Foster (Lb) Co 2026 Q2 Earnings Call
Review the key takeaways and the transcript of this earnings call.
- L.B. Foster reported second quarter 2026 net sales of $138.6 million, a 3.5% decline from last year due to timing of customer orders in the rail products business.
- Adjusted EBITDA increased 19.6% year over year, driven by higher sales volumes and gross profit improvement.
- Cash flow for the quarter was $17.9 million, the highest second quarter level since 2017, with net debt reduced by $13.5 million during the quarter and by $35.2 million compared to last year.
- Gross leverage was cut by over 50% from 2.2 times last year to 1.0 times at quarter end.
- Rail segment sales declined 5.2% due to order timing but showed strong growth in global friction management (up 18.1%) and technology services and solutions (up 66.9%).
- Infrastructure solutions sales decreased 1.5%, with steel product sales down $2 million and precast concrete sales up $0.9 million.
- Year to date sales increased 7.6% to $259.7 million, with rail up 12.9% and infrastructure up 1.4%.
- Adjusted EBITDA for the first half was $16.8 million, up 19.6% from prior year.
- Backlog at quarter end was $246.1 million, down 8.8% year over year but up 17.4% sequentially from the first quarter.
- Several leadership promotions were announced, including Sean Reilly as CFO and Bill Thalman as COO, with Greg Lippard announcing retirement at year end.
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Transcript
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Good day, and welcome to the L.B. Foster second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Lisa Durante, Director of Financial Reporting and Investor Relations. Please go ahead. Thank you, operator.
Good morning, everyone, and welcome to L.B. Foster's second quarter of 2026 earnings call. My name is Lisa Durante, the company's Director of Financial Reporting and Investor Relations. Our President and CEO, John Kasel, and our Chief Financial Officer, Sean Reilly, will be presenting our second quarter operating results, market outlook, and business developments this morning. We'll start the call with John providing his perspective on the company's second quarter performance. Sean will review the company's second quarter financial results. John will provide perspective on market developments and company outlook in his closing comments. We will open up the session for questions. Today's live presentation, along with our earnings release and financial disclosures, were posted on our website this morning and can be accessed on our investor relations page at lbfoster.com. Our comments this morning will follow the slides in the earnings presentation.
Some statements we are making are forward-looking and represent our current view of our markets and business today. These forward-looking statements reflect our opinions only as of the date of this presentation. We undertake no obligation to revise or publicly release the results of any revisions to these statements in light of new information, except as required by securities laws. We will also discuss non-GAAP financial metrics and encourage you to carefully read our disclosures and the reconciliation tables provided within today's earnings release and presentation as you consider these metrics. With that, let me turn the call over to John.
Thanks, Lisa, and hello, everybody. Thanks for joining us today for our second quarter earnings call. Before I commence my remarks, I want to welcome Sean Reilly, who was promoted to CFO effective June 1st. Also present with us on the call is Bill Thalman, who was appointed COO on that same date. Congratulations to both Sean and Bill on your promotions. I'll begin on slide five, covering the key drivers of our second quarter results. As you can see from the earnings release, we delivered another solid quarter with cash generation of $17.9 million, reaching the highest second quarter level since 2017. Net debt was reduced by $13.5 million or 24.2% during the quarter and by $35.2 million or 45.5% compared to last year.
As a result of lower debt levels and improving profitability, our growth leverage was cut by over 50%, from 2.2 times last year to 1.0 times at quarter end. As expected, revenue in the second quarter declined by 3.5% as sales were pulled forward to the first quarter, which resulted in top line growth in the quarter of 23.9%. All in, sales for the six months increased by 7.6% over last year, reflecting the strong start to the year. During the quarter, we continued a strategic shift in the U.K. with the announcement of exit of certain non-core product lines within our Tew Engineering business, incurring $2.6 million of exit-related costs. Adjusted EBITDA in the second quarter was down 4.7% from last year, driven by higher personnel costs, including incentive-based compensation expense.
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