EX-99.1 3 e14666ex99_1.txt PRESS RELEASE Exhibit 99.1 L. B. Foster Company Reports First Quarter Results PITTSBURGH, April 23 /PRNewswire-FirstCall/ -- L. B. Foster Company (Nasdaq: FSTR), a manufacturer, fabricator, and distributor of rail, construction, and tubular products, today reported improved first quarter results from continuing operations of $64 thousand ($0.01 per share) in 2003 versus net income from continuing operations of $28 thousand ($0.00 per share) in the first quarter of 2002. Including a net loss from discontinued operations (related to the Company's Foster Technologies subsidiary), the Company reported a net loss of $0.2 million ($0.02 per share) for the first quarter of 2003. This compares to the first quarter of 2002 net loss of $4.7 million ($0.50 per share) which included a loss from discontinued operations of $0.3 million ($0.03 per share) and a non-cash charge of $4.4 million ($0.46 per share) from the cumulative effect of a change in accounting principle as a result of the adoption of Financial Accounting Standards No. 142 "Goodwill and Other Intangible Assets." Net sales for the first quarter of 2003 were $59.5 million compared to $63.2 million in 2002, a decrease of 6% due principally to a decline in Construction Product sales. Gross margins improved 0.8 percentage points to 11.6%, while selling and administrative expenses increased $0.2 million or 3% over the same prior year period. The gross profit margin improvement was due primarily to improved Rail Segment margins, while the selling and administrative cost increase was due primarily to risk management costs. Corporate borrowings declined by $8.2 million resulting in a 14% reduction in interest expense when compared to the prior year first quarter. During the first quarter, the Company finalized the sale of certain assets and liabilities of its Foster Technologies subsidiary engaged in the rail signaling and communication device business. The first quarter 2003 loss from this business, which has been classified as discontinued operations, was principally due to operating losses incurred up to the sale date as well as certain charges taken primarily related to severance and a lease termination. Future expenses related to this business as it winds down are expected to be immaterial. On the continued strength of working capital management, cash flow from operations was positive and, combined with the sale of the rail signaling business, was adequate to fund a $2.2 million reduction in debt for the quarter. Capital expenditures were less than $0.5 million for the first quarter of 2003, compared to $1.7 million for capital improvements and $2.2 million for the Greulich acquisition in the same period of 2002. President and CEO, Stan Hasselbusch commented, "We are pleased that our first quarter results from continuing operations were positive and showed improvement over the last several years. Our Rail Segment performed better than expected and better than last year. Although Construction Segment net sales decreased in the first quarter of 2003 as compared to the prior year, we are encouraged by a 45% increase in new piling orders as compared to the prior year due to the availability of sheet pile. First quarter Piling sales were lower than last year due to lower volumes and lower prices for H-bearing pile. We continue to expect an increase in Piling sales and profitability in 2003 as we enter the higher activity season of the year. Since the first quarter is traditionally our weakest quarter due to the seasonality of certain of our operations, we expect to see improved profitability as the year progresses." Hasselbusch went on to say, "Despite the continued economic challenges we face in a difficult marketplace, we expect improved operating results in fiscal 2003 over last year, due in large part to several operations initiatives we have implemented and, as a result, anticipate that the Company will be profitable in 2003. We continue to review and improve processes and efficiency levels in our manufacturing operations. This is a key objective for the Company in 2003. We also continue to review asset utilization to determine whether our assets are performing as needed. This type of review prompted the sale of the rail signaling business in the first quarter of this year." 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 Company's ability to obtain special trackwork products and continued availability of existing and new piling 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. CONDENSED STATEMENTS OF CONSOLIDATED INCOME L. B. FOSTER COMPANY AND SUBSIDIARIES (In Thousands, Except Per Share Amounts) Three Months Ended March 31, 2003 2002 (Unaudited) NET SALES $ 59,519 $ 63,173 COSTS AND EXPENSES: Cost of goods sold 52,586 56,378 Selling and administrative expenses 6,567 6,373 Interest expense 579 674 Other (income) expense (320) (280) 59,412 63,145 INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 107 28 INCOME TAXES 43 0 INCOME FROM CONTINUING OPERATIONS BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 64 28 DISCONTINUED OPERATIONS: LOSS FROM OPERATIONS OF FOSTER TECHNOLOGIES (380) (317) INCOME TAX BENEFIT (150) 0 LOSS ON DISCONTINUED OPERATIONS (230) (317) CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET OF TAX 0 (4,390) NET LOSS ($166) ($4,679) BASIC & DILUTED (LOSS) EARNINGS PER SHARE: FROM CONTINUING OPERATIONS BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE $ 0.01 $ 0.00 FROM DISCONTINUED OPERATIONS, NET OF TAX (0.02) (0.03) CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET OF TAX 0.00 (0.46) BASIC AND DILUTED LOSS PER SHARE ($0.02) ($0.50) AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC 9,524 9,441 AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED 9,599 9,661 L. B. Foster Company and Subsidiaries Consolidated Balance Sheet ($ 000's)
March 31, December 31, 2003 2002 ASSETS (Unaudited) CURRENT ASSETS: Cash and cash items $ 3,927 $ 3,653 Accounts and notes receivable: Trade 39,790 39,125 Other 154 238 Inventories 34,677 32,925 Current deferred tax assets 1,494 1,494 Other current assets 1,482 696 Current assets of discontinued operations 13 138 Total Current Assets 81,537 78,269 OTHER ASSETS: Property, plant & equipment-net 35,271 36,083 Assets of discontinued operations 1 196 Goodwill 350 350 Other intangibles - net 702 739 Investments 12,965 12,718 Deferred tax assets 4,443 4,454 Other non-current assets 1,068 1,175 Total Other Assets 54,800 55,715 $ 136,337 $ 133,984 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities on long-term debt $ 781 $ 825 Accounts payable-trade and other 28,394 24,094 Accrued payroll and employee benefits 2,587 2,413 Current deferred tax liabilities 1,474 1,474 Other accrued liabilities 2,721 2,695 Liabilities of discontinued operations 156 74 Total Current Liabilities 36,113 31,575 LONG-TERM BORROWINGS 21,000 23,000 OTHER LONG-TERM DEBT 3,829 3,991 DEFERRED TAX LIABILITIES 4,195 4,195 OTHER LONG-TERM LIABILITIES 5,274 5,210 STOCKHOLDERS' EQUITY: Class A Common stock 102 102 Paid-in Capital 35,143 35,143 Retained Earnings 35,042 35,208 Treasury Stock (3,616) (3,629) Accumulated Other Comprehensive Income (745) (811) Total Stockholders' Equity 65,926 66,013 $ 136,337 $ 133,984