UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported) October 26, 2006
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L. B. Foster Company
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(Exact name of registrant as specified in its charter)
Pennsylvania 000-10436 25-1324733
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
415 Holiday Drive, Pittsburgh, Pennsylvania 15220
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (412) 928-3417
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(Former name or former address, if changed since
last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On October 26, 2006, L.B. Foster Company (the "Company") issued a press
release announcing the Company's results of operations for the third quarter
ended September 30, 2006. A copy of that press release is furnished with this
report as Exhibit 99.1.
The information contained in this Current Report shall not be deemed to be
"filed" for the purposes of Section 18 of the Securities and Exchange Act of
1934 (the "Exchange Act"), as amended, or otherwise subject to the liabilities
of that section, nor shall such information be deemed incorporated by reference
in any filing under the Securities and Exchange Act of 1933, as amended, except
as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release issued by L.B. Foster Company, October 26, 2006.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
L.B. Foster Company
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(Registrant)
Date: October 26, 2006
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/s/ David J. Russo
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David J. Russo
Senior Vice President,
Chief Financial Officer and Treasurer
EXHIBIT INDEX
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Exhibit Number Description
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99.1 Press Release dated October 26, 2006, of L. B. Foster Company.
PRESS RELEASE
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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 CONTINUED STRONG EARNINGS IMPROVEMENT IN
THIRD QUARTER
PITTSBURGH, PA, October 26, 2006 - L.B. Foster Company (NASDAQ: FSTR), a leading
manufacturer, fabricator, and distributor of rail, construction, and tubular
products, today reported that its third quarter earnings per diluted share from
continuing operations increased to $0.32 from $0.21, a 52% increase, the seventh
consecutive quarter the Company has recorded an earnings increase over the prior
year quarter.
2006 Third Quarter Results
In the third quarter of 2006, L. B. Foster had earnings per diluted share of 34
cents and net income of $3.7 million compared to 22 cents per diluted share and
net income of $2.3 million in the third quarter of 2005. The Company reported
$0.3 million of income from discontinued operations, which reflects the winding
down of our former Geotechnical Division, that was sold in the first quarter of
2006. Diluted earnings per share from continuing operations were 32 cents on
earnings of $3.4 million compared to 21 cents on earnings of $2.2 million in
2005.
Net sales increased 5% to $95.9 million compared to $90.9 million in the prior
year quarter.
Gross profit margin was 14.5%, up 260 basis points from the prior year quarter
primarily as a result of increased billing margins.
Selling and administrative expenses increased $0.9 million or 13% over last
year's quarter due primarily to employee related costs and benefit expenses.
Third quarter interest expense increased $0.1 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 from continuing operations was 32.2% in the third
quarter compared to 31.5% in the prior year quarter.
"Rail Products continued to deliver strong sales and more importantly, improved
gross profit margins. Our concrete tie business results improved over last year
due to strong activity at our Spokane and Grand Island facilities. Our precast
buildings business also contributed significantly improved margins on moderately
increased sales and our Fabricated Products Division continued its improvement
over last year's third quarter as well as the first two quarters of this year,"
remarked Stan Hasselbusch, President and Chief Executive Officer. "We are also
pleased to report that our Tucson concrete tie facility has recently ramped up
production of concrete ties as it nears the completion of its commissioning
period." added Mr. Hasselbusch.
2006 Year-to-Date Results
In the first nine months of 2006, L.B. Foster had income from continuing
operations of $7.7 million or 72 cents per diluted share compared to $4.4
million or 42 cents per diluted share for the first nine months of 2005. Income
from discontinued operations for the first nine months of 2006 was $2.8 million
which includes the gain on the sale of our former Geotechnical Division of $3.0
million, reduced by a $0.2 million loss from operations and wind down costs. The
discontinued operations income tax provision was favorably affected by the
release of a valuation allowance recorded in 2003 related to a capital loss
carryforward.
Net sales for the first nine months of 2006 increased 12% to $279.3 million
compared to $249.3 million in 2005. Gross profit margin was 13.3%, up 190 basis
points from the first nine months of 2005, primarily as a result of increased
billing margins.
Selling and administrative expenses increased $3.5 million or 16% over the same
prior year period due primarily to employee related costs and benefit expenses.
Interest expense increased $0.6 million over the prior year due to increased
interest rates and increased borrowings. The Company's income tax rate from
continuing operations was 31.3% compared to 32.5% in the prior year.
Cash used by operations was approximately $7.0 million for the first nine months
of 2006, due to an expected ramp up in activity in anticipation of a seasonally
strong spring/summer period, however third quarter cash generated from
operations was $7.3 million. Capital expenditures for the first nine months were
$12.8 million as we have substantially completed the construction of our Tucson
concrete tie facility.
Mr. Hasselbusch concluded, "Overall business activity remains strong and is
reflected in our third quarter order bookings. Bookings for the first nine
months were $344 million, 24% higher than the same period last year. Backlog at
September 30, 2006 was $171 million, 62% higher than last year, which we expect
to translate into a strong fourth quarter."
L. B. Foster Company will conduct a conference call and webcast to discuss its
third quarter operating results on Thursday, October 26, 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 INCOME
L. B. FOSTER COMPANY AND SUBSIDIARIES
(In Thousands, Except Per Share Amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
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2006 2005 2006 2005
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(Unaudited) (Unaudited)
NET SALES $95,868 $90,915 $279,336 $249,260
COSTS AND EXPENSES:
Cost of goods sold 81,978 80,079 242,197 220,952
Selling and administrative
expenses 8,245 7,316 24,661 21,194
Interest expense 892 778 2,415 1,775
Other income (322) (478) (1,186) (1,205)
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90,793 87,695 268,087 242,716
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INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 5,075 3,220 11,249 6,544
INCOME TAXES 1,635 1,013 3,524 2,125
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INCOME FROM CONTINUING OPERATIONS, NET OF TAX 3,440 2,207 7,725 4,419
DISCONTINUED OPERATIONS:
INCOME FROM DISCONTINUED OPERATIONS 495 206 3,196 232
INCOME TAXES 237 65 357 77
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INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX 258 141 2,839 155
NET INCOME $3,698 $2,348 $10,564 $4,574
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BASIC EARNINGS PER COMMON SHARE:
FROM CONTINUING OPERATIONS $0.33 $0.22 $0.75 $0.44
FROM DISCONTINUED OPERATIONS 0.02 0.01 0.27 0.02
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BASIC EARNINGS PER COMMON SHARE $0.35 $0.23 $1.02 $0.45
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DILUTED EARNINGS PER COMMON SHARE:
FROM CONTINUING OPERATIONS $0.32 $0.21 $0.72 $0.42
FROM DISCONTINUED OPERATIONS 0.02 0.01 0.26 0.01
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DILUTED EARNINGS PER COMMON SHARE $0.34 $0.22 $0.98 $0.44
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AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - BASIC 10,510 10,150 10,360 10,101
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AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - DILUTED 10,872 10,534 10,780 10,453
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L. B. Foster Company and Subsidiaries
Consolidated Balance Sheet
(In thousands)
September 30, December 31,
2006 2005
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ASSETS (Unaudited)
CURRENT ASSETS:
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Cash and cash items $3,764 $1,596
Accounts and notes receivable:
Trade 50,407 44,087
Other 480 1,354
Inventories 80,410 67,044
Current deferred tax assets 1,779 1,779
Other current assets 1,219 703
Prepaid income tax 2,901 582
Current assets of discontinued operations - 3,867
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Total Current Assets 140,960 121,012
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OTHER ASSETS:
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Property, plant & equipment-net 49,891 38,761
Goodwill 350 350
Other intangibles - net 83 144
Investments 16,429 15,687
Deferred tax assets 1,228 1,183
Other non-current assets 384 177
Assets of discontinued operations - 1,554
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Total Other Assets 68,365 57,856
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$209,325 $178,868
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
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Current maturities on long-term debt $2,169 $1,759
Short-term borrowings 8,059 5,881
Accounts payable-trade and other 45,643 41,087
Accrued payroll and employee benefits 5,410 5,875
Current deferred tax liabilities 4,845 4,845
Other accrued liabilities 2,002 3,710
Current liabilities of discontinued operations 285 1,760
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Total Current Liabilities 68,413 64,917
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LONG-TERM BORROWINGS 30,625 20,848
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OTHER LONG-TERM DEBT 9,773 8,428
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DEFERRED TAX LIABILITIES 1,615 1,615
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OTHER LONG-TERM LIABILITIES 4,134 3,071
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STOCKHOLDERS' EQUITY:
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Class A Common stock 105 102
Paid-in Capital 39,698 35,598
Retained Earnings 55,877 45,313
Treasury Stock - (126)
Accumulated Other Comprehensive Loss (915) (898)
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Total Stockholders' Equity 94,765 79,989
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$209,325 $178,868
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