Foster (Lb) Co Small-Cap Virtual Conference

Thanks, Julio, and good afternoon, everyone. Thanks again for joining today's call. Look forward to giving you an update on progress that we have made as a company over the last several years, and most importantly, continued progress in 2026 as well as what we expect to see in the future related to our strategy and the execution that we have been able to accomplish. My name is Bill Thalman. I am Chief Operating Officer of the company. Been with the company a little over five years. Primary responsibility was the CFO for a large portion of that time and was recently promoted to the Chief Operating Officer back in early June. Sean Reilly, who is with us here today, was promoted to the Chief Financial Officer. We will take you through the materials today and then have some Q&A at the end.

On slide 4, you can see we have been around for close to 125 years, based out of Pittsburgh. We are largely a North American based company. We do have some exposure outside of the U.S. and Canada, but largely North American based. About 1,200 employees around the world. We are an infrastructure solutions provider. We provide technology services, solutions that are primarily geared towards the rail industry and civil construction markets. We have two segments that we operate the business in. The rail segment is a little bit bigger than infrastructure. Both have been growing nicely over the last several years, and the profitability improvement profile of those two segments is really what is the most prevalent improvement that we have seen as a result of our strategy. We will get into that a bit more here in a few slides. Next slide, Dan. After that, please.

Yeah, the two segments you can see margin profiles are similar, a little lower in the rail segment. The rail business has a fairly large distribution element for the business. It is about $150 million or just shy of half of that, just shy of half the size of the rail segment. So that drags the margins down a little bit. Infrastructure is a little higher than that, primarily from our Precast Concrete business. Overall, both of the segments have enjoyed nice margin improvements over the last three to five years, largely as a result of our strategy. Next slide, please, Dan. These are the three product business units within our rail segment. Rail Products, Friction Management, and TS&S. You can see on the right-hand side of that chart the sales values of each of those product units and the margin profiles.

This will become a bit more important as we go into the materials today. We really do view these elements of the portfolio as interrelated drivers of our performance, with some elements providing cash for investment in other components of the portfolio that we want to drive more growth in, and they all play an important role in our overall strategy and how it is being executed. We will cover a bit more of that when we get into the platforms of the business going forward. Next slide, please, Daniel. We thought it is important to lay out a bit more on our addressable market for Rail Products. As you can imagine, that is track. It is insulated rail joints, fasteners, product lines that are used largely in rail maintenance. It is about a $450 million addressable market for us, and we have got about 42% share.

Over the last couple of years, you can see on the slide section in the middle of the slide, the growth rate for that part of the business has been a little bit low relative to what we believe the long-term growth rate is. The long-term growth rate for this product line is about a GDP type level, about 2%-3%, we would say. But because of government funding constraints in place in early 2025, we saw a period of softer demand in our Rail Products business line, particularly the rail distribution product line. That has improved from where we were in 2025, and we would expect us to return to that more normalized growth level, in 2026, and we have had some good success so far here in 2026 in Rail Products in terms of returning to growth.

On the rail technology side, you can see that market growth rates are a little higher in expectation. These are longer sales cycle product lines. They take a bit of time for the customers to buy in terms of the opportunity that the technology presents itself. But you can see in terms of our success, we have been nearly three times or slightly over three times the growth rate, expected growth rate, for these product lines in the last three to five years, three years in this case. It is largely because of the progress that we made in our Friction Management business. I will talk a bit about that here in a few minutes. Next slide. The infrastructure solutions segment, we have two elements of the portfolio there. The Precast Concrete business, you can see it is $170 million or so.

It has been growing nicely over the last five years. Some of that is organic, some inorganic. That is one of our key growth platforms, and given the investment in infrastructure and civil project works here in the U.S., that is a product line that has been doing quite well. You can see the margin profile of that product line is higher overall and higher than the overall average that we have for the company. So it has been accretive to our profitability profile as that product line has grown. The steel products product line, there are three primary product lines within that product group. There is bridge forms, coated pipe for oil and gas distribution, and there is also threaded water well pipe in that part of the business as well.

I guess what I would say about steel products is it is an important part of the portfolio and the returns profile, and it is one where we have seen some improvement in the Protective Coatings pipe portion of the business after several years of softness after COVID, and for a four-year period of time. But recently we have seen an uptick in demand with the renewed interest and investment in energy capabilities here in the U.S. So we think there is opportunity for the coated pipe business to return to a better level here in the near future. Next slide. Circling back to Precast Concrete, thinking about the addressable market, our CXT Precast Concrete Buildings, which is a primary component of that business, it is about $90 million in revenue out of the $170 million that I mentioned earlier.

It has been growing nicely over the last three to five years with some of the national park investment in the U.S. The other thing that is attractive, it is a site-built facility. Sorry, it is a modular-built facility that is built within our operating locations. So when those units are produced, we ship them to the site, and it is installed at the site within a couple, three days. It is operational, and it is able to be utilized once the utilities are hooked up. So this is a nice element of the value proposition for this product line. It is able to be operational very quickly. You do not need labor to bring in to do site-built construction, which is a significant headwind for many of the markets today. So we are currently about 14% of the market. We have a very high percentage of what I would call the in-factory modular-built segment.

When you include the site-built element of the market, we have a significant opportunity to grow here. The last thing I would say on the Precast Concrete product side, that is other Precast Concrete products, forms, different components that are used in civil construction markets, manholes, pipes, box culverts, and so on. We are basically a very small component of a very large market. We have nice market share positions within our regional markets that we participate. But when you look at the opportunity overall, we are relatively small, and we have opportunities to grow at a faster pace because of that as well. Next slide. I mentioned earlier that we have our two different platforms how we think about the portfolio, the returns platforms and the growth platforms. This was established back in 2021.

It gives us a view of the market and our portfolio and our opportunities to grow by pooling cash from the returns profile, our returns platforms, and investing that cash in our growth platforms, and primarily within Friction Management, our Total Track Monitoring technologies. So both of those product groups are our Rail Products part of the portfolio. Then we also have our Precast Concrete business. Next slide, Daniel. You can see on this chart the benefits of what has transpired over the last three to five years in terms of executing that strategy, pooling cash from the returns platforms, and investing it into the growth platforms. You can see the growth rates that we have been able to achieve in Friction Management and Total Track Monitoring and in Precast Concrete. Now, the Precast Concrete number, that is 138% growth over about four to five years.

There was an acquisition in there, about a $40 million acquisition of our business in Tennessee. We are also growing nicely on an organic basis as well, and we are making further investments in Precast Concrete to be able to grow organically because of the market opportunity that we are able to see. The whole strategy has worked really well to drive growth in our most profitable product lines and change the profitability profile of the company, and we still believe there is more room for growth. I will pause there, turn it over to Sean, and Sean can cover the financials for the company.

Sean? Thank you, Bill, and good afternoon, everyone.