Backlog1 of $247.4 million up 18.4% over last year driven by 58.2% increase in Rail; all Rail business units realized substantial backlog increases, with Rail Products up 59.9%, Global Friction Management up 28.7%, and Technology Services and Solutions up 77.7% driven by improved order rates in the UK
Third quarter operating cash flow was $29.2 million; $26.4 million in Free Cash Flow1 drove Gross Leverage1 to 1.6x, down 0.6x during the quarter; $4.7 million deployed to repurchase 184,143 shares
Revised 2025 guidance mid-points assume a 22% increase in Adjusted EBITDA1 versus last year on 2% sales growth; fourth quarter Adjusted EBITDA anticipated up 115% on 25% sales growth
PITTSBURGH, Nov. 03, 2025 (GLOBE NEWSWIRE) -- L.B. Foster Company (NASDAQ:FSTR), a global technology solutions provider of products and services for the rail and infrastructure markets (the "Company"), today reported its 2025 third quarter operating results.
Third Quarter 2025 Highlights
Three Months EndedSeptember 30,
Change
2025
2024
2025 vs. 2024
(Unaudited)
Net sales
$
138,286
$
137,466
0.6
%
Operating income
8,295
7,323
13.3
%
Net income attributable to L.B. Foster Company2
4,354
35,905
(87.9
)%
Adjusted EBITDA1
11,359
12,327
(7.9
)%
Net cash provided by operating activities
29,181
24,744
17.9
%
Free cash flow1
26,372
21,677
21.7
%
Total debt
58,722
68,544
(14.3
)%
Gross Leverage Ratio1
1.6x
1.9x
(0.3)x
New orders, net1
$
114,776
$
95,973
19.6
%
Backlog1
$
247,416
$
209,005
18.4
%
Financial Guidance Update
2025 Full Year Financial Guidance
Low
High
Net sales
$
535,000
$
545,000
Adjusted EBITDA1
$
40,000
$
42,000
Capital spending as a percent of sales
~2.0
%
~2.0
%
Free cash flow1
$
15,000
$
20,000
CEO Comments
John Kasel, President and Chief Executive Officer, commented, "We continued on a favorable trend in the third quarter, although the modest sales growth resulted in lower profitability compared to last year's high point realized in Q3. Sales were up 0.6%, while Adjusted EBITDA was down 7.9% driven primarily by lower margins for Precast Concrete within Infrastructure. Rail margins were also slightly lower, but this was primarily volume-timing related. With the improved customer demand and higher backlog in place, we expect a strong fourth quarter for both segments."
Mr. Kasel continued, "We remain focused on our strategic execution to leverage our cost base, with containment measures reducing the SG&A percentage of sales to 16.0% for the quarter. We also had an exceptional quarter of cash generation despite the choppy operating environment, with $26.4 million in free cash flow funding a $22.9 million reduction in total debt during the quarter and $4.7 million deployed to repurchase 1.7% of our common shares outstanding. As a result, our gross leverage declined to 1.6x at quarter end, down from 2.2x at the beginning of the quarter and 1.9x last year. The second half of the year is normally a strong cash generation period for us and we expect the favorable results delivered in the third quarter to continue through year end."
Mr. Kasel concluded, "We've delivered two consecutive quarters of modest sales growth, although achieved solely within the Infrastructure segment. Our updated 2025 guidance assumes robust sales growth and profitability improvement in both segments in the fourth quarter, led by North American demand recovery for our Rail segment. The Rail backlog is up 58.2% over last year and demand is up across all business units. While Infrastructure backlog is down 10.9%, the decline is due primarily to the cancellation of longer-term orders. Despite this reduction, current demand activity remains relatively strong for both Infrastructure business units. Our updated guidance assumes fourth quarter Adjusted EBITDA will be up approximately 115% on 25% sales growth at the mid-points. We also expect approximately $12M in free cash flow in the fourth quarter based on the revised guidance mid-point, which we expect to deploy to continue our share buy backs and further reduce leverage to a target range of 1.0x - 1.5x by year end. We look forward to a strong finish to 2025 and expect to carry the positive sales momentum with expanding profitability into 2026."
1See "Non-GAAP Disclosures" at the end of this press release for a description of and information regarding Adjusted EBITDA, gross leverage ratio per the Company's credit agreement, new orders, net, backlog, book-to-bill ratio, net debt, free cash flow, and related reconciliations to the comparable United States Generally Accepted Accounting Principles financial measures. 2Net income attributable to L.B. Foster Company for the three months ended September 30, 2024 includes a $30.0 million favorable tax valuation adjustment.
Third Quarter 2025 Consolidated Results
The Company's third quarter performance highlights are reflected below:
Three Months EndedSeptember 30,
Change
PercentChange
2025
2024
2025 vs. 2024
2025 vs. 2024
(Unaudited)
Net sales
$
138,286
$
137,466
$
820
0.6
%
Gross profit
31,066
32,758
(1,692
)
(5.2
)
Gross profit margin
22.5
%
23.8
%
(130) bps
(5.5
)
Selling and administrative expenses
$
22,077
$
24,289
$
(2,212
)
(9.1
)
Selling and administrative expenses as a percent of sales
16.0
%
17.7
%
(170) bps
(9.6
)
Amortization expense
694
1,146
(452
)
(39.4
)
Operating income
$
8,295
$
7,323
$
972
13.3
Net income attributable to L.B. Foster Company
4,354
35,905
(31,551
)
(87.9
)
Adjusted EBITDA1
11,359
12,327
(968
)
(7.9
)
New orders1
$
114,776
$
95,973
$
18,803
19.6
Backlog1
$
247,416
$
209,005
$
38,411
18.4
Net sales for the 2025 third quarter increased $0.8 million, or 0.6%, over the prior year quarter. The increase was driven by sales growth in the Infrastructure Solutions ("Infrastructure") segment, improving $2.5 million, or 4.4%, over the prior year quarter. Partially offsetting these improvements were sales volume declines in the Rail, Technologies, and Services ("Rail") segment which declined $1.7 million, or 2.2%, from the prior year quarter.
Gross profit for the 2025 third quarter decreased $1.7 million, or 5.2%, from the prior year quarter. The decline in gross profit was due to lower volumes in Rail, coupled with unfavorable sales mix and higher manufacturing costs within Infrastructure. Gross profit margins declined 130 basis points to 22.5%.
Selling and administrative expenses for the 2025 third quarter decreased $2.2 million, or 9.1%, from the prior year quarter. The decrease is attributed to lower personnel costs and general administrative spending of $0.4 million and $0.6 million, respectively. In addition, selling and administrative expenses in the prior year quarter includes $0.4 million in corporate costs associated with a resolved legal matter and $0.8 million in employee-related restructuring costs. Selling and administrative expenses as a percentage of net sales decreased 170 bps to 16.0% in the current quarter.
Operating income for the 2025 third quarter improved $1.0 million, or 13.3%, compared to the prior year quarter. The improvement was due to lower selling and administrative expenses and amortization expense more than offsetting lower gross margins.
Net income attributable to the Company for the 2025 third quarter decreased by $31.6 million, or 87.9%, from the prior year quarter due primarily to a $30.0 million favorable tax valuation allowance adjustment recorded in the prior year quarter.
There were no adjustments to EBITDA1 in the third quarter of 2025, while the third quarter of 2024 was adjusted for $0.9 million of employee-related restructuring costs and $0.4 million for certain legal expenses. Adjusted EBITDA for the 2025 third quarter decreased by $1.0 million, or 7.9%, from the prior year quarter.
Cash provided by operating activities totaled $29.2 million in the 2025 third quarter, an increase of $4.4 million over cash provided by operating activities of $24.7 million in the prior year quarter.
Total debt as of September 30, 2025 was $58.7 million, a $22.9 million decrease during the quarter and a $9.8 million decrease from the prior year quarter. The Company's Gross Leverage Ratio per its credit facility was 1.6x as of September 30, 2025, down from 1.9x last year.
New orders, net for the 2025 third quarter increased $18.8 million, or 19.6%, over the prior year quarter, with the increase realized in the Rail segment. The trailing twelve month book-to-bill ratio1 was 1.08 : 1.00. Backlog increased $38.4 million, or 18.4%, compared to last year due to improvement in the Rail segment.
Third Quarter 2025 Business Results by Segment
Rail, Technologies, and Services Segment
Three Months EndedSeptember 30,
Change
PercentChange
2025
2024
2025 vs. 2024
2025 vs. 2024
Net sales
$
77,788
$
79,498
$
(1,710
)
(2.2
)%
Gross profit
$
17,746
$
18,471
$
(725
)
(3.9
)
Gross profit margin
22.8
%
23.2
%
(40) bps
(1.7
)
Segment operating income
$
5,895
$
4,933
$
962
19.5
Segment operating income margin
7.6
%
6.2
%
140 bps
22.6
New orders1
$
86,360
$
52,675
$
33,685
63.9
Backlog1
$
140,233
$
88,663
$
51,570
58.2
Net sales for the 2025 third quarter decreased $1.7 million, or 2.2%, from the prior year quarter. The decline was primarily driven by $2.8 million lower sales volumes in the Rail Products business, coupled with weakness in the United Kingdom ("UK") portion of Technology Services and Solutions ("TS&S") with sales down $4.3 million as we continue to right-size this business. Partially offsetting were sales increases of $1.8 million, or 9.0% for Global Friction Management and $3.6 million, or 135.1% for Total Track Monitoring.
Gross profit for the 2025 third quarter decreased $0.7 million from the prior year quarter, and gross profit margins declined 40 basis points to 22.8%. The gross profit was impacted by lower sales volumes and unfavorable business mix.
Segment operating income for the 2025 third quarter increased $1.0 million over the prior year quarter due primarily to declines in selling and administrative expenses and lower amortization expense.
New orders, net increased $33.7 million due to improved demand across all business units. Rail Products and Global Friction Management improved 35.9% and 4.3% over the prior year quarter, respectively. TS&S new orders improved $25.0 million due to a large, multi-year order received in our UK business. The trailing twelve month book-to-bill ratio was 1.18 : 1.00. Backlog increased $51.6 million over the prior year quarter.
Infrastructure Solutions Segment
Three Months EndedSeptember 30,
Change
PercentChange
2025
2024
2025 vs. 2024
2025 vs. 2024
Net sales
$
60,498
$
57,968
$
2,530
4.4
%
Gross profit
$
13,320
$
14,287
$
(967
)
(6.8
)
Gross profit margin
22.0
%
24.6
%
(260) bps
(10.6
)
Segment operating income
$
4,147
$
5,110
$
(963
)
(18.8
)
Segment operating income margin
