L.B. Foster Company (FSTR) 15th Annual Midwest IDEAS Investor Conference summary

Opening remarks and company overview

• Founded in 1902 and headquartered in Pittsburgh, operates globally with 18 principal locations and about 1,100 employees, focusing on innovative infrastructure solutions.

• Realigned reporting structure into Rail, Technologies, and Services, and Infrastructure Solutions segments in Q4 2023.

• 2024 guidance projects revenue between $525M and $550M, adjusted EBITDA of $34M–$37M, and capex at 2.5% of sales.

• As of June 30, 2024, market capitalization was $232M, enterprise value $315M, and net debt $87M.

• Emphasizes its role as a critical infrastructure provider, targeting growth in technology-based offerings.

Strategic transformation and portfolio focus

• Undertook significant portfolio reshaping since 2021, divesting five non-core businesses and completing four acquisitions in rail technologies and precast concrete.

• Management and board were overhauled to drive a new strategic direction and operational focus.

• Rail segment now represents 60% of revenue, with 90% of sales in North America.

• Growth platforms include global friction management, rail products, total track monitoring, UK technology services, precast concrete, and steel products.

• Company was re-added to the Russell 2000 index in June 2024, reflecting improved trading volumes and market confidence.

Financial performance and outlook

• Achieved margin expansion from 16.9% to 21.4% over two years, despite flat top-line growth due to divestitures.

• Projecting 29% EBITDA growth in H2 and 11.7% full-year EBITDA growth for 2024.

• 2025 goals include revenue of $580M–$620M, gross profit margin of 22–23%, and adjusted EBITDA of $48M–$52M (~8% margin).

• Free cash flow guidance is $25M–$30M for H2 2024 and $25M–$35M for 2025, with a 15% free cash flow yield at current stock price.

• Capital expenditures are capital-light, with 2.5% of sales invested, and maintenance CapEx at $6–$8M per year.