L.B. Foster Company (FSTR) Small-Cap Virtual Conference summary

Strategy and portfolio

• Since 2021, exited ~7 businesses or product lines and shifted cash from returns platforms to growth platforms; TTM adjusted EBITDA margin rose from 3.6% to 7.5%, with EBITDA dollars doubling.

• Divestitures of lower-margin businesses and acquisitions in higher-margin rail technologies and precast supported portfolio transformation; growth platforms include Friction Management, Track Monitoring and Precast.

• Rail Products, UK TS&S and Steel Products are returns platforms optimized for cash generation; Global Friction Management, Total Track Monitoring and Precast are growth platforms.

• Precast grew 138% over 4–5 years, including a ~$40M Tennessee acquisition; organic growth and further investment are planned.

• Rail Products holds 42% market share; Rail Technologies holds 18%; Precast Buildings holds 14% and broader Precast Products 1%.

Financial performance and capital allocation

• Q2 2026 sales were $138.6M, down $5M YoY; 1H sales rose 7.6% or more than $18M. Q2 gross margin expanded 80 bps, while adjusted EBITDA fell $575K; 1H adjusted EBITDA rose 19.6% or $2.8M.

• Q2 operating cash flow was a record $17.9M since 2017; TTM Q2 sales were $559M, adjusted EBITDA $42M, gross margin 21.7% and adjusted EBITDA margin 7.5%.

• Backlog was $246.1M, down 8.8% YoY, with most of the decline tied to a $19M Protective Coatings order canceled in Q3 of the prior year; new orders were $176.1M.

• Net debt was $42M versus $77M a year earlier; gross leverage was 1.0x against a 1.0x–1.5x target, with more than $107M in funding capacity.

• 2026 guidance reaffirmed: revenue $540–$580M, adjusted EBITDA $41–$46M, FCF $15–$25M and capex at 2.7% of sales; $28.7M of repurchase authorization remains through Feb 2028.

Markets and growth opportunities

• Rail Products serves a ~$450M addressable market with ~42% share; long-term growth expectation is 2%–3%, with demand recovering in 2026 after funding-related softness in 2025.

• Rail Technologies grew nearly 3x expected market growth over the cited three-year period, driven largely by Friction Management.

• Precast Concrete is a ~$170M business with above-average margins; CXT Buildings generate ~$90M in revenue and offer faster installation than conventional site construction.

• CXT has close to 50% share of the ~$200M in-plant modular market; the separate ~$400M site-built market is an expansion opportunity for factory-built buildings.

• CRISI rail funding increased ~5x versus the prior five years; unspent IIJA funding and infrastructure investment support multi-year rail, civil construction and Precast opportunities.