions) September 30, 2024 Financial Data Stock Price3 $ 28.28 Shares Outstanding 10.8 Market Capitalization $ 306.8 Debt 68.5 Cash 3.1 Enterprise Value1 $ 372.2 TTM Net Income $ 42.7 TTM Revenue $ 537.5 TTM Adj. EBITDA1 $ 32.4 EV / Revenue 0.7 EV / Adj. EBITDA 11.5 Covenant Leverage 1.9x Realigned reporting structure through two segments effective Q4 2023 2024 Guidance (As of November 7, 2024) Low High Revenue $ 530 $ 540 Adj. EBITDA1 $ 34.5 $ 36.5 Cap Ex as a % of sales 2.0% 2.5% Free cash flow1 $ — $ 5.0 *Includes previous Precast Concrete Products and Steel Products and Measurement (now Steel Products business unit) reporting segments L.B. Foster Investor Deck December 2024
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5L.B. Foster Investor Deck December 2024 Key Messages Strong Profitability Growth and Cash Generation Exiting 2024 1) Refer to safe harbor disclaimer slide and related reconciliations within the appendix regarding non-GAAP measures. 2) Based on mid-point adjusted EBITDA and free cash flow financial guidance updated November 7, 2024 and November 25, 2024 share price 3) Based on updated financial guidance as of November 7, 2024. Strategic Transformation Journey Underway… Far from Complete > Refreshed strategy rolled out in 2021 > Substantial improvement in growth and profitability profile of business portfolio > Investing in growth platforms aligned with infrastructure super cycle Attractive Valuations and Free Cash Flow Yields > EV / 2024 Adj. EBITDA1,2 valuation - 10.5x today…10.1x projected at year end > 2025 free cash flow yield1,2 outlook - 8% to 11% Strong Profitability Expansion / Cash Generation Expected in 2nd Half 2024 > Adjusted EBITDA1,3 growth expected to be ~29% in second half of 2024 and ~50% in Q4 YoY > Free cash flow1,3 projected between $30M - $35M in line with seasonal working capital patterns
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L.B. Foster Investment Thesis 6 Business portfolio transformation, organic growth and focused profitability initiatives manifesting in improved results Infrastructure pure play with a diverse set of avenues for growth in multi-year infrastructure investment super cycle Multiple value-creating capital allocation levers at disposal Structural Improvement in Profitability Organic Growth Drivers in Place Favorable Free Cash Flow Inflection Moving into 2025 Disciplined Capital Allocation L.B. Foster Investor Deck December 2024 Improving margin and profitability outlook with capital-light business model and demonstrated FCF generation over time
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Proud Legacy, Well-Positioned for Growth 1902 > Founded by Lee B. Foster as used rail resale company. 1967 > Opened Bedford, PA bridge component fabrication facility. 1973 > Entered into an agreement with Nippon Steel to thread and finish oilfield pipe. 1981 > L.B. Foster goes public, trading on the NASDAQ exchange (FSTR). 1999 > Acquired CXT Inc., manufacturer of engineered precast and pre-stressed products used in rail and civil infrastructure. 2010 > Acquired Portec Rail Products, a rail technology company with established presence in UK. 2014 - 2015 > Acquired several businesses in energy space; significantly reduced energy market exposure as part of strategic reassessment completed in 2021. 2015 > Acquired U.K.-based Tew Engineering and Tew Plus, widening offering of technology solutions. 2021 - 2024 > Completed nine portfolio actions (4 acquisitions / 5 divestitures/product line exits) transforming growth and profitability profile in line with strategic roadmap. 2021 > Refreshed strategy announced; changes to leadership team; initiated transformation into technology-focused, high-growth, infrastructure solutions provider. 7 L.B. Foster Investor Deck December 2024
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Deteriorating Profitability / Stock Price > Energy and related freight rail market downturn > Union Pacific lawsuit overhang > Covid pandemic impacts on demand > Extended Energy market infrastructure depression > Removal from Russell 2000 index in 2021 > Overly complex business portfolio > Operating under financial stress and uncertainty Strategic Transformation Designed to Restore Purpose, Shareholder Value, and Confidence Strategic Transformation Launched in 2021 8 Actions Taken to Restore Confidence > New Chairman and Board refreshment > New CEO / CFO appointed in 2021 > Launched refreshed strategy; business transformation to drive shareholder value > Established growth platforms: Rail Technologies and Precast Concrete > Active portfolio management: Four acquisitions / five divestitures completed in ~2.5 years > Consistent growth and profitability expansion > Added back to Russell 2000 index in June 2024 L.B. Foster Investor Deck December 2024 FY 2015 to 2020 FY 2021 to 2024
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John Kasel President and CEO 9 Business Segments "Our business portfolio represents a steady, long-term infrastructure pure play with significant headroom for growth and an improving margin and profitability profile." L.B. Foster Investor Deck December 2024
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Business Segment Profile Rail, Technologies, and Services Infrastructure Solutions Offering: > Rail products / technology-based solutions improving safety / efficiency > North American focus with UK / Western Europe presence Strategic Emphasis: > Growth via mobile solutions, new geographies, and focus on technology > Focus on rail safety and U.S. infrastructure spend to support long- term domestic growth Offering: > Proprietary precast products to support North American civil infrastructure > Bridge, protective pipeline coatings, and water well products and services Strategic Emphasis: > Precast expansion into adjacent markets, applications, and geographies > Optimize cash generation, maintain competitive position to fund growth 10$ in millions unless otherwise indicated. Figures may not foot due to rounding.L.B. Foster Investor Deck December 2024 TTM Q3 2024 Sales by Segment $317 $220 $537 Rail Infrastructure TTM Q3 2024 Sales $0 $100 $200 $300 $400 $500 $600 ($ in millions) TTM Q3 2024 Gross Profit Margins 21.5% 22.6% 22.0% Rail Infrastructure TTM Q3 2024 GP Margin 0.0% 5.0% 10.0% 15.0% 20.0% 25.0%
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Growth & Returns Platforms Established 11L.B. Foster Investor Deck December 2024 Rail ProductsGlobal Friction Management Steel ProductsPrecast Concrete Products Total Track Monitoring UK Technology Services and Solutions Platform for driving growth, profitability, and ROIC with improving demand from infrastructure spend, safety focus and fuel efficiency Returns PlatformsGrowth Platforms Platform optimized for cash generation to fund organic and inorganic growth initiatives in Growth platform Rail friction management products and application systems Precast concrete products, wall systems and buildings Railroad network safety condition monitoring systems Rail track distribution with value-added solutions for freight and transit railroad customers Engineered solutions for infrastructure applications Technology-based products and contract service solutions for the UK Rail market Business Portfolio Purposefully Constructed to Fund and Drive Growth
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$ in millions unless otherwise indicated. Figures may not foot due to rounding. 1) Total growth represents the change in sales between the TTM period ended September 30, 2024 and full year 2021 results. Growth & Returns Platform Profiles 12L.B. Foster Investor Deck December 2024 Platform for driving growth, profitability, and ROIC with improving demand from infrastructure spend, safety focus and fuel efficiency initiatives Returns PlatformsGrowth Platforms Platform to be optimized for cash generation to fund organic and inorganic growth initiatives in Growth platform TTM Sales and Total Sales Growth since 2021 $65 $14 $137 $217 Global FM Total Track Monitoring Precast Total Growth Platform Sales $0 $50 $100 $150 $200 $250 Gross Margin Profiles Global FM Total Track Monitoring Precast Total Growth 10% 20% 30% 40% 50% TTM Sales and Total Sales Growth since 2021 $198 $40 $83 $321 Rail Products UK TS&S Steel Products Total Returns Platform Sales $0 $100 $200 $300 $400 Gross Margin Profiles Rail Products UK TS&S Steel Products Total Returns 10% 20% 30% 40% 50% 1 31.4% 74.8%93.5% 330.8% (0.3)% (17.8)% (41.9)% (17.7)% 25% - 45% 15% - 25% 1
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Rail, Technologies, and Services - Overview 13 2010 – Acquire Portec 2015 – Acquire Tew Eng / Tew Plus 2022 – Acquire Skratch / IV; Divest Track Components 2010 2015 2022 Rail Segment M&A Activity Technology Services and Solutions > Total track monitoring a growth platform business with offerings for safety and efficiency > Service and technology solution business for transportation and construction > UK TS&S switched to returns-based strategy business Global Friction Management > Solutions and services to enhance rail safety and efficiency > Growth platform with above-average margins Rail Products > Returns platform business > Products for rail track infrastructure > Legacy L.B. Foster businesses; demonstrated stable, strong cash generation over time Offering Supports the Safety, Reliability, and Efficiency of Global Rail Markets $ in millions unless otherwise indicated. Figures may not foot due to rounding. TTM Q3 2024 Rail Segment Sales $198 $65 $54 $317 Rail Products Global FM TS&S Total Rail Segment Sales $0 $100 $200 $300 $400 Business Gross Margin Profiles Rail Products Global FM Technology Services and Solutions 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% L.B. Foster Investor Deck December 2024 2023 2023 – Divest Concrete Ties
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Why Now? > Market-leading positions in technology-oriented products > Long-term infrastructure investment super cycle > Increased focus on safety-enabling products / services and increased demand for fuel-saving products / services > Helping customers to meet ESG and safety goals Continuing Focus on Technology Innovation Driving Improved Margins Rail, Technologies, and Services - Advantages 14 $368M+ 2022 Grants to Improve U.S. Rail Infrastructure H.R.1674 Railway Safety Act Pending 14.1% TTM Q3 2024 sales growth in growth platforms1 $ in millions unless otherwise indicated. Figures may not foot due to rounding. 1) Growth platform includes Global Friction Management and Total Track Monitoring businesses Rail Segment Sales and YoY Organic Growth $78 $64 $92 $87 $69 $83 $86 $79 Q4 2022Q1 2023Q2 2023Q3 2023Q4 2023Q1 2024Q2 2024Q3 2024 $— $50 $100 (9)%29% (4)% Rail Segment Gross Profit 23.1% 22.2% 22.0% 19.8% 19.2% 22.5% 20.9% 23.2% $18 $14 $20 $17 $13 $19 $18 $18 Q4 2022Q1 2023Q2 2023Q3 2023Q4 2023Q1 2024Q2 2024Q3 2024 —% 5.0% 10.0% 15.0% 20.0% 25.0% $10 $15 $20 $25 L.B. Foster Investor Deck December 2024 (5)% Transportation Spend Forecast FMI Corp North American Engineering and Construction Outlook Q4 2024
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Statistics sourced from the American Society of Civil Engineers - America's Infrastructure Report Card 2021. Well-Established Business with Strong Cash Generation and Capital-Light Business Model Rail Segment – Rail Products 15 Transit Products Fasteners, rail and track systems Concrete Ties > Returns-based strategy and the largest component of segment today (62% of sales) > Capital light model drives strong economic returns > Scale generates significant cash to fund technology investment and growth platforms > Will continue to benefit from infrastructure and safety focus...large project work anticipated > Supports critical government funded rail network maintenance deferred during pandemic > Key offering needed for essential rail infrastructure improvement in North America > Divested EBITDA dilutive concrete ties business in second quarter of 2023 > Short line rail network funding requirement for projects to retain strong connection to the Class I network $10B Rail Distribution Industrial and transit applications Allegheny Rail Products Insulated rail joints and accessories L.B. Foster Investor Deck December 2024
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16L.B. Foster Investor Deck December 2024 Global Platform Well-Positioned for Growth with Application Innovation Rail Segment – Global Friction Management > Growth platform as a technology-focused business...higher margin profile > Razor / razor-blade business model with services > Services component should benefit from growth and improved margins > Significant future global growth opportunity > Helps address fuel and safety issues for railroads > Opportunity for increasing customer adoption with focus on operating ratios and derailment impacts > Percent NA rail network currently utilizing friction management technology 5% > L.B. Foster holds the leading position in the market#1 Trackside Equipment Applies friction modifiers Consumables Top-of-rail friction modifiers Field Services Equipment service and maintenance On-Board Solutions Proprietary solid stick friction modifiers
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Technology Solutions and Services to Enhance Safety, Operational Efficiency, and Customer Experience Rail Segment – Technology Services and Solutions 17 > Project-based work, well-respected partner in the market > Opportunity to expand reach in Europe and beyond > Recently completed multi-year Crossrail project in U.K.; ~100M GBP in services revenue > Actively bidding High-Speed 2 enabling projects...longer-term demand in key end market; narrower path forward given challenging UK commercial construction market > Condition monitoring solutions support rail safety and network efficiency initiatives > Focus on improving railroad operating ratios > Project work as well as recurring maintenance needs > Increasing demand for Wheel Impact Load Detector (WILD) product line to help reduce risk of train derailments Control and Display Fixed and mobile displays for customer information and disruption management Contract Services Building and technology management for rail, airports, and construction Condition Monitoring Wayside technology to detect rockfall, flood, and other dangerous conditions WILD Measures impact imparted onto rail; greatly reduces risk of train derailment L.B. Foster Investor Deck December 2024 Returns Platforms Growth Platforms
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Deploying Advanced Technologies that Positively Impact the Built Environment Infrastructure Solutions Overview 18 1999 – CXT acquisition, entrance into precast concrete space 2014 – Carr Concrete acquisition, expansion of offerings and geography 2022 – VanHooseCo acquisition, proprietary technology and expanded geography 1999 2014 2022 Infrastructure Solutions M&A Activity L.B. Foster Investor Deck December 2024 Precast Concrete Products > Turnkey concrete buildings, manufactured offsite and delivered to site for quick installation > Other precast products, supporting commercial and residential infrastructure via proprietary technologies > Growth platform with multiple avenues available Steel Products > Custom engineered solutions and services for critical civil and energy infrastructure > Leading share position in stable and mature niche markets > Returns-based strategy generating cash to fund growth Infrastructure Segment Adjusted Gross Profit 14.9% 17.7% 22.0% 23.2% 23.4% 18.2% 22.9% 24.6% $9 $9 $12 $14 $15 $8 $13 $14 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 —% 5.0% 10.0% 15.0% 20.0% 25.0% $0 $5 $10 $15 $20 1 $ in millions unless otherwise indicated. Figures may not foot due to rounding. 1) Sales and gross profit adjusted for the non-routine impact of bridge grid deck exit in Q3 2023. Refer to safe harbor disclaimer slide and related reconciliations within the appendix regarding non-GAAP measures. 2023 – Chemtec divestiture and bridge grid deck product line exit 2023 Infrastructure Segment Adj. Sales and YoY Organic Growth Rates $59 $51 $56 $60 $66 $42 $55 $58 Q4 2022Q1 2023Q2 2023Q3 2023Q4 2023Q1 2024Q2 2024Q3 2024 $0 $25 $50 $75 1 23% 1% (2)%(1)%
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Segment Strategy 19L.B. Foster Investor Deck December 2024 Infrastructure Solutions - Advantages > Recognizable offering with compelling value proposition > Great American Outdoors Act provides funding for parks construction spending which has reached peak levels > Energy and water infrastructure investment super cycle including bridge investments and adjacent pipeline projects > Leading position in niche markets > Available and growing capacity in key geographic markets > New products and geographies generate synergies that drive margin growth across segment Secured Technologies & Licenses Precast - CXT TN Lebanon Plant (Nashville Area) > Fully equipped and operational, revenue ramping in 2024 > Expecting capacity, revenues and margins to be similar to base business over time Steel Products - Returns Platform > Generate cash to fund higher growth / higher-margin opportunities in precast market > Tailwinds from domestic energy and water infrastructure spending Precast - CXT TN Regional Market Expansion > Exploring opportunities to access growing areas of U.S. market (including central Florida) with a capital efficient model > Focus on growing residential / commercial market Envirocast > Proprietary licensed technology > Precast wall system allow for faster builds, design flexibility, and insulation > Commissioning facility in central Florida Envirokeeper > Proprietary licensed technology > Modular precast in-ground retention system for water management > Manufactured off-site to reduce overall project time Redi Rock Licenses > Boise, ID regional license obtained through tuck-in acquisition of Cougar Mountain Precast, LLC in November 2023 > Waverly, WV regional license obtained in September 2023
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Construction project data sourced from KeyBanc Industry Update November 19, 2024 Population density data obtained from US Census Bureau Supports General Infrastructure with Expanding Geographic Reach and Well-Recognized Brands Precast Concrete Products Overview 20 > Access to high growth southern regions of the United States > Significant freight costs; our expansive presence is a competitive advantage > Serving steady, government- funded projects and robust residential / commercial markets > Tuck-in acquisitions such as 2023 Cougar Mountain, LLC to further expand geographic reach and product line CXT Buildings Concrete restroom, concession, multi-functional buildings Precast Products Box culverts, irrigation canals, bridge beams and highway wall panels CXT TN Proprietary licensed technology for precast walls and systems Southeast U.S. non-residential project starts LTM October 2024 vs 2023 L.B. Foster Precast Facilities > Boise, ID/Caldwell, ID > Waverly, WV > Knoxville, TN > Nashville, TN > Hillsboro, TX (Dallas area) > Lake County, Florida $ in millions unless otherwise indicated. Figures may not foot due to rounding. L.B. Foster Investor Deck December 2024 TTM Q3 2024 Precast Sales $79 $30 $29 $137 Buildings Precast Products CXT TN Total Precast $— $50 $100 $150 +3% U.S. infrastructure construction project starts LTM October 2024 vs 2023+2%
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$ in millions unless otherwise indicated. Figures may not foot due to rounding. Improving Margins Driving Cash Generation to Fund Growth Platforms Steel Products Overview 21 > Portfolio actions have significantly improved profitability outlook > Infrastructure investment super cycle and renewed pipeline investment activity expected to drive demand > Running to optimize cash generation to fund growth platform investments ~$15M+ > Amount allocated to bridge renewal projects via the 2021 Infrastructure Investment and Jobs Act > Grade for American bridges by American Society of Civil engineers (2021) 11.6% Gross Margin 12.7% Gross Margin 14.8% Gross Margin Bridge Forms Special design and quick installation processes Protective Coatings Custom protective bond epoxy coating of line pipe Threading Water well casing pipe for wells Steel Products Sales and Margin Impact $92.7 $(25.0) $27.4 $95.1 $(10.2) $(1.9) $83.1 2022 Divestiture and Product Line Exit Organic Sales 2023 Divestiture and Product Line Exit Organic SalesTTM Q3 2024 $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 10.0% 12.5% 15.0% 17.5% 20.0% 22.5% 25.0% L.B. Foster Investor Deck December 2024 > TTM Q3 2024 sales of discontinued bridge grid deck product line~$5M 16.3% Gross Margin 20.3% Gross Margin ~$40B+ C 12.0% Gross Profit
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Financial Review 22 Bill Thalman Executive Vice President and CFO "The favorable impact of our strategic transformation is evident from the positive momentum in our results." L.B. Foster Investor Deck December 2024
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Quarter Highlights Gross profit of $32.8M up 19.5% YoY Gross margin of 23.8% up 490 bps YoY on 5.4% lower net sales Highest quarterly gross margin level achieved in over 10 years Net income of $35.9M includes $30.0M favorable tax valuation allowance adjustment $12.3M of adjusted EBITDA1 up 16.4% YoY Cash provided by operations of $24.7M reduced net debt1 by $17.7M to $65.4M 2024 Guidance Updated Net sales $530M - $540M (previously $525M - $550M) Adjusted EBITDA1 $34.5M - $36.5M (previously $34.0M - $37.0M) Free cash flow1 $—M - $5.0M (previously breakeven) Cap Ex % of sales 2.0% - 2.5% (previously 2.5%) 23L.B. Foster Investor Deck December 2024 Third Quarter Results Clearly Indicate that our Strategic Transformation is on Track Note: The Company corrected certain errors in previously reported 2024 quarterly financials, and certain immaterial errors in 2023 previously reported financials. All comparisons are based on the corrected historical results. 1) Refer to safe harbor disclaimer slide and related reconciliations within the appendix regarding non-GAAP measures. What we've accomplished... 2024 expectations… Gross Leverage Ratio1 improved by 0.8x during Q3 to 1.9x at quarter end Repurchased 1.2% of shares outstanding; $8.4M in authorization remaining TTM book-to-bill ratio1 of 0.94 : 1.00, up from 0.93 : 1.00 2024 Q2
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Strategic Transformation in Action 2022 – Skratch and Intelligent Video (IV) > U.K.-based digital display solutions company and safety solution company 2022 - VanHooseCo > Precast company headquartered in Tennessee > New technologies allow for margin expansion / application across existing portfolio > ~$34M in sales (2023), with 2nd facility online 2H 2023 and ramping up in 2024 2023 - Cougar Mountain > Tuck-in precast acquisition integrated into existing Boise operations 2021 – Piling Products - Commoditized, working-capital intensive business 2022 – Track Components - Canadian rail spikes and anchors business 2023 – Chemtec Energy Services - EBITDA-neutral energy business 2023 – Concrete Railroad Ties - Commoditized EBITDA-neutral business 2023 – Bridge grid deck product line exit - Dated technology with low margins Divestitures Lower Margin Profiles – Energy-Focused / Commoditized Businesses Acquisitions Higher Margin Profiles – Rail Technologies and Precast Concrete 24$ in millions unless otherwise indicated. Figures may not foot due to rounding.L.B. Foster Investor Deck December 2024 Changes to Sales and Gross Margin $497 $58 $20 -$32 $544 $5 -$12 $537 2022 Sales Legacy Business Acquisitions Divestitures 2023 Sales Legacy Business Divestitures & Product Exit TTM Q3 2024 Sales $400 $450 $500 $550 $600 $ in millions 18.0% Gross Margin 20.6% Gross Margin 22.0% Gross Margin
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Key Metrics: 2021 – TTM 2024 Structural Improvement in Business Portfolio Driving Gross / EBITDA Margin Expansion 25 > Scalable core businesses in robust markets with headroom for growth > Sale of commodity businesses, accretive acquisitions and organic growth transforms portfolio margin profile 1) Refer to safe harbor disclaimer slide and related reconciliations within the appendix regarding non-GAAP measures. Note figures may not foot due to roundingL.B. Foster Investor Deck December 2024 Adjusted Sales $514 $501 $546 $537 2021 2022 2023 TTM Q3 2024 $400 $425 $450 $475 $500 $525 $550 $575 Gross Profit Margin Gross Profit ($ in millions) Adjusted Gross Profit 16.8% 18.8% 21.2% 22.0% $86 $94 $116 $118 2021 2022 2023 TTM Q3 2024 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 22.0% 24.0% $80 $90 $100 $110 $120 $130 Adjusted EBITDA ($ in millions) Adjusted EBITDA Margin Adjusted EBITDA $19 $24 $32 $32 3.6% 4.8% 5.8% 6.0% 2021 2022 2023 TTM Q3 2024 $10 $15 $20 $25 $30 $35 2.0% 4.0% 6.0% 8.0% 10.0% ($ in millions) 1 1 1
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TTM Adjusted Net Sales $496 $473 $477 $501 $518 $535 $548 $546 $555 $547 $537 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 $400 $425 $450 $475 $500 $525 $550 $575 TTM Adjusted Gross Margin 16.9%17.1% 18.2% 18.8%19.5% 20.7%20.8%21.2%21.4%21.3% 22.0% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 10.0% 12.5% 15.0% 17.5% 20.0% 22.5% 25.0% L.B. Foster Investor Deck December 2024 1) Sales and gross profit adjusted for the non-routine impact of bridge grid deck exit in Q3 2023 and Crossrail settlement in Q3 2022 and acquisition-related inventory adjustments impacting gross profit in Q3 2022.. Refer to safe harbor disclaimer slide and related reconciliations within the appendix regarding non-GAAP measures. Sales and Gross Margin Trend Improving Transformation of Growth and Profitability Profile of the Business Portfolio ($ in millions) 1 1 26
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Full Year Adjusted EBITDA Growth of 11.6% with 28.8% in 2024 Second Half Rail, Technologies and Services $ in millions unless otherwise indicated. Figures may not foot due to rounding. 1) Refer to safe harbor disclaimer slide and related reconciliations within the appendix regarding non-GAAP measures. *Based on midpoints of guidance issued on November 7, 2024 2024 Sales and Adjusted EBITDA1 Outlook 27 First Half 2024 > Organic1 sales up 5.5%; reported sales essentially flat due to portfolio work in 2023 > Adjusted EBITDA1 down 7.1% due to weaker rail distribution market and higher SG&A associated with announced restructuring Sales +0.6% YoY Adj. EBITDA1 (7.1)% YoY Sales Outlook (3.7)% YoY Adj. EBITDA1 Outlook +28.8% YoY L.B. Foster Investor Deck December 2024 $264 $265 H1 2023 H1 2024 $0 $75 $150 $225 $300 $280 $270 H2 2023 H2 2024* $0 $75 $150 $225 $300 $15 $14 H1 2023 H1 2024 $0 $3 $6 $9 $12 $15 $18 $17 $22 H2 2023 H2 2024* $0 $3 $6 $9 $12 $15 $18 $21 $24 Second Half 2024 Based on mid-point of guidance issued November 7, 2024 > Reported sales expected to remain modestly lower due to rail distribution market and portfolio impacts > Adjusted EBITDA1 expected to increase 28.8% YoY with improved business mix, recovery in the UK and lower SG&A from restructuring
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~$30M - $35M in Free Cash Flow1 Expected in H2 2024 Along Normal Seasonal Working Capital Patterns Proactive Management of Leverage 28 1) Refer to safe harbor disclaimer slide and related reconciliations within the appendix regarding non-GAAP measures. 2) Gross Leverage Ratio shown calculated per the credit agreement in place during the displayed quarter. 3) Stock price as of November 25, 2024 . L.B. Foster Investor Deck December 2024 $52.7 $31.2 $3.1 $(3.8) $83.2 $— $— 12/31/2023 Net Debt Free Cash Flow Share Repurchases Net M&A, Asset Sales, & Misc. 6/30/2024 Net Debt Free Cash Flow Share Repurchases Net M&A, Asset Sales, & Misc. 12/31/2024 Net Debt $0 $25 $50 $75 $100 $89.0 $4.8 $1.0 $(9.2) $85.6 $(37.3) $1.6 $2.8 $52.7 12/31/2022 Net Debt Free Cash Flow Share Repurchases Net M&A, Asset Sales, & Misc. 6/30/2023 Net Debt Free Cash Flow Share Repurchases Net M&A, Asset Sales, & Misc. 12/31/2023 Net Debt $0 $25 $50 $75 $100 2.8x1,2 2.5x1,2 2.7x1,2 <2.0x1,21.7x1,2 1.7x1,2 Based on guidance issued on November 7, 2024 $48.0M - $53.0M $(30.0) - $(35.0) > Large free cash flow swings due to timing of sales / working capital needs > 2024 FCF guidance adjusted to reflect higher expected A/R at year end (Rail sales timing) > Updated guidance includes initiative funding (pension settlements / restructuring) > Two-year average FCF projected at ~$25M excluding $8M/yr Union Pacific payment (~8% yield at today's stock price1,3) > ~$13M in 2024 Cap Ex funding future growth (includes $4M - $5M in growth Cap Ex) > ~$100M in federal NOLs minimizes US taxes > $8.4M in authorized stock repurchases remaining (~4% of market cap) with restrictions removed 1 1 11
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September 30, 2024 Key Metrics Exceptional Free Cash Flow Generation Lowered Net Debt1 and Gross Leverage Ratio1,2 Net Debt1, Leverage, and Capital Allocation 29 1) Refer to safe harbor disclaimer slide and related reconciliations within the appendix regarding non-GAAP measures. 2) Gross leverage ratio shown calculated per the credit agreement in place during the displayed quarter. 3) Subject to covenant restrictions. Gross Leverage Ratio1,2 1.9x Funding Capacity1,3 $62.8M YTD Operating Cash Use $1.7M $7.8M YTD Capital Spending > Net debt and Gross Leverage Ratio improvement of $17.7M and 0.8x in Q3 due to strong free cash flow > Demonstrated history of diligent debt and leverage management over time...targeting ~2.0x long-term > Capital-light business model with significant free cash flow1 drivers in place > Union Pacific settlement fulfilled in Dec 2024 > ~$100M in federal NOLs should minimize cash taxes for the foreseeable future > $15M share repurchase program; $6.6M utilized to date (~3.0% of o/s shares); authorization expires in Feb 2025 L.B. Foster Investor Deck December 2024 Net Debt and Gross Leverage Ratio Per Credit Agreement $89 $78 $86 $69 $53 $75 $83 $65 2.8x 2.4x 2.5x 2.0x 1.7x 2.2x 2.7x 1.9x Net Debt Gross Leverage Ratio TTM Q4 2022 TTM Q1 2023 TTM Q2 2023 TTM Q3 2023 TTM Q4 2023 TTM Q1 2024 TTM Q2 2024 TTM Q3 2024 $.0x $1.0x $2.0x $3.0x $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 ($ in millions) 1 1,2
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Free Cash Flow Inflection Imminent Drivers in Place to Achieve Significant Free Cash Flow in 2025 30 > Building blocks in place for free cash flow inflection in 2025 > Improved business portfolio, revenue growth and margin expansion expected to drive strong free cash flow in coming years > Final Union Pacific settlement payment made on December 2, 2024 > Federal NOLs (~$100M) should minimize future cash taxes > Cap Ex slightly elevated in 2024 to fund organic growth...~1.5% of sales over the longer-term 1) Refer to safe harbor disclaimer slide and related reconciliations within the appendix regarding non-GAAP measures. 2) Calculated based on November 25, 2024 share price and September 30, 2024 shares outstanding. 2025 Aspirational Goals Low High $ in millions Adjusted EBTIDA $48.0 $52.0 Maintenance Cap Ex 8.0 6.0 Cash Interest 5.0 3.0 Working Capital Use 10.0 8.0 Free Cash Flow1 25.0 35.0 Free Cash Flow Adj. EBITDA Conversion 52% 67% Free Cash Flow Yield1,2 8% 11% L.B. Foster Investor Deck December 2024
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$ in millions except share volume information; Share volume obtained from NASDAQ.com 1) Refer to safe harbor disclaimer slide and related reconciliations within the appendix regarding non-GAAP measures. 2) Calculated using November 25, 2024 of $28.28 per share and net debt as of dates indicated. Attractive Valuation and Free Cash Flow Yield Based on Near Term Outlook Attractive Valuation and FCF Yield1 31L.B. Foster Investor Deck December 2024 Company Valuation 2023 2024 Guidance (As of November 7, 2024) Low Mid High Revenue $ 543.7 $ 530.0 $ 535.0 $ 540.0 Organic revenue growth (0.8) % 1.5 % 3.8 % Adj. EBITDA1 $ 31.8 $ 34.5 $ 35.5 $ 36.5 Adj. EBITDA growth 8.6 % 11.7 % 14.9 % Adj. EBITDA Margin1 5.8 % 6.5 % 6.6 % 6.8 % Enterprise Value (12/31/23)1,2 $ 288.8 Enterprise Value (9/30/24)1,2 $372.2 Enterprise Value (Est. as of 12/31/24)1,2 $357.3 EV/Adj. EBITDA (12/31/23 vs. 9/30/24) 9.1 10.8 10.5 10.2 EV/Adj. EBITDA (12/31/23 vs.12/31/24) 9.1 10.4 10.1 9.8 Free Cash Flow1 2025 Goals Low High Free Cash Flow Guidance $ 25.0 $ 35.0 Free Cash Flow Yield1,2 8 % 11 % Trading Volume Growth Q3 2023 Q3 2024 Increase Average Daily Volume 26,464 59,880 33,416 > Improved trading volumes with addition to Russell 2000 > Attractive EBITDA valuation today and projected at year end with expected FCF / Net Debt reduction > 2025 FCF Goal: $25M to $35M...improving profitability outlook, lower Cap Ex and no Union Pacific payments > 2025 FCF Yield: 8% to 11% at today's stock price Free Cash Flow1 2024 Updated Guidance (As of November 7, 2024) Low High Free Cash Flow Guidance $ — $ 5.0 Projected H2 FCF Generation $ 30.0 $ 35.0
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1) Refer to safe harbor disclaimer slide and related reconciliations within the appendix regarding non-GAAP measures. Note figures may not foot due to rounding. New Orders1, Revenue, and Book-to-Bill Ratios1 32 TTM Q3 2024 Book-to-Bill Ratio: 0.94 : 1.00 TTM Q3 2024 Book-to-Bill Ratio: 0.87 : 1.00TTM Q3 2024 Book-to-Bill Ratio: 0.99 : 1.00 L.B. Foster Investor Deck December 2024 Rail, Technologies, and Services $50 $60 $84 $117 $53 $87 $69 $83 $86 $79 New Orders Revenue Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 $0 $25 $50 $75 $100 $125 Consolidated New Orders and Revenue $100 $106 $132 $171 $96 $145 $135 $124 $141 $137 Total New Orders Total Revenue Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 $0 $50 $100 $150 ($ in millions) ($ in millions) Infrastructure Solutions $50 $45 $49 $54 $43 $58 $66 $42 $55 $58 New Orders Revenue Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 $0 $25 $50 $75($ in millions)
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Backlog1 Trends Backlog Lower due to UK Scale Down, Bridge Grid Deck Exit and Weaker Demand in Steel Products L.B. Foster Investor Deck December 2024 331) Refer to safe harbor disclaimer slide and related reconciliations within the appendix regarding non-GAAP measures. Consolidated Backlog $243 $214 $222 $250 $209 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 $0 $50 $100 $150 $200 $250 $300 Rail, Technologies, and Services Backlog $94 $84 $86 $115 $89 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 $0 $25 $50 $75 $100 $125 $150 Infrastructure Solutions Backlog $150 $129 $136 $135 $120 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 $0 $25 $50 $75 $100 $125 $150 $175 ($ in millions) ($ in millions) ($ in millions)
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Closing Remarks John Kasel President and CEO 34L.B. Foster Investor Deck December 2024
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Relentless Pursuit of Shareholder Returns with Prudent Capital Allocation Capital Allocation Priorities 35 Debt Reduction > Target maintaining Gross Leverage Ratio1 at ~2.0x; improving free cash flow outlook provides opportunities for further growth and shareholder returns Growth Capital Expenditures > Targeting 1.5% - 2.0% of sales to support organic growth initiatives with high returns, quick paybacks Tuck In Acquisitions > Continue to opportunistically evaluate strategic partnerships to enhance our current portfolio Share Repurchases > Repurchased 3.0% of outstanding shares since program inception; $8.4M authorization remaining through revised program expiration in February 2025 Dividends > Potential for ordinary or special dividends as free cash flow improves in coming years Capital Allocation Investment for Growth L.B. Foster Investor Deck December 2024 1) Refer to safe harbor disclaimer slide and related reconciliations within the appendix regarding non-GAAP measures.
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36L.B. Foster Investor Deck December 2024 We Innovate to Solve Global Infrastructure Challenges New Brand Identity and Global Website The L.B. Foster centrifuge represents our five areas of influence: enabling safety, improving information flow, keeping things moving, monitoring conditions, and enhancing environments. Global website with increased functionality that provides an elevated user experience and introduces the Company’s repositioned brand that focuses on two sectors: Global Railroad and North American Infrastructure Markets
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37 The Impact of Our Work is Evident in Our Improving Results > Re-established enterprise strategy and execution playbook > Refreshed Board expertise aligned with refreshed strategy > Realigned management team and operating structure to execute > Divested five commoditized, non-core businesses > Acquired four technology-oriented businesses aligned with growth platforms > Implemented margin recovery plans across portfolio in challenging market conditions > Launched new brand identity, focusing on global railroad and North American infrastructure Significant progress achieved in 3 years L.B. Foster Investor Deck December 2024
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Well positioned for growth 38 Execution of our Strategy has Positioned Us Well to Benefit from an Infrastructure Investment Super Cycle > Strategic transformation continued in 2024 > Growth drivers are in place > Government initiatives and funding > Construction growth in Southern U.S. > Focus on rail safety and maintenance > Bridge / pipeline project investments > Great American Outdoors Act (2020) > Infrastructure Investment and Jobs Act (2021) > Focused portfolio of core products and services in high demand for years to come L.B. Foster Investor Deck December 2024 Data sourced from KeyBanc Industry Update on Large US Construction starts - November 19, 2024
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Market and Business Outlook 39 Well-Positioned to Benefit from Favorable Demand Driven by Long-Term Infrastructure Investment Super Cycle L.B. Foster Investor Deck December 2024 Additional focus and funding for rail safety initiatives supports long-term growth for Rail, Technologies, Services and Solutions offerings Commissioning facility in central Florida to produce Envirocast® wall systems for booming commercial and residential real estate market Government funding of large-scale investments for freight rail, transit lines and civil infrastructure / transportation projects continues to support end customer demand
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Aspirational Goals (2025) REVENUE $580M - $620M GP % 22.0% - 23.0% ADJ. EBITDA1 $48M - $52M Adj. EBITDA1 Margin ~8.0% Innovating to Solve Global Infrastructure Challenges 401) Refer to safe harbor disclaimer slide and related reconciliations within the appendix regarding non-GAAP measures. L.B. Foster Investor Deck December 2024
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Thank you! L.B. Foster Company Investor Presentation 41L.B. Foster Investor Deck December 2024 Nasdaq - FSTR
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Appendix 42L.B. Foster Investor Deck December 2024
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43 Non-GAAP Measure: Adj. EBITDA Margin & Net Income Margin Note figures may not foot due to rounding. Twelve months ended: ($ in millions) December 31, 2021 December 31, 2022 December 31, 2023 September 30, 2024 Net income (loss), as reported $ 3.5 $ (45.7) $ 1.3 $ 42.7 Interest expense - net 3.0 3.3 5.5 5.1 Income tax expense (benefit) 1.1 36.7 (0.4) (29.4) Depreciation expense 8.1 8.6 9.9 9.6 Amortization expense 5.8 6.1 5.3 4.7 Total EBITDA $ 21.4 $ 9.1 21.7 32.6 (Gain) loss on divestitures (2.7) — 3.1 — Impairment expense — 8.0 — — Acquisition and divestiture costs — 2.2 — — Commercial contract settlement — 4.0 — — Insurance proceeds — (0.8) — — VanHooseCo inventory adjustment to fair value amortization — 1.1 — — VanHooseCo contingent consideration — 0.5 — — Bridge grid deck exit impact — — 4.5 0.3 Bad debt provision — — 1.9 1.0 Restructuring costs — — 0.7 1.6 Gain on asset sale — — — (4.3) Legal expense — — — 1.2 Adjusted EBITDA $ 18.7 $ 24.2 $ 31.8 $ 32.4 Net sales, as adjusted $ 513.6 $ 501.5 $545.7 $537.5 Net income (loss) margin 0.7 % (9.1) % 0.2 % 7.9 % Adjusted EBITDA margin 3.6 % 4.8 % 5.8 % 6.0 % L.B. Foster Investor Deck December 2024
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44 Non-GAAP Measure: Adjusted EBITDA Note figures may not foot due to rounding. L.B. Foster Investor Deck December 2024 Three Months Ended September 30, Nine Months Ended September 30, ($ in millions) 2024 2023 2024 2023 Net income, as reported $ 35.9 $ 0.4 $ 43.1 $ 1.8 Interest expense - net 1.4 1.4 4.0 4.4 Income tax expense (29.7) (0.1) (29.1) (0.1) Depreciation expense 2.3 2.5 7.1 7.4 Amortization expense 1.1 1.4 3.5 4.1 Total EBITDA 11.0 5.6 28.5 17.6 Loss on divestitures — — — 3.1 Gain on asset sales — — (4.3) — Bridge grid deck exit impact — 4.1 — 4.1 Bad debt provision — 0.9 — 0.9 Restructuring costs 0.9 — 0.9 — Legal expense 0.4 — 1.2 — Adjusted EBITDA $ 12.3 $ 10.6 $ 26.3 $ 25.7
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45 Non-GAAP Measure: Adjusted EBITDA Note figures may not foot due to rounding. L.B. Foster Investor Deck December 2024 Six Months Ended June 30, Six Months Ended Decmber 31, ($ in millions) 2024 2023 2023 Net income, as reported $ 7.2 $ 1.3 $ — Interest expense - net 2.6 3.0 2.6 Income tax expense 0.6 — (0.4) Depreciation expense 4.7 5.0 5.0 Amortization expense 2.3 2.7 2.6 Total EBITDA 17.6 12.0 9.7 Loss on divestitures — 3.1 — Gain on asset sales (4.3) — — VanHooseCo contingent consideration — — — Bridge grid deck exit impact — — 4.5 Bad debt provision — — 1.9 Restructuring costs — — 0.7 Legal expense 0.8 — — Adjusted EBITDA $ 14.0 $ 15.1 $ 16.7
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46L.B. Foster Investor Deck December 2024 Note figures may not foot due to rounding. Non-GAAP Measure: Adj. Results for Non-Routine Items Consolidated Adj. Results Twelve Months Ended Trailing Twelve Months Ended ($ in millions) December 31, 2023 December 31, 2022 June 30, 2024 March 31, 2024 September 30, 2023 Net sales, as reported $ 543.7 $ 497.5 $ 545.3 $ 552.6 $ 546.0 Bridge grid deck exit impact 2.0 — 2.0 2.0 2.0 Crossrail settlement adjustment — 4.0 — — — Net sales, as adjusted $ 545.7 $ 501.5 $ 547.3 $ 554.6 $ 548.0 Gross profit, as reported $ 112.0 $ 89.6 $ 112.8 $ 114.9 $ 110.1 Bridge grid deck exit impact 3.9 — 3.9 3.9 3.9 Crossrail settlement adjustment — 4.0 — — — VanHooseCo inventory adjustment to fair value amortization — 0.9 — — — Gross profit, as adjusted $ 115.9 $ 94.4 $ 116.7 $ 118.8 $ 114.0 Gross profit margin, as reported 20.6 % 18.0 % 20.7 % 20.8 % 20.2 % Gross profit margin, as adjusted 21.2 % 18.8 % 21.3 % 21.4 % 20.8 %
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47L.B. Foster Investor Deck December 2024 Note figures may not foot due to rounding. Non-GAAP Measure: Adj. Results for Non-Routine Items Consolidated Adj. Results Trailing Twelve Months Ended Three Months Ended ($ in millions) June 30, 2023 March 31, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Net sales, as reported $ 530.7 $ 514.1 $ 473.2 $ 145.3 $ 130.0 Bridge grid deck exit impact — — — 2.0 — Crossrail settlement adjustment 4.0 4.0 4.0 — 4.0 Net sales, as adjusted $ 534.7 $ 518.1 $ 477.2 $ 147.3 $ 134.0 Gross profit, as reported $ 105.8 $ 96.5 $ 81.8 $ 27.4 $ 23.1 Bridge grid deck exit impact — — — 3.9 — Crossrail settlement adjustment 4.0 4.0 4.0 — 4.0 VanHooseCo inventory adjustment to fair value amortization 0.9 0.9 0.9 — 0.9 Gross profit, as adjusted $ 110.6 $ 101.3 $ 86.7 $ 31.3 $ 27.9 Gross profit margin, as reported 19.9 % 18.8 % 17.3 % 18.9 % 17.8 % Gross profit margin, as adjusted 20.7 % 19.5 % 18.2 % 21.2 % 20.8 %
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48L.B. Foster Investor Deck December 2024 Non-GAAP Measure: Enterprise Value Note figures may not foot due to rounding. 1) Based on November 7, 2024 updated financial guidance. 2) Refer to safe harbor disclaimer slide and related reconciliations within the appendix regarding non-GAAP measures. December 31, 2023 ($ in millions) Share price (as of 12/31/2023) $ 21.99 Shares outstanding (as of 12/31/2023) 10.7 Market Capitalization $ 236.0 Net debt (as of 12/31/2023)2 52.7 Enterprise Value $ 288.8 December 31, 2024 ($ in millions) Share price (as of 11/25/2024) $ 28.28 Shares outstanding (as of 9/30/2024) 10.8 Market Capitalization $ 306.8 Net debt (expected mid-point)1,2 50.5 Enterprise Value $ 357.3 September 30, 2024 ($ in millions) Share price (as of 11/25/2024) $ 28.28 Shares outstanding (as of 9/30/2024) 10.8 Market Capitalization $ 306.8 Net debt (as of 9/30/2024)2 65.4 Enterprise Value $ 372.2
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49L.B. Foster Investor Deck December 2024 Non-GAAP Measure: Free Cash Flow Yield Note figures may not foot due to rounding. $ in millions except per share information and shares outstanding 2025 Goals Low High Free cash flow guidance $ 25.0 $ 35.0 Shares outstanding (as of 9/30/2024) 10.9 10.9 Free cash flow per share $ 2.29 $ 3.21 Share price (as of 9/30/2024) $ 28.28 $ 28.28 Free Cash Flow Yield 8 % 11 %
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50L.B. Foster Investor Deck December 2024 Non-GAAP Measure: Net Debt1and Free Cash Flow Note figures may not foot due to rounding. 1) Subject to covenant restrictions. September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 ($ in millions) Total debt $ 68.5 $ 87.2 $ 78.1 $ 55.3 $ 71.7 $ 89.5 $ 80.1 $ 91.9 Less: cash and cash equivalents (3.1) (4.0) (3.1) (2.6) (3.0) (3.9) (2.6) (2.9) Total net debt $ 65.4 $ 83.2 $ 74.9 $ 52.7 $ 68.7 $ 85.6 $ 77.5 $ 89.0 Six Months Ended ($ in millions) June 30, 2024 December 31, 2023 June 30, 2023 Net cash (used in) provided by operating activities $ (26.8) $ 40.7 $ (3.3) Less capital expenditures on property, plant, and equipment (4.3) (3.4) (1.5) Free cash flow $ (31.2) $ 37.3 $ (4.8)
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51 Non-GAAP Measure: Funding Capacity1 Note figures may not foot due to rounding. 1) Subject to covenant restrictions. ($ in millions) September 30, 2024 Cash and cash equivalents $ 3.1 Total availability under the credit facility 130.0 Outstanding borrowings on revolving credit facility (68.0) Letters of credit outstanding (2.3) Net availability under the revolving credit facility1 $ 59.7 Total available funding capacity1 $ 62.8 L.B. Foster Investor Deck December 2024
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52L.B. Foster Investor Deck December 2024 Note figures may not foot due to rounding. Non-GAAP Measure: Adj. Results for Non-routine Items Three Months Ended Twelve Months Ended ($ in millions) September 30, 2022 December 31, 2022 Rail, Technologies, and Services net sales, as reported $ 77.4 $ 300.6 Crossrail settlement adjustment 4.0 4.0 Rail, Technologies, and Services net sales, as adjusted $ 81.3 $ 304.6 Rail, Technologies, and Services gross profit, as reported $ 13.4 $ 59.5 Crossrail settlement adjustment 4.0 4.0 Rail, Technologies, and Services gross profit, as adjusted $ 17.3 $ 63.5 Rail, Technologies, and Services gross profit margin, as reported 17.3 % 19.8 % Rail, Technologies, and Services gross profit margin, as adjusted 21.3 % 20.8 %
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53L.B. Foster Investor Deck December 2024 Note figures may not foot due to rounding. Non-GAAP Measure: Adj. Results for Non-routine Items Three Months Ended ($ in millions) September 30, 2023 Infrastructure Solutions net sales, as reported $ 58.5 Bridge grid deck exit impact 2.0 Infrastructure Solutions net sales, as adjusted $ 60.5 Infrastructure Solutions gross profit, as reported $ 10.2 Bridge grid deck exit impact 3.9 VanHooseCo inventory adjustment to fair value amortization — Infrastructure Solutions gross profit, as adjusted $ 14.0 Infrasructure Solutions gross profit margin, as reported 17.4 % Infrastructure Solutions gross profit margin, as adjusted 23.2 %
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54L.B. Foster Investor Deck December 2024 Non-GAAP Measure: Organic Sales Note figures may not foot due to rounding. Change in Consolidated Organic Sales Three Months Ended Percent Change ($ in millions) September 30, 2023 net sales, as reported $ 145.3 Increase from product line exit 0.6 0.4 % Change due to organic sales (8.5) (5.9) % 2024 net sales, as reported $ 137.5 (5.4) % Change in Rail, Technologies, and Services Organic Sales Three Months Ended Percent Change ($ in millions) September 30, 2023 net sales, as reported $ 86.9 Change due to organic sales (7.4) (8.5) % 2024 net sales, as reported $ 79.5 (8.5) % Change in Infrastructure Solutions Organic Sales Three Months Ended Percent Change ($ in millions) September 30, 2023 net sales, as reported $ 58.5 Increase due to product line exit 0.6 1.1 % Change due to organic sales (1.1) (2.0) % 2024 net sales, as reported $ 58.0 (0.9) %
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55L.B. Foster Investor Deck December 2024 Non-GAAP Measure: Organic Sales Note figures may not foot due to rounding. Change in Consolidated Organic Sales Six Months Ended Percent Change ($ in millions) June 30, 2023 net sales, as reported $ 263.5 Decrease due to divestitures and exit (12.9) (4.9) % Change due to organic sales 14.5 5.5 % 2024 net sales, as reported $ 265.1 0.6 %
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56 Non-GAAP Measure: Rail Organic Sales Note figures may not foot due to rounding. .L.B. Foster Investor Deck December 2024 Change in Rail, Technology, and Services Sales Three Months Ended Percent Change ($ in millions) March 31, 2023 net sales, as reported $ 64.4 Decrease due to divestitures (0.7) (1.1) % Change due to organic sales 18.9 29.4 % 2024 net sales, as reported $ 82.6 28.3 % Change in Rail, Technology, and Services Sales Three Months Ended Percent Change ($ in millions) December 31, 2022 net sales, as reported $ 77.7 Decrease due to divestitures (5.3) (6.9) % Change due to organic sales (3.1) (4.0) % 2023 net sales, as reported $ 69.3 (10.9) % Change in Rail, Technologies, and Services Sales Three Months Ended Percent Change ($ in millions) June 30, 2023 net sales, as reported $ 91.6 Decrease due to divestitures (1.4) (1.5) % Change due to organic sales (4.6) (5.0) % 2024 net sales, as reported $ 85.6 (6.6) % Change in Rail, Technology, and Services Sales Trailing Twelve Months Ended Percent Change ($ in millions) September 30, 2023 net sales, as reported $ 320.6 Decrease due to divestitures (7.5) (2.3) % Change due to organic sales 3.9 1.2 % 2024 net sales, as reported $ 317.0 (1.1) %
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57 Non-GAAP Measure: Adj. Infrastructure Organic Sales Change in Infrastructure Solutions Sales Three Months Ended Percent Change ($ in millions) March 31, 2023 net sales, as reported $ 51.1 Decrease due to divestitures (9.9) (19.5) % Change due to organic sales 0.5 1.0 % 2024 net sales, as reported $ 41.7 (18.4) % L.B. Foster Investor Deck December 2024 Note figures may not foot due to rounding. Change in Infrastructure Solutions Sales Three Months Ended Percent Change ($ in millions) December 31, 2022 net sales, as reported $ 59.4 Decrease due to divestitures (7.6) (12.7) % Change due to organic sales 13.7 23.1 % 2023 net sales, as reported $ 65.6 10.3 % Change in Infrastructure Solutions Sales Three Months Ended Percent change ($ in millions) June 30, 2023 net sales, as reported $ 56.4 Decrease due to product line exit (0.8) (1.4) % Change due to organic sales (0.4) (0.7) % 2024 net sales, as reported $ 55.2 (2.2) % Change in Infrastructure Solutions Sales Three Months Ended Percent change ($ in millions) September 30, 2023 net sales, as adjusted $ 60.5 Decrease due to product line exit (1.3) (2.2) % Change due to organic sales (1.1) (1.9) % 2024 net sales, as reported $ 58.0 (4.1) %