L.B. Foster Realigns Business Structure for Future Growth Strategies
L.B. Foster’s business portfolio and external business segment reporting structure will be consolidated into two primary segments: Rail Technologies & Services and Infrastructure Solutions. The Rail Technologies & Services segment will consist of businesses previously positioned within the Rail Products & Services segment. The Infrastructure Solutions segment will combine all businesses previously within the legacy Construction Products and Tubular and Energy Services segments. Each segment will report to a business line executive that will have responsibility for the segment’s performance.
In the Rail Technologies & Services segment, the Company has increased its emphasis in developing technology to support new products and services and deliver real benefits to customers with improved efficiency, reduced disruptions, improved passenger comfort and information, and enhanced safety. Core track products are being re-imagined, redesigned and improved with respect to resiliency and concerns around noise, vibration, and exposure to tough environmental conditions. Leveraging these technologies across new and existing products and geographic markets is a cornerstone of this segment’s growth strategy.
Infrastructure Solutions is positioned to benefit from anticipated investment in a wide range of infrastructure needs including solutions that support transportation, energy, and general infrastructure projects. Growth opportunities exist in several areas across this segment as customers seek partners with unique capabilities to solve problems with a cost effective, innovative approach. This segment provides custom engineered solutions tailored to customer specifications often supporting highly complex projects. Engineering and construction firms and general contractors look to L.B. Foster Infrastructure Solutions for design and application engineering help when addressing needs across highway, bridge, ports, railways, heavy civil, marine, water and storm water, agricultural, commercial, and residential projects. We leverage our unique capabilities using fabricated steel, precast concrete, and other systems and services from facilities that commonly manage complex projects.
Commenting on the changes,
Beginning with the 2020 Annual Report filed on Form 10-K, financial results for the Company will reflect the realigned segment structure. Included in this release are restated results for 2018, 2019, and the first three quarters of 2020.
These organizational changes will not have an impact on the Company’s portfolio of products, services, and solutions.
About
This release 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 earnings release 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: the COVID-19 pandemic, and 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; a continued deterioration in the prices of oil and natural gas and the related impact on the upstream and midstream energy markets; a continuation or worsening of the adverse economic conditions in the markets we serve, whether as a result of the current COVID-19 pandemic, including its impact on travel and demand for oil and gas, the continued deterioration in the prices for oil and gas, governmental travel restrictions, 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 continuing decrease in freight or transit rail traffic, including as a result of the COVID-19 pandemic; environmental matters, including any costs associated with any remediation and monitoring; the risk of doing business in international markets, including compliance with anti-corruption and bribery laws, foreign currency fluctuations and inflation, 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 disposition of the IOS Test and Inspection Services business and acquisition of
Investor Relations:
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Suite 100
Nine Months Ended |
Nine Months Ended |
||||||||||||||||||||
Prior Segment Structure | New Segment Structure | ||||||||||||||||||||
Rail Products and Services |
Construction Products |
Tubular and Energy Services1 |
Rail Technologies and Services |
Infrastructure Solutions |
|||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||||
$ | 209,131 | $ | 108,925 | $ | 63,779 | $ | 209,131 | $ | 172,704 | ||||||||||||
Gross Profit | 40,470 | 15,964 | 16,887 | 40,470 | 32,851 | ||||||||||||||||
Gross Profit Percentage | 19.4 | % | 14.7 | % | 26.5 | % | 19.4 | % | 19.0 | % | |||||||||||
Segment Profit | 10,729 | 1,623 | 7,213 | 10,729 | 8,836 | ||||||||||||||||
Segment Profit Percentage | 5.1 | % | 1.5 | % | 11.3 | % | 5.1 | % | 5.1 | % |
Year Ended |
Year Ended |
||||||||||||||||||||
Prior Segment Structure | New Segment Structure | ||||||||||||||||||||
Rail Products and Services |
Construction Products |
Tubular and Energy Services1 |
Rail Technologies and Services |
Infrastructure Solutions |
|||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||||
$ | 321,808 | $ | 182,486 | $ | 112,134 | $ | 321,808 | $ | 294,620 | ||||||||||||
Gross Profit | 63,667 | 25,501 | 31,770 | 63,667 | 57,271 | ||||||||||||||||
Gross Profit Percentage | 19.8 | % | 14.0 | % | 28.3 | % | 19.8 | % | 19.4 | % | |||||||||||
Segment Profit | 19,641 | 5,726 | 17,889 | 19,641 | 23,615 | ||||||||||||||||
Segment Profit Percentage | 6.1 | % | 3.1 | % | 16.0 | % | 6.1 | % | 8.0 | % |
Year Ended |
Year Ended |
||||||||||||||||||||
Prior Segment Structure | New Segment Structure | ||||||||||||||||||||
Rail Products and Services |
Construction Products |
Tubular and Energy Services1 |
Rail Technologies and Services |
Infrastructure Solutions |
|||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||||
$ | 319,524 | $ | 158,653 | $ | 102,887 | $ | 319,524 | $ | 261,540 | ||||||||||||
Gross Profit | 62,307 | 22,899 | 28,262 | 62,307 | 51,161 | ||||||||||||||||
Gross Profit Percentage | 19.5 | % | 14.4 | % | 27.5 | % | 19.5 | % | 19.6 | % | |||||||||||
Segment Profit | 19,468 | 6,798 | 14,789 | 19,468 | 21,587 | ||||||||||||||||
Segment Profit Percentage | 6.1 | % | 4.3 | % | 14.4 | % | 6.1 | % | 8.3 | % |
1 Tubular and Energy Services excludes the results of Test and Inspection Services as a result of the
Source: L.B. Foster Company