EX-99 2 exb991.txt L.B. FOSTER COMPANY FIRST EXB PRESS RELEASE -------------------------------------------------------------------------------- L. B. Foster Company 415 Holiday Drive, Pittsburgh, PA 15220 Contact: Stan L. Hasselbusch Phone: (412) 928-3417 FAX: (412) 928-7891 Email: investors@LBFosterCo.com FOR IMMEDIATE RELEASE L. B. FOSTER COMPANY REPORTS STRONG FIRST QUARTER RESULTING IN 96% INCREASE IN INCOME FROM CONTINUING OPERATIONS PITTSBURGH, PA, April 27, 2006 - L.B. Foster Company (NASDAQ: FSTR), a leading manufacturer, fabricator, and distributor of rail, construction, and tubular products, today reported that its first quarter earnings per diluted share from continuing operations nearly doubled compared to the prior year quarter, the fifth consecutive quarter the Company has recorded an earnings increase over the prior year. 2006 First Quarter Results In the first quarter of 2006, L. B. Foster had earnings per diluted share of 36 cents and net income of $3.9 million compared to 6 cents per diluted share and net income of $0.6 million in the first quarter of 2005. The results of discontinued operations reflect the sale of our Geotechnical Division in the first quarter of 2006. Income from discontinued operations of $2.8 million includes the gain on this sale of $3.0 million, reduced by a $0.2 million loss from operations during the period we owned the business. Income taxes were favorably affected by the release of a valuation allowance recorded in 2003 related to a capital loss carryforward. Diluted earnings per share from continuing operations was 11 cents on earnings of $1.2 million compared to 6 cents on earnings of $0.6 million in 2005. Net sales increased 24% to $84.2 million compared to $67.6 million in the prior year quarter. Gross profit margin was 11.6%, up 80 basis points from the prior year quarter as a result of increased plant efficiencies and favorable variances in product purchases. "Piling and Rail Products continued to deliver strong sales. Our concrete tie business results improved substantially due to strong activity at our Spokane facility. Although our Fabricated Products Division continued to lose money, it performed substantially better than the prior year quarter," remarked Stan Hasselbusch, President and Chief Executive Officer. "We are pleased to report that tie production in our recently refurbished Grand Island facility continued to increase to levels where its first quarter production increased 10% over last year. We are also pleased to announce that our Tucson facility construction is well underway and on schedule," added Mr. Hasselbusch. Mr. Hasselbusch concluded, "Overall business activity remains strong and is reflected in our first quarter order bookings. Bookings for the first quarter were $121 million, 14% higher than the same period last year. Backlog at March 31, 2006 was $141 million, which was 25% higher than last year." Selling and administrative expenses increased $1.2 million or 18% over the same prior year period due primarily to employee related costs and benefit expenses. Fourth quarter interest expense increased $0.2 million over the prior year due to increased interest rates and increased borrowings. The increase in borrowings was due primarily to an increase in working capital requirements as well as higher than typical capital investments made during the past three quarters. The Company's income tax rate was 34.4% in the first quarter compared to 30.4% in the prior year quarter. The lower tax rate in 2005 is the result of releasing a portion of the valuation allowance provided for state deferred assets. Cash flow from operations was a negative $5.9 million for the first quarter, due to an expected ramp up in activity in anticipation of a seasonally strong spring/summer period. Capital expenditures for the quarter were $5.2 million as we are working to complete the Tucson concrete tie facility later this summer. L. B. Foster Company will conduct a conference call and webcast to discuss its first quarter operating results on Thursday, April 27, 2006 at 11:00am ET. The call will be hosted by Mr. Stan Hasselbusch, President and Chief Executive Officer. Listen via audio on the L.B. Foster web site: www.lbfoster.com, by accessing the Investor Relations page. The Company wishes to caution readers that various factors could cause the actual results of the Company to differ materially from those indicated by forward-looking statements in news releases, and other communications, including oral statements, such as references to future profitability, made from time to time by representatives of the Company. Specific risks and uncertainties that could affect the Company's profitability include, but are not limited to, general economic conditions, adequate funding for infrastructure projects, the potential value of the Dakota Minnesota & Eastern Railroad, delays or problems encountered during construction or implementation at our concrete tie facilities, and the continued availability of existing and new piling and rail products. Matters discussed in such communications are forward-looking statements that involve risks and uncertainties. Sentences containing words such as "anticipates," "expects," or "will," generally should be considered forward-looking statements. More detailed information on these and additional factors which could affect the Company's operating and financial results are described in the Company's Forms 10-K, 10-Q and other reports, filed or to be filed with the Securities and Exchange Commission. The Company urges all interested parties to read these reports to gain a better understanding of the many business and other risks that the Company faces. The forward-looking statements contained in this press release are made only as of the date hereof, and the Company undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise. CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS L. B. FOSTER COMPANY AND SUBSIDIARIES (In Thousands, Except Per Share Amounts) Three Months Ended March 31, -------------------------- 2006 2005 -------------------------- (Unaudited) NET SALES $84,155 $67,633 COSTS AND EXPENSES: Cost of goods sold 74,351 60,296 Selling and administrative expenses 7,731 6,530 Interest expense 665 424 Other income (431) (500) ---------- -------- 82,316 66,750 ---------- -------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 1,839 883 INCOME TAXES 633 268 ---------- -------- INCOME FROM CONTINUING OPERATIONS, NET OF TAX 1,206 615 DISCONTINUED OPERATIONS: INCOME FROM DISCONTINUED OPERATIONS 2,819 24 INCOME TAXES 141 11 ---------- -------- INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX 2,678 13 NET INCOME $3,884 $628 ========== ======== BASIC EARNINGS PER COMMON SHARE: FROM CONTINUING OPERATIONS $0.12 $0.06 FROM DISCONTINUED OPERATIONS 0.26 0.00 ---------- -------- BASIC EARNINGS PER COMMON SHARE $0.38 $0.06 ========== ======== DILUTED EARNINGS PER COMMON SHARE: FROM CONTINUING OPERATIONS $0.11 $0.06 FROM DISCONTINUED OPERATIONS 0.25 0.00 ---------- -------- DILUTED EARNINGS PER COMMON SHARE $0.36 $0.06 ========== ======== AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC 10,195 10,066 ========== ======== AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED 10,654 10,395 ========== ======== L. B. Foster Company and Subsidiaries Consolidated Balance Sheet ($ 000's) March 31, December 31, 2006 2005 ---------- ----------- ASSETS (Unaudited) CURRENT ASSETS: Cash and cash items $1,404 $1,596 Accounts and notes receivable: Trade 52,712 44,087 Other 151 1,354 Inventories 71,290 67,044 Current deferred tax assets 1,779 1,779 Other current assets 1,821 703 Current assets of discontinued operations 1,258 3,867 ---------- ---------- Total Current Assets 130,415 120,430 ---------- ---------- OTHER ASSETS: Property, plant & equipment-net 42,632 38,761 Goodwill 350 350 Other intangibles - net 124 144 Investments 15,934 15,687 Deferred tax assets 1,161 1,183 Other non-current assets 281 177 Assets of discontinued operations 0 1,554 ---------- ---------- Total Other Assets 60,482 57,856 ---------- ---------- $190,897 $178,286 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities on long-term debt $1,780 $1,759 Short-term borrowings 7,013 5,881 Accounts payable-trade and other 46,256 41,087 Accrued payroll and employee benefits 4,007 5,875 Current deferred tax liabilities 4,845 4,845 Other accrued liabilities 4,102 3,128 Current liabilities of discontinued operations 675 1,760 ---------- ---------- Total Current Liabilities 68,678 64,335 ---------- ---------- LONG-TERM BORROWINGS 24,509 20,848 ---------- ---------- OTHER LONG-TERM DEBT 8,663 8,428 ---------- ---------- DEFERRED TAX LIABILITIES 1,615 1,615 ---------- ---------- OTHER LONG-TERM LIABILITIES 3,283 3,071 ---------- ---------- STOCKHOLDERS' EQUITY: Class A Common stock 102 102 Paid-in Capital 35,755 35,598 Retained Earnings 49,197 45,313 Treasury Stock (82) (126) Accumulated Other Comprehensive Loss (823) (898) ---------- ---------- Total Stockholders' Equity 84,149 79,989 ---------- ---------- $190,897 $178,286 ========== ==========